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TransCo now part of broadband plan

By Victor V. Saulon
Sub-Editor
NATIONAL Transmission Corp. (TransCo) said privately owned National Grid Corporation of the Philippines (NGCP) has agreed to include the state owner of the country’s power transmission network in the national broadband plan.
“We agreed not to quarrel on it,” said Melvin A. Matibag, TransCo president and chief executive officer, in an informal gathering with reporters on Wednesday at the Philippine National Oil Co. compound in Bonifacio Global City.
He said a memorandum of agreement (MoA) has been prepared on the national broadband plan, which now involves TransCo. The Department of Information and Communications Technology (DICT) is the project’s implementing agency.
The memorandum has yet to be signed by the three parties, Mr. Matibag said, adding that NGCP still has to present the agreement before its board. He said he was talking with NGCP officer-in-charge President and CEO Anthony L. Almeda on the transaction.
“Signing will depend on the schedule of NGCP board meeting,” he said.
“We’re targeting it [to be signed] before the end of the month,” Mr. Matibag said, adding that TransCo’s legal department was sorting out details of the MoA.
The development comes about two months after TransCo expressed fears that NGCP could “dangerously exert its economic and political dominance in the country” if allowed to enter into a bilateral agreement to implement the national broadband plan.
Mr. Matibag in February told Energy Secretary Alfonso G. Cusi that his office “strongly” opposed NGCP’s contention that it would allow only a bilateral agreement between itself and the DICT in the broadband plan.
TransCo’s position was contained in a letter sent to Mr. Cusi dated Feb. 5 after the secretary sought Mr. Matibag’s comment on an earlier letter from NGCP to the Department of Energy.
Mr. Matibag had said NGCP’s “distorted legal position” runs counter to the spirit and letter of the Constitution, Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA), NGCP’s franchise law and the concession agreement that granted the Sy-led company the right to handle power transmission in the country.
NGCP has an exclusive 50-year franchise to operate, maintain and expand the country’s transmission network. It has a fiber-optic system for internal communication, which it offered to be used under the broadband plan for free.
NGCP had said that negotiations with DICT, which started as early as May 2017, had stalled when TransCo insisted on being part of the talks. It said there was no authority for TransCo’s involvement, adding that when the government privatized the transmission network, all rights over the assets, except their title, were turned over to NGCP as the concessionaire.
“One of the provision(s), which is important I think, is we agreed that in any way the memorandum of agreement will not affect any claims by both TransCo and NGCP, and cannot be used as evidence in any forum to the other claims except for the purpose that we want to push for the broadband project,” Mr. Matibag said.
“Ang purpose lang nito (The MoA’s sole purpose) is the desire of the administration to come up with better [telecommunication] service,” he added.
He said a meeting among TransCo, NGCP and DICT is scheduled next week to discuss the memorandum of agreement.

Small-scale miners to also face government scrutiny

By Elijah Joseph C. Tubayan
Reporter
THE GOVERNMENT seeks to include small-scale mining operations to comply with the disclosure requirements of the Philippine Extractive Industries Transparency Initiative (PH-EITI).
“To sustain the initiative and fully achieve the EITI objectives, indeed there is a need for greater participation by all stakeholders in the next report to be able to gauge more accurately the benefits versus the cost of natural resources development,” went a speech by Department of Environment and Natural Resources (DENR) Secretary Roy A. Cimatu as read by Undersecretary Analiza R. Teh at the PH-EITI National Conference on Wednesday, April 18.
“To be more comprehensive, there is also a need to include the small-scale mining sectors in the reports. Although small in scale, this sector comprises thousands of workers and their families, and they also contribute a sizable share to the economy especially on the local front,” she added.
Finance Undersecretary Bayani H. Agabin, Focal Person and Chair of the PH-EITI, said for his part that, although they hope for voluntary reporting from small miners, they may compel them to disclose to the EITI as a condition to secure their Environmental Compliance Certificates (ECCs).
“We are hoping that we will enact the proper ordinance resolution to compel to report. The governance on small-scale miners now is in the Provincial Mining Regulatory Board. So we need to get that on board, we are working together,” Mr. Agabin told reporters.
Complying with the disclosure requirements would give the government accurate data on revenues they receive from small mines, as well as the amount of minerals it extracts.
Chamber of Mines of the Philippines (CoMP) Executive Director Ronaldo S. Recidoro, meanwhile, said that small-scale mining has to “become part of mainstream mining.”
“They don’t pay taxes, or do social development work or do environmental protection work, they will not have reason to report. So we need to break that cycle somehow. We have to make small-scale mining part of the mainstream,” Mr. Recidoro said.
He also said the government has initiated a mechanism to declare the areas where small-scale mining cooperatives can operate, but noted that its implementation was “so slow.”
“It’s like around five minahang bayans have been declared so far. That has to be fast-tracked. They don’t want to get into the mainstream because there’s a big responsibility but they have to,” Mr. Recidoro said.
“They produce more gold than legitimate mining, and their impacts on the environment and the communities are bigger than the legitimate mines. That’s really the challenge,” he added.
Yesterday saw the launch of the 4th PH-EITI country report that piloted the inclusion of non-metallic mining industries.
The report reconciled mining sector data for 2015 and 2016, showing that the industry generated P27.29 billion and P27.55 billion in taxes for those respective years.
The EITI provides a platform to systematically report on, review, and assess what is being paid by companies and received by governments through a system of bilateral disclosures — to serve as a tool for lawmakers and civil-society groups in forming policies in the extractives industry.

