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Filinvest wins PEZA incentives for Clark locators

THE developers of New Clark City signed an agreement with the Philippine Economic Zone Authority (PEZA) outlining the incentives available to locators.

In a statement, the joint venture of Filinvest Land, Inc. (FLI) and Bases Conversion Development Authority (BCDA) said it signed a registration agreement with PEZA that covering fiscal and non-fiscal incentives for locators in Filinvest at New Clark City.

Filinvest at New Clark City is the group’s township within the 288-hectare estate.

“We thank BCDA and PEZA for formalizing the Registration Agreement for New Clark City. This will greatly encourage businesses and investors to locate in Filinvest at New Clark City,” Filinvest BCDA Clark, Inc. Vice President Francis B. Ceballos said in a statement.

Filinvest at New Clark City will house a residential zone, commercial, mixed-use offices, institutional zone, and a 62-hectare Innovation and Logistic Park as part of the first phase. This industrial zone is set to serve as the economic base of the city, and is scheduled to be operational by the first quarter of 2020.

The company said the industrial zone will target businesses involved in light manufacturing, logistics, storage and warehousing, cold storage, and food processing.

“With the majority of the project’s area dedicated to the industrial zone, it is envisioned to support global businesses with superb accessibility via major infrastructures… It will be a fully integrated development bringing together top international locators and investors with sustainable business and industrial community,” Mr. Ceballos said.

FLI will develop another 60 hectares in the second phase of the development.

Filinvest at New Clark City is part of the 9,450-hectare New Clark City in Capas, Tarlac. It is next to the New Government Administrative Center, as well as the New Clark City Sports Complex.

The company signed an agreement to develop the property with BCDA in 2016 for 50 years.

FLI’s net profit attributable to the parent rose 24% to P1.79 billion in the first quarter, following a 17% surge in gross revenue to P6.83 billion.

Incorporated in 1989, FLI is the real estate arm of conglomerate Filinvest Development Corp., which also has investments in banking, power, sugar, and the hospitality sector.

FLI fell 2.56% or five centavos to close at P1.90 on Wednesday. — Arra B. Francia

US to assist in upgrading school system in Bicol, Western Visayas

THE US government announced a partnership with the Department of Education (DepEd) for a P2-billion project aimed to improve the reading, math, and socio-emotional skills of more than two million students.

In a statement on Wednesday, the US Embassy announced the Advancing Basic Education in the Philippines (ABC+) program in partnership with the DepEd. The project costs $38.5 million or around P2 billion and will provide assistance to two million students in Regions 5 (Bicol Region) and 6 (the Western Visayas). The project is also to be implemented with RTI International, The Asia Foundation, SIL LEAD, and Florida State University.

US Chargé d’Affaires John Law said that ABC+ is part of US efforts to upgrade the education system in the Philippines, in which this will help alleviate poverty by allowing open doors to education for those in need.

“As a friend, partner, and ally, the United States remains committed to the quality of basic education for the benefit of all Filipinos,” he said.

Education Secretary Leonor M. Briones said that the program is crucial to the goals of DepEd to improve the education system nationwide, “especially now that we are intent to pivot our focus from improving access to enhancing the quality of basic education.”

ABC+ also aims to improve teacher training and management. The project hopes to improve teachers’ and administrators’ capacity to address the needs of schools in Bicol and Western Visayas. ABC+ will work with local government units (LGUs) and the private sector to ensure the program is backed by adequate resources.

The Philippine Chamber of Commerce and Industry (PCCI) board member Alberto P. Fenix, Jr. said that the PCCI, a partner organization for the program, “fully support(s) this project, which will better prepare our children for the world of work.” — Gillian M. Cortez

PCSO suppliers seeking clarity on equipment leases

COMPANIES leasing lottery equipment to the Philippine Charity Sweepstakes Office (PCSO) are taking steps to renew their agreements with the agency, after the administration’s order allowing the resumption of lotto operations.

In a disclosure to the stock exchange Wednesday, Pacific Online Systems Corp. (LOTO) said it has an “in principle” deal with the PCSO to renew equipment leases.

LOTO supplies lottery systems equipment to the PCSO in the Visayas and Mindanao regions, as well as the agency’s Keno operations across the country.

The company’s ELA with the PCSO expired yesterday, July 31.

“Please be advised that we have had an agreement in principle on the terms of a further renewal thereof pending the completion of PCSO’s process to procure, by public bidding, a new online lottery system,” the company said.

“Until a formal agreement has been entered into, however, we will be unable to make further announcements thereon.”

Philippine Gaming Management Corp. (PGMC) said it has also filed a claim with the PCSO that it did not fail the bidding for its equipment leases. PGMC leases lottery equipment for the PCSO’s Luzon operations.

