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How Nestlé is getting Valenzuela residents to collect used sachets, beverage cartons

IN LINE with its vision to reduce waste that end up in landfills, the Nestlé Philippines last week launched its first city-specific waste sachets and used beverage carton recovery program called May Balik! Sa Plastik! in Valenzuela City.

“It is a partnership where both parties found each other and we are very privileged to be a partner of the city of Valenzuela and we are confident that this will also be a project that could be an example for many other cities in the future,” Kais Marzouki, chairman and chief executive officer (CEO) of Nestle Philippines, told reporters.

Valenzuela City is a first-class highly urbanized city in Metro Manila. It has 33 barangays, and a total land area of 4,459 hectares. Of the waste collected in the city, 38% are residuals, of which 20% are sachets, while about 38% of the total waste are recyclables, which include cartons, plastics bottles.

This program aims to decrease the amount of waste laminates and used beverage cartons in the city landfill, and transfer station by sorting and collecting them for recycling or upcycling, or co-processing in cement kilns.

Nestlé partnered with Green Antz Builders, Inc. to use the waste materials in the production of eco-bricks, and with Republic Cement to co-process post-consumer waste in the latter’s cement kilns.

“Kami po sa Green Antz ang gagawin namin itong mga sachet at iba pang residual waste na makukuha natin galing sa programa ay gagawin po nating Green Antz eco-bricks na pwedeng gawing bahay, eskwelahan at iba pang istraktura [We at Green Antz, we will use the sachets and other residual waste that will be collected from the program to make eco-bricks that can be used to build houses, schools, and other structures],” Rommel B. Benig, founder and CEO of Green Antz, said during the launch.

Lourdes G. Ng, information education campaign (IEC) supervisor for solid waste management division of Valenzuela City, told BusinessWorld that the program will reduce the city’s waste by as much as 40%.

Mr. Marzouki said that the company will first focus on the program’s implementation in Valenzuela City before expanding to other cities in the Philippines.

“The City of Valenzuela is the first city we are partnering with. At this stage, we would like to focus only on this program as we take the learning and improve the program and fine tune it. Once we think it is ready to be rolled out, then we can identify other cities we would want to partner with,” he said.

For the collection program, there are two types of incentives. For public school students who will be able to bring 30 pieces of sachets or five pieces of used beverage cartons, they will be eligible to receive one raffle coupon for a weekly raffle to be held in all public schools, where winners will be receiving gift certificates. For street sweepers, they will receive Nestlé products.

Moreover, the top three schools with the most collections will receive emergency lifeline kits and a chance to have a structure to be built using eco-bricks. — Vincent Mariel P. Galang

Holds up well at age 7

Sniper Elite V2 Remastered
Nintendo Switch

CONSIDERING the significant interest generated by Sniper Elite V2 on the Nintendo Wii U and the lack of tactical shooters on the console’s successor, it was no surprise to find Rebellion Developments bringing the game’s remastered iteration to the Switch. Perhaps it would have done so regardless of circumstance; after all, the reboot-cum-sequel of 2005’s Sniper Elite remains the most popular title in the series. Announced in 2011, it was slated for release only on the Microsoft Xbox 360 and the Sony PlayStation 3. However, clamor from quarters seemingly left out by the limited offering led the developer to look beyond its partnership with 505 Games and publish by itself a version for the personal computer soon after.

In any case, Sniper Elite V2 Remastered is a welcome addition to the Switch library. The plot stays the same: Gamers experience events from the vantage point of Karl Fairburne, an agent of the United States Office of Strategic Services posing as a sniper for Nazi Germany at the close of World War II. Tasked with tracking down and aiming to turn scientists involved in the making of the Vergeltungswaffe 2 rocket, his situation requires no small measure of stealth. That said, he invariably runs into, and afoul of, Axis soldiers, during which time his skills as a marksman are put to the test.

Parenthetically, Sniper Elite V2 Remastered provides outstanding gameplay within the parameters set for Fairburne. He ventures to avoid direct confrontation with the enemy and, in the process, uses all means necessary to move from installation to installation and claim high ground. Through his missions, he has a variety of munitions at his disposal, submachine guns, pistols, grenades, and land mines included. Needless to say, though, the sniper is his most frequently used weapon, and, to its credit, the game makes a not inconsiderable effort to inject realism in this regard.

Certainly, the mechanics employed by Sniper Elite V2 Remastered are an ideal fit for the Switch. The way the controls are mapped takes some getting used to, but it does contribute heavily to the game’s simulation predilections. It’s far from a point-and-shoot affair. To the contrary, it takes ballistics into consideration; the posture and position of Fairburne as he pulls the trigger, the caliber and characteristics of the bullet once fired, and the manner in which wind velocity and direction provide resistance or assistance are all crucial to success or failure in the moment.

