Businessmirror july 26, 2016 by BusinessMirror

AP PHOTO media partner of the year

BusinessMirror

United nations

2015 environmental Media Award leadership award 2008

A broader look at today’s business

www.businessmirror.com.ph

Tuesday, July 26, 2016 Vol. 11 No. 290

Duterte vows to do better in boosting PHL growth

We will initiate tax reforms he government will maintain toward a simpler current fiscal and monetary and more equitable policies, increase infrastructure tax system. We will spending, create more jobs and cut lower personal and income taxes to boost economic growth corporate income in the next six years, President Duterte tax and relax the said in his first State of the Nation Address bank-secrecy law.”— (Sona) on Monday. See “Duterte,” A2 President Duterte

INSIDE

tips for totally on-trend gender neutral rooms

By David Cagahastian

@davecaga

BMReports

P25.00 nationwide | 4 sections 28 pages | 7 days a week

BUSINESSMEN, ANALYSTS LAUD DUTERTE’S SONA

By Cai U. Ordinario

@cuo_bm

he first State of the Nation Address (Sona) of President Duterte may have been peppered with ad libs and jokes, but this did not turn off businessmen and economists. On the contrary, they said they were “impressed” by the President’s plans to grow the economy in the next six years by providing a “more stable” environment where businesses can thrive. “What really caught my attention was his emphasis on the pursuit of anything that will improve our lives within the bounds of the law. I think that impressed me the most,” University of Asia and the Pacific (UA&P) economist Cid Terosa said. Continued on A3

What I found lacking in the previous administration— the emphasis on the rule of law in the pursuit of economic prosperity—was strongly stressed this time.”—Terosa

Congress leaders bare PHL’s ‘archaic’ trade laws up for review top legislative agenda

17TH CONGRESS OPENS By Jovee Marie N. dela Cruz @joveemarie

Life

& Catherine N. Pillas

chris froome!

Sports

Second of three parts

art of President Duterte’s agenda is to position the Philippines as an attractive destination for foreign investments. In his first State of the Nation Address (Sona) on Monday, the President vowed to cut red tape and put in place measures to encourage more businessmen to set up shop in the Philippines. To help the Duterte administration, some members of the 17th Congress vowed to push for a review of laws that make it more difficult to do business in the country. A major priority for lawmakers is the amendment of the economic provisions of the 1987 Constitution. For businessmen, identifying unresponsive trade laws is a nobrainer—ask the question and they can give you a litany of these laws that need to be amended. Sergio Ortiz-Luis, president of

PESO exchange rates n US 47.0960

@butchfBM

fter their impressive victories, President Duterte’s bets to lead the House of Representatives and the Senate bared the legislative agenda of the Duterte administration and the 17th Congress “to effect meaningful and genuine change.” In his first speech at the House of Representatives, newly elected Speaker Pantaleon D. Alvarez said both the House of Representatives and Senate should give Mr. Duterte their full support through the immediate passage of the President’s priority bills. “We must give the President the necessary legislations, his tools to effect meaningful and genuine change. In sum, we, too, must be instruments of change,” Alvarez said. “Our mission in this 17th Congress is clear: to enact laws that will deliver to our nation and our people a future better than yesterday and brighter than today,” he said.

@c_pillas29

& Butch Fernandez

Tax reform, mining

He also wants the implementing rules and regulations of the Magna Carta for Micro, Small and Medium Enterprises (MSMEs) revised “to strengthen the spirit of the law.”

Alvarez said the 17th Congress will prioritize the passage of tax-reform measures. “The law on income taxation should be simplified into one imposed on gross income progressively. Tax laws have become so complicated that they are exploited by corrupt BIR [Bureau of Internal Revenue] officials to extort money from taxpayers,” he said. “Ordinary individuals, for their part, choose not to pay taxes precisely because they do not understand tax laws. A simplified law on taxation would encourage people to pay taxes and contribute to a society that they know will take care of them,” he added. As for mining, Alvarez said Congress would like to see mining companies securing a legislative franchise before they are allowed to operate.

Continued on A2

See “Legislative agenda,” A12

A worker pulling a cartload of goods passes by a pile of container vans at the Manila North Harbor. Recent reports claim the Philippine Chamber of Commerce and Industry has proposed short- and longterm solutions addressing perennial congestion at the Port of Manila. NONIE REYES

the Philippine Exporters Confederation Inc., said amending the charter of the Bangko Sentral ng Pilipinas to underscore its mandate in fostering competitive exchange rate is on top of the list.

n japan 0.4438 n UK 61.9454 n HK 6.0712 n CHINA 7.0503 n singapore 34.6626 n australia 35.1195 n EU 51.7067 n SAUDI arabia 12.5576

Source: BSP (25 July 2016 )

BMReports BusinessMirror

A2 Tuesday, July 26, 2016

www.businessmirror.com.ph

17TH CONGRESS OPENS

PHL’s ‘archaic’ trade laws up for review Continued from A1

The trade group lamented that the weak penalties against lending institutions that do not comply with the mandatory credit allocation for MSMEs are undermining the competitiveness of micro businesses. Under the Magna Carta, these institutions should set aside at least 8 percent of their total loan portfolio for micro and small enterprises and at least 2 percent for medium-sized firms, based on their balance sheet at the end of every quarter. Management Association of the Philippines President Perry Pe said

Duterte. . .

Continued from A1

“We will continue macroeconomic policies and even do better. We will achieve it through prudent fiscal and monetary policies, which will translate to high growth, job creation and poverty reduction. I hope to hand over an economy characterized by solid growth, stable inflation, more dollar reserves and a robust fiscal position,” Mr. Duterte said. At the first meeting of the Development Budget Coordinating Committee (DBCC) earlier this month, the GDP growth targets for 2016 is at a range of 6 percent to 7 percent, which will go up to a range of 6.5 percent to 7.5 percent in 2017, then finally to a range of 7 percent to 8 percent for 2018 to 2022. The fiscal and debt management of the previous Aquino administration will be maintained, one of the main features of which is the dependence on domestic sources of funding, as opposed to foreign sources to save on foreignexchange costs. The Duterte administration intends to have a debt mix of 80 percent from domestic creditors and 20 percent from foreign creditors.

Infrastructure spending

The Duterte administration will spend more on infrastructure at a rate of more than 5 percent of GDP, and will prevent underspending by the government, due to the lack of

the group is asking Congress to prioritize the lifting of the economic restrictions in the Constitution. “For as long as the restrictions are there, there’s not much you can do trying to amend the various law. So the key is to cut the root and the root is amending the constitutional restrictions,” Pe said. The country’s procurement law, he added, should be amended, and this is one low-hanging fruit that can be done easily “so that business can be eased.” Federation of Philippine Industries Chairman Jesus Arranza said there should be less restrictions on the establishment of coal-fired power plants. He also wants more incen-

tives for manufacturing plants. More important, Arranza said the lawmakers should seriously consider splitting the Department of Trade and Industry (DTI) into two agencies: Department of Trade and Department of Industries. By having a dedicated agency for industries, “full attention and focus on industrialization can be attained,” Arranza said. Rep. Feliciano Belmonte Jr. of the Fourth District of Quezon City has refiled amending the economic provisions of the Constitution or the economic Charter change (Cha-cha). Belmonte wants to amend the 60-40 rule that limits foreign ownership of

certain activities in the country. Liberal Party Rep. Romero Quimbo of Marikina City agrees with Belmonte, saying there is a need to relax foreign-ownership restrictions in the 1987 Constitution. “While I absolutely agree to review the Omnibus Investments Code, the other better thing to do is to amend the economic provisions of the Constitution that restrict ownership of foreign investors because the Omnibus Investments Code will not be able to address this comprehensively,” Quimbo said. Belmonte had assured local and foreign businessmen in the country that he will push for the

passage of his economic Cha-cha in the 17th Congress. Aside from the economic Chacha, Quimbo said lawmakers are keen on reviewing the Omnibus Investments Code of 1987 to ensure that its provisions are attuned to the needs of investors. Liberal Party Rep. Winston Castelo of Quezon City and Party-list Rep. Rodel Batocabe of Ako Bicol have asked the DTI to submit to Congress the list of their proposed trade laws, as well as “unresponsive laws” that need to be updated. “It should not only be about updating our trade laws but we have to harmonize, streamline and codify our trade laws not only

absorptive capacity or inefficient project implementation. Budget Secretary Benjamin E. Diokno announced that for 2017, the budget proposal of the Duterte administration will include infrastructure spending of at least P890 billion. Mr. Duterte identified the infrastructure projects planned by his administration during the next six years. “We will accelerate infrastructure spending. We will create the Mindanao Logistics Infrastructure Network and other road network master plans, interisland linkage projects, structural mitigation to address flooding in Metro Manila,” Mr. Duterte said. He said the government will also work to increase the country’s road network and use the resulting bigger road network to promote more tourist areas throughout the country.

Traffic congestion

As a consequence of higher infrastructure spending, Mr. Duterte said the government would also be able to solve traffic congestion in Metro Manila. He said the government is looking to increase the number of trains and increase the train speeds of the existing railway systems in Metro Manila and rehabilitate these railway systems to allow for the operation of more trains at higher speeds. President Duterte said the procurement of these additional trains will be addressed at the soonest, for which he appealed to be given

to enhance the ease of doing business in the Philippine but also to increase our competitiveness and productivity,” Batocabe said. “The DTI should now start this initiative and submit to us the proposed code of trade and commerce for our consideration and eventual commitment,” he added. Castelo admitted that there are many outdated trade laws that need to be reviewed. “With trade globalization and removal of economic barriers between countries, it is high time we revisit existing laws to be attuned to the times and make business more competitive here and overseas,” Castelo said. To be concluded

Regina Paz L. Lopez to review all mining permits and, if necessary, amend or revoke these permits. He said the military will be tapped to prevent the proliferation of illegal mining operations. “There is already a law allowing mining, but they should follow the law. They should follow the government standards and pay the correct taxes,” he said. He said the illegal occupation of influential people over large tracts of land and water resources at the Laguna Lake should also be checked, as fishermen in the area are now only left with a very little area to make a living.

Federal system

Filipino activist and director Mae Paner asks for a kiss from one of the policemen blocking the road as she joins a rally with thousands of other activists and supporters of President Duterte near the gates of the House of Representatives in Quezon City on Monday. Mr. Duterte delivered his first State of the Nation Address on Monday. AP

emergency powers to be able to purchase the trains right away. However, for immediate relief from the traffic congestion in Metro Manila, he said the revival of the Pasig River ferry system is a “very viable” option to provide an alternative for commuters to travel around Metro Manila. To ease traffic congestion at the airports, Mr. Duterte said he wants to develop the Clark International Airport to handle some local and in-

ternational flights, but a bullet-train system from Manila to Clark should be installed first to ferry passengers.

Tax reforms

To further stimulate the economy, Mr. Duterte said the government will lower individual and corporate income-tax rates. “We will initiate tax reforms towards a simpler and more equitable tax system. We will lower personal and corporate income tax

and relax the bank-secrecy law. There must be sufficient income for all Filipinos,” he said. We shall continue inviting more investments to create more jobs and will undertake reforms to ensure competitiveness. Measures to promote ease of doing business shall be mandatory,” President Duterte added. The Tax Management Association of the Philippines (TMAP) has welcomed this declaration from the President in recognition of his earlier promise to make the tax brackets more equitable and reflective of the inflation that has set in since the last amendment in 1997. However, the TMAP cautioned against increasing the value-added tax (VAT) rates as a means to recover the expected foregone revenues in the lowering of income taxes, which was also a campaign promise of Mr. Duterte. President Duterte did not mention a possible increase in the VAT rates, as pushed by some members of his economic team and only endorsed the lifting of the banksecrecy law as a means for the Bureau of Internal Revenue (BIR) to increase its tax collection by looking into the hidden assets and income of suspected tax evaders.

