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Congress ratifies bill postponing BARMM polls to 2025 

BW FILE PHOTO/ TSBASMAN

CONGRESS has ratified the bicameral conference committee report on a measure that will postpone the Bangsamoro Autonomous Region in Muslim Mindanao’s (BARMM) first regular elections to 2025 instead of next year.  

Voting 21-2 late Monday, majority of the senators approved the report which ironed out the disagreeing provisions of Senate Bill 2214 and House Bill 10121 to move the date of the BARMM parliamentary elections to 2025, synchronizing it with the next midterm elections.   

The House of Representatives ratified the bicameral report last week.  

The proposed law will now be sent to President Rodrigo R. Duterte, who has previously expressed support for the postponement, for his signature.  

Under the reconciled version of the bill, the Bangsamoro Transition Authority (BTA) shall continue as the interim government in the Bangsamoro region and its current members, who were appointed by Mr. Duterte, will serve until June 30, 2022.   

The new president who will be elected next year will have authority to appoint 80 new interim BTA members who will serve up to June 2025 or until their successors shall have been elected. 

“The reconciled provision will expedite the rollout of development and recovery efforts in the region through the effective leadership of competent, accountable, and reliable officials in the Bangsamoro Transition Authority,” said Senator Francis N. Tolentino, chair of the Senate panel in the bicameral conference committee, during the plenary.  

The extension of the BARMM transition period, he added, would provide more time and focus for the political and normalization efforts embodied in the Comprehensive Agreement on the Bangsamoro amid the health crisis. — Alyssa Nicole O. Tan 

Zamboanga City mayor mulls tax holidays, expanded free COVID testing 

ZAMBOANGACITY.GOV.PH

ZAMBOANGA CITY’S mayor has ordered a study on implementing tax holidays on idle lands and auxiliary activities to help residents and businesses recover from the economic impact of the coronavirus crisis.   

“Let our people recover first from the COVID-19 (coronavirus disease 2019) pandemic before we collect the right taxes from them,” Mayor Maria Isabelle Climaco-Salazar said in a local radio interview.   

The proposal, which will be assessed by the local government’s department heads, will provide a three-year tax holiday on idle lands, and another two years for the auxiliary service groups or companies.  

Ms. Salazar said she will also be asking support from the Sangguniang Panlungsod (SP) or city council for the plan, which will require the passage of a local ordinance.   

“I hope the SP will also support this,” she said.  

The mayor will also propose to the council to pass legislation that will expand the coverage of free RT-PCR testing for COVID-19 after the city-owned laboratory becomes operational.   

The city’s budget and health offices will draft a policy for its implementation.   

“It may not be necessarily a free-for-all grant but at least with a wider coverage than the present free RT-PCR test given to those with COVID-19 symptoms, suspected and positive cases only,” she said. — MSJ 

TnT Tropang Giga, Meralco Bolts gun for outright semifinal spots

THE TnT Tropang Giga and Meralco Bolts gun for outright semifinal spots against different opponents when PBA Philippine Cup quarterfinal play resumes on Wednesday. — PBA IMAGES

THE quarterfinal phase of the Philippine Basketball Association (PBA) Philippine Cup resumes on Wednesday with the top two teams TnT Tropang Giga and Meralco Bolts gunning for outright semifinal spots against different opponents.

Holders of the twice-to-beat incentive in the quarterfinals, TnT and Meralco try to advance to the next round of the ongoing Philippine Basketball Association tournament at the first instance.

Top-seeds Tropang Giga take on the number eight team and defending champions Barangay Ginebra San Miguel Kings in the scheduled 6 p.m. contest at the Don Honorio Ventura State University Gym in Bacolor, Pampanga.

Meralco, the second seed, collides with NLEX (seventh) in the earlier game set for 3 p.m.

Chot Reyes-coached TnT has been a steady force in the Philippine Cup, losing only one game out of 11 matches to claim the top spot.

Heading into the playoffs, the team is fresh, having at least a week break since it last took the floor in the eliminations.

It is something the Tropang Giga were looking to capitalize on, particularly in shoring up their game plan.

“There are areas that we wanted to shore up. There are still some lapses on defense. We’re trying to consistently upgrade our defense as well as our execution on offense. You know those are little things,” said Mr. Reyes. The TnT coach also said that they would take the break as an opportunity to get everyone healthy and ready for battle.

Barangay Ginebra, meanwhile, had to go through overdrive and played the Phoenix Super LPG Fuel Masters in a one-game playoff for the eighth and final quarterfinal spot.

While the Kings are happy to have survived and advanced, they know that a far bigger challenge awaits them against TnT.

