Businessmirror march 02, 2017

roars and disdain Democrats remain seated as Republicans applaud, while President Donald J. Trump speaks to a joint session of Congress at the Capitol in Washington on February 28. Trump looked out on a chamber divided, turning often to his left, where the cheers sustained him. Story on B3. Doug Mills/The New York Times

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FEBRUARY PMI SHOWS FACTORY EXPANSION AFTER MONTHS OF DECLINE Crafting job-creation

Manufacturers shift into recovery mode

By Bianca Cuaresma

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@BcuaresmaBM

oncerns over the weakening peso and subsequent rise in the cost of imported raw materials failed to dissuade Philippine manufacturers from pursuing avenues to grow their operation in February, according to the latest Purchasing Managers Index (PMI) released by Nikkei and international think tank IHS Markit.

53.6

The Philippines’s PMI in February, the second highest in the region The Philippines’s PMI recovered in February to 53.6, from 52.7 in January. The country’s PMI had been on a steady decline, slowing down to 56.3 last November, then 55.7 last December.

Continued on A12

strategies in a segmented globalizing economy Rene E. Ofreneo

laborem exercens

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he International Labor Organization (ILO), which is celebrating its centennial in 2019, has been organizing policy and research consultations on what the ILO dubs as the “Future of Jobs”. This theme has attracted the attention of cyberoriented futurists who imagine a world dominated by information and communications technology (ICT) programmers, apps designers, robotics engineers, big-data

aggregators (like the Google people who produced the first “autonomous” pilotless car), biolife science specialists replicating human organs via 3D-printing technology and so on. To a certain extent, this is already happening in some parts of the world, as the cyber-physical Fourth Industrial Revolution continues to intensify.

The truth is that the labor market in the Philippines, and most Continued on A2

House wants to extend QR on rice–Piñol

By Jasper Emmanuel Y. Arcalas @jearcalas

& Elijah F. Rosales

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the broader look

Microfinance in PHL at crossroads »A6-A7 PESO exchange rates n US 50.2550

@alyasjah

he House of Representatives is not keen on amending a law that would pave the way for the scrapping of the quantitative restriction (QR) on rice, despite its scheduled expiration on June 30, based on what Manila committed to the World Trade Organization ( W TO), according to Agriculture Secretary Emmanuel F. Piñol.

In a meeting on February 20, Piñol said House Speaker Pantaleon D. Alvarez expressed support for the Department of Agriculture’s (DA) bid to extend the QR on rice for two years, or until 2019.

Aside from Alvarez, Piñol said

Agrarian Reform Secretary Rafael V. Mariano and former National Irrigation Administration (NIA) chief Peter Tiu Laviña also joined the meeting.

“The last time I spoke with Speaker Alvarez about the lifting of the QR, the position of Congress is that they don’t want to lift it. Thus, I think, Congress will not move to amend Republic Act [RA] 8178,” he told reporters in a recent interview.

“The DA has to fast-track our solar-powered irrigation projects, because the Speaker has committed to support our goal of making the country rice sufficient in two years,” Piñol added.

Earlier, the DA chief made an assurance the Philippines will not be flooded with cheap rice imports after the QR on rice expires on June 30. The

QR is a nontariff barrier that the WTO has allowed the Philippines to enjoy for more than two decades.

Piñol said RA 8178, or the Agricultural Tarrification Act of 1996, would serve as the “saving grace” and “refuge” of Filipino farmers. Under RA 8178, rice is the only farm commodity that is protected by the QR. Sans an amendment, Piñol said earlier the Philippines should not be forced to allow the entry of more rice imports. “There cannot be an unregulated entry of imported rice to the country until such time that the law is amended.”

However, the Cabinet Committee on Tariff and Related Matters (C TRM) has already decided to abandon plans to ask for an extension of the rice QR, according to the

DA chief. The CTRM is cochaired by the secretaries of trade and the National Economic and Development Authority (Neda).

‘No consultation’

An alliance of agricultural workers in the country lambasted the Neda for not pursuing the extension of the QR on rice in a forum held at the House of Representatives on Tuesday.

Romeo C. Royandoyan of Alyansa Agrikultura said the alliance is “strongly opposed” to the scrapping of riceimport caps, saying this would expose farmers to “unfair competition”.

“Before the government even considers terminating the QR, they should prepare programs to make our rice farmers competitive,”Royandoyan said.

See “House,” A2

n japan 0.4475 n UK 62.3765 n HK 6.4737 n CHINA 7.3165 n singapore 35.8682 n australia 38.5305 n EU 53.2552 n SAUDI arabia 13.4056

Source: BSP (1 March 2017 )

A2 Thursday, March 2, 2017

BMReports BusinessMirror

Crafting job-creation strategies in a segmented globalizing economy Continued from A1

countries of the world, has been changing in a radical and even unpredictable way since the turn of the millennium. There are neverending changes in the world of business and in the manner by which work is organized and done. There are at least two major drivers: First, changes in technology alter the demand for certain products while the varied applications of technology in the work process create changes in the size and composition of the work force. For example, in the telecom industry, the rise of the wireless and Internet communication technologies has transformed the industry several times over, creating new telecom products and services, such as the ubiquitous cellular phones and the endless applications being developed by smart ICT professionals.

The downside for the telecom workers: less and less job security and fewer and fewer number of workers, as what has happened in the case of the PLDT and its union. In the 1990s the PLDT union had a membership of around 20,000; today, its ranks have gone down to less than 2,000.

Second, the liberalization of the economies of the world—via free-trade rules of the World Trade Organization and other trade

arrangements—has caused “structural changes” or “shifts” in different industries and in the economy.

The freer flow of goods and services means weaker competitors have to shape up or fold up, or merge and consolidate with other partners.

There are winners and losers in business and in the jobs market.

This is what America and some European countries have found out: their industrial base has been hollowing out because their own multinationals, through their GPNs/ GVCs, have been taking advantage of borderless trading and investment regimes to outsource production of labor-intensive processes in cheaper manufacturing platforms, such as those found in China, India and so on. The movement of production can also be continuous. For example, Philippine-sewn garments boomed in the 1980s and 1990s, thanks to investments by American garments producers-retailers; however, the industry has since declined because these investors have transferred production to South Asia and other Southeast Asian countries, such as Cambodia and Myanmar, where labor is cheaper.

Lately, free-trade liberalization has met an enemy in the leader ironically of the world’s leading proponent of free-trade liberalization. Because of the erosion of its domestic manufacturing, Donald

J. Trump seeks to end business and jobs outsourcing to the outside world under his “America First” policy.

Will Trump succeed in this return-to-America program and build unilaterally a new Americanled global trading system where the rules are in conformity with America’s development priorities?

The answer is uncertain.

But for the Philippines, the policy challenge is how to create more and better jobs in a global economic order that is increasingly being shaken by new advances in technology, protectionist policies by the Trumps of the world and geopolitical imponderables in the Middle East (which hosts the largest number of OFWs) and elsewhere. In this context, the national jobs creation program should not be dependent simply on a narrow jobs-creation strategy, such as hitching our fortunes only to the value chains of the multinationals, which have their own narrow GPNs/GVCs to pursue, and the PPP programs of a dozen big domestic companies bidding for huge infrastructure projects.

It should also be pointed out that the Philippines has a segmented economy. This is fully reflected in the structure of the labor market and the distribution of the work force in terms of employment. For instance, ILO researchers and the Employers Confederation of the

EASTERLIES AFFECTING THE EASTERN SECTION OF SOUTHERN LUZON, VISAYAS AND MINDANAO NORTHEAST MONSOON AFFECTING NORTHERN LUZON (As of 5:00 PM - Mar. 1, 2017)

Philippines estimate that as much as two-thirds of the 42 million labor force are in the informal sector or informal economy, where work is generally precarious and unprotected. Workers in this huge catch basin are not covered by the value chains of the multinationals in the electronics assembly, auto-parts production and garments-sewing industries. Nor are they part of the surging call center/BPO sector. As the proposed bill on the “Magna Carta for Workers in the Informal Economy” filed by Sen. Juan Edgardo Angara and Rep. Karl Nograles put it, the informal sector includes the huge army of landless rural poor, small farmers, the street and ambulant vendors, the coastal communal fisherfolks, the home-based workers, indigenous peoples, unregistered micro entrepreneurs, unregistered service workers and other disadvantaged workers that are not usually listed in the Philippine Standard Occupational Classification. Each segment has their own set of unique problems, which cannot be solved by offering a one-size-fits-all policy prescription, like free education or skills training.

As to the formal sector, a large number of workers complain that their jobs are increasingly being subjected to “flexibilization”, a labor economic term for short-term

hiring, which trade unionists have translated to mean “contractualization” and adoption of the endo (end of project) hiring system.

This system is common in the retailing-wholesaling sector and service industries that survive on the strength of the spending by families sustained by OFW remittances.

Overall, it is abundantly clear that liberating the millions of informal-sector workers and those occupying contractual endo jobs from job insecurities and poverty requires a bolder program of job creation in an increasingly unpredictable globalizing world.

As pointed out, the Philippine labor market is highly segmented because the economy itself is segmented. Hence, a policy on value-chain participation in an industry or enterprise cannot be a solution for the other segments.

On the other hand, there is the real danger that automation can erode the jobs of those in the bottom of the formal sector of manufacturing, such as in the electronics and auto parts assembly, and those in the lower end of the call center/ BPO sector (for example, those doing simple customer services to customers in America).

An inclusive and sustainable economic and jobs creation program for the Philippines is still waiting to be born.

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House. . .

Continued from A1

He said he is “angered” by the Neda’s proposal to just lift the QR on rice and replace import caps with a specific tariff.

Royandoyan said his group sought to hold a consultative meeting with the Neda in 2011, 2013 and 2016, but they were “ignored” by the agency. “If only the discussion materialized, the government and stakeholders could have prepared measures on how to address the impending expiration of the QR.” “Before they decide on what to do with the QR, they should have consulted the rice farmers first,” Royandoyan added.

In a presentation, the Neda said it had recommended the provision of financial support for rice farmers who will be affected by the scrapping of the import caps.

However, Royandoyan said this would not materialize, as the government cannot even afford credit support and seed funding for rice farmers. “I don’t know what’s complicated for the Neda to understand.

We cannot open our country to rice importation as long as our local industry is uncompetitive.”

Last year Neda Secretary Ernesto M. Pernia said the extension of the QR on rice would entail the grant of concessions to member-countries of the WTO that would agree to Manila’s request.

“The Philippines could be forced to bring down tariffs on other commodities, such as pork and milk, as a trade off. Negotiators need to bargain. Also, rice will become more expensive and farmers will continue to be complacent due to the absence of competition,” Pernia said.

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The Nation BusinessMirror

Koko vs Kiko over ouster of LP senators from key committees

By Butch Fernandez

@butchfBM

S

ENATE President Aquilino L. Pimentel III and Sen. Francis N. Pangilinan, Liberal Party president, are at loggerheads over the ouster of the four-member LP bloc from leadership posts and committee chairmanships in a recent revamp carried out by majority senators.

This, after ousted Senate President Pro Tempore Franklin M. Drilon, another ranking LP stalwart, griped that the four-member bloc that also include Sens. Bam Aquino and Riza Hontiveros were “kicked out” of their majority posts, despite voting to install Pimentel to the Senate presidency earlier.

Pangilinan protested Pimentel’s claim that LP senators were derailing passage of pending measures, including bills endorsed for early approval by the Duterte administration.

Pimentel justified the LP senators ouster from leadership posts in a minirevamp carried out in Monday’s session, saying “clear lines have to be drawn” to best achieve the Senate’s legislative agenda.

The Senate President complained their lawmaking task was being “hampered by the blurring of lines between the majority and minority to the detriment of public interests”, as there have been instances where the members of the majority bloc controlling key committees “ended up divided, instead of closing ranks”.

But Pangilinan disputed Pimentel’s claim. “How can work in the

Senate be hampered by the now minority members, including four from the Liberal Party, when almost 70 percent [20 of 29] of the bills now a couple of steps into becoming a law are being defended by us?”

Pangilinan dismissed as “simply untrue” Pimentel’s complaint that LP senators were hampering the legislative agenda. “How is this possible when two out of the administration’s three priorities—death penalty and the lowering of criminal age of responsibility—are with the justice committee and not our committees?”

At the same time, Pangilinan pointed out those who voted against the Palace-proposed 2017 national budget—Sens. Panfilo M. Lacson Sr. and Sherwin T. Gatchalian—were not LP members. He added, “The only other law passed so far was on the Sangguniang Kabataan, and it was sponsored by LP Sen. Bam Aquino.”

Pangilinan, likewise, dismissed as “inaccurate and factually erroneous” Pimentel’s claim that the reorganization of Senate committees was due to hampered work in the chamber. “On the contrary, it was undertaken to ensure that the Senate toes the line on issues that may have a negative impact on the administration,” Pangilinan said.

He added, “Nevertheless, despite having a different stance on several life-and-death issues that impact our people’s lives, we remained with the majority in the Senate, because this precisely allowed us to work as our oath of office requires.”

Editor: Dionisio L. Pelayo • Thursday, March 2, 2017 A3

Dangerous to consider ‘precursor chemicals’ as drugs–chemists

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ALAMBA CITY, Laguna— Chemists cautioned lawmakers against equating so-called precursor and essential chemicals used in manufacturing illegal drugs with the narcotics themselves, saying this is “not scientifically rational” and could have dire consequences not just on the economy but people’s lives, as well.

