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Philippines seeks parts from Japan for ‘Huey’ helicopters

The Philippines is talking to Japan about acquiring spare parts for its UH-1H “Huey” helicopters, the air force commander said on Monday, after a deal for new Canadian choppers collapsed this year.
The $96 million parts package would keep about 80 U.S.-made Bell utility helicopters flying until 2020 when the Philippines expects to take delivery of new aircraft, Lieutenant-General Galileo Kintanar, the air force chief, told Reuters.
Japan eased a decades-old arms export ban in 2014, allowing for weapons exports and participation in joint arms programmes when they serve international peace and Japan’s security.
Two years later, the Philippines agreed to lease from Japan five TC-90 aircraft to help patrol the disputed South China Sea, where China is expanding its military presence.
Kintanar said an agreement for the helicopter parts would be finalised in the third quarter of this year.
President Rodrigo Duterte canceled a deal in February to buy 16 new Bell 412 EPI helicopters worth $233 million from Canada, whose government expressed concern they could be used to fight rebels.
The new aircraft would have begun to replace the second-hand Vietnam War-era Huey helicopters that are the workhorse of the Philippine air force.
Since then, the Philippines military has said China, Russia, South Korea and Turkey have shown interest in selling new helicopters to Manila.
“We will definitely sign a contract for the brand-new combat utility helicopters this year,” Kintanar said, without giving more details.
The new helicopters are expected to be delivered by 2020. — Reuters

Mobilizing finance for sustained, inclusive, and sustainable economic growth in Asia

By Shamshad Akhtar
ASIA and the Pacific remains the engine of the global economy. It continues to power trade, investment, and jobs the world over. Two thirds of the region’s economies grew faster in 2017 than the previous year and the trend is expected to continue in 2018.
The region’s challenge is now to ensure this growth is robust, sustainable, and mobilized to provide more financing for development. It is certainly an opportunity to accelerate progress towards achieving the 2030 Agenda for Sustainable Development.
Recent figures estimate economic growth across the region at 5.8% in 2017 compared with 5.4% in 2016. This reflects growing dynamism amid relatively favorable global economic conditions, underpinned by a revival of demand and steady inflation. Robust domestic consumption and recovering investment and trade all contributed to the 2017 growth trajectory and underpin a stable outlook.
Risks and challenges nevertheless remain.
Rising private and corporate debt, particularly in China and countries in Southeast Asia, low or declining foreign exchange reserves in a few South Asian economies, and trends in oil prices are among the chief concerns.
Policy simulation for 18 countries suggests a $10 rise in the price of oil per barrel could dampen GDP growth by 0.14 to 0.4%, widen external current account deficits by 0.5-to 1.0 percentage points, and build inflationary pressures in oil-importing economies. Oil exporters, however, would see a positive impact.
These challenges come against the backdrop of looming trade protectionism. Inward-looking trade policies will create uncertainty and would entail widespread risks to region’s export and their backbone industries and labor markets.
While prospects for the least developed countries in the region are close to 7%, concerns persist given their inherent vulnerabilities to terms-of-trade shocks or exposure to natural disasters.
The key questions are how we can collectively take advantage of the solid pace of economic expansion to facilitate and improve the long-term prospects of economies and mobilize finance for development as well as whether multilateral institutions, such as the World Trade Organization membership can resolve the global gridlock on international trade?
Economic and financial stability along with liberal trade access to international markets will be critical for effective pursuit of the 2030 Agenda.
Regional economies, whose tax potential remains untapped, now need to lift domestic resource mobilization and prudently manage fiscal affairs. Unleashing their financial resource potential need to be accompanied by renewed efforts to leverage private capital and deploy innovative financing mechanisms.
The investment requirements to make economies resilient, inclusive, and sustainable are sizeable — as high as $2.5 trillion per year on average for all developing countries worldwide.
In the Asia-Pacific region, investment requirements are also substantial but so are potential resources. The combined value of international reserves, market capitalization of listed companies and assets held by financial institutions, insurance companies and various funds is estimated at some $56 trillion.
Effectively channelling these resources to finance sustainable development is a key challenge for the region.
The need to come up with supplementary financial resources will remain.
Public finances are frequently undermined by a narrow tax base, distorted taxation structures, weak tax administrations, and ineffective public expenditure management. This has created problems of balanced fiscalization of sustainable development, even if the national planning organizations have embraced and integrated sustainable development agenda in their forward looking plans.
Despite a vibrant business sector, the lack of enabling policies, legal and regulatory frameworks, and large informal sectors, have deterred sustainability and its appropriate financing. The external assistance from which some countries benefit is insufficient to meet sustainable development investment requirements, a problem often compounded by low inbound foreign direct investment. Capital markets in many countries are underdeveloped and bond markets are still in their infancy. Fiscal preemption of banking resources is quite common.
For those emerging countries which have successfully tapped international capital markets, a tightening of global financial conditions means borrowing costs are on the rise.
Our ESCAP flagship report, Economic and Social Survey of Asia and the Pacific 2018 (Survey 2018) calls for stronger political will and governments strengthening tax administrations and expanding the tax base.
If the quality of the tax policy and administrations in Asia-Pacific economies matches developed economies, the incremental revenue impact could be as high as 3% to 4% of GDP in major economies such as China, India, and Indonesia and steeper in developing countries.
Broadening the tax base by rationalizing tax incentives for foreign direct investment and introducing a carbon tax could generate almost $60 billion in additional tax revenue per year.
But government action must be complemented by the private sector to effectively pursue sustainable development. The right policy environment could encourage private investment by institutional investors in long-term infrastructure projects. Structural reforms should focus on developing enabling policy environment and institutional setting designed to facilitate public-private partnerships, stable macroeconomic conditions, relatively developed financial markets, and responsive legal and regulatory frameworks.
Finally, while much of the success in mobilizing development finance will depend on the design of national policies, regional cooperation is vital. Coordinated policy actions are needed to reduce tax incentives for foreign direct investment and to introduce a carbon tax.
For many least developed countries, the role of external sources of finance remains critical.
In many cases, the success of resource mobilization strategies in one country is conditional on closer regional cooperation.
ESCAP’s remains engaged and its analysis can support the planning and cooperation needed to effectively mobilize finance for sustained, inclusive and sustainable economic growth.
 
