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Election outcome

The Duterte administration won big in the midterm elections. Although the full tally still has to be completed, with 94.39% of voters already accounted for, the likelihood is that the opposition will suffer a shutout in the senatorial elections.

The lone opposition candidate who still has a slim chance of landing 12th to earn a Senate seat is Bam Aquino. But he is currently ranked 14th, and he trails Nancy Binay, who currently occupies the 12th position, by about 119,000 votes. In a better position to beat Binay is JV Ejercito who is slightly ahead of Aquino in the ranking.

What can be the reasons why the administration candidates won big and why the opposition lost heavily? Suffice it to say that Rodrigo Duterte and his administration enjoy high trust and performance ratings, based on the surveys of Pulse Asia and Social Weather Stations (SWS).

Even on critical issues that one would have thought the administration is vulnerable — for example, on fighting inflation, foreign policy, and eradicating graft and corruption — it still received positive satisfaction. The SWS national survey in the first quarter of 2019 showed that the administration had a net score of +22 (with 53% satisfied against 31% dissatisfied) with regard to fighting inflation. With respect to defending Philippine sovereignty in the West Philippine Sea, the administration had a net score of +40 ((with 60% satisfied and 20% dissatisfied). On eradicating graft and corruption, the administration’s score was +41.

The conditions simply do not favor the opposition. Optimism is high (+40 as of end 2018, according to SWS); economic fundamentals remain good, even resulting in a credit rating upgrade; economic and social reforms are being put in place (tax reform, removal of quantitative restrictions on rice leading to lower food inflation, universal heath care, ease of doing business, etc.); and poverty has been reduced by six percentage points between 2015 and 2018.

In this light, it would have been most difficult for the opposition parties and followers to take the stance of “extreme opposition.” It goes without saying that victory (or defeat) is a function not only of the victor’s strength but also of the loser’s weaknesses. It is high time the opposition reexamined strategy and tactics. A friend of mine in the opposition, a social democrat, has this to say: “Saul Alinksky’s Principle No. 1: Start where the people are.”

The appropriate forms of struggle and slogans are defined by prevailing conditions. Hence during unfavorable conditions, the suitable strategy and tactics are mainly defensive, not offensive.

To illustrate, the Communist Party of the Philippines and the National Democratic Front (CPP-NDF) raised demands during the peace talks that were impossible to attain — having a coalition government and releasing of all political prisoners. Come to think of it, Duterte appointed several personalities from the Left to Cabinet positions, and released the senior leaders of the CPP. Yet, the talks collapsed in the middle of the CPP-NDF’s aggressive posturing. A hostile military has taken advantage of the cancellation of the peace talks to launch a brutal attack that targets the Left’s legal and political infrastructure.

On the other hand, the Moro Islamic Liberation Front (MILF) has successfully negotiated peace with the Philippine government and has obtained the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). BARMM, from the Moros’ viewpoint, still falls short of their aspiration for independence, but for them, it is still a huge step forward. The MILF has achieved its goal by adopting a subdued strategy.

The so-called Yellow opposition, on the other hand, engaged the Duterte administration in a sharply polarized struggle. Thus, even in relation to a critical reform like the comprehensive tax reform (which on paper was part of the reform agenda of the previous Ninoy Aquino administration) the Liberal Party and its allies opted to block it. The ground for opposing tax reform was mainly partisan, not economic or technical. The opposition mistakenly thought that the controversial tax reform would spell political defeat for Duterte. As the SWS survey showed, even on controversial issues like fighting inflation (the opposition attributed the elevated inflation rate last year to tax reform, when in fact it was principally brought about by the rice crisis), the Duterte administration received a net positive rating.

A couple of lessons stand out here. First, reformists, even if they belong to the opposition, should take advantage of any opening (in this case, a popular administration) to obtain crucial and hard reforms. The struggle for reforms must be pursued relentlessly whatever the political circumstances, for ultimately the people benefit from such reforms. How to win the reforms will vary depending on concrete conditions, but the reform struggle cannot take a pause just because we hate those in power.

Pursuing reforms despite being in the opposition does not in any way suggest capitulation. The opposition should continue resisting policies like human rights violations that run counter to our values.

Second, politicians, who fear losing votes, should not worry either about sponsoring or championing politically difficult reforms. Senators Cynthia Villar and Sonny Angara have been reelected to the Senate in convincing fashion despite being the sponsors of rice tariffication and comprehensive tax reform, respectively. Although being endorsed by Duterte, both of them would have still won on the basis of their own attributes.

