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“The bloodshed, I think most would agree, has simply gone on for too long. It has to stop,” US Secretary of State John Kerry told reporters in a press conference in Jeddah. He said he raised concerns about civilian casualties in Yemen during his meetings in Saudi Arabia. AP

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“People immediately started looking at social media, where they saw reports that there was an active shooter.”—Corey Rosenbusch, a flight passenger at the Los Angeles International Airport during a layover, after false reports of a gunman at the airport that caused a panicked evacuation. AP

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Govt to free up frequency to allow new telco player I By Lorenz S. Marasigan

@lorenzmarasigan

n a bid to ease the suffering of disgruntled Filipino consumers, the information and communications department will review the usage of radio frequency of existing local telecommunications companies, warning carriers of the possible repossession of slices of See “Frequency,” A12 spectrums if found unused.

SALALIMA: “We may recover whatever frequency they [telcos] are not using.”

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Medalling ProsPerity

If The Olympics Teach Anything About Growth, It Is That There Are No Shortcuts

HeRe is nothing (one imagines) quite like standing atop an Olympic podium, a disc of bullion around your neck, while your national anthem plays for all to hear. It is an experience Britons have enjoyed with surprising frequency in recent days. Team GB’s gold-medal haul in Rio trailed only America’s.

make strategic choices about which sports to specialize in. They may choose events in which they have a strong tradition, which other countries neglect, or in which there are several subdisciplines and so plenty of medals on offer (cycling, for example). Britain’s medal success is due in part to ruthless decisions to cut funding to sports and athletes with little chance of victory, and to divert the largesse to those with better prospects. Cyclists’ strong performance in 2012 was rewarded with more cash; failure at volleyball meant the budgetary ax. A similarly unsentimental program once brought Australia success, but the tally has fallen since the Sydney games in 2000 and the retirement of a brilliant sporting generation. A revised version has not yielded the hoped-for returns in Rio. Therein, it would seem, lies the answer. For a rich country unhappy with its lot in matters of global competition, all that’s needed is for government to identify and support the athletes—or industries—likeliest to win. The only way to lose is not to play.

fool’s Gold

GOveRNMeNTS tempted to deploy Olympic strategies elsewhere should think twice, however. The Olympics are not like most aspects of economic life. There are only three spots on the podium. Home athletes and fans may sigh when a foreigner throws a javelin farther or performs better on the pommel horse. Coming fourth in global production of steel is not something to fret about—unless the government is wasting money on unproductive plants to achieve that result. That suggests governments should focus more on investment in public goods that buoy performance across a range of industries rather than risking waste by climbing league tables that do not matter. Perhaps just as important, the desire to best other countries can lead to blinkered decision-making, even in financing Olympic sports. The short-run advantage from finely targeted funding, like Britain’s, may be offset in the long run by the erosion of the fan base and infrastructure of neglected sports. Neither is it obvious, enjoyable as it is to watch your compatriots win, that money spent chasing gold medals would not do more good elsewhere: building public pitches and pools in disadvantaged neighborhoods, for instance, or supporting early-childhood education. A government which competes with other countries to build the best public goods—the best universities or railways —does not lose if it fails to come top of the league tables in published research or passenger miles. To believe that success in the Olympics provides evidence of the value of industrial policy, you need to believe that governments are wise to spend on Olympic prowess in the first place. Yet bread matters more than circuses.

Athletes from Great Britain gather together to show off their light-up shoes during the closing ceremony of the 2016 summer Olympic Games at Maracana stadium in Rio de Janeiro, August 21, 2016. Chang W. Lee/The neW York Times Bernard of Dartmouth University and Meghan Busse of Northwestern University concluded that, because population and GDP per person have similar effects on medal count, total GDP is a good predictor of how much hardware a country can expect to win. This is of little use to either rich countries or poor ones seeking Olympic success (which is anyway among the least important reasons for reducing poverty and improving health). But while some countries dramatically underperform these fundamentals, others punch above their weight. Some suspiciously so: Russia’s impressive medal hauls in past games look different since the discovery of a state-sponsored doping regime. Across other rich countries, attention has increasingly focused on the nuts and bolts of Olympic industrial policy. Throwing money at the problem seems to work. In Britain funding for athletes—paid for largely by the national lottery—rose almost fivefold between 2000 and 2012, from just over £50 million ($76 million) to over £250 million; the medal count rose in tandem. Hosting the games yields a temporary dividend, though at great expense: Britain’s medal count rose by nearly 40% from 2008 to 2012, when the games were staged in London at a cost of about £9 billion. Aiming money more precisely seems to make more sense. Athletedevelopment programs are essential, to identify prospective winners and provide them with coaching, equipment and living expenses. Countries can also

MOhAMed FARAh of Great Britain after winning the gold medal in the men’s 10,000-meter running final during the 2016 summer Olympics at Olympic stadium in Rio de Janeiro, August 13, 2016. Doug miLLs/The neW York Times

‘ANCIENT ALIENS’ INVADES HISTORY CON MANILA

| Tuesday, augusT 30, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana

Public-health sector, families bear brunt of Duterte’s war on drugs

By Tom Hays

EW YORK—In a less-traveled part of the 46-acre Billie Jean King National Tennis Center, an imposing black metal fence offers a reminder of the multiple security worries that come with hosting the US Open. New York Police Department (NYPD) counterterrorism officials insisted that the fence, near a new 8,000-seat grandstand stadium, be reinforced earlier this year with thick strands of cable capable of withstanding a crash from a truck loaded with explosives. “A lot of this stuff is off the radar, but it goes back to what’s happening in the world,” the event’s security director, Michael Rodriguez, said during a flurry of last-minute preparations for Monday’s opening matches. Attacks in Europe and mass shootings in the US have created a climate that’s added to vigilance over this year’s US Open, which already posed daunting security challenges because of its sheer size: 700,000 spectators over two weeks packed into two stadiums, two grandstands and other seating at more than a dozen other tennis courts, all connected by sprawling pedestrian walkways. Officials say they know of no credible

EW YORK—Novak Djokovic won’t mind if it rains for the next two weeks in New York. The US Open’s Arthur Ashe Stadium is now covered by a retractable roof. And based on his experiences at the Australian Open and Wimbledon, which already have one, the 12-time major champ expects more humid conditions once the panels slide shut—which make for a slower court. “It allows returners like myself to get into the rally rather than seeing missiles pass by from the serves,” Djokovic said on Friday. He added with a chuckle: “I wouldn’t complain, honestly, to play an indoor US Open throughout the whole two weeks.” The world’s top-ranked player insisted he won’t wake up every morning praying for rain, and his stellar return game certainly doesn’t need much help. Roger Federer, sidelined by a knee injury, also predicted this week that the roof will aid Djokovic. The Serb begins the defense

WORLD RECORD World and Olympic

champion Anita Wlodarczyk of Poland breaks her own hammer world record with a throw of 82.98 meters on Sunday in Warsaw. Wlodarczyk set the previous world record of 82.29 meters to claim the Olympic title in Rio de Janeiro. The 31-year-old Wlodarczyk beat the previous meeting record at the Kamila Skolimowska Memorial in Warsaw with each of her five valid throws, opening with 79.68 meters and improving with each of her next three efforts to set the world record. Her final throw also beat the previous meet record. The new world record has yet to be ratified. AP

threats against a Grand Slam event that happens to end with the men’s final on the 15th anniversary of 9/11. But the NYPD, which ordinarily has hundreds of officers in and around the tennis center, plans to increase its presence this year. That’s on top of the tournament’s roughly 300 private security guards. Layers of protection include installation of temporary closed-circuit surveillance cameras, including some perched atop the 23,771-seat Arthur Ashe Stadium, along with devices to detect chemical, biological or radiation risks. “I’ve already warned people they’re going to see it,” Rodriguez said of the extra security. “And they should feel good about seeing it.” Rodriguez, a former NYPD detective sergeant and supervisor for the Joint Terrorism Task Force, said he meets twice a day with representatives from the various local and federal lawenforcement agencies monitoring the US Open. Sample topic: the difficulties of “drone mitigation.” Such widening risks were underscored last year when a small drone crashed into the stands during a match—it turned out a science teacher lost control of it while flying it in a nearby park—and in 2014, when an NYPD intelligence analyst told a gathering of private security directors that an al-Qaeda online publication encouraged a car-bomb attack on the

tournament. Just outside the gates of the tennis center, the NYPD will keep heavily armed officers trained to respond to terror attacks at the ready. As with other events, like New Year’s Eve in Times Square, plainclothes officers will mix with the crowds. Other defenses include strict screening checkpoints for the throng of spectators. In the past decade, the US Open became among the first sporting events to prohibit backpacks and use airport-style, walk-through metal detectors instead of less-reliable wands to check people for weapons. The event also has a rigorous inspection system for the more than 1,600 trucks that make deliveries during the event. Drivers are vetted, given a bar code and directed to an inspection point deliberately located a quarter-mile from the tennis center before they can enter the grounds. Last week United States Tennis Association officials held a meeting at the

tennis center with their counterparts from the French Open and other major tournaments to discuss ways to keep spectators safe. “Anything can happen,” Rodriguez said. “The question is, ‘What are we doing to minimize the risks?’” With success at hardening the entrances at big tournaments, security directors have turned their attention to deterring threats to the potential target created by fans congregating in the longer lines to get in, said Richard Bower, owner of Bower Events Inc., a private security firm that consults on the BNP Paribus Open in Indian Wells, California. That event now deploys special weapons and tactics and plainclothes officers, along with police dogs, where the lines form. “Part of it is about making people approaching the event feel safe,” Bower said. Sally Kane, 71, of New Rochelle, one of the many fans to turn out last week for free admission qualifying matches, scoffed at the potential risks. “Terrorists don’t want to come here,” she said. What really bothered her was having to pay to store her metal water bottle—on a list of banned items— outside the center. “I’m very annoyed,” Kane said. “I would have felt just as safe with my water bottle.”

sports

A question of changing conditions of his US Open title on Monday night on Ashe, where he’ll likely play all his matches. The approximately $150-million project to construct a roof over Ashe features an air-management system and sliding shutters that seal the stadium, designed to try to minimize the humidity Djokovic so enjoys. US Tennis Association officials say tests have shown little difference in the conditions open or closed, but the proof will come once matches are first held under the roof. When that will be is for Mother Nature to determine. Wimbledon champ Andy Murray—who has played in two Monday US Open finals because of weather delays—couldn’t help but quip: “I’ll bet it doesn’t rain this year.”

By Claudeth Mocon-Ciriaco

SPECTATORS go through a metal detector while entering the Billie Jean King National Tennis Center. AP

New York Police Department counterterrorism officials insisted that the fence, near a new 8,000-seat grandstand stadium, be reinforced earlier this year with thick strands of cable capable of withstanding a crash from a truck loaded with explosives.

The Associated Press

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Indeed, the extended forecast as of Sunday showed little chance of rain for the tournament’s first week, though, of course, that can quickly change. The US Open has two meteorologists on site at all times who use proprietary software to track the likelihood of storms. They’re located next door to the scheduling room for quick communication. On some occasions when inclement weather is possible, the shutters around the stadium’s upper bowl will start to close and the air-management system will be activated to be ready in case the roof needs to be shut. The tournament referee makes the final call. It takes about seven minutes for the roof to close, and if the court is dry,

tournament director David Brewer said, the overall delay won’t be much longer than that. The players won’t leave the court during the process. If it starts raining before the roof is closed, the interruption will be longer to dry the court, though Brewer hopes to avoid that scenario as much as possible. “Frankly because we have so many people there and because so many people have asked for a roof for so long, I think we’re going to be preemptive in our moves to stay ahead of the weather a little bit,” he said. For the most part, if the roof closes during a match, it will remain shut until the end. It could then be reopened for a subsequent match. The roof will never be partially closed

to provide shade, and it will be shut only for rain, not for extreme heat. The structure supporting the roof does already provide more shade than before. During the US Open’s first week, rain would still wreak havoc with the schedule because no other courts are covered. Additional matches could be moved onto Ashe if need be. Brewer would prefer not to shift an in-progress match from another stadium onto Ashe, but situations may arise when that’s unavoidable. Even if it never rains, the roof is guaranteed to be closed at least once in the next two weeks. It will be shut at the start of Phil Collins’s opening ceremony concert on Monday night, then slide open during the performance. AP

The Entrepreneur Manny B. Villar

Continued on A10

bounty hunting President Duterte, in ceremonies on Monday honoring those who paid the ultimate price on National Heroes Day at the Libingan ng mga Bayani in Taguig City, also announced a P2-million bounty on the head of policemen and police personnel reputed to have links to the illegal-drugs trade. The Chief Executive has not slowed even by a bit the continuing drive to rid the country of those who peddle drugs for a living. See related story on A12. ALYSA SALEN

SHOW

Spreading the benefits of economic gains

OUT TODAY

E1 Tuesday, August 30, 2016

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eal estate is one industry that reflects and supports the strong growth of the Philippine economy. It also creates a positive chain effect by boosting other industries, like the retail business, businessprocess outsourcing (BPO) and tourism, through the property sector’s commercial or retail, residential, office and hotel or leisure segments.

INSIDE

Governments are keen to crack the code of Olympic success, both to buoy national spirits and bask in athletes’ reflected glory. Performances like Britain’s encourage those who see a role for state planners. Since a string of woeful tallies in the 1990s the main organization promoting British athletics, UK Sport, has been more active in picking potential winners and showering them with resources. Why, some wonder, should their government not perform the same trick for, say, manufacturing? Some caution is in order. For a start, in chasing Olympic success it helps to be rich already. To be sure, a large population is an advantage: Nations with more people are likelier to contain individuals of exceptional ability. But numbers matter little if a country cannot tap its human endowment. In 2012 India, the world’s second-most populous country, captured just six medals, none of them gold. New Zealand, with just 4 million people, won 13. An analysis in 2008 suggested that although India’s population is large, its pool of potential Olympians is far smaller. In areas stricken by poverty, disease and malnutrition, many struggle to be healthy at all, let alone become champion athletes. Rich countries tend to have healthier populations and more resources to devote to sport. In 2000, when China’s GDP per person (adjusted for purchasing power) was less than $4,000, it won just 58 medals. By 2012 GDP per person had quadrupled, and the count rose to 88. Indeed, in a paper published in 2004 Andrew

“She’s one of my best friends in the world. All of my adult life I’ve looked up to her, even though she’s younger than me.”—R&B artist Drake, who presented the Michael Jackson Video Vanguard award to Rihanna at the 2016 MTV Video Music Awards. AP

Part Two

HAT would a mother not do for her child? Some say nothing. Ask Melanie, a 65-year-old businessman and the mother of Daniel, who became hooked with “ice” or crystal meth or shabu when he was 16 years old.

