Businessmirror july 09, 2018

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n Monday, July 9, 2018 Vol. 13 No. 268

E

@llectura

FFECTIVE on Monday (July 9), four commissioners of the Energy Regulatory Commission (ERC) are suspended from work, leaving operations of the agency in severe paralysis.

This time, the issue behind the suspension—t he second w it hin a year—arose from charges filed by a watchdog accusing the ERC officials of gross neglect of duty in supposedly tolerating an anomaly by distribution

utility Manila Electric Co. (Meralco) in the handling of billions of bill deposits, thus leading to consumers allegedly losing P34.84 billion.

The ERC received on Friday night a memorandum from Executive Secretary

₧26.5B

The estimated total of Meralco consumers’ deposits from 2006 to 2016, as supposedly stated in the utility’s financial statements Salvador C. Medialdea ordering ERC Chairman Agnes VST Devanadera to implement the decision of the Office of the Ombudsman to suspend Alfredo Non, Gloria Yap-Taruc, Josefina Asirit and Geronimo Sta. Ana for three months without pay for “neglect of duty.”

See “Palace,” A2

CAR SECTOR HIT BY 9.7% SALES DIP, BUT COPING T

By Elijah Felice E. Rosales

@alyasjah

HE automobile industry had expected 2018 would be a tough year with the Tax Reform for Acceleration and Inclusion (TRAIN) in place, but other factors, domestic and global alike, have since made it doubly hard for vehicle importers to remain on firm footing under the new tax regime.

Overall sales of dealers belonging to the Association of Vehicle Importers and Distributors was down by 9.7 percent from January to May. During that period, total units sold of Avid member-dealers stood at 35,931 vehicles as against 39,158 vehicles last year.

Passenger car sales declined by 6.5 percent, while commercial vehicles sales fell by 11.3 percent across all segments, except for trucks, buses and pickups—units that were spared of additional duties under the TRAIN.

See “Car sector,” A2

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Palace orders 4 ERC execs suspended again

By Lenie Lectura

2016 ejap journalism awards

The gross vs net debate Alberto C. Agra

F

or joint ventures (JVs), which is a public-private partnership (PPP) modality, what would you prefer—a sharing on the gross or net income? What are the advantages of each option?

Continued on A11

NG borrowings in May up 74.5%, but 5-mo total is 33.1% lower

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Several car dealers are seen housed in one stretch of Pasay City. The association of vehicle importers and distributors reported nearly a 10-percent decline in sales in the first five months since the TRAIN law took effect, but are taking the setback in stride. Besides the higher taxes, other factors, domestic and global, have posed a challenge to them. Still, this business group sees a “sweet spot” and some opportunities down the road. NONIE REYES

ead

PPP LC. Agra Alberto

By Rea Cu

@ReaCuBM

HE national government (NG) has reported gross borrowings for May of P57.969 billion, expanding by 74.5 percent, from the total borrowings of P33.21 billion for the same month in 2017, data from the Bureau of the Treasury (BTr) showed.

Based on the latest BTr data, the gross borrowings for May pushed the total borrowings for the first five months of the year to P302.578 billion—a figure that represented a 33.1-percent contraction from the recorded P452.805 billion in the same period for 2017.

Broken down, external borrowings for May reached P2.534 billion, while domestic gross borrowings reached P55.435 billion.

The external gross borrowings contracted by 51 percent from the P5.182 billion reported in the same month for 2017, while domestic gross borrowings expanded by 97.7 percent compared to last year’s P28.028 billion.

The bulk of the borrowings from domestic lenders for May See “NG borrowings,” A2

n japan 0.4829 n UK 70.6561 n HK 6.8065 n CHINA 8.0472 n singapore 39.1425 n australia 39.4486 n EU 62.4523 n SAUDI arabia 14.2415

Source: BSP (6 July 2018 )

News

BusinessMirror

A2 Monday, July 9, 2018

Cha-cha gaining traction, but DU30 ‘term’ stirs debate

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By Butch Fernandez @butchfBM & Bernadette D. Nicolas @BNicolasBM

RESH efforts to tinker with the 1987 Charter are seen to gain traction in the Senate with Monday’s scheduled submission to President Duterte of a “Federal Constitution” drafted by the Palace-appointed Constitutional Committee (Con-com).

Former Senate President Aquilino “Koko” L. Pimentel III indicated Sunday he would endorse early passage of enabling legislation to synchronize holding the national plebiscite to ratify proposed Charter changes with the upcoming 2019 elections.

Amid his optimism about fulfilling a timeline for constitutional change to make way for federalism, however, the absence in the Concom draft of an explicit provision barring Duterte from standing for election anew in 2022 continued to spark debate.

T he Con-com’s spokesman defended the absence of such a provision, and Duterte himself reiterated at the weekend he would never consider extending his stay in power and would even want the draft framers to cut short his presidency so he exits by 2019, not 2022.

Draft to spur process

That debate aside, Pimentel said on Sunday he was confident the shift could happen within this administration, even if he earlier told the BusinessMirror only a few senators were keen, like him, on pushing it.

“Yes, federalism is one of the platforms of the Duterte administration which is why this will happen within its six-year term,” said Pimentel in a radio interview. “So far, it is inside the timeline.”

The ex-Senate chief, who was recently replaced by current Senate President Vicente “Tito” C. Sotto III, added that while the initial Charter change (Cha-cha) efforts encountered delay, “at least we now have a specific model that we can discuss, debate and fight over.”

Sotto said a day earlier, in an interview with DW IZ, that Charter change will still not be among the chamber’s priorities for the moment, as Congress has to clear its agenda of other priorities. However, he acknowledged that federalism will in time get

Car sector. . .

Continued from A1

Yes, the new tax law tempered consumer demand for big-ticket items, Avid President Maria Fe Perez-Agudo said, but it is not the sole factor for lower sales of imported cars in the first half of the year.

In an interview with the B usiness M irror, Agudo said: “Higher prices certainly tend to reduce the demand for vehicles, specifically those in the higher-priced brackets.

However, we cannot attribute this drop to TRAIN alone.”

“To a certain extent, higher taxes on petroleum products, coupled with uncertainties in the international oil market, may have also affected the performance of the [automobile] industry. Higher petroleum prices raise the total cost of owning vehicles; hence, consumers tend to have a more conservative approach toward products that might have higher total cost of ownership,” she added.

The government is expecting Dubai crude oil price to range from $55 to $70 per barrel this year, before stabilizing $50 to $65 per barrel next year.

Apar t from this, Agudo said the automobile industry could suffer heavily from the Central Bank’s decision to raise main policy rates by 25 basis points in June. The

legislative attention as it is part of the administration’s agenda.

Pimentel said on Sunday, “the new timeline will be conveyed to the President,” recalling he had suggested it is the “most practical” option to hold the elections and plebiscite on the same day.

Pimentel pointed out that even if the Duterte administration has four more years, he is supporting the new timeline, citing the one-year delay in composing the Con-com.

“What if we are ready with the draft [Constitution]? Don’t call a plebiscite?” he wondered aloud.

Pimentel added: “the plebiscite [to ratify Charter changes] is scheduled 90 days once the proposal is ready; since we have four more years of the present administration, there is a big chance we can hold the plebiscite within that four-year period for the Federal Constitution.”

Meanwhile, he said President Duterte ought to be given time to study the proposed Charter changes submitted for ratification, “Correct. It depends on the decisionmaking process. But in the first place, I am sure the President will be monitoring what the proposal will contain,” said Pimentel.

The senator, however, also acknowledged synchronizing the elections and Charter plebiscite may be “practical” but it needs to be studied further, given that this will overlap with congressional calendar for tackling the annual budget bill and the upcoming election season. “But let us see if we can do it,” he added.

Explicit bar on Duterte?

Following the controversy from having no provision under the new charter barring Duterte from seeking reelection in 2022, the Con-com defended their decision, saying that they go by the “principle of democracy.”

According to Con-com Spokesman Conrado I. Generoso, the Bangko Sentral ng Pilipinas (BSP) hiked its rates anew in a bid to arrest the effects of rising inflation.

“The BSP’s move to manage excess liquidity in the market has consequently raised borrowing rates. With [the automobile] industry sales being highly dependent to bank-financed purchases, higher bank policy rates could curb overall total industry sales,” Agudo said.

The Avid chief explained that some buyers opted to purchase their units last year, when prices of dozens of vehicles were significantly lower. On the other hand, she said other buyers are in a wait-and-see mode, holding on to their money in anticipation of newer models bound for market launch in the latter half of the year.

Jordan V. Sarcia of Biñan, Laguna, admitted it would have been better if he purchased his Suzuki Celerio last year when prices of vehicles were relatively lower. He said he spent over P700,000 for his imported car, bought just last May. Sarcia said he would have opted for a Toyota brand, which he noted is priced lower, but explained that he was already eyeing a Celerio since last year. This determination to pursue the unit he wanted made him decide to buy the imported car in spite of its higher price.

Agudo said vehicle importers have

“In other words, elect a president before you make the transition from unitary to federal.

I would be willing to accept the proposal....

Make me President only next year 2019 and I will accept it.”

—Duterte

Constitution cannot have this “discriminatory” and “undemocratic” provision since the Constitution sets the qualifications and disqualifications that apply to all and not to any particular individual.

Besides, Generoso said in a statement, such a provision constitutes class legislation and violates the people’s sovereign right to elect their representatives and leaders.

“The adoption of a new Constitution that changes the system of government effectively results in a fresh start for all,” he said. “It is not the Con-com’s desire or anybody’s desire but it is the natural consequence, the natural effect of a a new Constitution and a change in the system of government.”

The Con-com statement contrasts with what UP political science assistant professor Gene Lacza Pilapil said in March in a Senate hear ing on Charter change—that that in order “to protect democrac y,” t he new Constitution should include a provision banning the incumbent president from reelection, to allay the fears of Filipinos that the shift to federalism is to realize Duterte’s desire and his allies to remain in power beyond his mandated term limit under the 1987 Constitution.

Pilapil doubted that the President will make good on his promise not to extend his term.

Under the Con-com’s draft constitution, which is scheduled to be submitted today (July 9) to the President, the President and the vice president shall be elected for a term of four years and are both eligible for one reelection.

Presidential Spokesman Harry L. Roque Jr. said the Con-com handing over the proposed federal constitution is a significant step toward realizing the President’s promise to shift to a federal form of government. “We’re hoping that Congress will give it much weight as it prepares to submit proposed revisions to the Constitution to the people as a constituent assembly,” he said.

The issue on whether Duterte can serve until 2030 after a shift encountered various challenges in previous years, and she is confident they are more than capable to rebound from the effects of the TRAIN. “We expect the effects of the TRAIN law to be short term and transitional, foreseeing that the need for vehicles will continue to rise and that the market will eventually adjust to the new tax regime. Consumers are still adjusting to new income and new commodity price levels,” Agudo said.

Sweet spot: E-vehicles

One of the opportunities Avid member-dealers are looking closely at is breaking into the growing market of electric vehicles. These vehicles were not imposed excise taxes under the TRAIN, and Agudo said it presents a sweet spot for them.

“As mentioned, the additional excise tax has had immediate impact on the passenger car and local commercial vehicle segments.

However, tax exemptions on electric vehicles have placed Avid in a favorable position to break into this emergent market,” Agudo said.

“The industry has encountered various challenges in the past years, and we are more than capable of adjusting to these.

New players, new brands and new models are coming in, dealerships are expanding into the regions [and] I think all these developments compel us to pursue more

to federalism arose after Con-com member Julio C. Teehankee said the President can seek reelection once his term ends in 2022, as it will be “like a reboot” or a “reset.”

However, Teehankee backtracked and said that he just “misspoke.”

Duterte: Make me exit in 2019

The President reacted to the issue in a speech on Friday in Davao. He urged the Con-com to make the necessary changes in the proposed constitution so that he will stop being president during the transition, and so that there will be an election before proceeding with the adoption of the Constitution.

“In other words, elect a president before you make the transition from unitary to federal.

I would be willing to accept the proposal,” he said.

Duterte added: “Make me President only next year 2019 and I will accept it.” The Con-com has yet to respond to the President’s remarks.

