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US protests Thailand’s chemical ban would hurt crop exports

BANGKOK — Thailand’s ban on three chemicals used in farming that its government deemed hazardous could threaten imports of American agricultural products into Thailand, a US government official said in a letter sent ahead of the ban this week.

Thailand’s National Hazardous Substances Committee on Tuesday voted to ban the use of three “hazardous chemicals,” including paraquat, glyphosate and chlorpyrifos, often found in pesticides or insecticides.

The ban, which will take effect on Dec. 1, would see the chemicals elevated to a Type 4 list on the country’s Hazardous Substance Act, which was amended this year and bans production, import, export, transfer or possession of the listed chemicals.

The ban itself doesn’t extend to agricultural products, but groups of Thai farmers protesting the ban are also calling for Thailand to ban all imports of crops from countries where the chemicals are used, which include the United States.

US Department of Agriculture Undersecretary Ted McKinney asked Thailand to “postpone action on glyphosate” in a letter to Thailand’s Prime Minister Prayuth Chan-ocha, obtained and published by local media on Friday.

“Should a ban be implemented, it would severely impact Thailand’s imports of agricultural commodities such as soybeans and wheats,” said McKinney in his letter, urging Thailand to maintain current maximum residue limits instead.

The United States exported $593 million worth of soybeans and $180 million of wheat to Thailand in 2018, according to data from the US Department of Agriculture (USDA).

McKinney, citing a US Environmental Protection Agency assessment in 2017, said that glyphosate “poses no meaningful risk to human health when used as authorized.”

Glyphosate — classified as “probably carcinogenic to humans” by the World Health Organization’s cancer research arm in 2015 — is also the target of thousands of lawsuits in the United States alleging that exposure to it causes cancer.

Thailand’s ban on glyphosate and the other two chemicals followed a similar move in Vietnam earlier this year, which also prompted backlash from US Secretary of Agriculture Sonny Perdue and Bayer AG, which sells weed killer Roundup.

HIGHER COSTS
Although many Thai civil society groups welcomed the ban, it also met significant resistance from farmer groups who bemoaned the lack of inexpensive alternatives.

Farmer groups said they will appeal against the ban in court, and they said if it takes effect, they will also demand an import ban on products from other countries that use the chemicals.

“We won’t be taken advantage of,” Sukan Sangwanna, secretary-general of the Federation of Safe Agriculture, told Reuters.

“Thai farmers will collapse without these chemicals because of higher costs.”

Asked about the US letter on Friday, Thai officials said they stood by the ban.

“Our job is to take care of the people’s health,” said public health minister Anutin Charnvirakul.

“It’s not right to force us to take what we don’t want,” said Mananya Thaiset, deputy minister of agriculture. — Reuters

Auto part supplier raises concern over CITIRA

PROPOSED changes in the corporate tax system will make automotive parts supplier Continental Temic Electronics Philippines less competitive, according to a company official.

Continental Temic Electronics Vice-President General Manager Glenn Everett told reporters on Friday that he is concerned the ability of the Philippines to attract more investments will be negatively impacted by increased costs arising from the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA). The measure proposes to rationalize tax incentives for locators while reducing corporate income tax.

He noted that the Philippines has the capacity and technology to produce parts for automated vehicles, but the company faces challenges in expanding its operations in the country given the uncertainty over tax incentives.

“The company cannot wait — if Toyota wants a product, the company can’t wait for CITIRA to finish before they decide. They have to make a decision when the customer needs the product. If there’s uncertainty — it counts against us here,” Mr. Everett said.

Mr. Everett said that the company could easily shift its volume to its other production hubs in the region.

“We compete. If Toyota needs a product, the company puts quotes from all the companies that it has that could make that product. The one with the best cost, that’s where it’s located,” he said.

“If we become uncompetitive, we won’t win any new business. We’re always struggling to be a competitive location.”

This comes as parent German manufacturer Continental AG in September announced factory closures and up to 20,000 job cuts in its worldwide operations.

