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MCWM builds road to improve access to landfill in Clark

By Victor V. Saulon,
Sub-Editor
METRO CLARK WASTE Management Corp. (MCWM) expects its profit to double from P200 million once the company has completed the construction of a private road leading to the integrated waste management facility that it operates within the area’s special economic zone.
“We have had very rapid progress in the last three years. Four years ago we made measly P10 million. This past year, we made probably P120 million. And this year, close to P200 [million],” said MCWM Chief Executive Officer Rufo B. Colayco.
“And once that road opens, it (profit) could double,” he said, referring to a private road that the company is about to build that connects to a separate road being built by state agency Bases Conversation and Development Authority (BCDA).
The private road will make access to the company’s landfill easier and faster — from the North Luzon Expressway to the Subic-Clark-Tarlac Expressway then to the Bamban exit that BCDA is building in Tarlac province.
“That will enable us to move garbage from a place like Quezon City or Caloocan [City] far more cheaply than those people who are now bringing that stuff to Montalban,” he said.
Mr. Colayco called the business, which is a partnership with German companies BN Ingenieure GmbH and Heers & Brockstedt Umwelttechnik GmbH, a “natural sequence” from his previous job. He is best known for being the man behind the first three Shangri-La hotels built in the country — Makati, EDSA and Mactan.
“In its core, the business really is the landfill which we built,” he said.
MCWM operates 80 kilometers away from Metro Manila. It currently serves around 90 municipalities and collects an average of 1,600 tons of municipal solid waste per day. The Clark Integrated Waste Management Facility, which is said to be patterned after European technology, earns from the fees paid by the local governments.
“It’s not just finding a piece of land and dumping garbage on it. You build a proper facility, with all the multi-layer and the treatment of the waste so that the water that’s finally disposed in the stream is clean,” Mr. Colayco said.
“It’s not rocket science but it is a worthy engineering. It has to be done properly. And that we do very seriously to the extent that we’ve acquired ISO certification,” he said.
MCWM currently has 200 workers and an annual payroll of about P50 million, he said. The company’s revenues last year reached almost P1 billion, he said, adding that this year the company will “certainly” hit P1 billion.
He differentiates the company’s approach in hauling garbage by building “transfer stations” in the cities where it has secured a contract, freeing waste collectors from the costly mode of bringing the garbage all the way to the Montalban landfill.
From the transfer stations, the garbage is loaded onto the company’s trailers, which are pulled by diesel-fueled tractor heads, similar to the trucks hauling waste to Montalban, but with better fuel efficiency because they travel via the expressways.
“But once that road is finished at the end of this year and if we succeed in getting a contract from a Quezon City or Caloocan, those people generate at least a thousand tons a day, and that will literally double our business overnight,” he said.

BSP to use regulatory and supervisory technology

By Melissa Luz T. Lopez
Senior Reporter
THE CENTRAL BANK is looking to roll out digital tools within the year to tighten its watch on the banking sector, an official said, having sought the help of a global network for the service.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier said last week that they are eyeing to employ regulatory and supervisory technology (RegTech), which comes at a time of increased activity in the digital space.
Ms. Fonacier said the BSP has partnered with the RegTech for Regulators Accelerator (R2A), a global initiative that provides technical assistance for financial sector regulators to “develop and test the next generation of digital supervision tools and techniques.”
The R2A engages regulators to build capacities and employ new supervisory tools within a 20-month period. Apart from the BSP, the R2A is also providing aid to regulators in Mexico and Ghana in terms of using financial technology (fintech) solutions or enhanced oversight of their respective financial markets.
“Currently, the BSP is exploring two RegTech solutions for implementation within the year,” Ms. Fonacier said in an e-mail interview.
BSP Governor Nestor A. Espenilla, Jr. said last year that the central bank is testing two platforms that make use of artificial intelligence for the conduct of bank supervision, which include the collection of industry data by way of electronic submissions as well as chat bots to process consumer complaints.
Ms. Fonacier provided more details, noting that an Application Programming Interface (API) will allow financial service providers to connect directly with the BSP for data sharing. Meanwhile, chatbots will automate the handling of complaints from the public which are sent via text message and online platforms.
“By improving data quality and access and developing new tools for data visualization and analysis, R2A will help the BSP implement a risk-based supervisory approach that reduces compliance costs and promotes financial inclusion while ensuring financial stability and integrity,” according to the R2A project description on its Web site.
“Moreover, the BSP will be able to capture crisper insights on the Filipino financial sector that will be used to develop policies such as the financial inclusion strategy.”
The R2A is funded by the United States Agency for International Development, Bill and Melinda Gates Foundation, and Omidyar Network, Ms. Fonacier added.
The shift to fintech-based regulatory tools come as the BSP pushes for increased use of electronic payment platforms, as captured by the National Retail Payment System project which kicked off in 2015.
The central bank targets to lift the share of digital payments to 20% of total transactions by 2020, coming from a measly 1% recorded in 2013.
Reuters reported on Saturday that the BSP alerted local banks to be “extra careful” following a foiled cyber attack at the Bank Negara Malaysia, where hackers tried to steal money using fake wire transfer requests sent to the foreign central bank.
The scheme sought to mimic the attack on the Bangladesh central bank in 2016, where $81 million was stolen by still-unidentified hackers which were transferred to a Philippine bank and local casinos before they were pocketed by thieves.

