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Wednesday, June 22, 2016 Vol. 11 No. 256

50-YR JVA SHOWS DUTERTE IS OKAY WITH UNSOLICITED PROPOSALS

Duterte inks first PPP deal of Davao

By Alberto C. Agra

INSIDE

D

Special to the BusinessMirror

avao City—Before he steps down as city mayor, incoming President Rodrigo R. Duterte signed a landmark contract with the private sector on Tuesday worth about P39 billion.

Vertis North takes big-city lifestyle to the next level

₧39B The cost of the Davao Coastline and Port Development Project

On the sidelines of the end of the two-day business summit in Davao, the President-elect signed a public-private partnership (PPP) contract with a Continued on A12

P25.00 nationwide | 5 sections 32 pages | 7 days a week

BIR plugs loophole in tax-appeal cases

By David Cagahastian @ davecaga

I

nternal Revenue Commissioner Kim S. Jacinto-Henares has closed yet another loophole taxpayers use to invalidate tax-deficiency assessments against them that should have already become final and executory.

In issuing Revenue Memorandum Order (RMO) 26-2016, Henares outlined the new process to be followed in handling disputed assessments. The new process hardly changed the former process, but now has a measure against taxpayers invoking the defense that they did not receive any assessment notice from the Bureau of Internal Revenue (BIR), which is a

requirement of due process.

Under the new RMO 26-2016, the lapse of the period to appeal an assessment that was mailed to the address on record of the taxpayer would be enough for such assessment to become final and executory.

This closes a loophole used by taxpayers in trying to appeal taxdeficiency assessments that have already become final, executory and demandable because of the lapse of the period to appeal.

Pacquiao case

In the P2-billion tax case against boxing icon and Senator-elect Emmanuel D. Pacquiao, one of the issues resolved by the Court of Tax Appeals (CTA) was See “BIR,” A2

BMReports

K to 12

Whither Philippine education? property

E1

PHL’s richest availing of property investments in Portugal, Malta

property

E2

Circulo Verde welcomes residents to Lleida

Gerardo Aquino teaches Grade 11 students at the Manuel A. Roxas High School in Paco, Manila, who are taking up Cookery in the Home Economics strand of the Technology-Vocational-Livelihood track of the Department of Education’s K to 12 Program. ROY DOMINGO

By Dennis D. Estopace & VG Cabuag @DennisEstopace

T property

E2

@villygc

Conclusion

HIS country has always relied upon teachers to get things across: across mountains to teach under trees; across a phalanx of goons to protect ballot boxes; and crossing out misfits, some of whom, unfortunately, become government officials.

Not a few teachers have been placed on the cross—killed in the name of a “New Society.” Many would

PESO exchange rates n US 46.3630

25,090 The total number of teaching and nonteaching staff of higher-education institutions who would be displaced with the implementation of the K to 12 Program, according to the CHEd.

become jobless in the name of reform in the education system, popularly known as the K to 12 Program.

A Commission on Higher Education (CHED) report, titled “Investing in the Future of Higher Education,” admitted that the K to 12 tack, “the flagship education-reform program of the Aquino administration,” would affect the employment status of teachers and nonteaching personnel. Such would occur because of reduced enrollments in higher-education institutions (HEIs) for five years, from 2016 to 2021.

Continued on A2

n japan 0.4462 n UK 68.1722 n HK 5.9745 n CHINA 7.0461 n singapore 34.5297 n australia 34.5729 n EU 52.4736 n SAUDI arabia 12.3671

Source: BSP (21 June 2016 )

BMReports BusinessMirror

A2 Wednesday, June 22, 2016

www.businessmirror.com.ph

K to 12

Whither Philippine education?

Continued from A1

According to the CHED report, about 19.8 percent, or 11,456, of a total 57,718 permanent and nonpermanent nonteaching staff in HEIs would be “displaced.”

The CHED report also revealed that a total of 13,634 permanent and nonpermanent teaching staff would be “displaced” from employment. This figure is about 12.4 percent of the total 109,896 teaching staff in HEIs. Some of them are in Miriam College. And some have already felt the brunt of the impact of the K to 12, even before Republic Act 10533, or The Enhanced Basic Education Act of 2013, was signed into law in 2013.

Road to Calvary

DOCUMENTS provided by the Miriam College Faculty Association (CFA) bared the Catholic HEI has prepared for the K to 12 Program beginning 2011.

“Miriam College has been studying the impact of K to 12, as well as identifying and trying out options to address its adverse effects, particularly on our faculty who teach GE [general-education] subjects,” a statement by the HEI said.

In July of the succeeding year, the college’s Vice President for Academic Affairs (VPAA) Glenda Fortez appointed Rebecca T. Añonuevo to head a committee focused on GE. Documents provided by the CFA said this committee was tasked to create the course content of new GE courses under the K to 12 Program. The committee bared its report on the scenarios under the K to 12 Program by September 2012.

The GE curriculum, to note, was already 16 years old that time, as this component of higher academic program was created in 1996 by the CHED. The other component is the Professional Education Curriculum.

In 1996 the CHED issued Memorandum Circular 59, which set the minimum requirements for the mandatory GE Curriculum (GEC) for undergraduate degrees to 63 units.

A subsequent MC, No. 4, in 1997 ordered an alternative curriculum

(GEC-B) that reduced the minimum requirements to 51 units, from the 63 units classified as GEC-A.

By March 2014, the CHED released a new GEC covering 24 units of core courses, nine units of electives and three units of Life of Rizal, a subject mandated by the Rizal law. This move by the CHED reduced the total units of GEC-A courses by about half (36 units).

The reduction in the number of units would lead to the displacement of an estimated 25,090 workers— teaching and nonteaching staff of HEIs—according to the CHED.

Mitigating impact

THE implementing rules and regulations (IRR) of RA 10533 has acknowledged the “potential reduction or absence of college graduates to meet the human-resource requirements of industry.”

The reduction would be seen in the decrease or loss of students applying as freshmen in HEIs. Section 31 of the IRR also noted the need to ensure “the sustainability of the private and public educational institutions, and the promotion and protection of the rights, interests and welfare of teaching and nonteaching personnel.”

Documents provided by the Miriam CFA showed the association already proposed to VPAA Fortez as early as January 2014 some options the college can take to ease the impact of the K to 12 Program on the institution’s personnel. The proposals included options for professors and instructors to implement a variety of training programs, continue further studies, conduct research or go on sabbatical while Miriam College is in transition under the K to 12 Program.

By June of that year, the office of the Miriam College VPAA organized a seminar-workshop on the new GEC. Permanent Miriam College faculty members from the GE and program rosters, or those teaching major subjects, participated in the development of course contents for the new GE courses.

Letting go

SIX days after the seminar work-

shop in 2014, the Miriam College administration team, led by its president, Rosario O. Lapus, announced the mandatory Early Separation Program (ESP) for all GE faculty, including those teaching Physical Education, Theology and Social Sciences.

The CHED has deemed Theology and History—taught by Social Sciences teachers—as not classified as GE subjects. To note, Theology is at the core of Miriam education.

A memo from Lapus in October 2014 revealed plans to “house the new campus for senior high-school program and pioneering industries” in Porac, Pampanga.

The memo also cited Miriam College would explore opportunities and strategic partnerships with Ayala Land Inc. (ALI), the Quezon City local government and the Carlos Palanca Foundation Inc. It was also this year when Miriam College opened a campus in Nuvali, an ALI property in Santa Rosa, Laguna.

It was during this year the retrenchment was announced.

According to a statement by the Miriam College, those who would avail themselves of the severance package, or the ESP for school year 2014 to 2015 would each receive 110 to 120 percent “of a month’s pay for every year of credited service, based on average unit load from date of hire to date of separation.”

The school also threw in scholarship for children studying at Miriam College for school years 2015-2016 and 2016-2017.

For the next school year, in 2015 and 2016, when all identified professors and instructors are fully retrenched, each teacher would receive 80 percent or 100 percent the monthly equivalent of their respective salary for every year of service. Teachers were also offered the option to re-engage as parttime teachers.

“After the implementation of the program, the faculty may opt to apply for teaching in senior high school; apply for part-time teaching at the college; and engage in research and training projects, when enrollment would have stabilized,” the Miriam College said in a statement.

Separation blues

IN a statement, the Miriam CFA said it attempted and initiated dialogues with the administration to clarify, among other issues, the criteria used for the early separation program, as there are GE faculty members who were not included on the list.

The CFA said some of these faculty members include those who have term administrative assignments, such as the Registrar, the Language Learning Center program officer and the associate dean for Student Affairs.

Mir iam administrators insisted that the criteria they used was nondiscriminatory, and that the retrenchment program would be enforced.

Seven teachers took the severance package in January last year. Three of them accepted the reengagement offer, and one was hired on a contractual basis as an information-technology staff, documents provided by the Miriam CFA showed.

Last year Miriam College announced it will let go 30 of its tenured, or permanent, faculty members, including those teaching Theology and Social Sciences. Five of them are English teachers, including Añonuevo, who has taught at Miriam College for two decades and the president of the CFA. “The school designed the separation package for affected faculty so that it would be generous enough to help them during the difficult phase of transition,” Miriam College Board of Trustees Chairman Josefina N. Tan said in an April 4 letter to Añonuevo.

Packages offered

IN April some members of the Miriam College faculty teaching GE were asked if they are willing to be nominated for a CHED grant offered to teachers who will be affected by the K to 12 Program.

The said grant will come from the CHED transition fund giving scholarship assistance only for tenured faculty members.

The same faculty members were asked if they are going to reengage, since such status is required

for them to be nominated for the CHED grant.

According to the CHED report released last year, the “development grants” are only for retained personnel. These grants, the CHED report said, will allow HEI faculty and staff to have “lighter workloads during the K to 12 transition period [from 2016 to 2021].”

Called “development packages,” the CHED said these include development grants for faculty and staff, innovative grants for institutions and scholarships for graduate studies.

“Of the retained, there are 38,841 full-time faculty who are 19 to 47 years old, and are thus possible candidates for scholarships,” the CHED report said.

The CHED also aims to send 7,921 faculty for Masters degrees and 6,853 for Doctorate in Philosophy degrees.

Of the 23 remaining teachers of Miriam College, two were due for actual retirement having reached the age of 65 years. So far, a dozen of the remaining teachers have taken the offer of early separation. The other nine have yet to take the package.

These teachers were given letters notifying them of retrenchment effective June 13.

Teachers teach

AÑONUEVO has filed a complaint of illegal termination and nonpayment of wages and benefits for June and July 2016 against Miriam College.

Last year she was slapped with a libel case filed by Ma. Concepcion Lupisan, officer in charge of the Miriam College Finance Depart-

BIR. . .

Continued from A1

whether the appeal filed by Pacquiao was filed on time.

The BIR had earlier moved to dismiss Pacquiao’s petition on the ground of prescription, arguing that the Final Decision on Disputed Assessment (FDDA) served by BIR agents to Pacquiao’s office at the House of Representatives was“constructive service” of such FDDA to Pacquiao himself, although he did not personally receive such notice but only through his staff.

Pacquiao’s defense in the BIR’s motion to dismiss his appeal before the CTA was that the 30-day period to appeal the FDDA to the CTA begun only after he had personally received the FDDA, and not when his staff at the House of Representatives received it from the BIR agents. The BIR served the FDDA at Pacquiao’s office in May 2013, while Pacquiao filed his appeal before the CTA only in August 2013, or more than two months after the FDDA’s “constructive service” through Pacquiao’s staff at the House of Representatives.

The CTA eventually denied the BIR’s motion to dismiss Pacquiao’s appeal, brushing aside the BIR’s argument that the FDDA had already attained the status of being final, executory and demandable after the lapse of the 30-day period to appeal.

Usual defense

The BIR’s lawyer in Pacquiao’s case said it was a usual defense for a taxpayer to say that he did not personally receive the FDDA so that he would still be able to appeal the assessment before the CTA even after the lapse of the 30day period to appeal.

“When a taxpayer fails to appeal on time, yes, it’s common for them to give the excuse that they did not receive these documents,” lawyer Felix Velasco said in a text

ment. The libel case came after Lapus, during a meeting, warned Añonuevo and CFA members not to involve students and the media as Miriam College tackled the future of its personnel.

Tan, who is also president of BDO Private Bank Inc., reminded Añonuevo in her letter: “While we respect freedom of expression, we demand that all future discourse be civil and constructive.”

Meanwhile, the college has hired part-time faculty to teach GE subjects, including English, Literature Filipino, History, Rizal and Math for the summer classes, which began in the middle of the month.

This year would be the second that Miriam College begins its new school-year calendar starting August. The school has appointed a new dean for its College of Arts and Sciences.

An educator of a Catholic HEI told the BusinessMirror the experience of Miriam College faculty is shared by five other HEIs. Like Miriam College, the person familiar with the CHED implementation of the K to 12 Program said these schools expect a drastic drop in enrollment, which would continue for the next five years.

This country has been kind to teachers since 500 American teachers onboard the USA Thomas arrived more than a century ago on Manila Bay on August 21, 1901.

With the K to 12 Program, that kindness is being put to a test, a crucible that can make or break the future work force badly needed for the growth of industries and, hopefully, the Philippine economy.

message to the BusinessMirror.

Velasco used to head the litigation department of the BIR, and is now connected with the BIR’s Enforcement and Advocacy Service.

And once this issue of whether the appeal was filed on time be resolved in favor of the taxpayer, it prevents the government from collecting on the tax deficiency assessment until the case is finally resolved by the courts.

Evidentiary rules

There is a presumption under the law that a letter duly directed and mailed was received in the regular course of the mail.

But under current jurisprudence, this presumption can easily be disproved by the mere denial by the taxpayer that he did actually receive such mail. Thus, the burden of proving the receipt of the mail shall fall upon the party asserting such fact.

