Filipinos in South Korea

Pidcock backs Philippines to emerge as EM power player

Jason Picdcock. Photo: citywire.co.uk

The Philippines is one of the best and fastest-growing countries in the emerging market universe, according to Asian income specialist Jason Pidcock.

Writing in an investor update, the manager of the Jupiter Asian Income fund said, despite having low GDP per capital, the country was growing sustainably at around 6%.

Pidcock said the Philippines is moving towards developed-market norms, such as smaller families, which is, in turn, increasing their spending.

‘The young Philippine middle class is already growing rapidly. Annual disposable incomes are up 14% annualised over the last three years, and the portion of the workforce earning more than US$5,000 has surged from 6% in 2005 to 21% in 2013. I expect these trends to continue as the country’s economy continues to move up the value chain,’ Pidcock said.

He added that the country was benefitting from Chinese tourism, while foreign direct investment had increased due to the population’s English language skills.

The comments on Philippines come in the same week as tensions in South East Asia. This has seen the Philippines state China should abide by an international tribunal’s ruling that is has no rightful claim to the South China Sea.

Adding exposure

Pidcock has allocated 6.9% of the fund, which was launched in March of this year, to the Philippines and said, while it is still developing, it produces lower dividend yields and the choice of other developed markets.

‘The macro attractions of the Philippines are hard to deny. But as an equity investor the fundamental question is whether there are attractive, well managed companies for me to invest in. The answer is that while this maturing market doesn’t have the depth of some of its more developed peers, I see a number that do fulfil my investment criteria,’ he said.

In terms of holdings, Pidcock has around 2.7% in shopping centre operator SM Prime, which he said will benefit from a rise in domestic consumption. He also holds food producer Universal Robina (2%) and the diversified conglomerate GT Capita (2.4%)

Persuasive politics

Pidcock added the political environment is stable in the Philippines and this will support the economy over the long term. He expects growth in the Philippines to overtake growth in Thailand within the next 15-20 years.

‘Politics are always a risk in emerging markets. On balance, the political situation in the Philippines looks favourable and it seems likely that politics will be a positive factor. President Duterte talks freely – occasionally too freely – but I think he will be good for the economy and therefore the stock market,' he said.

‘He wants to cut down corruption, has some slightly unorthodox ways of going about that, but the objective is a good one – there’s an upbeat feel in the country, generally Filipinos are optimistic. And the fact that he won his election clearly is a good thing – there was also no dispute with the result, which is good.’

In the three months since launch to the end of June 2016, the Jupiter Asian Income fund returned 1.7% in US dollar terms, which compares to a return of 0.89% by the average manager in the Equity – Asia Pacific Ex Japan sector over the same period. – CITY WIRE - WEALTH MANAGER

FORBES: The Philippines Should Sue China For $189.48 Billion USD In South China Sea Rent And Damages

This Monday, May 11, 2015, file photo, taken through a glass window of a military plane, shows China’s alleged on-going reclamation of Mischief Reef in the Spratly Islands in the South China Sea. China’s campaign of island building in the South China Sea might soon quadruple the number of airstrips available to the People’s Liberation Army in the highly contested, environmentally delicate, and strategically vital region. (Ritchie B. Tongo/Pool Photo via AP, File)

The Philippines Should Sue China For $177 Billion In South China Sea Rent And Damages

China owes the Philippines and other countries more than $177 billion in rent and damages for China’s South China Sea fiasco. The Permanent Court of Arbitration found on Tuesday that Mischief Reef is a low-water elevation and within Philippines’ exclusive economic zone. This gives the Philippines’ indisputable legal rights to the reef. But since 1995 when China occupied the reef, China irreparably harmed the reef’s delicate marine ecosystem by dredging and building an artificial island there, including a military garrison and air-strip. By my estimate, China owes the Philippines $12.4 billion in rent and damages for Mischief Reef alone. Considering other Chinese island-building, the country owes the Philippines and other claimant countries more than $177 billion. If China doesn’t want to pay, the Philippines can sue in the courts of the U.S. and other countries where China holds property.

Billing Computation is a separate computation provided by the PesoReserve.com

Here is how to calculate what China owes. In 2015, the U.S. paid $1.97 million to the Philippines for 0.58 acres of coral reef destroyed when the USS Guardian went aground. That is a key reference point for environmental claims. Rent is even more costly. In 1988, the Philippines demanded $1.2 billion from the U.S. in rent for 6 military bases — $200 million each per year in 1988 dollars. The U.S. refused and got evicted.

By those metrics, the Philippines could sue China for about $4.6 billion of environmental damages to Mischief Reef in 2016 dollars, plus the requirement to pay $7.8 billion in rent. If China refuses to pay the combined $12.4 billion, the Philippines could seek redress in foreign civil courts to attach China’s offshore assets — of which there are plenty.

But China is liable for much more.  China occupied six additional features in 1988 in the Spratley’s claimed by the Philippines, plus Scarborough Shoal in 2012.

The Philippines did not resist because they justifiably feared violence on the part of China. In 1988, Vietnam claims that China killed 64 Vietnamese soldiers who resisted on Johnson South Reef in the Spratley’s. China disputes the claim, but according to historian and BBC reporter Bill Hayton, “Strangely, a propaganda film released by the Chinese Navy in 2009 to celebrate the navy’s 60th anniversary gives more credence to the Vietnamese version. The video, now available on YouTube, was shot from one of the Chinese ships and shows the Vietnamese force standing knee deep in water as the tide rises over the reef. Huge spouts of water then erupt around the Vietnamese troops as the Chinese ships open fire. Within seconds the thin line of men has completely disappeared and 64 lie dead in the water: the machine guns are Chinese and the victims Vietnamese. The Chinese won the battle of Johnson Reef with a turkey shoot.”

