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Malaysia wary of Chinese projects’ cost — Anwar

MALAYSIA’S former deputy prime minister and finance minister Anwar Ibrahim said his country rejected Chinese-backed infrastructure projects because of the potential for corruption and questions about whether Malaysia can afford them.
Speaking at a business conference in Manila, Mr. Anwar, asked to comment on Prime Minister Mahathir Mohamad’s cancellation of the East Coast Rail Link, which is Chinese backed, said the prime minister found the deal “somewhat dubious, and prone to corruption. Not by China per se, but on the contract arrangement between the company and Malaysia.”
“The railway project was 55 billion ringgit, and we can’t afford it now,” he added.
Mr. Mahathir also cancelled a Chinese-backed Sabah gas pipeline project.
Pressed for lessons for the Philippines, which has its own infrastructure dealings with China, Mr. Anwar said: “Contracts, arrangements by governments, must be transparent. Because, otherwise, those in power will make certain arrangements that are dubious, and the next generation will have to pay the price.”
Mr. Anwar, who fell from power in the wake of trumped-up charges about his personal behavior and spent years in detention, delivered the keynote speech at the 16th International CEO Conference 2018 of the Management Association of the Philippines (MAP) at the Makati Shangri-la.
In a question-and-answer session, Mr. Anwar, currently the president of Malaysia’s People’s Justice Party, urged businesses to anticipate the impact of disruption on the welfare of their workers.
“What can I advise? I’m not a businessman. You know best… You have to have compassion. Please care for the welfare of the workers, be more compassionate… Please help your country, help your people as what I have always advised the Malaysian people,” Mr. Anwar said.
Co-presented by BusinessWorld, this year’s MAP CEO Conference was billed as “Business in the Age of Disruption,” and offered opportunities for business leaders to discuss the impact of disruption and innovation in their industries.
According to MAP, Mr. Anwar’s return to politics is “expected to shift geopolitical landscape in the region and in Malaysia’s quest for improved competitiveness and stability in the global arena.”
In his speech, Mr. Anwar said: “You cannot fool the people all the time. This is a belief that CEOs and entrepreneurs must share. You should realize that you manage people. The issue of justice is very important.”
He defined economic vibrancy as entailing “good governance and effective management.”
Mr. Ibrahim also urged the leaders of the Association of Southeast Asian Nations (ASEAN) to remain committed to the organization’s vision and resist protectionism.
On the potential for Chinese domination in the South China Sea, he added: “We can’t allow this to happen, because it would look like a jungle and not the rule of law.” — Arjay L. Balinbin

LANDBANK launches JICA-backed lending program to boost ARMM agri

THE LAND BANK of the Philippines (LANDBANK) launched a P2.12-billion financing scheme in the Autonomous Region in Muslim Mindanao (ARMM) and conflict-affected areas in Mindanao (CAAM) to boost the region’s agricultural sector.
The scheme, known as HARVEST (Harnessing Agribusiness opportunities through Robust and Vibrant Entrepreneurship Supportive of peaceful Transformation), is backed by official development assistance from the Japan International Cooperation Agency (JICA).
The program provides concessional loans to small and medium enterprises (SMEs), entities providing plantation farm management services, large agribusiness enterprises, cooperatives, and participating financial institutions in ARMM and CAAM.
“Giving them access to finance will help sustain job creation and raise their productivity through equipment and training, while also boosting the region’s agro-industry sector,” JICA Philippines Senior Representative Yo Ebisawa said in a statement on Tuesday.
“By improving access to finance and stimulating economic activities, the cooperation aims to help create jobs, improve living standards, and contribute to peace building,” according to Mr. Ebisawa.
The launch follows the signing of the Bangsamoro Organic Law in July, the LANDBANK said.
LANDBANK President and Chief Executive Officer Alex V. Buenaventura said that the financing scheme will drive growth in Mindanao.
“Through investment opportunities in agribusiness, we hope to help fuel growth in a region beleaguered by decades-old conflict and ultimately uplift the quality of life of our fellow Filipinos in these communities,” Mr. Buenaventura said.
Borrowers are entitled to technical assistance in the form of capacity-building training, seminars, and market linkage activities. JICA will also provide human resource training and technical assistance to LANDBANK, agricultural cooperatives, and other participating entities. — Reicelene Joy N. Ignacio

