Facebook Instagram Linkedin X Youtube
Home Blog Page 9023

DTI’s Lopez backs foreign ownership limits for small construction firms

TRADE Secretary Ramon M. Lopez is seeking to retain restrictions on foreign ownership for smaller businesses in the construction sector.

A recent Supreme Court ruling reduced restrictions on foreign entities in the construction industry, voiding the nationality requirements in contractor licensing rules set by the Philippine Contractors Accreditation Board (PCAB).

The case was based on the board’s denial of Manila Water Co.’s application to accredit its foreign contractors.

Mr. Lopez, who chairs the board of the Construction Industry Authority of the Philippines, said the ruling would encourage more foreign investment.

However, he said contracting businesses with capital of less than P100 million should be reserved for Filipino ownership.

For micro, small and medium-sized enterprises, “we can still hopefully give a certain level (reserved) for Filipinos,” he said at a Senate budget hearing Monday.

“But the large (businesses) obviously will be open to more competition and allow more foreign players… the other concern… is also guaranteeing the work and having traceability and we can run after the contractor (if there are problems),” he added.

Persons licensed with the PCAB would be able to practice construction contracting in the Philippines, regardless of citizenship or nationality, under House Bill (HB) No. 7337.

HB 7337 seeks to amend Republic Act (RA) 4556 or the Contractors’ License Law.

The Implementing Rules and Regulations of RA 4556 limits construction industry business ownership to Filipinos, approving licenses to contractors that are either Filipino sole proprietorships or 60% Filipino-owned.

House Committee on Trade and Industry Chair and Valenzuela representative Weslie T. Gatchalian in his sponsorship speech for HB 7337 said that the implementing rules do not promote competition, creating barriers for foreign contractors.

But Minority Leader Bienvenido M. Abante, Jr. said that the unregulated entry of foreign contractors would hurt small and medium-sized Filipino contractors, and could lead to a decline in job opportunities for Filipinos.

The Philippine Competition Commission (PCC) in a statement on Sept. 15 supported the Supreme Court ruling.

“With the regulatory barrier struck down, competition among contractors should fall squarely on merit and not based on undue advantage based on nationality alone,” the commission said.

The decision could encourage the entry of more contractors that price their products competitively and offer more options to consumers, PCC added.

Mr. Lopez said that the private sector is working on an appeal for reconsideration of the Supreme Court ruling. — Jenina P. Ibañez

Legislator backs more budget support for failing, closed small businesses

A MINORITY legislator said Monday she supports measures within the national budget providing credit access to help revive faltering or closed small businesses, in the interest of minimizing job losses.

Marikina Representative Stella Luz A. Quimbo, speaking in a plenary session on the proposed P4.5-trillion budget for 2021, said she backs more credit mediation services for micro, small, and medium enterprises.

“We should use our borrowings for businesses which have shut down, to help them start all over again. We should use borrowing for our declining businesses, to avoid job losses” she said in English and Filipino.

Ms. Quimbo said the government must take advantage of the country’s credit rating to borrow funds for stimulus programs, especially for businesses.

Moody’s Investors Service affirmed the country’s BAA2 credit rating in July with a stable outlook.

The country needs to return to pre-pandemic levels of performance by next year, with businesses resuming full operations, Ms. Quimbo said.

Meanwhile, House Ways and Means Chairman and Albay Representative Jose Ma. Clemente S. Salceda backed a further set of recovery programs similar to Bayanihan to Recover as One Act (Bayanihan II), or Republic Act No. 11494.

He said, however, that it is a “judgement call” whether to borrow more for stimulus programs, saying that the Philippines can only go as far as borrowing the equivalent of 9% of gross domestic product (GDP).

“It is a judgment call for the Duterte government. The bottom line: it is a judgement call,” he said.

Mr. Salceda said increased investment in infrastructure under the proposed 2021 budget, which he described as “unprecedented,” will have multiplier effects that can make the economy more productive.

The Build, Build, Build program is poised to receive P1.107 trillion under the proposed budget, which is equivalent to 5.4% of GDP. — Kyle Aristophere T. Atienza

MSMEs say operations still limited despite easing lockdowns

REUTERS

MOST MICRO, small, and medium-sized enterprises (MSMEs) reported that they remain unable to fully reopen or are still closed even after lockdown restrictions were eased, citing weak demand, mobility issues and lack of funds, according to a survey by the United Nations Development Programme’s (UNDP) Philippine office.

In its second MSME Value Chain Rapid Response survey, the UNDP said 49% of MSMEs remain closed while 38% others are at reduced capacity, out of 285 respondents surveyed between June 13 and July 23, or about two to six weeks after the enhanced community quarantine (ECQ) was lifted in Metro Manila and other key areas.

Around 4% had shut down their businesses permanently, 5% reported normal capacity operations, while 4% expanded.

