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China Nov. export, import growth shrinks, showing weak demand

BEIJING — China reported far weaker than expected November exports and imports, showing slower global and domestic demand and raising the possibility authorities will take more measures to keep the country’s growth rate from slipping too much.
November exports only rose 5.4 % from a year earlier, Chinese customs data showed on Saturday, the weakest performance since a 3 % contraction in March, and well short of the 10 % forecast in a Reuters poll.
Analysts say the export data showed that the “front-loading” impact as firms rushed out shipments to beat planned U.S. tariff hikes faded, and that export growth is likely to slow further as demand cools.
The customs data showed that annual growth for exports to all of China’s major partners slowed significantly.
Exports to the United States rose 9.8 % in November from a year earlier, compared with 13.2 % in October.
To the European Union, shipments increased 6.0 %, compared with 14.6 % in October. Exports to South Korea fell from a year earlier, while in October they rose 7.7 %.
SLOWEST IMPORT GROWTH SINCE 2016
Import growth was 3 %, the slowest since October 2016, and a fraction of the 14.5 % seen in the poll. Imports of iron ore fell for a second time, reflecting waning restocking demand at steel-mills as profit margins narrow.
“The sluggishness in imports and exports is in full swing,” said Wang Jun, chief economist of Zhongyuan Bank in Beijing.
The soft imports “show a relatively significant pullback in domestic demand”, he added.
In recent months, Chinese exports had expanded robustly, which economists said reflected front-loading of cargoes before a now-postponed plan to hike U.S. tariffs of $200 billion of Chinese goods to 25 % from 10 % on Jan. 1.
The November trade numbers came out less than a week after Presidents Donald Trump and Xi Jinping agreed to a 90-day truce delaying that tariff hike as they negotiate a trade deal. November’s China numbers might add a sense of urgency.
Stirring fears of a reignition of trade tension, the daughter of Huawei Technologies’ founder, a top executive at the Chinese technology giant, was arrested in Canada on Dec. 1 and faces extradition to the United States, threatening to drive a wedge between the U.S. and China.
TALKS ‘GOING VERY WELL’
U.S. President Donald Trump on Friday sounded an optimistic note about trade negotiations with China as his top economic advisers downplayed friction from the arrest of Meng Wanzhou.
“China talks are going very well,” Mr. Trump said on Twitter, without providing any details.
In a note, analysts at Haitong Securities in Shanghai said “Growth in shipments of Chinese goods on U.S. 200 billion tariff list has started to pull back, indicating that frontloading effects may be starting to recede.”
“Now with U.S. and China agreeing not to escalate trade tensions any longer, China will start purchasing U.S. agricultural goods, which may narrow China-U.S. trade surplus in the future,” they said.
China’s November trade surplus with the United States was a record $35.55 billion. The October surplus was $31.78 billion. But China’s imports from the U.S. in November fell 25 % from a year earlier, while the annual decline in October was only 1.8 %.
For trade with all countries, China’s surplus was $44.74 billion for November, compared with forecasts of $34 billion and October’s surplus of $34.02 billion.
On Thursday, the U.S. reported that its global trade deficit in October jumped to a 10-year high, and that the deficit with China surged 7.1 % to a record $43.1 billion.
THE WEAKER YUAN
Economists say one factor helping keep up Chinese exports this year is that the yuan has weakened more than 5 % against the dollar, helping to make Chinese products more competitive abroad.
Jonas Short, head of the Beijing office of brokerage Everbright Sun Hung Kai, said the weaker yuan “should boost industrial exports over the coming months. Typically there is a six-month lag between the value of industrial export orders and currency movements.”
Economists in recent months have penciled in a deterioration in China’s export outlook in 2019, factoring in higher U.S. tariffs on a wider range of Chinese goods.
Chinese policy makers are expected to offer more policy support and deliver more support measures if domestic and external conditions continue to deteriorate.
China’s central bank has cut the amount of cash that banks must hold as reserves four times this year, as policy makers seek to steady the slowing economy amid the trade war with the United States.
The government aims for growth of around 6.5 % this year, compared with 2017’s 6.9 % pace.
Yang Yewei, an analyst at Southwest Securities in Beijing, said that as global demand cools, “domestic growth-boosting measures should be more effective”. — Reuters

Traders bet Fed will need to slow rate hikes next year

TRADERS of U.S. short-term interest-rate futures stuck to bets on Friday that the Federal Reserve will need to slow its pace of rate hikes sharply next year, after a government report showed employers made fewer than expected hires in November.
The addition of just 155,000 jobs last month, less than the 200,000 expected, further entrenches rising doubts in financial markets that the Fed will stick to the three rate hikes it had just a few months ago penciled in for next year.
Doubts about the Fed’s 2019 rate-hike path have also been recently stoked by a sizable stock-market selloff and increased worries about a global slowdown and waning U.S. fiscal stimulus. Recent comments from Fed Chair Jerome Powell about the need to “slow down” when conditions are uncertain have added to skepticism that the Fed can keep raising rates anywhere near the quarterly increases it has delivered for most of the past two years.
Traders of contracts tied to the Fed’s policy rate are pricing in only a single hike next year. Fed policy makers will release fresh forecasts after their next meeting later this month, at which they are widely expected to deliver a fourth and final rate hike for 2018.
“The report is not soft enough to deter a December rate hike but it will contribute to a downward revision in central bankers’ policy guidance for rate hikes in 2019,” said Mohamed El-Erian, chief economic adviser at Allianz in Newport Beach, California. — Reuters