Environmental concerns

President Duterte said the government will also prioritize efforts to mitigate the effects of climate change, but reiterated that restrictions on the use of energ y sources should not stymie the industrialization of the Philippines. He was referring to the Paris Agreement on Climate Change in 2015, which advocates the use of green energy. However, Mr. Duterte said he would repudiate this if the restrictions on the use of energy sources, such as coal will prevent the economic development of the Philippines because of the high cost of “cleaner” sources of energy. As for mining, Mr. Duterte directed the Environment Secretary

Mr. Duterte urged Congress to fast-track the country’s shift to a federal system of government, which he suggested to be a parliamentary form of government but with a President who will be elected at large by the people, but will only have some ceremonial powers. To allay fears that a parliamentary form of government, would allow him to perpetuate himself in power, President Duterte said he would gladly step down even with two or three years left in his term if the shift to a federal system of government can be completed in three or four years. “About the federal system, my advice to you is to maintain a federal system, a parliament, but be sure to have a president. I can commit today that if you hurry up the federal system, and you can submit to the Filipino people by the fourth or fifth year, you call for a referendum and after that call for a presidential election. Then, I will go,” he said. “Copy the system in France, not the pure parliament, because it’s dangerous. It takes time to have something like that in England. You must have a president, just limit his powers. Then, even if there’s still two years or three years, I will go,” he said.

South China Sea

On the territorial dispute with China over parts of the South China Sea, Mr. Duterte said the Philippines will continue to honor the verdict in its favor in the arbitration case decided by the United Nations’ Permanent Court of Arbitration (PCA). “We strongly affirm and respect the outcome of the case before the PCA as an important contribution to the ongoing efforts to pursue a peaceful resolution and management of our disputes,” Mr. Duterte said. This is in apparent rejection of the suggestion of former President Fidel V. Ramos to set aside the PCA ruling as suggested by China when Manila initiates bilateral talks with Beijing over joint exploration and exploitation of natural resources in the disputed territorities. Ramos had already accepted Mr. Duterte’s offer for him to lead the backchannel negotiations with China on economic rights over the disputed areas in the South China Sea.

BMReports BusinessMirror

news@businessmirror.com.ph

Tuesday, July 26, 2016

Tough times ahead for ‘jobless’ miners By Jonathan L. Mayuga @jonlmayuga

orkers of mining companies whose permits have been suspended by the government face tough times ahead: Either they find another work elsewhere, or end up joining the country’s jobless lot.

Since assuming the top post of the Department of Environment and Nat ura l Resources (DENR), Environment Secretary Regina Paz L. Lopez had already suspended the operation of four nickel-mining companies—two in the province of Zambales and another pair in Palawan. As environment secretary, Lopez also ordered a mining audit of all large-scale mining operations in the country in accordance with the Philippine Mining Act of 1995, Executive Order 79 and DENR Administrative Order 2015-07 with a rating system that go beyond the usual technical audit criteria. Lopez wants the mining audit to include the environmental and social impact of mining as part of criteria to decide whether a mining company should stop or continue to operate, even as she vowed to stop mining operations that cause environmental damage and sufferings to people. The suspension would remain in force until such time that the mining companies have fully complied all conditions set by the DENR. Lopez, nevertheless, vowed to help miners who may end up losing their jobs because of her campaign.

‘No work, no pay’

Like in most companies, the “no work, no pay” policy applies in mining, industry sources said. When a company’s suspension order is in effect, a mining company’s operation, which is specifically extraction of mineral ores from the mines, stops and employees are subjected to go on a “forced leave,” which means they may still receive some salary for some time. “If the available leave of the workers are used up, then they would, eventually, have nothing on the pay check,” the source, who spoke on condition of anonymity, told the BusinessMirror. A suspension order, however, does not necessarily affect all mining employees. Some companies with deep pockets would absorb or reassign affected workers to other departments, such as administration department, maintenance and others to environmental or community relations units. Normally, only a skeletal force doing administrative works stay behind, while others let go of their workers until mining operation resumes. “It depends on the company. It also depends on the nature of the suspension order. If the order means stopping all mining activities, it will be a big problem,” the source added. Suspension of mining opera-

tions usually takes at least six months in case of a major offense or violation, because it would require time and a huge amount of money to comply with conditions, such as remediation measures in case of spill, repair of damaged facilities, such as tailings dam, or construction of a new one. In Zambales alone, Lopez’s campaign had already affected some 3,000 workers belonging to four different nickel-mining companies. These are the Zambales Diversified Metals Corp, Benguet Corp. Nickel Mines Inc., Eramen Minerals Inc. and LNL Archiepelago Minerals Inc.—all of which operate in Santa Cruz, Zambales. Nickel-mining companies in Zambales were told to comply six conditions for the lifting of the suspension order. These include addressing issues of tree-cutting or earth-balling practices; completion of mine haul road; rehabilitation of mined out areas; deposit of final mine-rehabilitation fund; compensate owners of affected fishponds, farmlands and water bodies; and repair of damaged portions of public roads because of their hauling operations. To recall, the DENR had suspended all four nickel-mining companies in Zambales in 2014 due to unsystematic mining or stripping methods. The Zambales Diversified and Benguet Corp., which managed to secure a temporary lifting order last year, were slapped with a preventive suspension order early this month on account of a writ of kalikasan issued by the Supreme Court, Executive Order 1 issued by the Provincial Government of Zambales and the numerous complaints aired by concerned residents of Santa Cruz, Zambales. In Palawan Lopez had ordered to suspend t he operat ion of Berong Nickel Mining Corp. and City Nickel Corp. also because of numerous complaints against their operation. There is no formal or official communication, yet, detailing the conditions for the lifting of the suspension order for Berong and City Nickel. All mining companies also face with corresponding fines depending on the gravity of the offense committed. Eventually, the suspension order would force affected workers from nickel mines in Zambales and Palawan to look for other jobs.

Catching ‘tulingan’

Aside from the nickel mines in Zambales and Palawan, Lopez last week had ordered to stop the hauling of nickel-ore stockpiles

of Hinatuan Mining Corp. (HMC) on Manicani Island in the town of Guiuan, Eastern Samar, rendering 495 of its workers jobless. HMC workers who would soon find themselves jobless are not as lucky. Lopez’s order specifically put to stop the hauling of nickel-ore stockpiles on the island. Unfortunately, those affected have nowhere else to go except to go back to farming or fishing—ways of life, which, for the longest time, failed to improve the lives of millions of Filipinos anywhere in the country. A subsidiar y of Nickel A sia Cor p., the countr y’s top pro ducer of nickel, said their hauling operation prov ide reg u lar income to 495 workers. Farmers and fishermen in the Philippines belong to the poorest of the poor sector. While there are a variety of fish that can be caught in the municipal waters of Guiuan, it is only during the months of March to May that fishermen can actually have bountiful harvest. Beyond the three-month window, fishing is almost impossible because of the strong wind and ocean current on top of the fact that there are few fish to catch, except tulingan, or tuna, which sell from P60 to P90 a kilo. With the diminishing fish

“What I found lacking in the previous administration—the emphasis on the rule of law in the pursuit of economic prosperity—was strongly stressed this time,” Terosa added. Ateneo Eagle Watch Senior Fellow Alvin P. Ang commended the efforts of the Duterte administration to achieve lasting peace in the country. Ang said t h e u n i l a t e r a l c e a s e - f i re w i t h t h e Communist Party of the Philippines-New

People’s Army is one of the “best” parts of Duterte’s Sona. “The effort to achieve peace by declaring a unilateral cease-fire is the best part of the speech. Now, the Left will no longer have a reason not to go back to the negotiating table,” Ang said. The Makati Business Club (MBC) also welcomed the Duterte administration’s declaration of a unilateral cease-fire, to “correct historical injustices,” and its stance against criminality, drugs, and graft and corruption. “The declaration of a unilateral cease-

Better than fishing

Fishers of Manicani Island are among the lowest-income earners in the province despite the town having the largest marine protected area called Guiuan Protected Landscape and Seascape. Arcenio Arcesmo, chairman of Barangay San Jose, said HMC had provided jobs to fishermen hauling the stockpiles of nickel. This, he said, is a blessing to his constituents, because farming and fishing offer no hope of improving their lives. “If the DENR stops [nickel-ore] hauling on the island, many of our fellowmen would be rendered jobless. Our fishing ground is no

If the DENR stops [nickelore] hauling on the island, many of our fellowmen would be rendered jobless. Our fishing ground is no longer productive. Sometimes, fishermen go home with just a few kilos, enough to cover the cost of gasoline. In most cases, they go home empty-handed.”—Arcesmo

Businessmen, analysts laud Duterte’s sona Continued from A1

catch brought about by overfishing in the area, there is no way that small fishermen would be able to survive the day-to-day cost of living on the island. A fishing expedition could yield catch as much as 10 kilos a day, but these would have to be divided among four fishermen working as a group. Workers of HMC on Manicani whose task is to haul the stockpiles of nickel ore accumulated by the company a long time ago receive P12,000 a month, enough, they say, to send their children to college, while the company makes its final exit off the island.

fire and the call to correct historical injustices is a very bold move and sends a strong signal that the government is serious about ensuring permanent and lasting peace,” MBC Executive Director Peter V. Perfecto said. The MBC urged the Duterte administration to continue working with the private sector to improve the country’s business climate and to engage civil society and other cause-oriented groups. Mr. Duterte’s pronouncement that his government will develop Clark

International Airport and establish a bullet train system going there was welcomed by Management Association of the Philippines President Perry Pe. “[The President] connected. His point is loud and clear,” Pe said. As for his plan to continue the macroeconomic policies of the previous administration, Terosa said President Duterte’s team is aware that the country’s economy is doing well. The President’s pronouncement that he will cut income and corporate taxes and its implications for revenue collection also did not seem to bother economists, like Terosa and Ang. “With greater consumption, business and

longer productive. Sometimes, fishermen go home with just a few kilos, enough to cover the cost of gasoline. In most cases, they go home empty-handed,” said Arcesmo, a fishermen himself. Residents expect the company to rehabilitate the mined out area starting with the removal of the remaining nickel-ore stockpiles. Arcesmo said majority of the people in Barangay San Jose depend on the HMC’s hauling operation and would suffer the consequence of Lopez’s stop order without alternative job or liveliihood opportunity. “If they stop it [hauling], many of the workers would experience economic hardships. Fishing and farming are not profitable,” he said. Arcesmo said only a few are opposed to the hauling of the nickel-ore stockpi les for unknown reason. Most of those who oppose it, he added, are not even residents of Manicani who would suffer the consequence if the mountain of soil are swept away by f lood in the event of another Yolanda, referring to the supertyphoon that severely affected Guiuan. A total of 171 town and cities were by Yolanda, which left a path of death and destruction on November 8, 2013. “We don’t want that to happen again that’s why we want HMC to remove the stockpiles,” he said. Zacar ias Ba ldecanas, chairman of barangay Banaag, said t he people t hem se lves w a nt t he stoc k pi les of n ic ke l ore removed by HMC because of the danger it pose to the people. T hey sa id remov ing t he n ic k e l - ore s to c k p i le s w ou l d minimize the risks of disasters, such as f lood and mudslide in case of excessive rainfa l l. “We are afraid that if the hauling would stop and another typhoon hits us, people would again be at risk because of the stockpiles that would be left behind,” Baldecanas, also a fisherman said.

