BusinessMirror July 11, 2015

HERE COMES THE SUN After days of heavy rains brought by typhoons Egay and Falcon, with another one expected over the weekend, Metro Manila residents could use a view such as this sunrise on Burot Beach in Calatagan, Batangas. NORIEL DE GUZMAN

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SLOWDOWN IN GLOBAL ECONOMY, CHINA REBALANCING CUT OUTWARD SHIPMENTS OF LOCAL GOODS

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HE decline in the country’s exports may continue in the coming months, on the back of weak global demand and the rebalancing of China’s economy, according to the National Economic and Development Authority (Neda).

#LOVEWINS

Forty days and forty nights

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EAR Lord, for forty days and forty nights, You were fasting in the wilderness. Tempted and yet undefiled. Shall we not Your sorrow share and from worldly joys abstain. Fasting with unceasing prayer, strong with You to suffer pain. Then if Satan on us press, flesh or spirit to assail, victor in the wilderness, grant we may not faint nor fail. So shall we have peace divine; Holier gladness ours shall be. Round us, too, shall angels shine, such as served You faithfully. May we at least try forty days and forty nights, all dedicated prayers for peace and joy in this world. Amen

TEENS AND APPS: A PARENTS’ GUIDE TO WHAT’S POPULAR— AND WHAT’S PROBLEMATIC »D3

BREAKING BREAD 2015, SAINT MARIA GORETTI PARISH, CALIFORNIA, USA AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

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#LOVEWINS http://stella-arnaldo.blogspot.com @Pulitika2010

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T WAS all because of Jim Obergefell.

His name is a mouthful and will probably not ring a bell to most of us, but to many of our gay friends and transgenders, he is virtually a hero.

Because it was his case that was decided on by the United States Supreme Court (Scotus) on June 26, that paved the way for legalizing same-sex marriage in all 50 states of the US. (Prior to the ruling, same-sex marriage was already recognized in only 37 states and Washington, D.C.) This means that same-sex married couples will now be able to adopt children within the US far easier than before; are now entitled to health care, insurance and retirement benefits under policies paid for by their employers; along with spousal benefits under the federal pension plan in case one of them dies, among others. In the case of Obergefell, he now gets to sign his name as the surviving spouse on the death certificate that would be issued by Cincinnati, where he and his late husband, John Arthur, had resided. Arthur died of ALS in 2013, exactly 101 days after he and Obergefell got married. (They had to get married in Maryland, because Ohio didn’t recognize same-sex marriage until the Scotus decision.) Before they got married, the couple had already been together for 20 years.

“I just stood up for our marriage,” was Obergefell’s statement in a moving interview with The Washington Post in April (http:// wapo.st/1JxoEB9).

Many lawyers, legal analysts and students of the law also praise the way Justice Anthony Kennedy wrote the Scotus decision. It was romantic and yet powerful. It brought many to tears. “No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice and family.

In forming a marital union, two people become something greater than they once were. As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death. It would misunderstand these men and women to say they disrespect the idea of marriage. Their plea is they do respect it, respect it so deeply that they seek to find its fulfillment for themselves.

nnn ALKING about inclusivity, I was extremely distressed to read racist comments against Tiffany Uy, the BS Biology summa cum laude graduate of the University of the Philippines (UP) Diliman, on a Facebook post announcing her achievement of getting the highest grade in the state university’s history.

Many of the commenters seemed to be young people, and schoolmates, who ridiculed her success, because a) she was Chinese and rich, b) had strict Chinese parents who forced her to study well, and assumed that she c) would probably side with the Beijing government on our territorial dispute in the West Philippine Sea. Some comments also took potshots at UP, which they said should be for poor students. (Even if they don’t pass the qualifying exams? Really?)

Here we were talking about being inclusive and having everyone equal in the eyes of the law, and yet some people just couldn’t accept Tiffany for the smart and brilliant girl that she is—because she has Chinese ancestry.

Many anthropologists believe that the first inhabitants of our islands were aboriginal pygmies, the descendants of Aetas or Negritos, then a wave of Indonesians and Malays.

Also, history tells us the Chinese had been trading with Filipinos long before the Spaniards, Americans and Japanese colonized us, and so a large percentage of the population probably have Chinese blood no matter how miniscule. (I, too, have a tiny bit of Chinese ancestry—Qin Cha was supposed to have been the surname of our ancestor, a Chinese merchant, but he adopted “Arnaldo” as his surname, probably after his ninong, upon baptism.)

So in truth, Filipinos are a mix of all of these races. There is no “pure” Filipino race.

To suggest that people like Tiffany, who are descended from the Chinese, are not true Filipinos ignores our lessons from history and archeology. Tiffany’s critics probably don’t realize it, but their kind of attitude is the same kind that got many Jews killed in Nazi-ruled Germany during World War II. (And yet it’s funny that when Filipino-Americans win all sorts of contests and awards abroad, we all go agog claiming them vehemently as our own— even if they don’t speak a word of Tagalog, or like eating balut.)

This kind of small-minded thinking has no place in our society today. I applaud Tiffany for working hard and doing her best. Her parents must be very proud of her. She said she wants to go into Medicine to help people. I look forward to her doing just that.

So, congratulations Tiffany! Don’t let the haters get you down. n

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SOMETHING LIKE LIFE MA. STELLA F. ARNALDO

Their hope is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.”

Last December this space featured my friend Chet Vergara and his husband Neil Kaminsky who had gotten married in August. (“We’re not outsiders anymore!”, BM, http://bit.ly/1el2bcK) http://bit.ly/1el2bcK Chet tells me he was actually more excited when same-sex marriage was reinstated in California; after all, he does live and work in that state. “I think I’m more worried about the backlash the Scotus decision has opened up, i.e., clerks in certain states refusing to issue marriage licenses. I hope it does not unleash any more violence against gays.”

Still, Chet reposted his wedding photo with Neil, with the Facebook rainbow after the Scotus decision was announced. Neil comments: “This picture was taken on the best day of my life. Today is the second best day.”

It may be still a long way for same-sex marriage to be legalized in the Philippines.

A survey widely quoted in some newspapers shortly after the landmark Scotus decision said that seven out of 10 Filipinos were against same-sex marriage. I have no way of checking its accuracy, but if put against the context of priorities, many Filipinos want a Divorce Law first. A poll by the Social Weather Stations released just last March showed the three out of five Filipinos support divorce. (Even my gay friend Cirio wants the divorce legislation passed first. He says, seemingly in jest, that he needs to have an “exit strategy” before entering into marriage.)

Still, there is no denying the fact that the world is changing. It may take years or decades for an Obergefell to come up among our ranks, but it will come. The call for equality among men and women, gay or straight, is too strong to ignore.

As I said in my column on Chet and Neil, love is love. It chooses you. And when it does, who should say you can’t be with the one you love forever? It takes courage to love, and even more so to actually be with just one person for the rest of your life.

LIFE

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TEENS AND APPS Parentlife BusinessMirror

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Saturday, July 11, 2015

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Teens and apps: A parents’ guide to what’s popular—and what’s problematic

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B M R San Jose Mercury News

HIS past fall, Yik Yak whipped up serious digital drama at two Danville high school campuses.

After suddenly discovering the social-networking app with its hyperlocal focus, users at San Ramon Valley and Monte Vista high schools took advantage of its anonymous posting feature to gossip and “pile on” other students or vent about school and everything else. Most dramatic of all, unidentified students used it to wage a contest—which school would be hit by the most false fire alarms.

As students, school and police officials tell it, warnings also went up on Yik Yak just before a series of fire alarms interrupted classes at both campuses over a two-day period. That’s just one of the many stories of bad behavior flourishing in what Jim Steyer, CEO of the Common Sense Media, calls the “Wild West” of rapidly shifting social-media technology.

It seems that a headline comes out every week warning the public about some new app that promises young people exciting new ways to express themselves, be creative, chat with friends or expand their social circles. But those stories also chronicle the perils associated with apps such as Yik Yak, Whisper, Ask.fm or Snapchat. Perils include Gossip Girl-like reputation shredding, anonymous bullying, unhealthy oversharing and kids giving up private information, not just to predatory strangers, but to companies building extensive user profiles.

Many kids and teens are spending more time than ever online, prompting experts to advise parents to become familiar with some of the new products and reacquaint their families with basic principles of online safety. Certainly, unhealthy and hurtful online behavior is nothing new. Facebook, Twitter, Reddit and other established sites continue to be venues for such phenomena as “Twitter beefs”, where two or more kids insult one another in full view of their followers, according to Lauren Brown, school program coordinator for the Danville police. She’s also seen youngsters getting their sense of self-worth tied up in the popularity of their Instagram posts.

“If they post something that doesn’t get a lot of attention, they actually get upset and sometimes depressed,” she said. “This phenomenon has been getting more prevalent and is very worrisome to me.”

Recent concerns also turn to the growing number of apps that allow kids to send messages, images and videos, create anonymous online personas or even find people to meet up with. To some extent, these apps allow teens to evade adult monitoring, either because their parents don’t know about them or because they are designed to hide all conversations within the app.

Steyer and other experts understand how daunting it can be to stay current with every new online trend.

“I’m paid to write about technology and even I can’t keep up with it,” says Larry Magid, a technology writer, columnist for San Jose Mercury News and CEO and cofounder of ConnectSafely.org, a Silicon Valley-based nonprofit dedicated to education on

How comics helped my kid love reading B S F Common Sense Media

Internet safety, privacy and security.

For this reason, Magid said, it can be useful for parents to focus less on specific products and more on the general principles of safe online behavior.

“The bottom line is that you need to think critically,” he said. Amethyst Thomas, presentation coordinator for the San Ramon Valley-based nonprofit Teen Esteem, said new technology provides “tons of opportunities for parents to help their children make wise decisions about how they use their devices.”

She adds that Apple, for example, offers excellent parental controls on its devices—though parents themselves have to seek out the information.

Common Sense Media encourages kids to be respectful “digital citizens.” That means to visit a site’s safety section with their parents, avoid people they don’t know online and keep certain information private, such as addresses and phone numbers.

Despite all the alarming news, Magid sees silver linings. He thinks Yik Yak and other anonymous question-and-answer apps can serve a useful purpose if used responsibly.

If teens are struggling with personal issues, from school stress to sexual orientation, or they want to explore religious or political views that wouldn’t be popular in their social circles, they can post their thoughts and potentially receive online support.

Research also shows that most youths behave well online and enjoy positive experiences. He cites a 2011 study from the Pew Internet and American Life Project

showing that 69 percent of social media-using teens say their peers are mostly kind to one another on socialnetwork sites. Of the dozen San Ramon Valley High students interviewed earlier this month about digital drama, all said they were turned off by people being negative online. They also were annoyed by the Yik Yakrelated fire alarm pranks.

“I think it’s stupid, honestly, when people don’t have anything better to do than go online and say rude things anonymously,” said Jacob, who will be a sophomore. He declined to give his last name.

If most students are good online citizens, that’s likely because of their parents, the Pew study also found.

About 86 percent of respondents, ages 12 to 17, received advice about how to be responsible online from their parents, the study concluded.

Said Amanda Lenhart, the study’s lead researcher: “Parents really are quite important.”

SAFETY RESOURCES FOR more information about new social-media trends and safety concerns, visit the web sites for the following organizations: n Common Sense Media, www.commonsense.org n ConnectSafely, www.connectsafely.org n Teen Esteem’s “Social Media Trends,” tinyurl.com/ nrc54wq n Cyberbullying Research Center, cyberbullying.us n

WHEN HEN I was a kid, my dad read to me every night. By age 5, I was traveling nightly through the worlds of The The Hobbit Hobbit or The Lion, the Witch, and the Wardrobe. Even afternoon naps would start with a bit of poetry.

When I had my kids, I knew that I wanted to raise them to be readers. I took to heart the lessons my father taught me—that reading quickly or knowing how to pronounce long words aren’t the important things, but loving the sound of language, identifying with the characters and enjoying the journey into other worlds are what make reading fun.

By the time my youngest was learning to read, I was discovering graphic novels for myself, like Hope Larson’s adaptation of A Wrinkle in Time and Kazu Kibuishi’s Amulet series. I noticed how attracted my son was to the images in my books. He would curl up with me and stare at the gorgeous illustrations, and ask me about the characters and the stories. So we visited the comic book store and the library, and started finding all sorts of graphic novels and cool comics for younger kids.

He started spending hours poring over these books, even though he could barely read the words. The illustrations, the exaggerated characters and the way the panels were arranged to propel the stories forward were enough to keep his interest. Little by little he started reading bits out loud. He’d ask me to help him with the tougher words. And, as soon as he finished one book, he’d ask for the next in the series. His most-loved series was a tie-in to his favorite TV show, Avatar: Avatar: The Last Airbender Airbender, which gave him even more motivation to read and more backstory to each chapter.

Now he’s a reading machine—a top reader in his class! Without graphic novels, I’m sure he’d still be reading, but I’m not sure he’d be enjoying the process quite as much.

C  A

Ed-tech start-up Quipper School provides help to students A PUBLIC school in Quezon City has improved its passing rate for the University of the Philippines College Admissions Test (UPCAT) this year, and all it took was the school-wide implementation of a free education online platform.

Irene Canon of Culiat High School in Quezon City said that with introduction of Quipper School (QS) last year, their students’ UPCAT performance improved considerably.

Canon, who is assistant to the principal for administration and OIC school administrator, shared that seven of their students passed the recent UPCAT. In past years, the school was lucky to have at least just one student pass the test.

Likewise, a number of their pupils have won top prizes in a number of interschool competitions.

This was one of testimonies shared by participants in the recent National Principals Conference organized by QS. The conference was held to work with educators nationwide to find out how it can help improve the quality of education in the Philippines through technology. Participants numbering close to 600 came from as far as the Mountain Province and Davao City.

QS is a free supplemental tool for homework management that is administered online. Developed in Japan, the education platform was first implemented in the Philippines last year.

Through QS, teachers assign students homework that can be accessed free of charge through its Web page. The

PARENTLIFE

YUKI NATORI (from left), QS Philippines general manager; Masa Watanabe, Quipper CEO; Dr. Ferdinand Blancaflor Pitagan, Department of Education educational technology consultant.

homework is gamified making it fun for students and easy to use for teachers.

Making, creating, sending and monitoring homework completion is as easy as using any social-media site.

QS is lightweight and its content is always available online, making it easy for students to access their homework any time of the day on any kind of computer, whether a PC, tablet or mobile phone. Likewise, the program is aligned with the K to 12 curriculum currently being implemented by the Department of Education.

QS Business Development Officer Ryan Guerrero said, “We want to bring the benefits of Quipper School to educators and students all over the Philippines. The early results are very encouraging, and we want to work with more schools, more teachers, and more students to make it even better. The best thing is, it’s so easy to sign up and try it for yourself, as a lot of our early users have done. Just visit www. quipperschool.com for teachers to see for yourself how effective this platform is in helping you educate our youth better.”

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Relationships BusinessMirror

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How to know if your relationship doubts are deal-breakers (or totally normal) B K S www.greatist.com

DEAL BREAKERS YOU DON’T HAVE TO DEAL WITH WHILE it can be normal and healthy to question things in the course of a relationship, some situations are simply not OK. Examples include a partner who threatens you, controls you, makes you feel you’re in physical danger or repeatedly crosses a line you’ve drawn (from peppering you with questions about something you aren’t comfortable talking about, to not respecting when you say “no” in the bedroom).

Multiple counts of deception, dishonesty or outright betrayal are also warning signs. (Yes, not telling the person you’re dating about the guy or gal you’re seeing on the side totally counts as a deal breaker.) Equally worthy of ending it: If your partner repeatedly puts you down, invalidates you or belittles you, which qualifies as emotional abuse, Batshaw adds. Of course, nobody’s perfect, and part of being in a relationship means dealing with your partner’s baggage. If one partner is struggling with an addiction, eating disorder or other behavioral or mood issue, Bahar advises couples counseling, one-on-one therapy or finding a support group. However, if you start suspecting your safety is endangered, that’s a sign to call it quits, Bahar says.

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OU’VE been dating your significant other (S.O.) for a while now, and things are starting to get serious. You’ve met their family, hung out with their friends, and their clothes frequently find their way into your hamper. If you haven’t already moved in together, you might be heavily considering it.

But even though you’re definitely in love and enjoy being around your partner, you may have had a few second thoughts about this special someone, wondering if some of their quirks, habits or parts of their past are red flags.

Before you call it quits, chill. Virtually every pairedup partner has doubts about their significant other at some point along coupledom’s course, says Michael Batshaw, a psychotherapist and author of 51 Things You Should Know Before Getting Engaged. (Yep, even married people. Just ask your parents.) In fact, he believes that the real relationship doesn’t begin until the first major disappointment. “That’s the first doubt crisis—and all of a sudden you’re not as unbelievably in sync as you thought,” Batshaw explains.

Whether a duo will last is determined by what both partners do in light of those doubts, he says.

We went to the experts to find out the most common scenarios where those pesky second thoughts can find their way in, and whether they’re truly red flags for your relationship.

WHAT’S NORMAL 1. I feel attracted to someone else. So you’re out at a bar with your friends, and you find yourself in conversation with a random cutie. And then hours later, you start to panic that your interest in someone else means you should jump ship.

