BusinessMirror June 18, 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 201418, Vol. 2015 10 No. 40Vol. 10 No. 252 Thursday,

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

BOI could lose power to validate perks INSIDE

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HE House of Representatives is reportedly bent on removing the power of the Board of Investments (BOI) to validate incentive claims when the two chambers of Congress meet anew for the bicameral conference to craft the final version of the Tax Incentives Management and Transparency Act (Timta).

BLUEWATER MARIBAGO GETS BETTER WITH AGE The brightest future

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EAR Lord, we bring before You women, men and children who have lost their freedom, whose dignity has been broken, whose lives and future have been darkened. Give them back their dignity, restore their broken bodies and spirit. Provide them with the brightest future. Let them live again in love and peace. Let joy and happiness reign in their hearts.

Amen.

WORD AND LIFE, FR. SAL PUTZU, SDB AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

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

Life

NORA’S BRILLIANCE SHINES AT 38TH GAWAD URIAN »D3

BusinessMirror

The Marine Wildlife Saltwater Lagoon

Thursday, June 18, 2015

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THE Bluewater Gallery

Bluewater Maribago gets better with age

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B B L

HERE is a saying that “the older the wine, the better its taste.” I would say this description is also quite apt for the 7-hectare, family-friendly Bluewater Maribago Beach Resort & Spa (www. bluewatermaribago.com.ph), a pioneer luxury resort within the Maribago District in the beautiful island of Mactan, Cebu. The resort opened in July 1989 and last year, it celebrated its milestone silver anniversary.

A member of the Bluewater Resorts group, a chain of resorts owned by the wholly Filipino Alegrado family from Butuan City in Mindanao, this Class “AAA” resort has managed to keep up with the times and the competition, remaining very elegant and sophisticated while still highlighting traditional Filipino hospitality with a few modern twists. Just two years after it opened with 30 rooms, it expanded with the new 64-room Garden Wing.

When spas became a huge trend in the wellness industry, it added in January 2007 a third wing—the 50 Amuma Spa Suites designed by architect and wood

artist Benji Reyes. Today, the resort, particularly the spa, pavilions and swimming pool area, bears Benji’s signature mark on modern contemporary Filipino architecture (thatched roofs, airy verandas, capiz shell windows, etc.) and you can discern his constant fascination with recycled wood salvaged from old ancestral houses. Lots of it is used all over the resort. As in the past, they worked around the existing decades-old balete and talisay trees when they constructed the new rooms, spa and pavilions. Benji also designed the room’s cantilevered “floating beds,” a Bluewater trademark, as well as other very Filipino wooden sculpted furniture throughout the resort.

Today, the resort has 158 well-appointed, spacious and clean air-conditioned rooms designed in the native Filipino concept—20 Premier De Luxe Rooms, five Royal Bungalows, 83 Deluxe Rooms and 50 Amuma Spa Suites. Room amenities include a mini bar, a wallmounted flatscreen cable TV, NDD/IDD telephone, a large skylighted bathroom with free-standing bathtub, closet, bidet and separate shower with rain shower head, private veranda and coffee/tea making facility plus free Wi-Fi. Guests are transported to their respective rooms

and suites via eco-friendly golf carts.

Bluewater Maribago is also distinct from other resorts on Mactan Island. For one, it has, at 110 meter, the longest beach of them all. Its white-sand beachfront, like that of any other resort on the island, may not be spectacular as Boracay’s (it now being the unfair standard), but it is still quite nice and clean.

The addition of the 1.1-hectare, man-made white-sand Bluewater Private Island, located 65 meter offshore from the beach, also provides resort guests with an additional area to bask under the sun. It is also rented out for romantic, intimate and exclusive weddings (it can seat 1,300 guests) and/or private dining.

Of its five top-notch food and beverage outlets, the cool and breezy Cove Live Seafood Restaurant, Bluewater Maribago’s premier restaurant, is the only one on the island to offer a wide variety of the sea’s bounty live, housed in seawater aquariums, and these are prepared to your liking. The others outlets include the 24-hour Allegro Restaurant (the main restaurant that offers a variety of theme dinners and entertainment throughout the week), Molto Italiano (an Italian cafe offering brick oven specialties), Amuma Spa Café &

B C N. P

The Senate and the House have already approved their versions of the Timta.

A particularly contentious amendment, however, will still take place when the Senate and the House meet during the congressional break, officials said.

The chairman of the House Ways and Means Committee, Rep. Romero S. Quimbo of the Second District of Marikina City, in a text message,

reiterated his intention to remove the BOI’s power to validate incentives, in a bid to make the processing of incentives quicker.

Quimbo earlier hinted that the long assessment period by the BOI may be a tactic to delay the work of the Bureau of Internal Revenue (BIR), since the agency’s auditing period comes after the BOI’s validation.

The lawmaker said the yearlong validation of the BOI can also give

time for unscrupulous companies to resort to corruption to ensure the BOI passes a clean validation report to the BIR. But, as explained by BOI Governor Lucita P. Reyes during a committee hearing for the proposed bill, the agency must first validate the incentive claims of its registered companies to check if the incentives they are asking for are connected with their registered activity.

S “BOI,” A

Juice Bar (offering healthy fare) and the open-air Oyster Bar (offers Happy Hour specials).

The resort also has the Bluewater Gallery, a fully functional and updated art gallery that is a venue for local Philippine artists to showcase their works to both local and international audiences. It also hosts events and workshops as part of its art appreciation and educational goals.

The Amuma Spa—“amuma” means “to pamper” in Visayan—only hires single mothers as spa therapists to provide the traditional Filipino hilot, pik pik kawayan sa siki (foot massage using bamboo poles), all best enjoyed in the comfort of your room, as well as Western and Asian massage therapies such as water shiatsu (watsu), Swedish, Namikoshi Shiatsu, Duot, Hot Stone and Travel Revive Fusion, their quality right up there with the best spas in the country.

The three inviting, beach-inspired, lagoon-shaped swimming pools are set amid landscaping that is a feast for the senses. The resort is also known for its Marine Wildlife Saltwater Lagoons which are filled with assorted tropical fish including black tip reef sharks, groupers and clown fish. ■

Six budget tips and tricks for traveling like a pro WE are already at the tail end of the summer season but planning for travels abroad remains a favorite pastime for many. The demand for affordable airfares, accommodations and destinations continues to increase as more Filipinos are looking to reward themselves with an out-of-the-country trip with friends or family. Traveling offers a complete sensory experience: from authentic food, the sights and sounds, all the way to shopping and discovering great finds to remind you how wonderful your trip was.

All these experiences, however, entail a budget. It takes patience and skill to know how to manage your expenses abroad, especially for the more luxurious destinations in Europe or North America.

It might be challenging for some, but knowing how to get the best value for your hard-earned money will make your vacation more enjoyable, with a few more to spare for trinkets and souvenirs you can take home.

Here are a few tips and tricks to make your travel budgets go a long way while you’re out of the country: 1. Bring your own tumbler and avoid spending for water. Everyone needs water but it can be costly if you’re buying bottles on a daily basis. Pack a tumbler and refill it with water from your hotel or any restaurant you’ll be dining at to save on cost.

2. Traveling with friends? Have a common fund. Pool together the amount

of money you plan to spend as a group for things like entrance fees, transportation, snacks, etc. It’ll be easier to keep track of your group’s spending which, in turn, will help you budget your own personal expenses. It also solves the problem of splitting the bill.

3. Educate yourself on the exchange rate . If you’re flexible with your destination, choose a country where you can get the most out of your money.

The exchange rate between our local currency and your country of choice will affect your purchasing power depending on the rate. Make sure that you also get the best rate when exchanging cash abroad.

A quick Google search will help you determine where to get the best rates for your money.

4. Pledge your loyalty to an airline and score a free trip. Loyalty does pay off. If you travel with the same airline, make sure you’re on their loyalty program in order for you to collect points each time you fly. Score enough points and exchange them for a “free” ticket or upgrades.

5. Know your way at the breakfast buffet. If your hotel accommodation comes with a daily breakfast buffet, don’t let any of that food go to waste. Discreetly pack up your leftovers (or whatever you’re capable of taking away) and save it as a snack for later.

6. And if you’re on an unlimited mobile surfing plan, make sure you use it to its full potential. Technology

and connectivity can make your travel experience more efficient and enjoyable.

Share your adventures abroad with everyone as they happen to you in real-time.

Don’t wait around for Wi-Fi when you’ve got the Internet at your fingertips. Message, call, and connect as much as you want with friends and family. Never let them miss out on anything with you, and stay connected with what’s going on back home.

Use the Internet to search for coupons and get special online deals on attractions, shows, food and shopping. Save on time by using maps and in-city guides to get train and bus schedules.

You can also skip unwanted airport hassle by doing a Web check-in on your phone. You’ve got the power of mobile surfing, so make the most out of it.

And speaking of unlimited data roaming, Globe Telecom has great news for all its prepaid subscribers.

The leading telco is now offering its flat rate for unlimited data roaming service of P599 per day to its prepaid users, providing uninterrupted access to the Internet in over 50 countries and destinations worldwide.

“With Globe Prepaid Roam Surf, prepaid customers can enjoy their travel experiences and share them instantly with

everyone back home as they happen. With a flat rate for unlimited data roaming service accessible for a full 24-hour cycle, prepaid customers will definitely get the best value for their money,” says Coco Domingo, vice president for Platinum and Roaming Business at Globe.

Customers need not worry about the subscription expiring at the stroke of midnight, assuring them of a seamless and worry-free data connectivity experience.

Prepaid customers traveling to Australia, Austria, Belgium, Canada, China, Croatia, Czech Republic, Dominican Republic, Estonia, Fiji, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Macau, Malaysia, Mexico, Nauru, the Netherlands, Panama, Poland, Portugal, Qatar, Saudi Arabia, Seychelles, Sierra Leone, Singapore, Slovakia, South Africa, South Korea, Spain, Sweden, Taiwan, Thailand, Turkey, UAW, Uganda, the United Kingdom, and the US can avail themselves of Globe Prepaid Roam Surf.

Roam Surf for Globe Prepaid offers customers the ability to choose from three variants, P599 for 24 hours, P1,797 for three full days and P2,995 for five full days. Customers can dial *143# and access the International and Roaming menu to register to the service without having to memorize registration keywords.

Visit www.globe.com.ph/international or dial *143# to know more.

LIFE

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IT’S OVER!

WARRIORS WIN

Sports

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| THURSDAY, JUNE 18, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

MEMBERS of the Golden State Warriors celebrate at the center court after beating Cleveland Cavaliers in the finals to cop their first title after 40 years. AP

BusinessMirror

IT’S OVER! WARRIORS WIN THEIR FIRST NBA TITLE IN 40 YEARSS

HOPE WILL PREVAIL FOR CAVS

B M B Los Angeles Times

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LEVELAND—The 40-year basketball drought finally ended, the Golden State Warriors flush with their first championship since 1975.

Champagne sprayed like geysers in the locker room after the Warriors eliminated the Cleveland Cavaliers in Game Six of the National Basketball Association (NBA) Finals, 105-97, continuing the same shoot-at-will style that carried them to 67 regular-season victories and a 16-5 playoff run.

Stephen Curry grabbed the game’s final rebound and heaved the ball high into the air as his teammates began celebrating at a quieted Quicken Loans Arena. The Warriors didn’t face a Game Seven in their four playoff series and should be considered one of the best teams ever, “top to bottom,” Curry said.

“I wish I had 1,800 more ways to explain this, because this is pretty amazing,” he said with the Larry O’Brien Trophy perched next to him on a table.

The Cavaliers, on the other hand, claimed in their plastered-everywhere-in-Ohio mantra they would be “ALL IN,” but missed a key component, the “ALL” part.

The Warriors were the ones with contributions from many players, Curry and veteran Andre Iguodala each scoring 25 points on Tuesday, while Draymond Green had 16 points, 11 rebounds and 10 assists.

Iguodala didn’t start once in the regular season but was promoted from the bench last week for Game Four. He played tough defense against LeBron James throughout and received the Finals Most Valuable Player (MVP) award after averaging 16.3 points, 5.8 rebounds and four assists.

James tried his best with an unimpressive cast of characters. It wasn’t his fault injuries took out Kevin Love in April and Kyrie Irving in the Finals opener.