He said ever y time it rains, water runoff further causes damage to their coastal ecosystem. The discoloration of the coastal waters, he said, affects whatever is left of their mangrove and beach forests, and corals. Another pitfall on Lopez’s order to stop the hauling activities, they said, is the resurgence of destructive fishing activities, such as the use of dynamite and cyanide. The rampant use of dynamite and cyanide had caused the destruction of marine ecosystem in Guiuan, particularly on islands that are beyond the reach of law enforcers. “I am not saying all fishermen are into illegal fishing activities. But it happened before. With no job and income to support their families, they would not be able to send their children to school. This hardship would force them to go back to illegal fishing,” he said. Sought for comment, Lopez said those affected by the suspension orders would get help from the government. “We will get them involved in line rehabilitation and the greening of the area. We will talk to them and ask them what they want to do,” she said. “I am committed to their welfare. I have instructed my people to look after them,” Lopez added. As for the employees of HMC, Lopez vowed to stop the destructive fishing activities in the area. “There must be rule of law around Manicani. Manicani is a protected marine reserve and, actually, the whole area is protected. My commitment is for the people. My people already went there this week and would go back next [week] to bring trees and things for the people. They will be Ok. Kailangan tulungan,” she said. Lopez told the BusinessMirror that her visit and dialogue with communities in Palawan saddened her. “When I went to Palawan, my heart bled. Palawan should not be poor. They just need a little bit of help,” she said.

investment activities, more money can be raised by companies and individuals that may enable the government to pursue its plans. It can spur greater activity that can result to more revenues not necessarily coming from taxes,” Terosa said. “I’m sure there will be additional taxes to cover some of the losses due to the decrease in income tax and corporate income tax, but these two reforms are very strong indications that he wants to create business activities and create jobs,” he added. Ang noted that the president did not provide more details about his economic plans, but this may be due to

the possibility that he did not want to “offend” the nationalists. “The President did not say anything about removing economic restrictions. I think Mr. Duterte is careful with his language because the nationalists will not like it,” he said. Ang also said the Duterte administration’s focus on agriculture and its emphasis on rolling out measures, such as nationwide soil testing, would help boost farmers’ productivity. He said the farm sector suffered because of the previous administration’s fixation on rice self-sufficiency, to the detriment of other crops. Catherine N. Pillas

AseanTuesday BusinessMirror

news@businessmirror.com.ph

With tax amnesty out the way, Indonesia seeks to lure investors

fter successfully pushing through a tax-amnesty law to bring back funds parked overseas, Indonesia’s next key economic-agenda item is improving the business climate and directing investment into the processing of commodities, the finance minister said. To attract investment in manufacturing, infrastructure and services, especially tourism, the government will focus on cutting red tape, Finance Minister Bambang Brodjonegoro said in a Bloomberg Television interview at the Groupof-20 meeting in Chengdu, China. That’s in line with its goal of transforming the economy into one based on investment, rather than being dependent on consumption and developing industries to process raw materials, he said.

$9B

The combined investments put into Indonesia’s stocks and bonds this year

“The big barrier is our complacency to the commodities,” he said in the interview on July 23. “But with strong consistency from the government, we will be able to do that. Of course, it will take time, maybe it won’t be in one to two years, but hopefully, in three or four years, we can start seeing the result of this effort.” President Joko Widodo has been seeking new sources of growth, as prices of commodities that made up the bulk of the nation’s exports continue to languish, restricting economic growth at about 5 percent, compared with the 7 percent he pledged when he took office in 2014.

Tax amnesty

His cabinet has simplified investment permit processes, cut dwelling time at ports and is drafting rules to address dispute settlements—strategies the government hopes will boost Indonesia’s rank by at least 69 notches to put it among the top 40 nations on the World Bank’s Ease of Doing Business index next year. The approval of a tax-amnesty law in June has given Brodjonegoro some breathing room to boost fiscal spending and prop up growth in the face of weakening revenue. The budget deficit reached 1.83 percent of GDP in the first half, compared with the full-year target of 2.35 percent. Brodjonegoro said he is readying himself to address a judicial challenge against the law that has been submitted to the Constitutional Court, which is adding to uncertainty on whether the program will succeed. “We are not concerned,” he said. “Because of our democratic system, all of the new legislation produced by the government and parliament are always challenged in the Constitutional Court. It has been like a ritual.” So far, investors seem to agree that the tax amnesty will succeed. The nation’s bonds and stocks have attracted a combined $9 billion of inflows this year. The local debt market even saw inflows on June 24, the day after the UK voted to leave the European Union, which triggered a widespread sell-off in global financial markets. The benchmark Jakarta Composite Index entered a bull market on June 29, having gained 13 percent, so far, in 2016. The rupiah has strengthened 5.2 percent this year, the third-best performer among Asia’s 11 most actively traded currencies. Bloomberg News

Editor: Max V. de Leon • Tuesday, July 26, 2016 A5

Asean fails to single out Beijing over South China Sea at meeting

outheast Asian nations failed to take a tough stance on maritime disputes in their first meeting after an international tribunal rejected China’s claim to exclusive control of most of the South China Sea. Foreign ministers from the 10-member Asean said they were pleased with the progress of ties with China, and made no specific mention of a ruling this month that undermined Chinese claims to sovereignty in the disputed waters. The Philippines, which brought the case against China, had called for Asean to effectively address tensions in the South China Sea. The communiqué from the ministerial meeting in Lao PDR did not cite China by name. Instead, it said ministers remained “seriously concerned over recent and ongoing developments and took note of the concerns expressed by some ministers on the land reclamations and escalation of activities in the area.” Ministers called for selfrestraint by countries in a waterway that hosts more than $5 trillion in international trade each year. There was nothing new in the statement and it wasn’t surprising the tribunal’s verdict was absent, said Ian Storey, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore. “It was always very doubtful that Asean would be able to close ranks and issue a joint statement in support of the ruling.” The Permanent Court of Arbitration (PCA) said on July 12 China’s land reclamation and other efforts to assert control over the South China Sea had “aggravated” tensions, “inflicted irreparable harm” to the environment and “violated” Philippine sovereign rights. Asean, which operates on a consensus basis, has, in the past,

Asean must effectively address the security challenges affecting the region, especially the ongoing developments in the South China Sea.” —Yasay struggled to come up with statements on the issue. “Asean must effectively address the security challenges affecting the region, especially the ongoing developments in the South China Sea,” Philippine Foreign Affairs Secretary Perfecto R. Yasay Jr. said at the meeting in Vientiane, according to a statement issued Monday. The bloc should issue a statement supporting legal and diplomatic efforts for a peaceful resolution to the disputes, he said. The South China Sea matter is a test of the unity and central role of Asean, Vietnam’s government said in a statement on its web site, referring to the Laos meeting. Indonesia’s foreign minister said in a statement cohesion was needed to realize Asean’s goals, especially given current regional dynamics.

Chinese Foreign Minister Wang Yi (left) talks to Singapore’s Foreign Minister Vivian Balakrishnan (center) and Philippine Foreign Secretary Perfecto R. Yasay Jr. during the Asean-China Foreign Ministers’ Meeting in Vientiane, Laos, on Monday. A highly anticipated meeting between Southeast Asian foreign ministers and their Chinese counterpart Wang Yi has begun in what is expected to be tense discussions on China’s territorial expansion in the South China Sea. AP

Overlapping claims China’s claims to the waters, where it has reclaimed thousands of acres of land and boosted its military presence, overlap those of Asean nations, including the Philippines, Vietnam, Brunei Darussalam and Malaysia. China argues territorial disputes have nothing to do with its relationship with Asean and has dismissed the ruling by the PCA. Cambodia and Laos have in the past been accused of blocking statements on the dispute. Chinese Foreign Minister Wang Yi, who is attending broader summits in Laos this week held alongside Asean, said on Sunday his country highly appreciates Cambodia’s efforts to uphold justice over the South China Sea issue, according to the official Xinhua News Agency. “We will not

Asean maritime crisis to affect $5.3-trillion trade–think tanks

nternational think tanks warned of economic impact on the region if Asean will not unite to stop escalation of disputes in the South China Sea. In a published article, Bonnie S. Glaser, senior advisor for Asia, Center for Strategic and International Studies, said, “Each year, $5.3 trillion of trade passes through the South China Sea; US trade accounts for $1.2 trillion of this total. Should a crisis occur, the diversion of cargo ships to other routes would harm regional economies as a result of an increase in insurance rates and longer transits. Conflict of any scale in the South China Sea would hamper the claimants from benefiting from the South China’s Sea’s proven and potential riches.” A. Ibrahim Almuttaqi of the Jakartabased Habibie Center said the Asean must go beyond simple rhetoric and toward actions following the favorable ruling for the Philippines by the Permanent Court of Arbitration on the South China Sea dispute. “Even agreeing on simple rhetoric has proved to be difficult for Asean,” Almuttaqi said at the forum “Renewing the Multilateral Response: Building an Asean Coalition,” organized by the think tank Stratbase Albert del Rosario Institute (ADRi) in partnership with Asia Society Philippines and the Asian Institute of Management in Makati. In the heels of the decisive blow against China’s aggression in the hotly contested waters, the regional bloc must address “serious issues” within it, including its lack of unity, limited capabilities and limited resources. “It is clear that there is much homework for Asean to do to raise its relevance in the South China Sea issue, and only when it fixes its problems can it seek to comprehensively and inclusively help resolve the

It is clear that there is much homework for Asean to do to raise its relevance in the South China Sea issue, and only when it fixes its problems can it seek to comprehensively and inclusively help resolve the territorial row.” —Almuttaqi

territorial row,” he said. Dindo Manhit, ADRi president, said the 28th Asean Summit in Vientiane, Laos, can be a good venue to send a strong message to call on China to play a constructive, rather than destabilizing, role in the region. “The Philippines and its Asean partners have an opportunity to leverage on the Permanent Court of Arbitration’s decision to uphold the UNCLOS and effectively extinguishing China’s ‘nine-dash line’ claim,” he said. Even so, Almuttaqi is against isolating Beijing, which he said will only serve to provoke the rising power into taking a more assertive stance. “Remember, the ruling cannot be implemented without the cooperation of all parties, including China,” he stressed.

allow external forces to cause turbulence in the region by hyping up the so-called South China Sea arbitration,” Xinhua reported Wang as saying, China, which is Asean’s largest trading partner, wants the disputes settled on a bilateral basis.

Asean disagreements

Asean most recently struggled to agree on wording on the issue in June, when Malaysia released and then retracted a joint statement from foreign ministers that expressed “serious concerns” over developments in the waters. That statement specifically mentioned China by name—a first for the bloc when calling for a lowering of tensions. The statement was withdrawn after China lobbied Laos as holder of the rotating Asean chair, a

Southeast Asian government official with knowledge of the discussions said at the time. Malaysia Foreign Minister Anifah Aman, who had been on the agenda to cochair a meeting with US Secretary of State John Kerry, decided to skip this week’s meeting at the last minute. Anifah had other urgent matters to attend to, said a foreign ministry official who asked not to be identified, citing government policy. In 2012 Asean failed to issue a joint statement for the first time in its history due to disagreements on the South China Sea. After the meeting collapsed, Cambodia denied it had fallen prey to pressure from China to avoid raising the issue in the statement. China had warned nations beforehand to not mention the territorial spats. Bloomberg News

Singapore central bank damps speculation of policy easing

ingapore’s central bank said its current monetary-policy stance is appropriate and inflation may turn positive later this year, damping speculation of further easing. “Unless there is a marked deterioration in the global economy or significant shift to the inflation outlook, there is no need to change the monetary-policy stance,” Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), told reporters on Monday at the release of the central bank’s annual report. Calls had been building for the MAS to ease policy again in October to support growth in the export-dependent economy as global risks mount. The central bank, which uses the exchange rate rather than interest rates as its main tool, moved to a neutral policy in April, saying it won’t seek currency appreciation. An unchanged stance is now the “default playbook” for the MAS in the absence of any signs of a worsening in the global economy,” Vishnu Varathan, an economist at Mizuho Bank Ltd. in Singapore, said by e-mail. “If the Brexit fallout risk continues to be contained as it has so far, and China’s nascent traction endures [and perhaps] entrenches, there will be no need for monetary-policy overdrive,” he said.

Inflation outlook

The bank said headline inflation will probably turn positive this year, a departure from its guidance in June that consumer prices will continue to decline for the rest of 2016. “Inflation remains subdued,” MAS Chairman Tharman Shanmugaratnam, who is also the nation’s deputy prime minister, said in the bank’s annual report. “Headline inflation has been negative for some time, but could turn positive toward the later part of this year.”

The consumer price index for all items—a measure of headline inflation—has declined every month since November 2014, the longest slump on record, reflecting the effect of lower oil costs and a weaker property market. Prices fell 0.7 percent in June from a year earlier, the statistics office said in a separate report on Monday, compared with a median estimate for a 1.1-percent decline in a Bloomberg survey of 17 economists. While the MAS has eased limits on car financing this year, restrictions imposed in 2013 to help cool the property market will remain in place for now, Menon said. Home prices have adjusted “only modestly” and, while consumer debt levels have eased, “it will take time for household balance sheets to strengthen and become more resilient to interest rate and income shocks,” he said.

