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Mactan Airport, NCR water deals reviewed for contingent liability

THE Department of Finance (DoF) said the contracts for 12 major public-private partnership (PPP) projects have been reviewed to evaluate the risk of contingent liabilities which may arise later, possibly forcing the government or the projects’ users to pay more than initially agreed.

The DoF said in a statement on Tuesday that it reviewed the contracts for the Mactan-Cebu Airport Project, the Cavite-Laguna Expressway, the Clark International Airport Expansion Project and the Metro Rail Transit Line 3, as well as the concessions to supply water to the capital region held by Maynilad Water Services, Inc. and Manila Water Co.

Also reviewed were the contracts of the LRT1 Cavite Extension and Operations and Maintenance Project, MRT Line 7, the Muntinlupa-Cavite Expressway, the NLEX-SLEX Connector Road, the Bulacan Bulk Water Supply Project and the Southwest Integrated Transport System Phases 1 and 2.

The DoF said its privatization and special concerns office conducted the review. The office has recommended the creation of a specialized risk management office.

“Such extensive review of PPP projects, which we hope to be institutionalized for the ultimate benefit of our people, would ensure that the government is free from undue risks or contingent financial liabilities,” Finance Secretary Carlos G. Dominguez III said.

These risks, he said, “have to be shouldered by the public in the form of more taxes or higher fees charged by the concessionaires for the use of their facilities until such time that these are turned over to the state.”

The office is also evaluating 40 PPP proposals submitted to the National Economic and Development Authority (NEDA) which have not yet been acted on, and its input was considered in amending the implementing rules of the Build-Operate-Transfer (BOT) law. This law authorizes the private sector to finance, build, operate, and maintain infrastructure projects.

The NEDA and the PPP Center earlier this month detailed the proposed changes to the implementing rules and regulations of Republic Act No. 6957, or the BOT law.

Under the draft rules, projects to be considered will need a complete feasibility study, along with economic and financial models based on recent data.

Finance Undersecretary Grace Karen Singson said that the government should make the assessment of risk, government guarantees, and contingent liabilities a permanent feature, such as a specialized risk management office at the project proposal level.

Risk management has thus far only been performed on an ad hoc basis by technical working groups without resources, she said.

“Currently, the provisioning for contingent liabilities is based on estimated termination payments, a low probability event, and does not account for actual claims that are frequently demanded by concessionaires during the implementation of their PPP projects,” the DoF said.

The proposed risk management office will evaluate contingent liabilities and risks the government may be exposed to, recommend risk mitigation measures, and help the Development Budget Coordination Committee implement a risk management program.

The proposed office would also evaluate proposals that need sovereign guarantees, the DoF said. — Jenina P. Ibañez

Business chambers see amended PSA improving FDI climate

BUSINESS CHAMBERS said they expect the liberalization of the Public Service Act (PSA) to enhance competition and attract more investment, particularly in the industries opened up to expanded foreign ownership.

The German-Philippine Chamber of Commerce and Industry (GPCCI) said in a statement on Tuesday that the PSA amendments, signed into law on Monday, will help “attract global players” to help modernize industries like telecommunications, shipping, air carriers, railways, and subways.  

It added that increased competition will ultimately result in improved operations and competitive pricing for such services.

“The passage of the amendments of the PSA harmonizes with the recently passed amendments to the Retail Trade Liberalization Act (RTLA) and Foreign Investment Act (FIA). With these laws enacted, we are confident that the country can attract many investors in various sectors and will benefit Filipinos by improving basic services and creating more jobs,” GPCCI President Stefan Schmitz said.

On Monday, President Rodrigo R. Duterte signed Republic Act No. 11659, which amended the 85-year-old PSA.

The amendments removed public services such as telecommunications, domestic shipping, railways and subways, airlines, expressways and tollways, and airports from the public utility category. As a result, these services can now be fully owned by foreigners and are no longer covered by the 40% foreign ownership limit for public utilities set by the 1987 Constitution.  

The amended PSA is the third law in the economic liberalization program, following the amended FIA and RTLA. These measures are touted as aiding the economic recovery.

Lars Wittig, European Chamber of Commerce of the Philippines president, said the amended law will help the chamber’s efforts to attract European investors to the Philippines.  

“We believe this is the most important bill for foreign investments… and we do believe that it will drive the massive influx of foreign capital into the sectors of aviation, shipping, and telecommunications. There will be more competition (and) greater investments,” Mr. Wittig said in a television interview on Tuesday.

“We know that now the ball is in our court to guide these investors to (the Philippines). We are on the frontline here to make foreign investors aware and to bring them here because they are already coming to Association of Southeast Asian Nations (ASEAN). We need to gravitate them here to the Philippines also,” he added.  

