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SEC releases rules for ASEAN advisor pass

THE Securities and Exchange Commission (SEC) has released the proposed guidelines to implement the ASEAN Capital Markets Forum (ACMF) Pass, which seeks to allow the free movement of investment advisers within the Association of Southeast Asian Nations (ASEAN).
In a draft circular posted on its Web site last week, the SEC said the guidelines will cover professionals in the Philippines and other ASEAN countries who signed the memorandum of understanding (MOU) on the ACMF Pass.
The Philippines, along with Malaysia, Singapore, and Thailand, signed in October the MOU that will facilitate cross-border movement of investment advisers. The issuance of an ACMF pass is set to fast-track registration and remove additional licensing requirements among the signatory countries.
The ACMF Pass forms part of the ASEAN Capital Market Professional Mobility Framework, which is scheduled to be implemented on January 2019.
Qualified professionals, known as recognized representatives, include the sales personnel of a broker dealer recognized by the SEC, a certified investment solicitor licensed by the commission, and other professionals that may be determined eligible in the future.
The products that professionals can give advice on include “shares, bonds and units of collective investments schemes including units of real estate investment trusts and units of infrastructure funds,” according to Section 5 of the proposed guidelines.
The recognized representative will then be allowed to issue or promote research analyses or reports regarding products in the capital markets, as well as give general investment advice.
However, they will be prohibited from “giving advice to investors by considering investor’s investment objective, financial situation and particular needs,” and “soliciting for sales of the capital market products set out in Section 5,” as per Section 7 of the draft circular.
The proposed guidelines state that the recognized representative must be part of a licensed firm in the host jurisdiction, while not necessarily requiring them to be full-time employees of the firm.
“A Recognized Representative may be attached to more than one Licensed Firm at the same time; the attached Licensed Firm is obliged to monitor the conduct of the Recognized Representative and ensure that he complies with the Host Jurisdiction’s laws and regulations when performing activities under the Framework in the Host Jurisdiction,” according to Section 9 of the proposed guidelines.
The ACMF Pass will be valid for two years, after which the recognized representative may renew the document for each succeeding year.
Should a recognized representative violate the laws and regulations of a host jurisdiction, the host regulator will take regulatory action, with the assistance of the adviser’s home regulator.
The SEC is accepting comment on the proposed rules until Dec. 7. — Arra B. Francia

House bills seek to impose P10 tax on plastic bag use

TWO House bills seeking to impose an excise tax on the use of plastic bags were filed at the House of Representatives.
House Bills 8523 and 8558, written by Sultan Kudarata 2nd district Rep. Horacio P. Suansing, Jr. and Manila 3rd district Rep. John Marvin C. Nieto, both proposed to levy P10 on plastic bags used in any supermarket, mall, and other establishment.
Mr. Suansing said the tax is intended to discourage the use of plastic bags and help the government develop programs to address plastic pollution.
“By resorting to this levy, it is hoped that Filipinos find environment-friendly alternatives to plastic bags in going about the needs of their daily lives,” he said in the explanatory note.
The bill also proposes ”to raise additional revenues for the government which could be used to finance programs and projects to counter the deleterious effects of plastic bags and their use,” he added.
The proposed “Plastic Bag Tax Act” will be applied at the point of sale of and may be collected by establishments with gross receipts of at least P100,000 in the preceding year or new businesses with a capitalization of at least P100,000.
The bill, however, provides that the tax will not be collected on plastics used as “original packaging,” including packaged fish, meat, poultry, fruit, vegetables, nuts, confectionery, dairy products, cooked food and ice.
Sellers will be required to keep an inventory of its plastic bags, to be shall be retained for five years subject to review by the Bureau of Internal Revenue. — Charmaine A. Tadalan

