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Private investment seen crucial to rural development, experts say

GOVERNMENTS need to find ways to attract private investment to rural communities, and need to recognize these communities’ potential for driving economic growth, experts told the Rural Development and Food Security Forum 2019 organized by the Asian Development Bank (ADB).

“Rural demand spurs growth… This is where agriculture becomes very important. Moving beyond, it’s not just thinking that urban (communities) trigger demand, but realizing that rural communities are huge consumers and they are very large,” Mekhala Krishnamurthy, head of the Sociology/Anthropology department of India’s Ashoka University, said during the forum Monday in Pasig City.

The three-day forum was organized by the ADB in partnership with the International Food Policy Research Institute (IFPRI) and the International Rice Research Institute (IRRI).

ADB is urging members to pay more attention to rural development and promote effective land and water resources management, thereby enabling sustainable food production.

“ADB will proactively assist our developing member countries to increase agricultural productivity and profitability, enhance food safety, and improve climate resilience and sustainability,” ADB President Takehiko Nakao said during his speech.

Ms. Krishnamurthy said that farms are facing a variety of risks which could spiral out of control if not handled properly.

“The frequency of risks has escalated and has become more common, but equally so has the complexity. This makes it extremely difficult for farmers (to) manage… It also makes it exceedingly challenging for those of us considering solutions to these kinds of risks,” she said.

These are some of the risk factors that also scare away the private sector from agriculture.

The risks make public sector-led intervention more necessary.

Akmal Siddiq, chief of Rural Development and Food Security Thematic Group under the Sustainable Development and Climate Change Department of the ADB, said that there is a need for smarter policy that will make agriculture attractive to private investment.

“Agriculture in just about every country is considered to be unsophisticated, less desirable, and not a very fancy sector to work in,” he said.

“What ADB would like to do under our strategy 2030 going forward is try to convince our member governments that they need to change their policy. Set out regulatory frameworks which would enable agriculture to become more profitable,” he explained.

Agriculture Secretary William D. Dar said governments need to assist firms in executing their programs for agriculture.

“What is the role of the government? We will be involved in training the farmers… enhancing that partnership between the big and small farmers. We will see to it that this will be replicated in other areas,” he said.

Shenggen Fan, director general of IFPRI, said governments should consider urban and rural areas to be part of one economy with no artificial boundaries between the two.

“How can we make sure that rural and urban areas are one? Number one is to improve infrastructure and policy,” he added. — Vincent Mariel P. Galang

Software industry hoping for 50% conversion rate among illegal software users

THE Business Software Alliance (BSA) said it hopes to make half of the 10,000 companies it has identified as users of illegal software convert to licensed products by 2020.

BSA has partnered with the Optical Media Board (OMB) to launch a “Clean Up to the Countdown” campaign to reduce illegal software use by the end of the year.

Between March and September, BSA claimed a conversation rate of 22% of the 6,220 companies the alliance is currently engaged with. The 2020 target signifies a more than doubling of the conversion rate.

In a news conference Monday, BSA Senior Director Tarun Sawney said that the use of unlicensed software puts businesses at risk of malware and viruses.

“If you used unlicensed software, there’s a pretty good chance you’re going to be a victim of a malware attack,” he said.

Mr. Sawney said the BSA identified the at-risk companies by doing a profile check. Each business sector such as design or manufacturing needs to use certain types of business software to operate, but the software companies sometimes have no record of licensed software use from those businesses.

“We are able to build a picture through our software companies and through the nature of businesses — comparing the data that software companies have [with] businesses and saying ‘well, given the nature of the product that you make you probably need this particular software’ — but we have no record of the relationship,” he said.

“The chances are, they might not be using licensed software.”

BSA said it contacts the business sector to offer guidance and advice in addressing illegal software use in the workplace, while the OMB enforces Philippine law.

Software piracy violates the IP code of the Philippines (Republic Act 8293) and the Optical Media Act (RA 9239), and could result in imprisonment, monetary penalties, or business closure.

Optical Media Board Chairman and CEO Anselmo B. Adriano said that based on their cooperation with BSA, OMB has been able to inspect and file at least 40 cases of software violations. Several of these companies are Internet cafes, and includes two large construction companies.

The BSA sees its target to reach out to 10,000 companies as ambitious.

“We’re being ambitious. We’ve done a lot of research — there are thousands of companies in the Philippines. We will mine as much data as we can to try and identify as many companies as we can that we believe would benefit from being approached and information of the advantages of using (licensed) software,” Mr. Sawney said.

BSA is only targeting private companies. But Mr. Adriano said that government agencies could initiate self-audits.

He said that in a recent meeting of the National Committee on Intellectual Property Rights (NCIPR), of which OMB is part, the members proposed an initiative to conduct a self-audit on government agencies’ software use.

Mr. Adriano said that OMB also recently met with the Government Procurement Policy Board to ensure that government procurement of hardware would necessarily include software.

BSA is a Washington, DC-based trade group representing software companies worldwide. — Jenina P. Ibañez

DA releases P130M worth of aid to Eastern Visayas rice farmers

THE Department of Agriculture (DA) said it has released over P130 million worth of loans to rice farmers in the Eastern Visayas region.

