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Government urged to phase in teacher pay hike

BUSINESS groups said the government should implement any pay hike for public school teachers in phases in order to keep inflation contained and not hinder the government’s other spending priorities.

The joint statement was issued Wednesday by Action for Economic Reforms, the Financial Executives Institute of the Philippines, the Foundation for Economic Freedom, the Makati Business Club, Management Association of the Philippines and the Philippine Business for Education.

The groups said the government also has other important priorities to finance and backed a phased increase over time.

“Fiscal affordability and sustainability, and the competing demands for other essential public expenditures… include other parts of the education sector itself, the health sector, social spending such as Conditional Cash Transfer, and investments in hard infrastructure. All these are needed to lift our people out of poverty, broaden and enrich the middle where our school teachers belong,” they said.

“We, the undersigned business and professional organizations, believe that better education is a top national priority,” according to the statement, adding the sector plays a crucial role in making Filipinos “more competitive, secure and productive.”

“We recognize, appreciate, and value public school teachers as central to this goal, aside from being important leaders of our communities, including during election time. They deserve to be compensated better and given better training opportunities and tools, and we join other sectors in making that a goal,” they said.

The groups also said the government needs to ensure “fairness and equity of public school teachers’ pay compared to other civil servants,” considering the former had their pay increased recently.

The group quoted Education Secretary Leonor M. Briones as saying that public school teachers’ pay has “overtaken” pay at private schools.

In 2019, a public school teacher at the entry level salary grade of 11 earned 58% more than the equivalent private school teacher, while an associate professor at salary grade 23 earned more than double his or her private counterpart.

Citing the regional labor force survey, they said in 2016, public school teachers received on average 71% more than private school teachers nationally, with the gap ranging from 34% in the Cordillera Administrative Region to 158% in the Autonomous Region in Muslim Mindanao.

Ms. Briones also disputed claims that public school educators are “the most pitiful and lowest paid profession,” according to the group.

“This is especially so in rural areas as the salary of public school teachers is standard nationwide. Compared to private school teachers’ pay which is determined by local cost of living in the area they are working,” they said.

An immediate pay increase would pose “heavy economic and social effects, such as inflation, low growth, and unemployment, that go with spending beyond our means.”

“This hits the poor hardest,” they said.

President Rodrigo R. Duterte promised on campaign to raise the salaries of public school teachers. He renewed the promise earlier this month, noting that the government is studying how to source the funds. — Janina C. Lim

Over $200M Japan loan signed for Mindanao road projects

THE Philippines signed a $202.04 million loan agreement with Japan to fund the Road Network Development Project in Conflict-Affected Areas in Mindanao late Tuesday.

“This involves the construction, rehabilitation and improvement of 176.6-kilometers of road, linking of the Bangsamoro Autonomous Region in Muslim Mindanao to the trade centers of Mindanao,” Finance Secretary Carlos G. Dominguez III said in a briefing to announce the signing at the Clark economic zone.

The project involves the construction of access roads including the 19.8-kilometer Marawi Ring Road and the 23-kilometer the Marawi Trans-Central Road.

The agreement was signed by Mr. Dominguez and Japan International Cooperation Agency (JICA) Senior Vice President Yasushi Tanaka.

Mark A. Villar, Secretary of the Department of Public Works and Highways (DPWH), meanwhile said that with the signing of the loan signing, Marawi’s rehabilitation can proceed to full speed in July.

“The $200 million loan for the Marawi master plan is already signed and we are well on our way to implement the master plan that the President conceived after the Marawi incident. That is in addition to the grant given to us by Japan currently.”

“Of course there are challenges on the ground like the possible presence of IEDs (improvised explosive devices), but that being said a full-blown feasibility study masterplan as signed now is being funded… Implementation will be on full blast by July,” Mr. Villar said.

Mr. Dominguez said Japan is the largest donor of the Philippines for Marawi projects, and it is willing to provide more if necessary.

“The Japanese government is the largest donor or source of funds for the Marawi rehabilitation, and they mentioned today that if there is more needed they are willing to provide the funds,” Mr. Dominguez said.

Socioeconomic Planning Secretary Ernesto M. Pernia said that Mindanao has been neglected for long, and infrastructure projects are viewed as a key to uplifting the region’s economy.

“The data on gross regional domestic product (GRDP) simply shows that Mindanao has been neglected, and we hope that with all these projects being implemented will raise the GRDP of the Mindanao region,” Mr. Pernia said.

“The idea of having these infrastructure projects in the regions is to diminish the inequality across the regions to make the regions more connected to each other. To make the lagging regions connected with the mainstream economies,” he added.