BIR to begin using DENR certification for e-vehicle tax

THE BUREAU of Internal Revenue (BIR) said that it will use a certification process used by the Department of Environment and Natural Resources (DENR) to determine whether electric vehicles qualify for tax exemptions.
The BIR issued Revenue Regulation 24-2018 on Sunday, which requires manufacturers, assemblers, or importers of purely electric or hybrid vehicles to provide the BIR a DENR Certificate of Conformity as a condition to obtain exemptions from the automobile excise tax.
Previously, the Department of Energy (DoE) had to certify whether the vehicles met the standards for tax exemption.
“During the inter-agency consultation called by the DoE with representatives from the BIR, DoF (Department of Finance) and BoC (Bureau of Customs), the DoE proposed that the BIR could use as a basis the current Department of Environment and Natural Resources (DENR) system of issuing a Certificate of Conformity (CoC) for new motor vehicles in determining with high confidence the vehicle classification as hybrid or purely electric vehicles (HEV/EV),” according to the regulation.
“The actual inspection or separate validation of vehicle by the DoF to verify whether the automobile is an HEV/EV is a clear duplication of an existing DENR issuance of CoC for new locally manufactured or imported vehicles,” it added.
The CoC will now be the basis for the BIR to distinguish purely electric vehicles, which are exempt from the automobile excise tax, and hybrid vehicles, which are only subject to 50% of the applicable excise tax.
In Republic Act 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) law, cars with a net manufacturer or importer’s selling price of less than P600,000 would be subject to a 4% excise tax rate, from 2% previously. Those between P600,000 and P1 million are taxed 10%, those between P1-P4 million are subject to a 20% tax, and those over P4 million are levied a 50% tax. — Elijah Joseph C. Tubayan

Bill creating Central Luzon investment authority hurdles committees

A BILL creating a Regional Investment and Infrastructure Coordinating Hub (RICH) in central Luzon was approved by three House committees.
House Bill 8637, which proposed to create RICH as a government corporation in place of the Subic-Clark Alliance for Development Council (SCADC), was approved by the House Committees on Government Enterprises and Privatization, Appropriations and Ways and Means.
The proposed measure intends to turn the region into a “single investment destination so as to expand and replicate the rapid economic growth in the areas hosting special economic or freeport zones,” as stated in the Committee Report.
If enacted, the measure calls for RICH shall have an authorized capital stock of P2 billion, divided into 20,000 no-par shares fully subscribed and paid for by the national government.
Funds will be sourced from “assets which the President of the Philippines may transfer to the RICH as part of the equity contribution of the government,” and through national budget appropriations.
It proposed to create a 13-member board tasked to develop a Central Luzon Investment Corridor Master Plan, which shall include among others low-cost housing within the special economic or freeport zones.
The board, in coordination with investment promotion agencies, will also establish a one-stop shop for the registration, operation and maintenance of enterprises in the region.
Its counterpart measure, Senate Bill No. 1997 was approved on third reading on Oct. 1. — Charmaine A. Tadalan

Senate resolution seeks more time to use maintenance, capital funds

A JOINT resolution has been filed in the Senate seeking to extend the availability of 2018 appropriations for maintenance and other operating expenses (MOOE) and capital outlays (CO) to another year.
Senate Joint Resolution No. 17 was filed on Nov. 26 by Senator Loren B. Legarda, chair of the Senate committee on finance. It was filed on the same day its counterpart measure in the House of Representatives was passed on third and final reading.
It seeks to extend the 2018 appropriations for another fiscal year or until Dec. 31, 2019.
The joint resolution stated that the MOOE and CO appropriations were needed for the next year in order “to fund priority projects, aid and relief activities as well as the maintenance, construction/repair and rehabilitation of schools, hospitals, roads, bridges and other essential facilities of national government.”
It took note of the typhoons and flooding affecting a number of regions in Luzon and Mindanao.
The devastation brought about by typhoons Ompong (international name: Mangkhut) in September and Rosita (international name: Yutu) in October has hampered the government’s delivery of basic services to the affected communities, it added.
Under Section 61 of the 2018 General Appropriations Act (GAA), the release of the MOOE and CO funds is authorized until Dec. 31, 2018 only.
However, the resolution noted that some appropriations have not been released and obligated. This may then result to the automatic reversion of the appropriations to the General Fund, which could have been used to fund relief and rehabilitation projects.
“It is clearly imperative that Section 61 of the General Provisions of Republic Act No. 10964 should be amended such that the validity of the MOOE and CO appropriations shall be extended for another fiscal year for the benefit of the people and for the welfare of the nation,” the joint resolution read.
It also said Congress has made the similar joint resolutions in 2002 and 2013. In the GAAs for 2014 to 2017, the appropriations were available for release and obligation for a two-year period. — Camille A. Aguinaldo

Can the public sector spearhead digital transformation?

