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Disappointed Rogen Ladon really wanted to get gold

ONE of the Filipino athletes who had a solid shot at a gold medal at the just-concluded 18th Asian Games in Indonesia, it is understandable the disappointment that boxer Rogen Ladon is feeling, more so because of the circumstances how things ended for him which he described as far from ideal.
The last man standing for the Philippine boxing team, flyweight Ladon was on track for a gold medal until a head-butt from opponent Jasurbek Latipov of Uzbekistan in their gold medal on Saturday derailed his quest, forcing him to settle for a silver medal.
Absorbing an ugly wound on his right eyebrow that oozed with blood following the head-butt, the ring doctor forced to stop the fight 22 seconds into the second round.
Moments later, the match was sent to the judges’ scorecards which yielded in favor of Mr. Latipov, 3-1.
Mr. Ladon said he was very disappointment of the result, believing he was doing well until the head-butt, which he claimed to be suspicious in nature.
“It’s a big disappointment. It’s a major disappointment. Not only me, but the entire country aspired for the gold medal,” said Mr. Ladon after the medal awarding ceremonies.
“He [Latipov] was in the ropes and when he sprung back, he gave me the head butt,” he said.
Philippine sports and boxing officials lamented the way thing ended for Mr. Ladon and some of the Filipino boxers who wound up on the raw end of what they deemed to be questionable decisions.
They vowed to raise much-needed reforms to world boxing governing bodies so as to limit occurrences of such incidence.
All in all, the eight-athlete Philippine boxing team chalked up three medals at the 2018 Asiad — one silver and two bronzes from light flyweight Carlo Paalam and middleweight Eumir Felix Marcial.
Mr. Ladon’s silver was in addition to that won by judoka Kiyomi Watanabe in the women’s 63kg event. — Michael Angelo S. Murillo

Playing for flag and honor

PHILIPPINE Basketball has just added another chapter of a colorful episode in the Asian Games and Filipinos are still savoring the moment.
Never mind if we missed the chance of playing for the medal, but this hastily-prepared Philippine squad coached by Yeng Guiao was able to pit up a performance worth emulating.
Guiao was able to assemble a team built for two weeks and in that stretch, he was able to guide his squad, coming up with a best effort against powerhouse teams China and Korea.
In fact, it was only the Filipinos who gave the Chinese a big scare in the quadrennial meet’s basketball showdown as the Rain or Shine-backed squad came one shot away from winning the game, one that could avoid South Korea in the quarterfinal meeting and eased up the country’s basketball team’s entry to the medal round where it could play the lowly-ranked teams.
Against South Korea, the Filipinos were two possessions away from pulling off a tough win against a squad that has been giving us so many heartaches for many years.
Guiao didn’t look up for excuses. Instead, he summoned the willingness of his players to play with pride and win their next two games and make the entire nation proud.
It’s not easy to motivate players knowing they’re already out of contention for the medal.
But players loved Guiao so much that he commanded their respect. Everybody wants to play for the man who was tasked to pinch hit and carry on his shoulders the big responsibility of turning around a campaign facing crisis even before the tournament started.
He was tasked to change the image of Philippine basketball overnight and with much gusto, he did it with aplomb. The fiery mentor made sure he will make NBA player Jordan Clarkson at home and in the last two games, the Cleveland Cavaliers guard was able to play better with his teammates in coming away with convincing victories.
In between all these success, one group which deserves praise is Rain or Shine.
Unknown to many, Rain or Shine has been a staunch supporter of the national team program ever since the PBA started to lend a hand in the formation of the Philippine squad.
When Philippine basketball needed a facelift right after the image was destroyed by the free-for-all incident against Australia that led to the suspension of our players and coaches and the ill-advised decision to pull out in the Asiad, Rain or Shine remained committed.
For about three weeks or a month, Rain or Shine was like a family reunited with its old coach who gave the franchise two PBA titles.
And they’re not done yet as the players and coaching staff of Rain or Shine will be tapped by Guiao anew for another mission — the next window of the FIBA Asia World Cup qualifier.
Clearly, when it comes to representing the country, there are people who would not turn their backs to play for flag and honor.
 
Rey Joble has been covering the PBA games for more than a decade. He is a member of the PBA Press Corps and Philippine Sportswriters Association.
reyjoble09@gmail.com

Realities of business in the NBA

LUOL DENG still wants to play. He has made that clear — from the moment the Lakers shut him down late in the 2016-17 season ostensibly to give young players more time on the court and up until they mutually agreed to part ways yesterday. And, yes, he still believes in his capacity to contribute meaningfully in another National Basketball Association uniform, and to the extent that he gave up a whopping 20% of his salary over the next two years just to be free of his contract.
Make no mistake. The $29.3 million Deng will be getting as a result of his buyout is a staggering sum. But so is the additional $7.5 million he would have received simply for doing nothing until the end of the 2019-20 season. Instead, he forfeited it to claim his freedom, never mind that the Lakers wanted the buyout done as well in preparation for the courtship of marquee free agents next year.
Indeed, Deng believes in himself enough to stake sure money on his future. He could have held tight and insisted on receiving every penny of the $72-million deal he signed in 2016, rightly believing that he deserved it. In so doing, however, he would have effectively bid goodbye to getting back on the court. And so he handed the Lakers the financial flexibility they coveted in order for them to afford him the opportunity to burn rubber anew.
It won’t be easy, and not simply because Deng will be exploring his options this late in free agency. He’s a year and a half removed from competitive action, and he didn’t exactly put up outstanding numbers back when he was a starter for the Lakers; per advanced stats, he was marginally worse than a replacement player in 56 games for the purple and gold.
Nonetheless, Deng is confident in his abilities, and he may well have reason. He took to the court early this month as part of the NBA’s outreach program in Africa and, if nothing else, proved that he can still ball; in 23 minutes of exposure, he netted 14 (on six of 10 shooting from the field), three, and three. The caveat is that an exhibition game in no way approximates the level of exertion required by an actual match, let alone over the course of an entire campaign.
In any case, Deng sought, and now has, a chance. And whether or not he finds himself part of another roster, his will wind up to be a cautionary tale on the realities of business in the NBA.
 
Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994.

Tax sharing in the ConCom’s draft charter

By Benjamin R. Punongbayan
THE CONSTITUTION drafted by the Consultative Committee to Review the 1987 Constitution (ConCom) had drawn negative reactions, which went into a high crescendo with regard to the sharing of national taxes between the central government and local governments in relation to their responsibilities and functions. Oddly, this was initiated by certain Cabinet secretaries themselves. This was followed with fanfare by the business community.
I earlier described the draft constitution as not federalism at all. I still do. I equate federalism with a high level of local autonomy. In fact, this was the battle cry of the proponents when they first advocated federalism two years ago. They even mentioned that the states will levy and collect all the taxes and share 20% of their collections with the central government for its use. That did not happen.
But that is exactly the clearest symbol of a high-level local autonomy: the local government’s power to levy its own taxes to finance its own overall development, paving the path for its own destiny within the bounds of the federation. But the succeeding events did not move towards that end—the center continues to impose all existing national taxes, except for a few low sources of revenue that were ceded to the regions.
I recognize that the draft constitution consolidated adjoining provinces into regions, created a representative unicameral regional assembly and a supreme court for each region, provided restrictions to political dynasties, and introduced political party proportional representation. But these do not federalism make.
When one compares the enumerated functions and responsibilities of the regions in the draft constitution with those in the existing local government code, nothing much has been added. The wordings, of course, are different. Necessarily, the provisions in the local government code are more detailed. A diligent provincial government would have embraced the powers listed for the regions in the draft constitution as its responsibility except, of course, for the new powers that were added pertaining to economic zones and the justice system and, perhaps added for emphasis, indigenous peoples’ rights and welfare, and culture and language development.
Much of the powers remain with the central government. Even basic education was clearly labelled as a responsibility of the center, which I would think includes procuring physical things such as school buildings and text books, paying teachers’ compensation and, if we decide to get into it, assisting poor students with free meals and transportation. And so with the conduct and control of local elections.
There is clearly a preference towards the center: in case of dispute or conflict in the exercise of shared powers, the federal power should prevail. Reserved powers (those not exclusively assigned and those not shared) are vested in the central government. I would think those powers would include regulatory powers over the environment, natural resources, communications, and air and sea transportation. I read these to mean a hesitation to give more autonomy to the regions.
On paper, the increased allocation to the regions of 50 % of all tax collections should not have aroused so much brouhaha, because the increase is only 10 percentage points from the 40 % already provided in the existing local government code. Of course, the present calculation does not include 40 % of customs duties, which the Supreme Court recently ruled must be included.
To get a better understanding of the issue, let’s look at the numbers. The basis for calculating the IRA has a three-year lag. This means that the IRA for 2018 was calculated based on actual tax collections in 2015. The IRA for 2018 has already been determined at P523 billion (obtained from the DBM website; all subsequent base numbers were obtained from the websites of the concerned government agencies) which is equivalent to 36.3 % of the 2015 BIR tax collections of P1,441 billion. This percentage is quite close to 40 % (there were non-cash items in the BIR tax collections which were excluded in the calculation). This IRA does not include customs duties (let us ignore franchise fees which must also be included). Adding 40 % of the 2015 customs duties collections of P368 billion, the total 2018 IRA would have been P670 billion.
Let’s move forward to the draft constitution which provides for 50 % allocation to the regions. In addition, it provides for an equalization fund of 3 % of total tax collections. In a separate recently passed law, the Bangsamoro is given a block grant of 5 % of total tax collections. There is an issue as to how these two parts (3 % and 5% ) should be dealt with in the computation—whether to deduct them first from the 100 percent (let’s call it Case A) or to deduct them from the 50 % share of the region (Case B).
Let us assume first that the same three-year lag applies (Assumption 1), which is clearly the case for the Bangsamoro block grant, as provided in the covering law. Under Assumption 1, and combined with Case A, the total share of the regions including Bangsamoro is P977 billion, or an increase of P454 billion or 87 % from the actual 2018 IRA of P523 billion (not including customs duties). Under Assumption 1, Case B, the total share of the region goes down to P905 billion (exactly 50 % of total tax collections in 2015). This amount represents an increase of P382 billion, or 73 %.
The language of the applicable provision in the draft constitution appears to indicate that the sharing has to be based on current tax collections. If so, this will be a big leap. This is likely the view taken by government economic managers in their reactions. Let us see how the numbers fall by using the tax collection targets of the BIR and BOC for 2018 –P2,039 billion and P598 billion, respectively, or a total of P2,637 billion (Assumption 2). Under Assumption 2, combined with Case A, the share of the regions, including Bangsamoro, would amount to P1,424 billion, or a whopping increase of P901 billion, or 172 %, over the actual 2018 IRA. Using Assumption 2, Case B, the share of the regions would be P1,319 billion, including Bangsamoro, resulting in an increase of P796 billion or 152 % .
Clearly the outcry is understandable—the result of any of the combinations shown above is clearly out-of-bounds for the central government compared with present level of IRA.
Let’s take a look at the side of the regions. Under Assumption 1, Case B (tax collections of three years ago divided evenly between the center and the regions), the combination that shows the lowest amount of region share, the total region share of P905 billion is equivalent to an average share for the 18 regions of P47 billion per region (after deducting first the 3 % equalization fund). The actual distribution among the regions will show a wide range (based on geographical area, population, and equal sharing), which clearly would result in a smaller share for the poor regions, except for Bangsamoro. But even this combination may not be the acceptable choice. It would likely be lower—an amount between the present level of IRA and the result of this combination. As such, would this region share level achieve the vision of the framers of the draft constitution?
Unfortunately, the regions do not have any other meaningful revenue source. Double taxation is not allowed under the draft constitution, which means the regions cannot impose any tax that is the same or similar to those imposed by the center. In a sense, they are in a straitjacket, fully dependent on the central government for much of their income.
When evaluating the choices of sharing the total tax collections between the central government and the regions, the evaluation should include the effectiveness of the practice of tax sharing. We have been applying that practice for some time now. We now have a long experience to be able to know whether the country is getting good value for the allocated money. The danger I think is that the local government may see it as easy money and that it is not accountable for its use to anyone and, therefore, it may not utilize such money for more effective use. The local government did not raise the money from its own local citizens and, therefore, those citizens may not be conscious of requiring the local government officials to make an accounting to them of the use of the “extra free money” during election time.
In effect, we are already practicing “federalism” of the kind embodied in the draft constitution since the advent of the local government code in 1991 that decentralized the government.
In whatever way or form the country moves forward in amending the present Constitution, the draft constitution embodies several commendable reforms that we should adopt: the restrictions of the political dynasties (which, I believe, should be made more restrictive), the introduction of the political party proportional representation (the proportion of which should be made higher than the 40 or 50 percent threshold stated in the draft), the reorganization of the Senate, the reorganization of the local governments into larger geographical areas (regions), and the representative unicameral regional assembly.
Perhaps, in the draft constitution or any similar alternative draft,the terms “federalism,” “federal,” and “federated” need to be reconsidered and dropped. They are neither necessary nor apt. They just mystify the mind and create a fear of the unknown.
 
