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Regional Updates (12/01/20)

Gov’t gears up for influx of returning overseas workers

THE Department of Transportation is preparing for the influx of returning overseas Filipino workers (OFWs) for the December holidays by expanding its one-stop shop for coronavirus testing and the passenger capacity at three international airports. “We added more swabbers and other partner agencies who will service our OFWs,” Transportation Undersecretary Raul L. Del Rosario said in Filipino during a briefing on Tuesday. He added that they are also increasing the number of accredited hotels for the mandatory 14-day quarantine and more vehicles for land transport. The airports currently operating with international flights are the Ninoy Aquino International Airport in Manila, Clark, and Mactan-Cebu. Mr. Del Rosario said about 500,000 Filipinos have returned to the country so far since the one-stop shop was set up in April. — Gillian M. Cortez

Palace to leftist groups: Denounce armed rebellion

MEMBERSHIP to the Communist Party of the Philippines (CPP) is not illegal but involvement with its armed faction, the New People’s Army (NPA), is a “crime,” Palace Spokesperson Harry L. Roque said on Tuesday. “The crime is… a crime of rebellion, taking up of arms against the government, killing civilians and soldiers,” he said during a briefing. “What’s difficult about them is you cannot separate the CPP from the NPA… if you are a member of CPP, you can be legal if you renounce your use of arms,” he added. Mr. Roque’s statements came after President Rodrigo R. Duterte slammed leftist groups on Monday evening during a televised speech, accusing opposition lawmakers and party-list groups of being tied to the armed conflict. — Gillian M. Cortez

98 found COVID positive after mass testing at Batasan Complex

A TOTAL of 98 persons were found positive of the coronavirus disease 2019 (COVID-19) after mass testing was conducted by the House of Representatives at its headquarters, the Batasan Complex, in Quezon City. House Secretary General Mark Llandro L. Mendoza said nearly 5% of the 2,000 lawmakers and employees who underwent RT-PCR (reverse transcription-polymerase chain reaction) testing came out positive for the virus. “Because it was mass testing for all officials, employees and guests entering the Batasan Complex, we caught even the asymptomatic cases who could be transmitters if we didn’t find out they were COVID positive,” he said in a statement. Those who tested positive have been directed to self-isolate while the House administration is now coordinating with the Quezon City government for a more extensive contract tracing, Mr. Mendoza said. Before Nov. 10, the House already registered more than 80 COVID-19 cases, including two lawmakers and three employees who died. Mr. Mendoza said the House will continue to operate under strict health and safety protocols. — Kyle Aristophere T. Atienza

Higher FIRB approval threshold seen weakening CREATE reforms

A CAMPAIGN to raise the investment threshold beyond P1 billion before a project can go before the Fiscal Incentives Review Board (FIRB) would weaken tax reform by removing many investments from scrutiny, according to Action for Economic Reforms (AER), a policy think tank.

In a statement Tuesday, AER said the request of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) to increase the threshold for projects going before the FIRB in the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill is a “self-serving, shallow argument that will render the FIRB toothless.”

“Even if the bicameral conference committee convenes to reconcile the House and Senate versions of the bill, legally, it cannot insert the amendment that some industry leaders are asking for as the amendment cannot be found in either the House bill or the Senate bill,” it added.

The Senate approved Senate Bill No. 1357, its version of CREATE, on third and final reading last week. It proposes to cut the corporate income tax to 25% from 30% currently, with further reductions of one percentage point each year starting 2023 until it falls to 20% by 2027.

The measure also seeks to strengthen the capacity of the FIRB, chaired by the Secretary of Finance, to oversee the grant of incentives by investment promotion agencies (IPAs) and other bodies. The bill as it currently stands delegates investment approval for projects under P1 billion to the IPAs; projects beyond that threshold are to go before the FIRB.

SEIPI President Danilo C. Lachica has called the threshold too low and warned of approval delays and investor withdrawals if the FIRB approves projects at the P1 billion level.

“If you think about it, that P1 billion is like $20 million and that’s way below the expansion, and even the reinvestment cost for multinationals. For one, it clips the authority of the PEZA (Philippine Economic Zone Authority). It will (also) be a disincentive for investors because of the potential red tape,” Mr. Lachica told the Arangkada online forum Tuesday.

SEIPI is targeting an increase in the threshold to at least $1 billion (P48 billion), he said.

“While (existing rules state) that if not approved for 45 days it is considered approved, (the period is) very very long. It’s too low, and it may create bottlenecks and bureaucracy in the process,” he added.

