Issuu

“Election year or not, the VFW will not tolerate anyone berating a Gold Star family member for exercising his or her right of speech or expression.”—Veterans of Foreign Wars leader Brian Duffy, who called Republican presidential nominee Donald Trump out of line for his repeated criticism of a bereaved Muslim-American military family. AP

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“His son died 12 years ago. If I were president, his son wouldn’t have died, because I wouldn’t have been in the war, if I was president back then.”—Donald Trump, on Fox News Channel’s Hannity, in response to the political fallout from his criticism of the Muslim-American family of a US Army captain killed in Iraq. AP

“I’m guessing most women who are pregnant are doing that. I don’t think they’re sitting around waiting for the CDC to split hairs and finetune it to a specific area.”—Dr. Peter Hotez, a tropical medicine expert at the Baylor College of Medicine in Texas, after the Centers for Disease Control and Prevention warned pregnant women to avoid a Zika-stricken part of Miami. AP

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Wednesday, August 3, 2016 Vol. 11 No. 298

C.O.M.P. SAYS GOVT GETTING MORE THAN ITS FAIR SHARE OF MINING PROFITS

Miners hit back after new round of bashing By Jonathan L. Mayuga

INSIDE

@jonlmayuga

he Chamber of Mines of the Philippines (COMP) on Tuesday vowed to step up efforts to promote responsible mining, after President Duterte called on miners to shape up, then took a jab at the government for belittling the industry’s contribution to the economy.

Megaworld launches The Ellis for the younger generation

50-50

The profit-sharing formula between the government and the big miners under the FTAA COMP, the group of large-scale mining companies operating in the Philippines, said the government is getting “more than its fair share” of mining profits. See “Miners,” A12

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

Tetangco sees faster growth in April-June

e c ond - q ua r t e r TETANGCO: “Based growth probably on leading matched or exceeded indicators, we the 6.9-percent pace in the believe that the January-to-March period rate of growth will that made it one of the fastcontinue, so it is est-expanding emerging going to be about markets, according to the nathe same, if not tion’s central bank governor. better.” “Based on leading indicators, we believe that the rate of growth will continue, so it is going to be about the same, if not better” in the second quarter, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said in an interview on Monday in Bali, where he attended a conference of global central bankers. “Exports have slowed, but domestic sources of growth continue to be strong.” The Southeast Asian economy expanded at the fastest pace in almost three years in the first quarter, spurred by spending ahead of a presidential election in May. The government of President Duterte is forecasting growth of 6 percent to 7 percent this year. Central banks in Asia, from Indonesia to South Korea, have been easing policy this year to counter a slowdown in the global economy and the fallout from Britain’s shock vote to exit the European Union in June. The Philippine central bank lowered its benchmark rate to 3 percent in May as part of an overhaul of its policy framework. “We believe we have enough policy space to deal with exogenous shocks,” Tetangco said. See “Tetangco,” A12

property

Senate has safety nets for displaced OFWs

Back to basics: Embracing change in the streets of Manila

By Butch Fernandez @butchfBM

Linha Verde BRT in Curitiba, Brazil. Mario Roberto Duran Ortiz/CC BY-SA 4.0

property

Century Properties continues to raise the bar in luxury living

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Wheel power can move an economy forward By Michael Makabenta Alunan Special to the BusinessMireror

property

Conclusion

istory has shown that it i s t r a n s p or t at ion — whether it is ships, trains, buses, or whatever—that literally and figuratively moves a nation to progress, although it has ironically also been the source of conflicts and war. So, let’s take a historical tour and witness how transporta-

PESO exchange rates n US 46.9550

tion transforms society and the economy, and draw lessons on their relevance today as we push to move the country forward. ■ Role of ports and forts. In the colonial period, it was ships that discovered the New World and new territories that led to trade, like the Galleon Trade, specialization and later industrialization. However, it was also the same ships, turned into gunboats, that destroyed civilizations (i.e., Aztecs,

Mayan, Chinese empire, etc.). The British even created buccaneers and pirates, like Sir Francis Drake. As colonialism was anchored on an extractive relationship with the colonies, and not investing for local growth, the colonizers fought for territories, which was how the game was played. Thus, forts to protect ports, also from uprising natives, were built. Ports were central to colonial trade, Continued on A2

HE Senate Committee on Labor and Employment is eyeing safety nets for thousands of affected overseas Filipino workers (OFWs) and their families, after the Philippine Overseas Employment Administration (POEA) stopped the recruitment of OFWs by four of nine financially troubled firms in Saudi Arabia. Sen. Emmanuel Joel J. Villanueva, newly installed chairman of the committee, confirmed on Tuesday the Senate panel is lining up measures to bring back starving or broke OFWs from the Middle East. “ We are pushing to expand the government scholarship programs to returning OFWs, especially in skills development or tech-voc education,” Villanueva told the BusinessMirror. Pointing out that “most, if not all, of our OFWs go abroad because of lack of opportunity in the Philippines,” the senator said the Senate committee would also be “pushing for giving assistance and incentives” to displaced OFWs. He said the Senate panel would also work out measures so that OFWs who will invest in micro, small and medium enterprises will be provided access to resources and will be as-

The number of Saudi companies on the POEA watch list not paying salaries of OFWs for two months

sisted in “developing their capacity for innovation and potential to grow.” Villanueva also confirmed the committee is also mulling over steps to ensure displaced OFWs find decent jobs back home. “Problems, such as this, only strengthen our cause to create the Department of OFWs that would cater to the needs of our overseas workers.” As of now, he said, “what we have are Department of Labor and Employment [Dole] Assist Well Centers, where the workers can inquire about the available jobs in the country.” “However, we won’t stop there,” Villanueva added. “In the Senate, we already filed a bill institutionalizing cluster-based programs and projects through interlocal cooperation and people’s participation.” He said the bill enjoins local government units (LGUs) to gather their resources and coordinate with the private sector to bring in investments and create more jobs.

n japan 0.4587 n UK 61.9008 n HK 6.0509 n CHINA 7.0691 n singapore 34.9914 n australia 35.3759 n EU 52.4300 n SAUDI arabia 12.5210

See “OFWs,” A12

Source: BSP (2 August 2016 )

A2 Wednesday, August 3, 2016

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Wheel power can move an economy forward Continued from A1

and created a whole new culture. Thus, the word “opportunity” was derived from the word “port,” and scores of other derivatives emerged, like support, report, export, import, rapport, deport, etc. ■ Trains bring war, benefits. But when US President Abraham Lincoln built the 3,000-kilometer railway from East Coast to West Coast, cutting travel time from six months to six days, it angered the British Empire, whose port-based maritime trade was threatened. It did not forget losing to the 1776 American revolution, and, thus, incited the South, triggering the most stupid Civil War that cost over 600,000 American lives from 1861 to 1865. Southerners were made to believe they were threatened, and that they were different. On the contrary, Southerners were the same as the rest, as every American was distinct from each other, being all migrants, as Irish settlers, Italians, Germans, Jews, etc. This did not stop Lincoln from building railways, even planning one for the South, despite irritations from bandits like the Jesse James brothers, who were romanticized as Southern heroes, but were actually antidevelopment for robbing trains and banks. He showed leadership par excellence. Imagine, the paradox of straddling the divide of waging a war, while uniting America toward industrialization and railways, which were ironically the same issues that triggered the war. Free-market philosophy would

tell him why build in frontier lands when there was no market yet. For Lincoln, building for the future was the right thing to do. On the contrary, the market followed, as cities sprouted along the way. He also disarmed the South with his anti-slavery propaganda, but most Americans then were not really serious about race issues, being preoccupied with ethnocentricity and survival. It took over 100 years after Martin Luther King’s assassination in 1968 when America woke up to race concerns. ■ Rise of cars and decline of trains. The entry of automobiles introduced a new lifestyle matching the emerging culture of individualism. A car meant freedom, convenience, power, privacy, Freudian sexual symbolism and many other feelings. This triggered a surge in demand that provided markets for oil firms. But railways were efficient, because they could carry massive loads and, thus, posed a threat to the car industry. However, the car industry tightened its alliance with oil producers. On the supply side, it develop new products, like buses for volume commuters and trucks to move huge cargo door-to-door, which railways could not offer. ■ “Wheels of fortune” shifting. On the marketing side, they inf luenced policies and adopt what we may call their Detroit model of development of building more roads to sell more cars, t hus ef fect ively ra i lroad ing railway plans. Locally, it’s the Toyota model of development, which meant more foreign loans

This file photo shows a visitors at the headquarters of the Department of Science and Technology (DOST) in Taguig City looking at a photo of the five-coach hybrid electric train (HET). The HET is being touted by the DOST as an upgrade of Philippine National Railways services. The P120-million HET project was developed by Filipino engineers from the Metals Industry Research and Development Center in 2013. NONIE REYES

for road building that paved markets for Toyota, etc., but none for Philippine National Railway railway, which was built as early as 1887, a decade before the 1896 Katipunan revolution. Meanwhile, railways are increasingly becoming inefficient and dependent on yearly subsidies. Germany spends €17 billion a year; Switzerland, €4.3 billion; France, €13.2 billion; China, $130 billion; Italy, €7.2 billion; Spain, €5.1 billion; the United Kingdom, € 4.5 billion; Japan Cumulative, $300 billion; and the Philippines, P21 billion. Railways are costly because of their complex systems of rail tracks, matching train coaches and power systems. This makes Francis R. Yuseco Jr.’s Intel-Track a better alternative, as it can operate

like a train, minus the rail tracks, coaches and power systems. And it only costs a fraction, or 2 percent of railway costs. ■ “Where there’s a wheel, there’s a way.” President Duterte is known for his willpower, while Vice President Maria Leonor G. Robredo for her heart for the poor. Both seem to have the best combination of not only alleviating, but eradicating, poverty. But they need a vehicle or a milestone program. Literally, Yuseco’s rapid bus transit provides the “wheel power” and the blueprint of building agro-industrial zones, farm estates and townships that can mushroom along the trackways nationwide. This is similar to Lincoln’s railway, which is also how the West was won.

As the road tracks can also carry big reefer vans and cargo trucks, marginalized farmers and fisherfolk, organized into cooperatives, can now have easier access to markets. As they produce more, earn more and cut off middlemen, consumers benefit with lower food prices, which also help reduce poverty. Informal settlers along rail tracks can undergo skills training for productive ventures and be mobilized to help in the minieconomic zones, farm estates and townships. They can be taught carpentry, masonry, plumbing, electrical skills, etc., similar to what President Franklin Roosevelt did during the Great Depression of the 1930s. Roosevelt created 4 million jobs

in over a month’s time, says Nick Taylor in his book When FDR Put the Nation to Work. After they were taught skills, they were tasked to build roads, bridges, schools, water systems, farm silos, etc. ■ Productivity, creativity to mushroom. We can expect a mushrooming of productivity and creativity not only in agriculture industry, but also in services. Agriand eco-tourist attractions can also be built near the trackways. All of this development will help reverse rural-to-urban migration and decongest the cities. Smuggling and tax evasion can also be regulated with Intel-Track’s smart computer system designed by former University of the Philippines cum laude and Prof. Hilary de Leon, chairman of Micrologics Systems Inc., which pioneered the wireless toll and fare collection, telemetry and the Supervisory Control and Data Acquisition system in the Philippines. It can service airports and seaports, and can track the rolling stocks, their contents, the specific merchandizes and quantity, and exact time loaded and unloaded. Tariff and customs duties can be monitored correctly, thus income taxes can be tracked accurately. Other gadgetry, from closed circuit television, Wi-Fis, etc., can also be installed. By learning from great leaders like Lincoln and Roosevelt, all it takes now is the willpower to realize that it is this wheel power that’s worth investing that can move the economy forward.

For comments and feedback, e-mail author via mikealunan@yahoo.com.

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Wednesday, August 3, 2016 A3

No more new licenses for contractors as Bello makes another move vs ‘endo’

By David Cagahastian

@davecaga

he Department of Labor and Employment (DOLE) has imposed a moratorium on the processing of new applicants for contractors and subcontractors, as the Duterte administration prepares to stop contractualization. Labor Secretary Silvestre H. Bello III issued Department Order 162 suspending all pending applications for registration of contractors or subcontractors, although existing licenses will

continue to be honored by the government until revoked. “All certificates of registration of contractors/subcontractors issued prior to this order shall be re-

spected, unless otherwise revoked through the exercise of the enforcement and adjudicatory powers of the secretary of labor and employment or his duly authorized representative,” Bello’s order read. However, labor groups continued to press the Duterte administration to make good on its promise to stop contractualization by repealing Department Order 18-A, which they perceive as a loophole used by employers to defeat the constitutional right of workers to security of tenure. Under Department Order 18-A, a contractor or subcontractor is not deemed to be engaged in the illegal practice of labor-only contracting for as long as such contractor or subcontractor has at least P3 million in capital in the form of tools, machinery,

We challenge the President to take decisive steps against contractualization at the policy level by passing a law that criminalizes the employment scheme and junking policies like the Herrera law.”—Crisostomo

equipment and real estate. The security of tenure of workers would only be with respect to the licensed contractors or subcontractors which engaged them, and not with respect to the corporations where they are actually rendering the service. According to militant group Anakbayan, these laws, which allow the operations of contractors

and subcontractors, should be repealed, otherwise, the pronouncements against the illegal practice of “endo” or end-of-contract fixedterm arrangements with workers will be a mere “empty show.” “We challenge the President to take decisive steps against contractualization at the policy level by passing a law that criminalizes the employ-

ment scheme and junking policies like the Herrera law, DOLE Order 18-A Series of 2011, and Executive Order 366, which allows contractualization,” Anakbayan Chairman Vencer Crisostomo said in a statement. “Contractualization leaves the workers’ families with almost nothing, places employees constantly under the fear of the instability of their jobs, leads to underskilled workers who have not developed during their six-month short employment, and prevents them from forming unions to further their rights,” he added. On Monday Mr. Duterte reiterated his policy against contractualization and warned corporations to follow labor laws and not wait for any inspection, which could result in the closure of their factories.

