BusinessMirror July 16, 2015

three-time rotary club of manila journalism awardee 2006, 2010, 2012

U.N. Media Award 2008

BusinessMirror

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A broader look at today’s business Saturday 18, July 201416, Vol.2015 10 No. 40

Thursday, Vol. 10 No. 280

ECONOMISTS SAY REGULATIONS, TAX REGIME LIMITING INVESTMENT INFLOWS

PHL only ‘half-open’ when it comes to FDI A

By Bianca Cuaresma

lthough foreign investors have expressed their desire to put up hard investments in the Philippines, the country is just not ready for it.

This was the sentiment shared by experts in academe and private sector in the recent ADR Institue discussion on the role of exports and foreign direct investments (FDI) in the country’s development in Makati City.

The think tank, which special-

izes in strategic and international studies, described the country as “half-open” for investment inflows, particularly from foreign players.

“The limits set by the country’s Constitution on foreign equity in real estate and in key industries have set

GETTING READY FOR SONA Workers are putting the finishing touches on the logo of the

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House of Representatives in preparation for the President’s State of the Nation Address. NONOY LACZA

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Remittances kept well above 5 percent in May

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oney sent by Filipino migrant workers broadly maintained its pace of growth in May, averaging more or less 5 percent for the month after having wildy gyrated early on in the year.

Data from the central bank on Wednesday showed remittances totaling $2.1 billion for the month, representing growth of 5.8 percent from year-ago remittances of only $198 billion.

In April this year the remittances grew 5.1 percent, aggregating $2.015 billion.

The remittances in May brought the total sent home by migrant workers in the first five months to $9.906 billion. This was 5.4 percent higher than the $9.39 billion reported in the same period last year.

“Remittanes remained resilient on the back of sustained demand for skilled Filipino manpower overseas,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.

In particular, cash remittances

from land-based workers totaled $7.5 billion during the period, representing growth of 5.9 percent from 2014, while money sent by sea-based workers totaled another $2.4 billion, or 4.1 percent higher than last year.

The major sources of cash remittances were the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Hong Kong and Canada.

T he B SP quoted a pre l iminary report from the Philippine Overseas Employment Administration (POEA) indicating that total job orders reached 386,163, of which 35.4 percent were mainly for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, Qatar, Taiwan and the United Arab Emirates.

Meanwhile, personal remittances in May rose 5.5 percent year-on-year to $2.3 billion. Personal remittances are those sent in the form of cash or in kind. Bianca Cuaresma

DAR’s P130-million tractor deal

armers toil under the scorching heat of the sun almost all day. Yet they can barely survive and make ends meet.

Rico Dagli has been a farmer for more than 20 years now. He’s been depending on carabaos to till his land. All this hard work would bring home P6,000 to his family each month.

Hundreds of farmers in Negros Oriental, like Dagli, have long been waiting for help from the government. And just this year, farm tractors from the Department of Agrarian Reform finally arrived.

Regulatory Administration (SRA).

But SRA Administrator Regina Martin, says it had two recommendations back then the 90-horsepower for average-sized farms and 120-horsepower for bigger farms.

Wrong tools

Not their kind of tractor

Some are happy about the tractor deal.

“Malaking tulong sa amin yung traktora na naibigay sa amin,” says Freddie Salgon, chairman of Hacienda Carmen. “Sa katotohanan, yung sugar cane na ngayon tinatanim namin naging productive.”

But others aren’t happy.

“Yung proposal nga po na 90-horsepower mas maganda sa amin,” says Dagli. “Eh pagdumating na ang traktora eh 120-horsepower. Eh hindi na siguro kami mamimili.”

Farmers say they were not forced to accept the tractors. But it appears they were barely left with a choice.

Local cooperatives in Negros Oriental say they requested for 90-horsepower farm tractors, which would have been more suitable for their average sized farms.

But DAR bought 120-horsepower tractors instead.

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Favored bidder?

In buying the tractors, commonly used for big farms, the government may have wasted P131 million in the Visayas region - P36 million in Negros Oriental alone.

Based on the bidding documents of the Department of Agriculture in 2013, a 90-horsepower tractor with tools cost about P2.2 million.

DAR purchased 120-horsepower tractors at P3.98 million each.

Farmers say the government could have saved P1.78 million per unit if they had bought tractors with less horsepower.

Negros Oriental Rep. Henry Pryde Teves, who is a farmer himself, claims that ill-suited tractors were purchased to favor a particular bidder - Equity Machineries, Inc.

The company has yet to give its comment.

PESO exchange rates n US 45.2050

Other suppliers, Teves says, were capable of supplying 120-horsepower tractors. But they just didn’t have any in stock because they were not very easy to sell because they use up a lot of fuel.

So there was only one supplier of these tractors.

DAR Undersecretary Perry Villanueva denies there was a favored bidder.

“We are aware that there are bidders who are not capable of complying with the requirements for turbo-charged and fuel-injected engines,” Villanueva says. “However, the purpose of procurement is not to accommodate everyone, so long as the bidding is competitive.”

He adds that the tractors were purchased based on the recommendations of the Sugar

There’s also another problem.

The tools that DAR purchased are for 90-horsepower tractors - not for the high-powered 120-horsepowered ones. These included disk harrows.

“Not having the right tools would not let you have the right output in the operation,” Martin says. “With a heavy tractor, you’ll need also a heavy farm implement. If not, it will just fly.”

Farmers say they have no choice but to use the tractors - even if they’re the wrong kind, even if it will cost them more - to help the government not further waste millions of pesos.

No choice

Some farmers, though, say they could have put to better use the P1.78 million per tractor that the government could have saved if it bought 90-horsepower units.

Tony Castillo, president of San Julio Cooperative, says with just P1 million a farmer could buy an irrigation unit or a second-hand truck. He himself could have bought three second-hand trucks.

The question is: Why didn’t they complain?

The farmers signed a survey document for the purchase of 120-horsepower tractors before

bidding took place. But the survey says they can’t be assured of a replacement if it turns out that the tractors weren’t what they need.

Castillo says, though, that the farmers were allowed to specify what they needed.

But then the tractors that arrived were 120-horsepower tractors.

“Nandiyan na yan eh,” he says.

And if they refused to accept the tractors, there was no assurance that they would be given a second set.

Agrarian Reform Undersecretary Perry Villanueva, said, however, that the farmers were not forced to sign the document.

He also denies that the bidding was rushed, as Representative Teves insisted, saying that the bidding took less than 15 days rather than the more usual one to four months

But Villanueva says there was an emergency.

“It was intended for the provinces affected by [Typhoon] Yolanda,” he says.

Teves was able to push for a congressional inquiry into the deal. The House of Representatives has already started the process.

If there is an issue or exposé you would like to disclose, contact jundelrosario@gmail. com or 09997720991/09063261921.

For more investigative reports, watch Headline News at 7 AM, Newsroom at 12 noon, Network News at 6 PM and Nightly News at 9 PM or visit cnnphilippines.com/investigative.

n japan 0.3664 n UK 70.6825 n HK 5.8325 n CHINA 7.2807 n singapore 33.2072 n australia 33.6923 n EU 49.7617 n SAUDI arabia 12.0534 Source: BSP (15 July 2015)

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Thursday, July 16, 2015

US govt to seize $12.5-M Napoles assets in California

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he US Department of Justice took action on Tuesday to seize $12.5 million in California property and assets from a businesswoman who is at the heart of a massive corruption scandal in the Philippines.

The agency filed a civil forfeiture complaint, contending that Janet Lim-Napoles bought the assets for herself and her daughters with a decade’s worth of stolen money intended to fight poverty in the Philippines.

The assets include a motel near Disneyland; properties in Covina and Irvine; money from the sale of a Los Angeles luxury condominium; a Porsche; and a stake in a Californiabased consulting company.

“The Justice Department will not allow the United States to become a playground for the corrupt or a place to hide and invest stolen riches,” Assistant Attorney General Leslie R. Caldwell said in a statement.

Authorities contend that from 2004 to 2012, Napoles bribed Philippine officials in order to obtain more than $200 million in funding to dummy aid groups for sham development projects.

In the Philippines, Napoles, two of her children and numerous current and former officials—including senators and government ministers—have been charged in connection with what has been nicknamed the “pork-barrel scam.”

Corruption has plagued the poverty-stricken nation of 97 million for decades, fostered by a culture of impunity by powerful politicians, business people and their allies, weak law enforcement and a notoriously slow justice system.

President Aquino came to office in 2010, pledging to break from the corruption of the nation’s past, but few top officials have been prosecuted.

