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Japan’s growing plutonium stockpile fuels fears

Tokyo — Japan has amassed enough plutonium to make 6,000 atomic bombs as part of a program to fuel its nuclear plants, but concern is growing that the stockpile is vulnerable to terrorists and natural disasters.
Japan has long been the world’s only non-nuclear-armed country with a programme to reprocess spent nuclear fuel from its power plants into plutonium.
On Tuesday a decades-old deal with the United States which allows Japan to reprocess plutonium was renewed, but the pact can be terminated by either side with just six months’ notice.
Plutonium reprocessing is meant to create a new and emissions-free fuel source for resource-poor Japan, but the size of its stockpile has started to attract criticism, even from allies.
Plutonium can be used to create nuclear weapons. Although Japan has vowed the material would never be used for military purposes, it has now amassed vastly more plutonium than it can use, since many of its nuclear plants are still offline after the 2011 Fukushima disaster.
Experts warn the growing stockpile could be dangerous in case of a natural disaster, like the earthquake and tsunami that set off the Fukushima meltdown, and is also an attractive target for terrorists.
They also fear the reserve could encourage other regional powers, including China, to press for a similar reprocessing capability, boosting the amount of weaponisable plutonium in Asia.
And some even warn that North Korea could point to the stockpile as an excuse to avoid denuclearising.
This month Japan’s government vowed for the first time to “tackle a reduction in plutonium stocks” but gave no roadmap.
The country’s Atomic Energy Commission reportedly plans a self-imposed cap on the reserve, which now stands at 10 tonnes inside the country, with another 37 tonnes in Britain and France for reprocessing.
Costly and complicated
“Promising to stop increasing the stockpile is the least they should commit to,” said Tatsujiro Suzuki, former vice chairman of the commission.
“What they really need to do is set a clear goal for reduction,” Suzuki told AFP.
“It’s time for Japan to fully review its nuclear recycling program.”
The stockpile has attracted concern in the wake of the Fukushima nuclear disaster, which forced the shutdown of all of the country’s nuclear plants.
Only some have resumed operations, and their fuel requirements fall far short of the stockpile Japan has already amassed.
Despite that, the government has continued work on a decades-long multi-billion dollar project to build a new reprocessing plant, using French and local technology.
Most reprocessing is currently done overseas, mainly in France, and Japan has struggled with technical problems at the new facility.
The planned reprocessing plant, in Aomori in northern Japan, has so far cost around $27 billion, but the technical problems mean there is no sign of an opening date despite decades of work.
Experts say reprocessing plutonium into fuel is up to ten times as expensive as producing uranium dioxide fuel.
“Japan’s plutonium separation is very costly and has no economic or environmental benefit,” said Frank von Hippel, a Princeton University professor who researches nuclear arms control and policymaking.
Regional race
Tokyo’s reprocessing programme also runs the risk of sparking a regional race, warned Thomas Countryman, a former US State Department official for arms control and non-proliferation.
“In the region, it is not in the interest of the United States or Japan or the world to see South Korea or China imitate Japan and enter the field of civilian reprocessing,” he told Japanese lawmakers last month.
“This would increase the risk to nuclear security, that is, the risk terrorists or criminals might divert plutonium, and it would increase regional competition in a technology that offers more risks than it does benefits,” he added.
China is already pushing for its own reprocessing capacity with the help of French and Russian partners, while South Korea has been researching reprocessing technologies but faces objections from environmentalists.
Japan, the only nation in the world to have suffered an atomic bomb attack, insists it would never use its plutonium for military purposes.
The reserves are subject to monitoring by the International Atomic Energy Agency, which has not raised public concerns about the stocks.
But some activists fear Japan views the stockpile as a way of keeping its options open on nuclear weapons.
“Japan appears be caught up in the idea that in an emergency it can produce nuclear weapons with its reprocessing technology,” said Hideyuji Ban, co-director of the Citizens’ Nuclear Information Centre, an anti-nuclear NGO. — AFP

