Changes in the BPO landscape

The year has not yet ended but I believe that the most used word in the country this year is “change.” Now, how you view change, whether as something to be feared or as a challenge to improve, will determine how you respond to it and how it, in turn, will affect you.

One industry has charted its own course this year amid this sea of change. The Information Technology and Business Process Management industry or IT-BPM has thrived in the last 20 years to become one of the country’s primary economic drivers with more than one million full-time employees (FTE) and more than $22 billion in revenue as of 2015. The industry is on track to meet its 2016 goal of 1.3 million direct employees and $25 billion in revenue.

However, the IT-BPM industry continues to face dramatic changes and opportunities happening in the BPO industry internationally and locally.

Internationally, the changes and opportunities can be grouped into megatrends. The Shared Services & Outsourcing Network’s (SSON) 2016 Mega Trends report identified five megatrends, or five strategies, that shared service centers (SSCs) globally are adopting to varying degrees: (1) delivery of dramatic value beyond cost savings, (2) employment of eight key ‘value-driver’ strategies, (3) skillset development supporting value-adding services, (4) use of data analytics (transforming data into useful information for decision making), and (5) emergence of Robotic Process Automation (RPA).

What interests me in particular are the eight key value-drivers that SSCs are implementing: (1) data analytics, (2) digital disruption, (3) global business services, (4) global talent management & work force planning, (5) organizational redesign, (6) operational agility, (7) process excellence, and (8) RPA.

In my work with various SSC clients, I found that SSCs that have applied at least half of these value-drivers have experienced tremendous benefits in terms of efficiency, effectiveness and cost savings.

What I also noticed is that these megatrends similarly reflect the results that came out in Shared Services: Multiplying Success (PwC’s 2016 global biennial survey of the global shared services industry), where a total of 75 companies from various industries in more than 20 countries representing 300 SSCs participated. What the PwC survey showed is that shared service business models have to continuously improve to respond to global economic and political trends and social changes. 

The survey revealed that SSCs are still key drivers for increasing efficiency and lowering costs for organizations. Companies have tasked their SSCs to increase their levels of efficiency and continuously improve effectiveness. This is because full efficiency has not been achieved and there is still room to improve.

Similarly, Quality and Continuous Improvement programs have been widely adopted in SSCs but their full benefits are still to be realized. In spite of this, companies that have implemented Continuous Improvement Process (CIP) have seen significant process improvements and cost reductions.

Companies are now implementing a multifunctional service strategy. This means that SSCs are changing or transforming themselves into multifunctional service centers that operate with global focus rather than just the traditional Single Tower concept (or SSCs with only a single function). Organizations are expanding their process scope, consolidating their functions geographically to bring them into one operational framework. 

Improved corporate governance and controls are areas where SSCs have contributed immensely to their organizations as regulatory requirements and reporting have increased in complexity and in frequency.

Another insight from the survey is that technology has been one of the major drivers in the success of SSCs. SSC centers globally are investing in new and upcoming technologies. RPA, predictive analytics, cognitive platforms, and smart contracts are being developed to improve the performance, efficiency, and effectiveness of SSCs. Even the skills of shared services employees are becoming more integrated. A new generation of ‘digital natives’ or the ‘millennial’ employees is starting to dominate the SSC workplace.

So how are these international developments affecting the Philippines IT-BPM industry? The short answer is -- a lot.

In the Philippines, the IT and Business Process Association of the Philippines or IBPAP has supported the growth of the IT-BPM industry since 2004. On Oct. 28, IBPAP will be presenting its 2022 road map during its 2016 International IT-BPM Summit. According to IBPAP CEO Benedict Hernandez, just like the 2010 and 2016 road maps, the 2022 road map is a comprehensive plan that will propel the industry to the next level and address pressing concerns regarding talent, next-wave cities development, private and government support, academe support, and emerging technology trends.

What is unique about this road map is the inclusion of the detailed visions, plans and targets of the six associations or verticals that comprise IBPAP. These are the Animation Council of the Philippines, Inc. (ACPI), Contact Center Association of the Philippines (CCAP), Game Developers Association of the Philippines (GDAP), Global In-house Centers Council (GICC), Healthcare Information Management Association of the Philippines (HIMAP), and Philippine Software Industry Association (PSIA).

I am very interested to know how IBPAP plans to penetrate and take advantage of the full potentials in health care, gaming, software development, animation, and multimedia.

Now, with all the detailed plans for the IT-BPM industry, it would be easy to forget that the 2022 road map also addresses the emerging developments in the global offshoring industry.