Napoles, who has pleaded not guilty in the corruption case, is currently serving up to 40 years in prison in the Philippines after being convicted of illegally detaining a relative who was a whistle-blower. AP

Japanese bills would expand military’s role

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OKYO—A Japanese parliamentary committee approved legislation that would expand the role of Japan’s military on Wednesday after Prime Minister Shinzo Abe’s ruling bloc forced the vote in the face of vocal protests from opposition lawmakers and citizens.

Opposition lawmakers tried to stop the committee vote, as hundreds of citizens protested outside.

The unpopular legislation was crafted after Abe’s Cabinet adopted a new security policy last year that reinterpreted a part of Japan’s post-World War II constitution that only permitted the nation’s military to use force for its self-defense. The bills in question would allow Japan to also defend aggression against its allies—a concept called collective self-defense.

Abe has argued that Japan should better prepare for China’s regional threat and do more to contribute to international peacekeeping efforts. But opponents, including legal experts and academics, counter that the new interpretation is unconstitutional. AP

PHL only ‘half-open’ when it comes to FDI. . . up a half-open and restrictive business environment that has frustrated the influx of much-needed FDI,” ADR Institute said.

It added that if the Philippines is to promote itself as an investment destination, the country must bring its regulations to global standards.

And relaxing the foreign-ownership rule is key among these.

“We really are not friendly to

foreign investors,” University of the Philippines School of Economics Prof. Ramon Clarete said, citing instances of confusing and incoherent government regulations.

He also said the country’s corporate income-tax rate is the highest in the region.

“We hear the market [players] always say the tax rates in the Philippines are not competitive,” said

Clarete, one of the discussants in the forum.

Likewise, Philippine Institute for Development Studies President Gilbert Llanto said that even though incentives and special pocket areas for development are being built in the country to attract FDI, foreign investors are still hesitant, as the majority of the human-resource pool are still in Metro Manila, which is—as

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described by some experts—already heavily congested.

“This country knows what needs to be done. We just have to do it,” SGV & Co. Head of Tax and General Counsel Wilfredo Villanueva said.

The Bangko Sentral ng Pilipinas reported earlier that April FDI inf lows declined by 43 percent compared to the same period in 2014.

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Madrid Fusión. . . marinaded in vinegar and soy sauce) and lechon (spit-roasted whole pig) as some of the popular dishes in the country. The top destination was Taiwan.

Always cited as the next“it”cuisine by foreign-food reviewers and gastronomy experts, Philippine cuisine has been recently featured in several international food festivals in Washington, D.C., and New York.

During Monday’s MFM 2016 MoA signing at the Fairmont Hotel ballroom in Makati City, the DOT also thanked sponsors of this year’s event, including industry partners and local chefs who participated in the event as presenters and coorganizers. Each received a plaque of appreciation, topped by a miniature native palayok (clay pot for cooking). Among the chefs recognized were Fernando Aracama, J.C. de Terry, Margarita Fores, J. Gamboa, Jose Luis Gonzales, Pepe Lopez, Rob Pengson, Bruce Ricketts, Myrna Seguismundo and Claude Tayag.

“We’re very thankful for all the sponsors that have been recognized today,” Jimenez said. “And the important thing for us to stress is that success does not come easily. People love to applaud and laugh but many people in this room know that Madrid Fusión Manila was not an accidental occurrence; it required the painstaking work of so many people.”

Key officials who signed the MoA were Jimenez, DOT Undersecretary for Tourism Development Benito Bengzon Jr., DOT Director for Market Development Verna Buensuceso, Lourdes Plana of Foro de Debate, and Iñigo Cañedo and Mielle Esteban of Arum.

According to a briefing paper from Jimenez’s office, what was signed “an Extension Agreement [to] hold another Madrid Fusión Manila event in 2016, pursuant to the principal [Gastronomic Event Collaboration Agreement signed

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in July 2014] allowing the parties to hold the event for further periods of one year to five years, subject to favorable assessment of the DOT.” DOT officials, however, declined to reveal the budget for MFM 2016, as well as the amount it spent for this year’s affair.

In a separate interview, Buensuceso said: “We are still working on budgets.

We’re not yet done [auditing what was spent this year].” MFM 2015 was held from April 24 to 26.

She added that many of the sponsors of this year’s event “have signified their interest to partner with us again” for MFM 2016.

On the possibility that the delegate fees would be reduced, one of the issues raised especially by culinary students, Buensuceso said: “This will still be studied. But based on feedback we received, many now understand why the rates [this year] were pegged that way.”

MFM 2015 attracted chefs, bakers, culinary students, food suppliers and retailers to the gastronomy congress, who paid P11,000 to P20,000 per person just to attend the sessions.

This year’s event generated 1,381 congress delegates from 22 countries; 88 exhibiting companies with 167 exhibition booths; 4,106 trade visitors; and 68 Flavors of the Philippines Festival parallel activities.

The trade exhibit encouraged Spanish food firms and suppliers to touch base with potential Filipino distributors, while serving as a showcase for Filipino food and beverage companies—from small to medium enterprises, as well as large food firms—for their products, most of which were sold to delegates and the public on the last day of the event.

Jimenez has said he hopes to make MFM an annual event, and is working toward having the Philippines included in the prestigious Michelin Guide.

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Editor: Dionisio L. Pelayo • Thursday, July 16, 2015 A3

General linked to Jonas Burgos disappearance new Army chief

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By Rene Acosta

RESIDENT Aquino installed on Wednesday a general linked to the disappearance of activist Jonas Burgos as Army commander.

Maj. Gen. Eduardo Año assumed command of the Army vice Lt. Gen. Hernando Irriberri, who was earlier installed Armed Forces chief of staff.

Both belong to Philippine Military Academy Class of 1983.

Militant groups and the humanrights advocate Karapatan claimed that Año is a human-rights violator and is involved in the disappearance of activist Jonas Burgos.

Año formerly commanded the Intelligence Service Group of the Army and the Intelligence Service Armed Forces (Isafp) and the 10th Infantry “Agila” Division, which had been responsible behind the neutralization of top rebel commanders in Compostela Valley and the Davao provinces.

While being 10ID commander, he also headed the “Task Force Minion,” the military project that neutralized top Mindanao rebel commander Leoncio Pitao, alias Command-

er Parago, more than a week ago in Paquibato District, Davao City.

The new Army commander had been AÑO accused by Karapatan of involvment in the kidnapping of Burgos in April 2007 in Quezon City. Burgos remains missing. Año has denied the accusations.

In his assumption speech, Año vowed to transform Army soldiers into dependable and credible fighting individuals, while pursuing needed reforms and programs, including those that have been started by Iriberri, his predecessor.

“We will increase our stride toward the third ATR [Army trans-

formation road map], which envisions a well-equipped army… a land power capable of multidimensional operations, which include humanitarian assistance and disaster response,” he said.

“Our soldiers are our best assets, we will train and equip them to their best fighting potential,” he added.

The training and equipping of soldiers were among the thrusts of Año’s leadership, which included protecting the gains of the counter insurgency operations; development of the Army’s territorial defense capabilities; improvement of the organization and securing next year’s elections where soldiers should be apolitical.

“We will entrust the strategic objectives to the Internal Peace and Security Plan Bayanihan and protect the gains it has made in the past years,” he said.

Año noted that “out of the 76 CPP-NPA-NDF [Communist Party of the Philippines-New People’s Army-National Democratic Front] affected provinces in the country, 60 have already been declared as conflict-manageable and ready-forfurther-development provinces, a remarkable 78 percent.”

“While in the South, we will ac-

tively support the government’s peace initiatives and create partnership to complement the triumphs we have achieved, all these in honor of the sacrifices our soldiers have made and prove our maturity as an organization by showing our willingness to give enduring peace a fighting chance,” he said.

The Army commander said he would continue the “parallel” development of the Army’s territorial defense and internal security operation capabilities in order to enhance and ensure its ability to attain the goals that were set by the country to the organization.

“The Philippine Army, in defense of our sovereignty and territory, defends the land domain. We defend the strategic depth of this country to where our people, government, socioeconomic systems, and where the very essence that define us as a nation reside,” he said.

“Thus, we need to develop complementing capabilities for both internal and external defense. In this regard we will develop a modern army capable of addressing low to high intensity conflict, a land component that is adaptable and resilient to the ever changing security environment, both internal and external,” he added.

Party-list group asks SC to stop PHL military exercises with Japan

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PARTY-LIST group on Wednesday filed a petition before the Supreme Court (SC) seeking to stop the government from further conducting joint military exercises with the Japanese military without any treaty.