He acted accordingly, taking a lot of shots, and missing plenty but also creating breathtaking stats, such as accounting for 26 of his team’s 32 field goals in Game Five.

He had 32 points on 13-for-33 shooting, 18 rebounds and nine assists in Game Six. For dragging along a damaged team, he deserved much respect. Cleveland fans booed when he wasn’t chosen as the

C GOLDEN State Warriors guard Stephen Curry (left) kisses the championship trophy and Andre Iguodala holds the series Most Valuable Player trophy as they celebrate winning the championship series. AP

Finals MVP, which would have made him the first from the losing team since the Los Angeles Lakers’ Jerry West in 1969 (against Boston).

James finished with numbingly impressive stats (35.8 points, 13.3 rebounds, 8.8 assists) but fell to 2-4 in the Finals, further away from the king of the 1980s (Magic Johnson, 5-4 in NBA Finals), the 1990s (Michael Jordan, 6-0) and infant years of the 2000s (Kobe Bryant, 5-2).

“I’ve been on the short end of this four times,” James said.

“I’m a guy who just tries to be successful in everything I do.

When you fall short, it hurts. It eats at you. I wish I could have did better and done more. It just wasn’t our time.”

For Curry, it was the first championship of a 27-yearold’s burgeoning career. If he’s not the best player in the world right now, to steal James’s self-proclamation from a few days ago, he’s very close.

For Steve Kerr, it was an unimaginable run in his first season as an NBA coach after ditching TV analyst headsets to turn the Warriors into a force at Oracle Arena (48-4) and, really, anywhere.

For West, a Warriors consultant and sounding board, it was the first championship he’d been part of since leaving the Lakers’ front office after the 2000 season.

For former University of California in Los Angles player

GREAT EFFORT NOT ENOUGH B B M

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The Associated Press

LEVELAND—LeBron James pulled off his sunglasses, and there was no hiding the hurt in his eyes.

He had given everything he had, the best player turning into a better teammate, and it wasn’t enough.

“If I could have given more, I would have done it, but I gave everything I had,” he said on Tuesday after Cleveland’s 105-97 loss to Golden State in Game Six of the National Basketball Association (NBA) Finals.

And that’s more than just points, rebounds and assists. Throughout the year James had proven what it meant not just to be the star but to be the leader, even more during the NBA Finals.

“What’s evident to everyone is what a spectacular basketball player LeBron is. But he has become a great leader of his team,” Coach David Blatt said. “He’s become a guy that has evolved in terms of his role within the team and within the whole concept of what it is that we want to be about.”

James believed he could will Cleveland to a championship, with a confidence that turned almost defiance. Even as the Golden State Warriors had asserted themselves as the series went on, James said he didn’t doubt the Cavaliers could win until the clock reached zero.

James finished with 32 points, 18 rebounds and nine assists in another tremendous individual effort, but his outmanned Cavaliers lost the final three games.

His fourth loss in six NBA Finals trips left him wondering briefly if he’d be better off just missing the playoffs entirely, so it would hurt less.

“I didn’t win a championship,” he said, “but I’ve done a lot of good things in this first year back and, hopefully, I can continue it.”

He couldn’t end Cleveland pro sports’ lengthy title drought, a 51-year stretch that’s been so tough even some

Bob Myers, it meant the completion of a wildly successful transition from up-and-coming player agent to Warriors general manager in 2011.

For the Golden State players themselves, already record-setters for three-pointers per game in a playoff season, there was a huge ascension from just one year ago, when they finished sixth in the Western Conference and lost in the first round. They quickly became the first team since 1991 to win a championship with no players with previous NBA Finals experience.

Cleveland Coach David Blatt scrapped his one-game trial of matching the Warriors’ small lineup, allowing center Timofey Mozgov to return to quasi-prominence on Tuesday (17 points and 12 rebounds).

But the Cavaliers’ guards were off the mark, Iman Shumpert, Matthew Dellavedova, J.R. Smith and James Jones making only seven-of-29 shots.

Not that the Warriors cared about missed shots by opposing guards. The Bay Area had itself a basketball champion, four decades after the last one.

B M R Akron Beacon Journal

LEVELAND—How best to measure the pain of a fan base in the wake of the Cavaliers’ loss in the National Basketball Association (NBA) Finals?

Especially when, unlike Jose Mesa’s meltdown or Michael Jordan’s shot, it crept in, pin by pin piercing the well-punctured voodoo doll of Cleveland’s sports history.

Anderson Varejao’s torn Achilles.

Kevin Love’s dislocated shoulder.

Kyrie Irving’s fractured kneecap.

Matthew Dellavedova’s dehydration.

LeBron James’s exhaustion.

Pin by pin, jab by jab, prick by prick, Northeast Ohioans suffered. In a sense, they were being prepared for Tuesday night’s 105-97 loss to the Golden State Warriors at Quicken Loans Arena. The Warriors captured the best-of-seven series, 4-2, and earned their first NBA championship in 40 years.

Fans who have supported the Cavs, Browns and Indians with blind loyalty and financial sacrifice only to see the city’s title drought of 51 years stretch on could have been crushed.

But to many, this feels different. Different because James is still here.

Having the self-proclaimed “best player in the world” back home provides hope.

James, 30, will be in his prime for three or four more years, providing he avoids serious injury. A championship, a dynasty, or at least as much of a dynasty as there is any more, is still possible.

James didn’t win a title his first season in Miami with Dwyane Wade and Chris Bosh. Despite his summer 2010 prediction of “not two, not three, not four, not five, not six, not seven,” the Heat didn’t break through until James’s second year, then captured the Larry O’Brien Championship Trophy in back-to-back years. The Heat went to the NBA Finals all four seasons with James, but he was also denied by the Dallas Mavericks and the San Antonio Spurs.

So there is a feeling the Cavs can get back to the Finals “not two, not three” more times, especially considering the state of the Eastern Conference.

In his Sports Illustrated essay announcing his return to the Cavaliers, James warned it wouldn’t be easy.

“I’m not promising a championship,” James wrote in the piece, told to Lee Jenkins. “I know how hard that is to deliver.

We’re not ready right now. No way. Of course, I want to win next year, but I’m realistic. It will be a long process, much longer than it was in 2010. My patience will get tested. I’m going into a situation with a young team and a new coach.... ” When that essay hit the Internet last July 11, Cavs rookie coach David Blatt didn’t have Love, who arrived in a threeteam trade in August. Blatt didn’t have Timofey Mozgov, J.R. Smith or Iman Shumpert, acquired by General Manager David Griffin in two January deals.

After those moves, the Cavs did seem ready.

But as the injuries mounted and James’s supporting cast dwindled, each step on the playoff road seemed like a gift. Many wondered if the Cavs could beat the Chicago Bulls in the conference semifinals without Love, yet the Cavs won in six games. They captured the East crown, sweeping the Atlanta Hawks, even though Irving missed two games with foot and knee injuries. Then Irving went down in a Game One overtime loss to the Warriors, and the Cavs seemed destined for the broom.

Yet, they persevered, they overcame and until the end, displayed unparalleled fight. The Cavs went where they were seemingly incapable of going, extinguishing the firepower of the deep and talented Warriors to take a 2-1 lead before it all fell apart.

Even in defeat, there seems no reason for despair.

Love has said he’s coming back. Irving started to learn what it takes to be an elite professional. Tristan Thompson had a breakout season, like Irving following James’s lead.

There will be tough off-season decisions in regard to Thompson, Dellavedova, Shumpert and Smith, who could decline his player option, but the Cavs’ foundation is set.

The 51-year drought continues, but there is light at the end of the tunnel.

CSR EXPO Officials of the League of Corporate Foundations (LCF) promote the CSR Expo 2015 with the theme “Collaborate.

LEBRON JAMES falls short of leading his Cleveland Cavaliers to a crown. AP

local fans believe in the so-called Cleveland Curse.

But they also believe in James, the 30-year-old Northeast Ohio son who came home from Miami last summer and brought life back to the Cavaliers franchise.

He couldn’t bring them their first title, not with what he had left around him in these NBA Finals.

Kevin Love had been lost to a dislocated left shoulder in the first round. Then Kyrie Irving went down with a fractured left kneecap in Game One of this series.

James still willed the Cavaliers to a 2-1 lead and was so good there was even talk that he could join Jerry West as the only NBA Finals MVPs from losing teams.

Cavaliers fans sure believed he should have, the ones who remained to watch the award celebration booing loudly when Golden State’s Andre Iguodala was announced as the winner.

His departure for Miami in 2010 had turned the locals against him, led them to burn his jerseys in the streets. There was anger, hurt, even hatred in their voices when they jeered him when he came back for the first time with the Heat.

He became a two-time champion in Miami but, more important, grew up, learned what it would take to lead a team. He returned more mature than when he left, announcing his decision with a thoughtful essay, a sharp contrast to his widely criticized TV special in 2010.

He became a more assertive leader. He was already the best player.

It was a little surprising to hear him call himself that after Game Five, when he said he was still confident because he was the best player in the world. He usually leaves talking about his greatness to others.

But having belief is one thing; having sufficient help is another.

James didn’t, and the effort in trying to carry a team was too much even for one of sports’ most gifted athletes. He stood with his hands on his hips often in the second half, trying desperately to catch his breath while playing nearly 47 minutes.

“It’s never a success if you go out losing,” James said. “We put ourselves back where this franchise needs to be, being a contender. But we’ve still got a lot of work to do.”

SPORTS

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MAGNESIUM DEFICIENCY CAUSES LOW ENERGY LEVELS

Sustain. Revolutionize.” (From left) Roderick de Castro and Ma. Esther Santos, LCF board of trustees members; Natalie Christine Jorge, LCF board of trustees chairman; Social Welfare Assistant Secretary Javier R. Jimenez; Ma. Fe Perez-Agudo, chairman of Hari Foundation Inc.; Stephen Reily, CEO of Resorts World Manila; Chito Maniago, LCF Public Affairs director; and Monette Itturalde-Hamlin, secretary and membership head of LCF, show their solidarity after explaining to the media the objectives of this year’s edition of the CSR Expo. STEPHANIE TUMAMPOS

World Bank: Policy shifts can mitigate ‘gray tsunami’

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HEAL H&FITNESS HEALT HEALTH&FITNESS

S the planet’s popul at ion gets older, there are fears that a gray tsunami may make the possibility of golden aging more remote.

But a World Bank report released on Tuesday says global aging isn’t an unstoppable

PESO EXCHANGE RATES ■ US 45.1570

force and can be compensated for by policy initiatives.

By 2100, the world population is expected to increase from 7.3 billion to 10.9 billion, and the share of older people is increasing, raising concerns about health care, sustainability of pension systems, inter-

generational conflicts and a negative impact on economic growth and productivity.

While the report, “Golden Aging, Prospects for Healthy, Active and Prosperous Aging in Europe and Central Asia,” says there are challenges as S “W B,” A

■ JAPAN 0.3660 ■ UK 70.6797 ■ HK 5.8249 ■ CHINA 7.2735 ■ SINGAPORE 33.6440 ■ AUSTRALIA 35.0136 ■ EU 50.6210 ■ SAUDI ARABIA 12.0419 Source: BSP (17 June 2015)

A2

News

BusinessMirror

Thursday, June 18, 2015

‘PHL to outpace growth of advanced economies’

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he Philippines—due to demographic factors—will be among the five economies that will see the fastest growth globally from 2020 to 2045, an American think tank said on Wednesday.

According to IHS Inc., the longterm potential growth rate for advanced economies will decelerate to an average of 1.8 percent, down from the average estimate of 2.5-percent economic output growth during 1990 to 2007.

“Although actual real gross

domestic product [GDP] growth will fluctuate over business cycles and may well exceed 2.5 percent, or even 3 percent, the longerterm trend growth rate for advanced economies is 1.8 percent.

For the United States, long-term growth potential is 2.3 percent per

year,” IHS added.

The opposite will be true, however, for Asia-Pacific economies.

The IHS said the five economies with the highest potential growth are all in Asia Pacific: India, Vietnam, the Philippines, Indonesia and China.

The next five countries with the highest growth potentials are Chile, South Africa, Peru, Egypt and Angola.

