BusinessMirror June 16, 2015

BusinessMirror

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

U.N. MEDIA AWARD 2008

A broader look at today’s business Saturday 18,June 201416, Vol.2015 10 No. 40 Tuesday, Vol. 10 No. 250

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PERSONAL REMITTANCES APPROXIMATED GROWTH OF ECONOMY IN FIRST 4 MONTHS AT 5.1 PERCENT

Remittances still growing but at slower pace INSIDE

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HE personal remittances sent home by some 10 million overseas Filipinos— representing gross earnings of both land- and sea-based workers, including socalled personal transfers and capital transfers between households—approximated the continued growth of the broad economy in the first four months to 5.1 percent, or $8.65 billion, from only $8.23 billion 12 months earlier.

PICK THE PERFECT SOFA

Life

Do the Lord’s will

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H, good God, what is important is to do the Lord’s will and to keep on climbing even if the road is uphill. Success is Your gift to us who try with patience, endurance, even though life seems too dry. So we try to smile and confront the shadows that darken the next mile.

Forward we go on with courage—head high. Our full trust is in You because our hope will never die. Amen.

WORD AND LIFE, FR. VIC CERVANIA, SDB AND LOUIE M. LACSON

Word&Life Publications • teacherlouie1965@yahoo.com

TV REVIEW: WACHOWSKIS’ ‘SENSE8’ ON NETFLIX A STYLISH IF STILL MURKY VISION »D3

BusinessMirror

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Tuesday, June 16, 2015

D1

How to pick the perfect sofa

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B M C G Tribune News Service

UYING a sofa feels a little like getting married—there is so much to consider before you pick the one you want to settle down with, isn’t there? Which one has the arms, legs, seats you’re attracted to? Which one will give you a safe place to land when you’re plum worn out by life? Which one do you want to show off to all your friends? Here are the four most important things to consider when looking for true love in a sofa.

1. Arms of lo love. Your sofa can’t just be eye candy.

It has to work for your daily life. So take a few seconds to list out what you’ll be doing when you’re settling in: Reading? Napping? Watching TV? Have face-to-face heart-to-hearts with your friends? Then pick an arm style that will help you achieve your checklist.

I have a Chesterfield sofa in my own home because I like how the high (shelter) arms wrap around me, serving as a back and headrest while I read. I’m also crazy about its classic lines, with the tufted back and nail head trim.

I asked Mark Gilmore, the vice president of sales at CR Laine, to weigh in on the how-to-pick-a-sofa discussion, because he’s a pro at helping people make great matches. If you like to nap on your sofa, Mark recommends a rolled arm or a sock arm, which have lots of soft padding, so they can act like a pillow. Mark says a track arm is a great option if you want a more modern or contemporary aesthetic. He also points out that with its thinner, sleeker styling, it takes up less room, so it may be a good pick if you have less space for a sofa.

2. Great legs. What kind of legs would you like on your sofa? Exposed or skirted? Turned or a block leg? It may seem like a small detail, but the leg you pick for your sofa will make a big difference in its overall appearance. If you want more air under the sofa, Mark recommends an exposed leg that is longer and thinner.

At market this year, CR Laine showcased an acrylic leg, a plucky choice that gave a fun contemporary finish.

I’m a huge fan of turned legs mounted on castor wheels.

They give a sofa a timeless, gracious feel.

If you like the look of a skirted sofa, and you have pets, I recommend a high-performing fabric you can easily clean: Lots of dogs (like mine!) love to sleep against the sofa and they can leave sofa skirts grungy.

Polish from shoes can also stain sofa skirts.

3. Best seat in the house. In my book, the most important feature of a sofa is that it be sink-into comfortable. Everybody has a different “Goldilocks” point—when the cushions aren’t too soft or too firm, but just right. Spend some time sitting in prospective sofas to see which ones feel like bliss to you. Mark says their top-selling cushion has the feel of down, soft and comfy, but it doesn’t actually contain feathers.

Sofas come in lots and lots of different cushion configurations. One of my favorites is a bench seat with a tight back. The Knole sofa is a great example of a bench seat. I love this look, but it’s not for everybody.

Over time, the bench seat fabric stretches a bit from use

and appears wrinkled, more soft and relaxed.

Another popular pick is a two-over-two or threeover-three style, with matching seat and back cushions.

The cushions can either be loose or attached, depending upon your preference. If you have little kids, and you don’t want the cushions made into forts, I’d recommend the attached back cushions! Some seat cushions come in “T” shapes, meaning the outside cushions wrap around the front of the arm. This is the style you see in lots of traditional sofas, like those with English arms (one of my favorite arm styles). Others are square, meaning all the cushions are identical. Mark says one pro of the square cushion is you can rotate the cushions around to keep the wear even.

4. Finish with fabulous fabric. When you buy a quality sofa, you will have it for years, so select upholstery fabric you love.

My advice is to go with fabric that is neutral enough that you can change its look over and again just by switching up your pillows. I’ll be writing about that soon: How to pick pillows that give your sofa loads of character. Mark says outdoor fabrics have also become a popular option because they wear well and clean up easily, a great choice if you have kids or pets.

■ www.nellhills.com. marycarol@nellhills.com.

Sleeping beauty URATEX Premium Touch Viscoluxe

PERHAPS the power of sleep was already apparent to the Brothers Grimm, or Charles Perrault, when they wrote that enduring fairy tale about a beautiful princess who falls under a sleeping enchantment.

At any rate, sleep and the myriad health benefits that can be derived from it, have been increasingly talked up in the face of modern lifestyles that often deny people the recommended eight hours of blissful Zzzs. The importance of sleep to good health was once more stressed by Dr. Phyllis C. Zee, the director of the Sleep Disorders Center of Northwestern University’s Feinberg School of Medicine in Chicago, Illinois, during a talk at the first International Sleep Medicine Symposium. The two-day seminar, dubbed “Sleep Health For All Specialties,” was held recently at the St. Luke’s Medical Center Global City in Taguig City.

In support of the sleep medicine symposium, Uratex (www.uratex. com.ph) is highlighting its highcom.ph quality and innovative foam and mattress products that have been known to help consumers get a good night’s sleep, while also providing a platform for health professionals to provide the public tips on enjoying the same.

“Aerobic exercise is a simple strategy that will help people feel better,’’ said Zee, citing recent studies on ways to improve the quality of sleep.

“It is important that we identify behavioral ways to improve sleep.

Just like nutrition and exercise, she adds, sleep is a necessary

component of a healthy lifestyle.

By improving a person’s sleep, then his physical and mental health also improves. People who do not sleep well are more likely to be in poor health. They have problems managing their hypertension or diabetes,’’ Zee says.

Other ways to achieve good sleep include sleeping in a cool, dark and quiet room; going to bed at the same time every night; and not staying in bed too long if you can’t fall asleep. Local sleep experts also cite the importance of having a smooth, soft and cool mattress that will support your body’s key pressure areas ensuring that it is perfectly aligned.

Spurred by advances in sleep science technology, Uratex Philippines has introduced innovations in its mattresses, including sanitation, tencel, memory foam, pocketed coil, 3D spacer fabric and hydragel memory foam.

Not surprisingly, the brand has gained the trust of the Philippine Orthopaedic Association.

Its acclaimed mattress collections include the Orthocare Collection (Harmony, Symmetry and Balance), which alleviates back pain problems with a hospitalquality mattress that combines a high-density foam with multizone topper to relieve contact pressure and ensure better blood circulation.

The Senso Memory Mattress (Ultima, Extra and Original) collection, meanwhile, is constructed using a visco-elastic foam on top of high-density base. This enables the foam to mold or cradle the body in a way that dramatically eases pressure and feels incredibly comfortable. The Premium Touch Viscoluxe collection, on the hand, has an advanced pocket spring system combined with a bodymolding memory foam for a mattress of soothing indulgence.

LIFE

World Companies

Boeing, Airbus race to churn out planes

BusinessMirror

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EATTLE—At this week’s Paris Air Show, new jet orders will be trumpeted and the latest aircraft will fly overhead as crowds of aviation-industry insiders watch from the outside decks of corporate hospitality suites.

Yet, for both Boeing and archrival Airbus, the main focus right now is back home at their factories.

In Paris their prime agenda will be to assure airlines they can deliver on their huge backlog of orders by churning out aircraft at previously unheard-of rates.

Boeing officials think Airbus could announce it is raising production of its A320 single-aisle workhorse beyond 60 jets per month in 2018—a move that would drive Boeing to match its rival by accelerating above the planned 52-per-month pace on the 737.

Beyond that, here are some things to look for: One certainty is Airbus, based in France, will handily beat Boeing, which has a big presence in the Seattle region, on order announcements.

While Boeing sales chief John Wojick claims not to hoard announcements for the Paris and Farnborough, England, air shows, Airbus super salesman John Leahy “likes big numbers at air shows,” said Adam Pilarski, aviation analyst with consultancy Avitas. Leahy has been working for some time to finalize a large and long-delayed A330 order from China.

In a move that has implications for Boeing’s slow-selling 747-8 jumbo jet, Airbus may also trot out a customer for some used A380 superjumbos, a move designed to prove there is a secondary market for these equally slow-selling giants.

Making its air-show debut will be Canada’s much-delayed Bombardier Cseries—an airliner too small and arriving too late to be a challenge to the single-aisle jet families of Airbus and Boeing.

It is possible the new Airbus single-aisle A320neo will also make its first appearance.

If that jet does join the A380 and the new A350 widebody twinjet in the flying display, it will be a telling rejoinder to Boeing, coming a couple of weeks after the US jet-maker began building the first wings for its answer to the neo, the 737 MAX, which won’t fly for another year.

Boeing’s 787-9 will fly again in the daily aerial display each afternoon in Paris, after wowing the crowd at last year’s Farnborough Air Show near London with a breathtaking touchand-go maneuver.

That maneuver was banned after Day One at Farnborough as too dangerous, guaranteeing an audience on Monday eager to see if Parisian authorities may be more lenient.

In recent weeks Boeing test pilots have been preparing their flying routine in the Vietnam Airlines 787-9 that will appear in Paris.

Along with roaring jet-fighter planes and other military hardware, that is the entertainment in Paris.

In serious meetings at the show, discussion will revolve around how fast Airbus and Boeing can build the nearly 12,000 planes they already have on order.

Boeing automation

IN pre-Paris tours of two Washington state final-assembly plants, Boeing showed off progress toward its planned production ramp-up.

Just outside Seattle, in Renton, automated wing-panel fastening machines are the latest innovation in a 737 plant that is being transformed into the most productive airplane factory on the planet. And nearby, in Everett, 787 Dreamliner production is finally smooth enough that managers are preparing to carefully wind down the temporary “surge line” that is operated since 2012.

That will mean the entire seven-jetsper-month production is done on the main 787 assembly line.

About 600 mechanics work on each of the two 787 lines. When the surge line closes at the end of the year, probably around 800 workers will staff the accelerated main assembly line, with the rest redeploying to either 777 or 737 production, said Brett VandePutte, director of 787 structures manufacturing.

Just outside the main Everett assembly plant, the foundation of Boeing’s future production is being laid with the construction of two massive new buildings where the wings and fuselage of the 777X will be fabricated using highly automated robotic systems starting in 2018.

So that all the wrinkles can be worked out in advance, some of the new technology is being introduced early to make the fuselage of the current 777-300ER. “We’ll be building 100-percent robotic fuselages before the 777X comes along,” 777 Vice President Elizabeth Lund said in a briefing.

In the 777 final-assembly line, engineers will also install new tooling capable of holding either the current metal 777 wing, or the longer, carbon-composite 777X wing.

In this tricky transition to the 777X, Boeing acknowledged during the pre-Paris briefings, the 777 production rate will have to temporarily drop from the current rate of 100 jets per year, though by how much is undetermined.

In addition, a sales gap for 777s in the final years of this decade must be filled to avoid any steeper production-rate cut.

To bridge that gap, industry analysts say, Boeing is offering big discounts on current-generation 777s.

That could shake loose some orders in Paris.

Airbus ‘Future factory’

AIRBUS’S plans for production increases look remarkably similar to Boeing’s.

In briefings late last month, Airbus Chief Operating Officer Tom Williams said the jet-maker plans to move beyond its previous method of largely hand-building airplanes because there are limits to “that kind of artisanal approach.”

To reach Airbus’s already announced 2017 target of 50 singleaisle jets per month, Williams added, “You need to build a single-aisle aircraft every six-and-a-half hours.”

A computer simulation of the Airbus “Future Factory” shows automated guided vehicles silently delivering parts to an assembly line as robots lift fuselage panels into place and fasten them together. For both manufacturers, pursuing automation not only speeds production and fuels this huge production surge but may also, when a downturn eventually follows, provide a way for them to avoid big swings in their work forces.

In the past, to maintain employment in its European factories, Airbus has been very reluctant to ever cut production rates as Boeing has done over past cycles.

By introducing automation and lean production efficiencies, fewer people need be added during the upturn.

Fueling this industrial revolution in both Renton and Toulouse, where Airbus is based, is the battle over the single-aisle-jet market, in which the Airbus A320neo family is well ahead of the Boeing 737 MAX family.

Airbus has a total of almost 3,800 neo orders. Boeing, which launched its jet eight months after Airbus did, has amassed 2,725 MAX orders.

Single-aisle orders in Paris will be scrutinized for any shift in the balance. Airbus is pushing up production to cement its 60-percent single-aisle market share. Boeing is doing the same to try to catch up.

Yet, Aboulafia said this “headlong rush by both sides toward making 60-plus single-aisle jets per month appears very risky and probably unsustainable.” TNS

Tuesday, June 16, 2015

B2-3

Google buying Twitter? CEO’s departure spurs speculation

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ILL Google buy Twitter?

Following news that embat embat-tled Twitter Chief Executive Officer Dick Costolo is stepping down, some analysts are speculating that Twitter could be an acquisition target.

Years ago, Twitter turned down offers from Google and Facebook, choosing instead to compete with them for ad dollars and users. But advertising never became as lucrative as investors wanted and user growth has stagnated for the microblogging service.

Now, the company is in a state of flux as its chief executive of five years is scheduled to step down on July 1, a situation that Jefferies analysts say could make conditions ripe for an acquisition.

“Prospective buyers have been interested in purchasing Twitter in the past,” analysts Brian Pitz and Brian Fitzgerald wrote in a note to clients. “And the lack of a CEO successor signals to us the potential for acquisition.” Pitz and Fitzgerald did not name any potential suitors, but said the likelihood of a deal is “heightened” as Twitter scours internally and externally for a new CEO.

Come July 1, cofounder Jack Dorsey will take the helm on an interim basis.

Twitter has long been the subject of acquisition rumors, none of which has come to pass. That has not stopped the chatter.

Last week major Twitter investor Chris Sacca posted a nearly 8,500word essay lamenting all the missed opportunities to boost advertising at Twitter. He then took to CNBC to proclaim that Google and Twitter would be an “instant fit.”

Some observers cast doubt on a potential sale.

“I’d be surprised to see Twitter get acquired by another company,” said Betsy Sigman, professor of social media and information systems at Georgetown University.

According to Sigman, recent changes introduced to Twitter, such as the removal of a character limit in direct messages and the launch

THEN- TTERR Chief Executive Officer Dick Costolo, Chairman and Cofounder Jack Dorsey, and cofounders THEN-TWI Evan Williams and Biz Stone, applaud as they watch the ringing of the opening bell at the New York Stock Exchange in this file photo. Despite executive turmoil and a stock price that has fallen 30 percent since late April, industry experts —not to mention loyal users—see potential in the company. But first it needs to address some of its biggest problems. AP

of the Periscope mobile app, could help the company.

