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Government take since Mile Long takeover at nearly P205 million

THE government generated a net P205.76 million from rents and parking fees from the Mile Long property in Makati, more than two years after it was vacated by the former leaseholders.

Citing a report from the Privatization Management Office (PMO), the Department of Finance (DoF) said collections totaled P262.68 million between August 2017 and January 2020. Receivables from the 2.2-hectare property total P2.56 million, which would bring the total to P265.25 million.

Expenses for managing the property over 28 months amounted to P59.48 million, Chief Privatization Officer Gerard L. Chan said, leaving the government with P205.76 million.

This was equivalent to a P7 million monthly take for the government, which Mr. Chan said compared with the 14-year period prior to PMO’s takeover during which the government collected nothing.

The property, currently being administered by the PMO, is nearly 73% occupied as of last month, with 131 establishments occupying 227 rental units out of the 312 available.

Of the 85 units left up for rent, Mr. Chan said 22 are reserved for the Supreme Court, which plans to locate some of its offices in the Sunvar Plaza portion of the Mile Long lot.

President Rodrigo R. Duterte ordered the Bases Conversion and Development Authority (BCDA) to re-develop the property, income from which will go to the retirement funds of the Armed Forces of the Philippines and Philippine National Police.

Finance Secretary Carlos G. Dominguez III has said a technical working group is ready to implement the redevelopment plan and that a meeting will be convened this week “to finalize the plans and timetable” of the project.

The group will be made up of representatives from BCDA, PMO, DoF, Department of Budget and Management, and the Bureau of the Treasury.

Earlier Mr. Chan said the plan calls for the redevelopment in four phases via a public-private partnership, allowing the government to generate recurring income during the development period.

The initial proposal is for a mixed-used residential and commercial development including offices and a transportation hub.

The 2.2-hectare property was previously occupied by Sunvar Realty Development Corp. A legal dispute with the Rufino-Prieto family-owned real estate firm was finally decided by a Makati court in favor of the government in August 2017. — Beatrice M. Laforga

China firms cut staff on virus outbreak as Xi vows no large-scale layoffs

SHANGHAI — A Chinese media company said it will lay off 500 employees due to the coronavirus outbreak, the latest among a string of firms to do so in the past two weeks as the epidemic takes a toll on small-to-medium sized businesses.

Xinchao Media, which places advertisements in elevators, will cut 10% of its workforce to “ensure survival,” the company said in a post on its official WeChat account on Monday, which carried the transcript of an internal speech by CEO Zhang Jixue.

“To overcome the epidemic, you have to step on the brakes, jam the cash flow, reduce costs,” Zhang said, as he noted the company’s cash reserve of 1 billion yuan ($143 million) would likely be enough for only 6-7 months in the absence of income.

The job cuts come even as President Xi Jinping said the government would prevent large-scale layoffs caused by the virus outbreak — which has killed more than a 1,000 people in mainland China and infected over 40,000.

Authorities said on Tuesday they will roll out measures to stabilize jobs.

But many companies are hurting from disruptions felt since late-January after local governments extended Lunar New Year holidays and urged people to stay home.

“It is possible that the coronavirus could result in two to three million lost jobs in the first quarter,” said Nie Wen, an analyst from financial firm Hwabao Trust.

While the job losses are likely to be temporary, authorities need to step up support to small firms as many of them are highly indebted and have cashflow issues and “may not make it through,” he added.

DISRUPTIONS
Chinese restaurant chain Xibei, which has over 360 outlets, has said it is worried about wages for its roughly 20,000 workers given how the epidemic had impacted its income.

“We need 156 million yuan a month to pay our workers, and if the epidemic continues, and cash flow continues to be inadequate, we will not be able to hold up for much longer,” it said on its official Weibo account.

In Beijing, only 11,500 restaurants were operational mid last week, or 13% of the total, the Beijing Municipal Market Supervision Bureau said.

Beijing’s “Karaoke King” has said it wants to terminate contracts with all its 200 employees as it shut its outlets due to the outbreak, local media reports said. The karaoke chain did not immediately return calls made by Reuters on Tuesday.

And at least one company has said it will cease operations due to cash flow issues caused by the coronavirus.

Band of Brothers, a 13-year-old IT education chain, said on Weibo last week that it would stop enrolling students at its Beijing campus and disperse its employees, after the government ordered schools to delay reopenings. — Reuters

Landfill limitations seen as cue for WTE

WASTE LEVELS are estimated at nearly 22 million tons next year, growing 4% from current levels, making waste-to-energy facilities a “compelling” option, an environment official said.

The facilities need to come onstream with sanitary landfills unable to handle waste, Jesus Enrico Moses B. Salazar, assistant secretary at the Department of Environment and Natural Resources (DENR), told reporters after a Senate hearing on Tuesday.

“What we are saying is, we will be needing landfills in the next few years only because the landfills that are now being used will decline later,” he said.

Waste in the Philippines is expected to amount to 21,844,080 tons by 2021, up 3.9% from the current 21,016,523 tons, he said during the hearing. Metro Manila will generate about 3,527,484 tons, up 3.5%.

“It was projected based on population growth,” said Mr. Salazar, who is DENR assistant secretary for LGU concerns.

Sanitary landfills total 186, serving around 407 local government units (LGUs). The number translates to about 25% coverage of all LGUs, forcing the others to use unregulated dump sites, which is against the law.