“They (Tropang Giga) are playing extremely good basketball. They’ve hardly been touched,” said Barangay Ginebra coach Tim Cone.

“Aside from that, they pretty much dominated just about everybody. We know our road is tough, there is no doubt about it. But our guys will battle,” he added.

In their lone encounter in the elimination round on Sept. 12, TnT defeated Barangay Ginebra, 88-67.

MERALCO VS NLEX
Meralco, for its part, was on a roll heading to the quarterfinals, winning four straight to finish with a 9-2 record and claim solo second spot.

“We really just want to have the momentum going into the playoffs,” said Bolts coach Norman Black following their last win in the eliminations over Barangay Ginebra on Sept. 23.

Meralco is now bracing for a tough challenge from NLEX, which the former considers “dangerous” and capable of beating any team anytime.

In their previous encounter, the Bolts had to dig deep to beat the Road Warriors, 104-101. NLEX is missing the services of key cog Kiefer Ravena late in the tournament.

Meanwhile, San Miguel’s CJ Perez was named PBA player of the week for the period of Sept. 22 to 26.

The former rookie of the year and two-time scoring champ averaged 17 points on 44% clip from three-point range, six rebounds, 2.5 assists, and 2.0 steals in the Beermen’s last two wins.

Mr. Perez beat out teammates Mo Tautuaa, six-time most valuable player June Mar Fajardo, and Chris Ross, Meralco’s Mac Belo, Alvin Pasaol, Allein Maliksi, and Bong Quinto for the weekly honors handed out by media covering the PBA beat. — Michael Angelo S. Murillo

Book highlights keeping a winning mindset amid prevailing challenges

By Michael Angelo S. Murillo, Senior Reporter

SPORTS is one of the hardest-hit sectors by the coronavirus disease 2019 (COVID-19) pandemic, but it is also a source of inspiration for one to weave through the prevailing challenging conditions.

That is the motor behind the recently published book Winning Still: Essays from the Philippine Sports Landscape during the Pandemic, which is an anthology of essays written by accomplished Filipino sports stakeholders and personalities.

It aims to inspire individuals to forge ahead and use these difficult times to be shaped, or reshaped, to be better versions of themselves.

“Obviously, the pandemic hit us hard. If you look around, every facet of life has been affected by it. I cannot think of any affairs not affected, and it’s not only in sports,” said Noli Ayo, project coordinator for the book and athletics director of Ateneo de Davao, in a Zoom Meetings interview.

Winning Still is a product of the thrice-a-week (Mondays, Wednesdays and Fridays) sessions which Mr. Ayo spearheaded last year just as the pandemic was starting to grip the country, with a group of athletes and coaches and sports personalities.

In the online sessions, which are still ongoing, they talk about their different experiences during this time of the pandemic, how it has affected them at various levels, and how they are moving forward, among other things.

“It started with a small group then it attracted more and more individuals not only here in the country, but also from abroad. When that happened, we said to ourselves that maybe there was something in what we were doing,” shared Mr. Ayo, who is the convenor and one of the founders of the Mindanao Peace Games, one of the biggest independently running sports organizations in Mindanao.

Among the steady attendees of the sessions, who eventually became members of the pool of writers of Winning Still, were Olympic gold medalist Hidilyn Diaz (weightlifting), Ada Milby (rugby), Meggie Ochoa (jiu-jitsu), and Rubilen Amit (billiards) as well as coaches Jong Uichico, Sandy Arespacochaga and Haydee Ong (basketball) and Oliver Almadro (volleyball).

Also part of the group were sports officials Akiko Thomson-Guevarra, Rebo Saguisag, Pearl Managuelod, Belay Fernando and Paul Supan, and sports executives Robbie De Vera and Geraldine Bernardo.

“Throughout the meetings, we gathered a lot of interesting insights. Then the idea to make a book out of it came up. We felt that we had to share what we were discussing to more people so as not to have it lay to waste,” Mr. Ayo said. “We did not want to keep what we were discussing just for ourselves.”

MAKING THE BOOK
Mr. Ayo said in making the book it was important for everybody to take note of the lesson of having a common compelling goal.

“Here we like gathering people, but sometimes we operate in silos. And for this book, we did not want that to happen,” he said.

Winning Still is guided by three central themes – leadership, adapting to change and moving forward.

Mr. Ayo said initially they thought of assigning writers for specific topics, but eventually reconsidered it, allowing them instead to write anything they want, but following the lines set for the book.

“We said to them, “If you can express it, you can write it.” And we took it from there.”

And the result is Winning Still, which is composed of seven chapters, namely, Overcoming Struggles, Mind over Matter, Relearning Endurance, Change or Pivot, The Anatomy of Champions, Inside Out, and Winning Still.

