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FDA to start licensing e-cigarette industry in December

THE Food and Drug Administration (FDA) will start accepting license applications for e-cigarette and vape businesses in December, allowing for a transition period after the July release of regulations for the industry.

FDA Officer-In-Charge Rolando Enrique D. Domingo told reporters Monday that the FDA is currently in the first month of the three-month transition period prescribed by the Department of Health’s (DoH) Administrative Order (AO) 2019-0007. The AO requires individuals and establishments involved in the manufacturing, distributing, selling, importing, and exporting of Electronic Nicotine and Non-nicotine Devices (ENDS/ENNDS) to obtain a license to operate (LTO) from the FDA.

ENDS/ENNDS businesses will also be required to register their products with the FDA.

“We’re now on the first month, so September, October and November. FDA has conducted meetings with the industry to discuss the AO, and they were given three months from the time it took effect,” he said.

He added, “By December, we will be ready to accept registrations.”

E-cigarette and vape groups have expressed opposition to the AO. The Philippine E-Cigarette Industry Association (PECIA) said in a social media post on Aug. 13 that the AO was “designed to kill the industry,” adding that some of their members have questioned the validity of the AO in court.

Mr. Domingo, who is also a DoH Undersecretary, added that the department consulted with all stakeholders prior to the release of the AO.

“We cannot do that without public consultation. I remember we had a meeting here in the DoH and it was posted in the website for comment,” he said.

Mr. Domingo described the registration as a safety measure due to incidents where e-cigarette and vape devices exploded, causing facial injuries. ENDS/ENNDS products being sold on the streets and online are also not yet regulated by the FDA. On the tax side, the government is proposing to impose tax rates on the segment on par with the tax levied on tobacco products.

“At least we will test the device to see if this does not explode or not cause fire or smoke suddenly….Hindi namin alam kung safe ito or kung saan sila ginawa (We don’t know if they are safe or where they were made) and some of them can potentially harm a person, causing injury…..They have to be regulated kasi nasa bibig ’yun eh and pwede magka-injury (because it is consumed by mouth, which makes it an injury risk),” he said.

The AO also covers liquids and refills used for ENDS/ENNDS. Enterprises are only permitted to sell a maximum of 10 milliliters (mL) of liquid per container, whether this has nicotine or not. The maximum allowable nicotine content for liquids is 20 mg/ml while nicotine shots and concentrates will be prohibited.

Mr. Domingo said the FDA will release a list of allowed flavors for liquid refills late next month, adding that food-inspired flavors that normally appeal to the young will be banned. — Gillian M. Cortez

Red tape regulator, DICT to lead gov’t digitization effort

THE Anti-Red Tape Authority (ARTA) is planning to sign a partnership with the Department of Information and Communications Technology (DICT) to digitize government transactions.

In a statement, the government’s bureaucracy regulator said it is due to sign a memorandum of agreement with the DICT in the first week of September. This agreement aims to formalize the coordination of the two agencies in improving government transactions through greater use of technology.

“This initiative will be carried out by both agencies in an effort to accelerate efficiency in the government through automation by making the most of Information and Communication Technologies (ICT),” it said.

ARTA Director General Jeremiah B. Belgica said automating government services will reduce operational costs and aid in eliminating corruption by “(minimizing) interaction between applicants and government employees and officials.”

Digital transformation is also a key step in improving the speed of public services en route to an eventual shift to paperless transactions, ARTA said.

“ARTA is calling for all government agencies’ proactive participation and support in this initiative. For starters, the heads of government offices and agencies are advised to reach out to DICT for assistance in their automation efforts,” it said.

The DICT is forming a “Chief Information Officer Corps” with ARTA, which will lead digital transformation efforts in government agencies that will tap the service.

“…ARTA intends to be the window to the future of government, ultimately paving the way to a digital Philippines… We implore all government agencies to take the huge step in adopting modern technology with us,” it said. — Denise A. Valdez

Trump looking at possible tax cuts amid economic jitters

WASHINGTON — President Donald Trump said on Tuesday his administration was considering potential tax cuts on wages as well as profits from asset sales, and sought to play down market anxieties that the world’s top economy could be heading for a recession.

Speaking to reporters during a White House visit by Romanian President Klaus Iohannis, Mr. Trump said “we’re looking at various tax reductions,” adding that a “payroll tax is something that we think about.”

Recession fears were stoked last week when bond investors briefly demanded a higher interest rate on 2-year Treasury bonds than for 10-year Treasury bonds, a potential signal of lost faith in near-term economic growth.

Mr. Trump dismissed fears of a slowdown, extolling low unemployment and a rising stock market over his tenure.

“I think the word “recession” is a word that’s inappropriate…We’re very far from a recession,” he said.

