BusinessMirror June 11, 2015

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THREETIME ROTARY CLUB OF MANILA JOURNALISM AWARDEE 2006, 2010, 2012

U.N. MEDIA AWARD 2008

A broader look at today’s business Saturday 18,June 201411, Vol. 10 No. 40Vol. 10 No. 245 Thursday, 2015

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INVESTORS SHY AWAY FROM EMERGING MARKETS ON ANTICIPATED NORMALIZATION OF U.S. INTEREST RATES

FDI declined by 50% in Q1 INSIDE

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HE country’s foreign direct investments (FDI), listed as some of the worst performing around the world, fell by more than 50 percent in the first three months to only $851 million, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.

VIGAN COMMITMENT D

Life

Wise choices

EAR Lord, help us make wise choices and good decisions all the days of our lives. Give us insight to discern good from any evil forces.

Help us choose accordingly, respecting Your will and following Your commands. We desire Your truth where in great wisdom can be found, May we seek justice with the guidance of the Holy Spirit. May we follow You more and more each day as we go through this journey on earth. Amen.

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LORI ROY’S SKILLS IMPRESS IN ‘LET ME DIE IN HIS FOOTSTEPS’ »D4

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Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

Thursday, June 11, 2015

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Vigan continues commitment to conservation B N E C

The spellbinding glow of its nightly Bellaggio-inspired fountain show, coupled with the click-clock sound made by the horse-drawn kalesa on the cobblestones, seemingly tirelessly weaving the many narrow avenues like some clockwork mechanism from yore, can leave even the most jaded tourist dazed and dazzled.

“Let us be united nationally whatever may be our personal differences....”

– P. E Q

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ERCHED at the crossroads of its wellpreserved cultural heritage and the vestiges of thriving 21st-century modernity, Vigan was enshrined recently as one of the world’s seven wonder cities (N7W).

“From 1,200 cities worldwide, we were fortunate to have landed in the top 28. From there, the number was trimmed down to 16, which included four cities from the Philippines. It was a tough elimination process because the awards committee was seeking one city per country, and then one per geographical region. During our campaign, it was the CBCP [Catholic Bishops’ Conference of the Philippines] that first signified to help us. Fortunately, their prayers were heard and we made it to the Final 7,” said local chief executive, Mayor Eva Marie Singson Medina.

During the inauguration and unveiling of the N7W monument in front of the city hall, the marquee was bequeathed to seven young Bigueño kids who were tasked to protect and perpetuate the city’s posterity.

HISTORY HUB “VIGAN VIGAN is the only city with a massive fusion of eastern and western edifices. From our food, buildings and monuments can be seen these international imprints painstakingly preserved by our forefathers. And now, we use it as a tool for development so as to afford the privilege to the next generation,” Medina added.

Once the capital of the entire Ylokos region that encompassed the provinces of La Union, Ilocos Norte, Abra, Ilocos Sur and the Cordilleras, Vigan is the only World Heritage City in the Philippines, added to the Unesco World Heritage List of Sites and Monuments on December 2, 1999.

Ciudad Fernandina, as it was known before, represents a unique fusion of Asian building design and construction with European colonial architecture and planning. It is an exceptionally intact and well-preserved example of a European trading town in the Far East and Southeast Asia; one of the few stopovers of the bustling

Cathay Pacific unveils new lounge at Naia Terminal 3 FIRST and Business Class passengers of premier carrier Cathay Pacific are set to enjoy comfort and understated luxury with the brand-new Cathay Pacific lounge at the Ninoy Aquino International Airport (Naia) Terminal 3.

Measuring 650 square meters, the new Manila lounge is almost twice as large as the previous lounge in Terminal 1 and can seat approximately 135 people.

It takes after the Haneda Airport in Tokyo with its Studioilse design, and gives the feel of a domestic space to make passengers feel right at home. Food and beverages services take greater focus at the new lounge with Cathay Pacific’s signature Noodle Bar, which offers a selection of Asian noodles freshly prepared by a chef; and the Bar, which serves tapas, desserts, and various alcoholic and nonalcoholic drinks.

A rice- and coin-throwing ceremony for prosperity and good luck marked the lounge’s grand reveal, which was led by (from left) Alan Lui, Cathay Pacific Philippines country manager; Toby Smith, Cathay Pacific general manager for product; Zhao Jinhua, ambassador extraordinary and plenipotentiary of the People’s Republic of

China to the Philippines; Dane Cheng, Cathay Pacific director for sales and marketing; Maj. Gen. Jose Angel A. Honrado (ret.), Manila International Airport Authority general manager; Wilson Yam, Cathay Pacific general manager for Southeast Asia; and lawyer Carmelo L. Arcilla, Civil Aeronautics Board of the Philippines executive director.

Acapulco galleon trade in the 19th century. Vigan derived its name from the lush Bigaa tuber, a species of the taro family.

“While we may not pass the stringent guidelines of cityhood, which require population size, territorial area and income, Vigan is, however, mandated by a royal decree which states that as long as the Archdiocese of Nueva Segovia and its church stand, it will forever remain a city. This same decree has been validated by an act of Congress,” explained third-time mayor, the only unopposed mayoralty candidate of Vigan. She has served her previous two terms to their full nine years.

The capital city of the province of Ilocos Sur, measuring 28.8 square kilometers in size, is located in the northwestern coast of the Philippines. A former island surrounded by three bodies of water (the rivers Bantay, Mestizo and Vantes), Vigan is now connected to the Luzon mainland by bridges. Its river cruises point to the significance of waterways throughout its colorful history. The river cruises trace the galleon route around the region as it shows how the riverways played a pivotal role in this important trading post.

“Our conservation efforts continue despite changes in governments. We are fortunate to have the support of our local residents. These efforts are our very tools for development. Everything is embodied in the Homeowners Preservation Manual Manual, a guideline published by Unesco [United Nations Educational, Scientific and Cultural Organization] and the University of the Philippines,” Medina continued.

The city’s Heritage Village is a treasure trove of numerous historic sites like the Syquia Mansion, Plaza Salcedo, Saint Paul Cathedral, Hotel Felicidad, the Burgos Museum and Casa Caridad, a beautifully preserved 1872 dwelling that was transformed into tavern for the Oliver Stone movie Born on the Fourth of July that starred Tom Cruise. Also nearby is the Vigan Convention Center, a modern facility that can sit 3,000 in a theater-type setup and 2,000 on a banquet setting.

Baluarte, fomer Gov. Chavit Singson’s sprawling estate, is the highest elevation in the entire Vigan. It used to be called El Pueblo de Salcedo, named after the city’s founder. “Vigan is a small city with big dreams. It has grown in leaps and bounds; a meteoric rise from what it once was, actualizing its dreams. Vignettes of its colorful history—how the church started, how the city evolved, and how the houses were compartmentalized— are all showcased inside the Casa Bigueño,” historian Prof. Eric Saludo pointed out.

A variety of entertainment, shopping opportunities, local delicacy peddlers, as well as tourist attractions are close by. Noteworthy of these places is the burnayan.

The Bantug clay used to make the tapayan (jars) is sourced from a nonarable farm lot in Barangay Bulala, and which was awarded to the Go family in 1954 as ceramic molders. Surviving heir Fidel Antiporda Go continues the trade and was honored as National Folk Artist by the National Commission for Culture and the Arts in 1990.

“The dragon kiln for our burnay is burnay is the only one burnay left in the country that cooks the air-dried formed clay. It is patterned after the pasote from pasote from Mexico. pasote Our cuisine, on the other hand, is rich and flavorful.

These include staples like bagnet, longganisa, dinengdeng, igado, puqui-puqui, pusi, mara-utong, buridibud and pippian, to name some.

“As for festivals, we celebrate our city/charter day and Longganisa Festival in January. We even produced a book-cum-guide on the 101 Ways to Cook Longganisa. Holy Week is the peak of our tourismrelated undertakings. Soon, we will put up park facilities with bath and toilet facilities for those on day tours. September 8 is the solidarity celebration of all World Heritage Sites globally. We are seeing a marked increase in our tourism traffic each year. Our day tourists reached 450,000 in 2014.

“The Twilight Festival is our homecoming feast, as well as the remembrance of our beloved departed.

Lighted wish lanterns waft to the air from the cemetery plots below. This culminates in a lantern and torch parade,” Medina shared.

Today, Vigan remains to be the home of proud Bigueños who welcome everyone to the city with a warm smile. Performed by employees of the city, the Tres Patrimonio (Three Three Patrimonies Patrimonies) musical chronicles the legacy of its most famous sons and daughters: Diego and Gabriela Silang, Leona Florentino and Padre Jose Burgos. Diego Silang is considered the precursor of the Philippines’s stand against Spain, albeit briefly.

LIFE

PATRIMONY PROTECTED IMAGES and sounds of modernity, like the impressive dancing fountain show that plays nightly at the town square, have established their marked presence in the age of digital technology. Inspired by Las Vegas’s sBellaggio, the waterworks display is a gift of Singson

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E.U. MOVES AHEAD news@businessmirror.com.ph

The World BusinessMirror

Thursday, June 11, 2015 B35

EU moves ahead on labeling of Israeli settlement products

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ERUSALEM—Israel would be required to label products that are made in West Bank settlements and exported to Europe, according to guidelines being prepared by the European Union (EU).

The move is the latest sign of international discontent with Israeli construction of settlements on occupied lands claimed by the Palestinians, as well as frustration over the bleak state of Mideast peace efforts.

It also comes as a grassroots movement promoting boycotts, divestment and sanctions against Israel appears to be ga ining steam.Israeli officials reject the European labeling plan, saying it would amount to a type of boycott and help discourage Palestinian President Mahmoud Abbas from returning to negotiations.

“Why should he talk? He can get by without talking. He can get by with an international community that blames Israel for not having talks,” Prime Minister Benjamin Netanyahu told the Herzliya Conference, an annual gathering of the country’s political and security elite.

An EU official said on Tuesday the 28-nation bloc’s foreign policy chief, Federica Mogherini, told European foreign ministers on May 18 that work is under way and that a set of guidelines will be “finalized in the near future.”

The Palestinians claim the West Bank and east Jerusalem—territories captured by Israel in the 1967 Mideast war—as parts of a future independent state. The international community opposes Israeli settlements in the two areas, saying they undermine the goal of dividing the land between two countries.

More than 550,000 Jewish settlers live on occupied land. EU opposition to the settlements is not new.

A free-trade agreement with Israel already excludes settlement goods,

IN this June 9 courtroom sketch, former House Speaker Dennis Hastert sits in federal court in Chicago where he pleaded not guilty to charges that he violated banking rules and lied to the FBI in a scheme to pay $3.5 million in hush money to conceal misconduct from his days as a high-school teacher. AP

Dennis Hastert makes 1st court appearance in hush-money case

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H I C AG O —Fo r m e r U S House Speaker Dennis Hastert appeared in court on Tuesday for the first time since he was indicted, pleading not guilty to charges that he violated banking rules and lied to the FBI about promising to pay $3.5 million in hush money to conceal misconduct from his days as a high school teacher.

As his attorney entered the plea on his behalf, the 73-yearold Hastert stood motionless, his hands folded and eyes downcast at the floor. When the judge asked if he understood he had to submit a DNA sample and could go to jail if he violated any conditions of his release, the man who was once second in the line of succession to the presidency answered quietly, “Yes, sir.”

Hastert has not spoken publicly about the accusations that emerged two weeks ago and quickly raised questions about possible sexual abuse by the once-powerful Republican legislator from Illinois. Neither he nor his attorneys commented after the hearing.

The politician-turned-lobbyist is accused of evading federal banking laws by withdrawing hundreds of thousands of dollars in smaller amounts and lying about the money when questioned.

At the start of Tuesday’s hearing, Hastert reached into a coat pocket and pulled out his passport, handing it to his attorney, who turned it over to a court official. Surrendering foreign travel documents is a standard condition of release.

The former congressman was also ordered to have any firearms removed from his property by June 23 and was forbidden from having contact with victims or witnesses in the case.

Judge Thomas M. Durkin spent most of the 20-minute hearing explaining how he believed he had no conflict of interest in the matter but then giving attorneys on both sides until Thursday to say if they want him to stay on the case.

The issue came up because Federal Election Commission records indicate he donated $500 to the “Hastert for Congress” campaign in 2002 and $1,000 in 2004. Durkin was an attorney at a Chicago law firm at the time of the contributions.

Durkin cited those donations and that he knew Hastert’s son Ethan. The two worked together in private practice before Durkin became a judge. But, the judge said, he does not consider the younger Hastert “a personal friend.”

After the judge issue is resolved, Durkin or another judge brought in to replace him will lay

out a timetable for prosecutors to share evidence with the defense.