Benjamin R. Punongbayan (ben.buklod@yahoo.com) is the founder of Punongbayan & Araullo, one of the Philippines’ leading auditing firms.

The gift of life

I lost a new IPhone. Worse, I lost it on the day of my wife Mae’s third death anniversary.
I asked myself: “Is Mae playing a joke on me?” Years ago, I likewise lost an IPhone, to Mae’s consternation. It hassled her that I asked for her phone, which she was comfortable with, as replacement. In exchange, I proposed buying her a new one.
She eventually found my phone, but it was already damaged. She was trying to figure out what caused the clogging of water in the toilet bowl. To her surprise, she discovered that my phone was the culprit. She had no choice but pull out the submerged phone from the toilet bowl. Perchance, losing my IPhone this time was Mae’s way of reminding me how my carelessness troubled her.
Like my sis Tata who would implore our departed dad to help her find a missing item, I asked Mae to help me find the phone. I needed the missing phone, especially on that day. I had to make calls and send messages to the Sta. Ana and Manalang families regarding the mass and dinner in remembrance of Mae.
In addition, the phone contains valuable recent photos, which I connect to Mae’s life. There’s a photo of Mae’s favorite grandniece Belle and her bubbly and chubby younger sister Bianca. Bianca reminds Lola Yeb of her sister Mae’s babyhood—a happy and hearty baby.
There’s a photo of the couple Cynch and Boying, taken when we had lunch at Casa Daza. Cynch was Mae’s bosom friend. On the day Mae died three years ago, Cynch found a symbolism. Mae died on her birthday. This signified love, togetherness, and continuity.
As I was struggling with the lost phone, I asked myself how Mae would have reacted to my situation. Mae was telling me not to be distracted and distressed by a missing phone. Be cool. Don’t sweat the small stuff.
The phone is replaceable. I can still communicate with family and friends through other means. The lost photos will not erase the fresh and vivid memories of my being with Belle and Bianca; with Cynch and Boying; with Freita, Mae’s friend from college who is likewise grieving over the death of her sister; with my grade school and high classmates who were also Mae’s friends.
I reminded myself of what friends have been telling me—“Mae wants you to be happy despite your grief.” Hence, on her third death anniversary, think of happy moments.
Indeed happy moments preceded the misfortune of losing the IPhone. I had fun with old pal Doc Eddie. My colleagues and I visited him regarding the universal health care advocacy. Eddie casually reiterated his invitation for me to join him in monkhood. But his idea of being a monk is different; one where he can still make love with his wife Oyen.
In the evening, I attended a get-together of my and Doc Eddie’s classmates. In that gathering, I was surprised to see Ody, who, despite his intelligence and his math wizardry, dropped out of high school because of conduct associated with being stoned.
Ody approached me and confided that though originally he did not intend to be at the gathering, he opted to go upon learning that I’d attend. Ody wanted to thank me again for a eulogy that I wrote about Mae. My story about Mae and our relationship—the ups and downs, the joys and disappointments, and ultimately the eternal love for each other, gave new meaning to Ody’s life. The life of Ody is a testament to how we transform and redeem ourselves, how we can change for the better.
It was nearing midnight night when the group called it a night. Meong, our inspirational guy who on that occasion gave me a book about a pilgrimage in the footsteps of Ignatius of Loyola, was in deep slumber. He had one drink too many. For he was unfit to drive home, Noel and I accompanied Meong, with me as the designated driver.
Meong was asleep during the whole trip. Noel, who lost wife Ditas a few months ago, and I had the time to talk about the life of being widowed. For a spiritual journey, Noel would like to do the Camino de Santiago. The book that Meong gave me might likewise interest Noel.
Noel got off first, and I safely returned Meong and his Innova to his place on Katipunan Avenue. I was of course relieved that Meong got home safe and sound. To return home, I took a Grab vehicle.
Before going to bed, I wanted to check my e-mail and messages, and I realized my phone was missing.
It was upon reflection that I banished the negative feelings about losing the phone. Mae was telling me: ”Be happy. You did good today. You gave encouragement to Ody. You gave Meong a helping hand. You comforted a grieving Noel.”
I affirm what I learned from Mae, from her departed sister Ginny, and her departed mom Cil: theirs were little acts of kindness. Little acts of kindness are as important, are as noble as grand heroic acts like fighting and dying for our country.
That was what the homily was all about when I attended the mass to honor Mae. The message was about the gift of life; that we live to fulfill a greater purpose.
Postscipt: The day after Mae’s death anniversary, I recovered the IPhone. The friendly driver of the Grab car, named Sunday Botero, was very kind to go out of his way and deliver to me the cellphone he found inside the sedan. Indeed, it is the people’s little acts of kindness, like Sunday’s, that make a wondrous, beautiful world.
 
Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.
www.aer.ph

End of the road for federalism?

IN his third State of the Nation Address (SONA) in July, President Rodrigo Durterte urged Congress to work on his proposal to change the Constitution to enable the Philippines to shift from the current presidential to a federal form of government. Curiously as we observed in our brief, he did it less forcefully then what many had expected considering that federalism, along with the drug war and anti-corruption drive, had been an oft-repeated subject of his lengthy monologues. Today, a month after that speech, the drive for federalism seems to be waning.
What happened? To start with, there was never popular support for federalism, nor even awareness, of what the proposal was about. Then on the day of the SONA, the fiercest champion of federalism in Congress, the then speaker, was ousted and replaced with former President Gloria Arroyo who does not seem to share her predecessor’s enthusiasm for fast-tracking the proposal. Then, when asked, the President’s own economic team was critical of the proposal’s dire fiscal impact with the Finance Secretary telling members of the Senate that he would “absolutely” not vote for it. The economic team’s position was soon echoed by business and civil society in a rare joint statement issued by seven large business groups and 19 advocacy organizations. Too, the Supreme Court’s ruling granting local governments a larger stake in national taxes may have helped assuage some of the regional discontent with “Imperial Manila.”
And yet, the fuss over federalism is continuing with Malacañang now promoting voter education for public support. Is this another example of a strongman trying to get his way no matter what?
Those who charge the President with chiseling away at Philippine democratic institutions would readily agree, and perhaps they have grounds to believe so.
Nevertheless, there is another possibility that we find hard to refute. This view argues that for President Duterte, the federalism campaign is just a matter of keeping options open. The ultimate objective, per this line of reasoning, is effective succession planning, one that would allow him to escape Philippine democracy’s disturbing cycle of successive leaders sending their predecessors to jail. Indeed, many have observed that in the country’s post-democracy era, only President Corazon Aquino had managed her succession successfully.
If this is the case, then fate has favored him with an unequalled ally in the person of Speaker Arroyo. The former president, who had been under hospital arrest during most of her successor’s term, had tried to amend the Constitution through various means during her presidency ( though she preferred then a unitary parliamentary to a federal presidential system). From all indications, Speaker Arroyo remains committed to this vision. She has, however, only nine months remaining in her third and last congressional term and has dismissed the former speaker’s plan to cancel the 2019 mid-term elections (supposedly to give Congress time to work on federalism).
What will she do then? For one who considers politics the art of the possible, she would most likely have several cards under her sleeve and close to her chest. For now, she has put the onus of setting the President’s proposal aside on the Senate, which has refused to participate in a constituent assembly, the President’s preferred avenue for changing the Constitution. Meanwhile, she has busied herself tending to matters that the President has no appetite for, i.e., the economy, and possibly filling a vacuum in leadership. The months ahead will reveal how the stars will align for the two most powerful people in the country.
In the meantime, the success of the President’s daughter (the mayor of Davao City) in forming a formidable alliance between her regional party (Hugpong Ng Pagbabago or HNP) and nine other national and local parties has opened up another path that may allow the President to retire in peace to his hometown at the end of his term. Of course, he still has four years to go in his term and in Philippine politics, that is light years away.”
 
