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Friday, May 5, 2017 Vol. 12 No. 204

Govt told to start working on tax reform’s safety net

By Jovee Marie N. dela Cruz

W

There’s no vetting; there’s no know-your-customer requirements. It’s very high risk.”

—Global Market Advisors wagers on behalf of their long-distance clients. Video cameras on the ceiling broadcast the action on the tables for gamblers who are watching, mostly from China.

Philippine casinos reported as

PESO exchange rates n US 49.9330

P25.00 nationwide | 5 sections 28 pages | 7 days a week

A seasoned banker as BSP governor, why not?

BATOCABE: “We need to prepare like [we’re] preparing for an incoming disaster.”

The proposed Tax Reform for Acceleration and Inclusion Act was approved by the House Committee on Ways and Means on Wednesday.

Continued on A2

Phone betting ups laundering ante

I

business news source of the year

@joveemarie

ith the Palace now confident of the taxreform package’s timely approval, a lawmaker said concerned government agencies should start working on the safety nets to ensure the vulnerable sectors will not be crippled by the changes in the tax regime.

n a VIP room reserved for highspending gamblers at City of Dreams Manila casino in the Philippine capital, many of the players are nowhere to be seen. Theyº are not even in the country.

Instead, they are placing bets by telephone, a practice banned in other gaming centers, such as Singapore, Australia and Macau, but legal in the Philippines. Young men and women sitting at tables at the casino, many from China and dressed in smart black uniforms, chat in Chinese over mobile-phone headsets, placing

2016 ejap journalism awards

much as 110 percent increases in VIP revenue from high-rollers—from $27 billion in bets placed last year, and possibly far more if off-books betting were tallied. Phone betting, also known as betting by proxy, has

grown to account for as much as 85 percent of the business at some VIP rooms used by big spenders, according to people familiar with the operations, who asked not to be identified as they’re not authorized to speak publicly.

“There’s been a huge upswing in players using proxy betting,” said Shaun McCamley, Bangkok-based par tner at gaming consultanc y Global Market Advisors, who said it is especially popular among gamblers in China.

Continued on A12

Make Sense Dr. Jesus Lim Arranza

P

resident Duterte need not look beyond his own backyard to find a person who could head the Bangko Sentral ng Pilipinas (BSP). Jose C. Nograles, a fellow Davaoeño, known personally to him, has the professional background and training that may be well suited to take the helm of the BSP. Continued on A11

PHL REMAINS AS‘DARLING’ OF ECONOMISTS IN ASEAN

By Cai U. Ordinario @cuo_bm

Y

OKOHAMA, Japan—The Philippines continues to be the “belle of the ball” for many ana lysts, including t he A sea n+3 Mac roeconom ic Research Office (Amro), which projected the country’s economic growth to remain robust until next year.

Amro expects the Philippines to post a growth of 6.8 percent this year and 7 percent next year.

T hese are w ithin the growth

expectations of local and international organizations, including multilateral development banks.

Inflation is also expected to average 3.1 percent this year and 3.2 percent next year.

This is within government ex pectations of 2 percent to 4 percent. “[Growth will be] supported by infrastructure investment, investment on transportation equipment and household consumption,” Amro stated in its report launched here on Thursday.

n japan 0.4430 n UK 64.2688 n HK 6.4166 n CHINA 7.2382 n singapore 35.7379 n australia 37.0553 n EU 54.3671 n SAUDI arabia 13.3162

See “PHL,” A2

Source: BSP (4 May 2017 )

BMReports BusinessMirror

A2 Friday, May 5, 2017

www.businessmirror.com.ph

Govt told to start working on tax reform’s safety net Continued from A1

Fina nce Sec ret a r y C a rlos G. Dom i ng uez I I I e x pressed confidence that it is on track to its goa ls of refor ming the country’s tax system under the current administration.

“You know this is one of the first bills we put out within 100 days of our coming into office, and I think it’s quite an accomplishment itself,” Dominguez said. “We thank them, and we hope that this starts a momentum.” Dominguez also said that with this victory, the other packages that have been proposed by the Duterte administration will now be easier to pass.

Safety nets

PARTY-LIST Rep. Rodel Batocabe of Ako Bicol said safety measures are needed to protect the most vulnerable sectors, which include the transport sector and the poor, against the tax increases.

“The first sector that will be immediately affected by the tax increases, particularly on petroleum products, is the transport sector, which is composed of drivers, small operators, taxi, jeepney and bus drivers and UV Express, unless [the increase is] immediately passed on to the consumers,” he said.

“The No. 1 safety net is for the government transport regulatory body to determine immediately how much should be passed on to the consumers [following the price increase on the petroleum products], because the transport sector will not survive if they will carry the burden 100 percent. It will be a big problem if our drivers stop working,” Batocabe said.

Besides the transport sector, the lawmaker said the poor will also feel the initial shock of the tax reform.

“The DSWD [Department of Social Welfare and Development] already targeted the marginalized, who are most likely vulnerable in

Phone betting. . .

The contribution of VIP bets will exceed 50 percent this year, Morgan Stanley forecasts. Phone gamblers from China, Korea and beyond are contributing to the company’s increased revenue, along with growing numbers of Chinese tourists to the Philippines, Bloomberry Resorts Chairman Enrique Razon said

terms of price hike. The agency should increase the cash-transfer program to help them from the shock,” Batocabe added.

He said the departments of Finance (DOF), Social Welfare and De ve lopment ,Tra n s por t at ion and Energy, and Land Transportation Franchising and Regulatory Board should now start working on their respective safety nets for the vulnerable sectors.

“The middle class and the rich can cope with the increase. We need to prepare like [we’re] preparing for an incoming disaster,” Batocabe added.

O n Wed nesd ay vot i ng 17 against four and three abstentions, the Ways and Means Committee approved a technical working group-substitute tax-reform bill.

Under the bill, workers earning P250,000 will be exempted from paying personal income taxes.

The bills also include P6 tax on petroleum products, and ad valorem tax on brand new automobiles that could cause prices of basic goods to significantly rise.

Petroleum tax

PDP-Laban Rep. Dakila Carlo Cua of Qurino, chairman of the panel, said the House and the DOF have decided to spread out the proposed P6 per liter excise-tax increase into three tranches of P3, P2 and P1 in the first three years.

The measure imposes the following tax rates: Leaded premium gasoline, per liter of volume capacity, from P5.35 to P7 in 2017, P9 in 2018 and P10 in 2019; unleaded premium gasoline, per liter of volume capacity, from P4.35 to P7 in 2017, P9 in 2018 and P10 in 2019; aviation turbine jet fuel, per liter of volume capacity, from P3.67 to P7 in 2017, P9 in 2018 and P10 in 2019; kerosene, per liter of volume capacity, from P0.00 to P3 in 2017, P5 in 2018 and P6 in 2019; diesel fuel oil, and on similar fuel oils having more or less the same gen-

Continued from A12

in an interview on April 20. Bloomberry didn’t otherwise respond to questions about its antimoney laundering and know-your-customer practices.

At City of Dreams Manila, operated by the local unit of Melco Resorts & Entertainment Ltd., the volume of bets by high-stakes players more than doubled

erating power, per liter of volume capacity, from P0.00 to P3 in 2017, P5 in 2018 and P6 in 2019; liquefied petroleum gas, per liter, from P0.00 to P3 in 2017, P5 in 2018 and P6 in 2019; asphalts, per kilogram, from P0.56 to P3 in 2017, P5 in 2018 and P6 in 2019; bunker fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity, from P0.00 to P3 in 2017, P5 in 2018 and P6 in 2019. These tax rates shall also be increased by 4 percent every year thereafter effective on January 1, 2020, through revenue regulations issued by the DOF secretary.

Meanwhile the panel is considering to include excise tax on sugarsweetened beverages and carbonated drinks through a levy of P10 per liter of volume capacity with 4 percent increases every year in the tax package.

Auto

Meanwhile the panel has also adopted new schedules and brackets for auto-excise tax in the package. The DOF is pushing for the excise tax on vehicles to address heavy vehicular traffic in the country.

Under the proposal, the excise tax will be implemented in two schedules. For 2018 if the net manufacturer’s price/importer’s selling price is P600,000, the excise tax will be 3 percent. If the net manufacturer’s price/importer’s selling price is over P600,000 to P1.1 million, the excise will be P18,000 plus 30 percent of the value in excess of P600,000.

If the net manufacturer’s price/ importer’s selling price is over P1.1 million to P2.1 million, the excise tax will be P168,000 plus 50 percent of the value in excess of P1.1 million. If the net manufacturer’s price/importer’s selling price is over P2.1 million to P3.1 million, the excise tax will be P668,000 plus 80 percent of the value in excess of P2.1 million.

If the net manufacturer’s price/ last year to P327 billion ($6.6 billion), compared with 31-percent growth for mass tables that attract casual gamblers.

Melco said in an e-mailed statement that it complies with the country’s antimoney-laundering rules, and works closely with the regulator, Pagcor, as well as the local government, on matters that affect the Philippine gaming industry.

Even higher

The actual amount of bets placed using

importer’s selling price is over P3.1, the excise tax will be P1,468,000 plus 90 percent of the value in excess of P3.1 million.

For 2019 if the net manufacturer’s price/importer’s selling price is P600,000, the excise tax will be 4 percent. If the net manufacturer’s price/importer’s selling price is over P600,000 to P1.1 million, the excise tax will be P24,000 plus 40 percent of the value in excess of P600,000.

If the net manufacturer’s price/ importer’s selling price is over P1.1 million to P2.1 million, the excise tax will be P224,000 plus 60 percent of the value in excess of P1.1 million.

If the net manufacturer’s price/ importer’s selling price is over P2.1 million to P3.1 million, the excise tax will be P824,000 plus 100 percent of the value in excess of P2.1 million. If the net manufacturer’s price/importer’s selling price is over P3.1 million, the excise will be P1,824,000 plus 120 percent of the value in excess of P3.1 million.

Earlier, Cua said the lower chamber is eyeing to pass the tax-reform package by June.

“Our target is to transmit it to the Senate before the Congress goes on another break in June,” he said.

The bill also includes the relaxation of the Bank Secrecy Act and taxing Philippine Charity Sweepstakes numbers’ game and lotto winnings. The tax-reform package involves foregone revenue of around P200 billion but, at the same time, will generate around P206.8 billion for the government in the first full year of its implementation.

Backlash

At least two senators, however, said they doubt that the tax-reform bill will be passed by June.

“The tax package is a bit controversial because they’ve included an increase of the excise tax on fuel, which will impact a lot on everyone, not just the richest of society but also the poorest of the poor,” proxies is even higher than the official data from casino operators, according to several people familiar with the Philippine industry. That’s because proxy betting makes it easier for gamblers to place side bets with junket operators and agents that are unrecorded. The total amount of side bets may be five or six times the size of reported proxy bets, according to the people.

“The agent and the player may agree that while play against the house is de-

said Juan Miguel Zubiri, a senator aligned with Duterte. “That’s where the difficulty is coming into the tax-reform measure.”

Senate Minority Leader Franklin M. Drilon said he didn’t think the tax reform would be passed this year. “We haven’t even seen any legislation yet,” Drilon said in an interview. “I don’t think it will be possible for the administration to get it through this year in the time we have left.”

With one of the lowest tax ratios in Southeast Asia, authorities are under pressure to boost revenue to keep the budget deficit under control at 3 percent of GDP and prevent the nation’s hard-won credit rating from falling back to junk.

Duterte’s support

Any delay or attempt to water down the tax reform may not only curb the rollout of new infrastructure, but also diminish growth prospects for one of the world’s fastest expanding economies.

It’s also a test of Duterte’s support almost a year after his election victory. More than 200 lawmakers from different parties in the lower house of Congress coalesced behind him to form a “super majority”, while 18 of the 24 lawmakers in the Senate are aligned with the majority bloc.

With midterm congressional elections due in May 2019, Zubiri said he was concerned by Duterte’s reluctance to take the heat off them by spending his own political capital to sell the package to voters.

Broadening the tax base demonstrated “great fiscal responsibility”, Zubiri said, but it was terrible politically. “You want to touch it with a 10-foot pole.”

“It’s not a surprise that they’re running into some kind of trouble,” said Gareth Leather, senior economist at Capital Economics Ltd. in London. “It’s always the case that tax rises are never going to be popular, especially if you nominated and recorded in Hong Kong dollars, they will side bet as if that play had been in US dollars,” according to a Global Market Advisors report published in August. “The agent assumes the operational risk or expense of the house in case the player wins, and collects the money in case he or she loses.”

Phone betting isn’t the only way the Philippines is trying to attract longdistance gamblers. The regulator issued 35 licenses for online betting operations restricted to foreigners outside the country, Andrea Domingo, chairman and CEO of Pagcor, told a Senate hearing in February. The government expects to “make a lot of money” from these licenses, Domingo said. After taking office last June, President Duterte launched a campaign against operators of illegal online gambling to deter Filipinos from betting.

In the past China’s long-distance VIPs would have placed their bets closer to home, in Macau. Now that proxy betting is illegal in the world’s largest casino hub, the Philippines has become the new destination, according to Alex Poon, an analyst in Hong Kong with Stanley. “Proxy betting keeps gaining popularity after Macau’s ban of phone usage,” he said.

The Okada Manila, a $2.4-billion new resort that opened in late March, finds the Macau ban beneficial, as it “gives us additional opportunities”, Steve Wolstenholme, managing director of the casino resort’s operator, said in an interview.

“We diligently adhere to nationally and internationally established practices to ensure that we meet or exceed the required financial monitoring practices in all areas of our business,” said the company, which has just started operating a VIP room.

The Philippine government is aware of the money-laundering risk posed by proxy betting, according to Domingo. It approves licenses to proxies who can legally help customers bet by phone, and junket operators also need to get licenses to operate legitimately in the country.

“Our people are there. They are watching. We have our monitors, the closed-circuit TVs,” Domingo said. Players “are being watched 24 hours a day”. Bloomberg News

don’t have the full blown support of the president.”

‘An investment’

While the tax hikes and changes to various business incentives may not be popular with some sectors, Philippine Chamber of Commerce and Industry President George Barcelon said that overall, his members were supporting the package.