Nickel rises as Duterte tells miners to comply or shut up N ickel rose a second day, heading for the highest close in a year, as President Duterte indicated he wouldn’t balk in enforcing a pledge by the government of the world’s biggest supplier of nickel ore to clean up its mining industry. Duterte told mining companies to comply with environmental standards or close. Six miners, accounting for 8 percent of last year’s production, have shuttered so far. “Nickel is supported by the Philippine stories,” Richard Fu,

head of Asia and Pacific at Amalgamated Metal Trading Ltd. in London, said by e-mail. The metal for delivery in three months rose 0.9 percent to $10,830 a metric ton by 10:21 a.m. on the London Metal Exchange (LME). Prices have surged 28 percent since the start of June on concerns mines closing in the Philippines will hurt supply. Inventories of the metal in warehouses tracked by the LME fell for a fourth day to the lowest since October 2014. Duterte ratcheted up pres-

sure on the country’s miners, the world’s biggest suppliers of nickel ore, telling them either to comply with international environmental standards or shutter. Nickel prices headed for their highest close in about a year. “You obey or we will survive as a nation without you,” he told a briefing in Manila on Monday, saying the country can live without the revenue from mining. Duterte and his environment chief, Regina Paz L. Lopez, have unleashed a campaign to clean

ERC requires operators to explain unplanned outage of power plants 9,705 MW By Lenie Lectura @llectura

ower-plant operators, whose generating facilities unexpectedly shutdown last week, were ordered to report in detail to the Energy Regulatory Commission (ERC) the reasons for the outage that led to the thinning of power reserves in Luzon. Under ERC Resolution 4, Series of 2015, generating facilities are required to submit a report to the ERC within 48 hours from the occurrence of an unplanned outage. “For this particular reason, the ERC has reminded the plants that went on outage to submit the detailed reasons for the outage. Once the reports are submitted, the ERC will evaluate,” ERC Spokesman Rexie Digal said in an interview. The period to evaluate, she added, “depends on the submissions to be made” by the concerned power firms. As of press time, the commission said it was still verifying which among the power firms have submitted a report. The forced outage of several power plants, coupled with scheduled maintenance of some power plants, resulted in insufficient power supply, thus prompting the National Grid Corp. of the Philippines (NGCP) to place the Luzon grid in yellow and red alerts last week. A yellow alert is issued by the grid operator, NGCP, when contingency reserve is less than the capacity of the largest synchronized unit of the grid. In Luzon this is equivalent to 647 megawatts (MW), or one unit of the Sual power plant. A red alert, meanwhile, means that there is severe power deficiency. “The series of yellow/red alerts is the longest streak [seven days,

The available capacity of the Luzon grid as of Tuesday or from July 26 to August 1] since April 2004, when Meralco [Manila Electric Co.] first adopted the ILP [Interruptible Load Program],” Meralco Utility Economics Head Lawrence Fernandez said in an interview. Under ILP, customers with large loads, like commercial establishments, will be asked to operate their own generator sets if the grid operator projects a need to augment generation capacity in the Luzon grid. Through this, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply during the season. Whenever yellow alert is issued, Meralco advises its ILP participants to be ready to use their own generator sets should the need arise. As of Tuesday morning, the Department of Energy (DOE) reported that the 647-MW Sual Coalfired Power Plant (SCFPP) Unit 2, the 360-MW Kalayaan Units 3 and 4 are already back online, while the 300-MW Calaca Coalfired Power Plant Unit 2 and the 280-MW Malaya Thermal Power Plant (MTPP) Unit 2 are expected to supply additional power to the grid within the day. NGCP, meanwhile, declared having a normal situation for the three main grids—Luzon, the Visayas and Mindanao—as of Tuesday morning. The DOE is also closely coordinating with NGCP and the generators on the status of the plants that

are still out, including the 302-MW GN Coal-fired Power Plant Unit 1; the 382-MW Pagbilao Coal-fired Power Plant Unit 2; and the South Luzon Therma Energy Corp. Units 1 and U2, with a combined capacity of 245 MW; and the 180-MW MTPP Unit 1; while the 180-MW Kalayaan Unit 2 and the 250-MW Santa Rita Natural Gas Power Plant Unit 2 are on planned maintenance shutdown. As of 10:30 a.m., the available capacity in Luzon grid stood at 9,705 MW, while peak demand is projected at 8,542 MW, leaving the grid with more than 1,100-MW reserve capacity. Meanwhile, it is anticipated that power rates may increase due to insufficient power supply. “As a general rule, if supply is down and demand is up, it may drive prices,” DOE Spokesman Felix William B. Fuentebella said. When sought for comment, Fernandez said there “may be upward pressure on market prices this August.” The Meralco official was referring to electricity prices in the Wholesale Electricity Spot Market (WESM). “This is because of the successive yellow and red alerts experienced by the Luzon grid. This may eventually affect September generation charge,” Fernandez added. In areas hit by Typhoon Carina, NGCP reported that linemen were able to repair and completely restore the Magapit-Santa Ana 69-kiloVolt (kV) line, which serves the Cagayan II Electric Cooperative (Cagelco II) and its franchise area in Buguey, Santa Ana, Santa Teresita and Gonzaga in Cagayan province since Monday afternoon. The National Electrification Administration also said there are towns and barangays that were scheduled for restoration in the franchises of Cagelco and Ilocos Norte Electric Cooperative.

up mining in the Philippines and vowed to close operations if a government audit shows they fail to meet the required norms. The country is the top supplier of nickel ore to China, where the material is used to make stainless steel.

“I can forego the P40 billion [$850 million] I collect from you guys,” said Duterte, who took office on June 30, referring to mining companies. “The Filipinos will survive without you.” Duterte defended his environ-

ment secretary. “You try to castigate Gina Lopez for being strict and yet you destroy the land, destroy the soil,” he said, without identifying anyone. “You get rich at the expense of our native land. Do not do it. I will not allow it.” Bloomberg News

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Obama meeting Singapore PM, looks to boost TPP trade pact

he prime minister of Singapore is joining President Barack Obama at the White House to celebrate the 50th anniversary of US diplomatic relations with the Southeast Asian city-state. But the two leaders will also discuss a shared cause with less rosy prospects—the Trans-Pacific Partnership (TPP) free trade deal. Singapore, a close US partner, is one of the 12 nations in the TPP, an agreement key to Obama’s effort to boost US exports and build strategic ties in Asia. But Prime Minister Lee Hsien Loong’s Washington visit starting Tuesday comes as opposition to the TPP intensifies in the United States. Both Republican contender Donald Trump and his Democratic rival Hillary Clinton, who are competing to succeed Obama as president, are against it. Speaking at the US Chamber of Commerce late Monday, Lee urged its ratification, saying the pact would give the US better access to the markets that account for 40 percent of global economic output. He said it would also add heft add heft to Washington’s so-called rebalance to the Asia Pacific. “For America’s friends and partners, ratifying the TPP is a litmus test of your credibility and seriousness of purpose,” he said. His sentiments are shared by Obama, who told Singapore’s The Straits Times in an interview published on Monday that the US can’t “turn inward” and embrace protectionism because of economic anxieties that have been drawn out by the presidential election. The Obama administration says it remains determined to try and win congressional approval for TPP, but the chances of achieving that in the “lame duck” session after the November 8 election and before the new president takes office January 20 appear slim because of the depth of political opposition, not least from Obama’s fellow Democrats. The deal would eliminate trade barriers and tariffs, streamline standards and encourage investment between the 12 countries that include Mexico, Japan, Vietnam and Australia. But critics say the pact undercuts American workers by introducing lower-wage competition and gives huge corporations too much leeway. Singapore, a city-state of 5.7 million people, is heavily dependent on international trade for its prosperity. In 2004 it became the first Asian nation to strike a bilateral free-trade agreement with the US. Last year the bilateral trade in goods totaled $47 billion, with the US enjoying a $10-billion surplus. Singapore is also a strong advocate of the US security role in Asia, although it retains cordial ties with China, too. Under Obama, the US has deployed littoral combat ships in Singapore, and last December, deployed a P-8 Poseidon spy plane there for the first time, amid heightened tensions in the South China Sea. Lee’s meeting with Obama on Tuesday will be watched for reaction to an international tribunal ruling on July 12 that invalidated China’s historical claims to most of the disputed South China Sea. The US says the ruling is binding but China has rejected it. Southeast Asian nations have been reluctant to speak out against Beijing. Lee will be honored with a state dinner on Tuesday evening—the first held for a Singaporean leader since October 1985, when Ronald Reagan hosted Lee’s late father, Prime Minister Lee Kuan Yew. The US and Singapore opened diplomatic relations in 1966, a year after the US recognized Singapore’s independence from Malaysia. AP

Editor: Max V. de Leon • Wednesday, August 3, 2016 A5

Consumer shares are rallying in Southeast Asia’s worst market

nder the hood of Malaysia’s stock market, the worst performer in Southeast Asia this year, a record consumer rally is percolating. While falling oil prices and a scandal engulfing an embattled state investment firm have sent the benchmark equities gauge to near a one-year low relative to the MSCI All Country World Index, the Bursa Malaysia Consumer Product Index touched an all-time high last month. The gauge is up about 10 percent from a seven-month low reached in August 2015 on bets of a revival in spending, according to Affin Hwang Capital Asset Management Bhd. “We foresee a gradual recovery for domestic consumption in the second half of 2016,” said David Ng, chief investment officer of Kuala Lumpurbased Affin Hwang Capital, which manages $7.7 billion of assets. “We believe sentiment will improve” after consumption last year was hurt by a goods and services tax and the plunge in the ringgit, he said. Faced with an economy that’s projected to grow at the slowest pace in seven years amid weaker exports, the government took steps to spur consumer spending to put more cash in the hands of the nation’s 32 million people. Prime Minister Najib Razak raised the nation’s minimum wage, increased salaries for 1.6 million civil servants and cut compulsory worker contribution rates to the national pension fund. The nation’s central bank in July lowered interest rates for the first time in seven years. The MIER Malaysia Consumer Sentiments Index rose for a second quarter in the three months ended June, diverging further from the longest slump in the main gauge since 1998, while passenger car sales jumped 32 percent in June, the most

We foresee a gradual recovery for domestic consumption in the second half of 2016.” —Affin Hwang Capital in 15 months. Money-supply indicators have shown upward trends starting in late April, following a six-year downcycle, said Michael Greenall, an analyst at Kuala Lumpur-based CIMB Group Holdings Bhd. If the current uptick continues, it would be a positive sign for the equity market, he said in a July note. Clothing retailer Padini Holdings Bhd., which in May reported a 32-percent surge in quarterly profit, has rallied 43 percent this year to a record. Brewer Heineken Malaysia Bhd., whose earnings jumped 38 percent, is trading at levels not seen since 2013, while Nestlé (Malaysia) Bhd.’s stock price has never been this high in its almost 30-year existence as a listed company.

Near bottom

Danny Wong Teck Meng, whose Areca EquityTrust Fund beat 97 percent of peers over the past five years with a 10-percent annual return, said he has turned more aggressive in buying consumer shares poised for a recovery in earnings.

REtailers in Malaysia, like the one shown above, are enjoying brisk sales as domestic consumption rebounds. BLOOMBERG

“We have been buying selectively,” said Wong, CEO of Areca Capital Sdn., based in Petaling Jaya, outside Kuala Lumpur. “Consumer sentiment is pointing to an uptick; if the worst is not over, it would be near the bottom.” The Bursa Malaysia Consumer Product Index is up 3.1 percent this year, one of only three industry groups—the other are builders and finance companies—that have shown positive gains in Malaysia’s stock market. The consumer gauge retreated 0.2 percent at 9:21 a.m. in Kuala Lumpur. Not everyone is buying. International investors are attracted to higher growth markets in the region, said Alan Richardson, a Hong Kongbased fund manager at Samsung Asset Management. “As a stock picker I find it challenging to find growth stocks and in the hunt for yield, I can find higher

dividend-paying stocks in Singapore over Malaysia,” said Richardson, whose fund has returned 11 percent over past five years, outperforming 97 percent of its peers. “Essentially the key investing attributes I am looking for, I can find better alternatives in other Asean stock markets.” The FTSE Bursa Malaysia KLCI Index is the only decliner among its major peers in Southeast Asia this year, where measures in Thailand, Indonesia and the Philippines have rallied at least 16 percent.