The AER, leaving the authority to approve investments to various independent IPAs could lead to “incoherence, inconsistency, and weakening accountability” and the uncertainty surrounding the decision-making may discourage investors.

“It is but proper that more diligence be put in place for bigger amounts of investments,” said AER Coordinator Filomeno S. Sta. Ana III in the statement. — Beatrice M. Laforga

Lost regional economic output projected at $322.2 billion in 2021

PHILIPPINE STAR/MICHAEL VARCAS

SOUTHEAST ASIA could lose up to $322.2 billion in economic output next year due to the continuing fallout from the pandemic, with the Philippines among the leading losers in the tourism and services industries, the Asian Development Bank (ADB) said.

“The pandemic generated enormous economic losses and our updated results (show an impact not just in) 2020, but we see that 2021 will also be adversely affected,” the bank’s Chief Economist Yasuyuki Sawada said during an ADB Institute webinar Tuesday.

According to his presentation, the region stands to lose at least $260.6 billion in economic output and $364.3 billion on the high side of the estimate range for 2020 due to the coronavirus crisis. Such losses are equivalent to 8.9-12.4% of nominal gross domestic product (GDP).

Next year’s estimated losses could be the equivalent of 5.4-11% of GDP, he said.

The estimates were based on an upcoming policy brief by the ADB, “The Impact of COVID-19 on Developing Asia: The Pandemic Extends into 2021.”

Mr. Sawada said tourism-dependent economies will continue to suffer outsized losses next year due to weak travel demand, as will those dependent on the services sector. The Philippines, Cambodia and Thailand will be Southeast Asia’s top losers in terms of tourism and services, he said.

The Philippines will also see a large drop-off in domestic tourism demand, while Cambodia and Thailand are projected to suffer more severely.

He said the services sector will continue to post the largest losses next year overall, with the Philippines, along with Cambodia and Thailand, to lead the region in declines for the segment.

The business, trade, personal and public services sectors, as well as manufacturing, utilities and construction, are the likeliest to sustain the heaviest losses in the Philippines next year, he said.

Globally, overall potential output losses could hit up to $7.588 trillion or 8.8% of GDP by year’s end, and up to $5.557 trillion or 6.5% of GDP in 2021, according to the ADB.

“While we do expect developing Asia to rebound strongly by 6.8% next year, we cannot anticipate a V-shaped recovery, as it will take some time for countries to recover to pre-pandemic levels of GDP growth,” ADB President Masatsugu Asakawa said in the same forum.

Fear, uncertainty and border closures during the pandemic have dampened economic output, pushing some, including the Philippines, into recession.

Small businesses are also among the hardest hit sectors, and lack of government support can worsen the damage to the sector, said Raghuram Rajan, a Finance professor at the University of Chicago’s Booth School, who served as governor of the Reserve Bank of India in 2013-2016.

Mr. Rajan said the government’s assistance to the sector, along with that provided by Mexico and developing countries in South Asia and Africa, has been “fairly limited,” causing outsized damage to the sector during the lockdown.

“Over and above the damage done by the virus is a damage done by the lack of relief which effectively will make the overall hit to potential growth of these countries significantly larger,” he said.

“Which is why it is really important, especially if you are a poor country, to ensure that the repair and reallocation is done as effectively as possible given the limited resources that these countries have so that the recovery is stronger than it might otherwise be, but also sustained over a longer period,” he added.

Around 73% of micro-, small-, and medium-sized enterprises in the Philippines shuttered operations during the lockdown in April and their access to financing was limited, restricting their ability to raise working capital, the ADB has estimated. — Beatrice M. Laforga

PHL coal-fired power capacity seen increasing by 135% despite moratorium on new projects

POWER generating capacity from coal-fired plants is expected to rise 135% after all plants currently being built become operational, after a moratorium on new builds was declared last month, Clean Air Asia (CAA) said in a report.

The estimate follows Energy Secretary Alfonso G. Cusi’s freeze on new coal-fired projects announced in October.

“The Philippines’ Department of Energy (DoE) announced… that a moratorium on coal will be implemented, but this does not cover planned CFPs (coal-fired power plants), which will result in a 135% increase in coal capacity once all are operational,” CAA, a non-government organization (NGO), said.

CAA also cited the country’s “lenient” regulation of emissions since the Clean Air Act became effective in 2000.

“The NOx (nitrogen oxide) emission standards even for ‘new’ CFPs (those operating after 2000) in the Philippines are still 10 times more lenient than those of India and five times more lenient than those of Indonesia,” the CAA said. It found that the Philippines had the “most lenient” sulfur dioxide emission standards.