Removing some of the limitations in Twitter’s direct-messaging feature could encourage direct-message advertising, which could boost the company’s bottom line. And with Periscope, the company is tapping into the growing live video-streaming market, which “could catch on” and increase engagement.

That said, if Twitter were to be acquired, Sigman said Google would be an obvious candidate because it

Homebuilders Standard Pacific, Ryland Group agree to merger

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OS ANGELES—Standard Pacific Corp. and Ryland Group Inc. have agreed to merge in an all-stock transaction that will create a single homebuilder with operations in 17 US states.

The merger marks the first big move toward consolidation among the major publicly traded homebuilders in years and comes as the US housing market continues to gradually regain its footing after years in a deep slump.

The two California-based homebuilders said late Sunday that their boards of directors unanimously agreed to go forward with “a merger of equals” that would form a company with an equity market capitalization of about $5.2 billion.

Ryland was the fifth-ranked US homebuilder last year, based on home closings, while Standard Pacific was 11th, according to Builder magazine.

Together, the builders accounted for 12,633 home closings last year, which would make the combined company the fourth-biggest builder.

The top three are D.R. Horton, Lennar Corp. and PulteGroup.

Executives at Standard Pacific and Ryland said the merger will create a company that can sell homes potentially to a broader array of buyers. The new company would also own or control roughly 74,000 land parcels for homes.

“We believe we’re in the middle innings of the homebuilding cycle,” Scott Stowell, chief executive officer and president of Standard Pacific Homes, said in an interview.

“We’re able to integrate the company, position it with approximately 540 active selling communities, so that we can fully capitalize on the

housing-market recovery.”

Standard Pacific sells homes in California, Arizona, Colorado, Texas, Florida and the Carolinas and caters primarily to move-up buyers, or homeowners looking to sell their home and buy a new one.

Ryland Group sells homes in 17 states and builds homes aimed to everyone from first-time homebuyers to high-end homes.

“It seems to be a good fit,” said Alex Barron, president and founder of Housing Research Center, an independent equity firm in El Paso, Texas. “There are some advantages potentially in terms of cost of labor, cost of materials, if you’re perceived to be a bigger builder.”

Job gains over the past year have put homebuyers in a stronger financial position, which has helped drive sales of new homes this year.

Through the first four months, sales of new US homes were running 23.7 percent higher than in the same period last year.

Homebuilders have benefited from a tight supply of available homes for sale, which have driven home prices higher. Over the past 12 months, the median sales price for new homes has risen 8.3 percent to $297,300.

In April new home sales climbed 6.8 percent to a seasonally adjusted annual rate of 517,000. Still, sales remain below the 700,000 pace that economist say indicates a healthy market.

“We’re in the early stages of recovery, so we’re looking for that slow, steady growth,” said Larry Nicholson, Ryland’s president and chief executive. “We see the opportunity to put the two [companies] together, strengthen our market positions,

take some costs out of the business, put more money to the bottom line, become a much more efficient organization, while continuing to grow it, which gives you a lot of benefits in the market.”

Ryland and Standard Pacific estimate that the merger could result in annual cost savings of $50 million to $70 million for the new company. A significant amount of those savings could be reaped by late next year, the companies said.

The executives declined to say how many jobs could be eliminated as a result of the merger.

Under the terms of the merger, Standard Pacific will conduct a 1 for 5 reverse stock split. Afterward, Ryland shareholders will receive 1.0191 shares of Standard Pacific stock in exchange for each Ryland share.

Standard Pacific shareholders will end up with about 59 percent ownership of the combined company, while Ryland shareholders own 41 percent.

Nicholson would become CEO and president of the combined company, which will operate under a new name to be disclosed once the merger is complete.

Stowell will become executive chairman of the new company’s 10-member board, which will be split between board members from Standard Pacific and Ryland.

The deal, which must be approved by shareholders and clear any regulatory hurdles, is expected to close in the fall.

The companies were scheduled to conduct a conference call with analysts early Monday. Shares in Ryland Group are up about 11 percent this year, while Standard Pacific is up 14.7 percent. AP

lacks its own robust social network.

“They’ve never done as well as Facebook with Google Plus.”

A Google spokesman did not immediately comment.

In a conference call on Thursday regarding his departure, Costolo said Twitter’s board would “carefully evaluate” any offer and that it’s committed to maximizing value for shareholders. But, he said, the focus is to do so as an independent company. Twitter shares rose 10 cents, or 0.3 percent, to $35.94. TNS

Ford’s European sales up in May

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ETROIT—Ford saw a slight increase in sales in Europe in May as the auto industry continues to slowly recover and the automaker prepares to launch a raft of key new products.

The Dearborn-based automaker sold 99,900 vehicles last month in the traditional 20 Western European markets, an increase of 1.5 percent from a year ago, which is the same increase as the industry as a whole. That brings Ford’s year-to-date increase to 9.3 percent with almost 542,000 vehicles sold through the first five months, which is outpacing the industry’s 7.2-percent growth.

And the best is yet to come, said Roelant de Waard, vice president of marketing, sales and service for Ford of Europe, in an interview.

A number of key products will go on sale in July, kicking off the second half of the year when the automaker expects to increase its market share that was flat at 7.8 percent for the month and 8.1 percent year-to-date.

The first shipment of Ford Mustangs left a US port on Thursday, bound for Europe and de Waard is hopeful they will be in dealerships

by July 4.

Almost 5,000 are already spoken for and while Europe is getting an ample allotment, the sales chief said there is always the possibility demand will exceed supply and with sales strong in the US as well, he doubts he could get more than his allotment.

Also launching now are the new S-Max, Galaxy and C-Max which are popular vehicles in Europe, And dealers will soon get their first Mondeo Vignale which is a high-end version of the mid-size sedan, similar to a Lincoln in the US The Vignale series will continue to roll out with an S-Max Vignale next year and more models to follow, de Waard said.

In May Ford’s sales increase was led by the new Mondeo (up 75 percent); the EcoSport small crossover and the Transit commercial van family. TNS

WORLD COMPANIES Etihad M&A on hold to focus on loyalty plan

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TIHAD Airways said it’s seeking partners from the retail, finance and telecommunications industries in order to transform its frequent-flier plan into a wider-ranging lifestyle program.

The Gulf carrier wants to develop a loyalty model that differs from those at rival operators in extending outside the travel sector, Chief Commercial Officer Peter Baumgartner said in Edin-

burgh, where the airline began flying last week.

“We want to develop the most relevant loyalty offering in the world, where one card does all,” Baumgartner said in an interview. “That means going beyond partnerships with a travel aspect. It might mean your local grocery shop, your telecoms or roaming provider, financial services and banks.”

Etihad has spent almost $500 million buying

control of frequent-flier programs at carriers in German, India and Italy, in which it also has taken equity stakes and provides management input.

The lifestyle plan, which will make the loyalty concept a revenue generator as well as a marketing tool, should be announced in “a couple of months” and comes as there are no immediate plans to buy additional airline stakes, Baumgartner said. Bloomberg News

B2 3

BRAZIL ECONOMIC CRISIS The World BusinessMirror

B3-2 Tuesday, June 16, 2015

briefs 2 TEENS INJURED IN SHARK ATTACKS IN NORTH CAROLINA

OAK ISLAND, North Carolina— Two teenagers were seriously injured in two separate shark attacks in the same North Carolina town on Sunday, terrifying beachgoers and prompting one shocked witness to compare the scene to the movie Jaws. Oak Island Mayor Betty Wallace told WECT6 the first victim, a girl, lost part of her arm and could lose her left leg. Just over an hour later, a 16-year-old boy also was attacked by a shark and was airlifted to a hospital, Wallace said. He lost an arm. “I saw someone carry this girl [out of the water] and people were swarming around and trying to help,” Steve Bouser, who was just beginning his week-long beach vacation, told the Associated Press. “It was quite terrible.” AP

Amid Brazil’s economic crisis, consumers struggle with debt

EXFIRST LADY TO MEXICO’S PRESIDENCY IN 2018

MEXICO CITY—The wife of Mexico’s former President Felipe Calderon says she intends to run for president in the 2018 election. In a video posted on social media on Sunday, Margarita Zabala said she wants to build a national movement of citizens who have lost faith with politicians. Zabala has been an activist in the conservative National Action Party, or PAN, of her husband, who ended his six-year term on December 1, 2012. PAN is the main opposition party, but it lost seats in June 7 midterm elections and is facing a process of internal restructuring and a leadership overhaul. AP

MADRID COUNCILOR CRITICIZED FOR TWITTER HOLOCAUST JOKE

MADRID—Madrid’s newly appointed leftist culture councilor has come under heavy criticism for posting a joke on Twitter about the Holocaust four years ago. Guillermo Zapata on Sunday apologized for the tweets, which he said were not intended to be anti-Semitic, but as comments on the cruelty that jokes sometimes can reflect. He added that the tweets, which he sent while working as a scriptwriter and novelist in 2011, had been taken out of context by political opponents. Spain’s conservative Popular Party and Socialists called for Zapata to be fired from Mayor Manuela Carmena’s city hall government.

Carmena, backed by the radical Podemos party, was sworn in Sunday to lead Madrid’s first left-wing city government in 24 years and relies on coalition support from the Socialists to stay in power. AP

A WOMAN is seen through the window of a store as she looks at dresses for sale in Rio de Janeiro, Brazil. AP/FELIPE DANA

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IO DE JANEIRO—Francisco Xavier emerges from a payday loan shop, his brow more furrowed with worry than when he entered. His loan request was denied, and he has no idea how he is going to pay out-of-control bills, including credit-card payments, that gobble up nearly half his monthly income.

Xavier, a taxi driver, is among the rapidly burgeoning ranks of “super debtors”—people who rose into the middle class during Brazil’s nearly decadelong boom, but now find themselves drowning in debt as Latin America’s largest economy stalls, causing inflation to heat up and unemployment to rise.

Brazil’s top credit information bureaus estimate that as of April, more than 55 million Brazilians were behind on paying off credit cards or loans. That’s 37 percent of the adult population in a country of about 200 million people, and the numbers are rising.

According to the SPC credit information bureau, the lists have grown by an estimated 700,000 people since January, when the top credit bureaus began working together on combined lists for the first time.

Soraia Panella, coordinator of customer service at Rio de Janeiro’s Procon consumer protection agency, said she routinely sees people living so close to the edge financially that

any sudden misfortune can plunge them into a hole from which it’s nearly impossible to climb out.

“The majority of people who come here break down in tears and cry and cry. They’re ashamed and feel they have no way out,” said Panella, whose team helps about 450 debtors consolidate their payments every day. “I think it’s going to get much worse than it already is.”

After peaking at a 7.5-percent annual growth in 2010, Brazil’s economy has steadily retreated. And this year, it contracted 0.2 percent in the first quarter and is forecast to fall more than 1 percent for the full year.

The boom was fueled partly by China’s hunger for Brazilian commodities, such as iron ore and soy.

But the left-leaning governments of President Dilma Rousseff and especially her predecessor, Luiz Inacio Lula da Silva, also relied heavily on consumers for growth for about a decade. Among other things, the government used tax breaks to encourage car sales, ended a tax on

big-ticket household goods, slashed interest rates and gave incentives to banks to expand credit for lowermiddle class Brazilians.

Domestic consumption, which in 2004 accounted for 53 percent of Brazil’s gross domestic product (GDP), rose to 63 percent of the total in 2014. Consumers newly armed with credit cards and tax-break incentives snapped up flat-screen TVs, refrigerators, motor scooters and compact cars.

With access to easy credit and a tradition of paying for small-ticket items like tennis shoes or even groceries over several monthly instalments, Brazilian consumers racked up such large bills that nearly 30 percent of disposable income now goes to servicing debt, the Central Bank says.

By contrast, consumer debt servicing in the US accounts for just over 5 percent of disposable income, according to the Federal Reserve.

That debt threatens to push some of the new middle class back into the ranks of the poor.

The government’s Agencia Brasil news agency reported late last year that the number of people in extreme poverty rose in 2013 for the first time in a decade, increasing 3.5 percent over the previous year. Figures for 2014 are not yet available.

Much of the problem, analysts say, lies in credit cards, which have been aggressively marketed to lowerincome consumers.

Interest rates on Brazilian credit cards are astronomical, averaging around 200 percent a year, compared to about 12 percent in the US. Banks say the high rates are justified because they lack data on individuals’

credit ratings, while critics contend banks are simply gouging customers.

Whatever the cause, it means that one late payment can easily snowball into a giant debt.

“Credit cards are my temptation,” said Xavier, the taxi driver.

Appliances, furnishings for his new apartment and impulse splurging on things like clothing and perfume led to credit-card payments that eat up half his roughly $2,000 monthly income.

After rent and support for his four kids, Xavier said he is left with nearly nothing but regret at having the cards.

“I wish I’d have cut them into bits,” he said. Years of hyperinflation in the early 1990s habituated Brazilians such as Xavier to spend immediately lest they see the value of their money shrink overnight.

“Consumers in Brazil live on the limit,” said the SPC’s chief economist, Marcela Kawauti. “They spend everything they have every month ...and don’t worry too much if they don’t have anything to fall back on if something happens.”

Rio resident Paulo Dutra Alves, whose only income is a $254 a month disability check due to a bad back, said his quality of life is crumbling.

After doctors diagnosed a hernia, Alves turned to a payday loan shop to pay for new medicines and cover back rent. With interest, that $540 loan has ballooned to $1,325 in just a few months. He has no idea how he’ll pay it back and fears he’ll soon find himself living on the street.

“I moved into a cheaper place, I stopped taking the bus and I’ve even cut down on food,” Alves said.

“There’s nowhere else I can cut.” AP

Sudan’s president prevented from leaving South Africa J

OHANNESBURG—A South African judge on Sunday ordered authorities to prevent Sudanese President Omar al-Bashir, who was in South Africa for an African Union (AU) summit, from leaving the country because of an international order for his arrest.

Sudanese officials, however, said al-Bashir had been assured by the South African government that he would be welcome during his visit.

The charges against al-Bashir, who took power in a 1989 coup, stem from reported atrocities in the conflict in Darfur, in which 300,000 people were killed and 2 million displaced in a government campaign, according to United Nations figures.

Al-Bashir appeared for a group photo with other African leaders at the summit in Johannesburg on Sunday, wearing a blue three-piece suit, a tie and a smile as cameras flashed. The conference was scheduled to end on Monday.

Rabie Abdel-Attie, a senior member of al-Bashir’s National Congress Party, said in Khartoum that al-Bashir will stay at the meeting “until it ends.”

South African Judge Hans Fabricius instructed authorities to prevent al-Bashir from leaving the country because he is wanted by the International Criminal Court (ICC).

He said border officials should enforce his decision pending a hearing on whether al-Bashir should be arrested, according to Caroline James, a lawyer with the Southern Africa Litigation Centre rights group. A court is expected to rule on Monday if al-Bashir should be handed over to the ICC to face charges of alleged genocide and human rights abuses.

