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House discussing extended foreign farmland leases

THE House of Representatives received bills and resolutions seeking to ease restrictions on foreign investment, including a proposal to increase the term foreigners can lease farmland.

Among the bills and resolutions filed at the House seeking various amendments to the 1987 Constitution was Joint House Resolution No. 4, introduced by Pampanga 3rd district Representative Aurelio D. Gonzales, Jr.

“We propose the qualified owning of land for foreigners to entice them to invest in our country and invite foreign direct investment. Additionally, this will ensure that our country produces enough food for our people,” Mr. Gonzales said at a committee hearing.

He said he proposes an amendment to allow the renewal of foreign leases of agricultural land for another 25 years.

“Foreign investors must be assured that our economic environment is conducive. That’s why we propose that we increase the renewal of the lease period of agricultural lands for another 25 years to ensure continued economic growth and development,” he said.

Asked to comment, American Chamber of Commerce of the Philippines, Inc. Senior Adviser John D. Forbes said that in general, the Constitutional restrictions on foreign investment are out of date.

“The restrictions were originally protectionist. But… the world has changed. A lot has changed since 1987. The restrictions, the way they are in the Constitution, are inflexible and difficult to change,” Mr. Forbes said.

He added: “The Philippines has tremendous investment potential. There are now more foreign investments coming into ASEAN than China… I don’t think one has to fear foreign investors if you can regulate foreign investors.”

Competition Commissioner Johannes R. Bernabe, also asked to comment, said: “Even as we generally support liberalization in so far as economic activity is concerned, because this fosters greater competition in the markets, regulation should also accompany such liberalization.”

John Paul P. Corpus, a supervising research specialist at the Philippine Institute for Development Studies, said he supports the power of Congress to “legislate exemptions” to foreign investor restrictions.

“We support the proposed amendments giving the Congress’s ability to legislate exemptions to foreign equity restrictions in order to attract greater foreign investments and improve competitiveness. (However)…there is a need to balance the pursuit of economic goals while protecting the national patrimony and the public interest,” Mr. Corpus said.

According to the United Nations Conference on Trade and Development’s (UNCTAD) 2019 World Investment Report on special economic zones, Foreign Direct Investment flows to the Philippines fell 25.75% to $6.46 billion in 2017. — Vince Angelo C. Ferreras

Duterte signs law allowing foreign universities to offer degree programs in Philippines

PRESIDENT Rodrigo R. Duterte has signed a law allowing foreign institutions of higher education to establish commercial enterprises in the Philippines providing educational services and to collaborate with universities here.

Mr. Duterte signed Republic Act No. 11448, also known as the Transnational Higher Education Act, on Aug. 28, according to a statement issued Wednesday by the Palace.

The law cites the need to provide quality education relevant to the changing needs of Filipinos in light of the “rapid developments brought about by globalization, including liberalization of goods and services and expanding use of information and communication technologies, have created a climate for borderless teaching and learning.”

The transnational higher education (TNHE) industry, as defined by the law, covers all types and modes of delivery of higher education study programs, sets of courses of study, or educational services.

Under the law, foreign higher education institutions (FHEI) may establish a commercial presence or provide educational services in the Philippines through various modes or arrangements with a Philippine counterpart.

The law recognizes business models such as Academic Franchising, the establishment of a Branch Campus, and the offering of Joint Degrees with Philippine counterparts.

The law also permits Online, Blended, and Distance Learning; Twinning Arrangements with foreign study components, and Validation, under which an FHEI awards degrees to students who complete a program while studying with its Philippine partners. — Arjay L. Balinbin

Freeze on loan talks affects BRT, climate change funding

THE Department of Finance (DoF) said on Wednesday that two loan agreements being negotiated by the department were affected by a presidential order to suspend such talks with countries that backed a United Nations human rights investigation against the Philippines.

“There are two loans we are looking at. [The] 21 million euros from France supporting the BRT (Bus Rapid Transit) program of DoTr (the Department of Transportation). We already found a substitute for that portion… that is a soft loan but we can get very similar terms from a multilateral agency,” Finance Secretary Carlos G. Dominguez III said during a budget hearing before the Senate Finance Committee.

“The other set of loans is from Germany [which is] $46 million and that has to do with funding studies for climate change. It’s mostly the study and we are looking for a substitute for that program,” Mr. Dominguez said.

