Businessmirror october 18, 2017

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Can PHL wean itself off coal? By Rea Cu

@ReaCuBM

Conclusion

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REPORT for educational and informational purposes by the Institute for Energy Economics and Financial Analysis (IEEFA) and the Institute for Climate and Sustainable Cities (ICSC) provides an overview of the country’s coal sector. “The 10,423 megawatts [MW] of coal-fired power plants in the current pipeline is emblematic of the Philippines’s growing dependence on imported coal,” the report titled “Carving out Coal in the Philippines: Stranded Coal Plant Assets and the Energy Transition,” said. The report, penned by IEEFA energy financial analyst Sara Jane Ahmed and ICSC energy policy advisor Jose Logarta Jr., said the Philippines imports 15 million tons of coal per year. This amount represents 80 percent of the country’s coal requirements. The majority of the imports—95

percent—come from Indonesia, “a source that has not always been reliable.” The Philippines’s average coal inventory is 30 to 40 days. “Should a ban on coal exports from any supplier nation be declared, the Philippines would experience coal-supply issues in about a month,” Ahmed and Logarta wrote. The authors named Australia, South Africa and Russia as the other nations the Philippines imports coal from.

Production

ACCORDING to the report, which was released this month, the Philippines imported more than $1 billion (P50 billion) of coal last year at a cost increase of 140.3 percent from 2015. Coal prices doubled between May 2016 and December 2016, from $51.20 to $ 100.69, citing Delft, The Netherlands-based Van der Schaar Investments B.V. Continued on A2

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EU won’t commit if PHL will keep trade privileges $1.8B E A

Context of the Myanmar humanitarian crisis

By Catherine N. Pillas

conomic and diplomatic relations between the Philippines and the European Union (EU) are still headed toward different directions, as diplomacy is going south due to President Duterte’s rants against foreign interference in domestic affairs while bilateral trade continues to soar.

The value of Philippine exports that entered the EU duty-free under the GSP+ scheme in 2016

This was evident during discussions at the EU-Philippines Business Summit on Tuesday. See “EU,” A2

Peso seen hitting 52 to $1 by year-end

See “Peso,” A2

free fire

ction speaks louder than words. Francis Wade, in his book Myanmar’s Enemy Within: Buddhist Violence and the Making of a Muslim ‘Other’, writes “that the roots of ethnic and religious conflict in Myanmar, especially in relation to anti-Muslim hatred… stretches back more than a thousand years before the camps sprang up along the Rakhine State coastline….” He is quoted by Brandon Tensley in his LARB review of the book. Continued on A10

PIÑOL TO OVERHAUL FAILED CATTLE-BREEDING PROGRAM By Jasper Emmanuel Y. Arcalas

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he local currency is expected to end the year’s trade at 52 to a dollar this year, on the back of the current-account balance’s deterioration, according to an international bank. In its recent economic outlook on Asia, the ANZ Bank said the peso exchange rate will continuously weaken toward the end of the year and hit 52 to a dollar by year-end. On Tuesday the local currency traded at 51.33 against the US dollar, slightly strengthening from the 51.39 to a dollar in its last trading day. The expectation of a weaker peso came as the ANZ Bank said that, although current-account balance rose to surplus in the second quarter of the year, the risk of a deficit remains due to continued strong import growth. “Domestic interest rates are not high enough to attract sufficient foreign portfolio flows to fund the deficit,” the bank said. “While the tax reforms should boost sentiment when they are implemented next year, we remain watchful of persistent import growth,” it added. Thus, the weaker current-account balance due to expectations of import-growth acceleration will force the Bangko Sentral ng Pilipinas (BSP) to hike rates to prevent the peso from falling further toward 2018.

Teddy Locsin Jr.

@c_pillas29

BUSINESS MADE SIMPLE Canon Marketing Philippines Inc. President and CEO Kazuhiro Ozawa delivers his opening remarks during the Canon POP (Pros of Productivity) Business Expo, which kicked off at a hotel in Mandaluyong City on Tuesday. The first-ever technology and solutions expo features insights of the pros and leaders of various industries about how they foster productivity in the workplace, and provide a better understanding of its impact and long-term benefits for both the employees and company as a whole. NONOY LACZA

Filipinos favor unrestricted executive power

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ifty-five percent of respondents polled in India say a system in which a strong leader can make decisions without parliamentary or judicial interference is a “somewhat” or “very” good way of governing their country, according to a Pew Research Center survey released on Monday. Indonesia, the Philippines, Russia and South Africa round out the top 5 nations indicating support for unconstrained executive power. Meanwhile, only 6 percent of Germans and 9 percent of Swedes back such a political system. Twenty-two percent of Americans are in favor, about four percentage points below the median for the 38 countries surveyed from February 16 to May 8. People in wealthier nations “tend to be more committed to representative democracy,” according to the report. And in many countries, people with less education and those on the ideological right are “more willing to consider nondemocratic alternatives,” the authors found. Bloomberg News

PESO exchange rates n US 51.3850

@jearcalas

he Department of Agriculture (DA) is overhauling its live cattle-importation program, removing the direct distribution of animals to farmers, as it failed to achieve the goal of the government to improve the local sector’s productivity. Agriculture Secretary Emmanuel F. Piñol has always pointed out that the direct distribution of live animals to individuals did more harm than good, stressing that most of the time, the animals distributed to individuals were eventually sold or slaughtered. “It did not work; and it would not work,” Piñol told the BusinessMirror, referring to the DA’s previous direct animal-distribution system to farmers. “We will not repeat the same mistake all over again.” This time, Piñol said, the agriculture department would venture into a new system that aims to increase the country’s cattle herd to 5 million, from the current 2.5 million, before President Duterte steps down from office. “Unlike the failed cattle-development program in the past where imported animals were t u r ne d o ve r i nd iv idu a l ly to farmers, which eventually were

2.5M

The estimated total cattle herd in the country, which Piñol hopes to double by 2022 either sold or slaughtered, the Livestock and Dair y Program under t he administration of President Duterte will implement the ‘Multiplier Farm Concept,’ where breeding and dairy farms with 100 heads each will be established as a community project and managed by groups of farmers,” Piñol said. Under this new system, the DA would band cattle and dairy farmers into one cooperative to handle one unit of multiplier farm, according to Piñol. Each multiplier farm would have a minimum of 100 heifers and would serve as a breeding farm, a dairy-production area and a learning center. He added that they would also encourage more woman-raisers to participate in the program, as they are more efficient than their male counterparts.

n japan 0.4577 n UK 68.1571 n HK 6.5814 n CHINA 7.7978 n singapore 38.0038 n australia 40.1779 n EU 60.7987 n SAUDI arabia 13.7023

See “Piñol,” A2

Source: BSP (13 October 2017 )

BMReports BusinessMirror

A2 Wednesday, October 18, 2017

‘Papa P’is DOT’s new tourism ambassador Continued from A12

Under the National Tourism Development Program, the Duterte administration is targetting an increase in foreign visitor arrivals to 7.4 million in 2018, from a projected 6.5 million this year. The BHAF program will run from October 15, 2017 to April 15, 2018. BHAF was actually first implemented in 1994 by former Tourism Secretary Mina Gabor, which resulted in a 12-percent increase in visitor arrivals to 1.76 million in 1995, from 1.57 million the previous year. In the same news statement, Gabor said she was excited that the project she initiated 23 years ago, has been relaunched. She expressed high hope for its success, with more prizes now at stake for both the sponsor and the invitee. She added that the promotion will have a higher rate of success with social media now coming into play, a factor not present in 1994. Filipinos who invite friends to visit the Philippines, otherwise known as “sponsors,” have a chance to win a condominium unit from Megaworld Corp., a Toyota Vios, or P200,000 gift certificate from Duty Free Philippines Corp. The foreigners who travel to the Philippines, known as “invitees,” are eligible for prizes, which include international tickets to the Philippines via business or economy class, plus holidays in either Palawan, Cebu or Davao. During the evening’s festivities, the DOT chief and other officials recognized the companies supporting the BHAF program by giving them plaques of appreciation. Representatives of the major sponsors who were present at the event were Kevin Tan, senior vice president of Megaworld; law yer Rommel Gutierrez, first vice president of Toyota Motor Philippines Corp., Bong Velasquez, senior assistant vice president of Philippine Airlines; and Vincent Angala, chief operating officer of Duty Free Philippines. Other partners in the BHAF program are the Tourism Infrastructure and Enterprise Zone Authority, the Tourism Promotions Board, El Nido Hotel and Resort of Palawan, JPark Island Resort and Water Park in Cebu, and Pearl Farm Beach Resort in Davao. Hosts Randy Santiago and Jimmy Bondoc, along with the Sabado Boys, Mitoy Yonting and the Aegis band, entertained guests during the launch. “‘ B r i n g H o m e a F r i e n d ’ i s o u r shoutout to the world to come and see the Philippines: a country of diverse cultures, rich traditions, and unrivaled biodiversity,” Teo stressed. According to the DOT, officers from the different tourism industry associations, f o re i g n d i p l o m a t s, a n d Co n g re s s, other government agencies and media promised to give their “all-out support” to the program.

Piñol. . .

Continued from A1

“We will have to organize the farmers. And I am more inclined in

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Can PHL wean itself off coal? Continued from A1

“Such fluctuations can be worrisome for consumers and businesses alike,” the authors wrote. The report said the Philippines’s coal production is minimal—an average of 8 million tons in the last six years—despite the country being a significant consumer of coal. “Because the country produces only lowquality coal—which must be burned in larger amounts than higher-quality coal for the same energy output— and because most of its coalfired power plants are built for imported coal, the country must continue to import from other countries for its coal needs,” the report said. As of March, the Philippine government indicated 10,423 MW of upcoming coalcapacity expansion, with 4,476 MW of that total under construction, the report said. “The Philippines already has a total of 7,419 MW of coal-fired capacity and indeed has a coal-fired capacity surplus in some areas, including Mindanao, home to roughly one-fifth of the population.”

The IEEFA report noted the viability of solar, wind or other renewable energy was not considered during a public consultation for the review of the environmental compliance certificate (ECC) of the Atimonan coal-fired power plant. The Department of Energy (DoE), the authors wrote, responded to this omission by reasoning that the “renewables are only intermittent sources of energy” and the Philippines “needs a stable source of energy.” Meanwhile, Atimonan’s developers argued that “the cost of solar energy is double the price of coal.” “Neither assertion is correct,” Ahmed and Logarta said.

Taxation

A strategy the government is mulling over is applying more tax on fossil fuels to wean the industry from dependence on coal. A coal tax has yet to be announced but the Department of Finance (DOF) earlier pointed out that it is studying to put taxes on coal as part of its fifth package for the Comprehensive Tax Reform Program. This package aims to tackle taxes on health, environment and luxury items, among others. Prior to the fifth package, there’s Senate Bill 1592, which is pushing for the amendment of Section 151 of the National Internal Revenue Code to increase the excise tax on coal from P10 per metric ton to P20 per metric ton. “We are very aware of the coal situation and we are preparing for it and you know we would not like to make proposals that we are not ready,” Finance Secretary Carlos G. Dominguez III said at a hearing of the Senate finance committee. Senator Loren B. Legarda pointed out that the law exempting the payment of excise taxes from coal products have not been touched since 1974. “[That is a] source

of energy; that is a necessity and indigenous resources,” Legarda said.