Growth forecast

“The risk of a renewed surge in property prices is not trivial, given that interest rates are likely to remain low and global investors continue to search for yield,” he said. Singapore remains vulnerable to swings in global demand as the world still grapples with the UK’s decision to leave the European Union. The city state’s economy expanded an annualized 0.8 percent in the second quarter compared with the previous three months, according to an advanced government estimate. The economy’s performance in the second half of the year “will not be too different” from the first six months, Menon said. He added that “you can’t rule out a particularly bad quarter.” The central bank is forecasting growth of 1 percent to 3 percent for the full year. Menon said the forecast is currently being reviewed, but he declined to clarify whether the range will be narrowed, or shifted higher or lower. Bloomberg News

The World BusinessMirror

Tuesday, July 26, 2016

Munich shooter was bullied loner, planned attack for a year

briefs

Pope condemns terrorism, violence in Munich, Kabul

VATICAN CITY—Pope Francis has condemned “deplorable acts of terrorism and violence” in Munich and Kabul that have left dozens dead in recent days. Addressing a crowd in Saint Peter’s Square on Sunday, Francis urged believers to join his prayers, saying that “as much as the difficulties seem insurmountable and dark the prospects of peace and security, our prayers must be that much more insistent.” A GermanIranian 18-year-old that police said was obsessed with massshootings killed nine people, mostly teens, in a shopping mall shooting spree in Munich on Friday, while a suicide bomber killed at least 80 people during a peaceful demonstration in Kabul on Saturday. AP

Punishing strike by resident doctors grinds on in Haiti

PORT-AU-PRINCE, Haiti— Empty halls buzz with flies. Rats scamper through the wards at night. The emergency room is empty except for four shackled prisoners, watched over by relatives and missionaries rather than medical personnel. The Hospital of the State University of Haiti, the largest and most important public medical facility in this troubled country, is at the epicenter of the most punishing strike by Haitian medical workers in memory. Young doctors and interns walked off the job in March to protest chronic shortages of basic medical supplies, dismal pay and working conditions so unsafe that relatives of patients routinely threaten them, even storming into operating rooms with handguns. Nurses and support staff soon joined the walkout. Then waves of strikes spread to 12 other governmentrun hospitals across Haiti, crippling a severely underresourced health system that struggles to cope during the best of times. Health Ministry authorities say four state hospitals are closed and others hit by strikes are functioning at diminished capacity. AP

Iraq finally bans fake bomb detectors after July 3 blast

BAGHDAD—For nearly a decade, anyone driving through one of Baghdad’s many checkpoints was subjected to a search by a soldier pointing a security wand at their vehicle and watching the device intently to see if its antenna moved. If it pointed at the car, it had supposedly detected a possible bomb. The wands were completely bogus. It had been proven years ago, even before 2013, when two British men were convicted in separate trials on fraud charges for selling the detectors. The devices, sold under various names for thousands of dollars each, apparently were based on a product that sold for about $20 and claimed to find golf balls. Yet, the Iraqi government continued to use the devices, spending nearly $60 million on them despite warnings by US military commanders and the wands’ proven failure to stop near-daily bombings in Baghdad. It took a massive suicide bombing that killed almost 300 people in Baghdad on July 3— the deadliest single attack in the capital in 13 years of war—for Prime Minister Haider al-Abadi to finally ban their use. The reason it took so long is likely the widespread corruption in the government. Iraqis mocked the device from the start, joking that too much aftershave could set off the antenna. AP

news@businessmirror.com.ph

Police officers secure the area after a bomb attack in Ansbach, Germany, on Monday. Bavaria’s top security official says a man who blew himself up after being turned away from an open-air music festival in the southern German city was a 27-year-old Syrian who had been denied asylum. AP/Matthias Schrader

Ansbach attack suggests Islamist motive–official

NSBACH, Germany—Bavaria’s top security official said on Monday that he believes a failed asylum seeker who blew himself up and injured 12 people in the southern German town of Ansbach was driven by religious extremism. “My personal view is that I unfortunately think it’s ver y likely this really was an Islamist suicide attack,” Bavarian Interior Minister Joachim Herrmann told German news agency dpa. The 27-year-old Syrian blew himself up after being turned away from an open-air music festival. Herrmann said the man’s request for asylum was rejected a year ago, but he was allowed to remain in Germany because of the strife in Syria. The unnamed man had repeatedly received psychiatric treatment, including for attempted suicide, Herrmann said. Asked whether the bomber might have links to the Islamic State (IS) group, Herrmann said that couldn’t be ruled out, though there was no concrete evidence for this yet. “The obvious intention to kill more people indicates an Islamist connection,” he told dpa. Earlier on Monday, a spokesman for the prosecutor’s office in Ansbach said the attacker’s motive

12 The number of people injured in the bomb blast

wasn’t clear. “If there is an Islamist link or not is purely speculation at this point,” said the spokesman, Michael Schrotberger. Roman Fertinger, the deputy police chief in nearby Nuernberg, said it was likely there would have been more casualties if the man had managed to enter the concert venue. Three of the 12 victims suffered serious injuries in the blast. The

attacker’s rucksack had contained sharp bits of metal. The explosion came as Germany, and the southern state of Bavaria in particular, have been on edge. Earlier on Sunday, a Syrian man killed a woman with a machete and wounded two others outside a bus station in the southwestern city of Reutlingen before being arrested. Police said there were no indications pointing to terrorism. Two days earlier, a man went on a deadly rampage at a Munich mall, killing nine people and leaving dozens wounded. And an ax attack on a train near Wuerzburg last Monday wounded five. A 17-year-old Afghan asylumseeker was shot and killed by police as he fled the scene. On Sunday authorities said they were alerted to an explosion in Ansbach’s city’s center shortly after 10 p.m. The three-day open-air concert was under way, with about 2,500 in attendance, when it was shut down as a precaution after the explosion. Jethro Tull frontman Ian Anderson was the scheduled performer. Bavarian public broadcaster Bayerische Rundfunk reported that 200 police officers and 350 rescue personnel were brought in following the explosion in Ansbach. The recent attacks in Bavaria, a picturesque, mountainous haven for travelers, came shortly after a Tunisian man driving a truck killed 84 people when

he plowed through a festive crowd celebrating Bastille Day in Nice, along the famed French Riviera. In Munich on Sunday evening, 1,500 people gathered at the scene of the shooting there, lighting candles and placing flowers in tribute to the victims of an 18-year-old German-Iranian. Police said that he had planned the attack for a year. After the Munich attack, Herrmann urged the German government to allow the country’s military to be deployed to support police during attacks. Germany’s post-war Constitution, because of the excesses of the Nazi era, only allows the military to be deployed domestically in cases of national emergency. Herrmann has called those regulations obsolete and said that Germans have a “right to safety.” Back in January, Bavaria’s justice minister launched a state program in Ansbach meant to teach refugees the basics of law in their new host country. The initiative came amid growing tensions and concerns in Germany about how it would integrate the estimated 1 million-plus migrants it registered crossing into the country last year. Classes include lessons about freedom of opinion, the separation of religion and state, and the equality of men and women. “Ger many is an attractive country because it respects the dignity of every human being,” an educational film shown to newcomers said, “and it is supposed to stay that way.” AP

China to shut political, social news sites run by web sites

EIJING —Beijing authorities have shut dow n severa l edg y news programs r un by major web por ta ls in the latest round of effor ts to restr ict repor ting of politica l and socia l news. Citing violation of rules, the municipal office in charge of cyberspace regulations have ordered news portals of Sina, Sohu, Netease and iFeng to end their news programs known for more freewheeling coverage of political and social news, the staterun Beijing News reported on Sunday. The government office

did not immediately respond to requests for comment from The Associated Press. By law, Chinese news sites are allowed to carry only political news reports from state media controlled by party committees and governments. Despite the clear rules against news sites having their own news gathering teams, major news sites—dr iven partly by commercial interests and partly by their journalistic pursuits—have formed their own editorial staffs to chase hot social issues and conduct in-depth investigations. I n t he pa st fe w yea rs, i n

envelope-pushing moves, the news sites h ave h i red m a ny veteran investigative jour na lists displaced from traditiona l media that have come under t i g ht e r c o nt rol s , a nd t ho s e jour na lists— despite work ing w it hout acc red it at ion—h ave produced long, edg y pieces on socia l issues, such as env ironmenta l protests over trash incinerators and the touchy topic of education inequit y. T hose programs have over time become popu lar among readers. Authorities have long turned a blind eye to news sites hiring

their own staffs to report on nonsensitive news, such as entertainment and sports, but are always wary of any editorial efforts on sensitive topics outside direct government control. The closure of the news programs run by the web sites further restricts China’s investigative news reporting, said a Beijing-based journalism professor, who requested anonymity because of the sensitivity of the topic. “It’s becoming more difficult,” the professor said on Monday. “There’s very little room left now for in-depth reporting.” AP

UNICH—The teenager behind the deadly shooting rampage in Munich was a withdrawn loner obsessed with playing “killer” video games in his bedroom, a victim of bullying who suffered from panic attacks set off by contacts with other people, investigators said on Sunday, adding that he had planned the attack for a year. L aw- en forcement of f ic i a l s piecing together a portrait of the 18-year-old shooter said he was seeing a doctor up to last month for treatment of depression and psychiatric problems that began in 2015 with inpatient hospital care followed by outpatient visits. They said medication for his problems had been found in his room. But toxicological and autopsy results were still not available, so it’s not yet clear whether he was taking the medicine when he went on his shooting rampage on Friday, killing nine people and leaving dozens wounded. T he 18 -y e a r - old G e r m a n Iranian, identified only as David S. due to Germany privacy laws, had earlier been described by investigators as being bullied by schoolmates at least once four years ago and being fascinated by previous mass shootings. But none of those killed were known to him, investigators said. Late on Sunday police said they had taken in for questioning a friend of the shooter who might have known of the attack plan. Further details were not immediately available, but Germany’s dpa news agency reported the 16-yearold boy had gone to police himself after the act. Some 1,500 people gathered at the scene of the shooting on Sunday evening, lighting candles and placing flowers in tribute to the victims. In France, where scores have been killed in six extremist attacks since the beginning of 2015, the Eiffel Tower was lit in the German national colors of red, black and gold. T he attack on Fr iday took place on the fifth anniversary of the killing of 77 people by Norwegian right-wing extremist Anders Behring Breivik, whose victims included dozens of young people. Investigators said the Munich shooter had researched that slaughter online and had visited the site of a previous school shooting in the German town of Winnenden last year. “He had been planning this crime since last summer,” said Robert Heimberger, Bavaria’s top official, citing a “manifesto” linked to the shooting found in the gunman’s locked room in the apartment he shared with his parents and brother. Heimberger said he could not reveal details of the document yet because there were “many more terabytes” of information to evaluate, but described the gunman as a “devoted player” of group Internet “killer games” pitting virtual shooters against each other. Weapons are strictly controlled in Germany and police are still trying to determine exactly how the shooter obtained the Glock 17 used in the attack. Heimberger sa id it ’s “ver y likely” the suspect purchased the weapon illegally online on the “darknet,” a restricted access computer network often used by criminals. He said the weapon had been rendered unusable and sold as a prop before being restored to its original function. The shooter’s father saw a video of the start of his son’s rampage on social media and went to police as it was taking place, Heimberger said, adding that the family was still emotionally not up to questioning by police. AP

The World BusinessMirror

news@businessmirror.com.ph

As Japan grays, retailers seek youths in Vietnam

93M The population of Vietnam

giants and multinational companies who are accelerating their development to build solid footprint,” Roberto Butragueño, Nielsen Vietnam associate director of retail services, said in an e-mail. Shoppers in the country are also becoming more demanding. While six in 10 Vietnamese expect stores to be within reach, nearly as many also want them to be organized in such a way that enhances the shopping experience, according to Nielsen, which surveyed 30,000 people in 61 countries.

Young population

As aging Japan curbs shopping, Aeon looks to young Vietnam. Bloomberg News

hese days Thu Huong no longer shops at the freshproduce market near her home, opting instead to hop in a taxi and head off to Aeon Co.’s ninemonth-old mall in Hanoi. There, as she shops for her family of five, she can bask in the air-conditioning and enjoy free Wi-Fi. “It’s very convenient to shop there. I can buy all the different things that my family needs for a whole week. I also feel more modern and fancy when shopping in a place like this,” the 30-year-old dairy-company employee said. With a young population, an expanding middle class and one of Southeast Asia’s fastest-growing economies, Vietnam is an alluring market for Aeon, Takashimaya Co. and Seven and I Holdings Co. The reason: China is slowing and growth is flatlining at home. “The Vietnamese economy is growing rapidly and its middle class is explosively expanding,” said Nagahisa Oyama, who oversees Vietnam operations as the company’s chief there. “Its retail market is growing very quickly with strong appetite for spending, especially among young people.”