Minority leader Franklin M. Drilon had asked Mr. Dominguez about the effects of the suspension of loan talks.

Mr. Dominguez said that agencies have to inform the DoF or the Office of the President of loan programs that have been affected by the presidential order.

A total of 18 countries backed a United Nations resolution calling for a human rights investigation into the Philippines’ handling of its drug war: Australia, Argentina, Austria, Bahamas, Bulgaria, Croatia, Czech Republic, Denmark, Fiji, Iceland, Italy, Mexico, Peru, Slovakia, Spain, Ukraine, the UK and Uruguay.

France and Germany did not vote but were co-sponsors of the resolution.

Meanwhile, the committee approved for plenary discussion the proposed P17.3-billion DoF budget for 2020.

“We will refer your budget to the plenary,” Finance Committee chairperson Juan Edgardo M. Angara said during the hearing.

The DoF proposed a budget 8% lower than its 2019 funding plan.

In the first eight months, the DoF said revenue collection by its agencies hit P2.09 trillion, up 9.5% from a year earlier, including P1.9 trillion from taxes.

The Bureau of Internal Revenue’s (BIR) collections rose 10.6% during the period, while revenue generated by the Bureau of Customs rose 7.2%.

“We are confident this growth will be sustained in the coming period through continuing administrative reforms and the completion of the comprehensive tax reform program that will make our tax system simpler, fairer and more efficient. In both revenue agencies, we are automating processes and strengthening control measures against slippages,” Mr. Dominguez added.

The BIR proposed budget was P8.46 billion, a funding level expected to help “further improve the agency’s tax administration and enforcement capabilities.” — Marc Wyxzel C. dela Paz

South Korea poised to resume chicken imports from PHL this year

SOUTH KOREA is set to accredit new poultry facilities in the Philippines amid plans to resume chicken imports, Agriculture Secretary William D. Dar said.

“The accreditation, which is a follow-up to the lifting of the temporary suspension of imports of poultry and pet birds from the Philippines on July 4, 2019, will also pave way for the resumption of the market access of Philippine duck meat and poultry eggs to South Korea,” the Department of Agriculture (DA) said in a statement.

The start of accreditation was confirmed during a meeting between Mr. Dar and a delegation from South Korea’s Ministry of Agriculture, Food, and Rural Affairs on Sept. 23.

South Korea, along with Japan and Singapore, banned the import of poultry products and pet birds from the Philippines in 2017 after an outbreak of bird flu.

The facilities to be accredited are located in Davao City, Batangas, and La Union. South Korea will bring an audit team to the Philippines to conduct inspections to facilitate the resumption of imports from the Philippines this year.

Mr. Dar said he hopes to increase poultry exports to South Korea.

South Korea imported 140,000 metric tons (MT) of chicken in 2018 from all markets. This is expected to increase to 145,000 MT this year amid continued demand for processed chicken and the attractive prices of imports relative to domestically-produced poultry.

According to the Philippine Statistics Authority (PSA), chicken production in the second quarter rose 3.1% year-on-year to 477,110 metric tons. — Vincent Mariel P. Galang

Global slowdown seen as main risk to PHL financial sector

THE main risk to Philippine financial system is the global economic slowdown, according to the inter-agency Financial Stability Coordinating Council.

In its Financial Stability Report reviewing the events of the second half of 2018 and the first half of 2019, the council identified slowing economic expansion as the “principal risk” to financial stability, and the effects of the slowdown are starting to become apparent in the ASEAN region.

“The effect of the slowdown will be seen through the changes in market prices. And those market price changes will then affect the banking and capital market sectors,” according to Johnny Noe E. Ravalo, the central bank’s Assistant Governor at the Office of Systemic Risk Management and the Head of the FSCC Technical Secretariat, who was speaking at a media.

The FSCC’s members are the Bangko Sentral ng Pilipinas (BSP), Department of Finance (DoF), Philippine Deposit Insurance Corp. (PDIC), and the Securities and Exchange Commission (SEC).

He said unlike previous financial crises, no region is expected to be immune from the impact of the slowdown.

“We’ll see that in terms of (lower) incomes, and therefore also ability to repay outstanding obligations, and the changes in the currency markets,” Mr. Ravalo said.