Welcome

THE DOF has welcomed the endorsement by the Senate Ways and Means Committee for the plenary approval of SB 1592. Dominguez himself lauded the panel for its prompt action and expressed hopes Congress could soon pass its final version in time for the initial tax-reform package’s planned implementation by January next year. According to the finance chief, the DOF was looking forward to working with the Senate panel in coming up with “a measure that would deliver the most benefits to the Filipino people at the soonest possible time.” The DOF expects the Senate to pass the bill before Congress goes on recess mid-October, thereby enabling the bicameral conference committee to likely hammer out by November a final congressional version of the Tax Reform for Acceleration and Inclusion Act (Train), which President Duterte could then sign into law by mid-December.

this increase coming from coal-fired plants. Electricity consumption grew from 74.8 TWh in 2015 to 81.8 TWh in 2016. Ahmed and Logarta attributed this trend to a 12.7-percent growth in residential consumption due to unusually hot weather that drove up use of cooling systems, to activity related local and national elections and to increased production capacity due to strong economic growth. “While advocates of more coal-fired generation argue that it is needed to secure baseload power, the Philippines, if it builds out its coal-generation capacity as proposed, will have a significant surplus of coal-fired generation,” the authors wrote. “Such a scenario would lead to the underutilization of coal-fired assets.”

Peso. . .

Continued from A1

FOR the IEEFA and ICSC, the Philippines has to do more than tax fossil fuel. “The long-term resilience of the Philippine economy depends on finding a more practical energy model—one that will shield consumers and businesses from price, as well as exchangerisk shocks,” the groups said in its report. The report noted that coal prices soared last year by 60 percent, offering a stark example of how coal-import electricity economies are at the mercy of price volatility and uncertainty. Philippine power generation surged 9 percent in 2016, from 82.6 terawatt hours (TWh) in 2015 to 89.9 TWh, with most of

“If the BSP does not hike rates as we expected, then the Philippine peso may weaken more than our forecast next year,” the bank said. The bank added that considering current fundamentals, monetary tightening is now viewed as “necessary” for the economy with the weaker peso and the upward inflation trend. ANZ Bank forecasts a total rate hike of 50 basis points in the first quarter of next year. ING Bank Manila economist Joey Cuyegkeng also believes that the BSP should hike its rates soon not only because of high inflation and the weakening of the peso, but also to respond to monetary indicators, such as strong liquidity and loan growth. In the near-term, meanwhile, the peso is expected to behave within range with the view that the BSP will eventually do a preemptive move to stabilize inflation expectations, Cuyegkeng said. Bianca Cuaresma

“In economic terms, they [EU] are now our no. 2 export market, coming from the third spot last year. Economic relations are good. Even the EU-GSP+ [Generalized System of Preference-Plus] utilization has been increasing; and we’re expecting greater utilization,” Trade Secretary Ramon M. Lopez said. But the EU delegation in Manila wouldn’t commit if the Philippines will continue to enjoy the preferential trade scheme. EU Ambassador to the Philippines Franz Jessen, sought for comment on the prospects of the country’s continued enjoyment of the EU-GSP+, commented: “Let’s just wait for the report [of the commission] in January.” According to data from the Philippine Statistics Authority, total merchandise exports to the EU increased by 36 percent in the first half of 2017, amounting to $4.6 billion. This is quicker than the average growth rate of Philippine exports to the EU in recent years of about 15 percent. But the trade chief sustained the stance of the President in the event, stressing before

the European business community: “Any interference is viewed as preventing us from doing our job. Any interference in the pursuit of this [anti-illegal drugs] program will never sit well with any of us in the government, especially with our passionate President. We can all expect a strong reaction against any form of interference.” European Chamber of Commerce in the Philippines President Guenter Taus assured that the new round of castigation from the Chief Executive is not affecting EU-Philippines economies ties, saying: “While it’s difficult to maneuver in this situation, it hasn’t stopped investments from coming in.” Taus added that negotiations for the broader EU-Philippines free-trade agreement are “ongoing.” “This isn’t new for us; we’ve heard it before and there’s been no effect on business on the ground,” Taus added. These sentiments notwithstanding, the EU institutions—including the European Commission, the Parliament and the Council—will still be deciding whether the Philippines will continue to enjoy preferential treatment under EU-GSP+, which is credited for the huge hike in Philippine exports to EU. The EU-GSP+ review is ongoing.

The Philippines is the only country in Asean that is enjoying duty-free treatment for two-thirds of the tariff lines of its exports to the EU. Continued enjoyment of this scheme is dependent on the observance of 27 international treaties and conventions, including those covering human rights. Just a few weeks ago, the trade chief met with the European Commission in Brussels to showcase the benefits of the EU-GSP+ to Philippine exports, crediting the scheme as responsible for pushing exports from €5.7 billion in 2014 to €6.9 billion in 2015. To recall, President Duterte once again launched a tirade against the “EU ambassadors” last week, challenging them to vacate their posts in 24 hours in reaction to previous comments from two political Europe-based groups. The two groups—the Progressive Alliance and the Party of European Socialists—made a visit to the Philippines recently and warned the government against the continued extrajudicial killings in the conduct of the war against drugs. Board of Investments Managing Head Ceferino S. Rodolfo said given the strong performance of local exports to the EU market

in the first half, there may be momentum to sustain the over 30-percent growth throughout the year. “Based on the strong first-half performance of 36-percent growth, we expect exports to the EU to remain robust because of the stable economic environment in the EU. There is robust demand for Philippine exports, especially those benefiting from the EU-GSP+,” Rodolfo underscored. Jessen is optimistic exports may even reach $10 billion by end of the year. From January to August, Philippine merchandise exports to the EU amounted to $6.1 billion, taking a share of 15 percent in the country’s total exports. This is an improvement over the same period in 2016, when exports were valued at $4.6 billion and a share of just 12.4 percent. In full year 2016, exports to the EU reached $6.9 billion, and around $1.8 billion were covered by the EU-GSP+ scheme. In 2015 EUGSP+ exports totaled $1.7 billion. Top exports include electrical machinery and equipment, appliances, animal fats and oils and preparation of meat. Among the Philippines’s top exporters to the EU are Cargill Philippines, Moog Controls, Del Monte Philippines and Sun Power.

women participation, for women empowerment,” he said. “Because women actually are more conscientious, more industrious and patient.” Of its P60.6-billion proposed bud-

get for next year, the DA is allocating P1 billion for the importation of 10,000 Girolando cattle from Brazil in 2018. This importation program is part of the DA’s five-year dairy road map that

seeks to ramp up local milk production to meet at least 10 percent of annual domestic requirement by 2022 and reduce the country’s reliance on imports. Piñol added that another P1 billion would come from the Philippine Rural Development Project’s iREAP component, which will be utilized for the construction of shelters and multiplier farms. Furthermore, the DA would be engaging the local government units (LGU) for the land where the multiplier farms will be built. “The LGUs will be our counterpart for the building and structure,” Piñol said. For the first year of the program, the DA eyes to establish 100 multiplier farms across the country, with 50 to be constructed in Luzon and 25 each in the Visayas and Mindanao. Piñol pointed out that the income from the multiplier farms would be shared by the farmer-members of the cooperatives, while the offsprings of the parent herd will be distributed to a new multiplier farm. “The good thing here is that we will be using embryo transfer so we can control what offspring do we want to have, may it be male or female,” he said. “The materials will be sourced from Argentina and Brazil.” Piñol disclosed that local dairy farmers in Batangas are now asking for the construction of at least 10 multiplier farms in their area.

The DA chief said he will visit Brazil in December right after the World Trade Organization’s 11th Ministerial Conference in Argentina to personally check the Girulando heifers to be imported by the Philippines. “So, hopefully, we could hit the target of additional 2.5 million heads at the end of the term of the President,” Piñol said. Earlier, Brazil’s Minister of Agriculture, Livestock and Supply Blairo Maggi said his government remains keen on selling Girolando cattle to the Philippines. “Brazil is still interested in selling cattle to the Philippines. In fact, we recently sent back questionnaires to the Philippines and we are expecting that the Philippines will send a mission here to fine-tune remaining issues,” Maggi told foreign journalists in a news briefing in São Paulo, Brazil, on August 28. Maggi said Brazil is also open to exporting other genetic materials, as well as other breeds of cattle, such as those for meat production. “Brazil has a number of markets which are open for slaughter cattle and open for breeding, not just for [live] cows, but also genetic materials,” Maggi said. “Brazil has this interest, and each mission we carried out we present our portfolio to show our interests to send our livestock overseas.”

Challenge

ACCORDING to the IEEFA-ICSC report, electricitygeneration trends show institutions “are moving away from coal and toward cheaper fuel sources.” Solar-powered electricity costs have fallen by 99 percent since 1976 and by 90 percent since 2009, while the cost of wind-powered generation has fallen 50 percent since 2009, the report revealed. The Philippines has almost 1 gigawatt (GW) of installed solar PV (photovoltaics) with over 2 GW of pending solar applications. It leads Southeast Asia in installed wind energy capacity with 400 MW in operation and 1,600 MW of capacity to be added over the next two to three years, the report added.

EU. . .

Continued from A1

Surplus

Pasig bishop to keynote 39th CMMA

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ishop Mylo Hubert Vergara, D.D., of the Diocese of Pasig will be the keynote speaker during the Catholic Mass Media Awards (CMMA) to be held on October 25 at the Star Theater, Star City, Cultural Center of the Philippines Complex in Pasay City. Bishop Vergara is chairman of the Catholic Bishops Conference Episcopal Commission on Social Communications and Mass Media (CBCP-ECSCMM). The CBCP-ECSCMM is the church organization that links the Catholic Church to mass media in the fields of print, radio, television, advertising, music, cinema and the Internet. He w ill speak on the CMMA theme this year, “Fear not, for I am with you (Isaiah 43:55)”; communicating hope and trust in our time. This marks the 39th year of the awards-giving organization established by the late Jaime L. Cardinal Sin to pay tribute to valuesoriented mass media works and workers. The date of the CMMA presentation was set by the CMMA Foundation board of trustees headed by D. Edgard A. Cabangon, chairman and president, during a meeting at Dominga Building 3 on Chino Roces corner De La Rosa Streets, where the CMMA Secretariat offices are located. The CMMA was established in 1978 by Cardinal Sin, then-A rchbishop of Manila, as the means by which the Archdiocese of Manila recognizes “those who are serving God through the mass media.” Through the years, it has become a tradition and a prestigious event joined by some of the country’s most respected personalities in the fields of television, radio, print media, music, cinema, the Internet, as well as by students from various academic institutions. The CMMA had a twoyear interruption in its operation and was revived in 2000 by the Cardinal, who asked the late Ambassador Antonio L. Cabangon Chua to be its chairman and president. He held the post until March last year. Last year’s presentation of the 38th Catholic Mass Media Awards Night, held on October 12, 2016, at the Star Theater in Pasay City, was a great success, based on the overwhelming attendance of individuals and organizations in the field of mass communications. Similarly, the number of entries received by the CMMA continues to increase significantly, affirming that the organization consistently gains support from mass media practitioners and advocates from around the country.

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Editor: Vittorio V. Vitug • Wednesday, October 18, 2017 A3

No bounty reward for soldiers­—Lorenzana

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By Rene Acosta

@reneacostaBM

efense Secretary Delfin N. Lorenzana on Tuesday said the $5-million, or roughly P250 million, bounty for slain Islamic State (IS)-Maute Group leader Isnilon Hapilon would likely be handed to an unnamed woman who helped military forces locate the terrorist leader for the final kill. The defense chief said the reward money should go to the hostages if only for the government to commiserate with their ordeals during their prolonged period captivity. Lorenzana’s statement was in reaction to the question on who should get the separate P10-million and P5-million bounties from the Department of the Interior and Local Government for Hapilon and Omar Maute. Hapilon, the leader of the Islamic State in Southeast Asia, also carried a reward of $5 million from the US government for his neutralization. Lorenzana said the reward money should go to the rescued hostages if only to minimize the sufferings they have endured during their captivity by Hapilon and his group. He noted that a woman, who was among the rescued hostages, was the one who provided the information by disclosing the building where Hapilon and Maute were holed out. Lorenzana said the military and the police are “prevented from taking rewards because, as state forces, it is their duty to go after enemies of the state.”