However, under Henares’s new RMO 26-2016, she created another presumption that assessment notices sent to the address on record of the taxpayer is deemed received and shall ripen into a final, executory and demandable tax-deficiency assessment after the lapse of the period to appeal.

Under Section II, Paragraph 15 of RMO 26-2016, even the failure of the taxpayer to receive the assessment notices can be a ground for the assessment to become final and unappealable if the notices were sent to the taxpayer’s address on record.

The provision said that “failure of the taxpayer to receive any assessment notices because it was served in the address indicated in the BIR’s registration database and the taxpayer transferred to a new address or closed/ceased operations without updating and transferring its BIR registration or canceling its BIR registration as the case may be” is a ground for the assessment to become final, executory and demandable.

BMReports BusinessMirror

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Wednesday, June 22, 2016 A3

Govt to help banana exporters meet China’s stringent food-safety rules

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By Mary Grace Padin

@ _enren

he government will soon roll out interventions to help exporters of Cavendish bananas meet food-safety standards set by foreign buyers such as China, according to the Bureau of Plant Industry (BPI).

BPI Plant Product Safety Services Division (PPSSD) chief Malou de Mata told the BusinessMirror the agency is currently preparing training programs to educate exporters about pesticide-residue limits.

The government decided to assist ex porters, after China started suspending traders who delivered bananas that contained Carbendazim, a fungicide used for fruits. The shipments had Carbendazim levels that reportedly exceeded Beijing’s maximum residue limit (MRL).

“Just this year, China has detected four shipments of bananas,

which had residues of Carbendazim exceeding the 0.1 milligram per kilogram allowed by [Beijing],” de Mata said.

“China has more stringent quality and food-safety standards than the Philippines, whose MRL for Carbendazim is at 3 mg per kilogram,” she added.

Training modules

De Mata said the BPI is preparing to conduct training programs on the different MRL standards implemented by different countries.

“Farmers know where their produce will go; they should also know the standards set by these

countries,” she said.

Smallholder banana farmers are the main beneficiaries of the training programs, as big plantations already have the capacity to address the problem, according to de Mata.

The BPI is also gearing up for the possible conduct of random pesticide-residue testing in local plantations before bananas are shipped to China.

“There should be monitoring.

Not necessarily for all shipments, but residue should be monitored.

Not only for the international market, but also for the domestic market,” BPI Sanitary and Phytosanitary Section Head Laarni Mary S. Roxas said.

De Mata noted that mandatory pesticide-residue checking is already being conducted on mango exports to Japan under a bilateral agreement. However, she said it would be challenging to implement this on bananas, as it is “too costly.”

“We can do it randomly. We will check residues, mostly from small plantations. Another problem is how we will organize these small farms,” she said.

According to de Mata, the Department of Agriculture (DA) has

Killings of environmentalists up 60% in 2015, report says A London-based advocacy group said on Monday it documented 185 killings of environmental activists around the world last year, nearly 60 percent more than in 2014 and the highest since it began collecting data dating back to 2002.

In a newly released report, Global Witness said Brazil topped the 16-country list, with 50 environmental defenders slain in 2015, followed by the Philippines, with 33; and Colombia with 26. The group tsays 116 were slain worldwide in 2014.

Last year “was the deadliest year on record for killings of land and environmental defenders — people struggling to protect their land, forests and rivers,” the report said.

Conf licts involving mining, agribusiness, hydroelectric dams and logging are behind most of the killings, which average more than three a week, it added.

Those who oppose such projects are “finding themselves in the firing

33

The number of environmental defenders killed in the Philippines last year

line of private security companies, state forces and a thriving market for contract killers,” Global Witness said.

Firefights and killings around land disputes are common. Last week an indigenous land activist was killed and several others were injured in Brazil’s southwestern state of Mato Grosso do Sul when their camp was attacked by armed farmers, authorities said. The group had set up a camp to demand that claims to ancestral lands be recognized by the government.

The 50 environmental defenders killed in Brazil last year is nearly double the number slain in the country in 2014. Most of the killings occurred in the Amazon states of Maranhao, Para and Rondonia, where “agribusiness companies, loggers and landowners hire hit men to silence local opposition to their projects,” the report said.

Brazil’s Justice Ministry did not immediately respond to a request for comment.

Marcio Astrini, public policy coordinator for Greenpeace in Brazil, attributed the killings to a lack of government presence in areas where land conflicts and deforestation are taking place.

“I believe that we will continue leading this ranking until the government solves the problems in the region,” Astrini said. “Threats against defenders of the environment and those who represent rural workers and indigenous peoples will continue to grow, and I fear more will be murdered.” AP

Gina Lopez accepts DENR chief position

By Claudeth Mocon-Ciriaco Correspondent

A

FTER “much introspection,” ABS-CBN Foundation Chairman Gina Lopez accepted the position of secretary of the Department of Environment and Natural Resources (DENR) offered to her by Presidentelect Rodrigo R. Duterte.

“Nagulat nga ako eh, because I’m not the usual choice. My stand on the environment is very clear but this is what I really believe in, na kung alagaan ang kalikasan at kung gawin sa paraan na may pakinabang ang komunidad na doon nakatira, I am very, very sure we can eradicate poverty,” Lopez said in an ambush interview with the media on Tuesday evening, after the Excellence in Educational Transformation Awards held in Dolphy Theatre, ABS-CBN Compound in Quezon City.

She said she already informed

Duterte about her decision. She revealed she was not expecting the appointment for she just had a meeting with Duterte to discuss about the environment.

“He then offered the position to me.

I just said I am seriously considering it,” she said.

“I just talked to him few minutes ago,” she said, adding she is also ready to face critics and talk to promining groups. Lopez is the daughter of the late ABS-CBN Chairman Emeritus Eugenio Lopez Jr. Earlier, Duterte promised the Left he would choose his environment secretary from their list of nominees. See related story on B6.

Meanwhile, 39 natural caves across the country have been placed under the protection and management of the government, the DENR said.

The agency recently classified an additional 39 caves, bringing to 454 the total number of caverns that are now

part of the country’s natural wealth and, therefore, require sustainable management and protection.

Environment Secretary Ramon J.P. Paje said the classification, as embodied in Memorandum Circular 2016-05 that he signed, was necessary to ensure that the caves would be “preserved and properly enjoyed by the public.”

“The directive will help enhance public awareness and appreciation that caves are part of our natural resources because of their significance as ecosystems, which host various forms of wildlife,” Paje said.

“It also helps protect the geological, archaeological, historical and cultural values these caves carry, and helps sustain them for the enjoyment of future generations,”he added. The 39 caves are distributed as follows: six in the Cordillera Administrative Region; seven in Ilocos region; two in Cagayan region; 15 in Bicol; three in Davao del Norte province; and six in Region 12. With PNA

already been allowed to send a team to China to gain insight on how banana exports are inspected.

For her par t, Roxas urged the government to strictly implement Memorandum Order (MO) 40, or the “Regional Accreditation Screening Committee Members for Cavendish Banana Exporter Accreditation.”

“We should always look at MO 40, in case there are lapses in the system,” she said.

Banned

Currently, Roxas said 27 Filipino traders cannot export bananas to China, including four companies whose shipments did not meet the MRL standards of Beijing. Most of the traders were barred from exporting bananas due to the presence of mealy bugs in their shipments.

While the BPI is already assisting these traders, Roxas said the ban will stay until they implement measures to manage pests and address the overuse of pesticides.

After Carbendazim was first detected in the country’s exports, de Mata said local plantations have been advised by the PPSSD not to use the fungicide.

“We have notified the planta-

tions where the shipment originated to stop using Carbendazim,” she said.

The BPI’s Plant Quarantine Service Division, for its part, said it has sent a team to inspect banana plantations and packing facilities in Davao.

The two BPI divisions are required to report to China about the corrective measures they have implemented. China will evaluate if the measures are appropriate before the ban is lifted.

Roxas said the agency’s Chinese counterparts were invited to visit the Philippines and inspect the banana plantations and facilities themselves.

Pilipino Banana Growers and Exporters Association Executive Director Stephen Antig told the BusinessMirror banana exports

to China remain steady, despite Beijing’s “rigid policies.”

Data from the BPI showed that banana exports to China increased by 44.67 percent to 697,937.38 MT in 2015, from the 2014 figure of 482,441.04 MT. However, Antig expressed apprehension that the country’s share in the Chinese market for bananas could go to new players if local traders will continue to have problems with nontariff barriers, such as pesticide limits.

“Hopefully, through constant diplomatic discussions, this challenge can be resolved,” he said.

“We just have to ensure that the bananas we export are of the best and higher quality. This means it should also be in accordance with Chinese food-safety regulations,” Antig added.

697,937 MT The volume of bananas exported by Philippine traders to China in 2015

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PHL to host MTV event for second year

By Ma. Stella F. Arnaldo

HE Philippines will be hosting once more the MTV Music Evolution that will bring together the biggest names in local and international music scene, as part of the celebration for Visit Philippines Again 2016 (VPA 2016).

It signals the country’s determination to compete more actively for our rightful share of tourist traffic, receipts and events.”—Enerio

Sponsored by the governmentrun Tourism Promotions Board (TPB), MTV Music Evolution 2016 will be held on June 24 at SM Mall of Asia Concert Grounds. TPB is the marketing arm of the Department of Tourism (DOT).

In an interview with the BusinessMirror, TPB COO Domingo Ramon C. Enerio III said: “The hosting of the MTV Music Evolution Manila for the second time in two years is testament to the DOT-TPB’s continuing desire to aggressively position the Philippines as a premiere events venue in Asia. It signals the country’s determination to compete more actively for our rightful share of tourist traffic, receipts and events.”

The DOT has projected some 6.5 million foreign visitor arrivals for 2016, lower than its original 10million target.

Among the talents participating

Hoefer will be hosting the event, along with MTV Pinoy VJs Yassi Pressman and Andre Paras.

Asked to comment on the security aspect of the MTV event, on the heels of the tragic drug-related deaths at a recent concert hosted by a toothpaste company, the TPB chief stressed: “Organizers have been instructed to ensure the event will be peaceful, fun-filled and drug-free.

All measures have been adopted to maintain peace and order, including the deployment of 60 K-9 dogs, 200 police officers and additional private security personnel inside the concert grounds and around the immediate perimeter of the venue.” Enerio also appealed to the attendees of the MTV event “to cooperate fully with security officials, so we can have joyful and uneventful celebration on June 24.”

The MT V Music Evolution:

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@Pulitika2010 Special to the BusinessMirror

in the MTV Music Evolution 2016 are: Los Angeles-based electric dance trio Far East Movement; Filipino pop superstar Gary Valenciano and his son, Gab Valenciano; iconic international pop band and prolific hit-maker OneRepublic; Billboard Hot 100 artist and American singersongwriter Bebe Rexha; South Korea’s favorite K-pop idol female group Apink; and local pop darlings James Reid and Nadine Lustre.

Enerio explained the event would enable fans to experience and discover the evolution of pop music and its dance influence that keeps fans moving.

Recorded live for global telecast under the MTV World Stage global series, MTV Music Evolution Manila 2016 will reach an international audience of more than 750 million households in over 160 countries.

MTV Asia VJs Alan Wong and Hanli

Manila Asia Special premieres on Channel MTV on Tuesday, July 19 at 4 pm in the Philippines and Singapore, and will be aired in other parts of the globe at different times.

Viacom International, a division of the listed Viacom Inc., owns and operates MTV. The latter is a premier youth entertainment brand, which originated in the 1980s as a 24/7 cable-TV channel featuring music videos of singers and bands, and youth-oriented TV shows.

VPA 2016 is the anchor marketing campaign of the DOT and TPB this year. “Visit the Philippines Again 2016 is going to be the most massive retail-focused effort the Philippines has ever made. We are negotiating with tour operators and travel agents to give incentives to returning visitors to the Philippines,” Tourism Secretary Ramon R. Jimenez Jr. said during the campaign’s launch last December.

Aside from the special packages for visitors, the DOT, together with the TPB, has partnered with the private sector and local government units in promising a bigger, greater and more exciting lineup of events and tourism product offerings that showcase the country’s competitive advantage as a destination. Aside from the MTV Music Evolution 2016, other major events during VPA 2016 include the Asean Tourism Forum 2016, Routes Asia 2016, Madrid Fusión Manila 2016, 2016 Ironman 70.3 Asia Pacific Championship and the Travel Blog Exchange, among others.

Filipinas voted one of world’s most attractive nationalities

F

ilipinas are among the most attractive and sexiest women in the world, according to American men polled by travel-dating web site MissTravel.com.

Results of the fourth annual survey, titled “The World’s Sexiest Nationalities,” showed that Filipinas ranked sixth among the top 10 sexiest nationalities for women.

Americans took the top spot for sexiest women, followed by Armenians. Both Canadian and Cuban women made their debut on the 2016 list, placing third and fourth, respectively.

“Although Miss Philippines may have taken the crown at the controversial Miss Universe pageant, it seems Colombians are getting revenge, placing just ahead of Filipina women in the fifth spot,” MissTravel.com said in a statement.

The survey was based on the dating preferences of 41,643 American men.

Men were asked to rank which qualities contributed to attractiveness when travel-dating.

“Facial features” and “hair color” ranked the highest, coming in at

41 and 34 percent, respectively.

As for the sexiest men, Reynolds said Canadians and Americans topped the list.

“Women will have to cross the border to score a first date with their ideal man. [Canadian] men have been deemed the sexiest; perhaps due to Prime Minister Justin Trudeau’s playful demeanor or, in contrast, Justin Bieber’s bad-boy antics,” said Ethan Reynolds, the web site’s publicist.

Aside from Canadians, respondents also found Americans, Australians, Italians, Spanish men, Koreans and Irish men sexy.

The list of sexiest men was based on the dating preferences of 49,518 American women.

“This year’s survey proves that nice guys finish first. When asked which qualities affected their decision most, 53 percent responded with ‘personality,’” Reynolds said.