Shamshad Akhtar is the Under-Secretary-General of the United Nations and Executive Secretary of Economic and Social Commission for Asia and the Pacific (ESCAP)

Oil trades above $70 as market awaits Trump call on Iran curbs

US oil rose above $70 a barrel for the first time since November 2014 as traders braced for a re-imposition of US sanctions on Middle East crude producer Iran.
Futures in New York and London jumped as much as 1.4 percent. While U.S. President Donald Trump has threatened to pull out of a deal between Iran and world powers as a May 12 deadline nears, he’s signaled he’ll be open to negotiation. The 2015 accord eased sanctions on the third-largest producer within the Organization of Petroleum Exporting Countries in exchange for curbs on its nuclear program. Renewed American measures may constrain the Persian Gulf nation’s crude exports.
US consumers have been feeling the pain as gasoline prices have risen along with crude. Since January 1, gasoline futures have risen to $2.13 a gallon from $1.79, a 2% gain.
Trump faces a May 12 deadline to decide on the Iran deal, and has recently refused to reveal what he’ll do. The president has repeatedly called the accord a bad deal for the US, and Trump lawyer Rudy Giuliani said Saturday he expects it to be torn up. But Trump also said last week his antipathy “doesn’t mean I wouldn’t negotiate a new agreement.”
Iran, however, has ruled out new talks, calling the current agreement “non-negotiable.” If the U.S. decides to exit the deal “it will quickly see that this decision will be a regret of historic proportions,” said Iranian President Hassan Rouhani, addressing crowds at a rally Sunday in the northeastern city of Sabzevar.
US negotiators have been meeting with allies France, the U.K. and Germany trying to reach a consensus on side agreements that address US concerns about the deal, rather than scuttling it.
At the same time, Iran has come out against higher prices. Crude at $60 to $65 a barrel is “suitable,” an official from the OPEC producer said on Sunday, signaling a split with fellow group member Saudi Arabia that’s said to be aiming for $80 oil. The group will meet next month in Vienna.
“The market at this stage is pricing in a US stepping away from the nuclear deal, so it’s allowed the risk premium to build even further,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “If Trump should decide either to postpone or go for a surprise renegotiation of the deal, oil prices could slump by $5 quite easily.”
West Texas Intermediate oil for June delivery climbed as much as $1.02 to $70.74 a barrel on the New York Mercantile Exchange and traded at $70.59 at 8:33 a.m. in New York. Total volume traded was about 1.2% above the 100-day average. Prices rose 2.4% last week.
Brent for July settlement rose 96 cents to $75.83 a barrel on the London-based ICE Futures Europe exchange. Prices climbed 0.3% last week. The global benchmark crude, which is also on course for the highest close since November 2014, was at a $5.32 premium to July WTI.
Stabilizing Markets
Saudi Arabia’s Energy Minister Khalid Al-Falih said Monday in Tokyo that bringing global oil inventories back to their five-year average isn’t the target of efforts to cut output. The group is yet to accomplish its goal of stabilizing crude markets, Al-Falih said.
Energy market consultant FGE has said that sanctions could cut Iran’s output by as much as 500,000 barrels a day by the end of this year. Since sanctions were eased as of January 2016, Iran’s crude production has almost doubled and its exports soared last month to record levels. — Bloomberg