“We are in favor of it,” Barcelon said in an interview. “Because if you look at spending as a percentage of GDP both in education, health services and infrastructure, we’re behind other countries. So for us, it’s an investment.”

Barcelon said he was not concerned by potential legislative delays. “It’s a new Congress, and you know how it is,” he said. “They seem to need time to feel each other out.”

More worrying than any legislative delays was the potential for legislative horse-trading to reduce revenue, said Bob Herrera-Lim, managing director for Southeast Asia at Teneo Holdings and a former chief of staff to a Philippine Senate majority leader.

“Dilution of the expected revenues is our bigger concern,” Herrera-Lim said. “As it moves through Congress, we will probably see small cuts here and there to the proposed revenue measures, maybe by reducing the rate on the excise taxes for fuels and automobiles and retaining some of the exemptions from the value-added tax.”

Herrera-Lim said a recent pickup in inflation also meant the new measures were being debated at a less than optimal time, with lawmakers worrying that tax reform may add fuel to the fire.

“Do you want to have this taxreform agenda, or do we want to just have a status quo?” Zubiri said.

“We’re achieving 6.9 percent growth rate right now with what we have, so maybe it’s not necessary to rock the boat in terms of tax reforms.”

With Cai Ordinario, Bloomberg News

PHL. . .

Continued from A1

National Economic and Development Authority (Neda) Secretary Ernesto M. Pernia is not daunted by the high expectations.

Pernia said the government can implement policies and programs that can help, but this alone will not be enough to sustain the country’s high growth.

“We always hope because we don’t have control of the economy, it’s just, we’re doing certain things that can have certain impact, but the real engine of the economy is something else,” Pernia said.

Amro, however, was cognizant of the challenges faced by the Philippines, which threatens to cut its economic growth this year and next year. It said growth could be jolted by “global economic shocks”, which could affect remittances and the overall domestic economy.

Any cut in remittances will affect the country, as Philippine economy remains consumption-driven.

Other threats include slower export performance and the ill effects of extreme weather conditions. This will affect the country’s ability to produce food, and thus, cause food prices to spike.

Poor Filipino families are very sensitive to this, because 70 percent of their household consumption is focused on food. Meanwhile the Asean+3 region is expected to grow at 5.2 percent in 2017 with inflation under control, despite the global uncertainty.

Regional emerging markets of Korea, Asean-5—Malaysia, Indonesia, the Philippines, Singapore and Thailand—and Vietnam remain resilient, even as volatility in global financial markets persists, while developing Asean economies of Cambodia, Lao PDR and Myanmar continue to grow and reap benefits from regional integration.

“It is encouraging to see that the Asean+3 region has been resilient going into 2017,” said Hoe Ee Khor, Amro chief economist. “Under the current global environment, the region should prioritize financial stability, while supporting growth with an appropriate policy mix, including targeted macroprudential policy measures and sustained structural reform.”

news@businessmirror.com.ph

The Nation BusinessMirror

Delegation to defend govt rights record in Geneva

A

16-MEMBER delegation left for Geneva, Switzerland, on Thursday morning on a mission to present the state of human rights in the Philippines during the Universal Periodic Review (UPR) scheduled on Monday.

The team, led by Sen. Alan S. Peter Cayetano and Deputy Executive Secretary Menardo I. Guevarra, will present the human rights-based development programs of the Philippines and measures to fulfill its obligations to the eight international treaties ratified in the past years.

The delegation includes representatives of the Presidential Human Rights Commission and the departments of Foreign Affairs, of Justice, of Health, of the Interior and Local Government, of Social Welfare and Development and of Labor and Employment; the Presidential Communications Office (PCO), the Philippine Drug Enforcement Agency (PDEA), the National Police, National Economic and Development Authority (Neda), Armed Forces and the National Commission on Indigenous Peoples.

Cayetano, in a statement, said the UPR would be the perfect opportunity to correct the misconceptions of the international community regarding the alleged human-rights violations of the present administration.

“There are a lot of facts that need to be clarified and put in proper context so our friends in the United Nations and the international community would understand the extent of problems of corruption, illegal drugs, and criminality in the Philippines,” Cayetano said.

“We want to share the overall picture of our human rights-based development programs, especially our gains, priorities in the coming years, as well as the major challenges at hand.”

He also pointed out that the period under review covers five years of the Aquino administration and 10 months of the Duterte administration.

“Human-rights issues were raised by various sectors not just in this administration,” Cayetano said.

The UPR is held every three to four years, and is the platform where states present their human-rights records to the United Nations Human Rights Council.

The last time the Philippines participated in the UPR was in 2012.

Besides the state of human rights in the country, the Philippine delegation will also present the state’s policies on labor, environment and vulnerable sectors, such as women, children, persons with disabilities (PWDs) and the elderly.

Cayetano has reiterated that human rights involve not only the rights of criminals, but also the security of civilians.

“Human security and national security are part of human rights and we will endeavor the whole team to the UN, Europe, US to the whole world that the President is working hard to make each and every Filipino safe for our country,” Cayetano said in a previous Facebook live video.

He pointed out that because illegal drugs affect 3 million to 4 million Filipinos, it would be what he described as “a gross human-rights violation,” if the Duterte administration “would not do anything about it”. PNA

Aguirre orders investigation of NBI agents linked to Ang

By Joel R. San Juan

@jrsanjuan1573

J

USTICE Secretary Vitaliano N. Aguirre II on Thursday said he has ordered the National Bureau of Investigation (NBI) to investigate at least five of its agents supposedly on the payroll of businessman Charlie “Atong” Ang. In an interview with reporters, Aguirre added that the said NBI agents are acting as protectors of Ang, one of the country’s well-known gaming tycoons.

“Totoo iyon. May mga NBI agents na protector ni Ang. Hawak na niya noon pa at up to now, ka-contact niya,” Aguirre said.

He said he already knew the identities of the NBI agents, but refused to disclose their names pending investigation.

“An NBI insider gave me their names,” he said.

Aguirre earlier directed the NBI to conduct an investigation and case buildup “over the accusations of Ang that he and National Security Adviser Hermogenes C. Esperon Jr. are plotting to kill him through the NBI to eliminate the gambling operations of his Meridien Vista Gaming Corp. in a bid to expand the government’s small town lottery [STL]’.

He immediately denied the allegation, branding it as “demolition job against me, in conspiracy with the destabilizers of the Duterte administration.”

Aguirre believes Ang was exacting revenge after he led the raid on Fontana Leisure Park that busted the billion-peso online illegal gambling operation that was being conducted there by his busi-

ness partner and best friend, Jack Lam. Ang’s Meridien, which secured a license to operate within the Cagayan Economic Zone Authority in Santa Ana, Cagayan, has expanded its operations in Isabela, Nueva Ecija, Pangasinan and Bicol.

Meanwhile, Aguirre challenged Ang to file a case against him and other persons who Ang believes are planning to kill him, or seek an investigation so the public would know if he has evidence to support his allegations.

“His only evidence was a telephone call while he was in a cockpit in Cagayan de Oro, which told him that he should leave because someone is out to kill him,” Aguirre said.

“Hindi ko trabaho magpapatay. Ako po mula sa pagkabata, hinubog ng magulang na magkaroon ng takot sa Diyos,” Aguirre added.

Aside from the alleged plot to kill him, Ang also accused the NBI of harassment following the raid on gambling dens in Tuguegarao City, Cagayan, that were operated

by Ang’s Meridien Vista Gaming Corp.

Ang said Aguirre wants him out of the picture because the latter’s brother is applying for permits to operate STL. Aguirre earlier admitted his brother was talking to some local officials to be able to operate STL. However, Aguirre yesterday clarified that his brother has no involvement at all in STL operations.

“Ang kapatid ko ay hindi involved sa application of STL. Tinanong ko kapatid ko kung nag-apply, hindi pala,” he said.

Ex-mayor charged over 5 unreported motorcycles

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HE Ombudsman has found probable cause to charge the former mayor of Dinagat town in Dinagat Islands province, Gwendolyn Ecleo, with three counts of perjury as penalized under Article 183 of the Revised Penal Code.

In a statement, Ombudsman Conchita Carpio-Morales said her investigators found several misrepresentations in Ecleo’s statements of assets, liabilities and net worth (SALN) for the years 2006, 2007 and 2010.

Official records from the Land Transportation Office showed that Ecleo purchased and registered five motorcycles in 2006. None of these

assets, however, were declared in her SALNs, Carpio said.

“Without doubt, respondent asserted a falsehood here when she omitted the foregoing vehicles in her 2006, 2007 and 2010 SALNs with the intent that these statements should be received as truth despite their falsity. To be sure, she is legally bound to file true and detailed SALNs,” she said.

“That her SALNs were prepared by Dinagat’s Human Resource Office personnel does not justify her failure to make true, complete and accurate declarations therein. In fact, this proves that she was consciously ignorant of her SALN’s truthfulness,” she said. Jovee Marie N. dela Cruz

Editor: Dionisio L. Pelayo • Friday, May 5, 2017 A3

Legislator seeks Congress probe into secret police detention cells

A

By Marvyn N. Benaning | Correspondent

SENIOR opposition lawmaker on Thursday asked the House of Representatives to investigate the secret detention cells allegedly maintained by the National Police as part of the so-called war against prohibited drugs.

Liberal Party Rep. Teodoro Baguilat Jr. of Ifugao called for the investigation following the Commission on Human Rights (CHR) discovery of an illegal detention cell at the Raxabago Police Station in Tondo, Manila, on April 27. Policemen allegedly held drug suspects in the secret cell area until they pay P40,000 to P200,000 for their freedom.

“The secret detention cell has been described in news reports and depicted in published photographs as a narrow, windowless room with a lone urinal at one end, and which, at the time of its discovery by the CHR, had its lone entryway blocked by a bookshelf,” Baguilat said.

Following the discovery by the CHR, Metro Manila police commander Director Oscar Albayalde relieved the Raxabago Police Station commander, Supt. Robert Domingo, and the 12-man antidrugs

unit headed by Senior Insp. Edwin Fuggan, in order to pave the way for an impartial investigation into the matter. Baguilat said Albayalde’s relief order is proof that the National Police leadership knew that the maintenance of the hidden detention cells was irregular and deserves to be investigated.

However, Director General Ronald M. dela Rosa, National Police chief, said that “as long as the detainees were not tortured or extorted, it’s okay with me”. Baguilat said the maintenance of secret cells violates Article III Section 12 (2) of the Constitution, which provides that, “[s]ecret detention places, solitary, incommunicado, or other similar forms of detention are prohibited”.

Baguilat also said Republic Act 9745, otherwise known as the Anti-Torture Act of 2009, provides in part that “secret detention places, solitary confine-

ment, incommunicado or other similar forms of detention, where torture may be carried out with impunity, are hereby prohibited”.

“The conflicting statements of the police leadership, especially the statements of Director General dela Rosa, indicate either an ignorance of, or disrespect for, the law, both of which are inexcusable for the chief protector of the Filipino people,” Baguilat’s resolution said.

He said the investigation is aimed at looking into secret detention cells and the state of detention areas in police stations. “There is still the presumption of innocence and suspects are still guaranteed inalienable rights, including the right against torture or arbitrary detention,” Baguilat added.

Group hits National Police for defending secret cells

THE human-rights watchdog Karapatan has condemned the National Police “for initially criticizing the existence of secret jails in Tondo, Manila, only to make an about-face later and claim that there was nothing wrong with them”.

In a statement, Karapatan said: “Despite the anti-torture and anti-enforced disappearance laws, illegal arrest, torture and detention continue, as exemplified in the recent discovery of a secret police detention cell in Tondo, with unlisted detainees, in line with the war on drugs,” Karapatan SecretaryGeneral Cristina Palabay said.

Economy

A4 Friday, May 5, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Cusi: ERC to fulfill mandate despite Salazar’s suspension

T

By Lenie Lectura

@llectura

HE Department of Energy (DOE) assured on Thursday that the regulatory body of the power sector would continue to function and adhere to its mandate, amid the suspension order against the chairman of the Energy Regulatory Commission (ERC).

The ERC, meanwhile, acknowledged the receipt of a copy of the suspension order against Salazar, and confirmed that the commissioners have nominated an officer in charge (OIC). “We confirm the receipt of the preventive suspension [from Malacañang] order early this morning,” ERC Spokesman Atty. Rexie Digal said. “The commission held a special commission meeting today, and they [the commissioners have] agreed to nominate Commissioner Alfredo Non as OIC. The nomination will be forwarded to the Office of the Executive Secretary on Thursday for consideration and appropriate action,” she said.

“The ERC is strong. It will run.

What we are planning to do is to have regular meetings with regard to updating the status of work and how we can assist the ERC,” Energy

Undersecretary William Felix William B. Fuentebella said.

Malacañang announced late on Wednesday that it has placed ERC Commissioner Jose Vicente B. Salazar under a 90-day preventive suspension effective immediately.

Salazar, who is facing administrative charges, expressed concern with regard to the order that was issued by the Office of the Executive Secretary.

“While I view the said order with some concern, still, I am grateful for the opportunity to take a breather from work. I shall use the time to be with my family and to attend to my personal concerns,” he said in a text message.

Salazar is facing charges of serious dishonesty, gross neglect of duty, grave misconduct and gross insubordination, among various administrative offenses. He was also

linked to the death of ERC Director Francisco Villa, who took his own life last November 9. Suicide notes written three months ago indicate that he could no longer handle the pressure from Salazar.

“My greatest fear in the bids and awards committee is the AVP [audio-visual presentation] by Luis Morelos, which the chairman and CEO, Jose Vicente B. Salazar, chose through a rigged selection system.

That will be a criminal act,” Villa stated in his letters.

But the suspension stemmed from the complaint against Salazar last month of deceiving Malacañang in filing his travel authority and designating somebody without proper authority as OIC while he was abroad.

Salazar was given 10 days to file his comment or written explanation with regard to the administrative charges. If proven guilty of the charges, Salazar can be removed from office.

Energy Secretary Alfonso G. Cusi said the preventive suspension is yet another example that

there are no “sacred cows” in the Duterte administration.