In a 37-page petition for certiorari and prohibition, the petitioner Alliance of Concerned Teachers also sought the issuance of an immediate relief from the SC through a tempporary restraining order or a writ of preliminary injunction enjoining the respondents from implementing the Memorandum on Defense Cooperation and Exchanges between the Ministry of Defense and the Philippines’s Department of National Defense that was signed in January 29 in Tokyo, as well as the Japan-Philippines Joint Declaration: A Strengthened Strategic Partnership for Advancing the Shared Principles and Goals of Peace, Security, and Growth in the Region and Beyond.

Named respondents in the petition were President Aquino; Defense Secretary Voltaire Gazmin; Executive Secretary Paquito Ochoa Jr.; Lt. Gen. Hernando Iriberri, Armed Forces chief of staff; and Vice Admiral Jesus Millan, Navy flag officer in command.

The party-list group argued that the memorandum and the joint declaration were both unconstitutional insofar as they allow the pres-

ence of foreign military troops and facilities in the country without a treaty pursuant to Section 25, Article XVIII of the 1987 Constitution.

The memorandum, according to petitioner, permits the presence of Japanese military forces inPhilippineterritoryforcapacity-building,training activities and exercises, service-to-service exchanges, activities for cooperation on defense equipment and technology, and the like.

On the other hand, the joint declaration states that the Philippine and Japanese governnments will “expand their security operation” through expansion of bilateral and multilateral trainings and exercises for capacity-building in areas including those covered by the memorandum.

“The substance of the memorandum and the joint declaration, given that they bring the presence of Japanese military troops in the Philippine territory, require that they be via treaty. Being merely in the form of nonbinding agreements, and not having been submitted to the Senate for concurrence and to Congress for deliberation on whether the treaty requires ratification by the people in a national referendum, they should be held unconstitutional, insofar as they are being used as legal bases for the holding of military exercises with the Japanese military,” the petitioner said. Joel R. San Juan

Economy

A4 Thursday, July 16, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

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Income-tax cut is Aquino’s best farewell gift–lawmakers

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By Jovee Marie N. dela Cruz

wo leaders of the 16th Congress on Wednesday said that lowering personal income-tax rates is the “best good-bye gift” that President Aquino can give to Filipinos before his term ends.

House Committee on Ways and Means Chairman and Liberal Party Rep. Romero Quimbo of Marikina City and Senate Committee on Ways and Means Chairman Sen. Juan Edgardo M. Angara are both pushing for bills lowering individual income-tax rates.

“I’ve been campaigning for the lowering of taxes not because it’s popular but simply because it is just and long overdue. It is the best example of inclusive growth.

It will be remembered as the

President’s most lasting legacy,” Quimbo said in a text message.

Angara, in a news statement, said that “of the thousands of words in his Sona [State of the Nation Address on July 27], one of the most awaited and the one which will be most applauded is the President saying that he will back bills that will lower individual income taxes.”

The two lawmakers, who are both authors of the tax measure in their respective chambers, said the Philippines has the second highest

individual income-tax rate in the region at 32 percent, next to Thailand and Vietnam’s 35 percent, and the highest value-added tax (VAT) at 12 percent.

They added that the country’s current individual income-tax bracket has remained unchanged since 1997 until today, even when the consumer price index has already almost doubled.

Currently, there are 13 pending bills in the lower chamber seeking to amend the National Internal Revenue Code. In Quimbo’s bill, individuals earning below P180,000 annually will be exempted from paying income tax. In the current setup, those earning P10,000 or less per month pay a 5-percent income tax.

Quimbo’s version also reduces the income-tax rate of those earning above P180,000 to 5 percent.

The highest rate, at 32 percent, will be paid by those earning P1.4 million annually. Currently, those with yearly earnings of P500,000 and above pay a 32-percent income tax.

Quimbo vowed that the lower chamber will pass the bill lowering individual rates this 16th Congress.

Moreover, Angara said there are three measures pending before his panel that seek to address the “grossly unfair and inequitable” income-tax system. He said these bills seek to compress the net taxable income brackets and lowering tax rates, especially for low- and middle-income earners.

“We need to think ahead and be competitive in the region but, more important, we must give the Filipino people a break. Currently, a policeman and a teacher, whose net taxable income is P150,000, are taxed at the third highest rate,” the Senator said. This injustice, Angara said, is called “bracket creep,” where taxpayers who are not considered high earning are already pushed into high brackets.

At some point, economists say, this bracket creep would lead to “fiscal drag,” where people will not have any purchasing power left to

contribute to the economy due to excessive taxation, the senator said.

Earlier, the BusinessMirror published a report, titled “Bills lowering income tax trashed,” saying the Aquino administration’s Cabinet Cluster on Economic Development has already thumbed down the proposal lowering individual income-tax rates.

The report added that the Department of Finance (DOF) is allegedly blocking the passage of the proposal due to its revenue implications. The Aquino administration has just enacted the law raising the cap for tax-exempt bonuses to P82,000 from P30,000. The DOF had said this would already result in revenue loss to the government of about P30 billion a year.

But Quimbo said that Congress, although dominated by allies of President Aquino, is an independent body and can pass the measure lowering individual tax freely.

Meanwhile, Angara said President Aquino’s mention of tax reforms in

his Sona could mobilize support from the members of the Lower House, ending the embargo in serious discussion for lower tax rates.

In making one final push for lower income taxes, the senator also calmed concerns by revenue officers that altering tax rates will punch a big hole in the coffers.

“Any revenue loss is recoverable.

If withholding tax is converted into disposable income, then it can be recouped through the VAT on goods.

If part of the salary intended to be remitted to the BIR [Bureau of Internal Revenue] will now be spent for goods, then it can still be recaptured through the tax on the goods bought,” Angara said.

“It will also be good for the economy. It is always better to plow money back in circulation, where it can stimulate the production and consumption of goods. Sometimes, instead of the government doing the spending for the people, let the people do the spending themselves,” he said. With Recto Mercene

Neda, DBM ink evaluation policy framework for govt programs, projects

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he National Economic and Development Author it y (Neda) and the Department of Budget and Management (DBM) signed on Wednesday the National Evaluation Policy Framework that calls for the purposive conduct of independent evaluation of government programs and projects.

“With numerous programs and projects being implemented, the government needs to determine

whether, and to what extent, these benefit the people and the country,” Economic Planning Secretary Arsenio M. Balisacan said during the signing of the joint memorandum circular with Budget Secretary Florencio B. Abad at the Neda Central Office in Pasig City.

“This evaluation policy framework is part of a comprehensive good governance agenda that complements reforms in planning and

budgeting,” Balisacan said.

“While we exert our best efforts to ensure that resources are efficiently allocated, we also need to make sure that what we spend on are actually delivering positive results,” he added.

“This joint memorandum circular is a significant step toward improving the evaluation practice in the country.

This and other monitoring and evaluation mechanisms are important in assessing the progress of our devel-

opment goals, and in determining whether our initiatives are making significant impact on the lives of the Filipino people,” said Balisacan, who is also Neda director general.

The said framework, developed by the Neda and DBM, with support from the United Nations Children’s Fund, structures the purposive conduct of evaluations in the public sector. By the use of standardized evaluation procedure,

projects and programs nationwide will be assessed in terms of their efficiency, outcomes and impacts based on national priorities.

Implementing agencies will use the evaluation findings for recommendations and appropriate management response, including followthrough actions by concerned units.

Results will also be utilized as inputs to planning, budgeting and designing of subsequent similar projects.

The policy framework applies to programs and projects being implemented by all government agencies, including state universities and colleges, government-owned and/or -controlled corporations and government financial institutions.

Civil society organizations and other third parties’ programs and projects contracted by a government implementing agency are also involved. PNA

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PHL aims to achieve SDG targets by 2030

By Cai U. Ordinario

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he national government aims to complete a financial plan next year to enable the country to meet the Sustainable Development Goals (SDGs) in 15 years.

National Economic and Development Authority (Neda) Assistant Director General Rosemarie Edillon said the government will start work on the SDGs by January 2016 through the creation of the financial plan.

“In our case, we want the same strategy, which is to grow first the economy so we can have the fiscal space to finance all these programs and projects,” Edillon told the BusinessMirror in a phone interview on Wednesday.

Setting up a financing plan to meet the SDGs is one of the lessons learned in the country’s efforts to meet the Millennium Development Goals (MDGs) over the last 15 years.

Based on the country’s experience, Edillon said public spending on social services between 2000 and 2003 contracted on an annual basis. Between 2004 and 2010, the government’s social spending only increased 1.1 percent in real per-capita terms.

Under the current administration, Edillon said social spending increased around 13 percent in terms of real per-capita spending year-on-year.