“The persistently sluggish demand from consumers, shortage in transportation and logistics issues, as well as lack of financing were reported as the primary hurdles in resuming business operations,” according to the report, which was released Monday.

The UNDP said micro and small enterprises reported the lowest share of firms still operating at reduced capacity and the highest share of closures, whether temporary or permanent. No medium-sized or large companies said they closed permanently but many are operating at a lower capacity.

“This suggested that some enterprises, due to relatively smaller operations, were not able to survive the adverse impacts of COVID-19 (coronavirus disease 2019) and unlike medium and large enterprises, micro and small enterprises may not have had the capacity to continue operation at a decreased capacity, thereby opting for temporary closure of their businesses,” it said.

The most affected businesses were those in the accommodation sector after all MSMEs surveyed in the industry reported declines in average monthly earnings.

Some 26% started laying off employees while 36% managed to keep all workers and pay full salaries.

MSMEs have embraced digital platforms at a rate of 62%, while 35% said they diversified their product and service offerings, 31% adopted cashless payments and 29% resorted to remote work.

It said most businesses reported the need for assistance and 60% say they have received none. They said access to credit, tax breaks, and deferred loan payments would help them the most.

“We are in the middle of a once-in-a-lifetime emergency. I know you are worried about your health, scared to open your businesses. But for the sake of our families and ourselves, we have to take that step and reopen while maintaining safety standards. We have to find a way to keep going as long as we need to,” Butch Meily, president of Philippine Disaster Resilience Foundation was quoted as saying in a statement Monday.

The second survey follows an earlier study in which the UNDP asked 315 respondents in the first half of May about their status during ECQ.

Around 72% of respondents in the latest survey were micro enterprises, 18% were small businesses, 7% were medium-sized while 3% were large companies.

Most of the country was placed under ECQ from mid-March to May, but lockdown restrictions have been gradually eased.

“One of the most evident impacts of COVID-19 that cut across all business sectors was the lack of demand from consumers,” the UNDP said.

It said the weak demand can be addressed through a stronger pandemic response from the government, inclusion of MSMEs in public sector procurement, and a balanced mix of monetary and fiscal policies to boost spending of both the government and households.

“Further analysis of the survey results showed that while there were general concerns shared by most MSMEs, there were also issues specific to each sector. As such, the government should facilitate MSMEs’ sector representation in policy dialogues and program planning to come up with a better, targeted approach to prevent further closure of MSMEs,” it said. — Beatrice M. Laforga

Fisheries sector seen requiring more cold storage, better supply chain

THE fisheries sector needs more cold storage and improved supply chains to survive the adverse effects of the coronavirus disease 2019 (COVID-19) pandemic, an advocacy group said.

In a virtual briefing Monday, Tugon Kabuhayan convenor Asis G. Perez said ice plants are critical to help fishing communities preserve their catch and cut down on waste.

“Unlike rice which you can store, fishery products need refrigeration and good cold storage facilities. Around 1.5 kilograms of ice is required to properly store one kilogram of fish,” Mr. Perez said.

Mr. Perez, a former Bureau of Fisheries and Aquatic Resources National Director, said the government should also protect fishing grounds to help fishing communities that depend on wild catch.

He added that enforcing closed seasons will let fish populations recuperate during their spawning period.

Mr. Perez also encouraged more domestic consumption of tuna and salmon due to the disruption of supply chains, particularly those meant for export, as a result of the pandemic.

Mr. Perez said fisheries exports, particularly high-end products, are transported via plane and many must be delivered within 48 hours from harvest to preserve quality, adding that the supply chain disruptions over the past months brought the price of tuna to P140 to P150 per kilogram from P200.

He said that since transportation has become irregular due to the pandemic, a viable solution is to increase domestic consumption.

“Some of the country’s fisheries exports are sent to Japan and Europe. Since the supply route is affected by the pandemic, we urge stronger local consumption of fisheries produce,” Mr. Perez said. — Revin Mikhael D. Ochave

Bids sought for connector road to New Clark City Airport

THE Bases Conversion and Development Authority (BCDA) has started soliciting bids for the construction of a connector road from MacArthur Highway to New Clark City Airport Road located at the Clark Freeport Zone.

In an invitation to bid announcement published in a newspaper Monday, the BCDA said it started selling bid documents for the project on Sept. 21. It will be accepting bid submissions until Oct. 28.

In its announcement, the BCDA said it “intends to apply the sum of P479,999,379.61 inclusive of all applicable taxes and fees, being the approved budget for the contract, for the construction” of the road project.

It said the bidding is restricted to Filipinos; and partnerships, corporations, organizations or joint ventures with at least 60% interest or outstanding capital stock belonging to citizens of the Philippines.

A set of bid documents is available for P50,000, the BCDA said. — Arjay L. Balinbin

Japan remains top source of ODA with over $10 billion in first half

JAPAN remained the Philippines’ top source of foreign aid in the first half, with $10.03 billion as of June, according to the National Economic and Development Authority (NEDA).

