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M. A. P. Insights
Jaime S. de los Santos

During the second quarterly meeting of the Association of Generals and Flag Officers last June 22, the Guest of Honor and Speaker was the Presidential Adviser on the Peace Process, Sec. Jesus Dureza. His talk centered on the status of the ongoing peace process, the 5th round of which was suspended by the President due to certain unreasonable demands of the National Democratic Front (NDF) panel. With this suspension of the talks, the NDF consultants previously released by the President risk arrest if they return to the Philippines.

Furthermore, with the forthcoming elections in the Netherlands, the refugee problem has become one of the major election issues. The status of Jose Maria “Joma” Sison and the other NDF consultants are sure to be affected, with the possibility of deportation if this political issue heats up.

Looking back, the peace process has been going on for the last 30 years since the assumption of Mrs. Cory Aquino to the presidency. She created the office of Peace Commissioner and one of her first acts was the issuance of executive clemency to Joma Sison and other political detainees. She announced a policy of reconciliation to heal the wounds of a divided nation.

During the time of President Ramos, 15 rounds of formal and informal talks were held. The NDF demanded the presence of political consultants who were in prison, including Sotero Llamas, for the talks in Brussels, Belgium. They were granted amnesty eventually.

During the time of President Estrada, the GRP reasserted its exclusive right to prosecute, try, and apply sanctions against violators of human rights. The NPA retaliated by abducting AFP Brigadier-General Obillo and two other military officers.

In President Gloria Arroyo’s time, the peace talks were again suspended in protest to the congratulatory statement made by the NPA for the assassination of the late Congressman Rodolfo Aguinaldo. The postponement was further aggravated by the inclusion of Joma in the terrorist listing of the US and the European Union. Proclamation No. 137 was also issued granting amnesty to some communist rebels.

In the 30 years of peace talks, the NDF was always headed by Joma. The NDF panels have not been able to make any categorical assurance on basic terms of reference. It only proves the absence of explicit and manifest leadership and control which he claims to wield over the local movement. Probing further, one can easily conclude that the harassment, intimidation and attacks on AFP/PNP personnel can be attributed to infighting within the top leadership, absence of a shared purpose, and sheer lack of discipline among its members. They have diverse and conflicting agenda. The movement is slowly losing its grip on its party members and for it to even survive, it has to transform the organization to a criminal and violent mode in order to generate funds.

Joma administers party affairs by remote control. There is no substitute for person-to-person contact to communicate the message and intentions to party members. Technology only facilitates communication, but it cannot provide the intrinsic value required to demand loyalty from one’s troops. Joma breathes rarefied air and lives in an environment that is extraneous from the realities on the ground where his men operate. He leads a frivolous life supported by foreign benefactors and the contributions from the local movement that are sourced illegally through kidnapping, revolutionary taxes, extortion and other criminal acts. This is the worst form of leadership, when you let your men sacrifice life and limb to feed your whims and caprices, and even worse, when you hide behind the cloak of foreign hospitality and goodwill.

What are the by-products of this type of leadership? It provides the vague interpretation that encourages your men to work for their selfish personal agenda when you lose control, power, and influence. In short, you are inutile. His long absence from the Philippines already makes him an irrelevant representative of the movement. Why are we then negotiating with him in the first place?

What are the implications if a breakdown of leadership occurs? There is an absence of a shared purpose. A diverse and incongruent purpose creates political infighting, power struggle, parochial politics, and organizational inefficiency. Under Joma’s leadership, the movement has become divided, with actions leading to divisiveness. It undertook purges of alleged disloyal party members which split into two factions, the rejectionist and the reaffirmist. The lack of command and control has let loose the appetite of its members to commit criminal acts, like kidnapping, destruction of government properties and installations, collection of revolutionary tax, security protection of political candidates, and the dissemination of propaganda that projects bad image of the country in the international community. There is a clash of leadership prerogative since Joma cannot even compel his people to comply with the government agreement on cease-fire.

When you lose control over your people, you provide a wide latitude of options to your men which they will interpret to their own advantage. It allows them the flexibility to craft their own strategy, to generate resources for the movement through insidious and unscrupulous methods, and to satisfy the greed for personal ambitions. What form of ideology or advocacy does these methods subscribe to?

Leadership begins with values; values beget character that is essential in sustaining the lifeblood of an organization. The advocacy that permeates in the organization defines its quality and standard.

Let us look at what values Joma represents.

• When you depend and take advantage of the coffers of other people to feed your physiological needs and ego in order to advance your political objectives, you approximate the level of a parasite.

• When you advance your selfish ambition by just depending on the efforts and initiatives of your men, that is deceit. When you force people to work for you and take undue advantage of their ignorance, fear, and despair, you rule through deception and ill-will.

• When you impose on your men to commit violence, torture to both destroy lives and generate more party resources regardless of the means, malintention and cowardice are in your system.

• When you destroy the future of people and the future generation, you are an opportunist and a bottom-feeder.

In short and simple characterization, Joma lacks the character to provide the sincerity and wisdom to lead the negotiations.

The GRP is better off undertaking localized peace negotiations on a regional level with NDF leaders. This seems to have greater promise of success as these localized leaders have better control and the real support of their forces on the ground. They are familiar with the local conditions and sentiments of the people.

Regional level talks can provide the opportunity for better confidence-building measures. The problem with a country-wide coverage of the peace process is that each region has its own peculiar characteristics, degree of insurgent affectation, either infiltrated or influenced, hence, must be handled on a case-to-case basis.

