BusinessMirror April 22, 2016

BusinessMirror, independent presidential candidate Grace Poe, her running mate Sen. Francis Es-cudero and Senate Deputy Minor-ity Leader Vicente Sotto III shared their views on why an end to con-tractualization is not a pipe dream for an economy hoping to maintain its remarkable growth trajectory. Other senators sought for comment did not reply.     As background, Poe and Escudero came out very strongly against con-tractualization in the last presiden-tial and vice-presidential debates, even as they keep reiterating before

business groups they will champion measures to provide incentives to good-performing sectors, promote competition, cut corruption and red tape, and reduce the cost of doing business in every way possible.      While labor groups had railed against the misery wrought on workers by the “end-of-contract” scenario hanging over their heads, there is also the view that employers should not completely be stripped of the flexibility to let go of certain workers. This view holds that sev-eral of the fastest-growing sectors

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PESO EXCHANGE RATES n US 46.1330 n JAPAN 0.4205 n UK 66.1178 n HK 5.9489 n CHINA 7.1253 n SINGAPORE 34.3430 n AUSTRALIA 35.9376 n EU 52.1395 n SAUDI ARABIA 12.3054 Source: BSP (21 April 2016 )

A broader look at today’s businessBusinessMirrorBusinessMirror

www.businessmirror.com.ph n Friday, April 22, 2016 Vol. 11 No. 195 P. | | 7 DAYS A WEEK

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“NOW people that didn’t even know who she was are going to know who she is.”—Oprah Winfrey, on the US Treasury’s announcement that Harriet Tubman (in photo), the African-American abolitionist born into slavery, will be the new face on the redesigned $20 bill.

“I KNOW we’re at the most di�cult stage right now, but it’s just the begin-ning.”—Ecuadorean President Rafael Correa, who announced that he is raising sales taxes and will charge a onetime levy on millionaires to rebuild cities devastated by the country’s worst earthquake in decades.

“WHETHER you like that answer or not is completely up to you. I am not going to give you answers to make sure you like what I say, let the rest of the insecure world do that.”—ESPN baseball analyst and former player Curt Schilling, in a blog post response after he was �red from his job for posting Facebook comments critical of transgender rights. AP

Govt crafting interim natl broadband plan

INSIDE

TO IMPROVE THE QUALITY OF INTERNET SERVICE NATIONWIDE

2016 ISUZU MU-X: HEAVEN IS WHAT YOU DRIVE ON EARTH

SUZUKI CIAZ: THE NEW SUBCOMPACT ON THE BLOCK

BREEZE FOR NADAL

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3 senators bare strategy to stop labor-contracting practice in PHL

ROBOT EYESWATCH SKIESON DEARTH OFCONTROLLERS

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GLOBAL DRUG POLICY Philippines Minister of Justice Emmanuel Caparas addresses the United Nations (UN) special session on global drug policy on Wednesday at the UN Headquarters. Hundreds of government officials, representatives of non-governmental organizations and individuals from civil society are attending the first UN General Assembly special session to address global drug policy in nearly 20 years. Prior to this week’s three-day meeting, Democratic presidential candidates Hillary Clinton and Bernie Sanders, rock star Sting and hundreds of others sent an open letter to UN Secretary-General Ban Ki-Moon, saying the war on drugs has failed. It said that, for decades, governments have focused resources on repressing drug use, resulting in the imprisonment of millions of people, mostly the poor and ethnic minorities, and mostly for nonviolent offenses. AP

THE world’s airlines have ambitious plans to double the fleet of commercial jets during the next two decades, as the number of air

travelers approaches 7 billion. The trouble: There won’t be enough controllers to help those 44,000 planes take off and land safely. A shortage of air-traffic controllers may rein in expan-sion by the aviation industry and economic development by emerging nations such as India, which wants to acti-vate hundreds of unused runways to spur growth. There is a potential solution, and it resembles a video gamer’s dream—a wall of big-screen TVs and a few tablet com-puters controlled by a stylus. Some airports are now testing “remote towers” from Saab AB and Thales SA that allow controllers sitting hundreds of miles away to monitor operations through high-definition cameras and sensors. The technology is sensitive enough to penetrate fog and detect wild animals on runways, and the companies say it’s also cheaper than hiring people to fill vacan-cies at smaller or remote airports.

Few facilities“IT’S a potential game changer,” said Neil Hansford, chairman of Strategic Aviation Solutions, a consul-tancy firm north of Sydney. “There’s a shortage. As you go to more and more airports, it’s going to ex-acerbate the problem.”

And plans are moving apace for more and more air-ports. Worldwide, projects to redevelop or build new airfields surpass $900 billion, according to the Capa Centre for Aviation, a Sydney-based consultancy.

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‘END of contract” is a dreaded phrase among millions of Filipino workers serving

the manpower needs of big compa-nies that resort to labor contracting, a business practice three senators running for different positions in the May 9 elections have promised to end. Although their collective inten-tion is not easy to do as it seemed, Sens. Grace Poe, Francis Escudero and Vicente Sotto III remain un-daunted. For the three solons,

A bill regulating the use of contrac-tualization would be able to find a

middle ground.”—S

there’s no turning back on a cam-paign that strikes at the heart of labor rights under the Constitution.

They are confident a rational, calibrated strategy is possible to balance labor rights, on one hand, and the impact of putting an end to contractualization on businesses and the economy, on the other. The

three senators have a common ap-proach: In the short term, go for a strictly regulated contractual-ization regime that allows it only for very limited sectors and periods; and, in the long term, scuttle the practice of labor contracting alto-gether.     In separate exchanges with the

B L S. M @lorenzmarasigan

THE government is in the process of crafting an interim broadband plan to improve the quality of the Internet in the

country, as data services are now seen as the next frontier for both large companies and for micro, small and medium enterprises (MSMEs). 

₧80BThe amount both PLDT and Globe spend yearly on Internet infra

National Telecommunications Direc-tor (NTC) Edgardo V. Cabarios said the National Economic and Development

[email protected] BusinessMirrorFriday, April 22, 2016A2

BMReportsRobot eyes watch skies on dearth of controllers

By 2030, the world will need an-other 40,000 air-traffic controllers to handle those flights, according to the International Civil Aviation Organi-zation. Yet, there are so few training facilities in Asia, the fastest-growing travel market, which the region will have a deficit of more than 1,000 con-trollers each year, the Icao said.

Rating downgradedPARTLY because of that, the US Federal Aviation Administration (FAA) downgraded India’s aviation safety rating in 2014 and Thailand’s in 2015. The agency said neither country’s civil-aviation authority was up to scratch and barred their airlines from offering new services to the US. After India addressed the FAA’s safety concerns, its rat-ing was restored last year. Global demand for f light-man-agement equipment, such as digi-tal communications and surveil-lance systems, is forecast to reach $5.5 billion in 2020, according to research by MarketsandMarkets. The growth in fleets and flights outpaces the abilities of airport authorities to keep up, said Brian Jackson, managing director at Am-

bidji Group, a Melbourne-based aviation-consultancy firm.

“There’s a real mismatch between airlines’ forward planning and air traffic-control forward planning,” Jackson said. “Planning for infra-structure takes years.”

IMAX TheaterTHAT’S what Stockholm-based Saab and Paris-based Thales are trying to capitalize on. The com-panies can install towers loaded with cameras and sensors covering 360 degrees overlooking runways to beam high-definition video and sound to a distant control center. One controller can manage several airports remotely. “We can see a huge interest from all continents,” Dan-Aake Enstedt, Saab Asia-Pacific manager, said in an e-mail. “This lets you operate an airport that might otherwise be too expensive to keep open, or help to smooth the flow of traffic around major airports as they expand.” Saab’s system resembles an im-mersive IMAX theater. A bank of screens on the wall gives the impres-sion of looking out the window onto a remote airfield, with radar blips tracked on a desktop monitor and

flights managed by oversized tablet computers that respond to a stylus. Graphics pop up on the screens, and the controller can manually maneu-ver a zoom camera to take a closer look at the runways or the planes if an anomaly warning sounds.

First systemTHE technology guides planes into central Sweden’s Ornskoldsvik Air-port, with controllers monitoring from more than 100 kilometers (62 miles) southwest at Sundsvall-Timra Airport. It was the first remote sys-tem installed in the world.

Australia tested Saab’s remote tower in Alice Springs, which is almost dead center of the conti-nent. The airport, serving carri-ers including Qantas Airways Ltd. and Emirates Airline, was run from a control tower 1,500 km to the south in Adelaide. Airservices Australia, the government entity that employs more than 1,000 con-trollers, said in an e-mail that it is considering “further evaluation and potential deployment of this type of technology.” The executive airport in Leesburg, Virginia, which has installed 14 cam-eras, says the concept is supported

by the National Air Traffic Control-lers Association, adding it cuts costs and improves staffing models. 

Night visionTHALES rolled out its competing version, including night-vision cameras, last month at the air-traffic industry’s annual congress in Ma-drid. The system also is appropriate for war zones and “previously ‘un-justifiable’ sites,” the company said.

Saab senses opportunity in In-dia, where Prime Minister Narendra Modi’s plan to bolster the economy includes reviving remote airstrips to increase passenger and cargo traffic, said Varun Vijay Singh, marketing director for air-traffic management at Saab’s Indian business.

Only 75 of India’s 476 airports—just 16 percent—attract scheduled flights, according to a draft civil- aviation policy released in October.

“India is reaching airspace con-gestion, and ATC services are on edge at the moment,” said Mark Martin, founder of Dubai-based Martin Consulting Llc. Boeing Co. predicts Indian carriers will need 1,740 new aircraft during the next 20 years. Someone has to help land them, Saab’s Singh said.

were able to reach competitive levels, because they had the flex-ibility to hire workers at will for fixed contract periods without “worrying” over the long-term economic packages they must provide their staff. They also note that over 90 percent of the economy accounts for the so-called micro, small and medium enterprises (MSMEs).

Responding to BusinessMir-ror’s query, Poe categorically declared: “Labor contracting is, in fact, bad for employers and firms, because businesses do not like having to hire and rehire their workers.”     According to Poe, “Address-ing abusive and unwarranted contractualization will promote workers’ security of tenure, which is a constitutional right.”        “Job security will motivate laborers to work harder, thereby increasing productivity and ex-cellence,” she said, noting that “many studies have shown that employees with high job satis-faction are generally more pro-ductive, engaged and loyal to their companies.”

Middle ground:Strictly regulating contractualizationFOR his part, Sotto suggested that, “perhaps, a bill regulating the use of contractualization would be able to find a middle ground.”

Sotto thinks it is possible to “make exceptions to compa-nies/entities that cannot afford regular employees,” even as he pointed out such “will entail the entry of the Bureau of Internal Revenue in the execution of the provisions.”

Escudero, on the other hand, chafes at the notion that up-holding workers’ rights is ex-clusive of the desire to keep businesses competitive. Busi-nesses, Escudero explained, “should look at their employ-ees not as mere “costs” but as important partners and assets to their business.”     “Giving them security of ten-ure and at least minimum wages should not be viewed as mere costs but as an investment in their business’s most important asset and resource: its people,” Escudero said.

