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DoE gives up chair of PHL Electricity Market

THE Department of Energy (DoE) on Tuesday formally relinquished the chairmanship of the Philippine Electricity Market (PEM) board, paving the way for the assumption by an independent market operator (IMO) of the functions previously led by the Energy secretary over the country’s wholesale electricity spot market (WESM).
DoE Secretary Alfonso G. Cusi said his department will keep its distance to ensure that the electricity market functions independently but competitively.
“The Energy department remains the ultimate guardian of present rules and manuals and protector against industry breaches and anti-competitive behavior,” he said during the ceremony held at the office of the Philippine Electricity Market Corp. (PEMC), the WESM’s governance arm, in Ortigas Center, Pasig City.
“To do this effectively, we will continue to be attuned to the present developments while maintaining enough distance from the market’s daily functions,” he said.
Mr. Cusi earlier said that he remains firm in calling for the IMO’s establishment, which is already overdue by more than a decade from what the Electric Power Industry Reform Act of 2001 (EPIRA) originally required.
“As for the DoE, we will remain faithful to the wisdom of the EPIRA and maintain oversight of the wholesale electricity market. As we bow out from PEMC, we will remain to do our task as a policy oversight,” he said during the event.
Under the transition plan approved earlier this year, the IMO will manage the operations of the WESM while PEMC will remain the spot market’s governing body.
Mr. Cusi said the DoE’s involvement with the WESM needs to be close enough for the department to understand key developments.
He said together with the Energy Regulatory Commission, the two will protect electricity consumers against industry breaches and anti-competitive behavior.
Before the turnover, PEMC, through its PEM board — composed of representatives from the government, power generation companies, transmission utilities, and distribution utilities — conducted both the operations and governance functions of WESM.
The IMO is tasked to operate the WESM and allocate resources for that purpose. It will also set the dispatch schedule of all power facilities, and monitor daily market trading activities.
It will oversee transaction billing and settlement procedures, and maintain and publish a registry of WESM trading participants.
Noel V. Aboboto is the first chairman freely elected by the members of the PEM board. — Victor V. Saulon

BIR proceeding with eTIS server migration

THE BUREAU of Internal Revenue (BIR) said that its electronic Tax Information System (eTIS) will return to normal today after migrating to another server, nearly a month after the bureau reported a “major hardware breakdown” in core systems hosted by the Department of Information and Communications Technology (DICT).
“The problem will be fixed today or tomorrow. The DICT has given us an alternative,” BIR Commissioner Caesar R. Dulay told reporters yesterday, noting that the BIR met with the DICT on July 30.
The BIR said it is moving the data center to Makati.
“We are moving to another site. They committed that today will be the start of migration,” said BIR Deputy Commissioner Lanee C. David.
The BIR wrote to the DICT on July 3 that its eTIS operations broke down, denying the bureau access to taxpayer records, especially in its Large Taxpayers Office and the Makati Revenue Region.
The eTIS is a web-based platform covering taxpayer registration systems, returns filing and processing, collection, remittance and reconciliation, audit, case management system, taxpayer accounts system, batch architecture module, and system administration management.
The BIR said the breakdown will not affect its collection performance.
The BIR is tasked to collect P2.039 trillion this year, 14.5% higher than the actual P1.78 trillion collected in 2017. — Elijah Joseph C. Tubayan

What’s next after the TRAIN?

