44

Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

  • Upload
    others

  • View
    3

  • Download
    0

Embed Size (px)

Citation preview

Page 1: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment
Page 2: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment
Page 3: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment
Page 4: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

Getting to Know You AmCham's Most VersatileCommittee Chairman, page 34

Investment What's driving Citizenship-by-Investment for Asia's Elite, page 12 Feature The Ongoing Fight Against Online Piracy: A Legal Analysis, page 32

Contents

Cover Story 2016 Review and 2017 Projection of National Economy, page 8

"Mr. President —Sir, we have a cybersecurity problem..."Michael Mudd, page 28

"Night At The Races"For the Benefi t of AmCham Foundation Education ProgramsAmCham Foundation, page 24

6 From the Editor Time fl ies...

8 Cover Story 2016 Review and 2017 Projection of National Economy

10 TAPP News The Arangkada Philippines: Broadband Policy Brief

12 Investment What's driving Citizenship-by-Investment for Asia's Elite

13 Company News Citibank Shares 7 Useful Tips to Protect Your Finances!

24 AmCham Foundation News "Night At The Races" For the Benefi t of AmCham Foundation Education Programs

26 Photo Submission of the MonthKids playing make believe

30 Quick Winning QuotesQuick Winning Quotes Series for

the Busy Executives

32 FeatureThe Ongoing Fight Against Online

Piracy: A Legal Analysis

34 Getting to Know You AmCham's Most Versatile Committee Chairman

36 Health MattersLasik Surgery For You

38 Business of Business HRD for Global Competitiveness

Cover Photo By: BJORN HOLLAND / GETTY

Page 5: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

JANUARY 2017 AMCHAM BUSINESS JOURNAL 3 AMCHAMPHILIPPINES.COM

PUBLICATIONS

EBB HINCHLIFFEEditor in Chief

LESLIE ANN MURRAYManaging Editor

BEA MARTINEZLayout Editor

CHET GUEVARAAdvertising Head

ROY I. FUIGADOPhotographer

ERNIE CECILIAChairman

MANUEL R. GUILLERMOPublications Committee Adviser

ATTY. EMMANUEL T. SANTOSKATHERINE D. MAYOMembers

Published By THE AMERICAN CHAMBER OF COMMERCE OF THE PHILIPPINES, INC.

Member PUBLISHER ASSOCIATION OF THE PHILIPPINES, INC.

All rights reserved. AmCham Business Journal is a general business magazine published monthly by The American Chamber of Commerce of the Philippines, Inc., with offi ces at 2nd Floor, Corinthian Plaza, Paseo de Roxas, Legaspi Village, Makati City 1229 (C.P.O. Box 2562, Makati City1265), Philippines; telephones: (632) 818-7911 to 13; fax (632) 811-3081 / 811-3184; emails:[email protected] / [email protected]; website: http://www.amchamphilippines.com. Publication Registration No.: ISSN-0116-452X

All views expressed in all articles are those of the authors and not of The American Chamber of Commerce of the Philippines, Inc. The American Chamber of Commerce of the Philippines, Inc. accepts no liability for the accuracy of the data or for the editorial views contained in the articles. Publication of unsolicited articles is at the sole discretion of the Publications Committee.

No article or content can be reproduced in any manner whatsover without the prior written consent or authorization of The American Chamber of Commerce of the Philippines, Inc.

Entered as second-class mail at the Manila Post Offi ce on May 24, 1921 and on December 10, 1945. Re-entered as second-class mail at the Makati Central Post Offi ce on May 7, 1992 and under Permit #534 dated May 24, 1993.

PUBLICATIONS

EBB HINCHLIFFEEditor in Chief

LESLIE ANN MURRAYManaging Editor

BEA MARTINEZLayout Editor

CHET GUEVARAAdvertising Head

ROY I. FUIGADOPhotographer

ERNIE CECILIAChairman

MANUEL R. GUILLERMOPublications Committee Adviser

ATTY. EMMANUEL T. SANTOSKATHERINE D. MAYOMembers

Published By THE AMERICAN CHAMBER OF COMMERCE OF THE PHILIPPINES, INC.

Member PUBLISHER ASSOCIATION OF THE PHILIPPINES, INC.

CONTENTS

AMCHAM ROUNDUP

14 • AmCham-Cebu Celebrates Thanksgiving Dinner • Tax Updates

16 • The Eff ects of Ending Temporary Employment Contracts • A Safer NAIA: The New Communications Navigation Surveillance/ • Air Traffi c Management Systems Development

18 • The Information, Communications & Technology Christmas Party

19 • Winning the Talent War in 2017

20 • Manufacturing Summit 2016

22 • The Professional Women of AmCham "White Christmas" Cocktail Party

23 • Annual General Membership Christmas Bash

28 • "Mr. President — Sir, we have a cybersecurity problem..."

OTHER SECTIONS

3 • AmCham Publications

4 • AmCham Standing Committees

5 • AmCham Chapters

40 • Members' Birthdays: February - March • Index to Advertisers • AmCham Social Media Accounts

Page 6: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

4 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

OFFICERS AND DIRECTORS2017

H.E. SUNG Y. KIMU.S. Ambassador to the Philippines

Honorary Chairman

BRUCE WINTONPresident

RICK SANTOS1st Vice President

ROBERTO BATUNGBACAL2nd Vice President

PETER MORRISTreasurer

MICHAEL HUEHNERICHARD J. MCGONEGAL

PETER J. MORRISRICK SANTOS

FRANK A. THIELSHANKAR VISWANATHAN

Directors

GEORGE M. DRYSDALEDON FELBAUM

ROBERT M. SEARSDirectors, Ex-Offi cio

EBB HINCHLIFFEExecutive Director

ATTY. AILEEN TOLOSA-LERMACorporate Secretary

DEMETRIO P. SALIPSIP, JR.Chairman, AmCham Retirement Fund

AmCham Standing Committees

The American Chamber of Commerce

of the Philippines, Inc.First AmCham in Asia

AmCham Foundation

AmDesk at the BOI

Business Leadership Program (BLP)

Filipino-American Memorial Endowment(FAME)

The Arangkada Philippines Project (TAPP)

Washington Relations / APCAC

EDWIN D. FEIST / JUN SALIPSIP

EBB HINCHLIFFE Yves Aguilos

JUN SALIPSIP / DAVID CALDWELL Pinky Jamili

Lt. Col. ART MATIBAG Trixia BravoLESLIE ANN MURRAY

JOHN D. FORBES Yves Aguilos RICK SANTOS / GEORGE DRYSDALE Divina Combes

ACTIVITIES/ADVOCACY/AFFILIATE

AMCHAM COMMITTEES COORDINATORS

Agribusiness

Energy & Power

Energy E� ciency

Environment and Urban Development

Extractive Industries

Financial Servicesand Taxes & Tari�

Healthcare & Wellness & Pharmaceutical

Human Capital & Resources

Information & Communications Technology (ICT)

• Business Process Outsourcing• Creative Industries

Infrastructure & Logistics

Intellectual Property Rights

Legislative

Manufacturing

Professional Women of AmCham

Security Disaster Resource Group / OSAC

Tourism & Hospitality

Trade & Investment

PHILIP G. SOLIVEN Alyssa DispoVARINIA ELERO-TINGA FRANK THIEL Alyssa DispoJOSE VICTOR EMMANUEL DE DIOS

SAFDAR QURAESHI Migs Calaguian

JUN PALAFOX / JAMES DONOVAN Migs Calaguian

MICHAEL HUEHNE Yves Aguilos

HENRY T. PELAEZ / ATTY. JULES RIEGO Migs Calaguian

DONALD R. FELBAUM Trixia Bravo

ERNIE O. CECILIA Yves AguilosGRACE SORONGON DONALD R. FELBAUM Trixia BravoFRANK HOLZ

Trixia Bravo Trixia Bravo JAIME FAUSTINO Migs CalaguianJOHN PETERSON

Atty. DIVINA P.V. ILAS-PANGANIBAN, LL.M. Trixia BravoJEFFREY A. WILLIAMS, CPP, BAI

JOHN D. FORBES Yves Aguilos

ROBERTO BATUNGBACAL Migs CalaguianSHANKAR VISWANATHAN Atty. MELANIE LAGERA Alyssa DispoVARINIA ELERO-TINGA SIMOUN UNG / PETE TROILO Trixia Bravo

ROBERT BLUME / FARID SCHOUCAIR Alyssa Dispo MARIO BISCOCHO Yves Aguilos

Membership

• Kapihan

• Welcome Breakfast• Networking

Provincial Chapters• Central Luzon

• Visayas• Mindanao

Young Professionals

Publications

I N T E R N A L

ROLAND DELA CRUZ Pauline SantosCHRISTINE STEVENS

EBB HINCHLIFFE Pauline SantosLESLIE ANN MURRAY Pauline Santos Alyssa Dispo

EBB HINCHLIFFE Pauline Santos Jaysen Venzon Brenda Lisen Annie Quitay

MORGAN MCGILVRAY Migs Calaguian

MANUEL GUILLERMO Leslie MurrayERNIE CECILIA Bea Martinez

CHAIRMEN

I N T E R N A L

Page 7: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

JANUARY 2017 AMCHAM BUSINESS JOURNAL 5 AMCHAMPHILIPPINES.COM

AmCham Chapters

THE AMERICAN CHAMBER OF COMMERCE OF THE PHILIPPINES, INC.(Founded 1902 - Incorporated 1920)

2/F, Corinthian Plaza, Paseo de Roxas, Legaspi Village, Makati City 1229Tels.: (632) 818-7911 to 13 Fax: (632) 811-3081

E-mail: [email protected]: http://www.amchamphilippines.com

Bruce Winton, PresidentEbb Hinchli� e, Executive Director

THE AMERICAN CHAMBER FOUNDATION PHILIPPINES, INC.(Founded 1985)

Leonard Benjamin Development Center4554 Casino cor. Olivarez Streets

Palanan, Makati CityTels.: (632) 834-0184; 551-8060 Tel/Fax: (632) 834-1192

E-mail: [email protected]: www.amchamfoundation.com

Edwin D. Feist, PresidentDemetrio P. Salipsip, Jr., Executive Director

FILIPINO-AMERICAN MEMORIAL ENDOWMENT, INC. (Founded 1986)

c/o The American Chamber of Commerce of the Philippines, Inc.2/F, Corinthian Plaza, Paseo de Roxas, Legaspi Village, Makati City 1229

C.P.O. Box 2562, Makati City 1265Tels.: (632) 818-7911 to 13 Fax: (632) 811-3081

E-mail: [email protected]: http://fi lipino-americanmemorials.org

Lt. Col. Artemio Matibag, PresidentLeslie Murray, Vice President

THE AMERICAN CHAMBER OF COMMERCE OF THE PHILIPPINES, INC. (Mindanao Chapter-1988)

Door 9, 3/F, SJRDC Building IIIInsular Village 1, Lanang

Davao City, 8000Telefax: (6382) 221-6656

E-mail: [email protected]

Philip Dizon, PresidentAnnie Quitay, Membership Coordinator

AMERICAN DESK AT THE BOARD OF INVESTMENTS (Established 1992)

385 Sen. Gil Puyat Avenue, Makati CityTels.: (632) 895-8851; 895-3918 Fax: (632) 896-2315

E-mails: [email protected]; [email protected]

Ebb Hinchli� e - Director, American ChamberYves Aguilos - Government Liaison/Committee Coordinator

THE AMERICAN CHAMBER OF COMMERCE OF THE PHILIPPINES, INC.

(Cebu Chapter-1988)

Lower Ground FloorWaterfront Cebu City Hotel

Cebu City 6000Tel.: (032) 232-2373 Fax: (032) 231-0174

E-mail: [email protected]

Je� Minnick, PresidentBrenda D. Lisen, Secretary

THE AMERICAN CHAMBER OF COMMERCE OF THE PHILIPPINES, INC.

Central Luzon Chapter-2015)

Building 7294, C.M. Recto AvenueClark Freeport Zone, 2023 Pampanga

Telefax: (632) 811-3081; Mobile: 0917-5463442

E-mail: [email protected]

Ebb Hinchli� e, Executive DirectorJaysen S. Venzon, Membership Coordinator

Page 8: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

6 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

From the Editor

The January editorial is typically used to get some notable forecast for the coming year. However, this year we will forego that traditi on due to the fact that there is no one that can accurately predict what will happen in 2017.

2016 proved, if nothing else, the weaknesses of the U. S. polls. Hillary Clinton was forecast to win the US Presidenti al electi on by a landslide and had a 75 percent odds three days before the electi on. We all know how accurate that informati on was.

The Philippine pollsters got it a bit more right as their electi ons headed into May decision ti me. However, a few months earlier Grace Poe was 15 points ahead of her nearest rivals and we all know how that turned out.

Then there was the Brexit vote...

If one thing that can be forecasted accurately. That is, the American Chamber of Commerce of the Philippines will have a great year in 2017. All signs indicati ng the progress and growth seen in 2016 will conti nue without a pause.