Active foreign funding from the Japanese government hit $10.082 billion in the first half with $10.03 billion in loans and $51.91 million in grants, according to NEDA. Japan accounts for 38.49% of official development assistance (ODA) received by the Philippines.

The Philippines’ active ODA portfolio was $26.193 billion, with $24.552 billion in the form of loans and $1.641 billion in grants.

Japan was also the biggest source of ODA funding as of March and also in 2019.

The Asian Development Bank was the second-largest source of foreign aid, accounting for 26.97% or $7.064 billion, followed by the World Bank with 18.9% or $4.951 billion.

The Asian Infrastructure Investment Bank (AIIB) became the fourth-biggest source of ODA as of June from ninth place as of March. AIIB funding amounted to $957.6 million, or 3.66% of the total.

Others in the top 10 were South Korea with ODA worth $631 million (2.4%); China $590 million (2.25%); the US $578 million (2.21%); France $422 million (1.61%); the United Nations $349 million (1.33%); and Australia $290 million (1.45%).

Other partners were the European Union ($138 million); Germany ($43.05 million); Italy ($39.86 million); the OPEC Fund for International Development ($30 million); Canada ($14 million); Spain ($9.8 million); and New Zealand ($3.89 million).

Meanwhile, the usage rate for ODA loans improved to 41.45% in the first half from the 35.55% a year earlier.

Drawdowns amounted to $10.176 billion out of total commitments worth $24.552 billion in the six months to June, after a 51% increase in total loans from $16.208 billion a year earlier. — Beatrice M. Laforga

US signs P10.5-billion PHL aid package to promote inclusive growth, ease of doing business

THE US Agency for International Development (USAID) said it signed a P10.5 billion, five-year bilateral assistance agreement with the Department of Finance to support projects promoting inclusive economic growth.

USAID said in a statement the aid will also support projects to improve the business environment and digital-economy and innovation initiatives boosting small businesses.

It said the recently-signed agreement is one of the four new development assistance agreements the USAID is planning to launch this year for the Philippines. The proposed agreements have a combined value of P32.7 billion over five years.

“This new USAID and Department of Finance bilateral agreement will expand our support to help the Philippines achieve long-term, private sector-led economic growth and strengthen economic governance. These programs will create jobs and help ensure more inclusive, broad-based economic development,” said USAID Mission Director Lawrence Hardy II.

The aid will also support activities to improve the capacity of civil society organizations in program management and policy making, and facilitate partnerships between the government and stakeholders to help them make data-driven decisions, USAID said. It said it will continue to support the government’s goal of improving public sector transparency and accountability, in advancing the rule of law and improving local governance.

Other new programs will be implemented by various agencies, including the Health department which is tasked to boost health systems and services, especially for the treatment for tuberculosis, as well as expand the access for family planning services and community-based drug treatments.

In May, USAID said it will give financial aid to micro, small, and medium enterprises to help them recover from the ongoing crisis.

The US has extended P228.8 billion to the Philippines over the past 20 years, including P780 million to fund pandemic-containment measures. — Beatrice M. Laforga

Easing the burden through Bayanihan II’s tax breaks

It has been over six months of quarantine and the fight against this pandemic has been challenging. Coronavirus disease 2019, or COVID-19, is an unusual enemy that does not allow us to fight back head-on or face-to-face. It is the type of enemy that makes us hide and stay at home if we want to win the battle. Nonetheless, I believe that resilience is inherent among us Filipinos, with all the difficulties we may have probably experienced in our lives.

Our government is no different, showing its resilience in coming up with measures to combat the impact of COVID-19. Recently, Republic Act No. 11494, An Act Providing for COVID-19 Response and Recovery Interventions and Providing Mechanisms to Accelerate the Recovery and Bolster the Resiliency of the Philippine Economy, Providing Funds Therefor, and for Other Purposes, has been passed into law. This Act is also known as Bayanihan II.

As suggested in the term “Bayanihan,” the law aims to reduce the adverse impact of COVID-19 on the socio-economic well-being of Filipinos through the provision of assistance, subsidies, and other forms of relief. The new law also intends to mitigate the economic cost and losses stemming from the pandemic.

For taxpayers, in particular, under the Bayanihan II, the President is authorized to exercise powers to undertake and implement COVID-19 response and recovery interventions that relate to the items below.

TAX EXEMPTION OF BENEFITS FOR HEALTH WORKERS
There is a provision of a COVID-19 special risk allowance for all public and private health workers directly catering to or in contact with COVID-19 patients for every month that they are serving during the state of national emergency as declared by the President. This special risk allowance shall be exempt from income tax.

Further, another provision refers to the compensation to public and private health workers who have contracted COVID-19 in the line of duty, upon submission of the required documents to support claims. There are prescribed amounts such as P1,000,000 in case of death, P100,000 in case of sickness, for a severe or critical case, and P15,000 in case of sickness, for a mild or moderate case. These compensations shall be given to the health workers while in the line of duty or while fighting during the state of national emergency as declared by the President, and the benefits are tax-exempt.