The effects on the Philippines have led the BSP to cut rates by a total of 50 basis points (bps) this year — lowering by 25 bps each on May 9 and Aug. 8 — to 4.25% for the overnight reverse repurchase rate, 4.75% for overnight lending and 3.75% for the overnight deposit rate, partially dialing back the 175-bp worth of rate hikes triggered by the 2018 inflation crisis, which helped bring rates to a nine-year high.

Despite the global slowdown, Mr. Ravalo said Philippine growth is only “moderating.”

“Unlike the rest of the world (which is) probably growing at close to two and a half to 3%, the Philippines is still growing at 6%. So if there’s going to be a slowdown, we do have a little bit of a buffer,” Mr. Ravalo said.

As of March, the government projects gross domestic product (GDP) in 2019 to come in at 6-7%.

The FSR’s multi-period coverage allows the council a more complete view of the system’s performance, according to BSP Governor Benjamin E. Diokno.

“The fluidity of evolving issues H1 2019 made it imprudent to limit ourselves to 2018 issues only, and thus, we cover the first semester of 2019 as well. This better represents how market volatility has changed, not just between more versus less but also between volatility heading upwards versus volatility heading the other way,” the central bank chief said at the launch of the FSR. — Luz Wendy T. Noble

Re-establishment of the prior disclosure program

With the issuance of Executive Order No. 46 on Oct. 20, 2017, the duty of conducting the post clearance audit on imports was transferred to the Bureau of Customs (BoC) from the Department of Finance’s Fiscal Intelligence Unit. Along with the reversion of the Post Clearance Audit (previously known as the Post Entry Audit) to the BoC, it also brought back the Voluntary Disclosure Program (VDP) now called the Prior Disclosure Program (PDP).

Under Customs Administrative Order (CAO) No. 01-2019, the PDP allows importers to voluntarily disclose and report to the BoC simple errors in their import declarations and payment of duties and taxes for correction. However, unlike the previous VDP where no penalties were imposed, the PDP imposes penalties that may be waived with the approval of the Secretary of Finance.

As in the case of the VDP, the PDP is available under two scenarios: (a) before the receipt of an Audit Notification Letter (ANL) or (b) upon receipt of an ANL but before the field audit to be conducted by the Post Clearance Audit Group (PCAG).

The penalty rules under the PDP are enumerated below:

• For importers who have not yet received an ANL, deficiency duties and taxes will only be subject to 20% interest per year which is counted from the date of the final assessment of imported goods. However, additional duties and taxes paid due to royalty payments, filed within 30 days from the date of payment or accrual of the proceeds, are not subject to any penalties.

• For importers who have already received an ANL, deficiency duties and taxes will be subject to a 20% interest with a penalty of 10% of the deficiency duties, taxes and interest.

To avail of the PDP, the following procedures will apply:

1. The applicant shall accomplish BoC Form B (PDP application form) with an Affidavit of Undertaking signifying the importer’s agreement that should the application be denied, they will be subject to a full audit by the PCAG, and any resulting deficiency duties and taxes shall be subject to the corresponding penalties and 20% interest. Once accomplished, include the above with the payment of the disclosed amount as indicated in the form to the BoC — PCAG, which shall in turn issue the corresponding BoC official receipt (BCOR).

2. The applicant shall submit the duly accomplished BoC Form B, Affidavit of Undertaking, and BCOR to the PCAG for further verification and approval.

3. Upon approval of the PDP application by the PCAG and the Commissioner of Customs (CoC), the application papers shall be forwarded to the Secretary of Finance for final approval, if there is a request for waiver of penalties, interest, fine or surcharge.

4. Upon approval of the PDP application by the PCAG, the CoC, and the Secretary of Finance, the BoC shall inform the applicant in writing about the close of the audit.

However, the PCAG may opt to deny the PDP application and recommend a full audit of the applicant with the approval of the CoC. Consequently, the applicant will be subject to a full audit, and any resultant deficiency duties and taxes shall be subject to the imposition of 25% to 600% penalties and 20% interest. Any payment made through the PDP application by the importer shall be credited against the deficiency assessment that may be issued by the BoC.

In the processing of the PDP application, the following issues may arise upon review of the applicant’s import applications: the proper valuation of imported goods, computation of royalty payments, non-inclusion of fees or charges on the dutiable value or the landed cost, etc.