“This book is a tangible proof that great things can happen if you have the right people coming together. I’m so proud of this book and all of these writers,” Mr. Ayo said.

He went on to say that the reception for the book has been overwhelming, recently being sold out and is set for reprinting, something they are excited about. Volume 2 is also being planned.

“In this pandemic, you either sink or adapt. The book is about adapting, evolving amid the prevailing conditions,” Mr. Ayo said.

“The pandemic has affected us, but it also gave the invitation to change. Many are still struggling, but there are also others who have moved forward. [Things may look impossible right now], but the thing about impossibility is it only takes one person [or moment] to remove the impossible.”

Winning Still is sold for P750 and is available over the Winning Still Facebook page and online bookstore Crazy About Paper.

Gilas Women routed by China in Asia Cup opener

GILAS Pilipinas Women had its hands full against China in the opener of the FIBA Women’s Asia Cup on Monday night, losing, 143-52. — FIBA

THE Philippine national women’s basketball team had it tough against top-ranked China in the opener of the International Basketball Federation (FIBA) Women’s Asia Cup on Monday night, losing, 143-52, in the game held at the Prince Hamza Hall in Amman, Jordan.

China seized the Group B game at the onset, taking full advantage of their edge in height and banking on solid shooting.

The Chinese held a 35-17 advantage by the end of the opening quarter and just continued to build on it en route to the dominant victory.

Liwei Yang led the balanced attack of China, finishing with 21 points and five assists. Centers Yueru Li and Xu Han, meanwhile, added 18 and 17 points, respectively.

As a team, China shot 66.7% from the field (50-of-75) and 54.5% from beyond the arc (12-of-22).

For the Philippines, it was Afril Bernardino who top-scored with 17 points.

Next for Gilas Women is a showdown with Australia on Sept. 29 at 12 a.m.

In the tournament, the goal for the Gilas is to stay in the top three in the grouping to advance to the next rounds and avoid risking being relegated to Division B play in FIBA Asia. — Michael Angelo S. Murillo

Dak Prescott shines in home return as Cowboys rout Eagles

DAK Prescott passed for three touchdowns in his first home game in 11-plus months and Ezekiel Elliott rushed for two scores to help the Dallas Cowboys record a 41-21 victory over the Philadelphia Eagles on Monday night in Arlington, Texas.

Trevon Diggs returned an interception for a touchdown as the Cowboys (2-1) controlled the matchup against their National Football Conference (NFC) East rival. Dalton Schultz (six catches, 80 yards) had two scoring receptions, and Cedrick Wilson added one touchdown catch for Dallas.

Prescott completed 21 of 26 passes for 238 yards in his initial game at AT&T Stadium since severely breaking his right ankle and being carted off the field against the New York Giants on Oct. 11, 2020.

Elliott had 95 yards on 17 carries and three receptions for 21 yards.

Jalen Hurts was 25-of-39 passing for 326 yards, two touchdowns and two interceptions for the Eagles (1-2). Zach Ertz and Greg Ward caught touchdown passes, and Fletcher Cox scored on a fumble recovery for his third career touchdown.

Dallas had a 27-12 edge in first downs while outgaining Philadelphia (380-367).

The Cowboys displayed they meant business as Elliott capped a game-opening six-play, 75-yard drive with a 1-yard scoring run.

The Eagles tied the score on the defensive end as Javon Hargrave’s strong pass rush forced Prescott to fumble in the end zone. The ball hit off Prescott’s back, and Cox grabbed it for a touchdown with 9:57 left in the opening quarter.

The Cowboys moved ahead to stay later in the quarter when Prescott connected with Schultz on a 19-yard scoring pass with 1:31 left.

Elliott scored from the 3 to give Dallas a 20-7 advantage with 7:10 left in the first half.

On the third play of the second half, Hurts’ short pass was intercepted by Diggs, who raced 59 yards for a touchdown.

Hurts threw a 3-yard pass to Ertz to pull the Eagles within 27-14 with 7:08 left in the third quarter. But Prescott hit Wilson on a 2-yard scoring pass early in the fourth and threw a 22-yard touchdown pass to Schultz to make it 41-14 with 6:56 left in the contest.

Hurts connected with Ward on a 15-yard scoring pass with 3:09 remaining. — Reuters

Europe faces tough task to win back Ryder Cup against ‘scary’ Americans

LONDON — Following Europe’s Ryder Cup thrashing by the United States at Whistling Straits former captain Colin Montgomerie summed up neatly the challenge facing the next incumbent in the job.

