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THREETIME ROTARY CLUB OF MANILA JOURNALISM AWARDEE 2006, 2010, 2012
U.N. MEDIA AWARD 2008
A broader look at today’s business TfridayNovember 2014 10 211 No. 40 n Friday, May 8,18, 2015 Vol. Vol. 10 No.
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LAWMAKERS COMMIT TO PASSING COMPREHENSIVE PACKAGE OF TAX REFORMS EVEN WITHOUT AQUINO CABINET SUPPORT
Solons take stand on tax measures INSIDE
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PASSING THE TORCH
MOTORING
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Life
The mission and destiny
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T is good to know that all pious Jews, including the disciples of Christ, were familiar with the content of the sacred writings. But although they knew the prophecies about the Messiah, they were unable to understand a very important part of their essential message—the mission and destiny of the Messiah. On this point, Scripture was for them like a sealed scroll; like a locked treasure chest. Some sort of “veil” clouded their minds and hearts. May we be enlightened by constantly reading the Bible. Amen. EXPLORING GOD’S WORD, FR. SAL PUTZU, SDB AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com
ON THE MENU: THREE RISOTTO IDEAS FOR GLUTEN-FREE MEALS »D3
BusinessMirror
Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com
Friday, May 8, 2015
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REESE AND SOFIA ARE IN
‘HOT PURSUIT’ OF LAUGHS AND RESPECT B R K Los Angeles Times
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EHIND Reese Witherspoon’s back, Sofia Vergara was lowering her eyelids in a mock, come-hither stare. “You can really tell what Sofia is passionate about,” Witherspoon said, earnestly attempting to make a point about Vergara’s strong personal brand. When Vergara started cackling, Witherspoon whipped around. “Why are you making that face? The entire time I talk she makes faces behind my back.” Costars in the new comedy Hot Pursuit Pursuit, Vergara and Witherspoon are physical and temperamental opposites. Petite, New Orleans-born Witherspoon, 39, is best known for her performances in dramatic movies, like Wild and Walk the Line, and comedies, like Legally Blonde, and she cultivates a proper, Southern-belle persona filtered through a type-A personality. Vergara, 42, curvy, born in Barranquilla, Colombia, is best known for her performance as feisty matriarch Gloria Delgado-Pritchett on ABC’s Modern Family and her high-profile brand endorsements, such as Cover Girl, and she cultivates a spontaneous, hot Latina persona. What the actresses share is a sharp business sense, which they brought to their work on Hot Pursuit. In the movie, which opens on May 8 (it opened in the Philippines yesterday, on May 7, from Warner Bros.—Ed.), Witherspoon plays an uptight cop charged with protecting Vergara, the widow of a drug lord. The actresses, who developed the movie together, recently gathered with their Hot Pursuit director, Anne Fletcher—herself a rarity as a female director of studio comedies—for a candid conversation about money, media and the challenges of being women in show business. Reese, you speak some Spanish in this movie. Are you fluent? Witherspoon: That would be seventhgrade Spanish. Vergara: When I hear her speak Spanish, I realize why I’m funny to Americans. It was one of the great scenes for me, because I would see how she was struggling and suffering. It’s hard to really be acting when you’re translating. The emotion can’t come. So I enjoyed this, because she was feeling what I feel every day. You’re both credited as producers on this. How did the movie come about? Witherspoon: There wasn’t a lot of development going on for female comedy. Whatever you want to do, you’ve got to sort of do it yourself. I was a big fan of Sofia’s, and I thought it would be a good idea just to talk and
see if she even wanted to do a movie together. We talked about a couple of funny ideas, and this is the one we decided to develop together. It really plays on our differences. I feel Sofia brings a particular perspective and a huge Latin-American audience that’s rabid to see themselves onscreen, and it’s way overdue considering how much Latin audiences show up to see films. She knows herself and her audience better than any actor I’ve ever worked with. What you don’t see you’ve got to make in the world. Nobody was developing a film like this. Sofia, why do you think there is such a big gap between the size of the Latin moviegoing audience and the number of films starring Latin actors? Vergara: Mainly the problem is there aren’t Latin people creating content. Many of them are doing soap operas. It is a lack of Latin people writing. It’s not the fault I think of an American writer. Usually when you write, you write what you know about. I admire the people who write for Gloria in Modern Family. They’re mostly men. Mostly they’ve had wives like Julie Bowen’s character, but they’ve never had a Latin woman. Anne, this movie has a scene where Reese and Sofia pretend to be a lesbian couple to get out of a jam, and a period joke. Did you think a buddy comedy starring two women required a different approach from one starring men? Fletcher: For me it was important not to take a male genre and slot women into it. One of the things in comedy now is making women act like men. That’s not funny to me. Women need to act like women. We’re very funny. We have a point of view. As a female directing a studio comedy, you’re in a very small group. Why aren’t there more women doing what you do? Fletcher: I think it’s changing. The difference is women have to make the decision to have kids. We run out of time. In a typical heterosexual couple...the woman takes care of the family.
LIFE
Do you have kids? Fletcher: No, I transitioned into directing, and it was one movie after another after another and...you’re so focused on work that you forget about the personal life. You’ve got the drive, and you’re going, going. And then you go, “Oooh, I didn’t have that part of my life.” Vergara: It’s not like you’re a mummy.
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A mommy? Vergara: Like Tutankhamen. A mummy.
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BOUNCING BACK BusinessMirror
violates the federal Muhammad Ali Boxing Reform Act and also California alifornia and Nevada evada state laws by acting as both manager and promoter. While Haymon doesn’t call himself a promoter, the suit claims he has forbidden his boxers to sign with other promoters and both arranged and paid for sponsors, arenas and television air time for championship matches—and even paid the purses. Messages left at Waddell & Reed and Haymon’s Premier Boxing Champions hampions weren’t immediately returned. AP
“We will pass a comprehensive package of reforms in taxes, not piecemeal ones that put at risk our economic fundamentals,” House Committee on Ways and Means Chairman Rep. Romero S. Quimbo told the BusinessMirror. He made the statement, as fellow lawmakers criticized the Aquino Cabinet for trying to impose its will on Congress in the alleged trashing of bills giving individual earners tax relief through the lowering of income-tax rates, as reported by the BusinessMirror on Thursday. A ranking member of the House
CLEVELAND Cavaliers forward LeBron James (23) tries to knock the ball loose from Chicago Bulls center Joakim Noah. AP
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MANNY PACQUIAO, here shaking hands with Floyd Mayweather Sr., will be sidelined for four to six months. AP
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Los Angeles Times
ANNY PACQUIAO underwent surgery on his ailing right shoulder on Wednesday in Los Angeles, and his doctor said he “could not be more pleased” with the results for the record eight-division world champion. The operation was performed by orthopedist Dr. Neal ElAttrache, who said Pacquiao will return to the ring. Estimates are that Pacquiao will be sidelined four to six months. The surgery followed Pacquiao’s controversial shoulder injury in an April 4 sparring session and further damage in his Saturday night unanimousdecision loss to Floyd Mayweather Jr. Pacquiao told The Times on Sunday, after judges turned in scores of 118110, 116-112, 116-112 for Mayweather (48-0), that the pain he endured after throwing combinations in his dominant fourth round felt like “a needle being stuck” in his shoulder. The fact that the Nevada State Athletic Commission stopped Pacquiao from receiving a shoulder injection of the anti-inflammatory medication Toradol left the boxer “disappointed” at the commission. While Pacquiao’s team insists it communicated the fighter’s need for the medication due to the sparring injury to the fight’s drug-testing body, the United States Anti-Doping Agency (USADA), the fighter and his manager, Michael Koncz, checked a “no” box on a commission medical form question asking if he had sustained a shoulder injury. That form, completed under the penalty of perjury, was turned in at Friday’s weigh-in at MGM Grand. Citing that, and the fact that it’d received no
information from the USADA or the Pacquiao camp about the injury, the commission turned down the injection request less than three hours before the fight started. The long-anticipated bout, expected to generate more than $300 million in pay-per-view after an estimated $74 million in tickets was sold and millions more were bet on it, has drawn great criticism after Mayweather’s convincing triumph. On Tuesday Pacquiao was named a defendant in a possible class-action lawsuit alleging he deceived the public by stepping into the ring as damaged goods. Pacquiao will earn somewhere around $100 million for the bout. Pacquiao’s attorneys say the fact the fighter’s camp communicated the injury to the USADA and the commission before the fight, and was later ordered to prove he could throw right-handed punches in his pre-fight dressing room by the commission, proves there was no intent to deceive. Commission Chairman Francisco Aguilar said he was empowered to stop the fight if Pacquiao’s righthanded punches appeared weakened in that warmup. “On May 2 Manny did the best he can do and Floyd was a little better, and he deserves to enjoy his victory,” Koncz said on Wednesday. Pacquiao promoter Bob Arum told The Times on Wednesday that it was “interesting” that Mayweather texted a reporter on Tuesday saying he had interest in waiting for Pacquiao to heal and fighting him again next year. “Right now, all I’m focused on is Manny’s health and how the shoulder reacts to surgery,” Arum said. “The surgeon is one of the best in the world and it’s a pretty common procedure.”
