BusinessMirror May 22, 2015 by BusinessMirror

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

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A broader look at today’s business TfridayNovember 18, 2014Vol.Vol. 10 No. n Friday, May 22, 2015 10 No. 22540

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P.  |     | 7 DAYS A WEEK

BUSINESS GROUPS SAY COMMUTERS FACE HIGHER TOLL RATES DUE TO HIKED PREMIUMBID REQUIREMENT

‘Govt wins, public loses in Calax rebid’ INSIDE

‘M

ILKING” money from investors by rebidding with high-premium-payment requirement the P55.5-billion contract to develop a toll road that aims to connect the cities of Laguna and Cavite places ordinary commuters at the losing end.

’AMERICAN IDOL’ The good shepherd

NOWING that the image of Jesus as the good shepherd is one of the most lovable scenes. This was also the image used by early Christians to portray Jesus’ love for them. All Jews knew that a good shepherd is one who knows and loves his sheep, guides them to good pastures and fresh waters, and protects them from all dangers. Jesus brought this picture to a heroic degree when He stated that He was the good shepherd who would give His life for His sheep and so He did. Amen! EXPLORING GOD’S WORD, FR. SAL PUTZU, SDB AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

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

GOOD OL’ DAYS The original frontcamera crew of the once-phenomenal American Idol Idol: (clockwise) Simon Cowell, Ryan Seacrest, Randy Jackson and Paula Abdul.

Life

THE HOTNESS THAT IS DANIEL PADILLA »D4

BusinessMirror

Friday, May 22, 2015

HOW ‘AMERICAN IDOL’ LOST ITS WAY

B M W Los Angeles Times

HE symptoms were all there for American Idol—falling ratings, high talent costs, advertiser defections. Few were surprised when Fox executives announced recently that the show’s upcoming 15th season would be its last. What’s perhaps, less obvious is that the one-time ratings juggernaut lost its way several years ago, when it moved away from the pulse of pop in its broadest and most inclusive sense. It became less relevant to the overall musical conversation—a smaller and smaller echo chamber reverberating with outmoded ideas. Or as its detractors put it on Twitter, it became just another forum for WGWG—white guys with guitars. The show was hugely popular in the South, and increasingly seemed to reflect those regional loyalties. In its heyday, Idol served as a latter-day version of 1960s AM radio, with more stylistic and demographic diversity than network music programming typically offered. Everyone in the show’s audience had a rooting interest, and because the show depended on its viewers to steer the competition, it created the impression that, week to week, something pivotal was on the line—and it required your participation. The Season 8 finale would have been a good one to end on. That’s when Adam Lambert, the peacocking glam-rock phenom, was up against Kris Allen, a milquetoast folkie. Picking a side felt important, like a battle in a broader culture war. It reflected something about your identity, or at least about your idea of what you wanted music to represent: adventure versus safety. Innovation versus re-creation. The future versus the status quo.

Popular music had always been a forum for such disagreement, but American Idol turned the conflict into a televised spectator sport. It was the show’s pop sensibility, along with its freshness and originality, that made it a hit from the beginning, way back in 2002. Idol was the No. 1 show on TV for a record eight seasons, with its Tuesday performance episodes averaging more than 31 million viewers in 2006. Along the way, it changed both TV and music. Other networks raced to get competitive reality shows ((Dancing Dancing with the Stars, Rising Star Star)) on the air, and suddenly aspiring performers had a way to find fame and fortune without record companies in those preYouTube dark ages. Most visibly, it made fresh superstars out of Kelly Clarkson, who came in first on Idol’s inaugural edition, and Season 4 champ Carrie Underwood. Today both are still A-list acts, with numerous Grammy Awards, hit singles and platinum albums between them. The show also helped change the way those superstars do business by heavily promoting the sale of digital downloads (specifically through Apple’s iTunes Store) at a moment when illegal piracy was ravaging the record industry’s original profit centers. American Idol affected pop more subtly, too. A contest decided, in part, by viewers, the show encouraged an emotional investment among fans that foreshadowed the rise of social media, where artists are accountable to their followings in ways their predecessors could scarcely have imagined. Singers like Lady Gaga and Katy Perry have capitalized on that sense of ownership to build so-called fandoms of ultradevoted enthusiasts. But following Allen’s pivotal win over Lambert in

LIFE

C  D

WAKUDOKI IN CEBU Motoring BusinessMirror

Henry Ford Awards Best Motoring Section 2007, 2008, 2009, 2010 2011 Hall of Fame

Editor: Tet Andolong

Friday, May 22, 2015 E1

THE postcard view of the cars by the bay is what spectators and racing enthusiasts alike will remember.

S    R R M.   R

HE Queen City of the South was roused by a fun and electrifying vibe as it served as the venue of the action-packed second staging of the Vios Cup Season 2 held at the Toyota SRP Cebu Street Circuit at the South Road Properties in Cebu.

ANDRES CALMA craftily defends his line from Daniel Miranda.

TMP President Michinobu Sugata personally driving in the race.

The historical experience drove Cebuanos into a frenzy as six upcoming Cebuano racers joined a total of 44 drivers in the one-make race event. “The fun never stops and it continues down south here in Cebu,” Toyota Motor Philippines President Michinobu Sugata enthused. “We’re in a different street race course for the very first time outside Luzon.

And we have about more than 4 0 d r ivers. So, e x pec t more thrills,” he added. And turbocharged it was, as the race featured intense racing in two highoctane categories—the promotional and the sporting class. Cebuanos stood their ground and cheered for their local favorites from Team Toyota Cebu: multititled karter Jette Calderon,

Lord Seno, Sean Velasco, Harold Ong and Oscar Suarez. Cebuanos Miranda and Sherwin Hing, meanwhile, competed for another Toyota squad. Race one for the sporting class w itnessed pole-sitter A ndres Calma grab the heat with his classic 14:44.255 finish after 12 laps of blistering action. Coming in 7.921 seconds behind was local talent was the 15-year-old Miranda with 14:52.176. Completing the podium was Bobbie Domingo with 14:59.717. In the promotional class, Paolo Rodriguez snatched first place with a time of 16:14.458, followed by Suarez with 16:40.658, and the 16.38.094 time of Arthur de Jong in third. Heat two still belonged to Andres Calma, who evidently inherited the competitive genes of his father, basketball legend Hector Calma. He topped the sporting class with his impressive 19:24.764 finish, spiced up with the best lap time of 1:12.180. Still eagerly trailing him was Daniel Miranda w ith his 19:28.490, while settling in third place was last year’s title contender Allan Uy with 19:34.748. In the promotional class, Rodriguez used his consistency to take heat two with 15:53.176, while Steve Bicknell (15:53.888), and Ferdinand Dysico (15:55.448) finished second and third, respectively. Aside from this intense spectacle, the Cebuanos and the rest of the crowd got to see what this Waku-Doki craze had to offer. Jaws dropped and shrieks, not just of tires, but of shrill voices that echoed throughout the complex as die-hard fans witnessed their favorite celebrities, such as Derek Ramsey, Jinno Rufino, Fabio Ide, Kylie Padilla and Jasmine CurtisSmith compete against each other. Besting the field of celebrity drivers were DJ-host Sam YG (male division) and lanky beauty Phoemela Baranda (female division). One of the other sidelights of the fun-filled event was the op-

THE 44 racing participants of the Toyota Vios Cup Season 2 Leg 2

MOTORING

THE winners of the Toyota Vios Cup Season 2 Leg 2

portunity to go on a shotgun ride with Drift King Keichi Tsuchiya in the Toyota 86. The daughter of famous action star, Robin Padilla, starlet Kylie Padilla personally experienced the ride with

the legendar y Japanese driver. “It was such an ex hilarating high in the passenger seat. This is such a great experience,” the young actress shared.” The next legs will be held in Luzon, with

the possibility of holding a leg in Subic, Zambales. The race series is supported by Bridgestone and Rotam in association with Motul, TRD, Brembo, Super Shuttle, Roro Denso, AVT and OMP.

B L S. M

This was clear in the statements of officials from business chambers that the BM polled hours after the fresh tender of the Cavite-Laguna Expressway (Calax) deal, which was met by a low turnout of participants. American Chamber of Commerce Senior Advisor John D. Forbes said the unnecessary rebidding created a suction in the government’s thrust to improve the quality of infrastructure in the Philippines.

BusinessMirror

| FRIDAY, MAY 22, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

OFFENSIVE JUGGERNAUT

DEFENSIVE FORCE FLOYD MAYWEATHER JR. watches Atlanta play Cleveland in Game One of the Eastern Conference finals. AP

B J L

Akron Beacon Journal TLANTA—Right about the time Kevin Love ran off the floor holding his shoulder and Kyrie Irving began dragging his foot up and down the court, the Cavaliers evolved from an offensive juggernaut into a defensive force. After a slow start on Wednesday, that defense and JR Smith’s red-hot shooting carried the Cavaliers to a 97-89 victory against the Atlanta Hawks in Game One of the Eastern Conference finals. The Cavs immediately snatched home-court advantage from the Hawks with Game Two set for Friday. Smith set a new postseason careerhigh with 28 points, LeBron James had 31 points, eight rebounds and six assists,

After a slow start on Wednesday, defense and JR Smith’s red-hot shooting carry the Cavaliers to a 97-89 victory against the Atlanta Hawks in Game One of the Eastern Conference finals.

including 14 points in the second quarter, and the Cavs yet again won on a night they received little from Kyrie Irving. Irving scored 10 points, shot four-of-10 and played just three of the game’s final 18 minutes. Just as Matthew Dellavedova replaced Irving’s punch in the closeout game against the Bulls, on Wednesday it was Smith’s turn to do it to the Hawks. He made eight-of-12 three-pointers, helped patch a defense that struggled early and made big shots throughout the second half. But the Cavs had to survive a scoring drought of six-plus minutes near the end of the game. The Cavs opened an 82-67 lead with 10:27 left, their largest of the night at the time, on a step-back three-pointer from Smith followed by a lob from Smith to Tristan Thompson. James’s basket gave the Cavs an 89-74 lead with 7:01 left, but they missed their next eight shots, the offense grinded into an isolation game and they turned the ball over three times to allow the Hawks to climb back in it. James’s dunk down the middle of the Hawks’ defense pushed the lead to 93-87 in the final minute, Thompson grabbed his 10th rebound of the game at the other end and the Cavs made free throws to close out the win. Thompson was a concern for the Hawks entering the series and prominent on their scouting reports. A few Hawks players mentioned prior to the game the importance of keeping Thompson off the glass, which became apparent in the first quarter, when he had three offensive rebounds in the game’s opening minutes. Thompson finished with 14 points and 10 rebounds,

CLEVELAND’S LeBron James tries to get past Atlanta’s Kent Bazemore in a second-half action on Wednesday. AP

AKLAND—Dwight Howard may not be the Houston Rockets’ top chef—that title, of course, goes to James Harden—but he’s about as vital an ingredient as you’ll find on their depleted roster. But the big man who joined Harden in Houston two summers ago with the hopes of playing in games like these left Oracle Arena with the worst kind of taste in his mouth on Tuesday, hobbled by a left-knee bruise that kept him contained through most of the Rockets’ 110-106 loss to the Golden State Warriors in Game One of the Western Conference Finals. Behold your early X-factor in this series: The Rockets aren’t likely beating the Warriors to begin with, but they’re definitely not doing it if Howard isn’t healthy.