While preventive in nature and not yet a penalty, the suspension of Salazar should pave the way for an impartial and objective investigation of corruption allegations raised against him, Cusi said.

“As the President has said, tablatabla tayo when it comes to dealing with corruption allegations. Allergic ang Pangulo sa kurapsyon, so it’s not enough not to be tainted—one must also be perceived to be clean,” Cusi said. Nonetheless, he added, any and all investigations are also avenues for the accused to clear their names.

Cusi said the rule of law must always prevail, and gave special mention to the equal protection of the law clause of the Constitution when it comes to facing criminal, civil or administrative charges.

“I expect fair treatment of all officers and workers in the government,” Cusi said. “The suspension is a means to give way to a fair investigation of the issues being thrown at Chairman Salazar. ”

The ERC is strong. It will run.

What we are planning to do is to have regular meetings with regard to updating the status of work and how we can assist the ERC.”

—Fuentebella

Two new rice varieties to cut farmers’ yield loss–PhilRice

PHL abaca export jumped 13.5% to $130.44M in 2016

By Jasper Emmanuel Y. Arcalas @jearcalas

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he cou nt r y ’s ea r n i ngs f rom outbound ship ments of abaca in 2016 rose 13.5 percent to $130.44 million, from $114.792 million in 2015, data from the Philippine Fiber Development Authority (PhilFida) showed.

Abaca-fiber exports from January to December 2016 reached 13,724.75 metric tons (MT), data further showed, which is 14.3 percent higher than the 12,009.87 MT recorded in 2015.

The UK remained the top buyer of Philippine abaca-fiber, accounting for nearly half, or 6,55.87 MT of the total purchases.

The Philippines’s total revenue from abaca-fiber exports in 2016 reached $25.781 million, 33.9 percent higher than the $19.26 million recorded in 2015.

The Philippines also shipped out 21,635.323 MT of abaca pulp i n t he Ja nu a r y-to -December 2016 period, 2.5 percent lower than the 22,199.908 MT exported in 2015.

Despite the slight decrease in exported volume, the country earned 11.4 percent more from outbound shipments of abacapulp last year. The Philippines’s revenue from abaca pulp exports in 2016 reached $88.472 million,

revenue from the product. The Philippines earned $7.643 million from outbound shipments of abaca cordage compared to the $11.436 million recorded revenue in 2015.

PhilFida Planning Division Chief Ramon M. Branzuela attributed the hike in abaca exports to the growing demand for the raw material in the international market, due to its quality.

“In line with the world’s growing interest for biodegradable products and forest conservation, abaca, with its natural and superior material, offers a lot of potential for industrial utilization,” Branzuela told the BusinessMirror.

“Abaca fiber is being utilized for the production of pulp for specialty papers and other nonwoven product applications. It is also being used for the manufacture of cordage, fabrics and fiber craft,” Branzuela added.

The Philippines, he said, supplied more than three quarters, or 87.17 percent, of the world’s abaca fiber requirement in 2015. Ecuador was second-top supplier of Manila hemp in 2015, with an exprot share of 12.77 percent, while Costa Rica supplied the rest.

“As the demand for abaca fibers grow, there is a need to increase its production to cater to the needs of the local and international markets,” Branzuela said.

In line with the world’s growing interest for biodegradable products and forest conservation, abaca, with its natural and superior material, offers a lot of potential for industrial utilization.”—Branzuela compared to the $79.437 million earned in 2015.

The UK bought the most abaca pulp from the Philippines last year, accounting for 37.3 percent of the total purchases. The Philippines’s export of abaca pulp to the European country jumped more than a quarter to 8,060.11 MT, from 6,385.42 MT in 2015.

However, export volume of abaca cordage in 2016 declined by 34.1 percent to 2,937.2 MT, from 4,458.3 MT recorded in 2015.

The decline in volume exported resulted in a 33.2-percent cut in

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he Philippine Rice Research Institute (PhilRice) said it is has successfully bred two new pest-resistant rice hybrid varieties that could increase farmer’s income by reducing their yield loss.

PhilRice, an attached agency of the Department of Agriculture, said it has bred two rice hybrid lines have shown outstanding yield and resistance to bacterial leaf blight (BLB) disease.

“Most of the previously released hybrid rice varieties lack sufficient resistance to bacterial leaf blight, one of the common rice-plant diseases that can cause a yield loss of 70 percent,” PhilRice Hybrid Project Leader Joanne D. Caguiat said in a recent news statement.

T he f irst hybr id line ca l led PR40640H, which was an improved version of the Mestiso 3 (M3), was incorporated with Xa21, a gene that exhibits resistance to BLB, according to PhilRice.

“Based on the evaluation, this hybrid is resistant to most BLB isolates in the country compared with M3,” the attached agency of the DA said.

Meanwhile, the other hybrid line, which was called PR47216H, exhibited an average yield of 9.6 metric tons (MT) per hectare, 5.6 mt/hectare more than the national average yield of 4 mt/hectare, according to PhilRice, adding that the yield performance shown by PR47216H was 22.24 percent and 31.06 percent higher compared with Mestiso 19 and PSB Rc82, respectively.

“PR40640H will soon be submitted to the National Cooperative Test [NCT], while PR47216H is currently being tested for multilocation trials.

NCT evaluates rice lines in terms of yield, pest and disease resistance, and grain quality across locations,” PhilRice said. Jasper Emmanuel Y. Arcalas

news@businessmirror.com.ph

Data from the attached agency of the Department of Agriculture also showed that the country’s abaca-fiber production in the first quarter of 2017 grew 4.2 percent to 16,261.28 MT, from 15,600.49 MT recorded output same time period last year.

Bicol region remained the topproducing region in the country with a 7,072.25-MT output in the January-to-March 2017 period. The region’s output in the first quarter of the year was 15.9 percent higher than the 6,103 MT produced same time period in 2015.

DOT urged to promote ‘responsible tourism’

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Infra congress Senate President Aquilino L. Pimentel III (third from left) leads the ribbon-cutting ceremony during the opening of the Infrastructure Congress and Expo Philippines on Wednesday at the World Trade Center in Pasay City. Also in photo are Ricky Ocampo (left); Rafael Dizon III, chairman, PepTarsus Corp. (second from left); Joel Pascual (third from right); Randy Manaloto (second from right); Lester Suntay (right); and an other official. PNA/Avito C. Dalan

BOI okays two hotel development projects in Siquijor and Tagaytay

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he Board of Investments (BOI) has approved two hotel development projects with a combined value of P90 million. The BOI said the projects may qualify for BOI incentives, since both will be built outside of Metro Manila.

In a news statement released on Thursday, the investments promotion agency said the Casa Coco Hotel project by Altipeak Land Development Inc. and the Eco Container Hotel of Ecohotels

Inc. have qualified as tourist accommodation facilities under the Investment Priorities Plan.

The 30-room Casa Coco Hotel to be constructed in the Siquijor Island has a project cost of P62.4 million, and is eligible to fiscal perks, such as an income-tax holiday of up to six years and additional deduction from taxable income.

The P29.1-million Eco Container Hotel in Tagaytay, meanwhile, has applied for registration, citing the “unique” materials it had used,

such as cargo containers made of corten steel, among others, to build the hotel. A number of eco-friendly features, such as solar panels, water recycling, energy-saving lights and upcycled materials, will also be installed once in operation.

Casa Coco Hotel is expected to start its commercial operations in April 2017 with 36 personnel manning the facility, while the 33room Eco Container Hotel starts in April 2017 with 25 personnel.

Catherine N. Pillas

he Department of Tourism (DOT) and its attached agencies should not only be concerned with the promotion of the country’s tourist spots but also their protection.”

Sen. Nancy Binay made this remark on Thursday following reports of complaints from residents and environmental advocates about garbage left behind by tourists in the country’s 24/7 island, Boracay.

Binay, chairman of the Senate Committee on Tourism, urged the agency to step up in its efforts to care for natural attractions through a campaign that will teach tourists about the values of caring for the environment.

She said it is within the DOT’s mandate to preserve natural attractions and take appropriate actions to stop the destruction of the environment and its negative impacts on communities.

In addition, she said an information drive could also encourage tourists to take a second look at the exploitative impact of megaevents on tourist destinations such as Boracay.

“Commercialization of nature,

coupled with unethical practices and irresponsible tourism, is an ingredient to ‘ecocide’, which have an exploitative impact on the environment and communities,” Binay said in a news statement.

“We know that tourism campaigns work because hyped up and greatly commercialized events have managed to draw in thousands to these shores. But this time, I hope that we can work together in calling for the promotion of responsible tourism,” she added.

The senator added that the DOT should convince organizers and tourists to be responsible for their actions and comply with the conditions set by local government units.

She cautioned that, without intervention, the same could happen to other destinations in the country that have recently been cited in international travel publications citing Puerto Galera and Baguio City’s trash problems.

The DOT, for its part, vowed to continue to coordinate with the Department of Environment and Natural Resources to assure that the country’s natural attractions remain preserved and protected. PNA

The Regions BusinessMirror

news@businessmirror.com.ph

Editor: Efleda P. Campos • Friday, May 5, 2017

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PAL, CEB to mount more flights from provincial airports

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By Recto Mercene

@rectomercene

HE country’s two biggest air carriers announced on Thursday the mounting of new flights, both domestic and international, from provincial airports, an indication of the robust growth of the local airline industry, propelled by the equally robust growth of tourism and the expansion of airport infrastructure during the last few years.

Cebu Pacific (CEB), the country’s leading low-cost carrier, said it began its flight operations out of the Puerto Princesa International Airport on May 4, utilizing a new and wider runway that can handle wide-bodied aircraft.

The Antonio Bautista Airport also has a new terminal building that can accommodate over 1,000 passengers.

“The new international airport is expected to boost tourism in the world-class island that is Palawan,” Civil Aviation Authority of the Philippines Director General Jim Sydiongco said.

To date, Cebu Pacific is the largest carrier operating out of Puerto Princesa. It has a total of 550 flights to and from the capital of Palawan weekly via three of its major hubs: Manila, Cebu and Iloilo. In 2016 CEB flew the most number of passengers to and from Puerto Princesa, garnering over 50 percent of the total market share.

“CEB will be increasing the capacity of its flights to and from Puerto Princesa, upgrading from the 180-seater Airbus A320 to the Airbus A321neos with a 230-seating capacity,” said lawyer JR Mantaring, CEB Vice President for Corporate Affairs.

“With the new airport able to handle international flights, it now makes Puerto Princesa attractive

for direct connections to and from key foreign tourist markets. By offering more seats, CEB will be able to provide even lower fares, allowing more Juans to see the beauty of Palawan,” he said.

Aside from Manila, Cebu and Iloilo, CEB also operates flights out of three strategically placed hubs in the Philippines: Clark, Davao and Kalibo. The airline’s extensive network covers over 100 routes and 66 destinations, spanning Asia, Australia, the Middle East and the United States.

Cebu Air Inc. now claims being the largest carrier in the Philippine air-transportation industry, offering its low-cost services to more destinations and routes with higher flight frequency within the Philippines than any other airline.

The airline’s 59-strong fleet is comprised of four Airbus A319, 36 Airbus A320, seven Airbus A330, eight ATR 72-500 aircraft and four ATR 72-600. Between 2017 and 2021, CEB expects delivery of one more brand-new Airbus A330, 32 Airbus A321neo and 12 ATR 72-600 aircraft.

Meanwhile, starting June this year, legacy carrier Philippine Airlines (PAL) will mount direct flights from Tagbilaran to Incheon and Clark, as part of the flag carrier’s continuing route expansion. PAL’s direct Tagbilaran-Incheon and Tag-

bilaran-Clark flights allow travelers to reach their destination conveniently with no stopover in Manila.

Starting June 22, Tagbilaran will become the sixth local city to be linked to an international destination when PAL mounts chartered service to Incheon in South Korea.

PAL currently operates international flights out of Manila, Cebu, Clark, Kalibo and Puerto Princesa.

The new service to Incheon departs Tagbilran at 5:20 p.m. daily, arriving at South Korea six hours later.

The Tagbilaran-Clark flights, which will start on June 23, provide tourists with direct access to Central Luzon and Central Visayas, without having to endure Metro Manila’s traffic.

The Tagbilaran-Clark f light leaves Tagbilaran daily at 6:40 a.m.

On the first quarter of 2018, PAL expects the delivery of six newly acquired A350-900 aircraft, with option for another six.

The A350-900, which will have a three-class configuration (Business Class, Premium Economy and Regular Economy), is capable of flying nonstop from Manila to New York on a full load.

PAL plans to deploy the A350 XWB (extra-wide body), which seats more than 300, on new routes to North America and Europe.

The new airplanes are part of PAL’s plan to become a five-star airline in five years, with service innovations, route network expansion and fleet modernization as its flagship initiatives, guided by a new brand philosophy—“Heart of the Filipino.”

PAL COO Jaime J. Bautista said: “The country’s national flag carrier aims to continue its legacy of service to the nation and the rest of the world, leveraging on the strengths of the brand. We take pride in the fact that PAL is the only Filipino legacy carrier offering the distinct brand of service marked by heartfelt warmth and hospitality. We take pride in the overall safety and service competence of the team.”

“Our goal is to make PAL the airline of choice in all the markets we serve, one that exceeds passenger expectation. We want PAL to be a source of pride for Filipinos,” he said.

Case delays Cansaga Bay devt in Cebu

By Charles R. Pepito Correspondent

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HE arbitration case the city of Mandaue is now facing has entangled the reclamation project in the Cansaga Bay area.

The area’s infrastructure development is being identified in the city’s three-year development road map.

Mayor Gabriel Luis Quisumbing said the whole area has “significant entanglements” that began with the award of the first contract due to several issues that occurred during the last term of then-Mayor and now Sixth District Rep. Jonas Cortes.

“The status now is the city is currently under arbitration, because the original partners filed an arbitration case against the city.

In effect, all development in that particular area is on hold for the time being, until the legal process is given way,” Quisumbing said during the 888 News Forum at Marco Polo Plaza.