Alfredo E. Pascual, Management Association of the Philippines president, said in a statement that the entry of foreign investors will benefit consumers, generate more jobs, boost the economy, and accelerate the economic recovery.

“Along with the recently amended RTLA and the FIA, the amended PSA provides a legal framework to encourage the inflow of more foreign investments into the country,” Mr. Pascual said.  

“A more open Philippine economy will enable us to catch up with our more progressive neighbors in ASEAN,” he added.

Trade Secretary Ramon M. Lopez said in a Viber message to reporters that the amended PSA will “surely attract more investments and more jobs for Filipinos.”

“This is another landmark reform under the Duterte administration as it finally opens up, after 85 years, critical sectors such as telecommunications and transportation, shipping, railways, to more foreign players, allowing greater competition, more technology-based innovations, better quality services and lower costs that will be enjoyed by all consumers and users,” Mr. Lopez said.

“Initial investment leads will be over $60 billion, composed of telecommunications, transportation, logistics, and railway (sectors). This is still understated as other leads have not indicated investment amount. (These) can be over $100 billion (in) over two years,” he added.

In a statement, Socioeconomic Planning Secretary Karl Kendrick T. Chua said the amended PSA will help improve services in transportation and telecommunications.

“The completion of the economic liberalization bills will revitalize our economy and encourage more investment and innovation as we continue to recover from the COVID-19 pandemic. The measures will also strengthen our domestic economy against external shocks, such as the Russia-Ukraine crisis,” Mr. Chua said.  

According to the National Economic and Development Authority (NEDA), there are safeguard provisions to address national security concerns arising from the entry of foreign investors.

“First, the power of the President to suspend or prohibit any investments in a public service in the interest of national security upon the review, evaluation, and recommendation of the relevant government agency. Second, the provision on restrictions on investments by foreign state-owned enterprises (SOE) prevents a foreign SOE from owning capital stock in a public utility or critical infrastructure,” NEDA said.

“Third, the provision on information security ensures entities engaged in the telecommunications business meet relevant ISO standards. Fourth, the reciprocity clause prevents foreign nationals from owning more than 50% of capital in critical infrastructure unless the country of such foreign nationals accords reciprocity to Philippine nationals. Lastly, the performance audit provision mandates the conduct of an independent evaluation to monitor a firm’s cost and quality of services to the public,” it added. — Revin Mikhael D. Ochave

PHL travel industry woos Japan with sales pitch focused on safety

REUTERS

THE Department of Tourism (DoT) said it has pitched the Philippines to the Japanese travel market as a safe destination, following the sustained decline of coronavirus cases here.

In a statement on Tuesday, the DoT said a Philippine delegation led by Secretary Bernadette Romulo-Puyat was recently in Japan to confer with Japanese government and industry counterparts.

Japan was the fourth-largest source of visitors to the Philippines before the pandemic, the DoT said. In 2019, the Philippines tallied 682,788 visitors from Japan.

As of March 20, some 2,125 Japanese visitors have entered the country following the reopening of borders on Feb. 10.

During the visit, Ms. Romulo-Puyat met with Japanese travel agents, tour operators, tourism organizations, English studies operators, economic federations, and media in Tokyo, Nagoya, and Osaka.

“Some of the notable participants included STWorld; Japan Association of Travel Agents; JTB Corp.; Japan Travel and Tourism Association; Hankyu Travel International Co., Ltd.; Kansai Economic Federation; and the Japan Philippine Tourism Council,” the DoT said.

Ms. Puyat also met with Japan’s Ministry of Land, Infrastructure, Transport, and Tourism to discuss resuming two-way travel which had been disrupted by the pandemic.

Japan is currently admitting only limited categories of foreign visitors, like students and business travelers.

Ms. Puyat said the Philippines is offering vaccine booster services at major destinations, which would allow Japanese visitors to return to Japan without undergoing quarantine.

“Like other tourism ministries, the Philippines’ DoT (is exhausting) all possible efforts to revive the industry, primarily to restore jobs and rebuild revenue streams. Now, we are glad to see the fruits of our labor after nearly two years of preparations to push for the recovery of the sector,” Ms. Puyat said.

Ms. Puyat said the Philippines became the first country in Southeast Asia to implement a no-quarantine, no-testing regime to arrivals, simplifying entry procedures.

“We are aware that the pandemic is still here and health should always be the priority. We strive to balance public safety and economic recovery by crafting policies that safeguard our citizens’ well-being (while reviving) the tourism sector,” Ms. Puyat said. 

More foreign visitors are set to enter the Philippines on April 1 after the Inter-Agency Task Force for the Management of Emerging Infectious Diseases removed the arrival quota for unvaccinated passengers at all ports of entry. — Revin Mikhael D. Ochave

PHL supports India inclusion in RCEP bloc

REUTERS

THE Philippines is supporting the admission of India into the Regional Comprehensive Economic Partnership (RCEP) trade bloc, which New Delhi withdrew from in 2019, with the Department of Trade and Industry saying that the bloc could benefit from having another large market as a member.