MissTravel.com is the world’s first travel-dating web site, where people can connect for a destination first date. The site boasts more than 600,000 members in 135 countries, approximately 40 percent of users are American.

Big business supports proposal to give Duterte emergency power

By Catherine N. Pillas c_pillas29

& Butch Fernandez @butchfBM

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he Makati Business Club (MBC) on Tuesday acknowledged the imminent threat of a traffic crisis in Metro Manila, as it gave its conditional support to a proposal giving incoming President Rodrigo R. Duterte emergency powers to resolve the gridlock threatening to paralyze the metropolis.

“If the solution to address the crisis requires emergency powers, MBC is prepared to support the consideration of well-defined emergency powers for the transport sector, provided these emergency powers are specific, limited and time-bound; anchored on a solid national policy; and complemented by a strong system of accountability,” the business group said in a statement.

As this developed, Senate leaders signaled on Tuesday they can fast-track passage of the emergency powers being sought by Duterte, saying they want to see adequate safeguards installed to check potential abuse by implementers.

“I am open to the grant of emergency powers,” Senate President Franklin M. Drilon said, but added he would first “like to see the specific powers to be granted and the safeguards.”

Another influential business group, the Management Association of the Philippines, has voiced support for the proposal earlier, encouraging the incoming administration to declare a “traffic crisis” and seek emergency powers for the President to resolve it.

Members of Duterte’s economic team, including incoming Transportation chief Arthur P. Tugade, were in Davao City on Monday, consulting with business groups on their economic agenda for the next six years.

Tugade said his legal team is already drafting a bill granting the President emergency powers, and the enforcement can last up to two years.

The proposed emergency powers include favoring direct procurement over public bidding for transportation projects, opening private subdivision roads to traffic and removing transport terminals and public markets along highways.

Tugade cited a study by the Japan International Cooperation Agency (Jica) that said productivity and economic losses have ballooned to P2.4 billion a day due to congestion in Metro Manila’s main thoroughfares.

Jica later updated the possible costs to as much as P6 billion a day by 2030 if the status quo is maintained and no significant reforms are enacted by the government.

Meanwhile, incoming Senate Majority Leader Sen. Vicente C. Sotto III said he is keen to know how the emergency powers proposed to be granted

to the Duterte administration would solve the crippling traffic mess in the metropolis.

“Right now, simple political will can resolve most problems in traffic,” Sotto told the BusinessMirror. “We have to know what kind of powers are involved. The word emergency powers can mean many things.”

According to Sotto, opening up villages is not likely to help and could “merely create additional traffic areas.”

Sotto said officials tasked to deal with the traffic mess could first implement a complete “no parking” rule in the entire metropolis, pointing out that “the villages are filled with parked cars also, so what’s the point?”

“Simple political will is needed. Instant effect.

It will not take two years [to solve the gridlock],” he said.

For his part, Sen. Panfilo M. Lacson Sr. affirmed support for the proposed emergency powers to be wielded by the next administration, citing traffic gridlocks not only in Metro Manila, but also in other urban areas, like Cebu and Davao City, which are taking heavy economic tolls.

For their part, neophyte Sens. Sherwin T. Gatchalian, Joseph V. Ejercito and Joel Villanueva also signified support for the proposal to grant the Duterte administration special powers to address the traffic problem, even as Gatchalian cautioned against potential abuses.

“Actually, ako, as a congressman of a Metro Manila City, talagang araw-araw pine-peligro kami ng traffic,” Gatchalian told Senate reporters. “But emergency powers give an Executive very broad powers over many things, including biddings and contracting.”

What is important, Gatchalian noted, is the administration’s strategy. “Kasi hindi tayo pwedeng Band-Aid solution. Bakit kailangan mo ng emergency powers? Ano ba ’yung hindi magawa ng regular bidding process sa ngayon dahil hindi namin alam ’yung strategy. So we want to know what is the strategy first.

We want to know the overall strategy because now if we can solve the traffic problem without emergency powers, then that is much better.”

Ejercito agreed the emergency power proposal of Duterte administration officials is “worth looking into.”

“Yes, I do agree that we have a big traffic problem. In fact, we are already choking. This is a crisis situation already,” he added.

Villanueva, on the other hand, suggested a “double approach” for addressing the traffic mess.

“Mag-convene ng working group to review what needs extension of powers and what can be done through concerted effort of different leaders, both at the national and local levels,” he said, adding, “A review would allow us to see that some villages are actually public rather than private. And do not require extension of power to open them to the public.”

news@businessmirror.com.ph

AseanWednesday BusinessMirror

Uber loan program helps Vietnamese swap scooters for brand-new vehicles

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n Vietnam, where motorbikes outnumber cars by a factor of 16, Uber Technologies Inc. is helping to create a new generation of auto drivers with first-time bank loans for vehicle purchases.

Vu Ngoc Hung traded his 12-yearold Taiwanese scooter for a brandnew $28,500 Honda City after a lender financed 80 percent of his white four-door sedan based on his Uber fares. The program with Viet Capital Bank enabled him to more than triple his income to $850 a month through the app-based taxi service to support his wife and parents, who previously sold stationary from home to help make ends meet.

“Driving a taxi through Uber has transformed my family’s life with a stable income,” said Hung, 40, who previously worked as a driver for a company. “I am now my own boss at a time when it’s not easy to land a good-paying job.”

Uber’s three-month-old bank program is changing the Vietnam Dream, which now includes a new automobile in a nation of 45 million motorbikes. After testing in a country where Toyota Vios sedans compete with scooters carrying a family of four down narrow avenues hazy from vehicle pollution, the initiative is being rolled out in other Southeast Asian markets.

“About 70 percent of car buyers borrowed money from banks last year,” said Ho Minh Tam, vice chief executive officer of Viet Capital Bank. “Vietnamese spending behaviors have changed.”

Ride-hailing battle

The program also opens up another front for Uber in its battle for ride-hailing customers and drivers.

In Vietnam, the San Francisco-based start-up competes with GrabTaxi Holdings Pte., like it battles Lyft Inc. in the US and Didi Chuxing in China. Hung is one of the first Uber drivers in Vietnam to

use the program that could be tapped into by tens of thousands of other Vietnamese, said Dang Viet Dung, Uber Vietnam general manager. For many people in the country, it’s the first time they have relied on financing in one of Southeast Asia’s most expensive automobile markets.

“We believe this type of program has the potential to deliver similar benefits in other countries in the region and the world,” Dung said.

Uber has also just started a leasing program with Toyota Motor Corp., in which payments are made from Uber fares. Vietnam had one of the fastest-growing auto markets in Asia during the past three years, according to Koichi Sugimoto, an analyst at Mitsubishi UFJ Morgan Stanley. The country’s 2015 vehicle sales jumped 55 percent to 245,000 units, the Vietnam Automobile Manufacturers’ Association reported. Half of vehicles sold were imported, according to the Hanoi-based General Statistics Office. Auto sales increased 31 percent to more than 111,000 during the first five months of the year, the association said.

Saigon Thuong Tin Commercial Joint-Stock Bank, a major auto loan provider in the country, says its vehicle lending soared 247 percent between 2013 and 2015. One-fourth of Toyota Vietnam’s 2015 sales of 50,285 vehicles were purchased with financing, up from one-sixth of its sales in 2013, said Yoshihisa Maruta, president of Toyota Vietnam.

Ho Chi Minh City Housing Development Commercial Joint-Stock Bank cited ride-sharing apps, like Uber and Grab, with helping to almost double its auto loan business last year. Viet Capital Bank expects to increase its car loans sixfold in the next five years to represent one-third of its retail banking.

Grab, though, is not participating in vehicle-financing programs and urges its “partners” not to “buy new cars to drive Grab, as that would

increase the number of vehicles on the roads, worsening the traffic situation and going against our company’s policy and goal,” Nguyen Tuan Anh, Grab Vietnam director, said in an e-mail.

Overloaded motorbikes

Still, owning a car in Vietnam can be as difficult as navigating four-wheels on streets packed with motorbikes overloaded with everything from pigs and chickens to giant panes of glass. The government imposes tariffs ranging from 55 percent to 75 percent on imported vehicles, depending on engine size, said Anna-Marie Baisden, head of BMI’s auto analysis in London. The average annual salary in Vietnam is about $2,000, so buying a relatively low-end Honda City can cost 14 times a person’s yearly pay.

Car ownership in Vietnam is now a symbol of economic success and, in the case of Uber drivers like Hung, a means for a better life.

Limited capital

For Uber, the loan program is a good marketing tool to attract more drivers, said Steve Man, a Hong Kongbased automobile industry analyst for Bloomberg Intelligence. “It opens the door for drivers with limited capital to get into the business,” he said.

About 4,000 Uber drivers had joined Ho Chi Minh City’s crowded streets earlier this year, Tuoi Tre newspaper reported on January 8, citing the city’s transportation department. Driver Hung says his car payments are deducted from his fares, which amounts to about half his monthly income and makes his take-home pay about $450 a month.

His 8- percent interest rate is lower than the 10 percent to 12 percent rates offered to Vietnamese who are able to afford a down payment of as much as 40 percent, Hung said. However, he would be on the hook for 4 percent of the remaining loan should he pay it off early. Bloomberg News

Editor: Max V. de Leon • Wednesday, June 22, 2016 A5

Indonesia says China treating waters its own

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ndonesia signaled a harder stance over incursions by Chinese fishing boats in its waters, saying the encroachments appeared to be part of an effort by Beijing to extend its territorial claims in the South China Sea.

Indonesia’s nav y last week detained a vessel fishing off the Natuna Islands and arrested seven fishermen after firing warning shots in the air, according to Foreign Minister Retno Marsudi.

China’s foreign ministry said the men were operating in “China’s traditiona l fishing” grounds, “where China and Indonesia have overlapping claims for maritime rights and interests.”

“We suspect that this is structured activity because they were guarded, which means that it was blessed by the government,” Rear Adm. A. Taufiq R., commander of Indonesia’s Western Fleet, told reporters on Tuesday in Jakarta, adding the fishing boat was shot at when it refused to stop and that no one was injured. “That was why China raised a protest, because they think that the area is theirs.”

More Chinese fishing boats have been detected in the vicinity this year, he said. “We need to resolve this issue. If not, they will make a one-sided claim to the waters.”

Indonesia’s public irritation at the presence of Chinese fishing boats in the area—along with that country’s coast guard— risks draw-

We need to resolve this issue. If not, they will make a onesided claim to the waters.”

—Rear Adm. A. Taufiq R. ing it more formally into frictions between other Southeast Asian nations and Beijing over the South China Sea. In March Indonesia detained the crew of a fishing boat in a scuffle involving a Chinese coast guard vessel.

‘New policy’

“WE are beginning to see Indonesia reevaluate its policy on the broader South China Sea dispute, but we don’t really have the new policy yet,” said Aaron Connelly, a research fellow at the Lowy Institute for International Policy in Sydney. “I suspect there is real reluctance from some quarters to anger China.”

China has, in turn, explicitly referred for the first time to a dispute with Indonesia over maritime territory, Connelly said. China is Indonesia’s largest trading partner and a sizable source of investment into the country.

China’s claims to more than 80 percent of the South China Sea pit it against the likes of Brunei Darussalam, Malaysia, the Philippines and Vietnam. Its assertions are based on a vague line drawn on a 1940s map.

Indonesia isn’t a formal claimant and had previously sought to be neutral in the tensions, even as President Joko Widodo became more activist in detaining fishing boats and, in some cases, blowing them up. Indonesia said in April that it would deploy US-made F-16 fighter jets to the Natunas to ward off “thieves.”

Chinese passports issued in 2012 showed a territorial line passing through the exclusive economic zone that Indonesia derives from the Natuna islands, an area that may hold large natural gas and other energy reserves. An international court is expected to shortly rule on a Philippine challenge to China’s claims over the sea.

China has in recent years built 3,200 acres (1,300 hectares) of land on seven features in the Spratly Islands to the northeast of the Natunas, completing a military-grade airstrip on one. Its coast guard has stepped up patrols, interceding to protect fishing boats. Malaysia’s foreign affairs ministry summoned China’s ambassador in March to register concern over the alleged encroachment of Chinese-flagged boats. Bloomberg News

The W

Business

A6 Wednesday, June 22, 2016 • Editor: Lyn Resurreccion

Journalists, academic arrested in Turkey for ‘terror’ propaganda

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A home builder works at sunrise on Monday in Gilbert, Arizona, in an effort to beat the rising temperatures. The National Weather Service is expecting another day of triple-digit temperatures in Phoenix and across much of the Southwest. AP

US Southwest gripped by extreme heatwave P

HOENIX—As the mercury soared, records were falling. A severe heatwave ushered in the first day of summer on Monday in the broiling Southwest, where extreme temperatures were blamed for at least five deaths over the weekend.

Towns along the Arizona-California border were getting the brunt of the extreme temperatures on Monday. In Palm Springs the thermometer hit 121 degrees in the early afternoon. The temperature in Phoenix broke a record and hit 116 degrees.

A cool-off was expected in the coming days. The National Weather Service reported 17 daily heat records were broken in Southern California on Sunday—because of a high-pressure ridge over the Four Corners region of the Southwest.

“People are assuming that it’s going to be a little bit cooler in the morning, and the temperatures are still extremely hot,” National Weather Service meteorologist Bianca Hernandez said. “If you can avoid being outside in general on days like this, that’s the best thing.”

For many people who work outside, however, air conditioning isn’t an option. Here’s a look at people whose jobs require that they endure the most extreme heat.

Horseback riding

THERE’S little shade along the

17 The daily heat records reported broken in Southern California on June 19 by the US National Weather Service

horse trails in South Mountain Park and Reserve in Phoenix.

Ponderosa Stables manager Kim Fitzgerald and her wranglers are well-seasoned when it comes to dealing with extreme heat.