At the same time, the Philippine Federation of Chemistry Societies (PFCS), in a statement, urged Congress to “use science in drafting laws”, especially crucial legislation like the bill restoring capital punishment.

The statement was posted on the web site of the Integrated Chemists of the Philippines, http://www. icp.org.ph, one of four organiza-

tions that compose the PFCS. The others are Kapisanang Kimika ng Pilipinas, Philippine Association of Chemistry Teachers and Philippine Association of Chemistry Students.

While acknowledging the importance of House Bill 001 to address the problem of dangerous drugs, the chemists said, “we oppose the provisions that equate dangerous drugs

themselves with precursor and essential chemicals”.

“Because of their importance in industry, agriculture, health, education and research, inclusion of these chemicals must be done with adequate scientific knowledge”, they added, making the following points: The bill does not define and identify what are precursor chemicals and essential chemicals. Virtually all precursor chemicals and essential chemicals are multiuse chemicals.

Precursor chemicals may also be precursors to other important products, such as pharmaceuticals, fragrances, cosmetics, agrochemicals and others. Likewise, essential chemicals may also be essential for many other purposes, including household and health uses. The cost to the economy can be staggering. The proposed bill is not scientifically rational.

Mere possession of a precursor chemical or an essential chemical is not equivalent to pos-

session or manufacture of dangerous drugs. The proposed bill will criminalize legitimate users, and raise the cost of goods and damage the economy. This will also provide many opportunities for corruption.

The bill equates pure substances with mixtures. It does not distinguish a compound that is relatively pure with its presence in an essential oil or spice at 1-percent composition. It will criminalize possession of many medicinal plants and cooking ingredients.

“This topic of precursor chemicals and essential chemicals should be discussed extensively together with experts in the field and with industry manufacturers,” the statement urged.

It was signed by Armando M. Guidote Jr., PFCS president; Fabian M. Dayrit, ICP president; Nestor S. Valera, KKP president; Jose M. Andaya, PACT president; and John Michael Porca, PACS president. PNA

Red Cross on full alert on Fire Prevention Month

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IGHTEEN fire trucks, 12 water tankers and thousands of trained emergency responders nationwide—the Philippine Red Cross (PRC) is on full alert round-the-clock to respond to fire incidents that are expected to come out this fire season.

March marks the beginning of the summer season in the country and, according to the Bureau of Fire Protection (BFP), the most number of fire incidents are usually recorded on said month.

This year’s Fire Prevention Month theme, “Buhay at Ari-arian ay Pahalagahan, Ibayong Pag-iingat sa Sunog ay sa Sariling Pamamahay Simulan”, reflects the BFP’s commitment to raise public awareness about the importance of fire prevention.

“As we always say, prevention is key when it comes to fire safety,” PRC Chairman Richard J. Gordon said. “But it’s also smart to make sure that all members of your household know what to do in case there’s a fire emergency.”

Below are PRC-recommended tips on how to reduce risks in case of fire: Make sure every member of the household knows where the fire escape is.

Agree on a meeting place at a safe distance from the home.

Teach everyone at home how to use a fire extinguisher.

If smoke, heat, or flames are blocking your exit route, stay in the room with the door closed.

If you can, move close to a window and wave something bright (a flashlight, glow stick, or a brightly colored cloth) to signal for help.

Once you are out, stay out.

If you haven’t already called the fire department, call them once you make it to safety.

“Fire is preventable,” PRC Secretary-General Oscar P. Palabyab said. “But it pays to be aware of firesurvival tips, especially during the summer, when most fire incidents unfortunately occur.”

“Since January 2017 the PRC has helped out in 38 fire incidents in the National Capital Region [NCR],” Gordon added. “Besides the water tankers, rescue trucks and volunteers, the PRC also provides other assistance, such as food and

nonfood items and psychosocial support to displaced families in evacuation centers.”

The PRC has been responding to fire emergencies since 2009, when the Japanese government donated 12 fire trucks to Gordon for the PRC. East Zone water and used-water service provider Manila Water also joined the BFP, as the latter lined up activities to kick off the Fire Prevention Month that started on Tuesday.

With the theme “A Walk for a Fire-free and Fire-Safe Nation”, the monthlong observance kicked off with a parade that started at the BFP main headquarters in Quezon City.

As a longtime supporter of the BFP, Manila Water provided hydration support to the participants during the parade.

To date, Manila Water operates and manages a total of 3,280 fire hydrants in various barangays in its concession area in Makati, Pasig, San Juan, Mandaluyong, Taguig, Marikina and Pateros and portions of Quezon City, Manila and Rizal province.

Corporate Strategic Affairs Group Head Jeric Sevilla said Manila Water ensures all fire hydrants the company has installed are operable and ready to be used.

Manila Water has installed a total of 929 operable fire hydrants in Quezon City, 349 in Makati, 407 in Marikina, 504 in Pasig, 460 both in San Juan and Mandaluyong, 375 in Taguig and 255 in Rizal province.

In addition, he said Manila Water continues to mount informationdissemination campaigns, particularly to local governments, on caring and protecting fire hydrants to ensure that the hydrants are operable during emergencies. As part of its regular maintenance activities, Manila Water coordinates with the BFP and barangays to do routine inspection of fire hydrants.

“Manila Water also strongly encourages the public to immediately report illegal use and tampering of fire hydrants,” Sevilla added. Residents are also advised to practice good housekeeping by eliminating fire hazards in their homes considering that highest number of recorded fire incidents happened in residential areas. Claudeth Mocon-Ciriaco

UNTO DUST... A girl gets a cross of ashes marked on her forehead after an Ash Wednesday Mass at the National Shrine of Our Mother of Perpetual Help (Redemptorist Church) in Baclaran, Parañaque City, on Wednesday. Ash Wednesday marks the start of the Lenten season, or cuaresma, on the Roman Catholic Church’s calendar. PNA

Comelec junks Lim’s protest against Estrada PRBA, MAP

By Joel R. San Juan @jrsanjuan1573

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HE Commission on Elections (Comelec) has dismissed the petition filed by defeated Manila mayoral candidate Alfredo S. Lim, seeking to nullify the proclamation of former President Joseph E. Estrada as duly elected mayor of Manila City in the May 2016 elections.

In a 14-page resolution issued by the Comelec’s First Division, the poll body held that Lim’s petition seeking to disqualify Estrada from running in the mayoralty post was filed out of time.

It also junked Lim’s claim in seeking the annulment of Estrada’s proclamation that the City Board of Canvassers (CBOC) conducted its canvass of votes illegally through manual uploading of results.

The Comelec held that Lim’s petition for disqualification based on Section 68 of the Omnibus Election Code (OEC) was filed out of time, since it was filed on May 18, 2016 or eight days after Estrada’s proclamation.

“When a petition for disqualification is filed before the proclamation of winners there are still candidates

to disqualify. After the proclamation of winners, the parties are technically no longer candidates, because the winners are already formally determined,” the Comele ruled.

“The petition before us was filed on May 18, 2016. Estrada was proclaimed winning mayor on May 10, 2016. Clearly, the petition was filed outside the period provided under Section 3, Rule 25 of Comelec Resolution 9523,” it added.

Likewise, the Comelec held that Lim failed to present evidence to prove illegal proceedings on the part of the CBOC in counting the votes.

In his petition, Lim claim that prior to the elections the Manila City government distributed over 7,000 tablet computers to public-school teachers in April. These tablets, according to Lim, were used by Board of Election Inspectors (BEIs) to manipulate or alter the date in the secure digital (SD) cards before surrendering them for uploading to the Consolidation and Canvassing System (CCS).

“Lim failed to substantiate his claim that the BEIs used the tablets to manipulate, alter or modify the data in the SD cards before surren-

dering them for uploading to the CCS,” the resolution added.

“Although he [Lim] was able to present affidavits narrating factual circumstances pertaining to the canvassing proceedings, the affiants did not categorically state that they witnessed the BEIs manipulating, altering or modifying the data in the SD cards through the tablets,” it added.

The Comelec noted the witnesses merely reiterated suspicions of wrongdoing owing to the lack of signal in the canvassing venue, manual uploading of results and other circumstances relative to the delivery of SD cards.

Likewise, the Comelec stressed manual uploading of results is provided under Comelec Resolution 10083 as a contingency measure in the event of electronic failure.

“In sum, we find the petition under Section 68 of the OEC was filed out of time, insofar as the prayer for disqualification is concerned. We also find there is no sufficient proof that would allow us to conclude that the canvass proceedings was attended by illegality, which could have justified the annulment of Estrada’s proclamation,” the Comelec ruled.

sstarts Meet Russia Forum

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HE Philippine-Russian Business Assembly (PRBA) and the Management Association of the Philippines (MAP) are teaming up to hold the Meet Russia Forum: Business Opportunities in Russia on March 3 at a hotel in Makati City.

The forum is part of a series of fora, organized by PRBA, aimed at introducing and understanding the opportunities that an expanded relations between the Philippines and Russia will bring in the areas of trade, investments and tourism.

The forum will have as speakers Russian Ambassador to the Philippines Igor Anatolyevich Khovaev and Socioeconomic Planning Secretary Ernesto M. Pernia. PRBA its counterpart in Russia, the Russia-Philippines Business Council, are recognized by the Russian Embassy in Manila and the Philippine Embassy in Moscow as the lead drivers in facilitating the expansion of trade and economic relations between the business communities of the two countries.

Economy

A4 Thursday, March 2, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

Thousands rally to support Lopez’s CA confirmation

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r andishing f lags and banners to decry mining, over 2,000 people gathered on Wednesday morning in front of the Senate in Pasay City to rally in support of Environment Secretary Regina Paz L. Lopez and her antimining initiatives.

“Secretary Gina, ikumpirma! Senado, Senado, maglingkod sa Pilipino, hindi sa minero! (Confirm Secretary Gina! Senate, Senate, serve Filipinos not miners!)” the group chanted.

Among the groups present in the rally was the antimining group Alyansa Tigil Mina, which held a banner that read: “Protect the environment. Defend people’s rights.

Confirm Secretary Gina Lopez.”

Lopez’s confirmation was deferred after the Senate underwent a reorganization on Monday with new leadership positions and chairmanships decided. Several oppositions have also been filed before the Commission on Appointments panel on Lopez’s confirmation.

Around 19,000 people are expected to be “directly affected” by the closing of mines, Lopez said. She, however, assured that displaced miners could be trained

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Pippa joins call for urgent resolution of TRO vs RCOA

By Joel R. San Juan

lopez

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to practice ecotour ism, as it has more long-term benefits as against mining.

The police said the protesters were in the Senate as early as 10 a.m. to show support for Lopez, who previously ordered the closure of 23 metallic mines and suspension of five others for alleged serious environmental violations.

Lopez, who briefly showed up in the rally, expressed gratitude for their support. “Para sa kalikasan!

Para sa bayan! (For the environment!

For the nation!)” she said. PNA

In a statement, Pippa insisted that the RCOA is mandated by the Electric Power Industry Reform Act of 2001 (Epira), but implemented only in 2013.

It ex plained that RCOA is aimed at institutionalizing competition in the supply of electricity, and allow electricity end-users to choose their suppliers based on low price and other factors.

@jrsanjuan1573

he Philippine Independent Power Producers Association (Pippa) has joined calls for the Supreme Court to revisit its earlier order enjoining the implementation of the retail competition and open access (RCOA).

13,549.4 MW The Pippa’s installed grid capacity, which serves 82.8 percent of the country’s total that serve millions of consumers in Luzon, the Visayas and Mindanao

“The recent TRO [temporary restraining order] issued by the Supreme Court has the effect of putting on hold aspects of the RCOA, specifically the timeline for lowering of thresholds,” the statement read.

Pippa is an association of 28 companies engaged in power generation. Collectively, Pippa’s members have 13,549.4 megawatts of grid-installed capacity, or 82.8 percent of the country’s total and serve millions of Filipinos in Luzon, the Visayas and Mindanao.

Unified policy

“PIPPA supports the implementation of RCOA and hopes the issues before the Supreme Court will be resolved with finality at the soonest possible time,” the power producers said.

“We support the move from [the] DOE [Department of Energy] and ERC [Energy Regulatory Commission] for a unified policy on RCOA.

We hope that this will finally settle the issues and the industry will already move forward to attain the objectives of Epira,” the group added.

The DOE, ERC and the Philippine Electricity Market Corp. (PEMC) said they will form a new policy that will make it easier to shift to an open- market scheme.

The DOE also said it will be exhausting all remedies to see the implementation of RCOA, which is covered in DOE Circular DC2015-06-0010, Series of 2015; ERC Resolution 5, Series of 2016; ERC Resolution 10, Series of 2016; ERC Resolution 11, Series of 2016; and ERC Resolution 28, Series of 2016.

Choices

RCOA allows electricity end-users with at least 1 megawatt of peak demand to choose their suppliers.

End-users can choose between 23 retail electricity suppliers (RES) designated by the ERC.

Lawmaker seeks probe into new, but ‘defective’, MRT 3 coaches

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senator on Wednesday sought for a probe into the alleged defective new coaches of the Metro Rail Transit 3 (MRT 3), following reports that they were not working.

Sen. Nancy Binay filed Senate Resolution 304 urging the Senate to look into the new coaches in order to improve the MRT’s provision of safe and efficient public transport.

Reports said the new MRT 3 coaches are not working, while 12 of them had cracks.

The new coaches are part of the 48 new coaches bought from the Dalian Locomotive and Rolling Stock Corp. for P3.8 billion in 2013 by the thenDepartment of Transportation and Communications (DOTC).