“A review of Philippine industry emission standards has been underway since 2018, and is ongoing; however, no timeline for implementation has been discussed,” it said.

According to the NGO, the Philippines currently does not require a thorough health impact assessment (HIA) before approving a coal-fired power plant. “The HIA must be a priority and must be done not only in the application process, but throughout the lifetime of the CFP facility. In discussions about the ‘costs’ of CFP use, the externality costs of the health burden should always be prioritized and quantified as part of the HIA,” CAA said.

The Philippines was one of the CAA report’s five focus countries. Other countries included in the analysis are Bangladesh, Indonesia, Pakistan and Vietnam.

Citing official government data compiled by CAA and the Global Coal Plant Tracker, South and Southeast Asia make up 31% of all planned expansion in coal-fired capacity — with the five focus countries making up almost half of this total.

In a separate statement, the CAA recommended that the Philippines adopt stringent emission standards; improve the transparency of documents and data on CFPs; and enforce policy more diligently.

The Institute for Energy Economics and Financial Analysis (IEEFA) has estimated that around 10 gigawatts of greenfield coal plants will be affected by the DoE’s coal moratorium.

“The impact of the coal moratorium will fall most heavily on the Luzon grid and the project development aspirations of San Miguel and Meralco,” the IEEFA said. — Angelica Y. Yang

LGUs approve 2,220 telecom tower permits; 712 still pending

OVER 2,000 telecommunication tower applications have been approved and processed by local government units (LGUs), with little more than 700 remaining to be processed, Interior Secretary Eduardo M. Año said in a televised meeting with the President late Monday.

He reported approvals for 2,220 applications and pending applications at 712.

President Rodrigo R. Duterte ordered LGUs in August to act immediately on tower permit applications amid pressing demand for more bandwidth during the pandemic.

In a separate briefing Tuesday, Palace Spokesman Herminio L. Roque said the telecommunications industry no longer can blame the slow permit process for poor 2should respond after it urged the government to expedite approvals.

Binibigyan natin ang pagkakataon magpakitang gilas ang mga telecoms dahil ibinigay ng Presidente ang kahilingan nila (We must allow the industry a chance to show what it is capable of after the President granted its request),” he said.

Dapat mapabilis ang pagtayo nila ng tore…baka hindi iyon ang problema kasi hanggang ngayon hindi naman nag-i-improve (The tower erection process should speed up… maybe the permits are not the real problem because there has been little improvement so far),” he added. — Gillian M. Cortez

Dominguez points to rebound next year in pitch to potential Japanese investors

FINANCE Secretary Carlos G. Dominguez III briefed Japanese businesses on the government’s plan to engineer a sharp economic rebound next year as part of a pitch for more investment.

“Next year, we expect our economy to post a strong rebound. The challenges are immense, but we are determined to build back a better economy that our people deserve,” Mr. Dominguez said in a speech Tuesday.

“We hope that the Philippines’ strong fundamentals, fiscal stamina, and effective governance will continue to make us a promising investment destination and a growing market for Japanese investors,” he added.

Mr. Dominguez pointed to early signs of economic recovery such as the sustained increase in foreign direct investment net inflows, which rose 46.9% year on year to $637 million in August, and goods exports snapping a six-month losing streak with a rise of 2.2% to $6.22 billion in September.

He also cited the softer, but still double-digit decline of economic output in the third quarter. Gross domestic product fell 11.5% year on year in the three months to September, after a record 16.5% contraction in the second quarter.

“These green shoots indicate that the Philippine economy is on the mend. The path is clearer to a strong bounce back in 2021. The worst seems to be over for the country,” Mr. Dominguez said.

He said the Philippines and Japan can cooperate closer to boost disaster risk management initiatives.

“While strengthening our health system, we intend to continue finding more ways to revive the domestic economy. We are turning this crisis into an opportunity to boost the competitiveness of our manufacturing and agriculture sectors. We are also accelerating our move to a digital economy,” he said.

Asked to comment, the Japanese Chamber of Commerce and Industry of the Philippines, Inc. had not responded at the deadline.

Japan was the Philippines’ number two trading partner in September, after China.

Reforms have also helped strengthen the economy’s fundamentals, Mr. Dominguez said, such as the implementation of the Comprehensive Tax Reform Program; new ease of doing business policies; increased spending on infrastructure; the national ID system; and the Universal Health Care program.

“Our infrastructure program is a sound strategy strongly supported by our development partners, especially Japan, through soft project loans and official development assistance,” he said.