Right off the bat we have two outstanding events lined up. In January the newly arrived US Ambassador to the Philippines, the Honorable Sung Kim, will be the speaker at the General Membership Luncheon. He chose the AmCham audience for his fi rst public speech.

The February Membership Luncheon will be the traditi onal “Honor Your Staff Day (HYSD)”. Yes, it has a slightly diff erent name this year. It was pointed out that what was really being honoured at HYSD was no longer just the secretaries but ALL of those that serve as the backbone of our member companies. The staff that day in and day out, keep our businesses running. This year should be one of the most presti gious events of the year as the Vice President of the Philippines, Leni Robredo is expected to be the guest speaker. And, of course, the usual appearances of a few media personaliti es, great music, wonderful gift s and prizes will make it a day to remember.

The next major event will be the 15th Year of the Business Leadership Program. The 30 brightest students chosen from universiti es across the Philippines will be in Manila for the last week of April. “The Best of the Best”! The program runs from April 21-29, 2017.

The Arangkada Project 2 contract is expected to be signed in January. The late start will cause a delay in the annual Arangkada Forum, but no need for concern. The largest event of the year will sti ll take place, however in October or November in 2017, instead of the usual February-March ti me frame.

As members, you can expect to see some excellent luncheons in 2017. There will be a slight change in years past as the AmCham team is working on several of these events being panel discussions on the key sectors near and dear to the membership: Energy, Infrastructure, Risk Management and Informati on Technology are just a few being considered.

This editorial should be fi lled with news and expectati ons for 2017. Suffi ce it to say that while 2017 may not be able to match the record number of meeti ngs and events of 2016, certainly the quality of the events will exceed it.

In closing, the “A TEAM” of AmCham, the Executi ve Director, and the Board wish everyone great prosperity in 2017! HAPPY NEW YEAR TO ALL!

P.S.: The Editor-in-Chief does have one resoluti on for 2017. He resolves that he will make resoluti ons in January 2018. And that is the one forecast you can trust!

Time fl ies...

Ebb Hinchliff e, Editor-in-Chief

The American Chamber of Commerce of the Philippines will have a great year in 2017. All signs indicate the progress and growth seen in 2016 will conti nue without a pause.

Page 9: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment
Page 10: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

8 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

Cover Story

2016 Review and 2017 Projectionof National Economy

Economic Performance in 20162016 could easily post 7 percent

gross domestic product when the final statistics are released by the Philippine Statistical Authority. However, it may range from 6.8 to 7.5 percent.

Just for the record, the Asian Development Bank (ADB) adjusted its earlier Gross Domestic Product (GDP) forecast of 6.4 percent to 6.8 percent for 2016 due to the 7.1 percent GDP performance in the third quarter, weaker peso, and higher exports.

Again, the ADB economist estimated, 6.8 to 7.5 percent after correcting two earlier miscalculations that the GDP may go down because of volatile global economy, presumably because of the unexpected election of Donald Trump to the US presidency.

The outlook for the Philippine economy remains favourable despite external volatility. It did not happen in just a short time in 2016. To be fair to the economic players, particularly, the foreign and local investors, entrepreneurs, and managers, the strong macro fundamentals of the economy are the accumulated results of improving economic performance over the years.

There should have been jubilation in the streets when the Philippines came out with a 7.1 per cent GDP in the third quarter of 2016, making the Philippines the “fastest growing economy in East Asia and the ASEAN, beating China’s

6.7 percent GDP”, the acknowledged number one economy in Asia and second to the United States as a global economic superpower. However, there was no breast pounding among the Pnoy and Duterte economic managers as the Philippines’ 7.1 GDP breezed over China’s 6.7 percent.

Economic pundits and know-it-all politicians who loved to humiliate their own country by comparing it to neighbouring emerging markets in the region got shamed this time. Aside from China, the Philippines’ 7.1 percent beat soundly Vietnam’s 6.4 per cent, Indonesia’s 5 percent, and Malaysia’s 4.3 percent. Something of which to be proud.

The surge in GDP performance in the third quarter was due to strong domestic demand, private consumption, gross private investments, inflation within the target band, and interest rates supportive of economic growth.

The recovery in agriculture took a leading role in the surge of the GDP. Agriculture sector unexpectedly rose close to 3 percent year-on-year after a disappointing performance of 1.5 percent for three successive quarters. In short, the continued momentum of the growth of agriculture

The Philippine economy has become the fastest growing economy in Asia due to massive private investments, strong consumer spending, and recovery in the agriculture sector.

Submitted by Emmanuel Tiu Santos, Ph.D

Page 11: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

JANUARY 2017 AMCHAM BUSINESS JOURNAL 9 AMCHAMPHILIPPINES.COM

COVER STORY

sector will impact inthe fourth quarter of the year and improve on the third quarter gross production of 1.11 trillion pesos-or add one to two percent to GDP.

Inflation, interest rates, private consumption, investments, and other macro fundamentals would not suddenly turn negative in the fourth quarter of 2016 to upset economic growth in 2017. In fact, private consumption would increase with increase in OFW remittances encouraged by favourable exchange rates with the weakening of the peso. Public investments in infrastructure are being sped up to grab the coattail of the remarkable 2016 GDP performance, if only for the Duterte administration to share in the credit deserved by the private sector.

Inflation averaged 1.6 percent in the first 10 months after remaining steady at 2.3 percent last October. Inflation averaged 2 percent in 2016.

Indeed, the Philippine economy has become the fastest growing economy in Asia due to massive private investments, strong consumer spending, and recovery in the agriculture sector. It is clear that credit cannot be given to the political leadership which recently aroused apprehension as a political risk among investors - both foreign and local - due to the radical statements of President Duterte declaring separation from the United States in pursuit of an “Independent foreign policy” which was the battle cry of the nationalist-leftist militants in the 1960’s, at the height of Cold War.

The authors of this State policy (this writer being one of them as delegate to the 1971 Constitutional Convention) included in Article II, Section 7 of the Philippine Constitution made the contemporaneous interpretation of this State policy to mean that the Philippines shall pursue a policy of amity and friendship with all nations in the conduct of diplomacy, trade, and investments without denigrating or alienatingany nation.

To recap, the first nine months of 2016 saw the economy grew by 7 percent due to growth in investments, recovery of the agriculture sector, industry growth of 8.6 percent in the third quarter with

expansion in manufacturing and construction and steady growth of utilities, continuing expansion in construction which grew by 16.2 percent in the third quarter while public construction expanded over 20 percent. Private consumption, the pillar of strength for the domestic economy, grew by 7.3 percent. The higher private consumption is supported by low inflation, low interest rates better labor market conditions and remittances of OFW’s. Exports grew to 7.8 percent.

The upgrade of the Philippines by international credit watchers was due to the strong 7.1 percent GDP growth in the third quarter. Export performance is actually better than expected and this is supported by aweakening peso during the third quarter. The higher forecast is due to the third quarter when growth was much higher than expectations.

Moving on to 2017The momentum of the economy in 2016 will

continue to impact the GDP growth in 2017. To continue the economic surge, the Duterte administration plans to spend eight trillion pesos to build new roads, bridges, railways, airports, and sea ports in the next six years. The National Economic Development Authority (NEDA) reportedly approved nine infrastructure projects followed by the approval of seven more infrastructure projects.

Mr. Duterte intends to use the 7 percent GDP of 2016 as a platform to launch what the administration envisions as the “Golden Age of Infrastructure”. This means massive pump-priming to boost the economy in 2017 and onwards.

DBM Secretary Benjamin Diokno reported that 40 Public-Private Partnerships (PPP), worth 1.14 trillion pesos, are already in the pipeline. These include huge projects like North-South Railways, worth 170.7 billion pesos, and Laguna Lake Shore Expressway Dike, worth 122.8 billion pesos. By the end of 2017, Diokno expects 17 PPP projects worth 580 billion pesos would have been rolled out.

NEDA Secretary Ernesto Pernia declared that the infrastructure projects will “move rapidly” in 2017 to accelerate the momentum of

growth of the economy. Meanwhile, the Standard Chartered Bank, in a moment of optimism, predicted that the Philippines will “grow faster than China which is gradually declining”.

The official target is to make the share of infrastructure to the gross domestic product at 7.2 percent level in the next six years. Monetary policy is expected to remain stable, especially in keeping the interest rates at a level supportive of the growth of the economy. Inflatinon may rise to around 3.4 percent but still within the range of the government target of 2 percent to 4 percent. Deficit spending and money supply will be calibrated to avoid any unintended consequence to inflation. So will be tax reforms.

There is enough money supply to finance the public investments planned by the administration. M3 money supply stands at 8.8 trillion pesos. The foreign exchange reserves coming from earnings of investments of the BSP in foreign banks abroad, and remittances of OFW’s and professionals, may add US $12 billion to the present US $85.7 billion international reserves. Interest rates likely to remain at an investment friendly level of 3 percent.

Monetary policy and fiscal policy can be expected to move in coordination, to make the economy surge forward to higher level of economic growth in 2017.

About the Author:

Lawyer-educator Emmanuel Tiu Santos, Ph.D, is Chairman-CEO of International Academy of Management and Economics (IAME) and Institute of Strategic

and International Studies based in Makati City, Philippines.

With sincere appreciation for this submission from AmCham Publications Committee.

Monetary policy and fiscal policy can be expected to move in coordination, to make the economy surge forward to higher level of economic growth in 2017.

Page 12: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

10 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

Santos. The Policy Brief tackles the real and potenti al benefi ts, and challenges facing the country’s broadband service and provides recommendati ons on how to address them. Six recommendati ons were developed through independent research with inputs from a roundtable discussion with key stakeholders. These include: adopti ng an open access model where segments of the internet infrastructure will be opened up to more and diff erent players both local and foreign; updati ng and upgrading laws and policies, which includes amendments to the Public Telecommunicati ons Policy Act and the enactment of the bill creati ng a Department of ICT1; levelling the playing fi eld by promoti ng open and neutral internet exchange points and encouraging infrastructure sharing; updati ng the country’s ICT strategy and plan, including the development of a nati onal broadband plan; improving spectrum management; and ensuring and protecti ng the competi ti veness of the telecommunicati ons industry.

Download the full version of the Broadband Policy Brief on the Arangkada Philippines website at www.arangkadaphilippines.com.

For inquiries, [email protected] or call +63-2-751-1495.

1 Signed by President Benigno S. Aquino III and enacted as Republic Act No. 10844 on May 23, 2016.

TAPP News

B

The Arangkada Philippines:Broadband Policy Brief

roadband internet access hasbeen widely considered asa tool that can help achievedevelopment and accelerateeconomic growth. During

megabits per second (Mbps) besti ng only India (Akamai, 2015). Furthermore, the country off ered the second most expensive retail internet service out of 62 countries ranked by Ookla during the fourth quarter of 2014.

Telecom and Informati on & Communicati ons Technology (ICT) infrastructure and services in the Philippines are mainly private-sector driven. PLDT and Globe are the country’s largest internet service providers that own and control most of the internet infrastructure. The incumbent operator, PLDT, and main competi tor, Globe, are the major providers of fi xed and mobile broadband services nati onwide. Thus, these dominant telcos have the capacity to dictate access, cost, and quality of internet and broadband service, both fi xed and mobile in the country.

Major challenges to a more effi cient broadband sector include the presence of barriers to entry, anti -competi ti ve practi ces, inadequate infrastructure, weak and ineff ecti ve regulati on, prohibiti ve bureaucrati c requirements in infrastructure build-out, and the lack of interconnecti on.

On February 24, 2016, The Arangkada Philippines Project released a Broadband Policy Brief, authored by industry expert Ms. Grace Mirandilla-

the 2015 APEC Summit, former trade secretary Gregory Domingo highlighted the need for the government in “globalizing” Micro, Small and Medium Enterprises (MSMEs) by helping them take advantage of cross border business opportuniti es. As the current business landscape become more complex and competi ti ve, reliable broadband connecti vity is an essenti al tool for businesses to improve their processes and at the same ti me expand their market reach and client-base making them part of a more inclusive economy.

In the Philippines, the internet is considered as a value-added service (VAS).

Internet usage was esti mated at 44 million out of the 100-million populati on either through subscripti on or shared access. However, the Philippines recorded the second slowest average download speed in the Asia-Pacifi c at a rate of 2.8

Broadband internet access is an essenti al tool for businesses to improve their processes and at the same ti me expand their market reach and client-base making them part of a more inclusive economy.

Broadband Policy Brief press launch. Photo: Rappler

Broadband Policy Brief poster.Photo: Arangkada Philippines

Page 13: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment
Page 14: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

12 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

Investment

What's driving Citi zenship-by-Investment for Asia's Elite

The majority of the world’s wealthy elite have traditi onally hailed from those parts of the world with advanced Western economies; most notably from

In Asia, the primary moti ve behind obtaining a second passport has been driven by the limited ‘travel-ability’ of the majority of Asia-domiciled passports. The biggest market being moti vated by the ability to achieve greater mobility is China, whose nati onals hold a passport that allows visa free access to just 50 countries around the world. Other key markets whose Nati onals have limited visa free access include Thailand (71), the Philippines (61), Indonesia (58), Vietnam (47) and Bangladesh (39)(2).