Hastert could seek a plea deal or take his case to a jury. Any trial would probably be many months away. Appearing much thinner than in his days as speaker, Hastert walked into court slowly, slightly bent over. He appeared nervous as he sat at a defense table waiting for the hearing to begin, rubbing his chin, biting his lip and occasionally scanning the courtroom benches packed with reporters. At one point, a defense attorney reached over and patted him on the shoulder.

His lead attorney, Thomas C. Green, is based in Washington and has represented clients in the Watergate, Iran-Contra and Whitewater cases. Chicago attorney John Gallo is also on Hastert’s defense team. Steven Block is the lead US prosecutor.

Prosecutors did not shed any more light on the secret Hastert allegedly sought to conceal by paying the person the indictment refers to as “Individual A.” A person familiar with the allegations told the Associated Press that the payments were intended to conceal claims of sexual misconduct from decades ago.

The person spoke to the Associated Press on the condition of anonymity because the investigation is ongoing. If convicted, Hastert faces a maximum five-year prison term on each of the two counts.

The indictment made public on May 28 says Hastert agreed in 2010 to pay Individual A $3.5 million to “compensate for and conceal [Hastert’s] prior misconduct” against that person. It says he paid $1.7 million before federal agents began scrutinizing the transactions. He allegedly started by withdrawing $50,000 at a time and changed course when automatic bank transaction reports flagged those withdrawals.

The indictment says Hastert then began taking cash out in increments of less than $10,000 to skirt reporting rules, which are primarily meant to thwart money laundering by underworld figures.

It’s not illegal to withdraw large amounts in cash. But it’s against the law to structure the withdrawals with the intent of dodging reporting requirements.

Hastert, who is married with two sons, follows a well-trodden path of other Illinois politicians who have walked through the revolving doors at Chicago’s federal courthouse. Several recent governors, Chicago aldermen and other public figures have entered pleas in the same building. AP

even if they say they were made in Israel. Likewise, Israel is barred from spending money it receives under a landmark technologysharing pact in the West Bank or east Jerusalem.

Several European countries have approved voluntary labeling guidelines for settlement products.

The new guidelines would take things further by requiring Israeli exporters to explicitly label products as being made in the settlements—a potential stigma that could deter consumers from buying them. The EU began work on labeling guidelines in 2012, but appears to have decided to revive that effort following the formation of Israel’s new hard-line government.

The EU official said it would likely be months before the guidelines are complete. A second official said much would depend on the policies of the new government.

If peace talks with the Palestinians are restarted, the effort could once again be shelved. But if talks remain frozen and Israel steps up settlement construction, the EU will move forward, he said. Both officials spoke on condition of anonymity because they were not authorized to discuss internal EU deliberations with the media.

For now, the odds of Israel and the Palestinians relaunching peace talks appear extremely slim.

Netanyahu’s new government is dominated by pro-settlement hard-liners who oppose the creation of a Palestinian state. Netanyahu himself spoke out against Palestinian independence in the recent election campaign. A lthough he has backpedaled and

called for a resumption of peace talks, the Palestinians and Israel’s Western allies are skeptical in the absence of a firm proposal from him. Instead, the Palestinians have been moving forward with a campaign against Israel in international organizations like the United Nations and the International Criminal Court. Two weeks ago, Israel fended off a Palestinian attempt to expel Israel from Fédération Internationale de Football Association, the global soccer federation.

At the same time, the grassroots pro-Palestinian boycott movement, known by its initials BDS, appears to be gaining strength. Last week Britain’s national student union endorsed the BDS movement, while the chief executive of French telecom giant Orange said he wanted to cut business ties with Israel to help gain favor with the Arab world.

Orange CEO Stephane Richard subsequently backtracked, telling France’s BFM television station on Monday that his decision was only a business move and he is “radically opposed to all forms of discrimination.”

The station said Richard planned to go to Israel soon to speak to the nation’s leaders. But the uproar in Israel has not subsided.

Politicians across Israel’s political spectrum have blasted the BDS movement, and Justice Minister Ayelet Shaked said on Thursday she had ordered experts to plan legal steps against it. “In this arena, we will move from the defense to the offense,” she said. In his speech on Tuesday, Netanyahu said the global pressure on Israel was undermining hopes of resuming talks.

“The Palestinians have a nifty trick up their sleeve, they refuse to negotiate and then get international pressure, sanctions, boycotts on Israel for there not being negotiations,” he said. “It’s the perfect Catch-22.” An EU labeling effort would deliver an especially tough diplomatic blow. In contrast to the BDS movement, whose leaders often voice hatred of Israel,

Western European countries are among Israel’s closest allies. Europe also is Israel’s largest trade market, importing about $14.7 billion in goods last year, according to EU figures. Products from the settlements, including wines, honey, cosmetics and agricultural produce, make up just 1.5 percent of that total, according to Israel’s Finance Ministry.

But while the economic impact of a labeling campaign might be minimal, it would be a symbolic setback to Israel.

“If Europe begins labeling settlement products, then this will mean that they have put their political position into effect in the sense that there will be a real and true boycott of settlement goods,” said Mohammed Shtayyeh, the Palestinian Cabinet minister in charge of economic development.

Foreign Ministry Spokesman Emmanuel Nahshon said Israel fears that consumers will not differentiate between settlement products and Israeli products. “It will be a de facto boycott against Israel,” he said.

Nahshon said Israel is in “close contact and dialogue” with the EU on the matter. “We have been conveying our positions, and we hope they will be accepted by the EU,” he said.

Israel has traditionally used its closest allies in Europe, such as Britain and Germany, to blunt EU decisions, which require a consensus. Regardless of what the EU’s executive arm decides on labeling, its member-states remain divided about what to do, said Pierre Vimont, a former top EU official who is a senior associate at Carnegie Europe, a Brussels-based think tank.

“Preparation has been going now on for two years, and we are more than ready to go ahead,” he said in a recent interview. “But we have been avoiding this difficult moment because we know member-states are split, and it could be a very ugly discussion among us.

At the end of the day, this could be the tricky issue.” AP

US stockpiles rise in April as sales surge W A S H I N G T O N—US wholesalers boosted their stockpiles in April by the largest amount since January, while their sales surged at the fastest pace in 13 months.

Stockpiles held at the wholesale level rose 0.4 percent in April from March, the Commerce Department reported on Tuesday. Sales increased 1.6 percent after falling in March. It was the strongest advance since March 2014 and follows a number of months in which sales either declined or were flat.

An increase in inventories can be an indication of rising business optimism as companies restock empty store shelves in anticipation of stronger demand.

E conom i st s a re e x pec t i ng sales at both the wholesale and retail levels to rebound in the coming months after a slowdown in the first quarter, caused in part by unusually frigid weather.

A pickup in consumer spending, which accounts for 70 percent of economic activity, would help support overall growth.

A harsh winter, a strong dollar and a plunge in energy prices that squashed investment spending combined to send the economy into reverse in the first three months of the year. The overall economy, as measured by the gross domestic product, contracted at an annual rate of 0.7 percent in the January-to-March quarter.

Economists believe the economy has emerged from that soft patch

WORLD

IN this March 31 photo, Ed Fotta sorts hardwood at the Allegheny Millwork and Lumberyard in Pittsburgh. The Commerce Department issued its April report on wholesale stockpiles on June 9. AP

and will see stronger activity for the rest of the year. They are forecasting growth of around 2 percent to 2.5 percent in the current Aprilto-June quarter and expect growth

to accelerate to around 3 percent in the second half of this year. This rebound is contingent on continued strength in the job market, which should boost consumer

incomes a nd power ga ins in consumer spending. Last week the government reported that payrolls increased by a robust 280,000 in May. AP

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CAVS TAKE LEAD Sports BusinessMirror

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| THURSDAY, JUNE 11, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

LEBRON, CLEVELAND SURVIVE WARRIORS’ LATE SURGE

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CAVS TAKE LEAD

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LEVELAND—Once again, the offensively stagnant Golden State Warriors were left shaking their heads after falling short against the Cleveland Cavaliers.

The Cavaliers befuddled the Warriors’ juggernaut offense before their home crowd and escaped with a 96-91 win in Game Three of the National Basketball Association (NBA) Finals on Tuesday to take a 2-1 lead in the best-of seven series.

“I didn’t like our energy,” Warriors Coach Steve Kerr said. “I didn’t like our body language for much of that first three quarters.”

The Warriors threatened to come back from a 20-point deficit in the fourth, but there was LeBron James in the end, finishing with 40 points, 12 rebounds and eight assists.

Stephen Curry scored 27 points, getting back on track after a sluggish start. But once again, he was outshined by Matthew Dellavedova, who scored 20 points, and pestered the Most Valuable Player (MVP) on defense and came up with loose ball after loose ball in crunch time.

Curry hit his seventh three-pointer to cut the deficit to 94-91 with 18.9 seconds left, and after an inadvertent whistle would have left the Warriors with the ball, the ruling was overturned

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According to the BSP, FDI for the period, the kind encouraged by the government because they stay invested for the long haul and generate not just taxes for the national coffers but employment opportunities for many Filipinos, fell to only $851 million, from $1.715 billion reported a year earlier.

This developed even as exports in April dropped by 4.1 percent to $4.37 billion, due to the decline in outward shipments of eight major commodities, the Philippine Statistics Authority (PSA) said.

Electronic products, which remained as the country’s top export, recorded receipts of $2.21 billion, higher than the $1.88 billion recorded in April last year. The commodity accounted for 50.6 percent of total exports revenue during the period.

Combined merchandise exports for the four-month period declined by 1.2 percent to $18.62 billion, from $18.84 billion recorded from January to April last year.

The PSA also released the results of its monthly survey of select industries. April data showed that factory output in terms of volume grew by 1.4 percent.

The PSA added that the growth was mainly due to the output of 13 major sectors, with significant increases in chemical products, tobacco products, furniture and fixtures, basic metals, textiles, printing and paper products, and beverages.

In terms of value, factory output dropped by 4.2 percent in April, compared with the two-digit growth of 10.9 C  A

CLEVELAND Cavaliers’ LeBron James (left) again rescues his team for a 2-1 lead and weather the late rally of Golden State. Warriors’ Stephen Curry has another slow start for his team in Game Three. AP

by a video replay. James, who has embraced an underdog role in the series, finished off the favored Warriors with free throws and led his injuryplagued team to a second straight win.

The Warriors shot 40 percent from the field and saw Harrison Barnes go scoreless in 19 minutes on 0-for-eight shooting, while Draymond Green was two-for-10 from the field, acknowledging afterward he was dealing with a back injury.

Trailing by 17 points at the start of the fourth quarter, the Warriors still roared back and cut the deficit to 79-76 with 5:40 left. The hot start to the quarter was fueled by bench players David Lee, Leandro Barbosa and Andre Iguodala making an impact. Curry’s reverse lay-up cut it to three, and then his fourth three-pointer of the game cut it to 81-80.

“We became the aggressors,” Curry said.

“For us to win this series, we have to play that way the whole game. We have the depth. We have the talent to do it.”

Kerr said: “It was good to see us bring the fight to the game.”

But Dellavedova responded with a three-point play. Curry then threw a behind-the-back pass out of bounds for one of his six turnovers to set up James’s three-pointer on the other end to make it 87-80 with 1:44 left.

With the Warriors scrambling after a loose ball and the Cavaliers leading 88-83, it was Dellavedova who made a headlong dive and ended up on the bottom of the pile with the ball as he was fouled.

“Delly! Delly! Delly!” the crowd chanted. They were even louder than any “MVP” chant the crowd gave to the four-time award winner James.

“They obviously love the way he plays,” Curry said

AIRLINE GROUP PROPOSES SMALLER CARRYON BAGS

before addressing how the three-point play turned the momentum back toward the Cavaliers. “He made some timely buckets, and that was one of them.”

The Cavaliers went on a 12-0 run in the third quarter to push the lead to 20 points. It started when Curry committed a turnover and James hit a threepointer on the other end. James then backed down Iguodala and scored.

Rim-protecting Timofey Mozgov had his third blocked shot of the quarter, and on the other end, Dellavedova grabbed an offensive rebound and scored on the putback. After J.R. Smith hit a three-pointer, James blocked Klay Thompson and dished off to Mozgov for a dunk to put the Cavaliers ahead, 68-48.

The Warriors trailed 44-37 at halftime after being held to the fewest amount of points in any first half this season.

Curry scored only three points in the half on onefor-six shooting, as the Warriors remained cold from three-point range with a three-for-16 start.

“Steph never loses confidence,” Kerr said. “I just thought he lost a little energy, and I don’t know, life.

We just need life from everybody. We need emotion [from] everybody. He’s not a really emotional player like Draymond is or somebody. But we’ve got to fight through the down periods with just that competitive life and energy.”

James, meanwhile, scored 13 first-half points and got long-distance shooting contributions from his teammates. James Jones beat the buzzer for a three-pointer to finish off the second quarter. Iman Shumpert had a three-pointer after getting shaken up on a hard screen, and Smith drained a shot from beyond the arc as he made each of his first three field-goal attempts.