Mr. Dominguez said passing other stimulus measures will ensure a sustained economic recovery, which includes the P4.5-trillion budget for 2021 and the bill that will allow state-run banks to establish special holding firms which will inject capital in companies deemed of strategic importance. — Beatrice M. Laforga

PPA estimates port traffic 6-10% below normal levels

THE Philippine Ports Authority (PPA) said it estimated port traffic to have declined at between 6% and 10% over the course of the pandemic, though it expects an uptick for the yearend holidays.

In a briefing Tuesday, PPA General Manager Jay Daniel R. Santiago said, “We are still lagging the normal (levels) of previous years… We are about 6 to 10% behind our traffic volume and even our cargo throughput.”

Mr. Santiago added that despite the drop in activity, the PPA remained optimistic because operations did not take a severe hit during the pandemic. Passengers and cargo throughput are expected to increase in the coming weeks.

“It may have decreased slightly but we are also surviving. We expect in the holidays that our passengers and cargo will increase in our ports. We are hoping that our recovery will continue,” he said.

Mr. Santiago said the ports were still operating after they were classified as an essential sector, allowing them to operate even during the strictest phase of the lockdown.

He also reported no layoffs in the industry. — Gillian M. Cortez

Gov’t wants graphic health warnings on vaping, heated tobacco products

LINDSAY FOX/PIXABAY

THE GOVERNMENT has ordered manufacturers, importers and sellers of vapor and heated tobacco products to print graphic health warnings on their packaging within 18 months,  according to the implementing rules and regulations of the laws taxing these products which were released Tuesday.

Joint Memorandum Circular (JMC) No. 003-2020, issued by various agencies including the Department of Health (DoH) and Department of Finance (DoF), ordered the health warnings as part of the implementation of the “sin tax” laws. The JMC serves as the implementing rules and regulations for vapor and heated tobacco products taxed under Republic Acts (RA) 11346 and 11467, which both amend the National Internal Revenue Code of 1997.

The rules also limit the sale of such products to persons who are at least 21 years old.

The DoH will issue templates for the health warning, including those for inserts and other advertising, outside packaging and labelling, and other packaging from domestic and overseas manufacturers.

“Manufacturers, distributors, importers and sellers of heated tobacco products and vapor products are given a period of 18 months from the effectivity of the rules to comply with the requirements of the Graphic Health Warnings Law,” according to the circular.

The Graphic Health Warnings Law is otherwise known as Republic Act 10643, signed in 2014.

The circular was issued by the DoH, the DoF, the Bureau of Internal Revenue (BIR), the Department of Budget and Management (DBM), and the Philippine Health Insurance Corp.

The DoH and the Food and Drug Administration (FDA) will act as the regulating agencies for manufacturers, importers, and sellers of such products, with authority over packaging, advertising and distribution of vapor and heated tobacco products. The FDA is also tasked with conducting scientific studies on the health impact of these products.

The DBM will determine how the funds raised from taxes collected from these products will be allocated and released to tobacco-producing provinces, as provided for by law.

The DoF and BIR will also determine the rules for setting floor prices for vapor and heated tobacco products.

RA 11346, signed in July 2019, and RA 11467, signed in January 2020, increased the taxes levied on the so-called “sin” products including vapor and heated tobacco products to raise more revenue for the Universal Health Care program while discouraging consumption of these products.

“Consumers should buy HTPs (heated tobacco products) and ENDs (electronic nicotine and non-nicotine delivery systems) products that pass the certification process of FDA. Product claims and labeling to inform consumers of product content ensures the consumers’ right to information as well as exercise his right to an intelligent choice,” consumer advocacy group Laban Konsyumer, Inc. President Victorio Mario A. Dimagiba said via Viber Tuesday. — Beatrice M. Laforga

Enabling, sustainable, and inclusive mindset to recovery

Into the “next normal,” the usual way of doing things cannot suffice. Our attitudes, the way we behave, and how we put things into perspective matter.

For one, the pandemic has overarchingly taught us and spelled out that government cannot be left on its own in managing the affairs of society. But with intersectoral and multi-stakeholder engagements, crisis and recovery could be a worthwhile and beneficial endeavor.

Stimulating the economy and bringing it to new heights cannot be done through the usual consumption-led approach. But with an investment-driven economy, more and better jobs could be provided to the population. In turn, such an arrangement directly bridges the gap between industry needs and education thrusts.