PHL improves ranking in trade sustainability study

THE Philippines was 10th in a ranking of 20 countries — including the United States and 19 Asian economies — in a measure of long-term trade sustainability, the 2018 Hinrich Foundation Sustainable Trade Index.
The Philippine ranking was three places higher than the previous survey in 2016.
The Hinrich Foundation is a nonprofit organization that undertakes trade-related policy research and development work in Asia. It commissioned The Economist Intelligence Unit (EIU) to build the Sustainable Trade Index.
“The Philippines was a top performer among the low-income economies in the 2018 Index, outperforming the middle-income economies of Malaysia and Thailand in overall scores,” according to the Hinrich Foundation’s profile report on the Philippines which was distributed Tuesday in Makati City.
“The Philippines saw a major improvement in its social pillar ranking in 2018, which was partially offset by a substantial decrease in the economic pillar,” it added.
The index assess economies based on three pillars it deemed essential for sustainability: economic growth, social capital, and environmental protection.
Of these, the Philippines fared worst in the economic pillar, placing 15th and falling six notches from the 2016 Index.
The economic pillar factors in 14 indicators: current account liberalization; tariffs and non-tariff barriers to trade; foreign direct investment; technological infrastructure; growth in per capita GDP; exchange rate volatility; and foreign trade and payments risk.
Other indicators include export product concentration; gross fixed capital formation; financial sector depth; export market concentration; technological innovation; trade costs; and growth in labor force.
“While the Philippines demonstrates an openness to trade in some areas, the country is also home to some of the highest trade costs in the region,” the report said.
The index’ trade costs indicator recognizes four factors — infrastructure, logistics, corruption and legal system.
“Of the four indicators used to determine the trade costs score, the Philippines scored best in legal system (=11) and worst in corruption (=17),” the report read.
Meanwhile, the Philippines placed sixth in the environmental protection category, maintaining its 2016 standing.
The environment-based metric evaluated air pollution, environmental standards in trade; transfer emissions; deforestation; share of natural resources in trade; and water pollution.
“The Philippines’ best scores were in air pollution and environmental standards in trade, demonstrating a commitment to environmental sustainability at a national level,” it said.
The country’s air pollution levels were second-lowest in the region while the country’s membership in or ratification of international environmental agreements was also taken into account — the Philippines is a signatory to six of the seven international environmental agreements used to measure this indicator.
Meanwhile, the Philippines improved in the transfer emissions indicator, where progress was “largely due to worsening performances by other countries rather than a better performance by the Philippines.”
Among the environment indicators, the Philippines ranked lowest in water pollution.
Meanwhile, the Philippines was most improved in the social pillar, advancing eight positions to 11th overall and outperforming all middle-income economies.
This came despite “an overall stagnation across all economies in the social pillar.”
“Inequality and political instability are on the rise across the region, a trend that transcends wealth and development status. The Philippines, however, was one of the few economies to increase its ranking on the social pillar in 2018,” the report noted.
“The country even outperformed middle-income countries like China, Thailand and Malaysia on the social pillar, outperforming its income-weighted position to deliver an impressive social pillar performance.”
In the 2018 index, Hong Kong placed first, replacing Singapore, which was number one two years ago. — Janina C. Lim

Bataan Freeport warns against removal of incentives at Senate budget hearing

THE Authority of the Freeport Area of Bataan (AFAB) said in its budget hearing that without “superior incentives,” it will have a hard time attracting investors.
In its budget proposal to the Senate on Tuesday, AFAB Chairman and Administrator Emmanuel D. Pineda said, “Without these superior incentives for Bataan, nobody would dare go to the end of the line from NLEX.”
He added that the success of the freeport area, which was established through the Freeport Area of Bataan (FAB) Act (RA 9728) in 2009, was due to incentives.
“Because of the incentives handed to us, we were able to attract locators,” he said.
AFAB’s proposed budget for 2019 covers the construction of at least two factory buildings.
“We expect expansion especially from the manufacturers of luxury bags in light of the tariff and trade war between China and US. We are capitalizing on the opportunity that many investors want to relocate from China to Bataan.”
He said that if the second package of the tax reform for acceleration and inclusion (TRAIN 2) measure is implemented or if the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill is enacted, investors may opt move operations to Cambodia or Vietnam.
“They presented some simulations based on the historical taxes that they paid. Once the provisions of TRAIN 2 and even the TRABAHO bill becomes enacted, they’re projecting a 115% increase in taxation,” Mr. Pineda said.
“With TRAIN 2, they will be opting to go to other countries, particularly Cambodia and Vietnam,” he added.
TRAIN 2 is part of the five tax reform packages of the government which aims to rationalize tax incentives for businesses, and lowers corporate income taxes.
The TRABAHO Bill targets to lower corporate income taxes to 20% from 30% while also rationalizing corporate fiscal incentives. The bill is currently being discussed in the House of Representatives.
The proposed 2019 budget of AFAB is P502 million. Senator Jose Victor G. Ejercito, who chaired the finance committee handling the hearing, endorsed the AFAB’s budget proposal for plenary discussion. — Gillian M. Cortez

