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PHL defends bans on European pork

THE Philippine delegation to the World Trade Organization (WTO) defended Manila’s ban on pork imports from parts of Europe, citing the need to guard against pork from countries affected by African Swine Fever (ASF).

According to a statement forwarded by the Department of Agriculture (DA) to reporters, the Philippine WTO delegation said the import ban was based on ASF outbreaks duly reported to animal health authorities.

“Philippine officials review the scientific publications on ASF and monitor the OIE (World Organization for Animal Health) reports. These technical resources serve as the basis of Philippine government to restrict meat importations,” the delegation said.

The European Union had questioned the ban as “scientifically unjustified.”

“These restrictions do not adhere to agreed international standards, nor do they apply the regionalization principles towards the EU. They also maintain scientifically unjustified country-wide bans on imports of meat products from EU member states on grounds of ASF outbreak,” the EU said in a statement.

The objections were raised during a meeting of the WTO’s Committee on Sanitary and Phytosanitary Measures held on Nov. 7-8.

The Philippines bans the entry of pork and pork products from EU member states Belgium, Bulgaria, the Czech Republic, Germany, Hungary, Latvia, Poland, and Romania.

Specific to the ban on German and Czech pork, the EU asserted that Germany never reported an ASF outbreak, while the Czech Republic has been free from ASF for more than 18 months.

The Philippine delegation clarified that the ban was not due to ASF, but because “Germany did not comply with Philippine conditions for pork exports to the Philippines. Germany admitted they committed a mistake in sending a shipment of pork co-mingled with pork from ASF-infected Poland.”

“The Philippines does not belittle the interventions made by EU against ASF. But the veterinary authorities in the Philippines saw from the official reports from OIE and EU that the ASF disease continues to spread in Europe,” it said. — Vincent Mariel P. Galang

Salary accounts touted for boosting financial inclusivity

SALARY accounts are viewed as a potential channel for broadening financial inclusion by discouraging employees from paying cash wages, thereby helping workers develop a banking history.

The Department of Labor and Employment (DoLE) become the latest agency to take part in the financial inclusion steering committee led by the Bangko Sentral ng Pilipinas (BSP) and declared its intent to help workers, especially those in the agricultural sector, gain access to formal banking services.

“In 2017, there were only 23% of adults in the Philippines with formal bank accounts. The Global Findex Report further reveals that in 2017 only 6.6% of private sector wage earners receive their salaries through a formal account,” Labor Assistant Secretary Benjo S. Benavidez said in his speech at the Financial Inclusion Forum for the Labor Sector held at the BSP on Monday.

“These figures tell us about the status of our financial inclusion, which means that only a small percentage of our alliance advances to financial services. We have a situation where a prevailing mode of payment of wages is through manual cash disbursements,” he added.

Central Bank Governor Benjamin E. Diokno said that formal accounts can also benefit employers.

“When employers pay salaries directly to the account of their workers through PESONet, it can potentially lower administrative and overhead costs, and reduce risks associated with cash distributions during paydays,” he said in his closing remarks at the event.

PESONet is one of the automated clearing houses (ACHs) set up under the BSP’s National Retail Payments System which is responsible for all interbank fund transfer instructions and credits a specific amount to the receiver by the end of the banking day it was sent.

So far, 51 banks were involved in PESONet as of June and more are expected to join, according to Vicente T. de Villa III, BSP Managing Director for the Financial Technology sub-sector. He added however, that in the end, it is a “business decision” for banks to take part.

“To be part of the NRPS, a bank should have an electronic banking license (which) is an added authority… to the usual banking license because there are other prudential aspects to being able to transact digitally. So those that have generally passed our scrutiny, can apply for PESONET… it’s a business decision on their end,” he told reporters on the sidelines of the forum.

Mr. Benavidez said DoLE will promote payment of wages through formal accounts.

“Formal accounts translate to easy access to financial products, including savings, credit, insurance, and investment. Studies also show that having a formal account encourages savings and therefore workers become more resilient in times of unexpected financial shocks,” he said.

He also cited other countries with similar initiatives.

“For instance, in Thailand, the government requires payment of wages of fisheries workers through electronic bank transfers. This ensures transparency and helps address forced labor and abuses in the fishing industry,” Mr. Benavidez said.

