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China vows to help push growth in Asia Pacific ‘SPAGHETTI BOWL OF REGIONAL TRADE DEALS COULD HARM SMEs’ C By Cai U. Ordinario & Bianca Cuaresma

hinese President Xi Jinping on Wednesday said Asia-Pacific countries can continue to count on China to propel the region’s growth, despite Beijing’s current struggle with so-called temporary pains of economic reforms.

INSIDE

the treasures of luna God is love

od is love and all who live in love abide in God. o Father in heaven, we have so much love in our hearts: Love for our parents, love for our children, love for our grandchildren and love for other people. We love You, Father, beyond compare. Strengthen our love so that we will never fail in what You want us to do with our true love. If in this world we can’t find the true meaning of love, let Your love for us be more than anything else. Amen. Breaking Bread 2015, Louie M. Lacson Word&Life Publications • teacherlouie1965@yahoo.com

Editor: Gerard S. Ramos | lifestylebusinessmirror@gmail.com

Life

IS Your chILd beInG buLLIed?

»d4

BusinessMirror

Thursday, November 19, 2015 D1

The treasures of Luna By Benjamin Layug

ith all the publicity generated by surprising triumph of the historical biopic Heneral Luna, now the Philippines’s entry for the Best Foreign Language Film at the 88th Academy Awards, it was somewhat fitting that, while covering the 10th La Union Surfing Break with a media group, we toured a town named after him (and his brother, the painter Juan Luna), one of five Philippine towns named after the general. The Luna brothers’ mother, Doña Laureana Novicio Luna, was a native of the town. From San Juan, the venue of the Surfing Break, we traveled the 30-kilometers distance in just about the same number of minutes, passing the towns of Bacnotan and Balaoan before reaching Luna. With Lawrence Fontanilla Carbonell as our designated tour guide, we made our first stop at the seaside Bahay na Bato Open Art Gallery, the newest tourist destination in Luna. Built back in 2000, the attraction was originally just meant to be a family rest house for its owners, Dr. Edison and Dr. Purita Noble. however, in 2014, Luna Mayor Marvin Marron saw the potential of this property as a tourist attraction, thinking that the house could attract visitors. Marron persuaded the owners to open the property to the public. The Bahay na Bato premises offers numerous stone carvings, masterpieces created by South Korean national Vong Kim, the in-house sculptor for the tourist site. Luna’s shorelines are covered, not with fine sand, but with an unending supply of stones of various colors, shapes and sizes that seem to be replenished year by year, a mystery that has long baffled the community. Using handpicked stones, Kim, with a great deal of imagination, carved faces, turtles, fish, flowers, hearts and even phalluses out of the stones and boulders. From Bahay na Bato, we proceeded to the town proper where, at the Luna Sports Complex, we sampled the bibingka ti Luna, the traditional locally produced creamy rice cake of Orang Nacionales, whose recipe has become the standard taste of bibingka from Luna. After savoring this popular delicacy, we walked over to the nearby Church of Saint Catherine of Alexandria, passing the equestrian statue of the great but tragic general. Just like other Philippine churches built in earthquake-prone areas, this Baroque church, listed by the National Museum as a National Cultural treasure, has thick walls and buttresses connected to a brick exterior stairway of different designs and shapes. The church interior is home to the supposedly miraculous 6-foot-4-inch high (the tallest known image of the Virgin in the country) wooden image of Our Lady of

Namacpacan (the original name of the town; it is an ilocano term meaning “one who feeds”), enshrined in the church in 1871. The patroness of travelers and of the town, it is said by experts to be the image of Our Lady of the Cord. Also called Apo Baket, the image has been credited with many miracles and devotees flock here every year to honor her. in fact, its 3-level façade, built in 1872, is painted in an eye-catching white, light blue and pale gray, the official colors of the image of Our Lady of Namacpacan, the church and the town. Even tricycles here are painted in light blue.

From the church, we again returned to the coast southwest of the town where we visited the town’s century-old Spanish-era watchtower, locally called baluarte. in the past, this defense post was in fair condition, circular in shape and made of brick, but the sea had already undermined its base causing half of it to break off and lean at a dangerous 20-degree angle toward the sea. The tower was further damaged when typhoon Lando (international code name Koppu) struck northern Luzon on October 20. The half that was already breaking off toward

❶ The equestrian statue of Gen. Antonio Luna ❷ The Luna town proper ❸ STone art at Bahay na Bato open Art Gallery ❹ The Spanish-era watchtower ❺ The Statue of our Lady of namacpacan ❻ NaNa orang (right) with daughter Cory

the sea finally collapsed as the old shoring failed when the entire beach underneath was swept away by big waves and strong winds. Prior to the typhoon, in November 2014, this tower and the other watchtowers of the province were declared as National Cultural treasures by the National Museum. Prior to leaving the town, we dropped by the residence-cum-bakery of Orang Nacionales. Nana Orang is considered as the grand master of all bibingka makers, with 30 years of experience baking bibingka ti Luna. Their other products include tupig and cassava cake.

showing off their products

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royal Brunei airlines rebranding reaches Manila

The iconic eiffel Tower in Paris

OyAL Brunei Airlines (www.flyroyalbrunei.com), the national carrier of the Sultanate of Brunei, recently launched its newly refurbished and rebranded office in Makati, Philippines, located at Le Rose Building, Arnaiz Avenue corner Paseo de Roxas, San Lorenzo Village. the rebranding of Royal Brunei is a worldwide effort aimed at increasing market penetration as the company marks its 40th year in operation. Present during the launch was her Excellency Datin Paduka Malai hjh halimah Malai hj yussof, ambassador of Embassy of Brunei Darussalam (fourth from left). With her are (from left) Benito C. Bengzon Jr., undersecretary of the Department of tourism (DOt); Carmelo L. Arcilla, executive director of Civil Aeronautics Board of the Philippines; Dermot Mannion, deputy chairman of Royal Brunei Airlines; Ramon R. Jimenez Jr., secretary of the DOt; and Mark Lapid, COO of tourism infrastructure and Enterprise Zone Authority.

life

Louvre, eiffel Tower and other Paris landmarks reopen

useuMs and landmarks in Paris reopened on Monday after a period of mourning for victims of the terrorist attacks in the French capital. The attacks on Friday left 129 dead and more than 350 wounded. Fleur Pellerin, the country’s minister of culture and communication, said in a statement on sunday that the city’s most famous sites would reopen at 1 pm local time on Monday after a minute of silence for the victims. But the eiffel Tower reopened at 4:20 pm local time, according to its web site. Disneyland Paris east of the city closed in honor of the country’s mourning period. Its web site said it would not reopen until Wednesday. “We mourn those lost to the horrific attacks in Paris,” euro Disney President Tom Wolber wrote on the web site. “We pray for

the injured and we hold them all in our hearts.” support for Paris after the tragic bombings and shootings poured out around the world. The eiffel Tower at Paris Las Vegas Hotel and Casino went dark on saturday in solidarity with its French counterpart. The hotel plans to donate $10 of every ticket sold on sunday and Monday for the excursion to the top of its eiffel Tower to the French Red Cross. In Paris, Texas, a high school-student organized a community prayer ceremony at the town’s replica of the eiffel Tower on saturday, according to a media report. And the eiffel Tower at the French pavilion at epcot Center in Walt Disney World in Orlando, Florida, showed the colors of the French flag. Los Angeles Times

The Henry Manila receives top honors from Luxury Travel Guide Awards

FtEN described as an oasis-like enclave right at the heart of the city, The henry hotel Manila (www. thehenryhotel.com) recently won the Luxury Boutique hotel Category for the Philippines in the international Luxury travel Guide Awards. Every year, the awards program recognizes and celebrates excellence

across all sectors of the affluent travel and tourism industry. A team of experts travels extensively to different regions to check on the range of products and services being provided, and identify the winners to coincide with the release of each respective Luxury travel Guide. Well-known for its repurposed Liberation-

style residential structures, implementation of “adaptive reuse,” and a garden designed by a National Artist for Landscape Architecture, the henry Manila on FB harrison Street in Pasay City has gained recognition for its architectural design, as well as the excellent services and unique experience it offers as a hotel like no other.

solidarity!

Sports

BusinessMirror

| Thursday, November 19, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

SOLIDARITY! A touching pregame ceremony saw England and France supporters sing the French national anthem as one, before the squads came together around the center circle for an impeccably observed minute of silence in honor of the 129 people killed.