PESO exchange rates n US 46.4890

That was 29 years ago and yet, Melanie, who spoke with the BusinessMirror on condition of anonymity, said much as she wants to forget the suffering brought by her son’s addiction, “it still hurts.” “I did not know that he was a user because he was still only in high school,” Melanie told the BusinessMirror. Continued on A2

5,000

The total number of patients in drugrehabilitation centers, volunteered for use by local government units, who can avail themselves of services by the Department of Health

Solon: VAT benefits for elderly must stay By Jovee Marie N. dela Cruz

@joveemarie

he chairman of the House Committee on Poverty Alleviation on Monday asked the Department of Finance (DOF) to submit to the House of Representatives its recommendations on what items to delist from valueadded tax (VAT) exemptions. Party-list Rep. Emmi A. de Jesus of Gabriela said Finance Secretary Carlos G. Dominguez III should justify all items he wants to remove from VAT exemptions, particularly the reported removal of senior citizens’ VAT privileges. De Jesus also cautioned Dominguez from carrying out the removal of senior citizens from VAT exemptions, as the law was intended to ease the “unjust burdens that most of them endure.” “The DOF secretary should justify his plan to

include the benefits bestowed by the Senior Citizen Act of 2010 in its target for the agency’s attrition campaign to beef up value-added tax collections,” she said. “The expanded Senior Citizen Act of 2010 gives VAT exemptions to elderly Filipinos regardless of income levels,” de Jesus added. The Gabriela lawmaker also said senior citizens should come out and organize petitions to oppose amendments to the Senior Citizen Act if these are proposed in the 17th Congress. For her part, United Nationalist Alliance Rep. Marisol Aragones-Sampelo, chairman of the House Committee on Population and Family Relations, said, “Any proposal to increase the VAT should be studied carefully, but, in my view, the existing exemption for senior citizens should be non-negotiable.”

n japan 0.4625 n UK 61.3329 n HK 5.9948 n CHINA 6.9794 n singapore 34.3625 n australia 35.4014 n EU 52.4721 n SAUDI arabia 12.4007

See “VAT,” A12

Source: BSP (26 August 2016 )

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A2 Tuesday, August 30, 2016

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Public-health sector, families bear brunt of Duterte’s war on drugs Continued from A1

She said they noticed Daniel, not his real name, was spending too much time with friends. “ Na pa pan s in k o na med yo nababarkada,” Melanie said. “Lagi silang umaalis gamit ang sasakyan namin. [Daniel takes the family car with his friends when they frequently go out].” Since they were busy with their furniture and appliance business, “ hindi namin namalayan na nalulong na pala siya sa droga [We failed to notice he was already hooked into drugs].” Melanie told the BusinessMirror that after her husband died, she started to notice that something was not right with his eldest son. “Daniel was studying in Manila; we are here in the province. He would often ask for additional allowance. He was taking up engineering in one of the exclusive schools there,” Melanie said. She said she could only send money to Daniel until the request for remittance became more frequent and the amount grew bigger. “Pinapadalhan ko na lang ng pinapadalhan ng pera hanggang sa napapadalas na at palaki na ng palaki ang hinihingi.”

Discovery

AFTER two years of her separation with his son Daniel, Melanie traveled to Manila. It was only that time she discovered his son’s drug addiction. “I learned he no longer stayed

in the apartment as he wasn’t able to pay his rent for three months,” Melanie said. “I was so shocked because I entrusted to him all the money for the rent and I always [sent him money so he can] pay on time. Worst, he also stopped going to school because he failed to pay the tuition.” Melanie said she searched for Daniel and learned he was living with friends for free. “Hinanap ko siya sa barkada niya at inuwi ko siya sa probinsiya, [I looked for him and brought him back to our province],” Melanie said. She said his son admitted b e i n g a n a d d i c t a nd a s k e d for forgiveness. “We both cried,” she said. “I pleaded with him to undergo rehabilitation and he agreed.” Melanie said the rehabilitation in a private facility lasted for 10 months.

Recurrence

WHEN Melanie thought everything will be back to normal again for his son, she agreed to end Daniel’s program. He was released. Melanie later on learned how wrong she was. “He said he will go back to school later and he even volunteered to help me in our business first,” Melanie said. “Daniel said he will help in the delivery of the appliances and furniture to which I agreed.” She said everything was doing OK in the first few months after Daniel was released from the drugrehabilitation center. And then she started to have problems with the money he was collecting.

“Medyo nagkukulang na minsan,” she said. “Sasabihin niya hindi nakapagbayad ’yung client sa amin, ’yun pala bumalik na naman siya sa dati niyang bisyo. At naging malala na kasi nagbebenta na siya ng gamit [The collections from clients were getting short. Daniel would say the client has not yet paid, but I learned he went back to using drugs. It was worse that time, because he was selling our things to fund his drug use].” His son never went back to school and decided to get married.

Types

ACCORDING to Alfonso Villaroman, chief program officer of the Department of Health (DOH) in Camp Bagong Diwa in Taguig City, there are several types of users of illegal drugs. One ty pe is categorized as experimental users who try narcotics just one time. Occasional users, meanwhile, take drugs during parties and nights out with their friends. “Then there are regular users who take [illegal] drugs consistently, say, every three days, every week or every two weeks,” said Villaroman, a physician. “Compulsive users, meanwhile, take drugs more often. Usually, they have ‘comorbid disorders or cooccurring diseases’.” Due to the frequency of using illegal drugs, the user develops mental problems, like psychosis or paranoia, and ailments, like hy pertension and cardio-pulmonary diseases. They also develop infectious diseases, like

human immunodeficiency virus (HIV), acquired immune deficiency syndrome and tuberculosis, because of their lifestyle, Villaroman said. Regular users can undergo counseling or go to out-patient treatment and rehabilitation centers. But those who no longer have jobs, have begun stealing or have become a hazard to themselves and their families, have to be brought to an in-patient rehabilitation center, he explained. Compulsive users must be brought to an institution that can help them, like the National Center for Mental Health in Mandaluyong City. They can also be referred to a psychiatrist or a specialized hospital, which will allow them to deal with their problems.

Algorithm

IN the bid of President Duterte to win in his war on drugs, the Department of Health (DOH) has turned to algorithm. According to the Health Secretary Paulyn Jean B. Rosell-Ubial, the department will release an a lgor ithm that w il l ser ve a s t he st a nd a rd a ssessment for surrenderees.

The algorithm will be given to doctors, nurses, social workers and counselors who will determine whether “surrenderees” will be accepted by a DOH-accredited rehabilitation center. Ubial said these facilities only accept users without criminal liability. Nonetheless, the department will still provide rehabilitation services to those in jail, she explained. “For us, the drug user or the addict is not the enemy. They are the victims,” Ubial said. “Sila po ang naging biktima ng drug pusher, kung kaya’t tutulungan namin sila.” Ubial also mentioned that the department is also looking at working with local government units that have volunteered venues to be converted as temporary dr ug-rehabilitation facilities. They will also be providing trainings to those operating these facilities so that the DOH can have an immediate mobilization for another 5,000 patients, according to Ubial. In the event of an excessive increase of surrenderees, the DOH will set up tents and cot beds, Ubial added. To be concluded

For us, the drug user or the addict is not the enemy. They are the victims of drug pushers. That is why we’re still going to help them.”—Ubial

Frequency. . . Continued from A12

Filipinos have been clamoring for stronger competition in the telco industry, with the hope that new entrants will bring in better service. The frequencies to be auctioned off are slices of those that the two companies surrendered to the government after their P69.1-billion acquisition of San Miguel Corp.’s telco assets. Documents showed that the frequencies returned are the following: 20 megahertz (MHz) of the 700-Mhz band, 15 MHz of the 2,500 to 2,700-MHz band, 40 MHz of the 3,400 to 3,500-MHz band and 10 MHz of the 800-MHz band. But for Internet Society of the Philippines Chairman Winthrop Yu, these frequencies are insufficient for a third player to effectively compete with the two titans. “The correct procedure would have been for NTC to first recover spectrum, then auction to a third player. Instead, it seems it’s letting PLDT and Globe keep what they took, and is only auctioning off bits and pieces,” he told the BusinessMirror. The acquisition of the frequency held by the budding third player paved way for the two carriers to gain access to a swathe of frequencies previously held by San Miguel. Before the buyout, PLDT held the 290 MHz and Globe, 210 MHz. After the transaction, PLDT ended up with 420 MHz of frequency under its belt and Globe, 340 MHz. The remainder of the 345 MHz, or 85 MHz, is what the government will auction off, according to Cordoba.

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Senator to bureau, agency heads: Itemize lump sums in proposed budgets for 2017 By Butch Fernandez @butchfBM

uterte administration officials heading various executive departments and agencies were asked to itemize “huge” lump-sum allocations proposed to be funded in the P3.35trillion 2017 national budget bill that the Palace had earlier endorsed for congressional scrutiny and approval. For instance, Senate Minority Leader Ralph G. Recto cited what he described as “one vague big-ticket item which is a good candidate for elaboration” is found under a so-called P30-billion risk-management program “tucked in the P67.5-billion unprogrammed fund in the budget proposal submitted to Congress.” “W hat is this? Will it be used to pay for contingent debts associated with PPP [public-private partnership] projects?,” Recto asked, pointing out it did not even list down which companies would be paid and that “not even the amounts allotted for each one are listed.” Decrying that the item proposed to be funded was “bereft of details,” Recto said: “This is a classic blankcheck appropriation.” In a news statement, Recto reported he already notified Cabinet secretaries and other agency heads called to appear before the budget hearings of the Senate Finance Committee, chaired by Sen. Loren B. Legarda, “to be ready to itemize lump sums in their budgets.” To facilitate the budget review, Recto recommended that the heads of agencies “break down block allocations,” saying this will “result in faster completion of projects, make their implementation more transparent and inform the people of progress coming their way.” The senator lamented that failure to itemize some lump sums is the “main culprit” why past projects were delayed in the transportation and education sectors, among others. “In part, our recent experience with underspending was a result of the absence of a detailed listing of projects,” Recto said. Recalling reports that government underspending amounted to P623 billion from 2011 to 2014,

Recto reminded agencies slated to get huge unitemized allocations “to expect senators...to ask you to break down such lump sums.” “As they say, the budget is in the details,” he stressed, noting “specifics are as important as the bottom line.” At the same time, Recto acknowledged that, while “ lump sums in the hundreds of billions dot the budget, many of these— like the P37.2 billion proposed for the calamity fund, or the P142.3 billion recommended for the pension and gratuity fund—cannot be fully itemized.” He conceded the impossibility of predicting how many typhoons will hit the country and how many people will be victimized, adding, as well, that allocations for retirement funds are, likewise, hard to project, given that “no one can say how many government employees will die next year.” The Senate Minority Leader insisted, however, that among the “huge lump sums which can and should be itemized” are those for classroom construction, right-ofway of national roads, social protection, farm projects.” He mentioned that the proposed P36.4-billion subsidy to the National Irrigation Administration (NIA) as “a prime example” of a funding item that Recto said “cries out for itemization.” “The NIA should be ready to explain where these irrigation systems will be built or repaired, the exact places and the number of hectares,” the senator said. R e c to a l so c ite d t he so called peace-and-order expenditures, asserting that “it is also but right for frightened taxpayers to demand where new policemen to be hired will be assigned and new police cars will be sent.” At the same time, Recto commended the Department of Health’s (DOH) listing “in 27 pages of fine print the thousands of health centers and hospitals” that will be improved under the proposed P21.9billion Health Facilities Enhancement Program, even as he noted the same itemization eluded the P16-billion medicine budget for 2017. “We will demand how much each health facility will get for medicines next year and that is a very reasonable demand,” he said.

Oil resumes drop near $47 amid market-stabilization deal doubts

il declined amid doubts producers will agree on a deal to stabilize the market when suppliers meet next month for informal talks. Futures decreased as much as 1.6 percent in New York after rising the previous two sessions. The oil market should achieve stability soon, United Arab Emirates Oil Minister Suhail Al Mazrouei said in a Twitter post. Iran’s plan to continue boosting crude output until it regains its presanctions Organization of the Petroleum Exporting Countries (Opec) market share is dimming prospects of collective action, according to Patrick Allman-Ward, CEO of Dana Gas PJSC. Oil entered a bull market on August 18, less than three weeks after tumbling into a bear market, as prices surged partly on speculation that discussions among members of the Opec may lead to action to stabilize the market. A deal to freeze output was proposed in February, but a meeting in April ended with no final accord. “The likelihood of them actually agreeing to some kind of production freeze is relatively low,” Daniel Hynes, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney, said in a Bloomberg television interview. “It’s certainly been, so far, a successful jawboning exercise.” West Texas Intermediate ( WTI) for October delivery dropped as much as 75 cents to $46.89 a barrel on the New York Mercantile Exchange and was at $46.98 at 1:35 p.m. in Hong Kong. The contract gained 31 cents to $47.64 on Friday, trimming a weekly decline.

Lopez to turn miners into E-NGP partners T

By Jonathan L. Mayuga @jonlmayuga

he Department of Environment and Natural Resources (DENR) is seeking a budget of P28.67 billion for its operation next year, including a whopping P9.4 billion to implement the Expanded National Greening Program (E-NGP) with the help of the private sector, particularly mining firms.