Trade Assistant Secretary Allan B. Gepty said in a webinar on Monday that encouraging India to re-enter RCEP will boost the economies belonging to the trade bloc.

“With the size of India, contributing around 1.3 billion people, then that would really make RCEP unquestionably as the world’s largest trading bloc. And in terms of comparative advantage noting that all economic activities have now gravitated towards India, that will really strengthen not just the economic integration here in the region, but the capability of the economic bloc to influence and shape rules of international trade,” Mr. Gepty said.

“RCEP parties would also benefit from the inclusion of India in terms of enhanced market access, increased participation in regional supply chains, and even accelerated economic growth in the region,” he added.

India backed out of RCEP negotiations in November 2019, amid concerns it will need to open its market to cheap Chinese imports following the gradual removal of tariffs and the effect on its farmers and workers.

RCEP is a trade agreement that started to come into force in 11 countries on Jan. 1. The trade bloc members are Australia, China, Japan, South Korea, New Zealand and the 10 members of the Association of Southeast Asian Nations.

According to Mr. Gepty, the re-entry of India will help balance the interests of major economies in RCEP.

“Given the size of the Indian economy, I would say that its participation in RCEP will also contribute in the balancing of interests and also power within the free trade area,” he said, referring to the other outsized economy within the bloc, China.  

“I don’t think that we can embrace inward policies at this time. We have to embrace globalization. We can only enhance the rules and take advantage of the opportunities that it brings,” he added.

The Philippines has yet to join RCEP as the Senate was unable to give its concurrence before adjourning on Feb. 3 for the election break. President Rodrigo R. Duterte signed the RCEP deal on Sept. 2. — Revin Mikhael D. Ochave 

DoE advises gov’t agencies to save power ahead of polls

PHILSTAR FILE PHOTO

THE Department of Energy (DoE) said on Tuesday that it issued an advisory to government agencies to conserve energy due to the tight oil market and ahead of the May elections.

The advisory calls for the mandatory implementation of energy efficiency and conservation (EE&C) programs.

“We issued this advisory to highlight the role of (EE&C) in ensuring the sufficiency of petroleum products supply amid the Russia-Ukraine crisis,” Energy Secretary Alfonso G. Cusi said.

The DoE also called on agencies to comply with the guidelines of the Government Energy Management Program (GEMP). GEMP sets a 10% reduction target for government agencies’ power and fuel consumption.

The DoE said more efficient energy use will help ensure the smooth running of the May 9 elections.

In January, the DoE raised the possibility of possible rotating outages on the Luzon grid in the two weeks after the elections.

“According to projections of the DoE-Energy Utilization Management Bureau, the successful implementation of these measures (will help) reduce electricity demand on the Luzon grid by up to 24 megawatts,” it said in a statement.

Meanwhile, an alliance of energy efficiency companies said the government must also accelerate deployment of energy efficiency projects from the private sector.

“It is good that the National Government through DoE believe that energy efficiency and conservation should help mitigate the impacts of rising fuel prices, which affect all end-use sectors directly consuming fuel products, and partially grid and self-use generation of electricity,” Philippine Energy Efficiency Alliance (PE2) President Alexander D. Ablaza said in a Viber message.

He added that “what the country needs right now is to accelerate timelines for energy efficiency deployment.”

“(The government should) kick-start energy service company (ESCO) performance contracting and third-party project investments by reclassifying all EE projects, whether simple, complex or innovative/strategic, as Tier III domestic market activities under the (Strategic Investment Priority Plan) framework,” he said.

In February, the Board of Investments classified strategic energy efficiency (EE) projects as “critical to the structural transformation of the economy,” eligible for the longest income tax holidays on offer. PE2 is calling for the inclusion of non-strategic projects in this category.

PE2 also proposes that authorities “accelerate and aggressively grow GEMP by enabling ESCO performance contracting and third-party project investments in EE projects hosted by government-owned facilities, by removing policy barriers under the Government Procurement and Reform Act, the Build-Operate-Transfer law, and the National Economic and Development Authority’s joint venture guidelines.” — Marielle C. Lucenio

PEZA seeks Comelec exemption from election-period ban on transport of industrial chemicals

THE Philippine Economic Zone Authority (PEZA) is asking the Commission on Elections (Comelec) to certify as a permitted activity the transport of industrial chemicals during the election period. 

PEZA Director General Charito B. Plaza said in a statement on Tuesday PEZA has been pushing for the issuance of the Certificate of Authority to Transport (CA-TT) by the Comelec to avoid the disruption and shutdown of the operations of manufacturing companies in economic zones.

