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CA upholds P1.12-B settlement between NHA, R-II Builders

THE Court of Appeals (CA) said it affirmed the P1.12-billion settlement between the National Housing Authority (NHA) and a private property developer over the Smokey Mountain project in Manila.

In a 25-page decision dated May 30, the CA special first division upheld the 2018 settlement between NHA and R-II Builders, Inc., the former developer of Smokey Mountain Development and Reclamation Project (SMDRP), which ordered NHA to pay R-II P1.12 billion for the project.

R-II, under the agreement, relieves the government agency of all monetary obligations and liabilities in connection with the claim and cancel any previous notice of levy or attachment against NHA upon payment of the obligation.

“This Court finds that the Compromise Agreement dated Nov. 21, 2018 is not contrary to law, morals, good customs, and public policy,” the court ruled.

“It appears to be freely executed by herein parties R-II and NHA. Thus, no cogent reason exists for the Court to refuse to grant the prayer of the parties and hereby bestows judicial approval of their Compromise Agreement,” it added.

The Office of the Government Corporate Counsel (OGCC) claimed that the authority of the NHA general manager is limited to negotiation and signing of the compromise agreement and has no authority to decide on additional properties.

It also contested the six-month period, upon execution, within which it is ordered to pay the initial amount of the obligation.

The court noted that the general manager of the NHA is authorized to sign for the agency and there is no need for specific authority for other properties that were part of the P1.12-billion obligation to which the NHA gave its consent. It also noted that both parties gave their consent in executing the compromise agreement.

“Significantly, jurisprudence is clear that an essential requisite of the validity of a dacion en pago, and consequently, the total extinguishment of the obligation, is the consent of both parties, which was evident in the case at bench,” the CA said.

“In the same breath, neither does this Court find issue as to the substance of the Compromise Agreement with regard to the settlement of all claims as asseverated by the OGCC,” it added.

The court also dismissed the claims of Home Guaranty Corp. (HGC) which claimed that R-II had no reason to recover in connection with the project as HGC had the right to claim all the amounts owing to the Asset Pool by NHA, saying it has entered negotiations with a settlement amount of P5 million in its favor.

The CA said that HGC did not object the compromise agreement and the agreement was binding only to the parties in it.

“After all, HGC is not left without any recourse in law. As the Agreement is only binding upon the parties to the compromise, there is no prejudice as to any negotiations or concessions made between HGC and the latter parties separate and distinct from the said Agreement,” it said.

R-II entered into five contracts with NHA beginning March 1993 in connection with the SMDRP. However, its appointment as developer of the project was terminated in July 2002 as the government decide to submit the additional works of P480 million and their Amended Supplemental Agreement to public bidding.

Due to the termination of the contract, R-II and NHA executed a Memorandum Agreement (MoA) in 2003 wherein the agency “acknowledged therein its indebtedness to it for actual works” for the project, to allow the government to proceed with the public bidding.

R-II moved its claim to the lower court after NHA failed to settle its obligation in full within 12 months after the execution of the MoA as it was only able to pay P806 million leaving a balance or P993 million.

A Quezon City court ruled in favor of R-II, ordering NHA to pay its obligations and issued Notices of Garnishment to NHA.

The settlement was reached in 2018.

The decision was written by Presiding Justice Romeo F. Barza and concurred in by Associate Justices Jhosep Y. Lopez and Ronaldo Roberto B. Martin. — Vann Marlo M. Villegas

DA sets more entry requirements for feed from ASF affected countries

THE Department of Agriculture (DA) said it issued new requirements for the import of plant-based feed products from African Swine Fever (ASF)-affected countries.

In memorandum circular no. 8, series of 2019, Agriculture Secretary Emmanuel F. Piñol said that among the documents needed for entry of shipments include an ASF declaration form from an independent third-party surveyor, which states the last outbreak date of ASF from the country of origin.

The outbreak declaration should follow the announcement of the World Organization for Animal Health on ASF outbreaks, including information on the length of the last ASF outbreak. The required information includes whether the latest outbreak lasted more or less than two months. For outbreaks of less than two months, the shipment from the affected country is subject to quarantine.

The circular prescribes a quarantine period of 20 days from the day the feed was loaded onto the vessel.

If the feed is from non-Asian countries where transport takes at least 20 days, it may be cleared by the quarantine officer at the Port of Entry.

If the feed is from an Asian country and transportation takes less than 20 days, the circular prescribes a 10-day quarantine period.

The DA has banned pork products from ASF-affected countries like Belgium, Bulgaria, China, the Czech Republic, Hungary, Latvia, Moldova, Poland, Romania, Russia, South Africa, Ukraine, Zambia, Mongolia, Vietnam, Cambodia, Hong Kong, and North Korea.

