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Budget saga nearing conclusion; bill may be with Palace next week

By Charmaine A. Tadalan
Reporter
THE House of Representatives and the Senate plan to transmit the P3.757-trillion national budget to the Office of the President this week, as agreed during a Monday meeting intended to resolve the budget impasse.
“That’s the common agenda, that’s the bilateral objective — to have this 2019 National Budget sent to Malacañang for the President’s signature, the soonest possible time without any further delay,” Albay-1st district Rep. Edcel C. Lagman told reporters in a chance interview after the meeting.
“The dialogue is in progress. We’re going to meet again tomorrow night at 7:00 p.m. The Senate panel will have to talk with the Senate President. Hopefully, by tomorrow night, we can resolve the impasse. As long as we’re talking there’s light at the end of the tunnel,” he added, noting Senate President Vicente C. Sotto III was not at the meeting.
In a “last-ditch effort” to break the deadlock, the House on March 20 “physically retrieved” the printed copies of the national budget, signed by Speaker Gloria Macapagal-Arroyo, which were transmitted to the Senate on March 11.
House Appropriations Committee chair Rolando G. Andaya, Jr. of the 1st district of Camarines Sur said aside from agreeing to do away with a reenacted budget, the House contingent also explained the budget process to the Senate.
“There are no more contentious points. We had a very lively conversation. We were able to explain both our sides in a very conducive manner for understanding at hopefully, maybe tomorrow, we’ll be able to come to an agreement,” Mr. Andaya said in a chance interview on Monday.
On the issue of lump sum appropriations, he said: “We explained to each other the history of what we did. There was some re-visiting of practices (from similar situations) in 1987,” he said.
The lump sums underwent a process of “itemization” by members of the House after the bicameral conference committee ratified the document, which became a point of contention between both chambers. The Senate is insisting on the version agreed by its representatives in bicameral session, while the House claims the itemization of lump sums minimizes corruption.
Also present during the meeting were San Juan Rep. Ronaldo B. Zamora and Senators Panfilo M. Lacson and Loren B. Legarda. The latter chairs the Finance committee. Mr. Andaya noted that Mr. Lagman and Mr. Zamora were chosen for the chamber’s three-man team for their experience in budget legislation.
He said the panel hopes to transmit the budget to President Rodrigo R. Duterte “before the 29th.”
The Executive branch, meanwhile, was also represented at the meeting by the Department of Budget and Management. “We were with the DBM earlier and we were asking for their opinion about the best time to pass the Budget and they said we need to take advantage of the good weather window (for construction),” Mr. Andaya said.
The Senate has alleged that the House realigned parts of the budget of the Department of Public Works and Highways and the Department of Health, amounting to P79 billion and P15 billion, respectively, after the Feb. 8 ratification.
Mr. Andaya said the Senate also made P75 billion in “post-bicam realignments.”
The budget impasse has resulted in the reenactment of the budget for the first quarter of 2019, which prompted the Development Budget Coordination Committee to slash its growth forecast for 2019 gross domestic product (GDP) to 6-7% from 7-8%. The National Economic and Development Authority, meanwhile, said GDP growth will decline to 6.1-6.3% if the budget is reenacted until April and 4.9-5.1% if until August.

