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Energy dep’t warns of prosecutions over small fuel price cuts

By Arjay L. Balinbin
Sub-Editor

THE Department of Energy (DoE) said it could file charges against oil companies that did not roll back fuel retail prices as much as they could have.

“If we believe that either the rollback or the increase — rollback for liquid petroleum products and the increase in LPG — is unreasonable then we will refer it to the DoE-DoJ (Department of Justice) Task Force to study the possibility of filing either administrative or criminal cases against these companies,” Energy Assistant Secretary Leonido J. Pulido III said at an economic briefing in Malacañang.

He added: “As far as price is concerned, the government cannot dictate what the prices are. However, the Oil Deregulation Law points out that a task force called the DoE-DoJ Task Force has the authority to investigate anti-competitive practices.”

Oil companies on Monday announced a price rollback of P1.45 per liter for gasoline, P0.60 for diesel, and P1.00 for kerosene. Ahead of their advisories, Phoenix Petroleum Philippines cut the prices of its gasoline and diesel products on Sunday by P1.55 and P0.50 per liter, respectively.

When compared with the DoE’s estimate for the retreat in prices, “mas mababa po ‘yung rollback nila by about 22 cents for gasoline and about .06 cents for diesel (their rollback is lower by about 22 cents for gasoline and about .06 cents for diesel).” And we want them to explain it. Hindi naman po namin sinasabi na mali sila (We’re not saying they’re wrong) but we want to give them the opportunity to explain to us.” Mr. Pulido said.

Eastern Petroleum chairman and chief executive Fernando L. Martinez and Shell Philippines were asked to comment but had not replied at deadline time.

Oil companies that sell liquefied petroleum gas (LPG) also announced on Monday an increase in cooking gas prices by P4.50 per kilogram, and auto LPG by P2.50 per liter to reflect the international contract price of LPG.

“For LPG, when we computed kung magkano po dapat ‘yung iaakyat ng presyo ng LPG this week or this month, mas mataas po ‘yung ini-inform nila, mas mataas po ‘yung iaakyat ng produkto na LPG kumpara sa dapat iakyat niya compared po sa world market at sa sinusundan po natin na tinatawag natin na Mean of Platts of Singapore. (When we computed the LPG price increase, the price hikes announced by the companies was higher than expected based on the Mean of Platts Singapore benchmark) So we’re asking also LPG importers and suppliers in the Philippines to explain within three days bakit po mas mataas iyong presyo po ng LPG na pag-akyat po nila (why their price hikes were that high),” Mr. Pulido said.

This week’s price adjustment comes after oil firms last week implemented a hefty increase in the price of gasoline, diesel and kerosene on supply fears brought about by the drone attack on major Saudi Arabian facilities. — Victor V. Saulon

House bill seeks to expand NTC enforcement powers

A LEGISLATOR has filed a bill which seeks to expand the power of the National Telecommunication Commission (NTC) to impose fines and sanctions on the telecommunications industry.

Representative Michael L. Romero of the 1-Pacman Party-list filed House Bill No. 4886, aiming to give NTC the power to punish violations of Republic Act 7925 or the Public Telecommunications Policy Act of the Philippines.

“My bill amends RA 7925 with a whole set of law enforcement teeth because the 1995 law does not have penalty provisions and no means to hold erring entities and people liable for wrongdoing and not doing when they should have acted decisively,” Mr. Romero said in a statement.

Mr. Romero said one particular issue where enforcement capacity is needed is spectrum allocation.

He cited an NTC report citing the regulator’s inability to consolidate unused or unpaid-for frequency held by government agencies and the private sector.

“We have only three major telecom players and dozens of bit players. We have a number of unused spectrum frequencies. The spectrum policy has been described by some experts as ‘a mess’. The country has thousands of telecom dead spots nationwide,” he said.

The bill requires the government to allocate the spectrum to service providers who will use it efficiently and effectively to meet public demand, and the establishment of fair and reasonable tariff structures.