Nevertheless, Generoso reiterated the Con-com’s position that the draft explicitly provided under Section 6 of the Transitory Provisions that “the term of the President and Vice President which shall end on June 30, 2022 shall not be extended.”

No ban on Cory

Generoso noted one thing: the 1986 Constitutional Commission did not write a section in the 1987 Constitution that barred President Corazon Aquino from running in 1992 national elections. He said that it was solely the personal decision of Aquino not to run in that year.

He also said the Transitory Provisions of the 1987 Constitution even extended the term of Aquino up to June 30, 1992, solely for the purpose of synchronizing the elections.

These reasons he cited—for not barring any President or any other incumbent elected official—are also the same reasons that amendments to the 1935 Constitution never provided for a section that barred President Manuel Quezon from running in the succeeding elections.

“So following the principle of equality before the law and equality before the constitution, if a provision is to be written to bar the incumbent from running, the provision should include all the above officials who are already barred under the 1987 Constitution from running in 1992,” he said. opportunities that will enable the industry to adapt to the shifting times and needs of the Filipino,” she added.

Boon from ‘Build, Build, Build’

Agudo also placed her hopes of better infrastructure under the “Build, Build, Build” program of the government, which will receive 70 percent of the estimated P121.2-billion revenue stream of the TRAIN. “The automotive industry will largely benefit from the infrastructure program, as it connects cities, facilitates business and trade, enables better transport and improves access to rural areas nationwide.

Once completed, these big-ticket projects, such as highways, roads and airports, allow new industries to develop, showing our advanced and sustained capacity for growth; thus, putting us at par with other [Southeast Asian] countries,” Agudo said.

The TRAIN imposed excise taxes of 4 percent for vehicles up to P600,000; 10 percent for over P600,000 to P1 million; 20 percent for over P1 million to P4 million; and 50 percent for hybrid vehicles. No excise tax was slapped on electric-powered cars.

It also placed excise tax on oil of up to P6 over the next three years: P1 in 2018, P2 in 2019 and P3 in 2020. Essential petroleum products, such as diesel, kerosene and LPG, were levied with lower rates.

With a report from Gillian Villanueva

www.businessmirror.com.ph

NBI joins 3rd LGU slay case; Comelec mulls over earlier gun ban J USTICE Secretary Menardo I. Guevarra directed the National Bureau of Investigation (NBI) to join the probe of Saturday’s ambush-slay of Vice Mayor Alexander Lubigan of Trece Martires City, the third local government official gunned down in one week.

Among those alarmed by the rash of killings is the Commission on Elections (Comelec), which said at the weekend it was eyeing stricter security measures for the May 2019 polls following such deaths.

Comelec Spokesman James Jimenez said they are now considering closer coordination with the Philippine National Police (PNP) and even declaring an earlier gun ban as an added precaution for next’s year midterm polls.

“There might be some who will be against this, especially the early gun ban, but these are not off the table,” Jimenez told the Balitaan sa Manila forum on Saturday.

The DOJ’s Guevarra said he specifically ordered NBI Director Dante Gierran to determine whether the incident is related to the ambush of Tanauan, Batangas Mayor Antonio Halili and General Tinio, Nueva Ecija Mayor Ferdinand Bote last week.

The Halili and Bote are still under investigation by the police and the NBI. Halili’s killing is being linked to the government’s crackdown on illegal-drug activities involving government officials.

Bote was killed an ambush in Cabanatuan City last Tuesday. The motive for his killing has yet to be determined. “There’s another ambush, this time the vice mayor of Trece Martires City was the target.

[I have instructed Director Dante Gierran to] include this in the NBI’s ongoing investigation and determine if there’s a pattern or the incidents were unrelated. We need immediate results,” Guevarra told reporters in a text message.

Initial reports showed that Lubigan, his driver Romulo Guillemer and security aide Romeo Edrinal were onboard a black Toyota Hilux traversing the Trece Martires-Indang Road in Barangay Luciano, Trece Martires City, when unidentified gunmen fired at them around 2:53 p.m. on Saturday.

Meanwhile, elaborating on the possible early gun ban in the wake of LGU killings, Comelec’s Jimenez admitted it may take a comprehensive “balancing of interest” to ensure the idea is supported by all stakeholders.

Former Department of the Interior and Local Government Secretary Rafael Alunan backed the proposal to ensure a more peaceful polls.

He also urged the Comelec and the PNP to go after illegal private armies months before the polls to further cut cases of election-related violence.

Joel R. San Juan and Samuel P. Medenilla

NG borrowings. . . this year came in the form of fixedrate Treasury bonds amounting to P28.995 billion for the month, while Treasury bills accounted for P26.440 billion.

Project loans of P2.534 billion accounted for all external gross borrowings made by the government for the month.

From Januar y to May this year, external borrowings reached P152.129 billion, rising by 12.5 percent from the P135.222 billion made in the same period in 2017; while domestic borrowings reached P150.449 billion, down by 52.6 percent from the P317.583 billion borrowed from local lenders last year.

Palace. . .

Continued from A1

“The ERC received the memo on the suspension of the four commissioners from the Office of the Executive Secretary close to 6 p.m. [Friday].

By then, I [had] already left the office.

I will be able to serve the suspension on the commissioners only on Monday at the earliest,” said ERC Chairman Agnes Devanadera.

The suspension order, issued on May 18, could only be enforced if Malacañang issues a directive to do so.

The suspension of four commissioners will leave a vacuum of leadership within the agency which is responsible for approving vital power contracts, certificates and other pertinent permits needed before a power project is cleared for commercial operation.

The ERC is the electric power industry regulator composed of four commissioners and one chairman. The collegial body requires the presence of three members in order to issue orders, decisions and resolutions. In this situation, the absence of four of its members leaves the body powerless in making decisions critical to the energy sector.

‘We will comply’ ERC lawyer Rolando Faller said, in a text message, that the commissioners respect the decision of the Office of the President (OP) in implementing the suspension; thus, they will comply.

However, should the Court of Appeals (CA) resolve to grant the commissioners’ application for injunctive

Continued from A1

Ea rl ier in t he mont h, t he Development Budget Coordination Committee (DBCC) modified its financing mix from a 65:35 ratio this year—with 65 percent coming from the domestic market and 35 percent from foreign financial institutions—to a 75:25 ratio, still in favor of local borrowings in 2019.

Finance Secretary Carlos G. Dominguez III explained that the modified financing mix will help ensure efficient borrowing and will shield the country from external shocks like foreign exchange risks.

“The larger proportion of domestic borrowings in the 2019 mix will help us better hedge against foreign exchange risks,” Dominguez said.

relief, they willl inform the OP about it and request that the same be considered in the implementation of the suspension order.

“Effective Monday, July 9, my clients will not hold office for the duration of the suspension period, unless sooner enjoined by the CA,” said Faller.

Two of the four suspended commissioners are scheduled to retire this week. Malacañang has yet to appoint the replacements of Non and Taruc.

The suspended commissioners cannot be replaced as there are no assistant commissioners.

Th e O m b u d s m a n’s d e c i s i o n stemmed from a complaint filed by the National Association of Electricity Consumers for Reforms Inc. (Nasecore) for syndicated estafa and grave misconduct against officials of Meralco and the ERC commissioners.

Nasecore claimed that consumers were robbed of about P34.84 billion.

The group computed that consumers’ deposits reached P61.36 billion from 2006 to 2016, while consumers’ deposits amounted to only P26.5 billion in Meralco’s financial statement.

This is the second time in the past seven months that the Ombudsman has found the same ERC commissioners administratively liable for failing to fulfill their duty to protect the interests of the consumers.

Earlier, when the case was filed against them, the commissioners said they had shown the appellate court the extent they had gone to in order to show their thoroughness in doing their duty to safeguard consumer interest in accordance with their mandate.

The Nation BusinessMirror

www.businessmirror.com.ph

MWSS’s Velasco: Teamwork required to restore Manila Bay to its pristine state

By Jonathan L. Mayuga

M

@jonlmayuga

ETROPOLITAN Waterworks and Sewerage System (MWSS) Administrator Reynaldo V. Velasco believes the waters of historic Manila Bay can still be restored to its pristine state.

It is just a matter of teamwork and adherence to the concept of shared responsibility, according to Velasco.

The MWSS is one of several government agencies covered by the continuing order by the Supreme Court to restore Manila Bay’s waters.

For the MWSS chief, restoration means making Manila Bay safe for bathing and swimming or passing the standard of Class B level sea water as per the Water Classification Tables mandated under Department of Environment and Natural Resources Administrative Order 34.

“For the Manila Bay waters to be rehabilitated, restored and maintained to a level fit for swimming, skin diving and other contact forms of recreation, teamwork from all sectors is necessary,” Velasco told the BusinessMirror via e-mail. “The concept of shared responsibility must be put into practice that will include responsible citizenship in disposing of garbage.”

Velasco issued his statement in the wake of the forthcoming Senate inquiry into the wastewater treatment and sewerage system in Metro Manila by Sen. Cynthia A. Villar. Poor and inefficient solid-waste management, as well as the inadequacy of proper wastewater facilities had been identified as contributory to the worsening state of water in Manila Bay. While the MWSS and its concessionaires are constantly working to improve their services, Velasco admitted they are also faced with major challenges in implementing the program.

These challenges include the availability of lots for wastewater-treatment plants, bureaucratic red tape in permit acquisition, right-of-way problems that at times include the presence of illegal settlers, limited construction on streets and unavailability of updated drainage master plan.

The work to rehabilitate Manila Bay waters, however, needs more than the construction of wastewater facilities and the collective efforts the government agencies named in the Supreme Court Writ, Velasco said. Cooperation and collaboration from every citizen are needed to solve operational challenges, such as excessive debris and garbage; theft of appurtenances; and the low acceptance rate for desludging services, he added.

To recall, a Writ of Continuing Mandamus was issued by the Supreme Court on December 18, 2008, directing 13 government agencies to clean up, rehabilitate and preserve Manila Bay in their different capacities.

Under its mandate, the MWSS is directed to provide, install, operate and maintain the necessary adequate wastewater-treatment facilities in Metro Manila, Rizal and Cavite were needed at the earliest possible time.

Under the writ, MWSS shall submit to the Court the list of areas in Metro Manila, Rizal and Cavite that do not have the necessary wastewater-treatment facilities.

The concessionaires of the MWSS were also asked to submit their plans and projects for the construction of wastewater-treatment facilities and their completion period for said facilities, which shall not go beyond 2037, the end of concession agreements.

Editor: Vittorio V. Vitug • Monday, July 9, 2018 A3

Duterte trains guns on delayed road projects, erring contractors

By Manuel T. Cayon

D

@awimailbox Mindanao Bureau Chief

AVAO CITY— President Duterte ordered the Department of Public Works and Highways (DPWH) to start canceling all road projects that have been delayed or he would hold its secretary “answerable.”

COMPOUNDED RISKS

A resident paddles his way out of the flooded Artex Compound in Malabon. The flood puts residents of the compound at risk of contracting leptospirosis, a bacterial infection that thrives on murky water. Malabon City has barangays that the Department of Health flagged for leptospirosis outbreak. NONIE REYES

School fixed as DENR eyes use of high-tech land-mapping tool for Marawi City rehab

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AVAO CITY—Bullet-riddled Pendolonan Elementary School in Marawi City got a surprised fixing from outsiders in time for the return of schoolchildren, a year after the locale became a battleground between government troops and alleged members of terrorist Islamic State (IS) group.

The sprucing up of the school occurred as government continues to address the rehabilitation of the southern Philippine urban center.

Acknowledging the enormity of such task, the Department of Environment and Natural Resources (DENR) plans to use a modern land-mapping system during the rehabilitation of Marawi City.

The Compostela Valley provincial government has selected the Pendolonan Elementary School for the repair of two classrooms and their on-suite toilets.

The provincial government also donated a 15,000-liter capacity tank to store drinking water.

The school was one of many buildings destroyed during the gun battle between government troops and armed men believed to be members of the IS for six months last year.

The provincial information office quoted one of the displaced teachers during the 2017 Marawi siege as expressing her gratitude to the volunteers “for extending their help in preparing school for the opening of classes.”