In consideration of these concerns, applicants of the PDP should make a complete disclosure of their issues to ensure that their application will not be denied after review. Applicants may consider seeking expert advice and assistance to mitigate the risk of denial, to fully maximize the benefits and available rights they are entitled to under the BoC rules and regulations, and to raise defenses in the protection of their rights.

Although the benefits of the PDP are not as liberal as those in the previous VDP, it could still be considered a good opportunity for the importers to correct their import declarations, evaluate their customs practices in compliance with the customs rules & regulations, and reduce the penalties that could be incurred if the BoC–PCAG proceeds with the audit of their import transactions. The PDP not only assists the importer applicant with the proper declaration of their import transactions but also supports the BoC in its bid to increase revenue collection and spur economic growth in the country.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Mikhail J. Escoto is a senior associate at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.

+63 (2) 845-2728

mikhail.j.escoto@ph.pwc.com

Journey to wholeness: Material development

Filipinos are generally spenders. This is our nature in terms of handling finances. After all, we only recognize the importance of savings and investments when in a crisis, we do not have enough money to spend.

I remember when I was in high school, we had this subject called Cooperative. Students were encouraged to save money from our daily allowances and deposit in the Coop. We were given passbooks and the money earned interest. However, there were no guidelines on how much do we needed to save or how to grow our money.

It would be helpful if schools, as early as grade school, introduce financial management using terminology that is easy to understand. Further, the school needs to inculcate thriftiness among students in the use of personal and school resources. If students know the value of saving money, they will start to allocate money for emergency and future use. Saving will then be second nature to them.

Sadly, I did not get into the habit of saving money early on, but since I have decent earnings, I can afford to rent a small apartment and spend for all my basic necessities and even graduate school tuition fees. I also provide funds to cover some of the expenses of my senior citizen parents.

As they say, it is not how much you earn but how much you are willing to save that matters most. This is my story and I urge you to learn from my experience.

I invested heavily in my education. In 2005, I took up graduate studies in Teaching at De La Salle University, which I was able to complete in 2008. It was only in 2009 that I was able to invest money in buying stocks from blue chip companies like Ayala Land, SM, and Aboitiz Power through COL Financial, an online brokerage firm. I learned investment tips from a seminar I attended through Bro. Bo Sanchez. It was just a trial on my part. Though inconsistent, whenever I had money, I added a few thousands and bought more stocks. Every year, I noticed that dividends were coming in and my shares of stocks were really earning. I did not sell my stocks since I consider myself as a long-term investor. I knew that my investment would grow over time.

In 2011, after 11 years of working, my brother became a sales agent in a memorial company and since he needed to have three immediate sales, I bought one memorial plan, which includes a decent coffin and a three-day memorial service, and with investment component which I paid in five years.

In 2013, my sister encouraged me to buy an investment fund with a bond and equity component from Philam Life. My brother-in-law used to work with Philam Life. So, I bought a one-time money tree investment at P125,000 and the investment portfolio was managed by a fund manager.

In 2014, I decided to buy a personal health card worth P200,000 payable in five years and with an investment component too. I was just thinking I might be able to use it when I am not working anymore or when I am already old since my company health card can only be used while I am employed in the company.

In December 2017, through an Initial Public Offering, I bought a Retail Treasury Bond (RTB) from Security Bank. I used my 13th month pay to fund this investment.

In 2018, I decided to fast track the completion of my MBA, which had been taking too long for me to complete. While studying, I took a full-time job in a medium-scale company with a much lighter workload than my previous job, to have more time to research and study and, at the same time, I can pay for most of my bills and other personal expenses.

In December 2018, I resigned from my job and underwent an operation. Fortunately, I was able to use the personal health card which I bought in 2014. Although my hospitalization expenses were not fully covered, my card covered P50,000 of my bill, almost all my laboratory tests, and check-ups. Having the card was such a big relief!

Now that I am completing my studies as a full-time student, I realized I should have saved and invested more while I was working. Nevertheless, my previous investments in COL Financial, Philam Life, and Security Bank have helped me. I was able to pay for my basic needs using my investments. Because of my health card, I do not worry about doctor’s fees. Having sufficient means in the material aspect of life is such a blessing and it does affect all other aspects of integral human development such as bodily, cognitive, aesthetic, cultural, emotional, social, spiritual and moral in one way or the other. They are all intertwined to make you whole.