Peso drops vs dollar

THE PESO weakened amid trade tensions abroad. — PHILSTAR/MIGUEL DE GUZMAN

THE PESO declined on Tuesday, with the dollar strengthening against major currencies, as investors remained cautious over trade tensions abroad.
The local unit ended Tuesday’s session at P53.535 versus the greenback, 7.5 centavos weaker than the P53.46-per-dollar finish on Monday.
The peso traded weaker the whole day, opening the session at P53.50 per dollar. It slipped to as low as P53.55, while its intraday high stood at P53.495 versus the US currency.
Trading volume slipped to $440.75 million from the $485.8 million that switched hands the previous day.
A foreign currency trader said the peso depreciated heavily as dollar strengthened across major currencies.
“We saw very strong dollar across the board, pushing the dollar-peso [weaker],” the trader said in a phone interview Tuesday, September 4.
The trader added that the level of support at P53.55 “was still there.”
“We saw a lot of sellers that’s why it was capped. Although it shows that the dollar-peso should be moving [weaker],” the trader said, noting the pair should be trading at around the P53.70 level without the support.
“The developments on the trade talks still pointed to stronger dollar amid trader tensions.”
Meanwhile, another trader said there was “significant intervention” by the local central bank at the P53.55 level.
As the country’s monetary authority, the Bangko Sentral ng Pilipinas sometimes conducts “tactical interventions” to temper any sharp swings that may cause the peso to appreciate or depreciate.
The second trader added that the peso declined versus its US counterpart “amid investor caution ahead of the Philippine inflation report” to be released on Wednesday.
Inflation likely accelerated to a fresh multiyear high in August on the back of higher food costs, according to a BusinessWorld poll conducted last week that yielded a median estimate of 5.9%.
For Wednesday, the first trader said the peso will likely move between P53.40 and P53.55 versus the dollar, while the other gave a P53.45-P53.65 range. — Karl Angelo N. Vidal

Stocks rebound as investors make inflation bets

SHARES bounced back on Tuesday as investors placed their bets ahead of the release of August inflation data on Wednesday.
The 30-company Philippine Stock Exchange index (PSEi) climbed 0.63% or 49.60 points to 7,881.82 Tuesday, September 4, recovering from slight losses posted in the previous session.
The broader all-shares index likewise rallied 0.49% or 23.69 points to 4,795.86.
“Philippine shares managed to eke out some gains relying on the futures for some guidance with some investors making bets on inflation,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.
Wall Street indices were closed overnight for the Labor Day Holiday, but the Dow Jones mini futures recorded a 40-point increase to 26,038. S&P 500 mini added 7.25 points, while the Nasdaq mini gained 24 points.
Investors also looked ahead to the August inflation report to be released by the Philippine Statistics Authority. The Bangko Sentral ng Pilipinas sees the headline figure settling at 5.5-6.2%, while the Department of Finance gave an estimate of 5.9%.
Mr. Limlingan said they expect inflation to reach 6% in August due to rising prices of food items amid weather disturbances, as well as increasing gasoline and power rates.
“Aside from inflation, the recent local manufacturing proved well. The PMI (Purchasing Managers’ Index) rose 51.9 in August, showing an improvement of 1.0 from the 50.9 recorded in July, still indicating an economic expansion,” he added.
A reading above 50 in the Nikkei Philippines Manufacturing PMI indicates economic expansion, while below 50 means economic contraction. Higher demand in the domestic market was the primary driver, according to the survey, as export sales recorded its weakest growth in a six-month period.
Meanwhile, Papa Securities Corp. trader Gabriel Jose F. Perez attributed the increase to foreign investors’ performance for the day.
“The PSEi performed strongly throughout the day ahead of [Wednesday’s] inflation data release, a contrast from [Monday’s] subdued trading… This could also be attributed to the somewhat lighter net foreign selling of only P257 million versus [Monday’s] P702 million,” Mr. Perez said in an e-mail.
All sectoral counters finished in positive territory, led by mining and oil which picked up 1.07% or 107.20 points to 10,075.57, followed by industrials which gained 0.91% or 102.21 points to 11,325.66. Holding firms rose 0.68% or 53.32 points to 7,819.58; property went up 0.49% or 19.45 points to 3,930; services gained 0.41% or 6.42 points to end at 1,543.69; while financials added 0.14% or 2.59 points to 1,804.60.
Some 874.59 million issues valued at P5.94 billion switched hands, slightly higher than Monday’s P5.60-billion turnover.
Advancers outpaced decliners, 101 to 87, while 52 issues remained unchanged. — Arra B. Francia