“Since the siege ended [in October last year], this is the first time we [felt] the love our fellow Filipinos in repairing our school, especially that you all

come from outside,” Faida P. Razul, the teacher, said.

GIS

ENVIRONMENT Secretary Roy A. Cimatu said the use of a geographic information system (GIS) land-mapping and information system is an important component of the Duterte administration’s “environmental peacebuilding” strategy.

In a statement, Cimatu said by using the system, the government could identify, establish, integrate, reconcile and reestablish existing technical and physical land boundaries.

“Properties in both private and public land, formal and informal settlement descriptions and delineations in the most affected areas and other surrounding areas of Marawi City will also be included in the land mapping to collect information,” Cimatu was quoted in the statement as saying.

The GIS is designed to capture, store, manipulate, analyze, manage and present all types of geographical data.

Utilizing the GIS-based land mapping and information system is in line with the DENR being designated as the agency in charge of the newly created land conflict management unit (LCMU) of Task Force Bangon Marawi’s Sub-committee on land resources management.

Indispensable

DENR Assistant Secretary for Field Operations in Mindanao Michelle Angelica Go, meanwhile, said the development of a GIS-based land mapping and information system in the area is “indispensable

considering the enormity of the survey and spatial data involved.”

Go added there’s also a need “to convert, harmonize and integrate the different maps and survey data sets coming from different agencies and those [that] are conducted under different survey systems and integrate them into one usable spatial data framework.”

According to Go, the government agency will be “deeply involved” in the settlement of land disputes “to make sure these parcels of land are rightfully claimed by its owners.”

The land title issue was a major concern raised during the planning process of the Marawi rehabilitation amid the issue of multiple claimants on a single private property.

Steps

GO said the LCMU will operate using a “step-by-step process for resolving landrelated disputes and preventing land-related violent conflict.”

“In general, the step-by-step process begins by bringing together all the key stakeholders, including the local government units involved, formal and traditional leaders, and the parties to the conflict to a dialogue process, followed by an adjudication and mediation process that arrives at a decision on the rightful owner or occupant of land,” Go said.

A comprehensive planning to solve the land issues for two pilot barangays, Kapantaran and Campo Ranao, is being conducted by agencies involved in the rehabilitation. Jonathan L. Mayuga and Manuel T. Cayon

He also urged the public to file cases against contractors for any mishap in the unfinished road projects and assured complainants he would back them up in the court.

“If that [road] project fails, I will hold you, secretary of the DPWH, answerable,” the Commander in Chief said. “If there is highway there [that] has [a] problem, and if the delay, or slippage as we call it, is about 20 percent, I will cancel the contract.”

Duterte said he would not like infrastructure projects, including road construction, to end up tainted with corruption.

“I am making this policy statement now because I have not seen any road in the Philippines that was finished on time but was always tainted with graft and corruption,” he said. “We will never progress; we will never develop.”

The President added it would always be a problem with how to protect and ensure proper use of the people’s money on projects.

“Every program of the government ends up in investigation. Look at the [Department of] Health,” he said, referring to the controversial anti-dengue vaccine that was blamed for the continuing deaths of children months after the vaccine was injected.

The President added beginning on Saturday, he would check road projects at random.

“I call on the attention of Secretary Mark Villar, that if there is any slippage of any work of any kind of a national road project, if I see anything beginning tomorrow [Saturday], I invite you all to see me in Malacañang.”

The President said it angered him to see roads not being repaired or maintained when these were being used by everyone every day.

“Many have fallen, many have died on the road projects,” he added. “Make it a criminal issue. If you fell or bumped in the unlighted, uncovered roads, you sue the government.”

Duterte said he believes the complainant would likely win the case.

“You sue the government and I will sue the supervisor and I will ask the Secretary to explain to me why it happened.”

Stepping down

ALSO on Friday, Duterte urged Congress to make him “resign or step down” as President prior to a referendum that would seek the adaption of a federal Constitution.

“Tonight [Friday], I will make a proposal: Make my term co-terminus with the beginning of the draft Constitution,” he said. “Make me stop being President during the transition. The constitutional committee chaired by former Supreme Court Justice Reynato Puno can make this correction and I may suggest and I would like Congress to approve it.”

Duterte also recommended that a President be elected “before you make the transition, from unitary to federal.”

“I would be willing to accept that proposal [and] galing sa akin iyan [it came from me].”

“I urge Congress, the [Constitutional Committee], to make the changes. Make me President only next year, 2019, and I will accept it, if that will satisfy everybody,” he added. “I really want to insert these changes. I have done many changes in the government but corruption remains to be a problem.”

A4 Monday, July 9, 2018 • Editor: Vittorio V. Vitug

Economy BusinessMirror

‘Banks to feel the pinch of new liquidity rules’

T

By Bianca Cuaresma

@BcuaresmaBM

he requirement of the Bangko Sentral ng Pilipinas (BSP) for banks to beef up their liquidity profiles will be good for the banking system in the long run, but will result in “short-term pain” for the sector, an international think tank said.

BMI Research, a Fitch Group subsidiary, assessed the impact of the BSP’s recently adopted net stable funding ratio (NSFR) guidelines for commercial banks and said the new rules will boost the Philippine banks’ stability in the long run.

In June the Monetary Board approved the adoption of the NSFR for u n ivers a l a nd com merc i a l banks in the country. The NSFR is a measure of the ability of a bank to fund its liquidity needs over one year.

“The BSP has typically been ahead of its regional peers when it comes to the adoption of macro pruden-

tial regulations and we believe that this [NSFR] will continue to help safeguard financial stability,” BMI Research said.

The think tank said, however, that Philippine banks are likely to feel “some pinch in the short term” in the form of higher transition and funding costs as they adjust their balance sheets in order to comply with the new standard. It also said the new standard is negative for financial intermediation in the country.

“In genera l, we believe that banks will likely be forced to cut back on short-term wholesale funding and raise deposit rates to at-

tract more retail deposits, which could see funding costs increase over the coming quarters,” BMI Research said.

“There will also likely be an increase in the issuance for longer-dated debt by banks with a maturity of one year or greater, which could lead to a steepening of the yield curve,” it added.

BMI Research said banks will likely be discouraged from conducting business that involves higher required stable funding. “ This may see banks cut back on long-term lending, undermining banks’ traditional role in liquidity and maturity transformation in the economy.”

The NSFR is the other half of the BSP’s liquidity guidelines for banks to comply with, according to the international Basel III standards. The other half is the liquidity coverage ratio (LCR), which was approved for implementation in early-2016.

W hile the NSFR ensures cash sufficiency for a year, the LCR covers a shorter period of over 30 days in which a bank shall hold sufficient high wuality liquid assets (HQLAs) that can be easily converted into cash to service their liquidity requirements.

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N.e.d.a. frowns on proposal to increase T.R.A.I.N. cash aid

By Cai U. Ordinario

T

@cuo_bm

he National Economic and Development Authority (Neda) said hiking the cash aid given to the poor to help them cope with price increases caused by the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) would be “difficult.”

Neda officials made the statement after House Assistant Majority Leader Michael Romero of 1-Pacman proposed the increase in the unconditional cash transfers (UCTs) to P500 per month, from the current P200.

The UCTs, however, are scheduled to go up to P300 per recipient on the second year of implementation of the TRAIN law.

“It’s kind of a quantum leap. It may be difficult [to increase the UCTs],” Socioeconomic Planning Secretary Ernesto M. Pernia told reporters at the sidelines of a recent news briefing.

Neda Undersecretary Rosemarie G. Edillon said the “more robust solution” to allow Filipinos to adjust to the TRAIN law is to “increase production, increase capacity, production capacity.”

Edillon said rolling out policies or intervening in the cash transfers may not be sustainable solutions to increasing per-capita incomes. She said this could be addressed by the government through the “Build, Build, Build ” (BBB) program that can boost employment and incomes for millions.

The UCTs, Edillon said, are only “stop gap” measures that are not designed for medium-

and long-term implementation.

“We have an immediate stop gap, but at the same time, we’ll put in the measures that are necessary for the more robust expansion of capacity and expansion of production,” she said.

Romero earlier said the increase in the UCT to P500 shall be sourced according to the funding provisions of the TRAIN law. He also said the increase in the UCT will benefit about 4 million families, or 22 million poor Filipinos—15 million of whom are children.

The national government is targeting to grow the economy by 7 percent to 8 percent in the medium term and reduce poverty incidence to 14 percent from the current 21.6 percent.

This will contribute to efforts to increase per-capita income levels to upper middleincome country levels as early as next year.

This is also in line with the Philippines AmBisyon to become a high-income country by 2040.

The Philippines is considered a lower middle-income country with a per capita gross national income of around $3,500 as of 2016. The World Bank said lower middleincome economies, like the Philippines, have a GNI per capita between $1,026 and $4,035.

As of 2016, the World Bank said low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of $1,025 or less in 2015.

Upper middle-income economies are those with a GNI per capita between $4,036 and $12,475, while high-income economies are those with a GNI per capita of $12,476 or more.

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Monday, July 9, 2018

A5

Bad weather cuts sugar output by 15.3%

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By Jasper Emmanuel Y. Arcalas

@jearcalas

hilippine raw-sugar production as of June 17 declined by 15.3 percent to 2.064 million metric tons, from 2.437 MMT recorded in the same period last year, according to preliminary data from the Sugar Regulatory Administration (SRA).

SRA data showed that total demand for raw sugar since the start of crop year 2017-2018 has reached 2.041 MMT, 13.64 percent higher than the 1.913 MMT recorded a year ago. Sugar crop year in the Philippines starts on September 1.

Figures from the SR A also indicated that refined sugar production grew slightly to 860,893.10 metric tons, from last year’s 860,204.80 MT. The local sugar industry was only able to mill about 23.608 MMT of sugarcane, 13.17 percent lower than the 27.190 MMT

recorded a year ago. This resulted in a 3.31-percent drop in milling recovery rate to 1.75 50-kilogram bag per ton cane from last year’s 1.81 LKg/TC. The decline in the country’s output has been attributed to “unfavorable weather conditions,” particularly the increase in rainfall over some sugar-producing provinces.

The Philippine Sugar Millers Association (PSMA) has estimated that total rawsugar production in the current crop year 2017-2018 may decline by 16 percent to a seven-year low of 2.1 MMT due to the

BAFS to launch online application for permits to sell organic fertilizer T

he Bureau of Agriculture and Fisheries Standards (BAFS) said it will roll out a Web-based system that would fast-track the issuance of permits to sell organic fertilizer in the country before the end of the year.

BAFS Executive Director Vivencio R. Mamaril told the BusinessMirror that the system, which is expected to cut costs incurred by businessmen, may be launched by the fourth quarter. This Web-based system, Mamaril said, would ensure that the agency’s decision on the issuance of permits would be “on time and transparent.”

“It has always been the complaint of businesses that the application of permits from all bureaus takes a lot of time,” Mamaril said in an interview. “With this kind of system, you will see in real time what is happening to your application, if it is being evaluated or not.”

Mamaril said the system would also applicants to complain about the evaluation and issuance process undertaken by the attached agency of the Department of Agriculture (DA).

“They can complain if we are not doing our job. Also, if we do not act on their applications within a certain number of days, then it is considered approved,” he said.

The BAFS chief said the agency has set a period of time for every stage of the application process—whether for new permits or the renewal of existing ones—to ensure proper monitoring.

“Business-wise, this [system] would cut their costs because we should not go beyond the number of days required to complete the application,” Mamaril said.

“The applicant will see online in real time what is happening to his application.

So that would entail less phone calls or less follow-ups on their part. And they will not anymore go here physically to seek updates on their application,” he added.

At present, the application for permits to sell organic fertilizers is done manually, according to Mamaril. With the Web-based system, he said applicants would only go to the agency to sign their application.

Mamaril said the BAFS is on track in launching the system by the fourth quarter, as the agency has already developed about 60 percent to 80 percent of the platform since January.

Under the DA’s Department Circular No. 5, Series of 2015, the BAFS is mandated to oversee the registration of organic fertilizers sold in the country. The circular requires an organic fertilizer producer to first secure an experimental use permit (EUP) before applying for a certificate of registration (COR).