The Washington Post reported a temporary payroll tax cut was under consideration to juice growth, but Mr. Trump said the White House has been weighing tax cuts for some time.

A slowdown would be bad news for Trump, who is building his 2020 bid for a second term around the economy’s performance, but whose year-long trade war with China is weighing on growth.

On Tuesday, Mr. Trump said he would not need the approval of Congress to link a tax on profits from asset sales, known as capital gains, to inflation. According to tax code experts, investors would pay far less capital gains tax if it was linked to an inflation index.

“I’m not talking about doing anything at this moment, but indexing is something that a lot of people have liked for a long time. And it’s something that would be very easy to do,” he said. “It is something I am certainly thinking about.”

Former Vice-President and Democratic presidential hopeful Joe Biden, campaigning in Iowa, said lowering the capital gains tax would only help the wealthy.

“The route that the president has us going down is a big mistake,” Mr. Biden told reporters after a campaign rally. “We should be focusing on how you re-empower the middle class, we should be rewarding work, not wealth.”

Payroll taxes fund the Medicare health insurance program for the elderly and Social Security, which in turn provides income payments for retirees.

Lowering them temporarily could boost consumer spending, a key driver of the US economy, but it would also deprive the government of tax revenues, at least in the short term.

At the end of 2017, Mr. Trump signed a massive tax overhaul passed by the Republican-led Congress and has since promised to follow up with another round of major changes. — Reuters

DoF makes pitch for ‘superior’ new corporate incentives

THE Department of Finance (DoF) said the next round of tax reform will offer companies “superior” incentives, and dismissed worries about the new regime as “fear-mongering.”

“The fear-mongering about the removal of incentives should stop. Package 2 will actually give superior incentives for the right reasons, such as the creation of good jobs, investment in research and development, and expansion in the countryside among others,” Finance Undersecretary Karl Kendrick Chua said in a statement.

House Bill No. 313 or the Corporate Income Tax and Incentives Reform Act (CITIRA) was approved at committee level last week, and is outed by the DoF to make incentives more time-bound and performance-based.

The DoF said the corporate income tax of 30%, is the highest in ASEAN, and the bill proposes to gradually lower it by two percentage points every other year to 20%.

Mr. Chua said the incentives offered under the CITIRA bill will help boost job creation, worker training, domestic sourcing of materials, research and infrastructure development in remote areas.

He said workforce-heavy industries such as manufacturing and the IT-BPO sector will benefit from the ability to deduct more of their direct labor expenses.

“For example, Package 2 allows an additional deduction of up to 50 [%] on direct labor expense. This means that for every job created, companies can deduct up to 150[%] of direct labor expense, compared to just 100[%] in the present regime,” Mr. Chua said.

He also said companies investing in upgrading the skills of their Filipino employees may receive up to 200% in deductions on training costs, double the current 100%.

Also under the DoF proposal, inventors may receive up to 150% in deductions if they buy and use domestically-sourced inputs which will likewise benefit local industries and producers.

To boost infrastructure development, he said companies in far-flung areas may deduct up to 100% on their public infrastructure, utilities, irrigation and drainage expenses.

Other incentives, according to Mr. Chua, will provide investors additional deductions on research and development firms and allow companies to depreciate buildings and machinery used in some projects at an accelerated rate. Such perks will boost innovation and allow faster cost recovery.

“We are also introducing an allowance which encourages firms to reinvest their profits into registered projects, or the reinvestment allowance. This will allow firms to claim up to 50 percent of profits reinvested into registered projects as a deduction for income tax purposes within five years from the time of reinvestment” he added.

However, incentives will be capped at five years while removing perpetual 5% on gross income earned and limiting tax holiday.

The bill also requires investors to reapply after the five-year or seven-year period for another five years of incentives.

Currently, DoF estimates showed firms with incentives pay around 6% to 13% effective tax while those enjoying no incentives pay the regular 30% tax.

The current incentive system cost the government, according to DoF’s estimates, about P1.2 trillion from 2015 to 2017.

“So you see, we are not anti-incentives, and it is not true that we are removing them altogether,” Mr. Chua said. — Beatrice M. Laforga

TESDA failed to disburse bulk of training funds since 2002 — CoA

SEEKLOGO.COM

THE Commission on Audit (CoA) said the Technical Education and Skills Development Authority (TESDA) failed to utilize training funds worth P201 million dating back to 2002.

According to its 2018 annual audit report, the TESDA Development Fund (TDF) had an accumulated balance of P201,383,354.41 which remains unutilized since the fund was established in 2002.

“Through its 16 years of operation however, there were no annual concrete plans, programs, projects or activities undertaken in order to address the purpose of the Fund as indicated in RA No. 7796 or the TESDA Act of 1994,” said CoA in its report.

