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Energy regulator approves reduction in feed-in tariff allowance

THE Energy Regulatory Commission (ERC) said Tuesday that it approved a feed-in tariff allowance (FiT-All) of P0.0495 per kilowatt-hour (kWh), or lower than what was applied for by the government corporation that handles the collected amount from consumers.

“The ERC, in computing the 2019 FiT-All rates, made use of the actual generation billed and the actual cost recovery rate from January until August 2019, among others,” ERC Chairperson and Chief Executive Office Agnes VST Devanadera said in a statement.

The regulator said the approved rate is lower by P0.1976 per kWh compared with the P0.2471 per kWh rate proposed by National Transmission Corp. (TransCo) for 2019. It will also be lower than the P0.1731 per kWh reduction from the current or 2018 FiT-All rate of P0.2226 per kWh.

In coming up with the final rate, the ERC said it considered the feed-in tariff-eligible plants with a certificate of compliance for FiT, and the 2019 forecast incoming run-of-river hydroelectric power and biomass plants.

It said it factored into the computation the extension approved by the Department of Energy (DoE) of the 250-megawatt installation target for the two types of power plants up to Dec. 31, 2019 or its full subscription, whichever comes first.

In its proposal, TransCo estimated an under-recovery of about P122.7 million, but the ERC used the actual over-recovery in the books of the state company as of Oct. 7, 2019 amounting to P6.7 billion.

Ms. Devanadera said the approved FiT-All will be charged to all on-grid consumers supplied with electricity through the distribution or transmission networks starting on the immediately succeeding billing period after TransCo’s receipt of the ERC decision.

“The 2019 FiT-All will result in a reduction in the existing FiT-All rate and will increase the consumers’ purchasing power,” she said.

Asked to comment, the head of consumer group Laban Konsyumer, Inc. (LKI) said he was “feeling happy” after the ERC decision.

In a mobile phone message, LKI President Victorio Mario A. Dimagiba said his group “feels relieved that the regulator listened to our standing advocacy” to reduce the feed-in tariff allowance.

He said a P0.04-per-kWh reduction was submitted by his group to the ERC last year.

“However, LKI reserves (the right) to review the decision on the interest earned by TransCo in the P6.7-billion surplus. How much is the interest earned and should be refunded also to the consumers,” he said.

The FiT-All mechanism was created after the passage of the Renewable Energy Act of 2008, which aims to encourage the development of emerging renewable power sources such as wind, solar, run-of-river hydro, and biomass facilities.

Calculated and set yearly, the FiT-All is a uniform charge in pesos per kWh payable by all electricity users. Distribution utilities, privately owned power grid operator National Grid Corporation of the Philippines, and retail electricity suppliers serve as collecting agents. The proceeds go to the FIT-All fund, which is administered by TransCo. — Victor V. Saulon

Japan warns about risks to economy from China virus outbreak

TOKYO — Japanese Economy Minister Yasutoshi Nishimura warned on Tuesday that corporate profits and factory production might take a hit from the coronavirus outbreak in China that has rattled global markets and chilled confidence.

Asian stocks extended a global selloff as the outbreak in China, which has killed 106 people and spread to several countries, fueled concern over the damage to the world’s second largest economy — an engine of global growth.

“There are concerns over the impact to the global economy from the spread of infection in China, transportation disruptions, cancellation of group tours from China and an extension in the Lunar Holiday,” Nishimura told a news conference after a regular cabinet meeting.

“If the situation takes longer to subside, we’re concerned it could hurt Japanese exports, output and corporate profits via the impact on Chinese consumption and production,” he said.

Automaker Honda Motor, which has three plants in Wuhan, the capital of Hubei province and the epicenter of the outbreak, plans to evacuate some staff.

China is Japan’s second largest export destination. In addition to carmakers, retailers have also become heavily dependent on the country amid Japan’s slow economic growth and shrinking demographics.

Fast Retailing, which operates the popular casual clothing chain Uniqlo, said it had temporarily closed about 100 stores in and around Hubei.

Retail giant Aeon said it was keeping its five supermarkets in Wuhan open after local authorities requested they continue their operation, although some of its mall shops were shut.

The outbreak could hit Japanese department stores, retailers and hotels, which count on a boost to sales from an inflow of Chinese tourists visiting during the Lunar Holiday.

The Chinese make up 30% of all tourists visiting Japan and nearly 40% of the total sum foreign tourists spent last year, an industry survey showed.

“We’re worried that sales and the number of shoppers could fall if the outbreak persists,” said a public relations official at Isetan Mitsukoshi Holdings, a major Japanese department store operator.

“It’s not just about Chinese tourists. We’re also worried that concern over the outbreak may keep Japanese shoppers home.”

Economists at SMBC Nikko Securities estimate that if a ban China has imposed on overseas group tours lasts another six months, it could hurt Japan’s economic growth by 0.05%.

Some expect the potential damage could be much worse.

Hideo Kumano, chief economist at Dai-ichi Life Research Institute, said the decline in tourists from China could hurt Japan’s GDP growth by up to 0.2%.

“The biggest worry is the risk the negative impact from the outbreak persists and hits (the economy) during the Tokyo Olympic Games,” when a huge number of Chinese tourists are expected to visit Japan, he said.

“If the number of visitors decrease rather than increase, the hit to Japan’s consumer industry will be quite large.”

Japan will host the 2020 Olympics in July and August. — Reuters

DPWH completes Samar evacuation center

DPWH logo

THE Department of Public Works and Highways (DPWH) said Tuesday it completed a P36-million regional evacuation center in Catbalogan, Samar and the P96.50-million road dike project in Gubat, Sorsogon.

The DPWH said the new regional evacuation center in Catbalogan, Samar has been turned over to the local government.