Despite the DENR’s efforts to close the dump sites, about 331 remain, taking in the waste generated by LGUs that cannot afford the fee charged by landfill operators, Mr. Salazar said.

“That is a compelling reason for us to consider waste-to-energy (WTE) as one of the alternative modes of disposal at the same time generating energy from waste,” he said.

During the hearing, Senator Sherwin T. Gatchalian asked Mr. Salazar to submit the DENR’s estimate of how much landfill space is needed based on projections for waste generation.

“This is in consideration that we have landfills, but we all know marami pa ring dump site (there are still many dump sites),” said Mr. Gatchalian, who chairs the Senate energy committee.

Mr. Salazar said the DENR will still seek to implement Republic Act No. 9003 or the Ecological Solid Waste Management Act of 2000, which recommends reduction, reuse and recycling of waste, with only the residuals being fed into the waste-to-energy facility or placed in the landfill.

“It is very difficult to enforce the law. It is also very difficult for LGUs to comply with the requirements, but we have seen this happen in other areas in the Philippines,” he said.

“WTE is only one alternative, an option. It should not be the option. There are several things that we can still do,” he added.

DENR is the implementing agency of a study conducted by the National Economic and Development Authority to identify sites that are “highly economically viable” for waste-to-energy facilities, Mr. Salazar said.

The identified sites are: Hermosa, Bataan; Victoria, Tarlac; San Fernando, Pampanga; Meycauayan, Bulacan; Rodriguez, Rizal; Cabuyao, Laguna; Trece Martires, Cavite; Vitas transfer station in Metro Manila; and Cabanatuan, Nueva Ecija.

In terms of project cost, the largest would be the one in Vitas and Rodriguez at a budget of P11-12 billion. Four are considered medium-scale projects requiring an investment of P3.6 billion: Meycauayan, Cabuyao, Trece Martires, and San Fernando.

The rest are small-scale WTE facilities requiring a budget of P1.2 billion each.

Mr. Gatchalian, who said in a previous hearing that Senate Bill No. 363 was “complicated” to tackle because of related financial and environmental issues, has also raised during the hearing the monitoring and regulation of WTE facilities.

His proposed legislation seeks to establish a national energy policy and framework for facilities using waste-to-energy technologies. — Victor V. Saulon

Right-of-way still a bottleneck despite new law, think tank says

RIGHT-OF-WAY acquisition remains the bottleneck in implementing government infrastructure projects, the Congressional Policy and Budget Research Department (CPBRD) said.

“Despite the passage of the Right-of-Way (RoW) Law or Republic Act (RA) No. 10752 in 2016, issues surrounding the government’s RoW acquisition activities continue to hamper the timely implementation of the government’s infrastructure projects,” CPBRD said in a report.

RA 10752 facilitates the acquisition of RoW from landowners for national government infrastructure projects.

The CPBRD said that one of the main issues in RoW acquisition concerns property valuation.

“By offering the current market value (CMV), instead of the zonal value, during the negotiation stage, RA No. 10752 was expected to facilitate faster RoW acquisition and consequently accelerate the implementation of infrastructure projects. However, several negotiations failed due to valuation problems leading to the more complex and lengthy expropriation proceedings in the courts,” the CPBRD said.

To address this, the CPBRD recommended creating a “Valuation Board” which will set and decide on the “suitable compensation of properties to be acquired for RoW.”

The CPBRD also recommended a clarification of the prescribed procurement process for independent property appraisers to be accredited by the Bangko Sentral ng Pilipinas (BSP) and the terms of the just compensation for informal settlers.

“It is also unclear why RA No.10752 requires the procurement of independent appraisers accredited by the Bangko Sentral ng Pilipinas (BSP) when it is not within the functions of the BSP to accredit independent property appraisers. RA No. 10752 is also unclear on the just compensation of the informal settlers — Are they entitled to the relocation cost only or the replacement cost only, or both?” it said.

The Congressional think tank also sought clarification on the treatment of facilities of public and private utility providers in the event that the government intends to use these properties.

The CPBRD also sought to address the lack of disclosure regarding information critical to RoW acquisition.

“In other jurisdictions, lack of transparency creates uncertainties for IAs and property owners alike, which can delay the entire RoW acquisition process. Meanwhile, information-sharing helped develop trust between the IAs and property owners, and reduced the number of expropriation cases,” it said.

The CPBRD also recommended the creation of a “special court” for RoW cases and a centralized RoW unit for the national government.

The think tank said that a special court that is specifically dedicated for RoW cases will result in “faster handling and resolution of RoW expropriation cases.”

“RA No. 10752 provides that courts shall issue the Writ of Possession at most seven days after the IA has initiated the expropriation proceedings and after the payment of 100% zonal value of the property so that project implementation could begin. However, this is not strictly followed as most of the courts in the country are clogged with cases beyond their capacity to handle,” it said.

A centralized RoW acquisition unit will “give (full) attention to and work on all RoW acquisition efforts of the government.”

“This unit shall be mandated to accelerate the government’s RoW acquisition activities so that project construction could proceed on schedule and at a lower cost,” it said.

According to the CPBRD, the low disbursement rates of the RoW funds of the Department of Public Works and Highways (DPWH) at 5.7% in 2017 and 0.07% in 2018 are “particularly worrisome” because they are “indicative not only of the extent of unpaid RoW cases… but also on the overall delay in government’s RoW acquisition, and consequently infrastructure development.”