HNWIs in these countries therefore look to the CIPs in the Caribbean countries of Anti gua and Barbuda(3), Dominica, Grenada(4) and St. Kitt s and Nevis, amongst others, which provide wealthy foreign nati onals who invest into these countries with visa free access to up to 134 countries including those in the European Union (EU).

The CIPs in the Caribbean off er applicants the opportunity to become citi zens either by making a contributi on to a Nati onal Development Fund or by investi ng into an approved real estate project. The contributi on amount can range from US $100,000 to US $250,000, while the minimum real estate investment required ranges from US $200,000 to US $400,000 depending on the country of applicati on. There is also government due diligence - and processing fees in additi on to this. Processing ti mes vary per country but typically range from three to six months with limited to no physical presence required in the country either during the applicati on process or once citi zenship is obtained(5).

Beyond mobility and as more and more HNWI’s surface around the Asian region, their need to ensure fi nancial safety by protecti ng their personal assets and diversifying investments for themselves and their families conti nues to be another driving factor for the signifi cant demand for these CIPs.

Europe and North America. This trend, however, is shift ing east as Asia now mints more new high net worth- and ultra-high net worth individuals than any other part of the world.

At the end of 2015, there were 5.1 million high net worth individuals (HNWIs) in Asia Pacifi c with a combined wealth of US$17.4 trillion(1).

A growing trend amongst these wealthy individuals is the desire to obtain an alternati ve or second citi zenship. As demand drives supply, the number of Citi zenship-by-Investment Programs (CIPs) available to HNWIs and their families has steadily increased over the last few years and is expected to conti nue to do so.

In exchange for a signifi cant fi nancial contributi on or investment to the domesti c economy, CIPs off er the world’s wealthy elite with the opportunity to obtain citi zenship and in so doing, provide them with something that is less tangible and more desirable than any material object – the ability to transcend into a Global Citi zen with access to all the benefi ts which that aff ords.

There are a multi tude of reasons why wealthy people apply to these CIPs including personal security, tax planning and mobility.

The implementati on of the Common Reporti ng Standard (CRS) will require jurisdicti ons to obtain informati on from their fi nancial insti tuti ons and automati cally exchange that informati on with other jurisdicti ons on an annual basis beginning in 2017 or 2018. This has led to an increased focus on the security of informati on aspect that CIPs can off er.

Although one’s citi zenship does not directly impact the automati c exchange of informati on; the CRS is based on tax residency, therefore the European CIPs of Cyprus and Malta off er the highest amount of fl exibility to HNWIs, given that they are within the EU and therefore provide their citi zens with the same EU rights provided to all EU nati onals including legal, protecti on and sett lement rights throughout all 28 EU countries and Switzerland – eff ecti vely providing 29 EU-based tax residency opti ons and therefore much greater comfort in terms of the security and confi denti ality of informati on that will be shared.

Asia now mints more new high net worth- and ultra-high net worth individuals than any other part of the world.

Photo Source: www.pixabay.com

Submitted by Dominic Volek

1) Source: World Wealth Report 2016, Capgemini and RBC Wealth Management 2) Source: The Henley & Partners Visa Restricti ons Index 2016 3) Amongst the Caribbean programs, only citi zens of Anti gua and Barbuda enjoy visa-free access to Canada 4) Amongst the Caribbean programs, only citi zens of Grenada enjoy visa-free access to China 5) Only Anti gua and Barbuda requires new citi zens to visit the country for at least 5 days in the fi rst 5 years of obtaining citi zenship. The other Caribbean countries do not require any physical presence at any ti me. 6) Other investment opti ons include EURO 2 million into either a Cypriot Business, Alternati ve Investment Fund or Financial Assets of Cypriot enterprises or Cypriot organizati ons licensed by the SEC – in the case of any of these opti ons or a combinati on thereof, the applicant must own a permanent private residence in Cyprus of at least €500,000.

Page 15: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

greater emphasis on physical safety and security moti vati ng HNWIs to explore CIPs in order to have a safe haven to move to should local conditi ons deteriorate further.

The surge in interest in CIPs from Asian-based HNWIs refl ects a combinati on of the growing wealth in these emerging markets, as well as the evolving moti vati ons for HNWIs to further enhance their ability to become Global Citi zens.

Regardless of a HNWIs moti vati on for applying for a second passport, other important points to consider include geographic locati on, language, banking and business environment as well as the reputati on of the country and the passport itself. The most important criterion is that the citi zenship be acquired in accordance with the consti tuti on and laws of the issuing country.

One needs to be aware that in recent years these CIPs have att racted all sorts of companies, agents, real estate developers and others who have been att racted by the success of these CIPs. Unfortunately, not all of these companies apply best business practi ce and therefore extreme care must be exercised when selecti ng a company or choosing to buy real estate under one of the CIPs.

INVESTMENT

Submitted by Dominic Volek

Shares 7 Useful Tips to Protect Your Finances!Here are a few seemingly simple protecti ve ti ps from Citi – but oft en serious consequences arise when they are forgott en or ignored.

• Regularly update your personal details. Provide your latest and valid personal details to the bank to ensure correct correspondence. Be sure to update your email address and mobile number to be noti fi ed of transacti ons that you did not make. This way you can call Citi Phone to report it immediately.

• Keep all your bank-related documents secure. Aft er reading all your documents, keep them in a safe and secure place.

• Never sign on blank forms. Completely fi ll out and review fi elds in any transacti onal document, (e.g. check) and strike off any blank spaces to remove any room for alterati on.

• Check your monthly statements and recent transacti ons regularly. Should you fi nd any discrepancies, please call Citi Phone® at +63 2 995 9999+63 2 995 9999.

• NEVER SURRENDER YOUR CARD, PIN OR mobile SIM cards. For your card protecti on, never give your Credit, Debit or ATM Card, PIN, One-Time PIN/Password, mobile SIM card or even online username account to anyone.

Remember, Citi ® will not ask for these for any reason, even as part of promoti ons, card upgrades or replacements. Surrendering any of these will lead to fraudsters using your account. Please note that the cardholder is liable for charges made on the card unti l the incident is reported to Citi Phone.

• Safeguard your PINs. Do not share your ATM PINs, username, password or other authenti cati on credenti als such as your One-Time PIN (OTP) to anyone EVEN IF they claim to be a staff member of Citi ® or an offi cer of a regulatory body.

• Set up account alerts. Register for Citi Alerts® to receive email or SMS noti fi cati ons on account acti viti es such as bank account balances, large purchases, or withdrawals. This allows early detecti on of suspicious acti viti es.

Here are a few seemingly simple protecti ve ti ps from Citi – but oft en serious consequences arise when they are forgott en or ignored.

COMPANY NEWS

JANUARY 2017 AMCHAM BUSINESS JOURNAL 13 AMCHAMPHILIPPINES.COM

The passports of Cyprus and Malta are also very strong from a travel-ability perspecti ve, off ering access to 159 and 168 countries respecti vely. For a minimum investment of €2 million in real estate(6), one can become a citi zen of Cyprus in just three months and have access to all the benefi ts that Cypriot citi zenship has to off er. An applicati on for Maltese citi zenship will require a capital outlay of a minimum €880,000 for a single applicant, which primarily consists of a donati on to the Malta government but does also include a government bond purchase of €150,000 and real estate requirement to either purchase or lease a property. This minimum amount for Malta assumes the property lease opti on and will increase incrementally as a spouse and dependents are included in the applicati on. Processing ti me to obtain a Maltese passport is approximately 14 months.

Beyond the desire for easier travel and fi nancial safety, the deteriorati ng geopoliti cal climate and recent terror att acks around the world has seen a

In a move to improve public understanding of the issues faced by both clients and governments in the industry, and to promote educati on and high professional standards, the Investment Migrati on Council (IMC) was founded in October 2014 as a worldwide associati on for Investor Migrati on and Citi zenship-by-Investment. The IMC brings together the leading stakeholders in the fi eld and gives the industry a voice.

Any HNWIs interested in pursuing a CIP should therefore look to engage reputable companies with a solid track record that are members of the IMC to ensure a successful outcome.

Submitt ed by:Dominic Volek, Managing Partner Henley & Partners, Head South East Asia

For more informati on his contacts are as follows:Email [email protected] Telephone +65 6438 7117 Internet www.henleyglobal.com

Page 16: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

14 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

AmCham Roundup

AmCham-Cebu Celebrates Thanksgiving Dinner

FINANCIAL SERVICES AND TAXES & TARIFFS COMMITTEE MEETING

Tax Updates

L-R: President Jeff Minnick, VP-External Glenn Loop, VP-Internal Zaide Zafra, Corp. Secretary Ed Tongco, Director Danny R. Deen, ACCP Exec. Dir. Ebb Hinchliff e, Director Julie Najar, Hon. Raci Franco, Treasurer Santhana Vaidiswaran, Director Francis Monera, Director Alice W. Fernandez, Director Roger Q. Lim, and Director Jose Jake Marques.

Past Director Wilson Ng, with the Junior Troubadours and Gabb Balantucas receiving special citati ons for their musical performances from Amcham-Cebu President Jeff Minnick.

L-R: VP-Ext. Glenn Loop, Honey Loop, US Consular Offi cer Griffi n LeNoir, Jun Dizon of Arthaland Corp. (event sponsor), Leah

Mudiyanselage and guest from Kandaya Resort (event sponsor), Lucille Colina of Astrofoil Phils., Pres. Jeff Minnick, VP Zaide Zafra

Hon. Raci Franco, Cebu Provincial Board Member with ACCP Exec. Director Ebb

Hinchliff e

Att y. Rubina Bundoc-Aquino of SGV was the guest speaker of the Financial Services and Taxes and Tariff s committ ee meeti ng held last November 24, 2016 at the AmCham Hall.

Att y. Aquino’s talk revolved around diff erent tax updates in the Philippines. The fi rst part of her discussion was about the Key Priority Programs of the Bureau of Internal Revenue (BIR), which include: improvement of tax payer sati sfacti on; protecti on of revenues and recapture of public trust; att ainment of collecti on targets; and adopti ng of an expanded compromise sett lement program. Aft er discussing this, she then talked about the updates on Income Tax and Withholding Tax and gave examples of diff erent cases in the BIR and Commission of Internal Revenue (CIR) to support her presentati on. Furthermore, she also introduced Republic Act No. 10808 – Tax Incenti ves Management and Transparency Act (TIMTA).

Att y. Aquino then discussed the updates on Internati onal Tax focusing on Tax Treaty Relief Permanent Establishment. She also talked about updates on Value Added Tax (VAT) by introducing issue-based audits as part of the VAT Audit Program by presenti ng the requirements for VAT Refund and by citi ng diff erent cases related to this subject. The last part of her presentati on was about Taxpayer’s Rights and Remedies.

Christi na Winton andAtt y. Rubina Aquino

Exec. Director Ebb Hinchliff e,Att y. Rubina Bundoc-Aquino, Att y. Jules Riego

Report of Migs Calaguian, Coordinator

14 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

At its annual Thanksgiving Dinner, Amcham-Cebu inducted its new set of Offi cers for FY 2016-2017 and awarded the generous sponsors of the Phil-Am Friendship Celebrati on held earlier in the year, on July 02, 2016.

Special citati ons were also given to the Junior Troubadours and the young violinist, Gabb Balantucas, under the mentorship of past Director Wilson Ng. These musical arti sts never failed to share their musical talents in various performances for the Cebu Chapter.

The new offi cers were inducted into offi ce by Hon. Horacio "Raci" V. Franco, Provincial Board Member from the 4th District of Cebu, who delivered the Thanksgiving Message of the Provincial Governor, Hilario Davide III.

Page 17: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment
Page 18: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

Feature

16 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

HUMAN CAPITAL AND RESOURCES COMMITTEE MEETING

Beware of the “End Contractualizati on” Batt le Cry – this is one of the chapter ti tles of Dr. Vicente Paqueo’s book enti tled “Unintended Consequences: The Folly of Uncriti cal Thinking”. He was invited by the Human Capital and Resources committ ee to talk about “The Eff ects of Ending Temporary Employment Contracts” at the committ ee's meeti ng on November 23, 2016.

His thought-provoking presentati on enti tled “On the Curtailment and Prohibiti on of Temporary Employment Contracts in the Context of Labor Market Challenges”, Dr. Paqueo highlighted trends in key economic and labor outcome indicators. Then, he made an analysis on the new regulatory idea of the Duterte Administrati on on “contractualizati on” and “Endo” and its demonizati on in the present ti me.

Dr. Paqueo suggested alternati ve ideas for developing a new labor reform agenda that will encourage inclusive sustainable economic growth, together with his conclusions and recommendati ons.

