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Retailers show faster Q2 growth on store expansion

SOME of the country’s top retailers saw faster growth in the second quarter, on the back of their store expansion program and strong consumer demand.

Puregold Price Club, Inc. improved its consolidated net income by 9% to P1.21 billion in the April to June period, from the P1.11 billion booked a year ago, according to a regulatory filing.

The grocery operator owned by billionaire Lucio L. Co earned P2.49 billion in the first semester, up 9.8% from the P2.27 billion in the same period in 2016. Consolidated net margins was flat at 4.4% in the six months through June. 

“We continue to see growth in both our Puregold and S&R businesses even without the benefits of election year,” Puregold President Ferdinand Vincent P. Co was quoted in the statement as saying.

Consolidated net sales went up by an annual 10.8% — a shade above the upper end of its 8-10% guidance for the full year — to P56.6 billion in the first semester from P51 billion, fueled by the 26 Puregold stores and two S&R Membership warehouses that opened in 2016.

Same-store sales inched up 4% for Puregold stores and 10% for S&R stores, driven by robust consumer demand and the country’s strong economic growth momentum. Growth figures topped the 2-3% target range for expansion in same-store sales for the full year.

At end June, the retailer was operating 345 stores comprising 288 Puregold stores, 12 S&R membership shopping warehouse, 28 S&R New York Style outlets, nine NE Bodega Supermarkets and eight Budgetlane Supermarkets. 

For the year, the company is rolling out 25 new Puregold stores and two new S&R warehouse. S&R is currently developing two new branches for opening in 2018.

ROBINSONS RETAIL
Meanwhile, earnings of Robinsons Retail Holdings, Inc. (RRHI) gained 3.9% in the April to June period, lifted by the addition of more stores under the company’s network.

In a statement issued on Monday, RRHI posted P1.286 billion in net income attributable to the parent, higher than the P1.238 billion booked a year ago. Revenues, meanwhile, advanced to P27.76 billion, 8.3% higher year on year.  

Including results from the first quarter, RRHI grew its attributable profit by 12.8% to P2.282 billion, against the P2.023 billion in the same period in 2016. Consolidated net sales further increased by 10.7% to P53.486 billion during the January to June period.

The company attributed the increase to “resilient” same-store sales growth, which normalized at 2.7% from 8.9% last year driven by election spending, alongside the sales contribution of new stores.

RRHI added 91 stores to end June with a count of 1,619. This translates to a gross floor area of 1.066 million square meters, up by 6.9% year on year. Including its franchised store portfolio of The Generics Pharmacy, the company’s store network would be at 3,573.

SSI GROUP
SSI Group, Inc. increased its net income attributable to the parent by 17% to P139 million in the second quarter, according to a regulatory filing. Revenues were almost flat at P4.16 billion, against the P4.26 billion booked a year ago.

The growth was driven by the positive performance of its 665 stores in the country spanning an area of 133,000 square meters. Aside from traditional stores, the company also operated e-commerce platforms for Payless ShoeSource, Lacoste and Beauty Bar.

For the first half, the company’s attributable income went up 14% to P274 million, as revenues hit P8.42 billion.

“Our first half results reflect resilient consumer demand as well as the execution of strategies intended to increase operating margins, maximize the efficiency of our store network and strengthen our brand portfolio. We are pleased with the progress we have made so far and expect to continue to benefit from these factors during the second half of the year,” SSI President Anthony T. Huang said in a statement. — Krista Angela M. Montealegre and Arra B. Francia

AUB books P1.3-B earnings in first half

ASIA UNITED Bank Corp. (AUB) saw its bottom line reach P1.3 billion in the first six months of the year, fuelled by an expansion in its core business during the period.

In a statement e-mailed to reporters on Monday, the banking arm of tycoon Jacinto L. Ng’s Republic Biscuit Corp. announced its consolidated net income in the first six months stood at P1.3 billion, rising by 7% from the P1.2 billion recorded in the same period a year ago.

“We remain on track with our aspiration to become one of the top ten leading banks in the Philippines,” AUB President Abraham T. Co was quoted as saying in a statement.

The bank said its bottom line grew on the back of a 16% growth in its interest income from loans and receivables during the January to June period.