The certification will permit the transport of regulated chemicals and raw materials covered by the election ban.

“Currently, there are nine PEZA-registered enterprises awaiting the approval of their permit applications, two of which have already shut down since the last week of February. Another two companies (had) used up their chemical supplies on the first week of March,” PEZA said.  

According to Ms. Plaza, PEZA is awaiting the release of the CA-TT permits for the affected locators within its ecozones.

“These concerns have been (conveyed) to Comelec and now, we are waiting for their release of the CA-TT permit,” Ms. Plaza said.  

PEZA said manufacturing companies use chemicals such as sulfur powder, nitric acid, hydrogen peroxide, and potassium permanganate. These chemicals are regulated by the Philippine National Police-Firearms and Explosives Office (PNP-FEO).

“While the use, importation, transport, or manufacture of these chemicals are covered by PNP-FEO permits, the Comelec issues a resolution every election period requiring duplicate permits through the Committee on Ban on Firearms and Security Concerns (CBFSC),” PEZA said.

On March 16, Ms. Plaza met with Comelec Chairman Saidamen B. Pangarungan, asking for assistance in securing the exemption of PEZA-registered enterprises from the election ban.

She added that PEZA also asked the Comelec for the disbursement of public funds for public works and infrastructure projects in government ecozones which had been procured by public bidding during the election period.

“Based on PNP-FEO records, manufacturers using regulated chemicals only form a small fraction of permit applicants during the election period compared to the gun or ammunition applications,” Ms. Plaza said.

“We are also working with the Department of Trade and Industry and the Anti-Red Tape Authority to support our appeal to Comelec to hasten the release of CA-TT permit,” she added. — Revin Mikhael D. Ochave

PhilRice to distribute 1.8M bags of seed in 42 provinces

PHILSTAR

THE Philippine Rice Research Institute (PhilRice) said it is set to distribute 1.8 million bags of certified seed to more than 740,000 farmers in 42 provinces for wet-season planting.

The distribution will be conducted between March 16 and Sept. 15. Planting is estimated to take place on at least 830,000 hectares.

Beneficiaries are eligible for one 20-kilogram sack of seed for every half hectare tilled.

The participating provinces include Ifugao, Kalinga, Ilocos Sur, La Union, Nueva Vizcaya, Quirino, Aurora, Bataan, Bulacan, Pampanga, Zambales, Cavite, Laguna, Quezon, Albay, Masbate, Sorsogon, Aklan, Antique, Capiz, Negros Occidental, Bohol, Negros Oriental, Biliran, Western Samar, Southern Leyte, Zamboanga del Sur, and Zamboanga Sibugay.

“This is our sixth season of implementation. Through a series of surveys, we found that there were gradual increases in the yield of our target provinces. While this cannot be credited solely to the program, we recognize that the certified seed greatly contributed,” PhilRice Program Management Office Director Flordeliza H. Bordey said in a statement.

Between 2019 and 2022, PhilRice distributed around 8.62 million bags of seed to more than 1 million farmers across five cropping seasons.

The distribution is supported by the Rice Competitiveness Enhancement Fund (RCEF) Seed Program. RCEF is a component of Republic Act No. 11203 or the Rice Tariffication Law, which sets aside P10 billion from rice import tariff collections every year to upgrade the competitiveness of rice farmers.

Farmers must be enrolled in the Registry System for Basic Sectors in Agriculture to be eligible for seed distribution. — Luisa Maria Jacinta C. Jocson

DAP removed from roster of GOCCs

DEVELOPMENT ACADEMY OF THE PHILIPPINES FB PAGE

THE Development Academy of the Philippines (DAP) has been excluded from the list of government-owned or -controlled corporations (GOCCs) subject to the rules of Republic Act (RA) 10149.

The Governance Commission for GOCCs said RA 10149, or the GOCC Governance Act of 2011, excludes state universities and colleges from its jurisdiction.

The DAP, as a higher education institution, should be considered a state university or college and is not covered under the law, the commission said in Memorandum Order 2022-04 published on Tuesday.

The commission oversees all GOCCs, government financial institutions, and government corporate entities. It has no jurisdiction over the central bank, cooperatives, local water districts, economic zone authorities and research institutions.

The DAP is included in the Commission on Higher Education’s list of schools authorized to offer undergraduate and graduate courses.

The academy offers courses and training sessions, and runs a graduate school in public and development management.

The exclusion of the academy can be reevaluated if there are any changes to the circumstances of the institution, the Governance Commission for GOCCs said. — Jenina P. Ibañez

Biden warns of possible Russian cyberattacks as sanctions bite

REUTERS

PRESIDENT Joseph R. Biden warned Monday about new indications of possible Russian cyberattacks, pumping up the volume on weeks of growing concern about a possible Kremlin-ordered response to crushing sanctions over the invasion of Ukraine.

