‘Build, Build, Build’ bill for creative industries filed in House

December 19, 2021 | 11:00 pm

NCAA-Manila-Metro-Politan-Theater — PHILSTAR

A BILL has been filed in the House of Representatives calling for long-term investment in the creative industries, which the measure’s author called resilient during downturns and “crisis-proof,” with the objective of making it account for a larger proportion of the economy.

Representative Jose Ma. Clemente S. Salceda of the second district of Albay said his House Bill No. 10613, or the proposed Build, Build, Build for Creative Industries Act, seeks to emulate South Korean investment in its creative industries after the 1997 Asian Financial Crisis to diversify its economy, which had been dominated by manufacturing.

“Culture is resilient. It’s crisis-proof,” Mr. Salceda said.

He added that when a part of the cultural landscape, like tourism, enters a downturn, other components like art and digital content can emerge.

He said the European creative industry accounts for 4.4% of its Gross Domestic Product (GDP) while South Korea’s was 2% of the economy, with more than half of its inbound tourism using creative industries as a draw. The bill envisions a 4-7% share of GDP for the Philippines’ own industry.

The Creative Economy Council of the Philippines estimates that the creative industry lost 90% of its revenue during the pandemic, which would make it one of the hardest-hit sectors of the economy.

Mr. Salceda noted that the Popular Culture Industry office of South Korea’s Ministry of Culture was dedicated to promoting pop music, fashion, mass entertainment, comic books, cartoons and other major products.

The bill proposes to create a National Creative Industries Investment Program to drive public support for the creative industry, as well as an audit of the creative industry infrastructure. He cited the restoration of the Metropolitan Theater (Met) in Manila as an example, and touted it as a venue for avant-garde productions. — Jaspearl Emerald G. Tan

The digitalization of corporate compliance

December 19, 2021 | 10:59 pm

First of two parts

The COVID-19 pandemic has pushed government agencies to kick-start, if not step up, their digitalization programs to deliver essential services while managing health risks.

For the Securities and Exchange Commission (SEC), the mandate to digitalize and adopt technology in the ways we work came with the effectivity of the Revised Corporation Code (RCC) in early 2019.

The RCC replaced the almost 40-year-old Batas Pambansa 68 or the old Corporation Code. Even with the rise of digital technology at the turn of the century, it has taken nearly 20 years for the conduct of meetings through remote communication, the submission of corporate documents bearing digital signatures, and filing forms and documents through electronic mail or through a dedicated online portal to become part of the mainstream corporate compliance process.

The RCC paved the way but it was COVID-19 which truly accelerated digital transformation. From the incorporation of new entities and filing of applications such as the increase in the authorized capital stock to cashless payment systems and the launch of the Online Submission Tool, the SEC has taken great strides in not just promoting the ease of doing business but also efficiently providing government services, consistent with Republic Act 11032.

The SEC has gone on record to emphasize its commitment to staying the course on its digital transformation and technology modernization roadmap, with the end goal of being able to serve its stakeholders from the safety of their homes and workplaces. As the gateway to doing business in the Philippines, the SEC has said that it must continuously innovate and leverage information and communications technology (ICT) to remain “service-focused and interoperable.”

This article focuses on the five ways in which the SEC has harnessed the power of technology in the areas of company registration; online reports submission; lodging of applications and requests; compliance requirements; and payments — all of which are targeted to minimize personal interactions while the virus remains a threat.

Even early into the implementation of these projects, it is evident that these innovations have improved regulatory efficiency and voluntary corporate compliance of registrants. Stakeholders have the opportunity to focus on their companies’ operations more than complying with tedious requirements.

COMPANY REGISTRATION
The SEC launched the eSPARC or the Electronic Simplified Processing of Application for Registration of Company on April 19, replacing the Company Registration System (CRS), the old online platform. As of last published official count, the SEC has processed nearly 27,000 virtual business registration applications.

Before the pandemic, the SEC had tested the waters of web-based registration and licensing with the CRS. While the system eliminated the cumbersome procedure of manually filling up forms, the incorporation process could still not proceed without the submission of the hard copies of documents for review of SEC examiners.

With eSPARC, the incorporation process is now fully automated and needs no intervention from SEC processors at any stage, from the name verification on the proposed corporate name to the issuance of the digital Certificate of Incorporation. Those who have tried the system have found that its use significantly enhances the company registration experience.

eSPARC was initially available only for the registration of One Person Corporations but this has since been expanded to include all types of domestic corporation regardless of the number of incorporators. Applications for partnerships and foreign corporations may now also be lodged using eSPARC. A subsystem, the One day Submission and E-registration of Companies (OneSEC), even allows for the registration of domestic stock corporations in as little as one day.

In his latest report to the Department of Finance, SEC chairman Emilio Benito Aquino said the fastest time recorded for eSPARC processing after the payment of the registration fee is one minute and 14 seconds, while the longest time was two hours and 37 minutes.

eSPARC is fairly easy to navigate provided all information and documents are complete. Many of the fields are pre-filled and the required information need only to be supplied. Among the issues that a registrant may encounter and could delay the process include failure to reserve a preferred name that is not distinguishable from a name already reserved or registered under Sec. 17 of the RCC. Under this scenario, the applicant has the option to either appeal the name rejection or apply for a different name.

Another possible cause of delay, particularly in the issuance of the final certificate, is the submission of documents, which vary depending on the company type and the review of the SEC processor.