New targets

The military, meanwhile, has set its focus on Malaysian jihadist Dr. Mahmoud Ahmad, who is expected to take on the mantle of leadership of IS in Southeast Asia, following the slaying of Hapilon. The military, however, believe that Ahmad’s leadership would only be brief should he take on the role with the relentless and sustained military operation against him. The death of Hapilon and Omar Maute have prompted President Duterte to declare on Tuesday that Marawi has been “liberated” from the clutches of the IS-Maute Group. Lorenzana said Ahmad, being the recruiter and conduit of money for the IS in Southeast Asia, could possibly succeed Hapilon, but his role could be brief amid a military manhunt. Both Lorenzana and Armed Forces Chief of Staff Gen. Eduardo Año

DFA lists lone Filipino casualty in California wine country wildfires CAYETANO: “I have instructed our Consulate General in San Francisco to offer all possible assistance to the family and to continue to closely monitor the welfare of other Filipinos in the affected areas”

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he Department of Foreign Affairs (DFA) on Tuesday said California authorities have found the remains of a Filipino resident who may have perished in the still raging North California wine country blaze. Quoting the Philippine Consulate General in San Francisco, the DFA said the victim, whose remains were recovered last Saturday, is yet to be positively identified. “We offer our sincere sympathies and prayers to the family of our kababayan [countryman] who perished in this horrific fire,” Foreign Affairs Secretary Alan Peter S. Cayetano said. “I have instructed our Consulate General in San Francisco to offer all possible assistance to the family and to continue to closely monitor the welfare of other Filipinos in the affected areas,” he added. According to Deputy Consul General Jaime Ramon Ascalon, the Consulate General in San Francisco has been in touch with the victim’s family and has offered assistance, especially in coordinating arrangements for the repatriation of the victim’s remains.

“We also continue to communicate with the Filipino community through our social-media advisories, and have offered consular assistance to Filipinos affected by the wildfires.” Approximately 100,000 people have been evacuated from the fires. More than 10,000 firefighters are currently battling 16 large wildfires that, in total, have burned over 214,000 acres, or more 86,600 hectares. The fires have destroyed 5,700 structures and have claimed at least 40 lives. An estimated 13,500 Filipinos live in the Napa, Sonoma and Yuba counties, which are the areas most affected by the wildfires. An estimated 4,200 Filipinos live in the other affected counties of Lake, Marin and Mendocino. As of October 14, red-flag warnings remained in effect across Northern California due to strong north winds, which have increased fire activity. Dry, windy and hot conditions from late spring through autumn cause periodic wildfires in California. The most recent wildfire, in 2014, affected more than 134,000 acres, or more than 54,000 hectares, of land. The largest wildfire in recent history was recorded in 2012, which affected 315,500 acres, or 128,000 hectares of land in California and Nevada.

Recto Mercene

believed that the Malaysian is still holed out in the area that is being cleared by the soldiers in the city. At the start of the Marawi City rebellion in May and up to the death of Hapilon, Ahmad was reported to have been the most eligible successor of the slain IS leader, whom he joined in the foray in Marawi. On Monday military Spokesman Major Gen. Restituto Padilla Jr. said the operation against the terrorists is not over yet even with the killings of Hapilon

and Maute, as they still have to account at least two “high-value targets,” including Ahmad. He said the operation will continue until the Malaysian and the other leader have been accounted for or neutralized. Año said Ahmad is joined by eight other Malaysians and Indonesians in the battle zone. Meanwhile, Lorenzana said the IS threat in the country remains despite the end of the Marawi City

siege, owing to the existence of the group’s cells in other parts of Mindanao. He said these cells are in existence in Basilan, Sulu and Zamboanga provinces. Earlier, Año said that the military will fully shift its focus to the Abu Sayyaf Group and the Bangsamoro Islamic Freedom Fighters in Basilan, Sulu and Central Mindanao, respectively, after the end of the military operations in Marawi.

Economy

A4 Wednesday, October 18, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

BOI eyeing ‘substantial’ subsidy for PUV modernization program

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By Catherine N. Pillas

@c_pillas29

he Board of Investments (BOI) may invest on so-called fixed assets, such as manufacturing or painting facilities, to buttress government support for local bodybuilders supplying the new jeepneys for the Department of Transportation’s (DOTr) public-utility vehicle (PUV) modernization program. This may signal a different, and possibly a better incentive scheme, from the BOI’s manufacturing stimulus program for passenger cars, the Comprehensive Automotive Resurgence Strategy (CARS) Program. Government support for the local manufacturing of the eco-PUVs, or the modern Filipino-made

jeeps, needs to be significantly higher as local assembler grapples with much cheaper imports of completely built-up (CBU) units from other countries. The CBU imports, if sourced from Asean countries, enjoy zero duty upon entry into the Philippines. BOI Head and Trade Undersec-

retary Ceferino S. Rodolfo said subsidy for locally manufactured eco-PUV units can come in the form of a fixed-asset incentive, which essentially means the government will invest in a key manufacturing facility to offset a particularly costly part or component of PUV body assemblers’ production. “We said before we’re looking at a substantial subsidy in terms of making a critical component in the production [of eco-PUV jeepneys]. We’re looking at that critical component, like will it be on electrodipping or the body stamping facility? We haven’t decided yet,” Rodolfo said. In turn, the participant assemblers to the eco-PUV manufacturing initiative must have a high autoparts localization commitment. In contrast, the CARS Program allotted P18-billion government support for the production of two models enrolled by Toyota Motors Philippines and Mitsubishi Motors Corp. Philippines. The incentives are divided be-

tween the production volume incentive (PVI), which takes a 60 percent of the P9-billion-per-model support, and the fiscal incentive support (FIS), which has the remaining 40 percent. The FIS, in the part of the CARS, was given through a investmentsharing with the participant assembler, particularly in setting up the stamping facility. Rodolfo clarified the BOI hasn’t decided if they will retain the 60-40 ratio, and raised the possibility of “pouring more” in terms of fixed assets. The DTI or the BOI has yet to say if they will augment the P9-billion budget, originally for the third slot for CARS, that is now given to the eco-PUV initiative. “Probably, it might be a better program than the CARS Program, pesowise, it might be a bigger program,” Trade Secretary and BOI Chairman Ramon M. Lopez said. The DOTr earlier said there are 200,000 jeepney units that are slated for replacement, and this will be the unit production target for local assemblers in six years’ time.

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Lawmaker seeks ERC clarification on power market-share limitation By Lenie Lectura

@llectura

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Lawmaker will discuss with the Energy Regulatory Commission (ERC) ways on how to reconcile discrepancy between installed and dependable power-generating capacity. In his keynote speech, Sen. Sherwin T. Gatchalian on Tuesday said the metric used to determine the marketshare limitation should be reviewed. The law specifies installed generating capacity as the measure in computing market shares. However, Gatchalian said, this is not reflective of the true market power of a company since the installed capacity is different from the power generated and the actual power injected to the grid. “We have to [undertake a review]. It has to be an ERC recommendation. We will have a dialogue with ERC to look at it. We will talk to them on how to remedy this,” Gatchalian said. The share of coal in the country’s total installed capacity is approximately 35 percent, but its share in actual generation is 48 percent. For natural gas, its installed capacity is only 16 percent, but its actual generation is 22 percent.

As a consequence, Gatchalian said, the use of installed generating capacity underestimates the true market share of a company, especially if its plants have comparatively higher capacity factors. According to the senator, almost 60 percent of the installed energy capacity is controlled by only three firms. These are First Gen of the Lopez Group at 19.63 percent, San Miguel Corp. at 18.73 percent and AboitizPower at 17.48 percent. “There exists no formal monitoring of associated party contracting between generation companies and distribution utilities,” Gatchalian said. Market-share limitations prohibit generation companies from owning more than 30 percent of the installed capacity of a grid and more than 25 percent of the installed capacity of the national grid. A cross-ownership provision prevents generation companies and distribution utilities from extracting control or influence over the transmission concessionaire and vice versa. Also, distribution utilities are precluded from contracting more than 50 percent of their demand related parties.

Final SC ruling: Napocor employees not entitled to receive ₧8.5-billion backpay

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HE Supreme Court (SC) has unanimously affirmed with finality its decision denying the bid of some 16,500 employees

of the National Power Corp. (Napocor) to collect around P8.5-billion back payment of additional cost of living allowance (Cola) and ame-

lioration allowance (AA) for the period covering July 1, 1989, to March 16, 1999. In a 13-page resolution penned

by Associate Justice Marvic Leonen, the SC en banc denied the motion for reconsideration (MR) filed by Napocor Employees Consolidated Union (Necu)
and the president of the Napocor Employees and
Workers Union (Newu) seeking the reversal of the Court’s February 7 decision. The SC, in the said ruling, set aside the Regional Trial Court in Quezon City’s decision, which granted the petition for mandamus filed by Necu and Newu seeking to direct the Napocor, its president and its board of
directors to release and pay the employees Cola and AA. The magistrates, however, said the employees failed to raise new issues that would sway the Court into abandoning its February 7 ruling. “Wherefore, the 16,500 workers’ solicitous motion for reconsideration is denied with finality as the basic issues have already been passed upon in this Court’s February 7, 2017, decision. No further pleadings or motions shall be entertained in this case. Let entry of final judgment be issued immediately,” the SC ordered. In their MR, Napocor employees insisted that law, jurisprudence and evidence support their contention that their Cola and AA were deducted

Faces of Halloween

from their salaries from July 1, 1989, to March 19, 1999. In particular, the Necu and Newu distinguished Napocor workers into three categories. The first categor y includes workers already employed when Republic Act (RA) 6758, or the Compensation and Position Classification Act of 1989, took effect and whose Cola and AA were integrated into their basic salaries only up to 1993. The second category covers those hired after R A 6758 took effect and whose Cola and A A were allegedly deducted from 1989 to 1999. The third category consists of employees hired after the effectivity of RA 6758 and whose Cola and AA were allegedly deducted from 1994 to 1999. The employees noted that this only shows that their basic pay for the disputed period did not include salaries from July 1, 1989, to March 19, 1999. The Court noted that Necu and Newu were in a position to submit to the Court any pay slip or notice of position allocation and salary adjustment showing an actual deduction of the Cola and AA from July 1, 1989, to March 19, 1999,

but they failed to do so. “As it stands, respondents Necu and Newu have failed to prove that their Cola and AA were factually deducted from their basic pay,” the SC said. “Respondents Necu and Newu’s attempt to sway this Court by insisting that those hired after RA 6758, took effect have never received their Cola and AA, and that these allowances were deducted from their basic pay. This issue, however, has already been discussed and passed upon in this Court’s February 7, 2017, decision,” the SC decision added. In it’s February 2017 ruling, the SC held that the trial court should have been cautious in coming out with such a ruling since it would entail release of billions in public funds. The SC said the trial court “should have been more prudent in granting the immediate execution, considering that the execution of the judgment award involves the payment of almost P8.5 billion in public funds.” The SC also ruled that Cola and AA of the employees were integrated with the salaries of the employees, after the promulgation of RA 6758. Joel R. San Juan