Additional security measures at the ports include meat-sniffing dogs, X-ray machines to inspect packages from affected countries. — Vincent Mariel P. Galang

Sugar output rises 1.93% in late May; SRA claims supply sufficient

SUGAR PRODUCTION as of the fourth week of May rose 1.93% year-on-year, the Sugar Regulatory Administration (SRA) said.

SRA said raw sugar production was 2.06 million metric tons, equivalent to 41.21 million 50-kilo bags, compared with 40.432 million a year earlier.

The crop year for sugar starts in September and ends in August.

Demand for raw sugar declined 16.85% to 1.56 MMT.

Total sugarcane milled decreased 6.36% year on year to 21.63 MMT.

Refined sugar output fell 5.69% year on year to 775,527.10 MT.

The millgate price fell 20.07% to P1,479.22 per 50-kilo bag.

The retail price was stable at P45 to P53 per kilo.

SRA Administrator Hermenegildo R. Serafica said that there is no need for sugar imports since supply is sufficient.

“We still have lots of sugar in warehouses so if need be, SRA is always prepared to do what it takes,” he told reporters after a briefing held in Pasay City.

The government is being lobbied by the food industry to liberalize sugar imports along the lines of the Rice Tariffication Act, amid claims that sugar costs in the Philippines are too high. But the sugar industry has countered that such a measure could put millions of jobs at risk.

Mr. Serafica noted that the country can only export about 120,000 MT of sugar to the US this crop year, lower than the initial quota allocated by the US of 142,160 metric tons raw value (MRTV) or 136,201 metric tons commercial weight for 2018-2019.

“Definitely for this year, we can only ship out more or less 120,000 MT . In fact, USDA (the US Department of Agriculture) has re-allocated the shortfall of our volume to other countries, so it will still be served,” he said.

As for the proposed reduction of the funding for programs under the Sugar Industry Development Act (SIDA), a counter proposal has been submitted to the Department of Budget and Management (DBM).

“We just have to wait for the DBM… DBM also has internal rules for utilization. They are very strict with that, especially for cash,” he said.

The proposed budget for SIDA for 2020 is P67 million, down from P500 million in 2019. The Confederation of Sugar Producers (CONFED) has said that the industry plans to appeal to Congress to increase the allocation to about P1 billion. — Vincent Mariel P. Galang

September target set to wrap up South Korea free trade talks

A SEPTEMBER TARGET has been set to conclude free trade talks between the Philippines and South Korea, Trade Secretary Ramon M. Lopez said.

“Kasi nga aapurahin ito eh, so June, July, August, September, mga four or five months sana matapos na yung mga usapan na yun para November pipirmahan na.” (We are hurrying this… around four or five months we hope the talks will finish so we can sign in November,) Mr. Lopez said during the opening of the KOTRA-Manila FTA Support Center Tuesday.

The Philippines’ main concern for the FTA is to lower tariffs for agricultural products like bananas.

“Syempre ang gusto natin, single digit, less than 10%. Five percent, we hope.” (Of course we want a single digit tariff, 5%, we hope) he said.

The Association of Southeast Asian Nations (ASEAN) currently has a free trade agreement with South Korea, but Mr. Lopez said that tariffs are still high.

“Ang taripa ng banana ng Korea una sa atin ay sabi ko nga, medyo mataas pa, pwede pang ibaba yan. (The tariffs charged by South Korea can still be lowered) in the same way na ang taripa natin, Pilipinas, sa mga Korean fruits ay mababa na (to the low level our tariffs have been set for Korean fruits.)

Mr. Lopez also said the Philippines wants to narrow its trade deficit with South Korea.

In 2018, imports from South Korea were at $10.5 billion, while exports were at $2.5 billion.

FTA talks started earlier this month.

Mr. Lopez said he expects negotiations to go smoothly, because, being bilateral in nature, it does not involve as many participants as the ASEAN-South Korea talks.

“Ang ASEAN, may FTA na with Korea so kumbaga hindi tayo mag-uumpisa sa zero dito (We are not starting at zero because ASEAN has an FTA with South Korea). Mayroon tayong pagkukunan na kung saan may mga particular mga rules na pwede nang gamitin sa ating Philippines-Korea FTA,” (We can use the ASEAN deal as a basis for the bilateral deal) he added.

The FTA could coincide with the 70th year of diplomatic relations between the two countries as well as a possible visit of President Rodrigo R. Duterte to South Korea.

Mr. Lopez and South Korean ambassador to the Philippines Han Dongman and various South Korean business officials launched the KOTRA Manila FTA Support Center, which will assist small to medium enterprises in trade matters. — Katrina T. Mina

May online hiring grows across all industries — Monster

ONLINE job recruiting site Monster.com said job posting activity grew across all industries in May, led by the Consumer Goods segment.