Meanwhile, Mr. Dominguez said that the Japanese and Philippine officials will work on signing this year loan agreements for the ongoing Davao City Bypass Construction Project; New Mactan Bridge Construction Project in Cebu; the second phase of the Metro Manila Priority Bridges Seismic Improvement Project; and the second tranche of the loan for the first phase of the Metro Manila Subway Project.

Feasibility studies on the Dalton Pass East Alignment Alternative Road Project, subject to certain requirements, and the Circumferential Road 3 Project Missing Link Project will be done later this year, according to Mr. Dominguez.

Mr. Pernia said the government’s goal of graduating to upper middle-income status expected for this year might need to be moved to next year due to the low economic growth posted in the beginning of 2019.

“We anticipated around the end of this year, (but it could) move back to 2020 because of our lower economic growth rate this year possibly. Once… we achieve upper middle-income country status then we will not be qualified for (Japan’s) Special Terms on Economic Partnership (STEP) funding, so we will be on a non-STEP funding.”

As such, the government must prioritize projects while it still qualifies for STEP, he added. — Reicelene Joy N. Ignacio

BSP focused on improving FDI environment — Diokno

THE Bangko Sentral ng Pilipinas (BSP) is committed to ensuring a favorable environment for foreign investors by achieving “price stability, a sound external payments position, financial stability, and an efficient payment system,” Governor Benjamin E. Diokno said.

He was speaking on the keys to fueling growth in foreign direct investment (FDI) at the 5th Joint Economic Briefing organized by the British Chamber of Commerce of the Philippines.

Such policy goals, he said, will “minimize external risk and provide resilience to shocks to the economy. This will help support an enabling environment conducive to economic growth and in turn investment opportunities,” Mr. Diokno said.

FDI net inflows dropped 15.1% year-on-year to $1.941 billion in the first quarter. The BSP attributed the decline to uncertainty generated by the US-China trade war, pre-midterm election worries, and the pending rationalization of investment incentives.

Despite the decline, FDI has been growing since 2010, Mr. Diokno said.

The BSP expects inflation to remain on target, with latest estimates pointing to a 2.9% average this year. Inflation in 2020 will be slightly higher at 3% due to a rebound in oil prices.

Mr. Diokno said the bank will also pursue foreign exchange reforms that will take into consideration the needs of the Philippines’ growing economy.

“The BSP is committed to implementing various foreign exchange liberalization reforms to make the country friendlier to investors and attract bigger and better FDIs both in value and quality,” he said.

Meanwhile, Mr. Diokno said he will also ensure that the BSP will strictly implement recently enacted laws such as amendments to the BSP charter, national payments system, the national identification system, and the gold law — which allows the BSP to purchase gold from small-scale miners free of excise and income tax.

“We stand ready to support the government’s efforts to further fuel FDI so that pursuing business opportunities in the Philippines will be mutually beneficial for investors and the domestic economy,” Mr. Diokno said.

Aside from economic fundamentals, Department of Trade and Industry Assistant Secretary Angelo B. Taningco said at the same briefing that the Philippines could take advantage of its demographics, which are among the youngest in the world.

“We also have Filipino workers that are hard-working, friendly, and easily adaptable. These are the things that are very crucial for investors in determining the long-term situation in the country,” Mr. Taningco said.

BDO Unibank, Inc. Chief Market Strategist Jonathan L. Ravelas said that potential investors in the Philippines should be told that its story is similar to what Thailand went through in the 1990s.

“It talked about building infrastructure, developing social capital and investment in their country’s biggest asset which is its people, and a concentration on opportunities to seize. That’s basically agriculture, tourism, and manufacturing,” Mr. Ravelas said in a panel discussion at the event.

Asked how the US-China trade war will affect the Philippines, Mr. Ravelas noted that the dispute would “actually be very good” for the country.

“We are a good takeoff point for these exports. The impact of the trade war is neutralized by the government’s infrastructure program. It’s providing a shield.” — Arra B. Francia

New Congress to look into power shortage

THE next Congress will look into warnings of a power shortage caused by the Supreme Court ruling requiring distribution utilities to implement a competitive selection process for their power supply agreements (PSA), a senator overseeing the chamber’s energy committee said.

Sen. Sherwin T. Gatchalian said he estimates that the ruling has upended 3,000 megawatts’ worth of power projects, which require a signed and approved PSA before the proponent can obtain financing.

He said there is a need to explore other mechanisms to speed up power project approvals to make up for the project delays.