“More than the rhetoric, you really need to allocate funds for that,” Edillon said.

Edillon said the government is also keen on pursuing disaster-risk financing, wherein reconstruction efforts after disasters like Supertyphoon Yolanda in 2013 would be covered by disaster insurance.

The Neda official said the Philippines is urging other countries to join its cause in pushing for the creation of this global disaster insurance to make it financially viable for countries to access.

“Ang problema kasi kung tayo lang ang nandun, medyo mahal ang premium, but if we can get many other countries to get into the picture, bababa ’yung risk premium na ’yun,” Edillon said.

This can also be accompanied by disaster-risk financing for local government units (LGUs) that will allow them to respond to calamities.

Currently, Edillon said, the government has a calamity fund. But based on the country’s experience with recent disasters like Yolanda, the costs are higher than expected.

If LGUs can have their own disaster-risk financing, it could be cheaper for the government in the long run.

“All over the world, they estimate that we need over $3.4 trillion to finance the SDGs. Tapos ’yung available money is not even close to $1 trillion, kaya

pinag-uusapan pa ’yung means of implementation,” Edillon said.

Meanwhile, multilateral development banks (MDBs) and private institutions are making available at least $400 billion in the next three years to help countries achieve the SDGs by 2030.

MDBs, such as the Asian Development Bank (ADB), World Bank, European Bank for Reconstruction and Development and others, will pool some $400 billion in the next three years to support the world’s post2015 agenda.

The World Economic Forum (WEF) also disclosed that three blended finance initiatives, with a collective amount of $100 billion over the next five years, were launched at the United Nations Financing for Development Conference in Addis Ababa on July 15.

“Without resources, commitments will amount to little more than promises on paper. That is why it is encouraging that, this year, action starts here with you. You have recognized that, in a world in which both the global population and resource constraints are growing, development finance needs a reboot. This conference is the starting point for a new era of cooperation and global partnership,” United Nations Secretary-General Ban Ki-moon said in his remarks at the opening of the meetings in Addis Ababa.

The MDBs said they are willing to invest $2 to $5 more for every $1 they directly invest in private-sector operations. MDB development finance has grown from $50 billion in 2001 to $127 billion in 2015.

The WEF, on the other hand, said blended financing is a combination of private and public-sector financing. The three blended financing initiatives include the Sustainable Development Investment Partnership, a global partnership for sustainable infrastructure and other development needs.

The other two initiatives are Convergence and the RDFI Toolkit. Convergence is a virtual platform that helps facilitate blending finance capital flows to developing countries, while the RDFI Toolkit is a set of knowledge products that supports the mainstreaming of blended finance.

“This is a critical time for governments, the private sector and MDBs to come together to tackle the fundamental development challenges of our time,” ADB President Takehiko Nakao said. The Philippines serves as a founder of the regional bank and is the host of the ADB headquarters.

The SDGs, which replace the MDGs, is a set of 17 goals that are set to be adopted by the UN and its members by September this year at the UN headquarters in New York.

NREB seeks capacity limit on wind and solar projects

By Lenie Lectura

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HE National Renewable Energy Board (NREB) is proposing to put a cap on the capacity of wind and solar projects so the feed-in tariff (FiT) scheme could accommodate as many projects as it can.

NREB Chairman Pedro Maniego said during the Energy Smart Philippines 2015 Conference there is a discussion among the board members to put a 100megawatt (MW) cap on each wind power project and 50 MW for every solar project.

At present, there is no limit as to how big or small any of the renewable-energy (RE) projects should be. It is the sole discretion of the RE developers to develop as many RE projects as it can with no cap on capacity.

Aside from wind and solar, RE also includes biomass, geothermal, ocean and hydro. Maniego said though that the cap proposal is only for solar- and wind-power projects.

“We want to spread the projects over a wide number and to also increase the people who can pursue the technology later on,” Maniego said.

There is a 500-MW cap in allocation in all solar projects and 400 MW in all wind-power projects. “There is an existing allocation of 500 MW in solar. Now, if you put a 50-MW cap on per solar project then there will be 10 solar projects. This is what other countries are doing. They don’t want to limit the participants to a small number,” Maniego said.

NREB is the body tasked by the Renewable Energy Act of 2008 to recommend policies, rules and standards to govern the implementation of the law, which granted fiscal and nonfiscal incentives to RE projects.

Maniego said the 15-man board would still deliberate on this. “This is still subject to discussion. Once we have decided on this and approved by the board then we will submit it to the DOE [Department of Energy].

NREB is just a recommendatory body.”

It is the DOE that sets the installation targets for RE projects, while the Energy Regulatory Commission (ERC) decides on the FiT rate. “The DOE is the one implementing the installation targets although we are the one who recommends this to the ERC for

the basis of computing the FiT. The implementation and award of commerciality is still the DOE’s. So it’s up to them to come out with the rules in award of installation capacity,” he said.

He expects opposition from wind-project developers given the bigger capacity of current wind projects, as well as those in the pipeline, compared to other RE projects. “There might be some opposition from big developers. For wind, most of the developers are big. But I think 100 MW is already doable,” Maniego said.

The wind projects that have certificates of compliance under FiT are the following: the 150-MW Burgos wind farm of Energy Development Corp.; the 19.8-MW Bangui expansion of Northwind Power Development Corp.; and the 81-MW Caparispisan project of North Luzon Renewable Energy Corp.

The current FiT rate for wind projects is P8.53 per kilowatt-hour (kWh). The rate is linked to an installation target issued by the DOE of 200 MW, which was later raised to 400 MW. However, the total capacity of wind-projects built and commissioned or to be commissioned within the year exceeds 200 MW. To accommodate the increased capacity allocation of wind-power projects from 200 MW to 400 MW, NREB filed for an adjustment in FiT rates.

NREB initially applied for P9.49 per kWh and later on revised the proposed rate to P7.93 per kWh for the second batch of wind-power projects that have been commissioned or are to be commissioned within the year, totaling to 393 MW. The NREB assumed that the other wind projects that will be eligible under the second round of FiT are Trans-Asia Renewable Energy Corp.’s 54-MW Guimaras wind project; PetroWind Energy Inc.’s 36-MW Nabas wind farm; and Alternergy Wind One Corp.’s 54-MW Pililla wind project.

The FiT rate for solar was recently adjusted to P8.69 per kWh, after the capacity allocation was hiked to 500 MW, from the original P9.68 per kWh. FiT is the per kWh rate guaranteed to RE developers to ensure the viability of their projects. Consumers are the ones who shoulder this under FiT-Allowance, a separate line component in the power bills. They are now paying an additional P0.0406 per kWh since February this year.

Thursday, July 16, 2015 A5

Palace ready to defend P494-billion lump-sum allocations in ’15 budget

M

By Butch Fernandez

alacañang said it is ready to defend before the Supreme Court (SC) the multibillionpeso discretionary lump-sum items seen to disguise the outlawed pork barrel in the P2.6-trillion 2015 national budget should former Sen. Panfilo M. Lacson go ahead with plans to challenge its legality.

“We are prepared to fully justify these appropriations if challenged before the courts,” Communications Secretary Herminio B. Coloma Jr. said on Wednesday.

Coloma affirmed that Palace lawyers can sufficiently explain to the SC the inclusion of over P400-billion lump-sum funds in the 2015 General Approriations Act (GAA) that President Aquino earlier signed into law.

Asked if the Palace was prepared to justify the lump-sum discretionary items in the 2015 budget should Lacson make good his plan to question it before the SC, Coloma indicated that Malacañang was confident the budget law approved by Mr. Aquino could “pass public scrutiny.”

He added that the Palace was not surprised when Lacson bared plans to raise the issue before the High Court.

“Given his track record of being a

crusader against pork barrel, it is not surprising that Senator Lacson is wary and concerned about the possible misuse of lump-sum appropriations,” Coloma told the BusinessMirror, adding that the “the Aquino administration is holding itself accountable in terms of ensuring that public spending is fully justified, compliant with law and could pass public scrutiny.”

For his part, Palace Secretary Edwin Lacierda, President Aquino’s chief spokesman, took note of the timing of Lacson’s decision to bring the issue before the SC justices. “The budget of 2015 is halfway.” Lacierda said, adding that “the 2015 budget took cognizance of the SC decision” that outlawed the pork barrel.

DOTC lump sum

THE Department of Transportation and

Communications (DOTC) reiterated that only over P1 billion from its appropriation this year will go to disaster-related rehabilitation projects for immediate response and recovery-works provision in case of calamities that will hit the country.