In terms of presentation, Sniper Elite V2 Remastered likewise pulls out all the stops. For a dated game, it looks excellent on the Switch. In particular, its “X-Ray Kill Cam” feature — which boasts of a slow-motion perspective of the bullet’s trajectory as it hits its target and the ensuing damage caused to body parts — retains its graphical capacity to shock and awe. Never mind that the port on the hybrid console lacks support for high-dynamic-range imaging support and runs at lower frame rates vis-a-vis the Xbox One and PlayStation 4 counterparts. Even when enjoyed undocked, it doesn’t suffer from visual hiccups or stuttering.

To be sure, Sniper Elite V2 Remastered does have its demerits. Its soundtrack is serviceable at best, and bugs will occasionally pop up and require reboots. Nonetheless, the pros far outweigh the cons; those fortunate enough to have played it on a previous-generation platform will most definitely appreciate the vast visual improvements. And while the need to go through frequent bouts of long-range sniping gives rise to the notion that screen size matters, the first-rate interface makes for outstanding on-the-go gaming. Among other things, the zoom option takes care of the theoretical problem of gamers zeroing in on a target while focused on the Switch’s 6.2-inch display.

In sum, Sniper Elite V2 Remastered sets gamers up for at least 10 hours’ worth of single-player campaign goodness. The operative phase is “at least,” what with the inclusion of all downloadable content and the challenge of completing collectibles raising the replay value. Moreover, its online multiplayer support underscores cooperative play through a handful of game modes. Simply put, it holds up extremely well even at seven years old, and serves to justify its $39.99 price tag.

THE GOOD:

• Unique gameplay features

• Graphically improved vis-a-vis previous iterations

• Lends well to gaming on the go

• All downloadable content included

• Fair number of multiplayer options

THE BAD:

• Occasional glitches require reboots

• Focus on tactics and stealth can turn off the impatient

• Soundtrack is serviceable at best

RATING: 8/10

POSTSCRIPT: Square Enix didn’t wait until E3 2019 to announce what longtime gamers have been anticipating for a while: Final Fantasy VII, one of the most beloved titles in the franchise, will be remade and released on the PS4 early next year. The new iteration will be a reimagining of the narrative and interface that redefined the role-playing game genre. In the city of Midgar, a group dedicated to fighting the injustices of the Shinra Electric Power Company as it controls the world’s life force decides to firm up its resistance. In the process, it draws the support of Cloud Strife, a former member of Shinra’s elite military arm turned rebel for hire. March 2020 can’t come soon enough.

How PSEi member stocks performed — June 17, 2019

Here’s a quick glance at how PSEi stocks fared on Monday, June 17, 2019.

 

EO retains 5% tariff on deboned poultry meat to keep prices low

PRESIDENT Rodrigo R. Duterte has signed an executive order retaining the 5% import tariff on mechanically deboned meat (MDM) from poultry until 2020 to mitigate the possible impact on prices.

The President signed on June 13 Executive Order no. 82: “Modifying the Nomenclature and Rates of Import Duty on Certain Agricultural Products Under Section 1611 of Republic Act No. 10863, Otherwise Known as the Customs Modernization and Tariff Act.” The Palace released copies of the EO on Monday morning.

The EO states that the “present economic condition warrants the continued application of the reduced rate of duties on certain agricultural products to mitigate the impact of high prices of goods.”

The issuance of the EO was on the recommendation of the National Economic and Development Authority (NEDA) Board, which backed the “maintenance of the tariff rates under EO No. 23 for mechanically deboned meat of chicken and turkey, and turkey meat and offal.”

Meat processors have been awaiting the EO to reverse the recent imposition of a 40% MDM tariff at the borders, which is a return to the 2012 rate. The industry has been operating under the 5% rate for nearly a decade.

The 40% duty was the rate for MDM before the Philippines offered concessions in connection with a second extension on quantitative restrictions on rice imports.

Under the concession, the MDM of trading partners will enjoy entry into the country at a 5% tariff but will revert to the 2012 rate once a law lifting import limits on rice is in place.

The rice tariffication law took effect on March 5.

The EO was in response to the decision of the interagency Committee on Tariff and Related Matters which, on the request for an evaluation by meat processors, decided to retain the 5% tariff on MDM chicken, seeing no direct competition with the domestic poultry industry.

The Philippine Association of Meat Processors, Inc. (PAMPI) said in a statement emailed to reporters on Monday afternoon that the President’s signing of the EO reflects his administration’s “determined efforts to spur the growth of the local manufacturing industry.”

The group added that Mr. Duterte’s action “sends a strong signal to local and foreign investors that the investment climate in the Philippines is fair, attractive and competitive.”

