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“If you are repeatedly having to say, in very strong terms, that what he has said is unacceptable, why are you still endorsing him? What does this say about your party that this is your standard-bearer?”—President Barack Obama, who challenged Republicans to withdraw their support for their party’s nominee, Donald Trump. AP

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“The ultimate objective of Japan is to cook [up] excuses for adjusting by leaps and bounds its military and security policies and accelerating its arms expansion, even rewriting the pacifist constitution.”—China’s Defense Ministry, in reaction to Japan’s annual defense report. AP

“Today, in schools they are teaching this to children—to children!—that everyone can choose their gender.”—Pope Francis, who blamed textbooks supplied by unspecified “persons and institutions who donate money.” AP

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Thursday, August 4, 2016 Vol. 11 No. 299

VP ADMITS CRAFTING HOUSING PROGRAM DIFFICULT SANS DATA

Robredo on housing mess: We’re clueless 3.9M T By Cai U. Ordinario

he Duterte administration could find it difficult to jumpstart a program to erase the housing backlog sans an inventory of available lands for mass housing and a comprehensive list of homeless Filipinos.

INSIDE

‘GUGA’ NOT LOSING HOPE

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The country’s housing backlog in 2013, according to the SHDA’s estimates

Vice President Maria Leonor G. Robredo said she wants to deal with the country’s housing problem through a Continued on A2

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BEAUTIES AT RWM Organizers of the Resorts World Manila (RWM) Masters 2016 pose with Mutya ng Pilipinas 2016 winners at the press launch of the RWM Masters 2016. (From left) second runner-up Ashley Nicole Singh, first runner-up Lynette Bradford, Asian Tour Director for Tour and Player Affairs Cho Minn Thant, Miss Asia Pacific International Ganiel Akrisha Krishnan, RWM COO Stephen Reilly, Miss RWM Jannie Alipo-on, Southwoods Manila Golf and Country Club Chairman Robert John L. Sobrepeña, Miss Tourism International Justin Mae San Jose and Miss Overseas Communities Michelle Thurland. ALYSA SALEN

Unbeaten U.S. basketball teams ready for Rio Olympics

N C4

SISTER ACT: CATE, BRONTE CHASE GOLD IN RIO

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Duterte to revise govt bidding rule By David Cagahastian

ever before have Chinese companies had so much cash and so little to spend it on. With investment opportunities sparse amid the country’s weakest economic expansion in a quarter century, Chinese firms reported an 18-percent jump in cash holdings during their latest quarter, the biggest increase in six years. The $1.2-trillion stockpile—which excludes banks and brokerages—grew at a faster pace than in the United States, Europe and Japan, according to data compiled by Bloomberg. While there are worse problems than having too much cash, China Inc.’s unprecedented hoard is frustrating both policy-makers and

PESO exchange rates n US 47.0260

2.8% The growth in China’s private spending on fixed assets in the first semester, way slower than last year’s 10 percent

investors. Because companies lack the confidence to spend on new projects, government attempts to boost grow th by pumping money into the financial system are falling short. Stockholders, meanwhile, would rather see bigger dividends or share buybacks than a buildup of idle cash on

corporate balance sheets. “This is actually becoming a bigger and bigger issue,” said Herald van der Linde, the Hong Kong-based head of Asia-Pacific equity strategy at HSBC Holdings Plc. “Cash is becoming a point of debate.” The impulse to hoard, instead of invest, is relatively new for a country where corporate risk-taking has been rewarded for much of the past 25 years. But as economic growth moves deeper below 7 percent from double-digit levels just a few years ago, the change in mind-set has been stark. Growth in China’s private spending on fixed assets, which topped 10 percent last year, slowed to 2.8 percent in the six months through June, the weakest level on record. See “China firms,” A2

@davecaga

resident Duterte said he would ignore the rules of the Commission on Audit (COA) in the procurement of equipment and medical facilities for the military, saying the lowest bids for these contracts are not necessarily the most advantageous to the government. In his impromptu speech to wounded soldiers at the V. Luna General Hospital in Quezon City on Tuesday, Mr. Duterte promised to provide new medical facilities and a new hospital building for the military by December this year. “I don’t want that it would take two years for it to be finished. Let’s give them the hospital, the appropriate building, and not delay the procurement. As for the equipment, I don’t believe in accepting the lowest bid,” Mr. Duterte told the wounded soldiers. “It will all be expedited. I don’t want it to be delayed just to accommodate some people. And I’m not the type of person who believes in whatever

the COA says. Because, even if you accept the lowest bid, the winner will shortchange you with substandard equipment. Which is why I told the COA that I will not follow them,” he said. For the planned new building at the V. Luna General Hospital, which he envisions to be a state-of-the-art medical facility for the military and their families, Mr. Duterte said he would no longer hold any bidding and will personally monitor the procurement. “The money is already there. I would require this to be monitored closely, but I don’t want any bidding, because I will be there. I’ll be the one to do it,” he said. President Duterte said he would discuss with the COA the proposal to revise procurement rules to put more premium on the quality of goods and services in considering which bidder should get the government contract. He said the policy of blindly awarding government contracts to the lowest bidder is a source of corruption, as the See “Duterte,” A2

FED, TAX REFORMS SEEN AFFECTING BSP POLICY By Bianca Cuaresma

D China firms have $1-trillion cash that they are too scared to spend

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espite the central bank’s guidance on the “appropriateness” of current monetary-policy settings, ING Bank Manila economist Joey Cuyegkeng said the Bangko Sentral ng Pilipinas’s (BSP) setting could be at risk due to fiscal changes and developments from the US Federal Reserve (the Fed). In a recent analysis of the Philippine economy, Cuyegkeng said the risk factors to monetary policy may push the central bank’s Monetary Board to tweak its current policy settings. The economist said the first risk would arise from expected changes in taxation, as proposed by the current administration’s economic managers. “The DOF [Department of Finance] plans to submit the tax-reform package by next month for Congress to pass before the end of the year. The tax package is expected to include higher taxes for sweetened beve rages, junk foods, petroleum products and possibly reduced exemptions to VAT [value-added tax], and also higher VAT rate,” Cuyegkeng said.

“The measures would offset the revenue losses from income-tax reform and finance higher fiscal spending, despite a higher deficit spending target of 3 percent of GDP. We estimate that the inflation impact could be around 1 percentage added to the current inflation-rate expectation,” he added. “Second-round effects may push inflation even higher, which may necessitate some adjustments to monetary policy,” Cuyengkeng said. In the international scheme, Cuyegkeng said the timing of the next hike, as the Fed chairman changes her tone and guidance, will be crucial to the BSP’s monetary-policy settings. “We have accelerated the timing of the rate hike to the first quarter of 2017, which implies that such outlook could be reflected earlier —by year-end,” Cuyegkeng said. “In addition, the external payments position may not be as rosy as in the past and as earlier expected, especially with a robust domestic demand that is reflected in strong imports and a larger trade deficit,” he added. The BSP will have its next monetary-policy meeting on August 11.

n japan 0.4662 n UK 62.8267 n HK 6.0599 n CHINA 7.0930 n singapore 35.1229 n australia 35.7821 n EU 52.8102 n SAUDI arabia 12.5423

Source: BSP (3 August 2016 )

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A2 Thursday, August 4, 2016

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Robredo on housing mess: We’re clueless Continued from A1

“comprehensive and integrated” way. But this would be difficult without the necessary data. “While there are things that can be done, I do not want to do it on a piecemeal basis,” Robredo told reporters in a news briefing in Quezon City on Wednesday. “This is because the Housing and Urban Development Coordinating Council [HUDCC] is not only about housing, but is also about urban development,” she added. Robredo said that while the Land Registration Authority (LRA) has commissioned a study to determine the available lands for mass housing, it has not yet been released, as the government has yet to pay for it. The Vice President said she has requested the Department of Bud-

China firms. . .

get and Management to release the payment to the entity, which she did not identify. In terms of the list of homeless Filipinos, particularly in cities, Robredo said only Las Piñas, Quezon City and Valenzuela have updated lists. Robredo said she is reaching out to local government units (LGUs) to prepare their own list so the HUDCC can integrate the data into the housing program being envisioned by the government. “The most difficult part is not having an integrated data bank where I can find what I need. I don’t know why the HUDCC does not have the data [on lands and the homeless],” she said. Compounding her woes, she said, is the fact that the terms of office of the six shelter agencies ended on July 31.

Robredo said she is scheduling a meeting with the government’s six shelter agencies as soon as the appointments of their heads are finalized. The country’s six shelter agencies are the National Housing Authority (NHA), Socialized Housing Finance Corp., Home Development Mutual Fund or the Pag-IBIG Fund, Home Guaranty Corp., Housing and Land Use Regulatory Board, and the National Home Mortgage Finance Corp. In 2013 the Subdivision & Housing Developers Association (SHDA) estimated that the national housing backlog is at 3.9 million units. SHDA said the country’s housing deficit could balloon to as much as 7 million units by 2030.

White elephant?

Robredo also disclosed that the

Continued from A1

“The drivers aren’t there” for Chinese firms to invest, said Sean Taylor, chief investment officer for the Asia-Pacific region at Deutsche Asset Management in Hong Kong, which oversees about $803 billion globally. Not all Chinese companies are sitting on too much cash. Some don’t have enough, as reflected in an unprecedented 17 defaults in the country’s onshore corporate bond market so far this year, more than double the tally for all of 2015. Firms in so-called old economy sectors—including industrial, energy and materials companies—have had the most difficulty growing their cash balances, while new economy businesses in the consumer and technology industries have seen their stockpiles swell.

Debt concerns

Some of the cash buildup may reflect worries among corporate executives that refinancing debt will become more difficult as the economy slows. Chinese firms face a record 3 trillion yuan ($452 billion) of maturing onshore debt in the second half, data compiled by Bloomberg show. “For highly geared companies, that is a very good reason to be cautious,” said Alex Wong, who helps oversee about $100 million at Ample Capital Ltd. in Hong Kong. “It’s difficult to raise new funds, as the stock market is bad right now and the bond market isn’t that good either.” China isn’t the only country with a hoarding problem. Companies in Japan boosted cash holdings

absence of occupants and the sheer number of units could turn the NHA’s housing program for military and police personnel into a “white elephant.” In a briefing on Wednesday, Robredo said the housing units built by the NHA for personnel of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) have sprouted in various places in the country, such as in her own hometown, Pili, Camarines Sur. “When I made the rounds of housing projects, I saw the housing units built by the NHA for the AFP and the PNP, such as those in my hometown in del Rosario, which were mostly unoccupied,” she said. Robredo said she will take up the matter with the new head of the NHA. “This is an NHA project. It will

to a record last year, a sign they’re unconvinced that fiscal and monetary stimulus will revive growth in Asia’s second-largest economy. Yet, the pace of accumulation in China stands out. The nation’s 18-percent quarter-on-quarter increase in cash and equivalents compares with gains of about 13 percent in Japan, 5 percent in the US and 1 percent in Europe, data compiled by Bloomberg show. If Chinese policy-makers had their way, companies would be putting that money to work instead. Despite state efforts to spur growth with 9.8 trillion yuan of new aggregate financing this year, the country’s official manufacturing gauge is still signaling a contraction, while the services sector is expanding at a slower pace than its five-year average. The government has been forced to pick up the slack, with state firms boosting fixed-asset investment by more than 23 percent this year through June versus