Agriculture trade deficit widens in Q4

By Ranier Olson R. Reusora
Researcher
THE TRADE DEFICIT in agricultural commodities widened in the fourth quarter of 2017, the Philippine Statistics Authority (PSA) said.
Data from the PSA released last Wednesday indicated outbound shipments of agricultural goods worth $1.3 billion in the fourth quarter, down 15.34% year on year.
Meanwhile, around $2.89 billion worth of farm products were shipped into the country during the period, up 2.72% from a year earlier.
As a result, the agriculture trade deficit was at $1.59 billion in the three months to December, up 24.37%.
Agriculture accounted for 9.74% or $4.194 billion of total trade, which was $43.043 billion in the fourth quarter.
The Philippines incurred its biggest agriculture deficit with the Association of Southeast Asian Nations at $838.33 million followed by the United States ($305.5 million), Australia ($99.92 million), and the European Union ($14.25 million).
On the other hand, trade in farm goods with Japan was in surplus by $129.54 million.
Animal or vegetable fats and oils were the top agricultural export at $340.07 million or 26.15% of the total goods shipped.
Other top farm goods exports include edible fruit and nuts ($330.33 million); fish and crustaceans ($126.04 million); preparations of meat, of fish or of crustaceans ($107 million); preparations of vegetables, fruit, nuts or other parts of plants ($93.84 million); and tobacco and manufactured tobacco substitutes ($83.53 million).
The country’s top import, meanwhile, were residues and waste from the food industries at $355.85 million, followed by miscellaneous edible preparations ($353.15 million); cereals ($348.48 million); animal or vegetable fats and oils ($323.51 million); and meat and edible meat offal ($255.66 million).
“The increase in imports might not have been enough to offset the decline in exports. Although, the rise in imports may indicate a growing domestic demand as intended imports may have been consumed domestically,” said Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines.
Nevertheless, trade in agricultural goods may improve this year: “I expect better [agriculture] exports with more external demand. At the same time, I expect [agriculture] imports to rise as well as domestic demand is anticipated to increase,” he said.

ABS-CBNmobile losses ‘contained’ in 2017

ABS-CBN Corp. said it has managed to contain the losses for its mobile business in 2017, while the multimedia giant holds discussions with Globe Telecom, Inc. on the future of ABS-CBNmobile.
“We contained the losses this year for ABS-CBNmobile. We are still in discussion with our partner. In the next few weeks, we’ll probably have some decision on mobile. But we are still in discussion with Globe in terms of the plan into the business,” ABS-CBN Chief Finance Officer Aldrin M. Cerrado told reporters after a company briefing in Taguig City on March 23.
ABS-CBNmobile is a mobile virtual network operator launched in 2013 in partnership with Globe Telecom. Mr. Cerrado said losses from the segment amounted to P560 million in 2017, around the same level it reported in 2016.
With the Globe deal set to expire in June this year, the two parties are currently discussing what to do with the business.
This year, the company is banking on the expansion of its digital terrestrial television (DTT) business, broadband services through Sky Broadband, direct-to-home (DTH) business, and international markets to drive its growth.
“The Sky Broadband business is really growing for us. And the third driver is direct to home, these are cable homes. Homes that can buy cable, but with the satellite offering… in less than two years, our DTH subscribers have grown to close to 400,000, so that’s a driver,” Mr. Cerrado said.
The ABS-CBN executive also said the international market is a potential growth driver for the company, given partnerships with streaming services such as iFlix.
“All our content that’s sitting in our library, now we are able to monetize them because there are   markets that are looking for content that they can actually use,” Mr. Cerrado said. — Arra B. Francia