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BOUNCING BACK C CAVS, ROCKETS SQUARE OWN SERIES
LEVELAND—Cleveland’s LeBron James rediscovered his headband and his peak form to lead the Cavaliers to a 106-91 victory over Chicago on Wednesday to square their National Basketball Association (NBA) Eastern Conference semifinal series at 1-1. All four semifinal series across the two conferences stand at 1-1, after Houston beat the Los Angeles Clippers to square that match. James donned the signature headband he ditched in March, and played like a man possessed on his way to 33 points. He powered to the basket, leaving Bulls defenders in his wake and keeping the Cavaliers—missing two starters—from falling into a 2-0 hole. He added eight rebounds and five assists for Cleveland, which led by 25 in the third quarter and withstood a third-quarter charge by the Bulls. James said the choice to wear the headband was spur of the moment. “It was in my locker and I decided to give it a go,” he said. “It was time for it to make a comeback.” The Cavs made one, too, despite again missing forward Kevin Love (shoulder surgery) and J.R. Smith (two-game suspension). “We’re a little banged up, we’re short-
handed, so I have to be aggressive,” James said. “Even more aggressive than my usual self, and I was happy I was able to make a couple of plays to help our team win tonight.” Jimmy Butler scored 18 and Derrick Rose had 14 points and 10 assists for the Bulls, who host Game Three on Friday night. Pau Gasol added 11 points—10 fewer than Game One, when he destroyed the Cavs on uncontested jumpers. Kyrie Irving scored 21 points, Iman Shumpert added 15 points, James Jones made five three-pointers and Tristan Thompson added 12 rebounds for Cleveland. Thompson started at power forward in Love’s spot, allowing James to move back to small forward. On the perimeter is where James is most dangerous and he made it clear from the outset that he wasn’t going to stand around and wait for the game to come to him. “There wasn’t one possession where he wasn’t dominant,” Irving said. “When he has that mind-set, he’s the greatest player playing our game right now.” The Cavs burst to a 13-2 lead, led by 22 in the first quarter and never looked back. “They smashed us,” Bulls Coach Tom Thibodeau said. Along with his old look, James seemed all-business from the time he took the
floor for warm-ups. He scored 14 in the first quarter and got to the free-throw line five times, three more than in Monday’s loss. James, who went just nine-of-22 from the field in Game One, set the tone and his teammates followed. “For the leader of the team, that’s what you’re supposed to do,” Rose said. “Everybody on the team followed right behind him.” Houston’s star players also rose to the occasion in a similar manner to James, producing a 115-109 win over the Clippers. James Harden scored 16 of his 32 points in the fourth quarter, while Dwight Howard had 24 points and 16 rebounds for the Rockets, who bounced back from a loss in the opener. Game Three is on Friday in Los Angeles. Trevor Ariza added 15 points and 13 rebounds for Houston, which made 42 of its 64 free throws. Blake Griffin led Los Angeles with 34 points, but had just eight after halftime as Houston locked down on him with All-Star point guard Chris Paul out with a hamstring injury. Coach Doc Rivers said before the game that Paul is getting better but still isn’t “moving well.” Rivers isn’t sure if Paul will be ready for Game Three but expects him to play at some point in this series. AP
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last year, the Philippines was adjudged to have the potential to continue to expand this year at more or less 6.25 percent. He reiterated that the IMF has no reason to doubt that the growth potential is still there but with the added dimension of growth at a faster pace than the Washington-based multilateral originally calculated. Peiris’s sanguine view on the
LOOMBERRY Resorts Corp., a company led by billionaire Enrique K. Razon Jr., said it received the regular casino license to operate its $1-billion casino in the Entertainment City. Bloomberry operates Solaire Resort and Casino, which commenced operations on March 16, 2013. It only applied for the issuance of a regular casino gaming license with the Philippine Amusement and Gaming Corp. (Pagcor) last April 22, months after it completed a new hotel wing last November. Solaire is the first to open in Entertainment City, but only a portion of its first phase, which should cost around $1 billion. The gaming license was given to Bloomberry Resorts and Hotels Inc., a wholly owned subsidiary of Bloomberry. It did not state how long the said license will last, but the one the government gave to Melco Crown (Philippines) Corp., which operates City of Dreams Manila, early this week is valid for the next 18 years, or through 2033. Solaire is said to be readying the next phase of the expansion of its facility, promising bigger facilities than the current one. Pagcor Chairman Cristino L. Naguiat Jr. earlier said that, based on the plan, the expanded Solaire will offer up to 2,000 additional hotel rooms. “Definitely, the expanded Solaire will be much bigger. Their design, I think, is already completed,” Naguiat said. According to Pagcor rules, the number of gaming tables and other gaming machines depends on the
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FILIPINO WELCOME
President Aquino (left photo) receives a warm reception upon arrival for a meeting with the Filipino community at the Grand Ballroom of the J.W. Marriott Hotel in Chicago during his working visit to the US. RYAN LIM / MALACAÑANG PHOTO BUREAU
I.M.F. LIKELY TO RAISE PHL GROWTH FORECAST FOR 2015
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| FRIDAY, MAY 8, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao
Floyd’s manager in $300-M suit
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Sports OS ANGELES—Oscar de la Hoya’s boxing promotion company is suing Floyd Mayweather Jr.’s manager and investors for $300 million, alleging they’re trying to illegally monopolize US championship fighting. Golden Boy Promotions filed the federal antitrust and unfair competition suit on Wednesday in Los Angeles. It names Al Haymon, his companies, and the venture-capital firm Waddell & Reed Financial. The suit alleges Haymon, who represents more than 150 fighters,
Solaire bags gaming license from Pagcor
AWMAKERS will use the final year of the Aquino administration in passing a revenueneutral “comprehensive package” of tax measures to make sure the benefits of the reforms will be felt by the government, the business sector and the public altogether, a leader of the House of Representatives said.
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HE International Monetary Fund (IMF), whose macroeconomic readings on the Philippines tend to be conservative, said on Thursday that the country’s local output, measured as its gross domestic product (GDP), should prove faster than the 6.25-percent clip it originally forecast for the country this year.
PESO EXCHANGE RATES n US 44.5260
Shanaka Jayanath Peiris, IMF resident representative in Manila, told financial reporters that the $272- billion Southeast Asian economy has the potential to outpace the original growth forecast for this year. “Potential growth [in the Philippines] is rising. We are going to be updating that potential growth in the Article IV consultations,” Peiris said.
This pertains to that annual event in which IMF member-economies get to be visited by a team of experts to look into their macroeconomic circumstances and assess whether such remain within a given norm. Countries with developing balance of payments (BOP) issues, for example, may request for a financial-assistance agreement with the IMF. Peiris recalled that at the conclusion of the Article IV consultations
n JAPAN 0.3729 n UK 67.8977 n HK 5.7439 n CHINA 7.1808 n SINGAPORE 33.6604 n AUSTRALIA 35.6779 n EU 50.5370 n SAUDI ARABIA 11.8745 Source: BSP (7 May 2015)
The Nation BusinessMirror
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PNP says NPA land mine kills soldiers after clash By Rene Acosta
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HREE soldiers were killed on Wednesday after members of the New People’s Army (NPA) allegedly detonated a land mine following a firefight in North Cotabato. Reports reaching the Philippine National Police (PNP) said elements of Army’s 57th Infantry Battalion were conducting patrol at Sitio Upper Lumbo, Barangay Kabalantian, Arakan, North Cotabato, when they encountered the rebels. During the firefight, the rebels reportedly detonated a land mine that killed Alfredo Callano Jr., Pfc .Mohalidin Manampan and Pfc. Robert Quilangit. Another soldier, who AFP officials identified as Cpl. Ariel Blancia was also wounded. Meanwhile, members of Citizen Armed Force Geographical Unit (Cafgu) based at Barangay Los Arcos, Sibagat, Agusan del Sur, recovered 5.2 kilos of unexploded improvised explosive device (IED), a wire and a blasting cap along the populated area at Barangay Magsaysay, Prosperidad, on Monday. Armed Forces Eastern Mindanao Command Spokesman Lt. Col. Eduardo Gubat claimed the homemade bomb was planted by rebels. “Concerned residents and local officials in the barangay tipped off the said Cafgu unit about the unexploded IED at their vicinity. The responding Cafgu personnel immediately disarmed the IED in order to protect the residents in the area,” he said. Gubat claimed that as of May 4, at least 20 unexploded IEDs have been recovered by troops on security patrol in the Eastern Mindanao area, “10 of which were planted by the NPA along roads in populated areas since April 1, 2015.” The local military spokesman said that on April 1, a civilian was killed while seven others were injured after a homemade bomb exploded along the road at Barangay Mahayag, San Miguel, Surigao del Sur. He said that on April 20, two civilians were also wounded and still in critical condition after a homemade bomb was exploded by the NPA along the national highway at Sitio Bagong Silang, Barangay San Vicente, Makilala, North Cotabato.