The Eff ects of Ending Temporary Employment Contracts

INFRASTRUCTURE AND LOGISTICS COMMITTEE MEETING

A Safer NAIA:

AMCHAM ROUNDUP

Dr. Vicente Paqueo

Mr. Ernie Cecilia andDr. Vicente Paqueo

Mr. Ernie Cecilia, Dr. Vicente Paqueo,Yves Aguilos

Mr. Michael Mapanao, Mr. Enrico Salita, Engr. Arnold Balucati ng, Mr. Jaime Fausti no, Exec. Dir. Ebb Hinchliff e

Mr. John Forbes Mr. Richard McGonegal

On November 22, 2016, three speakers talked about the New Communicati ons Navigati on Surveillance/Air Traffi c Management (CNS/ATM) Systems Development Project. The fi rst speaker, Engr. Arnold Balucati ng, gave a brief of the project and its status. The CNS/ATM Project's Objecti ve is to develop a dynamic and integrated CNS/ATM System using satellite technology to enhance safety, reliability and effi ciency of air traffi c service in the Philippine airspace through - a) the establishment of priority elements of new satellite-based CNS/ATM systems in accordance with the ICAO GANP for CNS/ATM Systems; and b) the replacement of aging vital communicati ons, surveillance and air traffi c control equipment at selected airports/sites nati onwide.

The second and third speakers, Mr. Michael Mapanao and Mr. Enrico Salita, focused more on the technical side of the project. They talked about how it works and how the system aff ects current air traffi c.

An open forum moderated by Jaime Fausti no, chairman of the Infrastructure and Logisti cs Committ ee, capped the event.

16 AMCHAM BUSINESS JOURNAL JANUARY 2017

The New Communicati ons Navigati on Surveillance/Air Traffi c Management Systems Development Project

Report of Yves Aguilos, Coordinator

Report of Migs Calaguian, Coordinator

AMCHAMPHILIPPINES.COM

Page 19: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment
Page 20: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

Feature

18 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

AMCHAM ROUNDUP

The Informati on, Communicati ons & Technology Christmas Party

18 AMCHAM BUSINESS JOURNAL JANUARY 2017

The annual Christmas get-together of the Informati on, Communicati ons & Technology Committ ee (ICT) proved to be an exciti ng day for its members who att ended the event on December 02 2016, Friday, at the Oakwood Premier. ICT Chairman Don Felbaum with Co-Chair Frank Holz hosted the program, giving away raffl e prizes and giveaways all throughout the program.

The att endees enjoyed a day full of good wine and food, as well as a refreshing chat with one another. The ICT Committ ee thanked the sponsors: Globe Business, for being the Plati num Sponsor; DSM Manila LLC, for being the Gold Sponsor; Hewlett -Packard and Magenic Manila, for being the Silver Sponsors for this event.

The ICT Committ ee also expressed appreciati on to the raffl e sponsors: Eastern Communicati ons, RCG, Megaworld, Oakwood and Optel, as well as all the att endees who brought their own share of raffl e prizes to be raffl ed off .

Report of Trixia Bravo, Coordinator

Page 21: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

Feature

JANUARY 2017 AMCHAM BUSINESS JOURNAL 19 AMCHAMPHILIPPINES.COM

AMCHAM ROUNDUP

INFORMATION, COMMUNICATIONS & TECHNOLOGY COMMITTEE MEETING

Winning the Talent War in 2017

JANUARY 2017 AMCHAM BUSINESS JOURNAL 19

AmCham members and non-members parti cipated in the Informati on and Communicati ons Committ ee meeti ng of the American Chamber of Commerce of the Philippines at the AmCham Hall on November 29, 2016.

Guest speaker, Mr. Frank Koo, Head of Southeast Asia, LinkedIn briefed the att endees on how businesses can prepare for the future and meet their goals and objecti ves. He also discussed how businesses can leverage on data to build a stronger recruitment and employer branding strategy and hire the best people. Aft er his presentati on, a Q&A session followed.

The committ ee and its Chairmen, Don Felbaum, Frank Holz and Ebb Hinchliff e thanked LinkedIn for generously sponsoring the event.

Mr. Frank Koo

Mr. Frank Koo, Mr. Don Felbaum, Ms. Lorraine Gonzales

Report of Trixia Bravo, Coordinator

AMCHAMPHILIPPINES.COM

Page 22: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

Feature

20 AMCHAM BUSINESS JOURNAL JANUARY 2017

AMCHAM ROUNDUP

GOVERNMENT AFFAIRS

In pursuit of revival of the Philippine manufacturing industry, the Department of Trade and Industry (DTI) and the Board of Investments (BOI), in partnership with United States Assistance for Development (USAID) and the Japan for Internati onal Cooperati on Agency (JICA), brought together partners and stakeholders at the DTI Manufacturing Summit 2016 on November 28-29, 2016 at Makati Shangri-La, Manila.

With the Department’s theme “Trabaho at Negosyo” (Job and Business), the Summit targeted to monitor the implementati on of the country’s new industrial policies, with formulati on of policy directi ons covering seven major themes: Competi ti ve and Innovati ve Industries; Labor, Human Resource Development, and Skills Training; Physical Infrastructure; Ease of Doing Business; SME Development and Inclusive Business; Incenti ves and other Government Support Measures; and Internati onal Trade Policy and Free Trade Agreements, and programs of the administrati on (covering trade, investment, and MSME development) to pursue industrializati on that will create quality jobs and reduce poverty towards shared prosperity for all.

Prior to the Summit, a number of pre-summit meeti ngs were conducted for each breakout session group to discuss the issues and concerns about the manufacturing industry. The results of these meeti ngs were discussed and were then subjected to the plenary’s considerati on for prioriti zati on of measures. The results were later presented to the high level offi cials of government agencies concered during their dialogue with Summit parti cipants.

Speakers and parti cipants in the summit included key offi cials from the government, industry associati ons/business chambers, and other stakeholders (academic/research community, donor agencies) coming from all over the country. AmCham’s committ ee chairmen like Mr. Bobby Batungbacal (Manufacturing) became one of the panelists, and Mr. Ernie Cecilia (Human Capital and Resources) led the breakout session on Labor, Human Resource Development, and Skills Training. Other AmCham chairmen who were present during the event were Mr. John Forbes, Mr. Jules Riego, and Executi ve Director Mr. Ebb Hinchliff e.

Manufacturing Summit 2016

Dr. Vicente Paqueo

20 AMCHAM BUSINESS JOURNAL JANUARY 2017

Report of Yves Aguilos, Coordinator

AMCHAMPHILIPPINES.COM

Page 23: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

Feature

JANUARY 2017 AMCHAM BUSINESS JOURNAL 21 AMCHAMPHILIPPINES.COM

Page 24: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

AMCHAM ROUNDUP

22 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

The Professional Women of AmCham "White Christmas" Cocktail Party

This year's annual Christmas gathering of the Professional Women of AmCham was celebrated with surprises and gift s on December 01, 2016 at The Dusit Thani Hotel Manila.

In additi on to the networking and cocktails, the Committ ee also had special guests, Ms. Diane Jones, the Senior Commercial Offi cer of the U.S. Embassy Manila, and Ms. Marisyll Pengson, Personal Development Consultant from John Robert Powers, who gave a short talk on Executi ve and Personal Branding. To cap the night off , raffl e prizes were given away. The event gathered over 40 members and guests.

AmCham Philippines would like to thank our generous sponsors: Delta Airlines, Procter & Gamble, Amway Philippines, B Hotel Quezon City, Marriott Manila, Dusit Thani Manila, Microtel by Wyndham, John Robert Powers, Sanofi and ECOMM Global Technologies.

Report of Alyssa Dispo, Coordinator

Page 25: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

AMCHAM ROUNDUP

It was a fun-fi lled Annual General Membership Christmas Bash on December 07, 2016 at the Dusit Thani Hotel Manila. The venue was set up as Santa's Christmas Village. AmCham kicked off the event with wine, cocktails and canapés while guests were serenaded by live entertainment throughout the evening as they networked with business peers. The guests were thrilled to receive exciti ng gift s and raffl e prizes. The winners ti ckets were drawn by Mr. Ebb Hinchliff e, AmCham Executi ve Director, and Mr. Roland Dela Cruz, AmCham Membership Chairman.

Annual General Membership Christmas Bash

To spice up the evening, special guests from the Barangay Ginebra San Miguel Team, Joe De Vance, Chris Ellis and Japeth Aguilar, att ended, extending warm Christmas greeti ngs to the group and also joined the raffl e draw. Over 90 AmCham members and guests att ended this event.

AmCham would like to express our sincerest thanks to our event partners: BDO, Coca-Cola FEMSA and PMFTC, Inc.

We would also like to thank our sponsors and donors: United Airlines, Bayview Park Hotel Manila, Forth & Tay, Ginebra San Miguel, Dusit Thani Manila, Kyani Philippines, Marriott Manila, Diamond Hotel, The Oriental Hotels & Resorts, PowerSteel, RGF Executi ve Search, The Manor At Camp John Hay, VMV Hypoallergenics and AGS Four Winds.

Report of Alyssa Dispo, Coordinator

JANUARY 2017 AMCHAM BUSINESS JOURNAL 23 AMCHAMPHILIPPINES.COM

Page 26: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

24 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

AmCham Foundation News

"NIGHT AT THE RACES"FOR THE BENEFIT OF AMCHAM FOUNDATION EDUCATION PROGRAMS

ore than two hundred people att ended the celebrati on of the Chamber’ Foundati on FUN fund-raiser “Night at the

Races” on November 11, 2016 at the New World Hotel.

A race to educati onal freedomThis was the third annual celebrati on

of this exciti ng evening – the proceeds of which go to the Amcham Foundati on Scholarship Program, which provides worthy students with full tuiti on fee and other educati onal support.

Each year this event proves to be more successful than the last; with att endees experiencing something new, exciti ng and unique every ti me. It is

not only the thrill of betti ng on a horse, it is the knowledge that one’s acti ons are contributi ng to the health and mental welfare of underprivileged children in the country.

The American Chamber Foundati on has always been passionate about improving society by focusing on our youth – parti cularly with how they are educated. There are many factors that contribute to the wealth of a nati on, but it can be argued that a large part of it can be att ributed with the level of educati on each citi zen is given access to.

Come on, Dobber! Cheering cries ring out!!

The ti ckets sold this year were unique because att endees were betti ng on a horse in a previously-run race, although (per the mechanics of the game) the winner is not known to the ti cket holder. In the event there were a total of eight numbered horse

Mr. Edwin Feist AmCham Foundati on President

It is not only the thrill of betti ng on a horse, it is the knowledge that one’s acti ons are contributi ng to the health and mental welfare of underprivileged children in the country.

M

races shown throughout the evening.Guests were invited to go to the betti ng

booth to place their bets on whichever horse they think was most likely to win in a given race. The bett or could place bets on as many horses, and as many ti mes as they liked. Each race was diff erent.

When all bets were placed, and the running of the races were shown and at the end winner was displayed. Winning att endees/bett ors then collected their prize at the Cashier’s booth. If there was more than one winner, all winners were called on stage for a draw to win a fabulous prize. Guests were also encouraged to use their AmCham script money to purchase items from the Silent Aucti on.

The US Charge d' Aff aires Mr. Michael Klecheski, joined in the fun – greeti ng guests and formally thanking them for their support of the American Chamber Foundati on. Our thanks to Mr. Chuckie Rivera of Quezon Power, a member of the AmCham Foundati on Board of Trustees, who was the barker and helped to make the whole night lively and exciti ng.

As added entertainment, several magicians walked around and mingling with the guests during the evening – getti ng everyone wondering as usual, How DO they DO that!? The dancer group “Red Ladies” added more fun to the evening when they made the guests stands in their chairs and dance in the tune of “New York! New York!” and “Moulin Rouge”.

No one was in a hurry to leave – too much excitement over the races! Also, they stayed on with the hopes of winning the much coveted Grand Raffl e prize of the evening --- a Round Trip ti cket in any point in the US - courtesy of Delta Air Lines! Mr. Paul Fullbright, from Cargil, won this most coveted grand raffl e prize.

The Foundati on is indebted to the following individuals and companies who made the evening a huge success:

• Plati num Sponsors – Amway Phils., Quezon Power, PMFTC Inc. and Time Depot

• Gold Sponsors – Delta Air Lines, Inc. • Silver Sponsors – Ford Philippines, Fluor, Microtel Inns and Suites, SGV & Co., Fastwin and The Zen Insti tute

• Wine Sponsors – Forth and Tay• Beer Sponsors – Asia Brewery• Functi on Sponsors – 128 Dream Fountain, Asian Tiger Lane Moving, Bluewater Resort Panglao, Cargill Philippines, Coca-Cola, C'SCOR Global Intertrade Corp., Edsa Shangri-la, HMR Phils., Fridays Boracay, HCWS Scuba

Page 27: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

FINANCIAL SERVICES & TAXES AND TARIFFS COMMITTEE MEETING

Feature

JANUARY 2017 AMCHAM BUSINESS JOURNAL 25 AMCHAMPHILIPPINES.COM

Call us and we’ll show you how+632 451 8243 (Metro Manila) | 180014410874(Cebu, Clark, Davao) regus.com.ph

We can help with that

We'll give you complete flexibility with office space by the day, month or as many years as you need. It’s easy to set up and we can get your clients started today.