 

Jerrel G. Lopez is an MBA student at De La Salle University. This article is part of her reflections on her experiences in the course, Integral Human Development.

https://integralhuman developmentflower.blogspot.com/

University parking

When I went to UP Diliman, parking was not a problem. Far more students stayed in dormitories or commuted to and from school in those days. And of the few who drove to school, many of them were in car pools. In my case, I was lucky enough to be in such a pool, and there were five to six of us regularly taking the same ride going home to the south.

Nowadays, however, a lot more cars are going through the university and its vicinity. Vehicular traffic is almost always heavy in the areas of UP, Katipunan, Loyola Heights, Balara, Capitol Hills, Ateneo, and Miriam College, even on weekends. More significant intervention, and meaningful infrastructure, are urgently needed to ease the congestion and the pollution.

From the corner of University Avenue and Commonwealth, all the way to UP’s administration building, is a vast open space that I estimate to stretch about 800 meters long and about 150 meters wide. That’s an area that is perhaps bigger than UP Town Center on Katipunan, and maybe about half of UP TechnoHub on Commonwealth Avenue.

The property is right beside the light rail transit now being constructed along Commonwealth Avenue (MRT-7) that will run from North Avenue in Quezon City all the way to San Jose Del Monte in Bulacan. The MRT-7 is planned to have an underground or “depressed” station at University Ave.

I believe the property has big potential, and that it can be developed in a way that it can better serve not only the UP community but the neighboring communities as well. While Commonwealth Ave. is commercial, most of the areas behind the commercial properties are residential. And many of these residents will surely be using the MRT-7 once it operates.

Perhaps UP can convince MRT-7’s developer San Miguel, or Ayala Land — which took on the long-term lease for the commercial development of UP Town Center and UP TechnoHub — to also consider developing the corner of Commonwealth and University Ave. into what can be called the “UP TranspoHub.” The place will primarily be a bus depot and parking facility, and ideally, should be operational by the time MRT-7 starts running.

What I envision is something that can be quickly built, and can be removed just as fast. No permanent structures will be put up. Instead, a vast three- or four-level steel parking can be set up on the property — similar to the steel parking building that Ayala Land had put up at UP Town Center, or the Parkade buildings in Bonifacio Global City.

The first level can be used as a station for electric buses that will run from Commonwealth Ave. all the way to the Katipunan North Entrance of the LRT-2 on Aurora Blvd. The electric buses will go around UP, then Katipunan and UP Town Center, then Miriam College and inside Ateneo, and then onto the LRT-2 station on Aurora. And then it returns to University Ave. via Tandang Sora and Commonwealth, passing TechnoHub along the way.

Of course, the buses must be electric. UP Ikot jeeps as well as diesel buses servicing these areas — maybe UP Katipunan jeeps as well — will all have to go. Only UP residents will be allowed to bring cars into the university via the peripheral roads. But, University Ave., the Academic Oval, and parallel streets will all be car-free, permanently. Old parking lots within the Oval and parallel streets will be redeveloped into “green” areas. UP Diliman will become a “green” zone.

The three-level steel parking will have a bus depot and some shops in the first level, and then pay parking spaces for students and other people in the second and third levels. Teachers and UP staff will have reserved spaces for long-term parking. All UP-bound cars will have to be parked in the building — absolutely no cars on campus except for residents, and only on limited access to and from residences.

Access to the university will be through the electric buses going to designated stops; via bicycles from the parking depot; or, by electric scooters or walking from the parking. Covered walkways along University Ave. will allow students to access buildings even on rainy days. With the oval car-free, these walkways need not be elevated like the ones on Dela Rosa in Makati.

The parking building will also be per-hour pay parking for Diliman residents who wish to leave their cars and take the MRT-7 to Bulacan or to North Avenue, and connect to MRT-3 or LRT-1 to go to Pasay, Manila, or Makati. For those intending to take LRT-2, they can take the electric bus to Katipunan and Aurora Blvd. Those intending to take the P2P bus to Makati City can get off the electric bus at UP Town Center.

An important element of this proposed parking project is that the topmost floor of the parking facility as well as two or three sides of the building will be installed with solar panels. The facility should be made energy self-sufficient, and should have enough power to recharge the electric buses. Any surplus energy can be made available the university for its use.

In line with this initiative, other solar panels can also be put up in other unused open spaces of the university, for self-generation of electricity. All building rooftops should have solar panels. The gymnasium’s roof alone can already carry hundreds of panels that can help generate power for the university.