However, if all the requirements lodged online are deemed in order, the SEC can issue the digital incorporation certificate, with the original to be released upon the additional presentation of the proof of payment of the assessed registration fees and the submission of originally signed, authenticated, or notarized hard copies of the documentary requirements, as applicable. The submission may be done any time within one year from the date stated in the Interim Certificate of Incorporation.

Nevertheless, registrants must remain mindful of the documentation requirements. For instance, although the RCC has removed the subscribed and paid-up capital minimums under Sec. 13 of the old Corporation Code, capitalization requirements under special laws, such as the $200,000 minimum paid-in capital for foreign corporations under the Foreign Investments Act, as amended, must still be complied with. As such, there must be proof of inward remittance of the required capital by the foreign investor.

Consistent with its goal of easing doing business, the SEC also accepts registration of locally-executed Articles of Incorporation (AoI) that are accompanied by a Certificate of Authentication signed by all incorporators. The AoI and the Certificate of Authentication need not be notarized; however, documents executed outside the Philippines must still be consularized or contain the Apostille Certification to be recognized by government agencies including the SEC.

In the second part of this article, we will discuss the other digital transformation projects of the SEC that are positively impacting compliance and the processing of applications of registered corporations.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of EY or SGV & Co.

Cecille S. Visto is a Tax Senior Director and Senior Lead Manager of the Entity Compliance and Governance Services of SGV & Co.

Typhoon Odette aftermath: Death toll rises to over 80 amid grim devastation

December 19, 2021 | 10:53 pm

MEMBERS of the Philippine Coast Guard evacuate residents of a flood-risk area in Cagayan de Oro City in the southern island of Mindanao on Dec. 16 as typhoon Odette dumped heavy rains across several regions in the Philippines. — PCG

MORE THAN 80 people have been reported to have died as of Dec. 19 from typhoon Odette, with international name Rai, which left unprecedented damage in southern and central parts of the Philippines.

The highest death toll so far was in the island province of Bohol, where the governor confirmed as of Sunday noon at least 63 deaths in 33 of 48 towns.

The national disaster management agency, meanwhile, recorded another 26 casualties in other areas, which are still subject to validation. At least one person has been reported missing while three were injured.

A total of 706,634 persons were affected, including almost 490,000 who were forced to flee their homes as typhoon Odette brought heavy rains and winds moving at 195 kilometers per hour, according to the National Disaster Risk Reduction and Management Agency (NDRRMC).

Recovery and relief efforts by both government and the private sector are hampered by damaged infrastructure, including air and sea ports, as well as limited communication lines.

The NDRRMC has logged in almost 4,000 houses destroyed as of Dec. 19, but assessment reports trickling in from local governments indicate a much wider damage, especially in the island provinces such as Siargao and Dinagat in Mindanao, where the typhoon made its initial landfalls.

President Rodrigo R. Duterte visited several central areas on Saturday to personally assess the damage caused by Odette.

During his meeting with local officials of Surigao del Norte and Dinagat Islands, Mr. Duterte instructed Social Welfare Secretary Rolando Joselito D. Bautista, who has been appointed as crisis manager in the said areas, and NDRRMC Executive Director Ricardo B. Jalad to facilitate the delivery and transport of food and non-food items to affected areas.

He also ordered the officials to deliver tents and tarpaulins to affected areas within 24 hours and implement food-for-work and cash-for-work programs to aid typhoon victims.

“The President likewise directed the use of all government resources to ensure that the goods are delivered as soon as possible,” his spokesman Karlo Alexei B. Nograles said in a statement.

He said the Philippine Navy and the Philippine Coast Guard will send their boats and ships to augment the immediate delivery of needed supplies in Surigao del Norte and Dinagat Islands, adding that an ocean-going vessel manned by Philippine authorities will be sent to the said areas to act as floating hospital after the typhoon severely damaged health facilities.

The Department of Health has already committed to send medical supplies and augment health personnel in Dinagat Islands, Mr. Nograles said.

“The Armed Forces of the Philippines Eastern Mindanao Command likewise committed to send medical teams onboard the two Navy ships to augment the health personnel in Siargao and Dinagat Island.”

He said the Maritime Industry Authority will immediately assess the seaworthiness of vessels in Surigao del Norte and Dinagat Islands to add more mobility in the delivery of food and supplies to these areas.

In Southern Leyte, the President directed the Department of Agriculture to provide boats and seedlings to affected fisherfolk and farmers, the Palace official said.

The President also asked the National Housing Authority and the Department of Human Settlements and Urban Development to provide necessary assistance to affected families whose homes were either totally damaged or partially destroyed.

Mr. Nograles said the President also ordered the Department of Energy (DoE) to address power supply problems in areas hit by the typhoon and instructed the Information and Communications Technology department to “immediately augment mobile cell sites” to address communication problems.

The Department of Social Welfare and Development, meanwhile, has been directed to “ensure prompt and continuous distribution of relief goods to affected families.”

“As the whole government acts with dispatch to assist typhoon-affected areas and residents, we call on everyone to pray for those who perished, those who are still missing, and those who got injured for their swift recovery,” Mr. Nograles said. “Let us all extend kindness, generosity and compassion to our kababayans who are in need.”

Arlene “Kaka” J. Bag-Ao, governor of Dinagat Islands, earlier said in a communique that the devastation is “reminiscent if not worse” than when typhoon Haiyan, locally known as Yolanda, hit the province in 2013.

The supertyphoon, which is considered as the country’s worst storm on record, killed more than 7,000 people.

Typhoon Odette is the 15^th and considered as the most powerful typhoon to hit the Philippines this year.

The country is visited by about 20 typhoons yearly.