He had a pointed rebuke to businesses that worry single-

mindedly about thinning bot-tom lines. “Besides, it will not make them poor nor make their businesses falter.”      “In fact,” Escudero added, “a stronger middle class is the best support to a growing economy by increasing the purchasing power of the consumers. This will, hopefully, bridge the wid-ening gap between the rich and the poor.”      Poe, in an e-mail to the Busi-nessMirror, shared a four-pronged strategy on the Partido Galing at Puso (PGP) agenda.       “Recognizing, as well, the need of businesses for produc-tivity, sustainability and prof-itability,” Poe said, “we will do the following:

■ Address the job-skil ls mismatch by fostering closer industry-academe coordina-tion and collaboration;

■Provide an attractive invest-ment environment by ensuring that government contracts are upheld, easing constitutional re-strictions on investments; elimi-nating redundant and unneces-sary regulations; reducing the foreign investment negative list; simplifying business registration and payment of taxes and fees;

■Provide access to credit and increase marketing and techni-cal support to MSMEs; ■�Focus support for agricul-ture/agribusiness, manufactur-ing and tourism. 

Poe added that among the first courses of action after the May elections—whether she becomes chief e xecutive or returns to the Senate—is to review existing la-bor laws, rules and regulations on contractualization.  “We will ensure that the concerns of all stakeholders are duly considered in the crafting of new guidelines that will be fair for all parties concerned. Contractua l izat ion w i l l be strictly regulated to ensure compliance, while maintaining the profitability of businesses.”

The final word, according to the candidate who has drawn heavily on the image of empa-thy and concern for the poor of her late father Fernando Poe Jr.: “Happy employees translate to more productivity, hence, en-hanced profitability for busi-ness owners. Ending contractu-alization, in the long run, will be beneficial to all concerned.”

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HOW CONTRACTUALIZATION BECAME THE NORM AMONG PHILIPPINE BUSINESSES

THERE are two narratives as to how contractualization became so pervasive in the Philippines. Many labor groups have in the past routinely blamed the late senator and labor leader (a pillar of the

Trade Union Congress of the Philippines) Ernesto “Boy” Herrera for paving the way for labor contractualization with amendments he introduced in 1989 to the Labor Code. According to them, a very limited contractualization regime—in the past, limited to janitorial services and similar short-term business arrangements —became the norm as a result of the sweeping new provisions; hence, the tag “Herrera Law.” However, when Herrera died in October 2015, his son Ernest—making a clarification validated by ex-Labor Secretary Ruben Tor-res—told reporters (including the BUSINESSMIRROR) at his wake it was most unfair to blame the late senator for the runaway proportions with which contractualization had been abused across many sectors. In fact, Ernest explained, the senator authored a bill mandating regulariza-tion of employees who have rendered six months of continuous service—a provision subsequently included in the revised Labor Code. Ernest blamed the implementation by the Department of Labor and Employment (DOLE) as part of the culprit. DOLE circulars, he said, had greenlighted so-called labor-only contracting agencies that dangle “take it or leave it” five-month contracts to desperate jobseekers. In a later interview (not with the BUSINESSMIRROR), Ernest insisted, “the record shows my dad was very critical and fought against these department orders favoring labor-only contracting.’’ One of the harshest critics of labor-only contracting, the Ecumenical Institute for Labor Education and Research (EILER), had pointed to Articles 106 to 109, of what it called the Herrera Law, as the source of the labor secretary’s power to issue orders that will promote hiring of contractuals and other nonregular workers. An example given was Department Order 18-A issued in 2011. EILER said in one forum this has since become a nightmare that vastly expanded the once-limited work arrangement for janitorial and other ca-sual jobs to becoming the routine, or default labor arrangement cutting “across all economic sectors, from manufacturing to wholesale and retail trade up to business-process outsourcing.” Butch Fernandez

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Authority (Neda), the Information and Communications Technology Office (ICTO) and his office have started rounding up ideas on how the industry must move forward five years from now.  “The National Broadband Plan is being drafted. We are proposing sev-eral items on the plan, which should identify three areas: First, areas where the government should put up infrastructure; second, where the government should subsidize; and, last, areas where the private sector can freely compete in the market,” he told the BusinessMirror in an interview.  He said there are areas in the Philippine archipelago not appeal-ing to businesses; hence, the gov-ernment must intervene and build up infrastructure.  “You cannot leave everything to competition. There are small areas the government will have to invest in if we want to improve the state of our Internet services today,” Cabarios said. 

The broadband blueprint, he said, is a five-year plan for the next administration. 

“This will identify the most im-portant areas we need to address and identify how much we need to invest,” he said.  

Globe Telecom Inc. and PLDT Inc., on the average, have been allocating roughly P80 billion per year. The government has spent a nugget of this price to set up free Wi-Fi con-nections to a few public places. 

“The P80 billion per year being spent by the two telcos are mostly focused on urban areas. To put up infrastructure in rural areas, easily, you have to invest about P30 billion to P100 billion. The needed capital is huge,” he said.  Mobile broadband connection is mostly spotty in rural areas, and some home broadband services are also not being offered by telcos to some areas in the provinces. 

“It’s because there are places re-ally hard to reach. To build a small infrastructure, you have to spend billions of pesos. P1.5 billion is even too small,” Cabarios said.  “These will be our targets. The

money to be invested in this en-deavor can come from the proposed universal access fund, which is still pending in Congress,” he added.  The proposed fund, which essen-tially is a tariff for telco services, may not see the light of day in Congress. It could have been an avenue for the government to fund investments in the telco industry.  “Without the fund, we can always seek for grants, low interest loans, such as official development assis-tance financing. These can fund our drive to build infrastructure,” he said.  This is not the first broadband plan the government has crafted. The first one included the proposal to equip 80 percent of the households across the country with at least 2 Mbps speed by 2016. This, according to Cabarios, is nearly impossible to achieve now. 

Sought for comment, the two telco titans in the Philippines said they will support the government in its plans to develop the Internet sector in the country.  “The national broadband plan is a good initiative that most countries in the world already have. It will help

the industry, especially in building more infrastructure, and most espe-cially in addressing the missionary sites that the industry cannot cover at present, like conflict areas in Min-danao. This will also help address the need for Internet connectivity in public schools,” Globe Spokesman Yolanda C. Crisanto said. 

She said  among the major chal-lenges facing the industry are the permitting, right of way, licenses and fees.  “If these can be standardized and rationalized across local govern-ment units, then we can build cell sites faster. With more cell sites, we can address the twin issues of Inter-net speed and access,” Crisanto said.  PLDT Spokesman Ramon R. Is-berto said the industry needs to focus on three areas for the development of broadband.  “Important is sustained invest-ments in order to raise the capacity and capabilities, and to strengthen the resiliency of our networks,” he said.  In the case of PLDT, the com-pany invested P43 billion last year and has allocated another P43 bil-lion, this year. Globe is spending roughly $750 million in 2016. 

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BusinessMirror Friday, April 22, [email protected]

BMReportsA3

PPP bill good as dead due to lack of timeB J M N. C 

@joveemarie

THE proposed Public-Private Partnership (PPP) Act or House Bill (HB)

6631, which is being pushed by the Palace and big business groups, may not be passed by the 16th Congress due to lack of time.

Speaker Feliciano Belmonte Jr. said the remaining days of the 16th Congress will be allotted for the canvassing of votes. 

“[But] If there’s a similar bill at the same stage in the Sen-ate, it is still doable,” Belmonte told the BusinessMirror. 

However, the Senate version of the proposed PPP Act is still pending for second reading, while the House version of the bill is pending for third reading. 

 Belmonte said there may be no more time for both cham-bers of Congress to pass the measure on third reading.  

Based on the legislative calendar, Congress sessions ad-journed on February 3 as part of its preparation for the May national and local elections. Sessions will resume on May 23 until June 10. 

  The two chambers wil l convene f irst as  National Board of Canvassers before the approval of other pending priority bills.  

“When Congress resumes  on May 23  it will be for the primary purpose of constituting itself as the National Board of Canvassers to proclaim the next president and vice president. I see the possibility as slim to none that other pending legislation will be tackled before the final adjourn-ment of the 16th Congress in early June,” said  Party-list Rep. Ashley Acedillo of Magdalo, one of the authors of the proposed PPP Act. 

But Rep. Alfredo B. Benitez of Negros Occidental, chair-man of the House Committee on Housing and Urban Devel-opment, said: “While I understand that the remaining time of the lower chamber and upper chamber will be allotted for the canvassing of votes, I am still hopeful [that the both houses] would still find time to pass the bill [proposed PPP Act] in the remaining days of Congress.”

B en ite z , who i s suppor t i ng t he pa ss a ge of t he proposed PPP Act, said the measure is a big help to continue PPP projects.  

During the recent culmination program of the Nation-al Housing and Urban Development Summit, Benitez is pushing for PPP for housing to address housing backlogs in the country. 

According to the lawmaker, at least 5,821.57 hectares of land in the National Capital Region will be unlocked for PPP for the government’s socialized-housing programs.

Under the Constitution, Congress (the Senate and the House of Representatives in joint session) will act as the National Board of Canvassers to canvass the votes and proclaim the winners of the presidential and vice-presidential race.

In February the lower chamber recalled the third-reading approval of HB 6631, jeopardizing enactment of the busi-ness group- and Palace-backed measure.

  Senior Deputy Minority Leader and Party-list Rep. Neri Colmenares of Bayan Muna moved to recal l the third-reading vote on HB 6631, say ing  the approval of the  measure violated Section 28, Article VI of the 1987 Constitution.

  “No law granting any tax exemption shall be passed without the concurrence of a majority of all the members of Congress,” he said.

 Only 136 congressmen voted during the third-reading approval of the PPP bill.

With the House of Representatives rolls showing a total membership of 291, HB 6631 may be passed on third and final reading by 146 congressmen.

  The Philippine Business Groups and the Joint Foreign Chambers are pushing for the passage of the proposed PPP Act.

Also, in a BusinessMiror report,  Cosette V. Canilao, the former executive director of the PPP Center, said the passage of this legislation is critical in raising capital to finance projects of prime importance.

Meanwhile, PPP Center Executive Director Andre C. Pa-lacios said he is hopeful that both houses of Congress could still pass the bill into law, saying, “the passage of the PPP Act is crucial as it will improve the capital market, and it will help create a better environment for private invest-ments to go into infrastructure projects, which by them-selves are high risk.”

Philippine Stock Exchange Senior Vice President Roel A. Refran also supported the PPP Act, adding that this would give investors—both retail and institutional—more options,

while providing a blanket of protection against any unnecessary issue.

Principally authored by Belmonte, the measure institutionalizing and strengthening the PPP seeks to recognize the indispensable role of the private sector as the main engine for national growth and development. The measure will create an enabling environment for PPP.

The bill also seeks to provide the most appro-priate incentives to mobilize private resources

for the purpose of financing, design, construc-tion, operation and maintenance of infrastruc-ture projects and services normally financed and undertaken by the government.

The PPP refers to a contractual arrangement between the implementing agency and the project proponent for the financing, design, construc-tion, operation and maintenance or any combi-nation thereof, of an infrastructure facility, in which the project proponent bears significant

risk, management responsibility or both.It said that among other incentives, PPP proj-

ects in excess of P1 billion shall be entitled to incentives as provided by the Omnibus Invest-ment Code, upon prior endorsement of the PPP Center and registration by the project proponent with the Board of Investments. 

The bill also seeks to create a  joint congres-sional oversight committee to oversee the imple-mentation of this act.

I see the possibility as slim to none that other

pending legislation will be tackled before the final adjournment of the 16th Congress in early June.”—A

BusinessMirror [email protected] A4

B R A @reneacostaBM

Friday, April 22, 2016

BMReports

Fresh from a firing exercise at the Crow Valley target range in the northern Luzon province of Tarlac during the Balikatan 2016 military exercises, the M142 High Mobility Artillery Rocket System (Himars) was transported to the province nearest to the Chinese bases sitting atop the reclaimed reefs in the West Philippine Sea (WPS).