China occupied six features within Philippines’ claim in 1988: Hughes Reef, Johnson South Reef, Gaven Reef, Subi Reef, Fiery Cross Reef, and Cuarteron Reef. China has since dredged and built on all these reefs. Based on Philippines’ 1988 demand for rent from the U.S., each of these six features should yield (in 2016 dollars) about $10.3 billion for 29 years of use — a total of $62 billion.

China occupied Scarborough Shoal in 2012, but has not yet built there. There are no known environmental damages to the shoal, but rent for five years should be about $1.8 billion (inclusive of 2012 and 2016).

By my count, and including the $7.8 billion in rent for Mischief Reef, China owes the Philippines about $71.6 billion in rent for occupation of all 8 China-occupied features in the Philippines’ claimed part of the South China Sea.

In addition, the Court found that China destroyed a total of 48 square miles in the South China Sea through illegal dredging and artificial island building. Based on the $1.97 million paid by the U.S. to the Philippines in 2015 for the grounding of the USS Guardian, an international court could levy a $105 billion fine on China for ecological destruction of all 48 square miles, payable to the Philippines and other claimant states.

Should China refuse to pay, the Philippines and other claimants can bring civil suits in the U.S. and any other locations where China holds substantial assets. The total levy on China for rent on Philippine-claimed features, plus ecological damage to the entire South China Sea, should be about $176.6 billion: double Philippines’ annual GDP, and about a third of China’s GDP. That doesn’t include rent payable to other claimants, which should also be paid.

When China vacates its artificial islands in the South China Sea and pays this fine, plus rent to other claimants and any additional payments to the families of those killed, most attentive citizens will consider justice to have been done. Until then the international ruling in favor of the Philippines, as China has said, is just a sheet of paper. - FORBES

I worked in military intelligence for five years, including on nuclear weapons, terrorism, cyber-security, border security, and counter-insurgency. I covered and visited Asia and Europe, and worked in Afghanistan for one and a half years. I have a Ph.D. in Government from Harvard University, and a B.A. and M.A. in international relations from Yale University (Summa cum laude). My company, Corr Analytics, provides political risk analysis to commercial, non-profit, and media clients, and publishes the Journal of Political Risk. I am editing a series on the South China Sea conflict, and have covered and visited Africa, the Middle East and Latin America.

The author is a Forbes contributor. The opinions expressed are those of the writer.

I cover international politics, security and political risk.

Follow me on Twitter @anderscorr. If you have any additional information related to this article, contact me at corr@canalyt.com.

CHINA already "GAVE UP" South China Sea rights after signing UN treaty, Chuck Hagel says

West Philippine Sea & South China Sea Map. Source: Newstarget.com

Beijing gave up South China Sea rights after signing UN treaty, Chuck Hagel says

Beijing gave up its rights to the South China Sea after signing up to a United Nations convention, a former U.S. Defense Secretary said Wednesday, a day after an international tribunal ruled that China's claims of historical rights over the disputed waters were not founded on evidence.

A tribunal at the Permanent Court of Arbitration in The Hague, Netherlands, decided on Tuesday that China's claims to the disputed waters were counter to international law.

The Philippines had contested China's expansive territorial claims in the South China Sea, which Manila contended were invalid under international law.

China, however, said its historic rights predated the United Nations Convention on the Law of the Sea (UNCLOS) and were not at odds with the provisions of the treaty , to which both countries were signatories.

But the East Asian giant relinquished those rights when it signed the UNCLOS, former U.S. Secretary of Defense, Chuck Hagel said.

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"(It) explicitly states in that treaty and when you sign that treaty, you would and do relinquish all previous historical rights to any contested territory. So China essentially put itself in this position to be part of whatever the international tribunal comes down with," Hagel told CNBC's "Squawk Box".

"(The tribunal) is one of the most important post World War II institutions that has been set up to try to bring some order to a world that had gone without any order which lead to two world wars. I think it's important that we continue not only to maintain, but to support the force of those international tribunals," he added.

The Philippines wasn't the only big winner in a legal decision on rights to the resource-rich South China Sea, according to experts.

Malaysia, Vietnam and Indonesia are also set to benefit from the ruling, which dealt a painful blow to China's national pride

The Hague found the so-called 'nine-dash line' — a rough demarcation that China uses to set out what it believes is its territory—was illegal when applied to the Philippines, that meant it was also illegal when applied to other countries, added Paul Reichler, a partner at Foley Hoag and lead lawyer for the Philippines in the case.

"They are big winners as well," Reichler told CNBC's "The Rundown."

Hagel concurred with that assessment.

"This decision by the Hague really gives all those countries in that part of the world the high ground here and has isolated China. China has to pay attention to how other nations in the world are viewing this and will view them (the Chinese)," said Hagel, who described the ruling as "critically important."

China has said repeatedly that the arbitration tribunal had no real jurisdiction on the matter and that it would not abide by its decision.

Both Hagel and Reichler called for cool heads.