Escudero to AFP: Explain where P64-B modernization fund went
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By Recto Mercene
EN. Francis Escudero is demanding top officials of the Armed Forces of the Philippines (AFP) to explain how they spent nearly P64 billion of government funds.
“Money for the modernization program has been in the AFP’s hands beginning in 2002. We want to know how it was spent and where it was spent. We want to know what their procurement did to the force, how
the military condition has changed,” Escudero, chairman of the Senate Committee on Finance, said. Escudero filed Senate Resolution 1234, which sought an investigation into the AFP’s procure-
ment to modernize the military. He described the procurement as “questionable.” Escudero’s initiative is one of the resolutions tackled during the Blue Ribbon Committee hearing. According to Escudero, a total of P63.38 billion has been released to the AFP from 2002 to 2013. Out of this figure, P41.832 billion came from the General Appropriations; P12.958 billion from the remittances from the Bases Conversion and Development Authority; P1 billion from the Malampaya fund; P6.59 billion from the Department of Energy; P909.98 million from inter-
est income and PP92.438 million from government arsenal. “Why is our military still in a sorry state after P63 billion? With this money, we get to ask: Is the Filipino soldier better off than before? Are our soldiers better equipped? Are they better trained? Is their inherent bravery boosted by more confidence in fighting with the purchased arsenals? The answers will show us where this modernization plan can and will take us,” he said. Escudero said the funds appropriated for the modernization program may pale in comparison to the military giants of our neighboring countries but wise, judi-
cious and efficient spending will go a long way in strengthening our military force. “We are no Hercules compared to the formidable forces of China or Japan, so we better equip our military with the right arsenal. There is a dream sequence and there is reality. We want to see how they chose between these two in terms of spending,” he added. The senator asked Defense Secretary Voltaire Gazmin for a full accounting report on the use of the Modernization Fund. The defense chief said he will provide the committee with the report before the next hearing.
Abducted Filipino-Chinese woman shot after violent rescue attempt
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Filipino-CHINESE businesswoman abducted on Wednesday allegedly by seven members of the Abu Sayyaf Group (ASG) is recovering from gunshot wounds at a provincial hospital in Zamboanga City, military officials said. The victim, Guan Kim Maujon, alias Ining, 48, married, and resident of Barangay Tampakan, Laminusa Island, Siasi was recovered on Thursday by a joint patrol of fishermen and policemen, according to Col. Allan Arrojado, commander of the Armed Forces of the Philippines Joint Task Group Sulu. Maujon sustained three gunshot wounds in the body and was taken to a hospital in the municipality of Parang before she was transferred to the capital of Jolo and to Zamboanga City, where she was recovering, Arrojado said. The victim was snatched at about 4:30 p.m. on Wednesday at Barangay Tampakan, Laminusa Island, by ASG subleader Salip Mira and six of his men. Following the abduction, members of the Siasi Municipal Police Station, led by Senior Inspector Annidul Sali, launched pursuit operations. Mira and his men were reportedly based at Barangay Kuta Kahoy in the municipality of Pata and were strongly linked with ASG leaders Alhabsy Misaya, Idang Susukan, Yasser Igasan and Anggah Adji, all of Sulu. Arrojado said that, at around 7 a.m. on Thursday, policemen and members of the Barangay Patrol Action Team (BPAT) of Barangay Tampakan, Laminusa Island,
WHAT THE PACK!
This March 26 photo shows a man rolling on the air with the help of a jetpack at the Camayan Beach Resort in Subic Bay. Jetpacks use seawater to propel riders above water and are additional features of Philippine summer vacation packages. Roy Domingo
killed two of the kidnappers, while another three were killed as they landed in the shoreline of Cabingaan Island, Tapul Municipality. “Five of the seven abductors were killed during the incident. One was killed in Barangay Tampa-
kan, Laminusa island. Another one was killed and fall down in the sea water when the BPAT of Laminusa encountered the group during their escape,” Arrojado said. The remaining three killed were found out when the group landed in
National ID bill nears DOJ finds cause to pursue passage in Congress case against Veloso recruiters
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Editor: Dionisio L. Pelayo • Friday, May 8, 2015 A3
HE House of Representatives has approved on second reading a measure providing the national identification (ID) system in the country. House Bill 5060, authored by Albay Rep. Al Francis Bichara and former President and now Pampanga Rep. Gloria Macapagal-Arroyo, seeks to provide a single national ID system and a national, biometric information card for all Filipinos. The bill said that the Philippine Statistics Authority and the Department of Foreign Affairs as the implementing agencies of the program are tasked to create and maintain a Filipino Citizen Registry. The measure said that when the Filipino ID card is presented to any government agency or for identification purposes, no other additional identification card shall be required; except in instances allowed under the provisions of Republic Act 92225 or “The Citizenship Retention and Reacquisition Act of 2003.” It said that ID cards would be valid for 10 years and subject to renewal after, saying the cards will also store biometric data of individuals. The measure also provides penal sanctions, ranging from P50,000 to P500,000 or imprisonment of from six months to two years or both, for knowingly using false information in applying for the issuance of Filipino ID, for willful and unjustifiable refusal to accept, acknowledge and recognize the Filipino ID, and the act of connivance by a public official or employee in committing the aforementioned acts. But Gabriela party-list Rep. Luz Ilagan said that the proposal is only a threat to privacy and security of an individual. “The measure is a ‘repressive mechanism’ toward ‘intrusion into private lives’ of every Filipino citizen. This, apart from the fact that the system would entail ‘violation’ into freedom of movement and extensive surveillance,” Ilagan added. For his part, Bichara, chairman of the House Committee on Foreign Affairs, said he belies setting up a national ID system is “a practical and doable way to facilitate and streamline government transactions.” Jovee Marie N. dela Cruz
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HE Department of Justice (DOJ) announced on Thursday it found probable cause to indict the alleged recruiters of Mary Jane Veloso, the overseas Filipino worker (OFW) facing execution in Indonesia, for illegal recruitment in large scale. Prosecutor General Claro Arellano, chief of the DOJ’s prosecutorial arm, said the case will be filed against Ma. Kristina Sergio and her live-in partner Julius Lacanilao before the Regional Trial Court of Nueva Ecija. The DOJ’s recommendation came after conducting inquest proceedings on Tuesday on the complaint filed by three other alleged victims apart from Veloso: Lorna Valino, Ana Marie Gonzales and Jenalyn Paraiso. The inquest proceedings were conducted immediately after Sergio and Lacanilao were placed under arrest. No bail was recommended for the respondents. After verifying with the Philippine Overseas Employment Agency, the DOJ noted that the respondents are not licensed to recruit workers for employment abroad. “In the instant case, the sworn affidavits of Valino, Gonzales and Paraiso are united in saying that both respondents recruited and promised them work abroad,” the
DOJ declared in an 18-page resolution. “The common threat of the aforementioned affidavits is that respondents enticed them to work either as domestic helpers, factory workers, salesladies, house helpers and/or manicurists in Malaysia, Indonesia or Japan,” it added. The DOJ also affirmed the validity of the warrantless arrest of Sergio and Lacanilao due to their violation of three laws consisting of Republic Act (RA) 965, (Dangerous Drugs Act of 2002), RA 9208 (anti-Human Trafficking in Persons Act of 2003) and RA 8042 (Migrant Works Act of 1995). “Respondents’ own revelations with the PNP officials reveal that they are part of a live and existing drug trafficking cell that is currently operating not just in the Philippines, but in Hongkong, Malaysia and Indonesia,” the DOJ noted. “To be sure, respondents, along with their cohorts, are part of an existing network of drig traffickers that facilitate the entry and.or exit of illegal drugs in different countries...What makes matters worse is that respondent are persistent in their recrutiment activities, and there is evidence that such modus operandi has continued up to the present time,” it added. Joel R. San Juan
the shoreline of Cabingaan, Island, Tapul Municipality. The three bore multiple gunshot wounds on their bodies, Arrojado added. Subsequently, Maujon was recovered by fishermen and members of the Parang police led by Senior In-
spector Muharram Sawadjaan in the waters between the municipalities of Parang and Tapul, who took her to the Parang District Hospital Maujon had two gunshot wounds in her right lower breast and left ankle. Rene Acosta
Suspect in 2014 Korean abduction killed–police
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HE Philippine National Police (PNP) said it has neutralized on Wednesday in Bulacan a wanted criminal suspected of being responsible in the kidnapping and killing of a Korean last year. Rene Natad was killed at around 3:30 p.m. on Wednesday after he refused to surrender and traded shots with members of the PNP AntiKidnapping Group (AKG) who were serving a warrant of arrest for him, police said. “He was killed during the shootout with members of the AKG and Doña Remedios Trinidad [DRT] Municipal Police Station who were task to serve the warrant of arrest issued by Hon. Judge Paulino Gallegos of RTC Branch 47, Manila for the crime of kidnapping-for-ransom with homicide,” said PNP Spokesman Senior Supt. Bartolome Tobias. In his report to PNP Officer in Charge Deputy Director General Leonardo Espina, AKG Acting Director Senior Supt. Roberto Fajardo said that after
long months of surveillance, AKG tracker teams located Natad’s lair at Sitio Dupias, Barangay Kalawakan, DRT, Bulacan. “The AKG immediately coordinated with the DRT Municipal Police Station to implement the arrest. However, suspect Rene Natad, upon sensing the presence of the police operatives drew his firearm and opened fire. A brief exchange of shots occurred that resulted to the neutralization of suspect,” Fajardo said in his report. Recovered at the crime scene was a loaded .38 caliber revolver and several fired cartridges of the firearm, the report said. Natad was the leader of the Natad Robbery and Hold-up Gang and was listed as one of the AKG’s 10 Most Wanted Person for 2015. Natad was involved in the kidnapping and killing of a Korean National in Manila last March 3, 2014. The AKG did not identify the victim. Rene Acosta
Economy
A4 Friday, May 8, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon
BusinessMirror
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‘PHL still a hot investment destination’
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he Philippines remains one of the “hottest” investment destinations in Southeast Asia, despite posting slower economic growth in 2014, a global economic and research consultancy firm said in a report released on Thursday.