1MDB woes

Last month US prosecutors moved to seize $1 billion in assets they say were stolen from 1Malaysia Development Berhad, or 1MDB, whose advisory board Prime Minister Najib Razak chaired until recently. Najib has denied any wrongdoing. The Monetary Authority of Singapore also said it seized S$240 million in

Singapore warns US credibility on line over trade pact

nited States’s credibility is on the line over a Pacific trade pact that faces a tough approval process in Congress, Singapore’s prime minister said on Monday, warning about risks to the US’s reputation in Asia if the deal falls through. As well as being an “economic game-changer,” the US-led Trans-Pacific Partnership (TPP), which does not include China, could “add substance to America’s engagement in the Asia-Pacific” region, Lee Hsien Loong said in a speech in Washington, D.C. The pact has been signed by the 12 member-nations, but is yet to be ratified by most of them. “For America’s friends and partners, ratifying the TPP is a litmus test of your credibility and seriousness of purpose,” Lee said. “Every one of the TPP signatories has had to make sacrifices in order to accept the TPP agreement, and jointly bring about this win-win outcome.” As the US presidential election draws closer, the TPP is at risk of being caught up in the wash of a growing antitrade mood, which has seen both two candidates for the White House state publicly they oppose the pact. If ratified and implemented, it would cover around 40 percent of the global economy.

Brief window

The Obama administration has said it’s committed to ratification and has highlighted a brief window after the election and before the new Congress takes effect as the best chance to get it through. The TPP is the centerpiece of President Barack Obama’s broader economic and military rebalancing to Asia as China’s clout grows. Lee is on a state visit to the US and will meet Obama. The World Bank estimates the deal could raise GDP by an average 1.1 percent in member-countries by 2030. It would be the biggest US trade deal since the 1994

LEE

North American Free Trade Agreement. The pact goes beyond typical trade agreements that focus mostly on reducing tariffs by highlighting stricter safeguards for patents and leveling the playing field for companies that compete with governmentbacked businesses. The issue is sensitive in the US because Democrat candidate Hillary Clinton only began voicing her concerns about it late last year. Virginia Gov. Terry McAuliffe recently said Clinton would seek to fix parts of the deal after winning the general election, but later reversed himself, and her campaign has said it’s not interested in renegotiating. If Congress fails to pass the TPP, it “would be a significant missed opportunity,” Australian Trade Minister Steven Ciobo said in a Bloomberg Television interview on Tuesday in Jakarta. “I do think that would lead to a worse outcome for not only all 12 countries involved in the TPP but also for the US,” Ciobo said, adding he was “cautiously optimistic” it would be ratified by Congress.

US trade representative Michael Froman last week said tweaking the deal is not an option as it “is a carefully balanced agreement.” Lee reinforced the point that TPP must pass as it stands, saying that “nobody wants to reopen negotiations.” “We know this has been politically difficult, it’s a very tough election year,” Lee said. “Economic uncertainty has led to concerns about jobs, worries about competition from overseas.” Those are “understandable, even valid concerns, but we hope all parties will focus on the longer term, bigger picture,” he said. Bloomberg NewsSingapore warns US credibility on line over trade pact. United States’s credibility is on the line over a Pacific trade pact that faces a tough approval process in Congress, Singapore’s prime minister said on Monday, warning about risks to the US’s reputation in Asia if the deal falls through. As well as being an “economic game-changer,” the US-led TPP, which does not include China, could “add substance to America’s engagement in the Asia-Pacific” region, Lee Hsien Loong said in a speech in Washington, D.C. The pact has been signed by the 12 member-nations but is yet to be ratified by most of them. “For America’s friends and partners, ratifying the TPP is a litmus test of your credibility and seriousness of purpose,” Lee said. “Every one of the TPP signatories has had to make sacrifices in order to accept the TPP agreement, and jointly bring about this win-win outcome.” As the US presidential election draws closer, the TPP is at risk of being caught up in the wash of a growing antitrade mood, which has seen both two candidates for the White House state publicly they oppose the pact. If ratified and implemented, it would cover around 40 percent of the global economy. Bloomberg News

assets from individuals linked to alleged fraud at 1MDB. It’s the latest chapter in the troubled company’s woes that contributed to the ringgit’s biggest annual drop since 1997 last year. Lim Tze Cheng, head of equity at Kuala Lumpur-based RHB Asset Management Sdn., whose RHB Smart Treasure Fund returned 13 percent in the past three years to beat 95 percent of its competitors, said the uncertain global outlook has also attracted investors to consumer stocks especially staples, which are defensive in nature. For Areca’s Wong, even as secondquarter corporate earnings may still disappoint investors, he is already buying for the recovery. “The worst is nearing an end,” he said. “People are still generating income, and consumption from the middle class would drive this recovery,” he said. Bloomberg News

Uber said to plan boosting resources for Asean

ber Technologies Inc. will redeploy 150 engineers from its China operations to other key markets such as Southeast Asia after, agreeing to sell its business in the world’s most populous nation, according to people with direct knowledge of the plan. The San Francisco-based employees will develop new features, such as mapping, as it boosts services for the region that includes Singapore, Thailand and Indonesia, the people said, asking not to be identified as the matter is private. Didi Chuxing said on Monday it will buy Uber’s operations in China, putting an end to a yearlong war between the world’s two largest ride-sharing companies. The China deal will also allow Uber to free up capital to double down on putting resources into other markets and hire more engineers locally in India, the people said. Uber has a total global work force of about 8,000, spanning engineering, marketing and operations. Uber declined to comment. Uber’s shift is a sign it won’t let up in its battle for customers elsewhere in Asia even after reaching a peace deal for China. The world’s most valuable start-up competes with Singapore-based Grab for ride-hailing customers in Southeast Asia, a region that also includes Malaysia and Vietnam, while also tackling Go-Jek in Indonesia and going head-tohead with Ola in India. Didi is in an alliance with Grab, Old and Lyft Inc. that unites four rivals to Uber. It’s not clear what impact the China deal will have on that alliance. Grab CEO Anthony Tan sent an internal memo to employees on Monday, reassuring them Didi’s victory showed that local companies are better positioned for dominance of the local market and he expected Uber to put more resources into the region. Grab operates in 30 cities across six countries. Having raised more than $15 billion and valued at $68 billion, Uber has a long bench of investors from venture capitalists and hedge funds to sovereign wealth funds. Since its inception in 2012, Grab has raised at least $680 million, based on disclosed information, with investors including Vertex Venture Holdings Ltd., Tiger Global Management Llc., Hillhouse Capital Management Ltd., SoftBank Group Corp., China Investment Corp. and Didi. Under the Didi deal, Uber and its backers will have a 20-percent economic interest in China’s largest ride-sharing company. Didi is also investing $1 billion in Uber. Bloomberg News

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A6 Wednesday, August 3, 2016 • Editor: Lyn Resurreccion

US air strikes aimed at Islamic State group in Libya launched

A S H I N G T O N —T h e United States launched multiple air str ikes against Islamic State (IS) militants in Libya on Monday, opening a new, more persistent front against the group at the request of the United Nations-backed government, Libyan and US officials said. Fayez Serraj, the head of Libya’s U N-brokered presidenc y council, said in a televised statement that American warplanes attacked the IS bastion of Sirte on the Mediterranean in northern Libya. No US ground forces will be deployed, he said. The precision strikes, which targeted an IS tank and vehicles, come amid grow ing concerns about the group’s increased threat to Europe and its ability to inspire attacks across the region, even though its numbers have been shrinking because of attacks from local forces and allied international troops. “The presidency council, as the general army commander, has made a request for direct US support to carry out specific air strikes,” Serraj said. “The first strikes started on Tuesday in positions in Sirte, causing major casualties.” The strikes mark the start of a more intense American role in the fight against IS in Libya, as the US steps in to assist the fragile, UN-backed government. They were the first strikes by the US on the group in Libya since February, and they are expected to continue. But officials said they expect the air campaign will last weeks, not months. Obama’s authorization for action in Sirte covers strikes, intelligence and surveillance, but not ground operations, according to a White House official, who wasn’t author ized to spea k public ly about the strikes and requested anonymity. Serraj said his government is joining the coalition against IS, adding, “This is the time for the international community to live up to its promises to the Libyan people.” He also noted that the strikes will not go beyond Sirte and its surroundings. He said any other foreign intervention is not allowed without coordination. His warning comes after several French commandos were k i l led f ight i ng IS m i l it a nt s. US, French, British and Italian special operations forces and military experts have been assisting Libyan troops fighting IS militants in eastern and western Libya. Pentagon Press Secretary Peter Cook said President Barack Obama authorized the strikes following a recommendation from Defense Secretary A sh Car ter and Gen. Joseph Dunford, chairman of the Joint Chiefs of Staff. Cook told reporters that US Africa Command will coordinate any strikes with the Libyans and that the new air campaign will last as long as the Libyans request assistance to eliminate IS from Sirte. The US is also providing airborne surveillance and intelligence. And a small team of US special operations forces is in an operations center in Libya—outside of Sirte—to help coordinate the airstrikes, according to US officials who were not authorized to discuss the matter publicly so spoke anonymously. Mohammed al-Ghasri, the commander of a pro-government militia, said his forces gave target coordinates of IS positions to the US While there are no US ground forces being used in connection with the latest strikes, Cook would not comment on whether other American special operations forces are currently in Libya. They have been routinely moving in and out of the country, meeting with Libyan groups. AP

In this August 1 photo released by Xinhua News Agency, a missile is launched from a guided-missile destroyer during a live ammunition drill in the East China Sea. AP

China holds live-fire navy drills in contested marine territories

EIJING—China’s navy has fired dozens of missiles and torpedoes during exercises in the East China Sea that come amid heightened maritime tensions in the region, underscoring Beijing’s determination to back up its sovereignty claims with force if needed.

The live-fire drills that began on Monday follow China’s strident rejection of an international arbitration panel’s ruling last month that invalidated Beijing’s claims to a vast swath of the South China Sea. That led to days of angry statements from Beijing, followed by live-firing naval exercises in the South China Sea and the launch of regular aerial patrols in the area. On Tuesday the Defense Ministry said the East China Sea exercises were aimed at improving the

UN: Accelerated Iraqi death sentences risk greater injustice

AGHDAD—Iraq’s attempt to fast-track death sentences handed out by the countr y’s courts will result in greater injustice, according to a statement from the United Nations (UN) on Monday. “Given the weaknesses of the Iraqi justice system,” the UN High Commissioner for Human Rights, Zeid Ra’ad Al Hussein said. “I am gravely concerned that innocent people have been and may continue to be convicted and executed, resulting in gross, irreversible miscarriages of justice.” The UN in Iraq has found “a consistent failure to respect due process and fair trial standards, including a reliance on torture to extract confessions,” Al Hussein added. Iraq’s justice system has repeatedly been criticized for a lack of transparency and corruption. Also on Monday, Iraq’s Prime Minister Haider al-Abadi ordered an investigation into allegations of government corruption raised

105 The number of people executed through Iraqi justice system, according to Amnesty International

in parliament during the questioning of the minister of defense. Ea rl ier t h is yea r a l-A bad i faced growing antigovernment protest s dem a nd i ng refor m. Protesters—many followers of powerful Iraqi cleric Muqtada alSadr—stormed Baghdad’s highly fortified Green Zone twice in the space of a single month. The protests largely dissipated after Iraqi forces retook the city of Fallujah, but unrest was reignited when an

Islamic State group bombing in a busy shopping district in downtown Baghdad killed at least 292 people on July 3. When al-Abadi visited the site, his convoy was chased away by angry crowds calling him a “thief.” In the face of increasing criticism for the lack of security in Baghdad, Al-Abadi created a committee last month to help accelerate the implementation of death sentences handed down by Iraq’s courts. Iraq also ordered the execution of five prisoners on death row after the Baghdad bombing. “Executions are not the solution and they do not address the root causes of crime,” rights group Amnesty International said in a statement last month. According to figures compiled by Amnesty, Iraq regularly ranks among the top 5 countries in the world for carrying out the most executions. Amnesty said so far in 2016, Iraq has executed at least 105 people. AP

“intensity, precision, stability and speed” of its military. “An information technologybased war at sea is sudden, cruel and short, which requires fast transition to combat status, quick preparation and high-assault efficiency,” the ministry said. The drills include ships, submarines, aircraft and coast guard forces, illustrating China’s growing emphasis on integrated training under realistic conditions. China’s navy has been closing

the gap with its US rival in both ship numbers and technology, including the deployment of advanced antiship missiles, nuclear submarines and the country’s first aircraft carrier. While global attention has been drawn to the South China Sea, where five governments exercise territorial claims overlapping with China’s, Beijing also operates extensively in the East China Sea, where it claims a string of uninhabited islands controlled by Japan. AP