It added, “No single transaction on awarded grants or assistance was given to training institutions, industries, LGUs for upgrading their capabilities and to develop and implement training and training-related activities.”

TDF was supposed to “provide assistance to training institutions, industries, LGUs, for upgrading their capabilities and to develop and implement training and training related activities.”

CoA noted that it was only in 2018 that P10 million from the TDF was used for a research program.

Following the findings, the state auditors recommended that TESDA disburse the funds and prepare plans and programs for the projects it was allocated for.

It added that the agency should also submit accomplishment report on the conduct of the research program.

In response, TESDA said that the board members followed some conditions in the management of the fund, including a bar on using seed capital. — Vince Angelo C. Ferreras

Renewables board seeks FiT extension for small hydro projects

THE National Renewable Energy Board (NREB) wants the granting of the feed-in tariff (FiT) or the subsidized rates for the energy produced by small hydroelectric power plants to be extended until the middle of next year when pending projects are completed.

“We’ll formalize our request to the [Energy] Secretary [Alfonso G. Cusi] to accommodate all the capacity that will be tested for FiT eligibility,” NREB Chairman Monalisa C. Dimalanta told reporters.

For biomass facilities, the request will be to allow projects whose energy capacity exceeded the set target to also be granted the FiT, she said.

“That’s part of the meeting that we will have within the week,” she said when asked about when she plans to raise the matter with Mr. Cusi.

Should the request for the FiT scheme for run-of-river hydro be extended, it would be the second time that the Department of Energy (DoE) would do so. The first request for extension allowed developers to complete their projects by end-2019.

“We don’t know if the secretary will agree but that’s going to be our request to him — that we accommodate both,” Ms. Dimalanta said.

The FiT scheme was meant to encourage investments in renewable energy by granting the preferential rates until the capacity installation target of 250 megawatts (MW) each for small hydro and biomass has been fully subscribed.

Under the previous extension, the board has sought a rate of P5.8705 per kilowatt-hour (kWh) for small hydro projects and P6.5969 per kWh for biomass projects.

The requested rates were the degressed values from the July 27, 2012 feed-in tariff rates issued by the Energy Regulatory Commission (ERC), which set run-of-river hydropower at P5.90 per kWh and biomass at P6.63 per kWh. The implementation of the FiT system started on Jan. 1, 2015 and was supposed to remain in effect for two years, or until Dec. 2017.

On Feb. 23, 2018, the DoE informed the ERC of its resolution extending the FiT for biomass and small hydro for another two years until Dec. 31, 2019, or upon successful commissioning of projects covering the remaining balance of their respective installation targets, whichever comes first.

Based on the letter from the DoE, the total capacities of both biomass and small hydro plants built and commissioned or to be commissioned within 2017 have neither exceeded nor reached the 250-MW installation targets. Small hydro had a balance of 215.40 MW while biomass had 111.39 MW remaining.

The DoE recommended that the FiT to be granted should be the rate at the time of the successful commissioning of the projects. The ERC initiated its own review and re-adjustment of the FiT rules as prompted by the missed installation targets.

“For run-of-river, the capacity will be filled up but they won’t be able to meet it within the year. For biomass, they will meet it within the year but it’s excess capacity,” Ms. Dimalanta said. “So the request we’ll make to the secretary is to accommodate both the extension on timeline for run-of-river hydro and the excess capacity within the timeline for biomass.”

She said up to 150 MW of small hydro projects are up for testing, which means 50 MW of the 250-MW target were not filled up by developers.

“I think the secretary is open to accepting the hydro one,” she said.

For biomass, the 250-MW target has been exceeded by about 100-MW, she said, adding that NREB will try to convince Mr. Cusi to accommodate the excess as it will have an impact on the FiT allowance, or the charge being collected from consumers. — Victor V. Saulon

Hey, my friend! Where’s your TIN?

When you overhear someone uttering the phrase “Hey, my friend,” it is often from friendly locals greeting visiting foreigners, much like the way Filipinos receive a warm “Hello buddy” or “Hi mate” when abroad. On a typical day at the Department of Labor and Employment (DoLE), Department of Justice (DoJ) or Bureau of Immigration (BI), foreigners intending to work in the Philippines receive a slightly different greeting — “Where’s your TIN?” The question is a consequence of the Joint Guidelines signed by these agencies with the Bureau of Internal Revenue (BIR) on the issuance of work and employment permits to foreign nationals.

A Tax Identification Number (TIN) is a nine-digit number assigned by the BIR (plus a three-digit branch code, if applicable) to individual and corporate taxpayers for identification, tracking, and record-keeping purposes. Foreign nationals working in the Philippines are likewise required to register with the BIR and secure a TIN to ensure that they pay proper taxes. To intensify the monitoring of their compliance, the TIN has now become a prerequisite to obtaining employment permits and work visas.