Hold on there. As long as you don’t send out signals that you’re actually available, harmlessly flirting ain’t a thing, says Emily Brown, a Virginia-based social worker who helps couples navigate sticky relational issues. “At some point, especially in long-term relationships, you’re going to be attracted to other people.” Keep this in mind as well if you learn that your partner was seen flirting with another person.

On the other hand, if you get another person’s number and text innuendos back and forth, not saying a thing about it to your boyfriend or girlfriend, that’s not OK. Once you veer into secrecy, you’ve crossed a line, Brown says.

2. I’m not always satisfied in bed. Maybe your partner isn’t exactly up to snuff between the sheets. (It happens.) Sexual compatibility—including the specifics of your desires, as well as how often you want to get it on—is a huge factor in couples’ happiness, Batshaw says.

But just because someone isn’t constantly blowing your mind in the bedroom doesn’t mean you should ditch them ASAP, says marriage and family therapist Lisa Bahar. “If your partner isn’t doing what you like, teach them,” she says. Remember, it’s up to you to communicate what you want. Often, asking and instructing—while keeping it playful and reserving judgment—is all it takes to get your S.O. up to speed, Bahar explains. Though if they really don’t improve over time or you feel like they aren’t respecting your needs or limits, that’s when it may just be a case of sexual mismatch, she adds.

Plus, if it’s really not working out in the bedroom, chances are it’s also not working out so well in the rest of the house (or outside of it). “Sex is a type of communication, and it tends to parallel the dynamic between partners in non-sexual realms,” Batshaw says.

Translation: If your mate constantly chatters on about him or herself during everyday conversation, they’re apt to be equally selfish once the heavy petting begins.

3. I don’t really get along with their family.

Research shows that having positive feelings toward your in-laws tends to bode for better accord and stronger ties in your relationship or marriage in the long run. However, if your potential kin aren’t exactly warm and fuzzy toward you, it’s totally normal.

According to one survey, about 60 percent of women and 15 percent of men feel chronically stressed by a partner’s family. “A certain level of doubt about whether you fit into your partner’s family is to be expected,” Bahar says.

Just make sure your partner is willing to work with you to create some ground rules—like defending you from a family member’s cattiness or excessive criticism, negotiating how much time is spent with parents and siblings, or respecting your disinterest in religious traditions that conflict with your internal values. Then this inevitable discomfort might not be a reason to flee, Bahar says.

4. I’m worried I’m settling. Wondering if you’re staying in a relationship that’s less than ideal because it’s all you’ve ever known is a not only common, but the fear is especially prevalent when partners are on the verge of a more serious commitment (think: engagement, marriage, moving in or celebrating a multiyear anniversary). Often these hesitations are mere flare-ups of anticipation anxiety, or what Bahar calls the “grass-isalways-greener” phenomenon.

The false belief that there’s a perfect soul mate out there for us can also inflame fears of commitment, Bahar explains. Research shows that if we believe there’s some flawlessly compatible “other” out there, we’re more willing to flee rather than sit down and work it out when relationship conflict arises.

If this happens, talk these feelings out with your mate, continue to explore where the both of you meet in terms of values and try not to compare yourself to other couples, Bahar says.

However, if you have a consistent sense of discomfort around your partner, you find them repeatedly unwilling to communicate or accommodate your needs, or you’re just genuinely disinterested in them, that’s not settling—those are legit concerns that could warrant a breakup, Bahar says.

THE BOTTOM LINE DOUBT is a perfectly normal part of any relationship. It becomes problematic, though, when we avoid resolving it. You’ve heard it before, but it’s worth repeating: Pretty much everything in a relationship boils down to communication, Batshaw says. It’s important to keep our partners informed about what we’re thinking so they know how to adapt. And vice versa: You’re just as responsible for listening and adjusting your behavior accordingly when your partner lets you know you’ve crossed a line.

Yes, research shows sharing some fundamental beliefs and values is essential to any relationship’s lasting potential, but you may need to examine your defensiveness if you find yourself inclined to quit a relationship simply because a partner respectfully offers a perspective that clashes with your own. Breaking up with someone because they said the wrong thing once or fell short of your expectations is a bit naïve, as is being disappointed when your partner disagrees with you, Bahar says.

Unless you’re in a clearly dangerous situation, U knowing whether you should stay with your mate or consider other options requires observing how they act toward you over time and monitoring how you consistently feel as their partner—especially after you voice concerns or feelings of hurt, Batshaw says. And a relationship in which one partner repeatedly fails to accommodate the other’s needs and boundaries is not likely to last. But, as long as couples can talk through tough issues, keep one another feeling safe and satisfied, and continue to share good times, they’re probably doing just fine. n

All you need is coffee B V V I READ somewhere that somebody’s not going to condescend dating someone who considers 3-in-1 as coffee. As to why, I don’t know. I surmise it’s because 3-in-1 is cheap, because 3-in-1 is instant, because 3-in-1 is nothing but sugar and sugar is bad for the heart.

But I learned that sharing a conversation over a cup of the real joe can also spell disaster, at least based on my experience. I invited a college “crushmate” to try with me a then-newly opened quaint coffee shop in the outskirts of the city that got raves as being “the best in town.” We both ordered the signature brew and, upon the first sip, she bit her lip and that seemed promising.

“How’s the coffee?” I asked.

“Uhm, it’s so like you.”

That’s the thing about a cup of coffee: It’s a conversation-starter.

Another thing about caffeine is that it kills your inhibition—in this case, the inhibition to confirm, once and for all, the feelings I early on knew were mutual.

“Like me?” I said. “W-What do you mean?”

“Bitter.”

The last time I went to a coffee shop, though, I went unaccompanied and I went to on business. The No. 1 coffee chain in the UK, Costa Coffee, opened its first shop at Eastwood Libis and I

was treated to Costa’s signature flat white, and mushroom and melted cheese in flat bread, along with all manners of pampering by the host and the house staff.

What’s so special about Costa Coffee, I was told, is that you could differentiate the sole coffee blend it uses, the Mocha Italia (a combination of Arabica and Robusta coffee beans), which is handcrafted, slow-roasted at a very low temperature, and created according to Costa’s 40 years of unadulterated tradition of doing things.

A bevy of ice-blended drinks, called Frostino, has been exclusively developed by Costa for the Philippines.

The habitué could either get the Mocha Cookie or Strawberry Pavlova—“Or me [cute barista]”— when you’re not in the mood for an Americano or cappuccino.

London-inspired, the Costa ambiance smells of Europe and draped with UK iconographies and heritage, the Costa roasting facility and farm estates serving as the backdrop.

Coffee shops in the UK look basically like a gentlemen’s club, conservative, classic and replete with leather seats and dark furniture, the kind you see in noir films when bad guys pounce and breach into the barroom.

But, here, the dour-ish, suaveish sensibility is refinished, and the design and space now speaks of

what they call “the Metro design,” characteristic of more vibrant furniture and punctuated by some Philippine heritage pieces, like the brick wall panel made out of Mount Pinatubo lahar.

And there was a long-table centerpiece made out of salvaged wood from Sierra Madre, which I had all to myself. Intimacy my ass.

Because I ordered the flat white and got just the right sweetness I wanted, with nary a pinch of sugar—nor a coffee mate I realized right there I don’t need in my life.

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PROTECTING VULNERABLE POPULATIONS Albay Governor Joey S. Salceda delivers a message during the annual United Nations World Population Day held at the Edsa Shangri-La Hotel in Mandaluyong City. The theme of this year’s celebration is “Vulnerable Populations in Emergencies.” NONOY LACZA

CONGRESS WILLING TO RESTORE COSTBENEFIT ANALYSIS IN TIMTA B C N. P

DEALBREAKERS D4 Saturday, July 11, 2015

The Philippine Statistics Authority (PSA) on Friday disclosed that the country’s export earnings contracted 17.4 percent to $4.89 billion in May. This is the slowest since December 2011, when exports fell 18.9 percent.

Export earnings in the first five months of 2015 declined by 5 percent to $23.52 billion in 2015, from $24.772 billion in 2014. The government is targeting to increase exports by 7 percent this year.

“The Philippines’s export performance is likely to remain constrained by volatilities in the international markets, triggered by the Greek debt crisis and the slowdown in China. Given that these external shocks cannot be prevented, government measures to mitigate the possible negative effects should be immediately implemented as warranted,” Neda Deputy Director General Emmanuel F. Esguerra said in a statement.

ONGRESS is amenable to restoring the costbenefit analysis of the economic impact of fiscal incentives in the proposed Tax Incentives Management and Transparency Act (Timta).

Sen. Juan Edgardo M. Angara, chairman of the Senate Committee on Ways and Means, made the pronouncement, after four agencies belonging to the Economic Development cluster expressed concern that the proposed measure has been “watered down” by the changes made by Congress. The departments of

PESO EXCHANGE RATES n US 45.1700

Finance (DOF),Trade and Industry (DTI), and Budget and Management (DBM), and the National Economic and Development Authority (Neda) expressed their opposition to the amendments.

In an interview on the sidelines of Toyota Motor Philippines’s (TMP) One Million Sales milestone celebration, Angara said the removal of the cost-benefit analysis is a “minor” issue, and that it will likely be restored.

“I talked to Finance Secretary Cesar V. Purisima, and the DOF wants to restore cost-benefit analysis to be done by the Neda. We will talk about it in the C  A

PLDT fast-tracking migration to digital sphere–Pangilinan

B L S. M

T

YCOON Manuel V. Pangilinan said the ongoing migration of Philippine Long Distance Telephone Co. (PLDT) to the digital sphere may be described as a form of corporate suicide.

In a world where telcos have rewired their business models from simple connectivity requirements —such as calls and texts—to a complex need for Internet services, the country’s top telecommunications firm will have to cut parts of itself to continue to prosper.

“It’s inevitable that it [legacy busi-

ness] will get eaten up by the new data, broadband, and Internet services. So, I think, it’s better to get over with that pain as fast as we can, and move over to the new business model of telco,” Pangilinan explained.

The shift is ongoing, with consumers seeing the telco investing in more Internet enablers and partnering with content providers to meet the demand of the Filipino market.

The firm has also spent billions of pesos in modernizing its network, with thousands of kilometers of fiber-optic cables laid throughout the country, and thousands of cell

sites deployed across the archipelago.

Still, these aren’t enough, especially since rival Globe Telecom Inc. is also aggressively competing in the digital space. Hence, the migration to the digital world must happen and continue over time.

“We have no choice. We have to do the digital pivot, or we perish.

In a way, I’d like to compare it to a form of corporate suicide. You have to dismember parts of yourself in order to revive yourself and prosper in the long run,” Pangilinan said.

But the shift won’t happen in a snap, he quickly added.

S “PLDT,” A

n JAPAN 0.3724 n UK 69.5076 n HK 5.8276 n CHINA 7.2752 n SINGAPORE 33.4692 n AUSTRALIA 33.5937 n EU 49.8315 n SAUDI ARABIA 12.0453 Source: BSP (10 July 2015)

A2

News

BusinessMirror

Saturday, July 11, 2015

Exports down by 17.4 percent in May. . .

Continued from A1

Esguerra said the Philippines also recorded the largest decline in export revenues among major trade-oriented economies in East and Southeast Asia.

Data showed that exports of manufactured goods registered its largest monthly decline for the year at 9.5 percent, down to $4.3 billion in May 2015, from $4.7 billion in the same period last year.

This can be attributed to lower revenues from semiconductors, machinery and transport equipment, wood manufactures, electronic data processing, and other manufactures.

The country’s top export, Electronic Products, also posted a contraction of 7.5 percent from $2.54 billion registered in May 2015. In May total receipts of electronic product exports reached $2.35 billion, accounting for 48.1 percent of total exports revenues.

Due to this, Esguerra said there

PLDT. . .

is a need to strengthen the manufacturing sector by increasing its competitiveness and productivity, and putting in place safety nets for vulnerable workers.

He added that initiatives to support agriculture and its linkage with the manufacturing sector should be also continued. These include infrastructure, financing, risk mitigation and business-continuity and contingency planning.

“Slowdown in global trade due to the weakening of China, as well as the fiscal crisis in the euro zone will certainly spill over globally.

Policy-makers should remain vigilant on the possible outcome of these external developments and how they may impact the trade competitiveness of the country, as well as the domestic economy,” Esguerra said.

The country’s top export markets in May were Japan with a 24.6-

percent share followed by the US with 14.2 percent and China with a 10.8-percent share.

Exports to Japan amounted to $1.2 billion in May 2015. This was 7.6 percent higher than the $1.12 billion recorded in the same month a year ago.

Shipments sent to the US were valued at $696 million. This is 4.7 percent lower than the $730.49 million posted in May 2014.

The country’s export earnings from China reached $529.15 million.

It went down by 62.1 percent from $1.39 billion in May 2014.

The decline in exports in the first quarter of the year was tagged as one of the major factors behind the disappointing economic growth during the period. Economic growth, as measured by gross domestic product, slowed to 5.2 percent in January to March. With a report from Janine

Ratings Services forecast that the locally listed firm will likely spend as much as P20 billion over two years to acquire more Internet players.

Earlier, Pangilinan said his company is planning to acquire at least 10 Internet firms over the next few years.

The Filipino company, one of the most valuable stocks in the local bourse, has invested significant amounts in companies such as

Rocket Internet—the company behind Lazada, Zalora and Easy Taxi—and the Malaysian Internet television provider iflix.

These initiatives, Pangilinan said, should translate to gains in the long run.

The telecommunications titan has set a P35-billion core income guidance for this year.

This was some 6 percent lower than core profits in 2014.

Marie D. Soliman

Continued from A1

“There’ll be a transition period. It won’t happen overnight. So the best we can do is to move it as quickly as we can,” he explained.

Intense competition in the digital space has forced the dominant telecommunications provider to recast its capital requirement this year to more than P40 billion.

The bulk of the amount will be used for the company’s digital initiatives. Standard & Poor’s

news@businessmirror.com.ph

Congress willing to restore cost-benefit analysis in Timta. . .

Continued from A1

bicameral committee conference, and we’re confident of a positive result,” he said. House and Ways Committee Chairman Romero S. Quimbo said he will also back the restoration of the cost-benefit analysis provision in the proposed Timta.

“I will not object to the reinstatement of the provision for the Neda.

I hope the rest of the members will support it as we will need a consensus of the majority to carry it out,” Quimbo said in a text message to the BusinessMirror.

In a joint position paper, the heads of the DOF, DTI, DBM and

IMF. . .

the Neda lamented the changes made by Congress in the bill. These two amendments are the deletion of the reporting requirement for the Neda to conduct a cost-benefit analysis on the economic impact of tax incentives; and the insertion of the “deemed approved” provision, which provides that proposed tax incentives are deemed granted if the Bureau of Internal Revenue fails to inform the Board of Investments or the concerned investment-promotion agency of its findings on whether such tax incentives should be granted.

China’s stock. . .

Continued from A8

next year because “the underlying drivers for a gradual acceleration in economic activity in advanced economies—easy financial conditions, more neutral fiscal policy in the euro area, lower fuel prices, and improving confidence and labor market conditions—remain intact,” the IMF said.

The report raised some concerns about the potential impact of failure for Greek and European leaders to reach an agreement on a new bailout. But the IMF said the risks to Europe and the broader world economy could be mitigated if a deal can be struck.

“Developments in Greece have, so far, not resulted in any significant contagion,” the report said.

“Timely policy action should help to manage such risks if they were

The four agencies said these changes are against the “spirit of transparency,” which the Timta is advocating.

While the reinstatement of Neda’s cost-benefit analysis was met by approval, both Angara and Quimbo were mum on the deemed approved provision. It was inserted in the proposed Timta to supposedly hasten the process of approval, validation and auditing of fiscal incentives.

The bicameral conference committee could meet in August, when Congress resumes session.

to materialize.”

The poor US performance in the first three months of the year, when the economy contracted at a 0.2-percent annual rate, was the main reason for the downgrade in the global outlook in 2015.

The IMF sharply lowered its forecast for US growth this year to 2.5 percent, from the April estimate of 3.1 percent. Economic growth in the US is expected to pick up next year to 3 percent, which is 0.1 percentage point lower than the April forecast.

“One-off factors, notably harsh winter weather and port closures, as well as a strong downsizing of capital expenditure in the oil sector contributed to weakening US activity in the first quarter,” the IMF said. The US problems spilled over into Canada and Mexico, the report said. AP

EXPORTS

Continued from A8

Will China try to export its way out its mess? It could decide to boost its economy and send more cheap goods to the US and other rich nations. Evidence of late, however, suggests the contrary. China has allowed its currency to appreciate against the US dollar, rather than devalue its currency.

That makes its goods pricier. And China wants the International Monetary Fund to treat its currency just like it does the yen, the euro and other big currencies held by banks across the globe. Setting up the currency for home-field advantage would work against that effort. Another limit to exporting out of an economic slump is that rich Europe and Japan and developing nations alike are all barely growing. “A quick fix seems unlikely,” concluded Frederic Neumann and Qu Hongbin, coheads of Asia research for HSBC Global Research, an arm of the big global bank HSBC. TNS

The Nation BusinessMirror

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Editor: Dionisio L. Pelayo • Saturday, July 11, 2015 A3

Iriberri assumes top Armed Forces position

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By Rene Acosta

RESIDENT Aquino installed on Friday Lt. Gen. Hernando Iriberri as chief of staff of the Armed Forces vice Gen. Gregorio Pio Catapang Jr., who reached the mandatory retirement age of 56.