The proposed amendment provides for a fine of up to P1 million for violations of the act. — Vince Angelo C. Ferreras

PHL’s female share of workforce lags region

THE government needs to make work life more acceptable to women of childbearing age as their presence in the Philippine economy lags participation rates in the rest of Southeast Asia, economic planners said.

In a statement Wednesday, the National Economic Development Authority (NEDA) said that women in their peak childbearing years — 25 to 29 — are prone to withdraw from the workforce, while those who remain do so at the lowest rates in the region.

NEDA said that according to the Philippine Statistics Authority (PSA), “the rate had stayed within a 49 to 50% range in the past two decades, and in 2018 — at 46% — was the lowest in Southeast Asia.”

According to a NEDA study, “Determinants of female labor force participation in the Philippines,” NEDA cited issues such as gender norms and lack of policies that address gender discrimination and maternity needs in the workplace.

“Marriage and childbearing are associated with a significant decline in the female labor force participation, especially for the 25 to 29-year-old cohort. More patriarchal family structures reduce a woman’s employment rate by 8 to 13 percentage points,” NEDA said.

NEDA said mothers of young children require flexible working hours and added, “An extended paternity leave and additional parental leave will give husbands a fair share of caring for their babies. Stronger implementation of laws governing access to childcare services in government and support for bills requiring day care facilities in the private sector will be needed.”

It said women who acquire bachelor-level credentials have much higher participation rates, highlighting the need to invest in their education.

“The effect of a tertiary education on increasing labor force participation is significantly stronger for women than for men. The attainment of a secondary or higher level of education does not increase the labor force participation of men. This highlights the importance of investing in the education of women toward the attainment of a college diploma,” NEDA said.

By religion, the NEDA said “Protestants and other religious affiliations are the most likely to be employed, while Muslims are the least likely to be economically active,” adding there should be safeguards against discrimination against women by their beliefs.

The NEDA study took in data from 63,327 male and 61,387 female subjects, aged between 15 and 65. The sample was obtained from 2015 merged data sets of PSA’s Family Income and Expenditure Survey (FIES) and the Labor Force Survey (LFS). It also employed a qualitative survey and focus group discussions. — Gillian M. Cortez

Developing-country debt at moderate levels relative to investment needs — World Bank

EXTERNAL debt taken on by developing countries grew to $7.8 trillion in 2018, a level considered “moderate” for a segment of the world economy that needs to invest heavily in development, the World Bank Group said.

Total external debt of low- and middle-income countries rose 5.3% last year but on a net debt flow basis — or gross disbursements less principal payments — external debt fell 28% to $529 billion, according to the World Bank’s International Debt Statistics 2020 report.

The Philippines is currently classified as a lower-middle-income economy. Socioeconomic Planning Secretary Ernesto M. Pernia is projecting the Philippines as a possible upper-middle-income country by next year.

World Bank Group President David Malpass said low- and middle-income countries will need more investment to spur their economies.

“To grow faster, many developing countries need more investment that meets their development goals,” Mr. Malpass was quoted as saying in a statement.

The bank said the overall debt stocks saw a 15% jump in Chinese debt as investors sought out renminbi-denominated assets, it said.

Net debt inflows to developing countries from multilateral creditors likewise jumped by 86%, “principally due to the International Monetary Fund’s support for Argentina,” it said.

Meanwhile, bond issues declined 26% to $302 billion in 2018 due to heightened global uncertainty, a tighter capital market and credit ratings downgrades.

“Issues in 2018 were characterized by longer maturities and all were oversubscribed,” it added.

National Treasurer Rosalia V. De Leon said the Philippines continues to favor borrowing from domestic sources amid strong liquidity in the economy and to reduce the exposure to global crises.

“Funding continues to have an onshore bias to take advantage of strong liquidity and lessen vulnerability to external headwinds,” Ms. De Leon said in a phone message.

The national government’s outstanding debt rose 1.73% or P135.03 billion from a month earlier to P7.939 trillion as of end-August, due to the peso’s depreciation and net issuances of both external and domestic loans.