Kamal Ismail, the Sudanese state minister for foreign affairs, told reporters in Khartoum that al-Bashir had received assurances from the South African government prior to

SUDANESE President Omar al-Bashi (right) stands with other African leaders during a photo op at the African Union summit in Johannesburg on Sunday. AP/SHIRAAZ MOHAMED

his visit that he would be welcome and was expected to return to Sudan on schedule.

He said the court order seeking to prevent al-Bashir from leaving South Africa “has nothing to do with the reality on the ground there,” adding that “until now things are normal and there is no threat to the life of the president of the republic.”

The African National Congress, South Africa’s ruling party, said the South African government granted immunity “for all [summit] participants as part of the international norms for countries hosting such gathering of the AU or even the UN.” The party urged the government to challenge the court order,

saying African and Eastern European countries “continue to unjustifiably bear the brunt of the decisions of the ICC.” Even before Sunday’s events, the AU had asked the ICC to stop proceedings against sitting presidents and said it will not compel any member states to arrest a leader on behalf of the court. Al-Bashir has traveled abroad before and local authorities had not detained him at the behest of the ICC, which is based in The Hague, Netherlands.

ICC prosecutor Fatou Bensouda has said South Africa is under a legal obligation to arrest al-Bashir and surrender him to the court. Her office has been in touch with South African authorities on the Sudanese president’s reported visit.

If al-Bashir is not arrested, the matter will be reported to the court’s assembly of states and the UN Security Council, which first referred the case of Sudan’s Darfur region to the ICC in 2005, she said. AP

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| TUESDAY, JUNE 16, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

STEPHEN CURRY URRY (center) sparks Golden State Warriors’ fourth-quarter outburst to take a 3-2 lead in the finals against the Cleveland Cavaliers. AP

WARRIORS’ LASTQUARTER SURGE, LED BY CURRY URRY, PUTS THEM ON BRINK

ONE MORE WIN B M B

LEBRON JAMES posts a triple-double game but can’t carry his Cleveland Cavaliers in Game Five. AP

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Los Angeles Times

AKLAND, California—A mere 48 minutes could separate the Golden State Warriors from 40 years of heartbreak.

A fourth-quarter burst pushed them to a 104-91 victory on Sunday over the Cleveland Cavaliers and ohso-close to a National Basketball Association (NBA) championship.

Yellow confetti drizzled from the ceiling at Oracle Arena as Warriors fans snapped pictures from cell phones, knowing the series could end on Tuesday with Game Six in Cleveland.

How badly do the Warriors want it, their first championship since 1975?

“What’s the best way to say ‘really bad’?” said Warriors guard Stephen Curry, emerging from a game of small ball versus small ball with 37 points.

Curry, though, felt symptoms of dehydration after leaving his postgame interview with reporters. He had to consume extra fluids and relaxed by watching TV in the locker room, according to Warriors Spokesman Raymond Ridder.

LeBron James had 40 points, 14 rebounds and 11 assists as the Cavaliers fell further from winning the first championship in their 45-year history.

James’s effort was all but overshadowed by immediate second-

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HISINAU, Moldova—Moldovans voted in local elections on Sunday which are seen as a test of whether the country is committed to European integration or will move closer to Russia’s orbit. The elections in the former Soviet republic come two days after pro-European Prime Minister Chiril Gaburici resigned amid questions about the authenticity of his high-school diploma and university degree.

In the mayoral race in the capital, Chisinau, early results with about a fifth of the votes counted showed Zinaida Greceanai, the candidate of the pro-Russian Socialists, leading with 41 percent while Dorin Chirtoaca, the pro-European mayor since 2007, had 34 percent.

Turnout was just under 49 percent, less than the number of people who voted in the 2011 local elections. Early returns were announced late Sunday, with near-final results expected on Monday.

About 2.8 million voters were eligible to choose mayors and local councils. A runoff is slated for June 28 in cases where no candidate secures more than 50 percent of the vote.

Gaburici, a businessman who headed a minority government, had criticized a probe into the disappearance of $1.5 billion from three Moldovan banks before the November parliamentary elections.

Analysts say anger over the missing money may be reflected in the local elections, giving a boost to proMoscow parties against their proEuropean rivals. Moldova signed an association agreement with the European Union in 2014, angering Russia which then placed an embargo on imports of some fruits and vegetables from Moldova. AP

Community questions US officer’s use of deadly force

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WORLD

ONE MORE WIN Sports BusinessMirror

Moldovans choose between Europe, Russia in local elections

OUISVILLE, Kentucky— Community activists gathered on Sunday to lament that a police officer turned first to his gun, rather than use nonlethal force, in the killing of a 35-year-old African immigrant.

Deng Manyoun, 35, was shot twice by Officer Nathan Blanford on Saturday afternoon and died in a hospital, sparking a debate over officers’ use of deadly force and the simmering racial tension between the police and the communities they serve.

Louisville Metro Police Chief Steve Conrad on Sunday defended the shooting, and promised a thorough and transparent investigation.

He released a video of the incident, captured on a surveillance camera from a nearby store.

Police could not say which country in Africa Manyoun came from. Neighbors said they believed he was from Sudan but were not entirely sure because he did not speak English.

Witnesses told various media on Saturday that the officer approached Manyoun aggressively, his hand already on his gun, and alleged that Manyoun never swung the pole at him. But the video released on Sunday refutes that: the officer stands still, his arms at his sides, as Manyoun waves his hands around. Manyoun turns and storms away, out of the view of the camera.

Blanford starts to follow, talking into his radio, then stops suddenly and takes two steps back.

He draws his gun as the tip of the flag pole emerges in the corner of the video. AP

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In that period, the personal remittances notably slowed to an expansion averaging only 5.1 percent versus the year-ago growth averaging 6.5 percent, and a reflection of the decelerated growth rates the various countries that hosted the overseas Filipinos reported during the period.

The Philippine economy expanded 5.2 percent in the first quarter of the year.

So-called cash remittances, the kind that gets processed by the banking system, showed a more pronounced slowdown averaging only 5.4 percent in the first four months, or only $7.81 billion from year-ago growth averaging 6.1 percent, or $7.41 billion.

The practical slowdown in remittances, important because the liquidity they generate fuel consumption across the $272-billion economy, proved not palpable on a month-on-month basis, the number having broadly steadied to $2.23 billion this year, from $2.13 billion last year, in terms of personal remittances.

B A I Newsday

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AKLAND, California—As great as these National Basketball Association (NBA) Finals have been, it was missing one game when league Most Valuable Player (MVP) Steph Curry and best player on the planet LeBron James raised the levels of their play and everyone around them on the same night.

It happened in Game Five on Sunday night as Curry and James played brilliantly, and tried to will their teams to the victory. Curry was successful in his quest. He scored 37 points, and help put the Warriors one win from their first championship in 40 years.

The Warriors withstood James’s 40-point game and triple-double and handed the Cavaliers a 104-91 loss at Oracle Arena. Golden State leads the series 3-2 and can close it out in Game Six on Tuesday in Cleveland. If there is a Game Seven, it would be back here on Friday night.

“We’re not getting ahead of ourselves,” Curry said. “In the locker room, it was the exact same after a regular-season win. But we know the sense of urgency of the moment.”

Curry had his best game of the series at the perfect time. He scored 17 points in the fourth quarter. Curry tallied 15 after a James three-pointer gave the Cavaliers a one-point lead with 7:47 to go. He shot 13-for-23 overall, including seven-for-13 from three.

Warriors Coach Steve Kerr envisioned it after the Cavaliers matched down to Golden State and played small for most of the night.

“I thought, ‘This is Steph’s night,’” Kerr said. “This is going to be a big one for him because he has all that room. He took over the game down the stretch and was fantastic.”

Andre Iguodala made some big baskets in the fourth, and had 14 points, eight rebounds and seven assists. The Warriors also outhustled the Cavaliers late. They out-rebounded Cleveland 14-7 in the fourth, including two offensive boards on missed free throws on the same position.

James played 45 minutes, and had his second triple-double of the series: 40 points, 14 rebounds and 11 assists. James shot 15-for-34 from the field. He can’t do much more, but he said he had to or else.

“We don’t want them celebrating at all whether it’s on our home floor or their own floor,” James said. “I feel confident.”

Tristan Thompson scored 19 and J.R. Smith, who sparked the Cavaliers in the first half, had 14, all of them before halftime. Smith shot four-for-14 from three, but missed his last seven from deep. He was 0-for-eight from three in Game Four.

It was a tight game in the fourth when both superstars tried to put their respective teams on their backs.

James gave the Cavaliers their last lead of the night on a long three-pointer. On the Warriors’ next possession, Curry drilled a step-back three. Then after James missed, Klay Thompson, who has been mostly quiet this series, nailed a long three-pointer to give Golden State an 85-80 lead.

The Cavaliers had a chance to tie with 4:20 left, but James missed inside. Iguodala scored the next five points on a three-pointer and tough double-clutch to make it 91-84 with 3:45 left.

Then Curry took over. He scored on a drive to the basket, and gave the Warriors a 96-86 lead with a three-pointer with 2:44 left. Curry crossed over Matthew Dellavedova twice, dribbling once behind his back and then in front before stepping back and hitting the three.

After that, the Cavaliers resorted to intentionally fouling Iguodala. It was effective. He shot one-of-six from the line. But in that time, the Cavaliers made just one basket—a James’s three-pointer.

With the score 97-89, Curry put it away with another three-pointer with 1:22 remaining.

“Not a lot you can do, honestly,” Cavs Coach David Blatt said. “He made some terrific shots.”

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Cash remittances month-on month also broadly steadied to $2.01 billion in April from $1.92 billion last year. The cash-remittance growth normalized in April this year after posting volatile expansion rates in the first three months of 2015, according to the Bangko Sentral ng Pilipinas (BSP).

Data from the central bank released on Monday showed that the growth of overseas Filipino worker remittances hit 5.1 percent in April this year—expanding from the $2.128-billion remittances sent home in April 2014 to $2.233 billion sent in April this year.

This was a slowdown from rather rare double-digit monthly growth surge in remittances reported in March this year totaling $2.326 billion, or growth of 11.3 percent from the same month last year.

April ’s remittance inf lows brought the total four-month remittance flows to $7.807 billion.

This was 5.4 percent higher than the $7.409 billion remittance inflows reported for the period last year.

S “R,”  A

MVP only has three other PPP deals in mind after Calax win

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LEBRON GETS THE NUMBERS, CURRY THE WIN

SPORTS ROCKIN’ OAKLAND

ASEAN SINGLE AVIATION MARKET

TALKING REGIONAL BUT ACTING NATIONAL

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GOOGLE BUY NG TW TTER? Editor: Dionisio L. Pelayo• corp@businessmirror.com.ph

SPECIAL REPORT

B B  C

ONGLOMER AT E Met ro Pac f c Investments Corp (MPIC) w be “se ect ve” n vy ng for pro ects under the state s Pub c-Pr vate Partnersh p (PPP) Program express ng nterest non y three more pro ects after t won the Cav te-Laguna Expressway (Ca ax) ear er th s month by offer ng a very arge sum of prem um payment to the government MPICCha rmanManue V Pangnan sa d n a recent nterv ew that h scompanyw notbepart c pat ng na theauct onsforkey nfrastructure pro ects as h s f rm has a ready set ts eyes on three spec f c dea s

PESO EXCHANGE RATES ■ US 45.0390

PANG L NAN “We be e e ve we e no go ng o pa pa e n a The e a e h ee a ea PPP p o e we e n e e ed n ”

“We’ll be selective; we’re not going to participate in all. There are three areas, PPP projects, we’re interested in,” he said.

THE N noy Aqu no n e na ona A po he ma n n e na ona ga eway o he Ph pp ne Lo a ed a ong he bo de be ween Pa ay and Pa añaque e abou 7 k ome e ou h o Man a C y and ou hwe o Maka C y he a po e ve he Na ona Cap a Reg on and nea by p ov n e W D A B L S M 

T

Se ond o h ee pa

HE current state of the country s nfrastructure—current y see ng sna -pace deve opment due to government underspend ng and the setbacks be ng faced by pr vate groups—w drag the Ph pp nes s growth potent a when the Asean S ng e Av at on Market (Asam) starts by end-2015 Th s s on top of the po cy constra nts w th regardtotheopen ngupofMan atoun m tedtraff c r ghts w th ts peers n the reg on as po cy-makers opt to ta k reg ona but act nat ona Wh e a r nes have been gear ng up for the upcom ng ntegrat on wh chbr ngsaboutst ffercompet t on and cheaper a rfares the government has yet to deve op much of the needed nfrastructure n the cap ta For starters the N noy Aqu no Internat ona A rport (Na a) has been burst ng at the seams s nce ast year resu t ng n numerous f ght cance at ons and de ays dur ng peak hours It has reached ts max mum capac ty of 35 m on passengers a year The Japan Internat ona Cooperat on Agency (J ca) has pred cted that t w reach the 37 78-m on passenger mark th s year The av at on hub s runways can on y hand e up to 44 takeoffs and and ngs per hour Its runways des gn—contrary to the para e ayout of other popu arcommerc a a rports— s ntersect ng hence t s m ted to one takeoff or and ng at a t me

Demand accord ng to severa reports and ana yses w cont nue to r se n the com ng years w th As a Pac f c cont nu ng to dom nate the wor d traff c n terms of revenues per k ometer In the Ph pp nes a one forecasts show that an average of 45 m on passengers w f ock to Man a n the next coup e of years But the country m ght as we b d good-bye to th s growth forecast f no ncrease n a rport capacty w be done n the short run Ph pp neA r nes(PAL)Pres dentJa meJ Baut sta sa d that wh e h s company s ready for the upcom ng ntergrat on the m tat on now es on the need for adequate nfrastructure “There s a need for more nfrastructure here n the Ph pp nes ” he sa d Nat ona Un vers ty of S ngapore Prof A an Tan agreed not ng that a rport capac ty s a ong-term ssue that needs to be addressed w th utmost v g ance and care “Infrastructure scruc a Man a sNa a ssos otconstra ned that new f ghts—not ust by fore gn a r nesbutPh pp necarr ersthemse ves—cannot be mounted ” he sa d n an e-ma

Beyond runways and terminals

CIVIL Aeronaut cs Board D rector Porven r P Porc uncu a noted that there are st s ots ava ab e at Man a s pr me av at on hub but these are the nonpeak-hour per ods—mean ng from 10 p m to 5 a m C   A

C  A

■ JAPAN 0.3651 ■ UK 70.1212 ■ HK 5.8094 ■ CHINA 7.2549 ■ SINGAPORE 33.5311 ■ AUSTRALIA 34.8815 ■ EU 50.7274 ■ SAUDI ARABIA 12.0104 Source: BSP (15 June 2015)

A2 Tuesday, June 16, 2015

BMReports BusinessMirror

Asean Single Aviation Market: Talking regional but acting national Continued from A1

“The limit in infrastructure—there is truth to it. But there are free slots outside the peak season. The issue on infrastructure in terms of airline operations is the slots. But the issue on infrastructure goes outside the perimeters of the airport complex,” he said.

Indeed, it is not only the airports that need to be improved and modernized, but roads also need to be properly paved for faster connectivity and better land transfers.

“I don’t want to limit myself to just the problems in the runway and the terminal. There is a gamut of air transport-related infrastructure that needs to be addressed. It relates to the whole experience of an air traveler,” the statesman said.

Commuters would attest that a commute via public transportation coming from Naia Terminal 3 to Makati Shangri-La Hotel will take at least two bus transfers of about an hour and a half and another 15 minutes of walking. According to traffic-management applications, a private vehicle coming from Naia Terminal 3 will have to travel roughly an hour just to arrive at Makati City’s central business district.