Recognizing exemplary people power

THE Ramon Aboitiz Foundation, Inc. (RAFI) which was founded 51 years ago by the late Don Ramon Aboitiz, has evolved from the charitable institution it was at the outset into a multi-dimensional NGO that is largely funded by personal assets of the late Don Ramon Aboitiz and his only son, the late Eduardo Aboitiz. From supporting orphanages and hospitals, to providing scholarships to the poor, it is now engaged in multiple developmental concerns, including leadership and citizenship, integrated development, education, microfinance and entrepreneurship, and culture and heritage. Except for the fact that descendants of Don Ramon Aboitiz sit on its board of trustees, RAFI operates independently of the Aboitiz businesses which have their own Corporate Social Responsibility (CSR) arm, the Aboitiz Foundation, Inc.
Today, day-to-day work of RAFI is led by its new President and COO, Dominica B. Chua, and Vice-President for Governance and Linkages Evelyn N. Castro. Both of these operating officers came up through the ranks.
One of RAFI’s traditions is its Triennial Awards for Exemplary Institutions and Individuals in the Visayas and Mindanao, where the Aboitiz business has its roots. The search process is complex and tedious and the process takes months. Nominees are screened by validators who actually go to the field to verify the statements provided in the nominations. The nominees are further refined to a shorter list, which again is revalidated. From this list, finalists are selected and these are further reviewed by a Search Committee comprised of representatives from the business and government sectors, as well as previous winners of the Triennial Awards. This year, the Search Committee was led by Melanie Ng, former president of the Cebu Chamber of Commerce & Industry and Efren Carreon, regional director of NEDA.
This year, five institutions and five individuals made it to the finalists list. The search committee then selected the top awardee for each category.
The top institutional awardee this year is the Philippine Eagle Foundation (PEF). PEF, founded in 1987, defines its mission as to save the unique Philippine Eagle, an endangered species, from extinction, to actually propagate the species through natural breeding, and, when necessary, through artificial insemination. It has set up the Philippine Eagle Center as a venue for propagation and for environmental education of communities to protect and nurture the forests that are the habitat of the eagles. It has mobilized domestic and international funding support for indigenous people who serve as forest guards to protect the forests and the eagles against hunters in the wild. It has also provided medical care, including surgery for eagles that have suffered gunshot wounds. Its campaign to protect the forests encompasses several provinces where eagles tend to fly and forage for food. Other finalists include Process-Bohol, Inc., Negrense Volunteers for Change Foundation, Inc., Community-Based Health Program of the Archdiocese of Ipil, Zamboanga.
The top award for exemplary individual was given to Dr. Benedict Edward P. Valdez, a surgeon who organized medical missions and personally provided surgical services to the poor and those in isolated areas. He defines his mission as “bringing hospitals to the people.” He organized Davao’s 911 Emergency Medical System and serves as its consultant for training. One of his key accomplishments is having mobilized volunteers and resources locally and overseas to perform surgery on 1,500 children with cleft palates, which has enabled them to live normal lives, including having careers and families. .
It must have been difficult for the Search Committee to make their choices. There are so many other finalists who are truly exemplary and outstanding.
Norlan Pagal, 48, of San Remigio, Cebu, a fisherman since the age of nine, has made protecting the seas his life mission. He mobilized his fellow fishermen to establish and protect marine sanctuaries totaling hundreds of hectares. He organized seminars for retraining his fisher colleagues away from dynamite and other illegal fishing methods. And as Bantay Dagat leader, he also fought illegal fishing boats from depleting the marine resources around their communities.
With the support of San Remigio’s enlightened Mayor Mariano Martinez, the Bantay Dagat fishers became more committed to their dangerous and demanding work. Norlan Pagal became so unpopular with illegal fishers that he paid for his commitment dearly. One day, he was shot in the back so that today, he is paralyzed from the waist down. This has not deterred him from his commitment to protecting the marine resources, and he still goes around in a wheelchair. He says he has an idea of who the shooter was; but the culprit has left the area. “It is all right,” he says, “he may not answer for his crime here on earth; but he will have to, in the next life.” Other finalists for the individual awards include Mateo Quilas, 59, “the Sightless Visionary.”
Sarah Cubar, 55, of Kapalong, Davao del Norte had to struggle to get an education. She had to drop out of school several times because her parents could not afford to support both her and her sister through school. So, they had to take turns. She and her sister had to work to help make ends meet. She finally got her college degree at the age of 28, when she was already married and the mother of four children. She finally became a classroom teacher in 1990, and today, she is district supervisor of Davao del Norte. Her passion to help children go to school has been so powerful that she crossed rivers and climbed mountains and risked threats from NPA and other rebels to reach communities which had no schools. In time, she was able to mobilize support from the LGU, other government agencies, and even the military to build classrooms, which have now reached a total of 15 schools in once isolated areas.
The Tuburan for Rural Women Development and Empowerment in Dumaguete City has organized 17 women’s organizations and three municipal federations. It has worked with LGUs to create and institutionalize the Multi-Disciplinary Quick Response Team which is an active responder in cases of domestic violence against women and children. One of its success stories is bringing about spring-sourced water systems to free the women from the laborious work of fetching water day in and day out from distant water sources. Their sense of empowerment enables them to get their husbands to help in building the water systems. Their freedom from the work of fetching water from distant sources has saved their physical energy and helped give them a sense of empowerment.
Dr. Roel Cagape, 55, could have chosen to become a wealthy medical practitioner. Instead, he chose to serve the B’laan tribe up in the mountains of Sarangani. He provided horses which could bring down patients who needed to be hospitalized. He also set up a system of “coding” so he could diagnose through telecommunications and come up with first-aid instructions and emergency relief where necessary. He would travel up and down the mountains to serve the B’laan people in the mountains.
There is not enough space in this column tor many other deserving exemplary achievers. Perhaps they can be the subject for future columns.
In closing, let me quote some lines from a prayer read by Amaya Aboitiz Fansler, daughter of the late RAFI CEO Roberto “Bobby” Aboitiz. It is attributed to Bishop Untener of Saginaw, Michigan, who read it at the memorial for the late, assassinated Bishop Oscar Romero of El Salvador. It probably expresses RAFI’s spirit.
“We accomplish in our lifetime only a fraction of the magnificent enterprise that is God’s work. Nothing we do is complete which is a way of saying that the kingdom always lies beyond us.”
“We cannot do everything, and there is a sense of liberation in realizing that. . .This enables us to do something, and to do it very well. It may be incomplete, but it is a beginning, a step along the way, an opportunity for the Lord’s grace to enter and do the rest.”
 