AUB’s loans and receivables expanded 17.7% to P107 billion in the first six months from P91 billion in 2016.

The bank’s consumer loan book, which consisted of auto, mortgage and salary loans, grew by 35%, with AUB saying the sector will be a “significant profit driver” moving forward.

“The group’s net income for the first half of 2017 translated to a return on assets of 1.5% and return on equity of 11.0% versus year-ago ratios of 1.7% and 11.4%, respectively,” AUB stated in its quarterly report.

The same report showed the bank’s net profit in the second quarter stood at P677.457 million, nearly unchanged or 0.5% up from the P674.120 million recorded in the same period a year ago.

The listed lender’s net interest income posted a double-digit growth of 18% to P3.168 billion in the first half of the year from P2.685 billion in 2016 as the bank “effectively managed its mix of interest-earning assets versus the interest-bearing liabilities and spreads.”

This brought its net interest margin ratio to 4.6% in the six months end-June, down from 4.7% last year.

AUB’s total operating expenses, which include provisions for losses, went down by 3.9% to P2.286 billion in the first semester from the P2.379 billion logged in the comparable year-ago period on the back of a drop in provision for credit and impairment losses.

“Due to the group’s efforts to effectively manage cost, cost to income ratio is relatively stable at 51.5% for period ended June 30, 2017, a slight improvement from 51.7% ratio a year ago,” the bank said.

AUB and its subsidiaries recorded a double-digit rise in liabilities during the first semester, with total deposits at P151 billion, up 25.5% from P121 billion in the same period in 2016.

Currently, the bank has a total consolidation distribution network of 239 branches located across the country. This year, it expects to continue expanding its reach and put up an average of 30 branches a year, which would cost around P7 million per branch.

Mr. Co had said AUB is bullish on its growth prospects for the next three years amid expectations of positive Philippine economic growth.

Shares in AUB gained 10 centavos or 0.17% to close at P59.80 apiece on Monday. — Janine Marie D. Soliman

David Ancheta sweeps way to Shell Youth Active Chess national finals

DAVID ANCHETA sustained his hot start with a stronger finish, winning his last three games to clinch the kiddies crown via sweep while Adrian Yulo and Ahmad Ali Azote took the two other titles in the Shell National Youth Active Chess Championship’s Northern Mindanao leg at SM City in Cagayan de Oro last Sunday.

Ancheta, who racked up six straight victories in the opening round of the two-day tournament, repelled Prince Mella in a duel of top bets in the seventh round then the Corpus Christi School ace outplayed Kiel Villa and Joel Hoy to complete his domination of the 7-12 age group of the third leg of the five-stage regional circuit culminating in the grand finals in October.

Joseph dela Rama of City Central School also hurdled his last three games, including a final round victory over Kurt Managase, to finish solo second with eight points and nail the other berth in the grand finals set Oct. 7-8 at SM Mall of Asia.

Yulo, who also swept his first six games in the juniors division, crushed Mary Joy Tan at resumption then settled for draws against Ronald Canino and Clyde Saraos to capture the crown on an eight-point output. Canino scored 7.5 points to place second and gain a berth in the grand finals.

Meanwhile, Walter Raagas, Terminal Manager of Shell’s North Mindanao Import Facility (NMIF), graced the awards rites of the country’s longest talent-search sponsored by Pilipinas Shell for the 25th year and sanctioned by the National Chess Federation of the Philippines.

Azote, locked in a three-way tie with Romeo Canino and Emmanuel Acierto after six rounds in the seniors division, defeated Acierto, Arden Abiad and Marc Villarojo then watched Romeo Canino drop his eighth round match to Acierto to emerge solo winner with eight points. Acierto took the runner-up honors and a seat in the national finals with seven points.

Also making it to the national finals are the top female players, including Rhea Jean Canino of Kauswagan Central School, Mary Joy Tan of Jasaan National HS and Zsuzsa Grace Tabudlong of University of Mindanao (Davao City).

Canino closed out with seven points to gain top honors in the kiddies side; Tan also pooled seven points in the juniors division; while Tabudlong wound up with 5.5 points in the seniors category.