“In pertaining to infrastructure, you may have to think of a whole framework. If you are selling the Philippines as a prime tourism destination or a trade hub for business people, two hours of going to Makati’s central business district would be an issue,” he said.

Clark International Airport, Porciuncula said, could have been a better option.

“It can still accommodate a lot of flight,” he said. But airlines continue to refuse to increase their presence in the central part of Luzon, as the airport, he said while citing qualms from airline executives, is still not that accessible to the capital.

“Railway is very critical to marketing Clark. The majority of the traffic will remain in Manila because of Clark’s lack of connec-

tivity to Metro Manila, where most of the businesses are,” he added.

Currently, only a few airlines operate at the airport of the north. Its terminal is set to be expanded despite its limited operations.

—from the government to private sector to the general public.

“We need better communication between sectors, such as between transportation and infrastructure industries,” she added.

Regional airports also need attention

Solutions?

Another area that needs to be addressed, the aviation executive said, is the development of airport infrastructure in the provinces.

“Unfortunately, we also have a problem with our regional airports. They badly need infrastructure. It’s a good thing that Davao and Iloilo have been recently improved. But we need to look into our other air hubs in the regions, as they are big tourism destinations,” Porciuncula added.

Tourist spots such as Panglao in Bohol, Puerto Princesa in Palawan, and Laguindingan in Misamis Oriental are in dire need of improvements in terms of facilities.

The main gateway to Palawan, for one, needs to have a better terminal with functioning air-conditioning units. This is also the case with the airport in Bohol, currently found in Tagbilaran, about 22.6 kilometers away from a prime resort in the province.

“Infrastructure still needs to be really completed or even started in some areas. It is one of our major problems in terms of infrastructure development in the aviation sector,” Porciuncula said.

No need for grand airports

For AirAsia Philippines Chairman Marianne M. Hontiveros, the government does not need to be all that grand in developing aviation hubs.

“What we need are infrastructure that meet the needs of today’s travelers,” she said. “We do not need grand airports.”

Hontiveros added that this could be addressed by better communication among all the stakeholders of each Asean member-state

The government has been devising ways to address these problems—both in Metro Manila and in the provinces.

The national government and the pack of Transportation Secretary Joseph Emilio A. Abaya are currently working toward addressing these pressing needs by tapping the private sector for its infrastructure-development plans.

To address the need for domestic connectivity, the government auctioned off a P108.2billion project that aims to privatize five key airports around the country. The deal is divided into two packages.

The first package consists of the BacolodSilay Airport (P20.26 billion) and Iloilo Airport (P30.40 billion), while the second bundle is composed of the New Bohol or Panglao Airport (P2.34 billion); Laguindingan Airport (P14.62 billion) and Davao Airport (P40.57 billion).

For Manila, the government has laid out several plans to develop the Naia. One is for the government to construct a new terminal somewhere near C-5 Road, which is the fifth beltway in Manila.

Another plan is to auction off the operations and maintenance of the Naia to tap the expertise of foreign airport operators to improve the services at the aging aviation hub.

The deal will also involve the redevelopment of the four terminals of the decades-old airport.

But the ultimate solution, according to Abaya, is for the government to build a new airport somewhere outside the current Naia Complex in Pasay City.

Jica had proposed that the new international gateway be constructed in Sangely Point in Cavite to meet the parameters set by the trans-

portation agency. The future airport will boast of four runways, which can handle 700,000 aircraft movements per year. It will have a rated capacity of 130 million passengers annually.

The deal is expected to be implemented under the government’s key infrastructure program, mixed with funding from official development assistance.

But the multibillion-dollar contract to construct the said airport will not see itself in the auction block during this administration’s reign, as this critical deal has yet to be approved by key committees under the National Economic and Development Authority (Neda).

Abaya admitted that his office now lacks the needed time to bid out the airport-construction project within the term of President Aquino, but his hopes are still high that this administration could still aid the next in resolving the problems of the decades-old Naia.

The least that he could do, the transport chief said, is to get the $11-billion project approved by the several bodies under Neda.

“What we could do for whoever will replace us is to get a Neda Board approval and make clear the direction of the government,” he said.

‘Waiting for too long’

But it will take the government at least 10 years to construct all these, Porciuncula said.

“It takes about 10 years to have an airport in place. Imagine how many slots are remaining in the nonpeak hours at the Naia. Clark needs a lot of improvement in terms of connectivity via railway to entice airlines to add or transfer more flights to Clark. The railway also takes five years to develop,” he said.

He admitted that there is a pressing need for greater investments in infrastructure to keep pace with the growth that will come with the Asam. “The problem is our infrastructure is waiting for a lot of improvements,” he said. “The government has to really move a lot.” To be continued

news@businessmirror.com.ph

Remittances. . .

Continued from A1

Cash remittances from land-based OFWs hit $5.9 billion in the first four months of the year—growing by 5.3 percent from last year while sea-based Filipino migrant workers hit $1.9 billion—or an expansion of 5.6 percent.

The major sources of cash remittances were the Untied States, Saudi Arabia, the Untied Arab Emirates (UAE), the United Kingdom, Singapore, Japan, Hong Kong and Canada.

The four-month remittance growth was also within the 5-percent expansion anticipated by the economic managers this year.

The central bank said the steady demand for skilled Filipino manpower overseas provided support for the continued growth in remittance flows.

The BSP said preliminary data from the Philippine Overseas Employment Administration show that of the total approved 310,727 job orders for the January-to-April 2015 period, 33.8 percent were processed job orders intended for service, production, and professional, technical and related workers in Saudi Arabia, Kuwait, Qatar, Taiwan, and the UAE. “In addition, the continued efforts of bank and nonbank remittance service providers to expand their international and domestic market coverage, and introduce innovations in financial products and services in the remittance market contributed to the sustained inflow of remittances,” the BSP said.

Personal remittances—or all current transfers of Filipino migrant workers whether in cash or in kind—grew by 4.9 percent year-on-year in April 2015 to $2.2 billion.

news@businessmirror.com.ph

The Nation BusinessMirror

Local execs told to protect school kids from smoking

Govt losing war vs drugs–Duterte

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AVAO City Mayor Rodrigo Duterte warned over the weekend that the Philippines is losing the war against illegal drugs because even law-enforcement officers are already involved in the drug trade.

By Claudeth Mocon-Ciriaco Correspondent

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HE New Vois Association of the Philippines (Nvap) has called on local governments across the country to take a more active role in protecting schoolchildren from smoking.

Nvap President Emer Rojas said local governments must be at the forefront of the fight against smoking if they are to prevent the youth from being the “replacement smokers.”

“It is the inherent responsibility of [the] government to promote public health and nothing is more important than protecting the youth against the preventable diseases caused by smoking,” Rojas said.

One way to protect the youth, Rojas said, is by ensuring that there are no tobacco products being sold near schools.

“The law prohibits selling of tobacco products within the school’s vicinity. This must be strictly enforced if they are to stop students from smoking,” Rojas said.

Section 10 of the Republic Act (RA) 9211, or the Tobacco Regulation Act of 2003, states that the sale of tobacco products within 100 meters from the school perimeter is prohibited.

In addition, Rojas pointed at the significance of local governments banning tobacco advertising and promotions in stores near schools.

Section 17 of RA 9211 provides that outdoor advertisements shall not be placed on billboards, wall murals or transport stops, or stations which are within 100 meters from any point of the perimeter of a school.

The Tobacco Atlas data shows that 24 million Filipinos are exposed to tobacco smoke on a daily basis. It also estimates that close to 90,000 annual deaths are due to smoking-induced causes like cancer, stroke, and cardiovascular and respiratory ailments in the Philippines.

Duterte said that unless the drugs problem is addressed the young Filipinos today could end up a “damaged generation.”

“The country’s drugs situation has reached a tipping point and if we could not stop the drug trade, the Philippines could become a narco state,” he said.

Duterte, who is about to conclude his nationwide federalism advocacy which brought him to many regions in the country, said the drugs prob-

lem was brought up in almost all of the areas he visited.

“There were areas where I received reports that not only were law-enforcement officers involved in the the drugs trade, but also local political leaders,” he said.

Duterte also added that while there are local government areas in the country which have launched serious campaign against the drugs problem, their efforts are confined within their political boundaries.

“Their problem is the fact that drugs continue to come in from neighboring areas where these are manufactured,” he said.

“There has to be synchronized national effort to really confront the drugs problem. That’s the only way to neutralize the drugs menace,” Duterte said.

A recent report made by the Philippine Drug Enforcement Agency (PDEA) confirmed Duterte’s assessment of the serious drugs problem in the country.

Earlier, Pdea reported that more than 8,000 barangays in the country are plagued with the drug menace.

Pdea Director General Arturo Cacdac Jr. said that based on its consolidated data gathered from operational reports and other lawenforcement agencies, the Pdea said around 20.51 percent, or 8,629 villages out of the 42,065 barangays nationwide, have drug-related cases.

Palace sewing up intl support in case against China’s destructive reclamation at WPS

Smoking cessation clinics

ANTISMOKING advocates, meanwhile, said national and local leaders should exercise political will to prevent the spread of the smoking epidemic in the Philippines.

They said that aside from strictly implementing the law against smoking in public places, there is a need to put up smoking cessation clinics to help those smokers quit the habit.

Anthony Leachon, former president of the Philippine College of Physicians, said smoking is an addiction that takes more than just simple willpower to abandon.

Leachon also said that there is a need to give the antismoking law more teeth.

“Congress should enact a law that will impose stiffer penalty against violators of no-smoking law. Even local governments should pass ordinances to stop smoking addiction,” he said.

According to Leachon, smoking is not just a habit, but an add iction which needs to be stopped. To do this, he said Congress should create a more smoking-f ree env ironment, where smoking is totally prohibited.

For those already addicted to smoking, he said there is a need to establish smoking cessation clinics where patients can seek professional help on how to stop smoking.

Editor: Dionisio L. Pelayo • Tuesday, June 16, 2015 A3

By Butch Fernandez & Recto Mercene

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HE Aquino administration is stepping up efforts to sew up international support for efforts to arrest an environmental crisis caused by continuing Chinese reclamation projects on the West Philippine Sea (WPS), with damage to ecosystems initially estimated at $280 million.

Presidential Spokesman Edwin Lacierda confirmed on Monday that the government had cited these serious concerns at the recent meeting of State Parties to the United Nations Convention on the Law of the Sea (Unclos) called to take up the environmental crisis caused by Chinese reclamation in the WPS. Lacierda, likewise, affirmed that the Palace was backing urgent environmntal interventions to arrest the continued degradation of areas by affected by Chinese reclamation projects, even as the Philippine government’s diplomatic case is still pending.

“The Philippine government has highlighted environmental degradation created by the reclamation activities in order to call the attention of the international community to the adverse effects to the WPS environment,” Lacierda said.

He indicated that the Palace expects the environment degradation issue would help government enlist wider international support for its case against China’s environmentally destructive reclamation projects in areas well within established Philippine borders.

“Recognizing that the issue of environment is an issue which all countries can find common ground with and is not strictly a matter merely between two countries, the community

of nations must be made aware of the negative consequences of a unilateral action by one country,” he said, adding: “After all, we are part of one global village.”

National Scientist Angel Alcala, speaking at a recent forum in Palawan, also warned that “a fishery crisis was a distinct peril” ensuing from the Chinese reclamation projects that would “affect not just the Philippines but China and Southeast Asia.”

Adiz

IT is inevitable that China will establish an air defense identification zone (Adiz), as soon as its completes construction of its facilities in the seven reclaimed islands on the WPS. This is the prediction of Seair International President Avelino Zapana, who said: “I think they will, or their control would be weakened by intrusions.” Once an Adiz is in place, all flights intending to cross the area covered, would have to notify the Chinese, which can either approve or deny it, according Zapanta.

In an earlier statement, Adm. Sun Jianguo, deputy chief of staff of the People’s Liberation Army Navy said China will base its decision on establishing an Adiz around disputed waters in the South China Sea on its assessment of the security situation.

Jianguo told a regional security forum that China’s actions are peaceful and legitimate, calling on other countries to stop trying to “sow discord” over the matter.

“There is no reason for people to play up this issue in the South China Sea,” Sun said at the Shangri-La Dialogue in Singapore, adding that an Adiz depends on any threats to air or maritime security.

“Metro Manila has the highest rate of being drug-affected with 92.10 percent of the region’s barangays affected, followed by Region 4A [Southern Tagalog] at 33.78 percent,” the newspaper report said.

“Methamphetamine hydrochloride, or shabu, and marijuana remain the most abused illegal drugs in the Philippines. Based on 2014 arrest data, 88.78 percent involved the seizure of shabu, while 8.86 percent covered the confiscation of marijuana. Dangerous drugs such as cocaine, ecstasy, ephedrine, “fly-high” and others constitute the 2.36 percent of the drug-related arrests,” Cacdac said.

Duterte said the government must exert all efforts to protect the Filipino children from dangerous drugs.

“Once your child is hooked on drugs, you lose him forever,” Duterte once warned saying that drugs like shabu damage the brain. Rene Acosta

Bongbong: Next president key to shift to federal form

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By Recto Mercene

EN. Ferdinand “Bongbong” R. Marcos Jr. thinks the move to change the form of government to the federal system has a good chance of succeeding if the next president would push for it through Charterchange (Cha-cha) early in his term.

Speaking at the “Gikan sa Masa, Para sa Masa” radio program hosted by Davao City Mayor Rodrigo Duterte, Marcos backed moves toward federalism, as the possible answer to socioeconomic and social problems plaguing the country, particularly Mindanao.

Duterte has been pushing for federalism as an alternative if Congress fails to pass the Bangsamoro basic law. Marcos is chairman of the Senate Committee on Local Government, the main committee tasked to deliberate on the proposed Basic Law for Bangsamoro Autonomous Region (BLBar).

However, Marcos had said the draft BLBar is flaw-ridden and vowed to prepare, instead a substitute bill that would address the issues raised against the proposed measure despite efforts of Malacañang to push for the passage of the bill without any changes.

“If the next president will do that [push for Charter change], he or she has to do it very early on...starts the process on the first year [of his term], not on the last. That would at least allay suspicions this is being done to extend his term. So that’s a possibility,” Marcos said.

The House of Representatives had tackled the proposal of Speaker Feliciano Belmonte Jr. to amend the Constitution and allow Congress to pass enabling laws lifting bans on ownership of land, businesses, schools and the media, but failed to put it to a vote before Congress adjourned sine die on June 10.

“I think they’re necessary. Not because the concept is wrong, but because the passage of time changed things and situations have changed so we have to adjust accordingly,” Marcos explained, when asked on his stand on Cha-cha.

However, he said speculations on the real agenda behind Charter change persists because there is no enabling law providing specific mechanics regulating the power of Congress to amend the Constitution acting as constituent assembly.

“I share the fear of the mayor that we do not know what will be taken up. Once the constituent assembly is called to order, any member of that constituent assembly can stand up and speak on any subject,” Marcos said.

Business group opposes Bautista’s nomination to Comelec

By Jovee Marie N. dela Cruz

A

BUSINESS group recently filed an opposition to the appointment of former P r e s i d e nt i a l Commission on bautista Good Government (PCGG) Chairman Andres Bautista as the Commission on Elections (Comelec) head.