SSS angling for new contribution hikes to fund maternity benefits

THE Social Security System (SSS) said the net impact of expanded maternity benefits will subtract a year from its actuarial fund life, and proposed a new round of hikes in member contribution rates to fund its increased commitments.
In a news conference on Monday, the pension fund said fund life is now estimated to run to 2044 if SSS pays out expanded maternity benefits under the new law if it does not access new sources of funding.
“Without funding, if the social security fund absorbs the cost, it… will shorten our fund life by one more year, so we’re now at 2044,” SSS Senior Vice President and Chief Actuary Edgar B. Cruz said on Monday.
He added that the fund will have to disburse P13.5 billion during the first year of implementation of the expanded maternity benefits, more than double the P6 billion allotted in previous years.
Republic Act (RA) No. 11210 or the Expanded Maternity Leave (EML) Law was signed by President Rodrigo R. Duterte in February, increasing paid maternity leave to 105 days from the current 60 days.
Under the new law, qualified members will receive P70,000 worth of maternity benefits regardless of the means of the child’s delivery, from the previous P32,000 for normal delivery.
Aurora C. Ignacio, SSS officer-in-charge, said the fund is “hopeful” it will be allowed to increase contributions rates again beyond the latest round of adjustments hiking member contributions.
“What we hope for after the number of years that we will be allowed to give the one [percentage point increase] every other year is to increase to cover the maternity benefits,” Ms. Ignacio said. “We were also allowed to do actuarial evaluation every three years. For now, we will try to cover with whatever we have.”
She added that the SSS can conduct an actuarial study earlier than the scheduled one in 2021 to determine whether the pension fund should increase contributions to fund the additional benefits.
According to its estimates, the pension fund will have to increase contributions by half a percentage point to cover for the expanded maternity benefits.
“We can’t increase benefits without a corresponding increase in contributions. If we don’t the fund life will suffer,” Mr. Cruz said.
RA No. 11199 or the Social Security Act of 2018 was signed by Mr. Duterte on Feb. 7, allowing the Social Security Commission or the policy-making body of the SSS to increase the contribution rate without the approval of the president.
The contribution rate will be increased by a percentage point starting April to 12%, until it hits 15% by 2025, from the current 11%.
It also gradually raises the minimum and maximum monthly salary credits (MSC) every other year starting next month at P2,000 and P20,000, respectively, to P5,000 and P35,000 by 2025, from P1,000 and P16,000 currently.
The increased contribution rate and MSC are expected to increase the actuarial life of the SSS to 2045 from 2032.
Voltaire P. Agas, SSS senior vice president and chief legal counsel, said the implementing rules and regulations (IRR) of the EML Law are being drafted by the SSS together with the Department of Labor and Employment.
“We hope they can provide the IRR by Labor Day,” he said. — Karl Angelo N. Vidal

Palace: Normal to pledge resources in China loan, default unlikely

MALACAÑANG said on Monday that many features of a loan agreement with China to fund the P3.6-billion Chico River Pump Irrigation Project were “standard” for such deals, including the pledge of Philippine natural resources as security for the loan.
Nevertheless, it expressed confidence that the security will never be foreclosed on because the Philippines is unlikely to default on the loan.
The President’s Spokesperson Salvador S. Panelo made the statement at a news conference Monday after Supreme Court Senior Associate Justice Antonio T. Carpio aired concerns about the loan security.
Mr. Carpio has said, citing the agreement, that if the government defaults on its loan, China can seize Philippine assets in the disputed West Philippine Sea, including the gas and oil-rich Reed Bank.
“The onerous conditions that some are saying incorporated in the contract is a standard between the lender and the borrower,” Mr. Panelo said when asked about the use of natural resources as collateral.
Mr. Panelo said there was “nothing wrong” with using the country’s natural resources as collateral.
“I don’t see anything wrong because I know it will never happen. That is precisely why I am saying that perhaps the economic managers who entered into a contract know that it will never happen,” he said.
“Just like bank institutions when they lend they impose terms to make sure na mababayaran sila (that they will be paid). Eh siguro itong mga pumasok diyan, mga (Maybe when they agreed to the loan) economic managers (thought that default) never namang mangyayari (will never happen), kaya binigay nila, (which is why they agreed to the terms).”
He said that the Philippines is “known for paying its loans.”
“Number one, bakit naman tayo magde-default? (why will we default?) We never defaulted on any obligations to any international organization with respect to loans of our country,” he said.
Mr. Panelo also reiterated that the Philippine government “cannot do anything” about China’s moves in the West Philippine Sea.
“We can only protest like any other (claimant) country, like Vietnam and others… You want us to declare war against them?” he said following reports that Filipino fishermen have been harassed in the West Philippine Sea.
Mr. Panelo added that the government will not go along with China’s treatment of fishermen. “If there is a violation, then we will have to go back to them (and point out violations),” he said.
Mr. Panelo also questioned the filing of a complaint by former Foreign Affairs Secretary Albert F. del Rosario and former Ombudsman Conchita Carpio-Morales against Chinese President Xi Jinping and other officials before the International Criminal Court (ICC) for “crimes against humanity” allegedly committed in the West Philippine Sea.
He said Mr. Del Rosario “did not make noise while he was in office, but is now acting when he is out of power.”
On Ms. Carpio-Morales’ involvement, Mr. Panelo said: “I have no problems with her. She filed it out of righteous indignation.” — Arjay L. Balinbin

