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Cabinet group seeks VFA review

A CABINET group has recommended a review instead of the immediate termination of an agreement with the US on the deployment of troops and equipment for war games.

The Cabinet cluster on security, justice and peace endorsed a further review of the visiting forces agreement (VFA), Justice Secretary Menardo I. Guevarra told reporters in a group message.

President Rodrigo R. Duterte earlier ordered the Justice department to study a plan to end the VFA after the US government canceled a Senate ally’s visa.

The Cabinet cluster will submit a report this week, but other agencies may opt to submit their own impact assessment separately, he said.

“The DoJ report will consolidate the assessment made by other concerned executive agencies,” Mr. Guevarra said. “We have no direct information about the comments of the Senate, but coincidentally, the suggestion of some senators to review the VFA happened to be one of the options considered by the cabinet cluster.”

“A firmer picture will come out after the top-level meeting with the Presidential Commission on Visiting Forces tomorrow,” he added.

The Makabayan bloc, a coalition of 12 party lists at the House of Representatives, last week filed a resolution for the termination of “onerous” military agreements between the US and the Philippines, including the VFA, the Enhanced Defense Cooperation Agreement and Mutual Defense Treaty. — Vann Marlo M. Villegas

Thanks to China, it’s the Year of the Black Swan

By Daniel Moss

HITCHING YOUR wagon to China’s star just isn’t what it used to be.

Once, proximity to the mainland and relying on its economy were surefire ways to boost growth. During China’s rapid development in the 1990s and 2000s, it became the world’s biggest goods exporter and factory floor. Smaller neighbors that wove themselves into China’s supply chain benefited as a result. Those were the heady days of trade and market liberalization.

But twice in the past year, East Asia has learned the hazards of this model: first with the Washington-Beijing trade tussle and now with the coronavirus. The consequences could be material. A 1% drop in China’s gross domestic product would shave 0.3% off growth in Hong Kong, South Korea, Thailand, and Malaysia, and 0.2% from Japan, Vietnam, Singapore, the Philippines, Indonesia, and Australia, Bloomberg Economics’ Tom Orlik wrote recently, citing a 2016 study by the International Monetary Fund.

While a sharp dip in Chinese activity will be most acutely felt in Asia, the ramifications are global. Asia accounts for two-thirds of the world’s growth; China alone makes up about 40%.

In its recent Asia-Pacific regional outlook, the IMF said, “Asia’s strong trade and financial integration is a manifestation of the region’s economic success, but can also be a source of vulnerability.” The lender lowered its forecast for growth in the region. The World Bank made a similar observation earlier in 2019.

When Wuhan was still just a point on a map, the trade war and China’s broad-based slowdown were already taking a toll. Singapore, a barometer for business sentiment, recorded the slackest growth in a decade in 2019. In Thailand, the central bank projected last year’s expansion to be the weakest since 2014.

In many instances, fiscal and monetary policy — deployed in 2019 to combat these challenges — have more heavy-lifting to do. Officials across the region are also likely calculating the cost of commercial ties to China and their dependence on this big neighbor.

“If this matter continues, just like previous outbreaks, it would certainly impact the national economy,” said Azmin Ali, Malaysia’s economic affairs minister. He’s right to be worried: China buys about a fifth of Malaysia’s exports, more than any other country, and is the third-biggest source of foreign tourists. When I took my family to Legoland Malaysia the other weekend, it was hard not to think about the economic impact of a reversal in mainland Chinese visitors (after worrying about all the Lego pieces my children put in their mouths). Eliminating those hotel reservations, restaurant bills, and rental car charges will add up.

It’s little surprise that tourism-based economies in the region haven’t diversified. The inexorable rise in Chinese visitors tracked the growth of its middle class. But there was little by way of a backup plan.

It’s naive to think that regional leaders, especially in Southeast Asia, will simply ignore their biggest trading partner. But remember that China wasn’t always the main game, and it won’t remain so forever. Back in the 1980s and early 1990s, Japan was the center of gravity, especially after the Plaza Accord provoked a wave of investment in factories across the region. If India can recover from its banking crisis and floundering growth, it could again become the world’s fastest-growing major economy. The Organization for Economic Cooperation and Development projects that India’s share of global output will rise through mid-century, by which point China’s will have long peaked.

The world’s second-biggest economy will eventually recover its footing and account for a bigger slice of the global pie. Yet it no longer looks infallible, and it’s no longer a one-way bet. As Asian leaders wait for China to recover, it wouldn’t hurt to take advantage of rock-bottom bond yields to borrow — not just to buttress activity over a few months, but also to invest in infrastructure and education. Much depends on whether they are big enough to seize the opportunity in this crisis.

 

BLOOMBERG OPINION

Taal: probing the judgment of scientists and the power of bureaucrats

My wife is Batangueño; some of her relatives are evacuees. So I have a personal interest in the human drama around the Taal volcano eruptions.

Let me paint the scenario as it played out:

Threatened by eruptions which began Jan. 12, many residents evacuate on their own. Others stay longer, to save their livelihoods. The Philippine Institute of Volcanology and Seismology (Philvolcs) warns against imminent, more powerful eruptions, declares a 14-kilometer danger zone, and recommends its complete evacuation. Invoking their police powers, local government units (LGUs) forcibly evacuate people and stop residents from returning to salvage whatever they could of their livelihoods. Other officials allow a four-hour window. More than a week after the first eruption, a stern order comes from the Department of the Interior and Local Government (DILG) about Tagaytay businesses: stay closed or your business permits will be revoked. National officials also talk about permanent relocation. On Jan. 26, Philvolcs downgraded the Taal alert level from 4 to 3. Many evacuees return to their homes to pick up the pieces and resume their lives.