In an eight-page opposition letter dated June 2, the Philippine Overseas Telecommunications Corp. (POTC) asked the Commission on Appointments (CA) to reconsider the appointment of Baustista by “determining his integrity, ability and fitness to lead a government agency and constitutional body such as the Comelec.”

The letter was signed by Lin I. Bildner, president and CEO of Philippine Communications Satellite Inc. and vice chairman of POTC; and Jose Maria Ozamiz, former director and chairman of the audit committee,

Philippine Communication Satellite Holdings Corp. (PHC).

The letter said that Bautista, as chairman of the PCGG from April 2010 to May 2015, demonstrated “egregious misconduct” against the 35-percent government-owned POTC, its 100-percent-owned subsidiary Philcomsat, and Philcomsat’s 80-percent-owned subsidiary PHC that “casts serious doubt, as to his integrity and ability to lead a government agency such as the Comelec.”

The letter also said that “Bautista’s misconduct, beginning with deliberate illegal machinations to obtain his position as director and chairman of POTC, began with his refusal to comply with prior PCGG resolution and directives from the Department of Justice (DOJ), the PCGG’s administrative superior, Bautista, without any justifiable basis, chose to ignore PCGG resolution 2007-024 dated September 4, 2007, that relinquished to the Department of Finance (DOF) that share certificate for the RP-owned 4,727 shares POTC, or 35 percent of its total shareholdings.”

The said PCGG resolution resulted from a final decision issued

by the Supreme Court (SC) in 2005 that upheld the validity of the 1996 Compromise Agreement executed by POTC private shareholder, Potenciano Ilusorio, on behalf of his group’s shareholdings in POTC and Philcomsat, on one hand, and the PCGG, on behalf of the republic.

Moreover, the letter said that the 2007 PCGG resolution requiring the PCGG to turn over to the DOF custody of the 4,727 POTC shares owned by the republic, was not implemented by the old PCGG under Camilo Sabio and, likewise, the “new” PCGG under Bautista’s direction, also refused to surrender its long-held jurisdiction over POTC-Philcomsat. “[But] it was not until the PCGG was chastised in a memorandum in 2010, signed by Justice Secretary Leila de Lima, specifically ordering Bautista to immediately implement its own Resolution 2007-024, by ceiling transferring POTC Stock Certificate 131 to the DOF, that Bautista reluctantly complied,” it added.

The letter also said, “Bautista has refused to accept the reality of this situation and instead has acted in contradiction to past PCGG resolutions, the DOJ memorandum,

which was sustained and reinforced by a subsequent DOJ opinion letter dated February 25, 2015 and the SC decisions.”

The opposition letter also said that Bautista used the DOF in order to get himself elected as a director on the POTC board.

It added that in September 2011, the POTC called for its annual stockholders’ meeting to elect the new set of directors and officers and the DOF, being the undisputed government agency tasked to represent the republic’s 35-percent shareholdings in both companies, was duly notified of the scheduled meeting.

“The DOF then issued a proxy nominating and appointing two persons as the DOF’s attorney in fact and proxy to vote the shares of there republic. The nominees were Karen Singson, then-DOF’s chief privatization officer and Baustista [who was then already chairman of the PCGG, but without his PCGG designation on the DOF proxy letter],” the letter said.

It also said that Singson and Bautista represent the Republic of the Philippines as the owner of the POTC shares was signed by then-Undersecretary John Sevilla, purportedly

as DOF’s officer in charge, although apparently, Finance Secretary Cesar V. Purisima was not on official leave.

The letter said that the considering the proxy issued by the DOF and with the rest of the POTC shareholders “believing that all were acting in good faith, Bautista was consequently elected and installed as one of the members of the POTC board of directors during the said meeting and as chairman of the board during the organizational meeting that followed.”

The letter added that “the day POTC meeting was conducted, Bautista’s cohort PCGG Commissioner Richard Amurao, recently named PCGG chairman to succeed Bautista in an apparently surreptitious and deceptive manner, suddenly submitted a PCGG resolution dated September 26, 2011, to the legal counsel of POTC, instead of giving it to the corporate secretary then present.”

Because of this, “the DOF undersecretary’s nomination of Bautista to the POTC board; the failure to disclose Bautista’s concurrent position as PCGG chairman; Bautista’s subsequent election as POTC director and his election as chairman of the POTC’s board—clearly render the intentions

of Bautista highly questionable.”

The letter said that Bautista election to the board of POTC directly contravened the Article 7 of the Constitution, which prohibits dual or multiple positions in the government.

“The position of Comelec chairman indeed entails crucial and serious responsibilities. Integrity and high morals of conduct are virtues that a person in this position should possess. However, based in how the new PCGG under Bautista has allowed the continuing damage to Philcomsat, while Bautista under-handedly got himself elected POTC director chairman, it would seem that this Comelec-chairman designate may be lacking in these qualities,” it said.

The letter also urged the CA to ask Baustista about “misconduct and the reasons which led him to insist in getting to our board, in the process twisting and disregarding previously issued PCGG resolutions, executive orders and SC decisions defying the laws and the Constitution. Surely, we all wish to be assured of Bautista’s competence and probity before his chairmanship in the Comelec is confirmed.”

Economy

A4 Tuesday, June 16, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Debt servicing up 6.3% in Q1 to P205.46 billion

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By David Cagahastian

ebt servicing made by the government for the first quarter of this year picked up by 6.3 percent, as amortization by the government on its principal loans increased during the first quarter as compared to the same period last year.

For the first quarter of 2015, the debt servicing made by the government amounted to P205.46 billion, or P12.23 billion higher than the debt

servicing made by the government in the same period in 2014, which amounted only to P193.23 billion.

The increase in the debt servic-

ing made by the government in the first quarter was due to the increase in the amortization on the principal debt, which amounted to P104.85 billion, as compared to amortization made in comparable periods in 2014, which amounted only to P90.10 billion.

Interest payments in the first quarter of 2015 amounted to P100.61 million, or lower than the interest payments made by the government in the first quarter of 2014, which amounted to P103.13 billion.

Also, the ratio of interest payments in relation to total expenditures of the government in the first quarter went down, with interest payments constituting only 20 per-

cent of the total government expenditures in the first quarter. In the first quarter of 2014, the interest payments constituted 21.37 percent of the total government expenditures for the said period.

This decline in the percentage of interest payments, in relation to the total government expenditures, is in line with the goal of the government to free up more cash for other projects that have economic impact, instead of merely using the money to pay for interest on its principal loans.

Of the total amortization made in the first quarter of 2015, P73.09 billion was paid to domestic creditors, while P31.76 billion was paid to foreign creditors.

Govt support crucial in sustaining IT-BPO growth

By Catherine N. Pillas

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he largest employmentgenerating industry, the information technology-business-process outsourcing (IT-BPO), is expecting government support to continue in the next administration, a factor critical to maintaining its growth momentum, said a top industry official.

Information Technology and Business Process Association of the Philippines (IBPAP) President and CEO Jose Mari Mercado said recently that government support will play a part in maintaining the 12-percent to 15-percent industry growth it has been enjoying.

“We expect to continue on a 12percent to 15-percent growth, and right now we are on track of our goal by 2020. I believe because we generate employment, the next administration will continue to support our industry,” Mercado said.

With government support in place, the industry can keep its goal of taking a 20-percent share, or some $50 billion, of the global industry’s revenues by 2020, estimated at $250 billion, he added.

The global IT-BPO industry has notched a compound annual growth rate (CAGR) of 5 percent to 7 percent from 2014, while the Philippines’s CAGR has been at a quicker 9 percent to 12 percent during the same period, according to consultancy firm Tholons.

Given this rapid growth, the Philippines is poised to take a fifth of global revenues. Part of the government support that IBPAP is keen on seeing is the creation of the Department of Information and Communications Technology (DICT), which will entail the the Department of Transportation and Communications to focus solely on transportation.

As proposed by several Senate bills, the DICT will be the head policymaking body for the ICT sector.

The IT-BPO remains one of the primary growth drivers of the economy.

It employed almost a million workers in 2014, the majority of which are in the contact-center sector.

Last year the industry earned $18.4 billion in revenues, an 18.7percent growth year-on-year, with employee count at almost a million.

This year the industry is eyeing a $21.3-billion revenue target and employment of 1.18 million workers.

The IT-BPO industry is currently crafting a road map with the government for 2020 as its current road map is only until 2016.

The industry road map will be sector-specific and will detail targets for voice, nonvoice and health management, among other sectors.

Under the present road map, revenues by 2016 is expected at $25 billion and employment at 1.3 million workers.

news@businessmirror.com.ph

MGB steps up drive for clean, eco-friendly mining practices

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he government i s ste p ping up the campaig n to teach smallsca le miners and enhance jasareno their capacities to process gold using more environment-friendly methods and technologies.

Director Leo Jasareno, of the Mines and Geosciences Bureau (MGB) of the Department of Environment and Natural Resources (DENR), said small-scale miners must refrain from using mercury, a heavy toxic metal that is harmful to both people and environment.

The use of mercury in small-scale mining was banned by the government with the signing of Executive Order 79, while the revised implementing rules and regulations of Republic Act 7076, otherwise known as People’s Small-Scale Mining Act, calls for the establishments of centralized custom mills within Minahang Bayan.

“This is one way of regulating small-scale mining—to address illegal mining,” he said.

He said in the next six months information, education and communication (IEC) campaign will target areas where small-scale mining is booming.

He said the MGB will start conducting training for smallscale miners next week in Agusan del Norte.

“We have already identified possible areas for Minahang Bayan,” he said, explaining the need for the MGB to step up the ongoing IEC campaign on mercury-free gold mining.

Through the MGB-Metallurgical Technology Division (MeTD), experts are to assist the processors in the design and construction of modular gold cyanidation plants, including tailings detoxification and storage facilities.

According to the DENR-MeTD, although there are promising results of recently concluded researches on alternative methods to amalgamation, some studies only produced high-value gravity concentrates, which, presently, are neither marketable nor “smeltable.”

The continuing studies aim to establish a method to extract the gold from the concentrates and produce marketable gold ore or bullion. For the meantime, modular gold cyanidation plants, or custom mills with appropriate environmental protection components, can be established to help the small-scale industry.

The MGB is currently reviewing 12 applications for Minahang Bayan for various locations in the country.

In March the MeTD assisted small-scale miners in the field of mineral processing and extractive metallurgy of gold in Sitio Masabong, Barangay Bayugan 3, Rosario, Agusan del Sur. Engr. Bernardo V. Bitanga, who acted as a technical resource person, taught members of the Masabong Village Small-Scale Mining Association, in simple language, the complex scientific techniques of processing gold.

The campaign, Jasareno said, will hopefully lead to the establishment of an environment-compliant and economically sound custom mill in preparation for the creation of a Minahang Bayan in the area.

briefs pacci lauds cars program approval

track repair

Workers rush to repair the railroad tracks of the Philippine National Railway at the Paco Station in Manila, even as the scheduled reopening of the commuter line was extended beyond the June 15 deadline on safety concerns. ALYSA SALEN

ECCP wants closer cooperation with LGUs to improve doing business at local level

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he European Chamber of Commerce of the Philippines (ECCP) wants closer cooperation with local government units (LGUs) to improve doing business in the local level.

The business group launched ECCP-LGU Business Forum, a new platform for European firms in the country to hold regular dialogues with local government officials to discuss LGU-related business issues, as well as to collaboratively work on sustainable and inclusive growth in provinces, cities and municipalities.

“It is time for the business sector to partner with LGUs. We realized that the business sector share common goals with LGUs. We both want

subsistence catch

Cavite, at dawn on Saturday. PNA

businesses to invest in localities. We both want local residents to find jobs in their localities so they do not have to migrate to urban areas. And we both want people to enjoy steady economic growth that is in pace or faster than the national growth,” ECCP President Michael Raeuber said.

“More business and LGU dialogues are needed to better understand their perspective and to also make them aware of the business perspective in addressing business issues,” Raeuber added.

The League of Provinces of the Philippines, League of Cities of the Philippines and the League of Municipalities of the Philippines were all opti-

mistic to have a regular dialogue and collaborate with the business group.

As the national government is doing reforms to enhance the investment climate in the country, various business groups, including the ECCP, want reforms from LGUs to further ease doing business in the local level and for LGUs to further attract more investments and jobs.

Among ECCP’s concerns in doing business in the LGU level were mostly red-tape related, including business permits and approvals, integrity issues, unclear policies and regulations, taxes, penalties and fees imposed by LGUs on businesses. PNA

An elderly fisherman with a boat paddle and the day’s catch in tow returns home after a fishing trip off the coast of Bacoor,

The Philippine Automotive Competitiveness Council Inc. (Pacci) welcomes the government’s approval of the Comprehensive Automotive Resurgence Strategy (CARS) Program, seeing a boost in competitiveness of small and medium enterprise (SME) automotive manufacturers.

“We laud the Aquino administration on the issuance of Executive Order 182. The program comes at an opportune time when SME development has become an important global agenda…. The participation of OEMs [original equipment manufacturers] in the CARS Program will drive the growth of SME automotive-parts manufacturers that account for over 90 percent of the local automotive supplier base,” said Feliciano L. Torres, chairman of Pacci, in a news statement released on Monday.

Torres said that with the approval of the program, the industry can also see an increase in employment and value-adding not just in automotive manufacturing, but also in related industries.

President Aquino recently signed the Department of Trade and Industry (DTI)-crafted CARS Program, which will dole out P27 billion worth of incentives over the course of six years to local manufacturers, in a bid to spur the local automotive industry.

The Board of Investments, an attached agency of the DTI, is expected to release the implementing rules and regulations of the CARS Program in July. Catherine N. Pillas

bill prescribes 12-year validity for vehicle car plates

The chairman of the House Committee on Metro Manila Development on Monday filed a measure requiring the Land Transportation Office (LTO) to change and issue new car plates only every 12 years to avoid unnecessary expenditures on motorvehicle owners.

House Bill 5888, or the proposed “License Plate Renewal/Replacement Act of 2015,” seeks to mandate the LTO to issue appropriate rules, regulations, standards and guidelines to justify the renewal and replacement of license plates of motor vehicles and their extension of the use and validity.

In filing the bill, Liberal Party Rep. Winston Castelo of the Third District of Quezon City took notice of the mounting motorists’ complaints on LTO’s inability to issue license motor plates to motor-vehicle owners and proposed a policy that limits motor-plate replacement to every 12 years.

“This shall break the pattern where new license plates are implemented every change of administration indicatively out of mere caprice, whim or for any political or economic reason,” Castelo said in the bill’s explanatory note.

He added that the bill shall also relieve the public of the burden of having to shell out hard-earned money to an unnecessary expenditure, otherwise, not subsidized by the government.

“Twelve years are quick to pass and will not even alter nor render the integrity of the materials or features in license plates questionable even beyond that period unless new developments [i.e., illegally replicated plates, security concerns] warrant,” Castelo said.

According to the lawmaker, this 12-year replacement schedule may also be the same as the renewal date for license plates or after which, the same are deemed as “dead,” explaining that his bill looks at 12 years as “the standard life span of a valid license plate of motor vehicles of all types in the country subject to extension as may be issued by appropriate agency of government.” Jovee Marie N. dela Cruz

Economy BusinessMirror

news@businessmirror.com.ph

Belmonte vows House passage of DICT bill in 16th Congress

By Jovee Marie N. dela Cruz

Secure your franchise, LTFRB tells TNC and TNVS operators

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T

he leadership of the House of Representatives has vowed to prioritize the passage of a bill seeking to create the Department of Information and Communications Technology (DICT) that shall be the primary government entity to plan, promote and help develop the information and communications technology (ICT) sector, and ensure reliable and cost-efficient communications facilities and other multi-media infrastructure and services in the country.