Binay son cleared of Makati Building case

THE COURT of Appeals’ (CA) Tenth Division has cleared former Makati City mayor Jejomar Erwin “Junjun” S. Binay, Jr. and four other city officials of administrative charges over the alleged anomalous construction of the P2.28-billion Makati City Hall Parking Building II (MCHPB).
The 159-page joint decision dated May 3 and penned by Associate Justice Edwin D. Sorongon modified the Office of the Ombudsman’s joint decisions dated Sept. 7, 2015, and Jan. 18, 2016, which dismissed Mr. Binay and 20 other Makati City officials for being “guilty of serious dishonesty and grave misconduct for the irregularities committed in connection with the procurement of the Architectural Design and Engineering Services and Construction of (the MCHPB),” in violation of Republic Act (RA) No. 9184 or the Government Procurement Reform Act.
The CA pointed out that Mr. Binay is covered by the Condonation Doctrine, which stated: “the court should never remove a public officer for acts done prior to his present term of office.”
Although the decision noted that the Supreme Court (SC) “abandoned the condonation doctrine on the basic premise that it is devoid of legal bases under the 1987 Constitution,” it still ruled that “(t)he abandonment of the condonation doctrine should not be given any retroactive effect as to prejudice Binay, Jr. for the acts he allegedly committed when said doctrine was still in effect and duly recognized,” the decision stated.
The Ombudsman had earlier ruled that “Binay, Jr. should not be allowed to use the condonation doctrine as a defense because he signed and approved an undated DV (Disbursement Voucher) on July 24, 2013 covering payment to (designing firm, MANA) in the net amount of P429,011.48, and another DV dated July 3, 2013 payable to (construction firm, Hilmarc’s).”
According to the CA, “the condonation doctrine still applies to his (Mr. Binay) case notwithstanding the approval of the aforementioned DVs as these pertained to payment of services contracted during his prior term.”
Thus, the administrative charges against him were dismissed “for being moot and academic on the basis of the condonation doctrine,” the decision read.
Meanwhile, the administrative charges against city administrator and Bids and Awards Committee (BAC) chairperson Marjorie A. De Vera and city accountant Cecilio P. Lim III were dismissed for lack of jurisdiction.
Acting city accountant Elano M. Mendoza, Jr. and Central Planning Management Office (CPMO) chief Virginia S. Hernandez were cleared of administrative charges for lack of merit, with the CA directing them to be “reinstated to their former positions and paid their salaries and such other emoluments that they did not receive by reason of their dismissal from service.”
The modified ruling on city treasurer Nelia A. Barlis, city accountant Leonila G. Querijero, acting city accountant Raydes B. Pestaño, and Emerito C. Magat of the CPMO rendered them guilty of simple misconduct instead and directed their reinstatement after “appearing that (they have) already served (their penalties.)”
“The Court makes clear that when an officer or employee is disciplined, the object sought is not punishment of that officer or employee, but the improvement of the public service and the preservation of the public’s faith and confidence in the government,” the decision concluded.
The CA maintained the dismissal ruling for respondents Pio Kenneth I. Dasal, Lorenza P. Amores, Mario V. Badillo, Arnel L. Cadangan, Line M. Dela Peña, Giovanni I. Condes, Rodel R. Nayve, Norman D. Flores, Ulysses E. Orienza, Connie N. Consulta, Manolito N. Uyaco, and Gerardo K. San Gabriel. — Dane Angelo M. Enerio

Economic ‘invasion’ — boon and bane?

In its May 4 report, Bloomberg news revealed that in Metro Manila’s main financial district and its fringes, signs of new inhabitants are everywhere.
“Around 100,000 migrants, mainly Chinese mainlanders, have slipped into Metro Manila since September 2016. The deluge is rippling through the city’s real estate market. While Chinese investors have been snapping up high-end housing in HK, London and NYC, Manila’s case is motivated by the booming gaming industry.”
Bloomberg reports that more than 50 offshore gambling companies are catering to overseas Chinese punters ever since the government began awarding licenses 19 months ago. Although bets are placed remotely, the operators still need Chinese speakers to handle marketing and customer queries to payment processing for overseas clients.
The resulting migration is pushing home prices skywards in areas favored by them. It’s reenergizing Manila’s commercial property market as owners convert offices and shops into gaming centers and boosting the bottom lines of local developers such as Megaworld, DMCI, Ayala Land, Inc. and SM Prime Holdings, Inc., the report said. Many lot and land owners are delighted by this.
“While no official numbers are publicly available, people familiar with the matter said that offshore gaming operators in the Philippines employ about 200,000 workers, predominantly Chinese, and more than half of them have arrived in the capital region since late 2016. The Bureau of Immigration said it couldn’t immediately provide the data.”
The influx promises to boost the nation’s economy and is helping to strengthen ties with China — a priority of the incumbent administration. The caveat here is that it leaves the property market vulnerable in the event of an abrupt shift in online gaming or immigration policies from either country.
The perils of relying too heavily on Chinese buyers became painfully obvious last year in the Malaysian enclave of Johor Bahru, which has been grappling with a glut of vacant homes after China imposed controls on investments in overseas property and demand abruptly dried up, the report said.
“Concentration risk could be a potential concern,” said Emilio Neri, an economist at the Bank of the Philippine Islands in Manila.
Others see only opportunities. Qiang Huang, a realtor based in Hefei, expects Manila’s home prices to get a boost from the steady stream of Chinese workers catering to offshore gaming customers and mainland clients frequenting brick-and-mortar casinos, the report said.
Huang gambled in Solaire last November and noted that there was room for growth. He intends to build a 500-sq.m. showroom in the city to lure Chinese real estate investors and market apartments at two project sites, adding that he has run into Chinese tourists who have formed “property-shopping” groups, the report said.
Among the biggest beneficiaries of this appetite have been condo units near Manila’s Makati City district. Patches of San Antonio Village now have restaurants, stores, money changers and payment centers catering to Chinese customers sharing space with local stores, the report said.
In the Bay Area, home prices surged by a record 27% in the last quarter of 2017, according to data from Santos Knight Frank, Inc., dwarfing the 6% overall gain in residential prices in Metro Manila. Condo sales in the capital region rose to an all-time high of 52,600 units in 2017.
Appetite from gaming operators is shoring up the commercial market as demand from traditional BPOs wanes. The BPOs’ take-up share for new office space decreased by 1/3, to 46%, in 2017, while that of offshore gaming operators tripled to 30%, said David Leechiu, CEO at Leechiu Property Consultants, which has partnered with CBRE Group, Inc. in the Philippines.”
Other quarters though have been suspicious of their sustained influx and large presence. Social media is rife with such reports. For example:
“One says that as many as 300,000 Chinese nationals work in the Philippines (hopefully legal). Another says that they have easy access to Clark. Yet another says that there are killings and a news blackout at a Chinese-owned banana plantation in Mindanao.”
“One source says 500-600 Chinese nationals are in his own neighborhood, housed in bunk-beds up to 8 to a room, ferried daily around by vans to work in a casino, wearing typically K-pop style. Others see them in tourist clothes but note that they are far too fit and without their families to be tourists.”
“Some work in call centers, online gambling outfits or engaged in credit card and ATM fraud. Another says they occupy entire floors in office buildings or malls. One says that Chinese fishing boats illegally fish giant clams and smuggle Chinese nationals via Palawan, Boracay, and Laoag along with cheap goods.”
“Many reportedly have red dragon tattoos on their right hands between their index finger and thumb, and that Chinese are guarding the entrance of the Double Dragon casino/mall. Female Chinese teens that are reportedly employed in Kings Court and escorted by the Philippine National Police (PNP).”
In the US, Sen. Marco Rubio (R-FL) said in the Tucker Carlson Show on Fox News last May 3 that he now understands China’s broader plan that’s in play. It’s a plan that undermines the competitiveness of every country in the world to become the dominant economic, industrial and technological power. He said it’s the most important geopolitical issue that will define the 21st century’s outcome.
On my end, I view China’s economic “invasion” of the Philippines with guarded optimism PROVIDED it’s properly evaluated, channeled, filtered, monitored and controlled (when matters get out of bounds). I see it as a “boon.”
In other words, investments and spending by any country and its nationals are most welcome from the standpoint of our national interest.
But if we fail to put up the proper safeguards to keep us safe and secure, more so in our strategic resources and infrastructure — e.g., water, power, information, transportation, mining, etc. — then those could be a bane to our long-term wellbeing. It’s up to us to ensure that they can’t be used as an imperial tool to strangle and subjugate us.
Lord knows we’ve had enough bitter lessons from colonial powers to last us several lifetimes. Do you feel me?
 