A sidewalk stall keeper presents a frightful array of Halloween face masks at the Port Area in Manila with the approach of the traditional celebration of Halloween on October 31. ROY DOMINGO

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Wednesday, October 18, 2017

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DA bares criteria for choosing PRDP projects By Jasper Emmanuel Y. Arcalas

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@jearcalas

he Department of Agriculture (DA) will use a “prioritization scheme” for pipelined infrastructure projects under the Philippine Rural Development Project (PRDP), which will get $170 million (P7.9 billion) in additional financing from the World Bank. The $170 -million loan, targeted to be used in 2018, would be first tranche of the $450-million additional financing that is being sought by the DA for the PRDP’s expansion. With this supplementary assistance from the World Bank, the DA aims to cover part of the pipelined subprojects that cost around P15.56 billion. “The pipelined subprojects—our ‘healthy’ pipeline as we call it—have already complied with the requirements of the PRDP, such as feasibility study, detailed engineering design and social and environmental safeguards,” Agriculture Undersecretary Ariel Cayanan said in a statement. “But as we are currently challenged by limited budget, the best way to approach this is to fund the best proposals based on a set of criteria,” Cayanan added. He said the DA would stick to the technical and socioeconomic viability of subprojects and avoid “political intervention.” Cayanan added that the “prioritization scheme” aims to incentivize good-performing local government units (LGUs) and diversify infrastructure subprojects as majority of the PRDP’s current infrastructure development portfolio are farm-to-market roads (FMRs). Cirilo Namoc, the PRDP’s national deputy project director, said LGUs with no approved subprojects but have signified interest and commitment in the project by submitting proposals will be accommodated and given top consideration under the prioritization system. While the PRDP has received a sizable number of subproject proposals, especially infrastructure, there are still prov-

inces that have yet to access assistance from the project. To date, there are still 9 of 81 targeted provinces that have yet to receive financial assistance from the PRDP. Namoc added that proposals must be linked to the approved Provincial Commodity Investment Plan (PCIP), otherwise these will be deferred until the required document has been produced. “Proposals satisfying the two conditions will automatically be placed on top of the priority list and will be exempt from all succeeding assessments,” he said. He clarified, however, that only one subproject per LGU will be given automatic priority for review. In case of multiple proposals, the rest will be subjected to prioritization. Potable water system (PWS) proposals will be exempted from the PCIP-link criterion as PWSs are not identified as intervention to directly boost agricultural productivity but to improve access of farming or fishing communities to safe drinking water. Proposals that are not automatically prioritized must satisfy additional criteria to pass the initial screening and will again be subjected to the succeeding prioritization steps. Additionally, proposals of LGUs with unresolved grievances relating to nonconformance to PRDP procurement and finance guidelines will be put on hold until the grievances have been settled. Proposals from LGUs with previously approved applications will be subjected to further prioritization, which will consider the LGU’s performance

NMIS to roll out electronic payment system in January

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he National Meat Inspection Service (NMIS) will do away with the manual collection of fees for its services next year and replace it with an online payment system to cut red tape and avoid corruption. NMIS Executive Director Ernesto S. Gonzales announced on Tuesday that the agency would implement an electronic payment system (EPS), which would allow the NMIS to shift to online banking. “The NMIS is implementing an e-payment system where the client does not need to personally come to its offices anymore, both in the central and in regional offices, to pay any fee for its services,” Gonzales said. “This means that not only there will be less time spent in paying whatever fees for NMIS services but also to minimize graft and corruption by limiting the face-toface transaction between the NMIS personnel and its client,” he added. Gonzales said the EPS will be rolled out in January 2018. With the EPS, meat establishments will just have to deposit their payment or fees to the LandBank account of the NMIS. At present, NMIS collection

officers visit each meat establishment to receive the payment for the services rendered by the attached agency of the Department of Agriculture. “We are removing the power to collect to our inspection officers because they are prone to temptations. In the past there has been history wherein there were inspectors who were involved in bribery,” Gonzales said. “So, in order to clean those ranks, we have to implement this new payment system.” The EPS will cover the following NMIS services: ante and post-mortem fee, licensing fee, laboratory fees, GMP/HACCP (Good Manufacturing Practices/Hazard Analysis and Critical Control Points) certification fee and imported meat inspection fee, among others. “The development of electronic payment system was in compliance with the e-commerce law, which mandates the government to have the capability to do e-commerce, one of which is the shift of payment to electronic system,” Gonzales said. The NMIS is the country’s sole national controlling authority on all matters pertaining to meat inspection and hygiene. Jasper Emmanuel Y. Arcalas

in its past engagement with the PRDP and the type of the subproject being proposed. More points will be given to LGUs proven to have conformed with the PRDP standards on procurement, disbursement, transparency, and social and environmental safeguards, among others. Similarly, non-FMR subprojects, such as communal ir-

rigation and potable water systems, will be given more priority. FMRs that are projected to provide significant socioeconomic benefits will be prioritized and will be given points based on benefit-cost ratio, road influence area density and number of farming/fishing households, among others. In support of the Risk Resiliency and

Sustainability Program of the Climate Change Cabinet Cluster, Cayanan said the PRDP has incorporated climateresiliency criteria into the prioritization scheme. Ten bonus points will be provided to the proposals of the provinces located within identified high-risk and vulnerable water basins in the country, including Apayao, Zambales, Ne-

gros Oriental, Eastern Samar, Samar, Compostela Valley, North Cotabato, Sarangani, Sultan Kudarat, Surigao del Norte, Surigao del Sur, Dinagat Islands, Maguindanao and Lanao del Sur. All proposals falling under the automatic priority category and those ranked based on the prioritization criteria will still be subject to further technical review.

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Banking&Finance

Wednesday, October 18, 2017 • Editor: Jun B. Vallecera

BusinessMirror

www.businessmirror.com.ph

‘Few PHL firms have cybersecurity risk cover’ By Rea Cu

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@ReaCuBM

IG Philippines, an American nonlifeinsurance company, said more businesses, especially the data-driven ones, should consider cyber-insurance cover to strengthen the protection of sensitive customer data. The insurer said just a handful of businesses across the various industry sectors took the trouble of obtaining risk cover against cybersecurity breakdowns and breaches that could harm not just individuals and enterprises but entire industries or even the broad economy, as well. According to AIG Philippines President

and CEO Mark Lwin, data-driven industries, such as the business-process outsourcing (BPO) sector, as well as financial institutions, should consider cyber-insurance cover to limit the disruptive impact of hacking, among other ills. “Industries and companies that are highly reliant on server network connec-

tions and handle sensitive customer data on a daily basis should consider taking out a cyber-insurance policy, “Lwin said. Insurance Commissioner Dennis B. Funa recently appealed for nonlife-insurance companies to develop products helping mitigate financial losses should a cyber breach occur. Under the Philippine Data Privacy law, companies are held accountable in handling sensitive customer data that further underscores the relevance of cyber-insurance cover for Filipino businesses. “Cyber insurance is a risk transfer option which needs to be part of the overall risk-management strategy for any company using digital platforms or handling large amounts of personal data,” he added. Some 50 BPOs took the trouble to obtain risk cover against cyber attacks and that more or less a dozen financial-services companies have done the same. A 2015 study by global professional

Insurers discuss important issues in claims settlement

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he leaders of the nonlife-insurance industry in the Philippines resolved to take significant steps to improve claims-settlement service in the Philippines during the 2017 Pira Non-Life Industry Forum, on October 11 at the Blue Leaf Filipinas in Parañaque City. Deputy Insurance Commissioner Ferdinand George A. Florendo told a crowd of over 200 officials from the industry that claims is “the essence, if not the heart, of the insurance value chain.” “It is only when the claim is paid that the policyholder gets to test or experience the reliability of the indemnity protection that they paid for,” Florendo said. However, automotive journalist and CNN Philippines host James Deakin, speaking on behalf of the insuring public, said that insurers seem to distrust the public when making claims. “There’s a feeling out there that, when it’s time for us to claim, we’re not really given the same courtesy back. It’s almost as if we’re presumed cheating,” Deakin said. Deakin shared to the industry concrete suggestions that may improve claims servicing in the country, particularly those involving motor-car insurance. “At the heart of the matter is somebody is a subject of an unfortunate event and that somebody is waiting to get paid,” Philippine Insurers and Reinsurers Association (Pira) Chairman Augusto Hidalgo said in his opening remarks. Those somebodies also hold the power to strengthen the business, or if they are unsatisfied with claims processing, they also have the power to weaken business

by leaving, or worse, choosing to not get an insurance at all, Hidalgo added. It’s a paradox, Florendo said, that claims is necessary to prove the reliability of insurance products, and yet it is something which insurance companies want to minimize. He cited a 2014 study by Accenture, where 83 percent of respondents who were dissatisfied with claims processing said that they plan to switch or have already switched to another insurer. But what is surprising is that 41 percent who were satisfied with claims processing still said that they were likely or even very likely to switch to another insurer in the next 12 months. “Delivering average claims satisfaction levels is not enough. The bar has been raised. Insurers need to provide a differentiated claims experience that not only delivers good service but maintains an appropriate financial discipline as well,” Florendo said.

‘Sachet insurance’

Microinsurance may be one of the answers. “Sachet insurance. Insurance in bitesize, affordable chunks. If everybody can buy coffee, creamer, sugar, shampoo in sachets, why not insurance?” said Lorenzo Chan, executive vice president of Pioneer Insurance and Surety Corp. and the president and CEO of Pioneer Life. He said that a big turn off for the insuring public is the overly complicated process of filing a claim. Chan recalled his experience in filing a travel-insurance claim after losing two

shirts on a flight to Rwanda. “There were forms to fill up, a declaration to sign, I had to call the airline company. It was a long and tedious process—and I’m an insurer!” “Insurance for the mass market cannot work like that. These people cannot afford to wait,” he said. “If you’re rich, you can wait for a month, you can even wait for six months. But if you’re poor, your only option is to go to a loan shark to bury your dead. Or a kid may have to stop going to school. These people may not be even able to recover,” CARD Pioneer Microinsurance President and CEO Geric Laude said He added there are over 80 million individuals in classes C, D, E who need to be insured. Even if one would argue that not all of them would be able to afford insurance, a generous halving of that number for the sake of estimation still shows that there are at least 40 million individuals who need insurance. “Those are the people who need insurance, probably more than the AB market,” Chan said. If these people get covered with microinsurance, they would not need to wait in long lines for dole outs and donations when calamities like Supertyphoon Yolanda strike. Having fast and efficient claims processing is key for the continued growth of insurance companies. Laude shared how word-of-mouth influenced people to get insured with CARD Pioneer. This is why they do not have advertisements on TV, or on print, or on social media. “Our clients do the advertising for us,” he said.