The road map indicates that IBPAP and its members are aware that SSCs located in other territories are transforming their operations to be more relevant and integrated into their global operations. This means that Philippine-based SSCs must also transform and make their operations an integral part of the company’s business operations and strategic business decision-making process.

Fortunately for the Philippines, I see locally based SSCs already transforming their operations to be more efficient and effective with the goal of being the “knowledge center” of their company’s global operations.

I believe the IT-BPM industry will continue to thrive and take advantage of the current environment of change just as it has done in the past 20 years. I still see the Philippines as one of the top destinations for companies to set up their SSCs.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of PricewaterhouseCoopers Consulting Services Philippines Co. Ltd. The firm will not accept any liability arising from the article.

Victor Ona is a senior manager belonging to the Management Consulting practice of PricewaterhouseCoopers Consulting Services Philippines Co. Ltd., a Philippine member firm of the PwC network. 

+63 (2) 845 2728 ext. 3236

victor.gabriel.ona@ph.pwc.com

source:  Businessworld

EDITORIAL: Can’t win?

The second paragraph of the second section of Article XII of the Constitution is an explicit order: “The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.” The power to reserve exclusivity is patrimonial in nature; it is based on the state’s responsibility to “conserve and develop our patrimony.” But this power is itself based on a more basic responsibility: that of the military, acting on behalf of the people, “to secure the sovereignty of the State and the integrity of the national territory.”

The landmark decision of the Permanent Court of Arbitration in The Hague on the suit lodged by the Philippines against China was a sweeping victory for the Philippines. Among other findings, it held, without pronouncing on the question of sovereignty over Scarborough or Panatag Shoal, that China had violated the Philippines’ rights and freedoms within its exclusive economic zone, by preventing Filipino fishermen from fishing in or around the shoal. The arbitral court held that both China and the Philippines enjoy “traditional fishing rights” in the area which were not extinguished when the United Nations Convention on the Law of the Sea took effect.

On Oct. 10, just about three months after the arbitral court released its decision, President Duterte said something which effectively threw this hard-earned victory out the window. Addressing residents of Lamitan, Basilan, the Commander in Chief touched on the country’s relations with China.

“I have a good feeling that we will be OK with them. But first let’s not touch the Scarborough Shoal issue because we cannot win that,” he said. “Even if we get angry, we’ll just be putting on airs. We can’t beat [China]. We’ll ask them to allow our fishermen to [return] to their traditional fishing ground in Scarborough.”

In truth, this is not new. Mr. Duterte has said before that he will ask Beijing to allow Filipino fishermen to return to Scarborough. If this return takes place, it will mark the first time that the fishermen from Zambales and other nearby provinces will be able to fish in the area since 2012. This is a victory, too, and for the fishermen it could not have come any sooner.

But what made the President’s latest remarks controversial were the assumptions he brought to the subject. First, a touchy-feely approach to foreign relations (“good feeling,” “OK”) that seems to prize cordial relations with an emerging superpower over national interest. Second, a defeatist attitude that misrepresents popular sentiment on the South China Sea issue. It is true that, if a military confrontation took place in Scarborough, “we cannot win that.” But popular opinion in the Philippines recognizes that “touching the Scarborough issue” is not in fact limited to the military option alone. As a small player in the regional scene, we must work with our allies, we must exhaust the diplomatic possibilities, we must seek redress from international courts, to fight the bullying. Indeed, that explains the public demonstrations that spontaneously greeted the sweeping legal victory of July 12. The President does not reflect the popular will on the issue, if he fails to “touch” the Scarborough case.

Third, the political leader who has spent his entire career on bravura expressions of crime-fighting and corruption-fighting suggests that “getting angry” is mere theater, because we do not have the resources to match those of China. This is an argument that must be debunked; it is not true that if we get angry with China because it has bullied us, we are only putting on airs.

The arbitral decision is itself proof that even the small and the bullied can put up a fight.

source:  Inquirer

Duterte likens Panatag to a tilapia pond

President Duterte is going to China next week.

He expects to bring home a lot in terms of promised investments and assistance.

In fact, the delivery of the largesse from China has already started. Last week, Malacañang announced the lifting of the embargo on the exports of banana to China and tourists to the Philippines which was imposed when the government of Benigno Aquino III sued in the Arbitral Court in January 2013 to nullify China’s nine-dash line map which included substantial portion of Philippine territory.

Duterte has been talking a lot about China financing the building of rehabilitation centers for drug addicts in Fort Magsaysay in Nueva Ecija.