“Amid the administration’s “Build, Build, Build” (BBB) Program, it is important to address key issues on RoW acquisition to fast track the implementation and completion of vital infrastructure projects, minimize the wastage of government resources, and increase the economy’s productive capacity and overall competitiveness,” the CPBRD said. — Genshen L. Espedido

European Union to invest in ASEAN green-infrastructure fund

THE European Union (EU) is planning to invest in a program to develop green infrastructure in the Association of Southeast Asian Nations (ASEAN), known as the ASEAN Catalytic Green Finance Facility (ACGF), committing 50 million euros, the Asian Development Bank (ADB) said.

The ADB said in a statement that the EU will make the investment from its Asia Investment Facility while first ACGF-backed project will likely be approved later this year.

ACGF is part of the ASEAN Infrastructure Fund and is owned by ASEAN’s 10 member states and the ADB.

The Manila-based multilateral lender said Southeast Asia continues to face a funding gap of over $100 billion annually to meet their infrastructure needs.

“Our joint support through the ASEAN Catalytic Green Finance Facility will help ASEAN member states fight climate change; improve air, soil, and water quality; and improve environmental protection,” Anouj Mehta, ACGF Unit Head at ADB’s Southeast Asia Regional Department, was quoted as saying.

“This commitment reflects the European Union and ADB’s deepening collaboration to help Southeast Asian countries achieve the United Nations’ Sustainable Development Goals,” ADB’s Representative to Europe Robert Schoellhammer said.

The facility, launched in April, provides technical assistance and easier access to sovereign loans for ASEAN governments to fund their green infrastructure projects, especially those dealing with renewable energy and energy efficiency, sustainable urban transport, water supply and sanitation and climate-resilient agriculture. — Beatrice M. Laforga

‘Owning’ the Cure: Patent rights in the midst of an outbreak

As early as Dec. 31, 2019, the World Health Organization (WHO) was informed of the steadily increasing number of cases of pneumonia of unknown etiology detected in Wuhan City, Hubei Province of China. Over the next three weeks, researchers connected the spread of the outbreak to a market in Wuhan City and identified the cause of the contagious and potentially fatal respiratory disease to be a new type of coronavirus, which is now infamously known as the Novel Corona Virus (2019-nCoV).

As of Feb. 9, the WHO has reported over 812 deaths associated with 2019-nCoV, and 37,558 confirmed cases of 2019-nCoV worldwide with 37,251 confirmed cases in China alone. The first death reported outside of China was in the Philippines, a few days after the Philippine government confirmed the first case of 2019-nCoV in the country.

In a Feb. 4 statement, the Wuhan Institute of Virology confirmed that on Jan. 21 it applied for a patent in China for the use of Remdesivir, an experimental antiviral drug originally intended to treat the Ebola virus and developed by Gilead Sciences, Inc., an American pharmaceutical company.* The Chinese organization, in its statement, further claims that the patent application was filed out of national interest, and that it will not exercise its patent rights if “relevant foreign companies intend to contribute to China’s epidemic prevention and control.” Gilead Sciences, through its Chief Medical Officer Dr. Merdad Parsey, in its Jan. 31 Company Statement, stated that, although Remdesivir is not yet licensed or approved anywhere in the world and has not been demonstrated to be safe or effective for any use, Gilead Sciences is working closely with health authorities in China in conducting trials to test the efficacy of the drug in treating 2019-nCoV, especially considering that available data demonstrates that Remdesivir has shown activity against viral pathogens MERS and SARS, coronaviruses structurally similar to 2019-nCoV, in animal models.**

The legal requirements of patentability may vary in different jurisdictions but novelty, inventive step, and industrial applicability are basic conditions for an invention to be patentable. An invention, or in this case, particularly a drug or component thereof, may generally be considered novel if it is “not known to a body of existing knowledge in its technical field.” An invention must also be capable of industrial application or be useful “beyond mere theoretical phenomena.” The invention must also involve an inventive step or “that it could not be obviously deduced by a person having ordinary skill in the relevant technical field.”*** Thus, in order to be patentable, the patent application over the use of Remdesivir must satisfy the foregoing conditions and ultimately prove that use of the drug on the 2019-nCoV, which has shown activity against other coronaviruses, can be considered a new patentable use.

Although intellectual property rights like patent rights are territorial, patent registrations abroad can affect claims of novelty in other regions thus the local patent registration of the drug in China may affect pending and future patent applications involving the same drug in other jurisdictions. Moreover, the Wuhan Institute has clearly shown its intention to own the patent over the drug in other jurisdictions when it also stated that it will file patent applications for the use of Remdesivir under the Patent Cooperation Treaty (PCT) in other countries.

In the Philippine context, it is worth noting that regardless if a patent over any effective treatment of 2019-nCoV is obtained by any local or foreign entity, the Cheaper Medicines Act, amending the provision of Compulsory Licenses in the Intellectual Property Code, provides that the Director General of the Intellectual Property Office may grant a license to exploit a patented invention, even without the agreement or permission of the patent owner in favor of any person who has shown his capability to exploit the invention, under circumstances such as national emergency or other circumstances of extreme urgency, public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy as determined by the appropriate agency of the Government, among others. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) as well as the Doha Declaration on TRIPS and Public Health also affirms the right of States in prioritizing access to essential medicines over patent rights.