The prospects for peace are bright, as both sides continue to persevere and stay on track. Leadership is key, and the NDF may need to take a good hard look at their internal realities if they sincerely want to achieve peace, finally.

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, was the Combined Task Force Commander that conducted offensive operations against the Abu Sayyaf, the group responsible for the carnage in Ipil, Zamboanga del Sur that killed 85 persons and destroyed and razed multi-million worth of properties in 1995. Tactical operations were conducted in the municipalities of Siraway, Sibuco, Siocon, and Baliguian, all in Zamboanga del Norte.

jaime_dlsantos@yahoo.com; jimmydlsantos@gmail.com

map@map.org.ph

http://map.org.ph

Trump backtracks on US-Russia cyber unit after harsh criticism

WASHINGTON — US President Donald Trump on Sunday backtracked on his push for a cyber security unit with Russia, tweeting that he did not think it could happen, hours after his proposal was harshly criticized by Republicans who said Moscow could not be trusted.

Trump said on Twitter early on Sunday that he and Russian President Vladimir Putin discussed on Friday forming “an impenetrable Cyber Security unit” to address issues like the risk of cyber meddling in elections.

The idea appeared to be a political non-starter. It was immediately scorned by several of Trump’s fellow Republicans, who questioned why the United States would work with Russia after Moscow’s alleged meddling in the 2016 US election.

“It’s not the dumbest idea I have ever heard but it’s pretty close,” Senator Lindsey Graham of South Carolina told NBC’s Meet the Press program.

Ash Carter, who was US defense secretary until the end of former Democratic President Barack Obama’s administration in January, told CNN flatly: “This is like the guy who robbed your house proposing a working group on burglary.”

Trump’s advisers, including Secretary of State Rex Tillerson and Treasury Secretary Steve Mnuchin, had recently sought to explain Trump’s cyber push.

Mnuchin said on Saturday that Trump and Putin had agreed to create “a cyber unit to make sure that there was absolutely no interference whatsoever, that they would work on cyber security together.”

But Trump returned to Twitter on Sunday to play down the idea, which arose at his talks with Putin at a summit of the Group of 20 nations in Hamburg, Germany.

“The fact that President Putin and I discussed a Cyber Security unit doesn’t mean I think it can happen. It can’t,” Trump said on Twitter.

Republican Senator John McCain of Arizona acknowledged Trump’s desire to move forward with Russia, but added: “There has to be a price to pay.”

“There has been no penalty,” McCain, who chairs the Senate Armed Services Committee, told CBS’ Face the Nation program according to a CBS transcript. “Vladimir Putin … got away with literally trying to change the outcome … of our election.”

Trump argued for a rapprochement with Moscow in his campaign but has been unable to deliver because his administration has been dogged by investigations into the allegations of Russian interference in the election and ties with his campaign.

Special Counsel Robert Mueller is investigating the matter, including whether there may have been any collusion on the part of Trump campaign officials, as are congressional committees including both the House of Representatives and Senate intelligence panels.

Those probes are focused almost exclusively on Moscow’s actions, lawmakers and intelligence officials say, and no evidence has surfaced publicly implicating other countries despite Trump’s suggestion that others could have been involved.

Moscow has denied any interference, and Trump says his campaign did not collude with Russia.

Representative Adam Schiff, the top Democrat on the House Intelligence Committee, told CNN’s State of the Union program that Russia could not be a credible partner in a cyber security unit.

“If that’s our best election defense, we might as well just mail our ballot boxes to Moscow,” Schiff added.

Separately, US government officials said a recent hack into business systems of US nuclear power and other energy companies was carried out by Russian government hackers, the Washington Post reported on Saturday.

‘TIME TO MOVE FORWARD’
Trump said he “strongly pressed President Putin twice about Russian meddling in our election. He vehemently denied it.”

He added: “We negotiated a ceasefire in parts of Syria which will save lives. Now it is time to move forward in working constructively with Russia!”

Any joint US-Russia cyber initiative would have been a different matter. Depending how much it veered into military or espionage operations, it could have faced major legal hurdles.

Language in the 2017 National Defense Authorization Act prohibits the Pentagon, which includes the National Security Agency and the US military’s Cyber Command, from using any funds for bilateral military cooperation with Russia.

Michael McFaul, a former US ambassador to Russia, also noted restrictions on sharing information with Russia that would clearly prohibit offering Moscow a sense of US cyber capabilities. Russia would be similarly adverse to revealing its capabilities to the United States, he noted.

“It just will not happen,” McFaul told Reuters. — Reuters

HK’s mortgage lenders do business in the shadow

HONG KONG — When Horan Fu decided to buy a 500-square-foot apartment for HK$7.4 million last year, the biggest draw was the developer’s offer of 85% financing with an option to defer interest payments for the first three years.

“The interest rate could be a lot higher after three years, but there’s also a chance that the interest would still be cheap because finance companies are competing fiercely,” said Mr. Fu, who works in Hong Kong’s financial services industry.

“There’s risk but there’s also an upside. It’s a good investment opportunity.”

With traditional financing drying up in Hong Kong at a time when property prices are at a record high, home buyers like Mr. Fu are looking to non-bank lenders, many of them the financing arms of developers, to get in on the boom.

Under Hong Kong law, these “shadow banks” can loan legally as long as interest rates do not exceed 60% per annum, according to industry officials and an official document seen by Reuters.

The system is a life-saver for those who have found it harder to secure loans, particularly mortgages, due to curbs imposed by the central bank to dampen home prices, which are up 137% since the start of the financial crisis in 2008.

But it also puts the broader system at risk if property prices turn around or borrowers start to default, because many of these lenders have themselves raised financing by borrowing from big banks or selling bonds.