Meanwhile, the delivery of the new coaches started in January 2016, three months after its October 2015 schedule.

Binay also decried the reported delays in the existing MRT 3 service due to frequent mechanical breakdowns.

She said breakdowns in the MRT service have an impact on the country’s economy.

“The lost time of our employees because of these MRT breakdowns make companies less productive,” Binay said.

“We need to make sure that our passengers are safe and the operation of the MRT is efficient because there are many who ride them daily,” she added. PNA

briefs realty group eyes p125-b ecozone project in lucena Ralliers converge in front of the Senate in Pasay City to express support to Environment Secretary Regina Paz L. Lopez’s antimining initiatives and call on the Commission on Appointments to confirm her appointment. PNA

Duterte affirms stance against contractualization in meeting with labor coalition–DOLE official

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N official of the Department of Labor and Employment (DOLE) said President Duterte has assured workers that his administration is against contractualization.

Labor Undersecretar y Joel Manglunsod said the Chief Executive has told members of the Nagkaisa labor coalition at a meeting on Monday that his stand against contractualization does not change.

“Sinabi ni Presidente na walang pagbabago sa position niya ’nung nasa kampanya pa siya na ayaw niya sa lahat ng porma ng contractualization [The President has reaffirmed his stand against all forms of job contractualization],” he said.

The DOLE official added that the President is amendable on the proposals of pending bills in Congress that will criminalize violations of existing laws on contractualization.

Manglunsod was asked if the statement of Duterte will have an effect on the new policy on contractualization being formulated by the agency.

“Hindi, kasi kinakailangan talaga dumaan ito sa Kongreso. Ang pwede lang namin is siguraduhin na lahat

ng minimum requirements para allowable contractualization sa batas ay masusunod [All these proposals, however, may have to pass through Congress approval. We assure, though, all minimum requirements for allowable contractualization allowed by law will be followed],” he explained.

Manglunsod added that they were no specific bills that Duterte will endorse.”

Meanwhile, the labor group was satisfied with what the President has told them during the dialogue.

“This chance became clearer when the President, after a threehour dialogue with labor leaders [on] Monday evening, demonstrated empathy and understanding for the plight of Filipino workers by reiterating his position that he is not going to renege on his promise to end contractualization both in the private and public sector,” the Nagkaisa said in a statement.

They added, “ The dialogue ended months of speculation in the business community that the President may only be after agencies that were practicing endo [the hiring of workers only for five months], as he categorically

stated that his policy extends fully to ending contractualization through middlemen or manpower agencies.”

At the same time, the group urged their fellow workers to be on guard and monitor the actions to be taken by agencies of the government regarding the matter.

“We therefore urge our fellow workers to remain vigilant to make sure that government bodies under instruction to comply with our demands do not stray out of line. This recent advance in our struggle for decent work confirms the power of unions and organized resistance in winning the battle against antilabor policies,” they said.

The Nagkaisa labor coalition consists of 47 labor federations and workers’ organizations in public and private sectors, which includes Associated Labor Unions, Partido Manggagawa, Sentro, Trade Union Congress of the Philippines, Bukluran ng Manggagawang Pilipino, Federation of Free Workers, National Confederation of Labor, Philippine Airlines Employees Association, PSLink and Philippine Government Employees Association, among others. PNA

Paris climate-change agreement now up for Senate concurrence

P

resident Duterte has signed the document signifying the Philippines’s accession to the Paris climate-change agreement, and Malacañang is transmitting it on Wednesday afternoon to the Senate for concurrence.

The instrument of accession document was signed by the President on Tuesday.

In his letter addressed to the Senate President and members of the Senate, Duterte said that, “after examining the text thereto, I find it advisable to accede to the Paris Agreement and seek the Senate’s concurrence.”

The President previously said that he would not sign the Paris Agreement over concerns on how small countries could access the common fund.

Duterte later agreed to it after his Cabinet members unanimously voted for its ratification.

The Paris Agreement, which was signed on April 22, 2016, in New York, seeks to address climate change and cap greenhouse-gas emissions.

The agreement aims to hold the increase in the global average temperature to well below 2⁰C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5⁰C above preindustrial levels. PNA

The P125-billion proposed special economic zone in the Greater Lucena area has attracted three financial backers, the Philippine Economic Zone Authority (Peza) said.

The 1,536-hectare proposed economic zone covering seven municipalities will be equipped with an international seaport and airport, among other facilities, which has drawn the interest of three financiers.

“The total cost is P125 billion, with P75 billion allocated for the industrial and residential part; P25 billion for the international airport and another P25 billion for the seaport. There were three financiers that have signified their interest, at no cost to the government,” said Achievements Realty Corp. President Philip Cea, the developer of the proposed economic zone.

The realty company owns the land, and will be responsible for overall project development of the zone.

The three interested proponents are Malaysian conglomerate Alloy MTD, South Korean group Posco and China Communications Construction Co. Ltd., Cea said.

Achievements Realty Corp. may engage one or all of the three financiers to bankroll the international airport and seaport.

“Cea, as the owner of the ecozone, can look for an investor to put up the port and logistics hub. He can also look for other investors to put up the factories in the industrial component,” Peza Chairman Charito Plaza said during a recent news conference on the realty development project in the Greater Lucena Area.

The Greater Lucena Integrated Economic Zone Project envisions to be the new home to the government’s national offices, such as the Malacañang, the Senate and House of Representatives. The proposal to transfer these offices to the Quezon province will be presented by Cea to the Chief Executive.

The project is now awaiting the approval of the Chief Executive. Catherine N. Pillas

lower lpg price takes effect on tuesday

The price of cooking gas went down on Wednesday, reflecting the downtrend in the international contract price for liquefied petroleum gas (LPG).

Petron Corp. implemented a P0.35-per-kilogram (kg) rollback in Gasul and Fiesta prices effective 12:01 a.m. of March 1. It also decreased the price of Xtend auto LPG by P0.20 per liter at the same time.

“These reflect movements in the international contract prices of LPG for the month of March,” Petron said.

Solane LPG price also went down by P0.32 per kg effective 6 a.m. of Wednesday. The Department of Energy-Oil Industry Management Bureau (DOEOIMB) said the contract price for March amounts to $564 per metric ton (MT), which is $9 lower than the contract price in February of $573/MT. The rollback of $9/MT could translate to a P0.36/kg, hence a P4 reduction per 11-kg LPG cylinder, the DOE said.

Energy Secretary Alfonso G. Cusi urged the buying public to always check every LPG cylinder to ensure that it is of the right quantity and quality. Lenie Lectura

Agriculture/Commodities BusinessMirror

news@businessmirror.com.ph

Editor: Jennifer A. Ng • Thursday, March 2, 2017

A5

S. Korea to buy more bananas from PHL

Solon wants to fast-track passage of substitute coco trust-fund bill

By Jovee Marie N. dela Cruz @joveemarie

T

File photo

S

By Jasper Emmanuel Y. Arcalas

@jearcalas

outh Korea will import more Cavendish bananas from the Philippines this year to satisfy the increasing demand of Korean consumers for it, according to Agriculture Secretary Emmanuel F. Piñol.

Piñol said South Korea needs about 35 million boxes more of Cavendish bananas valued at $280 million (P14 billion). The 35 million boxes of bananas—with an average weight of 13 kilograms—would be equivalent to 455,000 metric tons (MT).

“In my meeting with Dole South Korea [Dole Korea Ltd.], they [Dole

Korea Ltd. officials] said South Korea needs about 35 million boxes more of Cavendish bananas from the Philippines,” he said in a recent interview with reporters.

“In fact, they have to import from Ecuador and Guatemala just to fill up the shortage. But South Korean banana consumers prefer Philippine bananas,” Piñol added.

He said the DA will open banana plantations in former conflict-torn areas in Mindanao to increase production.

“We will locate banana plantations in Maguindanao and Lanao del Sur because South Korean consumers prefer highland-grown Cavendish bananas,” Piñol said.

He said as an example the former camp of the Moro Islamic Liberation Front in Abubakar in Maguindanao, where as much as 10,000 hectares of land could be planted with bananas.

The Department of Agriculture (DA) is confident of increasing the country’s banana exports this year, after the Philippines secured a P2.3-billion agriculture deal with Japan-based agribusiness company Farmind Co. last year. The deal involved the importation of at least 20 million boxes of Cavendish bananas.

“The good thing with the South Korean and Japanese markets is that there’s no politics involved.

There are no political issues standing in the way of business deals with them,” Piñol said.

The Philippines accounts for more than 90 percent of bananas being imported by South Korea annually. Exporters shipped a total of 238,496 MT of bananas to South Korea, valued at $114.54 million in 2016, according to data from the Philippine Statistics Authority (PSA).

The PSA data showed that the total outbound shipments of bananas to Seoul last year was 12.45 percent higher than the 212,083 MT exported in 2015.

The value of banana exports to South Korea is also 41.44 percent higher than the $80.99 million posted in 2015, according to the PSA data.

PSA data also showed that South Korea accounted for 18.5 percent of total bananas exported by the Philippines last year, higher than the 12.31 percent recorded in 2015.

he House of Representatives should fast-track the approval of a substitute bill calling for the establishment of the proposed Coconut Farmers and Industry Development Act, according to Deputy Speaker and Party-list Rep. Sharon S. Garin of Aambis-Owa. Garin, head of the technical working group for the coco-levy bill, said the substitute measure has now been referred back to the mother committee—the House Committee on Agriculture and Food—for consideration and approval.

C it ing C abinet Secret a r y Leoncio B. Evasco Jr., she said the Office of the President has already written a letter to Congress through the Presidential Legislative Liaison Office certifying the passage of the bill as urgent.

In the 16th Congress, the substitute bill calling for the establishment of the Coconut Farmers and Industry Development Act was passed on third reading, but it was not enacted due to lack of time.

“The long wait may be over for the thousands of poor coconut farmers and their families fighting for their right to coconutlevy funds, as [we] just finished deliberating the substitute bill calling for the establishment of the Coconut Farmers and Industry Development Act,” Garin said in a statement.

The bill aims to consolidate and expedite the delivery of benefits due to coconut farmers.

Under the measure, the Presidential Commission on Good Government (PCGG) will conduct a complete accounting and inventory of the coconut-levy assets, including investments, disbursements and expenditures.

Through a Coconut Farmers and Industry Trust Fund Committee that will be formed, a Coconut Farmers and Industry Development Plan will be drafted and will consist of a five-year plan of programs, which indicates the policies for the development and rehabilitation of the coconut industry.

These initiative are expected to result in an increase in the productivity and income of coconut farmers.

The government will also give attention to the marketing, research and development of the coconut industry.

Coconut remains one of the country’s top agricultural exports, with revenues reaching as much as $1 billion annually.

“This has been a long time coming. Our coconut farmers have fought for their right to access the coco-levy funds for decades. It is high time they reaped the benefits of their hard-earned money collected as coconut levy since 1975,” Garin said.

“Unfortunately, the abundance of the earnings does not reflect on the lives of the poor coconut farmers, their families and the whole coconut industry,” she added.

The lawmaker said returning the money to the farmers is one of the campaign promises of President Duterte.

Illegal-fishing activities in Negros US approves 3 types of genetically engineered potatoes Occidental down by 90%–official B

By Jonathan L. Mayuga @jonlmayuga

I

llegal-fishing activities within the Tañon Strait in Negros Occidental declined by 90 percent, after the government launched its intensified campaign against illegal, unreported and unregulated fishing, and created Task Force Lawod in March 2014.

“From an average of 100 fishing vessels, which regularly encroach on the municipal fishing grounds of various coastal towns in the province, the number of violators dropped to less than 10,” Provincial Environment Management Officer Wilfred Ramon M. Peñalosa said.

This as a significant development, especially since Negros Occidental is backing calls to protect the Tañon Strait Protected Seascape (TSPS), one of the largest marine-protected areas (MPAs) in the country.

The TSPS is a narrow strait between Negros Islands and Cebu. It is known as a passageway of passenger and cargo ships. It is also home to over a dozen species of dolphins and whales, including dugong and marine turtles.

Peñalosa said the downtrend was observed from March 2014 to March 2017, based on data provided by the Bureau of Fisheries and Aquatic Resources of the Department of Agriculture.

The task force targets large-scale commercial fishing vessels, as well as small- or medium-scale commercial fishing boats that use destructive fishing methods.

He said Task Force Lawod’s use of Visible Infrared Imaging Radiometry System allowed it to significantly cut the number of illegal fishers in the area. Lawod is the Visayan word for laot, which refers to the vast oceans.

“We are still trying to improve our anti-

illegal fishing campaign. The task force is composed of a multiagency team working together to protect the province’s municipal fishing grounds,” Peñalosa said.

Task Force Lawod was created by Gov. Alfredo G. Marañon Jr. in Mach 2014, in response to the widespread clamor against the rampant illegal-fishing activities in the municipal waters facing the Tañon Strait.

Marañon met with officers of Oceana International and its local counterpart, Oceana Philippines, and the group Rare Philippines during a brief interaction on Tuesday.

Negros Occidental is one of the areas where Oceana and Rare are implementing advocacy, training, capacity-building and livelihood programs in fishing communities as part of the campaign to protect the Tañon Strait.

Oceana Philippines Executive Vice President Gloria Estenzo Ramos said Occidental Minodoro has one of the most effective antiillegal fishing campaigns in the country.

“They are a beacon in the fight against illegal fishing. They do surveillance, and they have high conviction rate,” Ramos said, referring to the task force.