Indeed, in the battle against a devastating viral disease, time is of the essence. It may be a while before we know whether or not the patent application will be granted and, if so granted, the full extent of the effects of the grant of such patent as to the free use of the drug in other jurisdictions, and even in the future entry of business from foreign pharmaceutical companies in China. In the meantime, at the very least, it seems that all parties are focused on finding a cure and in saving as many lives as possible.

 

* China Wants to Patent Gilead’s Experimental Coronavirus Drug (Feb. 5, 2020), Bloomberg News. Retrieved from https://www.bloomberg.com/news/articles/2020-02-05/china-is-trying-to-patent-gilead-s-experimental-coronavirus-drug

** Gilead Sciences Statement on the Company’s Ongoing Response to the 2019 Novel Coronavirus (2019-nCoV) (Jan. 31, 2020) Gilead Sciences Company Statements Retrieved from https://www.gilead.com/news-and-press/company-statements/gilead-sciences-statement-on-the-company-ongoing-response-to-the-2019-new-coronavirus

*** World Intellectual Property Organization, Frequently Asked Questions: Patents, Retrieved from https://www.wipo.int/patents/en/faq_patents.html#accordion__collapse__04

 

This article is for general informational and educational purposes only and is not offered and does not constitute legal advice or legal opinion.

 

Mary Erica D. Manuel is an Associate of the Intellectual Property Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

8830-8000

mdmanuel@accralaw.com.

Scrapping the VFA would have consequences!

(This column was written before Foreign Affairs Secretary Teodoro Locsin, Jr. gave formal notice to the United States of the termination of a Visiting Forces Agreement yesterday. — Ed.)

During the senate hearing reviewing the 1999 Philippine-US Visiting Forces Agreement (VFA), Foreign Affairs Secretary Teodoro Locsin, Jr. discussed the adverse consequences of the agreement’s abrogation. He enumerated the security, trade, and economic benefits that the VFA has provided the country since 1999. The VFA is a Status of Forces Agreement, which provides the legal regulatory mechanism for the treatment of US military and civilian personnel during military exercises and conduct of Humanitarian Assistance and Disaster Relief (HADR) operations in the Philippines.

Aside from extending intelligence, training, and other technical assistance to the armed forces and police in combatting human trafficking, cyberattacks, the illicit drug trade, and terrorism. Further the VFA serves as a deterrent to Chinese aggressive actions in the South China Sea and he warned that its termination would adversely affect more than 300 joint trainings and would put an end to American security assistance to the Armed Forces of the Philippines (AFP), which is undergoing a modernization program. Finally, he said the VFA’s abrogation would render the 1951 Mutual Defense Treaty and the Enhanced Defense Cooperation Agreement “nothing but pieces of paper.”

The US and China are locked in a strategic competition over the issue of who will control the Indo-Pacific region. The US wants a Free and Open Indo-Pacific (FOIP) through the presence of forward-deployed American forces aimed at maintaining a regional balance of power system. This can only be possible if there are strong and vibrant US-alliances and security partners in the region.

On the other hand, China wants a closed and Sino-centric region where the People’s Liberation Army exercises strategic control over the first-island-chain and regional countries showing sensitivities to Chinese military, economic, and diplomatic interests. A possible outcome of this competition is an Indo-Pacific region dominated by a continental power, preventing the US from continuing its post 1945-role as the regional strategic offshore balancer and making it difficult for the US to project its power and influence on a global scale.

The South China Sea is a vital arena in the US-China strategic competition. Chinese actions in the disputed waters include: extensive island-building and base constructions in the various land features in South China Sea; building up its blue-water navy and coast guard; preventing its neighboring states from exploring and exploiting the natural resources; and launching the Belt and Road Initiative (BRI) to pacify its neighboring states with massive infrastructure building projects.

The Trump administration considers the South China Sea as an important front where it could apply a more vigorous approach towards China, and a vital laboratory for testing its construct for the FOIP. The US has bolstered its military presence and operations in the Indo-Pacific region and has also extended maritime-related security assistance to countries threatened by China’s maritime expansion.

The US is entering this dangerous phase of the competition with a key advantage in terms of its alliances — with Australia, Japan, the North Atlantic Treaty Organization, South Korea, and the Philippines. Any actions of these countries that will indicate that it’s moving away from the alliance into an illiberal China-led order means a defection and a betrayal of an ally that cannot be tolerated.

Since 2016, President Rodrigo Duterte has gravitated towards China by setting aside the 2016 Permanent Court of Arbitration Awards to the Philippines, shifting the Philippine-US alliance away from the China challenge to counter-terrorism and HADR, and preventing the Association of Southeast Asian Nations from coming out with any statement critical of Chinese actions in the South China Sea. Despite these moves, however, he kept the Philippine-US alliance intact. Abrogating the VFA, however, means that he does not really intend to keep the alliance intact. This is setting the stage for President Duterte to wean the Philippines away from the US and towards the Sino-centric regional order by 2022.

The US and the Soviet Union punished and invaded disloyal allies that defected from their alliances during the Cold War. The Soviet Union invaded and occupied Hungary in 1956 and Czechoslovakia in 1968 when the two Warsaw Pact states declared their intention to leave the alliance. American-sponsored coups ousted Jacobo Arbenz in Guatemala in 1954, and Salvador Allende in Chile in 1973 when those countries came under the control of left-leaning regimes. These countries realized too late the tragic dictum “the strong do what they have the power to and the weak accept what they have to accept…” It is prudent for President Duterte to reflect on this ageless aphorism before he decides whether or not to abrogate the VFA.