OKAFOR KKAFOR AFOR HA HAS EYES ES ON LOS ANGELES OS ANGELES—The dreaming can start now.

On the first day of the next chapter, the giant kid with the huge hands and deep voice showed up loaded for Laker.

So, Jahlil Okafor, what do you think about the pressure of being the Los Angeles Lakers’ probable No. 2 overall draft pick?

“Being here in Lakerland, walking around, a lot of Lakers fans say they want me here, telling me they want to win,” he said. “I love it.”

So, what do you think about the pressure of following in the historic footsteps of past Lakers big men?

“They were all about winning, and when they came here, they won,” he said. “I’ll have some big shoes to step into, but I’m ready.”

OK, so can you turn this dreadful team into a winner?

“Not by myself, not on this level, not coming right in,” he said. “That’s why we have Kobe Bryant here.”

Smart answer. Sharp kid. He loves the pressure, embraces the expectations and is savvy enough to pay homage to the one guy who can make his life miserable. Jahlil Okafor is not here yet, but he will probably soon be, and as consolation prizes go, this could feel a whole lot like first place.

The 19-year-old center on Duke’s national title team showed up at El Segundo for a workout on Tuesday in advance of the June 25 National Basketball Association (NBA) draft in which he is expected to fall to the Lakers, who would be out of their minds not to snap him up.

The Minnesota Timberwolves are expected to select Kentucky center Karl-Anthony Towns with the first overall pick because he’s considered better defensively with deeper potential. That would leave the draft’s other big headliner for the Lakers, which would be an absolute gift for a team that was supposed to pick fourth and a reviving

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jolt for a franchise that has spent two years dead asleep.

Okafor is 6 feet 11, 270 pounds and, while he doesn’t play defense like Towns, he is a big-city scorer with big-time cool. With his giant hands, deft touch and nimble footwork, he could probably knock down 18 in an NBA game right now. He has been compared to a young Tim Duncan, which means nothing before he’s banked in his first pro shot, except that he does have that Duncan thing for winning.

Okafor won a high-school state championship, a national college championship and a bunch of international USA basketball championships. He is now seemingly intent on winning the draft, which, to him, means coming to the Lakers, and he’s not shy about saying it.

So, what do you think about the prestige of being the first overall pick?

“I’ve already said, being the No. 1 pick is not that important for me, it’s more so for the fan base,” Okafor said. “I just want to be in right position with a team that wants me.”

When have you ever heard a potential No. 1 disown the idea of being No. 1? When he wants the No. 2 team to take him, that’s when. Okafor appears to want to play for the Lakers so badly, it’s as if he’s ready to cede the draft title to Towns right now.

“He’s obviously a great player, he’s definitely deserving of being the No. 1 pick,” Okafor said of Towns.

So far, it appears Towns is ready to accept that crown and go to Minnesota. He is the only potential top-4 pick who has not yet worked out for the Lakers, and they have had difficulty in pinning him down for a visit, which could mean that he already knows he’s going to join the Timberwolves, so what’s the use?

Okafor suffers from no such uncertainty, saying, “I’m coming from Duke University...where the entire atmosphere is about winning.... That’s what the Laker organization is about, that’s what I want to be part of.”

When this columnist had the nerve to ask about his defensive deficiencies, Okafor had the wit to fire back.

“I hear the criticism, but we won a national championship at Duke, so it wasn’t that bad,” he said, grinning. “Coach K was fine with the way we played defense.”

He later acknowledged that he needs to work on all aspects of his

game, and that he would love to learn about the mental edge from Bryant, and that maybe some of those famous big guys would show up with pointers.

“Shaq was my favorite, then there’s Kareem, I would love to be here, to have an opportunity to learn from all those guys,” he said.

Here’s guessing that despite all of his calculated public waffling, Lakers General Manager Mitch Kupchak has also learned from those big guys and won’t even be tempted to use the second pick on trendy cool Ohio State guard D’Angelo Russell. Kupchak was quick to mention how today’s NBA now seems to be dominated by the smaller guys who control the ball. But he was also quickly reminded that when the Lakers have won championships, it’s always been on the backs of a big man, a fact that surrounds Kupchak every day.

“That’s an argument, and that’s a good argument, we’ll have to see how that plays out,” Kupchak said on Tuesday. “We have a lot of photos in this building, a lot of those jerseys of big men that we retired.”

Kupchak paused. “But...it’s debatable.”

Is it? If there’s one commodity that is impossible to find in today’s NBA, it’s big men. If there’s one draft where two big men need to be taken immediately, it’s this one. True, point guards run the game, and the two teams in the NBA Finals have centers who have been mostly afterthoughts, but remember how the Lakers found potential star guard Jordan Clarkson in the second round last year? Great guards can be found anywhere. Great centers can be found almost nowhere.

“No, you cannot get a big man like him [Clarkson] in the second round,” said Kupchak, referring to Clarkson’s impact.

Watching Jimmy Buss tug on his baseball cap and confer with Kupchak during the end of Okafor’s workout on Tuesday, it was comforting to realize that no matter what happens, it will be nearly impossible for the Lakers to mess this up.

As Okafor’s sweaty presence in a Lakers practice jersey confirmed on Tuesday, go ahead, it’s all good, the dreaming can start now.

SPORTS Jahlil Okafor wants to become a Laker »thisDUKE’S coming National Basketball Association season. MCT

C1

HEALTH MAINTENANCE

HEAL H&FITNESS HEALT HEALTH&FITNESS

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RAVELERS may soon need to buy a slimmer carry-on bag.

To address the problem of size limits that vary by airline, a trade group for the world’s airlines has come up with a standard size for luggage that passengers are allowed to bring onboard planes.

But Americans who fly may not be happy because the size limits proposed by the International Air Transport Association (IATA) are slightly smaller than the standards imposed by most US carriers.

At a meeting in Miami on Tuesday, IATA announced a proposed standard carry-on size of 21.5 inches by 13.5 inches by 7.5 inches.

Delta Air Lines, American Airlines and United Airlines, for example, limit carry-on bags to no bigger than 22x14x9 inches. Southwest limits carry-on bags to no bigger than 24x16x10 inches.

IATA officials say imposing smaller bag limits will ensure that everyone can fit their carry-on S “C- ,” A

PESO EXCHANGE RATES n US 45.0210

INDEPENDENCE DAY Philippine flags have been installed in the island of a road in Cavite City in preparation for the celebration of the country’s 117th Independence Day on Friday. ALYSA SALEN

MPIC open to partnership for Calax B L S. M

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ONGLOMERATE Metro Pacific Investments Corp. (MPIC) is willing to divest as much as a fifth of its shares in its newly set up tollways holding company to an interested partner, the chief honcho of the company bared.

Manuel V. Pangilinan, the chairman of the Filipino infrastructure giant, said his company is open to partner with firms interested in developing the P62.67-billion Cavite-Laguna Expressway (Calax).

“If anything, minimum, I suppose, is about 20 percent,” he replied, when sought as to how much his company is willing to share to a potential partner for the toll-road development deal that the conglomerate won this week.

The signing of the concession agreement for the Calax contract is slated for June 29, pending the completion of the post-award requirements.

MPCALA Holdings Inc. topped the rebidding for the multibillion-peso deal with a P27.3-billion premium bid, edging out the P22.2-billion premium offered by San Miguel Corp.’s Optimal Infrastructure Development Inc. The premium offer made by MPIC is the highest single premium that the government has received from a public tender thus far.

It was the second time that the government tendered the deal. The first one, although successful, was called out to be void

by President Aquino himself.

The rebidding—criticized by busi-

ness groups, both foreign and local—was launched to accommodate the petition of Optimal Infrastructure Development Inc., which allegedly offered P20.1 billion in premium payment to the government.

Team Orion of Ayala Corp. and Aboitiz Equity Ventures Inc. topped the original auction with a P11.6-billion offer on top of the project cost. MPIC trailed behind by a hairline difference.

Mr. Aquino, who is the uncle of San Miguel’s chairman, decided to cancel the results of the initial auction, so the government could generate higher revenues from the bidding. This was tagged by businessmen as a money-milking initiative that ultimately places ordinary commuters at the losing end.

C  A

House OKs tax-incentives monitoring bill B J M N.  C

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HE House of Representatives has approved on final reading the proposed Tax Incentives Management and Transparency Act (Timta).

House Bill 5831, authored by Liberal Party Rep. Ma. Leonor Gerona-Robredo of Camarines Sur, seeks to monitor the tax incentives granted by the government to several companies. Under the bill, which was approved late Wednesday, all registered business entities are required to file

their returns and pay their tax liabilities using the electronic system of the Bureau of Internal Revenue (BIR).

It added that application for income tax holiday (ITH) and/or other income tax-based incentives availment with the Board of Investments (BOI) and other relevant investment promotion agencies (IPAs) shall be made within six months from the statutory deadline (April 15) for filing of tax returns and only be accepted upon proof of filing of tax returns using the BIR electronic system; failure to make

a valid application within said period results in forfeiture of incentives for the taxable period concerned.

The bill also grants the BOI a period of one year from filing of the application for availment of ITH and/or other income taxbased incentives to conduct validation of said application and make a recommendation to the BIR. It mandates that the three-year prescriptive period of the BIR to make any assessment be toiled to 18 months for S “T ,” A

n JAPAN 0.3621 n UK 69.2693 n HK 5.8071 n CHINA 7.2548 n SINGAPORE 33.3143 n AUSTRALIA 34.5757 n EU 50.7837 n SAUDI ARABIA 12.0062 Source: BSP (10 June 2015)

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Thursday, June 11, 2015

Tax incentives. . .

Continued from A8

without justifiable reason to provide or furnish data or information as required under this act, shall be punished by a fine equivalent to that official’s or employee’s basic salary for a period of one month to six months or by suspension from government service for not more than one year, or both, in addition to any criminal and administrative penalties imposable under existing laws,” it said.

On his part, House Committee on Ways and Means Chairman and Liberal Party Rep. Romero Quimbo of Marikina, coauthor of the bill, said the congressional bicameral committee meeting for the proposed Timta will be done during the break.

Congress will take a sine die adjournment from June 12 to July 26.

“There are variances with Senate version so we need to conduct a bicameral conference and come up with the joint version or either we will adopt the Senate version or they will adopt our version. Hopefully, during the break we can conduct the meeting,” Quimbo said.

The Senate has already approved on final reading its version of Timta authored by Sen. Juan Edgardo Angara on Monday.

Earlier, in a position paper, 14 local and foreign business groups, representing 35,000 businesses in the country, identified the provisions they want to scrap in the House’s version of the contentious Timta.

Among these provisions include the electronic-filing (e-filing) requirement of the Bureau of Internal Revenue (BIR); the penalties for nonsubmission of incentive claims during the prescribed period; and an extension of the BIR’s assessment period.

Quimbo said that he sees no reason “why some of them [businessmen] oppose it [the e-filing].”

“You know it is experiential...none of the businessmen are against transparency, in fact, many of these [businessmen] are supportive and are pushing for it but I think they are hesitant only on anything empowers or adds to the powers and discretion of the BIR and the DOF so it emanates from that,” he said.

He added, “it is also experiential because of their experience with the BIR they are scared [that] it will effectively put their incentives at the mercy of the BIR which is not a case, which we clearly spelled out, the repository is Neda, the Neda will conduct the cost benefit analysis so its unfounded.”

news@businessmirror.com.ph

PHL sees no need for additional monetary support now–BSP

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he Philippines doesn’t need additional monetary support at this time, central bank Deputy Governor for Monetary Stability Sector Diwa C. Guinigundo said, ahead of a policy meeting this month.

Economic growth is robust and the central bank remains vigilant against price pressure in the second half of the year, Guinigundo, 60, said in an interview in his office in Manila on Wednesday. The 1.6-percent inflation rate in May, the slowest since 1998, is unlikely to be seen again this year, he said.

“We will continue to keep our ears on the ground,” Guinigundo said. “Additional monetary support may not be necessary at this time. This is, of

course, subject to periodic surveillance of global and domestic developments.”

Guinigundo’s comments suggest Bangko Sentral ng Pilipinas (BSP) will refrain from easing policy at its June 25 meeting, even after economic growth weakened to a threeyear low in the first quarter. Price pressure is rising after higher oil and power costs and drier weather from El Niño, even as inflation is expected to remain safely within target, he said.

“The guidance from the central

FDI declined by 50% in Q1. . . percent during the same month last year.

Data show FDI weakening sharply to only $229 million in March alone from $359 million in February and $263 million in January.

These developments corresponded with a very volatile period in the global econony when the prospect of a so-called normalization in US interest rates loomed large over emerging markets like the Philippines where the period of domestic low interests have allowed the $272-billion economy to carve respectable growth averaging 5.2 percent during the quarter.