The reported mounting of the defensive weapon in Palawan, which both Filipino and American military officials refuse to confirm, would support the ongoing joint air and maritime operations or patrols that are being conducted by the Philip-pines and US soldiers in the contested territories since last month.

The deployment of the Himars that could also be fired from a war-ship was confirmed by the open-ended statements of Balikatan of-ficials, who, after test firing it on two occasions during the past two weeks, said the rockets would be brought to Palawan.

The rockets would support the contingent of US aircraft, includ-ing five A-10 Thunderbolt, three H60G Pave Hawk helicopters, a MC-130H Combat Talon aircraft and 200 airmen, who stayed be-hind after the bilateral war games, to initialize US pivot in the Philip-pines under the Enhanced Defense Cooperation Agreement.

US Lt. Gen. John Toolan, com-mander of the Marine Forces in the Pacific, said the Himars, which could also be mounted and fired on an Army tactical vehicle, has the capa-bility to hit a target at a distance of

Wielding the Himars ‘big gun’ vs China ‘occupation’

AS China’s military activities escalate within the patches of territories in the South China Sea

(SCS) that Beijing claims to be its own, the United States has shipped to Palawan multiple rocket launchers to boost the Philippines-US defensive posture.

300 kilometers. Thus, with its range, it can easily strike Chinese patrols, and even China’s newly built military bases nearby.

The US light multiple rocket launcher, with a price tag of $5 million per platform, can fire six rockets or one MGM-140 ATACMS (Army Tactical Missile System) on the US Army’s new family of medium tactical vehicles 5-ton truck, and can launch the entire multiple-launch rocket system family of munitions.

The armed forces has no mis-sile capability yet, and while there had been efforts to acquire such weapon under the present admin-istration, the missile-launcher procurement plan was shot down last year by Chief of Staff Gen. Hernando Iriberri, consequently drawing sharp criticisms from the public and even active and retired military officials.

Retired Lt. Gen. Juancho Sab-ban fought for the missile system for the Marines when he was the commander of the Western Com-mand, but when Gen. Emmanuel Bautista became the chief of staff, he assigned the acquisition project to the Army.

When Iriberri became the top mil-itary chief, he however turned down the project and reprogrammed it for the personal equipment of soldiers.

The Himars weapons system is interchangeable with the MLRS M270A1, carrying half the rocket load and can be transported on board a C-130 plane.

Six Himars practice rockets were

fired during the penultimate day of the Balikatan, drawing the admira-tion of a roster of officials, includ-ing Armed Forces Western Com-mand chief Vice Admiral Alexander “Chinaman” Lopez.

Lopez’s monicker was coined by a group of “patriotic” students in De-cember last year after the military officials tried to stop the group’s “freedom voyage” in the WPS , while doing nothing against Chinese activi-ties in his area of operations, accord-ing to the same group.

The firing of the Himars was the second after American Marines hit their targets during its first firing, also at Crow Valley, on April 4.

Lopez said the multiple rocket launcher should beef up the ca-pability of the armed forces for

territorial defense, and it can be deployed in the WPS.

“Basically, that’s the main pur-pose of that. We can deploy the Hi-mars in any part of the Philippines, any part, that’s highly mobile,” he said. “Any threat, we can use that capability should we have one.”

“Now, because we have seen it, I know the military would like to have a good look at it and maybe a better consideration coming up with one. We have seen the capability, highly mobile, lethal, so I think that’s one of the capability that we want to have,” Lopez said.

After the firing at Crow Valley, Toolan said they would also test fire the Himars from a ship, hint-ing it would be deployed aboard military vessels engaged in patrols

in the WPS.“The Himars also has the capa-

bility [to be test fired from]…the deck of a ship [since we]…really need to [be on] solid ground to be able to fire from a ship. We’re gonna test it off the deck of the ship,” the US Marine general said during the Balikatan.

Toolan added that the US is willing to share the Himars along with other sophisticated US weap-ons with the Philippines.

“You know, the truth to the matter is that we are allies and so you know, as allies, we need to work together and I think that we’ll be more than happy to share,” he said.

BOLSTERING his status as China’s most powerful leader in decades, Chinese President

Xi Jinping has assumed a more direct role as head of the country’s power-ful armed forces with the new title of commander in chief of its Joint Operations Command Center, state media and analysts said on Thursday.

Xi’s new position was revealed in news reports that featured promi-nently on national news broadcasts on Wednesday and Thursday, in which he appeared publicly for the first time in camouflage battle dress wearing the joint center’s insignia.

During his Wednesday visit, Xi called on the center’s staff to “close-ly follow the trends of global mili-tary revolution and strive to build a joint battle command system that meets the need of fighting and win-ning an informationized war,” the official Xinhua News Agency said.

Officers should “change their ideas, innovate and tackle difficul-ties, in a bid to build a joint battle command system that was abso-lutely loyal, resourceful in fighting, efficient in commanding and coura-geous and capable of winning wars,” Xinhua quoted Xi as saying.

Battle command capacities should be measured by “the standards of being able to fight and win wars,” Xi said, stressing the need to prepare for conflicts, analyze possible secu-rity risks and handle effectively “all sorts of emergencies.”

The joint center, reportedly un-derground in the western outskirts of Beijing, is under the direct super-

vision of the ruling Communist Par-ty’s Central Military Commission, which is headed by Xi and oversees the 2.3-million-member People’s Liberation Army (PLA), the world’s largest standing armed forces.

Xi was accompanied on his visit by the commission’s two vice chair-men, Gen. Fan Changlong and Gen. Xu Qiliang.

Among his several other titles, Xi is also leader of the ruling Commu-nist Party and chairman of a recently created National Security Council, which gives him greater control over the domestic security services.

As head of the military, Xi has overseen a reorganization of the PLA’s command structure into five theater commands aimed at better integrating the different services. He has ordered a 300,000 person reduction in forces that will see the elimination of many outdated and noncombat units, and shift the em-phasis further from ground forces to the navy, air force and missile corps.

Xi’s appearance in battle dress with insignia on Wednesday empha-sized his more direct role in military

affairs. When appearing simply as head of the Central Military Commis-sion, he routinely wears olive-green tunics, shirts and trousers without insignia or decoration, as did his predecessors.

Xi’s new choice of apparel “indi-cates that he not only controls the military, but also does it in an abso-lute manner, and that in wartime, he is ready to command personally,” said Ni Lexiong, a military affairs expert at Shanghai’s University of Political Science and Law.

Three years since taking on the presidency, Xi is widely seen as having accumulated more power and authority than any Chinese leader since Deng Xiaoping in the late 1980s. A cult of personality has also sprung up around him to rival that of the founder of the commu-nist state, Mao Zedong, with his slogans, sayings and signature po-litical themes widely disseminated in the media.

Yet, his reputation has also been cal led into question by anony mous letters, a l legedly from Communist Party members, calling for his resignation. Revela-tions in the international media about vast wealth accumulated by members of his extended family have, meanwhile, flown in the face of his relentless campaign against corruption in the party, military and state industries.

Xi’s new title and his visit to the joint center were “more political than military” in significance and don’t imply he will take charge of

China’s Xi moves to take more direct command over military

Size of the People’s Liberation Army, the world’s largest standing armed forces

2.3M

IN this April 21 image taken from a video footage run by China’s CCTV via AP Video, Chinese President Xi Jinping in military uniform shakes hands with a military staff member in Beijing. AP

the day-to-day running of the PLA, said Andrei Chang, Hong Kong-based editor of the magazine Kanwa Asian Defense and a close observer of Chi-nese military affairs.

“Throughout Chinese history, political power has always been founded on control of the military,” Chang said. “This was a visit to show off his muscle to his potential en-emies and show that he is tough and in charge.”

Xi’s new title and appearance in battle dress may also be a deliber-ate message to China’s chief rivals, including the US, Japan, the Philip-pines and the self-governing island of Taiwan that China has vowed to conquer by force if necessary.

“The combat uniform is not only

to show he is in charge of the mili-tary, but also shows that China is ready for a fight amid a tense exter-nal situation. It is a bit like telling China’s opponents that he is ready for a combat,” Ni said.

Along with his structural and personnel reforms, Xi has high-lighted the PLA’s importance with frequent, highly publicized visits to military bases and a massive pa-rade last September that saw the army’s latest equipment wheeled through the center of Beijing while warplanes and helicopters roared overhead.

Xi enjoys special cachet with the armed forces, partly due to his late father’s status as a military com-mander and Xi’s own brief service

as a uniformed aide to a former de-fense minister, but also because his muscular foreign policy is popular among Chinese nationalists and the defense establishment.

That’s been especially true in the disputed South China Sea, which China claims virtually in its entirety and where it has constructed island airfields on former coral reefs and sought to limit the US Navy’s ability to operate in the area.

Xi has remained resolute in that approach despite it being blamed for raising tensions with China’s South-east Asian neighbors and prompting the US to devote more resources to Asia and strengthen its cooperation with traditional allies and even for-mer foe Vietnam. AP

You know, the truth to the matter is that we are allies, and

so you know, as allies, we need to work together, and I think that we’ll be more than happy to share.” —US L. G. J T

BusinessMirrorFriday, April 22, 2016 • Editor: Max V. de LeonA5

AseanFriday

5.5%The interest rate that Indonesia’s central bank pays to borrow from commercial

$1.5B

Guide to Indonesia’s shift to new rateLESS than a week after announcing

a new policy framework aimed at spurring economic growth,

Bank Indonesia (BI) will decide on in-terest rates. Most economists predict an unchanged stance until the new system takes effect in August.

To improve the transmission of its policies, Governor Agus Mar-towardojo said on April 15 the bank will begin using the seven-day reverse repo rate as its bench-mark interest rate, replacing the current 12-month reference rate. Here is a short guide on what to expect on Thursday.

Reference rateTHE bank has been using this rate, commonly known as the BI rate, as its benchmark since 2005. The rate doesn’t directly influence any mon-ey-market instruments, reducing its potency as a policy tool. As evidence of that, look at average bank-lending rates, which haven’t reflected the central bank’s 75 basis points of cuts since the beginning of this year.

All but three of the 26 econo-mists surveyed by Bloomberg pre-dict the reference rate will remain at 6.75 percent.

New benchmarkTHE bank will begin announcing the seven-day reverse repo rate at its meeting on Thursday to allow the market to get accustomed to it. This is the interest rate that the central bank pays to borrow from commer-cial lenders and currently stands at 5.5 percent.

Policy-makers have emphasized that the change to the framework

Amount Malaysia raised this week selling sukuk

rate, known as the Fasbi, and the lending facility rate, which is the interest it charges com-mercial banks to borrow. The Fasbi is currently at 4.75 per-cent, while the lending facility is at 7.25 percent.

Both those rates are currently set at a spread of 250 basis points around the reference rate. When the bank moves to its new regime in August, it plans to reduce the corridor around the new bench-mark to 150 basis points. That means the lending facility rate will be reduced to 6.25 percent, according to  Deputy Governor Perry Warjiyo.

Policy directionBANK Indonesia remains under pressure from the government to help spur the economy, which last year grew at its slowest pace since 2009. President Joko Widodo said in an interview in February that he wanted interest rates to “fall, fall, fall, fall and keep falling.”

Before the policy change was announced, 10 of the 26 econo-mists surveyed by Bloomberg predicted at least another 25 basis points of cuts by the end of the year.

“Financia l markets, in-cluding those in Indonesia, are rather well behaved” be-cause of expectations the US Federal Reserve will tighten monetary policy more gradu-ally than earlier predicted, said Bharti Bhargava, an economist with Oxford Economics Ltd. in Singapore.