Areas around Taal have been under threat of eruption for centuries. Batangueños, more than anyone else, feel the threat in their guts. This conscious decision to live near a volcano is a badge of courage. That they have flourished is a tribute to their resilience. This right to decide what and how much risk to take should be respected. In the current context, this is how it could be done:

Philvolcs’ knowledge and judgment guide government decisions. Philvolcs knows the mechanisms of volcanic behavior. It knows how specific volcanoes the world over have behaved in the past. It knows the details of Taal’s previously recorded eruptions. Its instruments tell it how magma is flowing underneath the Taal geological formation. But it does not know how soon a deadly eruption will actually occur. It knows the various threats (base surge, toxic gases, ashfall, pyroclastic flows, lava flow, tsunami, landslides, etc.), but it does not know which of these will occur and to what extent. It has judgments, based on its knowledge.

The problem is the uncertainty in its judgments. The solution is to put numbers to this uncertainty: How imminent? How powerful? How risky? Initially, Philvolcs gave no number to the probability of a deadly eruption. A few days after the eruptions subsided, its spokesperson said, “we need to look at the probabilities again.” This means it did have probability estimates, but it kept it to itself. On Jan. 23, Philvolcs finally announced its estimate: 30%.

This 30% presumably refers to the probability of an eruption within “hours or days” that can kill people within the 14-km danger zone. To be far more useful, Philvolcs should word its risk estimates roughly as follows: “As of (say) 6 a.m. today, we estimate the probability within the next (say) 10 days of a Taal eruption that can kill people within (say) 14 km is (say) 30%. Inside the danger zone, the risk of getting caught in a deadly eruption is around (say) 0.15% for every hour inside.”

The very useful last sentence above assumes a period of 10 days and that the probability is evenly distributed over those 240 hours. Philvolcs can use its updated probability parameters whenever it issues its daily bulletins.

The 0.15% is calculated as follows: The chances of a deadly eruption not occurring within 10 days is 70%; the chances of one not occurring on a particular one-hour period among the 240 hours/10 days is 99.85% (for the math-literate: 0.9985 raised to 240 is 0.70); the chances of one occurring on that particular hour is 0.15% — roughly one in 673. These are by no means precise, but they are the best we have. Even in wars, staying in a battle zone for an hour is far less risky than staying there for a month. Senator Bato calls such a risk “one-time, big-time.”

Consider a one-time retrieval of animals to bring them to a safe zone. If this takes four hours, the probability of getting caught by a deadly eruption quadruples: 0.6% or 1 in 167. Residents and LGU officials who wanted to retrieve their animals must have instinctively felt that the risk was worth taking. Had higher officials allowed it, and provided the means to do it quickly, many animals could have been retrieved and part of the people’s livelihoods salvaged.

A lot of homes could be saved if ash is swept from roofs regularly to prevent collapse. Assume a two-hour cleaning operation every five days. This also totals four hours of risk exposure, like the one-time animal retrieval operation. Residents who thought the risk was worth taking should have been supported by LGUs by providing transport, face masks, ladders and brooms, and risk-reduction personnel could stand by just outside the danger zone in case a quick exit was necessary.

Doing both operations doubles the risk further to 1.2%. But not for individuals, if a different set of people did the second operation. For instance, it was wrong to assign the same police personnel in the danger zone throughout the eruptions. Rotation would have reduced the risks for individuals.

It was painful to watch coverage of residents pleading to bureaucrats and police to let them clean their roofs and save their animals. With the benefit of hindsight, we now know for a fact that no deadly eruption occurred during those particular hours. Given the prior odds of 99.85% against a deadly eruption, that was entirely expected. The roofs would have been cleaned, and the animals retrieved. Nobody would have died.

On forced evacuations: the following argument can hopefully convince LGUs why they should let households make the final decision.

Economists use the term moral hazard for this problem. Evacuees bring extra money and resources to LGUs; the more evacuees, the more aid LGUs receive. This was highlighted by the state of emergency declared in Cavite, so the neighboring province can also use its emergency funds and receive aid for evacuees.

When LGUs force residents to evacuate against their will, then receive millions in aid as a result, a moral hazard arises. The hazard is that genuine concern may at some point become a callous way of getting more aid. No such hazard arises in voluntary evacuations.

The DILG order to the Tagaytay mayor that businesses should stay closed was clearly overreacting. For businesses within the danger zone, the order was superfluous. The lock-down policy already applied to all. For struggling businesses outside the danger zone, the order would have been a death sentence. Tagaytay City is the crown jewel of Southern Tagalog tourism. Big land developers — President Duterte sometimes derisively calls them the Rich — are moving in. A string of bankruptcies would have created new opportunities for the Rich to muscle in.

President Duterte won partly for his promise to end the rule of “imperial Manila.” He should realize that the DILG order for Tagaytay businesses to stay closed smacks of this Imperial Manila Syndrome.