Teresa S. Abesamis is a former professor at the Asian Institute of Management and an independent development management consultant.
tsabesamis0114@yahoo.com

Balancing price fluctuations, meeting the economy’s growing demand

THE inflation rate has made a considerable jump this year from 3.8% in January to 5.7% this July. This brings inflation beyond the upper end of the 2 to 4% target of the Bangko Sentral ng Pilipinas (BSP) and already within the full-year forecast of the Development Budget Coordination Committee (DBCC) at 4.5%.
Based on the latest analysis of the Department of Finance (DoF), the leading driver of inflation in July was electricity, gas, and other fuels. For consumers in Metro Manila and neighboring areas, the higher price of electricity represents a combination of the higher feed-in-tariff (FIT) allowance rate and the upward adjustment in the generation charge due to the depreciation of the peso. Prices of household fuels also increased. Private vehicle users faced higher pump prices of diesel and gasoline, which cost P14.30 and P11.60 per liter more, respectively, compared to July of last year.
For the month of August, the prices of goods are expected to rise anew with a projected inflation rate of 5.9%. The prices of electricity, gas and other fuels are estimated to jump the highest among major commodities.
As electricity, gas, and fuels remain to be the major contributors to this uptrend, the Philippine power sector lies at a critical juncture as the challenge to ensure affordable, reliable, and accessible power lies at the heart of balancing price fluctuations, in view of the increasing inflation rates and meeting the economy’s growing demand.
SUPPLY MUST KEEP UP WITH GROWING DEMAND
Based on the Department of Energy’s latest list of committed power projects in Luzon, additional installed capacity in Luzon grew by 4.3% from 15,745 megawatts (MW) in 2017 to 16,426 MW in the first half of 2018. However, this growth was still lower compared to the 8.2% increase in demand from 10,054 MW in 2017 to 10,876 MW in the first half of 2018.
As a result, there have been seven (7) instances of yellow alerts in Luzon in the first half of 2018 compared to only three (3) during the same period last year, based on the group CitizenWatch Philippines’ advocacy called Power Plant Watch, which monitors the performance of power plants and their scheduled shutdowns. The first “yellow alert” happened on Feb. 26, which was a cause for concern for all electricity consumers considering that the tight supply situation occurred before the summer months of March to May when the usual demand for electricity spikes at increasing rates.
A “yellow alert” is declared when the total of all available reserves is less than the capacity of the largest plant online, which, for the Luzon grid, is 647 MW.
EFFORTS TO REDUCE ELECTRICITY RATES
Rising electricity prices have become a source of frustration. Based on the recent Ulat ng Bayan Survey of Pulse Asia, a majority of Filipino adults, at 60% of the respondents, are dissatisfied with the price of their electricity. Dissatisfaction is highest in the National Capital Region at 84%, even if the survey was conducted on June 15 to 21, a week after the Manila Electric Co. (Meralco) announced lower rates that month.
While the electricity rates of Meralco still rank the fourth highest in Asia due to the lack of government subsidies, the latest study of the International Energy Consultants (IEC), an Australia-based consulting firm specializing in Asian power markets, shows that current Meralco residential rates (P/kWh) have in fact decreased by 18% while the overall consumer price index (CPI) climbed up by 19% since 2012. Meralco’s tariff reductions were due to competitively priced power supply agreements (PSA) in their generation portfolio since 2013.
While the decrease in power rates is encouraging, the rising inflation and the concomitant price hike of consumer goods, however, is putting heavy pressure, especially on the poor.
Streamlining of permit process, increasing investments in power generation and resolving regulatory delays
To lower the cost of electricity, regulatory issues and the delay in energy projects in the pipeline must be immediately resolved. Investments in the power sector, especially in generation, must be encouraged and market competition must likewise be promoted.
Creating a more stable environment and increased confidence for generation investment requires the assurance of reliable supply of electricity. As such, ineffective bureaucratic policies that drive away investors can be resolved by fast-tracking and streamlining the permit process. A pertinent legislative measure is Senate Bill 1439, or the Energy Virtual One Stop Shop (EVOSS) Act of 2017, which aims to remove red tape in the permitting process of new power generation projects.
Furthermore, to address the lack of quorum in the Energy Regulatory Commission (ERC), another Commissioner must be appointed to replace the vacancy of retired ERC commissioner Alfredo Non. As we write, only ERC Chairperson Agnes Devanadera and recently appointed Commissioner Atty. Alexis M. Lumbatan are in office in view of the suspension of other incumbent ERC commissioners Josefina Patricia Magpale-Asirit and Geronimo Sta. Ana. As such, the regulatory agency is still paralyzed to adopt any ruling, order, resolution, decision or other acts in the exercise of its quasi-judicial and quasi-legislative functions.
Energy security is crucial for the success of the Duterte government’s economic agenda. This can be met by encouraging investment in infrastructure that could expand access and provide affordable and reliable energy for all. Taking into consideration the market forces at play, it is critical that regulators and legislators should focus on facilitating investment in new generation now to meet rapid demand growth and promote competition at the retail level.
 