The myth that national politicians will be defeated in national elections by sponsoring taxes has been shattered. Senator Ralph Recto once lost in the Senate race, and this was blamed on his being the sponsor of the law that increased the value-added tax (VAT) during the questioned presidency of Gloria Arroyo. This is a mistaken view. Recto lost not because of his VAT sponsorship but because of his association with an unpopular, bad president. (Arroyo’s other candidates, not only Recto, were defeated in the midterm elections.)

This lesson is not lost on Angara and Villar. To be sure, Senator Angara has gained much confidence in light of his electoral victory, which will lead him to champion the pending bills to increase substantially the excise taxes on tobacco and alcohol. Senator Villar is expected to follow through the reform on rice tariffication. The challenge is to provide the credible support for the rice farmers and to modernize Philippine agriculture. She has shown “skin in the game,” a quality that makes a heavyweight politician.

 

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

www.aer.ph

A steamy ‘Meet-me-room’

It may summon lurid thoughts of a clandestine tryst at some secluded nest, where forbidden lovers unleash steamy passion. It must be very secret — imagine if the wronged wife (or husband) discovered and witnessed the unfaithfulness. “In flagrante delicto,” meaning seeing the crime in flagrant commission, would justify killing of the illicit lovers by the betrayed. Possibly a lugubrious picture of a “meet-me-room,” in some prurient minds, for want of any connectivity of the word with some staid common usage.

But “meet-me-room” was ceremoniously ushered into the lingua franca of the Filipino after the mid-term elections just last week. Forgive the risqué pun, but it has still to do with “connectivity”, but in the computer-speak of the automated election system (AES) that has ruled the democratic votation to install leaders of the country. “A meet-me-room (MMR) is the space in a colocation data center where carriers and clients interconnect or cross-connect with one another” (digitalrealty.com Aug 1, 2014). The National Citizen’s Movement for Free Elections (NAMFREL) asked the Commission on Elections (Comelec) to, among others, fully disclose and explain the transmission router or the “meet-me-room” network set up, how it operates, and who are behind its operations (GMA News May 18, 2019).

The seven-hour gap between the first two transmissions of the poll results to the transparency server made the election “losers” and the public anxious. Sen. Francis Pangilinan, president of the opposition Liberal Party, said the Comelec should come up with a clear explanation for what had happened to the transparency server. “The public’s concerns and doubts about the true results of the election just grew because of your silence. Are you (the Comelec) cooking up something that the public must not know?” Pangilinan asked (Philippine Daily Inquirer May 15, 2019).

How difficult it is to believe that not one of the opposition Liberal Party’s “Otso Diretso” candidates were in the “magic 12” (winning candidates) for Senator in the preliminary canvass, while ranks 1 – 12 were all Duterte political allies or with the administration-friendly majority blocs at the Senate and House of Representatives. 12 – 0? “The midterm elections show that the Filipino electorate wants a Senate supportive of the President’s agenda,” Presidential spokesman Salvador Panelo said (ABS-CBN News May 14, 2019).

Even in the May 14, 1984 Regular Batasang Pambansa election the dictator Ferdinand Marcos did not claim such a clean sweep. His KBL party won 62.30% of the 183 Parliament seats, Jose Laurel Jr.’s Unido coalition, 33.33%, and the Nacionalista Party and independents 4.37% of total (Julio Teehankee. “Electoral Politics in the Philippines” (PDF). quezon.ph.). It was known there was manipulation of the results of voting, but “disente lang” (not too brazen). It was more difficult to tamper with manual voting. In the present automated election system, would the “Duterte magic”, or any incumbent leader’s “magic” lean on computer magic?

“On top of the suspicious 7-hour delay, the number of election returns processed was already 92.89% as of 5:20 a.m. Tuesday, but suddenly went down to 49.76% around 6:21 a.m. same morning. Election Commissioner Marlon Casquejo said this was merely a “java app error” that affected all media networks and organizations getting data from the transparency server. “It was corrected again by just turning it off and on, or reset.” He explained away the 7-hour delay as “a bottleneck” in the transparency server and the data being sent to media networks, overwhelmed by the deluge of transmitted results (inquirer.net May 15, 2019).

Who can do things with the servers? In “Future Perfect”, Tony Velasquez’ technology talk show, he interviewed Dr. Nelson Celis, spokesperson of Automated Election System Watch (AES Watch) and Mr. Nice Quilantang of Kaspersky Lab on glitches in the May 13 fully automated midterm elections (ABS-CBN May 15 2019). Celis said the “meet-me-room” was an unauthorized intervention that transgressed the law (Omnibus Election Code/ Republic Act No. 9369, which amended the Automated Election Law). These MMRs host undeclared servers and intercept data from the vote counting machines to the Commission on Election servers, he said. The VCMs should be directly sending election returns direct to the municipal board of canvassers. He added that as early as March, the Senate President in two privilege speeches identified irregularities, one of which is the queuing server, and the early transmissions” (Ibid.).