In a statement, the DA said it has disbursed P136.425 million worth in loans under the expanded Survival and Recovery Assistance (SURE Aid) program, which targets 9,095 farmers from Biliran, Leyte, Southern Leyte, Northern Samar, Eastern Samar, and Samar provinces.

The loans are distributed via cash cards provided by the Land Bank of the Philippines (LANDBANK). This program is implemented by the DA through the Agricultural Credit Policy Council (ACPC) and the bank, targeting rice farmers affected by the drop in the price of palay, or unmilled rice, the form in which they sell their harvest to traders.

Under the SURE Aid program, farmers tilling one hectare or less may avail of the one-time loan of P15,000, with no interest, payable over eight years.

The DA also awarded farmers farm inputs and machinery worth P65.83 million in nine Leyte towns — Abuyog, Bato, Hilongos, Hindang, Inopacan, Javier, Mahaplag, Matalom, and Baybay City. The package includes certified and hybrid rice, fertilizer, threshers, reapers and hand tractors.

More than P600,000 worth of agricultural assistance, which includes hybrid and certified rice seed, as well as veterinary drugs and biologics, was given to farmers in Tacloban City.

Assistance from other DA agencies were also distributed by the Philippine Fiber Development Authority, Philippine Coconut Authority, and the Bureau of Fisheries and Aquatic Resources. — Vincent Mariel P. Galang

Accounting and taxation of short-term leases and lease for low-value assets

Part 1

Philippine Financial Reporting Standard (PFRS) 16 is the new accounting standard for lease of assets or arrangements that contain a lease. It became effective on Jan. 1. It replaces Philippine Accounting Standard (PAS) 17, which means that entities reporting under PFRS shall apply this new standard in their lease transactions starting on the effectivity date.

On the other hand, taxation for leases generally remains unchanged since the issuance of Revenue Regulations (RR) No. 19-86 on Jan. 1, 1987 which prescribes the rules to govern the tax treatment of lease agreements.

As we all know, accounting standards and tax rules differ in many instances, and PFRS 16 is no exception. The purpose of this article is to provide a useful reference for taxpayers in knowing and dealing with the differences of accounting and tax rules for leases.

SHORT-TERM LEASE AND LEASE FOR LOW VALUE ASSETS
PFRS 16 defines short-term lease as a lease with a lease term of 12 months or less but taking into consideration the renewal options. On the other hand, lease for low-value assets is a lease for which the underlying asset is of low value (i.e., $5,000 or equivalent for a new similar asset).

ACCOUNTING TREATMENT FOR LESSEE AND LESSOR
Leases of these kind are accounted for in a way that is similar to current operating lease accounting — which means that payments are recognized by the lessee as an expense or cost and revenue by the lessor on a straight-line basis or another systematic basis that is more representative of the pattern of the benefits. Simply put, lease expense or revenue is generally reported equally over the lease term. However, for short-term lease, the lessee has the option to recognize right-of-use asset (ROUA) and a corresponding lease liability instead of the straight-line basis. The discussion on accounting and tax treatment for ROUA and lease liability will be tackled in part 2 of this article.

When the lessee pays advance rental and security deposit, the lessee shall account these as asset at the time of payment. These shall be reported as lease expense/cost in the period when applied to lease. On the part of the lessor, the advance/prepaid rental and security deposit shall be recorded as liability in the period of receipt and shall be reported as lease income in the period when applied to lease.

TAX RULES
RR No. 19-86 defines a lease as an agreement between a lessor and a lessee giving the lessee possession and use of a specific property upon payment of rentals over a period of time (which may be definite or indefinite). The equivalent of short-term lease or lease for low value assets for tax purposes is an operating lease.

Operating lease is defined in RR No. 19-86 as a contract under which the asset is not wholly amortized during the primary period of the lease, and where the lessor does not rely solely on the rentals during the primary period for his profits but looks for the recovery of the balance of his costs and for the rest of his profits from the sale or re-lease of the returned asset of the primary lease period.

LESSEE TAXATION
In an operating lease, the lessee may deduct the amount of rental actually due under the lease agreement during the year. This is subject to 5% expanded withholding tax (EWT).

In addition to the rent actually paid or payable to the lessor, the lessee should also report all the expenses/costs which under the terms of the agreement the lessee is required to pay or for the account of the lessor, as additional rental expense/cost which is also subject to 5% EWT. An example is the real property tax on the leased property if paid by the lessee should be claimed by the lessee as rental expense/cost and not as tax expense.

In case the lessee pays advance/prepaid rentals, if the lessee adopts the accrual basis of accounting, according to tax rules, the lessee should treat the advance/prepaid rentals as an asset subject to 5% EWT at the time of payment. These shall be claimed as deductible at the time of its application to the lease.

If the lessee, on the other hand, adopts the cash basis of accounting, the advance/prepaid rentals are deductible items at the time of payment provided the advance/prepaid rentals do not extend beyond 12 months. Otherwise, advance rentals/prepaid rentals corresponding to the period beyond 12 months shall be accounted for as an asset and will be claimed as deductible items at the time of its application to the lease. For withholding tax purposes, the entire advance/prepaid rentals including those for the period beyond 12 months shall be subject to 5% EWT at the time of payment.