By Steve Douglas The Associated Press

ONDON—Uniting in a symbol of defiance and respect, players and fans of the French and English soccer teams delivered a moving display of solidarity at Wembley Stadium at a friendly staged four days after the deadly attacks in Paris. A touching pregame ceremony saw England and France supporters sing the French national anthem as one, before the squads came together around the center circle for an impeccably observed minute of silence in honor of the 129 people killed. Social media was awash with praise for the dignified way a sensitive occasion was handled, while French sports daily L’Equipe’s Wednesday front page comprised a photo of the players observing the minute’s silence with the single word “Respect.” Wembley’s iconic arch was lit up in the blue, white and red of the French flag, while the French motto “Liberte, Egalite, Fraternite” was projected on the front of the national stadium. England won, 2-0, but rarely has the result of a soccer match—particularly one this prestigious—felt so irrelevant. “This will be shown round the world and will show unity,” said England captain Wayne Rooney, one of the team’s goalscorers. “Football is a global game and it is not about religion or race. We need to stand tall together in these tough times.” France striker Olivier Giroud said it was an emotionally charged occasion, “illustrated by the minute’s silence and ‘La Marseillaise [France’s national anthem].’” “We wanted to play this match for all

the people who have stayed in Paris, to pay homage and to honor the victims and their families,” Giroud said. “Everyone who played the match is a professional player. Even if it wasn’t easy, we had to do our job on the pitch.” Prince William, who helped lay floral tributes beside the field, and British Prime Minister David Cameron were among the 71,223 spectators at Wembley, where there was an increased police presence and enhanced security measures that included compulsory bag searches. With a police helicopter whirring overhead and armed officers on patrol, England and France soccer fans had mingled outside Wembley in a calm prematch atmosphere on a wet and windy evening in London. There was no sense of panic among supporters, who appeared intent on sending a defiant message of unity after the bombings in the French capital. “We have been welcomed here like it’s our own home,” Sebastien Correia, a train driver from the northern French city of Calais who was attending the game with nine friends, told the Associated Press. “That’s very important for us, for Europe, and for the world, for all the people who are fighting against dictatorships and terrorism. We need solidarity on a European and a world level.” France’s players were caught up in the attacks that ripped through Paris in several locations on Friday. Suicide bombers attacked the Stade de France, where France was playing Germany in a friendly. The teams spent the night in the stadium as carnage struck elsewhere. France midfielder Lassana Diarra’s cousin was killed and France forward Antoine Griezmann’s sister escaped from the Bataclan concert hall where 89 people

died. Diarra and Griezmann were among the 23-man squad that came to London, and both came on as secondhalf substitutes to applause. Diarra lowered his head during the minute’s silence. Many France players, who had been told to play the game by the French Football Federation, looked emotional for what was the country’s first major public event since Friday’s atrocities. Dele Alli and Rooney, with his record-extending 51st England goal, were the scorers for the home side. Yet, worldwide focus was not on the game or the result between two of the major powers in European soccer, but on what the occasion came to represent. “It was a very poignant occasion, it was really everything I expected it to be,” said England Coach Roy Hodgson, who likened the pregame activities to a “remembrance service.” Fans from both countries shared warm embraces outside the stadium, and some broke into a rendition of “La Marseillaise” as they walked up to the stadium. Some England supporters were wearing berets. Hours later—in another powerful moment in the pregame ceremony—players from both teams stood side by side with their arms linked in front of photographers.

ENGLAND and French players stand united on the field during a rendition of the French national anthem before their international friendly at the Wembley Stadium in London on Tuesday. AP

ANNOVER, Germany—The friendly soccer game between Germany and the Netherlands was canceled 90 minutes before kickoff on Tuesday due to the suspected threat of a bomb at the stadium. “We had concrete evidence that someone wanted to set off an explosive device in the stadium,” Hannover police chief Volker Kluwe told German TV. Referring to another bomb threat about an hour beforehand that turned out to be a false alarm, Kluwe said, “After the first object turned out to be harmless, we got a tip that had to be taken seriously that an attack was being planned.” Members of the German government, including Chancellor Angela Merkel, were not at the stadium, but had arrived in Hannover to attend the match to send a signal that Germany wouldn’t bow to terrorism in the wake of the deadly Paris attacks on Friday. At that time, Germany was playing France in a friendly in the Stade de France, outside of which three suicide bombers blew themselves up, killing one bystander. The bombers sought unsuccessfully to enter the stadium. At least 129 people were killed in the coordinated attacks in the French capital. Federal Interior Minister Thomas de Maiziere took responsibility for calling off Tuesday’s game. He said indications of a planned attack became stronger as the match approached, and the decision was made shortly after Merkel and her ministers landed. She flew back to Berlin. AP

SPECIAL MEETING IN MADRID

ADRID—The terrorist attacks in Paris have prompted Spanish authorities to schedule an extraordinary meeting to discuss security measures for the biggest game of the season—Real Madrid vs. Barcelona on Saturday. Top security officials will meet on Wednesday to determine whether the match in Madrid should be considered a high-risk event. It’s not unusual for the Clasico to be labeled a high-risk game, but extra precautions are expected because of the Paris attacks that killed 129 people and injured more than 350 on Friday. Miguel Cardenal, the country’s highest sports official, said on Tuesday that there was no reason for now to consider canceling the much-anticipated match at the Santiago Bernabeu, although it “will be done” if necessary. Games between Real Madrid and Barcelona have been considered high-risk events in the past mostly because of threats of fan violence, not terrorism. AP

CUP FINAL ON AS SCHEDULED

RUSSELS—The Davis Cup final between Belgium and Britain will go ahead next week despite security concerns following the Paris attacks, the International Tennis Federation (ITF) said on Tuesday. Belgium’s soccer friendly with Spain, scheduled for Tuesday in Brussels, was canceled amid safety concerns, but the ITF was confident that the final in Ghent, 55 kilometers from the Belgian capital, will not be affected. The three-day final starts on November 27 at the Flanders Expo. A sell-out crowd of 13,000 is expected. “The ITF, Royal Belgian Tennis Federation, and associated partners are continuing with preparations for the Davis Cup...with the emphasis on security operations,” an ITF statement said on Tuesday. “The ITF is aware of the cancellation of the Belgian versus Spain international friendly football match. The ITF understands that it was the Belgian FA that took this decision after consultation with the Belgian government. Other events in Ghent scheduled this week, including a cycling race and a large trade fair, are going ahead as planned.” AP

sports

development to Asia Pacific. We will continue to anchor ourselves here and deliver benefits to the region,” Xi said. He added that China will go for “broader, deeper and more sophisticated” cooperation at the regional Continued on A8

Air pact likely to follow PHL, Mexico inking of MOU on tourism

‘Serious bomb threat’

THE friendly draws emotions from (from left) England Coach Roy Hodgson, British Prime Minister David Cameron, Prince William the Duke of Cambridge and France Head Coach Didier Deschamps. AP

Xi made the assurance in his speech before economic and industry leaders at the Asia-Pacific Economic Cooperation (Apec) CEO Summit in Manila on Wednesday. “China is a member of the AsiaPacific family. We began our development here and we owe our

By Ma. Stella F. Arnaldo

Special to the BusinessMirror

BusinessMirror media partner

N agreement for direct air services between the Philippines and Mexico will likely be signed soon, following Tuesday’s adoption of a memorandum of understanding (MOU) further strengthening both countries’ cooperation, especially in the area of tourism. In an interview with Rolando Canizal, assistant secretary for Tourism Development Planning of the Department of Tourism (DOT), he said: “The MOU on tourism will soon be complemented by an airservices agreement. Once negotiation is completed, this will hasten the development of two-way traffic for both countries.”

He added that the Philippines and Mexico are active members of the United Nations World Tourism Organization, the Asia-Pacific Economic Cooperation group, and the Organisation of Economic Development and Co-operation, “where both countries are advocating for increased air connectivity and travel facilitation.” An airline industry source said round one of air talks between the Philippines and Mexico was already held in May in Acapulco, but “round two is needed for real details on frequencies, etc.” According to the web site of the Mexico’s Embassy in Manila, there is an existing bilateral agreement on air transport between both countries, which was signed in Washington in 1952. Continued on A2

Summit sets stage for climate action in Paris

h e n Su p e r t y pho o n Yolanda (international code name Haiyan) slammed into the central Philippines two years ago, flattening entire villages and killing thousands, the country became a poster child for the havoc wrought by global warming

and increasingly extreme weather. French President François Hollande traveled early this year to the devastated town of Guiuan, ground zero of the strongest cyclone ever to make landfall, to show the world the damage and appeal for an ambitious deal at

PESO exchange rates n US 47.0320

global climate-change talks in Paris at the end of this month. Leaders of the 21-member AsiaPacific Economic Cooperation (Apec) forum gathered this week in the Philippine capital Manila could help set the stage for greater

kevin dela cruz

ALYSA SALEN

(Clockwise, from left) Japan Prime Minister Shinzo Abe and his wife, Akie Abe, arrive at the Ninoy Aquino International Airport Terminal 1 for the Apec summit hosted by the Philippines. Singapore Prime Minister Lee Hsien Loong waves while being welcomed at the airport in Parañaque City. Members of various local and foreign media organizations converge at the International Media Center at the World Trade in Pasay City.

NONIE REYES

By Catherine N. Pillas

he numerous free-trade a greements (FTAs) forged by countries in Asia Pacific could hinder the full participation of small and medium enterprises (SMEs) to global and regional trade, economic and industry leaders of the Asia-Pacific Economic Cooperation (Apec) said on Wednesday. While Apec economic and industry leaders pushed for an open

trade and investment regime in the region, they said these FTAs should truly benefit SMEs. “We believe in the further expansion of the economy in the Apec region. Both Hong Kong and New Zealand, and many economies have proven the virtues of free trade,” Leung Chun-Ying, chief executive of Hong Kong, said in a panel discussion at the Apec CEO Summit in Manila. “From our point of view, we

want to see much greater capacity to trade on a level playing field in open markets, hopefully with the opening of Trans-Pacific Partnership [TPP] we’ll see more countries joining,”New Zealand Prime Minister John Key added. Asian Development Bank (ADB) President Takehiko Nakao said Southeast Asian countries and economic powerhouse China are growing faster due to free trade. See “Regional trade,” A2

See “Summit,” A2

n japan 0.3835 n UK 71.6438 n HK 6.0679 n CHINA 7.3787 n singapore 33.0327 n australia 33.4771 n EU 50.5688 n SAUDI arabia 12.5416

Source: BSP (16 November 2015)

Thursday, November 19, 2015

News

BusinessMirror

Air pact likely to follow PHL, Mexico inking of MOU on tourism… Continued from a1