“Against this background, to support household consumption and in return growth, the BI should unload another 25 basis points cut sooner rather than later.” Bloomberg News

[email protected]

doesn’t mean an easing in monetary policy. To avoid any misconception, it’s highly unlikely that the bank will lower interest rates from now until the new policy rate comes into effect, said Wellian Wiranto, an economist in Singapore at the Oversea-Chinese Banking Corp.

“Keeping the monetary-policy stance unchanged during the tran-sition period and soon after the actual handover would help ensure that the risk of misunderstanding is minimized,” he wrote in a research note on April 14. “Cutting the target rate even as the very idea of what constitutes the target rate is chang-ing is simply too confusing and too risky a move.”

Other ratesBANK Indonesia will continue an-nouncing the overnight deposit

THE cost of scandals can be hard to measure. In the case of Malay-sia, however, this week offered a

good glimpse of just how expensive the high-profile investigation into its state-backed fund 1MDB has become.

Malaysia’s government raised $1 billion selling 2026 bonds on Wednes-day and another $500 million selling notes that mature in 2046. The 10-year debentures were priced at a 135-basis-point premium over similar maturity Treasuries, while the 30-year securities

were sold at a spread of 145 basis points, according to data compiled by Bloomberg. At least 10 basis points could have been shaved off, both of those were it not for fears 1MDB will default on its obligations. In April last year, for example, the sovereign sold 10-year debt at a 115- basis-point premium.

To be fair, Malaysia was able to reduce the amount  it paid some-what. When it initially started mar-keting the bonds to investors, the

10-year notes were being offered at a spread of about 150 basis points and the 30-year securities at about 165 basis points.

But the stream of negative head-lines emanating from 1MDB can’t have buoyed investor confidence. The fund is at the center of an inter-national investigation into money laundering and is  sparring with some of its creditors. There’s been a selloff in all Malaysian govern-ment debt, including the nation’s

dollar bonds due 2025 and 2045, the ones used as benchmarks to price the new notes.

1MDB has also been blamed for its part in the ringgit’s wild ride. The currency, which has appreciated a 10.2 percent against the greenback this year, was the worst-performing in Asia last year and second-worst performing in 2014, ahead of the Japanese yen. The yield on Malay-sian dollar bonds, meanwhile, aver-aged 4.18 percent in 2015 versus 3.70

percent in 2014, JPMorgan indexes show. And the cost of protecting sovereign debt against default us-ing credit-default swaps has almost doubled over the past 24 months.

In a world of negative interest rates, investors will still be keen to fund a country comfortably rated investment grade. But the cost of money is tied to confidence, and be-cause of 1MDB, that’s not something Malaysia is inspiring these days.

Bloomberg News

A LANDMARK commitment by one of the world’s largest producers of tissue and paper to stop cutting

down Indonesia’s prized tropical forests is under renewed scrutiny, as the com-pany prepares to open a giant pulp mill in South Sumatra.

To fanfare more than three years ago, Asia Pulp and Paper (APP) promised to use only plantation woods, after an investiga-tion by one of its strongest critics, Green-peace, showed its products were partly made from the pulp of endangered trees.

Greenpeace welcomed the an-nouncement as a breakthrough and the company, long reviled by activists as a villain, rebranded itself as a defender of the environment, helping it to win back customers that had severed ties. At the same time, it was pressing ahead behind the scenes with plans to build a third pulp mill in Indonesia.

When it went public with its plans for the OKI mill in 2013, APP announced it would produce 2 million tons a year and then earlier this year acknowledged the mill’s capacity could, in the future, increase to 2.8 million tons.

New research released on Wednesday by a dozen international and Indonesian environmental groups estimates that APP will face a significant shortfall in its supply of plantation-grown wood after the new mill begins operating, even at a 2-million-ton capacity. The company could then face a choice between using higher-cost imported wood or looking the other way as its suppliers encroach upon virgin forests.

“APP, while it has been presenting itself as a champion of zero deforestation, is building one of the world’s biggest pulp mills,” said Christopher Barr of Woods & Wayside International, one of the organi-zations involved with the report.

“There will be a great deal of pressure to ensure it receives adequate supplies of wood to keep it operating at full capacity,” he said. “Our analysis shows the group’s existing planted area in South Sumatra is unlikely to produce the volumes of wood the mill is expected to consume at projected capacity levels.”

How the mill, which could operate for more than half a century, is fed will be a factor in the survival of Indonesia’s tropical forests and the endangered wildlife they shelter. More generally, the draining and destruction of peatlands for forestry or agriculture will, over decades, release vast amounts of carbon that could jeopardize Indonesia’s ability to meet its emission-reduction targets under an in-ternational agreement due to be signed within days.

The report estimates that APP’s plan-tations in South Sumatra have never pro-duced half of the wood needed to feed a 2-million ton a year pulp operation. That shortfall is compounded by devastating forest and peatland fires across Indone-sia last year that destroyed more than a quarter of APP’s planted trees in South Sumatra, according to an on-the-ground survey by Hutan Kita Institute and other civil-society groups.

In a statement, the company did not address the impact of 2015’s fires but said the new mill would start operating this year at a “low level,” with production to increase gradually based on demand and the availability of wood from its suppliers.

“Whilst the new mill significantly in-creases APP’s production capacity, we have been clear that our Forest Conser-vation Policy commitment takes prece-dence over maximizing our production,” it said. “The bottom line is that there is no question in our minds that the commit-ments we made in the Forest Conserva-

tion Policy come first.”The company said it would “look to-

ward” importing wood chips if efforts to improve the productivity of its planta-tions, such as improved controls of pests and disease, don’t yield sufficient results.

APP is the crown jewel of the Sinar Mas conglomerate, one of Southeast Asia’s largest companies. For a time, it was a pa-riah in financial markets, after defaulting in 2001 on $13.9 billion of debt, which still ranks as the biggest default by a company from a developing nation. It has secured Chinese funding for the OKI mill.

The draining of peatlands, which make up the bulk of the concession land in South Sumatra that supplies APP, is a fraught issue for Indonesia’s neighbors. Record fires on peatlands and forests last year caused $16 billion of losses for Indonesia, according to the World Bank, and sent a smoky, health-damaging haze across the country and into Singapore, Malaysia and Thailand.

The mill and its plantations, mean-while, affect the livelihoods of thousands of people who have lived for decades on land used by APP. The company is em-broiled in hundreds of land-use conflicts across Indonesia and has yet to reach an agreement with any community, after vowing to settle such disputes in 2013.

Once the new mill begins operating, “I think it will be even more difficult for communities to get their land back,” said Aidil Fitri of Hutan Kita Institute, which is advocating for two communities in con-flict with APP in South Sumatra.

“Now they have OKI mill and we believe they need more lands for their plantations,” he said. “On the other side, the communities who have conflicts with APP need their lands back for their live-lihood, to do agriculture, not for acacia plantations.” AP

MARINA BAY AREA Two kayaks are dwarfed against the skyline of the Marina Bay area, which is home to popular hotels and tourist attractions, such as the Singapore Flyer, the city-state’s observation wheel seen at right, on Wednesday in Singapore. AP

New mill raises doubts about APP’s forests pledge

1MDB’s cost to Malaysia is just starting as effect on sukuk offers shows

The WorldBusinessMirror [email protected], April 22, 2016A8

Ecuador hikes taxes to pay for postquake reconstruction plan

Increase in sales taxes from 12 percent

14%

�e damage from 7.8-magnitude quake adds to already heavy eco-nomic hardships being felt in this Organization of Petroleum Export-ing Countries nation triggered by the collapse in world oil prices. Even before the quake, Ecuador was brac-ing for a bout of austerity, with the International Monetary Fund fore-casting the economy would shrink 4.5 percent this year.

In a televised address on Wednes-day night, Correa warned the nation of a long and costly postquake re-covery and said the economic pain shouldn’t fall only on hard-hit com-munities along the coast.

“I know we’re at the most-di�-cult stage right now but it’s just the beginning,” he said.

Using authority granted by the state of emergency he declared af-ter Saturday night’s quake, Correa said sales taxes would increase to 14 percent from 12 percent for the coming year.

People with more than $1 million

in assets will be charged a one-time tax of 0.9 percent on their wealth, while workers earning over $1,000 a month will be forced to contrib-ute a day’s wages and those earning $5,000 a month the equivalent of �ve days’ pay.

Taxes on companies will also go up, and Correa said he would look to sell certain state assets that he didn’t specify. He is also drawing on $600 million in emergency credits from the World Bank and other multilat-eral lenders.

Unlike the deadly earthquake that ravaged Chile in 2010, when commodity prices were at a high and most of South America was boom-ing, Ecuador must rebuild with prices of oil, the lifeblood of its economy, near a decade low. Manufacturing is also su�ering because the economy is dollarized, depriving companies in Ecuador of the same jolt the rest of South America has experienced from devalued currencies.

�e tax hikes come as the scale

of devastation continues to sink in. A helicopter �yover of the dam-age zone Wednesday showed entire city blocks in ruins as if they had been bombed. Late on Wednesday, the government raised the death toll to 570. O�cials listed 163 peo-ple as missing while the number of those made homeless climbed over 23,500. �e �nal death toll could surpass casualties from earth-quakes in Chile and Peru in the past decade.

Even as authorities turn to re-storing electricity and clearing de-bris, the earth continued to move. A magnitude-6.1 aftershock before dawn on Wednesday set babies crying and sent nervous residents pouring into the streets. Local seis-mologists had recorded more than 550 aftershocks, some felt 170 kilo-meters away in the capital of Quito.

While humanitarian aid has been pouring in from around the world, distribution is slow. In Manta on Wednesday, people waited for hours under the tropical sun for water and food supplies. Soldiers kept control with fenced barricades.

“�ey looted the store. I’m taking out what little remains,” Jose Enca-lada said as he cleaned up his paint store in Pedernales, one of the hard-est-hit towns. AP

RESIDENTS recover their belongings days after an earthquake in Pedernales, Ecuador, on Wednesday. AP/DOLORES OCHOA

BEIRUT—The head of Syria’s govern-ment delegation at the Geneva talks lashed out on Wednesday

at the country’s Western- and Saudi-backed opposition, calling them “po-litically immature” and saying their walkout from the negotiations removes a “major obstacle” to �nding a political solution to the con�ict.

The remarks by Bashar Ja’afari, who is also Syria’s UN ambassador, echoed ear-lier barbs by a Turkey-based opposition leader who accused President Bashar al-Assad’s forces of e�ectively having “bur-ied” the cease-�re in Syria.

The verbal sparring came as activists reported that ambulances and buses en-tered four besieged communities in Syria to evacuate around 500 sick residents.

At the United Nations, Stephane Du-jarric, the spokesman for the UN chief, told reporters plans were under way to evacu-ate the 500 who are in “urgent need of life-saving medical attention.” He did not give details on the timing or where the people would be taken.

“The sad thing is, we should not have to negotiate medical evacuations,” Dujarric added.

International aid organizations have pleaded for the evacuation of dozens of residents with urgent medical needs from these communities, which have been be-sieged by government forces and rebels.

The deal is also part of the now-tee-tering cease-�re agreement in place since February 27, which greatly reduced vio-lence in the �rst weeks but has all but col-lapsed now amid �erce �ghting in Syria’s north in the past week.

On Tuesday at least 44 people, most-ly civilians were killed in government airstrikes on opposition-held areas in northern Idlib province. The day before, the opposition declared that the gov-ernment’s violations of the cease-�re were unacceptable.