Rafael M. Alunan III served in the cabinet of President Corazon C. Aquino as Secretary of Tourism, and in the cabinet of President Fidel V. Ramos as Secretary of Interior and Local Government.
rmalunan@gmail.com
map@map.org.ph
http://map.org.ph

Palace: Money in Tulfo ad deal to be returned

THE P60 million paid to a media company by the Department of Tourism (DoT) for ad placements at government network PTV-4 will be returned, Malacañang said on Monday.
Tourism Secretary Wanda Corazon Tulfo-Teo and her brothers, Bienvenido “Ben” T. Tulfo of media company Bitag Media and broadcaster Erwin T. Tulfo of PTV-4, have been under fire because of that deal.
“I’ve heard that… [they] will return the P60 million,” Presidential Spokesperson Harry L. Roque, Jr. said in his press briefing Monday.
Mr. Roque also disclosed that Ms. Tulfo’s husband, Roberto Teo, has resigned as board member of the Tourism Infrastructure and Enterprise Zone Authority (TIEZA).
Mr. Teo was appointed by the previous Aquino administration but has “long resigned,” according to a report by PTV News. But in June last year, the report said, he was appointed by President Rodrigo R. Duterte to the LBP Leasing and Finance Corp., a subsidiary of Land Bank of the Philippines.
Asked if the Tulfo siblings can just return the money without being charged, Mr. Roque said: “Well, they could do whatever they want. For now, there are no cases filed against them. As to whether or not a charge will be forthcoming, I cannot also say what the Ombudsman will do. The information is very new. I’m not even aware if the President knows about it already.”
In his interview with DZMM on Monday morning, Ms. Teo’s lawyer Ferdinand S. Topacio said: “Bagama’t wala po sa kaniya (Ben Tulfo) yung P60 million at nagastos na po, gagawa po sila ng paraan at io-offer nila na ibalik na po up to the last centavo kung anuman po ang naibayad sa kanila.” (Although the P60 million is not with him and it has been spent already, they will find a way to offer to return the money.)
Mr. Topacio also said Mr. Teo is “urging” Mr. Duterte to accept his resignation.
Also on Monday, Senator Nancy S. Binay-Angeles filed Senate resolution No. 721 calling for an investigation on the controversial advertising deal.
“We welcome the gesture of good faith by Bitag to return the P60 million TV ad payment back to the government. Nonetheless, the DoT and PTV-4 need to clarify some issues with regard how commercials are placed, and the terms of reference covering such agreements,” she said in a statement Monday.
The senator chairs the Senate committee on tourism.
For his part, spokesperson Gio Tiongson of the Akbayan party-list group said in a statement: “Sec. Wanda Tulfo-Teo announcing that BITAG will return the P60M used for PTV ads is an admission of guilt. If she had an ounce of delicadeza, she would resign. Returning the money should not stop probes for accountability. It also doesn’t correct an illegal act.” — Arjay L. Balinbin and Camille A. Aguinaldo