PGMC is an affiliate of listed firm Berjaya Philippines, Inc., which holds a 39.99% stake.

Berjaya previously had a 99.99% equity stake in PGMC, but has decided to gradually trim its ownership in the firm to 79.99%, then to 39.99% earlier this month.

Shares in LOTO and Berjaya recovered after President Rodrigo R. Duterte lifted the ban on lotto operations Tuesday night, four days after he ordered the shutdown of all PCSO’s gaming operations.

LOTO shares soared 11.15% or 29 centavos to close at P2.89 each, while shares in Berjaya jumped 4.20% or 10 centavos to finish at P2.48 apiece.

While lotto operations may resume, the president retained the ban on other PCSO games and franchises such as Small Town Lottery, Keno and Peryahan ng Bayan pending the conclusion of an investigation into allegations of illegal and corrupt practices. — Arra B. Francia

High delivery fees seen likely to cause Asia-Pacific online shoppers to cancel order

ONLINE SHOPPERS in Asia Pacific are likely to be discouraged by high delivery fees, to the extent that they will readily consider slower, cheaper alternatives, sometimes if offered the proper incentives, United Parcel Service, Inc. (UPS) said, citing the results of a study.

Citing the “UPS Pulse of the Online Shopper” report, which surveyed 18,000 consumers around the world between December 2018 to January 2019, UPS said 39% of online shoppers in the Asia Pacific abandon their shopping carts when they find that the cost of delivery is higher than expected.

“The research reveals that 95% of consumers in Asia Pacific can be incentivised in some way to look for alternatives to the fastest shipping option, which can help to bring down shipping costs,” it said.

“For example, 47% of shoppers are willing to go for a cheaper but slower alternative, 39% are open to receiving incentives for slower shipping, such as credit in their account with the retailer, and 37% are willing to delay shipping to consolidate multiple items into one delivery,” it added.

The report noted that much of the motivation for Asian shoppers in patronizing e-commerce platforms is the expectation that prices are cheaper online.

“In terms of why buyers choose to make purchases online as opposed to in-store, the key differentiator for respondents in Asia Pacific across all categories researched was also the perception of a better price online,” it said.

Convenience was another consideration, and the “ease of the e-commerce experience” was likewise seen as attracting demand.

“The ability to offer incentives not just in the form of a unique product offering but also in the shipping and delivery experience will be crucial to success in the evolving e-commerce landscape,” UPS Vice-President of Marketing in the Asia Pacific Sylvie Van den Kerkhof said in a statement.

The report showed shoppers from Asia are growing more particular about the ability to customize delivery times, dates and locations as some platforms start to offer this option.

It found that for online shoppers from Australia, China, Hong Kong and South Korea, almost all put high importance in seeing shipping prices, select alternative delivery options, determine delivery dates and time frames and have a guaranteed delivery date.

Shoppers are also more engaged in platforms that make as much information readily available and visible.

Next to information about the price, product details and delivery costs, Asian shoppers value knowing a seller’s place of origin and the details of its returns policy.

“The retailer’s returns policy is more important than some might think, with 69% of Asia Pacific shoppers agreeing that the returns experience impacts their overall perception of the business,” it said.

“The study reveals that 42% of consumers in Asia Pacific look up a retailer’s returns policy before even making a purchase, indicating that it’s an opportunity for the business to win over customers and ease the doubts of any potential buyers,” it added.

In the Philippines, UPS Managing Director Chris Buono said online shopping is expected to grow with improved Internet connectivity and increased smartphone use, as these will enable the industry to tap a new market of tech-savvy consumers.

“(These factors mean) the e-commerce landscape in the Philippines is becoming increasingly competitive, and this is unlocking new opportunities for online retailers in the Philippines to grow both their domestic and international customer base,” he was quoted in a statement as saying. — Denise A. Valdez

DAR targets land distribution by 2022

THE Department of Agrarian Reform (DAR) said it is upgrading its processes in order to accelerate land distribution, and set a 2022 target for completing its land acquisition and distribution (LAD) program.

“Right now we are trying to initiate moves. We are innovating our system so that we will be able to comply with the President’s order of completing the land acquisition and distribution by 2022… We are going to approach it scientifically by using technology,” DAR Secretary John R. Castriciones told BusinessWorld by phone.

Specifically, he said DAR will seek to identify bottlenecks in processing land acquisition and use of special software to help survey and map land.

“That is one of the hurdles, the conduct of the survey, as we are talking about land located in rural areas,” he added, noting that quicker surveys will allow for faster transactions with the Department of Environment and Natural Resources (DENR) “because the survey plan must be approved by the DENR,” he said.