In what was a surprising deviation from his usual off-the-cuff remarks, President Duterte stuck to his script as he delivered his third State of the Nation Address (SONA). Echoing his economic managers, he fended off criticisms of the Tax Reform for Acceleration and Inclusion (TRAIN) and asserted that it has made funds available to build infrastructure and develop human capital. The President extolled the seven-month-old law, claiming that it is already helping poor families and senior citizens cope with rising prices. He added that the government has set aside P149 billion worth of subsidies this year, a figure that will increase by P20 billion by next year. He also enumerated measures that the government has rolled out so far, including unconditional cash transfers, discounts in gas stations, and fuel vouchers for public utility vehicles, without mentioning the delayed implementation of these social mitigating measures. As he closed his segment on tax reform, the President urged Congress to pass the succeeding tax proposals.
INFLATION AND TRAIN
Yet lawmakers remain unconvinced, visibly aware of how consumers had felt the pinch of more expensive commodity prices despite a higher take home pay for those earning above minimum wage.
In June, inflation continued its monthly ascent and exceeded government target, clocking in a five-year high of 5.2% and averaging at 4.3% for the first half of the year. The Bangko Sentral ng Pilipinas already raised interest rates twice in a span of six weeks, in anticipation of higher inflation rates. Private sector economists are predicting at least one more rate hike before the year ends. While Moody’s retained the country’s investment-grade rating, it cautioned against the threats posed by elevated inflation and remarked that policy makers were facing challenges in managing the current inflationary pressures. Even former president and newly installed Speaker Gloria Arroyo, a major proponent of the expanded value added tax during her presidency, urged Duterte to “do something about the inflation.”
While many blamed TRAIN for the increased commodity prices, Duterte’s economic managers were quick to dispel this “incorrect” attribution, explaining that the higher-than-expected inflation was caused by a confluence of factors such as higher global oil prices, rice prices, and sin products. Nevertheless, the timing of TRAIN’s implementation, combined with the delay in the rollout of social mitigating measures, has undoubtedly burdened many Filipinos. In response, some senators have called for a suspension or, at the very least, a review of the law, an idea that the President dismissed in his SONA.
TAX PACKAGE 2
Up next on our lawmakers’ agenda is the second tax package, which focuses on lowering corporate income tax rates and rationalizing fiscal incentives. Businesses are burdened with the highest corporate income tax rate in the region at 30%, versus a low of 17% in Singapore. Even so, the efficiency in tax collections is still low. The country also has a complex tax incentives system, with fourteen different investment promotion agencies and over a hundred different investment laws.
In 2015, around P301 billion in revenues were foregone due to incentives. The DoF is pushing for the removal of incentives in certain industries, much to the chagrin of investment promotion agencies (IPA). While the government conceded that certain incentives are necessary to attract investments, several firms have enjoyed perpetual incentives without producing the desired benefits relative to its costs.
Following the same argument of providing for targeted subsidies instead of VAT exemptions under TRAIN, the DoF proposes the same logic as a more effective way of supporting firms. Yet, it remains unclear how the government intends to roll out these subsidies smoothly.
The upcoming 2019 midterm elections means that the legislative calendar will be shorter, as lawmakers head to their respective constituencies and begin preparing for their campaigns. This means legislators will be working within a tighter calendar compared to when the first tax package was deliberated upon in Congress. The House of Representatives has already started conducting hearings on the second package, but the Senate has yet to follow suit. Sen. Sonny Angara, chairman of the ways and means committee and a re-electionist in the midterm elections, said that the Senate is uncertain if it would pass a possibly “inflationary” tax package and is wary about the potentially adverse effects on jobs. The senators’ reluctance, however, may be overpowered if Malacañang decides to flex its muscles and push lawmakers to advance the bill.
As the President mentioned during his SONA, he hoped to sign the second package before the year draws to a close. This suggests the urgency with which the government is pushing for the passage of the next tax package, as lessons from the previous administrations have taught the current economic managers that reforms are most effective if implemented in the earlier part of a president’s term. Of course, this urgency is also prompted by the government’s need to raise revenues to finance its projects. However, does this mean that the government will introduce more new taxes? Will the rationalization of incentives be reasonable and fair? Unfortunately, the tight legislative timetable means that there wouldn’t be enough time to ensure that the bill is carefully studied. We can only hope that our officials have already learned from our TRAIN experience.
 
Weslene Uy is a Senior Economic Research Analyst of the Stratbase ADR Institute.

The SONA: a ranking of preferences


Rodrigo Duterte’s 2018 State of the Nation Address (SONA) addressed a lot of issues. And depending on your values, beliefs and advocacy, one would either slam Duterte or begrudgingly recognize parts of his reform agenda.
But it is not merely a question of counting what is good and what is bad in the President’s address. Duterte outlined his reform agenda: The Bangsamoro Organic Law, Universal Health Care (UHC), rationalization of fiscal incentives, increase in sin taxes, east of doing business Act, land use, and telecommunication liberalization. These are good reforms.
But we all have a ranking of preferences regarding the many issues we face. Some give attention to social reforms like health; others keep an eye on economic measures. And yes, the progressives are for the defense and assertion of human rights.
One, depending on her ranking of preferences, will give a much bigger weight to a particular concern, say human rights. Hence, even if the person supports the other measures, she would in the main oppose Mr. Duterte because of his bad human rights record.
Those who believe in the universality of human rights lambasted Mr. Duterte for his statement that “the illegal drugs war will not be sidelined. Instead, it will be as relentless and chilling…as on the day it began.” He even emphasized his disdain for human rights, saying that “Your concern is human rights, mine is human lives.”
To be sure, as many have pointed out, human rights and human lives are one. To quote Vice-President Leni Robredo: “We fight for human rights precisely because we value human lives.”
Hence, Mr. Duterte’s statement is a false dichotomy. Perhaps, Mr. Duterte was trying to make a nuanced statement, similar, for example, to how the former US President Barack Obama tried to justify the drone war to prevent terrorists from killing civilians. The US drone war is about targeted killing and signature strikes, even hitting innocent civilians. It’s a violation of the International Covenant on Civil and Political Rights.
Or perhaps, Duterte was following Deng Xiao Ping, who ordered a bloody crackdown of the Tiananmen student protesters in 1989. Deng’s calculation was that the spread of the protests would have rolled back the post-Mao Zedong reforms and ignited a civil war.
To be sure, the Obama and Deng examples were gross violations of human rights. But Obama and Deng and many other leaders are Machiavellian, cold-blooded and calculating, employing cost-benefit calculation, these leaders set aside moral considerations as they employ violent means to prevent huge or immeasurable losses for society.
The problem with Duterte’s reasoning is that even from an amoral “cost-benefit” calculation, he is wrong. Users of drugs are harmless people, and they do not constitute a threat, immediate or long term, to the peace and stability of the country. What is now recognized all over the world is that the drug problem is best addressed through a harm reduction approach.
The 2018 SONA gives as an insight into how people rank and weigh their issues. I am confident that our people support human rights. But many do not rank human rights a top priority.
It reminds me of a former US ambassador to China, Winston Lord, who rejected the reasoning of Deng to suppress the Tiananmen protesters. He harshly condemned China’s violation of human rights.
But ultimately, he said, “Human rights, as important as it is, cannot dominate our agenda.”
Sadly, this is likewise the outlook of many foreign governments and even the majority of our people towards Duterte.
 
Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.
www.aer.ph

Trademark ban and health alarmism


Health alarmism is the practice of frequently looking at health conditions pessimistically and then calling for more government regulations, taxation, and prohibitions supposedly to ameliorate the perceived pessimism.
Smoking is something that many people indulge in despite awareness of its dangers. The reason is that people own their body, not the government or doctors or NGOs. That is why many people also engage in dangerous activities like rock climbing, sky jumping, downhill bicycle racing, deep sea diving, full contact sports like boxing and UFC, and so on.
So aside from high and ever-rising tobacco taxes, advertising ban, smoking ban in public places, graphic warning in packs, the most extreme perhaps is mandatory plain packaging — no more branding and logos, only graphic warnings, pictures of damaged lungs, throat, tongue, etc. Their purpose is to further discourage people from smoking on top of existing measures mentioned.

One thing noticeable in the health alarmism of “more deaths due to non-communicable diseases (NCDs) due to smoking” is its inconsistency with data on rising life expectancy. From developing to developed coun- tries, people are living longer and healthier.
In addition, smoking prevalence among adults has been declining in many countries all these years even without plain packaging and related extremist measures.
When people have rising incomes, they also increase their appetite for travel, to live longer and naturally reduce substance abuse. Rising tobacco taxes and similar restrictions of course have also contributed to such reductions.
Based on the numbers, there seems to be little correlation between smoking prevalence and life expectancy. Japan has high smoking prevalence of 34% or twice of Australia’s 17% and yet Japan has higher life expectancy of 84 years compared to Australia’s 82.5 years. South Korea has smoking prevalence of 50% or three times that of Australia and yet they have similar life expectancy.
Australia is the first country in the world to legislate plain packaging in December 2012. Several tobacco-exporting countries like Indonesia and Honduras went to the World Trade Organization (WTO) to complain the measure as non-tariff barrier to trade. In late June 2018, WTO made a ruling that Australia’s law is valid.
If we bring in the above numbers to this case, it is clear that the plain packaging law is not really a health measure but a political measure to shut out some legitimate businesses while unintentionally aiding illegitimate businesses including criminal and terrorist groups whose main fund-raising activity is smuggling and illicit trade.
The decline in smoking prevalence/incidence in many countries all these years can be explained by (a) people’s awareness of the dangers of smoking, (b) effects of high cigarette taxes, smoking bans in public places, etc.
Another possible explanation is (c) people are smoking fewer products from legitimate manufacturers but actually smoking more products from smugglers and illegal sources as the latter’s prices are much cheaper.
In the case of Australia, a KPMG study last year showed that after the plain packaging law in 2012, the estimated share of illicit and smuggled tobacco rose from 11.5% of total tobacco consumption in 2012 to 13.5% in 2013 and since then stayed at around 14.2% average from 2014-2016 (source: KPMG, “Illicit Tobacco in Australia, 2016 Full Year Report,” March 2017.)
The Philippines has no plain packaging law or legislative proposal yet but only rising tobacco taxes: P30/pack under the Sin Tax law of 2012 (RA 10351), became P35/pack this year and P40/pack in 2020 under the TRAIN law of 2017 (RA 10963), then another push towards P90/pack as proposed by Sen. JV Ejercito and many health NGOs.
The impact on cigarette smuggling seems to be big. See for instance a BusinessWorld report on May 01, 2018, “DoF warns cigarette smuggling may be helping finance terrorism.” The report quoted DoF Secretary Sonny Dominguez as saying that “Illegal money can end up funding terrorist activities” while Customs Commissioner Caesar Dulay said that “smuggled cigarettes are currently flooding the market.”
The twin measures of more tobacco taxes and plain packaging policy are perfect formula to encourage more tobacco smuggling, more fake products that are cheap and can encourage more smoking and more smokers. And more money to criminal and terrorist groups that are engaged in illicit trade.
Newton’s third law of motion (“for every action there is an equal opposite reaction”) can also apply in economics and trade policy: For every taxation and prohibition, there is an equal and opposite distortion.
 
Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.
minimalgovernment@gmail.com

Where does loyalty to country begin?

One of President Manuel L. Quezon’s immortal quotables was, “My loyalty to my party ends where my loyalty to my country begins.” Sadly, both in the Philippines and in the United States, these are “famous lost words” — lost in the struggle for political survival.
Both President Donald Trump and President Rodrigo Duterte enjoy unprecedented approval among their respective voter bases, in sharp contrast to the criticism hurled by detractors. Duterte has been vilified as a killer and an uncouth potty-mouthed thug. And many Republicans privately concede that President Donald Trump is a congenital liar and prone to taking bizzare action, like insulting America’s closest allies, mounting a trade war, and siding with Russia’s Vladimir Putin against the entire intelligence and national security apparatus of the US.
But they have avoided frontally criticizing him for fear of a backlash from rabid Trump supporters. Even the way GOP leaders, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnel, contradicted Trump on his position on Russian interference in the last US presidential election was muted and measured, at best.
Note that Trump’s public statements, following the Helsinki summit with Putin, were described by former CIA John Brennan as “nothing short of treasonous.”
But what some find difficult to understand is the attitude of Trump’s voter base towards allegations of collusion — or even conspiracy — between Trump and the Russians. According to one survey (by Public Policy Polling), 77% of Trump voters believed that he should continue to serve as president “even if it’s proven that he conspired with Russia to sway the 2016 election.” Only 14% said Trump should resign if collusion is proven.
However, this attitude does not necessarily translate into disloyalty to their country, as far as these Trump supporters are concerned. According to analysts, “party, ideology and race play key roles in Trump’s approval. Americans’ views of Donald Trump’s handling of his job as president are largely shaped by the same social fissures that have long divided the US.”
If you consider that Trump’s voter base consists mainly of non-Hispanic whites (including neo-Nazis and white supremacists), and if you consider, further, that the previous president, Barack Obama, was black, it becomes easier to understand the distinction between loyalty to Trump and to fellow whites vs. loyalty to the Russians.
In other words, these Trump supporters regarded — and still regard — the Democrats and Hillary Clinton as their “enemy” and going by the premise that “the enemy of my enemy is my friend” because Putin and the KGB helped Trump defeat Clinton, the Russians, in effect, became friends of the Trump loyalists.
One rabid Trump supporter argues that this not make him disloyal to America. Of course, one can also argue that such a rationale is called weaseling and that, whether they are doing it consciously or not, when they approve of a foreign country sabotaging the very foundation of American democracy — its electoral process — that is an act of disloyalty.
Wasn’t it the Lord Jesus Christ Himself who said, “He who is not with me is against me!”?
Concerning Trump’s dalliance with a porn actress and a Playboy bunny, these Trump supporters don’t care because “that’s what powerful men do.” And they made references to Presidents John F. Kennedy and Bill Clinton.
Trump’s latest approval rating among Republican voters, according to Gallup, is at a high 85%, although among independents and Democrats, he rates a measly 37% and 11%, respectively. Among all voters, Trump’s approval rating is just slightly above 40% and disapproval is upwards of 50%.
Those who hold Trump in high regard believe he has been good for the US. Tax reform is considered among his major accomplishments and the brisk US economy has been attributed to his administration. Apparently, for these, Trump loyalists have been willing to overlook his sins.
The question one is constrained to ask Trump supporters and the Republican leadership is, “When does loyalty to party, ideology and race end, and when does loyalty to country begin?”
In Philippine politics, asking that very same question is like talking to the wind. In a political environment where the quest for power and wealth is paramount, loyalty to the country sounds like too much mushy stuff.
While President Rodrigo Duterte more than matches Trump in terms of the near-fanatical loyalty of his supporters, that “loyalty” is, likely, more self-serving than selfless.
In the first place, there is no such concept as “ideology” in Philippine politics and a “party” is simply a basis for gaining official recognition, the better to forge alliances with whoever is in power. And that, in turn, is determined by who assumes the presidency.
Because of the power over the purse and the power to appoint people to high positions (as well as the power to dislodge them), President Rodrigo Duterte holds the reins, calls the shots, and cracks the whip. Everyone else jumps.
The last public opinion polls placed Duterte’s approval rating at 70% “satisfied” vs. 14% “dissatisfied” and 17% “undecided.” The question asked in hushed tones is “what percentage of the Philippine military is satisfied or dissatisfied with Duterte?”
After EDSA One and EDSA Two, the role of the military as power broker is generally conceded, although nobody dares to publicly rouse the men-at-arms.
Meanwhile, Duterte has, understandably, made sure that the members of the Armed Forces are significantly benefited under his watch. One press release issued by military quarters cheerfully reported, “Starting this year, soldiers and police will get the partial adjustment in their salary until 2017 and by January 2018, take home pay will be doubled according to Department of Budget and Management (DBM).”
The news item also announced that, in addition to the salary increases, “soldiers, and their families will also be covered by administration programs from medical, health, social services, and education benefits for the soldiers and their families,” including substantial cash benefits and even a monthly sack of rice.
It can be assumed that the benefits and emoluments for the military brass are even more substantial. Given these, why would anyone want to stay a military coup?
Yet rumors persist about such a plot and administration officials continue to accuse the opposition of trying to “destabilize” the Duterte government.
In the wake of the Watergate scandal, a Republican-controlled legislature told a Republican president, Richard Nixon, to resign rather than face impeachment. Will today’s Republican-controlled Senate and House of Representatives do the same and place duty to country above loyalty to their personal political interests? Or will it take the dislodging of the Republicans by the Democrats in the coming mid-term elections for this to happen?
That is a question that hovers over Americans like a soap opera cliff hanger. As for Duterte, forget about impeaching him or staging a coup against him.
In the Philippines, loyalty to personal interests trumps loyalty to country any day of the week, including Sundays.
 