Mr. Biden reiterated those warnings, prompted by what he called “evolving intelligence that the Russian government is exploring options for potential cyberattacks.” He urged the US private sector: “Harden your cyber defense immediately.”

While the White House provided few details about the nature of the threat, the president’s message underscored the continuing threat in cyberspace for US businesses and organizations. Cyberattacks have played a smaller role in Russia’s invasion of Ukraine than many experts predicted, supplanted by a grinding and bloody ground campaign. Anticipated retaliatory attacks against US businesses and organizations apparently haven’t occurred in the wake of strict sanctions, at least not on a major scale.

Anne Neuberger, the deputy national security adviser for cyber and emerging technology, said in a briefing that “there is no certainty” of an attack on the US but that Mr. Biden’s statement was a “call to action.”

“There are cyberattacks that occur every day,” she said, adding that Mr. Biden’s warning was intended to focus attention on “critical infrastructure.” She declined to specify which industries might be threatened.

Mr. Biden, in his statement, said “Critical infrastructure owners and operators must accelerate efforts to lock their digital doors.”

The president later stressed the danger to chief executives at a meeting of the Business Roundtable on Monday evening. “One of the tools he’s most likely to use, in my view and our view, is cyber, cyberattacks,” he said. “He has the capability. He hasn’t used it yet but it’s part of his playbook.”

And the National Security Agency, through a spokesperson, said that improving defenses against cyber threats now was crucial, and that the organization had publicly conveyed information about possible harmful operations with links to Russia.

The White House is limited in just how far it can protect critical infrastructure, which includes everything from dams and electric grids to water systems and food production. Much of it is operated by the private sector, regulatory oversight is patchy, and the level of cybersecurity preparedness varies greatly by industry and by company. Since a string of high-profile assaults last year — including a ransomware attack on Colonial Pipeline Co. that snarled fuel supplies along the East Coast in May — the Biden administration has pleaded with operators to bolster cyber defenses.

James Lewis, director of the strategic technologies program at the Center for Strategic and International Studies, said Russia was unlikely to “do something big” in order to avoid US retaliation, but that frustration over its slow military progress against Kyiv might prompt the Kremlin to turn to a smaller cyberattack or ransomware attack.

“This is a wake-up call to people,” he said. “The Russians have explored US critical infrastructure before in very extensive ways.”

Mr. Lewis added that private sector cyber defenses are better off than they were two years ago, but there’s plenty left to do.

“The number of companies that have not done the best practice is surprising and is much larger than you would have thought,” he said. “If you’re the Russians and you’re looking for one target to make a point, you’ve still got a lot to pick from.”

Federal agencies briefed more than 100 companies on the elevated threat of cyberattacks last week, Ms. Neuberger said. That included information about “preparatory activity,” including such things as scanning websites and hunting for vulnerabilities in systems.

Many of the steps the private sector can take are relatively simple, such as requiring two-factor authorization to access systems and patching their software, she said.

“We continue to see adversaries compromising systems that use known vulnerabilities for which there are patches. This is deeply troubling,” she said. “So we’re urging today companies to take the steps within your control — to act immediately to protect the services millions of Americans rely on.”

Federal officials didn’t outline specific new targets, imminent threats or defense strategies when briefing energy companies and other industry stakeholders during at least two sessions last week, according to a participant who asked not to be named because of the sensitivity of the private meetings. Instead, officials underscored the ongoing need for vigilance amid heightened concern that Russia could launch cyberattacks on critical infrastructure if it felt cornered.

Federal officials had already stepped up communication with critical infrastructure operators since Russian armed forces amassed on the borders of Ukraine. The Electricity Subsector Coordinating Council, which represents all segments of the electric power industry, pointed out ongoing information sharing and collaboration with the federal government to ensure “a vigilant and secure posture.”

The oil and gas industry also has been in regular contact with federal officials, said Suzanne Lemieux, director of operations security and emergency response at the American Petroleum Institute. “Companies are also utilizing their own networks, resources and partnerships to posture themselves to best defend against any cyber threats,” she said in an emailed statement.

Steven Silberstein, chief executive officer of the Financial Services Information Sharing and Analysis Center, known as FS-ISAC, which shares cyber intelligence among financial institutions around the world, called the cybersecurity measures outlined by the White House on Monday “critical baseline practices” that should be implemented at all times. FS-ISAC and the financial services industry “remain vigilant to all cyber threats and anomalous activity.”

“The sector continues to share cyber threat intelligence as well as cyber resilience best practices,” he said in a statement.

Russian hacking presents a two-pronged problem for the US and its allies. Hackers working for Russian intelligence are considered among the world’s most sophisticated, and cybersecurity experts have long warned about their potential for disruptive attacks on critical industries.