That same economic expansion mea-

bank is fairly straightforward,” said Rahul Bajoria, a Singapore-based regional economist at Barclays Plc. “In the near term, there is no urgent reason to change the monetary policy stance. The next move is likely a hike rather than a cut, as underlying inflation pressure is something they will be concerned about.”

The peso rose 0.2 percent to 44.90 per dollar as of 2:47 p.m. in Manila, according to prices from Bankers Association of the Philippines. The currency slumped to a five-month low this week. Philippine stocks rose 0.6 percent, ending four days of losses.

The peso is market-determined and the central bank is comfortable with that, Guinigundo said.

Policy-makers won’t go against the currency’s fundamental trend, BSP Governor Amando M. Tetangco Jr. said this week. Bloomberg News

Carry-on bags. . .

Continued from A1

luggage into the over head bins. IATA officials added that airlines can maintain larger carry-on standards.

“This is a program that is designed to make things easier for everyone,” said Tom Windmuller, IATA senior vice president for airport, passenger, cargo and security.

For now, the carry-on standard is only a guideline for the world’s carriers.

Windmuller said about a dozen foreign carriers, including Emirates, Lufthansa and Qatar, have already agreed to accept the IATA standard and 30 to 40 others have expressed interest in accepting it.

“This should bring a degree of standardization to the industry and make it easier for everyone concerned,” he said. IATA is also working with luggage manufacturers to produce carry-on bags that meet the size limits and include a logo showing that the bag meets the IATA guidelines.

“We are confident that over the next several months we will get a number of major airlines coming onboard,” Windmuller said.

Some business travelers say they like the idea because it forces travelers to pack more efficiently, thus, eliminating the battles between passengers to find luggage space in the overhead bins.

Jason Womack, an author and leadership coach from Ojai who travels about 140 times a year, said that “for frequent travelers, it makes us think ahead of time.” TNS

Continued from A1

sured as the gross domestic product (GDP) has proven lower than most analyst and economist expectation.

During the quarter, so-called equity and investment fund shares totaled sharply lower to only $439 million versus the year-ago total of $809 million.

According to the Bangko Sentral ng Pilipinas, foreign investor placements for the period aggregated $330 million versus withdrawals of only $76 million.

Profits derived by foreign investors from their business ventures in the Philippines and subsequently plowed right back, also known as reinvested earnings,

proved lower during the quarter to only $185 million versus year-ago reinvestments totaling $256 million.

Such reinvested foreign investor profits stabilized and totaled $57 million in March from $58 million in February and $71 million in January.

Also during the first three months, the various foreign investors with longhorizon views of the Philippines and its prospects down the line settled far fewer debts owed from their foreign principals totaling only $412 million.

This compared against $907 million worth of debts the foreign-owned Phil-

ippine subsidiaries owed their overseas principals a year earlier.

The declining number indicate that the foreign-owned Philippine subsidiaries paid down far fewer loans owed this time around from their principals domiciled overseas.

Equity capital placements during the period, which were sourced mainly from the United States, Japan, Singapore, Spain, and Germany, were channeled primarily to manufacturing; electricity, gas, steam and air-conditioning supply; real estate; financial and insurance; and wholesale and retail trade activities.

Economy

A4 Thursday, June 11, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

PHL needs to maximize trade to boost exports—Balisacan

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he Philippines needs to maximize existing trade agreements, especially with emerging economies, to counter the weak exports demand from major trading partners, according to the country’s chief economic planner.

Economic Planning Secretary Arsenio M. Balisacan underscored this strategy after Philippine merchandise exports declined by 4.1 percent in April 2015, following a modest rebound of 2.1 percent in the previous month.

The Philippine Statistics Authority (PSA) reported that the

total value of outward shipments fell to $4.4 billion in April 2015, from $4.6 billion in the same period last year.

Balisacan attributed the country’s declining exports to fragile global economic conditions, as most trade-oriented economies in East and Southeast Asia also

posted negative export performance in April, with only Vietnam in positive territory.

The country booked lower revenues from petroleum, mineral and agro-based products.

“Falling crude-oil prices in the international market continue to partly affect the country’s exports, as reflected in the year-on-year declines in the volume of petroleum exports to Singapore, Malaysia, Thailand and Cambodia,” he said.

With this, Balisacan, also National Economic and Development Authority director general, stressed the need for the government to maximize existing trade agreements, especially with emerging economies benefiting from the low oil-price environment.

“Also, this shows the importance of restoring traction in gov-

ernment spending,” he said.

Balisacan expects that the production of agro-based commodities will continue to feel the impact of prolonged drought and occurrence of stronger typhoons.

He stressed the need for the government to fast-track and to strengthen initiatives, like infrastructure support, hybrid seeds and advanced weather-sensing facilities, to lessen the impact of extreme weather conditions on agriculture.

“These initiatives, if undertaken, will help stabilize supply of exported agro-based commodities and provide steady income for workers in agriculture,” he noted.

Balisacan stressed that the country’s export sector remains vulnerable to declining demand from major trading partners, particularly China and Japan. PNA

news@businessmirror.com.ph

Industry output up 1.4 percent in April

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he Volume of product index (VoPI) for the month of April this year has increased by 1.4 percent, the Philippine Statistics Authority (PSA) reported on Wednesday.

The country’s industry output in April 2015 was slower than Moody’s Analytics’ projection of 5.8 percent.

Moody’s Analytics forecasted manufacturing output to sharply decline from its double-digit growth of 13.6 percent in March 2015, due to lower oil prices resulting to lower production of chemicals and petroleum.

PSA data showed that among the sectors with significant output growth in April, which kept VoPI for the said month afloat, were chemical products with production increase of 46.2 percent; tobacco products, up by 35.5 percent; furniture and fixtures, up

CA gives ERC go signal to resolve PSALM’s petition to pass on P140-billion stranded debt

By Joel R. San Juan

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HE Court of Appeals (CA) has affirmed the ruling issued by the Energy Regulatory Commission (ERC) junking the motion to dismiss filed by the Philippine Associated Smelting and Refining Corp. (Pasar) on the bid of the Power Sector Assets and Liabilities Management Corp. (PSALM) to pass on to the public its P140 billion worth of stranded liabilities.

In a 14-page decision penned

by Associate Justice Sesinando Villon, the CA’s Thirteenth Division denied the petition filed by Pasar seeking the nullification of the ERC’s orders, dated June 14, 2012 and October 24, 2012, which denied its motion seeking to block PSALM’s “Petition for the Recovery of the National Power Corp.’s [Napocor] Stranded Cost Portion of the Universal Charge Grids.”

Pasar owns and operates the only copper smelting and refinery in the Philippines, while PSALM is mandated under the Electric Power Industry Reform Act of 2001 (Epira) to calculate the amount of stranded contract costs of Napocor and to liquidate it.

The appellate court held that said orders of the ERC has already attained finality because of the failure of Pasar to file an appeal within the reglementary period provided in the Rules of Court.

It noted that upon its receipt of the June 14, 2012, order of the ERC denying its motion for reconsideration, Pasar, on June 27, 2012, filed a second motion for reconsideration,

Shades market

Shoppers browse through collections of sunglasses or shades of various designs and colors in Avenida, Manila, on Tuesday. The Chinamade eyewear are mostly priced at a reasonable P100 a pair. Roy Domingo

a prohibited motion under the rules of the ERC. The CA added that it was only on December 10, 2012, that Pasar instituted its petition for certiorari, which is beyond the 60-day reglementary period.

“Hence, the herein assailed orders have already attained finality.

Well settled is the rule that a final and executory decision or order can no longer be disturbed or reopened no matter how erroneous it may

be,” the CA ruled.

The CA added that Pasar failed to prove the orders were issued by the ERC with grave abuse of discretion or patently erroneous.

“The abuse must have been committed in a manner so patent and so gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.

Nothing of that sort is obtaining in this case,” the CA added.

Concurring with the ruling were Associate Justices Rodil Zalameda and Pedro Corales.

In opposing PSALM’s petition, Pasar argued that the general public should not bear the burden of shouldering the costs of additional loans incurred by PSALM since the Epira provides that these obligations must be collaterized and/or guaranteed by the national government.

The company added that it is

“absurd” to require the general public to bear the costs of the secured obligations by including the said obligations in the additional imposition of the stranded debts of the universal charge.

PSALM is mandated under the Epira to calculate the amount of stranded contract costs of Napocor and to liquidate it.

In a motion to dismiss filed before the ERC, Pasar argued that the prescribed filing date of universal charge (UC) applications had not been strictly followed; that the filing had been premature because the applicant-firm did not have its audited financial statements yet at that time; and the extension granted to PSALM on its UC filings may not have been according to rules.

The ERC, however, found no merit to the issues raised by Pasar.

If a ruling will be rendered on the UC applications, PSALM’s cost recoveries will trigger new increases via the UC component in the consumers’ electric bills.

Citing Section 32 of the Epira, the ERC reiterated that it was mandated by law “to promulgate rules and regulations relative to the manner and duration for the full recovery of the stranded debt and stranded contract cost.”

It noted that since the power-industry law’s IRR was just promulgated in 2002, it would not have been possible for the ERC to promulgate its rules earlier than that, more so, to direct PSALM to file its application for stranded cost recoveries.

DTI’s Manalo underscores contribution of local franchising sector to economy

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Flag enterprise

The vendor in photo is all smiles with the brisk sale of miniature Philippine flags he peddles at the corner of Green Meadows and Ortigas avenues in Quezon City, two days before the yearly commemoration of the Philippine Independence Day. PNA

ocal brands account for twothirds of the franchising industry’s revenues, a trade official bared on Wednesday, a trend that will continue as more local brands crop up.

“Franchising is a major contributor to our country’s economic performance with a growth rate of 20 percent to 25 percent, and an estimated turnover of $3 billion to $7 billion annually since 2011, twothirds of that is from local brands,” Trade Undersecretary for Promotions Ponciano Manalo Jr. said in his speech at the opening of Franchise Asia Philippines 2015 on Wednesday.

Franklin Go, vice president of Goldilocks and Philippine Franchise Association (PFA) president, told reporters that local brands are increasing in number because the model of known, smaller food franchises are becoming easier to replicate. Go also said food and services concepts continue to propel the growth of the franchising industry, while those that are going

international are mostly apparel.

Last year the Department of Trade and Industry (DTI), through the Center for International Trade Expositions and Missions and the PFA, joined Jakarta’s Franchise and License Expo wherein the Philippines held a fashion show featuring homegrown brands Bench and Plains and Prints.

The PFA and the DTI will again be joining the Dubai International Branding and Licensing Fair this November in the United Arab Emirates.

Franchising has often been touted as the most accessible way for small entrepreneurs to go into business, as most concepts require minimal capitalization and franchises often come with marketing and training support.

The local franchising industry is slated to grow between 20 percent and 30 percent in the next two years in terms of revenues and number of franchises, PFA said earlier, as increased spending is expected before and during an election year. Catherine N. Pillas

by 22.8 percent; basic metals, up by 22.3 percent; textiles, 17.8 percent; printing, 14.7 percent; machinery except electrical, 14.5 percent; paper and paper products, 13.3 percent; leather products, 11.7 percent; and beverages, 10.2 percent.

On the other hand, value of production index (VaPI) declined by 4.2 percent in April this year.

“This was primarily due to the slump in production values observed in eight major sectors that offset the growth reported by 12 major sectors,” the PSA explained, noting that VaPI of petroleum products fell by 34.6 percent.

Meanwhile, despite the slower VoPI and negative VaPI in April, average capacity utilization of industries was at 82.3 percent, as 50 percent of major industries operated at 80 percent and above capacity utilization rates. PNA

briefs construction of 100-mw solar-power plant in northern negros starts

BACOLOD CITY—Construction of the 100-megawatt (MW) solarpower facility of Equis Funds Group, which is considered the biggest in Southeast Asia, has started at Hacienda Paz, Barangay Tinampaan, Cadiz City in northern Negros Occidental.

Equis Funds, Asia’s largest independent energy and infrastructure private equity fund manager, is expected to complete the project by the end of the year.

Representatives of Equis Funds, led by its Chief Technology Officer Michael Vukelic, met with Gov. Alfredo Marañon Jr. and Cadiz City Mayor Patrick Escalante at the Provincial Capitol on Tuesday.

Escalante said the solar-plant project, worth $175 million, is on a 175-hectare land area.

During the construction phase, about 2,500 workers will be needed while, during the operation phase, 150 to 200 permanent workers will be employed, the mayor said.

The power from the solar plant will be considered as “priority dispatch” and will be sold all over the country, he added. PNA

solon lauds sss pension hike Party-list Rep. Neri J. Colmenares of Bayan Muna welcomed on Wednesday the approval of House Bill (HB) 5842, which mandates a P2,000 Social Security System (SSS) monthly pension increase across the board.