Hanjin ex-workers march to DoLE to seek dialogue over benefits

THE PAYMENT of separation benefits to workers of Hanjin Heavy Industries and Construction Corp. Philippines (HHIC-Phil) may have been clouded by the workers’ expectations of remaining employed by the failed shipyard, with the Labor department expressing doubt that the remaining workers can obtain relief.
The former shipyard workers staged protests at the Department of Labor and Employment (DoLE) seeking a tripartite dialogue involving DoLE and the shipyard’s receiver, which DoLE said it was willing to support though it was less certain of the outcome.
In an interview with BusinessWorld on Monday, Samahan ng Manggagawa sa Hanjin Shipyard (SAMAHAN) President Efran Vinluan said that the tripartite dialogue should include the rehabilitation receiver, Rosario S. Bernaldo.
Gusto namin na mag-file kami para sa tripartite dialogue kasama ang receiver, ang Hanjin, at ang DoLE na kailangan na maitawad kami (We want to initiate a tripartite dialogue with the receiver, Hanjin, and DoLE),” Mr. Vinluan said.
Hanjin continues to employ 53 workers as a skeleton crew for the shipyard. Last month, HHIC-Phil laid off more than 3,000 of its workers after defaulting on its loans to Philippine banks, leaving 312.
Mr. Vinluan said that out of the 312, 113 were “locked out” because they refused the voluntary retrenchment program. He added that the company was not able to give the remaining 53 benefits, such as separation pay, which was earlier committed to by DoLE during a previous dialogue.
DoLE Undersecretary Benjo Santos M. Benavidez said that the Labor department is open to dialogue but there is not much that the dialogue can do.
“The question is what is there to discuss?” Mr. Benavidez said in an interview with BusinessWorld on Monday.
He added: “It was not Hanjin that offered the voluntary retrenchment. It was the contractors.”
The remaining and laid-off workers are formally employed by 17 contractors. HHIC-Phil’s general contractor, Subic Shipbuilder Corp. (SUSHICOR), committed to pay its workers separation pay and other benefits.
Mr. Benavidez said that the remaining workers refused to receive their benefits because they did not want to apply for the voluntary retrenchment program. The Labor department is monitoring the payments by the contractors, with Mr. Benavidez saying most workers have been paid.
“The Secretary of Labor (Silvestre H. Bello III) pledged that we will facilitate the separation pay (but the workers don’t want to take it) because they want to return to Hanjin). They are questioning the retrenchment,” he said.
He said if these workers are challenging the legality of the program, the matter is beyond the mandate of DoLE.
The proper venue, he said, is the National Labor Relations Commission (NLRC), where an arbiter will determine what action can be taken.
He said: “If (the workers) are questioning the legality of the retrenchment, then (the workers should) file a case.” — Gillian M. Cortez

First shipment of mangoes to Russia seen next month

THE Department of Agriculture (DA) is expecting to export mangoes to Russia starting next month Secretary Emmanuel F. Piñol said on Monday.
“Philippine Ambassador to the Russian Federation Carlos D. Sorreta said that he has been working on the shipment of mangoes to Russia for the last two years only to be told that there is not enough supply of the Guimaras variety,” Mr. Piñol said in a social media post.
“I was informed that the harvest has started and that an initial shipment can be made by the first week of April,” Mr. Piñol added.
Mr. Piñol, who was visiting Russia, said he was able to inspect a store which sold mangoes from Thailand, India and Pakistan for the equivalent of P1,000 each.
“I was shocked to discover that huge mango which is not even half as sweet as the Philippine mango was sold for P1,000,” Mr. Piñol said.
“The entry of the Philippine mango into the Russian and Belarusian markets can radically change the preferences of consumers in Eastern Europe,” he added.
Mr. Piñol said that while Guimaras mangoes will remain on the premium end of the market, the DA also aims to market other mangoes from the Philippines with labels of origin.
The other areas supplying mangoes are Zambales, Pangasinan, Cebu, Iloilo, the Davao Region, and Cotabato. — Reicelene Joy N. Ignacio