For guidance, the BIR issued Revenue Memorandum Order (RMO) No. 28-2019, detailing the application process and documentary requirements for securing a TIN.

MANUAL REGISTRATION ONLY
Whether done personally, through the employer or the withholding agent, foreign nationals who intend to work in the country must secure their TIN manually with the BIR. They cannot use the eRegistration (eREG) System, which incidentally has been inaccessible recently on the BIR’s website. The applicant must fill out and sign an Application for Registration (BIR Form No. 1904) and have it stamped “Received” at the appropriate Revenue District Office (RDO) of the BIR.

VENUE FOR SUBMISSION OF SUPPORTING DOCUMENTS
A foreign national applying for a Special Temporary Permit (STP) from the Professional Regulatory Commission (PRC) for the practice of regulated professions as enumerated in the RMO, or those securing a Special Working Permit (SWP) from the BI for work assignment that is relatively temporary and usually for a duration of less than six months, must submit BIR Form No. 1904 to RDO No. 39. As a supporting document, only a photocopy of the passport’s bio-data page is required.

For foreign nationals who are securing an Alien Employment Permit (AEP) from DoLE under an employment arrangement of six months or more or a Provisional Work Permit (PWP) pending the issuance of an AEP, they must file their BIR Form No. 1904 with the RDO having jurisdiction over the physical address of the employer. The required supporting documents include a photocopy of the passport’s bio-data page, employment contract or its equivalent indicating the term of employment, compensation package, and scope of duties. In all cases, however, no alien individual shall be registered with the Large Taxpayer (LT) Division, namely LTAD/ELTRD/LTD-Cebu/LTD-Davao.

Foreign nationals who are holders of AEPs or with working visas (9g) upon arrival, shall likewise be registered with the RDO having jurisdiction over the physical address of their employers.

If acting through a representative, the foreign national is required to submit an authorization letter, indicating the name of the withholding agent or authorized representative, including a photocopy of any government ID of the authorized person to secure the TIN.

Unfortunately, the RMO failed to set clear expectations from the employment permit-issuing agencies to verify the RDO where the foreign national applied for a TIN. Interagency coordination is necessary to avert a future unexpected last-minute transfer of registration during the filing of the income tax return or any potential consequence of filing at the wrong venue.

REGISTRATION UPDATE AND CANCELLATION
A registered foreign national shall, whenever applicable, update his registration information with the RDO where he is registered by filing an Application for Registration Information Update/Correction/Cancellation or BIR Form No. 1905.

A foreign national with an SWP, who had been registered under Executive Order (EO) No. 98 and subsequently issued a working visa (9g), is required to transfer registration from RDO No. 39 where he was initially registered, to the new RDO having jurisdiction over the place of business or the local residence of those in the practice of a regulated profession. They shall update their registration data and apply for business registration, if applicable.

A foreign national with a PWP, registered under EO 98 and later issued an AEP or working visa (9g) must update his registration information from EO 98 to “Employee,” with the RDO where he had been registered.

In case of termination of employment, a foreign national registered as an “Employee” must update his BIR registration to cancel his TIN. While I think failure to do so may not necessarily result in grave penalties, the TIN will remain active and raise the presumption of the continuing exercise of work or employment. To overcome this presumption in the event of a tax investigation, the foreign national may be required to provide proof of repatriation or departure from the country to confirm the cessation of employment.

TAX TREATY RELIEF APPLICATION (TTRA)
In the RMO, the BIR also reiterated its requirement for taxpayers to file a TTRA with the International Tax Affairs Division (ITAD) when availing of benefits under an applicable tax treaty, notwithstanding the Supreme Court ruling that a TTRA is merely confirmatory in nature.

Applying for a TIN should be simple and straightforward. Even if it precedes the processing of work and employment permits, foreigners should not be dissuaded from working or engaging in activities in the country. With the Joint Guidelines in place, we can expect more integrative and streamlined processing of work and employment permits. Overlapping of responsibilities and duplication of requirements will hopefully be addressed and clarified now that interagency regulations have been realigned.

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.

 

Raymund M. Gutib is a senior manager at the Tax Services Department of Isla Lipana & Co., a Philippine member firm of the PwC network.

+63 (2) 845-2728

raymund.m.gutib@pwc.com

More expensive electricity via climate tax

“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

— H. L. Mencken, December 1921

The main purpose of climate alarmism is to expedite government environmental and energy taxation to further expand government and the United Nations (UN). Scare the public endlessly, like declaring a “climate crisis/emergency” whatever the weather and climate: less rain and more rain, less flood and more flood, less storms and more storms, less cold and more cold.