Advanced economies, specifically Japan, Italy, Switzerland, Kuwait and Portugal, will have the slowest potential growth rates as demographic factors kick in.

The potential real GDP that the study refers to is different from the real GDP. Potential real GDP

estimates a country’s economic performance at a constant inflation rate over a certain period.

The potential GDP typically refers to the maximum economic output a country can sustain over a long period assuming that it is maximizing its use of resources and its whole employment force is working at full capacity.

Estimates of potential real GDP provide benchmarks in identifying phases of an economy’s business cycle and serve as a guide to fiscal and monetary policies.

IHS used the Global Link Model in making the prediction, linking 68 individual country-models and assessing global economic drivers.

Catherine N. Pillas

news@businessmirror.com.ph

BOI. . .

Continued from A1

The BOI is mandated to carry out this cross-checking and have reportedly saved the government P1.7 billion in revenues in 2010, representing the difference between the amount of incentives that companies have requested and those that have actually been approved by the BOI. Quimbo countered during the same hearing that the BIR already undertakes its own assessment and, as such, BOI’s validation is redundant.

The BOI is the only investment-promotion agency (IPA) that does validation on the claims of its registered enterprises. A BOI official privy to the discussions said they will be closely

World Bank. . .

guarding the bill—which will be tackled during a bicameral committee conference during Congress’s break—as the proposal is expected to be inserted during the meeting.

Quimbo’s counterpart in the Senate, Ways and Means Committee Chairman Juan Edgardo “Sonny” Angara, has declined to comment on the specific proposal. He, however, maintained that Timta’s primary aim is just to inject transparency into the incentive-granting work of BOI and other IPAs. The BOI has said earlier it will oppose any move to remove its authority to validate incentive claims, fearing that its registered companies will be left in the mercy of the BIR.

Continued from A8

So-called productivity losses also can be compensated for by in-migration. But in countries where productive workers are leaving, “migration can exacerbate the aging of a society,” Bussolo said. “ The number of years of schooling changes the projection, too,” Bussolo said. “We’re still below the

level where the peak of productivity is reached.”

Better educational opportunities and more capital could ultimately boost the productivity of the smaller number of younger workers, said Hans Timmer, the World Bank chief economist for Europe and Central Asia. TNS

MRT 3 to start seeing needed improvements by July–DOTC Continued from A8

$150-million investment that involves the procurement of a total of 96 new train cars and the rehabilitation of the existing 73 coaches, increasing its capacity by fourfold to 1.2 million daily passengers.

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

Separately, Metro Pacific Investments Corp.

(MPIC) is proposing to shoulder the upgrade costs

of the train system and release the government from the bondage of paying billions of pesos in equity rental payments.

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

The venture would effectively expand the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals.

The multimillion-dollar expansion plan would double the capacity of the line to 700,000 passengers a day from the

current 350,000 passengers daily.

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

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

The P4.64-billion proposal, submitted in February with Filipino partner Comm Builders and Technology

Phils. Corp. (CB&T), calls for the complete overhaul of the 73 light-rail vehicles of the MRT; the replacement of the rails; the upgrading of the line’s ancillary system, the upgrade of the track circuit and signaling systems; the modernization of the conveyance system; and a three-year maintenance contract.

The train system has been operating at overcapacity since 2004. Currently the line serves nearly 550,000 passengers per day.

It even reached, at one point last year, the 650,000daily passenger mark. It has a rated capacity of 350,000 daily passengers.

news@businessmirror.com.ph

The Nation BusinessMirror

Ombudsman flip-flops on Makati mayor’s case

By Joel R. San Juan

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HE Supreme Court (SC) has delayed its resolution of the case involving the suspension of Makati Mayor Jejomar Erwin “Junjun” Binay Jr. owing to the apparent flip-flopping of Ombudsman Conchita Carpio-Morales on the issue of jurisdiction of the Court of Appeals (CA) over the case.

In a resolution issued during its regular en banc session held on Tuesday, the Court noted that the Ombudsman has changed her theory previously raised during the oral arguments held in Baguio City in April and in the pleadings filed by the Office of the Solicitor General (OSG), which acted as counsel for the Ombudsman.

The Court explained that during the oral arguments and in the pleadings of the OSG, they argued that although the CA had jurisdiction over Binay’s petition for certiorari it had no authority to issue a temporary restraining order (TRO) or a writ of preliminary injunction (WPI) to enjoin the Ombudsman from implementing its preventive suspension order against the mayor.

It pointed out that Morales new theory contained in her memorandum submitted after the oral arguments is that the CA has no jurisdiction over the mayor’s petition as it solely belong to the Court under Section 14, paragraph 2, Republic Act 6770, or the Ombudsman Act. “Respondent Binay’s memorandum makes no reference to this argument. To give respondent the opportunity to respond to the new theory

and for a full disposition of this case, the Court required respondent to comment on the Ombudsman’s memorandum and for the Ombudsman to comment on respondent’s memorandum,” the Court ordered.

The SC also noted that the Ombudsman submitted its own memorandum on the issue despite that the Solicitor General Florin Hilbay ntered his appearance as counsel for the Ombudsman.

Thus, the Court also directed Hilbay to comment on the Ombud sm a n’s memora ndu m “ i n view of its mandate as the lawyer of the government.”

The Court gave both the OSG and Binay 10 days from receipt of notice to comply with the order.

The SC was supposed to already decide on the case upon filing of the respective memoranda of parties but owing to the Ombudsman’s new position, the Court’s resolution is expected to be delayed.

Binay earlier told the SC that the issuance of the TRO and WPI was well within the mandate, authority and jurisdiction of the CA. His lawyers argued that the Ombudsman failed to exhaust all legal remedies available to it by not filing a motion for reconsideration before the CA to question the TRO. The mayor accused the Ombudsman of forum shopping when it elevated the issue before the SC, when his petition challenging the preventive suspension order is still pending with the CA. In her petition filed on March 25, Morales asked the SC to stop the implementation of the CA’s TRO that she said had no legal effect.

Turkish warship visits Manila

TCG Gediz

By Recto Mercene

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CG Gediz docked at Manila’s South Harbor on Monday, making a historic achievement as the first Turkish Navy frigate to drop anchor in the Philippines.

The ship, which came from Japan, is on a three-day visit to Manila before sailing on and calling on a total of 18 ports in 14 African and Asian countries, including the Philippines, covering 20,300 nautical miles by the time it has finished its 122-day journey.

The ship left the port of Aksaz, Turkey, under the command of Capt.

Yusuf Kocaman, on April 1.

“The visit aims to strengthen the bilateral relations and people-to-people contacts, as well as fostering ties between the two countries,” Kocaman said at the start of a dinner reception onboard the ship on Tuesday.

Invited were ranking officials of the Philippine Navy, Armed Forces Chief of Staff Gen. Gregorio Pio Catapang, Turkish Ambassador to the Philipines Esra Cankuros and Rear Adm. Aydin Sirin of the Turkish Navy, who flew from Istanbul to attend the occasion.

Also invited was United Nations High Commissioner for Refugees Bernard Kerblat.

“Despite the geographic distance, Turkish people have always shown solidarity with Filipinos in different times, and the latest example was the support when Supertyphoon Yolanda hit the Philippines in November 2013,” Kocaman said.

He said Gediz’s voyage was launched

to commemorate the 125th anniversary of the sinking of the Turkish frigate Ertugrul, which was sent by the Ottoman Sultan Abdulhamid II to Japan to reciprocate the visit to Istanbul by the Japanese Royal family.

Ertugrul sailed on July 14, 1889, under the command of Usman Pasha, and dropped anchor at Yokomana port in June 1890, after visiting several Asian countries along the way.

However, Ertugrul’s return voyage to Turkey ended tragically when the frigate was caught by a typhoon and sunk on September 16, 1890, near the Japanese port of Kushimoto.

Of the 600 officers and ratings onboard, only 69 survived.

Kocaman said commemorating the 125th anniversary of the Ertugrul sinking is to “show our deep respect and appreciation to our heroes who sacrificed their lives.”

Cankorus hailed the “warm political climate between Turkey and the Philippines as ground for cooperation in every possible field.”

She said the visit of frigate Gediz will not only contribute to the strengthening of bilateral relations, “it will also foster the ties between the armed forces of the two friendly countries.

She said she is lucky that during her posting here one-and-a-half years ago, she saw Turkish Airlines have started operating out of Manila.

She announced that a Turkish officer has been appointed to Manila last August 2013, to speed up efforts of military cooperation between the two countries.

Editor: Dionisio L. Pelayo • Thursday, June 18, 2015 A3

Palace defends Binay, Roxas, others against premature campaigning raps

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By Butch Fernandez

ALACAÑANG on Wednesday defended Vice President Jejomar C. Binay, Interior Secretary Manuel A. Roxas II and other high-profile Aquino administration officials perceived to be defying the law against premature politicking well in advance of the official campaign period for candidates eyeing to run in the 2016 elections.

Presidential Spokesman Edwin Lacierda said Binay, Roxas and other potential 2016 aspirants holding key posts in the Aquino administration are actually “just

doing their jobs.”

“If Secretary Roxas distributes patrol jeeps as part of his mandate to modernize the Philippine National Police, as well,

is that campaigning?” Lacierda asked at a Palace briefing on Wednesday. “If you distribute wheelchairs, the Vice President [Binay] distributes wheelchairs, is that campaigning? He always says that it is part of his [service for his] constituency.”

Lacierda added: “So, one man’s work, may be another man’s campaigning, but that’s his work.”

He asserted that the Aquino government remains committed to its mandate even as he conceded that “people talk about campaigning, people talk about 2016 elections, and that’s understandable.”

“But insofar as the Aquino administration is concerned, the work is out there. We continue to tread the daang matuwid. We have committed ourselves to better the welfare of the Filipino people and it takes not just six years. It will take years and years of hard work

to make sure that our promise, the President’s promise to his bosses will be fulfilled in these six years time,” he said.

During the briefing, Lacierda insisted that high-profile Aquino administration officials, in delivering basic public services to the people, are simply performing their assigned tasks.

“Who’s campaigning? I mean, we are working. If somebody goes to... If the DSWD [Department of Social Welfare and Development] Secretary goes and visits an evacuation center or attends to the CCT [conditional cash transfer] beneficiaries, is that campaigning?” he asked adding: “If the DOH [Department of Health] secretary goes and visit a rural health station and sees the concerns of the people and addresses medical concerns, can that be considered campaigning?”

International People’s Tribunal indicts Aquino, Obama for killing of SAF 44

By Marvyn N. Benaning Correspondent

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HE killing of 44 members of the Special Action Force (SAF) in Mamasapano, Maguindanao, on January 25 has become one of the biggest reasons for the indictment of President Aquino and US President Barack Obama and their trial next month before the International People’s Tribunal (IPT) in Washington, D.C. In a three-page abstract of the indictment, lawyer Edre Olalia, secretarygeneral of the National Union of People’s Lawyers, said Aquino and Obama have been charged with gross violations of human rights, particularly civil and political rights, including extrajudicial killings, massacres, tortures and illegal arrests and detentions since 2010; gross violations of economic, social and cultural rights; and gross violations of the right to national selfdetermination.

The judge for the IPT trial, to be conducted from July 16 to 18, will be Australian Sen. Lee Rhiannon.

Prosecuting Aquino and Obama will be former US Attorney General Ramsey Clark, who opposes US military intervention.

The jurors are Azadeh Shahshahani, president of National Lawyers Guild in the US; Camilo Perez Bustillo, a member of the Committee on the Rights of Indigenous Peoples of the International Law Association; Rev. Dr. Molefe Tsele, a former South African ambassador who also served as general secretary of the South African Council of Churches; and Rev. Malcolm Damon, executive secretary of the Economic Justice Network and an executive member of the Industrial Ministry of the Reformed Church family in South Africa.

In a news conference, Olalia revealed that the IPT will hear the charges against Aquino and Obama and take into consideration the testimonies of Edita Burgos, mother of missing activist Jonas Burgos; Glenda Co, wife of botanist Leonard Co, who was killed by soldiers in 2010; Nikki Gamara, daughter of political detainee Reynante Gamara, who is detained; Cristopher Garcia, spokesman for Alyansa ng Manggagawang Bukid sa Asyenda Luisita; and Kharlo Manano, secretary-general of Salinlahi Alliance for Children’s Concerns, lead convener of Save Our Schools Network.