“Assistant District Engineer Ruben D. delos Reyes of DPWH Samar 2nd District Engineering Office led the turnover ceremony of the new facility together with representatives from the Office of Civil Defense (OCD) Regional Office 8 and local officials of Catbalogan City,” the department said in a statement Tuesday.

The department added: “It can accommodate a maximum of 150 households from the city or neighboring towns.”

The building project covers the construction of a pharmacy, toilets, and laundry areas, among others.

“The construction of the complex will help reduce or prevent casualties and lessen the physical impact that may affect the health of the residents,” Mr. delos Reyes was quoted as saying.

The department added: “The construction of the dike road was completed by DPWH Regional Office 5 in October 2019 in the amount of P96.50-million funded by the 2018 General Appropriations Act.”

“The project also covers the provision of shoulder, lined canal, rock and earthworks, guardrails, slope protection, and deflector,” it added.

The DPWH said the project is a “two-in-one road and dike project” situated along the coastal barangays of Panganiban, Pinontingan, and Ariman in Gubat.

Public Works Secretary Mark A. Villar said: “Originally aimed to protect this coastal area from flooding and rising seas, as well as provide alternative road to motorists, this 374-linear meter road dike is now attracting tourists as it showcases scenic views of the sea.”

The department also reported Tuesday that the rehabilitation of the 8.24-kilometer San Luis-Binicalan Road in Agusan del Sur, which is worth P147.75 million, is now “79% complete.” — Arjay L. Balinbin

Unlocking the secrets of cash-based budgeting

By Charmaine A. Tadalan
Reporter

LEGISLATORS claim to have spotted another flaw in the cash-based budgeting system, which obliges project funds to be used within one year — a reluctance to start new projects in the third quarter.

The Department of Budget and Management (DBM) has acknowledged this scenario, but calls it preventable if government agencies comply with the rules governing the one-year obligation period for budget funds.

The 2020 National Expenditure Program (NEP) was put into place in the second year of cash-based budgeting, after the much-delayed 2019 budget was held hostage over concerns that project funds might be unspendable due to the one-year limit.

The system allows a three-month Extended Payment Period, provided the goods and services have been delivered, verified and inspected within the fiscal year.

The new budget framework is designed to improve fiscal management, but Finance Committee Chairman and Senator Juan Edgardo M. Angara said agencies might not be inclined to implement new projects beginning September.

“It will force agencies to prepare better and process projects faster,” Mr. Angara said in a Nov. 22 mobile phone message.

“But it’s double-edged because come September or October, agencies may have second thoughts about starting projects knowing the may not be completed by end of that year.”

As late as December, the House of Representatives and the Senate were still deliberating the P4.1-trillion national budget for 2020 at the bicameral conference committee level, before eventually passing the bill on to President Rodrigo R. Duterte, who signed it earlier this month.

The House approved its version, House Bill No. 4228, on Sept. 20; while the Senate passed its version of the spending plan on Nov. 27. The bill had been certified by the President as an urgent measure allowing both Chambers to approve their respective versions on second- and third-reading on the same session day.

Representative Jose Ma. Clemente S. Salceda of Albay’s second district said this “reluctance” reflects the need to ensure that implementing agencies have improved planning capacity as they adopt the new framework.

“Cash-based budgeting assumes there is good planning capacity inside the departments,” Mr. Salceda, who is also House Appropriations Committee Vice Chairman, said in a Nov. 27 interview with BusinessWorld.

“The planning capacity of implementing agencies may need to be boosted in order to comply with, para ’yung nasa budget exact na sa ma-e-execute nila for the year (in order for them to utilize the full budget for the year).”

Another aspect that needs to be improved is the government’s right-of-way acquisition, which has hampered development of key infrastructure projects for years.

“Malaking kawalan sa ekonomiya kasi nga (It’s a great loss to the economy because delayed projects) deprive the economy of the stimulus coming from infrastructure, which are generally job-producing and create GVA (Gross Value Added),” Mr. Salceda said.

Public works “expand the capacity of the economy to produce output via the provision of public goods, which will serve as basis for investment as well as basis for the mobility of goods and services and people.”

He said many such delays could be addressed through the proposed Real Property Valuation and Assessment Reform Act, which seeks to centralize valuation and assessment to provide a uniform valuation standard. This will then serve as the basis for appraisers and assessors in adjusting property taxes in their respective local government units.

The measure forms part of the administration’s comprehensive tax reform program, which Mr. Duterte mentioned in his fourth State of the Nation Address on July 22. The proposal is embodied in House Bill No. 4664, which won final approval at the House on Nov. 25; but its equivalent legislation remains pending at the Senate Committee on Ways and Means.

At present, most local government units utilize outdated real property values which result in valuation disputes that take years to settle.

Case in point is the Marikina Bridge and Access Road, which took 17 years to resolve. Mr. Salceda reported that between 2000 to 2017, assessors valued the property at P6,000-P37,050 per square meter as a result of conflicting assessment methods.

“For the benefits of a cash-based budgeting to be felt and to become real, you need other elements to come in and I will always go back to planning capacity, then right-of-way acquisition,” Mr. Salceda said.

The DBM, meanwhile, allayed concerns about government agencies hesitating to implement new projects around September or October; but for the most part, encouraged agencies to prepare their budgetary plans for the succeeding year beginning July to August.

“In the cases that for one reason or another, may nangyari sa procurement (in case procurement is delayed), you can start the project as well by September or October, but that means you’ve got to be able to appropriate the same project for the next year para may (so that there will be) continuity,” Undersecretary Laura B. Pascua said in a Dec. 5 interview with BusinessWorld.