Recognizing the unique role of the private sector is also the prerequisite of realizing its full potential in catering to the socio-economic welfare of the country. The efficient and effective management of resources via linking society’s supply and demand chains would be at a new level and this is what the private sector specializes in.

Another critical social actor that needs to be emphasized and put in the forefront of recovery and development is civil society. Composed of nongovernmental organizations, the academe, tri-media, think tanks, and independent thought leaders, this represents a balancing force to curb corruption and promote good governance amid recovery.

And at the rate Philippine society is going, a great deal of forward-looking lessons can be gleaned not only from the first session of the Pilipinas Conference launched by Stratbase ADR Institute, dubbed “Rebooting the Economy Post-Pandemic: Cushioning the Long Emergency,” but in the succeeding sessions as well.

To avert further and future crises, a resilient recovery and development plan is needed to envelop an inclusive and multi-stakeholder recovery. Manufacturing, physical and digital infrastructure, consumption, remittances, environment, and agriculture necessitate a proportional emphasis based on the priorities of economy and government.

Aside from the health and economic crises that affronted us, the political health of our system equally requires attention. The loss of transparency, threats to elections, and militarization prod us to unceasingly uphold transparent and accountable governance. In a particular landscape, the rapid digitization of Filipino lives opens the window for the implementation of e-governance. Through e-governance, data could be harnessed and utilized in holding public servants accountable to their constituents.

In setting development goals for recovery, however, consultation should be done with the different sectors in society. Government leaders cannot simply manifest their “strong political will” at the onset of a crisis and then suddenly wane in its duration. In this line, the private sector should steadfastly be the driving force of our economy, while simultaneously promoting social responsibility.

The global economic turmoil was caused by the lockdowns and movement restrictions to impede, if not stop, the spread of the virus. Our country was thrown into an economic tailspin and we are facing economic pessimism and contraction. As a result, the disruption of the supply chain triggered recession and the accelerating velocity of economic activities slowed to a turtle’s pace.

It is noteworthy that the private sector has proven to be a core component of our nation’s recovery. Business leaders will continue to share their short- and long-term outlooks on challenges and threats that we face in a post-pandemic world.

The challenges of 2020 — the decline of traditional growth drivers such as consumption, remittances and services, the technical recession, the pains in striking a balance between economic health and public health, the political health of our system being compromised under “emergency powers,” the weak social protection, the emerging regional political-security environment, the need for climate resilient sustainable communities, and the judicious approach to avert more crisis and promote recovery — should be our springboard onward to 2021.

Crafting the “next normal” must be guided by the chief principle of how to translate challenges and crises into opportunities should the next year prove to be another “long emergency” for Filipinos.

From this new normal, to navigate our society through the crisis and veer toward recovery and growth, demands a rethinking and an eventual changing of mentality.

What we need is an investment-led economy that is capable of making growth more sustainable and inclusive by creating jobs and providing stable incomes to countless Filipinos.

What we need are fruitful government-private sector partnerships and a vibrant citizenship to strengthen society’s resilience.

 

Victor Andres “Dindo” C. Manhit is the President of Stratbase ADR Institute.

Technology innovators and drivers as heroes

I guess you could say that the kind of people and nation we become is largely determined by the kind of people we admire. Because of the power of the media, in general, our people tend to look up to celebrities, whether famous or notorious. This can be seen in the kind of leaders we elect, and the kind of careers our children aspire for.

Today, our heroes are a boxer, beauty queens, an ill-mannered and controversial president, some good looking movie stars and other entertainers. In terms of careers, the most prestigious is that of doctor. Lawyering is another career aspired to, given how many still take the bar exams, despite the pathetic state of our justice system.

Sadly, there seems little regard for scientists and engineers. But if we look to the future, the world belongs to these experts in making and changing the way things are made or done. Even today, it is obvious which are the most successful nations. The United States, China, Japan, South Korea, Germany, and many countries in Europe. These countries have made great strides in making life more comfortable and pleasant for their citizens and the rest of the world because of technological and scientific breakthroughs made by some of their highly educated citizens. Henry Ford, Bill Gates, Frederick Smith of Fedex, Jack Ma of Alibaba, Amazon’s Jeff Bezos, Larry Page and Sergev Brin of Google, Akiro Morita of Sony, and many innovators in communications technology.

What we don’t actually realize is that we have in fact some cases of Filipinos who have made world class innovations in how to make or do things. They just have not been given much attention and have almost disappeared from our formal history.