Romeo L. Bernardo was Finance Undersecretary during the Cory Aquino and Ramos administrations. He is a fellow of the Foundation for Economic Freedom and a Governor of the Management Association of the Philippines.
romeo.lopez.bernardo@gmail.com

Available rice for tolerable poverty

Mang Pedro, temporary construction helper, married, father of three, could not even afford the P38-lunch sold on the sidewalk. He squatted in a corner, away from the other workers boisterously competing for the bigger slices and the more generous-looking rice portions of Aling Rosa’s food. He carefully opened his “baon” (packed lunch). It was plain boiled white rice — but twice the quantity of Aling Rosa’s serving. No viand. Over the rice, he squeezed the ketchup from the frayed foil packet that he picked up from a fast food outlet.
“Ayos. Basta may kanin!” (Ok, as long as there’s rice.)
In the Philippines, rice is the major staple, accounting for nearly half of the calorie intake of the population. Of 105 million Filipinos, about one-fifth or about 21 million are poor. Availability of rice at affordable price can be the palliative for tolerable poverty. What if rice is scarce and expensive?
According to a study of the government think-tank Philippine Institute for Development Studies (PIDS No. 2011-11, May 2011), rice consumption had been increasing: from 84 kilograms (kg) in 1990, annual per capita consumption has risen to 120 kg by 2009. Add that the population continued to grow at a rapid clip (2% annually), further accelerating the growth of demand. Since the growth of domestic supply has not kept pace with growth of demand, the country started to import rice, the PIDS said (Ibid.).
In 2007-2008 world food prices increased dramatically causing political and economic instability and social unrest in both poor and developed nations. Causes identified were droughts in grain-producing nations and rising oil prices, which increased the costs of fertilizers, food transportation, and industrial agriculture. Some analysts said the increasing use of biofuels in developed countries (e.g., corn) also exacerbated the world-wide food shortage (The New York Times. April 10, 2008). A similar price-spike emergency happened again in 2013, when world rice availability was a major challenge to the Philippines, which held the dubious reputation as top rice importer of the world since 2004.
“Why does the Philippines import rice?” economists from the International Rice Research Institute (IRRI) effectively asked themselves (D.C. Dawe, P.F. Moya, C.B. Casiwan, 2004). For IRRI, the largest nonprofit agricultural research center in Asia, was set up in the 1960s by the Ford Foundation, the Rockefeller Foundation, and the Government of the Philippines purposely to “reduce poverty and hunger, improve the health of rice farmers and consumers, and ensure environmental sustainability of rice farming” (IRRI website). Dawe et al. premise that the Philippines imports rice because it is a nation of islands without any major rice deltas like those in Thailand and Vietnam, the world’s top two rice exporters. But it has been economic history more than geography.
In globalization and its liberalized trade, quantitative restrictions (QRs) set by the World Trade Organization (WTO) upon food exporting countries tried to temper the imbalance between demand and supply, and to ensure availability, fair pricing and distribution of food. Calibrated tariffication balanced importations vis-à-vis the local supply, to protect farmers and local suppliers. Rice, the staple food of nearly one-half of humanity (IRRI, 2015) has been an exemption for many countries from the WTO standards. “The Philippines, second most heavily populated in the region after Indonesia with about 105 million people, consumes roughly 11.7 million tons of rice every year. The country limits private rice imports to protect its farmers, buying up to 805,200 tons of rice with a 35 percent import tariff, under the WTO deal” (Reuters June 19, 2018).
The PIDS explains that “QRs are enforced through the import monopoly provided by law to the National Food Authority (NFA), a state-owned agency. The volume to be imported by the NFA is set annually by the NFA Council, upon recommendation of an interagency committee. The NFA is mandated to stabilize rice prices and supply both at the producer and consumer level, and ensure food security throughout the country. To do this, the NFA tries to ensure that farm gate prices are high enough for farmers to gain reasonable returns, retail prices remain affordable to consumers, and rice distribution is restored quickly in calamity stricken areas (PIDS, op. cit.).
“Following its mandate, the NFA engages in procurement (buying rice free of tariffs) and distribution, setting a procurement price for palay while subsidizing retail price (buy high, sell low) of milled rice. It also maintains a food security reserve, with rice stocks kept at levels equivalent to 15 days of consumption year-round, rising to not less than 30 days equivalent consumption every first of July” (Ibid.)
What panic when in February, NFA Administrator Jason Aquino said in a media briefing that “the inventory of NFA rice is very low, but we have high supplies in the commercial and household. There is no rice shortage, but we don’t have much to give to the poorest of the poor.” The NFA takes care of 10 percent of the total rice consumption of the country, for Classes D and E, or around 8 to 10 million Filipinos. Aquino said with the only 1.2 million bags of rice remaining with the NFA, their stocks can only assist the poor for 18 days (CNN Philippines, Feb 7, 2018).
Aquino said that with the NFA rice shortage, the masses have to resort to buying commercial rice — the price of which has already hiked up due to the lack of supply. NFA rice is more affordable at P27 to P32 per kilo compared to commercial rice, which sells from P36 to P65 per kilo (Ibid.). Agriculture Secretary Manny Piñol accused private rice traders of resorting to spreading rumors of a shortage to escalate prices (Ibid.).
The NFA blamed the 10-member multi-agency NFA Council headed by Cabinet Secretary Leoncio “Jun” Evasco (directly reporting to President Rodrigo Duterte) for delaying, since November, a request to import 250,000 metric tons of rice, which will take 45 days to arrive. The required 15-day buffer stock or around 400,000 metric tons that the NFA should have in store at any given time is raised to 30 days or 800,000 metric tons from July to September every year, when there is almost no rice production due to the storms that hit the country around that time, Aquino explained (Ibid.).
President Duterte intervened, directing immediate rice importation, leaving it to the NFA Council to determine process and procedure. One pro-Duterte commentator cited by Rappler asked why Evasco’s NFA Council opted to go G2P (government-to-private) which would take 45 to 60 days instead of the traditional G2G (government-to-government) importation which takes only 30 days — was there something about corruption here? (Rappler Mar 24, 2018).
And Duterte’s men accusatively pointed to at each other in mainstream and social media, diverting attention from the most urgent problem of (possible) food scarcity and further food inflation, especially as it threatens the most vulnerable — the poor.
In Senate hearings on the rice shortage, opposition Senators Francis Pangilinan and Paolo Benigno Aquino IV called for the resignation of Duterte-appointed Jason Aquino as NFA Administrator for inefficiency. Senator Sherwin Gatchalian topped the opposition’s recommendation by pushing for the total abolition of the NFA (Rappler Aug. 29, 2018). Citing financial data, Gatchalian said NFA’s revenue shrank 38 % to P17.93 billion in 2017, from P29.3 billion in 2016. NFA’s losses, on the other hand, swelled to P150 billion (Ibid.).
Piñol pushes for tariffication as the solution, saying that if the Philippines would import around two million metric tons of rice under the proposal, about 40% tariff would be collected which is equivalent to US$400 million or P21.6 billion a year. He clarified, though, that the measure would reduce rice prices by only about P1.00 per kilogram, but it is primarily to protect Filipino rice farmers against the influx of imported rice (ph.news.yahoo.com Aug 2, 2018.)
Farmer groups and rice research organizations do not agree with the House of Representatives’ move to lift the QRs on rice imports and instead apply a 35% tariff on unlimited rice importation. “This will practically decrease farmgate prices, said IBON, but not necessarily lower retail rice prices as government claims” (mindanaoexaminer.com Aug. 10, 2018).
“Then senator Macapagal-Arroyo pushed for the country’s entry to the World Trade Organization in 1995, and after decades, rice farmers’ livelihood were ravaged by the influx of imported rice, but still, prices remain unaffordable to the poor, and now, the Duterte administration is doing a repeat, but worse, as it will unleash the flooding of imported rice in the local market,” Anakpawis party-list Rep. Ariel “Ka Ayik” B. Casilao said during a protest (conceptnewscentral Aug. 6, 2018).
Yes, that is perhaps the most discerning of the rice situation, and the more prudent action/reaction that can be done at this time: Focus on rice availability and its critical impact on the government’s professed objective of inclusion of the poorest of the poor. Look inward, and not mimic and mime what the big boys in global liberalized trading are doing — for themselves, and not for the struggling developing countries like the Philippines. Perhaps drastic tariffication, and/or dismantling of the NFA can be studied more deeply, before hasty decision and implementation.
Address the simple problem of internal regulation for the procurement, pricing, and distribution for today’s rice situation. Curb smuggling and profiteering. Address government officials’ accountability. Government must do its job, and not shunt responsibility to the new rules for Tomorrow.
 
Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.
ahcylagan@yahoo.com

Jim Rogers favors several sectors in China stocks amid global volatility


IN AN exclusive interview with Jim Rogers, he said he favors several sectors in the Chinese stock market amid global volatility and US-China trade tensions.
The author of “A Bull in China: Investing Profitably in the World’s Greatest Market,” and a famous global investor who co-founded the first international investment fund with George Soros in 1973, has made several remarkable predictions. The most recent was Jim’s short positions in the US real estate in 2006 or so before the subprime crisis occurred in 2007.
As a pioneer in investing in China’s shares back in the 1990s, Jim has deep and broad knowledge on China’s economy and he believes some Chinese industries have a bright future ahead as he personally owns Chinese fintech companies such as Beijing-based Tiger Broker and he feels there are ample opportunities in Chinese stocks.
Some of his quick picks mentioned are those supported by the Chinese government such as pollution clean-up with regards to air, water and soil; health care; and agriculture. This is in relation to the Chinese government’s efforts to create a cleaner environment.
He foresees tourism to be great in the longer term, for the next 10-20 years, as Chinese citizens have more purchasing power to travel and spend overseas.
Another theme he highlighted are the industries in the Belt and Road Initiative (BRI).
When asked about the possibility of Fed hikes which could affect the global economy, his response was that other central banks have to follow suit and take their interest rates higher. And the “interest rates have never been like this in the history of the world.”
“Central banks do not know what is happening and it is their experiment at best,” Jim added. The world’s debts will increase as a result of the interest rates going higher.
Jim is also particularly concerned about the peer-to-peer lending business and that business has been coming under pressure. The recent clean-up was a way to prevent it from getting out of control.
He feels that although China financial markets haven’t been performing as of late, China will be leading the run when it is the time for the bull market.
Currently, Jim resides in Singapore and runs Rogers Holding and Beeland Interests Inc. And both his daughters are fluent in Chinese.
CHINAKNOWLEDGE