In its latest report, Oxford Business Group (OBG) said multinational companies are increasingly becoming interested in the Philippines. “There has been a shift in investment sentiment from emerging markets, like Brics [Brazil, Russia, India,
China and South Africa] to Southeast Asia as an alternative. Most multinational firms are already here and more are looking at the Philippines,” OBG’s Managing Director for Asia Paulius Kuncinas said during the report’s launch on Thursday.
OBG’s report on the Philippines included analyses from and interviews with key government and private-sector players, including President Aquino, Finance Secretary Cesar V. Purisima, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr., and Ayala Corp.’s Jaime Augusto Zobel de Ayala. The country’s gross domestic product growth of 6.1 percent in 2014, while slower than the 2013 GDP hike, was generally viewed by interviewees as a “good sign,” as it points to the gradual cooling of Philippine economy. This is in contrast to an “overheating” situation, wherein the economy might overproduce capacity and experience spiking inflation as a result of an extended period of growth.
Propping up the country’s rosy outlook, Kuncinas said, is the boom of the business process outsourcing sector, which has been the primary driver of the economy, along with overseas remittances and revival of the manufacturing sector. OBG, however, noted t hat problems, such as high power rates and the lack of infrastructure, could threaten the country’s competitiveness. “We have a major challenge in terms of infrastructure. Even with the availability of budget airlines, moving around is difficult and, more important, transporting goods is still expensive,” Kuncinas said. The country’s tourism sector, while getting a boost through the Department of Tourism’s “More fun in
the Philippines” campaign, has failed to market other tourist destinations in the Philippines. Power rates in the Philippines also remains one of the highest in the region and is considered a bane by the local manufacturing sector. “The cost of labor here is competitive and the market is big. So you’d expect multinationals would put up the final production—the finishing of products—here, but there is a lack of that due to the electricity rates,” Kuncinas said. OBG provides analyses in macroeconomic and sectoral developments in banking, capital markets, insurance, energy, transport, industry and telecommunications. The consultancy firm has presence in over 26 markets. Catherine N. Pillas
PLDT Group, PFA renew partnership for Franchise Asia PHL 2015 The Philippine Long Distance Telephone (PLDT) Group is back as copresentor of this year’s staging of the Franchise Asia Philippines, from June 10 to 14 at the SMX Convention Center in Manila. The Manny Pangilinan-led firm—through its units PLDT SME Nation, Sun, Smart and ePLDT—recently renewed its partnership agreement with the Philippine Franchise Association (PFA), providing the needed boost for the successful staging of the four-in-one franchising event, with the theme “Opportunities and Challenges in an Integrated Global Economy,” underscoring PFA’s commitment to raise the global competitiveness of the Philippine franchise sector in light of an increasingly liberalized global economy. PFA welcomes the support of PLDT SME Nation, which have been partners for eight years now, realizing that technology is a great equalizer and has the capacity to make MSMEs compete even in the global arena. Photo shows PFA Chairman Emeritus Samie Lim (fourth from left) and PLDT SME Community Engagement Services and Trade Marketing Head Gabby Cui (fourth from right) sealing the partnership with a handshake, after the signing ceremony with PFA officers (from left) Franchise Asia Philippines 2015 Expo Chairman Jose P. Magsaysay Jr.; PFA President Franklin Go, and chairman Elizabeth “Yvette” Pardo- Orbeta; and PLDT Group officers- Smart Communications Assistant Vice President Corinne F. Zablan, PLDT SME Wireless Head of Product Marketing Neph Denosta and PLDT SME Nation Business Development Officer Maqui Igual. Franchise Asia Philippines 2015, organized by PFA and supported by the World Franchise Council and the Asia Pacific Franchise Confederation, is the biggest franchise show in Asia. Now on its 22nd year, the country’s longest-running franchise show will feature a two-day international franchise conference (June 10 and 11), a three-day international franchise expo (from June 12 to 14), the Certified Franchise Executive Program (June 8 and 9) and educational seminars for aspiring franchisors and franchisees (June 12 to 14). For inquiries, e-mail pfa@pfa.org.ph or log on to www.franchiseasiaphl2015.com.ph.
More office spaces to become available in 2016
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he increasing demand for office and business space in the Philippines has prompted office space provider Regus Philippines to expand its operations outside of the National Capital Region (NCR). In a roundtable with Philippine media on Thursday, Regus Philippines Country Manager Lars Wittig said the global “flexible workspace” provider will open its second business center outside Metro Manila in Clark “in the next 12 months.” Regus Philippines currently has 17 business centers providing
workspace for both local and international firms looking for office spaces and business facilities in the country. Sixteen of those business centers are in Metro Manila and only one of them is outside the NCR—in Cebu City. The expansion toward regions near the NCR, Wittig said, is part of Regus Philippines’s new strategy to help alleviate the country’s “too much fixation” on Metro Manila. This expansion, he said, also shows the company’s optimism in the country’s economic performance. “The demand keeps increasing. I do not picture a slowdown,” Wittig told reporters. Aside from Clark, Wittig said that Regus is also looking at other secondary and tertiary regions in the country, which include Iloilo, Cavite, Subic, Batangas, Laguna, Baguio, Bacolod, Davao, Dumagete and San Fernando in La Union. Wittig further said that it’s “absolutely unnecessary” to crowd Metro Manila, and there is some sort of “attention deficit” to other regions in the country with equally educated and favorable demographic dividend. He also said increasing the availability of office spaces in rural areas will boost government efforts to achieve “inclusive growth” in the country. To this end, Wittig said the government should develop centers with appropriate infrastructure to move the progress outside of Metro Manila as the NCR is already “running out of space.” Wittig remained confident that the country’s demand for office space will continue to grow in the next few years—as evidenced in their above-90 percent occupancy rate in the last eight months, noting that the Philippines has one of the strongest demand for office spaces in the entire Asia Pacific. Regus started its operations in the country in 1999. Wittig said that, in the last three years, demand growth has started to pick up, and Regus has adapted to absorb the demand. In 2014 Regus Philippines opened four new business centers in the country. In the first four months of 2015 alone, Regus has opened an additional four new business centers—putting the expansion rate of the company at one branch per month. Wittig, however, refused to divulge further details on the company's expansion plans in the next years as the parent firm is listed on the London Stock Exchange. Bianca Cuaresma
Quality feeds to boost local meat industry–DA
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REAÑO: “Although the Philippines is the only country in Asean that is free from footand-mouth disease (FMD), the presence of banned chemicals in our meat products would negate this advantage.”