During the same briefing, the relatives of human-rights violation victims, including Lorena Santos, secretary-general of the Desaparecidos, an organization of families whose members have been snatched and remain missing since 2001, asked Vice President Jejomar C. Binay, a former human-rights lawyer and declared presidential aspirant next year, where he stands on the

issue of abuses by the Aquino administration.

Binay was also detained during the imposition of martial law for fighting the Marcos administration and leading a lawyers group fighting the Marcos administration.

Burgos assailed the failure of the Aquino administration to find his son, a development worker who specialized in farming issues, while Co continues to seek justice for her husband, who was shot dead on suspicion that he was a member of the New People’s Army in Leyte.

The case against Aquino and Obama for the Mamasapano bloodbath is in-

cluded in the third round of the indictment, which covers gross violations of the right to national self-determination.

Olalia said US military intervention and troop deployment in the Philippines, through the Visiting Forces Agreement, RP-US Mutual Logistics Support Agreement and the RP-US Enhanced Defense Cooperation Agreement violate Philippine sovereignty and paves the way for meddling and direct intervention.

The indictment said intervention by the US government and betrayal of public trust by Aquino in the Mamasapano bloodbath led to the deaths of the 44 SAF members, 18 members of

the Moro Islamic Liberation Front and seven civilians, five of them children.

“This trial represents the first symbolic act to hold President Aquino principally liable for the Mamasapano bloodbath, along with President Obama, since they were responsible for the operations in which US agents were deeply involved,” Olalia stressed.

Relatives of the SAF 44 have held Aquino liable for the deaths of the police commandos who were denied support by military and air force units stationed nearby and argued that since Aquino gave the go-signal for its implementation, he should be answerable for its bloody outcome.

Economy

A4 Thursday, June 18, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

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PHL-Germany trade grew 38.1% in Q1 to $1.55B

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By Catherine N. Pillas

he Philippines and Germany registered a marked increase in bilateral trade in the first quarter of 2015, according to the German-Philippine Chamber of Commerce and Industry (GPCCI), fueled by a renewal of interest of German firms in the Philippines.

In a news statement, GPCCI said bilateral trade registered a recordhigh of 38.1-percent increase in the first quarter of 2015, or from $1.17 billion in the first quarter of 2014 to $1.57 billion this year.

Trade growth remains in favor of the Philippines with exports increasing to $860.6 million during the first quarter of 2015 compared to the $758.2 million during the same period last year, according to data by the Federal Statistical Office of Germany.

German companies remain interested in doing business with the Philippines, reports the GPCCI, citing the P3.77-billion contract of Ger-

man company Voith Turbo to supply railway components and drivelines for the new 48 light-rail vehicle train sets for the Metro Rail Transit Line 3 of the Department of Transportation and Communications.

Voith Turbo, represented in the Philippines by Maschinen & Technik Inc., is a leading player in German drivelines technology.

GPCCI Executive Director Peter Kompalla said he is confident that German firms such as Matec Solar Power, a firm engaged in renewable energy, will increase its presence in the Philippines which is rich in natural energy resources such as solar,

wind and hydroelectric.

“The Philippines is, indeed, back in the radar screen of German investors,” the GPCCI official said.

He said many factors contribute to the growing interest in the Philippines such as governance reforms of the Aquino administration and the positive investments-grade outlook by credit rating agencies Moody’s and Standard and Poor’s.

On a year-to-year basis, increase in bilateral trade volume remains in favor of the Philippines with export growth to Germany at 16 percent to $3 billion in 2014, compared to $2.59 billion in 2013.

Steel angle bar makers to DTI: Extend implementation of safeguard measures

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teel angle bar manufacturers are pressing the Department of Trade and Industry (DTI) to approve the final extension of safeguard measures on the imports of the commodity to jump-start the sluggish growth of the local industry.

“We still need the safeguard measures, flat growth kami last year.

We’re waiting for the approval of the secretary [of DTI],” said Ramon Khu, executive director of the Steel Angles, Shapes, and Sections Manufacturers Association of the Philippines Inc. (Sassmapi) in an interview.

In an interview at the sidelines of the Federation of Philippine Industries’s launch of the Fight IT (Illicit Trade) movement, Khu said they are hoping that the DTI will approve the extension of the imposition of safeguard measures for another four years.

In February the Tariff Commission (TC) released its findings on the petition of members of Sassmapi, to extend the imposition of the safeguard duties on steel angle bars imports.

TC recommended the imposition of P3,345 per metric ton (MT) tariff on imports of steel angle bar for four years, saying that the local industry remains in danger given the excess production of neighboring Asian countries. Eighty-six percent of the country’s import volume of steel angle bars is sourced from China.

Safeguard measures is a type of trade remedy that may be exercised by a domestic industry player if it finds that the increase in the importation of a product that it competes with is damaging to the domestic industry.

Safeguard measures come in different forms as determined by the

implementing authority such as increased tariffs (including tariff quotas), surcharges, quantitative restrictions and import authorizations.

The DTI is due to come out with the definitive safeguard duty which may be lower than the TC’s recommendation any day from now.

Sought for comment, lawyer Luis M. Catibayan of the DTI’s Bureau of Import Services said they have yet to decide on the matter.

If approved, this would be the final extension to be given to the local industry to prop up their production and growth. Under the law, safeguard duties can only be imposed for a period of 10 years.

The government approved the first imposition of safeguard duty in 2009 with a duty of P7,700 per MT. The industry sought for an extension in 2012, and imports were slapped with a reduced duty of P3,901.08.

Notably, Khu added that as the local steel angle bar manufacturers are already plagued with issues of smuggling, the safeguard duty extension will provide relief.

“We have safeguard duties so we have a level playing field. But at the same time, may problema pa rin sa smuggling,” Khu said.

Khu said that in 2014, the Bureau of Customs (BOC) and the DTI seized illegal steel angle bars worth P2,000,000, and this amount is “just the tip of the iceberg.”

But with the efforts of the BOC and the DTI in clamping down on smugglers, the production capacity of Sassmapi members improved by 20 percent in that same year.

This improvement may be reversed if smuggling continues and the DTI delays implementation of the recommendation of TC.

Flip-flops

Two lady storekeepers arrange piles of soft-padded alfombra slippers with wooden soles at a shop in Pateros where most of the manufacturers of this type of footwear are located. Alyssa Salen

‘BLBAR passage assures flow of resources for Bangsamoro’

By Jovee Marie N. dela Cruz

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he passage of the proposed Basic Law on the Bangsamoro Autonomous Region (BLBAR) will bring in additional financial resources to support the development of a reconstituted Autonomous Region in Muslim Mindanao (ARMM), the research body of the House of Representatives said.

The Congressional Policy and Budget Research Department (CPBRD), in a policy brief, said that more resources will go to the Bangsamoro through the devolution of some national taxes, higher shares from

existing revenue-sharing schemes, and a block grant that shall be automatically appropriated for the regional government once the peace measure is passed.

The BLBAR aims to create the new Bangsamoro juridical entity replacing the ARMM. Under the proposed BLBar, the Bangsamoro government and the national government will get 75 percent and 25 percent, respectively, of the collected internal revenue in the region.

However, the capital-gains tax (CGT), donors tax, estate tax and documentary stamp tax (DST) will all go to the Bangsamoro government.

On metallic resources, the sharing will be 75 percent to the Bangsamoro and 25 percent to the national government, while 100 percent of the nonmetallic resources will go to the autonomous region alone.

Meanwhile, income derived from fossil fuels (petroleum, natural gas and coal) and uranium will be shared equally between the central and Bangsamoro governments.

According to the research body, at present, it is the national government through the Bureau of Internal Revenue (BIR) that collects the CGT, DST and the donor and estate taxes.

Meanwhile, the CPBRD said that

Retailers told: Comply with SRP

briefs

he Department of Trade and Industry (DTI) and the House Committee on Trade and Industry, are enjoining retailers to comply with the specified Suggested Retail Prices (SRPs) amid speculation of rising fuel prices affecting the pricing of basic and prime goods.

“Once again, there are speculations on the increase on prices of basic and prime goods due to the spikes in fuel prices and the department reminds retailers to sell their products that are among the basic and prime lists within their SRPs,” said DTIConsumer Protection Group (CPG) Undersecretary Victorio Mario A. Dimagiba in a news statement released on Wednesday.

The DTI’s list of SRPs for basic necessities and prime commodities that was issued in mid-April still stands, he said. “We have not received requests from the industries for price adjustments, thus, retailers are expected to always observe the existing SRPs,” Dimagiba added.

Dimagiba conducted market inspection on Wednesday together with the House Committee on Trade and Industry, chaired by Mark A. Villar.

Guided by the Price Act, the DTI

Bureau-Department of Energy, delivers his message during the 2015 Philippine International Biomass Conference on the theme “Exploring the Market Potentials of Biomass for Bio-based Fuel and Energy” held on Tuesday at Widus Hotel and Casino in Clark, Pampanga. PNA

CIVIL Aviation Authority of the Philippines (Caap) Director General William K Hotchkiss lll directed aerodrome operators of all government-run commercial airports in the country to develop and implement safety directive action plans and programs to address the issue of unauthorized entry by pedestrians and animals into each airfield’s safety area.

He noted that airport managers and officers must fully comply with the provisions of the Civil Aviation Regulations “to implement the relevant standards, requirements and recommended best practices relating to the safety in and around

conducts regular monitoring activities on the price and supply of basic necessities and prime commodities under its jurisdiction. Basic goods include canned fish and other marine products, processed milk, coffee, laundry soap, detergent, candles, bread, salt, potable water in bottles and containers, and locally manufactured instant noodles.

Prime commodities are flour, processed and canned pork, processed and canned beef and poultry meat, vinegar, patis, soy sauce, toilet soap, paper, school supplies, cement, clinker, galvanized iron sheets, hollow blocks, construction supplies, batteries, electrical supplies, light bulbs and steel wires.

In its report from May to June, the DTI only found two retailers from the total number of

The city government of Parañaque expects to generate at least 30,000 more jobs as business establishments, particularly first-class hotels and entertainment venues located in the city will soon be fully operational by next year.

Parañaque City Mayor Edwin L. Olivarez hopes the city will continue its growth momentum, even as it is now well on its way into becoming one of the top business and tourist destinations in the country.

Olivarez is positive on the economic developments in which investors and business locators continue to express their interests to move in and put their investments in Parañaque City.

To ensure job security for its constituents, the city government directed its local public

German exports to the Philippines, meanwhile, grew by 18 percent to $2.24 billion in 2014 from $1.90 billion in 2013 GPCCI figures showed that top Philippine exports to Germany include data processing equipment, electrical and optical products; electrical equipment; clothing; food and fodder; as well as chemical products.

Top German exports to the Philippines include data processing equipment; electrical and optical products; food and fodder; other vehicles; pharmaceuticals and related chemical products.

Congress should consider some provisions of the peace measure.

The research body also said that Congress may have also consider the issues on the equalizing function of transfers; the tendency of subnational governments to depend on transfers, and mechanisms to ensure fiscal responsibility and accountability.

“In the Philippines where the tax system remains highly centralized, fiscal transfers play an important role in bridging the gap between revenue capacities and expenditure assignments, and in equalizing opportunities across regions,” it said.

“It is important that any planned expansion of the revenue sources for the Bangsamoro should be assessed alongside the FAB [Framework Agreement on the Bangsamoro] Annex on Power Sharing, the planned change in form of government, and the estimated size of the bureaucracy with the proposed creation of numerous committees and intergovernmental bodies,” the lower chamber think tank said.

Also, the research body added that there is a need to decide whether shares of local government units within the Bangsamoro from internal revenues, natural resource tax, fees/charges, and taxes on minerals collected within the autonomous region will be defined in the measure or that some intra-regional transfer scheme will be left to the Bangsamoro government to design.