Ma ny of t hei r c u stomers, however, aren’t.

“It’s a dry heat and so people from out of state won’t realize how bad it is because they don’t sweat as much,” Fitzgerald said.

When the temperature breaks

100 degrees, the horse rides come to a stop before noon. The animals get the afternoon off in the corral and they’re given plenty of water.

tries to keep cool during heat waves by wearing a baseball cap. Other than that, “there’s nothing more you can do.”

Getting water for elephants

Street vending

C ASSIE Rogge Dodds at Reid Park Zoo in Tucson, Arizona, spends most of her days outdoors tending to a herd of six elephants. She says many of them are from South Africa and accustomed to extreme heat but still need to be protected.

Dodds called the elephants into a pool on Monday morning, when temperatures had already reached 100 degrees, feeding them apples and vegetables as they swam around.

“That’s our biggest priority is keeping the elephants cool and making sure that we stay cool in the process,” she said.

Dodds says she keeps plenty of water around and wears hats, glasses and protective sleeves. She tries to get the bulk of her work done early in the day. “It’s a little tricky dealing with the heat here in Tucson. When it’s 115 degrees you have to do some planning.”

Washing cars

ALFREDO Chavez was hand-drying a black SUV in the full, baking sun at a car wash near downtown Los Angeles on Monday as the temperature crept past 100 degrees.

“The truth is, I don’t like it but I have no choice,” Chavez said in Spanish as a couple of his coworkers ate in nearby shade. We have to work.”

Chavez, who has worked at the car wash for seven years, said he

ERIC Mayweather was on the streets of downtown Phoenix on Monday to sell umbrella hats and cold drinks to other brave souls who were out and about.

May weather says the heat doesn’t bother him as much this year, but that wasn’t always the case. “My first few years I almost died because it was hot,” he said.

Mayweather says he survives by staying hydrated. And he offered another tip for people out in the heat: Wear a hat. He can sell you one.

Pedal to hot metal

ARIZONA Pedal Cab driver Ed Dipple is no stranger to the harsh summer heat. The second-generation Arizona resident has been driving pedicabs for 22 years, and he’s seen what the heat can do.

“One guy, I started talking to him—he didn’t make any sense.

That’s your first clue,” Dipple said.

The man hadn’t drunk or eaten anything but cereal hours ago.

“I had to take him in somewhere, and you know, sit him down,” he said. Dipple said that while he often hears cab riders comment about the heat, “most people are thanking me for getting them from here to there, especially if it’s a female in highheeled shoes.”

He has some advice for those moving about in the summer heat: “Stay in the shade.” AP

STANBUL—A Turkish court placed two Turkish journalists—including a local representative of Reporters Without Borders (RWB)—and an academic in pretrial arrest on Monday over charges of disseminating “terrorist propaganda,” according to the press freedom rights group and Turkish media reports.

RWB’s Erol Onderoglu, along w ith jour nalist A hmet Nesin and academic Sebnem Kor ur Fincanci, had participated in a solidarity campaign in support of Ozgur Gundem, a pro-Kurdish publication subject to multiple investigations and lawsuits. The private Dogan news agency said the campaign involved participants acting as chief editor for a day. The three were ordered arrested after they testified before the public prosecutor with the state judiciary’s Terrorism and Organized Crimes Bureau.

Fincanci, chairman of Turkey’s Human Rights Foundation, said during her testimony to the prosecutor that all of the articles on the day she acted as editor “should be covered by the principles of freedom of thought and expression,” the agency reported.

Reporters Without Borders condemned the arrests as “an unbelievable low for press freedom in Turkey.”

Later Monday the United Nations Correspondents Association (UNCA) said one of its members Razi Canikligil, who writes for the Turkish Hurriyet daily, was also

arrested for articles and tweets on Turkish authorities. The UNCA said it “considers this a grave violation of freedom of the press.”

Press-freedom advocates warn that freedom of expression has dramatically declined in Turkey, where lawsuits against journalists, academics and other public figures are common.

Since the rise to power in 2002 of the ruling AKP, several news outlets seized by the government have been handed over to businesses close to the party. Tax inspections and tax fines have served to intimidate many media outlets, which fear falling foul of the government.

Journalists who are critical of the government have been fired.

More than a dozen journalists are in prison, although the government insists they have been jailed for criminal activity, not journalistic work.

Last year a group of party supporters raided the headquarters of Hurriyet newspaper, following criticism by President Recep Tayyip Erdogan. Soon after, Hurriyet columnist Ahmet Hakan was chased and beaten.

Turkey frequently blocks access to websites, and a pro-Kurdish television channel was recently taken off the air. Foreign journalists have been arrested and deported for reporting on Turkey’s renewed conflict with the Kurdistan Workers’ Party, in the country’s mostly Kurdish southeast region. AP

Killings of environmentalists up 60% in 2015, activists say

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ÃO PAU L O — A L ondonbased advocacy group said on Monday it documented 185 killings of environmental activists around the world last year, nearly 60 percent more than in 2014 and the highest since it began collecting data dating back to 2002.

In a newly released report, Global Witness said Brazil topped the 16-country list with 50 environmental defenders slain in 2015; followed by the Philippines, with 33; and Colombia, with 26. The group says 116 were slain worldwide in 2014.

Last year “was the deadliest year on record for killings of land and environmental defenders—people struggling to protect their land, forests and rivers,” the report said.

Conf licts involving mining, agribusiness, hydroelectric dams and logging are behind most of the killings, which average more than three a week, it added.

Those who oppose such projects are “finding themselves in the firing line of private security companies, state forces and a thriving market for contract

killers,” Global Witness said.

Firefights and killings around land disputes are common. Last week an indigenous land activist was killed and several others were injured in Brazil ’s southwestern state of Mato Grosso do Sul when their camp was attacked by armed farmers, authorities said. The group had set up a camp to demand that claims to ancestral lands be recognized by the government.

T he 50 env ironmenta l defenders killed in Brazil last year is nearly double the number slain in the countr y in 2014.

Most of the killings occurred in the Amazon states of Maranhao, Para and Rondonia, where “agribu si ness compa n ies, log gers and landowners hire hit men to silence local opposition to their projects,” the report said.

Brazil’s Justice Ministry did not immediately respond to a request for comment.

Marcio Astrini, public-policy coordinator for Greenpeace in Brazil, attributed the killings to a lack of government presence in areas where land conflicts and deforestation are taking place. AP

Things to know about coral reefs and their importance H

ONOLULU—More than 2,000 international reef scientists, policy-makers and stakeholders are gathering in Hawaii this week to discuss what to do about the global decline of coral reefs. The International Coral Reef Symposium convened on Monday in Honolulu, where attendees will try to create a more unified conservation plan for coral reefs. Here’s a look at what coral is, what role it plays in human life and what might happen if more of these important ecosystems are lost:

What are coral reefs

CORALS are animals related to jellyfish and anemones. The organisms grow and form reefs in oceans around the world. Coral reefs support the most species of any marine environment, hosting countless kinds of fish, invertebrates and even mammals. Coral reefs are comparable to rain forests in their biodiversity and importance to our overall ecosystem. According to the National Oceanic and Atmospheric Administration, there are over 800 species of coral that build reefs and hundreds of other

soft and deep-sea coral species in the world.

Bleaching and mortality

WHEN dramatic environmental changes occur, corals go through a process known as bleaching.

Essentially, the corals become stressed, often from war mer water temperat ures but a lso from things like pollution and acidification, and then release the symbiotic algae that they use for nutrition. The loss of these symbionts leaves the coral white or paler in color, a sure sign

the organism is stressed. If the bleaching is severe or recurs over consecutive years, the coral will likely die. Some coral has shown resilience in warmer and more stressful conditions, and scientists are working to figure out why some do better than others.

Human uses

CORAL reefs are huge drivers for many coastal tourist economies, bringing in billions of dollars of revenue annually. Many vacationers come to the tropics just to snorkel and dive on pristine reefs. But

what many people don’t know are the myriad of other ways humans benefit from coral reefs. Reefs shelter land from storm surges and rising sea levels. Coral has even been found to have medicinal properties, including painkillers that are nonhabit forming. Beyond that, coral reefs are home to the vast majority of fish that humans consume, and some island nations rely almost entirely on the reef for their daily sustenance.

Saving reefs

RESEARCHERS at the University of

Hawaii’s Institute of Marine Biology have been taking samples from corals that have shown tolerance for harsher conditions in Oahu’s Kaneohe Bay and breeding them with other strong strains in slightly warmer than normal conditions to create a super coral. The idea is to make the corals more resilient by training them to adapt to tougher conditions before transplanting them into the ocean. Another program run by the state of Hawaii has created seed banks and a fastgrowing coral nursery for expediting coral-restoration projects. AP

World

sMirror

www.businessmirror.com.ph | Wednesday, June 22, 2016

Oil halts gain near $49 as markets await Brexit vote, stockpiles data

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il halted gains near $49 a barrel, as markets awaited the UK referendum on staying in the European Union and weekly US stockpile data.

Futures slid as much as 0.9 p e rc e nt i n Ne w Yor k , a f t e r gaining 6.8 percent the prev ious t wo days. A sia stocks reversed earlier losses and the Bloomberg Dol lar Spot Index slipped for a fifth day, as pol ls showed the UK vote is too close to call. US inventories probably fel l by 1.5 mil lion bar rels last week, keeping them more than 100 mil lion bar rels above the five-year average, according to a Bloomberg sur vey before gover nment data on Wednesday.

Oil has advanced more than 85 percent from the lowest level in 12 years, as disruptions from Nigeria to Canada and falling output in the US trimmed a global surplus. Separate polls showed leads for both sides of the UK referendum before the vote on Thursday.

“Oil has been dominated by general market sentiment over the past week and less by specific

oil factors,” Angus Nicholson, a markets analyst in Melbourne at IG Ltd., said by phone. “That will probably continue for the rest of the week and the Brexit vote is on everyone’s mind at the moment.

Long-term supply concerns with drill rigs coming back to market will probably cap any major rallies toward the $55 to $60 level.”

West Texas Intermediate for July delivery, which expires on Tuesday, lost as much as 46 cents to $48.91 a barrel on the New York Mercantile Exchange. Prices rose $1.39 to close at $49.37 a barrel on Monday. Total volume traded was about 51 percent below the 100-day average. The more-active August contract was 38 cents lower at $49.58 a barrel at 3:02 p.m. Hong Kong time.

US stockpiles

Brent for August settlement fell as much as 57 cents, or 1.1 percent, to $50.08 a barrel on the London-based ICE Futures Europe exchange. The contract rose $1.48, or 3 percent, to $50.65 a barrel on Monday. Bloomberg News

A7

Iran says possible Boeing deal could be worth $25B

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EHRAN, Iran—Iran’s transportation minister is saying a possible deal between the Islamic Republic and Boeing Co. could be worth as much as $25 billion.

Chicago-based Boeing didn’t immediately respond to a request for comment, but the figure would be on a par with a sale already made by its European rival Airbus to Iran.

Iranian Transportation Minister Abbas Akhoundi’s remarks on state television on Wednesday are the first figures floated by Tehran about the proposed sale.

Boeing is likely cautious about entering Iran’s market as other sanctions remain in place against Tehran. American officials say the sale would need permission from the US Treasury. Iran’s national carrier, Iran Air, says it wants to buy new generations of the Boeing 737, as well as the 300ER and 900 version of Boeing 777. AP

Amsterdam housing market shows signs of overheating

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t’s getting hot in the Amsterdam property market. The Netherlands, the nation of tulipmania almost 400 years ago, saw prices in its capital city surge almost 21 percent in the first quarter. While the blame partly falls on a simple supply-and-demand imbalance, the signs are pointing to a potential squeeze.

In London, by comparison, government data show prices rose about 14 percent from a year earlier, according to Savills Plc.

In a market where a lmost half of properties are ow ned by nonprofit corporations, mainly for socia l housing, there’s just not enough coming on to the market to satisf y buyers. A fter fa l ling about 14 percent in five years, pr ices have rebounded recent ly a nd a re now above precr isis levels.

“The Amsterdam housing market shows signs of overheating,” said Frans Schilder, who studies housing policy in the economics

department at the University of Amsterdam. “The prices are absurd but I don’t expect them to fall in the near future.”

A ny houses coming up for sale in the Amsterdam region are scooped up immediately. The supply shortage is a hangover from the financial crisis, which restrained new building and led to more families choosing to remain in the city, as it was harder to sell properties at a profit. In the first quarter of 2016, all houses that

came on the market were sold, nearly half for more than the asking price. The asking price for an average house rose 5 percent from a month ago in May while it was up 26 percent from a year earlier, the Dutch bureau of statistics said on Tuesday.

Another reason prices continue to skyrocket is that the Netherlands is relatively unique in still allowing buyers to borrow more than the value of the house—no down payment necessary. Bloomberg News

A8

Wednesday, June 22, 2016

The World BusinessMirror

California nears $2-billion plan to house its homeless

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OS ANGELES—The growing problem of homelessness can be seen in every corner of California, from small towns that ring the state’s redwood forests to the sands separating the Pacific Ocean from the most prosperous beachfront communities.

More than 115,000 homeless Californians were counted last year and one in four had a serious mental illness, according to the most recent tally from the US Department of Housing and Urban Development. With California’s homeless situation at what some officials are calling a tipping point, lawmakers are putting the finishing touches on a plan to provide as much as $2 billion to help cities build permanent shelters to get mentally ill people off the streets.

The Legislature could consider the measure later this week.

“There’s just something immoral about a tent city being silhouetted by 16 cranes building high-rises—the ju xtaposition of haves and have-nots,” former state Senate President Pro Tem Don Perata, Democrat-Orinda, said at a recent Capitol hearing on the funding plan.