Perhaps the most successful in terms of economic success is Diosdado “Dado” Banatao, the son of a poor farmer from Cagayan Valley. He managed to get an engineering degree from the Mapua Institute of Technology (bravo to that school) and later got a job at Boeing in California, helping to design some elements of their aircraft. He eventually got into Stanford University for a degree in computer sciences and worked in neighboring Silicon Valley. His brilliance, creativity and hard work helped him develop the microchips which were adopted by NASA and eventually by IT firms such as Microsoft. Banatao is a dollar millionaire, perhaps even a billionaire. He has also gotten involved with some IT education programs in the Philippines, including those in the University of the Philippines and the Asian Institute of Management. Dado Banatao certainly deserves to be hyped as a real hero by our people. He has helped to change the way the world does things today. Someone to be emulated by our youth as demonstrating the limitless possibilities for anyone who is willing to work hard.

Another deserving model is Dr. Fe Del Mundo, the first female accepted into Harvard Medical School. Dr. Del Mundo, who founded and ran the Children’s Medical Center, did not limit her pediatric practice to urban children. She invented a bamboo-based incubator kit, appropriate technology in our country where millions of families still do not have access to the formal healthcare system. It would be interesting to know if this invention is being used extensively in isolated rural areas today. I understand it is used in Indonesia.

Dr. Conrado Dayrit pioneered studies that discovered and promoted the healthy values of coconut oil. Today, his son, Toby Dayrit, continues to advocate the benefits from coconut based products. Virgin coconut oil is an ingredient used in the globally successful hypoallergenic skin and hair care brands developed by dermatologist Dr. Vermen Verallo-Rowell. They have clinics in New York, Paris, Tokyo, London and other key cities in the world.

Gregorio Y. Zara, a national scientist, invented the first two-way videophone.

Dr. Justino Arboleda, an agricultural engineer from Bicol who earned a doctorate from Tokyo University, invented the “coco-net” which is being used in many construction projects, including those in public works, as a low cost innovation in soil erosion control. He also exports coco peat to Australia for use in their cattle farms and as inputs to fertilizer, and coco fiber to China, which is used to firm up bed mattresses. The demand for mattresses has grown as more and more families in China have become more prosperous and no longer want to sleep on hard floors. Arboleda’s coconet production system involves many families in the provinces whom he trained in the production system, enabling them to rise above the poverty line.

Jaime “Jim” Imperial Ayala, a Harvard MBA graduate who came home to the Philippines as country director for the consulting firm McKinsey, eventually joined Ayala Land as its CEO. Today, he has become a social entrepreneur, disseminating the widespread use of a solar-powered lamp in isolated areas around the country. Jim Ayala was motivated by his embrace of a Bible-based Christianity; and he and his family have made many sacrifices, including selling some properties, to fulfill his dream of making life better for rural families. The solar lamp, which was invented by a Stanford student, helps the children study their lessons. It also helps fisher folk who go out to sea at night. Ayala’s management degree has helped him develop a market system in which the rural poor are able to pay for the lamp with microfinance loans. The feedback is positive. The payments are up to date; and the rural families find that the lamp has enabled the children to do well in school; and saved them money from fuel used in their old fire-hazard lamps. One day, perhaps, this social enterprise can realize profits, if we go by C.K. Prahalad’s thinking in his book that there is fortune to be made at the bottom of the pyramid. This could encourage courageous business investors to look for opportunities to do well while doing good.

Perhaps the Departments of Education, Science and Technology, Agriculture, and Trade can team up to produce and disseminate educational materials to propagate and popularize technology innovators and drivers as our new heroes. There is much that can be done online. Perhaps it is a little late for the present generation; but the future ones are still promising.

We need new heroes. Heroes who make and do useful things that make life better for our people.

 

Teresa S. Abesamis is a former professor at the Asian Institute of Management and Fellow of the Development Academy of the Philippines.

tsabesamis0114@yahoo.com

Calibrating the ease of doing business in the time of the COVID-19 pandemic

With the Philippine economy battling a raging pandemic, there is a great imperative to help business entities weather the crisis by easing the process of doing business. Cognizant of this, the Anti Red Tape Authority (ARTA) issued Memorandum Circular No. 6 Series of 2020 which provides for the guidelines on the issuance of permits and licenses under the “new normal.”

It complements Republic Act (RA) No. 11032, otherwise known as the Ease of Doing Business and Efficient Government Service Delivery Act of 2018. The memorandum circular was issued to impress the urgency of updating regulatory procedures and documentary requirements of most government agencies as they are not designed to adapt to the “new normal” of physical distancing and limited mobility brought about by the COVID-19. It likewise highlighted that the current pandemic is not an excuse for government agencies not to adhere to the prescribed processing times.