The 2018 national budget Part One

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t is at this time of the calendar year when the national budget for the next fiscal year (2018, in this case) approaches the last stages of finalization in Congress, in time for final enactment before the start of the budget year. We can now say with some certainty that the National Expenditure Program proposed by the Executive department to Congress will be, in magnitude and substance, what will come out as the General Appropriations Act for 2018. In this series of “Budget Articles”, we propose to call attention to some major elements and components of the 2018 budget. The intention is to get the reader to be curious, inquisitive and be better informed of how the government is spending money. It is not too well recognized that the national budget broadly influences our collective welfare, and directs how each Filipino will share in the national patrimony, for now and for later. So we shall proceed to make a series of short stories on the budget, drawing from the Department of Budget and Management (DBM) “2018 Peoples Proposed Budget” print publication. The DBM, after all, “highly encourages the reproduction, copying, printing and/or dissemination of this publication or parts thereof ” to promote its wide accessibility. To put the examination or evaluation of the budget in context, it is apropos to start with “The 2018 Budget: Priorities

and Policy Directions,” which DBM’s publication puts at center stage, and we quote: “The FY 2018 National Budget aims to enhance the capability of the government and its people to effect the reforms that are crucial to achieve its goals of inclusive growth, high-trust resilient society and globally competitive knowledge economy. Anchored on the Philippine Development Plan [PDP] 2017-2022, the country’s blue print in the medium term, the budget targets to achieve the transformation that will ensure real and lasting change, guided by the following policy directions and priorities: Credible and disciplined fiscal policy. Maintain the budget deficit to a manageable 3 percent of GDP, while pursuing positive reforms to generate the needed revenues. These will include improvements in tax laws and nontax bases, as well as governance reforms. Fiscal space focused on equitable progress and social order. Increase outlays in infrastructure development and social services, ensuring improvements in quality and quantity, and targeting emerging growth centers and lagging communities, particularly in disasterand conflict-affected areas. Accelerated infrastructure development. The “Build, Build, Build” program aims to increase government spending from 5 percent to 7 percent of GDP. Commitment to transparency, participation and accountability. Agencies will be held responsible and

FINEX free enterprise Santiago F. Dumlao Jr. accountable for the proper implementation of their budgets and encouraged to involve the people in the selection and monitoring of the use of government funds. Support for and enhancement of partnerships with local governments, especially in the more isolated and depressed areas, to ensure sustainable and inclusive development. Restructuring of the FY 2018 agency budget using the Program E x pend it u re C l a ssif ic at ion ap proach, which shifts the classification and focus of government programs/ projects/activities from output-based to results-based programs, thereby clearly reflecting the agencies’ policies and priorities. Strengthening the implementation of the Two-Tier Budgeting Approach, which separates the review of the ongoing programs and projects from the new and expanded programs. Under Tier 2, propos-

services firm Marsh & McLennan Companies-Asia Pacific Risk Center (MMC-APRC) showed that Asian firms are in great danger of facing cyber attacks, with foregone revenues in the Asia-Pacific region reaching as much as $81 billion in 2015. Hackers, according to MMC-APRC, are 80 percent more likely to target Asian organizations, with lost revenues due to cyber attacks accounting for 25 percent of the global total of $315 billion. Marsh Risk Consulting Managing director Douglas Ure said the severity of

cyber attacks in Asia is great but companies in the region still lag far behind their Western counterparts in terms of cybersecurity. Of 60 nonlife insurers in the country, AIG Philippines claims the distinction of being the first to have an approved cyberinsurance product in the market. According to Leilani Isidro, AIG Philippines head of liability and financial lines, data leaks and losses can lead to regulatory fines and cyber attacks could result in the disruption or even complete shutdown of business operations.

Case clippings

By Justice S J Ranada Jr.

RAPE–best physical evidence Despite absence of the medico-legal officer as a witness, the presence of healed lacerations corroborates testimony of the rape victim, as it “is the best physical evidence of forcible defloration.” Physical evidence is evidence of the highest order. It speaks more eloquently than a hundred witnesses. The physical evidence of the healed lacerations in the victim’s vagina strongly corroborates her testimony that she was sexually abused by the accused. People v. Francia 06 Sep 2017

GR 208625 Leonen, J

FWD Life Philippines launches dollar equity index fund

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WD Life Philippines, one of the country’s fastest-growing life-insurance companies, has launched a dollardenominated single-payment insurance protection and investment plan, giving customers the opportunity to take advantage of the long-term growth potential of international economies while giving them lifetime insurance protection. “The ‘US Dollar All Set Higher’ plan is the newest addition to FWD’s growing range of customer-focused product innovations,” FWD Life Philippines President and CEO Peter Grimes said. “With a minimum investment of $20,000, US Dollar All Set Higher offers access to a global portfolio of equity shares of top-listed corporations across the world. The plan brings the power of global investing closer to the Filipino and offers long-term growth potential with high potential returns at well-diversified risks.” Premiums paid for the plan will be invested in FWD’s new Global US Dollar Equity Index Fund, which provides access to a well-balanced portfolio of worldwide investments and invest in top corporations of the world (such as Apple, Microsoft, Facebook, Amazon, Samsung, Alibaba and Toyota), as well

als are evaluated based on implementation readiness, agency absorptive capacity, consistency or proposals with the priorities stated in the Budget Priorities Framework, and evidence of agency planning.” A statement like this is meaningful because it gives coherence to understanding the “why” of every element of spending in the budget, and provides a useful framework for analysis by serious advocates of budgetary reform who keep on monitoring performance. A noteworthy change in the DBM’s budget presentation is its decision to adopt the Classification of the Functions of Government (Cofog), developed by the Organisation for Economic Co-operation and Development. This system classifies government spending into 10 more specific expenditure purposes, thus presenting a more identifiable range of activities being served. Before, budget expenditures were lumped in just five general classifications: social services, economic services, general public services, defense and debt burden. Now, the budget dimension by sector (following Cofog) is more meaningful and understandable. 1. General public services (P1.393 billion) 2. Education (P704 billion) 3. Economic affairs (P660 billion) 4. Social protection (P475 billion) 5. Public order and safety (P211 billion) 6. Health (P166 billion) 7. Defense (P121 billion) 8. Housing and community amenities (P7 billion)

as provide optimal diversification of the policyowner’s investment. It closely tracks the total return of the MSCI All Country World Index (MSCI ACWI) that allows investors to participate in the long-term growth potential of international economies. All policy benefits from US Dollar All Set Higher are to be paid out in US dollars. The said strategy, thus far, has an annualized performance1 of 5.08 percent since 2000, with its five-year investment performance at 10.46 percent. During this period, the annual returns of the MSCI ACWI fluctuated between 22.80 percent (2013) and -2.36 percent (2015). 2 “As FWD continues to grow in the Philippine market, we take it as a mandate to continuously offer products which address every Filipino customer’s financial needs,” Grimes said. “Through FWD’s US Dollar All Set Higher, we are enabling Filipinos to expand their investment range, providing them access to a globally diversified equity portfolio. More important, the plan gives them the insurance protection they deserve as they continually build their legacy and aim to reach higher and go further in life.”

9. Environmental protection (P3 billion) 10. Recreation, culture and religion (P3.7 billion) (Amounts appropriated in the 2018 budget.) This Cofog classification has significant implications. It allows the central budgetary authorities a wide perspective of the various types of services the nation requires, and a comprehensive framework for balancing or rebalancing budget allocations among competing demands for spending. This disaggregation of needs is extremely useful in formulating the budget and in matching funds availability to funds requirements. As a planning tool, it is an improvement. Being an international standard, Cofog also allows comparisons with other jurisdictions. Not that budget allocations should be the same country to country, but comparisons help raise questions of “why the difference” and aids in the constant evaluation of equitable allocations: Are we spending enough, for example. This Cofog approach also is useful to apply to local government budget formulation and is strongly suggested to local subnational development councils. Not the least, this Cofog classification is of great use for Civil Service Organizations (CSOs) engaged in budgetary-reform advocacies because the framework provides convenient opportunities for zeroing in on key items under each sector/ spending classification, and for identifying accountability responsibilities.

ExportUnlimited BusinessMirror

Editor: Efleda P. Campos • Wednesday, October 18, 2017 A9

CDO EdTech Startup to represent PHL in Start Jerusalem By Kristina Noelle S. Andaya Trade-Industry Devevelopment Specialist

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DTI-EMB

START-UP from Cagayan de Oro will represent the Philippines in an all-expense paid trip in Start Jerusalem (Start JLM) from November 5 to 11, after besting four other local start-ups during the Pitch Jerusalem, a competition for innovative technology-based start-ups, held at the QBO Innovation Hub in the Department of Trade and Industry International Building, Makati City, on October 9.

Headed by Cofounder John Vincent Fiel, Wela School Systems is an EdTech Startup that aims to lessen the faculty’s burden when making their academic reports. The start-up offers a cloud-based grading platform that would enhance the productivity of teachers by automating reports and reducing the use of unnecessary spreadsheets. Also, they created a system that provides a better workflow for educators. In Wela’s way, Fiel said that instead of making multiple Excel

DTI-Citem to hold 66th Manila FAME this weekend

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HE 66th edition of Manila FAME, the country’s premier lifestyle and design event, is being held at the World Trade Center Metro Manila and the Philippine Trade and Training Center in Pasay City from October 20 to 22. To be showcased for international and local buyers are new features and local artisans displaying the country’s rich cultural heritage and design ingenuity. On display will be exportready and finely crafted furniture and home furnishings, holiday gifts and décor and fashion accessories, showcasing the best of Philippine design and craftsmanship. The three-day event is sponsored by the Center for International Trade Expositions and Missions or Citem, the export promotions arm of the Department of Trade and Industry.

sheets, users can reduce their report to two sheets and upload it to their system. Wela will do all the reports that teachers need, including the report card of the students, list of honors and certificates, among others. Using the system could help educators finish their report requirements in two days, from the average of two weeks before. Basically, the main goal is to automate teachers’ end-to-end process. The start-up is currently serving eight private schools in Cagayan de

Oro, Mindanao, and is currently scaling in Luzon and the Visayas. Aside from assisting the teachers, Wela School Systems also has a mobile application for parents to help track their children’s attendance, homework, grades and receive announcements from the school, among others. Together with representatives of other winning start-ups worldwide, Wela will be part of the “boostcamp” with workshops and sessions designed to take their product or solution to the next level. Among the 30 start-ups who submitted their applications in the Pitch Jerusalem, five were invited to present their pitch. Aside from Wela School Systems, the four other start-ups who presented were Enguest, JazzyPay, MachiBox and Teratomo. The panel of judges was composed of Israel Chamber of Commerce of the Philippines (ICCP) President Itamar Gero, ICCP Vice President for External Affairs David Elefant, ICCP Director Sagiv Massad and Department of Science and Technology (DOST)-International Cooperation Assistant Secretary Dr. Leah Buendia. Embassy of Israel Deputy Consul General Yulia Rachinsky-Spivakov also attended the event. The pitch competition was presented by the ICCP and the Embassy of Israel in the Philippines, in cooperation with the

CAGAYAN de Oro-based EdTech Startup Wela School Systems will represent the Philippines in Start Jerusalem next month, after besting four other local start-ups in a pitching competition held at the QBO Innovation Hub, Department of Trade and Industry International Building, Makati City, on October 9. Present during the pitching competition were (from left): Israel Chamber of Commerce of the Philippines President Itamar Gero, Wela School Systems Cofounder John Vincent Fiel and Chery Murillon of the Wela School Systems.

Department of Trade and Industry-Export Marketing Bureau, the DOST and QBO Innovation Hub and ICCP Platinum Sponsor, Dayanan Business Consultancy and

Event Sponsors TrueLogic Online Solutions and Payoneer. Start JLM 2017 will gather star tup founders around the world to explore and experience

Jerusalem’s booming start-up ecosystem. The city has been recognized to be one of the emerging technology and innovation hubs around the world.