Depending on the agreement with the developer, UP can earn from the long-term lease of the property and perhaps get a share in the income from the operation of the parking facility and the electric buses; and the rental fees from commercial spaces. Moreover, UP can generate electricity from its own solar panels. In addition, the Diliman Campus becomes a green zone and addresses the issues of congestion and pollution.

And when the long-term lease ends, all the improvements can be retained by UP and it can opt to continue operating the parking/solar facility and the electric buses. Or, the lessee can dismantle everything and return the land to UP, which can opt to use it for other purposes by then. Either way, UP — and the public — lose nothing by moving now to make use of the idle property.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.

matort@yahoo.com

Energy leftism will plunge the Philippines into darkness

The continuing anti-coal paranoia of many leftist political groups and greenie environmentalists is largely based on emotion and alarmism, far away from reason and energy realism. And based on watermelon activism — green on the outside, red on the inside.

I constructed this table below to show why I said this. The data on coal consumption in million tons oil equivalent (mtoe) is from the BP Statistical Review of World Energy (June 2019), the data on population is from the IMF World Economic Outlook database (April 2019). Simply dividing coal consumption over population we can derive the kilos of oil equivalent (koe) per capita. (See Table 1).

Does the Philippines’ coal consumption of only 153 koe per person in 2018 appear to be “too scary, too Frankensteinin,” that the country should limit — if not stop building — new coal plants and phase out old coal plants? If it is too scary, then how would the watermelon activists call the coal consumption per capita of Australia, South Korea, Taiwan, and China which are nine times to 11 times larger than the Philippines’ — horribly Frankensteinly scary?

Aside from the mythical claim that the Philippines already has big coal power capacity, another dishonest claim by the paranoid anti-coal groups is that coal power will only produce more expensive prices as “stranded costs” that the consumers have to pay for decades. Far out.

The biggest private distribution utility in the country, Meralco, has successfully conducted a Competitive Selection Process (CSP) bidding and got contracts for 1,200 MW of baseload (power plants running 24/7) power with the following all-in prices, VAT inclusive: South Premiere Power for 670 MW, P4.93/kWh; San Miguel Energy for 330 MW, same P4.93/kWh, and PHINMA Energy 200 MW, P4.88/kWh.

Two things are notable about these future fixed generation prices: One, they are cheaper than recent generation charges by the company which were P5+ per kwh. (See Table 2)

And two, coal prices would go up further in 2020 and beyond because of the higher excise tax on coal under the TRAIN law, from P10/ton to P50/ton in 2018, P100/ton in 2019, and P150/ton in 2020. And yet future prices of coal power for electricity will go down to below P5/kWh.

Another group of energy leftists rallied to oppose the 1,200-MW Atimonan One power plant because it is a coal plant. Going back to Table 1 as previously mentioned, we have very little coal power consumption despite having zero nuke power, little natgas power from the ageing Malampaya gas field, and ageing hydro, geothermal, and coal plants. If the lefties succeed in opposing new coal plants, we are courting a scenario of frequent blackouts in the coming years.

The anti-coal groups and activists can only mouth slogans and emotional statements, not facts-based research. They should not brag in their lousy and emotional campaigns, they should be ashamed instead because they are dragging the country towards darkness and frequent blackouts, of less power reserves but more political noise.

 

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

minimalgovernment@gmail.com

Respect, renunciation, and resilience

By Raju Mandhyan

IT’S SAD enough that the world is broken up into so many geographical parts. We have drawn lines of differentiation from the North to the South Pole, from the East to the West. Our beliefs, ethnicities, and cultural mindset further influence our attitude and treatment of others, putting them into stereotyped segments. Effective and successful leaders must strive to rise above all this murk. They must have an open and supportive mindset backed by immense tolerance for other people who do not reason, romanticize, or react to issues the way they do.

Although the human brain is divided into the three functional segments of reasoning, romanticizing, and reacting, every single one of us is a unique individual because of different genetic permutations, diverse backgrounds, and variances in education and exposures. Unfortunately, societal programming leads us into generalizing and stereotyping people at first glance. Effective and successful leaders respect diversity by accepting that people are different. Their behavior is simply different; not necessarily bad or worse than our own uniqueness. In addition, leaders and successful salespeople profoundly recognize that human circumstances and perspectives are in a state of constant flux. Perceived realities vary and these realities change from moment to moment all the time.