Mr. Everett said that certain auto parts, such as diesel engines, have shrinking demand. In contrast, demand for electric car parts and sensors for automated driving are dramatically increasing.

However, he noted that Philippine operations will not be directly affected by the restructuring.

Continental Temic Electronics Philippines has an estimated 2,500 employees in the country, and the global company has around 245,000 employees in total. — Jenina P. Ibañez

How PSEi member stocks performed — October 25, 2019

Here’s a quick glance at how PSEi stocks fared on Friday, October 25, 2019.

 

Philippines gets P130M in radio equipment donation from China

CHINA will donate P130 million worth of broadcast equipment to the Philippines to help revamp state-owned Radyo Pilipinas stations, the Presidential Communications Operations Office (PCOO) said yesterday.

“We plan to rehabilitate 10 radio stations nationwide and on top of that the People’s Republic of China has already turned over more than P130 million worth of radio broadcast equipment,” PCOO Secretary Martin Andanar said in a statement.

Mr. Andanar said he checked government radio stations nationwide under the Philippine Broadcasting Service and found that these were “not inviting anymore.”

A radio rehabilitation program was started to overhaul old equipment used in these stations that include 10 AM stations and four FM stations, he said.

The Chinese donation was part of the bilateral documents signed last week when Chinese Vice Premier Hu Chunhua visited the Philippines on Oct. 22 to 24.

Radio equipment donated by the Chinese government included sound panels, microphones, headphones and radio consoles.

The four government FM stations will be the first to benefit from the Chinese donation, Mr. Andanar said.

Radyo Pilipinas Butuan will be the first to benefit from the bigger radio rehabilitation program, the PCOO said. The office is also looking at upgrading facilities in Cagayan de Oro, Davao, Cebu, Tawi-Tawi and Batanes. — Gillian M. Cortez

Senate bills to double workers’ service leave

TWO senators have separately filed bills seeking to raise the service incentive leave to 10 days a year from five to improve workers’ performance.

The measures filed by Senators Francis N. Pangilinan and Ramon B. Revilla, Jr. will amend the Labor Code.

Under the law, the service incentive leave is not given to those already enjoying vacation leave with pay of at least five days a year. Companies with less than 10 employees are also exempted from giving a service leave.

Mr. Pangilinan said he filed the bill given a recent World Health Organization finding that recognized burnout as a medical condition.

“Employees may use these service incentive leaves to prevent burnout in the workplace,” he said in the bill’s explanatory note.

Workers who took 10 days or more of leave yearly had a 65.4% chance of receiving a raise or bonus within a three-year period, compared with a 34.6% chance for those who took fewer than 10 days, Mr. Pangilinan said, citing a United States Travel Association study.

Under his bill, employees may convert to cash only five of the 10 days of service incentive leave if unused by year-end.

Two similar House bills been filed and are now pending before the labor committee.

The previous Congress passed a similar bill but the Senate failed to pass a counterpart measure before sessions adjourned on June 3. — Charmaine A. Tadalan

SSS releases P84M in jobless benefits

THE SOCIAL SECURITY System (SSS) has released P84 million worth of unemployment benefits in the first two months of implementation, it said in a statement at the weekend. The financial assistance went to 6,907 members of the pension fund who lost their jobs as of Oct. 21 or two months after it started receiving applications for the unemployment benefit, SSS Chief Executive Officer Aurora C. Ignacio said.

“We are now seeing the fruits of labor of our lawmakers, stakeholders and SSS representatives who have crafted the Social Security Act of 2018,” she said. “We are able to provide cash benefits to qualified members who needed the SSS the most when they unexpectedly lost their jobs.”

The Makati branch approved the highest number of unemployment benefit applications at 943 with releases amounting to P13.76 million, followed by Bacoor branch with 876 applications and P8.98 million in benefits, and Biñan branch with 833 applications and P9.74 million in benefits. The Pasig-Pioneer and Cebu branches both had 437 approved applications with releases worth P6.10 million and P5.16 million, respectively.