DTI cites rise of global value chains, NEMs in exports growth

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N a recent seminar coorganized by the Department of Trade and Industry (DTI) and the Asean Japan Center (AJC) titled “Changing Trade and Investment Landscape in Asean and the Philippines,” the DTI cited the importance of global value chains and nonequity mode (NEM) in the growth of Philippine exports. “NEM is of particular importance to the country given our participation to activities, such as IT-BPO [information-technology-business- process outsouring], international subcontracting, franchising and licensing, among others,” Trade Undersecretary Nora K. Terrado said. Meanwhile, global value chains for international production translate to the different stages of the production process across different countries. This allows outsourcing and offshoring of activities of many multinational enterprises. AJC Secretary-General Masataka Fujita and Dr. Chie Iguchi from Keio University led the presentation of three AJC-initiated papers, namely, “Global Value Chains in Asean: A Regional Perspective”, “Global Value

Chains in Asean: The Philippines” and “Non-Equity Modes of Trade in Asean: The Philippines.” The papers provided valuable perspectives on the strategic importance of participation in global and regional value chains as Asean member-states maximize opportunities and benefits of economic integration while recognizing differences in economic development and industrial policies and the growing threat of protectionism. To further substantiate the initial findings in the papers, interactive dialogues were conducted between AJC and a panel of discussants, including Ambassador of Myanmar to the Philippines U Win Naing, First Secretary Jenni McEwin of the Australian Embassy in the Philippines and Director Senen M. Perlada of the DTI’s Export Marketing Bureau. Representatives from academe were also present during the seminar, including Dr. Joseph T. Yap and Dr. Ramon L. Clarete from the University of the Philippines School of Economics and Dr. Francis Mark A. Quimba from the Philippine Institute of Development Studies.

Trade Undersecretary Nora K. Terrado (center) leads the discussion of the importance of global value chains and nonequity mode in the growth of Philippine exports in a recent seminar sponsored by the Department of Trade and Industry and the Asean Japan Center (AJC). She is joined by (from left) DTI Export Marketing Director Senen M. Perlada, Dr. Chie Iguchi from Keio University, Executive Director Penny S. Bongato of the Information Technology and Business Process Association of the Philippines, AJC Secretary-General Masataka Fujita, Investment and EPA Advisor of Jetro Shozo Suzuki, Dr. Ramon L. Clarete of the University of the Philippines School of Economics, Dr. Francis Mark A. Quimba of the Philippine Institute of Development Studies and First Secretary Jenni McEwin of the Australian Embassy in the Philippines.

Central Luzon MSMEs brought best products to Manila

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DTI EXPLORES E-COMMERCE CHANNELS FOR MSMEs WITH LAZADA, ALIBABA

To push for greater multichannel retailing, Trade Secretary Ramon M. Lopez (center) met with Alibaba Group President Michael Evans (third from left) and Lazada Philippines Cofounder and CEO Inanc Balci (right) on October 11 to explore online-retailing opportunities for micro, small and medium enterprises. Lopez opened the possibility of using online platforms, such as Lazada, as a marketing venue for products of local entrepreneurs. Joining Lopez are (from left) Lazada Group COO Pierre Poignant, Marie Antonette Quiogue of Romulo Law Firm, Alibaba Group Vice President Eric Pelletier and Trade Undersecretary Nora K. Terrado.

ICRO, small and medium enterprises (MSMEs) from Central Luzon showcased their products in Metro Manila as the Department of Trade and Industry (DTI) in Central Luzon sponsored the Likha ng Central Luzon Trade Fair from October 11 to 15 at the SM Mega Mall Trade Hall in Mandaluyong, providing a platform to showcase the MSMEs’ products in preparation for their entering the mainstream market. The DTI pushes for the 7Ms strategy to help Filipino MSMEs compete locally and globally. The 7Ms strategy for Philippine MSME Development are mind-set, mastery, mentoring, market, money, machines and models, which are expected to propel MSMEs to make headway in increasing the competitive market. At least 153 Central Luzon MSMEs participated in the annual showcase of products from the seven provinces of the region, promoting their provincial branding, namely, Aurora with “Siempre Aurora,” Bata-

an with “Galing Bataan,” Bulacan with “Tatak Bulakenyo,” Nueva Ecija with “Taas Noo Novo Ecijano,” Pampanga with “Vida Pampanga,” Tarlac with “Natural Tarlac” and Zambales with “Zambales Finest.” “It’s the best opportunity for MSMEs to market their products, especially with the consumer base here in Metro Manila is very huge. We also expect the influx of buyers as Christmas season draws near,” DTI Regional Operations Group Undersecretary Zenaida Maglaya said. MSME participants in the trade fair were assisted by the DTI through Negosyo Centers, Shared Service Facilities, One Town, One Product (Otop), Kapatid Mentor ME Project and SME Roving Academy, among others. The assistance has helped MSMEs enhance their products in terms of quality and quantity of products, product label and packaging. The Likha ng Central Luzon five-day promotional trade fair featured products, such as processed food, furniture and home

furnishings, ceramics, jewelry, handicrafts, fashion accessories, bags, footwear, gifts and holiday décors and other novelty products. There was also an exhibit of prototypes of products that were the result of the Otop Next Generation project, where the DTI provided MSMEs with design consultancy, product-development ser vices and product-labeling design assistance. The Likha ng Central Luzon Trade Fair is a major regional tradepromotion activity jointly organized by the DTI 3 and Philexport Region 3, with the support of the Regional Development Council— Region 3 and the Central Luzon Growth Corridor Foundation Inc.. Likha 2017 is now on its 19th year and serves as the culminating activity of industry and trade related programs of DTI for the MSMEs of Region 3. The Trade Fair has proven to be an effective venue to promote the products of the region to institutional buyers and exporters based in Metro Manila and nearby areas.

A10 Wednesday, October 18, 2017 • Editor: Angel R. Calso

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editorial

Congress must pass rice tariffication bill soon

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he Philippines had enjoyed the protection of quantitative restriction (QR) on rice, or riceimport caps, for more than two decades. Upon joining the World Trade Organization (WTO) in 1995, the country was allowed to place caps on rice imports purportedly to discourage the influx of cheap staple from neighboring Southeast Asian countries. Rice was the only commodity that enjoyed the QR as the government had converted the import quotas into tariffs when Congress passed Republic Act (RA) 8178, or the Agricultural Tariffication Act. Initially, the Philippines was allowed by the WTO to implement the QR on rice for 10 years. Manila was granted a seven-year extension when it expired in 2004. After the waiver on the special treatment on rice again lapsed in 2012, the Philippines sought and was again permitted by the WTO to keep import caps in place until June 30 this year. In seeking the extension, the government cited the need to prepare the rice sector for competition from Asean countries, such as Thailand and Vietnam, which can produce the staple in a more cost-efficient manner. Despite being in place for more than two decades, domestic rice production continues to fall short of the requirements of Filipinos. Even after the Aquino administration had targeted rice self-sufficiency, the shortfall in rice output is still at around 1 million metric tons (MMT) annually. The government should have rolled out the necessary measures to prepare the rice sector since day one of the effectivity of the QR for rice traded under the WTO. But problems that had plagued the sector for many years—lack of irrigation, inability to secure the necessary farm equipment, lack of access to cheap credit for their production capital—have yet to be addressed. And it doesn’t help that RA 8178 did not include a sunset clause for the implementation of the rice-import caps. Manila had informed the WTO that it could not yet convert the QR into tariffs because Congress has yet to amend the agricultural tariffication law. The Legislative-Executive Development Advisory Council had identified the amendment of RA 8178 as a priority bill to fast-track its passage. A technical working group (TWG) created by the House Committee on Food and Agriculture recently approved a substitute bill to amend RA 8178. House Committee on Agriculture and Food Chairman Party-list Rep. Jose T. Panganiban Jr. of Anac-IP told the BusinessMirror that the lower chamber is planning to approve the bill on third and final reading before the end of the year. The Senate would also start discussions on the bill filed by Sen. Ralph G. Recto during the Halloween break, according to Sen. Cynthia A. Villar, the chairman of the Senate Committee on Agriculture and Food. The substitute bill approved by the TWG created by the House Committee on Agriculture and Food calls for the crafting of a road map, which will specify new initiatives to help rice farmers cope with the possible influx of cheaper imports from neighboring Southeast Asian countries. Bureaucrats will also have the money to put in place measures to make the local rice sector competitive, as the substitute bill stipulates that all duties collected from the importation of the staple would go to a Rice Competitiveness Enhancement Fund. The Philippine Institute for Development Studies said last November that the removal of the QR would allow the government to generate at least P27 billion annually. Economic managers said the scrapping of the rice QR could cut the cost of the staple. But its removal could also jolt government officials out of complacency and force them to focus on resolving the ills that have long plagued the rice sector.

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Context of the Myanmar humanitarian crisis Teddy Locsin Jr.

Free fire Continued from A1

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hile Burmese rulers “carried out raids on Muslim villages for territory and slaves, there were no faith-based explosions of violence seen today.” Distinctive features of…Myanmar’s early groups were easily swapped at will: mere change of dress and cut of hair decided ethnicity and belonging.

“Once-negotiable identities” hardened when Britain had swallowed up Burma by 1885 and started “a steady flow of people from Bengal and elsewhere—an immigrant work force that, in time, became part of Burmese society. By the 1920s and 1930s, this flow started to stoke anxieties that these new communities were “stooges of the British” who would corrode Burma’s pacific long-

Upswingers and downswingers

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held Buddhist values. But there was something else to this hardening of identities that was more insidious. Britain imported its obsession with racial classification, one that had been used to such deleterious effect in its colonies elsewhere. Boundaries were drawn between peoples where they hadn’t previously existed. It did not help that the Rohingya resisted the Japanese

alongside the British. “While Myanmar gained independence in 1948, the emphasis on ethnicity proved ripe for manipulation throughout the 20th century” in a country of strongly distinct ethnic identities seeking, as all modern nations do, for a single national identity, Tensley says. The present crisis was shaped by the actions of a Western multinational organization called empire. Action speaks louder than words. After World War I, a wave of White Russian refugees, denied haven everywhere else, fled the horrors of Europe, and were taken in by the Philippines. This was followed by a wave of Jewish refugees fleeing the horrors of anti-Semitism in Europe. In 1939 a third wave of refugees came to the Philippines— fleeing the horrors of the Spanish Civil War—after being turned away by European countries. Chinese refugees fleeing the Japanese invasion of China and the Chinese civil war followed. Some 30,000 Kuomintang families were taken

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he popular gloom notwithstanding, we’re actually living in an era of astounding progress. We’ve seen the greatest reduction in global poverty in history. As Steven Pinker has documented, we’ve seen a steady decline in wars and armed conflict. The United States economy is the best performing major economy in the developed world. In 1980 the US had a slight edge in GDP per capita over Germany, Japan, France and the United Kingdom. But the US has grown much faster than the other major economies over the past 37 years, so that now it produces about $54,000 of output per capita compared with about $39,000 for Japan and France. Progress is real, but, of course, it doesn’t happen in a straight line. Often it happens in what Ruth DeFries calls the ratchet, hatchet, pivot, ratchet manner. First there’s some innovative breakthrough that benefits society overall. But the innovation disrupts some lives. Down comes the hatchet as people want change. That leads to a pivot as society looks for new innovations to address newly created problems. Thanks to human ingenuity the innovation comes and progress ratchets up another notch.

This clearly happens with technological progress but also, less linearly, with cultural progress. Every era develops the culture it needs to solve its problems. During the mid-20th century the West developed a group-oriented culture to deal with the Great Depression and the World Wars. Its motto could have been “We’re in this together.” That became too conformist and stultifying. A new individualistic culture emerged (pivot) whose motto could have been “I’m free to be myself.” That was great for a time, but excessive individualism has left society too fragmented, isolated and divided (hatchet). Something new is needed. Politics during the hatchet phase gets nasty. It tends to devolve into a fight between upswingers and downswingers. (I’m adapting the words from a deceased Iranian-American futurist who called himself FM-2030.)