“It is [also] crucial that accountability mechanisms to ensure fiscal and systems control both internally and externally are put in place. Fiscal responsibility rests on the leadership of the Bangsamoro government so that a strong internal control system can be truly helpful in improving efficiency of the government. Yet, the role of oversight bodies particularly that of the Commission on Audit remains vital in the interest of the general public and the nation as a whole,” the CBPRD said.

keep pedestrians, animals out of airports—caap chief

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Harnessing renewable energy Director Mario C. Marasigan (left) of the Renewable Energy Management

200 supermarkets and grocery stores monitored in the National Capital Region that were selling some basic and prime goods more than the SRP. Also based on the Price Act is the DTI’s list of SRPs for basic necessities and prime commodities under its jurisdiction. The DTI-CPAB receives quarterly submissions of SRPs from the manufacturers whether there are price changes or none.

It also analyzes the causes on the submitted price changes and checks if these prices are appropriate.

SRPs are issued by manufacturers to retailers to ensure market share and fair competition in the market. Production cost, distribution cost, and profit margins of retailers and distributors are factored in. Catherine N. Pillas

airports, particularly the runway safety area.”

“Airport safety programs should specifically address the subject of runway incursion prevention as it relates to the safe operations of aircraft, traffic management, vehicle pedestrian movement on the maneuvering area and aerodrome management,” he said.

The management of Laoag International Airport heeded to the directive, conducting a series of outreach programs in four barangays near the airport to address the increasing cases of runway incursion involving unauthorized entry of vehicles, pedestrians and animals. Lorenz S. Marasigan

parañaque expects to generate 30,000 jobs by 2016 employment and services office to strictly enforce the city government’s policy of requiring companies to hire at least 20 percent of their employees from the pool of local applicants to give priorities to locals who will be recommended by the city hall “after undergoing a thorough screening, evaluation and job matching processes.”

Olivarez said among the companies which they expected to provide employment opportunities by next year include Aseana City which could generate at least 10,000 jobs in the city.

The local chief executive also said these encouraging developments would lead local officials to work harder as they continue to find ways to better serve the people especially the poor and the disadvantaged and make them productive members of the society. PNA

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95.1% or P1.27T of 2015 national budget disbursed, DBM’s Abad says

By Estrella Torres

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he Department of Budget and Management (DBM) announced that it has released a total of P1.27 trillion, or 95.1 percent of the total P2.606-trillion national budget for this year, to allow agencies to speed up spending to sustain economic growth.

Budget Secretar y Florencio B. Abad said that of the P2.606trillion budget for 2015, the total allotments released for the same period amounted to 83.9 percent, or P2.19 trillion. The fund releases cover both the 2015 General Appropriations Act (GAA) and releases for Automatic Appropriations.

“We are also calling on our major implementing agencies—particularly those with hefty budgets and large-scale programs—to make the most of the funds that have already been released to them,” Abad said in a news statement released on Wednesday.

He stressed that “when government departments and agencies don’t spend efficiently, we won’t just be looking at slower economic growth. We’re also looking at potential delays in the delivery of public goods and services.”

The early budget release is based on the fiscal management reform initiative dubbed as General Appropriations Act-as-Release-Document where departments and agencies can begin obligating funds, start procurement procedures, and enter into contracts w ithout secur ing a Special Allotment Release Order (Saro) from the DBM. He said the measure allows agencies to use the GAA as the official release document, which facilitates speedier project execution and reduces bottlenecks.

“With the majority of the allotments for agencies already released, we can now concentrate on improving expenditure levels across the bureaucracy. We’ve also enacted measures that would make budget execution more efficient to help us ramp up public disbursements,”Abad said.

The budget chief said of the Automatic Appropriations, 94.1 percent has been released, while 78.9 percent from the 2015 GAA has been released.

The DBM has been widely criticized for its underspending of the P303-billion budget for 2014 but the agency believes that problem lies in the lack of planning and training for government implementer of procurement procedures.

“We’re already implementing measures to improve public spending. However, a lot of institutional weaknesses still need to be addressed if we want to accelerate government spending and support further economic growth in the country. Agencies will have to work closely with us so we can achieve this,” Abad said.

Among the measures to improve planning capacities in the national and local governments is the creation of a subcommittee of the Development Budget Coordinating Coordination Committee that will be tasked to look into and evaluate project proposals costing less than P1 billion. This subcommittee will be headed by the National Economic and Development Authority, he said.

Thursday, June 18, 2015 A5

Malampaya gas-supply restriction triggers another Luzon yellow alert on Wednesday

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By Lenie Lectura

uzon was placed on yellow alert on Wednesday, the second time this week, because of a reported gas-flow restriction from the Malampaya facility.

The Malampaya facility accounts for 40 percent of the Luzon grid’s requirements. It supplies natural gas to Kepco Philippines’s 1,200-megawatt (MW) Ilijan combined cycle plant and to the 1,000MW Santa Rita and 500-MW San Lorenzo natural gas plants of First Gas, a subsidiary of the Lopezes’ First Gen Corp.

Manila Electric Co. (Meralco) sources about 45 percent of its power requirement from the gas plants which, in turn, rely on Malampaya to fuel their facilities.

“It’s a yellow alert today [on Wednesday] in Luzon from 11 a.m. to 12 noon and from 1 to 3 p.m.,” Meralco Utility Economics Head Larry Fernandez said. “It was because of a restriction in gas supply to First Gas’s plants and Ilijan, as well.”

He said Ilijan Block B was shut down at 11a.m. because of reduced gas supply.

Meralco was alerted on Wednesday morning that “SPEX [Shell Philippines Exploration B.V.] imposed a natural gas restriction from Malampaya platform due to undisclosed technical problem effective 1100 [hours] today, limiting Santa Rita and San Lorenzo combined natural gas allocation to about 403 MW. “Santa Rita modules 10 and 30 and San Lorenzo modules 50 and 60 will subsequently change over from natural gas to liquid fuel starting at 0901 [hours].”

SPEX is the upstream company of Shell in the Philippines in charge of operating the Malampaya Deep Water Gas-to-Power Project. It did

not reply when sought for comment.

The Meralco official also said that a yellow alert in Luzon was issued on Monday. “Like on Wednesday, there was a reduction of Malampaya supply. The yellow alert was from 1 to 3 p.m.”

Moreover, a similar incident occurred last month. This resulted in a spike in Wholesale Electricity Spot Market prices.

A yellow alert means that contingency reserves are below the minimum level set by the regulator but does not necessarily mean power outages or blackouts. But a yellow alert could turn red and power outages would occur when reserves fall.

The ideal buffer is at least 647 MW. When power reserves dwindle and fall below 647 MW, which is the largest-running power-generating unit. A yellow alert is issued by the National Grid Corp. of the Philippines (NGCP).

A check with the NGCP power situation outlook showed that as of 1 p.m. on Wednesday, power reserve in Luzon was expected at 355 MW. System capacity was expected at 9,048 MW with a peak demand of 8,693 MW. Meralco, said Fernandez, was

alerted by the NGCP. The Department of Energy (DOE) had also called the attention of Meralco to put on standby its Interruptible Load Program (ILP) in case there is a need to activate it.

Under the ILP scheme, big power users will be asked to run their own generators when supply is short in the summer months, instead of getting their power from the Luzon grid. In exchange, they will be compensated for their fuel costs.

The electricity that would not be taken from the grid would be available to households and other users, sparing them from rotating blackouts.

As of latest count, Meralco has signed up more participants for the ILP, bringing to 667.29 MW of committed interruptible load (CIL). It has registered 80 customers from the private sector that will contribute 393.36 MW of capacity. It, likewise, signed up 1.7 MW of CIL from the government sector.

Contestable customer participants has signed up a total of 264.73 MW of interruptible load. Of which, 110.44 MW will come from different Retail Electricity Suppliers and 154.29 MW from MPower, the retail electricity supplier unit of Meralco.

Meralco may have exceeded collection on underrecoveries

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a n i l a E l e c t r i c C o.

(Mera lco) may again catch the ire of the public for allegedly exceeding its collection on under recoveries.

The utility firm was late in filing its application before the Energy Regulatory Commission (ERC) to implement a lower distribution rate of P1.39 per kiloWatt-hour (kWh). Meralco was targeting to have this implemented in July but it filed its application only on June 10.

The ERC strictly observes the 30day rule in which an application for any rate adjustment should be filed at least one month before the intended date of implementation.

“As alleged by Meralco, it may already exceed its collections for its under recoveries for the second regulatory period [RP] if it continues with the implementation of its current rates. Hence, it seeks to implement interim distribution rates, which are about 10 percent lower than existing,” ERC Executive Director Francis Saturnino Juan said in a text message.

But Meralco Spokesman Joe Zaldariaga said the public should not be alarmed because the necessary adjustments will be implemented as soon as it receives approval from the ERC. “If it can’t be implemented in July then it will be in August. There will be adjustments in the bill. We will look into it,” he said.

Based on rough estimates by the ERC, Meralco’s collection for under recoveries could exceed by P472 million in a month.

The planned P1.39-per-kWh temporary tariff is 10.4 percent less from the current distribution, supply and metering charges.

T he proposed 10.4 -percent reduc t ion , i f approved , w i l l be applied across all customer classes of Meralco. This translates to the following reductions in the total bill of residential customers at var ying consump-

T

months of the year compared to the P117.266 billion it collected from the same period last year.

Likewise, collections from nonoil was up by 5 percent year-on-year from P21.623 billion in April 2014 to P22.699 billion in April 2015.

ENERGY DEPT APPROVES BEMC REQUEST TO TRANSFER C.O.C. The Department of Energy (DOE) has approved the request of Brixton Energy and Mining Corp. (BEMC), a unit of Philex Petroleum Corp., to transfer the rights assigned to it under coal operating contract (COC) 130.

BEMC, in January 2014, requested approval of the Deed of Assignment (DA) dated January 6, 2014, by and between BEMC and Grace Coal Mining and Development Inc. (GCMDI) over COC 130 which covers potential coal reserves in Diplahan and Buug, Zamboanga Sibugay.

The DOE approved its request.

In a letter dated May 27, Energy Secretary Carlos Jericho L. Petilla said that “after a thorough technical, financial and legal evaluation, we found GCMDI to be technically, financially and legally capable and competent to undertake the coal exploration and development and take over as operator of COC 130.

Accordingly, the transfer/assignment in favor of GCDMI is approved.”

The letter was released by Philex Petroleum in its disclosure to the stock exchange on Wednesday.

“As the new coal operator, GCMDI shall assume and perform the work obligations and commitments including the remaining work and financial commitments in the approve five-year work program of Brixton Energy, as provided in COC 130, and abide with all applicable laws, rules and regulations,” Petilla added. Lenie Lectura

d.o.s.t.-fprdi trains furniture, handicraft workers in lubao, pampanga LUBAO, Pampanga—The Department of Science and Technology-Forest Products Research and Development Institute (DOST-FPRDI) has conducted training that would hone the skills of furniture and handicraft workers here on bamboo finishing.

FPRDI forester Zenaida R. Reyes said the training was held at the Santa Catalina Bamboo Negosyo Village, a spin-off project of the provincial government through the Department of Trade and Industry’s “industry cluster approach.”

The village has been producing engineered bamboo products like armchairs, e-wall panels, ceiling tiles, floor tiles, wall décors and novelty items since its launch in 2010.

Spearheaded by the local government of Lubao and assisted by the DOST regional office, the training taught participants on the proper way of applying finishes to various kinds of bamboo products.

“The participants learned about the step-by-step process of bamboo finishing—from surface preparation until the application of coatings and finishes,” Reyes said. PNA

Arch of friendship Workers put finishing touches on the newly refurbished Filipino-Chinese Friendship Arch in Binondo, Manila, amid the simmering territorial dispute between the Philippines and China over some portions of the West Philippine Sea. Roy Domingo

tion levels: 200 kWh—P 52; 300 kW h—P89; 400 kW h—P134; and 500 kW h—P201.

Meralco said the lower rate it is asking for is the result of the removal of the second RP underrecovery component which formed part of the average distribution prices approved by the ERC in Meralco’s Final Determination for the third RP. Meralco clarified that it will be undergoing a reset process for the fourth RP under the Performance-Based Regulation rate setting methodology. Pending the issuance of applicable rules that would govern the fourth RP reset filing, it

will be implementing an interim rate, effective upon approval by the regulator.

According to Meralco, the distribution-related components of the electric bill have not changed since July 2014 and are lower than the rate in the same period last year.