Ms. Ignacio said that members who may avail themselves of the unemployment benefits are those who were involuntarily separated from work starting March 5 this year and should not be more than 60 years old.

The Social Security Act of 2018 provides cash benefits to members equivalent to 50% of their average monthly salary for two months at most.

Involuntary separation includes installation of labor-saving devices, redundancy, retrenchment, closure and illness of the worker whose continued employment is illegal or bad to their co-workers’ health. — Beatrice M. Laforga

Burnham Park, public market redevelopment plans up for public review

MASTERPLANS FOR the redevelopment of Baguio Burnham Park and public market have been given initial approval by the city council and are now up for review by the public and concerned national government agencies. Councilor Maria Mylen Victoria G. Yaranon, chairperson of the committee on public works and a member of the Technical Working Group that drafted the plans, said for the iconic Burnham Park, a masterplan addresses the lack of cohesion in the over-all design of the park. “[In the past years], most of the development/rehabilitation projects for the park were implemented in a piece-meal or segmented basis,” reads the resolution giving city approval. Aside from public consultations, the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) will be given a copy of the plan “for information and appropriate action.” The council earlier passed a resolution approving the redevelopment of the Burnham Park through a proposed P20 million funding from TIEZA.

MARKET
For the public market, also a popular tourist stop, the redevelopment plan includes an adjustment on the setback of the road along Magsaysay Avenue “for public safety, privacy, and environmental protection.” “With the present state of the city public market, it deserves immediate positive remedies to make Baguio City worthy of its prestigious designation as a Summer Capital of the Philippines and a UNESCO Creative City. Baguio City needs a developed, organized and sanitary public market which should be transformed to become the city’s largest tourist attraction,” reads the council resolution.

Camiguin caps 40th Lanzones Festival

MISSED THIS year’s Lanzones Festival? No worries, there are many other reasons to visit the island province any time of the year as the local government commits to pursuing “sustainable and responsible” tourism with its various nature attractions. “Camiguin is proud to celebrate the 40th edition of Lanzones Festival, which is a testament to Mother Nature’s awesome creation and provision. This fruit has become the symbol of abundance for our island and has helped position our destination as an advocate for the protection and preservation of the rich ecosystem,” Governor Jurdin Jesus M. Romualdo said in a statement. This year’s festivity was highlighted by the street dance parade and competition over the weekend, which marks the official start of the lanzones harvest season. Among the popular tourist sites in Camiguin, located off the northern coast of Mindanao, include the White Island Sandbar, various springs, waterfalls, and the twin mountains Hibok Hibok and Timpopong, which are declared and ASEAN Heritage Park. The Mantigue Island Nature Park has also been declared by the Department of Tourism as a scuba diving spot and was one of the 20 sites included in the recent 1st Camiguin Dive Festival.

Iloilo transforming public walls and spaces into art scenes

BLANK PUBLIC walls in Iloilo City have been designated as canvasses for local artists as part of the city government’s support for a more vibrant art scene. “As much as possible, we want to paint all blank walls and open spaces in the city. We have many talented Ilonggos and we want to showcase their talents and skills,” Mayor Jerry P. Treñas said during last week’s unveiling of the first mural project located in Barangay Sambag in Jaro District. “This is the first of the many art projects that we lined up for the city,” he added. Other areas that have been lined up are three buildings in Muelle Loney and a wall in the Molo District. Artists from Manila are also visiting this week to explore partnerships with their local counterparts or some of the art projects. Mr. Treñas also called on barangay officials and residents to protect the murals and other planned installations. “We hope that our barangay officials will do their part in overseeing our art projects and making it sustainable, otherwise all our efforts will be wasted,” he said.