“You just have to be able to anticipate which project schedules will flow to the next budget and be sure there are appropriations for that.”

Ms. Pascua leads the Department’s Budget Policy and Strategy Group, and the Supervision of the Fiscal Planning and Reforms and Budget Information and Training Services.

The DBM officially kicked off the shift to a cash-based budgeting system in 2019 from the multi-year obligation budgeting system, as affirmed under Executive Order No. 91, s. 2019. Prior to this the DBM eased in the transition by beginning to limit budget validity to two years for the 2017 spending plan and to one year for 2018.

Ms. Pascua noted that based on DBM assessment, obligation rates of agencies improved in 2017-2018 against their performance in 2015-2016. In 2017, agencies’ obligation rate rose to 95.6% from 85.4% and 84.6% in 2015 and 2016, respectively.

Rates declined to 93.1% in 2018, which the DBM attributed to late procurement activity and failed bids.

“The essence (of a cash-based system) is you focus on the implementation for the year, which means that: one, you do your planning way ahead of time,” she said.

“And number two, procurement is very important. That’s why we encourage agencies to do their procurement during the last half of the year,” she said, noting that ideally agencies should begin procurement activities once the President submits the NEP to Congress for deliberation.

Ms. Pascua said at this time, government agencies may begin early procurement activity concerning items that the DBM has already included in the budget. The Government Procurement Policy Board, for its part, constantly updates the implementing rules and regulations of the Government Procurement Reform Act of 2003, or Republic Act No. 9184.

The GPPB also capacitates government agencies through training and regular consultations on the procurement process to complement the new budget framework.

“The Government Procurement Policy Board (GPPB) ang ginagawa nila (what they’re doing is), they’re doing the rounds of departments training, they consult regions kung ano ’yung mga problema sa (on problems regarding) procurement,” she said.

On top of this, the 18th Congress can aid in improving the procurement law by doing away with the lowest-bidder policy, which assumes that the most advantageous bid is the contract the offers the least cost.

“They think that government only procures on the basis of cost, but you should also consider the same spec(ifications) and then you compare the cost,” she said.

“To discourage that way of thinking that government only procures on the basis of cost, gagawin na lang (instead we will change the policy to) ‘most advantageous bid’ to consider the specs and the cost.”

Currently, only Senator Aquilino L. Pimentel has filed a Senate Bill that proposes the same; but no such measure has emerged in the House of Representatives. The measure was not tackled in the 17th Congress as it was not backed by then-DBM Secretary Benjamin E. Diokno.

The DBM also disclosed it will be pushing for the institutionalization of the cash-based system, which it hopes the 18th Congress approves before the first regular session closes on June 5.

LGU role in solid waste a hurdle in waste-to-energy projects

A BILL outlining the regulatory regime for waste-to-energy facilities is encountering various hurdles because local governments, which are now responsible for managing solid waste, may not have the resources to pursue such projects.

“There are two constraints. From the hearing, I can see that this is a very complicated bill,” Senator Sherwin T. Gatchalian, who proposed the bill, told reporters after a Senate hearing on the measure Tuesday.

“Complicated in a sense na ang (that) solid waste management is a devolved function to the local government. But… waste-to-energy (involves) high capital expenditure, meaning you need scale, kailangan mo malakihan (You need a big investment),” he added.

Mr. Gatchalian introduced Senate Bill No. 363 in July during the 18th Congress. The proposed legislation seeks to establish a national energy policy and framework for facilities using waste-to-energy (WTE) technologies.

He said reconciling the devolved function of solid waste management and the big investment needed to build a WTE facility is complicated as many local government units (LGU) do not produce enough waste; neither do they have the financial capability to finance a project to generate energy from waste.

Mr. Gatchalian earlier said that the passage of the bill would help solve the country’s perennial garbage problem. He had said that the measure will not only encourage the development of new technologies in the treatment and disposal of solid waste, but also supports the expansion of bioenergy to attain sustainable energy.

During the hearing, he asked the departments of Energy, Environment and Natural Resources, and Science and Technology to come up with a comprehensive study on waste-to-energy facilities.

“What we want is for these three departments to get together, come up with a preliminary study to look at the capacity, to look at the potential for energy, to look at the environmental concerns as raised by some sectors so that we will have some preliminary idea on how waste to energy can solve our solid waste issues,” he said.

He said WTE facilities, which convert non-recyclable waste materials into useable heat, electricity or fuel through a variety of processes, could be the solution as the three Rs — reuse, recycle and reduce — have proven to be a failure.

“Less than 30% of the barangays conduct three Rs, 70% tinatapon lang kahit saan saan (70% throw their garbage anywhere),” he said.

“On top of that, we have 330 open dumpsites. In the law that was passed 20 years ago, bawal na ang open dumpsites (open dumpsites are not allowed), but because of financial and logistical issues, meron pa tayong open dumpsites (we still have them),” he said.

Ahead of the bill’s passage, local government units such as Davao City and Puerto Princesa City have embarked on WTE projects.

Tristan Dwright P. Domingo, assistant administrator of Davao City, said the city government is trying to “lobby” the national government for P3 billion to help fund the project.

In 2018, the city secured a 5.013 billion yen, or P2.5 billion, grant from the Japanese government for the development of waste-to-energy facilities in Davao City. The project was meant to be an innovative example of sustainable waste management for other cities to emulate.

“Right now, as part of our commitment before we fully utilize the funds we have to have this final feasibility study,” he said in an interview after the Senate hearing.

He said the study, which is now focused on the financial aspect of the project, is scheduled to be completed next month.

“From there, we’ll decide whether to push through with the project or not. If the financial side tells us that it is not viable for us, then the grant would be returned to the Japanese government,” he said. — Victor V. Saulon

Budget 2020: The National Pork?