be a waste if it will remain unused.” The Vice President said her recent travel to Thailand has given her insights on how to tackle the country’s housing problem. Thailand’s Ministry of Social Development and Human Security gave her a briefing on their community-housing program, dubbed as the Baan Mankong Collective Housing. It is being run by the Community Organizations Development Institute, a public organization under the Ministry of Social Development and Human Security. According to the Baan Mankong Collective Housing web site, it is a program that channels government funds to infrastructure subsidies and soft housing and land loans directly to poor communities. These communities carry out improvements in their housing en-

the same period in 2015. “The government is trying very hard to push the economy through investment, but the private side isn’t responding,” said Francis Cheung, the head of China and Hong Kong strategy at CLSA Ltd. in Hong Kong. “They’re not very confident.” If healthy Chinese companies can’t find promising projects, they should return cash to stockholders, according to Ronald Wan, chief executive of Partners Capital International Ltd. in Hong Kong. Increased dividends may be one way to appease investors. Excluding banks, firms domiciled in China have an average estimated dividend yield of just 1.6 percent for the next 12 months, versus about 2.7 percent for nonlenders in the MSCI Asia Pacific Index. The Shanghai Composite Index was little changed on Wednesday, while the regional measure fell 1.2 percent. Bloomberg News

vironment, basic services and other aspects of community housing. Robredo said a similar community-housing program, which helped fix the housing problem in Thailand in 10 years, can be replicated in the Philippines. Apart from this, she said she is also looking at the housing program in Valenzuela, where homeless residents pay a monthly rent of P300 to the local government. Through the housing program, the city of Valenzuela is also able to impose government regulations, such as keeping children in school and giving them regular checkups. The only downside, Robredo said, is the amount needed by LGUs to finance such an undertaking. She said Valenzuela City is “lucky” to have the resources, but not all LGUs have that kind of financial muscle.

Duterte. . .

Continued from A1

substandard quality of what is offered by the lowest bidder requires such bidder to pay off government officials to look the other way when the equipment procured prematurely breaks down. Mr. Duterte said the same policy will be followed in the procurement of military supplies, ammunition and equipment, like military vehicles and arms. Presidential Spokesman Ernesto Abella defended Mr. Duterte’s policy on procurement, saying many of the cheap government contracts in the past have proven to be duds. “It’s not about changing the whole bidding process, but simply addressing the fact that just because you submit the lowest bid will not necessarily mean that you have the best bid. In other words, you are stressing quality. It’s elevating the whole process of service contracts,” Abella said.

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Thursday, August 4, 2016 A3

Retain incentives to entice more BPOs in PHL provinces–CCAP By Catherine N. Pillas c_pillas29

usiness-process outsourcing (BPO) firms belonging to the Contact Center Association of the Philippines (CCAP) urged the government to maintain the current fiscal incentives scheme if it wants to attract investors in provincial areas. CCAP President Benedict Hernandez made this pronouncement during the media launch of the 11th International Contact Center Conference & Expo (ICCCE) held in Pasay City on Wednesday. The statement was made amid the efforts of the Duterte administration to cut corporate- and personal-income ta x—a move which has

$25B

The target revenue of the local IT-BPM industry this year

D.O.F. STEPS UP DRIVE TO CUT RED TAPE, ENHANCE SERVICES By Rea Cu

@ReaCuBM

he Department of Finance (DOF) has forged a partnership with the Department of Information and Communications Technology (DICT) in developing an automated Business and Citizen Registry System that seeks to enhance frontline services among government agencies and cut red tape. Finance Undersecretary Gil S. Beltran said the automated registry system will incorporate both the businessregistry and citizens-registry records, which will be made available through the system. The data-sharing scheme is expected to lessen the tedious process that Filipinos go through every time they apply for licenses, permits and other documentary requirements. “We want to align what we are doing with what President Duterte wants, which is to make one submission of documents to be good for all agencies. We are building these systems because we want to unburden our citizens from submitting documentary requirements that we in government already have in our records,” said Beltran, who is also the DOF’s “antired-tape czar.” These registry systems, he added, are being developed and designed by young Filipino information-technology (IT) experts, in contrast with previous administrations’ practice in hiring foreign consultants for IT requirements. The registry system is expected to be operational before the end of this year. The business registry is expected to serve as database of all operating businesses, non-governmental organizations and cooperatives in the Philippines, while the citizen’s registry would provide the government with a comprehensive record of registered Filipinos. “These systems will allow individuals and corporate entities to easily track and

validate their records, removing from them the burden of proving legitimacy,” Beltran added. The approach is said to make the process easier for the citizens applying for permits, licenses and other documents, since the government agencies can easily check requirements for certain applications online and need not ask for more supporting documents from an applicant. “We are giving Arta [Anti-Red Tape Act of 2007] a new and innovative approach. Now we are focusing on the citizens, the government’s clients and how we can make it easier for them to apply for permits and other things they need in government offices by checking requirements online instead of asking them to submit many documents,” Beltran said. The DOF official also noted that agencies under the DOF are now taking steps to cut red tape, citing as an example the Bureau of Internal Revenue, which, he said, has already removed three out of the normal six documents required for the issuance of a taxpayer identification number, and the Philippine Deposit Insurance Corp., which has crossed out one out of the four requisite documents, and had also cut the number of days to process a frontline services by one day. Beltran said the rest of the attached agencies of the DOF are currently implementing similar programs to reduce processing time and documentary requirements for frontline services under the watchful eye of the Civil Service Commission, which has been given the mandate to monitor the progress of the government’s antired-tape program on a quarterly basis. A memorandum of agreement, however, may be necessary among the various government agencies to ensure appropriate protocols on cost sharing and the use and sharing of data, he added.

We want to align what we are doing with what President Duterte wants, which is to make one submission of documents to be good for all agencies. We are building these systems because we want to unburden our citizens from submitting documentary requirements that we in government already have in our records.”—Beltran

raised concerns that the government could slash incentives to compensate for the revenue loss. “If you were to ask us what could help [BPOs], that would be retaining the current fiscal incentives scheme. We will also welcome extra support that we can get to develop the provinces,” Hernandez told reporters in a news briefing. He said the CCAP has yet to determine if lowering the corporate-income ta x w ill be more favorable than the 5-percent tax on gross income earned offered by the Philippine Economic Zone Authority (Peza). “But the current scheme has been sufficient for us to be competitive,” Hernandez said. The “most sought-after” Peza incentive is the income-tax holiday (ITH) of up to six years, which could be extended, fol-

lowed by a special 5-percent tax on gross income earned after the ITH availment period lapses. CCAP is drafting an industry road map with consultancy firm Frost & Sullivan. Part of this road map is an examination of government incentive schemes in top BPO destinations. Based on this study, CCAP said it would be able to determine whether changing the current fiscal incentives scheme wou ld ma ke t he Phi l ippines less competitive. In view of the Duterte administration’s aim to develop rural areas, Hernandez said he hopes there will be additional government support, such as those indicated in the Next Wave Cities project, to lure BPOs to the countryside. CCAP said it has invited some 100 i nvestors a nd compa n ies to it s a n-

nu a l con fere nce sl ate d on S e ptem ber 27 and 28 at the Marriott Grand Ballroom Hotel. With the theme “Contact Islands: Opportunities in the Ultimate Customer Experience Paradise,” the 11th ICCCE marks the first time that CCAP will be bringing in investors. The delegation would consist of Europeans, Americans and Australians in the IT-business-process management (BPM) subsectors of health care, telecommunications, financial and hospitality. The local IT-BPM industry is targeting to employ 1.3 million workers and earn $25 billion this year. The contact-center sector continues to employs the bulk of workers in the ITBPM industry, accounting for 65 percent of the estimated employment of 1.2 million workers last year.

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DOTr reconsiders Aquino admin’s ‘fire sale’ of five provincial airports

By Recto L. Mercene

@rectomercene

he government is discovering more kinks in the plan of the previous administration to bid out the provincial airports in bundles, reinforcing the pronouncement of the new officials of the Department of Transportation (DOTr) that development of these gateways should be done separately. DOTr Spokesman Cherie Mercado-Santos said: “ The plan with the regional airports is to desegmentize them than put them into one cluster.” Five provincial airports have been identified for bidding, with the total cost estimated at P108.2 billion. The Aquino administration thought of offering them to the private sector in two packages to make the projects more enticing to investors. The first package consists of the Bacolod-Silay Airport, P20.26 billion; and the Iloilo Airport, P30.40 billion; while the second bundle is composed of the New Bohol or Panglao Airport, P2.34 billion; Laguindingan Airport, P14.62 billion; and the Davao Airport, P40.57 billion. The privatization contract stipulates that the private partner will undertake the operation and maintenance of the airport; provide additional facilities and other necessary improvements to enhance passenger safety, security, access, passenger- and cargo-movement efficiency; and operational efficiency under a defined concession period. But Robert Lim, undersecretary for Transportation-Aviation and Airports, said the department has studied the plan, and found out that the New Bohol or Panglao Airport should not be included in the privatization scheme, “because that time it’s not yet ripe for its full development.” “Ang sabi namin baka hindi pa hinog ang Bohol para isama sa privatization,” Lim told the BusinessMirror during an interview on the sidelines of the inaugural arrival of Ethiopian Airlines Boeing 787 from Addis Ababa,” adding, parang pinahihinog ang Bacolod [it seems that Bacolod is being ‘ripened’ [before being given the priority].” Lim said the Bohol airport is still under construction and, instead of having it included in the clusters, the DOTr plan is to bid out each airport singly. If it is only Bohol that would be removed from the cluster, however, the plan would become unraveled, he said. The remaining airports would be opened up for bidding under the Private-Public Partnership (PPP) Program at the start of next year, so that by December 2017, all would

have been unbundled and awarded to the winning bidders, Lim said. Also, while in the process of parsing the previous plan, Lim said DOTr officials discovered that the Davao Airport had gained prominence, apparently because President Duterte became president and Davao’s potentials had suddenly grown. “The potential had increased, and we thought that if Davao is developed alone, many investors would vie for it, the market would change,” Lim revealed. “That’s how we look at it, but, of course, we have to consult the Department of Finance [DOF], because it is the agency that will give the go-signal to privatize it,” Lim said, adding that DOF experts would have to evaluate it and then make suggestions on how to go about privatizing it. “It would be better if the decision would come from the Cabinet, because there would be inputs from many quarters.” When asked who made the suggestion to include the Bacolod-Silay Airport in the package despite the dearth of tourists in the area, Lim feigned ignorance, but said the DOTr found out that the Silay Airport used to be a Japanese-run airport and, therefore, they have studied its location, and why the airfield has become a favorable site. The previous five prequalified bidders for the project are: Filinvest-Jatco-Sojitz Consortium (Filinvest Development Corp., Filinvest Land Inc., Filinvest Alabang Inc., Japan Airport Terminal Co. Ltd. and Cyberzone Properties Inc.); GMR Infrastr ucture and Megawide Consortium (Megawide Construction Corp., GMR Airport Developers Ltd., GMR Hyderabad International Airport Ltd., and Delhi International Airport Ltd.); Maya Consortium (Aboitiz Equity Ventures Inc., Vinci Airports SAS, ANA-Aeroportos de Portugal SA, Vinci Construction Grands Projets SAS, Therma South Inc. and Hedcor Sibulan Inc.); Philippine Airports Consortium (Metro Pacific Investments Corp., Aeroports de Paris and ADP Ingenierie); and SMHC-IIAC Airport Consortium (San Miguel Holdings Corp.,