Chinese bridge pushes Maldives deeper in debt: opposition

Maldives — The Maldives opposition said Friday that President Abdulla Yameen had pushed the Indian Ocean nation deeper into a Chinese “debt trap” with a new $200 million bridge opened just ahead of the country’s election.
Yameen commissioned the bridge with a Chinese fireworks display late Thursday night amid his campaign for the controversial September 23 vote, ahead of which he has jailed or forced into exile all of his main opponents.
The opposition Maldivian Democratic Party (MDP) said the 1.4 kilometre (0.9 mile) three-lane bridge linking the congested capital of Male to the airport island was a symbol of Yameen’s “corruption”.
“There was huge corruption involved in this deal,” MDP spokesman Hamid Abdul Ghafoor told AFP in Colombo where he lives in self-imposed exile. “We are getting pushed into the Chinese debt trap.”
The government has repeatedly denied claims of corruption.
The International Monetary Fund reported that the Maldives’ external debt was estimated at 42.8 percent of GDP in 2018, up from 38.29 percent in 2017.
Yameen pledged to build the bridge during his 2013 election campaign and made infrastructure development a key plank in his reelection bid.
He said at the inauguration that the new bridge marked “the dawn of a new era” for the Sunni Muslim nation of 340,000 people.
“We see our future unfolding into an age of progress and tranquility.”
The project was launched when China’s President Xi Jinping visited the Maldives in 2014 and Male pledged support for China’s ambitious $1 trillion Belt and Road infrastructure project across Asia and Europe.
Housing minister Mohamed Muizz said in May a Chinese grant, as well as a loan from China’s EXIM bank, would make up most of the project’s funding.
The Maldives, some 1,192 coral islands stretching across 800 kilometres (500 miles), straddles the highly strategic east-west maritime route.
The upmarket tourist paradise has been on edge since Yameen imposed a 45-day state of emergency in February.
The country’s first democratically elected leader, Mohamed Nasheed, lost elections in 2013 in controversial circumstances.
The Supreme Court annulled the results of the first round of voting when Nasheed was in the lead.
The subsequent vote was then twice delayed, allowing Yameen time to forge alliances that helped him narrowly win the contested run-off. Nasheed has been barred from running in the September vote. — AFP

Gold drops for fifth month amid a rally in dollar, stocks

Gold is set for a fifth straight monthly decline, the longest losing run in half a decade, hit by a strengthening dollar and U.S. equities at record highs.
Bullion for immediate delivery, which was at $1,205.96 an ounce on Friday, has lost 1.5 percent in August, and the run of monthly declines is the longest since 2013. Prices hit a 19-month low on Aug. 16 and are down 7.4 percent this year, while the Bloomberg Dollar Spot Index has risen 1.7 percent.
The precious metal has been dumped as investors weigh prospects for further tightening by the Fed amid a robust U.S. economy, with global holdings in gold-backed exchange-traded funds declining to the lowest level since November. The latest developments on the trade war front have further aided the dollar, with President Donald Trump expected to move ahead with tariffs on an additional $200 billion in Chinese imports as soon as next week.
“The problem for gold bulls is that while inflation remains contained around the world and there’s no driver there for people to buy gold, that strengthening U.S. dollar will be a key factor,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said by phone. While there’s potential for trade wars to slow global growth, that’s not seen as a crisis and isn’t likely to spur haven buying, according to McCarthy.
Net-Short Position
While prices have stabilized near $1,200 this month, bets on declines are still piling up with money managers boosting their net-short position to a record for a fifth straight week. Analysts at Citigroup Global Markets have said nobody needs gold in a world where yields and equities are rising.
Fed Chairman Jerome Powell said this month that gradual rate increases are likely, and that with inflation still low he wasn’t worried about the economy overheating. The U.S. central bank looks set to deliver four more hikes before pausing, according to UBS Group AG’s wealth management unit.
“In the short term, we’ll have further strength in the dollar,” said UBS’s Wayne Gordon, Singapore-based executive director for commodities and foreign exchange. Beyond that, gold may get a reprieve “when people start to look more further forward to the Fed effectively reaching what it sees as neutral, or slightly above neutral,” he said. — Bloomberg

Central bank flags even faster August inflation

‘Higher price of rice and key food items due to weather disturbances and supply disruptions, increase in gasoline and LPG prices, and slight upward adjustment in electricity rates in Meralco-serviced areas contributed to upward price pressures in August.’ — Bangko Sentral ng Pilipinas