“I don’t envy whoever is in charge in Rome,” the Scot, whose team won a thriller at Celtic Manor in 2010, told Britain’s talkSPORT radio station on Monday.

Padraig Harrington’s European team were simply overwhelmed by a high-powered American dozen on the shores of Lake Michigan, sinking without trace in a 19-9 defeat that is likely to mark the end for several of Europe’s stalwarts.

Most worrying, according to Montgomerie, is that the American team, whose oldest player was 37-year-old Dustin Johnson, will most likely look pretty similar in Rome in 2023.

“Sometimes in sport it’s blissfully simple, if a stronger team, which they were, and they’re playing at home, performs to its capabilities, which they did, it’s going to win,” Montgomerie said. “And that’s what happened.

“Their world rankings averaged eight and ours was 30. It was a better team and it was frightening how good they were. It’s a little bit worrying for the next couple of Ryder Cups as well as I reckon 10 or 11 of them will be in Italy in two years time.

“It’s a worry and I don’t envy the next European captain at all.”

Harrington’s captaincy is coming under scrutiny.

Questions were rightly asked as to why he split the partnership of Jon Rahm and Sergio Garcia on Friday afternoon after they had won their opening foursomes match.

LITTLE FLEXIBILITY
His decision to use only three captain’s picks, rather than the four Thomas Bjorn had in 2018, also left him with little flexibility to select the players in the best form, although his decision not to choose reliable Ryder Cup points scorer Justin Rose was questionable.

Of Harrington’s three picks, only European points record holder Garcia justified the faith while both Shane Lowry and Ian Poulter struggled.

The points qualification system also meant that the likes of 48-year-old Lee Westwood were in the team despite lacking form.

Westwood, playing in his 11th Ryder Cup, struggled on the opening two days alongside fellow Englishman Matt Fitzpatrick who has failed to earn a point in two Ryder Cup appearances.

Austrian Bernd Wiesberger, another merit qualifier, tried his best, but ended pointless while fellow rookie Viktor Hovland played in all five sessions, earning just one point.

Aged 24, Norwegian Hovland showed enough to suggest that he will be back in a European team that is clearly in a transitional phase at just the time the Americans are flush with major champions approaching their prime.

“It’s scary how good they are,” said Montgomerie. “Dustin Johnson is their oldest player and won five points, Bryson (DeChambeau) is getting better and they have the likes of (Collin) Morikawa who was rookie, but the Open champion.”

“We are in a transition period. We were in 1999 when we lost our top guys Faldo, Langer, Seve, Woosnam, Lyle. This is another one where the old school has probably played their last one, the Poulters, Westwoods, Caseys, they may not play again.

“It’s a transition period which has coincided with them being very good so the gap has widened. The US team is probably the best team ever assembled.” — Reuters

Bucks star Giannis Antetokounmpo ‘not satisfied’ after title win

DESPITE adding “NBA champion” to his lengthy resume last season, Milwaukee Bucks star Giannis Antetokounmpo still has his sights set on greater heights as he readies to return to the court.

“I’m not satisfied. I’m not even close to being satisfied,” Antetokounmpo said during the Bucks’ media day on Monday. “That’s the tone we got to set as a team. As the leader of this team, that’s the tone I’m going to set. We understand that teams are coming for us, but we’re going to be ready.”

The two-time Most Valuable Player (MVP) won the first title of his career when the Bucks beat the Phoenix Suns in six games to claim their first National Basketball Association (NBA) championship since 1971. Antetokounmpo was named Finals MVP, averaging 35.2 points, 13.2 rebounds and five assists per game in the series.

During the regular season, he averaged 28.1 points, 11 rebounds and 5.9 assists in 61 games, finishing fourth in the league MVP vote after claiming the award the previous two campaigns.

“Right now, what I want is to get better,” the 26-year-old said. “I don’t care about trophies. I don’t care about the MVPs. I don’t care about Defensive Player of the Years. All those things, I don’t care. I care about getting better because if I do that, more things are coming.”

Antetokounmpo was also asked about his left knee, which he injured during the Eastern Conference finals. He missed the last two games of that series as the result of the ailment.

“I feel good,” he said. “Obviously, I gotta do my treatment like always, take care of my body. Just manage it, you know? I don’t think there’s no rush for me here. I’m good to go. But if I feel pain again or whatever the case might be, I listen to my body. When you feel pain, it’s your body telling you that it’s protecting you and you can’t go no more.

“I’m doing whatever I have to do to be 100 per cent. That’s pretty much it. That’s all I can do.