The potential had increased, and we thought that if Davao is developed alone, many investors would vie for it, the market would change.”—Lim Incheon International Airport Corp., Star Infrastructure Development Corp. and Citra Metro Manila Tollways Corp.) Mercado-Santos said these bidders may find it quite easy to rehash their proposals, which are currently being modified. Lim did not make clear whether there would be another prequalification bidding under the new DOTr management. But he hinted that any company would be welcome “kung tataya sila [If they are going to bet],” noting the offer of Ramon S. Ang, president and COO of San Miguel Corp. (SMC), who made a renewed offer to build a new alternative airport to the congested Ninoy Aquino International Airport. Following the election of Mr. Duterte in May, SMC said it will revive its massive Manila Bay international airport proposal to solve congestion at the premier airport. In the last two years, the former Department of Transportation and Communications tapped the Japan International Cooperation Agency (Jica) to find a suitable location for a new international gateway. ThenTransportation Secretary Joseph Emilio A. Abaya said a Jica-backed feasibility study for Sangley Point in Cavite was still being finalized. These new locations are being explored, because the existing alternative, the Clark International Airport in Pampanga, was deemed “too far” for most Metro Manila residents, since it lacked efficient

mass-transportation access. “There’s really no other choice,” Ang said. He said Sangley could cost up to $20 billion to build, while SMC’s Manila Bay airport would require an equity of about $2 billion to $3 billion. Lim said the government is considering Ang’s offer, saying if a businessman believes that he would profit from his project, he should continue pursuing it, since the government offers no hindrance. “Provided that they will not ask subsidy from the government or they won’t change the operations of commercial airlines to favor their airport.” At the time the offer was made, Ang was still president of legacy carrier Philippine Airlines. “ The government offers no guarantee, it could be an unsolicited proposal, one of the forms of PPP,” Lim added. He said the government would welcome a prospective businessman’s feasibility studies, and they could submit them formally to the department. Once it is complied with, the DOTr would ask the prospective bidders the fine details of the project. He added that an in-depth study by a private entity is needed by the DOTr to find out if a proposal had complied with the requirements of the International Civil Aviation Organization and the International Air Transport Association, including the impact and convenience of the riding public and the citizens. Lim said part of the Sangley air-

port would be for general aviation. He added that a study made by Jica is being reviewed as part of the government’s overall plan where to locate the new airport. “The study is not yet complete, but there are four sites in Sangley where the experts have to look at, such as the soil condition, the favorable location of the runway and other parameters,” Lim said. He added other international airport locations being considered are the Laguna lakeshore near Calamba (not Talim Island), another along Cavite and one in Bulacan. Lim said the experts had to look at the features of these sites before a final nod is given which among them would be the future international airport after the Ninoy Aquino International Airport (Naia). The present Naia runway, according to experts from the Civil Aviation Authority of the Philippines (Caap), took more than 10 years’ study to finally decide its runway configuration so that aircraft would always be landing and taking off against the wind. This is why there are two runways at the Naia, which intersect one another and constructed shortly after World War II. When runway 06-24 is unavailable owing to strong cross wind, runway 13-31 becomes the favorable runway and vice versa, the Caap experts said. If a new runway were chosen today, however, the experts said they could simply review the data gathered by the weather bureau over the last few decades to determine the prevailing wind condition and configure the runway accordingly. Meanwhile, the DOTr, according to Lim, is studying the privatization of the Naia and the studies started last year, and would continue to be studied and reviewed when they should be adopted.

“By next year, we have a strong belief that there would be a decision; although this year, definitely there’s already a decision, but the awarding would be next year,” Lim revealed. W hen told t hat t he Busuanga A ir por t’s r unway shou ld be rea lig ned so it cou ld accommodate inter nationa l f lights, he said the DOTr is aware of the Caap sug gestion. “Yes, the runway should be realigned, because we have a new strategy that would help decongest the Naia, and that would be to f ly tourists direct to their destinations.” He said the Busuanga is undergoing technical study for realignment. “We will skip Manila, because an Airbus 330 could land on either Puerto Princesa or Busuanga Airport, or Kalibo,” he added. According to the Caap, the Busuanga Airport would overtake Boracay once it is opened for international flights, noting that there are many five-star resorts on the surrounding islands that had sprouted like mushrooms following in the wake of the internationally known Amanpulo island-resort. Located on Pamalican Island in northern Palawan, Amanpulo is owned by 7 Seas Resort Inc., a joint venture between the Aboitiz, Soriano and the Aman Resorts group. Reinforcing these positive developments, Lim said, is the nearing completion of the CNSATM, a next-generation communication and air traffic-control system that is located within the Caap compound. Costing about P13 billion, the system will help greatly ease the workloads of air-traffic controllers, and would lead to further decongestion of the country’s airspace because of closer separations between aircraft.

Duterte to push ahead on drug shaming P

resident Duterte plans to publicly shame dozens of government officials allegedly involved in the illegal narcotics trade, as the casualties mount from his war on drugs with another police firefight. Six bodyguards for Rolando Espinosa, mayor of Albuera in the central Philippines, were shot dead in a raid on Espinosa’s house on Wednesday, a day after he surrendered and con-

fessed that his son is a drug lord. At a televised briefing on Tuesday, police chief Ronald dela Rosa said Espinosa was free to return home but ordered his son—who is at large—to surrender or die. The government will allow other officials linked to trafficking to seek to clear their names. “My God, you will be shocked” at those on the list, Salvador S. Panelo, Mr. Duterte’s legal adviser,

told reporters in Manila on Tuesday. He said President Duterte would name all 27 local politicians shortly. Mr. Duterte, the former mayor of Davao City, won the presidency in a landslide partly on his tough talk against crime, corruption and vice. Even on the campaign trail, he warned the blitz would be bloody and without mercy. There’s no specific polling since he took office on the popularity of

his war on drugs, but he has won plaudits among his supporters on social media. His trust rating was 91 percent in a poll conducted last month by Pulse Asia Research Inc., the highest mark for any president since it started trust surveys in 1999. “[President] Duterte’s style is unusual in the sense that he thinks out of the box and he uses tactics that he thinks will work,” said Ra-

mon Casiple, executive director of the Institute for Political and Electoral Reform in Manila. “It’s too early to say whether it’s getting out of hand. The police abuse would have to be cumulative as a phenomenon and the President himself has said that he would go after abusive policemen.” The national police said 402 people were killed in the first month

after the crackdown started on July 1, the day after Mr. Duterte took office. More than 5,400 were arrested and 565,805 surrendered. That count doesn’t include dozens killed by unidentified assailants. President Duterte named five police generals accused of involvement in illegal drugs last month, three of them on active duty. All five deny wrongdoing. Bloomberg News

Asean

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Asean–European Union economic relations Asean-EU Perspective

HENRY J. SCHUMACHER

hen looking at economic relations, one looks at trade and investment first: The Asean-European Union (EU) Trade Relationship: n Europe is Asean’s second-largest trading partner. n Total value of trade in goods alone between the EU and Asean reached €1.6 trillion in the period 2004 to 2014. n The share of Asean’s external trade held by the EU and EFTA is 14 percent n The trade between the EU and Asean in goods grew by 59 percent in the period 2004 to 2014 n The growth rate of Asean exports to the EU reached 45 percent in the same period. The Asean-EU Investment Relationship n The EU is the largest source of foreign direct investments for Asean. n The EU’s FDI inflow to Asean reached $29.3 billion in 2014. n The share of EU FDI inflow was 26 percent in 2014. n FDI from the EU increased by 31 percent in 2014 compared to 2013. The total FDI stock held in Asean by the EU reached €156 billion in 2013. Being involved in Asean-European economic/business relations, we at European Chamber of Commerce of the Philippines (ECCP) are ready to support the AEC Blueprint 2025, in close cooperation with the EU-Asean Business Council (EU-ABC) of which ECCP is a leading member. Here are some of our focus points: Customs and Transit issues n Harmonization of region-wide customs procedures; full automation of customs procedures; and the implementation of the Asean Single Window. Health care and Life Sciences n Harmonized regulations and testing regimes; market entry restrictions. IPR and illicit trade n Enforcement mechanism; protecting IPR; highlighting counterfeit and illicit trade issues. Digital innovation n ICT regulations; e-commerce; cybersecurity and data privacy (in the Philippines we are so happy that the government is finally creating the Department of Information and Communications Technology—we had the first meeting with DICT Sec. Rodolfo A. Salalima last week). Automotive n Harmonized regulations and testing regimes; national automotive policies; skills shortages. (In the Philippines the European automotive industry is watching the Car Allowance Rebate System Program closely and hopes to participate in the program eventually; important in this context is the reduction of the import tax on European cars). Within the Asean Vision 2025, we are looking forward to private-public dialogue and regular consultations: n Asean connectivity policy on “seamless logistics.” n Greater involvement with relevant Asean working groups. n Asean insurance-regulatory dialogue. n Policy discussions on “digital innovation.” n Policy dialogue on “regulatory excellence.” n Involvement in Asean automotive working group Other relevant working groups, i.e., financial services liberalization, standards and quality. The Asean region, in general, and the Philippines, in particular, are faced with quite a number of challenges. Important decisions are to be made regarding infrastructure development, financing of national and local governments, preparation for the digital revolution, focusing on inclusive growth, attracting foreign investment, addressing un- and underemployment, and finding peace. Although the impact will vary, nobody can walk away from these challenges. Governments (national and local), civil society and business will have to address these challenges jointly and will have to contribute their shares to finding solutions. Important is that all players understand that they have to carry part of the responsibility. Everybody has to contribute. Business has to be willing to provide expertise, possibly funding, provided government understands that its main task is to create an enabling environment. Government will also have to accept that its track record in implementing projects is limited, and that, in partnership with the private sector, success rates will improve substantially.

3 Indonesian volcanoes erupt

ruptions at three volcanoes in Indonesia have darkened skies in parts of the archipelago and disrupted some flights. Mount Rinjani on Lombok Island near Bali, the Sinabung volcano on Sumatra Island and Mount Gamalama in the Moluccas chain of islands have all erupted in the past couple of days. No one has been injured, but flights at two airports have been disrupted. Sultan Babullah airport in Ternate, the capital of North Maluku province, was closed on Wednesday and Lombok’s international airport was closed for several hours on Tuesday. The three mountains are among about 130 active volcanoes in Indonesia. The archipelago of 250 million

people is prone to earthquakes and volcanoes because it sits along the Pacific “Ring of Fire,” a string of faults that lines the Pacific Ocean. Sutopo Purwo Nugroho, the spokesman for Indonesia’s Disaster Mitigation Agency, said Gamalama and Sinabung erupted again late Tuesday, blasting debris high into the air. Hot ash tumbled down the Sinabung slopes as far as 2,000 meters southward into a river. Nugroho said farms and trees around the three volcanoes were covered in gray ash, but nearby towns and villages were not in danger. More than 13,000 people have been evacuated due to volcanic eruptions since last year, mostly from around the slopes of Sinabung. AP

Editor: Max V. de Leon • Thursday, August 4, 2016 A5

Thailand keeps benchmark rate ahead of referendum 1.5% T hailand kept its key interest rate unchanged, as expected by most economists, opting to hold fire before an upcoming referendum and allow fiscal policies to take the lead in spurring the economy.