Comparison-shopping site sees steady interest in car loans after TRAIN

MONEYGURU Philippines Corp., which operates financial comparison website MoneyMax.ph, said interest in car loans remained steady after the implementation of the tax reform law, driven by aggressive discounting and lower-end vehicles which are now taxed more lightly.
moneymax
MoneyMax.ph managing director Moritz Gastl said that the firm, which also offers auto insurance, did not experience a decrease in its car loan applications following the imposition of higher excise taxes on automobiles with the enactment of the Tax Reform on Acceleration and Inclusion (TRAIN) Law.
“Since [the implementation of tax reform], volume has been stable, comparable with the beginning of last year. We haven’t actually seen it going down,” Mr. Gastl told reporters in a roundtable discussion in Makati City on Wednesday.
Signed into law by President Rodrigo R. Duterte in December, TRAIN took effect at the start of the year.
Mr. Gastl explained that the financial technology firm saw stable car loan applications following the tax reforms since its customers “realized that [cars are] actually not more expensive.”
“Because of the new tax, we [saw] a lot of dealerships giving a lot more discounts. Some of the cars were even cheaper now than they were before the TRAIN came.”
He added that MoneyMax.ph offers loans and insurance targeted largely at the low end of the car market.
“The bulk of the cars we’re insuring or giving loans to, I would say, are lower-end cars,” Mr. Gastl said, adding that some of the cars are to be enrolled in ride-hailing services such as Grab.
According to the website of the Department of Finance, cars worth P600,000 and below carry a 3% average effective tax rate under the new tax system, whereas vehicles worth P4 million and above carry an average rate of 30%.
The steadiness of apparent demand for car loans, Mr. Gastl added, contrasts with a spike in applications prior to the TRAIN Law.
According to a joint report from the Chamber of Automotive Manufacturers of the Philippines, Inc. and Truck Manufacturers Association last month, sales of automobiles fell 3.2% year-on-year to 26,176 units in February .
With the higher excise tax, vehicle sales in January have started to display signs of weakness, growing at a slower 4% pace following a spike in December when sales surged 33.4% before the new taxes took effect.
MoneyMax.ph is an online platform which lets its users to compare financial and telecommunication products such as insurance, loans, credit cards and broadband plans.
In July, it secured $50 million in funding from investors such as the World Bank’s International Finance Corp. and Alibaba Entrepreneurs Fund.
Established in 2014, MoneyMax.ph is part of the CompareAsiaGroup which operates financial comparison websites in Hong Kong, Indonesia, Malaysia, Philippines, Singapore, Taiwan and Thailand. — Karl Angelo N. Vidal

Global guide for fighting tax crimes

One of the key indicators of how progressive a tax system is in any jurisdiction is its ability to address and prosecute tax crimes. Fighting tax crimes, including financial ones, is a global concern since it is increasingly becoming complex and sophisticated. At the Fifth Organization for Economic Cooperation and Development (OECD) Forum on Tax and Crime held in London last November 2017, the Ten Global Principles for Fighting Tax Crimes was launched. The formulated principles marked a milestone as the first global reference guide for tackling and fighting tax crimes. In brief, they are as follows:
PRINCIPLE 1: ENSURE TAX OFFENSES ARE CRIMINALIZED
The OECD acknowledges that each jurisdiction has a different legal system; thus, handling tax violations is expected to vary from one jurisdiction to the other. Regardless of the policy framework per jurisdiction, however, the guide advocates that jurisdictions should have an effective legal framework in place, with the following elements:

• The law clearly defines the tax offenses that are criminalized.

• A criminal sanction applies if the offense is proven.

• More serious offenses are punishable by more serious criminal sanctions; and

• Criminal sanctions are applied in practice.