Fast-tracking digital transformation

In a previous article in this column, we spoke about how important it is for company leaders to become digital-enabled in today’s disruption-led competitive landscape. We discussed how digital age leaders are not only better equipped to meet emerging business challenges and changes in the competitive landscape, but are also delivering better financial performance for their companies.
We will now consider some ways for digital-age leaders to fast-track the digital journey for their organizations by changing traditional leadership mind-sets and work processes.
For organizations to compete and excel in this new digital age, its leaders will need to develop new skills, competencies and capabilities within their organization, as well as new models, policies and work processes. This is not something that can be achieved simply through formal training and learning programs; digital is something that needs to be “lived” and assimilated on a daily basis. For the digital journey to progress rapidly, the workplace needs to become the learning environment, with everyone in the organization learning something new every day.
“Going digital” is not the same as “being digital,” i.e. it’s not simply a matter of acquiring new technologies and platforms, but about making the digital mind-set and its related traits – innovation, technical flexibility, always-on access to information, creativity and resourcefulness, among others, truly ingrained into the organization’s corporate psyche.
An article in the Global Leadership Forecast 2018, a joint research project by EY, Development Dimensions International, Inc. and the Conference Board, highlights three critical elements that help organizations accelerate their digital journey:
LEARNING
Building an organization led by digitally-capable leaders means the workforce and the work environment must both be open to constant learning. For digital-age leaders, this means taking charge of their training and development, including voluntarily taking on stretch goals to gain new and up-to-date skills. Digital-age leaders are also active in providing feedback on how to improve the business, as well as soliciting feedback on how to enhance their own development.
With interaction in a learning-rich environment, leaders grow more confident and adaptable to change and challenges, becoming more decisive and able to navigate complexity with more ease. They also become more adept at using data to make decisions.
WORKING
New business paradigms demonstrate that today’s high-performing work environments are purpose-driven, team-based and have shallower hierarchies. The workplace of the future incorporates workforce mobility and high-quality technology experiences, and getting this right can help drive engagement, productivity and talent development. One thing to note is that in a digital work environment, people are encouraged, and may even be rewarded for failure in the pursuit of innovation. Such cases often provide valuable learning opportunities and the promotion of a strong experimental mind-set that is focused on finding solutions rather than being fearful of making mistakes.
PEOPLE
To support the digital transformation journey, an organization’s talent and leadership structures will also need to evolve. This is where the human resources (HR) function comes in, although it also means that HR needs to likewise become more nimble, digital-savvy, data-driven and cognizant of the changing needs of the business and the expectations of its people.
Digital-age HR leaders need to develop skills in digital technologies and analytics to better develop relevant people models, including new reward models, workforce mobility programs, an innovation-driven workplace, and the challenges of integrating “digital employees” with earlier generations of employees. Some areas where digital HR comes into play include developing digital literacy; automating certain tasks (e.g. self-service portals); administrative functions (e.g. payroll, attendance and record-keeping); and managerial functions (e.g. performance management and compensation).
QUALITIES OF A DIGITAL ORGANIZATION
The benefits of accelerated digital transformation can be considerable. The article mentions that digitally-mature organizations are more likely to have stronger cultures. They’re more focused on future possibilities rather than past constraints, and are more agile and analytics-driven. Perhaps more importantly, such organizations tend to encourage and reward experimentation, which further drives innovation.
In a 2018 report, IDC Philippines predicted that digital transformation will be the main agenda item for many companies in the next 12 to 36 months. It notes that in a thriving Philippine digital ecosystem, organizations must evolve to become digital-native enterprises, driven by an increasing appetite for technology as both a tool and an enabler for business leaders. This sentiment was validated in another IDC Asia/Pacific study, this time commissioned by Microsoft where they anticipated an increase to the Philippines’ GDP by $8 billion by 2021.
Digital savviness is an acquired competence; it is for the taking by anyone with an openness to learning new skills and vistas. With digital transformation of organizations being a top-of-mind priority among global and local business leaders alike, companies are encouraged to explore the right strategy to accelerate their digital journey right now before competition – and even newer technology – outpace them.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.
 
Rossana A. Fajardo is the Advisory Service Line Leader of SGV & Co.