"This certainly isn't the end of the story," Reichler said. "When passions calm and different parties truly consider what's in their best interest, all parties will come to the conclusion that these disputes have to be resolved peacefully through diplomatic negotiations, whether it's bilateral or multilateral."

Regarding talks that China and Philippines may talk one-on-one on a deal, Hagel said the U.S. did not want to see "further escalation here by anyone."

U.S. is seeking to maintain "freedom of navigation" in the region for its ships, including military ships.

Noel Celis | AFP | Getty Images

"Freedom of navigation is absolutely critical; when a nation starts to threaten that in any way, that's very, very serious…. We don't want an over-reaction to this but we've got to be very clear with our allies and our friends in that area that (freedom of the seas) is not negotiable," said Hagel.

The real impact of Tuesday's ruling was that it clearly established the rights and obligations of the various parties involved, Reichler said.

"The Philippines succeeded in establishing that it enjoys the rights, guaranteed by the U.N., to an exclusive economic zone, in which it alone can enjoy the resources."

President Xi Jinping's administration reiterated his country's stance in an official statement after Tuesday's decision. Because China was the first to have discovered, named and explored the 1.4 million-square mile body of water, it had a right to establish territorial sovereignty, the statement said, added that the country was willing to continue resolving disputes peacefully through negotiations.

There is precedence if China wished to ignore The Hague's decision, although Reichler said that that would be an ill-advised move.

In 1986, the U.S. ignored the International Court of Justice's ruling regarding a spat with Nicaragua.

The Central American country had accused Washington of supporting Nicaraguan Contra rebels in an effort bid to undermine the country's socialist government, but the U.S. largely boycotted the proceedings, stating the court had no jurisdiction. It later vetoed a United Nations Security Council resolution that demanded Washington adhere to the ruling.

It was only in 1988, when U.S. Congress voted to terminate all support for the Contras that a settlement was ultimately reached.

"China can't thumb their nose at this," Reichler said. "It's not good practice to follow someone else's bad example. It was a great stain on the U.S. when it refused to honor the Nicaragua ruling. – CNBC

South China Sea ruling: Hague tribunal rules Beijing has 'no legal basis' to claim waters or resources

The Philippines challenged the so-called 'nine-dash line' China uses to claim virtually the entire South China Sea

China has "no legal basis" to claim historic rights to waters or resources in the South China Sea, an international tribunal has ruled.

The Philippines challenged the so-called "nine-dash line" China uses to claim virtually the entire South China Sea.

The dispute centered on waters through which an estimated $5 trillion in global trade passes through each year. The waters are also home to rich fishing stocks and a potential wealth of oil, gas and other resources.

The Philippines also asked the Hague-based tribunal to rule on whether several disputed areas are outcrops, reefs or islands, a move aimed at clarifying the extent of territorial waters they are entitled to or if they can project exclusive economic zones.

The court declared that “although Chinese navigators and fishermen, as well as those of other states, had historically made use of the islands in the South China Sea, there was no evidence that China had historically exercised exclusive control over the waters or their resources.

“The tribunal concluded that there was no legal basis for China to claim historic rights to resources within the sea areas falling within the ‘nine-dash line’.”

The Philippines' foreign minister called for "restraint and sobriety" in the South China Sea on after the ruling.

"Our experts are studying this award with the care and thoroughness that this significant arbitral outcome deserves," Foreign Affairs Secretary Perfecto Yasay told a news conference.

"We call on all those concerned to exercise restraint and sobriety. The Philippines strongly affirms its respect for this milestone decision."

China, which has boycotted the case, has summoned its demobilized sailors and officers for training drills, state media confirmed, in exercises that apparently started just days ago.

A Chinese civilian aircraft successfully carried out calibration tests on two new airports in the Spratly Islands in the South China Sea on Tuesday, state news agency Xinhua said.

It said the two airports were on Mischief Reef and Subi Reef, and the facilities will help with personnel transfers to the Spratlys.

In February, China deployed surface-to-air missiles on disputed islands in the South China Sea.

American and Taiwanese officials said missile batteries had been set up on Woody Island, part of the Paracels chain that has been under Chinese control for more than 40 years – but which is also claimed by Taiwan and Vietnam.

SOURCE: [ INDEPENDENT Additional reporting by Reuters ]

High stakes on the high seas: Philippines v China at The Hague

A Chinese Coast Guard boat sprays a water cannon at Filipino fishermen near Scarborough Shoal in the South China Sea last year. Photo: AP

At what point does a lonely rock in a vast ocean become an island? Just how much land is needed to sustain human life?

And when China dredges thousands of tons of sand from the sea floor to build a runway, is Beijing right to claim the waters surrounding an artificial island as its own territory?

An international court is about to rule on these crucial questions in the bitterly contested waters of the South China Sea, in one of the most eagerly awaited decisions in global politics right now.

It could also mark the moment Australia has come to dread: when the brewing rivalry between the United States and China finally breaks into a storm.

The South China Sea is a critical artery of world trade; about $US5 trillion worth of oil, gas, resource and "Made in China" goods are shipped across these waters back and forth from the powerhouse economies of Asia, including about 60 per cent of Australia's exports, according to government estimates.

But who exactly controls the South China Sea has been a stubborn regional dispute lasting decades - not just for the navigation channels, but just as importantly, the riches thought to lie beneath the waves in vast untapped oil fields and highly prized fish supplies.