Among the projects identified in the city’s executive-legislative agenda was the construction of the coastal-road development and the joint-venture project that involves the reclamation project of 131 hectares of foreshore and submerged lands in Cansaga Bay, from Barangay Paknaan to the area near the Marcelo B. Fernan Bridge.

The city government and the Mandaue Land Consortium had executed a contract of reclamation on March 29, 2001, but the latter reportedly did not implement the project until it lapsed after more than 10 years.

This prompted the City Legal Office to recommend to Cortes on January 6, 2012, to enter into a new contract with another entity in accordance with existing laws, rules and regulations.

The city council on December 18, 2013, had approved and authorized Cortes to sign the proposed joint-venture agreement in favor of Sultan 900 for the development, financing, engineering and design, reclamation and development of foreshore and submerged lands from the area adjacent to the Marcelo Fernan Bridge, northward to the boundary of Consolacion.

Globalport 900 Inc., through holding firm Sultan 900, was reportedly investing P9 billion to put up a global city in Mandaue that would include a port complex, a mixed-use residential and commercial center, as well as a casino and entertainment complex.

Party-list Rep. Michael Romero of 1-Pacman, chairman of Globalport, earlier said they intend to develop Cebu side by side with the ongoing P14.5-billion expansion of the Manila North Harbor facility,

spanning 56 hectares.

Meanwhile, Quisumbing said they already put together the Reclamation Coordination Committee to identify the issues, such as the share of the City in the 50-hectare reclamation project in Barangay Labogon, that has reportedly been left idle since it was undertaken in the early 1990s.

The committee is headed by City Administrator Danilo Almendras.

Earlier, Malacañang has asked the Mandaue City government to trace back the documents of the said reclamation project, following the report of Dr. Danilo Dionson, son of late city Councilor Magno Dionson, that of the reclaimed area of 236,916 square meters, only the city abattoir stands as the government facility, while there are other buildings, landings and repair facilities therein.

Labogon Barangay Captain Renato Suson, in his letter dated December 23, 2016, addressed to Dionson, reported that private facilities have been occupying the reclamation project, which include the Unified Global Shipping Corp., AYL Trading, Unilink Shipping Corp., Liquid Packaging Corp., Golden Dragon Fast Craft Builders, Golden Bridge Shipping, VBL Food Chain Inc., ETA Shipping Lines, Jomalia Shipping Corp. and Socor Construction Corp.

Eastern Visayas posted 12.4% economic growth in 2016

By Elmer V. Recuerdo Correspondent

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ACLOBAN CIT Y—Eastern Visayas posted the fastest economic growth among the country’s provinces at 12.4 percent last year. The growth is higher than the 4.6-percent growth rate recorded in the previous year and the first-ever double-digit growth of the region.

Fueled by the expansion in construction and manufacturing subsectors, the region topped the country in terms of gross regional development product (GRDP) growth.

“This gain cements the foundation of our growth trajectory in the coming years,” said Bonifacio Uy, regional director of the National Economic and Development Authority. “If sustained, there is a strong likelihood in surpassing the shortterm median growth target of 5.45 percent in 2017.”

Uy said the bullish scenario was a result of flourishing economic activities on the back of high domestic demand, strong business confidence, public and private investments, and post-Yolanda rehabilitation and reconstruction activities.

Industry accounted for the largest share in the region’s economy at 44.3

percent, followed by the service sector at 40.6 percent, and agriculture, hunting, forestry and fishing (AHFF).

Industry expanded with a faster growth of 20.2 percent as compared with the 4.9 percent in 2015. Construction, which had a 13.5 percent share to the region’s economy, recorded the fastest growth at 44.5 percent.

“The construction subsector peaked to a 44.5-percent growth due to intensified implementation of public-construction projects, such as road-widening and flood-control projects, among others, on top of the remaining post-Yolanda reconstruction projects,” Uy said.

Manufacturing, which accounted for 18.4 percent, rebounded from a 3-percent contraction in 2015 to a 19.6-percent growth in 2016. Meanwhile, mining and quarrying and electricity, gas and water supply grew at a slower pace of 3.2 percent and 2.1 percent, respectively.

Uy said the growth in manufacturing output was mainly propelled by the resumption in regular operations of the heavy industries in the region’s manufacturing-economic zones.

Services posted an accelerated growth of 8.6 percent compared with the 7.9-percent rate the previous year.

The major contributors to services

were other services and transport, storage and communication, which grew by 11 percent and 9.2 percent, respectively.

Financial intermediation (FI), real estate, renting and business activities, and public administration and defense posted faster growth of 11.1 percent, 6.1 percent and 6.3 percent, respectively.

Trade grew at a slower pace of 5.4 percent in 2016, from 7.2 percent the previous year.

AHFF rebounded from a contraction of 3.5 percent in 2015 to 2.4 percent in 2016. Agriculture and forestry, which shared 11.9 percent, to the regional economy, grew by 1.9 percent, while fishing improved by 4.3 percent.

Of the 12.4-percent growth in 2016, industry contributed the largest to the region’s growth at 8.4 percentage points. Services accounted for the 3.6 percentage points, while AHFF contributed 0.4 percentage point. Among the subsectors, construction and manufacturing contributed 4.7 percentage points and 3.4 percentage points, respectively.

The region’s GRDP stood at P172.1 billion in 2016. Per-capita GRDP increased by 10.3 percent, from P33,771 in 2015 to P37,261 in 2016.

SMDC to build affordable houses in Mabalacat City

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LARK FREEPORT—Some 3,000 affordable housing units in a gated community complete with full amenities, including an SM mall and a park, will soon rise in Barangay Bundagul here.

SM Development Corp. (SMDC) sales director Noel M. Roldan said the SM Mall Lifestyle of condominiums, including a perimeter-garden landscape, multi-purpose hall, sports amenities and swimming pool, will be provided.

“This quality of life is assured for future homeowners not provided by other devel-

opers,” Roldan told members of the Capampangan in Media Inc. (CAMI) in last Friday’s “Balitaan” media forum organized in cooperation with the Clark Development Corp.

(CDC) at the Bale Balita (House of News) here.

He said a school in the community is in the future plans of the 29.1-hectare subdivision (25-hectare residential area and 4.1-hectare commercial area where 2 hectares will be made into an SM mall).

A transport hub or terminal will also be constructed in the area adjacent to the Bundagul Barangay Hall and Trust

International Paper Corp. (TIPCO).

Roldan said the project will break ground next month. Phase 1 of the socialized housing project will be completed in 24 months for 774 housing units. The smallest lot area is measured at 37 square meters for inner units, with the biggest at 79 square meters lot area for end units, Roldan said.

The floor area for the middle units is 22 square meters while the biggest has a 37-square meter floor area. The deliverable will only be for a first-floor unit, he said. Ashley Manabat

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

Health bill headed to vote after amendment wins over holdouts

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ASHINGTON—House Republican leaders planned to hold a showdown vote on Thursday on their bill to repeal and replace large portions of the Affordable Care Act (ACA) after adding $8 billion to the measure to help cover insurance costs for people with preexisting conditions.

$8B The amount the House Republicans are adding to the bill that would replace large portions of the Affordable Care Act

“We have enough votes,” Rep. Kevin McCarthy of California, the House majority leader, said on Wednesday night. “It’ll pass.”

A breakthrough came earlier on Wednesday after an amendment, proposed by Rep. Fred Upton of Michigan, with the support of Rep. Billy Long of Missouri, to add the money to the bill.

The two Republican lawmakers had come out against the healthcare legislation, warning that it did not do enough to protect the sick, but they threw their support behind it on Wednesday.

President Donald J. Trump blessed Upton’s proposal at a White House meeting with the two lawmakers as he pressed hard for a vote that could at least ensure House approval of the bill, which embodies one of his central campaign promises.

The vote on Thursday will carry enormous potential consequences, for millions of patients, for Trump’s legislative agenda and for Speaker Paul D. Ryan, who has failed twice in recent weeks to bring the bill to the House floor.

The measure faces a wall of opposition from health-care providers, disease advocates and retirees, and has been derided by many Senate Republicans who are all but certain to reject vast portions of it should it clear the House.

But clearing the House is a necessary step to keep alive the Republican promise—seven years in the making—to dismantle President Barack Obama’s signature domestic achievement.

Upton predicted that the bill was “likely” to pass the House, a tremendous reversal of momentum for a measure that has twice been pulled back from a vote for lack of support.

Their announcement gave a big lift to Ryan and other Republican leaders who are trying to round up enough votes to push the bill through the House this week.

“We’ve got some momentum,” Ryan told a Wisconsin radio station on Wednesday morning.

Democrats and health-care groups, once confident of another collapse, tried to slow that momentum. The liberal healthadvocacy group Families USA said another $8 billion would do little to improve the “ highrisk pools” that could be set up by states to provide coverage to people with preexisting medical conditions who could not find affordable insurance in the open market.

The American Medical Association and 10 organizations representing patients, including the American Heart Association and the advocacy arm of the American Cancer Society, reiterated their opposition to the House Republican bill on Wednesday, as did the retirees’ lobby AARP. “None of the legislative tweaks under consideration changes the serious harm to patients and the health-care delivery system” that the bill would cause, said Dr. Andrew W. Gurman, the president of the American Medical Association. The latest changes, he said, “tinker at the edges without remedying the fundamental failing of the bill—that millions of Americans will lose their health insurance as a direct result of this proposal”.

Sen. Chuck Schumer of New York, the Democratic leader, also criticized the latest version of the legislation.

“The proposed Upton amendm e nt i s l i k e a d m i n i s t e r i n g cough medicine to someone with stage four cancer,” he said in a st atement. “ T his Republ ica n

amendment leaves Americans with preexisting conditions as vulnerable as they were before under this bill.”

If House Republicans can pass the bill, it would be a moment of redemption for both Ryan and Trump, who suffered a resounding political defeat in March when they failed to muster the votes to win approval of an earlier version.

The ACA generally requires insurers to accept all applicants and prohibits them from charging higher premiums because of a person’s medical condition.

Conservatives argue that this and other requirements of the 2010 health law drive up insurance costs. The House Republican bill to roll back the ACA generally requires insurers to charge higher premiums for one year to people who allow their coverage to lapse.

At the insistence of conservative lawmakers, House Republican leaders agreed to let states apply for waivers allowing insurers to charge higher rates based on a person’s “health status”.

The original version of the Republican repeal bill would have established a $100-billion fund that states could use to help people pay for health care and insurance from 2018 to 2026. House leaders added $15 billion last month to help insurers pay claims for their sickest customers. Upton’s proposal would provide $8 billion over five years on top of that.

How far that $8 billion would go in providing coverage for people with preexisting conditions is not clear. Upton’s proposal does not specify who would be eligible, how much of their costs would be covered or how much they would be expected to contribute in premiums.

How many states would seek waivers is difficult to predict.

New York Times News Service

Facebook will hire more screeners

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AN FRANCISCO—As a business, Facebook is more successful than ever. On Wednesday afternoon it reported another quarter of huge growth, with nearly 2 billion people actively using the service and revenue up 49 percent in the first quarter compared with a year ago.

But with the company’s vast reach has come another kind of problem: Facebook is becoming too big for its computer algorithms and relatively small team of employees and contractors to manage the trillions of posts on its social network.

Earlier on Wednesday Mark Zuckerberg, the company’s chief executive, acknowledged the problem. On a Facebook post, he said over the next year, the company would add 3,000 people to the team that polices the site for inappropriate or offensive content, especially in the live videos the company is encouraging users to broadcast.

“If we’re going to build a safe community, we need to respond quickly,” he wrote. “We’re working to make these videos easier to report so we can take the right action sooner—whether that’s responding quickly when someone needs help or taking a post down.” He offered no details on what would change.

The announcement comes after Facebook Live, the company’s popular videostreaming service, was used to broadcast a series of horrible acts to viewers, including a man boasting about his apparently random killing of a Cleveland man and the murder of an infant in Thailand.

More broadly, the company has been criticized for doing a poor job weeding out content that violates its rules, including the sharing of nude photographs of female Marines without their consent and illegal gun sales. Facebook is also grappling with the limitations of its automated algorithms on other fronts, from the prevalence of fake news on the service to a News Feed that tends to show people information that reinforces their views rather than challenges them.

Despite Zuckerberg’s pledge to do a better job in screening content, many Facebook users did not seem to believe that much would change. Hundreds of commenters on Zuckerberg’s post related personal experiences of reporting inappropriate content to Facebook that the company declined to remove.

Most of the company’s reviewers are low-paid contractors overseas who spend on average of just a few seconds on each post. A National Public Radio investigation last year found that they inconsistently apply Facebook’s standards, echoing previous research by other outlets.

New York Times News Service

Apple announces $1-B fund to create US jobs

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AN FRANCISCO — While on the campaign trail last year, Donald J. Trump lamented the loss of manufacturing jobs in the US and set his sights on companies like Apple to help rectify the situation.

“I’m going to get Apple to start making their computers and their iPhones on our land, not in China,” he said.

On Wednesday Apple appeared to meet Trump halfway.

W hile it did not announce a new manufacturing facility with thousands of manufacturing jobs, Apple, the world’s most valuable public company, said it planned to dedicate resources to American job creation with a $1-billion fund to invest in advanced manufacturing in the US. The company said it would announce the first investment from its new fund later this month.

The fund “can be the ripple in the pond”, Timothy D. Cook, Apple’s chief executive, said during an interview with CNBC in which he announced the new fund. “Those manufacturing jobs create more jobs around them because you have a service industry that builds up around them.”

In introducing the fund, Apple joined a growing list of companies that have said in recent months that they will add, promote or keep jobs—many of them related to manufacturing—in the US. Carrier, a furnace maker that had been excoriated by Trump for potentially outsourcing jobs to Mexico, decided to keep 800 of 1,400 jobs in Indianapolis. SoftBank, a Japanese company that

has invested in many businesses worldwide, told Trump it would use a $100-billion technology fund to create 50,000 American jobs.

This week Infosys, a tech outsourcing company based in India, said it would hire up to 10,000 American workers.

Some critics have suggested the Trump administration is too focused on manufacturing, as opposed to more quickly cultivating service occupations—in the leisure and hospitality or health-care industries, for instance.