Upon his assumption of office, Iriberri vowed to continue the military’s transformation road map and the counterinsurgency Internal Peace and Security Plan (IPSP) Bayanihan, which has been blamed by militant groups for the alleged spate of extrajudicial killings and other atrocities in the countryside.

Iriberri was the Army commander, until his appointment to the military’s top post. His ap-

pointment was not announced until the turnover ceremony.

With his installation as the top military officer, at least two senior Army commanders are vying to succeed Iriberri as Army commander—they are Lt. Gen. Ricardo Visaya, commander of the Armed Forces Southern Luzon Command; and Maj. Gen. Eduardo Año, commander of the 10th Infantry “Agila” Division.

Both Visaya and Año have been

Iriberri

denounced by militant groups as alleged human-rights violators.

Visaya and Año are classmates of Iriberri, being members of the Philippine Military Academy Class of 1983. Visaya was previously even a contender for the military’s top post, but it went to Iriberri.

Visaya has been linked to the massacre of workers at Hacienda Luisita in Tarlac in 2004. The estate is owned by President Aquino’s family.

On the other hand, Año, thenchief of the Army’s Intelligence Security Group, was linked to the kidnapping and disappearance of activist Jonas Burgos.

In his assumption speech, the new Armed Forces chief of staff enumerated his goals, and these are winning the peace through the IPSP Bayanihan; continuing the Armed Forces transformation road map; implementation of national policy, securing the 2016 elections; and continuing the modernization program. “We will not only win the peace, but we will secure the peace, as well,” he said, noting that 58 provinces have been declared insurgency-free or peaceful, and ready for further development, during the past seven years.

Iriberri vowed that the 2013 peaceful elections in Abra, where he was then-brigade commander, shall serve as a yardstick for the military’s performance of its mandate during next year’s presidential polls.

“In the conduct of our current security operations, we should not lose sight of starting to pave the way for a peaceful and credible 2016 national elections,” he said.

Iriberri flayed criticisms that he had been designated as the chief of staff, principally because of his closeness to Defense Secretary Voltaire T. Gazmin.

“My record can speak for myself, and I am proud to be always identified with the secretary because I learned a lot…even former chiefs of staff also had served under him.

We learned a lot from him,” he said.

Iriberri had served as Gazmin’s spokesman and senior military aide.

Iriberri, the 46th chief of staff, will serve until April 22 next year, one month before the 2016 presidential elections. However, because of the election ban on the appointment of officials, there is a possibility that Iriberri’s term will be extended by Mr. Aquino. With Marvyn

Benaning and Bea Siena

Legislator hails SC ban on distribution of contraceptives

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ARTY-LIST Rep. Lito Atienza of Buhay welcomed on Friday the Supreme Court (SC) order that stopped the Department of Health (DOH) and the Food and Drug Administration (FDA) from procuring, selling, distributing, dispensing or administering, and promoting contraceptive drugs and devices, including the implant Implanon.

“We welcome the Supreme Court’s injunction stopping the DOH and the FDA, from dispensing and promoting contraceptives that have not been tested and approved by the FDA, including the contraceptive implant called Implanon. The Supreme Court decision on the RH [reproductive health] law is very clear—any contraceptive to be used in its implementation should be FDA-approved. But the DOH is already implementing the program using Implanon, which is not appoved by the FDA,” Atienza said.

Atienza pointed out that Implanon, a birth-control patch that is implanted in the inner biceps of women, effectively renders them sterile for three years.

At the same time, Atienza

also scored Health Secretary Janette L. Garin for insisting that the contraceptive implant is safe for women.

“How can Secretary Garin claim that Implanon is safe for Filipino women, when it has not even been tested or approved by the FDA? Until now, the FDA has yet to answer the letters sent by Prolife Philippines—Is Implanon approved by the FDA or not?” Atienza added.

Atienza has also spoken with some mothers, who said they are forced to have Implanon imbedded in their skin before they are included in the government’s 4P’s program.

“This is tantamount to forced sterilization of Filipinos, and is contrary to the SC ruling on how the RH law should be implemented,” Atienza said.

Atienza, together with the Alliance for the Families, Prolife Philippines, Soldiers of Christ and Our Lady of Victories Parish Church volunteers and priests, held a prayer rally at the FDA office in Alabang in April to deliver a strong message for the FDA to do its job, and protect the health and well-being of Filipino mothers.

Comelec eyes budget revision to refurbish PCOS machines

T

HE Commission on Elections (Comelec) is looking at the possibilty of adjusting anew the budget for the refurbishing of the more than 80,000 old Precinct Count Optical Scan (PCOS) machines, following the failure of the first bidding. “ T he comm ission en ba nc is looking at ways by which we can revive the bidding, and we are considering increasing the ABC... but no decision has been made yet,” Comelec Chairman Andres D. Bautista told reporters.

Bautista admitted that the poll body is taking into consideration the inputs of several potential service providers, including the three firms that purchased the bid documents for the first round of bidding during a conference organized on Monday.

One of the complaints raised by the prospective bidders was that the approved budget for the contract was too low.

“We got inputs there...may mga nagsabi na masyadong mababa iyong

budget. We will review the budget internally,” Bautista explained.

The Comelec has an approved budget of P2.07 billion for the refurbishing of the old PCOS. T he projec t ’s or ig i n a l ap proved budget was P2.88 billion, but the amount was reduced by P805.9 million.

Last week the Comelec’s Special Bids and Awards Committee (SBAC) 2 declared failure of bidding for the refurbishing of the 81,896 old PCOS units.

The SBAC 2 declaration was prompted by the absence of submitted bid proposals, despite Smartmatic-Total Information Management Corp., Indra Sistemas S.A. and Vertex Business Applications Inc. all purchasing bid documents.

The decrease in the approved budget ceiling, according to the SBAC 2, was prompted by the removal of one component of the project, which is for the replacement of unrepairable PCOS units with new machines. Joel R. San Juan

GIRDERS INSTALLED

The installation of girders between piers signals the start of construction of the superstructure for Skyway Stage 3 (SS3). Above photos show SS3 proponent Citra Central Expressway Corp. and its contractor installing the girders or beams between piers along Osmeña Highway. Installation of more girders along Osmeña Highway is scheduled in the coming days. The activity will be undertaken from 11 p.m. until 5 a.m. the following day, when vehicular traffic is light.

Globe collaboration with police, NBI yields series of arrests

G

LOBE Telecom, the National Police and the National Bureau of Investigation (NBI) have arrested and charged 65 alleged cable thieves and fraudsters, as the drive against such illegal activities continues to intensify.

Twelve persons were arrested and are now facing prosecution for estafa due to illegal recontracting and subscription fraud, 31 for illegal sale of WiMax Modems and 20 for cable theft.

Froilan Castelo, Globe general legal counsel, said the cases should serve as a warning that Globe, in close coordination with the help of the police and the NBI, remains relentless in pursuing its campaign against all types of fraud that can

put the company’s name in bad light and negatively affect legitimate Globe customers.

Castelo also advised Globe customers to be wary of unscrupulous persons who may lure them with cheap prices for Globe products and services or shorter-term subscription period, but may cause them a lot of problems in the end.

“We encourage everyone to only transact with legitimate sellers and distributors, or go directly to any of the numerous Globe stores to ensure that they only get quality services and aftersales support. And to those who have already fallen victim to illegal activities, including cyber fraud, Globe will not hesitate to bring the perpetrators to justice,” he said.

Castelo said that, as part of its security-enhancement program, Globe has installed the most-advanced closed-circuit television (CCTV) cameras in all Globe stores nationwide. The CCTV recordings will be used to present evidence in police investigations and legal prosecution against fraudulent activities, such as identity theft, where impostors steal personal information and assume the identity of other people for personal gain.

Castelo added, “We would like to assure the public, especially our customers, that cybercrime investigation is now equally sophisticated and can yield results that will hopefully prevent similar occurrences from happening.”

Smear drive won’t stop me–Mison

By Joel R. San Juan

I

mmigration Commissioner Siegfred B. Mison on Friday vowed to pursue his campaign against graft and corruption in the bureau, even as those affected by his reforms have launched a campaign to malign him.

In a statement, Mison noted that the reforms he has put in place are now succeeding and have affected the extortion activities of some unscrupulous officers of the bureau.

“Let me serve them notice that I will not waver from my commitment to cleanse the Bureau of Immigration [BI] of graft and corruption for as long as I enjoy the trust and confidence of [Justice] Secretary Leila de Lima and His Excellency, President Aquino,” Mison said.

Mison issued the statement in response to an open letter to the President published as a fullpage advertisement in a daily newspaper, where lawyer Faisal Hussin, an intelligence officer of the BI, demanded his removal from office for allegedly betraying the President’s trust and confidence.

“Hussin assailed my character and integrity, and maligned my name in falsely accusing me of being involved in a number of incidents, which he claims constitute corrupt practices and abuses,” Mison said.

Mison said Hussin made the accusations “with malice, under false pretenses and in bad faith.”

He noted that Hussin signed the advertisement “in behalf of the officers and members of the Buklod ng Kawani sa CID,” the association of BI employees, as its president.

But, Mison said Hussin is no longer the president of the association and that the incumbent president, lawyer Gregorio Sadiasa, said that Hussin has no authority to speak for and in behalf of the association.

The BI chief claimed that Hussin is an undesirable and overstaying employee of the BI. Mison said that in 2009 Hussin falsified the date of his birth in his personal data sheet to prolong his employment and extend the date of his retirement.

He added that two years ago, Hussin, while assigned in Cebu, has also been accused of extortion before the Ombudsman by a foreign national.

“This overstaying employee is one of the leaders of a notorious extortion syndicate which has been preying on aliens and our own countrymen,” he added.

“It is obvious that the syndicate is desperately exerting political pressure and a vicious campaign to besmirch my reputation, and get me out of office to protect their racket and amass ill-gotten wealth,” he added.

Mison said Hussin’s accusations against him were mere rehash, and have already been addressed before.

BBL key to unlocking Bangsamoro economic potentials–MinBC exec

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HEproposed Bangsamoro basic law (BBL) has more than sufficient socioeconomic and development provisions that will open up opportunities and accommodate livelihood projects and jobs for its citizens, according to the Mindanao Business Council (MinBC).

“Aside from revamping the political setup of the current ARMM [Autonomous Region in Muslim Mind-

anao], the BBL also strengthens the wealth-sharing and revenue-generation of the autonomous region that can translate into improved public goods such as farm-to-market roads, agricultural facilities, and ports,” MinBC Executive Director Rolando A. Torres said.

Torres added that “such improvements will most likely encourage local and foreign investments that

will translate to economic opportunities for our Bangsamoro brothers and sisters.”

Under the Basic Law of the Bangsamoro Autonomous Region, the BBL version currently being deliberated by the House of Representatives in plenary session, the Bangsamoro government has the power to provide tax incentives to “encourage investments and other

economic activities.”

The tax incentives, according to the bill, may be in the form of exemptions from regional taxes, rebates and tax holidays, among others in addition to national tax incentives.

It also speculates that as part of the incentives to investors, the regional government may opt to impose flatrate lump-sum taxes to small and medium enterprises.

Economy

A4 Saturday, July 11, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

We’re not China: Chinoys worry about business risk

By Sharon Chen & Norman P. Aquino | Bloomberg

C

hina’s territorial assertions in the disputed South China Sea (SCS, West Philippine Sea) are making life complicated for ethnic Chinese businessmen in smaller claimant nations like the Philippines.

Filipino-Chinese businessmen or Chinoys take care to show they are on the side of the Philippines, according to Edwin Tan, president of the Palawan Filipino Chinese Chamber of Commerce. Palawan island, which draws tourists for its pristine beaches and diving, is a Philippine gateway to the SCS. “The Chinese community of the Palawan Chamber, they own the town,” Tan said in an interview in his five-story mall, the tallest building height allowed in Palawan’s capital, Puerto Princesa.

“There are doubts, there’s suspicion, they might say we’re siding with the Chinese.”

Chinese merchants have long traded in Southeast Asia. But as Asia’s biggest economy accelerates reclamation work on disputed reefs in the SCS and increases its military presence in the area, it risks inflaming historical tensions for ethnic Chinese who live and do business in the region.

Some of the most prominent businesspeople in the Philippines

are ethnic Chinese. Henry Sy, the Philippines’s richest man, was born in China and at least seven of the 10 biggest companies on the national stock exchange are run by Filipinos of Chinese descent.

Philippine census data does not provide a breakdown by ethnicity, but some reports say the proportion of the population with pure Chinese ancestry is about one percent. China was the Philippines’s second-largest trading partner in 2014, according to the Philippine Statistics Authority.

Deadly riots

Resentment has flared periodically for decades over the disproportionate influence that ethnic Chinese can have over the economies of Southeast Asia, leading to tensions with the broader population. There have been times when Chinese people were targeted in Indonesia, the Philippines and Vietnam over relatively minor incidents such as traffic accidents or brawls with Chinese traders.

Most recently, deadly riots erupted in Vietnam, after China towed an oil rig into waters claimed by the two countries in May last year. The protesters targeted factories with Chinese names, including those operated by companies from Singapore and Taiwan, forcing some of them to shut temporarily.

While there have been few signs of fresh frictions in the major Philippine cities, closer to the SCS suspicions are growing and that may impact local Chinese residents.

Palawan residents say some Chinese fishermen are spies sent to gather information, and that China’s territorial claims have emboldened its fishermen to hunt endangered turtles and argue the sea is their territory.

‘Repeat offenders’

“We’re starting to hate them,” said Alex Marcaida, 52, a division head at the Palawan Council for Sustainable Development, tasked with enforcing the law against the poachers.

“Many are repeat offenders, that’s what makes it more insulting.”

In the past, members of the Palawan Filipino Chinese Chamber of Commerce volunteered to act as interpreters for Chinese citizens facing illegal-fishing charges in Philippine courts, according to businessman Antonio Ong. “Now we hesitate to help because the locals might mistake us as supporters of the Chinese government,” Ong, 74, said in an interview. Ong, who came to the Philippines from Xiamen four decades ago, said he worries the negative sentiment

would eventually affect his business ventures that include hotels and property.

Almost two-thirds of Filipinos have little trust in China, according to a June poll by the Social Weather Stations (SWS), a Manila-based survey company. Net trust in China fell to a record -45 percent since the SWS started the poll in 1994.

Upcoming Chinatown

That isn’t yet stopping his fellow businessmen from extending their reach. A multistory “Chinatown Center” complete with tiered red pagodas is under construction in the middle of Palawan, along a street lined with Chinese shops and restaurants with names such as Chow King and Great Wall.

The US has also sought to build its influence on the island, conducting joint military exercises that have boosted business for locals, such as travel agent Mila Daquer.

Still, Filipino-Chinese have lived and done business on the island as far back as locals can remember, Daquer said.

Philippine exports fell the most in more than three years in May, as shipments to China declined from a year earlier, according to data released Friday, underscoring the nation’s reliance on the country for trade and investment.

“The Philippines should stand on her own, but we don’t have enough strength,” 47-year-old Daquer added. “We have more Chinese here and they do business here. We don’t want war, if we can settle this in a very nice way, why not?”

Smoking still prevalent despite ‘sin’ tax law, UP academicians say

Manufacturing output down 3.1% in May–Neda

By Cai U. Ordinario

T

he country’s manufacturing output contracted 3.1 percent in May on the back of weak global demand and the prolonged dry spell, according to the National Economic and Development Authority (Neda).

The Monthly Integrated Survey of Selected Industries (Missi) released by the Philippine Statistics Authority (PSA) on Friday stated that the country’s Volume of Production Index (VoPI) declined from a growth of 12.7 percent in May 2014.

“Despite this slowdown in manufacturing, businesses remain optimistic. The low inflation environment, lower oil prices, continued inflow of remittances, expected strong demand from government expenditures and the brisk business activity in the nearing election season will all help improve the sector’s performance in the coming months,” Neda Officer in Charge (OIC) and Deputy DirectorGeneral Emmanuel F. Esguerra said.

This is the second time the Missi posted a contraction in 2015. The first time was in February when the Missi posted a decline of 1.7 percent.

The PSA said half of the 20 major sectors have reported decreases in VoPI. The five sectors that significantly contributed to the decline were footwear and wearing apparel which contracted 19.2 percent; wood and wood products, 18.4 percent; basic metals, 16 percent; food manufacturing, 13.9 percent; and beverages, 10.2 percent.

The Neda said the food subsector took a double-digit year-on-year drop of 13.1 percent in the production, as well as petroleum production which contracted 23 percent in May 2015.

Electrical machinery, the country’s top export product, also contracted in production.

“On a positive note, the subsector [Peroleum] is expected to make a rebound after the imminent operation of the Petron’s Bataan Refinery Master Plan 2 by the end of the second quarter. The facility will be the first to produce high value fuels in compliance with the Euro-5 standard, which will augment both local and

export supplies,” Esguerra said.