For centuries, Batangueños did not give up their livelihoods for fear of a volcano. Now and in the future, they will not surrender to it without a fight. If the government ties their hands with lock-downs and closure orders, they will surely become dependent evacuees requiring huge infusions of aid and vulnerable victims of Manila-based land speculators.

 

Roberto Verzola has an academic background in economics and engineering. He runs a non-profit organization promoting renewable energy, and he is a senior fellow of Action for Economic Reforms.

Novel Coronavirus has the last say

On Jan. 30, the World Health Organization (WHO) declared a global public health emergency due to the rapid spread of the Novel Coronavirus (2019-nCoV) that originated in a seafood and live animal market in Wuhan City (population: 11 million), in the province of Hubei (population: 50 million), in China. As of Saturday, varying television news reports said there are now close to 10,000 infected persons worldwide, with 200+ dead from the virus, for which a vaccine is still being developed. Novel Coronavirus — nCoV — has spread to 22 countries and regions, according to the WHO.

Countries scrambled to airlift their citizens out of Wuhan and many are banning travel to and from China, Hong Kong, Macau and Taiwan — places where Chinese family ties urge frequent visiting and intermingling — because of the risk of infection by “carriers” or asymptomatic afflicted persons. Russia has totally closed its borders with China. Airlines have temporarily stopped flights to and from Mainland China and Hong Kong, while connecting flights from elsewhere are checked for the passengers’ flight history.

Immigration and health officials are on guard at airports international and local, with temperature tests and empirical observation of cold symptoms (initial indication of affliction) in passengers at loading and at unloading. In the US, a mandatory quarantine of five days at Air Force hospitals has been enforced if ever even one single passenger is suspected of being infected. Airport and airline employees are refusing to work under threat of infection with nCoV. Global businesses in affected areas, like Toyota, Ikea, Starbucks, Tesla, MacDonald’s, Volkwagen, and Foxconn have stopped operations in China.

Hardly anyone, country or people, wants to deal with China at this time. What a pity for all the efforts of this market-based political economy to be accepted by the world as a sincere and honest participant in global trade and cooperation, as it built itself up into the second largest economy in the world and staying up there for decades now being a discriminated and distrusted political persona in the 1970s. In an AFP report, Chinese President Xi Jinping said in a meeting with the head of the WHO: “(China) is waging a serious fight against the ‘demon’ coronavirus outbreak… The Chinese government has always adopted an open, transparent and responsible attitude to timely release of information on the epidemic to domestic and foreign countries.” Even before the WHO declaration of global emergency, he imposed a total lockdown on Hubei, where neither locals nor foreigners can leave or enter.

The first confirmed nCoV case in the Philippines is that of a 38-year-old Chinese woman who had taken multiple flights — from Wuhan to Hong Kong, to Cebu, to Dumaguete, and on to the Ninoy Aquino International Airport (NAIA) in Manila — arriving in the Philippines on Jan. 21. Testing positive for fever at the airport, she was sent for check-up and confinement at a local government hospital and found to be infected with nCoV five days later after testing at an Australian laboratory (the Philippines has no testing capability for nCoV yet). After this first confirmed nCoV case, President Rodrigo Duterte ordered a ban on Chinese nationals coming from Hubei province, which was already on lockdown, anyway.

What about the other 130 or more passengers in each leg (possibly times three) she took in her travels on Cebu Pacific, Cebgo, and Philippine Airlines — who were with the nCoV-positive passenger? Department of Health (DoH) spokesperson Undersecretary Eric Domingo told DZMM Radio on Jan. 30 that the nCoV Task Force (with the Department of Immigration) is working from the plane manifestos to try and find these co-passengers of the afflicted woman — but they have already dispersed to resorts and other places in Dumaguete and Cebu and Manila, or perhaps moved on to still other places in the Philippines.

Sad that it had to be the nCoV that brought out the apparent laxity of our immigration regulations and the flexibility allowed. The unique arrangement where Chinese nationals are issued visas upon arrival (VUA) for entry to the Philippines has been temporarily stopped after the first nCoV case was confirmed — too late, but better late than never. The VUA facility has been offered to Chinese nationals since 2017 in an effort to boost tourism (including “gaming tourism”). Those who were eligible to avail of it included investors and businessmen, athletes, delegates to international conventions, and tour groups. ABS-CBN News pointed out on Jan. 28 that Chinese tourists accounted for 22% of the 7.5 million visitors to the Philippines between January and November last year, making China the second top nation of origin for international travelers to the country.

But most of the seemingly innocent and harmless Chinese tour groups (with fat wallets for the local economy) are players in the Philippine online gaming market (POGOs) — gambling is not allowed in any form in China. When President Duterte had just assumed office, he soon signed Executive Order 13 of 2016, opening the new and very lucrative industry of POGOs. There are now 60 licensed POGOs in the Philippines with 48 in operation, and 100 illegal, and unmonitored/unregulated Chinese and Filipino-dummy owned POGOs in the country.

Collateral beneficiaries to the POGO boom are the real estate and hospitality sectors, where hotels and condos (both for living accommodations and office space) have become voraciously in demand by mostly Chinese nationals legally or illegally staying in the Philippines as online gamers and/or gamblers in casinos (yes, also as innocuous tourists), or as workers in the POGOs (licensed or not, but needed by the POGO industry because of the language barrier in online gaming and in casinos.)