Scientists worldwide have warned that rising global temperatures caused by destructive activities are making typhoons more powerful.

Environmental group Greenpeace on Sunday renewed its call on the government to declare a national climate emergency so that measures that will address the impact of worsening weather patterns can be prioritized.

“The disaster brought up our collective trauma from previous typhoons such as Sendong and Yolanda, and reminded us that these extreme weather events are now a norm as the climate crisis worsens every year,” said Greenpeace Executive Director Yeb Saño in a statement. “These typhoons will get worse, more unpredictable, and more destructive should [our institutions] remain merely reactionary to the climate crisis.”

POWER SUPPLY
Meanwhile, the Energy department said on Sunday that it will see to it that power in areas affected by typhoon Odette will be restored before Christmas.

“We have to provide our consumers a merry Christmas,” DoE Power Industry Management Bureau Director Mario C. Marasigan said in a press conference.

Mr. Marasigan said they prioritized power restoration in health institutions and medical supply facilities

“Aside from that, we have to understand that to make Christmas happy, we have to operationalize our banks, automated teller machines (ATMs), our groceries, and department stores,” he added.

The National Grid Corporation of the Philippines (NGCP) also reported that it has partially energized some provinces affected by typhoon Odette, but the entire hard-hit Bohol is still without electricity.

“There is a lot of assessment ongoing in the Bohol area right now,” said NGCP Head of System Operations Reynaldo B. Abadilla in a press conference on Sunday.

NGCP said it has restored 12 69-kilovolt (kV) transmission lines in Visayas and Mindanao, giving partial power to Negros Occidental, Negros Oriental, Cebu, Leyte, and Samar.

Meanwhile, there are still 18 69kV transmission lines unavailable in Visayas and Mindanao, while 22 138kV lines that are affecting some parts of Cebu, Leyte, and Samar and Bohol are also still unavailable.

There are seven 230kV transmission lines that are also unavailable, according to the report.

“We have mobilized our line crews and is currently conducting ground patrols to inspect and assess the impact of the typhoon to our operations and facilities, and simultaneous restoration activities are being conducted on the areas already accessible,” NGCP said in a statement on Sunday.

The National Electrification Administration, for its part, said 73 electric cooperatives were affected with an estimated damage of P6.70 million.

Of the 73 electric cooperatives, 32 have resumed normal operations. — Marifi S. Jara, Kyle Aristophere T. Atienza, and Marielle C. Lucenio

PHL records lowest COVID daily tally since May 2020

December 19, 2021 | 10:52 pm

A MINOR, accompanied by an elderly relative, gets a coronavirus jab at a shopping mall in Metro Manila. — PHILIPPINE STAR/ MICHAEL VARCAS

THE PHILIPPINES on Sunday reported the lowest number of daily coronavirus infections in nearly 19 months after a number of laboratories failed to submit data on Dec. 17 as one of the world’s strongest typhoons this year devastated many parts of the country.

The country posted 203 cases on Monday — the lowest since May 23, 2020 when 180 cases were reported — bringing the total to 2.84 million.

The death toll hit 50,739 after 64 more patients died, while recoveries increased by 395 to 2.78 million, the Department of Health said in a bulletin.

There were 9,729 active cases, 485 of which did not show symptoms, 3,685 were mild, 3,379 were moderate, 1,800 were severe, and 380 were critical.

The agency said 92% of the reported cases occurred from Dec. 6 to 19.

The top regions with cases in the recent two weeks were Metro Manila with 48, Calabarzon with 37, and Western Visayas with 22.

DoH said 3% of the reported deaths occurred in December, 28% in November, 45% in October, 16% in September, 6% in August, and 2% in April.

The Health department said 22% of intensive care units in the Philippines were occupied, while the rate for Metro Manila was 23%.

It said two duplicates were removed from the tally, one of which was reclassified as recovery, while 62 recoveries were relisted as deaths.

It added that 179 patients had tested negative and were removed from the tally.

LABORATORIES
Sunday’s low case report was due to the suspension of the operations of four laboratories on Dec. 17 and failure of 41 laboratories to submit data because of typhoon Rai, locally known as Odette.

“Based on data in the last 14 days, the 45 (laboratories) contribute, on average, 15.4% of samples tested and 1.8% of positive individuals,” the Health department said.

Health experts have been urging the government to boost its virus containment measures as the country faces the threat of the highly mutated Omicron variant and a possible surge due to holiday gatherings.

The country’s second round of a nationwide mass vaccination campaign last week was affected by the typhoon as areas in the storm’s path had to cancel planned inoculation activities. — Kyle Aristophere T. Atienza

Gov’t orders price freeze on LPG, kerosene in areas under state of calamity

December 19, 2021 | 10:51 pm

THE ENERGY department has imposed a price freeze on household liquified petroleum gas (LPG) and kerosene in areas that have declared a state of calamity after typhoon Odette, with international name Rai, left extensive damage in parts of the Philippines.

As of Dec.18, five local government units have made the calamity declaration. These are: Jose Panganiban town in Camariñes Norte, Cebu province along with the independent city of Cebu, Bohol province, and Butuan City.

“Pursuant to the 17 Dec. 2021 declaration of a State of Calamity (SOC) in certain areas, the price freeze on household LPG and kerosene is now in effect. This means that for 15 days following the SOC, prices shall remain at the prevailing levels on the date of the declaration,” the Department of Energy said in a statement on Sunday.

Under the Price Act or Republic Act No. 7581, a price freeze is imposed on basic necessities in areas under a state of calamity, state of emergency, or similar situations.