TAX EXEMPTION ON IDENTIFIED EQUIPMENT
During the effectivity of the Bayanihan II Act, the exemption from import duties, taxes, and other fees for manufacture or importation of critical equipment or essential goods will be determined by the Bureau of Customs and the Bureau of Internal Revenue.

Critical products, equipment, supplies, or essential goods include personal protective equipment, such as gloves, gowns, masks, laboratory and medical equipment, medical supplies, tools, consumables, and equipment for waste segregation, among others.

TAX EXEMPTION OF RETIREMENT BENEFITS
It will be noted that during this time of recession, retirements have been one of the more common consequences. In Bayanihan II, retirement benefits received by officials and employees of private firms, whether individual or corporate, from June 5 to Dec. 31, 2020 are excluded from gross income and exempt from taxation.

Provided that any re-employment of such official or employee in the same firm, within the succeeding twelve-month period, is considered proof of non-retirement and shall subject the benefits received to appropriate taxes.

NOLCO AT FIVE YEARS
Companies which suffered losses will also be given a longer time to recover, as the net operating loss of the business or enterprise for the taxable years 2020 and 2021 may be carried over as a deduction from gross income for the next five consecutive years, instead of three years, immediately following the year of such loss. Thus, there will be two more years added to such companies to carry over the net operating loss as a deductible expense in determining their income tax due in the succeeding years.

Other tax provisions in Bayanihan II relate to the exemption from documentary stamp tax of certain loan term extensions or restructuring, exemption from import duties and taxes, including donor’s tax, of equipment appropriate for use in schools, repeal of initial public offering tax under Section 127 (B) of the 1997 Tax Code, as amended, and moving of statutory deadlines for the filing of document and payment of taxes, fees, and other charges required by law.

There has been feedback that the implementing rules could be coming out soon. At any rate, it is a welcome development that tax breaks are being provided by the government during this pandemic to help taxpayers recover from the economic adversity. Hopefully, these tax breaks will somehow ease the burden and help keep taxpayers resilient.

It might further ease our burden realizing that there is One who is a much greater Invisible Being, who will embrace us whatever the circumstances. Let’s keep the faith!

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.

 

Olivier D. Aznar is a partner and head of the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

The new global normal

(First of two parts)

Cellphones and coronavirus are icons of the 21st Age of Globalization. Six ages of globalization of humankind preceded the 21st century digital era however. Between robots and humanoids taking over our species, and the decimation of the human race by a pandemic, what are we to learn from the previous ones?

This is the subject of a new book by Jeffrey Sachs — The Age of Globalization: Geography, Technology and Institutions, 2020 — recently released by Columbia University Press, originally written pre-pandemic but updated before its release for some insights on it.

The main ideas are exactly those preached in 21st century management schools that promote any organization’s triple P bottom lines (people, planet, and profit/prosperity for all) — except that now, thanks to Prof. Sachs, one has a majestic view of the world from 70,000 years ago, the better lens to see our roots before we take wings to fly off somewhere.

Leaders have to see the motivating forces underlying the patterns that scientists unravel from the myriad events of a chaotic world. Indeed, the data from events of the past 70 millennia are overwhelming. Sachs deftly processes them into information and even more useful knowledge to produce wisdom for leaders of the planet — some of whom met at the United Nations General Assembly around the third week of September in New York City.

Sachs laments the political leaders at the heart of our current 7th age of globalization are the problem — but prayerfully, the source of the enlightened solution as well.

GREATER AWARENESS FOR THE COMMON GOOD?
Indeed, what lessons bear repeating? Sachs writes, “There is an arrow of history… In each age, human beings have become more aware of the wider world.”

So what, and why? Will awareness result in the common good?

Economic/business, political and social leaders will appreciate the relentless global push of homo sapiens Sachs documents, as others before him, to survive, to adapt, to evolve and to transform acceleratingly fast in the 21st century. He warns us nevertheless, quoting the eminent evolutionary biologist E.O. Wilson, that humans “have stumbled into the 21st century with our ‘Stone-Age emotions, medieval institutions, and god-like technology’.”

In fact, Sachs, seeing political institutions as barriers to pursue humanity’s 21st century common good, pitches a dramatic call to action for our collective survival — through the United Nations Sustainable Development Goals. But his view has a twist that will make Asia-Pacific watchers, more than any region on the planet, think more deeply (to be discussed in Part Two of this column). But first, let us review some of Sachs lessons for humankind today:

STONE-AGE EMOTIONS
1. Survival against nature: Man did not live harmoniously with nature even in the first globalization era. Sachs starts with the Paleolithic stone-age foragers (Globalization #1, 70-10 millennia ago: the age of small groups dispersal). These nomads carried with them not only their tools, cultures, and languages, but also the pathogens and predators as they moved about, eventually adapting to high elevation living conditions from the African lowlands where they began. They extinguished the large land animals in Oceania 50 millennia ago and in the Americas 10 millennia ago, and also obliterated their first cousins the Neanderthals and Denisovans by conquest or denial of food and shelter.