“May remedy tayo diyan (we have a few remedies) via EVOSS (Energy Virtual One-Stop Shop), CEPNS (Certificates of Energy Projects of National Significance) so tignan natin (let us see) how these two mechanisms can improve the pace of the construction of power plants,” Mr. Gatchalian told reporters at a roundtable discussion Tuesday night in Makati City.

The Energy Regulatory Commission (ERC) has warned that the Supreme Court’s decision requiring competitive bidding for all PSAs will lead to a power supply shortage that would affect millions of consumers.

The competitive selection process policy, delayed for years by the ERC, will cover PSAs filed on or after June 30, 2015. The ruling also means that all cost recovery will retroact to the effectivity of the new contract but in no case earlier than June 30, 2015.

The ERC is currently preparing its reply to the SC decision while inventorying the PSAs affected by the ruling.

Earlier this year, a series of power outages hit several parts of Luzon. Business leaders have warned that the power crisis may continue next year due to policy barriers that delay putting up much needed power projects.

Mr. Gatchalian, the head of Senate’s energy committee, said such claims are “very valid” warnings.

“Dapat wala tayong red at yellow alert kasi hindi ’yan magandang signal sa business sector dahil part ng requirement nila eh stable electricity… (the business sector requires stable electricity and considers red and yellow alerts a negative signal) especially if you want to attract foreign investors,” he added.

He said the incoming Congress will also review the implementation of the Electric Power Industry Reform Act (EPIRA) of 2001, adding that the legislature will require a forecast of the energy supply in the next three years.

“Part of the discussions (will involve) updates to EPIRA. Did EPIRA deliver adequate power supply now and will it in the future?” Mr. Gatchalian said.

EPIRA or Republic Act 9136 aimed to liberalize the power sector with at least three core provisions: deregulation and demonopolization of the power generation sector, creation of the Wholesale Electricity Spot Market, and liberalization and demonopolization of electricity distribution via Retail Competition and Open Access.

“So, pagbukas ng Congress (when Congress opens), we will dedicate a hearing to the deliverables of ERC at DoE (Department of Energy) when it comes to the accountability of gencos (generating companies) and ask them for a forecast for the next three years,” Mr. Gatchalian added. — Janina C. Lim

Transport terminals required to provide free internet, ‘sanitary’ toilet facilities

PRESIDENT Rodrigo R. Duterte has signed a measure requiring transport terminals to provide free internet services and clean restrooms, officials said.

Mr. Duterte signed on April 17 Republic Act No. 11311, “An Act to Improve Land Transportation Terminals, Stations, Stops, Rest Areas and Roll-on/Roll-off Terminals.” The Palace released to reporters copies of the law on Wednesday.

Section 3 of the law requires “the Department of Information and Communications Technology (DICT), in coordination with the Department of Transportation (DoTr) and other concerned stakeholders, (to) ensure that free Internet is provided in transportation terminals, stations, stops, rest areas, and RO-RO terminals.”

It adds that the owner, operator, or administrator of land transport terminals, stations, stops, rest areas, and RO-RO terminals should provide clean sanitary facilities for passengers.

They should also “establish at least one lactation station which shall be separate from sanitary facilities.” — Arjay L. Balinbin

Labor secretary urges worker skill upgrades to head off inequality

LABOR Secretary Silvestre H. Bello III said Filipino workers must upgrade their skills in the face of technological disruption, warning that mismanaging the technology transition will widen inequality.

In a speech at the 108th International Labor Organization (ILO) Conference, Mr. Bello said: “(W)e want to ensure that no one is left behind and no one is displaced from their respective jobs.”

“The collective efforts to… ensure the dignity of labor against the backdrop of technological advances have never been more urgent than today,” he added.

He said automation and other technologies threaten those jobs which can be done better and more cost-efficiently by machine.

“The main task at hand right now is to craft specific policy responses that affirm our human incomparability and assert the import of tripartism and social dialogue,” he said.

In order to help employees face automation challenges, Mr. Bello urged them to pursue “upskilling, reskilling, and retooling.” While automation can open up new employment opportunities, he warned that the transition should be managed cautiously to minimize risks to the work force.

“Automation in the world represents good opportunities but it can also, if not properly managed, cause social inequality and poverty,” Mr. Bello said. — Gillian M. Cortez

PSA projects 6.5% decline in 2nd quarter palay output

THE Philippine Statistics Authority (PSA) said it estimates a 6.5% year-on-year decline in output of palay, or unmilled rice, in the second quarter, to 3.83 million metric tons (MMT), due to the continuing impact of El Niño.

As of May 1, the probable palay production estimate for the quarter was expected to be lower than the 4.09 MMT a year earlier.