Transportation Secretary Joseph Emilio A. Abaya said that “the correct total is only P1 billion and P18 million of lump-sum funds in the DOTC’s 2015 budget” and not as P11.4 billion as announced by Lacson, the former presidential assistant for rehabilitation and recovery.

“It is wrong to assume that lumpsum funds are wrong. Certainly, as we learned from the aftermath of Typhoon Yolanda [international code name Haiyan], we have to be prepared for calamities by having funding readily available,” he added.

As regard the agency’s budget reform initiatives, P53,519,699,000 out of its total appropriation of P54,537,699,000 are itemized.

Of the DOTC’s P1.018-billion lumpsump funds this year, the Quick Response Fund—amounting to P1 billion—is set aside for relief, rehabilitation and reconstruction program, including the transport of goods in calamity-stricken areas.

Covering disasters from the last quarter of 2014 up to the end of 2015, such standby fund is split into P7 million for maintenance and other operating expenses, and P3 million for capital outlay. With Roderick Abad

Opinion BusinessMirror

A6 Thursday, July 16, 2015

editorial

Japan is right to ramp up its military

I

n the face of widespread public opposition, Japanese Prime Minister Shinzo Abe is preparing to ram through measures to deepen security cooperation with the United States. Abe is right when he says such laws are vital to Japan’s security.

They also stand to benefit allies in need around the world, especially the US. However, the onus is on Abe to make that case to his confused and angry populace.

The raft of defense bills in question is meant to legitimize Abe’s reinterpretation of the country’s pacifist constitution and free up Japan’s military to support American and other allied forces in conflicts far from home. Opposition has swelled since early June, when a trio of well-regarded experts appeared before the Diet and questioned the legislation’s constitutionality. Eighty percent of Japanese citizens now say the government hasn’t explained the new measures or their implications well enough. Ruling party leaders have rudely dismissed constitutional concerns—some have even threatened to retaliate against unfriendly newspapers.

Abe is rushing the bills through the lower house, where his Liberal Democratic Party enjoys a two-thirds majority, precisely because he’s afraid they will founder in the upper house. This way, if the upper house doesn’t approve them within 60 days, the lower house will be able to ratify them on its own before the end of the current Diet session in late September.

Abe’s grandfather, Nobusuke Kishi, who was Japan’s prime minister in 1960, himself forced through a military treaty with the US against the popular will. Violent protests at that time led Kishi to step down. Abe, in contrast, has enough support in the Diet to ride out any backlash.

That doesn’t mean he won’t pay a price in political capital, however. He still needs to sell the controversial concessions he’ll have to make to complete the Trans-Pacific Partnership trade deal with the US, not to mention the tough structural economic reforms he keeps promising as part of his vaunted “third arrow.” An especially bitter fight could also make it harder for Abe and future leaders to carry out the new security laws.

At this point, there’s little chance that Abe will delay the bills until the next Diet session or call a referendum to confirm public support for the measures. But he can still use the time between now and the end of September to make clear to the Japanese people that the new measures are far more modest than they’re being made out to be. They open the door for Japan to participate in joint South China Sea patrols, for instance, and to provide for rear-area military support to allies. By being vague about the scenarios under which they might come into play, Abe only encourages people’s worst fears.

Ultimately, Abe’s real problem is a lack of public trust. Given his well-deserved reputation as a nationalist hardliner, voters expect that he will stretch whatever powers the new legislation gives him. He has a perfect opportunity to change this narrative in August, when he gives a widely anticipated speech marking the 70th anniversary of the end of World War II. While Japan’s territorial disputes with China, Russia and South Korea aren’t about to disappear overnight, a truly contrite message from Abe could go a long way toward easing the historical tensions that have long plagued relations in Northeast Asia. It would also alleviate Japanese citizens’ concerns about the prime minister’s hawkishness. Bloomberg editorial Since 2005

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The real problem in Greece John Mangun

OUTSIDE THE BOX

I

f you follow the global financial news, you are hearing a constant barrage about the huge debt that Greece has on its books. That is a fact; Greek debt is equal to 175 percent of its total annual economic output. But the debt is not the problem; it is only the symptom of the disease.

The problem in Greece and in many other European countries is the common currency—the euro.

The euro was fully adopted as the common currency for the European Union (EU) countries in 2002. Domestic currencies were converted into euros based on exchange rates at the time of conversion. A euro in Greece was “worth” the same as a euro in Germany. But the effect actually made German goods cheaper for the Greeks and Greek goods more expensive for the Germans.

Therefore, currency flows favored the German economy and were unfavorable to the economies of Greece, Italy, Spain, Portugal and Ireland.

The German Balance of Trade—net money flows for exports and imports—was relatively flat and constant until 2002. Then it exploded in favor of the Germans as all these other countries were buying German goods because they were comparatively cheaper than before the euro.

Germany, through the International Monetary Fund (IMF) and private institutions, loaned massive amounts of money to Greece in order to keep the money flowing to Germany. Greece and the others took on more and more debt to be able to continue to buy German goods.

Since 1971 following the decision of the US to discontinue allowing the dollar to be convertible to gold or silver, currencies were supposed to float against each other to balance money flows between nations. That decision has inaccurately been criticized for causing all the economic problems in the last 40 years. The opponents claim that gold is the one “currency” that always maintains its purchasing power and is anti-inflationary. That is not correct.

Gold as a currency is just like all other “fiat” money instruments where its purchasing power fluctuates with supply. During the Coloma, California Gold Rush, the price of an

egg in gold was the equivalent of $3, while 130 miles away in San Francisco, an egg was priced at US $0.02.

The conversion price for one ounce of gold was $20 in both towns. But in Coloma, there was so much gold that an oversupply created price inflation.

Floating exchange rates allow money to effectively move between countries, creating a balance. If Greece needs more German tourists to stimulate the Greek economy, previously they lowered the value of their currency to make traveling there cheaper for the Germans.

Filipinos, better than anyone else on the planet, should understand the Greek situation and why the Greek economic disaster has happened. Between 1983 and 1984, the Philippine peso devalued by 50 percent because no foreign money was flowing to the country after the Aquino assassination. A further devaluation was necessary in 1990 to keep the economy from totally collapsing in the wake of the 1989 coup attempt. The 1997 devaluation was necessary to keep the Philippines competitive with other regional neighbors.

But Greece has not had this critical option to bring money into the country since it joined the Euro Currency System in 2001. The only way it could effectively bring in enough cash was to borrow, and the crisis today is a result of that borrowing, which is a result of the single currency.

Damning Greece for its foolish gover nment spend ing is

appropriate. But if Greece had not been part of the euro system, Germany and the IMF would not have loaned the billions more in 2009, 2010 and 2012. Greeks would have had to work it out in part by a currency devaluation to attract money inflows.

The current price of a dozen eggs in Berlin, Germany is €2.52; the price in Athens, Greece is €4.04. Theoretically, it is obvious to which country is the money going to flow to buy eggs.

But if Greece had its own currency, it could devalue it to make eggs, hotels, restaurants and everything else cheaper.

In the mid-1990’s the Philippine peso exchange rate stayed in the mid-20’s to the dollar because that balanced the cash flow to be less negative for the country. For the 2000’s, the rate was in the mid50’s for the same reason. Now we are bouncing 45 to the dollar because that rate balances remittances and other inflows’ value, and keeps exports reasonably competitive.

A nation is only a sovereign state if it has clearly defined and accepted borders, and has control of its own currency. Greece and the others are now vassal states of Germany, the IMF and the EU. E-mail me at mangun@gmail.com.

Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

China’s economic troubles start to spread William Pesek

BLOOMBERG VIEW

S

ingapore is the closest thing Asia has to an economic barometer. Its highly open, trade-reliant economy usually signals when trouble is approaching the global stage. And at the moment, Singapore is flashing clear warning signs.

The city-state’s gross domestic product (GDP) plunged 4.6 percent last quarter, a downturn almost certainly triggered by China. Singapore’s plight may mark a dangerous inflection point not just for Asia, but for the entire global economy.

After the 2008 global crisis, China’s 9-percent-plus growth picked up the slack from a West licking its financial wounds. But as Asia’s biggest economy cools, officials from Seoul to Brasilia are finding themselves without a reliable growth engine.

Uneven recoveries in the US and Europe have already slowed the exports that power most Asian economies, including Japan. China’s downturn could now throw Asian manufacturing into reverse.

Morgan Stanley’s Ruchir Sharma warns that “the next global recession will be made by China.”

The balance of data—including Singapore’s abrupt shift toward recession—suggests China isn’t growing anywhere near this year’s 7-percent target.