Under the leadership of Environment Secretary Regina Paz L. Lopez, the DENR would continue to rehabilitate open, degraded and denuded forest, but would focus more on promoting enterprise development to empower upland dwellers, Environment Undersecretary for Policy and Planning Marlo Mendoza said. Under the National Expenditure Program (NEP) submitted by Malacañang to Congress, the DENR’s budget request for 2017 is higher by P6.87 billion, compared to the current year’s P21.8 billion. Around P6.9 billion will go to personnel services, which is higher by P2.5 billion from this year, to cover the mandated hike in the salary of government workers, which takes effect next year, Imee de la Cruz of the DENR’s Budget Division point told the BusinessMirror. Next year the DENR will spend around P10.9 billion for maintenance and other operating expense and P10.86 billion for capital outlays. The bulk of the DENR’s budget next year goes to the massive reforestation program of the government, with the DENR being the lead-implementing agency. For 2017, the DENR is seeking P9.4 billion for the E-NGP, to sustain the massive reforestation effort of the previous administration by rehabilitating 300,000 hectares. An environmental advocate, Lopez has been tightening the screws on mining, and has, so far, caused

₧9.4B The budget being sought by the DENR for the Expanded National Greening Program in 2017

the suspension of 10 large-scale mining operations. Lopez promised to turn the miners affected by the campaign against irresponsible mining into DENR partners through the NGP, as she vowed to promote enterprise development in pursuing the program. The budget request for the ENGP is P1.2 billion higher than the current year’s budget of P8.1 billion. Part of the budget is for the maintenance of NGP sites established in 2014, 2015 and 2016, covering a total of 985,000 hectares. The DENR is scheduled to defend the agency’s proposed budget in Congress on September 5, although Mendoza said preliminary meetings have already been held with Sen. Loren B. Legarda, chairman of the Senate on Committee on Finance, and Sen. Cynthia A. Villar, chairman of the Senate Committee on Environment and Natural Resources. “The Duterte administration believes in the new thrust of Secretary Lopez. There are certain principles that the secretary believes

Total volume traded was about 30 percent below the 100-day average. Prices slid 1.8 percent last week.

Market deal

Brent for October settlement lost as much as 64 cents, or 1.3 percent, to $49.28 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a premium of $2.34 to WTI. Any decision to stabilize the market will require the full participation of all Opec members and major suppliers from outside the group, Al Mazrouei said. The UAE is the fourth-biggest Opec producer, pumping 2.93 million barrels a day in July. Saudi Arabian output was 10.43 million a day the same month.

Oil-market news:

While Iran supports action to stabilize the market, it won’t participate in a freeze in output before regaining its presanctions share of Opec production, state-run news service Shana reported on Friday, citing Oil Minister Bijan Namdar Zanganeh. China Petroleum & Chemical Corp., known as Sinopec, posted a 19.9 billion yuan ($3 billion) in profit for the first half of the year, as its fuel-making business helped it weather the worst oil crash in a generation. The US drill rig count remained unchanged at 406 through August 16, after eight weeks of gains, according to data from Baker Hughes Inc. on Friday . Bloomberg News

Tuesday, August 30, 2016

ACER PROJECTORS Acer Philippines Sales and Marketing Director Sue Ong Lim (from left), Acer Philippines Managing Director Manuel Wong and Business Manager of Projects, Faith Kuo of the Digital Display Business Unit of Acer Taiwan presented the new Acer projectors launched recently at the SM North Edsa Sky Dome in Quezon City. NONOY LACZA

in. Of course, good governance a nd promot ing tra nspa renc y are there. We have outlined anticorruption measures, that is why they are confident that the budget would go to the intended purpose, including social justice, ensuring equity and marked improvement on the people’s living conditions,” Mendoza said. Next year he said the DENR would be outcome-oriented. “In the past, it was input and output—how many hectares have been planted. The way the programs and plans were designed, we failed to ensure these will translate into a more positive wellbeing of our upland farmers” he said. It has been demonstrated that environmental projects will be more successful or have an impact if they are directly linked to livelihood. We will now look into it from a social entrepreneurship or enterprise development point of view,” he added. According to Mendoza, the National Convergence Initiative of the past administration will be adopted in the implementation of the E-NGP, which will also promote agroforestry, sustainable agriculture, and land and water conservation. “There will be more cash crops and more fruit trees,” he said. Mendoza said because of climate change, lowlands have become flood-prone. “We will also train upland farmers science-based soil conservation and water-conservation technologies,” he said. “There will be extension officers who will really talk to the farmers. Of course, our extension officers would also be trained first. For agroforestry, we will have special arrangement with the Department of Agriculture under the convergence,” he added. Mendoza said contour farming would be the name of the game in upland areas. “We will influence the farmers what to plant and how to do farming. Upland has big impact on lowlands, which is in our mandate. Our upland development programs would be geared towa rd ma k ing commu nit ies climate-proofed, but at the same

time, farmers would be making money,” he said. “We will cluster organizations and link them to markets.” Meanwhile, the DENR is also seeking close to P600 million in funding for the rehabilitation of the country’s coastal and marine ecosystem. Instead of just rehabilitating the country’s degraded network of coral reefs, the target is to establish more marine protected areas, Mendoza said. From the food-security point of view and climate-change mitigation, the DENR would also invest in the establishment of MPAs, which, Mendoza said, is cost-effective than the costly artificial coral restoration or rehabilitation. “Experts said if you protect an area, recovery is faster. With corals recovering from damage, there will be more fish and more marine life,” he said. “We would like to capacitate LGUs [local government units] because there is really a need to establish more MPAs by teaching them. If they are capacitated, if they understand that there is a link to poverty reduction and climatechange resilience, together with mangrove and beach-forest rehabilitation, they will appreciate it more,” he said. According to Mendoza, the DENR will map out areas and identify which of them are prone to coastal erosion, storm surge and areas that really need rehabilitation. According to Mendoza, the DENR wou ld be more proactive. “We will help decide which crops to plant best and we will link them to markets. Agroforestry technologies will also be taught. There are good models but they are not used. We would use them heavily and mainstream these models. The science community would play a role in this,” he said. Mendoza also said governmentto-government linkages would also play an important role in achieving Lopez’s brainchild programs to empower upland communities. “When Secretary Lopez said we will help the upland farmers and we will promote social justice, she is serious and we will help them,” Mendoza said.

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Busy Asean calendar for Duterte in September Looking toward a stronger Asean and the country’s chairmanship of the 10-member regional grouping, it will be a busy month ahead for President Duterte. Starting on September 4, Mr. Duterte will embark on historic visits to three Asean countries, according to Presidential Communications Secretary Martin M. Andanar. This will be his first international travel as the Philippines’s head of state. President Duterte’s itinerary was based on the schedule prepared by the Department of Foreign Affairs (DFA). Included in the DFA’s planned trips for the President are the Sultanate of Brunei Darussalam, the Indonesia and the Lao People’s Democratic Republic. Mr. Duterte will first fly to Bandar Seri Begawan, Brunei’s capital, to visit King Hassanal Bolkiah and meet with the Filipino expatriate community there. The President will then proceed to the Laotian capital of Vientiane for the 2016 Asean Summit. Highlight of his trip to Laos is the turnover of the Asean chairmanship to the Philippines, which includes hosting the 2017 Asean Summit. According to Andanar, President Duterte is expected to hold bilateral talks with several Asean leaders, who have expressed eagerness to meet him. After the summit, Mr. Duterte will fly to Jakarta for a working visit to Indonesia. He is scheduled to return to Manila by September 9. PNA

Laos revises growth goal to 7.3% for year ahead

Forecasts for economic growth in Lao PDR for the coming year have been revised from 7.5 percent down to 7.3 percent, local media reported on Monday. The economy in the Mekongside nation grew by approximately 6.9 percent over the past 12 months, but more will need to be done to reach future growth targets in the face of global economic uncertainty, state-run daily Vientiane Times reported on Monday. The revision follows the August monthly meeting of the nation’s executive cabinet chaired by Lao Prime Minister Thongloun Sisoulith last Friday. The meeting gave in-principle support to amended laws on investment promotion, media and government, with revised acts expected to be tabled for the consideration of the National Assembly, the peak unicameral legislature of Laos, later this year. Bolstering the ongoing response to natural disasters, including flooding and locust infestations, afflicting the some northern provinces in the largely mountainous country of 6.5 million was also called for. Maintenance of public safety and security during the Asean 28th and 29th summits and related meetings set for September 6 to 8 and to be attended by regional and world leaders was identified as a key priority at the two-day meeting that closed on Friday. PNA

Thai bank defends ATM vs malware

Thai Government Savings Bank (GSB) on Sunday disclosed its teller machines will be equipped with an antimalware program and will be back to normal operation in September, after the bank suffered an automated teller machine (ATM) hack. GSB CEO Chatchai Payuhanaveechai said the Scottish company NCR, the bank’s ATM vendor, has upgraded a program to protect ATMs from malware virus. The program will be installed at the existing ATMs manufactured by NCR. He added that 60 teams of computer programmers are to be dispatched to install the program at a rate of 200 ATMs a day. The state-owned GSB shut down approximately 3,000 of its ATMs following an ongoing police investigation into the recent hack in which hackers, identified as an eastern European gang, were able to infect many of its cash machines with malware. GSB found that millions of Thailand baht were stolen between August 1 to 8 from 21 ATMs across the six provinces, including Bangkok and Phuket. The hackers made over 12.29 million Thailand baht ($346,000) by inserting cards installed with malware into multiple ATMs to spew out cash, or up to 40,000 Baht each transaction. The bank plans to install an addition of 1,000 new ATMs of different brands, namely, Omron and Wincor, to serve the needs of customers in places where the services are not available. PNA

AseanTuesday BusinessMirror

Editor: Max V. de Leon • Tuesday, August 30, 2016 A5

Singapore steps up Zika fight after 41 local cases confirmed

ingapore has stepped up its fight against the Zika virus, after confirming 41 locally transmitted cases one day after reporting its first infection.

and Vietnam have reported cases that were either transmitted locally or brought into the country, according to the Singapore ministry. T he Zi k a v ir us has been

documented in several Asian countries since it first emerged in 1951, including Malaysia, India, Indonesia, Thailand, Vietnam and Pakistan, prior to the Brazilian outbreak, said Raina MacIntyre, head of the school of public health and community medicine at the University of New South Wales in Sydney. It is possible Zika has been present in Singapore in the past, but not tested for, MacIntyre said via e-mail. “Testing of mosquitoes in Singapore will be important,” she said, adding that “local transmission in Singapore also raises the

threat of more widespread transmission within Asia.” Malaysia’s Deputy Health Minister Hilmi Yahaya said on Monday his country was beefing up screening at two entry points along its border with Singapore, after it was reported that a Malaysian woman in Singapore had been infected with Zika virus, Malaysia’s New Straits Times reported, with similar measures being implemented at airports. While most Zika cases are mild or symptom-free, women infected during pregnancy are at increased risk of giving birth to babies with

abnormally small heads, a condition called microcephaly. Going forward, mosquito control and prevention of mosquito bites will be key, as well as protection of pregnant women, added MacIntyre, the infectious disease epidemiology professor. The Singapore government announced the jump from one case to 41 cases within a day. On its web site, the government said the additional cases were identified after its health ministry conducted active testing of potentially infected past patients. Bloomberg News

The number of people in Singapore who contracted the Zika virus and have fully recovered

The Ministry of Health (MOH) said it will continue to screen people who had close contact with those infected. Of the 41 people who contracted the virus in Singapore, 34 have fully recovered, the ministry said, with the majority of cases occurring among foreign construction workers. “Given that the Zika virus is spread by the Aedes mosquito vector, MOH cannot rule out further community transmission in Singapore, since some of those who tested positive also live or work in other parts of Singapore,” the ministry said in a Monday statement. It listed seven other “areas of concern” where some of those already infected live. The National Environment Agency said in the same statement it has intensified efforts to control the Aedes mosquito population, with more than 200 officers inspecting affected areas. The Zika spread in Singapore highlights the threat of infection across Asia. Indonesia, Thailand

QUAKE-DAMAGED TEMPLE

In this August 25 photo, military personnel clear debris at a temple that was damaged by a strong earthquake in Bagan, Myanmar. Using brooms and their hands, soldiers and residents of the ancient Myanmar city, famous for it’s historic Buddhist pagodas, began cleaning up the debris from a powerful earthquake that shook the region and damaged nearly 200 temples last Wednesday. AP

Foreign brewers fight for Vietnam’s thriving beer market

eer consumption in the Southeast Asian country jumped about 40 percent in 2015 from 2010, according to the Vietnam Beer Alcohol Beverage Heineken NV’s expansion of its production in Vietnam by taking over a brewery from rival Carlsberg A/S highlights growing interest by global beer brands to quench the thirst of about 70 million locals in one of the world’s fastest-growing economies. With a thriving streetside café and bar culture, young population and rising middle class, Vietnam is luring brewers, such as Heineken, Thai Beverage Pcl. and Asahi Group Holdings Ltd., to expand in the country. Interest is also being piqued by the government’s plans to offload lucrative assets, with Carlsberg in line to more than double its stake in state-run Hanoi Beer Alcohol Beverage Corp., or Habeco. “The Vietnamese beer market is of great interest to other international players, such as those from Japan and Thailand,” said Dominic Scriven, chairman of Dragon Capital, which manages about $1.5 billion of investments. “This, in general, is reflective of greater strategic interest across many sectors from foreign investors.” Vietnamese guzzlers are expected to consume more than 4.04 billion liters of beer this year, the most in the region, and up from 3.88 billion liters in 2015, according to Euromonitor International.

‘Amazing growth’

Economists predict Vietnam will be among the world’s fastest-growing economies in 2016, as it benefits from a manufacturing industry that’s grown in importance over the years. Its citizens of legal drinking

40%

The percentage of hike in Vietnam’s beer consumption from 2010 to 2015

age, 18 and above, is expected to increase to 72.4 million by 2021, from 68.7 million this year, according to Euromonitor. “The growth of the beer market in Vietnam over the past few years is nothing short of amazing, and it shows no sign of slowing down,” said Andy Ho, who oversees $1.5 billion as the managing director of VinaCapital in Ho Chi Minh City. Heineken in July acquired Carlsberg Vietnam Brewery-Vung Tau in the south Vietnam port city. Carlsberg CEO Cees’t Hart said the sale of the facility would allow the Danish brewer to concentrate on its existing territory in the northern part of the country, according to a Bloomberg transcript of an August 17 earnings call. Amsterdam-based Heineken, which is the second-biggest brewer in Vietnam, has seen its shares rise 0.5 percent year to date, while Carlsberg, headquartered in Copenhagen, rose 2 percent. The Vietnam Stock Index rose 17 percent over the period.

its 17 percent stake to 30 percent. “With regard to Vietnam, indeed, we focus on the territory where we are.” Another attraction of Vietnam’s beer market is that it’s less dominated by local brewers compared with Asian countries, such as Japan and Thailand, where homegrown brands take up about 90 percent of volume, Euromonitor analyst Andrea Lianto said. By contrast, Vietnamese brewers accounted for 63 percent total volume shares in 2015, giving foreign companies room to grow, she said.