No date has yet been determined for round two of the air talks, but the source says, it should be “soon.”At present, there are no direct flights between the Philippines and Mexico. Meanwhile, Canizal said the MOU on tourism cooperation between both countries “will enable us to work with the Mexico Secretariat de Turismo (Sectur) to exchange information to better understand the market needs and preferences of Mexican outbound tourists, as well for Mexico to know more about the Philippines tourist destinations and products.”Sectur is Mexico’s counterpart of the Philippines’s DOT. The MOU was signed in Malacañang by Philippines’s Tourism Secretary Ramon R. Jimenez Jr. and Mexico’s Foreign Secretary Claudia Ruiz Massieu on behalf of Sectur. The MOU signing was witnessed by President Aquino and Mexico’s President Enrique Peña Nieto. From January to September 2015, visitor arrivals from Mexico jumped 18.6 percent to 2,407.“Though the numbers [of visitor arrivals from Mexico] are small at the moment, the

Regional trade. . . “An open trade and investment regime is the most important reason China started growing fast, and the same for Myanmar and Vietnam. How we can maintain this momentum in that regard, is where TPP and other initiatives like Regional Comprehensive Economic Partnership [Rcep] are so important,” Nakao said. Leung said, however, that these “expansive” trade deals such as the Rcep and bilateral FTAs could complicate matters for SMEs and pose a hindrance to their participation to global trade. Including SMEs into the discussions of every trade agreement is vital, said Hong Kong’s chief executive, as they form the backbone of every developing country, and is seen as an important engine for economic growth. “We want to be careful that the RCEP, and all these bilateral, and plurilateral agreements not end in this spaghetti bowl of trade agreements. If you’re an SME and you want to participate in this environment of free trade, all of these agreements might be

double-digit growth rate has been consistent in the past years,” Canizal said. Similarly, there are about 2,000 Filipinos who visit Mexico annually, according to Philippine Ambassador to Mexico Catalino Diem Jr. as reported by Notimex, the official news agency of Mexico, on October 8. Because of the Galleon Trade between Mexico and the Philippines from the 16th to the 19th century, there is also an estimated 200,000 Mexicans of Filipino descent in southern Mexico, according to a published report in 2007. As stated in the MOU, both countries, represented by DOT and Sectur, believe that tourism is important “in developing their respective economies and in advancing a deep understanding between their people [and] is an excellent instrument to promote goodwill and to enhance the relations between their countries,” because of tourism’s “sociocultural and economic dynamism.” Both tourism agencies will cooperate specifically in the areas of tourism research

Continued from A1

counterproductive,” he said. The “spaghetti bowl effect” creates overlapping trade procedures that can confuse and discourage SMEs from availing of the purported benefits of FTAs. David Cunningham, COO of FedEx, warned that only a handful SMEs are taking advantage of these high-level FTAs that countries have been pursuing. “The reality is it’s SMEs that do trade internationally that grow, but it’s a fairly small percentage. When we think of TPP what we’re really trying to do is make these benefits available to them, the benefits that are open to global multinational corporations,” said Cunningham. But, the ADB said that even with these multilayered free FTAs, the economic benefit of tariff elimination and diminishing of nontariff barriers through these agreements is the “way to move forward.” To benefit from the aggressive move of economies to pursue trade agreements, ADB said financial inclusion must be a top priority of their governments.

and development, education and training, promotional programs, tourism investment, among others. The MOU further states that cooperation activities that are developed may be carried out by: “encourag[ing] mutual visits by their respective nationals and residents; encouraging the healthy growth of the tourism industry in both countries; exchanging experiences on matters relating to the organization, management and business operation of tourism activities in their respective countries; exchanging publications, research studies, and other information and data on tourism legislation and statistics existing and prevailing in their countries; promoting academic networking and exchanges between higher education institutions of both countries including student/ faculty internships, curriculum enhancement/ upgrading for comparability and equivalency, and development of joint degrees on tourism; exchanging experiences on topics related to official standards and certifications on tourism; exchanging experts and information

Summit. . .

or technology; training personnel; developing joint comparative studies on training programs and skills improvement; implementing joint promotion programs involving collaboration on advertising; developing tour packages; producing, distributing and exchanging brochures, and other collateral materials; promoting closer cooperation between their respective tourism organizations, tourism agencies, private sector or any other bodies connected with tourism; encouraging the arrangement of study tours for specialized experts in the field of tourism; encouraging the public and private sectors in their respective countries to invest and participate in tourism programs and to devote special attention to the development and implementation of mutually beneficial projects relating to tourism investments;” among others. The cost of projects developed under the cooperation agreement will be shouldered based on what is “mutually decided by the participants, subject to the availability of their respective budgets,” the MOU read.

Continued from A1

progress in mitigating climate change ahead of the November 30 Paris conference. It was at the summit of Apec leaders in Beijing last November that the world’s top polluters, the US and China, agreed to more ambitious goals to cap the carbon-dioxide emissions blamed for global warming. That was an important step, but China and the US need to double or triple those efforts, said Saleem Huq, director of the International Center for Climate Change and Development in Bangladesh and an advisor to least developed countries in the UN climate change talks. “They have to raise the level of their ambition definitely and if they can do that, the rest of the world will follow,” he said. Vulnerable countries, such as the Philippines, need to raise their voices urging them to do that, he said. Apec host President Aquino urged faster and bolder change. In the Philippines each year, 337 days are “heat stress” days, according to the World Health Organization, making the country one of the world’s most vulnerable to climate catastrophes. “The message simply put is we all have to do the most that we can

because this really is a situation where we are running out of time to be able to stop an irreversible situation,” Aquino told a conference of business leaders held on the sidelines of the Apec gathering. Alan Bollard, executive director of the Apec Secretariat, said it is unclear if the leaders will specifically discuss the upcoming Paris talks. But their agenda includes various initiatives such as energy efficiency, meeting a 2015 deadline to cut tariffs on 54 “green goods” including solar panels and wind turbines to below 5 percent, and promoting carbon “model cities.” Apec members are also studying ways to cope better with increasingly frequent and severe typhoons, flooding, droughts and other climate change-related disasters. Senior disaster-management officials at a meeting in the central Philippines in September introduced a new Apec framework on disaster risk reduction to guide policy coordination within Apec, help prevent disasters and improve preparedness, response, rehabilitation and rebuilding. Natural disasters cost Apec members more than $100 billion over the past decade. AP

news@businessmirror.com.ph

Defense pact. . .

become progressively more supportive of the arbitration.” Malaysia’s Deputy Prime Minister Zahid Hamidi this month questioned the motives of a “superpower” building airstrips on islands thousands of miles from its mainland, without identifying the country. Indonesia’s coordinating minister for legal, politics and security affairs, Luhut Panjaitan, said this month his country considers that China’s nine-dash claim lacks a legal basis. Chinese President Xi Jinping, also speaking in Manila, urged Apec leaders to “foster an environment of peace” in the region through dialogue and cooperation. He didn’t mention the South China Sea in his remarks. China has previously said it would never accept a South China Sea solution imposed by a third party and would only enter two-way negotiations. Its territorial claims are based on a line drawn on a 1947 map for which it gives no precise coordinates. The country also asserts an historical link to the islands. On Wednesday Obama called on China to stop its land-reclamation activities in the area. China has alarmed its neighbors over the past year with a dredging program that has dumped millions of tons of sand and coral onto seven features in the Spratly Islands, creating at least 2,900 acres of land—more than three times the size of New York’s Central Park—on the features. The US last month sailed a warship close to a reef reclaimed by China in what the Obama administration called a freedom-of-navigation operation. Two US B-52 bombers were challenged by Chinese air controllers on a recent flight, though the planes did not f ly within 12 nautical miles of China’s artificial islands. Obama on Tuesday toured the Gregorio del Pilar in Manila, a Philippine navy vessel that confronted two Chinese surveillance ships in 2012 near a disputed shoal in the Spratly chain. The vessel is a symbol of US military support for the Philippines as it got its start in the US Coast Guard before it was decommissioned in 2011 and transferred to the Southeast Asian nation. “The freedom of navigation and overflight in the South China Sea must be upheld,” Obama said. At a news briefing, Mr. Aquino said he and Obama also discussed a number of avenues of cooperation. “There is the Philippine

Continued from A8

Strategic Trade Management Act, which will enforce measures to prevent the proliferation of weapons of mass destruction from or within the Philippines, in fulfillment of our international obligations. We look forward to its implementation upon the completion of domestic procedures.” He added: “We also exchanged views on cybersecurity threats and resolved to explore cooperation in this area, knowing full well that all countries have a stake in maintaining peace and order in cyberspace, so that principles of international law can be applied. This area of collaboration with the United States can impact positively on the capacity of the Philippine government to effectively and swiftly respond to cybersecurity threats and challenges.” On the economic front, Aquino said the Philippine government welcomed the continued strengthening of trade and investment relations with the US. “I conveyed the keen interest of the Philippines in the Trans-Pacific Partnership [TPP] and we hope that the United States, as one of our most important economic partners, can assist us in the process,” he said. “The Philippines is also proud to announce that the First Millennium Challenge Corporation (MCC) Compact is nearing completion, and the Philippines was considered eligible for a Second MCC Compact,” Aquino said as he confirmed that the Philippine and US governments are now “working closely in the development of projects to be implemented under the Second Compact.” Also discussed were climatechange issues where he said “our two governments are looking forward to fruitful discussions at the [Conference of Parties] COP21 in Paris, which will start later this month.” The President explained that “as a country highly vulnerable to climate and disaster risks, the Philippines underscores the importance of all countries contributing to the global effort to address the problem of climate change for the benefit of future generations.” “Finally, President Obama and I reiterated the longstanding and multilayered engagement between our two peoples, and we pledged to ensure that our two countries work together, not only strengthen defense cooperation and increase mutual prosperity, but also to foster more meaningful ties between our people,” President Aquino added.

news@businessmirror.com.ph

The Nation BusinessMirror

Editor: Dionisio L. Pelayo • Thursday, November 19, 2015 A3

Another ex-US Coast Guard cutter, research vessel to beef up Navy fleet

By Rene Acosta

HE military is looking forward to the delivery of another Coast Guard cutter and a research vessel from the US as pledged on Tuesday by President Barack Obama, saying the ships would further beef up its maritime patrol operations.