There is a legislative proposal to impose a “climate tax on electricity” (CTE) for residential customers under HB 1245 of Congressman Luis Raymund Villafuerte, Jr. The proposed CTE will be P1 per kilogram of carbon dioxide (CO2) emission. It claims that since CO2 emission comprises 0.553 kg per kWh of electricity, then CTE = 0.553 x electricity consumption in a month.

In our house for instance, our average electricity use from May to July was around 280 kWh/month. If the Villafuerte bill becomes a law, then we must pay P155/month extra for this CTE, on top of feed in tariff allowance (FIT-All) of around P65-P70/month that goes to the favored and privileged mostly solar-wind companies.

This year, we experienced frequent “yellow alert” warnings (thin reserves) from the National Grid Corporation of the Philippines (NGCP) for five months, March to July. There were few days where “red alert” was raised, meaning short rotating black-outs were made to forcibly reduce power demand.

The good news is that new big power plants will begin operation in the Luzon grid starting August-September 2019 until 2021.

I made a short-term projection of power supply-demand, limited to the Luzon grid due to space constraints. Peak demand from 2015-2018 was rising by 5.7% a year on average, so for 2019-2023, I projected a 5.5% annual increase due to GDP growth deceleration recently. From there, I computed the projected reserves (see table).

Now, since most of those new big power plants run on fossil fuels especially coal, then Rep. Villafuerte and allies will likely push their lousy and idiotic proposal to further raise the cost of already costly electricity in the country. The Philippines has the third most expensive electricity in Asia next to Japan and Singapore.

Note also that the high reserves percentage can be deceiving because many existing power plants are old, especially coal and hydro plants, they tend to experience unscheduled and forced outages, and extended maintenance shutdown. Thus, actual reserves can be lower than these projections.

The House Committee on Ways and Means and Congress as a whole should junk this and related bills that intend to make electricity more expensive.

Things can worsen though if the triumvirate of the Department of Finance, Department of Budget and Management, and National Economic and Development Authority support this bill in the name of helping “save the planet.” Recall the hike in the excise tax on oil under the TRAIN law by P6/liter over 2018-2020 was pushed by the triumvirate to finance various welfare programs and partly to “save the planet” by discouraging more oil use. Oil consumption of course did not decrease because it is a necessary and useful commodity that is used in many sectors and machines from tractors and fishing boats to cars, busses and airplanes.

The triumvirate should learn their lesson that more expensive energy means higher inflation, which helped pull down overall GDP growth. They plus the Department of Energy should call for the junking of this and related bills in Congress.

Cheaper electricity, lower inflation, sustained high growth, more investments and job creation, no additional and distortionary energy taxes, these should be the primary goals of the administration in its last three years.

 

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

minimalgovernment@gmail.com

More ways than one

Southern Leyte has declared itself to be in a “state of calamity,” the fourth province to do so in recent weeks, because of the spread of the mosquito-borne tropical disease dengue. Such a declaration allows the provincial government to access funds set aside for disasters or calamities, and use them to pay for interventions that can help address the epidemic.

The Department of Health (DoH) has reported that between Jan. 1 and Aug. 3, more than 188,000 dengue cases have been recorded nationwide. This was more than double the number of cases recorded during the same period last year. There have also been 807 deaths, up from 497 in 2018, resulting from severe dengue cases.

This situation prompts one to question whether the government made a mistake in stopping the mandatory vaccination of public school children against dengue. In the same line, should we now ask our government officials to reconsider their action against the controversial Dengvaxia vaccine that used to be administered by DoH?

The DoH’s National Dengue Task Force, which monitors people previously vaccinated with Dengvaxia for possible ill-effects, is not inclined to recommend reusing Dengvaxia for mass immunization. It has noted that in Central Luzon this year, there were cases where even those already vaccinated still got sick from the dengue virus.

The task force noted that of the 172,000 people vaccinated in Central Luzon, 98 have gotten sick since the start of the year. Seven of the 98 even received the complete cycle of three doses of the vaccine. The Food and Drug Administration (FDA) has canceled the Certificate of Product Registration of Dengvaxia, but this has been appealed by the vaccine manufacturer.

The are more ways than one to fight dengue, and while vaccination can still be a future option, I believe people should now be looking at more practical ways to get rid of dengue mosquitos. After all, as with some cases with vaccination, viruses eventually evolve or develop new strains that are immune to vaccines. Getting rid of breeding sites must thus be the priority.