Worst drought

Still, there’s risk for foreign investors as Vietnam is being hit

by the worst drought in 30 years and falling oil revenue, making the country’s 2016 target for growth of 6.7 percent “hard to reach,” Vu Hong Thanh, head of the National Assembly Economic Committee, said last month. The economy is expected to expand at 6.3 percent this year, according to the median estimate of economists surveyed by Bloomberg. Vietnam’s government is also considering selling as much as 100 percent of its stake in state-owned Saigon Beer Alcohol Beverage Corp., known as Sabeco, a long-awaited divestment that has attracted i nterest f rom Japa nese a nd European brewers in the past. Sabeco, brewer of Saigon Beer

Less dominated

“WE have a footprint, which we would like to improve,” Hart said, referring to Habeco, based in the capital Hanoi in north of Vietnam, in which Carlsberg is awaiting the government’s go-ahead for it to raise

BIKE RALLY

People take part in a bike rally during a gay-pride parade in Hanoi, Vietnam, on Sunday. About 1,000 people hit the streets of Hanoi to celebrate the annual gay-pride parade and rally for human rights. AP

and 333 Beer, is the country’s largest brewer by sales with 40 percent of the market last year, followed by Heineken and Habeco with 20 percent shares each, according to Nguyen Van Viet, chairman of the Vietnam beer association. Carlsberg is in third place with 10 percent, he said. “Urbanization there is still increasing pretty fast. The level of premium is not where it is in other countries even in Asia,” Heineken Chief Financial Officer Laurence Debroux said in an August 1 earnings call. The Dutch brewer’s performance in Vietnam has been “stunning,” she told Bloomberg Television. Bloomberg News

The W

Business

A6 Tuesday, August 30, 2016 • Editor: Lyn Resurreccion

Trump’s immigration shift shows his struggle to reach beyond supporters

The commander of the Revolutionary Armed Forces of Colombia (FARC) Rodrigo Londono, better known as Timochenko or Timoleon Jimenez, talks to the press, accompanied by Ivan Marquez (right), chief negotiator of the FARC; and Pablo Catatumbo (left), chief of the FARC’s western bloc, in Havana, Cuba, on Sunday. AP/Ramon Espinosa

Permanent cease-fire in effect in Colombia B OGOTA, Colombia—A permanent cease-fire is taking effect in Colombia on Monday, the latest step in bringing an end to 52 years of bloody combat between the government and the country’s biggest rebel group.

The commander of the Revolutionary Armed Forces of Colombia, or FA RC , announced on Su nd ay t h at h is f ighters would cease hostilities beginning at 12:01 a.m., as a result of the peace accord the two sides reached at midweek. Colombian President Juan Manuel Santos made a similar announcement on Friday, saying the military would halt attacks on the FARC beginning on Monday.

5 million The estimated number of Colombian people who were driven from their homes over five decades

FARC leader Rodrigo Londono, also known as Timochenko, made his announcement in Havana,

where rebel and government negotiators talked for four years to reach the deal on ending one of the world’s longest-running conflicts. “Never again will parents be burying their sons and daughters killed in the war,” Londono said. “All rivalries and grudges will remain in the past.” Colombia is expected to hold a national referendum on October 2 to give voters the chance to approve the accord, which wou ld end pol it ica l v iolence t hat has c l a imed more t ha n 220,000 lives and driven more than 5 million people from their homes over five decades. Polls say most Colombi a ns loat he the rebel group but w ill likely endorse the deal any way. Top FARC commanders are planning to gather one final time in midSeptember to ratify the deal. Under the 297-page accord, FARC guerrillas are supposed to turn over their weapons within six

months after the deal is formally signed. In return, the FARC’s still unnamed future political movement will be given a minimum 10 congressional seats—five in the lower house, five in the Senate— for two legislative periods. In addition, 16 lower house seats will be created for grassroots activists in rural areas traditionally neglected by the state and in which existing political parties will be banned from running candidates. Critics of the peace process contend that will further boost the rebels’ postconflict political power. After 2026, both arrangements would end and the former rebels would have to demonstrate theirpolitical strength at the ballot box. Not all hostilities are ending under the deal with the FARC. The much-smaller National Liberation Army remains active in Colombia, although it is pursuing its own peace deal with the government. AP

Brazil’s president under impeachment trial

IO DE JANEIRO—The impeachment fight in Brazil over whether to permanently remove President Dilma Rousseff from office is about more than the charges that she mismanaged the federal budget. The Associated Press (AP) explains how it got to this point and how the trial is playing out:

aggravated the crisis in Latin America’s largest economy.

The stakes: Ouster

A conviction would permanently remove Rousseff from the presidency and bar her from holding any office for eight years. Temer would serve out her term, which ends on December 21, 2018. If convicted, Rousseff would likely appeal to the country’s highest court. But previous appeals during the process have failed.

How Rousseff’s support collapsed

Rousseff was reelected to a second four-year term in October 2014. As the economy worsened, hundreds of thousands took to the streets in early 2015, with many demanding the ouster of Rousseff and her left-leaning Workers’ Party. Her foes in Congress introduced a measure last year to impeach and remove her. In April the Chamber of Deputies approved it, 367-137, and in May, the Senate voted 55-22 in favor. Rousseff was suspended and Vice President Michel Temer became interim president.

The charges: Illegally moving money between budgets

Rousseff is accused of illegally shifting funds between government budgets. Opposition parties say

Brazil’s suspended President Dilma Rousseff arrives at a rally in Brasilia, Brazil, on Wednesday. Brazil’s Senate braces for a final showdown in a trial that could overthrow President Rousseff after months of lengthy proceedings in Congress. She is accused of breaking fiscal laws, in managing the federal budget as her government ran out of resources. AP/Eraldo Peres

that was to boost public spending and shore up support while masking the depths of deficits. Rousseff says other former presidents used similar accounting techniques.

The trial unfolds

Senators have questioned prosecution and defense witnesses over three days of heated debates. Rousseff herself will address the Senate and answer questions on Monday. A vote is expected by the middle of the week. A supermajority—54 of the 81 senators—

is needed to convict her, which would result in her permanent removal from office.

The defense: It’s a coup!

Rousseff and her backers say impeachment is a “coup” by corrupt opposition lawmakers meant to derail investigations into billions of dollars in kickbacks at the state oil company. They also argue that Brazil’s ruling class wants to end 13 years of leftist government. Opponents say Rousseff ’s budget maneuvers

Another possibility: Return to office

If fewer than 54 senators vote to remove her, Rousseff would return to office. She’s promised that if that happens, she would let voters decide in a plebiscite whether they want early presidential elections.

Brazil’s poisoned politics cloud the future

Brazilians are soured on politicians in general; both Rousseff and Temer are very unpopular. A poll taken last month by Datafolha found that 62 percent want new elections to solve the crisis. But before new elections could occur, both Rousseff and Temer would have to resign or be removed from office. AP

ASHINGTON—Donald Trump’s latest contortions over immigration policy underscore one of his most daunting challenges: speaking to multiple audiences at once. Presidential candidates often struggle to smooth sharp rhetoric as they move to moderate their image in a general election—Mitt Romney’s strategist famously likened the process to shaking a child’s Etch A Sketch. But Trump, who won in a crowded primary season by obliterating nearly every rhetorical boundary, seems to find the task exceedingly difficult. His support among Latinos, blacks and other minority voters ranks well behind rival Hillary Clinton and in, some cases, among the lowest ever recorded in polls. Perhaps more important to Trump’s electoral strategy, accusations of racist rhetoric have stymied his ability to consolidate moderate Republicans and independents, especially suburban women. Yet, adjusting his message to appeal to those groups risks alienating many of Trump’s core supporters, who are drawn to his tough promises to deport immigrants here illegally and the belief that he says what he means. “It’s a little late to say, ‘Oh, never mind,’” said Whit Ayres, a Republican pollster who advised Florida Sen. Marco Rubio during the primary. “He might conceivably make a little more progress w ith Republican-leaning voters who have been put off by his rhetoric, but you’ve got to balance that against the people who were attracted by him in the first place because of his pledge to deport 11 million illegal immigrants.” Democrats and some Republican strategists have asserted that Trump may not really be trying to lure minority voters. At rallies across the country in recent days, he has been making appeals to blacks before nearly all-white audiences. He speaks about black life in the US in near-apocalyptic terms, overstating the degree of poverty, joblessness and violence among blacks. Trump may be “trying to make affluent suburbanites feel like voting for him isn’t racist,” said Michael Steel, a former adviser to Republican House Speaker John A. Boehner and to ex-Florida Gov. Jeb Bush’s primary campaign. “It’s a difficult box for him because if he shifts to a more popular position, it undercuts his position as an outsider and truth-teller,” Steel said. Trump often speaks extemporaneously, making it hard to pin him

down on policy and easy to overstate the extent to which he is consciously shifting his words to courtspecific demographic targets. During a Republican primary debate last November, Trump promised a deportation force, notably praising President Dwight D. Eisenhower’s 1950s-era program that removed more than 1 million people under the outdated now-offensive name Operation Wetback. He reiterated his pledge to deport a day later, adding in a television interview that he would do it “humanely,” a phrase he has often used. And in his initial television ad that began airing last week, Trump reinforces his emphasis on tough immigration enforcement, with a bleak depiction of young men sprawled atop freight train cars headed to Texas, above the caption “open border.” But Trump began signaling a shift after recent meeting with more than 20 Latino business executives, pastors and civic leaders at Trump Tower. Tr u mp “ac k nowledged t he hard part is the 11 million” who are in the country illegally, according to Jacob Monty, a Texasbased immigration attorney who attended the meeting, speaking by telephone from Houston. A fter ward, Trump insisted h i s pol ic y h a s not c h a nged , then began altering his rhetoric through a series of statements, yet, two comments this week left him new wiggle room. In a Fox News interview on Monday, Trump suggested he might continue a more vigorous version of President Barack Obama’s deportation policy. Those who commit crimes, he said, are “going to be out of here so fast, your head will spin.” Yet, he added, “as far as the rest, we’re going to go through the process, like they are now—perhaps with a lot more energy.” He declared later at a Fox News town hall that “there could be a softening” of his immigration policy and even allowed that some immigrants could gain legal status, while stressing that they would have to pay back taxes and could not become citizens. The position was similar to several of his Republican primary rivals, which Trump at the time deemed “amnesty.” “There’s no amnesty, as such,” Trump insisted on Wednesday. “There’s no amnesty, but we work with them.” Yet, even as Trump attempts to convey a shift on deportations, he continued to fire up supporters with tough talk about his central promise to build a wall along the Mexican border. TNS

Russian econ at risk of delayed recovery after Crimea flare-up

he recent flare-up over Crimea may have just delayed Russia’s economic recovery. After President Vladimir Putin accused Ukraine of plotting terrorist attacks on the Black Sea peninsula this month, the chance that Western countries will scrap economic sanctions against Russia has declined, according to a Bloomberg survey of economists. Of the 21 asked, 52 percent see the European Union (EU) beginning to lift its penalties in the next 12 months. That’s down from 69 percent in the previous survey. Only 10 percent expect the US to start removing its sanctions, down from 19 percent a month ago. “Increasing Ukraine tensions will undermine investor confidence, keep EU and US sanctions in place and further put off foreign capital flows, as Putin will not be focused on economic reforms,” said Christopher Shiells, a senior analyst at Informa Global Markets. “This will weaken the ruble and force the central bank to adopt a more cautious, hawkish tone.”

The sanctions imposed after Russia annexed Crimea in 2014 have compounded pain from a drop in oil prices, triggering capital outflows and a plunge in the ruble. With oil now near $50, the government is running its widest budget deficit since 2010 and forecasts the economy to grow less than 1 percent next year. The central bank kept the key rate unchanged last month at 10.5 percent, after a June cut that ended nearly a year holding pat. The ruble has gained more than 13 percent against the dollar this year, the second-best performer among emergingmarket currencies tracked by Bloomberg, after the Brazilian real. Still, the gains have yet to erase last year’s 20-percent loss. Tensions between Russia and Ukraine escalated this month when Putin accused the government of staging attacks that killed two servicemen in Crimea. Ukraine said the incident never happened, while both sides bolstered their forces manning the frontier along the peninsula. Bloomberg News

World

sMirror

www.businessmirror.com.ph | Tuesday, August 30, 2016

UK’s May orders Brexit plans ahead of G-20 meet

nited Kingdom (UK) Prime Minister Theresa May asked her Cabinet ministers to come up with a blueprint for how their departments may be able to benefit from Britain’s exit from the European Union (EU) ahead of the Group of 20 (G-20) leaders’ summit in China, according to newspaper reports. Policy-makers will have to come up with their action plans for a Cabinet meeting at Chequers, the prime minister’s country house on Wednesday, The Sunday Telegraph reported, without citing anyone. UK Chancellor of the Exchequer Philip Hammond is resisting plans by some ministers to pull out of the EU single market, The Sunday Times reported. May at the meeting is expected to say her top priority is finding a plan that will help make Brexit a success before she flies to Hangzhou, China, for the G-20 leaders summit on September 4 and 5. More than three quarters of May’s Cabinet had campaigned for Britain to remain in the EU before the June 23 referendum.