Hannah Viola is Energy Fellow at Stratbase ADR Institute and Convenor of CitizenWatch Philippines.

His loyalty to party ended where loyalty to country began

IN DEATH Sen. John McCain was honored by colleagues whom he disagreed with, even fought with and who considered him a disloyal maverick during his long tenure as a politician.
Former Vice-President Joe Biden summed up the attitude of the usually partisan personalities who crossed John McCain’s life before brain cancer took it at age 81.
Speaking at McCain’s internment in his home state of Arizona, Biden, opened up by declaring, “I am a Democrat…and I loved John McCain.”
Special guests at the final rites for McCain were former President Barack Obama who trounced the senator, as Republican party standard-bearer, in the 2008 presidential elections; former President George W. Bush, who defeated McCain in the 2000 presidential primary and whose campaign even resorted to such dirty tricks as spreading the baseless rumor that McCain had fathered a black child; and former President Bill Clinton and Hillary Clinton.
Absent was President Donald Trump. He was not invited to McCain’s final rites.
Trump’s absence was obvious at the various ceremonies honoring McCain. That included the one where he lay in state at the Capitol rotunda, a distinction reserved for the most outstanding and exemplary personages in the United States, such as Abraham Lincoln.
McCain was only the 31st person to be honored with an official internment at the Capitol rotunda. Interestingly, this honor was decided on by the leaders of the Republican-controlled Senate and House of Representatives. The same leaders who were sorely disappointed with McCain when he cast the nay vote that doomed President Donald Trump’s and the GOP’s vow to repeal the controversial Democrat-passed Affordable Care Act (AKA Obamacare).
In truth, if Trump had his way, the Capitol rotunda honors would have been denied McCain, just as Trump balked at flying the US flag at half-mast during the entire period of McCain’s internment. It was only because of the uproar caused by Trump’s petty antagonism against a political critic (including a protest by members of the American Legion), that Trump relented and issued an executive order allowing due honors to be accorded to the late senator.
The final days of McCain above-ground must have virtually buried Trump in shame, as the entire country ignored the president of the United States while paying tribute to someone he considered an enemy.
But political enmity was set aside during McCain’s internment. For one shining moment, America’s political leaders cast aside partisanship and extolled the maverick senator who valued loyalty to country over and above loyalty to his political party.
With one voice, they conceded that McCain was a genuine hero and patriot. But what set him off in comparison to Trump was that McCain was also a person of grace and nobility, rather than pettiness, a trait that Trump has, unfortunately, shrouded himself with.
During the blistering contest against Obama, one McCain supporter at a political rally had very unkind words to say about the African-American candidate that bordered on racism. McCain stopped the supporter and contradicted her, pointing out that Obama was a decent and respectable person and not the kind being portrayed.
In contrast, throughout the campaign to choose the Republican standard-bearer, the presidential contest itself against Hillary Clinton, and throughout Trump’s brief tenure as president, he has been the epitome of boorishness, pettiness, racism, self-delusion and falsehood, playing to the basest attitudes of his supporters.
On the other hand, McCain never played to his base, often disappointing his party mates and refusing to toe the party line.
As a congressman and six-term senator, McCain earned the moniker of “maverick” because he often bucked the Republican position on issues, and often reached over to the opposition Democrats to work on critical legislative initiatives. He worked with the late Senator Edward Kennedy on comprehensive immigration reform, voted against tax cuts for the rich (which Trump forced through in the name of tax reform), campaigned against dependency on fossil fuel, warned against global warming, and advocated campaign finance reform.
While he was a known supporter and admirer of President Ronald Reagan, McCain, as a rookie congressman, spoke vigorously against Reagan’s plan to send US marines to Lebanon. The slaughter of hundreds of US and allied soldiers in a terrorist attack on a Marine camp in Beirut proved McCain right, but it was a pyrrhic validation of his principled stand.
For sure, McCain was not infallible. He was known to make poor judgments, such as choosing Alaska Governor Sarah Palin as his running mate in the 2008 presidential campaign. Palin was a drag on the campaign and confirmed people’s negative perceptions of her afterwards.
But McCain stood by his convictions, even if it wouldn’t have made sense to the less principled.
As a soldier and a prisoner-of-war in Vietnam, he endured five and a half years of torture and solitary confinement — and yet when he was offered an opportunity to be released, he declined because of the unwritten rule among POWs of first-in-first-out, meaning that those who had been confined ahead of McCain deserved to be released ahead of him, too.
Trump disdained McCain. The feeling was obviously mutual. McCain refused to endorse Trump, the official Republican standard-bearer in 2016, sunk Trump’s pet campaign vow to repeal Obamacare, and characterized Trump’s summit with Russia’s Vladimir Putin as “one of the most disgraceful performances of an American president.”
McCain was also the antithesis of Trump in other ways. McCain, whose father and paternal grandfather were both admirals, volunteered for active duty with the US Navy at 17. He flew fighter jets, was shot down over Vietnam and was a POW for five and a half years.
On the other hand, Trump avoided being drafted into the military and avoided being sent to Vietnam five times by claiming a bone spur in his feet at one point and claiming college education four other times.
A ridiculous comment by Trump about McCain was that the latter was not a hero because he was captured. According to Trump, heroes were not supposed to be taken prisoners. This prompted pundits to comment that Trump’s “heroism” was by sparing the US armed forces of his cowardice.
McCain’s passing may have been a sobering hiatus for professional politicians. And the soaring rhetoric that the speakers spoke during the internment ceremonies may have given Americans reason to hope that the divisiveness that has marked the Trump presidency can be healed.
But it’s too early to tell. Politicians have this magical talent for putting on a noble mask when occasion demands, and especially during funerals.
As a Tagalog pundit puts it, “Bihisan mo raw ang matsing ay matsing pa rin.” (You may dress up a monkey but it is still a monkey).
The likes of Senator John McCain will be missed.
 