Corn production was projected to decline to 1.15 MMT, down 10.2% from a year earlier.

In its last update on April, the Department of Agriculture (DA) said lost agricultural production was P7.96 billion due to El Niño.

Lost palay production was about 0.96% of the 20 MMT target production for the year, while corn losses were 2.94% of the 8.64 MMT target.

The DA has requested the importation of 300,000 MT of corn in response to the dry spell. The DA has also requested funds to expand the production of corn and sorghum by 100,000 hectares each.

Despite the estimate of falling production, palay prices are continuing to fall, pressured by expectations of more liberal imports of foreign rice under the Rice Tariffication Law.

The average farmgate price of palay fell 0.8% week-on-week during the first week of June to P18.00 per kilogram (kg), the PSA said in a separate statement.

The PSA said the average wholesale price of well-milled rice fell 0.1% week-on-week to P39.42. At retail, it was steady at P43.10 per kg.

The average price of regular-milled rice fell at wholesale by 0.5% week-on-week to P35.54. At retail, the price fell 0.1% to P38.72.

The farmgate price of yellow corn grain rose 0.3% week-on-week to P14.01 per kg. The average wholesale and retail and prices were both unchanged at P18.43 and P23.96, respectively.

The average farmgate price of white corn grain rose 1% week-on-week to P16.27. The average wholesale price was unchanged at P22.41, as was the average retail price at P29.12. — Vincent Mariel P. Galang

From foundation to innovation

Data is very much in the spotlight in today’s business environment. We se it in how organizations are moving towards automating their data-related processes in order to minimize their output error rate, reduce the cost of data remediation, and maximize insights. There has also been a surge in the demand for data professionals such as data scientists and engineers to better analyze unstructured pieces of data and turn them into valuable information (e.g., reliable trends, forecasts and projections).

Data’s celebrity status, however, brings its own share of risks. Issues such as data privacy breaches, inaccurate reporting and the unmanageable volume of data have caused big hits to organizations across the globe. One may wonder — what are organizations doing to address such risks? While organizations institute controls to minimize these risks, a lot of them (from what I’ve observed) set their sights and focus their efforts and resources on famous technologies and tools for data analytics, robotic process automation and artificial intelligence/machine learning.

Although there are endless possibilities as to how far our data tools and technologies can take us, nothing useful and reliable can come out of them if we do not have quality data. Are organizations really putting their efforts and priorities in the right order? Are they able to address the core issues concerning their data or are they just going with the trend?

There are no right or wrong answers, but one thing is clear: data will continuously reshape the business and economic landscape. As such, organizations must take steps to ensure that “data” is accurate, complete, consistent, timely and uniformly defined by the stakeholders, who in turn should have the proper mindset so as not to be “consumed/governed” by the data.

Taking the necessary steps does not require organizations to run before they have learned how to walk. Before organizations can start to run and take the big leap, strengthening their foundations is crucial if they are to achieve the targeted benefits. Accordingly, data governance would allow organizations to view data innovations holistically from both a control and growth perspective.

The journey towards data innovation requires a proper survey of current capabilities and state, against a benchmark or aspired state. Organizational awareness of data governance maturity level is necessary in leveraging strengths and addressing weaknesses. A comprehensive maturity assessment will help to increase organizational awareness on how it performs against the critical components of data governance.

The maturity assessment requires an organization to answer significant questions. Are policies, processes, and standards in place to support a data-driven culture? Is the data architecture capable of specifying the ‘golden source of truth’? Is data quality measured through defined metrics where data can be described as accurate, complete, timely and adaptable? How are tools, technology, and methodology aligned with the overall data strategy to support organizational growth? These are just some among the list of many questions looking at the components of data governance. Determining the answers to these questions before diving into big technological investments and hiring data specialists will help in addressing the right requirements and maximizing the benefits of data to the entire organization.

Depending on the results of the data governance maturity assessment, organizations should then prepare a Roadmap defining the necessary steps to address the noted gaps while leveraging the strengths. The roadmap serves as the plan that defines the business case, strategic direction and scope as agreed with data stakeholders. Once this roadmap is approved by senior management and the board, organizations can proceed to the design of the organization’s data governance framework. Details of the data governance components are crafted in more detail: roles and responsibilities, and organization, policies and processes, change management and data culture, data architecture, data quality and metrics, and tools technology and methodology. The design will also show how data looks like for the organization, how it will flow and be used and, more importantly, how the data governance transformation will affect the organization’s overall financial and human investments.