In the same TV discussion, Quilantang pointed out that the File Transport Photo (FTP) system is not good for large volume data transfer (the “bottleneck”?) and is vulnerable — there is urgent need to secure (encryption) data being moved (Ibid.). In other words, there has to be accountability and responsibility for such data being moved (or changed?) and a record (log) of what was done. Celis seemed particularly agitated that the transmission logs were immediately deleted (though there is nothing in the law that prohibits this), when in regular IT practice, the audit logs are kept for 3-5 years. Imagine if banks and their branches junked these very precious transaction records! (Ibid.).

In a separate personal interview with a “retired” AES advocate (an IT expert), he reinforced the concerns of Celis and Quilantang, particularly on the audit trail of movements and changes if any, between and among servers, electronically collocated in that “meet-me-room”. The most important thing is the “private digital key”, he said, which is unique to each election official/inspector/anyone who has access, that positively identifies where the transmission is coming from, and ensures that such transmission is not being altered. There is no such private digital key to keep the Comelec honest, as of now. But the double-trouble is that the present system allows and accepts transmissions from anonymous machines which the servers automatically recognize. There is loose control among the central server, the various unrestricted servers, and the “Transparency server”.

So, what transparency are we talking about? From the start, concerned citizens knowledgeable with IT have been harping on the controls and accountabilities in electronic voting, such that an open row erupted between these election watchdogs and the Comelec Commissioner then, Sixto Brillantes Jr. The AES Watch (Dr. Celis et al.) asked the Joint Congressional Oversight Committee on AES to secure all PCOS machines, CCS software, ballot boxes, and other election paraphernalia needed for auditing the (2013) mid-term election system and subjecting it to forensics scrutiny. “Why were the major safeguards disregarded and removed –independent source code review, installation of the industry prescribed digital signatures, voter verification and the WORM (write-once-read many) CF cards up to the unconscionable expenses on the unbundled election paraphernalia, warehousing and the PCOS purchase itself?” the AES Watch asked (inquirer.net May 25, 2013).

Namfrel National Chairman Augusto “Gus” Lagman, a former Comelec commissioner and a political analyst, said many countries have discarded automated vote-counting because the process is not transparent and is not observable by the voters. He said the integrity of the midterm elections would not have been doubted had the Comelec not automated the counting of votes at the precincts (manilatimes.net May 19, 2019). Lagman suggested that automation could be employed while the votes are being counted manually, or, at least, immediately after. That way, the transmission of the results from precincts to canvassing points can be done electronically and the three levels of canvassing could be fully automated (Ibid.).

And there should be no more those mysterious, steamy “meet-me-rooms” where a lot of hanky-panky goes on.

 

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

Minimalist travel

By Tony Samson

IN TERMS of packing efficiency for travel, no category of tourists beats the backpackers. These travelers seem to hew to the doctrine of minimalism, that less is more. They are able to pack clothes and essential needs in luggage strapped on their backs. Thus are they considered the quintessence of economy and efficiency. Suitcase on wheels? How do you drag this through potholed streets in search of cheap rooms or perch it on a park bench?

There are principles backpackers can teach even upscale travelers who stay in hotels with pools and expensive laundry service in how to travel light.

Forget just-in-case attire. What if you are invited to a formal hometown reunion in San Diego — what do you wear? How probable is such a predicament? Such over-preparedness is bound to bulk up traveling bags. Sure, suitcases are now lighter and easy to push around with four wheels in any direction. But packing them to bulging is sure to require a fitness regime to bulk up upper body strength to hoist them out of carousels or into undercarriages of buses.

Recycling allows smaller quantities. Who ever made the rule that clothes should only be worn once and then replaced? Attire is designed to be worn repeatedly, especially if they are plain in color and design. Caution: satyrs chasing nymphs through the woods as a design for shirts will look too obvious at the buffet breakfast three days in a row. The satyrs may even start to look tired.

Consider laundry. There are laundromats to be found in major cities, or certain rental rooms that include washing machines. There is too the bathtub at the hotel. Underwear can be washed while worn in the bathing process. Laundering apparel reduces the number of clothes to pack. Be sure to dry them off first.

Of course, weather determines the volume of packing needed. Summer allows for lighter clothes. But even winter does not require a different sweater for every day of the week. Layering can may make one look like a gift-wrapped puppet but combinations can extend the utility of the various pieces.

The forgetful packer also travels light. She justifies shopping as a way to offset amnesia. This careless approach can be costly requiring the purchases of toiletries and varied missed items like trousers. It promotes the illusion of a spacious suitcase, until she packs for the return trip.