SUMMER ARTS FESTIVAL
Meanwhile, the city is also preparing to hold the first Iloilo Summer Arts Festival, set on April 3 to May 17, next year. It will showcase all art forms, including visual arts, dance, music, literature, film and theater, crafts, horticulture, and culinary arts. Aside from local artists, the city government will be tapping the private sector and other stakeholders for art installations, living statues and art fairs in the metro. — Emme Rose S. Santiagudo

Bukidnon sets up biosecurity stops

BUKIDNON, a major livestock and poultry producer, has set up biosecurity measures at its borders to prevent the entry of African Swine Fever (ASF). Travelers are required to get off vehicles and step on a foot bath while vehicles are sprayed with disinfectants. Secretary Emmanuel F. Piñol (in blue shirt), chair of the Mindanao Development Authority (MinDA), said it is supporting efforts by local government units and hog industry stakeholders in conducting a Mindanao-wide education campaign on ASF. He said MinDA is preparing a request to the government for financial support to procure more efficient biosecurity equipment and facilities.

How I will remember Tio Nene

Tatay Nene is how his family and also his friends, colleagues, and ordinary people call the late Senate President Aquilino Pimentel, Jr.

But I call him Tio Nene, for my brother-in-law Abet, a De la Llana, is related to him by affinity. Tita Bing, Tatay Nene’s wife, is a De la Llana. Tita Bing, a composer and lyricist, is as politically sharp as Tio Nene, and likewise served as Tio Nene’s political confidante.

I will remember Tio Nene in a personal way. It is subjective but nevertheless factual. Although I came to know the name of Nene Pimentel in the early 1970s as an intrepid and principled democrat, the personal relationship came much later — when a De la Llana became part of my family and my sister became part of the De la Llana family. Filipinos are typically clannish. So on special occasions like birthdays, weddings, and funerals, our families gather.

But because I am a political activist espousing progressive causes, I paid attention to Tio Nene’s brand of progressive politics — essentially social-democratic but yet sympathetic to the national-democratic movement. (For the unaware, social democrats and national democrats in the Philippines have had an intense, even antagonistic, rivalry, despite both being Left and radical.)

In this light, remembering Nene Pimentel is likewise remembering his politics, including the victories and the defeats.

So let me count the ways I will remember Tio Nene.

• Nene Pimentel voted “No” to the 1973 Marcos Constitution and did not sign the Constitution that legitimized the dictatorship. He, together with a few Constitutional Convention delegates who constituted the progressive bloc, campaigned hard against the ratification of the Marcos Constitution. It was in an assembly in Pasig, that I, a high school student then, first heard Nene Pimentel lambast the dictatorship and the Marcos Constitution — a hoarse and fiery yet enthralling speech.

• Despite the odds of losing because of systemic fraud and coercion, the anti-Marcos opposition, including Nene Pimentel, formed the Lakas ng Bayan coalition party to contest the 1978 Interim Batasang Pambansa elections. Led by Ninoy Aquino, Lakas ng Bayan fielded 21 candidates in Metro Manila. As expected, cheating and coercion dictated the outcome of the elections, resulting in the opposition’s total defeat. But what was politically significant was that the election campaign created a huge and energetic mass movement that presaged the people power movement that toppled the dictatorship in 1987.

The revolutionary Left in the Metro Manila region was instrumental in unleashing the mass movement by participating in the elections, even fielding its own candidates, namely former student leader Jerry Barican, labor leader Alex Boncayao, and urban poor leader Trining Herrera. It likewise actively supported the progressive candidates in the coalition, including Nene Pimentel, Teofisto Guingona, and Charito Planas. Regrettably, the leadership of the Communist Party of the Philippines (CPP) rejected the participation of its forces in the elections and the alliance with the “bourgeois reformists” or the “anti-Marcos reactionaries.” This dogma shaped its decision to boycott the snap elections in 1987. But the 1987 election campaign created the groundswell and the uprising that fell Marcos.