Mind you, it is not only dengue that’s on the rise. There are other cases of mosquito-related diseases being recorded like malaria, chikungunya virus, yellow fever, and Japanese encephalitis, among others. There are vaccines for malaria, yellow fever, and encephalitis, but I am uncertain if we are doing mass immunization. The same for dengue.

Getting rid of breeding sites will help minimize the problem. But “search and destroy” need not be harsh to the environment. It shouldn’t be “toxic” to people, either. The use of chemicals may be necessary in some cases, but to the extent possible, I still advocate for “natural” methods of eliminating the threat.

Households are encouraged to be vigilant of stagnant water and should urgently remove them. Moreover, they need to make sure that screens are used for windows, and in some cases, mosquito nets for sleeping. Use natural mosquito repellants whenever possible, either on the body or in homes. And be aware of emerging technologies against pests like mosquitoes.

More than a year ago I wrote about the US government’s approval — through the Environmental Protection Agency (EPA) — of an anti-mosquito paint that was made in Japan. Back then, I already noted that this product would be a big step in terms of “vector control” as a way to beat malaria and other mosquito-borne diseases like dengue.

I am uncertain, however, how much the paint costs. But I still believe that painting walls with anti-mosquito paint may be more cost-efficient and effective in dealing with mosquito-transmitted diseases than with periodic spraying of insecticides inside our homes or in our surroundings, or applying chemical-based insect repellants on our bodies.

The “technology” for the US-approved anti-mosquito paint was reportedly first developed in Africa to prevent the spread of malaria. The product has also been reportedly approved and commercially launched in Malaysia and Singapore. I await its introduction here. That is, if it is scientifically proven to be highly effective against mosquitoes.

Homes and public buildings will require or need painting, anyway. In choosing paint, even if “treated” paint costs a bit more, wouldn’t this be a more cost-effective approach to fighting malaria and dengue and similar diseases? If such a product can be made available here, then I am sure it will be a viable option in the fight against mosquito-borne diseases.

Another interesting option is the use of “predatory crustaceans” like copepods and varieties of fish that eat mosquito larvae. When they are placed in container habitats, decorative ponds, and pools, they prey on mosquito larvae, thus effectively preventing mosquito development. Copepods in large water-storage tanks successfully limited dengue transmission in Vietnam.

The choice of organisms, however, must be backed by scientific study. Moreover, such organisms must be localized and should not be introduced into the natural habitat. This is to avoid such organisms from preying on other fish and other creatures in natural bodies of water. The World Health Organization (WHO) warns that “only native larvivorous fish should be used because exotic species may escape into natural habitats and threaten the indigenous fauna.”

But WHO also noted that “biological control organisms” can be effective when bred and distributed into water-storage containers or wells. It added that a variety of fish species have been used to eliminate mosquitoes from larger containers used to store potable water in many countries, and in open freshwater wells, concrete irrigation ditches, and industrial tanks.

Other literature indicate that goldfish, guppies, bass, bluegill and catfish also prey on mosquito larvae. An option are birds such as purple martins, swallows, waterfowl (geese, terns, ducks), and migratory songbirds, which also eat both the adult and aquatic stages of mosquitoes. What would be ideal, of course, is the use of edible fish and fowl for the purpose.

Dengue and other mosquito-borne diseases are a problem. Dealing with them will not be easy. Vaccines, if proven effective and safe, should always be an option. But in the immediate, we should vigilantly employ a variety of methods, preferably more natural than chemical, in homes, schools, places of work, and in farms that can help prevent outbreaks and epidemics.

 

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

matort@yahoo.com

Journey to wholeness: Social development

As part of our Integral Human Development class, we went on an exposure to GK Enchanted Farm in Angat, Bulacan. The professionalism and courteousness of everyone on the farm was both contagious and heartwarming and it was easy to see why there so many people who are involved in this social enterprise.

The stories of the people who are part of GK Enchanted Farm give others hope. Both speakers, the farm manager and our tour guide, talked about the early days of the GK Village and its evolution to the GK Farm University and other successful social enterprises. Both grew up here and have committed to serving their community.

Blessed and honored was how I felt for having an immersion with this social enterprise! I was inspired by how Tony Meloto, the founder of Gawad Kalinga, was able to help others. It was a short visit, but it was very enlightening. I was touched because the people at the farm were able to transform their lives via the different social enterprises that were established by brave social entrepreneurs. I marveled at the creative toys of Plush and Play and enjoyed our kesong puti making demonstration.

During the trip, I was able to feel the spirit of “bayanihan,” one of the most important values to every Filipino as it signifies our desire to help people in need, may they be less fortunate or not. It was great to see and fulfilling to know that there are people out there who help transform other peoples’ lives.