“Pork barrel” today refers to selective government allocation and spending driven by electoral or political incentives. The term dates back to a time in the West when preserving meat was actually done in wooden barrels for future consumption. The term has since seeped into popular usage as a metaphor for the allocation of political largesse or favors.

According to a study done by De La Salle University political science professor Ronald Holmes, there are three types of pork with two variants each that can be seen in post-Marcos Philippines, namely: 1. Congressional pork (Slush Funds and Earmarks); 2. Presidential projects-based pork (Appropriated and Off-budget); and, 3. Quasi-pork (Impoundment/Augmentation and Blank Check). These are premised on the significant budgetary powers of the President that very actively promotes particular vested interests. These interests signify four “motivations”: 1. Passage of legislation; 2. Election incentive; 3. Political survival; and, 4. Personal enrichment.

Mr. Holmes’ study was designed and conducted prior to the start of the Duterte Administration, hence, it does not include the current regime among its cases. Given the many issues that have now been raised by politicians and observers outside government, we should look more closely at the 2020 National Budget, including the way it was passed from being the National Expenditure Program (NEP), to becoming the General Appropriations Bill adopted by the House of Representatives and the Philippine Senate, to being the General Appropriations Act (GAA) with the signature of the Philippine President.

The P4.1 trillion national budget is seen as being loaded with pork barrel inclusions, what with, among others, its accommodation of huge intelligence funds and increased Special Purpose Funds (SPF) allocation, while slashing other funds after it was passed at the House of Representatives. Intelligence funds are unaudited sums of money while SPF are appropriations provided to cover expenditures for specific purposes which the recipient departments/agencies have not yet identified during budget preparation.

To illustrate, under the Office of the President alone, the allocated confidential and intelligence expenses totals P4.5 billion. This does not even include what is tucked into the huge national defense chest.

Then there is this: there was P633.44 billion in SPF in 2019, while this year, the SPF is at P684.20 billion. This means a P50.73-billion hike for specific purposes that “have not yet been identified during budget preparation.” This amount is 62% of the total budget for all departments and their agencies. This practice simply eschews transparency, accountability, and the national interest. It is government waste and a prime manifestation of divesting taxpayers’ money. And we seem to have a parallel bureaucracy in our midst.

On Sept. 20, 2019, with President Rodrigo Duterte’s order to expedite things, Malacañang’s budget proposal flew through the House of Representatives with 457 votes to six in favor of passing House Bill 4228 or the general appropriations bill (GAB) for 2020. There were no abstentions.

There are also observations that the budget was not distributed well, particularly in areas that needed it the most. The Congressional Policy and Budget Research Department of the House of Representatives itself shows in one of its published papers that “the budget share of Mindanao has been declining from 15.3% in 2017 to 12.5% in 2019, before inching back to 13% in 2020 (as proposed). Similarly, the shares of Luzon and Visayas steadily decreased during the period 2017-2020. As proposed for 2020, Luzon captures 21.4% of the total NG (national government) budget while Visayas gets 9.3%.”

The National Capital Region (NCR) is getting much more, proportionally, compared to these broader areas. If one were to consider the names of Senators and Representatives who pushed and promoted certain items during the actual budget, one may not be so surprised to note that, among others, there are particular cities that are getting more allocations compared to other areas that are even more needy and thus require more national government support.

It is very possible that even though the budget for education, health, and infrastructure under President Duterte’s administration are prioritized, the real use of such funds will go to favored but not necessarily more needy areas, groups, and constituents. How such favored cities seem to be unduly favored in the national budget allocations despite the fact that there are more needy areas out there could be just the tip of the pork iceberg, as it were.

Such irrational use of our limited resources for particular politicians’ political survival, electoral viability, or personal enrichment, certainly has an impact on our economic state. Aside from mere perceptions of corruption, the continuing practice of pork could be a major factor in the slowing down of our economic growth in the last couple of years.

 

Louie C. Montemar is an Education Fellow at the Stratbase ADR Institute, and a Professor of Sociology and Political Science.

VFA headed for the scrap yard?

Will the VFA be scrapped? What would its far-reaching consequences be to national security and nation-building?

As a result of America’s continued criticism and political interference in the country’s internal affairs, the Visiting Forces Agreement (VFA) is now in trouble. President Rodrigo Duterte’s cup has runneth over, so to speak, with the consortium of regime changers that he’s now making America choose between its selfish political interests and its national security interests in the Indo-Pacific theater.

The trigger was the cancelation of Senator Ronaldo de la Rosa’s US visa on account of his involvement in the anti-drug war as then PNP Chief, most likely due to the Global Magnitsky Act that imposes sanctions on human rights violators. It was seen as another American insult to the president.

The VFA consists of two separate documents. The first is commonly referred to as “the VFA” or “VFA-1” while the second is called the “VFA-2” or “the Counterpart Agreement.” It’s a variant of a Status of Forces Agreement, or SOFA, that applies to troops temporarily in a foreign country, which was hotly debated during the PH-US Bases Talks in the early 1990s. The agreements came into force on May 27, 1999, upon ratification by the Philippine Senate. The US, however, regards these documents to be executive agreements not requiring its Senate’s approval.

VFA-1 essentially allows the US government to retain jurisdiction over its military personnel accused of committing crimes in the Philippines, unless the crimes are “of particular importance to the Philippines.” For crimes without this significance, the US can refuse to detain or arrest accused personnel, or may instead prosecute them under US jurisdiction. Our local courts have one year to complete any legal proceedings. It also exempts US military personnel from visa and passport regulations in the Philippines.