But topmost in his agenda is for the Filipino fishermen to be able fish again in Scarborough Shoal, 124 nautical miles from Zambales, which has been in control of China since April 2012 due to the mishandling of the situation by Aquino and Foreign Secretary Albert del Rosario.

The loss of Scarborough shoal is the legacy of Aquino to the Filipino people. Yet many hail him   for winning the case in the Arbitral Court.

The Arbitral Court said that Scarborough Shoal is a rock and is not entitled to a 200 nautical mile economic exclusive zone.

The Arbitral Court further said that Scarborough Shoal has been a traditional fishing ground of Filipino, Chinese, Vietnamese as well as fishermen of other nationalities and should continue to be so.

China’s blocking of Filipino fishermen’s access to the shoal, the Arbitral Court further said.

The Duterte government has agreed to China’s condition that any talk on Scarborough and the Spratlys should not mention the Arbitral Court decision.

But at the same time, Duterte seems to have downgraded, not only the value of the Arbitral Court decision, but also the importance of Scarborough Shoal, which he compares to a tilapia fishpond. Here are his statements:

In a speech last October 4 in the Sulong Pilipinas Convention he said: “Here is the arbitral judgment that we are entitled to the entitlements, it is not a territorial thing. Twelve miles lang iyan eh, that’s it. Iyong 200 miles, parang fishpond iyan o. Philippines ito iyong fishpond mo, kanya-kanya tayong fishpond. Itong pinag-awayan dito, iyong fishpond, iyong mga tilapia sa loob pati iyong... kung may oil diyan. This is a territorial. So we won, right, but what do you want? There are two ways of doing it. We seize it forcefully, or we talk? Mamili kayo diyan. Eh kung gusto niyo iyan, eh okay lang naman.”

He repeated this last Tuesday during the mass oath taking of the officials of the League of Municipalities of the Philippines: “May arbitral ruling tayo, we won. We are entitled to the entitlements of that part of the South China Sea na atin.
Entitlements, it is not territory, the territory is 12 miles. Beyond that is iyong ating… tinatawag natin parang fish pond. Lahat naman tayo binigyang ng fish pond o, iyan inyo, inyo Philippines. You have a, count it from the outermost line then do a line there and that’s yours. Lahat tayo may ganoong. But China is claimed it to be part of their historic sovereign territory. Okay tayo ang nagfile, panalo tayo. Okay magbotohan tayo. I will insist, pag ayaw nilang ibigay atakihin ko sila, I’ll start war.

Mapahiya tayo pag hindi. O ito, o sino ngayon magsabi ito, birahan natin bukas. Padala ko yung Navy doon bukas. I’ll send the gray ships there. It will be massacre, and to top it all the battle ground would be Palawan…”

The President is getting confused. He is talking of sending ships to Scarborough Shoal, which is in Zambales, and he talks of Palawan as battle ground.

In Lamitan also last Tuesday, he was clearer with his decision: “Wag na muna nating pakialamanan iyang Scarborough, kasi hindi natin kaya eh. Magalit man tayo hangin lang, hindi natin kaya. So mag-usap muna lang tayo, sabihin ko na lang na ipabalik mo lang iyang mga kapatid kong Pilipino mangisda saka mag-usap tayo.”

With the Philippine President asking the permission of China to allow Filipino fishermen in Scarborough Shoal, isn’t it a recognition of China’s sovereignty over the disputed area?

***

Blog: www.ellentordesillas.com

E-mail: ellentordesillas@gmail.com

source:  Malaya Column of Ellen Tordesillas

Only US can stop China – carpio

ONLY the United States can stop China’s grip in the West Philippine Sea (South China Sea), Senior Associate Justice Antonio Carpio said amid President Rodrigo Duterte’s anti-American stance.

At the close of joint exercises between the Philippine and US marines on Wednesday, Carpio said the Philippines should continue joint patrols with the US to protect its exclusive economic zone (EEZ) as mandated by the 1987 Constitution.

“There is only one power on earth that can stop the Chinese from poaching in our EEZ. That is the US,” said Carpio who was the guest of honor and speaker at the closing ceremony of the 33rd Philippines Amphibious Landing Exercise at Fort Bonifacio in Taguig late Tuesday afternoon.

Article 12, Section 2 of the Constitution states that: “The State shall protect the nation’s marine wealth in its
archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.”

Also on Tuesday, Sen. Panfilo Lacson said the country would not be able to survive external threats without the US, disputing a statement by Defense Secretary Delfin Lorenzana that the country could do without Washington’s military support.