The word for baggage in Latin is “impedimenta” which pertained to all the paraphernalia of food, clothing, wash basins, cooking pans, and even traveling companions following the Roman army going to war. It’s not surprising that this Latin term for baggage became the English word for a burden or hurdle. Guerrilla warfare involves minimal logistics, supply chains and the weight of luggage to speed up the attack, or retreat.

Companies that don’t have much legacy baggage can be first to market. They are called “nimble”, determined to focus on fewer goals and pounce on new technology, unburdened by past investments and supplier commitments.

For TV interviews, the guest, who comes unattended by lawyers and resource persons, projects competence and mastery of his subject. The very absence of thick folders and visual aids demonstrates familiarity with details that can be organized in few and simple declarative sentences.

If traveling light is a virtue, what about dispensing with impedimenta altogether and just live off the land (or relatives) and be open to getting what one needs or can rent from the place to be visited? This minimalist option of choosing not to be weighed down by concerns and extra boots may be the future for travel. Instead of packing, what if the necessities (razors, slippers, paper underwear, and umbrellas) are all provided by the hotel, allowing one to board trains, boats, planes with just a small carry-on bag for a few clothes?

We travel through life even when not needing passports. So our impedimenta of imagined slights, prejudices, and artificial limits of what we can achieve should be disposed of, as they are sure to slow us down. Even memories, especially bad and recurring ones, need to be jettisoned to lighten the mental baggage.

Traveling minimally can be liberating. It allows faster moves and the ability to carry only what you really need, even for rude awakenings. Just go back to sleep.

 

Tony Samson is Chairman and CEO, TOUCH xda

ar.samson@yahoo.com

Cigarette industry targeted for death by sin tax

THE PROPOSED INCREASE in sin tax from the current P35 to P60 per pack is intended to “kill” the Philippine cigarette industry, according to Finance Secretary Carlos G. Dominguez III.

“That’s what we want, to kill it…There will be a lot of other revenue sources. Besides, our economy is growing, so we will be able to fund it.” Mr. Dominguez told reporters in an ambush interview on Friday.

“You want to make it so that the increase in price will be bigger than the increase in income. Because what happens now is the increase in the income of people overtook ’yung maliit na increase (the small increase) from P30 to P32 to P35. Kayang kaya na nila ’yun kasi ’yung increase nila ng income is also high (They can handle that because the increase in income is also high),” Mr. Dominguez said.

Mr. Dominguez said that tobacco farmers should not be planting crops that are bad for health, noting that land planted to tobacco is also good for other crops.

“If you’re not producing a good product you should not do it. …It’s actually good land. It can be used for many other things — corn, sorghum, fruit trees — those are better products,” Mr. Dominguez said.

According to Mr. Dominguez, the Department of Finance (DoF) will work with the top tobacco-producing regions to allot funds for crop diversification.

“We will work with the four tobacco-producing provincial local government units (LGUs) who collectively receive about P15 billion annually as their share of the tobacco tax, to allocate funds for crop diversification,” Mr. Dominguez said in a mobile message to reporters on Saturday.

The DoF and the Department of Health, together with Senator Emmanuel D. Pacquiao, launched a campaign against the use of cigarettes, by increasing the sin tax which will be used to fund Universal Health Care (UHC), which will require an estimate of P1.44 trillion combined from 2020 to 2024.

Mr. Pacquiao wrote Senate Bill 1599 which seeks to raise the sin tax to P60 per cigarette pack in the first year of implementation and an additional 9% per year thereafter.

Early this month, LT Group, Inc (LTG) President and Chief Operating Officer Michael G. Tan, said that “the hikes should be moderate” on cigarettes. LTG is the parent company of Fortune Tobacco Corp.

PMFTC, Inc, a leading cigarette firm in the country, is a joint venture between Philip Morris Manufacturing, Inc and Fortune Tobacco Corp.

“The tobacco business will remain as the main source of LTG’s earnings. PMFTC will continue to be vigilant in the fight against illicit trade and continue to work with the government,” Mr. Tan said.

Asked to comment, JTI Philippines, Inc Managing Director Manos Koukourakis said that before implementing a tax hike, the government should consider the farmers, retailers, employees, and individuals who indirectly work for the tobacco industry, suppliers, and all those who benefit from the income generated by tobacco consumption.

“All of them will be negatively affected by a tax hike. The smugglers though will benefit because the higher the tax, the higher the benefit due to tax avoidance,” Mr. Koukourakis said.

Meanwhile, Mr. Dominguez said that the government has yet to review whether to regulate heat-not-burn tobacco products which LTG hopes to sell in the country.