He said other technology will help determine what further aid Agrarian Reform Beneficiaries (ARBs) need after being granted the land.

“We will have a picture of the land where they are located… so that we will be able to immediately pinpoint what sort of help we can extend to them,” he said.

During a recent conference held in Clark, Mr. Castriciones told DAR offices to come up with a catch-up plan for the remaining months of 2019.

“This is particularly for those provinces, which have… a lot of lands to be covered under the CARP (Comprehensive Agrarian Reform Program), so I am directing them to submit an inventory and the clearing of the universal goal that we have so that we would be properly informed as to the extent of those which we need to cover,” he said.

In total, inventory of land covered under CARP exceeds 500,000 hectares for privately acquired land; about 187,000 hectares for government-owned land; and 1.4 million hectares of land with collective Certificates of Land Ownership Award (CCLOA), which require parcelization.

“What is doable right now is we are looking at around 600,000 plus hectares,” he added.

DAR has been working to acquire all government-owned land suitable for agricultural use but no longer used for this purpose as authorized by Executive Order 75. — Vincent Mariel P. Galang

IRRI signs marketing deal for 3 varieties of hybrid rice seed

THE International Rice Research Institute (IRRI) said it signed a seven-year limited exclusive distribution license for its hybrid rice seed with Philippine company Tao Commodity Trader, Inc. (TCTI).

In a statement, IRRI said that under the agreement signed on July 30, TCTI will invest in the development, production and distribution of seed, commit to certain sales targets, and partner with microfinance firm Alalay Sa Kaunlaran, Inc. (ASKI), in providing farmers with training, technology, and financial assistance. ASKI currently has a client base of 18,000 Filipino farmers.

“Today is a significant day for IRRI as we enter into this new partnership with TCTI, an industry-respected and established group, that can help bring some of our innovations to our main clients — the countless farmers and consumers who depend on the rice sector for their food, nutrition, and livelihoods,” Dr. Peter Brothers, chief of staff of IRRI, was quoted saying.

TCTI is a subsidiary of Tao Corp., the largest trader of molasses in the Philippines. This arm specifically focuses on the rice seed market, and is a member of the IRRI-led Hybrid Rice Development Consortium (HRDC). HRDC takes on the development of hybrid seed suited to various agro-climatic conditions. Member companies are allowed limited exclusive access to the consortium’s germplasm.

The agreement covers three seed variants, Mestiso 71, Mestiso 77, and Mestiso 89. These varieties promise higher yields, better quality, improved resistance to pests and diseases, resilience to climate stresses, and higher seed production. The varieties promise yield gains of up to 20%.

“As IRRI strives to achieve food and nutrition security, we always emphasize the importance of building strong partnerships with different organizations to achieve our mission,” Mr. Brothers said.

“This historic partnership between Tao Corp. and IRRI could not have come at a more opportune time, when our rice farmers are facing very tough times due to challenges on several fronts — from climate change to unfavorable market conditions. Through this joint undertaking with IRRI, we can extend much needed help to our rice farmers,” Julio D. Sy, Jr. chief executive officer of TCTI, said in a statement. — Vincent Mariel P. Galang

Salary differential under the new maternity leave law

Republic Act (RA) No. 11210, or the Expanded Maternity Leave Law, was signed by President Rodrigo R. Duterte on Feb. 20. Female workers in the private and public sectors can now enjoy a total of 105 days’ paid maternity benefit for live childbirth, regardless of the mode of delivery, with an option to extend for another 30 days without pay. Qualified solo parents are entitled to an additional 15 days’ paid leave. The law also provides 60 days’ paid leave for miscarriage and emergency termination of pregnancy.

Apart from the expanded 105 leave days, another significant improvement in the law is payment of salary differential. Female workers in the private sector shall now receive full pay which consists of the SSS maternity benefit based on their average daily salary credit plus salary differential to be paid for by the employer, if any.

The salary differential represents the difference between the SSS benefits and the employee’s basic pay; an amount to be shouldered by the employer. This ensures that the employee still receives the equivalent of her full pay while on maternity leave.

EXEMPTIONS TO PAYMENT OF SALARY DIFFERENTIAL
Nonetheless, certain enterprises may be exempt from the payment of salary differential upon submission of proof and other necessary documents to the Department of Labor and Employment (DoLE). These include: 1. Retail/service establishments and other enterprises employing not more than 10 workers; 2. Micro-business enterprises and those engaged in the production, processing, or manufacturing of products or commodities including agro-processing, trading, and services under the Barangay Micro Business Enterprises Act of 2002, whose total assets do not exceed P3,000,000; 3. Enterprises already providing similar or higher benefits under an existing Collective Bargaining Agreement (CBA), company practice or policy; and 4. Operating distressed establishments.