Together, the overall distribution charge accounts for only 17 percent of the average customer bill. The rest are pass-through.

Meralco said that it has sought a provisional approval from the ERC so that it may immediately apply the lower charges to its customers.

When sought for comment,

Meralco Senior Vice President Al Panlilio said necessary adjustments may be made in the billing of its more than 5 million customers. “That can be recomputed. There will be a process for that. You have to take into consideration that there was a delay in the fourth RP. As such, it was unclear to us what next steps to take,” he said.

Meralco’s interim application comes after its recent announcement of two successive months’ reduction in power rates totaling P1.28 per kWh for a 200-kWh customer.

Lenie Lectura

Customs revenue collections up 2.6 percent from Jan to April period

he Bureau of Customs (BOC) posted an increase of 2.6 percent, or P3.118 billion, in total collections from January to April this year.

BOC data showed that it collected P120.384 billion in the first four

briefs

The growth contributed to both volume and value of imports by 12 percent and 2.6 percent, respectively.

However, the bureau’s collection for April was down by 8.5 percent after collecting only P28.141 billion, as against the P30.764-billion revenue

during the same month in 2014.

The total cash collection was at P28.120 billion as compared to P30.738 billion from the previous year.

Although there was a 6.7-percent increase in the volume of oil imports

in April, the collection on oil imports fell to P5.441 billion this year from P9.141 billion in 2014.

The decrease was due to a 45-percent drop in the weighted average values of crude oil and petroleum products. PNA

pdea rewards two tipsters The Philippine Drug Enforcement Agency (PDEA) rewarded two men for providing information which led to the arrest of drug pushers under Oplan: Private Eye (OPE).

The informants under the codenames of “Star” and “Mayor” received monetary reward at the PDEA National Headquarters in Quezon City.

PDEA Director General Undersecretary Arturo G. Cacdac Jr. said that the OPE was a citizenbased information collection program of the PDEA, the Dangerous Drugs Board (DDB) and various non-governmental organizations involved in the national campaign against illegal drugs.

Under the program, “Star” received P152,671.84 for providing information which led to the arrest of two drug pushers and the seizure of 1.9 kilogram of shabu in a buy-bust operation in Malate, Manila, on April 11 by joint anti-narcotics operatives of PDEA Special Enforcement Service and PNP-Anti-Illegal Drugs Special Operations Task Force. PNA

A6 Thursday, June 18, 2015

Opinion BusinessMirror

editorial

MERS: Do Filipinos have reason to worry?

S

OUTH Korea today tops the Philippine tourism market with a tourist arrival that’s to die for.

Based on Department of Tourism statistics, of the 143,879 foreigners who visited Boracay in the first two months of 2015, a little over 64,000 came from South Korea.

Tourism Secretary Ramon R. Jimenez Jr. is confident that the over 1 million a year arrivals from South Korea may still grow. That’s a little over 100,000 South Korean tourists every month.

However, serious health concerns could put this rising tide of tourists to a sudden halt. An outbreak of Middle East Respiratory Syndrome (MERS) has been reported in South Korea recently, with nine deaths as of last count and close to 3,000 in quarantine.

It has reached such proportions that roughly 2,000 schools from kindergarten to college may be closed as a precaution due to the onset of the outbreak.

This begs the question: With the rising influx of South Koreans into the country as tourists, do Filipinos have reason to worry?

MERS is not new. The disease was first reported in Saudi Arabia in 2012.

Based on Department of Health (DOH) advisories, MERS has already killed 10 Filipinos in the Middle East in the same year, with additional cases of infection slowly rising. Hence, there’s the warning to Filipino health workers to strictly follow health protocols.

According to the US Centers for Disease Control and Prevention, no one is certain where and how the disease originated. “In addition to humans, MERScoronavirus has been found in camels in several countries. It is possible that some people became infected after contact with camels, although more information is needed to figure out the possible role that camels and other animals may play in the transmission of MERS-CoV.” In South Korea reports say that bats may have been the culprit. The spread of the MERS virus had been relatively slow. This is quite unlike Ebola, which can leap from an animal to a human being and kill in an instant.

MERS can be tracked through evidence of acute respiratory ailments, such as coughing, fever and shortness of breath. Some exhibit diarrhea, nausea and vomiting. It was noticed that those who caught MERS died not from the disease per se, but from underlying medical conditions such as heart ailments, among others. While DOH advisories claim that the Philippines, since 2012, has remained MERS-free, it pays to be vigilant. Devices for the purpose of finding out if airplane passengers suffer from fever or coughing can be found in our airports. However, a slight oversight or a failure to notice could spark the beginning of an outbreak.

While foreign tourists bring in millions of dollars in revenue annually, a slight oversight in one of our port of entry, which could result in an outbreak, may cost us more both in health expenses and in human lives.

While phrases such as “health is wealth” are now rendered clichés, it’s still something we cannot do without.

06182015

We’ve seen this movie before John Mangun

OUTSIDE THE BOX

I

NTENSELY disliking prequels, sequels, and remakes, I want my movies fresh out of the box and brand new. Unfortunately, that is an unrealistic expectation. As the writer of Ecclesiastes said: “There is nothing new under the sun” and that applies to economics and the financial markets. History merely repeats itself.

While I have strong hesitations believing that the US Federal Reserve (the Fed) will raise interest rates by any significant amount in the near future, I am almost sure to be proven wrong. We have seen this movie before.

The experts are predicting that the Federal Open Market Committee will increase interest rates at their meeting on September 17.

This will be the first rate increase since 2006. The US economy entered a recession and now, according to the official economic numbers, has been out of a recession for some time.

This is the longest period that the US Fed has delayed raising interest rates after a recession ended. The rational for the raising of rates now is that the US economy no longer needs the economic boost that low interest rates are supposed to offer and the economy can now continue

on its own. Predictions are that the rate increase will only be 0.25 percent but the symbolic nature of that increase is potentially significant.

Let’s give the Fed the benefit of the doubt that these experts really know what they are doing in spite of some disturbing facts.

While a drop in the ocean of global government debt, there is $6 trillion worth of government bonds that were issued at a negative interest rate. A Fed increase would crash the value of those bonds. Forty-five percent ($17.4 trillion) of all global government bonds currently yield less than one percent, which also would lose value. For those stock markets (not the Philippine Stock Exchange in the slightest) that depend on margin trading, they would see a sell off as rates go higher.

But I said we would give the Fed the benefit of the doubt and I am sure they have taken all of this into

consideration as they make their interest rate policy decisions.

However, we do have some specific historical precedence from 78 years ago to consider.

In 1937 the US was in the middle of the Great Depression. This is the only other time in history that interest rates went to zero. The Fed’s balance sheet increased from five percent of the US gross domestic product to 20 percent, just like now.

The economy started to give some brief signs of improvementjust like now—and the Fed increased interest rates in three steps between August 1936 and May 1937. After the March 1937 increase, the US stock market started declining and bottomed out a year later, down 50 percent.

When the final rate increase took effect, the US economy went back into a recession and the stock market dropped another 49 percent from its 1938 recovery high. It took 10 years and a World War for the stock market to get back to its 1938 high.

The Fed knows all this and that is why they have said that if the economy suffers from a rate hike, they intend to lower rates back down if necessary.

September marks the end of the cycle of confidence in government which happens to coincide with the Fed’s interest rate policy meeting.

The stock market will initially rally with high volatility as it did in 1936 and early 1937. Then there will be a sell off.

China breaks out of Asia’s orbit William Pesek

BLOOMBERG VIEW

I

N the late 1980s, the financial world created Asia Ex-Japan, a new category of investment to deal with what was then the world’s second-biggest economy. The idea was that Tokyo’s market was so big, and its valuations had diverged so widely from its peers, that Japan and the rest of the region each warranted its own asset class.

Today, China is following in Japan’s footsteps, having grown so large as a financial market that investors can no longer plausibly group it together with its neighbors. Asia Ex-Japan has been reduced to an anachronism. But China’s newfound financial status will likely prove a mixed blessing.

China is fast rewriting Asia’s pecking order, more so than Japan ever did.

Its economy is almost twice the size of Japan’s, as is the market capitalization of its equity arenas. And China’s price-to-earnings-ratio profile is in an orbit all its own. Shenzhen shares are trading at prices 73 times above expected earnings, compared with 17 in Seoul and 14 in Taipei. In Shanghai,

meanwhile, 94 percent of stocks are trading at higher valuations than the market’s index.

“China is the big elephant in the room, dominating Asia Ex-Japan metrices to the point where they’ve become meaningless,” economist Frederic Neumann of HSBC in Hong Kong says. “This is not to say that China doesn’t set the pace for the region overall. But when looking at Asia, the two heavy-weights of China and Japan are best left out of regional averages for analytical purposes.”

For China, there’s both good news and bad in achieving status as an independent asset class. The good news is that it confirms the financial

clout Beijing covets. The bad news is it might encourage policy-makers to lose sight of the country’s economic fundamentals.

In Japan’s case, it triggered the country’s economic decline. The rise of Japan Ex-Asia indices furthered the boom in Japanese stock markets, driving the Nikkei to an all-time high of 38,916 in 1989. It was a brilliant marketing tool, but it allowed the country to ignore necessary economic reforms.

Even today, Tokyo is struggling to adhere to international corporate governance standards. Chinese authorities have been lobbying for their stock markets’ inclusion on global indices in order to lay the groundwork for making the yuan an international currency.

But Beijing has been putting the cart before the horse. If China wants to win over international financial markets, and convince global fund managers to make its shares a cornerstone of their portfolios, it should do so organically, by steadily pursuing a program of bold economic reforms. Instead, Beijing has been doing the opposite, fueling a credit rally of Shenzhen shares that has produced an impossible 173 percent boom in 12 months even as broader economic growth has slowed.

MSCI’s decision last week to defer adding Chinese shares to its indices

But—and this is critically important—there will not be a selling crash as in 1937 because money will massively flow into the US dollar and force the stock market to rally. Then the Fed will be in big trouble. The US stock market will genuinely be in a bubble as its value will increase as measured by all major currencies unlike now. That should force the Fed to raise interest rates but will it be able to do that if the US economy is in trouble?

In 1937 foreigners had an alternative to the US dollar with gold. But gold coins are no longer in common circulation as then. A US interest rate increase will initially make the dollar very attractive.

In 1936, notably France and Switzerland lowered their rates even as the Fed was tightening similar to what other nations like Brazil and Indonesia are doing now. Their currencies were devalued. Nations that kept their rates stable or higher (as the Philippines is doing) did not suffer currency devaluations and their stock markets appreciated.

Maybe this time the movie will be different.

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.

was entirely prudent given China’s fragile financial health. Although its GDP has surpassed Japan’s, China still needs to improve its deficits in financial transparency and market access. It should also rethink the mechanics of its system of investor quotas; the last thing its stock markets need is an artificial inducement to add more shares.

There’s no denying that China, like Japan decades ago, is outgrowing its Asian peers. China’s vast and still growing scale has already made it problematic for economic observers to take weighted averages in Asia. But wise investors will also recognize there’s still considerable convergence in the region.

As Tim Craighead of Bloomberg Intelligence points out, China’s “increasing integration with Asia makes a pan-Asia investment strategy a fundamentally intriguing complete-supply-chain investment thesis.” Neumann adds: “There is still a remarkable correlation between China’s growth and that of other Asian emerging markets.”

That’s not to suggest investors shouldn’t separate out China where needed in their economic analyses.

But they’d be wise to do so cautiously.

Although the country is flying high now, it may only be a matter of time until it again falls in line with its Asian neighbors.

Opinion BusinessMirror

opinion@businessmirror.com.ph

The fallacy of ‘strictissimi Who hushed the storm juris’ on tax refund Msgr. Sabino A. Vengco Jr. Atty. Irwin C. Nidea Jr.

Tax law for business

S

ADLY, even the Court of Tax Appeals (CTA), in many of its decisions, declares that a taxpayer must prove every minute detail of his case since tax refund has the same nature as tax exemption where the law requires strict construction. In other words, even the CTA in its decisions has the mind-set that a taxpayer must prove any type of refund beyond reasonable doubt.

If not, his claim will fail.