PAMPI Spokesperson Rex E. Agarrado told BusinessWorld via phone that this EO will have no impact on the price of poultry MDM.

“When [they] raised the duty from 5% to 40%, we did not raise our prices. Therefore, because we did not raise our prices from 5% to 40%, sana (I hope) you would understand (if prices do not move)… kasi noong tinaas ‘yon ‘di nga kami nag-adjust (because when the tariffs rose we did not adjust prices)…”

“I think what you should focus on is why the price of chicken and the price of pork today are so high?,” he added. “‘Yun ang question eh (that is the question)… Alam mo ba ang (do you know the price of) pork and chicken today? They are so high. Highest ever,” he said.

He added: “Please don’t expect us to drop prices because when you asked us to pay P400,000 per container, additional, we did not raise our prices, so tama lang siguro na i-stay namin (so it’s only fair to hold prices steady).”

Also asked to comment, Meat Importers and Traders Association, Inc. (MITA) President Jesus C. Cham said in by phone: “It’s a welcome albeit much delayed order which will help keep food inflation in check. However, we would have preferred that reduction be made permanent.”

He also said, “Should the processors now petition TC (Tariff Commission) to maintain 5% duty for 2021-2025? Or should producers petition otherwise? I hear that NEDA will review next year (on a) trajectory to bring (the tariff) back to 40% gradually unless there are new petitions. So it is a short-lived victory for processors and consumers. That’s not good.”

“We still have an outstanding problem about the Bureau of Customs (BoC) collecting 35% retroactively from March 5 until June 13. We hope NEDA will grant our appeal for BoC not to do so,” he continued. — Arjay L. Balinbin with Vincent Mariel P. Galang

Davao Investment Conference to focus on creating new economic zones

DAVAO CITY — The city will focus on forming special economic zones during the two-day Davao Investment Conference here starting Thursday.

Arturo M. Milan, president of the organizing Davao City Chamber of Commerce, said that prospective investors, particularly foreigners, have been asking for more such zones.

“We need more special economic zones that are ready to become locations of new investments especially in manufacturing,” Mr. Milan told BusinessWorld.

Christian D. Cambaya, the head of the Davao City Investment Promotion Center’s Investor Assistance and Servicing Unit, has said his office has received proposals for the establishments of special economic zones.

“However, the proponents have not yet pursued their plans,” Mr. Cambaya said, noting that they “may have been waiting both for the right time as well as investors that are going to locate in their areas.”

During the event, Ricardo F. Lagdameo, Damosa Land Inc. (DLI) vice-president, will present opportunities for foreign companies to locate in economic zones in Mindanao, including the company’s Anflo Industrial Estate (AIE).

AIE has attracted locators from Japan, the US, China and the Netherlands after promoting its special economic zone and the rest of Mindanao to domestic and foreign investors.

At the same event two years ago, Mr. Lagdameo also made a similar pitch which highlighted Philippine Economic Zone Authority-accredited special economic zones in Mindanao, including the AIE.

The company said the presentation indicates the company’s commitment to promote Mindanao so investors will realize its potential.

Expected to attend the event are a 40-member Japanese delegation hosted by the Japanese Chamber of Commerce of Mindanao.

A Japanese company, Packwell Inc., which makes paper containers, said it plans to join the event. The company has also signed an agreement with DLI to locate at AIE.

The organizers also said that a Chinese delegation will participate, including executives from the Alibaba Group. Also expected to participate are diplomats and investors from South Korea, Singapore, Malaysia, Austria, the Netherlands and Sweden.

The event is held every two years. This year, it will focus on investment opportunities in the Halal trade, tourism, infrastructure, real estate, and information technology and business process management. — Carmelito Q. Francisco

SSS rules for OFWs meeting stiff resistance

GROUPS representing Overseas Filipino Workers (OFWs) are seeking a suspension of premium hikes recently charged by the Social Security System (SSS) on overseas workers.

Blas F. Ople Policy Center and Training Institute (BOPC) President Susan Ople said the center considers the hike an additional burden on OFWs, who stand to be denied a key exit document, the Overseas Employment Certificate (OEC) if they do not pay their SSS premiums with the Philippines Overseas Employment Administration (POEA).

The hike was authorized by the Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 11199 or the “Social Security Act of 2018.” Under RA 11199, SSS coverage will be compulsory for OFWs.

“Any imposition of additional financial burdens would push our workers away from existing legal deployment channels and make them less competitive against their rivals,” said Ms. Ople in a statement on Monday.

The BOPC also opposes the IRR provision requiring OFWs who return for short stays to pay a minimum of three months’ SSS premiums, which are estimated to cost a minimum of P2,880.

The Philippine Association of Service Exporters Inc (PASEI) also expressed fears about the level of contribution imposed on OFWs, which will increase annually by 1.5% in the next five years.