With respect to security deposit for the faithful performance of certain obligations of the lessee, the lessee, whether adopting accrual or cash basis of accounting, should treat the same as an asset and not subject to 5% EWT at the time of payment because of its being in the nature of a conditional deposit. These deposits shall be claimed deductions subject to 5% EWT at the time of its application to the lease.

LESSOR TAXATION
Generally, the taxation of the lessor in operating lease is similar to that of the lessee but with opposite effects.

The lessor should report as taxable income only the rental payments that it is entitled to receive for the year, as provided under the lease agreement. For VAT purposes, the lessor shall report the lease income based on gross receipts or on collection basis.

Costs/expenses related to the leased property that are the responsibility of the lessor, if paid by the lessee, are deemed additional rental income of the lessor which is also subject to VAT (e.g., real property taxed on leased property that are paid by the lessee is reported as part of the lessor’s taxable rental income).

For advance/prepaid rentals, lessor taxation is different from the lessee because these are reported as taxable income of the lessor and also for VAT purposes in the year when received whether the lessor is using the accrual or the cash method of accounting.

Security deposit when received by the lessor, whether the lessor is using the accrual or the cash method of accounting, should be treated as a liability at the time of receipt and will be recognized as income which is subject to VAT at the time of application to lease.

DEALING WITH THE DIFFERENCES
For accounting purposes, the lease income/expense will be averaged on a straight-line basis over the lease term such that the monthly or annual lease income/expense is the same for the entire period of the lease including the rent-free period. For tax purposes, the actual lease income/expense for each period indicated in the lease contract should be reported as lease income/expense for that period. The difference between accounting and tax usually happens when there is escalation of the lease amount over the lease term or when a rent-free period is present.

The monthly/annual difference of lease income/expense shall be accounted for by the lessee and lessor as a temporary difference with the recognition of either deferred tax asset or liability as the case maybe. The reason why the difference is just temporary is that at the end of the lease term the total lease income/expense is equal under accounting and tax purposes.

To illustrate, say for example the lease agreement states that the lease term is for six months, the first month of the term is free, the second month’s lease is P20,000 and shall increase by P20,000 every month.

Shown in the table below the monthly lease income/expense for accounting and tax purposes.

The difference in lease income/expense should be reported in the schedule of reconciliation of net income per accounting books against taxable income of the income tax return.

In the same vein, the difference in the accounting and tax treatment of advance/prepaid rentals for both lessee and lessor is considered a temporary difference with the recognition of either deferred tax asset of liability as the case maybe and the difference shall be reported in the reconciliation schedule of the income tax return.

The study of difference on lease contracts other than short-term leases and low value asset particularly the accounting of ROUA and lease liability and its equivalent tax treatment will be discussed in part 2 of this article next week.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Nikkolai F. Canceran is a director from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com.

A call for a professionalized bureaucracy

Is Philippine civil service up to the demands of inclusive development? Are our rural development agencies, specifically, the Department of Agriculture (DA), up to speed?

Why the DA? Because the high rural poverty of 30% is an agriculture phenomenon. The poverty incidence is more than 2.5-times the ASEAN average.

The World Bank (WB) rated countries based on government effectiveness using a percentile rank, which “indicates the country’s rank among all countries covered by the aggregate indicator, with zero corresponding to lowest rank, and 100 to highest rank.” Percentile ranks have been adjusted to correct for changes over time in the composition of the countries covered by the World Governance Index.

Government effectiveness “captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies,” according to the WB.

Over the last 15 years, the Philippines hardly posted improvements in government effectiveness. It is second to the last after fast-rising Vietnam.

By contrast, Indonesia and Vietnam made tremendous gains with 20 and 14 percentage-points improvements.

Meanwhile, Malaysia, already a strong performer, slipped slightly. Thailand, in the middle rank, hardly moved.

It appears that the long-term performance of agriculture mirrors that of government effectiveness. Indonesia and Vietnam led while Thailand, the Philippines, and Malaysia lagged. Is it a coincidence?

It is cold comfort that Thailand and Malaysia are behind as these countries have reached high levels in poverty reduction and agriculture exports.

CALL FOR REFORMS
There is urgency for reform in the bureaucracy. It was merit-based in the past. In 1986, as confirmed by reliable sources, the Office of the President centralized all appointments from Department Secretary to Assistant Director (Director 3 today), or some eight ranks deep.

The stratagem was to remove the top to middle management professionals and replace them with new people. The rationale was to root out remnants of the past regime and/or reward supporters. This occurred despite opposition from the Civil Service Commission. The bureaucracy was demoralized, and it suffered from inertia. It continues up to this day. As new administrations come and go, the bureaucracy is rattled by new appointments in contrast to ASEAN neighbors where there is generally respect for meritocracy.

In the early 1980s, I was a project economist in the Malaysian agriculture sector. I observed the great respect for the civil service institution and meritocracy. To be appointed to a technical post, one must have an equivalent technical background. For example, the director of crop protection had a master’s degree in entomology. There was also step-ladder promotion internally from lowest level to secretary-general, the highest rank in the bureaucracy.

