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UN agency submits evaluation of PHL’s readiness for nuclear

By Charmaine A. Tadalan
Reporter

THE International Atomic Energy Agency (IAEA) on Wednesday transmitted to the Department of Energy (DoE) its 19-point Integrated Nuclear Infrastructure Review (INIR) on the Philippines’ preparedness for nuclear energy.

Among the recommendations of the IAEA, an arm of the United Nations, is to involve a broader range of stakeholders in the process of adopting nuclear energy.

The IAEA has also given the DoE 90 days or until Jan. 23 to decide whether to allow the public to access the entire report on its website.

Philippine Nuclear Research Institute (PNRI) Director Carlo A. Arcilla said he recommends the report’s publication to minimize public suspicions about the process of adopting nuclear power.

“My view on that is that it should be publicized. Why? Because there’s nothing to hide. Number two, the most important thing in nuclear is stakeholders,” Mr. Arcilla told BusinessWorld on the sidelines of the hand-over ceremony in Taguig City Wednesday.

“(The nuclear industry) has learned its lesson; In the past, they tried to be secretive. When you are secretive, people will imagine the worst.”

Mr. Arcilla also raised the need to develop an alternative power source, citing Saudi Arabia, which in July 2018 tapped the IAEA to review its preparedness for nuclear power.

“Saudi Arabia is planning to have nuclear power plants, what does that tell us? The world’s most energy-secure country, richest in oil, is trying to build nuclear plants, what’s that telling us?”

The INIR report also flagged the Philippines’ lack of legal and regulatory frameworks for operating nuclear power plants. Among others, a comprehensive law will make the PNRI an independent regulatory body.

A measure establishing a regulatory framework on nuclear development was passed in the House of Representatives in the 17th Congress, but failed to win approval on final reading approval in the Senate before session adjourned in June.

A major concern of stakeholders in developing nuclear energy is the proper disposal of radioactive waste, which Mr. Arcilla said is a “technically solvable issue.”

“If you ask me how we’ll dispose of the waste, very simple. We are number three in the world in geothermal, we drill very deep wells, up to two kilometers. So I would like to get an isolated island, I’ll drill a 2-km well, all of the Philippines’ waste will fit in there,” he said.

“And then I’ll cover that with a material, bentonite, a crystal filter. If the uranium escapes it will be locked up there without chance of parole. Hindi pwedeng i-GCTA (It cannot avail of GCTA),” he said, referring to the Good Conduct Time Allowance policy that recently lead to the early release of a number of notorious convicts.

Mr. Arcilla also sees possible opposition from the rest of the energy industry.

“There will be people who will not be happy with nuclear, including other providers of energy. ‘Yun ‘yung mga nag-o-oppose (Those are the oppositors) but if you want clean consistent and cheap energy nothing matches nuclear.”

Senator Sherwin T. Gatchalian, the chamber’s Energy Committee chairman, said it is important for the DoE to explain the process of adopting nuclear energy, its risks, and the funding needed.

“First things first, I think nuclear power by itself is very controversial as well as a very complicated energy source. Complicated because it has inherent risks, especially when it comes to safety and nuclear waste. Having said that, ang pinakamahalaga ngayon (the most important thing) is to be transparent to the public,” Mr. Gatchalian told BusinessWorld by telephone Wednesday.

Mr. Gatchalian said his Committee will hold an inquiry to further discuss the DoE’s nuclear agenda, particularly the contents of the INIR, on the resumption of session before Congress adjourns for a month-long break on Dec. 20.

“The public should understand clearly what the steps are, the risks and the budget involved. Especially, what the government role is in terms of putting this nuclear agenda together.

“The INIR is the first step to understand the regulatory and legal statutes we need to enact prior to investing more in nuclear energy.”

Price-controlled drug list headed to Palace for approval

By Gillian M. Cortez
Reporter

THE Department of Health (DoH) said it will submit its price-controlled list for 122 drugs this week for the approval of President Rodrigo R. Duterte.

Health Undersecretary Rolando Enrique C. Domingo told BusinessWorld that Secretary Francisco T. Duque is set to endorse an executive order (EO) that will set a Maximum Retail Drug Price (MRDP) for 122 medicines to Mr. Duterte before this week ends.

“The plan is to forward it by this week,” he said, adding that it’s up to Mr. Duterte to sign it or not.

The MRDP will cover treatments for the Philippines’ top 40 diseases.

According to the Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 9502 or the Universally Accessible Cheaper and Quality Medicines Act of 2008, a Drug Price Advisory Council (DPAC) is to determine which medicines will fall under the MRDP scheme. This list will be sent to the Health Secretary for approval before being forwarded to the President who will implement the price ceilings through an EO.

The Philippines has some of the most expensive medicines in Asia, with affordability becoming an urgent matter on the eve of Universal Health Care (UHC) next year.