Tweets are latest controversy for Miss Universe organization

AS VEGAS—Racist language in old tweets from the freshly crowned Miss Teen USA is just the latest controversy for the Miss Universe Organization, which suffered a round of turmoil last year over then-owner Donald Trump’s inflammatory comments against Mexicans. The new flap came over the weekend, shortly after 18-year-old Texan Karlie Hay was crowned Miss Teen USA in Las Vegas on Saturday. Social media users quickly unearthed an account with Hay’s name that featured the N-word in tweets from 2013 and 2014, and the organization was forced into damage control mode. “The language Karlie Hay used is unacceptable at any age and in no way reflects the values of The Miss Universe Organization,” pageant officials said in a statement, adding that Hay was “in a different place in her life” when she posted the tweets. “Karlie learned many lessons through those personal struggles that reshaped her life and values. We as an organization are committed to supporting her continued growth.” Miss Universe officials pointed to an apology Hay posted on Twitter and Instagram, in which she admitted using language that she wasn’t proud of and “is

not representative of who I am as a person.” Not all were satisfied with Miss Universe’s decision, with commenters taking to the official Miss Teen USA Facebook page to argue Hay was a poor representative of the organization and should lose her crown. The pageant empire has had a bumpy ride since last summer. Miss Universe was co-owned by NBCUniversal and Republican presidential nominee Trump until shortly after he made anti-immigrant remarks last year. “They’re sending people that have lots of problems,” Trump said about Mexico in a speech announcing his presidential bid. “They’re bringing drugs, they’re bringing crime. They’re rapists. And some, I assume, are good people.” The Spanish-language network Univision and NBC responded by cutting ties with Trump and saying they wouldn’t broadcast the Miss Universe pageant. Trump ultimately bought NBC’s stake, then sold the pageant to talent agency WME/IMG in September. The new owners have taken steps to rebrand the Miss Teen USA pageant, including scrapping the swimsuit competition and replacing it with an athletic wear segment. The move drew praise from observers who said it emphasized strength instead of physical appearance. AP

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India flooding kills 96, forces 1 million into relief centers G AUHATI, India—The death toll in flooding from heavy monsoon rains in India has climbed past 90, with about a million people taking shelter in government-run relief camps, officials said on Tuesday. Incessant downpours have damaged swaths of land, uprooted trees and snapped telephone cables in dozens of districts in the states of Bihar in the east, Assam in the remote northeast and Himachal Pradesh in the north. A total of 96 people have been killed in the flooding in the three states over the past week, according to state officials. At least 17 rare one-horned rhinos have been killed due to the flooding of vast tracts of Assam’s Kaziranga National Park, said Pramilla Rani Brahma, the state’s forest and environment minister. “Most of the rhinos killed are calves, separated from their mothers during the massive flooding,” Brahma said. The park had 5-foot-high floodwaters in some places, forcing many of the park’s animals, also including wild elephants, wild buffaloes and boars, to cross a highway to move to higher ground. The heavy monsoon rains have come after two straight years of drought in India. On Monday, landslides and heavy rains blocked highways leading to Tibet and Manali, a tourist resort in Himachal Pradesh state, with hundreds of people stranded for several hours before rescuers

17 The total number of rare one-horned rhinos killed due to the flooding of vast tracts of Assam’s Kaziranga National Park, according to India’s forest and environment minister

cleared the way, the Press Trust of India news agency said. In Bihar state, around 260,000 flood victims were taking shelter in more than 400 relief camps set up by the state government. At least 400 medical camps have been set up as well to aid people who have spent several nights outdoors after their homes were submerged by rainwaters. In Assam, where floodwaters started receding on Tuesday, some 3.8 million people have been affected by the floods, according to state authorities. More than 700,000 have taken shelter in 770 relief camps. AP

Yemen’s delegation leaves Kuwait after agreeing to UN deal

A NA A , Yemen—Yemen’s foreign minister said on Monday that his delegation is leaving Kuwait where the United Nations-mediated talks have been taking place for the past two months. Abdul-Malik al-Mekhlafi told reporters that his delegation is not quitting the talks and that his government has approved a UNproposed deal. He gave a deadline of August 8 for the rival party of Shiite rebels, known as Houthis, to give their approval. “The ball now is in the court of the Houthis,” he said, adding that his delegation agreed to the deal despite reservations. The rebels have so far rejected the deal which forces them to hand over their weapons and withdraw from the cities within 45 days of signing the agreement. UN special envoy Ismail Ould Cheikh Ahmed stressed that the delegation’s departure “is not a departure from the peace talks,” UN Deputy Spokesman Farhan Haq told reporters in New York. “He said he had agreed with the parties to keep the talks going until they agree on next steps in the coming days,” Haq said. C hei k h A hmed intend s to have intensive meetings with the Houthi delegation on their reaction to the plan “and see what progress he can make with their side,” Haq said. The Houthis and forces allied to the ousted President Ali Abdullah Saleh seized the capital Sanaa in September 2014, forcing the internationally recognized government to flee the country. A Saudi-led coalition has conducted an extensive air campaign against the Houthis since March 2015, pushing them out of southern Yemen, but failing so far to dislodge them from Sanaa and the rest of the north.

The Houthis, whose delegation remained in Kuwait, insist on a political share in a new national unity government and t he y oppose P resident A bed Rabbo Mansour Hadi, demanding to transfer his authorities to the new government. A member of the Houthi delegation, Hamza al-Houthi said, “The solution must be comprehensive and include all the political and humanitarian issues.” Ya hia Dawed, head of t he Houthi-allied General People’s Congress, accused Saudi Arabia of manipulating the talks, adding, “The Saudis are a main player in the talks and they have to decide: do you want peace or war?” This is the second round of talks to be held in Kuwait. The first round started in April and failed to make progress amid fundamental disputes over the agenda. A truce declared by the UN in April has been repeatedly breached by both sides. Fighting has been ongoing in several provinces including the surroundings of Sanaa and the besieged western city of Taiz. Meanwhile, the Houthis have carried out cross-border attacks into Saudi Arabia in recent days, killing border guards and civilians. On Monday Saudi Arabia said that four family members were killed by a cross-border missile from Yemen that struck their home in the southern region of Jizan. The attack comes one day after the Saudi-led military coalition said seven Saudi border guards, including an officer, were killed in a cross-border clash with militias. The Houthis say that the coalition has been violating the ceasefire and most recently carried out airstrikes targeting a border town called Harath on Monday. AP

A resident holds a fan with photos of Chinese generals near plain clothes security personnel in the background near the Tianjin No. 2 Intermediate People’s Court in northern China’s Tianjin Municipality on August 2. AP

Chinese human-rights activist receives suspended sentence

IANJIN, China—A Chinese court issued a suspended threeyear prison sentence to a humanrights activist charged with subversion of state power after a brief trial on Tuesday, the first publicly acknowledged hearing in a yearlong case shrouded in secrecy and involving hundreds of Chinese human-rights activists. T he of f ic i a l X i n hu a News A ge nc y s a id a c ou r t i n t he norther n cit y of Tianjin had passed the sentence on Zhai Yanmin, who was arrested in July last year as part of a countr y wide government campaign that paralyzed China’s activist legal circles. Roughly 300 lawyers and activists were initially seized and questioned before most were released. Zhai’s is the first of four cases expected to be heard this week after prosecutors announced in July they would try a lawyer, Zhou Shifeng of the Beijing law firm Fengrui—which worked extensively on human rights cases—and three activists who worked with the firm, including Zhai. More than a dozen others remain jailed, their legal status uncertain.

According to Xinhua, Zhai, 55, said in a court confession that the group of lawyers, citizens and petitioners who believed in “pushing the wall”—a Chinese e x pression for over t hrow ing the government—methodically hyped politically sensitive cases. They organized popular rallies dur ing controversia l humanrights cases to draw international attention and undermine the Chinese state, Xinhua quoted him as saying in remarks that echoed previous government accusations toward the group. Xinhua said the court was told that Zhai, 55, and the three others had “conspired and plotted to subvert state power,” and had “established a systematic ideology, method and steps to achieve it.” It said Zhai pleaded guilty and

would not appeal his sentence. Zhai’s three-year sentence was suspended for four years, meaning that although he won’t go to prison, he will have to live under considerable restrictions and supervision. He also lost all political rights for the same period, making him ineligible to run for local councils or other offices. He can be sent to prison to serve his sentence for disobeying the rules set for his release during the four-year period. A three-year sentence is the minimum allowed for those convicted of subversion, which carries a maximum sentence of life in prison. “It is an unprecedentedly light sentence...almost a symbolic punishment,” said Beijing political commentator Zhang Lifan. That may be a deliberate move by the ruling Communist Party, which permits no political opposition, to demonstrate that those who cooperate can be treated leniently, while harsh penalties await those who refuse, Zhang said. “The point is not that whether you committed any crime, but whether you obeyed or not,” Zhang said. The trial also fits a pattern established under the administration of President Xi Jinping to use more sophisticated legal means to attack perceived opponents as it maintains pressure on activists and non-governmental organizations. Police cordoned off the Tianjin No. 2 Intermediate People’s Court on Tuesday, one day after

protesters flanked by foreign diplomats demanded more information about the cases. The trial was attended by five foreign media outlets invited by the court and other observers, according to Xinhua, in an apparent attempt to address vocal criticism from the activists’ supporters about a near-total lack of transparency surrounding the cases. Many wives have said they and their retained lawyers have been denied access to the jailed activists for more than a year, receiving only occasional updates by word of mouth, while some family members seeking information have been briefly detained themselves. Zhai’s wife, Liu Ermin, was taken into custody on Sunday night and returned late Monday to her Beijing home, where she said she is kept effectively under house arrest by security agents outside her door. “It’s unfair, it’s too unfair,” she said in a text message upon learning of Zhai’s verdict. She added that she intended to appeal Zhai’s verdict but did not know how to reach his governmentappointed lawyer, whose identity has not been disclosed to relatives or in state media reports. It isn’t clear whether Zhai would immediately be allowed to return home. A lawyer and legal assistant recently released have been filmed apparently recanting their actions, but their whereabouts remain unknown. AP

Campaign to recall Venezuela president completes first phase

A R AC A S, Vene z ue l a— Electoral authorities on Monday certified that opponents of Venezuelan President Nicolas Maduro had gathered enough signatures to permit them to conduct a second petition drive aimed at removing the socialist leader from office. Officials said the opposition coalition successfully collected signatures from at least 1 percent of voters in each state—a requirement for pursuing a petition drive

calling for a recall election. The opposition now faces a much tougher challenge: It will need to gather signatures from 20 percent of Venezuela’s registered voters, or 4 million people, to force a recall election. And it will have just three days to get the signature drive done. With Venezuela’s economic troubles worsening, with tripledigit inflation and widespread shor tages of good and other goods, opinion polls say a large

majority of voters want Maduro gone. If Maduro’s opponents should succeed in defeating him in a recall vote this year, Venezuela would hold an election for a new president. If it happened in 2017, Maduro would be replaced by his vice president. Leaders of the ruling socialist party have said they will not allow the vote to happen before next year. Also on Monday, the country’s Supreme Court declared the opposition-controlled National

Assembly in contempt until three contested legislative seats are vacated. The congress swore in the three lawmakers last week in defiance of a Supreme Court ruling. Electoral authorities had certified the victory of the three lawmakers in December elections. But they were later denied their seats after allies of government alleged electoral irregularities. The Supreme Court has consistently struck down congressional legislation this year. AP

Wednesday, August 3, 2016

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Conflict within small Indian Muslim sect on circumcision of girls

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Britain’s E.U. nominee set to take on security portfolio

BRUSSELS—Britain’s former ambassador to France is set to take up the European Union’s (EU) security portfolio. EU Commission chief Jean-Claude Juncker wants Julian King to lead the executive arm’s fight against terrorism, organized crime and radicalization. The commission said on Tuesday Juncker would seek endorsement for the move from the European Parliament. King is a career diplomat who has spent several years working at EU headquarters in Brussels. He was nominated for commissioner after Jonathan Hill resigned in the wake of Britain’s vote in June to leave the EU. AP

Judge to weigh Ohio law aimed at Planned Parenthood funds CINCINNATI—A federal judge is weighing whether to continue blocking an Ohio law that diverts public money from Planned Parenthood. US District Judge Michael Barrett is scheduled to hear arguments on Tuesday in Cincinnati on the merits of the law and whether it should remain on hold. The law was set to take effect in May, though a temporary order suspends it from doing so until Friday. The legislation targets money that Planned Parenthood gets through Ohio’s health department. The money is mostly federal and supports initiatives that provide HIV tests, cancer screenings and other prevention services. AP

9 years, 3 trials later: NYC man pleads guilty to killing NEW YORK—Thirty minutes after a New York City man was shot and killed in a bodega in 2007, the police arrested a suspect in the case. Nine years later that same suspect has pleaded guilty to manslaughter. The New York Times reports on Monday that Carlos Vega’s guilty plea resolves the city’s longest unresolved case. The 33-year-old Vega’s brief court appearance caps a nearly decade-long legal saga to resolve Robert Gaston’s murder in the Bronx. The newspaper reports Vega saw 12 different judges and was tried three separate times. The Bronx criminal courts are notoriously slow. AP