Animals rights groups scent blood as fashion labels go fur-free

IS THIS the beginning of the end for fur?
With more and more fashion houses going fur-free, San Francisco banning fur sales in the city and British MPs considering outlawing all imports of pelts after Brexit, the signs do not seem good for the industry.
After decades of hard-hitting campaigning against fur, animal rights activists believe they scent victory.
Last month Donna Karan and DKNY became the latest in a flood of luxury brands to say they were planning to go fur free, following similar announcements by Gucci, Versace, Furla, Michael Kors, Armani, and Hugo Boss in recent months.
US-based animal rights group PETA (People for the Ethical Treatment of Animals), which is famous for its spectacular anti-fur protests, declared that “2018 is the year that everyone is saying goodbye to fur.
“Times are changing and the end of fur farming is within reach!” it told its 687,000 Instagram followers.
The British-based Humane Society International said the tide turned when Gucci declared it was going fur-free in October. Another hammer blow came this month when Donatella Versace said that “I don’t want to kill animals to make fashion. It doesn’t feel right.”
“Such influential brands turning their backs on cruel fur makes the few designers like Fendi and Burberry who are still peddling fur look increasingly out of touch and isolated,” said the society’s president Kitty Block.
Fendi’s Karl Lagerfeld shows little sign of second thoughts, however, and has said he will use real fur as long as “people eat meat and wear leather.”
‘LEATHER IS NEXT’
But PETA, which also campaigns for veganism, has warned the leather industry that is also in its sights, saying “You are next…”
And Professor Nathalie Ruelle, of the French Fashion Institute, told AFP that it was telling that the new fur-free brands “did not say anything about exotic leathers (such as crocodile, lizard, and snakeskin).”
Of the big designers, Stella McCartney, a vegetarian and animal rights activist herself, has pushed the ethical envelope the furthest, refusing to use fur, leather, or feathers.
But vegans want to go further still, with a ban on all animal products, which for some also means wool.
But the fur industry is not taking this lying down and has become much more vocal in its bid to counter animal rights groups’ social media campaigns.
The International Fur Federation (IFF) took Gucci to task when it went fur-free, asking if it “really wanted to choke the world with fake plastic fur…”
Philippe Beaulieu, of the French fur federation claimed fur-free was a marketing gimmick “trying to surf on emotion” to please millennials.
Fake fur, he said, was the real danger to the environment. “Brands who stop fur push synthetic fur which comes from plastic, a byproduct of the petrol industry, with all the pollution and harm to the planet that entails.”
FAKE FUR
In contrast, fur is natural and more and more durable and traceable, he said.
Arnaud Brunois, of the Faux Fur Institute, which he set up to counter the IFF, disputes this.
He insisted that “from an ecological point of view it was better to use a waste product from oil… than farm 150 million of animals then skin them and finally treat the pelts with chemicals.”
“It is part of the real fur industry’s marketing campaign to denigrate faux fur,” he added.
These days imitation can sometimes pass for the real thing as the British designer Clare Waight Keller proved in her fake fur-heavy Givenchy show at Paris fashion week earlier this month.
Luxury brand expert Serge Carreira at Sciences Po university in Paris said “fur was marginal for most of the fashion houses who have stopped using it.”
For instance, it only accounted for €10 million ($12.3 million) of Gucci’s six-billion turnover in 2017, or 0.16%.
While fur coats are now rarer on the streets of cities in the West, coats with fur collars — either fake or real, and sometimes a mixture of both, activists claim — are everywhere.
In China, however, the picture is very different.
Fur sales grew “phenomenally” there over the last decade, said IFF CEO Mark Oaten, and despite levelling off still dwarfs all those elsewhere combined.
The world’s biggest fur consumer is now also far by its it largest producer in a industry worth $30 billion globally in 2017. — AFP