Cabinet divide

The Cabinet is said to be divided

over whether Britain should continue to operate in Europe’s single market, the Times reported, without citing anyone. Treasury officials back access to the market for the financialservices industry as a top government priority, the Times reported, while chief Brexit negotiator David Davis and Trade Secretary Liam Fox think Britain will have to leave to fulfill May’s pledge to impose border controls, according to the newspaper. T he Cabinet committee in charge of Brexit is meeting next week when both Davis and Fox will submit papers on how leaving the EU should work, The Times said. Both want the Prime Minister to activate Article 50 of the Lisbon treaty—the trigger for formal Brexit talks to begin with Brussels—in early 2017. Davis will also outline what needs to be done to repeal the 1972 European Communities Act. May is planning to use the G-20 meeting to highlight the wealth of opportunities that will arise from Brexit and discuss future trade relationships, The Sunday Telegraph said, citing unidentified government aides. Bloomberg News

India seeks $15-B investment to double mining output

The Indian government seeks to end 40-year government monopoly on mining and selling coal. Bloomberg News

ndia expects to woo 1 trillion rupees ($15 billion) of investment over five years to double mining output and cut mineral imports. The government’s goal is to fast-track exploration, including upfront payments for discovered deposits when the mines are auctioned, Mines Minister Piyush Goyal said in an interview. The administration will invite foreign companies to participate, he said, while acknowledging challenges, such as land acquisition and environmental hurdles. “We’re working to change the rules of the game from doing small amounts of exploration in an incremental fashion to doing it on a fast-track, one-shot, big-picture way,” Goyal, 52, said on Saturday in New Delhi. There’s “easily” scope to pour 50 billion rupees into the search for deposits, he said. The world’s fastest-growing major economy will need increasing supplies of everything from iron ore to coal to achieve Prime Minister Narendra Modi’s objective of faster development powered by more manufacturing. Rio Tinto Group and steelmaker Posco are among foreign companies that have put Indian plans on hold because of red tape and difficulties in acquiring land, an indication of the challenges Goyal’s agenda faces. India in 2015 embraced competitive auctions as the best long-term approach to resource allocation after bruising corruption scandals over discretionary or free allotments. The nation auctions exploration and mining rights. Officials earlier had worked out a policy of paying explorers a royalty over the life of a mine, rather than up-front, after critics said there wasn’t enough incentive for companies to scour for minerals. Goyal, who is energy minister and added mining to his portfolio when Modi reshuffled his Cabinet

in July, said mineral exploration in India is “nascent.” He recommended that overseas explorers and miners consider ventures with local partners—and install largely Indian management—to increase their chances of success in the $2-trillion economy. The minister said he’s assessing the minerals being imported by India to focus the country’s exploration efforts. Imports of iron ore, for instance, may amount to about 10 million tons in 2016, according to the CRU Group, a commodities researcher. Environmentalists have resisted an effort by Vedanta Ltd. to mine the mineral at Niyamgiri in the eastern state of Odisha. On ly about 13 percent of 575,000 square kilometers with geological potential in India has been explored in detail, so far, with minimal private-sector involvement, according to the Federation of Indian Mineral Industries. “It doesn’t make sense to import what we already have in our country,” said Seshagiri Rao, joint managing director at Mumbai-based JSW Steel Ltd. “Raising domestic output will put pressure on prices of the commodity and make it more affordable for users.” Rio Tinto Group on August 22 said it’s shutting a top-class diamond deposit in India—more than a decade after its discover y—as part of cost cutting. Delays in green permits stymied development of the project. The company subsequently said it will seek to source services and equipment from the South Asian nation, and offered voluntary severance to 300 employees. One of India’s priorities is to attract the top technology used by overseas companies, Goyal said. The administration will respect the environment, he said. “ T he wea lt h is below t he ground,” Goyal said. “That is true wealth.” Bloomberg News

China electric-car start-up Bloomberg News

China’s electric-car start-ups face wipeout by new rules

hina’s electric-vehicle (EV) industry, with 200-plus companies backed by a raft of billionaires, verges on a massive shakeout as the government imposes stricter technology standards on fledgling manufacturers and considers limiting their number to only 10. Any curbs would be aimed at weeding out the weak, said a senior executive with the state-backed auto manufacturers’ association, and they may push as many as 90 percent of EV start-ups toward extinction, a government-linked newspaper said. So far, only two ventures have obtained approval to build cars, based on a review of National Development and Reform Comm i ssion ( NDRC ) doc u ment s. Three others say they plan to apply for permits. Jack Ma, Terry Gou, Li Kashing and Jia Yueting are among the investors who’ve poured at least $2 billion into building alternative-energy vehicles, as China tries to combat the smog choking its cities. Generous subsidies helped cultivate a gold-rush mentality, prompting concerns the industr y is plagued by too many companies lacking the technical know-how to make electric or hybrid cars that measure up to those from Tesla Motors Inc. or General Motors Co. “There are too many entrants in the sector, and some of them are just speculators,” said Yin Chengliang, a professor at Shanghai Jiao Tong University’s Institute of Automotive Engineering. “The government has to raise the threshold. It’s bad to see irrational investments in projects with low technology levels.”

Overcapacity concerns

The potential cap on EV startups comes as the world’s biggest auto industry grapples with overcapacity and high inventories.

200 The estimated number of Chinese companies in electric-vehicle industry

Carmakers are seeing pressure on their profit margins w ith t he spread of cheap models, while stringent fuel-economy and emissions targets are set to raise costs. China surpassed the US last year to become the world’s biggest market for new-energy vehicles—comprising electric vehicles, plug-in hybrids and fuel-cell cars. Domestic automakers sold 331,092 units in 2015, according to the China Association of Automobile Manufacturers. The government’s sales target is 3 million units a year by 2025—a tenfold increase—and it’s offering subsidies that can total 60 percent of an electric-car’s sticker price. There currently are about 4,000 new-energy vehicle (NEV), models in development. “It’s true we’re emphasizing support to develop new-energy vehicles, but should we allow everyone to go ahead?” said Dong Yang, executive vice chairman of the manufacturers’ association.

10 permits

The Ministry of Industry and Information Technology (MIIT) is considering restricting the number of

start-up EV makers to a maximum of 10, said Dong, who meets regularly with its officials. That count won’t include traditional carmakers, such as SAIC Motor Corp. and BYD Co., that are developing NEVs. The MIIT didn’t respond to a faxed request for comment. Yet, even those start-ups getting permits have more mandates to meet before switching on their assembly lines, as the government introduces stricter quality-control measures. In a draft policy document posted for public feedback this month, the MIIT listed 17 technologies that companies intending to sell electric cars must possess in order to ensure “healthy” development of the industry. Those include a control system that determines the performance and stability of the NEV, an information system that tracks the sources and conditions of key parts, and a process for recycling or reusing batteries.

Meeting standards

The Economic Daily, an official newspaper run by the State Council, said 90 percent of the companies currently developing EV platforms still won’t meet the standards in two years. The report cited unnamed industry analysts. One successful applicant is Beijing Electric Vehicle Co., which is controlled by BAIC Group, the stateowned manufacturer for Hyundai Motor Co. and Daimler AG’s Mercedes-Benz. It will build a factory in the capital city that’s capable of making 70,000 EVs a year. T he other is Hangzhou Changjiang Passenger Vehicle Co., which counts Hong Kongtraded FDG Electric Vehicles Ltd. as a major shareholder. Once on the verge of elimination, the former state-owned bus maker was revived by an infusion from FDG, which counts Li’s foundation as a minority investor. Li has an estimated net worth of $31.2 billion, according to the Bloomberg Billionaires Index.

‘Huge problem’

“ The speed at which they’re g ra nt i ng per m ission is wor rying,” said Zhang Zhiyong, a Beijing-based independent auto analyst. “Many companies are

constructing their manufacturing facilities, but they’re blocked at the door from getting the licenses. This is a huge problem.” The NDRC didn’t respond to a faxed request for comment. The start-ups intending to apply for manufacturing permits include Wanxiang Group Corp., owner of Karma Automotive Llc., which announced a hybrid that uses solar power and costs more than $115,000. Its $375-million factory is planned for Hangzhou. Another is Jia’s LeEco, said Huang Hao, a Beijing-based spokesman. LeEco will invest 6 billion yuan in a factory with initial capacity for 200,000 cars a year, the company said on August 10. The third is WM Motor, which said on August 17 it raised $1 billion in an initial fund-raising round with plans to introduce its first model in 2018. The company was founded last year by Freeman Shen, a former executive at Volvo Cars owner Zhejiang Geely Holding Group Co.

‘Chaotic’ situation

“It’s right for MIIT to send out the signal that not everyone can get the permit,” Shen said. “The current situation is a little bit chaotic with too many unqualified companies, such as low-speed EV makers and auto-parts companies, joining in the competition.” The government also plans to phase out subsidies after 2020, removing an incentive for startups depending on them to achieve profitability. Last year the average EV maker produced about 3,000 cars, far below the scale required to ensure returns on investment, said Wang Cheng, an official at the China Automotive Technology and Research Center. Some companies and local authorities invested in making NEVs and batteries even though they lack the necessary technology, and that worsened overcapacity, Wang said last month. “There’s definitely a bubble,” said Yale Zhang, a managing director at researcher Autoforesight Shanghai Co. “If you don’t own the core technology and can’t build up the brand, it’s ‘game over’ very quickly once you burn through the cash.” Bloomberg News

Tuesday, August 30, 2016 • Editor: Lyn Resurreccion

The World BusinessMirror

Iran judiciary confirms arrest of nuke negotiator

EHRAN, Iran—A member of Iran’s nuclear negotiation team was accused of espionage activities and arrested, the country’s judiciary confirmed on Sunday.

A spokesman for Iran’s judiciar y, Gholamhosein Mohseni Ejehi, said at a news conference that a suspect had been released on parole but was still under investigation. “He is still in limbo and may or may not be convicted,” Ejehi said. Ejehi did not name the suspect. Last week news agencies loyal to

Iranian hard-liners had named Abdolrasoul Dorri Esfahani—a negotiator who was working on lifting economic sanctions in tandem with the nuclear deal—as having been arrested. That prompted Esfahani to deny reports that he had been arrested, saying that he was free and had not done anything wrong.

The news comes as hard-liners increase their attacks against the agreement that Iran signed last year with six world powers, including the United States, to curb its nuclear program in exchange for a lifting of economic sanctions. Conservatives have criticized the agreement as a capitulation to the United States, and could use the news of a possible spy on the negotiation team to bolster their argument. The nuclear deal remains broadly popular among Iranians, but is coming under growing scrutiny with elections scheduled for June. Moderate President Hassan Rouhani is expected to seek a second term by campaigning on the idea that the agreement has helped end

Iran’s isolation, but many Iranians say they have not seen benefits from the lifting of sanctions. Hard-line media organizations reported that the suspect held dual nationality. It was not immediately clear whether Esfahani had dual citizenship, although media reports have identified him as a chartered accountant with memberships in professional organizations in Britain and Canada who was also an adviser to the governor of Iran’s central bank. Dual nationals have come under increasing surveillance since the nuclear deal. At least six Iranians holding dual citizenship have been arrested since the deal was struck, according to family members and media reports. Los Angeles Times/TNS

www.businessmirror.com.ph

Kerry arrives for Bangladesh talks amid terrorism concerns

HAKA, Bangladesh—US Secretary of State John Kerry is in Bangladesh amid increasing concerns about terrorism in the South Asian nation. Kerry arrived in Dhaka on Monday after weekend talks in Geneva on Syria and planned to meet with Bangladeshi officials, opposition and civic leaders who are coping with a series of extremist attacks. The most recent killed 20 people, including 17 foreigners, at a popular restaurant last month in Dhaka, the capital. The Islamic State group has claimed responsibility for the attack, but authorities maintain that a local banned group, Jumatul Mujahedeen Bangladesh, was behind it. Kerry, on his first visit to Bangladesh as secretary of state, plans to discuss counterterrorism cooperation, along with human-rights and economic development. After his brief stop in Bangladesh, Kerry travels to India to attend the seventh meeting of the US-India strategic dialogue. Those

discussions are taking place as tensions rise in the disputed region of Kashmir, scene of some of the largest protests against Indian rule in recent years. Since early July, at least 67 civilians have been killed and thousands injured, mostly by government forces firing bullets and shotguns at rock-throwing protesters. Two policemen have been killed and hundreds of government forces have been injured in the clashes. India and Pakistan control parts of the Himalayan territory and claim it in its entirety. US officials say Kerry will continue to urge dialogue between India and Pakistan over the dispute, the cause of two of three wars between the nations. Many Kashmiris want an end to Indian rule and favor independence or a merger with Pakistan. More than 68,000 people have been killed since rebel groups began f ighting Indian forces in 1989 and in the subsequent Indian military crackdown. AP

Turkish teachers caught up in postcoup crackdown I

STANBUL—It was a notice received by tens of thousands of professiona ls in the aftermath of Turkey’s failed coup, and one that profoundly shocked Uygar Ozdemir. The 36-year-old high-school sports teacher had been suspended from his job in an Istanbul school, accused of providing financial support for a terrorist organization and promoting the organization on social media. Ozdemir returned to Istanbul from vacation and began trying to unravel how he got caught up in one of the biggest dragnets in modern Turkish histor y—one designed to root out followers of a reclusive Islamic cleric who, the government says, was behind the July 15 coup attempt that left more than 270 people dead. “In the beginning I was ver y sur prised. I thought, ‘How can it be possible?’ I couldn’t believe that I was associated with an organization, religious or terrorist, which I never had a link to in my life,” said a shaken Ozdemir, noting he had never even been to a mosque as an adult, much less followed a secretive religious cleric. “It is a very tragic incident for me,” he said. He wasn’t alone. Hundreds of kilometers to the south in Turkey’s coastal town of Izmir, 37-year-old high-school counselor Seyda Kara was among those receiving a similar notice. The official suspension letter fell from her hands, when she opened it, such was her shock. More than 20,000 teachers have been suspended from public schools, while thousands of private-school teachers have lost their jobs. Both Kara and Ozdemir insist they have nothing to do with cleric Fethullah Gulen, who lives in self-imposed exile in the United States and whose movement runs charities, schools and businesses worldwide. Turkey has designated Gulen’s movement a terrorist organization. Turkey’s failed coup by rebel military officers was swift and forceful. In the space of a few hours, fighter jets overflew Ankara and Istanbul, rattling windows with sonic booms while helicopters strafed buildings and tanks rolled down city streets. It was ultimately defeated by people heeding a call from President Recep Tayyip Erdogan to take to the streets in defiance. T he gover nment ’s ensuing crackdown was no less swift. A state of emergency was declared. More than 40,000 people have been detained and nearly