The May Monster Employment Index (MEI) showed a 17% year-on-year rise in online hiring activity, Monster said.

“Online hiring in the Philippines witnessed a positive uptrend with 17% year-on-year growth in e-recruitment demand between May 2018 and 2019,” Monster said in a statement on Tuesday.

Monster.com-Asia Pacific and Middle East CEO Abhijeet Mukherjee said that the increase of recruiting activity shows that local talent is still a hot commodity online.

“The online demand for talent in the Philippines has been consistently positive for quite some time now, despite the PSA’s recent Labour Force Survey report showing a decline in the number of Filipinos looking for jobs, as well as GDP growth deceleration to 5.6% in Q1 2019 from 6.2% in 2018,” he said.

The MEI also showed growth for all 12 industries it tracks, led by the Consumer Goods/FMCG sector, where hiring activity grew 35% year-on-year in May. Next was health care at 29%.

The Logistics, Courier/Freight/Transportation, Import/Export and Shipping sector grew 23%; followed by Hospitality (22%); IT, Telecom/ISP (20%); Production/Manufacturing, Automotive and Ancillary (15%); Retail (15%); BPO/ITES (11%); Education (9%); and Engineering, Construction and Real Estate (7%).

MEI said that HR & Admin jobs were in most demand of all occupations with 20% year-on-year growth in hiring activity. — Gillian M. Cortez

DoF asks CoA to waive rule on sale of gov’t assets

THE Department of Finance (DoF) said it will pursue talks to get the Commission on Audit (CoA) to relax its rules to facilitate speedier disposal of nonperforming government assets.

In a statement Tuesday, Finance Secretary Carlos G. Dominguez III said he has instructed the Privatization Management Office (PMO) and the Philippine Deposit Insurance Corp. (PDIC) to discuss the matter with CoA and state-run banks.

“Tell them this CoA requirement that we sell at market value isn’t working because we just keep on adding to the titles particularly with the PDIC and we’re just getting overwhelmed,” Mr. Dominguez said.

“I want a meeting with the CoA, mainly with the representatives from PMO, PDIC, the banks, the two (government) banks. The central bank may want to participate,” according to Mr. Dominguez.

Mr. Dominguez said CoA Circular No. 89-296 issued 30 years ago requires the sale of nonperforming government assets at their appraisal value is hindered the disposal of idle properties.

According to Mr. Dominguez, it would be better for these assets to be sold at discounted prices to attract more buyers.

Mr. Dominguez noted that PMO has 28,000 land titles to dispose of while the PDIC has around 23,000.

“The objective is to ask CoA to cooperate with us and propose ways of turning these assets into cash, because cash helps the economy,” Mr. Dominguez said.

“Selling it even at a discount allows to be redeveloped and used. Right now, it’s just an expense,” Mr. Dominguez added.

The DoF said the PMO is not covered by the 30-year-old CoA circular. The CoA issued a memo earlier stating that “CoA Circular No. 89-296 does not apply to foreclosed assets held by PMO and sold in the ordinary course of business” and “the assets/properties held by the PMO pursuant to Proclamation No. 50 and sold in the regular course of its business are not within the purview of CoA Circular No. 89-296.”

The CoA said it had no comment on the matter as yet. — Reicelene Joy N. Ignacio

SEA Games seen as opportunity for developing halal services

THE Philippine Trade Training Center Global MSME Academy (PTTC-GMEA) said it hopes to step up its halal training activities for the hospitality industry next month, starting with the venue for the Southeast Asian Games.

In an interview with BusinessWorld on Tuesday, PTTC-GMEA Deputy Executive Director Nelly Nita N. Dillera said training on halal-friendly hospitality practices will begin in Clark and Subic.

“We’re fast-tracking it for August or even July, bringing in our partner CrescentRating to conduct training in the Clark and Subic area in order to implement halal tourism,” Ms. Dillera said.

PTTC-GMEA is set to sign a memorandum of understanding (MoU) with CrescentRating, a Singapore-based Muslim travel authority during Micro, Small, Medium Enterprises (MSME) Week which will be organized by PTTC-GMEA on July 8 to 12.

Ms. Dillera said the upcoming 30th Southeast Asian (SEA) Games this year which will be held in Clark is viewed as an opportunity to expand halal tourism.

“We are hosting the Southeast Asian Games in Clark and most of the participants will be halal-conscious travelers…and I heard there will be around 10,000 (total visitors) where most are halal conscious,” she said, adding that these travelers will not only be looking for halal food but also halal services.