Of the total stock, 33.59% came from external markets while 66.41% was borrowed locally.

The government plans to source 73% of its funds locally and borrow the remaining 27% from foreign creditors.

It is looking to raise P1.189 trillion this year from to fund its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product.

Meanwhile, Mr. Malpass also said debt transparency across all government agencies is a “critical” part of encouraging more investment.

“Debt transparency should extend to all forms of government commitments, both explicit and implicit. Transparency is a critical part of attracting more investment and building an efficient location of capital, and these are essential in our work to improve development outcomes.” — Beatrice M. Laforga

Meat importers blame smuggled pork for swine fever outbreak

MEAT importers said smuggled pork is the likely source of the African Swine Fever (ASF) outbreak because such meat products skipped the inspection process that legal imports are subjected to.

“The source of ASF infection can only come from smuggled, illegal, undocumented entry of foreign [pork],” Jesus C. Cham, president of the Meat Importers Traders Association, told a House committee hearing on the ASF outbreak.

He noted that legally imported pork typically undergoes inspection at the source.

“I know that legal, documented imported meat cannot be the source of ASF infection because the meat of all these animals, each and every animal, had been inspected by a government inspector in an exporting country, both ante-mortem and post-mortem, that means they were inspected when it was still alive and after slaughter,” Mr. Cham said.

The Department of Agriculture (DA) confirmed last month the first outbreak of ASF in the Philippines. Areas with confirmed outbreaks are Guiguinto, Bulacan; Rodriguez and Antipolo, Rizal; Quezon City; Pampanga; and Pangasinan.

Meanwhile, Philippine Association of Meat Processors, Inc. (PAMPI) president Felix O. Tiukinhoy said that processed meats which are cooked or smoked are “perfectly safe for human consumption.”

“Processed meat products which are fully cooked and smoked, whether they be made of pork meat or chicken, are subjected to heat treatment of 17 to 121 degrees celsius,” Mr. Tiukinhoy said.

He added, “[At] this temperature, harmful materials and viruses including the ASF virus are killed and destroyed.”

The meat processing industry has said it is expecting at least a 5-10% reduction in the value of its annual production because of restrictions on processed meat product distribution in selected provinces. — Vince Angelo C. Ferreras

Shipbuilders, other firms in line for Hanjin assets — SBMA

A SUBIC freeport official said potential investors from within and outside the shipbuilding industry are lined up to negotiate with creditors of failed shipyard Hanjin Heavy Industries and Construction Philippines, Inc.

First in line for exclusive talks is a foreign shipbuilder that is not Chinese, Subic Bay Metropolitan Authority (SBMA) Chairman Wilma T. Eisma told reporters on the sidelines of a Senate budget hearing Wednesday.

“It’s not a Chinese company, but a foreign company. Right now, ang alam ko (from what I know) is it’s a shipbuilding company. Right now, naka-lock-in. (Talks are locked-in) If they fail, there’ll be another lock-in with other interested parties in line.”

In August, the court-appointed Hanjin Heavy receiver reportedly identified the other party in exclusive talks as Australian shipbuilder Austal Ltd., of Perth.

Ms. Eisma, who said parties to the negotiations prefer not to be identified, also noted that talks could finish by December “or even sooner” and that other investors from various industries are showing interest in taking over the assets, which include a 300-hectare site.

“With the value of asset close to $2 billion, (the debt is only) $412 million,” so any investor will be ahead on asset value alone, she added.

She said the potential investor plans to continue operating the yard because of the presence of a trained workforce.

She said Hanjin Heavy at peak had 33,000 employees, and wound down to about 3,000. The yard is currently staffed by a skeleton crew of 300.

“Depending on the business plan of the Hanjin Heavy white knight, as far as I know, it’s going to be shipbuilding,” she added.

Hanjin Heavy, whose South Korean parent also collapsed, filed for corporate rehabilitation in January.