A buyer who shows an interest in your product on Monday morning may suddenly have a shift in his circumstances and could change his mind on Tuesday afternoon. The ultimate reality is different realities — and they are changing all the time. It’s easy to say “different strokes for different folks” or “the only constant in this world is change” but it’s totally another matter to live out these truths. To succeed across diversity and constant change, we must live out these beliefs and practice open-mindedness, flexibility, and adaptability… all the time, every time.

In the world of neurosciences and its application to work, there exists a respected group of consultants who do not at all use the word “is” when describing another person in their communications and interactions. Why? They believe what “is” means to the speaker is simply that particular speaker’s perspective; not solid fact. What “is” today may not be what “is” tomorrow. Everything and everyone is always changing.

Respecting diversity amongst people is a challenging habit to live out and practice. Yet it can grant us the power of being a super sales performer and a human being above par. With this habit we can become active learners, early adapters, and resilient Samurais of interpersonal skills in every sales and selling interaction. It keeps our proverbial “saw” eternally sharp so it can cut, softly and subtly, through the hardest of challenges.

An attitude and mindset like this builds resiliency, helps us practice Zen-like renunciation from short-term results and instant gratification common in the business of selling and driving positive change. So go leap of those cliffs every day and, should you fall, then get up, dust yourself off, and get into the pit again and again. Remember to respect differences, renounce the anguish of failure, and keep your spirits bouncy.

 

Raju Mandhyan author, coach and learning facilitator.

www.mandhyan.com

Big oil tussles with teens, tweets and trust

By Liam Denning

IN CAPITAL MARKETS, trust boils down to — what else? — money. The more trusted you are, the more money investors will give you at a relatively low cost. Trust is in the eye of the beholder, of course. The US government borrows fantastical sums at next to nothing, as you might expect. Then again, WeWork was also showered with cash despite a gaping wound of a P&L statement and multiple red flags.

Some of the world’s biggest oil companies were grappling with this squishy concept at a Monday gathering on the fringes of United Nations Week in New York. The Oil and Gas Climate Initiative is a group of 13 majors representing roughly a third of global oil and gas production. Founded in 2014, it aims to provide a reasonably unified industry response to climate change, with a particular focus on such things as reducing methane emissions and encouraging carbon capture technologies.

Or maybe it’s greenwashing. That, at least, was the gist of one of the opening, and more provocative, questions posed in a long afternoon session at the Morgan Library & Museum. Ben van Beurden, CEO of Royal Dutch Shell Plc, gamely took it on, arguing the sheer scale of the climate-change challenge means big, motivated companies like his must play a crucial role. It’s a valid point, and Shell has moved perhaps the furthest in realigning its business and targets in this way.

But the industry must contend with the reason he had to answer the question in the first place: decades of opposition to taking action. That same day, not too far from the OGCI’s gathering, teenage activist Greta Thunberg delivered a scathing speech on that very subject to assembled world leaders. While many, including the US president, have reacted with sarcasm or worse to Thunberg’s campaign, millions have come out in support; and her frustration at the lack of urgency about climate change is justified.

Darren Woods, CEO of Exxon Mobil Corp., framed the challenge of meeting energy demand while reducing carbon emissions as an “evolution” of the industry, which will be led by technology. He is right about the latter, but I suspect technologies like Twitter and other social media could play an even bigger role than things like biofuels from lab-grown algae.

Ignoring or obfuscating climate change for many years has had a similar effect to pulling on an elastic band. Frustration and a sense of urgency on the issue have grown, dovetailing with our wider political environment of anger, memes and divisions between party tribes and generational cohorts. A carbon tax, as the OGCI calls for, would constitute an evolution of sorts, albeit a wrenching one. Bold as that might seem, though, the long delay means it now jostles with more prescriptive proposals that could truly snap the elastic back, disrupting the oil and gas business and maybe stranding assets.

Swedish climate activist Greta Thunberg — REUTERS

Voters still love the things that oil and gas provide, of course, so there is no guarantee Thunberg’s words or Green New Dealers’ sweeping plans will be anything more than that. Yet the inexorable logic of climate change and falling costs of renewable technologies and electric vehicles suggest change is coming in some form. The point is, the range of potential outcomes may be wide, but that’s a lot different from the more certain world in which the oil majors have been used to operating, where prices swing about and there’s the odd expropriation of assets or war but, in the end, demand always goes up.