Labor-centered development: the change we need

Boracay shutdown. Bungled OFW rescue mission in Kuwait. Presidential signing of an executive order on contractualization unacceptable to organized labor. A common thread obviously weaves through these recent controversies: the labor-development-governance nexus.
In the Boracay case, the President’s order to “save Boracay” caused 36,000 workers to lose their jobs. In the Kuwait case, the 260,000 OFWs being urged by President Duterte to come home point to a possible immediate increase of the country’s labor statistics from 2.4 million to 2.6 million unemployed workers.
The Presidential signing of the EO, meanwhile, signals the looming erosion of the President’s image as a “strong man” capable of fulfilling all his campaign promises including the promise to end contractualization.
Certain groups have already called for the resignation of government officials involved in said labor-related controversies.
In this piece I argue that the replacement of erring, inefficient government officials, while justified, may not be sufficient to solve the labor-development-governance problem. What is needed is not just a change in government personnel but a shift in paradigms as well.
To be truly different from governments of the past, the current government must abandon its elite-centered development paradigm and work towards labor-centered development.
PARADIGM SHIFT NEEDED
According to Benjamin Selwyn, senior lecturer in the School of Global Studies, University of Sussex and author of “Workers, State and Development in Brazil” (2012) and “Global Development Crisis” (2014), elite-centered development “conceives of the poor (including laboring classes) as human inputs into or at best as junior partners within elite-led development processes.”
The centrality of the elite, Selwyn argues, is seen in both market-led and state-led development models which view development from the perspective of capital and material wealth. Labor-centered development (LCD), on the other hand, focuses on “social wealth” or “the concept of rich social beings who identify, meet and expand their own development needs.”
Selwyn posits that the following cases can be considered as examples of LCD: shack-dweller’s movements in South Africa, the landless laborer’s movement in Brazil, unemployed worker’s movements in Argentina, and large-scale collective action by formal sector workers across East Asia.
In his view, these cases have shown that “collective actions by laboring classes can generate tangible development gains” and workers can be considered as “primary development actors.”
Still according to Selwyn, the concept of LCD is inspired by Amartya Sen’s notion of development as a process of enlarging people’s choices and freedoms. It departs from Sen’s “development as freedom” framework, however, on three counts: (i) the people are not “abstract individuals” but labor or laboring classes defined as “the growing numbers… who now depend — directly and indirectly — on the sale of their labour power for their own daily reproduction” ; (ii) the needs of the labouring classes can be met through their collective action and “not by the state on behalf of the poor” and (iii) the freedoms of the labouring classes cannot be achieved within the capitalistic system of development.
REVERSING SOCIETAL PRIORITIES
A world without the economic elite may seem unthinkable, especially in the Philippine context where development has always been driven predominantly by a few powerful families. The concept of a development centered on labor instead of the elite sounds utopian and impractical for developing countries where the elite is very influential and the laboring class is very fragmented. How exactly can development be centered on a labouring class that has an underclass within it (i.e the contractuals)?
How can national development be centered on labor when a substantial section of said labor is based overseas?
Perhaps the challenge is not so much to embrace labor-centered development as a grand narrative, rather, to use it as an approach to elevate the status of labor in both the workplace and in society. This requires the reversal of societal priorities within and beyond the workplace: regular not precarious work, higher wages not cheap labor, increased and sustainable welfare benefits not pork barrel deployment, lesser not more management prerogatives, stronger not weaker unions, a public sector that is service and task-oriented not partisan-oriented, infrastructure for commuters not private car owners, affordable public schools not inaccessible private schools, universal not market-driven health care, jobs here not abroad.
PRIORITIZING LABOR
Duterte supporters may argue that the current government is exactly doing that — reversing societal priorities — and that the Duterte regime is controversial and “disruptive” precisely because it is overhauling society. The three controversies mentioned above, however, disprove such positioning. In all three cases, the needs of labor were made subordinate to government’s priority of projecting itself as a strong government. In all three cases, the negative outcomes are also highly visible: thousands of jobs actually and potentially lost, a diplomatic crisis, and, where contractualization is concerned: the status quo.
Yes, only a strong government can close Boracay for environmental concerns but should the needs of labor be deliberately dismissed or neglected in the process? Yes, only a strong government can protect and rescue OFWs in distress, but does it really need to publicize its strength in social media? Yes, only a strong government can publicly profess that it will end contractualization, but shouldn’t its actions follow its rhetoric? Why reject proposals of organized labor and privilege industry players on a policy that is supposed to address industry’s abusive labor practices?
Moreover, the current government’s economic policies are no different from those of past governments: “build build build, grow grow grow” — and such growth is simply assumed to trickle down to the masses. The development paradigm is essentially the same: equity will follow growth; ergo, there must be more incentives for capital as the drivers of growth — for only said growth can generate employment and increase incomes.
Labor-centered development, meanwhile, argues that capital will always view development in terms of where profits can be highest, not in terms of employment generation or national development. Labor-centered development thus is an alternative to capitalist development. It asserts that people cannot progress under capitalist development and that, in fact, the former suffer under the auspices of the latter.
Karl Marx, the great German philosopher, sociologist and political economist whose 200th birth anniversary we celebrate this year, already criticized this system more than a century ago. In his inaugural address to the First International in 1864, Marx declared: “It is a great fact that the misery of the working masses has not diminished from 1848 to 1864, and yet this period is unrivalled for the development of its industry and the growth of commerce.”
Who really creates the wealth of nations? Who should be enriched with the creation of the wealth of nations? As a self-proclaimed “socialist,” President Duterte should have grappled with these questions before signing that useless, misleading “anti-contractualization” executive order on Labor Day.
 