It is very important to correct the mind-set that all claims for refund must be construed strictissimi juris against the taxpayer. The Supreme Court has ruled that there are two types of tax refunds and that these two types have different levels of proof required (GR 172129), to wit: A claim for tax refund may be based on a statute granting tax exemption (the result of legislative grace); A claim for tax refund is predicated on tax refund provisions allowing a refund of erroneous or excess payment of tax.

For the first type of claim for refund, the same is construed strictly against the taxpayer and the claimant must show that he clearly falls under the exempting statute. For example, if charitable institutions or churches wish to claim for refund of an excess payment, it must prove that what it is claiming was actually, directly, and exclusively used for religious, charitable or educational purpose as provided for in the Constitution.

Excess input value-added tax (VAT) and excess withholding tax are covered by the second type of tax refund. In these types of refund only preponderance of evidence as the level of proof is required. What does preponderance of evidence mean? Preponderance of evidence is a phrase which, in the last analysis, means probability of the truth (GR 175021).

Thus, in claim for excess input VAT and excess creditable withholding tax (CWT), a lesser level of proof is required. Primarily because the taxpayer has advanced to the government something that it should not have paid in the first place.

On CWT, since taxpayers are taxed on their net income for a given taxable year, the CWT is to be deducted from the net income tax payable by the taxpayer at the end of the taxable year. This is so since CWT is just an approximation of one’s income taxes, and, if at the end of the taxable year, the income tax due is greater than the taxes withheld, then the taxpayer shall pay the difference. On the other hand, if the income taxes due is less than the tax withheld, the taxpayer will be entitled to a refund or tax credit.

Under such a system of withholding, if the amounts withheld from

payments to a taxpayer for a given taxable year exceed that which is due from him as income taxes at the end of such year, then there is clearly excess and erroneous payment of taxes. Such payment of CWT to the government was made under the mistaken presumption that such amounts are due to it, when in truth and in fact, it is not.

In claims for refund or erroneously or illegally collected taxes, such as CWT in excess of a taxpayer’s income tax liability for a taxable year, there is no claim for immunity from taxes granted by the state. What is involved is a claim by the taxpayer that he is liable for taxes, but through mistake or through the imposition of a withholding tax system, there were excess payments thereof, which should be returned to him. Thus, the jurisprudential rule that “tax refunds are in the nature of tax exemptions” and should thus be “strictly construed against taxpayers,” should not apply.

The excess of the withheld tax over the tax due on a taxpayer’s income for a given taxable year should be refunded to the latter with preponderance of evidence as the only level of proof required and not strict construction.

The CTA, however, in most of its decisions made no distinction between the two types of claims for refund. It has resulted in confusion and injustice since the government was unjustly enriched by the mistaken impression that all claims for tax refund must be strictly construed against the taxpayer. It has lost sight of the second type of tax refund where evidentiary requirements should be relaxed as only preponderance of evidence is required.

Irwin C. Nidea Jr. is a partner of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services (WTS) Alliance.

The article is for general information only and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at irwin.nidea@bdblaw.com.ph or call 403-2001 local 330.

Elon Musk’s satellite Internet?

E

VEN as visionaries go, Elon Musk is one of a kind. He takes what seems like sci-fi lunacy and turns it into business. At this point, if he declared he planned to offer Harry Potter-style teleportation through a smartphone app, we’d believe him. Or at least not laugh in his face.

Now the man who gave us the high-end, high-performance electric car and commercialized space travel has filed plans with the government to essentially rebuild the Internet in space.

The idea isn’t new. Bill Gates, Google, Facebook and others have explored it, and they all gave up. This just seems to egg Musk on. Likewise, Virgin’s Richard Branson, who’s pursuing a similar venture. Both have advantages over the others because their companies already have rockets. Google and Fidelity recently invested $1 billion in Musk’s SpaceX, in part to support the satellite project.

SpaceX is the first private com-

pany to deliver goods to the International Space Station. It will begin delivering people there in two years, and the Pentagon recently qualified it to launch national security satellites.

Musk’s Internet plan is to launch about 4,000 small, cheap (by space standards) satellites into low orbit and test if they can bounce signals around the globe, including areas the Internet now can’t reach.

If he succeeds, SpaceX or, more likely, its Internet spin-off, could compete with the likes of Comcast, AT&T, DirecTV and Dish. Wouldn’t that be nice.

Then SpaceX could focus on its overarching goal of colonizing Mars.

(See, you’re not laughing, are you?)

Musk believes that to survive, the human species has to occupy other planets. We’re not incorporating Red Planet Real Estate just yet. But we’re not signing any new long-term contracts for Internet service either, until we see how that mini-satellite flotilla tests out. TNS

Alálaong Bagá

O

UT of His loving kindness, the Lord hushed the storm and stilled the billows of the sea (Psalm 107:23-24, 25-26, 28-29, 30-31). Because of his terrified disciples Jesus rebuked the wind and said to the sea, “Quiet! Be still!” (Mark 4:35-41).

From their straits He rescued them PSALM 107 invites people who have experienced God’s steadfast love (hesed) to praise Him. The psalm’s fourth type of people, who were in very stressful situation and after seeking the help of the Lord were brought to safety by Him, were those on the point of foundering at sea.

Those who voyage by sea know how sudden violent storms can rise and toss a boat to and fro, throwing those in the boat into panic. Fearing for their lives and helpless in such dire situation, people could only cry out to anyone they believe is capable of rescuing them.

Traversing the sea was always risky for the seafarers of old, especially in the context of the ancient Near East where “yam” (sea) is one of the gods threatening the world with chaos. The sea may be bound but never really vanquished and remains a constant threat to people until the end of time, when it will finally be defeated (cf. Revelation 21:1). But

those who sail the seas have repeatedly seen God’s power in controlling this raging force, like a cosmic adversary, the mythical monster of the abyss. God is Lord and He can make the storm be still and hush it like a restless baby in diapers (cf. Job 38:8-9). And those delivered from a turbulent sea (not only in Egypt but anywhere else) and brought to their safe haven, should, filled with joy, thank and praise the Lord for His wondrous deeds.

And the wind ceased

THE gospel account narrates a nature miracle by Jesus: calming the wind in the midst of a violent squall. After a long day being with and teaching the crowds, Jesus invited His disciples to the other side of the lake. So “just as He was,” they took Him with them in their boat. Their sea journey was to be a continuation of His teaching, particularly of His personal instruction to them, in their boat; it was to be their crossing over together with Jesus. The tempestuous sea was the

Thursday, June 18, 2015

setting for their lesson: the passage from fear to faith. The boat was filling up with water as the angry waves broke over the boat. Jesus was asleep on a cushion in the stern, the picture of calming faith and abiding peace during turbulence (reminding us of His father who brought Him up, “the sleeping Joseph”).

The disciples woke up Jesus, with the question: “Teacher, do You not care that we are perishing?” The storm made them afraid and in their fear they doubted their new found teacher. But their teacher asked them to look at themselves: “Why are you terrified? Do you not yet have faith?” Jesus had asked them to cross over to the other side, to the side of true faith from the side of fear everywhere in life. The passage was not to be easy. Their minds were storm tossed; they still have much to learn from their teacher how, amid fearsome circumstances in life, to trust in God, to be open to God in faith.

Whom the wind and sea obey

AS in exorcism, Jesus commanded the storm to stand down, rebuking the powers of the storm like rebuking a demon. In His first exorcism account, Mark portrays Jesus similarly rebuking an unclean spirit and saying, “Quiet! Come out of him!”

(Mark 1:25). Seeing what Jesus did to the angry sea, the disciples filled with great awe could only ask, “Who then is this whom even wind and sea obey?” It is God’s power over chaotic water that they saw, the God who at

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the first creation drew order out of the watery abyss (Genesis 1:2) and who split the sea to let the people cross to safety. Who is this? This is the Creator-God! The followers of Jesus showed different reactions to Him in this account. At the outset they cared for Him physically, whisking Him away from the crowds and having Him sleep on a cushion in the boat as they cross the sea.

W hen the boat was being swamped during the windstorm, they woke Him up for help. But their words were not so confident that He could save them. Jesus challenged this lack of faith. When the disciples witnessed the remarkable authority of Jesus over nature, they were in awe wondering who Jesus might truly be. They were in the process of learning and recognizing that this is the reign of God, that God is in their midst.

Alálaong bagá, the Psalm selection for this Sunday is due to the gospel account of Jesus hushing a storm before His terrified disciples. We have all sorts of weather disturbances to deal with in life. Faith enables us to see and experience God’s loving power in all of these. In our vulnerability and helplessness, He is always there for us. It is exhilarating when people realize and recognize how God rescued them in their straits.

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

Save our soils: Healthy soils for a healthy life

M

By Sen. Cynthia Villar

R. President, I rise on a matter of personal privilege.

The United Nations General Assembly, through the Food and Agriculture Organization or FAO, declared 2015 as International Year of Soils to raise awareness on the importance of soils for food security and essential ecosystem functions.

Locally, the Department of Agriculture, through the Bureau of Soils and Water Management (BSWM), is leading the Philippines’s participation under the national “Save our Soils” campaign. It encourages all stakeholders to take an active role in soil conservation and management.

Napakaimportante sa atin na maging aktibo tayo sa implementation ng campaigns during the International Year of Soils, lalung-lalo na at ang Pilipinas ay isang agricultural country. We depend largely on soils for our produce or crops. The Philippines has 9.7 million hectares of agricultural land and two-thirds of our population is involved in farming in those lands.

We are stakeholders in soil conservation and management. Lahat tayo, no exemption, ay mga stakeholders sa usaping lupa dahil higit sa lahat, nakasalalay diyan ang food security ng ating bansa, because healthy soils are the foundation of food production. It sustains 95 percent of food production, according to the FAO. As FAO director general, Jose Graziano da Silva cited: “We need healthy soils to achieve our food security and nutrition goals, to fight climate change and to ensure overall sustainable development.”

We should be alarmed about the threats to healthy soils and take action in reversing those threats. Unanguna na diyan ang soil degradation na umabot na sa 33 percent globally and 38 percent here in the Philippines.

Based on data from the BSWM, out of the Philippines’s total land area of 29.55 million hectares, 11.45 million hectares are “vulnerable areas” to land degradation or moderately to severely degraded, and 2.60 million hectares are “hot spots” or in an advanced state of land degradation and, as such, priority areas for conservation measures.

These degraded soils are in the sloping agricultural areas in the uplands which are not practicing soiland water-conservation measures and with substantially minimal vegetative cover or those denuded forests, shrubs and grasslands.

Soil degradation is a threat globally. Every minute, we lose the equiv-

alent of 30 football pitches of fertile soil. The threat is even more alarming in Asia, according to the FAO. Our region needs soil more than ever to satisfy the demands of the growing population.

By 2050 we need to increase food production by at least 60 percent to meet the needs of an additional 2 billion more people. Around 95 percent of our food comes from the soil. As per FAO data, most of the arable land in Asia are already fully utilized. Thus, it is imperative for us to save our soils, which is a nonrenewable resource. It takes up to a thousand years for just 1 centimeter of topsoil to form.

Ang ilan sa mga dahilan ng pagkasira ng lupa ay erosion, acidification, chemical pollution and others. There is an urgent need to reduce soil degradation and restore degraded land. Marami rin naman paraan ng soil restoration, iba-iba man ang tawag sa mga konsepto o proseso—agro-ecology, progressive or sustainable farming—iisa lang naman ang goal ng lahat ng mga iyan, ang preservation and conservation of our resources for future generations.

Katulad nga ng nasabi ko kanina, maraming paraan at isa na diyan ang crop rotation at intercropping. Sa paglilibot namin ng DA sa mga lugar na nasalanta ng bagyong Yolanda, nakita namin na ang mga coconut farmers, for instance, ay hindi pala pinapractice ang intercropping. So, that’s what we taught them to do, because it takes between six to nine years for coconut trees to reach full productivity. Matagal na panahon din at sayang naman (if during those years, they cannot harvest and don’t have a) source of income. Intercropping is included in the Yolanda Recovery and Rehabilitation Project of the Department of Agriculture and is being promoted by the Philippine Coconut Authority (PCA).

Besides providing farmers with insurance against the risk of income loss during extreme weather conditions, such as long dry spell or El Niño and typhoons, intercropping also maintains soil fertility since the nutrients flow from both layers of crops. It is also environment-friendly as it pro-

motes better soil and water conservation potential than mono-cropping.