(Second of two parts)
In the first part of this article, we recalled that both private and public sectors must take the business of digital transformation an utmost priority if the country is to achieve both local and regional economic success. In particular for the public sector, government must spearhead efforts to create a digitally-inclusive, technologically-capable nation. Otherwise, digital innovations will fall short of mainstream adoption. This idea was touched on during the ASEAN Outlook Conference 2018.
We also discussed the inconsistencies of digital infrastructure and implementation among member-countries in ASEAN — the Philippines included — and how national governments must proactively address the gaps in digital transformation if the region is to reach lasting economic prosperity. First, the Philippines’ public sector must see the merit in reviewing and harmonizing existing regulations and policies concerning digital infrastructures, which have grown outdated and outpaced by advancements in the digital field. Second, there are concerns about the actual building and scaling of digital infrastructure, which may deter economic growth.
The third consideration not to be overlooked is the relationship between technological advancements and the human element. Government officials should not forget to assist the work force with up-to-date skills that can navigate a digitally-ready economy. In this regard, there is room for improvement, specially in the Philippines. EY’s report, Driving digital into the heart of Asia’s financial services industry, surveyed over 140 senior executives in the financial services sector across Southeast Asia, and it shows that only 20% of financial institutions in the Philippines have fully embraced digital adoption. This is in comparison to Malaysia’s 36%, and Vietnam’s 33%. The most pertinent challenge pointed out by the study comes from legacy infrastructure — or the resistance against types of digital disruptions and interoperable technologies — which is felt the strongest in the Philippines at 50% among respondents.
Given that resistance to digital transformation involves user behavior as well, the public sector must also take this reluctance into account when implementing policies that directly affect the human work force. One such manner that may address the resistance is by championing diligent and insightful digital literacy, which can bridge the misunderstanding surrounding technological advancements in the workplace.
Case in point, a 2014 analysis from the Oxford Business Group wrote of digital literacy as a key factor for economic development in the Philippines as supported by the country’s widespread IT-BPO industry. Heavily backed by the Department of Science and Technology-Information and Communications Technology Office (DOST-ICTO), respective LGUs across the country handled the physical facilities and computer centers for digital training, while the government office provided the content, curriculum, and institutional support.
More recently this year, even the Department of Education (DepEd) displayed a proactive initiative to empower the next generation with the necessary skills for digital transformation. Partnering with a telecommunications company, their aim is to implement a digital literacy program across 3,800 public schools in the region. It recognizes that more public-school teachers and students are gaining access to mobile devices and internet, requiring them to know about responsible digital citizenship, and how they can use these platforms to help find jobs later in life.
Finally, let us consider that the public sector’s heaviest task is to lead digital efforts with a strategic vision. Digital brings about a wave of changes to the way people do business. For truly lasting and impactful change, government must present an overview of purpose, where technological advancements are utilized in the right direction. This cultural shift must go together with agile leadership which understands where digital innovations are best put into practice.
The Philippines has crossed the stage of awareness, evident as far back as 2011 when the previous administration created the Philippine Digital Strategy (PDS) under the DOST-ICTO. Built upon the foundation of its predecessor, the Philippine Strategic Roadmap for Information and Communication Technology (ICT), the PDS encouraged the nation to become a globally competitive and prosperous society where every citizen from all walks of life could have affordable, reliable, and secure information access. It also emphasized the importance of a thriving knowledge economy between the public and private sectors, which would lead to a strategic thrust towards investing in people, not just in major cities but in the island communities, who could also benefit from proper ICT training. Seven years later, the same spirit of strategic digital integration is still present in the public sector. During the two-day APEC Economic Leaders’ Meeting in Port Moresby on November 17-18 President Rodrigo R. Duterte said micro, small, and medium enterprises (MSMEs) should have more reliable digital infrastructure to lean on, not only for the betterment of their business methods, but also to push the Philippine economy towards a digitalized business landscape. Meanwhile at the press briefing held on the sidelines of the APEC Leaders’ Meeting, Trade and Industry Secretary Ramon M. Lopez added that digitizing business is the inevitable path to progress, and both MSMEs and the incoming workforce of young adults should be prepared for it with human resource development and training.
At the very least, the public sector is starting to get a good grasp of the right direction for developing digital infrastructure for both businesses and everyday users while at the same time protecting them, beginning with a critical starting point – legislation.
The passing of the Electronic Commerce Act of 2000 was a milestone victory for digital legitimacy. There is also the Data Privacy Act of 2012, another important step in protecting the basic legal rights of every consumer online. In the same year, the Cybercrime Prevention Act of 2012 came to life as well, addressing multiple legal concerns of harmful online interactions such as cybersex, child pornography, theft, and illegal access to data and libel.
Lawmakers are in constant dialogue with the private sector, studying new ways to deal with the digital disruption of our time, in a way that co-exists with the legacy infrastructure that is unique to the Philippine’s economic landscape. Fintech has reached the front page, from paying for ride-sharing services remotely, to getting loans straight from your smartphone. The level of mobile penetration in the country increases rapidly every year.
Certainly, there is no one-size-fits-all solution to the digital evolution of a nation. But, as with all widespread socioeconomic transitions and industrial revolutions, the people rely on government and the public sector to set the tone for development as well as lead the way in navigating an increasingly complex digital world. It is definitely heartening that despite the country’s uneven level of digital and technological development, our people continually demonstrate the potential, enthusiasm and aptitude to thrive in a digital economy.
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 authors and do not necessarily represent the views of SGV & Co.
 