85,000 suspended or dismissed from a broad range of publicsector jobs, from schoolteachers and doctors to airline staff, diplomats, judges, journalists and artists. More than 4,200 institutions have been closed or seized, including schools. Erdogan says the purges are essential to rid the Turkish state of Gulen’s followers. Gulen himself has condemned the coup and denies any involvement. The government has vowed to continue the crackdown. On Wednesday it decided provisionally to release 38,000 prisoners in an apparent attempt to make room for thousands arrested in the coup investigation. Some say the government’s response is understandable to a degree. There is a “broad consensus” in Turkey that Gulen followers played an important role in the coup attempt, said Fadi Hakura, associate fellow in the London-based Chatham House think tank. The movement’s primary activity in Turkey was in education, so the government was “right to conclude that at least a sizable segment of the Turkish education system was infiltrated,” he said. “ T he Tu rk i sh gover n ment has some leg it imac y to pur sue Gulenist supporters within t he st ate ad m in ist rat ion, in general, and the education f ield, in pa r t icu l a r,” Ha kura said. “However, the government needs to be ver y, ver y careful that this cleansing operation, as it calls it, does not encompass... many innocent individuals who are completely unconnected to the Gulen movement and whose reputations and professiona l careers have been severely damaged by the government’s postcoup crackdown.” Ozdemir and Kara insist that is exactly what happened to them. Kara said she knew that the state of emergency would have a wide impact on society, “ but I never thought I would be affected personally.” Turkey’s wideranging crackdown has spurred several European allies and rights organizations to urge restraint. Erdogan has been defiant, criticizing Europe for not showing enough support, blasting the United States for not quickly extraditing Gulen, and vowing to continue the purges. Ozkan Yucel, Kara’s lawyer, fears that the law is being sidelined in the name of rooting out coup plotters, bundling the innocent in with the guilty. “ The rule of law has been put on the shelf to a great extent,” he said. “For a second, one can

Uygar Ozdemir, 36, a high-school sports teacher, speaks during an interview with The Associated Press in Istanbul. Teachers are caught up in one of biggest dragnets in Turkish history, as government seeks to root out followers of Islamic cleric it blames for coup attempt. AP/Thanassis Stavrakis

85,000 The estimated number of Colombian people who were driven from their homes over five decades

t h i n k : T he cou nt r y is goi ng through an extraordinary situation, therefore, some measures are needed. But whether those measures are proportionate or realistic is questionable.” Ha kura said many were c o n c e r n e d t h a t “ t h e Tu r k ish state’s ability to provide adequate education services will

be diminished for generations to come.” For Kara and Ozdemir, the consequences have been devastating. Although they haven’t been fired, they face investigations to determine whether they w ill be reinstated or sacked. Under the state of emergency, those dismissed can’t appeal, and can never work in the public sector again. Kara knows of no reason for being on the purge list, beyond possibly as a case of mistaken identity. The only explanation Ozdemir can contemplate was his use of a bank connected to the Gulen movement—an account he opened for convenience, he said, because a branch near his home offered interest-free banking. AP

Brussels attack was probably arson, not a bomb–prosecutor

RUSSELS—Reports of a bomb outside Belgium’s criminal institute early on Monday are probably false, the Brussels prosecutor’s office said, describing the incident as much more likely an arson attack designed to destroy criminal evidence. “It’s probably not terrorism. It’s a criminal act,” Spokesman Ine Van Wymersch said. “I cannot confirm that there was any bomb.” State broadcaster RTBF and other outlets had reported that a car drove through a security barrier at the site about 2 a.m. (00:00 GMT), followed by an explosion that caused significant damage to the facility on Brussels’s north side. Nobody was injured.

The crime lab assists and advises Belgium’s justice authorities in carrying out their investigations. Investigators said the suspected arsonists set fire to a laboratory used to analyze DNA samples found at crime scenes. “So it’s an act that could be linked to [destroying] several files,”Van Wymersch said. She said any explosion heard by residents may have been caused by material being consumed in the fire. Belgium has been on high alert since coordinated March 22 suicide bomb attacks on the Brussels airport and subway killed 32 people. AP

The World BusinessMirror

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Tuesday, August 30, 2016

Amid weak Canadian growth

Trudeau heads to Beijing to boost trade

rime Minister Justin Trudeau is heading for his first official visit to China, seeking to reset relations and boost economic ties with Canada’s second-largest trading partner.

Tr udeau de pa r t s on Monday on a 10-day trip to Beijing, Shanghai, Hong Kong and Hangzhou, where he’ l l attend the Group-of-20 (G-20) summit. He’ll meet with Premier Li Keqiang, Alibaba Group Holding Ltd.’s Jack Ma and Hong Kong billionaire Li Ka-Shing, controlling shareholder in Calgar y-based Husky Energy Inc. It’s a good time to be out of the country. While the prime minister is away, Statistics Canada is expected to report the economy shrank 1.5 percent in the second quarter. All the more reason for Trudeau to tackle issues, such as the decline of Chinese investment in Canada’s energy sector. “What actually we need with China is to reset the relationship a little bit,” Trudeau told reporters on Friday, the same day his predecessor, Stephen Harper, announced he was resigning from politics. It was Harper in 2012 who introduced rules restricting takeovers in the oil sands by state-owned companies. The measures were designed to prevent foreign governments from gaining too much influence over Canadian oil.

1.5% The percentage of decline of Canadian economy in the second quarter

Cnooc deal

Since reaching a record $21.3 billion that year, including Cnooc Ltd.’s $15.1-billion acquisition of Nexen Inc., Chinese investments in Canada’s oil and gas sector have cooled to $2.19 billion this year, according to data compiled by Bloomberg. Purchases slumped to $343 million in 2013, the year after Harper imposed the new rules. Finance Minister Bill Morneau, who will accompany Trudeau on the trip, hinted on August 21 the government was open to easing the 2012 restrictions. The liberal government is focused on “ways we can enhance the Canadian economy,” Morneau said. “In that light, we seek

to encourage investment in Canada and that’ll be something we’ll be bringing forward in meetings in China, as we will in bilateral meetings with all the countries we meet.” Trudeau echoed that five days later, saying the issue of oil-sands investment was one “that we’re certainly going to lean into” on the trip. He also said Canada would press against a change that would restrict China’s market to Canadian canola exporters.

Speaking out

Trudeau will draw on his family connection with China, which dates back to his father, who established ties while prime minister. The younger Trudeau has tried to balance courtship and admonition of Beijing, pursuing trade while also speaking out—joining Group-ofSeven (G-7) leaders in expressing concern about China’s assertions in the disputed South China Sea, admonishing a senior Chinese official for his treatment of a Canadian reporter, and citing the country’s human-rights record. That said, Canada has sent mixed messages to China recently. British Columbia instituted a tax on foreign real-estate buyers, a move aimed almost exclusively at wealthy Chinese driving up the Vancouver housing market, while Trudeau’s government has moved to collect more data on foreign home ownership. Canada complained earlier this year after China Foreign Minister, Wang Yi lashed out at a Canadian journalist during a visit to Ottawa

Canadian Prime Minister Justin Trudeau (right) proposes a toast to US President Barack Obama during a state dinner on March 10 in Washington. Paul Chiasson/The Canadian Press via AP

for questioning China’s humanrights record. Trudeau also hosted Wang in Ottawa on the heels of the G-7 summit that riled China, one Trudeau preceded with a state visit to Japan, a regional rival.

Europe trade

At the G-20 meeting, Canada will be engaging European states to press for ratification of a trade deal with the European Union. Inter nationa l Trade Minister Chrystia Freeland, who will accompany Trudeau on the trip, appointed a new envoy last week to

help ratify the pact, while saying the G-20 talks overall will focus on ways to spur growth. Still, if Trudeau is going to diversify trade and spur economic growth, China will be a crucial partner. This year’s oil investment figures were driven in part by a $1.3-billion purchase of a stake in some of Husky Energy’s pipelines and storage tanks in A lberta and Saskatchewan by companies controlled by Li. Although merchandise trade between Canada and China totaled $75 billion in 2015, up 20 percent

from 2010, that’s only an eighth of the value of total trade between Canada and the US. Trudeau’s call for a “more balanced” relationship evokes data that show Canada’s imports from China are worth almost double that of its exports to the country. “We need to ensure that access to markets for our producers is there,” Trudeau said on Friday. “These are the interests we are going to be strongly and carefully balancing, as we engage with the economic powerhouse that is China.” Bloomberg News

groups have renewed Billionaire’s Clinton ties face scrutiny Christian focus on fighting racism W C ASHINGTON—Nigerian billionaire Gilbert Chagoury, one of Africa’s richest men, has built a reputation as a giant of global philanthropy. His name is on a gallery at the Louvre and a medical school in Lebanon, and he has received awards for his generosity to the Catholic Church and Saint Jude’s Children’s Hospital. He owns a seven-bedroom hilltop mansion in Beverly Hills, and he has a high-level network of friends from Washington, D.C., to Lebanon to the Vatican, where he serves as an ambassador for the tiny island nation of Saint Lucia. His web site shows him shaking hands and laughing with Pope Francis. “I never imagined what the future would hold for me,” Chagoury once said of his boyhood in Nigeria. “But I knew there was a vision for my life that was greater than I could imagine…. I consider it a duty to give back.” Since the 1990s, Chagoury has also cultivated a friendship with the Clinton family—in part by writing large checks, including a contribution of at least $1 million to the Clinton Foundation. By the time Hillary Clinton became secretary of state, the relationship was strong enough for Bill Clinton’s closest aide to push for Chagoury to get access to top diplomats, and the agency began exploring a deal, still under consideration, to build a consulate on Chagoury family land in Lagos, Nigeria. But even as those talks were under way, bureaucrats in other arms of the State Department were examining accusations that Chagoury had unsavory affiliations, stemming from his activities and friendships in Lebanon. After a review, Chagoury was refused a visa to enter the US last year. Chagoury is a prominent example of the nexus between Hillary Clinton’s State Department and the family’s Clinton Foundation, which

Democratic presidential candidate Hillary Clinton greets members of law enforcement, who escorted her motorcade before leaving Reno-Tahoe International Airport in Reno, Nevada, on August 25, after a campaign event at Truckee Meadows Community College. AP/Carolyn Kaster

has come under renewed scrutiny during her presidential run. The organization, founded as a way for the Clintons to tap their vast network for charitable works, has tackled some of the steepest challenges in the developing world, including rebuilding Haiti and fighting AIDS in Africa. It has also come under fire for its willingness to accept money from foreign governments with interest in swaying US policy during Clinton’s time as secretary of state, and the controversial histories of some donors. Chagoury was born in 1946 in Lagos to Lebanese parents, and as a child attended school in Lebanon. He sold shoes and cars in Nigeria, according to a biography on his web site, before marrying the daughter of a prominent Nigerian businessman. During the rule of Gen. Sani Abacha, who seized power in

Nigeria in 1993, Chagoury prospered, receiving development deals and oil franchises. In the 1990s Chagoury portrayed himself as an Abacha insider, as he tried to influence A mer ic a n pol ic y to be more friendly to the regime. Soon after President Bill Clinton named Donald E. McHenry a special envoy to Nigeria in 1995, Gilbert and brother Ronald Chagoury visited McHenry in his office at Georgetown University in Washington. The US was pushing for the return of democratic rule in Nigeria; Abacha, meanwhile, was eager to have his country taken off a US list of nations that enabled drug trafficking, McHenry said. “Their effort was to try and influence anyone who they thought could influence the US government,” McHenry said, adding that the approach was heavy-handed.

“They tried every key on the piano.” Abacha turned out to be “one of the most notorious kleptocrats in memory,” stealing billions in public funds, acting Assistant Attorney General Mythili Raman later said. After Abacha’s death in 1998, the Nigerian government hired lawyers to track down the money. The trail led to bank accounts all over the world—some under Gilbert Chagoury’s control. Chagoury, who denied knowing the funds were stolen, paid a fine of 1 million Swiss francs, then about $600,000, and gave back $65 million to Nigeria; a Swiss conviction was expunged, a spokesman for Chagoury said. In the years afterward, Chagoury’s wealth grew. His family conglomerate now controls a host of businesses, including construction companies, flour mills, manufacturing plants and real estate. TNS

hristian groups have recently been putting more time and resources into addressing racism, with the issue at the forefront because of police shootings of black men and the Black Lives Matter movement. One of the largest US evangelical college ministries, Inter varsity Christian Fellowship, took up Black Lives Matter at its most recent student missions conference. Two overwhelmingly white religious groups—the Episcopal Church and the Presbyterian Church, (USA), which is the nation’s largest Presbyterian denomination—have, for the first time, elected black clergy as their top church officers. The New Baptist Covenant, an initiative by President Jimmy Carter to unite Baptists, has sharpened its programming focus on building partnerships between black and white churches. And Christian publications and blogs, such as Christianit y Today, Mere Orthodox y, Relevant, The Christian Century and the Gospel Coalition, have also put a spotlight on systemic racism. Here are some examples of how Christians are tackling the issues:

Southern Baptist convention: The denomination

founded in 1845 in support of slaveholding has recently made a priority of addressing racism. In 2012 the convention elected its first black president, the Rev. Fred Luter. The Southern Baptist public policy arm, the Ethics and Religious Liberty Commission, has been holding talks and conferences for pastors on the Gospel and racial reconciliation. And over the past year,

pastors from the 15.5 million member denomination and a major black Baptist group, the National Baptist Convention, USA, started a public conversation about fighting racism. At the Southern Baptist Convention meeting in June, delegates voted to repudiate use of the Confederate f lag.