Speaker Feliciano Belmonte Jr., in a recent interview, said that the House Bill 4667 has been included on their list of top priorities, and will be passed before the 16th Congress ends in June next year.

The measure, currently under committee deliberations, seeks to promote the utilization of ICT as a vital tool for nation-building and economic growth that is government-enabled, private sector-led, citizen-centric and market-based.

The bill also aims to integrate the management of two diverse concerns, transportation and communications into one department which is the Department of Transportation and Communications (DOTC), and develop a Philippine ICT in accord with world-class standards.

According to the bill, the government shall prioritize the effective coordination and implementation of its national and local ICT and ICT-enabled services, programs, projects and other related initiatives and revitalize governmental institutions to achieve a streamlined and efficient structure that is responsive and attuned to national goals and objectives.

The department shall be headed by a secretary to be appointed by the President, subject to the confirmation of the Commission on Appointments. The President shall also appoint four undersecretaries and four assistant secretaries.

The bill also provides for the creation of a Council of Chief of Information Officers composed of 11 members with fixed terms in office with the secretary of the DICT as chairman. The council shall serve as coordinating body to assist the secretary in establishing policies, standards, rules and guidelines for the provision and other ICT e-governance initiatives.

The DICT’s powers and functions shall in-

By Lorenz S. Marasigan

he Land Transportation Franchising and Regulatory Board (LTFRB) is with working on Congress’s inquiry on the illegal” operations of transport network companies (TNCs) and transport network and vehicle services (TNVS) in Metro Manila.

The young thinker A boy appears to be in a deep thought —perhaps pondering on the logic of increasing gas prices amid a global oil glut—while

waiting for his ride. Local oil companies will raise fuel prices effective Tuesday dawn with gasoline at P1.05 more expensive per liter, while diesel price will be P0.15 more per liter. Nonie Reyes

clude, among others: Formulate, recommend and implement national policies and guidelines in the ICT sector that will promote wider use and development of ICT, and its applications, such as ecommerce, in coordination with the Department of Trade and Industry; represent and negotiate for Philippine interests on matters pertaining to ICT in international bodies; design, implement, and ensure the protection of an integrated government information and communications infrastructure development program that will coordinate all relevant government entities, taking into consideration, the inventory of existing and projected manpower, plans, programs, proposals, software and hardware, and the installed systems and programs; and administer and enforce all laws, standards, rules and regulations governing ICT.

There shall be an e-government fund to be appropriated annually under the General Appropriations Act, to be administered by the DICT, specifically to fund cross-agency government ICT projects which shall be used to support and cofinance projects that enable the government to expand its ability to conduct activities electronically and provide frontline services through the development and implementation of innovative uses of the Internet or other emerging technologies. The fund shall not be used to cover personal services expenditures.

On the transfer of agencies and personnel, the billprovidesthatthefollowingagenciesshallhereby be abolished, and their powers and functions, applicable funds and appropriations, records, equipment, property, and personnel transferred to the

DICT. These are the Commission on Information and Communications Technology; National Computer Center; and Telecommunications Office.

All offices, services, divisions, units and personnel not covered by the measure for transfer or absorption into the new DICT shall continue to perform their transportation-related functions and, therefore, shall be retained under the DOTC which shall hereby be renamed the Department of Transportation.

The National Telecommunications Commission (NTC) and the Philippine Postal Corp. shall hereby be attached to the DICT for policy and program coordination, and shall continue to operate and function in accordance with the charters, laws or orders creating them, insofar as they are not inconsistent with the act.

Population, disposable income briefs buoy retail market growth gas price up P1.05, diesel UP p0.15 on tuesday

By Roderick L. Abad

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Tuesday, June 16, 2015 A5

HE retail segment of the Philippine real-estate industry remains strong on the back of rising population and increasing disposable income of Filipinos.

“It should be reiterated that the retail market is the most resilient sector that bucked the trend even during the Asian financial crisis in the late 1990s, political crises in the early years of the new millennium, and the financial crunches of the global powerhouses in recent years,” said Pinnacle Real Estate Consulting Services Inc. in its Market Insight report released early this month.

“This resilience is due to the ever-growing Philippine population and its propensity to spend,” it added.

As per the most recent census officially performed by the National Statistics Office in 2010, the collective number of people across the archipelago stood at 92.34 million.

During the time, the net disposable income, or the total profit ready for spending,

by Filipinos was pegged at P11.040 billion.

The next national census is scheduled for 2015, according to the Commission on Population of the Philippines. The projected total population as of January 1 of this year is 100,730,309, thus making the country as the 12th most populated in the world.

Given this trend, developers and landlords continue to be creative in selling retail spaces in various ways.

SM, Robinsons and Puregold Groups continue to dominate the retail scene in the country, the study also showed. While all are aggressive in expanding the footprints of their malls and supermarkets nationwide, it is the convenience-store format that has seen a phenomenal growth in recent months, the report reveals.

In fact, the Ayala’s franchise of Japan-grown Family Mart already achieved the 100-mark branches in April.

Also, the Vista Land Group owned by the family of former Sen. Manuel B. Villar is expanding its “All Day Mart” platform.

Mixed-use development is still on the rise as developers integrate their retail platforms in their housing or community projects, the report said.

For instance, the latter’s “AllHome” stores will be opening six to seven stores annually over a five-year period located in their very own developments.

A community mall built by the joint venture of SM and Jollibee Groups recently opened in Roxas City, Capiz.

The first of the 100 CityMall branches it plans to establish nationwide in the next five years, it is seated on a 1.4-hectare prime property along Arnaldo Boulevard, with more than 7,000 square meters of retail space and is reported to be fully leased out.

Retail construction chain Wilcon Group, for its part, now has 33 stores all over the country. These include the 15-story Wilcon IT Hub in Pasong Tamo Extension that opened in March for the newest retail brand of the company occupying the first two ground floors, as well as office spaces available from the eighth to 15th levels.

In line with its goal of hitting more than 40 branches in the next two years, the company is opening three more stores before the end of 2015.

These will be in Villasis, Pangasinan, which is set to kick off in July; as well as in Santa Rosa, Laguna, and Bacoor, Cavite, by end of this year.

Not to be ignored, of course, is the proven formula of offering spaces to house a wide array of products on consignment basis, Pinnacle said.

With it, up to 90 percent of items for sale are actually supplied by tenants or consignees.

While retail players are raking on rents and/or even on “percentage of gross sales,” tenants or consignors still queue to secure mall or retail spaces as they provide the needed foot traffic.

Local gas prices at the pump increased on early Tuesday, reflecting the movements in the international petroleum market.

Effective 12:01 of June 16, the price of gasoline goes up by P1.05 per liter and P0.15 per liter for diesel and kerosene, respectively.

The oil firms that sent separate advisories for the price adjustment include Pilipinas Shell, Seaoil, Phoenix Petroleum and PTT Philippines. Other oil companies are expected to follow suit.

Eastern Petroleum Corp., meanwhile, hiked gasoline prices by only P0.90 per liter. “Eastern will increase the price of its products due to average hike of international price. The huge discount on June 12 due to the decision of Opec [Organization of Petroleum Exporting Countries] to maintain its quota production instead of cutting it under an oversupply situation was not enough to offset the gains made in the first four days of the week. Hence, the increase,” President Fer Martinez said. Lenie Lectura

villar pushes tax incentives for urban farmers Las Piñas Rep. Mark Villar on Monday renewed his call for the passage of Urban Farming Act, a bill that aims to provide tax incentives to Filipinos who would engage in urban farming.

Villar, who penned House Bill 4391, hopes that by providing tax credit through the Urban Farming Council, urban dwellers would opt to embrace urban farming and consequently, appreciate its numerous incentives.

“There is a need to reconcile the increasing demand for space and environmentally sound practices,” said Villar, who chairs the House Committee on Trade and Industry.

“We must be proactive in responding to the threats of climate change and food shortage,” he added. PNA

saudi ofw FOUND MERS-cov positive

The Department of Foreign Affairs on Monday confirmed that another Filipino has been infected with the deadly Middle East Coronavirus (MERS-COV) in Saudi Arabia.

DFA spokesman Charles Jose said the man contracted the virus from his Filipino wife who works in a hospital in Riyadh.

“It was the wife who first got MERS and she was confined in a hospital and she got well. When she returned home, after a few days, the husband got infected,” Jose said.

The man is confined in a Riyadh hospital for treatment.

“He’s getting the proper treatment,” Jose said.

Since 2013, MERS-COV has claimed the lives of 10 Filipino workers in the Middle East. PNA

As of Monday, only one onlineenabled transportation service operator has filed for a petition for franchise before the regulator, LTFRB Chairman Winston M. Ginez told the BusinessMirror on Monday.

“We have received one application from GrabCar. It is now under evaluation. Uber and other parties have yet to file,” he said.

The LTFRB office, Ginez said, welcomes the House of Representatives’ inquiry into the regulation of the operations of these modern transport services, and called on yet other applicants to hasten their petitions to operate legally.

“While the board is open to embracing new technology, we want to ensure the public’s safety and convenience by accreditation of qualified TNCs and issuance of franchises to TNVS operators that meet LTFRB’s legal requirements,” he said.

Last month the agency issued four different memorandum circular orders setting specific guidelines, policies, regulations that ensure all TNCs and TNVS should secure the required Certificate of Public Convenience before they can offer their services.

The memos clearly state, among others, the process and legal documentary requirements for accreditation of TNC. They also spell out the needs of TNVS operators in order to secure their franchises before they can start operating online-enabled transport services.

Due to increasing public clamor for these kinds of services popularly used in various countries overseas, Ginez said the LTFRB “carefully studied the current local transport situation and gathered the opinions of TNCs and TNVS to come up with policies and regulations in effectively

governing their operations, while on the other hand, ensuring the safety and convenience of the riding public.

Earlier, the House Committee on Transportation’s technical working group (TWG) recommended the suspension of the operation of the TNCs and TNVS operators as these entities are allegedly “colorum” in nature, pending the approval of their petitions.

“Before TNVS or TNCs are given certificate to operate, they need to strictly comply with the LTFRB’s rules and regulations, including going through a comprehensive screening process and background check of all TNC or TNV drivers.

Their identification must also be properly displayed in accredited vehicles,” Ginez said.

These companies, he added, must a lso submit documents showing they have the necessary insurance requirements to protect the riding public in the event of an accident. They are also required to issue electronic receipts to ensure they comply with tax revenue requirements.

“We are familiar and confident that we have the capability to protect public safety in the face of rapid technology change. While are tasked on adopting rules and regulations, we are open to seeking guidance from our legislators in effectively regulating the transport industry,” Ginez said.

In light of the steep competition offered by TNCs or TNVS operators, “the LTFRB is also encouraging traditional taxi operators and drivers to find ways to enhance their services using new and innovative technologies and applications in order to stay competitive and provide reliable transport service.”

DBM disburses P31.8 billion to build more classrooms

T

he Department of Budget and Management (DBM) has released P31.8 billion to fund the construction and rehabilitation of classrooms across the country to meet the increasing number of students.

The funds were released to the Department of Public Works and Highways (DPWH) for the construction or rehabilitation of 22,325 classrooms nationwide as determined by the Department of Education (DepEd) to ultimately bolster the K to 12 Program.

Budget Secretary Florencio B. Abad said the amount of P31.8 billion will be charged against the DepEd’s provision and maintenance of basic educational facilities, also known as the basic educational facilities fund (BEFF) under the 2014 national budget.

“Every year, we face the need to build more classrooms due to the growing number of public school students. Fortunately, we’re able to keep pace by allotting yearly increases in budgetary support for quality classrooms. With enough public funds for our education system, we can

construct new school buildings or rehabilitate damaged classrooms,” Abad said in a news statement released on Monday.

The completion of construction and repair of additional classrooms takes time, said Abad, saying the process of determining the number of targets “is exhaustive.”

“But we’re confident of achieving these requirements as the success of the administration’s K to 12 school program depends on our efforts,” Abad said.

The additional classrooms are intended to augment shortage in areas where schools were damaged by typhoons and natural calamities, as well as support the needs for classrooms for the K to 12 implementation.

Of the said amount, the P28.3 billion is specifically allocated to the BEFF for the “construction, replacement, and/or completion of kindergarten, elementary and secondary school buildings and technical vocational laboratories, and the construction of water and sanitation facilities” as stated in the 2014 national budget. Estrella Torres

A6 Tuesday, June 16, 2015

Opinion BusinessMirror

editorial

Fully legal or not legal

D

OWN the road is a branch of a fast-food restaurant chain, unlike the dozens of others that operate throughout the country. It is not one of those mega global companies, but it does serve the community, attempting its best to provide a business that the public wants.

When you walk through its doors, you may notice on a wall a display of all the store’s licenses and permits. You might see the Mayor’s Permit for the local city or municipality, along with a fire-safety inspection certificate from the Bureau of Fire Protection and a health inspection certificate. Prominently displayed would be its Bureau of Internal Revenue information, as well as Philippines Social Security System details and, perhaps, PhilHealth. There might even be a Barangay Permit and other certification that the business has complied with all local and national laws and regulations governing its operation.

Either the company knows that, if it does not fully comply with all the rules and regulations, it will be closed down and put out of business.

Across the street is branch of a similar fast-food chain. It also operates for profit and wants to stay in business for the long term by providing its service to the public. However, when you walk in the door, you will not see any of the permits and licenses found in the first establishment.

The fast-food restaurant that is following the law is rightfully concerned that, its competitor is not following the rules. The second restaurant contends that as a member of the Alternative Fast-Food Network Service (AFFNS), it should be allowed to operate without securing all of the same permits and outside of the system. The people behind the AFFNS contend that they are only providing marketing support for the privately owned second restaurant and they and the restaurant are only informally providing food service to the public.

While potentially a multimillion-peso business, they want to be treated as if they were like an entrepreneurial fish-ball cart vendor, who just happens to be part of the AFFNS. This is the issue facing government regulators and legislators with regard to what is being called the Alternative Transportation Network Vehicle Service (ATNVS).

The Technical Working Group of the Philippine House of Representatives Committee on Transportation has recommended that ATNVS, like Uber and Grab Car, be shut down in the interest of public safety. The ATNVS contends the shut down is to protect the business interests of taxi operators.

The ATNVS admitted it cannot guarantee that proper taxes are being paid by private car owners under Uber and Grab Car. It is likely that none of these drivers comply with any of the driver’s licensing requirements of getting a professional license, like drug tests, background checks, or even a Taxpayer’s Identification Number. The cars are not subject to Land Transportation Office or Land Transportation Franchising and Regulatory Board (LTFRB) vehicle safety requirements.

No one is suggesting that the ATNVS not be allowed to operate. The LTFRB and other government agencies only want all parties to follow the law. The law should apply to all or to none at all. We agree.

The drug problem and the economy Manny B. Villar

THE Entrepreneur

T

HE worsening drug-abuse problem, as indicated by recent reports from media and official sources, has compelled me to discuss the problem from a business point of view.