Wilson P. Tan is the Vice Chairman and Deputy Managing Partner of SGV & Co.

Good, not great

I am pleased to share with readers the executive summary of our quarterly economic outlook report for GlobalSource Partners (globalsourcepartners.com) written by Marie Christine Tang and me last Nov. 22, 2018. The second part of this column is a statement of the Foundation for Economic Freedom supporting TRAIN 3, on property valuation for taxation purposes issued Nov. 30, 2018.
Local moods have soured over the past several months as inflation rose, economic growth slackened, the trade deficit ballooned, the peso fell and asset returns dropped. The string of bad news may be traced to: global events, particularly the triple whammy of US monetary tightening, surging oil prices and an escalating US-China trade war, that have contributed to risk-off sentiments; as well as domestic developments, particularly the badly managed rice import policy and the many chokepoints caused by lagging infrastructure that have led to the economy’s greater import dependence.
More recent news of stabilizing world oil prices and easing local inflation have given rise to hopes that the worst may be over. Indeed, optimists are apt to bet that slower US growth would reduce the number of Fed rate hikes going forward, that the US and China are likely to reach some agreement to ward off the imposition of even higher tariffs next year, and that locally, not only would the visit of President Xi Jinping speed up execution of China-funded infrastructure projects and deepen trade and investment ties in other areas but a new law freeing up rice imports would send prices of the basic food staple down. Should these happen, as the argument goes, emerging markets would benefit from improved financial market sentiments and risk appetites that would bring about a virtuous cycle of capital flows and asset price recoveries and face lower risk of a trade-related China slowdown and its adverse knock-on effects on regional growth; separately, the Philippines would gain from expanding trade and investments with China, and the specter of rising inflation would recede from consumers’ memories, raising confidence anew.
Wishful thinking? Rosy certainly and in the event, the headwinds are unlikely to disappear completely. As it is, oil prices are still projected to remain at current high levels, the US Fed is still on course to tighten once more this year and anywhere from 50 to 100bp next year, a high degree of uncertainty surrounds the US-China trade dispute where both sides appear prepared to set aside WTO rules, and locally, most Filipinos continue to eye the rewards of Chinese projects with suspicion, including opportunities for job creation, and with regards to the proposed law to “tariffy” rice, it remains unclear at this point whether it would truly free up rice trade.
Moreover, election season lasting through May 2019 is upon the Philippines during which time, work on the executive’s tax reform proposals, particularly the unpopular Package 2 dealing with corporate investment incentives, is widely expected to be put on hold, keeping investors in suspense about the future corporate tax regime. In the meantime, any boost to domestic demand from election spending may simply translate into higher imports, especially with all the construction works spurred by public spending adding to the economy’s chokepoints in the interim. As well, second round impacts from all the supply shocks this year are still working their way through the economy and expected to keep inflation outside monetary authorities’ target band through mid-2019.
growth
All things considered, the Philippine growth outlook is still a good one. Our baseline view forecasts GDP growth remaining above 6% in the next 12 months, among the highest in the region However, the downslide in output growth would continue in the face of external headwinds and internal supply bottlenecks. Upsides to growth include better than expected exports of both goods and services, including tourism, as well as lower inflation, particularly rice prices. Downsides include an escalating trade war, more by way of confidence than direct trade impact which is expected to be manageable, and a multiplicity of geopolitical risks, including another runup in oil prices.
FEF STATEMENT ON THE VALUATION REFORM ACT
We, the Foundation for Economic Freedom, support the proposed amendments to the country’s real property valuation system under Package 3 of the government’s Comprehensive Tax Reform Program.
The main objective of Package 3 is to develop and maintain an equitable and efficient real property valuation system.
It will address the present problem of multiple, overlapping valuations through the adoption of a uniform valuation standard and establishment of a single valuation base for taxation purposes.
Conflicting land values result in right-of-way compensation problems — leading to delays in implementation of government infrastructure projects and additional costs to the government.
It also will make the Bureau of Local Government Finance (BLGF) to develop and maintain implementation of uniform valuation standards in compliance with international best practices, under the Department of Finance (DoF) oversight while assessment levels and tax setting will remain a function of the Sanggunian of the Local Government Units (LGUs). Separating valuation from political bodies will also ensure that the practice is free from undue politicization.
It will further ensure timely updating of the Schedule of Market Values (SMVs). At present, only 38.8% of LGUs and half of Regional Development Offices have updated SMVs. Outdated and below market valuation means foregone government revenues from property ownership and conveyances.
Setting up of an electronic database on real property will ensure transparency and accessibility of data.
On average, real property taxes contribute around 31% of the LGUs local source of income. The proposed reform will increase government revenues and at the same time increase local autonomy as it will improve LGU financial self-sufficiency. Package 3 does not intend to create and impose new taxes but rather improve efficiency in real property tax collection.