Howard finished with just seven points and 13 rebounds in 27 minutes (one minute in the fourth quarter), but more relevant is the part he played during Houston’s second-quarter surge. He was on the floor during the entire 27-6 run that put Houston up 16 points, an early statement if ever there was one that this matchup might not be as one-sided as so many believed. His turnovers were a problem, to be sure—five in all and two coming during the end-of-first-half finish in which the Warriors regained the lead. But still, he controlled the boards and defended like he almost always does, started fast breaks and put the kind of pressure on the Warriors’ big men that is a must if they have a shot at winning this taste test. And now, after a regular season in which Howard

missed two months with right-knee trouble and ached to be healthy again, he finds himself unsure of what his body will be able to give him from here. “Thank God, it was nothing major, but bruises— especially around the knee and all that—it’s very hard to do a lot of the things that I want to do,” Howard said. “It’s very painful. I tried to play it off as much as possible, but I couldn’t give my teammates what I needed to give them. It was disappointing. It was frustrating. But it’s a long series.” The silver lining for Howard here is that it’s not the knee that gave him so much trouble before. He sounded like someone who will likely play in Game Two on Thursday, but the question of how effective he can be will remain. The

Curry fined $5,000 for flopping

SPORTS

STEPHEN CURRY makes a different kind of contribution. AP

VITAL INGREDIENT O

Timofey Mozgov had 10 points and 11 rebounds and the Cavs outrebounded the Hawks, 49-37. “He is one of the best at that in the league,” the Hawks’ Paul Millsap said of Thompson’s rebounding. “If you can get your team extra possessions in the playoffs that’s big.” The Cavs locked in defensively after a sluggish start. The Hawks’ biggest lead was 24-15 late in the first quarter when the Cavs committed six turnovers and Jeff Teague tormented their guards. Teague hurt the Cavs on dribble penetration throughout the first half, cutting through the defense for 17 of the Hawks’ 51 points. But the Cavs fought back to tie the game at the half when James turned aggressive in the second quarter, split Hawks double teams and got into the lane with ease. The defense really sank in during the second half, holding the Hawks to a 24-percent shooting in the third quarter (four-of-17) and forcing five turnovers after they committed just six in the first half. Defense has become a staple of this team since the injuries piled up during the first round. “The pride that our guys are taking in their defensive approach and a lot of times necessity is the mother of invention,” Coach David Blatt said. “We lost a couple of very, very key offensive players, and one of the things that you have to do when you talk about adjustments and adaptation is recognize how do you find ways to win games? And in order to win games, we really, really had to be outstanding on the defensive end and I thought we were and have been during the postseason.” Teague finished with 27 points, Al Horford had 16 points and seven rebounds and Millsap had 13 points and seven rebounds. DeMarre Carroll, the Hawks’ leading scorer throughout these playoffs, was limited to five points on two-of-seven shooting. The Hawks’ best wing defender was then helped off the court late in the fourth quarter with a left-leg injury. Carroll’s loss for an extended period of time would be crippling to the Hawks’ defense, particularly since they’re already down another long wing defender in Thabo Sefolosha, who is out for the season with an ankle injury. The Hawks are in the conference finals for the first time since moving to Atlanta in 1968. A team that typically struggles to fill even half the seats in Philips Arena for most home games has come alive in the postseason with loud, capacity crowds every night. “The buzz around here is great, the vibe is great,” Millsap said. “To do this and know where Atlanta at been in the past, to be at this stage and this point right now, it is great for us, this community and these fans.” That buzz wore off in the fourth quarter, however, when the Cavs stretched the lead to 18 and took early command of this series after dropping three out of four to the Hawks during the regular season.

Rockets are already expected to be without starters Patrick Beverley (point guard, wrist injury) and forward Donatas Motiejunas (back) for the season and can ill afford to take another hit on the health front like this. “I don’t think that it’s going to be something that is going to restrict me from playing for the rest of the series,” Howard said. “I’m just going to stay positive, stay focused, and the doctors are going to do their job to make sure that I get out on the floor.”” USA Today

TEPHEN CURRY has been fined $5,000 for violating the National Basketball Association’s (NBA) antiflopping rules, the league announced on Wednesday. Curry fell to the floor after a making a threepointer in the fourth quarter of Golden State’s 110-106 win over Houston on Tuesday night. The Rockets’s Terrence Jones ran the length of the floor to defend the shot and appeared to make slight contact with Curry after the ball was released, but no foul was called. The play took place with 3:07 remaining in Game One of the Western Conference finals, and Curry’s shot gave the Warriors a nine-point lead. During the regular season, Curry was also assessed a pair of $2,000 fines for technical fouls he picked up on January 21 and February 20. According to Spotrac.com, Curry’s base salary for the 20142015 season is $10.629 million. AP

C  A

PPP to help govt meet infra-spending target B C U. O

DEFENSIVE FORCE Sports

Forbes said the controversial Calax rebidding, launched by President Aquino himself, also reflects the long-standing problem of poor planning. “Calax was needed yesterday to reduce congestion and is being delayed to get more money from bidders who could recover it with higher tolls,” he said. Indeed, to recover from over P55 billion in investment at the very

HE national government is keen on pursuing more public-private partnership (PPP) projects to meet its goal of increasing infrastructure spending to 5 percent of local output, or the gross domestic product (GDP). National Economic and Development Authority (Neda) Director General and Economic Planning Secretary Arsenio M. Balisacan said the government will continue to seek out partnerships with the private sector on infrastructure development. “As we ramp up our public infrastructure-spending target to at least 5 percent of the GDP by 2016, the government, through

PESO EXCHANGE RATES n US 44.6110

its PPP Program, will continue to tap the private sector as partners in development to help overcome our resource constraints, deliver much-needed social services and public infrastructure facilities and, importantly, to help sustain the robust economic growth that we have been enjoying in recent times,” Balisacan said in a statement. Balisacan said that, to date, the Philippines’s PPP Program has a pipeline of about 50 PPP projects worth over $23 billion. Around nine PPP contracts have also been successfully awarded to the private sector since 2011, totaling to around $3 billion, or P136.36 billion.

A POND is dried up due to an El Niño-induced drought in Jones, Isabela province, in this February 25, 2010, file photo. A drought in the Philippines is destroying crops and reducing the country’s water supply. BLOOMBERG/NANA BUXANI

EL NIÑO PUTS INFLATION RISK BACK ON INVESTORS’ RADARS

HE specter of an El Niño weather pattern, causing drought and spurring inflation, is moving onto investors’ radars in the Philippines, though relatively low oil prices and Thailand’s rice glut will soften the blow. Australia joined the United States and Japan last week in declaring the onset of an El Nino, which leads to lower-than-average rainfall in Asia. The Philippines is “especially vulnerable” due to its dependence on food imports, according to Barclays Plc. Even a mild rice shortage may push inflation closer to the top end of the central bank’s 2-percent to 4-percent target band, and there’s no room for

monetary easing this year, Bank of America Merrill Lynch says. During the last El Niño in 2009, Philippine inflation accelerated from 1.7 percent in August to 4.4 percent by December, and the 10-year sovereign bond yield rose 76 basis points to 7.88 percent over the year. A similar jump in inflation this time would reduce the allure of the nation’s debt, as the US moves toward raising borrowing costs. Consumer prices rose 2.2 percent in April from a year earlier, while Brent crude has averaged 8 percent less in 2015 than in 2009. “Even if it adversely impacts May, June, July production, I don’t think it will push inflation up toward 6 per-

cent to 6.5 percent,” said Patrick Ella, an economist at Security Bank Corp. in Manila.“It’s definitely offset by weak energy prices but not completely,” since food makes up a large part of the consumer-price basket, he said.

CPI basket

FOOD accounts for 47 percent of the Philippines’s consumer-price index (CPI), with rice alone making up 9 percent, according to a May 18 research note by Barclays’s economists, including Wai Ho Leong in Singapore. Thai stockpiles stemming from a government subsidy program are equivalent to about 40 percent C  A

S “PPP,” A

n JAPAN 0.3678 n UK 69.3210 n HK 5.7551 n CHINA 7.1909 n SINGAPORE 33.3790 n AUSTRALIA 35.1544 n EU 49.5137 n SAUDI ARABIA 11.8960 Source: BSP (21 May 2015)

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BusinessMirror

Friday, May 22, 2015

PPP. . .

Continued from A1

To support the PPP Program in the coming years, Balisacan said the government is pushing for the enactment of the PPP Act, or Amendments to the Revised Build-Operate-and-Transfer Law. Balisacan said the government is also seeking to amend the law on Right of Way Acquisition that would address bottlenecks in infrastructure provision, including implementation delays in our PPP projects. “We are continuously working to streamline processes and institutionalize reforms and best practices. In particular, we have advocated measures to further enhance the legal and policy environment for private-sector participation,” Balisacan said. The Philippine government is currently conducting a PPP Policy Dialogue with the Australian government in Melbourne, Australia. The dialogue should help unluck useful insights on how other jurisdictions sustained their PPP Program over the years, including an understanding of their PPP legal and institutional frameworks, appraisal methodologies, procurement policies, and implementation and monitoring of projects. Representatives from the Philippine government included Public Works Secretary Rogelio L. Singson and PPP Center Executive Director Cosette V. Canilao, as well as partners from the Australian government, such as the Minister for Small Business, Innovation and Trade of the State Government of Victoria Adem Somyurek.