RANSOMWARE
In its annual report of threats to US national security, released earlier this month, the Office of the Director of National Intelligence wrote, “Russia is particularly focused on improving its ability to target critical infrastructure, including underwater cables and industrial control systems, in the United States as well as in allied and partner countries, because compromising such infrastructure improves and demonstrates its ability to damage infrastructure during a crisis.”

In addition, Russia has been accused of harboring criminal gangs that have in recent years unleashed ransomware attacks on businesses, schools, hospitals and other organizations. Researchers at the cryptocurrency-tracking firm Chainalysis found that three quarters of global ransomware revenue went to Russia-linked hackers, earning them $400 million in cryptocurrency from those attacks in 2021 alone.

The Swedish cyber firm Truesec Group recently warned that the Kremlin, as it becomes increasingly isolated from the rest of the world, could call on its criminal hackers to use their skills on behalf of the state.

Russia’s ground war against Ukraine hasn’t gone as the Kremlin expected, with Ukrainian forces mounting a stout defense and retaining control of key cities after three weeks of fighting, including the capital, Kyiv. The Kremlin’s cyberattacks have similarly struggled to successfully target Ukrainian infrastructure since the outset of the war, according to government officials.

“We’re not surprised to learn Russia is exploring cyberattacks against the US in light of the serious pressure the county is now facing,” said John Hultquist, vice president of intelligence analysis at the cybersecurity firm Mandiant, Inc., in a statement. “Russia is probably looking to aggressively respond in a manner that won’t lead to a war with the US, and cyberattacks are a means for them to exact costs without crossing a major red line.”

Robert Lee, the chief executive officer of Dragos, Inc., an industrial control cybersecurity firm, said the warning by the White House didn’t have much actionable information for cybersecurity professionals, but that the announcement itself was significant.

“Cybersecurity personnel are not necessarily the core audience,” Mr. Lee said on Twitter. “I’m not sure they had many better options than to publish what they did. “

“This isn’t a time for you to shrug and use the lack of details from the government as a reason to not have a plan.” — Bloomberg

China Eastern plane’s nosedive from 29,000 feet baffles crash specialists

A CHINA EASTERN AIRLINES aircraft is seen at the Beijing Capital International Airport in Beijing, China, July 22, 2020. — REUTERS

THE CHINA Eastern Airlines Corp. jet was flying a normal route to Guangzhou when it suddenly nosed over at cruise altitude and dove.

That’s about all that is known for certain about the unusual crash that feared killed all 132 people aboard the aircraft Monday in China’s worst commercial aviation accident in more than a decade.

While there have been a handful of crashes in which an airliner plunged from cruising altitude, few, if any, fit the extreme profile of the Boeing Co. 737-800 as it pointed steeply toward the ground, according to veteran crash investigators and previous accident reports. 

“It’s an odd profile,” said John Cox, an aviation safety consultant and former 737 pilot. “It’s hard to get the airplane to do this.”

As investigators search for the plane’s two crash-proof recorders and begin poring over clues, they will be trying to determine why the jet made such an abrupt and severe dive, which sets it apart from earlier accidents. They will be looking at the weather the plane encountered, whether the pilots made any distress calls, any hints in the wreckage of possible malfunctions and detailed profiles of the crew.

Flight MU5735 was at about 29,000 feet (8,839.2 meters) altitude roughly 160.93 kilometers from its destination — about the point at which the pilots would begin descending to land — when it started plunging at a far greater rate than normal.

Instead of gradually dropping by a few thousand feet per minute — which produces a barely detectable sensation for passengers — it began falling at more than 30,000 feet per minute within seconds, according to tracking data logged by Flightradar24.

Overall, it plunged almost 26,000 feet in the span of roughly 1 minute, 35 seconds, the data track showed.

The plane’s dive appeared to have halted for about 10 seconds and it climbed briefly, adding an unusual twist to the scenario. But the Flightradar24 track, which is based on radio transmissions from the plane, then showed it resuming a steep plunge. 

“It’s very odd,” said Jeff Guzzetti, the former accident investigation chief for US Federal Aviation Administration.

While cautioning that the Flightradar24 data is preliminary, Mr. Guzzetti and Mr. Cox said the relatively straight track taken by the jet and the fact that its transponders were still broadcasting suggests that it didn’t break up in flight, as has been seen in some terrorist bombings.

A surveillance video appearing to capture the plane in its final moments showed it in a steep dive toward the ground. Chinese media outlet The Paper said it had verified that the video was shot by a mining company near where the jet impacted, but its authenticity couldn’t be independently verified.

There are precedents in which airliners suddenly began dropping from cruise altitude, but most of them have important differences, investigators said. 