A divorce settlement for Brexit

When the no-frills, no-nonsense British Prime Minister Theresa May crossed to center-stage dancing, raised hands swaying to the languid swing of ABBA’s “Dancing Queen,” it all said something was terribly amiss. It was in October, at the Conservative Party’s conference. Despite the standing ovation (the only polite and “veddy-British” response expected) to the somewhat awkward dancing, the matter to be discussed by May at the conference was not as forgivably acceptable. She was standing for approval of her planned UK transition deal with the European Union (EU) through to the end of 2020, after the March 29, 2019 effectivity of the British withdrawal (Brexit) from the EU, as signified by the UK in June 2016.
An analysis by the political editors of the Daily Mail traced the development of the draft Brexit transition proposals (dailymail.co.uk, Nov. 28, 2018). The “Canada-style deal” (in the way Canada deals with the EU) proposed that the UK would have free trade with the EU, but no freedom of movement (stop free immigration from and to EU countries, no more reciprocal open visas for travel and business). However, the Gross Value Added (GVA) or the goods and services produced per area in the UK was estimated to decrease in a range of -4% in London to -6.5 in Northeast Midlands, with varying percentage decreases in between for the 11 major regions. The predicted effect on Gross National Product (GNP) of the UK would have been about -6.7% (negative) growth for the next 15 years (Ibid.).
The “Norway-style deal” prescribed free trade agreement with EU with freedom of movement, which will have varying but less negative GVA effect for the regions, ranging from -0.9% (London) to -1.5% in Northeast and West Midlands. Predicted effect on GNP might have been a -1.4% growth decline over the decade and a half (Ibid.).
May’s final proposal (already preliminarily discussed last week with the EU Committee on Brexit), the “Chequers deal” (named after the Prime Minister’s country residence), will have free trade with the EU, with freedom of movement for goods (import/export) but not for people (no free immigration/travel and business visas) after Brexit. The GVA effect would again vary for the regions, ranging from -1.8% in Wales to -2.5% in London (because London was the favorite place for EU immigrants and businesses, and London would suffer most from the decreased economic activity and output). Predicted GDP over 15 years would shrink -2.5% (Ibid.).
No way would a “No-deal” Brexit be acceptable to May. Government analysts predict that if the UK would deal with the EU simply on World Trade Organization (WTO) terms, GVA would plunge -10.5% for the North East, with the Midlands not far behind, while London would suffer the lowest, -6.5%. Predicted GDP growth would be -9.3% (Ibid.).
It is even embarrassing that the UK comes to the table with the EU at this time, negotiating from a position of disadvantage, when Brexit has already been declared to the EU and to the world. It will be doubly embarrassing for the UK to now say to the EU, “Sorry, we reconsidered and want to stay with the bloc.”
“The UK cannot just crash out of the EU without any transition agreement,” Bank of England (BoE) governor Mark Carney said. Such a scenario would trigger a financial crisis in which the pound would plunge by 25% and house prices would fall by 30% (AFP News, Nov. 29, 2018). And Finance minister Philip Hammond said that at this point, the only thing to think about was how to minimize the costs of leaving the bloc — estimated by the BoE to be around 3.9% of GDP over 15 years (Ibid.).
Independent experts have said that 3.9% of Britain’s GDP will amount to about 100 billion pounds ($128 billion) a year cost to the economy by the 2030s (Associated Press, Nov. 29, 2018). Without May’s negotiated divorce settlement deal with the EU, Britain could plunge into its deepest recession in nearly a century, with the economy shrinking 8% within months as inflation would soar to almost 7% and unemployment to 7.5% from the 4.1% now (Ibid.). Carney said, however, that Britain’s financial system will be able to withstand the shock as it did after World War II (telegraph.co.uk, Nov. 28, 2018).
But note the gradations of negative impact of Brexit (even under the final “Chequers” proposal), on the various regions of the UK, as studied by the Daily Mail (op. cit., Nov. 28, 2018). Recall that at the June 23 referendum, 51.89% voted to leave EU and 48.11% voted to remain (CNN News, June 24, 2016). After 43 years with the EU, did the British people really want out — back to national (being alone, and having its own trading identity and independence) and out of supranational trade and commerce in the togetherness of a single market? Did the regions want to lose their “upgrade” of opportunities, from the added trading muscle of the UK from the EU membership?
But the day after the Brexit referendum, Nicola Sturgeon, Scottish First Minister, cried out that, “As things stand, Scotland faces the prospect of being taken out of the EU against her will. I regard that as democratically unacceptable” (Reuters, 06.24.2016). Scotland, a nation of five million people, voted decisively to stay in the EU by a clear majority of 62%, clashing fiercely with the UK as a whole, which has voted in favor of an exit (Ibid.). In Scotland, the recurring cry for secession from the UK was intensified, perchance to be able to join the EU on its own, as a separate and independent country.
And so, Tory leader David Cameron, Prime Minister since 2010, who had pushed for a “Remain” win, offered to resign not so immediately, wishfully delaying his exit to October (CNBC, 06.24.2016). Conservative MP, Mrs. May, the home secretary since 2010 assumed the position of Prime Minister in mid-July when Cameron had to resign ahead of his intention to do so, in the face of street protests against the confirmed Brexit by the polls (BBC News, July 11, 2016).
What else then would May be expected to do, think about and consume her passions with, but the implementation of the Brexit vote, and the transition plan to soften the divorce from EU? It seems bloody late that the mechanics of transition are being discussed and to be decided by Parliament only now. It would have been lovely if the details of new trade and business relationships were transparent to all publics, and resolved by government when Brexit was just a gleam in the UK’s eye. After all, Brexit could painfully and embarrassingly be one giant step backward for Britain, father of the world, one might say — who, up to these modern times, can have democracy and the monarchy coexist, symbolic of mundane civil politics guided by universal ethics from God-given authority.
Theresa May might have to do more provocative dancing than her stilted movements trying to mimic the inimitable Meryl Streep in the 1999 movie Mamma Mia!. She has to convince Parliament on Dec. 11 to vote a majority “Yea” to her “Chequers deal” as a transition settlement from the UK divorce with the EU.
And Parliament might have to do a “Full Monty” to reveal to itself and to the global audience how the UK now defines its role and participation in the practically borderless socioeconomic and political “coopetition” (cooperative competition) in world markets.
 
Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.
ahcylagan@yahoo.com

The meek shall inherit the earth

By Raju Mandhyan
IT is also said that the meek shall inherit the earth. By meek they don’t mean small and scared but someone who is kind, forgiving and most of all humble. I respect this value and one incident in my life has made it a permanent part of my life.
It was 1969 and I was in my shorts. Yes please, you may take a moment to visualize me in my shorts. Spider legs! I used to study in a Zoroastrian school, in India, called the Sardar Dastur Hoshang Boy’s High School. In those days, hardly twenty years after British rule, it still carried the Khaki culture. Kids wore Khaki uniforms and several teachers would dress in starched suits with safari-type, hard hats to go. The school campus was the size of ten football fields, had wooden buildings like military barracks. In summer the winds blew strong and dusty while in winter the skies were misty till noon.
Several teachers were of the Zoroastrian faith, some Hindus and only one of them was a Christian. Mr. Arpootharaj was stout, dark-skinned with Dravidian features. He used to pat his curly, black hair down with pomade and his most outstanding feature was a smile that could be seen a mile away. He taught us Science, English and Maths. He was kind, funny and always forgiving. And because of his nature, he was always at the receiving end of jokes and pranks. Being a Christian teacher who taught Science, he’d often be seen marching the corridors of the school with the Bible, Darwin’s The Origin of Species, a blackboard eraser and a box of chalks by his side. The moment he’d enter a class, he’d demand the windows be thrown open to let in fresh air. He used to pronounce fresh air with flair…fresh aaiyr! And, because of this the boys nicknamed him “Sir, Fresh Aiyr!”
One summer day, Sir, Fresh Air, walked into class sans his brilliant smile but with a look that was distant and pensive. With the eraser, he wiped the big blackboard clean once, twice and until it was black, shiny. With his chalk, he then placed a dot, plumb in the center of the blackboard. Slowly, he turned to the class and stated that we’d be studying Astronomy today and eased himself silently in a chair and stared straight ahead, still pensive and distant.
The boys went wild. “What’s that, Sir?,” “Is that Astronomy, Sir?,” “Is that fresh air, Sir?” He did not react nor respond. The boys continued heckling but he stayed silent and distant. The boys didn’t know how to carry on. You cannot continue teasing a person who does not respond. The room turned silent and the silence grew such that a pin, if dropped, would be heard miles away.
After what seemed like a millennium, Sir Fresh Air stood up and began to speak. “Imagine!” he said. “Imagine that the blackboard and all the space beyond is the universe. Recognize that the universe has thousands of galaxies and that little dot in the center is the galaxy that we live in, our Milky Way.” “Imagine,” he continued ”that within that dot, which is our galaxy, lays our Solar System and within that Solar System is our Sun, the Planets with their moons and our Earth. Within our planet Earth is our country, our hometown and this school room with all of us inside it.” “All of that,” he went on “is within the dot and more. Yet, we live a life that is filled with pride, distrust and hate.” With a long sigh and still pensive, Sir Fresh Air, slowly sat down.
The silence in the room took over again. Outside the wind still howled and the dust still blew. The boys in the class didn’t know what struck them. A while ago they were top of the heap and now they felt puny and negligible in their own minds. With a stroke of his chalk, the Bible-toting, funny little brown man with a dazzling smile shattered our worlds and left us with a lesson in humility that would last us a lifetime.
Today, decades later, the story is alive and kicking in my heart and on my mind. I believe that for us to be successful and lead a life of significance we must juggle with two things. One of them is faith and the other is humility. Faith not just of the structured kind but faith in self, faith in what we create and faith in the fact that all we need and want is ours to have with a lit effort and a little dedicated focus. Once we achieve what we need and want then humility is the key to enjoying and sustaining that success, that significance.
 