STI Holdings’ attributable profit drops 10%

STI Education Systems Holdings, Inc. (STI Holdings) saw its attributable profit drop by 10% in its fiscal year ending March 2018, weighed down by interest expenses charged to operations.
In a regulatory filing, the listed firm reported a net income attributable to equity holders of the parent of P496 million for the year ending March, lower than the P550.2 million it booked in the same period a year ago.
STI Holdings’ fiscal year from April to March follows that of the academic cycle in the Philippines, since it derives majority of its income from education services.
The owner of among the country’s largest networks of private schools attributed this decline to the increase in interest expenses during the period.
“Interest expenses on loans increased by 177% or P140.2 million year-on-year mainly due to interest incurred on the STI Education Services Group’s bond issue charged to expense,” the company said. — Arra B. Francia

Shakey’s opens first store in Dubai

Shakey’s Pizza Asia Ventures, Inc. (SPAVI) is stamping its presence in the Middle East with the opening of its first store in Dubai, banking on the demand from the large population of Filipinos living in the area.
Franchised by Dubai-based firm Aljeel Capital, SPAVI’s newest store is located across Burjuman Mall and near Exit 4 of Burjuman Metro Station, which is described as one of the busiest stations in the city.
“We are excited to have more stores in the UAE (United Arab Emirates), with our flagship Dubai restaurant finally open and with the overwhelming turnout we had during opening night,” SPAVI quoted Aljeel Capital Chief Executive Officer Firas Hurieh as saying in a statement.
Mr. Hurieh noted that the store recorded the highest total net sales during opening day, as well as the largest number of pre-sold loyalty programs cards called Supercards.
“(T)he new store is strategically located and very accessible, thus attracting good traffic and high brand visibility. It features the familiar store environment of a Shakey’s pizza parlor in the Philippines and offers the many iconic products which many Filipinos have grown to love,” the company said. — Arra B. Francia

Xurpas CEO steps down to focus on firm’s blockchain projects

Xurpas Inc. Chairman Nico Jose S. Nolledo will be stepping down as the technology firm’s chief executive officer to lead one of the company’s subsidiaries that will focus on using blockchain projects.
The listed firm said in a statement Tuesday, July 17, that Mr. Nolledo will be focusing on developing Xurpas’ wholly-owned unit, ODX Pte. Ltd., which has already taken in several big wigs in the technology, telecommunications, and crypto industries as investors.
“ODX is a massive long-term opportunity for us, and the commitment to the project shown by the partners who have already signed on, is very strong validation of this…We need all hands on deck to fully realize our plans, and this is why I need to dedicate 100% of my time to ODX,” Mr. Nolledo said in a statement.
Former Xurpas President and Chief Operating Officer Raymond Gerard S. Racaza will now take over as CEO, while Mr. Nolledo will remain as company chairman. — Arra B. Francia

PSBank secures BSP approval for P15-billion LTNCD issuance

Philippine Savings Bank (PSBank) has received the central bank’s approval to raise funds through long-term negotiable certificates of deposit (LTNCD) to expand its consumer banking segment.
In a regulatory filing Tuesday, July 17, the listed savings banking arm of Metropolitan Banking & Trust Co. said it recently secured the approval from the Bangko Sentral ng Pilipinas (BSP) for its LTNCD program amounting to P15 billion.
In May, the bank’s board of directors approved of the issuance in two or more tranches and will be conducted over a year. — Karl Angelo N. Vidal