One of the key challenges in the data governance transformation journey is cost. Managing the trade-off between what’s best and what’s cost-effective is nothing new. As the best solutions usually require commensurate investments, organizations should budget time and resources to ensure that the data governance transformation roadmap and design will sail towards the expected direction that will ultimately be beneficial to the entire organization.

Roadmaps and designs are merely dreams if not implemented. For these dreams to translate into reality, an organization must commit its time, resources and executive sponsorship in the Implementation phase. Knowing how to do it and actually doing it are two different things. One’s confidence in the theories and prototypes at hand will only be enhanced once these are implemented and put to practical test.

Implementation will vary across organizations as data governance transformation roadmaps depend on their respective maturity levels. Despite these variations, successful implementations require board and executive support to oversee and direct the data governance journey. To enable the board and senior management carry out their respective roles, we have seen organizations appoint a Chief Data Officer and establish a data management office to drive the transformation. They also ensure that the organizational efforts from various stakeholders are aligned with the organization’s data governance strategy.

Does data governance end in implementation? Definitely not. It’s a cycle requiring continuous improvement to ensure its effectiveness and adaptability to the organizational context. Sound data governance is self-aware, dynamic and improving: capable of knowing when to change and adapt to a progressing organization with evolving data requirements.

From changing your mindset to “us governing the data” to knowing the “data governance with control and growth perspective,” now is the time to start your data governance journey: assess your data governance maturity, develop your roadmap, design and implement your data governance framework.

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

 

Aya Zelline L. Gevaña is a senior associate with the Risk Consulting practice of PricewaterhouseCoopers Consulting Services Philippines Co. Ltd., a Philippine member firm of the PwC network.

+63 (2) 845-2728

aya.zelline.gevana@pwc.com

Yellow Box and counterflow

A report, citing records from the Land Transportation Office (LTO), noted that in 2017, the top traffic violations nationwide were the following: Not wearing seatbelt; Failure to wear helmet; No OR/CR on hand; Driving without license; Unregistered/invalid motor vehicle registration; Reckless driving; Obstruction; No spare tire; Axle overloading; Student driver operation motor vehicle without accompanying licensed driver.

In another report, citing figures from the Metro Manila Development Authority (MMDA), covering 2016, the top traffic violations in Metro Manila were the following: Disregarding traffic signs; Obstruction; Unified vehicle volume reduction program; Illegal parking; Stalled vehicle; Loading/unloading in prohibited zone; Truck ban; Reckless driving; and, Motorcycle lane policy.

What I would like to see on these lists in the future, however, are two of what I consider the most annoying infractions that I have observed during daily drives: counterflowing, particularly by motorcycles and bicycles; and failure to keep out of the Yellow Box. I consider these two violations to have a greater negative impact on traffic flow than violations like not wearing a seatbelt or disregarding traffic signs.

My concern, however, is that there seems to be little will or motivation anywhere in Metro Manila for traffic enforcers to strictly implement rules against counterflow or obstructing intersections. And judging from the top 10 lists of LTO and MMDA, this appears to be the case. Despite the fact that these two violations appear to be rampant, daily occurrences. Why?

Counterflowing, I believe, is among the most dangerous infractions an erring motorist can commit. It can easily result in a collision, and, in extreme cases, injury and death. Oncoming traffic is also likely to halt, if not swerve, to avoid a counterflowing vehicle, which can easily result in accidents. Even pedestrians are at great risk from counterflowing traffic.

Yellow Box violations, meanwhile, cause gridlocks and tend to slow if not halt traffic flow. It causes long chain reactions that eventually screw up automated traffic systems. And the damage resulting from box obstructions tend to be difficult to untangle, and will normally require manual intervention by traffic enforcers. Yellow Box violations tend to involve multiple lane obstructions.

Traffic enforcement also appears to be more tolerant of Yellow Box obstructions and counterflowing, particularly from two-wheeled vehicles, during rush hour and heavy traffic situations. But isn’t it precisely during these situations that motorists should be more conscious or rules and more compliant, and that traffic enforcers should be less forgiving?

It has been reported often enough that Metro Manila loses billions of pesos daily in relation to productivity and economic output because of the countless hours spent in traffic gridlocks and considerable delays in the movement of people and goods because of traffic. But, in turn, how much has Metro Manila spent to fix the problem?

PHILIPPINE STAR/MICHAEL VARCAS

In short, are we putting in enough resources to resolve the problem? Excluding the cost of roads and bridges, how much are we spending on traffic management and administration if only to minimize or mitigate economic losses resulting from traffic congestion? If we spend more time and resources going after “seatbelt” violations, how is this helping improve traffic flow?