Greg B. Macabenta is an advertising and communications man shuttling between San Francisco and Manila and providing unique insights on issues from both perspectives.
gregmacabenta@hotmail.com

A hidden Amazon fortune: Bezos’ parents could be worth billions

It may be the most successful venture investment of all time.
In 1995, Jackie and Mike Bezos plowed $245,573 into their son’s fledgling e-commerce website, according to a prospectus two years later. It was a big gamble, Mike Bezos, the stepfather of Amazon.com Inc. founder Jeff Bezos, recalled onstage during a 2015 event at the National Constitution Center in Philadelphia.
“I want you to know how risky this is,” the son told his parents, “because I want to come home at dinner for Thanksgiving and I don’t want you to be mad at me.”
He’s probably welcome to extra helpings of turkey — and all the gravy. One IPO and three stock splits later, his parents’ stake could be worth almost $30 billion today. That would make them wealthier than Microsoft Corp. co-founder Paul Allen, the 30th-richest person on the Bloomberg Billionaires Index.
The parents’ holdings haven’t been publicly disclosed since the end of 1999. While it’s unclear how much they still own, continuing donations of Amazon stock to their charitable foundation suggest they still control a healthy chunk of the world’s second-most valuable company.
They’ve donated 595,027 shares to the Bezos Family Foundation from 2001 through 2016, according to filings available on GuideStar, which collects data on nonprofits. The 25,000 shares they gifted in 2016 were worth about $20 million at the time. The foundation focuses on education for young people.
If they haven’t sold or donated anything else, the pair would own about 16.6 million shares, or 3.4% of the firm, making them the second-biggest individual owners after their son.
Their total return in that case would be about 12,000,000 percent, a performance that would make even the most celebrated venture capitalists blush. SoftBank’s $20 million bet on Alibaba has returned about 720,000% since 2000, according to calculations by Bloomberg. Sequoia Capital’s WhatsApp investment returned roughly 36,000% by the time Facebook Inc. bought the messaging service for $22 billion in 2014.
“We were fortunate enough that we have lived overseas and we have saved a few pennies so we were able to be an angel investor,” Mike Bezos, a Cuban immigrant who also goes by Miguel, said in Philadelphia. “The rest is history.”
He bought 582,528 shares in February 1995, according to the 1997 prospectus. Five months later, Jackie Bezos bought 847,716 shares. The wider Bezos family held this stock through four trusts at the end of 1999, another filing shows. The Jacklyn Gise Bezos 1996 Revocable Trust held 8.9 million shares, followed by the Miguel A. Bezos 1996 Revocable Trust with 4.8 million shares, while the Bezos Family Trust and the Bezos Generation Skipping Trust held 2.9 million and 675,000, respectively.
Any self-respecting wealth adviser likely would have pressed the family to diversify their holdings given the “heightened consequences of such extreme individual company exposures,” according to Eduardo Gruener, co-founder of Miami-based multi-family office GFG Capital.
Siblings’ Windfall
After applying historic selling patterns and accounting for the disclosed donations, Jackie and Mike Bezos would still control $10 billion of shares, according to an analysis by the Bloomberg Billionaires Index. That’s on top of their son’s $147 billion fortune, which easily makes him the world’s richest person.
Even if they had unwound all of their Amazon holdings at the lowest possible price, they still would have reaped about $100 million.
The filing also suggests a windfall for Jeff Bezos’ siblings Mark and Christina. They each bought 30,000 Amazon shares for $10,000 in 1996. If they haven’t sold any of those shares, their stakes would be worth about $640 million apiece.
The Bezos Family Foundation didn’t respond to email and telephone messages requesting comment. Amazon declined to comment.
Wozniak’s Largesse
With Amazon, Alphabet Inc. and Apple Inc. approaching market values of $1 trillion, the world could have myriad unknown tech billionaires. Only corporate insiders or shareholders with stakes exceeding 5% are required to report their interests. In the case of Apple, that means individuals with positions up to $46.7 billion wouldn’t be required to disclose their holdings.
Apple co-founder Steve Wozniak held a 7.9% stake in 1980, which shrank over time as he sold options at low prices to mid-level employees and gifted shares to those he felt had been shortchanged. His remaining stake is thought to be in the millions rather than billions.
Or take Google parent Alphabet. An early investor was reportedly none other than Jeff Bezos, who put $250,000 of his own money into the internet-search startup in 1998, according to the New Yorker. Those shares, valued at about $280 million at the IPO, would be worth more than $8 billion today.
That pales in comparison to the returns potentially reaped by his parents, who hit the jackpot backing their boy.
“Extraordinary returns don’t come around often” said Gruener, the wealth adviser.“Replace Amazon with nearly any other name in the market and the ending may have turned out as a nightmare.” — Bloomberg

