“NOW people that didn’t even know who she was are going to know who she is.”—Oprah Winfrey, on the US Treasury’s announcement that Harriet Tubman (in photo), the African-American abolitionist born into slavery, will be the new face on the redesigned $20 bill.
UNITED NATIONS
“WHETHER you like that answer or not is completely up to you. I am not going to give you answers to make sure you like what I say, let the rest of the insecure world do that.”—ESPN baseball analyst and former player Curt Schilling, in a blog post response after he was fired from his job for posting Facebook comments critical of transgender rights. AP
BusinessMirror A broader look at today’s business
www.businessmirror.com.ph
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Friday, April 22, 2016 Vol. 11 No. 195
P. | | 7 DAYS A WEEK
TO IMPROVE THE QUALITY OF INTERNET SERVICE NATIONWIDE
Govt crafting interim natl broadband plan
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@lorenzmarasigan
₧80B
HE government is in the process of crafting an interim broadband plan to The amount both PLDT and Globe improve the quality of the Internet in the spend yearly on Internet infra country, as data services are now seen as the next National Telecommunications Director (NTC) Edgardo V. Cabarios said the frontier for both large companies and for micro, National Economic and Development small and medium enterprises (MSMEs). S “B,” A
2016 ISUZU MU-X: HEAVEN IS WHAT YOU DRIVE ON EARTH
MOTORING
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ROBOT EYES WATCH SKIES ON DEARTH OF CONTROLLERS SAAB.COM
MEDIA PARTNER OF THE YEAR
2015 ENVIRONMENTAL MEDIA AWARD LEADERSHIP AWARD 2008
“I KNOW we’re at the most difficult stage right now, but it’s just the beginning.”—Ecuadorean President Rafael Correa, who announced that he is raising sales taxes and will charge a onetime levy on millionaires to rebuild cities devastated by the country’s worst earthquake in decades.
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HE world’s airlines have ambitious plans to double the fleet of commercial jets during the next two decades, as the number of air travelers approaches 7 billion. The trouble: There won’t be enough controllers to help those 44,000 planes take off and land safely. A shortage of air-traffic controllers may rein in expansion by the aviation industry and economic development by emerging nations such as India, which wants to activate hundreds of unused runways to spur growth. There is a potential solution, and it resembles a video gamer’s dream—a wall of big-screen TVs and a few tablet computers controlled by a stylus. Some airports are now testing “remote towers” from Saab AB and Thales SA that allow controllers sitting hundreds of miles away to monitor operations through high-definition cameras and sensors. The technology is sensitive enough to penetrate fog and detect wild animals on runways, and the companies say it’s also cheaper than hiring people to fill vacancies at smaller or remote airports.
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SUZUKI CIAZ: THE NEW SUBCOMPACT ON THE BLOCK
Few facilities
GLOBAL DRUG POLICY Philippines Minister of Justice Emmanuel Caparas addresses the United Nations (UN) special session on global drug policy on Wednesday
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BREEZE FOR NADAL
at the UN Headquarters. Hundreds of government officials, representatives of non-governmental organizations and individuals from civil society are attending the first UN General Assembly special session to address global drug policy in nearly 20 years. Prior to this week’s three-day meeting, Democratic presidential candidates Hillary Clinton and Bernie Sanders, rock star Sting and hundreds of others sent an open letter to UN Secretary-General Ban Ki-Moon, saying the war on drugs has failed. It said that, for decades, governments have focused resources on repressing drug use, resulting in the imprisonment of millions of people, mostly the poor and ethnic minorities, and mostly for nonviolent offenses. AP
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3 senators bare strategy to stop labor-contracting practice in PHL B B F
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“IT’S a potential game changer,” said Neil Hansford, chairman of Strategic Aviation Solutions, a consultancy firm north of Sydney. “There’s a shortage. As you go to more and more airports, it’s going to exacerbate the problem.” And plans are moving apace for more and more airports. Worldwide, projects to redevelop or build new airfields surpass $900 billion, according to the Capa Centre for Aviation, a Sydney-based consultancy.
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@butchBM
ND of contract” is a dreaded phrase among millions of Filipino workers serving the manpower needs of big companies that resort to labor contracting, a business practice three senators running for different positions in the May 9 elections have promised to end. Although their collective intention is not easy to do as it seemed, Sens. Grace Poe, Francis Escudero and Vicente Sotto III remain undaunted. For the three solons,
PESO EXCHANGE RATES n US 46.1330
A bill regulating the use of contractualization would be able to find a middle ground.”—S
there’s no turning back on a campaign that strikes at the heart of labor rights under the Constitution. They are confident a rational, calibrated strategy is possible to balance labor rights, on one hand, and the impact of putting an end to contractualization on businesses and the economy, on the other. The
three senators have a common approach: In the short term, go for a strictly regulated contractualization regime that allows it only for very limited sectors and periods; and, in the long term, scuttle the practice of labor contracting altogether. In separate exchanges with the
BusinessMirror, independent presidential candidate Grace Poe, her running mate Sen. Francis Escudero and Senate Deputy Minority Leader Vicente Sotto III shared their views on why an end to contractualization is not a pipe dream for an economy hoping to maintain its remarkable growth trajectory. Other senators sought for comment did not reply. As background, Poe and Escudero came out very strongly against contractualization in the last presidential and vice-presidential debates, even as they keep reiterating before
business groups they will champion measures to provide incentives to good-performing sectors, promote competition, cut corruption and red tape, and reduce the cost of doing business in every way possible. While labor groups had railed against the misery wrought on workers by the “end-of-contract” scenario hanging over their heads, there is also the view that employers should not completely be stripped of the flexibility to let go of certain workers. This view holds that several of the fastest-growing sectors S “ ,” A
n JAPAN 0.4205 n UK 66.1178 n HK 5.9489 n CHINA 7.1253 n SINGAPORE 34.3430 n AUSTRALIA 35.9376 n EU 52.1395 n SAUDI ARABIA 12.3054
Source: BSP (21 April 2016 )
BMReports BusinessMirror
A2 Friday, April 22, 2016
Robot eyes watch skies on dearth of controllers C A
By 2030, the world will need another 40,000 air-traffic controllers to handle those flights, according to the International Civil Aviation Organization. Yet, there are so few training facilities in Asia, the fastest-growing travel market, which the region will have a deficit of more than 1,000 controllers each year, the Icao said.
Rating downgraded
PARTLY because of that, the US Federal Aviation Administration (FAA) downgraded India’s aviation safety rating in 2014 and Thailand’s in 2015. The agency said neither country’s civil-aviation authority was up to scratch and barred their airlines from offering new services to the US. After India addressed the FAA’s safety concerns, its rating was restored last year. Global demand for flight-management equipment, such as digital communications and surveillance systems, is forecast to reach $5.5 billion in 2020, according to research by MarketsandMarkets. The growth in fleets and flights outpaces the abilities of airport authorities to keep up, said Brian Jackson, managing director at Am-
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Authority (Neda), the Information and Communications Technology Office (ICTO) and his office have started rounding up ideas on how the industry must move forward five years from now. “The National Broadband Plan is being drafted. We are proposing several items on the plan, which should identify three areas: First, areas where the government should put up infrastructure; second, where the government should subsidize; and, last, areas where the private sector can freely compete in the market,” he told the BusinessMirror in an interview. He said there are areas in the Philippine archipelago not appealing to businesses; hence, the government must intervene and build up infrastructure. “You cannot leave everything to competition. There are small areas the government will have to invest in if we want to improve the state of our Internet services today,” Cabarios said.
bidji Group, a Melbourne-based aviation-consultancy firm. “There’s a real mismatch between airlines’ forward planning and air traffic-control forward planning,” Jackson said. “Planning for infrastructure takes years.”
flights managed by oversized tablet computers that respond to a stylus. Graphics pop up on the screens, and the controller can manually maneuver a zoom camera to take a closer look at the runways or the planes if an anomaly warning sounds.
IMAX Theater
First system
THAT ’S what Stockholm-based Saab and Paris-based Thales are trying to capitalize on. The companies can install towers loaded with cameras and sensors covering 360 degrees overlooking runways to beam high-definition video and sound to a distant control center. One controller can manage several airports remotely. “We can see a huge interest from all continents,” Dan-Aake Enstedt, Saab Asia-Pacific manager, said in an e-mail. “This lets you operate an airport that might otherwise be too expensive to keep open, or help to smooth the flow of traffic around major airports as they expand.” Saab’s system resembles an immersive IMAX theater. A bank of screens on the wall gives the impression of looking out the window onto a remote airfield, with radar blips tracked on a desktop monitor and The broadband blueprint, he said, is a five-year plan for the next administration. “This will identify the most important areas we need to address and identify how much we need to invest,” he said. Globe Telecom Inc. and PLDT Inc., on the average, have been allocating roughly P80 billion per year. The government has spent a nugget of this price to set up free Wi-Fi connections to a few public places. “The P80 billion per year being spent by the two telcos are mostly focused on urban areas. To put up infrastructure in rural areas, easily, you have to invest about P30 billion to P100 billion. The needed capital is huge,” he said. Mobile broadband connection is mostly spotty in rural areas, and some home broadband services are also not being offered by telcos to some areas in the provinces. “It’s because there are places really hard to reach. To build a small infrastructure, you have to spend billions of pesos. P1.5 billion is even too small,” Cabarios said. “These will be our targets. The
by the National Air Traffic Controllers Association, adding it cuts costs and improves staffing models.
Night vision
THE technology guides planes into central Sweden’s Ornskoldsvik Airport, with controllers monitoring from more than 100 kilometers (62 miles) southwest at Sundsvall-Timra Airport. It was the first remote system installed in the world. Australia tested Saab’s remote tower in Alice Springs, which is almost dead center of the continent. The airport, serving carriers including Qantas Airways Ltd. and Emirates Airline, was run from a control tower 1,500 km to the south in Adelaide. Airservices Australia, the government entity that employs more than 1,000 controllers, said in an e-mail that it is considering “further evaluation and potential deployment of this type of technology.” The executive airport in Leesburg, Virginia, which has installed 14 cameras, says the concept is supported
THALES rolled out its competing version, including night-vision cameras, last month at the air-traffic industry’s annual congress in Madrid. The system also is appropriate for war zones and “previously ‘unjustifiable’ sites,” the company said. Saab senses opportunity in India, where Prime Minister Narendra Modi’s plan to bolster the economy includes reviving remote airstrips to increase passenger and cargo traffic, said Varun Vijay Singh, marketing director for air-traffic management at Saab’s Indian business. Only 75 of India’s 476 airports— just 16 percent—attract scheduled flights, according to a draft civilaviation policy released in October. “India is reaching airspace congestion, and ATC services are on edge at the moment,” said Mark Martin, founder of Dubai-based Martin Consulting Llc. Boeing Co. predicts Indian carriers will need 1,740 new aircraft during the next 20 years. Someone has to help land them, Saab’s Singh said.
money to be invested in this endeavor can come from the proposed universal access fund, which is still pending in Congress,” he added. The proposed fund, which essentially is a tariff for telco services, may not see the light of day in Congress. It could have been an avenue for the government to fund investments in the telco industry. “Without the fund, we can always seek for grants, low interest loans, such as official development assistance financing. These can fund our drive to build infrastructure,” he said. This is not the first broadband plan the government has crafted. The first one included the proposal to equip 80 percent of the households across the country with at least 2 Mbps speed by 2016. This, according to Cabarios, is nearly impossible to achieve now. Sought for comment, the two telco titans in the Philippines said they will support the government in its plans to develop the Internet sector in the country. “The national broadband plan is a good initiative that most countries in the world already have. It will help
the industry, especially in building more infrastructure, and most especially in addressing the missionary sites that the industry cannot cover at present, like conflict areas in Mindanao. This will also help address the need for Internet connectivity in public schools,” Globe Spokesman Yolanda C. Crisanto said. She said among the major challenges facing the industry are the permitting, right of way, licenses and fees. “If these can be standardized and rationalized across local government units, then we can build cell sites faster. With more cell sites, we can address the twin issues of Internet speed and access,” Crisanto said. PLDT Spokesman Ramon R. Isberto said the industry needs to focus on three areas for the development of broadband. “Important is sustained investments in order to raise the capacity and capabilities, and to strengthen the resiliency of our networks,” he said. In the case of PLDT, the company invested P43 billion last year and has allocated another P43 billion, this year. Globe is spending roughly $750 million in 2016.