It contains various procedural safeguards such as the right to due process and proscribing double jeopardy. It prevents US military personnel from being tried in Filipino religious or military courts; requires both governments to waive any claims concerning loss of materials (though it does require that the US honor contractual arrangements and comply with US law regarding payment of just and reasonable compensation in settlement of meritorious claims for damage, loss, personal injury or death, caused by acts or omissions of United States personnel); exempts material exported and imported by the military from duties or taxes; and allows unrestricted movement of US vessels and aircraft in the Philippines.

VFA-2, on the other hand, requires the US government to notify Philippine authorities when it becomes aware of the apprehension, arrest or detention of any Philippine personnel visiting the US and, when so requested by the Philippine government, to ask the appropriate authorities to waive jurisdiction in favor of the Philippines, except in cases of special interest to the US Departments of State or Defense. Waiving of jurisdiction in the US is complicated because the United States is a federation of US states and therefore a federation of jurisdictions.

It also contains various procedural safeguards to protect rights of Philippine personnel to due process and proscribes double jeopardy; exemption from visa formalities and guarantees expedited entry and exit processing; acceptance of Philippine drivers licenses; allows carrying of arms at US military installations while on duty; personal tax exemptions and import/export duty exclusions; requires the US to provide health care; and exempts Philippine vehicles, vessels, and aircraft from landing or ports fees, navigation or overflight charges, road tolls or any other charges for the use of US military installations.

President Duterte threatened to abrogate the VFA if the visa cancelation of Philippine personalities involved in the anti-drug campaign and allegations of human rights offenses are not rectified within 30 days. Immediately, the Department of Foreign Affairs (DFA) began the process of termination of the VFA in coordination with the Department of Justice’s (DoJ) review of the procedures required as well as the impact on the Mutual Defense Treaty (MDT) and the Enhanced Defense Cooperation Agreement (EDCA).

His threat was premised on two important points: one, the Philippines is an independent sovereign state with functioning institutions that should be respected by other states; two, the Philippines is no longer a colony or sub-state of the US. More importantly, he wants to review and correct all onerous contracts that are disadvantageous to the Philippines. That’s part of his job, his duty and responsibility as Head of State.

The US gave him the opening to subject the VFA to such a review conducted by the DFA, DoJ, and the Department of National Defense (DND) which will study the potential impacts to the MDT and EDCA. The MDT itself is outmoded in that no longer provides relevant mutual security in the 21st century. Defense Secretary Delfin Lorenzana has expressed the view that it should be reviewed the soonest possible.

EDCA, on the other hand, provides for increased US military presence in the Philippines. It was an “adjustment in detail” for the implementation of the MDT and VFA. In 2016, the Supreme Court voted 10-4-1 to declare EDCA constitutional, affirming that an executive agreement doesn’t need the Senate’s concurrence. Both the VFA and EDCA are appendages to the MDT, but if one party does not consider them integral to the MDT, its review for appropriate action is the right thing to do.

Clearly Philippine-USA relations are at a crossroads. We want a broad, reciprocal and mature relationship with the US. But does it, really? While our relationship has undoubtedly evolved since 1991, there are lingering issues such as interference, inequality, and lack of reciprocity. Either way, it’s still incumbent on the Philippine government to reach out to the world to strengthen its bilateral and multilateral relations for its long term security, growth and development in a community of free and mutually respecting nation-states.

In the famous words of President Donald Trump, “Let’s see what happens.” My response would be, “Mr. President, make it happen.”

 

Rafael M. Alunan III is a former Secretary of Interior and Local Government and chairs the Philippine Council for Foreign Relations.

rmalunan@gmail.com

map@map.org.ph

http://map.org.ph

Parochial foreign policy

Newly minted senator and former police chief Bato de la Rosa must be smiling with glee at the President’s declaration that he will revoke the Visiting Forces Agreement (VFA) with the USA if they do not issue a US visa to his good friend and fellow Davaeño Bato de la Rosa. OMG, a huge foreign policy switch on behalf of his friend who wants to make a personal, not official, visit to the USA.

For the sake of Bato, who says he just wants to visit his relatives in the USA, we now get more and more vulnerable to China, which has been violating our sovereignty (despite its being affirmed by the UN Arbitral Court) over our West Philippine Sea. The VFA (which is a more honorable agreement with the USA than the military bases which we used to house for them in our territories), it seems to me, is crucial as a deterrent to other alien powers which may have designs over our territories, which even now has been manifested by the growing power that is China.

Because this small and weak government has chosen to deal with the great power that is China on a bilateral rather than multilateral basis, China can ignore the ramming of small fishing boats by their fishing (militia?) vessels. The fishers were merely out to make a living and to provide protein for our people! China, as far as I know, has not apologized for the abandonment of our victimized fishers who could have drowned in our own waters, were they not rescued by the dauntless Vietnamese. (The Vietnamese people, after all, once defeated their colonists, France and the mighty armed forces of the United States of America. And they have also managed to fend off attempts by China to dominate them, even fearlessly sending their armed Coast Guard to confront the Chinese vessels encroaching into their own territories. The Chinese, according to the news, retreated!)

As usual, the presidential spokesperson explains as an afterthought that President Duterte had many reasons for the decision to abrogate the VFA. That it was not just in exchange for a US visitor’s visa for his friend. The President, it was alleged, had merely reached the end of his patience with the US following a series of offenses against his prerogatives as the chief executive of our country. These include some US senators’ resolutions against politicians for the unjust detention of Senator Leila de Lima.

The President cannot seem to get out of his Davao Mayor mindset, even when it comes to foreign policy. No matter what his spokesman says, Duterte himself, no less, had announced his decision to abrogate the VFA unless the USA issues a visa for his fellow Davaoeño (who is the mastermind behind Oplan Tokhang in which law enforcers knock on a suspected drug trafficker or drug addict’s home to persuade them to surrender and stop their illegal activities, which is alleged to have led to killing sprees against suspected barangay-level drug users and pushers, most of whom were young and poor).