PRINCIPLE 2: DEVISE AN EFFECTIVE STRATEGY FOR ADDRESSING TAX CRIMES
The guide recommends that each jurisdiction should have a tactical approach for addressing tax crimes. Generally, there should be an overall tax compliance strategy that covers the full range of compliance, from encouraging voluntary compliance, dealing with inadvertent noncompliance, avoidance, evasion and serious crime. However, the specific strategy would be based on each jurisdiction’s legal system, policy, legislative environment and general structure of law enforcement. Moreover, it underlines the value of identifying risks and threats and the need to monitor and regularly review it.
PRINCIPLE 3: HAVE ADEQUATE INVESTIGATIVE POWERS
In order to prosecute tax crimes successfully, agencies responsible for investigating tax offenses should have investigative powers necessary and effective in the context of their own mandate, taking into account the ability to work with other law enforcement agencies which may have additional powers. The guide identified and discussed investigative powers such as search powers; the power to obtain third-party documentary information; powers to interview, to conduct covert surveillance and undercover operations; the power to intercept mail and telecommunications, to search and seize computer hardware, software, cellphones and digital media; and the power to arrest a person.
According to the guide, the investigative powers should allow access to information and evidence in the digital world in addition to the more traditional sources of information. Moreover, the investigative powers of any law enforcement agency must be accompanied by safeguards, oversight, and authorization to avoid abuses and to ensure that a person’s rights are adequately protected.
PRINCIPLE 4: HAVE EFFECTIVE POWERS TO FREEZE, SEIZE, AND CONFISCATE ASSETS
In addition to the investigative powers, the guide stressed that each jurisdiction should have the ability to freeze/seize and confiscate assets in the course of a crime investigation. These are necessary in order to prevent the proceeds of a crime from being disposed of or from being enjoyed by a suspect, and to preserve physical evidence of a crime. It is also a deterrent as it can reduce the profitability of committing tax crimes. The guide also states that jurisdictions should ensure that the freezing, seizing and confiscating of assets are possible for both domestic and foreign tax investigations and judgments. The legal power to do so should be provided by domestic law, or for international cases, may be undertaken in response to a request for mutual legal assistance in accordance with international agreements.
PRINCIPLE 5: PUT IN PLACE AN ORGANIZATIONAL STRUCTURE WITH DEFINED RESPONSIBILITIES
To reduce the risk of duplication of efforts and gaps in law enforcement, the guide suggests the formulation of a clear organizational model that allows for efficient allocation of responsibilities. A clear organizational structure is also important as it allows for greater transparency and accountability in the use of resources and deployment of strategies. Moreover, it should ensure that the agency responsible for the investigation and prosecution of tax crimes is independent of personal or political interests, and is also held accountable for exercising its functions with fairness and integrity.
PRINCIPLE 6: PROVIDE ADEQUATE RESOURCES FOR TAX CRIME INVESTIGATION
There should be adequate resources for tax crime investigation. The guide states that, whatever organizational model is adopted, sufficient resources should be allocated for the investigation and enforcement action of tax crimes. Understandably, the level and type of resources will vary in accordance with the overall budgetary constraints and other priorities of the jurisdiction. In particular, the type of resources needed may vary depending on the nature, scale and developmental stage of the economy. Nonetheless, the guide specified the important resources that agencies must have in fighting tax crimes, namely: Financial Resources, Human Resources, Training, Infrastructure Resources, Organizational Resources, and Data and Technology Resources.
PRINCIPLE 7: MAKE TAX CRIMES A PREDICATE OFFENSE FOR MONEY LAUNDERING
The guide recommends that jurisdictions should designate tax crimes as one of the predicate offenses for money laundering. This implies that tax crimes will be considered as a component of money laundering; hence, anyone caught laundering money will also be prosecuted for violation of tax laws.
PRINCIPLE 8: HAVE AN EFFECTIVE FRAMEWORK FOR DOMESTIC INTERAGENCY COOPERATION
According to the guide, there are different forms of cooperation that may be utilized by each jurisdiction, subject to their domestic laws. To prevent abuse of powers, measures that ensure check-and-balance of authority must likewise be incorporated. Some forms of interagency cooperation mentioned in the report include: information sharing, joint investigation teams, interagency centers of intelligence, and secondments and co-location of personnel.
PRINCIPLE 9: ENSURE INTERNATIONAL COOPERATION MECHANISMS ARE AVAILABLE
Considering that tax crimes may necessarily involve foreign jurisdictions, the guide emphasized the importance of international cooperation. According to the guide, criminal activity can cross international borders, but investigation agencies have powers which are limited by jurisdictional boundaries; hence, cooperation amongst investigation agencies is necessary. International cooperation can take a number of forms, such as information sharing, servicing of documents, obtaining evidence, taking of testimony from witnesses, transferring persons for questioning, executing order to freeze and seize assets, and conducting joint investigations. However, there should be a legal agreement between jurisdictions, setting out the terms and procedural requirements for enforcement of these mechanisms.
PRINCIPLE 10: PROTECT SUSPECTS’ RIGHTS
The guide acknowledged the importance of protecting the rights of the taxpayer. Taxpayers suspected or accused of committing a tax crime must be able to rely on basic procedural and fundamental rights. In particular, according to the guide, taxpayers suspected or accused of committing a tax crime should be able to rely on the following basic rights, namely: the right to a presumption of innocence; to be advised of their rights and of the particulars of what one is accused of; to remain silent; to access and consult a lawyer and entitlement to free legal advice; to interpretation and translation; to access documents and case material, also known as a right to full disclosure; to a speedy trial; and to protection from double jeopardy.
The Ten Global Principles is envisioned to empower tax administrators to increase overall tax compliance and effectively promote a tax system, drawing from the experience of other jurisdictions and considering the best practices to combat tax crimes.
In the Philippines, we can use the guide to benchmark our current system in fighting tax crimes. In fact, the guide encourages developing jurisdictions, such as ours, to use the principles as a diagnostic tool to identify policies/measures which are not yet in place, taking into account local laws and regulations. This comes at an opportune time when tax reform is under way to plug leakages in the country’s tax system. But more than enshrined principles, the greater challenge to attaining positive reforms is a firm political will to see thru its efficient implementation and a well-oiled moral torch to do what’s right.
The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.
 