But for the roughly two-thirds of Americans who lack a four-year college degree, manufacturing remains one of the few sectors that can deliver a middle-class income.

According to the Bureau of Labor Statistics, the typical factory worker earns more than $26 an hour, compared with $14 an hour for the average hotel and food services employee.

Even if more manufacturing jobs are created, however, there may be too few Americans with manufacturing skills to fill them.

LinkedIn’s most recent monthly report on employment trends found there were not enough people with manufacturing skills in areas, like New York City, Los Angeles and Denver, which lack the industrial bases found in cities, like Cleveland and Detroit.

Many high-school graduates avoided going into the sector in recent decades as it shed jobs, creating a labor shortage as older workers retire.

Apple’s focus with its new fund is on a slice of the industry known as advanced manufacturing. That

is a catchall term, but typically it involves the production of highvalue-added products in sectors like technology, aerospace, automobiles, sustainable energy and medical equipment.

In some cases, that means making much smaller batches than mass-production-oriented assembly lines churn out, or using robotics and 3D printing to create bespoke items.

Cook’s announcement of the new fund came midway through his interview with Jim Cramer of CNBC, when he was asked what he was doing to create jobs. Cook answered that Apple gave back in job creation and that the company had asked itself, “How can we get more people to do advanced manufacturing in the United States?”

Cook did not address whether the fund was influenced by Trump’s policies and statements on manufacturing. Asked by Cramer about working with the president, Cook said there were always issues to agree on and disagree on with any administration in any country. But “you look to find common ground and try to influence the things you don’t”, he said.

Cook added that Apple would announce initiatives to support its current employees and add to their ranks, and to aid the software developers who make apps for Apple’s phones, watches and computers.

Apple, which reported its quarterly earnings on Tuesday, had $257 billion in cash and marketable securities on its balance sheet as of April 1, so a $1-billion fund is relatively paltry for the company.

New York Times News Service

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China’s econ shows positive 2018 growth–Rio Tinto CEO

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French presidential election candidate for the far-right Front National party Marine Le Pen and French presidential election candidate for the En Marche! movement Emmanuel Macron pose prior to the start of a live broadcast face-to-face televised debate in La Plaine-Saint-Denis, north of Paris, France, on May 3 as part of the second-round election campaign. The face-off is their only direct debate before Sunday’s presidential runoff election. Eric Feferberg/Pool Photo via AP

Le Pen, Macron clash in vicious presidential debate in France

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ARIS—He said she was telling lies. She called him arrogant.

He accused her of repeating “stupidities”. She cut him off and told him not to lecture her. He shook his head sadly and she laughed sarcastically.

The debate on Wednesday night between France’s two presidential candidates, Marine Le Pen of the far-right National Front and the centrist former Economy Minister Emmanuel Macron, was more like an angry American-style television shout fest than the reasoned discussion of issues the French have become accustomed to.

It was a study in violent verbal combat: The two talked angrily over each other, cut each other off, shook fists and pointed fingers, leaving the moderators bewildered and helpless.

But it was also a stark demonstration of two radically different visions of France that voters will have to choose between on Sunday in the election’s final round.

Macron, 39, the former banker and cool technocrat, educated at France’s finest schools and the beneficiary of a meteoric rise, faced off against Le Pen, 48, the scion of one of the country’s most notorious political families, the inheritor of a far-right party who has tried to move it toward the center.

The two candidates did not hide their disdain for each other, and their total divergence on all the issues—Europe, terrorism, France’s stagnant economy, Russia—explained why.

“The high priestess of fear is sitting in front of me,” Macron said derisively, having cast his opponent as a dangerous extremist with deep ties to her party’s dark past.

He made a point of repeating her name, to remind viewers of her parental filiation: her father, Jean-Marie Le Pen, founded the National Front and is associated

20

The number of points Emmanuel Macron leads over Marine Le Pen, making him likely to win on Sunday’s runoff election

with its historical posture of antiSemitism, Holocaust denial and stigmatization of immigrants.

“You are the France of submission,” Marine Le Pen said with scorn; Macron was merely a heartless banker, in her view. “We’ve seen the choice you’ve made, the cynical choices, that reveal the coldness of the investment banker you have never ceased being.”

He leads her by 20 points in polls and is considered likely to win on Sunday.

The debate is expected to move some voters, but not enough to make up for Le Pen’s substantial polling deficit. She has seen some slight improvement in recent polls and was clearly hoping to destabilize her younger opponent as she did in the first-round debates, when other candidates were present.

With nothing to lose and everything to gain, she went for direct frontal attacks.

But Macron generally kept his cool, laying out his program point by point through the shouting, while Le Pen, true to the scrappy, guerrilla-style party that she leads—it is stronger on combat than on policy—spent much of the two-and-a-half-hour contest attacking him. What policy proposals she offered appeared sketchy.

Macron offered his view of a France open to Europe and free trade; staying in the common currency; reinforcing its ties with European nations; dealing firmly with President Vladimir Putin of Russia; and overhauling France’s stultifying and voluminous labor code in order, he said, to generate more jobs. “We are in the world,” Macron said. “France is not a closed country.”

Le Pen depicted a France with a “total collapse of our industries”, preyed upon by Islamist extremists, demanding ever more government protection from economic vicissitudes and urgently needing to close its borders.

“I’m the candidate of that France that we love, who will protect our frontiers, who will protect us from savage globalization,” she said at the outset.

Macron was a ruthless capitalist in Le Pen’s familiar neo-populist depiction, ready to sell French industry down the river to hurt workers and help employers. She repeatedly tied Macron to the failed government of the incumbent Socialist president, François Hollande, in which Macron served for two years before quitting to start his own political movement.

“You defend private interests,” Le Pen sneered. “And behind that there is social ruin.”

Macron replied evenly, “What’s extraordinary is that your strategy is simply to say a lot of lies and propose nothing to help the country.”

He pointed out the weaknesses in her generous spending plans, noting the lack of revenue-raising measures to back them.

“France and the French deserve better,” he said. “Don’t say stupid things. You are saying a lot of them.”

Some of the sharpest exchanges came over terrorism, which polls show is a major preoccupation for the French. Le Pen cast herself as tougher on the issue, reeling off a series of antiterrorism measures—experts have suggested that they are either impractical or ineffective—and saying Macron was a weakling on security.

Nonetheless, it is one of her signature issues, always drawing a thunderous response when she invokes it at rallies. “You are for laxism,” Le Pen said.

“You are complaisant toward Islamist fundamentalism,” she said. “We’ve got to eradicate fundamentalist ideologies. You won’t do it, because they support you.”

Bristling, Macron pointed out the impracticality of expelling the thousands of people who are in the government’s so-called S-Files because they are considered to constitute some potential danger to the country’s security.

“The S-Files are just information files,” Macron said. “You can be an S-Filer merely for having crossed paths with a jihadist.”

“You’ve got to be much more surgical than Le Pen,” he added. “ W hat you are proposing, as usual, is merely powder,” he said, pointing out that as a member of the European Parliament she voted repeatedly against antiterrorism measures.

She d ismissed t hese cr iticisms, as she did the entire European Union project. Under her, she said, “French laws will be superior to laws given out by some commissioner whose name we don’t even know.”

Macron posited a diametrically opposed view, insisting that France’s place was in a stronger Europe that could stand up to Putin’s Russia and President Donald J. Trump’s United States.

Le Pen’s idea is that “we’re going to leave Europe because the others can make it, but we can’t,” he said. “In the face of this spirit of defeat, I am for the spirit of conquest, because France has always succeeded.” New York Times News Service

Apec chief: Asia trade pact wouldn’t be ‘very high level’

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alks on an Asia trade pact are unlikely to lead to a top-notch deal, according to Asia-Pacific Economic Cooperation (Apec) Secretariat Chief Alan Bollard, even if wrapping it up quickly would send a message that nations still prioritize free trade.

The 16-nation Regional Comprehensive Economic Par tnership (RCEP) being championed by China may be signed this year, “which would be a step forward but it’s not going to be a very high-level agreement”, Bollard said on Thursday in a Bloomberg Television interview.

“It’s been a long, hard negotiation but I think there’s quite a bit of argument that

it would be good to get a signature on something by the end of the year, if only a not-final-intentions signature,” he said.

The RCEP has taken on added importance after US President Donald J. Trump withdrew the US from a separate Pacific deal in one of his first acts in office. His actions threw the future of the 12-nation Trans-Pacific Partnership (TPP)—a deal that did not include China— into doubt, and his protectionist rhetoric more broadly has sparked concern about the outlook for globalization and free trade.

The RCEP is more of a traditional trade pact than the TPP—which covered issues including intellectual property and state-

owned enterprises. Even so, it has been bogged down by disputes over issues, including the free movement of highly skilled informationtechnology workers within countries in the pact, an Indian request that countries in Southeast Asia have balked at.

Singapore’s Trade Minister Lim Hng Kiang said on Thursday in a speech the RCEP talks are progressing well but “can move faster”, a signal that differences remain among nations involved.

Bollard said a meeting in Vietnam of Apec trade ministers later in May would be a chance for member-nations to promote free trade and regional economic integration.

There’s still a question mark over whether Trump’s nominee for US trade representative, Robert Lighthizer, will be confirmed in time to attend the meeting.

Asked in the interview if he was now less worried about the prospect for trade wars then when Trump took office, Bollard said, “I think we’ve still got to wait and see what really happens.”

“The full US new administration policy is yet to be articulated. We don’t yet have a US trade representative appointed,” he said.

“There’s some tough talk obviously going on but we hope there won’t be too much damage out of this.” Bloomberg News

atest indicators on China’s economy point to cont i nued g row t h t h rou g h 2018, according to mining giant Rio Tinto Group, which counts the world’s No. 2 economy as its biggest customer.

“Are we concerned about the Chinese economic health? The answer is no,” CEO Jean-Sebastien Jacques told reporters on Thursday following an annual meeting in Sydney. “The indications are positive for 2018, as well, but it’s early days.” He revealed he’s visited the nation five times in the past nine months.

Rio, which has about 200 staff in Shanghai and Beijing assessing data on China, including domestic mine output, last week reviewed the outlook for the economy in 2018, Jacques said. “The only concern I would have—which is not about China by the way, it’s more a geopolitical issue—is if there was to be a big shock in the system.”

Growth in China unexpectedly picked up to 6.9 percent in the first quarter, clocking its first back-toback acceleration in seven years, as industrial output advanced and factory prices surged.

Analysts projected faster economic expansion in each of the next four quarters in a Bloomberg survey from April 18 to 25, compared with forecasts in the March poll.

Commodities markets have faded in 2017 amid concern that political uncertainty is curbing prospects for improved global growth and on uncertainty over the impact on raw materials demand in China from slower economic expansion and capacity cuts in smokestack industries. Rio generates about

43 percent of revenue in China.

Restructuring in China’s steel industry “doesn’t mean they will reduce the output”, and there may be opportunities for Rio as remaining mills move to higher-quality imported ore, Jacques said. The reforms to curb capacity are among factors that means there’s likely to be continued volatility in iron-ore prices, he said.

Iron ore, Rio’s top earner, has tumbled about 28 percent since touching a more than two-year high in February, as steel prices have declined, squeezing margins for mills. Investors are weighing the outlook as producers in Brazil to Australia add to seaborne supply to threaten further price declines, while China’s record iron-ore imports and strong steel demand offer support.

London-based Rio is continuing discussions on potential opportunities with state-owned China Minmetals Corp., he said, without specifying any details. Jacques met with Minmetals in Beijing in March, the Chinese entity said in a posting to its web site at the time.

In Australia Rio has cut about 100 jobs at its Boyne aluminum smelter in Queensland state amid gains in prices that have made some output unprofitable, Jacques told reporters.

Regional electricity price spikes and outages in Australia, one of the biggest natural gas and coal suppliers, is raising concern from businesses that the nation’s energy security is deteriorating.

“It’s time for the federal government to step in,” Jacques said. “We have had a very open, very blunt conversation with the government.” Bloomberg News

Trump’s Nafta threats push Mexico to play catch-up on innovation

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e x ico doesn’t h ave enough people l i ke Ju a n Pablo Senosi ain, and US President Donald J. Trump might just be the person to help change that.

Senosiain is an innovator who helped build his family’s laboratory into one of the top 5 retail prescr ipt ion- d r ug compa nies founded in Mexico, with close to 30 patents at home and 50 abroad.

Trump’s threats to quit the North American Free Trade Agreement (Nafta) are giving Mexico an incentive to build more businesses like Senosiain’s that create value through research and design, as it reassesses its dependence on lowwage manufacturing.

Mexico’s leaders are tr ying to do more to sponsor research to stimu late development of intellectual property that can help businesses develop products the world wants. The government in April said it would match 30 percent of new and expanded research and development, investments in Mexico and is seeking 375 technolog y projects to help fund.

“W hile we don’t have native or original innovation in some fields, we are tr ying to invest in that area,” Mexico’s Economy Min ister I ldefonso Gu aja rdo said in an inter view. Compared to ot her nat ions engaged in global trade, Mexico is still a laggard in intellectual property development despite its proximity to the US and its private sector’s close relationship with multinational cor porations.

While Mexican residents received 172 US patents in 2015, up from 44 in 1994 when Nafta took effect, that’s low compared to countries such as South Korea, where US patent awards surged to 17,924 in 2015 from 943 in 1994, and China, which won 8,116 patents in 2015, up from 48 in 1994.

The patent numbers aren’t just about bragging rights on unique products the rest of the

world wants. Technological and research competence correlates with wealth, and helps insulate economies from job migration to even lower wage centers of production or the replacement of those jobs by automation. Countries such as China and South Korea—and even Germany and Japan after World War II—have parlayed trade with the US into thriving domestic industries from autos to clothing to smartphones.

Indeed, Trump’s attacks on United Technologies Corp.’s Carrier business for moving jobs to its southern neighbor raise a nagging question: Why was the country manufacturing basic products for a US company and not competing against them?

Some Mexican businesses positioned themselves not as “knowhow companies” that would compete head on with American firms, but rather “know-who companies” that parlay connections and influence to cut through Mexico’s thick political bureaucracies and get products to market.