3 senators. . .
news@businessmirror.com.ph
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were able to reach competitive levels, because they had the flexibility to hire workers at will for fixed contract periods without “worrying” over the long-term economic packages they must provide their staff. They also note that over 90 percent of the economy accounts for the socalled micro, small and medium enterprises (MSMEs). Responding to BusinessMirror’s query, Poe categorically declared: “Labor contracting is, in fact, bad for employers and firms, because businesses do not like having to hire and rehire their workers.” According to Poe, “Addressing abusive and unwarranted contractualization will promote workers’ security of tenure, which is a constitutional right.” “Job security will motivate laborers to work harder, thereby increasing productivity and excellence,” she said, noting that “many studies have shown that employees with high job satisfaction are generally more productive, engaged and loyal to their companies.”
Middle ground: Strictly regulating contractualization FOR his part, Sotto suggested that, “perhaps, a bill regulating the use of contractualization would be able to find a middle ground.” Sotto thinks it is possible to “make exceptions to companies/entities that cannot afford regular employees,” even as he pointed out such “will entail the entry of the Bureau of Internal Revenue in the execution of the provisions.” Escudero, on the other hand, chafes at the notion that upholding workers’ rights is exclusive of the desire to keep businesses competitive. Businesses, Escudero explained, “should look at their employees not as mere “costs” but as important partners and assets to their business.” “Giving them security of tenure and at least minimum wages should not be viewed as mere costs but as an investment in their business’s most important asset and resource: its people,” Escudero said. He had a pointed rebuke to businesses that worry single-
mindedly about thinning bottom lines. “Besides, it will not make them poor nor make their businesses falter.” “In fact,” Escudero added, “a stronger middle class is the best support to a growing economy by increasing the purchasing power of the consumers. This will, hopefully, bridge the widening gap between the rich and the poor.” Poe, in an e-mail to the BusinessMirror, shared a fourpronged strategy on the Partido Galing at Puso (PGP) agenda. “Recognizing, as well, the need of businesses for productivity, sustainability and profitability,” Poe said, “we will do the following: ■ Address the job-skills mismatch by fostering closer industry-academe coordination and collaboration; ■ Provide an attractive investment environment by ensuring that government contracts are upheld, easing constitutional restrictions on investments; eliminating redundant and unnecessary regulations; reducing the foreign investment negative list; simplifying business registration and payment of taxes and fees; ■ Provide access to credit and increase marketing and technical support to MSMEs; ■ Focus support for agriculture/agribusiness, manufacturing and tourism. Poe added that among the first courses of action after the May elections—whether she becomes chief e xecutive or returns to the Senate—is to review existing labor laws, rules and regulations on contractualization. “We will ensure that the concerns of all stakeholders are duly considered in the crafting of new guidelines that will be fair for all parties concerned. Contractua lization w i l l be strictly regulated to ensure compliance, while maintaining the profitability of businesses.” The final word, according to the candidate who has drawn heavily on the image of empathy and concern for the poor of her late father Fernando Poe Jr.: “Happy employees translate to more productivity, hence, enhanced profitability for business owners. Ending contractualization, in the long run, will be beneficial to all concerned.”
HOW CONTRACTUALIZATION BECAME THE NORM AMONG PHILIPPINE BUSINESSES
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HERE are two narratives as to how contractualization became so pervasive in the Philippines. Many labor groups have in the past routinely blamed the late senator and labor leader (a pillar of the Trade Union Congress of the Philippines) Ernesto “Boy” Herrera for paving the way for labor contractualization with amendments he introduced in 1989 to the Labor Code. According to them, a very limited contractualization regime—in the past, limited to janitorial services and similar short-term business arrangements —became the norm as a result of the sweeping new provisions; hence, the tag “Herrera Law.” However, when Herrera died in October 2015, his son Ernest—making a clarification validated by ex-Labor Secretary Ruben Torres—told reporters (including the BUSINESSMIRROR) at his wake it was most unfair to blame the late senator for the runaway proportions with which contractualization had been abused across many sectors. In fact, Ernest explained, the senator authored a bill mandating regularization of employees who have rendered six months of continuous service—a provision subsequently included in the revised Labor Code. Ernest blamed the implementation by the Department of Labor and Employment (DOLE) as part of the culprit. DOLE circulars, he said, had greenlighted so-called labor-only contracting agencies that dangle “take it or leave it” five-month contracts to desperate jobseekers. In a later interview (not with the B USINESS M IRROR ), Ernest insisted, “the record shows my dad was very critical and fought against these department orders favoring labor-only contracting.’’ One of the harshest critics of labor-only contracting, the Ecumenical Institute for Labor Education and Research (EILER), had pointed to Articles 106 to 109, of what it called the Herrera Law, as the source of the labor secretary’s power to issue orders that will promote hiring of contractuals and other nonregular workers. An example given was Department Order 18-A issued in 2011. EILER said in one forum this has since become a nightmare that vastly expanded the once-limited work arrangement for janitorial and other casual jobs to becoming the routine, or default labor arrangement cutting “across all economic sectors, from manufacturing to wholesale and retail trade up to business-process outsourcing.” Butch Fernandez
news@businessmirror.com.ph
BMReports BusinessMirror
Friday, April 22, 2016 A3
PPP bill good as dead due to lack of time B J M N. C
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@joveemarie
HE proposed PublicPrivate Partnership (PPP) Act or House Bill (HB) 6631, which is being pushed by the Palace and big business groups, may not be passed by the 16th Congress due to lack of time.
Speaker Feliciano Belmonte Jr. said the remaining days of the 16th Congress will be allotted for the canvassing of votes. “[But] If there’s a similar bill at the same stage in the Senate, it is still doable,” Belmonte told the BusinessMirror. However, the Senate version of the proposed PPP Act is still pending for second reading, while the House version of the bill is pending for third reading. Belmonte said there may be no more time for both chambers of Congress to pass the measure on third reading. Based on the legislative calendar, Congress sessions adjourned on February 3 as part of its preparation for the May national and local elections. Sessions will resume on May 23 until June 10. T he two chambers w ill convene first as National Board of Canvassers before the approval of other pending priority bills. “When Congress resumes on May 23 it will be for the primary purpose of constituting itself as the National Board of Canvassers to proclaim the next president and vice president. I see the possibility as slim to none that other pending legislation will be tackled before the final adjournment of the 16th Congress in early June,” said Party-list Rep. Ashley Acedillo of Magdalo, one of the authors of the proposed PPP Act.
I see the possibility as slim to none that other pending legislation will be tackled before the final adjournment of the 16th Congress in early June.”—A But Rep. Alfredo B. Benitez of Negros Occidental, chairman of the House Committee on Housing and Urban Development, said: “While I understand that the remaining time of the lower chamber and upper chamber will be allotted for the canvassing of votes, I am still hopeful [that the both houses] would still find time to pass the bill [proposed PPP Act] in the remaining days of Congress.” B e n it e z , w ho i s s up p or t i n g t he p a s s a ge of t he proposed PPP Act, said the measure is a big help to continue PPP projects. During the recent culmination program of the National Housing and Urban Development Summit, Benitez is pushing for PPP for housing to address housing backlogs in the country. According to the lawmaker, at least 5,821.57 hectares of land in the National Capital Region will be unlocked for PPP for the government’s socialized-housing programs. Under the Constitution, Congress (the Senate and the House of Representatives in joint session) will act as the Nationa l Board of Canvassers to canvass the votes and proclaim the winners of the presidential and vice-presidential race. In February the lower chamber recalled the third-reading approval of HB 6631, jeopardizing enactment of the business group- and Palace-backed measure. Senior Deputy Minority Leader and Party-list Rep. Neri Colmenares of Bayan Muna moved to recall the third-reading vote on HB 6631, say ing the approva l of the measure violated Section 28, Article VI of the 1987 Constitution. “No law granting any tax exemption shall be passed without the concurrence of a majority of all the members of Congress,” he said. Only 136 congressmen voted during the third-reading approval of the PPP bill. With the House of Representatives rolls showing a total membership of 291, HB 6631 may be passed on third and final reading by 146 congressmen. The Philippine Business Groups and the Joint Foreign Chambers are pushing for the passage of the proposed PPP Act. Also, in a BusinessMiror report, Cosette V. Canilao, the former executive director of the PPP Center, said the passage of this legislation is critical in raising capital to finance projects of prime importance. Meanwhile, PPP Center Executive Director Andre C. Palacios said he is hopeful that both houses of Congress could still pass the bill into law, saying, “the passage of the PPP Act is crucial as it will improve the capital market, and it will help create a better environment for private investments to go into infrastructure projects, which by themselves are high risk.” Philippine Stock Exchange Senior Vice President Roel A. Refran also supported the PPP Act, adding that this would give investors—both retail and institutional—more options,
while providing a blanket of protection against any unnecessary issue. Principally authored by Belmonte, the measure institutionalizing and strengthening the PPP seeks to recognize the indispensable role of the private sector as the main engine for national growth and development. The measure will create an enabling environment for PPP. The bill also seeks to provide the most appropriate incentives to mobilize private resources
for the purpose of financing, design, construction, operation and maintenance of infrastructure projects and services normally financed and undertaken by the government. The PPP refers to a contractual arrangement between the implementing agency and the project proponent for the financing, design, construction, operation and maintenance or any combination thereof, of an infrastructure facility, in which the project proponent bears significant
risk, management responsibility or both. It said that among other incentives, PPP projects in excess of P1 billion shall be entitled to incentives as provided by the Omnibus Investment Code, upon prior endorsement of the PPP Center and registration by the project proponent with the Board of Investments. The bill also seeks to create a joint congressional oversight committee to oversee the implementation of this act.