“We’re targeting the training for July or August in preparation for the Southeast Asian Games,” she added.

PTTC-GMEA plans to train around 150 frontline personnel for the SEA Games, targeting those working in airports, hotels, catering, and transportation.

“They are the ones with the first engagements with the halal-conscious people. First we want to inculcate in their minds that these tourists have special needs in terms of food and certain facilities,” she stressed.

Facilities include adequate prayer rooms and directional indicators telling them where to face during prayer.

PTTC-GMEA Executive Director Nestor P. Palabyab told BusinessWorld there is a need to enhance halal tourism in the Philippines, considering the size of the halal-conscious population in Asia.

“Halal is the majority market in the ASEAN region… everyone is doing halal. There should be a market opportunity here in the Philippines,” Mr. Palabyab said. — Gillian M. Cortez

Hitting the infrastructure halfway mark

Time is of the essence for the rollout of infrastructure projects as President Rodrigo R. Duterte hits the halfway mark into his six-year term that ends in 2022. As soon as he assumed office in 2016, the government introduced the “Build, Build, Build” program, which aims to reduce the infrastructure gap in the country.

Under this program, the government seeks to roll out 75 flagship projects whose cost will amount to P2.18 trillion, 37 of which were already approved by the National Economic and Development Authority (NEDA) Board. Out of the approved projects, 14 were identified to be completed by 2022, while the remaining 23 will extend beyond 2022.

Coincidentally, this halfway mark likewise puts pressure on the economic and finance departments in terms of loan and grant agreements with the country’s development partners which will finance a majority of the flagship infrastructure projects.

In the event that the Philippines moves to upper middle-income class (UMIC) status at the end of the year or by 2020, the loans will become more expensive as the country will no longer qualify for lower interest rates or preferential terms such as those extended to lower-middle-income and low-income economies. According to the World Bank, the Philippines is a lower-middle-income economy, whose gross national income per capita is between $996 and $3,895, along with other 46 countries such as Indonesia, Myanmar, India, Vietnam, Cambodia, and Lao PDR.

For its part, the Japan International Cooperation Agency (JICA) has already spoken about the possibility of higher lending rates once UMIC status has been reached. For now, JICA provides concessional financing with interest rates from 0.01 to 1.4 percent depending on the kind of loans secured. Another possible consequence of such a change is our disqualification from Japan’s Special Terms for Economic Partnership. Likewise, funding from multilateral financing institutions, such as the World Bank and the Asian Development Bank (ADB), would entail more costs on our end.

Although the Philippines would be given a grace period of two years from the time UMIC status is achieved, the government seeks to fast-track and prioritize costlier infrastructure projects, such as the Metro Manila Subway, North-South Commuter Railway, and Mindanao projects in view of the change of terms of the Official Development Assistance loans.

DEALING WITH DELAYS
Apart from the societal expectation to live up to the promise of entering the so-called “golden age of infrastructure,” delays in infrastructure development such as the budget impasse and the election ban on public works definitely add more weight on President Duterte’s shoulders. Due to the delayed passage of the 2019 national budget, government spending was not properly utilized, resulting in lower economic growth projections. Based on the First Quarter 2019 Report on Economic and Financial Developments of the Bangko Sentral ng Pilipinas, the budget impasse resulted in underspending of about P1 billion per day, largely contributing to the decline in public construction activities from 8.6% in the 1st quarter of 2019 compared to its year-ago and quarter-ago growth rates of 22.6% and 11.8%. Further, data from the Philippine Statistics Authority shows that growth, as measured by the gross domestic product, slid to 5.6% in the first quarter of 2019 from the 6.5% recorded in the first quarter of 2018.

CATCHING UP WITH CONCRETE PLANS
While the government recognized its shortcomings and consequently came up with a “catch-up plan,” it is essential for these plans to be clear and concrete.

construction site silhouettes
FREEPIK_EVENING_TAO

In order to achieve the growth target of 6% to 7%, the Philippine economy will need to expand by an average of 6.1% over the next three quarters. Based on data from the Department of Budget and Management, the government must disburse P792.97 billion for infrastructure from the 2nd to 4th quarters to accelerate the implementation infrastructure projects and to reach the infrastructure-spending target of P1 trillion. Accordingly, the Department of Public Works and Highways and the Department of Transportation made a combined spending commitment of P803.1 billion for the next three quarters of the year.

In addition to increased government spending, the administration’s plan of sparking the interest of foreign investors in Philippine infrastructure seems to be a good initiative.

Out of the 35 flagship projects, some will be financed by Chinese loans and grants such as the Philippine National Railways South Long-Haul and the Subic-Clark Railway.

With the help of the Japanese government, flagship infrastructure projects such as the North-South Commuter Railway and the Metro Manila Subway Project can be completed.