The political isolation arising from the boycott led to an acknowledgement from the revolutionary Left of a “tactical blunder.” I argue though that this was a strategic blunder, which could explain the problems that continue to hound the Left. I likewise argue that if a popular front materialized then, the progressive forces, including those associated with Nene Pimentel, Pepe Diokno, Tanny Tañada, et al. could have gained more political leverage in building the post-dictatorship institutions.

• Nene Pimentel formed the Partido Demokratiko Pilipino (PDP), which could have been the model of a truly mass-based, programmatic, and ideological party. It is said that that the only genuine Philippine political party — in terms of discipline, mass membership, and ideology — is the CPP. But the CPP has rejected parliamentary struggle as the main arena and has stuck to a strategy of armed revolution. That has created a vacuum, which the PDP could have filled.

In a private conversation with Tio Nene, with the benefit of hindsight, he attributed the decline of the PDP (only to be resurrected under Rodrigo Duterte’s candidacy, but no longer as an ideological party) to its pragmatic merger with the Lakas ng Bayan, operated by Peping Cojuangco, which was heavily populated by trapos (traditional politicians). The merger gave the upper hand to the trapos, effectively making PDP no different from the other traditional political parties. The rotten system swallowed many.

A handful shouldered on, conducting seminars on values, ideology, and platform. Along this line, an institute for leadership and governance was named after Nene Pimentel.

A prolific author, Tio Nene wanted to write about the lessons, including the sad ones, from the PDP experience. But his physical condition weakened, preventing him from doing what remained in his bucket list.

• Nene Pimentel’s nationalism was consistent. Most representative of this was his Senate vote in 1991, rejecting the extension of the US bases treaty. He was among the so-called Magnificent 12 Senators who voted “No” to the treaty. This of course dismayed then President Cory Aquino, who was personally close to Pimentel. Here was a case in which friendship, without breaking it, had to give way to a higher cause.

• The 1992 national elections saw the formation of a progressive force to contest the topmost positions. Then Senate President Jovito Salonga teamed up with Nene Pimentel to run for President and Vice-President, respectively. This was similar to the attempts of a reformist “third force” associated with grand names like Claro M. Recto, Lorenzo Tañada, and Raul Manglapus to capture political power. Their candidacies helped revived a coalition of small political parties and diverse groups that constitute civil society. But their machinery and their resources did not match those of the dominant parties, and they did not get Corazon Aquino’s support. In short, Salonga, Pimentel and the progressive forces got clobbered.

Till now, it is most difficult for reformists, much less the radicals, to win elections for the highest posts. But it can be done, as shown by the tantalizing victory of Leni Robredo in the 2016 vice-presidential election.

• Again, Nene Pimentel had to subordinate friendship to values and principles when he, exercising leadership in the Senate, demanded the opening of an envelope that contained sensitive bank information. The information would have been the evidence to convict then President Joseph Estrada in an impeachment trial. He was outvoted, even if he was then the Senate President, leading him to voluntarily resign from the position. This episode triggered a new “people power” movement that ultimately resulted in the extra-legal ouster of Estrada.

• Nene Pimentel was the intellectual fountainhead of local government reforms. The media and other institutions describe him as the “Father of the Local Government Code.” The gains at the level of local governance can be attributed to the pioneering effort of Nene Pimentel.

But these gains are still limited; they are called pockets or islands of success. What has bedeviled the likes of Nene and other reformists is that good initiatives like decentralization and devolution of power and political party reform have to contend with binding institutional constraints. Such deep problems like the transactional nature of Philippine politics or the short-term political horizon result in pieces of reforms having sub-optimal outcomes.

• Nene Pimentel made his mark as an elected official when he became the mayor of Cagayan de Oro city. He governed the city well, in spite of being deprived of additional resources by the dictatorship. And he used Cagayan de Oro and the whole of Mindanao as his support base in fighting the dictatorship.