Meanwhile, Davao will host the next leg on Sept. 2-3 for the Southern Mindanao stage, also at SM City, before the regional elims winds up in Cebu for the Visayas qualifier on Sept. 16-17 at SM City. The circuit is backed by Shell V-Power, Shell Advance, Shell Rimula, Shell Helix, Shell Fuel Save, and Shell Card and held in partnership with SM Supermalls.

Murder suspect in Charlottesville violence faces court hearing

CHARLOTTESVILLE — A man said to have harbored Nazi sympathies as a teenager before a failed bid to join the US Army was due in court on Monday to face charges he plowed his car into protesters opposing a white nationalist rally in Virginia, killing a woman and injuring 19.

The bail hearing for James Alex Fields, 20, arrested on suspicion of murder, malicious wounding and hit-and-run charges, was set to unfold in Charlottesville as the US Justice Department pressed its own federal hate-crime investigation of the incident.

Authorities said Heather Heyer, 32, was killed when Fields’ car slammed into a crowd of anti-racism activists confronting neo-Nazis and Ku Klux Klan (KKK) sympathizers, capping a day of bloody street brawls between the two sides in the Virginia college town on Saturday.

More than 30 people were injured in separate incidents, and two state police officers died in the crash of their helicopter after assisting in efforts to quell the unrest. The fatal disturbances began with white nationalists converging to protest against plans to remove a statue of Confederate General Robert E. Lee, the commander of rebel forces during the US Civil War.

President Donald J. Trump’s reaction to the clashes — the first major domestic crisis he has faced since taking office — ignited a wider political firestorm at the weekend.

Democrats and Republicans alike criticized Mr. Trump for waiting too long to address the violence, and for failing when he did speak out to explicitly condemn white-supremacist marchers widely seen as sparking the melee.

Mr. Trump was specifically taken to task for comments on Saturday in which he denounced what he called “this egregious display of hatred, bigotry and violence on many sides.”

Under mounting pressure to take an unequivocal stand against right-wing extremists who occupy a loyal segment of the Republican president’s political base, the Trump administration sought to sharpen its message the next day.

The White House issued a statement on Sunday insisting that Mr. Trump was condemning “all forms of violence, bigotry and hatred, and of course that includes white supremacists, KKK, neo-Nazi, and all extremist groups.”

Vice-President Mike Pence took an even tougher line against white nationalists in remarks delivered late on Sunday during his trip to Colombia.

“We have no tolerance for hate and violence from white supremacists, neo-Nazis or the KKK,” Mr. Pence said.

“These dangerous fringe groups have no place in American public life and in the American debate, and we condemn them in the strongest possible terms,” he said.

Virginia police at the weekend offered no motive for the man accused of ramming his car into the crowd.

Derek Weimer, a history teacher at Fields’ high school in Kentucky, told Cincinnati television station WCPO-TV that he remembered Fields harboring “some very radical views on race” as a student and was “very infatuated with the Nazis, with Adolf Hitler.”

Mr. Weimer also recounted Fields being “gung-ho” about joining the Army when he graduated.

The Army confirmed that Fields reported for basic military training in August 2015 but was “released from active duty due to a failure to meet training standards in December of 2015.”

The Army statement did not explain how he had failed to meet training standards.

Fields was being held on suspicion of second-degree murder, three counts of malicious wounding and a single count of leaving the scene of a fatal accident, authorities said. — Reuters

Multi-modal transport terminal in Marikina seen to help decongest EDSA

MARIKINA CITY’S transport terminal across the SM mall is up for accreditation by the Department of Transportation (DoTr) to become the Metro Manila Eastern Multi Modal Transport Terminal, which is seen to help decongest traffic along main thoroughfare EDSA. “We will accredit this terminal, subject to submission of required documentation,” said DoTr Secretary Arthur P. Tugade in a statement following yesterday’s visit to the facility. Undersecretary Thomas M. Orbos, who was also present during the ocular inspection, said the terminal will remove about 1,000 buses in EDSA. Mr. Tugade said the DoTr will continue to develop the Pasig River Ferry terminal and expand Point-to-Point (P2P) bus routes to provide the Marikina terminal with interconnectivity and different modes of transport. The DoTr is also currently building the Southwest Intermodal Transport Exchange in Parañaque, a facility that will provide seamless transfers, fixed departure schedules, and centralized ticketing system for provincial buses. It is targeted for completion in April 2018. — BW

Without Disney, Netflix needs to produce more movies of its own

WALT DISNEY Co.’s break with Netflix, Inc. increases pressure on the streaming service to produce more of its own programs and shore up its movie catalog as other media companies withhold their most valuable TV shows and films.