NEDA: March inflation estimate is ‘same or lower’ compared with February’s 3.8%

THE National Economic Development Authority (NEDA) said it expects inflation in March to be lower or level with February’s.
“We’re expecting it (to be) either the same or lower,” Assistant Secretary for NEDA’s Regional Development Office Mercedita A. Sombilla said in a news conference on Monday when asked for the agency’s estimate for inflation this month.
In February, inflation was 3.8%, unchanged from a year earlier and down from 4.4% in January.
NEDA’s March projection hinges on the continued of oil prices and rice, according to Ms. Sombilla.
She said the estimates also factor in the effects of the El Niño, which the economic planners assume will have “a very minimal” effect, particularly on rice production.
According to the Department of Agriculture’s Disaster Risk Reduction and Management Operations Center, damage inflicted by El Niño on farms totaled P1.33 billion as of March 19, covering 78,348 metric tons (MT) of output.
Losses to the rice crop totaled 41,003 MT, worth P814.40 million.
Ms. Sombilla also said traders may soon import rice to further shore up domestic supply if the El Niño threat intensifies, with the Rice Tariffication Law’s implementing rules and regulations up for signing within the week.
In addition, rice stocks built up before the Rice Tariffication Law kicked in are still available to keep supply stable, Ms. Sombilla said.
According to the National Food Authority, the inventory of rice, including approved orders from Dec. 20, 2018 to March 5, totaled 357,816.45 metric tons.
Despite prices of the staple grain being steady, NEDA said it “remains vigilant” on other commodities such as corn which has also been “slightly” affected by El Niño.
The government forecasts inflation in 2019 to average within the 2 to 4% range. — Janina C. Lim

NGCP activates Bataan-Pampanga transmission line

PRIVATELY OWNED National Grid Corp. of the Philippines (NGCP) has energized its P316-million Hermosa-Floridablanca 69-kilovolt (kV) transmission line to bring more reliable services to customers in Pampanga.
The project is among the list of projects that the Department of Energy (DoE) certified as being of national significance in January. It was energized on Feb. 28 and will ease the load of the existing and aging Hermosa-Guagua 69kV line, the company said.
“Due to the load growth in the area, the 53-year-old existing line cannot accommodate the heavy loading conditions and would have caused problems in the long run,” NGCP said in a statement. “A new line was required to ensure the reliability of power transmission services.”
NGCP said the project complies with the “N-1 component” set by the Philippine Grid Code, referring to the ability of the grid to withstand a major disturbance with minimal disruption to the system.
It said with the new line in place, the grid operator will also be able improve services to the franchise area of the Pampanga II Electric Cooperative.
It added that apart from the Hermosa-Floridablanca transmission line, the company is working on reliability projects such as the western Luzon 500-kV backbone project.
NGCP said it will also install a new transmission corridor, the Bataan 230-kV reinforcement project, which will serve power customers in Bataan and nearby provinces and accommodate incoming generating capacity. It will also put up the Nagsaag-Tumana 69-kV transmission line project, which will serve customers in Pangasinan.
“We continue to appeal for support from our stakeholders in the smooth implementation of our projects, which will ultimately benefit all power consumers not only in Luzon, but in the entire country,” NGCP said.
A certificate that an energy project is of national significance, known as a CEPNS, entitles project proponents to all the rights and privileges provided for under Executive Order 30 series of 2017, including action on the application within 30 working days.
Certified projects also enjoy presumption of prior approval — they are presumed to have already complied with the requirements and permits from other government permitting agencies.
It will be deemed approved if no action is taken five days after the lapse of the 30 working-day period for processing of the application. — Victor V. Saulon

Post Clearance Audits: Are you prepared enough?