Dethroned Miss Florida U.S.A. sues pageant for defamation MIAMI—A former Miss Florida USA winner is suing the pageant after organizers took her crown and accused her of cheating. The Miami Herald reports that attorneys for 24-year-old Genesis Davila filed the suit on Monday, asking a Miami-Dade circuit judge to issue an emergency injunction restoring her title. The suit also seeks $15 million for defamation. Davila was crowned on July 16 in Fort Lauderdale and then dethroned six days later. Pageant director Grant Gravitt Jr. cited an Instagram post showing Davila getting professional hair-and-makeup help, a violation of pageant rules. AP

Hazmat crew checking substance found in plane PHOENIX—Authorities say a hazardous materials unit is investigating an unknown substance found on plane that landed at Phoenix Sky Harbor International Airport after a flight from Mexico. Phoenix Fire Department officials say a hazmat crew was called out to the airport about 5 p.m. on Monday. The police say they were notified after a cleaning crew on the plane reported finding an unidentified powdery substance, and no adverse effects have been reported. AP

Suspect in Ohio officer’s fatal shooting wants trial moved MOUNT VERNON, Ohio—The attorney for a man accused of fatally shooting an Ohio policeman is seeking to move the trial, citing “extensive” publicity in the potential death penalty case. Herschel Jones III pleaded not guilty to aggravated murder and other charges in the January slaying of Danville Officer Thomas Cottrell. The 34-yearold Cottrell was found behind the village’s municipal building, after Jones’ ex-girlfriend warned police that he was “looking to kill a cop.” AP

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A Miami-Dade County mosquito-control worker sprays around a home in the Wynwood area of Miami on August 1. The Centers for Disease Control and Prevention has issued a new advisory that says pregnant women should not travel to a Zika-stricken part of Miami, and pregnant women who live there should take steps to prevent mosquito bites and sexual spread of the virus. AP

Zika outbreak prompts travel warning for area of Miami

IAMI—In a highly unusual travel warning, health officials advised pregnant women to avoid a part of Miami where mosquitoes are apparently transmitting Zika directly to humans. Health officials last Friday announced that mosquitoes have apparently started spreading Zika on the US mainland, citing four cases they strongly believe were caused by bites. Ten more cases were announced on Monday, even though Florida authorities have yet to find any mosquitoes actually carrying the virus. Of the 14 people infected, two are women and 12 are men. Eight patients showed symptoms of Zika, which can include fever, rash, joint pain and red eyes. The others had no symptoms. The disease is often so mild that most people don’t know they are infected. All 14 cases are thought to have occurred in Miami’s Wynwood arts district, a trendy, fast-gentrifying neighborhood of warehouses, art galleries, restaurants and boutiques. Rosemary LeBranch was doing laundry in Wynwood when health officials came to her house a few days ago and took urine samples from her, her daughter and her father. Her father, Gabriel Jean, tested positive for Zika, she said on Monday. He had already spoken with a doctor and was advised to wear long shirts and pants outdoors. “He said nothing hurts; he

The number of patients in Florida who showed symptoms of Zika, according to US health officials doesn’t have any pain. He doesn’t feel anything,” she said. More than 1,650 cases of Zika have been reported in US states. Nearly all have been the result of travel to a Zika-stricken country or sex with someone who was infected abroad, but now more than a dozen people have been infected in the US. Florida health officials said they have tested more than 200 people in Miami-Dade and Broward counties since early July. An emergency response team from the Centers for Disease Control and Prevention (CDC) will help Florida authorities investigate the outbreak, collect samples and control mosquitoes. Scott asked for a CDC emergency team to help Florida combat

Zika, which has been sweeping Latin America and the Caribbean in recent months and now may be gaining a long-dreaded foothold in the US. The White House said a team will be sent quickly. “We will continue to keep our residents and visitors safe utilizing constant surveillance and aggressive strategies, such as increased mosquito spraying, that have allowed our state to fight similar viruses,” Florida Gov. Rick Scott said in a statement on Monday. Government health officials warned pregnant women on Monday to avoid the Zika-stricken part of Miami and told couples who have been there recently to put off having children for at least two months, after the number of people feared infected through mosquito bites in the US climbed to 14. The CDC also said expectant mothers should get tested for the virus if they have visited the neighborhood since mid-June. Jordan Davison and Melissa Felix work for a cruise line and were enjoying their day off Monday looking at Wynwood’s spraypainted murals. “It’s not like a big thing, right?” the 25-year-old Davidson said. “It’s kind of freaky. There’s so much going on we didn’t know, didn’t really think about it. I might wear bug spray going forward.” CDC officials said they could not remember another time in the 70-year history of the diseasefighting agency when it told members of the public not to travel someplace in the US. Zika infections in pregnant women can cause severe brainrelated birth defects, including extremely small skulls. The global

outbreak has led to more than 1,800 serious defects. The virus can linger in the blood and urine for weeks and has been found in sperm for months. As a result, the CDC said men and women who have recently been in the affected area should wait at least eight weeks before trying to conceive a child. And men who have had symptoms of Zika should wait at least six months, the CDC said. The travel warning covers an area of about 1 square mile in Wynwood to the east of Interstate 95 and south of I-195. It’s large enough, health officials said, to provide a buffer around the suspected hot zone. The tropical mosquito that spreads Zika travels less than 200 yards in its lifetime. Dr. Peter Hotez, a tropical medicine expert at the Baylor College of Medicine in Texas, said the CDC should be more cautious and expand the travel advisory to all of Miami-Dade County. “If you’re pregnant or think you might be pregnant, avoid travel to Miami, and possibly elsewhere in South Florida,” he said. “I’m guessing most women who are pregnant are doing that. I don’t think they’re sitting around waiting for the CDC to split hairs and fine-tune it to a specific area.” CDC Director Tom Frieden said the narrowly drawn warning was dictated by science and not by any concern for Florida’s crucial tourism industry. He said it was based on the nation’s ability to contain previous outbreaks of other diseases carried by the same mosquito. “There wouldn’t be a technical or scientific basis to give a broader recommendation,” Frieden said. AP

Trump’s trap: GOP nominee can’t let go of perceived slights

ASHINGTON—For Donald Trump, it’s become a familiar pattern. The Republican nominee can’t let go of a perceived slight, no matter the potential damage to his presidential campaign or political reputation. Trump spent the days after winning the Republican nomination criticizing a US district court judge’s Mexican heritage. The morning after accepting the Republican nomination at the party’s convention, Trump relitigated months-old grievances with primary rival Ted Cruz. Now, he’s sparring with an American Muslim family whose son was killed in Iraq. Republican leaders have urged Trump to drop his attacks on Khizr and Ghazala Khan, who appeared at last week’s Democratic convention and harshly criticized the GOP nominee. It’s not just the optics of picking a fight with a military family that has GOP officials eager for Trump to move on, but

the timing of his attacks: Election Day is just three months away. Those who have worked with Trump say that in private meetings, he can often appear amenable to putting a controversy aside. But the businessman can quickly be drawn back in by an interview, especially if he believes he’s already answered the question, or if he grows irritated by commentary on cable television. “It’s just who he is,” said Stuart Jolly, a former campaign staffer and current political director for the pro-Trump Great America PAC. Others who have worked with Trump say the only way to ensure he moves on is to wait for him to tire of an issue or get drawn into another matter. Newt Gingrich, the former House speaker who has advised Trump, said the candidate’s inability to back away from a political land mine “makes him vulnerable.” “His whole experience up until running

for office was in a very combative New York media market,” Gingrich said. “He’s been doing it now for over 30 years. It’s a very deeply held habit.” Khizr Kahn delivered an emotional address at last week’s Democratic convention, with his wife standing by his side. The Pakistan-born Khan told the story of his son, US Army Capt. Humayun Khan, who was posthumously awarded a Bronze Star and Purple Heart after his death in 2004. Khan said that if Trump were president and enacted his proposed temporary ban on foreign Muslims coming to the US, a position Trump has backed away from in recent weeks, his son would have never been allowed into the country. He also questioned whether Trump had ever read the Constitution. Trump responded by implying Ghazala Khan’s religion preventing her from speaking at the convention, though she later said talking publicly about her late son was still too difficult. On Monday Trump tweeted that he

was being “viciously attacked” by Khizr Khan. Trump’s unwillingness to let the matter subside sparked outrage on Monday from a chorus of Republicans. Arizona Sen. John McCain, a former prisoner of war, said Trump did not have “unfettered license to defame those who are the best among us.” Rep. Mike Coffman, a vulnerable Republican in a competitive Colorado district, said he was “deeply offended when Donald Trump fails to honor the sacrifices of all of our brave soldiers who were lost in that war.” Missouri Sen. Roy Blunt said the Khans “deserve to be heard and respected.” “My advice to Donald Trump has been and will continue to be to focus on jobs and national security and stop responding to every criticism whether it’s from a grieving family or Hillary Clinton,” Blunt said in a statement. However, none of the Republican lawmakers pulled back their support of Trump’s White House campaign. AP

UMBAI, India—When Bilqis talks about having circumcised her daughter, she goes back and forth on how she feels—sometimes within the same sentence. The 50-yearold doctor defends what is widely known as female-genital mutilation within her small, prosperous Shia Muslim sect in India, saying it’s a mild version that amounts to “just a little nick. No harm done.” Yet, she also acknowledges regret and guilt at putting her daughter through a practice the United Nations calls a violation of girls’ rights. “It’s really nothing, it changes nothing,” repeats Bilqis, who asks to be anonymous, except for her religious name because of the personal nature of the subject. But she adds: “I have no doubt in my mind that it is not helpful.... If I had a young daughter now there’s no way I would have her circumcised.” The struggle within Bilqis and her Dawoodi Bohra community reflects a growing debate over the best way to address a custom that is proving stubbornly hard to eradicate. At least 200 million girls and women alive today have undergone some form of femalegenital cutting, according to the United Nations—70 million more than in 2014, because of increases in both population and reporting. And the UN predicts the number of victims will increase significantly over the next 15 years because of population growth. Faced with this prospect, experts in the respected international Journal of Medical Ethics in February proposed permitting small female genital cuts that “uphold cultural and religious traditions without sacrificing the health and well-being of girls and young women.” But this approach is already carried out in the Bohra community and is proving highly controversial. “They always say it’s just a nick and a touch, but there are incidents where things have gone horribly wrong,” says Masooma Ranalvi, who broke the silence around female-genital mutilation in her community last year with a series of online petitions that sought to ban it. Ranalvi remembers when she was 7, her grandmother promised her candy and ice cream. Instead, she was taken to a dingy room in a back alley. Her dress was pulled up and her legs and arms held down. A sharp pain followed. She came home in tears. She only understood what had happened in her 30s, when she read about femalegenital mutilation. The Dawoodi Bohras are an affluent trading community of about a million people concentrated mostly in Mumbai, but also seen across the United States and Europe. Observant men wear white and gold embroidered caps, and women a long, colorful tunic and a scarf over their hair. The Bohras are known for their liberal attitude toward the education of women, yet the community is also tightly controlled by an entirely male clergy. From Mumbai to New York, medical professionals perform circumcision for girls or khatna with the blessings of the religious head known as the Syedna. The procedure goes back to the community’s roots in Yemen. Circumcision has become a battleground for the two Bohra men vying for succession, the halfbrother and the son of the former Syedna. The half-brother says it is time to end the practice. The son says the tradition must continue and notes that Bohra men are also circumcised. Activists protest that the two cannot be compared because male circumcision has some health benefits. Alefiya, a 34-year-old social worker in the US, remembers the khatna being done by her grandmother’s sister in a cold basement in New York. It was awkward and painful, she says. AP

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ExportUnlimited BusinessMirror

Editor: Efleda P. Campos • Wednesday, August 3, 2016 A9

PHL designers set October 2017 as 2nd OBMM to Japan By Gliceria N. Cademia | Trade and Industry Development Specialist DTI-EMB

HE second Outbound Business Matching Mission (OBMM) is set to coincide with Tokyo Fashion Week in October 2017.