THE high-endurance cutter USCGC Boutwell (WHEC 719) transits the San Francisco Bay as it arrives for San Francisco Fleet Week 2015. US navy photo

However, the Navy said the donation of the two ships would have to go through processes similar to the turnovers of the BRP Gregorio del Pilar and BRP Ramon Alcaraz, two former cutters that were acquired from the US under the provisions of Excess Defense Articles program. “We look forward to the realization of the express intent of President Barack Obama to transfer two additional ships to the Philippine Navy [PN]. We are aware that the grant will entail a process before the vessels are actually transferred to the Navy,” said the Navy spokesman, Marine Col. Edgard Arevalo. “The would-be additional weather high-endurance cutter will certainly bolster the PN’s capability for sustained maritime patrol, and as an additional platform for counterterrorism operations and humanitarian assistance and disaster response. The research vessel, on the other

‘Apec leaders neglected climate responsibility’

HE Philippine Movement for Climate Justice (PMCJ) on Wednesday chided Asia-Pacific Economic Cooperation (Apec) group leaders for failing to include climate in the ongoing meeting in Manila. The group said the ongoing meeting has become a venue for developed countries to neglect their responsibility to address climate change. A broad coalition of environmental groups and advocates of clean energy, PMCJ, said the 20 years of policies and agreements agreed upon by Apec member-economies failed to consider climate change, the biggest threat to human existence. In a statement, PMCJ National Coordinator Gerry Arances said: “Economic integration brought about by institutions like the Apec has only furthered the same production and consumption system that perpetuates a business-asusual track.” He said that, with rich, industrialized countries, like the US, Australia and Japan setting the pace for discussion, developing countries, like the Philippines, are arm-twisted into supporting the position of the number polluters instead of its own vulnerable peoples.” Arances said the surge of coal projects in the country reflects the support espoused by Annex 1 members of the Apec, like Canada, Japan and Australia, which are among the leading advocates of coal and fossil-fuel dependency. “With 27 coal power plants on the way to operating in the country, the country will soon be among those with the most coal-based projects in the world,” Sanlakas Secretary-General Aaron Pedrosa, head of the PMCJ Energy Working Group, said for his part. “This is despite the global trend of countries moving away from coal, one of the leading causes of greenhouse-gas emissions, as well as the opposition it has gained from the world’s major religions, including the Roman Catholic Church and the Islamic and Buddhist communities.” PMCJ convener Lidy Nacpil emphasized the failure of the Apec member-economies to commit to ambitious targets in their respective individual nationally determined contributions (INDCs) in reaching 1.5-degree-Celsius global temperature target for 2030. “Taken together, the INDCs submitted by countries around the world will only to result at least 3 degrees Celsius according to the United Nations,” Nacpil added. “This is not even enough to satisfy the low 2-degree-Celsius target set in the previous climate talks.” Nacpil, who also serves as the regional coordinator for the Asian Peoples’ Movement on Debt and Development, challenged the Aquino administration to espouse the interest of the Filipino people in venues discussing the future of the climate, especially in the climate talks. Jonathan L. Mayuga

hand, will enhance our capability to conduct hydrographic surveys and search for sunken ships or aircraft,” Arevalo added. On Tuesday Obama, who is in the country attending the Asia-Pacific Economic Cooperation summit, pledged to turn over two ships to the Armed Forces to secure the country maritime resources and increase patrols, particularly at the West Philippine Sea. “I can announce that we intend to transfer two additional ships to the

Philippine Navy, a research vessel to help man its territorial waters, and another Coast Guard cutter to bolster the Navy’s ability to conduct long-endurance patrols,” Obama said. Obama added that the delivery of the vessels forms part of the US larger plan to increase maritime security assistance to its allies, seeing that “more capable navies and partnership with the United States are critical for the security of this region.” Obama did not identify the ships that

will be transferred to the Philippines. However, the US said these vessels are the USCGC Boutwell and the research ship RV Melville. It said that Boutwell should provide the Philippines the ability to maintain greater maritime presence and patrols throughout its exclusive economic zone, while the research vessel would support naval research and law-enforcement capabilities. The two ships would be given under an increased US maritime assistance to

countries in Southeast Asia, of which the Philippines is the largest recipient. The maritime assistance to the Philippines is largely focused on building the training and logistical base of the Navy, Coast Guard and Air Forces to conduct operations within waters “off the Philippines’s coasts.” The assistance is in the form of vessel donations, naval fleet upgrades, communications equipment and aircraft procurement. Both ships were built in 1967.

Econ

Business

A4 Thursday, November 19, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

PwC rates 2 key cities as ‘least sustainable, livable’

anila and Cebu ranked among the “least sustainable and livable cities,” registering at the bottom half of 28 cities polled in the Asia-Pacific region, according to a report by the PriceWaterhouseCoopers (PwC) released during Tuesday’s Asia-Pacific Economic Cooperation (Apec) CEO Summit.

The PwC announced the results of its first Building Better Cities study on Tuesday, which ranked 28 highly urbanized cities, across the 21 Apec economies, according to five broad categories: culture and social health, connectivity, health and welfare, environmental sustainability, and economics. The report measured not just the “tangibles,” such as housing, hard infrastructure and population, but other factors such as inclusion, cultural vibrancy and toler-

ance—in line with the report’s theme of measuring competitiveness, sustainability, and livability. The study was precipitated by the massive wave of urbanization happening throughout the Asia-Pacific region, a development that is seen to have ramifications globally—in terms of infrastructure, resilience and livability trends. Apec constitutes 39 percent of the world’s population and 46 percent of global trade.

Manila notched the 22nd place in the report, scoring the lowest in the field of health and welfare, and environmental sustainability categories. It’s highest score was in cultural and social health, notching the 14th place among the 28 cities for that particular category. Cebu ranked lower in the report, getting the 26th place due to poor scores in the connectivity and health and welfare categories. It’s only strong point, based on

the report, is in culture and social health, as well, getting the 17th spot among the 28 metropolises. Cultural and social health pertain to the environment of inclusivity of a city, encompassing the transparency of the government and arts and cultural vibrancy. Connectivity refers to hard infrastructure like road access, as well as digital ecosystems. Environmental sustainability measures a metropolis’ vulnerability to air pollution, and renewable-energy availability, among others. The PwC report was done in collaboration with the Apec Business Advisory Council, with information and data collected over two quarters this year using three main sources: development organizations, national statistics institutions and municipal administrations. Toronto, Vancouver and Singapore emerged as the top 3 cities in Apec to live and do business according to the PwC study. Catherine N. Pillas

Taiwan eyes to increase trade with Philippines

aiwan is seeking to expand trade with the Philippines as it called for the negotiation of more business arrangements that will boost economic exchanges between the two sides. Although the Philippines and Taiwan already share “a very close relationship” in terms of economics, culture, tourism and people to people exchanges, former Vice President of Taiwan Vincent Siew hopes to have more arrangements with Manila to bolster trade. “We are seeing a lot of investment from Chinese Taipei to the Philippines. So we

are sure that this kind of development will continue, and we will see that our bilateral relations will grow stronger in the future. Of course this depends on whether the two governments, undertaking measures that promote investment and trade,” Siew told a news conference on Tuesday night in Makati City. Siew is in Manila as the representative of Taiwan President Ma Ying-jeou to the AsiaPacific Economic Cooperation (Apec) summit from Wednesday until Thursday. He is joined by leaders of 20 other Apec member-

economies, which include US President Barack Obama, Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping. Siew recalled that 25 years ago, Taiwan was the one who proposed to the Philippines to turn the former US naval base of Subic Bay in Olongapo City into an economic zone, when Manila lawmakers voted to terminate its 50-year bases agreement with the US in 1991. “I remember that because I was the minister of economic affairs, and I remember that we proposed this plan and invested intensively in this project so that Subic Bay

becomes how it is today,” Siew said. Manila does not have diplomatic ties with Taiwan, a democratic self-governing island that has been separated from the Chinese mainland since 1949, but still claimed by China as part of its territory. Not a single member of the Association of Southeast Asian Nations, of which the Philippines is a member, has forged diplomatic relations with Taiwan in deference to the One-China Policy. China objects to any foreign contact that appears to treat Taiwan as a sovereign government. PNA

briefs lawmaker seeks to regulate nrw charges on water bills A leader of the House of Representatives has recently filed a measure that seeks to regulate additional tariffs on water bills. House Bill 6223, authored by Deputy Speaker and Liberal Party Rep. Sergio A.F. Apostol of Leyte, seeks to secure the affordability of water and ensure that charges imposed on consumers are fair. Under the bill, additional tariff added to water bills due to nonrevenue water (NRW) should be properly regulated and should not be more than 10 percent of the total percentage of NRW for each month. The NRW is defined as “the difference between system input volume and billed authorized consumption,” which is composed of apparent water losses and real water losses. “The National Water Resources Board should regulate the additional charges of water companies on NRW to its consumers and should ensure that the augmentation of the water bill due to NRW would not go beyond 10 percent of the NRW per month,” the measure said. Jovee Marie N. dela Cruz

idfi eyes release of dinagyang tickets by middle of dec

ILOILO CITY—Organizers of the 2016 Iloilo Dinagyang Festival are eyeing to release stage tickets by the middle of December. In its regular meeting, held every Wednesday, the Iloilo Dinagyang Foundation Inc. (IDFI) announced that preparations are now being undertaken to have the tickets printed and ready for interested spectators around middle of next month. Compared with the 2015 festival, however, IDFI sets a little increase in ticket prices. Tickets for the right wing of the Iloilo Freedom Grandstand will be sold at P1,500, while the right and left wing extensions will be sold at P1,300 each. PNA

nomy

sMirror

Thursday, November 19, 2015 A5

PPP Center ponders next move after termination of POC deal

By Cai U. Ordinario

he Public-Private Partnership (PPP) Center is now evaluating the financial and legal consequences of the termination of the build-operate-transfer (BOT) agreement between the government and Megawide World Citi Consortium Inc.