PASEI said that payment of premiums should be voluntary “and not tied up to the issuance of the OEC because that in itself violates their rights.”

Maritime and manning agencies said the new SSS law will make manning agencies the employers of sea-based OFWs.

In a statement, the Joint Manning Group (JMG) on Monday said, “The law treats manning agencies as ‘employers’ of OFW seafarers when they are not. The real employers of the seafarers, following the law’s own definition, are the foreign shipowners.”

JMG added that it plans to elevate the issue before the Supreme Court. — Gillian M. Cortez

Finance department disputes IMD competitiveness study’s methodology

THE Department of Finance once more disputed the results of the International Institute of Management Development’s (IMD) world competitiveness rankings even as the Philippines’ score improved this year, saying that the study appears to have focused on “backward-looking” indicators.

The Philippines rose four places in the 2019 World Competitive Ranking conducted by the Swiss business school, placing 46th out of 63 countries surveyed, from last year’s 50th spot.

However, the country remained a laggard in the region, placing 13th of 14 economies surveyed in the Asia-Pacific, unchanged from its performance in 2018.

“The greater sin of this series of reports, however, is that methodologically it is backward-looking, much like trying to figure out which way to go next by looking at the rear view mirror,” the Finance department said in a statement on Monday, quoting its Chief Economist Gil S. Beltran.

He added the over 340 criteria used in the index to measure “different facets of competitiveness” are “at best indicators of past performance and may not be indicative of future performance.”

He cited IMD’s use of 2018 gross domestic product growth to measure their competitiveness this year.

“Thus, even if a country’s growth prospects are negative 8% for 2019 but if it was actually 8% in 2018, IMD would assign this country in question a high score for the 2019 report,” he said.

Mr. Beltran also noted the study penalizes countries with fiscal deficits, such as the Philippines, which is pursuing a program of infrastructure development to boost its competitiveness.

“IMD equates surpluses with competitiveness, so that the Philippines, because of its Build, Build, Build Program, is expected to incur deficits and, thus, be artificially rated as one which is losing in competitiveness,” Mr. Beltran said. “Ironically, infrastructure is intended to improve competitiveness.”

The government is pushing for comprehensive tax reform to simplify the tax regime and generate more revenue to support its infrastructure program and expand social services. It embarked on the “Build, Build, Build” program in an effort to boost economic growth to 7-8% until 2022.

Based on the 2019 study, the country’s ranking improved based on economic performance (38th), government efficiency (41st), business efficiency (32nd) and infrastructure (59th).

In an earlier email to BusinessWorld, IMD World Competitive Center Senior Economist Jose Caballero said the country needs to “strengthen all aspects of infrastructure,” particularly in the sub-sector of education. He also noted the development of human capital and risk of political instability remain as challenges.

The Finance department also disputed the same study in 2018, saying the findings were not backed by actual data.

“[T]he ratings methodology employed by IMD mechanically ranks cold numbers without understanding the dynamics of the economy. The result is that rankings tend to be volatile. Neither does it use benchmarks with which to gauge relative performance,” Mr. Beltran said in a May 2018 economic bulletin. — Karl Angelo N. Vidal

ASEAN urged fund health care to minimize out-of-pocket spending

THE EU-ASEAN Business Council (EU-ABC) recommended that ASEAN countries address the issue of funding health care, as the healthcare protection gap remains an issue in the region.

In its “Driving Comprehensive Healthcare Policy in ASEAN” report, EU-ABC said on Monday, “While households face a health protection gap, the rising costs in healthcare provision poses a material threat to the sustainability of the healthcare system for governments. As reflected in the large healthcare protection gap, healthcare is underfunded in ASEAN.”

The health protection gap refers to the healthcare costs paid out of pocket instead of health insurance.

Citing a study by Swiss Re Institute, a unit of the reinsurance group, the health protection gap is about 10% of the average household income in Southeast Asia. For the Philippines, the gap is 32%.

EU-ABC said that the price of healthcare has been rising, putting financial strain on the government. EU-ABC recommends that finance departments look into creating tax incentives which will encourage the growth of private health insurance.

“We also recommend ASEAN member states collaborate with the private sector to develop a robust, sustainable health funding system that workers for patients and other stakeholders,” EU-ABC added.

The council also noted the importance of collaboration in ensuring access to universal healthcare in the region.

The EU-ABC said governments in the region should “develop a region-wide set of regulations regarding Public-Private Partnerships for social infrastructure, especially related to the healthcare industry and to engage with the private sector in developing public-private health initiatives in order to deliver better health services to patients.” — Gillian M. Cortez

Weathering the storm of BIR assessments

“Rain, Rain, Go Away” is a nursery rhyme that children sing when they wish the rain to stop so they can go outside and play.