BMReports BusinessMirror
A4 Friday, April 22, 2016
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Wielding the Himars ‘big gun’ vs China ‘occupation’
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@reneacostaBM
S China’s military activities escalate within the patches of territories in the South China Sea (SCS) that Beijing claims to be its own, the United States has shipped to Palawan multiple rocket launchers to boost the Philippines-US defensive posture.
Fresh from a firing exercise at the Crow Valley target range in the northern Luzon province of Tarlac during the Balikatan 2016 military exercises, the M142 High Mobility Artillery Rocket System (Himars) was transported to the province nearest to the Chinese bases sitting atop the reclaimed reefs in the West Philippine Sea (WPS). The reported mounting of the defensive weapon in Palawan, which both Filipino and American military officials refuse to confirm, would support the ongoing joint air and maritime operations or patrols that are being conducted by the Philippines and US soldiers in the contested territories since last month. The deployment of the Himars that could also be fired from a warship was confirmed by the openended statements of Balikatan officials, who, after test firing it on two occasions during the past two weeks, said the rockets would be brought to Palawan. The rockets would support the contingent of US aircraft, including five A-10 Thunderbolt, three H60G Pave Hawk helicopters, a MC-130H Combat Talon aircraft and 200 airmen, who stayed behind after the bilateral war games, to initialize US pivot in the Philippines under the Enhanced Defense Cooperation Agreement. US Lt. Gen. John Toolan, commander of the Marine Forces in the Pacific, said the Himars, which could also be mounted and fired on an Army tactical vehicle, has the capability to hit a target at a distance of
300 kilometers. Thus, with its range, it can easily strike Chinese patrols, and even China’s newly built military bases nearby. The US light multiple rocket launcher, with a price tag of $5 million per platform, can fire six rockets or one MGM-140 ATACMS (Army Tactical Missile System) on the US Army’s new family of medium tactical vehicles 5-ton truck, and can launch the entire multiple-launch rocket system family of munitions. The armed forces has no missile capability yet, and while there had been efforts to acquire such weapon under the present administration, the missile-launcher procurement plan was shot down last year by Chief of Staff Gen. Hernando Iriberri, consequently drawing sharp criticisms from the public and even active and retired military officials. Retired Lt. Gen. Juancho Sabban fought for the missile system for the Marines when he was the commander of the Western Command, but when Gen. Emmanuel Bautista became the chief of staff, he assigned the acquisition project to the Army. When Iriberri became the top military chief, he however turned down the project and reprogrammed it for the personal equipment of soldiers. The Himars weapons system is interchangeable with the MLRS M270A1, carrying half the rocket load and can be transported on board a C-130 plane. Six Himars practice rockets were
fired during the penultimate day of the Balikatan, drawing the admiration of a roster of officials, including Armed Forces Western Command chief Vice Admiral Alexander “Chinaman” Lopez. Lopez’s monicker was coined by a group of “patriotic” students in December last year after the military officials tried to stop the group’s “freedom voyage” in the WPS , while doing nothing against Chinese activities in his area of operations, according to the same group. The firing of the Himars was the second after American Marines hit their targets during its first firing, also at Crow Valley, on April 4. Lopez said the multiple rocket launcher should beef up the capability of the armed forces for
territorial defense, and it can be deployed in the WPS. “Basically, that’s the main purpose of that. We can deploy the Himars in any part of the Philippines, any part, that’s highly mobile,” he said. “Any threat, we can use that capability should we have one.” “Now, because we have seen it, I know the military would like to have a good look at it and maybe a better consideration coming up with one. We have seen the capability, highly mobile, lethal, so I think that’s one of the capability that we want to have,” Lopez said. After the firing at Crow Valley, Toolan said they would also test fire the Himars from a ship, hinting it would be deployed aboard military vessels engaged in patrols
You know, the truth to the matter is that we are allies, and so you know, as allies, we need to work together, and I think that we’ll be more than happy to share.” —US L. G. J T in the WPS. “The Himars also has the capability [to be test fired from]…the deck of a ship [since we]…really need to [be on] solid ground to be able to fire from a ship. We’re gonna test it off the deck of the ship,” the US Marine general said during the Balikatan.
Toolan added that the US is willing to share the Himars along with other sophisticated US weapons with the Philippines. “You know, the truth to the matter is that we are allies and so you know, as allies, we need to work together and I think that we’ll be more than happy to share,” he said.
China’s Xi moves to take more direct command over military
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OLSTERING his status as China’s most powerful leader in decades, Chinese President Xi Jinping has assumed a more direct role as head of the country’s powerful armed forces with the new title of commander in chief of its Joint Operations Command Center, state media and analysts said on Thursday. Xi’s new position was revealed in news reports that featured prominently on national news broadcasts on Wednesday and Thursday, in which he appeared publicly for the first time in camouflage battle dress wearing the joint center’s insignia. During his Wednesday visit, Xi called on the center’s staff to “closely follow the trends of global military revolution and strive to build a joint battle command system that meets the need of fighting and winning an informationized war,” the official Xinhua News Agency said. Officers should “change their ideas, innovate and tackle difficulties, in a bid to build a joint battle command system that was absolutely loyal, resourceful in fighting, efficient in commanding and courageous and capable of winning wars,” Xinhua quoted Xi as saying. Battle command capacities should be measured by “the standards of being able to fight and win wars,” Xi said, stressing the need to prepare for conflicts, analyze possible security risks and handle effectively “all sorts of emergencies.” The joint center, reportedly underground in the western outskirts of Beijing, is under the direct super-
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Size of the People’s Liberation Army, the world’s largest standing armed forces vision of the ruling Communist Party’s Central Military Commission, which is headed by Xi and oversees the 2.3-million-member People’s Liberation Army (PLA), the world’s largest standing armed forces. Xi was accompanied on his visit by the commission’s two vice chairmen, Gen. Fan Changlong and Gen. Xu Qiliang. Among his several other titles, Xi is also leader of the ruling Communist Party and chairman of a recently created National Security Council, which gives him greater control over the domestic security services. As head of the military, Xi has overseen a reorganization of the PLA’s command structure into five theater commands aimed at better integrating the different services. He has ordered a 300,000 person reduction in forces that will see the elimination of many outdated and noncombat units, and shift the emphasis further from ground forces to the navy, air force and missile corps. Xi’s appearance in battle dress with insignia on Wednesday emphasized his more direct role in military
affairs. When appearing simply as head of the Central Military Commission, he routinely wears olive-green tunics, shirts and trousers without insignia or decoration, as did his predecessors. Xi’s new choice of apparel “indicates that he not only controls the military, but also does it in an absolute manner, and that in wartime, he is ready to command personally,” said Ni Lexiong, a military affairs expert at Shanghai’s University of Political Science and Law. Three years since taking on the presidency, Xi is widely seen as having accumulated more power and authority than any Chinese leader since Deng Xiaoping in the late 1980s. A cult of personality has also sprung up around him to rival that of the founder of the communist state, Mao Zedong, with his slogans, sayings and signature political themes widely disseminated in the media. Yet, his reputation has also been ca lled into question by anony mous letters, a l leged ly from Communist Party members, calling for his resignation. Revelations in the international media about vast wealth accumulated by members of his extended family have, meanwhile, flown in the face of his relentless campaign against corruption in the party, military and state industries. Xi’s new title and his visit to the joint center were “more political than military” in significance and don’t imply he will take charge of
IN this April 21 image taken from a video footage run by China’s CCTV via AP Video, Chinese President Xi Jinping in military uniform shakes hands with a military staff member in Beijing. AP
the day-to-day running of the PLA, said Andrei Chang, Hong Kong-based editor of the magazine Kanwa Asian Defense and a close observer of Chinese military affairs. “Throughout Chinese history, political power has always been founded on control of the military,” Chang said. “This was a visit to show off his muscle to his potential enemies and show that he is tough and in charge.” Xi’s new title and appearance in battle dress may also be a deliberate message to China’s chief rivals, including the US, Japan, the Philippines and the self-governing island of Taiwan that China has vowed to conquer by force if necessary. “The combat uniform is not only
to show he is in charge of the military, but also shows that China is ready for a fight amid a tense external situation. It is a bit like telling China’s opponents that he is ready for a combat,” Ni said. Along with his structural and personnel reforms, Xi has highlighted the PLA’s importance with frequent, highly publicized visits to military bases and a massive parade last September that saw the army’s latest equipment wheeled through the center of Beijing while warplanes and helicopters roared overhead. Xi enjoys special cachet with the armed forces, partly due to his late father’s status as a military commander and Xi’s own brief service
as a uniformed aide to a former defense minister, but also because his muscular foreign policy is popular among Chinese nationalists and the defense establishment. That’s been especially true in the disputed South China Sea, which China claims virtually in its entirety and where it has constructed island airfields on former coral reefs and sought to limit the US Navy’s ability to operate in the area. Xi has remained resolute in that approach despite it being blamed for raising tensions with China’s Southeast Asian neighbors and prompting the US to devote more resources to Asia and strengthen its cooperation with traditional allies and even former foe Vietnam. AP
AseanFriday BusinessMirror
A5 Friday, April 22, 2016 • Editor: Max V. de Leon
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Guide to Indonesia’s shift to new rate
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ESS than a week after announcing a new policy framework aimed at spurring economic growth, Bank Indonesia (BI) will decide on interest rates. Most economists predict an unchanged stance until the new system takes effect in August.
To improve the transmission of its policies, Governor Agus Martowardojo said on April 15 the bank will begin using the sevenday reverse repo rate as its benchmark interest rate, replacing the current 12-month reference rate. Here is a short guide on what to expect on Thursday.
5.5%
The interest rate that Indonesia’s central bank pays to borrow from commercial
Reference rate
THE bank has been using this rate, commonly known as the BI rate, as its benchmark since 2005. The rate doesn’t directly influence any money-market instruments, reducing its potency as a policy tool. As evidence of that, look at average bank-lending rates, which haven’t reflected the central bank’s 75 basis points of cuts since the beginning of this year. All but three of the 26 economists surveyed by Bloomberg predict the reference rate will remain at 6.75 percent.
New benchmark
THE bank will begin announcing the seven-day reverse repo rate at its meeting on Thursday to allow the market to get accustomed to it. This is the interest rate that the central bank pays to borrow from commercial lenders and currently stands at 5.5 percent. Policy-makers have emphasized that the change to the framework
doesn’t mean an easing in monetary policy. To avoid any misconception, it’s highly unlikely that the bank will lower interest rates from now until the new policy rate comes into effect, said Wellian Wiranto, an economist in Singapore at the Oversea-Chinese Banking Corp. “Keeping the monetary-policy stance unchanged during the transition period and soon after the actual handover would help ensure that the risk of misunderstanding is minimized,” he wrote in a research note on April 14. “Cutting the target rate even as the very idea of what constitutes the target rate is changing is simply too confusing and too risky a move.”
Other rates
BANK Indonesia will continue announcing the overnight deposit
rate, known as the Fasbi, and the lending facility rate, which is the interest it charges commercial banks to borrow. The Fasbi is currently at 4.75 percent, while the lending facility is at 7.25 percent. Both those rates are currently set at a spread of 250 basis points around the reference rate. When the bank moves to its new regime in August, it plans to reduce the corridor around the new benchmark to 150 basis points. That means the lending facility rate will be reduced to 6.25 percent, according to Deputy Governor Perry Warjiyo.