Each of us has the responsibility to help society and to lend a hand to our poor brothers and sisters. Aside from the goals we have for ourselves, I believe that we should have a goal of helping other people who are less privileged. We are morally responsible to continuously help those around us. I believe that we are blessed by God so we can also bless others the way they should be blessed.

Generosity does not mean we have to spoil the people in need and make them dependent on us. It does not mean they will not strive anymore to make their lives better since they will expect it to be done for them by others. It just means helping can come in different forms, not just financially. Giving advice or counselling, offering a shoulder to lean on and listening are also on the list of ways to help others. With this, we can simply give them a lift and let them know that they are not alone in their journey. All these can also be shared so they can feel God’s presence and blessings in their lives through us.

Moreover, I believe helping should not just be a one-time deal or a yearly activity. As part of the community, we play a big role in helping make things better in our society. If we always think that in life we just have to receive and not give, we cannot feel any fulfillment at all, neither we will feel blessed. Helping should not mean expecting something in return from the people we assisted. It must always come from the heart and just hope that the aid we provided will give them the confidence to get through whatever problems they are facing.

I believe that we are obliged to help the community because we are part of the community. As we help the community, we are helping part of ourselves. Our mindset should always be as what the saying says, “it is better to give, than to receive.” You never know what God has in store for you whenever you give.

Reflecting on it, I have decided to commit myself to:

1. Volunteer and take part in charity works.

2. Give back a percentage for every closed deal that I will have as a Real Estate Broker.

3. Open a savings account where I can gather all my donations.

4. Be helpful to other people even in little ways.

5. Plan and provide sales seminars for people where I can help equip them to know more about sales and to boost their morale and confidence so that when the time comes, they can, in turn help those in need.

 

Joey Estevez is an MBA student. This article is part of his reflections on his experiences in the course, Integral Human Development.

https://joeytoday.blogspot.com/

How Asia can protect its crazy riches

By Satyajit Das

WITH SUPPORT for globalization and free trade declining in much of the world, Asia has a historic chance to break out of its traditional role as a capital exporter to the West and to instead redirect flows to improve its own economies and financial industries.

According to some estimates, the region’s pool of wealth at $110 trillion exceeds those of North America and Europe and is growing faster. Japan and China were at or near the top of foreign portfolio investment in the United States, including stocks and short- and long-term bonds, in 2017 with $2 trillion and $1.5 trillion respectively, a US Treasury survey showed.

Yet Asia has a poor record of protecting its assets stranded overseas when the cycle turns. In the 1990s, Japanese investors incurred significant losses, primarily on property. During the 2008 crisis, a range of Asian sovereign wealth funds and high net-worth individuals lost heavily on advanced economy shares, real estate, and mortgage-backed and structured securities.

The desire to invest overseas partly reflects concern about political risk and governance at home. But leaving familiar territory brings other risks.

Distance, language and cultural differences can put Asian investors at a disadvantage when it comes to information. As a result, investors often rely too heavily on intermediaries whose interests don’t align with their own.

Their main failing, though, is a bias toward certain assets. In an echo of the ill-fated Japanese purchases of Rockefeller Center and the Pebble Beach golf course in the 1980s, Asian investors are buying prime office buildings in New York and London. Swanky apartments are quickly snapped up in world cities, especially by Chinese buyers.

Lacking cozy domestic informational networks, Asian investors are particularly susceptible to chasing name asset managers or fashionable businesses. That restricts their options since the best funds are frequently closed to new arrivals. Managers often can’t repeat past results.

Inadequate expertise frequently leads to unwise choices. In the run-up to 2008, Asian banks and investors suffered losses on purchases of structured products and collateralized debt obligations, or CDOs. High net-worth and retail segments are buying again. Japanese banks have purchased up to 75% of AAA tranches of collateralized loan obligations, and perhaps one-third of all CLOs, which have common features with CDOs.

Where investments are leveraged, they must be financed by borrowing dollars and euros in wholesale markets. Losses may create difficulties in rolling over funding. As in 2008, forced sales and the lack of trading liquidity will accelerate declines in prices.

Why look abroad at all? There is a mismatch between Asian savings and the size of domestic capital markets, which are marked by low returns, a smaller range of investment products and limited local expertise. The regional rivalries between Singapore, Hong Kong, Shanghai, Mumbai and Tokyo and a bias toward real industry have hampered the development of financial services.

Asia lacks quality indigenous banks such as JPMorgan Chase & Co. or The Goldman Sachs Group Inc., or asset managers such as BlackRock Inc. or Pacific Investment Management Co. Most financial institutions are domestically focused. In 2018, assets under management at Asian hedge funds fell 10% to just over $100 billion, a mere 3% of the global total. Private wealth management remains the preserve of Western firms.