Cayetano hits back at Aquino’s call for transparency on South China Sea issue

By Camille A. Aguinaldo
Foreign Affairs Secretary Alan Peter S. Cayetano on Tuesday, July 31, hit back on former President Benigno S.C. Aquino III on the latter’s call for transparency on the South China Sea issue, saying that the former President and even Vice President Leni G. Robredo were given wrong information on the matter.
“Unfortunately, both former President Aquino and Vice President Leni Robredo are being fed wrong information. It’s very unfortunate that the same small corps who hijacked the foreign policy in the last administration are feeding them information that is simply not true,” he said during a press briefing at the Ninoy Aquino International Airport (NAIA) in Pasay City.
“On the contrary, maybe President Aquino should ask Secretary (Albert F.) Del Rosario: Were you transparent with me?” he added.
Mr. Aquino earlier said the Duterte administration should be transparent with its negotiations with China to allay the concerns of Filipinos on the South China Sea issue.
Sought for comment, Mr. Cayetano said he has offered several government agencies, media outlets, as well as opposition politicians for briefings regarding the administration’s dealings with China. He clarified that there was no secret deals nor meetings with China as all talks with Chinese government officials were all on the record.
“There are no secret deals. We’re working out the issues, the principles are being discussed,” he said, referring to the country’s negotiations with China.

“What’s Einstein definition of stupidity? To keep doing the same thing and expecting a different result… There is more than one strategy.”

He also said his predecessor had incomplete records of information regarding the country’s responses with China’s militarization activities , especially on the removal of Philippine ships in Scarborough shoal back in 2012.
“When I look at the records in DFA, who ordered the Philippines ships to leave Scarborough? How did we leave Scarborough? Do any of you know? Was it really Senator (Antonio F.) Trillanes who said ‘leave or don’t leave?’ Was it really Foreign Secretary Del Rosario who said it? ‘Leave now or follow PNoy or follow this?’” he said.
“So, they did not really complete the records. They did not tell us… If you look on the surface, it looks brave. On the surface, it looks like that: it’s very brave and courageous strategy. But actually it doesn’t produce results,” he added.
He added that Messrs. Aquino and Del Rosario as well as Acting Chief Justice Antonio T. Carpio were imposing to the Duterte administration their previous strategy, which did not produce fishing and safety of life in the seas agreements as well as economic benefits to the country.
“And the problem is their strategy was not working. What’s Einstein definition of stupidity? To keep doing the same thing and expecting a different result… There is more than one strategy,” he said.
In response, Ms. Robredo’s spokesperson Ibarra M. Gutierrez III said the Foreign Secretary may start providing the right information by explaining the latter’s earlier statement regarding the “50 to 100 diplomatic protests” filed by DFA to China on its militarization activities
“Documents, not stories. We will wait for it,” he said in a statement.
Mr. Cayetano headed to Singapore to attend the Association of Southeast Asian Nations (ASEAN) Ministerial Meetings from August 1 to 4. He said he will also hold 12 bilateral meetings to discuss various topics on investments, political and security issues, including the South China Sea issue.
Meetings were scheduled with New Zealand, Papua New Guinea, Russia, Singapore, Australia, China, Timor Leste, Vietnam, India, Norway, Iran, and the United States, the official added.