Megawide was the winning bidder for the P8.69-billion modernization of the Philippine Orthopedic Center (POC) PPP project. PPP Center Executive Director Cosette V. Canilao said the result of the evaluation will be included in a memo that the center will issue to the President and the economic cluster. “The notice of termination was sent to the DOH [Department of Health] copy furnished

the PPP Center. The PPP Center is preparing a memo to the President and economic managers regarding the process, remedies and consequences under the contract. It’s up to the DOH how to move this forward,” Canilao said. In a disclosure to the local bourse, Megawide said it is terminating the BOT agreement due to the delay in the awarding of the certificate of possession.

“This is a decision driven by the two-year delay in awarding of the certificate of possession, among others, and not one that was made lightly,” Megawide said in a news statement. “We participated in the tender with the belief that our fellow Filipinos deserve an efficient hospital facility to complement the care and service already shown by the staff of POC,” it added. The project involves the construction of a 700-bed capacity super-specialty tertiary orthopedic hospital to be located within the National Kidney and Transplant Institute Compound along East Avenue, Quezon City. The concessionaire will design, build, finance, operate and maintain the facility until the end of the concession period, and then transfer the hospital to the DOH. The concession period is 25 years. Prior to the termination of the agreement, the project was in the process of procuring independent consultants and was awaiting the issuance of the certificate of possession for the project site.

Double-decker jeepney

Photo shows one of the double-decker jeepneys being used to ferry Asia-Pacific Economic Cooperation (Apec) delegates and foreign journalists during the ongoing Apec Leaders’ Meeting in Manila. PNA

PSALM board eyes negotiated sale ULGPP’s remaining bulk capacity By Lenie Lectura

he Power Sector Assets and Liabilities Management (PSALM) board has decided to proceed with a negotiated sale of the Unified Leyte Geothermal Power Plant’s (ULGPP) remaining contracted capacity. In a text message, PSALM President and CEO Lourdes S. Alzona said “privatization of ULGPP bulk is through negotiated sale before

end of this year.” The PSALM earlier declared the September auction as a failure after only one bidder—the Unified Leyte Geothermal Energy Inc. (ULGEI)— submitted a bid. “We may have a negotiated bid but we are working on some compliance requirements,” Alzona had said. On Wednesday the PSALM official said the board recently gave its go signal for a negotiated sale instead of conducting

another auction. ULGEI has already expressed its willingness to negotiate directly with the PSALM for the ULGPP Bulk Energy. The PSALM earlier reported that there were four prospective bidders eyeing the ULGPP Bulk Energy, namely, SPC Power Corp., Therma Central Visayas Inc., Trans-Asia and ULGEI. However, on ly ULGEI a nd Trans-Asia Oil and Energy De-

velopment Corp. complied with the documentar y deliverables and qualified for the bidding. In the end, only ULGEI participated in the bidding activity. ULGEI is a subsidiary of Lopezled Energy Development Corp. The ULGPP is composed of the 125-megawatt (MW) Upper Mahiao plant; the 232.5-MW Matlibog plant; the 180-MW Mahanagdong plant; and the 51-MW optimization plants.

ULGEI earlier won the auction of ULGPP’s “bulk” contracted capacity but it withdrew its bid because the assets were damaged by Supertyphoon Yolanda. Aside from the “bulk” capacity, the PSALM also auctioned off the asset’s “strips” of capacity. The following won: ULGEI, FEDC Utilities Inc., Trans-Asia and Aboitiz Energy Solutions Inc. each bagged the rights for 40 MW. While Good Friends Hydro Re-

sources Corp. was awarded with 20 MW; Vivant Energy Corp., 17 MW; and Waterfront Mactan Casino Hotel Inc., 3 MW. Under the contract, they will manage the contracted output of the power plant. The output could be traded on the Wholesale Electricity Spot Market. A total of 200 MW of strips a nd bu l k c apac it y f rom t he ULGPP was auctioned of f in November 2013.

A6 Thursday, November 19, 2015 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Obama’s commitment to maritime security

resident Barack Obama’s pledge to reinforce security in the contested West Philippine Sea (South China Sea) upon his arrival in Manila on Tuesday for the Apec summit is good news for the country and will go a long way to bolster America’s allies in the region against China’s expansionist moves.

A subsequent announcement that the US government would give two additional ships to the Philippine Navy aims to focus attention on Obama’s efforts to strengthen alliances in Southeast Asia. Thus, Obama’s first order of business in Manila was a visit to the BRP Gregorio del Pilar, a onetime US-owned warship. The visit to the warship meant to call attention to a defense cooperation agreement cemented last year that gives the US new access to some Philippine military bases. In the presence of Filipino and American troops, Obama proclaimed that the US “has a treaty obligation, an ironclad commitment to the defense of our ally, the Philippines.” He underscored “our shared commitment to the security of the waters of this region and to the freedom of navigation.” When the US recently sent its warship, the USS Lassen, to sail close to one of China’s artificial islands in the South China Sea, certain quarters view the exercise as a challenge to Beijing’s territorial claims in the contested waters. No wonder China, through Foreign Minister Wang Yi, was quick to issue a warning: “We advise the US side to think twice before action, not to conduct any rash action and not to create trouble out of nothing.” US Defense officials confirmed that the USS Lassen “conducted a transit” within 12 nautical miles of Subi Reef in the Spratly Islands. The operation put the destroyer within an area that would be considered Chinese sovereign territory if the US recognized the man-made island as being Chinese territory. The message was clear—the US has ignored China’s excessive maritime claims because it knows the cost of doing nothing on the fiercely contested South China Sea. China’s expansionism has seen economic dividends for the giant nation. For example, from 1978 to 2013, China’s fishery production jumped from 5 million tons to 60 million tons. In 2013 it accounted for 17 percent of the global catch—and nearly half of the South China Sea catch worth $21 billion. With its heavily polluted coastline, China has been encouraging its fishermen to venture further out to sea through generous fuel and boat-building subsidies. Reports say that Chinese fishermen can tap a “special fuel subsidy” to fish waters around the disputed islands in the Spratlys. The official assistance not only produces larger catches, but takes advantage of China’s massive fishing fleet to extend its territorial claims. In 2012 the South China Sea accounted for around 12 percent of the global seafood catch. With China’s subsidy to Chinese fishermen, those waters could lose 60 percent of their stocks in 30 years. Preventing that disaster requires multilateral talks and regional agreements on resource sharing. Given current tensions, however, the mightiest will continue to lord it over. And this is where other claimants, like the Philippines, need the help of a superpower like America to balance the scale.

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OUTSIDE THE BOX

ith all the happy talk from the participants at the 2015 Asia-Pacific Economic Cooperation (Apec) meeting, one thing is clear. Political leaders across the globe live in a fantasyland where reality is not as important as winning elections. President Aquino discussed with Chilean President Michelle Bachelet prospects of increasing economic ties with her country in the hopes of more bilateral trade. In one way, this is a good choice and in another, a bad choice for a Philippine trading partner. South American countries—with the major exception of Brazil—are doing fairly well with their economic growth. However, Chile is seeing a declining trend from 5.8-percent annual growth in 2011 to the current 1.9 percent. Government finances are still in order and, in some aspects, better than the Philippines but are also showing a negative trend. However, there is a disconnect between the feel-good rhetoric of how wonderful increased trade can be and the reality of that trade itself. Chile exports $18 billion of copper cathodes, commonly used in making wiring, which is in great demand in industrialized economies like China, not the Philippines. Further, numbers 2 and 3 on Chile’s export list are copper ore and unrefined copper.

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Note that the Philippines has the largest potential copper mine in Asia. We do not need Chilean copper products. After copper, Chile exports wine and grapes. We are not going to be an important export market for Chile. On the other side of the trade equation, Chile imports oil products, liquefied petroleum gas, and to a much lesser extent, automobiles, equipment for the telecommunications industry and natural gas. Which of the significant import needs of Chile can the Philippines help supply? The answer is none. Which of the significant import needs of the Philippines can Chile help supply? The answer is none. But the government tries to make a big deal out of trade and business agreements between the two countries. The Apec meeting is important primarily for the leaders and their staffs to sit down and become more familiar with each other. This can be valuable in the long run as even on a global level,

personal relationships are significant. However, net results of these meetings in terms genuine Apec economic growth reveal the truth. This is the dishonest hype. Even if the Apec agreements are nonbinding, the past initiatives have enabled Apec’s combined GDP to almost double to $31 trillion in 2013, from $16 trillion in 1989. Further, our own Filipino “experts” contend, “the main reason for this is the steady reduction in trade barriers and tedious regulations. Apec’s total trade because of reduced tariffs increased over seven times to $22 trillion from 1989 to 2013, while the rest of the world grew only 5.4 times during the same period.” Note what is missing from the assessment of this success. China—an Apec member—had a GDP of $454 billion in 1989. In 2013 that has increased to $9.5 trillion. Therefore, in 1989, China accounted for 2.8 percent of Apec’s total GDP, and in 2013 the percentage went up to 30 percent. In other words, if Apec’s trade initiatives are such a great success, it is China that has driven that success and has benefited the most. Remember, China has been repeatedly accused of being a currency manipulator, a nation that uses near-slave labor, protectionist trade restrictions, and whose government is continuously accused of human-rights abuses. And about all the trade Apec programs have generated, since 1989, China’s exports value has increased 8,000 percent. Apparently, Philippine government officials are unaware that as China took advantage of all of the wonderful

Apec: Global synergy in action

Dennis D. Estopace Eduardo A. Davad Nonilon G. Reyes

BusinessMirror is published daily by the Philippine Business Daily Mirror

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Apec’s real winner: China

Ariel Nepomuceno

DECISION TIME

N 1989 the Asia-Pacific Economic Cooperation (Apec) was formed among member-nations to serve as a forum to discuss free trade, market liberalization and promotion of investment and economic integration. Since it is considered a post-Cold War reaction to the proliferation of trading blocs in various regions around the globe, the US and other developed countries played a central role in supporting its growth as an organization. This also explains why Apec is supportive of the Group of 20 Framework for Strong, Sustainable and Balanced Growth in the Asia-Pacific region. From Day One of its formation, Apec’s fervent hope is that stronger and closer economic linkages will ultimately result to financial prosperity that can benefit its member-states.