The simpler clan as governing institutions in the Paleolithic age looked more effective for survival than in the next globalization periods, especially with ambiguous and complex 21st century politics.

In fact, some readers may infer that pandemic awareness today has not translated into Paleolithic-type adaptation of human knowhow to basic survival solutions (imprinted in the human brain that thinks fast rather than slow). And this is in large part due to the politicization of life and death issues , e.g., even of mask use and social distancing in the current situation.

2. Luck matters: In Globalization #2, 10-3 millennia ago, Neolithic (New Stone Age) farmers settled in villages, developed writing systems, cultivated crops and domesticated animals for agricultural work, e.g., oxen. That beast of burden also made possible short- and long-distance trade of surplus food, tools, gemstones, shells, and minerals, and the development of bronze weapons. But what is there to trade without productive land?

Sachs notes that the Eurasian “lucky latitudes” shaped world economic history and technological advances, as agriculture developed within fertile ecological zones in the early alluvial civilizations, making innovation possible. The Americas were unluckily shut off from technological advances, including Old World domesticated farm animals, thus did not grow as fast despite abundant resources in some coastal areas.

But the location of villages and human settlements could have been determined because these were the productive and trade-accessible places to begin with, given the relatively predictable season of nature then. Our 21st century global warming and climate change have altered these of course — and luck is not in the physical location of countries any longer, but in the selection and education of political leaders.

3. Swords vs. ploughshares: The ox was followed by the horse in Globalization #3, 3 to 1 millennia ago. Sachs calls this the Equestrian Age — although contemporaneous with the mining of copper and bronze for farm implements and weapons development through metal-making breakthroughs. He associates horse-based states with the horsepower traction of the domesticated animal, the cavalry formation of the military, and the administration of distant subjects aided by horse-riding messengers.

Sachs cites the horse as a disruptive technology combining the power of the steam engine, the locomotive, automotive and tank technologies — which we now know, could be for good and/or bad. It would take the next Globalization stage to convert the metallic technology tradeoff into a clash of other ideas.

MEDIEVAL INSTITUTIONS
4. Interdependence and multi-nation governance: Entering the Christian era calendar, Globalization #4: (one millenium pre-Christian and half millennium later) centered on the Classical Age of imperial-scale governance, and the intense competition between land-based Eurasian empires (Greco-Roman, Persian, Islamic, and Chinese).

Sachs considers a possible foundation for multi-nation governance of global affairs today from two millennia ago. Power-seeking was tempered then as now by trading, ideas, and technological interdependence.

Could the European Union have a Pax Romana redux without imperial war today, and China peacefully relive its Song dynasty leadership in technology and innovations? Could the Arabs return to their great age of scientific blossoming?

(To be continued.)

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

 

Federico “Poch” M. Macaranas is a retired professor and adjunct faculty at the Asian Institute of Management and moderated the session of Jeffrey Sachs at the MAP Annual International CEO Conference on Sept. 15, 2020.

map@map.org.ph

fmmacaranas@hotmail.com

http://map.org.ph

What irony, nay, what stupidity!

It is ironic that those who denounce the revision of the narrative on the martial law years observe the anniversary of martial law on the day dictated by Ferdinand Marcos himself.

On Monday last week, Sept. 21, Vice-President Leni Robredo said:

“Our task is to push back against these lies at every instant. To tell the stories of Martial Law and dictatorship over and over so that this generation, and the ones that come after, may be bound tighter through remembering. To hold firm to the truth of this painful chapter of our history, and through this, forge the determination to never again let our people fall into such despair. We must do this because, ultimately, our national aspirations can only be as strong as our national memory.”

On the same day, Chel Diokno laid a wreath at the Bantayog ng mga Bayani (Monument of Heroes) which honors the martyrs and heroes of the struggle against the martial law regime of former President Ferdinand Marcos. His own father, Senator Jose W. Diokno, was arrested at 1 a.m. of Sept. 23, 1972, at his residence. Chel was at home and 11 years old at the time. He was old enough to remember the date of that life-changing event.

The evening of Monday last week, ABS-CBN re-played in its TV Patrol news program footage of the actual video showing President Marcos announcing the declaration of martial law. As ABS-CBN itself was shut down in the wee hours of Sept. 23, 1972, it was stupid of it to super-impose the date “Sept. 21, 1972” on the video that actually appeared in Kanlaon Broadcasting TV-9 at 7:15 p.m. of Sept. 23, 1972.

But does it really matter if the anniversary of martial law is observed on Sept. 21 or on Sept. 23, many ask. After all, it was President Marcos who signed the proclamation of martial law and who put it into effect just two days later.