Maxxis grows PHL footprint, treads into car, SUV segments

By Kap Maceda Aguila
TAIWAN-BASED tire maker Maxxis, distributed in over 170 countries, has been making a mark here in the Philippines through its products for light commercial vehicles, trucks and buses.
Jaybee B. Atanacio, product and sales manager at Maxxis Philippines, told BusinessWorld the brand is “primarily known in the Philippines only for [tires designed for] UV Express and light commercial vehicles.”
“But we want this image to change.”
After selling commercial tires exclusively for 15 years here, Maxxis sets its sights on “a more premium, secondary tier… competing against the likes of Yokohama, Dunlop and Goodyear.” This intent was conveyed with the launch of four tire models for passenger cars and sport-utility vehicles.

HP5 PREMITRA
This product takes its place as the marque’s high-end offering. “It’s a sport touring tire for full-sized sedans and sports cars. We are not locally popular in this category, but we have been in North America and Europe,” averred Mr. Atanacio. The HP5 Premitra promises traction even in high speeds, along with heightened performance on wet and dry roads.
ME3 MECOTRA
On the other end of the price spectrum is this low-rolling-resistance tire designed for “low-displacement [1.5-liters and below]” cars which themselves promise fuel efficiency.
“Compared to competitors. It has full silica. Natural rubber gives better grip and rolling resistance, but it compromises mileage. We add silica to enhance service life,” reported the official, and added that NST, for Nano Science Technology, “effectively binds silica to the tread, and Maxxis is one of only three manufacturers who can do this… and more affordably, too.”
HPM3 BRAVO
A highway terrain tire geared for SUVs, Mr. Atanacio said the HPM3 Bravo offers “comfort, silence, and effectiveness in water dissipation — particularly suited for our local conditions.” This is the Maxxis response to a market clamor for comfortable tires. “Normally, people who look for SUV tires do not look for a good ride, but with the Bravo, we’ve changed the profile so that it’s similar to a passenger car tire, but more durable.”
MT772 RAZR
“There’s a growing market popularity or preference for aggressive-looking off-road tires,” he revealed. “The Razr doesn’t only look the part but is tough as well.” Suited for pickups and SUVs, the model is highlighted by maximum tear resistance, long tread life, and leverages the brand’s expertise in designing and executing tires for mining equipment. Compared to its competitors, this tire is quieter and more durable, according to Maxxis.
AGGRESSIVE STRATEGY
Maxxis is serving notice of its foray into previously uncharted local territory with a big vow to consumers that its products will be “15% cheaper than… direct competitors,” said Mr. Atanacio. “I can feel that the market is ready for us now, and our competitors are actually also lowering their prices.” The company also is set to sustain its velocity. “We are looking at launching an additional four patterns in the next three years,” he continued.
Right now, Maxxis sees the demand in more off road-capable tires (particularly for SUVs), but this is expected to change as Philippine road conditions improve in the next few years. “The kind of asphalt and the kind of roads we have are getting better.”
As for the market, Filipino buyers are becoming more discriminating, with comfort in demand even in truck tires. “Before, they just didn’t care,” said Mr. Atanacio with a laugh. “On the whole, Filipinos are still price buyers though — but if they experience something bad about the tires they bought will never buy that brand again.”
EVOLVING WITH THE TIMES
“People who think Maxxis only copies technology are wrong,” declared the official. “We have research and development facilities in North America, China and Europe to look at and address different usage standards.
“The brand is becoming mature, and we are focused on three market demands. Anyone can just create new technology, but we are after overall performance — not just in one category.
“Designing or making a tire is an engineering compromise. If you make the sidewall stronger, the ride becomes bad; even good tread wear becomes difficult [to achieve]… The bottom line is overall performance while being cognizant of the three primary market considerations: safety, economy, and comfort,” Mr. Atanacio said.

Isuzu D-Max pickup posts economy car-like mileage


A 2018 Isuzu D-Max equipped with a new 1.9-liter diesel engine posted a best mileage figure of 22.59 kilometers per liter during a fuel economy run conducted on July 19.
According to the pickup’s local distributor, Isuzu Philippines Corp. (IPC), the fuel consumption test was held on a 112-kilometer route between Marilao, Bulacan, and Tarlac City, Tarlac. Six identical D-Max pickups, all fitted with Isuzu’s BluePower RZ4E engine, were used for the activity. The mileage results were verified by the Automobile Association of the Philippines, IPC said.
The company noted the fuel economy run formed part of a road trip designed to “highlight the refined amenities” of the D-Max, as well as those of the Isuzu Mu-X SUV that is now also available with the RZ4E engine. The drive started from and ended in Metro Manila after looping around Bauang, La Union — a total distance of around 508 kilometers.
Hajime Koso, president of IPC, said the activity demonstrated people could still enjoy the “pleasures of taking long road trips without having to get anxious over fuel consumption.”
Mr. Koso explained the new-generation RZ4E engine is the product of more than four years of “extensive research,” and is Isuzu’s foray into making low-displacement but high-output engines — the trend in Europe and in Asia. He said the RZ4E, which makes 148 hp and 350 Nm, has been fitted with “over 200 new components.”
A new six-speed automatic transmission with sequential shift mode and a manual transmission with a gearshift indicator can be paired with the engine.
IPC noted a 3.0-liter BluePower diesel engine remains an option for the D-Max and the Mu-X.
It added key features of the pickup include a “car-like interior” in which fitted are an eight-inch touch screen panel for the multimedia system, leather seats, USB ports and numerous storage bins and cup holders, among other items. The truck also has twin LED head lamps with manual leveling controls, LED daytime running lamps, dual SRS air bags, ABS with EBD, brake assist, electronic stability control, traction control, hill-start assist, hill-descent control, and a brake override system.
New colors made available to the current D-Max are Sapphire Blue and Galena Gray. Prices range from P857,000 to P1.670 million.