The DoH has said it hopes the MRDP will be approved before 2019 ends.

According to the Philippine Statistics Authority (PSA), out-of-pocket spending on health was P413.0 billion in 2018, with P206.7 billion spent on pharmaceuticals.

Meat industry seeks DA help in lifting LGU bans

MEAT processors said the Department of Agriculture (DA) should discuss more comprehensively the causes of African Swine Fever (ASF) to increase the public’s understanding of how the disease spreads, as a counter to local government units seeking to ban the entry of their products.

The Philippine Association of Meat Processors, Inc. (PAMPI) made the request after Laguna, Masbate, and Legazpi City joined the list of Local Government Units (LGUs) who have banned shipments of processed pork from ASF-affected areas in Luzon to prevent the spread of the disease to their farms.

PAMPI said in a statement that 67 of 81 provinces, or 83%, have imposed a ban on the entry of such products, despite an order from the Department of the Interior and Local Government (DILG) encouraging LGUs to lift their bans.

The meat processors have said that a failure to regain freedom of movement for their products could cost them more than P40 billion in lost sales, particularly with the approach of the year-end holidays, the peak period for products like ham.

The industry has seen its interests diverge with those of hog raisers, who want to quarantine processed pork products to preserve their herds.

According to the World Organization for Animal Health, ASF affects domestic and wild pigs, and does not pose any health risk to humans. There is no approved vaccine against the virus.

Since the announcement of the outbreak in September, the DA has blamed as the most probably cause swill feeding and the transportation of ASF-infected hogs from the outbreak’s ground zero in Rizal and Bulacan.

The first cases of ASF were confirmed by the DA on Sept. 9 in Rodriguez and Antipolo, Rizal and in Guiguinto, Bulacan, where backyard hog raisers relied on swill feeding.

The department is encouraging hog raisers to not feed their animals food scraps from hotels, restaurants, and airlines. It has also tightened security at ports of entry to ensure that no hogs, especially from infected areas, are transported to other areas.

PAMPI said that because of the bans, its members have decided to reduce production and stop purchasing domestically-grown pork.

“We do not want to expose ourselves to further risk by using locally-sourced pork that could be laden with ASF. There could be unscrupulous suppliers who could pass off meat from ASF-infected pigs,” PAMPI President Felix O. Tiukinhoy said in the statement.

PAMPI said it typically purchases 5% of its pork in the Philippines while importing the rest from countries unaffected by ASF.

PAMPI is the country’s largest group of meat processors. It has 88 member-companies, generating more about P300 billion in sales and directly employing 150,000 workers.

Cagayan province urges cancellation of sugar import lib

THE Cagayan provincial government called on the national government to cancel its plan to liberalize sugar imports, warning that such a measure could destroy the sugar industry.

“As it is hereby resolved, to appeal to President Rodrigo R. Duterte to disallow the planned liberalization of the importation of sugar by the Department of Finance (DoF),” the provincial board said through Resolution No. 2019-10-232.

“Allowing the unregulated entry of the cheaper refined sugar into our shoes by the major sugar exporting countries like Thailand and India would ruin the Philippine sugar industry,” it said.

According to the Philippine Statistics Authority, Cagayan produced an average of 171,231 metric tons of sugarcane a year between 2010 and 2014. The Cagayan Valley region is a leading sugar producer alongside Western Visayas, Northern Mindanao, and Central Visayas.

“The consequence of the implementation of the Rice Tariffication Law… has adversely affected all the (rice) farmers, and again with the proposal of sugar liberalization, the sugar industry dependents are expectant of the same hostile effect,” it added.

The DoF formally proposed to liberalize sugar imports on Sept. 27, modeling the market opening on the rice market. The aim of the sugar measure is to help make the food processing industry more competitive by bringing down sugar prices.

Sugar producers claim the industry employs about five million people directly and indirectly, many of them agrarian reform beneficiaries or farmers owning five hectares or less.

Legislators from these provinces will be holding an inquiry in November after the Congress resumes to discuss the proposed liberalization. They also hope to discuss the under utilization of the P2-billion Sugar Industry Development Act (SIDA) fund, which should have been enough to help the industry be more competitive. — Vincent Mariel P. Galang

No country immune to risk of spreading African swine fever, animal health agency says

PARIS — African swine fever will spread further across Asia where it has devastated herds, and no country is immune from being hit by the deadly animal virus, the head of the World Organization for Animal Health (OIE) said on Wednesday.

The disease, which has hit the world’s top pork producer China hard, originated in Africa before spreading to Europe and Asia. It has been found in 50 countries, killing hundreds of millions of pigs, while reshaping global meat and feed markets.

“We are really facing a threat that is global,” OIE Director General Monique Eloit told Reuters in an interview.