Historic role to cooperate

From its original 12 members way back 1989, Apec is currently composed of 21 member-economies: Australia, Brunei Darussalam, Canada, Chile, People’s Republic of China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Chinese Taipei, Thailand, the US and Vietnam. Per Apec statistics, the member-states now represent 40 percent of global population, over 40 percent of world trade, and over

50 percent of global GDP. If these nations indeed get their act together and fulfill Apec’s objectives by implementing the action plans, Apec can wield huge economic and political power. Historical events prove the resilience of this region, no matter how difficult and painful the adversities it had to face.

Host of nations

Our country is hosting the Apec forum this week and President Aquino had given 100-percent government backing for it and galvanized the private sector to contribute to its success. The 2015 theme of “Building Inclusive Economies, Building a Better World,” aims to showcase the region’s great achievements in 2014 to “advance regional integration, economic reform and innovative development, and infrastructure investment and comprehensive connectivity.” In several of his pronouncements, the President

mentioned that more integrated, inclusive economies have supported average GDP growth of 6.3 percent between 2010 and 2013, and 5.8 percent over the first three quarters of this year for the Philippines, uplifting its 100 million people. Where economic progress leads to better lives and when people are fueled to work more for economic goals, this leads to a cycle of more growth and continuous development, according to the President.

Challenges

Undoubtedly, there are many lingering doubts about the real measure of success for Apec as an international trade organization. Principally, similar organizations of the same nature, the members share common economic objectives and policy initiatives, but their big banner activities do not result to binding and enforceable agreements, so the states still pursue their own interests, which are often inconsistent or even violative of the principles agreed upon during their yearly meetings. Because of its loose, consensus-focused organizational structure, Apec’s goals may be well-meaning but are ambiguous. Some critics say that there are too many interests, overlapping working groups, duplicative projects within it and without significant resourcing and these result to misprioritization. The lack of rules and absence of enforcement mechanisms for operationalizing the decisions of the member-states frustrate its action plans. Commitments of members are still wanting and there is evident lack of political support for trade and investment liberalization, the centerpiece of Apec’s

increase in Apec trade, the Philippines has seen its merchandize exports from garments to Christmas ornaments virtually destroyed. In 1989 when Apec was created, the Philippines was the 41st largest economy in the world as measured by total GDP. In 2013 the Philippines was the 40th largest economy in the world. Certainly, successive Philippine governments did little to nothing to exploit any trade advantages the Philippines might have had. Even “Apec Philippines 2015: Building Inclusive Economies, Building a Better World” is meaningless feel-good political rhetoric. China took 250 million people out of poverty, not through “inclusive growth” policies but through “total growth” policies. China averaged 10.88-percent annual GDP growth since 1989. We knew nearly 20 years ago that the Philippines needed an average of 7percent annual growth preferably for a decade to “eliminate” poverty. Our growth has averaged 5.09 percent from 2001 until 2015. With the presidential election about six months from now, there is a tremendous amount at stake to choose someone who can actually do something rather than talk about doing something. Inclusive growth is a nice phrase. Genuine growth requires genuine work. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

creation. Importantly, rapid economic growth and globalization have a frightening twin issue—that of security. The incessant movement of people, money, goods, services and technology go hand in hand with more criminal acts and terroristic activities which involve drugs, white slavery and illegal drugs across jurisdictions. The great divide between issues about economics and security no longer exists. It is time that this be tackled head on by the member-states. Energy scarcity, global health outbreaks, climate change and other present-day concerns should, likewise, be urgently addressed.

Hope in the future

But amid all these criticisms, this week’s Apec forum is a superb chance for the Philippines to show its economic, social and political gains in the last few years. We should not miss the prospects of connecting, networking, building positive relationships and ardently marketing our nation to the international community who has been quite impressed with our recent successes despite daunting challenges. Yes, it’s time to be proud of the good reputation that the Philippines has been slowly building up with the help and wealth of its talented, vibrant, hard working and compassionate people, be they overseas Filipino workers, businessprocess outsourcing workers, young professionals, laborers in the agricultural, industrial or commercial or service sectors and even our government employees. Indeed, let us celebrate them as we welcome our investment and trading partners at our doorsteps.

Opinion BusinessMirror

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DST on advances between The King in control branch and head office Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Fulvio D. Dawilan

Tax law for business

N 2011 the Supreme Court ruled in one case that advances between and among related companies are subject to the documentary stamp tax (DST) imposed on loan agreements under Section 180 (now Section 179) of the Tax Code. According to the Court, the instructional letters, as well as the journal and cash vouchers, evidencing the advances extended by one company to its affiliates qualified as loan agreements upon which documentary stamp taxes may be imposed. Many taxpayers do not agree with the imposition of DST on related party advances, obviously because this entails additional tax cost. Following the SC decision, some taxpayers changed the way they fund the working capital requirements of their affiliates. But advances among related parties cannot be avoided. So the imposition of DST is not also unavoidable. And for as long as the law is not changed or a different judicial interpretation is made, the tax authority will always apply it in its favor. With the SC decision as its reference, the tax authority became active in pursuing DST on intercompany advances. The Bureau of Internal Revenue (BIR) even issued Revenue Memorandum Circular 48-11, circularizing an excerpt of the decision and enjoining its employees engaged in the audit and review to assess deficiency DST, if warranted, on these kinds of transactions. It is not, thus, unusual to see an assessment imposing DST where among the taxpayer’s transactions are related party advances. Does this apply also to transactions between a head office and a branch? In a case recently decided by the Court of Tax Appeals (CTA EB Case 1196, November 11, 2015), the facts would indicate that the BIR assessed DST on the advances made by a Philippine branch to its head office based outside the Philippines. In contesting the assessment, one of the arguments raised by the taxpayer is that it cannot issue a debt instrument to its head office because being a branch office, it does not have a separate legal personality from its head office. In other words, under the single entity concept, a foreign head office is the same as its Philippine branch, and therefore the Philippine branch or the head office cannot engage in taxable transaction with the other, they being one and the same juridical entity. The Court disagreed with this argument by referring to the old case of Marubeni Corp. v. Commissioner of Internal Revenue and Court of Tax Appeals, GR 76573,September 14,1989. In that case, it was held that the general rule that a foreign corporation is the same juridical entity as its branch office in the Philippines is based on the premise that the business of the foreign corporation is conducted through its branch office, following the principal-agent relationship theory. It is understood that the branch becomes its agent here. So that when the foreign corporation transacts business in the Philippines independently of its branch, the principal-agent relationship is set aside. The transaction becomes one of the foreign corporation, not

Many taxpayers do not agree with the imposition of DST on related party advances, obviously because this entails additional tax cost. Following the SC decision, some taxpayers changed the way they fund the working capital requirements of their affiliates. But advances among related parties cannot be avoided. So the imposition of DST is not also unavoidable. of the branch. Consequently, the taxpayer is the foreign corporation, not the branch or the resident foreign corporation. Corollarily, if the business transaction is conducted through the branch office, the latter becomes the taxpayer, and not the foreign corporation. On this basis, the CTA also ruled that the general rule that a foreign corporation is the same juridical entity as its branch office in the Philippines cannot apply for purposes of imposing the DST. The cash advances and intercompany trade payables and receivables are well within the purview of debt instruments under Section 179 of the 1997 NIRC, as amended. The implication of this is that if a Philippine branch of a foreign entity enters into cash-advance transactions with its head office, the Philippine branch is doing so in its own capacity as a separate taxable entity. As such, the transaction is subject to DST. Note, however, that this should apply only to transactions between a foreign head office and a Philippine branch or between a Philippine head office and a foreign branch. It should not apply to a transaction between a branch and head office, which are both in the Philippines. In the case of the latter, there is a specific provision in Section 199(i) of the Tax Code, which exempts from DST the interbranch or interdepartmental advances within the same legal entity. The author is a senior partner of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services (WTS) Alliance. The article is for general information only and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at fulvio.dawilan@bdblaw.com.ph or call 403-2001 local 310.

Ending Islamic State Inc.

hat it means for a European nation and member of North Atlantic Treaty Organization to declare war against a stateless band of terrorists is an interesting and important question, made urgent by Islamic State’s (IS) brutal attack on Paris on Friday. As Europe and the West weigh their military and political responses, however, they should also avail themselves of a simpler strategy: Follow the money. Raising cash, it turns out, is something IS excels at. It pulls in up to $10

million a month from oil smuggling. It has profitable side businesses in ransoming hostages, selling sex slaves and looting antiquities. And it specializes in shaking down locals for protection money and taxes. This plunder gives the group a lot of advantages. It can typically pay fighters more than rival terrorist factions, and—unlike their former colleagues in al-Qaeda—the terrorists of IS don’t have to rely much on foreign benefactors or the international financial system. The group can also fund the

he Lord is king girt about with strength; He is from everlasting (Psalm 93:1, 1-2, 5). Jesus said, “My kingdom does not belong to this world...I came into the world to testify to the truth” (John 18:33b-37).