We are a small and poor nation with, however, a strategic location that powerful nations are attracted to. If we are using our heads and trying not to get overrun by any of these great military and economic powers, we have to be cunning and sly. It seems to me, accepting China’s preference for bilateral negotiations is the dumb thing to do. Multilateralism is a way of avoiding wars, and therefore of promoting peace. It is also a weapon that the weak can resort to to avoid being bullied by more powerful nations. There is, after all, power in numbers. And the United States happens to be the most powerful county, militarily and economically, in the world. Why can’t we maintain a vestige of support from them? After all, we do have a Mutual Defense Treaty, which is the basis for the VFA. We don’t have to kowtow to either the US or China. We just need to balance their influence against each other, for our own sakes.

We have won our case in the UN Arbitral Court; but this government has preferred to ignore our victory. Indonesia has chosen to assert our victory as a beneficiary of the nullification of China’s claim of a nine-dash line entitlement. A mere cabinet member actually sent a bomb to some Chinese vessels and caused them to retreat from Indonesia’s own territorial waters. Shame on us!

As once-upon-a-time chair of the ASEAN, we threw away our opportunity to mobilize support for our sovereignty over our marine territories. After all, it was the Philippines that filed for and won the sovereignty case at UN Permanent Court of Arbitration at The Hague. Instead, we seem to have become China’s spokesman in the ASEAN, practically replacing impoverished Cambodia which has become a de facto colony of China. How far will our own obsequiousness go?

I am disappointed in Defense Secretary Delfin Lorenzana’s seeming support for Duterte’s declared intention to abrogate the VFA. It seems to me that he should know better.

Where, oh where are the statesmen in our country? We used to have them in plentiful stock: Tanada, Pepe Diokno, et al. Let us hope that at least the advocacies of Retired Justice Antonio Carpio, Former Foreign Affairs Secretary Albert del Rosario, and UP Associate Dean Jay Batungbacal will bear fruit, at least among the youth, someday.

 

Teresa S. Abesamis is a former professor at the Asian Institute of Management and Fellow of the Development Academy of the Philippines.

tsabesamis0114@yahoo.com

Bato-bato sa langit

President Rodrigo Duterte has threatened to terminate the Visiting Forces Agreement (VFA) between the Philippines and the United States of America unless the US reinstates the non-immigrant visa of Senator Roland “Bato” de la Rosa. De la Rosa had a 10-year visa that allowed him to visit the US for brief periods, presumably as a tourist. If he were to go to the US on official business as a member of the Philippine Senate, he would probably not need the tourist visa.

At any rate, it appears that De la Rosa’s visa was canceled as a result of the resolution filed by US Senators Patrick Leahy and Dick Durbin that would prevent the entry into the US of Philippine official involved in the “wrongful incarceration” of Senator Leila de Lima. The resolution was a rider in the 2020 US national budget which President Donald Trump signed into law.

De Lima, a relentless critic of Duterte’s war on drugs, which had resulted in thousands of killings, some of them allegedly extra-judicial, had been accused of criminal involvement with drug lords. While this had all the elements of a frame-up, De Lima was nonetheless arrested and jailed.

This created an international uproar among human rights activists, particularly in the US. Thus the resolution filed by Leahy and Durbin.

De Lima has listed several members of the Duterte administration (including Duterte himself) who were responsible for her arrest and incarceration. It can be assumed that De la Rosa’s high visibility in the drug war, as its principal enforcer, was why his visa was among those canceled (there is no indication which official in De Lima’s “hit list” has also had a visa cancelation).

One can’t help quoting the Tagalog saying about individuals being randomly victimized by bad luck or a bad joke, “Bato-bato sa langit, ang tamaan ay huwag magagalit!” (Throwing stones up in the sky, whoever gets hit should not get mad).

Granting a visitor’s visa to the US is obviously not among the vast powers of the Philippine presidency, but terminating an international agreement with a foreign country is. According to Senator Koko Pimentel, the President can terminate an agreement with another country “for any reason.”

Pimentel could well have added that the reason does not have to be reasonable. This, on the other, is what Senator Ping Lacson cannot appreciate. So the US has canceled a Philippine official’s visitor’s visa and thus Duterte wants to cancel a military agreement that concerns the security of the Philippines.

Lacson’s question is: “What’s the connection?”

In other words, why are the security interests of the country being jeopardized in order to protect the personal interests of an individual? Lacson must be assuming that Duterte is aware that the VFA that he is threatening to terminate is linked to the Mutual Defense Treaty between the Philippines and the US, which commits both countries to come to each other’s aid in case of an attack by another country.

Perhaps Lacson is tempted to ask Duterte if he has a Mutual Defense Agreement with De la Rosa and if that includes a Visiting Tourist Agreement (VTA) that covers visits to the US.

Lacson could furthermore remind Duterte that the US is more than just a tourist destination for moneyed public officials, or a big brother to whom the Philippines can run if bullied by another country. America is one of the biggest investors in the Philippines and is thus a pillar of the economy.

Duterte has reportedly given the US one month to reinstate Bato’s visa or else he will summarily terminate the VFA. In other words, restore Bato’s visa or suffer the consequences of a canceled VFA and that, Duterte seems to be saying, is only the beginning.

Duterte has also threatened to cancel the privilege of US citizens to visit the Philippines without a visa. In fact, he has already ordered the banning of Senators Leahy and Durbin from the Philippines.