“The risk exists for all countries, whether they are geographically close or geographically distant because there is a multitude of potential sources of contamination.”

African swine fever, which is not harmful to humans, can be transmitted by a tourist bringing back a ham or sausage sandwich from a contaminated country, throwing it away and the garbage being reused by farmers to feed their pigs, Eloit said.

There are additional risks from trading live animals and food products across borders and from small breeders using restaurant or train station waste to feed their stock.

The disease has spread rapidly to several countries in Southeast Asia including Vietnam, Cambodia, Laos, South Korea and the Philippines and more countries are likely to be hit in the coming months.

“In the short term we are not going towards an improvement. We will continue to have more outbreaks in the infected countries. Neighboring countries are at high risk and for some the question is when they will be infected,” Eloit said, stressing that controls were difficult to implement.

The spread of African swine fever has not only ravaged the Asian pig population, but also sent international pork prices rocketing and hit animal feed markets such as corn and soybeans.

It has also weighed on results of agricultural commodity groups due to weaker feed demand for hog breeding.

China’s hog herd was more than 40% smaller in September than a year earlier, its farm ministry said earlier this month. But several in the industry believe the losses are much greater.

Beijing issued a series of policies in September aimed at supporting national hog production and securing meat supplies.

Eloit said the measures were adequate but needed to be fully implemented.

“There is a difference between what is decided on paper — I do not think there is any concern here — and how we actually get to apply them on the ground especially in countries that are very large, which have a wide variety of production,” she said.

In Europe, the situation is different because outbreaks mainly concern wild boars, Eloit added.

African swine fever has been found on farms in eastern Europe but its spread had been mostly contained, due mainly to tight security measures implemented in some countries. — Reuters

Trial period for MRT-3’s Chinese trains extended to end-November

THE Department of Transportation (DoTr) said Thursday that it will expand the trial period for the Metro Rail Transit Line 3 (MRT-3) trains supplied by CRRC Dalian Ltd., to Nov. 30.

The MRT-3 started deploying on Oct. 15 one of the China-manufactured train sets, which consist of three train coaches with a capacity of 1,050 passengers per trip, on its initial trials. This deployment was initially planned to last until Oct. 31.

In a statement Thursday, the DoTr said: “Tatakbo na hanggang ika-30 ng Nobyembre 2019 ang nasabing train set, mula 8:30 p.m. hanggang 10:30 p.m., araw-araw (The train set will be deployed until Nov. 30, from 8:30 p.m. until 10:30 p.m. daily).”

Ang dahilan ng pagpapalawig ng initial trial period ay upang maobserbahan pang mabuti ang performance ng Dalian train set sa linya ng MRT-3 (The reason for extending the initial trial period is to further observe the performance of the Dalian train set on the tracks of MRT-3),” the DoTr added.

MRT-3 Director for Operations Michael Capati said no issues were observed during the trial period from Oct. 15 to 31.

Wala naman pong issues na lumabas. Noong tinanong po namin ang aming mga mananakay at satisfied naman po sila sa pagsakay at pag-launch natin ng Dalian train (There were no issues observed. The passengers we asked said they were satisfied with the launch of the Dalian train),” he said.

The trains were procured in 2014 by the previous government but held back from service because of compatibility issues.

Last year, the government arrived at an agreement with CRRC Dalian to make the necessary adjustments on the train sets free of charge. — Arjay L. Balinbin

BoC revives Balikbayan Box tracking agreement

THE Bureau of Customs (BoC) launched Wednesday a tracking system for balikbayan boxes going through stages of clearance at the agency as a measure to streamline operations and reduce “scams” in their processing.

Assistant Commissioner of the Post Clearance Audit Group Vincent Philip C. Maronilla told BusinessWorld that parcels and balikbayan boxes can now be tracked through the Balikbayan Box Tracking System (PBTS), which can be accessed through the BoC website.

PBTS was launched on Wednesday.

“The system can provide updates about the parcel or balikbayan box as it goes through the different stages of customs clearance which also enables the Bureau to monitor the efficiency of BoC officials and personnel,” BoC said in a statement yesterday.

Mr. Maronilla said that the users can check on the status of parcels and balikbayan boxes through their respective tracking numbers.

The shipments have time stamps to allow quick identification of delays.

“The parcels have timestamps so we can also monitor ‘yung mga tao namin kung pinapatagal nila yung processing, bakit nagtatagal, may reason din dun (we can monitor our personnel who may be delaying processing and determine the reason behind the delay),” he said.

A link directed to the Department of Trade and Industry (DTI) is included in the website to provide users a way to check if the forwarding companies or consolidators are legitimate.

“It’s a very helpful tool and it’s very timely,” he added.

Mr. Maronilla said the balikbayan box tracker was first launched in 2015 but the BoC had to shut it down to fix some issues and expand the system to allow it to also track parcels.