REFORM IS STRATEGICALLY IMPORTANT.
“Civil service reform is a deliberate action to improve the efficiency, effectiveness, professionalism of a civil service, to promote better delivery of public goods and services, with increased accountability. Such actions can include organizational restructuring, improving human resource management, and strengthening measures for performance management, public participation, transparency, and combating corruption,” as cited by Rao, 2013 in his article on Civil service reform, “Topic guide.”

Unless reforms are put in place, the poverty reduction agenda of President Duterte will hit roadblocks. His administration will fail to reach its target of 20% rural poverty incidence by 2022 from 30% today.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

 

Rolando T. Dy is the Co-Vice Chair of the Management Association of the Philippines’ AgriBusiness Committee, and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific.

map@map.org.ph

rdyster@gmail.com

http://map.org.ph

Peso edges higher ahead of Fed

THE PESO moved sideways against the dollar on Monday as the market awaits the US Federal Reserve’s meeting this week, as well as positive developments in the US-China trade talks.

The local unit ended trading at P51.08 against the greenback on Monday, stronger by five centavos from its P51.135-to-a-dollar close on Friday.

The peso opened the session at P51.15 per dollar. Its weakest point for the day was at P51.18, while its best showing against the greenback was its close of P51.08.

Dollars traded on Monday thinned to $665.3 million from $1.396 billion on Friday.

Currency traders attributed the peso’s movement to the wait-and-see approach of the market two days before the Fed’s Oct. 29-30 policy meeting.

“It’s been quiet today as the market went for wait-and-see approach for an expected 25 basis points cut in the US Fed policy rates. The peso moved sideways on the back of corporate demand or corporate covering,” a trader said by phone on Monday.

“The peso appreciated from market risk-on sentiment after both the US and China reportedly “close to finalizing” on a bilateral trade deal. The local currency might strengthen further in anticipation of a likely US policy rate cut from the Federal Reserve this week,” another trader said in an email.

US President Donald Trump has said he hopes to sign the deal with China’s President Xi Jinping next month at a summit in Chile.

For today, the first trader sees the peso playing around P51.00-P51.20, while the second trader sees the exchange rate moving within P50.95-51.15. — Luz Wendy T. Noble

Shares climb on positive third-quarter earnings

LOCAL STOCKS picked up on Monday as publicly listed companies started reporting positive earnings in the third quarter.

The benchmark Philippine Stock Exchange index (PSEi) climbed 24.03 points or 0.30% to close at 7,946.53, as the broader all-shares index increased 7.22 points or 0.15% to 4,774.25.

Luis A. Limlingan, head of sales at Regina Capital Development Corp., attributed the increase to the strong quarterly earnings of companies such as BDO Unibank, Inc., Metropolitan Bank and Trust Co. and Manila Electric Co.

Timson Securities, Inc. Trader Jervin S. de Celis added that the rally in shares of JG Summit Holdings, Inc. helped lift the PSEi by contributing 10.59 points to the main index’s uptick.

“[A]lthough the company has not released its earning report yet, investors are probably already anticipating good figures,” he said in a text message. Shares in JG Summit climbed 2.46% at the close of yesterday’s session.

He also pointed at the shares of SM Investments Corp. as a driver of the PSEi’s increase. Despite losing 0.29% at the end of trading, Mr. De Celis said on Monday that “the last minute buy orders from foreigners pushed (its) price…thereby cutting its -1.56% pullback today to only -0.29%.”

Sectoral indices ended mixed. Financials rose 30.11 points or 1.60% to 1,906.90 and holding firms climbed 30.35 points or 0.39% to 7,775.39. The rest fell, with mining and oil dropping 67.23 points or 0.73% to 9,142. Property went down 17.46 points or 0.41% to 4,148.83; services declined by 4.64 points or 0.30% to 1,526.89; and industrials lost 22.77 points or 0.21% to 10,447.30.

Shares in Suntrust Home Developers, Inc. continued trading at high volumes, soaring 0.46 points or 36.8% to close at P1.71 apiece on Monday.

Mr. Limlingan of Regina Capital said this is likely from investor speculation on the increase in net foreign buying in the company’s shares in previous sessions. Mr. De Celis of Timson Securities, meanwhile, said this is due to the anticipated increase in the firm’s authorized capital stock from P3 billion to P23 billion. Suntrust will hold its stockholders’ meeting Tuesday.

Value turnover on Monday stood at P5.88 billion, dropping from Friday’s P6.97 billion, with 1.36 billion issues changing hands.

Decliners outnumbered advancers, 105 to 81, while 65 names ended unchanged.

Foreign investors were bullish, recording net purchases of P142.55 million on Monday, a reversal of Friday’s net selling worth P307.28 million.

Meanwhile, most Southeast Asian stock markets rose on Monday, lifted by hopes that Washington and Beijing were close to finalizing parts of a trade pact, while the Thai bourse dropped nearly 1% after the United States suspended duty-free trade with the country for certain items last week.

US President Donald Trump has said he hopes to sign the deal with China’s President Xi Jinping next month at a summit in Chile. — Denise A. Valdez with Reuters

Lucas Bersamin leaves an indelible mark of subservience to the powers that be

“This is something that I will tell you — I wanted to delay the vote because I did not like to take part in it, because I did not like the public like the media speculating that I cooked or orchestrated the result. I always told you, rigging in the Supreme Court is not possible because there are so many involved,” retiring Chief Justice Lucas Bersamin told reporters after the Supreme Court, sitting as the Presidential Electoral Tribunal (PET), deferred once again the voting on whether to dismiss Mr. Ferdinand Marcos, Jr.’s electoral protest or to proceed with it.