Raju Mandhyan is an author, coach and speaker.
www.mandhyan.com

Forest and trees

By Tony Samson
THE bias for action is critical when dealing with consultants, especially those coming from academe or who have had many clients in one category. While these gurus can mesmerize a seminar crowd, or a board committee with their road map to the future (evolve or die), they seldom bother with how to move their clients from Point A to Point F. They may dismiss such humdrum exertions as operational issues.
Success goes beyond strategy. And the devil is in the details. The play is just a script until there is a cast and a working sound system, with the hundred details in between, including the catering for rehearsals.
People who describe themselves as “big picture” guys, who see the forest instead of the trees, tend to underestimate the importance of trees. Are they just details or are they what the forest is all about?
A fancy but seldom patronized restaurant in a low-traffic location may essay a business goal expressed in grandiose terms: to be the lifestyle culinary experience of choice for the trend-setting, high-disposable income set of influencers among millennials.
This kind of sweeping mission statement calls for all sorts of details like where this demographic niche now presently dines or whether they even constitute a defined target market worth chasing. Do they have disposable income? Do they eat in a group? What kind of menu will they find attractive? What price points are acceptable? Who are the competitors in this category and how well are they doing? What kind of chef is needed in the kitchen and how much will she cost?
Operational details are like that. They tend to be tedious and almost irritating to the forest guy who feels he is being attacked by a swarm of hornets — let the operational folks figure that out. What we need is a road map…but how do you get to the destination and what form of transport is appropriate? Also, who will drive? How much gas is needed?
The most elusive form of goal-setting is chasing ranking, like aiming to be number 1 in a category. This objective holds a few assumptions. It presumes one has defined the industry he belongs to and who his competitors are. In our restaurant example, does being first include only restaurants in that block. If so, how many blocks are involved? Does it involve restaurants in the category of choice, say only French bistro types?
The other problem of ranking as a goal involves defining the category to compete in, whether gross revenues, market share, or profitability. But the most pernicious implication of this type of goal setting is an almost automatic me-too strategy which becomes the default option. What the present number 1 goes into is slavishly copied and attempted to be exceeded by the challenger with sub-goals like cost is not an impediment in the objective. Poaching talent from Number 1 becomes compelling. Usually, the wannabe ends up with discards and overpay for them.
Game changers like Apple offered products like tablets and smartphones that consumers didn’t even think they wanted, or needed. Leadership in any industry sometimes means changing the rules and redefining the industry category. Can a phone be a computer or a camera? Does Apple belong to the computer industry or the phone sector? It doesn’t seem to matter anymore when categories converge.
The category that one’s business belongs to is not always obvious. Does a gym belong to the fitness business or health care? Defining one’s competition determines the core skills needed to excel. Anyway, in all these exercises, implementation rules. A piece of legislation, say on cyber crime, can be tied up in knots on what it means out there in the real world. It’s the implementing guidelines that make the law workable. Although sometimes ambiguity is an opportunity for side deals.
Even those who accept that the devil is in the details understand that it is still necessary to set goals. While “forest” visionaries tend to have bad accounting habits (it’s not a cost, but an investment) they are the ones who change the game, but not always how they intended to. The detailed “trees” people have to get involved. Sometimes, both types just get lost in the woods.
 