Mindanao was solid in opposing the dictatorship. The Moro armed struggle helped weaken the dictatorship. The CPP and its forces in Mindanao primarily contributed to the advance of the revolution that became a strategic threat to Marcos. But politics was in command, and in this context, the politics of radical reformism promoted by Nene Pimentel and other legal oppositionists in Mindanao (including Rodrigo Duterte’s mother Soledad) was most significant in cutting down the Marcos regime.

• It goes without saying that Tio Nene and I also had differing political positions. He did not favor legislation of reproductive health because of his being Katoliko saradong and his interpretation of the Philippine Constitution with respect to this issue. He supported the candidacy of Rodrigo Duterte because of his preferential ranking of issues, in which his principal advocacy is federalism. (Later, he said that his version of federalism is different from what the Duterte administration is pushing). With respect to Duterte’s behavior on human rights, one can quote Tio Nene’s TV interview, wherein he said that Duterte “should pay for that, but it has to be done in accordance with the law.”

• On a more personal note, I will miss the singing of Tio Nene. His favorite song: “You are my Sunshine.” On some gatherings, my late wife Mae and Tio Nene would sing this song as a duet. In the Great Beyond, Tio Nene and Mae will reunite and sing:

“You are my sunshine, my only sunshine.

You make me happy when skies are grey.

You never know, dear how much I love you.

Please don’t take my sunshine away.”

Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.

www.aer.ph

Why not forestry?

Yes, why not forestry as a driver of economic growth, together with tourism, mining, and agriculture, which are sources of jobs in the countryside?

We used to export logs, lumber and other forestry products. Now, we are a net importer of forestry products. We import as much as 75% of our wood requirements. Really sad.

There are several reasons why we should promote the forestry industry and make it a growth driver of jobs in the uplands.

We have a competitive advantage in forestry production. The Philippines is in the tropical zone. Trees can reach full maturity in 10 to 15 years, depending on the specie, compared to 20 to 30 years in temperate zone countries. There’s no reason why the Philippines can’t produce forestry products and export again.

According to Petteri Makitalo, Vice-President of the Nordic Chamber of Commerce of the Philippines, the Philippines can be a superpower in forestry. Finland, which is a forestry superpower, produces only six, and in extraordinary circumstances, 15 cubic meters per hectare. The Philippines, being a tropical country, can produce 100 cubic meters or more per hectare.

It can generate jobs in the uplands, where about 25 million people live. Most of them are poor. It’s therefore a poverty-reducing industry.

It can also help combat insurgency in the uplands. The uplands, where the forests are, are a focus of recruitment by the New People’s Army.

However, the tree huggers and environmental Talibans will say that the forestry industry is the cause of the massive denudation of Philippine forests. The only solution to stop denudation is the total log ban which we have in place.

Not true. It’s government policies which caused the massive denudation. In the 1960s, the government promoted logging and mining to generate dollars and feed the import-dependent, inward-looking protectionist economy. However, government policy didn’t put the incentive on wood and logging companies to reforest by giving them long term and secure property rights. Instead, it imposed a reforestation fee on logging companies because it, rather than the private sector, assumed the task of reforestation.

Of course, government being government, the funds from the reforestation didn’t go into replanting and reforestation. It went to the pockets of officials. On the other hand, since the logging companies never got long-term secure property rights (at least 50 years) over their concessions, with short-term concession permits being the norm, logging companies’ incentive revolved on just cutting and exploiting the forests.

Because the main source of dollars to feed our import-dependent, debt-laden economy shifted to OFW remittances in the 1970s, government basically neglected the forestry industry and committed policy error after policy error, driven by political grandstanding, which led to the gradual decline of the industry and the country becoming a net importer of wood products.

The worst grandstanding gesture was made by former President Aquino who imposed a total log ban on natural and residual forests (Executive Order 23 issued in 2011). This resulted in regulatory overreach, affecting even man-made forests or tree plantations. Permits were needed for everything: permit to plant, permit to cut, and permit to transport, even for planted trees. One hundred percent inventory was required prior to harvest. Permits had to be signed by officials high up in the bureaucracy. Moreover, wood processing plants were required to renew their permits every three years, and every purchase of logs was required to show certifications where the logs came from. Extortion and bribery became the norm.