“At the moment, there are very few regulations regulating the importations of these products so we are going to review it to see if in fact they are enough to keep them out or to start regulating them. That’s why the DoF and the DoH really have to study this because there is a lot of science we have to understand,” Mr. Dominguez said. — Reicelene Joy N. Ignacio

Invitations issued to bid for last rail deals in Malolos-Clark line

THE Department of Transportation (DoTr) is seeking bidders for the remaining components of the Malolos-Clark railway, which makes up part of the P777.55-billion North-South Commuter Railway (NSCR) project.

The DoTr posted two invitations to bid in a newspaper Sunday: two contracts to build an underground station and a depot for the Malolos-Clark railway; and one contract to build a station for the train line’s 1.9-kilometer extension to Blumentritt.

The auction for the two remaining contracts of the 51.2-kilometer Malolos-Clark railway cover Package CP N-04, or the construction of the railway viaduct, a steel bridge and underground station at the Clark International Airport; and Package CP N-05, or the construction of its depot.

“The Bidding Documents have been prepared separately for each and shall be bid as separate contracts. However, if the bidder wishes to propose a multi-package discount, he may propose/offer a discount for the combination of the two packages,” the DoTr said in the invitation.

A pre-bid conference will be held for this auction on May 30, and the deadline of submission of bids is scheduled on Aug. 13.

For the Blumentritt extension auction, the contract is for Package CP S-01, or the construction of 1.12-kilometer railway viaduct and elevated station at Blumentritt. The pre-bid conference will be on June 3, and the deadline for submission of bids on Aug. 8.

The Malolos-Clark railway is a $2.75-billion project funded by a loan from the Asian Development Bank (ADB). The bidding for the first three contracts of the main line was started early this year, with 21 companies from seven ADB member countries were reported to have shown interest in the project.

The Malolos-Clark railway, alternatively referred to as the Philippine National Railway (PNR) Clark Phase 2, forms part of the 147-kilometer NSCR project, the other segments being the 56-kilometer line from Calamba to Tutuban; and the 38-kilometer line from Tutuban to Malolos, or PNR Clark Phase 1.

The whole NSCR project is to be financed by loans from the ADB and the Japan International Cooperation Agency (JICA).

Construction of a portion of the Tutuban-Malolos railway will start today, after the signing of contract to the tandem of DMCI Holdings, Inc. and Japanese firm Taisei Corp.

The other portion of the Tutuban-Malolos train line started construction in February, having been awarded to Sumitomo Mitsui Construction Co., Ltd. — Denise A. Valdez

Davao designers to bring Mindanao indigenous clothing to London’s Victoria and Albert Museum

By Maya M. Padillo
Correspondent

DAVAO CITY — The Davao Fashion Design Council (DFDC) has been invited to supply traditional pieces by Mindanao’s indigenous groups to the Victoria and Albert Museum (V&A) in London, home of one of the largest collections of art and design pieces.

DFDC President Dodjie L. Batu said they were contacted by the British Council about adding to the V&A’s Philippine creations, which include a terno by designer Salvacion Lim “Slim” Higgins.

“Considering that this is the biggest museum in London, we are really grateful that the DFDC will be able to showcase Davao Region,” Mr. Batu said in an interview.

Davao, specifically the regional center Davao City, is home to 11 indigenous peoples (IPs) that come from different parts of Mindanao.

Mr. Batu said the organization is now working with different local government units to identify which tribes will be featured and avoid duplication of designs.

The DFDC is planning to bring the pieces by September, during which it is also hoping to stage a fashion show for the Filipino community in London.

In the meantime, the DFDC is holding the annual Fashion Weekend Davao on May 24 to 26 at the Ayala Abreeza Mall.

This year, corresponding with the National Heritage celebration, FWD will highlight the value of diversity.

“This is one opportunity to connect Davao and appreciate that we have rich products and designs. We have this collaboration with IP communities and designers and this is the best opportunity for Davao to have a glimpse of what we’ve been bringing out from the city,” said Emi Alexander L. Englis, DFDC secretary.

Ruby B. Ochoa, Abreeza Mall marketing manager, said the partnership with DFDC is part of the company’s support for local crafts and culture.

“As a mall in Davao, we would like to give an opportunity to be the venue to make their designs accessible… if you are exposed here it is easier for you to introduce your products,” Ms. Ochoa said.

This year’s FWD will again have the “Stellar: Mindanao Heritage Fashion Designers Competition,” which puts the spotlight on designer-entrepreneur start-ups.

Wilson N. Limon, Jr., the first winner of the Stellar Young Designers Competition in 2016, said the competition continues to serve as a platform for indigenous communities and their artisans, along with the new generation of designers, in rediscovering the potential of mainstreaming their material culture and traditions.