Mexican firms “are very much used to the idea that the big technology inventions get made in Switzerland or New Jersey, and that they will be the local partner of Novartis or Merck,” said Jorge Goldstein, a director and patent law yer at Sterne, Kessler, Goldstein and Fox in Washington, which focuses on intellectual property.

“Shaking up that model would be very good,” he added, because “there is no incentive for them to develop their own technology.”

That lack of development shows in Bloomberg’s 2017 Innovation Index, where Mexico fails to rank among the top 50 countries that are assessed on topics including patent activity and research and development, among other benchmarks. That puts it behind Poland, Turkey, Argentina and Morocco.

The US is ninth, trailing countries such as South Korea, Germany, Sweden and Japan. Bloomberg News

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

The World BusinessMirror

Friday, May 5, 2017

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Trump, bullish on Mideast peace, will need more than confidence W

ASHINGTON—Ever since Britain declared 100 years ago that there should be a Jewish homeland in Palestine, harmony has eluded that dry, benighted land. Presidents and kings and prime ministers and diplomats and special envoys have labored for a century in a futile search for peace.

President Donald J. Trump, however, is not daunted by the challenge of bringing together Israelis and the Palestinians.

“It’s something that, I think, is frankly maybe not as difficult as people have thought over the years,” he said on Wednesday.

Whatever else may be said of him, Trump does not suffer from a confidence deficit. As he hosted the Palestinian leader, Mahmoud Abbas, Trump proclaimed that he would be the president who finally made peace in the Middle East.

“We will get this done,” he said. He even suggested that, with his leadership, “hopefully, there won’t be such hatred for very long.”

Never mind that he also thought repealing and replacing his predecessor’s health-care program would be “so easy”. Or that he predicted he would have no trouble bending North Korea to his will or forcing Mexico to pay for a border wall.

Then there was Trump’s assertion as a candidate that he knew more about the Islamic State than the generals. And his insistence he could “fairly quickly” pay off the entire $19-trillion national debt accumulated over the past 182 years.

Braggadocio, of course, has been at the center of Trump’s persona for decades and arguably helped make him into a swaggering celebrity real-estate tycoon and reality television star with enough appeal to win the presidency.

In the White House, though, it has historically been more problematic.

Presidents who make bold predictions often come to regret them. All Trump would have to do is ask those who, for decades, have banged their heads against the Middle East brick wall.

“When the president says we’ll do this deal, he thinks in terms of a one-off real-estate deal,” said Aaron David Miller, a former Middle East negotiator who spent years trying to bring Israelis and Palestinians together. “And while that’s partly true,” the specific issues dividing Israelis and Palestinians “transcend the ‘art of the deal’ in ways I’m not sure he can now even begin to imagine”.

Trump’s introduction to Abbas made that plain. The president said he would do “whatever is necessary” to negotiate an agreement without offering any sense of how he intended to do that or what such an agreement might look like.

Abbas, by contrast, repeated the conditions the Palestinians have insisted on for years—the creation of an independent Palestinian state based on borders that existed before the Arab-Israeli War of 1967, with East Jerusalem as its capital; the right of return for refugees; and freedom for prisoners in Israeli cells.

That formulation has been a nonstarter for Israel, which itself has shown no sign of backing off its own fixed positions.

Trump has made clear that details do not matter to him, abandoning the longtime US commitment to the so-called two-state solution. When he hosted Prime Minister Benjamin Netanyahu of Israel in February, Trump said he would be fine with either a two-state or a one-state solution if both sides agreed.

Palestinians, hoping he might be more supportive of the two-state plan with Abbas, were disappointed when Trump made no mention of it on Wednesday.

“We want to create peace between Israel and the Palestinians,” Trump said.

“We will get it done. We will be working so hard to get it done.”

Turning to Abbas, he added, “I think there’s a very, very good chance, and I think you feel the same way.”

Abbas, 82, who was among the negotiators at the signing of the Oslo Accords on the White House lawn in 1993, indicated that he did feel optimistic that, nearly a quarter-century later, Trump might finally build on that initial agreement to forge a final resolution.

Praising Trump’s “courageous stewardship”, “wisdom” and “great negotiating ability”, Abbas said, “We believe that we can be partners, true partners, to you to bring about a historic peace treaty.”

Abbas implored Trump to understand the Palestinian perspective. “It’s about time for Israel to end its occupation of our people and of our land after 50 years,” he said. “We are the only remaining people in the world who still live under occupation. We are aspiring and want to achieve our freedom, our dignity and our right to self-determination.”

Echoing Israel’s position, Trump pressed Abbas to discourage Palestinian instigation against Israelis. “There cannot be lasting peace unless the Palestinian leaders speak in a unified voice against incitement to violence and hate,” Trump said. He did not publicly mention Palestinian financial payments to the families of convicted terrorists, but his spokesman, Sean Spicer, said Trump had raised the issue privately.

Abbas insisted that Palestinians were not preaching hatred. “I affirm to you that we are raising our youth, our children, our grandchildren on a culture of peace,” he said, a contention Israeli officials would reject.

By all accounts, Trump seems genuinely determined to pursue Middle East peace and has assigned his son-in-law, Jared Kushner, and his longtime lawyer, Jason Greenblatt, to lead the effort. The president may visit Israel this month before a scheduled trip to Europe. New York Times News Service

China’s Xi urges restraint on N. Korea in call to Duterte

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ANILA, Philippines—Chinese President Xi Jinping has discussed North Korea during a phone call with President Duterte, who referred to Beijing’s important role in promoting peace on the Korean Peninsula.

China’s state-run Xinhua News Agency quoted Xi as urging all parties to exercise restraint and return to dialogue and negotiations in realizing a denuclearized peninsula.

Duterte’s Spokesman Ernesto C. Abella said on Thursday the two leaders exchanged views about regional developments, and Duterte shared the Philippines’s desire for peace and stability. Abella said Duterte “referred to China’s important role in promoting peace on the Korean Peninsula” during Wednesday’s call, and his words were likely to encourage China to broker peace in the region. The US has been pressuring China to do more to stop Pyongyang from further missile and nuclear tests. AP

A10 Friday, May 5, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

The failure at DENR

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ome 10 months ago, when Ms. Regina Paz “Gina” La’O Lopez was appointed by President Duterte as secretary of the Department of Environment and Natural Resources (DENR), we welcomed that decision.

Here was a person who had both the passion and experience to be able to bring a new focus and thrust to the immense responsibilities of the DENR. Lopez’s knowledge of and concern for environmental issues is something that has been lacking at the DENR through many administrations. We believed that, in particular, she could finally put into place the badly missing pieces necessary to fulfill the constitutional mandate of the DENR. We wrote in February: “The legal mandate of the DENR as stated in Executive Order 192, 1987 says, ‘There is a need to protect and enhance the quality of the country’s environment. It is hereby declared the policy of the State to ensure the sustainable use, development, management, renewal, and conservation of the country’s forest, mineral, land, offshore areas and other natural resources’.”

Further, also part of the mandate is to “increase the productivity of natural resources in order to meet the demands for forest, mineral and land resources of a growing population” and to “enhance the contribution of natural resources for achieving national economic and social development”.

Unfortunately, Lopez saw her appointment to this critical position as an opportunity to further her advocacies rather than fulfill the DENR’s obligations as a regulatory agency. Maybe we should have seen that coming.

The belief that mining has no place in the Philippine economy is a position that is perfectly acceptable for an advocate in the private sector. But her conviction that “the Philippines does not need mining” has no place in the office of a government regulator. That is not her call to make as environment secretary.

It would be no different than the head of the Department of Transportation demanding the elimination of vehicles using gasoline engines or banning automobiles completely instead of “providing the country with efficient, effective and secure transportation systems”.

Lopez has shown with action, as well as words, her great concern for the rural farming communities and the poor. But her statement, “Give me two years and I will show you that I can do so much more for the local communities than the mining industry has ever had”, simply put, is not her job at the DENR. Lopez is absolutely correct that the current taxation and revenue-sharing scheme for the mining industry is completely broken. However, it is the job of Congress to fix that problem and our lawmakers have failed to do so for a decade. Lopez could already have used her position to push Congress and the President in that direction, but she did not.

While closing down mining companies that do not strictly follow the law is absolutely essential, there did not seem to be any follow through to make that decision part of an overall process to fulfill the DENR mandate.

There are successful examples for the Philippines to follow. Sweden, with its extremely fragile environment, has a comprehensive government-private program for mining that works both economically and environmentally. At every single step, the government is there to ensure that the law is followed to the letter. Johan Lindberg, ecological consultant for the Swedish environment consulting firm Enetjärn Nature, said: “For Sweden, this includes ensuring that both reindeer grazing and mining can go on in harmony.”

In the Philippines we are once again back to square one. An opportunity has been lost and valuable time has been wasted. When are we and our public servants going to learn how to do things the right way?

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Reaching the east by sailing west James Jimenez

spox

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fter the 2016 elections, a Pulse Asia survey showed that 63 percent of the respondents described the then just-concluded electoral exercise as “more credible” than the 2010 polls. It also said 78 percent assessed the elections as having been “faster” compared to 2010, 89 percent said the election results were “believable”, and 41 percent said there was “less cheating”. With these numbers, it seemed only natural that a Social Weather Stations (SWS) survey would show that the commission had earned the most improved net sincerity rating in fighting corruption, jumping 18 points to +12 in 2016, from -6 in 2015.

The undeniable success of the 2016 elections represents a culmination of the country’s entry into the realm of automated elections.

The automation of the 2010 elections had as many enthusiasts as it had skeptics. For the former, automation was the solution to the perceived cheating and results manipulation that had stigmatized many previous elections.

For the skeptics, it was a puzzle.

Other places, so the theory went, undertook full automation only after they had sorted out electoralfraud issues. The Philippines was going at it backward, they said,

and the attempt was doomed to fail. In the end, both sides of the debate were proven right, at least to some extent.

The enthusiasts could point to the fact that the results came much quicker than at any other time in our political history, that the results stood up to the closest scrutiny, and that cottage industries of fraud had clearly been dismantled. The skeptics, on the other hand, accurately predicted the lingering doubts of a handful of sectors; doubts rooted in deeply held beliefs, still unshaken, that the results could be “fixed”.

Coming into the second automated elections, 2013, the general public approached the elections with a great deal more confidence and acceptance. “Picos” had already crept into the lexicon of the average voter, and fewer people spoke of “writing” the names of their candidates on the ballots. But the objections of a few sectors remained, albeit with far less steam and with a subtle shift in focus from challenging the integrity of the automated election system to trying to spread doubt about the personalities involved. Nevertheless, the success of the 2013 elections effectively muted all but the most determined doubters.

In the run-up to the 2016 elections greater shifts in focus were evident, with one of the leading lights of the opposition to the Commission on Elections’s automation project actually claiming that he had no objection to the use of the automated system as a back-up plan. This signaled a significant departure from the same person’s previous all-or-nothing stand; in the approach to 2016, the objection had become a matter of preference: he simply wanted his untried system to be used, rather than the one that had already been tested in two successful national elections.

After a long period of testing, during which alternative solutions proposed by those opposed to automation were tested before

PPPs in the Philippines: Myths vs facts

By Ferdinand A. Pecson

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he government recognizes the valuable contribution of the private sector in attaining national development goals through public-private partnerships (PPPs) as enshrined in the 1987 Constitution. To encourage further private-sector participation, the build-operate-transfer (BOT) law was passed in 1990, and amended in 1994.

Today, under the Duterte administration’s 10-point socioeconomic agenda, PPPs are identified as one of the key strategies to accelerate infrastructure development.

Even with the success of PPPs in the Philippines, certain misconceptions continue to undermine the PPP Program’s accomplishments. One common misconception is that PPP is equivalent to privatization. In PPPs, the government retains ownership of the facility, defines the extent of private-sector participation and continues to hold regulatory oversight and control of the infrastructure project or facility. In privatization, the government relinquishes its ownership of the asset to the private sector, which now owns and operates the asset. Some examples of privatization are the power and water projects implemented under Electric Power Industry Reform Act (Epira) and the Water Crisis Act, respectively.

Another false impression is that the PPP Center of the Philippines structures and approves the projects. The Center, which is attached to the National Economic and Development Authority (Neda), is tasked to serve as the central

coordinating and monitoring agency for all PPP projects in the Philippines. While the Center provides technical advice to implementing agencies (IAs) throughout the course of the project lifecycle, it is the IA that identifies the infrastructure project, an interagency Investment Coordination Committee (ICC) Technical Working Group (TWG) that evaluates it and the ICC-Cabinet Committee (ICC-CC) and the Neda Board, as chaired by the President of the Philippines, who approves it.

Another myth is that the government provides guarantees to PPP projects awarded to the private sector. While the BOT law provides for several forms of government support or contribution, such as government guarantees or direct government subsidies to a PPP project, none of the PPP projects awarded since 2010 provided guarantees.

There is also an observation that the PPP scheme is more expensive compared to other procurement options. PPP projects are not necessarily more expensive, especially since these undergo valuefor-money assessment during project development, evaluation and approval stages. A PPP project is said to achieve value for money if it costs less than a public-sector comparator (i.e., a same or similar project delivered under the traditional procurement method). Also, most PPP bids received in recent years have come at lower than the approved government costs. If in the instance that actual project costs turned out higher than approved government costs, the private-sector partner assumes or shoulders cost-overrun risk. PPPs can be more

cost-efficient overall if one considers the project’s lifecycle cost, including operations and maintenance, and the transfer of risk to the private sector.

In the Philippines most of the signed PPP contracts were awarded to big conglomerates, prompting criticisms that the process tends to favor only the major players. On the contrary, the existing PPP framework encourages open competition and ensures a level playing field for all PPP players through transparent and credible processes. Local or foreign investors and large or small companies that participate in PPPs are properly scrutinized through their legal, financial, and technical capacities to ensure that they are able to finance, construct and implement large, complex infrastructure projects.

There are also allegations that unsolicited proposals, such as the recently awarded North Luzon Expressway (Nlex)-South Luzon Expressway (Slex) Connector Road did not undergo a competitive and transparent bidding process.