Shanghai’s day traders celebrated this week’s news that Chinese exports rose 2.1 percent in June. The more interesting figure, though, was the 6.7-percent decline in Chinese imports. That helps explain the stunning 14-percent drop in Singaporean manufacturing from the previous three months. The same goes for Singapore’s nonoil exports to China, which fell 4.3 percent in May, 5.1 percent in April and plunged 22.7

percent in February.

With Singapore’s economy contracting the most since the third quarter of 2012, its government has to act fast. It may be time for another surprise monetary easing (the central bank last engineered one in January). Fiscal stimulus may also be necessary.

“The global outlook remains challenging and far less positive than the picture” four months ago, economist Hak Bin Chua of Bank of America Merrill Lynch says. “China’s slowdown, the Greece crisis and weaker growth in the immediate neighborhood of southeast Asia, including Indonesia, Thailand and Malaysia, will likely dampen growth.”

The downturn in China, Asia’s main customer, will loom especially large. For now, many investors in the region are still bullish about Beijing’s efforts to gin up both GDP and stocks. But even the good news on China these days is worrisome.

Take its surge in credit growth in June ($300 billion), the most since January. While it’s helping to stabilize the economy in the short run, it’s also inflating China’s debt bubble in sync with its asset bubbles in Shanghai and Shenzhen.

China is facing another problem:

diminishing returns. Its stimulus efforts have grown exponentially in size, scope and frequency since the 2008 global crisis. The more China strains to keep GDP growth above the 5-percent range, the more it’s putting the global financial system at risk. China’s bailouts, after all, are beginning to overlap in surreal ways. This year’s massive stock rally was meant to ease the fallout from a seven-year borrowing binge. Now, as Beijing puts a floor under plunging shares, it’s effectively bailing out its previous bailout.

Beijing’s troubles are now the world ’s. In 2010 it accounted for roughly 23 percent of global growth. By the end of 2014, that share had surged to at least 38 percent. China punches even further above its weight in the commodity markets that countries from Indonesia to South Africa rely on for growth. “Over the next couple of years,” Sharma told Bloomberg News, “China is likely to be the biggest source of vulnerability for the global economy.”

China, he adds, could drag global growth below 2 percent, a threshold many would agree is equivalent to a world recession. If Singapore is any guide, it may already be under way.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Bucket list for the next president

Shepherds in Jesus’ name Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Ariel Nepomuceno

DECISION TIME

Conclusion

T

here is only one view about the presidency that most sociologists, political analysts, historians, academics, journalists or even the ordinary men on the street believe in—that the presidency is a gift of destiny to fate’s anointed one.

And, therefore, the next leader is tasked by such fate to accomplish much for the country.

The next president will inherit an economy that has shown some degree of improvement, but is still saddled by a rise in poverty incidence, crime and lawlessness, scarred by deepening international conflict with a nearby world power, and still divided by a prolonged communist insurgency and Muslim secessionist movements.

What is to be done? History showed that great presidents should have clarity of vision and a strategic direction. They build collective confidence in the future. Undoubtedly, there is no other clearer manifestation of such vision than to have a concrete To-do-list for the country.

One that would compel endless working hours for the entire six years at the helm of our government.

The list can be endless, but there are urgent concerns that should be prioritized.

Passage of priority bills Very few of the priority measures that President Aquino certified as urgent way back in 2011 have been transformed into laws, such as the Reproductive Health, Data Privacy and GOCC Good Governance Acts.

The public clamors for the passage of the following: The FOI law No less than our Constitution secures the right of the people to information on public concern. It guarantees access to official records and to documents pertaining to official acts and transactions subject to certain limitations provided by law.

As a supplement, we have a Code of Ethics of government officials that mandates accessibility by the public to government officials’ contracts, information and papers.

Transparency and accessibility are the first steps to curbing corruption and avarice among government officials.

Antitrust law In our ongoing quest for economic strength, the Philippines should support free enterprise but must also strive to compete fairly and ethically.

Many of the countries around the world have passed fair competition laws that forbid practices that limit trade and free competition, such as price fixing and stabilizing activities, bid rigging, competitor agreements on production or output reduction, and conspiracies that are crafted to achieve monopoly power.

A level playing field where no single company, conglomerate or economic entity can outmaneuver competitors, manipulate the market and wreak havoc on the consuming public is a priced goal in any free market society.

Our legislature must pass the Anti-Trust law for the Philippines to remain a respected member of the international trading community, and to ensure consumer welfare by curbing illegal competition practices.

There are other important bills that must be pushed by the next administration, and these include the Armed Forces of the Philippines modernization, Establishment of the Archipelagic Sea Lanes and Maritime Zones, Customs Modernization Act, the Land Use Act, Whistleblowers Protection Act and the Sin Tax law.

Poverty alleviation

IN the first half of 2014, the National

The next president will inherit an economy that has shown some degree of improvement but is still saddled by a rise in poverty incidence, crime and lawlessness, scarred by deepening international conflict with a nearby world power, and still divided by a prolonged communist insurgency and Muslim secessionist movements.

What is to be done? History showed that great presidents should have clarity of vision and a strategic direction. They build collective confidence in the future.

Economic and Development Authority reported an increase in poverty incidence by 1.2 percentage points to almost 25.8 percent from the 24.6 percent registered in the same period for 2013. Consumer price index for food rose, rice prices also reached double digit increase and fluctuating inflation rates are not helping the poor and marginalized. With this kind of figures, the 2015 millenium development growth targets are threatened.

The government’s poverty reduction programs must be continued and recalibrated when necessary.

These programs must be anchored on the sincere cooperation among the national government, local governments and the private sector. Synergizing the policies in mobilizing resources must be fast tracked to seriously rescue the poor and marginalized Filipinos.

Peace and order

The Philippines’s ranking in the 2015 Global Peace Index slid to second to the last or penultimate position, ahead only of North Korea which currently occupies the 153rd spot. This painful reality has been linked to both internal conflict and strife, as well as to our dispute with China over the West Philippine Sea. Internally, no less than the Philippine National Police saw an increase of 17.86 percent in total crime volume in the first quarter of 2014 compared to the same period in 2013.

These crimes include murder, homicide, robbery, theft, rape and those that involve estafa, carnapping, kidnapping and prostitution. Said data does not even consider possible unreported crime incidents due to weaknesses in crime reporting.

The absence of peace and order in the country is a prelude to economic disaster. We have to remember that investor’s confidence is crucial to our economic growth.

Hope in the midst of uncertainty

The 2016 national elections provide us a democratic window to welcome possible improvements in our journey as a nation. Our next chief executive shall be challenged by the huge tasks that our people have entrusted to the head of state through their ballots. The terms of our renewed social contract have no room for vacillation nor excuses.

Our next president must adhere to all the stipulations of such humbling contract. No matter what the consequences will be, our next leader must pursue only what is righteous and good for our people.

T

he members of the Lord’s flock experience the loving care of the Shepherd who looks after each one, as he guides them to pasture and protects them from harm (Psalm 23:1-3, 3-4, 5, 6). Jesus’ apostles extended His mercy and compassion to peoples, even as Jesus Himself pitied them for being like sheep without a shepherd (Mark 6:30-34).

The Lord is my shepherd In Psalm 23, God is pictured as a shepherd who leads His flock to pasture, to water and through difficult terrain, protecting them from predators and against all dangers. To characterize the Lord as a shepherd is to express trust and confidence that He is looking after His people as a shepherd does for His flock with tender compassion, attending to all their needs. Under His care, the individual sheep (like the psalmist himself) leads a peaceful existence, provided with ample grazing and with abundant, nonturbulent water to drink from, so much so that one’s deepest being (soul, nepesh) is truly nourished and refreshed.

The shepherd’s providence is also moral: the psalmist is guided, for the sake of the Lord’s name, in the right path, in the way of the righteous. This covenant way of the Lord is His enduring loving-kindness (hesed) that follows the psalmist all the days of

his life. That is why even in passing through dark valleys, he fears no evil, because he knows the Lord is at his side. Here the psalmist shifts and speaks to God directly: You are with me, and with Your shepherd’s rod and staff You ward off dangers and steady the whole flock. And You prepare such nourishment for me, it is a testimony of Your love for me in the sight of all my foes; You anoint me and I will enjoy Your favor until I dwell in Your house for all time!

Caring for His own

The disciples Jesus sent out to preach to people the good news of God’s reign are called here (for the only time in Mark) as apostles. The stress is on the relationship between Jesus as the sender and the followers sent, who were commissioned to function as Jesus’ representatives, to act with full authority from Him. That explains why upon returning, the apostles gave Jesus a report

Thursday, July 16, 2015

of all they have done and taught.