“With Stellar… they will showcase ready-to-wear garments,” Mr. Limon said, adding that winning the competition opened opportunities for him, including participation in the Manila FAME and connecting to the market in the capital.

40% foreign-owned builders are now eligible for infrastructure projects

THE Government Procurement Policy Board (GPPB) has approved a resolution raising the foreign equity requirement for infrastructure projects to 40% from the current 25%.

Under Resolution No. 06-2019, the GPPB adopted Executive Order No. 65 S. 2018, which provided that contractors with 40% foreign equity may be awarded contracts for the construction and repair of locally funded public works.

The Office of the Deputy Executive Secretary for General Administration (ODESGA) said that the resolution, dated March 8, intends to increase the foreign equity cap to “ease restrictions on foreign participation in certain investment areas or activities.”

President Rodrigo R. Duterte on Oct. 2018 issued EO No. 65, promulgating the 11th Foreign Investment Negative List (FINL), which identifies industries reserved for Filipino-owned companies and those open to foreign entities.

The Resolution amends Republic Act No. 9184, or the “Government Procurement Reform Act,” which required partnerships, corporations or joint ventures, engaged in infrastructure projects to at least have a 75% domestic interest, outstanding capital stock or ownership.

The 75% threshold was also contained in the 79-year-old Commonwealth Act No. 541, which provides that infrastructure contracts should be awarded to domestic entities.

In particular, the Resolution amends the 2016 revised implementing rules and regulation of RA 9184 by lowering the required Filipino ownership to 60% from the current 75%.

Sections 23.4.2.1 (b), (c), and (e) will now allow partnerships, corporations and joint ventures “(in) which at least 60%” of the interest or outstanding capital stock belongs to citizens of the Philippines.

It provided also that contractors with more than 40% ownership may still be awarded projects in certain cases. Section 23.4.2.1 (e) reads in part that joint ventures in which “Filipino ownership or interest is less than 60% may be eligible where the structures to be build require application of techniques and/or technologies which are not adequately possessed by a person/entity” owned by Filipinos. — Charmaine A. Tadalan

Risk and cybersecurity for critical infrastructure

When we talk about cybersecurity, we usually think of information technology systems that manage and access data. But there’s another side of technology that is often overlooked by enterprise security processes — the industrial control systems that handle physical processes through monitoring or direct control, such as valves, pumps and similar systems that have a physical “switching” function. The reason for this is that most of these systems have traditionally been isolated from corporate information networks, operated separately as they have functions outside of processing data — such as regulating power or water flow for utilities companies, the control network of a train system, or medical scanning equipment in a health care entity.

However, as business operations and processes become more complex and data-driven, there has been an increasing need to connect industrial control systems to corporate information networks in order to provide access to vital or relevant information. One example is how power companies are transitioning to digital metering to promote more accurate power quality monitoring and reporting. These systems will need to be connected to the power company’s data systems to link to customer data and information.

Because of this growing interdependency between IT systems and industrial control systems, businesses will need to revisit how they understand cybersecurity within these types of operational technologies. The government has recognized this growing problem and in 2017, through a Department of Information and Communications Technology memo, introduced guidance on how to secure “critical infrastructure” i.e. banking and finance, power and utilities, transportation, health care, telecommunications, and similar industries that are vital to public health, safety or well-being.

Considering that these systems are linked to real physical systems, organizations will need to find ways to seamlessly integrate these systems while ensuring physical and logical security.

INTERCONNECTION CHALLENGES
The rapid deployment of digital technologies and web-enabled devices brings many advantages, but also increases cybersecurity risks. Because industrial control systems are increasingly being linked to broader IT systems, cyber attacks have more potential to breach customer and employee privacy and incur regulatory action. This can even disrupt critical infrastructure operations and put lives at risk. Every new device connected is one more device that can be compromised by a potential attacker.

In 2017, WannaCry ransomware became a wakeup call when it hit critical infrastructure, impacting over 10,000 organizations in over 150 countries, including those in the health care industry like the UK’s National Health Service. Although there is no evidence that any patients died directly from the attack, thousands of hospital computers were made unavailable, forcing doctors to physically transport lab results by hand and cancel at least 20,000 patient appointments.

In the same year, the NotPetya ransomware attack struck at numerous companies including Maersk and Mondelez, which cost them an estimated $300 million and $100 million, respectively. Overall, the attack did an estimated $10 billion in total damage. Attacks can also come from unexpected directions, such as the instance when US retailer chain Target was hacked through its heating, ventilation, and air-conditioning (HVAC) systems.

Companies that are interconnecting industrial control systems need to understand and manage these threats as not just a significant risk, but potentially a public safety concern. Industrial control systems will now need to be integrated into overall corporate IT and risk management, instead of being managed in silos.