On the contrary, unsolicited projects are subject to a Swiss challenge—whereby the government invites other privatesector parties to match or exceed the unsolicited proposal or bid. In the case of the Nlex-Slex Connector Road, the Department of Public Works and Highways advertised in a newspaper of general circulation an invitation to other interested parties to submit comparative proposals.

Details of the unsolicited proposal process are posted in the PPP Center web site for transparency. Understandably, there are persistent concerns surround-

the public—and came up short of even the most conservative expectations—the automated 2016 elections were conducted, seeing record-high turnouts, and unprecedented public acceptability. To date, only one significant challenge has been posed against the results. The winners, on the other hand, enjoy unshakeable mandates.

Throughout the nine-year duration of the country’s foray into automated elections, the Comelec has remained focused—and rightly so— on the need to get automation right.

The accolades it has reaped for the 2016 elections, including awards and recognition from international organizations, signal that those efforts have not been in vain. Continuing along this path will eventually allow automation to recede into its appropriate place in the grand scheme of things—a tool for elections, rather than its end-all and be-all—and in the process, allow the Comelec to devote more of its energy toward making Philippine elections more inclusive, more gender balanced and more deeply integrated in the daily democratic existence of average voters.

As for those skeptics who thought that the Philippines was going about automation the wrong way ’round, now would be a perfect time to remember that Magellan reached the east by sailing west.

ing the treatment of unsolicited proposal process both internationally and locally.

Policy efforts to institutionalize PPP best practices in this aspect are under way to further strengthen the PPP unsolicited proposal framework.

PPPs free up much-needed fiscal resources that can be used to fund immediate needs, such as in health and other social services. PPPs also offer alternative financing solutions to the country’s massive infrastructure needs.

For instance, the PPP for School Infrastructure Project (PSIP) of the Department of Education has contributed in immediately addressing the classroom shortage throughout the country. The PSIP-Phase 1 supplemented the existing initiatives on classroom building nationwide. The PPP track served as a viable option apart from the traditional procurement using government funds or official development assistance (ODA), which were both not available at the time the project was being developed.

In pursuit of the Duterte administration’s goal of accelerating infrastructure spending, there is a need to take stock of all available procurement options and determine the optimal solution that serves the interest of the government and the public. PPPs remain a significant and relevant player in attaining the Philippines’s vision of the Golden Age of Infrastructure, complementing the current thrust of using traditional procurement and tapping ODA.

The author is executive director of the PublicPrivate Partnership Center of the Philippines.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Friday, May 5, 2017 A11

The true nature of poverty Its own excuse for being Leonardo A. Lanzona Jr.

Tito Genova Valiente

annotations

EAGLE WATCH

I

N my article on rice self-sufficiency last week in this column, I made an unqualified assertion that moving workers from agriculture to industry is the means of achieving growth and reducing poverty. As a follow-up, I would like to point out that this goal of migrating workers across sectors will require a series of other reforms, such as a progressive tax system, to achieve the desired objectives.

In contrast to the rice self-sufficiency policy, the reasons for pursuing an effective industrial transformation can be readily presented.

First, the share of agricultural workers to the total work force is still disproportionately higher compared to the more productive sectors. In 2014, although the share of agriculture to total output is only 11.3 percent, 30.53 percent of the total labor force are still found in agricultural sector.

While the percentage of workers in agriculture has been declining over time, one can still consider this proportion of agriculture workers to be substantial, given the limited productivity in the sector.

Second, there are technological reasons favoring industry. Typically, industry as a sector exhibits faster growth than agriculture. It is less handicapped by land, an input that is fixed in supply. Capital is the main input complementary to labor in industrial production and, unlike land, it can be accumulated over time.

This creates a greater potential for absorbing even more labor.

Third, there is greater scope in industry than in agriculture to improve production efficiency through acquired experience (learning-bydoing). Economies of scale can be more developed in the industries since its technology can allow greater flexibility in the use of labor and capital, as opposed to land and labor.

The industrialization argument is so prominent in the economics literature that it forms the basis of the so-called Kuznets invertedU curve between inequality and growth. According to his hypothesis, inequality initially rises with growth, but as growth continues, inequality declines. Accordingly, the industrialization and the associated technological progress are likely to benefit first those who have initiated these changes, i.e., the capitalists, but in the long run, should benefit the workers, as well. This hypothesis has also often been referred to as the trickle-down effect, and has been used as basis of many economic policies in less developed countries, including the Philippines.

Unfortunately, despite the comfort that this hypothesis gives to growth-oriented policy-makers, no empirical support for it can be found both here and in other countries. In our case, despite several attempts at industrialization, inequality has not decreased despite producing growth.

For most of our history, incomes of the top 10-percent income class have increased at much faster rate that the rest of the population.

But it is not about inequality; the main issue is poverty, which causes the persistent inequality. While recent evidence show that both rural and urban real wages have increased,

with lower observed poverty rates, a substantial segment of the population remains in dire need of basic services. More important, as seen in the country’s previous attempts at industrialization, there is a question of sustainability. Even as we further push for industrialization and greater equality, low rural, agricultural wages may disappear but these may just be offset by the emergence of low urban, industrial wages. Eventually, these poor, urban workers will return to the rural areas, thereby causing rural wages to decrease once again.

The main problem is that industrialization, though necessary, may not be sufficient in reducing poverty for a longer period of time. Its main weakness lies in the assumption that industrialization also leads to an improved income-earning capacity of poor individuals. Unfortunately, there is nothing about the argument that explains how household capacity improves. Pushing people toward the industrial sector is no guarantee that they are going to be hired and that their skills will be enough to satisfy the labor demands of the industry.

In other words, the industrialization argument per se may not address the true nature of poverty.

Beginning with Amartya Sen, economists have defined poverty as an intrinsically dynamic characteristic of being locked into a low level trap of capability or asset deprivation, resulting in social and economic exclusion. Thus, it is not low incomes that cause poverty. It is the poor’s inability to acquire and develop capabilities and assets that will allow them to invest in themselves or in their children, thereby leading to the persistence of poverty.

In summary, policies that promise income growth and industrialization alone may not affect poverty at all.

For example, the proposed massive infrastructure program—the socalled Dutertenomics—may bring about substantial growth and energize industrialization. However, unless investments are made to the poor households in nutrition, education, clothing and housing, as well in preconditions for participating in labor and credit markets, and in functioning as a social and political citizen, only well-off households will benefit from this program. The dilemma here is that the significant costs of infrastructure will diminish the funds needed to invest in poor households. In which case, the government should enforce a progressive tax system that will force the rich to finance the key social investments for the poor.

Leonardo Lanzona Jr. is a professor of Economics at the Ateneo de Manila University and a senior fellow of Eagle Watch, the school’s macroeconomic research and forecasting unit.

T

here is no logic behind physical beauty. Things stop there.

I don’t think God created lovely women, with shapely legs and thick hair and pronounced from the clouds: This is my daughter in whom I am well pleased.

My catechism tells me God is pleased about us all.

But, somebody, as in Greek mythic time, has to throw the Apple of Discord with the brand “To the Fairest”, and whereupon women scrambled to claim the fruit. Then by social evolution the fruit becomes a crown—a bronze, a silver, a golden one. With cash economy, the diadem is encashed into dollars and pesos.

With industrial revolution, house and lot, as well as cars, are added to the prize. With the rise of business acumen, the cash is turned into products that make eyes glow, hair grow and skin also glow.

The women never stop fighting for the crown and cash, as the contest hurls itself against national territories and reaching even into the farthest recesses of the universe.

Men who feel they know how women should think work with other women who believe they are helping women to put up institutions to make the beauty struggle even more difficult.

As the women cannot be asked to undress, they are asked to dress in

something that will allow people to see them how they would look when a bit naked. Then they are given a few minutes to cover that coveted body with what institutions call the “long gown”. The people want to test if they would be beautiful when shrouded. Depending on how strict, rigid or cruel the group behind the contest, the women either still a bit naked or sweating under cape or beads, are asked questions. It is a test to find out if the woman with a beautiful face and beautiful body has a mind.

It is not even about possessing a beautiful mind but a mind that can spit our ideas. The responses in English are better appreciated.

A group composed of men and women, usually belonging to the wealthy class (no barangay captains are ever allowed to judge) is tasked to be the jury. These individuals hand down the sentence after a long program called “pageant”.

In our land, beauty has ceased to be a reason for its being. It has become terrible beauty made complex, complicated and convoluted.

SERVANT LEADER

‘L

ord, Jesus Christ who loves us eternally and has risen from the dead is now calling upon us to come to Him.” Radio Veritas is inviting everyone to celebrate the Easter season by taking part in the Veritas Easter Pilgrimage that will be held on the different churches in Batangas on May 14, Sunday, at 4:30 a.m.

there is always a “creeteeque” lurking behind any post.

Do we ever connect these so-called beauty queens to a province or a city in this republic? Are these women expression of the class relations or the poverty or even any developmental dream of their townsmate?

Don’t talk of empowerment among these women. If you are damn serious about empowering women and men, start with nurses who earn some P11,000 each month as they work beyond eight and 12 hours. Preach about empowerment to teachers who forge deep and dangerous rivers to teach small boys and girls about love of country. Teach empowerment to mothers who believe they are not doing anything by taking care of eight or 11 children.

About beauty queens, just let them be: They are beautiful enough.

E-mail: titovaliente@yahoo.com.

A seasoned banker as BSP governor, why not?

Dr. Jesus Lim Arranza Continued from A1

A

seasoned investment banker and economist, the over 42 years of professional career of Jose C. Nograles straddle both the private and public sectors. His background includes serving in a number of industries from agriculture to manufacturing and banking prior to his appointment as president of the Philippine Deposit Insurance Corp. (PDIC) in January 2008. Such exposures to other industries provide the economic perspective that may serve him well at the Bangko Sentral ng Pilipinas (BSP).

I knew “Jopot”, then-president of PDIC, when we both sat at the UCPB board of directors and as a member of the audit committee that he chaired. He impressed me as a no nonsense professional, focused on finding solutions to issues and problems. I was surprised that he also had experiences outside banking.

His stint in the private sector began in the management consulting services of SGV in 1969, shortly after graduating from the Ateneo de Manila with a Bachelor of Arts in Economics (cum laude).

His involvement in the private sector expanded to various senior management positions in companies engaged in export garments manufacturing, tire retreading, car dealerships, banana exports and, finally, to the marketing and

assembly of a Korean brand car line.

His entrepreneurial sorties in the small and medium enterprises include establishing a family-owned hotel in Davao and a gasoline service station in Quezon City.

He was recruited to the public sector after his graduation with an MBA degree from the Asian Institute of Management in 1973. As a senior consultant to the late-Secretary Arturo R. Tanco Jr. of the Department of Agriculture and Natural Resources, he handled staff work for the secretary in the areas of trade and tariff, agricultural exports, oil exploration, land management, mining and forestry before rejoining the private sector after three years. He was back in the public sector after being appointed in 1984 as assistant minister for planning and

Catholics invited to join the Veritas Easter Pilgrimage Rev. Fr. Antonio Cecilio T. Pascual

Amid the noise of a recently completed “national” beauty competition, a blogger quite popular within his circle posted a notice really about whether these women and the way they look really represent the place—the city or province—silently attached to their swimsuits.

The blogger has forgotten that there are more bloggers out there ready to kill for beauty queens. He was berated for not supporting these women. One said we should empower these women, not make fun of them. Whereupon, this blogger retreated and, worse, posted an apology.

He was wrong. Behind the brevity of that tweet was gravity. He should have excavated the intelligence behind that quip. For, as my dear friend and literary scholar who now goes by the sweetly trenchant name, Jacinthe Pilapil (there is a beauty-queen ardor in that name),

Veritas Easter Pilgrimage will visit different churches in the Archdiocese of Lipa, including the National Shrine of Padre Pio in Santo Tomas, Batangas; Metropolitan Cathedral of Saint Sebastian in Lipa City; Carmel of Our Lady Mary, Mediatrix of All Grace (Carmelite Monastery); Basilica of Saint Martin of Tours in Taal, Batangas; and Archdiocesan Shrine of Our Lady of Caysasay in Taal, Batangas.

The Veritas Easter Pilgrimage is part of Radio Veritas initiatives for the observance of Easter season to give the faithful a spiritual

experience that will deepen their faith in God whose resurrection marks the triumph of good over evil, sin and death.

Easter is the celebration of Jesus Christ’s resurrection. It is celebrated on Sunday, and marks the end of Holy Week, the end of Lent, the last day of the Easter Triduum (Holy Thursday, Good Friday and Easter Sunday), and is the beginning of the Easter season of the liturgical year that lasts for seven weeks, ending with Pentecost.

Deadline of registration is on May

project management of the Ministry of Natural Resources, where he was instrumental in reforming development policies and regulatory systems for forestry, mining and land management.

Prior to his appointment as PDIC president, Nograles was senior executive vice president of the Land Bank of the Philippines (LandBank) heading the bank’s Operations and Corporate Services Sector. Five years earlier, as senior vice president and treasurer, he organized LandBank’s combined Treasury and Investment Banking Group and directed operations in equity and debt underwriting, financial advisory, mergers and acquisitions, project finance, loan arrangements and syndications, and securities trading and distribution.

He also led the team that enabled LandBank to obtain ISO Certification for Quality Management Systems and ISO 14001 Certification for Environmental Management System (Stage II). Concurrently, he was also board vice chairman and president of Land Bank Insurance Brokerage Inc., LandBank’s subsidiary engaged in insurance brokerage and foreign exchange trading.

Beginning in 2008, he led PDIC’s transformation to a more responsive and innovative institution.

In 2009, amid the global financial crisis, he shepherded the passage of vital reforms in the law that allowed PDIC to increase deposit coverage in times of financial crisis and other corollary measures to address moral hazard. He pushed for the

corporation’s mandates as deposit insurer, coregulator of banks and receiver of closed banks, realigning PDIC’s functions and organization to the world’s best practices contained in International Association of Deposit Insurers (IADI) 18 Core Principles for Effective Deposit Insurance Systems. He was also a member of the Executive Council of IADI and was elected as chairman of its Audit Committee in January 2010, the first PDIC president to be bestowed that distinct honor.