“This means that those receiving the basic P1,200 pension per month would now receive P3,200 if this is finally enacted. All the succeeding pension brackets would also have a P2,000 increase. This is a very positive development, and I hope that the Senate would pass a similar bill. This would really be welcome news for the 1.9 million pensioners of the SSS,” he stressed.

“I also hope that the pensioners and SSS members can help us in campaigning for the passage of a similar bill in the Senate,” Colmenares added.

Last year the SSS agreed with Colmenares during a House hearing that their pension was, indeed, too small and the fund eventually implemented a 5-percent across-theboard pension increase.

“While it is way below the P5,000 minimum pension we proposed in HB 175, the P2,000 pension hike is a good start to improve the condition of pensioners,” Colmenares said.

Bayan Muna’s HB 175 places the minimum monthly pension for SSS members at P5,000.

The current lowest pension the SSS gives is P1,200 per month.

Marvyn N. Benaning

Economy BusinessMirror

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Comelec: Auction for P2.88-B PCOS refurbishment deal now open to bidders

By Joel R. San Juan

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HE Commission on E l e c t i o n s (C o m e l e c ) has of f icia l ly opened the bidding process for the P2.88-billion contract for the refurbishment of the 81,000 Precinct Count Optical Scan (PCOS) machines for possible use in next year’s elections.

In its inv itation to bid, the Comelec-Special Bids and Awa rds Committee (SBAC) said the contract includes the upg rad i ng a nd /or repl ace ment of parts, replacement of irreparable units, preventive maintenance and warranty, and hauling of the 81,896 units of PCOS; personnel services; consumables for the PCOS machines, such as external memory storage device, marking pen, thermal paper, ballot scanner cleaning sheet; and provision of 47 million ballots.

“Bids received in excess of the approved budget for the contract per component shall be automatically rejected at bid opening,” the SBAC said.

It can be recalled that the Supreme Court had previously junked the P268.8-million negotiated contract between the Comelec and Smartmatic-Total Information Management (TIM) Corp. for some minor repairs of the PCOS machines, citing violations of Republic Act 9184, or the Government Procurement Act, which requires public bidding for government projects.

The bidding for the PCOS m ac h i nes’ re pa i r ser v ices, to be supplemented by the 23,000 Optical Mark Reader (OMR) machines, is one of the two options being eyed by the Comelec for the 2016 polls, with the other being the lease of all-new OMR machines by combining the 70,977 and the 23,000 units.

The SBAC said prospective bidders have until June 30 to secure a complete set of bidding documents for a nonrefundable fee of P75,000.

It has set the prebid conference on June 17 at 2 p.m., at the Bureau of Treasury Hall at the Palacio del Gobernador Building in Intramuros, Manila.

Meanwhile, the viewing and inspection of the PCOS machines for prospective bidders shall be made available from June 9 to June 29, from 8 a.m. to 5 p.m., at the Project Management Office also at the Palacio del Gobernador Building.

Deadline for the submission of bids has been set on June 30 at 9 a.m. in the Bureau of the Treasury Hall also with the opening of bids to be held an hour later.

Smartmatic is not barred from joining the bidding process.

MRT 3 maintenance contract price raised to P4.2B

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By Lorenz S. Marasigan

NUMBER of failed auctions, plus the sorry state of the Metro Rail Transit (MRT) Line 3, have forced the transportation department to double the price of the train system’s maintenance contract to make the contract palatable to the taste of investors.

Roman R. Buenafe, the train line’s general manager, said his group is currently finishing the terms of reference of the railway system’s threeyear maintenance deal, which is now pegged at P4.2 billion.

“We got stuck at the signaling, we had to get a consultant, plus we had to check on the end product of the consultant,” he explained.

The terms will then have to go through the approval of the Government Procurement Policy Board (GPPB) and the National Economic and Development Authority.

“Assuming that the GPBB approves the terms—it usually runs for about two weeks—then we could start the negotiation,” he said.

T he Department of Transportation and Communications (DOTC) decided to double the contract price, from the original P2.2 billion, to increase the interest of maintenance providers.

“Now, we’re including in the lot, the general overhaul of the trains and replacement of signaling system. If the amount and the mode were approved, then we could negotiate with just one party,” Buenafe said.

Currently, a shadowing team from the transport department is assist-

ing APT Global Inc. in maintaining the line. The maintenance provider’s contract expired in the second half of last year. It was, however, extended due to the failed auctions.

The transport agency launched the initial auction for the multibillion-peso contract for the train line’s maintenance provider sometime in the third quarter last year.

The first auction was welcomed by maintenance providers, but they decided to ditch the bidding due to issues on transparency.

In the hopes that these multinational companies would be enticed to vie for the much-needed project, the department decided to sweeten the terms of the deal. But, despite the relaxing of rules and the improvement in cost, railway upkeep services companies still decided to evade a “potential risk.”

The risk, industry sources said, is obvious: the train system itself is already dilapidated. Hence, “maintaining” it, in the literal sense, would mean risking the lives of daily commuters coming from the northern and southern corridors of Metro Manila.

The plan now, the general manager said, is to award the contract by

the third quarter of the year.

As this progressed, Buenafe said, the agency is ready to issue the notices of award and to proceed to the winning bidders of the “multidisciplinary” maintenance contract auctioned off by the government in the first half of the year.

“We are looking at issuing the notice to proceed by July 5. There is already a notice of award, but there is an issue on the rolling stock and power components,” the train system’s general manager said.

Basically, the multidisciplinary approach aims to address the pressing issues of the train line by getting experts to maintain each MRT component. To wit, a rail-track expert will be tasked to solely maintain the MRT’s poor tracks.

Each discipline carries a sixmonth concession period, with a total aggregate cost of P57 million per month.

“The power component already has a notice of award, but the winner backed out. We are still investigating the story behind this. There also seems to be a protest with regard to the contract on the rolling stock,” Buenafe explained.

The lack of a good maintenance provider has taken a toll on the MRT, whose facilities are now poorer than ever.

Lesser trains have been operating—almost half the supposed capacity of the railway system—and yet more and more people are riding the mass-transit line.

This earned the ire of the commuting public, most of whom are questioning the effect of the fare hike implemented early this year.

The owner of the assets of the MRT Line 3 admitted that the train system already poses a certain degree of risk in the lives of the com-

T

O ensure that the country is equipped with reliable, cheap and safe source of power, outgoing Energy Secretary Carlos Jericho L. Petilla is pushing for the share of renewable energy (RE) in the power mix by at least 30 percent of installed generating capacity.

To achieve this, Petilla said, his office is set to issue a set of guidelines that would set the tone for the next feed-in-tariff (FiT) quota.

Once the guidelines are out, the Department of Energy (DOE) is expected to work on a department circular to implement the rules.

“The circular that will come out is not a power mix. It is a guide policy

muters, given its current state. Train experts from Hong Kong also found the line to be in a poor state—especially the rails.

But the government and the private-sector partner could not meet half way.

For one, the government currently implements a P9.7-billion multiyear venture to overhaul the line. The complete makeover is expected to be done within the term of President Aquino. It also wants to buy out the corporate owner for P54 billion.

But several private groups are proposing a different scheme to modernize the train system, which has been under fire for years now for its mediocre services.

T he group of businessman Robert John L. Sobrepeña is proposing to do a “quick fix” solution to make the train system safe for public transport.

Together with foreign firms Sumitomo Corp. of Japan and Globalvia Infrastructuras of Spain, Metro Global Holdings Inc. is proposing to “fix” the ailing system through a $150-million investment that involves the procurement of a total of 96 new train cars, and the rehabilitation of the existing 73 coaches, increasing its capacity by fourfold to 1.2 million daily passengers.

Under the proposal, a single point of responsibility will be implemented: meaning the rehabilitation and the maintenance of the line will be handled by a single company.

Separately, Metro Pacific Investments Corp. is proposing to shoulder the upgrade costs of the train system and release the government from the bondage of paying billions of pesos in equity rental payments.

The group of businessman Manuel V. Pangilinan, which earlier entered into a partnership agreement with the corporate owner of the MRT, intends to spend $524 million to overhaul the line.

The venture would effectively expand the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. The multimilliondollar expansion plan would double the capacity of the line to 700,000 passengers a day from the current 350,000 passengers daily.

It was submitted in 2011, but the transportation agency’s chief back then rejected the proposal.

On the other hand, German firms Schunk Bahn-und Industrietechnik GmbH and HEAG Mobilo GmbH are seeking to place the whole train system under a massive transformation program to augment its capacity, and to provide a safe and comfortable travel to commuters from the northern and southern corridors of Metro Manila.

The P4.64-billion proposal, submitted in February with Filipino partner Comm Builders and Technology Phils. Corp., calls for the complete overhaul of the 73 light-rail vehicles of the MRT, the replacement of the rails, the upgrading of the line’s ancillary system, the upgrade of the track circuit and signaling systems, the modernization of the conveyance system and a three-year maintenance contract.

The train system has been operating at overcapacity since 2004.

Currently, the line serves nearly 550,000 passengers per day, it even reached, at one point last year, the 650,000-daily passenger mark. It has a rated capacity of 350,000 daily passengers.

briefs phl stocks bounce on bargain hunting Philippine share prices recovered on Wednesday, as investors went bargainhunting after the bellwether index retreated to a five-month low.

The Philippine Stock Exchange index surged 60.83 points to 7,384.27, from the previous day’s 7,323.44 close. ”It’s a technical bounce, investors are bargain hunting. It could try 7,500 levels,” said Jonathan Ravelas, BDO chief market strategist.

Ravelas said failure to break the 7,500 levels could call for further losses to 7,000 levels.

Almost all counters were in positive territory, led by property, which increased 1.67 percent.

Share prices of mining and oil sector declined slightly.

A total of 2.14 billion shares change hands within the day valued at P6.2 billion.

Advancers dominated decliners, 94 to 61, as 54 issues remained unchanged.

Metropolitan Bank and Trust Co., Universal Robina Corp., GT Capital Holdings Inc., Ayala Land Inc. and Globe Telecom Inc. led the day’s active stocks. PNA

enough special nonworking holidays–marcos

Grape from vine A vendor prepares to put some grapes on a weighing scale after closing a sale with a costumer on Tuesday in Monumento, Caloocan

City. The luscious imported fruit from the vine costs P30 per 1/4 kilo or P120 per kilo. According to the Food and Agriculture Organization, 75,866 square kilometers of lands globally are dedicated to the cultivation of grapes. Approximately 71 percent of world grape production is used for wine, 27 percent as fresh fruit, and 2 percent as dried fruit. Kevin de la Cruz

DOE setting policy targets for next RE projects

By Lenie Lectura

Thursday, June 11, 2015 A5

for the DOE on FiT, wherein it is emphasized that RE is set at 30 percent and FiT is a balancing act but with certain conditions,” Petilla said in a text message.

Petilla added separately during a briefing on Wednesday that an ideal fuel mix for the country would be 30 percent for RE and another 30 percent for gas. The remaining 40 percent would account for other sources, including coal. At preset, coal is the dominant fuel in the mix.

T he power-generation mi x (gigawatt-hours produced) in 2013 showed that coal accounted for about 43 percent, natural gas at 25 percent, geothermal at 13 percent and hydro at almost the same level.

The share of diesel and RE was seen

to be very minimal.

Many power-firms generate power from coal because it is the cheapest fuel among all power sources. By 2020, Petilla said some 23 new coal-fired power plants are expected to be put up.

“You want a good mix in power generation? If you look at the cost, coal is the cheapest. But you just don’t want to have the cheapest. You need to have reliability and self-sufficient power source.

Moreover, you have to take into consideration the health and environmental factors. The end goal is to have a fuel mix that does not only take into account the price alone,” Petilla said when asked to identify the objective of the im-

plementing rules and regulations (IRR) set to be issued this week.

“We will be coming out with an IRR for an additional FiT quota,” Petilla added.

Industry stakeholders, such as Manila Electric Co. and AboitizPower, have asked the government for a clearer policy on the country’s power-generation requirements.

Meralco Chairman Manuel V. Pangilinan had said that investors would want to be assured of security, adequacy and reliability of power supply. As such, the government should come out with a clear policy identifying the power demand, supply deficit and type of fuel source needed for a certain period of time.

Sen. Ferdinand “Bongbong” Marcos Jr., chairman of the Senate Committee on Local Government, on Wednesday upheld the standing policy of the Department of Labor and Employment (DOLE) dissuading the declaration of additional special nonworking holidays in the country.

Marcos approved at the committee level 17 bills seeking to declare holidays to commemorate significant historical events in different areas of the country, but only as special working holiday, instead of the original proposals for special nonworking holiday.

Marcos noted that private businesses have raised objections against declaring additional nonworking holidays as they would incur additional cost with payment of holiday premium for their workers without corresponding productivity increase.

In addition, Marcos said that based on studies, our country already has the most number of holidays compared to its neighboring countries in the region.

“Those have been cited as the reasons to why the DOLE has always taken the position that we do not make anymore nonworking holidays,” Marcos stressed.