His reference was to Los Angeles’s Skid Row, a 54-squareblock area surrounded by an ever-encroaching building boom featuring upscale lofts and apartments, high-rise hotels, expensive restaurants and trendy coffee bars and nightclubs. While the high-rises go up nearby, Skid

115k The total number of homeless Californians counted in 2015 by the US Department of Housing and Urban Development

Row remains blighted, its streets filled with trash, human waste and spent narcotics need les.

Its homeless residents—many blank-faced, some half-dressed— wander aimlessly throughout the day. At night as many as 2,500 bed down in hundreds of tents pitched along sidewalks almost in the shadow of City Hall.

With more than 46,000 homeless people scattered across Los Angeles County—an increase of 6 percent from last year—local officials are fighting an uphill battle for state and voter approval of an initiative that would raise taxes on millionaires to benefit homeless services. Experts say things are just as bad across the rest of

California. In the San Francisco Bay Area, where the start-up tech boom is sending rental and housing prices skyrocketing, people who lived in once-modest neighborhoods are being forced to the streets. In Sacramento people take refuge in bushes near the stately Capitol building or cluster in downtown encampments.

“I don’t care what part of California you’re in, you will see an ever-growing population of people who live on the streets with a mental illness, and that’s what we’re addressing,” said Maggie Merritt, executive director of the Steinberg Institute, a mental health nonprofit advocating for increased state funding to fight homelessness.

Hawaii and some major cities, including Seattle and Portland, Oregon, have declared homelessness to be in states of emergency, freeing up disaster funds and breaking down regulatory barriers to provide swift assistance.

California Gov. Jerry Brown has resisted that approach. His spokesman Deborah Hoffman said in a statement last week that local governments are best-positioned to tackle the issue and “a gubernatorial declaration is not appropriate.”

Brown favors the legislative plan proposed by Senate Democrats that would provide up to $2 billion for local agencies to construct permanent housing for people living on the streets with psychological disorders. Legislative analysts expect it’d fund at least 14,000 units.

The money would come largely from the Mental Health Services Act, an initiative voters approved in 2004 that raised state income taxes on millionaires by 1 per-

cent. The current plan would use bonds to finance construction and divert a small portion—between 0.8 percent and 6.5 percent—of the mental health fund every year for what could be decades to repay the bonds.

Many of the details remain to be worked out, but a keystone of the tentative agreement requires counties to step up with additional services for everyone they house.

Such services currently vary widely between counties, and some officials are wary of a 20year treatment obligation tied to the money. But negotiations have consistently favored county input, allaying most hesitations to accept the state aid.

While rehabilitating the homeless for long-term success requires more than just putting a roof over their heads, that is the initial step in what has become a national “housing first” strategy.

“The capital is great, you build the building, but then you have all these vulnerable people you’re housing who need all those other supportive services,” said Jeremy Sidell, chief development officer at People Assisting the Homeless, a nonprofit that’s been transitioning people from streets to housing since 1985. “You want to maintain them in that housing; you don’t want to create a revolving door.”

He said nonprofits that work with the homeless employ caseworkers to treat substance abuse, manage mental health and offer a stable environment to close that revolving door. “We’ll take people to the Social Security office, we’ll take people to the DMV or their doctor’s appointments,” Sidell said. “It’s a do-whatever-it-takes approach.” AP

10 years after housing peaked, US is more of a renter nation

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O U N T P L E A S A N T, South Carolina—It’s a troublesome story playing out across America in the 10 years since the housing bubble peaked and then burst in a ruinous crash: As real estate has climbed back, homeowners are thriving while renters are struggling.

For many longtime owners, times are good. They’re enjoying the benefits of growing equity and reduced mortgage payments from ultra-low rates.

But for America’s growing class of renters, surging costs, stagnant pay and rising home values have made it next to impossible to save enough to buy.

The possible consequences are bleak for a nation already grappling with economic inequality: Whatever wealth most Americans possess mainly comes from home equity. An enlarged renter class means fewer Americans can build that same wealth and financial security.

Nearly two-thirds of adults still own homes. And some who rent do so by choice. Yet, ownership has become a more distant dream for the many Americans who still regard it as a route to prosperity and pride. The problem has become especially severe in areas that offer the best job prospects, as well as those that have been battered by foreclosures.

“It doesn’t paint a pretty picture,” said Svenja Gudell, chief economist at Zillow, the online real-estate database company.

“You’re really blocking out a group of buyers from owning a home.

They’re truly living paycheck to paycheck, and that does not put them into a good position to buy.”

Joe Fabie and his wife face just such a bind. They moved to Mount Pleasant, just over the bridge from

In this April 19 photo, Joe Fabie and his wife Christi pose for a photo in front of their rental home in Charleston, South Carolina. The Fabies left Mount Pleasant, South Carolina, to rent somewhere cheaper. Both have law-school debt and are saving to buy a home. AP

historic Charleston, South Carolina, after law school in Pittsburgh.

The suburb’s pastel-hued harbor vistas, tin-roofed houses and Spanish moss-adorned live oaks were enchanting.

But the rising rent on their one-bedroom apartment—more than for their three-bedroom rental in Pittsburgh—made it impossible to save enough to buy a home. With their rent going up again, the couple moved to a cheaper suburb in hopes of repaying their student debt and saving for a starter home. “ The best school district is Mount Pleasant, and we would like to be there,” said Fabie, 27.

“But if you’re lucky you can get some beat-up homes for around $300,000.”

An exclusive analysis by The Associated Press of census data covering over 300 communities found that two major forces are driving a wedge between the fortunes of renters and homeowners: n Historically low mortgage rates have enabled homeowners to refinance and shrink their monthly payments, thereby reducing a major household cost. The median annual mortgage expense for a US homeowner has dropped by $1,492 since 2006. n A combination of foreclosures and new college graduates crowding into the strongest job markets has raised demand for rentals.

Renters accounted for all the 8 million-plus net households the United States added in the past decade. Home ownership has dipped

to 63.5 percent, near a 48-year low.

That demand has driven up rents, which, in turn, have prevented or delayed people from buying first homes. The government says if you spend more than 30 percent of your pretax pay on housing, you are “cost-burdened.”

The total number of renters in that category has jumped more than 30 percent in the past decade, to 21.2 million. Half of all renters are now considered cost-burdened, compared with just 24 percent in 1960.

These trends are reflected in how and where Americans live.

Suburban cul-de-sacs built for owners are now tilting toward rentals, especially in such areas as Orlando, Las Vegas and Tampa, where the bubble and crash were especially intense. AP

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Divided Senate answers Orlando with gridlock on weapons curbs

W

ASHINGTON—A divided Senate blocked r i v a l e l e c t io n - y e a r plans to curb guns on Monday, eight days after the horror of Orlando’s mass shooting intensified pressure on lawmakers to act but knotted them in gridlock anyway—even over restricting firearms for terrorists.

In largely party-line votes, senators rejected one proposal from each side to keep extremists from acquiring guns and a second shoring up the government’s system of required background checks for many firearms purchases.

With the chamber’s visitors’ g a l ler ies u nu su a l ly c rowded for a Monday evening—including relatives of victims of past m a s s s ho o t i n g s a n d p e o p l e wearing orange T-shirts saying #ENOUGH gun violence—each measure fell short of the 60 votes needed to progress. Democrats called the GOP proposals unacceptably weak, while Republicans said the Democratic plans were too restrictive.

The stalemate underscored the pressure on each party to stand firm on the emotional gun issue going into November’s presidential and congressional elections. It also highlighted the potency of the National Rifle Association, which urged its huge and fiercely loyal membership to lobby senators to oppose the Democratic bills.

“Republicans say, ‘Hey look, we tried,’” said Senate Minority Leader Harry Reid, DemocratNevada “And all the time, their cheerleaders, the bosses at the NRA, are cheering them.”

Senate Majority Leader Mitch McCon ne l l , R e publ ic a n-K entucky, said the Orlando shootings—in which the FBI says the American-born gunman swore allegiance to a Islamic State group leader—show the best way to prevent extremists’ attacks here is to defeat them overseas. “No one wants terrorists to be able to buy guns,” McConnell said. He suggested that Democrats used the day’s votes “to push a partisan agenda or craft the next 30-second campaign ad.”

That Monday’s four roll-call votes occurred at all was testament to the political currents buffeting lawmakers after gunman Omar Mateen’s June 12 attack on a gay nightclub. The 49 victims who died made it the largest mass shooting in recent US history, topping a string of such incidents that have punctuated recent years. The FBI said Mateen—a focus of two terror investigations that were dropped—described himself as an Islamic soldier in a 911 call during the shootings. That let gun-control advocates add national security and the specter of terrorism to their arguments for firearms curbs.

After the votes, presumptive Democratic presidentia l candidate Hillary Clinton issued a one-word statement, “Enough,” followed by the names and ages of Orlando’s victims. On Fox News Channel’s The O’Reilly Factor, expected GOP presidential nominee Donald Trump said he “absolutely” agrees that people on the government’s terror watch list should be barred from owning guns. He did not say if he supported the Republican or Democratic versions of bills rejected on Monday.

Only a handful of lawmakers changed positions from votes cast last December on similar proposals, highlighting each party’s enduring stances on guns. And there’s little sign that the House’s GOP leaders will allow votes.

Even so, GOP senators facing reelection this fall in swing states were under extraordinary pressure. One vulnerable Re-

publican, New Hampshire’s Sen. Kelly Ayotte, backed both bills blocking gun sales to terrorists, a switch from when she joined most Republicans in killing a similar Democratic plan last December. She expressed support for a narrower bipartisan plan, like one being crafted by Sen. Susan Collins, Republican-Maine.

Collins was trying to fashion a bipartisan bill preventing people on the government’s nof ly list from getting guns. She expressed optimism the Senate would vote on her plan, and Sen. John Cornyn, Republican-Texas, said that according to McConnell, if Collins wants a vote on her proposal, “She’ll get one.”

Monday’s votes came after Sen. Chris Murphy, Democrat-Conneticut, led a near 15-hour filibuster last week demanding a Senate response to the Orlando killings. Murphy entered the Senate shortly after the December 2012 massacre of 20 first-graders and six educators in Newtown, Connecticut, but that slaughter and others have failed to spur Congress to tighten gun curbs. The last were enacted in 2007, when the background-check system was strengthened after that year’s mass shooting at Virginia Tech.

With Mateen’s professed loyalty to extremist groups and his 10-month inclusion on a federal terrorism watch list, Sen. Dianne Feinstein, Democrat-California, proposed letting the government block many gun sales to known or suspected terrorists. People buying firearms from federally licensed gun dealers can currently be denied for several reasons, chiefly for serious crimes or mental problems, but there is no specific prohibition for those on the terrorist watch list.

That list currently contains around 1 million people—including fewer than 5,000 Americans or legal permanent residents, according to the latest government figures. The narrower no-fly list has just 81,000 names.

No background checks are required for anyone buying guns privately online or at gun shows.

The GOP response to Feinstein was an NRA-backed plan

by Cornyn. It would let the government deny a sale to a known or suspected terrorist—but only if prosecutors could convince a judge within three days that the would-be buyer was involved in terrorism. The Feinstein and Cornyn amendments would require notification of law-enforcement officials if people, like Mateen, who’d been under a terrorism investigation within the past five years, were seeking to buy firearms.

Republicans said Feinstein’s proposal gave the government too much power to deny people’s constitutional right to own a gun and noted that the terrorist watch list has mistakenly included some people. Democrats said the threeday window Cornyn’s measure gave prosecutors to prove their case made his plan ineffective.

Murphy’s rejected proposal would widely expand the requirement for background checks, even to many private gun transactions, leaving few loopholes.

The defeated plan by Senate Judiciary Committee Chairman Charles Grassley, RepublicanIowa, increased money for the bac kg round-chec k system. It also revamped language prohibiting some people with mental health issues from buying a gun, which Democrats claimed would reduce current protections. Monday’s votes were 5347 for Grassley’s plan, 44-56 for Murphy’s, 53-47 for Cornyn’s and 47-53 for Feinstein’s—all short of the 60 needed. AP

ExportUnlimited BusinessMirror

Editor: Efleda P. Campos • www.businessmirror.com.ph

Wednesday, June 22, 2016

A case for PHL Investment and Export Promotion Development Plan

By Victorino Soriano

Chief Trade-Industry Development Specialist Knowledge Processing Division Export Marketing Bureau, Department of Trade and Industry

Business Beyond Borders

S

MEMBERS of the Philippine delegation to Japan in a group photo. Seated, from left, are Emmy Lou V. Delfin of Information and Communications Technology Office, Jonathan D. de Luzuriaga of Philippine Software Industry Association (PSIA), Ambassador Manuel M. Lopez, Commercial Counselor Ma. Bernardita A. Mathay of Philippine and Investment Center Tokyo and Director Senen M. Perlada of the Department of Trade and Industry’s Export Marketing Bureau (EMB). Standing, from left, are Tae Abion of PSIA, Ruel Abion of Spiceworx, William Malubag of Pointwest, Tech Aguila of Pointwest, Allan Tan of Ideyatech, Commissioner Monchito B. Ibrahim, Takaharu Kano of Klab Cyscorpions, Ramil Villanueva of AWS, Jun Hiruta of Tsukiden, Maria Teresa Loring of the EMB, Josephine Romero of Magpie, Basilio Lasco Jr. of Top Connection, Toshiharu Kai of Ubiquitos Technologies, Robert Cheng of Alliance, Dominick Danao of Magpie, Sherwin Yu of Alliance, Junta Kawakita of Green Advancedtech Solution, Nathalie Hunter of PSIA and Sharon Tarronas, also of PSIA.

PHL software companies generate more leads in Japan

T

HE Department of Trade and Industry’s Export Marketing Bureau (DTI-EMB) sees great opportunities for the country’s softwaredevelopment sector, as deals and leads of the recent outbound business mission (OBM) to and participation in Software and Apps Development Expo (Sodec) 2016 to Japan amounted to $2.49 million.