He reengineered PDIC’s Claims Settlement Operations to meet global benchmarks and earn the prestigious ISO 9001:2008 Certification on Quality Management Systems in June 2010, the first such initiative since PDIC’s creation in 1963.

The system also allowed for insurance payments for small depositors without the need for filing tedious insurance claims.

Together with the BSP, Nograles initiated the Strengthening Program for Rural Banks (SPRB) and an electronic matching facility called the Investor-Investee Help Desk to encourage mergers and consolidations to create a strong rural banking system and enhance rural banks’ long-term viability. An advocate of consumer protection and financial literacy, he launched the “Be a Wise Saver” campaign, an excellent public informationeducation program for safe and responsible banking.

Nograles is a fellow of the Institute of Corporate Directors.

So, as BSP governor? Why not?

10 at the Radio Veritas studios at 162 West Avenue corner Edsa, Quezon City. A pilgrimage donation of P2,200 will be applied to all the participants and a discounted donation of P2,000 for full-pledged Kapanalig members.

The pilgrimage donation is inclusive of transportation, lunch and snack, as well as love offering to the chaplain and a certificate of participation.

For inquiries, you may contact (02)925-7932 Loc: 129 and look for Renee Jose or Rey Isabela.

Radio Veritas 846 is owned and operated by the Archdiocese of Ma-

nila. Established in 1969, the Ramon Magsaysay-recipient Catholic radio station continues to be the leading social communications ministry for truth and evangelization in the country today.

To know more about Caritas Manila, visit www.caritasmanila.org.ph. For your donations, please call our DonorCare lines 563-9311, 5640205, 0999-7943455, 0905-4285001 and 09298343857. Make it a habit to listen to Radio Veritas 846 in the AM band, or through live streaming at www.veritas846.ph. For comments, e-mail veritas846pr@gmail.com.

2nd Front Page BusinessMirror

A12 Friday, May 5, 2017

DOF: Mining rules inconsistent with PHL laws costly for govt

Y

By Cai U. Ordinario

@cuo_bm

OKOHAMA, Japan—The Department of Finance (DOF) on Thursday warned agencies against imposing restrictive business regulations that are inconsistent with Philippine laws—such as the new rules imposed on the mining industry—as this could prove costly for the government.

In an interview on the sidelines of the 50th Asian Development Bank (ADB) Meeting being held here, Finance Secretary Carlos G. Dominguez III said that, while he supports efforts to penalize noncompliant mining firms, these should undergo due process.

Doming uez made the pronouncement following the Commission on Appointment’s (CA) rejection of Regina Paz L. Lopez’s appointment as secretary of the Department of Environment and Natural Resources (DENR).

“I fully support her actions to make sure that the rules are followed. However, there are laws that govern the relations of miners with the government, which should be followed,” he said.

Dominguez said imposing sanctions against mining firms, including ordering their closure without due process, would open the government to a legal battle with miners.

“As the guy who has to worry about money, I’m really worried because these things involve enormous amounts of money,” he said.

During her stint as DENR chief, Lopez had ordered an audit of all operating mines. Based on the results of this audit, she ordered the closure of 23 mining firms and suspended five others in 10 provinces in February.

L o p e z t h e n c a n c e l e d 75 m i ne r a l pro duc t ion - sh a r i n g

Dominguez: “There are laws that govern the relations of miners with the government, which should be followed.”

agreements (MPSAs) to protect the country’s watersheds.

A n MPSA is an agreement wherein the government shares in the production of the contractor, whether in kind or in value, as owner of the minerals. In return, the contractor shall provide the necessary financing, technology, management and personnel for the mining project.

In March the Chamber of Mines of the Philippines (COMP) filed graft charges against Lopez in connection with her decision to shutter mines.

New DENR chief

Following the decision of the Commission on Appointments to reject President Duterte’s nomination of Lopez as environment secretary, DENR employees said they prefer an “insider” to replace her.

“Hopefully, it will be somebody from the DENR family. We don’t want another outsider running the show,” said an employee who spoke on condition of anonymity.

LRT TO CAVITE Light Rail Manila Corp. (LRMC), in partnership with the Department of Transportation, Department of Public Works and Highways, Ayala Corp. and Metro Pacific Investment Corp., led the groundbreaking for the Light Rail Transit Line 1 (LRT 1) Cavite Extension in Parañaque on Thursday. LRMC, backed by Ayala Corp. and Metro Pacific Investments Corp. (MPIC), bagged the P65-billion LRT 1 Cavite extension public-private partnership project in 2014. Present during the ceremony are (from left) Parañaque City Mayor Edwin L. Olivarez, Rep. Strike B. Revilla of the Second District of Cavite, Public Works Secretary Mark A. Villar, LRMC Vice Chairman Jaime Augusto Zobel de Ayala, MPIC President Jose Ma. K. Lim, Cavite Gov. Jesus Crispin C. Remulla, Sen. Cynthia A. Villar, Transportation Secretary Arthur P. Tugade, Bacoor City Mayor Lani Mercado-Revilla and LRMC President and CEO Rogelio Singson. ALYSA SALEN The employee resented the decision of Lopez to bring in her own team, putting more than 50 career officials on “floating” status.

Last month disgruntled employees walked out of the DENR office in Quezon City to express their indignation over Lopez’s move to bump off their colleagues from key positions and replace them with her own team.

It was learned that most of Lopez’s team has employment contracts that will expire in July.

There are speculations that Duterte will soon name an acting OIC to take charge while waiting for the right time to appoint Undersecretary Mario Luis Jacinto, the concurrent Mines and Geosciences

Bureau (MGB) director as the new DENR chief.

Being floated are names like Demetrio Ignacio, the most senior among DENR officials; or Undersecretary Jonas Leones, a young lawyer.

Leones said the vacuum left by Lopez is temporary, saying he and other officials of the DENR expect Duterte to immediately appoint the next DENR chief.

He said it has been the practice in the DENR that during transition, whenever the top post is left vacant, Ignacio—the most senior officia—would take over as caretaker.

Leones also made an assurance that the CA’s rejection of Lopez’s

appointment would not affect the work in the DENR. “We have directors and supervisors. The DENR secretary usually acts on high-level decision-making or big-ticket projects or issuance of permits,” he said.

Finance Undersecretary Bayani H. Agabin also said the review of the 28 miners ordered suspended or closed by the DENR would still push through despite the decision of the CA to reject Lopez’s nomination as environment chief.

“Definitely, it will continue because it’s the mandate of the MICC to do just that regardless who’s in the DENR. We will still continue to review,” Agabin said. With reports from Jonathan L. Mayuga and Rea Cu

www.businessmirror.com.ph

BuCor deal with Tadeco illegal, DOJ team says

By Joel R. San Juan

@jrsanjuan1573

A

DEPARTMENT of Justice (DOJ) factfinding team has declared null and void the contract between the Bureau of Corrections (BuCor) and the Tagum Agricultural Development Corp.

(Tadeco) involving a 5,212.46-hectare land within the Davao Penal Colony.

However, the fact-finding team, led

by Chief State Counsel Ricardo V. Paras III, recommended that the deal be amended to comply with existing laws. This was immediately rejected by Justice Secretary Vitaliano N. Aguirre II. “The findings are okay with me but not the recommendations. One of the recommendations is to just fix the contract to make it acceptable. A null and void contract can no longer be repaired,” Aguirre said.

Aguirre added he would study first the report of the panel and determine whether the DOJ is the proper agency to invalidate the contract or the BuCor, being a separate body even if it is an attached agency. The committee held that the joint-venture agreement (JVA) was illegal, as it exceeded the 1,000-hectare limit under the Constitution.

It also concluded that the JVA violates the Constitution, which only allows private corporations to hold lands of the public domain through lease for a total period not exceeding 50 years.

The deal was originally forged in 1969, extended 10 years after for 25 years and again extended for another 25 years in 2003. The existing contract ends in 2029, in violation of the 50-year limit, the DOJ stressed. The BuCor-Tadeco deal also violates Commonwealth Act 141, or the Public Land Act, as the present and earlier agreements since 1969 were never subjected to any public action or bidding.

House Speaker Panteleon D. Alvarez, who sought the Office of the Solicitor General and DOJ’s review of the contract, said Tadeco was paying only a guaranteed P5,000 per hectare for the 5,212.46-hectare penal lands, which amounts to P26.541 million per year, or P663.525 million from 2003 to 2028.

Alvarez said plantations with the same development scale would fetch as much as P200,000 per hectare. This means Tadeco should be paying P1.061 billion per year, or P26.525 billion for the entire 25-year contract.

Phone betting ups laundering ante Teo visits Bohol to prove to tourists how safe it is Continued from A1

“A customer can sit in an office in downtown Shanghai, call associates of a casino, tell them to place bets and watch it in real time.”

The casinos’ operations are raising the risks of money laundering, according to a US government report in March. And Philippines gambling operations are causing concern in China, where authorities have sought to halt billions of dollars worth of outflows that have pushed down the value of the currency and drained capital reserves.Philippine authorities in late April arrested 55 Chinese nationals wanted in Beijing for alleged involvement in an online gambling syndicate north of Manila.

“Proxy betting has always been a huge risk because you can’t possibly know your customer, and you can’t perform any normal due diligence,” said David Green, a principal with Newpage Consulting and a former gaming regulator in Australia. “If there are tainted funds, they can be cleaned and issued back to the proxy or the player.”

Criminal groups already take advantage of Philippine casinos to transfer “illicit proceeds from the Philippines to offshore accounts”, the US State Department said in its International Narcotics Control

Strategy Report in March, citing the country’s gaming palaces “high risk for money laundering”. Last year, in one of the largest bank thefts in history, a ring of hackers stole $81 million from Bangladesh’s foreign reserves that were routed through a Philippine casino, a junket operator and a gaming-room promoter.

Subsequently, a Senate Blue Ribbon Committee recommended that casinos be included among institutions monitored for money laundering and that regulators be empowered to look into bank accounts of casino operators suspected of unlawful activity.

Reporting exemption

While the Philippine Amusement and Gaming Corp., the casino regulator also known as Pagcor, permits phone betting, many other gambling centers ban it because of money-laundering concerns. Macau eliminated betting by proxy last year citing the risk.

Not all Philippine casinos engage in proxy betting.

Unlike banks, insurance companies and other finance-related firms that must comply with the Philippines’s antimoney-laundering law, casinos are exempt from such reporting requirements—an issue the US State Department called “an especially

critical concern”, Philippine casinos, such as City of Dreams Manila and Solaire Resort and Casino, don’t run proxy-betting operations themselves and instead rely on so-called junket operators—companies that offer credit to players in China and other countries, as well as employ staff who communicate with them by phone.

W he n g a mble r s i n ot he r countries place bets by phone with junket operators in the Philippines, their identities are hidden to the casino operators that allow proxy betting, McCamley said. While Philippine law requires proxies to submit to the regulator the passport information of the people placing bets, there’s no verification process nor information about where the money they’re betting originated, he said.

“There’s no vetting, there’s no know-your-customer requirements,” he said. “It’s very high risk.”

VIP bets

Bets in VIP rooms accounted for almost half of total 2016 gaming revenue for Bloomberry Resorts Corp., which operates the largest casino resort in the Philippines, Solaire in Manila, according to its annual statement.

See “Phone betting,” A2

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

T

OURISM Secretary Wanda Corazon T. Teo visited Bohol on Thursday to hold a dialogue with local tourism industry stakeholders, and to prove to tourists how safe it is to travel to the province.

She also had a chance to interact with foreign tourists who were also at the lookout deck in Chocolate Hills, mounds of earth that resemble chocolate kisses during summer.

In her meeting with the stakeholders over lunch at The Bellevue Resort on Panglao Island, she told them in the vernacular: “We will focus on Bohol because of what happened [Inabanga incident]. As secretary of tourism, I am here to prove to everyone that Bohol is a safe haven for tourists and residents alike.”

Cebu and Bohol stakeholders reported cancellations by tour groups to the Department of Tourism (DOT) after advisories were issued by several foreign governments against traveling to Central Visayas, a few days before the long Holy Week commemoration. A few days later, Philippine military forces battled with Abu Sayyaf insurgents in Inabanga, on the northern tip of Bohol, and about 81 kilometers away from Alona Beach, where tourists usually go.

In a news statement, Teo reiterated her appeal to the embassies of foreign governments to coordinate with country destination before issuing

Tourism Secretary Wanda Corazon T. Teo (third from left) chances upon foreign tourists at the view deck of the Chocolate Hills, a popular attraction in Bohol. In her interaction with the visitors, she asks about their trip and if they’re enjoying their stay in the country. Photo courtesy DOT travel advisories. Just last week, even United Nations World Tourism Organization Secretary-General Taleb Rifai told participants of the World Tourism and Travel Council Summit in Bangkok, that the Philippines is a safe destination for tourists and appealed to foreign governments to effect travel advisories for limited periods only so as not to impact on the destination country’s entire economy. (See, “UNWTO chief expresses confidence in the PHL,” in the B usiness M irror, May 3, 2017.)

In underscoring the beauty and safety of Bohol, Teo also said she really didn’t have to aggressively promote the province in travel expos and exhibits abroad because of its popularity among foreign tourists. In the vernacular, she said: “Bohol is so lucky. Whenever I’m abroad, the tourists always ask about Bohol. I know you can stand on your

own, because even if I don’t promote your province aggressively, they look for Bohol.”

The DOT chief also met with Bohol Gov. Edgar M. Chatto to discuss the tourism situation in the province. Data from DOT-Region 7 (Central Visayas) showed there were 490,545 visitor arrivals in Bohol in 2015, up 7.8 percent from the arrivals in 2014. Of the total tourists who went to Bohol in 2015, about 170,000 were foreigners, while the rest were domestic tourists.

Since the launch of the DOT’s “It’s More Fun in the Philippines” brand campaign in 2012, Bohol has been among the destinations heavily promoted by the government agency in foreign travel expos.

The plan to open an international airport on Panglao Island is expected to further boost foreign visitors to Bohol.