Suddenly this regional dispute over rocks and coral beaches shapes as a critical test between China's willingness to thrown its weight around and Washington's insistence that Beijing should follow the existing rules it has policed over decades as the global superpower.

The US has been keen to ensure the court decision gets as much publicity as possible, while China has responded in the last week with naval war games and disdain.

Australia has been carefully watching, a key ally for Washington and a major trading partner for Beijing, knowing these are the kind of disputes that can determine geopolitical destiny.

The ruling is expected on July 12 and four main issues could have profound consequences for the balance of power in the neighborhood.

1. A hungry 'cow's tongue'

The Philippines has lodged a case against China under the Law of the Sea in the Permanent Court of Arbitration at The Hague, even though China has refused to participate.

Six countries claim overlapping parts of the South China Sea, creating a dangerous flashpoint for potential conflict in roughly 3.5 million square kilometers of open water, shoals and coral atolls teeming with fish and oil, and a key ocean passage for thousands of cargo ships passing through Asia.

But China's bid for territorial control sweeps across almost all others, shown on maps by a deliberately vague dotted line that hooks deep in a U-shape past the coast of Vietnam, towards Indonesia, and close to the western islands of the Philippines.

South China Sea  and West Philippines Sea overlapping claims. Illustration: The Sydney Herald Morning Post

Known as the "nine-dash line" - which Vietnam likens to a hungry "cow's tongue" for the way it licks across the region - China claims its control of the waters dates back to ancient times, marked in 600-year-old mariners' books.

The Philippines has asked the court, among a log of 15 technical claims, to rule China's "nine-dash line" is inconsistent with the modern Law of the Sea, which is based on geological features.

"That is absolutely the most important question put before the tribunal," Jay Batongbacal, a professor of international maritime law at the University of the Philippines, tells Fairfax Media.

The court hasn't yet said it has jurisdiction on this question, and it cannot decide issues of sovereignty - who owns what.

But if the court does weigh the question of the nine-dash line, there is little expectation that it will grant legal backing to the idea of "historic rights".

The ruling might prod China to precisely explain exactly what it claims, instead of resorting to what is seen as deliberate ambiguity.

2. Life, but not as we know it

It was a big risk for Philippines to take on China, by far its largest trade partner. The court decision may also completely upend Manila's own territorial claims.

The Philippines have challenged the court to decide whether a small stretch of land, just longer than a kilometer, is actually an island or just a big rock.

The difference is crucial for international law in deciding how much surrounding territory can be claimed.

Taiwan presently occupies this land, the largest feature of dozens of rocky outcrops and reefs in the Spratly Island chain, calling it "Taiping Island".

The Philippines calls it "Itu Aba", and says it has no fresh groundwater to sustain human life and so is better described for legal purposes as a rock.

Itu Aba. Illustration: The Sydney Herald Morning Post

But if the court says Itu Aba (it has adopted the Philippines' name for it) is indeed an island, then under the Law of the Sea the "island" will be entitled to 12 nautical miles of surrounding waters as its territory, and a 200-nautical-mile exclusive economic zone.

But in the shallow waters of the Spratly Islands, such a ruling could effectively knock out many of the Philippines' territorial claims too.

Taiwan insists Itu Aba can sustain life, and to prove it has stationed roughly 200 coast guard and scientists there, while also shoring up land for an airstrip there to fly in supplies.

Should the court's judgement rest on the conditions on Itu Aba now, as opposed to before human habitation, that will have interesting consequences for what has been the most contentious aspect of China's recent island-building actions.

3. 'Tourism appears unlikely'

China has been terribly busy in the past couple of years constructing a series of what movie fans would recognize as the arch-villain's hideouts - except that it makes little effort to keep these artificial islands secret.

Coral atolls in the South China Sea have been transformed into airfields, with dozens of storage sheds and dredged sand cutting deep ports.

In more sinister developments, China has also stacked weapons, radar towers and other military hardware on reclaimed land. In April, a military aircraft landed on one artificial island.

China's construction has been widely condemned; Australia's defense chief queried the need, dryly observing that "tourism appears unlikely".

The Philippines has asked the court to rule that Mischief Reef, Subi Reef and Fiery Cross Reef, among others that have been occupied by China and substantially transformed, should not qualify as islands but are actually just rocky outcrops which are only visible at low tide.

While that was true a couple of years ago, before China's construction work began, it's a 50-50 question which way the court might rule, and whether its decision will rest on the situation then or now.

The US has dispatched warships to sail inside the 12-nautical-mile zone around China's artificial islands, just to reinforce the point that Washington does not recognize the surrounding waters as sovereign territory.

A heated debate has erupted about whether Australia should also undertake these "freedom of navigation exercises", either with a vessel or by flying a patrol jet nearby.

The Philippines also wants the court to rule on China's aggressive behavior, especially around Scarborough Shoal, which China seized in 2012 and where it has sent its coast guard to harass foreign fishing vessels.

Scarborough Shoal is roughly 350 kilometers from Manila, yet more than 900 kilometers from China's mainland.

The court has also been asked whether Beijing has breached environmental obligations. Curiously enough, this includes Second Thomas Shoal, where the Philippines deliberately ran aground a rusty navy ship to serve as a military outpost, which China has often frustrated attempts to resupply.

4. The wild card

The US has deliberately fanned expectation about the upcoming court ruling, knowing that international diplomacy only ever produces a few tangible moments that register in the public mind as definitive.