BAFS has a maximum of 17 days to process an EUP application, with much of the days devoted to the assessment and evaluation of the applicant’s test protocol for the efficacy of the product.

Upon approval, the applicant will be given a notice to proceed. After conducting an experiment, the applicant has an option to apply for a provisional COR or for “full registration.” The provisional COR and “full” COR is valid for one year and three years, respectively.

The BAFS also has a 17-day timeline for the approval of an application for a COR. Jasper Emmanuel Y. Arcalas, Jenn Kiana Louise N. Cardeno and Monique Danielle A. Fernando

Soybeans post record rally with demand gain overshadowing US-China trade war

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oybean futures, which had been plummeting over the past month as the United States inched closer to a trade war with China, posted a record move higher on Friday as the promised tariffs were finally imposed.

While purchases have slowed from China, the world’s biggest importer, American soybeans got so cheap that other countries have started to increase purchases, US government data show.

Futures for November delivery climbed 4.5 percent to $8.945 a bushel on Chicago Board of Trade, the biggest gain since the contract began trading in late-2014. The day before, it had touched its lowest ever after tumbling 17 percent since the end of May. Soybeans are among the American goods targeted by Chinese tariffs after the US implemented duties earlier in the day

and President Donald J. Trump threatened more action.

“US prices are already at a huge discount to Brazilian soybeans, sending the rest of the world to our doorstep,” Arlan Suderman, chief commodities economist at INTL FCStone in Kansas City, Missouri, said in a report. “Export demand is unseasonably strong from the rest of the world, which is taking advantage of the current fire sale in the oilseed market.”

In the week ended June 28, net American exports more than doubled from a year earlier to 1.02 million tons, based on sales for the current marketing year and the next, according to the US Department of Agriculture. Some amounts that were originally sold to China have been redirected to countries including Pakistan and Bangladesh, the USDA said. Bloomberg News

exodus of sugarcane cutters from the sector and lower yield.

PSMA Executive Director Francisco D. Varua told the BusinessMirror that their group’s latest forecast was based on their recent survey involving sugar millers and other industry stakeholders.

“We conducted our own survey, and there has been really lower [sugar] production because of unfavorable weather conditions, especially in Mindanao where there has been a lot of rainfall,” Varua said in an interview in May. “Another reason is that the harvesting of cane has slowed,” he added. “[The sugar millers] are having a difficult time finding sugarcane cutters, because they are shifting to construction jobs, which offers a higher pay.”

Earlier, Agriculture Secretary Emmanuel F. Piñol said the country’s total sugar production in the current crop year ending August 31 may fall below the SRA’s estimated output of 2.27 MMT by as much as 200,000 MT. This means that total sugar production may settle at around 2.07 MMT, 17.2 percent lower than the 2.5 MMT produced in the previous crop year.

Various brands of refined and brown sugar are on display at a local supermarket in this file photo. Data from the Sugar Regulatory Administration revealed that raw-sugar production as of June 17 declined by 15.3 percent due to unfavorable weather conditions. NONIE REYES

Green Monday BusinessMirror

A8 Monday, July 9, 2018

www.businessmirror.com.ph • Editor: Lyn Resurreccion

Success stories brighten Asia’s bleak forestry picture

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By Dr. Michael A. Bengwayan

lthough the record of reforestation in the Asia-Pacific region is dismal, several success stories—in the Philippines, South Korea, India and China—have kindled new hope among environmentalists and tree growers.

The reason is not hard to find.

Many of the projects feature innovative approaches that may find wide use in the world, particularly in developing nations.

South Korea as model

In reforestation, South Korea has emerged a model. In just 20 years, from 1980 to 2000, the Korean countryside has been transformed into thick forests.

In 1970 South Korea was a barren, denuded country plagued by soil erosion. Its hillsides were eroded and the land lost most of its water retention capacity. But as of 1977, some 643,000 hectares— roughly half the size of area planted to rice nationwide—had been planted to fast-growing trees. The area reforested doubled by 1989.

How? The government created the Korea Forest Service in 1967 and after legal and institutional preparations, the initiated the 10-year forest rehabilitation plan starting in 1973.

The first national forest plan, which was launched in 1973, aimed to restore denuded forest. The government encouraged the public to plant fast-growing trees, declaring a nationwide tree planting period from March 21 to April 20 every year. This sparked massive and intensive tree planting.

The success is due primarily due to the organization of federally linked village forestry associations and the direct participation of villagers in reforestation efforts.

Through the association, composed of representatives of house-

holds, each participating village plants, tends and harvests the woodlots without pay.

Harvested wood is distributed among households and the proceeds from any marketable surplus are used to support other community development projects.

The program’s primary aim was to bring back the forests to stabilize land and water supply, and the secondary aim, to provide enough firewood to satisfy the fuel needs of all rural communities.

The economic gains were obvious to the villagers: the switch back to local wood supplies means they can now pocket the 15 percent of their income that they were forced to spend on local coal when firewood became scarce.

India’s experience

The community forestry success story in Gujarat, western India, also bears telling. The state forestry has observed that existing forest reserves, however skillfully managed, could not satisfy the local firewood needs.

In 1970 Gujarat launched a village woodlot-forestation program, planting trees in roadside strips, irrigation canal banks and other state-owned lands.

The idea in each case was to let nearby community take responsibility for managing the woodlots.

The United Nations Environmental Program evaluated the program and noted: “The roadside and canal bank plantations did not involve public participation to a degree that social forestry could be achieved, but, nevertheless,

A forest in Maasin, Southern Leyte. Nonie Reyes

a marked critical psychological turning point was achieved, when, seeing thousands of strands of trees arise on what have been desolate grounds, some 2 million people trooped to the state government begging to be involved in the tree-planting program.”

In just nine years, from 1979 to 1989, some 17,000 kilometers of Gujarat’s roadways and canals combined were lined with approximately 20 million trees, yearly 4 million to 5 million trees were added.

Eventually, this forestry model became a people’s program. Under this, the state embarked upon an ambitious mission of organizing and motivating more people to take up tree plantation on other lands like in Panchayat lands, wastelands, farmlands school and college compounds and other government lands.

The results of the program were encouraging, and were appreciated internationally.

After the success of the initial efforts, the state was encouraged to formulate a project extending to all the districts. In the last 10 years or so, the project has been funded by the state and consequently Gujarat has switched from being a food deficit to a food surplus state.

As a pioneer in the social forestry sector, the success of Gujarat has been globally acclaimed.

China’s mind-boggling reforestation

China’S experience may be the most mind-boggling. Through the mobilization of massive human labor, its reforestation rate has been increasing from 5 percent in 1960 to 12.5 percent in 1980.

Reforestation and afforestation of wastelands, including deserts, are ongoing not only to increase forestland but to prevent desertification, reduce flooding, erosion and siltation, and increase lumber supply and fuelwood in the rural areas.

In 1978 China introduced the Natural Forest Conservation Program, a logging ban to help protect against erosion and rapid runoff.

This was followed with two national programs. One was the Grain to Green program, which is basically to reconvert agricultural fields in steep slopes into forests.

And the other is the natural forest conservation program, which is, in a sense, a logging ban to prevent deforestation and also to increase the aerial forests.

China is regreening the vast Kubuqi desert through a Great Green Wall program, designed to

Asean, EU open Zooming in on Biodiversity photo contest

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o promote appreciation to the biodiversity richness of the Asean region through photography, the Asean Centre for Biodiversity (ACB), with support from the European Union (EU), calls on all photography and nature enthusiasts to join this year’s staging of the Zooming in on Biodiversity, an Aseanwide photo competition.

In commemoration of the 2018 International Day for Biological Diversity with the theme, “Celebrating 25 Years of Action for Biodiversity,” the center is in search for powerful photographs related to the following biodiversity areas: coastal and marine biodiversity; agrobiodiversity; wildlife species; urban biodiversity; and wetlands and peatlands.

This year’s contest, which is a major initiative under the ACB and EU’s Biodiversity Conservation and Management of Protected Areas in Asean Project, has the overall theme “Capturing the richness of biological resources in the Asean region.”

The initial leg of the contest, held in 2009 and with the theme “Biodiversity and Me,” generated close to 1,000 entries from youth, amateur and professional photographers from the 10 Asean member-states.

The impressive selection of photographs captured not only various plant and animal species, but also photographs featuring the relationship of biodiversity with issues, such as climate change, food security, livelihood and health. These powerful images helped boost the promotion of the values of

biodiversity among various audiences.

“Biodiversity and Climate Change” was the theme for the second staging of the event. The contest helped draw public attention to the challenge of climate change, and to the need for both global and local action to address this issue.

The third staging in 2015 had the theme “Biodiversity for Sustainable Development” to communicate ways on how to achieve the balance between development and biodiversity conservation. The contest was in line with the Convention on Biological Diversity’s Aichi Target 1, which states that “By 2020, at the latest, people are aware of the values of biodiversity and the steps they can take to conserve and use it sustainably.”

Cash prizes and opportunities for their photos to get published in major ACB publications and exhibits await the winners.

Registration to the contest is free of charge and is open to all citizens of the Asean region— Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The ACB was established in 2005 by the Asean as a response to the challenge of biodiversity loss in the region. It supports and coordinates the implementation of ac tivities in the Asean leading to the conser vation and sustainable use of biological diversity, for the benefit of the region and the Asean member-states.

For those who wish to join the contest, visit www.aseanbiodiversity.org/zoomingin.

reverse decades of desertification.

It is quickly turning back the spread of desert by planting fastgrowing trees, such as aspen, that would rapidly establish deep webs of soil-stabilizing roots and form a shady canopy.

The new forest could also potentially provide some local economic benefits in the form of wood fiber for paper pulp or building materials.

NGOs-led reforestation in the Philippines

In the Philippines, where through the past years forest depletion was brought about by over-exploitation and mismanaged forest policies, noble reforestation efforts are being spearheaded by private foundations and nongovernment organizations (NGOs).

One effort by the Aboitiz Foundation in Mindanao reforested 2,000 hectares with 2 million trees in partnership with the indigenous peoples Matigsalog lumad in the rebel-infested badlands of Marilog, in Davao del Sur. The lumad were provided with agroforestry skills for livelihood in exchange for planting denuded forest lands.

North of the Philippines in Luzon, the Cordillera Ecological Center raises and plants thousands

of trees yearly, mostly pine trees, and spearheads forestation effort with hundreds of volunteers with groups like A Tree A Day. Another is the Haribon-led Road to 2020 ROAD (Rainforestation Organizations and Advocates), which started in 2005.

It is an environmental movement to restore Philippine rainforests using native tree species, such as narra, apitong, lauan and many others, and to sustain provisions of ecological goods and services by 2020 through an informed and engaged people.

It provides an opportunity for everyone to come together and help bring back the country’s natural forests.

The Philippine government has exerted efforts in bringing back forests in its fast-balding hinterlands. But the nationally led forestation programs like the 1990 Asian Development Bank-funded National Contract Reforestation Program and the 2002-National Greening Program were stained with corruption and failure.

This is a far cry from earlier forestation efforts by the Philippine government like the Program for Ecosystem Management from 1970 to 1978 that met success.

Today, the rate of deforestation in the Philippines still outpaces the rate of forestation, and there exists a backlog of some 5 million hectares of open and understocked forestland in the country.

But one thing is certain in the experiences of the four countries.

Local peoples, private institutions, companies and schools are joining the efforts in tree planting.

This trend in reforestation is made more urgent by international calls to reduce carbon footprint as no one can underemphasize the value of forests as source of oxygen, carbon dioxide sink and main factor in global cooling, rather than just a natural resource for lumber or firewood.

The forest is man’s primeval source of almost everything, the benefits equally crucial but often intangible, such that not many know that the only way to keep it with mankind starts with a simple tree planting.

Maynilad’s wastewater facility in Dagat-dagatan being upgraded

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ay n ilad Water Ser vices Inc. (Maynilad) is upgrading its Dagatdagatan Sewage and Septage Treatment Plant (DDSSTP), which will enhance the facility’s operational efficiency in treating the wastewater generated by some 16,000 customers in Caloocan, Malabon and Navotas, as well as the septage generated by more than 4 million customers in the northern part of the West concession.