Mahindra building modern jeepneys for EcoDyip

A NEW transport company has started using Mahindra vehicles as its entry in the government’s Public Utility Vehicle Modernization Program. In a statement Mahindra Philippines said it recently signed an agreement with EcoDyip, Inc. in which the Indian brand is committed to supply 1,000 units of vehicles worth P2 billion. The Mahindra T20 and Supro models will be reconfigured as “modern jeepneys.”
Mahindra Philippines said it had already delivered 100 vehicles to EcoDyip, Inc.
Dennise C. Trajano, managing director of EcoDyip, Inc., said the T20 and Supro modern jeepney “are more than capable in meeting the requirements of the commuting public.”
“Having tested the Mahindra T20 and Supro jeepneys on the road for days, I find them responsive, efficient and have good handling. One advantage worth mentioning is their air-conditioning systems which can provide comfortable cooling even when the units are fully loaded,” Mr. Trajano said.
According to Mahindra Philippines EcoDyip, Inc. plans to hire drivers set to be displaced in the jeepney modernization program and will train them on the technical aspects of the Mahindra models, as well as on safety measures and proper etiquette when dealing with passengers. EcoDyip, Inc. will also introduce a “better payment method with an automated fare collection system,” Mahindra Philippines said.
The company added the T20’s power train and the Supro’s cab and chassis are imported from India, but that their bodies, flooring, roofs, seat material and other customized pieces are fabricated in the Philippines. Jeepneys based on the T20 and Supro all carry the full manufacturer’s warranty.
Mahindra Philippines noted it — together with Columbian Autocar Corp., — has a “modern and fully equipped assembly plant” set in a 10-hectare complex at the Laguna International Industrial Plant, and which can assemble more than 10,000 vehicles a year.

Upgraded Porsche Macan twins with 911, 918 Spyder


THE upgraded Porsche Macan has moved closer to its sports car stable mates.
Porsche on July 25 held in Shanghai the world premiere of the latest version of the Macan, the German brand’s compact SUV that, from its 2014 debut, is focused on the “sport” part of its sport-ute configuration. In its new form, the car wears “numerous details which reflect the DNA” of the Porsche 911 and 918 Spyder sport models, according to Porsche.
It cited in particular the Macan’s lighting system, which is made up of LED headlights (the adaptive Porsche Dynamic Light System Plus is an option), a three-part, three-dimensional LED taillight strip and the four-point brake lights, all of which mimic those fitted to the 911 and 918 Spyder. Along with new light fixtures, the Macan’s front end has been reshaped so it now appears wider while the rear has turned more sloping, evoking the sports cars’ silhouette. New paint jobs — Miami Blue, Mamba Green Metallic, Dolomite Silver Metallic and Crayon — and interior packages ensure the Macan is now more customizable, Porsche said.
It added the latest Macan’s “link to the 911 is consolidated” in the cabin by the optional GT sports steering wheel which features the car’s driving mode switch, plus the Sport Response Button for the Sports Chrono Package.
Another key feature of the new car is the Porsche Communication Management which integrates a rising center console and a full-HD touch screen, measuring 11 inches across, into the redesigned instrument panel. The user interface for the system’s infotainment functions can be personalized, and the Connect Plus module underpins various digital functions and services, such as intelligent voice control and the real-time traffic information. The Here Cloud connection allows access to swarm-based traffic data while the new Offroad Precision App makes it possible to record and analyze off-road driving performance.
Also new to the Macan is the Traffic Jam Assist with an adaptive cruise control function, which partially automates acceleration and braking at speeds up to 60 kph, as well as assists with steering in slow-moving traffic.
Porsche, which bills the Macan as a “sports car in the compact SUV segment,” said it has fine-tuned the model’s chassis to allow for a more “neutral” handling — neither under-steering nor over-steering during cornering — while still being stable and comfortable-riding.
Unchanged in the new Macan are its staggered-size wheels (20 inches in front, 21 inches in the rear, all fitted with freshly developed tires) and the Porsche Traction Management for the car’s all-wheel drive train.
No announcement regarding the new Macan’s engine development has been made yet.

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