Don’t want to commit to a long office lease?

Download the app and get started

Page 28: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

26 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

AMCHAM FOUNDATION NEWS

Guests enjoying the race

Guests betti ng

Mr. and Mrs. Klecheski andMr. and Mrs.Hinchliff e

The Bosses

Charge D' Aff aires Michael Klecheski

Dive, Island Cove& Leisure Park,New WorldMakati Hotel, Raffl es& Fairmont Makati ,Procter & Gamble,VMVHypoallergenics andThe Manor Baguioand Country Club.

One of the comments of those who att ended was: “I am glad I

Horse Owner Winner receive a prize

Mr. Paul Bright of Cargill Philippines grand raffl e winner

"It's not working. Let me check under the hood."KIDS PLAYING MAKE BELIEVE

Photo by: Dr. Miguel Luiz "Miggy" B. Guillermo

Miguel Luiz Guillermo

Photo Submission of the MonthPhoto Submission of the MonthPhoto Submission of the Month

26 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

brought my friends with me to att end this aff air. It has been an exciti ng evening for all of us.”

Jockeying for supportThe AmCham Foundati on is

excited about next year’s event, along with its other fundraising acti viti es, such as the ScholaRUN and the ChariteeGolf Tournament. However, the Foundati on does not seek to build its philanthropic arm on its own; it believes that the full impact is made when various

sectors of society work together - towards the same advocacy. In this case, it is truly the building of the youth sector and seeking to support them by providing means for them to learn and grow.

Our thanks to everyone – on behalf of our benefi ciaries!

Page 29: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment
Page 30: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

28 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

AmCham RoundupOSAC COMMITTEE INPUT

issue for all companies.

A data breach today may signifi cantly aff ect both the company and their customers. A loss of corporate data, which could include contracts, supplier details, plans, designs or formula, may seriously damage the company’s business and reputati on. If customer data is also stolen it also may violate data privacy laws, which could lead to fi nes or business suspension. It usually also aff ect the stock price.

What does this mean for the board of a publicly listed company in the Philippines?

Most large corporati ons have an audit and/or compliance committ ee, which today should include someone who is responsible for data security and privacy, but do they really have the knowledge to discharge this duty?

One of the most damaging cyber att acks on a commercial enterprise in recent years was that aimed at Target Stores in the US. The board thought the company was secure and in compliance with industry security standards, such as PCI DSS to protect their customers credit card informati on. 40 million stolen card records later, the CTO, COO and CEO were out of a job and half the board faced dismissal. Investors claimed they failed to protect the company; the board members were able to convince shareholders to re-elect them, but clearly there will not be a ‘next ti me’.

This event (and many similar) led US Senators Reed and Collins to introduce the Cybersecurity Disclosure Act of 2015 (Series 2410), which addresses the cyber security experti se, or to be more precise the lack thereof, on corporate boards.

he above words are not what the President, CEO - or the board - of any corporati on wants to hear; cybersecurity is now a centre- front “C suite”

"Mr. President ̶ Sir, we have a cybersecurity problem..."by Michael Mudd

The Act (secti on 2410) describes in detail what cybersecurity steps should be taken for nominees to the board, together with standards as to competence. This adds to the Cybersecurity Act of 2015 and will apply to every publicly listed company in the US. The US Securiti es and Exchange Commission (SEC) will issue rules within one year of enactment, which may be as early as 2017.

What has this got to do with the Philippines or indeed any company outside the US?

It’s the global supply chain. The Target breach was via a supplier that was connected to their data centre that - because of their inadequate controls - accidentally allowed malware to enter the Target data centre, which in turn allowed the credit card details to be accede by a criminal gang based in Eastern Europe. Poor internal security controls, outdated or unsuitable for purpose hardware and policy compounded the problem and enabled the criminals to roam around various databases and extract credit card informati on for fraudulent use.

US-listed companies may soon be asking their suppliers in the Philippines and elsewhere to be in compliance with S.2410 when it is passed or they will not do business with you.

The reality is that in many organizati ons there are combinati ons of weak internal security controls and poor training of staff that handle data [which is just about everyone] which in turn provides an entry point for criminals. To combat this, the company board must ensure there are procedures in place to have an emergency response team ready.

T

Today nearly everyone uses some form of social media or applicati ons that allow access to a myriad of programs, usually on a mobile device, linked back to an owned or shared data centre or an outside service provider. These are all vectors that have been used in various ways to penetrate corporate networks and their data centres.

So what is a board to do to miti gate this growing risk?

Areas to address go beyond just the technology used or how it is purchased and a check list may be summarized as below:

» Clear allocati on of responsibiliti es fortechnology risk.

» Think BASIC℠ - Be Aware Security IsCompromised.

» Create - and enforce - a Cyber SecurityGovernance Program, includingemergency response procedures.

» Work with your suppliers to Identi fyrisk factors in the supply chain,including any outsourcing contracts.

» Create and implement a cyberawareness program with trainingand testi ng for any employee thattouches data - then conti nue tomeasure and monitor it.

» Monitor legal changes wherever you

Photo Source: www.google.com

Page 31: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

Feature

JANUARY 2017 AMCHAM BUSINESS JOURNAL 29 AMCHAMPHILIPPINES.COM

do business with respect to datagovernance.

» Monitor changes in technology viaupdates from external experts.

The Philippines has now enacted the Data Privacy Act or Republic Act 10173 (Series 2012), on data protection and the Commissioners were appointed earlier this year. There is fairly wide latitude given to the interpretation of what is personal and sensitive data and that the National Privacy Commission is the ultimate arbiter of the Act. The implementing rules and regulations were released on July 27 2016.

What is clear is that a data classification policy is crucial to ensure smooth working of the Act.

There are severe penalties for non-compliance, so a board has a fiduciary duty and needs to ensure that shareholders are protected, no matter what technology they are using or how it is purchased or consumed.

In conclusion, corporations in the Philippines need to put in place robust data security policies that will enable trust to be engendered with their customers, suppliers and employees.

Technology is creating innovations that will continue to penetrate every aspect of life, just as the Internet has - but with far more

JANUARY 2017 AMCHAM BUSINESS JOURNAL 29

AMCHAM ROUNDUP - OSAC COMMITTEE INPUT

security and privacy controls required - of which a board needs to be aware.

© 2016 APP Ltd. BASIC℠:‘Be Aware Security Is Compromised’, is a service mark of APP Ltd.

About the writer:

Michael Mudd is the Managing Partner of Asia Policy Partners, strategy consultants in high technology policy and data security for trade related business.

He is a senior adviser to OSAC Hong Kong and a long time committee member of Amcham Hong Kong, as well as a former Member of Amcham Philippines, where he has close family contacts.

He is an appointed expert to JTC-1 of the ISO and the Government of Hong Kong’s Expert Group on Cloud Computing, specifically the Working Group on Cloud Security and Privacy.

He may be reached at [email protected]

Our thanks to Mr. Mudd for this contribution.

LTA Building, 7/F118 Perea StreetMakati City 1229, Metro ManilaPhilippinesTel: (63-2) 890-3090Fax: (63-2) 552-7507Email: [email protected]

Page 32: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

30 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

Why Reorgs Fail. A McKinsey survey of 1,800 executives identified the most common pitfalls for reorganizations (in order of frequency).

1. Employees actively resist the changes.2. Insufficient resources – people, time, money – are devoted to the effort.3. Employees are distracted from their day-to-day activities, and individual productivity declines.4. Leaders actively resist the changes.5. The org chart changes, but the way people work stays the same.6. Employees leave because of the reorg.7. Unplanned activities, such as an unforeseen need to change IT systems or communicate the changes in multiple languages, disrupt the implementation.Source: Harvard Business Review, November 2016, A Practical

Guide to a Misunderstood – and Often Mismanaged – Process, by Stephen Heidari-Robinson and Suzanne Heywood

Quick Winning Quotes Series for the Busy Executives

Today, executives are barraged with just too much information – tons of books, newspapers, magazines, trade journals, professional newsletters, websites, social media portals and more. It’s impossible to have the time to read these all; and who would even want to, besides. A lot of it is not relevant, in any case, depending on the executive’s key role or industry. Yet, there

must be a lot of “gems” or pieces of wisdom even in one-liners, breakthrough ideas, or stunning insights, from all those that warrant some attention, even reflection, by the typically harried executive. Along this line, we have singled out certain quotes and excerpts from various sources and are showing them here below in random for our members’ general interest.

The long march to the boss’s office to get evaluated – it’s a moment we all dread. Performance reviews are awkward. They're biased. They stick us in boxes and leave us waiting far too long for feedback. It’s no surprise that by the end of 2015, at least 30 of the Fortune 500 companies had ditched performance evaluations altogether. But let’s not throw the baby out with the bathwater.

The reality is, even when companies get rid of performance evaluations, ratings still exist. Employees just can’t see them. Ratings are done subjectively, behind the scenes, and without input from the people being evaluated.

Performance is the value of employees’ contributions to the organization over time. And that value needs to be assessed in some way. Decisions about pay and promotions have to be made. As researchers pointed outin a recent debate in Industrial and Organizational Psychology, “Performance is always rated in some manner.” If you don’t have formal evaluations, the ratings will be hidden in a black box.

The Trend. Because performance evaluations are often biased and their annual cycles leave employees waiting too long for feedback, many companies are dropping these reviews.

The Problem. But getting rid of evaluations doesn’t eradicate bias, since managers still rate people subjectively, without formal input. And it doesn’t ensure that employees will receive feedback when it’s most useful.

Another Perspective. Companies needn’t throw out reviews altogether. They can still reap the benefits – fairness, transparency, and development -- while managing the costs.

At Facebook we analyzed our performance management system a few years ago. We conducted focus groups and a follow survey with more than 300 people. The feedback was clear: 87% of people wanted to keep performance ratings.

Source: Harvard Business Review, November 2016, Let's Not KillPerformance Evaluations Yet, by Lori Goler, Janelle Gale, and Adam Grant

Let's Not Kill Performance Evaluations Yet

Chances are you've experienced at least one and possibly several company reorganizations. Reorgs can be a great way to unlock value: Two-thirds of them deliver at least some performance improvement, and with change in the business environment accelerating, they are becoming more and more common. As John Ferraro, the former COO of Ernst & Young, told us, “Every company today is being disrupted and so must frequently reorganize to keep us with the incredible pace of change. Those that can do this well will thrive in the current environment and be tomorrow’s winners.”

At the same time, few reorgs are entirely successful. According to a McKinsey survey we conducted, more than 80% fail to deliver the hopedfor value in the time planned, and 10% cause real damage to the company. More important, they can be damned miserable experiences for employees. Research suggests that reorgs – and the uncertainty they provide the future – can cause greater stress and anxiety than lay-offs, leading in about 60% of cases to noticeably reduced productivity. In our experience, this occurs because the leaders or reorgs don’t specify their objectives clearly enough, miss some of the key actions (for example, forgetting processes and people in their focus on reporting lines), or do things in the wrong order (such as choosing the way forward before assessing the strengths and weaknesses of what they already have). Yet the pitfalls they succumb to are common and entirely predictable.

Getting "Reorgs" Right

Imagine a brand manager sitting in his office developing a marketing strategy for his company’s new sports drink. He identifies which broad market segments to target, setsprices and promotions,

and plans mass media communications. The brand’s performance will be measured by aggregate sales and profitability, and his pay and future prospects will hinge on those numbers.

What’s wrong with this picture? This firm – like too many – is still managed as if it were stuck in the 1960s, an era of mass markets, mass media, and impersonal transactions. Yet never before have companies had such powerful technologies for interacting directly

with customers, collecting and mining information about them, and tailoring their offerings accordingly. And never before have customers expected to interact so deeply with companies, and each other, to shape the products and services they use. To be sure, most companies use customer relationship management and other technologies to get a handle on customers, but no amount of technology can really improve the situation as long as companies are set up to market products rather than cultivate customers. To compete in this aggressively interactive environment, companies must shift their focus from driving transactions to maximizing customer lifetime value. That means making products and brands subservient to long-term customer relationships. And that means changing strategy and structure across the organization – and reinventing the marketing department altogether.

Idea in Brief. Companies have powerful technologies for understanding and interacting with customers, yet most still depend on mass media marketing to drive impersonal transactions. To compete, companies must shift from pushing individual products to building long-term customer relationships.

The marketing department must be reinvented as a “customer department” that replaces the CMO with a chief customer officer, makes product and brand managers subservient to customer managers, and overseas customer-focused functions including R&D, customer service, market research, and CRM.