Apart from the VoPI, the Value of Production Index also declined to 7.3 percent this month from last year’s 11.4 percent. Despite the continued downward trend of the sector’s value and volume, its threemonth moving average remains at a positive position at 4 percent.

Also, the average capacity utilization of manufacturing firms slightly grew to 83.3 percent year-on-year, with 25.4 percent operating at full capacity (90 percent to 100 percent), 56.4 percent (70 percent to 89 percent) and 18.2 percent operating at below (70 percent) capacity.

“With the proper implementation of the Competition Law and the Philippine Archipelagic Sea Lanes Act, we expect improvement in the business climate. Also, the Comprehensive Automotive Resurgence Strategy will attract much-needed foreign investments and spur the growth of transport equipment sector, as well as textiles, glass, rubber and plastics, electronics and other related products,” Esguerra said.

Esguerra added that in order to improve the performance of the Missi, there is a need to enhance the participation of small and medium enterprises in the global value chain.

There is also a need to maximize small and medium enterprises’ use of free trade and minimize their vulnerability to uncertainties in the global market. They must also take advantage of the upcoming Asean economic integration.

“Long-term measures such as reliable water supply must also be put into place to battle the possibility of another dry spell in the second half of 2015. The integration of agriculture and the manufacturing sectors, supported by efficient transport infrastructure, will be needed to spur growth,” Esguerra said.

The Missi provides timely flash indicators that monitor the performance of growth-oriented industries in the manufacturing sector.

The earliest version of the Missi is the Survey of Key Enterprises in Manufacturing, which was created in 1981 as a project of the Neda.

Elisse Leonne P. Perez

briefs

T

he enforcement of the historic 2013 “sin” tax law resulted in the emergence of small tobacco companies that offered cheap cigarettes, Stella Luz Quimbo, of the University of Philippines College of Economics, said.

Calling it the “Mighty effect,” Quimbo said when the new sin-tax rates were implemented, cigarettes under the Mighty brand became the cigarette of choice for mass-based consumers.

In her presentation titled “Does Taxing Sin Deliver us from Disease: An Initial Assessment of the Health Impact of Sin Taxes in the Philippines,” Quimbo noted that the two-tiered structure of implementation of the upward adjustment of taxes on tobacco and alcohol had resulted to a tobacco war.

“I didn’t realize that there was going to be an extremely viable low priced brand,” Quimbo said.

As a result, Mighty cigarettes ate into the market share of Philip Morris and other major brands.

Quimbo, in a presentation last Thursday at the last day of the two-day 37th Annual Scientific Meeting of the National Academy of Science and Technology at the Manila Hotel, said that this was mainly due to the rise of small tobacco companies that came out with low-priced brands that gave Filipino smokers the capacity to continue their unhealthy habit.

“For as long as we don’t have a uniform tax rate, then that’s going to be a problem,” she said.

For his part, UP College of Medicine Prof. Antonio Miguel Dans said that the unitary sin-tax rate was going to be implemented two years from now in 2017.

From 2013 up to the present, he said, the sin-tax law was estimated to have prevented some 3 million people from smoking, and saved 32,000 lives from smoking-related diseases.

“We wanted it to be unitary from the start. But it was a bargaining chip to the tobacco farmers, tobacco industry, to the northern bloc lawmakers,” Dans said.

“The prevalence of smoking is high because tobacco is cheap, and we are flooded with promotional materials at an early age,” it noted.

news@businessmirror.com.ph

billboards should withstand inclement weather–MMDA

The Metropolitan Manila Development Authority (MMDA) has reminded the key players in the billboard industry to make sure that their billboards are structurally sound and safe to withstand typhoons that threaten the metropolis.

MMDA Chairman Francis N. Tolentino issued the reminder after he ordered billboard operators on Thursday to voluntary roll-down their tarpaulins as the southwest monsoon enhanced by Tropical Storm Egay (international code name Linfa) and Falcon (international name Chan-hom) is expected to dump rains until Sunday, Likewise, the MMDA assured that the agency’s personnel are also on standby, including its rescue equipment, rubber boats and vehicles for possible operation or deployment.

“Our equipment and rescue units are now ready for deployment,” said Tolentino, who is also the concurrent chairman of Metro Manila Disaster Risk and Reduction Management Council. Claudeth Mocon-Ciriaco

LANANG BUSINESS PARK PREPARES NEXT DEVELOPMENT plan

Dam watch

An employee of La Mesa Dam adjusts a signboard indicating the approximate dam water level amid heavy southwest monsoon rains on Wednesday and Thursday. A forced evacuation was implemented as the dam came short of its 80.15-meter spilling level. Alysa Salen

Electronics still afloat despite shrinking exports

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xports of electronic products remained afloat despite the country’s total revenue on merchandise exports that shrank in January-to-May period.

Data from the Philippine Statistics Authority (PSA) showed that five-month exports revenue of electronics sector grew by 2.9 percent, even with the fragile global demand, to $10.92 billion from $10.61 billion in the same period in 2014.

Exports of semiconductors, which accounted for 70 percent of the industry’s exports, increased by 7.0 percent to $7.84 billion in January to May this year from $7.32 billion last year.

Exports of electronics subsectors

such as office equipment surging by 110 percent to $277 million, telecommunication exports jumping by 20 percent to $132 million, and the 11-percent exports growth of communication and radar to $123 million have supported the positive export performance of the whole electronics sector.

On the other hand, negative growth was posted in exports of consumer electronics, down by 22 percent; electronic data processing and medical and industrial instrumentation, both declined by 14 percent; control and instrumentation, down by 8.0 percent; and automotive electronics, down by 5.0 percent.

The electronics industry is targeting a 5.0-percent to 7.0-percent exports revenue growth for the full year of 2015 to about $27.6 billion from $25.8 billion revenue in the previous year.

Meanwhile, the country’s total exports revenue for the first five months of 2015 decreased by 5.0 percent to $23.52 billion, from $24.78 billion in the same period in 2014.

Top exports destinations for the month of May alone were Japan with exports amounting to $1.21 billion; the United States, $696 million; China, $529 million; Hong Kong, $527 million; and Singapore, $301 million. PNA

DAVAO CITY—A new business park in the northern suburbs here is preparing its next development blueprint to follow through its successful first year venture of a fully booked office and commercial building inside the 2-hectare property.

John Irene del Campo, manager of the Lanang Business Park in the emerging business district 5 kilometers north of downtown, said the office spaces of its first commercial building named Alpha Building, has been occupied or fully subscribed by three restaurants, four shipping companies, two banana growers and exporters, a trading company, an international learner playschool, the Home Guarantee Development Fund, the San Miguel Foods Inc., and a big real-estate company which recently tied up with a Thailand-based hotel chain in Manila.

Del Campo said that the business park owner, the Dominic and Sons Realty and Development Corp., has already prepared for another blueprint of development to accommodate more lessees.

She said that the business park has been swarmed with inquiries on new office and commercial spaces after the first building was fully booked or occupied in less than a year. The business park recently celebrated its first year of operation on June 12 this year. The Alpha Building would be followed by new commercial and office buildings inside the property. Manuel Cayon

prioritize vulnerable populations in disaster preparedness

UNFPA, the United Nations Population Fund, has called on humanitarian agencies to redouble efforts in addressing the special needs of vulnerable populations in preparedness and response measures to disasters as nations observe World Population Day on July 11.

Globally, over 50 million people are displaced by disasters and armed conflicts and over 75 percent of them are women, girls and young people who are among the most affected population in emergencies due to their vulnerabilities.

“They are constantly exposed to sexual violence, maternal deaths, unwanted pregnancies and the threat of sexually transmitted infections, including HIV, because of the absence or lack of reproductive health services and protection mechanisms,” UNFPA Country Representative Klaus Beck said.

Beck said recent humanitarian crises have seen pregnant women giving birth in the most unsanitary conditions without the assistance of skilled birth attendants.

He also cited sexual violence committed against women and young girls due to lack of security in the midst of a chaotic situation. Claudeth Mocon-Ciriaco

China Southern Airlines Co., Ltd General Conditions of International Carriage for Passenger & Baggage Edited by Edition Group of General Conditions of International Carriage for Passenger & Baggage February 1, 2011 V Version N No. 4 Granted by General Manager of China Southern Airlines Co., Ltd: Tan Wangeng Date of Granting: April 19, 2011 China Southern Airlines Co., Ltd General Conditions of International Carriage for Passenger & Baggage Article 0 General Rules 0.0.1 Contents

In order to insure efficient running of tickets sales and ground handling in stations for the international passengers and baggage, General Conditions of Carriage of Passenger & Baggage (hereinafter referred to as the Conditions) is made by China Southern Airlines as part of the passenger carriage contract. The contents of the Conditions include: 0.0.1.1 Definitions 0.0.1.2 Applicability 0.0.1.3 Tickets 0.0.1.4 Fares, Taxes, Fees and Charges 0.0.1.5 Reservations 0.0.1.6 Ticketing 0.0.1.7 Check-in and Boarding 0.0.1.8 Baggage 0.0.1.9 Schedules, Cancellations, Alterations of Flights 0.0.1.10 Changes to Passenger tickets 0.0.1.11 Refunds 0.0.1.12 Conduct Aboard Aircraft 0.0.1.13 Refusal and Limitation of Carriage 0.0.1.14 Arrangements for Additional Services 0.0.1.15 Administrative Formalities 0.0.1.16 Passenger Services 0.0.1.17 Liability for Damage 0.0.1.18 Effectiveness and Modification 0.0.2 Basis of Formulation 0.0.2.1 These Conditions are formulated on the basis of Civil Aviation Law of the People’s Republic of China, the Rules of China on the International Civil Air Transport of Passengers and Luggage, Large-scale Public Air Transport Carrier Certification Rules of Operation (the CCAR-121- R2), Operation of Civil Aircraft Airworthiness Regulations (the CCAR121AA),etc.

0.0.3 Implementation 0.0.3.1 These Conditions are formulated as the principle for the performance in station by staff of CSN as follows: domestic ticket sales, ground handling and ground handling agents, etc. Any department or staff in relation with domestic passenger and baggage delivery, including sales branch, department, office and ground handling agents shall fully abide these Conditions.

0.0.3.2 The issuance and implementation of the Conditions help to standardize the international ticket sales, check-in and baggage delivery, which leads to safety priority, flight normality and excellent service quality.

Article 1 Definitions

1.1 The following terms used in the General Conditions of International Carriage for Passenger and Baggage (hereinafter referred to as Òthe ConditionsÓ) are defined as follows unless otherwise specified: 1.1.1 CSN means China Southern Airlines Company Limited.

1.1.2 Convention means whichever of the following instruments that is applicable: The Convention for the Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw, 12 October 1929 (hereinafter referred to as the Warsaw Convention); The Warsaw Convention as amended at The Hague on 28 September 1955 (hereinafter referred to as the Hague Protocol); The Convention for the Unification of Certain Rules for International Carriage by Air, done at Montreal on 28 May 1999 (hereinafter referred to as the Montreal Convention).

1.1.3 CSN’s regulations means rules, other than the Conditions, published by CSN and in effect on date of publication, governing carriage of passengers and/or baggage and shall include any applicable tariffs in force.

1.1.4 International carriage means air carriage in accordance with air carriage contract between CSN and the passenger, whether there is a break or transfer in the transportation or not, of which the origin, appointed stopover or destination is not located in the People's Republic of China.

1.1.5 Carrier means all public air carriage company which including issues air tickets, carries or undertakes to carry the passengers and baggage listed in air tickets.

Ticketing carrier means the carrier whose numeric code is indicated in coupons of electronic ticket sales. Ticketing carrier shall be the controller and authorizer of electronic ticket sales.

Marketing carrier means the carrier whose two letters airline designator code is recorded in coupons as the carrier that operates.

Operating Carrier means the carrier that performs the actual air carriage and additional services. When there are certain bilateral agreements, such as code sharing agreement, operating carrier may not be marketing carrier.

1.1.6 CSN authorized agent or authorized agent means a passenger sales agent who has been authorized by CSN to represent CSN in the sales of air passenger transportation and its relevant services.

1.1.7 Passenger means any person, except members of the crew, carried or to be carried in an aircraft with the consent of CSN. 1.1.8 Child means any person 2 to 11 years old on the date of commencement of travel.

1.1.9 Unaccompanied child means any person 5 to 11 years old on the date of commencement of travel who travels without accompany of parents or any other passenger with full capacity for civil conduct and over 18 years old.

1.1.10 Infant means any person who is under the age of 2 on the date of commencement of travel.

1.1.11 Reservation means the reservation of seat and service class, or the weight and size of baggage appointed by passenger.

1.1.12 Flight means the flying of aircraft according to scheduled route, date and time.

1.1.13 Ticket means either the document entitled ‘Passenger Ticket and Baggage Check’, or the Electronic Ticket, in each case issued by or on behalf of CSN, and includes the conditions of contract and notices and the flight and passenger coupons contained therein.

1.1.14 Conjunction ticket means a ticket issued to a Passenger in conjunction with another ticket which together constitute a single contract of carriage.

1.1.15 Fixed ticket means a ticket whose flight number, date of flight are fixed and the seat is reserved.

1.1.16 Open ticket means a ticket whose flight number, date of flight are not fixed and the seat is not reserved.

1.1.17 Flight coupon means that portion of the ticket that bears the notation “good for passage”, or in the case of an electronic ticket, the electronic coupon, and indicates the particular places between which you are entitled to be carried.

1.1.18 Passenger coupon means the portion of ticket issued by or on behalf of CSN and which is so marked and ultimately to be retained by passenger .

1.1.19 Itinerary for air carriage electronic ticket (hereinafter referred to as Itinerary) means the payment proof for passengers provided by public air carriage company or its sales agency during ticket purchasing. One itinerary is provided for each electronic ticket, and can be printed at latest one month after the flight departure. Passenger shall preserve it well in case of refunds.

1.1.20 Day means calendar days, including all seven days of the week. Provided that, for the purpose of notification, the day upon which notice is dispatched shall not be counted; and provided further that for the purposes of determining duration of validity, the day upon which the ticket is issued, or the day upon which flight commenced, shall not be counted.

1.1.21 Tariffs means the fares, charges and relevant rules published by carriers. When necessary, tariffs must be approved by relevant departments.

1.1.22 Normal fare means the highest fare established for a first / business / premium economy class / economy class of valid adult fare. Children's fare and infants' fare that are established as a percentage of a normal fare are also considered to be normal fares.

1.1.23 Special fare means any fare other than a normal fare.

1.1.24 Agreed transition point means the point of stay, other than the origin and destination, stipulated in the flight schedule of ticket of carrier.

1.1.25 Stopover means a scheduled stop at a certain point between origin and destination arranged by passenger and with the consent of carrier.

1.1.26 Overbooking means that the seats have been sold exceed the biggest allowance of the flight.

1.1.27 Spillage means the spillage of passengers on a flight because of the aircraft type change or flight emergence caused by machinery or aircraft readjustment and etc.

1.1.28 Code share flight means a carrier or several carriers use their own airline designator code respectively on another carrier’s operating flight in accordance with their agreement.

1.1.29 Deadline time for check-in means the latest time stipulated for passenger by operating carrier to finish the check-in formalities.

1.1.30 Actual Departure time means the time of aircrews remove the last block with permission by air control center after boarding. Planned Departure Time means the departure time publish and listed on the tickets that approved by flight time management department.

1.1.31 No-show means passenger's failure to board the aircraft because they fail to finish check-in formalities before stipulated check-in deadline or because their travel documents don’t meet the requirements.

1.1.32 Mis-catch means passenger's failure to board the aircraft after finishing check-in formalities at the origin airport or transit airport.

1.1.33 Wrong Boarding means passenger's boarding a flight different from the one listed in the ticket.

1.1.34 Baggage means such articles, effects and other personal property of the Passenger as are necessary or appropriate for wear, use, comfort or convenience in connection with the trip. Unless otherwise specified, it includes both checked and unchecked baggage of the Passenger.

1.1.35 Checked baggage means baggage of which CSN takes sole custody and for which CSN has issued a baggage tag.

1.1.36 Unchecked Baggage means any baggage of the Passenger other than checked baggage.

1.1.37 Self-care baggage means any baggage which, with the consent of the carrier, is weighed or calculated its pieces by the carrier and taken care of by the passenger themselves during the journey including stay in transit points.

1.1.38 Free hand-carry item means any small item which, with the consent of the carrier, is taken by passenger on board or during the stay at transit points, within the sorts and quantity limitation of the carrier.

1.1.39 Baggage check means those portions of the ticket, which relate to the carriage of the passenger’s checked baggage.

1.1.40 Baggage tag means a document issued by CSN solely for identification of checked baggage.

1.1.42 Force majeure means an unusual and unforeseeable circumstance beyond control, the consequences of which could not have been avoided even if all due care had been exercised.

1.1.41 Damage includes death, injury, delay, loss, partial loss or other damage of whatsoever nature arising out of or in connection with carriage or other services incidental thereto performed by CSN. 1.1.43 Change fee means the charge for passenger’s voluntary request of changing their original flight reservation, including flights, date, cabin and validity, etc.