As for the government of the United States, it is interested in investing in infrastructure in the Philippines and, ultimately, in the ASEAN region in partnership with the private sector and multilateral lenders such as the Asian Development Bank (ADB). For its part, ADB’s cumulative investment in the country is at $19.3 billion with an average of $800 million yearly investment in the last 10 years.

BUILDING A SOLID FOUNDATION FOR DEVELOPMENT
While the plan is for government to “Spend, Spend, Spend!” to expand the economy, and to “Borrow, Borrow, Borrow!” from foreign investors, much emphasis should be on the implementation of the “Build, Build, Build!” agenda, taking into consideration the possible roadblocks ahead.

First there are the inevitable construction constraints due to weather conditions which should be taken into account. Second, quality assurance of infrastructure projects should be underscored. While the timely and speedy implementation of the “Build, Build, Build!” projects should be prioritized, the safety and quality of our country’s infrastructure has to keep up with global standards and rising expectations of Filipinos.

Also — in the words of an expert from the ADB — “plugging infrastructure gaps requires fiscal reforms and increased investments that are not only the domain of the government.” Accordingly, private and public sector cooperation is essential to close the gaps. With the private sector on board, there can be more access to capital, stronger incentives for competence, and exposure to cheaper yet efficient technologies.

The last three years of the Duterte administration is a crucial point for economic development as it seeks to build a stable and solid foundation for the Philippines in the coming years. While the burden seems to be heavy on the government, rather than breaking, it must surpass and fill in the infrastructure gaps lest the very foundation of our development crumble into pieces.

 

Hannah Viola is an attorney and a fellow of the Stratbase ADR Institute.

The fox investigates the raid on the chicken coop

We’ve probably all heard the tale of the fox who raided the chicken coop and had to be hunted down by the farmer. But have you heard about the farmer agreeing to let the fox investigate the incident in order to determine whose fault it was that the chicken coop was raided and why neither the fox nor the chicks might be at fault after all?

Well, apparently that is what President Rodrigo R. Duterte (the president of the sovereign nation of the Philippines, in case you have forgotten) would like to happen. A fishing boat being sailed by 22 Filipino fisherman and fishing in Philippine waters was reportedly rammed and sunk by a Chinese boat.

Worse yet, as the Pinoy boat sank and the 22 Filipino fishermen were in danger of drowning, the Chinese boat abandoned them. Fortunately, the crew of a Vietnamese boat that also happened to be fishing in the area came to their rescue.

This has been the testimony of the Filipino fishermen.

The Chinese embassy in Manila has a different version of the incident. According to an official Chinese statement, the Chinese vessel was “besieged” (that is, threatened or intimidated) by seven or eight Filipino fishing boats and the Chinese crew was thus afraid to rescue the Filipino fishermen. According to one news report, the captain of the Chinese boat tried to save the Filipinos but was “afraid of being besieged by other Filipino fishing boats.”

As more and more observers (that is, kibitzers) have weighed in on the incident, the narrative has become more and more muddled, One online news item stated: “Palace casts doubt on Filipino fishermen’s tale of Reed Bank allision (sic).”

“MANILA — Some details in the testimonies of the Filipino fishermen on the allision (sic) of their fishing boat and a Chinese ship don’t add up, a Palace official said Tuesday.

“Presidential Spokesperson Salvador Panelo said the incident must be investigated thoroughly as recent developments show conflicting details between the narratives of FB GEM-VER boat captain Junel Insigne, and its cook Richard Blaza.”

Agriculture Secretary Manny Piñol was reportedly “unsure what the Chinese ship intended to do” (that is, willfully and maliciously ram and sink the Filipino boat). Thus, Piñol believes that the incident still “needs to be investigated and validated by a proper maritime investigating body.”

For his part Defense Secretary Delfin Lorenzana (yes, the one in charge of harnessing Philippine military forces to defend the Philippines) is said to have begun entertaining “doubts that the Chinese ship intended to bump the Filipino boat.”

(That is, willfully, malevolently, cruelly and viciously intended).

Not surprisingly, those who have been following this story no longer know whom to believe. To quote the lyrics of Harry Belafonte’s song: “It was clear as mud and it covered the ground, and the confusion made the brain go ’round…”

And so Duterte (the president of the Philippines, remember?) has reportedly agreed to have this incident “investigated” by both the Chinese and the Philippine government.

Needless to say, Duterte may be foraying in murky waters. One of the first premises that he needs to establish is that the incident happened in Philippine territory.

If Duterte succeeds in establishing that and in making the Chinese acknowledge that (as well as Vietnam, because the Vietnamese boat that rescued the Filipino fishermen was also fishing in the area), then the “joint investigation” will be well worth it.