Young demographics

And there are plenty of them in the nation of 93 million. Almost 60 percent of Vietnam’s population are under 35 years old and are becoming better educated, according to market research company Nielsen Vietnam. Four days after an Aeon Mall opened in Ho Chi Minh City on July

1, it recorded sales that were 18 percent higher than originally estimated, according to the company. Aeon, Japan’s largest retailer by sales, currently operates four malls and 54 supermarkets in Vietnam. The number of Aeon supermarkets in the Southeast Asian country is more than double the grocery stores the company’s invested in China and comprises a third of supermarkets the Japanese business has opened outside its home market. They’re not the only Japanese firms looking to sow profits in the Vietnamese market. About 20 consumer companies from Japan—from a chocolate maker to noodle company to a greentea manufacturer—met with potential Vietnamese partners on Wednesday at an investment conference in Hanoi organized by Mitsubishi UFJ Financial Group Inc. and Vietnam JSC Bank for Industry and Trade. Japanese corporations are increasingly looking outside of the nation for growth. Aeon recorded a net loss for the March to May period, its third quarterly loss within a year, as a declining and increasingly frugal Japanese population capped sales.

“We think competition in the Vietnamese retail market will increase with Japanese convenience stores as well as Korean and Thai companies entering there,” Oyama said. The company’s tie-ups with local grocery chains Citimart and Fivimart will help expand its business, he added. Shares of Aeon rose 0.4 percent to ¥1,505 as of 10:15 a.m. in Tokyo trading, trimming this year’s drop to 19.4 percent. Takashimaya gained 1.9 percent to ¥793, while Seven and I advanced 0.9 percent to ¥4,488. Japan’s benchmark Topix index climbed 0.8 percent. The world’s fastest-aging major nation saw its Japanese population drop the most on record, falling for a seventh straight year in 2015. By contrast, Vietnam’s young demographics is also bolstered by growing average incomes, which rose to $2,111 last year compared with just $433 in 2000, according to World Bank data.

Evolving retail

Consumers in Vietnam increasingly desire better-quality shopping experiences, prompting the country’s retail model to evolve from one mainly dominated by neighborhood wet markets that sell fresh produce, according to Nielsen Vietnam. The country has nearly 9,000 wet markets, 800 supermarkets and more than a million small stores run by individual households, according to a government report in June. Spending at formal retail stores and centers, as opposed to traditional local shops, is expected to rise to 40 of consumer spending by 2020, up from 25 percent currently, the report showed. Vietnam’s retail shift took off two years ago, aided by “both local

Department-store operator Takashimaya will open a 15,000-square-meter department store in the Saigon Center in Ho Chi Minh City this month, its first in the country to tap faster-growing markets abroad, especially in Southeast Asia, Tokyo-based Spokesman Hironobu Hanai said. Vietnam’s young population and high-growth rate is attractive and Takashimaya has invested about ¥5 billion ($47 million) into the nation since 2012, including in the new store and other real estate, Hanai said. Japanese convenience store giant 7-Eleven last year signed a franchise agreement with Seven System Vietnam as part of its expansion plan in Pacific Rim. And the interest is not limited to Japan, as Korean retail conglomerate Lotte Group targets to open 60 supermarkets in Vietnam by 2020, while Thailand’s TCC Holding Co. acquired Metro AG’s Cash and Carry wholesale business in Vietnam for €655 million ($720 million).

Plastic bags

Homegrown retailers are pushing back. Hanoi-based Vingroup aims to open as many as 500 supermarkets and 8,000 convenience stores under its VinMart and VinMart+ brands in the next five years, even as large retailers from overseas have “created difficulties for local companies,” the property developer said in an e-mail. Mobile World Investment Corp., Vietnam’s top mobile-phone retailer, plans to launch grocery stores next year. This new segment is expected to grow much faster than its mobile-phone and consumer electronics retail business, Chairman Nguyen Duc Tai said in an interview. “The market is very huge here. People change mobile phones only every two years on average while they have to buy fresh food and meat everyday,” Tai said. “Ten years ago, you see women carrying plastic bags to the wet markets to buy food every morning, but you may not see this image in the future. This is what we call ‘generation change.’” Bloomberg News

Japan sees trade surplus in June as imports drop 19%

OKYO—Japan posted a better-than-expected trade surplus in June, as imports fell nearly 19 percent, outpacing a more modest decline in exports. The customs data released on Monday showed a ¥692.8-billion ($6.5-billion) surplus, compared with a ¥60.9-billion deficit in June 2015. Economists had forecasted larger declines for both imports and exports for the world’s third-largest economy.

Despite the recent strengthening of the Japanese yen against the US dollar, export prices have fallen 14 percent from a year earlier, according to separate data from the Bank of Japan. That trend is hurting corporate revenues and profits, Marcel Thieliant of Capital Economics said in a commentary. Japan’s exports to the US, its biggest overseas market, fell 6.5 percent in June from a year earlier, while exports to China, its largest trading

partner, dropped 10 percent. Shipments of vehicles, chemicals and machinery fell year-on-year. At the same time, imports of oil, coal and gas dropped by over a third in value, in part reflecting lower prices. Still, overall volumes of exports and imports were better than expected. However, recent surveys of factory managers show weakness in overseas demand. “Indeed, we expect a 1-percent

drop in export volumes this year, following a 3.4-percent jump last year,” Thieliant said. Japan’s economic recovery has suffered as an anticipated strong rebound in exports failed to materialize, and the trade data for June are unlikely to disrupt an expected move by the Bank of Japan to increase monetary stimulus at a policy meeting later this week, said Masamichi Adachi of JP Morgan in Tokyo. AP

Tuesday, July 26, 2016

Beginners’ guide to Brexit: What have we learned so far?

ritain’s divorce from the European Union (EU) is not going to be easy, given there is no precedent and no planning was done before the historic referendum result. A bit more than one month on, here’s what we know—and what we still have to find out—about the key issues facing investors and executives as officials work out exactly what Brexit will mean.

When will talks begin?

Prime Minister Theresa May must decide when to activate Article 50 of the Lisbon Treaty, which starts two years of talks. While some politicians at home and leaders abroad see a need for speed, May says she won’t pull the trigger before the end of the year. German Chancellor Angela Merkel has given her blessing to the delay, though she’s ruled out preliminary talks either “formally or informally.” There is some question over whether the prime minister herself has the power to start the process or whether she needs parliament’s consent. The risk for May is that if she lets lawmakers vote, some may try to oppose withdrawal or attach amendments that hamstring negotiations. Government lawyers say it’s up to the prime minister, but Judge Brian Leveson said last week that a lawsuit demanding she consult parliament will be taken “very seriously” and may reach the Supreme Court by December.

What is the post-EU regime?

There are more models than at a Miss World pageant, yet none perfectly fit the demands of both sides, so a new arrangement will probably have to be crafted. Here is a review of some options. What is known is that the pro-Brexit lobby’s dream of both complete access to the EU’s single market and a crackdown on the free movement of labor is a nonstarter for Merkel and French President François Hollande. One idea enjoying attention now is based on the European Economic Area (EEA). Rupert Harrison, a former adviser to the United Kingdom Treasury and now at BlackRock Inc., calls it “EEA Minus.” That would mean the UK having “a bit more immigration control and a bit less single market.” One challenge will be thrashing out a future relationship while breaking the current one. Britain can’t make formal trade deals with other countries until the EU divorce has been completed, and establishing new ties will require the approval of more bodies than the original breakup. So, some kind of stop-gap agreements may be needed to cover the interim period.

Will British banks still be able to operate across Europe? The so-called banking passport, which allows lenders based in the UK to provide services and raise funds in the rest of the EU, is a crucial issue for the city of London. Executives from JPMorgan Chase & Co. and UBS Group AG have warned that failure to maintain the status quo could force them to cut British jobs. Deutsche Bank AG sounds even more worried with an internal document reported by Business Insider, saying it expects to lose passporting and that it sees a “first mover advantage” for institutions that respond to the threat before the rest of the industry. Chancellor of the Exchequer Philip Hammond said last week that protecting passporting “will be a very important part” of negotiations.

What trade deals will be struck outside the EU?

Once the UK is out it will need its own links with a host of countries that it currently trades with as an EU member. Trade Secretary Liam Fox is “scoping” out about a dozen pacts, he told the Sunday Times, and Foreign Secretary Boris Johnson said “you can begin to pencil things in.” Brexit Czar David Davis has said there is the opportunity to have a free-trade zone “probably 10 times the size” of the EU— though skeptics have pointed out the trading zone Davis is imagining is bigger than the whole world economy. Australia has offered to strike a deal “as soon as possible,” but Fox’s talk of “very fruitful” talks with Canada was quieted when its trade envoy said her priority was still a deal with the EU. One problem is that the UK hasn’t negotiated a trade deal alone since the early 1970s and so lacks officials skilled in doing so. A hunt is under way for lawyers, bankers and management consultants who can help out, but they come at a price.

What happens to clearing of euro-denominated trades?

Clearing firms stand between buyers and sellers, holding collateral from both, in case a member defaults. London’s role in the $493-trillion derivatives market came into focus last year when the UK won a court case to fend off the European Central Bank’s (ECB) bid to shift euro-denominated clearing into the singlecurrency area. Brexit will give European financial centers a renewed impetus. Hollande has argued EU member-states should prepare to take it back. German officials countered that Paris is dreaming if it thinks it can beat out Frankfurt, the home of the ECB and Deutsche Boerse AG’s Eurex operations.

What happens to EU nationals in the UK?

May says she wants to guarantee the rights of EU citizens living in Britain, so long as she receives similar assurances from Europe about Britons on the continent. This could take a while given the lack of formal talks. Davis told Sky News last week that he wanted to reach a “generous settlement” for European citizens already in the country. He added that a time limit could be imposed which may see the right to remain taken away from newer arrivals. Hollande said last week Britons will be able to “spend as much time as they wish” in France.

What does Brexit mean for data protection?

EU regulators passed two major pieces of privacy legislation over the last few months that will force the UK to match those same higher standards or risk being an obstacle to companies. In July a new transAtlantic data transfer tool came into force, under which multinational companies can ship over personal information from Europe to the US. The UK may have to negotiate its own accord with the US to keep the flow of data as free and as safe as possible from Europe. It may also have to bring its data protection rules in line with a much stricter EU privacy law that will take effect across the EU in 2018. The law, sealed in a deal last December, will give EU data watchdogs for the first time the power to levy fines on companies from banks to US technology giants of as much as 4 percent of their global annual sales for privacy violations. Bloomberg News

BMR

Business

A6 Tuesday, July 26, 2016

Change has come: No fashion show,

By Jovee Marie N. de la Cruz @joveemarie & Rene Acosta @reneacostaBM

s promised, several changes have been felt during the first State of the Nation Address (Sona) of President Duterte held at a joint session of the Senate and the House of Representatives at Batasang Pambansa. While there was still a red carpet for the guests, no fashion show was recorded. Speaker Pantaleon D. Alvarez of Davao del Norte has implemented business attire as dress code for the attendees of the annual event. “Sona is an important event, but not a party or social event,” Alvarez said. From lavish buffet, the House and the Sona preparation committee, meanwhile, offered guests simple food—such as sandwiches, native chips and salted eggs dressing, mongo soup, smoked fish with alugbati leaves, fresh and friend lumpia ubod (heart of palm in

pouch), chicken and spicy tuna empanaditas, sotong goreng (calamares), crispy triangles of flaked chicken, adobo and mushrooms, pan de sal with white cheese, beef steak, penne with crab fat sauce, balut (duck embryo) paté in profiteroles and chicken skin crackling. The office of Executive Director Edith Cardenas, chairman of the committee on reception and protocol, said at least 800 guests were invited to a buffet in the House after the Sona. Earlier, Mr. Duterte said his government will implement simple lifestyle during his term. Also for the first time, no effigies were

burned and no anti-administration rally was held by militant and progressive groups in the Batasang Pambansa grounds. Bagong Alyansang Makabayan (Bayan) Secretary-General Renato Reyes said the group’s rally is only to show support to the Duterte administration. He said Duterte’s first Sona is very historic because the militants, for the first time, were allowed by the police to demonstrate 300 meters from the House. In the previous Sonas fire trucks, police cars, concrete barriers and barbed wires were used to block protesters from coming near the Batasan. After his oath taking on June 30, Duterte welcomed progressive groups inside the Palace after they held a rally near his office. Unlike the past Sonas, the whole of Commonwealth Avenue was open to traffic, with only the IBP Road closed by traffic and anti-riot policemen. Hours before President Duterte’s address, Philippine National Police Director General Ronald de la Rosa even visited and talked with the ralliers and ordered the policemen to lower down

Former President and now Pampanga Rep. Gloria Macapagal-Arroyo smiles during the opening session of the Philippine Congress where President Duterte is set to deliver his first State of the Nation Address at the House of Representatives. AP/Aaron Favila

their shields and truncheons. The PNP chief went up the stage of the ralliers and addressed them. “This is the first time in the history of the Philippines when we have a Sona and the police are not feeling threatened. Our policemen are very relaxed,” de la Rosa said. While at least 11,000 policemen were mobilized for the Sona, policemen did not put up the usual barricades made up of container vans. “We feel they are with us, they are no longer against us.