In this broader risk landscape, companies need to consider that:

• A successful attack is inevitable — it is just a matter of when and how much. Organizations get lulled into thinking that they can deploy enough solutions or spend enough money to protect themselves. Organizations will have to live with managing the risk, and not trying to fully eliminate it. Knowing how to react and having the resilience to withstand a cyber attack is the best strategy.

• Interconnection will happen whether organizations like it or not. Vendors recognize that interconnectivity for industrial systems is a wave they have to ride and features for such are already being embedded in the systems that organizations are purchasing. It must be recognized that these features are present and have to be addressed from a policy level.

WHAT ENTERPRISES CAN DO TO HELP PREEMPT CYBER ATTACKS
There are some actions that companies can take to help manage their risks in the face of today’s emerging cybersecurity threats. In the short term, companies should ensure that their security monitoring programs cover everything that it needs to cover. Most security monitoring purchases are limited to corporate information systems. Boards should ask their security departments whether their companies’ current attack detection capabilities extend to industrial control systems.

Since interconnectivity is inevitable, organizations have to extend cybersecurity practices and adopt them more diligently when it comes to industrial control systems. Such practices include implementing standard security baselines, supported by effective incident response plans.

LOOKING AHEAD
Enterprises identified as part of the country’s critical infrastructure need to take steps to “future-proof” their business. This includes developing more agile and resilient responses to the disruptions being brought about by technology, evolving regulations and compliance challenges across their industry. Organizations within the scope of critical infrastructure need to accept that regulation over cybersecurity controls and breach reporting will become part of their businesses. Investing in cybersecurity systems needs to be considered as part of the cost of doing business.

On the other side of the coin, investment in cybersecurity is an expense that most organizations will not be able to recover directly through traditional return-on-investment models. This is why governments should consider awarding tangible incentives to encourage cybersecurity spending and not just award beyond mere seal of approval from government agencies. However, given the significant risks and threats posed by cyber attacks, can any company actually afford not to invest in cybersecurity?

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of EY or SGV & Co.

 

Carlo Kristle G. Dimarucut is an Advisory Senior Director of SGV & Co.

Duterte mum on hospitalization rumors

By Arjay L. Balinbin
Reporter

PRESIDENT Rodrigo R. Duterte on Sunday would not confirm or deny rumors that he was confined at the Cardinal Santos Medical Center in San Juan City over the weekend.

“The President is in his residence at the Palace signing papers. I just talked to him, he is neither confirming nor denying that he went to the hospital, Presidential Spokesperson Salvador S. Panelo said in a statement.”

Mr. Panelo also said, nevertheless: “There is no truth to the rumor circulating that President Rodrigo Roa Duterte is confined in Cardinal Santos Medical Center in San Juan.”

For his part, senator-elect and presidential special assistant Christopher Lawrence T. Go forwarded to reporters via Viber four photos showing the President reading the newspapers at the Bahay ng Pagbabago (formerly Bahay Pangarap) in the Presidential Security Group compound across the Pasig River and Malacañang.

And Cielito “Honeylet” S. Avanceña, Mr. Duterte’s common-law wife, told reporters in a phone message: “I dare tell you guys to check all the rooms in Cardinal.”

Mr.Duterte’s health has been subject to public speculation since last year. On July 22, before his third State of the Nation Address, the President was reported visiting a hospital. But the Palace said it was only for a regular medical examination.

In February this year, rumors about the President’s death circulated online. “For those who believe in the news that I passed away, then I request of you, please pray for me, for the eternal repose of my soul. Thank you,” he said in a video.

Mr. Panelo has said the Palace is not obliged to release a medical bulletin because the President, as the Constitution requires, has “no serious illness.”

In his speech in Pasay City last month, Mr. Duterte admitted that he gets routine blood tests.

“I’m 74 years old, I do not want to die of TB. I do not want to die of lung cancer. As a matter of fact, I got — I acquired Buerger’s disease from smoking. That is why my doctor is here. She gets my blood. Was it… Ah see? Almost every other day,” he told his audience at the opening ceremony of the 7th Union Asia-Pacific Regional Conference in Pasay City on April 23.

“It’s about Buerger’s disease. But I have stopped smoking. When I became mayor in Davao City, I stopped smoking and said it cannot be done, because Filipinos, you know…. And I said, if I catch you smoking in public, you will just have to eat your cigarette. Choose. I’ll blow your balls out or you eat your cigarette,” he said.

LRTA to investigate train collision

By Denise A. Valdez
Reporter

THE Light Rail Transit Authority (LRTA) said it is forming a team to investigate the collision on Saturday evening of two trains on the Light Rail Transit-Line 2 (LRT-2), an accident in which more than 30 were injured.