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‘Govt wins, public loses in Calax rebid’ Continued from A1

least, the winning bidder will have to increase toll rates every now and then, thereby passing the brunt to the consumers, experts observed. The road network will connect the cities of Laguna and Cavite— two of Southern Tagalog’s agricultural and industrial gems—to spur economic growth through trade and tourism. But with the possibility of ridiculously high toll rates, prices of basic goods like food that will be transported through Calax will have to be adjusted for businesses to make money. The thoroughfare aims to decongest road traffic in the fast-growing economic hubs for efficiency and comfort. But this will have to be paid at a higher price. The government moved to place the deal under a rebidding to increase its supposed revenues from the premium offer of bidders. It placed a P20.1-billion floor price for the auction, reflective of disqualified bidder San Miguel Corp.’s alleged proposal. San Miguel unit Optimal Infrastructure Development Inc. earlier sought President Aquino’s intervention after the Department of Public Works and Highways (DPWH) decided to disqualify the firm from the auction due to a technicality. The “minor” technicality in-

volved a defective bid security on the part of Optimal. It was asserted that the bid was four days short of the required cover period that could result in a few millions of pesos in losses should the concessionaire fail to deliver the infrastructure above board. Team Orion of Ayala Corp. and Aboitiz Equity Ventures Inc. topped the original auction with a P11.33billion premium offer on top of the project cost. Metro Pacific Investments Corp. trailed behind by a hairline difference. This result outraged disqualified bidder Optimal, whose chairman is the uncle of President Aquino. It sought to overturn the results of the auction—to which it claims to have topped with a P20.1-billion premium offer—by taking its battle to Malacañang. It took the government quite sometime before it finally decided on the matter. Several petitions from Team Orion and Optimal reached the Public-Private Partnership (PPP) Center, the Palace, and the DPWH, with the two firms seeking to contradict each other’s position. The two parties, however, came to a consensus that the road network is a pressing necessity, hence, Mr. Aquino should come to a conclusion. He did. The Chief Executive called for the rebidding, voiding the clean and transparent tender that

was launched in 2013. This move received both the cheers and jeers of investors. Makati Business Club Executive Director Peter Angelo B. Perfecto said the rebid of the project when the process was already concluded was an inopportune and ill-advised decision. “The effect is now manifested by the decrease in the number of Calax bidders from four to two,” he said. Perfecto was referring to the low turnout of bidders for the project, which only saw Optimal and MPCALA Holdings Inc. of Metro Pacific submitting their proposals. Two other parties, represented by two different law firms, decided against the auction. Metro Pacific and San Miguel are separately eyeing the expressway-development deal, as this would further enhance their toll-road businesses. The flagship of Hong Kong-listed First Pacific Co. Ltd. currently holds the concession for the North Luzon, the Subic-Clark-Tarlac, and the Manila-Cavite Toll expressways. San Miguel, on the other hand, controls the Skyway System, the South Luzon Expressway, the Southern Tagalog Arterial Road and the Ninoy Aquino International Airport Expressway Phase 2. The low turnout, however, already made government officials

cheerful. Public Works Secretary Rogelio L. Singson said his office is contented with the two bidders. “I thought it will only be San Miguel,” he said, seemingly thanking the heavens for the participation of businessman Manuel V. Pangilinan’s firm in the auction. Although this move has sent negative signals to the business community here and aboard, Perfecto believes investor support for the PPP Program will remain high. “To say that the entirety of the government’s infra program is already tarnished is too extreme a conclusion, though. Investor interest remains robust but, perhaps, cautious due to possible uncertainty in contract awarding and other issues,” Perfecto said. He noted that the state should ensure the sanctity of the bidding process for key infrastructure projects, while eliminating small roadblocks when possible. “Moving forward, the government should guarantee the implementation of a project from bidding to its accomplishment with as little blockages and uncertainty as possible,” Perfecto said. On the other hand, Philippine Chamber of Commerce and Industry President Alfredo M. Yao believes that the rebidding of Calax was the right decision, as this would allow the government to receive more

gains to be used for social infrastructure. “They should just maximize whatever will go to the government,” he said. For his part, European Chamber of Commerce of the Philippines External Vice President Henry J. Schumacher wished the government would review its business strategy as a whole. “We are looking forward to the implementation of a new government strategy to allow foreignowned construction companies to operate fully foreign-owned in this country. That will be good for competition, and will hopefully have more than two companies bidding for projects,” he said. Calax is envisioned as a 47-kilometer thoroughfare. The private partner will take on the financing, design, construction and operation and maintenance of the entire fourlane toll road. The project will also include the construction of centralized toll plazas, a toll collection system, viaducts and bridges. The road should be operational by 2019, based on an indicative timeline. The government has awarded nine contracts since the infrastructure program’s inception in 2010. It aims to sign at least 15 contracts by the time President Aquino steps down from office in 2016.

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The Nation BusinessMirror

Editor: Dionisio L. Pelayo • Friday, May 22, 2015 A3

Palace rejects fresh Cha-cha bids by Senate, House leaders QC judge’s ouster in HCPTI case sought by Romero’s son

HE camp of businessman Michael Romero has sought the ouster of a Quezon City judge from handling the ownership dispute case filed by his father, Reghis Romero II, covering the Harbour Center Port Terminal Inc. (HCPTI). In an eight-page supplemental motion filed before the Regional Trial Court in Quezon City, Romero, through his lawyer E. Hans Santos, sought the inhibitionn of Judge Bernelito Fernandez, presiding judge of Branch 79, for his alleged biased judgment. Romero specifically cited the April 29, 2015, and May 19, 2015, hearings conducted by Fernandez on the injunction petition filed by his father. The younger Romero noted that although the hearing on April 29 was scheduled for the plaintiffs’ temporary restraining order (TRO) application, the oral argument that transpired dealt with his motion to dismiss, in particular their position that jurisdiction over the person of the defendants had not been acquired. The motion to dismiss on jurisdictional grounds, he stressed, necessarily had to be resolved first, given that there would have been no legal basis to proceed absent the acquisition of jurisdiction by the trial court Recognizing this, Romero claimed that Fernandez specifically stated that he would resolve the motion to dismiss first. “Since the application for a TRO had not yet been heard, the logical assumption was that there would be an order granting or denying the motion to dismiss, and if denied, the TRO application would proceed,” Romero noted. “This did not happen. Instead, Judge Fernandez ruled on the motion to dismiss not ‘first’, but simultaneously with the grant of the TRO in the same May 5, 2015, order,” it added. He added that a TRO was granted despite the fact that the court’s own records— notably the Officer’s Return and Amended Officer’s Return both dated April 28— unequivocally confirmed that summons was never served on defendant Harbour Centre Port Holdings Inc. (HCPHI). It can be recalled that in an order issued on May 5, Fernandez enjoined HCPHI, headed by the younger Romero, from exercising ownership or rights, directly or indirectly, over the port-terminal facility in Manila.

Fernandez granted the petition filed by Reghis seeking the issuance of a TRO barring Michael from taking control of the facility. The elder Romero has been insisting that his two companies, R-II Builders Inc. and R-II Holdings Inc., remain the majority stockholders of Harbour Centre, contrary to his son’s claim. “Indeed, from the judge’s demeanor and actions, defendant is absolutely convinced that the injunction proceedings shall simply be an exercise preparatory to appeal; Judge Fernandez’s ruling granting the injunction is a foregone conclusion,” the younger Romero stressed. Meanwhile, Romero said Fernandez also showed bias and partiality in favor of his father during the hearing on May 19, which would warrant his inhibition. He noted that during the hearing, Judge Fernandez motu propio and without any motion for either of the parties, proposed that, given the pendency of several incidents including his motion for inhibition, the parties should just submit simultaneous memoranda, arguing their respective positions on the application for preliminary injunction. He added that when his lawyer insisted that she be allowed to cross-examine the witnesses, Fernandez initially suggested that the defendants just attach their own sworn affidavits and evidence to their memorandum. “Either this was a mere lapse on Judge Fernandez’s part, which then raises the issue of judicial competence in the conduct of trial, or it reveals an overzealous desire to rush the matter of injunction, which raises an entirely different set of worrying concerns,” Romero said. The younger Romero pointed out that the TRO was dated May 5, but Fernandez scheduled the injunction hearing 14 days after the issuance of the TRO, leaving defendant with practically no time to cross-examine witnesses with voluminous judicial affidavits, much less a fair period within which to present his own witnesses. “Each of the above events singly would have been sufficient to raise the suspicion of bias; collectively, they define a pattern of partiality that solidifies defendant’s belief that the chance of obtaining a fair trial with Judge Fernandez presiding is a pipe dream,” Romero said. Joel R. San Juan

Sen. Santiago says semantics only one of BBL’s problems

EN. Miriam Defensor Santiago said changing the name of the proposed Bangsamoro basic law (BBL) will not make it any less objectionable unless Congress also revamps the bill to address numerous “constitutional infirmities.” Santiago, chairman of the Senate Committee on Constitutional Amendments and Revision of Codes, was commenting on the Lower House’s approval of an amended version of the bill now called draft “Basic Law of the Bangsamoro Autonomous Region.” “The words ‘basic law’ are attached to the name. ‘Basic law,’ in legal construction, is a synonym for ‘constitutional law’ and ‘organic law,’” the senator said, citing her committee report on the BBL draft, pending as Senate Bill 2408. She added that the name itself showed that the BBL is intended to have the same effect as the “constitution” or “constitutional law” of the Bangsamoro territory, in the same manner that the 1987 Constitution is supreme in the territory of the Republic of the Philippines. “It goes without saying that two different constitutional instruments cannot have legal effect at the same time and in the same territory. The proposed BBL must be consistent with the provisions of the Constitution of the Philippines,” she said. The Santiago report is based on two public hearings on the draft BBL, where resource persons included former Chief Justice Artemio V. Panganiban; Associate Justices Florentino Feliciano and Vicente Mendoza; and former UP Law Dean Merlin Magallona. Aside from Santiago, other senators who signed the report include Committee Vice Chairman Juan Edgardo M. Angara and members Jinggoy Estrada, Ferdinand Marcos Jr., Aquilino Pimentel III, Vicente Sotto