GLacy S. tabirara is a manager at the Tax Services group of Isla Lipana & Co., the Philippine member firm of the PwC global network.
glacy.s.tabirara@ph.pwc.com
(02)845-2728.

Intellectual property rights in East Asia

The degree of wealth and economic size of East Asian economies generally correlate with their degree of private property rights protection, both physical and non-physical or intellectual property. While protection of physical properties like houses, cars, and land are easier to see and measure, the protection of intellectual property rights (IPR) like patents, copyrights, trademarks, and trade secrets are not so tangible.
IPRs are important because they represent the “heart and soul” of private enterprises and the goods and services that they produce.
For instance, people differentiate and choose shoes made by companies as represented by their logos such as a big check, three striped leaves, or letter F. These same people also choose products from food companies with logos of a double arch, a happy insect, or a smiling young female.
Here are some numbers showing the degree of IPR protection of selected East Asian economies. (Data and report sources are (1) Property Rights Alliance (PRA)- International Property Rights Index (IPRI) 2017 Report, (2) US Chamber of Commerce (USCC)- Global Innovation Policy Center (GIPC), International IP Index (IIPI) 2018, and (3) World Economic Forum (WEF), Global Competitiveness Report (GCR) 2017-2018. The numbers in parenthesis beside each report represent the number of countries or economies covered. The WEF’s GCR is composed of 12 pillars and pillar #1 is about Institutions; among the sub-pillars there is IPR protection).
IPR Protection Index
These numbers show that East Asian tiger economies also rank high in IPR protection. Conversely, emerging economies aspiring to join the club of tiger and developed countries tend to have medium to low ranking in IPR protection. The exception is Brunei, a developed economy in terms of per capita income (thanks to its high gas exports and small population) but it is low in IPR protection.
The issue of IPR protection in the region was tackled by a symposium early this week entitled “Intellectual Property Rights in the ASEAN Economic Community: Challenges and Potentials” at Intercontinental Kuala Lumpur, Malaysia. The event was organized by the Institute for Democracy and Economic Affairs (IDEAS), Malaysia’s first and most dynamic free market think tank.
There are moves to abolish the trademark, corporate logos and branding of products deemed “unhealthy” in many countries.
For instance, plain packaging of tobacco products has been legislated in Australia and France, and is currently considered to be legislated in Singapore too. Such trademark busting policies are also considered as extended to other “unhealthy” products like alcohol, sugary food like chocolates, confectionery and candies.
IDEAS commissioned a study that was presented in the symposium entitled “Challenges in Improving Intellectual Property Rights in ASEAN: Case study of Singapore, Malaysia, Indonesia, Thailand and Philippines” by Adidarmawan, S.H. and Marolita Setiati.
In the paper, the two authors noted that:
“Trademark promotes freedom of choice and enable consumers to make quick, confident and safe purchasing decisions. Standardizing… packaging for tobacco products that would restrict the use of brands, trademarks and trade… concern is if brand marks are eroded, then consumers are not able to differentiate between inferior products and those with a reputation for reliability that may create an environment in which companies may end up competing on price instead of quality. In addition, plain packaging is easier for counterfeiters to copy and could result in an increase in inferior — and more dangerous — imitations. The counterfeiters will have an easier time duping the consumer into buying products that are sub-standard. Brand restriction sets an unfortunate precedent, opening the door for IP rights to be weakened in other industries.”
A BusinessWorld report early this week entitled “Excise tax increase triggers widespread cigarette smuggling” also underscores these concerns.
High taxes, rising regulations and plain packaging have similar effects — they make the consumption of legal and branded products like tobacco and alcohol more restricted and more costly, which open up more space and markets for illicit, illegal, smuggled, and cheaper products. This results in more smoking, more drinking, more consumption of the restricted products.
Governments should focus on protecting private property rights, both physical and intellectual. Weakening such property rights will also lead to a weakened state and strengthen the powers of smugglers and criminal syndicates who do not pay taxes and do not respect brands and intellectual property.
 
Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.
minimalgovernment@gmail.com.