Policy direction
BANK Indonesia remains under pressure from the government to help spur the economy, which last year grew at its slowest pace since 2009. President Joko Widodo said in an interview in February that he wanted interest rates to “fall, fall, fall, fall and keep falling.” Before the policy change was announced, 10 of the 26 economists surveyed by Bloomberg predicted at least another 25 basis points of cuts by the end of the year. “Financia l markets, including those in Indonesia, are rather well behaved” because of expectations the US Federal Reserve will tighten monetary policy more gradually than earlier predicted, said Bharti Bhargava, an economist with Oxford Economics Ltd. in Singapore. “Against this background, to support household consumption and in return growth, the BI should unload another 25 basis points cut sooner rather than later.” Bloomberg News
MARINA BAY AREA
Two kayaks are dwarfed against the skyline of the Marina Bay area, which is home to popular hotels and tourist attractions, such as the Singapore Flyer, the city-state’s observation wheel seen at right, on Wednesday in Singapore. AP
New mill raises doubts about APP’s forests pledge
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LANDMARK commitment by one of the world’s largest producers of tissue and paper to stop cutting down Indonesia’s prized tropical forests is under renewed scrutiny, as the company prepares to open a giant pulp mill in South Sumatra. To fanfare more than three years ago, Asia Pulp and Paper (APP) promised to use only plantation woods, after an investigation by one of its strongest critics, Greenpeace, showed its products were partly made from the pulp of endangered trees. Greenpeace welcomed the announcement as a breakthrough and the company, long reviled by activists as a villain, rebranded itself as a defender of the environment, helping it to win back customers that had severed ties. At the same time, it was pressing ahead behind the scenes with plans to build a third pulp mill in Indonesia. When it went public with its plans for the OKI mill in 2013, APP announced it would produce 2 million tons a year and then earlier this year acknowledged the mill’s capacity could, in the future, increase to 2.8 million tons. New research released on Wednesday by a dozen international and Indonesian environmental groups estimates that APP will face a significant shortfall in its supply of plantation-grown wood after the new mill begins operating, even at a 2-million-ton capacity. The company could then face a choice between using higher-cost imported wood or looking the other way as its suppliers encroach upon virgin forests. “APP, while it has been presenting itself as a champion of zero deforestation, is building one of the world’s biggest pulp mills,” said Christopher Barr of Woods & Wayside International, one of the organizations involved with the report.
“There will be a great deal of pressure to ensure it receives adequate supplies of wood to keep it operating at full capacity,” he said. “Our analysis shows the group’s existing planted area in South Sumatra is unlikely to produce the volumes of wood the mill is expected to consume at projected capacity levels.” How the mill, which could operate for more than half a century, is fed will be a factor in the survival of Indonesia’s tropical forests and the endangered wildlife they shelter. More generally, the draining and destruction of peatlands for forestry or agriculture will, over decades, release vast amounts of carbon that could jeopardize Indonesia’s ability to meet its emission-reduction targets under an international agreement due to be signed within days. The report estimates that APP’s plantations in South Sumatra have never produced half of the wood needed to feed a 2-million ton a year pulp operation. That shortfall is compounded by devastating forest and peatland fires across Indonesia last year that destroyed more than a quarter of APP’s planted trees in South Sumatra, according to an on-the-ground survey by Hutan Kita Institute and other civil-society groups. In a statement, the company did not address the impact of 2015’s fires but said the new mill would start operating this year at a “low level,” with production to increase gradually based on demand and the availability of wood from its suppliers. “Whilst the new mill significantly increases APP’s production capacity, we have been clear that our Forest Conservation Policy commitment takes precedence over maximizing our production,” it said. “The bottom line is that there is no question in our minds that the commitments we made in the Forest Conserva-
tion Policy come first.” The company said it would “look toward” importing wood chips if efforts to improve the productivity of its plantations, such as improved controls of pests and disease, don’t yield sufficient results. APP is the crown jewel of the Sinar Mas conglomerate, one of Southeast Asia’s largest companies. For a time, it was a pariah in financial markets, after defaulting in 2001 on $13.9 billion of debt, which still ranks as the biggest default by a company from a developing nation. It has secured Chinese funding for the OKI mill. The draining of peatlands, which make up the bulk of the concession land in South Sumatra that supplies APP, is a fraught issue for Indonesia’s neighbors. Record fires on peatlands and forests last year caused $16 billion of losses for Indonesia, according to the World Bank, and sent a smoky, health-damaging haze across the country and into Singapore, Malaysia and Thailand. The mill and its plantations, meanwhile, affect the livelihoods of thousands of people who have lived for decades on land used by APP. The company is embroiled in hundreds of land-use conflicts across Indonesia and has yet to reach an agreement with any community, after vowing to settle such disputes in 2013. Once the new mill begins operating, “I think it will be even more difficult for communities to get their land back,” said Aidil Fitri of Hutan Kita Institute, which is advocating for two communities in conflict with APP in South Sumatra. “Now they have OKI mill and we believe they need more lands for their plantations,” he said. “On the other side, the communities who have conflicts with APP need their lands back for their livelihood, to do agriculture, not for acacia plantations.” AP
1MDB’s cost to Malaysia is just starting as effect on sukuk offers shows
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HE cost of scandals can be hard to measure. In the case of Malaysia, however, this week offered a good glimpse of just how expensive the high-profile investigation into its statebacked fund 1MDB has become. Malaysia’s government raised $1 billion selling 2026 bonds on Wednesday and another $500 million selling notes that mature in 2046. The 10-year debentures were priced at a 135-basispoint premium over similar maturity Treasuries, while the 30-year securities
$1.5B
Amount Malaysia raised this week selling sukuk
were sold at a spread of 145 basis points, according to data compiled by Bloomberg. At least 10 basis points could have been shaved off, both of those were it not for fears 1MDB will default on its obligations. In April last year, for example, the sovereign sold 10-year debt at a 115basis-point premium. To be fair, Malaysia was able to reduce the amount it paid somewhat. When it initially started marketing the bonds to investors, the
10-year notes were being offered at a spread of about 150 basis points and the 30-year securities at about 165 basis points. But the stream of negative headlines emanating from 1MDB can’t have buoyed investor confidence. The fund is at the center of an international investigation into money laundering and is sparring with some of its creditors. There’s been a selloff in all Malaysian government debt, including the nation’s
dollar bonds due 2025 and 2045, the ones used as benchmarks to price the new notes. 1MDB has also been blamed for its part in the ringgit’s wild ride. The currency, which has appreciated a 10.2 percent against the greenback this year, was the worst-performing in Asia last year and second-worst performing in 2014, ahead of the Japanese yen. The yield on Malaysian dollar bonds, meanwhile, averaged 4.18 percent in 2015 versus 3.70
percent in 2014, JPMorgan indexes show. And the cost of protecting sovereign debt against default using credit-default swaps has almost doubled over the past 24 months. In a world of negative interest rates, investors will still be keen to fund a country comfortably rated investment grade. But the cost of money is tied to confidence, and because of 1MDB, that’s not something Malaysia is inspiring these days. Bloomberg News
The World BusinessMirror
A8 Friday, April 22, 2016
briefs OBAMA, GULF ALLIES MEET IN SAUDI TO DISCUSS SECURITY
RIYADH, Saudi Arabia—President Barack Obama is set to meet with top officials from six Arab nations to discuss regional security issues in the Persian Gulf, including the fight against the Islamic State (IS) militant group. The meetings in Riyadh on Thursday are meant to build on a similar summit convened last year at Camp David, the American president’s Maryland retreat. They reflect an effort by the White House to reassure and coordinate with important but wary Mideast allies that oppose Obama’s outreach to Iran and US policy toward the grinding civil war in Syria. The summit with the US-allied countries of the Gulf Cooperation Council follows bilateral talks that Obama held with Saudi King Salman on Wednesday shortly after arriving in the kingdom. AP
Ecuador hikes taxes to pay for postquake reconstruction plan
RENOWNED CUBAN PROREFORM ECONOMIST FIRED AS CHILL SETS IN HAVANA—One of Cuba’s most renowned advocates of economic reform has been fired from his University of Havana think tank for sharing information with Americans without authorization, among other alleged violations. The dismissal of Omar Everleny Perez adds to a chillier mood that has settled over much of Cuba as the country’s leaders try to quash the widespread jubilation that greeted President Barack Obama’s historic trip to the island last month. The Cuban Communist Party’s twicea-decade Congress ended on Tuesday after four days of officials issuing tough warnings about the need to maintain a defensive stance against what they called the United States’s continuing imperialist aspirations. While that was going on, Cuban academics began sharing the news that Perez had been dismissed from his post at the Center for Studies of the Cuban Economy on April 8, less than three weeks after Obama’s visit. Perez is one of the country’s bestknown academics, an expert in developing economies who served as a consultant for Castro’s government when it launched a series of market-oriented economic reforms after he took over from his brother Fidel in 2008. Perez made dozens of trips to universities and conferences in the US and frequently received foreign visitors researching the Cuban economy. AP
OPRAH REJOICES AS TUBMAN SELECTED TO BE ON $20 BILL NEW YORK—”I love it,” Oprah Winfrey shouted, pumping her fist in the air. There was no mistaking her feelings about Harriet Tubman being selected as the next face of the $20 dollar bill. “That was my first choice. My second choice was Sojourner Truth,” Winfrey told The Associated Press (AP) on Wednesday on the red carpet for her new series, Greenleaf. Like Tubman, Truth also was an abolitionist during the 19th century. “I’m not going to cry here for AP, but I think that’s the best choice. That is the choice for America,” Winfrey said. Tubman, an anti-slavery activist will be the first African-American to appear on an American banknote and the first woman to appear on one in a century. Her portrait will replace former President Andrew Jackson, who will be moved to the back of the redesigned $20 bill. AP
3 KILLED, DOZENS HURT IN BLAST AT MEXICO PETROCHEMICAL PLANT
MEXICO CITY—An explosion rocked a petrochemical plant on Mexico’s southern Gulf coast, causing evacuations in the area as a fire billowed a toxin-filled cloud into the air. Officials said three workers died and more than 100 people were injured. The state oil company, Petroleos Mexicanos, said 136 workers had been hurt and three were killed in the blast on Wednesday afternoon in the industrial port city of Coatzacoalcos. Eighty-eight of the injured remained hospitalized. Veracruz state Gov. Javier Duarte also told Radio Formula that there were three fatalities. The blast was felt as far as 10 kilometers away, Duarte said, adding that more than 2,000 people were evacuated from the area as a precaution. AP
RESIDENTS recover their belongings days after an earthquake in Pedernales, Ecuador, on Wednesday. AP/DOLORES OCHOA
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UITO, Ecuador—President Rafael Correa said Ecuador’s worst earthquake in decades caused billions of dollars of damage and he is raising sales taxes and putting a onetime levy on millionaires to help pay for reconstruction.