Under RA 11032, government agencies are mandated to render service within the prescribed processing time of three days for simple transactions, seven days for complex transactions, and 20 working days for highly technical transactions or for applications or requests involving activities which pose danger to public health, public safety, public morals and public policy, as classified in their respective Citizen’s Charter. Pursuant to the automatic approval provision, after the lapse of the prescribed processing times, all remaining unacted applications, where the submitted requirements are complete and the appropriate fees paid, shall be deemed automatically approved. In view thereof, the ARTA, through the memorandum circular, underlined that the burden is now shifted to the government agencies, who must act on the application within the prescribed processing time stated under their respective Citizen’s Charters. The presumption that the application is complete and is in order shall prevail, unless there is a notice of disapproval or a notice requesting for extension from the concerned government agencies duly received by the applicant within the prescribed processing time.

While the government adheres to the Zero-Contact Policy in the processing of applications, the memorandum circular emphasized that it should not be used as a tool in denying government service to the transacting public who are requesting for information on their applications. Government agencies are encouraged to use e-mail, their website, or hotlines to address inquiries of applicants. They are likewise required to set up an online processing system and payment gateway for accepting applications and digital payments for permits, licenses, and clearances.

Unless considered strictly necessary, requirements for meetings or interviews with the applicant shall be removed. For low risk applications, a self-declaration may be required from the applicant, in lieu of an inspection. The use of available secure technological platforms for inspections, the conduct of one-time joint inspection when possible, deputizing other government agencies to conduct the inspections for the other, and other appropriate alternative modes of inspection, are also means which the various government agencies can utilize to adapt to the new normal. If the conduct of physical inspection is a mandatory and non-negotiable requirement, government agencies are required to strictly observe contactless inspections and adhere to minimum public health standards as defined under the Omnibus Guidelines on the Implementation of Community Quarantine in the Philippines to suppress transmission of COVID-19.

Consistent with the Whole of Government Approach, which advocates for different government agencies to work together and integrate their processes, the ARTA strongly recommended in the memorandum circular data sharing among government agencies. Data sharing allows for government agencies to have up-to-date and readily available information for the efficient delivery of government services and to calibrate their responses to the current needs of the public. More importantly, it allows for the unhampered exchange of information between government agencies requiring the same information and documentary requirements, which will in turn ease the burden of applicants from having to comply with duplicate submission of documents that have already been provided as part of the application process by other government agencies.

With the simplification and streamlining of the business processes, it is hoped that business entities will have the much needed assistance in navigating through the debilitating effects of the COVID-19 pandemic, and allow them to focus on assisting the government in sustaining the economy. In the long term, if the guidelines in the memorandum circular are properly adhered to it will also support the groundwork to increase the productivity, efficiency, and effectiveness of government agencies in cultivating a thriving business climate.

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.

 

Genie Celini D. Nuevo is a Senior Associate of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW), Davao Branch.

(6382) 224-0996

gdnuevo@accralaw.com

Drones have raised the odds and risks of small wars  

A MAJOR HERO of two recent conflicts — in Libya and in Nagorno-Karabakh — isn’t even human. It’s an unmanned aerial vehicle (UAV), or drone, called the Bayraktar TB2 and made by Baykar, a Turkish company in which President Recep Tayyip Erdogan’s son-in-law, Selçuk Bayraktar, serves as the chief technical officer.

In Libya last year, the TB2 scored some successes against a vaunted Russian anti-aircraft system, Pantsir, helping the United Nations-recognized government of Fayez al-Sarraj hold Tripoli against the onslaught of General Khalifa Haftar, who had armed himself with the Pantsirs.

In Nagorno-Karabakh this fall, the same drone was instrumental in unleashing hell on Armenian tanks, artillery, and, again, some Russian-made anti-aircraft equipment. It helped bring about Azerbaijan’s decisive victory and a Moscow-brokered peace deal that returned to Azerbaijan most of the territory it lost in a previous war in the 1990s.

That UAVs can play such a visible part in modern wars is a big part of their appeal. As Ulrike Franke of the European Council on Foreign Relations, whose area of expertise includes drone warfare, pointed out in a Twitter thread, “using drones is like having a film crew with you.” The footage filmed by the unmanned aircraft as they attack is often used by governments for propaganda purposes, and it’s far more convincing than the usual conflicting claims by belligerents; independent observers use it to verify the reports.