Coping with FIRe

I had the privilege to listen to Dr. Aniceto Orbeta of the Philippine Institute for Development Studies (PIDS), the government think tank, when he made a presentation on Labor and Global Development before the People Management Association of the Philippines.
Now, the FIRe in the title of this column doesn’t refer to firing laborers but rather the shorthand for what Dr. Orbeta in his presentation calls the Fourth Industrial Revolution (FIRe). According to Dr. Orbeta, the First Revolution was about steam, water, and mechanical production equipment, starting about 1784. The Second Revolution was about division of labor, electricity, mass production, and the assembly line, which started about 1870. The Third Revolution happened around 1969 with electronics, computers, Internet, and automated production.
On the other hand, the Fourth Industrial Revolution is ongoing, characterized by cyber-physical systems. Quoting Dr. Klaus Schwab, founder of the World Economic Forum, the Fourth Industrial Revolution is characterized by the “fusion of technologies that’s blurring the lines between physical, digital, and biological spheres.” Some examples of this are 3D printing, autonomous vehicles, artificial intelligent assistants, etc.
What’s significant about the FIRe is that it will have a huge impact on labor, employment, and even the nature of work. So, why should we care?
Because many jobs will be affected. According to the International Labor Organization report on the Philippines cited by Dr. Orbeta, about half of all wage workers will be affected to some degree by automation. Carpenters, office cleaners, and fishery laborers face the risk of automation. However, the greatest risk is faced by workers in the Business Process Outsourcing (BPO) sector, when chatbots and the like displace call center agents.
Dr. Orbeta listed the top ten jobs that will be replaced by Artificial Intelligence: telemarketers, bookkeeping clerks, compensation and benefits managers, receptionists, couriers, retail salespeople, proofreaders, computer support specialists, market research analysts, and advertising salespeople.
Actually, AI will affect even high end jobs. Radiologists will someday be replaced by AI as AI has become so good at reading xrays, CTscans, and MRIs. I have read that even hotel workers are very leery of the onslaught of AI in the hotel and travel industry. There will soon come a day when a concierge will be replaced by Amazon’s Alexa or Google’s Assistant (voice-enabled Intelligent Assistants).
As the Jewish historian Yuval Noah Harari said, with AI, the majority will no longer be the “working class,” but the “useless class.”
I can’t help but think that our labor groups and many of our political leaders are like ostriches, burying their heads in the sand, while a technological typhoon of Yolanda proportions is threatening to sweep away entire categories of jobs. The only policy prescriptions you can get out of these politicians are increasing minimum wages and ending “ENDO” or contractual work, when the entire world is moving in the opposite direction.
It’s not all doom and gloom, however. There are opportunities too in the new jobs that will be created. After all, there are some jobs that didn’t even exist ten years ago, according to Dr. Orbeta, such as Uber driver, social media specialist, cloud engineer, Youtube content creator, and drone operator. I’ve also read that the Internet of Things (IoT) will create a huge demand for IoT technicians and programmers, replacing the “blue collar” workers characteristic of the industrial age.
However, how do we adjust to the destructive power of FIRe on jobs and take advantage of opportunities? Well, one way not to adjust to it is to reduce labor flexibility, exactly the kind of thing that our politicians are trying to do, with their fixation on “ending ENDO” and increasing minimum wages. In fact, labor flexibility will become the norm with the onset of the “gig economy.” We are already seeing this in the rise of independent Uber and Grab drivers, who enjoy no security of tenure but who work only when they want to work. Many also get part-time jobs with platforms like Craigslist or Outsourcely.
The key to the adjustment is education. First, there should be emphasis on basic education — reading, writing, math, science, and learning how to learn — rather than specialized competencies. Specialized skills can get obsolete pretty fast. As an employer, I remember interviewing candidates for programming who studied Cobol or Microsoft Basic in school, rather than the newer languages, such as Java or Ruby on Rails, which are requisites today. Also, computer schools don’t teach cloud engineering despite the fact that most computing will go “cloud” (Internet-based services) in the coming years.
The graduates of the future, therefore, must be skilled in “learning how to learn,” or rather, unlearning what has become obsolete and learning the new, new thing — continuously and persistently.
In this regard, cheap and accessible broadband is necessary because one can self-learn what’s new and relevant in the Internet. It’s therefore a shame. and one sign that our people will be unprepared for FIRe, that we have among the slowest and most expensive broadband in the world. However, bills such as the Public Service Act Amendment and the Open Data Transmission Act which will partially fix this problem are still stagnating in the Senate.
Second, education must be relevant to the needs of industry. Academic institutions too often are divorced from industry’s needs. Many schools are just diploma mills, turning out unemployable graduates.
Moreover, we are ignoring an important kind of learning — learning on the job or “learning by doing.” This is why it’s important that the Senate pass the Labor Apprenticeship bill, which seeks changes in the Labor Code. The present Labor Code limits apprenticeship to only six months and for technical industries alone, thereby discouraging labor apprenticeship.
Aside from education, we also need to re-imagine social protection. As Dr. Orbeta notes, social protection presently is tied to the job, rather than to the worker. Furthermore, social protection should involve the need for workers’ lifelong learning and education, and for safety nets when they get laid off from jobs through job displacing technology.
However, is anybody listening? I doubt it. Nobody speaks for the unemployed or the future unemployed. Labor unions and the Communist Left — neo-Luddites all — just air populist, but irrelevant, demands for higher minimum wages, labor security, and nationalist protection. These policies aren’t going to protect jobs from being shredded.
Indeed, nobody is seriously looking at the economic and social problems that FIRe will spawn, except for a few like Dr. Orbeta. It’s totally absent from the national discourse.
Unfortunately, all our leaders do in the face of FIRe is to keep posturing about being champions of labor, but like King Canute, they cannot turn back the tide. As US President Donald Trump would say, sad, sad.
Dr. Orbeta’s presentation can be downloaded here: https://bit.ly/2rhYHAB.
 
Calixto V. Chikiamco is a board director of the Institute for Development and Econometric Analysis.
idea.introspectiv@gmail.com
www.idea.org.ph