Carmel V. Abao is a faculty member of the Political Science Dept of the Ateneo de Manila University. She teaches political theory and international political economy.

Senator moves for inquiry on Chinese missiles

By Camille A. Aguinaldo
SENATOR Antonio F. Trillanes IV on Monday filed a resolution seeking an investigation into China’s deployment of missiles defense system and similar militarization activities in the South China Sea.
Senate Resolution No. 722 directs the Senate committee on national defense and security to investigate the issue “with the end… of asserting the country’s sovereignty and territorial integrity.”
“Aside from the fact that the three formations there were ruled by the arbitration court (as) part of the country’s territorial sea, we have commercial and Navy ships going to that area and the presence of missile systems is dangerous. There might be misencounters,” Mr. Trillanes said in an interview with reporters.
CNBC earlier reported that anti-ship cruise missiles and surface-to-air missile systems were deployed by China on Fiery Cross Reef, Subi Reef and Mischief Reef in the Spratly Islands, locally called Kagitingan, Zamora, and Panganiban reefs.
Senate President Aquilino L. Pimentel III earlier said the Senate committee on foreign relations, chaired by Senator Loren B. Legarda, should initially take up the South China Sea issue upon the resumption of session before the Department of Foreign Affairs (DFA) holds its closed-door briefing with the senators.
Mr. Trillanes said in his resolution that China’s ongoing militarization in the disputed waters posed a “big threat to (the) country’s national defense and security.”
“There is also a need to ensure the preservation of the country’s defense and security by fast(-)tracking the implementation of the Enhanced Defense Cooperation Agreement (EDCA) and strengthening the implementation of existing laws such as the Archipelagic Baseline Law of the Philippines, the United Nations Convention on the Law of the Sea (UNCLOS), among others,” the resolution stated.
Asked about possible resource persons in the proposed legislative inquiry, Mr. Trillanes said he would like to be briefed by security officials on the current situation on the ground and their response to the reported installations of defense missiles systems in the three features being claimed by the Philippines.
He would also ask DFA officials whether it was asserting the sovereign rights of the Philippines in the region.
Mr. Trillanes said the hearings may be held publicly or behind closed doors, depending on the sensitivity of the information.