N official of the Department of Agriculture (DA) on Thursday cited the importance of the feed industry in ensuring food safety as a way of boosting the competitiveness of Philippine meat products in the Asean Economic Community. Agriculture Undersecretary Jose Reaño said the use of high-quality feeds ensure the production of safe meat and assures the competitiveness and productivity of the local swine industry. “Animal health is interrelated with what they consume. The competitiveness of our livestock industry starts with safe, quality feeds,” Reaño said during the launch of the first-ever National Swine Nutrition Month at the Max’s Restaurant inside the Quezon City Memorial Circle. He noted how the presence of banned chemicals used as feed additives show up in the meat of animals, rendering the meat unfit for human health. “Although the Philippines is the only country in Asean that is free from foot-and-mouth disease, the presence of banned chemicals in our meat products would negate this advantage,” he said. “ It is, t hu s, i mpor t a nt to sou rce feed s f rom reput able sources in order to guarantee that the meat we produce are safe for our health. By ensuring food safety, we are ensuring public health,” Reaño added. He also said that, since feeds comprise around 70 percent of the cost of production in livestock, the use of quality feeds would boost their competitiveness in both the domestic and international markets. Mea nwh i le, Un ivet Nut r ition and Animal Healthcare Co. (UNAHCO) President and COO Ricardo Alba said the company fully supports the government’s thrust of ensuring food safety and security. UNAHCO, one of the prime movers of the Philippine feed industry, is spearheading the celebration of the National Swine Nutrition Month along with the DA. Alba said that, in accordance with the celebration’s theme “Quality and Safety, from Feed to Meat,” his company owes it to the Filipino people to provide not only highquality feed products, but to help spread crucial information about the link between food safety and safe needs. “As the animal healthcare and nutrition division of industry leader Unilab, UNAHCO has always been one with the government in the pursuit to ensure food safety and security for the country’s growing population,” he said. “Ou r ma in concer n is t he health of the people and that is why, true to the values of our company, we make sure that every ingredient included in our feeds is safe and of the highest quality,” Alba added. As part of the National Swine Nutrition Month celebrations, the DA and UNAHCO will hold nationwide information caravans and seminars on food safety. These will be done in coordination with concerned local government units as well as regional, provincial and municipal veterinarians and health officers. PNA
Economy BusinessMirror
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Friday, May 8, 2015 A5
Apec economies to bring down tariffs on ‘green goods’–DTI
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embers of the Asia-Pacific Economic Cooperation (Apec) are expected to commit to reduce tariffs on 54 “green goods” in a bid to spur trade of the products, a senior official of the Department of Trade and Industry (DTI) said. The DTI said lowering tariffs on environmental goods to between zero and 5 percent is expected to benefit the Philippines, whose major “green” export are solar panels and components. In a news briefing, Trade Undersecretary Adrian S. Cristobal Jr. said slashing tariffs on green goods is one of the major topics for discussion during the Apec meetings, which will kick off in Boracay on May 10. Cristobal will represent the Philippines during the Ministers Responsible for Trade (MRT) meeting. The MRT meet will be held on the 24th, where trade chiefs of Apec economies will issue a statement containing the agreements reached during the highprofile meetings. Discussions on reducing tariffs on green goods started in 2012. It is meant to expand the access of smaller economies to environment-friendly technologies. The Apec wants tariffs reduced starting this year. Some of the green goods traded under the Apec include gas turbines, laboratory furnaces, dryers and water heater. Cristobal said that, while the Philippines has already slashed tariffs on 51 green goods to 5 percent, some Apec members continue to impose a 15-percent tariff on some products such as photovoltaic cells. Meanwhile, the series of Apec meetings will also include discussions on the Free Trade Area of the Asia Pacific (FTAAP), a major China-led initiative. “One of the major topics we’re going to focus on is the regional economic integration. On that point, trade ministers will discuss the FTAAP, particularly progress on the launching of the collective strategic
CRISTOBAL: “One of the major topics we’re going to focus on is the regional economic integration. On that point, trade ministers will discuss the FTAAP, particularly progress on the launching of the collective strategic studies initiated last year during China’s host year.”
studies initiated last year during China’s host year,” Cristobal added. The FTAAP is considered as China’s bid to shape the economic agenda of regional trading groups in Asia Pacific. China used its standing as the Apec host in 2014 to initiate action on the FTAAP—which has barely progressed in a decade—with Apec leaders coming out with a declaration backing the regional trade initiative. Cristobal said Apec leaders will draft terms of reference (TOR) for the collective feasibility studies on the FTAAP during the meetings. Trade ministers are expected to endorse the TOR to Apec leaders in November. Cristobal said World Trade Organization (WTO) Director General Roberto Azevedo will be in Boracay during the MRT meeting and will update Apec economies about the progress of the Bali Package, which includes the Trade Facilitation Agreement. The Bali package is a trade agreement reached during the ninth ministerial conference of WTO members in 2013. Catherine N. Pillas
BOC vows to prioritize shipments of school supplies By Joel R. San Juan
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he Bureau of Customs (BOC) said on Thursday that it will address the port-congestion problem and ensure that shipments of school supplies and equipment needed by students will arrive before they go back to school next month. Customs Commissioner Alberto D. Lina made this pronouncement during the filing of a smuggling case against a local trader before the Department of Justice (DOJ). “We will attend to the port-congestion problem and ensure that our children will have what they need before school opens. Some shipments have already been delayed. We’re running out of time,” Lina said in the vernacular. Aside from the port logjam, Lina also admitted that the revamp of BOC personnel is also being finalized, but he maintained that this would be based on performance. Malacañang said it is giving Lina a free hand to reshuffle customs personnel, including a BOC official who earlier investigated multibillion-peso shipments brought in by the commissioner’s freight company that did business with the bureau. Communications Secretary Herminio B. Coloma Jr. indicated that the Palace may not even ask Lina to explain why he transferred to the Customs Policy Research Office (CPRO) former Customs Investigation Division chief Leonardo Peralta, who headed an earlier BOC probe into shipments brought to Lina’s U-Freight warehouse. “Such matters may well fall under the administrative jurisdiction of the head of office and decisions are normally reviewed by next higher level,” Coloma said, referring to Finance Secretary Cesar V. Purisima, who is said to have endorsed Lina’s BOC appointment, the bureau being under the Department of Finance. The Palace official clarified that the Office of the President “acts only on matters
LINA: “We will attend to the port-congestion problem and ensure that our children will have what they need before school opens. Some shipments have already been delayed. We’re running out of time,” Lina said in the vernacular.
appealed from lower levels in the executive branch.” Palace Deputy Spokesman Abigail Valte added that according to Lina, Peralta’s transfer from chief of investigation to the CPRO was “initiated before he [Lina] assumed office and he signed it on April 24.” Valte said Lina also denied having any knowledge “that there was an ongoing investigation” against the BOC official reassigned following his takeover. Meanwhile, the BOC filed smuggling charges before the DOJ against an entrepreneur for allegedly bringing in 260,000 kilos of sugar with an estimated value of P13 million, which arrived in December 2014 without the necessary permits. Lina identified the respondent as Michael Abella, owner of New Dawn Enterprises. Abella was charged with violation of the Tariff and Customs Code of the Philippines (TCCP) for failure to obtain import permits and misdeclaration of the shipments. New Dawn is already facing two counts of smuggling charges, both for illegal importation of rice. The first case was filed before the DOJ in January for allegedly bring in glutinous rice valued at P28 million in Cagayan de Oro Port without the necessary permits last November. In March the bureau again filed a case against New Dawn for its purported attempt to smuggle P15.6 million of rice last December. With Butch Fernandez
A6 Friday, May 8, 2015
Opinion BusinessMirror
editorial
The train whistles go silent
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HAT worked out as well as we expected. Almost exactly a year ago, we wrote that the Philippine National Railways (PNR) was a classic government failure of ownership and management. This was at the time when Congress was getting ready to vote on extending the PNR’s operation mandate and life for another 25 years. Of course, that extension was granted in the same way lola’s famous bangus relleno is served at every fiesta, in spite of the fact that the only ones that can bear eating it are the neighborhood cats. We suggested, “The PNR should be saved. But to allow it to function the way it has since 1988, when, during the administration of Corazon Aquino, the North Main Line was closed, does not make any sense financially, or for the service of the public.” Instead, nothing has changed, and now the PNR has suspended its operations “indefinitely” “so that the government can conduct an exhaustive inspection of its train tracks to ensure the safety of its passengers and trains.” What a failure. The closure was prompted by an accident in Makati City, when several passenger cars jumped the rails and caused many injuries. Apparently, this resulted from missing angle bars and rail clips that support the rail joints. The PNR management has blamed the theft of vital parts, particularly the rail clips, for the problems facing the PNR. Of course, a lack of funding is always blamed as a problem by the managers of government-run operations, and, perhaps, the PNR has been underfunded. But sources tell us that mismanagement, and maybe karma, too, is part of the failure equation. It is undeniable that spare parts, like the rail clips, which are regularly stolen, is a serious concern. But these clips are basically a readily available part that can be bought from several international suppliers. The problem is that the suppliers do not want to do business with the PNR. It seems that, years ago, the legitimate suppliers discovered that the PNR may have been buying fake rail clips presumably from China. Whether the PNR paid the full legitimate price for the substandard clips is another story. There are court cases from the 1990s that have yet to be adjudicated. Now, the government is pushing the grandiose P287-billion North-South Railway Project under the Public-Private Partnership Program. Foreign railway operators, mostly governmentowned, are circling this project like vultures waiting to make sure the carabao is dead before feasting on the carcass. While the project is important and feasible, our confidence in it coming to completion is “indefinitely suspended.” With the continuing failure of the government to be able to manage and operate public transportation, perhaps a return to more nostalgic days is in order. It has been suggested that the failing Metro Rail Transit Line 3 be replaced with more reliable tricycles. Maybe the PNR right of way can be used by a fleet of calesas. At least, the smelly backend result of using horse-drawn vehicles can be scooped up and used to fertilize the garden. With government corporation waste, it never seems to be disposed of properly.