Gov’t to tap panda bond market anew

THE GOVERNMENT will “most likely” tap the renminbi debt market as one of its regular financing sources after it saw robust demand at its maiden offer.
Asked whether the Duterte administration will regularly participate in the panda bond market, Finance Secretary Carlos G. Dominguez III said “most likely” in a mobile message to reporters last week, without elaborating.
On March 20, the government raised 1.46 billion renminbi, or about $230 million, in three-year debt papers, with bids reaching more than six times that brought the coupon to the low end of the 5.00-5.60% price guidance.
The proceeds of the government’s issuance will be converted into peso and will be deposited with the BSP, and will help fund the government’s infrastructure projects and other financing requirements.
The government plans to spend about P8 trillion in infrastructure until 2022, the end of President Rodrigo R. Duterte’s six-year term, in a bid to grow the economy by 7-8% until then from the 6.7% logged in 2017 and the 6.3% average in 2010-2016.

Céleteque relaunches its anti-aging skincare line

IN TAKING control of yourself, you begin to control the world, so perhaps, in controlling the appearance of your skin, you can begin to control the ravages of time. Céleteque relaunched it’s anti-aging skincare line during a party in Pasig last month, during which guests were invited to get to know their skin a little bit more.
The line consists of five products. The first is the Anti-Wrinkle Collagen Gel (P779, 50ml) which contains hydrolyzed collagen that reduces the appearance of fine lines and wrinkles, as well as soya bean protein, that makes skin soft and supple. It is a light textured gel that can be used day and night, and during tests by the company it effectively minimized fine lines and wrinkles by up to 68% within the first two weeks of use, according to Céleteque Product Associate Grace Benedicto.
Meanwhile, the Advanced Anti-Aging Tightening Pore Serum (P849, 30ml) is a pre-makeup or night serum, with the triple action of niacinamide (Vitamin B3) that improves skin’s firmness and elasticity, alpha-lipoic acid that reduces oiliness for a more refined smoother-looking visage, and salicylic acid that removes dead skin cells that can clog and stretch pores further.
The Rejuvenating Night Cream (P899, 50ml) contains PhytoCellTec™ that is said to protect the longevity of skin stem cells to combat skin aging, and uses the company’s unique Aqua-Shuttle technology which is supposed to deeply penetrate skin to provide intense hydration overnight. This intense nourishing cream is also enriched with sodium hyaluronate and tocopheryl acetate (Vitamin E) that protect the skin from free radicals which prematurely age the skin — all these to give dull and dry skin a nightly makeover.
Aside from these creams, Céleteque has also developed other beauty products. The new Line Reducing Eye Mask (P105) is a night mask said to help reduce fine lines up to 89% in four weeks as it contains niacinamide that tightens the skin, D-Panthenol that rehydrates sensitive skin around the eyes and tocopherol acetate. The Rejuvenating Facial Mask (P165) can be a nightly treat that is said to reduce wrinkles up to 84% with continued use for four weeks as it contains Bio-Peptides — composed of amino acids, peptides, and vitamins that rejuvenate and brings back the skin’s glow — and sodium hyaluronate, a tried-and-tested moisturizing agent for the skin.
Speaking about the product’s efficacy, Ms. Benedicto noted that the problem with one-size-fits all solutions is that they could possibly dilute the ingredients. “To make our products more effective, each product will resolve a specific skin concern,” she said.
Meanwhile, a guest at the event, Dr. Heidi Chan, a dermatologist, said that after the age of 25, skin begins to sag and shows the signs of skin aging. While she advises certain lifestyle changes, such as getting more sleep, drinking a lot of water, reducing exposure to the sun, and eating food rich in Vitamin E and other antioxidants, really, it all boils down to, “When you have a positive outlook on life, it will show on your face.” — Joseph L. Garcia