“Around 2014-2015, we had a balikbayan box tracker that we launched linked up with the DTI bat nagkaroon ng problema dun sa search engine nya (but we encountered a problem with the search engine) when the forwarders stopped sending the data that we required,” he said.

Separately, Finance Secretary Carlos G. Dominguez III said he will order the BoC to “alert their counterparts in China and all the ASEAN countries to the practice of exporting untaxed cigarettes” to the country.

“We are increasing vigilance against non tax-paid cigarettes from all sources,” Mr. Dominguez told reporters in a mobile phone message on Wednesday.

Recently the BoC and Bureau of Internal Revenue (BIR) seized millions of pesos worth of tobacco products.

On Wednesday, BoC seized P95-million worth of 2,727 master cases of smuggled cigarettes in Sulu while the BIR confiscated around 145 master cases containing around 1.45 million sticks of Chinese cigarette at a warehouse in Binondo, Manila on Oct. 25.

Republic Act No. 11346 was signed in July, increasing the excise tax on tobacco products to P60 per by 2023 from the current P35. — Beatrice M. Laforga

NCR retail price rise muted in Aug. — PSA

THE retail goods prices in the National Capital Region (NCR) rose 0.8% year-on-year in August, following a 3.1% increase a year earlier, the Philippine Statistics Authority (PSA) reported Thursday.

Year-to-date, the general retail price index (GRPI) rose 1.2%.

On a month-on-month basis, August GRPI rose 0.1%, the same increase recorded in July.

Food registered a 1.2% increase, much less than the 3.7% increase in the same month last year.

Chemicals, including vegetable oils and fats, rose 0.9%, while machinery and transport equipment rose 0.4%. In the same month last year, these commodities rose 0.9% and 1%, respectively.

The highest increase was in crude materials, inedible except fuels, which rose 4.1%. This is the only commodity that grew faster than its year-earlier rate. In August 2018 prices here grew 1.8%.

Meanwhile, mineral fuels, lubricants and related materials fell 4%, declining for a third month. The commodity rose 19.1% in the same month last year.

Beverages and tobacco rose 2.2% after rising 11.5% a year earlier.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael L. Ricafort said that the easing of retail prices in the region reflects the easing of overall inflation.

“The latest easing in Metro Manila retail prices largely correlates with the easing of the overall headline inflation, especially the lower prices of food especially rice, oil petroleum products, and the stronger peso exchange rate,” he said in a e-mail.

He also noted the higher year-earlier base slowed price growth.

Headline inflation was 1.7% year-on-year in August.

The more muted increase in retail prices compared to headline inflation, Mr. Ricafort said, may be due to increased competition among retailers.

This competition, he said, “would have reduced the pass-on costs/inflation to consumers, as producers may have to absorb higher costs when inflation was higher… with less pass-on to consumers on the retail level, thereby leading to much slower prices increases/inflation at the retail level,” he said.

Mr. Ricafort said improved supply may have also caused the “relatively benign” retail inflation.

Security Bank Corp. chief economist Robert Dan J. Roces said that the year-to-date GRPI increase for NCR in August reflects solid consumer demand.

“Year-to-date GRPI growth of 1.2% shows that the retail trade sector is alive and well (due) to positive sentiment of household consumers owing to slower inflation. Retailing accounts for almost a fourth of the services sector making it a major growth driver,” he said.

“With improved macroeconomic fundamentals and favorable consumption base, we expect this to remain positive alongside the expected expansion of the economy in the fourth quarter of this year and well into 2020.”

Mr. Ricafort said that easing inflation in retail products benefits consumers, whose spending accounts for about 70% of the economy.

“This would help sustain consumer spending’s resilient growth as seen in recent quarters and, in turn, would put consumer spending a better position to further add to its huge contribution to the overall economy, thereby leading to faster GDP growth (from a 4-year low of 5.5% in 2Q 2019), going forward.” — Jenina P. Ibañez

US-China tensions spur progress on giant Asia trade agreement

BANGKOK — Tensions between the United States and China have given new impetus to a China-backed trade pact and there is a chance of major progress, if not final agreement, when Southeast Asian leaders meet in Bangkok later this week, analysts say.

The Regional Comprehensive Economic Partnership (RCEP) could become the world’s largest free trade zone, comprising 16 countries that account for a third of global gross domestic product and nearly half the world’s population.

Progress since talks began in 2012 has been slowed by disagreements between members, such as major Indian concerns over a possible deluge of imports from China. The pact also includes the Association of Southeast Asian Nations (ASEAN), Australia, Japan, New Zealand and South Korea.

Analysts said the pace of discussion on remaining issues had quickened this year, as the US-China trade war sharpened concerns over both economic growth and regional security.