“In anticipation of typhoon Odette’s impact in the Mindanao and Visayas regions, [we] had earlier called on all concerned downstream oil industry stakeholders to begin their monitoring activities and activate their respective disaster risk preparedness and response protocols,” the Energy department said.

This covers gasoline, diesel, jet fuel, and LPG.

The Department of Energy (DoE) reported that 159 downstream oil retail outlets in Visayas and Mindanao, including 20 in Palawan, were closed due to power outage, flooding, damage, and lack of manpower as of Saturday afternoon. Six bulk facilities were also non-operational.

Meanwhile, the department noted that they have not received a report on oil supply shortage as of Dec. 18, although local media reports in some areas showed consumers lining up in fuel stations.

Phoenix Petroleum Philippines, Inc. announced on Thursday that it will not impose a price hike this week in areas affected by typhoon Odette.

Last week, oil prices increased with kerosene up by P1.20 per liter, diesel by P1.35/L, and gasoline by P1.60/L. — Marielle C. Lucenio

Mactan-Cebu airport resumes operations

December 19, 2021 | 10:49 pm

THE MACTAN-CEBU International Airport (MCIA), the country’s second busiest gateway, resumed operations Sunday after incurring damage from typhoon Odette (international name: Rai).

MCIA Authority General Manager Julius Neri, Jr. said the airport will initially cater to domestic flights, while international flights will resume on Dec. 21.

“MCIA can only use Terminal 2 at the moment, for both domestic and international flights, due to the damages in Terminal 1 caused by the typhoon,” the Cebu provincial government reported.

Mr. Neri also said MCIA is prioritizing flights carrying relief goods to Cebu, one of the areas hit hardest by the typhoon.

The airport management also advised travelers to closely coordinate with their respective airlines on the adjusted flight schedules.

Coast Guard sends ship to typhoon-hit islands of Siargao, Dinagat

December 19, 2021 | 10:48 pm

THE airport in Surigao City was among the structures severely damaged by typhoon Odette. — PHILIPPINE COAST GUARD

1 of 2

THE PHILIPPINE Coast Guard deployed one of its vessels Sunday to the island province of Siargao, where typhoon Odette (international name: Rai) made its first landfall Thursday last week, to transport residents and tourists to mainland Mindanao.

“This afternoon, 19 Dec. 2021, expect BRP Sindangan (MRRV-4407) to Siargao Island to travel residents and tourists to reach Surigao City. It will carry out consecutive transport missions, until necessary,” the Coast Guard said.

The mission was ordered by Transportation Secretary Arthur P. Tugade following reports of stranded residents and tourists due to unavailability of commercial vessels.

The Coast Guard said most of the sea vessels that took shelter during the storm were still damaged.

“Most of these vessels are currently undergoing repairs. Others were washed onto shallow waters and are being salvaged so that these can resume operations,” it said in a statement in Filipino.

Similar operations are being readied for the Dinagat Islands province, where typhoon Odette made its second landfall.

Other Philippine Coast Guard ships have also been mobilized for the transport of relief goods and other materials needed for recovery work.

The Coast Guard said they are also coordinating with the major shipping companies for the possible deployment of vessels to help transport stranded passengers.

Dinagat Governor Arlene “Kaka” J. Bag-ao, in a post on her Facebook page, said all entry restrictions have been lifted as the province needs all the help it can get, but stressed the need to maintain minimum health protocols.

“If we will help, let us make sure that we will not put our loved ones in danger (from the coronavirus),” she wrote in Filipino. “If we survived the typhoon, we must also survive against the pandemic.”

She added, “our rules are suspended, but our health and safety standards must stay in place so we can protect our loved ones who already lost so much.”

Ms. Bag-ao said the provincial government has yet to reach all areas as some roads remain inaccessible. — MSJ

Roof off

December 19, 2021 | 10:47 pm

OdetteCebu — CEBU CITY PUBLIC INFORMATION OFFICE

MAYOR Michael L. Rama inspects the damage in one of the two buildings of the Cebu City Hall that were among the structures wrecked by typhoon Odette (international name: Rai) last week.

The first 365 days

December 19, 2021 | 10:20 pm

(Part 2)

As an input to the programs of the national candidates and their teams, a few economists and subject matter expert friends in the Foundation for Economic Freedom, the Management Association of the Philippines, the Makati Business Club, the Philippine Disaster Resiliency Foundation, and I developed a 10-point wish list for the first 365 days of the new administration. I am pleased to share this with readers, abbreviated a bit to fit column space.

(Points one to four of the 10-point wish list were tackled in Part 1 which can be found here: https://www.bworldonline.com/the-first-365-days/.)

5. ADDRESS THE COUNTRY’S ENERGY SECURITY

Address the country’s future Energy Security situation to ensure continued access to cleaner forms of energy, future exploration of offshore resources which do not place the country at political or national security risk, and the provision of affordable secure energy and power.

a. Background: Malampaya currently serves around 30% of Luzon’s power demand, however, the indigenous gas field has already exhibited resource decline beginning in 2021. With the expectation that the resource is good for another five to seven years, there is an urgent need to develop the “next Malampaya” to ensure the country’s energy security.

b. It is critical to secure private sector investment developing all forms of energy investments, with government guaranteeing a fair, transparent, and consistent selection process for granting service contracts. It is likewise critical to address geopolitical issues (i.e. enforcement of The Hague ruling) and firmly establish fiscal terms (i.e. review of PD 87) in seeking to expand oil and gas exploration in the West Philippine Sea.

c. Create a dynamic LNG (liquified natural gas) economy by investing in enabling infrastructure through PPP (private public partnerships).

d. Scale up renewables by setting aspirational goals. Enforce the upgrade of the national grid network through a thorough implementation of the transmission development plan and ensuring accountability.

e. Aggressively encourage greater electrification in the transportation sector by introducing better incentives for public utility and private electric vehicles, including incentivizing or supporting the construction of needed infrastructure (e.g. charging stations).