Disney is the largest supplier yet to withdraw programming from Netflix, which has morphed from friend of Hollywood to rival in the past few years. Scripps Networks Interactive, Inc. opted not to renew deals giving its shows to Netflix, while executives at 21st Century Fox, Inc. and Time Warner, Inc. have said they’ll reduce sales to the streaming service.

“Monolithic, global exclusive deals with Netflix are troublesome,” Fox co-chairman Lachlan Murdoch said last Wednesday on a call with analysts. “And we think that there’s a broader marketplace for us to license into.”

For all of Netflix’s success with original series such as House of Cards and Stranger Things, the vast majority of the $6 billion it spends on programming this year will be to buy TV shows and movies made and owned by other companies – often competing media giants. But an ever greater portion has been earmarked for exclusive series, and more recently, feature films.

“Losing Disney movie output doesn’t necessarily have any visible impact on subscriber growth, as long as the entirety of the service is a good value proposition to consumers,” Todd Juenger, an analyst with Bernstein Research, wrote in a note last Wednesday.

Disney said last week it won’t renew a movie deal with the Los Gatos, California-based company as part of a plan to start its own online services. The most immediate effect will be a blow to the Netflix movie selection in the US. Starting in 2019, the company will lose Disney features including the hits Beauty & the Beast and Finding Dory. Netflix may also lose Marvel and Star Wars films.

NETFLIX MILESTONE
Adding new Disney movies was a milestone for Netflix when the companies announced their agreement in December 2012. The streaming company had primarily offered customers older movies and was just getting started in the production of its own series and feature films.

Now Netflix is producing more than 1,000 hours of original programming a year and signs up most of its new customers outside the US, where it doesn’t even offer Disney movies.

Yet films still account for about 30% of Netflix viewing and help prevent existing customers from dropping the service. Disney provided Netflix with some of the most popular movies in the world at the same time its overall film catalog was shrinking. Disney features such as Rogue One: A Star Wars often appear front and center for users when they first open up the app, alongside Netflix originals.

“Disney and Pixar movies are fantastic collections of entertainment content,” Juenger said in his note. “The Netflix service, or any service, is better off having them (at the right price).”

FORMER SAVIOR
Media giants Disney, Viacom, Inc., and Fox first began licensing TV shows and movies to Netflix as a way to replace shrinking DVD sales. Selling reruns to Netflix, they reasoned, could also bring viewers back to their TV networks.

Instead, they helped create a competitor that now threatens their primary business, pay-TV. Netflix has attracted more than 100 million global subscribers by offering a vast catalog of TV shows and movies on demand, and undermined consumer interest in live TV.

Media companies have responded by keeping more of the TV shows they produce in-house, and creating their own services to compete with Netflix. CBS Corp. created All Access, an online version of the most-watched US broadcast network, while Time Warner created an online version of premium cable network HBO. Hulu is owned by Disney, Comcast Corp., Fox and Time Warner.

None of those services have slowed Netflix. By spending billions of dollars on original programming, Netflix has prepared for the possibility that Hollywood studios would reconsider their strategy. Last week, the company announced plans for a series starring David Letterman, the popular late-night talk-show host. It also acquired Millarworld to make TV shows and movies based on that company’s graphic novels.

Netflix is still feeling its way around the original film business. In March the company hired producer Scott Stuber to oversee that division.

And for all media companies’ talk about moving away from Netflix, most of them are still deep in business with the invader from the north. Disney’s Marvel Studios produced the serial dramas Daredevil, Jessica Jones, and Luke Cage for Netflix, and will continue to do so for years to come.