The committee approved the bills after the respective authors agreed to amend their proposals and call instead for the declaration of special working holiday. Recto Mercene

dnd denies seeking 7% commission on huey deal

The Department of National Defense (DND) has denied allegations that Secretary Voltaire T. Gazmin sought a “7-percent commission” in exchange for awarding the P1.2-billion refurbished "Huey" contract to Rice Aircraft Services Inc. “The allegations of Rhodora Alvarez are figments of her imagination. The SND [secretary of National Defense] has never asked nor issued instructions to seek favors from any entities nor manipulate transactions that would violate the public trust and result in a disadvantage to the government,” DND Spokesman Reuben Peter Paul Galvez said.

He also said that Gazmin had strict instructions to all DND officials to avoid acts of impropriety in all their dealings or acts that might be wrongly perceived.

Alvarez, an employee of the Bureau of Internal Revenue, said in her sworn statement to the Senate Blue Ribbon committee that she learned about the alleged “commission” in a “secret” meeting between DND Undersecretary Fernando Manalo and RASI president Robert Rice, Jr., inside the DND official’s office in November 4, 2013. PNA

A6 Thursday, June 11, 2015

Opinion BusinessMirror

editorial

China after the bubble

C

HINESE Premier Li Keqiang says that rebalancing China’s economy will be as painful as “taking a knife to one’s own flesh.” That may not be much of an exaggeration.

The news on China’s economy is bad. Growth has slowed to a little over 5 percent (quarter on quarter, at an annual rate); prices are falling; consumer confidence is weak; corporate and local-government debts remain dangerously high. Even now, a well-managed exit from the country’s credit binge may be possible, but an entirely painless one is not.

Trying too hard to delay the inevitable will end up making things worse.

What scares the government most is the prospect of a wave of corporate and municipal defaults.

According to Mizuho Securities Asia, local governments have borrowed as much as $4 trillion, mostly through shadowy off-balance-sheet financing vehicles; around $300 billion of that debt matures this year.

Plunging property prices and declining land sales—as well as slower manufacturing investment as companies focus on paying down debt—are worsening the problem by squeezing demand and holding back growth. Several economists expect China to have difficulty meeting its target of 7-percent growth in gross domestic product this year. Slower growth will make it even harder for local governments to make their payments.

Beijing is leading an effort to restructure the borrowing and make it more transparent—but the plan envisioned won’t cover all the debts coming due this year. China’s State Council recently admitted as much, telling banks to roll over some of the obligations. The directive was understandable; even so, forcing banks to prop up local governments means throwing good money after bad. The problem isn’t solved, and the day of reckoning, when it comes, will be worse.

Meanwhile, applying much the same logic, the government has talked up a stock market that now looks wildly inflated. Since last summer, it has been urging households to invest, and official reassurance follows every market setback. Even after a 6.5-percent plunge on May 28, the Shanghai Composite is still up 127 percent over the past year, despite the slowing economy and falling profits. On the tech-heavy Shenzhen Composite Index, price-to-earnings ratios in excess of 100 aren’t uncommon. Small investors are behind the run-up—two-thirds of them without a high-school education and many borrowing heavily to place their bets. The government wants to avoid the slump in demand that would follow a market crash. Again, the impulse is understandable. And again, the longer the adjustment is delayed, the bigger the crash will be. One of Li’s central goals has been to improve the allocation of capital within the Chinese economy. Despite the difficulties and the risks, the government needs to get on with that job.

Officials are said to be considering doubling the size of the program to swap local-government debt into bonds of longer maturity, which would be a welcome move. Because demand is low and prices are falling, the central bank could consider a quantitative-easing program that, in effect, would nationalize some of the distressed debt. The Bank of Japan has done something of the kind.

Meanwhile, the government should create one or more institutions, similar to the US Resolution Trust Corp., to help purge banks, state-owned enterprises and local governments of excess debt. To avoid encouraging overborrowing in the future, Beijing would need to back this up with stronger financial regulation.

Easing the stock market down from its irrational highs without causing an outright collapse of confidence won’t be easy. China has struggled with this before, and not with great success. It wouldn’t hurt for the government to use state media more consistently to warn of the dangers of excessive exuberance.

Announcing a gradual schedule of curbs on margin lending might give investors time to unwind their positions in an orderly fashion. If Beijing goes ahead with plans to allow certain individuals and institutions to invest abroad, some money could naturally drain out of the frothy market.

Defaults and volatility can’t be avoided altogether, as Li well knows. Still, there’ll be less of both if the government acts with more resolve, and sooner rather than later. Bloomberg editorial

‘Commando stock investing’ John Mangun

OUTSIDE THE BOX

O

N May 25 the Philippine Stock Exchange Composite Index (PSEi) closed at 7,761. The following day the title of this column was “The PSE is Going Lower.” Since then the market has lost a little over 5 percent.

The reasons for the selling pressure that has taken stock prices lower are numerous. Lower than expected first quarter economic numbers as well as also lower than expected growth in imports and to a lesser extent exports are also cited. The primary rationale is concerns over the sometime-in-the-future interest rate increase by the US Federal Reserve. Of course, behind all the analysis is that the prices on the PSE are higher in comparison to other regional stock markets.

It is all well and good to try to understand why investors are selling their holdings and pushing prices down. Yet, few if any investors wake up in the morning thinking about any of these concerns as they push the “sell” button.

Sellers sell because they believe that the price today is the highest it is going to be in the near future.

Stock markets investors and traders are really trying to outguess the other guy. We want to buy before anyone else does and sell the same way. The reality is that the majority of buyers and sellers are always late to the party. Otherwise, they would not be the “majority.”

Those with a vested interest in keeping money in the market—stockbrokers and those who make a living from commissions—are always either rationalizing the reason for selling pressure or speaking of the fall in prices as a temporary phenomena that should be ignored. They idea is that you can always buy, even in a falling market, because prices will always go higher in the long term. They tend to forget history like the bear market on the PSE from 1996 to 2003 when the index fell from about 3,000 to 1,000, or from 2007 to 2009, when the index dropped some 50 percent.

Certainly over a long enough period, stock-market investments have proven to be the most rewarding. But what if this time, unlike in 2013, we have reached a long term top on the PSE and price are going to fall in a long term, perhaps, for a multiyear bear market? That is what the experts never want to consider for their investors. It is bad for business.

I wrote in May that the PSEi falling 10 percent would not surprise me at all. That 10-percent projection was not arbitrary or based on some textbook definition that a 10-percent drop is a “correction” and that out stock market is in need of a correction. Stock markets do not need corrections to be healthy any more than you need to get sick to be healthier.

You might assume that getting sick builds up your immune system and maybe that is good for the long term.

But that is not true for the markets.

As long as people believe that prices will be higher in the future, they will buy and prices will go higher.

Currently, those who are sitting on cash do not believe prices are going higher and holders agree. That is obviously why prices are going down.

But no everyone is pessimistic and until the majority is either on the optimistic side or the pessimistic side, we will not have a reversal from the current downtrend.

If you are believer in a single strategy like “averaging down” as prices

Reform Fifa? Treat women fairly first

W

By Kavitha A. Davidson | Bloomberg View

ITH new revelations by the day, it becomes increasingly clear how deep the trouble in Fédération Internationale de Football Association (Fifa) runs and, accordingly, the magnitude of reform required to salvage it. Amid the myriad options, let’s not let one important goal get overlooked: changing the unequal treatment of women’s soccer.

The sexism in Fifa has been just as rampant and much more overt than the alleged bribery, long predating last week’s indictments and this week’s announcement of resignation by President Sepp Blatter. In October a group of 84 women soccer players from 13 countries sued Fifa for forcing them to play on turf in the Women’s World Cup, which kicks off on Saturday in Edmonton. Compared to grass, turf is especially rough on the skin, resulting in severe cuts and bruises and a higher rate of certain types of injuries. The fear of direct contact with turf causes players, both men and women, to adjust their style of play, executing fewer slide tackles and shorter passes and resulting in a much more cautious game.

Moreover, no major men’s tournament—including the World Cup and Champions League final—has ever been held exclusively on turf. Fifa has indicated that the men could play on turf “sooner rather than later,” but as of now, it seems content to experiment on the women’s game first.

Ultimately, Fifa did what Fifa does: It bullied its opponents. The women

dropped their lawsuit in January after several countries’ federations threatened some players with suspensions, while Fifa used the bluster of its team of top-dollar lawyers to delay court proceedings.

But the legacy of that failed lawsuit remains: Fifa doesn’t take women’s soccer seriously, an attitude it’s been quite open about for years. Back in 2004 Blatter suggested players wear “more feminine clothes” to raise women’s soccer popularity. He helpfully explained that women in “tighter shorts” fit the “feminine aesthetic” of the women’s game.

It’s a common tactic in undermining women’s sports—using differences in equipment, regulations and style of play to cast the women’s game as an inferior product to the men’s. We’ve seen it with the constant dismissals of the Women’s National Basketball Association, and in Fifa, the strategy extends far beyond the pitch.

Women are strikingly missing from the higher ranks of Fifa’s power structure; as the Guardian’s Penny M. Venetis notes, just three of the 27 executive committee members are women, none

of whom hold any real power. Blatter chalks this up to the supposedly masculine nature of the sport. “Football is very macho,” he said in August. “It’s so difficult to accept [women] in the game. Not playing the game, but in the governance.”

Given the revelations of the past week, we can’t be too surprised that a group of men who can’t seem to govern themselves have failed so spectacularly at governing women, too. But women might hold the key to reforming Fifa, to preventing the old boys’ club tactics from continuing into the future. Transparency International highlights several studies to this end, showing that “higher levels of women’s participation in public life are associated with lower levels of corruption.”

One of these women could well be Alexandra Wrage, an anti-bribery expert who resigned from Fifa’s Independent Governance Committee in 2013. According to Wrage, two senior Fifa executives had urged her to “stop putting forward female candidates for these governance positions”—specifically, positions on the ethics committee tasked with investigating Fifa corruption.

Wrage ultimately quit because she felt Fifa was blocking her recommendations for reform. These included independent oversight of the executive committee, disclosure of executive pay and an overhaul in the World Cup bidding process— recommendations that “amounted to nothing more than commonsense textbook corporate governance and best practices in compliance,” according to the advisory panel Wrage sat on.

fall or “cost-averaging” over the long run, then stock to your strategy and hope for the best. And by “hope for the best” I mean hope that this is not the beginning of a replay of 1996 to 2003. If it is a replay and you follow either f the above strategies, you will also need a replay of 2009 to 2015 just to get back to above even. Remember, over the past 13 years, the average annual return on the PSE has been 7 percent. That’s not bad unless you had to sell out in 2000, 2003 or 2009.

Some—maybe much—of our wisdom about the stock market is proven wrong by practical experience. For example, the experts say to diversify your holdings. Unfortunately, the empirical evidence says otherwise. I think that stock-market traders and investors should follow the motto of the Russian Special Forces unit Spetsnaz; “By Sea, Land, and Air We Prosper.” In other words, you must have a strategy and plan for every scenario. I call it “Commando stock investing.”

Where is the PSE going? It does not really matter as long as you are properly and thoroughly prepared.

E-mail me at mangun@gmail.com.

Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

As Fifa struggles to figure out where to go from here, promoting more women within its executive ranks would be a good place to start. Promoting the women’s game through national development programs and international marketing campaigns would be show of good faith

by Fifa that the organization is finally ready to embrace change. And contrary to its place in men’s soccer, the US is in a good position to take a leadership role in a women’s initiative, with the success and star power of its women’s national team—a chance to make up for the missed opportunity of failing to promote women’s soccer following the 1999 Women’s World Cup. At the very least, backing women’s soccer could be a shrewd business move for those sponsors struggling to balance its public messaging with its marketing interests in Fifa’s increasingly damaged brand.

When Visa finally broke its silence with a strongly worded statement condemning the corruption allegations, its careful wording served to separate the game of soccer from Fifa itself. It’s a smart angle, allowing sponsors to continue to associate with the world’s most popular sport while dissociating itself from what could be the world’s most corrupt sporting body.

“Our sponsorship has always focused on supporting the teams, enabling a great fan experience, and inspiring communities to come together and celebrate the spirit of competition and personal achievement,” Visa said. There’s no reason women in soccer can’t be the core of that approach.

opinion@businessmirror.com.ph

Opinion

Bad debts

Fruitful in old age

BusinessMirror

Atty. Rodel C. Unciano

Msgr. Sabino A. Vengco Jr.

Tax Law for Business

Alálaong Bagá

F

I

OR the purpose of determining the taxable income of a taxpayer engaged in trade or business or engaged in the practice of a profession, Section 34(E) of the Tax Code of 1997 allows the deductibility of debts actually ascertained to be worthless.

t is good to give thanks to God, because for one, the righteous shall be fruitful even in old age (Psalm 92:2-3, 13-14, 1516). Indeed the reign of God grows and produces in its own mysterious ways in instances and places least expected (Mark 4:26-34).