Greg B. Macabenta is an advertising and communications man shuttling between San Francisco and Manila and providing unique insights on issues from both perspectives.
gregmacabenta@hotmail.com

The TRABAHO Bill:Recurring dilemmas

WHILE few of us were watching, the House Committee on Ways and Means approved on Aug. 7 the substitute bill for the second package of the Tax Reform for Acceleration and Inclusion (TRAIN), which is now known as the Tax Reform for Attracting Better and High-quality Opportunities, or the TRABAHO Bill, for brevity.
Despite its new moniker, the TRABAHO Bill retains the essential features of the TRAIN 2 package, by primarily cutting down on the country’s high corporate income taxes and streamlining existing incentives being granted to corporations.
The measure consolidated several House Bills on TRAIN, including House Bills 7214 and 7458, which propose different methods of cutting down on corporate income tax rates. House Bill 7214 will cut down corporate income tax rates depending on the annual reduction in incentive expenses in relation to the country’s GDP, under which scheme the corporate income tax can be reduced to as low as 25%. On the other hand, House Bill 7458 will unconditionally decrease corporate income tax by 1% every year, with the end goal of reducing the same to a fixed rate of 20% by 2029. It remains to be seen which of these methods will be approved, but the general consensus appears to be that a reduction in corporate income tax in the following years is necessary.
While the Department of Finance (DoF) generally views the measure as a revenue-neutral proposal, it still intends to offset any perceived losses through the rationalization of existing tax incentives. According to the said agency, the government suffered an estimated loss of potential revenue amounting to P178 billion in the year 2016 alone, due to redundant tax incentives. With the TRABAHO Bill, the agency hopes to limit and realign these incentives to strategically benefit small and medium enterprises and, in turn, generate more job opportunities through said enterprises.
The DoF lays down the premise that of the 915,000 firms registered in 2015, only 2,844 firms were able to avail themselves of tax incentives worth P301 billion. Juxtaposed with the fact that firms with no incentives pay 30% regular corporate income tax, while firms with incentives pay 6% to 13%, and the inequity becomes even more apparent. Thus, by reducing corporate income taxes, these small and medium enterprises, which comprise 32.86% of the national employment rate, stand to benefit the most.
It is worth noting, however, that there have been concerns regarding the TRABAHO Bill’s impact on foreign direct investments. According to the Philippine Ecozones Association, the bill may help boost the domestic market, but at the expense of export-oriented firms which enjoy existing tax incentives. In fact, due to the uncertainty of these existing incentives, registered investment pledges under the Philippine Economic Zone Authority have plunged to P53.067 billion in the first half of this year, which is more than a 50% reduction from last year’s P120.220 billion during the same period.
Ultimately, therefore, the approval of the measure boils down to an age-old question in economics: what cost is this government willing to incur, and for what, or whose benefit?
Perhaps we’ll get our answer this year.
The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.
 