The Reproductive Health Story

One of the most difficult pieces of legislation that the Philippine Congress has tackled is Reproductive Health (RH). The book titled The RH Bill Story: Contentions and Compromises, authored by Marilen J. Dañguilan (Ateneo de Manila University Press, 2018) narrates and explains how it is so. And more importantly, the book shows how to overcome such adversity in making the RH Bill a law.
The difficulty is partly explained by knowing what RH really is. Different people or entities have different meanings for RH.
What exactly is RH? Family planning? Population control? Artificial contraceptives? Abortion? Poverty alleviation? Development strategy? Choice? Empowerment? Dañguilan surfaces these questions and answers them not on the basis of what she thinks but by way of documenting the debate and controversies surrounding the bill and how these were resolved (though not completely) through legislation.
According to the International Conference on Population and Development Programme of Action, RH is “a state of complete physical, mental and social well being and not merely the absence of disease or infirmity, in all matters relating reproductive system and to its functions and processes.” For a lay reader and even the politician, this definition is abstract and high-falutin.
That RH as an idea is a complex one already makes it a challenging advocacy. But the real difficulty, the main impediment, in having it passed is the most resolute, most relentless opposition from a particularistic interest, the Roman Catholic Church.
The literature on collective action explicates the puzzle of how a highly organized minority, in this case, the Catholic Church, can influence policy making. In gist, the minority — very organized, highly dedicated and motivated, and endowed with huge resources — has much to lose in the passage of RH. (The Church as an institution is, in this specific context, the minority. The majority of the population and the majority of Catholics favor RH.)
The public has much to gain from RH in terms of empowering women, reducing maternal deaths and promoting health, alleviating poverty, and the like. RH is thus public interest. But one individual citizen, the poor especially, cannot immediately calculate the greater public benefit. The cost to her of joining the RH advocacy (for example, the cost of forfeiting work to engage in mass action and lobby) can be arguably bigger than the future personal benefit she might be able to get from RH. Or she can enjoy the future benefits without being organizationally involved and by freeloading. After all, RH is a public good.
The common politician, or the traditional politician, on the other hand, makes calculations based on whether his position on the issue translates into votes. He will listen to public opinion, and here public opinion supports RH. But he also has an understanding that public opinion on the issue does not necessarily translate into votes. The majority of those who favor RH do not cast votes solely on the basis of the RH issue. To illustrate, Senator Koko Pimentel was against the RH bill, but many pro-RH voters still voted for him because of other reasons — his overall record, his support for sin taxes, his support for local governments, his being a bar topnotcher, his being the son of Nene Pimentel, etc.
The wise traditional politician likewise knows that while there is no “Catholic vote,” there still is a solid number of Catholics who will vote purely on the basis of his stand on RH. This solid RH bloc, even though a minority, still constitutes a big number of votes.
In this light, Dañguilan’s RH Bill Story is an essential read not only for the health practitioners but also for all those who pursue or follow public policy and advocacy. This is a story that provides key insights and lessons for politicians and policy makers, technocrats and social scientists, civil society organizations, reformists and revolutionaries, journalists, and opinion makers.
The lessons are drawn not only from the collective experience of RH advocacy but also from Dañguilan’s own experiences. She is a veteran in the crafting of public health legislation or policies, but the RH episode is the toughest one.
Dañguilan reminds advocates to be focused on a singular objective, to be aware of the pitfalls of having a too comprehensive bill, to communicate clear and simple ideas, to accept compromises without sacrificing the essentials, to seriously listen to adversaries and respect them.
On the latter, note how Dañguilan portrays the late Rep. Roilo Golez in her story. She depicted Golez, a staunch if not stubborn RH oppositionist, as an articulate, intelligent opponent. Dañguilan’s evenhandedness also shows in her treatment of Rep. Edcel Lagman, the RH Bill principal sponsor in the Lower House. Dañguilan points out the compelling pro-RH arguments raised by Lagman when he debated with the likes of Golez. But she also narrates how Lagman unreasonably thumbed down valid arguments of the opposition. (For example, Lagman questioned the integrity of the data presented by Golez, despite the fact that Golez cited a reliable source.)
But no doubt about it, through Dañguilan’s narration, we can agree that Lagman, for his persistence, persuasion and bullheadedness, was most instrumental in having the RH Bill passed.
Most admired was the role of the late Sen. Miriam Defensor Santiago in the passage of RH. Dañguilan highlights Defensor Santiago’s sponsorship speech for the RH Bill. What made Defensor Santiago’s sponsorship most distinctive, most compelling, and most edifying was her use of Vatican documents to muster support for RH!
The victory of the RH struggle cannot be attributed solely to the heroics of politicians like Defensor-Santiago and Lagman and for that matter former President Noynoy Aquino. Dañguilan also makes an accounting of how nongovernment actors like the Reproductive Health Advocacy Network, Likhaan Center for Women’s Health, and other health or public-interest groups contributed to the success of the advocacy.
The book is comprehensive and detailed. It documents the post-dictatorship history of the development of RH, culminating in its legislation. Culmination might not even be the exact term, for the law continues to face threats and challenges.
Despite its comprehensiveness and richness in details, much still has to be said about the RH legislation. More stories have to be told by many others who participated in this great struggle.
The RH epic has a cast of thousands of protagonists. And their stories likewise have to be told. I remember how the doctors in the sin tax advocacy shifted their focus on the RH Bill after the sin tax was won. I remember how Rep. Sid Ungab, then chair of the ways and means committee, made skillful political negotiations to ensure victories for both the sin tax and RH legislation. I remember how the late Rep. Dina Abad, without publicity, worked for the additional RH votes, engaging politicians and civil society advocates alike, even as she was busy championing other worthwhile issues.
Dañguilan’s RH Bill Story has unleashed such remembering. And my hope is that her book will lead to more storytelling about how RH was won.
But Dañguilan’s book is not just for posterity. It is a reference for continuing and future struggles. The RH is essentially about being pro-women; hence, it also rejects misogynism and sexism. To quote Dañguilan, sadly, “the misogynism and sexism continue to run deep.”
 
Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.
www.aer.ph

The OPC dons the corporate veil

The bicameral conference committee in Congress has approved the reconciled version amending the 38-year-old Corporation Code of the Philippines to improve the country’s business climate for large and small businesses and to make it easier for investors to set up businesses (The Philippine Star, Nov. 28, 2018).
“Doing business in the country still presents many complexities, as reflected in the World Bank ‘Ease of Doing Business 2017 survey’ where the Philippines dropped seven spots from 164th to 171th in the ‘Starting a Business’ aspect,” Senate Minority Leader Franklin Drilon, author and sponsor of SB 1280, said after its unanimous approval at the Senate (senate.gov.ph, Aug. 7, 2018). “We must provide an environment conducive not just to big businesses, but make the corporate vehicle an appealing prospect for startups and entrepreneurs,” Drilon stressed (Ibid.).
“Our laws have not been updated…The old law, which set numerous and stringent incorporation requirements, discouraged individuals from setting up a business,” according to the lawmaker (Philstar, op. cit.). To make it easier to do business especially for small operations, the “One Person Corporation” is now to be allowed under the Revised Corporation Code (RCC).
What is this One Person Corporation — “OPC”?
In the final draft of the RCC, Chapter III is added on Special Corporations, defining the one-person corporation as “a corporation with only a single stockholder who is a natural person or a juridical person.” Section 10 of the (old) Code was changed, removing the five-person minimum number of incorporators (maximum number is still 15) and the requirement that the incorporators shall be of legal age (https://www2.deloitte.com summary-corporation-code). Sec. 120 stipulates that the minimum amount of authorized capital stock for a one-person corporation is P1 million, to be paid by the one person stockholder in one lump sum at the time of incorporation and physically separated from the personal funds of the single stockholder.
Sec. 23 now defines that “the one-person corporation shall have only one director or trustee” (Ibid.). In the final draft of the RCC, Sec. 124, “the single stockholder shall be the sole director, president (or chief executive officer) and treasurer (or chief finance officer) of the one person corporation.” But there should be a corporate secretary other than the single stockholder (Sec. 125). Obviously, board and management meetings are not required.
It is the single stockholder/director who should “maintain a minutes-book in which shall be entered in writing all actions, decisions, resolutions taken by the one-person corporation, signed by the single stockholder/director, at the time the action, decision or resolution is made” (Sec. 131). But the corp sec would “manage the files” (including the minutes-book) and take care of compliance submissions as well as adherence to the articles of incorporation (no by-laws required). He/she also takes care of the transition of the OPC to a regular (multi-owned) corporation or dissolution in case of the single owner’s death, and the pre-established nominee/s to replace the single owner (Sec. 125).
Sec. 132 warns that there shall be no co-mingling of property. “Where the single stockholder cannot prove that the property of the one person corporation is independent of his own property, he shall assume the joint and several liability for the debts and liabilities of the one person corporation.” It is this section in the final draft that calls on the doctrine of “piercing the corporate veil” — how and how difficult would it be to now distinguish the natural person or juridical person from the separate and detached identity that is the OPC?
It would be most convenient for the single-person incorporator/stockholder to claim that separateness and distinguishability of the OPC and him/herself, where it is precisely the motivation for forming the OPC, in the first place. As with a regular (severally-owned) corporation, creditors, suppliers and other publics (including inheritance lines) would be limited to claim indebtedness and contractual obligations only on the assets and capital pledged and committed to the OPC by the single owner, separate from the single owners own unpledged other assets and obligations. In other jurisdictions where the OPC is established (like in the US), these are guided by common law rules on Limited Liability Corporations (LLCs), and in fact distinctions blur in favor of the one owner who may have committed transgressions in dealings with the public and with government (e.g., taxes).
So withered and tired is the old Single-proprietorship mold of a single owner doing straightforward business, risking all personal assets for honest returns. Who will still register as Single Proprietor? Are even the motivations of Partnerships aligning for shared profits from shared personal liabilities to be now more carefully discerned? The virgin OPC in the Philippines dons the corporate veil.
Regulation and monitoring of the OPC would seem to be more difficult, as the OPC would be a one-person operational efficiency and compliance machine, expected to be guided by a conscience for good governance and corporate ethics. At least in multiple-owned corporations, individual consciences and talents might provide for healthy differences in opinion and style that would install natural checks and balances within the corporation. And for the publics that the OPC would deal with, these banks and other lenders, suppliers, buyers etc., would have less confidence and more risk, lacking the internal audit and the devolution of roles and responsibilities in the various operators a regular corporation would have. A heightened “Buyer beware” reaction might dampen interests of investors and lenders. Ease of doing business might increase for the OPC with its new-found powers, but would it be easy for the “other side,” with the increased due diligence that must be done on OPCs and their limited assurances?
In the chart of changes set up by Deloitte Philippines just objectively comparing the final draft with the old Code, there was a Section 122 in the draft RCC, that “any person, trust, estate or account may only incorporate and maintain one one-person corporation at any given instance. A one-person corporation may not incorporate a new one person corporation.” This has been revised further in the bicameral draft RCC to allow one person to form at most five (5) OPCs, according to a source from the SEC. A non-legal mind looking at this change might be even more worried.
The amendment and improvement of the Corporation Code had been studied since 2012 by the Securities and Exchange Commission (SEC) under then-Commissioner Teresita Herbosa, with consultations from concerned agencies like the Bureau of Internal Revenue (BIR) and the Department of Finance (DoF), and testing/vetting with affected publics through discussions with academe and interactive lecture campaigns with trade and professional groups.
One of the main improvements under SB 1280 is the perpetual existence of a corporation (unless otherwise provided in the Certificate of Incorporation). This is a response to calls that a corporate term of 50 years under current rules is too short; corporations are intended to survive beyond the lifetime of its incorporators (BusinessWorld, Aug. 27, 2018).
The more important sections added are those on good governance and corporate ethics, which define more stringently the duties and responsibilities of corporate directors, including clear qualification standards, and sanctions by the SEC, now granted limited penal powers in the new revised Corporation Code.
 
Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.
ahcylagan@yahoo.com

Attractiveness

Business and politics can be superficial, even judgmental. Studies show that those with youthful, symmetrical faces are three times more likely to bag an interview or close a deal as compared to those with lopsided, aging faces. A survey conducted by Forbes magazine confirmed that attractive people enjoy a five percent earnings advantage over those deemed unattractive. Making matters worse for unattractive people is that their earning capacity diminishes at an accelerated rate over time while that of attractive people diminishes at a remarkably slower pace.
In politics, a Finnish study found that male and female political candidates who look better than their opponents enjoy a 20% advantage in approval ratings (so long as their opponent is a non-incumbent). In other words, unattractive candidates must work and spend 20% more to equalize the advantage of their better looking political foes.
In a perfect world, looks should not matter. However, we are wired, on a primal level, to favor people who look healthier, younger and better proportioned.
Unfortunately, not all of us have won the genetic lottery. Some are blessed with good looks while others are challenged. We are born with the face we have and we must make the most of it. There are many ways we can increase our level of attractiveness — grooming and appropriate dressing is one way. Good posture and a confident stride is another. Eye contact and a pleasant facial expression help too. But what happens when these are not enough? What are the options available for those born with unfavorable genes and those whose faces are marred with the creases of time?
OLD REMEDIES
I grew up in the 1980s, when facelifts and facial augmentations were becoming increasingly popular. Many of my aunts and uncles were early adaptors, having had numerous procedures done. As a child, I personally witnessed how bloody and painful the process can be. Back then, a facelift involved multiple lacerations on the scalp and around the ears. The skin would be pulled back and held in place by sutures. It took months to heal. If one was lucky, the sutures would fade away over time and appear only as light scars. The unlucky ones would have to live the rest of their lives with keloids or scars that look like centipedes.
I am now the age of my aunts and uncles and my face shows it. Although I am at peace with having jowls like saddlebags and more creases on my face than the fenders of a Lamborghini, I know it is within my power to get rid of them through a medical procedure.
I have ruled out a surgical facelift since I have seen how the scarring can be worse than the jowls and facial lines it sought to remove. It is also invasive, painful and would require too much time to heal. Like most businessmen, I cannot afford to be incapacitated for more than a couple of days.
I was resigned to live with my aging face until a good friend of mine, Melanie Lantin, told me about the latest technologies in aesthetic science. Melanie is the owner of Medicomm Pacific, Inc., the country’s foremost publisher of medical books, magazines and online medical applications. They are the company behind the highly successful Philippine Pharmaceutical Directory, The Filipino Doctor and, soon, the eRX mobile application. This makes her privy to the latest developments in the medical field.
Melanie suggested I look into the Happy Lift and Skinfill technologies.
HAPPY LIFT TECHNOLOGY
I spoke to Riza Magallon, the Marketing Manager of the Menarini Pharmaceutical Group. Menarini is a 130-year-old Italian pharmaceutical company with a footprint in more than 100 countries. Riza recently briefed me about Happy Lift and Skinfill technologies.
In the last thirty years, the advances made in face lift and facial features augmentations have been phenomenal, explained Riza. Cuts and sutures on the scalp and ears are no longer done, making pain, trauma and scarring a non-issue. The technology of today allows you to enjoy the benefits of a full facelift without down time. Best of all, the procedure is so simple that it only takes 30 minutes to do, using local aesthesia while sitting on a chair.
At the heart of the technology is the use of lifting threads. These threads are inserted by a physician near the ear and made to run under the cheeks and/or jowls through slits on the skin no bigger than an injection needle. The slits are virtually invisible. The threads have tiny barbs that latch on to fat and tissue inside the cheeks. The physician pulls the threads to the desired tautness, just enough to get rid of creases and sagging skin. The skin keeps its form and stays in shape as the barbs hold them firmly in place. The threads are cut and made to retract under the skin. That’s it. The procedure is done.
The lifting threads are made of poly-L-lactic acid and caprolactone (p(LA-CL)) which is a compound naturally produced by our bodies. It disintegrates like water after about eighteen months. Hence, the efficacy of this procedure is between 18 months to two years only. After that, the face falls back to its original form. It is more natural this way, especially for maturing people.
The advantage of using the (p(LA-CL)) threads is that they are elastic and can be stretched and retracted. This means, you can make wide, dramatic facial gestures without being constricted. Over time, the threads also stimulate the production of collagen which makes the face appear more youthful.
Experts agree that the Italian developed (p(LA-CL)) threads are superior to their Korean alternatives.
Those who go through the procedure can expect some bruising, swelling and dimpling in the cheeks and ears but it should dissipate after two weeks.
I was shown some before-and-after pictures and the results are compelling.
SKINFILL TECHNOLOGY
Another option available to aesthetically challenged people is Skinfill Technology. Skinfill is a liquid filler that can solve lopsided cheeks, weak chins and deep wrinkles.
The filler is made of Hyaluronic Acid, a compound also produced by our bodies.
It is simply injected in the area needing augmentation. For me, Riza suggested that I consider some fillers on my chin to achieve a stronger appearance.
The procedure involves no cutting, slits or sutures. All the physician does is inject the Hyaluronic Acid in the target area. A dull ache is to be expected, but many say it is tolerable without anesthesia. The procedure takes around 15 minutes and you can walk away with a stronger chin, more prominent cheeks and no more deep depressions on the face. It’s great for people who have lost facial volume due to sagging and those who wish to restore (or improve) the shape of their faces
The filler uses a patented technology called COESIX Plus. This allows the filled area to have full mobility, not like a silicone implant that can be rigid. Again, since it is made of a material produced by our bodies, it will be naturally absorbed in two years.
The Happy Lift and Skinfill procedures are available in numerous cosmetic or aesthetic clinics around the country, but I was told that Doctor Cyril Agan of the Lift Clinic is among the more experienced medical practitioners in this field.
The advances made in aesthetic technologies are astounding. They have become easy, unintrusive, quick and inexpensive.
As professionals, we should always be on the path towards improvement — and this includes the physical aspect. It’s all about being the best version of ourselves. Beyond the many advantages that being attractive brings to our careers, more importantly, it can also do wonders to our self esteem and confidence. This is priceless.
 
Andrew J. Masigan is an economist.

There is a well-known syndrome for coal lovers. It is called carbophilia.