Economists and international agencies have been coming out with rosy predictions about the growth of the Philippine economy, dented slightly, perhaps, by the lower-than-expected growth in the first quarter of the year.

Our growth prospects may be affected by changes in the domestic and global economies, such as the peso-dollar exchange rate, or growth in the foreign markets for Philippine exports. With the continuing increase in remittances from overseas Filipinos, the robust businessprocess outsourcing (BPO) industry, the real-estate boom and low inflation, among other factors, the Philippines is expected to be among the world’s best-performing economies this year and the next.

Lamentably, the drug problem, which includes trafficking and abuse, as well as the involvement of international syndicates, is also posing a challenge to the Philippine economy and the people.

The seriousness of the problem is indicated by published information from the Philippine Drug Enforcement Agency (PDEA), the primary agency that enforces laws against illegal drugs, that

some 8,629, or 20.51 percent of the country’s 42,065 barangays are considered as drug-affected.

Based on data gathered by PDEA, the National Capital Region (NCR) is the most affected, with 92.10 percent of its barangays affected, followed by Region 4A (Southern Tagalog, which comprises Cavite, Laguna, Batangas, Rizal and Quezon or Calabarzon) at 33.78 percent.

PDEA Director General and Undersecretary Arturo G. Cacdac Jr. explains that a barangay is considered drug-affected if a drug user, pusher, manufacturer, cultivator, or other people involved in illicit drugs is present in such barangay.

It is fair to say that all Filipinos, from the highest government leaders to ordinary citizens, are against illegal drugs.

Yet the country is not able to stop the spread of this plague.

According to the 2015 International Narcotics Control Strategy Report of the US Department of State, the lack of legislation authorizing wiretapping for drug cases and the lack of reform in the criminal justice system will continue to hamper efforts to stop drug syndicates from using the Philippines as a

The coming anagnorisis John Mangun

OUTSIDE THE BOX

T

HERE is a moment in many Greek tragedies when the hero goes beyond the point of no return, often because of his or her own excessive pride or self confidence. The ancient Greek word is ‘anagnorisis’ and defines the instance where the character realizes the full extent of his or her recklessness and foolishness and the waiting disaster that is to come.

Other literary examples of anagnorisis would be the popular ‘plot twist’ as when we discover that Darth Vader is actually the father of Luke Skywalker in Stars Wars, or when the “good guy” turns out to be the “bad guy.”

But in the classic sense of anagnorisis, it is when someone follows a certain path, absolutely convinced of the correctness of their actions, unwilling to listen to opposing views, and continues on the path until the truth of their failure becomes obvious. Then it is too late.

We are seeing the beginnings of current examples of anagnorisis and we are going to see more.

It is ironic or, perhaps, a proof of karma that the Greek government is coming up its own anagnorisis in regard to its debt negotiations. Greece’s Syriza government, elected earlier this year,

came to power on the promise that it would repudiate the austerity package that was forced on it during the last several years by its creditors.

Greek Prime Minister Alexis Tsipras and his Finance Minster Yanis Varoufakis took a hard line stance with the International Money Fund, the European Union and the lending nations demanding that Greece be given more loans in spite of its unwillingness to make fiscal reforms. Tsipras demanded that cuts in government pensions be restored and that an increase in the nation’s value-added tax not be implemented. Further, Tsipras wanted some of the debt forgiven.

The lenders would not accede to these demands and now negotiations have stopped pushing Greece to the brink.

Tsipras and his advisors will very shortly

transshipment point and market for illegal drugs.

The INCS report, which was submitted to the US Congress on March 18, said Chinese drug trafficking organizations dominate the methamphetamine trade in the Philippines. But there are indications of the presence of Mexican drug-trafficking groups in the Philippines and other countries in East Asia.

On the other hand, African drug syndicates remain primarily engaged in the use of airline passengers to smuggle illegal drugs through the Philippines.

Amid these developments, it seems that the drug problem is not receiving as much attention it deserves, except from agencies that are tasked by law to run after drug traffickers and manufacturers.

The drug problem is not only a peaceand-order issue; it also affects the economy. It is not limited to drug addicts alone because it also affects the families and other people around them.

During the UN International Day against Drug Abuse and Illicit Trafficking in 2012, the United Nations General Assembly said “transnational organized crime and drug trafficking was of growing concern and, particularly, illicit trade’s broad impact on development.”

The UN General Assembly pointed out that criminal groups, because of the huge illegal profits that drug trafficking generates (estimated at $322 billion a year), are able to undermine governments and the rule of law by “fueling corruption, compromising elections and hurting the legitimate economy.” And it emphasized that, “in all cases, criminal influence and money are having a significant impact on the livelihoods and quality of life of citizens, most particularly

have their own anagnorisis as they realize that no further funding is coming and they must leave the Euro currency mechanism.

Either Tsipras will completely capitulate to whatever demands the lenders make and completely fail on his election promises—throwing the country into a political crisis—or leave the euro. Abandoning the euro, and, perhaps, the European Union, will collapse the Greek banks and the Greek economy. Capital controls on money flow will be put in place and the country will be totally broke. Imports will stop and the Greek government debt will become all but worthless.

With the Syriza party being hardleft, we may see policies that will turn the country into a European Venezuela.

A collapse is avoidable, but it would require Tsipras coming back to the negotiating table willing to sacrifice his politics and his party and attempt to cut a deal that satisfies the lenders. Unfortunately, negotiating now from that point of weakness would probably mean that the lenders get everything they want and that too would not be good for Greece either.

The US Federal Reserve (the Fed) is nearing its point of anagnorisis regarding an interest rate hike. While the business press and media are pushing that the US economy is doing great and that an interest rate hike is perfectly justified, the facts say differently.

Job creation in the US is supposedly the best in the last ten years. People are

the poor, women and children.”

The New York-based advocacy group National Council on Alcoholism and Drug Dependence Inc. says “drug use, abuse of addiction among employees and their family members can cause expensive problems for business and industry, ranging from lost productivity, absenteeism, injuries, fatalities, theft and low employee morale, to an increase in health care, legal liabilities and workers’ compensation costs.”

These days, the nation is focused on the dispute with China in the West Philippine Sea (South China Sea), the proposed Bangsamoro Basic law and the elections in 2016. I agree these topics are important, but so is the drug problem.

We need to pay more attention and channel more resources to stop the drug problem from further worsening. It is lamentable that the contrary is happening.

According to the US State Department report, the PDEA was not able to hire new agents in 2014 because its budget for that year was reduced. The report also noted that, in a country, with over 106 million people, the PDEA only had 35 agents per region, so it had to limit its activities to high-value targets, leaving the Philippine National Police to handle street-level pushers.

We may be able to cope with fluctuations on the currency markets, possible slowdown on remittances or even global financial crises, but neglecting the drug problem can jeopardize the bright outlook of the economy.

For comments, e-mail mbv.secretariat@gmail.com or visit www.mannyvillar.com.ph.

supposedly so optimistic about the future, that even those who stopped looking for a nonexistent job are now back checking the “Help Wanted” ads. Ignored is the fact that the number of full-time jobs is still declining. The number of people seeking government welfare and public assistance continues to increase each month and wages of the rank-and-file are flat, while supervisor wages are increasing.

The press keeps saying the US is on track for interest rates to return to normal from near zero without mentioning that at historical rates of interest, the debt service of the US government cannot be paid.

But the Fed assures us that if after they raise rates, that hike negatively affects economic growth, they can always quickly lower rates again. We thought that they were going to raise rates because the economy is doing so well? So, if the economy might not be able to handle a rate increase, why raise them at all?

Yes, it certainly seems like the Fed has everything under control and absolutely knows what it is doing.

There is an interesting thing about moments of anagnorisis in ancient Greek tragedy. Most of the characters that experienced it committed suicide.

E-mail me at mangun@gmail.com.

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

A small step for MILF, a big leap for peace Ernesto M. Hilario

ABOUT TOWN

T

ODAY, June 16, the Moro Islamic Liberation Front (MILF) begins the first phase of the decommissioning process for its weapons and combatants.

It’s a symbolic ceremony, to be sure, with 145 members of Bangsamoro Islamic Armed Forces, the armed wing of the MILF, turning over 55 high-powered and 20 crew-served weapons to an independent decommissioning body.

If the military estimate of the MILF strength of around 20,000 regulars is accurate, then the turnover of a small number of weapons in today’s ceremony is largely symbolic indeed.

But, I think, the larger significance of the ceremony is the MILF’s resolve to end armed struggle and pursue the path of peace.

Mohagher Iqbal, MILF chief negotiator, said last week that a resumption of hostilities is not an option and they will exhaust all peaceful means of seeking redress if the draft Bangsamoro basic law (BBL) now pending in Congress is delayed by questions regarding the constitutionality of some its provisions.

Under the Annex on Normalization signed by the MILF and the government in January last year, decommissioned combatants will undergo registration, verification and validation process, after which they will be provided immediate cash assistance amounting to P25,000 and Philippine Health Insurance Corp. cards. The combatants would also be provided with medium- to long-term socioeconomic packages by the Task Force on Decommissioned Combatants and Communities.

We hope this milestone in the peace process with the MILF will be sustained even as critics of the BBL fear that the bill, if approved, would ultimately lead to the creation of a substate that can eventually secede from the republic. As of now, we ought to give the MILF the benefit of the doubt and welcome their gesture of good faith because we cannot afford another round of violence and bloodshed in Muslim Mindanao.

Should Comelec heed Smartmatic’s appeal?

THE latest development in preparations for the 2016 elections is that technology provider Smartmatic has appealed its disqualification by the Commission on Elections (Comelec) from the public bidding for the lease of 23,000 optical mark reader (OMR) machines.

The disqualification order issued by the Bids and Awards Committee (BAC) is “unfair and based on a wrongful technical interpretation of the Technical Working Group,” said Cesar Flores, Smartmatic president for Asia Pacific.

“We have satisfied all the published technical requirements set forth in the request for proposal.”

The BAC had said Smartmatic failed to pass the postqualification evaluation stage of the bidding process.

Flores asserted that the BAC had unfairly disqualified his company for failing the two-storage requirement, which his firm had “successfully demonstrated to the Technical Working Group (TWG) on several occasions,” and, yet, the BAC rendered a split vote that relied on the erroneous interpretation of the TWG. Flores said Smartmatic “passed every one of the 400 technical requirements of the Comelec for the OMR project.

Records will clearly show that, during the first stage, Smartmatic was rated ‘passed’ for the same synchronization requirement. Yet, in the second stage, the TWG deemed it ‘failed.’”

At the very least, the poll body should consider the appeal of Smartmatic as the company is even willing to demonstrate its technical compliance to the Comelec and other stakeholders.

Besides, the company submitted the lowest calculated responsive bid, and that its lease proposal is 31 percent lower than the actual budget. This would mean P700 million in savings to the poll body. The other bidder for the project exceeded the budget by approximately P1.2 billion.

If Smartmatic successfully met the requirements of the 2010 and 2013 elections with fast results in the counting and tallying, and with nobody

wanting a return to manual elections ruled by guns, goons and gold, the Comelec should give the technology provider a fair hearing.

Public utility or mere concessionaire?

THE water concessionaire in Metro Manila’s eastern zone, Manila Water, begins implementing new rates this month close on the heels of the April 21 decision of the Arbitration Panel that reduced the original Metropolitan Waterworks and Sewerage System (MWSS) rate rebasing determination of negative P7.24 per cubic meter and awarded to Manila Water a negative 11.05 percent on basic average water rates.

Based on the MWSS decision, Manila Water customers will get a reduction of P2.77-per-cubic-meter adjustment for the 2013-2017 rate rebasing period, to be distributed in three tranches: a decrease of P1.66 per cubic meter in the average basic charge starting June 1 this year, and a decrease of P0.55 per cubic meter in 2016 and 2017.

With the recent rate rebasing decision, the arbitration panel has set aside its own decision based on its interpretation that MW is a public utility, as per Commonwealth Act 146, or the Public Service Act of 1936, which has long been superseded by other laws.

As a public utility, MW cannot recover corporate income tax, the same decision given by the Supreme Court to Manila Electric Co. in 2002. In the ruling, income tax should not be included in the computation of the public utility’s operating expenditure, as this is inconsistent with its basic character of providing service to its customers.

The arbitral decision declaring MW as a public utility poses a regulatory challenge for the MWSS as this contradicts the government’s stand under the Public-Private Partnership (PPP) Program that MW, together with Maynilad, are contractors and agents of MWSS, while the latter remains as the public utility.

A separate arbitration panel, however, upheld Maynilad’s position that it should continue to be a contractor and agent of MWSS. The decision of the Arbitral Panel now raises questions on who will be responsible for Metro Manila East Zone’s water supply.

Since it took over the East Zone in August 1997, Manila Water has succeeded in significantly improving the water networks of 23 cities and municipalities in eastern Metro Manila and the majority of the Rizal province.

Today Manila Water maintains stateof-the art facilities to ensure quality water supply to its customers, as well as an efficient sewage and septage treatment plants that cleans used water from households to be returned to the rivers as Class C water—water that can sustain marine life but not safe for human consumption.

The company has spent more than P100 billion in building these assets, with more or less P28 billion yet to be recovered.

Considering the MWSS’s original role as a public utility under the PPP, and the change in Manila Water’s character as a public utility based on the decision of the arbitral panel, who will now oversee water service delivery in Metro Manila’s East Zone?

This also raises other questions. As a supposedly new public utility, will Manila Water now have to apply for a separate legislative franchise? And will the company now declare itself independent itself from MWSS and create an entirely different agency or brand that oversees water and used water?

As things now stand, we have a concession area that is run by two public utilities.

While the rate rebasing exercise was supposed to be a corrective mechanism, the recent ruling contradicts the government’s position under PPP. More than this, it serves to constrain Manila Water from proceeding with its expansion plans and to efficiently serve East Zone customers.

E-mail: ernhil@yahoo.com.

Tuesday, June 16, 2015

A president in the Internet era Edgardo J. Angara

F

ORMER President and now Manila Mayor Joseph “Erap” Estrada recently said our next president should ideally have firsthand experience working with local government issues.

He said successful presidents were once local government heads, citing US Presidents Ronald Reagan and Bill Clinton who were both governors before being elected to the presidency. In fact, in a 2014 Washington Post survey of the 162 members of the American Political Science Association’s Presidents and Executives Politics section, Clinton and Reagan ranked in the top 20 of US Presidents—eighth and 11th, respectively.

In contrast, Time Magazine listed President Warren G. Harding—who once served as Lieutenant Governor of Ohio—as one of the Top 10 Forgettable Presidents of the US, describing him as one of the country’s worst.

President Jimmy Carter was governor of Georgia before becoming the US’s 39th president. He may be a recipient of the 2002 Nobel Peace Prize for his advocacy work through the nonprofit Carter Center. Yet, in a 2013 Gallup Poll, only 4 percent of the recipients rated him “outstanding,”

while 37 percent said he was “average” and 35 percent either saw him as “below average” or “poor.”

Firsthand experience as a local government unit executive would surely be an asset for our next president. However, he or she will need a much broader skills set, given the opportunities and threats in a rapidly changing Internet era.

Fortune magazine recently wrote of its choice of the top 50 world’s greatest leaders and said today’s leadership isn’t the same as yesterday’s.

Though some leadership qualities remain timeless (such as the courage to be a pioneer or a visionary), new conditions have redefined what it means to be an effective leader today.