The result, according to Dr. Vic Paqueo, a retired former World Bank economist who had invested in a tree farm in Surigao from his retirement money, was that of 119 wood processing plants in Caraga region, 116 plants closed and demand for planted trees collapsed.

It’s arguable whether the total log ban is successful. Government is incompetent in policing the forests since kaingin farming (slash and burn agriculture) is the main culprit of denudation. Government’s other solution — a massive P7 billion tree planting program — was a failure, according to the Commission on Audit.

In fact, in other countries, most productive forests are privately owned. These privately owned forests are passed on from generation to generation. In Finland, 85% of the forests are privately owned.

In Germany, almost half are privately owned. It’s not hard to see why. Private owners have an economic incentive to maintain and police the forests in order to sustain their business for many, many years.

The solution to denudation is to assign property and tenurial rights to private entities, whether communal or individual. The Leftists, for whom only government is the solution, would probably cry murder.

However, let’s concede to the Leftists and environmental Talibans the policy of relying on government to enforce a total log ban on natural and residual forests. How do we move forward?

We need to customize the policies in order to promote tree plantations. Planted trees should be treated like a vegetable crop and not be over-regulated.

For planted trees, a 5% inventory, instead of 100%, is enough. Issuance of permits should be devolved to the CENRO (Community Environment and Natural Resources Office) of the Department of Environmental and Natural Resources (DENR) instead of it going to the regional level or the DENR Secretary. Permits for the cutting of trees in plantations should be done away with. A system of forest certification by accredited forest certifiers should be enough so that logs can be freely transported and traded. The setting up of wood processing plants should be completely deregulated and treated like any other business.

Fortunately, the DENR under Secretary Roy Cimatu is more enlightened and looking to emphasize promotion of tree plantation rather than regulation. However, investors need more secure and long-term property rights and the passage of the Sustainable Forest Management Act (SFMA), which passed in the House in the last Congress, is urgently needed to boost the industry.

The benefits of tree plantation and forestry production are enormous.

Tree farming can be a hugely profitable business. According to a study, the IRR or Internal Rate of Return on falcata (a type of fast growing wood specie) production with a 12 year crop rotation is 48.2% per annum. For gmelina, another wood specie with an eight year crop rotation, the IRR is 29.7% pa.

It’s an ideal investment for pension and retirement funds, whether local or foreign because of the long-term nature of these funds. Investment yields far surpass that of bonds. Investors could also earn and sell carbon credits. Furthermore, investment in tree farms would burnish the green credentials of any company or individual.

Tree farming is also good for the environment. Not only would more trees result in more carbon capture, they are also essential in water conservation. Water conservation, in turn, is important for irrigation and renewable energy generation.

It will spur the development of the downstream wood industries, such as furniture and housing construction. It can also help narrow the trade gap, initially with import-substitution and later on, export development.

Most importantly, it will promote peace and development in the uplands. It can reduce poverty and curb rural insurgency. With just a million hectares for tree plantation, the industry can generate up to $20 billion in revenues.

Unlike Build Build Build, the government’s infrastructure program, the promotion and development of the forestry industry require no government funds. All it needs is the tweaking of government policies.

So, why not forestry?

Those who want to order the book, Momentum: Reforms for Sustaining Economic Growth, a curated collection of articles in this column by National Scientist Raul Fabella, Dr. Emmanuel de Dios, Romeo L. Bernardo, Calixto V. Chikiamco, and the late Dr. Cayetano Paderanga Jr., may call the Foundation for Economic Freedom office at 3453-2375 or e-mail fef@fef.org.ph.

 

Calixto V. Chikiamco is a board director of the Institute for Development and Econometric Analysis.

idea.introspectiv@gmail.com

www.idea.org.ph