Anas al-Abda, the leader of the Turkey-based Syrian National Coalition (SNC), said there will be no quick return by the oppo-sition to the talks in Geneva if the current situation continues.

“The regime buried the truce yester-day,” Al-Abda said, speaking at a press conference in Turkey. He was referring to the strikes in Idlib.

He also claimed that there have been more than 2,100 violations of the truce by government forces in the past 53 days. “There will be no quick return to negotia-tions if the current situation continues,” al-Abda said.

The SNC is part of the Higher Negotia-tions Committee (HNC), the Syrian oppo-sition coalition negotiating in Geneva. Al-Abda’s comments come after HNC chief Riad Hijab said on Tuesday there can be no solution in Syria with Assad remaining in power and called for international moni-tors to observe a cease-�re in Syria.

Hijab vowed to �ght “even with stones” to depose Assad, shifting sharply to a tone of con�ict over conciliation.

In Geneva Ja’afari said on Wednesday that members of the opposition were “ex-tremists” and “mercenaries.” He ridiculed Hijab’s comments, referring to him as “sulking” child, and denounced the oppo-

sition’s walkout as “politically immature.”He reiterated that his government’s

position is that any political solution for Syria would include a broad-based unity government, an amended constitution and parliamentary elections.

“Any group that thinks otherwise is living an illusion, is undermining the Ge-neva talks, is wasting their time and ours,” Ja’afari said.

The HNC does not want Assad to have any role in a future Syria. UN special envoy Sta�an de Mistura said he will take stock of where the talks stand on Friday.

The calculated gamble by the op-position to jeopardize what diplomats have called the best chance in years to bring a diplomatic end to Syria’s �ve-year war re�ects its growing frustration over unproductive peace talks and hun-dreds of government cease-�re viola-tions in recent weeks.

The opposition coalition accuses the government of preparing an assault on the city of Aleppo, ignoring its demands for the release of thousands of detainees,

and rejecting or avoiding requests for UN-led humanitarian aid shipments in recent weeks.

It says those are signs of bad faith by Assad’s side and accuses Damascus of stalling for time in the Geneva talks.

On Wednesday activists posted pic-tures of buses driving into the town of Madaya, which fell under siege to gov-ernment and allied Lebanese Hezbollah forces last year.

Images of starving residents and chil-dren in the town and other places have fuelled calls for ending sieges, warning that they threaten to kill critically ill or in-jured people. According to activists and a media report on Hezbollah’s Al-Manar TV, about 500 residents were to be evacuated on Wednesday.

Madaya, northeast of Damascus, and Zabadani, near the border with Lebanon, have been besieged by government forc-es and allied militia for months. Fouaa and Kfarya villages in the northern province of Idlib have been blockaded by rebels for over a year. AP

SYRIA’S WARRING PARTIES SPAR OVER COLLAPSING CEASE-FIRE

UNITED NATIONS—About 160 countries are expected to sign the Paris Agreement

on climate change on Friday in a symbolic triumph for a landmark deal that once seemed unlikely but now appears on track to enter into force years ahead of schedule.

UN o�cials say the signing cer-emony on Friday will set a record for international diplomacy: Never be-fore have so many countries inked an agreement on the �rst day of the signing period.

�at could help pave the way for the pact to become e�ective long before the original 2020 deadline—possibly this year—though coun-tries must �rst formally approve it through their domestic procedures.

“We are within striking distance of having the agreement start years earlier than anyone anticipated,” Brian Deese, an adviser to President Barack Obama, said in a speech last week at Reed College in Portland, Oregon.

�e US and China, which togeth-er account for nearly 40 percent of global emissions, have said they in-tend to formally join the agreement this year. It will enter into force once 55 countries representing at least 55 percent of global emissions have done so.

“�ere’s incredible momentum,” former New Zealand Prime Minis-ter Helen Clark, who heads the UN Development Program, told �e Associated Press. “We’re moving as quickly as possible to action.”

She said her agency is working with more than 140 countries on climate change-related issues, and that �nancing to make the Paris Agreement a reality is “critical, and let’s hope everyone lives up to com-mitments made.”

�e agreement, the world’s re-sponse to hotter temperatures, ris-ing seas and other impacts of cli-mate change, was hammered out in December outside Paris. �e pact was a major breakthrough in UN cli-mate negotiations, which for years were bogged down with disputes between rich and poor countries over who should do what to �ght global warming.

�e mood was so pessimistic af-ter a failed 2009 climate summit in Copenhagen, Denmark, that UN cli-mate chief Christiana Figueres said she thought a global deal wouldn’t happen in her lifetime. Now she ex-pects the Paris Agreement to take e�ect by 2018.

Under the agreement, countries set their own targets for reducing emissions of carbon dioxide and other greenhouse gases. �e targets are not legally binding but countries must update them every �ve years.

�at’s because scienti�c analy-ses show the initial set of targets that countries pledged before Par-is don’t match the long-term goal of the agreement to keep global warming below 2 degrees Celsius (3.6 degrees Fahrenheit), compared with pre-industrial times. Global average temperatures have already climbed by almost 1°C. Last year

was the hottest on record.“Even if the Paris pledges are

implemented in full, they are not enough to get us even close to a 2-degree pathway,” said John Ster-man, of the Massachusetts Insti-tute of Technology. “I don’t think people understand how urgent it is.”

�e latest analysis by Sterman and colleagues at the Climate In-teractive research group shows the Paris pledges put the world on track for 3.5°C of warming. A separate analysis by Climate Action Tracker, a European group, projected warm-ing of 2.7°C.

Either way, scientists say the consequences could be catastrophic in some places, wiping out crops, �ooding coastal areas and melting glaciers and Artic sea ice.

Small island nations and other vulnerable countries managed in Paris to get others to agree to an as-pirational goal of keeping the tem-perature rise below 1.5°C, which many analysts say won’t be possible without removing vast amounts of greenhouse gases from the atmo-sphere.

“In Paris they reached what was possible diplomatically and maybe went a little bit beyond it,” Sterman said. “I think we should celebrate it. But the physics of the climate are relentless.”

�ere is some good news. Global energy emissions, the biggest source of man-made greenhouse gases, were �at last year even though the global economy grew, according to the International Energy Agency. Some say that shows countries are �nally driving their economies forward without burning massive amounts of oil, coal and gas.

Still, those fossil fuels are used much more widely than renewable sources like wind and solar power.

After signing the agreement, countries need to formally ratify it. Procedures for doing that vary among countries. �e UN says about 10 countries, most of them small is-land developing states, will deposit their instruments of rati�cation on Friday and that the world body will have a better idea by the end of the day which other countries intend to ratify the agreement this year.

�e Obama administration says the deal is consistent with existing US law and doesn’t require the ap-proval of the Republican-controlled Senate, where it would likely face sti� resistance. �e administration is expected to treat the deal as an executive agreement, which needs only the president’s approval.

Analysts say that if the Paris Agreement enters into force be-fore Obama leaves o�ce in Janu-ary, it would be more complicated for his successor to withdraw from the deal, because it would take four years to do so under the rules of the agreement. Also, there would be “a strong negative reaction globally that any admin-istration would have to take into account,” said David Waskow of the World Resources Institute in Washington. AP

PARIS CLIMATE AGREEMENTON TRACK FOR EARLY START

briefs

RENOWNED CUBAN PROREFORM ECONOMIST FIRED AS CHILL SETS IN

OBAMA, GULF ALLIES MEET IN SAUDI TO DISCUSS SECURITY

OPRAH REJOICES AS TUBMAN SELECTED TO BE ON $20 BILL

3 KILLED, DOZENS HURT IN BLAST AT MEXICO PETROCHEMICAL PLANT

HAVANA—One of Cuba’s most renowned advocates of economic reform has been �red from his University of Havana think tank for sharing information with Ameri-cans without authorization, among other alleged violations.

The dismissal of Omar Everleny Perez adds to a chillier mood that has settled over much of Cuba as the country’s leaders try to quash the widespread jubilation that greeted President Barack Obama’s historic trip to the island last month.

The Cuban Communist Party’s twice-a-decade Congress ended on Tuesday after four days of o�cials issuing tough warnings about the need to maintain a defensive stance against what they called the United States’s continuing im-perialist aspirations.

While that was going on, Cuban academics began sharing the news that Perez had been dismissed from his post at the Center for Studies of the Cu-ban Economy on April 8, less than three weeks after Obama’s visit.

Perez is one of the country’s best-known academics, an expert in develop-ing economies who served as a consultant for Castro’s government when it launched a series of market-oriented economic re-forms after he took over from his brother Fidel in 2008. Perez made dozens of trips to universities and conferences in the US and frequently received foreign visitors re-searching the Cuban economy. AP

NEW YORK—”I love it,” Oprah Winfrey shouted, pumping her �st in the air.

There was no mistaking her feelings about Harriet Tubman being selected as the next face of the $20 dollar bill. “That was my �rst choice. My second choice was Sojourner Truth,” Winfrey told The Associated Press (AP) on Wednesday on the red carpet for her new series, Green-leaf. Like Tubman, Truth also was an abo-litionist during the 19th century.

“I’m not going to cry here for AP, but I think that’s the best choice. That is the choice for America,” Winfrey said.

Tubman, an anti-slavery activist will be the �rst African-American to appear on an American banknote and the �rst woman to appear on one in a century. Her portrait will replace former President Andrew Jackson, who will be moved to the back of the redesigned $20 bill. AP

MEXICO CITY—An explosion rocked a petrochemical plant on Mexico’s southern Gulf coast, causing evacuations in the area as a �re billowed a toxin-�lled cloud into the air. O�cials said three workers died and more than 100 people were injured.

The state oil company, Petroleos Mexi-canos, said 136 workers had been hurt and three were killed in the blast on Wednes-day afternoon in the industrial port city of Coatzacoalcos. Eighty-eight of the injured remained hospitalized.

Veracruz state Gov. Javier Duarte also told Radio Formula that there were three fatalities.

The blast was felt as far as 10 kilome-ters away, Duarte said, adding that more than 2,000 people were evacuated from the area as a precaution. AP

RIYADH, Saudi Arabia—President Barack Obama is set to meet with top o�cials from six Arab nations to discuss regional security issues in the Persian Gulf, includ-ing the �ght against the Islamic State (IS) militant group.

The meetings in Riyadh on Thursday are meant to build on a similar summit convened last year at Camp David, the American president’s Maryland retreat. They re�ect an e�ort by the White House to reassure and coordinate with important but wary Mideast allies that oppose Obama’s outreach to Iran and US policy toward the grinding civil war in Syria.

The summit with the US-allied coun-tries of the Gulf Cooperation Council follows bilateral talks that Obama held with Saudi King Salman on Wednesday shortly after arriving in the kingdom. AP

QUITO, Ecuador—President Rafael Correa said Ecuador’s worst earthquake

in decades caused billions of dollars of damage and he is raising sales taxes and putting a one-time levy on millionaires to help pay for reconstruction.

The World BusinessMirror Editor: Lyn Resurreccion • Friday, April 22, [email protected] A9

In between lunch with Queen Elizabeth II and dinner with Prince William and the Duchess of Cam-bridge, Obama is expected to weigh in on Brexit at a news con-ference with his British counter-part, Prime Minister David Cam-eron. �ere’s scant evidence that Americans are broadly aware of the debate in the UK or care about the outcome, and Brexit fans say they are unimpressed by the US president’s intervention.

“I can’t think the British people will want to be told what to do by a rather unsuccessful American president who has had one of the least successful foreign policies in modern history,” Jacob Rees-Mogg, a euro-skeptic lawmaker from Cam-eron’s own Conservative party, told the House magazine, which is dis-tributed to members of Parliament.