“The Qatar government implemented a similar initiative in order to resolve payments or late payment of wages of migrant workers in the construction industry,” he added.

Meanwhile, BSP Managing Director Pia Bernadette Roman-Tayag said that beyond having formal accounts, Filipinos are also hindered by some requirements for opening accounts, such as minimum balances.

She added that the BSP’s Financial Inclusion Survey in 2017 found that 50% of those who responded said they saved. Of those, 70% save at home and not in formal financial institutions.

“Pag nasa bahay lang, puwedeng mawala, pwedeng magastos or madalas makuhanan (Savings kept at home can be lost or spent easily),” she said.

Ms. Roman-Tayag said the Financial Inclusion Survey 2017 found that 69% of unbanked Filipinos said that they have insufficient money to open an account while 53% of unbanked respondents said it was expensive to open an account. — Luz Wendy T. Noble

House bill seeks public smoking ban for vaping products

A PARTY-LIST legislator filed a bill on Monday regulating the sale and distribution of e-cigarettes and vaporizers and their use in public places, due to unresolved questions over their safety.

Rep. Bernadette Herrera-Dy of the Bagong Henerasyon Party List said she filed House Bill 5510, citing the potential hazards from second-hand inhalation by non-users.

“If enacted, vaping would be banned in most public places. Ngayon kasi kahit saan, may vaping na. Hindi lang naman sila ang nakakalanghap ng vapors, dahil pati ibang tao sa paligid nila, damay (Everywhere you go, there is vaping. It’s not only the users who breathe in the vapors but also people around them who are affected),” she said in a statement on Monday.

The bill will require that those who sell, offer for sale, distribute or transfer vapes and e-cigarettes must comply with Republic Act No. 8792 or the E-Commerce Act and RA 10173 or the Data Privacy Act of 2012. They will also need a certification from the proposed Inter-Agency Committee on Vaping.

Sales to minors will also be prohibited, as will advertising campaigns targeted at the young. The bill also hopes to regulate flavored products, which are typically sold to a youth market.

Violators are subject to a fine of P100,000-P500,000 or imprisonment, while foreigners are subject to deportation.

In June, the Department of Health (DoH) released Administrative Order No. 2019-0007 which requires the licensing of e-cigarettes and vaping producers, which is currently suspended due to an injunction issued by two Regional Trial Courts.

Legislators are also considering taxing e-cigarettes and vaping products. — Gillian M. Cortez

An overview of accounting and tax perspectives for financial instruments

Most companies will have financial instruments in their portfolios. Their purpose is solely for capital appreciation and income.

Let us look into the accounting and tax treatment of these financial instruments. This article is the first part of a two-part discussion on this topic.

WHAT IS A FINANCIAL INSTRUMENT?
A financial instrument (FI) is any contract that gives rise to a financial asset for the holder and a financial liability or equity instrument for the issuer.

Financial assets could be in the form of debt securities and/or equity securities. A debt security represents an obligation that is normally covered by a loan agreement and bonds payable while an equity security refers to ownership in a company as evidenced by shares of stock. The issuer could be a domestic company, foreign corporation and even a Philippine or foreign government institution. It is important to note that financial assets can be traded on market or can be held to maturity to provide efficient cash flow through via interest or dividends.

HOW ARE FINANCIAL INSTRUMENTS MEASURED AND CLASSIFIED?
For accounting purposes, the financial instrument is covered by Philippine Financial Reporting Standards (PFRS) 9 which took effect on Jan. 1, 2018. PFRS 9 replaced Philippine Accounting Standards (PAS) 39 which governs the recognition and measurement of FIs. The new standard states that the Financial Assets may be classified and measured at amortized cost or fair value approach.

Below is the comparison of the categories of Financial Assets under the new and old standards:

In accordance with PFRS 9, a financial asset is classified and measured at amortized cost if the asset is held with the business model objective of holding financial assets to collect the contractual cash flows that represent “Solely for Payment of Principal and Interest” (SPPI) on the principal outstanding. Moreover, a financial asset is classified and subsequently measured at FVOCI if it meets the SPPI criterion and is held in a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets. All other financial assets are measured at FVPL. In addition, PFRS 9 allows entities to make an irrevocable election to present subsequent changes in the fair value of the equity instruments that is not held for trading in other comprehensive income.