Episcopal church: T he church, which has been the spiritual home of many Founding Fathers and US presidents, last year voted to put more resources behind combatting racism. T he 1. 8 m i l l ion member denomination also elected its first black leader, Presiding Bishop Michael Cur r y. Dioceses have been holding antiracism training and some are researching their historic links to slavery. The Diocese of Rhode Island plans a museum in its cathedral that will examine the church ’s involvement with the slave trade. Presbyterian Church in America: At its meeting in

June, the nation’s second-largest Presbyterian group issued a detailed apology for its past bigotry, repenting sins “committed during the civil-rights era,” past teachings that the Bible condoned slavery and discouraged interracial marriage, “participation in and defense of white supremacist organizations,” and its “continuing racial sins.” The denomination was formed in 1973 mostly by Southern churches that wanted to preserve their theologically conservative approach to Scripture, but who were also opposed to desegregation, according to Tobin Grant, a political scientist at Southern Illinois University and columnist for Religion News Service. AP

A10 Tuesday, August 30, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Freedom of speech: Responsibility and accountability

he Internet has changed not only the way we obtain our news, but also how people react to that information. Those who obtain their daily news from online newspapers and from social media know that a person can make comments on the news articles.

Online readers both read the news and the comments to see the reactions. Netizens have at least once made a comment on these articles and it has definitely made it easier to exchange views or see the general sentiment as we read along. Those who read their articles have also encountered comments from users that are offensive, rude, degrading and humiliating. Largely anonymous, these users often post derogatory and deplorable comments on articles as a response either to the article or to other users. Since comment sections are largely uncensored, individual comments can contain expletives, below-the-belt insults and, at worst, threats. As a response to this, one prominent local online news outfit has changed its policy on commenting. In an effort to make the news web site a “safe place” for users, the comment sections will be heavily moderated, and crude and disrespectful comments will be deleted. This move has been largely criticized by online users. Invoking the concept of freedom of speech, they argue that such move is tantamount to censorship and suppresses the right of users to express their opinions freely. Users also fear that such heavy-handed measure allows news sites to censor dissenting opinion and label them as “offensive”. Freedom of expression on the Internet is universally guaranteed by the right to freedom of speech and expression. Article 19 of the Universal Declaration of Human Rights stipulates that “everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.” But does freedom of speech entitle a person to indiscriminate and unfettered use? Civil libertarians have argued that the Internet should keep its free-for-all unfettered policy, where users can express anything and where users can “self-regulate” their behavior and words. But this largely unbridled and unchecked approach on the Internet has spawned a new kind of Internet user: the troll. These types of Internet users anonymously invade the comment sections of Web pages, online forums and social-media pages, posting inflammatory, derogatory and humiliating comments. While largely seen as harmless, trolls can also engage in violent activities, which include harassment, hate speech, misogyny, posting personal information in public and threatening people’s lives. A recent survey conducted by the Pew Research Center has found that 70 percent of online users aged 18 to 24 has experienced online harassment or cyber bullying. Several people have made news from committing suicide after being harassed by trolls. The freedom to express one’s self also entails that one must be responsible for what he or she says. Expressing ourselves freely does not give us the license to say things at the expense of other’s freedom and well-being.

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Chairman of the Board & Ombudsman President VP-Finance VP-Corporate Affairs VP Advertising Sales Advertising Sales Manager Group Circulation Manager

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro

Spreading the benefits of economic gains Manny B. Villar

THE Entrepreneur Continued from A1

eal-estate prices are increasing, but there are no significant risks of price bubbles because of the strong demand. For residential units, in particular, demand is mainly from endusers, like overseas Filipino workers (OFWs) and business-process outsourcing workers. In an effort to track pricing trends in the domestic real-estate sector, the Bangko Sentral ng Pilipinas (BSP) this year created the Residential Real Estate Price Indices (RREPI), which would be released every quarter. The BSP said the RREPI, based on bank-approved housing loans, could be a useful tool in assessing the real-estate and creditmarket conditions in the country. Based on the RREPI, real-property prices in the National Capital Region (NCR) increased by 9.7 percent in the first quarter of 2016, compared to the same period last year. Real-estate prices in areas outside the NCR (AONCR) increased by 9.4 percent during the same period. Other highlights: Condominium units posted the highest year-

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companies are already experiencing labor shortage, particularly for skilled construction workers, as well as engineers. Property consultant Colliers International said in a separate study that this would continue to affect the delivery of real-estate units for all segments. The Colliers study noted that six projects were scheduled for delivery in the second quarter of 2016, but only one was completed because of the “acute lack of skilled labor in construction.” Nevertheless, the property sector is expected to sustain strong growth for the rest of the year because of low inflation (1.3 percent in the first half of 2016, well-below the government’s target of 2 to 4 percent), low interest rates and modest growth in OFW remittances. These factors, according to Colliers, translate to greater purchasing power and higher consumer confi-

dence, which will, in turn, benefit the various segments of the property sector. What makes the growth of the real-estate industry significant is that its contribution to the economy is not only in terms of higher output or GDP. The labor shortage being experienced by some developers show that the real-estate industry is a big employment generator. Jobs are being created not only during the construction phase, but also in the operation of businesses in the newly built malls, other commercial facilities, office buildings and hotels. The real-estate industry also helps in developing new growth areas outside Metro Manila, thus encouraging and stimulating new businesses in the provinces, in the process raising household incomes in those areas. The government’s focus on accelerating infrastructure development, particularly in many areas outside Metro Manila, like Mindanao, should also sustain the growth of the real- estate industry. In the not-so-distant future, I hope to see the same modern landscape in the far-flung provinces of Luzon, the Visayas and Mindanao, as in Metro Manila.

For comments, e-mail mbv.secretariat@ gmail.com or visit www.mannyvillar.com.ph.

No return to normal interest rates–maybe ever

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

on-year growth in prices at 12.9 percent, followed by townhouses at 8.5 percent. About seven out of 10 residential real-estate loans granted were for the purchase of new housing units. Condominium units were the most common house purchases in NCR, while in AONCR, single detached houses were the most popular. NCR accounted for 50.4 percent of the residential real-estate loans granted in the first quarter of 2016, followed by Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon) (28.4 percent), Central Luzon (7.6 percent), Western Visayas (3.8 percent) and Central Visayas (3.3 percent). The real-estate sector’s growth has been so strong that some

The real-estate sector’s growth has been so strong that some companies are already experiencing labor shortage, particularly for skilled construction workers, as well as engineers. Property consultant Colliers International said in a separate study this would continue to affect the delivery of real-estate units for all segments.

John Mangun

OUTSIDE THE BOX

his is the way the system is supposed to work: A government’s central bank loans money to a commercial bank at a “Goldilocks” interest rate. That means the interest rate is not too high to make borrowing too expensive and not too low as to encourage unnecessary and risky investments with the borrowed funds. Assume that ideal interest rate is 5 percent. The commercial bank loans the money it borrowed from the central bank at a profit and to cover the risk of loaning the money. Individual borrowers might buy a new car or house or even a washing machine. All those purchases help grow the economy. Companies also borrow money from the bank to expand and improve their business productivity and profits. That is good for the economy also. Jobs and wealth are created, which leads to more growth and productivity. But the normal

business cycle of good and not-sogood times will always kick in and the government, in its wisdom, thinks that it can push the economy along, better than just letting the business cycle work its way out. The central bank lowers interest rates to make it cheaper for people to borrow and buy things, and for businesses to grow. Theoretically, when the economy is back in the sunshine, the central bank is supposed to raise the interest rates higher back to the “Goldilocks” level. The US Federal Reserve says that

The central bank lowers interest rates to make it cheaper for people to borrow and buy things, and for businesses to grow. Theoretically, when the economy is back in the sunshine, the central bank is supposed to raise the interest rates higher back to the “Goldilocks” level.

it has a formula that it will follow as to when to raise interest rates higher. This is dependant on US employment and economic growth. Of course it is the same formula we have heard about for six years and it never seems to be met. Job growth in the US is apparently fantastic right now. Except there are the same number of people working today as in 2007, even as the working age population is 15 percent higher. Economic growth is so great that this is the first eight-year period in the history of the US when there has not been a single year of 3-percent growth. The forecast for 2016 is 2 percent. But the reason there will not be a return to “Goldilocks” rates is that to do so would bankrupt all

the major central banks. Combined with low interest rates was “Quantitative Easing” first used unsuccessfully during the Great Depression when the central bank “buys” government debt. The major central banks own $25 trillion of financial assets, an amount greater than the economic output of the US and Japan, combined. If interest rates are raised to “normal”, that debt would have to be liquidated. The problem is, who is going to buy it? The reason the central banks own it is because no one wanted to buy it before. Further, all this debt owned by the central banks is at virtually zero interest rate and will be worth even less if/when rates are raised. The Group-of-7 central bank governors have been in their current posts for a collective 17 years, yet only one (Yellen in December 2015) has actually hiked interest rates during this time. Do not expect any significant changes any time soon. 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.

Opinion BusinessMirror

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The intractable drug menace

Reformatting Philippine agriculture Cecilio T. Arillo

database

HE people of this country must not waver in helping President Duterte eradicate the intractable drug menace. Otherwise, drug lords, their system of heartless Narco politics and some media support, with practically unlimited funding by the billions of pesos, will continue to rule the land and destroy society.

Unknown to many people, before President Duterte launched the intensified antidrug campaign, the problem was already widespread due to irresolute prevention and a tenuous justice system under the previous administrations. In fact, as early as March 1999, the National Drug Law Enforcement and Prevention Coordinating Center reported to Congress that of the total 42,979 barangays throughout the country, 6,020, or 14 percent, were already drug affected. Official records showed that 70 percent of heinous crimes, such as kidnapping, murder, armed robbery and, most of all, rape, were drugrelated, and the devastating effects of illegal trafficking and drug abuse have seriously eroded the basic quality of life of many Filipinos. Records at the Supreme Court and the Department of Justice revealed that by October 10, 1998, five years after the reimposition of the death penalty, various trial courts have meted out a total of 748 death penalties, including 422 for rapists. Of the 422 rapists, 153, mostly drug addicts, picked their own daughters. In 1972 there were only 20,000 or more users of different kinds of prohibited and regulated drugs. During President Corazon C. Aquino’s time, specifically in early 1987, when shabu—known also as the poor man’s cocaine, or ice in the US—was introduced in the Philippines, the number of drug users had reached 480,000, and many policemen, according to then-Sen. Ernesto Herrera, were getting involved in drug-related activities. Since then, the number of addicts progressively rose to an unprecedented level. By late 1998, the country had an estimated 1.7 million drug users. A survey conducted by the National Youth Commission showed that 1.2 million of the 1.7 million drug users belonged to the young population, between 15 and 29 years old. Conservatively, each user consumed an average of 5 grams per month. If multiplied using 1.7 million users, it meant that the average consumption per month was 8.5 million grams. Shabu had an average street value of P2,000 per gram. At P2,000 per gram, this was P17 billion per month, or a whopping P204 billion a year. At the end of 1998, the country ranked second to the People’s Republic of China in terms of volume of shabu seized totaling 1,602 kilograms, or 1.602 million grams, with a street value of P3.204 billion. China has been the source of shabu intended for the Philippines, while Hong Kong and Taiwan have been the staging point of Triad Syndicates engaged in trafficking and manufacturing operations in the Philippines. To date, these figures had multiplied three times over the years, and a recent Interpol report highlighted an emerging connection between heroin and shabu producers in the East-Southeast Asian Region after these drug types were frequently seized together. The abolition of the death penalty by the Aquino administration, in reaction to the misplaced outcry of some condescending politicians, churchmen and causeoriented groups, also compounded the problem.

Tuesday, August 30, 2016 A11

The Dangerous Drugs Board (DDB), created under Republic Act 6425 as a policy-making and regulatory body in the prevention and control of drug abuse, was composed of eight ex-officio members from the Cabinet. At DDB’s operational level, however, several government agencies were individually participating in drug law-enforcement activities and in the implementation of DDB’s policies and programs. In the drug prevention aspect, a host of government agencies, business and civic groups, private foundations and other ad-hoc volunteer groups participated in the effort, but merely worsened the problem, because of overlapping functions and responsibilities due to lack of a cohesive coordination from DDB’s level. In an effort to correct this serious flaw, then-President Fidel V. Ramos in September 1996 created “Oplan Mabuhay,” a “comprehensive” plan against the drug menace with then Justice Secretary Teofisto T. Guingona Jr. as the designated chairman. This project, however, merely went to naught for lack of foresight. For instance, it failed to consider that the country’s liberalization policy and the rapid globalization of trade during the Aquino administration that necessitated loosening up of import-export laws, rules and regulations to remove red tape and ease the movements of merchandise had also simplified the smuggling of drugs into the Philippines. Modern technology also provided drug traffickers and manufacturers the opportunity to move fast and further obscure their illicit trade, using sophisticated communications and transportation facilities. Just to cite an example, on September 25, 1999, the Bureau of Customs led by then Commissioner Nelson Tan seized at South Harbor 250 kg of Shabu valued at P500 million. The drug shipment was due for release after it passed through the usual inspection and was, in fact, already certified to be a legitimate commercial cargo from Hong Kong, when customs officials received a tip from an informant. On November 5, 1999, army soldiers and police antinarcotics operatives also seized 420 kg of shabu worth P840 million and arrested four Chinese nationals in Barangay Bayambang, off the coastal town of Infanta, Pangasinan, while unloading the dangerous cargo from a ship. A few months after, National Bureau of Investigation (NBI) agents led by lawyer Reynaldo Esmeralda seized 289 kg of Shabu in 2000 in Pasay City and arrested Sandra Lim, a high-profile drug lord, who was charged and sentenced to life in jail. A year later, lawmen led by lawyer Ruel Lasala, of the NBI, confiscated 498 kg of pure-grade shabu and arrested Panukulan, Quezon, town Mayor Ronnie Tena Mitra, Willie Yao of Fookien, China, and Mitra’s two security aides, Javier Morilla and Roel Dequilla. The illegal drugs, in 15 sacks, were found inside an ambulance being driven by Morilla, with Mitra and Yao as passengers. All the suspects were charged, convicted and sentenced to life imprisonment. To reach the writer, e-mail cecilio.arillo@ gmail.com.