However, that President Marcos signed Proclamation 1081 on Sept. 21 is in question. There are conflicting accounts on when the proclamation was actually signed. Some say he signed it as early as Sept. 10, 1972, but many say he did it on the night of Sept. 22, immediately after the staged ambush of Defense Secretary Juan Ponce Enrile that justified the imposition of martial law in the first hour of Sept. 23.

Here is the comment of the Official Gazette of the Republic of the Philippines on the different accounts:

“Whether they conflict or not, all accounts indicate that Marcos’ obsession with numerology (particularly the number seven) necessitated that Proclamation No. 1081 be officially signed on a date that was divisible by seven. Thus, Sept. 21, 1972 became the official date that Martial Law was established and the day that the Marcos dictatorship began. This also allowed Marcos to control history on his own terms.”

It should be noted that on Sept. 13, 1972 Senator Benigno Aquino, Jr. exposed Oplan Sagittarius, the plan to place the country under martial law. On Sept. 21 he delivered a speech before his fellow senators reminding them of their true role in the event martial law was imposed. In the afternoon of that day, the Movement of Concerned Citizens for Civil Liberties  headed by another bitter critic of President Marcos, Senator Diokno, held a huge rally, estimated  between 30,000 and 50,000, denouncing the plan of the president.

It is believed by political pundits that Mr. Marcos wanted martial law remembered on Sept. 21 to erase from memory the events involving Senators Aquino and Diokno on that day. For the following year he declared, by virtue of Proclamation No. 1180, Sept. 21 as National  Thanksgiving Day to memorialize the date as the foundation day of his New Society.

There is the bone of contention. There are two conflicting views on martial law, one portraying the Marcos martial law regime as the “golden age” of the Philippines and the other as the “darkest chapter in the history of post-colonial Philippines.”

The apologists of the martial law regime point to the improvement of peace and order, reduction of violent urban crime, suppression of the Communist insurgency, neutralization of the Muslim separatist movement, collection of loose firearms, and instilling discipline into citizens.

The regime also gave foreign investors new concessions, including a prohibition on strikes. A land-reform program was launched. According to the World Bank, the Philippines’ Gross Domestic Product quadrupled from $8 billion in 1972 to $32.45 billion in 1980. The US-based Heritage Foundation said the Philippines enjoyed its best economic development since 1945 between 1972 and 1980. The economy grew amidst the two severe global oil shocks following the 1973 oil crisis and 1979 energy crisis.

However, the detractors of the regime say that despite the growth in the country’s Gross National Product, workers’ real income dropped, few farmers benefited from land reform, and the sugar industry went into a spin due to the sharp drop of prices in the world market. This coupled with the drop in the price of coconuts and coconut products in the 1980s stunted the growth of the Philippine economy.

But what enrages the survivors of the martial law regime is the omission by the revisionists of the narrative on the martial law years of what University of Wisconsin History Professor Alfred McCoy described as “exceptional for both the quantity and quality of its violence.”

That exceptionally violent regime began in the first hour of Sept. 23, 1972 when President Marcos ordered the arrest of his political opponents and critics. First to be arrested was Senator Aquino, who was having a meeting with other senators at the Manila Hilton. By 1 a.m., Senator Diokno had also been arrested.

Also arrested that night were newspaper editors Amando Doronilla of the Daily Mirror, Luis Mauricio of the Philippine Graphic, Teodoro Locsin, Sr. of the Philippines Free Press, Ernesto Granada of the Manila Chronicle, and columnists Maximo Soliven of the Manila Times and Luis Beltran of the Evening News. Free Press Associate Editor Napoleon Rama and Associated Broadcasting Company TV-5 (the Manila Times TV station) broadcaster Jose Mari Velez, who were Constitutional Convention delegates, were also arrested as were the other outspoken delegates — Heherson Alvarez, Alejandro Lichauco, Voltaire Garcia, and Teofisto Guingona, Jr. By dawn of Sept. 23, 100 individuals were in detention centers.

By then, media establishments, both broadcast and print, had been shut down. In the evening of Sept. 23, Marcos crony Roberto Benedicto’s Kanlaon Broadcasting System TV-9 went on the air to show President Marcos announcing the declaration of martial law. On the following morning, Sept. 24, Mr. Benedicto’s Daily Express headlined the declaration of martial law.

The martial law regime is historically remembered for its record of human rights abuses. Based on the documentation of Amnesty International, Task Force Detainees of the Philippines, and other human rights monitoring organizations, the regime was marked by 3,257 known extrajudicial killings, 35,000 documented tortures, 77 forced disappearances, and 70,000 incarcerations. Some 2,520 of the murder victims were tortured and mutilated and their bodies left in all sorts of places for people to discover — a scheme meant to sow fear among the people.