Senator says shift to federal government will make regions poorer

Senator Risa N. Hontiveros-Baraquel on Tuesday, July 17, questioned the draft Federal Constitution proposed by the President’s Consultative Committee, warning that the shift to federalism may have negative effects to the country’s economy.
“Aside from the massive democratic deficit President Duterte’s version of federalism suffers from, I am worried that his federalist vision is not even economically viable and practical in the first place. Instead of redistributing wealth and dispersing economic development to the regions, President Duterte’s federalism might only make the regions poorer and their economies weaker,” she said in a statement.
Ang pederalismo ni Pangulong Duterte ay hindi lamang salat sa demokrasya, sablay pa sa ekonomiya. (It is severely lacking in democracy and a burden to the economy),” she added.
The senator cited a study based on the Readiness Index for Sustained Economies Under Federalism (RISE-UP), indicating that only five of the proposed 16 federated regions were more ready for federalism, while two regions were neutral and nine regions were relatively less ready.
“Did the government take this into consideration in the drafting of the Federal Charter? Were the country’s economic managers consulted? Has the economic cost of federalism been studied alongside the impact of inflation and the current state of the economy?” Ms. Baraquel said.
For her part, Senator Leila M. De Lima on Tuesday raised concerns over the omission of the phrase “human rights” in the Article on Declaration of Principles and State Policies.
Under the Article 2, Section 11 of the 1987 Constitution, “The State values the dignity of every human person and guarantees full respect for human rights.”
Meanwhile, its counterpart provision in the proposed Federal Constitution provides that “The Federal Republic values the dignity of every person and guarantees full respect for the person and the right of all citizens to participate in all government processes.”
“Was the deletion of “human rights” deliberate? If so, why?” Ms. De Lima said. — Camille A. Aguinaldo

Akamai cites PHL’s ‘huge’ business potential as companies undergo digital transformation

Akamai Technologies, Inc. is expecting a huge potential for its business in the Philippines as the country’s big businesses go through a digital transformation while smaller ones begin to realize the need to accelerate and secure their online systems.
“This country has a lot of potential,” said Gerald Penaflor, Akamai head of enterprise business in the ASEAN, in a media roundtable discussion in Makati City on Tuesday, July 17.
“We have 110 million people over here, 48% of our population are already, one way or the other, part of online community and about 98% of them are all subscribers of Facebook,” he said.
He said that based on how Facebook and Google are positioning themselves in the Philippines, attention is focused on the potential of a country with a big population, many from younger generation, that is online everyday.
“So that’s why the potential definitely is much much more bigger compared to other countries,” he added.
Fernando Serto, Akamai head of security strategy in the Asia-Pacific, said the company started operating in the Philippines in 2015 with a few servers that has since expanded to more than 800 as of the last count.
“So it’s a very rich market for us from a target perspective. The last two years have been amazing for us in the Philippines, but we haven’t even scratched the surface yet,” he said. — Victor V. Saulon

Government rejects all tenders for reissued seven-year bonds

The government decided to reject all bids on the reissued seven-year Treasury bonds (T-bonds) it offered on Tuesday, July 17, as investors demanded higher rates ahead of the August policy meeting of the local central bank.
The Bureau of the Treasury (BTr) opted to reject all tenders for its P15-billion offer of reissued seven-year bonds on Tuesday, as bids placed by banks reached P13.97 billion, falling short of the amount the Treasury intended to borrow.
Had the BTr decided to accept all bids, the papers would have fetched an average rate of 6.621%, 64.5 basis points higher than the 5.976% tallied in the previous auction.
The seven-year papers carry a 5.75% coupon.
At the secondary market prior to the auction, the debt notes were quoted at 6.6921%. — Karl Angelo N. Vidal

Pentagon seeks a more lethal army in shifting $4.7 billion

The Pentagon is asking Congress to shift $4.7 billion in previously approved spending for this year, with some of the funds going to provide more lethal gear for the Army, including night-vision goggles and long-range cannons.
In a reprogramming request submitted to Congress, the Pentagon’s comptroller also asks for funds for developing and fielding the U.S.’s first hypersonic offensive weapons and for projects in South Korea, including $81 million for the training of U.S. units rotating there and the transportation of equipment.
The annual “omnibus reprogramming request,” intended to transfer funds from projects considered a lower priority, must be approved by all four congressional defense panels to take effect.
One of the biggest requests is for $70 million as a first payment toward a $1.7 billion project to set up a Joint Artificial Intelligence Center, which would support both combat operations and business management functions for all of the military services.
Among the items for which funds would be shifted:

  • $46 million to start a Deep Strike Cannon Artillery System technology demonstration program. It’s part of the Army’s Long-Range Precision Strike initiative, the service’s No. 1 modernization priority.
  • $104.5 million to buy 3,609 pairs of new enhanced night-vision goggles that soldiers also use for aiming weapons in the dark. Army Secretary Mark Esper, a former foot soldier, wants to spend an eventual $278 million for the devices.
  • $20 million so the Air Force can accelerate development and deployment of a prototype for a “Hypersonic Conventional Strike” air-launched glide munition, with a first test flight in late fiscal 2020. An additional $65 million is requested to accelerate demonstration of a land-launched version. Hypersonic weapons can travel five times the speed of sound, or Mach 5. — Bloomberg

Asia stocks mixed as Japan outperforms on yen drop

Asian equities were mixed Tuesday as investors assess whether corporate earnings can deliver on high expectations against a backdrop of trade tensions. Treasuries and the dollar were steady ahead of testimony from Federal Reserve Chairman Jerome Powell.
Japanese stocks outperformed in the region as the yen slipped, while the steepest declines were in China and Hong Kong as evidence mounts of a slowdown in the Chinese economy. The yen was trading near its lowest since January. Commodities sank overnight, with West Texas Intermediate oil slumping more than 4 percent. Disappointing subscriber growth at Netflix Inc. sent its shares plunging and dragged Nasdaq futures down in the final hour of the U.S. session.
The escalation in U.S.-China trade tensions could weaken economic growth and upend the current market-friendly backdrop of low volatility in equities and rates, the International Monetary Fund and BlackRock Inc. Chief Executive Officer Larry Fink warned. Stock investors are assessing whether prices justify what’s being delivered from companies as the earnings season ramps up. It’s been a mixed bag so far and Goldman Sachs Group Inc. is up next.
Elsewhere, oil consolidated near a three-week low around $68 a barrel, as global trade anxiety combined with an offer from Saudi Arabia to add more crude on top of its contractual supplies to some buyers in Asia to boost market volatility.
The New Zealand dollar jumped after the central bank’s core inflation measure accelerated at the fastest pace in seven years. Australian dollar rose after the Reserve Bank of Australia said it expects a strengthening economy to gradually cut unemployment and lift inflation.
These are some key events coming up this week:
Earnings season continues with reports due from companies including: Goldman Sachs, Morgan Stanley, American Express, Microsoft, Taiwan Semiconductor Manufacturing, Unilever, Johnson & Johnson and IBM. Fed’s Powell delivers the semi-annual Monetary Policy Report to a Senate committee Tuesday and a House panel on Wednesday, and will answer lawmakers’ questions.
These are the main moves in markets:
Stocks
Japan’s Topix index rose 1.1 percent as of 2:15 p.m. in Tokyo. Australia’s S&P/ASX 200 declined 0.6 percent. South Korea’s Kospi index was little changed. Hong Kong’s Hang Seng Index slid 1 percent and a gauge of Chinese stocks traded in the city slid 1.1 percent. The Shanghai Composite Index declined 1 percent. S&P 500 Index futures were little changed. The S&P 500 Index fell 0.1 percent Monday.
Currencies
The yen lost 0.1 percent to 112.40 per dollar. The offshore yuan rose 0.2 percent to 6.6894 per dollar. The euro was steady at $1.1715. The British pound bought $1.3243.
Bonds
The yield on 10-year Treasuries added one basis point to 2.87 percent after gaining three basis points Monday. Australia’s 10-year bond yield rose two basis point to 2.66 percent.
Commodities
West Texas Intermediate crude was little changed at $68 a barrel after dropping 4.2 percent Monday. Gold traded at $1,241.31 an ounce. — Bloomberg