In 2018, the Philippine Atmospheric, Geophysical, and Astronomical Services Administration (PAGASA) recorded 20 typhoons entering the Philippine Area of Responsibility (PAR) that took a toll on the country’s economy, infrastructure, agriculture, and livelihood and that ruined many lives. As much as Filipinos want to prevent typhoons from entering the country, unfortunately, this is beyond anyone’s control.

Many taxpayers find themselves in a similar situation when receiving a Letter of Authority (LoA) issued by the Bureau of Internal (BIR) to conduct a tax audit or investigation. Even worse is receiving a second or third LoA covering different taxable years while the audit of one taxable year is ongoing. Hence, taxpayers often ask: “Why am I receiving another audit notice while another tax audit is still ongoing?,” “Is it common or legal to receive LoAs for three or more consecutive years?,” or “Is there a limit to the number of LoAs that the BIR can issue?” One typhoon can cause so much damage. Hence, seeing two or more brewing, even while the first has not completely left the country, can cause much apprehension.

Unfortunately, the answer is yes: a taxpayer can validly receive a LoA for more than three consecutive years. Taxpayers can actually receive more than one LoA in one taxable year.

A closer examination of the BIR’s authority to assess taxpayers could explain why taxpayers receive multiple LoAs.

In the Philippines, the self-assessment system is the method used to determine one’s amount of internal revenue tax owed to the government. As taxes are the lifeblood of any nation, there should be a way to check the correctness of the taxes remitted to the government; hence, the need for a tax audit. The BIR is authorized to assess taxpayers by Section 6 (A) of the National Internal Revenue Code of 1997, as amended.

To improve taxpayers’ voluntary compliance by encouraging the correct payment of internal revenue taxes through the exercise of the enforcement function of the Bureau, the BIR issued Revenue Memorandum Order (RMO) No. 19-2015, as amended by RMO No. 64-2016, to prescribe the policies, guidelines, and procedures to be observed in the audit or investigation of tax returns.

Generally, all taxpayers are possible candidates for audit. The RMO, nevertheless, provides guidance on who should be selected for audit or investigation, among them:

(1) Mandatory cases [i.e., claim for tax refund or issuance of tax credit certificate, requests for tax clearance in case of retirement or cessation and business combination, and unresolved Letter Notices (LNs);

(2) Priority cases (i.e., based on industry classification, noncompliant taxpayers, taxpayers enjoying incentives, etc.); and

(3) Other priority audits, as identified by the Regional Director (RD) and Assistant Commissioner, Large Taxpayers Service (ACIR-LTS).

In addition, the same RMO provides that it is permissible for a taxpayer who has been audited for the last two years to be selected again for audit on the current or third year, as long as the Regional Director or Assistant Commissioner who heads the investigating office approves it.

There are also instances when the company may receive two LoAs covering the same taxable year: (1) LoA under the Value-Added Tax (VAT) Audit Program and (2) LoA for regular audit. If the taxpayer received another LoA for a regular audit subsequent to a LoA for VAT audit, the former shall not include the VAT liability, even if the LoA issued under the VAT Audit Program is for a particular taxable quarter only.

If taxpayers are to digest the memorandum order above, it is as if there is no escaping from receiving an audit notice from the BIR. Taxpayers can hope and pray that they may be spared from new LoAs, but taxpayers also have the option to eliminate or at least minimize their tax exposure upon receiving one.

In the same manner that you prepare for the approaching storm, taxpayers should anticipate a BIR audit and plan out strategy, as follows:

1. Check for any holes and damage to your house for repair. As a taxpayer, on the other hand, you should regularly review your company’s overall compliance with the current rules and regulations and to amend tax returns, if necessary, prior to receiving a BIR audit notice;

2. Equip yourself to survive a storm, like knowing the nearest evacuation center and learning first aid. In the same vein, taxpayers should also educate themselves on the rights and options available to them when dealing with a BIR tax assessment; and

3. Extract the lessons from storm damage suffered despite all the precautions. As taxpayers, you should also note the issues raised during the assessment and plan for the improvement of current practices.

Taxpayers should always find a takeaway from a tax audit experience; it pays to be equipped with and updated on the all current rules and regulations and to be compliant with all the requirements. At the end the day, the taxes you pay are subject to a BIR audit. It is better that you currently report and pay your taxes correctly rather than wait for your company to be assessed, which can be more costly.

Another BIR audit storm could be brewing, but you are not as worried, because you know you have prepared.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Christian Derick D. Villafranca is a senior of Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

The Chinese Maritime Militia

I’m directing this column to our national and local leaders whose duty is to defend the country, protect the people, and secure our natural resources. There’s a need to adapt mindsets to a deteriorating security situation in the South China Sea — fueled by China’s spurious claims of “indisputable sovereignty” over this vital body of water — by thinking, speaking, and acting as one united leadership to confront the external and internal threats to our national security.