The most salient change, Fortune argues, is that a leader’s success today is increasingly dependent on his or her ability to influence people that cannot be controlled with money or force—a key facet of the Information Age, where “everyone knows everything and everyone can communi-

Insubordination Atty. Lorna Patajo-Kapunan

LEGALLY SPEAKING

I

N 1989 the Supreme Court (SC) decided the case of San Miguel Corporation v. NLRC (GR 82467, June 29, 1989). This was a labor case involving former security guards of San Miguel Corp.

(SMC), who were dismissed for falsification of their time cards.

They made false entries in their time cards showing that they reported for work on February 19 and 20, 1983, when the truth was they went on a hunting trip to San Juan, Batangas, with their chief, Maj. Martin Asaytuno, then head of the Administrative Services Department of the Security Directorate of SMC. Aside from the incident, the dismissed security guards were later caught to have been punching in the time cards of their coemployees.

The Labor Arbiter found that the dismissed security guards did go on a hunting trip on said dates, upon

the invitation of Asaytuno. They went along to please him because they believed his invitation was equivalent to a command. Being an army man, Asaytuno expected “total obedience” from his subordinates.

The dismissed security guards and Asaytuno left the office at 2 p.m. on February 19, 1983, and stayed in Batangas up to February 20. Asaytuno even signed four sets of overtime authority for February 19 and 20 so that the dismissed security guards could collect overtime pay. When they reported for work on February 21, 1983, Asaytuno asked for their

cate with everyone else at any time.”

To be effective, a leader should capitalize on today’s free flow of information rather than fear it, and be sufficiently tech-savvy to utilize various online platforms and social media in rallying people around their cause or vision.

Take Joshua Wong, who was 10 in the Fortune Top 50 list. At 17 years old, armed with only a cell phone and an activist’s eloquence, he rallied nearly a hundred thousand Hong Kong residents to participate in pro-democracy protest actions.

The connectivity Joshua leveraged also amplifies how world events affect local issues. As Philippine society becomes more integrated with the rest of the world, the next leader should have a world view, but without losing a sense for the local context. He or she must be capable of taking the long-view, while dealing with immediate concerns—adapting global perspective to domestic challenges whenever applicable. A 2012 McKinsey and Co. article on 21st-century leadership described this as the ability to “see with a microscope and a telescope.”

And having a sense of history definitely helps. In a 1997 Political Science Quarterly article, Arthur Schlesinger Jr.—noted historian and biographer of three US presidents—once wrote of the US presidency: “Great [US] presidents possess, or are possessed by, a vision of an ideal America. Their passion is to make sure the ship of state sails

on the right course. If that course is, indeed, right, it is because they have an instinct for the dynamics of history.”

Charles de Gaulle, the 18th president of France, wrote in The Edge of The Sword: “A statesman may be determined and tenacious but, if he does not understand the character of his time, he will fail.”

The 21st century unfolds so many opportunities for the Philippines, especially when we are standing out among the most promising growth stories in the developing world today. This includes the emergence of a young population that may provide the productive energies to sustain the country’s development and prosperity for decades to come—a so-called demographic sweet spot. Challenges abound, of course, including a changing climate, global economic slowdown and ongoing regional tensions.

On balance, however, the Filipinos could be winners.

The next president will only be the third to be elected during this Internet age. But, like presidents before, he or she will play a pivotal role in charting the country’s path into the future. It is only right that he or she possesses the qualities and broad skills set to take advantage of the opportunities and face down the threats brought about by today’s fast-paced, hyper-connected and interdisciplinary world.

time cards and initialed the false entries in an attempt to show that they supposedly reported for work on the dates of their trip.

Despite all these, the Labor Arbiter held that the security guards were illegally dismissed and ordered SMC to reinstate them to their respective former positions without loss of seniority rights and with full backwages and other benefits. The Labor Arbiter’s ruling was affirmed by the National Labor Relations Commission (NLRC).

When the case was brought to the SC, it ultimately ruled that there was no illegal dismissal. It pronounced that while “it may be conceded that the private respondents acted under some degree of moral compulsion when they agreed to accompany Major Asaytuno on a hunting trip to San Juan, Batangas, they were certainly under no compulsion from him to falsify their time cards and thereby defraud the company by collecting wages for the dates when they did not report for work.”

The SC also held that the “falsification and fraud, which the

private respondents committed against their employer, were inexcusable. Asaytuno’s initials on the false entries in their time cards did not purge the documents of their falsity. Their acts constituted dishonesty and serious misconduct, lawful grounds for their dismissal under Article 282, sub-pars. (a) and (c), of the Labor Code.”

It is, thus, imperative that employees understand where their loyalties lie. While camaraderie among coworkers is desired, it should not be accomplished by shortchanging the company. Even when there is clamor for work-life balance, it should not involve misrepresentation.

In the San Miguel case, the dismissed security guards’ fear of their immediate superior was not deemed enough to justify their fraudulent acts. In following Asaytuno’s unlawful order, they became insubordinate to their employer. Worse, they added insult to injury when they skipped work and then asked to be paid.

Social justice will not always work in favor of the underprivileged. The operative word is still justice.

E-mail: angara.ed@gmail.com.

India chooses iPhones over asset bubbles William Pesek

BLOOMBERG VIEW

I

NDIA’S Raghuram Rajan is an outlier in Asia. Whereas other central bankers in the region are pumping ever-more air into asset bubbles—New Zealand and South Korea further reduced interest rates last week and Australia may be next—Rajan has taken a go-slow approach. It’s to Rajan’s credit, and India’s benefit, that he has shown such discipline.

The Reserve Bank of India governor has done his share of easing this year, most recently on June 2. But he hasn’t tried to keep up with his peers in the region: Short-term rates in India are still 7.25 percent, compared to 5.10 percent in China, 3.25 percent in New Zealand and less than zero in Japan. Nor has Rajan followed others in tweaking bank-reserve requirements and margin-lending rules to drive up stock prices. It’s no coincidence that Mumbai shares are down 5 percent this year, while Shanghai’s are up 60 percent.

Instead, Rajan, a savvy University

of Chicago economist, has been holding Indian Prime Minister Narendra Modi’s feet to the fire. Rajan has made more monetary stimulus contingent upon progress on the structural reforms Modi promised more than a year ago when his Bharatiya Janata Party campaigned in national elections. When he cautioned against “competitive monitoring easing” last week, Rajan was letting the government know he won’t be pressured by the rate-slashing in other countries.

Specifically, Rajan is prodding the government to step up infrastructure spending. He wants to

A7

make sure Modi makes good on his proposed budget, which promises a 25-percent jump in outlays on roads, bridges and ports to increase India’s competitiveness.

Rajan and Modi were both probably buoyed by recent news that tech giant Foxconn Technology is looking at manufacturing Apple’s iPhone in India. It’s an endorsement of the country’s current economic stewardship, and an indication of India’s broader potential as a manufacturing hub, especially given China’s determination to move its production upmarket from basic manufacturing to software design, aerospace and robotics. But if Modi hopes to reach the full potential of his “Made in India” campaign, it will require bold government action—action that Rajan’s quid pro quo strategy could help motivate.

There’s plenty more Rajan should do. His team has been rewriting rules to help lenders recover loans from defaulting companies, but he should accelerate those efforts. Even after three rate cuts, India’s loan growth is dwindling; in the words government advisor Arvind Subramanian, the “corporate sector is unusually

stressed.” In fact, the country’s stressed assets are projected to rise to a 15-year-high in 2016, while bank default risks are rising more than anywhere else in Asia.

In order to address India’s inflation problem—which, unlike elsewhere in Asia, stems primarily from inefficiency and corruption—Rajan should encourage the government to simplify taxes, cut red tape, open protected sectors, eradicate graft and liberalize land laws. In addition to narrowing the gap between rich and poor, those steps would help attract more business from Foxconn and its global peers. Like the Taiwan-based behemoth, many tech companies are eyeing alternatives to China’s rising labor costs, slowing growth and weak intellectualrights protections.

But the basics of Rajan’s strategy are entirely correct. Unlike his peers in China, Japan and elsewhere in the region, who have enabled the complacency of their governments, he has done the opposite. In the short term, India may miss out on the excitement of rapidly growing asset bubbles. But attracting the Foxconns of the world more than makes up for it.

2nd Front Page BusinessMirror

A8 Tuesday, June 16, 2015

VISTA LAND UNIT RAISES $300M FROM 7-YR NOTES

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roperty developer Vista Land & Lifescapes Inc. on Monday said it raised some $300 million from seven-year notes, which it will use to pay off the company’s expensive loans.

The company said its unit VLL International Inc. last week priced its senior unsecured notes offering due 2022 at a nominal rate of 7.375 percent.

It is part of Vista Land’s maiden $1-billion medium-term note-offering program.

“The notes were issued as part of the company’s liability-management exercise designed primarily to extend the company’s US dollar notes due 2018 and 2019,” Vista Land said in a statement.

Early last week the Vista Land’s unit offered to buy back its $100million notes due 2018 and $350million notes due 2019.

At the end of the tender-offer period, an aggregate of about $206.7million notes was tendered by noteholders and accepted by the company.

Other proceeds will be used for refinancing, general working capital purposes and other general corporate purposes.

Order book for the said offering

reached $1 billion, or more than three times its offer, which the company credited for its growing brand name.

“However, most of the allocation went to investors who had participated in the tender offer.

The company’s growing liabilitymanagement expertise is also likely to be making investors more comfortable with its underlying creditworthiness,” it said.

Banks cornered around 52 percent of the offer; fund managers, 40 percent; and private banks, 8 percent.

By geography, Asia took up 91 percent, with Europe at 9 percent.

Asian offshore participation was sizable, with combined allocations of 51 percent, achieving the company’s objectives of diversifying away from its onshore investor base. ​HSBC was the sole structuring advisor and, together with DBS Bank Ltd., was joint dealer-manager on the tender offer. BDO Capital and Investment Corp. was the domestic dealer-manager.

DBS and HSBC acted as joint global coordinators, lead managers and bookrunners for the deal, while BDO Capital and China Banking Corp. acted as joint domestic lead managers.

Opec members pump at records

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peculators reduced bullish wagers on oil to the lowest level in eight weeks as the biggest members of the Organization of the Petroleum Exporting Countries (Opec) pumped record amounts of crude.

Hedge funds trimmed their net-long position in West Texas Intermediate (WTI) oil by 3.7 percent in seven days ended June 9, US Commodity Futures Trading Commission data show. Longs tumbled to the lowest in five months.

Saudi Arabia, Iraq and the United Arab Emirates are pumping record amounts of oil, the International Energy Agency (IEA) said last week. While the Opec reiterated its target for the group’s output this month, in reality it has been producing more than that for a year. The IEA also raised its esti-

mate for non-Opec supply, underscoring concern that the supply surplus won’t ease any time soon.

“The Opec agreement affirms the established policy, which appears to be that members can pump as much oil as they want,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by phone on June 12. “The IEA also revised non-Opec production because US output has been a lot more robust than expected.”

Futures fell $1.12 to $60.14 a barrel on the NewYork Mercantile Exchange in the period covered by the CFTC report, settling at $59.96 on June 12. WTI traded in an $8 range the past eight weeks after tumbling more than $65 from June 2014 to March 2015. The grade lost 24 cents to $59.72 at 11:42 a.m.

Singapore time on Monday. Bloomberg News

www.businessmirror.com.ph

Developing countries move a step closer to ratifying TFA

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By Catherine N. Pillas

eveloping and least developed countries (LDCs) are taking steps to ease their trade procedures as 66 nations have now notified the World Trade Organization (WTO) of their immediate, or “Category A,” commitments under the multilateral Trade Facilitation Agreement (TFA).

In a statement issued by the WTO, the chairman of the Preparatory Committee on Trade Facilitation, Ambassador Esteban B. Conejos Jr. of the Philippines said the submission of notifications is a sign of the continued commitment of WTO members, especially developing and LDCs, to the trade-facilitation pact.

Burundi, Rwanda, Tanzania, Dominica, Kenya, the United

CONEJOS said the submission of notifications is a sign of the continued commitment of WTO members, especially developing and LDCs, to the tradefacilitation pact.

Arab Emirates, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Antigua and Barbuda, Grenada and Trinidad and Tobago are among the LDCs that have recently submitted Category A commitments, Conejos said during a June 11 committee meeting.

The TFA text was concluded in December 2013 as part of the wider “Bali Package.” Since its conclusion, the WTO has moved to insert the text into the WTO’s founding agreement, or the Marrakesh Agreement, through a protocol of amendment.

WTO members must then submit their protocol of formal acceptance of the amendment to ratify the TFA. For the TFA to come into force, two-thirds of the WTO membership must ratify the agreement through submission of their “instrument of acceptance” to the WTO. The agreement will then be binding only to

those who have agreed to it.

To date, Hong Kong ,China, Singapore, the United States, Mauritius, Malaysia, Japan and Australia have ratified the TFA, representing 6 percent of the total membership needed to ensure entry into force, the WTO said in its statement.

The Philippines has committed to meet the deadline for submission of the instrument of acceptance in July.

Part of the WTO’s assistance to LDCs and developing countries is the Trade Facilitation Agreement Facility (TFAF). The TFAF involves technical assistance and support capacitybuilding, in the form of a fund, from more developed economies.

According to the same WTO statement, Norway, Austria, Australia and the United Kingdom have already given contributions to the fund. the World Bank has earmarked as much as $30 million for the implementation of the TFA.

MVP only has three other PPP deals in mind after Calax win. . .

He enumerated the three contracts as the P108.2-billion Regional Airports Development, the P287billion North-South Commuter Rail, and the operations and maintenance (O&M) of the Light Rail Transit (LRT) Line 2.

“But it doesn’t mean we’ll bid in all three. We’ll look into it and if we think it’s viable, then we might participate,” Pangilinan said.

All three are under the Department of Transportation and Communications (DOTC), which has vowed to push more projects out of the PPP pipeline before President Aquino steps down from office in 2016.

The P108.2-billion project that

aims to privatize five key airports around the country is divided into two packages. The first package consists of the Bacolod-Silay Airport (P20.26 billion); and Iloilo Airport (P30.40 billion), while the second bundle is composed of the New Bohol or Panglao Airport (P2.34 billion); Laguindingan Airport (P14.62 billion); and Davao Airport (P40.57 billion).

The private-sector partners will be tasked to improve the services at the respective key regional airports. This includes concessioning the operations and maintenance to the proponents, including required enhancement of airside and landside facilities

at the respective airports.

On the other hand, the P287billion North-South Railway Project aims to modernize the Philippine National Railways (PNR) and extend it all the way to Sorsogon.

The first phase of the facility will involve the construction of a 36.7-kilometer narrow gauge elevated commuter railway from Malolos, Bulacan, to Tutuban in Manila. It is seen to be completed by the third quarter of 2020.

The second phase, which will extend the commuter rail to Matnog, Sorsogon, will be completed by the fourth quarter of 2019.

The two-phase deal will be implemented under official development

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assistance and the PPP Program.

Meanwhile, the project involving the LRT 2 aims to infuse private-sector efficiencies into the operations of the train system to provide better service levels to the riding public.

MPIC has won several other projects under the PPP Program.

It has partnered with several local and foreign corporations to win the following deals: the P1.72-billion Automatic Fare Collection System and the P64.9-billion LRT Line 1 Cavite Extension.

It won the auction for the P35.42-billion Calax earlier this month by offering a P27.3-billion premium payment. Lorenz S. Marasigan