The Bank of Thailand held its one-day bond repurchase rate at 1.5 percent, it said in Bangkok on Wednesday. All but one of the 23 economists surveyed by Bloomberg News predicted the decision, with Royal Bank of Scotland Plc.

forecasting a 25-basis-point cut. The military government, led by Prime Minister Prayuth ChanOcha, will put a draft constitution up for public vote on August 7, paving the way for national elections scheduled next year.

The Bank of Thailand’s one-day bond repurchase rate

That may give investors more signals on the political and economic outlook for a nation hindered by sluggish growth and inflation close to zero. “The central bank will most likely want to have more clarity with regard to the results of the August 7 referendum as it could

have implications for the political situation, private-sector sentiment and financial markets,” Nalin Chutchotitham, a Bangkok-based economist at HSBC Holdings Plc., said before the decision. “Should domestic demand weaken and inflation decelerates further as a result, the probability of the central bank lowering its policy rate would be higher.” Policy-makers in the Southeast Asian nation have been reluctant to ease monetary policy despite low inflation and weak consumer spending, judging that interest-rate cuts would provide little support to the economy. Consumer prices rose 0.1 percent in July from a year earlier. Bloomberg News

Vietnam probes harmful waste dumping from Taiwanese firm

ie tname se police have launched an investigation into the illegal dumping of harmful waste material from a Taiwanese steel company already under fire for massive fish deaths in what officials say was the country’s worst environmental disaster. Bui Dinh Quang, deputy police chief in Ha Tinh province, where a unit of the Formosa Plastics Group is located, said a local company was the target of the investigation, after the police last month caught the company burying the industrial waste at a private farm. About 390 tons of the waste was buried in two places, including on the private farm in Ha Tinh province, Quang said. He said tests by the Ministry of Natural Resources and Environment confirmed the waste contained harmful levels of cyanide. Quang said Formosa and its executives will also be investigated for signing a contract with the local company, which was not authorized to handle

harmful industrial waste. Formosa acknowledged in June that it was responsible for the pollution that killed large numbers of fish off the central Vietnamese coast, and pledged to pay $500 million to clean it up and compensate affected people. The government in a report to the National Assembly last month said the disaster harmed the livelihoods of more than 200,000 people, including 41,000 fishermen in four central provinces. A n estimated 115 tons of fish washed ashore along more than 200 kilometers (125 miles) of Vietnam’s central coast in April, the report said. The pollution sparked rare protests across the country. Formosa’s $10.6-billion steel complex in Ha Tinh province includes a steel plant, a power plant and a deep-sea port and is one of the largest foreign investments in Vietnam. Toxins, including cyanide and carbolic acids, were released into the sea during a test run of the plant. AP

IN this April 28 file photo, villagers bury dead fish on a beach in Quang Binh, Vietnam. Toxic waste discharged from a Taiwanese-owned Formosa Plastics Group steel complex unit in central Vietnam harmed the livelihoods of more than 200,000 people, including 41,000 fishermen, the Vietnamese government said on Friday in tallying the damage from what it has called the country’s worst environmental disaster, according to local media. The company has pledged to pay $500 million in compensation. VNA via AP

ADRi: Sona electrified bureaucracy but execution critical

resident Duterte’s first State of the Nation Address (Sona) successfully “electrified the government bureaucracy,” but the challenge of translating this energy into genuine and lasting reforms remains, a political analyst and head of an independent think tank said. Dindo Manhit, president of Stratbase ADR Institute and lead convener of advocacy group Democracy Watch, said the President’s Sona offered a strong rallying call for government workers for at least his first 100 days in office. “Although he’s far from perfect, Duterte gave Filipinos the sense that the new administration is committed to genuine political, economic and social revolution,” Manhit said at “The Road to Change: A Post Sona Assessment,” a forum organized by the think tank Stratbase Albert del Rosario Institute and Democracy Watch in Quezon City on July 27, two days after President Duterte gave his first Sona. University of the Philippines sociology professor Randy David said it was Mr. Duterte’s “traditional charisma” that endeared him to the public, despite being “totally uncomfortable with the rituals of statecraft.” “We all thought that in the modern world we live in, the real challenge is to form stable, modern, professional institutions that will get us through the complexities of modern living,” David said.

“But the people thought otherwise. Our people thought what we needed was somebody who’s a straight talker, a tough guy, someone who’s prepared to kill.” Duterte has been both lauded and criticized for his tough stance on criminality and illegal drugs. He has enjoyed record trust ratings, despite the scores of suspected drug personalities killed reportedly as part of his administration’s all-out war on drugs. “Who would have thought that he would launch a presidential campaign on an antidrug campaign? Very few people suspected that the drug menace was as pervasive as it is,” David said. The challenge then is for Duterte to “sustain the growing momentum of his radical agenda into strong, dynamic and first-world state institutions that will outlive him,” Manhit said. Another challenge in terms of the varied composition of the Duterte Cabinet is finding coherence despite the potentially conflicting personal views, said Ronald Mendoza, dean of the Ateneo School of Government. “There are personal advocacies and personal views emerging, and we have to remember that all his pronouncements at the Sona do not necessary come from the president,” he said. “Merging prioritization” also needs to be in place, Mendoza said, citing inclusions and omissions in Mr. Duterte’s address.

TheBroa

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A6 Thursday, August 4, 2016

Bills pending in Lower House focus on safety, policy changes

Federalism see PHL’s transport

A familiar sight greets commuters at the Metro Rail Transit 3 station on North Edsa, Quezon City.

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By Jovee Marie N. Dela Cruz & Lorenz S. Marasigan

HE only way to solve the seemingly intractable traffic congestion in all of Metro Manila’s transportation systems lies on one crucial requirement: The country must decide to migrate to a federal form of government. So some sectors say. Mercado-Santos: “Federal states would benefit from land, rail, sea and air connections that the transportation department is planning to connect the whole archipelago.”

Federalism is the state by which the current government will be decentralized, erasing the so-called Imperial Manila off the map. Under a federal form of government, regions will be converted to states, and powers will be distributed locally. It will allow states and sub-states to have a firm say on how they want to grow independently. Such a form of government also promotes competition and gives businessmen choices on which states they would like to invest. Hence, President Duterte is pushing for the said shift to redistribute wealth to all regions.

But in order to effectively implement this plan, a clear-cut transportation road map for the development of interstate connectivity must be crafted. Today the Department of Transportation is collating all possible programs to move forward to having a federal transport sector.

Scattered islands

TRANSPORT experts said the government must consider the geographical nature of the Philippines. Being scattered to more than 7,000 islands, connectivity is key to implementing a successful federal government. “The role of transportation and communications in federalism is critical,” Rene S. Santiago, who sits as president to strategic investment and project development services firm Bellwether Advisory Inc., told the BusinessMirror. “That is why we need to make sure that substates

will be interconnected not only through communications, but also physical transport.” He explained that, under a federal form of government, economic growth will be distributed to different states, thereby decentralizing the current scenario, wherein Metro Manila gets the chunk of the growth and the crumbs are distributed to other cities. “There will be a rise of more urban centers, as there will be more development in other cities,” Santiago said. “People will stop looking at Metro Manila as the only city for jobs, hence it decongests Metro Manila. This is really the solution to the traffic problem in the metropolis.”

Other benefits

TRANSPORTATION Spokesman Cherie Mercado-Santos cited other benefits that Filipinos can enjoy under a federal form of government. “Transportation projects

might hasten under a federal system,” she told the BusinessMirror. “Since federal states would identify clearer geographical and political divisions, process in terms of investment and infrastructure could be expedited and cover a larger area.” Mercado-Santos added that “one investment covering a whole region might have to deal with one or two government authorities.” “Federal states would benefit from land, rail, sea and air connections that the transportation department is planning to connect the whole archipelago.” While Santiago agrees with this proposition, he believes that the emphasis should be given on the development of the shipping industry, as the Philippines is segmented by large bodies of water. “Most of the infrastructure will now be at the regional level. So what is important under a federal system is how to reconcile, for example, kinks on how to connect substates via expressways and seaports,” he said.

Ro-ro review

ACCORDING to Santiago, the “obsession” of Mr. Duterte over the development of rails to connect islands and land masses should be realigned. “The emphasis should be on the development of the roll-on/roll-off, or ro-ro, system, a multimodal ro-ro, to be precise,” he said.

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www.businessmirror.com.ph | Thursday, August 4, 2016

en to change rtation system

“The role of transportation and communications in federalism is critical. That is why we need to make sure that substates will be interconnected not only through communications, but also physical transport.”—Santiago The Road Roll-On, Roll-Off Transport System (RRTS) is a network of terminals linked by roro vessels from Batangas port and to any point of Luzon, the Visayas and Mindanao. It is designed to improve and promote the interisland sea transportation in the Philippines. The four highways under the RRTS are the following: the Western Nautical Highway, Central Nautical Highway, Pan Philippine Highway and the Eastern Nautical Highway. According to the Maritime Industry Authority, the Western Nautical and Pan Philippine Highways are the two most successful routes under the said transport system. There are 19 operators of ro-ro services in the Western Nautical Highway, with 48 vessels plying the following routes: Batangas City to Calapan, Oriental Mindoro (17 vessels); Roxas, Oriental Mindoro, to Caticlan, Malay, Aklan (seven vessels); Dumanggas, Iloilo, to Bacolod, Negros Occidental (17 vessels); and Dumaguete, Negros Oriental, to Dapitan, Zamboanga del Norte (seven vessels).

The Pan Philippine Highway, on the other hand, has eight operators with 17 vessels on the following routes: Matnog, Sorsogon, to Allen, Northern Samar (12 vessels); and Liloan, Southern Leyte, to Lipata, Surigao del Norte (five vessels). For the Central Nautical Highway, 15 operators offer services with 23 vessels. The routes are as follows: Cawayan, Masbate, to Bogo, Cebu (one vessel); Cebu City to Tubigon, Bohol (15 vessels); Jagna, Bohol, to Balbagon, Mambajao, Camiguin (one vessel); and Benoni, Mahinog, Camiguin, to Balingoan, Misamis Oriental (six vessels).

Unproductive route

THE Eastern Nautical Highway of the RRTS is the most unsuccessful or unproductive highway because, to date, no vessel is operating in the area in view that certain portions of the Eastern Nautical Highway overlap with the Central Nautical and Pan Philippine Highway, particularly those located in Masbate and Surigao City. Currently, there are 27

seaports in the Philippines— operated by both the government and the private sector. Data from the Philippine Ports Authority showed that the shipping industry continues to thrive to date. Domestic ship calls were at 384,895 last year. Combined with the 10,200 foreign ship calls, ports around the Philippines handled 395,095 ships in 2015. Cargo throughput was at 223.67 million metric tons (MMT), with foreign cargoes accounting for the lion’s share of 134.62 MMT. Passenger traffic, on the other hand, was at 62.76 million. “It just goes to show how sea connectivity is crucial given our geographical nature, and this will be a major concern of the federal government,” Santiago said.