“We are hearing that there is light at the end of the tunnel and it is already a short tunnel,” said Tang Siew Mun, head of the ASEAN Studies Centre at the Yusof Ishak Institute in Singapore.

“The momentum is now there for the politicians to get this done,” he told Reuters.

Thailand, which currently chairs ASEAN, said this month market access talks were 80.4% complete and members had agreed on 14 of a total of 20 chapters. Talks with RCEP members will follow the ASEAN summit, from Oct. 31 to Nov. 4, in Bangkok.

“Some Southeast Asian nations would like to show that they can keep the regional integration show on the road, despite the US-China tensions,” said Benjamin Bland, director of the Southeast Asia project at the Lowy Institute in Sydney.

In Asia, China is not alone in feeling the pressure of the trade war.

Although some companies have moved production from China to escape US tariffs, the International Monetary Fund (IMF) forecasts growth in ASEAN’s top five economies will fall to 4.8% this year from 5.3% in 2018. It expects India’s growth to slow to 6.1% from 6.8%.

Countries that used to rely on the United States as a counterweight to China’s growing regional dominance are also increasingly doubtful if they can.

RCEP members including India, Japan, Malaysia, South Korea and Thailand all have large trade surpluses with the United States — a bugbear for President Donald Trump.

US-Thai trade relations have been strained, with Washington withdrawing trade preferences on $1.3 billion in Thai goods last Friday, accusing Thailand of failing to protect workers’ rights.

‘WARNING SIGN’
“The trade tensions should be the final warning sign that Asia needs to have a collective platform and a place for engaging in economic issues,” said Deborah Elms, executive director of the Asian Trade Center based in Singapore.

It would be a “massive missed opportunity” if leaders did not announce the success of the pact at this week’s meeting, Elms added.

The RCEP trade deal aims to build on the free trade deals that Southeast Asian countries have with other members.

It has been widely seen as a China-supported alternative to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which covers 11 countries across the Pacific — though Trump pulled the United States out of talks before it was signed.

RCEP, seven of whose member nations are also in the other agreement, is less ambitious in terms of the areas of trade that would be freed up and the conditions participants must meet.

But it is still expected to provide a major boost to regional trade, besides being symbolically important, as the Trump administration challenges multilateral trade deals.

“Completing the RCEP negotiations as early as possible is of great significance to the long-term stability, prosperity and development of the region,” Li Chenggang, China’s assistant commerce minister told reporters in Beijing on Monday.

“The negotiations are currently in the final sprint.”

Chinese Premier Li Keqiang is confirmed to attend the Bangkok meet, while the United States has yet to announce any representative more senior than Assistant Secretary of State David Stilwell.

Last year, US Vice-President Mike Pence joined the meeting with Southeast Asian leaders in Trump’s place.

Other issues that may figure at the Southeast Asian summit include the standoff between China and several regional states over its sweeping maritime claims in the South China Sea, as well as Myanmar’s treatment of Muslim Rohingya after a military crackdown drove more than 700,000 into Bangladesh in 2017. But with Thai hosts keen to show progress on the RCEP deal, analysts and diplomats say it is shaping up as the most important issue in Bangkok.

“ASEAN hopes to at least be able to announce that substantial progress has been made, to ensure momentum is sustained,” said Peter Mumford of risk consulting firm Eurasia Group. — Reuters

Let’s do more for financial literacy in the Philippines

By Michael Singh

THE PHILIPPINES has recently been plagued with fraudulent and unethical online lending behavior. This has prompted fintechs in the country to take much needed measures to combat issues related to financial literacy — like introducing industry standards for responsible lending following a circular by the Securities and Exchange Commission (SEC).

Industry players holding themselves to a higher standard is a drastic effort to address the mushrooming fraudulent organizations breeding in the Philippines, but it’s also a symptom to a problem that has long plagued the ecosystem.

UNDERSTANDING FINANCIAL LITERACY
Many Filipinos have low income. According to the World Bank, less than 10% of the population could be considered middle class in 2015 — a figure that has remained fairly stagnant since 2002.

Part of the reason the poor stay poor is a lack of financial literacy.

Even the most responsible Filipinos are placed at greater risk when attempting to access credit needed to rise above poverty or go up in social class, as the majority of Filipinos have or will take on debt. According to a survey conducted by the Bangko Sentral ng Pilipinas (BSP) in 2015, only 19.1% of adults do not borrow at all. And those who borrow greatly prefer informal sources over banks; 61.9% of them borrow from friends and family, and 10.1% borrow from informal lenders.

Furthermore, a World Bank survey in 2015 discovered that Filipinos who are knowledgeable about financial matters are more likely to report that they have money left after paying for basic necessities, and less likely to say that they’ve borrowed beyond their means.

Financial literacy, unfortunately, is a double-edged sword. One has to have disposable income to learn how to use it. But to have disposable income, Filipinos need to apply financial knowledge.