Cameron has called a June 23 referendum on exiting the EU, a vote that also amounts to a test of public con�dence in his leadership. Cameron’s government supports remaining in the EU and is hoping that Obama’s intervention can sway British voters.

Cameron has also got the back-ing of businesses on both sides of the Atlantic, which oppose Brexit by huge margins, according to a sur-vey by BritishAmerican Business, a trade group.

“�ese things can be seen as sen-sitive and sometimes can be seen as intrusive,” Je�ries Briginshaw, CEO of the British-American Business Council, said in an interview. “We’re hoping that the voice of a wise, help-ful friend is the tone that prevails.”

�e Obama administration says that it’s in the economic and secu-rity interests of the US to maintain a united Europe. Cognizant of the potential to in�ame the debate in Britain, White House o�cials have telegraphed Obama’s position in advance, forecasting an analytical appeal for Britain to remain in the EU based on the economic bene�ts to both the US and the UK.

Nonetheless, more than 30,000 Britons signed a petition to Parlia-ment calling on Obama to somehow be banned from speaking about the issue during his visit.

Business oppositionUK voters have received plenty of American advice already. On Wednesday eight former US Trea-sury secretaries dating back to the Nixon administration warned in a letter published in the Times news-paper in London that Brexit would be a “risky bet.”

BritishAmerican Business, which is part of Briginshaw’s group and in-cludes companies, like Exxon Mobil Corp., 3M Co. and Citigroup Inc., previewed a survey of its members’ views on Brexit that it will publicly release on April 25.

�e poll found that 95 percent of respondents want the UK to stay in the union, though 89 percent said they don’t anticipate relocating from the country if voters opt to leave.

Goldman Sachs Group Inc., JPM-organ Chase and Co., Coca-Cola Co. and Ford Motor Co. are among the American companies whose execu-tives have publicly called for the UK to remain inside the EU.

Within the US, the possibil-ity of a Brexit has caused barely a ripple as “the American public is busy thinking about Hillary and Donald Trump and Bernie Sand-ers,” said Mauro Guillen, who teaches international relations at the Lauder Institute and the Wharton School of the University of Pennsylvania. “Right now it’s too far away for the American public to think about something that’s going to happen in June that’s not even directly related to their lives.”

Guillen, who opposes Brexit, thinks the US public will tune in closer to the referendum, which takes place after the last primary elections in the presidential campaign.

Brexit oddsOBAMA’S three-day stop in Lon-don comes as the British electorate is evenly split between the “re-main” and “leave” camps, accord-ing to public opinion surveys. �e Bloomberg Brexit Tracker puts the odds that the “leave” side wins at about 24 percent.

London’s mayor, Boris Johnson, who favors Brexit, said on Tuesday that it was a “paradox” for Obama to weigh in.

“I just think it’s paradoxical that the United States, which wouldn’t dream of allowing the slightest in-fringement of its own sovereignty, should be lecturing other countries about the need to enmesh them-selves ever deeper in a federal super-state,” he told �e Associated Press.

In the weeks leading up to Obama’s visit, Cameron, as well as Governor of the Bank of England Mark Carney, and other o�cials have warned that a Brexit would harm the British economy.

Chancellor of the Exchequer George Osborne said in a report released on April 18 that quitting the 28-nation EU would cost each Briton as much as £2,100 ($3,000) per person.

US presidents have only rarely engaged so directly in a foreign elec-tion. President Bill Clinton traveled to Ottawa in 1995 to encourage vot-ers in Quebec not to vote for sover-eignty. By a margin of one percent-age point, provincial voters sided with him. In the days before Scot-land’s 2014 referendum on indepen-dence, Obama expressed the hope that that UK would remain “strong,

robust and united.” Scottish vot-ers agreed with him, opting to stay linked to Cameron’s UK.

Obama is the latest in a series of international leaders enlisted by Cameron in the EU referendum de-bate. North Atlantic Treaty Organi-zation Secretary-General Jens Stol-tenberg visited the UK this month and expressed support for a united Europe—while emphasizing that British voters have the ultimate say.

‘Permanent invitation’Obama “has a permanent invitation to come,” Sir Kim Darroch, the UK’s ambassador to the US, told report-ers. “He’s a deeply respected �gure in the UK.”

Wary of appearing as meddling in what, for many, is an emotional vote, Obama is expected to take the same cautious approach as Stolten-berg, emphasizing that the decision is up to Britons.

“Most people see him in broadly benign terms and so long as he keeps it vague, any intervention might be seen in terms of friendly advice from a concerned neighbor,” said Steven Fielding, professor of politics at Nottingham University. Obama bene�ts as well in compari-son to his predecessor George W. Bush, who was viewed with some-thing between ba�ement and hor-ror by Britons.

While those campaigning for Britain to leave the EU have argued that no one will listen to an inter-fering American, the energy they’ve devoted to rebutting Obama sug-gests they don’t really believe it, said Simon Burns, a Conservative mem-ber of Parliament who supports staying in the EU.

“If they think no one’s going to listen, why are they so upset about it?” he said.

Asked if any other international �gure could have a greater impact on the outcome of the Brexit vote, Burns thought for a moment. “May-be the pope,” he said. Bloomberg News

Obama’s Brexit call makes waves in UK, ripples in US BILLIONAIRE investor George Soros

said China’s debt-fueled economy resembles the US in 2007-2008, be-

fore credit markets seized up and spurred a global recession.

China’s March credit-growth �gures should be viewed as a warning sign, So-ros said at an Asia Society event in New York on Wednesday. The broadest mea-sure of new credit in the world’s second-biggest economy was 2.34 trillion yuan ($362 billion) last month, far exceeding the median forecast of 1.4 trillion yuan in a Bloomberg survey and signaling the government is prioritizing growth over reining in debt.

Soros, who built a $24-billion fortune through savvy wagers on markets, has recently been involved in a war of words with the Chinese government. He said at the World Economic Forum in Davos that he’s been betting against Asian curren-cies because a hard landing in China is “practically unavoidable.”

China’s state-run Xinhua news agency rebutted his assertion in an editorial, say-ing that he has made the same prediction several times in the past.

The Hungarian-born investor rose to fame as the manager who broke the Bank of England in 1992, netting $1 billion with a bet that the UK would be forced to de-value the pound.

Malaysian Prime Minister Mahathir Mohamad called him a “moron” during the 1997 Asian �nancial crisis, saying he

was out to wreck the region’s economies. Soros, who began his career in New York in the 1950s, led his hedge fund to aver-age annual gains of about 20 percent from 1969 to 2011.

China’s economy stabilized last quar-ter and gathered pace in March as the surge in new credit helped the property sector rebound, while raising fresh ques-tion marks over the sustainability of the debt-fueled expansion. GDP expanded 6.7 percent in the three months through March, in line with the government growth target of 6.5 percent to 7 percent for the full year.

Ma Jun, the chief economist at the cen-tral bank’s research bureau, said in a speech this month that recent data points, includ-ing real-estate investment growth, industri-al value-added growth and producer prices, indicate the economic outlook is probably better than some economists forecast.

The stabilizing trend isn’t giving inves-tors “enough con�dence,” as China seems to have relied more on government in-vestment in state-owned enterprises to boost the economy, said Gao Xiqing, for-mer vice chairman of the China Securities Regulatory Commission, in an interview in New York this week.

China stepped up intervention in its �nancial markets after turmoil in its stock market roiled global markets at the start of the year and extended last year’s $5-trillion sello�, while the yuan fell to a �ve-year low. Bloomberg News

CHINA’S DEBT-FUELED ECONOMY RESEMBLES U.S. IN 2007-08, SOROS SAYS

WASHINGTON—At least four Republican US senators say they’ve decided to skip July’s

party nominating convention in Cleveland to campaign in their home states. Several others say they haven’t decided whether they’ll make the trip, and at least one will boycott the event if Donald Trump emerg-es as the Republicans’ presidential pick.

This year’s convention is shaping up as perhaps the party’s most pivotal—and contentious—in a generation, and Senate Republicans appear increasingly nervous about it. Many in the party are agonizing over the possible elevation of Trump or a contested convention that awards the nomination to someone else, either of which risks damaging the party and hand-ing Senate control to Democrats.

House Speaker Paul Ryan even used a Tuesday night appearance on CNN to call on his colleagues in Congress to attend what he said “could be a great his-torical exercise.”

So far, most of the senators planning to skip the convention are being careful to avoid blaming Trump or the potential messiness directly.

Sen. John McCain of Arizona, the party’s 2008 presidential nominee, said on Tues-day that he’ll be too busy running for his sixth Senate term to go to Cleveland, with his own primary just weeks later.

“It’s not unusual for someone who’s up for reelection to be campaigning,” McCain said, when asked whether he would rather avoid a potentially disordered convention. “I have a primary that’s on August 30.”

McCain is facing what may be his toughest reelection �ght and has clearly been uncomfortable with Trump’s suc-cess. Two others not attending—Mark Kirk of Illinois and Kelly Ayotte of New Hampshire—also face tough races against Democrats.

Even though those taking a pass on Cleveland say they just want to be on the campaign trail, staying away a�ords them other advantages. They might be able to avoid taking sides in what could be a pro-tracted and bitter feud between Trump and Texas Sen. Ted Cruz, and perhaps distance themselves from any chaotic fall-out—or an unpopular nominee.

But their absences also diminish the likelihood of any grand unity gesture emerging from the convention, if many of the party’s senior leaders and most well-known �gures aren’t even in the room.

Alaska’s Lisa Murkowski noted the convention, which is scheduled to run from July 18 to 21, “is very shortly before my primary. So I’m going to be home with Alaskans.”

Asked whether �ssures in the party over leading candidates Trump or Cruz contributed to her decision, she re-

sponded, “I won’t be there.”Of course, it isn’t unprecedented for

senators to skip the event. In 2008, when the Republican brand was damaged in the wake of the George W. Bush adminis-tration, a handful of vulnerable senators skipped the GOP convention in Minneapo-lis, including Pat Roberts of Kansas, Susan Collins of Maine, Gordon Smith of Oregon, Elizabeth Dole of North Carolina and Ted Stevens of Alaska.

Trump’s bullying rhetoric and Cruz’s history of bucking his party’s Senate lead-ers could lengthen the list of lawmakers planning to sit out this year’s convention.

Sen. Je� Flake of Arizona, who ear-lier endorsed Sen. Marco Rubio of Florida, said he’ll decide whether to go based on “whether it’s a Trump coronation or not. If it is, I see no reason to go.”

Sen. Lindsey Graham of South Caroli-na, an unsuccessful presidential contender who has said Trump’s policy pronounce-ments endanger stability in the Middle East and leave foreign leaders “dumb-founded,” said he’ll decide later whether to attend based on “how crazy it looks.”

Still, many other Republican senators are planning on going, including Majority Leader Mitch McConnell of Kentucky, Re-publican Whip John Cornyn of Texas and Rubio, who will arrive with some delegates won in primaries before his March 15 deci-sion to suspend his presidential campaign.

At least one senator running for re-election will also be there: Rob Port-man of Ohio, who would have trouble skipping such a gathering in his home state. He is, however, planning his own parallel convention, which could o�er him some separation.

Some senior senators say they will go precisely because the wisdom of party el-ders may be sorely needed.

“I’ve never missed one,” Orrin Hatch of Utah said, adding he plans to go even if the convention gets messy. “Especially, be-cause they’re going to have to have some people with brains, you know. I shouldn’t say that.”