A month after the participation to Sodec 2016, the Philippine Software Industry Association reported the recent OBM booked deals amounting to $210,000, while under negotiation deals amounted to

$620,000. Potential leads stood at $1.66 million, with a total of estimated deals and leads of $2.49 million. Participated in by 145 country exhibitors and visited by 89,285 people, the three-day

exhibition was part of the Japan Information Technology Week e x h ibit ion a nd con fe re nces.

Aside from software services, the event highlighted exhibition sections for cloud computing, big-data management, direct commerce solutions expo, store and retail IT solutions, Web digital marketing and information security, among others.

Fifteen Philippine software companies, composed of Adarna Digital, A lliance Software Inc., Advanced World Systems Inc., Compos Mentis Inc., CyberTech, Green Advancedtech Solution Corp., Ideyatech Inc., Klab Cyscorpions Inc., Magpie. im Inc., Pointwest Technologies Corp., Spiceworx Consultancy Inc., Toon City (Morph Animation Inc.), Topconnection.asia Inc., Tsukiden Global Solutions

Inc. and Ubiquitous Technologies Philippines Inc., joined the event. Participating companies said the business-matching sessions were effective and focused when it came to promoting the countr y’s IT-business-process management sector. They cited the all-out and aggressive promotion via multimedia in Japan and the focused inter vention of the third-party event organizer as reasons for the successf u l business mission. T he countr y anchored its par ticipation w ith an event tagline “Choose Philippines, Go Globa l.”

Held every May, Sodec is Japan’s largest exhibition featuring various products for development, operation and maintenance of software and apps. Japan is the third-largest IT market in the world ($173 billion), after the US ($661 billion).

DTI-IPG urges MSMEs to go global T

HE Department of Trade and Industry’s Industry Promotion Group (DTIIPG) urged micro, small and medium enterprises (MSMEs) to follow international product standards to break into the global market in a seminar conducted under the “Negosyo, Konsyumer, at iba pa” (NKATBP) event held recently in Waterfront Hotel, Cebu City.

Participated in by over 200 MSMEs; exporters; would-be exporters, entrepreneurs, including local start-ups and innovators; government trade promotions; and business development officers; the seminar, dubbed as “Catapulting New Business for the Global Market,” featured various discussions on how to

drive businesses into the growing global market and how government programs and initiatives can assist MSMEs find the right market for their products and services.

The IPG—composed of the Export Marketing Bureau, Foreign Trade Service Corps, Philippine Trade and Investment Center, Center for International Trade Expositions and Missions, and the Design Center of the Philippines—takes the lead in developing and implementing programs and activities that promote the Philippines and local entrepreneurs’ products and services in the domestic and international market.

“Our entrepreneurs should go beyond the local market. Most

economies today have been aggressive in providing the global market of products and services that provides unique and personalized experiences. The challenge for our exporters now is to expand their market reach by improving the quality of their products and services, and explore innovative opportunities for their offerings,” DTI Industry Promotion Group Undersecretary Nora K. Terrado said.

The majority of the participants of the event are budding entrepreneurs seeking opportunities in the international market. Challenges and obstacles in doing business abroad were also discussed during the event.

Among the opportunities being

tapped today to penetrate mainstream markets is the increasing Filipino communities around the world. At present, in Singapore alone, there are about 180,000 overseas Filipino workers and migrants. Also dubbed as the “One DTI Services,” the NKATBP is an initiative of the DTI Regional Operations Group, which brings together all services provided by the DTI under one event.

The event aims to heighten the awareness of the localities especially MSMEs and consumers, about the services offered by the DTI. IPG -led seminars w i l l r un through several regions from April to December 2016 under the NKATBP event.

upcoming events Compiled by Louise Kaye G. Mendoza | DTI-EMB Knowledge Processing Division

June 28

June 29

Competitiveness Program: Seminar Series for Exporters Innovation and Financing for SMEs Time: 8 a.m. to 5 p.m.

Venue: The Pinnacle Hotel and Suites, Santa Ana Avenue, Davao City

National Stakeholder Meeting on Non-Tariff Measures Time: 9 a.m. to 5 p.m.

Venue: The Peninsula Manila, Makati City

Event: Philippine Export

Event: International Trade Centre:

June 30

Event: Doing Business in Free

Trade Areas Information Session

Attended by: Ad Anthony Rivera Venue: Tokyo, Japan

International Building, #375 Sen. Gil Puyat Avenue, Makati City

June 22-25

Time: 9 a.m. to 12 noon Venue: Fifth Floor, DTI

June 11-30

Event: OBM RIPPLES for Japan

during the Design Services cum Exhibition

Event: OBM RIPPLES during the Taipei International Food Show Attended by: DC Rose Marie Castillo of Food and Agri-Marine Division Venue: Taipei, Taiwann

EVERAL studies have been made showing the relationship between foreign direct investments (FDI), exports and economic growth. These studies have shown that FDI have effects, both direct and indirect, on economic growth through exports. Through FDI, supply of funds for domestic investments is increased, and the host country is provided with an opportunity to enhance its export capacity.

This, in turn, promotes job creation, which leads to overall economic growth.

Some of these studies recommend that policy frameworks and incentive packages be made vigorous and competitive so that export and FDI could effectively promote growth. Raising the levels of productive capabilities needed to boost the country’s export profile could be achieved through attracting more FDI into the country.

No country in the world has managed to progress without increasing its investment capacity and export capabilities. In other words, the importance of both investments and exports in a country’s development can never be underestimated. Thus, economies around the world have always given focus on the initiatives that would further advance their progress through investments and exports.

In the case of the Philippines, the 2015 -2017 Philippine Export Development Plan (PEDP) has identified as one of its strategies for g row t h a nd de velopment the establishment of a wellcoordinated and sufficiently f unded ex por t and investment-promotion campaign to exploit the tie between FDI and export activity.

Before, export and investment promotion has been undertaken as two separate initiatives. Seemingly, the unconnected efforts have not produced the expected maximum benefits and results. Hence, the PEDP hopes to address this misalignment through a joint export and investmentpromotion campaign.

Studying the merits and feasibility of a Philippine Investment and Export Promotion Development Plan and realigning existing structures and work plans as necessary is one measure needed to ensure a cohesive and effective export- and investment-promotion program. This means that initiatives at building up the country’s image as an attractive site for production and investment, as well as rationalizing and linking investment and export incentives, must be aligned and well-coordinated.

Through this rationalized export and investment promotion campaign, it is hoped that the Philippines will also be able to be at par with, if not exceed, the visibility of other Asean countries in trade fairs and significantly increase the frequency of exporters’ and importers’ business missions.

To be able to do this, and at the same time, sustain the campaig n, the gover nment needs to launch an aggressive

investment- and export-promotion campaign. This means prioritizing fund allocation for this purpose because this campaign, or any campaign for that matter, could only be successful if amply supported.

We have to take our cue from other economies with the same income status as the Philippines that have successful investment and export-promotion campaigns, because they allocate much more public funds for this kind of initiative.

This is where a study on the feasibility of creating a Philippine Export Promotion Board that will serve as a venue for the private sector and local gover nment units to make recommendations concerning public initiatives in marketing Philippine exports becomes imperative. The Board may also be tasked to decide on the allocation of fiscal budget for export development.

Promoting exports and investments jointly makes sense.

The need to upgrade the export structure to promote exports and linking it with investments is, indeed, logical, because investment promotion is aimed not only at augmenting domestic capital, but also and equally important, at facilitating technology transfer and know-how.

This, in effect, will benefit exporters and industries through skills and industrial upgrading.

This will also make efforts at attracting more FDI into the country more advantageous for the Philippines in general, especially so that the country is now seeing a long-awaited resurgence of FDI. It is worth noting that, while FDI volumes are still smaller compared to what other Asean countries attract, the Philippines has been catching up at an impressive pace.

There are still many challenges that hampered investment in the past that still need to be addressed, but the faster economic growth of recent years and enhanced efforts to attract investment have improved prospects for the country. With the rate things are going, the rosy outlook for the Philippine economy brought about by the incoming administration may bode well for the shape of things to come for the country’s investment and export promotion efforts.

Everyone is waiting for this promised change to come with much anticipation. n Send your feedback s or comments at exportunlimited@ dti.gov.ph.

A9

A10 Wednesday, June 22, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

India loses its vital central banker

I

N few countries would a central banker’s decision to step down at the end of his term be cause for national and even global anxiety. Raghuram Rajan is no ordinary central banker, however, and his just-announced departure demands an extraordinary response from India’s government.

The government has the right to choose the head of the Reserve Bank of India (RBI), and no individual—not even an international financial superstar such as Rajan, who said he plans to return to academia when his term ends in September—is bigger than the bank itself. At the same time, the circumstances of Rajan’s departure have left global investors with a few unfortunate impressions. It’s important for the government to dispel these as quickly as possible, in order to shore up its credibility and the bank’s.

The first is the ugly implication that Rajan was eased out because he wasn’t “fully Indian,” in the words of Subramanian Swamy, an upper-house legislator from the ruling Bharatiya Janata Party. Rajan, of course, despite spending most of his career at the University of Chicago, is an Indian citizen; his real sin appears to have been to criticize the government obliquely in a widely publicized speech decrying rising intolerance.

The government has already signaled that this criticism is invalid—the shortlist of replacements for Rajan reportedly includes at least one economist who’s spent much of his career in the US. More important, the government should make clear that whoever gets the nod will have the freedom to speak critically and pursue an autonomous RBI policy, unbound by political considerations. The second impression is that Rajan was pushed out, because he was too hawkish on interest rates (an impression reinforced after his announcement by at least one senior official). Even if that were once true, it’s certainly not the case now, with both oil and food prices likely headed higher.

Almost as important as the choice of a new bank chief will be who the government nominates to fill a planned new monetary-policy committee, tasked with pursuing an inflation-targeting regime much like the Federal Reserve’s.

The candidates should be announced quickly and have as few political ties and ambitions as possible. Better still, the government, which is meant to pick three of the panel’s six members, could reduce its share of appointees so as to bolster the central bank’s autonomy.

A third (and particularly damaging) impression is that Rajan’s departure is somehow related to his drive to clean up the balance sheets of state-owned banks, where political considerations have often interfered in financial decisions. Rajan’s right: Such practices have put state banks in a perilous state and need to be eradicated. Officials have suggested the central bank pump its own capital into struggling state-owned banks, but a better option would be for the government to fix bank management, closing down or privatizing the worst offenders. Keeping them afloat only drains resources from the effort to recapitalize banks that have brighter prospects. Bloomberg editorial

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SSS accomplishments during the last six years: Reaching out to OFWs Susie G. Bugante

All About Social Security Part Three

O

verseas Filipino workers (OFWs) continue to demonstrate their economic value and power as their remittances help fuel our country’s economic growth. As an important segment of Social Security System (SSS) membership, OFWs, likewise, help boost contribution collections. From 2010 to 2015, a total of P17.76 billion in contributions from these workers were collected, while membership also continued on a steady upward pace, after hitting the 1-million mark in 2014. By December 2015, OFW membership totaled 1,120,493.

The key to coverage and collection drive in the OFW sector is providing overseas-based members easy access to their membership records and services. Initiatives—such as enhancing web-site services, opening a 24-hour, five-day call center; establishing representative offices abroad; uploading instructional YouTube videos; and having an official SSS Facebook page—were all pursued with the goal of reaching out to them.

Equally important is meeting OFWs face-to-face, and providing them firsthand information on the value of active membership and continuous contributions as their savings for the future. Inasmuch as coverage of OFWs remains on a voluntary basis under the social-

security law, it is important to convince them on the benefits of active membership, even when they are overseas. This is the primary reason for the OFW Information Coverage Drive—a program launched in 2011 to widen SSS coverage, especially in the Middle East and Europe, where many OFWs are based.

This drive has since become an annual event, with management primarily negotiating or finalizing bilateral social-security agreements with OFW host-countries. The coverage drive teams, then conduct “Kapihan” events to generate greater awareness about the importance of SSS coverage and provide on-site services, such as member registration; online verification of contributions and claims

status; and data capture for those applying for the Unified Multipurpose Identification card. Moreover, this provided an opportunity to visit and check on SSS representatives and offices, and directly communicate related concerns to the Philippine ambassador or consulate.

The SSS also helps OFWs plan their financial future through the Flexi-Fund Program. Launched in August 2001 as a supplementary voluntary provident fund and adopted in July 2002 as the National Provident Fund for OFWs, the Flexi-Fund doubles up as a savings program that yields high returns. To build up their Flexi-Fund during active overseas employment, OFW-members must contribute to the regular SSS program at the maximum monthly salary-credit level, with any excess amount of not less than P200 credited to their Flexi-Fund account. All amounts accumulated in the fund, including interest, accrue solely to the Flexi-Fund member. The program provides guaranteed returns and tax-free benefits.

To further add value to savings of Flexi-Fund members, the basis of the guaranteed yield was improved and is now based on whichever is higher of two investment yields: 1) the average rates of the SSS’s short-term peso placements; or 2) the average rate of 91-day T-bills.

A new feature, called Annual Incentive Benefit (AIB), was launched in July 2012 to encourage Flexi-Fund members to maintain their deposited savings in order to maximize earn-

ings. For 2015, those eligible for the AIB earned a 4.7-percent interest, as compared to the guaranteed yield of 1.8 percent.

The number of paying members (those with at least one contribution posted) increased from 34,075 in 2010 to 47,506 in 2015—an increase of 39 percent. Meanwhile, members’ equity nearly doubled, from P269.06 million in 2010 to P531.6 million in 2015. More important, the growth of the Flexi-Fund has helped boost the OFWs’ awareness on the need to save while they are still actively employed and earning higher incomes.

In 2010 the SSS had 13 foreign representative offices (FROs) in countries with large concentrations of OFWs, and one representative office at the Philippine Overseas Employment Administration building in Mandaluyong City to service departing and returning OFWs. By 2015, the number of FROs had risen to 22. Normally manned by just one SSS personnel, the current FROs are now staffed with roving officers who are able to reach out to OFWs assigned in far-flung areas.