Hope for the best, prepare for the worst. Preparing for an upcoming customs audit is one way to minimize, if not to avoid, the risk of having deficiency assessments. The recent issuance of the Customs Administrative Order (CAO) No. 1-2019 marks the beginning of the audit season for importers.
As of Jan. 11, the Bureau of Customs (BoC) has issued 31 Audit Notification Letters (ANLs) on various importers. Some 29 ANLs have been served, and the audit proper of these companies have yet to commence. The BoC is committed to release more in the coming days.
The idea of receiving an ANL might cause companies stress, especially if they are not prepared for an audit. Hence, to avoid that stress, planning and preparation are important.
Under CAO No. 1-2019, importers are obliged to keep, at their principal place of business, all their records pertaining to the ordinary course of business within three years from the date of final payment of duties and taxes or customs clearance, whichever is later. Aside from importers, all parties engaged in Customs clearance and processing, as well as locators, are likewise required to keep records related to such Customs clearance and processing.
Non-compliance with this obligation may result in a 20% surcharge, suspension, or cancellation of the importer’s accreditation. The delivery or release of their subsequent imported articles may, likewise, be put on hold to answer for the fine and any revised assessment. In addition, importers are deemed to have waived their right to contest the results of the audit based on records kept by the BoC. Aside from these, imprisonment of not more than three to six years and a fine of P1 million may be imposed on those who fail to keep and maintain their records.
To avoid these penalties, importers should be ready before the audit team of the BoC visits their place of business armed with an Audit Notification Letter. As early as now, it is better for importers to evaluate, review, or make a self-assessment on their records and prepare a checklist of the required documents in case they are subject to a customs audit. These required documents are: (1) documentation on the entity organization and structure; (2) documentation on orders and purchases; (3) documentation on shipping, importation, exportation and transport; (4) documentation on manufacturing, stock and resale; (5) financial documents, such as financial statements and other accounting information; (6) charts and codes of accounts, general and subsidiary ledgers, general journal, accounting instruction manuals, and system and program documentation.
If, during the early evaluation or self-assessment, importers discover errors in their goods declaration due to a mistake or negligence, they may avail of the benefits of the Prior Disclosure Program (PDP). The PDP authorizes the BoC to accept prior disclosure by importers of errors and omissions in goods declaration, resulting in a deficiency in duties and taxes on past importations. It also includes disclosure of royalties and other proceeds of any subsequent resale, disposal, or use of the imported goods accruing directly or indirectly to the seller, or on any subsequent adjustment to the price paid or payable.
Any importer may avail of the PDP, except for those whose goods declarations are the subject of pending cases with other Customs offices, or covered by cases already filed and pending in courts, and those with fraudulent goods declarations. If availed of by the importer that has already received an ANL, the duly accomplished application form for prior disclosure stating the errors in goods declaration and tendering payment of the deficiency duties, taxes, and penalties must be filed within 90 calendar days from the receipt of ANL.
What is the significance of availing of the PDP?
Without availing of the PDP, an importer, if found to have incurred deficiencies in duties and taxes, shall be penalized depending on the existence of fraud and negligence. In case of negligence, the importer shall be penalized with a fine equivalent to 125% of the lost revenue. However, if the importer committed fraud, the penalty is as high as 600% of the lost revenue and imprisonment of not less than two years but not more than eight years.
On the other hand, the PDP, once availed of, removes the payment of the above penalties. If the PDP is availed of prior to the receipt of ANL, the importer shall only be liable for the deficiencies in duties and tax due, plus 20% legal interest per annum. If the same is availed after the receipt of the ANL, in addition to the deficiency in duties and taxes, the importers are, likewise, liable to 10% of the basic deficiency plus 20% legal interest. For penalties and other proceeds of any subsequent resale or disposal that have accrued to the seller, importers may pay only the deficiency in duties and taxes without penalties and interest, provided that the disclosure is made within 30 calendar days from the payment, accrual, or adjustment.
However, please note that availing of the PDP is not automatic. It is still subject to the verification and approval of the Post Clearance Audit Group. Failure to provide the necessary documentation, other material inaccuracies, mistakes and errors in the goods declaration, and the existence of fraud on the part of the importer may result in the disapproval of the application and the conduct of a formal and full audit.
With proper preparation, importers may confidently handle a future customs audit. The question now is this: can you confidently handle a customs audit?
Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.
 
Zhainey C. Apostol is an associate from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.
pagrantthornton@ph.gt.com.

Agri-development: more than irrigation, post-harvest facilities, and farm-to-market roads