Duterte may have other anti-US moves up his sleeve. He could also terminate the Mutual Defense Treaty with the US and other mutual assistance agreements. And then, if the visas of other officials are also canceled and not reinstated, Duterte could break relations with the US and send its diplomats back to Washington, DC. Duterte could nationalize and take over American business holdings in the Philippines and freeze all US assets.

One can imagine what other means of “getting even” with America Duterte imagines he is capable of. Remember, this is the heroic presidential candidate who vowed to board a jet ski and dare the Chinese to a fight to the death over the South China Sea.

In fact, he even warned President Xi Jinping of China to rein in his squatters on Philippine territory in the South China Sea otherwise he would send the Philippine military on a suicide mission against the Chinese.

Senator Bato de la Rosa must feel very good about the support “to the death” that the President of the Philippines is giving him.

One can almost hear Duterte promise the good Senator. “’Tang inang mga Kano na iyan — dito mo masusubukan ang suporta ko sa iyo. Mas mahal kita kaysa sa mahigit isang daang milyong Pilipino. Pag hindi nila ibinalik ang VTA mo, kanselado ang VFA nila!” (Damn those Americans — now you will see how much I support you. I love you more than the over one hundred million Filipinos. If they don’t reinstate your VTA, their VFA will be canceled.)

You can almost hear De la Rosa respond with tears in his eyes, “Tenkyu sir. Magpapakamatay din ako para sa iyo!” (Thank you sir, I will also die for you.)

How do you think the folks in Washington, DC are taking all these threats?

Duterte threatening the US reminds me of the film Ang Leon at ang Daga (The Lion and the Mouse) that starred Niño Muhlach and Fernando Poe, Jr. You can guess who the mouse is.

You can almost hear them discussing this at the Pentagon, A war hawk will ask permission to dispatch drones to take out the mouse in the Philippines. The special envoy for Southeast Asia just flashes a grin.

“Aw, com’n, don’t take that blusterer seriously. If Fidel Castro and Kruschev could not get us out of Guantanamo, does Duterte actually believe he can kick us out of the Philippines?”

 

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

gregmacabenta@hotmail.com

Work suspension during calamities

On Jan. 12 — nearly half a century after its last eruption — Taal Volcano had a phreatic eruption, causing ash to fall on numerous cities and necessitating the evacuation of families living near the volcano. With the sudden turn of events, immediate evacuation and disaster preparations were necessary for the affected areas, and schools and offices were constrained to suspend their operations to make way for the same.

We hear it quite often: “Paano naman kami?” exclaims the working class. The suspension of work has always been an issue of concern, especially in cases where neither the employer nor the employee is at fault. Indeed, while the employer has a right to the continued operations of his or her business, an employee’s welfare likewise constitutes a pressing concern.

As if on cue, the Department of Labor and Employment (DoLE) issued the timely Labor Advisory No. 1, Series of 2020 (L.A. No. 1-2020), entitled “Suspension of Work in the Private Sector by Reason of Natural or Man-Made Calamity,” pursuant to Article 5 of the Labor Code and Republic Act No. 11058.

Section 1 of L.A. No. 1-2020 is clear in its mandate: “Except as provided for by law or appropriate proclamation, employers in the private sector shall, in the exercise of management prerogative and in coordination with the safety and health committee, or safety officer, or any other responsible company officer, suspend work to ensure the safety and health of their employees during natural or man-made calamity.”

In the event that employers in the private sector suspend work for the safety and health of their employees during natural or man-made calamities, they are not required to pay their employees’ salaries in accordance with the principle of “no work, no pay.” Indeed, it would be inequitable to require an employer to pay the salary of an employee, even when the employee did not work on such day. L.A. No. 1-2020, however, provides that, in cases where an employee has accrued leave credits, then he may be allowed to utilize such leaves in order to receive compensation for the unworked days. Furthermore, if an employee works for the employer on such a day, then the employee must receive his or her regular salary — without any additional or premium pay.

Notably, these rules apply only in the absence of a more favorable company policy, practice, or stipulation in a Collective Bargaining Agreement (CBA). Any existing company policy, practice, or stipulation in a CBA, which is more favorable to the employee, shall prevail over L.A. No. 1-2020. To illustrate, a company policy may provide that a premium be paid, on top of the daily wage, in case an employee works during a calamity. It is also possible that an employer has been unilaterally and unconditionally granting, for a long period of time, the payment of wages to employees even if work is suspended due to natural and/or man-made calamities. Thus, in these or other similar cases, there exists a policy or practice which is more favorable to the employee. Therefore, an employer may not invoke L.A. No. 1-2020 to justify non-payment of salaries during these work suspensions. Otherwise, the employer runs the risk of violating the rule on “non-diminution of benefits” in relation to Article 100 of the Labor Code.

With the above discussion, however, a question remains: in the absence of a declaration of suspension from employers in the private sector, are employees absolutely mandated to report for work during the existence of natural or man-made calamities? The DoLE answers in the negative.

Section 3 of the Labor Advisory provides that employees who either fail or refuse to report for work “by reason of imminent danger resulting from natural or man-made calamity” shall not be subjected to any administrative sanction. The DoLE aims to strike a balance in this case: while employers cannot arbitrarily sanction its employees who fail to report for work in such cases, employees, on the other hand, are only excused from reporting for work “by reason of imminent danger resulting from natural or man-made calamity.” The meaning of this phrase, however, is not clear in the advisory. Furthermore, even if they report for work, they will not be entitled to any premium pay.

A couple of weeks had passed since the Taal Volcano’s initial eruption. While the Philippine Institute of Volcanology and Seismology has downgraded Taal Volcano’s status to Level 3, however, it has been quick to clarify that a hazardous eruption is still possible. With this looming threat, it is fortunate that the DoLE has issued L.A. No. 1-2020 to at least serve as a guide for employers and employees alike during these times.