These changes shift the firm’s focus from product profitability to customer profitability, as measured by metrics such as customer lifetime value and customer equity. This organizational transformation will uproot entrenched interests and so must be driven from the top.

Source: Harvard Business Review, January-February 2010, Rethinking Marketing, by Roland T. Rust, Christine Moorman, and Gaurav Bhalla

Rethinking Marketing

Collated by: M. R. Guillermo, Publication Committee, AmCham Buisness Journal30 AMCHAM BUSINESS JOURNAL JANUARY 2017

Quick Winning Quotes

Page 33: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

FINANCIAL SERVICES & TAXES AND TARIFFS COMMITTEE MEETING

Feature

JANUARY 2017 AMCHAM BUSINESS JOURNAL 31 AMCHAMPHILIPPINES.COM

Page 34: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

Feature

32 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

The advent and continued development of the internet have changed the world. The time has come when the internet is now an indispensable aspect of living. Information is now processed, transferred, and communicated easily and with unprecedented speed. These new capabilities have improved, among others, social interactions, business communications, innovation, and education. Unfortunately, these improvements have also created new crimes and new methods of committing existing crimes, such as intellectual property infringement.

sharing of copyright material through the use of peer-to-peer computer networks.2

Despite the dangerous and damaging nature of online piracy, people do not perceive it as they would ordinary theft because of the former's seemingly innocuous nature.3 The common belief is that there cannot be much harm done by taking possession of an individual item, e.g. an individual software or video file, particularly because the actual amount stolen may be miniscule.4 In actuality however, when these individual miniscule amounts are added together, the figures are quite staggering.5

How is Online Piracy Affecting Intellectual Property Owners?

The effects of online piracy can be succinctly described in a word: debilitating.

There exists a burgeoning academic movement espousing the view that online piracy does not have a significant negative effect on content creators. This view, however, has been debunked several times over.7 The plain truth of the matter is that a great number of internet thieves are stealing the property of content creators.

What is online piracy, how is it affecting intellectual property rights, and what is there to be done?

What is Online Piracy?It is intellectual property theft

adapted to the modern information age. The Philippine Electronic Commerce Act of 2000 defines "piracy" as the "unauthorized copying, reproduction, dissemination, or distribution, importation, use, removal, alteration, substitution, modification, storage, uploading, downloading, communication, making available to the public, or broadcasting of protected material, electronic signature or copyrighted works including legally protected sound recordings or phonograms or information material on protected works, through the use of telecommunication networks, such as, but not limited to, the internet, in a manner that infringes intellectual property rights."1 Put more simply, online or digital piracy is the illegal reproduction and distribution of copyrighted material through the Internet. This includes the purchase of counterfeit products at much cheaper price than the genuine copyrighted product as well as illegal file

The Ongoing Fight Against

Online Piracy: A Legal Analysis

(Due to error by our Publications Manager, we regret we had not made full acknowledgement of those who assisted in the preparation of this article and thus are reprinting it in full - with apologies.)

by Divina Ilas-Panganiban and Gaston Perez de Tagle

1 An Act Providing For The Recognition And Use Of Electronic Commercial And Non-Commercial Transactions And Documents, Penalties For Unlawful Use Thereof, And For Other Purposes [THE ELECTRONICCOMMERCE ACT OF 2000] Republic Act No. 8792,Section 33 (b) (2000).

2 Charles W.L. Hill, Digital Piracy: Causes, Consequences, and Strategic Responses, Asia Pacific J Manage, 9 (2007).3 Id.4 Id.5 Id.6 See Wojciech Hardy, Michal Krawczyk, Joanna Tyrowicz, Friends Or Foes? A Meta-Analysis Of The Link Between "Online Piracy" And Sales Of Cultural Goods, (2015).7 Id.8 Tackling Music Piracy, available at http://www.ifpi.org/music-piracy.php (last accessed on 14 November 2016).9 International Federation of the Phonographic Industry, IFPI Digital Music Report: Charting the Path to Sustainable Growth 38 (2015).10 Tackling Music Piracy, available at http://www.ifpi.org/music-piracy.php (last accessed on 14 November 2016).11 International Federation of the Phonographic Industry, IFPI Digital Music Report: Charting the Path to Sustainable Growth 38 (2015).

The advent and continued development of the internet have changed the world. The time has come when the internet is now an indispensable aspect of living. Information is now processed, transferred, and communicated easily and with unprecedented speed. These new capabilities have improved, among others, social interactions, business communications, innovation, and education. Unfortunately, these improvements have also created new crimes and new methods of committing existing crimes, such as intellectual property infringement.

With regard to music content, the International Federation of the Phonographic Industry (IFPI) opines that digital piracy is the biggest single threat to the development of the licensed music sector and to investment in artists.8 The IFPI estimates that 20 percent of fixed line internet users worldwide regularly access services offering copyright infringing music.9 Notably, this figure only takes into account desktop-based devices; "it does not include the emerging, yet unquantified, threat of smart phone and tablet based mobile piracy as consumers migrate to these devices."10 Worse, "there are over four billion music downloads via Bit Torrent alone."11

Page 35: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

JANUARY 2017 AMCHAM BUSINESS JOURNAL 33 AMCHAMPHILIPPINES.COM

remedies are available, and intellectual property owners are vigorously encouraged to avail of these remedies provided by law.

About the Authors:

Divina Ilas-PanganibanPartnerIntellectual Property Practi ce GroupInformati on, Technology & Communicati ons Industry GroupQuisumbing [email protected]

Gaston Perez de TagleAssociateIntellectual Property Practi ce GroupInformati on, Technology & Communicati ons Industry GroupQuisumbing [email protected]

About Quisumbing Torres:

Quisumbing Torres (QT) is a member fi rm of Baker & McKenzie Internati onal, a Swiss Verein with member law fi rms around the world.

For more than fi ve decades, QT has helped top multi nati onal and domesti c companies drive their growth in the country. The fi rm provides global reach with deep local roots, seamlessly delivering excepti onal and eff ecti ve legal advice and assistance to clients across borders.

Presently, QT is a team of more than 50 Philippine lawyers. It remains a full-service fi rm, advising clients in the Banking & Finance, Corporate & Commercial, Dispute Resoluti on, Employment, Immigrati on, Intellectual Property, and Tax practi ce areas.

FEATURE

12 Todd Spangler, Piracy: Streaming Video Accounts for 74% of Illegal Film and TV Acti vity, Study Finds available at htt p://variety.com/2016/digital/news/piracy-streaming-video-illegal-fi lm-tv-1201825766/ (last accessed on 14 November 2016).

13 Id.14 Philippine Nati onal Police Anti -Cybercrime Group, Cybercrime Stati sti cs available at htt p://acg.pnp.gov.ph/main/?page_id=1990 (last accessed on 14 November 2016).15 Id.16 ‘Rise Against Movie Piracy Philippines’ Launched available at htt p://thestandard.com.ph/showbitz/204493/-rise-against-movie-piracy-philippines-launched.html (last accessed on 14 November 2016).17 An Act Defi ning Cybercrime, Providing For The Preventi on, Investi gati on, Suppression And The Impositi on Of Penalti es There for And For Other Purposes [THE CYBERCRIME PREVENTION ACT OF 2012],

Republic Act No. 10175, Secti on 6 (2012). Tackling Music Piracy, available at htt p://www.ifpi.org/music-piracy.php (last accessed on 14 November 2016).17 Internati onal Federati on of the Phonographic Industry, IFPI Digital Music Report: Charti ng the Path to Sustainable Growth 38 (2015).17 Tackling Music Piracy, available at htt p://www.ifpi.org/music-piracy.php (last accessed on 14 November 2016).17 Internati onal Federati on of the Phonographic Industry, IFPI Digital Music Report: Charti ng the Path to Sustainable Growth 38 (2015).

Graver sti ll may be the online piracy problem as it pertains to video content. According to a recent data analysis by a U.K. anti piracy fi rm, there were approximately 78.5 billion worldwide visits to fi lm and T.V. piracy sites in 2015.12 73.7 percent of these visits were to streaming sites, while 17.2 percent were to torrent-based sites.13

In the Philippines, online piracy has begun to take root as technology becomes more readily available to a larger segment of the populati on. According to cybercrime stati sti cs provided by the Anti -Cybercrime Group of the Philippine Nati onal Police (PNPACG), there was no signifi cant online piracy acti vity in the country in 2013.14 However, beginning in 2014, the PNPACG observed that there were many reported instances of online piracy.15 This problem will only grow further as the technological capabiliti es of the populati on conti nue to improve. The foregoing numbers clearly illustrate the extent of the problem and the urgent need for an eff ecti ve soluti on.

What can be done?In the ASEAN region, the Philippines

is considered a leader for its eff orts to safeguard intellectual property.16 In this connecti on, the country's legal framework provides intellectual property owners with avenues of redress should their intellectual property rights be violated through online piracy. The Cybercrime Preventi on Act of 2012 states that "all crimes defi ned and penalized by the Revised Penal Code, as amended, and special laws, if committ ed by, through and with the use of informati on and communicati ons technologies shall be covered by the relevant provisions of this Act: Provided, that the penalty to be imposed shall be one degree higher than that provided for by the Revised Penal Code, as amended, and special laws, as the case may be."17 This means that any crime, including intellectual property violati ons, committ ed through use of the internet will be punished more severely than if the crime was committ ed through other means.

It must be noted that intellectual property crimes, such as online piracy, are private crimes. What this means is that the government cannot act against these criminals without the intellectual property owners initi ati ng a complaint with the appropriate body. The appropriate body, in cases of cybercrimes, would be the PNPACG, which is tasked with investi gati ng cybercrime-related incidents and enforcing the perti nent laws on cybercrime.

Before initi ati ng an investi gati on of a potenti al cybercrime through the PNPACG, a common practi ce among aggrieved intellectual property owners is to privately gather evidence against the alleged cyber criminal, either through its own eff orts or by engaging the services of private investi gati ve agencies. Once gathered, the aggrieved party or parti es deliver the informati on to the PNPACG for the latt er to use in their investi gati on against the cyber criminal/s. This step is crucial in the fi ght against online piracy as it greatly contributes to the success of the police investi gati on.

In the meeti ng of the Intellectual Property Rights Committ ee of the American Chamber of Commerce held on 11 November 2016, Police Superintendent Jay Guillermo, the current Assistant Chief of the Anti -Cybercrime Operati ons and Training Division of the PNPACG, discussed the vast experience of his offi ce, through a number of actual cases, in enforcing the rights of Intellectual property owners against online infringers. The PNPACG conducts its investi gati ons through a combinati on of physical and virtual techniques. Its agents uti lize current technology, such as social media, to gather informati on on the suspected perpetrators. Once a suitable amount of informati on is gathered, the PNPACG then uti lizes its physical assets to conduct surveillance and confi rm the veracity of the collected informati on. If the informati on proves reliable, the agents endeavor to capture the suspect and fi le the appropriate charges against them.

The paramount challenge for the law enforcement agencies which are tasked to protect and enforce intellectual property rights, including the PNPACG, is that they cannot act against intellectual property violators without the intellectual property owners fi ling the proper complaints. An eff ecti ve intellectual property protecti on regime, online or otherwise, will only be possible if owners themselves are proacti ve and vigilant in enforcing their respecti ve intellectual property rights. Legal relief and

Page 36: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

34 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

Getting to Know You

Ambassador of Goodwill or “The Don”. This is how people aff ecti onately call DonFelbaum, Managing Director of OPTEL,and past President of the American

AmCham’sMost Versati leCommitt ee ChairmanWe are starti ng this series to introduce our AmCham Committ ee Chairs to the members. The Chairs are a dedicated group of men and women who volunteer their valuable personal ti me to assist the Chamber in assuring we have ti mely, interesti ng and in-depth programs for our members.

Chamber of Commerce in the Philippines.

Don is well known in the wide, wide world of the Philippine and American business communiti es, especially the ICT Sector, for his consulti ng experti se, as well as his incredibly friendly and helpful personality, making him the pleasantly compelling “go-to-guy” for anyone seeking personal or professional advice, parti cularly those just new in town.

Don is the Managing Director of OPTEL, a bouti que ICT Advisory fi rm he started in 1989. The company supports its clients in outsourcing, strategic planning, mergers and acquisiti ons, government interface and advocacy assignments.

Acti ve in directorships and on advisory boards with more than 10 companies, his business experience has through the years covered at least 25 countries worldwide. Don brings to the table a broad general management experience backed by a well-developed entrepreneurial mix of visionary, strategic, analyti cal and implementati on skills. Well adept at business development, including leading start-ups, mergers and acquisiti ons and project funding, he is thus acti vely sought for assistance and support by a number of foreign and local fi rms.

An American who has lived in the Philippines for more than 30 years, Don believes that the Philippines, with its young and vibrant workforce, will conti nue to play a key role in the Asia Pacifi c Region over the next few years.