Upswingers believe in progress and feel that society is still fitfully moving upward. Downswingers have lost faith in progress and feel everything is broken. Both right and left are dividing into upswinger and downswinger camps. Among Republicans the upswingers embrace capitalist dynamism, global engagement and the open movement of people and ideas. The downswingers embrace ethnic and national cohesion and closed borders. On the left it’s between those who believe the only realistic path is to reform existing structures and those who think they are so broken we need to start over. The downswinger mind-set is similar across left and right. Because of the loss of faith in progress downswingers have a baseline mood of pessimism, protest and anger. They are marked by a deep social distrust and a bent toward conspiracy thinking. They disrespect codes of etiquette that traditionally regulate public life and crack down on opposing speech. Politics gets nasty in these “hatchet” periods because downswingers have a tropism toward ethnic and identity politics. If you’ve lost faith in universal progress, if you think everything is a zero-sum scramble for slices of a stagnant or shrinking pie, then, of course, you are going to see your ethnic identity marker as essential and all defining. You are going to embrace a sense of victimhood and feel that the great parade of historic wrongs is going to determine what comes next. History controls the future.

in and became Philippine citizens. After the Red Star rose over China, yet another wave of White Russian refugees was taken in by us. After a savage war of peace in Vietnam, the Philippines welcomed the Vietnamese boat people. After the Iranian Revolution, Iranian students sought asylum and got it. Iranians grew to become the second-largest population of non-Indo Chinese refugees. After the killings in Myanmar following the alleged rape of a Buddhist nun, then-secretary of justice now Sen. Leila M. de Lima, said they were welcome while other countries rejected them. Last year Philippine President Duterte told Al Jazeera of his decision to welcome refugees into the Philippines, a country of over 100 million where poverty is widespread. “I say send them to us. We will accept them. We will accept them all. They are human beings. They can always come here. I will welcome them until we are filled to the brim.” Actions speak louder than words of which there is never an end.

Politics also gets nasty in these periods because personal grievance gets intermingled with social grievance. If you feel aggrieved about your own personal status in society, then political life is not just a disagreement about means, it’s perceived as a status war against those who seem to think they are better than you. Downswinging populists are taking over the Republican Party. Regular Republicans, like Ed Gillespie in Virginia, have to adopt the tone and poses of the downswingers to try to win votes. The Democrats are a bit behind. But the center-left parties have collapsed all over Europe. There’s no reason to think that won’t happen in the US. In 1994 65 percent of Democrats believed “most people who want to get ahead can make it if they’re willing to work hard.” Now only 49 percent of Democrats believe that. That’s a 16-point shift from an optimistic, progress-embracing view toward a pessimistic, systemdoubting view. The best thing upswingers can do in these times is to respect the downswinger critique—we’re in this moment for a reason—without falling for its ultimate pessimism. But the global populist tide is not going to be held off just by passing a new tax cut or a few other bills. There has to be economic, social and political solidarity with those left behind, as well as penance from those who did the leaving. There has to be a convincing story of where we are in history. There has to be a

See “Brooks,” A11

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Opinion

IFRS 17

Privacy and sovereignty in the age of anxiety

BusinessMirror

Dennis B. Funa

INSURANCE FORUM

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N May 2017 the International Accounting Standards Board (IASB) issued International Financial Reporting Standard 17 (IFRS 17) to deal specifically with insurance contracts. It is touted as the first truly international standard for insurance contracts.

It replaced IFRS 4 Phase II, which was issued in 2004. IFRS 4 was originally intended as a mere interim standard. IFRS 4 did not really push for harmonization but, in fact, allowed the continued use of national standards. The chairman of the IASB, Hans Hoogervorst, described the need for IFRS 17: “Insurance is one of the last parts of the economy where we do not have an international standard. There is no highquality accounting information in many cases—there is no way that investors can have a good view of what is going on.” IFRS 17 was more than a decade in the making. It will be effective starting January 1, 2021, but may be implemented earlier subject to local regulation. The long lead time is a reflection of the complexity in its implementation. It has been described as “a complex standard that includes some fundamental differences to current accounting for liability measurement and profit recognition.” IFRS will, no doubt, introduce radical change in insurance accounting. According to Lars Nielsen, Hong Kong insurance lead at PricewaterhouseCoopers, “The standard is the

biggest change for the industry since IFRS first came in.” “The new one introduces a lot of changes—about the way you look at products, it might have an impact on dividends, an impact on systems. The big impact is not just on core accounting,” he adds. IFRS standard will apply to all insurance and reinsurance contracts as well as investment contracts. It will solve the comparison problem under the IFRS 4 by “requiring all insurance contracts to be accounted for in a consistent manner, benefiting both investors and insurance companies.” Indeed, its ultimate objective is consistency and comparability. It requires the measurement of “current, explicit and unbiased estimates of future cash flows” and “discount rates that reflect the characteristics of the contracts’ cash flows”. The International Actuarial Association has also issued International Standard of Actuarial Practice 4 to guide actuaries in the use of IFRS 17. Dennis B. Funa is the current insurance commissioner. He was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail: dennisfuna@yahoo.com.

Qualities of highly effective school administrators By Sheree M. Usigan

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hile children are at the center of campus education, it is the teacher who plays the most critical role in ensuring learning among young minds in school. However, parents and the community as a whole also have roles to play in molding the youth. For the government, it is its responsibility to provide the infrastructure for conducive learning, and the other needs of educators to improve the country’s quality of education. At present, it is safe to say that more than 90 percent of public school teachers are qualified to teach. But the problem lies on the quality of instructional materials, the absence of continuous teacher training, modification of teaching methods and strategies and the hiring of teachers in private schools who are not board passers. For schools to perform effectively, empowerment of the school head is crucial. And to improve school leadership, principals and administrators must have continuous training on education management for them to cope up with the fast-changing world of digital learning. To be a good school administrator, one must lead by example. A leader understands that others are continuously watching what he or she is doing and how he or she responds to certain situations. For example, a good school administrator arrives early and stays late. As a leader, the administrator does his or her best to make informed decisions that will benefit the school and all

Brooks. . .

continued from A10

new moral order that affords dignity to those who feel insulted. Upswingers will have to conserve our basic institutions that continue to produce real benefits, while reforming them with

stakeholders. An effective school leader inevitably shines and makes those around him or her look better. That’s the job of a good leader, working hard to make every teacher better; encouraging all educators to grow continuously. An effective leader constantly challenges teachers to outdo themselves; creates goals and provides support where needed. A good leader has a high emotional intelligence and is naturally gifted as a team builder. An effective school leader understands the importance of relationships, empowers staff members and pupils, shows trust and empathy to everybody and appreciates humor. An effective school leader can build and sustain reciprocal family and community partnerships, and leverages those partnerships to cultivate inclusive, caring and culturally responsive school communities. All of these are essential components of effective leadership. To build community networks, it is essential that a school leader is always visible at school and in the community. This way, he or she develops trust and creates a sense of transparency and shared purpose with parents, staff, community members and students. Highly effective school leadership is one of the most significant influences on every student’s progress in school. But this cannot be achieved without the cooperation of teachers, parents and students. The author is Teacher 3 at Buguey South Central School in Buguey, Cagayan.

what Glenn Tinder once called a hesitant radicalism. There are moments when society goes into decline. But there are many, many more transitional moments when some people just think society is in decline, when it’s really in a bumpy pivot. This is such a moment. It gets better.

Edgardo J. Angara

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he world is getting smaller and increasingly interconnected on account of technology. Profound changes are taking place on how people and even states relate with each other. Two vital areas of change are privacy (related to how individuals interact) and sovereignty (related to how states interact). First, privacy. In 2010 Facebook CEO Mark Zuckerberg remarked at a Silicon Valley awards night that, with online social networking, people lose the protection of privacy. For him, “public” instead of “private” will become the prevailing social norm. He said: “Blogging has taken off in a huge way, and all these different services that have people sharing all this information. People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people. That social norm is just something that has evolved over time.” Zuckerberg’s words were prophetic. According to a recent report by Hootsuite and We Are Social, more than 3 billion people log on to social-media platforms like Facebook or Twitter every day. That means up to 40 percent of the global population today broadcast their lives and share personal information online. Information sharing at such magnitude has led to many changes, including the journalism world. In a 2010 Reuters Institute and Oxford University paper, nearly all of the news editors surveyed said that, while social media has helped newsrooms receive breaking news faster,

doubts over accuracy, the need for verification and the loss of control over information have become the main risks facing their profession. Such information sharing has also blurred the public and private spheres, enabling the rise of bloggers who aren’t part of the institutional press but, nevertheless, cover national or political issues. Their emergence has resulted in a more dynamic and lively media. But it has also raised several concerns, such as misinformation and accountability tackled during a recent Senate hearing on fake news. The hearing was prompted by a blog post, claiming that seven senators refused to sign a proposed resolution decrying the prevalence of extrajudicial killings in the country, involving teenagers in particular. The senators alluded to cried foul, asserting that the blog post amounts to cyber libel as defined in the Cybercrime Prevention Act (Republic Act 10157). They also point to Article 154 of the Revised Penal Code, criminalizing the publication of “any false news that may endanger the public order, or cause damage to the interest or credit of the State.” In 2014 the Supreme Court ruled that the Revised Penal Code applied to

Wednesday, October 18, 2017 A11

the digital world, when it upheld the constitutionality of the Cybercrime Prevention Act. The bloggers assert that, as private citizens, they have no obligation to uphold fairness in their posts nor are they bound by journalistic ethics. Such preposterous claims have truly disturbing implications. Anyone with an Internet connection can post or share anything they think of, including content considered libelous, defamatory, sacrilegious or seditious with impunity. Such stance makes for inhumanity and lawlessness, a gross abuse of the new medium of the Internet. The simple truth is that the Internet does not, and should not, change humanity’s rules of civility and decency. Let’s take a look at sovereignty, a more familiar and older theme. After the Cold War ended, an intensified movement for global trading ensued. Globalization benefited many as the trade and technology flows between countries increased the prosperity levels for a third of humanity never before seen in history. A 2014 McKinsey Global Institute report estimated that one in three goods traded crossed national borders, and more than one-third of financial investments were international transactions. In 2012 such flows of goods, services and funds amounted to roughly $26 trillion. Countries that were more connected to these global flows increased their GDP growth by up to 40 percent. Globalization was easily facilitated by the so-called Bretton Woods institutions like the World Bank, International Monetary Fund and the United Nations, the dominant supranational organizations. Globalization, however, did not lift the welfare, much less wealth of the bottom third of humanity.