6. UPHOLD THE RULE OF LAW

Uphold the rule of law through increased transparency in government, successful prosecution of erring individuals, and restore and strengthen faith in our institutions.

a. Ensure the proper implementation of the intent and letter of Executive Order No. 2, s. 2016, which operationalizes the Constitutional provisions on the Filipino’s right to information, at least for the Executive Branch.

b. Aggressively pursue and swiftly decide on cases against officials and associates accused of corrupt practices (e.g. PhilHealth, Pharmally), with utmost adherence to the principles of justice and fairness, while on trial or under investigation. Commit to a clear policy that erring public officials will not just be merely “fired” from their government posts (and be placed in another agency) but will be disqualified from public office as the law provides, and prosecuted to the law’s fullest extent.

c. Restore and subsequently strengthen faith in our institutions, particularly those that directly interface with the public (Land Transportation Office, National Bureau of Investigation, Bureau of Internal Revenue, Philippine National Police, Metropolitan Manila Development Authority, etc.). As a significant and high impact start, correct negative perceptions against the Philippine National Police, considering the present administration’s drug war and persistent perceptions of corruption.

7. REVIVE THE PPP MODEL OF INFRA DEVELOPMENT

Revive the PPP model of infrastructure development to accelerate both physical and digital infrastructure investments.

a. Accept and process unsolicited PPP proposals, especially mature ones that the current administration was unable to evaluate and pursue, while a new pipeline of solicited projects is being developed. In addition, convert back to PPP, projects that were redirected for ODA (particularly Chinese ODA or official development assistance) and government procurement (e.g. new water sources for National Capital Region, regional airports, etc).

b. Consider major tweaks in PPP policy, including those that may require legislation, particularly on proper risk allocation (e.g., stringent Material Adverse Government Action [MAGA], which remain as an obstacle in pursuing PPP due to unacceptably high regulatory and political risks). Furthermore, be open to PPP solutions that go beyond what is provided in the BOT (build-operate-transfer) Law to address critical national and local needs in public health, digital transformation, and ease of doing business.

c. Declare and commit to the sanctity of contracts through good faith adherence to PPP contract terms and decisions of international arbitration tribunals (e.g. MWSS concession contracts, automatic adjustments in rates in toll roads). Apart from exceptional circumstances where the public interest is conclusively compromised, contracts executed by parties should be upheld in its entirety. Any concerns on contract terms should be discussed in a constructive manner, aimed at coming up with a fair agreement to all parties.

8. CRAFT INDUSTRY ROADMAPS IN 10 KEY SECTORS

Craft Industry Roadmaps in the 10 sectors with the most potential for massive job generation, such as tourism, BPO (business process outsourcing), agriculture, forestry, manufacturing, construction, responsible mining, MSMEs (micro, small and medium enterprises), among others.

a. Roadmap development will be led by the respective industry associations and co-created with the National Government and Academe.

b. To be developed roadmaps will feature assessments of our global competitiveness, international benchmarks, and persistent systemic challenges, while exploring and recommending solutions and opportunities to harness.

c. These roadmaps will mandate actionable, time-bound plans for the next five years, with a prioritized list of support required from the National Government.

9. INSTITUTIONALIZE LABOR FLEXIBILITY

Institutionalize labor flexibility both through executive action and through legislation for quick employment generation especially in depressed areas, through win-win solutions.

a. Establish Special Employment Zones (SEZs) in high unemployment areas. The chief features of these SEZs will be a suspension of the minimum wage and labor security regulations, while allowing for flexible wage rates. Legally mandated social security protections like social security payments will be kept in place.

b. Pass a revised Apprenticeship Law. The existing apprenticeship law is defective as it is applicable only for technical industries, and the coverage is only good for six months, which is not enough time for an employer to properly train an apprentice and subsequently decide whether to engage the apprentice as a full-time employee.

c. Amend the Labor Security Provisions in the Labor Code in exchange for Portability of Pensions. The current arrangement of requiring companies to permanently hire employees who have rendered six months of tenure has given rise to the ENDO (“end of contract”) phenomenon to the detriment of employees, while imposing restraints on employers in adjusting their staffing cases of undesirable employees. A win-win solution would be to allow for flexible employment arrangements, but supporting this by requiring companies to fully fund and allow portability of pensions that the employee had already accumulated to his next employer, rather than having it reset to zero when he or she changes jobs.

10. IMPROVE EASE OF DOING BUSINESS AND PUBLIC SERVICE DELIVERY

Improve the ease of doing business and delivery of public services through e-government and the National ID System.

a. Further digitalize government services to improve service delivery. Use the National ID as the basic platform for eGov services. For Businesses, a Philippine Business Number (PHBN) can be created as a form of “national ID for enterprises.”

b. Follow the principle of “one-time only data entry” and sharing of data across agencies so businesses do not need to keep submitting same data to different agencies. PHBN could address this issue.

c. Look at national government agencies that interface with a large constituency and digitalize their services (Department of Foreign Affairs, the Bureau of Internal Revenue, Securities and Exchange Commission, the National Bureau of Investigation, the Land Transportation Office); LGUs to be tackled differently (they should just plug in to an existing platform, rather than build their own).

d. Promote innovation by allowing private sector app developers to offer service subscriptions to national government agencies and LGUs and to earn a revenue share or transaction fees from their services. The aim is to steadily shift government’s digitalization paradigm from procuring hardware and creating applications from scratch to buying software-as-a-service/subscriptions.