The decision was made during the Philippine designers’ meeting with the Department of Trade and Industry’s (DTI) Export Marketing Bureau (EMB) and Foreign Trade Service Corps (FTSC) on July 20 at the Innovation Hub of EMB. Philippine designers emphasized the need to have regular OBMs in Japan for design services, saying that, traditionally, clients observe during the first two years before taking orders in the third year. Philippine designers proposed

to conduct the 2017 OBM for one whole month with other events, like pop-up exhibit, seminars, designers’ talks and buyers’ week. They proposed a fashion show featuring celebrities and the hiring of publicists. Plans will be in consultation with Yoshio Yokobori’s renowned Japanese fashion and lifestyle professional, who was hired as consultant during the 2016 OBM. There should be one-on-one business meetings, and bigger space rented for proper storage of

products to show to buyers. In the meeting, Philippine designers, DTI-EMB and FTSC discussed the experiences, learnings, recommendations, ideas for future events and the next steps in promoting design capabilities and expertise after participating in the June 2016 OBM in Japan, particularly in the Good Design Marunouchi. The DTI-EMB hired Yokobori of Side Company Ltd. in Japan for the event.The event generated 55 business meetings during the OBM. The Exclusively by Hand Philippine Design exhibition was advertised in the social media and various web sites in Japan to generate more buyers and public interest to visit the booth at the expo. It is expected the leads through this business mission could generate $5,419,400 in six years. Assistant Director Anthony

B. Rivera made observations and learnings from the Japan OBMM. He said Japan has a very robust fashion and lifestyle market. The significant number of tourists contributes to the rise in retail growth. Branding is essential as experiential shopping is typical in Japan. He said advertisement can generate a lot of inquires and interest. Rivera reported US and Europe brands have strong markets in Japan; and that traditional retail spaces have a high demand for design-led international lifestyle and homestyle brands. He said outsourcing for design services is in demand and Japanese companies maintain a high level of trust in Philippine companies. He added that online shops are worth promoting. EMB Director Senen M. Perlada suggested coming up with better plans and preparations and more effective ways of promoting

the sector, which conclude selling products during the exhibit or even on line. Rita Nazareno, owner of Zacarias1925, said the three-day pop-up activity generated more leads and other buyers. She said Yokobori’s invited buyers/contacts were serious ones and perfect for the business-to-business (B2B) meetings. Ativo, a Japanese designer, is interested in Zacarias designs, the watermelon bag from Amina, and the product of Adantes. It is carrying the summer and midsummer collection of its pop-up exhibit in the summer of 2017. This negotiation was also outside of Yokobori’s network. Amina Alunan, owner of Aranaz de Lujo Inc., said a Japanese buyer is interested in having their company make new and exclusive designs. Perlada said developing the design-service capability of Philip-

DTI urges animators, game developers to tap FTA markets

HE Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI) urged the animation and game-development sectors, considered high-growth segments in the Asean and other partner economies that have free-trade agreements (FTAs) with the Philippines, to market their services to these trading partners. Anthony B. Rivera, EMB assistant director, hoped the participants would take advantage of the information they would get from the session. He also invited them to visit the EMB Library that has been converted into a coworking space open for local start-ups. Maria Teresa Loring, officer in charge of EMB-Services Division, presented to the participants the FTAs in trade in services. She said services exports play an important role in the Philippine economy and commitments are covered in various trade-in-services agreement. She briefed the participants on the existing FTAs to which the Philippines is a signatory, namely, Asean Free-Trade Area, AseanChina Free-Trade Area, AseanKorea Free-Trade Area, AseanAustralia-New Zealand Free-Trade Area, Asean-Japan Comprehensive Economic Partnership Agreement, Philippines-Japan Economic Partnership Agreement and Asean–India Free-Trade Area. She explained the difference between multilateral partnership agreement and bilateral trade agreement. Preference is given to bilateral agreement being mutually agreed by two contracting countries, like Asean-Korea, wou ld i nvolve com m it ment s composed of several countries, including Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam and Korea. Multilateral

Philippine tuna canners enjoy EU zero tariff

EXPORT Marketing Bureau (EMB) Assistant Director Anthony B. Rivera (standing, fourth from left, back row) and EMB-Services Division Officer in Charge Maria Teresa S. Loring (seated, fourth from left) meet with animation and game development officials and other participants to the Doing Business in Free-Trade Area information session held last quarter at the DTI International. Building in Makati City.

trade agreement and benefits can be enjoyed by all signatory Asean member-states and partner economies. L or i n g s a id s e r v ice s , u n like goods, have four modes of supply: 1) cross-border supply, which include any goods or services which are being transmitted online; 2) consumption abroad, which include foreign students studying in the Philippines and tourist foreigners awaiting of services in the coun-

tr y; 3) commercia l presence, which involves investment to another country and establishing a satellite office or marketing office anywhere in the world; and 4) movement of natural persons, which include people doing a certain activity for a specific period in a company based in another country. Adrian H. Sablan and Mark Andrew C. Herrin, resource persons from the Intellectual Property Office of the Philippines, advised

DTI-EMB conducts DBFTA in Caraga

HE Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI) held a series of seminars on Doing Business in Free-Trade Areas (DBFTA) and Generalized Scheme of Preferences (GSPs) on July 19 in Agusan del Sur; July 20 in Surigao del Sur; and July 21 in Agusan del Norte. The DBFTA program, which started in 2010, is an initiative to increase the awareness of businesspeople regarding the benefits of free-trade agreements (FTAs) and GSPs. Exporters and would-be exporters, along with participants coming from different sectors, attended the seminars to learn more about the preferential tariff treatments enjoyed by the Philippines. There were also discussions on the export opportunities and consumer trends in

pine designers is what EMB aims at, in capturing the interest and trust of the Japanese. Philippine designers said Good Design Services Marunouchi is a great location for its accessibility to the public and buyers, and its diversity of brands. The Philippine designers said they will join the Tokyo Fashion Week from October 17 to 23 if they are able to get a place like Good Design Marunouchi or get a showroom provided by the government. The group reiterated that without follow-up, Japan will forget Philippine designers. Perlada suggested to have another group consultation to better prepare for next year’s event and suggest to look for new possible partners. Perlada emphasized the premium given by the Japanese to commitment and personal business relationships.

JUSTINNE MARIE D. SANTOS, Trade and Industry development specialist from the Market Innovation Division of the DTI-EMB, presents an overview of the European Union market.

the European Union, the United States, Canada and other FTA trading partners of the Philippines. The Caraga region boasts of a variety of products comprised of agricultural crops, like bananas, coconuts and cacao; marine products, such as tuna, prawns and crabs; and forest products, like hemp

(abaca), furniture, rubber, gold and mineral ores. Locals were particularly interested in exploring means to add value to their products by improving their labeling and packaging and having enough access to modern facilities and technology. The speakers encouraged the participants

the animators and game developers on how to avoid infringement before applying for copyright of their original works. They said a company which contracted an animator to do animation with them, publish his or her work without the knowledge of the employer can sue the animator. In the area of financing, the Animation Council of the Philippines and Game Development A s so c i at ion , re prese nte d b y their Presidents Juan Miguel to maximize their resources and explore ways to preserve perishable products through canning, salting, drying or dehydrating, fermenting and oil extraction. They were advised to take advantage of the DTI’s available shared-service facilities (SSFs) nationwide, which provide machinery, equipment, tools, systems, skills and knowledge to micro, small and medium enterprises (MSMEs) under a shared system. Participants were also urged to know their target markets. Market trends worldwide now include health and wellness, uniqueness and individualism, and convenience. Keeping in mind these trends and experimenting around native products will work a lot to benefit exporters and would-be exporters. The speakers for the DBFTA sessions were Suraida U. Guro, assistant chief from the EMB; Justinne Marie D. Santos and Rudolph Jay D. Velasco, Trade and Industry development specialists from the EMB. Justinne Marie D. Santos

del Rosario and A lvin Juban, respectively, were upbeat about the possibility of the association or cooperative relending package through the Development Bank of the Philippines (DBP) Small and Medium Investment and Loans for Entrepreneurs in support to their micro and small entrepreneur members. Aldwin Yam of DBP said the bank may package a financing program exclusively for the creative industry. Gliceria N. Cademia

HE Philippines was included as a beneficiary country in the Generalized Scheme of Preferences Plus (GSP+) of the European Union (EU) on December 25, 2014. Under this scheme, the Philippines is given duty-free treatment for 6,274 products. One of these products is canned tuna. The zero tariff can be availed of by Philippine tuna canners using raw tuna caught by Philippine vessels or caught in Philippine waters. Local tuna canners can also use raw tuna caught by flag vessels registered under other GSP beneficiary countries, like Indonesia, under the “cumulation flexibility” of the EU GSP rules of origin. In this case, the Philippine tuna canner should request the Indonesian supplier of raw tuna GSP Form A as proof the raw tuna is of Indonesian origin. The Philippine exporter, however, must process the Indonesian raw tuna by way of cleaning, cooking, flaking, canning and packaging. This substantially transforms the raw tuna from Indonesia with a tariff code in Chapter 3 into canned tuna with a tariff code under Chapter 16. Under the Rules of Origin, or ROO, this is called “change in tariff classification,” which is a criterion for the grant of preferential tariffs. When ready for shipment, the Philippine tuna canner should also request the Philippine Bureau of Customs for GSP Form A as proof the canned tuna is originating from the Philippines and, thus, can avail themselves of zero tariff under EU GSP+.

Rafaelita Castro

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

AUGUST 3-8

Event: OBM to Thailand for the Franchise and Business Opportunities

2016 Attended by Leah Alejandro and Ingrid Javalera Venue: Bangkok, Thailand

AUGUST 8-9

Event: EMB-IdeaSpace MOU signing ceremony Venue: Innovation Hub, DTI International Building, Sen. Gil Puyat

Avenue, Makati City

AUGUST 10

Event: Training on Tradeline PH Statistical Component (internal) Venue: Philippine Trade Training Center, Pasay City

A10 Wednesday, August 3, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Europe’s stress tests fail again

n its latest round of bank stress tests, Europe has missed another chance to undertake the honest reckoning that its financial system needs. If the continent’s leaders want to strengthen their faltering economies, this charade must end.

The exercise, the first since 2014, is supposed to ensure that Europe’s banks can weather a severe crisis. This means probing their main weakness: their shortage of loss-absorbing equity capital. Lack of capital has hindered lending, undermined the European Central Bank’s stimulus efforts, and made the whole financial system vulnerable. The problem is that the tests, in effect, continue to turn a blind eye. They have to: There’s no clear way to remedy any big shortfalls they might find. Europe’s banking rules—thanks, in large part, to Germany’s reluctance to share risks—limit regulators’ ability to recapitalize banks, particularly with euroarea taxpayer funds. Flunking too many banks could therefore start a panic. The new tests’ worst-case scenario imagined a prolonged recession and commodity rout, but included no defaults on sovereign debt. The tests ignored Greek and Portuguese banks, which were among the weakest last time. The new tests didn’t even say which banks passed or failed—or how much capital they’d need to meet their (unduly permissive) regulatory minimums. Nonetheless, the results announced last week aren’t quite worthless. The troubled Banca Monte dei Paschi di Siena burned through all its capital in the adverse scenario—confirming that the European Union must give the Italian government some leeway in shoring up its banks. One of Europe’s largest banks—Germany’s Deutsche Bank—was among the worst performers. Its capital fell to less than €3 for each €100 in assets in the stressed scenario, hardly enough to maintain market confidence in a crisis. Maybe the vulnerability of its national champion will help Germany to see that recapitalization ought to be a priority. This means letting some institutions fail, setting higher standards for the rest, and promising that they will get the capital they need—from public euro-area funds, if all else fails. If that message comes through loud and clear, confidence will improve, perhaps allowing the banks to raise equity mostly from private investors (as US banks did in 2009). Four years ago Europe’s leaders envisioned a banking union in which they’d be jointly responsible for the health of the euro area’s financial system. They have backed away from that promise but the idea remains essential. They must try again, and the place to start is with an honest accounting of the problem. Bloomberg Editorial

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Letters from members Susie G. Bugante

All About Social Security

few Social Security System (SSS) members have written to ask for some clarifications and I would like to share the questions and answers with you.

1) Mr. Cruz (not his real name) filed his retirement-benefit claim in June 2015 when he was 62 years old. He is now asking why the computation of his pension started only from April 2015 instead of October 2013, when he turned 60. To qualify for the SSS retirementpension benefit, the member should be at least 60 years old, separated from employment or ceased to be self-employed, or is 65 years old, whether employed or not, and has paid at least 120 monthly contributions prior to the semester of retirement. Per SSS guidelines, the latest or most recent among the following situations shall be used in determining a covered employee’s date of retirement: date of 60th birthday;

month after semester of 120th contribution; date of separation from employment. In the case of Mr. Cruz, records show that his last posted contribution was in April 2015, which was also his separation date from his last employer. Hence, his date of retirement was made effective in April 2015. 2) Another pensioner who is living abroad requested SSS to send his pension to a new bank account that he opened, located in the country of his residence. SSS denied his request and he is asking why. The main reason for the denial of this request is that a pensioner’s single savings account should be opened only in an SSS-accredited bank in the Philippines. Pension

Based on existing policies, upon the death of a retiree-pensioner, the monthly pension can be transferred to his or her primary beneficiaries only. Primary beneficiaries are the legal dependent spouse and minor dependent children. If there are no primary beneficiaries and the five-year guaranteed period has already lapsed, no more survivorship or death benefit is due to any other beneficiaries. remittance to foreign banks is currently not in place yet. Second, any request by a pensioner to change his depository bank for his pension must be supported by a Pensioner’s Data Change Request Form that may be downloaded from the SSS web site to be submitted along with the old and new passbooks. 3) Ms. Reyes (not her real name) is a retirement pensioner for 15 years already. Since she is single and her parents are long gone, she wants to know if she can name her caregiver as her beneficiary when she passes away. Based on existing policies, upon

the death of a retiree-pensioner, the monthly pension can be transferred to his or her primary beneficiaries only. Primary beneficiaries are the legal dependent spouse and minor dependent children. If there are no primary beneficiaries and the fiveyear guaranteed period has already lapsed, no more survivorship or death benefit is due to any other beneficiaries even if their names are listed in the member’s list of beneficiaries. In Ms. Reyes’s case, she has been receiving her pension way beyond the five-year guaranteed period. As such, her caregiver will not receive any benefit even if the caregiver’s name is listed as one of the beneficiaries because there are no more benefits forthcoming except for the funeral benefit, which will be paid to whoever shoulders the burial of the member. For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS call center at 920-6446 to 55, which accepts calls from 7 a.m. on Mondays all the way to 7 a.m. on Saturdays. Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send comments about this column to susiebugante.bmirror@gmail.com.