“More than three million Chinese nationals have been allowed to enter in the Philippines since 2016, coinciding with the rise of President Rodrigo Duterte, who has pulled out all the stops to thaw his country’s frosty ties with China,” the Philippine Star of June 9, 2018 said. “I simply love Xi Jinping,” Duterte openly declared at a press briefing before leaving for an official visit to China in 2018. “He understands my problem and he’s willing to help. And I’d like to say, ‘thank you, China.’” — a direct quote in the Philippine Star of April 10, 2018, and likewise in the archives of other media. “While China refuses to budge from areas in the West Philippine Sea where the Philippines has been awarded sovereign rights, President Duterte continues to profess goodwill toward Beijing,” the Star added.

But a Social Weather Station (SWS) poll taken last September and released in early December (before the nCoV scare), found 70% percent of Filipinos were worried over the increasing presence of Chinese nationals in the workplace with some even believing it may be a threat to national security. The Philippine National Police declared that kidnappings in Metro Manila doubled from 2017 to November 2019. In 2019 alone, at least 58 Chinese nationals were kidnapped (CNN Philippines Dec. 14, 2019). So, the Chinese “tourists” and overstaying entrants seem to have their own mafia for the settling of debts and differences — bypassing the legal and social systems in their host country. Senator Risa Hontiveros has raised concern over the growing sex trade allegedly servicing Chinese POGO players.

They are a separate, unfriendly community implanted in our society. We cannot even perfunctorily communicate with them, the local Filipinos and other resident foreigners say. And with their profligate cash, they crowd us out in day-to-day economic activities and even more in deep investments like real estate and finance, driving up prices by their voracious appetite to make money from money, as in the way of the inveterate gambler. We hope the economic bubble does not burst when their President Xi rounds them up to go back to the Mainland — after all, gambling is not allowed in China. Why is the Philippines providing a way around an activity which is not allowed of Chinese nationals?

There is the to-and-fro of advantages and disadvantages, the give and take of allowing the hordes of Chinese nationals here in the country. At one time, President Duterte said, “The Chinese who are here for work, let them be. Why? We have 300,000 Filipinos in China. (They will be sent home if we send home the Chinese here)” (ABS-CBN News Feb. 25, 2019).

The Novel Coronavirus has the last say. At least for health and safety reasons, people are best taken care of by their own country.

 

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

The Philippine’ Golden Age of Tourism

After decades of lethargic growth, the Philippine tourism industry is finally riding on strong tailwinds. From January to November last year, foreign tourist arrivals topped 7.46 million, which translates to 15.58% year-on-year growth. This is nearly four times the average global growth rate and 2.5 times more than the Asian average. Although whole year statistics have not yet been consolidated, it is almost certain that the country surpassed its 8.2 million foreign visitor target.

As for domestic tourism, the National Tourism Development Plan set a target of 79.3 million domestic travelers for 2019. This target was breached way back in 2016. Local holidaymakers are expected to have topped the 120 million mark last year. This is due to a trifecta of reasons, namely: the ever-growing number of budget direct flights to domestic destinations, an effective marketing campaign by the Department of Tourism (DoT) and a growing middle class with expendable income.

All this bodes well for the economy. Revenues derived from the tourism industry will surpass P2.888 trillion (roughly 35% more than revenues generated by the IT-BPO industry) whilst generating 5.8 million jobs for our countrymen. The tourism industry is already the second largest contributor to national revenues.

What we are witnessing today is the Philippine’s gold age of tourism. We have reached that critical point where infrastructure development (airports and access roads) are coinciding with the rise of new tourist destinations around the country. We have to give credit to the local governments of El Nido, Sagada, Siargao, and many more for developing their localities into strong tourism products. After many decades, we are no longer Manila-centric, said DoT Undersecretary Benito “Bong” Bengzon, Jr., who was our guest at the Spanish Chamber of Commerce last week.

The next few years will be even robust for the industry. The DoT is looking at an annual growth rate of 12% until 2022. By then, revenues derived from tourism should reach P3.9 trillion on the back of 12 million foreign visitors and over 150 million domestic travelers. Many say, however, that with more provincial airports opening, the 12% growth rate earmarked is inordinately conservative. It could go as high as 17%.

While it is true that our 8.2 million foreign arrivals pales in comparison to Malaysia’s 28.1 million (estimated), Singapore’s 19.2 million (estimated) and Vietnam’s 18 million, we should factor-out the local residents who travel daily across borders by land. To get a more accurate figure of their net foreign arrivals, we should only consider arrivals by air and sea, asserted Mr. Bengzon. In which case, it is safe to shave-off 7 to 10 million from the gross numbers of these countries.

The Philippines, like Australia, cannot be accessed by land. Hence, our declared foreign arrivals are as accurate as it gets. Having said that, Australia is the more ideal model (and benchmark) for Philippine tourism. The Ozzies attracted just 9.8 million foreign visitors last year, but generated a whopping $155 billion in revenues, roughly three times that of the Philippines.

Its all about increasing length of stay and average spend. Records show that foreign visitors to Australia stay an average of 32 nights, far more than in Singapore at 4.4 nights, Malaysia at 6.2 nights and the Philippines at 7.11 nights. Apart from length of stay, Australia’s success is anchored on having multiple destinations, each having premium offerings in accommodations, gastronomy, and attractions.