Note, here that the new standard requires the assessment of the contractual cash flow characteristics to properly categorize the instrument under the above classification.

For tax purposes, FIs are always measured at the contracted amount or transaction value. Hence, any incidental costs in the acquisition of the instrument such as commission, broker’s fees or any taxes paid are to be recognized separately as an outright expense. The classification of the financial assets will fall either as a capital asset or as an ordinary asset.

Section 34 of the Tax Code, as amended, defines capital assets as properties held by the taxpayer whether or not connected with his trade or business, but not including:

a. Stock in trade of the taxpayer or other property of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year; and

b. Property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business.

Ordinary assets, on the other hand, are assets not classified as capital assets. It is important to note that the taxpayer should properly classify whether the FI is a capital or an ordinary asset since the treatment of the gain or loss on disposal of the FIs will have different tax consequences.

Here is a summary of the applicable tax treatments of the disposal of the FIs:

1. Gain from the sale of an FI classified as an ordinary asset is included as part of the taxable income subject to the regular corporate income tax while the loss from the sale is considered deductible in full from gross income.

2. Gain from the sale of an FI classified as a capital asset is also reported as part of the taxable income subject to the regular tax but the loss from the disposal of such capital asset is deductible only to the extent of the capital gain from such sales. However, the limitation of the deductibility of the capital loss does not apply to a bank or trust company incorporated in the Philippines.

3. Net gain from the sale of shares of stock of a domestic corporation not traded and listed through a local stock exchange, if considered as a capital asset, is not reportable for regular corporate income tax since the transaction will be separately subject to a final tax. If the seller is a domestic corporation, it is subject to 15% final tax. Should the seller be a non-resident foreign corporation (NRFC), the net gain is subject to 5% for the first P100,000 and 10% in excess of the first P100,000. The loss from the sale of this type of asset is deductible only to the extent of the gain of the similar assets. If the NRFC is a resident of a country with whom the Philippine has a tax treaty, the treaty rate may apply.

Note, however, under the proposed Passive Income and Financial Intermediary Taxation Act (PIFITA) covered by House Bill. No. 304, such net gain on the sale of the stock of a NRFC will also be subject to a 15% final tax rate or treaty rate.

4. Gains realized from the sale of shares of stock listed and traded through a local stock exchange by sellers, other than dealers of securities, are exempt from the regular corporate tax, since the transaction is covered by the stock transaction tax of 6/10 of 1% of the gross selling price.

Note that under PIFITA, such percentage tax of 6/10 of 1% is proposed to be reduced annually beginning taxable year 2021 until it reaches 0% by 2026.

For accounting purposes, the gain or loss on the disposal of the FIs will always be based on the selling price against the carrying value of FIs. Such carrying value is remeasured after the initial recognition in the books due to changes to fair value, amortization, impairment or foreign exchange differences. Such gain or loss will be reported in the profit & loss statement. However, some gain or loss on the disposal may be directly reported under Other Comprehensive Income.

In the next article, we shall further discuss the details of differences in reporting both the accounting and tax perspectives of the transaction flow from: the acquisition of FIs, its subsequent measurement, and sale or disposal of the FIs.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Richard R. Ibarra is a senior manager of Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com.

San Beda, Letran battle one last time for crown

By Michael Angelo S. Murillo
Senior Reporter

THE best-of-three National Collegiate Athletic Association Season 95 men’s basketball championship series is down to one last game today with the defending champions San Beda Red Lions and the Letran Knights battling it out in Game Three at the Mall of Asia Arena.

Forced to a sudden death after the Lions staved off being dethroned with a gutsy 79-76 victory on Nov. 15, the series now see the protagonists out to give their all in the scheduled 4 p.m. contest for the right to be hailed as kings of hoops in the ongoing season of the country’s oldest collegiate league.

Much like in the series opener, Game Two of the NCAA Finals was nip-and-tuck and the outcome decided only in the closing moments of the game.

San Beda had a fiery start only to be caught by Letran in the second half.

Down the stretch the Knights had their chances to close out the series, including a potential go-ahead basket by Bonbon Batiller in the dying seconds, but could not complete them, sending the finals joust to a do-or-die.

James Canlas paced the Lions with 21 points to go along with seven rebounds and six assists while league most valuable player Calvin Oftana had a double-double of 17 points and 11 rebounds.