Don’t vote James Jimenez
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spox
ON’T vote. After all, with more than 50 million voters expected to go to the polls in 2016, what possible weight can your one vote have?
And, besides, you’re comfortable enough with the way your life is going, aren’t you? You’re young, you have a nice-paying job, a decent car, and you make enough money that you can afford a trip to Boracay at least once a year. Failing that, you can always hit the mall. So why bother voting? Nothing’s gonna change anyway. The same people who always win will win, buoyed up by the votes of the millions of people who had nothing better to do than swallow that whole con about democracy hook, line and sinker. Imagine actually believing that one person can make a difference? Oh, sure, we can always talk about how an endless number of ants can take down a whole gang of marauding grasshoppers if they ever wanted to, but that sort of thing only happens in lectures, sermons and animated movies. Not in real life.
In real life, all the little people can actually do is put down on paper who they want to lead the country, and hope that enough people made the same choices as they did. If not, well, that’s life. You don’t always get what you want and, in the meantime, you get to live with the decisions made by the majority. You can fight against that by taking a stand, and then taking the effort to educate others around you, sure, but why would you? You’re just one person. So, when elected officials—installed in positions of power by ordinary people who think they’re being relevant—start implementing policies that make it progressively more difficult for you to afford keeping your car running, you just have to grin and bear it. Who wants to drive anyway? Traffic is a killer, and finding a place to park is no picnic at all. Leave the car at home. You’d be better off.
Take public transportation, instead. Now, that will be an experience you can blog about! Imagine all the slices of life you can Instagram as you commute to work. How about those long queues of people trying to get on the trains which, by the way, are running late again today because of some maintenance issues? I’m pretty certain you can come up with some pithy commentary that a ton of people will “like.” Bask in the glory of your wittiness and social awareness while you sit around sipping your latte. And speaking of lattes, yeah, just sip it. It’s probably the most delicious thing you’ll be able to afford all day. With rising prices and all that, even the lunch lady who brings food to your office is cutting costs. She’s been doing it for awhile now, you just haven’t noticed, especially since she’s been loading up your food with artificial—but magical!—flavor enhancers, making your food taste even better than the real thing. Enjoy your food and pay no attention to your officemates swooning over this or that person they’re going to vote for in the next elections. A fat lot of good that’ll do them. They don’t even choose candidates based on platforms. All they do is go for the prettiest candidate around, or the handsomest, or the one who sang best on that late-night program on television. You know better, of course, and you’d educate them on
why they’re so wrong to decide like that, but that isn’t your job, is it? With voters like your officemates, small wonder there are still parts of the country not firing on all four cylinders. Oh, things have gotten better, sure. You can now buy more imported chips at even the dinkiest convenience stores. But can things be even better? Because, of course, everyone—you included—should be able to hit the powdery white sand beaches you’ve seen pictures of all over your Facebook feed. Unfortunately, your salary isn’t going to pay for that quite yet. And with you and your significant other looking to start a life together, well, some economies have to be taken. Thankfully, the third of your income that goes to taxes will be spent so that everyone—including you and your start-up family—benefits in a significant way. Right? Better infrastructure will be built that will allow businesses to boom, which will directly lead to higher salaries and so on. Right? Of course, all of that depends on who the people in charge are. Don’t worry about that, though, because that’s a decision other people will be making for you. You don’t vote, remember? Voting is for chumps who think they can make a difference. Oh, and, yes, this is called sarcasm. Go register, and go vote. James Jimenez is the spokesman of the Commission on Elections.
Opinion BusinessMirror
opinion@businessmirror.com.ph
Low agricultural productivity detrimental to PHL economy
The aristocracy of any past Tito Genova Valiente
Leonardo A. Lanzona Jr.
EAGLE WATCH
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NE of the more prevalent features of growth is the movement of labor from agriculture to other sectors, such as manufacturing and services. In the more advanced economies, this transformation can be attributed to two factors. First, agricultural products are believed to be nonresponsive to price and income changes at a certain high level of income, hence resulting to a lower share in the country’s total output, as the economy grows. Workers are then expected to transfer to the growing sectors. Second, since land is fixed but is predominant in agriculture, labor absorption in this sector was limited, resulting in lower employment share in the face of increased population. These two factors will make it efficient for labor to move away from agriculture. Efficiency would then be seen in the emergence of off-farm activities in rural areas. Previously, most people had thought that rural off-farm employment is a low productivity sector producing low-quality goods, expected to wither away as a country develops and incomes rise. A corollary of this perspective is that the government need not devote resources to promoting the sector, nor be concerned about negative repercussions on the rural non-farm sector arising from government policies directed at other objectives. However, recent studies argue for paying greater attention to the non-farm sector mainly because of the sector’s perceived potential in absorbing a growing rural labor force, in slowing rural–urban migration, in contributing to national income growth and in promoting a more equitable distribution of income. In fact, depending on their ability to link with other industries, rural non-farm firms can be more productive than urban firms. The expansion of the rural non-farm sector nevertheless hinges on agricultural development for three main reasons. First, the labor productivity in agriculture, measured in terms of output per worker, has increased to the extent that laborers may now be released to other sectors without reducing its overall production. In this case, those remaining in agriculture are able to produce more presumably because of access to technology and human capital. Second, assuming that there is agricultural growth, the savings generated from farm activities will be large enough to create new activities, which may or may not be related to agriculture. Third, increased agricultural productivity creates a demand for non-farm products because of subsequent increases in incomes. Thus, the crucial element is high agricultural labor productivity, leading to savings and incomes and the movement of labor away from agriculture forms part and parcel of the country’s structural transformation. Unfortunately, the case of the Philippines is different to this ideal scenario. It is true the share of the agricultural sector to total output has declined from 14 percent in 2011 to 10 percent in 2013 due to various reasons including the overall increase in economic growth. And, for the same period, the share of agriculture to total employment, indeed, decreased from 37 percent to 30 percent. However, the problem is in agricultural productivity. The figure below shows my calculations of labor productivity for all sectors in terms of real value of output per worker. Note that labor productivity in agriculture remained largely constant and significantly lower than the other sectors.
The observed decline in employment share combined with the low agricultural labor productivity is detrimental to the economy for a number of reasons. First, because agricultural productivity is low, the current economic growth, due in part to the rise of the manufacturing sector, cannot be considered inclusive. Manufacturing growth, while presumably providing benefits to the poor, may not be particularly progressive in terms of its distributional effects. Rural non-farm production, however, given low capital and land requirements, could be potentially more accessible to the poor than the manufacturing activities found mostly in more industrialized areas of the country. Second, people, indeed, move out of agriculture toward rural off-farm activities. However, because households lack savings, they do not engage in modern, capital intensive types of technologies, such metal-working or machinery repair shops, activities that have forward linkages with the other sectors in the economy. Instead, they are involved in less productive sorts of activities, such as retail and traditional forms businesses, such as household rice-milling, which may eventually be crowded in the process of market integration. In the end, such activities may not be sustainable. Third, having no other options to raise incomes from agriculture, household members may opt to migrate to other countries. Indeed, while these members may not necessarily have reached higher levels of education, the members are highly motivated individuals, willing to take risks in outside the country. Those remaining in the farms and rural areas are often the less motivated and less productive members of the households, leading to lower wages in the rural areas. Because of this, despite the substantial remittances, migration can have significant opportunity costs. The main point is that, even as the country revives its manufacturing sector and aims for higher growth rates, it cannot afford to ignore its agricultural sector. Without raising agricultural productivity, much of its efforts in achieving high growth rates will be unsustainable and, more important, non-inclusive. Leonardo Lanzona Jr. is director of the Ateneo Center for Economic Research and Development and a senior fellow of Eagle Watch, the school’s macroeconomic research and forecasting unit.
annotations
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AY is the National Heritage Month in this country. It is nine in the evening and, as I write this, I could hear from afar the sound of men and women and children singing the alabacion (from the Spanish alabanza, or praise) to the Cross. In our small subdivision, the scenario is straight out of an exaggerated production design of a Filipino film that, to be Filipino, should either have a procession or a funeral or both in the narrative.