If we lack resources to further improve traffic management and administration, perhaps with the use of technology, then perhaps we should consider the possibility of “profiting” from the violations? Maybe all traffic penalties and fines collected by MMDA and local government units should be earmarked primarily for technical interventions to improve traffic management.

I have yet to find data to show how much LTO, MMDA, and local government units collect from traffic penalties and fines as well as parking fees. But I am certain that a concerted effort to “collect” particularly from Yellow Box violations and counterflows will yield a significant amount of funds for traffic management.

It’s economics. I believe the costs related to enforcement and apprehension will be far exceeded by the fines to be collected, judging from daily traffic gridlocks. No-contact apprehension can work effectively in this case — all a matter of strategically mounting cameras in key intersections and over lanes where counterflowing are prevalent.

Enforcement will be crucial here. In fact, Yellow Box and counterflow violations are fairly straightforward. If by the time the light turns red the camera shows you are still in the box, then that’s a violation. Or, if you are seen on camera to be on the lane of oncoming traffic, even during a failed attempt to overtake, then you are in violation. Apprehension plus ticket equals fine. All sent by mail.

The problem is, there seems to be little effort to apprehend. Local governments should review their local ordinances versus Yellow Box violations and counterflowing. They should consider investing in no-contact apprehension systems, and channeling more resources to camera-based or technology-based enforcement. A fine of P500 per violation will be a good starting point.

They should learn from the experience of Transport for London, the local government agency responsible for the transport system in Greater London. The agency was reported to have issued in 2015 about £6.5 million worth of penalty charge notices (PCN) for infringements in its box junctions. That’s equivalent to about P423 million in just one year, from Yellow Box violations alone.

Then there are reports that a single Yellow Box junction camera in London’s Fulham made over £12 million in fines over the last seven years. That’s roughly an average of 112 million yearly for just one Yellow Box camera. One can only wonder how much was initially spent to put up that camera, and how much is spent to operate it yearly. But I am sure, Fulham has been earning from it.

 

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

matort@yahoo.com

MORE investment liberalization needed

Four reports in BusinessWorld last week seem to show a confusing investment environment of the Philippines:

1. “Foreign direct investments fall in March” (June 11).

2. “Investment pledges climb 40% in January-May” (June 12).

3. “Reforms eyed to boost FDI inflows” (June 13).

4. “Foreign funds to continue fleeing PHL stock market” (June 13).

So actual foreign direct investment (FDI) in early 2019 has fallen while pledges of FDIs at the Board of Investments (BoI) were up.

I checked the United Nations Conference on Trade and Development (UNCTAD) World Investment Report (WIR) 2019 to see trends in FDI inflows. The following trends are emerging over the past five years: (a) Global FDIs are declining; (b) FDIs in China, HK, and Singapore are flatlining; (c) FDIs in Vietnam, Thailand, Taiwan, Myanmar, Cambodia, Laos are rising; (d) FDIs in the Philippines are up-and-down (see table).

Japan, S. Korea, and Taiwan are sources or origins of FDIs, not destinations of FDIs. The Philippines is still far from becoming a net exporter of FDI.

During the UP School of Economics Alumni Association (UPSEAA) lecture held on June 14 at the Ark by UnionBank, InLife building, on Ayala Avenue, the lone speaker was Department of Trade and Industry (DTI) Secretary Ramon Lopez, himself a fellow alumnus. Sec. Lopez mentioned that among the promising areas for FDIs and top 12 investment priorities in the Philippines is the shipbuilding and ship repair (SBSR) sub-sector. His data showed that we are currently the 5th largest ship producer in the world based on gross tons, with nearly 2 million tons built in 2017. There are also 119 shipyards nationwide. As a regular passenger of roll-on roll-off (RoRo) boats in my annual local travels to Mindoro and Panay, Negros islands, this is good news to me. More big and modern boats, more competing shipping lines, more options for passengers.

Sec. Lopez also mentioned on several occasions the need to liberalize the Public Service Act (PSA), amend the Foreign Investments Act (FIA), and Foreign Investment Negative List (FINL) to further attract more FDIs into the country. True, the transportation sector (land, sea, and air) should be opened up to more foreign capital.

Another report in BusinessWorld titled “Japanese businesses cite martial law, lack of direct flights as main Mindanao issues” (June 13) corroborates this necessity. Some Japanese investors want to develop a flower farm in Mindanao and transport the flowers, some of which are “very expensive,” to Japan but there are not enough airlines that serve this route.

The market-oriented reforms for efficiency (MORE) that the incoming Congress this July should prioritize are PSA, FIA, and FINL liberalization and related measures. These will greatly help address the investment gap, which will create more jobs and expand more choices in services for passengers and consumers.