The P70-million rehabilitation project involves the refurbishment of laboratory facilities, renovation of the existing power-house and hazardous waste storage facility and rehabilitation of the building and offices at the facility, among other activities.

Targeted for completion in February 2019, the rehabilitation project will enhance the DDSSTP’s daily operations, thus, sustain its role in protecting the environment and community health through proper wastewater and septage management in the area.

“Part of our long-term plan is to construct the largest sewage-treatment plant in the West Zone within our Dagatdagatan facility, which will produce effluent that complies with the stricter quality standards of the Department of Environment and Natural Resources.

Ultimately, this will help to reduce pollution loading in waterways that empty out to Manila Bay,” said Maynilad President

and CEO Ramoncito S. Fernandez.

Maynilad’s wastewater infrastructure network currently includes 17 sewage t re at m e nt p l a nt s, t wo s e wa g e a n d septage treatment plants, one septage treatment plant, 42 pumping stations, 21 lift stations and more than 500 kilometers of sewer lines.

DDSSTP is the first facility of its kind in the Asia-Pacific region to attain triple international standard accreditations on Quality Management Systems (ISO 9001:2000) and Environmental Management Systems (ISO 14001:2004) in Januar y 2007, and O ccupational Safety and Health Management Systems (OHSAS 18001:2007) and has consistently maintained its Integrated Management Systems certification.

Maynilad is the largest private water concessionaire in the Philippines in terms of customer base. It is the agent and contractor of the Metropolitan Waterworks and Sewerage System (MWSS) for the West Zone of the Greater Manila Area, which is composed of the cities of Manila (certain portions), Quezon City (certain portions), Makati (west of South Super Highway), Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon all in Metro Manila; the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario, all in Cavite province.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, July 9, 2018

Editor: Lyn Resurreccion • www.businessmirror.com.ph

A9

Butterflies in Manila: A symbol of hope for urban biodiversity

By Jonathan L. Mayuga

M

@jonlmayuga

Besides Arroceros Park and Mehan Garden, the other sites are the Manila Zoological and Botanical Garden, and the Japanese Garden at the famous Luneta Park.

The parks, though most are manmade, serve as habitats for various organisms making them important spaces for urban biodiversity within a busy megacity.

The team believes that the presence of the host plants, nectarine plants and water resources in these parks are favorable for the survival of butterflies, including some endemic and threatened species.

ost Filipinos believe in the superstition that a butterfly is a reincarnation of a departed loved one. That when a butterfly is wandering in one’s home, it is believed that they are the departed loved ones who came to visit.

Such stories never fail to generate the mixed feelings of relief, love, inspiration and hope, especially for those who live in the city, where the birds, the bees, the flowers and the trees are now hard to find.

But what do butterflies truly represent, especially in a polluted setting like Metropolitan Manila, specifically the bustling city of Manila, the country’s capital city?

Biodiversity values

Butterflies are valuable parts of biodiversity, or urban biodiversity in the case of Manila, said wildlife expert Josefina de Leon, the chief of the Wildlife Resources Division of the Biodiversity Management Bureau (BMB).

In an interview on June 25, de Leon said like all other species, butterflies have important ecosystem functions.

Among this is pollination—or the transfer of pollen grains from the male anther of a flower to the female stigma—that enables fertilization and the production of seeds.

At the larval stage, butterflies are preys for birds or other insects.

When fully grown, butterflies add value to the aesthetic beauty of the natural environment.

Strength in diversity

Maintaining a healthy population of diverse species of butterflies is important in many ways, especially in sustaining the survival of other species. De Leon said butterflies rely on the diversity of its species in fighting extinction and, eventually, adapting and thriving in changing environments, allowing other species to do the same.

She explained: “The more diverse the species, the higher their chance against becoming instinct.

The higher they have a chance to adapt to the changing environment, the higher number of performing similar functions result in higher productivity and maintenance of ecological services they provide.”

Butterflies, by nature, have a very short lifespan, making the species prone to extinction.

“Most survive for a few weeks only and a few for several months,” she noted.

Butterfly diversity

Butterflies and pollution

A group of Filipino scientists is currently studying the existence of butterf lies and a selected green space, where their remaining their species in Metro Manila continues to thrive.

“Butterfly Diversity and Pollution: The Case in Manila City” is a Commission on Higher Education (CHED)-funded project of Universidad de Manila that uses wireless environmental monitoring sensors in assessing the impact of megacity environmental pollution and the local climate on butterfly diversity in Manila.

It aims to look into the plight of the very diverse yet highly vulnerable species that seemed to have survived and continue to thrive despite the shrinking green spaces in the heart of the urban jungle that is Manila.

First of its kind

Custer C. Deocaris, research chief of the Research Management Division of CHED that funded the study, told the BusinessMirror in a telephone interview on June 27 that the project is unique and can be considered a first of its kind.

“It’s a small university that is able to come up with a big discovery because of the trust and confidence the Commission gave,” he said.

“Any small university, capacitated, is capable of coming up with big discoveries. It’s CHED’s way of giving chance and equity to smaller universities, allowing them to excel in research and make significant breakthroughs,” he added.

According to Deocaris, the CHED, by funding research and development projects, is pushing for the composition of an interdisciplinary team to work in solving a complex problem. This includes butterfly diversity and pollution, and the impact of pollution to biodiversity in an urban setting, where experts in various fields of science work as a team under Universidad de Manila.

Why butterflies?

The Philippines, being a tropical country, is home to a diverse species of butterflies.

Arroceros Forest Park Butterfly Diversity & Pollution: The Case in Manila City study group

Golden birdwing butterfly (Troides rhadamantus) species listed under CITES Appendix II, or threatened species.

In urban areas, there is very little appreciation of their biodiversity values, not to mention the fact that they are rarely observed as they become scarce.

Around 90 percent of butterflies live in tropical areas like the Philippines, making the country prone to the occurrence of mysterious crawling caterpillars that eventually turn into beautiful winged creatures of diverse shapes and colors.

Despite this, little information is known about the behavior and diversity of butterf lies in the urban setting, although generally, butter f lies are know n to have short lifespan.

Butterf lies also have limited dispersal ability, food-plant specialization and dependence on weat her a nd c l im ate c ha nges, making them good indicators of environmental changes. According to proponents of the study, understanding the effect of environmental pollution is essential in predicting the behavioral patterns and diversity among butterf lies.

Manila’s butterflies represent a symbol of an urgent call to intensify efforts to preserve the last remaining green spaces in highly urbanized areas.

“The message with the butterflies is that there is still hope,” the study proponents said.

Baseline information

The st udy w i l l at tempt to a nswer questions—such as why are butterf lies an important component of biod iversit y a nd wh at is

t he role of u rba n g reen pa rk s to but ter f ly d iversit y.

The study also hopes to develop baseline information about the diversity of Manila butterflies, reference data on environmental pollution and local climate, as well as a reference on policy formulation for protecting urban diversity and green spaces.

Through the project, the team also hopes to help disseminate information and enhance awareness about the importance of Manila’s butterflies and their habitats, rally support behind the conservation of the threatened butterfly species of Manila, and preserve the all-important urban green parks that are threatened by unbridled development.

Advocacy project

The project has been going on for several months now. At a news conference at a hotel in Intramuros, Manila, on June 23, the study proponents launched their advocacy to save Manila’s butterflies and preserve their habitats.

There are several green parks in the thickly populated urban centers in the National Capital Region. In the heart of every city sits green parks that are considered the “lungs” of these highly urbanized areas.

Manila is home to the Arroceros Park, the city’s last remaining forest cover, and Mehan Garden, the oldest botanical garden in Southeast Asia.

T hese parks are home to u n ique but ter f ly s pec ies considered to be the most v u lnerable among ind icator species of a hea lthy ecosystem.

Where there is a butterfly, the group believes there is hope for the survival of threatened urban biodiversity.

“These areas are ideal ecosystems for butterflies because they have water or they are near water bodies like the Pasig River and Manila Bay,” said butterfly expert Alma E. Nacua, a professor at the Universidad de Manila.

Interdisciplinary team

Ot her members of t he tea m working on the project are Amalfi B. Tabin, also an educator from Universidad de Manila; Ernest P. Macalalad, a space scientist from Mapua University; De La Salle University’s Maria Cecilia D. Galvez, a physicist; Aileen H. Orbecido, an environmental engineer; Lawrence P. Belo, a chemical engineer; and Ken Joseph E. Clemente, an ecologist from the University of Santo Tomas.

The team will work on the study until April 2019, with the aim of coming up with important scientific finds and relevant policy recommendations.

“Besides being the first project of its kind in the country by merging urban biodiversity with pollution studies, the interdisciplinar y nature of the project makes it unique, among others,” Nacua said, noting that the team is composed of experts in biodiversity, ecolog y, physics, space science, chemical engineering and environmental engineering.

“It is very seldom that diverse expertise is gathered together to attain a common scientific goal. It’s true in our case that there is unity in diversity,” she added.

Vulnerable species

Nacua, who is leading the study, said butterflies are the most vulnerable indicator species among all insects.

They are highly vulnerable or susceptible to pollution that many believe is the nature and character of Manila—which the study will attempt to prove or disprove.

“Initially, we learned that butterflies are directly affected by the level of pollution in Manila. But the pollution in Manila is erratic.

Sometimes it goes up, sometimes it goes down,” she noted.

Urban biodiversity centers

The study is being conducted in four urban green parks in Manila.

Preliminary findings revealed there are more than 30 species of butterf lies—three are endemic, one threatened and two new subspecies that were first ever recorded in Manila.

The golden birdwing butterfly (Troides rhadamantus) is listed as threatened under the Convention on International Trade in Endangered Species of Wild Fauna and Flora.

Hence, the team posits that amid the issues of shutting down Arroceros Park—which it described as Manila’s last lung—the green spaces should be preserved.

“This conservation advocacy is not only for butterflies, but also to all other organisms to which we can act as responsible cohabitants,” Nacua said.

The impacts of pollution on butterflies remain unknown, although it is well reported that host plants and food plants have direct effects on their survival.

T he g roup be l ie ves t h at a s long a s host pl a nt s a nd food pl a nts i n t he g reen spaces re m a i n i nt ac t, but ter f ly popu l ations have better chances of surv iva l amid the indirect effects of env i ronment a l pol lut ion.

For his par t, C lemente said the study wou ld hopef u l ly come up w ith polic y recommendation f rom the perspective of scientists on how to save Mani la’s threatened butter f lies and their l a st rem a i n i ng ecos y stem s i n Metro Mani la.

“The mere presence of these butterflies in a highly urbanized area like Manila is a sign that there is hope for urban biodiversity to survive, as long as these urban green parks are preserved,” he said.

“Who would have thought that Manila is home to these unique species of butterflies despite being highly urbanized and polluted?” he asked.

He said the existence of Manila’s unique butterf lies only goes to show that maintaining green spaces, no matter how small, is important and will help species survive and thrive even in a concrete jungle like Manila.

Intl biodiversity leaders discuss urgency to scale up biodiversity conservation efforts

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ONTREAL, Canada—World leaders on biodiversity protec tion and conservation are holding successive meetings to prepare recommendations for the Convention on Biological Diversity (CBD) Conference of the Parties at its 14th Meeting (COP14) in November, and for other upcoming global conferences on biodiversity.

They held the 22nd meeting of the Subsidiary Body on Scientific, Technical and Technological Advice (SBSTTA 22) of the CBD from July 2 to 7, and will hold the second meeting of the CBD’s Subsidiary Body on Implementation (SBI2) from July 9 to 13.

SBST TA 22 will highlight various biodiversity concerns, such as: digital sequence information on genetic resources; risk assessment and risk management of living modified organisms (LMOs); synthetic biology; updated scientific assessments of progress toward the Aichi Biodiversity Targets, in particular, targets on which the

least progress has been made; protected areas and other measures for enhanced conservation and management; and marine and coastal biodiversity, to name a few.