 

Dr. Renato de Castro is a trustee and convenor of the National Security and East Asian Affairs Program, Stratbase ADR Institute.

Bully statesmanship

Perhaps his dosage of the powerful pain killer Fentanyl has peaked, because it looks like President Rodrigo Duterte has gone on a wild rampage of using his powers to demonstrate his machismo against icons in business and international politics. First, it was against the water concessionaires: the Ayalas’ Manila Water and Metro Pacific’s Maynilad Water. This was followed soon enough by his foreign policy statement when the US visa of his friend Bato de la Rosa was canceled, that he would abrogate the Visiting Forces Agreement, a part of the Mutual Defense Treaty with the United States of America. Rappler, the online independent media company, continues to be under threat. And now, it is the ABS-CBN franchise which he has vowed to cancel.

Does the State really have valid public interest issues against these icons, or is Duterte just playing to his voters’ love for his iconoclasm? Or, is he just venting his resentment at those who failed to support his presidential campaign?

The demagoguery seems to be working because Rodrigo Duterte’s popularity is consistently high. After all, majority of the voters are poor, deprived, and most likely feeling powerless. I guess he enables them to feel part of his bombastic iconoclasm.

The massive popularity is enabling our President to rule as a “government of men” rather than of laws. Correction, government of “man.” Sadly, this hero posturing is working because there are hardly any objectors or critics among public figures, politicians and civic leaders alike. There seems to be an epidemic of meekness and obsequiousness. Government officials, elected or appointed, seem to be second guessing what the President wants them to say or do. Or else, choose to remain silent.

Fortunately, once in a while, the Presidential spokesman attempts to reinterpret the President’s impulsive announcements to soften the blow, or allow options in legislative or executive action by the President’s minions. Often the reinterpretation is in contradiction of the actual statements. But this has become SOP. The public has become so inured to this kind of double talk that we are in danger of becoming insensitive to the difference between truth and lies.

The minority in the Lower House has raised hell against the Executive branch’s intrusion into their territorial imperatives. The Constitution says that only Congress can grant, extend, or cancel public franchises. The opposition claims that 85 of the Lower House representatives are for extension of the ABS-CBN franchise. Is this the reason why SolGen Jose Calida, the President’s dependable “fixer,” has filed a quo warranto petition before the Supreme Court seeking to cancel the ABS-CBN franchise? This government has already successfully resorted to quo warranto when it expelled Maria Lourdes Sereno as Supreme Court Chief Justice. This, despite the Constitutional provision that a Supreme Court Justice can be removed from office only through impeachment.

The other side of the bullying, or its opposite counterpart, is the shameful obsequiousness toward China, which has violated our territorial sovereignty over the West Philippine Sea despite our victory in the UN Arbitral Court. There seems to also be lots of accommodation of other alleged election supporters: Former President Gloria Arroyo, the Marcos family, the Manny Villar family, and the notoriously wealthy religious leader Apollo Quiboloy, whose fund-raising activities in the USA has run into some legal controversies. Rodrigo Duterte himself openly admitted that the plane he used during his presidential campaign was lent by his good friend Quiboloy.

Is this the way state policy is to be formulated and executed? To the victors and their supporters belong the spoils? This smacks of primitive governance, if you can call it that. Where is the consideration for the public interest, now and in the future?

It is clear to see that rather than graduate into a civilized society to which it seemed we had been moving, we are retreating backwards into a primitive society. State policy has got to be based on rational evaluation of what is in the public interest. And it helps if there is open debate on the issues to help ensure rightness and fairness of choices. Freedom of the press and a strong opposition are needed to ensure issues are debated in public toward transparency and rationality in national policy making and execution. The business community, if it cares to, has the potential to help ensure this.

 

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

On gaining media exposure

Several years ago, I listened to a talk given by an editor of the San Francisco Examiner on how to package a story to give it half a chance of being published in the US papers. The session was held at the Philippine Consulate in San Francisco on the initiative of FilAm community leaders who had bewailed the lack of presence of Filipinos in the mainstream media.

I myself had often quipped that Pinoys either had to kill or get killed in order to land in the pages of the mainstream publications — and it couldn’t be just an ordinary killing, either. It had to be gruesome and sensational.

Gaining media exposure in Manila isn’t as difficult, but it still requires skill and expertise, usually provided by a professional publicist or PR agency.

The late Manila Mayor Antonio Villegas was said to have developed a technique for being constantly in the news, something that politicians and public figures consider essential for their sustained prominence.

The Villegas formula? You list down at least 52 topics — or one a week — of interest to the public; topics designed to create and enhance a desired reputation, personality and public image. Of the 52, make sure that at least 12 — or one a month — are hot or sensational or controversial topics.

Massage each topic and have it ripe and ready for release to media, if possible packaging it with a quotable quote (e.g. “I shall return!”). The topics will, of course, be supplemented by breaking news or current events worth hitchhiking on.

In this regard, timing is vital. Thus it is essential to have a publicist or PR counsel who has a finger on the public pulse and is good at spotting PR opportunities — or creating one.

Naturally, the system requires good media relations and the corresponding “logistics” to support the task (also referred to, sometimes, as envelopes).