Veteran Clint Doliguez also finished with 17 points.

Severely tested anew after going spotless in the elimination round, San Beda coach Boyet Fernandez said he was very relieved that they were able to survive and expressed hope that they get to sustain, if not improve on, its clutch composure in today’s game.

“We are relieved that we got this win. It was not easy as Letran really came out prepared,” said Mr. Fernandez after their Game Two victory.

“I salute my players also. They really wanted to prove something today and that’s what character is. We had a loss, and everybody was against us, but the players didn’t really want to lose,” he added.

While rued the missed opportunity last time around to become NCAA champions anew after four years, the Knights said they are moving on and vowed to get the job done in Game Three.

Guard Fran Yu had Letran very much in the thick of the fight until leg cramps made him miss the closing minutes of the fourth quarter. His leadership and shot-making were sorely missed by Knights.

Yu top-scored for Letran with 23 points and five assists, with big man Larry Muyang finishing with 17 points and 10 boards.

Batiller, meanwhile, added 11 points.

Letran coach Bonnie Tan said post-Game Two that they will continue to play hard and give the Lions a tough challenge like in the previous two games, and hope it is enough to win them the NCAA title.

San Beda is looking for NCAA title number 23, and 11th in the last 13 years, while Letran is seeking its 18th title.

Azkals look to make it back-to-back wins in World Cup Asian qualifiers

By Michael Angelo S. Murillo
Senior Reporter

WINNER in its last game in the second round of the FIFA World Cup Asian Qualifiers, the Philippine men’s national football team looks to make it back-to-back wins when it takes on Group A leader Syria today in an away group match in Dubai.

Defeated Maldives, 2-1, in Male on Nov. 14, the Philippine Azkals (2-1-1), joint second with China (2-1-1) in Group A with seven points each, shoot for another victory to further pad their push in the continental qualifiers for the World Cup, which also serves as a qualifying step for the AFC Asian Cup.

The Philippines defeated Maldives in the latter’s home turf with goals from Iain Ramsay and John-Patrick Strauss.

After a tight first half that saw the teams deadlocked at nil-nil, the Azkals picked up the scoring early in the second fold, with Mr. Ramsay getting the first goal in the 52nd minute.

They continued to put pressure on the home team after, rewarded with another goal care of Mr. Strauss in the 68th minute.

Maldives desperately tried to make a comeback but could only get one point back on a goal from Naiz Hassan late in the match, handing the Azkals the win.

For Mr. Ramsay, the win bodes well as it shows the whole team coming along with a common push to help the Philippines’ cause.

”The whole squad has been positive. We have got a good group growing together, and we have some momentum going into the Syria match,” Mr. Ramsay was quoted as saying by the official Asian Football Confederation Web site.

“[Our coach] has got the team tactically right and we are working hard for each other, we are a tight-knit group,” added Mr. Ramsay, referring to coach Scott Cooper.

Apart from Messrs. Ramsay and Strauss, also part of the Azkals pool of player for this stretch of the qualifiers are goalkeepers Patrick Deyto, Neil Etheridge and Michael Falkesgaard, defenders Amani Aguinaldo, Carli De Murga, Patrick Kane, Daisuke Sato, Alvaro Silva, Martin Steuble and Luke Woodland.

Also part of the team are midfielders Angel Guirado, Mike Ott, Stephan Schrock, Curt Dizon, Mark Hartmann, OJ Porteria and Patrick Reichelt.

Included as well are Under-22 players Marco Casambre, Justin Baas, Edison Suerti and Yrick Gallantes.

Out to stop the Azkals today at the Rashid Stadium in Dubai, United Arab Emirates, is undefeated Group A leader Syria (4-0-0).

It is coming off a 2-1 victory over China also on Nov. 14.

Against the Philippines in an earlier match in the group on Sept. 5, the Syrians were solid to run away with a 5-2 victory.

In the second round of qualification, the Azkals are hoping to finish on top of the grouping, or at a least have one of the best four runner-up records among the eight groups, to advance to the next round of the World Cup qualifiers.

TV5 and Cignal launch ‘Sama-Sama sa SEA Games’ campaign

IN line with their duties as official broadcasters of the 30th Southeast Asian Games, TV5 and Cignal jointly launched the umbrella campaign “Sama-Sama sa SEA Games” yesterday.