The law provides the criteria for distressed establishments. In the case of a sole proprietorship or partnership or non-stock, non-profit organizations, this is when the accumulated net losses for the last two full accounting periods immediately preceding the application for exemption amounts to 20% or more of the total invested capital, fund balance or member’s contribution at the beginning of the period under review or when the enterprise registers capital deficiency. For a corporation or cooperative, it’s when the actual net loss amounts to 25% of total assets or when the corporation/cooperative registers capital deficiency. In the case of banks and quasi-banks, it’s when there is a certification from the Bangko Sentral ng Pilipinas that it is under receivership or liquidation as provided in Section 30 of RA 7653, otherwise known as the New Central Bank Act.

To continue enjoying the exemption, employers must annually submit their justifications for the approval of DoLE.

GUIDELINES FOR COMPUTING SALARY DIFFERENTIALS
For easy reference, below are the step-by-step guidelines for calculating the salary differential:

1. Compute the amount of full pay based on the following formula:

Full pay = [(daily rate x factor rate)/12 months] x maternity period in months

Assuming the company adopts a working period of six days with one rest day in a week, the employer’s factor rate is 313. The calculation, however, will differ for companies using other factor days.

For our example, assuming a daily rate of P1,500; Factor rate of 313 days; and Maternity Leave of 105 days = 3.5 months, the full pay would thus be P136,937.50 = [(P1,500 x 313 days)/12 months] x 3.5 months.

2. Ascertain the employee’s premium contribution share for SSS, Philippine Health Insurance Corp.(PhilHealth), and Home Development Mutual Fund or Pag-IBIG covering the maternity period.

Based on the compensation in our example, the total employee share in the contributions would be P5,075. This consists of P2,800 for SSS, P1,925 for PhilHealth, and P350 for Pag-IBIG.

3. Determine the amount of SSS maternity leave benefit based on the prescribed formula and computation of the SSS:

SSS maternity benefit = [(monthly salary credit x 6)/180] x 105 days

Following our example, the monthly salary credit would be P20,000. Thus, the total SSS Maternity Benefit would be P70,000 = [(P20,000 x 6)/180] x 105.

4. Deduct the amount of SSS maternity leave benefit from the amount of full pay, net of social contributions.

In our example, the salary differential would be P61,862.50, computed as follows:

The Bureau of Internal Revenue (BIR) has yet to issue the rules and regulations on the tax treatment of the maternity benefits under the new maternity law. Nonetheless, based on the laws, I believe the salary differential will be treated as taxable income of the female worker and will be included in the basic pay for purposes of computing the 13th month pay. The income tax exemption under Section 32 of the Tax Code only covers the SSS maternity benefits, i.e., the amount reimbursed by SSS to the employer. Unfortunately, there is nothing in the Expanded Maternity Leave Law or the Tax Code that provides for tax exemption of the salary differential.

It is worth mentioning also that with the new maternity benefits computation, the female employee can continue to pay her social contributions with SSS, PhilHealth, and HDMF without interruption.

With the enactment of RA 11210, mothers can fully enjoy their right to health and decent work. By protecting and promoting the welfare of women, the law accords ample transition time for mothers to regain good health and overall wellness before returning to work. The additional maternity leave of 27 to 60 days grants an opportunity for mothers to nurture and bond with their newborn, fundamental in creating a caring environment within the Filipino family.

When we stop to reflect how far mothers go to sacrifice their lives in protecting their children, we then realize that extended maternity leave is long overdue. It’s the least benefit society can provide for the most selfless person in the family.

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.

 

Renz Anthony K. Boaloy is a manager with the Client Accounting Services group of Isla Lipana & Co., the Philippine member firm of the PwC network.

+63 (2) 845-2728

renz.anthony.k.boaloy@pwc.com

The present and (hopefully) the future of Animal Agriculture in the Philippines

What would a meal look like in 31 years? That is the big question scientists are now urging governments and private institutions to answer. By 2050, the global population is expected to rise to 10 billion with no assurance that all those mouths will be fed.

Our stomachs are stuck to primal cravings: meat, meat, and more meat. With the rise in popularity of the unlimited Korean pork fare or samgyeopsal comes the unprecedented increase in demand for this delectable fatty pork. The process of breeding and, dare I say, slaughtering these animals, is what is called Animal Agriculture. According to Cameron & Cameron (2017), Animal Agriculture is so prevalent globally that we are literally choking the Earth. How so?

In 2017, the Food and Agriculture Organization (FAO) of the United Nations forecast an increase in food demand from 59% to 98% by 2050. Therefore, both big and small scale farmers must adjust their production, causing an increase in green house gas emissions.