The thrust is to make the Philippines a premium destination, declared Mr. Bengzon. This is especially true now that we have made a commitment to sustainable tourism. With the preservation of our natural wonders and cultural sites in mind, we can no longer play the numbers game. Our strategy has shifted to one that is value-focused.

Besides, market preferences have changed, noted Mr. Bengzon. Whereas curated tourism estates like Macau and Las Vegas and highly commercialized islands like Bali were the trend before, virgin communities are now the preferred destinations. Authenticity is the new “premium.”

Studies show that affluent professionals, honeymooners, divers, and leisure travelers now prefer off-the-beaten-path destinations where they can experience local culture. The rawer the better. However, they still require all the comforts of luxury dwellings including deluxe accommodations, concierge and chef service, personal security and land transfers.

With this in mind, the DoT considers El Nido, Ifugao, Sagada, Antique and Bondoc as priority destinations for development. Considered “potential destinations” are Siquijor, Camiguin, Batanes, and Sipalay. Both the DoT and the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) are aggressively promoting investments in these areas, with an emphasis on those that cater to leisure markets. Already under construction on an island off the coast of Zabales is an all-villa resort with its own airport that competes in the $1,500 per night category. Operated by an international chain, it is scheduled for launch in 2023. In Camiguin and Quezon province, resorts are on the rise whose rates are pegged at $2,000 per night. Demand for ultra luxury hotels far exceed supply, hence the opportunity for investors.

As far as source markets are concerned, Korea, China, the US, and Japan still lead in foreign arrivals. Unfortunately, we are not attracting as many tourists from the ASEAN as we should. The Philippines is the second to the last among countries visited by ASEAN people. The DoT considers ASEAN as an “opportunity market” and will intensify its marketing efforts, accordingly.

Apart from ASEAN, Turkey and Spain have shown tremendous potential. Spain has registered an annual growth rate of 20.84% since 2013. More than 50,000 Spaniards visited the Philippines last year. Other markets showing promise are Germany, the Netherlands, Italy, Switzerland, and Sweden.

To reach these market, the DoT has decided to tailor-fit its marketing strategies according to what is most effective in each country. Some markets may be heavy on digital marketing while others may rely on billboards. Some may utilize magazine articles while others may depend on TV ads. Gone are the days when ad placements on CNN and ESPN were the end-all-be-all for tourism promotions. The DoT has tapped BBDO Guerrero and Touch XDA as its partner for strategy formulation and media buying, respectively.

In terms of tourism products, the Philippines strength lies in sun and sea, diving, nature, and education tourism (for ESL courses). Still being developed are farm, leisure, and cruise tourism. Admittedly, we are weak in city life. Manila needs a lot of work to compete with the likes of Bangkok and Singapore.

The improvement of Manila is taking baby steps. Intramuros and Fort Santiago, through the efforts of the Intramuros Administration, have improved remarkably. The city of Manila, where our cultural sites and museums are located, is slowly realizing a revival with Mayor Isko Moreno at the helm. Still, the capital needs a massive urban renewal for it to be competitive.

We give kudos to Mr. Bong Bengzon and Secretary Berna Romulo-Puyat for ushering-in the golden age of Philippine tourism. Congress will do well to channel as many resources as possible to maximize the potentials of tourism.

 

Andrew J. Masigan is an economist

The EU and the UK: A door closes, another opens

By Josep Borrell and Michel Barnier

ON JAN. 31, the United Kingdom left the European Union. We lost a member of our family. It was a sad moment for us, for European citizens — and, indeed, for many British citizens.

Nevertheless, we have always respected the sovereign decision of 52% of the British electorate, and we now look forward to starting a new chapter in our relations.

Emotions aside, Feb. 1 turned out to be historic but also undramatic. This is largely thanks to the Withdrawal Agreement that we negotiated with the UK, which enabled us to secure “an orderly Brexit.” One that — at least for now — minimises disruption for our citizens, businesses, public administrations — as well as for our international partners.

Under this agreement, the EU and the UK agreed on a transition period, until the end of 2020 at least, during which the UK will continue to participate in the EU’s Customs Union and Single Market, and to apply EU law, even if it is no longer a Member State. During this period, the UK will also continue to abide by the international agreements of the EU, as we made clear in a note verbale to our international partners.

So, with the transition period in place, there is a degree of continuity. This was not easy given the magnitude of the task. By leaving the Union, the UK automatically, mechanically, legally, leaves hundreds of international agreements concluded by or on behalf of the Union, to the benefit of its Member States, on topics as different as trade, aviation, fisheries or civil nuclear cooperation.

We now have to build a new partnership between the EU and the UK. That work will start in a few weeks, as soon as the EU27 have approved the negotiating mandate proposed by the European Commission, setting out our terms and ambitions for achieving the closest possible partnership with a country which will remain our ally, our partner and our friend.

The EU and the UK are bound by history, by geography, culture, shared values and principles and a strong belief in rules-based multilateralism. Our future partnership will reflect these links and shared beliefs. We want to go well beyond trade and keep working together on security and defense, areas where the UK has experiences and assets that are best used as part of a common effort. In a world of big challenges and change, of turmoil and transition, we must consult each other and cooperate, bilaterally and in key regional and global fora, such as the United Nations, the World Trade Organization, NATO or the G20.

It is perhaps a cliché but the basic truth is that today’s global challenges — from climate change, to cybercrime, terrorism or inequality — require collective responses. The more the UK is able to work in lockstep with the EU and together with partners around the world, the greater our chances of addressing these challenges effectively.