The failed company owes $145 million to Rizal Commercial Banking Corp.; $85 million to Land Bank of the Philippines; $70 million to Metropolitan Bank & Trust Co.; $60 million to BDO Unibank, Inc. and $52 million to the Bank of the Philippine Islands. — Beatrice M. Laforga

DA signs up co-ops to supply RCEF-funded rice seed

THE Department of Agriculture (DA) has identified seed growers’ cooperatives and associations that will supply certified in-bred seed to rice farmers as part of input distributions authorized by the Rice Competitiveness Enhancement Fund (RCEF).

“Mabibigyan natin sila (Distribution will be) staggered from October to December” to account for the varying planting periods, depending on availability, Flordeliza H. Bordey, the deputy executive director for special concerns who is overseeing the implementation of RCEF, told BusinessWorld after the signing ceremony for the memorandum of agreement (MoA) between the DA and the seed growers on Tuesday.

The MoA is worth P432.78 million, out of the P2 billion allocated for the seed program under the RCEF.

The seed growers are the Pangasinan Organic Seed Growers and Nursery Multi-purpose Cooperative; Isabela Seed Growers Multi-purpose Cooperative; Nueva Ecija Seed Grower Multi-purpose Cooperative; South Nueva Ecija Seed Growers Multi-purpose Cooperative; and the West Visayas Federation of Multi-purpose and Seed Producers Cooperatives.

In a statement, the agriculture department said two million bags of rice seed of 20 kilos each will be planted to one million hectares with an initial 57 provinces targeted for seed assistance.

To qualify for RCEF assistance, individual cities and municipalities must have more than 500 hectares of harvested land during the dry season planting in the 2019 and 2020 seasons.

Qualified farmers must be listed in the Registry System for Basic Sectors in Agriculture (RSBSA). Each farmer will receive a maximum of four bags of in-bred seed depending on the size of the planting area.

“With the Seed Program of RCEF, we would like the Filipino rice farmers to be more productive, more competitive, and more profitable at the end of the day,” Agriculture Secretary William D. Dar said. — Vincent Mariel P. Galang

Subic airport being positioned for budget airlines

THE Subic airport is expected to be ready for international service by mid-2020 with upgraded equipment delivered, a Subic Freeport official said, adding that the airport is being positioned for use by budget airlines.

“The navigational aids that we bought are already starting to be delivered, so I’m hoping that by December, all that will be installed and operational. Ang target namin nila (our target with Transportation Secretary Arthur P.) Tugade is middle of 2020 (for) everything (to) be in place,” Subic Bay Metropolitan Authority (SBMA) Chairman Wilma T. Eisma told reporters Wednesday.

“Tina-target ko talaga sya for a budget airline… Kasi mahirap pag makipag-compete dun sa major airlines sa Clark so parang gusto kong magniche for budget airlines (The target is a budget airline because it will be difficult to compete for major airlines with Clark),” she added.

She clarified that the Subic airport is currently operational but is still in the process of “building it up to make it operational in an international capacity.”

She said the budget to upgrade the airport was P553 million in 2018. — Beatrice M. Laforga

Fitch sees PHL pork output declining 1.5% in 2020

PORK production in the Philippines is expected to decline 1.5% in 2020 as the hog industry in China and Southeast Asia suffers setbacks due to the outbreak of African Swine Fever (ASF), Fitch Solutions Macro Research said.

In an Oct. 1 analysis, Fitch Solutions said: “Pork production will sharply decline in China and Southeast Asia in 2019 and 2020, with production growth remaining subdued thereafter at the earliest,” Fitch said in its note, “African Swine Fever: SE Asia Food Inflation Risks As Disease Spreads.”

“In particular, we have revised down our 2019 pork production forecast for Vietnam to 2.4 million tons from 2.6 million tons previously,” it added.

For 2020, Fitch projects pork output of 1.6 million tons for the Philippines, down 1.5% year-on-year. In China, it projects a 5% decline to 35.9 million tons, while Vietnam is projected to see production decline by 3.7% to 2.3 million tons.