The Philippine Statistics Authority’s January-March 2019 brief reported a massive surge in the commercial inventory of cattle, swine or pig, and chicken. Surprisingly, their combined increase of 13.39% was still not enough to sustain the Philippines’ population of 108.12 million. Proof is that the undernutrition rate amongst children aged 0 to 5 is at its highest in 10 years at 26.2%.

GOVERNMENT SUPPORT
It is imperative that the government act upon this issue. President Ferdinand Marcos implemented Presidential Decree No. 914, or the protection and creation of powers for the Livestock Development Council under the Department of Agriculture. It is a regulatory body which oversees livestock production to ensure its efficiency and sustainability. However, it turns out that this was counterintuitive. Imports of livestock and poultry increased by 5.6%, worth a staggering $261 billion. I guess, we Filipinos really do love that unlimited Korean barbeque!

Furthermore, Senate Bill No. 1758, an effort to restructure the current industry while still supporting an already crippled food system, is still pending for approval. Senator Cynthia Villar’s bill proposes to rethink livestock development and focus efforts on Filipino farmers. Unfortunately, this bill did not provide avenues for small scale farmers to have access to capital. Instead, it focused on improving pre-existing infrastructure without addressing how to reduce the risk of investing in agriculture.

These policies are glaringly inefficient, especially since the Department of Agriculture has recently asked for an additional budget of P70.3 billion. The request is both warranted and unwarranted because of the equally unprecedented decline of farming in the Philippine heartlands. The capital intensity in agriculture is driving our farmers away from their farms and towards congested cities where they serve a lesser purpose.

buffalo carabao farmer
PEXELS_ARCHIE BINAMIRA

To think the government can have a hand in changing this. Banks and financing terms can be overhauled to be more inclusive to small and medium-scale farmers. Once the appropriate institutions have segued into a more inclusive organizations, these farmers consequently have to rethink their own practices. The two most realistic and still profitable changes are Livestock with Care and Precision Farming.

SUSTAINABLE FOOD SYSTEMS APPROACH
On top of the partnership of the public and private sector, a slightly more radical approach can be taken. The government or any crazy rich Filipino must consider a Sustainable Food Systems Approach.

This approach considers how to adjust food production according to population growth, urbanization, changing consumer patterns and climate change. All of which are not considered in the slightest in current Animal Agriculture practices. A Sustainable Food System (SFS) approach has three main components; Economic, Social, and Environmental impact. Achieving a successful integration between these three will provide a fiscally viable equal distribution of sustainably grown nutritious food.

Better policies will allow capital-poor farmers to access resources for the system to be more profitable for both the farmers and the investors. Doing so will deliver immediate benefit to consumers. Who will be the main drivers of inclusive eco-social growth? For the FAO, holistic value creation is a cycle starting from the institutions up top.

The Animal Agriculture industry is challenged by unbridled globalization. Our policymakers have forgone self-sufficiency and have reverted to dependency. First, the feed used to sustain these animals is imported. Second, land used to breed these animals are loaned. Third, these breeders are often uneducated and lack proper government/private support. Financing institutions lend or borrow capital at such ungodly rates that ultimately deplete these farmer’s profit margins. Fourth, there is no research and development in finding alternatives to address the gap between the producer and consumer. While meat alternatives is not a popular topic to consider, at our current fertility rate we need all possible solutions to address this looming crisis.

If our policymakers continue to beat around the bush, only to stuff more taxpayer money down their matte Himalaya Niloticus crocodile Birkin bags, Filipinos will probably be end up eating kangkong (swamp cabbage) three times a day.

 

Judith Marie D. Siapno is an undergraduate marketing management student in De La Salle University.

State of our nation’s strategic direction

We are plagued with national problems that deprive many of our citizens even with the most basic access to decent living, relevant education, proper nutrition and other necessities that are supposed to be already being enjoyed in today’s modern world. Generally, as a result, many of our people are stripped of dignity and any excitement of dreaming any prosperous future.

Such problems that our country must resolve cannot be fully outlined in the recent State of the Nation Address of the President. More so, the solutions are so complex and complicated that an almost two hours of speech by our Chief Executive cannot be enough to explain and convince the nation of the road map which will bring us beyond the current crisis that engulf the country.

President Rodrigo Duterte explained the current relevant social menaces caused by the proliferation of illegal drugs, rampant corruption in the bureaucracy, chaos in the streets, incursions in our territory, and the snail paced delivery of basic services. Let’s admit, regardless of our political affiliations, President Duterte is a phenomenal leader that has caught the attention of the world. I was once in a very remote restaurant in the island of Fiji, the dining staff there begged for stories about him. They admire him. I was proud.