At the very core of the EU project is the idea that we are stronger together; that pooling our resources and initiatives is the best way of achieving common goals. Brexit does not change this, and we will continue to take this project forward as 27.

Together, the 27 Member States will continue to form a single market of 450 million citizens and more than 20 million businesses.

Together, we remain the largest trading bloc in the world.

Together, at 27, we are still the world’s largest development aid donor.

Our partners can be sure that we will stay true to an ambitious, outward-looking agenda — be it on trade and investment, on climate action and digital, on connectivity, on security and counter-terrorism, on human rights and democracy, or on defence and foreign policy.

We will continue to live up to our commitments. We will continue to stand by the agreements that link us to our international partners such as the Partnership and Cooperation Agreement with the Philippines and we will continue to develop multilateral cooperation frameworks around the world.

The European Union will continue to be a partner you can trust. A steadfast defender of rules-based multilateralism, working with our partners to make the world more secure and fair.

 

Josep Borrell is the High Representative/Vice-President of the European Commission, while Michel Barnier is the Head of Task Force for the Relations with United Kingdom.

Resilience and out-of-process events

By Cliff Eala

I HAD lunch with Gina. She was diagnosed 10 years ago at age 40. Breast cancer. Stage 3c, meaning advanced. Nineteen of the 25 lymph nodes the doctors found were malignant. She underwent surgery, six sessions of chemo, and 33 radiation sessions. Each chemo session left her sick and nauseous for a week. It left a metallic taste in her mouth, and she could not eat anything.

“What was the toughest part of all this?,” I asked. “The day I found out!” she replied. “My heart fell to the floor. I cried. And cried some more. Then, it stopped there. I told myself. I already have cancer. I am not going to make it worse by feeling sorry for myself. I am going to do this. I am going to get myself well.” That is resilience.

Resilience is the ability to deal with, recover, and grow from adversity. In a corporate setting, it is the ability to deal with, recover, and grow from “out-of-process” events. Any organization has out-of-process events. These are events for which a process has not been defined. For example, an overturned bus blocking delivery vans can mean no food to sell at a fast-food outlet. This is an out-of-process event or, in our definition of resilience, the “adversity.” Resilient people, because of the way they think and behave, approach the problem to solve it. The non-resilient ones, withdraw from the problem to avoid it. Company growth comes from those who habitually view out-of-process events as opportunities, and proactively step forward to solve them.

There are several drivers of resilience. One model for workplace resilience identifies four component skills: confidence, adaptability, purposefulness, and social support (Robertson, 2015). The US Army and the University of Pennsylvania’s Positive Psychology Center have jointly designed a resilience model for the US Army Master Resilience Trainer course. This 10-day program teaches resilience skills for soldiers. The program develops six core competencies to build resilience and prepares one for adversity (Reivich and Seligman, 2011). These competencies work not only for soldiers preparing for war but also for you and me going through work and life’s troughs. The competencies are:

“(a.) self-awareness — identifying one’s thoughts, emotions, and behaviors, and patterns in each that are counterproductive;

(b.) self-regulation — the ability to regulate impulses, thinking, emotions, and behaviors to achieve goals, as well as the willingness and ability to express emotions;

(c.) optimism — noticing the goodness in self and others, identifying what is controllable, remaining wedded to reality, and challenging counterproductive beliefs;

(d.) mental agility — thinking flexibly and accurately, perspective taking, and the willingness to try new strategies;

(e.) character strengths — identifying the top strengths in oneself and others, relying on one’s strengths to overcome challenges and meet goals, and cultivating a strength approach in one’s unit; and,

(f.) connection — building strong relationships through positive and effective communication, empathy, willingness to ask for help, and willingness to offer help” (Reivich and Seligman, 2011).

I define a resilience model with five elements. This model identifies the factors that enhance personal resilience:

• Purposefulness — having a purpose worth pursuing makes you resilient.

• Optimism — believing in your ability to bring about a better future outcome makes you resilient.

• Flexibility — being able to assess challenges from different perspectives, find opportunities in them, and solve them creatively makes you resilient.

• Self-control — being able to regulate thoughts, feelings, and behavior makes you resilient.

• Social support — being able to rely on support from others makes you resilient.

Resilience is a trait that uniquely sets us apart from robots and their artificial intelligence algorithms. Resilient people are the ones who push an enterprise forward to deliver and grow. Organizations should, therefore, invest in resilience-building programs. Resilience is good for people, and it is good for business.

 

Cliff Eala is founder and CEO at energy efficiency firm Synerbyte Ltd., and author of the book Sh*tty Places & Selfish People: 7 Rules of Engagement.

www.linkedin.com/in/cliffeala/

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cliff.eala@synerbyte.com

Meet the Silicon Valley-based Filipino founder fighting to end cancer

 

When Aldo Carrascoso founded InterVenn Biosciences, his San Francisco-based healthtech company innovating around early cancer detection, he did it with one mission in mind: to build a world where no one is ever blindsided by disease.

It’s a mission everyone at InterVenn has imbibed, from the scientists running InterVenn’s state of the art lab to the janitors keeping their offices in order.