Because they are not banks — they do not take deposits — shadow lenders in Hong Kong are monitored by the police, and not financial regulators.

The manager of one such lender said his firm, founded by a mainland Chinese entrepreneur, lends on average HK$8 million to HK$10 million for a first mortgage and up to HK$300 million for a villa, with down payments much smaller than a regular bank.

“I can lend you 90% for a property, for example, no problem,” he told Reuters from his office in the Central business district, asking not to be named because he was not authorized to speak to the media.

The share of shadow banks in Hong Kong’s mortgage business is still small — in the low single digits — but industry officials say it is growing fast, up at least 30% to 40% a year over the last couple of years.

That’s no surprise given that mainstream lenders like HSBC and Standard Chartered have capped mortgages at just 51% at the end of last year, according to Standard & Poor’s.

That was after the Hong Kong Monetary Authority (HKMA) gradually lowered the property financing ratio, raised interest rates, hiked the risk capital buffer for new loans and discouraged banks from making large loans to developers with big mortgage lending operations.

“Regulators have got us to this situation,” said Richard Wong, a professor in the Hong Kong University’s school of economics and finance. “The money lenders are not deposit-taking companies… but that doesn’t mean there is no risk because the (property) market could correct.”

MONITORING CLOSELY
While non-bank financing companies play a major role in mortgage lending in many developed economies, regulators have been tightening their scrutiny of these lenders, especially after the sub-prime mortgage crisis in the United States.

The Hong Kong regulator, the HKMA, told Reuters it had given guidance to banks to ensure they boost their “credit risk management” when it comes lending to property developers.

“The HKMA will continue to monitor the property and mortgage markets closely, and will introduce appropriate measures to safeguard the stability of the banking system as necessary,” it said in a statement.

In addition to the financing units of developers, another 1,800 entities have a license to operate in Hong Kong as money lenders, the bulk of them in mortgages, double the number five years ago, according to the official Companies Registry data.

Another 100 firms had applied for a money lender’s license as of end May this year, according to a review of data at the Hong Kong Companies Registry.

Mortgage loans granted by the dozen or so financing units of Sino-Land Company Ltd more than doubled in 2016 from the year before to HK$1.02 billion, according to its annual report, in a year when turnover nearly halved and profit dived by nearly 25%.

Other top developers, including Cheung Kong Property Holdings Ltd, controlled by Hong Kong’s richest man Li Ka-shing, Sun Hung Kai Properties Ltd and Henderson Land Development Co Ltd also have financing units.

Loans from one of Sun Hung Kai financing arms for its latest development in the New Territories started at 80% of the property price and went up to 120% for people who already had a home and wanted to upgrade, according to its price list.

About 5,000 people applied to buy the 234 units put on sale on July 1 in the first phase of the development, where a 721-square-feet unit costs as much as HK$10 million.

Interest rates from shadow lenders vary widely, but typically start at around 5% and go up to 20% or higher, versus 2-3% at regular banks, which also lend for longer terms of 25-30 years, industry sources said.

Sun Hung Kai told Reuters it was always “prudent” — “While the package helps our buyers, it does not affect the company’s financial position as the loan exposure is very small and well-secured.”

Sino-Land, Cheung Kong and Henderson did not respond to requests for comment.

The Hong Kong police, the de-facto regulator, said it did not have any data on buyer complaints against non-bank financing companies, but added that it maintained a “close liaison” with the financial industry.

“Enforcement action will be taken by the police if there is evidence implicating any money lender engaged in illegal practices,” it said in a statement.

Some bankers and analysts say the growth of shadow banking in the mortgage sector could be a ticking time bomb, especially if there’s a correction in the market, as is widely expected.

The potential for defaults was also a concern although the delinquency ratio in the main banking sector, at least, remains low at just 0.03% in May, unchanged from April, according to the HKMA’s latest available data.

Brokerage Nomura expects prices to peak in the first half of this year, and said that local economic fundamentals do not support further price rises.

“(The property market) is very expensive… it goes up very fast, (but) it actually corrects also very fast,” said David Chiu, chair of realtor Far East Consortium International. — Reuters

GMR-Megawide may bid for Clark airport expansion

LISTED Megawide Construction Corp., along with Bangalore-based airport operator GMR Infrastructure Ltd., is open to joining the bidding for the P12.55-billion Clark International Airport Expansion Project which the government will offer to investors this month, a company executive said.

“We’d like to study the terms of reference first but of course we are open to participation in the project,” GMR-Megawide Cebu Airport Corp. President Manuel Louie B. Ferrer said in a text message when asked whether the joint venture firm — which currently operates the Mactan-Cebu International Airport (MCIA) — is keen on joining the bidding.

“We fully support the development of Clark. We also hope that priority is placed on the development of our airports system since delays in one airport greatly affect flights in MCIA and also other airports,” he added.

GMR-Megawide had earlier expressed interest in developing the gateway in Clark. Last year, the company submitted a $5-billion unsolicited proposal to develop the Clark airport to the government, but it was rejected.

The government earlier this year announced it will pursue the project on its own first and eventually bid out the operations and maintenance (O&M) of Clark.

The Clark International Airport Expansion Project — which will involve national government financing and public-private partnerships (PPP) for operation and maintenance — includes building a 82,600-square-meter terminal building that will be designed to accommodate eight million passengers a year, nearly double the current 4.2 million capacity, and should be completed by 2019.

Clark’s new terminal will be the first of the hybrid PPP model under the Duterte administration where the government builds the infrastructure and then the private sector will be in charge of its maintenance and operations.