A lifelong communications man like me can immediately spot these releases in media (also referred to as PR opportunities or enterprise stories). For instance, the current crisis caused by the corona virus or nCoV has created opportunities for the skilled PR folks to ride on.

While surfing the online editions of the Manila dailies, I couldn’t help reacting with amusement at some items revolving around the corona virus that are being passed off as news.

In one daily, newly minted Senator Bong Go is cited in the dramatic headline: “Go assures public of continued nCoV monitoring.”

The news item continues: “Sen. Christopher Lawrence ‘Bong’ Go guaranteed on Friday that, as chair of the Senate Committee on Health and Demography, he would continue to closely monitor the novel corona virus situation in the country and its threat to the health and lives of Filipinos.

“In an interview with reporters after the change of command ceremony for the presidential yacht BRP Ang Pangulo (Auxiliary Command Ship 25) on Friday, Feb. 7, in Davao City, Go said he would call for another Senate hearing if necessary to discuss the nCoV issue.”

This piece of PR work is supposed to generate the following positive reactions:

a. Wow, Senator Go is doing something about the terrible health crisis. Boy, are we glad we voted him into the Senate.

b. Wow, we in the Philippines can all feel safer now because Senator Bong Go has our back. He will conduct a Senate hearing.

c. Wow. Maybe Senator Go will find out who caused the virus and summon the culprit for a Senate investigation or ban him from the Philippines.

d. Thank you Senator Go. Go man, go! Bong Go for President.

Not to be outdone, the publicists (or PR agency) of Senator Cynthia Villar have also hitchhiked on the crisis but they have applied a positive spin on it.

Noting the havoc that the corona plague has wreaked on the tourism trade of China and environs, Villar is featured in the Manila dailies, as follows:

“Senator Villar: nCoV scare to boost local tourism.”

The “breaking news” reads: “Iriga City — Senator Cynthia Villar told hundreds of farmers during the 1st Agribusiness Tourism event here that the novel coronavirus (nCoV) would boost local tourism in the country.

“‘Since there’s a ban on any flight coming in from China, Hong Kong and Macao, so they can”t cruise for fear of getting infected of nCoV so we will rely on farm tourism and it is local tourism,’ Villar said.”

This upbeat treatment of a pandemic reminds me of comedian Bentot’s classic sick joke: “Punta kayo sa bahay. Maraming pagkain. Maraming tao. Patay ang tatay ko!” (Come to the house. There’s plenty of food. Lots of people. My father just died!)

One must admit, it takes a lot of creativity to apply a positive spin on the handiwork of the Grim Reaper. Was this the good senator’s idea or was it that of her publicist? I’m inclined to think that it was the latter. I cannot imagine the lady solon wanting to publicly announce a profit opportunity out of other people’s woes.

Speaking of applying a positive spin on bad news, another newly minted solon from Davao, Senator Ronald “Bato” de la Rosa could have used the negative reports about the cancellation of his 10-year US visa to enhance his public image.

If he had retained the services of a skilled PR counsel, the good senator could have emerged both patriotic, gracious, or statesmanlike, or all of the above.

Consider the following possible headlines:

a. Senator Bato’s reaction to visa cancellation: I prefer to go travel around the Philippines (Patriotic)

b. My US visa canceled? It’s Las Vegas’ loss, not mine! (Gracious)

c. We are not that petty, says Senator De la Rosa. American senators are still welcome to visit Davao without visas (Statesmanlike)

Senator Bato could also have been portrayed as steady as a rock in his stand against the drug menace:

a. A drug-free Philippines is more important than a trip to Las Vegas

b. I can help solve America’s drug problem, says Bato

Unfortunately, the reactions of Senator De la Rosa and President Duterte appeared petty and self-serving — as if the loss of a US visa is more important than the security and economic welfare of the Philippines. A loss of a PR opportunity.

In this regard, Senator Bong Go could upstage his fellow Duterte apostle by threatening to conduct a senate hearing on the possible cancellation of visa-free entry to the Philippines by Americans. But Senator Cynthia Villar could do better by putting a positive spin on her fellow solon’s problem:

“Villar: Cancellation of US visas good for Philippine domestic tourism.”

 

Greg B. Macabenta is an advertising and communications man shuttling between San Francisco and Manila and providing unique insights on issues from both perspectives.

gregmacabenta@hotmail.com

Our decadent energy system needs renewal

By Liam Denning

LIKE MANY of you, I’m sure, I read Ross Douthat’s essay on “The Age of Decadence” in Sunday’s New York Times while sprawled on a chaise, picking at my smashed avo and laudanum. Stirring from the languor, I wondered: How does energy fit with this thesis?

Our energy system is decadent at a fundamental level. Roughly four fifths of what is called primary energy consumption comes from burning fossil fuels, and thermodynamics ensure the majority of that kind of “consumption” is actually just waste heat. We absorb the pump price of buying four gallons of gasoline for the useful energy of one because that one remains incredibly energy-dense and convenient.

The convenience of fossil fuels gets at the other aspect of their decadence. As used currently, they are the definition of living for the moment. Modern society results from our use of coal, oil, and gas. But as Thomas Edison lamented a century ago, “we live like squatters,” burning the fixtures for heat, light, and transport.

Transitioning away from that model isn’t easy, especially for certain applications such as aviation, or for the many without decadent levels of income or wealth. Still, in the developed world, our unwillingness to comprehensively price fossil fuels’ externalities — especially greenhouse gas emissions — is at this point a conscious decision to prioritize excesses such as overbuilt SUVs over coming generations’ access to a safe and prosperous environment. What’s more decadent than that?