They were accountable to Him for their use of His authority. On Sunday we saw them preaching repentance and driving out demons and curing many who were sick (Mark 6:7-13). And Jesus demanded from them single-mindedness and selfabnegation, as He enjoined them to take no food, sack or money for their mission work; they were also told not to look for more comfortable lodging or better board in the places they visit.

Jesus showed himself truly concerned with the welfare of His followers. Newly returned from their campaign and surely tired in all the excitement, Jesus invited them to withdraw with Him from the crowds and to rest and recharge. Rest is what God as shepherd would give His faithful flock (Isaiah 65:10; Ezekiel 34:15; Psalm 23:2). Rest and being by themselves was Jesus’ regular wish for His disciples (Mark 4:3536). And he took them to a deserted place where He himself used to withdraw for periods of prayer (Mark 1:35), the desert being a place of communing with God and to return to it a time of recommitment.

Jesus is here portrayed as the incarnate wisdom with whom the disciples found rest and reward after labor and toil (Sirach 6:29; 51:27).

He was moved with pity for them

The departure of the group of Jesus did not faze the crowds. They seemed to be familiar with the place the group was going to, and they

A7

arrived there even before Jesus and His disciples did. At the sight of the crowds who pursued them with such passion, Jesus was moved with pity for them. Their insistence summoned the goodness of the shepherd to the fore. Jesus then taught them many things, and He would be feeding all of them. The profound inner emotion Jesus felt for the crowds has a messianic aspect to it (cf. Mark 1:42; 8:2; 9:22). He was moved by the plight of the people who were like sheep without shepherd, looking for someone they could follow.

And Jesus took them all into his embrace, teaching them, guiding them and giving them sustenance.

He could not tolerate that the people be without a shepherd, as Moses prayed that his people be not left like sheep without a shepherd (Numbers 27:17). Or as Jeremiah said, God wants the sort of shepherds for the people “so that they need no longer fear and tremble; and none shall be missing” (Jeremiah 23:4).

Alálaong bagá, even today people want to hear what Jesus and His disciples have to say. People are looking for direction, wanting to be released from the demons possessing them and to be cured from illnesses tormenting them. But they need shepherds with real compassion for them.

Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.

BIR orders taxpayers to submit CRMs/POS/SPMs inventory list Atty. Ronald S. Cubero

Tax Law for Business

I

n an effort to boost its monitoring of sales among business establishments, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) 36-2015 on June 8 mandating taxpayers to submit a one-time inventory list of all Cash Register Machines (CRMs), Point of Sales (POS) Machines, Special Purpose Machines (SPMs) or any other similar Machines Generating Sales Invoices or receipts that they own as of June 30, 2015.

The RMC was issued in response to the needs of the bureau to strengthen data management and capabilities that is vital in ensuring a reliable database of sales transactions recorded through CRMs/POS/ SPMs and other similar machines.

According to the BIR, said taxpayers need to submit until July 31, 2015, an inventory list in hard and soft copies, along with notarized sworn declarations certifying the veracity of the data being submitted.

In details, the business establishments must strictly comply with the

following procedures in the submission of an inventory list: 1. The soft copy of the inventory list shall be saved in a DVD-R with label in accordance with the format prescribed in Annex “B” of the RMC; 2. The Sworn Declaration must be notarized and duly signed by the taxpayer or the authorized representative; 3. The inventory list, the label of DVD-R and the Sworn Declaration must be signed by any of the principal officers duly designated through a Board Resolution with

respect to corporate taxpayers. In the case of individual taxpayers, the latter shall sign the documents.

An attorney-in-fact also is allowed to sign on behalf of the individual taxpayer, provided that there shall be a Notarized Special Power of Attorney (SPA); 4. The hard copies of the inventory list, together with the DVD-R and the Sworn Declaration, shall be submitted to the respective BIR office, district, division or region where the taxpayer is duly registered.

Similar to other BIR directives, this RMC provides corresponding penalties in cases of noncompliance. These include an automatic revocation of the taxpayer’s permit to use the CRMs/POS/SPMs and other similar machines. Another would be an immediate evaluation of the machines.

A penalty in the amount of P1,000 will be imposed for each failure to file an information return, statement or list as provided under Section 250 of the National Internal Revenue Code (NIRC) of 1997, as amended.

Taxpayers must be reminded, however, that the payment of the appropriate penalty shall not relieve the taxpayer from the submission

MMDA clarifies flood issue MAIL

Please e-mail your letters to the editor to opinion@businessmirror.com.ph.

Letters chosen for publication in this section are edited for brevity and clarity.

This refers to the news article by Mr. David Cagahastian published in the BusinessMirror on July 5 and 6, titled “COA: MMDA partly to blame for flooding.” We would like to clarify many of the issues raised in the article.

The Commission on Audit (COA) report referred to in the article is for the fiscal year 2012 and 2013, a report released on 2013 and 2014, respectively.

The Metropolitan Manila Development Authority (MMDA) has taken due notice on the observation and recommendations of COA and accordingly, adjusted

its strategies for project planning, procurement and implementation as recommended by said COA report.

However, to connote that the failure to promptly implement the projects planned for 2012 and 2013 is the cause for the flooding situation at present is incorrect. Nor is it accurate to suggest that due to the past performance of MMDA for FY 2012 and 2013, project implementation for 2014 and 2015 are, likewise, inefficient and/or delayed.

Please note that all identified floodcontrol projects of 2012 and 2013 as referred to by the COA report have been fully completed. As such, it is misleading, especially by the title of the article, to suggest that MMDA is partly to blame for the flooding in Metro Manila, at present, due to delayed (but completed) implementation of flood-control project of 2012 and 2013.

The article also stated, “Instead of using full allocation for the specified purposes, the MMDA used a part of the allocation for other purposes that do not have the same economic impact as the original purpose for which the allocation was actually made.” The fund

referred by the statement is fund received from the Department of Public Work and Highways (DPWH) for Urban Renewal Project of Metro Manila. But as also stated in the COA report, many of the projects supposed to be implemented (not flood control projects) were not pursued as DPWH was to implement another project (Ninoy Aquino International Airport [Naia] elevated expressway) thereby rendering the supposed Urban Renewal Projects short lived and improper. As such, some of the funds were utilized for other Urban Renewal Projects and in accordance to the master plan of Edsa re-greening commissioned by the re-greening committee of Metro Manila Council.

Having said that, it is incorrect to say that “allocation for other purposes that do not have the same economic impact as the original purpose” as there will be no foreseeable prolonged economic impact of asphalt overlay, pavement markings and traffic-road signs, which will all be destroyed/removed in one year due to the start of construction of the Naia elevated expressway vis-a-vis benefits brought by the projects actu-

of the prescribed Inventory List as stated in the RMC. And above all is the inclusion in the priority audit program of the concerned investigating Revenue Office.

On a final note, upon the submission of the inventory list to the appropriate BIR office, the said office shall cause the immediate verification and approval of pending applications for cancellation or withdrawal for use, either by retirement or sale of the machines, to ensure the achievement of the purpose of this one-time validation or updating of the inventory of the machines.

The author is a junior associate of Du-Baladad and Associates Law Offices, a member firm of World Tax Services Alliance.

The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at ronald.cubero@bdblaw.com.ph or call 403-2001 local 350.

ally implemented-economic benefit by attracting foreign investors and funding by hosting the Asian Development Bank Governor’s Meeting and health benefit of riding public by reducing the accumulation of harmful fumes in the tunnel.

Though flood prevention is one of the highest priorities for the MMDA, it is inaccurate to suggest that any project other than flood-control projects will have little or no socioeconomic impact, and will be the reason for the continued flooding in Metro Manila today.

What the MMDA is preparing for is to mitigate flooding by taking estero clean ups, drainage improvements and establishment/improvement of pumping stations.

We hope to have clarified the issues raised in the article and if there should be any further concerns, clarifications or questions, we remain ready to provide whatever assistance necessary.

Edenison F. Fainsan Assistant General Manager for Finance and Administration Metropolitan Manila Development Authority

2nd Front Page BusinessMirror

A8 Thursday, July 16, 2015

PHL READY TO HOST 2016 MADRID FUSIÓN MANILA

By Ma. Stella F. Arnaldo

Special to the BusinessMirror

T

HE Philippines is all set to host Madrid Fusión Manila (MFM) in 2016, as the Department of Tourism (DOT) on Monday signed a memorandum of agreement (MOA) for the international gastronomy event with organizers—Spain’s Foro de Debate and Arum Estrategias Internacionalizacion.

Another stellar lineup of foreign chefs is expected to grace MFM 2016, which is scheduled from April 7 to 9.