That they are solidly behind the Duterte administration. They want reform. They want change,” de la Rosa said. “ This is the change that we are now observing, we are now experiencing. The militants who used to confront and engage our policemen to violence, they are there expressing support to the administration, showing discipline among their ranks, not aggressive,” he added. While there was no specific

Filipino activists and supporters for Philippine Presiden raise their clenched fists as they arrive near the gates of t of Representatives, where President Duterte is set to del State of the Nation Address in Quezon City on Monday. AP/

threat against the Sona, both the National Capital Region Police Office (NCRPO) and the military’s Joint Task Force-NCR Command (JTF-NCRCom) still raised their respective alert status.

Reports

sMirror

www.businessmirror.com.ph | Tuesday, July 26, 2016

, simple food, peaceful rally at Sona

nt Duterte the House liver his first

/Aaron Favila

T he NC R P O we nt on f u l l a ler t, wh i le t he J T F-NCRCom declared red-alert status. However, as prom ised by m i l it a nt g roups, t he ra l l iers held t h e i r a c t i v it i e s i n p e a c e f u l

ma nner, even dec l a r ing t hat t hey were t here to show t heir suppor t to Duter te. Some of them, however, were asking that the administration jail former President Benigno Aquino III.

Ifugao Rep. Teddy Brawner Baguilat

Josephine Pagalan, Manobo leader from Caraga region, and Party-list Rep. Carlos Isagani Zarate of Bayan Muna

Abante Mindanao Rep. Sitti Djalia Turabin-Hataman

A10 Tuesday, July 26, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Moving out of the Metro?

ll the talk over the last years about decongesting the Metro Manila area has been just that— all talk. No political leader has been willing or able to address exactly what needs to be done to accomplish this objective.

The problems of the Metro area—traffic, pollution and even crime—are due in part to the fact that there are simply too many people in too small a space. But asking folks to migrate to other areas of the country is completely unrealistic if there is no viable transportation, infrastructure and commercial facilities that can provide jobs. The root of the problem may be that our politicians and those making the decisions are an entrenched part of “Imperial Manila”. Finally, though, the Duterte administration may be taking the proper steps to break the stranglehold the National Capital Region has on the rest of the nation and on the money that funds public-works projects. It is about time. Budget Secretary Benjamin E. Diokno has began to outline a long-term plan that, hopefully, will achieve the twin goals of decongesting Metro Manila and bringing more prosperity to other regions and provinces. Diokno said the government would build more transportation infrastructure to connect more areas to Metro Manila. We have heard those sentiments expressed in the past, to no avail. Nothing has changed. But now, there is a strong glimmer of hope. Diokno said the government plans to implement projects in the provinces “simultaneously and not sequentially” to those in the Metro area. The attitude of prior administrations has been, “Once we get Manila fixed, you are next.” That concept has been a total failure. You cannot expect people—whether rich or poor—to build homes, invest in business and start new lives in vast provincial wastelands lacking in infrastructure and without much of a future. It may be a silly analogy, but, if an area cannot support a major national bank or fast-food restaurant, how can the government expect people to move to that area? This problem may or may not be a justification of a more federalized structure of the government. However, one thing is absolutely clear and evident. The economic success of the Philippines can never reach its potential without increased prosperity outside of Metro Manila. We hear this constant whining about inclusive growth. How can there be inclusive growth if people living even a mere 100 kilometers away from Metro Manila have scant economic opportunities? If helping build the provincial economies is a genuine objective of the Duterte administration and not just mere talk, then we need to support it. At the same time, we hold Secretary Diokno and the administration to their word. The future of the Philippines may depend on them.

Since 2005

BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua Founder

Publisher Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Senior Editors

T. Anthony C. Cabangon Jun B. Vallecera Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos

Online Editor Social Media Editor

Ruben M. Cruz Jr. Angel R. Calso

Creative Director Chief Photographer

Eduardo A. Davad Nonilon G. Reyes

Chairman of the Board & Ombudsman President VP-Finance VP-Corporate Affairs VP Advertising Sales Advertising Sales Manager Group Circulation Manager

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro

What the surveys say Manny B. Villar

THE Entrepreneur

inety-one percent, or nine out of 10 Filipinos, trust President Duterte, according to a recent survey conducted by Pulse Asia. The survey firm said practically no one (0.2 percent) distrusts the new Chief Executive. The nationwide survey was conducted from July 2 to 8, or just a few days after President Duterte took his oath of office, with 1,200 respondents. A separate survey conducted by the Social Weather Stations (SWS) from June 24 to 27 found 84 percent of the 1,200 respondents with “much trust,” 11 percent “undecided” and 5 percent with “little trust” in Mr. Duterte. This gives the President a net trust rating of +79 (“much trust” minus “little trust”), which is classified by SWS as “excellent.” President Duterte received excellent ratings among the country’s three major geographical areas, in urban and rural areas, among all socioeconomic classes, among men and women, in all age groups and across all education levels, according to SWS.

HOM

www.businessmirror.com.ph

regional offices n DXQR -93dot5 HOME RADIO CAGAYAN DE ORO E-MAIL ADDRESS: homecdo@yahoo.com ADDRESS: Archbishop Hayes corner Velez Street, Cagayan de Oro City CONTACT NOs.: (088) 227-2104/ 857-9350/ 0922-811-3997 n DYQC -106dot7 HOME RADIO CEBU E-MAIL ADDRESS: homecebu@yahoo.com ADDRESS: Ground Floor, Fortune Life Building, Jones Avenue, Cebu City CONTACT NOs.: (032) 253-2973/ 234-4252/ 416-1067/ 0922-811-3994 n DWQT -89dot3 HOME RADIO DAGUPAN E-MAIL ADDRESS: homeradiodagupan@ yahoo.com ADDRESS: 4th Floor, Orchids Hotel Building,

Rizal Street, Dagupan City CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001 n DXQM – 98dot7 HOME RADIO DAVAO E-MAIL ADDRESS: home98dot7@gmail.com ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996 n DXQS -98dot3 HOME RADIO GENERAL SANTOS E-MAIL ADDRESS: homegensan@yahoo.com ADDRESS: 2nd Floor, Penamante Clinic Tiongson Street, General Santos City CONTACT NO.: 0922-811-3998 n DYQN -89dot5 HOME RADIO ILOILO E-MAIL ADDRESS: homeiloilo@yahoo.com

ADDRESS: 3rd Floor, Eternal Plans Building, Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995 n DWQA -92dot3 HOME RADIO LEGAZPI E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal Street, Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992 n DWQJ -95dot1 HOME RADIO NAGA E-MAIL ADDRESS: homenaga@yahoo.com ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993

Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila MeMBer of

Even the recent mission from the International Monetary Fund (IMF) agrees with my position. In a statement early this month, the 2016 Article IV Mission to the Philippines said “the Philippine economy has performed well, but there is scope to do even better.” The IMF mission said increasing infrastructure spending would enable the Philippine economy to grow by 7 percent to 8 percent a year. “This additional effort scenario would make the Philippines one of the fastest-growing (if not the fastest) economies in the world and help reduce poverty toward the government’s ambitious target,” the mission said. Based on my personal observations, I think the Duterte administration is responding to the challenges very quickly. Its new economic team is looking at, among other measures, raising the deficit ceiling to 3 percent of GDP, from 2 percent under the previous administration. This will allow the government to funnel more resources to infrastructure. Hopefully, we can make up for lost time not only on infrastructure but also in other areas, such as education, health care and other essential services. For comments, e-mail mbv.secretariat@ gmail.com or visit www.mannyvillar.com.ph.

Constructive criticism or something else?

Constructive criticism to the end of “setting the country right” is critically important. But constant criticisms that do not offer any solutions to problems are a different story and may even be destructive. Could this destructive criticism be considered a form of “treason”?

But a sovereign state does have the right and obligation to protect itself from those that would do it harm directly or indirectly by acts of espionage and subversion. Mildred Gillars, a US citizen who became known as Axis Sally, was convicted of treason for broadcasting demoralizing propaganda to Allied forces in Europe from a Nazi radio station during World War II. The problem has always been to limit the definition of “treason” to avoid its use as a political tool. However, in usage by ordinary

because espionage, sedition and the like are eventually discovered and punished. But it is those actions that undermine the state—not the government—and society that are not called treasonous that are successful and do the damage. US Sen. and Civil War Gen. Carl Schurz wrote, “My country, right or wrong; if right, to be kept right; and if wrong, to be set right.” Some have twisted his words to justify blind allegiance to the state and the government, which was the farthest thing from Schurz’s mind. He was speaking of correcting the failures of a nation when he spearheaded the political movement to end US slavery. Schurz was German-born and deemed a

John Mangun

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

Based on the results of the surveys, which were conducted before and after the President’s oathtaking on June 30, I think what the people are saying is that “so far, so good.” The results of the surveys are also an indication that the previous government leaders underestimated the desire of the people, which is that the government should be expeditious in addressing the nation’s problems. So far, the people like what President Duterte is doing to solve persistent problems, like drugs and criminality. The executives of the new administration must take a hint from the criticisms against the previous administration for being “slow” to act on the nation’s problems. They must be reminded that one of the reasons Mr. Duterte was elected by more than 16 million

voters was because he was perceived to be a man of action. It was also an expression of the people’s anger, or at least frustration and disappointment, with the slowness of the previous administration. One persistent criticism against the previous administration was its underspending on infrastructure, which was blamed for the economy’s slow growth, such as the lowerthan-expected 5.8-percent increase in the country’s GDP in 2015. The previous administration’s priority was in improving the government’s financial condition, which was not bad, as it helped gain investment-grade ratings from international rating agencies. However, while the government’s financial condition improved, the economy suffered because of underspending. The country continues to lag behind its peers in Southeast Asia in terms of infrastructure development. The negative consequences extend even to the daily lives of Filipinos. Just look at the worsening traffic congestion in Metro Manila, which reflects the inadequate transport infrastructure. I have always believed the Philippine economy should be growing by as high as 7 percent a year, were it not for the government’s higher emphasis on fiscal restraint over growth.