“It would be very out of character for Disney to significantly reduce its commercial (and strategic) relationship with a party like Netflix, who Disney believes will continue to be a very important brand/service in the future of home video entertainment,” Juenger wrote. – Bloomberg

Gov’t capacity to deliver infra projects up for review

THE SENATE’S review of the proposed 2018 Budget, estimated at P3.7 trillion, will focus on the government’s “ability to utilize the appropriations for public works,” Senate President Pro-Tempore Ralph Recto said on Monday.

He added in a statement that the review will determine which projects have been delivered, delayed or derailed and document instances of underspending.

“It will serve a dual purpose. First, identify the fat which can be rechanneled to good programs like free public college. Second, we can cut overhead and frivolous expenses, so we can in turn reduce the number of new taxes the government is asking Congress to impose,” he said.

He reiterated that the executive department’s “absorptive capacity” will have an impact on the Senate debates on the administration’s proposed tax reform program.

According to the statement, a preliminary estimate circulated among senators pegged at P185.8 billion the amount of unreleased appropriations in 2016, apart from the unobligated allotments of P410.8 billion.

The “agencies of interest,” according to Mr. Recto, include the Education, Health, Transportation, Agriculture, and Public Works and Highways departments.

The statement further noted that in 2017, the Education department (DepEd) was given P109.3 billion to build 47,492 new classrooms and P2.47 billion for 66,492 school desks, furniture and fixtures. For 2018, the proposed budget is P106.1 billion for 47,000 new classrooms and P3.47 billion for 84,781 school desks, furniture and fixtures.

For the Department of Health’s (DoH’s) Health Facilities Enhancement Program, P24.19 billion was allotted in 2017 while the budget increased for 2018 to P29.03 billion for the same program.

“In both DoH and DepEd, they still have inherited backlog of deliverables from 2016,” Mr. Recto noted.

As for the absorptive capacity of the National Irrigation Administration, Mr. Recto said the agency has a budget of P38.4 billion as well as a request for next year, pegged at P41.9 billion.

Furthermore according to Mr. Recto this year’s national budget for the rail sector was P22.1 billion. For 2018, P25.99 billion is being proposed as the administration tries to jumpstart multiple stalled projects.

“We will be examining both ledgers. Income and spending. Bakit ka hihingi ng ganito kalaking bagong revenues kung hindi mo naman nagagasta? (Why are they asking for these funds if previous appropriations have gone unspent?” he said.

Recto said he wanted to find out what the roadblocks are to effective spending.

The Senate briefing for the Development Budget Coordinating Committee on the Proposed 2018 National Expenditure Program is scheduled for Wednesday, Aug. 16. — Mario M. Banzon

EDC says earnings growth to ‘moderate’ in 2nd half

ENERGY Development Corp. (EDC) posted an 11% increase in first-half net income to P5.2 billion, although the Lopez-led company noted earnings growth is likely to be moderate in the second half.

In a statement on Monday, Nestor H. Vasay, EDC chief financial officer, said the semester’s results “confirm progress EDC has made in boosting cash generation and in delivering financial predictability to investors.”

He added the company was able to achieve its financial performance by addressing the uncontracted portion of its Bacon-Manito (BacMan) geothermal power plants in Bicol, and by doing an extensive reliability programs for its plants in Leyte.

EDC, the company’s largest geothermal and wind energy producer, said the double-digit growth compares with the P4.7-billion consolidated recurring net income attributable to equity holders of the parent firm in the first half of 2016.

“Earnings growth was strong during the first half of the year, but will likely become moderate for the second half of 2017 following the magnitude 6.5-earthquake that struck the island of Leyte last July 6,” Mr. Vasay said.

“We, however, remain steadfast and have exerted efforts to expedite the return to service of the generating capacity of the Leyte plants back to its pre-earthquake levels,” he added. 

Consolidated revenues during the six-month period rose by 4% to P17.7 billion from P17 billion in the same period last year, driven by higher energy sales volume booked by the United Leyte plants and the reduction in the BacMan plants’ exposure to electricity spot market after the increased proportion of contracted energy to total sales.

Including nonrecurring items, EDC registered consolidated net income attributable to equity holders of the firm of P4.6 billion, down 6% from the P4.9 billion posted a year ago.