I infer from that statement that the decision has been made and that it is controversial because it goes against PET Rule 65 that says if there is no substantial recovery in the pilot provinces, the protest may forthwith be dismissed without further consideration of the other provinces mentioned in the protest. Rumors are that the PET has decided to proceed to the 3rd cause of action of Mr. Marcos’ protest despite the much bruited information that no substantial recovery was made by him.

The voting had been deferred three times before that last en banc session of the Court/Tribunal presided over by Chief Justice Bersamin, leading civil society groups to suspect him of orchestrating the associate justices of the Court to a decision favorable to Mr. Marcos, a suspicion he considers unfair.

The Supreme Court has been known to decide specific cases according to the justices’ loyalty to the appointing authority, or their prior personal or political relations, and Mr. Bersamin had long been battling a perception of subservience to the presidents responsible for his rise in the judiciary. He was a trial court judge in Quezon City in 2003 when President Gloria Macapagal Arroyo elevated him to the Court of Appeals. She appointed him to the Supreme Court in 2009.

Justice Bersamin as well as the other associate justices appointed to the Court by President Arroyo voted to:

• uphold President Arroyo’s midnight appointment of Renato Corona as chief justice;

• strike down as unconstitutional President Noynoy Aquino’s executive order creating the Truth Commission because it limited its scope only to the previous Arroyo administration;

• uphold Congress’ creation of a new congressional district to allow President Arroyo’s son Dato to run in a district where there was no formidable opponent;

• dismiss the disqualification complaint against President Arroyo’s son Mikey, who ran as a nominee of the party list of tricycle drivers and security guards;

• stop the impeachment proceedings against then Ombudsman Merceditas Gutierrez, the Arroyos’ friend;

• uphold Romulo Neri’s invocation of executive privilege, thereby preventing the Senate from extracting from him Arroyo’s involvement in the NBN-ZTE bribery case.

In August 2015, he declared that “Bail for the provisional liberty of the accused, regardless of the crime charged, should be allowed independently of the merits of the charge, provided his continued incarceration is clearly shown to be injurious to his health or to endanger his life.” Consequently, the Court ruled that the fragile state of Senator Juan Ponce Enrile’s health justified his admission to bail.

Associate Justice Marvic Leonen dissented, saying the decision would “usher in an era of truly selective justice not based on clear legal provisions, but one that is unpredictable, partial and grounded on the presence or absence of human compassion.” I saw the ruling as Justice Bersamin’s scheme of providing justification for the grant of bail to Mrs. Arroyo who was then under hospital arrest for plunder and electoral fraud. She was confined in a hospital supposedly because of a life-threatening spinal disorder. All photos of her in the hospital showed her wearing a neck brace and in a wheelchair.

The ruling was rendered inutile in July 2016 when Mrs. Arroyo was set free by the Court without the Bersamin doctrine being invoked. Mrs. Arroyo was acquitted because the Supreme Court ruled, for the first time, that in a prosecution for plunder, the “main plunderer” must be identified in the information and proven during the trial before any alleged conspirator can be convicted. The ruling was written by Justice Bersamin and is now jurisprudence in plunder cases.

It is said that Supreme Court justices are to interpret the law, not make the law. In the cases of the granting of bail to Mr. Enrile and in the acquittal of Mrs. Arroyo, there were no laws to interpret. Justice Lucas Bersamin simply wrote his own opinions, which recognizably were favorable to his patron Mrs. Gloria Macapagal Arroyo, and his complaisant colleagues in the Supreme Court endorsed those opinions willingly and gladly to become laws of this afflicted land.

It will be recalled that during the 2016 presidential campaign, candidate Duterte said he would support the call for Arroyo’s release from hospital arrest. Just two weeks after Mr. Duterte was sworn in as president, Arroyo walked free, sans neck brace and wheelchair. After all, their patron is now an ally of the President.

In a function honoring her, Mrs. Arroyo, addressing President Duterte, said: “I thank you that when you became President, you provided the atmosphere in which the Court had the freedom to acquit me of the trumped up charges of my successor and your predecessor, so that the Court voted 11-4 in my favor, including half of those who were appointed by my successor.” In effect, she admitted publicly and formally that the Supreme Court of the Philippines acts on the basis of the president’s directions and wishes.

Mr. Bersamin’s also showed a tendency to vote in favor of President Rodrigo Duterte’s policies and actions. He voted to:

• allow the burial of former president Ferdinand Marcos in the Libingan ng mga Bayani, in compliance with President Duterte’s wish;

• uphold the arrest of Senator Leila de Lima, rabid critic of President Duterte, over alleged involvement in the illegal drug trade;

• force Chief Justice Maria Lourdes Sereno, who had blocked President Duterte’s orders to judges, to go on leave;

• uphold President Duterte’s imposition of martial law in Mindanao;

• uphold his extension of martial law in Mindanao to the end of the year;

• give cognizance to the quo warranto petition against Sereno;

• nullify Sereno’s appointment as chief justice.