There is no doubt in his political will to resolve many issues in spite of his controversial or unorthodox methods. To a great degree, he has raised the standard of expectations that we demand now from our public servants.

VICIOUS CYCLE
However, the painful irony is this. After the term of President Duterte, we will still be confronted by practically the same social ills. Though surely some improvements will be delivered particularly on infrastructure because of the grand Build, Build, Build program ,and lesser scourge on the illegal drugs front.

But sooner, the next President will address the same concerns in his or her State of the Nation Address. In fact, all our other previous Presidents tackled almost the same national dilemma on massive poverty, corruption, criminality, and inefficiencies in government — from Cory Aquino, Fidel Ramos, Erap Estrada, Gloria Arroyo, Noynoy Aquino, and now, Mayor Duterte. This cycle happens not because of insincerity on their intentions or efforts.

STRATEGIC DIRECTION NEEDED
What the country absolutely needs is a clear strategic direction on where to bring our economy in the long term. Faced with the same vicious and destructive cycle, other countries victoriously uplifted the lives of their people by drawing a clear map on where their economy, industries, and businesses would thrive. Taiwan had their “Go South of Taipei” program where they clearly identified the specific industries and ventures that would be given the full fiscal, administrative and other incentives that would help ensure their resounding success. South Korea miraculously became an economic giant after the Korean War by focusing on serious industrialization backed by their integrated steel manufacturing sector headed by POSCO Steel which is now biggest in the world. Even China, today’s second largest economy, meticulously designed the roles of their economic zones after Deng Xiao Ping recognized the limits of a centrally planned economy. Thailand, Singapore, and now Vietnam defined their economic agenda as a primary target above their periodic political reform programs.

What we need is a clear economic platform that would define the game changers and what business gurus refer to as success drivers. These must be done alongside the current issues that we always try to overcome in an almost futile cycle of programs that failed to eradicate poverty, deprivation, and deterioration.

PILLARS OF GROWTH
We are not starting from scratch. We just have to learn on achieving national focus. We must train all our resources, talents, and hopes on three tickets that would strategically solve the other problems of our society.

First, let’s not give up on our industrialization.

We have the natural and human resources that would be valued by global investors and technology partners. Our steel industry must not be further forsaken, Almost all successful economies of the world has a strong industrial base. Our government must provide all the needed policy and fiscal support to the business enterprises that would venture on building our heavy industries. These will bring employment, prosperity, and confidence especially to the middle class. These will expand and empower the middle sector.

Second, capitalize on our tourism jewels.

We are amazingly blessed with attractive destinations. We can be among the top tourist destinations of the world. We must therefore ensure that our airports, hotels, and other accommodations are ready. Thailand and Malaysia enjoy at least more than 2 million visitors monthly. We are already proud when we have 4 million tourists in a year which even include our own balikbayans. Allocate huge budgets to improve our historical sites and infrastructures leading to them.

We are notorious on not having any historical sense that, according to the news maker Mayor Isko of Manila, the Bonifacio shrine has been converted to a national toilet by uncaring citizens. Our airports are constant cause of embarrassment and inconvenience to the tourists lured by our marketing invitations. Intramuros, for example, has hordes of illegal or informal settlers that would naturally turn off foreign visitors. If only this is under the jurisdiction of Mayor Isko, this landmark site would be dramatically improved. Even though it’s located in Manila, Intramuros is under the supervision and management of the Intramuros Administration of the Department of Tourism. Perhaps Secretary Verna Romulo can take a closer attention. I know that she is a serious no non-sense executive. If informed of this, she will definitely uplift Intramuros and accord it with the appropriate respect that befits such a historic ground.

And lastly, modernize our agriculture.

In our country, becoming a farmer is almost synonymous to being poor. More than 15 million Filipinos in our agricultural sector are trapped in dire poverty, exhaustion, and extreme lack of hope for their children if they will also become farmers like their parents. In Malaysia, farmers are happily aware of their role in providing food security to their country. None of them is as poor as our farmers. Our agriculture sector must be vibrant and export oriented.

NEW FORMULA
Our present national leaders are correct in addressing the most urgent problems that relentlessly punish the entire country. The current dangers of not stopping the illegal drugs trade, corruption, traffic jams, and dysfunctional bureaucracy are real. By all means, they must indeed be ended.

However, the solutions that we intend to adopt will never be enough. We tried long enough. We tried many times in different forms and languages. We always end up battling the same monsters over and over again. This is because we use the same approach and silently hope that the results will be better. The results, I assure you, will be the same but only with some incremental improvements.

Our leaders, and all of us, must accept that most of our problems will be solved once we deliver the economic progress and wealth that would be accessible to all. And we can achieve this only when we start focusing also on the most strategic drivers for our national success.