The Bucks begin their title defense at home against the Brooklyn Nets on Oct. 19. — Reuters

Best event in golf

There was a time when Rory McIlroy wanted to have little to do with the Ryder Cup. Twelve years ago, he called it “a great spectacle, but an exhibition at the end of the day. And it should be there to be enjoyed. In the big scheme of things, it’s not that important to me.” At the time, he was projected to be Europe’s foundation for the 2010 staging of the biennial event — a would-be rookie just two years removed from his professional debut. That said, he had already been flexing his muscles enough to underscore his potential. And by the end of the year, he had jumped 30 spots to ninth in world rankings.

Fast forward to Monday, and McIlroy could not have exhibited a more contrasting viewpoint. That he did so while on the losing end of the most lopsided result in Ryder Cup history speaks to the gravity of his sentiments. “I should have done more for them this week,” he said, lamenting his 1-3-0 slate. It was far from adequate on paper, and made even more untenable in the face of Europe’s inability to put up points on the board, let alone keep pace. And as he struggled to hold back tears during his interview, he could not help, but note that, “The more I play in this event, I realize it’s that it’s the best event in golf. I love being a part of it. I can’t wait to be part of many more.”

McIlroy added that none of his individual accomplishments — not his four major titles, not his Players Championship trophy, not his three World Golf Championship victories — had him as invested in both the experience and the outcome as the Ryder Cup. If nothing else, the premier team-based competition in the sport proves the oft-cited quote “Success is a journey, not a destination” and, just as importantly, the other extreme. Failure hits hard in any case, but hardest in the context of a shared endeavor. Pressure is amplified — and the need to perform up to par becomes more pronounced — when the contribution, or lack thereof, is counted, and counted on, by all.

Little wonder, then, that McIlroy was moved to profess his love of and for the Ryder Cup at a time when he was most down. “I don’t think there’s any greater privilege to be a part of one of these teams, European or American. It’s an absolute privilege,” he noted, enumerating the accomplishments of his teammates through the years. “I’ve gotten to do this six times. They have always been my greatest experiences of my career,” he disclosed. “It’s phenomenal and I’m so happy to be a part of it. As I said, I’m disappointed that I didn’t contribute more this week, but you know, in two years’ time, we’ll go again and try to give it another go again.” Enough said.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

2050 take me there

(Part 1)

The National Economic and Development Authority (NEDA) dropped a bombshell when it released the result of a six-month study estimating the economic cost of COVID-19 for the next four decades to reach P41 trillion and that the economy is expected to return to the pre-pandemic growth trend only after 10 years. The primary assumption is that consumption and investments will likely remain sluggish for some time to come. As Socioeconomic Planning Secretary Karl Kendrick T. Chua said in the presentation: “Consumption and investment will be lower in the next 10 years due to lower demand in sectors that require social distancing (e.g., amusement, tourism, restaurants, public transportation). Consequently, tax revenues will be lower.”

I appreciate this attempt of our NEDA economists to use the scientific methods of long-term forecasting and present value analysis to demonstrate the catastrophic results of the very poor judgment of the President and his Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) advisers to give exaggerated emphasis to the health issues during the pandemic in almost complete contempt for what was happening to the economy by imposing the longest and most frequent lockdowns in the region. It is well known that NEDA has always taken what I consider the right position, that the long lockdowns, the school closures, and other measures that hurt the economy were unwarranted. The conclusions of their study have, to my mind, a clear purpose of changing the mindset of our government decision makers, if not immediately, at least of the ones who will be elected in May 2022. Voters should make the ineffective response to the pandemic of this present Administration a major issue in the next elections.

I, however, would like to present an alternative scenario based on a more optimistic assumption of what will happen to consumption and investment starting at least the second semester of 2022.

I maintain that social distancing and the other extreme measures related to lockdowns will be things of the past by the second semester of next year. Filipinos will treat the pandemic as endemic and will learn how to live with it in the same way they have lived with the common flu for decades. They will not tolerate the misguided policies of this present Administration such as lockdowns and school closures. Because of the strong fundamentals that have not be erased by the pandemic (what I referred to in the series of articles entitled “Aspiring for High Income Status,” as demographic, geographic and temporal dividends), investors and foreign investors will quickly recover their entrepreneurial spirit and make up for the big decline in capital accumulation in 2020 and 2021.

In fact, it was a happy coincidence that as the news on the NEDA projections were appearing in the news, Megaworld was announcing that it would be investing about P40 billion to develop beachfront and inland properties spanning 462 hectares in San Vicente, Palawan into an “eco-tourism” township. This is only one example of the bullish outlook of investors as they consider the long-term potentials of the Philippine economy, despite the pandemic. The pandemic has not taken away from Palawan the potential of being one of the most visited set of islands in the world in the years to come. It was rated by an international magazine on leisure and tourism as the best island resort in the world, besting such other tourist destinations as Bali and Hawaii.