Oceana Philippines is pushing for the implementation of the General Management Plan for the TSPS. Meanwhile, Marañon said Negros Occidental is a fishing province, and it has everything to gain in protecting the Tanon Strait.

“We created the Task Force Lawod to help LGUs [local government units] in enforcing environmental and fishing laws,” Marañon said.

So far, Peñalosa said Task Force Lawod had already filed 30 cases for violation of the Fishery Code of the Philippines. Of the 30 cases, 10 cases resulted in the conviction of the perpetrators.

OISE, Idaho—Three types of potatoes genetically engineered to resist the pathogen that caused the Irish potato famine are safe for the environment and safe to eat, federal officials announced.

The approval by the US Environmental Protection Agency and Food and Drug Administration late last week gives Idaho-based J.R. Simplot Co. permission to plant the potatoes this spring and sell them in the fall.

The company said the potatoes contain only potato genes and that the resistance to late blight, the disease that caused the Irish potato famine, comes from an Argentine variety of potato that naturally produced a defense.

There is no evidence that genetically modified organisms, known as GMOs, are unsafe to eat, but changing the genetic code of foods presents an ethical issue for some.

McDonald’s declines to use Simplot’s genetically engineered potatoes for its French fries.

The three new varieties of potato—the Russet Burbank, Ranger Russet and Atlantic—have previously been approved by the US Department of Agriculture. They “have the same taste and texture and nutritional qualities” as conventional potatoes, Simplot Spokesman Doug Cole said.

The company said they will have reduced bruising and black spots, enhanced storage capacity and a lower amount of a chemical that’s a potential carcinogen and is created when potatoes are cooked at high temperatures.

Conventional potatoes can turn a dark color when cooked after they were kept cold for too long, a problem the new varieties reduce, the company said. Simplot also said the enhanced cold storage will likely have significant ramifications for the potato-chip industry by reducing trucking costs.

Potatoes are considered the fourth food

This October 2016 photo supplied by Simplot Plant Sciences shows Innate Gen. 2 potatoes surviving in a field infected with late blight disease at Michigan State University in East Lansing, Michigan. Federal officials said three types of potatoes genetically engineered to resist the pathogen that caused the Irish potato famine are safe for the environment and safe to eat. Nico Champouret/Simplot Plant Sciences via AP

staple crop in the world behind corn, rice and wheat. Late blight, which rotted entire crops and led to the deaths of about a million Irish in the 1840s, is still a major problem for potato growers, especially in wetter regions.

Fungicides have been used for decades to prevent the blight. Simplot says the genetically engineered potatoes reduce the use of fungicide by half.

The company also notes the potatoes contain no DNA from an unrelated organism.

The Non-GMO Project, which opposes GMOs and verifies non-GMO food and products, said the new potatoes don’t qualify as non-GMO. “There is a growing attempt on the part of biotechnology companies to distance

themselves from the consumer rejection of GMOs by claiming that new types of genetic engineering...are not actually genetic engineering,” the Washington state-based group said in a statement.

The most recent federal approvals apply to Simplot’s second generation of Innate potatoes. The first generation didn’t include protection from late blight or enhanced cold storage.

The first generation has been sold in stores under the White Russet label. Cole said the company hasn’t decided how it will market the new Innate potatoes.

It is also working on a third generation that Cole said will have protections against additional strains of late blight. AP

TheBroad

Business

A6 Thursday, March 2, 2017

Microfinance in P

F

IVE years ago, the Economist Intelligence Unit (EIU) Ltd. ranked the country’s microfinance industry as first in the world. The EIU also included the Philippines as among the top 10 countries in terms of overall business environment for microfinance.

Bureau of Small and Medium Enterprise Development Director Jerry Clavesillas facilitates the Microfinance Roundtable Discussion held at the Oxford Suites Makati. ALYSA SALEN

The EIU credits such lofty place to the development and growth of the Philippines’s policy and regulatory framework with the implementation of the National Strategy for Microfinance (NSM) in 1997.

The NSM has identified the principles that guide the policy formulation for regulation of the Philippines’s microfinance industry. These principles include an enabling policy environment that facilitates the increased participation of the private sector, market-oriented credit policies, nonparticipation of government line agencies in the implementation of credit and guarantee programs, and promoting the role of the private sector or microfinance institutions (MFIs) in the provision of financial services.

Consistency

The country’s microfinance industry has consistently showed growth every year. According to the Microfinance Council of the Philippines Inc. (MCPI), microfinance non-governmental organizations (MNGOs) recorded two years ago a total of 3.034 million active borrowers. Of this figure, banks listed 1.23 million, while cooperatives had 2.459 million borrowers.

These numbers reflect a complete reversal four years prior. According to a 2012 data by the Asian Development Bank (ADB), of the total 2.478 million in 2011, banks had 1.031 million shares, while cooperatives reached only 90,000.

That year MNGOs recorded P12.701-billion total loans outstanding, P7.207 billion of which was lodged at banks, while cooperatives reported P697 million.

By 2015, a loans portfolio of P19.8 billion was recorded for MNGOs, P11.4 billion of which was lodged at banks. No estimates have been made for the cooperatives sector.

“[The] cooperatives [sector] is quite tricky,” MCPI Executive Director Robert Allan Sicat said in a forum last month. “We don’t have the exact number of borrowers and total loans outstanding of cooperatives engaged in microfinance, because they don’t monitor their microfinance portfolio. But many of our cooperatives have small savings and loans that we may consider as microfinance.”

According to Sicat, there are 33,000 cooperatives in the country, nearly half of the total 66,000 recorded a decade ago. He added that 14,700 cooperatives have some sort of small savings and loans operation, with active borrowers of 2.5 million.

Sicat has noted that credit products have also expanded.

Currently, agriculture microfinance and value-chain microfi-

nance products and services are being offered to Filipinos in rural areas. Microfinance in renewable energy, housing, and water and sanitation projects are also being implemented.

“In terms of products and services of existing microfinance loans, some of our members have already engaged in agriculture and value-chain financing,” Sicat said.

Hurdles

A study conducted by Raymund B. Habaradas and Mar Andriel Umali in 2013 pointed out that in spite of the gains of the Philippine microfinance industry, challenges remained.

Titled “The Microfinance Industry in the Philippines: Striving for Financial Inclusion in the Midst of Growth,” the study said the industry still faced three major hurdles.

These are credit access; usage and quality of microfinance products; and the impact on the borrower or consumers welfare after using the microfinance products.

Credit access means the availability of financial products from formal institutions, while usage pertains to the levels of use of different financial services. The authors defined quality as the experience of the consumer, demonstrated in attitudes toward microfinance products that are available to them. Welfare means the impact of a financial product or service on the lives of consumers.

“We are always hearing about there’s so much money [in the country], but seems like the issue is always accessibility. And our MSMEs [micro, small and medium enterprises] are also lacking in terms of, can we really borrow money if we are just starting, or is it money that we can access when we are just expanding, or can we really access funds?” Trade Undersecretary Zenaida Maglaya said in the same forum organized by the Benita and Catalino Yap Foundation Inc. (BCYF).

According to the Bangko Sentral ng Pilipinas (BSP), 591 out of 1,634 cities and municipalities in 2016 still remain unbanked. Usage of microfinance products and services under a level of informality still ranks high, BSP data showed.

About 68 percent of those who have savings save at home, while 72 percent still borrow from informal sources.

The BSP further added that an estimated P170 billion is still present in terms of unmet demand for SME loans. The Central Bank data showed that 50.2 percent of MSMEs do not save and 49.5 percent still do not tap lending facilities.

“The goal really for us is to be

derLook PHL at crossroads

sMirror

www.businessmirror.com.ph | Thursday, March 2, 2017

A7

Facilitators, speakers and attendees pose for a group photo after the the Microfinance Roundtable Discussion held at the Oxford Suites Makati. ALYSA SALEN

able to empower the excluded segments, which involve the underserved and unserved sectors, including MSMEs,” BSP Bank Officer Jenny Romero said.

According to Jerry T. Clavesillas, the current challenge still being faced by the microfinance industry is in terms of the costing and the tedious process of getting loans from MFIs.

Clavesillas, director of the Bureau of Small and Medium Enterprises Development of the DTI, explained that documentary requirements should be lessened and processes should be streamlined.

“The reason we are actively

participating in partnerships with private organizations and foundations is that the government on its own cannot do all the things required by our constituents,” Clavesillas said. “We’ll be stronger with the private-sector partners. They are the ones willing to give us the client-satisfaction feedback. That is the reason they are very important.”

Redefinition

THE discussion by stakeholders at the BCYF-led forum has led participants to recommend that government review and revise the definition of the classification of MSMEs

in the country.

In addition, the industry stakeholders are proposing the formulation of the implementing rules and regulations for the Magna Carta of MSMEs.

Under the current Magna Carta, microenterprises are classified as businesses with an asset amounting to P3 million and below, while small businesses have an asset base of P3 million to P15 billion. The charter defines medium enterprises, meanwhile, as having P15 million to P100 million in terms of assets.

CARD SME Bank Inc. Vice Chairman Mary Jane A. Perreras is proposing that a ceiling on the cap on asset amount for MSMEs should also be reviewed.

Perreras said a P1-million ceiling will be stable for micro businesses instead of the P3 million, which is deemed high.

“That is why we have an initiative at the Chamber of Thrift Banks [CTB] to actually request the redefinition of MSME, because when you say micro, a P3-million asset, they do not have that yet,” Pererras said. “For small enterprises, a P15-million asset [is absent or not easy to raise], especially within the rural areas.”

She added the definition of MSMEs has “a lot of implications because the regulation on compliance of MSME, we cannot comply because our small enterprises are still micro in the eyes of BSP.”

In 2014 MSMEs comprised 99.6 percent of all Philippine businesses, generated 62.8 percent of all jobs in the Philippines and contributed an estimated 35 percent to the country’s GDP.

Perreras said their bank pays penalties to the BSP often because “there’s a mismatch in the definition of the enterprises.”

“The business that we have lent money to may be deemed by the BSP as micro but, as for us, it may fall under small enterprise already.”

Regulations

On November 3, 2015, President Benigno S. Aquino III signed into law the Microfinance NGOs Act or Republic Act (RA) 10693, which underscores the implementing rules and regulations (IRR) for the microfinance industry. The rules include accreditation of MNGOs by the Microfinance NGOs Regulatory Council (MNRC).

Under RA 10693, an accredited MNGO is eligible for preferential tax treatment of 2 percent tax based on their respective gross receipts from microfinance operations. The law defines microfinance

as the viable and sustainable provision of a broad range of financial services to poor and low-income individuals engaged in livelihood and microenterprise activities.

RA 10693 also mandates that MNGOs are required to maintain a compensating balance, defined as the proportion of the total loan of a microfinance client, which is retained with the microfinance institution as capital buildup, or microsavings.

Under the law accredited MNGOs will have access to government programs and projects as well as any form of technical assistance from the government, donors and support organizations.

Initiatives

THE Pondo sa Pagbabago at Pagasenso (P3, fund for change and progress) provides microenterprises with an alternative source of financing that is easy to access and at a reasonable cost. It aims to boosts the development of entrepreneurship and the MSME sector, particularly the microenterprises.

“Our current initiative, as far as microfinance is considered, especially now with the flagship program of the current administration which is called the P3,” Clavesillas said.

The program was pilot-tested in three areas in the country, namely Mindoro, Leyte and Sarangani, which is among the country’s poorest pronvinces. Under the 2017 General Appropriations Act (GAA), a budget of P1 billion was earmarked for the facilitation of the P3 program.

The P3 program stemmed from the pronouncement of President Duterte to replace the “5-6” money-lending system and provide an affordable microfinancing program for the country’s MSMEs. It was designed to bring down interest rates of microfinance services and products to cater to microentrepreneurs or enterprises.

The 2017 GAA has included an initial funding of P1 billion for financial assistance for micro and small businesses in the next five years. Such funding is part of the planned P19-billion financing initiative.

“The government is now allocating a substantial amount of P1 billion for lending to our microenterprises,” Clavesillas said. “In fact, the World Bank has been telling us before, why don’t we focus on the guaranty system and then let the banks go on their own.”

According to the DTI, the program’s fund will be lent out in the business centers of the poorest provinces where the participating

MFIs and the Small Business Corp.

(SB Corp.) can operate. SB Corp. is an attached agency of the DTI tasked to administer the P3 program.

Priority beneficiaries include microenterprises and entrepreneurs that do not have easy access to credit, or are accessing credit at very high cost, such as microentrepreneurs, market vendors, agri-businessmen and members of cooperatives, industry associations and co-operators.

Loanable amount per end-borrower under the P3 program can range from P5,000 for start-ups to P300,000, with maximum interest rate of 26 percent per annum with no collateral requirement. This rate is significantly below the 20 percent per day charged by “5-6” lenders. It is also lower than what is charged by most MFIs.

It allocates P100 million for direct lending by SB Corp., while the minimum loan amount will be P300,000 with interest rate capped at 10 percent per annum with or without collateral cover.

SB Corp.’s goal for this year is to achieve P1.016 billion in wholesale regular loans for microenterprises.

The P3 program only requires four documentary requirements from the MFIs, with P1.8-billion capitalization and gains of P2.5 billion, to further encourage entrepreneurship.

“The direction now of the current administration is to give direction to these MSME or microenterprises, so that is going to be delivered by the government,” Clavesillas said. “But there are limitations to the government since we are always confined to rules and regulations.”

Clavesillas noted the role of the private sector and its partnership with the government.

“We can use our strengths together.”

In response, BCYF Chairman Tony Yap said his group is “focused on the idea that social development must be part of economic development”.