Bidding for both the construction and O&M of the Clark airport will happen this year, Vivencio B. Dizon, BCDA president and chief executive officer earlier said.

The government has been promoting the Diosdado Macapagal International Airport in Clark as an alternative gateway to help decongest the Ninoy Aquino International Airport in Manila, which accounts for nearly 90% of all domestic passengers in the Philippines and more than 80% of all international passengers.

Clark International Airport, located within the Clark Freeport Zone, is 43.2 nautical miles northwest of Manila with a current annual capacity of 4.2 million passengers. The new development plan for the Clark Airport, drawn up in cooperation with France’s Aeroports de Paris, seeks to initially double the gateway’s capacity. — Imee Charlee C. Delavin

BW FILE PHOTO

Embattled Theresa May vows to fight on as Brexit challenge looms over UK

LONDON — Britain’s Theresa May will promise to fight on as prime minister and pursue bold domestic reform despite her diminished authority in a speech this week relaunching her leadership after 12 tumultuous months in power.

As her minority government prepares to start the difficult task of passing Brexit through parliament, May will remind Britons of her promise to build a fairer society, seeking to repair a reputation damaged by an ill-judged snap election.

Almost one year on from her first day as Prime Minister — a job she took on in the chaotic aftermath of Britain’s shock referendum vote to leave the European Union (EU) — May will urge voters and political opponents to help her “tackle the injustice and vested interests that threaten to hold us back.”

“My commitment to change in Britain is undimmed,” May will say on Tuesday according to advanced extracts from her speech.

May called the unscheduled election on June 8 in an attempt to cash in on high poll ratings and win support for her plan to make a clean break with the EU in 2019.

But the gamble backfired when voters stripped her of a majority in parliament and forced her party into a deal with a small Northern Irish party to prop up a minority government.

May’s failure to win an outright majority in a snap national election has cast doubt on her capacity to lead Britain out of the EU, sharpening a debate on what sort of exit deal the government should seek.

“In this new context, it will be even more important to make the case for our policies and our values, and to win the battle of ideas both in Parliament as well as in the country,” May will say.

May’s ability to carry on as prime minister and drive divisive Brexit legislation through parliament with only a fragile majority behind her has been persistently questioned since the election.

The first stage of the Brexit process will come later this week when a key piece of legislation, which translates EU law into British law, is presented to parliament.

On Sunday, a lawmaker from the pro-EU Liberal Democrats, Britain’s fourth largest party, said he thought Brexit might not happen because the divisions over how to achieve it were too great.

But May’s position seems secure for now, with colleagues preferring to see her start Brexit talks rather than topple her and risk the whole government collapsing — a scenario that could let a resurgent opposition Labour Party into power.

EMPLOYMENT REPORT
May will make the appeal for national backing at the launch of a report into how the government should protect workers affected by a shift to different employment models, including the ‘gig economy’ championed by the likes of Uber and Deliveroo.

The report is a key element of May’s plan, announced a year ago, to address dissatisfaction expressed at the EU referendum by millions of working class Britons who felt left behind by capitalism and disenchanted with the political system.

May was criticized by opponents last month for setting out an unambitious legislative agenda for the next two years, unveiling a program shorn of flagship social reforms and heavily focused on delivering Brexit.

In Tuesday’s speech, she will seek to refute the idea that her lack of a majority in parliament and the huge workload generated by Brexit will limit the government’s reform ambition.

“At this critical time in our history, we can either be timid or we can be bold,” May will say. “We will act with an unshakeable sense of purpose to build the better, fairer Britain which we all want to see.” — Reuters

Shell plans to spend $1 billion a year on clean energy by 2020

ROYAL DUTCH Shell Plc plans to spend as much as $1 billion a year on its New Energies division as the transition toward renewable power and electric cars accelerates.

“In some parts of the world we are beginning to see battery electric cars starting to gain consumer acceptance” while wind and solar costs are falling fast, Shell CEO Ben Van Beurden said in a speech in Istanbul on Monday. “All of this is good news for the world and must accelerate,” while still offering opportunities for producers of fossil fuels.

Shell sees opportunities in hydrogen fuel-cells, liquefied natural gas and next-generation biofuels for air travel, shipping and heavy freight — areas of transport for which batteries aren’t adequate. The intermittent nature of wind and solar energy means power plants fired by natural gas will have a long-term role, Mr. Van Beurden said.

Mr. Van Beurden was addressing the World Petroleum Congress — a gathering of ministers and CEOs from some of the largest oil producers — at a time when the accelerating shift to clean energy is raising questions about their long-term business models. While Russian Energy Minister Alexander Novak and Saudi Arabian Oil Co. boss Amin Nasser said oil and gas will be dominant for decades to come, Mr. Van Beurden highlighted the potential for some of the fastest-growing nations to leapfrog straight to a cleaner energy mix.

“When you consider the areas of the world where energy demand is still to expand, like Asia and sub-Saharan Africa, there is a huge opportunity,” Mr. Van Beurden said. “These are areas that are not, on the whole, locked in to a coal-driven system. There is the potential for them to shift more directly onto a less energy-intensive pathway to development.”

There is often too much focus on energy-transition policies in Europe and North America instead of the fast-growing developing world, Mr. Van Beurden said. “What happens in England is important, but what happens in Ethiopia is at least as important. From Denmark to the DRC, from the US to Uganda, to India, to China, there is a lot of work to do.”