Above are policies; implementation will only happen with strong, honest, Cabinet appointees. Our next leader’s most important task, by far, in his/her first 100 days in office will be to pick a first-class team equal to the most challenging circumstances facing our country, committed to the rule of law, and genuine servant leadership.

Romeo L. Bernardo was finance undersecretary during the Cory Aquino and Fidel Ramos Administrations. He is a Trustee/Director of the Foundation for Economic Freedom, Management Association of the Philippines and FINEX Foundation

The magic of the pink parol movement

December 19, 2021 | 10:20 pm

What started out as a dentist from Naga’s one-time order of pink parols (traditional star-shaped Christmas lanterns) for her own home has snowballed into an initiative with more than 5,000 pink parols sold to individual buyers or donated to urban poor communities, an energetic group of volunteers, and a good deal of funding for voters’ education sessions in marginalized communities.

Dr. Agnes Claros, who hails from Vice-President Leni Robredo’s province of Camarines Sur, initially ordered a few pink parols from a Naga supplier for her own home. When she posted a picture of the parols on her Facebook page, her friends and classmates expressed interest in them and demand started to grow.

She wasn’t expecting the pink parol initiative to turn into a fundraising effort, but buyers themselves suggested that she use the initiative to raise funds for voters’ education activities.

At this point, Dr. Claros’ group of Universidad de Sta. Isabel alumnae were planning to hold voters’ education sessions for VP Leni’s campaign in District 1 of Camariñes Sur. As they needed to raise funds for their collaterals, they decided that the proceeds from the pink parols would go to these sessions. The excess amount would be donated to the Alliance of Women for Action towards Reform (AWARE)’s Let Women Lead fundraising initiative for VP Leni’s campaign.

The volunteer team quickly started to grow as Dr. Claros invited her friends to help out. There was an overwhelming response to a friend’s Facebook post on the pink parol initiative, and 3,000 parols were delivered in a 32-foot truck from Naga to the official Leni headquarters along Katipunan in Quezon City.

Volunteerism started to grow even further. At the newly opened Leni-Kiko headquarters, people in the area took an interest in buying the parols on the spot. Some saw the truck full of parols from their condominium units and showed up to volunteer, offered to lend a truck to deliver parols to Bulacan for free, and bought food for the volunteers. People came all the way from La Union and Pampanga to purchase these parols, and were willing to wait for hours at the HQ to buy unclaimed parols.

The spirit of volunteerism was contagious, and the atmosphere was joyful and relaxed. VP Leni’s message of radical love was vibrant and alive in these volunteers.

Because of the overwhelming demand for parols after VP Leni mentioned them in one of her Facebook live streams, Dr. Claros’ team decided to open orders for a third batch. For this batch, the group acknowledged the need to expand beyond their own circle and gave buyers the option to donate parols to those in marginalized communities.

Dr. Claros’ hope is that this parol initiative goes beyond December and the Christmas season — for people to hang up their pink parols proudly until May, for all the things it and VP Leni’s candidacy symbolizes.

“There’s something magical about this pink parol,” she said.

When Dr. Claros’ team went to District 1 of Naga for voters’ education sessions, they felt that the pink parols unified them with those in the barangays.

The one-hour voters’ education sessions they conducted were particularly crucial in District 1 of Camariñes Sur because it was one of the three areas which Ferdinand Marcos, Jr. chose to pilot the recount of his votes during his 2016 electoral protest. Marcos, Jr. was confident that he would win in this area. True enough, when they went to the area, many people were Marcos supporters and did not accept their tarpaulins and collaterals.

“Wala silang social media, so sa tingin nila hindi sila included. We went there to make sure they know that we remember them and value them. Kailangan alam nila na kasama sila sa programa ni VP Leni. We work with teachers and tell them about the state of our nation and salient information in a very simplified form,” she said. “Sila rin, kasama sila sa crusada, at sinusubukan namin na baguhin ang pag-iisip nila tungkol sa pulitika at eleksyon. There was an overwhelming feeling of belonging and hope.”

(“They don’t have social media, so in their view, they are not included. We went there to make sure they know that we remember them and value them. They have to know that they are included in the programs of VP Leni. We work with teachers and tell them about the state of our nation and salient information in a very simplified form,” she said. “They are included in the crusade and we are trying to change their minds about politics and elections. There was an overwhelming feeling of belonging and hope.”)

Dr. Claros believes that this pink parol has created a beautiful movement. The voters’ education sessions in barangays have expanded beyond Camariñes Sur and will now spread to different municipalities in Metro Manila. Dr. Claros also has plans to facilitate livelihood opportunities for the urban poor parol makers in Camariñes Sur.

“I will call it the pink movement, para magkatotoo na kasali kayo sa lipunan (to make it true that you belong to society),” said Dr. Claros of the marginalized communities they work with.

The volunteerism surrounding VP Leni and her supporters mirrors the spirit behind the work she and the Office of the Vice-President (OVP) have undertaken, especially during the pandemic. The OVP played a critical role in coordinating the private sector and civil society volunteer response to the pandemic — facilitating tasks such as the procurement of personal protective equipment (PPE) for frontliners, mass vaccination, and COVID testing. This is the reason why there has been a call on social media to #HelpLikeLeni.