Among those vulnerable senators on the ballot, a few are weighing making just brief trips to Cleveland. Sen. Roy Blunt of Missouri, who won his last election with 54 percent of the vote, said that if he goes it will only be for “a day or two.” He’s more fo-cused on his August 2 Republican primary, he said, and doesn’t plan to be a conven-tion delegate, anyway.

Blunt said there’s some bene�t to stay-ing away for those up for re-election. If the convention is contested, he said, some will inevitably describe it as a “brokered” one, where powerful people in the party swoop in to help steer the outcome, rather than the delegates them-selves. Bloomberg News/TNS

Republicans agonizing to face Trump conventionCONSERVATIVE members of Parliament Tom Pursglove (left) and Peter Bone (third

from left) stand with Nigel Farage (second from left), leader of Britain’s UKIP party; and Nigel Gri�ths, Labour Party politician, as they hold the application letter and documents outside the Electoral Commission in London on March 31. Grassroots Out submitted its application to the Electoral Commission for designation as the o�cial “Leave” campaign in the European Union referendum. AP/KIRSTY WIGGLESWORTH

PRESIDENT Barack Obama will urge Britons on Friday to keep their country in

the European Union (EU), a rare intervention in the domestic politics of an ally that poses little risk to the president back home while irritating proponents of so-called Brexit in the United Kingdom.

Poll respondents who want the UK to stay in the union

95%

Friday, April 22, 2016 •Editor: Angel R. Calso

OpinionBusinessMirrorA10

Is press freedom important?

editorial

REPORTERS Without Borders (RSF)—a Paris- based non-governmental organization—re-cently released its 2016 World Press Freedom Index. The Philippines ranked 138th out of 160

countries, with a score of 44.66. The lower the score, the more press freedom.

While our ranking went higher, our score was actually worse than in 2015 (41.19) and 2014 (43.69). We are just better, because the rest of the world has gotten worse.

Our ranking puts us in the same group as Honduras—the murder-capital country of the world—and Venezuela, which is nothing to brag about. The problem, as RSF sees it, is the abuse that the press is subject to and, of course, they still cannot stop mentioning the 2009 Maguindanao massacre.

But death threats and actual killings aside, we do well. In the categories measuring if multiple opinions are found in the daily press, if government in-terferes, the legal framework that protects press freedom and if there is self-censorship, the Philippines rates high. The rankings even measure the quality of the infrastructure that supports the production of news and information, and that the Philippine government does not censor media, like the Internet.

It is just all those pesky killings of journalists that the government never can seem to do anything about that brings down our score. On the abuse of journalists, we rank right next to some other countries, like Egypt, that have problems with press and media people dying.

Maybe the question that should be asked is: Is freedom of the press and media important at all?

China ranks 176th out of 180 countries. Its “abuse” score is 90.44. Chinese President Xi Jiping is on RSF’s list of “predators of press freedom”. Unfriendly and “independent” journalists not working for the approved media outlets are jailed.

But since 1992, the Philippines has had 77 confirmed cases of honest jour-nalists being killed for their work and 54 “unconfirmed” murders. Compare that with China, which, since 1992, has only two confirmed and three uncon-firmed journalist killings, as reported by the global organization Committee to Protect Journalists.

China may be repressive and oppressive to press freedom but being a mem-ber of the press or media is safer in China than in the Philippines. You see, members of the Philippine press and media are dying for your “press freedom,” and nothing is changing for the better.

Politicians and government officials like the idea of having a ready and free forum to express their views. The public likes having multiple opinions and all the news possible every single day. But neither the politicians nor the public are paying any price to preserve and protect the freedom of the press.

Certainly, some in the press and media are bad apples that do things they should not, as in any business. But maybe the next time a legitimate and hon-est journalist/broadcaster has his or her life taken for pursuing and reporting the truth, ask yourself what is being done to protect the right to press freedom.

@ELLIECENTENO got me thinking when she tweeted, “can’t wait for the elections to be over so we can go back to tweeting about dumb shit like feelings and the weath-

er.” She isn’t wrong. Compared to the fights we get into with each other now, over who’s the better choice for some elective office, “dumb” small talk about how hot it is would be a relief.   

Inconsequential things

As important as elections are, there is no denying that this sea-son, in particular, needs to be fol-lowed by a time of quiet, devoted to rediscovering why we used to be friends before we started disagree-ing about politics.

A lot of this healing depends on us, of course. We need to leave the divisiveness of politics behind and focus, instead, on how we can work together to achieve common goals. I don’t suppose politicians will ever truly be reconciled, but this scorched earth environment we have now should not be allowed to persist after the winners have been declared.

For that to happen, however, winners must be magnanimous in victory and take the lead in working for reconciliation. More important, losers must not be dicks about los-ing. And that applies both to poli-ticians and to us—their partisan supporters.

Also on Twitter, I was practically called an idiot for saying that los-ers should nevertheless support the government of the elected can-didates, while remaining true to their own principles. “Why should [the loser] support the elected winner if he has any conviction that he was the right choice?”

Except in megalomaniacs, there

is no contradiction between believ-ing in oneself and in accepting the possibility that, perhaps, someone less “perfect” might actually be chosen for the job. A person mo-tivated solely by ambition might not be able to see that, but one who aims primarily to serve would still be of service, whether or not he or she wins. To say that such dedica-tion to service equates to idiocy is to perpetuate exactly the kind of thinking that hobbles this na-tion and locks it into a perpetual

state of finger-pointing, and crass politicking.

We are more polarized today than we have ever been. On one level, that disunity predisposes political leaders to tearing down everything they cannot claim to be their accomplishment. In the end, we—the governed —can move forward only with tiny steps that, with every succeeding election, we might even be forced to take back. A good loser, willing to shelve his or her ambition so that political rifts can be healed, could change that. In turn, that could change the rest of us, as well.

On another level, unless we deliberately quit putting political views at the top of our criteria for friendship the way some of us do now, we’re all going to end up just insufferable to each other. Who would want that?

So, as soon as the circus leaves town, chill. We can all do so much worse than occasionally tweet-ing about inconsequential things, while the world sorts itself out around us and our friends.

James Arthur B. Jimenez is director of the Com-mission on Elections’s Education and Information Department.

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SPOXJames Jimenez

We are more polarized today than we have ever been. On one level, that disunity predisposes political leaders to tearing down everything they cannot claim to be their accomplishment. In the end, we—the governed—can move forward only with tiny steps that, with every succeeding election, we might even be forced to take back.

Friday, April 22, 2016

[email protected]

MY mother turned 90 in March. She was 16 years of age when the Pacific War broke out. She remembers the day they were all gathered in front of the main building of the

Sorsogon High School to be told to go home, and wait for instruc-tions when the school would open again. She always looks back to the day she bid good-bye to friends.

My mother is 90There were no cell phones dur-

ing her teenage years. But there were dances. You had to learn the steps to be socially accepted. She has fond memories of a dear friend who would come home to the island from Manila for a summer break. The morning of his arrival, he would immediately go to my grandfather’s home. There, he would practice with my mother, from morning till dusk, the latest dance craze in the big city. When she met my father, a young adventurer who came with the priest from mainland Bikol, it was forever the tango. It was not the wild tango but the quiet, fluid one, where the “dip” was considered “heaven” by young men then. That was the closest you can hug and touch a woman in public and not be censured by the Church.

She was pregnant during one of the great eclipses that covered the entire island of Ticao. She speaks of how the chicken and roosters came to roost when the world turned dark.

She was urged not to come out of the school where she was teaching. Eclipse was considered dangerous to pregnant women.

She was in her mid 70s when she lost her eldest son. She was very calm all throughout the six months my brother battled with cancer. At the church, she wept but remained quiet. It was when the coffin was being lowered that she started to keen and finally uttered the words that mothers owned: Why have you gone ahead of me?

Children bury their mothers, their parents. Mothers cannot un-derstand when they are tasked to look over the grave of their children.

Yesterday, I told my mother the Queen of England had turned 90 years old. She just looked at me. Queen Elizabeth carries the bur-dens of history. My mother bears the weight of her age and the tricks her mind works with the past.

E-mail: [email protected].

When Liberation (for that was how it was called by their genera-tion) came, she went back to school. She went to Manila to secure an ETC or Elementary Teacher’s Certificate. The country needed teachers and there was a rush to have them fin-ish their education so they could be back in the classrooms. My mother was assigned, together with other very young teachers, to schools that

could be reached only by walking over rice paddies and crossing rivers and streams with strong currents.

My mother was 24 years old when another war broke out: the Korean War. That was a seven-year lull af-ter the end of the Second World War. She and her generation became all de facto veterans of war, experts in coping with the loss of lives and the absence of peace.

ANNOTATIONSTito Genova Valiente

EAGLE WATCHLeonardo A. Lanzona Jr.

ECONOMIC development requires continuous introduc-tion of new and better technology to an existing industry. Most households in the Philippines depend on agriculture

for their livelihood. Improvements in agricultural technology are then necessary to increasing farmers’ income and reducing poverty. At the same time, economic development also requires continuous diversifying and upgrading from existing industries to new, more capital-intensive ones.

Agricultural policy must focus on technological innovation

A feature of development then is structural transformation, which leads to a declining share of agricul-ture in value added in the economy (share of GDP) and employment (share of the labor force). Without such a structural transformation, the scope for sustained increase in per capita income will be limited. Hence, innovation and structural transformation are two elements of the same pod.

The Philippines has actually embarked on structural transfor-mation program, which had been the source of much of the growth in the last few years. Named the Manufacturing Industry Road-map, this program has identified industries viewed as crucial to the resurgence of the manufacturing sector. However, despite its laud-able achievements, this program seems to equate growth with in-dustrial expansion. While strides have been made in reducing dis-crimination against agriculture, particularly through social protec-tion programs, the current manu-facturing program of this admin-istration would appear to support the industrial and urban bias that has itself produced a very large eco-nomic distortion.

Like previous attempts of in-dustrialization in the country, the main weakness of the road map is its refusal to recognize that the ba-sic cause and effect of a sustainable transformation is a rising produc-tivity of agricultural labor. Advo-cates of industrialization mistake the relative decline of agriculture as a signal to ignore the sector and starve it of investment resources and policy attention. However, his-tory tells us that the only sustain-able path out of poverty and into sustainable development is higher agricultural productivity coupled with a dynamic nonagricultural economy. Failure to invest in agri-cultural research and development, and in rural health and education has been a major weakness of many countries’ development strategies.

For this reason, the food secu-rity of the Aquino administration would have made a lot of sense. Like other importing countries, the Phil-ippines embarked on food-security programs, particularly in rice, com-prising mainly of public invest-ments in irrigation, research and extension, input subsidies on seeds and fertilizer, postharvest facilities and farm-price supports. This pro-gram can potentially contribute to the structural transformation if it leads to further agricultural pro-duction and establishes a process of income convergence between urban and rural areas, and between poor and nonpoor households. In other words, food-security programs are more successful when it raises agricultural labor productivity, and thus, complement structural transformation.

Unfortunately, the reality is far from the expectation. Instead of creating a more dynamic rural economy, a decline in the share of agriculture in the country’s total output was observed. Further-more, labor productivity in agri-culture remained largely constant and significantly lower than the other sectors.

What explains this phenom-enon? The answer lies in the ob-jectives of the program. A central aim of the food-security program was to limit import dependency on rice. The recent volatility of inter-national food prices has reinforced the mistrust felt within many food-importing countries, such as the Philippines and Indonesia, toward international markets as suppliers of affordable food. One response then is to become less reliant on food imports. Concern about food security, thus, became transformed into concern about  food self-suffi-ciency. But food security and food self-sufficiency are different things and they can be in conflict.