“Farmers are unlikely to begin rebuilding herds in these countries while the epidemic is still ongoing, and even when monthly outbreaks subside, it can take up to a year for new animals to be ready for slaughter,” it said.

For South Korea, Fitch maintained its 2019 and 2020 pork production estimates since pigs culled represent less than 1% of its herd. Seoul has reported nine cases since September, with 15,000 pigs culled.

In the Philippines, more than 13 areas have confirmed ASF cases in Rizal, Bulacan, Quezon City, Pampanga, and Pangasinan. The hog cull has totaled about 20,000 head.

China has culled about 2 million pigs, which Fitch said could expedite Beijing’s move to consolidate the industry and force out small farmers.

“Large-scale operators will most likely invest in production capacity in the coming years and will be able to help ramp-up China’s pork output from 2021-2022 onwards,” it said.

Vietnam has culled over 4.7 million pigs.

Fitch said the risk to food prices is already showing up in China, where the wholesale prices of pork has reached an average of 35 yuan per kilo as of August, double the price since the beginning of the year, while the wholesale prices of chicken has increased 11.5% over the same period.

“Pork prices will soon start to rise in Southeast Asia as well,” Fitch noted.

Fitch noted that affected countries may have a hard time importing pork since international prices have also risen, leading to a decline in pork consumption in these areas.

“We have revised down our 2020 pork consumption forecasts for China, Vietnam, and the Philippines, expecting year-on-year declines of 2.0%, 5.0%, and 1.0%, respectively,” it said. — Vincent Mariel P. Galang

Managing the import duty impact of CITIRA

The proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) or House Bill No. 4157, the successor to the TRABAHO bill, seeks to gradually cut the corporate income tax rate of 30% down to 20%, in exchange for the reduction of incentives granted by investment promotion agencies like the Philippine Economic Zone Authority (PEZA). CITIRA proposes to limit the perpetual grant of a preferential tax rate and to cap import duty exemptions to a maximum of five years. The House approved the bill on third and final reading in September, and when the Senate is ready with its own version, both chambers will sit down in bicameral session to harmonize both bills.

The Department of Finance is pushing for enactment by the end of the year despite appeals from PEZA and various business organizations. PEZA, in particular, has expressed opposition to the removal of tax perks. And there’s a reason for it to be worried. While it is primarily anxious about losing fiscal incentives, the limits on import duty exemptions will also hit its constituency, the locators.

According to PEZA data, 52% of its more than 3,000 registered companies are export-oriented manufacturers. These manufacturers process imported raw material with machinery sourced from overseas. Currently, all their imports are tax and duty-free, which makes customs clearance seamless — passing without detailed scrutiny on the value of goods and assignment of commodity Harmonized System (HS) codes. The faster customs clearance time allows them to operate efficiently and meet export demands expeditiously.

Apparently, things will be different once Customs starts to collect duties from them. While there can be several measures to ease the potential delays, the daunting prospect of paying customs duties remains. The Most Favored Nation (MFN) duty rates for manufacturing imports usually range from 0-30%, which impacts cash flow and profit. Because of this, it is necessary to prepare for the worst-case scenario and manage the implications of paying import duties.

To ease the impact of the anticipated legislation, allow me to share some adjustment measures that taxpayers may consider implementing.

REVIEW HS CODES AND ANALYZE DUTY EXPOSURE
First, know how much it costs to pay import taxes by identifying the duty rates of each raw material and machinery based on HS codes. If during the analysis, there are variations in HS code and duty rates used, or there are different kinds of materials falling into one HS code, the chances of misclassification are greater. The company can either be declaring a higher or lower duty rate, creating a risk of duty compliance.

HS code classification review can help to correct and ensure an accurate calculation of duty exposure. The HS code is essential not only because it determines the rate of duty but also the possible import restriction and licensing requirements, safeguard duties, and tariff concessions that affect customs cost.