Asia’s high savings are a global anomaly, driven by rising incomes, a culture of thrift and minimal social safety nets. Governments need to move with greater determination to enable more savings to be absorbed locally. The timing may be right as the world is tilting more toward national interests and self-sufficiency.

The first step must be to accelerate development of capital markets to boost size, depth, liquidity and investment choices. Revised listing and issuance rules, harmonized pan-Asian regulations, breakups of family dominated conglomerates, and partial or full privatization of key state-owned firms would improve market depth. Changes in rules and tax incentives should encourage local pension funds or insurance companies to adopt stable, long-term investment practices.

Second, the creation of world-class financial institutions and skilled asset managers needs to be a priority. To attract the best and brightest, limited career choices and pay that lags behind international levels need to be addressed. State-sponsored financial skills training and accreditation systems should be improved. A system of mutual recognition of qualifications would increase labor mobility.

Finally, retaining capital within Asia requires improving confidence in the security of savings. Key steps include creating independent institutions free from political interference, as well as bolstering the rule of law and transparent and consistent regulations. Singapore and Hong Kong, despite its recent protests, are examples to emulate.

Without change, the familiar cycle of exuberant foreign investment and the loss of Asian wealth is likely to be repeated in the next downturn.

 

BLOOMBERG OPINION

Transit can save the environment, just not how we expected

By Mark Buchanan

AS MORE AND MORE of the world’s population shifts into cities, traffic congestion is becoming an ever-larger problem. The average American now loses around 100 hours a year sitting in traffic. Globally, congestion slows driving speeds, increasing emissions of carbon dioxide — more than 20% of which now comes from traffic.

Some dream that self-driving cars may solve the problem by smoothing out people’s natural and often disruptive driving habits, yet self-driving cars are arriving much more slowly than enthusiasts expected. Ride-hailing services might also help by reducing car ownership, but a new study shows that in cities where Uber and Lyft have been introduced, traffic delays have gone up, not down.

One obvious idea to decrease congestion is better public transportation. But experts have been skeptical of how much this can help. Economists Gilles Duranton and Matthew A. Turner argued nearly a decade ago that luring some drivers off the roads and onto trains and buses leaves less congested roadways, which then attract other drivers to those same roads. It’s similar to what happens when you try to reduce congestion by building more roads: When you make more room for cars and trucks, you get more cars and trucks.

But new research based on statistical patterns in traffic demand and the availability of public transportation flies in the face of this theory. A good measure of a city’s traffic burden is the fraction of the population that chooses to drive to work rather than use public transit. Using a simple conceptual model, physicists Vincent Verbavatz and Marc Barthelemy of the Institute of Theoretical Physics in Saclay, France, posited that easier access to public transportation can tip people away from driving.

That prediction turned out to be quite accurate for 25 large metropolitan areas in Europe, the US, Asia and Australia. In these cities, the fraction of people driving to work decreased in direct proportion to how easy it is to access public transportation — specifically, which fraction of the population lives within 1 kilometer of a transit station.

Why did no one discover this before? For one thing, the data didn’t exist. The research used sources such as TomTom navigation data, academic studies on access to transportation in many nations, and average driving speeds estimated from Google Maps. But more than that, Barthelemy told me by e-mail, patterns can only be discovered if someone thinks to look for them. Their simple model suggested an interesting pattern to look for.

Their results lend credence to the idea that making public transportation more accessible can draw people away from driving, thereby reducing traffic. It also counters a fixed idea in transportation policy research that population density is the most crucial determinant of traffic patterns, with more densely populated cities being more efficient. That turns out to be wrong.

Verbavatz and Barthelemy also used their results to estimate how carbon dioxide emissions vary between cities and found that — in another prediction backed up by the empirical data — emissions rise in direct proportion to the diameter, or linear size, of a city, as well as with the proportion of people who lack good access to public transport. Compact cities emit less carbon dioxide per person, but not because of their population density. And better access to public transport always helps.

Of course, making access easier isn’t just about getting people closer to transit stations. “Easier” might mean bridging the final distance between user and transport system with convenient bus service, for example. In this sense, one of the most exciting developments in public transport might be the rise of fleets of Uber-like buses able to move people over short, flexible routes. One example is the DC MicroTransit system, currently running for free in Washington. The aim is to use mobile technology to make the mass transit system easier for everyone to access, but to do it using large vehicles so as not to tax the roadways with even more traffic.

Some experts envision the emergence of a dense microtransit mesh of public and private shuttles bringing access to sprawling public transit systems to almost everyone’s doorstep. Logically, as Verbavatz and Barthelemy’s modeling demonstrates, this seems like a sound way to reduce road traffic. The technology that drives Uber and Lyft might reduce traffic yet, just not in the way those companies initially thought.

 

BLOOMBERG OPINION

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