Many politicians propose solving rural poverty via three areas: irrigation, post-harvest facilities and farm-to-market roads. I beg to differ. It is much more than that. Indeed, needs are area and crop-specific. High productivity and diversification require these investments, but there are more to spur investments.
agriculture
IRRIGATION
Water is plant life. Unfortunately, irrigation in this country is focused on rice irrigation. There are about 1.7 million hectares (ha) of land with irrigation, says the National Irrigation Administration (NIA). Public irrigation is designed to flood rice plants. Palay needs about three cubic meters per kilo produced, or 12,000 cubic meters per hectare per harvest. Since it is an aquatic plant, it requires far more water than other crops.
The huge irrigation investments in this country mainly benefit rice and little for corn, coconut, sugarcane, fruits, among other crops. These systems are mainly river diversions and reservoir dams, such as the large Magat river irrigation system in Isabela and Upper Pampanga river irrigation system in Nueva Ecija.
The common irrigated farm system is rice in the wet season and rice in the dry season. In some places, the dry season crop can be tobacco, tomato (Ilocos region) and corn (Cagayan Valley).
But modern irrigation technologies have evolved. And they economize on water. Cavendish banana for export uses drip irrigation or sprinkler irrigation to achieve quality and high yields. Durian farms in Thailand use micro-sprinklers. Coffee and cacao need supplementary irrigation. Greenhouse veggies use soil-less drip systems but can produce several harvests a year.
New systems, such as the proposed Chico river irrigation system in Kalinga and Cagayan that will irrigate 8,700 hectares, are not cheap at P500,000 per ha even it irrigates 4,400 farmers.
Small farm reservoirs that trap water in the wet season and release water in the dry season for crops need to expand their coverage. This is in the context of the country’s topography and climate change.
In the Philippines, lowlands are mostly narrow coastal strips except for larger plains in Luzon (Cagayan Valley and Central Plains), Mindanao (Cotabato and Davao-Agusan valleys), and others in Negros and Panay. Rivers are short and generally seasonal in flow.
What is the message? Irrigation is more than just rice irrigation. Many crops need it to achieve quality and yield. Consider irrigation design as part of the overall irrigation and poverty reduction strategy.
POST-HARVEST FACILITIES
Post-harvest losses are high in developing countries. They can reach 15% for palay (IRRI, 2015), and 20-40% for vegetables (PSA 2012, as quoted by Mopera, 2016). Mopera claims that “food loss is mostly caused by the inability of the small farmers to provide proper post-harvest handling, which includes storage facilities, infrastructure, cooling chains, packaging and marketing systems.”
One challenge for an efficient post-harvest facility is scale and organization. Small and fragmented holdings do not augur well for a viable facility.
The use of combined harvesters for rice can minimize harvest losses. Modern rice mills can yield high mill recovery.
Private-run facilities observe scale economics. A banana packing house for 25 ha can deliver two containers of export banana a week. I also saw a coop-run kiwi packing house in New Zealand for 150 ha.
FARM-TO-MARKET ROADS (FMRS)
FMRs invariably have many social benefits. They make roads passable all-year-round and reduce transport costs of both farm inputs and outputs. They open up new areas for development. They also open villages to extension and health services of government as well as promote competition by traders.
A standard concrete FMR is not cheap at P10 million per kilometer. Hopefully, it is built to standard and no leakages occur. And it is maintained well.
FMR and tree-crop investments need to be compared given scarce resources. Coffee can be planted/intercropped with a budget of P150,000 per ha, and modern banana farm at P1M per ha. Each can benefit one farmer.
When building FMRs, therefore, economic trade-offs need to be considered.
Are there equally important rural investments aside from the three areas? Yes. Investments can also be made on the following:

• Cost-sharing by local government with entrepreneurs for planting marketable crops like cacao, coffee, rubber and oil palm

• Establishing modern nurseries

• Stringing electric posts to aquaculture ponds or mariculture parks. It is costly for investors to pay for electric posts and lines to their farms. I understand in Vietnam and China, the government spends for these.

• Small port rehabilitation or RORO port

• Access roads to farm tourism sites

• Flood control

• More weather stations

The primordial criterion is how public investments can contribute to value chain competitiveness. It is about economic justification and poverty alleviation impact. When a third of farmers and fishers are poor, trade-off and prudence are keys to project selection.
This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.
 
Rolando T. Dy is the Co-Vice Chair of the MAP AgriBusiness Committee and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific.
map@map.org.ph
rdyster@gmail.com
http://map.org.ph

MORE airline competition

The Market-Oriented Reforms for Efficiency (MORE) series continues and tackles the air transportation sector. For an archipelago of more than 7,500 islands and about 20 are big islands with big populations, and air travel is necessary to hasten the movement of people and goods.
For the Philippines, the good news is that from mere trickles of less than nine million local and foreign passengers transported in the past four decades (1986, 1996, 2006 data), things have significantly improved starting 2010 (global recovery from financial turmoil of 2008-09, then change of administration from Gloria Arroyo to Benigno Aquino III). That year, passengers jumped to 22.6 million, then 35 million in 2014 and 40 million in 2016.
The bad news is that compared to our neighbors in East Asia, we are not dynamic and liberal enough to allow more airline competitors, and/or we do not have more big airports, including budget terminals, to fly more passengers. Several neighbors with smaller populations than us — Hong Kong, Malaysia, Thailand, S. Korea — have more air passengers than the Philippines (see table).
Air Transportation, passengers carried (foreign and local) and carrier departures worldwide
Note that of the Philippines’ 40 million passengers in 2016, only six million were international visitors (corresponding to 6 million foreign arrivals,) so some 34 million or 85% were domestic passengers.
We need to further liberalize airline competition in the country. We also need to expand physical infrastructures like bigger and more provincial airports, have more budget terminals, more toll roads that link the airports to big city centers and major tourist destinations.
These will have a combined effect of attracting more local and foreign fliers, and of hastening commerce, tourism, investments, job creation, business expansion and economic growth in the country.
 
Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers
minimalgovernment@gmail.com

‘For whom the sisterhood calls’

March, the women’s month…and this is a last “hurrah.”
Women and women’s collectives are not homogenous.
Women have layered identities where gender intersects with class, race, ethnicity, religion, and political ideology. For example, the Western feminist movement was once seen as largely white, thereby, not able to capture the oppression of colored women nor the narrative of colonization. Women representing other women eventually became questionable — genuine representation meant representing one’s self and not having another person do it for you. Thus, the struggle then became that of participation and not just representation. White women no longer spoke on behalf of colored women because colored women spoke for themselves.
In the same manner, peasant women, indigenous women, Muslim women, women laborers, women rebels, women soldiers, lesbians, transwomen, etc. all have the voice to speak for themselves and they must seize all spaces for them to be able to do so. Look closely at the so called ‘women making history’ in the 116th US Congress, the election of the following ‘firsts’: the first Muslim woman, the first youngest woman, the first Native American woman, the first black and Latina Congresswomen from certain states. These women image gender interfacing with other identity markers and are in the legislative space with no other representing their collective except them.
The feminist movement and the women’s movement are also not one and the same. They are related but nonetheless distinct from one another. The former is marked with its challenge against the structure of patriarchy and the hyper/toxic masculinist values they perpetuate; it works both as an analytical frame and as a social movement to combat it. The latter, on the other hand, is preoccupied with activism, with being an integral part of a social movement for change, specifically, as it relates to the multiple facets of women’s lives.
These movements did (and still do) clash — women contesting women on issues such as abortion, divorce, sexuality, prostitution/sex work — and the battle fronts have been in public discourses, legislation and policy formulation. Failure to nuance the distinction may tend to lose the significant criticality of both movement and issue.
This is a call for a learning moment — women and movements are heterogeneous.
WOMEN AND AN OVER-SIMPLIFIED DICHOTOMY
And what about women’s leadership? On the one hand, women supposedly have so much to prove by being an anti-thesis to men’s leadership and by debunking weakness as it has been equated to being a woman.
But then you have the phenomenal rise of New Zealand’s Prime Minister Jacinda Ardern: from being the second woman Head of State to give birth while in public office, to making United Nations history by bringing her baby during the 73rd General Assembly meeting, and to taking the world public by storm with her grace, compassion, and courage amidst the recent terrorist attack in her country. One could argue that all of these are but ordinary things for a woman to do. But what made them extraordinary is the fact that a woman leader has done them publicly, almost naturally. Empathy and emotions, usually seen as weak points of women leaders, are now viewed as strengths.
On the other hand, there are also other women leaders who may ride on prevailing male leadership norms. Their gender is not really seen as something significant to the way they govern — they are pragmatic and calculating like any other male leaders. Masculine leadership persona is attached to women leaders, imaging them as “male” leaders in women’s bodies — aggressive, competitive, even brutal. But come to think of it, isn’t it possible that the imaging of so called “Iron Ladies” is from a “male gaze,” borne out of men’s masculine narcissism? If that is the case, then male leaders are attributing and claiming strength to their gender and not to that of the woman’s.
The counter-fact is, women are strong leaders by themselves and make a difference without being imaged as masculine. In this regard, a recent study by Perkins and Phillips discussed in the Harvard Business Review found that women leaders of diverse countries are “significantly more likely than male leaders to have fast-growing economies.” They cited Liberian President Ellen Johnson Sirlief who advanced inclusive leadership, tolerance, centrality of reconciliation, unraveling the benefits of diversity, and simply, making sure that no one will feel left behind. For the first five years of her administration, the economic growth rate was higher than that of her male predecessors.
This is a call to set things straight — there is no longer a dichotomy.
WOMEN AND AN AUTHORITARIAN BACKDROP
Nowadays, there seems to be a resurgence of authoritarianism in different parts of the world and as an article by Beinart in The Atlantic aptly entitled it, “The New Authoritarians are Waging War against Women.” According to Beinart, looking at the experiences of the United States of America, Brazil, Hungary, Poland, Italy, and the Philippines, the common denominator is: “They all want to subordinate women.”
Women’s empowerment disrupts male dominance and in an authoritarian setting, is unacceptable. For authoritarian leaders, equality between men and women is an absurdity and the women’s place is under men, both literally and figuratively. And thus we see a litany of insults, devaluation, objectification and sexualization, demonization, and dehumanization of women — day in and day out, in whatever media platform, in a variety of images.
We also see women fighting other women…women defending men who have done wrong, who continue to do wrong…women backing up men’s authoritarian rule.
At this point we may need to harvest from our heterogeneity, give birth to a feminist movement against patriarchal authoritarianism, prop up weak institutions and nurture incorruptible rule of law, find strength in our compassion and non-negotiable dignity and humanity, and advance a transformative politics of inclusion, respect, and care. No one else should voice these but us, the women who resist the structure of gendered-violence of an authoritarian regime.
We don’t need strong women to resist strong men…we need ordinary sisterhood in an extraordinary time — this is the call.
 