By Melissa Luz T. Lopez, Senior Reporter
THE OVERALL INCREASE in prices of widely used goods likely clock in around 5.9% in August — marking a fresh multiyear high — the Bangko Sentral ng Pilipinas (BSP) said in a statement on Friday, noting that food and utility costs maintained their ascent.
In a statement, the BSP’s Department of Economic Research gave a 5.5-6.2% estimate range, implying that prices have climbed faster than July’s 5.7% reading and the 2.6% reading seen in August 2017.
The range is higher than the central bank’s 5.1-5.8% estimate for July inflation.
This would be in line with BSP Governor Nestor A. Espenilla, Jr.’s signals that inflation will clock in faster this month, though not beyond six percent.
At the same time, the BSP department noted that “[t]he central forecast implies a slight deceleration of the month-on-month inflation”.
The Philippine Statistics Authority (PSA) is scheduled to report August inflation data on Wednesday, Sept. 5.
This is the first time that the BSP gave a specific figure for headline inflation ahead of the official PSA data. If realized, this will mark a fresh multiyear high for inflation using 2012 prices as base.
“Higher price of rice and key food items due to weather disturbances and supply disruptions, increase in gasoline and LPG prices, and slight upward adjustment in electricity rates in Meralco-serviced areas contributed to upward price pressures in August,” the central bank said.
Oil companies introduced four waves of pump price increases last month to reflect movements in global crude prices. Year-to-date prices saw a net increase of P6.90 per liter for gasoline and P7.15/liter for diesel as of Aug. 28, according to the Department of Energy’s oil monitor.
Manila Electric Co., the biggest power distributor in the country, also announced a P0.0265 increase per kilowatt-hour for electricity bills due to a higher generation charge.
On the flipside, lower diesel and kerosene prices, as well as a “modestly appreciated peso” likely helped ease price pressures for the month.
The peso has been trading weaker than P53 versus the dollar in recent weeks, even as it briefly touched the P52 level earlier this month.
Mr. Espenilla has been saying in recent weeks that inflation will peak by August or September before gradually easing back to the 2-4% target range by 2019.
Prices of widely-used goods and services have surged by an average of 4.5% as of end-July, while full-year inflation is expected at 4.9%. The central bank has blamed supply-side factors such as surging global oil prices, additional excise taxes on certain products which took effect this year, as well as weather disturbances that disrupted food supply as the key reasons behind July price spike.
In response, the BSP fired off its strongest response in a decade by raising interest rates by 50 basis points (bp) in its Aug. 9 meeting. This pushed yields 100bp higher year to date, with the benchmark yields now at 3.5-4.5%.
“The BSP will remain watchful of economic and financial developments that could affect the inflation outlook and will closely monitor inflation expectations and emergence of further second-round effects ahead of the September 2018 Monetary Board policy meeting,” the central bank added.
Mr. Espenilla said in a forum earlier this week that the BSP has “kept the door open” for succeeding rate hikes in order to ease inflation pressures, noting that the economy can still accommodate further monetary policy tightening while growing at a rapid pace.
Inflation momentum has been “slowing” in recent months, although prices will likely remain “elevated” until yearend, the BSP chief added.

Money supply growth slows in July

GROWTH of money supply eased to its slowest pace in nearly three years in July amid smaller reserves held by the Bangko Sentral ng Pilipinas (BSP), even as bank lending accelerated in the same month.
Domestic liquidity or M3, or the broadest measure of money in an economy, grew by 11% to P11.103 trillion in July from P10.004 trillion a year ago, slower than the 11.8% to P11.062 trillion logged in June.
This is the slowest M3 growth seen since a 9.4% increase in December 2015.
Month on month, liquidity rose by 0.6%.
Claims on the national government and other sectors through securities picked up by 16.1% in July, matching the rate seen the previous month. Net claims on the government grew by a slower 12.3% in July from 12.8% the previous month, while increase of claims on other sectors (other financial corporations, public nonfinancial corporations, local governments and the private sector) picked up to 16.9% from 16.7% in the same comparative months.
Contributing to the moderation of money supply growth was the 0.1% year-on-year increase in net foreign assets (NFA), compared to a 2.8% year-on-year pickup in June. “The BSP’s NFA position declined in July relative to June, reflecting the decrease in gross international reserves,” the central bank said.
Dollar reserves dipped to $76.713 billion in July from $77.521 billion amid lower gold valuations and as the BSP used its reserves to intervene in the daily peso-dollar trading.
On the other hand, foreign assets held by banks rose due to bigger loans and investments in debt papers.
The BSP raised interest rates by another 25 basis points (bp) in its June policy meeting following the first hike of the same magnitude in nearly four years in May, as policy makers sought to rein in inflation expectations. This was later on followed by a strong 50bp rate hike in August.
LENDING PICKS UP
Banks also handed out more credit in July, marking the fastest climb since April.
Bank lending surged by 19.6% compared to June’s 19.1% increase.
Counting reverse repurchase deals as well, total loans grew by 18.7% in July compared to 17.7% the preceding month.
Most of the loans went to production activities, surging 19.7% from a year ago. Lending to the construction sector saw the biggest increase at 37.6%, according to latest data. This comes amid the government’s aggressive infrastructure spending push.
Other industries which received additional credit were financial and insurance activities (35.9%); wholesale and retail trade, repair of motor vehicles and motorcycles (25.6%); manufacturing (19%); and real estate (15.9%).
At the same time, July saw lending for administrative and support services activities slashed by nearly half and that for agriculture cut by 7.1%.
Lending for retail borrowers slowed to a 16.9% increase compared to June’s 17.8% climb due to lower salary-based credit and car loans. These tempered the impact of a jump in credit card borrowings, the BSP said.
“The BSP will continue to ensure that the expansion in domestic credit and liquidity proceeds in line with overall economic growth, while remaining consistent with the BSP’s price and financial stability objectives,” the central bank said. — Melissa Luz T. Lopez

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