III and Cynthia Villar. Senators Lito Lapid and Ralph Recto said they will sign the report on Monday. The 27-page document is one of three committee reports that will form the Senate’s position on the BBL effort. The two others will come from the Committee on Local Government, the primary committee, and the Committee on Peace, Unification and Reconciliation. Copies of Santiago’s committee report on the draft BBL were released to the media as the ad hoc committee of the House of Representatives approved its version of the bill. Malacañang hopes to pass the proposed BBL before Congress adjourns sine die on June 10. “The Committee on Constitutional Amendments appreciates the brilliant efforts of the hardworking men and women who put the BBL together. However, in its present state, the BBL raises many insidious doubts on constitutionality,” Santiago said. She urged her colleagues not to approve the BBL with haste, stressing that the Senate and the House acting only by themselves cannot approve the proposed BBL in its present form. “It has to be promulgated by nothing less than an amendment to the Constitution,” she added. Santiago also said a constitutional amendment should apply the method prescribed by the Constitution itself—constitutional convention, constituent assembly, or people’s initiative—with revisions subject to ratification by the national electorate in a plebiscite. “The people made the Constitution and the people can unmake it. But the supreme and irresistible power to make or unmake resides only in the whole body of the people, not any subdivision of them,” she said, quoting US Chief Justice John Marshall. Recto Mercene

By Butch Fernandez

ALACAÑANG on Tuesday curtly rejected separate bids by Senate and House leaders to fast-track proposals to tinker with the 1987 Constitution in order to relax restrictions on entry of foreign investors and legitimize controversial provisions of the Bangsamoro basic law (BBL) granting greater autonomy to Muslims in Mindanao.

“There is no change in our position,” Communications Secretary Herminio B. Coloma Jr. told the BusinessMirror when asked if President Aquino would now reconsider his position against economic Charter change (Cha-cha) given the determination of House lawmakers to pursue it. The Aquino administration asserts that investments are coming in despite existing restrictions limiting ownership by foreign investors in certain sectors. Coloma said the same applies to a recent Senate proposal made by Sen. Miriam Santiago to amend the 1987 Charter, also called the “Cory Constitution” having been ratified during the term of Mr. Aquino’s late

mother, former President Corazon Aquino. Santiago suggested that the Constitution could be amended in order to preclude anticipated legal challenges questioning the constitutionality of the proposed BBL that Mr. Aquino’s negotiators committed in a recent peace pact with the Moro Islamic Liberation Front. Earlier, Coloma calmed concerns the Palace may need to give BBL an extra push amid signals lawmakers may not meet their agreed June 11 deadline to pass the bill. The secretary indicated that Malacañang remains confident that lawmakers, in crafting the final BBL version that is expected to be submitted to Mr. Aquino in

June for signing into law, “are cognizant of the significance of the timely enactment of the BBL.” At the same time, Coloma acknowledged concerns over the BBL’s so-called opt-in provision that would allow 10 percent of barangay residents in contigous areas to join the new entity that would replace the soon to be abolished Autonomous Region in Muslim Mindanao. He pointed out that this opt-in provision is not immediately executory and will only happen five to 10 years down the road. The Palace official added the controversial provision adopted by the House ad hoc committee that crafted the new BBL version can still be tackled in the House plenary deliberations on the bill. Further deliberations in the Senate may also be another venue to raise the opt-in issue, he said, noting that the bottom line for the administration is whether the final BBL version the two chambers of Congress would pass will provide the key for social justice and development in Mindanao. “That is our aim,” Coloma told Palace reporters at a briefing on Thursday, admitting that while Malacañang is anticipating legal challenges against the BBL, the final verdict would come from the people on the issue whether BBL would be “a keystone in building a strong foundation for long-term peace, progress and stability in Mindanao.”

Economy

A4 Friday, May 22, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

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House panel OKs P29-B fund for K to 12 Program

By Jovee Marie N. dela Cruz

he House Committee on Higher and Technical Education (CHTE) has recently approved the measure calling for the creation of a transition fund in order to minimize the impact of the implementation of the K to 12 Program on all higher education institutions (HEIs). House Bill 5493, authored by CHTE Chairman and Liberal Party Rep. Roman T. Romulo of Pasig City, seeks to provide financial assistance to academic, academic support and nonacademic personnel, as well as HEIs adversely affected by the K to 12 Program. “As early as 2014, we have been convening the committee, together with the representatives of the Commission on Higher Education [CHED], the Department of Education, Technical Education and Skills Development Authority [Tesda], the Department of Labor and Employment, the Department of Budget and Management [DBM] and other sectors directly affected in order to discuss and come up with proposals on how to address the possible effects of the K to 12 implementation,” Romulo said. “We knew we had to expedite action, especially when reports came in that several HEIs were already laying off faculty members in anticipation of the zero enrollment of first-year students in 2016 and 2017,” he added. The lawmaker, citing r eports, said that upon the effectivity of the Senior High School program in 2016, the lack of freshmen enrollees would mean loss of income for Philippine HEIs, which would affect around 25,000 faculty and nonteaching staff. Under the measure, a Tertiary Education Transition Fund amounting to P29 billion will be appropriated to provide financial assistance to school personnel affected by the K to 12 Program. Romulo said both the CHED and the DBM guaranteed that the amount would be earmarked and made readily available once implementation of K to 12 is in full swing in 2016. The bill said that an initial amount of P12 billion will be

ROMULO

appropriated by Congress in 2016, while the remaining P17 billion will be funded through the General Appropriations Act for the succeeding four years. It added that the proposed fund would be used to provide grants and scholarships to faculty members without teaching load in 2016 and 2017 in order for HEIs to upgrade their faculty profile. Meanwhile, the K to 12 Plus Program of the national government has been perceived to boost productivity as the country has been embracing the 12-year basic curriculum. Tesda SecretaryGeneral Joel Villanueva, issued this statement in news conference at a hotel in Santiago City, Isabela on Wednesday. “The people has embraced the program positively and they have been enrolling our technical-vocational programs,” Villanueva said. He added that the specialization of students would be improved at the seventh and eighth grades with at least 23 courses being implemented this year. ”By 2018 the assessment and certification will remain with the Tesda. While the Professional Regulation Commission would authorize or certify professionals, the Tesda would be accrediting and certifying skilled workers,” he stressed. With a report from PNA

CIRCUS ACT A delivery man carries a cart filled with goods and two of his coworkers who seem to be performing a circus act. MAU VICTA

S. Cotabato nets P3.17-M mining taxes PHL eyes P7-B

ENERAL SANTOS CITY— The provincial government of South Cotabato has collected a total of P3.17 million in mining and quarry taxes during the first quarter of the year, surpassing its target for the period. Siegfred Flaviano, South Cotabato Provincial Environment Management Office chief, said on Thursday such figure is around P170,000 higher than their collection target of P3 million for the first three months of the year. He said they were to reach their goal after a significant surge in their collection in March that reached a total of P1.45 million. The local government only collected around P1.72 million in January and February, or an average of P860,000. “We’re currently working on some strategies to further improve our collection performance and

eventually exceed our overall target of P12 million for the entire year,” Flaviano said. The official said the province’s share in the mining and quarry tax collection amounted to P1.306 million, while the rest was divided among the city and municipal governments. The provincial imposition under mining and quarry covers sand and gravel tax; mining tax, mining permit fee, ore transport fee, occupational mining tax, verification fee, filing fee, permit fee, projection fee, processing fee, fines/penalties/ surcharges, and, miscellaneous (delivery receipts). Flaviano attributed their improved collection performance to their intensified monitoring and enforcement activities against illegal quarry and mining operations in the province. He said they have been regularly checking the operations

various quarry and small-scale mining ventures to ensure that they are compliant with the local government’s regulations. Flaviano said they are currently pushing for vital amendments to the province’s existing quarry and mining regulations to update the present tax rates. He specifically cited the provisions of Provincial Ordinances 7 and 8 that were enacted by the Sangguniang Panlalawigan in 2002. The Provincial Mining and Regulatory Board endorsed the revision of the two ordinances, which carries local regulations on small-scale mining. “We’re mainly pushing for the revision of their outdated provisions, particularly on the imposition of taxes, fees, surcharges, fines or penalties to small-scale mining operators, processors and miners,” he said. PNA

Zamboanga City power cooperatives need to act with urgency on brownouts

AMBOANGA CITY—First District Rep. Celso Lobregat has urged the Zamboanga City Electric Cooperative (Zamcelco) to “act with urgency” in solving this city’s pestering long hours of daily rotational brownout. Lobregat made the call on Thursday during a power forum held at a local hotel spearheaded by Energy Secretary Carlos Jericho L. Petilla and attended by Zamcelco officials and other local stakeholders. Lobregat’s call came as Petilla presented ways on how to eliminate, if not reduce, the number of long hours of brownout daily. This city is experiencing five- to six-hour daily rotational brownout due to power-supply deficit brought about by decline of water level that powers the hydroelectric plants, which supply the Mindanao grid.