1.1.44 Endorsement means change of marketing carrier.

Article 2 Applicability

2.1 Applicability 2.1.1 General Rules 2.1.1.1 Except as provided in 2.1.2, 2.1.3 and 2.1.4 of this chapter, these conditions apply to all international carriage by air of passengers and baggage, performed by CSN for reward and code share flight or segment which is operating by CSN. 2.1.1.2 These conditions also apply to gratuitous and reduced fare carriage except to the extent that CSN has provided otherwise in its Regulations or in the relevant contracts, passes or tickets.

2.1.1.3 These conditions apply to the flight services between mainland and Hong Kong and Macao, except that government has provided applicable regulations, or that CSN has provided otherwise in the relevant contracts, passes or tickets.

2.1.2 If carriage is performed pursuant to a charter agreement, the Conditions apply only to the extent they are incorporated by reference by the terms of the charter agreement and the charter ticket into the contract of carriage.

2.1.3 To the extent that any provision contained or referred to herein is contrary to anything contained in the Convention, where applicable and any applicable laws, government regulations, orders or requirements that cannot be waived by agreement of the parties, such provision shall not apply. The invalidity of any such provision shall not affect the validity of any other provision contained or referred to herein.

2.1.4 Except for special agreements as provided in specific contract, in the event of inconsistency between these Conditions and Carrier’s regulations, the Conditions shall prevail.

Article 3 Tickets

3.1 General Rules 3.1.1 The ticket constitutes prima facie evidence of the contract of carriage between carrier and the passenger named on the ticket. CSN will provide carriage only to the passenger holding such ticket, or holding, as proof of payment or part payment, any other carrier document issued by CSN or its authorized agent. CSN ticket is and remains at all times the property of CSN. The conditions of contract contained in the ticket are a summary of some of the provisions of these conditions of CSN. 3.1.2 A ticket is not transferable. If a ticket is presented by someone other than the person entitled to be carried there under or to a refund in connection therewith, CSN shall not be liable to the person so entitled if in good faith it provides carriage or makes a refund to the person presenting the ticket.

3.1.3 Some tickets are sold at special fares may apply to special refund and reissue policy. Passengers should choose the fare that best suits to your needs.

3.1.4 Requirements for Ticket Using 3.1.4.1 In the event of using a paper ticket, a person shall not be entitled to be carried on a flight unless that person presents a ticket valid and duly issued in accordance with CSN’s Regulations and containing the flight coupon for the flight and all other unused flight coupons and the passenger coupon. A passenger shall furthermore not be entitled to be carried if the ticket presented is mutilated or if it has been altered otherwise than by CSN or its authorized agents.

3.1.4.2 Passenger’s name on the ticket must be the same with the identity information provided by the passenger; otherwise CSN has the right to refuse carrying the passenger.

3.1.4.3 For electronic tickets, if the coupon of the sector which passenger requests to check in is not unused and valid, CSN has the right to refuse carrying the passenger.

3.1.4.4 CSN will honor flight coupons only in sequence from the place of commencement of travel as shown on the ticket.

3.1.4.5 Each flight coupon will be accepted for carriage in the class of service specified therein on the date and flight for which accommodation has been reserved. When flight coupons are issued without a reservation being specified thereon, space will be reserved on application subject to the conditions of the relevant fare and the availability of space on the flight applied for.

3.2 Period of Validity 3.2.1 General Rules 3.2.1.1 Unless otherwise specifically provided in the fares rule, a ticket is valid for carriage for one year from the date of commencement of travel, or if no portion of the ticket is used or the ticket is an open ticket, from the date of issuance thereof. Where one or more portions of a ticket involves an excursion or other special fare having a shorter period of ticket validity than indicated above, such shorter period of validity shall apply only in respect to such excursion or special fare transportation. If ticket partially used, ticket is valid for carriage for one year from the date of commencement of travel. Regardless of further reissue or exchange ticket, the original validity will not change. This rule will apply for the whole tickets or series tickets. For totally unused tickets, the new validity is one year from the date of commencement of travel after ticket exchanged. If the first segment is not used after exchanged, the validity is one year from the date of exchanged.

3.2.1.2 The validity of a ticket is counted from the midnight on the date of commencement, or if no portion of the ticket is used, from the midnight on the date of issuance, till the midnight on the date of expiration.

3.2.1.3 Some special fare have strictly limitations for the shortest and longest staying time, passenger must finish all the sectors listed in the ticket within the period of validity.

3.2.1.4 Period of validity of tickets with more than one sector shall be calculated from the date of commencement of the first travel under the ticket.

3.3 Extension of Validity 3.3.1 General Rules 3.3.1.1 If a passenger is prevented from traveling within the period of validity of the ticket because of one of the following reason

by CSN, the validity of such passenger’ ticket will be extended until CSN’s first flight on which space is available in the class of service for which the fare has been paid under consensus.

1. CSN cancels the flight on which the passenger holds a reservation; 2. CSN omits a scheduled stop, being the passenger’s place of departure, place of destination or a stopover; 3. CSN fails to operate a flight reasonably according to schedule; 4. CSN causes the passenger to miss a connection of booked flight; 5. CSN changes the class of service; 6. CSN is unable to provide previous confirmed space.

3.3.1.2When a passenger is prevented from traveling within the period of validity of the ticket by reason of illness, CSN will decide whether to extend the period of validity of such passenger's tickets in accordance with CSN's regulations applicable to the fare paid and the medical certificate. If CSN accept the illness application, fare paid will remit the change fee but not the balance in the new flight coupons. CSN will extend similarly the period of validity of tickets of other members of the passenger's immediate family accompanying an incapacitated passenger.

3.3.1.3 In case of death of passengers or their immediate family of a passenger who has commenced travel or en route, CSN will provide reissue (change fees exemption) or refunded in accordance with involuntary refunds regulations. Any

such modification and refund shall be made upon receipt of a proper death and immediate family certificate.

3.4 Loss of Paper Ticket 3.4.1 General Rules Passenger shall be liable for the loss of unused tickets, flight coupons, miscellaneous charges orders or exchange coupons of MCO, or any other documents for transportation. CSN will not be responsible for any effect on such passenge’s itinerary. CSN will decide whether or not to refund, replace such documents in accordance with its concerned regulations and certain condition. Passenger has no right to claim that CSN must refund or replace such tickets or documents.

3.4.2 Report of Loss of Ticket 3.4.2.1 In case of loss or mutilation of a ticket, or part thereof, or non-presentation of a ticket containing the passenger coupon and all unused flight coupons, the passenger must report in writing to CSN or its authorized agents. Such passenger shall complete the form of ÒApplication and Indemnity Agreement for Lost TicketÓ. Formalities of reporting the loss of group tickets must be done before the deadline time of check-in. Report of loss cannot be done on tickets of charter flights.

3.4.2.2 When reporting for loss of a ticket, the passenger must advise the date and place of issuance and the agent coupon or its copy of the original ticket and present proof of loss satisfactory to CSN. If the reporter is not the passenger, valid identity documents of the reporter and the passenger must be produced.

3.4.2.3 If someone other than the person entitled to be carried or to be refunded has traveled with or refunded the ticket, CSN shall not be liable to the person so entitled.

3.4.3 CSN will not re-issuance of lost ticket in principle.

3.4.4 Deadline for Refunding Lost Tickets The deadline for refunding tickets purely operated by CSN is 60 days after 13 months from the date of commencement of travel, or the date of issuance if no portion has been used; if any sector is operated by another carrier than CSN, the deadline for refunding is 60 days after 18 months from the date of commencement of travel, or the date of issuance if no portion has been used; Within this period, if someone other than the person entitled to be carried or to be refunded has traveled with or refunded the ticket, CSN shall not be liable to refund to the person so entitled.

3.5 Loss of Itinerary If printed itinerary of e-ticket is lost because of reasons of passengers, according to Temporary Regulations on Itineraries of E-tickets of Air Carriage, it cannot be re- printed.

3.6 Sequence and Usage of Coupons 3.6.1 Ticket purchased by passenger is only applicable for the transportation from the origin to destination via the any agreed transition point as listed on the ticket. The fare paid by passenger is based on CSN's tariff rules and the transportation listed on the ticket. Fare is the basic content of the transportation contract between CSN and passenger.

3.6.2 Flight coupons must be used in sequence from the place of departure as shown on the passenger coupon, and the first segment must use otherwise CSN will not accept for carriage. The first segment means one coupons or more than one conjunction ticket in the same contract. Unless otherwise specified provided in the fares rule, no portion of the flight coupons is used will accept refunded within thirteen months after the date of commencement. Coupons that have been used counts from the date of issuance. Refunded in accordance with involuntary refunds regulations and charge refund fee and no show fee. The balance and the tariff of unused will refund to passenger.

3.6.3 If passenger wishes to change any aspect of transportation, he must contact CSN in advance. The fare for passenger’s new transportation will be re-calculated under the flight coupons restriction and passenger will be given the option of accepting the new price or maintaining his original transportation as ticketed. If passenger is required to change any aspect of transportation due to Force Majeure, passenger must contact CSN as soon as practicable and CSN will use reasonable efforts to transport passenger to the next stopover or final destination, without recalculation of the fare.

3.6.4 If passenger changes his transportation without CSN’s agreement, CSN will assess the correct price for passenger’s actual travel. Passenger will have to pay any difference between the price paid and the total price applicable for the revised transportation.

3.6.5 Some changes on the content of transportation in the flight coupons such as changing the place of departure or reversing the direction of travel, can result in an increase of price. Many fares are valid only on the dates and for the flights shown on the ticket and may not be changed at all, or only upon payment of an additional fee.

3.6.6 Fixed Ticket is only applicable for the date and flight which is listed on the flight coupons.

3.6.7 Open ticket means the booking status is ‘open’ in accordance of passenger’s requirement and fare regulations. A ticket whose operated carrier, flight number, date of flight are not reserved and must confirm with CSN before ticket issuance.

3.6.8 Each flight coupon contained in a ticket will be accepted for transportation in the class of service on the date and flight for which space has been reserved, as shown in the flight coupon.

3.6.9 Open Ticket holders can reserve their seats in accordance of the fare regulation and seat available. Passenger confirm their ticket without change fee for the first time issuance and subsequent collect the balance between the new fare and original open ticket fare. Any further confirmation may cause change fee and fare balance in accordance of fare regulation.

3.6.10 If passenger does not show up for any flight, for which he is holding a reservation, without advising CSN in advance, CSN may cancel passenger’s return or onward reservations as shown in the ticket.

3.7 On a ticket, CSN’s name is abbreviated as CZ, the airline designator code of China Southern Airlines.

3.8 Over-booking According to the common practice of international civil aviation industry, CSN may make suitable over-booking on some flights. Under particular circumstances, it may result in some passengers’ failure to travel on flights as arranged.

When there is not enough space, CSN will seek for passengers voluntary to disembark and will help them check in on priority. For passengers who cannot travel due to over-booking, CSN will do its best to arrange them on the soonest available flight or free refunded, and will give a certain amount of compensation.

Article 4 Fares, Taxes, Fees and Charges

4.1 Application of Fares 4.1.1 Fares apply only for carriage from the airport at the point of origin to the airport at the point of destination. Fares do not include fees for ground transport service and additional services between airports and between airport and downtown.

4.1.2 The applicable fare is the fare for the flights in effect on their purchased, applicable for the date of flight and routing which is listed on the flight coupons. Once the ticket is issued and the payment is made, the fare will not change despite any readjustment.

4.1.3 A special fare ticket is subject to the conditions specified thereof.

4.2 Routing Fares apply only to routings published in connection therewith. If there is more than one routing at the same fare, the passenger may specify the routing prior to issue of the ticket. If no routing is specified, CSN may determine the routing.

4.3 Taxes, fees and Charges Any tax, fee or charge imposed by government or other authority, or by the operator of an airport, in respect of a passenger or the use by a passenger of any services or facilities will be in addition to the published fares and charges and shall be paid by the passenger and collected by airlines at the time of ticket issuance. On purchasing a ticket, passenger will be advised of taxes, fees and charges not included in the fare, most of which will normally be shown separately on the ticket. The taxes, fees and charges imposed on air travel are constantly changing and can be imposed after the date of ticket issuance. If there is an increase in the applicable tax, fee or charge shown on the ticket, passenger will be obliged to pay it. Likewise, if a new tax, fee or charge is imposed after ticket issuance, passenger will be obliged to pay it. In the event any taxes, fees or charges which passenger has paid to CSN at the time of ticket issuance are eliminated or reduced, such that they no longer apply, or a lesser amount is due, passenger may be entitled to a refund of any such taxes, fees or charges as have been eliminated or reduced. The airlines will refund according to the rule by government.

4.4 Fuel surcharge and air insurance surcharge are published and charged by the carrier according to relevant regulations of the State. Unless otherwise specifically, infants not occupying a seat are exempt from fuel surcharge; children are charged the same amount of fuel surcharge as adults.

4.5 Payment Fares and charges are payable in any currency acceptable to CSN. Unless otherwise agreed by CSN and passenger, fares and charges are all paid in cash.

Article 5 Reservations

5.1 Reservation Requirements 5.1.1 Reservations are not confirmed until recorded as accepted by CSN or its authorized agents. Reservations shall be tentative unless and until CSN has issued a validated ticket for the carriage for such space is reserved, and the passenger makes payment by the time fixed by CSN. 5.1.2 According to CSN’s regulations, certain fares may have conditions that will limit or exclude the passenger's right to change or cancel reservations.

5.1.3 CSN keeps the right to suspend reservations for a certain flight when it is necessary.

5.1.4 Infants and children must be booked in the same compartment as that of the accompanying adult.

5.1.5 Application for change or cancellation of reservation must be raised within the valid period stipulated by CSN. When fares have correspondent restrictions, passenger’s change or cancellation of reservation shall be subject to such restrictions.

5.1.6 CSN keeps the right to cancel the space reserved for the passenger who failed to use the reserved accommodation with no previous notice to any relevant department of CSN. 5.2 Special Passengers A special passenger is someone, during the flight, to be accorded courteous reception; or needing special care on account of his or her physical or mental conditions; or acceptable for carriage in certain conditions.

The reservation may be accepted after all the carriers' concerned consent to the carriage of such special passengers.

5.3 Ticketing Time Limits If a passenger has not paid for the ticket prior to the specified ticketing time limit, CSN may cancel the reservation.

5.4 Personal Data 5.4.1 The passenger recognizes that personal data has been given to CSN for the purpose of making a reservation for carriage, obtaining ancillary services, facilitating immigration and entry requirements and making available such data to government agencies. For these purposes the passenger authorizes CSN to retain such data and to transmit it to its own offices, other carriers or the providers of such services.

5.4.2 Passenger shall be liable for the authenticity of such data. CSN will not be responsible for verification.

5.4.3 If passenger refuses to provide such data, CSN may refuse for carriage.

5.5 Arrangement of Seats 5.5.1 CSN will endeavor to honor advance seating requests, however, CSN cannot guarantee any particular seat. CSN reserve the right to assign or reassign seats at any time, even after boarding of the aircraft. This may be necessary for operational, safety or security reasons.

5.5.2 Seats near the aircraft's emergency exits shall be specifically arranged by CSN.

Article 6 Ticketing

6.1 General Rules 6.1.1 Passenger can purchase tickets at the sales office of CSN or CSN's authorized agencies, or at CSN's websites http://www.csair.com, http://www.flychinasouthern.com. Passenger can inquire or purchase ticket at CSN's hotlines: CSN's hotlines: 95539 (within Mainland China), 8620-86682000 (outside Mainland China); hotlines for direct sales or CSN's websites: 4006695539 (within Mainland China), 8620- 22395539 (outside Mainland China).

6.1.2 Passenger should fill up the Reservation Form for Passengers, providing valid identity document information of his own or other valid identity documents produced by public security departments and a corrected contact information; meanwhile passenger must ensure such information is the consistent with that of the documents during check-in.

6.1.3 When ticketing, CSN has the right to request passenger produce his or her valid passport or other traveling documents and contact information, but will not bear responsibility for the authenticity and the validity of such documents.

6.1.4 When purchasing a ticket for child or infant, a valid birth certificate must be presented.

6.1.5 When purchasing a ticket for a passenger seriously sick or over 32 weeks pregnant, passenger shall provide a valid medical certificate issued by a medical department at or above county level for such carriage that is accepted by CSN. 6.1.6 Each passenger shall respectively hold his own ticket.

6.1.7 Infants and passengers less than 5 years old must be accompanied by a passenger over 18 years old and with full capacity for civil conduct.

6.2 CSN or CSN's authorized agencies shall sell one-way, consecutive, or round-trip tickets according to the request of passengers.

6.3 On booking and purchasing, CSN and CSN's authorized agencies should notify the type of flight, marketing carrier and operated carrier when passenger purchase the codeshare flight.

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8.1.4.5 The carriage of passenger or his baggage may endanger or affect the safety, health, convenience, comfort of other passengers or crew members.

8.2 Checked Baggage 8.2.1 Checked baggage must meet the following requirements: 8.2.1.1 Passenger must check baggage with a valid ticket. CSN should correctly enter the pieces and/or weight of checked baggage into departure system. Each passenger's baggage must be recorded on his own record. If passenger holds a paper ticket, baggage content should be written on the correspondent spot of ticket.