The damage from 7.8-magnitude quake adds to already heavy economic hardships being felt in this Organization of Petroleum Exporting Countries nation triggered by the collapse in world oil prices. Even before the quake, Ecuador was bracing for a bout of austerity, with the International Monetary Fund forecasting the economy would shrink 4.5 percent this year. In a televised address on Wednesday night, Correa warned the nation of a long and costly postquake recovery and said the economic pain shouldn’t fall only on hard-hit communities along the coast. “I know we’re at the most-difficult stage right now but it’s just the beginning,” he said. Using authority granted by the state of emergency he declared after Saturday night’s quake, Correa said sales taxes would increase to 14 percent from 12 percent for the coming year. People with more than $1 million
in assets will be charged a one-time tax of 0.9 percent on their wealth, while workers earning over $1,000 a month will be forced to contribute a day’s wages and those earning $5,000 a month the equivalent of five days’ pay. Taxes on companies will also go up, and Correa said he would look to sell certain state assets that he didn’t specify. He is also drawing on $600 million in emergency credits from the World Bank and other multilateral lenders. Unlike the deadly earthquake that ravaged Chile in 2010, when commodity prices were at a high and most of South America was booming, Ecuador must rebuild with prices of oil, the lifeblood of its economy, near a decade low. Manufacturing is also suffering because the economy is dollarized, depriving companies in Ecuador of the same jolt the rest of South America has experienced from devalued currencies. The tax hikes come as the scale
14%
Increase in sales taxes from 12 percent
of devastation continues to sink in. A helicopter flyover of the damage zone Wednesday showed entire city blocks in ruins as if they had been bombed. Late on Wednesday, the government raised the death toll to 570. Officials listed 163 people as missing while the number of those made homeless climbed over 23,500. The final death toll could surpass casualties from earthquakes in Chile and Peru in the past decade. Even as authorities turn to restoring electricity and clearing debris, the earth continued to move. A magnitude-6.1 aftershock before dawn on Wednesday set babies crying and sent nervous residents pouring into the streets. Local seismologists had recorded more than 550 aftershocks, some felt 170 kilometers away in the capital of Quito. While humanitarian aid has been pouring in from around the world, distribution is slow. In Manta on Wednesday, people waited for hours under the tropical sun for water and food supplies. Soldiers kept control with fenced barricades. “They looted the store. I’m taking out what little remains,” Jose Encalada said as he cleaned up his paint store in Pedernales, one of the hardest-hit towns. AP
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PARIS CLIMATE AGREEMENT ON TRACK FOR EARLY START
U
NITED NATIONS—About 160 countries are expected to sign the Paris Agreement on climate change on Friday in a symbolic triumph for a landmark deal that once seemed unlikely but now appears on track to enter into force years ahead of schedule. UN officials say the signing ceremony on Friday will set a record for international diplomacy: Never before have so many countries inked an agreement on the first day of the signing period. That could help pave the way for the pact to become effective long before the original 2020 deadline— possibly this year—though countries must first formally approve it through their domestic procedures. “We are within striking distance of having the agreement start years earlier than anyone anticipated,” Brian Deese, an adviser to President Barack Obama, said in a speech last week at Reed College in Portland, Oregon. The US and China, which together account for nearly 40 percent of global emissions, have said they intend to formally join the agreement this year. It will enter into force once 55 countries representing at least 55 percent of global emissions have done so. “There’s incredible momentum,” former New Zealand Prime Minister Helen Clark, who heads the UN Development Program, told The Associated Press. “We’re moving as quickly as possible to action.” She said her agency is working with more than 140 countries on climate change-related issues, and that financing to make the Paris Agreement a reality is “critical, and let’s hope everyone lives up to commitments made.” The agreement, the world’s response to hotter temperatures, rising seas and other impacts of climate change, was hammered out in December outside Paris. The pact was a major breakthrough in UN climate negotiations, which for years were bogged down with disputes between rich and poor countries over who should do what to fight global warming. The mood was so pessimistic after a failed 2009 climate summit in Copenhagen, Denmark, that UN climate chief Christiana Figueres said she thought a global deal wouldn’t happen in her lifetime. Now she expects the Paris Agreement to take effect by 2018. Under the agreement, countries set their own targets for reducing emissions of carbon dioxide and other greenhouse gases. The targets are not legally binding but countries must update them every five years. That’s because scientific analyses show the initial set of targets that countries pledged before Paris don’t match the long-term goal of the agreement to keep global warming below 2 degrees Celsius (3.6 degrees Fahrenheit), compared with pre-industrial times. Global average temperatures have already climbed by almost 1°C. Last year
was the hottest on record. “Even if the Paris pledges are implemented in full, they are not enough to get us even close to a 2-degree pathway,” said John Sterman, of the Massachusetts Institute of Technology. “I don’t think people understand how urgent it is.” The latest analysis by Sterman and colleagues at the Climate Interactive research group shows the Paris pledges put the world on track for 3.5°C of warming. A separate analysis by Climate Action Tracker, a European group, projected warming of 2.7°C. Either way, scientists say the consequences could be catastrophic in some places, wiping out crops, flooding coastal areas and melting glaciers and Artic sea ice. Small island nations and other vulnerable countries managed in Paris to get others to agree to an aspirational goal of keeping the temperature rise below 1.5°C, which many analysts say won’t be possible without removing vast amounts of greenhouse gases from the atmosphere. “In Paris they reached what was possible diplomatically and maybe went a little bit beyond it,” Sterman said. “I think we should celebrate it. But the physics of the climate are relentless.” There is some good news. Global energy emissions, the biggest source of man-made greenhouse gases, were flat last year even though the global economy grew, according to the International Energy Agency. Some say that shows countries are finally driving their economies forward without burning massive amounts of oil, coal and gas. Still, those fossil fuels are used much more widely than renewable sources like wind and solar power. After signing the agreement, countries need to formally ratify it. Procedures for doing that vary among countries. The UN says about 10 countries, most of them small island developing states, will deposit their instruments of ratification on Friday and that the world body will have a better idea by the end of the day which other countries intend to ratify the agreement this year. The Obama administration says the deal is consistent with existing US law and doesn’t require the approval of the Republican-controlled Senate, where it would likely face stiff resistance. The administration is expected to treat the deal as an executive agreement, which needs only the president’s approval. Analysts say that if the Paris Agreement enters into force before Obama leaves office in January, it would be more complicated for his successor to withdraw from the deal, because it would take four years to do so under the rules of the agreement. Also, there would be “a strong negative reaction globally that any administration would have to take into account,” said David Waskow of the World Resources Institute in Washington. AP
SYRIA’S WARRING PARTIES SPAR OVER COLLAPSING CEASE-FIRE B EIRUT—The head of Syria’s government delegation at the Geneva talks lashed out on Wednesday at the country’s Western- and Saudibacked opposition, calling them “politically immature” and saying their walkout from the negotiations removes a “major obstacle” to finding a political solution to the conflict. The remarks by Bashar Ja’afari, who is also Syria’s UN ambassador, echoed earlier barbs by a Turkey-based opposition leader who accused President Bashar alAssad’s forces of effectively having “buried” the cease-fire in Syria. The verbal sparring came as activists reported that ambulances and buses entered four besieged communities in Syria to evacuate around 500 sick residents. At the United Nations, Stephane Dujarric, the spokesman for the UN chief, told reporters plans were under way to evacuate the 500 who are in “urgent need of lifesaving medical attention.” He did not give details on the timing or where the people would be taken.
“The sad thing is, we should not have to negotiate medical evacuations,” Dujarric added. International aid organizations have pleaded for the evacuation of dozens of residents with urgent medical needs from these communities, which have been besieged by government forces and rebels. The deal is also part of the now-teetering cease-fire agreement in place since February 27, which greatly reduced violence in the first weeks but has all but collapsed now amid fierce fighting in Syria’s north in the past week. On Tuesday at least 44 people, mostly civilians were killed in government airstrikes on opposition-held areas in northern Idlib province. The day before, the opposition declared that the government’s violations of the cease-fire were unacceptable. Anas al-Abda, the leader of the Turkeybased Syrian National Coalition (SNC), said there will be no quick return by the opposition to the talks in Geneva if the current situation continues.
“The regime buried the truce yesterday,” Al-Abda said, speaking at a press conference in Turkey. He was referring to the strikes in Idlib. He also claimed that there have been more than 2,100 violations of the truce by government forces in the past 53 days. “There will be no quick return to negotiations if the current situation continues,” al-Abda said. The SNC is part of the Higher Negotiations Committee (HNC), the Syrian opposition coalition negotiating in Geneva. AlAbda’s comments come after HNC chief Riad Hijab said on Tuesday there can be no solution in Syria with Assad remaining in power and called for international monitors to observe a cease-fire in Syria. Hijab vowed to fight “even with stones” to depose Assad, shifting sharply to a tone of conflict over conciliation. In Geneva Ja’afari said on Wednesday that members of the opposition were “extremists” and “mercenaries.” He ridiculed Hijab’s comments, referring to him as “sulking” child, and denounced the oppo-
sition’s walkout as “politically immature.” He reiterated that his government’s position is that any political solution for Syria would include a broad-based unity government, an amended constitution and parliamentary elections. “Any group that thinks otherwise is living an illusion, is undermining the Geneva talks, is wasting their time and ours,” Ja’afari said. The HNC does not want Assad to have any role in a future Syria. UN special envoy Staffan de Mistura said he will take stock of where the talks stand on Friday. The calculated gamble by the opposition to jeopardize what diplomats have called the best chance in years to bring a diplomatic end to Syria’s fiveyear war reflects its growing frustration over unproductive peace talks and hundreds of government cease-fire violations in recent weeks. The opposition coalition accuses the government of preparing an assault on the city of Aleppo, ignoring its demands for the release of thousands of detainees,
and rejecting or avoiding requests for UN-led humanitarian aid shipments in recent weeks. It says those are signs of bad faith by Assad’s side and accuses Damascus of stalling for time in the Geneva talks. On Wednesday activists posted pictures of buses driving into the town of Madaya, which fell under siege to government and allied Lebanese Hezbollah forces last year. Images of starving residents and children in the town and other places have fuelled calls for ending sieges, warning that they threaten to kill critically ill or injured people. According to activists and a media report on Hezbollah’s Al-Manar TV, about 500 residents were to be evacuated on Wednesday. Madaya, northeast of Damascus, and Zabadani, near the border with Lebanon, have been besieged by government forces and allied militia for months. Fouaa and Kfarya villages in the northern province of Idlib have been blockaded by rebels for over a year. AP
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The World BusinessMirror
Obama’s Brexit call makes waves in UK, ripples in US
RESIDENT Barack Obama will urge Britons on Friday to keep their country in the European Union (EU), a rare intervention in the domestic politics of an ally that poses little risk to the president back home while irritating proponents of so-called Brexit in the United Kingdom.
Within the US, the possibility of a Brexit has caused barely a ripple as “the American public is busy thinking about Hillary and Donald Trump and Bernie Sanders,” said Mauro Guillen, who teaches international relations at the Lauder Institute and the Wharton School of the University of Pennsylvania. “Right now it’s too far away for the American public to think about something that’s going to happen in June that’s not even directly related to their lives.” Guillen, who opposes Brexit, thinks the US public will tune in closer to the referendum, which takes place after the last primary elections in the presidential campaign.