Breaking this cycle is, in parts, why BSP launched the “Economic and Financial Learning Program” (EFLP), a flagship initiative to introduce financial education to students, working adults, overseas workers, and unbanked populations.

HOLDING CLASSES IS NOT ENOUGH
That’s all fine as a first step, but as pointed out in a January column in the Manila Times, focusing solely on education won’t work to curb the underlying issues in financial literacy.

“Passing a financial literacy class does not make you a good money manager. The one major reason why so many of us are so bad with handling our finances is not because we are financially illiterate but because of the way we behave. So, ultimately, getting better with our money is about changing our behavior.”

While I agree with the premise, I would like to adjust that line of thinking slightly. The term “financial inclusion” shouldn’t just focus on imparting knowledge, but inoculating behaviors as well.

Marketing experts Daniel Fernandes, John G. Lynch, Jr., and Richard Netemeyer found that increasing financial literacy only had a measly 0.44% impact on subsequent financial behavior in their meta analysis looking at over 200 studies on financial literacy.

The results may be surprising at first glance, but they clear up upon critical consideration. Financial education is often imparted in courses and seminars covering multiple topics at once. When participants get back home, they face the herculean task of having to put all of these lessons into practice at once. It is much easier for them to fall back into poor habits that have been built over time. Without supervision, without immediate gratification, and without practice, people will forget what they learned in these courses and seminars.

WHERE FINTECHS PLAY A PART
Behavior change is exactly where fintechs shine. Fintechs are able to cultivate healthier financial education in a more practical sense, and without bogging down users with too much information in one go.

Teaching users as they go is the best way to encourage “stickiness,” and simultaneously teach users financial literacy in a more practical sense.

There are fintechs, for example, that enable consumers to pay for household goods in installments, which indirectly allows Filipinos to build the habit of honoring their short-term loans every month before they make higher-stake commitments like auto loans.

The experience of taking out a loan, receiving reminders about timely payment, and better products and repayment terms as a result of good repayment behavior are some ways fintechs help to set in motion a true financial education experience for users.

Fintechs can’t succeed in isolation, however. The ecosystem needs to play its part to bolster the fintechs’ role.

Policymakers and regulators need to mandate financial inclusion as a national interest and introduce policies with that vision. Activists and NGOs often serve the lowest income populations, and need to play a key role in financial literacy. Entrepreneurs and fintechs need to offer solutions with consumer protection at its core, and banks need to utilize modern advancements to open up financial services to underserved markets.

The magic happens when we talk to each other. All of these disparate voices need to be heard by all industry participants so that we can better service our particular piece of the financial education puzzle.

Contributing to their end of the puzzle, fintechs should place consumer protection at their core and implement an internal Code of Ethics. The digital lending industry needs to operate within a set of acceptable global standards, and advocate for upfront, transparent and responsible lending practices.

AsiaKredit, for example, adopts Code of Ethics standards such as the Smart Campaign for responsible lending by the globally recognized Center for Financial Inclusion (CFI) at Accion. In developing their own Code of Ethics, fintechs should look to the Smart Campaign’s Client Protection Principles such as prevention of over-indebtedness, need for transparency, fair and respectful treatment of customers, data privacy management, and complaint resolution mechanisms. We assign each of these principles to a specific member of the executive team, where he/she “owns” the principle and its execution. The team meets monthly to review the principles and report on the initiatives that have been launched, are in development, or are to be developed, with the end goal of reaching 100% execution of the principles, which are, not to mention, tied to their individual performance review.

I should note that these measures outlined for Philippine industry players aren’t set in stone. For example, the central bank and NGOs can always tweak their methods to exemplify more behavior-changing methods instead of just imparting knowledge.

However, I would like to highlight its importance.

According to the World Economic Forum, the Philippines’ middle class is on track to outspend Italy’s by 2030. We have a growing tech-savvy population, a snowballing digital economy, and a robust regional trading network. Financial literacy is crucial to ensure that those who rise in their economic status don’t slide back into poverty.

 

Michael Singh is the CEO and co-founder of AsiaKredit.

Power play

The Marcoses have been asking for closure on the public debate over their late patriarch’s martial law regime and its impact on Philippine politics, culture, and economy — and most of all, on the Filipino people’s lives and fortunes. Many are buying into the idea of relegating that period to just another meaningless episode in history that deserves forgetting either because they can’t remember how things were during that period, or just don’t know enough about it.

Now a senator, Maria Imelda Josefa “Imee” Marcos has urged those who are challenging the absurdity that the Marcos kleptocracy was a golden period in recent Philippine history and what’s more was not a dictatorship, to “move on.” She has even claimed that she and her siblings were not complicit in the many crimes that took place during that dark period (1972–1986) because they were children then.