Emerging economies are in a different position, seeking raw calorific power to attain standards of living achieved by the West decades ago. This underpins a common riposte to calls for decarbonization, effectively casting oil majors and coal miners as the saviors of, say, Bangladeshi farmers. It’s a beguiling argument only if you assume nature gives a damn about inequities and define the standard of living in narrow terms. Diesel-run machinery and coal-fired electricity are undoubted boons to those struggling without them today. But then you must face the troublesome point that Bangladesh is ranked in the top 10 countries most vulnerable to the effects of climate change.

The seeming Gordian Knot of addressing climate change while simultaneously serving the world’s underpowered multitudes gets to the part of Douthat’s essay with which energy doesn’t fit. One of his signs of decadence is the apparent exhaustion of meaningful, and profitable, innovation in our self-indulgent, screen-addled 21st century economy: “We used to go to the moon; now we make movies about space.”

Fine. Juicero and all that. Point taken.

Yet the past 10 years have shown the energy sector to be anything but stagnant and inconsequential. US oil and gas production just engineered its biggest decade ever on the back of sheer experimentation (climate folks, hold that thought). It also saw the cost of wind and solar technology decline by approximately 50% and 90%, respectively (90% for lithium-ion battery storage, too). The UK, whose coal fields birthed the industrial revolution, now goes for days at a time without burning a single lump for its power. And electric vehicles — Edison’s forlorn dream — have gone from curio to dominating marginal growth in several major vehicle markets, including China’s. Work on a swarm of other potential breakthroughs, ranging from carbon capture to vehicle-to-grid power flows, continues.

As with any dynamic endeavor, there is mess, contradiction, and waste. The shale boom that helped tip coal into terminal decline in the US is partly built on the same cheap financing and weak governance underpinning the Silicon Valley flame-outs and deadbeats cited by Douthat. It is also heavily subsidized by the socialization of the costs of its emissions. Renewables have also seen their fair share of dead-end technologies and business models that run on sub-2% Treasuries just as much as photons. Meanwhile, Tesla Inc. has undoubtedly pushed electric vehicles further toward the mainstream; but sustained profitability, especially at levels commensurate with its valuation, remains elusive.

Yet the profound changes witnessed in energy over the past decade have been achieved even in the absence of overhauling its underlying system of incentives and penalties. Imagine what could be done if we actually priced the atmosphere and other natural resources as the scarce commodities they are, rather than just treating them as endless landfill. Besides the decadent West, the technologies encouraged by such signals could also offer sustainable answers to the Bangladeshi farmer’s privations without simultaneously raising profound risks for their descendants.

Like his look back at the men on the moon, Douthat quotes technology tycoon Peter Thiel’s lament that “we wanted flying cars, instead we got 140 characters.” Ah, the wryness. But then one recalls that, even as he yearns for meaningful innovation, Thiel also went out of his way to help elect a president who floats notions about wind-turbine noise causing cancer and leads a party where many reflexively dismiss inconvenient science and ditch their professed faith in market economics whenever carbon enters the equation. Even genius has its foibles.

The point is that there is plenty of innovation happening, and waiting to happen, in energy — if we choose to encourage it. We put a man on the moon because our priority was winning a Cold War. We haven’t yet found an existential need for flying cars.

Dealing with the deferred costs of modernization by retooling our energy grids and transportation is a challenge of even greater importance and scope, encompassing innovation in technology, markets, and how we organize our built environment. A cost-effective, scalable means of storing electrical energy for days, weeks or months at a time would do far more for society than another lunar landing.

All of this carries moonshot risks and Apollo-level opportunities for achievement. And it addresses issues that, even if we have persuaded ourselves otherwise, cut across political affiliation. If decadence is the problem, then few endeavors offer a route to renewal like fixing the ills of our energy system.

 

BLOOMBERG OPINION

$3 trillion can’t buy China out of virus trouble

By Satyajit Das

ASIA’S EMERGING-MARKET currencies are sliding as the coronavirus outbreak threatens to slow the region’s economy and drives outflows into the dollar. Investors may consider the region’s copious foreign-exchange reserves to be a buffer against severe economic dislocation, capital flight, and currency fluctuations. That would be a mistake.

Asia’s reserves have expanded vastly since the 1997-98 financial crisis to reach more than $5 trillion, 40% of the global total. Often cited as a strength, they may prove of limited value in any future crisis.

First, reserves aren’t profits. In addition to net export payments, they include foreign investment. The asset (reserve investments) is offset by a liability (the amount owed to foreign investors). China is the world’s biggest holder of reserves, with $3.1 trillion as of the end of January. While that looks substantial in dollar terms, it considers only one side of the coin. Since 2009, growth in China’s foreign-exchange assets has tracked accumulated investment liabilities.

Based on International Monetary Fund (IMF) criteria used to calculate the minimum required level of reserves, China needs around $3 trillion — roughly what it has now. The IMF calculations factor in short-term foreign-denominated debt, portfolio liabilities, broad money supply and the cover necessary for trade payments. Similar vulnerabilities exist in Indonesia, India, and South Africa, because foreign-currency, especially short-term, borrowing is high.