SBSTTA is an advisory body to the CBD, providing recommendations to the COP to the convention and/or the Meeting of the Parties to the protocols. To date, the Convention has two protocols—the Nagoya Protocol on Access and Benefit Sharing and the Cartagena Protocol on Biosafety.

Discussions in the SBSTTA revolve around topics along the two protocols coupled with emerging and pressing issues on biodiversity conservation. The CBD has approximately 200 member-countries, including all the 10 Asean member-states.

D u r i n g t h e o p e n i n g p l e n a r y, C B D E x e c u t i v e S e c r e t a r y C r i s t i a n a Pa ș c a Pa l m e r d i s c u s s e d t h e i m p o r t a n c e o f accelerating effor ts in implementing biodiversity conser vation commitments

at the national level since parties to the Convention can still do more in two years to move closer to the achievement of the Aichi Biodiversity Targets.

Palmer emphasized the need to “build a strong case for biodiversity” by calling on scientists and practitioners to join hands in fostering “transformational approaches to address the root causes of ecosystem degradation.”

SBSTTA Chairman Dr. Theresa Mundita S. Lim, who is also the executive director of the Asean Centre for Biodiversity (ACB), highlighted the impor tance of taking effective and urgent action to conserve biodiversity during the opening session of the 22nd meeting of SBSTTA. Lim was elected chairman of SBSTTA in December 2016 during the COP13th to the CBD in Cancun, Mexico, and has chaired SBSTTA 21.

“The Parties to the Convention are now close to achieving the 2020 Aichi

Biodiversity Targets which will lay the groundwork for defining the long-term 2 0 5 0 Vi s i o n f o r B i o d i ve r s i t y, w h e re transformational change is needed for biodiversity to address the needs of a warming world, burgeoning population and increasing economic inequality in an effective way,” Lim said. A Filipino, Lim was the immediate past head of the Biodiversity Management Bureau of the Philippines’s Department of Environment and Natural Resources.

For the first time, the meeting will tackle Digital Sequence Information (DSI) which is considered to be one of the most pressing concerns for discussion in the SBSTTA 22.

DSI is a collection of deposited genetic information of various species in computers, gadgets and databases from years of studies conducted.

For example, a researcher conducting a study on a particular species will gather

genetic information and sequence analysis of gene information. These information will later on be deposited to a database and be accessed by various individuals with various interests. In the information age, when knowledge is considered a raw material, these genetic information, through the aid of emerging technologies, such as synthetic biology using gene editing could be used for various commercial purposes.

This unregulated leeway of data access on genetic-resources information raised concerns on the Access and Benefit Sharing under the Nagoya Protocol of the Convention.

Who owns the rights on these genetic information? How will products derived from the genetic resources affect existing trade and value chain arrangements? Lim stated that it is important for digital-sequence information to be inclusive so that it would benefit many people, not only a few.

Once adopted, the recommendations at

the SBSTTA Meeting will be considered during the CBD COP14 which will be held in Egypt in November this year.

As ACB executive director, Lim also puts forward the importance of biodiversity in the Asean region, stating that it is home to almost 20 percent of the world’s plants and animals, 35 percent of global mangrove forests, 34 percent of the world’s coral reefs, and has over 200 million hectares of forest cover.

However, the Asean region is now facing a serious threat of biodiversity loss.

According to the Second Edition of the Asean Biodiversity Outlook by the ACB, the region is projected to lose 70 percent to 90 percent of habitats and 13 percent to 42 percent of species by 2100. Assessments of forest ecosystems indicate an average annual rate of loss of 1.26 percent from 2000 to 2010. The collective actions of the AMS have caused this rate to decline to 0.26 percent in the last five years (2010 to 2015).

A10 Monday, July 9, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Mexico’s new president

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exico just concluded its presidential election, giving landslide victory to a “populist” candidate outside the mainstream political parties. Andrés Manuel López Obrador, or Amlo as he is popularly known, successfully ran his third campaign for the highest office.

He takes over the leadership of a country that might best be classified as a “functioning failed state.” According to the Mexican risk-analysis and crisis-management firm Etellekt, in the nine months leading up to the presidential election, 132 incumbent politicians or candidates were killed. The group disclosed that 22 of Mexico’s 31 states have seen a political assassination since campaigning began in September.

Obrador was elected because of the people’s frustration with the current players in the political system, which have been unable to stop a deep security crisis while being entangled in a series of corruption scandals.

Unlike many other countries facing a communist or Islamic insurgency creating pockets without central or local government control, Mexico is at the mercy of its drug cartels. The government’s decades-long war against the drug cartels has seen 200,000 people killed. Over 25,000 people were murdered in Mexico in 2017, according to official figures— the highest number ever recorded—and the numbers for the first five months of 2018 are up 15 percent against the same period last year.

While some would refuse to see a direct causation, there is correlation between violent crime and the illegal drug business. Further, corruption in the government, particularly in law enforcement, follows the illegal-drug business.

Criticism of the Mexican government’s official “War on Drugs” focuses on its success—or lack thereof—and the methods used by the government. The public is put in the terrible position of two extreme logical positions: “If you can’t eliminate the illegal-drug problem, kill them all” against “If you can’t solve the illegal-drug problem, don’t kill anyone.” That sounds familiar.

In a turn from existing policy, Obrador has offered an alternative based on the “Colombian Solution” of stopping the war on drugs. Of course, no one wants to talk about the fact that Colombia’s cocaine production in now the highest in history since the “war” was halted.

President Obrador has suggested some sort of amnesty for marijuana and opium poppy farmers, as well as some sort of reconciliation and reduced prison time for members of the cartels. The families of victims of the cartel death squads are not pleased with these ideas.

Somewhere in the conversation always comes the idea that poverty is a root cause of the illegal-drug business, and if a nation could only reduce the number of poor people, the drug cartels—with their billions of dollars—would not be so powerful.

In theory, that may hold some truth. But the reality is that the Mexican drug cartels generate an estimated $30 billion in revenue per year, and that amount is probably grossly understated. Even at $30 billion a year, that money is 3 percent of the Mexican economy and a staggering 10 percent of the entire Mexican government budget for 2018.

Even as Obrador wants to consider some form of legalization of certain drugs, that can only help curtail illegal-drug activity if all countries make “drugs” legal. But even then, illegal sales of marijuana are still common in US states where marijuana is totally legal because the black-market price is lower, as it is not subject to tax.

President Obrador is going to need all the divine inspiration and good luck he can get to achieve success in his plans and programs.

Preparing for the rise of the gig economy

I

The gig economy is going to become more popular and more accepted by many, especially those who can see that others are successful at this kind of arrangement. The estimate is that one out of every five workers will be working as a freelancer in 2020—that’s just more than a year from now. Additionally, the freelancers will be getting more jobs from other countries.

This is nothing new, even in the Philippines. But in recent times it has become more widely practiced and embraced by workers who want to avoid the hassles of daily commute and to be able to manage the way they work: when, where and how. It has also become more popular with the millennials—the digital natives.

Technology perfectly supports this manner of working.

According to recent studies by PayPal, Ernst & Young, and others,

Aside from jobs in the creative industries (writer, artist, etc.), there are also freelancing opportunities in the fields of data entry/Internet research, virtual assistance, transport service, education and customer service.

As a matter of fact, freelancing is more accepted in other places today.

In the United States, for example, freelancing is growing faster than traditional employment; 34 percent of the US work forces are freelancers. Locally, however, people are still looking for the security of a regular

Atty. Jose Ferdinand M. Rojas II

RISING SUN

ncreasingly becoming more popular in the past years is the freelance work model. A freelancer is a worker who is not a regular employee and does not enjoy the benefits of one. He or she may sign work contracts on a per-project basis and can usually finish the work in a relatively short period of time. freelancing is going to experience further growth in the Philippines.

The gig economy is going to become more popular and more accepted by many, especially those who can see that others are successful at this kind of arrangement. The estimate is that one out of every five workers will be working as a freelancer in 2020—that’s just more than a year from now. Additionally, the freelancers will be getting more jobs from other countries.

Explosive weapons in populated areas

A

Recent armed conflicts have shown that the use of explosive weapons that have wide-area effects in populated areas is a major cause of civilian casualties and of damage to, or destruction of, civilian homes and critical infrastructure.

The consequences on the health of civilians are not limited to death, physical injury and disability but also include long-term impacts on mental well-being.

The explosive weapons raising concerns when used in populated areas are those having wide-area effects. There is generally no cause for concern when such weapons are used in open battlefields, but when they are used against military objectives located in populated areas, their effects are often indiscriminate and devastating for civilians.

Explosive weapons might affect a wide area because of the large destruction radius of the munition used, the inaccuracy of the delivery system and/or the delivery of multiple munitions over a wide area.

These categories of explosive weapons include large bombs and missiles, indirect-fire weapon systems, such as mortars, rockets and artillery, multibarrel rocket launchers and

in populated areas is a major cause of civilian casualties and of damage to, or destruction of, civilian homes and critical infrastructure.

The consequences on the health of civilians are not limited to death, physical injury and disability but also include long-term impacts on mental well-being. The ability of health-care facilities and services to cope with a massive influx of wounded people and the injuries they present, and to provide adequate care, is also significantly affected.

Less visible but equally devastating are the reverberating effects of an attack using explosive weapons in populated areas, as consequences of incidental damage to critical infrastructure. For example, damage to a hospital is likely to cause disruption to medical services, which, in turn, is likely to lead to the death of patients.

Damage to critical infrastructure, such as water and electrical facilities and supply networks, which are particularly vulnerable to the effects of explosive weapons, can cause severe disruption to the essential services on which civilians depend for their

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Atty. Lorna Patajo-Kapunan

legally speaking

rmed conflicts are increasingly fought in population centers, but often with weapon systems that were originally designed for use in open battlefields. When used in populated areas, explosive weapons that have wide-area effects are very likely to have indiscriminate effects. They are a major cause of harm to civilians and of disruption of services essential for their survival. I am sharing this Facts Sheet given by the International Committee of the Red Cross (ICRC) at the meeting I recently attended in Geneva for National Society Legal Advisers of Red Cross/Red Crescent. Explosive weapons are activated by the detonation of high-explosive substances creating blast and fragmentation effects. certain types of improvised explosive devices.

Most armed forces and many non-State armed groups have these kinds of weapons. While their typical effects when used in populated areas are often foreseeable, parties to armed conflicts rarely adapt their means and methods of warfare to urban environments.

The terms “densely populated areas” and “populated areas” should be understood as synonymous with “concentration of civilians,” defined in international humanitarian law (IHL) as “a city, town, village or other areas containing a similar concentration of civilian or civilians objects.”

Recent armed conflicts have shown that the use of explosive weapons that have wide-area effects

job. But, as time goes by and as a result of the technological changes in the modern world, there is increasing evidence that the Philippines is definitely heading in that direction.

Because of this, everybody needs to step up to the challenges.

For instance, our lawmakers need to start discussing the relevant topics related to the impending explosion of the gig economy, like labor practices and policies, and taxation.

Aside from that, freelancers need to band together for proper representation in the relevant forums. No one can better defend their rights and promote their welfare than the leaders or representatives from their own ranks.

Considering that America, for instance, started way earlier but still contends with a lot of holes and gray areas in regulation and legislation, the Philippines apparently has a lot of catching up to do in terms of clarifying issues and regulatory guidelines.

Otherwise, it will definitely lead to a lot of confusion, breaches, disputes and diminished workers’ rights.

survival, leading to the spread of diseases and further deaths.

Such effects are accentuated where there is protracted use of explosive weapons in populated areas over a prolonged period of time.

Ultimately, those who survive may have no choice but to leave, increasing the number of displaced people. Although the use of explosive weapons in populated areas is not expressly regulated by IHL, any such use must in all circumstances comply with IHL rules regulating the conduct of hostilities—in particular the prohibition of direct attacks on civilians or civilian objects, the prohibition of indiscriminate and disproportionate attacks and the obligation to take all feasible precautions in attack.