Peti l la sa id Zamcelco can eliminate, if not reduce, the number of hours of brownout by sourcing out power from other Independent Power Producers (IPPs) and not to rely much on hydro power. Petilla cited the case of the South Cotabato II Electric Cooperative (Socoteco II) of General Santos City, wherein Socoteco II decided to purchase more power from IPPs than relying much on hydro power after they experienced the worst brownout in 2013. However, he said Zamcelco has to pay the cost, since the IPPs sell their excess power at higher price. “Solution comes with a price, it doesn’t come free,” he said during the forum. At present, Zamcelco has a power deficit of more than 20 megawatts (MW), which translates to five- to

six-hour daily rotational brownout. Zamcelco is being supplied power by the Power Sector Assets and Liabilities Management (PSALM) Corp. and two IPPs— Therma Marine, Inc. and Mapalad Power Corp. Lobregat told the Zamcelco officials during the forum to act immediately in solving the problem on brownout. “It is a decision that has to be made right away,” Lobregat said, explaining on what he means that Zamcelco should “act with urgency.” The holding of the forum on Thursday was initiated by Lobregat when he met Petilla last week in Manila, together with Zamcelco officials. Also present during the forum here were representatives of PSALM, IPPs, business sector, and other stakeholders. PNA

revenue from luxury tourists

he country’s largest travel agencies belonging to S8 Exhibition Inc. are targeting P7 billion in revenues from luxury tourists by 2018, as they position the Philippines as a luxury destination. S8 Exhibition Inc. said it is launching the first Asia Premium Travel Mart (APTM), a high-end business-to-business networking event which focuses on the Asia-Pacific luxury travel market, this month. Some 50 exhibitors offering premium destinations, products, services and properties in the country are expected to participate in the event. Edward Villanueva, director of S8 Exhibition Inc., said travel agencies expect luxury travellers—those who earn twice as much as the average earnings of the population in their country—to bring in P1.6 billion in revenues next year. By 2018 S8 Exhibition Inc. said it expects as much as 60,000 luxury tourists to spend P7 billion in the Philippines. Specifically, the group said it is eyeing to corner the “very high upper middle income class,” who can spend as much as P 100,000 to P 120,000 for three to five days excluding meals. S8 Exhibition Inc. said it expects these big spenders to come from the usual high-income economies, such as the Gulf countries, who are increasingly looking at the Asia-Pacific region as the new luxury destination. Villanueva said with the launch of the APTM, the Philippines hopes to join other Asia-Pacific countries that increasingly turning to luxury tourism, such as India, Australia, China, Maldives, Sri Lanka, Thailand, Bhutan, Singapore, and Bali, Indonesia. S8 Exhibition Inc. expects the APTM to draw as much as 300 luxury buyers from Europe, Brazil, Russia, India, and China, Middle East, Australia, and Latin America. S8 Exhibition Inc. consists of top officials of Arfel Travel & Tours , Corporate International Travel & Tours Inc., DCTC R. Developers Corp., Let’s Celebrate Life Travel & Leisure, Light Miles Travel Inc., and Luxus Pacific Travel Inc. The APTM will run from May 26 to 28 at the SMX Convention Center in Pasay City. Catherine N. Pillas

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Friday, May 22, 2015 A5

SC: DOH has no legal authority to regulate tobacco promotions

By Joel R. San Juan

HE Supreme Court (SC) has ruled that the Department of Health (DOH) has no authority to regulate the promotion schemes of tobacco firms.

In an 11-page decision penned by Associate Justice Estela PerlasBernabe, the SC’s First Division affirmed the decision of the Court of Appeals (CA) in 2011, which granted the petition filed by two giant tobacco companies—Philip Morris Philippines Manufacturing Inc. (PMPMI) and intervenor Fortune Tobacco Corp.—seeking to nullify the resolution issued by the DOH prohibiting the tobacco industry from conducting promotional activities in accordance with Republic Act (RA) 9211, or the Tobacco Regulation Act of 2003. The SC said it agrees with the appellate court that it is the Inter-Agency Committee (IAC)-Tobacco that has exclusive power and function to administer and implement provisions of RA 9211 and not the DOH. It did not give weight to the claim of the DOH that its authority to rule

upon applications for sales-promotion permits emanates from Article 116 in relation to Article 109 of RA 7394, or the Consumer Act of the Philippines. The said provisions states: “No person shall conduct any sales campaigns, including beauty contest, national in character, sponsored and promoted by manufacturing enterprises without first securing a permit from the concerned department at least 30 calendar days prior to the commencement thereof....” But the High Tribunal noted that the same provision has been repealed by RA 9211, which created the IAC-Tobacco. Under the same provision, IAC-Tobacco will have exclusive power and function to administer and implement the provisions of RA 9211, including promotion regulation. “After a meticulous examination

New York-based Monster widens reach of talent hunters in Asia Pacific

ew York Stock Exchange-listed Monster has announced the region-wide launch of TalentBin by Monster, which provides recruiters access to previously “unfindable” candidate profiles through aggregated social sources across the Web. The company said through this platform, Monster aims to use a storehouse of actionable information and Web-based recruiting tools to help locate hardto-find talent. In a tight labor market, a company’s ability to find, attract and access the right skilled professionals is critical to success, the company said. TalentBin by Monster not only automates and streamlines the talent-discovery process via site monitoring, interpretation and matching, but also simplifies the hiring process to allow recruiters to do more in less time. “Skilled technology talent is hard to find and we have found that many potential candidates are not active job seekers and are less likely to have, and regularly update, a résumé or a professional online profile. However, the talent recruiters are trying to find are online in many ways, leaving bits of information demonstrating the professional skills that make them desirable candidates. This prompts for a need for a disruptive technology to find this talent,” said Sanjay Modi, managing director, Monster (India, Middle East, Southeast Asia and Hong Kong). TalentBin by Monster scans relevant sites such as GitHub, Twitter, StackOverflow, Meetup, Google+ and other forums where candidates are active online. “TalentBin by Monster is a solution to the evolution of online and social recruitment. It has an intuitive and specialized communication template that can assemble candidate profiles from

publicly available sources, limited to professionally relevant information. This will ensure the ‘unfindable’ can be found,” Sanjay added. By harnessing the vast amount of professionally relevant information people share across social platforms, TalentBin by Monster brings potential job candidates to the surface. Already launched and implemented in the US and the UK, TalentBin by Monster is now also available in Singapore, Malaysia, Hong Kong, the Philippines and the Gulf region. “Technical talents are rarely active seekers, with profiles that are nonexistent or seldom updated. TalentBin by Monster helps you find talent where they already live online—not where you wish they would be,” Monster said. TalentBin by Monster provides direct access to e-mail addresses, so employers can reach professionals on the platforms where they are already active. It also allows recruiters to prioritize their time on professionals who are engaged so they can reduce their time-to-hire. Monster Worldwide Inc. is a global leader in connecting people to jobs, wherever they are. For more than 20 years, Monster has helped people improve their lives with better jobs, and employers find the best talent. Today, the company offers services in more than 40 countries, providing some of the broadest, most sophisticated job seeking, career management, recruitment and talent-management capabilities. Monster continues its pioneering work of transforming the recruiting industry with advanced technology using intelligent digital, social and mobile solutions, including its flagship web site monster.com and a vast array of products and services.

of the...pertinent provisions of RA 7394 and RA 9211, the Court finds that the latter law impliedly repealed the relevant provisions of the former with respect to the authority of the DOH to regulate tobacco sales promotions,” the SC said in denying the DOH’s petition seeking the reversal of the CA ruling. “In fine, the Court agrees with the CA that it is the IAC-Tobacco, and not the DOH, which has the primary jurisdiction to regulate sales promotion activities...,” it added. Thus, the Court ordered the remand of the permit applications filed by PMPMI for its tobacco sales promotions to the IAC-Tobacco for appropriate action. Concurring with the ruling were Associate Justices Teresita Leonardo-Castro, Lucas Bersamin and Jose Portugal Perez. Prior to the controversy, PMPMI, through the advertising agency the PCN Promopro, and invoking the provisions of the Consumer Act of the Philippines, applied for a sales-promotion permit before the Food and Drug Administration (FAD) for the tobacco company’s “Gear Up Promotional Activity” in November 2008. PMPMI was later verbally informed by the FAD that there is a DOH memorandum supposedly prohibiting tobacco companies from

holding any form of tobacco promotion in the country. Meanwhile, on November 28, 2008, PMPMI, through another advertising agency, the Arc Worldwide Philippines Co., also applied for a promotional permit for its “Golden Stick Promotional Activity.” The FAD again denied PMPMI’s permit application for promotional activities, citing an instruction from the DOH that since July 1, 2008, all promotions, advertisements and sponsorships of tobacco products are already prohibited. The PMPI appealed the FAD’s denial of its permit application for promotional activities with the DOH. In a decision dated April 30, 2009, the DOH denied PMPMI’s appeal along with all similar actions filed by other tobacco companies. This prompted PMPMI to immediately elevate the case before the CA, considering that the issue involved a legal question. Meanwhile, Fortune Tobacco moved to intervene in the case on the ground that it has a direct and immediate legal interest in the outcome of the petition, being engaged in a business similar to PMPMI. In ruling in favor of the tobacco industry, the CA held that the DOH and FAD committed grave abuse of discretion in declaring that all promotions, advertisements and