Oil’s rally on political risks sustained by US inventory drop

Signs of waning U.S. oil inventories are helping sustain price gains after supply threats stemming from geopolitical tensions lifted crude last week to the highest level since late 2014.
Futures in New York rose as much as 1 percent after climbing 0.5 percent Tuesday. An industry group was said to report that U.S. crude stockpiles declined last week, before government data on Wednesday that’s forecast to show a gain. The International Energy Agency warned rising prices risk weakening global oil-demand growth and spurring output, including from American shale fields.
Oil last week rose to the highest level in more than three years as geopolitical tensions surrounding Syria, Saudi Arabia, Iran as well as the U.S. and Russia raised fears of supply disruptions in the energy-rich Middle East. While the frictions have eased slightly this week, the Organization of Petroleum Exporting Countries and allies seem determined to persist with their deal to cut production and curb a glut.
“While tensions surrounding Syria has rallied oil prices recently, the higher oil prices we’re seeing today are driven by fundamentals rather than geopolitics,” Barnabas Gan, an economist at Oversea-Chinese Banking Corp., said by phone from Singapore. Still, “the rally appears to be very fragile, and the fundamentals can quickly swing. Supply is something the market will be monitoring very closely.”
West Texas Intermediate for May delivery climbed as much as 69 cents to $67.21 a barrel on the New York Mercantile Exchange, and traded at $67.08 at 2:39 p.m. in Singapore. The contract climbed 30 cents to $66.52 on Tuesday. Total volume traded was about 2 percent above the 100-day average.
Brent for June settlement added 52 cents to $72.10 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $5.06 premium to June WTI.
American Inventories
Futures for September delivery rose 0.7 percent to 430.3 yuan a barrel on the Shanghai International Energy Exchange. The contract closed 0.7 percent higher at 427.4 yuan Tuesday.
Nationwide crude inventories decreased 1.05 million barrels last week in the U.S., the American Petroleum Institute was said to report, while a Bloomberg survey before Energy Information Administration data on Wednesday predicts an increase of 650,000 barrels. Stockpiles at the key pipeline and storage hub in Cushing, Oklahoma, also dipped by more than 1 million barrels, according to the API numbers, which would be the first drop since early March if confirmed by government data.
There’s a major risk of a supply crisis in Venezuela, according to IEA Executive Director Fatih Birol, as the Latin American nation’s economy continues to deteriorate. Rising prices due to that as well as other political conflicts may prove harmful to OPEC and “output from U.S. shale, Mexico’s deep waters, Brazil and elsewhere” could increase, he said in a Bloomberg television interview from Berlin.
Jeddah Meeting
With American supplies in focus, OPEC and its allies including Russia are scheduled to gather in Jeddah, Saudi Arabia, on April 20 to explore ways of prolonging their cooperation in their efforts to reduce a global glut. Potential measures could include new inventory targets that extend their output cuts, and laying the foundations for an alliance that will last for years. — Bloomberg

The business of privacy

Our data in this age of social media have never been so ubiquitous. Our personal information is readily available on sites such as Facebook, Instagram, and Twitter, and our professional lives are easily accessible on LinkedIn. The recent events that have transpired from the Facebook hearings at the US Congress prove how much we know about other people and how much we provide for others to see.
However, with this deluge of information, we do not know how external organizations use these data to entice and manipulate us into buying, reading, clicking, subscribing, or liking a particular page, profile, or person. Thus, is it still possible for us to remain truly private in this day and age? Is it still possible for us in business to safely manage information provided to us by our customers and stakeholders? Is it also possible to have privacy as a business?
On the possibly of being truly private, it is impossible for us in business and management to be out of the loop. Our names, departments, and positions are posted on our company websites, and our email addresses are sometimes also posted, to the delight of spammers and scammers. We may not be active in social media, but we will always be tagged by friends, family, or foes. Our lives are truly connected even if we minimize or even stop our social media use. We do not even have to give away our business cards for others to learn about us; people just have to Google to know about us.
On managing information provided to us by our customers and stakeholders, the Data Privacy Act of 2012 protects our fundamental human right to privacy.
Moreover, “the State recognizes the vital role of information and communications technology in nation-building and its inherent obligation to ensure that personal information in information and communications systems in the government and in the private sector are secured and protected,” which ensures that information provided with consent must be used only for its originally intended purpose. We should make sure that personal information such as birth dates, mobile numbers, and email and home addresses are not unscrupulously used to further personal gains or organizational profits.
On having privacy as business, the possibility of having to pay to make one’s account in Facebook “private” has sprung up. Since Facebook is free, it makes money through the ads that pop out in our pages. Advertisers use Facebook to target different demographics based on what we have posted on our profiles. This is similar to seeing a big car advertisement along the highways in our country; the only difference is that we see these ads in our newsfeeds.
The business of privacy is evident in high-end service industries, where one has to pay a steep price to stay in an ultra-private resort and remain an “anonymous” billionaire in an offshore banking facility. This situation is being replicated in the digital age; now there are organizations that provide private and secure networks to banks and other financial intermediaries. The rise of business-to-business organizations that provide safe and secure networks to make data private will continue to grow.
Our concern for privacy is no longer confined to our homes but extends to the worldwide web. Social media has made it easier for would-be scammers to use our data. We have a responsibility to protect and to manage the information given to us by our customers. Privacy comes at a price, so we must be vigilant when giving out information.
The views expressed above are the author’s and do not necessarily reflect the official position of De La Salle University, its faculty and administrators.
 