Like her supposed graduation from Princeton University and the University of the Philippines College of Law, that claim is bogus. Both in their teens when their father declared martial law in 1972, Imee and her brother were already adults by the latter part of their father’s dictatorship. She was born in 1955, and was 31 years old in 1986, while her brother Ferdinand “Bongbong” Marcos, Jr., who was born in 1957, was 29. Imee Marcos was in fact old enough to be named by her father chair of the regime’s version of the youth group Kabataang Makabayan, the Kabataang Barangay (KB). She was even implicated in the death of a student who, after objecting to her being KB chair, was later found tortured and murdered.

For his part, her brother Ferdinand “Bongbong” Marcos, Jr., has refused to acknowledge that the arbitrary detention, the enforced disappearances, the killings, the torture and other human rights violations that characterized their father’s rule were matters of State policy. Instead he claims they were unintended, and in effect only the doing of aberrant members of the military. He has refused to apologize for those abuses on the basis of that argument.

And yet there is no question that the arrest and detention, torture and killing of suspected rebels and “subversives” as well as regime critics were the inevitable consequences of the policy decision to place the country under martial law. Its mastermind imposed it to stay in power beyond 1973 when his second four-year term would have ended, and to enable his military accomplices to arrest anyone without a warrant and detain them without charges for indefinite periods.

One of the characteristics of martial rule was in fact how carefully Marcos Sr. weighed every option, and planned and prepared for every contingency, including the possibility of replicating the “Indonesian model” that massacred over a million members of the communist and nationalist parties of that country in 1965. Two years before he issued Presidential Proclamation 1081, Marcos Sr. was already instructing Philippine embassies in other countries where dictatorships were in place to conduct studies on how they were being implemented and sustained.

He understood only too well how critical military support was, and turned the generals into his Praetorian guard by rewarding them with pelf and power. Already ideologized by its use by the political elite as an internal pacification force rather than as a defender of the country’s sovereignty and territorial integrity, the military under Marcos became a power broker whose support has to this day been crucial to the survival of every Philippine administration.

The Marcos siblings’ sustained campaign to sanitize their father’s vicious regime is all part of the effort not only to rehabilitate themselves in the public eye but also to pave the way for their recapture of national political power, the possibilities for which have never been as pronounced than during the current term of their ally Rodrigo Duterte.

This is part of the context in which the Supreme Court, sitting as the Presidential Electoral Tribunal (PET), decided, with only two dissenting votes, to continue hearing Marcos Jr.’s protest against Vice-President Maria Leonor “Leni” Robredo instead of dismissing it when the recount of the votes in three provinces added to the latter’s votes. If it had been otherwise — if the Robredo votes had diminished in the recount — it would have validated Marcos’ claim that he has been “robbed of the Vice-Presidency.”

It stands to reason to assume that the recount results invalidate Marcos Jr.’s claim that he was cheated in the 2016 elections. Hence the question why the PET decided as it did. Either the justices wanted to give Marcos every opportunity to make his case so he won’t have any reason to claim that they were partial to Robredo, or — and this is more likely — they don’t want to displease President Rodrigo Duterte, who has several times expressed his disdain for Robredo and his preference for Marcos as his successor should he resign the presidency.

If the second is indeed the case, it would not only raise serious doubts about the independence of the Supreme Court. Even more significantly would it also mean that the PET decision is supportive of the Marcos family agenda of returning to Malacañang with one of their own as President.

The delay in the PET decision is saying that a ruling in favor of Marcos Jr. is still possible, in which case once he is declared Vice-President, the ailing Mr. Duterte can resign from his post. He could do so with the assurance that someone would be in power who is unlikely to hold him, his family, and his regime to account for the crimes and corruption they have been accused of. There are other Duterte allies who are interested in the presidency, among them Manny Pacquiao, Cynthia Villar, and Sara Duterte. But if already Vice-President, and with his family’s billions and political assets, Marcos Jr. could prevail over them all in 2022.

What then should be of concern for the long suffering people of this sad country is what the presidency of another Marcos that can last for at least eight years will be like.

Those eight years include Mr. Duterte’s last two years, plus six more from 2022 to 2028. Once de facto President, and with command over government funds, facilities and personnel, Marcos Jr. can handily win the 2022 elections.

Because it isn’t in his interest to institute the reforms needed to address the roots of conflict, that could occur in the context of continuing social unrest and armed rebellion. In response, Marcos Jr. could replicate his father’s 1972 “solution,” although without necessarily declaring martial law, but by simply implementing it in the form of mass arrests and the curtailment of the Bill of Rights including the right to free expression and press freedom. From there he could, like his father, make himself President for life.

When running for the 2016 elections, Marcos Jr. was in fact talking as if he were campaigning for the country’s highest post. He was also promising to lead a “revolution” — which his father also claimed to be leading on the eve of his declaration of martial law in 1972.