Our home is at the edge of a subdivision and, where the tiny parcel of lot planted to rice begins, the informal settlers live. Remove the informality of their residence and they are what some people call squatters. The procession is outside—not part—of the huge church. I doubt if one asked permission from the parish priest if one would like to have the Santacruzan or Flores de Mayo or the Aurora. The evening procession has become one or all of these three. There is something odd about this evening ritual and, thus, qualifies it as part of our charming (read: tourism) heritage. With old buildings, any ritual that seems to have escaped the monitoring of the institutional church becomes a strong candidate for a “heritage” list. Mention the word “heritage,” and everybody scampers to the past. Always in that vain attempt to reach our favorite past, we fall with a thud
as we hit the bricks and bridges of the Spanish colonized past. Our preferred past is the Spanish past. Look at old buildings where the finishing is removed only to show bricks within. I have seen structures newly built, where part of the design is to expose seemingly old bricks. Listen to old families talk about the saints in their collection as dating always to the times of the Spanish colonizers. This love for the Spanish past makes our heritage and identities contentious, as with all heritage concerns are contentious but ours. And, so, we talk of our aquiline noses and ascribe them to Castilian ancestors. We pay researchers to uncover crests that we can use to bandy our family names, forgetting that our Spanish names came by way of a capricious law. But it is May, the month of heritage. What would compose Filipino heritage? I have always wanted to do this for my column ever since—to enu-
Pacquiao for president? By Nisid Hajari Bloomberg View
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AVING lost the “fight of the century” to Floyd Mayweather Jr., Filipino boxer Manny “Pacman” Pacquiao now has to deal with a class-action lawsuit accusing him of hiding a shoulder injury before the match. Assuming he can dispatch that case better than he did Mayweather, though, his next challenge is clear: “He’s going to be president,” promoter Bob Arum recently told TMZ Sports. Arum, like most boxing impresarios, is admittedly not given to understatement. Still, the scenario he lays out is plausible. Pacquiao, 36, is already a two-term legislator in the Philippines. He plans to run for the senate next year—a nationwide contest in which his unmatched popularity should serve him well. Six years later, when he’ll finally have passed the age threshold to become president, he’ll have at least an, er, fighting chance at the nation’s highest office. In 2013 polls, almost 40 models, actors and other celebrities (including Pacquiao and his wife, Jinkee) ran for office. In 1998 former actor Joseph Estrada actually became president.
That’s exactly the problem, however. As a politician, Pacquiao fits the traditional Filipino mold a little too well. His immense wealth—according to estimates, he had career earnings of more than $300 million even before the Mayweather bout— has, on the one hand, blunted any accusation that he’s profited from office. On the other hand, he seems beloved in his constituency of Sarangani, on the southern island of Mindanao, largely because of his generous patronage: He and Jinkee have given supporters fishing boats, land, scholarships and even buffaloes. Pacquiao’s record as a congressman is scant; he’s sponsored no successful bills. In 2014 he turned up in the legislature only four times. Now he’s reportedly scheduled to take over a congressional committee that oversees 10 million Filipinos— about 10 percent of the population—who work overseas. No doubt Pacquiao, who grew up dirt poor and had to recycle cheap wine bottles to earn extra cash, can empathize more than most pols with Filipino, such as Mary Jane Veloso—the former domestic worker and accused drug mule, whose last-second reprieve from execution in Indonesia riveted
Friday, May 8, 2015
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merate to death a list of elements that compose Filipino heritage. Out of frustration for the obsession with burial jars, Ming pottery, old maps and museums, here is my list: guavas ripened and candied; siman, sinuman, ibus, binamban—rice cakes showing the splendor of packaging and wrapping; Santacruzan with senior citizens as sagalas and Santacruzan with gay male beauties; books of poetry in various languages in the Philippines; betel nut for chewing; rituals to appease enchanted beings; folk songs about sex and death; folk dances about mating; cockfighting and spiders as gladiators; baskets and banig (mats); songs about unfinished social revolution sung by farmers and tillers; traffic signs and signages; tarpaulin at funeral homes; karaoke during wakes; balloons released when the coffin is lowered to the grave; actors as politicians and politicians as actor; utang na loob (debt-of-gratitude) rediscovered during period of execution; boxing and death penalty; Veloso, Pacquiao and Mayweather; our ethnic jokes and possible deportation of a Thai who called us slum-slaves (to a degree truthful and the alliteration hurts); early campaign ads; our kind of Commission on Elections; presidential sisters; strawberry and teleserye; fiestas and street dances inspired by commodities and invented myths; the Marcoses and the Aquinos, and the dynasties; K-12 and the death of a national language; K-12 and the death of Grade 6; K-12 and the dream of global competitiveness; dead national artists and dead arts; Boracay and bikini open; national
heroes and epic heroes; lechon and balut and sweet hamburger and sweet spaghetti to stand for the ideal pasta; stories of other women and other men; stories of boy-angels and child labor; balikbayan boxes and Smart padala; glutathion and whiteners; spa and “clean” massage; selfie and wacky; lotto and jueteng; e-bingo and e-libing; flyovers and colorum buses; Baclaran and Quiapo; pirates and DVDs; chocolate and casinos; traveler’s tax; beaches and volcanoes; beauty queens with exotic European family names; our admiration for Aling Dionisia and Jinkee Pacquiao; muscle relaxants; detergents and deodorants; shampoo for all kinds of hair and girls for all kinds of shampoo; weddings of the century and match of the century; computerization and nuisance candidates; TV hosts, who are social workers; primetime news with gossip; the Bimbis and the Darlas imposed on us each day; Magellan’s cross, Santo Niño and El Niño; super storms and super donations; Century tuna and Century bods; transgenders and translocals; American bases and brothers who are not pigs; virgin mothers who take care of poor children and transform them to superstars and a god among gods who favor boxers; and guava leaves chewed when boys become men and who grew up to be the haligi ng tahanan (or pillars of the home), battered wives and wives who are happy to be called ilaw ng tahanan (light of home) when an energy crisis is upon us. They are all heritage.
the nation last week. (Pacquiao issued a videotaped appeal to save her life.) Another 88 Filipinos remain on death row around the world, while countless others are vulnerable to unscrupulous traffickers, abusive employers and corrupt officials. With his sky-high global profile, Pacquiao should make a good spokesman for their plight. What Filipino migrants need even more than a champion, though, are policies that will generate good jobs at home. Although the remittances these workers send back—which reached a record-high $24.3 billion in 2014—are crucial to alleviating poverty, they do little to further economic growth in the Philippines. Indeed, according to researchers at the International Monetary Fund, “no nation can credibly claim that remittances have funded or catalyzed significant economic development.” To the contrary, a brain drain deprives the Philippines of some of its most skilled and productive workers, while the departure of one parent often leaves broken families at home. On Monday Indonesia banned sending maids to 21 Middle Eastern countries accused of human-rights abuses and low pay, part of President
Joko Widodo’s plan to end such labor exports entirely. As Widodo’s February edict suggests, it’s not impossible to reverse even a massive outflow of workers. India and China, for instance, have recently seen high-skilled workers return home in large numbers. The way to make this happen is to improve infrastructure and create clusters of high-tech businesses integrated into the global system, so that workers need not fear regressing in their careers if they come back. For lowerskilled workers, increasing urbanization and a shift toward services and higher-end manufacturing should reduce underemployment and lift wages, making up for any loss in remittances. Pacman has had little to say about any of this—before or after his Las Vegas defeat. That’s not to say he doesn’t mean well, or that he won’t always be beloved by Filipinos for his exploits in the ring. In theory, he could surround himself with smart advisers and study up on key issues, training for higher office as he might for a championship bout. If he doesn’t want to do that, he might consider taking a break from politics, as well as pugilism.
E-mail: titovaliente@yahoo.com
2nd Front Page BusinessMirror
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www.businessmirror.com.ph
GIR saw $340-M hike in April to $80.8 billion
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By Bianca Cuaresma
he country’s foreign-currency reserves bounced back in April, rising higher to $80.8 billion from the level reported in March, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.
Preliminary data from the central bank show the country’s gross international reserves (GIR) rising $340 million higher in April, from only $80.46 billion in March and from only $79.85 billion in April last year.