I would like to present an alternative long-term economic scenario for the Philippines. I still think that the Philippines can attain advanced economy status by 2050, despite the temporary scars that the pandemic has left on consumption, investment, health and education in particular.

In the five-part series of articles entitled “Aspiring for High Income Status,” we saw that the longest-term forecast made by economists about the Philippine economy was that of the Hongkong and Shanghai Banking Corporation (HSBC) which, in 2012, projected that by 2050, the Philippines will have the 16th largest economy in the world. We also saw that a good number of independent think tanks, financial and economic development institutions, and international agencies like the World Bank and Asian Development Bank started to think positive about the future of the Philippine economy at the beginning of the Third Millennium.

We also saw that it is one thing to reach middle income status and another thing to actually be part of the First World. It took South Korea all of 60 years (1960 to 2021) to be promoted by the United Nations Conference on Trade and Development (UNCTAD) to be part of the club of advanced countries. Despite incomes that already exceeded $25,000, the country continued to be considered as an emerging market. It must also be pointed out that despite the recent upgrading of South Korea to the status of an advanced (First World) economy, the country still faces the problem of a very inequitable distribution of income and wealth. In a recent article that appeared in the Financial Times (Sept. 8), Prime Minister Kim Boo-Kyum lamented over the plight of the country’s poverty-stricken elderly population, the very generation that rebuilt the country after the Korean war. Despite “advanced economy” status, there exist unparalleled elderly poverty, high youth unemployment, rising property prices, spiraling household debt, and soaring education costs. Poverty now affects more than 40% of over 65s, the highest percentage among OECD members, while nearly one in 10 young South Koreans is jobless. No one country today should have any illusion that if and when it transitions to a high-income status, it will run out of problems of poverty and inequity.

There are skeptics, however, who do not believe in long-term projections such as the one that was made by the HSBC in 2012. They say that so many unforeseen events and seismic shocks can affect both the domestic and global scenarios of any given economy. The case of South Korea, however, should dispel this doubt. There were many earthshaking events between 1960 and 2021 (among them, the Sept. 11, 2001 terrorist attack against the US, the Arab Spring, numerous regional wars in the Middle East, the oil shocks of the 1970s, etc.). Because South Korean leaders focused on institution building throughout these six decades, it succeeded in taking its place among the First World economies.

In fact, in an ADB Working Paper 571, written by Jong-Wha Lee, the long-term trek of South Korea towards high-income status was very well documented. The paper showed that, despite unforeseeable events that seem to militate against long-term development, the Republic of Korea showed impressive growth over the past half-century. The country attained an average annual GDP growth rate surpassing 7.1%, raising the level of real income per capita GDP in international prices almost 26 times. Average GDP growth rates accelerated to 7.5% in the 1960s, 8.8% in the 1970s, and 9.3% in the 1980s.

The road to development was not without serious obstacles. In the East Asian Financial Crisis of 1997 to 1998, South Korea suffered a 7% decline in its GDP due to the huge, sudden reversal of short-term capital flows triggered by international investor panic. Structural problems underlying the economy, including under-supervised financial systems and an overleveraged corporate sector, also led to the accumulation of vulnerabilities that set the stage for the crisis, applying the shock to the economy. This financial crisis slowed down growth in the first decade of the New Millennium to an annual 4.1%. Then, exactly a decade later, in 2008 to 2009, South Korea suffered another shock. The global financial meltdown, which resulted from the US subprime mortgage crisis, adversely affected the economy of South Korea through spillovers from global trade and financial markets. The country’s GDP growth rate slowed down to 0.3% in 2009.

These crises illustrate the fact that long-term projections for an economy can still be valid, despite unforeseen shocks and crises as long as a country has strong institutions. It can also be pointed out that South Korea had to overcome serious political shocks. President Park Chung Hee was assassinated after nearly 20 years of rule; Chun Doo-hwan was sentenced to life imprisonment for his role in the Gwangju Massacre; and Roh Tae-woo was jailed on the same count as Chun; Lee Myung-bak was sentenced to 15 years for embezzling $22 billion; Park Geun-hye was sentenced for 25 years for various charges of corruption.

As long as a country can count on strong fundamentals based on sound market-oriented institutions, an educated population, a minimum of good governance practices, and long-term political stability, its economy can transition from a low-income status to at least an upper-middle income one, if not fully an advanced economy.