By Eddie O’ Connor
AS always, it is interesting to read Mr. Oplas. The conservative mind can simply be regarded as stupid, but I tend to see it as representing vested commercial interests.
Einstein used to conduct thought experiments. So let us conduct one about dispatch of electricity.
A little background is helpful. In every electricity system in the world the next unit to be dispatched is the one with the cheapest marginal cost. This thinking and practice has evolved over the past one hundred years.
So imagine what happens when a good strong wind begins to blow or the sun rises above the horizon and causes the solar panels and wind turbines to produce electricity.
Also, imagine that the demand for electricity is constant and this demand is already being met before the wind and sun become available, by a variety of sources ranging from cheap hydro to old clapped-out coal plant with a low efficiency.
As the renewable plant begins to produce electricity the old plant is reduced in output. The first result of this is that the Philippines doesn’t have to import the coal to make the electricity and the second is that the price reduces for the customer.
A study was conducted by the Department of Energy, which showed that the additional cost of the FIT was P25Bn but the savings to the customer was P45Bn. This result is echoed in Ireland where the extra payment to the wind developer is €100m per year but €200m is saved by importing less gas to make electricity. This is known as the merit order effect.
As to whether there is a FIT in place now or not, all Mr. Oplas has to do is to ring up the Department of Energy. He, poor chap, seems to think that because the original FIT is being paid for, that new wind or solar receives a FIT. It doesn’t. We now compete with, and beat, coal on price. The first wind plant I built was in 1992. It was in receipt of a FIT for twenty years. For the last six years it is producing electricity for next to nothing. All CO2 free and still cutting back on gas imports.
I know it must be hard for Mr. Oplas to accept the science that CO2 absorbs sunlight. However it does. I invite Mr. Oplas again to replicate the Tyndall experiment.
Loving coal is an emotional thing. To each his own. For 200 years after the shadow of the earth on the moon proved its rotundity, the flat earthers persisted, in their funny old fashioned belief.
In Ireland there is a well-known syndrome for coal lovers; it is called carbophilia.
The good news for Mr. Oplas is that it is curable, with study and patience.
 
The author is executive chairman of Mainstream Renewable Power.

Duterte to lead handover of historic Balangiga bells

By Arjay L. Balinbin
Reporter
PRESIDENT Rodrigo R. Duterte is expected to formally receive the Balangiga bells from the United States on Tuesday, Dec. 11.
In an advisory on Sunday morning, Dec. 9, the Presidential Communications Operations Office (PCOO) said the President is set to lead the handover ceremony of the Balangiga bells by the US government to the Philippines.
The ceremony will take place at the Philippine Air Force Grandstand, Villamor Airbase in Pasay City, according to Malacañang.
Mr. Duterte demanded the return of the Balangiga bells in his second State of the Nation Address (SONA) in July last year. The bells were taken as war booty in 1901 by members of the US Army during the Philippine-American War.
In a statement on Sunday afternoon, Presidential Spokesperson Salvador S. Panelo said: “We consider the occasion as an affirmation of our strong and enduring relations with our long-standing ally, the United States, as we thank them for this gesture that would formally put a closure to a tragic and contentious episode in both our countries’ history.”
The return of the bells to the Balangiga Church in East Samar was officially announced by US Secretary of Defense James Mattis at the F. E. Warren Air Force Base in Wyoming on Nov. 15.
In a statement, as posted on the official Website of the US Embassy in the Philippines, Mr. Mattis said: “In returning the Bells of Balangiga to our ally and our friend – the Philippines – we pick up our generation’s responsibility to deepen the respect between our peoples.”
He added that Philippine Ambassador to the US Jose Manuel G. Romualdez would “bear these bells home, back to their Catholic Church, confident that America’s ironclad alliance with the Philippines is stronger than ever.”
For his part, US. Ambassador to the Philippines Sung Kim said: “This is a great day for the US-Philippine relationship as friends, partners, and allies.”
“I can think of no clearer affirmation of the United States’ commitment to the Philippines than the return of the Balangiga Bells. To all those who have worked to make this day happen, thank you!” the Ambassador added.
The Diocese of Borongan announced last week that there will be a thanksgiving mass for the return of the bells at St. Lawrence the Martyr Parish-Balangiga on Dec. 14.

ROTC program to expand training on military skills

By Vince Angelo C. Ferreras
THE Department of National Defense (DND) said firing exercises and more lessons on technical skills will be part of the program of the proposed Reserved Officers’ Training Corps (ROTC) for senior high school.
“In the past, it was just purely military science. Ngayon kasama natin dito na mag-implement ang DepEd dito sa part na historical values. Sa technical development, ang TESDA. Kapag pumasok ka sa ROTC ngayon, hindi lang medic or infantry ka….Tuturuan ka na maging radio operator, computer and cyber-specialist, Morse code. These things are technical na pwede mong gamitin,” DND Spokesperson Arsenio R. Andolong said in an interview with BusinessWorld on Dec. 6. (We will now implement together with DepEd [Department of Education] [a course on] historical values. On technical development, we will work with TESDA [Technical Education and Skills Development Authority]. If you enroll in ROTC, you’ll be taught not only medic or infantry, but [how to be a] radio operator, computer and cyber-specialist, [and understanding] Morse code. These are technical things that you can use).
Since last year, President Rodrigo R. Duterte has been pushing for the mandatory implementation of ROTC in Grades 11 and 12 in both public and private high schools.
The current curriculum of ROTC in college includes military history and laws, physical trainings, and emergency preparedness.
Mr. Andolong added, “Highly technical na ngayon ang military (The military is highly technical now),…kaya (that’s why) you have be taught…these things. Cyber warfare is one area that we can teach to our students….(We also have) firing, field training exercise, kasi (because) they will be training alongside the regular force para naman (so this would be) exciting.”
If its proposal is approved by the Congress, Mr. Andolong said graduates of the ROTC program, both in senior high school and college, will be granted civil service eligibility. “Kapag naka-graduate ka ng basic ROTC, may civil service eligibility ka na. Let’s say hindi ka nakapagtapos ng (you didn’t finish) college (but) you want to work in the government, at least may civil service eligibility ka na (you now have civil service eligibility).”
He added, “Kapag ikaw ay grumaduate sa college at kumuha ka ng advanced ROTC, may second level ka ng civil service eligibility (If you graduate from college and take the advanced ROTC [program], you will have second-level civil service eligibility). So it’s going to be worth your while.”
Graduates of the basic ROTC program in senior high school will also be eligible for entry in the military or the police. “Kapag grumaduate ka ng basic ROTC, hindi ka na makakapag-college, tapos naghahanap ng trabaho, eligible ka sa entry to AFP, PNP, Coast Guard as an enlisted man and woman,” Mr. Andolong said. (If you graduate from the basic ROTC program and you’re unable to finish college but you’re looking for work, you’re eligible to entry in the AFP, PNP, Coast Guard as an enlisted man and woman).