 

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

minimalgovernment@gmail.com

Quezon’s quest

Earlier this year, I had the privilege of visiting Israel. Through our pastor’s teachings and our tour, I learned how President Manuel L. Quezon accepted about 1,300 Jews facing persecution in Germany and Austria. The lesson became more real to me when we visited the Yad Vashem Holocaust History Museum, Israel’s official memorial to the Holocaust victims.

The museum aims to preserve the memory of the dead and to honor both Jews who fought against their Nazi oppressors and Gentiles who selflessly aided Jews in need. And most gratifyingly, the Philippines was one of the few nations that did this.

I culled the following facts from various news sources:

In 1938, German Chancellor Adolf Hitler sent to concentration camps thousands of Jews, who would be released only if they agreed to leave Nazi territory. In 1940, persecution across Europe started, with camps being created for Jews to die in. More and more Polish Jews were relocated to ghettos. In 1941, commanders were ordered to systematically murder the Jews of Europe. More Jews were murdered in 1942 than in any other year of the Holocaust, the majority in the new camps.

Fearing for their lives, Jews in Germany and other parts of Europe appealed to the world for asylum.

US President Franklin Roosevelt believed that the refugees threatened national security. In 1939, he refused asylum to the 937 German Jew passengers of the SS St. Louis after Cuba refused their entry. Cuban President Federico Laredo Brú feared that the immigrants would compete for jobs with Cubans during the Great Depression. The US excuse was the country’s yearly immigration quota. Eventually, Belgium, France, Holland, and the UK agreed to take the refugees.

Upon learning of their plight, Quezon announced that Jews were welcome to stay in the Philippines. He could do this because as a commonwealth, the Philippines could set its own immigration policies. Despite his opponents’ criticism that Jews were “‘communists and schemers’ bent on ‘controlling the world’,” Quezon worked hard with American High Commissioner Paul McNutt, Colonel Dwight Eisenhower, and the Frieder brothers — Alex, Philip, Herbert, and Morris — to admit Jewish professionals, such as doctors, engineers, and accountants, who would benefit the Philippine economy (“A Filipino-American Effort to Harbor Jews Is Honored.” The New York Times, Feb. 14, 2005). They needed to do this because as a commonwealth, the Philippines could not accept people who would need public assistance.

Quezon offered 10,000 visas and his Marikina property to the Jews. He also allotted a farm and a large settlement area in Mindanao. Unfortunately, the Japanese invasion stopped the rescue plans; only about 1,300 Jews reached the Philippines.

According to Lee Blumenthal, executive director of the Jewish Association of the Philippines, the Philippines was “the only country in the world that went out to save Jews that were not their own” (“How Jews secretly found a home in the Philippines.” CNN Philippines Life, June 10, 2019). Says presidential daughter Zenaida Quezon Avanceña: “…I know that dad had the moral courage to do it because he believed in the sanctity of human life, and the right of people to live as they believed they should” (“Jews honor Manuel L. Quezon on his 134th birthday.” Philippine Daily Inquirer, August 19, 2012).

According to Commonwealth historian Sharon Delmendo, Quezon empathized with the Jews because “As the Filipinos were recipients of racial discrimination and bigotry on the part of many Americans at that time, the Jews were similarly recipients of bigotry by the Nazis.” (as quoted in “Why President Manuel Quezon Sheltered Jewish Refugees in the Philippines in 1939.” Esquire Philippines, May 9, 2019).

Those of us who are of Judeo-Christian faith believe that God has chosen the Jews as His special people. Thus, David exhorts us in Psalm 122:6: “Pray for peace in Jerusalem. May all who love this city prosper.”

I am sure Quezon was not thinking of the Psalm’s promised prosperity when he accepted the Jewish refugees. In fact, we don’t know how familiar he was with the Bible. Quezon’s rationale was simple: the Philippines “could not turn a deaf ear to the sufferings of these unfortunate people. The Philippine Commonwealth, founded as it is upon justice and righteousness and the preservation of essential human liberties, could not but view with sympathy the opportunity to do its share in meeting the situation.” Quezon, in his February 15, 1939, statement on the Jewish Settlement in Mindanao, expressed in a nutshell what would become the Universal Declaration of Human Rights in December 1948, four years after his death.