Ma. Lourdes Veneracion-Rallonza, Ph.D. is an Associate Professor at the Department of Political Science, Ateneo de Manila University
mrallonza@ateneo.edu

Words into action: Investing for impact

By Didier von Daeniken
ONE of the most exciting trends to come out of wealth management in the last couple of years is the growing interest among clients to invest sustainably, and create a positive social and economic impact.
This was hugely evident at Davos this year where sustainability was one of the biggest topics brought up by our clients as well as business and political leaders. It was also clear that the interest spans across all ages, with the children of our clients — brought to Davos by us for our Future Global Leaders Alumni Programme — being as engaged as many of their parents.
It’s something I see every day as a private banker: affluent and high net worth individuals are increasingly thinking about their role as responsible global citizens. With the risks from major challenges, such as climate change and lack of access to health care and education, becoming ever clearer, our clients are looking actively for opportunities to effect positive change.
BRIDGING THE SDG FINANCING GAP
While governments and multi-lateral initiatives work to provide scalable solutions to the major issues of our time, these efforts are unfortunately not enough to eliminate them. The United Nations estimates that US$5-7 trillion is needed annually to achieve the Sustainable Development Goals (SDGs), with a significant and persistent financing gap of an estimated US$2.5 trillion per year in developing countries alone.
invest
I believe financial institutions and investors have a critical role to play in raising and directing new capital towards the SDGs.
One example is access to healthcare, which is so fundamental to the prosperity of individuals and communities. At a global level, huge strides have been made globally to eradicate polio, reduce child mortality and tackle HIV. However, the global health market is still subject to substantial failings, and overcoming them requires continued innovation and participation from the private sector.
Financial services firms have been eager to front-run the opportunity, developing instruments to direct funds towards healthcare initiatives in underserved markets. An investor looking to help improve health care in a certain country can invest his money for a financial return and, at the same time, help to bridge a gap for positive social impact.
Beyond health care, sustainable and impact investing solutions now cover a range of sectors from infrastructure financing to initiatives to tackle climate change. More broadly, companies are rapidly incorporating ESG (Environmental, Social and Governance) criteria in their business models, to signal the long-term viability of their business models to investors and consumers.
THE POWER OF INFORMATION SHARING
As wealth managers, we connect our clients to opportunities and equip them with the information they need to make good decisions. Our Asia Sustainable Investing Review 2018 showed that 86 percent of investors lack a clear understanding of the impact and returns that sustainable investing can deliver. That’s why we also have a responsibility to educate and inform. For instance, commonly-held myths such as an unavoidable trade-off between financial gain and positive impact can be debunked by the strong performance of many sustainable investing solutions.
And as leaders in financial services and wealth management, it’s important for us to collaborate, to share information and experiences, and harness data and insights, so that together, we can shape the future of sustainable investing. Our clear aim should be to turn this from a niche investment avenue into a core part of investor portfolios, helping to drive private funds towards the success of the SDGs.
 
Didier von Daeniken is the Global Head of Private Banking and Wealth Management at Standard Chartered Bank.

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