President Duterte has been attacking the US over its criticism of his anti-drug war, and said he would seek closer ties with China and Russia.

Malampaya attack feared

Carpio said the country would lose billions of pesos if the Malampaya natural gas project off Palawan, Metro Manila’s power source, is attacked. The only way to protect it is to send patrol ships in the disputed waters, he said.

“The Philippines must protect its EEZ. That’s the mandate of the Constitution … if a foreign fishing vessel will poach on our waters in the EEZ, the only way we can stop them is to have a patrol there, there’s no other way,” he added.

Col. Edgard Arevalo, chief of the Armed Forces of the Philippines (AFP) Public Affairs Office, said Task Force Malampaya has been patrolling the area.

“The task force, including our headquarters Naval Forces West and Westcom (Western Command) frequent Malampaya. So in the process they are on the lookout for any threats to the continuous operation of Malampaya,” he said.

Asked to comment on Carpio’s statement that the AFP has the duty to patrol the country’s EEZ, Arevalo said: “Everybody agrees to the Constitution because that is the supreme law of the land.”

Still, no war games
On Wednesday, President Duterte stood firm on his decision to end the annual joint military exercises between the Philippine and the United States.

Called “Balikatan,” meaning shoulder to shoulder, the exercises have been the cornerstone of Philippine-US military relations since the US bases in the Philippines shut down more than two decades ago.

In his speech during the 115th anniversary of the Philippine Coast Guard on Wednesday, Duterte said he had told the Defense Secretary Lorenzana “not to prepare anymore” for next year’s military exercises with the US.
“I don’t want it anymore,” he said.

The President reiterated he would maintain the military alliance with the US while the Philippines charts an “independent” course.

“I’ll chart an independent foreign policy. We will not break our alliances … But we need not really, you know, break or abrogate existing treaties because they said it would provide us with the umbrella,” Duterte said.

source:  Manila Times

US vs China: Who matters more?

SOME WORRY that our outspoken President may be unnecessarily antagonizing the United States for our country’s own good, while sounding deliberately gentle with China—in the name of pursuing an “independent foreign policy.” This piece’s title notwithstanding, I am not about to argue here that we must choose one over the other. It’s fair to say that historically, both of them have helped us, and wronged us as well. In the overall scheme of things, it may not be obvious who has been and who will prospectively be the better friend or worse foe to us Filipinos. It has been argued that our independence would be best asserted by being on good terms with everyone. Indeed, it would be in our best interest as a small country to be seen as impartial in dealing with other countries, particularly the world powers, and in defining our country’s standing in the global community.

Still, I thought it might be interesting to assess and compare the nature of our economic linkages with the two countries, as this looms large in any reckoning of our relationships with either of them. I will steer clear of the political and other dimensions of those relationships, as that would be straying beyond my own area of expertise. On economic relations, the most obvious measures for which we have the data are those pertaining to trade, investments, and overseas remittances.

How important are the United States and China to us as trading partners? Overall, it would appear that they are equally important, as combined exports and imports with each are both in the neighborhood of 13 percent of our total for all countries. The United States is more important to us as an export market, accounting for 15 percent of our total exports in value terms, against China’s 10.9 percent. As source of imports, the reverse is true, with our official figures showing less of our imports (10.8 percent) coming from the United States than from China (16.2 percent). The latter figure is likely to be even higher, given the rampant smuggling of goods into the country, particularly from China. Recently it was reported that China’s data on exports to us are 60 percent higher than our corresponding data on imports from it, indicating the extent of such undocumented imports.

What do we sell to the two countries? Dominating our exports to both (50 percent of our exports to China, and 39 percent to the United States) are electronic products, mostly in the form of intermediate products such as semiconductors and circuit boards. For China, mineral ores are also prominent (14.5 percent), with shiploads of virtual raw earth, mostly nickel ores, being shipped there every week. Rounding up our top five exports to China are chemicals, miscellaneous manufactures and machinery/equipment. For the United States, garments are our second top export (14 percent), followed by coconut oil, miscellaneous manufactures, and ignition wiring sets for motor vehicles. These give us some idea on which industries—hence which types of workers—benefit from our trade with either country, and correspondingly, who would be adversely affected by a cutback in trade, as fallout from possible political conflict. Offhand, it appears that proportionately more workers benefit from our exports to the United States than to China, with labor-intensive manufactures more prominent in our top five exports to the former.