Smart says it makes 1st Voice over Wi-Fi call

SMART Communications Inc. said it has made the first successful Voice over Wi-Fi (VoWiFi) call over its network, as it plans to introduce the service to its customers soon.
In a statement, the wireless unit of PLDT, Inc. said it has made the VoWiFi call with its technology partner Huawei Technologies Co. Ltd.
VoWiFi or Wi-Fi Calling is a feature where customers can make calls while connected to a Wi-Fi network using the native dialer of their Wi-Fi calling-capable mobile phone, without having to install any third-party application.
This allows customers to make voice and video calls wherever there is Wi-Fi connection. The feature, however, is not yet available commercially.
“With this breakthrough, we are leading the way to making more communication options available to our customers. We look forward to letting our customers make Wi-Fi calls on PLDT Home and Smart Wi-Fi soon,” Mario G. Tamayo, PLDT and Smart senior vice-president for Network Planning and Engineering said in a statement.
Last year, Smart made the a Voice over Long-Term Evolution (VoLTE) mobile call, which uses LTE or 4G to transmit calls. With VoLTE, customers with VoLTE-capable devices can stay on the fourth generation (4G)/LTE network when making and receiving calls.
PLDT earlier this year partnered with Huawei Technologies to improve the group’s wireless services. The $28.5-million partnership is part of the continuing overhaul of PLDT’s fixed and wireless infrastructure, and information technology systems.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo

Bunge struggles to sell sugar trading operation

LONDON — Bunge is struggling to sell its sugar trading operations, according to two sources familiar with the matter, frustrating the 200-year-old agricultural merchant’s strategy of slimming down to focus on core areas and improve profitability.
German sugar refiner Nordzucker and Singapore-based agribusiness firm Wilmar International were among parties that had been initially interested, but nothing has materialized, according to the sources.
Sale difficulties risk complicating Bunge’s plan, announced by CEO Soren Schroder in February, to exit global sugar trading and distribution to concentrate on its core grain and oilseed operations. It said at the time it had identified “a few interested parties” in the sugar division.
US firm Bunge, which itself has been a reported takeover target from rivals Archer Daniels Midland and Glencore over the past year, declined to comment.
Wilmar said it had not held talks with Bunge over the sugar trading business, but declined to comment when asked if it had considered acquiring the unit. Nordzucker declined to comment.
Bunge’s move to exit sugar trading followed a $69 million group loss in the fourth quarter, which compared with a profit of $262 million a year earlier, the latest in a series of poor results.
The lack of strong buyer interest in the sugar unit also illustrates the wider malaise facing the industry, where a supply glut has driven down prices, squeezing Bunge and its global competitors. Louis Dreyfus Co is restructuring its sugar subsidiary in Brazil, for example, while German sugar group Suedzucker issued a profit warning this week.
The two sources, who declined to be identified because the discussions are private, said Bunge targeted a value for the unit, excluding debt, of around $75 million, which suitors deemed too high for what was on offer. One said if Bunge could not find a buyer, it would have to wind down the operation.
The lack of appetite for sugar assets and tough market conditions could also complicate separate plans by Bunge to divest its larger Brazilian sugar-milling business via a flotation, according to the same source. The business is expected to be valued at between $1 billion and $2 billion.
“The IPO of the sugar mills also seems unlikely as in this market environment, it would be difficult to find investors ready to support it,” said the source. “Bunge had been trying to sell the mills and the trading unit at the same time, but the price expectations were a stumbling block.”
Narrowing margins for sugar and other food commodities like grains in recent years have squeezed the finances of Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus — dubbed the “ABCDs” of the agricultural world because of their initials.
They have responded to the tough sugar market conditions in different ways.
Bunge has sought the exits. Its sugar and bioenergy divisions, which have been bundled together in financial results, posted a loss of $8 million in the fourth quarter versus a profit of $30 million a year before.
“We’ve been struggling over the last year to generate enough gross margin to cover our cost,” Schroder said last month. “We simply decided that it was time to really focus on what’s core to us, which is agribusiness, foods, grains and oilseeds and get on with it in a good way.”
Morningstar Equity Research analysts said Bunge’s expansion in sugar over the past decade, including the acquisition of five Brazilian sugar mills in 2010, had been ill-advised. “Bunge’s sugar business has suffered chronically,” it said in a report last month. “This has been a disappointing endeavor.”
ADM took a similar path, but did so earlier; it wound down its global sugar trading unit in 2015.
Cargill, meanwhile, has looked to scale. It teamed up with Brazilian player Copersucar in 2014 to form joint venture Alvean, the world’s largest sugar trader.
Louis Dreyfus has been restructuring its Brazilian sugar subsidiary Biosev after years of losses and faces the prospect of investing $1 billion in a capital increase at the unit. Reporting 2017 results last week, Dreyfus said its overall sugar business had experienced a “difficult” year.
All of the companies have also been investing in higher-margin businesses, such as food ingredients, to make up for the slump in trading and processing operations.
One of the two sources, plus a third source, said any sale of Bunge itself could be also be affected by the sugar business, which is considered non-core to potential buyers.
Bunge has been the center of takeover rumors for almost a year, with the reports of approaches from ADM and Glencore.
A fourth source close to Glencore said the group was not interested in Bunge’s sugar interests.
“The fertilizer and sugar divisions will continue to be a drag on earnings and valuations remain expensive. Moreover, structural changes to the grain-trading sector in the form of new entrants will constrain long-term earnings,” Cole Martin, commodities analyst with BMI Research, said in a report.
“The acute outlook for the sector is, indeed, so weak that horizontal M&A activity (for Bunge) is being actively discussed.” — Reuters