PPPs to be more competitive IMPROVING connectivity via infrastructure could be done in three ways: via government funding, a foreign assistance package, and through the Public-Private Partnership (PPP) Program.

Santiago believes that once a federal system is in play, the PPP arena will be more competitive, as investors now have options on literally where to put their bets. “States will compete for investment, which is good, hence, giving private sector a choice on where to put their money,” he said. PPP Center Executive Director Ferdinand A. Pecson said his camp has to address the need “to create PPP projects that can attract investments outside of traditional growth centers or cities, such as Metro Manila” for states to consider. “In a federal setup, the support of the local governments, which will be the major players in producing realistic and properly structured PPP projects, is very critical,” he told the BusinessMirror. “Should this be the case, the PPP Center will continue to exercise its mandate, which is to provide the necessary technical support and heighten capacity-building initiatives to help formulate well-structured and viable PPP projects.” The government has yet to release an official plan on how to move forward with the transport sector once Filipino citizens decide to shift to another form of government. This process, according to Santiago, will give the government ample time to thresh out the specifics of the plan, including policies on interstate connectivity, and the implementation of intelligent transport systems.

The World BusinessMirror

Thursday, August 4, 2016

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China rejects accusations in Japan defense report

BUS TO CHINA In this August 2 photo

released by Xinhua News Agency, a woman pushing a bicycle looks at the Transit Elevated Bus TEB-1 conducting a test run in Qinhuangdao, north China’s Hebei province. The 72-foot-long and 25-footwide TEB powered by electricity, whichcan carry hundreds of passengers, is designed to go over the normal traffic to help ease traffic congestion without having to dig new tunnels or build elevated rail tracks. AP

Japan appoints defense chief with revisionist wartime views

OKYO —A woman with revisionist views of World War II history was named Japan’s defense minister in a Cabinet reshuffle on Wednesday, a move that could unsettle relations with Asian neighbors with bitter memories of wartime atrocities.

Tomomi Inada, who had served as reform minister and most recently held one of the top posts in the ruling Liberal Democratic Party, will replace Gen Nakatani as defense minister. She’s the second female to fill the post. Prime Minister Shinzo Abe changed more than half of the

19-member Cabinet in a bid to support his economic, security and other policy goals. Inada, a lawyer-turned-lawmaker and one of Abe’s favorite cronies, is a regular at Tokyo’s Yasukuni Shrine, which honors war dead, including convicted war criminals, a gesture seen by

neighbors as an endorsement of Japan’s militaristic past. She has also made remarks defending Japan’s wartime atrocities, including forcing many Asian women into sexual servitude in military-run brothels, and has led a party committee to reevaluate the judgment of war tribunal by the Allies. Inada is also a supporter of Abe’s long-cherished hope to revise Japan’s postwar constitution. She has said parts of the war-renouncing Article 9 should be scrapped, arguing that they could be interpreted as banning the Self-Defense Forces. Finance Minister Taro Aso, Foreign Minister Fumio Kishida and Chief Cabinet Secretary Yoshihide Suga were among key Cabinet members who retained their portfolios, while 10 ministers were replaced in the reshuffle. Abe, whose key policies include

women’s advancement, will have two other female Cabinet members, including one who will serve as Olympic minister after being shifted from environment minister. Tokyo is set to host the 2020 Summer Games. While campaigning for last month’s upper house elections, Abe promised to focus on economic revitalization in the short term, and to later seek to revise Japan’s pacifist constitution. Since he took office in late 2012, Abe has sought to boost g row t h by pu mpi ng m a ssive a mou nt s of mone y i nto t he world’s third-biggest economy. But lavish monetary easing and public-works spending, so far, have failed to reignite growth as much as hoped. The reshuffle was the third since Abe took office, and the first since October. AP

EIJING—China’s Defense Ministry has angrily rejected accusations from Japan that the Chinese military is destabi l i zing t he reg iona l military balance by seeking to change the status quo in the East and South China Seas, accusing Japan of seeking to deceive the international community and sow discord between China and its neighbors. A ministry statement issued late Tuesday Japan’s annual defense report was “full of lousy clichés, makes irresponsible remarks on China’s normal and legal national defense and military development [and] hypes up the East and South China Sea issues.” “The ultimate objective of Japan is to cook [up] excuses for adjusting by leaps and bounds its military and security policies and accelerating its arms expansion, even rewriting the pacifist constitution,” the statement said, referring to legislation passed last year that loosened postWorld War II constraints on the Japanese military. The report is “full of malice toward the Chinese military and deception to the international community, as well as intension to sow discord among China and its neighboring countries,” the statement said, citing ministry

Spokesman Col. Wu Qian. The tone of the report was typical for China, which was invaded by Japan in World War II and continues to regard its neighbor as unrepentant and a threat to its global rise. The statement also reiterated China’s claim to disputed East China Sea islands controlled by Japan and said it was Japan that altered the status quo by purchasing the chain from its private owners in 2012. Since then, China has routinely dispatched coast guard vessels and patrols planes to the area, and a Chinese navy warship recently entered a strip of water just outside Japanese-claimed waters in the area. The Japanese report said increased activity in the East China Sea prompted Japan to scramble warplanes more than 570 times last year. Japan calls the disputed islands the Senkaku, while China calls them the Diayu. Along with the US and others, Japan expressed concern over massive Chinese land reclamation projects undertaken in the South China Sea. China says it is well within its rights to build the islands, complete with airstrips and harbors, and rejected an international arbitration panel’s ruling last month that invalidated Beijing’s claim to virtually the entire strategic water body. AP

Pope sets up Vatican panel to study female deacons issue

ATICAN CITY—Pope Francis has set up a panel to study whether women could serve as deacons, a role now reserved to men. The Vatican said on Tuesday Francis, “after intense prayer and mature reflection,” decided to set up the commission, with 12 members—six men and six women— including priests, nuns and laywomen. It noted that he had told superiors of nuns’ orders in May that he intended to “set up an official commission to study the question” of the diaconate for women “above all regarding the early times of the church.” Some historians point out there were female deacons in the early church. Married men, who serve as deacons, can preach and preside at weddings, baptisms and funerals. But only priests can celebrate Mass. There has been absolutely no sign from the Vatican that any change on deacons would impact on its strict ban against women being

ordained as priests. Heading the commission is a top official, Archbishop Luis Francisco Ladaria Ferrer, a Jesuit who is the No. 2 official the Congregation of the Faith, the Vatican office entrusted with ensuring doctrinal orthodoxy. Putting the commission under his watch signals the Vatican is intent that whatever the panel concludes will be scrutinized for conformity to church doctrine. In a possible insight to the pope’s thinking, Francis has noted that the deaconesses of the early church weren’t ordained as the male deacons of today are. A US-based organization dedicated to achieving the ordination of women as priests cautiously hailed Tuesday’s development. The Women’s Ordination Conference “welcomes and is encouraged by Pope Francis’s genderbalanced and lay-inclusive appointments to study women deacons in the early church,” a statement said. AP

Despite pledges, 1M Syrian Actress who met with drug lord asks Mexican govt to drop case refugees are out of school

EIRU T— Sc hool s i n t he Midd le East a re fac ing major budget shortfalls ahead of the new academic year, leaving some 1 million Syrian refugee children out of school, according to a report published by Their World, an international children’s charity. The five-year-long Syrian war has placed huge strain on the region’s school systems, forcing neighboring countries to depend on multibillion-dollar grants from donor nations to meet education needs. There are 2.5 million Syrian children registered as refugees with the United Nations, the world body says. Most live in neighboring Turkey, Lebanon and Jordan as they wait for an opportunity to return home. In February the international community pledged $1.4 billion in school funding for host nations at a London donor conference, but less than $400 million of that has been fulfilled, Their World estimates. That leaves a funding gap of $1 billion. Kevin Watkins, the author of the report, which was published late Tuesday, said donors had “broken their promises.” In Lebanon more than half of

2.5M

The total number of Syrian children registered as refugees with the United Nations the nearly 500,000 school-age Syrian refugee children receive no formal education, according to Human Rights Watch, despite reforms allowing overburdened public schools to run two shifts a day. Many Syrian refugee families have no choice but to put their children to work to help meet basic expenses in a country with few social protections and tight movement restrictions. Children who do go to school face difficulties with new curriculums, and many suffer from posttraumatic stress disorder, or other psychosocial problems. “The schools accept Syrian refugees, but the children don’t adapt. They register, but then they drop out,” said Najah Kherallah Jomaa, a refugee from Syria’s Aleppo living in a settlement in the Lebanese town of Bar Elias. AP

EXICO CITY—Mexican actress Kate del Castillo wants Mexico’s government to drop accusations of obstruction of justice and money laundering related to her meeting last year with drug lord Joaquin “El Chapo” Guzman. Del Castillo’s representatives said in a statement on Tuesday that the actress has filed papers seeking a court injunction demanding prosecutors “either charge her with a crime or close the criminal investigation.” “The Mexican Attorney General’s office has constantly violated her rights to due process by leaking information of the investigation to the media, and violating her presumption of innocence,” the statement said. Mexican media published a series of seemingly flirtatious text messages between her and Guzman that were leaked earlier this year. Mexican authorities have said they are investigating possible money laundering involving Guzman and del Castillo’s tequila business and have sought to question the actress. They have said she is considered a witness, and she has not been charged with any crime. A kind of summons for del Castillo to be questioned has been issued, but the naturalized US citizen has remained in Los An-

In this August 15, 2014, file photo, actress Kate del Castillo speaks at a news conference in City Council chambers in Los Angeles. Del Castillo asked on August 2 that the Mexican government drop accusations of obstruction of justice and money laundering related to her meeting last year with drug lord Joaquin “El Chapo” Guzman. AP

geles, where she lives. Her lawyer in the United States says she has nothing to hide and is willing to talk to Mexican authorities. Del Castillo arranged actor Sean Penn’s interview with Guzman in October, while the Sinaloa cartel leader was on the lam after his second prison escape. Guzman was recaptured in January.

The actress’s representatives said she will continue with plans to make a movie about him. “Kate has consistently made clear that her only goal was to produce an artistic and journalistic project of Guzman’s life story and turn it into a compelling and informative film project that would help Mexicans and Americans un-

derstand the deadly business of the drug cartels,” said the statement from Capitol Media Partners, a Los Angeles-based communications and public-affairs firm. “Regardless of what comes next, Kate is committed to completing the film project for which she has already committed so much of her time,” the statement said. AP

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Human-rights groups: Australia ignoring abuse at refugee camps

YDNEY—Human-rights groups accused Australia on Wednesday of deliberately ignoring the alleged abuse of asylum-seekers being held at a remote Pacific island detention facility in a bid to deter future refugees from trying to reach the country by boat. A scathing joint report by Human Rights Watch and Amnesty International said detainees on the Pacific island nation of Nauru, where Australia sends asylum-seekers, are routinely denied critical medical care, frequently attempt suicide and endure physical assaults by locals on the island.

“Australia’s policy of exiling asylum-seekers who arrive by boat is cruel in the extreme,” Anna Neistat, senior director for research at Amnesty International, said in a statement. “Few other countries go to such lengths to deliberately inflict suffering on people seeking safety and freedom.”