But despite the hype, the ruling will not end the South China Sea stand-off.

China has already pledged to ignore the ruling, and has been busily attempting to gather its own motley crew of international supporters.

The US emphasis (echoed by Australia) is to solve the dispute through the "rules-based order", given that both the Philippines and China have ratified the United Nations Convention on the Law of the Sea.

But the US never has, which Malcolm Turnbull has warned diminishes Washington's leadership.

China is also permitted, under law, to exempt itself from arbitration - just as Australia has done in its maritime boundary dispute with East Timor.

What is really at stake here is who gets to enforce the rules and the age-old question of might versus right.

China insists the South China Sea dispute should be resolved country-to-country, without allowing pesky jurists to get in the way. This conveniently ignores its massive preponderance of power over its near neighbors.

But there is a wild card.

The Philippines has a new president, Rodrigo Duterte, with a reputation as a firebrand.

Duterte has threatened to jump aboard a jet ski to Scarborough Shoal to assert the Philippines' claim.

But he has also flagged a more conciliatory attitude towards Beijing.

China has turned on the charm since Duterte won election in May, with reports that Filipino fishermen are increasingly permitted to fish unhindered near Scarborough Shoal in the past few weeks.

"If it goes on still waters, I said, [if] there's no wind to move the sail, I might opt to go bilateral," Duterte said he told Barack Obama, one of several cryptic comments that leave analysts wondering what action he might take after the ruling.- The Sydney Morning Herald

Philippines to follow health care model of Cuba

The Cuban health system has become one of the most advanced in the world. | Photo: EFE

In a country where little more than a quarter of the population still live below the poverty line, universal healthcare – or, at the least, giving people access to cheap medicines – should be right there at the top of government's priority programs. Fortunately, this was among the priority concerns that President Rodrigo "Rody" Duterte first took up with his Cabinet members on day one of the new administration.

When he convened his maiden Cabinet meeting a few hours after his inaugural last June 30, President Rody lost no time to identify the priority thrusts of his administration, at least on its first 100 days in office.

In the Cabinet meeting at Malacañang Palace, President Rody made this off-the-cuff pronouncement that he is sending newly appointed Health Secretary Paulyn Ubial to Cuba to study that country's highly successful healthcare program.

I had no idea what President Rody was talking about. The first thing that came to my mind was the campaign attacks against the alleged communist links of the former Davao City mayor. I have fairly little knowledge about Cuba other than it has long been under communist rule by a dictator named Fidel Castro. It is a large Caribbean island nation located close to the United States.

Fascinated by this revelation of President Rody of the Cuban model of public health care, I browsed through Google.com. Cubans call their system medicina general integral (MGI, comprehensive general medicine). Its programs focus on preventing people from getting diseases and treating them as rapidly as possible.

Even the director-general of the World Health Organization, Margaret Chan, was all praises for Cuba's healthcare system. She commented after her visit to Havana in July, 2014: "Cuba is the only country that has a healthcare system closely linked to research and development. This is the way to go, because human health can only improve through innovation… We sincerely hope that all of the world's inhabitants will have access to quality medical services, as they do in Cuba."

According to the WHO, over 100 countries are looking to the example of Cuba, which has the same 78-year life expectancy of the US while spending 4 percent per person annually of what the US does. The most revolutionary idea of the Cuban system is doctors living in the neighborhood they serve. "A doctor-nurse team is part of the community and know their patients well because they live at (or near) the consultorio (doctors' office) where they work. Consultorios are backed up by policlínicos which provide services during off-hours and offer a wide variety of specialists. Policlínicos coordinate community health delivery and link nationally designed health initiatives with their local implementation."

Budget Secretary Benjamin Diokno noted President Rody's plan to replicate Cuba's healthcare model is doable in the Philippine context.

Aside from Davao City, the DBM chief noted the province of Albay, under the leadership of its former governor and now Congressman Joey Salceda, has achieved a high level of efficiency from primary to tertiary hospital care.

Now as the country's Chief Executive, President Rody showed how his unorthodox and revolutionary manner of doing things made him one of the most successful mayors in the Philippines. During his years serving as Davao City mayor, he had effectively addressed local health concerns of his constituents.

The President announced his plan to funnel the ₱35-billion annual earnings of the state-owned Philippine Amusement and Gaming Corp. to the Department of Health. It will fund essential healthcare and the pharmaceutical needs of Filipinos, particularly the poor. Because as President Rody succinctly put it, "people who cannot buy medicines will die."

And this brings us back to the Cheaper Medicines Act, now spanning three administrations. I remember that in 2009, then president and now Pampanga Rep. Gloria Macapagal Arroyo used her favorite "moral suasion" to call on pharmaceutical firms to slash the prices of their essential medicines by 50 percent.

Actually, even those who earn more than the poverty threshold of ₱9,140/per month would see their capacity to spend for basic things greatly diminished when they are on maintenance drugs. This is based on personal experience, as I am also on maintenance medicine.

Being close to my heart, I also wrote opinion columns about this topic in the past, particularly because it became apparent that this appeal of Mrs. Arroyo was being met with strong resistance from giant multinational companies (MNCs). One big MNC on pharmaceutical products even faced Senate probe for the release of its so-called discount cards which was seen as a mere marketing strategy that provide calibrated discounts to their medicine products dispensed only by doctors being served by their company's medical representatives.