Before he was the co-founder and CEO of InterVenn, this Filipino entrepreneur was the founder and CTO of Veem (formerly Align Commerce), a cross-border payment platform that utilized blockchain years before anyone ever even heard of Bitcoin. According to Crunchbase, Veem boasts a lineup of investors including “Kleiner, Perkins, Caufield, Byers (the same venture capital responsible for Google, Twitter, Amazon, Uber, Waze, Slack and SnapChat among others), Google Ventures, Softbank Ventures, National Australian Bank, Silicon Valley Bank Ventures, Recruit Strategic Partners, and NYCA Investment Partnership LP (led by Hans Morris, former President of Visa and Max Levchin, founding CTO of PayPal).”

[WATCH: Aldo Carrascoso on how Filipino startups can scale beyond the Philippines.]

His latest venture, InterVenn, utilizes next generation glycomics, instrumentation, and deep machine learning to change the way people diagnose cancer, all in the hopes of radically furthering research towards curing it.

Aldo credits much of his company’s ongoing success to the brilliance of his team. His only role, he claims, is empowering them with resources and love–a word he says he likes to use a lot. In this video, Aldo shares advice for founders looking to build startups that truly make a difference and why Filipino values are key to helping his companies thrive.

This fireside chat was organized by StartUp Village as part of their ENGAGE: Silicon Valley Immersion program. ENGAGE brings Philippine startups, entrepreneurs, and corporate executives to the global epicenters of innovation.

If you’re interested in joining the next leg of the program, slated for March 2 to 6, 2020, you can find out more at the ENGAGE: Silicon Valley Immersion program page.

Adiwang brings heat in Manila debut; Iniong wins

By Michael Angelo S. Murillo, Senior Reporter

PROMISED to bring the heat in his Manila debut for ONE Championship, Filipino Lito “Thunder Kid” Adiwang delivered on it, emerging on top in the opening round over Thai Pongsiri Mitsatit in their strawweight fight at “ONE: Fire & Fury” on Friday at the Mall of Asia Arena.

Fighting in his second outing in the main draw of Asia’s largest sports media property, Team Lakay’s Adiwang (11-2) did not waste much time, jumping on his opponent early on en route to the submission victory over Mitsatit by way of kimura.

Earlier, women’s strawweight fighter Gina “Conviction” Iniong scored a unanimous decision win over Asha Roka of India.

After a brief feeling-out period, Adiwang got his attack going, throwing a flying knee and following it up with a barrage of strikes.

He managed to force the Thai to the cage and eventually to the ground where he bombarded Mitsatit with elbows and punches.

Mitsatit survived Adiwang’s onslaught and forced things to a stand-up anew before taking the Filipino to the ground.

The two fighters angled on the mat, giving each other a lock.

Adiwang though found the leverage he wanted and went for the roll that got him on top.

From there he executed a kimura and moments later Mitsatit made the tap, forcing the referee to stop the fight at the 3:02 mark of the first round.

Adiwang topped the ONE Warrior Series last year to earn a contract with ONE Championship.

He had a winning debut in ONE’s main draw in October, defeating former Pancrase champion Senzo Ikeda at the landmark “ONE: Century” event in Japan.

“I credit maturity for this win,” said Adiwang who shared he has grown a lot as a fighter in recent years.

He went on to say that he loved fighting in Manila and is looking forward to putting up impressive performances for the Filipino fans in the future.

Meanwhile, Iniong, also of Team Lakay, notched back-to-back wins in ONE with a unanimous decision victory over Roka.

The fighters had their moments throughout the three rounds but Iniong proved to have more to give as the fight wore on.

The win was in follow-up to Iniong’s ONE victory in February last year where she won by split decision over Hayatun Jihin Radzuan of Malaysia.

It also came on the heels of her successful outing in the recent Southeast Asian Games held here in December where she produced a gold medal in the women’s 55-kg kick light category of the kickboxing event.

BSP says January inflation likely 2.5% to 3.3%

INFLATION may have settled at 2.5% to 3.3% in January, driven by rising food and liquefied petroleum gas prices and a higher tax on tobacco products, according to the central bank.

“Moving forward, the BSP will continue to monitor evolving price trends to ensure that the monetary policy stance remains consistent with the mandate of maintaining price stability conducive to economic growth,” Bangko Sentral ng Pilipinas’ Department of Economic Research said in a statement on Friday.

Inflation could have been tempered by lower electricity rates in Metro Manila and rollbacks in fuel prices, it added.

Inflation stood at 2.5% in December and 4.4% in January 2019.

President Rodrigo R. Duterte signed into law a new sing tax measure that raised taxes on electronic cigarettes and alcohol products.

The measure increased the ad valorem tax to 22% from 20% for net retail prices of distilled spirits. From a specific tax of P23.40 per proof liter in 2019, rates have been adjusted to P42 per proof liter at the start of the year.

This will continue to increase to P47 per proof liter in 2021, P52 in 2022, P59 in 2023 and P66 in 2024.

The law also imposes a P50 per liter levy on all types of wines. The tax used to vary according to wine type, price and alcohol content.

The levy will increase by 6% every year starting Jan. on 1.

The tax on heated tobacco products was raised to P25 per pack and will continue to increase by 2.50 centavos yearly until 2023.

The Department of Energy earlier said a new set of excise taxes on petroleum products would be enforced as as part of the third and final tranche of the Tax Reform for Acceleration and Inclusion law.

The law’s final tranche allows for a P1 per kilo additional excise tax for household liquefied petroleum gas.