Through the campaign, which was officially unveiled in ceremonies held at the Hotel Raffles Makati, 5, the No. 1 sports channel in the country, and Cignal, the country’s premier DTH satellite provider, hope to unite Filipinos locally and abroad to rally behind the Filipino athletes, and support them in the games.

Likewise, the campaign is a battle cry for the MVP Group that is working tirelessly together to provide audiences with the most comprehensive, up-to-date, and in-depth coverage on free-to-air, pay TV, and digital.

The Sama-Sama sa SEA Games campaign is also supported by Smart Communications, Inc.

“TV5 and Cignal TV will make it possible for everyone to watch the SEA Games 2019 live on TV and online,” said Cignal and TV5 President and CEO Jane Basas of the their broadcast campaign at the press conference yesterday.

For the Philippine Southeast Asian Games Organizing Committee (PHISGOC), the umbrella campaign of TV5 and Cignal is a welcome dimension to what it is angling to be the biggest and best hosted Games by the country so far.

This year marks the fourth time that the Philippines will host the SEA Games but the first since 2005.

It involves 11,000 athletes and officials from the 11 member nations, 9,000 volunteers, 530 events and 56 sports.

Forty-four venues have been short-listed for the event scattered in different parts of the country, including the world-class facilities at New Clark City in Tarlac.

TV5 and Cignal will bring the action right from the opening on Nov. 30 all the way to the final date of the Games on Dec. 11.

The broadcast will feature some of the top and known personalities in local sports broadcasting.

It will also make use of advanced technology, officials said, to make viewing for Filipinos an experience on its own.

For free-to-air, viewers can watch on TV5 and TV5 Plus.

TV5 will air basketball, boxing, billiards and badminton while TV5 Plus will air Esports, taekwondo, karatedo, wushu and weightlifting.

For Cignal subscribers the games can be viewed on One Sports plus three new channels, namely the SEA Games Channel, Team Pilipinas, and SEA Games News Channel which are exclusive for Cignal and SatLite subscribers.

On digital platform, meanwhile, there is ESPN5.com, the Cignal Play app plus three SEA Games-dedicated YouTube channels that will be available 24/7. — Michael Angelo S. Murillo

Azkals legend Phil Younghusband hangs up his boots

By Michael Angelo S. Murillo
Senior Reporter

THE local football community was caught by surprise on Monday night when Philippine Azkals legend and former captain Phil Younghusband announced his retirement.

Taking to social media, Mr. Younghusband, 32, said he was retiring from the game and setting his sights on a new adventure.

“Hanging up my boots! Thank you to my bosses, my coaches, team mates, competitors and all the supporters who have been part of my journey. See you all soon in a new adventure,” read his post on Instagram announcing his retirement from playing professional football.

His retirement marked an end to a more than a decade career, which included 108 appearances for the national men’s football squad where he scored 52 international goals.

After spending time with Chelsea FC in England in the mid-2000s, Filipino-British Younghusband took his talent here where he began as a member of the Under-21 and Under-23 teams.

He then moved to the seniors’ team where he was part of a group of players, which included his older brother James, Chieffy Caligdong and Ali Borromeo, among others, credited for the resurgence in appreciation for the sport of football in the country at the turn of this decade.

Mr. Younghusband was also a fixture in the local club tournament scene, playing for teams like Loyola Meralco Sparks and Davao Aguilas FC.

Earlier this year, he was part of the Azkals team which competed in the 2019 AFC Asian Cup, coming off the bench.

When news of his retirement broke out, fans and other football stakeholders did not waste time showing their gratitude to the former Azkals captain and paying tribute to him.

“We thank Phil Younghusband for his storied career with the Philippine Men’s National Team,” a statement from Philippine Football Federation president Mariano Araneta, Jr. read.

“His tremendous contribution for Philippine football will never be forgotten. May his legacy continue to inspire the next crop of football players,” it added.

Last July, Mr. Younghusband married his longtime girlfriend Margaret Hall in Canterbury in the United Kingdom.

Agribusiness and corporate farming

The good news about Philippines agriculture is that the average yield per hectare of many crops keeps rising, thanks to technological modernization. The bad news is that there is continuing land conversion from forest to agriculture — and residential, industrial, commercial — uses.