Your decrees are worthy of trust AS a hymn acclaiming the kingship of God, Psalm 93 is a confession of faith and hope in the establishment of God’s dominion over the world. “The Lord is king, He is robed in majesty.” He is depicted as a majestic and victorious king, reigning in total control over the whole world. He is girded with power as the Creator who vanquished primeval chaos and established order in the universe. The world is firmly established because the Lord is its foundation. And God’s own throne and control is from the very beginning of the world and is eternal. It can be trusted to endure, because the Lord is from everlasting. The assurance and trust based on God as the creator and ruler of the universe points to the trustworthiness of His decrees. The law given by the King to His people represent the order He maintains for all; the stability in the universe inspires trust and

reliance on the ordinances from the Lord. Coming from God who conquered chaos and who reigns from heaven, the law and its order are parts of God’s kingship and should be characteristic of His kingdom. And true of that kingdom as well is the presence of the Lord in His house in the midst of His people, in His temple as a copy of His heavenly dwelling, where holiness resides. For in His house the uniqueness of God as creator and ruler is celebrated forever more and His decrees remembered and revered.

Are you the king of the jews?

The kingship of Jesus, the face of God in the world, is the concern of Pilate’s interrogation. The title “King of the Jews” means one thing to the Jewish accusers of Jesus and another to the Roman official set to judge Him. For the Jewish leaders, it is the messianic designation for the descendant of David who will

Thursday, November 19, 2015

inaugurate the kingdom of God, therefore as charged against Jesus a blasphemous messianic pretension; it is a religious matter with political implications. For the Roman governor, the title implies a political claim dangerously challenging the absolute Roman rule; it is political issue with religious dimension. Pilate is understandably wary of this case brought to him by the religious leaders of the Jews. What do they really want? Is he merely being trapped in their own intramural quarrel? Uprightly, Pilate asks Jesus to hear His side, to have something from Him to begin with. He questions Jesus three times as required by law to acquit the defendant because clearly the messianic claim is what is on trial. The governor is not a Jew to get involved with the religious issue, and he finds Jesus nonpolitical. Jesus obliquely affirms that He is a king but not of this world, that is why He is not being defended by His followers the way matters of this world are defended by force and violence and deception.

Everyone belonging to the truth listens to Me

But His kingdom, though not of the world, is in the world because He is in the world to testify to the truth of God. His kingship is the human face of the kingdom of God and therefore it is founded on the truth. And “everyone who belongs to the truth listens to My voice”;

Asia-Pacific century at a crossroads By Dr. Alan Bollard | Executive Director of the Apec Secretariat

His followers are those who identify with Him in the commitment to bear witness to the holiness of God as the Lord of all. Jesus is king in the service of the truth. His mission is to inaugurate in the world the reign of God, which clearly challenges the religious expectations and actuations of many, as well as the truth in the political designs and realities of the world. The kingship of Jesus concerns the relationship that must obtain between the reign of God and anyone exercising power and authority over anyone in this world. Jesus proclaims Himself as the bearer of that quality of rule founded on the truth of God: the God of life and truth, of holiness and grace, of justice and peace. The kingship of God is verified in the world where power is coupled with mercy, truth is accompanied by liberating joy, and diversity finds fullness in unity. And everyone can bear witness to this truth of divine reign when, amid the evil in this present world, we dare to hope and strive for victory against racism and discrimination, exploitation of the poor and the weak, greed and violence. Alálaong bagá, for the feast of Christ the King, we need to divest ourselves of the cynicism of “What is truth?” Jesus Christ is the truth of God; His kingship of love and selfsacrifice, of service and compassion is for us the only way.

The 21 Asia-Pacific Economic Cooperation (Apec) member economies they captain—home to three billion people and encircling the world’s largest ocean but varying greatly in size, development, and political and cultural orientation— are the forefront of this movement. They exemplify the enduring power and potential of working together to build open, interconnected markets. In just 25 years, joint efforts in Apec to lower tariffs and barriers to the passage of people, goods and capital at borders have boosted trade and growth among economies ranging from the very big in the United States, China and Japan, to the small and advanced such as New Zealand and Singapore, to the emerging like Peru, Papua New Guinea and Vietnam. Spurred by the advantages of greater open integration, Apec members nowadays account for about half of global trade, 60 percent of total GDP and much of the world’s growth. Out of these dynamics, hundreds of millions of people have moreover been lifted out of poverty and into the ranks of the middle class—arguably the most significant economic success in history! Such progress has created enormous opportunity for businesses to sell their goods and services to a new generation of consumers in the Pacific Rim. It is in turn driving Apec members to push for new, increasingly large trade agreements

such as the Trans Pacific Partnership, Regional Comprehensive Economic Partnership and Pacific Alliance, and the ultimate establishment of an Apec-wide Free Trade Area of the Asia Pacific, or FTAAP, that builds off of them. The slowdown in trade growth that has put Asia-Pacific economies on a lower growth trajectory of late has added to the fervor of this pursuit. Yet, there is no guarantee that a trade-driven growth formula will work for the future without adapting to the changing times. This means addressing middle- and high-income economy challenges that have sharply come to the fore, inequality being high among them. The record of trade agreements on this issue is not so impressive. Though equality between economies is much improved, within economies there are significant groups who have benefited fairly little from globalization. Positioning small businesses to play a greater role in cross-border production and supply chains could do a lot to widen the fold. Collectively, small and medium enterprises account for over 97 percent of all firms and more than half of employment in Apec economies but a low proportion of their exports—less than 25 percent in Indonesia, Japan, Malaysia, Singapore, Chinese Taipei and the US, and below 15 percent in Australia, Chile and Peru.

Here and now there are substantial opportunities for small businesses to partner with larger companies in the conception, design, production, marketing, distribution and sale of value-added products—from blue jeans to commercial jets. Ensuring that small firms know where they exist, how to take advantage of them and have access to capital needed to proceed is key and a deepening focus of collaboration between Apec members and the private sector. At the same time, people in the region must be sufficiently empowered to take advantage of new economic opportunities. This means strengthening human capital development so that labor forces are compatible with the needs of 21st century economies. Examples include work in Apec to make it easier to pursue education and skills training abroad, like the creation of new scholarships and internships, and the targeting of one million university student exchanges in the region annually by 2020—25 percent higher than current levels. The promotion of startups and women’s entrepreneurship through mentoring, social-support mechanisms and e-channel growth, as well as enhanced mobility for people to legitimately cross borders—building on the Apec Business Travel Card program— is an additional agenda focus.

There is also the need to bolster physical linkages across the regional economy, particularly in emerging markets where rapid change, including rising urbanization, are set to continue over the coming decades. Bridging infrastructure gaps is a major point of attention in Apec, with emphasis on the facilitation of public-private partnerships or PPPs to help meet the nearly $10 trillion in required project investment just in the next decade. This includes roads, rail, ports and airports along with sustainable power generation, water and waste management, and digital networks to accommodate the region’s next phase of growth and development. Parallel work in Apec to improve access to environmental goods, like solar panels and wind turbines through tariff cuts, and support their market-based deployment is also part of the equation and can help to protect the environment and fight climate change while creating jobs and growth. Strengthening resilience against the increasing threat of natural disasters due to climate change, food security, protection against pandemics and indeed counter-terrorism, as well as structural reforms to steer economies more effectively, is further crucial to mitigating the shifting risk calculus and potential for new shocks within the system. The inclusive economies theme set by the Philippines as Apec Chair in 2015 and embraced by members reflects these priorities. Actions being taken under them will need to be built upon this week and in the years to come to ensure the Asia Pacific can continue to lead the world in economic advancement in an increasingly challenging landscape and in ways that can make life better for all.

rudiments of a civil service, with some totalitarian flourishes, to cement its authority in areas it controls. All of which means that defeating IS will require applying financial pressure, as well as military might. There are some hopeful signs. The US military is bombing the group’s oil fields in eastern Syria and belatedly demolishing its smuggling trucks, which will hurt its bottom line. Many of IS’s financial supporters have been hit with sanctions. International efforts to investigate and cut off its cash—such as

the Counter-ISIL Finance Group—are also making some progress. But a few other steps would help. Countries should stop paying ransoms to IS, for one thing, and encourage insurers to do the same. Intelligence agencies should better coordinate their investigations of the middlemen who facilitate its oil sales. Banks and auction houses must be more alert to cutting off trade in pilfered antiquities. Neighboring countries—notably Turkey—still need to do more to stop the flow of illicit money and goods

through Iraq and Syria. And Iraq’s central bank must crack down on financial firms that funnel US dollars to IS and its associates. The group’s expansive extortion apparatus presents a much more complicated problem. Dismantling it will require weakening its grip on local populations through air strikes, diminishing its support among disaffected Sunnis and stabilizing the surrounding region after years of brutal warfare. In other words, it will require a comprehensive military and political solution—

and comprehensive solutions are not abundant in Syria these days. The good news is that, while it is still capable of great harm, IS almost certainly cannot sustain its fund-raising. It is waging a multifront war and attempting a global jihad while also trying to pick up the trash, fill the potholes and keep the electricity on for millions of people. Its dominion is economically devastated. As other countries get more aggressive in squeezing its funding, a day of reckoning is visible on the horizon. Bloomberg View

lobal prosperity in the 21st century will be increasingly shaped by the capacity of the rapidly transforming Asia Pacific to ensure next-generation growth, facilitated by the integration of its economies that is today headed towards new and encouraging frontiers. The region’s leaders are convened this week in Manila to chart the next step, undeterred by the shadow of terrorist attacks that seek to corrupt it.