In between lunch with Queen Elizabeth II and dinner with Prince William and the Duchess of Cambridge, Obama is expected to weigh in on Brexit at a news conference with his British counterpart, Prime Minister David Cameron. There’s scant evidence that Americans are broadly aware of the debate in the UK or care about the outcome, and Brexit fans say they are unimpressed by the US president’s intervention. “I can’t think the British people will want to be told what to do by a rather unsuccessful American president who has had one of the least successful foreign policies in modern history,” Jacob Rees-Mogg, a euro-skeptic lawmaker from Cameron’s own Conservative party, told the House magazine, which is distributed to members of Parliament. Cameron has called a June 23 referendum on exiting the EU, a vote that also amounts to a test of public confidence in his leadership. Cameron’s government supports remaining in the EU and is hoping that Obama’s intervention can sway British voters. Cameron has also got the backing of businesses on both sides of the Atlantic, which oppose Brexit by huge margins, according to a survey by BritishAmerican Business, a trade group. “These things can be seen as sensitive and sometimes can be seen as intrusive,” Jeffries Briginshaw, CEO of the British-American Business Council, said in an interview. “We’re hoping that the voice of a wise, helpful friend is the tone that prevails.”
Brexit odds
The Obama administration says that it’s in the economic and security interests of the US to maintain a united Europe. Cognizant of the potential to inflame the debate in Britain, White House officials have telegraphed Obama’s position in advance, forecasting an analytical appeal for Britain to remain in the EU based on the economic benefits to both the US and the UK. Nonetheless, more than 30,000 Britons signed a petition to Parliament calling on Obama to somehow be banned from speaking about the issue during his visit.
Business opposition
UK voters have received plenty of American advice already. On Wednesday eight former US Treasury secretaries dating back to the Nixon administration warned in a letter published in the Times newspaper in London that Brexit would be a “risky bet.” BritishAmerican Business, which is part of Briginshaw’s group and includes companies, like Exxon Mobil Corp., 3M Co. and Citigroup Inc., previewed a survey of its members’ views on Brexit that it will publicly release on April 25. The poll found that 95 percent of respondents want the UK to stay in the union, though 89 percent said they don’t anticipate relocating from the country if voters opt to leave. Goldman Sachs Group Inc., JPMorgan Chase and Co., Coca-Cola Co. and Ford Motor Co. are among the American companies whose executives have publicly called for the UK to remain inside the EU.
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CHINA’S DEBT-FUELED ECONOMY RESEMBLES U.S. IN 2007-08, SOROS SAYS
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ILLIONAIRE investor George Soros said China’s debt-fueled economy resembles the US in 2007-2008, before credit markets seized up and spurred a global recession. China’s March credit-growth figures should be viewed as a warning sign, Soros said at an Asia Society event in New York on Wednesday. The broadest measure of new credit in the world’s secondbiggest economy was 2.34 trillion yuan ($362 billion) last month, far exceeding the median forecast of 1.4 trillion yuan in a Bloomberg survey and signaling the government is prioritizing growth over reining in debt. Soros, who built a $24-billion fortune through savvy wagers on markets, has recently been involved in a war of words with the Chinese government. He said at the World Economic Forum in Davos that he’s been betting against Asian currencies because a hard landing in China is “practically unavoidable.” China’s state-run Xinhua news agency rebutted his assertion in an editorial, saying that he has made the same prediction several times in the past. The Hungarian-born investor rose to fame as the manager who broke the Bank of England in 1992, netting $1 billion with a bet that the UK would be forced to devalue the pound. Malaysian Prime Minister Mahathir Mohamad called him a “moron” during the 1997 Asian financial crisis, saying he
was out to wreck the region’s economies. Soros, who began his career in New York in the 1950s, led his hedge fund to average annual gains of about 20 percent from 1969 to 2011. China’s economy stabilized last quarter and gathered pace in March as the surge in new credit helped the property sector rebound, while raising fresh question marks over the sustainability of the debt-fueled expansion. GDP expanded 6.7 percent in the three months through March, in line with the government growth target of 6.5 percent to 7 percent for the full year. Ma Jun, the chief economist at the central bank’s research bureau, said in a speech this month that recent data points, including real-estate investment growth, industrial value-added growth and producer prices, indicate the economic outlook is probably better than some economists forecast. The stabilizing trend isn’t giving investors “enough confidence,” as China seems to have relied more on government investment in state-owned enterprises to boost the economy, said Gao Xiqing, former vice chairman of the China Securities Regulatory Commission, in an interview in New York this week. China stepped up intervention in its financial markets after turmoil in its stock market roiled global markets at the start of the year and extended last year’s $5-trillion selloff, while the yuan fell to a five-year low. Bloomberg News
Republicans agonizing to face Trump convention
CONSERVATIVE members of Parliament Tom Pursglove (left) and Peter Bone (third from left) stand with Nigel Farage (second from left), leader of Britain’s UKIP party; and Nigel Griffiths, Labour Party politician, as they hold the application letter and documents outside the Electoral Commission in London on March 31. Grassroots Out submitted its application to the Electoral Commission for designation as the official “Leave” campaign in the European Union referendum. AP/KIRSTY WIGGLESWORTH
P
Editor: Lyn Resurreccion • Friday, April 22, 2016
OBAMA’S three-day stop in London comes as the British electorate is evenly split between the “remain” and “leave” camps, according to public opinion surveys. The Bloomberg Brexit Tracker puts the odds that the “leave” side wins at about 24 percent. London’s mayor, Boris Johnson, who favors Brexit, said on Tuesday that it was a “paradox” for Obama to weigh in. “I just think it’s paradoxical that the United States, which wouldn’t dream of allowing the slightest infringement of its own sovereignty, should be lecturing other countries about the need to enmesh themselves ever deeper in a federal superstate,” he told The Associated Press. In the weeks leading up to Obama’s visit, Cameron, as well as Governor of the Bank of England Mark Carney, and other officials have warned that a Brexit would harm the British economy. Chancellor of the Exchequer George Osborne said in a report released on April 18 that quitting the 28-nation EU would cost each Briton as much as £2,100 ($3,000) per person. US presidents have only rarely engaged so directly in a foreign election. President Bill Clinton traveled to Ottawa in 1995 to encourage voters in Quebec not to vote for sovereignty. By a margin of one percentage point, provincial voters sided with him. In the days before Scotland’s 2014 referendum on independence, Obama expressed the hope that that UK would remain “strong,
95%
Poll respondents who want the UK to stay in the union
robust and united.” Scottish voters agreed with him, opting to stay linked to Cameron’s UK. Obama is the latest in a series of international leaders enlisted by Cameron in the EU referendum debate. North Atlantic Treaty Organization Secretary-General Jens Stoltenberg visited the UK this month and expressed support for a united Europe—while emphasizing that British voters have the ultimate say.
‘Permanent invitation’
Obama “has a permanent invitation to come,” Sir Kim Darroch, the UK’s ambassador to the US, told reporters. “He’s a deeply respected figure in the UK.” Wary of appearing as meddling in what, for many, is an emotional vote, Obama is expected to take the same cautious approach as Stoltenberg, emphasizing that the decision is up to Britons. “Most people see him in broadly benign terms and so long as he keeps it vague, any intervention might be seen in terms of friendly advice from a concerned neighbor,” said Steven Fielding, professor of politics at Nottingham University. Obama benefits as well in comparison to his predecessor George W. Bush, who was viewed with something between bafflement and horror by Britons. While those campaigning for Britain to leave the EU have argued that no one will listen to an interfering American, the energy they’ve devoted to rebutting Obama suggests they don’t really believe it, said Simon Burns, a Conservative member of Parliament who supports staying in the EU. “If they think no one’s going to listen, why are they so upset about it?” he said. Asked if any other international figure could have a greater impact on the outcome of the Brexit vote, Burns thought for a moment. “Maybe the pope,” he said. Bloomberg News
W
ASHINGTON—At least four Republican US senators say they’ve decided to skip July’s party nominating convention in Cleveland to campaign in their home states. Several others say they haven’t decided whether they’ll make the trip, and at least one will boycott the event if Donald Trump emerges as the Republicans’ presidential pick. This year’s convention is shaping up as perhaps the party’s most pivotal—and contentious—in a generation, and Senate Republicans appear increasingly nervous about it. Many in the party are agonizing over the possible elevation of Trump or a contested convention that awards the nomination to someone else, either of which risks damaging the party and handing Senate control to Democrats. House Speaker Paul Ryan even used a Tuesday night appearance on CNN to call on his colleagues in Congress to attend what he said “could be a great historical exercise.” So far, most of the senators planning to skip the convention are being careful to avoid blaming Trump or the potential messiness directly. Sen. John McCain of Arizona, the party’s 2008 presidential nominee, said on Tuesday that he’ll be too busy running for his sixth Senate term to go to Cleveland, with his own primary just weeks later. “It’s not unusual for someone who’s up for reelection to be campaigning,” McCain said, when asked whether he would rather avoid a potentially disordered convention. “I have a primary that’s on August 30.” McCain is facing what may be his toughest reelection fight and has clearly been uncomfortable with Trump’s success. Two others not attending—Mark Kirk of Illinois and Kelly Ayotte of New Hampshire—also face tough races against Democrats. Even though those taking a pass on Cleveland say they just want to be on the campaign trail, staying away affords them other advantages. They might be able to avoid taking sides in what could be a protracted and bitter feud between Trump and Texas Sen. Ted Cruz, and perhaps distance themselves from any chaotic fallout—or an unpopular nominee. But their absences also diminish the likelihood of any grand unity gesture emerging from the convention, if many of the party’s senior leaders and most wellknown figures aren’t even in the room. Alaska’s Lisa Murkowski noted the convention, which is scheduled to run from July 18 to 21, “is very shortly before my primary. So I’m going to be home with Alaskans.” Asked whether fissures in the party over leading candidates Trump or Cruz contributed to her decision, she re-
sponded, “I won’t be there.” Of course, it isn’t unprecedented for senators to skip the event. In 2008, when the Republican brand was damaged in the wake of the George W. Bush administration, a handful of vulnerable senators skipped the GOP convention in Minneapolis, including Pat Roberts of Kansas, Susan Collins of Maine, Gordon Smith of Oregon, Elizabeth Dole of North Carolina and Ted Stevens of Alaska. Trump’s bullying rhetoric and Cruz’s history of bucking his party’s Senate leaders could lengthen the list of lawmakers planning to sit out this year’s convention. Sen. Jeff Flake of Arizona, who earlier endorsed Sen. Marco Rubio of Florida, said he’ll decide whether to go based on “whether it’s a Trump coronation or not. If it is, I see no reason to go.” Sen. Lindsey Graham of South Carolina, an unsuccessful presidential contender who has said Trump’s policy pronouncements endanger stability in the Middle East and leave foreign leaders “dumbfounded,” said he’ll decide later whether to attend based on “how crazy it looks.” Still, many other Republican senators are planning on going, including Majority Leader Mitch McConnell of Kentucky, Republican Whip John Cornyn of Texas and Rubio, who will arrive with some delegates won in primaries before his March 15 decision to suspend his presidential campaign. At least one senator running for re-election will also be there: Rob Portman of Ohio, who would have trouble skipping such a gathering in his home state. He is, however, planning his own parallel convention, which could offer him some separation. Some senior senators say they will go precisely because the wisdom of party elders may be sorely needed. “I’ve never missed one,” Orrin Hatch of Utah said, adding he plans to go even if the convention gets messy. “Especially, because they’re going to have to have some people with brains, you know. I shouldn’t say that.” Among those vulnerable senators on the ballot, a few are weighing making just brief trips to Cleveland. Sen. Roy Blunt of Missouri, who won his last election with 54 percent of the vote, said that if he goes it will only be for “a day or two.” He’s more focused on his August 2 Republican primary, he said, and doesn’t plan to be a convention delegate, anyway. Blunt said there’s some benefit to staying away for those up for re-election. If the convention is contested, he said, some will inevitably describe it as a “brokered” one, where powerful people in the party swoop in to help steer the outcome, rather than the delegates themselves. Bloomberg News/TNS
A10 Friday, April 22, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Is press freedom important?