8.2.1.2 CSN generally accepts baggage during check-in on the date of flight departure. If passenger requests CSN to accept checked baggage in advance, he could make an appointment in advance.

8.2.1.3 CSN shall attach a baggage tag to each piece of passenger's checked baggage, and give a baggage identification tag to passenger. Self-care baggage after weighed together with checked baggage and entered into ticket respectively and attached a self-care baggage tag, is taken care of by passenger in the passenger cabin.

8.2.1.4 The weight and size of checked baggage shall not exceed CSN's restrictions; those exceeding such restrictions shall be carried as cargo.

8.2.1.5 Passenger should attach name or other personal mark to the checked baggage before checking it in.

8.2.1.6 Checked baggage must be well packed, locked and bound, and must be able endure a certain amount of pressure, and can be safely loaded, unloaded and carried under normal operation conditions, and should meet the following requirements:

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Article 8 Baggage

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7.1 General Rules 7.1.1 The passenger shall arrive at the designated check-in location sufficiently in advance of flight departure to permit completion of any Government formalities and departure procedures and in any event not later than the time that my be indicated by CSN. 7.1.2 If the passenger fails to arrive in time at the designated check-in location or boarding gate or appears improperly documented or fails to provide an acceptable ticket and not ready to travel, CSN may cancel the space reserved for the passenger and will not delay the flight. CSN is not liable to the passenger for loss or expense due to the passenger's failure to comply with the provisions of this Article. If the passenger wishes a refund, the amount of such refund shall be processed in accordance with the voluntary refund regulations.

7.1.3 Check-in deadlines are different at every airport; CSN or CSN's authorized agencies should inform the passenger of the check-in deadlines and codeshare flight check-in will offer in the counter of operated carrier. Passengers should reserve enough time for check-in formalities. If passenger fails to check in before check-in deadlines, CSN has the right to cancel passenger's reservation.

7.1.4 CSN and CSN's ground handling agencies should open check-in counters in time, accept valid tickets produced by passengers, and process check-in formalities quickly and correctly.

7.1.5 Before boarding, passengers and their baggage and hand- carry items must go through security check.

7.2 Mis-catch 7.2.1 If mis-catch happens due to reasons of passengers, ticket shall be dealt according the rules of voluntary refund.

7.2.2 If mis-catch happens due to reasons of CSN, CSN shall arrange passenger to travel on the soonest flight; if passenger requests for refund, it shall be dealt according to rules of involuntary refund.

7.3 Wrong Boarding 7.3.1 If passenger boards a wrong flight and the passenger requests to stop traveling at the destination of the flight boarded, no extra fee shall be charged and no fee shall be refunded.

7.3.2 If wrong boarding happens due to reasons of CSN, CSN shall arrange passenger to travel on the soonest flight to the destination listed on passenger's ticket; no extra fee shall be charged and no fee shall be refunded. If passenger requests for refund, it shall be dealt according to rules of involuntary refund.

8.1.3 Limitation on carriage The carriage of following articles is limited. They may be accepted only in accordance with the CSN's regulations as checked baggage.

8.1.3.1 Precision instrument and electric appliances shall be carried as cargo. They may be accepted only in accordance with the CSN's regulations as checked baggage. Free baggage allowance does not apply to such items.

8.1.3.2 Sporting equipment, including firearms and ammunition for hunting and sporting purposes.

8.1.3.3 Dry ice, alcoholic beverage, medicinal or toilet articles and personal smoking materials intended for use by an individual shall not exceed the set quota.

8.1.3.4 Diplomatic envelopes, confidential files; 8.1.3.5 Weapons such as swords, knives, antique firearms, and similar items may be accepted as checked baggage, in accordance with CSN's Regulations, but will not be permitted in the cabin.

8.1.3.6 Pet or guide-dog which is specified in Provision 8.7.

8.1.3.7 The wheelchair and/or other assistant devices for incapacitated or the aged passengers.

8.1.3.8 Liquid hand-carried by passenger.

8.1.3.9 Items not suitable to be carried in cargo cabin such as delicate musical instrument and not meeting the requirements of weight and size by Provision 8.4, shall be carried in passenger cabin as seat-taking baggage. Extra fees shall be charged for such items, and such items shall be taken care of by the passenger.

8.1.4 Right to refuse carriage In the exercise of CSN's discretion, CSN may refuse to carry passenger or his baggage after informing the passenger. In this circumstance passenger will be entitled to a refund. CSN may also refuse to carry passenger or his baggage for any of the following reasons: 8.1.4.1 CSN may refuse carriage as baggage of such items described in 8.1.1 and 8.1.2 as are prohibited from carriage as baggage and may refuse further carriage of any such articles on discovery thereof.

8.1.4.2 Unless advance arrangements for its carriage have been made with CSN, CSN may carry on later flight baggage that is in excess of the applicable free allowance.

8.1.4.3 CSN may refuse to accept baggage as checked baggage unless it is properly packed in suitcases or other suitable containers to ensure safe carriage with ordinary care in handling.

8.1.4.4 Such action is necessary to prevent a violation of any applicable laws, regulations, or orders of any State to be flown from, to or over.

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Article 7 Check-In and Boarding

8.1 General Rules Baggage carried by CSN, is divided into checked baggage and un-checked baggage (self-care baggage and free hand- carry items).

8.1.1 Items Unacceptable as Baggage Passenger shall not include in his or her baggage (both checked baggage and unchecked baggage) or carry on to the cabin.

8.1.1.1 Items that do not constitute baggage as defined in Provision 1.1.34 of the Conditions.

8.1.1.2 Other than those permitted by Dangerous Goods Transportation Regulations of China Civil Aviation and CSN regulations, dangerous goods including the following items are not permitted to be carried and checked or un- checked baggage: 1) Explosives; 2) Gas, including flammable gas, inflammable and nontoxic gas, and toxic gas; 3) Flammable liquid; 4) Flammable solid, spontaneous combustible substance; substance that would release flammable gas in contact with water; 5) Oxidizer and organic peroxide; 6) Toxic substance and infectious substance; 7) Radioactive substance; 8) Corrosive substance; 9) Miscellaneous dangerous goods such as magnetic substance.

8.1.1.3 Items the carriage of which is prohibited by the applicable laws, regulations or orders of any country to be flown from, to or over.

8.1.1.4 Articles those in the opinion of CSN are unsuitable for carriage by reason of their weight, shape, size or character.

8.1.1.5 Live animals, except as pets and guide dogs provided for in Provision 8.7.

8.1.1.6 Firearms and ammunition other than for hunting and sporting purposes are prohibited from carriage as baggage.

8.1.2 Items unacceptable as checked baggage Passenger shall not include in checked baggage the following items. If such items included in checked baggage is lost or damaged, CSN is liable for it only as common checked baggage.

1) Fragile items; 2) Perishable items; 3) Money or valuable securities; 4) Jewelry; 5) Precious metal and articles thereof; 6) Antiques and valuable paintings; 7) Computer and personal digital device; 8) Samples and valuables; 9) Lithium battery; 10) Important files and documents; 11) Traveling documents, medical certificates, X-ray films; 12) Prescribed drug that needs to be taken regularly.

13) Portable power source

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8.2.1.7 Checked baggage will, whenever possible, be carried on the same aircraft as you, unless we decide for safety, security or operational reasons to carry it on alternative flight. If passenger's checked baggage is carried on a subsequent flight CSN will deliver it to passenger, unless applicable law requires passenger to be present for customs clearance.

8.3 Free baggage allowance 8.3.1 The free baggage allowance for baggage (include checked and unchecked) is determined by CSN's official updates.

8.3.1.1 Piece concept Unless otherwise specifically, the piece concept which applies to carriage on all CSN's international flight and regional route.

8.3.1.2 The piece concept which applies to carriage to/from the United States or Canada are specified as following: the sum of the three dimensions must not exceed 158cm (62 inches) for each piece, and the weight of each piece must not exceed 45 kg (90 pounds). The piece concept which applies to carriage is not involve of the three dimensions must not exceed 158cm (62 inches) for each piece, and the weight of each piece must not exceed 32 kg (70 pounds).

8.3.1.3 Free baggage allowance for passengers who purchase the mixed travel class will be the applicable to respective class.

8.3.1.4 When two or more passengers, traveling as one party to a common destination or point of stopover by the same flight, present themselves and their baggage for travel at the same time and place, they will be permitted a total free baggage allowance equal to the combination of their individual free baggage allowance.

8.3.1.5 Free allowance for passengers who travel domestic flight which is a part of the international flight will be the applicable to the according international flight.

8.3.1.6 Free allowance for passengers who voluntarily change the travel class will be the applicable to new class. Free allowance for passengers who involuntarily change the travel class will be the applicable to original class.

8.3.1.7 For infant not occupying a seat, the free baggage allowance is one 10 Kg checked bag (piece), the sum of the three dimensions not to exceed 115cm (65 inches), plus one checked or carry on fully collapsible stroller/push-chair or infants carrying basket or infants car seat. Nonretractable stroller is not only for checked baggage. If there is not enough space for fully collapsible stroller in the cabin, it must carry as checked baggage.

8.4 Free Hand-carry baggage 8.4.1 Weight and size Each passenger who is entitled to travel in first class can bring two pieces of hand-carry baggage, each of which must not exceed 5kg in weight. Each passenger who is entitled to travel in business or economy class can bring one piece of hand-carry baggage, each of which must not exceed 5kg in weight. The sum of the three dimensions of each piece must not exceed 115cm. Such baggage can be placed in the baggage cabin or under the seat in the passenger cabin.

8.4.2 Bulky baggage Objects not suitable for transport in the cargo compartment (such as delicate musical instrument and the like) will only be accepted for transportation in the passenger cabin as seat-taking baggage and be taken care of by passenger, if due notice has been given in advance and permission granted by CSN. The transport of such objects may be charged separately.

8.4.3 Checked baggage and self-care baggage of un-checked baggage shall be weighed or piece-calculated together at the time of check-in. Checked baggage is under custody of CSN during the journey, while the self-care baggage shall be taken care of by passenger in the journey including stay in transit points.

8.5 Excess baggage 8.5.1 The excess baggage means total weight or/and pieces of (checked and unchecked) baggage excess the free allowance.

8.5.2 Baggage carried in excess of the free baggage allowance will be charged as CSN's regulations, and will be carried after CSN or CSN's authorized agencies issue an excess baggage ticket.

8.6 Declaration and charge 8.6.1 General Rules 8.6.1.1 A passenger may declare a value for checked baggage in excess of USD30 or its equivalent per kilogram, and shall pay an applicable charge.

8.6.1.2 No declaration value for pet will be accepted.

8.6.1.3 CSN will charge an fee of 5ä of extra declared value exceeding the limitation of 8.6.1.1.

8.6.2 CSN will refuse to accept an excess value declaration on checked baggage when a portion of the carriage is to be provided by another Carrier who does not offer the facility.

8.6.3 The declaration for checked baggage must not exceed the real value of the baggage. The maximum declared value of each passenger is USD5,000 or its equivalent value in other currencies. If CSN disagrees with a value declaration and the passenger refuses to be checked, CSN has the right to refuse carriage.

8.7 Pets and Guide Dogs 8.7.1 Pets mean such little animals as domestic dogs, cats, birds and other household pets. If the animal is too small in size (such as murines or spectacular fish), or too large in size (the size of whose cage exceeds the maximum size restriction), and may therefore cause hazard to the safety of carriage, it will not be accepted for transportation. Any wild and aggressive animal such as snakes will not be accepted for transportation. The carrier has the right to determine whether an animal can be carried and the way of transportation, and has the right to restrict the number of pets on a plane.

8.7.2 Pet may be accepted for carriage subject to CSN's Regulations only when: 8.7.2.1 Properly crated and accompanied by valid vaccination certificates, entry permits and other documents required by The People's Republic of China and countries of entry or transit.

8.7.2.2 With the advance agreement of CSN and other Carriers concerned.

8.7.3 Guide dog means a dog trained to lead the blind or assist the deaf (Such passenger shall provide an evidenced by a medical certificate.) when if accompanies passenger with impaired vision or hearing dependent upon such dog.

8.7.4 The carriage of guide dogs shall be dealt in accordance with Provision 8.7.2. Guide dogs, if they meet the requirements of the CSN, may accompany in passenger cabin the disabled eligible to travel. The disabled eligible to travel shall provide the identity and quarantine proofs for guide dogs. Guide dogs, together with its cage and food can be carried for free, without taking up the free baggage allowance.

8.7.5 Acceptance for carriage of animals (include guide dogs) is subject to the conditions that the passenger assumes full responsibility for such animal unless due to CSN's faults. CSN shall not be liable for injury to or loss, delay, sickness or death of such animal in the event that it is refused entry into or passage through any country, state or territory 8.7.6 The passenger is fully liable for all damages or injuries which a pet might cause to other passengers or crew members.

8.7.7 CSN will have no liability in respect of any such animal not having all the necessary exit, entry, health and other documents with respect to the animal’s entry into or passage through any country, state or territory.

8.7.8 CSN may refuse to accept the carriage of pet and guide dog on non-stop long-haul flight or some specific type of aircraft due to the unsuitability .

8.8 Delivery of checked baggage 8.8.1 Passenger shall collect his baggage as soon as it is available for collection at places of destination or stopover. At the time of collection, passenger shall show his or her identification tag, or baggage check if CSN requires.

8.8.2 With CSN's consent, passenger can collect his baggage at stopover under the agreement of CSN, the unsued payment of the excess baggage will not be refunded.

8.8.3 If the passenger does not collect his baggage in time, CSN will charge the passenger baggage keeping fee. CSN has the right to deal with the perishable items in passenger's baggage 24 hours after the arrival of the baggage.

8.8.4 CSN is under no obligation to ascertain that the bearer of the baggage identification tag is entitled to delivery of the baggage and CSN is not liable for any loss, damage, or expense arising out of or in connection with such delivery.

8.8.5 If a person claiming the baggage is unable to identify the baggage by the baggage identification tag, CSN will deliver the baggage to such person only on condition that he or she establishes to CSN's satisfaction his or her right thereto. And if required by CSN, such person shall furnish adequate security to indemnify CSN for any loss, damage or expense which may be incurred by CSN as a result of such delivery.

8.8.6 Acceptance of baggage by the bearer of the baggage check, without complaint at the time of delivery, is prima facie evidence that the baggage has been delivered in good condition and in accordance with the contract of carriage.

8.9 Un-delivered Baggage If baagage is not collected after 90 days from the next day of baggage's arrival, CSN has the right to process it according to the regulations on un-delivered baggage.

8.10 Processing of Abnormal Carriage of Baggage 8.10.1 In the event of delay, loss or damage in the carriage of baggage, CSN and CSN's authorized ground handling agency, together with passenger, should fill up a Record Form of Accidents of Baggage Carriage, check out the situation and reasons, and report the results of investigation to passenger and departments concerned. If compensation for baggage happens, it can be processed at t m m m m W m m m W m m m m M m m m m m

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1) Suitcase and handbags and so on must be locked; 2) It's not allowed to bound more than two pieces of baggage into one piece; 3) It's not allowed to attach other items to baggage; 4) Bamboo baskets, net bags, grass strings, grass bags and so on are not allowed to be used as packing materials; 5) Passenger's name, detailed address and telephone number should be written on baggage.

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REFERENCE h p www csa com en o de s o de cond ons 20110727 pd

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Opinion BusinessMirror

A6 Saturday, July 11, 2015

editorial

Leave gasoline taxes alone!

A

merican economist Milton Freidman wrote, “Nothing is so permanent as a temporary government program.”

The Britain government instituted an income tax as a temporary measure to fund its war against France and Napoleon in the early 1800s. It is still public policy, and that war ended 200 years ago.

The United States had to amend its constitution to start taxing income, as the constitution forbids government to collect income tax. Originally, the tax was 1 percent and applied only to the top 1 percent of all income earners.

Today the average American pays over 25 percent of his or her income to the national government.

As the BusinessMirror reported a few days ago, Finance Undersecretary and chief economist Gil S. Beltran has recommended that the government increase excise taxes on gasoline now to help raise revenues, while oil prices have again gone down in the international market. The justification is that the inflation rate has dropped to a 20-year low and, in the first half of the year, averaged only 2 percent.

“As such, the government should take advantage of the currently lower energy prices and adjust gasoline taxes before international oil prices resume their upward trend,” he added. The implication is that this tax increase would only be ‘temporary’. Our prayer should be that we be saved from ‘temporary’ government taxes. While inflation is low now, in large measure because of lower oil prices, from 1958 to 2015 the Philippine inflation rate averaged 8.77 percent. From 2000 to 2015 the inflation rate averaged 4.68 percent. In fact, in 2001 the global price of oil was $23 per barrel, less than half of today’s price, yet our inflation rate averaged 6.75 percent for that year.

The economic incentive described by the Department of Finance (DOF) is that Customs collections are down because of the lower oil prices. But, of course, a political agenda may be a part of this move also. “The DOF official was particular on raising gasoline excise-tax rates only, apparently due to the sensitive nature of other petroleum products, such as diesel and kerosene, which are used mainly by the masses.” That is, of course, a false premise, as the “rich” people are equally affected by diesel-price adjustments, as much as the “masses” are affected by gasoline prices.