“Once you do that, we have to talk about microentrepreneurs.”

STA

ANOTHER initiative of the current administration is the enactment of the Secured Transactions Act (STA). The STA proposes for moveable assets, instead of traditional assets like real estate or property, to be part of the collateral MSMEs use.

This bill is actually a priority bill for the 17th Congress, according to International Finance Corp.

Financial Sector Specialist Gay Santos. He added the bill is being sponsored by Senators Bam Aqui-

no and Francis G. Escudero.

“The rationale behind this reform is actually because we have a dead law,” Santos added. “And the existing law already provides for existing moveable assets to be used as collateral, but begs the question why is there no confidence among banks to expand their portfolios to MSMEs.”

Under Senate Bill 354, MSME financing is still considered unattractive given the perceived risks, without traditional collateral such as land and other real property. And the business owners assets being personal in nature, making it difficult for MSMEs to meet bank requirements to get loan approvals.

“To make the secured transaction reform a very comprehensive reform, we have to take into account first establishing a strong legal and institutional framework,” Santos said. “We are trying to do [that] now through the bill, that is, for the legislators and the government to have a sustained political will to see this reform through.”

The STA seeks to enable financial institutions to rethink how they view collateral and reduce the perceived risks, by providing protection for framework to govern lending transactions that involve the use of personal property as collateral.

It also pushes for the review of the design, establishment, and operation of a unified, centralized, online notice-based national collateral registry to assure banks that the collateral being submitted has not already been utilized for another loan.

“The finance institutions have to shift their mindsets and increase their confidence in terms of lending based on moveable assets,” Santos added. “Lastly we are taking that parallel effort to educate every Filipino about good financial management. The ultimate goal for this comprehensive reform is really to achieve financial independence or financial interdependence to families and friends when it comes to borrowing.”

“I think in terms of recourse at the end of the day, it is still the enabling law. At the end of the day it will still be based on the list management system and process of the banks,” Santos said. “So what we are trying to pursue as the next step is to work with the banks on how to simplify the process for micros.”

“Partly, I agree that there are microbusinesses that are growing that need to have secured moveable collateral, but basically most of the micros are not yet used to it,” Sicat added. Rea Cu

The Regions BusinessMirror

A8 Thursday, March 2, 2017 • Editor: Efleda P. Campos

MPTC prepares to build ₧27-billion Cebu-Cordova Bridge, Cebu’s third

By Lorenz S. Marasigan @lorenzmarasigan & Futch Anthony Inso | Correspondent

M

ent firm of Manila North Tollways Corp., the operator of the North Luzon, Subic-Clark-Tarlac, ManilaCavite Toll and the future CaviteLaguna expressways.

It also has significant interests in thoroughfares outside the Philippines, namely, in Thailand and Vietnam.

Cordova Mayor Mary Therese Sitoy Cho said the groundbreaking will take place in Pilipog, Cordova, where the bridge will stretch on almost 5kilometer distance from Cebu City.

Documentation for the bridge construction has already been finalized, and engineers are now in the process of marking the site where the construction will start within this year.

Cho said that, instead of the earlier construction cost pegged at P17 billion, the third bridge will be realized on a budget amounting to P27 billion in a span of three to four years.

When the construction of the third bridge will come to fruition, Cho said, it will then take only a few minutes of travel to the Cebu airport, where at present, one has to hurdle heavy traffic, making a trip from Cebu City to the Cebu International Airport an ordeal.

Beside being an alternative route in going to the Cebu International Airport in Mactan, the municipality of Cordova will be comfortably accessible to tourists, as well as commuters, Cho said.

Since the bridge construction will be done under a public-private partnership, Cho said toll fees will have to be imposed on bridge users, Cho said.

SPICE BOY On a farm tour in Santiago City, young Nonie shows his harvest of green peppers right from the garden. At his young age, he learns how to appreciate farming as a source of food and livelihood. LEONARDO PERANTE II

Catbalogan, Samar, hosts first international conference

CATBALOGAN, Samar, Mayor Stephany Uy-Tan and City Administrator Dennis Cosmod during a news briefing on Catbalogan’s hosting of the United Cities and Local Government Asia-Pacific Executive Bureau 2017 conference from April 4 to 7 in Catbalogan City. ELMER RECUERDO

By Elmer V. Recuerdo | Correspondent

T

ACLOBAN CITY—Samar’s capital, Catbalogan City, is hosting an international conference for the first time, and it is not leaving any stone unturned.

From hotel accommodation of visitors to planning activities and security details, everything is being attended to. “This is a great opportunity for Catbalogan City to host an international conference for the first time,” Catbalogan Mayor Stephany

Clark Green City: PHL’s next growth center

By Catherine Joy L. Maglalang Correspondent

A

ETRO Pacific Tollways Corp. (MPTC) is slated to break ground for the 8.25-kilometer Cebu-Cordova Bridge on Thursday, March 2, as it prepares for the facility’s construction this July.

No less than President Duterte is slated to lead the groundbreaking of the bridge spanning Cebu City to Cordova, Cebu.

Rodrigo E. Franco, MPTC president, said his group is ready for the groundbreaking, which will allow the tollway operator to fast-track certain requirements.

“The groundbreaking will help us with other requirements, which include permitting. We are now procuring a contractor and the company for the detailed engineering and design,” Franco said in the vernacular.

To fund the project, the company is in talks with Maybank Philippines Inc. for a loan facility to the tune of P15 billion.

“We are looking at closing it on the second quarter, but the final amount depends on the final design,” Franco said. Construction of the toll bridge will start by July, and is expected to be completed by 2020.

The project aims to decongest the traffic in the two existing bridges— Marcelo Fernan Bridge and Mandaue Bridge—between Mactan and Cebu, due to the worsening traffic condition in the area.

It includes the construction of the connections to Cebu City and Cordova, the main bridge structure, viaduct, causeway, roadway and toll facilities. It is located around 7.5 km south of the Mandaue Bridge and will take off from the Cebu South Coastal Road crossing the Mactan channel to Mactan Island.

The Cebu-Cordova Bridge is Metro Pacific Investments Corp.’s first bridge project, and the first tollrelated deal outside Metro Manila.

The tollroad company is the par-

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Uy-Tan said.

The event is the United Cities and Local Government (UCLG) Asia-Pacific Executive Bureau 2017, where some 100 foreign delegates from 19 countries are expected to attend, set from April 4 to 7. Most of the participants are local government executives and high government officials of participating countries.

The conference seeks to gather commitment of different sectors of participating countries through declarations, workable

actions, policy proposals and sustainable programs in issues related to Sustainable Development Goals (SDGs), new urban agenda, local economic development and sustainable development.

Tan said the conference will also solicit commitment of local governments (LGUs) and cities for the full implementation of Sendai Framework on Disaster Risk Reduction on local levels.

The participants will be coming from China, South Korea, Taiwan, New Zealand,

Kiribati, Solomon Islands, Cambodia, Indonesia, Thailand, Malaysia, Vietnam, India, Bangladesh, Pakistan, Sri Lanka, Maldives and the township island of Betio in Kiribati.

Tan said there are over 7,000 local government units (LGUs) from the 20 countries that are members of UCLG, representing more than half of the world’s population.

Catbalogan City became a member of this organization in 2015. In the Philippines its members include Quezon City and Makati City, which are among the most populous cities in the country.

Tan said it important for different LGUs government units to come together to discuss global issues, because they are in the forefront in addressing the problems and meeting the goals set under SDG. “LGUs are the organizations that are in the grassroots in terms of addressing the problems of the people. There are many international agreements and declarations that we have to implement, not on the national scale, but on local scale, specifically those headed by LGUs, like the 17 goals under the SGD,” she said.

Tan believes hosting the conference will also give Catbalogan City an international mileage in terms of tourism, cultural and heritage preservation, and investment promotion.

“UCLG has helped a lot in Catbalogan. It did not only made Catbalogan known but it also helped us with the best practices adopted by other cities,” she said.

Tan said UCLG also facilitated referrals among its members on agencies and technical expertise in urban planning.

BETTER and greener city—this is the main goal for the Clark Green City (CGC) project, one among those lined up under President Duterte’s Build Build Build Infrastructure Program.

Surprisingly, the latter is envisioned to help decongest main urban centers while creating a new area for economic growth in the region.

The CGC project was approved by the National Economic Development Authority (Neda) Board in May 2014. Consequently, the CGC master development plan stresses the place will have the following zones: commercial/financial center, industrial, institutional, residential, urban farmland and public realm, the Bases Conversion and Development Authority (BCDA) Assistant Vice President for Corporate Communications Office Leilani Macasaet said.

Other salient features of the Clark Green City are disaster resilience, proximity to connectivity infrastructure, fiscal and non-fiscal incentives, green and sustainable development, smart development and socially inclusive development.

“Strategically located, Clark is 120 kilometers away from Manila via the North Luzon Expressway, a mere 20 kilometers from the Clark International Airport, and 90 kilometers from the Subic Bay Freeport in Zambales. Located inside the Clark Special Economic Zone, it [CGC] is designed to be the Philippines’s largest and first smart, green, disaster-resilient city, where nature, lifestyle, business, education and industry converge,” Macasaet said.

She said various partnerships with international and local industry experts in the master planning of CGC have been made.

“For example, we formed a joint-venture company with the Japan Overseas Investment Infrastructure Corp. for Transport and Urban Development, which will develop a Japan-oriented park and transportation system within Clark Green City,” she said.

Filinvest Land Inc. will develop 288 hectares for mixed-use, commercial, residential, office and institutional purposes.

Macasaet said there will be a public-private partnership with Hitachi Asia Ltd. for the installation of a fully integrated system for optimized energy supply for CGC, while Huawei Technologies Philippines Ltd. will do a feasibility study on the safe city solutions project. CGC will benefit not only Region 3, but the entire nation.

CGC, as a hub for economic growth, is truly seen as positively impacting, not only the lives of the people within Clark and its surrounding communities, but also the nation as a whole.

The business hubs in CGC will generate jobs for many Filipinos, and residential areas within it will enable them to have ease of mobility between work and home.

“Basically, CGC will be master planned to contain an industrial sector featuring green industries, agriculture-centered communities with support facilities, business hubs and academic institutions. The larger labor pool of the Central Luzon region and its local community living within the so-called ‘rice bowl of the Philippines’ will directly benefit from these developments, given its proximity,” she said.

BFP to hire more fire officers in Central Luzon

C

ITY OF SAN FERNANDO, Pampanga—The Bureau of Fire Protection (BFP) has opened on Wednesday its recruitment process to fill up the 190 new Fire Officer I vacancies in Central Luzon.

BFP Regional Director F/CSUPT. Aloveel Ferrer said the number of slots per region is determined by the Central Office as part of their program of activities for the simultaneous conduct of regular hiring and selection of fire officers for the year 2017 nationwide.

It is open to all Filipino citizens who are at least 21 years old but not more than 30 years old, a bachelor’s degree holder, board passer or holder of second-level eligibility and has a height of at least 1.57 meters for females and 1.62 meters for males.

Interested and qualified applicants must submit a handwritten Personal Data Sheet (Civil Service Commission Form 212); two pieces passportsize colored picture with name tag; photocopy of unexpired Professional Regulation Commission License ID or authenticated Civil Service Commission Certificate of Eligibility; transcript of records duly authenticated by the school registrar; original Philippine Statistics Authority (PSA) copy of birth certificate; and clearances (barangay, mayor, MTC, RTC, police and NBI). Catherine Joy L. Maglalang

Asean

BusinessMirror

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Singapore: US-China tensions may force nations to choose

S

ingapore risks being “coerced” into choosing between the US or China as the two powers jostle for influence in Asia, according to Prime Minister Lee Hsien Loong.

“If America-China relations become very difficult our position becomes tougher because then we will be coerced to choose between being friends with America and friends with China,” Lee said in an interview with BBC’s HARDtalk that aired on Wednesday.“And that’s a real worry.”

“Right now we are friends with both, not that we don’t have issues with either, but we are generally friends with both, and the relationships are in good working order.”

For decades Singapore, an open economy reliant on trade and investment, has walked a careful line between the US and China, seeking to build economic ties with both while supporting a greater US military presence in the region as a buffer to China’s expansionism, especially in the South China Sea. Lee has warned previously that smaller countries in Southeast Asia do not want to have to pick a side, even as he said competition between major powers is unavoidable.

‘Sustained attention’

“I think the relations always require close and sustained attention on both sides and I am sure that the Chinese side do that,” he told the BBC. “On the American side I hope that they will have that attention because on the American side you’ve got many other issues to worry about—Europe, the Middle East, Ukraine, Latin America.”

“And unless you focus on this relationship, both the win-win aspects as well as the areas where you are in contention, it can go wrong.”

Singapore has found itself caught up in tensions with both countries in recent times. China has publicly chastised it for a perceived alignment with the US against China’s actions in the South China Sea, with the American Navy using the island-state as a launch point for patrols of the strategic Malacca Strait. Singapore is not a claimant in the South China Sea. The government also spent weeks seeking the release of nine Singaporean armored personnel carriers that

were seized by Hong Kong customs in November, with the vehicles en route from Taiwan on a commercial ship after being used in training exercises.

Issues, incidents

“I wouldn’t say we have major problems, we’ve had some issues and some incidents,” Lee said of Singapore’s relationship with China.