The corporate governance system for the GOCC sector

PRINCIPLES OF PUBLIC CORPORATE GOVERNANCE
1. Full Implementation of the Stakeholder Theory in the GOCC Sector
The GOCC Governance Act recognizes that all GOCCs, whether chartered or nonchartered, are imbued with “public interest” as it declares the State policy under Section 2 thereof: “The State recognizes the potential of [GOCCs] as significant tools for economic development. It is thus the policy of the State to actively exercise its ownership rights in GOCCs and to promote growth by ensuring that operations consistent with national development policies and programs.”
The principal obligation of the State to serve the public interests must permeate through the GOCCs as instrumentalities and agencies of the National Government. Although the financial viability and fiscal responsibility is one of the primary thrust of the National Government under RA 10149, nonetheless, such State policy must have as its thrust, national development.
The goal must primarily be, to serve the public needs, rather than the proprietary right of the State to the profits derived from the operations of GOCCs.
a. Comparing with the Concept of “Corporate Governance” for PHCs
The CG Code for PLCs defines “Corporate Governance” as the “system of stewardship and control to guide the organizations in fulfilling their long-term economic, moral, legal, and social obligations towards their stakeholders.”
On the other hand, the Revised Code of Corporate Governance, defines the same term as “the framework of rules, systems and processes in the corporation that governs the performance by the Board of Directors and Management of their respective duties and responsibilities to stockholders and other stakeholders which include, among others, customers, employees, suppliers, financiers, government and community in which it operates.”
As statements of principles, both PHC governance codes have formally adopted the Stakeholder Theory as distinguished from the Stockholder Theory or the Doctrine of Maximization of Shareholder Value. Yet, as discussed in an earlier paper in this series, in their operative provisions both codes have actually adopted a hybrid corporate governance system that follows the following hierarchical placement of interests, thus:
“Principle 1 therefore sets a hierarchy of priorities for the Board and Management in the fulfillment of their duties and responsibilities to the various stakeholders:
* “First and foremost, they must foster the long-term success of the company to sustain its competitiveness and profitability — which thereby place the stockholders in the first rung of stakeholders whose interest must be served;
* “Secondly, the manner of pursuing the “foremost objective of maximization of profits,” must be consistent with the company’s objectives and long-term best interests of other stakeholders.
“The foregoing governance formula is consistent with the adage that ‘in order that a company can do good in the communities it operates in, it must necessarily do well in its business operations.’ It is also consistent with the PSE’s concept of corporate governance as a framework that governs the ‘performance by the Board of Directors and Management of their respective duties and responsibilities to the stockholders, with due regard to the stakeholders.’”
In comparison, the GOCC Governance Act mandates the interests of the public as the foremost objective of public corporate governance, and the only “stockholder’s interests” that the Government preserves for itself is that in serving the public interests, GOCC assets and resources are utilized judiciously and without unduly undermining government financial status. The Government as equity-holder of all GOCCs has no “profit maximization” objective.
Therefore, we had defined in a published work the term “Public Corporate Governance” as “constituting a set of policies, rules and processes by which the State, through its representatives and agencies, mainly through the governing boards and management of such government corporations, manage and control public resources to achieve the objectives of government through a sustainable delivery of programs and services to the public.”
In essence, the application of the Stakeholder Theory is at its purest in the public corporate governance applicable to the GOCC Sector.
In practice, the realization of the Stakeholder Theory is achieved under the proper weighing in GOCC Performance Scorecard of the two perspectives of “Social Impact” and “Stakeholders’ Interest.”
2. Primary Responsibility for Corporate Governance Is with the Board of Directors/Trustees
The leading principle of corporate governance in the private sector that “the Board is primarily accountable to the shareholders and Management is primarily accountable to the Board.”
Prior to the passage of the GOCC Governance Act, the corporate practice in GOCCs organized under the Corporation Code was for the Chairman of the Board and the CEO to be designated by the newly organized Board based on the “desire letter” issued by the President of the Philippines; whereas, in most chartered GOCCs, the charters would provide that the Chairman and CEO were appointed directly by the President. What often resulted was a diffused sense of responsibility and accountability in the public corporate setting: having received a direct mandate from the president, the CEO felt that he was not accountable to the Board headed by the chairman, but to the president directly.
The GOCC Governance Act did away with such practice and expressly provides that the CEO as head of Management “shall be elected annually by the members of the Board from among its ranks,” who shall be accountable to the Board by the fact that the “CEO shall subject to the disciplinary powers of the Board and may be removed by the Board for cause.”
In addition, as previously discussed, under the principle of “command responsibility”, it is now part of the fiduciary duties of the Governing Board of every GOCC to “[e]lect and/or employ only Officers who are fit and proper to hold such office with due regard to the qualifications, competence, experience and integrity.”
The GOCC Code of Corporate Governance, in the particular provisions quoted below, now enshrines the leading corporate governance principles best expressed as follows: “The Board of Directors (Board) is primarily responsible for the governance of the corporation. It needs to be structured so that it provides an independent check on management.” “While the management of the day-to-day affairs of the institution is the responsibility of the management team, the Board is, however, responsible for monitoring and overseeing management action.” “The Board is primarily accountable to the shareholders and Management is primarily accountable to the Board,” thus:
III. GOVERNING BOARD
SEC. 5. Board Directly Vested with Corporate Powers. — Having been vested directly by law with the legal capacity and authority to exercise all corporate powers, conduct all the business, and to hold all the properties of the GOCC, the Governing Board is primarily responsible for the governance of the GOCC. Consequently, it is the Board and not Management, that is primarily accountable to the State for the operations and performance of the GOCC.
SEC. 6. Board Duty to Properly Select and Provide Independent Check on Management. — Concomitant with the power to elect the CEO from among their ranks and to appoint other Officers of the GOCC, it is the duty of every Governing Board to ensure that they elect and/or employ only Officers who are fit and proper to hold such offices with due regard to their qualifications, competence, experience, and integrity. The Board is therefore obliged to provide an independent check on Management.
SEC. 7. Mandate and Responsibility for the GOCC’s Performance. — Although the day-to-day management of the affairs of the GOCC may be with Management, the Board is, however, responsible for providing policy directions, monitoring and overseeing Management actions, as articulated in its Charter or Articles of Incorporation, and other relevant legislation, rules and regulations.n
The 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
 
Cesar L. Villanueva is the Vice Chair of the Corporate Governance Committee of the Management Association of the Philippines (MAP), the former Chair of the Governance Commission for GOCCs and the Founding Partner of the Villanueva Gabionza & Dy Law Offices.
cvillanueva@vgslaw.com
map@map.org.ph
http://map.org.ph

Nationwide Round-Up

Sereno ouster via quo warranto a threat to democracy — VP

VICE-PRESIDENT Maria Leonor G. Robredo said ousting Chief Justice on-leave Maria Lourdes P.A. Sereno through the Supreme Court will pave the way for the use of quo warranto as “a weapon of intimidation, to kill dissent.” Ms. Robredo pointed out that the Constitution, which is intended to protect rights, only allows officials such as the chief justice, the ombudsman, or the chairman of the Commission on Audit to be removed through impeachment with the Senate acting as the court. “Our Constitution ensures that they cannot be strong-armed by those who are in power,” Ms. Robredo said on Monday in her speech at the Free the Courts: A Justice Forum. “If our justice system defies the Constitution which is the sacred cornerstone of all our laws, wouldn’t that be the end of our nation as we know it?” she added. Likewise, Integrated Bar of the Philippines President Abdiel Dan Elijah S. Fajardo, who had previously sought the dismissal of the quo warranto case, said the decision “will open the floodgate to questions on the qualification” of every impeachable officer. The SC is reportedly set to decide on the quo warranto case on May 11, ahead of the resumption of congressional sessions on May 15. According to Mr. Fajardo if the high court rules in favor of Solicitor General Jose C. Calida’s petition, Ms. Sereno may file a motion for reconsideration. — Charmaine A. Tadalan