Trump calls Clinton ‘the devil’ and says election ‘rigged’ in her favor By Sahil Kapur and Jennifer Jacobs | Bloomberg View

onald Trump’s rhetoric on the campaign trail grew even darker on Monday, after a new poll was released showing him trailing Democratic rival Hillary Clinton.

Criticizing Vermont Sen. Bernie Sanders’s endorsement of Clinton, Trump pulled no punches. “He made a deal with the devil. She’s the devil,” Trump said of Clinton at an evening rally in Harrisburg, Pennsylvania. Trump, who has come under withering criticism over his attacks on the family of slain Army Capt. Humayun Khan, also fired political adviser Ed Brookover on Monday. Brookover, who helped with planning for the Republican convention, confirmed his termination to Bloomberg Politics, but declined to comment further. A CNN poll released on Monday showed Clinton with a 52-percent to 43-percent lead over Trump in a head-to-head matchup taken after the Republican and Democratic conventions. Hours after the latest poll numbers were released, Trump told a crowd in Columbus, Ohio, that he worries the general election in November will be “rigged” against him, launching a fresh attack on the legitimacy of a US system his candidacy is premised on upending.

“I’m afraid the election’s gonna be rigged, I have to be honest,” the Republican nominee said. The remark comes after Trump complained about the upcoming presidential debate schedule. “As usual, Hillary & the Dems are trying to rig the debates so 2 are up against major NFL games. Same as last time w/ Bernie. Unacceptable!” the candidate wrote on Twitter. The debate schedule is set by the nonpartisan Commission on Presidential Debates, which said in a statement that it “did not consult with any political parties or campaigns” when setting the dates. Trump has repeatedly asserted that the Democratic primary was “rigged” against Bernie Sanders, a perception the Vermont senator fed for months before he endorsed Clinton on July 12. The billionaire real-estate developer riled up his base during the primary by complaining regularly about a “rigged” system as his GOP foes plotted ways to stop him at the convention even while he led the field in popular votes and del-

TRUMP

egates. He further escalated his criticisms in late April when his last two rivals, Ted Cruz and John Kasich, cut a deal aimed at starving Trump of delegates. Trump’s remarks have capitalized on a belief among conservatives that voter fraud is a rampant problem, even though studies find it to be extremely rare—31 credible cases have been identified out of 1 billion ballots cast from 2000 to 2014, according to one study. The comments also play on a long-running theme that has fueled Trump’s unlikely candidacy: a

growing distrust in US institutions. A Gallup survey in June found that Americans’ confidence was eroding in institutions spanning the presidency, the Supreme Court, Congress, television news, big business and organized labor. But what Trump critics saw was an attempt to lay the groundwork to delegitimize the result of the election if he loses. It wouldn’t be the first time for him: after President Barack Obama won reelection in 2012, Trump took to Twitter to blast the result as “a total sham and a travesty.”

Opinion BusinessMirror

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Of course US candidates have ties to Russia

Trump’s Ukraine gaffe actually makes some sense

By Leonid Bershidsky | Bloomberg View

he attempts by Hillary Clinton’s campaign to paint Donald Trump as the candidate of President Vladimir Putin has led to an intense search for the Republican nominee’s Russian connections. Not much has turned up. But Russian oligarchs are among the Clinton campaign donors.

PUTIN and Clinton

As of today, Trump’s links to Russia are tenuous. His adviser Carter Page once worked for the natural gas giant Gazprom. His campaign manager Paul Manafort once worked for the deposed Ukrainian president, Viktor Yanukovych, who is often described as pro-Russian, even though he spent most of his career trying to set Russia and the European Union against each other. Manafort also had unsuccessful dealings with a Russian billionaire, Oleg Deripaska, who is still trying to recover millions of dollars from him. Trump himself once sold a very expensive house in Florida to Dmitri Rybolovlev, who made billions selling Russian potash. “I mean I do that,” Trump said on ABC on Sunday. “I have lots of condos.” No prominent Russian-Americans have surfaced among Trump’s donors. Even Leonard Blavatnik, the owner of Warner Music, who made most of his fortune—estimated by Bloomberg Billionaires at $16.2 billion—in Russia in oil and other industrial assets and who sprinkled donations generously among Republican candidates, has not given anything to Trump. His wife, Emily, has pitched in $33,400 to the Democratic Party and the maximum for a personal contribution, $2,700, to Clinton. Two other Clinton donors are Maria Baibakova, who gave $2,700 and who was described by Politico as a “big player in Democratic Party politics,” hosting fundraisers and serving on policy committee; and Daria Zhukova, with the same contributions as Emily Blavatnik’s. Baibakova is the daughter of Oleg Baibakov, a close associate of Mikhail Prokhorov, the owner of the Brooklyn Nets and a dwindling number of Russian assets. The sketchy privatization of Norilsk Nickel, the world’s biggest palladium producer, made Prokhorov rich; Baibakov served as vice president of Norilsk Nickel and then ran the development arm of Prokhorov’s Russian investment vehicle, Onexim. Prokhorov has recently been in trouble with the Kremlin because of sensitive investigations published by a newspaper he owns. Baibakov is apolitical. “Doing politics in our country is not just boring and unsafe, it’s pointless,” he once said in an interview. So anyone looking for a Putin trail here will be disappointed.

Maria Baibakova, however, drew ridicule in Russia for a callous column in the local edition of Tatler magazine on how to treat household help. She warned, for example, against handing over old clothes to staff. The piece caused a storm on social networks, and Baibakova was forced to apologize: “The text is heavily edited and when I translate it to English, I can see it is insensitive and crude.” Russian is her mother tongue, though, and it’s not clear why the English translation might be needed. Zhukova’s connections to Putin are somewhat murkier. She is the wife of Roman Abramovich, whose $10.7-billion fortune is based on the sale of his majority interest in the oil company Sibneft to Gazprom—at a price that many considered inflated at the time. To avoid the kind of frontal attack Putin inflicted on the billionaire Mikhail Khodorkovsky, Abramovich played nice with Putin, serving for more than seven years as governor of the remote region of Chukotka and funding the post from his own pocket. Abramovich still owns a significant asset in Russia—a stake in the steelmaker Evraz. Zhukova, a major figure in the contemporary art world, runs a big art center in Moscow called the Garage. That makes Abramovich, who spends most of his time outside Russia, politically vulnerable and requires him to remain a Putin ally. He still has influence: He’s credited with helping Sergei Sobyanin become the mayor of Moscow, for example. Zhukova, like Baibakova, is a US citizen. That doesn’t change the origin of her money—and a certain lack of sensitivity to things that Americans may find offensive. In 2014 she was photographed sitting on a chair in the shape of a bound black woman. An online fashion publication released the photo on Martin Luther King’s birthday. Zhukova apologized, saying the chair was merely an art object and that she “abhorred” racism. There’s nothing wrong with these wealthy Russians’ affinity for Clinton: Both Baibakova and Zhukova profess to hold progressive views. Yet, it’s easy to imagine the uproar if they were Trump supporters. A Democratic-leaning pundits would rush to point out a Kremlin connection.

Leonid Bershidsky

BLOOMBERG VIEW

onald Trump presents an oversized target for anyone who wants to attack him for poor knowledge of international politics. His most recent remarks on Russia and Ukraine, on ABC’s This Week, have again invited sharp criticism because they are so far removed from the US government’s official line. But they are not as ignorant as many think: Like much that Trump says, they represent a politically incorrect dissenting view that bears some analysis. Here’s what Trump said about Putin: He’s not going into Ukraine, OK? Just so you understand. He’s not going to go into Ukraine, all right? You can mark it down and you can put it down, you can take it anywhere you want. When George Stephanopoulos tried to correct him, saying Putin was already there, Trump conceded: “OK, well, he’s there in a certain way.” Russia, as most of the world knows, has seized Crimea and sent troops into eastern Ukraine—a fact that has been confirmed numerous times and is trackable through Russian soldiers’ accounts on social networks. The fighting in eastern Ukraine, incidentally, has flared up again in recent months. Almost every day, several Ukrainian soldiers die. More than 600 of them have lost their lives so far this year. “In a certain way”? That must be the understatement of the year. Trump also breezily stated that “the people of Crimea, from what I’ve heard, would rather be with Russia than where they were.” One wonders how he knows that. In February the Ukrainian arm of the German market research firm GfK attempted what is, to my knowledge, the only independent post-annexation

survey of Crimeans’ attitude toward their sudden change of nationality. But the collected data was unreliable because the researchers conducted their survey over landlines; people would have been too wary of being overheard to speak their minds. The poll showed they were happy for Crimea to be part of Russia—but it’s not clear whether any other result would have been possible given Russian secret intelligence’s special attention to the peninsula. There is some anecdotal evidence that Crimeans had expected more from Russia. It was in Crimea that Prime Minister Dmitri Medvedev delivered, in response to a retiree’s question about when pensions would be indexed to inflation, a now infamous breezy reply: “There’s no money, but you hang on there, I wish you good health and a happy mood.” Yet, there’s no way to find out whether locals would vote differently in a fair referendum today than Russia said they voted in a disgracefully rigged one in March, 2014. But something Trump said immediately afterwards holds up better: And that’s under the Obama’s administration, with his strong ties to North Atlantic Treaty Organization (Nato). So with all of

Vladimir Putin is his economy’s worst enemy

ussian President Vladimir Putin urgently needs to revive his country’s economy. His greatest obstacle will be himself. While Americans argue about the extent of Russia’s intervention in the US presidential election, Putin is battling a recession at home. To that end, he has recently focused on the ruble’s exchange rate: A weaker currency could boost the competitiveness of Russian exports, and also help balance a budget that depends heavily for revenues on the ruble value of hard-currency oil and gas

exports. Some forecasters expect the Russian central bank to do its part by lowering interest rates later this week. Such tinkering at the margin, though, serves only to obscure an economic weakness more fundamental than the exchange rate, the price of oil or Western sanctions: Putin’s oppressive governance. His regime’s grasp on power depends too much on subverting the rule of law to enrich allies and punish opponents—an approach that has undermined a long list of businesses, from Mikhail Khodorkovsky’s Yukos oil

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company to, earlier this year, the RBC media group, which had the temerity to investigate Putin’s friends and family. This attitude toward private property sets the tone for all of officialdom. Any entrepreneur can become the target of authorities, from fire inspectors to criminal investigators, who demand payment on the threat of fines or even imprisonment—or simply shut businesses down on behalf of better-connected competitors. The disincentive to business is extreme: Why invest in the future if whatever you build can be taken away?

It’s, thus, no surprise that Russia’s economy is struggling. Companies are sitting on cash, investment is down, and local producers have failed to expand despite the help of a ruble devaluation and a ban on many Western imports. Output of food items that compete with imports was up only 1.8 percent in the first five months of 2016 compared with a year earlier. Economic growth is expected to remain below 2 percent for years to come, far short of the 5-percent-plus pace that prevailed for much of the 2000s. With popu lar d issatisfaction

these strong ties to Nato, Ukraine is a mess. Crimea has been taken. Don’t blame Donald Trump for that. Though many Americans don’t realize it, that was a bull’s eye. In February the Ukrainian parliament published the transcript of a Ukrainian National Security and Defense Council meeting that took place on February 28, 2014. The Kiev authorities knew Russia was preparing something in Crimea—and they decided not to fight it. One reason was that the Ukrainian army had been weakened by years of thievery and consequent underfunding. Another was that Western powers advised Ukraine against fighting back. As Valentin Nalyvaichenko, then head of Ukraine’s intelligence service, put it at the meeting, “Americans, Germans, all of them as one are asking us not to make any active moves because, according to their intelligence services, Putin would use it to start a large-scale land invasion.” The US stood by, and unofficially asked Ukraine to stand by, as Russia took Crimea. In reply, the US targeted some officials from Putin’s inner circle, broke off talks on visa liberalization and some military matters and banned certain technology exports to Russia—a weak set of measures that was only expanded to include capital market restrictions for state-owned Russian companies after pro-Russian rebels shot down a passenger plane over eastern Ukraine in July, 2014. Those restrictions—the only component of the sanctions that is unpleasant to Putin and his regime—would be lifted if Russia and Ukraine carry out a cease-fire agreement reached in Minsk in February, an agreement brokered by Germany and France, with no US participation. US officials cannot say publicly that they let Russia take Crimea unopposed to prevent a large-scale invasion of the rest of Ukrainian territory. It didn’t quite work: Putin

is in Ukraine “in a certain way.” But an invasion like the one in Georgia in 2008 did not take place. Nor can Ukrainian officials say openly that the US and Europe, despite continuing to pay lip service to Ukraine’s territorial integrity, have de-facto acquiesced in Crimea’s annexation. That would be disloyal toward the Western allies, who are propping up the current Kiev government with loans and technical assistance. Trump, on the other hand, has no qualms about saying openly what he thinks. His statements amount to no more than former Secretary of State Henry Kissinger—not a political naïf—has been saying ever since the invasion: Nobody in the West has offered a concrete program to restore Crimea. Nobody is willing to fight over eastern Ukraine. That’s a fact of life. So one could say we don’t have to accept it, and we do not treat Crimea as a Russian territory under international law—just as we continued to treat the Baltic states as independent throughout Soviet rule. The difference between the official US policy, which will probably continue under Hillary Clinton if she is elected, and the public statements of Trump (and Kissinger, with whom Trump has met during the election campaign) is mainly in the rhetoric —and in the stated willingness, or lack thereof, to reestablish a working relationship with Moscow sooner rather than later. Trump’s statements on Ukraine reflect a school of thought in the Republican mainstream, a realpolitik approach that many in Europe—where patience is fraying with the anti-Russian sanctions—would welcome. Clinton, who has a long-standing, respectful relationship with Kissinger, will probably be exposed to his views on Ukraine, too. She may eventually ignore them, but that doesn’t justify all the raised eyebrows about Trump’s Ukraine remarks.