Emiko Antonette T. Escovilla is an Associate of the Davao Branch of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).
etescovilla@accralaw.com

Associate justice questions provision for Senate concurrence on treaties

By Vann Marlo M. Villegas
Supreme Court Associate Justice Marvic Mario Victor F. Leonen has questioned the Senate’s practice of approval of treaties, which included clause that requires its concurrence from the withdrawal despite it pending approval from the Senate.
Mr. Leonen asked Senator Francis N. Pangilinan whether Resolution 286 led by the senate minority which expressed the “sense of the Senate regarding the requirements for a concurrence for a withdrawal.
“The matter was not adopted by the Senate although 14 senators has signed the resolution. It maybe adapted at some point in future time but unfortunately other resolutions and other pending bill had to be addressed or tackled by the Senate and therefore this was not officially acted upon,” Mr. Pangilinan said.
He clarified, however that it is not rejected but only not calendared for adaption.
Mr. Pangilinan said that they have passed and ratified 17 treaties with the specific provision of the requirement of senate concurrence for withdrawal.
Mr. Leonen, however, questioned its applicability in the ratification of the Rome Statute.
Now going back to Senate Resolution 546 which ratifies the Rome Statute, is there such a clause?” he asked.
“In that particular Rome Statue, the clause is not present,” Mr. Pangilinan said, affirming that resolution prior to the 17 treaties does not also have the said provision.
“This has now become the position of the senate in terms of treaties that it would require a concurrence of the Senate should there be any withdrawal,” he also said.
Six senators filed before the Supreme Court a petition for certiori and mandamus seeking to declare the withdrawal as “invalid or ineffective,” claiming that it needed concurrence of at least two-thirds of the senators, and to compel the executive department to cancel, revoke, or withdraw its instrument of withdrawal.
They cited the Article VII Section 21 of the Constitution which states that “no treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the Members of the Senate.”
The petition was filed by Pangilinan, Franklin M. Drilon, Paolo Benigno A. Aquino IV, Leila M. de Lima, Risa Hontiveros-Baraquel, and Antonio F. Trillanes IV.
The Philippines submitted its withdrawal from International Criminal Court to the UN Secretary-General in March following the announcement of the international court that it will conduct preliminary examination against the president over its alleged crime against humanity over its war against illegal drugs.

Mini SUV gets big changes


Text and photos by Kap Maceda Aguila
A TOTAL of five vehicle launches are rolling out for Ford Philippines this year, with three now in the books via the recent reveal of the EcoSport. Following the unveiling of the all-new Mustang convertible and all-new Expedition in April at the Manila International Auto Show, Ford last week presented the refreshed version of its compact utility vehicle, the EcoSport.
“The launch of the EcoSport back in 2014 paved the way for Ford to introduce and lead the mini-SUV segment in the country,” said Ford Philippines managing director Bertrand Lessard, in a speech at last week’s launch event in Taguig City. The EcoSport, he declared, was “a response to the need of Filipinos for a vehicle with high ground clearance that can go through floods and uneven roads,” and promises the agility, affordability and fuel efficiency of a compact car with the flexibility and spaciousness of an SUV.
Mr. Lessard’s enthusiasm over the EcoSport is not unfounded. Over the last four years, the EcoSport has maintained its lead in the segment it basically helped introduce locally. “In 2017, the EcoSport achieved a record full-year performance, with sales rising by 13% year-over-year to 11,299 [vehicles] delivered to customers,” reported the executive. Today, even with “more than 10 competitors” in the niche, the EcoSport corners about half of the business. The company reports that total unit sales in the Philippines is now approaching 39,000.
With the refreshed model, the Ford Philippines head is “optimistic that the new EcoSport will [continue] drive [the company’s] retail performance.”
ECOBOOST ECOSPORT
Headlining the new EcoSport is its top-of-the-line EcoBoost variant, which boasts 125 hp and 170 Nm, plus automatic engine start/stop technology. Three additional variants still sport a 1.5-liter, twin independent variable camshaft timing engine — delivering 123 hp and 150 Nm — mated to a six-speed automatic transmission.
Touting a “bolder look and design, refined interiors, [additional] smart and safety features, and driver-assist technologies including Sync3 with navigation and rear-view camera with rear parking assist,” the new EcoSport has a ground clearance of 209 millimeters, and receives a new grille, hood, head lamps, and 17-inch alloy wheels.
Inside, the EcoSport has additional interior accoutrements such as a leather dashboard, power sunroof and an eight-inch multicolor touch screen with redesigned interface. The Trend and Ambiente variants have a nine-inch touch screen. A seven-speaker system comes standard with the Titanium grade. Meanwhile, storage space and convenience has been augmented; a total of 1,178 liters of cargo can be accommodated and 25 storage compartments are now available.
Safety features across the range include hill-start assist, electronic brake-force distribution, an electronic stability program, ABS and six airbags.
The new EcoSport variants are priced as follows: 1.0-liter EcoBoost Titanium A/T (P1.168 million), P1.5-liter Trend A/T (P1.028 million), 1.5-liter Trend M/T (P968,000), and 1.5-liter Ambiente M/T (P918 million).

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