Don foresees the Philippine economy conti nuing to grow in the coming years, adding that the local business leaders can benefi t by adapti ng to the ever-changing global landscape. He urges business executi ves to be fl exible, pati ent, and proacti ve in their undertakings, encouraging them in the process to create new jobs for broad-based growth throughout the country. Somewhat analogous to the famous line “Build and they will come” from the movie “Field of Dreams”, his favorite advice is: “Make friends and business will surely follow.”

We are starti ng this series to introduce our AmCham Committ ee Chairs to the members. The Chairs are a dedicated group of men and women who volunteer their valuable personal ti me to assist the Chamber in assuring we have ti mely, interesti ng and in-depth programs for our members.

Donald R. Felbaum (Don)Managing Director, OPTEL

“Make friends and business will surely follow.”

Page 37: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

Feature

JANUARY 2017 AMCHAM BUSINESS JOURNAL 35 AMCHAMPHILIPPINES.COM

Page 38: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

36 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM JANUARY 2017 AMCHAM BUSINESS JOURNAL 37

Health Matters

ould you like to wakeup every morning andsee everything clearlyinstead of fi rst gropingfor your glasses? Are

you ti red of going through that daily ritual of removing, cleaning, and putti ng your contact lenses on? Is your acti ve lifestyle being hampered by those spectacles of yours? For the last 25 years, more than 28 million people all over the world have had Lasik vision correcti on. Why not you?

LASIK (laser-assisted in situ keratomileusis) is a laser procedure that permanently corrects near sightedness (myopia), far sightedness (hyperopia), asti gmati sm. When done a certain way, it can also be used to turn back the hands of ti me and allow you to get rid of your reading glasses for quite some ti me. The laser procedure involves creati ng a very thin fl ap on your corneas (the clear dome at the front of your eyes) with either a fast moving blade (called a microkeratome) or a laser and then using an excimer laser to change the shape of the cornea underneath that fl ap. The fl ap is then placed back unto its original positi on and it heals by itself without the need for sutures.

About 95 percent of pati ents who have had Lasik have 20/20 to 20/40 vision. Most are quite happy and only regret why they have not done it earlier. Unfortunately, not everyone is a candidate for this procedure. Hence a thorough Lasik screening procedure conducted by a highly trained refracti ve surgeon in a reputable eye center that is specifi cally equipped to handle Lasik procedures is must to opti mize the chances for success. Despite our massive success with Lasik, it is by no means the only procedure to improve your vision. Consult a board certi fi ed refracti ve

Lasik Surgery For Youby Richard Raymund L. Nepomuceno, MD, FPAO

achieve this quality of vision from one surgery, enhancement surgery can usually give the rest of the desired correcti on.

What grade must I have to be eligible for Lasik?There is no universally accepted exact number. It depends on how much benefi t the pati ent can achieve versus the risks the pati ent has to take. Gone are the days when the grade has to be “high” just to even consider the Lasik procedure. If the grade is “too low” or “too high” , a good refracti ve surgeon should be able to give you other opti ons aside from Lasik.

What is the worst possible complicati on? The worst possible complicati on in LASIK is perhaps a serious infecti on which could lead to a deteriorati on of the cornea. Infecti ons very rarely occur. Should they occur, however, they can usually be controlled well with medicati ons with litt le or no loss of the quality of vision. And even if the cornea does become seriously scarred because of an infecti on, corneal transplants are usually possible to pave the

W surgeon so both of you can mutually come up with what is best for you eye.

Generally, speaking, a Lasik pati ent must fulfi ll the following criteria:

1. Should be able to givean informed consent

2. Stable refracti on (lessthan 0.50D of change ingrade for at least 12months)

3. Must not have seriouseye disorders such asglaucoma, keratoconus,cataracts

4. Myopia of up to about12.0D Diopters (exactdegree depends onlaser to be used and pati ent conditi on)

5. Hyperopia of up to about 6.0 diopters (exactdegree depends on laser to be used and pati entconditi on)

6. Can lie fl at on their backs and keep sti ll whilefollowing instructi ons

7. Not pregnant, nursing or planning pregnancywithin six months of surgery

8. Must have realisti c expectati ons

FREQUENTLY ASKED QUESTIONS:

Does the surgery hurt? The laser procedure itself does not hurt. Slight pressure may be felt during the laser procedure. However, there is the possibility of some degree of discomfort, ocular pain, and/or tearing right aft er the procedure which is usually over by 12 hours.

Can 20/20 vision be guaranteed?Just like any surgical procedure in the body, there are no absolute guarantees. Ninety percent of pati ents with low through moderate ranges of myopia and/or asti gmati sm achieve 20/40 natural vision from just one surgery. For those who do not

Phot

o So

urce

: ww

w.p

ixab

ay.c

om

Page 39: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

JANUARY 2017 AMCHAM BUSINESS JOURNAL 37

When can one swim?Swimming and water sports can be resumed after two weeks.

Biography:

Dr. Richard Nepomuceno is a Comprehensive Ophthalmologist of Peregrine Eye and Laser Institute. Dr. Nepomuceno specializes in Cataract Surgery, LASIK, Laser Vision Correction, Eye infection and Corneal Transplant. He is a board-certified ophthalmologist and is a Fellow of the Philippine Academy of Ophthalmology. He is a graduate of UCLA and the University of the Philippines.

Email: [email protected] Number: 890-0115

way for good vision. It is thus very important for you to choose a surgeon who can handle such rare eventualities.

Most patients can expect to note at least some of these effects during the healing process:

1. Slightly increased light sensitivity 2. Some halo effect from bright lights

during night time 3. Decreased visual clarity in dim light 4. Slightly dryer eyes

In most cases, these effects decrease and disappear as the eye heals. Rarely do some persist, albeit to a much lesser degree.

What are some of the Risks and Side Effects of LASIK?

1. It is possible to create a cap ofcorneal tissue instead of a flap byfully removing the top of the cornearather than just lifting it. Thisremoved tissue however, heals backinto place but requires extra care inpositioning.

2. Infection -- Very rare and is usuallycontrolled with medications.

3. Epithelial tissue growth underneaththe flap -- Can usually be solved bylifting the flap and gently removingthese tissue cells.

Side effects are minimal following LASIK surgery since most of the surface of the cornea has not been affected by the procedure. But people who have the surgery may experience some light sensitivity and glare for a few days or weeks.

Can both eyes be done on the same day?Usually, both eyes undergo the procedure on the same day. It’s usually up to the patient if one wants it done on separate days.

How long does the procedure take?The whole procedure should take no more than 20 minutes and does not require hospitalization. The actual laser treatment should be done in a minute.

Can the treatment be repeated?In some undercorrected cases, laser retreatment can be made about 3 to 6 months after the initial treatment. This is to allow refraction stability before the retreatment.

Can corrective lenses be used after the procedure when results fall short of being satisfactory?One can wear glasses to improve vision if satisfaction is not achieved. In some cases, contact lenses can still be prescribed.

JANUARY 2017 AMCHAM BUSINESS JOURNAL 37

HEALTH MATTERS

Page 40: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

38 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

Business of Business

customized benefi ts and incenti ves, and reinvent retenti on strategies for employees looking not just for money.

As the world of work evolves, more 21st century life skills will be required to get gainful employment. Traits like personal initi ati ve, asserti veness, conti nuous learning, fl exibility and adaptability will be more important than hard skills. Emerging technologies and changing demographics will encourage free agency, entrepreneurship and non-standard forms of work arrangement. As career opportuniti es multi ply, qualifi cati on requirements for higher-value jobs will become more stringent as the workforce becomes more educated and skilled. Workers’ groups and craft smen’s guilds must work harder at acquiring bett er skills to become more competi ti ve, rather than depend on government protecti onism for security. The market will render irrelevant incumbency, seniority and longevity. Eventually, job security shall be redefi ned to mean not having a permanent or regular job to having the ability to perform a variety of jobs as one moves from one positi on, department, company, country or region to another.

In light of these scenarios, HR’s most diffi cult future challenge will be to help in building a more trained, educated and future-ready workforce today. HR must also create that employee experience that will engender greater commitment, producti vity and advocacy, not just sati sfacti on.

But fi rst, HR must learn to shed its old mindset of a stand-alone functi on of an administrati ve expert. HR must be intermeshed with various disciplines and across organizati onal boundaries in order to deliver amazing, unforgett able, and holisti c employee experiences every ti me, all the ti me.

T

that happens, HR should be able to protect not just company data but those of the employees as well.

Larger playing fi eldUp unti l the 1960s, business competi ti on referred

to the corner store in the neighborhood. San Miguel - under Andres Soriano, Jr. - was probably the fi rst Filipino company to use “internati onalizati on” as a business strategy. Today, no matt er the size of a business, it has to operate on a global level, and the world is its playing fi eld – for orders, raw materials, and talents.

As we write, not too many companies fully understand the challenges and implicati ons of this reality.

In the future, HR must expand its reach. HR must adapt to the changing demographics and worker profi les. HR must get involved in partnering with government to develop long term and permanent soluti ons to educate, train, develop, deploy and moti vate a highly diversifi ed populati on with varied interests and expectati ons. Att racti ng, retaining and getti ng ROI from talents will be more diffi cult as HR must adapt to constantly evolving job roles,

kilometers from a nipa shack to a public school in a town visited more by typhoons than by politi cians aft er electi ons.

Round pegs and round holesMy earliest recollecti on of HR was as a

messenger in a radio-telegraph company that was using dots and dashes to receive and deliver messages nati onwide. The company President was a doctor of medicine, and the HR head was an Air Force pilot who shift ed careers. There I saw that HR was about recruitment, payroll, benefi ts and union dues. I never experienced classroom training in my fi rst three years with the company nor understood my career path.

I would overhear the President (doctor) remind the HR head (Air Force captain) to “put a square peg in a square hole, a round peg in a round hole.” Later, I realized they were discussing recruitment strategies. Today, the Internet makes recruitment easier through video resumes. Fit between the job applicant and the job is not enough reason for hiring talents today, as jobs change over ti me and some people don’t. Such amorphous and esoteric job specifi cati ons as potenti al, fi t with organizati onal culture, or tolerance for ambiguity are now and will henceforth be used to separate the men from the boys.

In a decade, the norm will be to send resumes, get interviewed and hired using mobile phone devices. In a few more decades, technology will seamlessly integrate the world as it breaks down traditi onal informati on and communicati on barriers. When

HRD for Global Competi ti veness

"HR isn't a thing we do. It's the thing that runs our business."

— Wynn Las Vegas

by Ernie Cecilia, DPM

© Randy Glasbergenwww.glasbergen.com

“The new screen saver was created by a moti vati on expert. It's a slide show of former employees who were fi red for poor

performance.”

he formal practi ce of human resources (HR) management in the Philippines started when I was a second grade (elementary) pupil walking barefoot two

Page 41: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

JANUARY 2017 AMCHAM BUSINESS JOURNAL 39

the highest percentage of the unemployed. When I was PMAP President at the turn of the millennium, then Education Secretary Bro. Andrew Gonzales said, “Ernie, that there is a skills mismatch is a long foregone conclusion.” Is the skills mismatch truly that formidable a problem to resolve than sending an unmanned spacecraft to the recesses of the universe?

Unintended consequencesTwo of the most critical national problems today

are poverty and unemployment. Dole outs will not make the poor rich. Making all forms of employment regular will not create more jobs. In the words of my friend Prof. Cesar Azucena, “Many of government’s programs aimed at protecting the poor and the workers tend to create more adverse consequences for the people they seek to protect.”

The Philippine Institute for Development Studies (PIDS) made recent studies (c/o Dr. Vic Paqueo, Dr. Aniceto Orbeta, Jr., and Dr. Leonardo Lanzona) that made significant findings of unintended consequences of government policies that institute constantly rising legal minimum wages (LMW) and curtail temporary employment contracts (TECs). These findings are featured in a forthcoming book of my friend Dr. Paqueo, “Unintended Consequences: The Folly of Uncritical Thinking.”

Employment has a demand and supply side. To create jobs (demand side), you need investments – foreign or domestic, it doesn't matter. I suspect, though, that some Chinoy taipans have been hedging on account of uncertain times by investing more heavily in other countries while maintaining their investments in the Philippines. Investments have a tendency to seek more investment-friendly environments. All throughout the world, countries with more investor-friendly policies attract investments.

On the supply side, education, training and development are the strategies to prepare the workforce for jobs created by massive inflow of investments. Other countries have adopted more aggressive strategies to enhance their people’s education, training and development, and are fast catching up with the Philippines. At the same time, except for the K to 12 program, we don’t see much innovation in our educational system. There are bright

BUSINESS OF BUSINESS

Same old, same oldIn highly protective work environments

like the Philippines, outsourcing and temporary work will rise and fall. But, like it or not, the rest of the world will continue to depend upon a growing ecosystem of independent contractors (organizations or individuals) and outsourcing partners that offer expert, flexible and need-based business functions, including HR functions.