These countries will still require fossil fuels to develop industries such as steel, cement and chemicals because they need a heat intensity that cannot come from electricity alone, he said. — Bloomberg

Nationwide martial law more imminent with Supreme Court ruling

To Take A Stand
Oscar P. Lagman, Jr.

I wrote in this space last May 30 that martial law throughout the country is coming. This expectation is based on President Rodrigo Duterte’s statements subsequent to his proclamation of martial law over the entire island of Mindanao on May 23. Believing that terrorists can easily slip into Mindanao’s neighboring islands, the President hinted that he is inclined to declare martial law in the Visayas as well. He has also said that martial law can be expanded to the whole country if terrorists are found to be operating in other parts of the country.

About the possible extension of martial law in Mindanao beyond 60 days, the President told soldiers in Jolo: “Until the police and the Armed Forces say the Philippines is safe, this martial law will continue. I will not listen to others. The Supreme Court justices, the congressmen, they are not here.” As the president, he is the supreme authority over the police force and the commander-in-chief of the Armed Forces. He has therefore the final say with regard to the safety of the entire country from terrorists. And upon his proclamation by Congress as president-elect, he declared, “I decide alone.” So, he alone will decide if terrorists are operating in other parts of the country.

The Supreme Court’s decision upholding the validity of the declaration of martial law and suspension of the privilege of the writ of habeas corpus in the entire Mindanao region has also recognized the power of the President to put the entire Philippines under martial rule on the basis of the terroristic acts taking place in Marawi City. Page 73 of the court’s decision says that the discretion to determine the territorial scope of marital law lies with the president. The court further declares that the Constitution grants him the prerogative whether to put the entire Philippines or any part thereof under martial law as there is no edict that martial law should be confined only in the particular place where the armed public uprising actually transpired.

Page 77 of the decision says that there is reasonable basis to believe that Marawi is only the staging point of the rebellion, both for symbolic and strategic reasons. Marawi may not be the target but the whole of Mindanao. There is also the plan to establish a wilayah (Arabic for province) in Mindanao by staging the siege of Marawi.

Now that the Supreme Court has given its blessing to President Duterte’s predilection to put the entire country under martial rule, martial law all over the land has become imminent.

“Reasonable basis” is not exactly factual basis nor is a plan actual rebellion. It is not clear from the wording of the decision as to who found reasonable basis to believe that Marawi is only the staging point and who discovered the plan to establish an IS province in Mindanao. If it was the President’s uniformed security forces, then the justices had abdicated their duty to establish factual basis for the proclamation. If it is the justices, it would be inconsistent with their claim that they are not equipped with the competence and logistical machinery to determine the strategic value of other places in the military’s efforts to quell the rebellion and restore peace.

It is strange that the gods of Padre Faura are so quick to admit that they lack the competence and the logistical machinery to delve into military strategy and surrender to the judgment of the President and his military generals. Yet when it comes to the Reproductive Health law, the court has temporarily restrained its full implementation until it has decided whether some contraceptive devices have abortifacient character or not, instead of admitting lack of competence to make such a determination as not one of them is a doctor of medicine or a professional in a related field of science.

Among the Supreme Court associate justices who granted the President the power to declare martial law anywhere in the country simply on the basis of the possibility that acts of terrorism in a small part of the country may spill over to other parts are Associate Justices Mariano C. del Castillo, the author of the decision, Presbitero J. Velasco, Jr., Teresita J. Leonardo-De Castro, Diosdado M. Peralta, Lucas P. Bersamin, Jose C. Mendoza, and Estela M. Perlas-Bernabe. They are the same associate justices who had shown previously their subservience to the wishes of President Duterte when they justified his order to bury former President Marcos at the Libingan ng mga Bayani for reasons that included the claim that he was a bemedalled war veteran, that he was not convicted of any offense involving moral turpitude, and that he was not discharged dishonorably.

To uphold President Duterte’s order, the justices blatantly ignored long established facts. On Marcos being a bemedalled hero, the fact is that official records of the US military and of the Armed Forces of the Philippines do not show that Marcos was awarded any of the medals he claimed to have been awarded him. Jeff Gerth and Joel Brinkley of The New York Times, after laboriously going over the War files in the in the US National Archives, and historian Alfred McCoy, while doing research on World War II in the Philippines, discovered the fraudulence of Marcos medals. They were all obtained years after the war, and through affidavits presented to the Defense department of the Philippines when he was already a powerful politician.

Contrary to the justices’ contention that Marcos had not been convicted for reasons of moral turpitude, a US court ruled that Marcos, through his estate, is liable to pay $2 billion in damages to 10,000 victims of human rights violations during his dictatorship. The Philippine Congress had also passed a law establishing the Human Rights Victims’ Claims Board to compensate victims of his regime, and the Presidential Commission on Good Government has recovered P93 billion in ill-gotten wealth from Marcos and his cronies.

As to Marcos not having been discharged dishonorably, the fact is that the Officer Corps of the Armed Forces of the Philippines decided in unceremonious fashion in February 1986 not to recognize him anymore as the commander-in-chief.

That is how the justices twist things to support their biased stand. The other associate justices who upheld the validity of Proclamation No. 216 were Bienvenido L. Reyes, Samuel R. Martires, Noel G. Tijam, and Francis Jardeleza. It will be recalled that Justice Reyes declined to take a stand on the issue of Marcos’s burial at the Libingan ng mga Bayani in deference to former President Benigno S. C. Aquino III, who appointed him to the Supreme Court, and to his San Beda College of Law classmate and Lex Talionis fraternity brod President Duterte. That was a sorry display of lack of fortitude. Justices Martires and Tijam are fellow San Beda Law alumni of the President and his first appointees (days of each other) to the Supreme Court.