IC issues new circular on insurers’ bond investments By David Cagahastian

sponsorships of tobacco products are already prohibited starting he Insurance Commission July 1, 2008, as mandated under (IC) has clarified that all inRA 9211. vestments in foreign currenThe appellate court noted that cy-denominated bonds to be made Section 22 of RA 9211 (Ban on Adby insurance companies after the efvertisements) prohibits all forms of fectivity of the amended Insurance tobacco advertisements in mass meCode in 2013 should have prior apdia, “except tobacco advertisements proval from the IC. placed inside the premises of point Insurance Commissioner Emof-sale establishments.” manuel F. Dooc issued Circular LetOn the other hand, Section 23 ter 2015-25, which clarified that of RA 9211 allows tobacco promounder the amended Insurance Code, tions, with some restrictions, such all investments in foreign currencyas it should be directed to persons denominated bonds should comply at least 18 years old; all stalls, booths with certain requirements for them and other display concerning tobacto be considered as assets of the inco promotions must be limited to surance company. point-of-sale of adult-only facilities; Such requirements include a credtelephone communications concernit rating from Standard & Poor’s of ing promotional offers, programs “BBB” for the foreign currency-deor events must include a recorded nominated government bond, which health warning message; and sevis a notch higher than the minimum eral others. investment-grade rating, and prior Furthermore, the CA declared approval by the commission. that the DOH has no authority to “For investments in foreign curenforce the provisions of RA 9211. rency-denominated bonds made It noted that Section 29 of the after the effectivity of the amended Tobacco Regulation Act states that Insurance Code, compliance with IAC-Tobacco shall have the excluthe credit ratings and requirements, sive power and function to adminand prior approval of the Insurance ister and implement the provisions Commission must be complied with, of the said law. otherwise, the investment made will The IAC-Tobacco is chaired by be deemed a non-admitted investthe secretary of the Department of ment,” the new circular said Trade and Industry, with the DOH Being deemed a non-admitted insecretary as vice chairman. vestment, the said foreign currencydenominated bonds shall not be included in the computation of assets for the purpose of determining an insurance company’s liquidity and financial viability. The circular clarified that only those foreign currency-denominated bonds that were acquired before the effectivity of the amended Insurance Code are exempted from the requirement of prior approval from the commission. But even such bonds should still comply with the minimum creditrating requirement of “BBB” as assessed by Standard & Poor’s, or its equivalent in the grading system of Moody’s or Fitch Ratings, before such bonds shall be considered as an admitted asset. “For investments in foreign currency-denominated bonds made prior to the effectivity of the amended Insurance Code, prior approval of the IC is not required if the investment made complies with the credit ratings of S&P, Moody’s or Fitch provided under IC Circular Letter 29-2005, the prevailing circular at that time,” the new circular said. “But if the investment made prior to the effectivity of the amended Insurance Code does not comply with The 10th Asia’s Ethnic Food & Ingredients Show Philippines opened on Thursday, with (from left) Center the credit ratings, approval of the IC for International Trade Exposition and Missions Executive Director Rosvi Gaetas, Trade Undersecretary Ponciano Manalo Jr., Sen. Cynthia Villar and is required, otherwise, the investAgriculture Undersecretary for Operations Emerson Palad leading the ceremonial toast to welcome the attendees to the annual event at the SMX ment made will be deemed as nonConvention Center in Pasay City. ROY DOMINGO admitted asset,” the circular added.

FOOD EXPO OPENS AT SMX

Metro Manila now in JLL’s top 30 investment cities globally

By Mary Grace Padin

LOBAL real estate and investment management firm Jones Lang Lasalle (JLL) announced on Thursday that Metro Manila is now recognized as one of its Top 30 Real Estate Investment Cities in the world. Jeremy Kelly, director of JLL Global Research, said during the Asia Real Estate Summit 2015 in Makati City that the Philippine economy’s robust growth is crucial in making Manila one of the most attractive commercial real-estate spots today. He listed economic output, population, corporate presence, connectivity, real-estate stocks and investment as some of the criteria that JLL considered in its Global City Commercial Attraction Index in real estate and development. “The key feature of a successful

city is about sustainable momentum, adaptability and ability to reinvent itself. Manila definitely has these qualities,” Kelly said in his presentation. JLL predicted that by 2030, Manila will be top 18 in the world in terms of city gross domestic product (GDP), having one of the highest economic momentum globally, along with Jakarta and Istanbul. Kelly also mentioned the Philippines’s specialization in the businessprocess outsourcing (BPO) sector as one of its strengths in the global city competitiveness scale. He cited AT Kearney Emerging Cities Outlook 2014 and Tholons Top Outsourcing Destinations in 2015, both placing Manila in the No. 2 spot. “The Philippines should leverage its position as a BPO destination so that it can evolve fundamentally into a technology hub,” Kelly added. The city’s population and de-

mographics also play a big role in the city’s success, as it is one of the densest cities in the world. Kelly said Manila is on its way to becoming a supersized city, reaching 30 million people by 2030. “This will shape endless possibilities and pathways to future developments. Interestingly, many cities around the world are looking at densification as the answer to some of their challenges,” he said. It also provides the city with a huge work force and numerous talents. JLL also named other factors in a city’s competitiveness, namely, transparency, consistency, business friendliness, livability, sustainability, innovation, identity and confidence, among others. Sustaining the Philippines’s success in the real-estate industry will rest on how it absorbs its growth, Kelly said. That said, he described Manila

as one of the so-called multipolar cities, having multiple central business districts (CBD)—cities that are close to their talents. Kelly recommended that renovations should be made in Manila’s infrastructure system and mass transit in order to improve its potential in the real-estate business. He said major transportation should be near business hubs and that key gaps in infrastructure should be identified to create a great sense of space and vibrancy in the Metro. Among JLL’s visions for Manila are the realization of the Metro Manila Greenprint and the Metro Manila Dream Plan by 2030: infrastructure spending equivalent to 5 percent of GDP, $65-billion infrastructure investment, new international airport, first subway system, enhanced connectivity between CBDs, to name a few.

A6 Friday, May 22, 2015

Opinion BusinessMirror

editorial

The new population bomb

TANFORD University Prof. Paul R. Ehrlich and his wife Anne wrote a best-selling book in 1968, titled The Population Bomb. It began with this statement: “The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now.”

Just about every prediction Ehrlich made was completely wrong. In fact, the United Nations (UN) reported last year that the percentage of the global population that qualifies as “undernourished” has fallen by more than half, from 33 percent to about 16 percent, since 1968. Ehrlich wrote in 1968, “I don’t see how India could possibly feed 200 million more people by 1980.” That sentence was removed from the 1971 edition, as India’s food self-sufficiency improved dramatically. In fact, while the number of malnourished children in India is high, the rates of malnutrition and poverty in India have declined, from approximately 90 percent at the time of India’s independence to less than 40 percent today. The total number of living humans on Earth is now greater than 7 billion, and between 1900 and 2000 the increase in world population was three times as great as the increase during the entire previous history of humankind. According the economist Max Roser, world history can be divided into three periods of distinct trends in population growth. The first period was a very long age of very slow population growth. The second period, lasting until 1962, had an increasing rate of growth. Now, the population-growth rate is falling and will continue to fall, leading to an end of growth before the end of this century. According to the UN data, Chinese, Russians and Brazilians are no longer replacing themselves, while Indians are having far fewer children. If this strengthening trend continues, global fertility will fall to the replacement rate in a little more than a decade. Total fertility rate (TFR) is the average number of live births per woman over her lifetime. The global population will remain stable if the TFR is at or above 2.3 for the world as a whole. Germany and Japan now come in at 1.4 TFR. In 1950 China and India were 6.1 and 5.9, respectively. Based on the imbalance of more men to women, effectively, China is now at 1.5 and India is at 2.45 TFR. Certainly, in view of the planet’s limited carrying capacity, a slower birth rate is beneficial. However, this change in demographics creates its own set of problems. India is the only large economy whose work force will grow sufficiently over the next 30 years to increase economic growth. China’s pool of women of childbearing age will drop 8 percent between 2010 and 2020. Germany, Japan and Russia already have declining numbers in their work forces. The one global region that is projected to stay in the “not too fast” (West Africa) and “not too slow” (Europe) category is Southeast Asia.

Dodged a bullet James Jimenez

spox

VERY Precinct Count Optical Scan (PCOS) machine used in our last two elections took digital photographs of each ballot that was fed into it, creating a comprehensive record of how the ballots appeared at the very moment they were cast. These digital images are then used after the elections, in case the final results are questioned and a recount becomes necessary. In the last elections, during the Random Manual Audit (RMA)—the process by which ballots from select precincts are recounted immediately after the polls— a number of these digital images showed vertical lines of varying width, running from top to bottom, some of them crossing over the ovals that voters need to black out to signify their vote. In short order, this phenomenon—consisting as it did of lines appearing on digital images —was christened “digital lines.” With no evidence to prove anything either way, these digital lines quickly became touted as a kind of smoking gun to prove that the PCOS machine manipulated the results of the last elections. So it wasn’t a surprise that, at the May 14 hearing of the Joint Congressional Oversight Committee on the automation of elections, one of the most-anticipated topics up for discussion was the matter of these digital lines.

Almost as soon as the topic was brought up, hands shot up into the air as nearly every other resource person in the room wanted to get on the record with his or her theory on where those lines came from, what they signified, and well, you get the picture. And then the head of the Technical Evaluation Committee (TEC)—created under the Automation Law, to certify the automated election systems—delivered his committee’s report. Early on, the presentation categorically stated that the appearance of these lines was a common problem in optical scanning devices, where it is the object being scanned—such as the ballot—is the one which moves over a stationary scanning element. The presentation also clarified that it was not even a problem unique to the Philippines, citing similar issues in recent elections in Mongolia. According to the presentation, the

most common cause of digital lines was foreign-matter contamination. Things like dust particles stuck on the surfaces of ballots could become temporarily lodged between the ballot and the scanning element and, essentially, block the scan—technically referred to as “opticalpath disruption”—as the paper moved through the PCOS and into the ballot box. Ink stains would have the same effect, as would bits of paper, insect body parts (that one elicited a collective “eww” from some of the younger people in the session hall at the time), and even just scratches on the thin and transparent celluloid sheet—called mylar—covering the PCOS’s scanning elements. By this time, the presentation had made it abundantly clear the so-called mysterious digital lines were neither mysterious—the underlying clauses were physically demonstrable and the resulting lines repeatable—nor even digital in origin. However, there was still the issue of how these lines affected the outcome of elections. Based on the study conducted by the TEC in December 2014, on ballots coming from 383 precincts, 84 percent of the 200,403 manually reviewed ballot images did not show any line. And for those images that did show lines, the results of 94.7 percent were not affected at all; overall, a mere 0.55 percent of national positions and 0.28 percent of local positions were affected. As it turned out, the decision by the Commission on Elections (Comelec) to set thresholds for mark recognition—

the percentage of the oval that needed to be covered by a mark in order for it to be recognized as a vote—proved to be a significant safeguard. Although in 2013, this threshold was set lower than 50 percent, which was not low enough that a mere straight line through the oval would trigger recognition as a vote. While some of the lines that crossed the ovals did get marked as votes, the number of such incidences was too low to be significant. After the TEC’s sobering presentation of these findings, much of the speculation ceased and the way forward for automation was that much clearer. Obviously, these lines were not something that could be shrugged off, and the Comelec laid out its plans to replace all the mylar sheets used in the PCOS, and to require that all machines either be equipped or—in the case of the PCOS machines already owned by the government—retrofitted with software that will enable the detection of conditions that would give rise to these lines. This apart from the extra attention being given to the kinds of paper being used for ballots; the kinds of marking pens that will be rolled out on election day; and the establishment of procedures to minimize the problem of foreign materials getting into the PCOS machines. No question about it. The Comelec dodged a bullet with this one. Time to make sure it doesn’t happen again. James Arthur B. Jimenez is director of the Commission on Elections’s education and information department.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Friday, May 22, 2015

In praise of the last summer The Global Development Agenda should be the National Development Agenda Alvin P. Ang Ph.D.