The Energy department has said 48 of 67 LPG depots have started imposing the additional taxes as of Jan. 24. Four out of 297 LPG refilling plants have also enforced the additional excise taxes since Jan. 10.

The Philippine Statistics Authority is set to release January inflation data on Feb. 5. — Luz Wendy T. Noble

Economy may suffer from prolonged coronavirus outbreak

PHILIPPINE economic growth is likely to take a hit from a global coronavirus outbreak, with trade and tourism bearing the brunt, according to a Union Bank of the Philippines, Inc. note.

The country’s gross domestic product (GDP) growth could decline by 0.3% to 0.8% this year “if and when the outbreak lasts at least six months,” the lender’s Economic Research Unit said in a note emailed on Friday.

The estimate is based on the severe acute respiratory syndrome (SARS) outbreak in 2002 to 2003 when growth rates of Southeast Asian economies declined by an average of 0.5% when the situation lasted for seven months, the bank said.

The Philippine economy grew by 5.9% last year, its slowest pace in eight years and missing the government’s minimum goal of 6%.

“If this outbreak delivers a severe, but temporary impact, like SARS, the economic impact on the Philippines is very likely to be very minimal,” according to the note. “It may take time for the movement of people to return to normal, though.”

Philippine industries likely to be hit are tourism, which is part of the retail and service sector, and trade given that China is one of the country’s major trading partners.

More than 1.5 million Chinese visited the Philippines in the 11 months through October, making China its No. 2 tourism market after South Korea, according to data from the Tourism department.

Tourism accounted for 12.7% of Philippine GDP in 2018, according to government data.

“The Philippines may stand to lose a minimum of $126 million worth of foreign tourist spending this 2020 as the coronavirus scare continues to sow fear in the short term,” it said.

Foreign tourists spend an average $84 a day, the lender said, citing 2010 data from the Philippine Statistics Authority.

Meanwhile, the coronavirus scare could “slow a steady and burgeoning source of foreign exchange” from tourists.

“The more likely and direct impact on the economy will be on the consumption front as global travel is expected to slow altogether,” ING Bank-NV Manila senior economist Nicholas Antonio T. Mapa said in a separate note.

Trade, specifically Philippine exports may “continue to be flattish amidst this worldwide health emergency”, according to the Union Bank note.

“With the US-China trade issue partly settled with the so-called phase 1 trade deal and the global economy still to see a turning point signaling a clear growth recovery, export performance growth many continue to be sluggish this Q1 2020,” it said. — Luz Wendy T. Noble

WHO declares global health emergency

THE World Health Organization (WHO) has declared a global health emergency as a new deadly strain of coronavirus that came from China spread to at least 18 other countries, including the Philippines.

“Our greatest concern is the potential for the virus to spread to countries with weaker health systems, and which are ill-prepared to deal with it,” WHO Director-General Tedros Adhanom Ghebreyesus said in a speech uploaded on the WHO website.

At least 170 people have died in China and almost 8,000 have been infected, 99% of them in China, according to the WHO.

There were 82 cases in 18 countries. Eight of these were human-to-human transmissions in Germany, Japan, Vietnam and the US.

Meanwhile, the National Health Commission of China said in a statement the number of confirmed cases in mainland China rose to 9,692 as of midnight of Jan. 30 with 213 deaths.

The commission also said there were 4,812 new suspected cases as of Jan. 30, bringing the total to 15,238.

Mr. Ghebreyesus said countries with weaker health systems must be supported, while all countries should “work together in a spirit of solidarity and cooperation.”

WHO also said health authorities must quicken the development of vaccines, while combating misinformation, reviewing preparedness plans and sharing data and knowledge.

The agency said there was no reason to enforce policies that “unnecessarily interfere with international travel and trade.”

The Philippines had 31 people under investigation for the deadly coronavirus strain. A Chinese national from Wuhan City was the first confirmed case of the new virus in the Philippines.

PRECAUTIONS
The Land Transportation Franchising and Regulatory Board has issued a circular mandating all public utility vehicle drivers and conductors to wear face masks at all times.

The Maritime Industry Authority also said it had advised ship owners and operators to take measures to monitor the virus.

Meanwhile, President Rodrigo R. Duterte had agreed to impose a temporary travel ban on foreign nationals from Hubei province, Senator Christopher Lawrence T. Go, his former aide, said in a statement.

Malacañang should appoint Health Secretary Francisco T. Duque III as the official spokesman on matters related to the new virus to avoid the spread of fake news, Senator Nancy S. Binay said in a statement.

“I appeal to the President to appoint only one official spokesperson and only one voice who will regularly update the public of the latest developments,” she said.

The Foreign Affairs department was also ready to take Filipinos in the Chinese province home.

“Filipinos in Wuhan City and the rest of Hubei province will be afforded priority in the first batch of repatriates,” it said in a separate statement late Thursday.

House Speaker Alan Peter S. Cayetano reiterated that the Health department should start using its funds to to prevent the spread of the novel coronavirus/

“We now urge the Department of Health to use their available funds to implement the necessary contingency measures to ensure that all our medical facilities and hospitals are equipped and ready to attend to the needs of the Filipino people,” he said in a Facebook post. — Vann Marlo M. Villegas, Arjay L. Balinbin, Charmaine A. Tadalan and Genshen L. Espedido

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