In the future, HR departments must redefine and implement new mandates for flexible work arrangements and give them more strategic value beyond cost-effectiveness.

In the near future, economic integration and cross-border migration will add a whole new flavor to HR’s complex problems today. While integration creates work opportunities for skilled Filipinos, “brain drain” could become a serious unintended consequence. Unless a holistic approach is adopted in continuously training and developing Filipino talents, government and business leaders could wake up one day to see that all the skilled Filipinos have become “contractual” workers abroad, while the untrained Filipinos continue to wallow in low-value, minimum-waged, but regular jobs. Sometimes, I sense some amount of hypocrisy in curtailing temporary or contractual work arrangements in companies operating in the Philippines, while we condone, if not encourage, 6,000 Filipinos to leave every single day to work abroad in contractual and more precarious work arrangements.

It is ironic that the Philippines has one of the highest literacy rates in Asia and also the highest unemployment rate. At a certain age bracket, collegiate or vocational-technical graduates comprise

AMCHAMPHILIPPINES.COM

"Many of government's programs aimed at protecting the poor and the workers tend to create more adverse consequences for the people they seek to protect."

spots though. The K to 12 just took the Philippines out of the list of the only three countries with less than 12 years of pre-university education system, which earlier included us, Angola and Djibouti. Other ASEAN countries have more solid pre-university education – Brunei, 15 years; Cambodia, 13; Indonesia, 13; Laos, 13; Malaysia, 13-14; Myanmar, 12, Singapore, 12-14; Thailand, 12; East Timor, 12; and Vietnam, 14-15 years.

It would certainly be the saddest thing if investments begin to pour in and the Filipinos are not prepared to take the jobs.

Human resources development continues to be a strategic initiative for the Philippines’ global competitiveness. It’s too serious a job to be left to government. Private sector HR must lend its expertise to ensure a holistic Filipino human development.

Steve Wynn of Wynn Las Vegas said, “HR isn’t a thing we do. It’s the thing that runs our business.”

About the Author:

Ernie is the 2013 Executive Director and 1999 President of the People Management Association of the Philippines (PMAP); Chair of the AMCHAM

Human Capital Committee; and Co-Chair of ECOP’s TWG on Labor and Social Policy Issues. He is President and CEO of EC Business Solutions and Career Center. Contact him at [email protected]

Page 42: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment

40 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM

MEMBERS’ BIRTHDAYS

BDO ...................................................................................................07CalEnergy International Services ........................................................01Caltex ................................................................................................27Coca Cola ...........................................................................................11Ford Philippines.....................................................................................15International School Manila ..................................................................31John Clements Consultants, Inc. ........................................................obcKittelson & Carpo ...............................................................................21KMC .................................................................................................35Orion Support, Inc. ..............................................................................29PMFTC .............................................................................................ibcP&G .....................................................................................................17Regus Tec Centre, Inc. ........................................................................25Truth Verifier Systems, Inc. .................................................................40Zuellig Pharma ....................................................................................ifc

INDEX TO ADVERTISERS

FEBRUARY

RAJIV AHUJA 1

ALAN DELA CRUZ 3

PETER TROILO 4

JOYCE CUDALE 5

EUSEBIO TAN 6

GEM MARIELLE LIM 6

LUTGARDO MENDOZA 7

MARIA BERNARDITA ALBA 7

DANILO SEBASTIAN REYES 8

ROMEO ROXAS 8

BENITO CHUA KIONG 10

KAREN BATUNGBACAL 10

JOHN MELVIN 12

ANDREW ONG 13

LAURENT BEDLEEM 14

CIRILO NOEL 16

CESAR GINETE 17

ROBERTO PAREL 19

THOMAS HENDERSON 19

MILLET ESCASINAS 20

MARIFE ZAMORA 21

TRINITY GATUZ 21

MYLA PILAO 21

RAISSA ROMINA BAUTISTA 22

GRAHAM EDWARDS 22

MICHAEL GELINA 22

GERARD ZORILLA 23

RENER ILAGAN 23

RAMON GARCIA 26

ANTONIO OSTREA 27

MICHAEL ESTANIEL 27

SIMEON CUYSON 28

MARCH

PHILIP SOLIVEN 1

FAUSTO PREYSLER 2

KARIMA PALAFOX 3

AIREEN QUILILAN 4

GREGORIO GERRY FERNANDEZ 5

GREGORIO ORTEGA 5

MATTHEW WILLIAMS 5

HENRY PELAEZ 6

VIOLI REMO 7

ABBEY BRAVO 7

JEREMIAH MCNAMARA 7

CORAZON BERNARDO 9

MELANIE PAGARAGAN 10

JOSE MARI CHAN 11

JOHN BRIAN PALLASIGUE 11

JOSEPH SULLIVAN 15

ROLAND DE LA CRUZ 15

FELINO 'JUN' PALAFOX 16

ISIDRO VALENCIA 18

JOSE MARIA ZABALETA 18

JOSE P. LEVISTE JR. 19

LEWIS FLOWERS 20

RICK SANTOS 20

ANGELA SANTIANO 24

JUAN RECINTO 25

ANTHONY QUACH 26

VICENTE MERCADO 27

KEE TEEK HONG 28

RYNOR JAMANDRE 28

MAURICE GOHOC 29

JON KAPLAN 29

CHRISTOPHER THOMPSON�DEL ROSARIO 29

EDMUND JASON BARANDA 31

TOM DE BRUIN 31

ANTON CELESTINO ESTRADA 31

RAJIV AHUJA 1

ALAN DELA CRUZ 3

PETER TROILO 4

JOYCE CUDALE 5

EUSEBIO TAN 6

GEM MARIELLE LIM 6

LUTGARDO MENDOZA 7

MARIA BERNARDITA ALBA 7

DANILO SEBASTIAN REYES 8

ROMEO ROXAS 8

BENITO CHUA KIONG 10

KAREN BATUNGBACAL 10

JOHN MELVIN 12

ANDREW ONG 13

LAURENT BEDLEEM 14

CIRILO NOEL 16

CESAR GINETE 17

ROBERTO PAREL 19

THOMAS HENDERSON 19

MILLET ESCASINAS 20

MARIFE ZAMORA 21

TRINITY GATUZ 21

MYLA PILAO 21

RAISSA ROMINA BAUTISTA 22

GRAHAM EDWARDS 22

MICHAEL GELINA 22

GERARD ZORILLA 23

RENER ILAGAN 23

RAMON GARCIA 26

ANTONIO OSTREA 27

MICHAEL ESTANIEL 27

SIMEON CUYSON 28

RAJIV AHUJA 1

ALAN DELA CRUZ 3

PETER TROILO 4

JOYCE CUDALE 5

EUSEBIO TAN 6

GEM MARIELLE LIM 6

LUTGARDO MENDOZA 7

MARIA BERNARDITA ALBA 7

DANILO SEBASTIAN REYES 8

ROMEO ROXAS 8

BENITO CHUA KIONG 10

KAREN BATUNGBACAL 10

JOHN MELVIN 12

ANDREW ONG 13

LAURENT BEDLEEM 14

CIRILO NOEL 16

CESAR GINETE 17

ROBERTO PAREL 19

THOMAS HENDERSON 19

MILLET ESCASINAS 20

MARIFE ZAMORA 21

TRINITY GATUZ 21

MYLA PILAO 21

RAISSA ROMINA BAUTISTA 22

GRAHAM EDWARDS 22

MICHAEL GELINA 22

GERARD ZORILLA 23

RENER ILAGAN 23

RAMON GARCIA 26

ANTONIO OSTREA 27

MICHAEL ESTANIEL 27

SIMEON CUYSON 28

RAJIV AHUJA 1

ALAN DELA CRUZ 3

PETER TROILO 4

JOYCE CUDALE 5

EUSEBIO TAN 6

GEM MARIELLE LIM 6

LUTGARDO MENDOZA 7

MARIA BERNARDITA ALBA 7

DANILO SEBASTIAN REYES 8

ROMEO ROXAS 8

BENITO CHUA KIONG 10

KAREN BATUNGBACAL 10

JOHN MELVIN 12

ANDREW ONG 13

LAURENT BEDLEEM 14

CIRILO NOEL 16

CESAR GINETE 17

ROBERTO PAREL 19

THOMAS HENDERSON 19

MILLET ESCASINAS 20

MARIFE ZAMORA 21

TRINITY GATUZ 21

MYLA PILAO 21

RAISSA ROMINA BAUTISTA 22

GRAHAM EDWARDS 22

MICHAEL GELINA 22

GERARD ZORILLA 23

RENER ILAGAN 23

RAMON GARCIA 26

ANTONIO OSTREA 27

MICHAEL ESTANIEL 27

SIMEON CUYSON 28

PHILIP SOLIVEN 1

FAUSTO PREYSLER 2

KARIMA PALAFOX 3

AIREEN QUILILAN 4

GREGORIO GERRY FERNANDEZ 5

GREGORIO ORTEGA 5

MATTHEW WILLIAMS 5

HENRY PELAEZ 6

VIOLI REMO 7

ABBEY BRAVO 7

JEREMIAH MCNAMARA 7

CORAZON BERNARDO 9

MELANIE PAGARAGAN 10

JOSE MARI CHAN 11

JOHN BRIAN PALLASIGUE 11

JOSEPH SULLIVAN 15

ROLAND DE LA CRUZ 15

FELINO 'JUN' PALAFOX 16

ISIDRO VALENCIA 18

JOSE MARIA ZABALETA 18

JOSE P. LEVISTE JR. 19

LEWIS FLOWERS 20

RICK SANTOS 20

ANGELA SANTIANO 24

JUAN RECINTO 25

ANTHONY QUACH 26

VICENTE MERCADO 27

KEE TEEK HONG 28

RYNOR JAMANDRE 28

MAURICE GOHOC 29

JON KAPLAN 29

CHRISTOPHER THOMPSON�DEL ROSARIO 29

EDMUND JASON BARANDA 31

TOM DE BRUIN 31

ANTON CELESTINO ESTRADA 31

PHILIP SOLIVEN 1

FAUSTO PREYSLER 2

KARIMA PALAFOX 3

AIREEN QUILILAN 4

GREGORIO GERRY FERNANDEZ 5

GREGORIO ORTEGA 5

MATTHEW WILLIAMS 5

HENRY PELAEZ 6

VIOLI REMO 7

ABBEY BRAVO 7

JEREMIAH MCNAMARA 7

CORAZON BERNARDO 9

MELANIE PAGARAGAN 10

JOSE MARI CHAN 11

JOHN BRIAN PALLASIGUE 11

JOSEPH SULLIVAN 15

ROLAND DE LA CRUZ 15

FELINO 'JUN' PALAFOX 16

ISIDRO VALENCIA 18

JOSE MARIA ZABALETA 18

JOSE P. LEVISTE JR. 19

LEWIS FLOWERS 20

RICK SANTOS 20

ANGELA SANTIANO 24

JUAN RECINTO 25

ANTHONY QUACH 26

VICENTE MERCADO 27

KEE TEEK HONG 28

RYNOR JAMANDRE 28

MAURICE GOHOC 29

JON KAPLAN 29

CHRISTOPHER THOMPSON�DEL ROSARIO 29

EDMUND JASON BARANDA 31

TOM DE BRUIN 31

ANTON CELESTINO ESTRADA 31

PHILIP SOLIVEN 1

FAUSTO PREYSLER 2

KARIMA PALAFOX 3

AIREEN QUILILAN 4

GREGORIO GERRY FERNANDEZ 5

GREGORIO ORTEGA 5

MATTHEW WILLIAMS 5

HENRY PELAEZ 6

VIOLI REMO 7

ABBEY BRAVO 7

JEREMIAH MCNAMARA 7

CORAZON BERNARDO 9

MELANIE PAGARAGAN 10

JOSE MARI CHAN 11

JOHN BRIAN PALLASIGUE 11

JOSEPH SULLIVAN 15

ROLAND DE LA CRUZ 15

FELINO 'JUN' PALAFOX 16

ISIDRO VALENCIA 18

JOSE MARIA ZABALETA 18

JOSE P. LEVISTE JR. 19

LEWIS FLOWERS 20

RICK SANTOS 20

ANGELA SANTIANO 24

JUAN RECINTO 25

ANTHONY QUACH 26

VICENTE MERCADO 27

KEE TEEK HONG 28

RYNOR JAMANDRE 28

MAURICE GOHOC 29

JON KAPLAN 29

CHRISTOPHER THOMPSON�DEL ROSARIO 29

EDMUND JASON BARANDA 31

TOM DE BRUIN 31

ANTON CELESTINO ESTRADA 31

FOLLOW OUR ACCOUNTS

HAPPY NEW YEAR!

FROM ALL OF US AT AMCHAM

Page 43: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment
Page 44: Amcham BusinessJournalJan2017 Edited · 2 AMCHAM BUSINESS JOURNAL JANUARY 2017 AMCHAMPHILIPPINES.COM Getting to Know You AmCham's Most Versatile Committee Chairman, page 34 Investment