“The increase in reserves was due mainly to the national government’s net foreign-currency deposits and the BSP’s i ncome f rom i nvest me nt s abroad,” the BSP said. The April GIR would have been higher, if
not for the government’s maturing foreign-exchange obligations that had to be serviced. There were also so-called revaluation adjustments on the BSP’s gold holdings that affected its ultimate level. The countr y’s GIR finds utility in the underwriting of foreign-currency obligations as and when they mature. Gold reserves, special drawing rights, foreign investments and foreign-exchange reserves comprise the country’s GIR. A high level of reserves allows the Philippines to be in position better able to pay its obligations and serves as a buffer against im-
balances brought on by external developments. A GIR this high should be sufficient to cover 10.6 months’ worth of imports of goods and payments of services and income. It should also equal 4.8 times the country’s short-term external debt based on original maturity and 3.7 times based on residual maturity. The BSP ’s gold holdings dropped from $7.437 billion in March to $7.404 billion in April. Inflows from foreignexchange operations also declined during the month, from $849.7 million in end-March 2015 to $247.3 million.
Govt cracks down on water firms after income-tax spat IMF. . .
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he government is setting tougher audit and reporting rules for Manila’s two water-service providers, the latest development in the spat between the regulator and the companies, one of which is partly owned by Marubeni Corp. Regulatory audits will now be annual instead of every five years, and Manila Water Co. and Maynilad Water Services Inc. will be barred from passing on expenses to customers that are not related to water operations, Joel Yu, chief regulator at Metropolitan Waterworks and Sewerage System (MWSS), said in an interview on Wednesday. The rules will also clarify their rate of return, he said. “The guidelines are meant to institutionalize the regulatory functions,” Yu said. “We don’t want an office that vacillates in the way regulatory functions are carried out,”he said, adding that all parties
will sign the agreements soon. The crackdown comes after MWSS barred the companies from recovering part of their corporate income tax from clients after conflicting rulings from the International Chamber of Commerce. Both Manila Water and Maynilad have demanded payment from the government for financial losses, with the latter also threatening to review capital spending for next year and 2017. “You can call it a crackdown and an effort to correct mistakes of the past,” Jomar Lacson, head of research at Campos Lanuza & Co. in Manila, said in a phone interview.“Blocking incometax recovery may be disruptive to the investment environment, but if it’s unfair to consumers, why keep it?”
‘Avoid chaos’
On April 21 Maynilad, which serves
half of the Philippine capital, criticized MWSS for failing to honor the International Chamber of Commerce’s tax ruling and asked the government to rein in a “runaway regulator.” An appeals panel in December ruled Maynilad isn’t a utility and may charge part of its income tax to clients. A separate panel in April classified Manila Water, a unit of Ayala Corp. that serves the other half of the capital, as a utility that can’t charge the tax. “We want to avoid chaos,” Yu said on the agency’s decision to block both water companies from recovering their tax costs. “You may call us a regulatory office that does not honor the sanctity of contracts, but that kind of view is myopic. We only want to avoid the inconsistent application of regulatory functions.” Bloomberg News
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Philippines and where it is headed contrasted sharply against the dour global outlook where some of the most advanced and wealthy nations expect far less local output they posted prior to the global financial crisis in 2007. Peiris said the Philippines has that potential to grow over the near to medium term without stoking inflationary pressures. At the conclusion of the Article IV consultations last year, the IMF said the country had the potential to expand by 6.25 percent on account of its strong macroeconomic fundamentals and domestic demand drivers. Looking forward to next week as the Article IV consultations for 2015 begins, the IMF will once again put the country’s economic circumstances under See “IMF,” A2
he BusinessMirror, under ALC Group of Companies Founder and Chairman Emeritus Antonio L. Cabangon Chua, congratulates William Matthew Cabangon, who is set to graduate with a degree of Bachelor of Science in Economics, major in Business, and a concentration in Finance and Marketing, cum laude, at the Wharton School, University of Pennsylvania. Graduation ceremonies have been set for May 17, 2015, at 9 o’clock at The Palestra at 235 S. 33rd Street, Philadelphia.
DISASTER-MANAGEMENT FORUM Graeme Newton, head of Deloitte’s Australian Crisis Management and Center of Excellence for Crisis Management in Southeast Asia and former CEO of Queensland Reconstruction Authority, delivers an overview of Australia’s model for rehabilitation and recovery during the Australian Disaster Management Capability forum sponsored by the Australian Embassy and the Philippine Disaster Recovery Foundation at a hotel in Makati City. ROY DOMINGO
ASIA TO LEAD 2015 GROWTH DESPITE CHINA SLOWDOWN
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sian economies will lead world growth in 2015, expanding at a 5.6percent pace that is level with last year, as recoveries in India and Japan help to offset the slowdown in China, the International Monetary Fund (IMF) said in a report on Thursday. IMF economists expressed concern, however, over the potential for weaker growth if policy-makers in the region fail to follow through with needed changes, saying it was a time not for “alarm but it is a time for alert.” The IMF’s regional economic outlook forecasts that growth in the Asia-Pacific area will moderate to 5.5 percent in 2016. Asian growth fell to 5.5 percent in 2014 from 5.9 percent in 2013, and is bound to shift lower as China’s economy, the world’s second largest, settles at a more sustainable level than the torrid double-digit pace of the past decade. China’s report of 7-percent growth in the first quarter of the year was in keeping with that trend. “You cannot expect that a country can keep a 10-percent growth forever,” said Changyong Rhee, director of the IMF’s Asia and Pacific Department. “The current phase of growth is in line with our forecasts, but even if it’s a desirable slowdown it can have a negative impact on other countries.” Rising levels of debt and potential financial-market disruptions are other risks to growth, though moves by Chinese financial regulators to rein in margin trading and umbrella trusts are a positive step, he said in a news conference that was broadcast online.
On a broader scale, the IMF report said its estimates show lower oil prices could help boost global growth by 0.3 percentage points to 0.7 percentage points in 2015. Major producers of oil and other commodities are suffering from lower exports, but for countries such as Japan, China and Thailand, the lower costs are a boon both for businesses and consumers. Growth varies widely across the region, from an 8.3-percent forecast for 2015 in Myanmar, 7.5 percent for India and 6.8 percent for China to 1 percent for Japan. Japan, the world’s No. 3 economy, shows signs of recovering from a recession last year following an increase in the country’s sales tax to 8 percent from 5 percent. The IMF’s report said that Japan’s growth will remain modest but could improve with more aggressive measures to improve productivity through improved labor laws and corporate governance. Despite its slowdown, China remains a main driver of global gross domestic product expansion, accounting for a larger share of world economic growth than the rest of Asia combined, the IMF said. Reforms intended to make the statedominated economy more productive, with stronger domestic consumption and services, and less dependence on trade and investment are crucial for future growth, Rhee said. Full implementation of reforms would boost overall income by 5 percent by 2020 over the economy’s performance without such reforms, he said. AP
Neda Board, ICC OK’d ₧200-B projects in Q1
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he Aquino administration has approved P200.089 billion worth of new projects in the first quarter of 2015, according to documents obtained from the National Economic and Development Authority (Neda). The amount covers three new projects, namely, the P5.087-billion Panguil Bay Bridge Project; the P170.699-billion NorthSouth Railway Project (NSRP)-South Line; and the P24.303-billion expansion of the Tarlac-Pangasinan-La Union Expressway Project (TPLEx). Only one project, the Panguil Bay Bridge, is going to be locally funded or financed through the national budget. The NSRP and TPLEx projects will both be funded through the public-private partnership mode. Neda documents showed that the Panguil Bay Bridge will connect the city of Tagub in Misamis Occidental and the municipality of Tubod in Lanao del Norte. The NSRP South Line, meanwhile, aims to build a commuter railway between Tutuban, Manila and Calamba, Laguna. The railway will also have long-haul operations between Tutuban, Manila and Legaspi City, Albay. The long-haul operations of the NSRP
will now have a branch line to Calamba and Batangas, as well as Legaspi and Matnog, Sorsogon. The expansion of the TPLEx, on the other hand, will add two more lanes to the project and provide a P1.986-billion government subsidy for the project. The additional government subsidy increased the cost from P22.317 billion to around P24 billion. Apart from these, there were projects that were reapproved by the Investment Coordination Committee (ICC) and the Neda Board in the first quarter of 2015. These projects include the P25.556-billion North Luzon Expressway-South Luzon Expressway Connector Road Project. After the reapproval, the project will now be conducted via unsolicited mode and subjected to Swiss Challenge. A Swiss challenge is a process by which other private groups could still come forward to make an offer to match the bid of the proponent. Another project that was reapproved was the P35.426-billion Cavite-Laguna Expressway project. The granting of the reapproval allowed a single-stage qualification and approval of bid parameters for the project. Cai U. Ordinario