President Duterte named Justice Bersamin chief justice on Nov. 26, 2018. It is the time-honored tradition to name the chief justice of the Supreme Court from the most senior among the associate justices. But Justice Bersamin was only the third most senior justice among the four nominees for the top post of the high tribunal. Justice Carpio was senior to him by eight years and Justice Peralta by a couple of months. In the case of Justice Bersamin, the President defined seniority in terms of service in the entire judiciary instead of service in the Supreme Court. Justice Bersamin had served in the judiciary the longest, having been a judge since 1986.

A week before his retirement on Oct. 18, Chief Justice Bersamin bade goodbye to the associate justices, saying “I have always endeavored to be true to my oath of office and have always discharged my duties and responsibilities in the best lights that God has endowed me with.” Addressing his long-time colleague in the Supreme Court, Justice Antonio Carpio, he said, “You were the epitome of professionalism in the court. You have left an indelible mark about commitment and fealty to the rule of law. It is hard for me to imagine how the deliberations of the court will be like after your retirement. Both of us will be gone.”

Indeed it will be hard to imagine how the deliberations in the Supreme Court will be like when the archetype of a jurist subservient to the powers that be and the epitome of a justice committed to the rule of law are gone.

 

Oscar P. Lagman, Jr. is a retired corporate executive, business consultant, and management professor. He has been a politicized citizen since his college days in the late 1950s.

Airports, tourism and traffic: KL, Singapore, Jakarta, and Manila

The UN World Tourism Organization (UNWTO) published its annual Tourism Highlights and the good news about the Philippines is that international arrivals have reached more than 7 million in 2018. The bad news is that this is still small compared to what many of our neighbors in the region get: less than one-half of Vietnam’s, less than one-third of Malaysia’s, less than one-fifth of Thailand’s, and Cambodia might even overtake us in a few years (See table).

Over the last two weeks, I joined the team of the Property Rights Alliance (PRA) in launching the International Property Rights Index (IPRI) 2019 in Manila, then Kuala Lumpur (KL), Singapore, and Jakarta. Among the things that I observed were the airports of these three cities and compared them with ours, NAIA.

KL and Jakarta International Airports are new and bigger, less congested and less confusing than NAIA where international flights are spread out among three separate, far away terminals. Singapore’s Changi airport is definitely modern and among the most beautiful and biggest airports in the world. Our flight was in Terminal 3 and I was very impressed by its modernity and size — the Hong Kong airport looks old compared to Changi. The “Jewel” near Terminal 1 is definitely a big tourist come-on with its tall man-made waterfalls and other attractions.

The Soekarno-Hatta airport of Jakarta has a new Terminal 3 that was opened in 2016 and it is big, long and modern enough. But it the Indonesian immigration bureaucracy seems backward. The immigration officer asked me what I would do in Jakarta, if I had any invitation letter as speaker, if I’d get paid as a speaker and how much. Weird. Dr. Sary Levy-Carciente, part of our team, was also asked the same questions by another immigration officer. These things are not asked by immigration officials in Manila, Kuala Lumpur, and Singapore, they just stamped our entry after getting our photo and/or e-thumb marks.

Traffic flow in KL is generally smooth as they have a continuously expanding and widening road network around the city. Few traffic lights. There are many elevated turns or underpasses, and no “traffic enforcers” visible.

Singapore has a similar situation and the roads from and to the airport are well-lit at night. Zero traffic enforcers too. They appear only if there are accidents.

Jakarta and Metro Manila have many similarities. One, they both have toll roads from the airport to the city and back, so there is little or no traffic congestion there. The problem is in the city centers where traffic gridlocks are bad. Jakarta has new, big and long MRT tracks under construction and it seems ready for operation perhaps in a year or two, this is good news.

Two, both have too many motorcycles including motorcycle taxis Go Jec and Grab in Jakarta, and Angkas in Manila. Go Jec seems to have more motorcycles as it is Indonesia-based while Grab is KL-based. People ride motorcycles for better mobility.

Three, both have many traffic enforcers, they stop vehicles and issue tickets, penalizing motorists I assume even for minor and mundane reasons.

From these, I draw these five lessons and possible policy reforms. Some have been started already.

One, we need bigger, more modern international airports. San Miguel’s Bulacan international airport and the big consortium’s expansion of NAIA should happen soon.

Two, we need more big and modern public roads and tollroads, less traffic bureaucracies and bureaucrats. The budget of the Metropolitan Manila Development Authority (MMDA) and Metro Manila cities for too many “traffic enforcers” should be converted into capex to build more elevated and underground roads, build more bridges across the Pasig River.

Three, we need to privatize the country’s rail system — MRT, LRT, PNR. Government should focus on facilitating right of way (ROW) acquisitions for the trains’ expansion and have rule of law on the roads, not operating and subsidizing the train systems. The Pasig River ferry boats need modernization and expansion too — private investments are needed there.

Four, we need more airline competition, more big foreign airlines coming and expanding here as they also help promote the country to their nationals abroad. Liberalization of the Public Service Act (PSA), now a priority bill in Congress, should be enacted soon.