While videos of Thunberg’s speech zipped around the ether, another UN-led announcement that day got less attention: namely the formation of the Net-Zero Asset Owner Alliance by a group of institutional heavy hitters managing more than $2 trillion. The group aims to not merely shift their portfolios to compliance with net-zero greenhouse gas emissions by mid-century but also to advocate for companies to similarly align themselves.

What makes this pressure especially troublesome is that it comes at a time when the sector has only recently begun trying to rebuild trust with capital markets after the oil crash. Scarred by poor returns and wary of the climate-change crapshoot, generalist investors have backed away. This is trust, or the lack of it, manifested as money. As I wrote here with my colleague Nathaniel Bullard, energy stocks now sport dividend yields at their highest levels in 25 years.

The day after attending the OGCI gathering, Patrick Pouyanné, the CEO of Total SA, announced the French oil major would bump its dividend growth from 3% to 5-6% a year, effectively distributing an extra $5 billion to investors through 2025. This both advertises Total’s confidence in its low breakeven oil prices and bumps its own yield closer to 6%. In other words, it’s a big call on investors to trust the company’s got this.

This is the difficult balancing act the industry must now pull off. In the year through June, the OGCI’s members collectively paid out $138 billion of dividends. Technically discretionary, they are now more like the ante just to play. Yet investors are demanding a bigger cut of cash flow even as these companies, to varying degrees, are trying to not only maintain their current operations but also invest in newer technologies that aren’t likely to generate the cash needed to support those payouts anytime soon.

Investors’ trust in the industry’s ability to deploy capital effectively in its core business has waned. Now it must rebuild that while also asking for trust to spend money on entirely new ventures — and all against the backdrop of denuded societal trust. The companies are compelled to try anyway. You can trust it won’t be easy.

 

BLOOMBERG OPINION

TNT opens campaign on winning note, routs Elite

By Michael Angelo S. Murillo
Senior Reporter

THE TNT KaTropa got their Philippine Basketball Association Governors’ Cup campaign to a winning start, routing the Blackwater Elite, 135-107, in their battle of debuting teams on Wednesday at the Smart Araneta Coliseum.

Found their offensive groove early in the contest, the KaTropa, runners-up in the previous conference, charged no end and built on it the rest of the way.

The KaTropa had a fiery start with contributions coming from different directions.

They would hold a 53-30 lead with 6:32 left in the first half and threatened to pull away.

But Blackwater made a spirited 13-0 run in the next three minutes to make it a 10-point affair, 53-43.

KJ McDaniels and the rest of the KaTropa though steadied their ship after to widen their advantage anew, 63-46, at the half.

In the third quarter the Elite were able to build momentum to gain some real estate on the lead of forward Mac Belo.

They came to within 12 points, 66-54, with just two minutes lapsing.

Like what they have been doing for much of the game, however, the KaTropa continued to find ways to cap any headway by the Elite.

Roger Pogoy and Don Trollano helped TNT answer with a 19-6 run to make it a 23-point lead by the 5:14 mark of the quarter.

The Elite tried to narrow the gap for the remainder of the period but with little success as the KaTropa continued to hold sway, 97-80, with one final quarter to play.

With firm control of the match, TNT spent the fourth quarter fortifying their lead some more before going for the closeout.

The score was at 122-94 for the KaTropa with 4:12 remaining and by then it was all over.

Mr. McDaniels led the balanced and thorough attack by TNT with all-around numbers of 41 points, 22 rebounds, seven assists, five blocks and two steals.

Mr. Pogoy had 22 points with Troy Rosario and Mr. Trollano adding 18 and 17 points, respectively.

Jayson Castro, meanwhile, had a near triple-double of 17 points, 12 assists and nine rebounds for the KaTropa.

TNT shot 60% from the field and had 32 assists for the game.

For Blackwater it was Ray Parks Jr. who showed the way with 39 points with Allein Maliksi adding 15 and Roi Sumang 14.

Import Marqus Blakely had a poor showing, finishing with just four points and four rebounds before limping out because of cramps in the third quarter and did not come back.

TNT next faces the Rain or Shine Elasto Painters on Sept. 28 while Blackwater battles the NLEX Road Warriors on Sept. 29.

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