Consequently, it also increases soil biodiversity.

Hindi lang sa food security importante ang soil. Alam naman natin na interconnected ang lahat sa ating nature. There is a chain reaction (if balance and sustainability is not maintained). Soils host a quarter of our planet’s biodiversity. In the same way that we protect our oceans, we should also save our soils.

Organic farming also helps maintain the health of soils as it retains higher levels of essential organic matter. And there is more to organic farming than reducing the use of pesticides. It also includes crop rotations and composting. Kung ang ating mga magsasaka, pati na rin mga gardeners at horticulturists, ay matututo o magsishift into organic farming, malaking improvement ang makikita natin sa ating mga arable land at horticultural soils. Dapat natin paigtingin ang campaign at information dissemination on organic farming.

Actually, our country has a National Organic Agriculture Program, which envisions the organic agriculture sector contributing to the overall agricultural growth and development of the country in terms of sustainability, competitiveness and food security. Under the said program, at least 5 percent of Philippine agricultural farm will be converted into organic by 2016; that’s next year.

I personally is an advocate of organic farming dahil ito ay kaakibat ng ating tinatawag na sustainable agriculture. Ang benepisyo nito ay long term, lalung-lalo na sa ating environment. And as an environmentalist, importante iyan sa akin. After all the natural disasters that have happened, environment protection should be of utmost consideration.

Organic agriculture eliminates the use of synthetic or chemicals-laden fertilizer and pesticides at iba pa na nakakasisira sa ating environment at ng fertility ng agricultural soil. (Aside from being) harmful to the environment, inorganic pesticides and fertilizers (are expensive and lessens) income of farmers. Natutuwa ako na marami na ang nagpo-produce ng organic fertilizers. Ako mismo ay merong organic fertilizer-making enterprise sa aking home city (of) Las Piñas (wherein we use the process of) vermicomposting and rotary composting.

We built composting centers in all of our city’s barangays to convert

kitchen and garden wastes into organic fertilizer. There are 70 composters distributed in the city, which presently serve 30,000 households.

We target to install additional composters to service 50,000 households.

We distribute the organic fertilizers we produce to farmers all over the country for free.

Interlinked din ang iba pang social problems at issues na masosolusyunan natin when we save our soils. The sustainable use and management of soils is also linked to poverty reduction, hunger eradication, economic growth and environmental protection.

Dito lang sa Pilipinas, more than two-thirds of our population are involved in agriculture at majority sa kanila ay mahihirap na mga magsasaka.

Healthy soils will not only provide us abundant and nutritious food, but will also increase the farmers’ crop yields. With abundant harvest, the economy of the Philippines, as an agricultural country, will also grow abundantly. That is a win-win situation.

This is a call para lahat tayo ay magtulungan at maging involved ngayong International Year of the Soils in activities and advocacies to save our soils. This is for our own benefit, especially the future generation. The DA and the BSWM have ongoing exhibits and scheduled seminars throughout the year (for those interested). The Senate Committee on Agriculture and Food also put up an exhibit outside. We can all help in the information drive and in our own way adopt in our households, gardens or farms, environment-friendly methods (organic gardening/farming, composting, etc.). As I cited earlier, we are all stakeholders here, no exemption.

Hiroyuki Konuma, FAO Regional Representative for Asia and the Pacific, cited an anonymous saying in relations to soils. Let me re-quote it: ‘‘Whatever mankind does, even when we produce the most marvelous artwork, we depend on a few drops of water and 10 centimeters of soil.”

And let me end this privilege speech with another quote that serves as my inspiration or motto in my environmental advocacy efforts: “We do not inherit the earth from our ancestors; we borrow it from our children.”

Thank you esteemed colleagues, Mr. President.

This is the privilege speech of Senator Cynthia Villar on the International Year of the Soils delivered at the Senate Plenary Hall on June 17.

2nd Front Page BusinessMirror

A8 Thursday, June 18, 2015

MRT 3 to start seeing needed improvements by July–DOTC

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By Lorenz S. Marasigan

he Department of Transportation and Communications (DOTC) assured the commuting public on Wednesday that the operations of the Metro Rail Transit (MRT) Line 3 will be improved by July, as the agency awarded the maintenance contracts for four of the seven disciplines of the rail system on Wednesday.

In a statement, the department said it has awarded the following maintenance contracts: rail and permanent ways to JorgmanKorail-Erin Marty Joint Venture; building and facilities to Global Epcom Services Inc.; communications systems to Trilink Technologies Inc.; and ticketing to Future Logic Corp.

The four contracts have a combined cost of P61.48 million. These maintenance contracts cover a sixmonth period beginning on July 5 this year, and are intended to fulfill the MRT Line 3’s daily operating requirements until the longer-term

maintenance provider is procured.

The three other disciplines are currently still being procured.

These are rolling stocks and depot equipment, power supply and overhead catenary system, and conveyance systems.

The new maintenance providers won the contracts via a multidisciplinary approach, through which the DOTC is engaging subcontractors directly for the maintenance works. This is expected to improve the efficiency of executing such works.

The government will also launch the auction for the P4.2-billion

three-year MRT maintenance deal soon, after all requirements for the procurement have been met.

The transportation department decided to double the contract price from the original P2.2 billion to increase the interest of maintenance providers. The contract now includes the lot, the general overhaul of the trains and replacement of signaling system of the MRT. The terms of the sweetened contract will have to go through the approval of the Government Procurement Policy Board (GPPB) and the National Economic and Development Authority (Neda).

Currently, a shadowing team from the transportation department is assisting APT Global Inc. in maintaining the line. The maintenance provider’s contract expired in the second half of last year. It was, however, extended due to the failed auctions.

The lack of a good maintenance provider has taken a toll on the MRT, whose facilities are now poorer than ever. Lesser trains have been operating—almost half the supposed capacity of the railway system—and yet more and more people are riding the mass-transit line.

This earned the ire of the commuting public, questioning the

NPLs OF RURAL, COOPERATIVE BANKS FELL TO 11.85% IN 2014

effect of the fare hike implemented early this year.

The owner of the assets of the MRT Line 3 admitted that the train system already poses a certain degree of risk in the lives of the commuters, given its current state. Train experts from Hong Kong also found the line to be in a poor state—especially the rails.

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

For one, the government currently implements a P9.7-billion multiyear venture to overhaul the line. The complete makeover is expected to be done within the term of President Aquino.

It also wants to buy out the corporate owner for P54 billion.

But several private groups are proposing a different scheme to modernize the train system, which has been under fire for years now for its mediocre services. The group of businessman Robert John L. Sobrepeña is proposing to do a “quick fix” solution to make the train system safe for public transport.

Together with foreign firms Sumitomo Corp. of Japan and Globalvia infrastructuras of Spain, Metro Global Holdings Inc. is proposing to “fix” the ailing system through a Continued on A2

www.businessmirror.com.ph

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By Bianca Cuaresma

he Bangko Sentral ng Pilipinas (BSP) on Monday reported that the country’s rural and cooperative banks posted nonperforming loans (NPLs) improving from 12.24 percent of total loan portfolio at end-September 2014, to only 11.85 percent at end-December 2014.

This was the lowest collectively posted by rural and cooperative banks since September 2012, when the industry’s soured loans ratio averaged 11.49 percent.

In absolute terms, the NPLs totaled P16.4 billion during the period, lower compared to both end-September 2014 NPLs of P16.48 billion and end-December 2013 NPLs of another P17.31 billion.

NPLs are also alternately known as bad or defaulted loans as these are credit accommodations the borrowers have not serviced 90 days from due date.

A lower NPL ratio is indicative of a bank less susceptible to loan quality erosion, and that most of its loan assets are healthy and only a small percentage are bad loans.

More notably, the banks were able to keep their NPL ratios low, averaging only 5.85 percent on net basis in the quarter ending December 2014 no matter the rise in total loan portfolio during the period.

At end-2014, the banks’ total loan portfolio stood at P138.44 billion, 2.84 percent higher than the P134.61 billion posted a quarter earlier.

Among the economic sectors, the biggest recipients of the loans from rural and cooperative banks for the period were agriculture, hunting, forestry and fishing; wholesale and retail trade; real estate, renting and business activities; and loans to individuals for consumption purposes.

Moreover, the rural and cooperative banks boosted their socalled loan-loss reserves to further protect themselves in the event of an industry downturn.

At end-2014, the rural and cooperative banks’ provisions for soured loans equaled 58.3 percent of their gross NPLs from only 57.58 percent a quarter earlier.

Japanese scientists learn to detect early stages of cancer in 3 minutes

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group of scientists in Japan have developed a new time-saving technology that allows to diagnose cancer in early stages using just one drop of blood.

“The technology tests for the presence of a malign tumor using just one drop of blood and allows to identify stomach, colon and pancreatic cancer in early stages in just three minutes.

“This technology does not exist anywhere else in the world,” Katsuyuki Hasegawa, a researcher at the Mytech Co., told RIA Novosti.

Scientists are hailing a break-

through in cancer treatment they hope will usher in a new era for those battling the disease by using the body’s own immune system to attack cancerous cells.

Mytech worked on the new technology in collaboration with specialists from the Kototoyosu Hospital at the Showa University in Tokyo.

The company developed a special metal plate where a patient’s blood drop is placed and then put under ultraviolet rays. If the patient has cancer, the blood starts to glow when treated with radiation, while a healthy person’s

blood does not glow.

“This is an absolutely new world achievement. This method is simple and it can be used at any hospital even starting from tomorrow,” Hasegawa said.

According to the researcher, scientists still need to come up with a database of images that correspond to different types of cancer, so that doctors using the new technology can quickly tell exactly what kind of malign tumor a patient has.

Clinical trials of the new technology are expected to start in one year. PNA

Asia needs to boost clean-energy investment

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he Asian Development Bank (ADB) says Asia has made huge strides in developing clean energy but must boost investment and use of available technology to meet rising demand and cope with climate change.

ADB Vice President Bindu N.

World Bank. . .

populations get older, there are still opportunities for governments, individuals and the private sector to collectively forge a prosperous and healthy “Golden Age.” “You need a lot of change to take advantage of the opportunities,” said Maurizio Bussolo, a World Bank economist and coauthor of the report. But he added, “We can actually change demography itself.”

While the report looks at aging in Europe and Central Asia—the oldest region in the world—it says the demographic trends there are a harbinger of things to come in the rest of the world.

In 1950 the average age of a resident in Europe and Central Asia was 29 years. Now, it has increased to 37 years and the share of people older than 64 years in the population has doubled from 6 percent to 12 percent in the past 65 years.

By 2050 the share of older people

Lohani said on Wednesday that renewable energy (RE) has become cheaper as technology progresses.

He said governments must seize the opportunity of low oil prices present to eliminate costly fuel subsidies and level the playing field for renewables.

He told a regional forum on clean energy that despite a leap in investments in RE, including solar, wind and geothermal power, the ADB sees coal use in Asia rising 50 percent by 2035 from 2010 levels. Coal is cheap but highly polluting. AP

Continued from A1

could reach 21 percent. The main cause of aging societies in Europe and Central Asia is people are having fewer children rather than living longer. The fertility rate today is about 1.4 children per woman, which is below the replacement level and means populations will decline if current trends continue.

In the US, a low fertility rate (1.9) is coupled with longer life spans but higher immigration rates so the population is still growing. In the 1970s and 1980s the demographic worry around the world was the population bomb.

“In some countries, development may not be possible at all unless slower population growth can be achieved soon,” the bank said in its 1984 World Development Report.

But fertility rates came down, averting a projected doubling of the world’s population every 35 years.

Much as the doomsday scenario of

uncontrolled population growth didn’t come to pass, dire consequences from an unstoppable age quake might not either.

Among the fears as the percentage of working age people becomes smaller is these producers will be tasked with supporting a growing share of older people, putting pensions and health-care systems under more pressure.

But the report suggests that if governments encourage more people to work through supportive policies and to participate in the labor force longer, dependency ratios could remain rather stable.

Bussolo said there’s no reason the aging population can’t work longer and many older people already are.

If women participated in the labor force as much as men do, the report says there also would be a decline in dependency ratios.

See “World Bank,” A2