An even bigger advantage, however, comes from how Turkey and its allies — the al-Sarraj government and the Azerbaijani regime of President Ilham Aliyev — have used drones to upset the offense-defense balance. Whether or not you subscribe to the theory that wars will be fought when the cost of attacking is much lower than the cost of defending, it is both intuitively clear and experimentally proven that losing a drone, or two or three, is less painful, and carries a lower cost, than losing a tank or a manned aircraft. Sending drones into battle is a lot like playing a computer game — and indeed, gamers may make better UAV operators than trained pilots. In both the Libyan and Karabakh wars, the drone operators apparently took a lot of risks to figure out the opposing side’s vulnerabilities, caring relatively little if they lost a UAV or two along the way.

In addition to the relatively costly TB2s — the price tag is several million dollars apiece, not including control centers — Azerbaijan used pretty much anything that could fly, including old Soviet An-2 agricultural planes refitted into UAVs. It also bought kamikaze drones from Israel.

This use of relatively disposable drones has created an offense-defense balance in real-life wars that is more typical of cyberspace, where the attacker has a distinct cost advantage (though some argue that’s mostly because defenders just aren’t nimble enough). Playing whack-a-mole against drones is a lot like chasing hackers.

The shift toward PlayStation reality isn’t necessarily reshaping hypothetical conflicts between major military powers. Superiority in traditional aircraft can still trump the drone advantage. The defense lobby has an interest in continuing to make and sell expensive manned aircraft, and the US and Russia will continue to buy and upgrade them because of the planes’ range and sheer destructive power. But, as Franke pointed out, “for smaller states, which do have air forces, but only have a limited number of aircraft — as is the case for both Armenia and Azerbaijan — drones are quite an important contribution because they boost aerial capabilities.”

Drones, however, can be a nuisance to major powers — just ask Russia. Anyone can build a drone, as Islamist militants proved in Syria when they sent a swarm of basic UAVs against the Russian base in Hmeimim, Syria, in 2018. The attack was thwarted, but it made clear that less protected targets could be hit in a similar fashion.

The rise of the drone has also created a problem for Russia by sowing doubts about its anti-aircraft systems — one of the country’s biggest defense exports. Armenia bet on these products (although perhaps not the best or most modern ones) and lost. After the Pantsir ran into trouble in Libya, the Russian military’s official weekly Zvezda denied the Pantsir’s humiliating vulnerability to the Turkish drones; yet even as it did so, it allowed that the anti-aircraft system has a “blind zone” that an adversary can learn to penetrate.

The Russian propaganda machine has taken pains to reassure the populace, and the Russian defense industry’s clients, that the country has an answer to the UAV threat. Various websites have spread stories about the use of the Krasukha-4 electronic warfare system to help Armenia avoid a total defeat. The Krasukha, first deployed in Syria in 2015, jams radar and GPS signals as well as other electronic communications. Theoretically, it can render drones helpless. Whether it was really used in the Karabakh war was never officially confirmed; General Movses Hakobyan, a top Armenian military official who resigned after the defeat, said Armenia managed to thwart the Bayraktar TB2 for four days when given the use of a different, newer Russian electronic warfare system, Pole-21, first received by the Russian military last year.

But while Russia has emphasized developing its capacity for such electronic warfare, its effectiveness against tactics pioneered by Turkey and its allies is unclear. Jamming, for instance, could devolve into just another game of whack-a-mole.

Ukrainians, for one, see some potential in using drones against Russia-backed forces. Last year, Ukraine signed a $69-million deal with Baykar to buy six TB2s, control equipment, and ammunition. Ukraine is now reportedly working with the Turkish company to launch local production. The example of Azerbaijan’s successful attack on Karabakh is inspiring to Ukrainian leaders, who haven’t given up on reclaiming the country’s east, now controlled by pro-Russian separatists.

Russia, however, isn’t the only major military power that should worry about the proliferation of drones. Any country or military bloc that conducts overseas operations and gets involved in local conflicts will likely have to deal with the growing threat. According to a study by Michael Horowitz of the University of Pennsylvania and his collaborators, of the 22 countries that possess armed drones now, 19 have acquired them since 2010, and 14 since 2014, most of them thanks to the “supply shock” of China’s 2011 entry into the market. More than 20 other countries are pursuing the capability, Horowitz found. It is, among other things, a pursuit of status: Drones are synonymous with technological innovation.

Intervention in the deadly computer games of tomorrow could be fraught with embarrassment, or worse, for the big players. And, if the offense-defense balance theory is correct, such interventions will be called for more frequently: Going on the attack is no longer as scary or as expensive as it used to be.

BLOOMBERG OPINION