In the case of South Korea, the economy avoided falling into the Middle Income trap by implementing the following strategic moves over the last 50 or so years. Its first major step was to focus on improving its rural infrastructures and agricultural productivity, especially through the Saemaul Undung movement. It emphasized export-oriented, labor-intensive industrialization at the start of its industrialization strategy. The highest priority was given to investment in quality education and scientific research. It capitalized on its demographic dividend while it lasted. Its leaders were able to minimize crony capitalism by choosing the entrepreneurs on which to lavish state subsidies and assistance on the basis of actual business acumen and proven success rather than on personal ties. The whole society capitalized on the strong patriotism and work ethics of its citizens, which characteristics also accounted for a high domestic savings rate during the crucial stage of its development process.

To be continued.

 

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is Professor Emeritus at the University of Asia and the Pacific, and a Visiting Professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

Washington’s changing position on the 1951 Mutual Defense Treaty

BW FILE PHOTO

During a media briefing, Department of National Defense (DND) Secretary Delfin Lorenzana said that the time had arrived for the Mutual Defense Treaty (MDT) “to be revisited, given that its provisions were formulated in the early 1950s.”

“We believe it is time to sit down with our US counterparts and revisit the terms of our alliance. We are partners. We have deep historical ties. We must clearly define our roles and responsibilities when the need arises to be joined in arms,” he said.

Secretary Lorenzana and the defense establishment feared that the Philippines might be unnecessarily dragged into an armed confrontation between the US and China. The two major powers’ military activities in the South China Sea — for example, the Chinese construction and fortification of several artificial islands and the American Navy’s active exercise of freedom of navigation and overflights in the disputed waters — are proverbial powder kegs.

There are real anxieties within the DND and the Armed Forces of the Philippines (AFP) despite assurances by American officials that the MDT is an “iron-clad” commitment, which the US will honor, even in the contested islands in the South China Sea. The DND’s move to reassess the MDT was driven by uncertainties over what the US can bring to the table and what it expects from the AFP in case of an armed clash between the American and Chinese forces in the South China Sea.

CHANGING US’ POSITION ON THE MDT
In June 2011, Manila sought an unequivocal US commitment to its defense.

Philippine officials argued that an armed attack on its forces anywhere in the Pacific should trigger an automatic US armed response. According to the Philippine interpretation, the US security guarantee should not be confined to Philippine metropolitan territory but should also extend to its naval and air units in the South China Sea.

The 1951 MDT, unfortunately, does not specify a retaliatory armed response to external armed aggression. It only requires each signatory to consult each other and determine what armed action, if any, both would take.

US policy remains vague and ambiguous regarding the nature of its treaty commitment. It stops short of any reference to an automatic response if an armed conflict erupts in the South China Sea. Instead, it emphasizes the treaty’s diplomatic (rather than the military) deterrence. It argues that since the US is a treaty ally of the Philippines, China cannot simply assert that events in the South China Sea, including the contested islands, are not any of Washington’s business.

Interestingly, Secretary Lorenzana’s call for an MDT review coincided with the changing American position regarding the MDT. Washington maintains its neutrality over the sovereignty issue and ensures certain ambiguities on the MDT.

Recent US attitudes toward China, however, have become more critical as the Trump administration engaged this emergent power in a strategic competition. In President Donald Trump’s last full year as president, the US openly challenged China’s expansive claims in the South China Sea as it clarified that the MDT would obligate the US to honor its treaty commitments to the Philippines.

In late January this year, newly appointed Secretary of State Antony Blinken called his Philippine counterpart to reiterate the MDT’s implications for the security of the two countries, specifically in case of an armed attack against the Philippine armed forces, public vessels, or aircraft in the Pacific, which includes the South China Sea.

THE WHITSUN REEF STAND-OFF
Two events signified the changing US position regarding the MDT. First, in March 2019, during his official visit to the Philippines, then-Secretary of State Michael Pompeo directly addressed Secretary Lorenzana’s concern about the MDT: “As the South China Sea is part of the Pacific; any armed attack on Philippine forces, aircraft or public vessels in the South China Sea will trigger mutual defense obligations under Article 4 of our mutual defense treaty.”

And then, on March 20, 2021, Secretary Lorenzana informed the Filipino nation about the presence of around 220 blue-hulled Chinese fishing vessels moored in line formation at Julian Felipe Reef (international name: Whitsun Reef). He issued a statement announcing that the Philippines is ready to defend its national sovereignty and protect the country’s marine resources.

Washington promptly announced its support to Manila. National Security Adviser Jake Sullivan called his Filipino counterpart, Hermogenes Esperon, to emphasize that Washington’s backed the Philippines and that the MDT was applicable to the area.