To be continued For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS call center at 920-6446 to 55, which accepts calls from 7 a.m. on Mondays all the way to 7 a.m. on Saturdays.

Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send comments about this column to susiebugante.bmirror@gmail.com.

With all else failing, try rate hikes to rescue the economy

I

By Mark Gilbert | Bloomberg View

N most walks of life, it’s pretty obvious that if what you’re doing isn’t working, you should try something else. In the world of central banking, however, the strategy has been to do more of what isn’t working, providing trillions of dollars and euros of liquidity via quantitative easing, and even sending official interest rates in some countries into negative territory.

But what if low interest rates are the problem, not the solution? What if the continuous central bank efforts to add more stimulus end up suggesting that the economic outlook is so bleak that nobody in their right mind would take advantage of the largess?

Last December the Federal Reserve (the Fed) raised its benchmark interest rate for the first time since 2006, and suggested that the move would be followed by four more increases this year. Instead, it’s almost the middle of the year, and the futures market is betting the Fed is more likely to remain inactive for the next six months than raise again. “This mismatch between what we’re saying and what we’re

doing is arguably causing distortions in global financial-market pricing, causing unnecessary confusion for future Fed policy and eroding credibility,” Saint Louis Fed President James Bullard said last week.

One big problem with artificially engineering low-borrowing costs is that capital can end up trapped in so-called zombie companies. What the economist Joseph Schumpeter called “creative destruction” is less likely when money is free. That prevents economic Darwinism from weeding out the weak.

Citigroup’s Gregory Marks published a research note last week slamming central bankers for acting like doctors allowed to “perform ex-

perimental procedures on everyone who walks through hospital doors.”

He cited Rudolf von Havenstein, who was president of the German central bank when the country was gripped by hyperinflation between 1921 and 1923, in large part because he printed money with no regard for the inflationary consequences.

His name has become synonymous with muddled monetary thinking (one of the funniest market Twitter feeds around bears his name). Here’s what Marks wrote: We should be invoking Havenstein to identify the present flaw in institutional thinking around current monetary policy, specifically negative rates. In other words, the lesson here is that, unfortunately, people believed in the efficacy of a completely irrational policy, because it was put in place by a qualified and experienced policy-maker—this, instead of questioning the commonsense merit of its possible outcome.

And in a research report published earlier this month, with the title “The ECB Must Change Course,” Deutsche

Bank Chief International Economist Torsten Slok argued that the eurozone central bank should prepare to reverse its policy stance: The longer policy prevents the necessary catharsis, the more it contributes to the growth of populist or extremist politics. Normalizing rates would be seen as a positive signal by consumers and corporate investors.

The longer the European Central Bank persists with unconventional monetary policy, the greater the damage to the European project will be.

If central banks (and, indeed, financial markets) are telling the world that money will be free for the foreseeable future, what incentive do consumers or companies have to borrow today to consume or invest, rather than waiting a while to see if demand picks up? Suppose, instead, there was a coordinated announcement that interest rates in the world’s major economies would rise to, say, 2 percent in three months’ time.

Might that not grease the wheels of industry, prompting companies to borrow to invest?

Opinion BusinessMirror

opinion@businessmirror.com.ph

Behavior and insurance: How to get rich apparently The problem of moral hazard Teddy Locsin Jr.

Atty. Dennis B. Funa

INSURANCE FORUM

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nsurance affects human behavior in what has been termed as moral hazard. Each individual responds to insurance in various ways. In turn, insurance companies initiate countermeasures to respond to the insureds behavior. Moral hazard is the “name given to the negative behavior that can arise from an individual being insured.”

Moral hazard has been given several definitions. Its origin can be traced to its wide usage in the insurance industry in late 1800s. Since then, it has been used with different connotations in other fields. Moral hazard is the “circumstance that increases the probability of occurrence of a loss, or a larger than normal loss, because of a change in an insurance policy applicant’s behavior after the issuance of a policy. It may be due to the presence of incentives that induce the insured to act in ways that incur costs that insurer [but not the insured] has to bear.” It is “a situation in which one party gets involved in a risky event, knowing that it is protected against the risk and the other party will incur the cost.” Thus, under certain circumstances, “individuals will alter their behavior and take more risks.” Moral hazard “occurs when the party with more information about its actions or intentions has a tendency or incentive to behave inappropriately from the perspective of the party with less information.”

Renow ned economist Pau l Krugman defines moral hazard as “any situation in which one person makes the decision about how much risk to take, while someone else bears the cost if things go badly.” It has been defined as “the tendency of insurance protection to alter an individual’s motive to prevent loss.

This affects expenses for the insurer and, therefore, ultimately, the cost of coverage for individuals.”

The underlying premise of moral hazard is that a person “that is protected, in some way, from risk will act differently than if they did not have that protection.” Specifically, “insurance companies worry that by offering payouts to protect against losses from accidents, they may actually encourage risk-taking, which results in them paying more in claims.”

In other words, it is the “don’t worry, it’s insured” mentality.

Moral hazard may arise under two conditions: 1) there is information asymmetry where one party holds more information than the other; and 2) a contract affects the behavior of two different parties. Moral hazard is driven by “asymmetric information.” Using health insurance as an illustration, asymmetry occurs “because the insurer has less information about the health status and reasons for health-care usage of the insured than the insured themselves do.” Thus, risks may arise or increase without the insurers knowledge. And this added risk is not priced into the insurance contract.

There are three types of moral hazard: ex ante moral hazard, ex post moral hazard and insurance fraud.

Ex ante moral hazard is known as an “insurance-induced increases in

risk-taking.” It espouses that “people engage less in preventive behaviors that are costly and hard to maintain when they obtain insurance.” It (taking in more risk) occurs before an incident or loss takes place. Hence, ex ante. It has been suggested, however, that ex ante moral hazard is largely theoretical and that few empirical investigations have been conducted to support this theory. In a study by Courbage and de Coulon in 2004, using data from the British Household Panel Survey, it was concluded that “people with private-insurance coverage are more likely to exercise and are less likely to smoke.” A study by the Network for Studies on Pensions, Aging and Retirement (Netspar) concluded that “insurance does not seem to cause excessive risk-taking.”

Rather, “ex ante moral-hazard effects are only found for preventive behaviors.” Meaning, an insured “is less likely to take his vitamin pills when he obtains insurance—but not that he would start to smoke or use drugs.”

Ex post moral hazard, on the other hand, espouses that there is an “insurance-induced increases in usage of insured services.” There is an “increase in people’s use of a service when it is covered by insurance, compared to when it is not.” Thus, people who have health-care insurance are more likely to visit a doctor, compared to when they do not have health-care insurance. Insurance “removes all or part of the incentive to restrict the use of insured services.”

It occurs after an incident has taken place. Hence, ex post.

Insurance fraud also stems from asymmetry of information “where the policyholder abuses the trust that the insurer is obliged to place in him or her.” The Insurance Information Institute, a US industry association, has estimated in 2010 that 3 percent to 10 percent of US health-care expenditures are due to fraud, equivalent to about $77 billion to $259 billion.

Insurance companies have responded to the presence of moral hazard by: 1) adding incentives and 2) penalizing bad behavior. Incentives are illustrated when insurers will not insure for the full amount or providing incomplete coverage against loss or when insurers make it difficult to make claims. Thus, the insureds should share in the cost of hazardous or risky behavior. In motor-car insurance, there are the deductibles. The car owner must pay for some or all of the damages. Other risk-reduction incentives include exclusions and experience rating. Insurance companies also use actuarial databases in underwriting.

Dennis B. Funa is currently the deputy insurance commissioner for Legal Services of the Insurance Commission. E-mail: dennisfuna@yahoo.com.

Free fire

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HO doesn’t wanna get rich—really rich? Then study for it. But study what? It depends on how you wanna get rich.

By stealing? Take law. It qualifies you for government. It licenses you to extort through the courts.

It used to be that if you wanted a modest but dependable living consistent with honor and combined with scholarly serenity, you took up law and became a judge; but in the past 50 years, law is how you screwed other people for their money and qualify for public office to rob them blind.

In Africa you don’t have to study anything; you just need a gun and plenty of others like you; next thing, you are president of a country.

In China you join the Communist Party and are shoved into lowly

government service in far-off places until you show extraordinary talent. Then they shove you higher up, like mayor of Shanghai—all by controlled but still really popular elections and without using Smartmatic operators. Only then can you steal, or rather have anything to steal. But you run the risk of getting shot in the head for corruption.

In Russia you undertake intense studies in literature and science and qualify for what was called the KGB. Then you become

Wednesday, June 22, 2016 A11

Putin—the new Czar.

But generally, in modern countries, you take engineering. Laren Davidson in the Telegraph reports that 22 percent of the world’s richest men studied engineering in university—two times more than any other course taken by billionaires.

Next is a business education, which 12 percent of rich people took in school, even though I strongly discourage hiring these guys as bankers. While they can easily spot where the most money can be made, they lack the moral education not to go for it and the plain common sense that they will be caught. The best bank presidents have been lawyers, because they know how crimes are committed and also how easily you get caught. But none of this is new.

Our grandparents told us to take engineering to show you are smart.

Or commerce to show you are serious about making a living. If you are not smart, or you are still confused, then take law, the old people said. That gives you five more years to think

‘Green transport’ vs transport modernization Michael Makabenta Alunan

on the contrary

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he Department of Transportation and Communications’s (DOTC) transportation modernization program for the jeepney sector is laudable with its intention to achieve roadworthiness and clean emissions, but the over 60,000 jeepney units in Metro Manila alone fear modernization means “phaseout” of their vehicles.

Green-jeepney groups emerge But what if the jeepney sector manages to comply with government’s emission standards and refurbish the vehicles into something even better than brand new, will they still be subjected to forcible “modernization,” which, to them, is a euphemism for “phase-out?”

A new group of jeepney-based organizations has emerged calling itself the National Jeepney Federation for Environmental Sustainable Transport (NJFEST) led by its National Chairman Ronald Baraoidan, who is also chairman of the Guadalupe First Taguig Integrated Operators and Drivers Associations Inc. Some of his other member-organizations are the Tulay Ephsing Jeepney Operators and Drivers Association Inc., Tulay Bonifacio Jeepney Operators and Drivers Association Inc., the Dominga-Pasay-Libertad JODA, the Dian-Evangelista JODA, Market-toPateros JODA, Hipada, and Joprex.

Ka Ronald expects the new group to “generate more JODA members, as they seek viable and practical solutions by simply maintaining a cooperative but critical position in dealing with the government.”

Another transport federation, the Luzviminda Transport Federation headed by Lisa Lorenzo, also wants to go green transport to comply with regulations, but is critical of the DOTC’s transport modernization.

NJFEST elected to PCA

HE explained that their name alone spells out DOTC’s “Environmental Sustainable Transport” policy thrust.

They have, thus, also been attending clean-air activities.

A token delegation attended the air-shed governing board meeting and elections held recently. On June 14 and 15 Ka Ronald and his key leaders attended the “Eighth Annual Clean Air Forum and 2016 General Assembly of the Partnership for Clean Air [PCA],” where their group NJFEST got elected to the board.

Engr. Dave Garcia of ATIN’TO Development Services, a technical arm of NJFEST, said “this will be the first time that the voice of the marginalized transport sector will be represented directly in civil society-dominated organizations, like PCA.” After all, based on the 2015 statistics issued by Engr. Jean Rosete of Environmental Management Bureau (EMB), road transport or mobile sources now account for 92 percent of total air pollution in Metro Manila.

This figure is believable with the massive volume of vehicles sold every year and the increasing transfer of smokestack factories to the industrial zones in the countryside and the current ban on open burning of household wastes, he added.

Widen not limit options

AT the PCA workshop, Ka Ronald questioned the basis of the 15-year old and above vehicles facing voluntary phase out this year, and forcible phase out by 2018. He argued that “there are brand-new vehicles that are terrible smoke-belchers, while there are well-maintained vintage vehicles that do not emit much smoke.

So it is not the age, but how they are maintained.”

He said the DOTC order “limits our choices to Euro 4 or higher-

compliant vehicles with combustion engines that can be powered by alternative fuels, such as electric, hybrid, LPG [liquefied petroleum gas] and CNG [compressed natural gas].”

Moreover, Transport Assistant Secretary Sherielysse Bonifacio sent jeepney groups a letter, emphasizing further that these technologies “must be supplied by a manufacturing, assembly, importing or dealer company duly accredited by the LTO [Land Transportation Office].”

In the same way that the Department of Energy sets the fuel standards, or the Department of Environment and Natural Resources (DENR) sets the emissions standards, why can’t DOTC simply also set similar standards, instead of insisting on a few “accredited suppliers,” which will definitely end up more favored.

Compliance be done by phases

KA Ronald argues in Pilipino, “Of course, who doesn’t want clean air, but the options seemingly forced on us are limited to electric and LPG engines, as CNG and hybrids are not readily available.”

“In fact, we favor electric jeepneys but at P1.2 million to P1.5 million per unit, there is no way operators and drivers can afford them,” he said.

Dave Garcia estimates that amortizations of about P1,000 to P1,600 a day, depending on the usual amortization periods of three to five years, are way above the standard jeepney operators’ boundary income of about P600 a day per jeepney. LPG engines cost over P700,000 will mean amortizations of about P750 a day for three years, or about P500 for a five-year amortization period.

Garcia noted that, while we can encourage “electric vehicles, LPG engines, hybrids, particularly for the private sector, the options for complying with emission standards must be widened and relaxed.”