For example, Air France Flight 447, which went down in the Atlantic Ocean on June 1, 2009, fell much slower and more erratically after speed sensors iced up and pilots became confused, according to France’s Bureau of Enquiry and Analysis for Civil Aviation Safety. All 228 people aboard the Airbus SE A330 died.

Though it went down from a much lower altitude, an Atlas Air Worldwide Holdings, Inc. cargo jet dove suddenly into a marsh near Houston on Feb. 23, 2019. In that case, the copilot became disoriented and pointed the nose toward the ground, the US National Transportation Safety Board found. Its descent occurred over a much shorter period of time and it wasn’t falling as fast the China Eastern plane.

It’s far too early to draw conclusions on what led to the China Eastern crash, said Benjamin Berman, a former NTSB investigator who also flew 737s.

It’s possible to come up with many scenarios for some type of malfunction, pilot miscues or some combination that led to the plunge, Mr. Berman said.

But none of them seem very likely. He echoed what Mr. Cox and Mr. Guzzetti said: The 737-800, like other jetliners, is designed so that it won’t normally dive at steep angles.

That means it would likely take an extreme effort by a pilot or a highly unusual malfunction, he said.

Many things can cause at least the start of a dive — from a pilot suffering a heart attack and slumping onto the control column to a failure of the motor used to help raise and lower the nose. But they would tend to be more short-lived or there are easy ways for pilots to counteract such failures, he said.

“You need something to hold the nose down,” Mr. Berman said.  Bloomberg

Thailand unveils relief measures to counter rising energy prices

THAILAND will freeze retail diesel prices and subsidize cooking gas prices for the low-income groups, part of a raft of measures unveiled to provide relief to consumers hit hard by soaring energy prices.

Retail diesel prices will be capped at 30 baht ($0.9) a liter till the end of April, Prime Minister Prayuth Chan-Ocha told reporters after a cabinet meeting in Bangkok on Tuesday. Beyond April, the government will only subsidize 50% of any increase in prices as the Southeast Asian nation is facing a high fiscal burden, he said.

Thailand, a net oil importer, is stepping up efforts to shield the nation’s low-income groups from the impact of the highest inflation in 13 years as the Russian war in Ukraine pushes up energy prices. The government will take necessary steps to help all sections of the society and ensure the nation emerges from the crisis without anyone being left behind, Mr. Prayuth said, adding economic recovery efforts will focus on boosting trade and investment and tourism rebound.

“We are now dealing with health and war issues. It’s a double whammy,” Mr. Prayuth said. “The government is working hard to help as many people as possible so that we survive this twin crisis.”

Mr. Prayuth’s government has pledged to boost state oil reserves, slashed excise duty on diesel and lowered the bio-fuel blending requirements temporarily to provide relief to consumers and businesses, still reeling from the pandemic. The consumer price index rose by 5.3% in February, the most since Sept. 2008, sending the core inflation reading to 1.8%. That’s well above the Bank of Thailand’s inflation target range of 1% to 3%.

The cabinet also ordered government agencies to find ways to help farmers who are hit by rising costs of fertilizers and animal feed ahead of the new planting season, Prayuth said. The foreign ministry will coordinate efforts to secure fertilizer and other supplies with other countries, he said.

Other measures unveiled to cushion the blow from rising energy prices during May-July include:

• Increasing cash assistance for cooking gas purchase to 100 baht a month from 45 baht for 3.6 million welfare card holders

• 5,500 street hawkers holding welfare cards to get 100 baht each a month as cooking gas price discount

• 250 baht monthly oil subsidy for 157,000 registered motorcycle taxis

• Maintaining retail price for natural gas for vehicles at 15.59 baht a kilogram

• Lower electricity charges during May-August period for consumers not using more than 300 units a month

• Using state oil fund to partially subsidize rising cooking gas prices

• Lowering contribution under the social security system for both employers and workers to 1% from 5%

• Approves plan to restructure 9.3 billion baht debt of 50,621 farmers

• Clears 15.85 billion baht budget to help provide guarantee for soft loans for small and medium enterprises. — Bloomberg

Senator cites irony of Marcos Jr. endorsement

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THE CHAIRMAN of a faction of the ruling political party on Tuesday cited the irony of a rival group’s endorsement of the son and namesake of the late dictator Ferdinand E. Marcos for president, noting that it was set up in the 1980s to fight the dictatorship.

“They have manifested that they are total strangers to PDP-Laban,” Senator Aquilino “Koko” L. Pimentel III, who heads the rival faction that includes Senator and boxing champion Emmanuel “Manny” D. Pacquiao, told reporters in a Viber message.

“They don’t even acknowledge that PDP-Laban was established to oppose the Marcos dictatorship,” he added.

The faction that endorsed former Senator Ferdinand “Bongbong” R. Marcos, Jr.’s presidential run is headed by Energy Secretary Alfonso G. Cusi. President Duterte also supports the group.