 

Ariel F. Nepomuceno is a management consultant on strategy and investment.

Infrastructure, mobility, and liberty

WASHINGTON, DC — Among the notable views and experiences for people coming from less developed countries like the Philippines who go to rich countries like the USA are their long, wide, extensive, good roads. Even their rural village or barangay level roads are smooth.

I saw these when I visited some suburbs of DC like Alexandria, Virginia, and the rural village of Forest, Virginia. Lots are big, houses are detached, flat or hilly terrain, the rural roads are smooth.

And except for few big cities, spaces are too wide — interstate roads, city roads, housing lots, school and university lots, malls and groceries with wide parking lots, etc. So many cars and trucks traveling at high speed so they can cover long distances in a short period of time.

The Philippines has generally low infrastructure level and quality compared with our neighbors. Take these numbers for instance from the World Economic Forum Global Competitiveness Report 2018 (See table).

Among the possible reforms for the Philippines are the following:

One, encourage more toll roads nationwide, via integrated Public Private Partnerships (PPP) and not hybrid PPP scheme. Toll roads prohibit tricycles, small motorcycles, tractors, and bicycles, and make travel by car, bus, and truck safer and faster.

Two, demonopolize routes. Allow jeepneys and aircon vans to go in areas that are currently tricycle route monopolies; allow buses and aircon vans to go in areas that are currently jeepney route monopolies. Passengers will choose what’s convenient for them and very likely, tricycles and jeepneys will die a natural death in many areas. So these slow and low-passenger vehicles will be out of the roads and mobility will be faster.

Three, business and civil society organizations must make a scorecard of road quality by province, by city and major municipalities. Bad roads, narrow roads due to many unauthorized parking by vehicles will be reported and might shame and wake up lazy governors and mayors.

Four, expand and modernize rail network in major islands like Luzon, Mindanao, and Panay, again via integrated PPP schemes as much as possible.

More mobility means more freedom, more liberty. A developed, modern road and rail system will greatly enhance the mobility of people, their products and services, which reduces the cost of goods and services. Which expands food and other necessities of the population.

 

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

minimalgovernment@gmail.com

Maximum Decentralization via legislative reform

By Michael Henry Ll. Yusingco

THE CHARTER CHANGE initiative of President Rodrigo R. Duterte is now led by the Inter-agency Task Force on Federalism and Constitutional Reform or IATF as per Memorandum Circular No. 52, s. 2018.

The IATF has been hard at work putting all of the relevant agencies within the executive branch on the same page with regards to the President’s charter change agenda. This is a welcome move given their goal of establishing maximum decentralization through charter revision.

Maximum decentralization means the charter change envisioned by the IATF will make significant changes to our government structure. Obviously, this will have a huge impact on officials and employees in the central government.

The IATF has several activities in the pipeline to promote the President’s constitutional reform program. It would be in the best interest of the general public to participate in all their events. At the very least, listen to what the IATF has to offer and not just reject the idea of charter change outright.

However, Filipinos must keep in mind as well that charter change is just one option to attain maximum decentralization in the country. The other option is legislative reform.

Local autonomy is a mandatory prescription of the 1987 Constitution the nature and depth of which is described as “a kind of maximum decentralization, short of federalization.” This description of how local autonomy is to be understood in the charter means that our decentralization framework can actually approximate a federal setup.

As per Section 3 of Article X, “The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local government units their powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units.”

Very clearly, the constitutional parameters of this local government code allow for the creation of a decentralization framework that comes close to a federal structure. To do this, these three core federal features must be incorporated in the decentralization system:

1. Regional governance framework.

2. Clear power sharing between the local government and the national government as well as amongst the different levels of local governments.

3. Intergovernmental Relations (IGR) mechanisms.

The division of functions and funds must be formulated in such a way that the assignment of accountability is unequivocal. We do not want a distribution scheme that leaves everybody clueless as to which government office can be held answerable for our dissatisfaction. Neither do we want overlapping designations that allow government agents to pass the blame for failure to deliver public services to our satisfaction.

Furthermore, precisely because of substantial devolution of public functions and funds, other measures to ensure the sustained and significant involvement of the people in local politics such as an anti-local dynasty mechanism and political party prescriptions are likewise imperative.

Maximum decentralization can be achieved via legislative reform through the amendment of the Local Government Code of 1991. It may also require the amendment of the Administrative Code as well as a slew of special laws. A more audacious option is to just enact a new Local Autonomy Law incorporating all of the prescriptions mentioned above.

It is worth mentioning that the Department of Interior and Local Government already has a list of proposed amendments to the Local Government Code. Moreover, the Senate Committee on Local Government has already done a study on the changes needed to update the law. And even the proposed new omnibus local autonomy law does not have to be created from scratch as the Bangsamoro Organic Law can be a good starting point.