Note that the honorable members of the Philippine Senate are objecting to having the Chinese participate in the inquiry because, according to Senator Franklin Drilon, allowing China to do so would “derogate our jurisdiction and prejudice our claim” in the West Philippine Sea, waters within the Philippines’ 370-kilometer exclusive economic zone (EEZ) in the heavily disputed South China Sea.”

Drilon reportedly added that “the collision happened right within the country’s territorial waters, a fact that China had already acknowledged.”

Really? Have the Chinese already acknowledged that the area where the ramming occurred is Philippine territory?

According to one news account by journalist Steven Stashwick, “Reed Bank, which the Philippines calls Recto Bank, lies about a hundred nautical miles northwest of the Philippine island of Palawan and is at the northwest tip of the contested Spratley Islands. A 2016 arbitration ruling held that the bank is part of the Philippines’ exclusive economic zone, but it is also claimed by China, Malaysia, Brunei, Vietnam and Taiwan.”

The report added that the area is said to have significant reserves of natural gas: “The Philippines has conducted surveys of the bank but China has interfered with efforts to explore for gas and has insisted on taking the lead in any joint exploration or exploitation venture.”

Understandably, Senator Panfilo Lacson has expressed apprehension that “allowing a joint investigation with China and a third party may be interpreted as a waiver of our right of ownership of Recto Bank.”

To go back to the tale of the fox who raided the chicken coop, allowing a joint investigation would be like giving the fox proprietary rights over the chicks.

At any rate, assuming Panelo, Lorenzana, and Piñol have a basis for doubting certain parts of the account of the incident, as told by the Filipino fishermen, there appear to be agreement on the following:

a.) A Filipino fishing boat was sunk by a Chinese boat (the Chinese embassy has acknowledged that the Chinese boat’s crew intended to save the Pinoys, thus in effect admitting their involvement in the sinking);

b.) There has been damage to property that needs to be compensated.

c.) The Philippine government’s firm position should be that the ramming (whether malicious or accidental, intended or unintentional) happened in Philippine territory.

Lorenzana, Piñol, and Panelo — and most of all Duterte — should stop trying to soft-pedal their version of the incident and leave the Chinese to do that. Whatever the intentions of the Chinese, let them be the ones to rationalize it — not Lorenzana, Piñol, or Panelo and, for heaven’s name, not Duterte. And Foreign Secretary Teddy Boy Locsin should stop trying clumsy diplomatic language that simply makes the situation “clear as mud,” to quote Belafonte,

One more thing: Is this incident so serious as to break amicable relations with China. Apparently not, but it certainly is one more example of the Chinese acting like a fox raiding the chicken coop.

Duterte, Locsin, Lorenzana, Piñol, Panelo, Drilon, Lacson and, oh yes, Vice-President Robredo, should agree on that and express their grave concerns to the Chinese.

The fox and the Chinese should be reminded that Filipinos are not chicken.

(ALLISION: the running of one ship upon another ship that is stationary — distinguished from collision. This is according to www.merriam-webster.com. — Ed.)

 

Greg B. Macabenta is an advertising and communications man shuttling between San Francisco and Manila and providing unique insights on issues from both perspectives.

gregmacabenta@hotmail.com

Historically courageous people toadying up to China

If he hasn’t acquired one yet, perhaps someone should give Rodrigo Roa Duterte a Jetski so he can fulfill his campaign promise to ride one to the Spratleys where he would plant a Filipino flag. So far, our president has, contrary to our 1987 Constitution’s mandate that “The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens,” been shamefully second guessing China’s positions on the issues raised and already set aside in the UN Arbitral court.

It is becoming difficult to hold our heads up among other nations when the President of our sovereign republic parrots the line of China, even on how we should deal with the brazen bullying of our fishermen and our once senior government officials former Foreign Secretary Del Rosario and former Ombudsman and Supreme Court Justice Conchita Carpio Morales. Incredible. How he actually says in public that it is up to China how they want to investigate the “simple marine accident” in the Recto Bank, which happens to be part of the Philippines’ exclusive economic zone, as recognized by the UNCLOS (United Nations Convention on the Law of the Sea) to which both the Philippines and China are signatories, and reconfirmed by our victory in the UN Arbitral Court, which agreed that China’s claim to the “Nine-Dash Line” is pure fiction.

Rodrigo Duterte has demonstrated to our people his toughness against assertive women (Leila de Lima, Mary Lou Sereno, and Carpio Morales, et al.) and defenseless young drug addicts whom he has no compunctions about putting in jail or causing to be shot by his armed minions. What is it about China that has turned him into a pathetic lackey? Is his tough guy stance the other side of obsequiousness to those perceived with more power?