Indiscriminate attacks are those that strike military objectives and civilians or civilian objects without distinction, notably because they employ a weapon that cannot be directed at a specific military objective or the effects of that cannot be limited as required by IHL. Disproportionate attacks are those that may be expected to cause incidental loss of civilian life, injury to civilians, damage to civilian objects or a combination thereof, which would be excessive in relation to the concrete and direct military advantage anticipated.

Evidence arising from the recent use of explosive weapons in populated areas raises serious questions regarding how those using such weapons are interpreting and applying IHL rules. Given the foreseeable effects of explosive See “Kapunan,” A11

www.businessmirror.com.ph

Opinion

Numbers that count

The gross vs net debate

BusinessMirror

By Alberto Agra

Joel L. Tan-Torres

PPP Lead

DEBIT CREDIT

S

tarting on Tuesday, July 10, a total of 2,842 new Certified Public Accountants (CPAs) will be taking their oath as professionals at the Philippine International Convention Center, and thereafter, in other venues.

These CPAs come from a batch of 9,830 examinees in the May 2018 Licensure board examinations, which translates to a 28.9-percent passing rate. These passers came from 466 schools throughout the country, which I believe, makes the Philippines the country with the largest number of accounting schools in Asia. Since the time I assumed the chairmanship of the Professional Regulatory Board of Accountancy in 2014, the BOA has been giving examinations to an average of about 21,000 examinees annually. The average passing percentage during this period was about 34 percent.

Annually, an average of about 7,250 new CPAs join the profession to service the needs of the local and global communities.

This batch taking its oath in the next few days is the first group of CPA exam passers in 2018, the year that the BOA is celebrating the Philippine accountancy profession’s 95th year anniversary. In 1923 accounting was legally recognized as a profession in the country when the sixth Philippine Legislature approved Act 3105 on March 17, 1923. To commemorate this grand event, President Duterte issued Proclamation 464 declaring the period of March 17, 2018 to March 16, 2019 as the Year for the Celebration of the 95th year anniversary of the BOA. From my research, it appears that the Philippines has the “oldest” accountancy profession in Asia.

Compared to the other “oldies” in the region, Japan Accountancy is celebrating its 75th anniversary this year, while CPA India is 74 years old. The Philippines also may

Kapunan. . .

continued from A10

weapons, an attacking party’s ability to comply with IHL insofar as populated areas are concerned depends on its choice of means and methods of warfare. It must respect IHL in all circumstances, even if alternative, more discriminate weapons are used. Urban warfare, in which military objectives are intermingled with civilians and civilian objects, presents many challenges for armed forces. Too often, an enemy will deliberately shield its military activities in populated areas, thus endangering the civilian population.

However, such unlawful behavior does not relieve the military com-

have one of the largest number of qualified professional accountants among Asian countries. To date, per records of the Professional Regulation Commission, there are 188,203 CPAs in the roster of the BOA. This is a very significant jump in number since I passed the board examination in 1979 as the 39,500th (more or less) CPA. Among Filipino students, there is great interest in accountancy as a profession. Statistics from the Commission on Higher Education show that from 2015 to 2017, there were about 160,622 enrollees in Bachelor of Science in Accountancy in 572 schools registered with the CHED. For the same period, only 23,225 students (about 14 percent of the enrollees) graduated. The number of enrollees and graduates of the accountancy program is expected to increase over the next few years with the introduction by the CHED and BOA of various reforms in the education system, resulting in the issuance of CHED Memorandum Orders 27 to 30 in 2017.

Clearly, these numbers show the rosy state and the bright future of the accountancy profession in the Philippines.

Joel L. Tan-Torres is the chairman of the Professional Regulatory Board of Accountancy. A Certified Public Accountant who placed No. 1 in the May 1979 CPA Board Examinations, he was the former commissioner of the Bureau of Internal Revenue from 2009 to 2010.

This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed to boa.secretariat.@gmail.com.

manders from their responsibility to minimize the incidental effects on civilians of an attack. Such a responsibility is heightened in densely populated areas and may require the use of alternative weapons and/ or tactics.

The ICRC is calling on parties to armed conflicts, the Philippine government included, to avoid using explosive weapons that have a wide impact area in densely populated areas due to the significant likelihood of indiscriminate effects.

Our brothers in Marawi are now suffering from these indiscriminate effects. As the fighting between our government forces and nonstate armed groups continues in the South, the call of ICRC is timely and urgent!

Continued from A1

D

efinition of Terms. “Gross revenue” is defined as the total receipts from sales or services rendered, while “gross profit” is total sales less discounts (i.e., net sales) less cost of goods sold. “Net income,” on the other hand, is equal to the net earnings or profit calculated as sales less cost of goods sold, general and administrative expenses, operating expenses, depreciation, interest, taxes and other expenses.

Differentiation based on Income Statement. Depending on what is deducted (or added back), gross and net can mean different things or levels. Gross revenue less cost of goods sold is gross profit. If general and administrative expenses and operating expenses are deducted, then this becomes “earnings before interest

and taxes” (Ebit). If depreciation and amortization are considered, then this is called “earnings before interest, taxes, depreciation and amortization” (Ebitda). Taking out interest expense, then this is net profit before taxes, and after deducting income taxes, net profit results.

Perspectives. It may be surmised

Bloomberg Opinion

D

onald J. Trump is trying to take on the single-most globalized industry—and China. But the world’s largest car market won’t budge.

Beijing reduced duties on autos on July 1, just before the imposition on Friday of US tariffs on $34 billion of Chinese goods. China’s carmakers, like its consumers, are the least vulnerable to external forces compared with counterparts elsewhere.

The tariffs with which Trump is intimidating the auto industry will, on the other hand, wipe out a swath of bottom lines, burn a hole in every American car buyer’s pocket and trigger widespread job losses.

Part of the explanation for this contrast is that China’s carmakers are much less globalized than the foreign brands that

scurried into their market. In 2017 the nation exported almost $70 billion of parts and $14 billion of cars.

Imports were more than $50 billion of vehicles and about $40 billion of parts. In the months leading up to the current chaos, Chinese two-way automotive trade with the rest of the world ticked up. The US imported more auto components from China than vehicles, but exported more cars to China. Some parts makers, seemingly vulnerable with a revenue exposure to the US of almost 50 percent, already have facilities in America and other countries.

The strength of China’s domestic market of more than 20 million units a year has been underpinned by a rough supply equilibrium. While sales have slowed to a still-healthy annualized pace of about 5 percent, and inventory has tended to build up, production is also beginning to cool. Over the last five years,

that the public sector in a JV would prefer a share that is based on any of the gross—gross revenue; while the private sector proponent-co-venturer would prefer any of the net—net profit, over Ebitda, over Ebit.

Why gross for government?

There are many reasons cum benefits why the public-JV partner would want to derive its share from gross revenues or profit. First, it’s a matter of getting more. If based on the “topline,” the public agency is assured of a positive or bigger share since deductions will not be imputed. If it’s based on net, then it might be possible that government will not get anything due to the expenses and deductions. Second reason, which is related to the first, is ease of computation. There are only two multipliers needed to determine gross revenues and there are no addends and subtrahends. You only need two figures, i.e., the amount/value and the volume/quantity.

Third, by always being entitled to a positive share, the public sector

Why I give my ATM to others Siegfred Bueno Mison, Esq.

THE PATRIOT

S

ervice above self has been the motto of the Rotary Club since it was founded in 1905. Worldwide, its 1.2 million members in more than 34,000 clubs have vowed to render service in their chosen communities. I was part of Rotary before, but only for two years. I think those who wish to join service organizations need to answer the usual questions (5Ws and H) before they decide to serve.

As to the question of “who?” to serve, there are many potential beneficiaries—those underprivileged sectors, such as the out-of-school youth or the victims of substance abuse, to name a few. As to the questions “where?” and “how?”, there are many venues where we can serve.

One can serve by participating in Church activities, in nongovernment organization-initiated fund raising campaigns, or in a volunteer group like the Rotary Club. There are many mediums and ways where we can channel whatever resources we have, some even with tax deduction incentives for corporations. As to “when?”, one should ponder at what age or how often should he serve.

Is weekly tithing in church on Sundays enough? However, for me, the answers to the questions “what?” and “why?” will most likely affect a person’s ability to serve better, give more and make serving others a lifetime habit.

Marc Yu is a budding businessman in Cebu. He recently took over the leadership of the Rotary Club of Mandaue City. In his inaugural speech, what struck me the most

was how Marc implored the power of God to be able to meet the expectations of his members and serve the needs of his community. The keynote speaker during Marc Yu’s induction ceremonies addressed the “what?” and the “why?” in serving, especially in entities like the Rotary. As to the “what?”, the speaker told the audience to simply give their ATM— Attitude, Time, Money.

Being in any service organization, the Rotary Club in particular, harmony within is essential since most members come from different families, industries and walks of life.

Friction is expected and misunderstandings will come along the way.

Hence, what a good servant Rotarian leader needs is the right attitude.

And I think Marc has the positive attitude to get things done, united in fellowship with his members, for the sake of the community the club vows to serve. I have seen Marc play golf, a game that exposes the minutest traits in every person. Marc has an optimistic attitude to the point that every time he hits a bad shot or when his ball lands in the hazard, he tells himself “bawi tayo next hole.” If

Mind China’s strong home front in the car wars

By Anjani Trivedi

Monday, July 9, 2018 A11

monthly output and inventory have been negatively correlated. That helped global automakers reap the benefits of fat profit margins in China, despite operational constraints.

That stability now looks like it could act as a buffer if pricing pressures increase. When China cut auto tariffs, many manufacturers, domestic and foreign, announced reductions in suggested retail prices of 6 percent to 7 percent. That was despite virtually no change in forecourt prices. (In fact, prices of some premium brands have fallen faster than those of domestic models.)

To be sure, severe pricing pressures have hit China in the past. Supply fears and slowing sales in 2014 and 2015 put carmakers on edge, with several announcing discounts.

China’s industrial policy for cars buttressed the industry against domestic tariffs and potentially higher US levies. Since China said

China’s industrial policy for cars buttressed the industry against domestic tariffs and potentially higher US levies. Since China said it would relax foreign-ownership limits, it also limited approvals of licenses for cars that burn fossil fuels, and blocked companies from buying up nonoperating assets. That means new entrants don’t have it as easy as before, and gives foreign companies an incentive to operate in partnership with local automakers.

Meanwhile, Beijing is luring investment across the auto sector. it would relax foreign-ownership limits, it also limited approvals of licenses for cars that burn fossil fuels, and blocked companies from buying up nonoperating assets. That means new entrants don’t have it as easy as

will always be at a revenue advantage. Therefore, when hailed to the Ombudsman, the public officials can defend their action by saying that they entered into a grossly and manifestly advantageous contract, especially if the government agency will get a much higher share than what it contributes into the JV. Fourth, since there are no deductions and expenses, which must be taken into account like operations and capital expenditures, there are fewer instances of adverse findings or disallowances by the Commission on Audit. The COA need not scrutinize the expenses because the public partner will get its rightful share regardless. Fifth, if topline-based, the instances of debate and conflict between the JV partners concerning the necessity and prudency of expenditures would be minimized.

Assuming the public sector pushes for gross and the private sector net, the debate can be heard, discussed and hopefully, resolved in bid conferences or negotiations in competitive challenges.

his game is bad, he says, “bawi tayo next game.”

Our time on earth is finite. When it comes to money, whenever it is spent, it can still be recovered. But when it comes to time, once it passes, you cannot get it back. In the case of Marc, I admire how he decided to allot a portion of his finite time to lead his Rotary Club despite the challenges that come with a young father.

I was once a Rotarian but gave up due to time constraints. What I admire about Rotarians is the fact that they continue to contribute their time to the club and to the communities they vowed to serve despite their busy schedules.

Although he’s one of the youngest members of the club, Marc, I think, was blessed to have enough money to lead. It is a fact that Rotary presidents will likely put in financial resources more than the others. Marc may not have as much money as the taipans in this country, but the fact that he has decided to share whatever he can is quite commendable. Money, hard earned yet well spent, can go a long way in terms of making people happy, including yourself.

So as to the question of what we can do to serve, remember the ATM. We serve others by spending our time and money with the right attitude.