Foreign Minister Vivian Balakrishnan met this week in Beijing with Chinese counterpart Wang Yi, where they discussed ways to support China’s “One Belt One Road” infrastructure push in Southeast Asia. Wang affirmed China’s commitment to work with the Asean on a code of conduct for the South China Sea, with the aim of a framework agreement by midyear, Balakrishnan’s office said in a statement. Singapore has also seen changes under the new US administration. It has been a vocal advocate of the Trans-Pacific Partnership (TPP), a 12-nation trade pact that was led by the US and touted as a hallmark of Barack Obama’s economic and strategic focus on Asia. But in one of his first acts as president, Donald Trump withdrew the US from the deal.

Trade questions

Lee had warned last August that US credibility was on the line over the pact.

And speaking to the BBC, he noted Singapore was heavily reliant on trade.“We participate actively in the World Trade Organization and we have depended on the system which America has built and upheld to maintain an open global intercourse of trade, commerce, investments and finances.”

“We were disappointed by that because we all spent a long time negotiating it, it was a hard won deal,” Lee said of Trump’s withdrawal from the TPP. If there was consensus among the remaining 11 countries to go ahead without the US, Singapore would sign, but he said he was not sure that was a realistic prospect. “It’s not so easy to achieve”.

“America is a reality, it’s still a great power, I think this has put a dent in the degree to which people can be confident of America’s policies, but it has happened and we have to live with it,” Lee said. “There is a new mood in America, President Trump reflects that, and we’ll have to watch carefully what policies he pursues.” Bloomberg News

Editor: Max V. de Leon • Thursday, March 2, 2017 A9

Saudi Aramco inks $7-billion deal for Malaysian oil venture

O

il giant Saudi Aramco signed a $7-billion deal on Tuesday to take a 50-percent stake in a mega Malaysian oil-refinery project, in a pact expected to help Saudi Arabia increase trade in Southeast Asia.

Aramco inked the agreement with Malaysia’s national oil company Petronas, which is developing a $27-billion oil-processing hub in southern Johor state bordering Singapore.

It includes a refinery with the capacity to churn out 300,000 barrels of oil a day, a cracker plant and a petrochemical complex with an annual production capacity of 7.7 million metric tons. Officials have said the deal will make Aramco the single-largest investor in Malaysia.

Saudi Arabia is the world’s largest oil exporter, with much of its crude destined for customers in Asia.

Saudi’s Energy Minister Khalid Al-Falih said the Malaysian deal will help expand Aramco’s portfolio ahead of its initial public offering next year, which is touted to become the world’s largest share sale.

Petronas chief Wan Zulkiflee Wan Ariffin said the investment will see Aramco taking up a 50-percent stake in the refinery and cracker plant portion of the hub. He hailed it as a “historic moment for the industry” for two national oil companies to tie up for a mammoth greenfield project.

It took three years to negotiate the deal, said Aramco’s CEO Amin H. Nasser. He said Aramco will supply up to 70 percent of the refinery’s crude feedstock requirements.

“Malaysia offers tremendous growth opportunities and today’s

agreement further strengthens Saudi Aramco’s position as the leading supplier of petroleum feedstock to Malaysia and Southeast Asia,” Nasser said. “It would also serve to

enhance energy security in the AsiaPacific region.”

The signing of the agreement was witnessed by Saudi King Salman, who arrived here on Sunday with an entourage of 600 on a multination tour to boost economic ties with Asia.

The king’s visit is his first to Muslim-majority Malaysia since he took the throne in January 2015. His predecessor, King Abdullah, visited in 2006.

Ties between the countries drew attention when Malaysia’s attorney general said about $700 million transferred to Najib’s personal bank account in 2013 was a donation from

the Saudi royal family. He said most of it was returned.

Najib has denied allegations the money was from the indebted 1MDB development fund he founded. The state fund is at the center of allegations of a vast international scheme of embezzlement and money-laundering and is being investigated by several countries, including the US, Switzerland and Singapore.

After Malaysia, King Salman is due to visit Indonesia, Brunei, Japan, China and the Maldives, the official Saudi Press Agency said. He also will visit Saudi Arabia’s neighbor Jordan before returning home. AP

Saudi Energy Minister Khalid Al-Falih (left) shakes hands with Malaysian Minister in the Prime Minister’s Department Abdul Rahman Dahlan during a news conference at a hotel in Kuala Lumpur, Malaysia, on Tuesday. Saudi Arabia and Malaysia signed four major agreements on Monday that will go a long way in cementing ties between the two countries. AP

Overseas casinos to eye Vietnam more closely than ever as Hanoi ups ante

V

ietnam’s revolutionary founder Ho Chi Minh relied on lottery ticket sales to raise money for schools and hospitals during the war years. Now Hanoi’s Communist leaders are looking to casinos, horse betting and modern lottery-ticket machines to do the same.

So far this year Prime Minister Nguyen Xuan Phuc has issued two decrees aimed at upping Vietnam’s game in the regional competition for gambling revenue while reducing the country’s growing budget deficit.

A pilot plan to take effect in March will allow Vietnamese to gamble in the country’s casinos for the first time—currently only foreigners can. Another will allow bets nationwide on horse and dog races, as well as international soccer matches. This follows what officials call an “American-style” lottery started last year by the finance ministry, in partnership with Malaysia’s Berjaya Corp.

“They need tax revenues,” said Alexandre Legendre, a Hanoi-based partner at Leadco Legal Counsel, which has advised foreign investors on the country’s gambling opportunities. “The fiscal situation of the country is under pressure.”

Vietnamese going abroad to such gambling locales as Macau, Singapore—and just across the border in Cambodia—spend an estimated $800 million on gambling every year, according to Augustine Ha Ton Vinh, an adviser to the Van Don Special Economic Zone where a casino funded by local investor Sun

$800M The estimated amount being spent by Vietnamese on gambling abroad every year

Group is planned about 175 kilometers (110 miles) northeast of Hanoi.

Now the government will aim to keep that money at home.

New legal outlets for gambling would be greeted enthusiastically

by Vietnamese, who spent about $13 billion on lottery tickets from 2011 through 2015, with revenue growing an average of 12 percent annually, according to the finance ministry.

The Southern Lottery Council, which comprises lottery companies in 21 provinces, pulled in almost $3 billion last year—up more than 200 percent from 2007, according to the organization.

Gaming-industry investments will also boost the economy. An additional foreign investment of $3 billion into Vietnam’s casino businesses could increase GDP by 0.58 percent in the first year, according the Institute for Regional Sustainable Development in Hanoi.

The new computerized Berjaya joint venture, Vietlott, supplements and even competes with Vietnam’s

Vietnamese place their bets at a lottery outlet. BLOOMBERG

provincially operated lotteries. The local, five-decades-old operations provide a form of social welfare for elderly, poor and disabled ticket sellers who wander in and out of street cafés selling paper tickets.

Vietlott reported revenue of more than $70 million last year after rolling out operations in about 20 percent of the country’s provinces starting last July.

Nguyen Van Thanh, who at age 55 left his comfortable administrative job at a state-owned insurance company, stands all day selling Vietlott tickets for 10,000 dong, or about 45 cents, in the garage of a Soviet-style apartment complex across the street from the State Bank of Vietnam in Hanoi. He sells as much as $1,300 in lottery tickets a day.

“Vietnamese people like to

gamble,” he said. “We like being lucky.” For years, the government has been ambivalent about gambling. Allowing Vietnamese to enter casinos built for foreigners is an experiment that will last for three years while the program is assessed.

Ho Chi Minh personally approved of the first lottery in late-1961 to raise money for the construction of schools and hospitals in Hanoi, according to Duong Trung Quoc, a parliamentarian and secretary general of the Vietnam Association of Historical Sciences.

While lottery revenue has funded education and social welfare for decades, the government nonetheless fears unrest from what officials call “social evils” associated with gambling, such as prostitution, drunkenness and heavy indebtedness.

Until the latest decrees, Vietnamese have only been allowed to legally play state-run lotteries and place bets at a highly regulated dog-racing operation in the southern province of Ba Ria-Vung Tau. The first casinos open to locals most likely will be far from urban areas, said Ben Lee, managing partner at Asian gaming consultancy IGamiX. An earlier decree written by politburo members—and later revised by the prime minister to exclude specific projects—awarded the first licenses to Vingroup JSC to build on the southern island of Phu Quoc and Sun Group’s Van Don in the north. After the new decree, the politburo will still decide which of the country’s eight casinos and proposed new projects get licenses.

“Local gaming near an urban center encourages what they are trying to avoid—problem gambling among the people who can least afford it,” Lee said. Guidelines requiring Vietnamese to be aged 21 and prove a stable monthly income are aimed at people like Ho Chi Minh City electrician Vu Anh Tuan, 35, whose monthly earnings of $263 can’t pay off his $13,000 gambling debt. Tuan, who has a 2-year-old daughter, sold his motorbike and said he’s pressuring his mother to sell their house. He has friends whose debts are higher and one who is now homeless.

“My wife and I argue all the time over the debt from football betting,” Tuan said.

Vietnam’s economy grew slower than the government expected last

year, and its budget deficit is widening due to declining revenue from state-owned oil companies and an agricultural sector hit by drought.

The country’s 2016 debt is estimated at 64 percent of GDP compared with 41 percent in Thailand and 56 percent in Malaysia, according to the World Bank.

Vietnam is following the lead of other Asian governments that are endorsing legal gambling in a region that embraces games of chance. Japan’s parliament passed a bill legalizing casinos last December, while Universal Entertainment Corp. is preparing to open a $2.4-billion casino in Manila.

Overseas gaming companies have long eyed Vietnam for expansion.

Las Vegas Sands Corp. has for years considered a resort in Ho Chi Minh City and Hanoi, George Tanasijevich, the company’s managing director for global development, said in a statement. The company is “eager to proceed” with a project depending on future casino regulations, he said, adding the three-year pilot program presents uncertainty and risks.

Hong Kong’s Chow Tai Fook Enterprises Ltd. and VinaCapital Investment Management Ltd. are investing in a $4-billion project in the prime minister’s home province of Quang Nam along the central coast. In January former hedge-fund manager Phil Falcone, the largest investor in the Grand Ho Tram Strip casino resort a two-hour drive from Ho Chi Minh City, met with the prime minister in Hanoi. Bloomberg News

A10 Thursday, March 2, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Well-meaning rules can hurt consumers

T

he Supreme Court (SC) has recently shown we have a responsive judicial system that dispenses justice on merits in a fair, unbiased and meaningful manner when it issued a temporary restraining order (TRO) stopping the implementation of the Energy Regulatory Commission’s (ERC) controversial Retail Competition and Open Access (RCOA) policy.

The case stemmed from the petition filed by the Philippine Chamber of Commerce and Industry, Ateneo de Manila University (AdMU), San Beda College (SBC) Alabang and mall owner Riverbanks Development Corp., which asked the High Court to stop the implementation of the new regulations that compel power consumers with a monthly average peak demand of 1 megawatt to abandon their current power-supply contracts and enter into new contracts with any of the suppliers chosen by the ERC to supply the contestable market.

The TRO, issued by the 15-man High Tribunal during a regular en banc session last week, noted petitioners have established a clear, legal right to the TRO, considering that the Electric Power Industry Reform Act (Epira) provides for voluntary migration of end-users to the contestable market, and there appears to be no basis for the mandatory migration being ordered by the Department of Energy (DOE) and the ERC through the questioned issuances.

The petitioners said the new resolutions would deprive electricity consumers of their basic constitutional right to freedom of choice. Pointing out that the DOE and the ERC violated the Constitution and the Epira when they issued the new rules, they said the regulations would limit their choice of suppliers by prohibiting distribution utilities (DUs) from participating in the contestable market, even if the DUs can offer the lowest price to consumers.

The AdMU and SBC Alabang issued a joint statement welcoming the SC TRO. Both academic institutions said it is very encouraging their petition has successfully established a clear, legal right to the TRO, as they seek to uphold the spirit of Epira, which protects the freedom and the rights of all power consumers. They argued, “Epira clearly provides for the voluntary migration of end-users to the contestable market, and there appears to be no basis for the mandatory migration ordered by the ERC and the DOE through their issuances.”

Ateneo de Manila President Fr. Jose Ramon Villarin, SJ, said: “AdMU believes that our government and regulating bodies should ultimately seek to protect our basic, constitutional right to freedom of choice. And this right should extend to all electricity consumers. If we are allowed to choose the best supplier for our needs in a market that is allowed to work freely and for the common good, then such a scenario will be most beneficial to all consumers concerned, especially those smaller-scale contestable customers like schools and universities that may have a difficult time searching for a new contract.”

SBC Alabang said it is difficult for academic establishments to meet the proposed deadline by the ERC and the DOE of February 26, 2017, which forces customers to enter into new retail-supply contracts. As the SC affirmed, “If a TRO is not issued, the petition will become moot and petitioners stand to suffer grave and irreparable injury, because they will be disconnected from the distribution utility or made to pay a supplier of last resort a 10-percent premium between the higher contracts and the Wholesale Electricity Spot Market.”

We do not question the wisdom of the ERC and the DOE in crafting wellintentioned rules to give customers the freedom of choice in sourcing their power requirements. But when a policy being adopted runs counter to established statutes like Epira, or violative of the fundamental and supreme law of the land, it is best to recall or amend the rules and regulations in question.

Since 2005

BusinessMirror A broader look at today’s business

Newbie stock-market investing 101 John Mangun

OUTSIDE THE BOX

I

t is good that young people become involved in stock-market investing for the first time—and remember that I consider anyone under 40 years old as “young”. However, when I listen to seminars or read books, I get a little apprehensive. It is the same discomfort I felt when one of my sons had his first beer or went to school for the first time.