EAGLE WATCH

HE national election is upon us. Potential presidential candidates are now racing for that critical name recall less than a year before the actual election day.

Vice President Jejomar C. Binay, frontliner in the surveys, has pointed out that experience is what is needed for a successful presidency. On the other hand, Sen. Grace Poe, running second, disputed this, and said that honesty is more important. We are not going to argue for or against their perspectives. There is a much larger campaign that has started for the race to end global misery that should be aligned with our local perspectives. Amid the varying national agendas, we have seemed to lost track of a commitment we made in 2000 under the United Nations (UN) Millennium Development Goals (MDGs). The MDGs are eight international development goals that UN member-states committed to achieve by end of 2015. The goals are to eradicate poverty and hunger, universal primary education, gender equality, reduce child mortality, improve maternal health, combat diseases, ensure environmental sustainability and develop a global partnership in development. In order to measure progress, these goals were designed various indicators to monitor. As a signatory to this commitment, the Philippines has done well in some and remains a laggard in others. As can be noted, many of these goals are basic to human capital formation and national development. They should be implemented with or without any international commitment and achieved by a well-functioning bureaucracy at all levels. Let us take the case of two indicators where the Philippines will most likely not achieve its targets for 2015: Proportion of students who started Grade 1 and will finish Grade 6 (Elementary Cohort Survival Rate) and Maternal Mortality Rate (MMR), or the number of mothers who died from childbirth. The baseline for Cohort Survival was in 1990, with about 69.7 percent. As of 2013, it has only reached 80.6 percent, when the target for 2015 is 100 percent. Meanwhile, the baseline for MMR is 209 for every 100,000 in 1990, this has actually increased to 221 for every 100,000 in 2011, against the target of 52 for every 100,000 for 2015. In an MDG Acceleration Workshop for Maternal Mortality Rate, which I participated in April 2014, many of the issues hampering the achievement of these goals are not solely the responsibilities of government agencies in charge of these concerns. For example, providing educational resources, such as school buildings and teachers, will not ensure that students will come to school every school day. The same is true that mothers died from child birth, even when you have health facilities and doctors available for child deliveries. Providing the

necessary infrastructure is one thing, but having an overall coordinated mechanism is another. During the workshop, it was identified that about 45 percent of mothers still give birth at home. Many of them reasoned that they lack money for treatment, the facilities are too far from where they live and they need transport. These reasons will not be different from children who have to go to school every day. These reasons can be interpreted as due to poverty and accessibility. In a chart, it can be seen that poverty and birth deliveries in facilities have negative correlation. Therefore, in order for the system to work and meet these targets, responses cannot be left solely in the hands of agencies concerned. These are cross-cutting issues that can only be responded to through a concerted effort from the national to the local governments. Connecting this to the global agenda and the coming national elections, these data are saying that beyond the characteristics that candidates are trying to sell are real issues that need to be responded to. As the MDGs are about to close this year, the UN has been working on the post-MDG agenda. In this new campaign, various preparatory activities have already been made leading to what is now known as the Sustainable Development Goals, or SDGs. The SDGs will have 17 goals compared to only 8 in the MDGs. However, many of the MDGs will still be part of the SDGs, including these two examples that were presented here. Nonetheless, there will be more indicators to measures and more challenges to be included in the process, with emphasis on combating climate change and building effective and responsible institutions. From September 25 to 27, 2015, the UN will have a summit to adopt the Post2015 Global Development Agenda. Soon after that, the country will know who the candidates are for the presidency. The timing is right. What will be the national agendas of the candidates, and how will they relate to the global agenda, particularly, as this post-2015 demands more than the basic—it requires a more specific collaboration from the global to the local in preparing countries from the challenges brought about by natural disasters and will demand an effective responsible governmental system. In short, the global agenda should also be the national agenda for the coming 2016 elections. Alvin P. Ang, PhD, is professor of economics and senior fellow of Eagle Watch, the macroeconomic and forecasting unit of the Ateneo de Manila University.

Tito Genova Valiente

annotations

LASSES in the old Jesuit school will begin this August. This is no big deal insofar as education management goes. Seasons and their ephemera rightfully belong to the creative. And there are many things that should be big deal for education people but are ignored, seasons and weather and climate included.

“I’ll see you in September when summer is gone.” Gary Lewis and the Playboys sang the song with those lines. Summer in that song is going away, for a while. June nights surround lovers but one always waits in another place, when summer is gone. This makes August the gateway to summer, the summer of other countries, the signifier for the hot days for our colonizers. But we sing this song even if August and part of September do not constitute the summer for us. March, April and May are our summer months. Try as we may harder, we can never feel the poignancy of those lines. The fact is by September, summer is long gone in this country. Summer is something tentative in terms of the more permanent events in a human group’s life. The ephemera are the permanent element, the charm of such season filled with indeterminate pains and pleasures.

Edna St. Vincent Millay tells it all: “I know I am but summer to your heart, and not the full seasons of the year.” The lines can take any feeling man’s breath away but in our country, as I always put it, summer is the full season of the year. In the songs of the temperate countries, summer is about fleeting affairs. One, it seems, is allowed to be unfaithful in summer. Films abound about the beauty of the transient and this all takes place during the summer months that extend until the first few days of September. Take note of the film The Summer Knows, and remember the Michel Legrand song that goes with it: “The summer knows/The summer’s wise.... She sees the doubts/within your eyes.” The secret of childhood, the loss of innocence are there in the lines: “And if you’ve learned your lesson well/ There’s little more for her to tell.” We do not have these bittersweet

Three Asian economies with room for improvement William Pesek

BLOOMBERG VIEW

N May 19 I assigned somewhat disappointing grades to the would-be economic reformers of Asia’s three leading economies: India (B), Japan (C-) and China (C+).

But those aren’t the only Asian countries with ambitious leaders and a need for economic reform. Today I’ll turn my attention to Park Geun-hye of South Korea, Benigno Aquino of the Philippines and Joko “Jokowi” Widodo of Indonesia, in order to evaluate how far they have—or haven’t—gotten with their plans to generate growth and raise living standards. Parkonomics: Park was always an unlikely reformer. In February 2013 she followed her father’s footsteps into the

presidential Blue House with a pledge to undo the economic system he built between 1962 and 1979 in order to restore the nation’s global competiveness. More than two years later, she hasn’t fared very well. Her goal was to transform South Korea, Asia’s fourth-biggest economy, into a “creative economy,” driven more by services and innovation than industrial brawn. That meant reversing the economic model, heavily reliant on exports by family-owned conglomerates (or

chaebol), set up by her strongman father Park Chung-hee. Early on, things looked promising: She rolled out measures to support small and midsize enterprises, inspire start-ups and curtail the influence of companies like Samsung, Hyundai and LG. Park even proposed tax changes to force the chaebol to either invest, or share with workers, the approximately $2 trillion of cash sitting on their balance sheets. Over the last 12 months, however, Park’s government has lost its reformist zeal. It has even fallen back on the oldest trick in the South Korean policy-maker’s playbook: browbeating the central bank to cut interest rates to boost the country’s housing and stock markets. Meanwhile, Park has allowed the chaebol’s influence over the national economy to grow even larger. (Samsung’s revenues now equal 25 percent of South Korea’s gross domestic product.) A court ruling this week determined Samsung copied Apple’s smartphone designs, underscoring South Korea’s lack of progress: The country is still good at

cribbing existing technologies, but not at inventing them. And that’s partly because Park has been too timid. For that, she earns a C. Aquinonomics: The Philippine president carried his own family baggage into office in June 2010. After his opposition-leader father was assassinated in 1983, Aquino’s mother, Corazon, led the street protests that toppled dictator Ferdinand Marcos in 1986 and later became president. Since his own election five years ago, Aquino has transformed the Philippines from the “Sick Man of Asia” into an economy that won record foreign-direct investment in 2014—66 percent above 2013’s impressive haul. He has attacked corruption, gone after tax cheats and imposed higher levies on cigarette and alcohol tycoons. He even crossed the powerful Catholic Church by supporting population-control measures. Aquino needs to do a better job, however, of preparing the country for his departure. Aquino, who is limited to one

recollections. Morality is an annual commitment, although we do not adhere to such a vow. We pretend to be faithful from January to December. We assure ourselves that fidelity is a contract sealed with the kiss of a region that it either dry or wet, or sometimes, dry and wet, and all the time hot. We are given reprieve when the chills come in the mornings from December to February. Then the true season of this republic asserts itself again. What happens now that some universities are globalized (summer cannot contend with globalization) and the school calendars have shifted? I may sound flippant but when classes extend to April and May, we technically, and in fine romantic form, really lose the summer of our childhood. Yet, when foreign universities abroad contemplate regarding their schedule, the universities that dispense of the summer of old will be fully integrated to a world calendar. Looking back, the summer of March until May is in tune with the harvest season. The families rest their finances and summon back their children to work in the farm. This was when farms were far from the towns. Urbanization was then viewed as a force that will soon encroach upon rural lands. That is not the case now, when farms are being subdivided and farmlands are vanishing. The flood that covers most of big cities has nowhere to go. The paddies are gone and where there were

rice and trees, we have pavements and roads, as well as highways that killed woodlands and marshlands. The new calendar has not fully conquered the other schools. In some areas where August is the beginning of classes, somehow, summer is gone. The old months of vacation are gone, whether we like or not. Where do we put those easy, laidback summer classes? Where will the summer of circumcision go? What occurs in the months when boys lose their boyhood? Where will those summer afternoons be? Henry James, “Summer afternoon—summer afternoon; to me those have always been the two most beautiful words in the English language.” The bureaucracy of education, some say, is the slowest to move of all bureaucracies. And yet, this time, with the change they are imposing, these men and women of knowledge have just swiftly altered, to a certain degree, the clime of this nation. I do not know if my thoughts make sense. Perhaps, these are memories of a generation that relied on the rhythm of the seasons, when typhoons were used to reckon milestones and misfortunes. Believe me, for those who will attend classes in August or early September, they should salute this summer, for this is their last summer.