But a challenge for the campaign, which Dr. Claros and her team are very aware of, is going beyond our echo chambers and dismantling Leni’s association with “elitista” politics. Her detractors have been tirelessly working the angle that VP Leni is elitist (an irony, since she has uplifted the lives of those in the peripheries through her Angat Buhay program and worked as a human rights lawyer for years). And so, battles cannot only be fought in our pink caravans in nice cars. These initiatives are a great show of force, but there’s a need to focus on communities like District 1 in Camariñes Sur, who have been left behind and do not feel the government’s support.

How do we overcome this elitist mindset? Getting rid of this mindset involves unlearning the ideas we have surrounding the presidential candidates — one of them being the common notion that all Marcos supporters are paid trolls, and that they should be shamed. Maybe it wouldn’t hurt for us to accept that while there are paid trolls, a good number of people genuinely believe in the man. If we started to accept this, maybe we could recalibrate our strategy accordingly.

The pink parol is a symbol of how the smallest initiatives can explode into a beautiful and magical movement, as Dr. Claros mentioned. VP Leni’s campaign is made up of organic efforts from people of all walks of life. The challenge now is to sustain the energy of volunteers and expand our ranks. Although the ultimate goal is a victory for VP Leni, it isn’t just about Leni — it’s about helping people out in her name on the basis of her values, beyond the campaign.

Pia Rodrigo is the strategic communications officer of Action for Economic Reforms.

PHL performance in the last decade and the reforms needed

December 19, 2021 | 10:20 pm

The Philippines made significant progress in the last 10 years, thanks to the good fiscal management of the Aquino administration. The Duterte government inherited an economy in the pink of health, with wide fiscal space to pump-prime the economy. With it, they were able to engage in massive infrastructure spending which allowed GDP growth rates to be sustained at above 6%. The Philippines could have graduated to become an upper-middle income economy if not for the COVID-19 pandemic.

From 2010 to 2020, the country’s gross domestic product (GDP) increased by 56%, from $229 billion to $358 billion. It could have reached $400 billion last year if only we sustained the 6% growth.

The bright spots of the last decade include the IT-BPO industry whose annual revenues grew three-fold, from $9 billion to $27 billion. Local and international tourism, combined, grew by 165% and constituted 10.5% of the GDP in the last five years. Infrastructure development was encouraging too as spending increased from 1.8% of GDP in 2010 to 5.4% of GDP in 2019.

Manufacturing and merchandise exports grew as well but at a tepid pace. Gross value added for the manufacturing sector increased by only 50% from $44 billion in 2010 to $66 billion in 2020. For its part, merchandise exports grew by 88% from $34 billion in 2010 to $63.77 billion in 2020.

The underperformers were the agricultural sector, whose growth over 10 years was only 20%. Mining was also a disappointment, with gross value added growth of only 27%.

Annual intake of foreign direct investments (FDIs) posted a seemingly favorable growth rate of 392%, from $1.7 billion in 2010 to $6.4 billion in 2020. It peaked in 2017 at $10.26 billion. However, it must be taken into context. The Philippines is still one of the lowest recipients of FDI’s in the region, receiving only a third of what Indonesia and Vietnam get.

Per capita income grew by 50%, from $2,217 in 2010 to $3,323 in 2020. We are still a long way from attaining the national goal of $13,000 by the year 2040. The economy would need to grow by an average rate of 7% for 20 years to achieve this goal.

Is a sustained growth rate of 7% possible? Yes, it is, especially since we will be in the midst of our demographic sweet spot until 2040. However, we will not realize the full potentials until we undertake deep reforms in our legal framework. The sooner we effect these reforms, the sooner the economy can operate on all cylinders.

ECONOMIC DRIVERS
As mentioned in this corner last week, the following industries will drive the economy in the next decade: agriculture, auto and auto parts, electric vehicles and parts, aeronautics, next-gen electronics, construction, and creative industries.

To maintain our position as the world’s second largest provider of IT-KPO (information technology-knowledge process outsourcing) services, we must evolve to become a center for excellence in artificial intelligence, animation, game development, information and knowledge management, robotics, cloud technology and software development.

The development of the “blue industries” is another potential driver for the economy. Blue industries include ship building, ports and shipyard management, logistics services, seafarer crewing, maritime financing, aquaculture, and offshore energy exploration.

Mining holds enormous potential but the sector is plagued by disinformation and stigma. As a result, it contributes only 1/6 of 1% of GDP today. It’s a shame since the Philippines sits on 7 billion metric tons of metallic resources and 50 billion metric tons of non-metallic resources. Our mineral cache is worth well over a trillion US dollars at today’s prices. Minerals are our God-given resources that can change our fortunes. It is the Philippine equivalent to Saudi Arabia’s oil. Not to utilize it is a disservice to our people.

NECESSARY REFORMS
What reforms are necessary to be competitive in the abovementioned industries?

Foremost is to restore confidence in government. Policies start from the top and confidence can only be restored if we elect a transformative, honest and trustworthy leader in 2022.

Fundamental to unlocking the potentials of manufacturing, blue industries, and high-tech industries is the ability to attract FDI’s. We cannot do it alone. The restrictive provisions of the constitution must be amended to make us a competitive investment destination. In particular, the 60-40 rule on equity ownership, the opening of mass media and advertising to foreigners (which is basic if we are to compete in knowledge-based industries), and lifting the prohibition of foreign nationals from professional practice and be represented in corporate boards of directors.