OUTSIDE THE BOX

he legal concept of treason began as a statute in the 1300s under the reign of King Edward III of England. It was specifically directed at the crimes of waging war against the throne, aiding enemies of the King or contemplating his death. About 100 years later, the law of treason was expanded to include almost any act that went against the King’s will and naturally was used to silence any opposition to the throne. people, we usually substitute the word “betrayal” for the legal term “treason.” We speak of being betrayed in a relationship. The consensus among major Islamic schools is that apostasy (leaving Islam) is considered treason against the state and a betrayal of the faith. Sixteenth-century English author and Courtier Sir John Harington wrote, “Treason doth never prosper, what’s the reason? For if it prospers, none dare call it treason.” In other words, acts of treason are rarely if ever completely successful

“radical revolutionary” by the Kingdom of Prussia. Constructive criticism to the end of “setting the country right” is critically important. But constant criticisms that do not offer any solutions to problems are a different story and may even be destructive. Could this destructive criticism be considered a form of treason? Freedom of opinion and speech is vital and should never be tempered or restricted. However, the people have a right and obligation to protect their nation and society from those that would undermine and damage the country. We can do this by recognizing those that are hurting not helping make the nation better by calling them out. While we may not call it treason, maybe, in a sense, we should. In the biblical book of Matthew it is written, “Beware of false prophets who come disguised as harmless sheep but are really vicious wolves.” E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Billions of euros, US dollars for fossil fuel are being diverted to green, sustainable business Cecilio T. Arillo

database

HE prestigious Potsdam Institute for Climate Impact Research (PIK) and its powerful copartners are expected in the next few days to announce some of the best strategies to divert huge US dollar and euro capital from fossil fuels (coal, gas and oil) industries to green innovation and sustainable business. While I was writing this column on Sunday, Berlin joined other European capitals Stockholm, Paris, Copenhagen and Oslo in making a powerful, public rejection of the fossil fuel industry. Officially, the Berlin House of Representatives adopted a new investment policy, banning coal, oil and gas companies from the city’s €750-million pension fund, which includes shares in companies, such as RWE, E.ON and Total. The diversion of capital from fossil-fuel industries is a new approach to reducing greenhouse-gas emissions, which could turn out to be a global “game changer,” PIK said in a statement relayed to Database. “Banks and insurers can play a crucial part in stabilizing the climate, while, at the same time, safeguarding their clients’ assets,” the PIK statement said. The statement said leading representatives of finance and climate research, including the Swiss global bank UBS, the French multinational insurance firm AXA, CDP, the European innovation initiative ClimateKIC and Humboldt-Universität zu Berlin, discussed the best strategies on Thursday in Berlin for a turnaround in investing. “Already today,” said the PIK, “investments of billions of euros are being redirected. Pioneered by students of wealthy US universities, divestment has reached financial big shots like Allianz by now: the financial services company announced its intention to divest from its assets in coal mining. The foundation of the legendary US oil dynasty Rockefeller plans to divest their funds from the fossil-fuel industry, as well.” “The risks of climate change affect everyone and everything. When the finance sector now divests billions from the fossil business, this does not only reflect a moral responsibility but also makes good business sense,” says PIK director Hans Joachim Schellnhuber, coinitiator of the Berlin conference. “While weather extremes increase already, many of the biggest climate impacts, like the consequences of sea-level rise, will become perceptible only after it would be too late to act. Therefore, it is important for the finance sector to recognize the warnings of science and to ramp up sustainable investments as soon as possible.

Aftermath of the historic Paris Agreement on climate change

“The Paris Agreement substantiates that the nations of the world aim at reaching zero emissions by 2050. This means we are now in year one of the Great Transformation. Whoever still invests in coal and oil will not only damage the environment but, eventually, also lose a lot of money,” Schellnhuber said. “As a global bank, it is of major importance to recognize the possible economic and social impacts of climate change, in order to better prepare us and our clients,” said Axel Weber, chairman of the Board of Directors of UBS Group AG. “The financial sector is working hard to lay the foundations for filling gaps in financing climate action and to support nations in delivering on

“While weather extremes increase already, many of the biggest climate impacts, like the consequences of sea-level rise, will become perceptible only after it would be too late to act. Therefore, it is important for the finance sector to recognize the warnings of science and to ramp up sustainable investments as soon as possible.” their corresponding commitments. We aim for a sensible long-term allocation of capital that is congruent with a low-carbon economy,” Weber emphasized. For his part, Christian Thimann, global head of strategy, sustainability and public affairs at AXA Group and vice chairman of the FSB Task Force on Climate-related Financial Disclosure, says: “Finance has an important role in addressing climate change, because it steers long-term investment. “Investors need to understand how companies address climate change in their strategies, which goes well beyond the current carbon footprint. Under the mandate of the G20 [Group of 20] and the Financial Stability Board, the Task Force on Climate-related Financial Disclosure seeks to develop consistent voluntary disclosures by companies and enhance investor understanding of climate-related business risks and opportunities. Such disclosures and better investor understanding will foster implementation of the COP21 [21st Conference of Parties] agreement.” Susan Dreyer, CDP country director for Germany, Austria, Switzerland, argued that: “Divestment is one of the most potent signals of investor discontent and can be a valuable method to manage portfolio risk, given climate risks are becoming more urgent every day. “Having built a platform for transparent and comparable climate strategies, into which 5,600 companies worldwide are voluntary reporting today, CDP knows of the impact investor engagement can unfold. “Shareholder resolutions or setting joint reduction targets are good examples. And yet, the clear signal from both civil society and investors that fossil-based business models do not have a future in the decarbonized world of 2050, is helpful and needed.” Among the distinguished speakers in the Berlin conference are Rainer Baake, state secretary at the Federal Ministry for Economic Affairs and Energy, Laurence Tubiana, French Ambassador for international climate negotiations at COP 21, Monsignor Marcelo Sánchez Sorondo, chancellor of the Pontifical Academy of Sciences, and high-ranking finance representatives, from the major bank HSBC to the central bank of the Netherlands and to the French Ministry of Finance. Our policy-makers must not lose sight on this great opportunity described above. To reach the writer, e-mail cecilio.arillo@ gmail.com.

Innovation Edgardo J. Angara

n 2014 the Asian Development Bank (ADB) and the Economist Intelligence Unit (EIU) launched a Creative Productivity Index (CPI) as a new way of rating a country’s innovation capacity.

The CPI looks specifically into how efficiently a country is able to convert its investments in its knowledge and skills base into “creative outputs,” like patents granted and studies published. Out of 24 mostly Asian economies surveyed in the report, the Philippines ranked a dismal 18th, measuring only a low-to-medium capacity for “creative productivity,” hence a limited ability to ensure long-term, sustainable economic growth. Among the factors dragging our score down were a rigid labor market; continuous brain drain, where nearly a million semiskilled and

skilled workers leave to work abroad each year; and a scientific enterprise system unable to provide the country’s best and brightest financial and social incentives to do science and technology academic degrees and remain working in the field. In 2011 there were only 165 research and development personnel for every million Filipinos, way below the United Nations Educational, Scientific and Cultural Organization (Unesco)-recommended 380 for every million for economic development. In a March 2016 white paper, the National Academy of Science and Technology (NAST) estimated that

Tuesday, July 26, 2016 A11

we need to graduate at least 3,000 new PhDs each year for the next 10 years “to meet Unesco’s critical threshold comparable to the more technologically advanced or progressive countries in the region.” Last week Dr. Caesar Saloma delivered the last of this year’s UP President Edgardo J. Angara Professional Lectures. He said that, while graduate enrollment in all fields increased by 67 percent between 2003 and 2015, the number of faculty members with PhD degrees grew by only 3.3 percent. He noted that up to 99 percent of all the higher-education institutions in the country are currently incapable of offering PhD programs in Science, Technology, Engineering and Mathematics on account of a lack of qualified faculty. This has been a perennial problem, rooted in our historical underinvestment in science and technology, as well as in research and development. But promoting innovation is not simply a matter of throwing money at the problem. More important, it’s a matter of laying down the right policies and enticing incentives.

For instance, a paper cited that cumbersome public procurement processes are at the root of why public research in the Philippines has hardly taken off and why very few of our talented youth pursue advanced careers in science. What we need is an entire ecosystem that supports innovation and creativity—including world-class academic programs, close universityindustry linkages and responsive government policy. Among the key players in the creativity game—the academia, industry, philanthropy and government—government should play the proactive conductor in knowledgebased value creation. But ours is largely indifferent. The 10-point Duterte socioeconomic agenda highlights the promotion of “science, technology and the creative arts, to enhance innovation and creative capacity towards selfsustaining, inclusive development.” In the next six years, we hope to see our government taking the leading role in the creativity game. E-mail: angara.ed@gmail.com.

New House Speaker hits the ground running Ernesto M. Hilario

ABOUT TOWN

ven before the 17th Congress had to officially convene and before President Duterte can deliver his first State of the Nation Address on July 25, Rep. Pantaleon D. Alvarez of Davao del Norte was chosen by his fellow lawmakers as the new speaker of the House of Representatives. In fact, Alvarez, who is said to enjoy the full trust and confidence of President Duterte, was already hard at work. In June Alvarez prepared two bills to amend certain laws—one seeking to reimpose the death penalty for heinous crimes, the other to amend the so-called Pangilinan law. Explaining the rationale for the bilI, Alvarez said: “The imposition of the death penalty for heinous crimes and the mode of its implementation, both subjects of repealed laws, are crucial components of an effective dispensation of both reformative and retributive justice. There is evidently a need to reinvigorate the war against criminality by revising a deterrent coupled by its consistent, persistent and determined implementation.” Alvarez is also the coauthor of another proposed bill seeking to amend Republic Act (RA) 9344, or the Juvenile Delinquency Act of 2006, more popularly known as the Pangilinan law. RA 9344 raised the minimum age of criminal responsibility from 9 to 15 years old, but Alvarez along with Rep. Fredenil Castro of Capiz wants to bring it back to 9 years old, as provided for in the Revised Penal Code. “While the intent of the law may

be highly laudable,” the two authors said, it has had the opposite effect of “pampering youthful offenders who commit crimes knowing they can get away with it.” Moreover, they said, “adult criminals knowingly and purposely make use of youths below 15 years of age to commit crimes, such as drug trafficking, aware that they cannot be held criminally liable.” Amid calls by some quarters for the two chambers of Congress to conduct a probe of the wave of drug-related killings in the last two months, Alvarez prefers to let the Lower House concentrate on its main task of making laws. There are more pressing matters that House members should focus on, he says. For instance, there’s the General Appropriations Act for next year. Since all the government offices will have already prepared their respective budgets for next year, lawmakers will have to go through all these with a fine-toothed comb to determine whether their proposed budgets are realistic and in accordance with their mandates.

Alvarez clarified there will be no restoration of the pork barrel or lump sum allocations for members of Congress. Instead, the legislature will implement line budgeting, where every district can propose projects for funding, such as water systems, hospitals, and so on. The budget to be allocated for projects proposed by congressmen will be equal in amount to be fair to all, he added. Then there’s the joint resolution by both chambers seeking to create a Constitutional Convention or Concon that would amend the 1987 Constitution to make it more relevant to changed conditions in the country. Among the proposed amendments are lifting the cap on foreign investments and thereby opening the economy to more foreign direct investments (FDI) that can create more jobs and reduce poverty incidence among Filipinos. Another key proposal is to shift to a federal system of government from the current unitary one, which, proponents claim, would lead to greater autonomy for the various regions and faster economic growth. For Alvarez, if a congressional probe reveals that indeed some of the killings may be instances of summary executions or extrajudicial killings, it can only recommend prosecution by the Department of Justice, which alone can determine probable cause. Besides, murder is already in the book of statutes and heavily penalized, so what new law or amendment to existing law would be served by a congressional probe in aid of legislation? The Davao solon said that Congress should leave to government prosecutors and to agencies like the National Bureau of Investigation and the police the task of going

The failure of Europe’s stress tests By Mark Whitehouse Bloomberg View

ater this week European regulators will report on stress tests designed to determine whether the region’s banking system could withstand a crisis. Judging from a separate indicator of financial strength, the truth is probably more than they can handle. The tests will focus on 51 banks in the European Union (EU) and Norway, subjecting them to an adverse scenario including a protracted recession and a sharp decline in commodity prices. The exercise is expected to be particularly unpleasant for Italy, highlighting the troubles of banks—such as Monte dei Paschi di Siena—that the government has been struggling to salvage. That said, as they have in the past,

the tests will probably fall short of revealing banks’ true vulnerabilities. Authorities have little incentive to be tough: The rules of the European Union’s banking union severely limit their ability to recapitalize weak institutions, so flunking a lot of banks could trigger panic rather than catalyze the desired healing process. This time around, the tests won’t even indicate which banks passed or failed. To get a sense of what a real stress test might look like, economists at the University of Lausanne’s Center for Risk Management have built their own reduced-form exercise, borrowing a model developed at New York University. Using publicly available data on banks’ balance sheets and share-price volatility, it estimates how much added equity financial institutions would need to avoid distress in a crisis.