Martial law also allowed massive and uncontrolled corruption. Plunder was made possible by the creation of government monopolies, awarding of behest loans to cronies, forced takeover of private enterprises, raiding of the public treasury, issuance of Presidential decrees that enabled cronies to amass wealth, kickbacks and commissions from businesses, use of dummy corporations to launder money abroad, skimming of international aid, and hiding of wealth in bank accounts overseas. The World Bank estimated that between $5 billion and $10 billion in public funds was transferred into the Marcos private accounts.

That President Ferdinand Marcos signed Proclamation 1081 on Sept. 21, 1972 is a lie that has gone far too long. That is a lie that Madame Robredo, Mr. Diokno, and survivors of the excesses of martial law should push back against by refraining from observing Martial Law Day on Sept. 21 and observing it instead on Sept. 23 when the full impact of martial law was felt by the people.

To observe the anniversary of the declaration of martial law on Sept. 21 is to believe that the martial law years constituted the golden age of Philippine history. To remember the imposition of martial law on Sept. 23 is to be revulsed by the thought of a repeat of the darkest chapter in the annals of our country. 

 

Oscar P. Lagman, Jr. is a retired corporate executive, business consultant, and management professor. He has been a politicized citizen since his college days in the late 1950s.

Opposing the PSA amendment is serving China’s interests

There are some who are so blind in their hatred against China that they are opposing bills amending the Public Service Act (PSA bill) because it allegedly compromises national security in favor of China.

The PSA bill seeks to declassify entities engaged in the operation of telecommunications and transportation as public utilities, thereby exempting them from the 40% foreign investment cap. In other words, the PSA bill seeks to open the transport and telecom industries to more competition.

On the contrary, those opposing the PSA bill are ironically serving China’s interests.

Why? Firstly, the status quo wherein telecom services must be provided by 60% Filipino-owned companies protects the dominant telco duopoly by preventing other foreign companies — not just Chinese — from entering the market and providing competition. The status quo is unable to deliver fast and affordable internet, making the country and the economy more vulnerable to disasters and uncompetitive in a world economy quickly moving towards the Fourth Industrial Revolution. Indeed, in the present time of the pandemic, the need for digital access is more important than ever but more companies cannot provide these digital and broadband services because of the foreign investment restrictions imposed on telecom companies.

Secondly, the status quo encourages “adverse selection” where only foreigners willing to skirt the law can invest in telecom and transportation companies. It is well known that the two leading telco providers, for example, have majority foreign ownership, using legal maneuvers from layering to the use of preferred stock.

Under the status quo, world-class American, European, and Japanese companies that play by the rules will not come to the domestic market and provide healthy competition. That leaves the industry at the mercy of the dominant duopoly, or those willing to bend the rules — a situation which fails to promote the rule of law.

Thirdly, our current investment regulation framework has more holes than Swiss cheese. Lack of foreign investment vetting for national security risk, a paper tiger National Telecommunications Commission, and the dearth of third-party audits for cybersecurity risk are but some of the many deficiencies in our law. These can all be corrected by the PSA bill.

Is the US pro-China because they have an open investment environment? Obviously not. However, the US ensures foreign investments are consistent with national security through vetting by the Committee on Foreign Investments of the United States (CFIUS). The PSA bill seeks to establish a similar vetting mechanism.

The PSA bill may further strengthen national security by: a.) prohibiting State-Owned Enterprises (SOEs) from investing in the voting stock in entities engaged in operating critical infrastructure (e.g. telecommunications and transportation); b.) mandating acquisition and retention of ISO data security certifications as a condition to retain a legislative franchise or other authority to operate in the telecommunications field, c.) increasing the power of the National Telecommunications Commission and other regulatory agencies to punish misbehaviour compared to the absurdly fines of P200 a day currently imposable under the law, and, d.) mandating that executive and managing officers of entities engaged in the operation of critical infrastructure (e.g. telecommunication and transportation) be Filipino nationals.

Fourthly, the PSA bill will enable the country to diversify sources of foreign investment, ensuring that our country will not be hostage to investors from China or a few foreign nationals. Opening the economy would mean investors all over the world can legally and openly invest in our telecommunications and transportation sectors which are critical to our economy. However, if any of them will compromise national security, then the PSA bill’s vetting provision enables the government to bar these investments, Chinese or not.

Lastly, the growing US-China cold war has prompted the US to announce a “CLEAN NETWORK” program, wherein US citizens’ data and internet infrastructure cannot be accessed by malign actors, specifically naming the Chinese Communist party. Under this CLEAN program, Huawei has been banned from supplying 5G equipment to US companies. The US is also beginning to certify whether those accessing US citizens’ data are “clean” (i.e. not using Chinese made equipment that could be a source of malign actions). There is an increasing risk, therefore, that all three telecom companies — Smart, Globe, and Dito — could be barred from accessing the US internet or US citizen’s data because they are heavily using Chinese made equipment. Under this rule, the Philippine banking industry can be cut off from using US-based financial services if they use the services of these three telecommunication companies. If such a thing happens, that would mean unmitigated disaster for the Philippine economy. That is the likely scenario under the status quo desired by those opposing the PSA bill.