The company said the decline was largely because of the higher operating expense, foreign exchange losses on loans and loss from the early redemption of the company’s dollar-denominated bonds. The drop was in part softened by the higher revenues from the United Leyte and BacMan power plants.

As of the first half, EDC had a cash balance of P10.9 billion. It said gearing level was “comfortable” with a consolidated debt at 1.2 times the level of equity, and consolidated net debt to EBITDA (earnings before interest, tax, depreciation and amortization) of 2.65 times to 1.

Shares in EDC were unchanged at P6.82 each on Monday. — Victor V. Saulon

Peso ends at P51:$1 level despite BSP call for calm

THE PESO started the week at a near 11-year low, closing at the P51-per-dollar level, due to negative market sentiment amid heightened political tensions between the United States and North Korea.

The peso closed at P51.08 against the dollar on Monday, slumping 10 centavos from Friday’s finish of P50.98 per dollar.

Yesterday’s close was the local unit’s weakest level in almost 11 years or since it ended at P51.21-to-the-dollar on Aug. 28, 2006.

The peso opened the session at P50.95 against the dollar. Its best showing was at P50.90, but it succumbed to the dollar’s strength as it closed at its intraday low.

Traders attributed the peso’s slump against the dollar to persisting geopolitical tensions between US and North Korea, with investors resorting to safe-haven buying.

“In the morning, we saw market players looking at US inflation data, but towards the afternoon was when the dollar rallied due to safe haven demand still due to tensions between US and North Korea,” one trader said by phone yesterday.

The US Labor Department said on Friday its consumer price index (CPI) edged up 0.1% last month after being unchanged in June. That lifted the year-on-year increase in the CPI to 1.7% from 1.6% in June.

“The peso, however, weakened towards the end of the day amid concerns over the conflict between the US and North Korea,” the trader added.

In contrast, another trader said yesterday’s session mostly quiet, noting that the peso’s decline was more of a trend rather than sentiment-driven.

Trading volume on Monday thinned to $291.5 million from the $690.1 million seen the previous session.

The trader also noted the Bangko Sentral ng Pilipinas (BSP) did not step in during yesterday’s session, as seen in lower volumes of dollars traded.

“The BSP was not seen heavily selling dollars [yesterday,] because probably there was really demand for the dollar.”

The trader also said that despite the central bank’s efforts to calm markets, the local unit still continues to decline versus the dollar, with the BSP “not aggressive in protecting” the currency.

BSP Governor Nestor A. Espenilla, Jr. said on Sunday that they do not foresee a sharp decline on the peso versus the dollar as the country’s economic fundamentals remain “very solid and very strong.”

For today, one trader sees the exchange rate settling at P50.95 to P51.15 range while the other trader said the peso could trade within P50.90 to P51.20-to-the-dollar.

The other trader, meanwhile said the exchange rate’s technical levels could go to as low as P51.21 to P51.55 per dollar. — Janine Marie D. Soliman with Reuters

The Need for a National Strategy to Combat Terror

Since the armed conflict in Marawi began on May 23, the military has declared countdowns on the complete decimation of the Maute group. After more than 2 months and 2 weeks, with martial law declared in Mindanao, the Armed Forces of the Philippines continues to make headway as it clears area after area of terrorists, which may eventually result in a tactical victory.

The Need for a National Strategy to Combat Terror

While the full force of the military has been at work to end the conflict, circumstances have led President Rodrigo Roa Duterte to request Congress to extend martial law until the 31st of December 2017. Also, the Supreme Court has spoken as it upheld the declaration of martial law and likewise, Congress has given the green light to the extension of martial law. Will all these broad and decisive government actions and initiatives be sufficient to declare that the extremist threat has at least been neutralized?

Secretary Lorenzana has publicly stated that the military possessed the intelligence information on the existence of ISIS but did not pursue the lead nor appreciated its value, or realized the magnitude of the ISIS strength. Sun Tzu in the Art of War states that when you wage war, you must know yourself and more importantly, your enemy. A lesson we should never forget or take out of our playbook.