China’s “people’s war” has been applying its “cabbage strategy” utilizing three layers to occupy the SCS, and key features in the Exclusive Economic Zones (EEZs) of littoral nations, like the Philippines and Vietnam. It calls for surrounding a contested area with swarms of blue hulls (Chinese Maritime Militia, or CMM, masquerading as fishing vessels) backed up by white hulls (China Coast Guard [CCG]) and gray hulls (warships in the People’s Liberation Army Navy [PLAN]), such that the targeted area is essentially like a morsel wrapped in layers of cabbage.

The CMM is a subset of China’s national militia, an armed reserve force of civilians available for mobilization to perform basic support duties. Its coercive activities adhere to China’s broader military doctrine stating that “confrontational operations short of war can be an effective means of accomplishing political objectives.” It trains alongside the PLAN and CCG in military garb with rifles and bayonets. It’s based in Sansha City in the Paracels Islands and is equipped with purpose-built trawlers with reinforced hulls for ramming and sophisticated communications suites for spying. It is a fast response unit used to confront any threat to its imagined claims. (See the writings of Andrew S. Erickson, Professor of Strategy in the U.S. Naval War College’s China Maritime Studies Institute).

Commissar of the Hainan Armed Forces Department Xing Jincheng has been quoted as saying that the CMM is responsible for conducting “sovereignty operations” and defending China’s “ancestral seas” — defined as territorial waters belonging to China since ancient times — to ensure combat readiness for the purpose of denying intruders access to its occupied areas. In 2016, the Arbitral Tribunal ruled that its claim was spurious with no legal or historical basis.

For a long time, affected littoral states failed to comprehend the role of the CMM in China’s cabbage strategy. Their coast guards, navies, or fishery protection units find it difficult to judge whether they’re facing ordinary fishermen or the CMM. And so, they act with restraint avoiding force that might result in casualties, accusations of human rights abuses, and conflict escalation. China’s taken full advantage of our restraint by pushing the envelope while evading serious confrontations as it illegally occupies more maritime territory.

The US has finally realized that the CMM is a fighting force on the front-line of China’s quest to control the seas. It’s a weapon that has operated in the shadow of plausible deniability for years. The Pentagon says the CMM is a covert fleet of fishing trawlers engaged in “low-intensity” coercion in maritime disputes to wreak havoc in targeted areas. It’s state-organized, developed and controlled, operating under a direct military chain of command.

FREEPIK

The CMM harassed the USNS Impeccable in 2009; were involved in the 2011 sabotage of two Vietnamese hydrographic vessels, and the 2012 seizure of Scarborough Shoal; repelled Vietnamese vessels near a Chinese oil rig in disputed waters in 2014; and shadowed the USS Lassen during a freedom-of-navigation operation (FONOPS) in 2015. In 2016, hundreds of CMM vessels supported by CCG ships were also dispatched to the Senkaku Islands and engaged Japan’s CG in ramming duels.

The CMM has swarmed the area around Pagasa Island within its territorial limit of 12 nautical miles (22 kilometers). Hundreds were spotted over a period of six months this year. Because we lack the assets to confront, disrupt, and overcome, all we’ve been able to do is monitor and report their movements. One of China’s artificial island fortresses — Subi Reef — is just 26 kilometers away from Pagasa Island (or Thitu Island), home to about 100 civilians and soldiers.

Their creeping siege tactics have also been felt in other reefs and shoals: the regime of islands in the Kalayaan Island Group or KIG (Pagasa plus eight other features); Ayungin Shoal, where the BRP Sierra Madre is; Recto Bank, which is rich in natural resources; Mischief Reef, which was forcibly grabbed from us in 1994 and now has an exclusion security zone; and Panatag (or Bajo de Masinloc or Scarborough Shoal).

On June 9, a CMM vessel with hull number 42212 deliberately rammed a fishing boat from Mindoro in the Recto Bank area and ran away without lifting a finger to save them. Outraged Filipino citizens, local and national officials, and the military have condemned it as well as its brazenness to downplay the incident, deny the accusations and, worse, alter the narrative to make them appear innocent and blameless. Its hostile intent demands that we unite in condemning the crime; take diplomatic, information and legal action; and move for a multilateral security force to deter the CMM in the EEZs of victimized countries.

Because China uses a three-ring offensive to occupy, deny access and eventually conquer an area through its CMM, CCG, and PLAN, we too must apply a layered defense in the West Philippine Sea. First, the local governments should contribute to a common fund to build 200-foot steel-hulled fishing trawlers or acquire reconditioned ones from abroad — at least 100 vessels with armed maritime CAFGUs (Citizen Armed Force Geographical Units) aboard and placed under the Philippine Coast Guard’s operational control. Second, we need to acquire more interdiction vessels for our Coast Guard and Navy to back them up. Third, we need to invest more in a force mix of manned aircraft and unmanned sea-air attack drones.