So, why should pursuing maximum decentralization via legislative reform be given serious consideration? Here are some possible reasons:

First, because it simply involves the regular work of Congress. Therefore, there is no urgency to resolve fundamental concerns plaguing charter change such as the question on the voting arrangement of the Senate and the House of Representatives if they convene as a Constituent Assembly or the huge cost to taxpayers if a Constitutional Convention is chosen as the mode to revise the charter.

Second, Congress can work on this matter as part of the regular legislative cycle. There is no need to recalibrate their legislative calendar to accommodate the extraordinary disruption to their regular work that would be caused by a charter change effort.

Third, the enactment of these laws does not require a plebiscite. Hence, there is no need for a special budget allocation which would likely cost taxpayers the same amount, or close to it, to conduct a regular election.

Fourth, the “unintended consequences” that may manifest during the implementation stage can be swiftly addressed by Congress.

In sum, all Filipinos desire a drastic improvement of the way we govern ourselves. One path to achieve this is via charter change. The IATF as the lead advocate of this option will be guided by this caveat from the President in Memorandum Circular No. 52:

“The conduct of a public information drive and advocacy campaign at the grassroots level is necessary to raise public awareness on Federalism and constitutional reform as well as to ensure widest public participation in the ongoing initiatives to amend or revise the fundamental law of the land.”

Filipinos should participate in the IATF’s “public information drive and advocacy campaign at the grassroots level” to ensure that the administration knows the real sentiment of the people regarding this massive undertaking they want Filipinos to support.

But Filipinos must also lend an ear to the other path to maximum decentralization, comprehensive legislative reform. We must also participate in activities offered by the champions of this option. Make sure as well that lawmakers know the ramifications of their inaction.

This choice between charter change and legislative reform is something we can reflect on while the 18th Congress focuses on passing the 2020 budget and the economic reform package of the Duterte administration.

 

Michael Henry LI. Yusingco, LL.M, is a non-resident research fellow at the Ateneo Policy Center of the Ateneo School of Government.

Kings look to build on breakthrough victory

By Michael Angelo S. Murillo
Senior Reporter

FINALLY notched a win in their best-of-five Philippine Basketball Association Commissioner’s Cup semifinal series last time around, the defending champions Barangay Ginebra San Miguel Kings look to build on it albeit recognize that it would not be easy once again against a “steady” TNT KaTropa.

Narrowed their series deficit to 2-1 after a dig-deep 80-72 victory in Game Three on Tuesday, the Kings try to take cue from it for Game Four today at 7 p.m. at the Smart Araneta Coliseum to keep their title reign alive and force a decider at the weekend.

Barangay Ginebra had to go through rough seas in the last time game against TNT to stay alive in the midseason PBA tournament as the latter came out with all intents to close out the series.

Import Justin Brownlee making his presence felt on offense in the final quarter and timely baskets from the locals down the stretch made it possible for the Kings to survive and fight another day.

It was an outcome whose significance was not lost to Barangay Ginebra coach Tim Cone, who was visibly relieved to have finally gotten one victory in the series.

“Well, we got one but obviously one is not enough. But the good news is we are still alive. We’ll take it one game at a time. That’s what everybody’s saying but that is really the case. Hopefully we get another one next game,” said Mr. Cone in the post-Game Three press conference.

Mr. Brownlee struggled offensively for much of the game, scoring just six points in the first three quarters.

He then scored eight valuable points for the Kings in the payoff quarter to help his team in its push.

The Barangay Ginebra import finished the game with 14 points, 11 rebounds, eight assists, four steals and two blocks.

Guard LA Tenorio backstopped him with a team-high 16 points while Joe Devance added 13 markers.

For TNT it was import Terrence Jones who showed the way with 24 points and 18 rebounds. He, however, committed eight turnovers in the contest.

Troy Rosario had 12 points while Jayson Castro and Roger Pogoy had 10 points apiece.

Zeroing in on the game today, Mr. Cone said they are expecting another grind of a battle and that they have to be at their best against TNT.

“It was tough getting just one. We just got to see if we can turn around and try to get two,” said Mr. Cone.

“It took everything we had to beat them today. They (TNT) are a team that understands their system and we’re just trying to find some things that would make them uncomfortable and we don’t know if it’s going to work twice. We’ll just have to continue thinking out of the box and try to win. But if we try to allow them to play their game they will just eat us up,” he added.

The winner of this series will face the victor of the semifinal series between the San Miguel Beermen and Rain or Shine Elasto Painters, who were to play Game Three later on Wednesday with the Beermen up in the series, 2-0.

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