Five, we need to abolish unnecessary taxes like that extortionist travel tax for Filipinos travelling abroad. Its main purpose is to fatten Tourism Infrastructure and Enterprise Zone Authority (TIEZA) bureaucracy. The Department of Education and Commission on Higher Education have huge annual budgets and TIEZA’s claim of contributing to education is just palusot (an excuse) and lousy alibi to sustain its useless bureaucracy.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

Universities as truth-seeking institutions

In this post-truth age, institutional autonomy is the most valuable attribute that universities vigorously defend. We see more and more cases around the world of how governments have directly and indirectly challenged academic freedom. From the dwindling support of politically sensitive research projects to the closing down of universities altogether, these threats make higher education’s responsibility to engage with and for society more difficult than ever.

Academic freedom was a response to the encroachment of the totalitarian state on the academia in the early 20th century. It was during this time that scientific research was brought under strict control and that science was for the furtherance of the state’s interests rather than society’s. In most democracies today, academic freedom is embedded in a state’s legal system. In the Philippines, Article XIV of the 1987 Constitution guarantees academic freedom. However, it falls short in providing a definition of what this means, deferring to the institutional autonomy of universities to determine what it encompasses.

When a university can determine for itself on academic grounds who may teach, what may be taught, how it should be taught, and who may be admitted to study, it is inevitable for intellectual diversity to thrive. The university, after all, is an arena where both students and faculty are encouraged to test each other’s intellectual and cultural traditions through reasoned criticism. Theoretical boundaries are blurred, assumptions are tested, principles shift — all in light of the pursuit of truth and the discovery of new knowledge through scholarship and research.

Freedom of inquiry is essential to the mission of the university as well as a vital organ that keeps its intellectual community alive. As a value therefore, it must also be nurtured from within — in the classrooms, the laboratories, during committee meetings, in co-curricular activities, and in writing papers to name a few. After all, the independence it demands from the dominant institutions of its society must be balanced with the same of its faculty, students, and other members of its community.

UNIVERSITY LEADERSHIP IN UNFORGIVING TIMES
Today more than ever, the university exists in multiple sites and contexts — owing largely to globalization. Its effect in higher education is profound, particularly in a region such as Asia where universities are hugely diverse and unequal in terms of reputation and resources. Commercialization, privatization, and massification amplified more inequalities — poor countries and populations pay more for inferior quality higher education. The response of universities to internationalize its students, faculty, and curricula have placed tremendous strain on leaders and leadership.

Perhaps globalization’s most overwhelming yet inconspicuous effect was to limit the ability of higher education leaders to freely determine the direction of the university, outside of neo-liberalist influence. One the one hand, universities are asked to innovate and transform themselves so that they can be “different.” On the other hand, there is an awareness that the yardstick used to measure them employ standards that are foreign in context and origin — an example of which is the world university rankings.

These are also unforgiving times as evidenced in the increase of public discontent and the rejection of state institutions as the main site of politics. This resulted in building political communities elsewhere, particularly online. Ironically, the disillusionment and disengagement with institutional politics, called “anti-politics” — a concept introduced by political scientist Gerry Stoker in 2006 — has now spilled over inside university walls. As the university became bigger, more international, and diverse, its bureaucracy became more complex and multi-layered. This resulted in a “democracy gap” where the relationship between its leaders and the larger university community became increasingly cautious and guided by operations manuals rather than reasonableness.

Therefore, the tall order of universities to remain steadfast to their mission as a truth-seeking institution amidst the discord must be complemented by a kind of leadership that can navigate these unforgiving times. An excellent leader is one who can understand, respond, influence, and strategically engage the university’s several contexts and sites. A leader in higher education is also a meaning-maker who is able to gather the courage to overcome the very complex context by weaving a collective story of empowerment. In other words, universities need leaders who have the courage to overcome context, set directions, take strategic risks, and empower people in the process.

John Dewey said that the shoemaker knows how to make a shoe, but it is the public who knows where the shoe pinches. In this age of volatility, uncertainty, complexity and ambiguity, the need for university leaders to review their leadership is a necessity. Otherwise, they will continue to create policies that “pinch” — those which are irrelevant and unnecessary.

The struggle of re-discovering a leader’s purpose is real. It is as real as the struggle to re-ascertain a university’s soul in these unforgiving times. Sadly, these are rarely part of the conversations in higher education. And in those occasionals that these get to the discussion table, most apologize for bringing it up — as if the examination of identity and purpose has no place in the “modern” university. Academic freedom unfortunately brings more friction than clarity in this era of populism, the retreat of democracy, and globalization. An institution must have the patience to look inward and reflect on its own history, place, and narrative as a university and as a learning community. At the end of the day, the main business of all universities is learning. Everything that it does — teaching, mentoring, research, community service, quality assurance, and others — must result in an education process that will enable its students to engage critically and live a full life.

 

Anne Lan K. Candelaria, PhD is currently the Associate Dean for Graduate Programs of the Ateneo de Manila University — Loyola Schools. She is also a faculty member of the Department of Political Science.

A five-step pitch for everyone

By Raju Mandhyan

MOST EVERYONE, all of us, usually need to pitch something every so often. At home we pitch an idea to our partners seeking for more quality time or an increased household budget. With kids, parents pitch ideas on becoming productive and choosing good paths to a better life for them. With parents, kids pitch ideas seeking freedom and autonomy. And, out in the world we are almost always pitching our products, our services, and our visions of a better world and a brighter tomorrow.