I checked data from the UN Food and Agriculture Organization (UN FAO) over the past five decades, I picked the Philippine crops with millions of tons of output in a year, meaning major crops. Sugarcane and pineapples have the highest productivity and crop intensity per hectare, although sugar yields were generally flat for five decades while pineapples showed consistent rise. Bananas reached 20+ tons/hectare/year in 2010-2012 but there were bad harvests in recent years. The biggest crops in terms of huge land use, with millions of hectares planted, are rice, coconuts, and corn, and it is here where average productivity is among the lowest in the country (see Table 1).

Then I checked the productivity of three crops for selected Asian countries. Surprisingly, despite the modern corporate farming of the Philippines’ pineapple and banana industry (although there are also huge backyard, small-scale pineapple and banana plantations), Indonesia has much bigger output per hectare in these crops than the Philippines (see Table 2).

Our rice industry needs to take the path taken by the banana and pineapple industries which have some big corporate farming growers in the Philippines. Wide areas — hundreds or thousands of hectares — are managed by few entities that employ the most modern crop sciences (agronomy, insectology, biotechnology, and molecular biology, etc.) and machines (tractors, irrigation, harvesters, drones, etc.).

Lands need not be owned by these corporate farms — they can be leased for five years or so, although a long-term lease of 15 years or more and wide corporate land ownership are preferable. Farm owners will just wait for their annual land rents plus the opportunity to work in these corporate farms and earn extra, more stable incomes.

The government’s endless, no timetable agrarian reform or forced redistribution of private farm lands — from Marcos’ 1972 agrarian reform to Cory Aquino’s 1998 CARP and extensions — is among the big hindrances to dynamic agribusiness (and mass housing) development in the country. Government should end this continuing rural business uncertainty.

Meanwhile, The Arangkada Philippines Project (TAPP) conference on Nov. 21 at the Marriot Hotel Manila will tackle the TAP (Tourism, Agribusiness and Power) as focused sectors. Local and foreign businesses and researchers in these and related sectors will learn new data and perspectives at this big event.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

Dark clouds and silver linings

In recent days, we’ve seen the passing of high-profile personalities who I’ve known one way or the other. It’s been a sobering year as age hurtles faster at warp speed toward the inevitable. As the saying goes, “We’ll never get out of this world alive.”

• Prospero “Boy” Nograles, former House Speaker (we called each other “primo”), who I interacted with for the passage of the RH Law.

• Franciso “Bobby” Mañosa, renowned architect and National Artist, who helped me conceptualize a War and Peace Museum on Corregidor when I was Secretary of Tourism.

• Eddie “Manoy” Garcia, multi-awarded actor, director and producer; honorary member of PMA “Marangal” Class 1974 to which I, too, belong.

• Aquilino “Nene” Pimentel, Jr., former Senate President, and author of the law that founded the Department of Interior and Local Government (DILG) in 1991, which I headed from 1992-96.

• John “Big John” Gokongwei, Jr., nation-builder, entrepreneur and philanthropist; a businessman’s businessman. I serviced his polyester needs for Robina Textiles when I was in Filsyn.

• Ernest Leung, Jr., former colleague in the 1990 RP-US Bases Talks and in the Ramos Cabinet; a dyed-in-the-wool financial wizard, patriot, nature lover and adventurer.

Some were not high profile. They were regular folks whose passage I mourn.

• Octavio “Tavoy” Labayen, brother of the late-Bishop Julio Labayen who kept faith with before, during, and after the electoral campaigns of 2016 and 2019.

• SPO4 Jimmy L. Caguioa, my long-time security officer from DILG days till after he retired from the service last year.

As if those personal shocks were not disturbing enough, the global unrest I read about today is seemingly everywhere. There may have varying triggers but the fuel is familiar: stagnating middle classes, stifled democracy, and the bone-deep conviction that things can be different — even if the alternative isn’t always clear.

Here’s a glimpse of what’s happening around the world:

• Lebanon: protests on a tax on WhatsApp and endemic corruption.

• Iraq: protests against poverty, corruption, and a miserable quality of life

• Iran: anti-fuel hike

• China: protests against corruption, abusive governance, environmental degradation, lack of religious freedom and civil liberties, one-party rule

• Hong Kong: protests against extradition and creeping authoritarianism.