Among them are Joan Roca (three Michelin stars) whose restaurant, El Celler de Can Roca in Girona, Catalan, Spain, topped Restaurant magazine’s “World’s Best 50 Restaurants” list for 2015; Yoshihiro Narisawa of Tokyo, whose Les Créations de Narisawa (two Michelin stars) was ranked No. 8 among the World’s 50 Best Restaurants for 2015, and named The Aqua Panna Best Restaurant in Asia by the same magazine; and Eneko Atxa (three Michelin stars), whose establishment Azurmendi in Larrabetzu, Spain, was hailed as the best restaurant in Eu-

rope by the popular gastronomy web site, Opinionated About Dining, and ranked 19th in Restaurant magazine’s world’s best list.

There was no announcement on the venue for next year’s event.

Tourism Secretary Ramon R. Jimenez Jr. told the BusinessMirror: “Madrid Fusión Manila 2016 will see the participation of an even wider array of culinary experts from the East and the West. Manila, the Filipino chefs and products of the Philippines will have an even more prominently featured platform to perform for the world.”

In his speech at the signing of the MoA, Jimenez also said: “We are happy to announce the resumption of an activity that will, like I always predicted and is a fearless forecast, that Manila will soon enough return to its rightful place as one of the centers of culinary excellence in this part of the world.”

In a recent poll by CNN, the Philippines placed second among world’s destinations with the best food. The survey cited adobo (pork or chicken See “Madrid Fusión,” A2

www.businessmirror.com.ph

TPP preparations ongoing as Manila awaits invitation

T

he Department of Trade and Industry is stepping up the conduct of consultations with key stakeholders on the Philippines’s plan to join the US-led TransPacific Partnership (TPP) trade bloc, especially now that Washington has a new Trade Promotion Authority (TPA).

Trade Secretary Gregory L. Domingo said the TPA, also referred to as the fast-track authority, will speed up TPP negotiations, thus, opening up opportunities for other countries to be invited as one of the negotiating parties of the emerging by-invitation-only grouping.

“It’s a major step toward conclusion of an agreement among the current TPP members, which makes

it also closer for eventual opening up to new members,” Domingo told the BusinessMirror. Domingo, in his recent visit to Washington, announced the Philippines’s desire to join the TPP. “I want to state clearly and unequivocally that we want to join the TPP.” The TPP agreement will likely include an accession protocol for new members. Domingo said there is no assurance that the

Philippines will be invited by the current TPP members, as they still have to evaluate the country’s bid.

A ranking trade official, however, said the country’s preparation for the TPP is ongoing.

The official, who declined to be named, said technical consultations with TPP members, internal studies and discussions with Philippine industry stakeholders will continue.

This is to determine if there will be challenges, both domestically and abroad, in meeting the ambitious standards of the TPP. The Philippines has so far held TPP technical consultations with Malaysia, Australia, the US, New Zealand, Mexico and Canada. The Philippines has also expressed interest in forging free-trade agreements with Canada, Peru and Chile—seen as “building blocks” for the TPP.

The TPP trade pact has remained a highly secretive deal, with the text only known to negotiating members.

In recent years, however, a few chapters of the TPP have been leaked online, and it appears the Philippines may hit a snag on a particular chapter.

“From what has been leaked, we know there may be an Investor-State Dispute Settlement [ISDS] part. This means multinational companies can sue the state where they invested.

But in our Constitution, the state cannot be sued without its consent,” the source said.

The Philippines has always applied for exemption on the ISDS clause in other negotiated agreements because of this constitutional provision. The TPP agreement, however, may not allow the same flexibility, leaving a “take it or leave it” situation for the Philippines. CatherineN.Pillas

Govt to bid out ₧171-B South Line rail project

By Cai U. Ordinario

T

he national government is bidding out the P171-billion South Line of the North-South Railway Project (NSRP), the biggest public-private partnership (PPP) undertaking to date.

The PPP Center said the project will link Metro Manila to Legazpi City in Albay, including a number of existing and proposed lines spanning 653 kilometers.

“This will provide improved transport and logistics services to currently underserved areas, and encourage more productive activities in the Bicol region,” the PPP Center said.

The private-sector partner will be tasked to design, construct, install, commission, finance, operate and maintain the existing 56-km commuter rail line from Tutuban, Manila, to Calamba City, Laguna.

It will also do the same for the 478-km long-haul rail operations from Tutuban to Legazpi City, with the

possible spur lines extension of 58 km from Calamba City to Batangas City and 117 km from Legazpi City to Matnog, Sorsogon.

The PPP procurement will be conducted via a two-stage bidding process in accordance with Republic Act 7718, or the Amended Philippine BOT Law and its Implementing Rules and Regulations.

The Department of Transportation and Communications (DOTC) and the Philippine National Railways will conduct the bidding.

The Development Bank of the Philippines and the Asian Development Bank were appointed by the DOTC to act as the transaction advisors for the project.

The DOTC also tapped the PPP Center-managed Project Development and Monitoring Facility to support the conduct of NSRP South Line’s feasibility study and various pre-investment studies during the project development stage. CPCS Transcom Ltd., hired by the PPP Center, prepared the feasibility study. It is also the technical advisor.

DBM-NEDA joint circular Budget Secretary Florencio B. Abad (seated, second from left) and Economic Planning Secretary Arsenio M. Balisacan (seated, second from right) lead the signing of the Joint Memorandum Circular on Evaluation between the Department of Budget and Management (DBM) and the National Economic and Development Authority (Neda) in Mandaluyong City on Wednesday. Witnessing the signing are (standing, from left) United Nations International Children’s Emergency Fund OIC Deputy Representative and Chief of Field Office Margaret Sheehan, University of the Philippines Prof. Ruperto Alonzo and Office of the President-Presidential Management Staff Undersecretary Herminio Bagro III, with DBM Assistant Secretary Maxine Tanya Hamada (seated, left) and Neda Deputy Director General Rolando Tungpalan. See story on A4. ALYSA SALEN

Tsipras starts bailout-plan sales pitch G reek Prime Minister Alexis Tsipras started his pitch for a bailout that has sparked a revolt in his own party and is struggling to get off the ground as international officials ask new questions about the country’s finances.

As Tsipras went on national television to argue for a deal that he only agreed to with “a knife on my neck,” European officials are at a loss on how to put together a bridging loan that will keep Greece from defaulting on the European Central Bank (ECB) and its own citizens next week.

One person familiar with the matter said Greece’s finances seem to get worse with every meeting and governments are now reluctant to help out with even short-term funds.

“The Greek government has not received a bridge-financing program yet, because some try to block this,” Tsipras said in an interview with ERT-TV before a parliamentary vote on the deal on Wednesday. “My priority is to make sure that the choice I made the other day, with a knife on my neck, is finalized.”

Greece’s situation is worsening, as capital controls ravage an economy

already in the middle of a doubledip recession. Those measures have exacted a “heavy toll” and have lead to a dramatic deterioration of Greece’s ability to repay its debt in the past two weeks, a new analysis by the International Monetary Fund showed on Tuesday.

Tsipras portrayed the package of austerity as unavoidable because the alternative was leaving the euro. In return, all Greece’s midterm financing needs will be covered and talks over debt restructuring could even start in the fall, he said.

Bridge financing

Tsipras’s comments set up a day of parliamentary maneuvering that threatens to rupture his coalition.

Still, opposition lawmakers are likely to back the package at a plenary vote scheduled for about 10 p.m. local time on Wednesday.

European stocks rose and peripheral government bond yields declined in Italy and Portugal on Tuesday. Stocks rose in Asia for a fifth day. Hurdles remain, among them disagreement over how to finance Greece through the next few weeks.

Next week alone, the Greece needs to pay €3.5 billion ($3.9 billion) to the

ECB, with pensions and state salaries also needing to be paid.

“We are looking at all the instruments and funds that we could use, and all of them seem to have disadvantages or impossibilities or legal objections,” Dutch Finance Minister Jeroen Dijsselbloem, who chairs meetings of his euro-area counterparts, said in Brussels.

Ratification must also be secured in six other parliaments, among them the German lower house, or Bundestag, which will be reconvened on Friday from its summer recess.

For now, attention will focus on Athens as Tsipras tries to steer the measures past his coalition of Syriza and the Independent Greeks.

Discussion will begin at committee level at 10 a.m. and then move to a plenary debate at about 2 p.m.

Tsipras said the package won’t result in cuts to wages or pensions.

Sales-tax increases are “irrational” but unavoidable to satisfy creditors, while a reform of the pension system was overdue regardless of the terms laid down, he said.

Greece “does not have the required currency reserves to support a return to the drachma,” he said in the interview. Bloomberg News