In the short term, the passage of the Public Services Act, Foreign investment Act, and the Retail Trade Liberalization Act will open the economy and facilitate the entry of more FDIs.

Other “musts” include the reactivation of the National Competitiveness Council to develop and oversee strategies to make the country more competitive, strengthen the Philippine Competition Commission to eliminate oligopolies and level the playing field, complete the digital transition of government units to improve efficiencies and eliminate corruption, improve broadband services, and better capacitate the workforce by improving basic education system, STEM learning, and technical skills.

The Comprehensive Agrarian Reform Law must be amended to unlock the potential of agriculture. The average farm size today is below one hectare with a maximum holding of five. The maximum size of land holdings must be increased to permit industrial farming. Budgetary support for the agricultural sector must also increase from 3% of GDP to 8%. Finally, government must lift its restrictions on the free flow of agricultural products, especially the badly considered rule that corn farmers cannot export unless the Department of Agriculture declares a surplus of the crop.

There are three impediments that stand in the way of a flourishing mining industry. They are, the ban on open pit mining, the power of LGUs to enact ordinances banning mining, and the zonal ban on mining, which is hyper-excessive. These impediments have to be lifted in order for us to truly benefit from the resources we have been endowed with. Note, that opeisn pit mining are already governed by the strictest environmental laws.

By no means are these reforms comprehensive – but they are a good start. Accompanying these reforms is the continued modernization of infrastructure and continued investments disaster readiness.

We performed better in the last 10 years than we did in the decade before (2000-2010). We need to set the stage, through reforms, to ensure that we attain our development goals in the next two decades. What better time to start than in the coming new year.

Andrew J. Masigan is an economist

andrew_rs6@yahoo.com

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Twitter @aj_masigan

Beware that nocebo strapped to your wrist

December 19, 2021 | 10:19 pm

MOST PEOPLE are familiar with the concept of a placebo, where merely providing positive information can improve perception of well-being. Yet the opposite also occurs, with negative data making people feel worse about their own health.

That’s a nocebo — Latin for “I shall harm” as opposed to “I shall please” for placebo. And there’s a good chance you have a nocebo strapped to your wrist.

A wave of health-tech gadgets — from fitness trackers to Apple, Inc.’s Watch — means hundreds of millions of people are hooked up to real-time feedback devices. They’re designed to measure your steps, encourage you to exercise more, and give daily updates on your mental and physical health. Apple wants you to “close your rings” — the three colorful circles the Watch uses to monitor your progress — and Garmin Ltd. helpfully tells you when your health is “excellent.”

They make for popular gifts and are bound to be stocking-stuffers this year. Various models of the Apple Watch occupied four of the top 10 most popular items in November’s Black Friday sales, according to Business Insider.

But there’s also good reason to think twice about whether you, or a loved one, will truly benefit from 24-7 monitoring, arbitrary goals served up by an algorithm, and regular notifications telling you that you’re stressed, tired, fit, or simply “unproductive.”*

In fact, research on the nocebo effect — first conceptualized in 1961 — has shown that perceptions of pain can increase with shifts in information and detail. Patients with suspected concussions have shown poorer neurocognitive performance when their history of traumatic injury is called to attention. Concentration falters when unpleasant data is provided. Sometimes, even a change in the color of a specific signal associated with health can trigger discomfort.

With more devices strapped to people’s bodies, noceboes are now creeping into everyday life as people put more faith in data to guide their habits. “It’s about sleep for me, because I will wake up and feel pretty darn good and then I’ll look at my score and sometimes it’s not pretty darn good,” fitness podcaster and Youtuber Ali Spagnola says. “And I can tell that I will actually feel worse after that.”

While a constant flow of data can help people optimize their health, she says she is starting to understand that the opposite can also be true. Ms. Spagnola, who produces videos on music, comedy and fitness for more than 2 million social media followers, says sometimes all we really need is positive reinforcement.

“There’s an exact moment where I speak to the camera and say: I should just make an app that says ‘you are great, and you feel awesome today,’ every day,” she says. That moment led to her producing the O Band. It’s a real product but it literally does nothing but hang around your wrist. It’s a joke with a very serious message.

The nocebo effect has become inherent in social media. Rather than logging on to feel inspired and connected, Instagram and Facebook have made users feel anxious and depressed. The constant feedback of hits, likes, and retweets has undermined what should be appreciations of creativity. According to its own research, Instagram makes teenage girls feel worse about their bodies, the Wall Street Journal reported in September.

It wasn’t supposed to be this way. Well-meaning executives who churn out gadgets and apps place a high degree of faith in their products’ ability to improve life. They rarely stop to think about the downsides. “I believe that technology can make our lives better,” Facebook Chief Executive Officer Mark Zuckerberg said in October when he announced his company’s name change. “The basic story of technology in our lifetimes is how it’s given us the power to express ourselves, experience the world with ever greater richness.”

Apple has a similar view of its own devices. Its Watch, “encourages you to be active and get more out of your workouts,” CEO Tim Cook said in September when he announced the latest iteration of the gadget. “And it monitors your health, helping you live a better day.”

It’s a world where we’ve been blindsided by the unexpected. And so we want to believe that technology can forewarn us of dangers and risks. We’ve come to depend on the devices on our wrists to constantly flag us about our physical and mental health. This is more than a little naive. Sometimes all we really need is to be told we’re awesome.

*Garmin’s Connect app helpfully informs you if it’s proprietary algorithm thinks you’re peaking, recovering, detraining, or even unproductive.

BLOOMBERG OPINION