As consumers of maintenance drugs who must take these medication on life-time basis, we count on the Cheaper Medicines Law to cushion us from inflation. The government needs to review the marketing campaign of MNCs at the level of the doctors, who are closest to the patients. Maybe this is one of the missing links to the successful implementation of the Cheaper Medicines Act.

This is despite the greater efforts by the previous Aquino administration, which focused on Universal Healthcare and even strengthened PhilHealth services with the support of the funds coming from the Sin Tax law.

Filipinos getting full access to cheaper medicines will not happen without the cooperation of everyone. Despite the Generics Law that has given patients cheaper priced medicines that they can afford but with same efficacy, multinational brands continue to dominate the market, particularly for essential medicines. However, these profit-motivated MNCs don't see the need to really bring down their prices to the affordable level of lower income patients.

I remember asking former Secretary Janette Garin when she was our Kapihan sa Manila Bay guest in January this year about the sudden rise of price of a MNC branded medicine that I was taking. Believe me, I know and feel the frustration of Filipinos who are on maintenance drugs.

But I see hope in President Rody's forward-looking directive to look into the Cuban model. We can only conclude that change is indeed coming – and it's coming fast. – philSTAR

Philippines v. China: Q. and A. on South China Sea Court Case

The Chinese Coast Guard confronted Filipino fishermen near Scarborough Shoal in the South China Sea last year. Credit Renato Etac/Associated Press

An international court in The Hague is scheduled to release a landmark ruling on Tuesday in a dispute between China and the Philippines over the South China Sea. Here are answers to six questions about the case.

What is this case about?

The Philippines filed a complaint in 2013 after China took control of a reef about 140 miles from the Philippine coast. It accused China of violating international law by interfering with fishing, endangering ships and failing to protect the marine environment at the reef, known as Scarborough Shoal.

But the Philippines also went further, asking an international tribunal to reject China’s claim to sovereignty over waters within a “nine-dash line” that appears on official Chinese maps. The dashes encircle as much as 90 percent of the South China Sea, an area the size of Mexico that is vital to global trade and rich in natural resources, including potential oil deposits.

The Philippines also accused China of violating international law by dredging sand to build artificial islands out of several reefs in the South China Sea, including one it says is in its waters.

What does international law say?

The Philippines filed its complaint under the United Nations Convention on the Law of the Sea, which lays out rules for the use of the world’s oceans. The treaty came into force in 1994 and has been ratified by both China and the Philippines, as well as 165 other states and the European Union.

Islands are colored by occupying country: China, the Philippines, Malaysia, Vietnam or Taiwan. Lines in the same colors show the extent of territorial claims. Photo: New York times

The treaty says a country has sovereignty over waters extending 12 nautical miles from its coast, and control over economic activities in waters on its continental shelf and up to 200 nautical miles from its coast, including fishing, mining, oil exploration and the construction of artificial islands.

The treaty sets out detailed rules for defining these zones, what to do when two nations’ zones overlap and how to resolve disputes.

China’s nine-dash line includes waters beyond these zones, and Beijing has cited what it calls historical evidence to support it.

The treaty does include exceptions for historic rights, but the Philippines says China’s claims in the South China Sea do not qualify.

The Obama administration has backed the Philippines on this question, saying historic rights can apply only to bays or other coastal waters, not the high seas. But the United States has not ratified the treaty.

China’s reclamation of Mischief Reef in the South China Sea. China has conducted enormous dredging operations to transform reefs into artificial islands with military runways. Credit Pool photo by Ritchie B. Tongo

What does China say?

China has boycotted the international tribunal that was set up to hear the case.

It says the panel of five judges and legal experts has no jurisdiction because the sovereignty of reefs, rocks and islands in the South China Sea is disputed.

The argument goes like this: If you don’t know what countries these specks of land belong to, you can’t use the treaty to draw territorial and economic zones in the waters around them. And the judges can’t decide whom the specks of land belong to because the Law of the Sea deals only with maritime disputes, not land disputes.

China also says it reached a deal with the Philippines years ago to settle disputes in the South China Sea through negotiations. That agreement, it says, prohibited the Philippines from taking the case to the tribunal.

Why is this case important?

In addition to China and the Philippines, five states — Brunei, Indonesia, Malaysia, Taiwan and Vietnam — claim parts of the South China Sea. Their differences sometimes escalate into skirmishes, and people are worried that an incident could erupt into a broader conflict.

United States Navy sailors monitoring radar and other instruments aboard the guided-missile cruiser Chancellorsville in the South China Sea. Credit Bryan Denton for The New York Times

Tuesday’s ruling will be the first time an international tribunal has ruled on any of these disputes. It could set a precedent or establish principles for easing tensions. It could also alter the political dynamic in the region, restraining some countries while emboldening others.

China probably has the most at stake. Since the case was filed, it has conducted enormous dredging operations to transform reefs into artificial islands with military runways and naval harbors, over the objections of countries with competing claims as well as those of the United States. The tribunal could declare some of this construction illegal, or it could leave the question unresolved.

Either way, China’s response to the ruling will be seen as a test of what kind of country it is becoming — a global leader committed to international law and institutions, or a superpower willing to take unilateral action against its neighbors.

Why does the Chinese government care so much about the South China Sea?

Chinese military strategists say China needs to control the sea to defend itself, to push the United States out of the Western Pacific and to become a naval power.