What’s in store for this country over the next decade or so could be martial law and dictatorship reprised — and by another Marcos. Should his electoral protest be dismissed, those other, equally self-aggrandizing aspirants for the Presidency could still outmaneuver him in 2022. But that’s not exactly something to look forward to either.

 

Luis V. Teodoro is on Facebook and Twitter (@luisteodoro).

www.luisteodoro.com

Ghosts

Perhaps ghosts do exist. Perhaps the question we should really be asking is: what exists?

Alejandro Amenábar’s The Others exemplifies this point: [spoiler alert] contrary to what the movie’s lead character (played by Nicole Kidman) thought, the “ghosts” infesting her house are actually the living. The dead and the haunting are rather her and her children.

There are, of course, the legendary stories: The Brown Lady of Raynham Hall, the harrowing Bell Witch of Tennessee, the possessed Raggedy Ann doll that The Conjuring series re-introduced to a younger audience.

Historical ghosts abound: Lady Catherine Howard, whose ghost is said to be seen and heard screaming along the halls of Hampton Court, still pleading to be spared of the execution ordered by her husband King Henry VIII. In the Philippines, a school hospital in Manila and Malacañang Palace, as well as the CCP, are said to be haunted.

Of course, there’s Balete Drive (although how the White Lady there fares in today’s horrendous traffic adds to the mystery).

Yet these long-time stories still pose the unanswered question: what exactly are ghosts?

One thing interesting to consider is that if we take a hypothetical person “Juan,” with X being his body and (assuming it exists) his soul is Y this makes X+Y= Z (Juan being Z). If at death X decomposes, leaving only presumably Y, then wouldn’t it be quite illogical to presuppose that Y=Z?

Thus, if people say they see or even talk to ghosts, presumably now existing merely as Y, then how come Y is seemingly identical (not only in appearance but personality and memory) to Z?

Furthermore, if the ghost-hunting shows are to be believed, ghostly activity can be captured on film, sounds recorded (as disembodied voices or as electronic voice phenomena), and their presences known through electromagnetic frequencies (EMF).

Which doesn’t make sense.

Because if ghosts are spiritual entities, how can earthly devices capture their characteristics? It presupposes there’s something solid or material about ghosts, generating sound, can be captured by our eyes, felt by skin, smelled (e.g., candles or perfume), and even tasted (e.g., ectoplasm). These ghostly stimuli are such that they are capturable by our senses, which are then transferred to our brain for processing.

Which leads to further questions: if they are solid or gas, they exist materially, which presupposes an origin or cause, what mode did they separate from our bodies at death, and how come such material can not be duplicated in a controlled environment (i.e., laboratory) for scientific testing?

Incidentally, there’s the famous Duncan MacDougall study, published in 1907, which concluded that the soul likely weighs 21 grams. Its research has been criticized for being highly flawed and selective in reporting.

Which leads to this: perhaps ghosts do not exist as matter capturable by our senses. Instead of stimuli being transmitted to our brain, nothing is being transmitted at all.

The point: ghosts are all in our mind.

What we think we see, touch, feel, smell, or taste do not exist at all — rather they are just cooked up by our brain. When we see a ghost, for example, we do not actually see anything with our eyes: it is just our brain telling us (lying to us) that we’re seeing something.

Which leads us to memory, usually defined as a process in our brain that possesses, stores, and retrieves information or experiences. Straightforward enough but even now science finds itself baffled by it.

In a wonderful passage in the introduction to The Name of the Rose, Umberto Eco tells of “magic moments, involving great physical fatigue and intense motor excitement, that produce visions of people known in the past (‘en me retraçant ces détails, j’en suis à me demander s’ils sont réels, ou bien si je les ai rêvés’). As I learned later from the delightful little book of the Abbé de Bucquoy, there are also visions of books as yet unwritten.”

And apparently, these are not the mere musings of a creative genius. Medical writer Faith Brynie, Ph.D., tells us it is indeed “possible to remember something that never really happened.”

In one experiment, “researchers showed volunteers images and asked them to imagine other images at the same time. Later, many of the volunteers recalled the imagined images as real.”

Even St. Augustine devoted a fair amount of his writing to exploring the overlapping concepts of memory, self, and the mind, even going so far as to consider memory as identical to the soul.

Another intriguing possibility: “time slips.” Here, what is seen is real. It’s just that what was seen is of a different period. Hence, glimpses of otherworldly people, buildings, places, or events are actually glitches in time. This, of course, leads to questions of who or what did the time travel (i.e., the observer or the observed) and how?

Anyway, whatever ghosts may be, as we celebrate All Soul’s Day tomorrow (November 2), may whatever haunt you be beautiful, happy, and good.

 

Jemy Gatdula is a Senior Fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence.

https://www.facebook.com/jigatdula/

Twitter @jemygatdula