Brian C. Gozun is Dean of the Ramon V. Del Rosario College of Business of De La Salle University.
Brian.gozun@dlsu.edu.ph

Regulating vaping

Several studies have been made public since the start of the year indicating that “vaping” or the use of e-cigarettes, as a substitute for tobacco use, is not really a safe or healthier alternative to smoking cigarettes. Officially, to date, the Department of Health (DoH) does not consider e-cigarettes a “proven nicotine replacement therapy.”
Vaping or the use of e-cigarettes is currently defined in the DoH website as the use of a “plastic and metal device that heat(s) a liquid nicotine solution (e-juice) in a disposable cartridge. It creates a tiny light on the tip, even glows like a real cigarette, and produces a vapor that stimulates the act of smoking.”
Former Health secretary Jaime Galvez Tan, in a news report, cited a 2016 World Health Organization report on “Electronic Nicotine Delivery Systems and Electronic Non-Nicotine Delivery Systems,” and he claimed that “vaping” still involved nicotine, which he described as a “tumor promoter”.
Even the Southeast Asia Tobacco Control Alliance, a regional group advocating for the further regulation of tobacco use, was also quoted as saying that vaping “involves the inhalation of nicotine at the same levels as cigarettes and can maintain nicotine addiction.” Unsurprisingly, tobacco companies and e-cigarette makers and advocates contradict this.
Tan, now a board member of anti-tobacco advocate Health Justice Philippines, added that “there is no such thing as a healthy substitute to smoking,” and that “vaping or the use of electronic cigarettes is not completely safe because these still emit toxic chemicals.” This is another claim, I am certain, that disagrees with the Philippine E-Cigarette Industry Association (PECIA).
There have been many arguments for and against in the last few years, and at this point, more independent scientific studies and research papers published on the topic will help regulators and policy makers decide on the most suitable approach to regulating particularly vaping or the use of e-cigarettes.
Litter is a major problem when it comes to cigarettes, because of ash and cigarette butts. Many smokers end up littering as they mindlessly throw cigarette butts just anywhere. Even vaping has its refuse, particularly its disposable plastic cartridge. So, in this sense, even vaping generates garbage.
Also, a lot of people vape in places where smoking is prohibited, perhaps in the mistaken belief that what they do is not “smoking” in the strictest sense. In my opinion, however, anything that emits some form of “smoke” or “vapor” into the atmosphere, which may be to the detriment of other people’s health, should be controlled or regulated.
Vaping still uses nicotine, and releases smoke or vapor into the atmosphere — the public space. I am uncertain about this, but those inhaling the smoke or vapor may still be subject to second-hand smoke or passive smoking. Unless there are definitive studies scientifically proving that such vapors do not harm other people, then vaping should be regulated like cigarettes.
A blog by US physician John Ross published in 2016 in the “Harvard Health Publishing” website of the Harvard Medical School noted that “nicotine in e-cigarettes may have several negative health effects” including “insulin resistance and type 2 diabetes,” while “inhaled nicotine increases heart rate and blood pressure.”
He added that “nicotine is highly addictive in its own right, and it may lead to changes in the brain that increase the risk of addiction to other drugs, especially in young people. Nicotine may also impair prefrontal brain development in adolescents, leading to attention deficit disorder and poor impulse control. These potential harms of nicotine are particularly worrisome in view of soaring rates of e-cigarette use in US teenagers.”
He also said that “nicotine in e-liquid may also be a household hazard. Many e-liquids have candy and fruit flavoring and packaging that makes them attractive to children. Cases of nicotine poisoning from e-liquid have skyrocketed, with accidental ingestions of e-liquid by kids rising by 1,500% in the past three years.”
The physician likewise noted that flavored e-cigarettes often contain a chemical compound called diacetyl, which is associated with a rare lung disease called bronchiolitis obliterans that causes permanent damage to the bronchioles (the tiniest airways in the lungs). He added that propylene glycol and glycerol, the major components of e-liquids, can also decompose when heated by the vaporizer, and be transformed into toxic compounds such as formaldehyde.
Personally, I think vaping should be regulated, and taxed, just like cigarettes and other tobacco products. And, in the next round of the tax reform program, both regular cigarettes and e-cigarettes should be taxed even more. I used to smoke but stopped 10 years ago. So, I don’t question people’s personal right to smoke or vape. However, I do believe in stronger regulation in the sale and use of what is obviously a consumer product with significant negative effects.
Sale or distribution should require government licenses, both national and local. Excise taxes should be imposed by the national government. Locally, establishments like shopping malls and restaurants and bars should be made to apply and pay for local permits to build or put up designated “smoking lounges” to accommodate their smoking or vaping customers.
In the same way that establishments must pay for permits to sell liquor, and separate permits to “serve” liquor, the same should apply to smoking and vaping. Stores should be licensed to sell and distribute vaping equipment and liquids. Manufacturers or importers of vaping cartridges should pay excise taxes, much like producers of sweetened beverages. And places allowing smoking or vaping should pay for permits to put up smoking lounges.
Smoking or vaping should be freely permitted in private residences, but must be limited to designated, licensed lounges in public facilities and spaces, private and public offices, private commercial buildings, and tourism facilities like hotels and resorts. Smoking or vaping should also be prohibited in public and private transportation. If we can ban cellphone use by motorists while operating motor vehicles, because it is a distraction, then the same should apply to smoking or vaping. They are obvious distractions, too.
 