China also depends on the shipping routes that go through the sea, and is eager to lay claim to oil and other resources to fuel its voracious economy.

There are domestic political factors, too. Chinese schoolchildren are taught that the sea has belonged to China since ancient times, and President Xi Jinping has used the construction of artificial islands in the sea to fan nationalist sentiment and strengthen his authority over the Chinese military.

What happens if the tribunal rules against China?

The Chinese government has said it will not “accept, recognize or execute” the decision.

While the ruling will be binding, the tribunal has no power to enforce it, and no one expects that China will volunteer to dismantle its artificial islands and return the sand to the ocean floor.

But the United States, the region’s dominant military power, could use the decision to justify more naval patrols in the area, to recruit new allies and give more support to old ones, and to rally world opinion against Beijing’s behavior.

While it will denounce the ruling in public, the Chinese leadership may decide to back off and begin easing tensions with neighboring countries. It could start with the new Philippine president, Rodrigo Duterte, who says he wants to improve relations with China and has proposed talks on maritime cooperation.

But some analysts are worried that President Xi will respond instead with defiance.

Chinese diplomats have already suggested China might withdraw from the Convention on the Law of the Sea.

It could also begin transforming the reef at the center of the dispute, Scarborough Shoal, into a military outpost, risking a clash with the Philippines, an American ally.

And it might try to impose a new “air defense identification zone” over part of the South China Sea, asserting the right to identify, monitor and take military action against planes in the area.

Bryant Rousseau contributed research. A version of this article appears in print on July 11, 2016, on page A8 of the New York edition with the headline: Philippines v. China: Ruling Will Be a First on South China Sea.

The New York Times

SolGen Calida to PNP: I will defend police in war on drugs

Solicitor General Jose Calida slammed Senator and former Justice Secretary Leila De Lima for allegedly planning to launch an “investigation in aid of media mileage” and not “in aid of legislation.” Jose Calida, Facebook; Philstar.com

Metro Manila (CNN Philippines) – Solicitor General Jose Calida said Monday police officers facing harassment cases in connection with the administration’s war on drugs can expect legal support from his office.

Calida made the statement after meeting Philippine National Police (PNP) chief Ronald Dela Rosa at Camp Crame. He said he will not allow anyone to obstruct the government's efforts to stop the drug menace in the country.

"I am here to encourage the PNP not to be afraid of any Congressional or Senate investigations,” Calida said. “We will defend them. If there is a fiscalizer, I am the neutralizer and the defender of the PNP.”

Calida was responding to a call by Sen. Leila De Lima, a former Justice Secretary, for a probe on the series of drug-related killings by the police.

De Lima has expressed alarm over daily reports of suspected drug dealers and even users killed in police operations. According to PNP, there were 103 suspects killed and 5,845 arrested from May 10 to July 3 in anti-illegal drugs operations.

< video >

"What happened during her tenure?” Calida said. Answering his own question, he said, “Lalong lumakas ang proliferation of drugs even in her own turf."

[Translation: The proliferation of drugs worsened even in her own turf.]

He said De Lima apparently has not done enough to stop the drug menace as Justice Secretary in charge of the National Bureau of Investigation, the prosecution service and the correctional institutions. He said that the Senate probe on the killings is not principally intended to help stop drug trafficking.

“Hindi po ito (This is not an) investigation in aid of legislation. To me, I think, it is investigation in aid of media mileage,” he said.

“This is a serious situation now, hindi papogihan sa (it’s not to look good in the) media,” he said. “The police are risking their lives. It is the height of naiveté for Secretary De Lima, who apparently does not know the mind of a crazed drug addict."

He said there is always a “presumption of regularity” in all police operations, that's why De Lima's call for a hearing is based purely on hearsay. Presumption of regularity implies authorities follow the law, including police rules of engagement by shooting suspects only in self-defense.

Calida said during De Lima’s term as Justice Secretary, illegal drugs proliferated especially in the New Bilibid Prison. He said his office is considering filing charges against De Lima in connection with that. – CNN Philippines

Mysterious Blast in Philippines Fuels Rodrigo Duterte's 'Hatred' of U.S.

Philippine President Rodrigo Duterte’s “hatred” for the U.S. is linked to a blast incident in a Davao City hotel room in 2002 involving a criminal suspect whom the American agents spirited away to Manila and then to the U.S. without the permission of the local government – Photo: AsiaTimes

MANILA — For more than a decade, a mysterious explosion at the Evergreen Hotel in Davao City has been a footnote in the long, checkered history between the Philippines and its former colonial master, the United States. But among those who never let it go was the city’s mayor, Rodrigo Duterte — who is now poised to become the Philippines’ new president.

In an interview last year before he announced his candidacy, Mr. Duterte went so far as to acknowledge “hatred” for the United States stemming from the obscure episode, when an American named Michael Terrence Meiring was charged with possession of explosives but managed to flee the Philippines.

Mr. Meiring called himself a treasure hunter and joked about being with the C.I.A., meaning “Christ in Action.” He told the hotel staff not to touch a metal box in his room, apparently with good reason. On May 16, 2002, the box exploded, mangling his legs and damaging the hotel.

But three days later, despite severe injuries and the charges against him, Mr. Meiring vanished from his hospital room. Philippine officials later said that men waving F.B.I. badges had taken him in the dark of night and flown him out of the country without their permission.