What do we buy from the two countries? Topping our imports from both are electronic products in the form of basic components for further assembly and finished consumer products. These comprise nearly half (48.2 percent) of total imports from the United States against less than a fifth (19.3 percent) from China. Agricultural products in the form of animal feed stuffs, cereals and preparations (including flour), and other food and live animals are prominent imports from the United States, along with industrial machinery and equipment. From China, our other top imports are iron and steel, industrial machinery and equipment, miscellaneous manufactures, and metal products.

As source of foreign direct investments (FDI), the United States is far more important to us than China, accounting for 13 percent of total net FDI inflows in 2015, against China’s negligible 0.01 percent (less than $1 million). In 2014, only 2 percent of total Chinese investments into Asean reportedly went to the Philippines. Chinese Ambassador Zhao Jianhua is reported to have acknowledged that the Philippines invests more in China than China does in the Philippines. Its most visible investments here are in power, shipping and mining. The Chinese government owns a 40-percent stake in the National Grid Corp. of the Philippines, and is also reported to have acquired a controlling stake in Negros Navigation Corp. operating the 2GO Travel lines.

A recent article in the Journal of Political Risk lists some 25 Chinese mining firms known to have investments in the country as of 2012, albeit not officially recorded. It cites investigative media reports portraying Chinese mining companies to be engaged in “improper” and “less than legal” mining operations in the country. On the other hand, US investments in the country have a long history and are much more substantial and varied, spanning the agriculture, industry and services sectors.

As for remittances, Bangko Sentral ng Pilipinas data report that nearly half (43 percent) comes from the United States, and less than 1 percent from China. It would seem from all this that on purely economic terms, we stand to lose more from antagonizing the Americans than the Chinese. But as we’ve stated at the outset, it’s best not to antagonize either. Whether in trade, investments or remittances, we need both—and we need much more.

* * *

cielito.habito@gmail.com

source: 

By: Cielito F. Habito

Philippine Daily Inquirer

Duterte a ‘game changer’ in US-China rivalry

MANILA/HONG KONG -- Just when some of China’s neighbors were seeking to curtail its expansionism, along came Rodrigo R. Duterte.

In less than three months on the job, the 71-year-old Philippine leader has used expletives in talking about US President Barack H. Obama and vowed to end cooperation with the US military in both fighting terrorism and patrolling the disputed South China Sea. He’s moved to boost economic and defense ties with China and Russia.

While Mr. Duterte is unpredictable -- one day calling China “generous” and the next threatening a “bloody” war if Beijing attacked -- his behavior has undermined US efforts to rally nations from Japan to Vietnam to Australia to stand up to China’s military assertiveness.

In doing so, Mr. Duterte risks shifting from the 1951 Philippine-US defense treaty, which has been a bedrock of American influence in the region.

While Mr. Duterte has said he’ll respect the alliance he’s repeatedly stressed the need for an “independent foreign policy” and questioned America’s willingness to intervene if China were to seize territory in the South China Sea.

“This could be the game changer for the South China Sea situation in general and Sino-US regional competition specifically,” said Zhang Baohui, director of the Center for Asian Pacific Studies at Lingnan University in Hong Kong.

“Mr. Duterte’s foreign policy may dramatically shift the geostrategic picture of the region, leaving China in an advantageous position versus the United States.”

One of the biggest benefits for China is the potential for a deal over the South China Sea. Just weeks after Mr. Duterte took office in late June, an international arbitration panel ruled that China’s claims to most of the waterway had no legal basis -- a win for the Philippines in a case brought by Mr. Duterte’s predecessor.

While Mr. Duterte has said he’ll respect the agreement, he’s signaled he’s open to talks with China, the country’s biggest trading partner, and he did not push for the ruling to be mentioned in the communique last week from a summit of Southeast Asian leaders in Laos. Before taking office, he said he’d consider setting aside territorial disagreements to get a Chinese-built railway.

In July, Mr. Duterte sent former President Fidel V. Ramos to Hong Kong to explore common ground with China.

Mr. Ramos later called for a bigger role for the Philippines under China’s plan to link ports and other trading hubs throughout Asia to Europe.

‘WRONG MESSAGE’
Chinese Foreign Ministry spokeswoman Hua Chunying said Sept. 6 that China is “willing to make a joint effort with the Philippine side to rebuild mutual trust and push forward the bilateral ties.”

“Let’s not be naive about this, there’s no other country that will benefit from our differences with the US and our other allies but China,” said Lauro L. Baja, Jr., a former Foreign Affairs undersecretary who served as the Philippine permanent representative to the United Nations under ex-President Gloria M. Arroyo.