The threat of extremism requires a national strategy to counter it. A piece-meal approach will not mitigate the threat. Even the US and the western world, with their comprehensive strategy and super military strength, continue to be confronted with the unforgiving burden of terror.

Who is the enemy we are fighting? The Islamic State e-book Black Flags from Palestine quotes a Russian General, speaking of jihadists in Chechnya: “How can you defeat an enemy who looks into the barrel of your gun and sees paradise.” One true army Syrian fighter who joined ISIS and then labored to get others to follow suit observed in November 2014, “ISIS is like a magnet that attracts a large number of Muslims. They love death more than life.”

Can the government square-off with this type of enemy? It is a contest between the lovers of death and destruction, and the freedom-loving countries like the Philippines that champion human creativity and achievement.

ISIS is also concerned about the moderates, whom they consider to be on the wrong side. The extremists believe that they have exclusive claim to the strict adherence to the Quo’ran and example of Muhammad. Since the majority of our Muslim brothers are moderates, the question we must also answer is how can they strengthen their beliefs as moderates and prevent the extremists from infiltrating their ranks.

After considering the enemy, let us examine our capabilities based on actual performance on the ongoing Marawi operations. These are the very revealing facts.

1. The military and police forces are wanting in military hardware and wherewithal, tactics and techniques, and an understanding of the culture and resolve of the enemy to gain a decisive competitive advantage. If not for the technical assistance of the US and the other support from the ASEAN and Australia, the damage could have been on a larger scale. The core competence of our security forces is insufficient to address the threat of these extremists.

2. The crisis revealed the inadequacy and inefficiency of our political system and structure on the local government level. The response of the local government was only reactive. While a crisis management network was in place, it was unable to react with dispatch. Active measures for prevention, immediate incident response, and immediate post incident were absent. These inactions manifest the absence of adequate command and control mechanism.

3. Many civilians and officials abetted and aided the terrorists through the provision of financial, logistical, and manpower support, particularly firearms and explosives. These offenses that afforded comfort to and boosted the strength of the terrorists are disloyal acts and practices; these acts incite sedition that if fueled further can turn into a rebellion. Loyalty to the flag is unconditional. As of this writing, we have yet to hear of the imposition of any punishment on these erring officials and citizens.

4. Our influence on other nations is not strong enough to close the gate valve to support from flowing to the extremists in Marawi. While the world may be watching the developments in our southern region, the messages and concerns that are being broadcast and discussed barely touch on the question of how the extremists are sustaining their unholy war.

5. The decisive resolve and strong political will of the President and the steadfast loyalty of the AFP/PNP to the Constitution under these trying, extreme conditions were key to the containment, neutralization, and mitigation of the escalating crisis. Under such extreme terroristic situations, only the military can execute an immediate response. Anything short of this response would create conditions that are uncontrollable and unmanageable. If the normal administrative governance of the local government continued and persisted, human suffering and further loss of property could have been on a more escalated level.

With all these in mind, the imperative is clear. Having briefly described the nature and character of the enemy, identified our strengths and weaknesses, and the irreversible risks and foregone opportunities, measured in terms of political survival and economic stability, the crafting of a national strategy on the war on terror is in order and inevitable.

A strategy must be anchored on the following postulates:

a. Psychological preparation of the citizenry. To enjoy freedom, we must fight for it. Revolutions start with a mind-set that focuses on the development of an advocacy and commitment that will serve national interests, and survival. To win this fight, we must acknowledge that we are dealing with a revolution of the mind. The strength of extremists feed on this dogma. If we do not believe in ourselves, we will always be dominated. We have a perception that is totally averse to martial law. We always think that martial law is diabolic. The Filipinos have been brainwashed with the dark side mind-set. The typical Filipino reaction to the military and using the military option is either doubt or indifference. The slightest reference to military men involved in civilian functions are branded as militarization.