Edgardo J. Angara

ast week Agriculture Secretary Emmanuel F. Piñol keynoted the first Aurora-Korea Development Cooperation Forum in Baler, Aurora, attended by government and private-sector delegations from the Philippines and Korea. I worked with Secretary Piñol— who was then a newly elected governor of North Cotabato—in the late 1990s, when I myself headed the Department of Agriculture (DA). We worked on the Mindanao Rural Development Program (MRDP), where local government executives and other members of regional development councils helped identify the projects they needed to boost development in their respective jurisdictions. Then-North Cotabato Governor Piñol asked me why Manila puts together programs and initiates projects that do not always meet the needs of local communities. That conversation triggered and motivated me to the making of a five-year Mindanao Rural Development Program (MRDP), which was financially supported by the World Bank, was

thrice renewed and has now become the Philippine Rural Development Program. We located the center of the program in Kidapawan, North Cotabato and, from there, it radiated throughout the rest of Mindanao. Under the MRDP, for example, agriculture’s requirements were based on inputs supplied by “on-theground” stakeholders. It reversed the top-down approach and made it bottom-up planning and implementation. Secretary Piñol described the road map he made for agriculture and fisheries before the AuroraKorea Development Cooperation Forum in Baler. He said the DA is currently conducting a nationwide survey to determine the type of soil in each province, considering climactic conditions, rainfall patterns and

other factors affecting agriculture. The end-goal would be to have a nationwide color-coded agriculture and fisheries map to guide farmers and fishermen. Secretary Piñol described this as “area-specific agriculture.” The DA will initiate and hasten a National Food Consumption Quantification Study to measure how much food Filipinos eat on a monthly basis and identify where this food comes from. One aim of this study is to prepare the agricultural sector to meet the food needs of Filipinos 15 to 20 years from now. Another initiative in increasing agricultural productivity is through a smarter, more commonsensical modernization and mechanization program. Secretary Piñol lamented the lack of planning in some instances where the DA—through foreign grants—would build rice mills that aren’t operational because they either lack electricity or were far from the grid. He said farmers were complaining that the equipment they’d be given were prone to breaking down, from lack of maintenance training and spare parts. He discussed about strategic and effective post-harvest, storage and processing facilities. This aligns with the drive to modernize agriculture as well as to eliminate middlemen who control artificially the prices that keep farmers poor. Secretary Piñol

said the DA is currently devising a program where farmers can deposit their harvest in storage facilities, receive a money guarantee equivalent to the prevailing price at the time of deposit, and then can later decide to officially sell them should prices increase. Secretary Piñol also cited the need to provide easy financing to farmers and fishermen. The DA is looking into rolling out a mechanism for allowing poor farmers to take out small loans (around P100,000, for instance) without collateral and at very minimal interest. The secretary deplored the practice of certain government banks, like Land Bank of the Philippines, which provide billions of financing to huge corporations not involved in agriculture, but find it difficult to support a backyard farmer asking for only a couple of thousands of pesos. These are but some salient points in Secretary Piñol’s straightforward plan for the DA. They are pragmatic measures, employing modern technologies for productivity and security and projecting a clear vision for Philippine agriculture and fisheries. Clearly, here is a plan of building up Philippine agriculture that is literally down-to-earth.

E-mail: angara.ed@gmail.com.

Leading Chinese economist upbeat about PHL-China relations Ernesto M. Hilario

ABOUT TOWN

‘H

uge opportunities” are available for trade, investments and people-to-people exchanges between the Philippines and China with the “New Silk Road” project of Chinese President Xi Jinping, according to a top Chinese economist. Professor Zhang Yuyan, Director of the Institute of World Economic and Politics of the prestigious Chinese Academy of Social Sciences, said in a recent forum on “The Role of China in Global Economic Affairs” he is optimistic over the prospect of bilateral ties in the years ahead as his government speeds up implementation of its ambitious Silk Road Economic Belt and the Maritime Silk Road projects. The twin initiative was first announced by Xi in 2013 and began to be implemented a year later, with primary focus on infrastructure development. Internet research yielded the information that the Silk Road, or Silk Route, was an ancient network of trade routes that for centuries were central to cultural interaction through regions of the Asian continent connecting the West and East from China to the Mediterranean Sea. The Silk Road derived its name from the lucrative trade in Chinese silk carried out along its length. Trade on the Silk Road played a significant role in the development of the civilizations of China, the Indian subcontinent, Persia (now Iran), Europe, the Horn of Africa and Arabia, ushering closer political

and economic relations between the civilizations. The Silk Road Economic Belt now aims to connect China with Central Asia, Russia and the Baltic countries in Europe; with the Persian Gulf and the Mediterranean Sea through Central Asia and West Asia; and with Southeast Asia, South Asia and the Indian Ocean. The 21st-Century Maritime Silk Road, on the other hand, seeks to link China’s coast with Europe via two routes, one through the South China Sea and the Indian Ocean, the other from China’s coast through the South China Sea to the South Pacific. Zhang said China has made big inroads in strengthening economic ties with various countries covered by the Belt and Road (B&R) project. Currently, more than 100 countries and international organizations are participating in the B&R, with 30 of them having signed agreements with China on jointly implementing the B&R strategy. More than 20 countries have worked with China in such areas as railway construction and nuclear-power generation. Bilateral trade between China and countries situated along the B&R reached $995.5 billion in 2015. This

figure represents 25 percent of the national total. China has also expanded the scope of 50 overseas economic cooperation areas. Also last year, Chinese companies infused direct investments in 29 countries along the Belt and Road totaling $14.82 billion, or an increase of 18.2 percent over the previous year and accounting for 12.6 percent of the total. Zhang said the Chinese economy is still booming as evidenced by its GDP growth rates, Consumer Price Index (CPI), employment rate, fiscal performance, money supply, interest rates, exchange rates, stock market, and trade and investment. At the same time, he noted uncertainties in the economy, such as currency risks, the real-estate bubble, nonperforming loans, public and corporate debts, and overcapacity. Zhang pointed out that the “new normal” in China would be a shift from high growth to medium-high growth, depletion of rural surplus labor, and lesser dependence on employment in manufacturing as a share of total employment, as the economy would rely more and more on the service sector. The Chinese economy is also approaching the technology frontier, which would require a shift from technology imports to homegrown innovation, he added. To sust a i n C h i na’s econom ic growth, Zhang said, Beijing should i mple me nt v a r iou s sup ply - side reforms. Among these, he suggested, are to liberalize the labor market; improve the education system; build an innovationdriven economic system; strengthen a market-augmented government; reform state-owned enterprises (SOEs); cut excess production capacity; and reform the fiscal and taxation system.

The 21st-century Silk Road, the economist said, seeks to achieve five major goals: better policy coordination; enhanced facilities connectivity; unimpeded trade; financial integration and stronger people-to-people ties. The project also has four dimensions. The physical dimension will strengthen connectivity among countries involved via overland roads, railways, sea routes, airways, the Internet and the like. The financial dimension involves innovation and cooperation in transforming savings into investment in the economy and internationalization of the renminbi, the Chinese currency unit. The institutional dimension seeks to reduce transaction costs and provide incentives for investors, while the cultural dimension will strive to achieve better understanding among various peoples and promote peaceful coexistence. The economist explained that China has no “hidden agenda” in launching the New Silk Road project: “The export of production and construction capacity is not only in the interest of China, but also in the interest of those countries, whose financial resources and infrastructure are far from sufficient by pushing forward their industrialization, as well as helping to stabilize the world economy.” Neither does it have a “sense of guilt,” Zhang said. On the contrary, he emphasized, President Xi wants to implement Belt and Road projects at a faster pace so that more countries would benefit and have “a sense of gain.” I left the forum with a sense that what China wants at this point is to deemphasize the issues that divide the two countries, but rather to highlight what we can readily agree on, for our mutual benefit.

E-mail: ernhil@yahoo.com.

How the next US jobs report could influence the Fed By Mohamed A. El-Erian Bloomberg View

ost of the time, it would be very foolish to suggest that a single data release could determine a policy decision by the Federal Reserve (the Fed). After all, Fed officials— board governors, regional presidents or senior staff members—pride themselves on considering a wide array of numbers and multidimensional models. Yet, the jobs report for August, which will be released on Friday, could well come very close to being the exception. With some stronger economic data that have topped consensus expectations, particularly when it comes to the functioning of the labor market, the Fed Chairman Janet Yellen rightly observed on Friday that “the case for an increase in the federal-funds rate has strength-

ened in recent months.” But a hike is not yet a done deal for at least two reasons: the overall domestic economic picture remains mixed and the international context is rather fragile and uncertain. Against this background, the new employment data could have an important influence on how the Fed decides between hiking interest rates for only the second time in 10 years at the Open Market Committee’s next meeting in mid-September, or waiting until a subsequent meeting (most likely December). To highlight what is specifically at play, let us assume for illustrative reasons that the Federal Open Market Committee (FOMC), the Fed’s highest policysetting committee, were to meet on the same day as the jobs report is released. Under this scenario, I would suggest that the Fed would: Raise interest rates by 25 basis points

if the monthly data were to include employment creation of 180,000 jobs or more in August, a steady increase in the rate of growth of wages, and a labor-participation rate that either is unchanged or edges up without materially increasing the 4.9-percent unemployment rate. Avoid hiking rates if job creation is below 120,000, wage growth stagnates or falls, and a meaningful increase in the participation rate points to additional labor market slack. Outcomes in between, including contrasting developments in wage and job growth, would make things a lot more complicated for Fed officials. And while I would suggest that, for the sake of containing the growing risk of future financial instability, they should be inclined to take a small step in normalizing monetary-policy rates, unless the report is notably weak, I

suspect that mixed data would be more likely to push them to the policy sidelines yet again. In real life, the FOMC will meet almost three weeks (on September 20 and 21) after the release of the August jobs report. As a result, the Fed will have a host of additional domestic and international data to review. In this context, the August labor-market numbers will play an influential but not deterministic role. In the meantime, markets would be well advised to revise upward what remains an overly low implied probability of Fed policy action for the remainder of this year. And, as I argued on August 26, the rest of us should continue to try to broaden the policy discussion beyond central banks and focus a lot more on what other government agencies can and should be doing to promote high inclusive growth and genuine financial stability.

2nd Front Page BusinessMirror

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Tuesday, August 30, 2016

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Duterte: No genocide in bloody drug war 1,800 P

resident Duterte said on Monday his bloody antidrug campaign that has left nearly 1,800 people dead does not amount to genocide, but that he’s ready to go to jail to defend his men from lawsuits.

The number of fatalities in the new administration’s drug war

Mr. Duterte drew a line between the widespread killings sparked by his antidrug war and the brutality under Syrian President Bashar al-Assad and the atrocities committed by Islamic State group extremists. “Genocide? Who did I kill? I did not kill any child. I did not drop barrel [bombs] just likeal- Assad,”

President Duterte said in a speech to mark the Philippines’s National Heroes’ day before war veterans, ambassadors and top officials. “I’m fighting...criminals.” Referring to Islamic State group militants, whom he called “idiots,” Mr. Duterte said, “I do not burn women because they refuse to have sex.” At least 1,779 drug suspects have been killed in President Duterte’s campaign, including 712 who were gunned down in clashes with the police, with the rest being slain in still-unclear circumstances, the national police chief told a Senate inquiry last week. At least 3.7 million Filipinos have become addicted to methamphetamine, a prohibited stimulant known locally as shabu, with about 600,000 drug users and dealers surrendering to authorities, Mr. Duterte said. Human-rights groups have expressed alarm over the spate of killings, and United Nations (UN)-appointed human-rights experts warned steps should be taken to halt the violence, adding that the government and law enforcers could be held responsible. “Claims to fight the illicit drug trade do not absolve the government from its international legal obligations and do not shield state actors or others from responsibility for illegal killings,” UN Special Rapporteur on summary executions

Agnes Callamard said in a statement this month. The 71-year-old President Duterte built a name with his deadly crime-busting style as a longtime mayor of southern Davao City. He described his campaign against drugs as a harsh war that would involve the military because the problem has worsened into a crisis and claimed the lives of law enforcers. “We might still end up like the South American countries and their fractured governments. I am declaring war,” he told an audience at a national heroes’ cemetery on Monday, which included ambassadors, war veterans and security officials. The drug menace, he said, “has infected every nook and corner of this country involving generals, mayors, governors, barangay [village] captains” and policemen. Pressing his campaign, Mr. Duterte announced bounties of P2 million ($42,000) for information that would help the government identify any police officer protecting drugs syndicates. He repeated his pledge to defend the police and military, but warned law enforcers against conniving with criminals. “In the pursuit of law and order, pursuant to my directions, you do not have to worry about criminal liability,” he said. “I will go to the prison for you. I take full legal responsibility, you just do it according to the books.” “But for those in the government, the police, the corrupt police and the corrupt judges and the corrupt prosecutors, there will be a day of comeuppance, there will always be a day of reckoning,” Duterte said. AP

VAT. . .

Continued from A1

“Our senior citizens need more benefits, not less. For senior citizens living off their pensions, exempting them from VAT is one way the State can support them in the twilight of their lives,” she added. Earlier, Finance Secretary Carlos G. Dominguez III told lawmakers that the government should eliminate certain exemptions from VAT to offset the P173.8 billion in forgone revenues from the planned move to reduce individual and corporate income-tax rates. He said all exemptions from VAT should be repealed, except for goods and services, which relate to food in its original state, medical services and education. GUEST OF HONOR Aquilino "Koko" Pimentel III Senate President Republic of the Philippines

Frequency. . . Continued from A1

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Infor mation Secretar y Ro dolfo A. Salalima said the audit will allow the government to seize unused frequencies and auction them off to budding companies to heighten competition. “We may recover whatever frequency they are not using. The review will take into account the contracts signed between them and the government as to the expiration of frequencies,” Salalima told the BusinessMirror. According to National Telecommunications Commission (NTC) Deputy Commissioner Edgardo V. Cabarios, there are two ways on how a telco can lose its frequency allocation. One is if it is found to have not been using the frequency; and second is when the carrier fails to pay the frequency-usage fee. Repor ted ly, N TC Comm issioner Gamaliel A. Cordoba said his agency plans to auction off frequencies for a third player to come in and challenge the two existing carriers— PLDT Inc. and Globe Telecom Inc. See “Frequency,” A2