These are the men and women of the highest court of the land. Theirs is not to reason why, theirs is but to comply with the wishes of Pres. Rodrigo Duterte.

These pliant justices constitute the Presidential Electoral Tribunal. Maybe we can expect them to decide on the basis of the wishes of the President. A devout wish of his is the proclamation of Bongbong Marcos as the winner in the election of the vice-president in 2016.

Oscar P. Lagman, Jr. is a member of Manindigan! a cause-oriented group of businessmen, professionals, and academics.

oplagman@yahoo.com

Sugarcane output seen approaching 2.5 million MT

SUGARCANE production may hit 2.5 million metric tons, the Sugar Regulatory Administration (SRA) said, with favorable weather boosting output and the numbers firming up with the production season coming to a close.

In a mobile message last week, SRA Administrator Anna Rosario V. Paner said raw sugar production, may reach “close to 2.5 million metric tons” this crop year, exceeding the earlier target of 2.25 million MT and higher than the 2.23 million MT output last crop year.

She added that only around nine mills are extending their operations until the third week of July.

The 2.5 million metric ton estimate represents an upgrade from June 19, when the agency estimated production of 2.4 million MT.

The agency’s preliminary weekly demand and supply situationer shows that, as of June 25, sugarcane output was 2.46 million MT.

Meanwhile, millsite prices of domestic refined sugar fell to P1,404.50 per 50 kilogram bag, significantly lower than the P1,784.92 at the start of the crop year.

Ms. Paner, in an earlier interview, said imports of a competing sweetener, high fructose corn syrup (HFCS), have dropped from year-earlier levels. The expanded adoption of HFCS by industrial users has been blamed for pulling down sugar prices. — Janina C. Lim

Lanzhou positions itself as new Belt and Road economic hub

LANZHOU — The city of Lanzhou signed 164 investment projects totaling more than RMB 111.4 billion during the 23rd Lanzhou Investment and Trade Fair that concluded on Sunday, a sign for the government of promising economic growth as the city positions itself as a key transport link and manufacturing hub for China’s transnational “One Belt, One Road” economic plan.

Once an important trading town on the old Silk Road, Lanzhou is seeking to revive its fortunes and return to prominence as a future gateway to Western China and Central Asia in the “One Belt, One Road” initiative, the extensive network of rail lines and highways connecting Chinese factories with markets in the rest of Asia and Europe.

Already, a freight cargo line has begun shipping goods from eastern China to western Europe through Lanzhou, with two trains arriving in the city every day. On Sunday, a new high-speed rail line started service between Lanzhou and Baoji in Shaanxi province, linking the vast, remote western half of China with the rest of the national high-speed rail network.

And last year, a new cargo rail line opened between Lanzhou and Tibet, allowing goods to be shipped to the Nepal border and then transferred to trucks to reach the capital of Kathmandu.

“Lanzhou is located in the exact center of the country,” said Mao Yuduo, the director of the Lanzhou government’s Economic, Cooperation and Services department. “It has an obvious advantage in terms of transportation. And it’s the biggest logistics center to deliver cargo in western China.”

Given Lanzhou’s prime location, the government has invested heavily to build a sprawling 800-square-kilometer city known as the Lanzhou New Area to the north of the city, with a free-trade zone, scores of high-rise apartment blocks, and infrastructure to support industries such as petrochemical, biomedical, and automobile and equipment manufacturing, as well as a burgeoning information technology sector.

The government is also keen to attract tourists with a just-opened dinosaur-themed amusement park (complete with water slides and a hotel), mini-replicas of the Great Sphinx in Egypt and the Parthenon in Greece, and a RMB 3 billion, state-of-the-art film studio.

The Lanzhou New Area was the first state-level “new area” economic zone in northwest China — similar in status to the Pudong New Area in Shanghai — when it was founded in 2012.

“Every new district has different responsibilities and Lanzhou’s responsibility is to be pole of economic growth of northwest China,” said Hao Jingxin, the director of the Lanzhou New Area’s Economic, Cooperation and Services department.

Since its inception, the new area has steadily attracted investors from across China and overseas, such as a German company producing steel pipes and a South Korean company making facial products, Mao said.

Shenzhen-based Amer International Group, one of the world’s largest copper companies, set up its production base for western China in the new area last year. In the first six months of 2017, the company earned RMB 4 billion in sales from the new factory, according to Wang Ligang, Amer’s Investment Committee vice-chairman.

Mr. Wang said the factory’s position in Lanzhou saves considerable time and money shipping goods to Europe — it takes just 30 days for its copper products to reach Germany by rail, compared to the usual 45 days by ship.

“When China was the strongest country in world in the Han and Tang dynasties, it was because of the Silk Road,” Mr. Wang said. “Now, China could not realize its future development without ‘One Belt, One Road.’”

At the Lanzhou Investment and Trade Fair, dozens of businesses from across Asia, Europe and Africa were also eager to talk up the potential market for their goods in western China. There were stalls selling everything from red wines from France and Spain to jade bracelets from Myanmar to organic jasmine rice from Cambodia.

Many Chinese provinces and localities also had their own booths promoting food products like goji berries from the Ningxia Hui Autonomous Region, buckwheat tea from Sichuan province and bags of bright-red chili peppers from the city of Chongqing.

Samir Ahmad, the China sales manager for an Indian handicraft company called Moughal Cottage Industries, said he sold so many Kashmir silk rugs and Pashmina shawls when he attended the fair for the first time last year, he decided to come back for this year’s edition.