six-year term, will step down as president in June 2016. Absent reforms to the country’s political institutions, which are less transparent and accountable than they ought to be, the Philippines will likely remain one bad leader away from renewed economic chaos. (It’s worrying, in that sense, that the perceived frontrunner to replace Aquino, Vice President Jejomar C. Binay, recently had his bank accounts frozen after an investigation by the country’s Anti-Money Laundering Council.) Still, Aquino earns a solid B+. Jokowinomics: Admittedly, it’s premature to grade a leader just 213 days after his election. But Jokowi’s disastrous showing in recent weeks demands scrutiny. Jokowi is the first Indonesian leader who isn’t the scion of a dynastic family or the military. Early on, he proved his independence by cutting subsidies, going after dodgy dealings in the energy sector and increasing transparency at government ministries. Jokowi pledged more “inclusive” growth and an infrastructure

boom that would attract investment; his hikes to gas prices freed up $17.5 billion for the government to spend on ports, roads and other projects. But when Indonesian growth started sputtering in recent months, that Jokowi disappeared. In his place, we’ve had an economic nationalist who prefers playing to the masses. He has been talking up a national Indonesian car (how did that work out for Malaysia?), and endorsing protectionist laws that require technology companies that sell their products in the country to source their components domestically. He has also been handing money to inefficient state enterprises in order to please the Indonesian Democratic Party of Struggle that backed him in his election campaign. All this is especially troubling because, as southeast Asia’s biggest economy, Indonesia’s health matters greatly to neighboring Malaysia, Singapore and Thailand. On the bright side, Jokowi still has four years to rescue his legacy. For now, however, he gets a C-.

E-mail: titovaliente@yahoo.com

2nd Front Page BusinessMirror

A8 Friday, May 22, 2015

‘Growth without infra buildup not sustainable’

he country’s lack of appropriate and carefully laid-out infrastructure is a major deterrent to the country’s economic stability and subtainable growth path. In an interview late Wednesday, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. told reporters this was the considered assessment of the international credit-rating agency Standard & Poor’s (S&P). “They recognized the continuing good economic performance and the reforms that have been put in place that are supporting this performance…although they are also looking at further improvements in certain areas, like in infrastructure,” Tetangco said, quickly adding that this was something most people “agree with.” He further said the acceleration of infrastructure development plays a critical role in strengthening the foundation for medium-term growth and to expand the absorptive capacity of the economy. The government has boosted the budgetar y allocations for public infrastructure programs, the target having been set at 5 percent of the country’s gross domestic product (GDP) in 2016, and considered broadly on track based on recent statements from government officials.

TETANGCO said the acceleration of infrastructure development plays a critical role in strengthening the foundation for mediumterm growth and to expand the absorptive capacity of the economy.

Also earlier this month Tetangco said the boost to infrastructure spending this year likely provided additional lift to GDP in the first three months of the year. In April S&P affirmed the country’s “BBB” rating with a stable outlook, indicative of an economy likely to sustain the growth trajectory over the next 12 to 18 months. Although the economic managers lauded this development, some said further upgrades are forthcoming based, for instance, on statements attributed to Finance Secretary Cesar V. Purisima, who said the Philippines remains underrated. “If compared with those of other emerging markets, fundamentals of the Philippines are one of the strongest. And with continually improving major credit indicators, including debt manageability, credit ratings ideally should adjust accordingly,” Purisima said in a statement following the S&P credit affirmation in April. Bianca Cuaresma

www.businessmirror.com.ph

560 million pieces of old notes still circulating–BSP

By Bianca Cuaresma

he Bangko Sentral ng Pilipinas (BSP) urged the public on Thursday to help deplete the stock of old-design banknotes, as the process of demonetization has already begun and soon the bills are no longer legal tender.

In a news conference on Thursday, BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said that as of endApril, there remains 560 million

pieces of the old-design banknotes circulating in the economy. This amounted to more or less 20 percent of the total 2.8 billion pieces still in circulation.

The BSP previously said the old banknotes, which were launched in 1985, may still be used for day-to-day transactions up to December this year. Starting next year, however, Guinigundo said the old-design banknotes may not be used in daily transactions anymore, although they can still be exchanged for new-design banknotes in banks and at the regional offices of the central bank nationwide. The old-design banknotes will be stripped of its value starting 2017. By then, the old-design banknotes may no longer be accepted in dayto-day transactions and may not be exchanged with new banknotes in any financial institution anymore. “The demonetization process of the old banknotes is in line with the

provisions of Section 57 of Republic Act 76653, otherwise known as the New Central Bank Act, which authorizes the BSP to replace banknotes that are more than five years old,” the BSP said. The old designs have already been in circulation for nearly 30 years. “This will result in the circulation of a single currency series in the country—the New Generation Banknotes introduced in December 2010, which have more enhanced security features to protect the safety of the public against counterfeiters,” the BSP said. As for the introduction of newdesign coins, Guinigundo said the security features and the kind of technology that goes with the minting of the coins have yet to be approved.

El Niño puts inflation risk back on investors’ radars. . .

of global trade and likely to keep prices depressed for the time being, they wrote. Twenty-three of the Philippines’s 81 provinces are affected by drought and an additional 31 are suffering a dry spell, the agriculture department said on May

6. The Bangko Sentral ng Pilipinas (BSP) cited El Niño as a reason for adjusting its 2015 inflation forecast last week to 2.3 percent from 2.2 percent. “Just in case El Niño adversely impacts rice production, we have additional supply coming in”via imports, BSP

Governor Amando M. Tetangco Jr. told reporters in Manila on Tuesday. Severe drought is a key inflation risk and could also affect hydroelectric generation, pushing up power prices, according to a Bank of America note released on Wednesday that includes

Continued from A1

research by Jojo Gonzales, an analyst at Philippine Equity Partners in Manila. The lender forecast consumer prices will rise 2.4 percent this year and 3.5 percent in 2016, saying the risk to inflation is now “tilted to the upside.”

Bloomberg News

MANILA PRESSES‘GREENING’ OF MSME’s AT APEC MEETING By Catherine N. Pillas

icro, small and medium enterprises (MSMEs) need to “go green” in their production process to boost their chances of participating in the global supply chains, the Phlilippines stressed at a recently concluded Asia-Pacific Economic Cooperation (Apec) meeting. As the host economy, the Philippines put the spotlight on the greening of MSMEs during the “Dialogue on Apec Cooperation Network on Green Supply Chain” in Boracay. Apec member-economies discussed best practices in managing green supply chains and the creation of a work plan to create an Apec Cooperation Network on Green Supply Chain. “Over the recent years, Philippine development programs converge on mainstreaming MSMEs into domestic and regional trade.

Apec 2015 is a valuable venue where the Philippines can highlight the value of MSMEs to move forward our advocacy for initiatives to further enable MSMEs,” Trade Undersecretary Adrian S. Cristobal Jr. said. The Industry Roadmap Project of the Department of Trade and Industry (DTI) was also discussed during the dialogue, as the roadmapping initiative aims to integrate green measures to the government’s interventions for the manufacturing sectors. Trade Undersecretary Rafaelita Aldaba added that the industry road-map project aims to identify policies that would enable industries to improve their competitiveness and increase their chances of participating in supply chains through cleaner production processes; efficient use of materials, water and power; reducing the impact on the environment; and

compliance with global health and environment standards. Specifically, the interventions will be integrated into the road maps of the automotive manufacturing and auto-parts sector; pulp and paper; plastic; mass housing; and copper and furniture sectors. Aside from greening the industry road maps, the DTI’s initiatives focus also on supporting local communities in the rural areas. MSMEs are estimated to account for 97 percent of all registered businesses in the country.They employ about 60 percent of the work force and contributes about a third of the country’s gross domestic product. The common goal for Apec 2015 is the widening and deepening of MSME participation in trade. Initiatives include more actions that will further advance their internationalization, utilizing a set of indicators to track the progress of their direct and indirect contributions to trade.

Chinese factory gauge remains sluggish on slowing economy

gauge of Chinese manufacturing remained sluggish, underscoring the tepid response to government efforts to cushion a slowdown in the world’s second-largest economy. The preliminary Purchasing Managers’ Index (PMI) from HSBC Holdings Plc. and Markit Economics was at 49.1 for May, missing the median estimate of 49.3 in a Bloomberg survey. Numbers below 50 indicate contraction. The government has escalated efforts to prevent a hard landing, adding fiscal loosening to monetary easing. In the latest moves, it relaxed financing rules for local governments in a bid to boost demand for credit, while three interest-rate cuts since November aim to lower borrowing costs.

“The policy easing hasn’t shown its effect, yet,” said Ding Shuang, chief China economist at Standard Chartered Plc. in Hong Kong, adding that he expects the economy to stabilize in the third quarter. “Credit supply has been sufficient, but demand has remained weak.” Manufacturing output slipped to a 13-month low, the PMI report showed, while employment remained in contraction zone. “Softer client demand, both at home and abroad, along with further job cuts, indicates that the sector may find it difficult to expand, at least in the near term, as companies tempered production plans in line with weaker demand conditions,” Annabel Fiddes, economist at Markit, wrote in the report. Policy-makers are considering relaxing rules for

bond sales in a bid to boost growth, while banks have been instructed to keep funding projects that were approved before year-end 2014, even if borrowers can’t make repayments. “It remains extremely hard, if not impossible, for any revival to be sustained,” Wang Tao, chief China economist at UBS Group AG in Hong Kong, wrote in a report before the data release. “Further policy support is still needed to stabilize China’s growth momentum and arrest the passive tightening of monetary conditions.” Premier Li Keqiang’s government is balancing structural reforms, including new fiscal arrangements, and moves to open the nation’s capital account with the need to keep economic growth ticking along rapidly enough to sustain employment.Bloomberg News