Marvin A. Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.
matort@yahoo.com

Exposing yourself through public speaking

By Raju Mandhyan
I masticated a bit over the title of this article but came to a conclusion that, that is what I mean and that is what I have to say. One of the cardinal rules to succeed in public speaking is to say what you mean, and mean what you say.
Many years ago, when I wrote my first-ever book on public speaking, the HeART of Public Speaking, I placed on the cover an expensively purchased picture of a man speaking from behind a lectern to a highly engaged, happily laughing audience. The beauty of the picture wasn’t just in the fact that the audience looked extremely engaged, it was in the boldness of the fact that the speaker’s rear silhouette was butt-naked. I had my artist drape a gentle, heart-shaped shawl around the speaker and then the cover went ahead and said exactly what I had laid out inside the book. I loved it and so do those who still own that edition.
To succeed and to shine in public speaking one must do exactly that — expose your true self and then wrap yourself and your presentation with love.
How, you ask?
Well, you might have heard the saying that people would rather be in the coffin than do a eulogy. People fear public speaking more than they fear death. What we really fear is being exposed to scores of eyes that may not just see into us but that they may also see us through our charades. Our true selves might sometime be a timid, pretentious, or arrogant. Or, worse, people are afraid of speaking in the presence of large audiences because our agendas are unethical and we say what we do not mean and mean what we are not saying. With scores of eyes watching our every move, every micro-gesture, every bead of sweat, we can be called out for what we really are and what our true intentions might be. That is the fear.
This, of course, may not be everyone’s reason but the question remains the same: how do we expose our own true selves and yet be covered by a protective heart.
Here are certain tips that I have picked up from failing, falling, sweating, and dying then coming alive a thousand times when in front of a large group of people.
First, recognize and live out “common humanity.”
Tell yourself that the people out there are people just like you — some of them smart and some not so smart, just like yourself. Tell yourself that they too have doubts, fears, anxieties, challenges, and aspirations in life just as you do. Tell yourself that they are here to hear you no matter how profound or ordinary your spiel for them may be.
speech
Second, generate loving feeling towards them.
Though love resides in the hearts the activation of the desire to offer kindness, compassion and love is a function of the prefrontal cortex. You consciously tell yourself to be kind and loving then the forty odd million neurons residing in your heart go to work creating love for your audience. When that happens, you radiate kindness, and kindness begets kindness. Sure, there is a chance that there may be one or two thick-skinned, bitter lemon of a person in the room who will continue giving you the heebie-jeebies. Just go on without them, they will eventually turn into sweet lemonade.
Third, according to international speaker par excellence, Scott Friedman, be authentic. What does that mean? It means expose your true self. You don’t have to talk like your college professor or like Chris Rock. Just be yourself. Let your flaws, your stutters, your accent be seen, felt or heard. Let your heart lead you and speak from the heart.
If there is something you don’t know or are not sure, say exactly that, “I don’t know that and I am not sure about that.” That’s okay. You are neither Solomon nor Google.
Fourth, also according to Scott Friedman, be vulnerable. Yes, you do not wear a tight blue suit with a red cape. You were not born on planet Krypton. You can bleed and you can hurt. Expose all those sides of you that can bleed and hurt. Most people in the audience will relate to you, offer compassion, and a much kinder ear if you pretend not to be a flawless, man of steel. Should the thick-skinned, bitter lemon hurl a rotten egg at you, say “Ouch!” and then right away forgive her for she knows not what she does. She knows not that you are human too. Keep doing the right thing and keep creating value with your words.
Fifth, according to myself but I am sure Motivational Humorist, Scott Friedman, would love that this be by him, is to get good at being light and funny as a speaker. Laughter is the shortest distance between two hearts and humor is the vehicle that will drive you there. Some people are naturally funny and others can get there through practice. “Neuro-plasticity,” you know! The more you do something, the more you become that — in this case, funny. Just make sure to make yourself the butt of all your jokes otherwise the thick-skinned, bitter lemon will stare you down to your death.
There!
Of, course there is a lot more to public speaking. There is this fact that speaking in public is about, as I have already said, creating good value. It is about inspiring people, and about leading them to a new and a better place in their lives. You can do it. Yes, you can because the brilliance and wish to shine is in all of us. It is in all of us to help, love and cherish all those that surround us but, first, we need to have the gumption to expose ourselves, our true selves.
I never let many copies of my first book, first edition; circulate in the marketplace because I was afraid. I was afraid that the cover was too brash and it would scare away the conservatives. The thing is even though I’d written all about being brave, about being kind, authentic and open; I wasn’t brave, I was still a newbie to expressing myself courageously. Yes!
To wrap up, let me caution you away from that saying where public speaking gurus will tell you that to overcome your fear, you should imagine all your audience butt-naked. That, to me, is utter nonsense. Baloney! It is bound to scare the bananas out of you and sink you into the ground. It is best to, not just imagine, but be in your spiritual birthday suit when speaking in public. Bare your soul and your audiences will lift you up into the heavens. Have fun!
 