Classification planning can reduce duty and risk exposure when incentives are lifted by checking for HS codes that provide a favorable duty rate. One classic example is shipping goods together to change the HS code classification. Shipping machine parts individually may result in payment of more duties as compared to sending parts that are grouped together and consequently, change HS code and duty rate. When adopting this measure, attention must be taken to ensure compliance.

LOOK FOR DUTY-SAVING OPPORTUNITIES
There are tariff concessions granted to the Philippines in several Free Trade Agreements (FTAs) through its ASEAN membership and trade agreements with Japan and the European Free Trade Association that reduce or eliminate high-duty rates for qualifying imports. For instance, a company can claim 0% tariff using the ASEAN FTA benefit for importing a particular testing instrument, instead of paying a 3% MFN duty.

To secure this benefit, a company must start to: (a) assess current suppliers to see whether they are situated in territories where the Philippines has an existing FTA; (b) check if raw materials and machinery are covered in the duty reduction list and what tariff schedule applies in the Philippines; (c) carry out a benefits comparison when there are several FTA options; and (d) communicate with suppliers to arrange for a Certificate of Origin.

If for some reason, the existing suppliers or materials can’t meet the qualifications, then restructuring of procurement sourcing, or changing the qualifying method of materials are other options to explore.

PROCESS REFUND
For inevitable duty payments, companies can apply for refunds to recover duties collected from the importation of raw materials. The duty drawback scheme allows exporters to claim a refund on customs duties paid on imported raw materials used as inputs to produce export goods. The requirements and processing, however, can be cumbersome as exporters or manufacturers need to make an elaborate presentation of bills of material, production data, import and export shipping documents, and evidence of customs duty and tax payments to substantiate the application. In general, the process takes 60 days at the Department of Finance and another 60 days at the Bureau of Customs.

The actual export of goods must be made within a year after the importation of raw materials, and the timing of the filing of claims must be made within six months from the date of export to ensure approval of the application for duty drawback.

Preparation for duty drawback can be efficiently performed through: (1) planning of import and export activities to match the timing requirement; (2) reviewing bill of materials to identify import components; (3) gathering and recording evidence of import payments; (4) capturing export transaction, and (5) designating a responsible person to oversee and carry out the refund process.

Managing the duty aspects of trade can be a highly technical undertaking and challenging process, but it can yield substantial returns if done efficiently and proactively. While the consolidated bill has yet to be drafted, deliberated and passed by legislators, companies that stand to be affected should begin planning their contingency measures. Regardless of CITIRA’s final version, one can never go wrong preparing for the worst though hoping for the best.

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

 

Luningning M. Pizarra is a Manager at the Worldtrade Management Services of PricewaterhouseCoopers WMS Pte. Ltd. — Philippine Branch.

+63 (2) 459 2005

luningning.m.pizarra@pwc.com

Philippines to protest China presence near shoal

FOREIGN Affairs Secretary Teodoro L. Locsin, Jr. yesterday ordered the filing of a diplomatic protest against China over the presence of its ships near Second Thomas Shoal in the South China Sea.

“I’m in Moscow. Do I have to fly home to file the diplomatic protest myself?” Mr. Locsin said in a social media post past midnight on Wednesday. “File now.”

Mr. Locsin was in Russia to accompany President Rodrigo R. Duterte on his second visit there.

The Philippine military has reported the unannounced entry of Chinese vessels near the shoal to the Foreign Affairs department for appropriate diplomatic action, Armed Forces Chief of Staff Noel S. Clement told reporters at the Senate on Tuesday.

He said the agency would have to decide whether there was a violation.

Mr. Clement said the report was made through the task force on the West Philippine Sea, Manila’s name for areas of the South China Sea within its exclusive economic zone.

Mr. Locsin earlier threatened to fire off diplomatic protests against China’s incursions in the South China Sea.

The Philippine has protested the presence of Chinese warships and survey ships within its exclusive economic zone.