• Indonesia: protests against a proposed jail sentence for pre-marital sex

• Algeria: protests against a fifth term for its president and military rule.

• UK: anti-Brexit and pro-Brexit protests

• France: protests against fuel and other tax hikes, social injustice

• Russia: anti-corruption and anti-dynasty protests

• Serbia: anti-political violence and authoritarian rule.

• Albania: anti-electoral cheating, corruption and organized crime in government.

• Spain: independence for Catalonia

• Brazil: anti-deforestation and corruption protests

• Chile: anti-fare hike and rampant inequality.

• Peru: anti-government protests and the country’s uncertain future

• Bolivia: anti-presidential term extension (4th) for Evo Morales

• Ecuador: anti-cancellation of austerity measures and fuel subsidies

• Venezuela: anti-authoritarian rule and economic hardships

• Colombia: anti-violence protests by indigenous peoples.

Freedom of information is placing 20th-century power structures under enormous pressure. There’s a social revolution with a growing demand for participatory democracy. The widening gaps between the haves and have-nots are radicalizing the youth. Extinction Rebellion protests are gaining traction worldwide at the inaction of world leaders on the climate crisis. Over here, protests have been manifested in the form of coup attempts, rebellions and armed insurgencies reflecting the weaknesses of our governance, citizenship, moral foundations, and social bonds.

Such protests could be further fueled by more economic hardships ahead as headwinds threaten recession, perhaps after 2020. The signs are there.

• Mark Zandi, chief economist of Moody’s Analytics: “There’s an ‘uncomfortably high’ chance that a recession could hit the global economy in the next 12-18 months, and policymakers may not be able to reverse that course. It requires staying on script that includes avoiding an escalation of the US-China trade war; finding a resolution to Brexit; and central banks continuing their monetary stimulus.”

• The UN’s trade and development body, UNCTAD: “2019 will endure the weakest expansion in a decade and the slowdown could turn into outright contraction next year. Warning lights are flashing around trade wars, currency gyrations, a no-deal Brexit and movements in long-term interest rates. Yet, policymakers are hardly preparing for the coming storm.”

• National Association for Business Economics (NABE): “The risk of a recession is rising, and the main threat to the economy is the Trump administration’s trade war. The rise in protectionism, pervasive trade policy uncertainty, and slower global growth are considered key downside risks to US economic activity.”

Vice-President Leni Robredo’s appointment as co-chair of the war on drugs provides hope for unity, teamwork, and a holistic approach in addressing this grave national security problem. President Duterte can focus his attention on crushing the supply side (syndicates) while the VP Leni can address the demand side (addicts) through social transformation and performance excellence in drug rehab. As co-leaders and thinkers, they must properly select and provide their “whole-of-nation” doers the wherewithal to accomplish their missions.

But let me end on a high note. Recent news of victories and recognition in academics, sports, and the arts have reflated Pinoy pride. In times of stress and distress, there’s nothing like earned recognition for excellence to lift one’s spirit and national morale.

• Breanna Labadan, Daniella Reggie de la Pisa, Carlos Yulo: gold medals in gymnastics

• Carina Dayondon: WWF Conservation Hero award. Mountaineer (Mt. Everest, Seven Summits)

• Dr. Yanga Colleges: World Robot Olympiad gold medal

• Five Philippine Science High School-Western Visayas Campus students, Kirsten Dianne Delmo, Nico Andrei Serrato, Joecile Faith Monana, Frelean Faith Engallado, and Raphael Francis Dequilla: take the silver award at the Young Inventors Challenge 2019 in Malaysia for a device converting noise to electricity

• Fundador Supremo 18: best brandy in the world at the International Wine and Spirits Competition.

• Katarina Cruz: four gold medals in ice skating

• Andrea Robles: Macau Archery Open gold medal

• Margarita Fores: Knighted by the Italian government for culinary excellence.

• The PHL Team of 94 students: 17 gold, 14 silver, 19 bronze and 17 honorable mention awards for math and science in various competitions

• The PH National Dragon Boat Team: perennial gold medal winners

Life is bittersweet. Let’s make the most of it with good behavior, good faith, good relations, and good memories. Be good.