China’s using means not covered by the Mutual Defense Treaty (MDT). Modern warfare, as redefined by China’s unrestricted war doctrine, includes unarmed means like cyber warfare and ramming to achieve desired outcomes. We must push for the amendment of the MDT to cover the gray areas and close the gaps. This is a litmus test for America’s declared resolve to keep the South China Sea free from the control of any one nation. It will test its “iron-clad agreement” with the Philippines to immediately respond to any armed attack to its military and other public vessels.

 

Rafael M. Alunan III served in the cabinet of President Corazon C. Aquino as Secretary of Tourism, and in the cabinet of President Fidel V. Ramos as Secretary of Interior and Local Government.

rmalunan@gmail.com

map@map.org.ph

http://map.org.ph

Solar para sa politika

Among the records of the outgoing Congress is the legislation of a cronyist bill, the Solar Para sa Bayan Corp. (SPSBC) franchise. It is so unpopular that perhaps all other power developers and generation companies (gencos), both conventional and renewable energy (RE), perhaps all private distribution utilities (DUs) and electric cooperatives (ECs) in the country have opposed it.

Among the questionable, cronyist provisions of HB 8179 are the following:

One, it originally wanted a nationwide franchise in electricity distribution for unserved and underserved areas, later limited to 16 provinces plus certain cities and municipalities of Batangas and Quezon, for a total of 18 provinces. No other franchised DUs or ECs have this privilege.

Two, there is nothing significant in its power generation but it has a franchise while all other gencos including other RE developers do not have a franchise. SPSBC claims it is competitive yet it requires a Congressional franchise and a franchise by nature is a monopoly, anti-competitive.

Three, the Electric Power Industry Reform Act (EPIRA) of 2001 unbundled energy players into transmission, generation, distribution, and supply companies; SPSBC is a generation, distribution, and supply company rolled into one.

Surprisingly, the Department of Energy (DoE) and the Energy Regulatory Commission (ERC) did not raise strong opposition to the franchise bill. Perhaps the reason is that the mother of the owner of the majority owner of SPSBC is the Chairperson of the Senate Committee on Finance, which handles the budgetary appropriation of government agencies.

Four, a new insertion in the bicameral report — not in the original HB 8179 and seemingly just came out of thin air — expanded the definition of an “underserved area.” The Chairman of the Senate Committee on Energy, Senator Sherwin Gatchalian, gave an Objection Speech (June 3, 2019) to HB 8179 as amended by the Senate and argued that the bicameral report should not be ratified. His objection was based mainly on the said insertion, where underserved areas now include “where electricity services have been interrupted at least twelve (12) times in the twelve (12) months preceding the date of the determination that such area is underserved.”

Sen. Gatchalian cited two reasons why this insertion is wrong: (a) “There is no basis for the frequency of interruptions indicated in the bicameral report. Currently, the standard for the frequency of interruptions is determined by the ERC and is updated regularly… To legislate a regulatory parameter would tie the hands of the regulator…”, and (b) “there is no definition of the word ‘interruptions’ in the bicameral report… frequency interruptions are not only a function of the performance of the DU but also of power plant performance, availability of power supply, kind of power plant, and even calamities… to legislate a low and unfounded bar for an area to be considered underserved would be a disservice not only to the community but would be unfair to the franchised DU.”

The SPSBC franchise bill appealed to the gullible public because it somehow presented itself as a solar power company — and solar is cool; it helps “save the planet” while giving “cheap, reliable” power to the public.

Far out.

Even among the richest economies in the world which have wide solar farms — Germany, Italy, and Australia. among them — the contribution of solar to total electricity generation remains low. And many of our neighbors in East Asia like Hong Kong, Singapore, Indonesia, Malaysia, Vietnam, and Taiwan have zero or very small solar contribution to their power generation (see table).

FREEPIK/CHEVANON

The SPSBC franchise bill is a political project that favors a single newbie corporation. President Duterte should veto it. If he signs it into law, it will set a new precedent and pave the way for many other cronyist bills to be filed in the next three years. This will further weaken the EPIRA law and weaken the rule of law in the country.

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

minimalgovernment@gmail.com

Vote-Shaming in the Midterm Elections

“Yung mga boboto sa mga taong ’to, paki-unfriend ako please. Wala akong kaibigang bobo.” (Those who will vote for the following candidates, please unfriend me. I have no stupid friends.)