Perhaps, escalating phases of intervention can be done by the jeepney sector from appropriate preventive maintenance, to the use of emissionreducing fuel additives and lubricants, gadgets that enhance fuel-air ratios for better combustion and, thus, lower emissions, better fuel quality and a host of other forms of technologies,

China’s clampdown: A vile persecution of Hong Kong booksellers

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N the last year, the Chinese authorities have cracked down on Hong Kong’s once-raucous publishing industry. At least five prominent booksellers have disappeared—one from a busy Hong Kong street, another from a border area and one at a seaside apartment in Thailand. Others were picked up after crossing into China for personal or professional business.

The detention of these men— China insists that they all entered China “voluntarily” to help authorities investigate subversive

authors—is a violation of the “one country, two systems” framework worked out with Britain when the former colonial power returned the territory to China in 1997. Under that treaty, Hong Kong was supposed to remain relatively free from Beijing’s authoritarian control.

Instead of guaranteed autonomy, the disappearance of the booksellers highlights Hong Kong’s vulnerability. The kidnappings have profoundly shattered the illusion in Hong Kong society that its democracy would continue to thrive

things over after college.

But the best training to be a billionaire is dropping out of the best schools. But you cannot drop out unless you got in first through tough entrance exams. But you need to get out before the rigor damages your mind and dries up your imagination. Thus, the richest people never bothered to get a degree in engineering or business for that matter, but they studied it for a while; like Bill Gates, with a fortune of $79 billion, and Mark Zuckerberg, with $33.4 billion. Both went to Harvard and dropped out.

But a third of all billionaires came straight out of high school.

It is a dangerous route to take because, out of 6 billion people on earth, there is only one Bill Gates and one Mark Zuckerberg and one Jack Ma. The luckiest billionaires got that way doing what they enjoyed and it just happened to make plenty of money doing it. So, in the end, it is luck but also preparation for when good luck happens.

under Chinese control.

Lam Wing-kee, the former manager of Causeway Bay Books, resurfaced in Hong Kong last week after a half-year absence. On a visit to the mainland last October, he was seized at a border crossing. During the time Lam was gone, his store closed. It had been popular with locals and foreigners because it was a place where you could find salacious biographies and exposés of the Chinese elite that weren’t available in China.

Lam said Chinese authorities

The detention of these men is a violation of the “one country, two systems” framework worked out with Britain when the former colonial power returned the territory to China in 1997. Under that treaty, Hong Kong was supposed to remain relatively free from Beijing’s authoritarian control. Instead of guaranteed autonomy, the disappearance of the booksellers highlights Hong Kong’s vulnerability.

allowed him to return to Hong Kong to retrieve a hard drive that contained information about dissidents and its customers. Instead of returning to the mainland with the information, Lam called a news conference on Thursday and revealed details about his forced internment in China. He spoke of his five months in solitary confinement before being moved to an isolated apartment. He told of 24-hour surveillance and signing away his right to a lawyer, forbidden to have contact with his family. He even

many of which have been developed by local inventors and innovators who also deserve to be recognized for contributing their share.

Competition not collusion through techno challenge

While government is squeamish about endorsing technologies, lest it be accused of graft, under Section 11 of the Clean Air Act, the government must make available to the public all the information, best practices on preventive maintenance and technologies on pollution control. Effectively, when you endorse all, you are not biased for only one.

And there is nothing wrong pushing for better technologies (i.e., cell phones over outdated beepers), provided the government does not endorse a company or brand. Preferably, government carries technologies verified by Department of Science and Technology (DOST) Environmental Technology Verification as agreed under the DENR-DOST Joint Administrative Order 1, Series of 2006.

With the Special Vehicle Pollution Control Fund now about P8.5 billion coming from 7.5 percent of the road users’ tax apart from the Air Quality Management Fund now in the hundreds of millions, there are enough funds for the government to fund pollution research on verifying all technologies, vehicles, fuels, lubricants, etc., and conducting a rigorous techno challenge. This will concretely move the unimplemented Section 15 on Air Pollution Research.

Environmental Management Bureau -National Capital Region Director Minda Osorio emphasized the role of the local government units as provided under Section 36 as the main implementers of Clean Air Act at the local level. She also stressed the need for violators of antismoke-belching to attend seminars on pollution control, which are supposed to be required as part of the penalties under Section 46 of the Clean Air Act. She said this is one of their action plans, and with President-elect Rodrigo R. Duterte’s marching orders, they need to act soon.

Under the new administration, let’s not “do dirty” the air.

E-mail: mikealunan@yahoo.com

signed a “confession” implicating one of his fellow captives.

Now safely back in Hong Kong, Lam is adamant he will never return to the mainland of his own free will. Meanwhile, his harrowing account confirms the worst suspicions most Hong Kong citizens have about Beijing and its intentions.

His bravery is commendable, but it is up to the international community to insist that China honor its international agreements and respect the rights of the citizens of Hong Kong. TNS

2nd Front Page BusinessMirror

A12 Wednesday, June 22, 2016

Biz leaders give eco agenda to Duterte T

HE business community presented its counter 10-point economic recommendations to the Duterte administration at the close of the two-day business forum-cum-workshop, dubbed “Sulong Pilipinas,” held in Davao.

Top bu si ness leaders s y nthesized their various proposals to 10 recommendations for the Duterte administration, after consultation with the Presidentelect’s economic team.

At the close of the forum-workshop, the recommendations enumerated by Philippine Chamber of Commerce and Industry President George T. Barcelon were: 1. Adoption of a comprehensive tax-reform package, including the reduction of corporate-income tax and personal-income tax. Capitalgains tax rates should be reviewed.

Tax systems should be simplified for micro, small and medium enterprises (MSMEs). To offset the revenue loss that will result from

these reforms, excise tax should be increased by expanding the definition of luxury goods, among others.

2. Implementation of a national ID system for improved targeting of social services. This would prevent double counting and leakage of social benefits. There would also be proper identification of informal settlers.

3. Streamlining of business permits and licenses to improve ease of doing business and to reduce corruption. Automation should be introduced in the process to reduce human intervention. The Philippines’s National Single Window project should be expanded. This will also entail extending validity of various permits and licenses, as well as automatic approval after a certain period of time

if the government agency does not act on the approval.

4. Improvement of Internet telecommunication services to be on a par with Asean neighbors. This would entail amendment of Republic Act 7925, the law governing the Philippine telecommunications sector.

With the increase of wireless mobile devices, a law should be passed to regulate mobile-device services.

Moreover, the business community suggested the removal of the need of telecom players to secure a congressional franchise.

5. Delivery of support systems and services to fishers through financing, incentives, irrigation systems, postharvest facilities, improved farm-to-market roads to develop the potential of agriculture.

6. Implementation of responsible mining, with local value-adding component. It was suggested that the country should gradually eliminate exports of mineral ore to localize value-added processing.

This would spur the development of iron and steel, and copper wire and tube industry.

7. National strategy for industries where the country has greatest

competitive advantage, specific sectors and areas where workers have a competitive advantage to optimize resources. This would also mean a clustering strategy where specific activity, such as in agri-processing and manufacturing, would be concentrated. There should be a shared-cost mind-set adapted by MSMEs to lower costs, and consolidate requirements of roads and airports in the cluster.

8. Improvement of transport network across the country to improve connectivity. Suggestions include the development of regional airports and Sasa port. On roads and mass transport, recommended as actionable items are the North South railway project, Cebu bus rapid-transit system and Mindanao rail system, among others.

9. Review Conditional-Cash Transfer Program.

10. Remove bottlenecks in infrastructure and respect the sanctity of contracts.

“We came up with these recommendations after two days of work.

We were asked to vote for the priorities. We would like to think these would guide our country to better days,” Barcelon said. Catherine N. Pillas

www.businessmirror.com.ph

WHAT BREXIT WOULD MEAN FOR EMERGING ECONOMIES IN ASIA

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hile a United Kingdom (UK) exit (Brexit) from the European Union (EU) would almost certainly cause turmoil in Europe, its effects on Asian economies, including China, the region’s largest, may be much more benign.

That’s according to a note by Londonbased Capital Economics, which said a Brexit would cause at most a GDP drop of 0.2 percent across Asia.

The research company based its finding on a worst-case scenario estimate by the National Institute of Economic and Social Research, a London-based think tank, which said Brexit would reduce British imports by 25 percent worldwide within two years.

Exports to the UK presently account for only 0.7 percent of Asian countries’ GDP, according to Daniel Martin, senior Asia economist at Capital Economics.

“Even a 25-percent decline in UK imports would knock less than 0.2 percent off from regional GDP.” Only a few economies in Asia would see a noticeable effect on growth, Martin said. Examples include Cambodia, Vietnam and, particularly, Hong Kong, which have stronger trade ties with the UK. “In addition to merchandise exports, Hong Kong’s exports of services to the UK are worth another 2.3 percent of GDP,” he said. Martin concludes that Brexit would have only a limited impact on emerging Asia, and says the main risks to the region lie elsewhere. They include

the possibility of a sharp slowdown in China and a “messy unwinding” of the debt bubbles in some countries.

China can weather Brexit

In a separate paper, Capital Economics said the effects of Brexit would be equally subdued in the region’s largest economy.

China’s exports to the UK are equivalent to just 0.5 percent of Chinese GDP, Chang Liu and Julian Evans-Pritchard wrote in a note published on June 17.

“China is also well-placed to weather any post-Brexit sell-off in financial markets,” they said. “Because China’s capital account remains largely closed, the financial linkages between China and the rest of the world are fairly limited. Meanwhile, large foreign reserves mean the authorities could support the renminbi in the event that it came under renewed downward pressure.”

Nevertheless, Asian companies have made their preferences clear in favor of Britain remaining.

Eric Delomier, an investment specialist at Capital Group’s Singapore office, said there would be geopolitical and trade implications for the region. “The UK leaving the union would be seen overall negatively from a trading perspective by most Asian countries,” he said. “Also, China has been one of the leading foreign investors into the UK, and clearly part of the appeal for Chinese investors is the broader access to the EU.” Bloomberg News

Duterte inks first PPP deal of Davao Continued from A1

proponent on port development.

This is one of his last acts as mayor of Davao City.

As local chief executive, Duterte—joined by representatives of the City Council and the members of the Davao City PPP Board (DCPPPB)—sig ned a 50 -yea r joint-venture agreement (JVA) with Mega Harbour Port And Development Inc. This is the first PPP contract entered into by the Davao City under its 2015 amended PPP ordinance.

The Davao Coastline and Port Development Project aims to spur the economic growth of the city.

Davao envisions to be the premier socioeconomic and tourism center in Mindanao, as well as in the East Asia-Pacific region. The project will support the city’s plan of becoming the gateway of commerce and trade in the Davao Gulf area, even for the whole of Mindanao region.

The project, which will be situated on a 214.61-hectare land to be reclaimed by Davao City as project owner and the proponent as project developer, shall accommodate a modern and state-of-the-art commercial port for containerized and noncontainerized shipments, with cargo-handling equipment and information-technology infrastructure. An industrial park, a commercial complex, and residential lots and houses will also be constructed thereon.

According to the project study submitted by the proponent, the unprecedented demand due to increased economic activity in the region requires better infrastructure and logistics support for its industries and services sectors, which the region’s main public seaport and secondary seaports cannot fully accommodate, especially bigger cargo-movement requirements.

Under the JVA, the reclamation and vertical development will be undertaken by the proponent at no cost to the city. The proponent

shall also provide the relocation site for the affected residents at the commencement of the project. The informal settlers shall be tapped as source of skilled and unskilled laborers during the construction phase of the project.

The project, to be jointly undertaken by the city and the private sector, shall contribute to the government’s efforts to reduce the high underemployment rate by helping attract multinational businessprocess outsourcing companies and call-center operators to set up shop in Davao City through the provision of an industrial park.

Aside from these benefits, the city government is expected to increase its income, in anticipation of the new establishments and business enterprises to be catered in the industrial park and commercial areas. The city’s increased income will consequently translate into increased tax revenues for the city government. With more revenues, the city will be less dependent on the internal revenue allotment from national government and will have more funds for basic and social services.

This first PPP of the city truly advances the true north of PPPs —to promote the general welfare and provide for better quality of life of the people. The City Council and the multisectoral DCPPPB, in approving the terms of the JVA and recommending approval to the mayor, respectively, made sure this mandate and the pro-people and pro-change stance of the city will be respected and advanced.

After the signing of the JVA, the city government will forward the documents to the Philippine Reclamation Authority for its study and recommendation to the board of the National Economic and Development Authority for its approval.

Davao City joins 70 other local governments in pursuing PPPs using their own PPP ordinances. The

provinces of Bataan and Nueva Ecija, and Calamba entered into JVs for their government center and capitol redevelopment, the province of Quezon on bulk water, hydropower and wind power, and the cities of Pasay, Parañaque and Manila, and Cordova Municipality on reclamation. Manila and Valenzuela cities entered into JVs for their markets, Iloilo City and Batangas City on terminals, and Cebu City and Cordova Municipality together for the third bridge in Cebu.

The message of the incoming President is clear. He believes in the importance and criticality of PPPs to plug infrastructure deficits.

Dramatic change can be brought about through PPPs. He has demonstrated that local governments can be trusted and that they possess the competencies to pursue iconic and high-impact PPP projects. By signing the JVA, where the proponent was chosen through the unsolicited proposal route, he subscribes to this alternative route of selecting the proponent.

The future of PPPs in the country is bright. The nation is hopeful that under the Duterte administration, Filipinos will see a new international airport, waste-to-energy projects, more expressways, more water-related projects, monorail and subway systems, more socialized housing units, health-care facilities, more land development, more economic zones and more renewable-energy arrangements.

The signing of this JVA could not have come at a more auspicious time. It signals the “warm-up” to the realization of the 10-point socioeconomic agenda, the fourth agenda being to “accelerate annual infrastructure spending to account for 5 percent of GDP, with PPP playing a key role.” This showcases “Sulong Pilipinas: Hakbang Tungo sa Kaunlaran.” This is definitely a good first step not just for Davao, but also for the whole country.