Yes, we all have products, proposals, and plans to pitch and packaging our pitches correctly and pointedly will help us move things along efficiently and fruitfully for all concerned. Here is a five-step process stolen from my own book, the Heart of the Close, modified to suit not just the salesperson but also the family member, the community leader, and the change-makers in the higher echelons of any country.

First, gently highlight a pain point for the recipients of your pitch. Creatively articulate their needs and your ability to address it. Briskly describe how your proposal resolves personal and professional challenges for them. Frequently use the words, “You,” “Yours,” and “To your benefit.”

Example: Your organization is on the verge of exponential growth. Usually this vision is foggy for many and with increased organizational alignment it is possible that your productivity can double in less than two quarters.

Second, make an irrefutable claim about you and your competencies to be able to help them achieve that growth. Yes irrefutable, meaning it can be verified to be true.

Example: Our team at ISI, Inc. is among the top five consulting companies in the country and our approaches are research based and time-tested.

Third, share testimony in the form of a story about how your service has helped recipients similar to the one you are pitching at.

Example: Last year when we worked with ABC Hotels and their marketing department, in less than a year their annual revenues jacked up by 30% and this year they are putting up two more branches in Palawan.

Fourth, help them visualize current-day benefits for their business. Paint pictures of how their business and brand will look after employing your services…

Example: Assuming hospitals like yours work like hotels, you can, with our support, optimize the use of your rooms, corridors, and other open spaces. Imagine serving 30% more patients a year with your currently available resources.

Fifth, offer a no-strings-attached sample research or a demonstration of your services to get you closer to sealing the deal.

Example: If it’s alright with you, two of our consultants can come down here next week and present short scenarios with solutions relevant to your business. Just give us a date and time.

Your journey as pitcher through these five steps must be an easy flow. Make sure your spiel is quick, concise and open-ended. Your job here is to leave the prospects thinking and wanting more.

Remember, you are not presenting the whole nine yards and neither are you hungry to close. Forget what the old-timers said about “always be closing.” That is a past-century myth. Your purpose is value creation and this first step is to simply build a strong rapport with your prospect’s head, heart, and gut-based thinking.

This little pitch you put together must be straightforward and easy to understand. It must be equally effective in person, on paper, and on other virtual media. It should never take more time than a ride in an elevator to a floor called success through service and sensibility. Yes, it is also pretty safe to try it first at home with the spouse and the kids. Happy pitching!

 

Raju Mandhyan author, coach and learning facilitator.

www.mandhyan.com

13-0 and all, mindset still the same for Blue Eagles

By Michael Angelo S. Murillo
Senior Reporter

ON the verge of completing a rare elimination round sweep in the University Athletic Association of the Philippines, the Ateneo Blue Eagles are unwavering in their mindset, which is to play the best basketball that they can, regardless of the opponent or the result.

The defending champions Eagles, seeking a third straight UAAP title this season, are to meet the second-running University of the Philippines Fighting Maroons in the final play date of the elimination round of Season 82 on Oct. 30, where a win would mean a direct passage for them into the finals and rendering the semifinals a step-ladder.

Ateneo said it is excited for the opportunity to get a sweep but has reiterated that it is not something taking precedence over its desire to be the best version of itself on the floor.

“Nothing changes. Next game is the last game. I understand that is a sweep or not a sweep but again, those are just minor issues for us. The major issue for us is how we play against UP,” said Ateneo coach Tab Baldwin following their 13th win of the season on Saturday at the expense of the National University Bulldogs, 88-51.

“What are our tactics? What are our strategies? How do we execute? How do we anticipate what they might do? There’s nothing else that enters into the equation for us, all the other talk is for you and the fans. To be perfectly honest, we tune all that out. We do the best of our ability to tune all that out. And just stay focused on the job, it doesn’t change,” added the champion coach, whose wards got the better of the Maroons, 89-63, in their first-round encounter.Mr. Baldwin went on to say that they are very satisfied of the kind of showing they have had of late, which he believes bodes well for them heading into the champion rounds.

“Satisfying. I think for two weeks in a row or two games in a row, we’ve come out with a great attitude and it’s been reflected in the way they played. The pace of the game, the defensive intensity, the rebounding, these are the things that make coaches proud,” said Mr. Baldwin.

“Sure we put points on the board, we made some shots, but I think that what we really focused on, what we worked on in practice is our defense and our rebounding. And getting these guys who are a really great group of kids to have the right basketball mentality, to have the right basketball attitude, is a joy to see,” he added.

In their last two games — against the University of the East Red Warriors and NU — the Eagles have been unforgiving, winning their matches by an average margin of 35.5 points.

Against the Bulldogs on Oct. 26, Ateneo just pounded on NU right from the get-go on yet another balanced attack.

Angelo Kouame led the charge for the Eagles with 17 points, 13 rebounds and three blocks with Thirdy Ravena having 15 points.

As a team, the Eagles had 26 assists and 13 players from its roster scoring in the win.

The last time a sweep was fashioned out in UAAP men’s basketball was in Season 70 when UE completed a shutout of the eliminations. It, however, failed to win the championship, losing to the De La Salle Green Archers in the best-of-three finals, 2-0.

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