Rappler CEO: Tax evasion charge is political harassment

RAPPLER CHIEF Executive Officer Maria Ressa on Monday appealed to the government “to (let) journalists do their jobs” in response to the P133-million tax evasion case filed against her and the online news company. In the eight-page joint counter-affidavit submitted to the Department of Justice, she described the complaint as “another case of political harassment” and that it “shows ill intent of intimidation… or just plain incompetence.” “This is another instance where you have a case of political harassment because we’re journalists trying to do our job,” Ms. Ressa told reporters. She added: “I am a citizen in good standing, a journalist with decades of experience, and by filing these charges before they investigate and let me say that — by filing the charges before any investigation they violated my constitutional rights.” The Bureau of Internal Revenue (BIR) accused parent company Rappler Holdings Corp. (RHC) and several officials of providing inaccurate information on its 2015 income tax and value-added tax returns, citing that the company was involved in the trading of Philippine Depository Receipts. BIR has calculated the tax liability at more than P133.8 million. Ms. Ressa, however, said “this charge, is absolutely false.” Lawyer Eric C. Recalde pointed out: “There was no tax evasion, there was no intent to avoid tax” and that “there’s no way the company could be considered to be a dealer in securities which is essentially the basis why the BIR treated the transaction to be a buy and sale of securities allegedly subject to taxes.”— Dane Angelo M. Enerio

Albayalde: Lower crime incidents a sign of “winning” the drug war

POLICE DIRECTOR General Oscar D. Albayalde said the government is winning its war against drugs as indicated by the drop in crime incidents, but admitted that the entry of illegal substances remains a challenge. “To be honest, illegal drugs is still a big problem; we must admit that,” Mr. Albayalde said in a press briefing on Monday, citing difficulties in tracking everything that enters the country’s borders. “[The progress] is difficult to quantify… but with what we see in its effects [on peace and order], we know that we are winning this war against illegal drugs,” Mr. Albayalde added. The Philippine National Police (PNP) reported 142,069 drug personalities arrested and 4,251 killed in anti-drug operations as of April 30. Of those arrested, 504 are government workers, 239 government employees, 217 elected officials, and 48 uniformed personnel. A total of 2,676.60 kilos of shabu (methamphetamine) with street value of P13.81 billion were seized since July 1, 2016. Meanwhile, 184,252 surrenderers graduated from the PNP recovery and wellness program. — Minde Nyl R. dela Cruz

PHL-US military exercises begin amid China’s missile installations

THE PHILIPPINE-United States Balikatan Exercises this year was launched Monday amid the reported installation of anti-ship and surface-to-air missile systems in the disputed Spratly Islands by China. Officials of both countries said Beijing’s actions do not affect the regular joint military exercises, now on its 34th edition. Philippine Exercise Director Lieutenant General Emmanuel B. Salamat said both the Philippines and US “intend to focus our activities in the [objectives] that we have set…” For his part, US Exercise Director Lieutenant General Lawrence D. Nicholson said the activities for the two-week bilateral exercise “was scheduled whether those missiles were there or not.” Balikatan 2018 will focus on humanitarian assistance and disaster relief and counter-terrorism. The US Embassy, in a statement, said “regional partner nations” Australia and Japan will also be participating in the major training events of the exercises. — Minde Nyl R. dela Cruz

All agencies, GOCCs ordered to answer public concerns in 15 days

PRESIDENT Rodrigo R. Duterte has issued Memorandum Circular (MC) No. 44 directing all government agencies and instrumentalities, including government-owned and controlled corporations (GOCCS), to respond to all public requests and concerns within 15 days.
Mr. Duterte and Executive Secretary Salvador C. Medialdea signed the memorandum in Manila on May 4, according to a certified copy of the document released to the Palace reporters on Monday, May 7.
The purpose of the memorandum is to foster “transparency and accountability” among government agencies.
“The State shall provide the means to strengthen the people’s channel of communication to the government by promoting and emphasizing the importance of responsive and service-oriented government agencies and instrumentalities,” the MC explains.
The President’s memorandum also cites Republic Act (RA) No. 9485, or the Anti-Red Tape Act of 2007, which provides that the State shall take appropriate measures to promote transparency in each agency with regard to the manner of transacting with the public, with the objective of reducing red tape and expediting transactions in government.
The MC, therefore, directs all agencies and instrumentalities, including GOCCs performing frontline services as so defined by the circular, to respond to all public requests and concerns within fifteen (15) days, unless a shorter period is provided under applicable laws and issuances.
The memorandum “takes effect immediately.” — Arjay L. Balinbin

Fuel prices roll back this week

Oil prices drop this weekOIL COMPANIES will be rolling back the cost of petroleum products this week to reflect the movement of prices in the international market. Kerosene will have the biggest price cut at P0.60 per liter (/L), with prices of both gasoline and diesel dropping by P0.30/L. Seaoil will be among the first to cut prices at 12.01 a.m. on Tuesday, May 8. Most will be rolling back prices at 6:00 a.m. on the same day. Last week, gasoline, diesel and kerosene prices rose by P0.85, P0.70 and P0.70, respectively. — Victor V. Saulon

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