On April 9, US Secretary of State Antony J. Blinken called Foreign Secretary Teodoro Locsin, Jr. to express Washington’s concern over the massing of Chinese maritime militia vessels in the South China Sea, and, more importantly, to reaffirm the applicability of the 1951 MDT in the South China Sea. US Department of Defense Secretary Lloyd Austin called Secretary Lorenzana to say that the USS Theodore Roosevelt, along with the amphibious assault ship the USS Makin Island, was on its way to the South China Sea.

In a statement, however, President Duterte declined Washington’s offer of assistance. Instead, he expressed doubt that the Philippines could count on its ally in case of a full-blown conflict in the West Philippine Sea.

Nevertheless, the incident revealed that top Biden administration defense and foreign affairs officials worked effectively with their Filipino counterparts against China’s coercive attempt to control Whitsun Reef. They affirmed the MDT’s applicability in the South China Sea imbroglio.

 

Dr. Renato De Castro is a Trustee and Convenor of the National Security and East Asian Affairs Program of the Stratbase ADR Institute.

Aluminum’s surge is really an energy crisis in disguise

THERE’S an odd exception to the list of best-performing raw materials this year.

While the 64% gain in the Bloomberg Commodities Energy index since the start of the year has comfortably outstripped the 25% improvement in industrial metals, one major element has been behaving more like natural gas, coal or oil: Aluminum, which hit $3,000 a metric ton — its highest level in 13 years — earlier this month.

That may be less surprising than it seems. Producing it involves using massive electrical currents to melt alumina, essentially the same substance that sapphires and rubies are made from. Energy typically accounts for a third or more of the cost of aluminum — so when the price of energy rises, you can expect metal prices to do the same. In that sense, the aluminum’s spike is another minor energy crisis analogous to the surging value of European gas and Australian coal.

That effect is often muted in Europe and North America, because hydroelectricity has traditionally been the cheapest way of providing aluminum producers with the low-cost power they need. With smelters hooked up directly to a dam that’s fueled for free by rainfall and gravity, power contracts are typically long-term and unaffected by the state of demand elsewhere in the grid. (Indeed, some smelters are even looking at turning electricity from a cost into a source of revenue, by offering to turn down the current during periods of high grid demand in return for payments for their role in balancing the network.)

Europe and North America aren’t where the action has been in aluminum over recent decades, though. In China, which consumes nearly two-thirds of the world’s aluminum, close to 90% of smelters are powered by coal — often as the linchpins of provincial grids developed over the past two decades to electrify the nation.

Prices for that commodity have been off the leash over the past year, as surging energy demand and still-insufficient renewable capacity has crashed into President Xi Jinping’s targets of peaking emissions by 2030 on the way to net zero three decades later. Thermal coal futures on the Zhengzhou commodity exchange hit a record of 1,237.8 yuan ($191.58) a metric ton last week, nearly double their level 12 months earlier. That’s dragged up aluminum, too.

The surging price of the light metal makes a lot more sense when put in the context of those ballooning input costs. Despite being sited close to generators, aluminum smelters typically don’t operate at full capacity all the time. When demand is strong, most are likely to have to go beyond their long-term power supply contracts to buy additional electricity, and in China’s nascent spot power market the cost of that is driven by how much generators are paying for solid fuel.

The next phase of this could be far more disruptive. Smelters in rich countries making efforts to decarbonize their power supplies don’t appreciate having to compete with a flood of Chinese metal produced using coal, much of it strikingly cheap thanks to direct or indirect subsidies. In Europe, aluminum is one of just five import sectors that will start having to pay a levy from 2026 to account for emissions in their production processes.

More important is what’s happening domestically, where more than 95% of China’s aluminum is consumed. The industry has promised that emissions will start falling from 2025 on the path toward Xi’s 2060 net zero goal, reiterated in his speech to the United Nations General Assembly this week. Smelters have been shifting toward hydropower in Yunnan province as a result — although local producers have been among the many asked to curb output due to the current power crisis. The task ahead remains vast, however: the coal burned by China’s aluminum industry provides about 427,000 gigawatt hours of electricity a year — sufficient to power all of Scandinavia, or the UK and Netherlands put together.

Providing the carbon-free electricity that China’s industrial sector will require over the coming decades will be no easy task. But current events provide further evidence of its necessity. Despite handsome profits for metal producers and thin inventories of metal, output fell by 3.3% in August as more essential electricity consumers fought for their share of generation. An aluminum sector that’s so dependent on the fluctuations of a volatile and declining commodity is one that will struggle to deliver the metal that China needs for its construction, consumer products and new-generation technologies.

Coal-fired electricity helped give China the world’s largest aluminum industry. If it wants to survive the transition to an aging, decarbonizing society, it will need to find other sources of power.

BLOOMBERG OPINION