b. Military preparedness. The military and only the military has the training, orientation and leadership qualities to fight and conquer an environment defined by terrorists. This doctrine takes its justification in all conflict-affected areas that erupts in all parts of the world as exercised by the United Nations. When conflicts happen, a military peace-keeping force is dispatched to respond to such crisis, prevent escalation, and immediately restore order so that normal, political, and economic activities can and do resume. Specialized weapons and tactics are a must to dismantle or dispose of any agents or weapons capable of mass destruction, and for the national police to access crime scene, evidence collection and preservation and investigation of crimes. And if the crisis escalates further, it is necessary to provide installation and mobilization support for families and persons, and other hosts of humanitarian responses. While this is the concern of the DSWD, it is the military that can do better or best. In the words of former UN Secretary General Dag Hammarskjold, “peacekeeping is not the job of a soldier, but only a soldier can do it.”

c. Enhance local governance and leadership. We are seeing that many political lame ducks occupy local executive positions. Under Section 44, Republic Act 7077, local executive officials can be commissioned into the reserve force. Let this mechanism transform the local executives into effective leaders and commanders who can be depended upon under extreme conflict situations.

These three requisites form the foundation of a strong and effective national strategy on the war on terror. It must be crafted and implemented without delay. As long as extremism exists, peace will just be a dream. Either it dies, decimated and neutralized, or we as a nation and a people perish under its irrational, inhuman wake. We have only one nation. Let every citizen fight for it willingly and unconditionally.

The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the M.A.P.

Jaime S. de los Santos is a member of the M.A.P. National Issues Committee, 1st Force Commander, 24 Nation Multi-National UN Peace-Keeping Force in East Timor. The Force restored order to an aspiring nation that experienced massive loss of lives and properties due to large-scale terror.

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17 dead in Burkina Faso bistro ‘terrorist attack’

OUAGADOUGOU, BURKINA FASO — Seventeen people have been killed and eight injured in a “terrorist attack” on a restaurant in Burkina Faso’s capital, the government said Monday.

Witnesses said three gunmen arrived at a Turkish restaurant in a pickup truck on Sunday evening and opened fire on customers seated outside.

The government then launched a counter-assault, with gunfire heard into the night.

“A terrorist attack at Istanbul restaurant on Ouagadougou’s Kwame Nkrumah Avenue claimed 17 victims, their nationalities are yet to be confirmed, and eight people are injured,” a government statement said.

Communication minister Remis Dandjinou said it was not known how many assailants were involved.

“They are confined to one part of the building they attacked. Security and elite forces are conducting an operation,” he said on television.

A paramedic told AFP that one of the victims was a Turkish national.

“We evacuated 11 people but one of them, a Turk, died on arriving at hospital,” the paramedic said, declining to be named.

Police evacuated civilians from the area before launching the counter-assault, with the heavy exchange of fire becoming more sporadic as the operation went on.

One soldier had said there were hostages on the first and second floor of the two-storey building housing the Turkish restaurant.

The mayor of Ouagadougou and government ministers were on the scene, he added.

Burkina Faso, a poor landlocked nation bordering Mali and Niger, has seen a string of attacks claimed by jihadist groups in recent years. — AFP

Alexander Zverev stuns Federer to win Montreal Masters

MONTREAL — Alexander Zverev shocked second seed Roger Federer in straight sets in the Montreal Masters final to win his fifth title of the season on Sunday and announce himself as a dangerman for the US Open.

The 20-year-old German used his booming serve to overpower Federer 6-3, 6-4 as the Swiss superstar never got a chance to get into the match.

Zverev avenged a 6-1, 6-3 loss to Federer in the Halle final in June — his only loss in a final this season.

He is now tied with Federer for the most titles this season at five.

Zverev blasted six aces and won 80% of first serve points as he needed just 68 minutes to dominate the 19-time Grand Slam winner and reigning Wimbledon and Australian Open champion.

Zverev hammered away at the 36-year-old Federer with excellent court coverage keeping him off balance throughout the 30 minute opening set. He closed out the set with serve to the backhand that an out of sorts Federer dumped into the ground.

Federer, who was broken three times, looked just as frustrated to open the second set, hitting backhands long and freezing in his tracks as aces whizzed by.

Zverev capped his victory on the first match point when Federer hit a forehand long.

Federer suffered just his third loss of a season and had his longest win match streak in five years snapped at 16.

Federer, who dropped to 5-1 in finals in 2017, is undergoing a resurgence this season after it appeared to many he might be slowing down as he transitions through his mid-30s. — AFP

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