This is a nation of heroes who have given their lives for our freedom and dignity against perilous odds. Jose Rizal, Jose Abad Santos, Ninoy Aquino. Thousands of our people died in the resistance against the cruel Japanese colonials and before that, the authoritarian Spaniards, and even against our own dictator: Eman Lacaba, Ed Jopson, et al.

Today, I toss and turn in bed, incredulous at how far our president and his own toadies second guess the Chinese on what they might want us to say in response to their downright bullying. Phrases like “simple marine incident,” and “he should have expected to be barred at the HK airport,” and “it is up to China to decide if they would like to have a joint investigation on the Recto Bank incident.” Clear and simple, shameful toadying to the bullies.

Agriculture Secretary Emanuel Piñol even went so far as to visit the victimized fishermen in Mindoro, accompanied by several armed policemen. His mission resulted in an alteration of the fishermens leader’s assertive position of “they rammed us, and left us to die in the water” to uncertainty about whether the ramming of their boat was intentional or accidental. However, Junel Insigne, the Gem Ver captain, said that they just want the Chinese to be held accountable for abandoning them to die in the sea. Government spokesmen have even questioned whether the Gem Ver fishing boat was actually sunk, as the fishermen and their Vietnamese rescuers had reported.

The Vietnamese, who saved the lives of our fishermen whom they fished out of the waters where they had managed to stay afloat for hours, cold, hungry and weak, confirmed that the Gem Ver had sunk; else why would the fishermen be floating in the sea? That doesn’t take much analysis. A third party to conduct the investigation? Certainly, the testimony of the third party Vietnamese fishers should suffice.

The highly schooled, but immature Foreign Secretary Teddy Boy Locsin, in response to the deportation of our courageous former Foreign Secretary Albert Del Rosario, instead of protesting the denial of entry to Hong Kong by someone with a special diplomatic passport, as provided by Philippine Law, decides to cancel all diplomatic passports. He justifies his action as “in order not to single out Del Rosario.” What, just after the Hong Kong incident? And he has the temerity to call our Vice-President “Boba?” Whose side is he (and our government) on?

Our Philippine Constitution of 1987 states in its Declaration of Principles, Section 1 “The Philippines is a democratic and republican State. Sovereignty resides in the people and all government authority emanates from them.” The Declaration of Principles states further: “The prime duty of the Government is to serve and protect the people.”

For how long shall we sit here and allow our government to defend China for bullying our honorable citizens including fishermen who were within their right to fish in our waters? We must be close to becoming the laughing stock of ASEAN and the rest of the world, if not already there. What price are we willing to pay for our sovereignty, dignity and self-respect?

So far, it seems to me, the business community has been just as timid as the government. I hope I’m wrong.

 

Teresa S. Abesamis is a former professor at the Asian Institute of Management and an independent development management consultant.

tsabesamis0114@yahoo.com

The MOU between PHL and China and a timely revisit of the La Bugal case

On Nov. 20, 2018, the Philippines and China entered into a Memorandum of Understanding (MOU) on Cooperation on Oil and Gas Development. Premised on the Charter of the United Nations, the United Nations Convention on the Law of the Sea (UNCLOS), and the 2002 Declaration of Conduct of Parties in the South China Sea, the two governments agreed to negotiate on an accelerated basis (i.e., within 12 months of its signing) arrangements to facilitate oil and gas exploitation in “relevant maritime areas.”

Under Section III of the MOU, the two governments intend to establish an Inter-Governmental Joint Steering Committee and Inter-Entrepreneurial Working Groups.

The Committee will be co-chaired by the Foreign Ministries, and co-vice chaired by the Energy Ministries, with the participation of relevant agencies of both governments, and with equal number of members nominated by the two governments. Under the same section, the Committee is responsible for negotiating and coming up with cooperation arrangements and the maritime areas (or cooperation areas) to which they will apply. The Committee will also decide on the number of Working Groups to be established and for which part of the cooperation area each Working Group will be established (working area).

More specifically, each Working Group will consist of representatives from enterprises authorized by the two governments. For this purpose, China will authorize the China National Offshore Oil Corp. (CNOOC) while the Philippines will authorize enterprises that have entered into service contracts with the Philippine Government with respect to the applicable working areas. Should there be none, the Philippine National Oil Company-Exploration Corp. (PNOC-EC), will be the Philippine enterprise authorized to represent it in a particular Working Group.

The MOU is without prejudice to the respective legal positions of both governments with respect to their claims in the disputed sea and will not create rights or obligations of both parties under international or domestic laws.