Revenue Regulations (RR) 5-99, as amended by RR 25-02 provides the requisites for valid deduction of bad debts from gross income, to wit: 1) There must be an existing indebtedness due to the taxpayer which must be valid and legally demandable; 2) The same must be connected with the taxpayer’s trade, business or practice of profession; 3) The same must not be sustained in a transaction entered into between related parties enumerated under Section 36(B) of the Tax Code of 1997; 4) The same must be actually charged off the books of accounts of the taxpayer as of the end of the taxable year; and 5) The same must be actually ascertained to be worthless and uncollectible as of the end of the taxable year.

Before a taxpayer may charge off and deduct a debt, he must ascertain and be able to demonstrate with reasonable degree of certainty the uncollectibility of the debt. The commissioner of internal revenue will consider all pertinent evidence, including the value of the collateral, if any, securing the debt and the financial condition of the debtor in determining whether a debt is worthless, or the assigning of the case for collection to an independent collection lawyer who is not under the employ of the taxpayer and who shall report on the legal obstacle and the virtual impossibility of collecting the same from the debtor and who shall issue a statement under oath showing the propriety of the deductions thereon made for alleged bad debts. Thus, where the surrounding circumstances indicate that a debt is worthless and uncollectible and that legal action to enforce payment would, in all probability, not result in the satisfaction of execution on a judgment, a showing of those facts will be sufficient evidence of the worthlessness of the debt for the purpose of deduction.

In Court of Tax Appeals Case 8541, the tax court disallowed the deductibility of a taxpayer’s bad debts from its gross income due to the taxpayer’s failure to comply with the requirements of establishing the worthlessness of a debt. In this case, the petitioner taxpayer was able to convincingly establish the following: i) existence of indebtedness due to petitioner; ii) the said indebtedness due to petitioner is in connection with its business; and iii) the amounts due to petitioner were actually charged off in its books of accounts.

However, petitioner failed to show supporting documentary evidence to prove that it exerted

Proclaiming to the end God’s kindness

diligent efforts to collect and that its receivables are worthless. The tax court noted that the testimony of petitioner’s accountant that the company’s agents and president repeatedly made several follow-ups and visits to the petitioner’s debtors to demand payment is simply self-serving evidence. Petitioner, likewise, failed to establish that it is not related to its debtors, which is an equally important requirement for deductibility of bad debts expense pursuant to Section 3(3) of RR 5-99, as amended by RR 25-02.

Citing GR 118794, the tax court ruled that, in the absence of supporting documentary evidence, petitioner’s allegation and the testimony of its witness are too weak and unconvincing to establish that petitioner exerted diligent efforts to collect and that its receivables are worthless.

More so, petitioner failed to show compliance regarding the sending of statement of accounts and collection letters, giving/assigning of the account to a lawyer for collection, and the filing of a collection case in court.

Petitioner argued that its debtor’s total current liabilities exceeded its total current assets which, according to petitioner, may have an effect on its ability to continue operating in the normal course of business. However, the tax court brushed aside such argument ruling that such a financial condition should not ipso facto lead to a conclusion that the debtors debt to petitioner will not anymore be paid even in the future. In fact, debtors total assets of P357,101,000 consisting of total current assets of P248,304,000 and total noncurrent assets of P108,797,000 is more than enough to pay its total liabilities of P250,138,000.

Hence, to ensure deductibility of worthless receivables, it is important to document every effort to collect the same for a mere oral testimony does not suffice.

Atty. Rodel C. Unciano is a senior associate of Du-Baladad and Associates Law Offices, a member-firm of World Tax Services Alliance. To contact the author of this column: Atty. Rodel C. Unciano at rodel.unciano@bdblaw. com.ph or call 403-2001 local 140.

The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice.

The psalmist starts off with the conviction that it is proper and right to give thanks to God and sing praises to His name. Day in and day out, at dawn and at night, it is good to acknowledge and proclaim God’s loving kindness (hesed) and faithfulness (emuna), our experience of the divine love in our covenant relationship with a kind and faithful God. God’s goodness elicits our thankfulness, and such gratitude and appreciation characterizes the righteous, who will certainly flourish even more.

In the imagery of the natural world, the upright person is compared to the palm tree robust under the sun and like the neighboring cedar of Lebanon sturdy and longliving on the ground. The blessings of the righteous are assured because they are like trees planted near water, faithful ones living in God’s presence, the source of life. Staying

Bloomberg View

T

HE repeated willingness of Greece and its creditors to bring the entire euro area to the brink of disaster presents a difficult and fascinating question for economic theorists: What game are they really playing?

On the surface, it seems like a classic game of chicken, in which each side tries to look determined enough to make the other crumble. The creditors, including the European Union, the International Monetary Fund and the European Central Bank, insist that they can’t provide any more debt relief or loosen their austerity demands any further. Greece pushes for more, suggesting that it is willing to default on its debts, possibly triggering an unraveling of the monetary union, if it doesn’t get its way.

Itmightalsobeaprisoner’sdilemma,

as my Bloomberg colleague Justin Fox suggested back in February. Both sides would be better off if they cooperated, but distrust prevents them from doing so. As a result, the creditors keep demanding terms far too onerous for Greece to meet, and Greece edges toward a disorderly default that would be the most costly outcome for the creditors. This interpretation, though, assumes that the potential gains and losses for both players are roughly symmetrical—a condition that doesn’t necessarily hold here, given the immense downside for Greece.

Hence, another classic game—the ultimatum game—might provide a better analogy. In the game, a player receives some money—say, $100—but can keep it only by convincing a second player to accept part of the sum.

If both parties are interested solely in maximizing their financial well-being, the first player should be able to offer as little as $1. After all, for the second

The land yields fruit

Parables are brainteasers to guide us to make the connections that lead to deeper meanings. Metaphors and comparisons are not just clever literary devices to excite our imagination and delight our minds; they enable us to go beyond the surface of things, leaping into a world of meaning closed to strict rationality or precise definitions. Parables and symbols

can take us beyond ordinary experience into the mysterious, at times the only way we have to describe the incomprehensible presence of God in our midst.

The mysterious reality of the kingdom of God comes within our grasp when compared to the invisible working of seed scattered on the land. The man who has planted seed on the ground goes about his life day in and day out, rising and sleeping, while the seed left on its own also follows its own cycle within the earth, growing stage by stage on its own and bearing fruit in its own secret way.

Humans may plant the seed and watch it grow and harvest its yield, but the seed works in its own way beyond our immediate scrutiny or human invention. So the reign of God among us: it takes root and thrives in the world in its own mysterious ways, in places least expected, among the poor and the suffering and those who are inconsequential.

The large branches of a mustard seed

Parables are intended to make a point, not merely describing things accurately but exaggerating if need be to drive the point home. A mustard seed is not really the smallest of all seeds in the world, nor is it the largest plant when grown up. But it is in reality a negligible seed that produces a sizable plant. It illustrates the phenomenal growth of the reign of God. The inconsequential fishermen of Galilee providing the initial group

Stock boom chokes China’s reform plan William Pesek

BLOOMBERG VIEW

I

N the past 12 months, China’s stock boom has created $6.5 trillion, equivalent to more than two-and-a-half times the UK economy. That sum could fund 65 Asian Infrastructure Investment Banks, buy Apple eight times or rid South Korea of its household debt problem seven times over. It amounts to the greatest stock rally in history.

But as the spoils get counted, it’s important to consider the costs. The biggest one is President Xi Jinping’s economic reform program.

Lost amid the superlatives about the Chinese stock boom is how the country’s bond market has suffered because of it. China has loads of debt—the $4 trillion issued by local governments alone exceeds Germany’s economy—but lacks a functioning secondary market that can act as a shock absorber in times of financial turmoil. Xi seems to understand that stimulating demand for bonds will be the key to avoiding a devastating debt crisis, and, to that end, the Chinese government has unveiled a plan to swap local-government loans for lower-yielding securities. China’s central bank, meanwhile, is boosting

What game is Greece playing?

By Mark Buchanan

close to God, in the house of the Lord and in the liturgy of the community, is to flourish “like a tree planted by streams of water. It yields its fruit in season and its leaves never wither” (Psalm 1:3). God is the rock who never fails His faithful ones, who shall be full of vigor and fruitful even in old age. “Even in my old age and gray hairs, God, do not forsake me, until I proclaim your might to all generations to come.... You have done great things, O God, who is like You?” (Psalm 71:18).

Thursday, June 11, 2015

player, $1 is better than nothing.

When real people play the game, though, that’s not how it works out.

The second player tends to reject any offer less than $30, seeing it as insulting. As a result, neither player gets any money. The game reaches inside people and stirs up deep emotions, demonstrating that humans are not dispassionate economic calculators. You can’t understand it without thinking about human perceptions of fairness, justice and honor.

This seems to fit the current situation in Europe. The creditors think Greece, in a position of weakness, should be grateful for the relief they’ve offered and get on with economic reforms. After all, it’s better than nothing. Yet Greece, while recognizing the need for reform, sees that the creditors can afford to do more and feels insulted by the suffering it must endure.

If necessary, the Greeks are ready to risk blowing up the euro to preserve

credit to recapitalize provinces and increase demand for their assets.

The stock boom, however, is interfering with these plans. The more the stock exchanges in Shanghai and Shenzhen surge, the less interest traders have in bonds. In fact, there’s an ongoing run against funds that buy debt at all: Bond funds and wealth-management products have suddenly been overwhelmed, at the worst possible moment, by redemption pressures.

Municipal bond issuance is expected to reach $285 billion this year, four times as much as in 2014.

Those sales will include securities that are supposed to allow local government to exchange at least $161 billion of maturing high-cost debt.

But it’s possible no buyers will show

their independence and dignity.

From this perspective, it’s not really an economic confrontation at all.

The technicalities of funding mechanisms and repayment schedules are merely the instruments through which power is being exerted from one side and resisted from the other.

So when Greek Prime Minister Alexis Tsipras called the creditors’ latest proposal “absurd,” it might have been because, from the broad perspective of human decency, it was absurd. And when Jean-Claude Juncker, the chief executive of the EU, reportedly refused to answer a subsequent phone call from Tsipras, he might have done so because he was completely flummoxed by Greece’s irrationality.

The ultimatum game teaches us that the Greek standoff can’t be understood through the lens of economic rationality alone. Those who attempt to do so risk making a costly miscalculation.

up, thus killing a vital reform initiative in its infancy.

The absence of active markets for corporate, mortgage- and assetbacked securities and tax-exempt IOUs offers corporate China only one real option for raising capital: initial public offerings that blow the country’s stock bubble even bigger. But the absence of a healthy bond market could create wild swings not only in Chinese equities, but the country’s broader economy. Asia’s 1997 crisis demonstrates how. As stocks plunged that year, the region had few liquid debt arenas, so investors felt they had no choice but to flee for other markets in order to swap their assets.

The resulting capital flight toppled several Asian economies.

You’d think that with Shanghai and Shenzhen shares up 152 percent and 185 percent in 12 months, investors might be interested in diversifying into “AAA” corporate bonds.

You’d be wrong. Mainland trading is being driven by sheer momentum, not rational investing strategies. On Tuesday, stocks barely reacted to data showing deflation is on China’s horizon; nor have they shifted in response to news that producer prices fell 4.6 percent in May. Beijing bears some responsibility for the stock market bubble. Part of the reason individual investors have been racing to open trading

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of believers, sinners and the poor summoned to live the Gospel, the despised and the outcasts blessed— what a negligible but strange beginning. And when God’s reign starts anywhere even today, it is usually in a modest handful of believers that the miracle of life and amazing growth in God’s grace comes to flow.

The plant grown from a tiny seed puts forth large branches, so that the birds of the sky can roost there and shelter given to all. The universality or catholicity suggested underlines further the amazing and the mysterious in the working of divine grace.

A mustard seed, tiny as it is, helps us to see that the smallest can truly become the greatest.

Alálaong bagá, the ordinary time in our liturgical season following Easter is just that, ordinary. Not because it is banal and uneventful, but because the normal realities of life, average and even routine, actually abound with theological significance and religious relevance. The cedar or a palm tree began as a seedling and took years to grow, just as the maturity and moral integrity of a person develops gradually. A mustard seed grows beyond its limitations to become amazing. Rooted in God and flourishing in God’s presence, one can be fruitful into old age.

Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.

accounts—an unprecedented 4.44 million new stock accounts in the week ended May 29 alone—is they have reason to believe the Chinese government is determined to keep stocks racing upward. Beijing has been considering allowing brokerages to roll over margin trading contracts, a sign it wants shares even higher.