In a joint statement with the Department of Transportation (DoTr) Sunday, the LRTA said Administrator Reynaldo I. Berroya has ordered the formation of a fact-finding committee that will study the cause of the collision.

“The (DoTr) and (LRTA) offer our sincerest apologies to all passengers affected by (Saturday’s) incident at the LRT-2 between Cubao and Anonas Stations… The DoTr and LRTA assure the public that we are taking this incident very seriously, and are exerting all efforts to prevent this kind of incident from happening again,” the statement went.

A total of 30 passengers and four LRT-2 personnel were injured after a Santolan Station-bound train collided with a parked train on the same line between Cubao and Anonas Stations.

DoTr Assistant Secretary for Communications Goddes Hope O. Libiran explained a defective train had been parked in a pocket track — or the portion of the LRT-2 railway at the side or at the center near a station — since Saturday afternoon, when it suddenly moved to enter the eastbound track going to Cubao.

LRTA Communications Head Evelyn Janeo said in a phone call the driver inside the defective train had to jump out as the train was “beyond his control.”

When the train moving on the eastbound track, the driver of the approaching train which was carrying passengers was advised to go on full stop. But because the defective train was still moving, it eventually collided with the approaching train. “For unknown reasons nag-move yung train, dire-diretso siya hanggang sa mabangga niya ‘yung kasalubong niya, which is unusual din,” Ms. Janeo said, explaining that accident.

She said the fact-finding committee will release a report at the soonest time possible. Meanwhile, LRT-2 operations are back to normal.

The LRT-2 has eight trains running daily, including the two that crashed Saturday. The LRTA is targeting their repair as of this weekend to bring them back to operation within the week.

UNICEF to Congress: Support Juvenile Justice and Welfare Act

THE United Nations Children’s Fund (UNICEF) in a statement on Sunday called on Congress to support the full implementation of the Juvenile Justice and Welfare Act, amid the Senate’s planned debate Monday to lower the minimum age of criminal responsibility.

“Do not lower the minimum age of criminal responsibility. Congress must support the full implementation of the Juvenile Justice and Welfare Act,” UNICEF said in a statement.

This comes ahead of scheduled plenary debates on Senate Bill No. 2198, which proposes to lower the minimum age of criminal responsibility to 12 years old from the current 15 years old.

The Senate Bill is currently pending second reading and is among the priorities of the chamber during the three-week resumption.

The House of Representatives, for its part, approved on final reading its counterpart measure, House Bill No. 8858, last January.

The 17th Congress is set to resume sessions on Monday after a three-month break during the election campaign. It is set to officially close on June 7.

The UNICEF cited, among other laws, RA No. 9344 or the Juvenile Justice and Welfare Act of 2006, as being consistent with the principles of the United Nations Convention on the Rights of the Child.

It also argued that children in conflict with the law must be rehabilitated and reintegrated to society, instead of subjecting them to penalties and detention.

“The law makes it clear — without a doubt — that there is a need for a separate juvenile justice system where detention is the last resort,” UNICEF also said.

“The proper implementation of the (the Juvenile Justice and Welfare Act) has led to many success stories proving that children in conflict with the law can be rehabilitated without…imprisonment or detention.” — Charmaine A. Tadalan

Senate to tackle priority bills as 17th Congress resumes in 3-week schedule

THE House of Representatives is set to discuss pending local and national bills in the next three weeks as regular sessions resume Monday.

“All pending bills for approval, either local bills or bills of national significance, (are) a priority. And action will depend on the presence of a quorum,” said Majority Leader Fredenil H. Castro of the 2nd district of Capiz in a phone message.

In her phone message when sought for comment, House Ways and Means committee chairperson and Nueva Ecija (1st district) Rep. Estrellita B. Suansing said, “We don’t have pending…priority bills. We are waiting for the Bicam (after) the bills…passed and pending in the Senate.”

Senators on Monday will hold a caucus to discuss the chamber’s “legislative priority,” Senate President Vicente C. Sotto III said in a phone message.

Mr. Sotto said among the priority bills are amendments to the Public Service Act, as being monitored by businessmen, and to the Human Security Act as well as the proposed Medical Scholarship Act.

Senate Bill No. 1754 will amend Commonwealth Act No. 146 or the 82-year-old Public Service Act, by providing a clearer definition of public services, which had been used interchangeably with public utilities such as electricity and waterworks.

Also among the priorities are the Budget Reform Act, Rightsizing the National Government Act, the Salary Standardization Law, the bill establishing the Mindanao Railways Authority, and Reformation of Children in Conflict with the Law, which are up for second reading. — Vince Angelo C. Ferreras and Charmaine A. Tadalan

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