Australia’s Department of Immigration and Border Protection criticized the rights groups for not consulting with the government while preparing the report. “We would strongly encourage Amnesty International to contact the department before airing allegations of this kind,” the department said in a statement. “The department strongly refutes many of the allegations in the report.” The department did not respond to a request seeking details on what parts of the report it was refuting. Australia refuses to accept any asylum-seekers who attempt to reach its shores by boat. Instead, it pays Nauru and the Pacific island nation of Papua New Guinea to hold them—often for years. Reports of abuse, miserably hot and crowded living conditions, and

frequent suicide attempts at the detention camps have plagued Australia for years; in April an Iranian refugee on Nauru died after setting himself on fire. Human-rights groups have long called on Australia to abandon its offshore-detention policy, calling the practice a violation of the country’s international human-rights obligations. Australia argues that the policy has saved lives by removing the incentive for migrants to attempt the dangerous and often deadly ocean crossing from Indonesia to Australia in rickety boats. Critics say the country has simply traded one evil for another. Journalists have been almost entirely banned from Nauru in recent years. But researchers from Amnesty International and Human Rights Watch said they were able to enter the

country last month, spending 12 days interviewing 84 refugees and asylum-seekers. Those interviewed said they were suffering from severe anxiety, depression and shortterm memory loss. Both adults and children told interviewers they wanted to kill themselves. Since last year, asylum-seekers held in the detention center have been allowed to leave the camp and move about the island during the day—but many say they are too afraid to do so. Every refugee and asylum-seeker inter viewed by the researchers said that they or their family members had been intimidated, harassed or physically assaulted by locals, including being pelted with bottles and stones and robbed at knifepoint. Several women reported being sexually assaulted. AP

Hawaii receives $3.7 million in battle against infectious diseases

ONOLULU—A Hawaiian Airlines flight attendant was among the people in Hawaii infected with Hepatitis A. T he s t at e D e p a r t me nt of Health says the attendant was on 33 flights from Honolulu to California, Nevada, Australia and Hawaii’s neighbor islands in July and served food and drinks to passengers. The risk of airline passengers contracting Hepatitis A from a flight attendant is extremely low because flight attendants are well trained in terms of maintaining hygiene, said Sarah

Park, state epidemiologist. “Knowing that the risk is extremely low, we can’t overlook the possibility,” Park added. “From our perspective, it’s about trying to control the outbreak, and what we don’t want to see is more fallout from contacts with cases.” More than 90 people in Hawaii have contracted Hepatitis A since mid-June, and Park said the numbers are continuing to mount. The state hasn’t yet identified the source of the outbreak, which is difficult to pin down because the incubation period is long and

those sickened are asked to recall everything they ate and drank over several weeks, Park said. “It’s incredibly frustrating,” Park added. “It’s very common for a Hepatitis-A outbreak to go unsolved.”Anyone who’s concerned about contracting the virus can talk to their health-care provider about getting a vaccine, which is effective if administered within two weeks of infection, Park said. The state doesn’t have a database tracking vaccinations, she said. Those who don’t recall whether they were vaccinated

can talk with their doctors, but it doesn’t hurt to get revaccinated, she added. Hawaiian Airlines is screening all crew members who worked with the infected attendant, and no other crew members have reported infections, said Alex Da Silva, spokesman for Hawaiian Airlines. Hawaiian Airlines released a list on its website of the flights on which the sickened attendant worked. “We’ve been concerned for a while in terms of not just spreading to other states, but also the other way around,” Park said.

The health department said Tuesday that a food service employee at a Chili’s restaurant in Kapolei on Oahu also was infected. An employee at Chili’s referred calls to an outside phone number, and a message left there wasn’t immediately returned. The federal government awarded $3.7 million to the state Department of Health to fight infectious diseases like and Hepatitis A and the Zika virus. State Health Director Virginia Pressler said the money will help Hawaii investigate the Hepatitis A outbreak. AP

North Korea launches midrange missile toward waters near Japan

EOUL, South Korea—A medium-range ballistic missile fired on Wednesday by North Korea flew about 1,000 kilometers and landed near Japan’s territorial waters, Seoul and Tokyo officials said, one of the longest flights by a North Korean missile. The US Strategic Command said North Korea fired two presumed Rodong missiles simultaneously on Wednesday, not just one. The command’s statement said initial indications reveal one of the missiles exploded immediately after launch, while the second was tracked over North Korea and into the Sea of Japan. Nor t h K orea h a s recent ly claimed a series of technical breakthroughs over its goal of acquiring a long-range nuclear missile capable of reaching the continental US South Korean defense officials say North Korea doesn’t yet have such a weapon, but some civilian experts believe the North has the technology to mount warheads on shorter-range Rodong and Scud missiles that can strike South Korea and Japan. According to the South Korean and Japanese announcements, one suspected Rodong missile lifted off from the North’s western Hwanghae province and flew across the country before falling in waters between the Korean Peninsula and Japan. Seoul’s Joint Chiefs of Staff said in a statement that it “strongly condemns” the missile launch because it explicitly shows the North’s intentions of being able to launch missile attacks on South Korea and neighboring countries. Japanese Defense Ministr y said the missile landed inside Japan’s exclusive economic zone (EEZ), the 200 -nautica l-mi le offshore area where a nation has sovereign rights for exploring and exploiting resources. Japanese media reported it was

In this May 10 file photo, North Korean leader Kim Jong Un waves at parade participants at the Kim Il Sung Square in Pyongyang, North Korea. South Korea’s military says North Korea has fired a ballistic missile on August 3 into the sea. AP

1,000

The total kilometers reached by a medium-range ballistic missile fired on Wednesday by North Korea before it landed near Japan’s territorial waters

the first North Korean missile that has splashed down in Japan’s EEZ. “It imposes a serious threat to Japan’s security and it

is unforg ivable act of v iolence toward Japan’s security,” Prime Minister Shinzo Abe said. North Korea has previously fired Rodong and other missiles into the sea, but South Korean analysts say Wednesday’s 1,000km flight was one of the longest for a North Korean test. Severa l other Nor th Korean rockets have gone far ther and even over Japan. But P yongyang ca l led t hem satel l ite launches, whi le Washing ton, Seoul and Tokyo said they were disguised tests of missile technolog y. After several failures, the North put its first satellite into space aboard a long-range rocket in December 2012, and

conducted another successful satellite launch in Februar y. In June North Korea, after a string of failures, sent another type of mid-range missile, known as Musudan more than 1,400 km (870 miles) high. Analysts said the high-altitude flight meant North Korea had made progress in its push to be able to strike US forces throughout the region. North Korea routinely conducts weapons tests, but the latest launch came after North Korea warned of unspecified “physical counter-actions” against a US plan to deploy an advanced missile defense system in South Korea by the end of next year. On July 19 North Korea fired

three ballistic missiles into the sea, according to Seoul defense officials. The North’s state media later confirmed that it fired ballistic rockets carrying trigger devices for nuclear warheads as part of simulated preemptive atomic attacks on South Korea. A n a ly st K i m Dong-y ub at Seoul ’s Institute for Far East Studies said the latest Rodong launch appeared to be aimed at showing an ability to attack US military bases in Japan, a major source of reinforcements for US troops should a war break out on the Korean Peninsula. Hyon Kwang Il, director of the scientific research department at the North’s National Aerospace Development Administration, told The Associated Press last week that Pyongyang’s military had mastered “the main and core techniques in long-range ballistic-missile technology, including the starter engine technology, how to separate the different stages, guidance control techniques and reentry and it’s all ready to be operational.” North Korea is known to have an arsena l of estimated 300 Rodong missiles whose maximum range is 1,300 km (800 miles). A Rodong fired in March f lew about 800 km, while two other Rodongs launched in 2014 f lew about 650 km. North Korea is expected to carry out more weapons launches in coming weeks to protest annual US-South Korean military drills that begin later this month. North Korea describes the drills as an invasion rehearsal. T he K orea n Pen i nsu l a re mains in a technical state of war because the 1950 to 1953 Korean War ended with an armistice, not a peace treaty. About 28,500 US troops are stationed in South Korea and tens of thousands of more in Japan. AP

Thursday, August 4, 2016

Trump taunts GOP by refusing to back Paul Ryan, John McCain

ASHINGTON—Donald Trump is openly taunting the leaders of his own party by refusing to endorse House Speaker Paul Ryan of Wisconsin and Sen. John McCain of Arizona in their GOP primaries. Yet, thus far, McCain, Ryan and other Republicans who’ve reluctantly declared that they plan to back Trump for president appear to be sticking with him. Trump’s stunning slap at two of the nation’s most prominent Republicans dramatically escalated GOP turmoil barely a week after a convention intended to promote party unity. With the general election campaign now squarely under way, Republicans found themselves once again forced to answer questions about the latest boundary-defying pronouncement from Trump at a moment when most would rather be talking about Hillary Clinton’s record. Trump made his declarations in an interview with The Washington Post in which he also lit into New Hampshire GOP Sen. Kelly Ayotte. All three lawmakers are facing primary challenges from the right in coming weeks, though all are expected to prevail, and each had criticized Trump’s attacks on the Muslim American parents of an Army captain killed in Iraq. Trump’s rebuke to Ryan carried particular derision. “I’m just not there yet,” Trump said, closely echoing Ryan’s own demurral before eventually endorsing Trump, when he told CNN on May 6, “I’m not there right now.” “I like Paul, but these are horrible times for our country. We need very strong leadership. We need very, very strong leadership. And I’m just not quite there yet,” Trump told the Post, offering praise for Ryan’s longshot opponent, Paul Nehlen, for running “a very good campaign.” Trump also claimed Ryan had asked for his support, something Ryan’s aides denied. “Neither Speaker Ryan nor anyone on his team has ever asked for Donald Trump’s endorsement,” said Zack Roday, Ryan’s campaign spokesman. “And we are confident in a victory next week, regardless.” Of McCain, whom he’d previously criticized for being taken captive in Vietnam, Trump said: “I’ve never been there with John McCain because I’ve always felt that he should have done a much better job for the vets.” And bringing up Ayotte: “I don’t know Kelly Ayotte. I know she’s given me no support—zero support—and yet I’m leading her in the polls. I’m doing very well in New Hampshire. We need loyal people in this country. We need fighters in this country. We don’t need weak people.” Trump’s comments appeared to represent the most dramatic break yet with a Republican establishment whose support for their presidential nominee has been reluctant at best. It came on the same day that President Barack Obama declared Trump unfit to serve as president and questioned why McCain, Ryan and other GOP leaders continued to support him, especially in light of Trump’s attacks on a pair of bereaved Army parents who took the stage at the Democratic National Convention to oppose him. McCain had been particularly incensed over Trump’s insults against the parents of US Army Capt. Humayun Khan, chiding Trump’s decision to “defame those who are the best among us.” Yet it was not clear that, even as Trump found another line to cross and another political norm to defy, any Republicans would rescind their support. None did so publicly and aides to both Ryan and Ayotte made clear their plans hadn’t changed. McCain met privately on Tuesday night with Trump’s vice-presidential runningmate Indiana Gov. Mike Pence. AP

A10 Thursday, August 4, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

911 is here for people who need urgent help

sn’t it amazing to have a President who actually does what he says he will do? Isn’t it exciting to see that President Duterte can deliver on his promise earlier than expected? On August 1, true to his word, Mr. Duterte ordered the emergency hotline 911 activated nationwide. Also, as pledged in his first State of the Nation Address, a hotline for complaints on erring government personnel, red tape or corruption—8888 of the Civil Service Commission—was launched on the same day.