China has played host to financial bubbles before, including the property and credit bubbles that Beijing blessed in the aftermath of the global financial crisis. But the stock surge is arguably the most dangerous one yet, as hundreds of millions of mainland investors leave the country’s most pressing economic needs entirely neglected. China’s ailing bond markets has made it more difficult for Xi to repair regional-government balance sheets.

They may also sap the government’s confidence when it comes to tolerating the big debt defaults needed to chasten runaway borrowing.

Beijing could always curtail its support for equities, of course. That might increase demand for bonds might increase and invigorate Xi’s plans for a more vibrant and mature financial system. But, for now, Chinese authorities still seem content to continue filling the punchbowl—and traders seem more than content to keep drinking from it.

Rajah Travel thanks ‘BM’ MAIL

Please e-mail your letters to the editor to opinion@businessmirror.com.ph.

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Warm greetings from Rajah Travel Corp.!

Thank you for your support of the event A Salute to Valor: Palawan—70 Years of Freedom on April 22.

Your assistance in promoting the event helped to make it more meaningful.

We are happy to share with you

a copy of some of the event photos and videos.

The same-day edit video and the AVP played during the event features an original composition by Reginald Espiritu entitled “A Salute to Valor” which was created specifically for the event.

More photos may be found at the following links: 1. Dropbox : http://tinyurl.com/ q8ojjsz 2. Facebook: www.facebook.com/ palawanliberation 3. Instagram: www.instagram. com/palawanlib Please accept our heartfelt gratitude. We look forward to working with you closely again in the future.

Aileen C. Clemente Chairman and President Rajah Travel Corp.

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PostalBank seeks Malacañang backing on plan to raise capital to ₧2 billion

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he Philippine Postal Savings Bank (PostalBank) has asked Malacañang to endorse the plan to double its authorized capital to P2 billion—as part of the larger effort to make the state-owned lender more competitive with the privately owned banks—as the entire region moves into financial integration beginning next year.

PostalBank CEO Josie de la Cruz, also postmaster general at the Philippine Postal Corp. (PHLPost), said the board-approved measure has since been sent to the Office of the President, which was also being asked to decide on whether the lender was better off sold to private owners or remain in government hands.

Finance Secretary Cesar V. Purisima had long wanted to sell the bank and has encouraged the entry of strategic investors, both foreign and local.

According to de la Cruz, a local universal lender has approached PostalBank executives to try to acquire the thrift unit, which reported preliminary profits totaling P120.74 million last year.

“There is interest in us because we are one of the few financial institutions with ready access to rural retail borrowers,” the former Bulacan province chief executive said.

She acknowledged the government is ambivalent on the issue of privatization because the PostalBank plays a complementary role in the operations of the PHLPost and the mailing services the agency continues to deliver. “[But] there is a need to sell the bank because of the higher capital requirement imposed on us by the Bangko Sentral ng Pilipinas [BSP].

With a higher capital, we can open even more branches, and this is why we are open to the entry of private investors,” de la Cruz said.

She also said the bank welcomes the idea of selling the lender to domestic or foreign interests because the higher capital requirement imposed by the BSP has put in doubt the government’s ability to meet its mandate.

But whether the sale involves a lock, stock and barrel transaction where even the lender’s banking license is disposed or only the ac-

Glassdoor survey shows top 25 highest-rated CEOs in America, as judged by their employees

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lassdoor, the careers web site, has just released its third annual Employees’ Choice Awards for the Highest Rated CEOs. The survey is based solely on the input of employees who anonymously and voluntarily provide feedback through the Glassdoor company review survey.

Glassdoor leaves the survey open year-round to all employees, and says this encourages feedback on whether they approve or disapprove of how their CEO is leading the company.

This year the top 5 CEOs were Google’s Larry Page, Nike’s Mark Parker, HEB’s Charles Butt,

Facebook’s Mark Zuckerberg and Ultimate Software’s Scott Scherr.

There was a bit of movement in the rankings, as well. Google’s Page jumped to the top spot after coming in at No. 11 on last year’s list. LinkedIn’s Jeff Weiner, who was number one last year with a 100 percent approval rate, dropped to No. 12.

And of the 50 CEOs that made the list this year, 30 of them did not make the cut last time around.

Some of those newcomers are Chevron’s John Watson, Sephora’s Calvin McDonald and Airbnb’s Brian Chesky. Bloomberg News

Here’s a full look:

■ Google’s Larry Page ............................................................................................97 percent ■ Nike’s Mark Parker ...............................................................................................97 percent ■ HEB’s Charles Butt ...............................................................................................96 percent ■ Facebook’s Mark Zuckerberg ..........................................................................95 percent ■ Ultimate Software’s Scott Scherr ...................................................................95 percent ■ Monsanto’s Hugh Grant ....................................................................................95 percent ■ Goldman Sachs’s Lloyd Blankfein . ................................................................95 percent ■ Northwestern Mutual’s John Schlifske ........................................................95 percent ■ Insight Global’s Glenn Johnson .....................................................................94 percent ■ Apple’s Tim Cook .................................................................................................94 percent ■ Expedia’s Dara Khosrowshahi .........................................................................94 percent ■ LinkedIn’s Jeff Weiner ........................................................................................93 percent ■ Costco Wholesale’s Craig Jelinek ...................................................................93 percent ■ T-Mobile’s John Legere . ....................................................................................93 percent ■ Edward Jones’s Jim Weddle .............................................................................93 percent ■ Chevron’s John Watson .....................................................................................93 percent ■ Sephora’s Calvin McDonald . ...........................................................................93 percent ■ EY’s Mark Weinberger........................................................................................ 93 percent ■ Proctor and Gamble’s A.G. Lafley ..................................................................92 percent ■ SolarCity’s Lyndon Rive .....................................................................................92 percent ■ Salesforce’s Marc Benioff ..................................................................................92 percent ■ Yelp’s Jeremy Stoppelman ...............................................................................91 percent ■ Paychex’s Martin Mucci . ...................................................................................91 percent ■ Medtronic’s Omar Ishrak . .................................................................................91 percent ■ Power Home Remodeling’s Corey Schiller .................................................91 percent

BusinessMirror Publisher T. Anthony Cabangon listens to Philippine Postal Corp. Postmaster General and CEO Ma. Josefina M. de la Cruz, who provided an update on the agency’s initiatives in developing and upgrading its system, in a forum dubbed “The Roundtable” of the ALC Media Group at its headquarters in Makati City. ALYSA SALEN

quisition of a portion of its capital structure, the entry of fresh capital that the government is hardly able to provide at this point is considered critical to the lender’s financial future, de la Cruz said.

“We have to shape up because, by next year, the full bankingliberalization measures put in place by the BSP will leave us far behind,” she said.

This pertains to more recent regulatory measures allowing foreign interests to take full ownership of local lenders and

Tax incentives. . .

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business entities registered with the BOI, beginning from the filing of tax returns up to the end of one-year period of validation by the BOI of applications for availment of ITH; the said prescriptive, hence, runs not upon the filing of tax returns but upon the end of the one year period for the BOI to make a validation of said applications for availment of ITH and other incomebased taxed incentives.

The measure mandates the Department of Finance (DOF) to maintain a single database for tax incentives data submitted by the BIR and the Bureau of Customs for purposes of monitoring and analysis of tax incentives granted.

The bill also directs the DOF to submit to the DBM the actual, estimate, programmed and projected tax incentives, which shall thereafter be reflected by the latter in a section in the annual Budget Expenditure and Sources of Financing (BESF), to be known as the Tax Incentives Information section.

The measure also provides that the National Economic and Development Authority (Neda) is mandated to conduct cost-benefit analysis on the incentives to determine the impact of tax incentives on the Philippine economy.

“All heads of the IPAs shall submit to the Neda investment-related data that shall include, but not limited to, the list of registered business entities, investment projects, investment cost, actual employment and export earnings,” the measure said.

The bill also said that the repeated violations of the Act shall be penalized with the cancellation of the registration of the registered business entity. “Any government official or employee who fails See “Tax incentives,” A2

exposing the industry to competition from finance leviathans better able to provide capital than the locals can.

For now, PostalBank has authorized capital of only P1 billion, of which only P500 million had been subscribed by the national government. De la Cruz said the bank has some P9 billion in assets and deposits of P8.7 billion, 60 percent of which are from government entities that include the Philippine Health Insurance Corp., the Philippine National Railways

and PHLPost. But while the bank’s deposits are essentially government’s, PostalBank lends to the private sector, particularly agrisector borrowers and real-estate entities or players.

Nevertheless, PostalBank ’s ability to lend is tied, like everyone else in the business, to the size of its capital. The need to have fresh capital, whether from the government or from someone else, has never been as critical as the need to have it injected as soon as possible, de la Cruz said. Jun Vallecera

www.businessmirror.com.ph

Honda hopes for more ‘flexibility’ in IRR of govt-led automotive program

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he local subsidiary of Honda said it is hoping for “more flexibility” in the crafting of the implementing rules and regulations (IRR) of the recently released Comprehensive Automotive Strategy (CARS) Program, as the volume requirement is “too stringent.”

Toshio Kuwahara, general Manager of Honda Cars Philippines Inc. (HCPI), told reporters that meeting the 200,000-unit production volume requirement for six years, as indicated in Executive Order (EO) 182 of the CARS Program, would be a “challenge.”

“Based on the concept of the EO, especially looking at the 200,000 bar in six years, we have to say it is not easy for us to [qualify] in the CARS Program. To be able to meet the volume requirement, we have to produce about 34,000 per year, which will not be easy,” Kuwahara said.

HCPI locally manufactures the Honda City, which is its best-selling model. Kuwahara estimates that the company made 9,000 units of Honda City in 2014.

“I expect the IRR can give us more flexibility, in terms of volume and models, so that it can be enjoyed widely and not just by a few,” Kuwahara said. The Japanese carmaker is keeping mum on its plans to ramp up production of the City pending the release of the IRR of the CARS Program.

Meanwhile, HCPI is targeting to grow sales by 20 percent this year. From January to May, Honda sales expanded by 43 percent.

“The industry is now growing by more than 20 percent, so we hope we can keep pace with [the targets] every month,” Kuwahara said.

Honda grew at a disappointing pace last year, but 2015 may be a turnaround year for the Japanese car brand as it recently unveiled a new variant of the Honda City, plus a crossover vehicle, the Honda HR-V. The HR-V, a compact crossover sport-utility vehicle (SUV), is HCPI’s bid to introduce “class-transcending” models.

The HR-V sells from P1.19 million to P 1.3 million. The model is also available in Modulo or MUGEN accessorized variants, priced at P 1.29 million and P 1.5 million, respectively.

Catherine N. Pillas

MPIC open to partnership for Calax. . .

Calax is a 47-kilometer thoroughfare that will link the Manila-Cavite Toll Expressway and the South Luzon Expressway, aimed at enhancing trade and socioeconomic activities in the region.

The private partner will take on the financing, design, construction, and operation and maintenance of the entire four-lane toll road.

The project will also include the construction of centralized toll plazas, a toll-collection system, viaducts and bridges.

Construction of the thoroughfare should start by July 2016, and should be completed by 2020. The private partner holds a 30-year concession to 2050.

The government has awarded nine contracts since the infrastructure program’s inception in 2010.

Pangilinan said the country will“only”attain tremendous economic growth if the roads, airports, railways, seaports and other related projects are fully developed.

In a news conference for provincial-based journalists shortly after the Philippine Long Distance Telephone Co. (PLDT) stockholders’ meeting at the Makati Shangri-La Manila here, Pangilinan said his companies, led by Metro Pacific Investments Corp., will invest in regional airports, including the Clark International Airport (CIA) in Pampanga, railway systems in North, Central and South

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Luzon, the P2.27-billion Light Rail Transit Line 2, which will cover areas in Pasig City, Antipolo City and nearby areas in Rizal province.

Pangilinan said he is open to the use of the North Luzon Expressway for the highspeed train linking the CIA to the Metro Manila area, including the Naia.

He said he is also eyeing to help develop the “third bridge” in the southern area of Cebu province benefiting Cordova and nearby areas. In April, the provincial board of Cebu approved a resolution authorizing Cordova to undertake a P138-billion reclamation project through a public-private partnership arrangement. With a report from Joey Pavia

FRANCHISE ASIA PHILIPPINES 2015 (From left) Samie Lim, CFE, chairman emeritus of Philippine Franchise Association (PFA); Franklin Go, president of PFA; Elizabeth Pardo-Orbeta, CFE, chairman of PFA; Sen. Cynthia Villar; Ponciano C. Manalo Jr., undersecretary of Trade and Investment Promotions Group-Department of Trade and Industry; Robert F. Trota, CFE, vice chairman of PFA; and Bing Sibal-Limjoco, CFE, vice chairman of PFA, attend the opening of Franchise Asia Philippines 2015 in SMX Convention Center in Pasay City. Franchise Asia Philippines 2015 provides the platform for franchises to grow not only in the booming Philippine market but also across the entire Asia Pacific. NONIE REYES