“Whether we like it or not, we’re sending the wrong message to the US, China and our other allies with these actions and pronouncements.”

China claims sovereignty over all features that lie within a nine-dash line drawn on a 1940s map enclosing more than 80% of the South China Sea. It says that gives it the right to interdict military ships close to its territory -- a position the US opposes. Fu Ying, who chairs the Foreign Affairs Committee of China’s top lawmaking body, this month framed US-China tensions in the South China Sea as a fight over the freedom of navigation for naval warships and other non-commercial vessels within the 200 nautical mile exclusive economic zones of coastal states.

“The Chinese want the South China Sea to become a Chinese strait, with control of the maritime space and the air space above it,” said Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute in Canberra.

“That is the long term game, and flipping Mr. Duterte over to Beijing’s side is part of the play.”

China’s land reclamation and military buildup in the waters has in recent years pushed some neighbors closer to the US The Obama administration has boosted military cooperation with nations such as Vietnam, the Philippines, Singapore, and Japan.

Still, at the summit last week in Laos, a spat with Mr. Obama over Mr. Duterte’s war on drugs and the thousands of deaths it has caused overshadowed any criticism of China.

“That’s a very bad scenario,” said Hideki Makihara, a senior lawmaker in Japan’s ruling Liberal Democratic Party, referring to a potential Philippine strategic alignment with China.

In that case, “at least we need Vietnam, Malaysia and other countries surrounding the South China Sea in our group,” he said in an interview this week in Tokyo.

BACKLASH RISK
For now, US officials are emphasizing the benefits of defense ties with the Philippines. “We’ve got a wide range of shared concerns and shared interests, and the United States and the Philippines have been able to work effectively together in a variety of areas to advance our mutual interests,” White House press secretary Josh Earnest said Sept. 12.

But a shift toward China may be difficult for Mr. Duterte to sustain. If Beijing refuses to make any tangible concessions on the South China Sea -- particularly over fishing resources at the disputed Scarborough Shoal -- Mr. Duterte may face a backlash at home, according to Richard Javad F. Heydarian, an assistant political science professor at De La Salle University in Manila.

“This is precisely why security relations with the United States will remain indispensable for the Philippines,” Mr. Richard Javad Heydarian wrote in an article last week for the Washington-based Asia Maritime Transparency Initiative.

Still, the US can no longer expect the same level of strategic deference and diplomatic support.

“This is the new normal in Philippine-US relations.” -- Bloomberg

China says no South China Sea at G-20, US urges transparency

A senior Chinese diplomat made clear Monday that Beijing wants next month's meeting of leaders of the Group of 20 major economies to avoid political issues such as its territorial disputes with its neighbors in the South China Sea.

Deputy Foreign Minister Li Baoding said China wants to avoid sensitive diplomatic issues at the Sept. 4-5 summit that it is hosting in the eastern resort city Hangzhou.

Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1

The consensus among members is to "focus on economic development and not be distracted by other parties," Li said when asked about territorial disputes in the South China Sea.

"The Hangzhou summit must focus on economic issues," Li said. "This is what people want to talk about most at the summit."

Li gave similar responses to questions about China's opposition to South Korea's deployment of a U.S. missile defense system.

A desire to avoid a showdown at the G-20 summit was seen by some as moderating China's response to the July 12 ruling by an international arbitration panel in The Hague, Netherlands, that invalidated China's maritime claims to virtually the entire South China Sea.

However, speculation has also risen that China might make even more assertive moves after the meeting, including possibly launching reclamation projects in new areas or declaring an air defense identification zone over the crucial waterbody.

___

Duterte says he's taking a softer approach in dispute with China

Philippine President Rodrigo Duterte said Friday he is adopting a softer approach in resolving the long-simmering disputes with China in the South China Sea. "We're not in a hurry to wage war, we're in a hurry to talk."

Duterte's special envoy to China, former President Fidel Ramos, returned to Manila on Friday after meeting with Chinese intermediaries in Hong Kong to pave the way for possible talks in Beijing.

Ramos told reporters that China welcomed him to visit Beijing for discussions in the wake of last month's international arbitration panel's ruling in favor of the Philippines over China's South China Sea maritime claims.

The arbitration case was brought by Duterte's predecessor, and Duterte has been lukewarm in his support for the action.

Ramos said in a statement that he met in Hong Kong with the Chinese legislature's foreign affairs chief, Fu Ying, and a leading government-backed scholar on the dispute, and agreed on the need to reduce tensions through talks.