Copied from the US and patterned after Davao City’s emergency system, the nationwide hotline 911 provides round-the-clock citizens’ link to emergency resources. To give fast assistance to people who call for help, the Philippine National Police (PNP) directed 18 regional offices, 85 provincial offices, 20 city offices, 117 city stations, 1,494 town stations and the five districts of Metro Manila to respond to emergency calls with all available resources. On hand to give support to responding units were highly trained personnel from the Bureau of Fire Protection, the Department of Health and other agencies. Unfortunately, pranksters had a field day on Monday, after the nationwide emergency hotline 911 was activated. The majority of more than 2,400 calls received were made by pranksters. Informed about the phony calls that swamped the hotline, PNP Director General Ronald M. de la Rosa appealed to the public not to tie up emergency resources, or he will be forced to arrest prank callers. “I am appealing to our people to refrain from making prank calls or test calls to our 911 hotline because this will clog up the lines and prevent the people with real emergencies to reach us,” he said, adding that response time to 911 calls should be within five to 10 minutes. On its first day, the 911 hotline received legitimate calls involving requests for ambulances, reports on vehicular accidents, neighborhood trouble, drag racing, drinking in public places, harassment and peddling of illegal drugs. While President Duterte’s directive is to make 911 free of charge, calling the hotline comes with a P5.50 charge. Interior Secretary Ismael D. Sueño said the charge will initially be shouldered by the people calling the hotline until the issuance of a memorandum of agreement between the agencies concerned and a new executive order has been issued. Some quarters, however, say the “fee” defeats the purpose of hotline 911, which is supposed to be an emergency phone number. They say charging calls is a way of penalizing people in emergency situation who need urgent help. We know this issue will be resolved soon in line with the President ’s directive. Meanwhile, here’s hoping the P5.50 charge for every 911 call will discourage prank callers. We need to educate our people that making prank calls to 911 can endanger public safety by depriving people with real emergencies of urgent assistance. The 911 hotline responds to all calls and phony calls needlessly strain resources and put our emergency responders in jeopardy.

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More on money flow John Mangun

OUTSIDE THE BOX

he wonder and mystery of how the universe operates comes down to gravity, by which all objects with energy are attracted to one another. Subatomic particles come together to form atoms and then molecules and so on to planets, stars and galaxies. Albert Einstein in his General Theory of Relativity describes gravity not as a “force,” but as the result of an uneven distribution of mass and energy. Simplistically, two subatomic particles come together to fill the space or void that exists between them. However, there is also an equilibrium that, for example, keeps all the planets of the solar system from crashing to the Sun. Again simplistically, while the Sun is pulling tiny Earth to itself, mega-giant planet Jupiter is pulling

Earth away from the Sun. The wonder and mystery of how the prices operate comes down to one phenomenon—money flow. We talk about the law of supply and demand when an imbalance on one side or the other causes prices to go up and down. But that “law” is nothing more than a reflection of money flow, as the solar system not crashing into the Sun is a reflection of gravitational equilibrium. The US dollar-exchange rate of the British pound sterling has

Missing ingredient Siegfred Bueno Mison, Esq.

THE PATRIOT

ost of us would be familiar with the name Rick Warren. After all, he is the best-selling author of the book Purpose Driven Life. However, perhaps only a few would have encountered the name Neils Riconalla. He is the chairman and founder of the Fellowship of Christians in Government Inc. (FOCIG), a network of Christians in various government offices who are committed to helping government leaders promote justice and righteousness, as well as fighting graft and corruption in their workplaces. The team of Neils, together with his spouse Amyjay, conducted a fourday parenting and leadership seminar at the Bureau of Immigration a few years back. One of the valuable lessons I learned from this seminar was to “trust the process.” Leaders should be anchored in faith in a Supreme Being and in the belief that success lies in the effort and not in the outcome. So, once decisions are made and actions are implemented, leaders should believe that things will work out according to plan. “Let go, for the outcome is no longer within your control.” Leadership author Mike Myatt once said, “You’ll rarely encounter the words leadership and surrender used together in

complementary fashion. Society has labeled surrender as a sign of leadership weakness, when, in fact, it can be among the greatest of leadership strengths. Let me be clear, I’m not encouraging giving in or giving up —I am suggesting you learn the everso-subtle art of letting go.” For me, letting go entails the power of prayer—the missing ingredient in most government offices. Neils has recently developed a PIES program, sharing lessons in patriotism, integrity, excellence and spirituality to those who are currently in government. While most agencies focus their training on technical and professional skills acquisition, I think our public servants today need

dropped about 12 percent in 2016, while the Japanese yen is nearly 20 percent higher. The reason is that money has flowed out of the pound and flowed into the yen. The reasons are not important to you and me, in the same way I am just glad that the Earth has not crashed into the Sun in the last multibillion years. T he Philippine peso—even through all its gyrations—has changed by less than 1 percent since 2016 began, because the money flow coming in has been nearly equal to the money flow out of the economic system. The price of crude oil is the most watched number on earth. If you continuously read all the reasons for the price movement of oil you will go insane, with blood gushing from your ears as your brain overheats. By the way, it is almost the same for the stock markets, including here in the Philippines. If you look at a chart of the oil price, you will see it going up and then down, each time reaching a relatively lower high and then a lower low. This pattern has been repeated four major times since the middle of 2013. Yet,

more values training and spiritual exercises, not necessarily in the mold of Saint Ignatius, as depicted in the movie Ignacio de Loyola. Neils and his team aim to conduct this PIES program in the entire Philippine National Police and Armed Forces of the Philippines organizations. I wish them well. Up to now, Neils has reminded me that I should always pray. When I took over chairmanship of the bureau executive committee in 2013, our meetings started and ended with a prayer. Prior to 2011, the entire bureau recited a customary prayer during our flag-raising ceremonies every Monday. A few months after I joined the bureau, aside from the usual Catholic prayers, we had prayers led by Muslims and Christians alike in some of our Monday ceremonies. While I was in government service, I made decisions based on the belief that they were not only right, but also fair to many, if not to all. Part of trusting the process, I discovered that I could have acted wisely and with less fear if I reinforced my plans and actions with a lot of meditation, reflection and prayer. Someone famous once said: “What the Church needs today is not more machinery or better, not new organizations or more or novel methods, but men whom the Holy Spirit can use—men of prayer, men mighty in prayer.” Leaders in public service will certainly encounter roadblocks and challenges ahead, which will

the amount of both crude-oil supply and demand has been moving with about the same percentage increase during that period. So, why are prices down 60 percent overall, and why the ups and downs? Money flow. When the oil price has come down, money flowed in not only to buy crude oil but to fund the oilproducing companies. Then, after a profit, money flowed out in an amount greater than what came in, for a net money-flow decrease. This has happened four times. It is the same for the Philippine stock market, except for the last seven years. There has been a net inflow of funds. I have talked about money flow many times and will continue talking about it because once you understand this phenomenon, the markets become much less complicated and frightening—just like the universe. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

wear them down and threaten their peace of mind. When they do, they should remember to surrender but to be without fear and take comfort in the fact that He has your back! Once you have done your part, pray relentlessly and pray for everything. In her book entitled The Path, Laurie Beth Jones prescribed eight action steps for any person or leader to get through any stressful situation or, as she called it, the Creative Tension Zone. Her eight and last action step was to “saturate everything you do with prayer.” In hindsight, I wish I had prayed more when I was in the bureau. Luckily, prayer warriors within the bureau were steadfast in praying for the bureau and its leaders like me. Those worth mentioning include Ruth Valmoria, Lilibeth Santos, Janice de Jesus and Diana Marie Reyes, who kept sending me prayers via text messages even after I was no longer their leader. For such gestures, I am deeply indebted to them. In almost everything we do, we pray. What we need to do more than putting prayers into our actions is putting to action all our prayers. Let us specifically pray that all of us to be spiritually guided on what we can do to help our country. While nothing is impossible with God, He uses ordinary people like us to make things possible. For questions and comments, e-mail me at sbmison@gmail.com

Opinion BusinessMirror

opinion@businessmirror.com.ph

Lenient tax-exemption rules for nonstock, nonprofit educational institutions Ernesto N. Dayao Jr.

Tax Law for Business

ecall that in 2013, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) 020-13, prescribing the policies and guidelines in the processing of tax-exemption applications and revalidation of tax-exemption rulings/certifications for corporations and associations listed under Section 30 of the National Internal Revenue Code (NIRC). Essentially, corporations listed in Section 30 of the NIRC are exempt from income tax. But pursuant to the RMO, these corporations need to secure tax-exemption rulings/ certifications from the BIR confirming the tax exemption and to have said exemption revalidated as often as every three years. Included in the types of corporations enumerated in Section 30 of the NIRC are the nonstock and nonprofit educational institutions. Thus, schools falling under this category were also required to secure tax-exemption rulings/certifications from the BIR. In fact, RMO 020-13 appears to be more strict in evaluating the entitlement to exemptions of a nonstock and nonprofit educational institution as it is the only type of corporation specifically mentioned in the RMO, which is specifically required to provide additional requirements in addition to the general requirements for all types of Section 30 corporations. Because of the requirement for exempt organizations to secure taxexemption rulings, some applicants found themselves being denied the exemption, even for institutions that had been previously confirmed as exempt by previous rulings. And the denial of exemption varies from failure to provide all required documents to falling outside the ambit of corporations mentioned in Section 30 of the NIRC. And some schools were not spared from the denial of their applications for exemption. This burden for nonstock and nonprofit educational institutions had somehow been eased by RMO 044-16, which was issued to exclude nonstock, nonprofit educational institutions from the coverage of RMO 020-13. The new RMO recognizes that the tax exemption of nonstock, nonprofit educational institutions is directly conferred by paragraph 3, Section 4, Article XIV of the 1987 Philippine Constitution. It is stated therein that all revenues and assets of nonstock, nonprofit educational institutions used actually, directly and exclusively for educational purposes shall be exempt from taxes and duties. The exempt status pursuant to Section 30 of the NIRC is merely a reiteration of the constitutional provision. And the RMO specifically provides that the constitutional conferral of tax exemption upon nonstock and nonprofit educational institutions will not be implemented or interpreted in such a manner that will defeat or diminish the intent and language of the Constitution.

Among the changes introduced by RMO O44-16 is that the application for tax exemption by nonstock, nonprofit educational institutions shall be filed with the Office of the Assistant Commissioner, Legal Service. Back then, the filing was with the Revenue District Office where they are registered. In addition, RMO 044-16 materially reduced the documentary requirements with regard to the support for the application for tax exemption. As in the previous rule, the BIR may still require additional information or documents as the circumstances may warrant. More important, educational institutions are no longer required to renew or revalidate the tax-exemption rulings issued to them. In fact, such exemption rulings shall remain valid and effective, unless recalled for valid grounds. Tax-exemption rulings shall be subject to revocation only if there are material changes in the character, purpose or method of operation of the corporation, which are inconsistent with the basis for its income-tax exemption. However, to update the records of the bureau and for purposes of a better system of monitoring, the BIR requires nonstock, nonprofit educational institutions with tax-exemption rulings or certificates of tax exemption issued prior to June 30, 2012, to apply for new rulings. This is a major step forward for easing the processes of getting confirmation of ones entitlement to the privileges granted by law. We hope the new BIR administration will further improve our tax administration policies, to ease the burden on the part of the taxpayers. The author is a senior tax specialist of DuBaladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services (WTS). The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at ernesto.dayaojr@bdblaw.com.ph or call 403-2001 local 390.