 

Rafael M. Alunan III is a former Secretary of Interior and Local Government and chairs the Philippine Council for Foreign Relations.

rmalunan@gmail.com

map@map.org.ph

http://map.org.ph

Stocks decline as markets watch US-China talks

SHARES continued to drop on Monday as investors stayed on the sidelines until further developments in the US-China trade talks.

The benchmark Philippine Stock Exchange index (PSEi) lost 52.02 points or 0.65% to close at 7,880.94 on Monday. This is its fourth straight day of decline and lowest finish since Oct. 15 when it ended at 7,840.31.

The broader all-shares index also fell 31.55 points or 0.66% to close at 4,720.26.

“The local market extended its losses today as investors continue to watch out for developments with the US-China negotiations,” Senior Research Analyst Japhet Louis O. Tantiangco of Philstocks Financial, Inc. said in a text message on Monday.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan pointed to the same reason, saying in a mobile message: “Investors continued selling in the Philippines market as sentiment in the US became more positive….”

Mr. Tantiangco noted the market was affected by the “skepticism with respect to the talks particularly the positive remarks given by both parties over the weekend.” He was referring to comments of White House Economic Advisor Larry Kudlow late last week, saying the two countries are inching closer to an agreement. China state-run press Xinhua News Agency also reported over the weekend that US and China were maintaining communication over phone to discuss items of the trade deal.

“At the same time, sentiments are also dented by the political unrest in Hong Kong,” Mr. Tantiangco added. Reuters reported tensions continue to rise in Hong Kong as protesters and the police stand off at a university, where rubber bullets and tear gas were used by the authorities to attack protesters aided with petrol bombs and homemade weapons.

But Mr. Tantiangco noted these overseas events are “overshadowing” local fundamentals that should be driving the market up.

“Third quarter corporate earnings season has just ended with index members’ combined first nine months net income up by about 15% year-on-year. Despite this, investors remain cautious as they seek for more clarity regarding the ongoing global narratives,” he said.

All sectoral indices closed in the red on Monday.

Mining and oil descended 192.05 points or 2.19% to 8,550.09; property dropped 46.30 points or 1.12% to 4,073.54; industrials lost 66.19 points or 0.65% to 10,016.15; financials decreased 10.91 points or 0.56% to 1,909.94; holding firms fell 38.14 points or 0.48% to 7,772.28; and services slipped 3.62 points or 0.23% to close at 1,543.85.

Value turnover on Monday stood at P4.32 billion, down from Friday’s P6.85 billion, with 430.55 million issues changing hands.

More stocks declined compared to those that advanced, 128 against 52, while 51 ended unchanged.

Net foreign buying totaled P100.23 million on Monday, a reversal of Friday’s net selling worth P404.88 million. — Denise A. Valdez

Peso inches lower amid cautious trade

THE PESO declined slightly as markets await developments overseas.

THE PESO moved sideways as it traded within a tight range yesterday with the market staying on the sidelines, anticipating central bank developments overseas.

The local unit closed at P50.66 apiece against the greenback on Monday, slightly weaker than the P50.65-per-dollar finish on Friday, based on data from the Bankers Association of the Philippines.

The peso opened the session at P50.60 to a dollar. Its weakest point for the day was at P50.69, while its strongest was at P50.575 against the greenback.

Total volume traded yesterday dropped to $884.8 million from $1.12 billion posted on Friday.

A trader yesterday said the market stayed on the sidelines ahead of minutes of the US Federal Reserve’s latest meeting that will be released on Wednesday, as shown in the “quiet” and low trading volume.

“There will be central bank minutes that will be released on Wednesday, then on Thursday, the ECB (European Central Bank) speech… With that said, we just traded a very tight range,” the trader said in a phone call.

The trader added that the market is awaiting the first time new ECB President Christine Lagarde will discuss the euro zone’s policy direction given economic conditions in the bloc.

Meanwhile, another trader said the local unit weakened yesterday with “the release of upbeat US retail sales report last Friday” indicating the “ongoing strength of US consumer spending.”

The traders said the peso may decline further ahead of US data.

“The local currency might continue depreciating from dollar bargain-hunting and expectations of upbeat US housing data releases,” the trader said in an email.

The first trader expect the peso trade slightly higher on Tuesday or within the P50.55-P50.75 range on the lack of fresh leads. For the second trader, the local unit will likely move in the P50.60-50.80 range. — BML

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