Raju Mandhyan is a speaker, a coach, and a learning facilitator.
www.mandhyan.com

Musk doubles down on Model 3 with round-the-clock production

Tesla Inc. will begin around-the-clock production at its Fremont, California, assembly plant to boost Model 3 output, chief executive officer Elon Musk told employees.
The electric-car maker will try to build 6,000 of the sedans a week by the end of June, Musk wrote in an email Tuesday first obtained by the blog Electrek. A Tesla spokesman declined to comment. The company’s shares rose as much as 2.9 percent in early U.S. trading on Wednesday.
“As part of the drive towards 6k, all Model 3 production at Fremont will move to 24/7 operations,” Musk wrote. “This means that we will be adding another shift to general assembly, body and paint.”
The goal Musk describes in the email is higher than the 5,000-a-week Model 3 target Tesla has set for the end of the second quarter, a potentially positive development that comes with some caveats. The CEO also signaled Tesla is planning another pause in Model 3 output next month after stopping for three to five days this week to make updates to its factories in California and Nevada.
The upgrades Tesla is making while idling the plants this week “should set us up for Model 3 production of 3000 to 4000 per week next month,” he wrote.
Model 3’s Importance
Tesla’s fortunes ride on boosting Model 3 output. The company needs revenue from delivering more cars to customers after spending billions of dollars to boost manufacturing capacity. Musk, who has said his automaker will be profitable and cash-flow positive in the third and fourth quarters and won’t need another capital raise this year, also outlined cost-saving measures in his email.
“I have asked the Tesla finance team to comb through every expense worldwide, no matter how small, and cut everything that doesn’t have a strong value justification,” he wrote. “All capital or other expenditures above a million dollars, or where a set of related expenses may accumulate to a million dollars over the next 12 months, should be considered on hold until explicitly approved by me.”
Tesla’s Fremont factory lines have been running on two shifts. Musk’s email doesn’t elaborate on the specifics of how a third will be added to the production schedule.
Now Hiring
About 10,000 people work at what is the lone auto assembly plant on the U.S. West Coast, and that number will be growing. Between Fremont and its battery factory near Reno, Nevada, Tesla will be adding about 400 people per week for several weeks, Musk wrote.
Tesla produced 9,766 Model 3s in the first quarter and missed a goal to build 2,500 of the sedans in the last week of March. Musk touched on why he was setting a higher target internally than the one the company has communicated publicly in his email.
“The reason that the burst-build target rate is 6,000 and not 5,000 per week in June is that we cannot have a number with no margin for error across thousands of internally and externally produced parts and processes,” he said, noting that the carmaker produced 2,250 of the sedans last week.
Musk said that going forward, workers should walk out of meetings or drop off of a call “as soon as it is obvious you aren’t adding value” and avoid using “acronyms or nonsense words for objects, software or processes at Tesla” to boost their productivity. He thanked his team for “accomplishing miracles every day.”
“We are burning the midnight oil to burn the midnight oil,” he said. — Bloomberg

Asian stocks rise on earnings hopes; yen declines

Asian equities advanced, helped by an encouraging start to U.S. earnings season, while Chinese bonds rallied after the nation’s central bank moved to support liquidity. The yen dipped amid a summit between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe.
Stocks gained in Japan, Australia and South Korea. China’s automakers declined after its government moved to allow foreign players take full ownership of their local ventures. The country’s 10-year bond yield fell the most since June after the People’s Bank of China cut the reserve requirement ratio for banks, part of its efforts to support credit amid a crackdown on shadow lending. The yen dropped on early signs that the Trump-Abe summit won’t see new trade demands from the U.S., reducing risk concerns.
With earnings season ramping up, corporate fundamentals are for now overshadowing renewed machinations on the trade front, where China retaliated for the U.S.’s hit on ZTE Corp. with agricultural duties. The S&P 500 Index climbed to the highest in four weeks.
Investor sentiment got a boost from geopolitics, with Trump saying the U.S. and North Korea have already started direct talks at “extremely high levels” in advance of a planned meeting between the two nations’ leaders this summer. — Bloomberg

A $133 million bet on a cryptocurrency designed to be boring

Digital currencies are risky, volatile investments, and that’s what speculators love about them. But a group of Silicon Valley venture capitalists and Wall Street fixtures are spending $133 million on a cryptocurrency that’s boring by design.
The concept is called Basis. The startup behind it wants to create an “algorithmic central bank,” inspired by economic principles that underpin fiat currency to adjust supply and minimize price swings. “We’ve designed this to be a cryptocurrency but without the volatility that we believe has prevented popular adoption to date,” said co-founder Nader Al-Naji.
Basis said Wednesday that it sold $133 million in a pre-sale coin offering to the venture capital arms of Alphabet Inc. and Bain Capital, as well as Andreessen Horowitz, Foundation Capital and Lightspeed. Stanley Druckenmiller, a billionaire hedge fund manager, and Kevin Warsh, a former governor of the U.S. Federal Reserve, also bought in.
Economists have supported Basis’s thesis that drastic price fluctuations common among digital currencies will limit their mainstream appeal as a place to store money long-term. Late last year, Bitcoin rose to nearly $20,000 before crashing below $7,000 in just a few months.
But Basis’s approach has drawn skepticism. Preston Byrne, a blockchain consultant, described the project, formerly known as Basecoin, as “the worst idea in cryptocurrency.” He argues that the startup over-promises on the potential and its implementation has little in common with a central bank. — Bloomberg

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