Malacañang cautions against UN official’s defense of Rappler

MALACAÑANG said United Nations (UN) Special Rapporteur on freedom of expression David Kaye should not politicize the tax evasion cases the government has filed against Rappler.com and its CEO and executive editor Maria A. Ressa.
“An official from the United Nations (UN) has once again barged into our legal and judicial processes. Without the benefit of factual information, Mr. Kaye, UN Special Rapporteur on freedom of expression, has called on the government to drop the tax evasion charges against Rappler and its head, Maria Ressa, contending falsely that the same constitutes censorship,” Presidential Spokesperson Salvador S. Panelo said in a press statement released on Saturday night, Dec. 8.
In his statement on Dec. 6, as posted on the official Web site of the UN Human Rights Office of the High Commissioner, Mr. Kaye said: “In light of past measures taken against Rappler, I am concerned that the charges of tax evasion constitute an attempt to silence the news outlet’s independent reporting.”
He added: “This is a serious threat against independent and investigative journalism in the Philippines, and will have implications beyond its borders.”
In response, Mr. Panelo said: “We expect the UN representative to be more circumspect instead of politicizing a crime and ignoring its gravity and assaulting the sovereignty of our country.”
“Tax evasion is a serious offense not only in the Philippines but in other countries as well,” he added.
“The case against the media outfit has absolutely nothing to do with the freedom of expression. Being a media entity and a journalist cannot shield them from criminal prosecution when they violate the law. A court of competent jurisdiction has found probable cause against them; hence, they have been formally charged.”
“The fact that Rappler and its reporters continue to publish articles of dissent against this Administration is an eloquent testimonial. The fact that detractors and critics of the President continue to air their protests in various media platforms against our policies is another irrefutable proof. Should there be cases of censorship, people are always free to seek redress from the courts. We note that there are no reports of such cases.” — Arjay L. Balinbin

Davao court order Trillanes to comment on HDO over libel case

THE DAVAO City Regional Trial Court (RTC) Branch 54 has ordered Sen. Antonio F. Trillanes IV to comment on the Department of Justice’s (DoJ) motion to issue a hold-departure order (HDO) against him for libel, Justice Secretary Menardo I. Guevarra said.
“The Court gave Sen. Trillanes 5 days to comment/oppose our motion for the issuance of an HDO, as part of due process,” Mr. Guevarra said in a text message, adding that the motion has been “submitted for resolution.”
The Davao RTC Branch 54 is the same court that issued four arrest warrants against the senator on Dec. 7 over four counts of libel filed by former Davao City vice mayor and presidential son Paolo Z. Duterte.
The senator has also been ordered to post bail of P24,000 for each.
Messrs. Duterte and Carpio charged Mr. Trillanes of libel last Sept. 2018 after the senator alleged that they were involved in corruption and extortion, including ride-hailing services.
In a statement last Dec. 7, Mr. Trillanes said he was planning to turn himself in to police authorities once his warrant was out, but his lawyers said the prosecution prohibits arrests on minor cases on Fridays, weekends, and holidays.
“So, instead of turning myself in, which is apparently not possible under the circumstances, I will just post bail before the appropriate court on Monday,” he said.
He also criticized the current administration, saying, “Baliktad ang hustisya sa gobyerno ni Duterte. Ang mga mandarambong ay pinalaya na. Ang mga kritiko naman ay gagawan ng kaso para pilit na maikulong (Justice under the Duterte government is reversed. Plunderers are freed. Critics are charged over made-up cases to be detained),” he said.
Chief Presidential Legal Counsel Salvador S. Panelo, meanwhile, said the senator should focus on facing his cases instead of attacking the administration.
“Everyone must be accountable for any wrongdoing or infraction of any law. His being a senator cannot excuse him from prosecution from those he has wronged. Instead of employing squid tactics and smearing the Administration, he should focus on the legal remedies available to him,” Mr. Panelo said yesterday.
In another development, Judge Elmo M. Alameda of Makati City RTC Branch 150 on Dec. 7 denied the appeal of the prosecution and upheld his Nov. 29 decision to partially lift the HDO against Mr. Trillanes as he has complied with the requirements of the court.
Mr. Trillanes plans to travel to the Netherlands, Spain, and United Kingdom from Dec. 11, 2018 to Jan. 12, 2019 to attend various meetings and activities. He will also go to the United States from Jan. 27 to Feb. 10, 2019.
A travel ban was issued against him by the Makati court on Sept. 25 for his rebellion case over the 2007 Manila Peninsula Siege after President Rodrigo R. Duterte voided his amnesty on Aug. 31 through Proclamation No. 572. — Vann Marlo M. Villegas

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