Analysts' March inflation rate estimates

HEADLINE INFLATION likely quickened further in March to breach four percent amid rising fuel and power costs, analysts said in a BusinessWorld poll, noting that tax reform and a weaker peso have stoked price pressures. Read the full story.
Inflation

How PSEi member stocks performed — March 28, 2018

Here’s a quick glance at how PSEi stocks fared on Wednesday, March 28, 2018.

Fixing Boracay

The environmental problems that beset the crown jewel of Philippine tourism is complex and multi-tiered. A recent audit done by the Department of Environment and Natural Resources (DENR) found a whopping 842 establishments in violation of sewer and solid waste laws. The situation is so severe that only 18% of hotels and restaurants accredited by the Department of Tourism (DoT) were found to be connected to the main sewer system. The rest dispose their wastewater by tapping into sewer lines that drain into the sea. How these establishments obtained their Sanitary Permits, Mayor’s Permits and Licenses to Operate is the P64-million question (pun intended) which the local government must answer.
Exacerbating the environmental damage is the illegal occupation of wetlands and forestlands by commercial establishments. Wetlands and forestlands are legally protected zones which must not be marred by man-made structures. According to a map prepared by the National Mapping Resource and Information Authority, Boracay has nine wetlands for which only two are left unoccupied today. These wetlands are critical to the food-chain of insects and endemic animals and the water source for its flora and fauna. They also serve as the island’s natural catchment basin during heavy rains.
Insiders allege that among the blatant violators are a prominent businessmen and known land grabber who reclaimed portions of the wetlands to build a commercial center. Another is a prominent hotel operator with multiple hotels in Boracay.
The DENR also found 85 establishments with permanent structures in protected forestlands. Their presence and creeping expansion ease out the indigenous insects, plants and animals from their natural habitat.
On the beach, the law mandates that no man-made structure, whether permanent or movable, can be installed on a 25 plus 5 meter stretch between the high-tide mark and the buildings. Yet, hotels and restaurants continue to encroach on the protected zones by putting al fresco bars and beach beds on them. This is why the size of the beach continues to decrease in width every year.
So far, DENR Secretary Roy Cimatu ordered the closure of 51 establishments found to have violated water, waste management, and land use regulations. More closures will follow once the sewerage pipes are unearthed and a thorough audit of land use is undertaken.
Boracay is an environment time-bomb running out of time.
Without immediate and drastic intervention, experts say that this island paradise will become a giant septic tank of coliform, bacteria, and disease in less than two decades. It could go down in history as the poster-child of how corruption and neglect can turn the most beautiful beach in the world into a sea of manure.
GOVERNMENT INTERVENTION
Boracay is administered by Tourism Infrastructure and Enterprise Zone Authority (TIEZA) and the provincial government of Aklan. Day to day management is overseen by the officials of Barangays Manoc-Manoc, Balabag, and Yapak.
Unfortunately, the enforcement of environmental statutes have allegedly been selective, depending on the political weight and “persuasiveness” of those applying for environmental clearances. The 842 erring establishments are testament of how corruption has superseded the law.
Past administrations turned a blind eye on Boracay’s the environmental deterioration given its importance to the national economy.
After all, Condè Nast best island destination welcomed 2 million visitors last year generating some P56 billion in revenues. It is the biggest source of jobs in Western Visayas with 17,737 of our countrymen employed in it. Each of the major airlines that service Caticlan and Kalibo generate some $100 million in revenues annually.
President Duterte is the lone chief executive who called Boracay for what it is — a cesspool that needs to be closed for rehabilitation.
Since then, Malacañang has formed an interagency task force consisting of the DENR, the DoT, and the Department of Local Governments (DILG) to solve the problem in the most expeditious way with the least amount of displacement.