Further, it is suggested that the tax be raised by a presidential executive order. Does not that power fall exclusively to Congress?

If the DOF was serious and honest about this being a temporary increase in the excise tax on petroleum products because of the current lower crudeoil prices, then the tax should be indexed to global oil prices and passed as a law and not an executive order. In Congress, any tax change would have to go through the “due process” of discussion, not just based on the recommendation of one government department.

A change in the tax rate on a basic, vital and necessary commodity should be debated by the people and their representatives. This proposed increase in taxes on gasoline is wrong.

Since 2005

BusinessMirror A broader look at today’s business Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief

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Pumping and dumping John Mangun

OUTSIDE THE BOX

T

he Philippine Stock Exchange Composite index (PSEi) closed at a historic high on April 10, 2015, at 8,147. The PSEi has lost approximately 9 percent since then, keeping it just slightly above the decrease percentage that would be defined as a “correction.”

The drop in stock prices has been attributed variously to the Greek debt negotiations, the crash of the Shanghai stock market, and disappointment in the current and forecasted economic growth of the Philippines. None of the “reasons” given is correct. And, more important, none of it matters.

“Pump and dump” is a term used to describe a type of stock manipulation that has perpetrators buying shares at a low price. They entice unsuspecting, but very willing, buyers to come in based on unrealistic future expectations, and then the “perps” sell out at a high price when the pool of fools is exhausted, which usually causes the price to collapse.

We have had several examples of this on the local stock market in the last year.

However, the global financial markets, as well as most economies and subsectors of those economies,

China’s illness is contagious for Asia

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines.

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have been pumped and sometimes dumped for most of the 21st century.

The Dow Jones Industrial Average index for the New York Stock Exchange is up 70 percent in the last five years. The Morgan Stanley All Country World Index of stocks is up 65 percent in that same period.

Has the United States or the global economy created enough wealth to justify the increase in stock prices?

The US economy is 20 percent—not 70 percent—larger than it was five years ago. The global economy is 19 percent larger.

The PSEi is up more than 100 percent since the end of 2009. However, the size of the Philippine economy is 70 percent bigger at the end of 2014.

The PSEi growth is 42 percent higher than the growth of the economy, not the 250 percent as in the US. While there may be some justification for complaining that the PSEi has gone too far—too fast, the

trajectory of economic growth in the Philippines is still good enough to create the wealth necessary to fuel the stock market.

Those who say that the Philippines is just like the rest of the world do not understand either the Philippines or the rest of the world.

All the attention is now on the Chinese stock market and the Greek debt situation. What the “experts” do not comprehend—or choose to ignore—is that both are exactly the same for exactly the same reason.

The policy of major governments and their banks since this century began is to “pump” the price of assets. This has been done to give the illusion of genuine wealth creation, to increase government tax revenues and for financial-institution profits.

China has not done anything in the last few years, either in real estate or equities, that was not done in the US and Europe. It is just a little late to the game and, because the government is a dictatorship, it has been able to do “pump on steroids.”

The West is, in fact, jealous. Imagine being able to build “ghost cities” putting hundreds of thousands to work, while Spain is facing a 25-percent overall unemployment and the US has a 12-percent youth employment. Imagine the profits for the global banks and financial institutions if they had been able to get the Western stock markets to double in price in one year, like the Shanghai market did.

William Pesek

W

BLOOMBERG VIEW

hen the US sneezes, an old saying goes, the world catches a cold. That’s been nowhere more true than in Asia. But as China’s coughing fit grows louder, countries in the region are wondering whether their neighbor’s illness will also prove contagious.

Since Wall Street’s crash in 2008, Asia has been pivoting to China. The $16.8-trillion US economy is still 1.8 times bigger and its per-capita income dwarfs China’s. But China is Asia’s biggest trading partner and, increasingly, its benefactor. Flush with $3.7 trillion of currency reserves and its new $100-billion Asian Infrastructure Investment Bank, China has used checkbook diplomacy to make friends across the region.

Asia’s social-media accounts are now pulsating with talk of how a #ChinaMeltdown might send the region into a tailspin. Even Australia, which is reeling from plunging ironore prices, and Japan, whose currency

is suddenly surging, are bracing for a downturn. As China’s high-flying economy confronts the basic laws of economics and finance, many countries in Asia are second-guessing the relationships they established with Beijing in better times.

In part, that’s because they have trouble discerning Beijing’s strategy for dealing with the crisis. Say what you want about Washington gridlock, but the workings of US power is exceedingly transparent relative to that of Chinese policy-making. The aggressive Fed rate hikes of the mid1990s that shook world markets, for example, were amply telegraphed in advance. And Washington’s efforts

in 2008 to contain the subprimeloan crisis were maddeningly slow, but everybody was able to follow along with the debate. China’s response to the #ChinaMeltdown of 2015, by contrast, couldn’t be more opaque, unpredictable or—if you’re a neighboring government—frustrating.

Until now, Asia hadn’t minded hitching its hopes to an authoritarian state run by an impervious cast of policy-makers. And, to be fair, the countless steps Beijing has taken over the last two weeks to support stocks paid off on Thursday, as the Shanghai Composite Index rose 5.8 percent. But Asia has no way to tell what Beijing plans to do about the current crisis and every reason to doubt China’s ability to withstand it.

To be the stable and reliable growth engine Asia needs, China has to recalibrate its entire economy.

That will require politically sensitive reforms to empower small- and medium-size companies; wean China off its addiction to exports; and rein in a vast shadow-banking industry creating fresh debt bubbles.

Xi claims he’s on top of these and myriad other challenges. But how would officials from Jakarta

But you have to give the US and Europe credit for their efforts; they were able to sustain a real-estate price boom for many years.

On the other hand, while the official economic goal is to increase inflation, the governments have done all that they could do to get commodity prices lower. Crude oil is down 50 percent. The Bloomberg global commodity price index is 20 percent lower. Copper prices are off nearly 40 percent. Iron ore is down 70 percent. Even global rice prices are down more than 20 percent.

If commodity prices are not going higher, where can you invest? Answer: real estate and stock markets.

The Greek debt is a pump. That country has received billions in the last five years and the bankers have made big profits. The International Monetary Fund and countries like Germany have bought the bad debt, and any losses will be paid by taxpayers, not by the banks.

Pumps are usually followed by dumps. But as the Chinese government has proved, the power of the banks and governments is greater than anyone could have imagined.

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.

to Seoul know? How can neighbors assess whether excessive debt and overcapacity are sending China into a deflationary spiral? The reality is they won’t know until it’s too late. All they can do is accelerate their own efforts to make domestic demand so they’re not so dependent on exporting to China. But that’s easier said than done.

And China’s problems arrive at an inauspicious time for the region, which has anxiously been awaiting Federal Reserve rate hikes and turbulence in Europe. Bank of Korea Governor Lee Ju-yeol spoke for many on Thursday when he warned against underestimating the fallout from Chinese volatility. So did Indonesian Vice President Jusuf Kalla, when asked about Greece. “For us, the situation in China is more worrying,’’ Kalla told Bloomberg Television. Investor Bill Gross, meanwhile, says the smart trade now is to “take advantage of other markets that would be affected by China.”

US growth still matters plenty.

But Beijing’s gross domestic product arguably matters much more to Asia’s health these days. Too bad the region has no real way to take China’s temperature.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Saturday, July 11, 2015

AFP’s failing modernization Filipinos thumb down manual polls plan is stuck with a bigger irony Rev. Fr. Antonio Cecilio T. Pascual Cecilio T. Arillo

database

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HE bigger irony is that, while the government is vigorously fighting for the allotment of a P70-billion initial budget for the proposed Bangsamoro law cocreated by the Moro Islamic Liberation Front, the country’s fiercest terrorist organization, it is letting the Philippine Air Force (PAF) settle with obsolete and refurbished helicopters for the supposed Armed Forces of the Philippines (AFP) modernization program with a miniscule P1.2-billion budget. Worse, the chopper deal is even tainted with corruption.

Looking back, had the leaders of this country, particularly the members of the 9th, 10th, 11th, 12th and now the 16th Congress, saw the wisdom of supporting the AFP modernization program, the country today would already be enjoying the protection of a modern military and the government would have made huge savings considering the value of the peso then.

The proposal to modernize the AFP beginning in 1990, apart from human resources development and doctrines program, included: A 25-percent reduction of the AFP troop strength from the present level of 126,686 to 95,000.

The AFP General Headquarters (GHQ) and the Wide Special Support Units (WSSUs) were to reduce its present 10 principal coordinating staff and 21 special and personal staff to nine and 12, respectively.

The number of WSSUs was similarly to be reduced from 16 to 10.

The reorganization would have resulted in the reduction of AFPGHQ/WSSUs personnel from the present 12,356 to 7,000 by the year 2005.

The Army would have been restructured by reducing the present eight Infantry Divisions to three, with eight Infantry Brigades (separate) instead of the present 27; the Special Forces Regiment and the First Scout Ranger Regiment merged into a Special Operations Command; the Five Engineer Brigades to three; and Service Support Units from six to five.

The Army Headquarters staff was to be maintained at nine coordinating staffs, while the number of special, technical and personal staff would have been reduced from 19 to 12. The reorganization would have resulted in the reduction of the Army troop strength from the present 81,533 to 53,342.

The Air Force would have been restructured into five principal functional commands (Air Defense, Tactical Operations, Logistics, Training and Reserve) and 10 separate and support units. The Headquarters Air Force staff would be maintained at nine coordinating staff, and the special and personal staff reduced from 20 to 11.

The Air Force strength after the reorganization would have been slightly reduced from the present 18,223 to 16,006.

The Navy would have been restructured from the present six Naval Districts to four Naval Operating Force Commands; reduce the strength of the Philippine Marines by unfilling one Marine Company per Brigade or a total of three companies; reduce the naval separate and support units from 12 to 11; reduce the Headquarters Navy staff from 11 to 10 of the coordinating staff, and from 21 to 14 of the special, technical and personal staff.

The reorganization would have slightly reduced the Naval strength from the present 25,814 to 24,536, which was similar to the Air Force.

The GHQ’s thrust of equipment acquisition was communication for command and control to enable the National Command Center and the Commander in Chief to directly control deployed units in time of crisis. Total equipment outlays amounted to P10.62 billion spread over 15 years. The cost for the first

five years was only P3.85 billion.

Army’s equipment acquisition and inventory upgrading were designed to improve firepower, mobility and communications. The principal equipment to be acquired were howitzers, light-armored vehicles, engineer equipment and communication equipment. The total cost was P39.646 billion spread over 15 years. The cost for the first five years was only P6.505 billion.

Air Force’s acquisition and inventory upgrading were for air defense as top priority followed by tactical air support for ground naval forces, long-range maritime air surveillance oriented toward the protection of the Exclusive Economic Zone, battlefield airlift mobility, strategic airlift, simulator and communication for command and control.

The program was expected to enable the PAF to acquire 36 multirole jet fighters with appropriate ordinance, six air-defense radars, 24 surface-attack aircraft and six long-range maritime patrol aircraft. Upgrading will focus on the F-5 jet fighters, F-27 transport and the C-130 cargo fleet.

In the first five years, Air Force would have acquired 12 brand new multirole aircraft (F-16 or Mirage 2000), five radars, four long-range patrol aircraft and six surfaceattack aircraft.

The cost for acquisition and upgrading was P113.713 billion spread over a period of 21 years for deliveries, commencing 1996.

The cost for the first five years was P13.234 billion.

Navy’s acquisition and upgrading included 12 offshore patrol vessels, six Corvettes, three frigates and 40 patrol vessels. Ten patrol ships and 25 marine amphibious vehicles were also programmed for upgrading. In the first five years, the Navy would have acquired three offshore patrol vessels, two Corvettes, eight patrol ships, three training simulators and eight upgraded ships. Acquisition and upgrading would cost P134.31 billion spread over 22 years beginning 1996. The cost for the first five years was (cash outflow) P16.916 billion.

In summary, the cost of equipment acquisition and inventory upgrading was P286.267 billion and P12.013 billion, respectively, or a total of P298.28 billion over 22 years. The cost for the first five years was P32.873 billion for acquisition, P7.635 billion for upgrading or a total of P40.51 billion. Of this total, 32.7 percent was for the Air Force, 41.8 percent for the Navy, 16.0 percent for the Army and 9.5 percent for the AFP GHQ/WSSUs. The proposal would have saved the government at least P10 billion a year in overhead expenses for the maintenance alone of the expensive multilayered command structure.

Just imagine if the Army’s 10 divisions, 30 brigades and 90 battalions, each with independent headquarters, were reduced by 50 percent, the money saved could have easily modernized the military and lots of it could have been channeled to increase salaries and wages of the men in uniform, and thus, minimize corruption and demoralization.

To reach the writer, e-mail cecilio. arillo@gmail.com

SERVANT LEADER

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adio Veritas recently released the results of its Veritas Truth Survey conducted during the second quarter of 2015 regarding public opinion on election automation. The survey showed that a great majority of Filipinos (64 percent) do not want to return to manual elections in 2016.

When asked if they want to revert back to manual elections in 2016, only 20 percent said they prefer pre2010 manner of casting and counting of ballots.

The result was higher among those who serve as board of election inspectors (BEIs) with three out of four (76 percent) stating that they do not want to go back to manual elections.

Broken down by region, 76 percent of voters from Luzon, while more than half of the voters from the Visayas (56 percent) and Mindanao (54 percent) said they prefer the current automated elections.

Among the BEIs, 72 percent of those from Luzon, 84 percent from the Visayas, and 56 percent from Mindanao share the same opinion.

In terms of highest educational

attainment, all (100 percent) voters who have post graduate degrees, seven out of 10 (70 percent) vocational graduates, and two out of three college and high-school graduates (66 percent and 64 percent, respectively) said they do not want to return to manual elections. Only 46 percent of those who graduated from elementary said they prefer automated elections.

Moreover, the survey showed that almost all (87 percent) of BEIs believe the use of the Precinct Count Optical Scan (PCOS) machine helped them in managing the elections, while most voters (76 percent) said it helped them cast their votes during elections.

The results were consistent regardless of geographical location, where 78 percent of voters from

Luzon and the Visayas said the use of PCOS machines during election is helpful, while only a slightly lower result was obtained from Mindanao with 72 percent. On the contrary, almost all (94 percent) of BEIs from Mindanao said the use of PCOS machines helped them manage the conduct of the elections, while 82 percent of BEIs from Luzon and 88 percent from the Visayas expressed the same opinion.

When analyzed in terms of age range, four out of five elderly voters said the use of PCOS machines helped during elections, while most adult (74 percent) and young adult (77 percent) voters stated the same.

With regard to their trust toward election results due the use of PCOS machines, a great majority (61 percent) of BEIs and 55 percent of voters believed the outcome of the elections.

Among the voters, those from the Visayas expressed the highest trust in the election results (60 percent), while majority of those from Mindanao (54 percent) and only half of those from Luzon (50 percent) said they trusted the outcome of the elections with the use of PCOS machines. Eighty percent of BEIs from Mindanao said they trusted the results, while 62 percent of BEIs from the Visayas and less than half of those from Luzon (47 percent) share the same opinion.

The Veritas Truth Survey is

Rethink treatment of Greece

By Trudy Rubin | TNS

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he photo is shocking. A 77-year-old Greek retiree sits sobbing on the ground outside a bank with his passbook and identity card thrown on the ground. He had queued for hours at four failing banks but was unable to withdraw his pension of $178.

Not surprisingly, the photo of Giorgos Chatzifotiadis went viral. But the image illustrates much more than the suffering of ordinary Greeks.

This pensioner’s despair symbolizes the limits of a decades-old effort to meld European nations into one community based on shared democratic values. The long-term hope was to create a political superpower—the United States of Europe. A Greek exit from the euro would mark the end of this dream.

The danger of a Greek exit revolves less around its economic impact than it does on its potential political impact.

Radical parties of Europe’s far right and left have become strange bedfellows in promoting a Greek exit from the euro zone. Their common goal is to weaken the European Union (EU) and North Atlantic Treaty Organization (Nato).

If Greece leaves and descends into deeper chaos, this embittered country will be strategically placed—in southeastern Europe—to cause headaches.

Although it will still be an EU and Nato member, its leftist government may see nothing to lose from seeking alliances elsewhere.

Already, Prime Minister Alexis Tsipras has cozied up to Vladimir Putin, who

will have a potential ally inside Nato whom he can encourage to make mischief (although Putin has yet to offer any financial incentives). Tsipras could veto European sanctions on Moscow over Ukraine (which require a consensus of all 28 members).

“The lesson of the last 10, 15 years,” the Council on Foreign Relations’ Sebastian Mallaby said, “is that weak states can damage the stability of stable, prosperous states. And, if it’s a weak state, which is not only geographically within Europe, but also inside European institutions, it’s not an inviting prospect.”

This was not the way the EU was supposed to turn out.

For decades following World War II, the European dream was to reject nationalism and focus on creating economic and trade ties. And it was highly successful. Enfolded in the European Economic Community, France and Germany became allies; Spain and Portugal, long ruled by authoritarian regimes, embraced democracy. After the Berlin Wall fell, ex-communist countries joined the fold and set up parliamentary systems.

The EU was formally inaugurated in 1993, and 11 EU members adopted the common currency, or euro, in 1999, with

Greece joining in 2001.