Now, as to the why, the speaker said that some choose to give for legacy purposes while some give with the belief that what goes around comes around. For some, serving can lead to a legacy that can be inscribed in one’s tombstone to the point that people will remember him as Mr. Generous!

For some, they say that the more you give, the more you receive. So they give in anticipation that they will receive something in return. After all, the Bible tells us in Deuteronomy 15:10: “Give generously to Him and

For questions and comments, please e-mail me at sbmison@gmail.com.

before, and gives foreign companies an incentive to operate in partnership with local automakers. Meanwhile, Beijing is luring investment across the auto sector.

And don’t forget Chinese consumers. They’re still spending, and they place more importance on brands than on prices. The likes of Brilliance BMW and Beijing Benz are posting double-digit sales growth—54 percent and 20 percent, respectively, year-on-year in the first three weeks of June. The Daimler AG and Bayerische Motoren Werke AG ventures were helped by new entry-level models for younger buyers, and a recent reduction in a purchasing incentive did nothing to dent demand. In contrast, sales by the local ventures of Ford Motor Co. and General Motors Co. fell about 60 percent and 30 percent, respectively, in the year to date compared with the same 2017 period.

Carmakers in China churn out almost 400 models, roughly double the number on offer in the US and Europe, and the split between SU Vs and sedans has started to even out: The latter now account for about 48 percent of the passenger-vehicle market. Buyers are calling the shots, and the carmakers are listening.

Yet Chinese automakers’ stocks are plunging: down 25 percent to 30 percent on average this year, and 47 percent in the worst case. The broad market, burdened by trade conflict and domestic funding worries, has fallen a more modest 20 percent or so.

And global auto peers have declined 15 percent or less.

The irony of all this is that while Trump’s tariff assault may have hurt the market value of China’s automakers, it’s unlikely to put much of a dent in their products—that fate awaits the US.

do so without a grudging heart; then because of this the Lord your God will bless you in all your work and in everything you put your hand to.”

When asked why she shares her blessings to others, a wealthy businesswoman-friend told me that giving is more about self-fulfillment.

Serving others or sharing her blessings is food for her soul. In her words, “I’m not helping them, they are helping me.” Every time she gives, she experiences a unique feeling that uplifts her spirit. “It makes me happy to see others happy,” she said. The elation is much greater than how she felt when she delivered a healthy set of twins a few years ago and much greater than how she felt when she saw her son graduate in a prestigious school with honors.

In the Bible, 2 Corinthians 9:11 tells us, “You will be enriched in every way so that you can be generous on every occasion, and through us your generosity will result in thanksgiving to God.” Our decision to serve should be based on good reasons. Whether serving is required by law, as in government service, or encouraged by Scripture, we all have to consciously exert efforts to know the why in giving our ATM. For me, I give to others because it is actually my way of helping myself realize how fortunate I am to have something to give to others. Giving reminds me of how much I am loved

by God. It is my way of thanking Him. But most important, giving makes my heart happy, perhaps in the same way my friend feels every time she gives.

Let’s all be happy by making others happy. Let’s serve others by giving our ATM.

2nd Front Page BusinessMirror

A12 Monday, July 9, 2018

www.businessmirror.com.ph

Dalian must pay for fixing 48 MRT cars: DOTr

By Lorenz S. Marasigan

@lorenzmarasigan

W

HILE refusing to release the full audit report for the Metro Rail Transit (MRT) Line 3, Transportation Secretary Arthur P. Tugade insisted that the “technical adjustments” for the 48 train cars delivered by CRRC Dalian Co. of China should be shouldered by the supplier. previously cited by experts. “ The technical adjustments that should be done pertain to the noncompliance [with] the terms of reference, which cover certain incompatibility issues, such as the weight, and certain measurements relative to the technical specifications of the trains as mentioned in the releases we sent,” she said.

Despite raising the issue, the transportation department continued to refuse to release the full report to the public.

Transportation Director Goddes Hope O. Libiran explained that the Department of Transportation (DOTr) refusal stems from its intention to allow government-togovernment arrangements to commence first so as not to “preempt high-level discussions.”

Tugade said “details on how CRRC Dalian will make the adjustments identified in the TUV Rheinland independent audit [are] targeted to be finalized before a highlevel government-to-government meeting between the Philippines and China [on] August 20.”

The government tapped TUV Rheinland to conduct a thorough review of the trains procured from Dalian, as issues ranging from

On Sunday Tugade issued a general statement calling on Dalian to pay for the technical adjustments for the light rail vehicles that it delivered to the government, citing an independent audit report released

by TUV Rheinland.

“The audit report shows that the trains delivered to us fall short based on standards. In relation to the details of the terms of reference, upon which the bid was awarded, there are variations on measurements and weight,” he said.

Tugade explained that, based on the audit report, the Dalian trains can still be used if the adjustments identified in the audit are addressed.

“If you thoroughly review the evaluation, it somehow says that, with the right fix, we can still use the trains without sacrificing the safety, security and life of the passengers of the system,” he said.

He said the work needed to be done on the Dalian trains may be characterized as “manageable.”

“We want Dalian to absorb the costs of fixing the trains,” Tugade said.

Aly V. Narvaez, a spokesmanfor the MRT 3, said the adjustments involve incompatibility issues

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JULY 9, 2018 SOUTHWEST MONSOON AFFECTING THE WESTERN SECTION OF LUZON AND VISAYAS as of 4:00 am - July 8, 2018

“If you thoroughly review the evaluation, it somehow says that, with the right fix, we can still use the trains without sacrificing the safety, security, and life of the passengers of the system.” ­—Tugade

weight to safety arose before, during, and after their complete delivery in February last year.

To recall, the the Aquino administration jump-started the acquisition of 48 new train cars for the Edsa line. It faced several years of delay due to a legal tussle with the owner of the train facility, MRT Corp.’s parent company, MRT Holdings Inc. Despite having received the first set of trains in early-2016, the deployment of the new coaches was deferred because all 48 light-rail vehicles had to be “optimized and tested.”

Onboard signaling was amiss from the train, and was only procured midway through the construction of the 48 train units.

The onboard signaling system was only installed on the trains in November 2016. The initial batch of trains should have been deployed in March of the same year, based on original targets.

Due to these problems, the DOTr wanted to deploy the 48 trains in March 2017, but failed to do so after groups raised issues on the train’s weight.

The whole expansion project, amounting to P3.8 billion, will increase the capacity of the line to 880,000 daily passengers, or 66 percent more than the current capacity of 350,000 commuters per day.

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GOOD JOB! Revenue District Officer Rufo Ranario (fourth from right) and his team from the Revenue District Office in Pasig City (RDO Pasig) show the awards they have garnered for good performance. From left, Michelle de la Torre, Irma Bernardo, Patricia Ranchez, Karla Verlas, Nenita Crespo, Corazon de Jesus, RDO Pasig chief Ranario, Edgardo Uy, Melecio Cantara and Zaldy Dy are seen during a press briefing at the Bureau of Internal Revenue office on Shaw Boulevard, Pasig City. RUDY ESPERAS

Solons: Move fast to stop ‘runaway’ TRAIN

By Jovee Marie N. dela Cruz

A

@joveemarie

S inflation hit a five-year high at 5.2 percent in June, certain lawmakers said the Duterte administration now appears to be losing control of the country’s economic fundamentals as a result of underestimating the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) law and how external factors could aggravate this.

However, the chairman of the House Committee on Economic Affairs said Congress should do its part to help mitigate the impact of the first package under the comprehensive tax-reform law by passing measures, such as the proposed Rice Tariffication Act and increasing the conditional cash transfer (CCT).

Given the continuous price hikes, Magdalo Rep. Gary C. Alejano underscored the urgency of reviewing the TRAIN law, which took effect on January 1.

Currently, several bills and resolutions are pending in Congress for the review or repeal of the TRAIN law.

“The economic managers of Duterte predicted everything will slow down last June, but the inflation still rose to a five-year high of 5.2 percent in June from 4.6 percent the month before. It is either they have lost the economic acumen or they are in perpetual denial of the havoc brought by TRAIN,” Alejano asserted.

The Philippine Statistics Authority (PSA) said the last time the inflation rate was at 5.2 percent was in October 2011.

“I am urging my colleagues in Congress to act on measures reviewing the impact of the TRAIN law, particularly on the poor,” Alejano said.

Alejano also chided the government for continuously saying that everything is still under control and will normalize in succeeding months. “The only way to restore control is to roll out quick mitigating measures like suspending the TRAIN or implementing socialprotection programs that are still up in the clouds,” he said.

‘Could be more severe’

For his part, Albay Rep. Edcel C. Lagman said while the 5.2-percent inflation rate in June is alarming enough, it is still an understatement of the severity of the Philippine inflation.

“Duterte’s economic managers must not refuse to study a rigorous quantification of the effects of the TRAIN law, rather than nonchalantly pointing to other factors like global oil prices and peso depreciation, including the purported buying propensity of Filipinos, as culprits.” —Lagman

Lagman, citing PSA, said of the consumer goods and services included in the consumer measure, the most essential items of food and nonalcoholic beverages registered an even higher inflation rate of 6.1 percent.

In Lagman’s view, the TRAIN “cannot be blameless for the current inflation problem because its imposition of higher excise taxes on petroleum products, among others, has cascaded into the shallow pockets of ordinary Filipinos who are now confronted with higher costs of fuel, transport, electricity and commodities and services due to increased production cost.”

“Duterte’s economic managers must not refuse to study a rigorous quantification of the effects of the TRAIN law, rather than nonchalantly pointing to other factors like global oil prices and peso depreciation, including the purported buying propensity of Filipinos, as culprits,” Lagman added.

The Bangko Sental ng Pilipinas’s (BSP) plan to again increase interest rates may constrict investments and subsequently depress employment, even as consumers will have to earn more to buy the same quantity of goods and services, he said.

Earlier, House Committee on Ways and Means Chairman Dakila Carlo E. Cua of Quirino said the government is set to roll out the Pantawid Pasada Program that will provide public-utility jeepney franchise holders with discounts in their purchase of fuel this month.

Pantawid Pasada is a mitigating measure under the new tax-reform law to ease the impact of oil excisetax increases on commuters and the land-transport sector.

Besides the Pantawid Pasada, the TRAIN also provides for additional unconditional cash transfers to low-income earners amounting to P2,400 for 2018; and P3,600 for 2019 and 2020. The cash grants are already being implemented by the DSWD.

Republic Act (RA) 10963, or TRAIN law, also provides publicutility vechicle fare discount of 10 percent, discounted National Food Authoirty (NFA) rice purchases of up to 20 kilos per month, and free skills training by the Technical Education and Skills Development Authority.

Solutions

Meanwhile, House Committee on Economic Affairs Chairman Arthur C. Yap of Bohol said Congress should now enact measures addressing the impact of the TRAIN law.

Yap, a former agriculture secretary, wants Congress to pass the Rice Tariffication Act and the measures increasing the CCT. “Our people need the breathing spell to contend with the high prices of rice brought about by the lack of NFA buffer stocks and the weak peso. The NFA needs the assistance of the private sector through private importations to stabilize rice prices. Anyway, we have entered the lean months, and there are no more domestic harvests to protect,” he added.

“Cash transfers must also be increased to vulnerable sectors, and if releases will be conditional, then they must be conditioned on skills training for beneficiaries in the manufacturing and construction sectors, which are fundamentally expanding,” Yap said.

Anac-IP Rep. Jose T. Panganiban Jr., chairman of the House Committee on Food and Agriculture, said members of his committee will sponsor the measure amending RA 8178, or the Agricultural Tariffication Act when session resumes this month. Amending RA 8178 is needed to scrap the quantitative restriction and convert it into tariffs. On the CCT, there are bills filed in the Senate and House of Representatives increasing conditional grants.

Increase rates–Yap

Besides the passage of needed measures, Yap said the BSP must also act now decisively, off cycle, to increase rates to stabilize the situation.

“The increase in rates will mop up the market’s excess liquidity that may possibly rein in runaway prices and stave off further weakening of the peso,” he added.

Also, Yap said the “Build, Build, Build” program must continue focused and unabated to balance possible impacts to growth should the private sector delay their investments due to the BSP rate hikes.