Vote-shaming. The statement above was shared as various memes on Facebook during the campaign season leading to the midterm elections. Bobo-shaming statements like this attempted to shame voters who are thought of as ill-informed and uneducated based on their unpopular choices, especially for the senatorial post. It was followed by a list of names, marked with a red line for emphasis, of senatorial candidates publicly declared as undeserving of a vote come May 13. The closer the election date got, the viler the posts became. As soon as the election results showed the dismal ranking of the opposition candidates, the vile memes turned into vicious attacks that gave a glimpse of an election culture that is both disconcerting and worrisome.

Plunder and graft case defendants. It is not difficult to see where the bobo sentiments came from. Of the 12 Hugpong-backed candidates, three have pending or have had plunder charges recently filed against them at the Sandiganbayan in the course of their political career. The names of re-elected senator Bong Revilla and losing senatorial re-electionists Jinggoy Estrada and Juan Ponce Enrile stand out, having been charged with separate plunder and graft cases in 2014 for misuse of government funds. In 2014, the Office of the Ombudsman officially charged Revilla with plunder before the Sandiganbayan after he was accused of divesting his pork barrel funds through the bogus NGOs linked with Janet Napoles and earning kickbacks worth P224.5 million in return. He was also charged with 16 counts of graft in connection with the same multi-billion pork barrel scam. The anti-graft court acquitted Revilla in 2018 for the plunder case, allowing him to post bail, but the 16 counts of graft charges related to the same scam are still under trial. Estrada’s and Enrile’s plunder and graft cases stem from the accusation that they amassed P183 million and P172 million worth of kickbacks, respectively, for funneling their PDAF (Priority Development Assistance Fund) to the same Napoles-linked bogus NGOs. Revilla managed to secure the 11th slot in the midterm elections but Estrada and Enrile, who are both out on bail for their existing plunder charges, failed in their bids.

Revilla won; Otso Diretso slate lost. If the midterm elections were any indication, the vote-shaming messages on various social media platforms intended to influence voters’ preference by shaming them did not help the opposition’s cause. One can boldly say it backfired on them. Most of the Hugpong-backed candidates who fared well in pre-election surveys did win eventually. Vote-shaming failed to turn the tables, so to speak. Revilla won, and while Enrile did not make it even to the top 20, Estrada did and — with the exception of outgoing senator Bam Aquino who was at the 14th spot — bested the entire opposition slate including Otso Diretso’s popular first-time senatorial candidate Chel Diokno and former senator and presidentiable Mar Roxas. Imee Marcos, whose entire campaign had her team fending off attacks that questioned the veracity of her educational background, won and got the eighth spot. The unexplained ill-gotten wealth of the Marcos family and the court convictions of former First Lady Imelda Marcos did not stop her from winning a coveted seat in Senate.

Negative campaigning did not help. The dismal results of the 2019 elections for Otso Diretso candidates make a good case for reflection especially with the win of Revilla, who just got out on bail a few months before the campaign, and Marcos, whose name alone ought to have had an impact on the votes cast for her. Post-election analysis points to the negative campaign ran by the opposition during the campaign season as a major contributing factor. In an interview with ABS-CBN (2019), political analyst Ramon Casiple of the Institute for Political and Electoral Reform said that while downgrading opponents and promoting allies may be part of the campaign system, it should not end there. Negative campaigning alone diverts the political discourse away from the issue and overshadows an alternative platform offered by a candidate. Eventually, it fails to capture the interest of a voter along with the chance to impact his choice.

The negative campaign that dominated the May 2019 elections disenfranchised the D and E voters because they were singled out and chastised for their voting preferences without regard to the possibility that these preferences weren’t decided on overnight. Those who subscribed to negative campaigning thought they were shaming D and E voters for the way they think; they thought that a little insult coming from classes A, B, and C would “enlighten” these voters and help them make better choices overnight. In the end, it was bobo-shaming for the sake of shaming the poor, the unemployed, and the illiterate. It came out tasteless and arrogant, and left the masa disenfranchised for having been vilified, but mostly unheard.

Lessons learned. The elections were over before the inedible ink on everyone’s fingers was gone. While negative campaigning has always been part of the game, it sometimes does more harm than good because it draws attention to the criticism and drowns out the alternative candidate or platform being pushed forward. Running against the administration makes it trickier since the administration has all the machinery at hand and their reach is unlimited. Opposition candidates need to make sure that every limited attempt to be heard will yield a vote for them and not seething contempt. Seeing candidates with plunder and graft cases doing well at pre-election surveys should not be used as an excuse to vilify others. Instead, it must be taken as an opportunity to educate the voters without letup about the gravity of such charges. The May 2019 elections taught us that shaming, especially of the masa, does nothing to translate the act of shaming itself into votes. It does nothing except to shame.

 

Pilar Pajayon-Berse is a professor at the Political Science department of Ateneo de Manila University.

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