Ramos "expressed the Philippine government's desire to hold formal discussions with the Chinese government on issues of mutual concern and interest at the appropriate time to explore pathways to peace and cooperation," the statement said.

However, Ramos told reporters at a brief news conference that the ruling had not been directly discussed and gave no indication of when the Beijing talks might be held and suggested another negotiator might take his place.

___

Japan, Philippine diplomats urge restraint from China

The top diplomats from Japan and the Philippines urged China on Thursday to avoid intimidating actions and follow the rule of law in disputed waters.

Foreign Secretary Perfecto Yasay Jr. and Japanese counterpart Fumio Kishida made the call after meeting in southern Davao city, where they discussed their countries' territorial rifts with China, including Tokyo's help in providing patrol vessels to the Philippines, and enhancing strategic ties. Kishida later met Duterte.

"Maritime order based on the rule of law is indispensable for regional stability and prosperity," Kishida told reporters, adding that the international community should strive to ensure that long-seething conflicts are resolved peacefully.

"This is the not kind of action that is mandated by international law and if anyone, including China, has any particular claim that it asserts over any particular territory, it must bring this within the concept of a peaceful resolution," Yasay said.

The Philippines challenged the validity of China's claims and aggressive actions in the South China Sea after Chinese government ships took control of disputed Scarborough Shoal following a tense standoff in 2012.

___

US says more military transparency needed

The commander of the U.S. Pacific Fleet said Tuesday the response from Beijing and others to the arbitration panel's ruling had brought no surprises, but much more military transparency is needed to reduce tensions in the region.

Adm. Scott Swift also criticized China-Russia joint naval exercises planned next month in the South China Sea, saying the choice of location was not conducive to "increasing the stability within the region." He also said any decision by China to declare an air defense identification zone over the strategic water body would be "very destabilizing from a military perspective."

Swift was visiting the northern Chinese port of Qingdao as part of efforts to build trust and understanding between the two navies, now locked in a protracted competition for primacy in East Asia, where the U.S. has traditionally been the dominant military power.

Swift cited two examples where a lack of Chinese military transparency was problematic: The still unexplained cancellation by China of a visit by the aircraft carrier USS Stennis earlier this year, and the reason for the construction of new hardened aircraft hangers on China's man-made islands.

"That increases the angst and uncertainty, that lack of transparency, and that is generally destabilizing as opposed to a stabilizing action," Swift said.

source:  By Christopher Bodeen (Associated Press) 

China’s SC clarifies maritime jurisdiction

BEIJING—The Supreme People’s Court (SPC) on Tuesday issued a regulation on judicial interpretation to clarify China’s jurisdiction over its territorial seas.

The explanation provides a clear legal basis for China to protect the maritime order, marine safety and interests, and to exercise integrated management over the country’s jurisdictional seas, said an SPC statement.

The regulation, which takes effect Tuesday, states that Chinese citizens or foreigners will be pursued for criminal liability if they engage in illegal hunting or fishing, or killing endangered wildlife in China’s jurisdictional seas.

An unnamed SPC official said maritime courts across China have handled many maritime cases in recent years. “People’s courts’ jurisdiction over the Diaoyu, Huangyan and Xisha Islands and its adjacent sea areas has never stopped,” the official said.

“Judicial power is an important component of national sovereignty,” said the official, adding, “People’s courts will actively exercise jurisdiction over China’s territorial waters, support administrative departments to legally perform maritime management duties, equally protect the legal rights of Chinese and foreign parties involved and safeguard Chinese territorial sovereignty and maritime interests.”

The judicial explanation, based on Chinese law, the UN Convention on the Law of the Sea and judicial practices, further clarifies China’s maritime jurisdiction, the statement said.
According to the regulation, jurisdictional seas not only include inland waters and territorial seas, but also cover regions including contiguous zones, exclusive economic zones and continental shelves.

The regulation also addresses Chinese citizens or organizations engaged in fishing in fishing zones or the open sea under co-management between China and other countries, according to signed agreements.

The interpretation specifies the standard of conviction and punishment for illegal marine fishing: Those who illegally enter Chinese territorial waters and refuse to leave after being driven away, or who re-enter after being driven away or being fined in the past year, will be considered to have committed “serious” criminal acts and will be fined and sentenced to less than a year of imprisonment, detention or surveillance.

This penalty also applies to those who illegally enter China’s territorial seas to fish but do not engage in “illegal fishing” under the law, it said.