But Israel, which became a state in May 1948, has since reciprocated our kindness. (The Philippines was the only Asian nation to vote in favor of its statehood.) Since 1969, Filipinos have been able to enter Israel, a First World nation, visa-free for up to 59 days. In 2009, Israel erected the Open Doors Monument at the Holocaust Memorial Park in Rishon Lezion to commemorate the Philippines’ generosity and friendship to Israel. In 2013 and 2014, Israel sent humanitarian and medical supplies and emergency response teams when the Philippines was devastated by Typhoons Haiyan and Ruby.

In April 1940, Quezon said, “It is my hope, and indeed my expectation, that the people of the Philippines will have in the future every reason to be glad that when the time of need came, their country was willing to extend a hand of welcome.”

Indeed, after having watched Quezon’s Game, I felt proud to be a Filipino, and proud that we once had a president who responded with solidarity and moral courage to the cries for help of those who were being oppressed and killed. May we — and other nations — have more presidents like Quezon.

 

Marissa C. Marasigan teaches Business Communication, Management Principles, and Lasallian Business Leadership, Ethics, and Corporate Social Responsibility in the undergraduate and MBA programs of De La Salle University.

marissa.marasigan@dlsu.edu.ph

Lessening choices by default

GADGETS, with their “planned obsolescence,” promote the impulse to have the latest model with ever more features, including features for clearer selfies. This promotes an almost Freudian “phone envy,” arising from a feeling of missing out on the latest phone. (How big is yours?) Gadget series numbers become status symbols. However, declining sales of new versions coming less than a year apart show a waning appetite for upgrades, or a longer embrace of the status quo.

Can the proliferation of options and features as well as over half a million possible apps overwhelm the consumer? Will the digital illiterate buy a product that makes him feel as intelligent as a ketchup stain?

One way to address the overload of options is to offer the frequently used functions as “default options.” These features are deemed to be what the simpleton will use. Rather than forcing the consumer to go through a thicket of decisions and options, a small set of features are bundled into a default option displayed on the first screen.

This default approach to multiplying choices is also promoted by the combo meals of fast-food chains. The five combinations are numbered, laid out, and accompanied with pictures. This moves the line of customers faster, having only to choose among a few default packages rather than meditating on the infinite combinations of chicken thighs, drinks, noodles, soups, sauces, potato states, and spiciness levels.

Unused features drive up a gadget’s price and profit margin. This mismatch of purpose and cost does not seem to deter purchase by even those who readily admit that they just use their phones to send text messages, make and receive calls, store contact numbers, surf the ’net for news, and check stock prices.

What about asking Siri for the weather forecast or the nearest ATM, using Google Maps to navigate to a restaurant, or demanding a FaceTime call to check the real whereabouts of an untrustworthy mate — she’s in a room with red curtains and many mirrors (we’re teleconferencing, Hon). These features, like jealousy, are seldom activated.

Apps need to be related to what needs to be done. Should they include items needed for an emergency and disaster preparedness? Is a fire extinguisher unused in the last 10 years to be discarded as unused capacity? Here, the default option is to flee the burning building rather than put out the fire by breaking the glass where the extinguisher is stored and only then finding out it no longer works.

Downsizing companies identify the core skills needed to run the business and anything outside that definition is deemed dispensable. Thus, early retirement descends like a plague on people with no longer usable skills. Their precious contacts have all retired.

Job descriptions are the default options. The skills needed only cover routine tasks like signing checks, attending meetings, holding the hand of clients, and delivering the revenue numbers. Not factored into this default setting are such attributes as a sense of perspective, loyalty to the company, strategic thinking, the ability to build consensus, or the willingness to go the extra mile at crunch time — What? There’s an earthquake?

A factoid, which is difficult to believe, holds that we only use 10% of our brain and leave the remaining 90% as unused capacity. This default approach is the premise for the movie Lucy, starring Scarlett Johansson as the title character. The unutilized portions in Lucy’s case unleashed by a chemical reaction include the ability to absorb neurological studies and drive fast through the streets of Paris in a few seconds. This premise of limited usage of the brain’s full capacity has been upended by recent studies tracking electric pulses. It seems that we do use all of our brain capacity, only not simultaneously, and not in the same degree.

Default options make gadgets and services more user-friendly. This simplified approach also applies to relationships. The default options for handling disagreements and squabbles are established by a long relationship. They prevent things from getting out of control and resulting in slammed doors and noisy goodbyes. A default mode of changing the topic or just declaring a verbal truce can work — would you please pass the salad dressing, Dear?

Still, lessening choices does not always work. Having only eight candidates for 12 openings seems to accommodate other commitments, and even lends itself to a catchy slogan. However, the default mode, in this case, turned into a zero option.

 

Tony Samson is Chairman and CEO, TOUCH xda.

ar.samson@yahoo.com

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