“Lanzhou is one of the places in China which has a Muslim influence,” he said. “I would say that’s a benefit which brings us more and more customers — it’s the culture here.”

Ugandan businessman Kasozi Samson’s stall was also doing a brisk trade in his family-run company’s shea butter and cocoa butter skin-care products and handicrafts like carved wooden masks and drums.

“This fair is always good. People always buy,” he said. “Whenever we come here, we come with good expectations.” — AFP

A SONA cum budget road show

Corporate Watch
Amelia H. C. Ylagan

Headline news last week announced that President Rodrigo R. Duterte approved his Cabinet’s proposed P3.767-trillion 2018 national budget for submission to Congress on his first-year State of the Nation Address (SONA) on July 24 (BusinessWorld [BW], 07.05.2017).”

A SONA cum budget road show — it is actually a very good idea. Budget Secretary Benjamin E. Diokno declared, “The plan is to submit the President’s Budget of Expenditures and Sources of Financing (BESF) on the day of the SONA (Ibid.),” and presumably the detailed BESF will draw much of the applause for the President at the SONA for the transparent and concrete plans and projects/programs for the country in 2018 and to 2022, when his mandated 6-year term ends.

The administration’s “build, build, build” program and its focus on human capital have reserved 25.4% for “infrastructure and capital outlays” and about 29.4% of the proposed budget to “personnel services,” Presidential Spokesperson Ernesto C. Abella announced (Ibid.). The biggest departmental budget allocations will go to Education, Public Works and Highways, Interior and Local Government, Health, Social Welfare and Development, Agriculture, Environment and Natural Resources, and the Autonomous Region in Muslim Mindanao.

The proposed 2018 national budget is equivalent to 21.6% of (a projected P17.44 trillion) gross domestic product (GDP), and is about 12.4% more than the P3.35-trillion budget for 2017, Abella noted (Ibid.). Next year’s budget counts on P2.841 trillion in revenues (16.3% of GDP) to be available for disbursements of P3.364 trillion (19.3% of GDP), for which the shortfall will be covered by borrowing.

Duterte’s economic team assumes that the Tax Reform Package (House Bill No. 5636) already approved in the House of Representatives will generate P133.6 billion revenues in 2018. The high optimism for tax reforms to provide revenues had earlier pushed for the 2018 budget to be at P3.84 trillion, but revenue expectations had to be reduced 35% after Congress pared down in May the Department of Finance’s (DoF) first stage of a five-stage tax reform program. Yet despite the reductions in corporate and individual taxes, and the increased taxes on oil and “sinful” food for example, the calibrated increased net tax collection bolstered by incentivized tax compliance, all are expected to bring in 17% more than the P2.427-trillion projected 2017 revenues.

Disbursements will increase by some 15.6% to P3.364 trillion (19.3% of GDP), from 2017’s P2.909-trillion program (18.3% of GDP). Of disbursements, infrastructure spending will be pumped up 54.47% to P752.9 billion, from the P487.4 billion planned for 2017. The deficit-to-GDP ratio will be capped at three percent from 2017 to 2022, to keep to disbursement targets that have so far been missed (Ibid.). The government intends to borrow P889.72 billion in 2018, up 22.72% from the P727.64 billion planned for 2017 (BusinessWorld, 07.05.2017, Melissa T. Lopez reporting). Eighty percent or P711.776 billion will be borrowed locally, while the remaining 20% or 177.944 billion will be from foreign lenders (Ibid.).

And so Diokno says “there will be a ‘strong call’ for the Senate to approve the proposed tax measure after the President certified as urgent the CTRP (comprehensive tax reform program) bill…thus removing the requirement under legislative rules for second- and final-reading approval to be granted by each chamber of Congress on separate days (Ibid.).” Clever and neat move to present the 2018 Budget to the Legislature on the day of the SONA, if only to impress upon all that the budget, the proposed tax reform package, and the infrastructure projects are interdependent and bundled together for that Big Bang towards progress and development under “Dutertenomics.” With this road map, GDP growth is projected by government to grow 7-8% from next year to 2022, from 6.5-7.5% this year and from 2016’s actual of 6.9% (BW earlier cited).

It can be (or should be) presumed that the 2018 budget has been fashioned by Duterte and his Cabinet on the scenario of no-martial law for the country at least within next year. But today, since May 23, martial law has been proclaimed in the whole of Mindanao with its 22 million people, because of the rebellion of the rebel Maute group allegedly assisted by international terrorists, the ISIS. The destruction to public and private property from ground combat and air strikes is massive — has the cost of rebuilding Marawi City and the loss of revenues from productive activity, at least during the 60-day martial law in the region, been factored in the 2018 national budget? Columnist Marichu Villanueva pointed out: “the P20 billion mentioned by President Duterte was just off-the-cuff estimates of funds needed to bankroll the reconstruction of war-torn Marawi City. The amount is twice as much as the P10-billion rehabilitation budget proposed by the Department of National Defense (DND) (The Philippine Star, 06.23.2017).”

Have the lost revenue, opportunity costs, deaths, and pain in beleaguered Mindanao from the first open civil war against rebellion in the country been considered in such a seemingly innocuous document as a national budget?

President Duterte announced that he is not lifting martial law in Mindanao before his State of the Nation Address on July 24. The Supreme Court in its July 4 ruling junking contrary petitions effectively allowed the 60-day period of Duterte’s imposition of martial rule in Mindanao, which ends on July 22. Duterte said he will depend on an assessment by the military and police when and if martial law will be lifted or extended (Business Nightly, ANC, 07.07. 2017).