This was a reach too far.

The essential problem is that Greek (and Portuguese and Spanish) culture and history are very different from Germany’s or Finland’s. They put different values on rules, on thriftiness.

Example: In 2010 Greece collected about 10 percent of its potential tax take; the German government collected nearly 98 percent of taxes due. So putting disparate countries into one currency, with one set of fiscal rules (largely set

by Germans), was a recipe for disaster.

When times were good, heedless French and German banks were happy to loan money to the Greeks, indifferent to the load of debt that Athens was amassing. And heedless Greek governments, banks and businesses kept borrowing.

When economic times turned bad, the level of Greek debt payments became unsustainable. Under pressure from Brussels, Athens tried uber-austerity; the Greek economy contracted by 25 percent and unemployment soared to 25 percent. It became clear that Greece could not “grow” its way out of debt or squeeze any more blood out of ordinary Greeks.

But instead of granting debt relief in 2010 (meaning irresponsible lenders would take a “haircut,” along with Greek borrowers), the EU kept lending Greece more money, which went to pay off private French and German banks.

This only increased Greek debt levels.

Instead of facing reality, the northern Europeans insisted that Greece do the impossible. The resultant tragedy

China shows how to destroy a market

By Barry Ritholtz Bloomberg View

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market, by definition, is a place where buyers and sellers can come together to exchange goods and services. That involves buying and selling those goods. Once you eliminate that free trading, you no longer have a market.

Then there is China, where the authorities have suspended the sale of 72 percent of the A-share stocks. “Investors with stakes exceeding 5 percent must maintain their positions,” the China Securities Regulatory Commission said.

Throughout history, rules and regulations have slowly evolved to markets.

Indeed, a certain level of regulation is desirable to ensure fair dealings, transparency and efficiency. By removing the ability to freely sell shares, the Shanghai Stock Exchange no longer qualifies as a market. I don’t know what it is, but if forced to come up with a name, the pursuit of accuracy would suggest calling it a government bureaucracy.

Lest you forgot, China remains a centrally planned autocratic regime ruled by the Communist Party. Niceties such

as liquidity and free trading, are deviant concepts. Pity Xiao Gang, the head of China Securities Regulatory Commission. The Wall Street Journal said he had “the toughest job in China.”

Let me suggest to Xiao that he might learn from the mistakes the West made in its recent crises.

During the dotcom bubble, Federal Reserve Chairman Alan Greenspan failed to do anything to reduce the speculative excesses. Day trading, excessive leverage, mediocre listing requirements, all worked to allow a huge bubble.

After years of gains, the Nasdaq Composite Index doubled in six months— October 1999 to March 2000—before its historic collapse of almost 80 percent.

It may be too late for Xiao to learn much from those errors. He has allowed the use of speculative leverage to run amok in China, leading to the inflation of its historic bubble. Greenspan doubled down on his mistakes, slashing rates after the crash, which contributed to bubbles in real estate, credit and commodities. Perhaps, Xiao might find that lesson useful.

During the subsequent financial crisis—which had many causes—the Securities and Exchange Commission (SEC)

sided with panicked bankers, implementing bans on short selling. That action subsequently spread around the world.

Ultimately, this kind of action removes a source of buying in a rout. Short sellers are typically the first to buy during a crash. Why? They have no risk in making the buy, as they are closing out an existing position. Thus, they act as a floor under a falling market.

The strongest collapse in US equities took place after the SEC banned short selling in September 2008.

Consider the long buyer in a market selloff: They are catching the falling knife or anvil. They risk being early, and the trade is a money loser. Short sellers suffer no such disadvantage. Indeed, it is not much of a stretch to suggest that every short sale is a future buy.

How ineffective are prohibitions of short-selling? Recall the ban in the 1930s—despite that, the Dow eventually fell 80 percent from its highs.

If stopping short sales does not prevent the occasional market collapse, consider these actual consequences of stopping sales altogether: 1) Causes markets to suffer a loss of integrity;

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being conducted to shed light and bring to fore the prevailing public opinion on burning issues of the day, in this case, the forthcoming elections in 2016.

The results of the survey come as the Commission on Elections and the Smartmatic-led joint venture are embroiled in a legal battle for the automation contract for the 2016 national and local elections.

The Veritas Truth Survey was conducted by the research department of Radio Veritas headed by Dr. Clifford Sorita. Radio Veritas is the number one faith-based radio in the country, owned and operated by the Roman Catholic Archdiocese of Manila.

The survey was conducted among 1,200 respondents from both urban and rural areas nationwide, with 33 percent of the respondents coming from the BEIs, while 67 percent are registered voters. Respondents were chosen on the basis of stratified random sampling, with +/- 3-percent margin of error.

To know more about the programs of Caritas Manila, visit www.caritas. org.ph. For donations, please call 5639311. For inquiries, please call 5639308 or 563-9298. Make it a habit to listen to Radio Veritas 846 in the AM band, or through live streaming at www. veritas846.ph. For comments, e-mail veritas846pr@gmail.com.

has revealed the hollowness of Europe’s political aspirations — and institutions.

The euro was built on a mirage.

Pre-euro, if a country like Greece was in economic distress, it could devalue its currency, thus, increasing its exports, and grow its way back to solvency. Locked into the euro, Greece has no such option.

If the EU were really the US of Europe, it would have multiple mechanisms to transfer resources to a member-state in a crisis. In the US, for example, unemployment benefits help infuse cash into regions going through high unemployment. The Federal Deposit Insurance Corp. prevents banks from collapsing.

And if a state or city declares bankruptcy, there are rules to work it out.

But EU member-states have been unwilling to commit to such transfer mechanisms. The Greek crisis may prod EU members toward greater integration, but I doubt it. Globalization seems to be driving publics worldwide toward a heightened nationalism.

It is also still possible that EU officials will try to help, whether through debt reduction or by easing a Greek exit. At the moment, however, the burghers of northern Europe seem more eager to see the Greeks suffer in order to discourage other EU members from leaving the euro.

This is shortsighted. In or out of the euro, Greece’s pain will fuel the narrative of radical European parties that are a threat to the future of a democratic Europe. If EU leaders want to save their political union, they should rethink their treatment of Greece.

2) Selling halts are blatant market manipulations; 3) Are likely to cause a huge increase in volatility; 4) Ultimately creates a huge air pocket, leading to an even bigger crash when trading resumes after the sixmonth ban ends.

China’s state-run Xinhua News reported that “police had visited the China Securities Regulatory Commission to investigate “malicious short selling.” I thought US and European bans on short-selling were counterproductive and short-sighted, I can’t wait to see the result of these moves.

When the A-share market reopens in 2016, a bigger question will remain: Why would anyone want to invest in a market where you might not ever be able to sell?

There are many ways to cause a market crash. This should be one of the easiest to avoid.

China, which has made remarkable progress over the past 30 years, may have just set itself back a decade. Or we just found out we have been fooled by the regime’s faux gestures toward capitalism. Either way, it will be interesting to watch this insane experiment unfold.

2nd Front Page BusinessMirror

A8 Saturday, July 11, 2015

www.businessmirror.com.ph

FDI inflows declined by 43% in April

By Bianca Cuaresma

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oreign direct investments (FDI) flowing inward on net basis in the first four months proved just half that a year ago, based on latest data from the Bangko Sentral ng Pilipinas (BSP).

The BSP on Friday reported that FDI in April alone amounted to $382 million, which was 43 percent lower than a year ago when this totaled $671 million.

The April FDI brought the four-month inflows to $1.2 billion, but contrasted sharply against year-ago inf lows ag gregating $2.4 billion.

These are, in essence, nonresident investments looking

Pacquiao seeks mercy for Filipino on death row in Indonesia

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ANILA, Ph i l ip pines— Boxing icon Manny Pacquiao prayed with a Filipino woman on death row in Indonesia and promPACQUIAO ised to appeal for clemency in the latest bid from her country to save her.

Pacquiao and his wife, Jinkee, spent about an hour with Mary Jane Veloso early Friday at a Yogyakarta jail. Veloso was sentenced to death for drug trafficking after heroin was found hidden in her luggage at the Yogyakarta airport in 2010. She was granted a last-minute stay of execution in April, but eight other convicts—two Australians, four Nigerians, a Brazilian and an Indonesian—were executed.

“Mary Jane gave Pacquiao a scarf with his name, ‘Pacman,’ written on it. She made it on her own when she heard that Pacquiao will come and visit her. She also gave him a ring,”

said Dwi Prasetyo Santoso, chief of Yogyakarta’s Ministry of Law and Human Rights.

Two judicial reviews have failed to overturn Veloso’s conviction and death sentence, and “an appeal for clemency may be stronger” than a third review, said Edre Olalia of the Public Interest Law Center in Manila and a lawyer for her family.

In a bid to prove that Veloso was unaware she was carrying drugs, the Philippine Department of Justice is preparing to file human trafficking, illegal job recruitment and fraud charges against a woman who allegedly brought Veloso to Malaysia, where she was given a bag that held 2.6 kilograms (5.7 pounds) of heroin. The woman has surrendered to police and admitted that Veloso didn’t know about the drugs.

In Jakarta, Indonesia’s House Speaker Setya Novanto said Pacquiao will visit the Indonesian parliament to thank the government for Veloso’s reprieve. Pacquiao is

also a member of the Philippine Congress and vice chairman of a congressional committee on overseas Filipinos.

Novanto said he will try to arrange a meeting between Pacquiao and President Joko Widodo.

The plight of Filipino workers overseas is a sensitive issue in the country, where about a tenth of its 100 million people leave their homeland in search of jobs and better opportunities. The Philippines doesn’t have death penalty.

“Wewelcomealleffortsthatwillhelp Mary Jane,” said Charles Jose, spokesman for the Department of Foreign Affairs. Migrante, a group helping Filipino overseas workers, said Pacquiao’s visit “reflects the just and growing global demand that Mary Jane be granted clemency and be brought home to her family in the Philippines.”

Before his megabout w it h Floyd Mayweather Jr. in May, Pacquiao promised to visit Veloso and to meet with the Indonesian president to personally appeal for her life. AP

to exploit the country’s longt e r m p o t e nt i a l a n d t h e r e fore more coveted t han volat i le p or t fol io i nve s t me nt s that exit at a moment’s notice and at the merest hint of domestic trouble or promise of greater returns elsewhere.

The BSP attributed the decline to lower nonresidents’ net placements in debt instruments.

By FDI component, net equity-

capital investments totaled $279 million, as placements or inflows of $369 million, more than offset withdrawals of just $90 million during the period.

Equity-capital placements in the first four months flowed mainly from the United States, Japan, Singapore, the United Kingdom and Spain.

These were promptly poured into manufacturing; real estate;

electricity, gas, steam and airconditioning supply; financial and insurance; and wholesale and retail trade activities.

So-called reinvestment of earnings totaled $266 million in those four months. This represented a decline of 20.4 percent from the $334 million posted last year.

Meanwhile, nonresidents’ net investments in debt instruments reached $688 million.

IMF downgrades 2015 outlook for global growth to 3.3 percent

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ASHINGTON—The US economy’s stumble at the start of 2015 is dragging down the world’s growth to the lowest level since the Great Recession, the International Monetary Fund (IMF) said on Thursday.

The IMF forecasts a 3.3-percent global growth this year, down from the 3.5 percent it predicted in April. That would be slowest pace of global growth since the world economy shrank slightly in the recession year 2009.

The main culprit: The American economy, world’s biggest, shrank at a 0.2 percent annual rate from January to March, hurt by nasty weather. The IMF last month cut the outlook for US growth to 2.5 percent in 2015, from April’s 3.1 percent. The US economy grew 2.4 percent in 2014.

The fund expects the US economy to grow 3 percent in 2016.

IMF research chief Olivier Blanchard downplayed the wider economic impact of the Greek debt

crisis and the possibility that Greece could be forced to abandon the euro currency. “The effects on the rest of the world economy are likely to be limited,” he said.

The IMF expects global growth to improve to 3.8 percent next year.

Meantime, America’s first-quarter troubles are pinching its neighbors.

The IMF trimmed Mexico’s 2015 growth forecast to 2.4 percent from 3 percent, and Canada’s to 1.5 percent from 2.2 percent.

The multinational lending agency kept its forecast for China’s economic growth unchanged at 6.8 percent this year and 6.3 percent in 2016.

The Chinese stock market has plunged, with the Shanghai Composite index down 30 percent from its peak less than a month ago. But Blanchard said: “We don’t see it as a major macroeconomic issue.” That is because ordinary Chinese mostly did not spend the paper gains in their stock portfolios as shares climbed to dangerous heights over the past

year; so they are not likely to cut back now. Moreover, Blanchard said, the stock market is small compared with the size of China’s economy, the world’s second largest.

The IMF predicts the euro zone will grow 1.5 percent this year, unchanged from April’s forecast; Japan will grow 0.8 percent, down from an April forecast of 1 percent; and the Brazilian economy will shrink 1.5 percent, a downgrade from April’s forecast for a 1-percent drop.

The IMF also said the global economy, dragged down by a dismal first quarter in the United States, was seen growing at a slightly slower pace this year. Still, the quarterly forecast was largely upbeat despite the Greek debt crisis and China’s financial-market turmoil. Global growth was projected at 3.3 percent this year, down from a 3.5-percent estimate in April. But the forecast remained the same for an improvement to 3.8 percent See “IMF,” A2

Three things to watch amid PHL peso down this week on China’s stock turbulence risk aversion, W falling exports CONSEQUENCES ASHINGTON—Here are three things to watch as China’s stock market has tanked this month, with share prices falling more than 30 percent in a decline that would be considered catastrophic anywhere else in the world.

CONTAGION

There’s little chance that China’s market woes will directly affect the US financial system. American investors and the 401(k) plans of ordinary folks cannot invest directly in what had been a sizzling market in China. Large investment banks such as Goldman Sachs could own some stock directly, but very little.

The stock-market woes are also unlikely to immediately knock China’s economy off kilter. “Did China’s economy transform during the 10-month market boom? No, it actually got weaker,” said Derek Scissors, a China expert at the American Enterprise Institute, a free-market think tank. “There is just no evidence that the stock market conveys to the Chinese economy.” One reason why is that national banks finance much of Chinese business, not stocks as in the United States, where companies issue shares of stock to raise capital from investors. “Despite the recent nosedive in share prices, the Shanghai Composite index is still up 8 percent year-to-date and the Shenzhen index remains more than 30 percent higher than its December 31, 2014 close,” Jay Bryson, global economist for Wells Fargo Securities, said in an investment note ahead of Thursday’s market opening. “Unless stock-market gains and losses instantly affect spending decisions by Chinese households, which seems doubtful, then the recent swoon in Chinese share prices may not have as

large an effect on consumer spending as the...loss in ‘paper wealth’ may imply.”

Consider this number, $4 trillion. That’s the amount of wealth estimated to have been destroyed in the market swoon since mid-June.

It’s not an inconsequential number. There are 90 million Chinese thought to have a stake in their country’s stock market. That, too, is a big number, but still a fraction of citizens in the world’s most populous nation. The bigger hit from the market dive is the credibility at home and abroad of China’s leaders. They are unelected and judged by the average Chinese on delivering the nation’s blistering pace of economic growth. Western powers judge them by the ability to make reforms and keep opening up China’s economy. The Chinese government has intervened in the stock market this week, and state media said about half of listed companies in China suspended trading of their stock in order to prevent steeper declines. If Chinese investors keep pulling out their money in the weeks ahead, it will be a blow to the leaders. “That control is exactly what’s at issue in the stock market,” said Scissors, a veteran China watcher who argues that its rise in economic power has been exaggerated. “That [control] is not substantive. But it is symbolic and that is important.”

The steep swings also weaken China’s image. “I don’t think this is a make-or-break event,” Scissors said. “It is not a devastating blow, but it’s definitely going to make people think twice about grandiose Chinese proposals.”

See “China’s stock,” A2

T

he Philippine peso headed for its first weekly loss in a month, as exports fell morethan-expected and events in China and Greece deterred risk-taking.

Shipments dropped 17.4 percent in May from a year earlier, the biggest decline since 2011, data showed on Friday, after a report earlier in the week showed inflation eased in June.

A gauge of dollar strength rose for a third week after Greece’s rejection of more austerity increased the chance of a euro exit and Chinese authorities scrambled to stem a stocks rout.

The peso weakened 0.3 percent since July 3 to 45.165 a dollar as of 12:06 p.m. in Manila, prices from the Bankers Association of the Philippines show. The currency was up 0.1 percent from Thursday, and has declined 1 percent since March.

“It’s more on the dollar strength as risk aversion prevailed for most of the week,” said Josef Paulo Reyes, a currency trader at the Development Bank of the Philippines in Manila.

“If you look locally, the fundamentals of the peso are good given the lower inflation rate,” he said, forecasting it would trade from 45.05 to 45.45 a dollar in July.

Finance Secretary Cesar V. Purisima said on Monday the Philippines is in a stronger position to deal with heightened market volatility given its robust external and fiscal position. The drop in exports was worse than the median estimate in a Bloomberg survey for a 10-percent decline. Inflation was 1.2 percent, compared with 1.6 percent in May. Bloomberg News