Mr. Duterte expressed outrage that the United States would help a criminal suspect leave the country without regard to Philippine law. He also fanned speculation that Mr. Meiring was involved in covert operations conducted by the United States in the Philippines.

Fourteen years later and scheduled to be sworn in as president on June 30, Mr. Duterte is still angry.

Last month, he threatened to cut ties with Washington in response to critical comments from the United States ambassador to the Philippines, Philip S. Goldberg. “Go ahead and sever it,” Mr. Duterte snapped, referring to diplomatic relations. His spokesman, Peter Laviña, explained that Mr. Duterte’s hostility originated with the Meiring case.

“Mayor Duterte has his own personal experience in Davao,” Mr. Laviña said in a television interview. “We were able to capture a bomber, a suspect in the bombing in Davao. He was an American. He was spirited away by the U.S. Embassy. I think that’s when the bad relations started.”

The Philippines has long been the United States’ closest ally in Southeast Asia. The two nations have a mutual defense pact, and the Philippines recently agreed to allow the Pentagon to station troops and weapons at bases in the country. For more than a decade, American forces have also trained and advised Philippine soldiers hunting the Abu Sayyaf, a gang of rebel kidnappers operating in the southern islands that recently swore allegiance to the Islamic State.

Davao City is the most populous city in the south, and a pair of bombings there killed 38 people in 2003. But Mr. Duterte, its mayor for the past 20 years, has long expressed skepticism about the American military presence. In 2013, he said he had blocked an American proposal to base drones at Davao City’s old airport, citing his concerns about the Meiring case.

“I do not want it,” he was quoted saying in local news media. “I do not want trouble and killings. They will only add to the problem.”

Aides to Mr. Duterte did not respond to requests for comment. But in the interview in which he discussed the case last year, Mr. Duterte said that his “hatred” for the United States was a “personal” sentiment that he could set aside in the national interest. He also said, though, that his anger over the Meiring case had not diminished.

A spokesman for the United States Embassy, Kurt Hoyer, said it would have no comment on the drone proposal, the Meiring affair, or how the episode might affect relations with the incoming president. He said an embassy press statement in 2002 was the final word on the case, but was unable to provide it.

In the statement, according to published reports, the embassy acknowledged that F.B.I. agents went to the Evergreen Hotel to investigate the explosion but “categorically” denied that the agency “had any role in Mr. Meiring’s departure.”

The Meiring affair has long been the subject of conspiracy theories in the Philippines. Much remains unexplained, including why there were explosives in Mr. Meiring’s room and who mounted the operation that helped him escape.

“Why should the U.S. take him out of the country? That’s the puzzle,” said a former high-ranking Philippine intelligence official who declined to be identified because he was not directly involved in the case.

According to news reports, Mr. Meiring had been going to Davao City on the island of Mindanao for many years, usually staying in the same suite at the Evergreen. He had documents allowing him to hunt for treasure — which was believed to have been left by occupying Japanese forces during World War II — and an identity card allowing him to travel in territory held by separatist Islamic rebels.

At the time, the southern Philippines was plagued by armed conflict with the rebels and occasional bombings, including a blast a month earlier that killed 15 people in the city of General Santos, about 90 miles south of Davao City.

When the police first questioned Mr. Meiring about the explosion at the Evergreen, he said someone had thrown a grenade into his room. But investigators quickly found conclusive evidence that the blast was caused by explosives in his room, according to the police file, including the remains of two 6-volt batteries, an electric blasting cap and a circuit board.

Doctors amputated one of Mr. Meiring’s legs, but he was taken from the hospital and flown from Davao by charter plane, the police said at the time. He received medical treatment in Manila and left the country soon after.

Witnesses said that the men who took him from the hospital displayed F.B.I. badges. The hospital’s owner told reporters that he agreed to release Mr. Meiring despite his injuries after American officials promised to issue a work visa for his daughter, a nurse.

Mr. Meiring returned to the United States, where he also went by the family name Vande-Meer. He died in 2012 at 76, public records show, without ever telling his story publicly. His former wife, Angela, contacted by phone, declined to discuss his time in the Philippines.

A Davao City court official, who had not been informed of Mr. Meiring’s death, said there was still an outstanding warrant for his arrest on charges of illegal possession of explosives and reckless imprudence resulting in damage to property.

There has long been unsubstantiated speculation in the Philippines that Mr. Meiring was responsible for bombings in the turbulent region as part of a covert American operation aimed at gathering intelligence on the rebels or prompting the Philippine government to approve greater United States military assistance.

But a former C.I.A. official who served in the Philippines discounted the possibility that Mr. Meiring was a C.I.A. operative. While the former official was not familiar with details of the Meiring case, he said keeping explosives in his hotel room and joking about “Christ in Action” would be obvious violations of agency protocol.

Ramon Casiple, the executive director of the Institute for Political and Electoral Reform, a nonprofit organization promoting democracy in the Philippines, said the burden would be on Washington to win Mr. Duterte’s trust, perhaps starting with an explanation of what happened at the Evergreen Hotel.

“He will try to improve relations with the U.S. but it is really more of the U.S. building relations with him,” Mr. Casiple said. “As far as he is concerned, the U.S. record in Mindanao is not that good.”

A version of this article appears in print on May 14, 2016, on page A6 of the New York edition with the headline: Mysterious Blast in Philippines Shaped Presumptive Leader’s View of U.S.

-       The New York Times

 

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