It can be observed that the MOU is an effort by both parties to peacefully settle their conflicting territorial claims. Still, any joint development agreement that may be entered into with respect to the relevant maritime areas will inevitably have to be measured against the yardstick of the 1987 Constitution.

Section 2, Article XII of the 1987 Constitution provides that the exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. Moreover, it mandates the State to protect the nation’s marine wealth in its archipelagic waters, territorial seas, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.

Nonetheless, it gives the President authority to enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils, subject to certain safeguards. In the 2004 case of La Bugal B’laan Tribal Association v. DENR, the Supreme Court held that the language of Section 2, Article XII of the Constitution should be interpreted as allowing the President to enter into an agreement to explore, develop, and utilize minerals, petroleum and other mineral oils even with a 100% foreign owned corporation. It further held that this type of agreement should not be restricted to one that is merely for financial or technical assistance.

The Supreme Court, however, reminded that the State must still retain full control and supervision over the exploration, development, and utilization of these resources. In particular, the Supreme Court held that while the foreign contractor may be allowed a certain degree of management prerogative, the State must still be able to direct, restrain, regulate, and govern the affairs of the foreign contractor.

There are those who opine that a joint development agreement with China can hurdle Constitutional issues in view of this ruling in La Bugal. However, a conclusion is not as easily arrived at as it may seem. In this regard, it is apt to quote Professor Jay L. Batongbacal’s assessment of the MOU as published in the website of Asian Maritime Transparency Initiative, thus:

“… the MOU… still does not address the specific challenges and restrictions posed by the Philippine Constitution and legislation… It also does not address the constitutional and legal requirement of ‘sole control and supervision by the State’ of natural resource exploration and exploitation. Unfavorable answers to these questions may lead to the conclusion that Philippine sovereignty and sovereign rights will indeed be compromised. These can be finally determined only when the parties agree on the actual cooperation arrangements for specific areas.”

This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.

 

Fritz Micah A. Diumano is an Associate of the Litigation and Dispute Resolution of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW)

fadiumano@accralaw.com

(02) 830-8000

Northport shoots for solo PBA tourney leadership

By Michael Angelo S. Murillo
Senior Reporter

LEAGUE-LEADING Northport Batang Pier go for their fifth win in a row in the Philippine Basketball Association Commissioner’s Cup, and solo leadership in the standings, when they return to action today against the Phoenix Pulse Fuel Masters at the Smart Araneta Coliseum.

Set for 4:30 p.m., the Batang Pier, joint first with a 7-1 card along with the idle TNT KaTropa, seek to extend their streak and fan their push for a top-two finish at the end of the elimination round of the midseason PBA tournament versus an undermanned Phoenix (2-4) crew which is still searching for consistency in winning.

Playing in the 7 p.m. main game, meanwhile, are the Magnolia Hotshots Pambansang Manok (3-2) against the San Miguel Beermen (2-3).

Northport comes into today’s contest after its big 127-99 victory over the import-less Blackwater Elite on June 22.

The Batang Pier debuted their new acquisitions from a recent trade with the Barangay Ginebra San Miguel Kings — Sol Mercado, Jervy Cruz and Kevin Ferrer — in said game, and all of them made a good account of themselves.

Mr. Mercado had 14 points and five assists, Mr. Cruz had a double-double 16 points and 11 rebounds and Mr. Ferrer finished with 23 point and six assists in helping their new team in the wire-to-wire victory.

Team leading scorer Sean Anthony had 22 points and 11 rebounds while rookie Robert Bolick had a near triple-double of 16 points, 10 assists and nine rebounds.

Import Prince Ibeh had 10 points and 13 rebounds for Northport.

“Our goal from here on is to claim the top two and earn the twice-to-beat incentive in the next round,” said Northport coach Pido Jarencio, in the vernacular, following their win.

“Like what I’ve said, the three players we got from Ginebra would help us. And they proved that today. They helped improve our rotation,” he added, referring to Messrs. Mercado, Cruz and Ferrer.

Out to halt the steamrolling Batang Pier, meanwhile, are the Fuel Masters, who will continue to be sans the league-suspended Calvin Abueva.

Phoenix is fresh from a 99-96 loss to Magnolia on June 22 that saw it fall back to earth after halting a three-game losing streak previously.

Import Richard Howell paced the Fuel Masters last time around with 36 points and 20 rebounds but it was not enough to tow his team to the victory against Magnolia, which had to dig deep to emerge victorious.

Matthew Wright had 19 points and eight assists while RJ Jazul finished with 15 points.

Phoenix continues to miss the services of All-Star forward Abueva, who was suspended by the league indefinitely over on-court actions he made which were deemed unbecoming of a professional by the PBA.

Before being canned, Mr. Abueva was averaging 14.5 points and 8.5 rebounds in two games.

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