Trustful and vigilant Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

lessed are the people God has chosen as His own; He is their help and shield (Psalm 33:1, 12, 18-19, 20, 22). The promised coming of the Lord is a joyous surety for the faithful and prudent servant who remains ready to welcome Him whenever He comes (Luke 12:32-48).

May Your kindness be upon us The psalmist is full of praise for the Lord. He is inviting those assembled at worship, the just and the upright, to ring out their joy to the Lord and to exult, because the Lord is true to His covenant with His people. They are blessed because He has chosen them for His own inheritance, belonging by right to Him and thus indicative of His passionate attachment to them. His steadfast love for them is evident in His care for all who fear Him, who stand in awe and wonder of Him; His solicitous eyes are on those who are committed to Him, on those who hope in

His mercy and compassion, relying on His covenant loving kindness (hesed). He delights in them and looks after them, and delivers them from death and famine and protects them from any threatening dangers. The people who are trustful of the Lord turn to Him and wait for Him to come to them in His own time. He is their true help in their needs and their shield protecting them from all perils. With a final appeal to the Lord, the psalmist prays that God’s loving mercy be upon them who put their hope in Him. Indeed, those who fear the Lord are those who hope in His kindness. To the psalmist’s

Thursday, August 4, 2016 A11

announcement that indeed blessed are the people the Lord has chosen to be His own, the worshipping community can only cry out: “Let Your steadfast love, Lord, be upon us! We hope in You!”

Ready for the coming of the Lord

INthe gospel portion on the teaching of Jesus about possessions (picking up again last Sunday’s topic regarding earthly riches), Jesus’ words of endearment to His disciples as His little flock are set to calm them down from the frenetic preoccupation about material possessions with the assurance that the heavenly Father is pleased to give them no less than the heavenly treasure of the kingdom of God. This is the safe and inexhaustible treasure in heaven that one should work for, by using one’s earthly possessions in acts of mercy and, thus, become rich in what matters to God. This is the real treasure that the hearts of disciples should focus on. The life of Jesus’ followers is one of preparedness, with robes tucked under the belt for some strenuous efforts and with their lamps lighted to be watching even into the night. They are like servants prepared and waiting for the return of their

The state of our nation today Val A. Villanueva

Businesswise

cCarthyism now rules the land. In the 1950s the US government swooped down on suspected “commies” (the slang word for “communists”) and accused them of subversion or treason without proper regard for evidence. One of the casualties was the famous silent-movie actor Charlie Chaplin, who was forced into exile in Switzerland when the US government refused to grant him reentry to California in 1952, which had been his home for 40 years. Originally coined to disparage the anti-communist efforts of Republican US Sen. Joseph McCarthy of Wisconsin, “McCarthyism” became part of the US dictionary, recounting the immoderations of similar efforts. It took its roots from the period of the Second Red Scare, lasting from 1950 to 1954, highlighted by political subjugation against supposed communists and fuelled by spreading fears of commies wielding influence on US establishments and of espionage by Soviet agents. The term has metamorphosed to mean wild, uncorroborated indictments, as well as demagogic attacks on the character of targeted persons, in order to curb opposition or political criticism. Sounds familiar? This is the state of our nation today. Ours is even scarier because victims are not afforded their day in court, but are killed by masked assassins whose names and faces we may never

know. Those who have voiced out their disgust against this familiar refrain are demonized and accused of being coddlers, and even fingered as criminals themselves. President Duterte’s war on crime and drugs has snuffed the life out of the impoverished, and the collateral damage has become worrisome. What riles me is that there are people who are applauding this reckless bloodletting. To them, Duterte could do no wrong. He is their hero, their demigod. It was he who encouraged the citizenry to kill drug pushers “if they resisted” by saying, “Don’t be afraid. I have your back.” His fanatic supporters seem to relish the gore, with the killing rampage unfolding like that in one of Sam Peckinpah’s blockbuster movies of old. Where is justice? Duterte controls and has the police at his beck and call. He pedals the wheels of both houses of Congress, and he could take them anywhere he pleases. He doesn’t need

to declare martial law. The country is virtually under it. Don’t get me wrong! I fully support the war on drugs, but there must be a more humane way of waging this war. Extra judicial killings must stop! Sen. Leila M. de Lima was spot-on when she said in her recent privilege speech: “I must admit, the public reaction to these executions is not in favor of those who oppose it. A 91% approval rating for the President and what he stands for is a formidable record. But we cannot base our reactions to these killings on the popularity of the President. Popular or not, murder must stop. Stop the killings now!” She added: “Yes, Mr. President, indeed, we must wage this war against drugs. But there must be another way. There has to be another way. There must be a way other than this method that brings us to our collective descent into impunity, fear and, ultimately, utter and complete inhumanity.” By letting blood flow uncontrollably in this antidrug war, the former justice secretary explained, “We will only be trading drug addiction with another more malevolent kind of addiction. This is the compulsion for more killing, killings that have now included the innocent…” As for the killings executed purportedly in pursuit of police work, de Lima noted the usual explanation that the executions were done in the course of legitimate law-enforcement operations. “We are aware of incidents of police rub-outs. We know about the shortcuts taken by some law enforcers in the guise of self-defense. The use of force, it appears in some cases, may not be necessary, or,

Will the mystery of Malaysia Airlines Flight 370 ever be solved?

ecrets don’t keep the way they once did. Technology sees to that. Everyone knows too much, monitors too much, backs up too much data to allow modern mysteries to linger. So if street crime can be solved using video evidence, and a lost smartphone can be located via tracking software, there is no way a passenger jet with 239 souls aboard could simply vanish, right? That’s the stuff of the Bermuda Triangle, a myth involving lost ships, planes and crews in the Atlantic Ocean that was debunked long ago. The missing airliner, though, really is gone. Perhaps, forever. Malaysia Airlines Flight 370, flying from Kuala Lumpur to Beijing on March 8, 2014, disappeared less than an hour into its overnight journey. Something went seriously wrong aboard the plane, which veered wildly off course and flew in the

wrong direction for hours before running out of fuel. Search boats have plied the suspected crash zone—a remote stretch of the southern Indian Ocean—for two years looking for wreckage. And? They’ve come up empty. A few bits of debris from the missing jet washed up on distant African shores. But the crash site hasn’t been located and survey vessels, equipped with sonar, are running out of ocean to scour. Investigators mapped out 46,000 square miles of sea bottom to examine—an area about the size of Mississippi. There is less than 4,000 square miles to go. If the wreckage isn’t found in the remaining area, the governments of Australia, Malaysia and China say they will suspend the search. “The likelihood of finding the aircraft is fading,” they acknowledged after meeting on July 22. That fact is heartbreaking for

relatives. It’s troubling for all fliers. Without wreckage to study, there will be only theories, some more plausible than others, about why the plane went down. Ever ything seemed normal aboard Flight 370 until about 40 minutes into the journey. One of the pilots bade good night to airtraffic controllers in Malaysia but never took the next required step: checking in with Ho Chi Minh City. Instead, the plane disappeared from air-traffic control screens. Based on Malaysian military radar data and other evidence, the aircraft broke from its planned flight and crossed back through Malaysian territory. It flew south for about six hours over open ocean before falling from the sky. The basis for calculating a potential crash zone was the discovery of a single point of continuing contact between the Boeing 777 and the

The tragic disappearance of Flight 370, with all its passengers and crew, remains a tantalizing, frustrating mystery. The plane is out there somewhere. May the wreckage one day be found, and the mystery solved.

outside world: a series of six automated hourly pings from a satellite communications system that were answered automatically by Flight 370. These “handshakes” confirmed the plane’s satellite connection was operating. The seventh ping got a different response, indicating the jet’s communications equipment was logging in again after a disruption. That, in all likelihood, signaled

that the aircraft had run out of fuel, gone dark and then switched to emergency power. Amazing the different ways machines keep tabs on us all. The pings contained no location data, but experts were able to identify a presumed crash zone within a 400-mile arc off the west coast of Australia based on complex measurements of the distances traveled by the pings. Yet, all this amazing technology hasn’t found the jet. What happened aboard Flight 370? Perhaps, a fire or other catastrophe was too much for the crew and passengers to manage, leaving the plane to fly on autopilot. Some see a terrorist plot or hijacking. There are theories about the captain’s intentions, based on news reports that someone used his home flight simulator to plot a course to the Indian Ocean. But the Joint Agency Coordination Center—the

master, the time of whose arrival is not known. For Jesus, His disciples should be faithful and prudent stewards whom their master, when He comes, will find doing their duties responsibly and managing the household according to the master’s wishes. Reward awaits the servant who is faithful and reliable, just as punishment awaits the one who proves untrustworthy. Alálaong bagá, just as the Lord is true to His covenant commitment to His people and looks after those who hope in His kindness, as the psalmist proclaims in exultation, similarly has Jesus given His disciples the assurance that the heavenly Father in His graciousness and mercy is pleased to give the faithful ones the everlasting treasure of His heavenly kingdom. They can place their trust in this divine loving kindness. They need, however, to be vigilant and faithful in their responsibilities so as to be really prepared to receive the Lord whenever He comes. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audiostreaming on www.dwiz882.com.

if necessary, was not proportional.” The country already has a system of law for processing and punishing wrongdoers, the senator pointed out. “We have our Bill of Rights that accord the right to be presumed innocent. What is worrisome in this situation is that the war on drugs is becoming a convenient pretext for misguided or utterly corrupt law enforcers to kill just any one.” De Lima noted that if the administration was honestly worried about the spate of killings, the government should welcome an investigation by the Senate Committee on Justice, which she chairs. “We must call for the accountability of state actors responsible for this terrifying trend in law enforcement, and the investigation of killings perpetrated by the vigilante assassins,” she reiterated. There seems to be undue haste in delivering Duterte’s campaign promises, so much so that proper and prudent vetting has been thrown in the back burner. As the saying goes, “Haste makes waste.” Making hasty decisions under the blanket of immunity granted by the Duterte administration have given these so-called drug warriors the impunity and boldness to shoot first before asking questions. The lives that have so far been wasted may not be just those of the victims of extrajudicial punishments, but of their families, innocent bystanders and those who may just physically resemble suspected drug pushers and users. Lamentably, this is the state our nation is in today. For comments and suggestions, e-mail me at mvala.v@gmail.com

Australian agency in charge of the search—seems nonplussed, declaring a few days ago that “the simulator information shows only the possibility of planning. It does not reveal what happened.” One point of speculation is whether searchers are looking in the wrong place. The potential crash zone was identified partly based on the assumption that the plane fell from the sky. But if someone was at the controls of Flight 370 and glided it to a water landing, the wreckage could be well off the search grid.... And with that scenario, we enter the uncharted territory of conspiracy theorists. What we can say with certainty: The tragic disappearance of Flight 370, with all its passengers and crew, remains a tantalizing, frustrating mystery. The plane is out there somewhere. May the wreckage one day be found, and the mystery solved. TNS

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