Through the years, disenfranchisement of vulnerable sectors by the globalized system intensified. According to a 2016 Foreign Policy, the disenchantment against globalization gave rise to nationalism and isolationism, growing hostility against immigrants (or foreigners in general) and loss of faith in international institutions. These fissures climaxed with Brexit and the victory of Donald J. Trump’s “America First” platform. They also explain, I believe, why a number of our high officials readily invoke Philippines’s sovereignty against inquisitive states or international organizations’ human-rights monitors. The plain fact, however, is the Philippines already surrendered part of its sovereign rights when it subscribed to the UN and the Asean Charters. Or when it ratified the World Trade Organization, the Paris Accord, the Treaty establishing the International Court of Justice and many other international covenants. Such self-imposed constraint is necessary for peace and stability, and a clear demonstration of our abiding dedication to a rules-based world order. Globalization has it pitfalls— the biggest of all, I believe, is the enabling of the 1 percent of the society’s elite in accumulating wealth and power, while disenfranchising the masses. That’s a grave cause for dismay. But it should not make us lose hope. Reform movements in history regularly occur and triumph. And, in this age of rapid communication and transportation, such changes will come sooner than later. We just have to remain patient and stay focused. E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara

The jeepneys must shape up, or lose to big business Michael Makabenta Alunan

on the contrary

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eepney transport groups must shape up and embrace government’s transport modernization, lest it gets edged out of the road with the surreptitious creeping entry of big business in public transport. Franchise, a privilege, not a right. The recent transport strike has magnified the conflicts between the march toward modernization for the environment and the riding public’s interests versus the transport “Left” led by Pinagkaisang Samahan ng mga Tsuper at Operator Nationwide (Piston) that is perceived to have painted itself into a corner as a die-hard “Luddite” or someone who opposes modern technologies. Piston seems the only jeepney organization left out, not because it’s Left but more for the perception that it is no longer doing right. Indeed, it has legitimate grievances—the livelihoods of drivers/operators are threatened. They must realize that, while they have the right to life, their franchise to operate a public transport is not a right, but a mere privilege. The higher principle is the right of the public—commuters, who want safe, clean, convenient and reasonably affordable transport. An example is the competition posed by Uber/Grab on taxis, which are bound to lose more once their approved fare hike is implemented, if they don’t improve their services. Big business Goliath coming? Another case already affecting jeepneys, particularly the Tulay Bonifacio Jeepney Operators and Drivers Association Inc. (Tubojodai) is the entry of Citylinks Coach Services Inc. plying the Resorts World-Bonifacio Global City route. Citylink initially operated big point-to-point shuttle buses but, because it takes time to attain full

occupancy and faster turnover, it fielded more mini-buses and coasters, which only added to the competition. Citylink buses operate with “white plates”, not public-transport yellow plates , claiming they are an “Employees Shuttle Service”. Unfortunately, they pick up passengers along the way, particularly in front of Tubojodai’s terminal. Worse, Citylink installed a pick-up station near the jeepney terminal, siphoning the latter’s passengers. Directly affected are Tubojodai’s 350 families of drivers and operators. Other groups affected indirectly are the Pateros Fort Bonifacio Transport Service Cooperative, the Tulay Enlisted Personnel PNP Housing Jeepney Operators and Drivers Association Inc. Dummies fronting for big business? Records from the Securities and Exchange Commission researched by associate Engr. Dave Garcia reveal that Citylink is just a dummy, representing layers of dummy corporations, ultimately leading to taipans led by Andrew Tan of Megaworld Corp. fame, and also involves noted Asiawide gambling lord Stanley Ho. Citylink is owned 100 percent by First Oceanic Property Management Inc., which owns P3.75 million worth of subscribed shares, with the five other nominal shareholders holding P1 each in subscribed shares. First Oceanic Property Management Inc., in turn, is controlled again 100 percent by Suntrust Home Developers, which owns P18,062,495 in subscribed shares with other nominal directors holding P1 each.

They must realize that, while they have the right to life, their franchise to operate a public transport is not a right, but a mere privilege. The higher principle is the right of the public—commuters, who want safe, clean, convenient and reasonably affordable transport.

Again, owners of Suntrust Home are Megaworld Corp., which controls 42.48 percent, or P955.8 million, of subscribed shares; PCD Nombee Corp. with 30.88 percent; PCIB Securities, 14.63 percent; Emerging Market Assets Limited, 10.44 percent and Asian gambling lord Stanley Ho (Hung Sun), 5.16 percent. These firms have interlocking directorates. Worth noting is Megaworld Corp., the flagship company of Andrew Tan, also known as Chong Buan. Megaworld has an authorized capital of P40 billion, and controls 95.85 percent of subscribed capital. As to why it is hiding behind layers of dummies, anyone can speculate. “Brod is thicker than water?” Citylink buses and coasters were subject to suspension during the previous administration, but after alleged “midnight deals” before the turnover of the Duterte administration, they were granted extensions of validity. Thus, the white-plate buses are still operating today without fear of violation. Jeepney operators and drivers feel helpless. After all their hearings, nothing happened. Their lawyer turned out to be a fraternity brother of Citylink’s lawyer and, after both exchanged cards and pleasantries, the legal guns fired at each other in the court battles at the Land Transportation Franchising and Regulatory Board suddenly turned silent. It seems “brod is indeed thicker than water”. Dog-eat-dog or win-win? Modernization is a must, but shall we allow free-market dog-eat-dog competition in transportation? If so, we see portends of worst things to come, as big businesses can easily edge out

jeepneys, the old king of the road. The government doesn’t intend this, lest it faces social dislocation and upheaval when push comes to shove. If it wants a win-win, it must listen intently to nitty-gritty aspects that remain sorely lacking. For one, there is no built-in maintenance program that will prevent downtime breakdowns resulting from overloading and 14-hour daily running time, which could affect amortization payments. And yet, Section 21 mandates the Department of Transportation to implement emissions standards through inspection and maintenance. It has an inspection system, although tainted with “nonappearance” paper compliance, but has no maintenance policy supporting and requiring public transport to operate maintenance centers for consistent commuter safety, prevent breakdowns, ensure regular amortization payments and provide additional livelihood for the sector, now burdened with costs of modernization. Industrial consolidation through cooperatives is the only option for jeepneys, but barriers to Koop registration are too tedious. Prototypes built have followed Bureau of Product Standards, which unfortunately limited itself to single physical dimensions, ignoring structural standards and varying size dimensions depending on route conditions (i.e., UP-Ikot vs long-distance Antipolo-Cubao). Amortizations are about P800 a day for seven years, which is the average boundary income. This means likely increases in fares as commuters bear the brunt of the costs of modernization, unless operators are willing not to earn as they pay first the amortizations. Why not fast-track the conversion to cooperatives, as Koops enjoy priority in Bangko Sentral ng Pilipinas’s Credit Surety Fund, which matches a cooperative’s equity 10 times at concessional rates, no collateral and 10 years to pay, which can bring down daily amortizations and prevent unnecessary fare hikes.

E-mail: mikealunan@yahoo.com.

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War versus extremists in Marawi ends M By Elijah Felice E. Rosales

@alyasjah

arawi City is finally liberated. However, the government will not yet lift martial law in Mindanao, as there remains extremist threats from pockets of Daesh-inspired groups in some parts of the island, according to the spokesman of the military. In a news briefing on Monday, Armed Forces Spokesman Restituto F. Padilla Jr. said the lifting of the martial law, or its possible

extension, is yet to be assessed by the government. “I believe there will be a consultation that will be conducted before that is done and,

from the side of the military, although this is a political decision, we will make appropriate recommendations,” Padilla said. This, in spite of President Duterte declaring Marawi City, Lanao del Sur, liberated from the clutches of Islamist extremists. “Ladies and gentleman, I hereby declare Marawi City liberated from the terrorist influence,” the President said in his seventh visit to the besieged municipality. “That marks the beginning of rehabilitation,” Duterte added. The declaration of the liberation of Marawi City came one day after government troops killed terrorist

leaders Isnilon Hapilon, self-styled emir of the Islamic State in Southeast Asia, and Omar Maute, the last of the infamous Maute leaders. According to Padilla, martial law is still needed “in some parts” of Mindanao “because of the existence of the network of all these terrorist groups”. “It is something that we need to do in order to address quickly and adequately those threats that are looming in the horizon or in the environment that may result in the harm of innocents, like what happened in Marawi,” Padilla added. The military’s spokesman said Daesh-inspired groups, such as

the Bangsamoro Islamic Freedom Fighters (BIFF), continue to pose security threat in Mindanao. “I don’t have the exact numbers, but there have been a number of groups, some of them as few as five, who have pledged allegiance to the Daesh, and these are the groups that we are closely watching,” Padilla said. “One of the prominent groups that had the capability is the BIFF in certain parts of Maguindanao,” Padilla added. Moreover, the military’s spokesman reported there are about 20 hostages, including women and children, that are still at the hands of the terrorists. “There also is still in existence about 20 to 30 armed elements, strugglers if you may call them, of the groups. Among these are about six to eight foreigners, foreign terrorists, [which] include the notorious foreign national, Malaysian, by the name of Dr. Mahmud [Ahmad], who was the financier of the Marawi siege,” Padilla said. Padilla added that government troops are still in the process of clearing some 60 to 80 buildings to ensure no unexploded ordnance, as well as improvised explosive devices, are

left inside. “Why is this required? It is because we want to ensure the safety of all our citizens, particularly the residents of Marawi, who will want to visit the areas of their residence and recover whatever it is that remains from the damage that has been caused by this terrorist group,” Padilla said. With the President’s declaration of liberation, the conflict in Marawi City has officially ended after almost five months, claiming more than 1,000 lives in the process. Sen. Joseph Victor Ejercito said on Tuesday that the Duterte administration does not need to rush the lifting of martial rule to maintain peace and order in Mindanao, noting that Mindanaoans are “ happy with martial law”. Ejercito ec hoed Pad i l l a’s be l ief t hat mar t ia l l aw shou ld not be lifted in Mindanao yet, as government troops are not done with the clearing operations to “make sure all terrorists are arrested and neutralized.” Ejercito asserted this was “also advisable, as people in Mindanao are happy with martial law since it limits or prevents warlordism and private armies from mov ing w ith their firearms.” The senator suggested that it might also be good in the long run to further improve peace and order situation in Mindanao, adding “it would bring about the needed economic development.” With Butch Fernandez

‘Papa P’ is DOT’s new tourism ambassador By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

M

ULTIAWARDED actor and singer Piolo Pascual, whom fans and netizens fondly call “Papa P”, has been designated as the country’s newest tourism ambassador. This was revealed by the Department of Tourism (DOT) during the formal unveiling of “Bring Home A Friend” (BHAF), the agency’s newest program aimed at boosting foreign tourist arrivals in the country. BHAF was formally launched last Saturday at the Newport PASCUAL Mall, Resorts World Manila, amid a fiesta celebration, which included Higantes dancers, cultural performers and renowned Filipino artists. Pascual was also tapped to sing the official BHAF theme song, which was played during the festivities. The actor-singer, however, was a no-show at the event. Tourism Spokesman Frederick M. Alegre told the BusinessMirror that the agency chose Pascual as tourism ambassador because “he is an extremely popular actor and talented musician who appeals to Filipinos both here and abroad. Despite his stature in the industry, he is quite approachable, and devoted to pleasing his fans. After having lived and worked in the US, Pascual also knows the mentality of our kababayan abroad, which gives him a unique position to speak to their interests, such as traveling, and as such, can encourage them to visit the Philippines and bring their friends along.” Alegre added that, after, initial talks, “Pascual expressed much interest in becoming tourism ambassador, even describing it as ‘a dream come true.’ Though his calendar was already loaded when we approached him, he still made sure to squeeze in time to film the AVP and record the BHAF jingle.” The AVP can be viewed at the DOT’s Facebook page. The BHAF is an incentive program, which seeks to promote travel to the Philippines by encouraging Filipinos here or are expatriates abroad to invite their foreign friends. Prizes for both sponsor and invitee may be won through a raffle scheme. Mechanics of the program are available at the www.bringhomeafriend.online. “We are looking at positive reactions from the United States, Japan, the Middle East and Hong Kong as these are the places with a lot of Filipino communities. Eventually, we hope to spur more travel from other countries,” Tourism Secretary Wanda Corazon T. Teo said in a news statement. In an earlier interview, the tourism chief said she hoped at least half-a-million more foreign visitors would come to the Philippines during the six-month implementation period for the program. The program will also be launched in key cities abroad. Continued on A2