Last month, Officer in Charge of the DILG, General Eduardo Año, recommended to close the island for six months to address the environmental problems to which the President gave his full support. Año recommended that the closure commence on April 26 but DoT Secretary Wanda Teo appealed to wait for the habagat season this July. It is still not clear if and when the shut-down will take place.
The President went further by warning local government officials and businessmen of arrests for sedition should they refuse to cooperate with government’s clean up operations.
Government plans to declare a state of calamity in the island, a move I fully support.
Under the law, management and operations of calamity-stricken areas automatically reverts to the national government. This opens the way for it to reprogram funds for the repair and upgrade of infrastructure even if not appropriated in the national budget. A state of calamity also gives government the right to dismantle roads and impinge upon private rights of ways without being disrupted by temporary retraining orders from uncooperative land owners. More importantly, it allows government to dismantle illegal sewerage connections and take-down illegal structures without legal recourse.
In terms of accountabilities, declaring a state of calamity will give government the basis to investigate and hold local and national officials accountable for bypassing environment laws. Not only does this include past and incumbent mayors, city engineers and sanitation officers, but also former officials.
Local government officials should also be made to account for the P75-environmental fee levied upon each and every visitor of Boracay. The fees have been imposed for many years and should amount to several billions pesos by now. With little to show in terms of environmental infrastructure, the public deserves to know where the funds have gone? A lifestyle check by the Ombudsman is warranted given the amounts involved and the damaged caused.
BORACAY ESTABLISHMENTS RAISE A HOWL
A six-month closure of Boracay is still uncertain. Everything depends on what the authorities find once the subterranean pipes are unearthed. Depending on how grave the situation is, the closure can extend to a year.
Business operators in Boracay are appealing for a 60-day window to rehabilitate their own properties. They promise to connect to the main sewerage treatment plant and/or establish their own wastewater treatment facilitates.
Business groups have cited massive loss in revenues, loss of jobs, and long-lasting repercussions to the Boracay brand should a closure ensue.
I am afraid that the damage is far too grave and the solutions are far too complex that it can no longer be addressed by fixing one’s backyard.
At this juncture, what is needed is to increase the capacity of the sewerage and filtering system, to expand the sewerage pipe network and to dismantle all illegal structures in wetlands, forestlands and even on public roads. The work to be done is massive and to close the island completely will be the fastest way to do it.
Neither is it viable to undertake the repair work according to stations. This is because drainage and water pipes are interconnected — so the closure of a single pipe can affect hundreds of establishments.
As to the threat that Boracay will never recover its reputation as a tourist destination should it close, I say it will be worse if we do not resolve the problems squarely. Besides, a good tourist destination will always be resilient. Bali, for instance, quickly recovered following the 2002 terrorist attacks were 202 died and 219 were injured.
I share the view of the President when he told the Boracay stakeholders that: “you were the ones who destroyed Boracay, not us.” It is only right that all those affected give their support to the clean up and rehabilitation effort of the government, not stand in its way. This is the best way they can help.
On government’s side, the what they need to show the private stakeholders is a concrete plan and timetable so they can plan accordingly.
Boracay is the tourism crown jewel of the country and it belongs not only to the stakeholders of the island but the Filipino people. We must do all we can to preserve it for future generations, whatever it takes.
 
Andrew J. Masigan is an economist.

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