One of the instruments of the rice-sufficiency program was pre-cisely to establish quantitative re-strictions (QR) on rice imports. The private sector can import rice only if permission has been granted from agencies implementing the QR. The goal was to ease the pressure on rice farmers to compete with sub-sidized and cheaper rice imports. Eventually, these restrictions have to be diminished because they have resulted in higher prices for the consumers (which includes farm-ers themselves) and greater market power for private rice importers.

Apart from hurting consum-ers and raising income inequality, this protectionist stance created a disincentive to create, engage and adopt better technology. Even up to now, the rice farmers rely mainly on Green Revolution types of technol-ogies whose more modern variants have proven to be less productive and less lucrative than its origi-nal varieties. Given that farmers are already on the frontier of this technology and that agricultural labor productivity remains low, the government should encourage further agricultural innovation as a way of increasing productivity and mitigating the likely adverse effects of reducing QR in the long term.

More important, the innovation of innovation needs to be pursued, as well. The emerging reforms and changes in knowledge structure of agriculture explicitly indicate that the traditional agricultural research and extension system (which is heavily dependent on pub-lic research and extension institu-tions) cannot sufficiently address the challenges of the new trends. Instead, an agricultural innova-tion system approach should offer a holistic and multidisciplinary ap-proach to innovation and processes, and incorporate emerging reforms and approaches for agricultural de-velopment. Several other relevant macroeconomic and meso-level factors, such as policy and legal frameworks, nature of human capi-tal, physical infrastructure, finance and investment conditions, climate change, information and knowl-edge flows and, finally, food secu-rity and structural transformation, should be considered as important inputs of this agricultural innova-tion system.

Leonardo Lanzona Jr. is director of the

Ateneo Center for Economic Research and De-velopment and a senior fellow of Eagle Watch, the school’s macroeconomic research and fore-casting unit.

‘Solar Lolas’: Lighting up lives

SINCE 1970, April 22 has been celebrated annually as World Earth Day with events all over the globe to demonstrate sup-port for the protection of the environment. Many of the events

are symbolic and are focused mainly on raising awareness about environmental issues. A welcome development is the increased attention to the role of women and girls as agents of change, particu-larly in underdeveloped communities, not just on World Earth Day, but every day.

Recognizing this, Diwata-Wom-en in Resource Development Inc. (Diwata), together with the Philip-pine Mine Safety and Environment Association (PMSEA) and the Land Rover Club of the Philippines (LRCP) (collectively, the “Project Partners”), with the support of the Embassy of India in the Philippines, embarked on a project called “Tanging Tanglaw: Turning IP Grandmothers into So-lar Engineers.” It aims to empower indigenous peoples (IP), particularly grandmothers (i.e., mature women who are no longer the primary care-givers of their families) by teaching them how to harness solar power to light up their communities.

The project involves sending il-literate and unskilled women to the Barefoot College in Tilonia, India, to attend a six-month training course on solar engineering, specifically, fabricating, installing, repairing and maintaining solar lighting equipment. The Barefoot College was founded by Sanjit “Bunker” Roy, named one of TIME Magazine’s most influential people in 2010. The Bare-foot College provides training in, among others, solar technology, in the belief that even the uneducated poor have the right to use technolo-gies to improve their life and skills.

Based on the many years of expe-rience of the Barefoot College, wom-

en, rather than men, are specifically chosen because, after receiving their training, the women return to their villages to influence daily life and play a major role in their develop-ment rather than migrating to other places as men or younger community members might.

The Project Partners arranged the logistics and assisted the Bare-foot College and the government of India to select a group of four Aeta women, namely, Evelyn Clemente, Sharon Flores, Cita Diaz, and Magda Salvador (a.k.a the “Solar Lolas”) to undergo a six-month, live-in train-ing at the Barefoot College. Evelyn and Sharon are from Gala, Zambales, while Cita and Magda are from Bam-ban, Tarlac. They departed for India on September 16, 2014, and returned on March 16, 2015. Their return has generated much interest from the media and the general public.

During their six months of train-ing at the Barefoot College with other women from different countries, the four grandmothers learned solar engineering and other livelihood activities, such as making mosquito nets and sanitary napkins. Learning complex new concepts and interact-ing with people of different cultures built their self-confidence and fueled their desire to be agents of positive change in their villages. One of the

highlights of their training was a meeting with United Nations Women Executive Director Phumzile Mlam-bo-Ngcuka, at the UNDP Headquar-ters in New Delhi.

Upon returning to their respective villages, each pair of solar grandmoth-ers will be responsible for solar-elec-trifying 100 households. In the case of Bamban, Tarlac, electrification is currently nonexistent and most of the households use kerosene lamps for lighting. On the other hand, electric-ity is available in Gala, Zambales, but not all the families avail themselves of it. The Solar Lolas will assume the responsibility for installing and main-taining the solar panels and lamps for a minimum of five years.

Once the communities are solar-electrified, qualitative improve-ments in the communities’ standard of living are expected, as the mem-bers will be able to use electrical ap-pliances and gadgets, enabling them to become more productive. The children, in particular, will be able to study at night, learn to use comput-ers, and possibly access the internet.

In the year since the Solar Lolas returned from India, the Project Partners have worked hard to raise the amount of P2.6 million for each community of 100 households. As of this writing, the required solar equipment have arrived from India and are awaiting release by the Bu-reau of Customs. The Solar Lolas are expected to begin installing them in the two pilot communities within the next two to three months.

The response to Tanging Tanglaw has been most gratifying. Support has poured in not just from corpo-rations that are keen on adopting this business model as a corporate social responsibility initiative, but also from individuals who have con-tributed modest amounts to add to the project fund.

Other like-minded organizations, such as the Filipina CEOS Circle, and even the Bases Conversion and Development Authority and Clark Development Corp., have stepped forward to provide support.

It has been pointed out to that cheaper solar panels are available lo-cally. However, our project does not simply involve providing lights, but also giving our Solar Lolas and their communities the means to improve their lives. I personally witnessed how shy and unsure our Solar Lolas were when they departed for India. Upon meeting them at the airport as they stepped off their flight, I was completely amazed at how their training transformed them into con-fident, self-assured and articulate role models for their communities.

In communities abroad where the Barefoot College model has been successfully implemented, solar electricity has been provided to schools, hospitals, local adminis-tration offices, religious buildings and community centers. Most im-portant, the projects have managed to reduce carbon-dioxide emissions, slow the negative impacts of defor-estation and decrease air pollution from burning firewood and kero-sene. It is envisioned that the local communities served by our Solar Lolas will derive similar benefits, if it takes one household at a time. More important, the Solar Lolas are now themselves beacons of light who have the power to change others.

Patricia A. O. Bunye is the founding president of Diwata-Women in Resource Development Inc. She is also a senior partner at Cruz Marcelo & Tenefrancia and heads its Mining and Energy practice. E-mail her at [email protected].

Based on years of experience of the Barefoot College, women, rather than men, are specifically chosen because, after receiving their training, they return to their villages to influence daily life and play a major role in their development rather than migrating to other places as men or younger community members might do.

WOMEN STEPPING UPAtty. Patricia A.O. Bunye

WOM

A12

2ndFront PageBusinessMirror

www.businessmirror.com.ph

2Friday, April 22, 2016

‘Q1 GDP growth seen ranging from 6%-6.3%

SALES OF MITSUBISHIVEHICLES IN JANUARYTO MARCH UP 23.8%

B C O @caiordinario

LOCAL economists said GDP growth in the first quarter will not breach 7 percent

and could fall within the 6 percent to 6.3 percent range, despite the expected hike in consumer spending due to the elections.

According to the World Bank, GDP growth for the whole of 2016 could settle at 6.4 percent. While the figure is more optimistic than the projection of economists, it is lower than actual GDP growth of 7.6 percent in 2010, when the coun-try elected a new president.

The tamer projection, accord-ing to some analysts, could be attributed to the possibility that the Philippines is no longer overly dependent on election spending to boost growth.

“I think the economy has been gathering momentum to break free from the boom-and-bust cycle. The forward push has been accumulat-ing through time,” University of

Asia and the Pacific School of Eco-nomics Dean Cid Terosa told the BusinessMirror.

Terosa projected first-quarter GDP growth to fall within the 6 percent-to-6.25 percent range. The most optimistic forecast came from the Ateneo de Manila University’s EagleWatch, which projected first-quarter GDP growth to reach 6.3 percent.

EagleWatch senior fellow Alvin Ang said, however, they will review their estimate by the end of April. Both Terosa and Ang believe that the Philippine economy is no longer trapped in the boom-and- bust cycle. Ang said the country was able to escape from it during

the Arroyo administration. University of the Philippines (UP) economist Ernesto Pernia, however, said the country has not yet graduated from the boom-and- bust cycle. “I cannot say that the boom-and-bust cycle is a thing of the past. It depends largely on what the next administration will do [to sustain growth],” Pernia said. The UP economist projected GDP growth in the first quarter to settle at only 6 percent. Boom-and-bust cycles occur when the economy experiences strong growth one year and weak growth the next. In the case of the Philippines, growth “booms” dur-ing elections years. Earlier, the World Bank said

this year ’s GDP g row th w i l l reach 6.4 percent due to the presi-dential elections and increased domestic spending. Increased government spend-ing for the elections, coupled by strong domestic spending due to low commodity prices, will be the biggest growth driver for this year, according to the World Bank. In 2010, which was an election year, the Philippines posted the highest economic growth rate in over three decades at 7.6 percent. Data from the Philippine Statis-tics Authority showed that, in that year, the highest growth among the sectors was “capital formation,” which grew 31.6 percent from -8.7 percent in 2009. Exports of goods, which con-tracted by 11.2 percent in 2009, recovered in 2010. In that year, outward shipments of Philippine goods rose by 24.7 percent in terms of value. The country’s import bill also grew by 23.4 percent.

7.6 %GDP growth in 2010

I think the economy has been gathering momentum to break

free from the boom-and-bust cycle.” —T

B C N. P @c_pillas29

MITSUBISHI Motors Phi l ippines Corp. (MMPC) said its sales

in the first three months of 2016 grew 23.8 percent to 14,688 units, from 11,849 units record-ed in the same period last year.

The company said in a state-ment that its market share also improved to 19.18 percent, from 18.84 percent in the first quarter of 2015.

Sales of passenger cars rose 22 percent compared to the pre-vious year’s sales of 4,564 units.

The volume of light com-mercial vehicles (LCV) sold by Mitsubishi also grew by 24.5 percent, due to the popularity of the Montero, which accounted for almost half of the LCV sales.

The company’s performance was also driven by strong de-mand for the Mirage, Mirage G4 and all-new Montero Sport.

Locally manufactured units, such as the Adventure and L300, were also top volume sellers, according to MMPC.

Mitsubishi’s sales during the period tracked the perfor-mance of the entire automotive industry, which recorded sales

growth of nearly 22 percent.According to a statement

by the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) and Truck Manufac-turers Association (TMA), car sales reached 76,479 units from January to March 2016. This is a 21.6-percent im-provement over the same pe-riod in 2015, when sales were at 62,882 units. Passenger cars saw a 19-per-cent increase in the first quarter, with 25,051 units sold.

In March alone, 11,345 units were sold in this segment com-pared to the 9,819 units notched in the same month in 2015.

Commercial vehicle sales increased by 23 percent in the same period, crediting the healthy growth to infrastruc-ture improvement activities.

4,564 Number of passenger cars

sold by Mitsubishi in the Philippines