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A8 Thursday, November 19, 2015

www.businessmirror.com.ph

Aquino, Obama reaffirm defense CEOs MORE UPBEAT ABOUT INTEGRATION pact amid Chinese aggression

By Butch Fernandez

resident Aquino and US President Barrack Obama on Wednesday reaffirmed their decades-old commitments under the Philippines-United States Mutual Defense Treaty amid continued Chinese aggression in the region. In bilateral talks on the sidelines of the ongoing Asia-Pacific Economic Cooperation (Apec) Leaders’ Summit in Manila, Mr. Aquino cited Obama for his country’s foreign military financing assistance program, as well as US support in the construction of the National Coast Watch Center (NCWC). “President Obama and I, likewise, had a discussion on maritime security, including on the maritime disputes in the region, and how international law should remain the framework for behavior of all countries and for the peaceful resolution of disputes,” President Aquino said, adding that he also took the opportunity to reiterate the Philippine position “that the freedom of navigation and overflight in the South China Sea must be continuously upheld, consistent with international law.” For his part, Obama affirmed the “US rebalance to the Asia Pacific is rooted in our treaty alliances

including with the Philippines.” “Our Enhanced Defense Cooperation Agreement, when implemented, will bring our militaries even closer together, and we are especially committed to ensuring maritime security in the region, including freedom of navigation,” he said. The US president, in his visit with members of the Armed Forces of the Philippines on Tuesday, confirmed that America is “increasing our maritime security assistance to the Philippines to record levels, including two new vessels.” “We discussed the impact of China’s reclamation and construction activities on regional stability,” Obama said, adding, “we agreed on the need for bold steps to lower tensions including pledging to halt further reclamation, new construction, and militarization of disputed areas in the South China Sea.” Siding with President Aquino’s position, Obama asserted that

“disputes need to be resolved peacefully, that’s why the US support the Philippines’s decision to use arbitration under the UN Convention on the Law of the Sea to peacefully and lawfully address differences.” At the same time, Mr. Aquino a lso welcomed the proposed Southeast Asia Maritime Security Initiative on assistance to help the Ph ilippines improve its maritime security capabilities. “We reaffirmed our treaty alliance, the strategic partnership and the historic friendship between our countries,”President Aquino told reporters after his meeting with Obama. “I am confident that this firm foundation of broad cooperation and shared values will enable the Philippines and the US to face the challenges of the present and those in the decades to come.” Recalling that the PhilippinesUS defense and security alliance commenced more than 60 years ago, Mr. Aquino voiced assurance that “to this day, it remains a cornerstone of peace and stability in the Asia Pacific.” President Aquino also acknowledged that as a treaty ally of the US, the Philippines receives security assistance from the US government, particularly through Foreign Military Financing (FMF). “We recognize, with the deepest appreciation, the significant contribution to our efforts by the US— contributions that help us ensure that we can ably respond to current security challenges, particularly

in the area of maritime security and maritime domain awareness,” he said. Mr. Aquino admitted that the NCWC, completed early this year, was constructed “with significant assistance” from the US, recalling that the project was first discussed “during my visit to Washington, D.C., in 2012, and our administration is pleased to see it come to fruition this year.” Bloomberg News reported that bold steps need to be taken to lower tensions in the South China Sea, Obama said on Wednesday in Manila, affirming his support for the Philippines’s effort to settle its territorial dispute with China through international arbitration. “We’re not claimants ourselves but we fully support a process in which through international laws and international norms these issues are resolved,” Obama said after meeting President Aquino on the sidelines of the Apec summit. “We look forward to working with all parties to move disputes through these channels.” The Permanent Court of Arbitration in The Hague last month ruled it has jurisdiction to hear the case against China’s bid to assert its claims to the South China Sea, even though China has refused to take part in the proceedings. China’s claim to more than 80 percent of the waterway also clashes with those made by Brunei Darussalam, Malaysia, Taiwan and Vietnam. Mr. Aquino said the Philippines had been discussing with some of the other claimants whether they’d join the arbitration effort. Vietnam’s foreign ministry said this month that it would closely watch the Philippine case and was considering its next steps. “China is increasingly isolated on this issue, as states such as Malaysia and Indonesia that once were rather circumspect have become worried about China,” said James Kraska, research director at the Stockton Center for the Study of International Law at the US Naval War College. “The US has

OF ASEAN THAN TPP C By David Cagahastian

EOs from the 21 membereconomies of the Asia-Pacific Economic Cooperation (Apec) are more upbeat about the coming integration of the economies of the Association of Southeast Asian Nations (Asean) than with the Trans-Pacific Partnership (TPP) pushed by the United States. According to the Apec CEO survey for this year, 35 percent of CEOs believe the greatest opportunity for the growth of their businesses is within the Asean than anywhere else because of the large market for products and services offered by the trade block said already to contain a third of the world’s middle workingclass population. Meanwhile, only 24 percent of the CEOs surveyed responded that the TPP, or the trade agreement of 12 highly industrialized countries led by the US, will provide better opportunities for growth for their businesses. Earlier this year, at the Philippines hosting of the World Economic Forum, economists and CEOs highlighted the importance of the demographic window where the Philippines were to benefit the most from the fact that its working-age population were to exceed its dependents.This demographic window would see the Philippines growing the fastest it has ever achieved before or since as a consequence. Even CEOs coming from Singapore, which is both a TPP member and Asean member, believe there are more opportunities resulting from the integration under the Asean than with TPP, with 55 percent of CEOs from Singapore rooting for Asean integration compared to only 14 percent for TPP. Only the CEOs surveyed from the US, Japan and Peru—all TPP members—believed that the TPP would provide their businesses better opportunities than Asean economic integration. Pricewaterhouse Coopers Philippines Chairman and senior partner Alexander Cabrera said high expec-

tations of opportunities for growth in the Asean is best shown by higher actual investments or planned investments by Apec CEOs in Apec member-countries aside from their domicile economy. On average, corporations from Apec invest in 5.6 other Apec economies aside from investments in their principal economy. Cabrera said while the bulk of these investments still go to traditional destinations like China and the US, more CEOs from Apec economies said their organizations either actually increased or plan to increase investments in emerging economies like Vietnam, Thailand and the Philippines. Also, a day after Russian President Vladimir Putin openly questioned the secrecy surrounding the TPP, the Russian Federation said proposed integration in the Asia-Pacific region should not take precedence over the multilateral trading system. Without mentioning the TPP, Russian Prime Minister Dmitry Medvedev said regional trade agreements should not be made a replacement for the more inclusive, multilateral trading system under the World Trade Organization. “Truly a No.1 topic for Asia-Pacific region. Russia has been favoring regional integration and we believe that all preferential trade agreements within the framework of Apec are very important but should not substitute the multilateral trade system and should not disrupt the already existing stable economic ties,” Medvedev said at the Apec CEO Summit on Wednesday. The multilateral approach to trade liberalization requires a large number of countries,regardless of their economic size, to reduce trade barriers with the goal of having a beneficial outcome for all. This was seen as the opposite of the regionalist approach to trade liberalization which is concentrated on a few countries with a common objective and implies exclusivity. With Catherine N. Pillas

and Jovee Marie dela Cruz

See “Defense pact,” A2

China vows to help push growth in Asia Pacific Continued from A1

level and is committed to “open regionalism.” China urged Apec membercountries to fast-track the setup of the Beijing-led Free Trade Area of the Asi Pacific, considering the emergence of new regional freetrade agreements which have given rise to worries about the region’s fragmentation. Xi said China has established the $40-billion Silk Road infrastructure fund and is now working with more than 50 countries to prepare for the launching of the Asian Infrastructure Investment Bank (AIIB). The AIIB is a new type of investment and financing institution which can be tapped by Asian countries for their important projects. It is expected to be fully operational by the end of the year. China is the world’s secondlargest economy and is considered an important trading partner of many countries in Asia Pacific. The slowdown in China’s economic growth has become a cause for concern and is being tagged as one of the major reasons behind the possible contraction in global

growth this year. Just last month, China reported that its economy dipped to 6.9 percent in January to September—the lowest growth rate posted by the economic powerhouse in six years. “China is working vigorously to overcome difficulties and meet challenges by strengthening macro regulations and effectively advancing reforms,” Xi said. “In general, China’s positive economic fundamentals and long-term trajectory remain unchanged but also remain unchanged are the basic facts that China’s economy has strong resilience, great potential and ample room for maneuver,” he added. Xi said Beijing is stepping up the implementation of reforms aimed at ensuring inclusive growth. He said Beijing will focus on innovation and remove “institutional obstacles.” “We lifted 700 million Chinese people out of poverty. This is in itself a major contribution to human progress. In the next five years, all the remaining 70 million rural people living below Chinese poverty line will be lifted out of poverty,” he said. Despite the tension in West Philippine Sea, the

Philippines welcomed the efforts of China to sustain growth. “Of course, it is most reassuring that China is serious in its commitment to sustain the momentum of economic growth and keep China attractive to foreign investments,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor for Monetary Stability Sector Diwa C. Guinigundo told the BusinessMirror. “It is crucial for economic and financial reforms to be sustained to cement China’s intent to internationalize the yuan. If these goals are realized, a strong China is good for both the Asia-Pacific region and the global economy,” Guinigundo added. He said the Philippines stands to benefit from a firm driver of global growth through expanded trade and investment channel. Guinigundo, however, said the Philippines is not as tied to Chinese trade as other countries in Asia Pacific. International Monetary Fund Resident Representative to the Philippines Shanaka Jayanath Peiris told the BusinessMirror earlier that the Philippines’s strong macroeconomic fundamentals and relatively low economic linkages to China serve as a “cushion.”