Oil halts slide as possible stockpile drop counters supply boost

Oil arrested losses near the lowest level in more than three weeks as investors weighed the prospect of shrinking U.S. inventories against more supply from Saudi Arabia and America’s emergency hoard.
Futures in New York were little changed after a 4.2 percent plunge on Monday. Government data on Wednesday is forecast to show U.S. inventories last week dropped further from the lowest level since 2015. Meanwhile, Saudi Arabia is offering extra crude volumes on top of its contractual supplies to some buyers in Asia and the Trump administration is said to be considering tapping into America’s Strategic Petroleum Reserve to cool rising fuel prices.
Oil has tumbled about 8 percent from a 2014 high reached last month on concern that an escalating trade spat between the U.S. and China will crimp global economic growth and reduce demand. Goldman Sachs Group Inc. says U.S. political decisions will stoke oil volatility as investors look for signs that OPEC and its allies are boosting output to offset disruptions from Venezuela to Canada and supply risks from American sanctions on Iran.
“The key lies in the U.S., with investors focusing on the fact that oil prices in New York have plummeted below $70,” Kim Kwangrae, a commodities analyst at Samsung Futures Inc., said by phone from Seoul. “While the U.S. stockpile situation will impact prices, what’s really key is the U.S.’s stance — whether it’s the use of strategic reserves or a clear picture on the renewed sanctions on Iran — to determine the direction of the market.”
West Texas Intermediate crude for August delivery traded at $68.11 a barrel on the New York Mercantile Exchange, up 5 cents, at 12:14 p.m. in Singapore. The contract fell $2.95 to $68.06 on Monday. Total volume traded was about 44 percent below the 100-day average.
Brent for September settlement added 41 cents, or 0.6 percent, to $72.25 a barrel on the London-based ICE Futures Europe Exchange. Prices on Monday dropped $3.49 to $71.84. The global benchmark crude traded at a $5.03 premium to WTI for September.
U.S. Stockpiles
Yuan-denominated futures fell 1.7 percent to 483.6 yuan a barrel on the Shanghai International Energy Exchange. The contract increased 0.2 percent on Monday.
In the U.S., nationwide crude stockpiles were expected to have dropped by 3.05 million barrels last week, according to a Bloomberg survey of analysts. Inventories had declined by more than 12 million barrels in the previous week, the biggest net decrease since September 2016.
While stockpiles in the U.S. were forecast to continue shrinking and production was curbed in OPEC member Libya, evidence is mounting that Saudi Arabia is heeding U.S. President Donald Trump’s call for the producer group to keep the oil market amply supplied and rein in prices. The Middle East kingdom’s state producer has pitched additional cargoes of its lighter grade to at least two buyers in Asia for next month, according to people with knowledge of the matter.
“Production disruptions and large supply shifts driven by U.S. political decisions are the drivers of this new fundamental volatility,” Goldman analysts including Damien Courvalin said in a July 16 note. “The uncertainty on the magnitude and timing of these shifts has muddied the near-term outlook for oil fundamentals.” — Bloomberg

Duterte to intensify defense cooperation with Malaysia

By Arjay L. Balinbin, Reporter
President Rodrigo R. Duterte has committed to intensifying Manila’s defense and security cooperation with the Malaysian government to address terrorist threats and terrorism activities in the ASEAN region following his bilateral meeting with Prime Minister Dr. Mahathir bin Mohamad in Kuala Lumpur on Monday, July 16, Malacañang said.
The Palace also said the President was set to arrive in Manila on Monday evening after his working visit to Malaysia, which was preceded by his attendance at the fight of Senator and boxing champ Emmanuel “Manny” D. Pacquiao last Sunday at the Axiata Arena in Kuala Lumpur.
“President Rodrigo Roa Duterte is grateful to Prime Minister Mahathir Mohamad for the invitation to visit Kuala Lumpur and to meet the Prime Minister to discuss matters of mutual interest,” the Palace said in a statement.
Mr. Duterte, the Palace also said, “renewed the commitment to further strengthen defense and security cooperation at the bilateral and regional level.”
During the bilateral meeting, Mr. Duterte “pointed out the need to address terrorism and violent extremism in the region, as well as transnational crime such as piracy and armed robbery at the sea and the illegal drug trade.”
Mr. Duterte likewise expressed his appreciation for Malaysia’s sustained support for maintaining peace and development in Mindanao.
President Duterte and Prime Minister Mahathir “stressed the importance of working closely together bilaterally and at the ASEAN to achieve shared aspirations of greater peace, progress and prosperity for the Philippines and Malaysia, and greater stability and security in the region.”

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