Tony Samson is chairman and CEO, TOUCH xda.
ar.samson@yahoo.com

Sara Duterte’s party, PRP to join forces

THE PEOPLE’S REFORM Party (PRP) of the late senator Miriam Defensor-Santiago is set to forge an alliance with presidential daughter and Davao City Mayor Sara Z. Duterte-Carpio’s regional party Hugpong ng Pagbabago (HNP) on Monday, Dec. 3.
“There will be another Hugpong ng Pagbabago (HNP) alliance agreement signing with the People’s Reform Party (PRP) on December 3, 2018,” former presidential spokesperson Harry L. Roque, Jr. said in an e-mail on Nov. 30.
Mr. Roque filed his certificate of candidacy (CoC) last October to pursue his senatorial bid under the PRP.
“This will be conducted at Casa Roces, San Miguel, Manila, at 1:30 p.m. It will just be a simple ceremony with only the officials of PRP, HNP and few invited guests,” his office added.
Hugpong had formed an alliance last August with three other national parties, Senator Cynthia A. Villar’s Nacionalista Party (NP), the National People’s Coalition (NPC), and National Unity Party (NUP).
That same month, Ilocos Norte Governor Maria Imelda Josefa “Imee” R. Marcos’s Ilocano Timpuyog also joined HNP.
Other parties that joined HNP include Serbisyo sa Bayan Party (SBP) of National Capital Region, Alyansa Bol-anon Alang sa Kausaban (ABAKA) of Bohol, Aggrupation of Party for Progress (APP) of Zamboanga del Norte, Kambilan of Pampanga, PaDayon Pilipino of Misamis Oriental, Tingog Sinirangan of Eastern Visayas, Partido Balikatan of Bataan, and Lakas-Christian Muslim Democrats (Lakas–CMD) of Leyte (1st District) Rep. Ferdinand Martin “FM” G. Romualdez.
Ms. Santiago founded the PRP in 1991 when she ran for president in the 1992 presidential elections.
Also on Monday, President Rodrigo R. Duterte will confer on the late senator the Quezon Service Cross, the highest award the government can bestow on outstanding civil servants.
In its statement, the Senate said only five people have been awarded the Quezon Service Cross: the departed interior secretary Jesse M. Robredo in 2012 and Senator Benigno Simeon “Ninoy” Aquino Jr. in 2004, president Ramon D.F. Magsaysay, Sr. in 1957 president Emilio Aguinaldo in 1956, and foreign affairs secretary Carlos P. Romulo in 1951. — Arjay L. Balinbin

2 upcoming Davao convention centers to boost MICE sector

DAVAO CITY — The opening of two new convention centers within the next three years will establish the city as a major meetings, incentives, conferences and events (MICE) destination, government and business officials said.
“We need new convention centers to help us lure this huge [MICE] market,” said Arturo M. Milan, president of the Davao City Chamber of Commerce and Industry, Inc.
Mr. Milan said these facilities will also help sustain flights to and from the city, particularly international flights.
City Tourism Officer Regina Rosa B. Tecson told BusinessWorld these new convention centers “will serve as magnets for organizers to bring their events to this part of the country.”
Two companies, homegrown LTS Pinnacle Holdings Inc. and listed firm Cebu Landmasters Inc. (CLI), recently announced their respective plans to put up convention centers in their mixed-use projects.
LTS Pinnacle, owner of the New City Commercial Center (NCCC) chain of local shopping malls and supermarkets, is developing an eight-hectare complex in its Panacan property where its warehouse is currently located.
Althea D. Lucas, LTS Malls Inc. associate vice president, said they see the need for another convention center in the city to cater to bigger events.
“We want to cater to that need as Davao is growing (in terms of businesses in tourism),” Ms. Lucas told BusinessWorld.
On the other hand, CLI, in partnership with local firm YHEST Realty and Development Corp. of the Huang and Villa Abrille clan, is building a convention center in its Paragon Davao complex.
“This convention center, which is expected to have a seating capacity of about 1,000, will become the go-to-place both of locals and visitors alike,” Jose R. Soberano III, CLI chair and chief executive officer, told BusinessWorld during the recent project launch.
At present, the SMX Convention Center is the biggest in the city. The Ayala-Alcantara joint venture has also set up the Tent, a 1,500-capacity space at the Azuela Cove. — Carmelito Q. Francisco

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