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes, and not offered as, and does not constitute, legal advice or legal opinion.

 

Karenina Isabel A. Lampa is an Associate of the Labor and Employment Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

kalampa@accralaw.com

(632) 8830-8000.

Climate change is real, and really expensive

By James Nixon

IN THE CHILLY and rarefied air of Davos, recent days saw yet another surge in the temperature of the world’s debate on climate change. While Greta Thunberg led pleas to political leaders at the World Economic Forum for urgent action to avert climate catastrophe, Donald Trump used the same platform to denounce “prophets of doom.” The virtual confrontation between Trump and Thunberg came just weeks after a UN climate change summit in Madrid ended in a stalemate.

The near-apocalyptic spectacle of still-smoldering Australian bushfires, and another year of record temperatures and extreme weather, might seem like enough to jolt the world out of its paralysis. Yet a worldwide consensus for more radical action on climate change remains elusive. Why?

One plausible reason is that policymakers don’t have economic incentives to act. Putting hard numbers on the cost of climate change is challenging, and until recently economists lacked the right tools to do the job. As a result, global warming is too rarely included in the standard economic forecasts that shape policy making. That encourages leaders to act as if climate change is cost-free.

BRGFX/FREEPIK

But now we know better. In recent years, economists have developed new methods of forecasting the effects of climate change that take into account extreme temperatures, heavier rainfall, drought, flooding, storms, rising sea levels, and ocean acidification. And as their estimates have grown more precise, they’ve also grown more pessimistic. Damage estimates from 1998 to 2008 were in the range of a few percent of world GDP; recent credible estimates are an order of magnitude higher. Unconstrained emissions would strip 30% off the world economy by 2100, according to largest plausible economic estimates.

More immediately, in a recent Oxford Economics analysis I found that the 2° Celsius of warming expected by 2050 in a high-emissions scenario would imply costs of between 2.5% and 7.5% of global GDP. This pain will be spread unevenly across countries and economies, too, with India, Africa, and Central America being hit hardest.

The perception that the risks are smaller than they really are hinders urgent efforts to address climate change. Just as dangerous is the belief common in some government, policy, and business circles that rising investment aimed at adapting to climate change in the short to medium term will offset its economic fallout. This investment is essentially unproductive, since it goes to replace existing capital stock. So, on top of the direct damages caused by climate change, economic growth will be further cut as investments in adaptation efforts reduce potential growth rates.

The toll looks graver still if one factors in the potential economic value of items normally excluded from market-based estimates of GDP such as natural capital that faces depletion from environmental degradation and the costs in terms of human mortality.

The difficulty of putting hard numbers on the increasingly hard reality of climate change looks to have stood in the way of a serious policy response to the threat. But, as with climate science, the economic case for action now looks incontestable. And it’s turning up the heat on policy makers who can no longer afford a cool detachment over the costs about to be felt.

 

BLOOMBERG OPINION

Eduard Folayang amazed at how martial arts career panned out

By Michael Angelo S. Murillo
Senior Reporter

GROWING up Eduard Folayang never thought that he would build a successful career doing martial arts, and to this day he is just amazed at how things have turned out for him in the path he has chosen.

Doing wushu and mixed martial arts for most of his life, Mr. Folayang, 35, has won a lot in competitions both here and abroad, changing his life for the better.

“I didn’t imagine this happening. It seems like almost everything worked well and fell in the right places. There were failures sure but there were achievements as well and I’m just grateful,” said Mr. Folayang in an interview.

The Baguio native started doing wushu first and represented the country in the early 2000s, winning medals in the Asian Games, Southeast Asian Games, and international wushu tournaments.

In 2007, he started in MMA, quickly establishing himself as a force to reckon with in the sport, eventually becoming a champion in different organizations, including ONE Championship, where he is a two-time world lightweight champion.

Recently, Mr. Folayang added another feather in his cap as he was named to the list of greatest Filipino athletes in the recently released Philippines Yearbook 2020: The 50 Greatest Filipino Athletes.

The authors of the book said the Filipino fighter is being recognized not only for his achievements in the sport of MMA but also for the kind of impact he has had in helping grow the sport and for MMA be better appreciated in the country.

Mr. Folayang said it is a recognition that he is taking with much honor and pride not only for himself but for the entire MMA community in the country for it is an affirmation as well of how the sport has carved a niche for itself in the overall scheme of things.

“This is just unbelievable. Never did I think I will be included in this list of the 50 greatest Filipino athletes. When I started doing MMA I just wanted to take on a new challenge and improve myself. I just worked hard and I’m happy to be in the list. Hopefully others will be inspired by my story, to do their best each time in whatever they do,” Mr. Folayang said.

“I’m happy to represent the sport of MMA in the country. Our journey has not been perfect but we have achieved things throughout the years and for it to be recognized in such a way is a wonderful feeling,” he added.

In the list of the greatest Filipino athletes, Mr. Folayang joins the list of legends in Philippine basketball, boxing, bowling, swimming, and football, among others.

While he has done and won practically everything in MMA, Mr. Folayang said he is not done with the sport, underscoring that there are still narratives to be told and goals to achieve.

He is set to make his ONE return later this week at “ONE: Fire & Fury” at the Mall of Asia Arena, taking on Pieter Buist of the Netherlands in a lightweight clash.

It is a fight that he is viewing with much significance, looking to use as a jump-off point to make another push at a title shot in the division.

“This is an important match and I want to give a good performance. My motivation is to be champion once again. The division is deeper now but it will be a wonderful narrative and huge accomplishment if I become champion again,” Mr. Folayang said.

ONE: Fire & Fury is set for Jan. 31.

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