Protests were also filed over the presence of Chinese vessels near Thitu island in the South China Sea.

Last week, Washington-based think tank Center For Strategic and International Studies, through a brief released by the Asia Maritime Transparency Initiative, said China was sending larger but lightly armed coast guard vessels around Ayungin Shoal, Luconia shoals in the Spratlys and Panatag Shoal up north.

Ayungin is the Philippine name for Second Thomas Shoal and it calls the Scarborough Shoal Panatag.

More heavily armed vessels carrying 76 mm cannons have also patrolled the region but have been more frequently seen since last year in larger deployments such as those near the Philippine-occupied Thitu or Pagasa Island.

These large Chinese coast guard ships numbering as high as 14 have been broadcasting their presence using transponders while patrolling around these shoals. Other Chinese vessels deployed in the region but doing patrols in other areas have their transponders turned off, according to Asia Maritime Transparency.

Manila earlier criticized China after a coast guard ship in May allegedly blocked three Philippine vessels trying to bring supplies to a navy ship that was deliberately run aground at the Second Thomas Shoal in 1999.

The Chinese Coast Guard ship had blocked the Philippine ships on a resupply mission in May to BRP Sierra Madre at the South China Sea shoal, according to the Defense department.

Last month, the Armed Forces said at least five Chinese warships had passed through the Sibutu Strait in Tawi-Tawi province in southern Philippines without notice.

The Palace has said that authorities would “shoo away” unauthorized foreign vessels including Chinese warships that pass through Philippine waters and use military force if necessary.

In his fifth visit to China, the President invoked a 2016 ruling by an international arbitration panel in the Hague that rebuffed Chinese claims over parts of the South China Sea.

The United Nations tribunal in July 2016 ruled China’s efforts to assert control over the South China Sea exceeded the law, rejecting its shared claims with Taiwan to more than 80% of the main waterway.

China rejected the decision of the international court, which has failed to halt its island-building activities in areas also claimed by the Philippines, Vietnam, Brunei, Malaysia and Taiwan. — Charmaine A. Tadalan

2 Filipinos die after Taiwan bridge caves in

RESCUERS in Taiwan were searching on Wednesday for two foreign fishermen believed to have been trapped in boats crushed after a bridge collapsed into a northeastern harbour, killing four people, authorities said.

Two of those who died were Filipinos, the Philippine Labor department said in a statement yesterday. Rescuers were still trying to find another Filipino at the site, it said.

Divers joined hundreds of rescuers in the search effort, using cranes and excavators to raise the wreckage of two fishing boats after Tuesday’s accident injured 10 people, most of them fishermen from Indonesia and the Philippines.

“As of 8:48 a.m., rescuers found the body of a foreign fisherman, while the search for two missing foreign fishermen continues,” Taiwan’s National Fire Agency said in a statement.

One body was pulled from waters near the crash site while divers combed the wrecks for the missing fishermen.

Dramatic video images released by Taiwan’s Coast Patrol Corps showed the arched bridge collapsing just as an oil tanker was crossing. Plumes of black smoke went up after the cargo of fuel burst into flames.

It was not immediately known what caused the collapse, which crushed three boats and set the tanker ablaze in the town of Suao. The bridge, dubbed the “lovers’ bridge,” was built in 1998, and attracted tourists.

The rare incident shocked many in Taiwan, which is regularly hit by earthquakes and typhoons and has high building standards, prompting authorities to launch a review of old bridges.

The government has set up a task force to investigate, with President Tsai Ing-wen vowing not to “evade responsibilities.”

The Nanfangao bridge was regularly checked and maintained,” Taiwan International Ports Corp., which managed the bridge’s maintenance, said in a statement, adding that it had observed safety regulations.

The bridge was last reinforced in 2018 and another security check was due next year, the company said. Problems such as rusty steel and cracks in concrete had been fixed during a check last October, it added.

The Labor department said it would pay for the return of the Filipinos’ remains to the Philippines. — Gillian M. Cortez with Reuters

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