The presidential palace did not say if Mr. Duterte had also endorsed the candidacy of Mr. Marcos.

“This is clearly the decision of the party, but it is not clear if this is what President Duterte also wants,” his spokesman Jose Ruperto Martín M. Andanar told an online news briefing in Filipino.

The president earlier said he would stay neutral in the presidential race and would not endorse his replacement.

Mr. Pacquiao, who is running for president, told PDP-Laban members to ignore the endorsement. 

“Cusi may have forgotten the PDP-Laban was formed against the Marcos regime,” he said in a statement. “Maybe he just forgot. All PDP members, let’s not follow Cusi,” he said in Filipino, adding that the move was a “slap in the face” of party members.

In a statement, Benhur C. Abalos, the national campaign manager of Mr. Marcos, said they were grateful and humbled by the party endorsement.

“The support for the BBM-Sara Uniteam solidifies the union of the country’s major political parties and further bolsters our call for national unity,” he said, referring to the initials for Bongbong Marcos. “Rest assured that we will carry on with our shared thrust for unity for sustainability of socioeconomic development and national progress.”

The Cusi faction in a resolution on Monday night said Mr. Marcos’s platform was “most aligned with the development program” of Mr. Duterte. “He is the candidate whose vision of governance is most aligned with PDP-Laban’s 11-point agenda.”

The group had also endorsed the candidacy of Davao City Mayor and presidential daughter Sara Duterte-Carpio, his running mate, for vice-president.

The Commission on Elections earlier kept a “temporary accommodation” policy on the two factions, with its en banc not having decided on which group should represent PDP-Laban.

Comelec spokesman James B. Jimenez said they had allowed candidates from both groups to use the party name on their printed ballots.

Mr. Duterte had yet to endorse his preferred successor, his spokesman said last week after Eastern Samar Governor Ben P. Evardone, PDP-Laban Vice President for the Visayas, said he had received presidential blessing to endorse the candidacy of Vice-President Maria Leonor “Leni” G. Robredo.

The president won’t support anyone in the presidential race “unless there is a compelling reason,” Mr. Andanar said, adding that the governor had endorsed Ms. Robredo in his personal capacity.

Mr. Evardone on Monday last week endorsed Ms. Robredo, citing the qualifications set by Mr. Duterte himself.

Ms. Robredo would welcome Mr. Duterte’s endorsement provided that it’s not based on political favors, her spokesman Ibarra M. Gutierrez III said.

Mr. Duterte had said the next president should be a lawyer who is compassionate and decisive. Ms. Robredo and Jose Montemayor, Jr. are the only lawyers among the 10 presidential candidates for the May 9 elections.

Mr. Evardone said the President’s remarks on the traits of his successor was “a virtual endorsement” of Ms. Robredo.

The ruling PDP-Laban has been divided by in-fighting, with two factions claiming leadership over the party. Mr. Pacquiao, who is running for president, claims to be the rightful party president.

He was ousted last year by the faction led by Mr. Cusi.

Mr. Duterte last month said he would not endorse the presidential bid of Mr. Marcos even if he’s the running mate of his daughter Davao City Mayor Sara Duterte-Carpio.

The tough-talking leader, who canceled his vice-presidential bid last year, also said he would not endorse any presidential candidate.

Also on Tuesday, Election Commissioner Marlon S. Casquejo said vote-counting machines to be used for the elections would be free from hacking and manipulation.

“If we relate this to the hacking incident, our vote-counting machine is a standalone system at the time of voting,” he said at an event demonstrating the automated election system streamed live on Facebook. “There is no way that anyone using any device or has hacking knowledge can insert any result in the vote-counting machines.”  

Mr. Casquejo said the machines would send data to Comelec servers in seconds, making hacking impossible.

Local source code reviewers, election watchdog representatives and journalists watched the demonstration.

Smartmatic SGO Group, the software contractor for this year’s elections, had experienced a “very serious” data breach that could compromise this year’s elections, Senator Imee R. Marcos, Marcos, Jr.’s sister, told a news briefing last week.

The Manila Bulletin first reported on the hacking, which led to a government investigation. Sensitive data voter information might have been compromised after a group hacked the servers of Comelec, downloading more than 60 gigabytes of data, it said.

Senate President Vicente C. Sotto III had said that the Senate would collaborate with election and technical experts to investigate the security breaches.

Meanwhile, Comelec has released guidelines on contributions made by local corporations to political and partisan activities.

Donations by domestic companies must not exceed 5% of their taxable income, according to a copy of a Comelec resolution dated March.

Foreign corporations, public or private financial institutions and civil service officials are barred from giving donations. All legal contributions must be reported to Comelec. — Alyssa Nicole O. Tan and John Victor D. Ordoñez