For a group of more than 100 European financial institutions (including insurers and real-estate firms), the estimated capital shortfall stood at €1.2 trillion ($1.3 trillion) as of June 30. It hasn’t improved much since the darkest days of the financial crisis in 2009, and rose sharply around Britain’s vote to leave the EU last month. What to do? Actually, if European regulators hadn’t spent the last several years largely ignoring the weaknesses of the region’s banks, they could have achieved a lot. Since 2007 the 40 euro-area banks in the Euro Stoxx Banks Index have given about €400 billion back to shareholders in the form of dividends and stock buybacks—money that could have gone toward bolstering their capital positions. Instead, regulators are actually moving in the opposite direction: The

after those who may be involved in summary executions. Alvarez brings to the fourth highest position in government his extensive experience in public office. This is Alvarez’s second stint in Congress representing the 1st District of Davao del Norte. During his first term as congressman of the same district from May 1998 to January 2001, he was the vice-chairman of the House Committee on Transportation and Communications and a member of the following committees: Government Enterprises and Privatization; Government Reorganization; Good Government; Justice; Constitutional Amendments; Civil, Political and Human Rights; National Defense; Ways and Means; and Games and Amusement. Alvarez also held the position of Secretary of the Department of Transportation and Communications from January 2001 to July 2002. Prior to this, Alvarez also served in various capacities at the Manila International Airport Authority. He was Senior Assistant General Manager and COO from March 1995 to September 1997 and Assistant General Manager for Operations from January 1994 to February 1995. Alvarez began his career in the public service as the Senior Technical Assistant and Liaison Officer for Region XI at the office of Sen. Wigberto E. Tañada in the Senate from 1987 to 1992. Alvarez was a practicing lawyer from 1984 to 1986. He completed his Bachelor of Laws course at the Ateneo de Manila University in 1983. He graduated from the Far Eastern University in 1978 with an AB Political Science degree.

E-mail: ernhil@yahoo.com.

Bank of England announced earlier this month that it would ease capital requirements in the wake of the Brexit vote. This regulatory meekness helps explain the European economy’s lackluster performance. As researchers at the Bank for International Settlements have demonstrated, bettercapitalized banks tend to borrow at better rates and lend more, improving the effectiveness of central banks’ efforts to stimulate growth. In other words, if authorities had acted faster to shore up the financial system, the European Central Bank might not be having such a hard time getting the economy out of the doldrums. Avoiding the truth has consequences. If Europe’s leaders want to get their financial system and economy out of the mess they’re in, a reckoning is long overdue.

2nd Front Page BusinessMirror

A12

Tuesday, July 26, 2016

www.businessmirror.com.ph

Australia asks Beijing, Manila to respect ruling

ustralian Foreign Minister Julie Bishop has called on China and the Philippines to abide by The Hague-based tribunal’s arbitration ruling on their dispute in the West Philippine Sea (South China Sea), which went in Manila’s favor. Bishop spoke on Monday after holding talks with foreign ministers from the 10-member Asean. She noted that the ruling earlier this month “is final and binding.” Bishop urged both countries “to reengage to resolve the differences.” She said that how the arbitration outcome is handled “is an important test for how Asean can help manage disputes peacefully.” China has rejected the ruling, saying it is willing to have bilateral talks with the Philippines to resolve the dispute but will not allow outside intervention. Other Asean partners, including India and the United States, are also holding talks with Southeast Asian ministers. China’s foreign minister says he has held “positive” talks with his Southeast Asian counterparts that came less than two weeks after an international tribunal ruled that Beijing’s expansive claims in the South China Sea are illegal. Foreign Minister Wang Yi said his meeting on Monday with the top diplomats from the Asean “was conducted on basis of mutual re-

spect and mutual trust and in a positive spirit.” He said “80 percent of the time was spent on discussing cooperation. Some members also made remarks about the situation in the South China Sea. I would say that discussion was about 20 percent of our time.” Earlier in the day, the Southeast Asian foreign ministers delivered a watered-down rebuke to China for its territorial expansion in the South China Sea, failing to mention the July 12 ruling by The Haguebased arbitration panel. Wa ng sa id in his meet ing with the Asean ministers, “only one country mentioned the arbitration case. That’s why Asean said it has no comment on the arbitration case.” Meanwhile, US National Security Adviser Susan Rice held talks with Chinese officials Monday in the highest-level visit by a White House official since an international tribunal issued a ruling that invalidated China’s expansive claims in the South China Sea. The tribunal’s July 12 ruling delivered a victory to the Philippines,

Legislative agenda. . . “That way, their activities would be subject to legislative oversight, and their franchises can be revoked by the oversight body instead of a probably bribable bureaucrat in an obscure DENR [Department of Environment and Natual Resources] office if they violate the terms and conditions thereof,” the speaker said.

Foreign Secretary Perfecto R. Yasay Jr. (left) shakes hand with Chinese Foreign Minister Wang Yi during the Asean-China Foreign Ministers’ Meeting in Vientiane, Lao PDR, on Monday. AP

a US ally, but angered China and appears set to heighten regional tensions. The US, whose navy patrols the waters, has called on China to abide by the ruling, while also urging calm. The topic was not raised in opening remarks in front of reporters at Rice’s meeting with China’s top diplomat, State Councilor Yang Jiechi. On Monday Rice told Yang that

Continued from A1

“Also, we would like to ensure that these companies do not export the ores they mine. Processing or semiprocessing of these ores should be done within the Philippines. This is one way to give jobs to our people, instead of enriching only the stockholders of mining companies,” he added.

the US and China have been cooperating more closely on global issues, such as nuclear nonproliferation and the Ebola epidemic. She acknowledged that the sides also faced other “global issues and challenges.” “To the extent that we are able to surface those challenges in candor and openness, I’m confident that we will be able to work

on them, as we have many others in the past,” Rice said.

The arbitration outcome is an important test for how Asean can help manage disputes peacefully.”—Bishop

Anticrime measures

Emergency powers

He said the lower chamber will prioritize the passage of anticrime bills. “We must reimpose the death penalty for heinous crimes. Among Asean members, only Cambodia and the Philippines have no capital punishment; all the other eight countries impose death penalty in various forms and for various crimes,” he said. “As the President has said, it is a simple universal law of karma: if you borrow from me a thousand pesos, then you must pay back the same amount, plus interest. If you take a human life, especially if you do it deliberately and with premeditation, you must pay with your life. If, by being a drug lord, you destroy the lives and futures of a thousand people, then you must pay accordingly,” Alvarez added. According to the lawmaker, the same philosophy is behind the move to revert the minimum age of criminal responsibility from 15 to 9 years old. “This is not, as critics say, a throwback to a barbarian age. The age of exemption from criminal responsibility in Singapore is 7, the same age as in most states in the US. The Pangilinan law was, admittedly, motivated by noble intentions,” he said. However, he added that the law has been a failure on the ground. “We must teach our young that there are consequences for everything we say and do. Coddling teenagers by making them immune from crimes they commit will only breed a culture of impunity. We should, instead, build a culture of responsibility at an early age,” he said. Alvarez is the principal author of the bills reviving death penalty and lowering the age of criminal responsibility to 9.

Alvarez said granting President Duterte emergency powers will address traffic problems in Metro Manila. “As all commuters know, and that includes all of us here, the traffic in Metro Manila and Metro Cebu is simply terrible. We waste so many hours sitting in cars or buses or riding in jam-packed and rickety MRT and PNR trains, instead of spending time at work or being with our families at home. P2.4 billion a day is lost to traffic alone. The situation is, in most certain terms, a true crisis that needs emergency powers to enable the President to act,” he said. Lawmakers have already filed bills granting Mr. Duterte emergency powers to solve the traffic situation in the capital. Also, the Speaker said Congress should also revisit and revise the Government Procurement Act. “Since its passage into law, many government agencies, as well as those in the private sector, have felt discomfited with RA 9184, as amended. Unlike a free-size shirt, the procurement law should not be a one-size-fits-all kind of law. We should put in enough flexibility to address all foreseeable possibilities that may arise in the course of government procurement,” he said.

Con-con Alvarez said the lower chamber will prioritize the revision of the 1987 Constitution through constitutional convention (Con-con). “Of course, the holy grail of all: the revision of the 1987 Constitution and the transformation of our system of government from a unitary presidential form to a federal parliamentary one. The unitary and highly centralized form of the government was imposed on us by the colonizing power of Spain and the United States of America, and for one reason—total control over the country,” he said. “The results have been stunted growth in about 80 percent of our country, and the overdependence of local government units [LGUs] on the national government. The power of Imperial Manila over the rest of our nation has to end. Our LGUs need to be allowed to stand on their own feet and to develop and grow as they see fit, subject only to standards that the national government may set. This, among others, should be done by a constitutional convention within a time limit set by Congress,” Alvarez added.

Yang said that the sides had stable relations, but that there were still differences that had to be carefully managed. Rice met later with top general Fan Changlong, who told her the sides still faced “obstacles and challenges.” “If we don’t properly handle these factors, it will very likely disturb and undermine this steady momentum of our military-tomilitary relationship,” said Fan, who serves as vice chairman of the ruling Communist Party’s Central Military Commission. Rice pointed to the increased communication between the sides that she said has reduced the possibility of conflict, even while their militaries operate in closer proximity than ever before. Despite such progress, “we have challenges and differences to discuss and to manage,” Rice said. Rice’s visit is also aimed at preparing for US President Barack Obama’s trip to China in September to attend the leaders’ summit of the Group of 20 major economies. Rice will also visit Shanghai and meet with business executives to discuss challenges that US businesses face, while operating in China, according to a statement from the US National Security Council. AP

FOI Despite the signing of an executive order on freedom of information (FOI), Alvarez said the lower chamber has yet to pass an FOI bill. “The President has started the ball rolling in the direction of greater transparency in the government with an executive order on freedom of information. We should do our part and enact a meaningful Freedom of Information law applicable to all branches of the government. The greatest crimes are committed in dark secrecy,” he said. “A Freedom of Information law will bring the light of truth and transparency into the government transactions,” he said.

Labor, pension According to Alvarez, the country’s labor laws also need revision. “We should increase the penalties currently in our statutes for the nonpayment of minimum wage, and the National Wages and Productivity Commission and the DOLE [Department of Labor and Employment] should have an arm that will make sure violators are prosecuted. The practice of Endo should be looked into. Manpower-supply agencies should be mandated, upon pain of criminal liability, to comply with all labor standards on wages and benefits, and the employer be made solitarily liable,” he said. As for social security, Alvarez said it is only right and just that the pensions of our retirees should be adjusted upward so they can buy their groceries and their medicines at today’s prices. “If we need to increase contributions so we

can fund the increase in pension benefits, then we must. We must adjust not only to meet present needs but also to anticipate future needs,” he said. If this legislative agenda seem overly ambitious to some, Alvarez said it is the product of inertia. “A body at rest tends to rest indefinitely and will resist movement. But we should not be like the admiral who, because he feared the big waves of the Pacific and the journey into the unknown, dropped anchor in a harbor and held office there,” he said. Meanwhile, newly installed Senate President Aquilino “Koko” Pimentel III confirmed on Monday the 20 senators belonging to the majority bloc in the 24-member chamber have forged a consensus to facilitate passage of an 11-point legislative agenda topped by the adoption of a federal system of government. Pimentel said their priority legislative agenda includes remedial legislations to reinforce the Duterte administration’s all-out war against criminality and illegal drugs, as well as graft and corruption. He added to the list “tax reforms; sustainable and inclusive economic growth; quality education and health care; environmental protection; and increased government assistance to the helpless and impoverished members of Philippine society.” “As the President puts it,” Pimentel said, “the introduction of genuine and meaningful change is the purpose of his administration,” which the majority senators have committed to support. At the same time, the new Senate President assured that senators will remain “open to suggestions coming from the people” for the enactment of certain legislations that will promote the general welfare and enhance the common good. He, likewise, affirmed the Senate will extend full support to “the legislative initiatives that President Duterte envisions as necessary to promote the public welfare.” “I am, therefore, putting on record the essential elements of the program of government of change that your majority senators have agreed upon, that will, hopefully, lay the basis for the development and progress of our country and people: We dedicate ourselves to the all-out search for peace in our land; we will move for the adoption of a federal system of government; we support the all-out war against crime, drugs and corruption; we will reform our taxation system and make it more just and truly progressive; we will strengthen the rule of law and make our justice system works; we will reform the budget and declare a war on waste; we call for sustainable and inclusive economic growth; we will protect the environment; we will deliver quality education and quality health care; we will fight abuse and the abusive; we will focus on the needs and the situation of the helpless and impoverished members of Philippine society, especially the sick, the elderly and the children, because they need the help of the government more than the others,” Pimentel said before senators on Monday. Jovee Marie N. dela Cruz