It’s OK to PR at the SONA with the 2018 national budget and the “Build, build, build” P8-trillion infrastructure program promising to over-generously offset the P139.6 billion in reduced revenues under the Tax Reform Packages — but say something definite about the pall of martial law that saps the joy of peaceful living in our free and democratic Philippines.

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

Syria talks resume in Geneva after ceasefire

GENEVA — Syria’s government and opposition meet Monday for a seventh round of UN-sponsored peace talks with little expectation of a breakthrough to end the six-year conflict.

The talks in Geneva open after a ceasefire took effect in three provinces in southern Syria on Sunday, with a monitor reporting that the region was mostly quiet despite scattered violations.

The ceasefire was brokered by the United States, Russia and Jordan, the latest agreement reached outside the Geneva framework.

The peace process in the Swiss city has been increasingly overshadowed by a separate track organized by regime allies Russia and Iran, and rebel backer Turkey.

In principle, the new round of Geneva negotiations will focus on four so-called “baskets”: a new constitution, governance, elections and combating “terrorism.”

The last talks ended in May with little progress towards ending a war that has killed more than 320,000 people since it began in March 2011.

Syria’s opposition insists that President Bashar al-Assad must step down as part of any political solution to the war, but the government says Assad’s fate is not up for discussion.

Still, both sides are expected to participate once again, with Yehya al-Aridi, a spokesman for the opposition High Negotiations Committee, telling AFP he had “modest expectations.”

Washington, once a key opposition backer and peace process partner, stepped back from involvement in the diplomatic process after President Donald Trump took office in January.

But its involvement in the south Syria ceasefire raises the prospect it may be re-engaging in a limited fashion.

US Secretary of State Rex Tillerson said American and Russian officials had discussed “other areas in Syria that we can continue to work together on.”

And in Washington, a senior State Department official said both countries had a role to play in ending Syria’s conflict.

“If there’s going to be a resolution of the conflict in Syria, we both need to somehow be involved in it.” — AFP

SEC files raps against lending company officers over falsified bank certificates

THE Securities and Exchange Commission (SEC) on Monday filed criminal raps against 153 individuals, including 67 Indian nationals, for violations of the Lending Company Regulation Act (LCRA).

In a statement, SEC Commissioner Emilio B. Aquino said its Enforcement and Investor Protection Department filed criminal complaints at the Pasay City Prosecutor’s Office against officers, directors, stockholders, agents, and a number of John Does linked with 18 lending firms.

The companies were identified as: 7 Lions Lending Management Corp., Amsuda Lending Corp.; Bhati and Jogi and Swali Lending and Trading Corp.; Dr. Verma Lending Corp.; Maan & Bhaker Landing, Inc.; Manak Pur Lohara Lending Corp.; Paramjit Harvinder Gold Lending, Inc.; Purewal and Rashpal Lending, Inc.; Divya and Kavita Lending Corporation; Satguru Lending Corporation; Sartaj Lending, Inc.; All In 7000 Lending and Trading Corp.; Balak1008 Lending and Trading, Inc.; Star 77777 Lending and Trading, Inc.; Chardikla 786 Lending and Trading, Inc.; Naurasidhu55 Lending and Trading Corporation; Phil 86 Gurunanak Lending and Trading Corp.; and X-Ceee86 Lending and Trading, Inc.

The corporate regulator found the 18 firms violated Section 5 of the LCRA, or Republic Act No. 9474, which states that lending companies applying for a Certificate of Authority (CA) to operate from the SEC must deposit a minimum paid-in capital of P1 million. Applicants must then secure a notarized bank certificate as proof of the deposit.

Upon checking, the SEC discovered the identified lending firms had submitted fake bank certificates that were “not issued by the bank at all.”

“Representatives from the subject bank, in a letter to the SEC, categorically denied having issued the submitted bank certificates. It verified that the account numbers indicated in the bank deposit certificates were not issued by the subject bank since they use a different bank code,” the SEC said.

This prompted the regulator to also file criminal complaints against the 18 firms for falsification of public and commercial documents under Article 172 of the Revised Penal Code.

“We will prosecute those submitting fake bank certificates. The SEC shall be the complainant. For sure the SEC was indeed misled by the bank certificates as proof of paid in capital,” Mr. Aquino was quoted as saying in a statement.

The SEC further said that it plans to blacklist all company service providers involved in the submission of the fake documents.

The regulator also intends to revoke the Certificates of Incorporation of lending firms found to have submitted false documents but have already received their CAs. “Further, they shall face the possibility of a perpetual ban from ever establishing a lending company again,” the SEC said.

Under the LCRA, lending company officers or employees found to have willingly made any false statement may face a fine of between P10,000 and P50,000, or imprisonment of not less than six months but not more than 10 years, or both, at the discretion of the court.

In its crackdown against illegal lenders, the SEC has revoked the primary registration as corporations of 1,248 entities as of July 4, after failing to obtain their CAs amid the extended time given to them.

The commission gave them until April 30, 2017 to secure their CAs, almost a decade after it first implemented the LCRA on June 12, 2008.

“They have been given more than sufficient time to comply and the President himself has been vocal about riding the country of these entities engaged in illegal lending and we will end their illegal ways by revoking their primary registrations,” Mr. Aquino said.

The regulator expects this number to increase as they continue the review and monitoring of more entities.

“The SEC takes very seriously its mandate to uphold the laws it administers. We will not back down against these illegal lenders. They have to legitimize, incorporate, and obtain proper licenses. There is a law that requires them to do so. Until they comply with the law, we will run after them and charge them,” Mr. Aquino said. — Arra B. Francia