It is a necessary and positive transition, but you really do not know what you are getting into and I am worried that you are not prepared.

In fact, I know that you are not fully prepared.

The talks and books always come with a disclaimer like: “You do realize that you can lose all your money in the stock market and the rest of your life will be a miserable shadow of existence as you wait impatiently for death.” Ok, maybe not quite that dramatic but maybe it should be.

Church tied up with the elite

✝ Ambassador Antonio L. Cabangon Chua

Cecilio T. Arillo

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database

T. Anthony C. Cabangon Jun B. Vallecera

I am reminded of the 19th-century poem. “Will you walk into my parlor?” said the Spider to the Fly, ’Tis the prettiest little parlor that ever you did spy. I have within my pantry, good store of all that’s nice; I’m sure you’re very welcome—will you please to take a slice?”

The idea is that with the benevolent and generous assistance of your favorite guru, you will only feast and avoid the dangerous web. That is what the Fly thought also.

Learning as a cook to slice and

dice vegetables or invest in the stock market, you cannot gain enough knowledge through a book or from a mentor. It is only with practice that you can become successful. And I have the knife cuts and the financial losses to prove my point.

If you are interested in “long-term investing”, decide how much money you can do without for a while and buy the shares of your favorite company, whether it builds condominiums or makes a product that you buy.

Look at the price once a week and have no fear of losing money unless an external event—like an earthquake or the company president stealing all the money—changes the future outlook.

If you want to “trade” the market, take some capital and buy lotto tickets each week. Maybe you’ll hit the “Grand Lotto Jackpot” and you will never have to worry about the stock market again. But until you do pick the 6/55 winner, trade only on paper for at least one month. Under no circumstances do you put any money at risk. I use a Zwilling J. A. Henckels Twin 1731 Chef’s Knife; my youngest son does not. He is not ready to

I

N Mater et Magistra, the affable Pope John XXIII explicitly rejected a basic element in the International Monetary Fund-World Bank (IMF-WB) creed that the State should refrain from economic activism. That encyclical acknowledged that there are situations when the State must be an economic activist, if only to help the economically disadvantaged, such as the nation’s farmers.

The late Harvard-trained economist-lawyer Alejandro Lichauco said there were passages in that encyclical which unquestionably established that the principle of state economic interventionism—so anathema to the IMF-WB ideology of liberal capitalism—is part and parcel of the Church’s social doctrine: “The State, the reason for whose existence is the realization of the common good in the temporal order, cannot keep aloof from the economic world. It must be present to promote in a suitable manner the production of a sufficient supply of material goods the use of which is necessary for the practice of virtue…. It is also its ineluctable task to contribute actively to the betterment of the condition of life of the workers….

“First of all, it should be affirmed that the economic order is the cre-

ation of the personal initiative of private citizens themselves working either individually or in association with such other in various ways for the prosecution of economic interests.

“But here for the reasons that our predecessors have pointed, the public authorities must not remain inactive if they are to promote in a proper way the productive development in behalf of social progress for the benefit of all citizens.”

Lichauco said that, insofar as church social doctrine was concerned, the “fundamental principle” of liberal or laissez-faire capitalism is downright immoral. That fundamental principle is free, unbridled competition, not only locally but internationally; pit the undercapitalized local industrialists against the overcapitalized multinational companies; pit

the illiterate Filipino farmers against foreign corporate farms doing their farming with the aid of satellites even if that means killing the only livelihood our farmers know, and driving them to eat field rats.

“And that’s exactly what has been happening to this country since Edsa People Power Revolution. It all began with the lunacy called import liberalization and ended up in that act of economic suicide named GATT [General Agreement on Tariffs and Trade] and the WTO [World Trade Organization] without safety nets,” Lichauco said.

But if what economist Lichauco said is true, why is it that the Church here hasn’t condemned the IMF-WB, as well as the government that since Edsa has followed the commands of those two institutions?

In reply, Lichauco said: “Insofar as its social doctrine is concerned, the Church here has hardly been known to follow what it preaches. The Church is much too tied up with the elite and the elite want the freedom to do anything with their money, including taking their bath in Italian bathtubs, reading under the glow of Venetian chandeliers, go sightseeing around the world any time they please and otherwise surrounding themselves with imported luxuries and gorging themselves with imported food, even if that means that the State must squander the hard-earned dollars of our overseas workers to finance the importation

wield a kitchen tool costing several hundred dollars. You need to first test your trading plan to see if you are ready to shoulder the risk.

If you decide that trading on Technical Price Analysis is the way to go, understand this fact. Lower price issues follow the “techs” much better. A 10-year study of 1,457 chart patterns on New York Stock Exchange issues showed that the lowest priced quality company stock saw an average rise of 61 percent after an upside breakout.

Mid-priced issues had a 24-percent price move and high-price stocks went up 16 percent. When the price reversed, the “cheap” stocks fell 21 percent; the “expensive” went down 16 percent.

Maybe the best advice for a newbie investor comes from former hedge fund manager Jim Cramer: “Every once in a while, the market does something so stupid it takes your breath away”…and your money too.

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

of non-essentials and luxuries.”

Lichauco said, “The Church here obviously lives in terror of the evil incarnated in the ideology of the IMF-WB, displaying a moral cowardice which has made a caricature of the Christ who renounced Satan’s offer of the power and the glory and the kingdom.”

“The truth is if the Church was really serious about its social doctrines, it should have from the start condemned the IMF-WB as the incarnation and assiduous promoter of a malevolent and immoral ideology that has driven millions of Filipinos to destitution and acts of desperate perversion.

“The nationalists and the communists who have denounced and continued to denounce the imperialism of the IMF-WB while the Church maintains a deafening silence on the immorality of the free trade creed and the creed of ‘global competitiveness’—preferring instead to concentrate on denouncing jueteng and proclaiming from the rooftops its acts of petty and inconsequential charities while issuing press releases on political issues over which it has no business interfering, just so to get itself in the papers and impress us with what it thinks is its moral ascendancy.”

To be continued To reach the writer, e-mail cecilio.arillo@ gmail.com.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Filipino caregivers: Service with a heart

Desert survival Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Ariel Nepomuceno

DECISION TIME

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ilipinos are characteristically good-natured, especially at work. We are known for our industry, passion and compassion.

Not surprisingly, therefore, companies and employers prefer Filipinos, particularly in hospitality and service industries.

In a study done by Taiko Immamura and Isamu Saito of Rissho University and Mariko Miyagi of Hosei University in Japan, the researchers took note of the characteristics and skills of Filipino caregivers that make them widely accepted and preferred worldwide by foreign clients who are under treatment.

In the study’s abstract, the researchers noted that Filipinos work all over the world as caregivers, and behind the success of the Filipinos in the field of care service are the unique aspects of some skills and traits they bring along with them to foreign lands. They went on to identify the following traits and cultural values as the most associated with Filipinos: deep respect for the elderly, close family ties, flexibility and creativity, hard work, pakikisama (getting along with others) and proficiency in the English language.

Here are direct quotes from their study: n Deep respect for the elderly.

“Filipinos can be considered as exceptional in this respect since being a caregiver is not only a matter of profession and thereby getting good compensation but this is something about deep love, respect and care to someone of old age or anybody else who needs treatment, be it physical or emotional disability. This is something rooted in Filipino culture and an identity as a Filipino.” n Close family ties. “This is a significant factor that contributes to the expertise of the Filipinos. That is, relationship among Filipino families extends to something of higher importance and a great value. Filipino caregivers have the edge of offering good services in a foreign land since, in this context, the patient or client badly needs the utmost attention, understanding and care of the immediate family.” n Flexibility and creativity.

“Filipinos are flexible and adjust to whatever happens, and that the Filipinos are creative, resourceful and quick learners. This is particularly shown in the ability of the Filipinos to create and produce something.” n Hard work. “Filipinos have a great capacity for hard work, given proper conditions. The desire to raise one’s standard of living and to possess the essentials of a decent life for one’s family, combined with the right opportunities and incentives, make the Filipino work very hard.

This is manifested most noticeably

in the willingness to take risks with jobs abroad and, while there, to work two or three jobs.” n Pakikisama. “This trait of pakikisama, or getting along with others is not something like a camaraderie only with other people, but is also serving as a useful tool in building a good relationship with others by extending help. No wonder then that Filipinos are much at home to this kind of service since it is within one’s value as a Filipino.” n English proficiency. “The English language is no longer foreign to the Filipino people. It is a part of the education system of the Philippines and the daily life of Filipinos. Mostly, even ordinary Filipinos converse with their fellows in the English language. In a study conducted by McBride [2001], it confirms the proficiency of the Filipinos elders in English language abroad, particularly in the United States of America.”

The news that the United States will need a huge number of caregivers in the next 10 years due to its growing aging population presents employment opportunities for the Filipino caregivers. Given the latter’s proven characteristics and skills relative to the job, they are certainly even at an advantage over their peers.

“If you are...”

The desert is a place of truth, as it is a place of trials. In the wilderness we look into our inner selves and reflect on our motives and goals. Following his pivotal religious experience of God at the time of his baptism at the Jordan, Jesus withdrew into the desert “to be tempted by the devil.”

The authenticity of his relationship with God and his perceived vocation needs to be discerned further and tested. Like Israel of old, Jesus’ “40” days and nights in the wilderness would be either a “yes” or a “no” to God with the struggle it entails.

Being truly human, Jesus could not bypass the trial. At the Jordan he heard, “This is my beloved son,

with whom I am well pleased” (Matthew 3:17). The devil picked it up from there, to make him doubt what God proclaimed, just like the way the devil seduced the woman to doubt God’s word (Genesis 3:1-6). But here subtly and no outright contradiction, a suggested testing of God’s word, “If you are the Son of God, command that these stones become loaves of bread.”

Verify the truth, get a sign—changing stones into bread would be just timely to appease hunger after a long fast.

Hunger for food had also led Israel in the desert to doubt whether God had really chosen them (Exodus 16:3).

God’s word as life

The stand of Jesus was unequivocal:

One does not doubt God’s word; in fact, it alone gives life. Quoting from Deuteronomy (8:3), Jesus countered the devil’s imagined bread with the apodictic truth that “man lives by every word that comes forth from the mouth of the Lord.” For God’s word is as the manna that concretized God’s promised care for His people journeying in the desert.

As expected, the devil does not give up easily. The second temptation is a variation of the first.

From the parapet of the temple in Jerusalem, a jump before the teeming crowds below would certainly establish God’s expressed love for Jesus. Using God’s own word, the devil cited the Bible to reason out that some dramatic experience of God’s concern for Jesus would prove that he is truly the Son of God. And the response of Jesus to the tempter the second time around is also but a repetition of his total faith in and radical commitment to God. Again relying on God’s written word, Jesus told the devil, “You shall not put the Lord, your God, to the test” (Deuteronomy 6:16). Jesus would not do what the people did at Massah and Meribah challenging God to prove Himself to them (Exodus 17:7). Asking for proofs and signs as test is in

Val A. Villanueva

Businesswise

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The COMP complaint accused Lopez of shortcutting legal and administrative processes, disregarding due process and vested rights, and even ignoring the sanctity of contracts between the government and its mining contractors.

But who cares for the caregivers?

For comments and suggestions arielnepo.businessmirror@gmail.com

This development arose as mining stakeholders, shunning all niceties, lambasted Lopez who they claimed to exhibit extreme bias against the industry, while extending favors to her own family.

The Chamber of Mines of the Philippines (COMP) accused Lopez of conflict of interest when she gave the Lopez-owned company an environmental compliance certificate (ECC) to run a geothermal power plant on a 14.03-hectare mountain in Kananga, Leyte, in January of this year.

“The Lopez family’s many involvements in the energy sector highlight the glaring conflict of interest: How will she resolve the environmental catastrophes that involve her family’s energy business, such as the 2010 First Philippine Industrial Corp. pipeline leak that effectively ruined the West Tower Condominium?” said COMP in a statement.

Based on a document furnished to BusinessWise, Lopez ordered the Environmental Management Bureau to award the Lopez-owned Green Core Geothermal Inc. an ECC to put up the Tongonan Geothermal Power Project in Barangay Lim-ao, Kananga, Leyte. The power plant has auxiliary systems and a 138-kilovolt substation, nestling on a 14.03-hectare mountain. It is projected to generate 123 megawatts of electricity.

COMP officials Artemio Disini, Nelia Phalcon and Ronald Recidoro took their gloves off and filed a formal letter with the powerful Commission on Appointments committee on environment and natural resources opposing Lopez’s confirmation.

The letter says that Lopez’s recent actions manifest an “undeniable bias” against large-scale mining, “rendering her unfit and incapable of a responsible, fair, just

and balanced implementation of the Constitution, the Philippine Mining Act and related laws and regulations, and of upholding personal interest and advocacies over public interest.”

The COMP complaint accused Lopez of shortcutting legal and administrative processes, disregarding due process and vested rights, and even ignoring the sanctity of contracts between the government and its mining contractors.

“Lopez is grossly unfit, and does not have the administrative experience and competence to lead the DENR. Lopez has a poor track record in leading and managing environment and ecotourism projects,” the complainants said.

Dominguez, for his part, assures that due process will be respected in an industry audit that would hopefully be completed in three months.

The first meeting of the audit committee starts on Friday. He says that what the government is after is to see to it that each stakeholder’s right will be taken into account, and a suitable balance will be arrived at; even as he points out the possible

of a taxpayer [after an accurate and proper adjustment of nondeductible items] not accounted for by his income-tax returns, leads to the inference that part of his income has not been reported.” This is definitely different from the mere differences in the amounts reported by transacting parties.