R
EPORTERS Without Borders (RSF)—a Parisbased non-governmental organization—recently released its 2016 World Press Freedom Index. The Philippines ranked 138th out of 160 countries, with a score of 44.66. The lower the score, the more press freedom.
While our ranking went higher, our score was actually worse than in 2015 (41.19) and 2014 (43.69). We are just better, because the rest of the world has gotten worse. Our ranking puts us in the same group as Honduras—the murder-capital country of the world—and Venezuela, which is nothing to brag about. The problem, as RSF sees it, is the abuse that the press is subject to and, of course, they still cannot stop mentioning the 2009 Maguindanao massacre. But death threats and actual killings aside, we do well. In the categories measuring if multiple opinions are found in the daily press, if government interferes, the legal framework that protects press freedom and if there is selfcensorship, the Philippines rates high. The rankings even measure the quality of the infrastructure that supports the production of news and information, and that the Philippine government does not censor media, like the Internet. It is just all those pesky killings of journalists that the government never can seem to do anything about that brings down our score. On the abuse of journalists, we rank right next to some other countries, like Egypt, that have problems with press and media people dying. Maybe the question that should be asked is: Is freedom of the press and media important at all? China ranks 176th out of 180 countries. Its “abuse” score is 90.44. Chinese President Xi Jiping is on RSF’s list of “predators of press freedom”. Unfriendly and “independent” journalists not working for the approved media outlets are jailed. But since 1992, the Philippines has had 77 confirmed cases of honest journalists being killed for their work and 54 “unconfirmed” murders. Compare that with China, which, since 1992, has only two confirmed and three unconfirmed journalist killings, as reported by the global organization Committee to Protect Journalists. China may be repressive and oppressive to press freedom but being a member of the press or media is safer in China than in the Philippines. You see, members of the Philippine press and media are dying for your “press freedom,” and nothing is changing for the better. Politicians and government officials like the idea of having a ready and free forum to express their views. The public likes having multiple opinions and all the news possible every single day. But neither the politicians nor the public are paying any price to preserve and protect the freedom of the press. Certainly, some in the press and media are bad apples that do things they should not, as in any business. But maybe the next time a legitimate and honest journalist/broadcaster has his or her life taken for pursuing and reporting the truth, ask yourself what is being done to protect the right to press freedom.
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Inconsequential things James Jimenez
@
SPOX
ELLIECENTENO got me thinking when she tweeted, “can’t wait for the elections to be over so we can go back to tweeting about dumb shit like feelings and the weather.” She isn’t wrong. Compared to the fights we get into with each other now, over who’s the better choice for some elective office, “dumb” small talk about how hot it is would be a relief. As important as elections are, there is no denying that this season, in particular, needs to be followed by a time of quiet, devoted to rediscovering why we used to be friends before we started disagreeing about politics. A lot of this healing depends on us, of course. We need to leave the divisiveness of politics behind and focus, instead, on how we can work together to achieve common goals. I don’t suppose politicians will ever truly be reconciled, but this scorched earth environment we have now should not be allowed to persist after the winners have been declared.
For that to happen, however, winners must be magnanimous in victory and take the lead in working for reconciliation. More important, losers must not be dicks about losing. And that applies both to politicians and to us—their partisan supporters. Also on Twitter, I was practically called an idiot for saying that losers should nevertheless support the government of the elected candidates, while remaining true to their own principles. “Why should [the loser] support the elected winner if he has any conviction that he was the right choice?” Except in megalomaniacs, there
We are more polarized today than we have ever been. On one level, that disunity predisposes political leaders to tearing down everything they cannot claim to be their accomplishment. In the end, we—the governed— can move forward only with tiny steps that, with every succeeding election, we might even be forced to take back. is no contradiction between believing in oneself and in accepting the possibility that, perhaps, someone less “perfect” might actually be chosen for the job. A person motivated solely by ambition might not be able to see that, but one who aims primarily to serve would still be of service, whether or not he or she wins. To say that such dedication to service equates to idiocy is to perpetuate exactly the kind of thinking that hobbles this nation and locks it into a perpetual
state of finger-pointing, and crass politicking. We are more polarized today than we have ever been. On one level, that disunity predisposes political leaders to tearing down everything they cannot claim to be their accomplishment. In the end, we—the governed —can move forward only with tiny steps that, with every succeeding election, we might even be forced to take back. A good loser, willing to shelve his or her ambition so that political rifts can be healed, could change that. In turn, that could change the rest of us, as well. On another level, unless we deliberately quit putting political views at the top of our criteria for friendship the way some of us do now, we’re all going to end up just insufferable to each other. Who would want that? So, as soon as the circus leaves town, chill. We can all do so much worse than occasionally tweeting about inconsequential things, while the world sorts itself out around us and our friends. James Arthur B. Jimenez is director of the Commission on Elections’s Education and Information Department.
Opinion BusinessMirror
opinion@businessmirror.com.ph
Friday, April 22, 2016 A11
Agricultural policy must focus on technological innovation Leonardo A. Lanzona Jr.
EAGLE WATCH
E
CONOMIC development requires continuous introduction of new and better technology to an existing industry. Most households in the Philippines depend on agriculture for their livelihood. Improvements in agricultural technology are then necessary to increasing farmers’ income and reducing poverty. At the same time, economic development also requires continuous diversifying and upgrading from existing industries to new, more capital-intensive ones. A feature of development then is structural transformation, which leads to a declining share of agriculture in value added in the economy (share of GDP) and employment (share of the labor force). Without such a structural transformation, the scope for sustained increase in per capita income will be limited. Hence, innovation and structural transformation are two elements of the same pod. The Philippines has actually embarked on structural transformation program, which had been the source of much of the growth in the last few years. Named the Manufacturing Industry Roadmap, this program has identified industries viewed as crucial to the resurgence of the manufacturing sector. However, despite its laudable achievements, this program seems to equate growth with industrial expansion. While strides have been made in reducing discrimination against agriculture, particularly through social protection programs, the current manufacturing program of this administration would appear to support the industrial and urban bias that has itself produced a very large economic distortion. Like previous attempts of industrialization in the country, the main weakness of the road map is its refusal to recognize that the basic cause and effect of a sustainable transformation is a rising productivity of agricultural labor. Advocates of industrialization mistake the relative decline of agriculture as a signal to ignore the sector and starve it of investment resources and policy attention. However, history tells us that the only sustainable path out of poverty and into sustainable development is higher agricultural productivity coupled with a dynamic nonagricultural economy. Failure to invest in agricultural research and development, and in rural health and education has been a major weakness of many countries’ development strategies. For this reason, the food security of the Aquino administration would have made a lot of sense. Like other importing countries, the Philippines embarked on food-security programs, particularly in rice, comprising mainly of public investments in irrigation, research and extension, input subsidies on seeds and fertilizer, postharvest facilities and farm-price supports. This program can potentially contribute to the structural transformation if it leads to further agricultural production and establishes a process of income convergence between urban and rural areas, and between poor and nonpoor households. In other words, food-security programs are more successful when it raises agricultural labor productivity, and thus, complement structural transformation. Unfortunately, the reality is far from the expectation. Instead of creating a more dynamic rural economy, a decline in the share of agriculture in the country’s total output was observed. Furthermore, labor productivity in agriculture remained largely constant and significantly lower than the other sectors.
What explains this phenomenon? The answer lies in the objectives of the program. A central aim of the food-security program was to limit import dependency on rice. The recent volatility of international food prices has reinforced the mistrust felt within many foodimporting countries, such as the Philippines and Indonesia, toward international markets as suppliers of affordable food. One response then is to become less reliant on food imports. Concern about food security, thus, became transformed into concern about food self-sufficiency. But food security and food self-sufficiency are different things and they can be in conflict. One of the instruments of the rice-sufficiency program was precisely to establish quantitative restrictions (QR) on rice imports. The private sector can import rice only if permission has been granted from agencies implementing the QR. The goal was to ease the pressure on rice farmers to compete with subsidized and cheaper rice imports. Eventually, these restrictions have to be diminished because they have resulted in higher prices for the consumers (which includes farmers themselves) and greater market power for private rice importers. Apart from hurting consumers and raising income inequality, this protectionist stance created a disincentive to create, engage and adopt better technology. Even up to now, the rice farmers rely mainly on Green Revolution types of technologies whose more modern variants have proven to be less productive and less lucrative than its original varieties. Given that farmers are already on the frontier of this technology and that agricultural labor productivity remains low, the government should encourage further agricultural innovation as a way of increasing productivity and mitigating the likely adverse effects of reducing QR in the long term. More important, the innovation of innovation needs to be pursued, as well. The emerging reforms and changes in knowledge structure of agriculture explicitly indicate that the traditional agricultural research and extension system (which is heavily dependent on public research and extension institutions) cannot sufficiently address the challenges of the new trends. Instead, an agricultural innovation system approach should offer a holistic and multidisciplinary approach to innovation and processes, and incorporate emerging reforms and approaches for agricultural development. Several other relevant macroeconomic and meso-level factors, such as policy and legal frameworks, nature of human capital, physical infrastructure, finance and investment conditions, climate change, information and knowledge flows and, finally, food security and structural transformation, should be considered as important inputs of this agricultural innovation system. Leonardo Lanzona Jr. is director of the Ateneo Center for Economic Research and Development and a senior fellow of Eagle Watch, the school’s macroeconomic research and forecasting unit.
My mother is 90 Tito Genova Valiente
ANNOTATIONS
M
Y mother turned 90 in March. She was 16 years of age when the Pacific War broke out. She remembers the day they were all gathered in front of the main building of the Sorsogon High School to be told to go home, and wait for instructions when the school would open again. She always looks back to the day she bid good-bye to friends.