However, if other foreign companies are allowed to invest and use non-Chinese equipment, then the country would have the flexibility and resiliency to overcome the problems posed by the growing US-China tensions and the US’ CLEAN NETWORK program.

Besides, Philippine majority ownership doesn’t necessarily mean that the country is safe from foreign attacks and influence. The Russians were able to meddle and interfere in the US presidential elections in 2016 without owning a single share in a telecom company.

As for the argument that the PSA bill is unconstitutional, that’s for the Supreme Court to determine. However, the Supreme Court has acknowledged the legislature’s power to define what are “public utilities,” affirming the declassification of shipyards and power generation as such. Moreover, the Supreme Court, the Constitutional Commission, and various treatises and articles have said that the rationale for public utility regulation is the regulation of natural monopolies, and telecommunications and transportation are not natural monopolies.

Therefore, those opposing the PSA bill in their hatred of China are unwittingly serving Chinese interests. They have cited false Constitutional issues in order to bar what they perceive as the threat of a Chinese company taking majority control of the third telecom provider. However, in their blind rage, they would rather have a status quo that leaves the country weak and economically uncompetitive, unattractive to non-Chinese foreign investors, and more vulnerable to Chinese influence.

 

Calixto Chikiamco is a political economist, and a board director of the Institute for Development and Econometric Analysis.

Will pandemic normal become just plain normal?

ONE FEATURE of the COVID-19 Era is how much the standard ways of seeing and doing things have been remixed and turned upside down. The obvious question is then whether people will decide to make these new arrangements permanent or return to the old.

For example: I used to enjoy going to nouvelle-style slightly fancy restaurants, ordering 10 appetizers (and no main courses) and sharing them with a table of four. Many of those appetizers were composed of disparate ingredients, carefully placed on the plate and explained in loving detail by a friendly, well-informed waiter.

Today those same restaurants hold no appeal for me, assuming they are still open. Many of them have pared down their menus, as social distancing within kitchens has limited what cooks can accomplish. Nor do I want a waiter talking to me at any length. And since many of these places have such striking decor, some of the magic of the experience is lost when you sit outside.

My new favorite restaurants serve a lot of comfort food and stand-alone dishes. If it is the best pineapple fried rice around, that suffices. Sometimes I even dare to dine inside, albeit at 11 a.m. when no other customers are present. I finish my meal and am on my way.

What are the broader implications of my altered habits? If you are opening a restaurant, should you hire a chef who does fancy, creative work? Or one who specializes in comfort food?

Now consider another of my favorite pastimes, watching professional basketball. I have been following the NBA bubble with great interest. The Miami Heat are now favored to reach the NBA Finals, even though they were only the fifth-ranked team in the East at the end of the regular season. What happened? They have played with grit and determination, and their entire active roster showed up in first-rate physical shape. That’s not easy to do after a five-month layoff, as it required tremendous discipline.

In contrast, the Los Angeles Clippers were among the favorites to win the NBA title. They were recently eliminated by the Denver Nuggets, a very good team but not previously a top contender. In the final quarter of the last game of the series, the victorious Nuggets played with energy and verve, while the Clippers seemed to be gasping for air. After their defeat, some of the Clippers admitted that inferior conditioning was part of their problem.

So “staying in shape during a five-month layoff” is now a critical skill for a basketball player. But this doesn’t necessarily mean the Clippers need to revamp their roster. Maybe they should just wait for a return to normal times.

What about a more prosaic example: Zoom, which was already growing before the pandemic but has very rapidly become a huge and in some ways essential company. As it turns out, the company has the ability to respond to emergencies and scale up rapidly — but that was hardly considered a necessary skill in 2019, and it remains to be seen if it will matter much in 2022.

In a similar way, what makes a good worker or boss during a pandemic can be quite different than what makes a good worker or boss during normal times. Being able to work from a distance, for many months, is a skill rising in importance. Is that what companies should be looking for in new hires? Or is now the time to pick up talented but conformist “team players” who thrive on direct contact with their peers? Arguably those are the workers who are currently undervalued by the market.

Might these changes in quality affect your choices beyond work — such as your decisions about friends, family relations, romance, and much more? Should you buy a dog, knowing you probably won’t be homebound two years from now? How about dating? On a first date, presumably, looks should matter less and social carefulness more. But again, for how long? It would be very strange, and probably unwise, to form a lasting relationship based on how well your romantic interest wears a mask.

Sadly the world has entered a new paralysis, most of all because no one knows when things will return to normal, or what might become normal, or what might remain strange. When this pandemic ends, one thing we can all look forward to is making better plans.

BLOOMBERG OPINION

1...9,0229,0239,024...14,244Page 9,023 of 14,244
ADVERTISEMENT
ADVERTISEMENT
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin X Youtube