As amplified in Revenue Memorandum Circular 43-74, the net worth method is an extension of the accounting principle: Assets minus liabilities equals net worth. The taxpayer’s net worth is determined both at the beginning and at the end of the same taxable year. The general theory underlying this method is that the taxpayer’s money and other assets in excess of liabilities after accurate and proper adjustment of nondeductible and nontaxable items not accounted for in his tax return is deemed to be his unreported income. Clearly, the basic concept of this net worth method of determining income is that any increase in

taxpayer’s net worth, after making some adjustments, constitutes taxable income.

Indeed, there is basis for resorting to the net worth method in determining possible unreported taxable income. There is a provision in the Tax Code which states that when a report required by law as a basis for the assessment of any national internal revenue tax shall not be forthcoming within the time fixed by laws or rules and regulations or when there is reason to believe that any such report is false, incomplete or erroneous, the Commissioner shall assess the tax on the best evidence obtainable.

Thus, if the taxpayer does not maintain books of account or the books of account do not clearly reflect the income and there is evidence of a possible source or sources of income to account for the increases in net worth, the net worth method may be used. Hence, there has to be a beginning and ending net worth.

If there is no definite starting point or opening net worth, as well as ending net worth, the net worth method of determining unreported income cannot be used.

More often, we hear from the news reports about significant or unexplained increases in the net worth of some personalities. If these are legally earned but not subjected to tax, then the tax authority may rightfully assess for the rightful share of the government. On the other hand, if these are illegally acquired, without a doubt, these are not subjected to taxes. “Illegally earned income is subject to income tax”, the US Supreme Court declared in 1927 in one case that eventually became the basis for the US IRS to investigate Al Capone, prosecute him and put him behind bars. In this jurisdiction, illegally sourced income is also subject to tax. The presumed income and the corresponding taxes due can be determined through the use of the net worth method.

The challenge now, not only for Filipino caregivers in the US but worldwide, is to guarantee that they also get the care and compensation they equally and rightfully deserve.

Sadly, however, this is not the case for some Filipino elderly caregivers in America.

According to a policy report by three California-based researchers, most Filipino elderly caregivers in the Los Angeles area work past retirement age, among other things, due to lack of employment protection and benefits.

While the state of the US-Philippines relations hangs loosely in the balance today, given the change of leadership in both countries, may the best interest of each country’s citizens take primacy above all.

Meantime, let’s celebrate the Filipino caregivers around the globe who continue to show the world what it means to sincerely and diligently serve with a heart.

Fulvio D. Dawilan

Tax law for business

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n a previous article in this column, we discussed the usual practice by revenue examiners of comparing the information reported by taxpayers in their books/tax returns with other reports of the same taxpayer or with information from third parties. The revenue officers usually treat the excess of sales/revenues reported by the suppliers over the costs/expenses reported by their customers as income of the customer, and accordingly impose the corresponding tax. As we have commented, this is improper because this is supposedly an additional cost/expense to the customer and not an income. however, show that an income-tax assessment was made on the basis of the net-worth method of assessment. As described by the Court in that case, “the method is based upon the general theory that money and other assets in excess of liabilities

the Bible the epitome of doubting God’s word (Numbers 20:13-14. 24; Psalm 81:8; 106:32).

Alálaong bagá, the stand of Jesus is final and irrevocable: absolute fidelity to God. “The Lord, your God, shall you worship and him alone shall you serve” (Deuteronomy 6:16).

The devil’s final attempt to distract Jesus with the trump card of having all the kingdoms of the world if only Jesus would prostrate himself before him in adoration, received the clear-cut rebuke, “Get away, Satan!” The devil is unmasked; calling Satan by his name is to expose and reject him, the purpose of all exorcism. One makes no deals with the devil; its sole purpose is to separate us from God into perdition. We need to expose it in whatever way it tries to infiltrate us.

Lent is our annual journeying in the desert in imitation of Jesus Christ. Like him “led by the Holy Spirit”, we look into ourselves and examine our priorities in life. We need to affirm our absolute commitment to listen and live by the word of God.

Join me in meditating on the Word of God

every Sunday, 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.

Dominguez: Fair play will be ensured in mines’ closure

inance Secretary Carlos G. Dominguez III says the case of each mining contract that was canceled and every mining company that was closed by the same order of Environment Secretary-designate Regina Paz L. Lopez will be reviewed thoroughly.

The net worth method

The usual justification for this approach as found in most assessment notices is the old case of Perez vs CTA and CIR, L-9193, May 29, 1957/Perez v. CTA and CIR, L-10507, May 30, 1958 (the Perez Case). A review of the Perez Case would,

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ach year at the start of the Lenten season, we are led to the desert to undergo a survival course with Jesus. The narration of the temptation in the desert (Matthew 4:1-11) shows us that to be tempted is human, but to overcome temptation is Christian.

Thursday, March 2, 2017 A11

losses that affected communities will suffer in the event that identified mining firms’ contracts are nullified and those already in operation are shut down. He estimates some $821-million loss per year in government revenues if Lopez’s order is carried out.

Without naming Lopez, Dominguez says that it is of utmost importance that there should be a delineation between being a crusader and an environment chief. Lopez is an avowed antimining advocate before she took the government position of environment secretary-designate.

T he Tongonan Geothermal Plant’s operations are not without inherent risks. Experts have previously cautioned against major adverse effects on the environment that the plant may cause in its disposal of geothermal waste fluids.

“The fluids from the Tongonan wells contain more dissolved solids than those from most other geothermal fields; these include chloride, silica, arsenic, boron and lithium.

Arsenic, boron, lithium and mercury all have known toxic effects on plants, animals and people. The indiscriminate disposal of geothermal wastewater would have severe effects on health and productivity,” the experts said.

Was Lopez apprised of these possible dangers before awarding the ECC to her family-owned Green Core Geothermal Inc.?

For comments and suggestions, e-mail me at mvala.v@gmail.com

To reiterate, the net worth method mirrors the basic accounting concept that assets minus liabilities equals net worth. If there is an increase in net worth, the presumption, if not explained, is that the increase constitutes income, whether the presumed income is acquired legally or illegally.

But this contemplates a situation where there are beginning/opening and ending net worth. Certainly, the method does not apply when there is merely difference in the amounts recorded by the transacting parties.

The author is a senior partner of Du-Baladad and Associates Law Offices (BDB Law), a memberfirm of WTS Global.

The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at fulvio.dawilan@ bdblaw.com.ph or call 403-2001 local 310.

2nd Front Page BusinessMirror

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House approves death-penalty measure on second reading

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By Jovee Marie N. dela Cruz

More Chinese tourists seen visiting Cebu on better ties FERRER: “Our focus is on China because of the opportunity of the Chinese market.

We expect a lot from the tourism side, and even businesses.”

@joveemarie

uring the country’s observance of Ash Wednesday, the House of Representatives approved on second reading the death-penalty bill being opposed by the Catholic Church. on crimes defined as heinous for being grievous, odious and hateful offenses, which, by reason of their inherent or manifest wickedness, viciousness, atrocity and perversity, are repugnant and outrageous to the common standards and norms of decency and morality in a just, civilized and orderly society,” the substitute bill read.

“The death penalty shall be executed through hanging, firing squad and lethal injection. The death sentence shall be carried out not earlier than one year nor later that 18 months after the judgment has become final and executory, without prejudice to the exercise by

By Lorenz S. Marasigan @lorenzmarasigan

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file photo

Through viva voce voting, the majority of the lawmakers passed House Bill (HB) 4727, or “An Act Imposing Death Penalty on Certain Heinous Crimes”, repealing for the purpose Republic Act (RA) 9346, or “An Act Prohibiting the Imposition of Death Penalty in the Philippines”.

The House rejected all the individual amendments to the deathpenalty bill being proposed by several lawmakers.

The bill, principally authored

by Speaker Pantaleon D. Alvarez, is expected to be passed on third and final reading before Congress goes on break on March 15.

“The death penalty is imposed

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the President of executive clemency power at all times,” it added.

However, the bill indicated that the death penalty shall not be imposed when the guilty person is below 18 years of age at the time of the commission of the crime or is more than 70 years of age.

The bill said the penalty of reclusion perpetua to death and a fine ranging from P500,000 to P10 million shall be imposed upon any person, who, unless authorized by law, will import, sell, trade, administer, dispense, deliver, give away to another, distribute, dispatch in transit or transport any dangerous drugs.

Any person or group of persons who will maintain a den, dive or resort where any dangerous drug is used or sold in any form will also face the penalty of reclusion perpetua to death and a fine ranging from P500,000 to P10 million.

Also, the penalty of reclusion perpetua to death and a fine ranging from P500,000 to P10 million will be imposed upon any person, who, unless authorized by law, would engage in the manufacture of any dangerous drug.

Meanwhile, the penalty of reclusion perpetua and a fine rang-

ing from P500,000 to P10 million will be imposed upon any person, who, unless authorized by law, would possess any dangerous drug in the following quantities: ■ 10 grams or more of opium; ■ 10 grams or more of morphine; ■ 10 grams or more of heroin; ■ 10 grams or more of cocaine or cocaine hydrochloride; ■ 50 grams or more of methamphetamine hydrochloride or shabu; ■ 10 grams or more of marijuana resin or marijuana resin oil; ■ 500 grams or more of marijuana; and ■ 10 grams or more of other dangerous drugs such as, but not limited to, methylenedioxy-methamphetamine (MDA) or “ecstasy,” paramethoxy-amphetamine, trimethoxy-amphetamine, lysergic acid diethylamine, gamma hydroxyamphetamine, and those similarly designed or newly introduced drugs.

The bill said reclusion perpetua and a fine ranging from P400,000 to P500,000, if the quantity of shabu is 10 grams or more, but less than 50 grams.

he management of the MactanCebu International Airport is bullish that the volume of Chinese tourists coming in the Philippines via Cebu will continue to increase this year, due to much-improved relations between the two countries.

GMR-Megawide Cebu Airpor t Corp. President Louie B. Ferrer said China has proven to be a significant market for the airport operator, as Chinese tourists now make up 12 percent of the total passenger count at the Cebu air hub from just 8 percent in 2015. “China is a really an important market for us. Our focus is on China because of the opportunity of the Chinese market,” he said. “We expect a lot from the tourism side, and even businesses.”

Currently, there are two Mainland Chinese airlines flying in and out of Cebu: Xiamen Airlines and Sichuan Airlines. “China Eastern has also signified its interest,” Ferrer said.

As such, the company is hoping that the Chinese government will set up an embassy in Cebu to further support growth in the Queen City of the South.

“Were also hoping to have visa on arrival for Chinese visitors,” Ferrer said.

GMR-Megawide is targeting to breach the 10-million passenger mark for the airport by the end of 2017. The airport clocked in a 11.5-percent increase in passenger volume to 8.9 million passengers in 2016, from 7.98 million passengers the year prior. The Filipino-Indian joint venture started operating the airport in Mactan in November 2014, after winning the deal to modernize the existing facility while building a second terminal to support projected growth.

Slated to open in June 2018, Terminal 2 will increase passenger capacity to 12.5 million. The new terminal, spanning 65,500 square meters, will not only lessen congestion but will also offer an exciting and wideranging retail environment. The architectural design is inspired by Cebu’s island heritage.

Manufacturers shift into recovery mode Continued from A1

The PMI is a composite index, calculated as a weighted average of five individual subcomponents.

The components include new orders, which weigh the most at 30 percent of the index; output, at 25 percent of the index; employment, 20 percent; suppliers’ delivery times, 15 percent; and stocks of purchases, 10 percent.

Readings above 50 signal an improvement in business conditions on the previous month, while readings below 50 show deterioration.

The Philippines’s 53.6 PMI is above the Asean average PMI of 50.3 in February. It is also the secondhighest PMI for the month in the region, next to Vietnam’s 54.2.

“After a marked slowdown at the start of 2017, the Philippines’s manufacturing sector gathered momentum in February. A further deceleration in output growth was offset by faster expansions in new orders, employment and stocks of purchases. Greater client demand and high business optimism saw

Filipino factories continue to build stocks,” the report said.

Business confidence also remains high for manufacturing output in the next 12 months due to robust client demand. Factories also hired more workers during the month, as firms strive to raise production capacity to meet up with demand.

The recovery of the manufacturing sector’s growth during the month could have been larger, but exports continued to lose momentum for the third consecutive month, as the lack of certain raw materials was reported to have dampened overseas sales, and also affected production schedules.

Concerns have also been raised on the elevated value of the dollar against the peso, pushing manufacturers’ average cost burdens to surge along with higher prices of imported inputs.

“Cost inf lation reached its highest since the survey inception. There was evidence of higher prices for imported raw materials, such as metal and oil. This resulted

in companies raising factory-gate prices to the greatest extent in the series history,” the report read.

IHS Markit economist Bernard Aw said as the economy sees further depreciations of the peso and higher prices for globally traded raw materials, imported inputs became more expensive, which, in turn, influenced the behavior of Filipino manufacturers.

“Input cost inflation surged to a record high during February, which led to firms increasing their selling prices and passing some of this inflation on to clients,” Aw added.

“That said, increasing cost pressures may affect corporate profit margins, and spill over to consumer prices. This will strengthen the case for Bangko Sentral ng Pilipinas to tighten interest rates,” the economist added.

The local currency has been hitting fresh 10-year lows during the week to the 50-to-a-dollar territory, amid investor jitters on global and local politics, as well as economic developments.