Some analysts have suggested that China could use its reserves to recapitalize the banking system, which is sure to be hit by the economic shutdown that authorities have imposed in an effort to slow the spread of the virus. Assuming a level of bad debts comparable to that of the late 1990s, the losses and recapitalization requirements would absorb around half or more of China’s total reserves. That would leave the country’s foreign-exchange chest below the IMF minimum.

In addition, reserves can be volatile. Intervention to support a currency can reduce holdings rapidly, as the recent experience of Turkey and Argentina shows. It is difficult to estimate unexpected outflows from disinvestment, unwinding of carry trades, exchange-traded fund redemptions or contingent payments such as collateral calls or derivative settlements. For example, potential claims on Chinese reserves from its Belt and Road Initiative and other international obligations are poorly understood.

Reserve investments are also difficult to realize. Most are in government bonds and other high-quality securities denominated in so-called G3 currencies — the US dollar, euro, and Japanese yen. The size of the holdings means that governments couldn’t sell them without a collapse in the price of assets such as US Treasuries and the dollar. That would inflict large losses on Asian investors.

Granted, many central banks have expanded the type of assets they buy. China has redirected its reserves into real investments in advanced economies and strategic projects such as belt and road. However, these aren’t liquid and are risky. China faces challenges in obtaining repayment of loans to developing countries. Such investments are also exposed to potential interference by the host country, especially during geopolitical or trade conflicts.

A further drawback of using reserves is that managing their currency and domestic liquidity effects is cumbersome. Repatriating realized reserves will force the domestic currency to appreciate, decreasing the nation’s international competitiveness. It will also reduce the value of foreign investments when measured in a country’s home currency. Large-scale accumulation and spending of reserves affects money supply. While central banks can manage this through sterilization operations, conflicts between reserve management and monetary policy objectives will create economic and financial instability.

Finally, the economic model underlying the reserves creates a complex financial interdependence between Asian central banks and advanced economies, termed the “fatal embrace” by the late Paul Volcker, former chairman of the Federal Reserve. Foreign-exchange reserves represent advances allowing the importing country to buy the exporter’s goods and services on credit. Withdrawing support would risk destroying the value of existing investments and damaging the borrowers’ real economy and export demand.

The interdependence runs deeper. Since 2009, the growth of developing-country reserves is highly correlated to the growth of the balance sheets of advanced-economy central banks, which has been driven by quantitative easing. Attracted by higher returns than available at home, investors moved capital into emerging markets, which in turn supported demand and economic activity in developed economies. This is evident in the increased reliance of many North American, European, and Japanese businesses on emerging economies for growth and earnings.

Unfortunately, this cheap capital encouraged rapid rises in debt and increased the risk of future financial instability in many emerging countries. The solution lies in international co-operation to create a new international monetary system and for surplus countries to boost domestic demand.

In a world of rising political tensions, trade wars and adherence to debt and export driven economic models, the prospects for that may appear bleak. Still, this is unfinished business the world will have to return to — once it has got past the economic shock of the coronavirus epidemic.

 

BLOOMBERG OPINION

New-look Kaya plunges into AFC Cup action vs Shan Utd

By Michael Angelo S. Murillo
Senior Reporter

LOCAL CLUB Kaya FC-Iloilo parades its recalibrated roster when it begins its AFC Cup 2020 campaign in an away match today against Shan United FC in Myanmar.

Making a return trip to the tournament, Kaya, playing in Group H, gets its bid rolling at the Thuwanna Stadium in Yangon at 5 p.m. (Philippine time), banking on a number of offseason acquisitions and changes which it hopes would propel it to improve on its showing last year where it failed to move past group play.

In the AFC Cup, only the top teams in the ASEAN groupings and the runner-up with the best record advance to the next round of competition.

Kaya this year will be parading five new players, two new coaches, and with former number two, Yu Hoshide, now leading the team.

The new players are Carlyle Mitchell (Trinidad & Tobago), Daizo Horikoshi (Japan), Takumi Uesato (Japan), Roberto Corsame (Philippines) and Marco Casambre (Philippines) while the new coaches are Rolando Cabañiero (GK Coach, Philippines) and Oliver Colina (Head Coach, Philippines).

Kaya is now without players Alfred Osei (Ghana), Jordan Mintah (Ghana), Darryl Roberts (Trinidad & Tobago), Yannick Tuason (Philippines) and Janrick Soriano (Philippines) and coaches Ref Cuaresma (GK Coach) Noel Marcaida (Head Coach).

“The coaching staff and three foreigners have been changed, but I have a strong feeling that we’ll be a better club — better than we were in the past few years,” said Mr. Hoshide in the lead-up.

“Half of me is really excited, and half of me is nervous. This group hasn’t played this level of competition yet. But now we have a chance to show what we’ve been doing in training,” he added.

This year’s competition marks the third time that Kaya is competing in the AFC Cup, and just like the previous years it was in it the team is not expecting things to be easy, beginning with Myanmar National League champion Shan United today.

But despite the expected tough task ahead, Mr. Hoshide said they would do everything to put themselves in a good position to compete game in and game out.

“It’s a really tough group, but we have a chance. We’re always challengers. There’s no need to be afraid. We will challenge in all games from the kickoff until the 90th minute. That’s my style — always challenge,” said Mr. Hoshide.

Apart from Shan United, also in Group H are Tampines Rovers (Singapore), and PSM Makassar (Indonesia).

The match between Kaya and Shan United will be aired live on FOX Sports 2.

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