“The explanation offers legal guarantees for marine fishing law enforcement,” defining punishments for fishing without a license in order to encourage legal fishing, said the statement, adding that it also promotes judicial assistance and international cooperation on marine affairs.

In recent years, illegal hunting, fishing and killing of endangered wildlife in China’s jurisdictional seas has happened frequently, and foreign ships and foreigners have entered China’s exclusive economic zones to conduct criminal activities, said the SPC official.
The official said applying the Criminal Law to crack down on crimes in China’s jurisdictional seas is conducive to safeguarding territorial sovereignty and maritime integrity.
DoF counters China’s SC ruling

The Department of Foreign Affairs (DFA)  has countered the Supreme People’s Court (SPC) of China’s regulation yesterday, that warned foreign fishermen with criminal liability if they engage in “illegal hunting or fishing” in China’s jurisdictional seas.

In an effort to undermine the validity of ruling handed down by the Permanent Court of Arbitration which struck Beijing’s claim on 90 percent of South China Sea, the SPC issued this regulation to clarify its power over their territorial sea.
Although the regulation did not mention the contested South China Sea, it made clear that it is based on Chinese law, the UN Convention on the Law of the Sea and judicial practices, a clear descent to the July 12, award.

For the past years, Filipino fishermen have been barred and chased away by Chinese coast guards from fishing in the resource-rich Scarborough Shoal, or Bajo de Masinloc, which has been a traditional fishing ground to both Filipinos and Chinese nationals.
The contested area, just 124 nautical miles away from Zambales, has been guarded by China since.

DFA Assistant Secretary Charles Jose took the stand that this regulation is beyond international law as “the tribunal made it clear in its ruling that Bajo de Masinloc is a common fishing ground.”

He added that “it is important that our fishermen are able to return to Bajo de Masincloc because it is about their livelihood.”

With this,  he assured that in future direct talks with China, “this is definitely a priority issue” that they will have to resolve.

Future bilateral talksIn an earlier interview, Foreign Affairs Secretary Perfecto Yasay Jr. already affirmed that Philippines will soon push through bilateral negotiations with China to settle this matter in the West Philippine Sea.

“We are still being harassed by China. So what we are doing is to  try to work out with China at this point,” he said in a radio interview.

Japan warns China over territorial aggressionMeanwhile, Beijing risks triggering unintended conflict with Asian rivals through its aggressive stance in maritime disputes, Japan warned Tuesday in an annual security assessment.

China’s sweeping claims over the strategic South China Sea, where it has built a series of artificial islands capable of supporting military operations despite overlapping claims from other nations, have stoked international alarm.

The region’s superpower “continues to act in an assertive manner” and its actions “include dangerous acts that could cause unintended consequences,” Tokyo said in a defense white paper.

Beijing is under pressure to respect a UN-backed tribunal’s finding last month that there is no legal basis for its ambitions over the resource-rich South China Sea where the Philippines, Vietnam, Malaysia and others also lay claims.

The white paper said China was “poised to fulfill its unilateral demands without compromise” including efforts “to turn these coercive changes to the status quo into a fait accompli”.
And it again called on Beijing to abide by the ruling of the tribunal, which China has denounced as a fraud.

Japan also expressed concern over increased activity in the East China Sea, where the two countries have competing claims over a group of small uninhabited islets called the Senkaku in Japan and the Diaoyu in China.

“Recently, China has been intensifying activities near the Senkaku Islands, such as its military aircraft flying southward closer to the islands,” it said.

In the year to March 2016, Japan’s air force scrambled jets 571 times against Chinese planes flying near Japanese air space, an increase of 107 from the previous year, it added.
In June Japan accused China of sending a spy ship into its territorial waters as Tokyo conducted a joint exercise with the United States and India.

And last month the two countries were at loggerheads over accusations Japanese warplanes locked their fire control radar onto Chinese aircraft.

Beijing sparked alarm after it unilaterally established an air defence identification zone in the East China Sea in 2013, demanding all aircraft submit flight plans when traversing the zone which covers islands disputed with Tokyo and also claimed by Taipei.

US Defense Secretary Ashton Carter said in February that China’s military presence in the South China Sea was increasing the risk of “miscalculation or conflict” between regional countries.

A US warship in May sailed close to a disputed reef Beijing has built up into an artificial island, prompting China to express “dissatisfaction and opposition”.

Japan’s white paper also highlighted concerns over North Korea’s nuclear program, saying it was possible it has “achieved the miniaturization of nuclear weapons and has developed nuclear warheads”.

Xinhua, AFP and Joyce Rocamora

source:  Daily Tribune