When Liberation (for that was how it was called by their generation) came, she went back to school. She went to Manila to secure an ETC or Elementary Teacher’s Certificate. The country needed teachers and there was a rush to have them finish their education so they could be back in the classrooms. My mother was assigned, together with other very young teachers, to schools that
could be reached only by walking over rice paddies and crossing rivers and streams with strong currents. My mother was 24 years old when another war broke out: the Korean War. That was a seven-year lull after the end of the Second World War. She and her generation became all de facto veterans of war, experts in coping with the loss of lives and the absence of peace.
There were no cell phones during her teenage years. But there were dances. You had to learn the steps to be socially accepted. She has fond memories of a dear friend who would come home to the island from Manila for a summer break. The morning of his arrival, he would immediately go to my grandfather’s home. There, he would practice with my mother, from morning till dusk, the latest dance craze in the big city. When she met my father, a young adventurer who came with the priest from mainland Bikol, it was forever the tango. It was not the wild tango but the quiet, fluid one, where the “dip” was considered “heaven” by young men then. That was the closest you can hug and touch a woman in public and not be censured by the Church. She was pregnant during one of the great eclipses that covered the entire island of Ticao. She speaks of how the chicken and roosters came to roost when the world turned dark.
‘Solar Lolas’: Lighting up lives Atty. Patricia A.O. Bunye
WOMEN STEPPING UP WOM
S
INCE 1970, April 22 has been celebrated annually as World Earth Day with events all over the globe to demonstrate support for the protection of the environment. Many of the events are symbolic and are focused mainly on raising awareness about environmental issues. A welcome development is the increased attention to the role of women and girls as agents of change, particularly in underdeveloped communities, not just on World Earth Day, but every day.
Recognizing this, Diwata-Women in Resource Development Inc. (Diwata), together with the Philippine Mine Safety and Environment Association (PMSEA) and the Land Rover Club of the Philippines (LRCP) (collectively, the “Project Partners”), with the support of the Embassy of India in the Philippines, embarked on a project called “Tanging Tanglaw: Turning IP Grandmothers into Solar Engineers.” It aims to empower indigenous peoples (IP), particularly grandmothers (i.e., mature women who are no longer the primary caregivers of their families) by teaching them how to harness solar power to light up their communities. The project involves sending illiterate and unskilled women to the Barefoot College in Tilonia, India, to attend a six-month training course on solar engineering, specifically, fabricating, installing, repairing and maintaining solar lighting equipment. The Barefoot College was founded by Sanjit “Bunker” Roy, named one of TIME Magazine’s most influential people in 2010. The Barefoot College provides training in, among others, solar technology, in the belief that even the uneducated poor have the right to use technologies to improve their life and skills. Based on the many years of experience of the Barefoot College, wom-
en, rather than men, are specifically chosen because, after receiving their training, the women return to their villages to influence daily life and play a major role in their development rather than migrating to other places as men or younger community members might. The Project Partners arranged the logistics and assisted the Barefoot College and the government of India to select a group of four Aeta women, namely, Evelyn Clemente, Sharon Flores, Cita Diaz, and Magda Salvador (a.k.a the “Solar Lolas”) to undergo a six-month, live-in training at the Barefoot College. Evelyn and Sharon are from Gala, Zambales, while Cita and Magda are from Bamban, Tarlac. They departed for India on September 16, 2014, and returned on March 16, 2015. Their return has generated much interest from the media and the general public. During their six months of training at the Barefoot College with other women from different countries, the four grandmothers learned solar engineering and other livelihood activities, such as making mosquito nets and sanitary napkins. Learning complex new concepts and interacting with people of different cultures built their self-confidence and fueled their desire to be agents of positive change in their villages. One of the
Based on years of experience of the Barefoot College, women, rather than men, are specifically chosen because, after receiving their training, they return to their villages to influence daily life and play a major role in their development rather than migrating to other places as men or younger community members might do.
highlights of their training was a meeting with United Nations Women Executive Director Phumzile Mlambo-Ngcuka, at the UNDP Headquarters in New Delhi. Upon returning to their respective villages, each pair of solar grandmothers will be responsible for solar-electrifying 100 households. In the case of Bamban, Tarlac, electrification is currently nonexistent and most of the households use kerosene lamps for lighting. On the other hand, electricity is available in Gala, Zambales, but not all the families avail themselves of it. The Solar Lolas will assume the responsibility for installing and maintaining the solar panels and lamps for a minimum of five years. Once the communities are solarelectrified, qualitative improvements in the communities’ standard of living are expected, as the members will be able to use electrical appliances and gadgets, enabling them to become more productive. The children, in particular, will be able to study at night, learn to use computers, and possibly access the internet. In the year since the Solar Lolas returned from India, the Project Partners have worked hard to raise the amount of P2.6 million for each community of 100 households. As of this writing, the required solar equipment have arrived from India and are awaiting release by the Bureau of Customs. The Solar Lolas are expected to begin installing them in the two pilot communities within the next two to three months.
She was urged not to come out of the school where she was teaching. Eclipse was considered dangerous to pregnant women. She was in her mid 70s when she lost her eldest son. She was very calm all throughout the six months my brother battled with cancer. At the church, she wept but remained quiet. It was when the coffin was being lowered that she started to keen and finally uttered the words that mothers owned: Why have you gone ahead of me? Children bury their mothers, their parents. Mothers cannot understand when they are tasked to look over the grave of their children. Yesterday, I told my mother the Queen of England had turned 90 years old. She just looked at me. Queen Elizabeth carries the burdens of history. My mother bears the weight of her age and the tricks her mind works with the past. E-mail: titovaliente@yahoo.com.
The response to Tanging Tanglaw has been most gratifying. Support has poured in not just from corporations that are keen on adopting this business model as a corporate social responsibility initiative, but also from individuals who have contributed modest amounts to add to the project fund. Other like-minded organizations, such as the Filipina CEOS Circle, and even the Bases Conversion and Development Authority and Clark Development Corp., have stepped forward to provide support. It has been pointed out to that cheaper solar panels are available locally. However, our project does not simply involve providing lights, but also giving our Solar Lolas and their communities the means to improve their lives. I personally witnessed how shy and unsure our Solar Lolas were when they departed for India. Upon meeting them at the airport as they stepped off their flight, I was completely amazed at how their training transformed them into confident, self-assured and articulate role models for their communities. In communities abroad where the Barefoot College model has been successfully implemented, solar electricity has been provided to schools, hospitals, local administration offices, religious buildings and community centers. Most important, the projects have managed to reduce carbon-dioxide emissions, slow the negative impacts of deforestation and decrease air pollution from burning firewood and kerosene. It is envisioned that the local communities served by our Solar Lolas will derive similar benefits, if it takes one household at a time. More important, the Solar Lolas are now themselves beacons of light who have the power to change others. Patricia A. O. Bunye is the founding president of Diwata-Women in Resource Development Inc. She is also a senior partner at Cruz Marcelo & Tenefrancia and heads its Mining and Energy practice. E-mail her at po.bunye@cruzmarcelo.com.
2nd Front Page BusinessMirror
A12 Friday, April 22, 2016
‘Q1 GDP growth seen ranging from 6%-6.3%
L
B C O
@caiordinario
OCAL economists said GDP growth in the first quarter will not breach 7 percent and could fall within the 6 percent to 6.3 percent range, despite the expected hike in consumer spending due to the elections.
According to the World Bank, GDP growth for the whole of 2016 could settle at 6.4 percent. While the figure is more optimistic than the projection of economists, it is lower than actual GDP growth of 7.6 percent in 2010, when the country elected a new president. The tamer projection, according to some analysts, could be attributed to the possibility that the Philippines is no longer overly dependent on election spending to boost growth. “I think the economy has been gathering momentum to break free from the boom-and-bust cycle. The forward push has been accumulating through time,” University of
Asia and the Pacific School of Economics Dean Cid Terosa told the BusinessMirror. Terosa projected first-quarter GDP growth to fall within the 6 percent-to-6.25 percent range. The most optimistic forecast came from the Ateneo de Manila University’s EagleWatch, which projected first-quarter GDP growth to reach 6.3 percent. EagleWatch senior fellow Alvin Ang said, however, they will review their estimate by the end of April. Both Terosa and Ang believe that the Philippine economy is no longer trapped in the boom-andbust cycle. Ang said the country was able to escape from it during
7.6 % GDP growth in 2010
the Arroyo administration. University of the Philippines (UP) economist Ernesto Pernia, however, said the country has not yet graduated from the boom-andbust cycle. “I cannot say that the boom-and-bust cycle is a thing of the past. It depends largely on what the next administration will do [to sustain growth],” Pernia said. The UP economist projected GDP growth in the first quarter to settle at only 6 percent. Boom-and-bust cycles occur when the economy experiences strong growth one year and weak growth the next. In the case of the Philippines, growth “booms” during elections years. Earlier, the World Bank said
t h is yea r’s GDP g row t h w i l l reach 6.4 percent due to the presidential elections and increased domestic spending. Increased government spending for the elections, coupled by strong domestic spending due to low commodity prices, will be the biggest growth driver for this year, according to the World Bank. In 2010, which was an election year, the Philippines posted the highest economic growth rate in over three decades at 7.6 percent. Data from the Philippine Statistics Authority showed that, in that year, the highest growth among the sectors was “capital formation,” which grew 31.6 percent from -8.7 percent in 2009. Exports of goods, which contracted by 11.2 percent in 2009, recovered in 2010. In that year, outward shipments of Philippine goods rose by 24.7 percent in terms of value. The country’s import bill also grew by 23.4 percent.
I think the economy has been gathering momentum to break free from the boom-and-bust cycle.” —T
www.businessmirror.com.ph
SALES OF MITSUBISHI VEHICLES IN JANUARY TO MARCH UP 23.8% B C N. P
M
@c_pillas29
ITSUBISHI Motors Philippines Cor p. (MMPC) said its sales in the first three months of 2016 grew 23.8 percent to 14,688 units, from 11,849 units recorded in the same period last year. The company said in a statement that its market share also improved to 19.18 percent, from 18.84 percent in the first quarter of 2015. Sales of passenger cars rose 22 percent compared to the previous year’s sales of 4,564 units. The volume of light commercial vehicles (LCV) sold by Mitsubishi also grew by 24.5 percent, due to the popularity of the Montero, which accounted for almost half of the LCV sales. The company’s performance was also driven by strong demand for the Mirage, Mirage G4 and all-new Montero Sport. Locally manufactured units, such as the Adventure and L300, were also top volume sellers, according to MMPC. Mitsubishi’s sales during the period tracked the performance of the entire automotive industry, which recorded sales
4,564
Number of passenger cars sold by Mitsubishi in the Philippines
growth of nearly 22 percent. According to a statement by the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) and Truck Manufacturers Association (TMA), car sales reached 76,479 units from January to March 2016. This is a 21.6-percent improvement over the same period in 2015, when sales were at 62,882 units. Passenger cars saw a 19-percent increase in the first quarter, with 25,051 units sold. In March alone, 11,345 units were sold in this segment compared to the 9,819 units notched in the same month in 2015. Commercial vehicle sales increased by 23 percent in the same period, crediting the healthy growth to infrastructure improvement activities.