growing and parliamentary elections coming in September, Putin recognizes the need for action. To generate ideas, he has created a council of economists including the respected former finance minister Alexei Kudrin. For all their differences, the economists agree on one thing: Russia cannot prosper without reforms aimed at strengthening property rights and easing the bureaucratic burdens on business. This would require, for example, creating a truly independent judiciary and sharply reducing the number of entities that have the

power to inspect and fine. Sensible as that recommendation may be, acting on it would have far-reaching consequences for Putin’s regime. If Russia is to have an impartial justice system, then the Kremlin elite can’t trump up charges against perceived enemies or take assets away from businesspeople who support the opposition. And if the opposition can’t so easily be silenced, Putin may have to submit to more competitive elections. In other words, reforming the economy requires fixing the political system, as well. Bloomberg View

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Wednesday, August 3, 2016

DoT prepares four-point program to decongest Naia

By Recto Mercene

@rectomercene

ongestion at the Ninoy Aquino International Airport (Naia) would soon be reduced, if not completely eliminated, once the Department of Transportation (DoT) starts rolling its four-point program to address the problem. “We will transfer General Aviation [GenAv] to Sangley, we will do it in stages and we’re prohibiting them from operating from 12 noon until 7 p.m.,” said Robert Lim, DoT undersecretary for TransportationAviation and Airports. “They can’t fly within that window to help decongest the use of the airport tarmac, runways and taxiways, while the private jets, business jets and VIPs can operate before 12 noon or after 7 p.m., Lim told the BusinessMirror on Monday night during the inaugural flight of an Ethiopian B787 Dreamliner from Addis Ababa.

He said the DoT had three meetings with GenAv operators, where they have arrived at the best approach to the issue, and the stakeholders have agreed to the proposal. “We will soon issue an administrative order regarding what was agreed upon,” Lim added. On the other hand, he said they also had a series of dialogue with the country’s big carriers on how to carry out parceling some of their flights so that some of them could operate at the Naia and the others at Clark. Lim said Philippine Airlines (PA L) and Cebu Pacif ic were

brought into the discussions and were asked to choose which of their flights would be brought to Clark. “Both of these carriers can help two ways—they can help decongest the Naia and help in the growth of Clark,” Lim said, adding the two airlines would soon come up with a decision on which routes their respective flights can take out of Clark. The third option is the one offered by the Civil Aviation Authority of the Philipines (Caap), where the latter adopts flights and processes on how to effectively and efficiently use runway 31 to accept more flights. The Naia has a main runway 0624 and a secondary runway 13-31. Both runways could not be used simultaneously if an aircraft is taking off on 06-24 and another one is to take off on 13-31. However, by sequencing flights, air-traffic controllers could simultaneously allow take-off on runway 06-24 and take-off on runway 31, facing Manila Bay, Lim said. “There are techniques of sequencing these flights, a process of entering airplanes for landing

and take-off, and it could add up to open the capacity of the Naia.” The fourth option, Lim revealed, involves a runway optimization study being completed by the British Company National Air Transport Society (NATS). “They were engaged by the government to study what could be improved at the Naia to increase flights and, once finished, we will see where we can improve the situation [at the premier airport].” Lim said NATS is using a computer simulation of the actual uses of the Naia, and the computer model would give NATS the idea where it can increase the flights. Currently, the Naia has 40 runway events per hour, which is the hourly number of landings and takeoffs. During a recent inter view, British Ambassador Asif Ahmad said NATS, formerly National Air Traffic Services, was able to increase the runway events to 60 per hour at Heathrow Airport, which he said could be adopted to the Naia, using the present runway configuration. NATS is the main air-navigation service provider in the United Kingdom and it also provides air-traffic control services to 14 UK airports. “There are many processes that we have adopted and, once started, they could help decrease congestion,” Lim said, adding the next step is to finish the study on the Naia privatization. “We’re headed that way, we have started the study last year and we will continue and review it and make a decision when the privatization would be made.” “There is definitely a decision this year, but the awarding would probably be done next year,” Lim added. Meanwhile, Ethiopian Airlines flight ET 628 from Addis Ababa via Bangkok flew in late at 8:45 p.m. on Monday night. The flight was carried out via a brand-new B787 Dreamliner. Ethiopia is the first African country to use the aircraft. Ethiopian Airlines has been flying between Manila and Addis Ababa for a year, initially starting with three flights a week and was lately increased to four times a week. The International Air Transport Association ranked Ethiopian as the largest airline in Africa in revenue and profit, according to Country Manager Solomon Bekele. The air carrier flies to 90 destinations across five continents. “The airlines has become one of Ethiopia’s major industries and a veritable institution in Africa,” Bekele added, saying the carrier has a fleet of 80 aircraft comprised of 14 B787, B777-300ER, B777200LR Freighter and Bombardier Q-400 with double cabin. “Ethiopian Airlines is the first airline in Africa to own and operate these aircraft,” Bekele said. Ethiopian started flying out of Manila in July 2015. Bekele said Ethiopian has joined Star Alliance 15 years ago. The alliance is the world’s largest and most prestigious network, enabling the carrier to enjoy seamless travel experience as it is allowed access to 18,500 daily departures in 1,316 airports in 192 countries. Guests at the event include Do T Undersec ret a r y R ober t Lim, Manila International Airport Authority General Manager Ed Monreal; PAL President and COO Jaime Bautista; Tourism Assistant Secretary Malou Japson; Fernando Miguel, minister counselor of Angola; and Christian Mahakwen of Nigeria.

Miners. . .

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In a statement, COMP said the Foreign Technical Assistance Agreement (FTAA) provides for a 50-50 sharing formula with the government. The statement, issued by COMP Communication Manager May S. Cacdac, added that when there is a windfall profit, the government still gets an additional share of 60 percent, when the windfall is over 50 percent. Under the Mineral Production Sharing Agreement (MPSA), the government gets a 45-percent share of earnings, depending on the prices of commodities. When prices are low, COMP said the government still gets more than mining firms. “The prevailing assumption that government only gets 18 percent from mining operations is completely false and baseless,” COMP said. According to COMP, it is “covered by a strict edict to safeguard our people, environment and country’s interests,” and vowed to continue to abide by the law and support the Duterte administration’s effort to weed out the irresponsible miners who conduct their business without regard for the law.

OFWs. . .

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Villanueva indicated the Senate panel is, likewise, mulling over measures to prevent more job seekers from being lured to work for Saudi firms that do not honor their contracts. “The government should have stricter parameters in accrediting recruitment and/ or employment agencies that send workers to Saudi Arabia,” he said, suggesting that “we can [also] find equivalent job offers from other firms in other countries that do not have the same problems with their Saudi counterparts.” The senator asserted this was why “we should only deploy our OFWs only in countries that can guarantee the rights of Filipino migrants workers are fully protected.” This developed as organized OFWs pleaded with the Duterte administration to fast track the implementation of labor-intensive government infrastructure projects. In a statement, John Monterona, converner of the United Overseas Filipinos Worldwide (U-OFW), projected there could be more OFWs who will be affected by mass layoffs in the Middle East, specifically in Saudi Arabia. Monterona aired concerns that the continuing saga of the mass layoffs of OFWs in Saudi Arabia will continue until the first quarter of next year, depending on the outcome of the economic reforms, dubbed as Saudi Vision 2030, being implemented by the Saudi government. Aside from the nine Saudi companies earlier identified by the Department of Labor and Employment (DOLE) and the Philippine Overseas Employment Administration (POEA), he reported there are other companies who have not been paying the wages of at least two to three months of its expatriate workers, including OFWs. Earlier this week, the POEA suspended the deployment of OFWs to four out of the nine companies that were not paying the wages of their workers. These are Saudi bin Ladin Group of Cos., Saudi Oger Ltd., Mohammed Al Mojil Group

Tetangco. . . Continued from A1

Fed impact

A dovish turn by the US Federal Reserve (the Fed) earlier this year has helped reverse risk aversion on global markets and send capital flows back to the Philippines, he said. While some of the inflows may be short term in nature, the central bank is well placed to absorb their impact, according to the governor. The likelihood of fewer-than-expected US rate hikes coupled with Japan’s moves to stimulate growth are soothing nerves, he said. “Both of these moves have been quite positive for the market and have led to some risk-on behavior again,” he said. “As a result, we have seen capital flow back to emerging markets, including the Philippines. The capital flows are providing liquidity to the financial system.” The benchmark stock index has gained 16 percent this year, while the peso is up 0.2 percent against the dollar. President Duterte pledged in his first State of the Nation Address last week to improve on the economic policies of his predecessor, including lowering taxes and easing restrictions on foreign investment. Tetangco said the government’s plan to spend more on infrastructure will be a positive for

www.businessmirror.com.ph COMP also welcomed the appointment of Mario Luis Jacinto as Mines and Geosciences Bureau (MGB) director. “The MGB and the industry will surely benefit from the qualifications and years of experience of Mr. Jacinto,” COMP said. The group issued the statement after Mr. Duterte told mining companies to strictly follow environmental rules and regulation or face closure. Mr. Duterte said he is willing to forego revenues from mining, which he pegged at P40 billion a year, if mining companies would not shape up. The President’s statement came a day after the Consunji-led DMCI threatened to stop all its nickel-mining operations in the Philippines because of Environment Secretar y Regina Paz L. Lopez ’s campaign against irresponsible mining. Mr. Duterte also defended Lopez against her critics who accused the official of “unfairly” targeting large-scale mining companies. Lopez has launched a mining audit and had so far ordered four nickel-mining companies— two in Zambales and two in Palawan—suspended for causing environmental destruction and people in mining communities to suffer.

and Mohammad Hameed Al-Bargash & Bros. Trading & Construction Co. The POEA have currently placed under observation the remaining five Saudi companies: the Alumco Llc., Rajeh H Al Merri Contracting & Trading Co., Fawzi Salah Al Nairani Contracting Co., Arabtec Construction Llc. and Real Estate Development and Investment Co. “There are four additional Saudi companies that should be in the POEA watch list,” Monterona said, as he revealed that OFWs in these companies also complained of not being paid their wages for two months, others for three months. These companies are Al Samama, Galaxy Light, Arabian Bemco and Al Jalal, with an estimated 2,100 OFWs affected on top of the 11,000 OFWs from the nine companies. Monterona said, “The majority of the laidoff OFWs are construction workers and in the service sector. If the Duterte administration could fast-track the implementation of the government infrastructure projects, then the laid-off workers should be given jobs.” He recalled that last month, the Duterte administration, through the Department of the Budget and Management, revealed its plan to increase infrastructure spending next year to create more jobs and boost the economy. He said Budget Secretary Benjamin E. Diokno was quoted as saying the government plans to propose a record of P890.9-billion budget for infrastructure projects next year. This equates to 5.2 percent of the country’s GDP. Infrastructure spending of the Duterte administration next year will focus on projects, such as roads, bridges, ports and airports, according to the DBM secretary. “It is high time for the Philippine government to rethink its policy on intensified labor exportation. Unlike previous presidents, President Duterte could do away from peddling OFWs, as he is focused on improving the local economy by making our economic backbone, the agriculture and basic industries, vibrant and strong as it geared toward sustained economic growth,” Monterona said. the economy. The currency’s moves are in line with regional peers, but if fluctuations become disorderly, the authorities will intervene, the governor said. “What we don’t want to see is too much volatility or too sharp movements in the exchange rate,” he said. “That is when we reserve some scope for official action in the market if there is too much volatility.” The central bank is also seeking to bolster the reputation of its financial system, following the disappearance of $81 million of reserves owned by Bangladesh via the Philippines. Thieves hacked into the account of the Bangladesh central bank at the US Fed and routed the funds to accounts at Manila-based Rizal Commercial Banking Corp. Tetangco made it clear that banks themselves have to play a central role in enforcing antimoney-laundering rules. “The powers have always been there,” he said. “It’s a matter of the banks complying with the regulations. At the end of the day, the banks, as well as the public, need to guard against” cyber crime and hacking, he said. The BSP in June revoked the license of Philrem Service Corp., the remittance company linked to the transfer of the stolen funds to local casinos. The company has appealed against the ruling. Two other remittance firms also face similar penalties. Bloomberg News