BusinessMirror June 23, 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 201423, Vol.2015 10 No. 40 Tuesday, Vol. 10 No. 257

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VICE PRESIDENT TO REVEAL REASONS FOR RESIGNING IN DUE TIME, HIS DAUGHTER SAYS

INSIDE

Binay makes early exit from Cabinet

THREE KEY HOME REPAIRS The gifts of the Holy Sirit

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EAR Lord, knowing that the Spirit is the origin of all the great movements in the Church, which enriches every generation with initiatives and institutions that are the fresh shoots bursting forth from the ancient “trunk” that no passing of centuries fossilizes or destroys. It is the gifts of the Holy Spirit that empower each individual believer to walk the road of holiness and bring about in oneself that wonderful transformation that configures a person to You—the divine model. May we seek the gifts of the Holy Spirit all the days of our life. 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

BOX OFFICE: ‘JURASSIC’ IS NO. 1, BUT THERE’S LOTS OF JOY FOR ‘INSIDE OUT’ »D3

BusinessMirror

Tuesday, June 23, 2015

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ICE President Jejomar C. Binay on Monday tendered his irrevocable resignation from the Cabinet of President Aquino “effective immediately.”

Just fix it: Three key home repairs you can do yourself B B B Chicago Tribune

H

OME repair can be intimidating, yet there are numerous projects you can learn to tackle on your own with a bit of courage, the right instructions and good supplies. Here are step-by-step instructions for three attainable projects.

TILE A BACKSPLASH UPDATING a kitchen or bathroom doesn’t have to mean a gut overhaul—even one new zippy backsplash in crisp subway tiles can make a world of difference.

Go white for classic, or consider pale green glass. Suzy Opalinski, project specialist at Lowe’s, advises watching the company’s video first and buying supplies in advance of tackling your job.

The tips: ■ Always buy at least 10 percent more tile than you need, since dye lots change and you may drop a few pieces or cut them incorrectly. Consider choices in porcelain tile; it’s easier for a beginner to work with than natural stone. And don’t forget to buy a bag of plastic spacers and ready-mixed grout.

■ You no longer have to mix mortar and struggle with getting the right consistency for applying the tiles

to the wall. The easiest way to start is to select tiles that already have been mounted on mesh. Or you can expend a bit more effort and select tiles that you adhere to an adhesive mat. The mats come in 18-inch rolls measuring 25 square feet, and you’ll have to cut them with a scissor.

Affix them to fit between the top of the counter and bottom of the upper cabinets. Then place the tiles on top, starting with the bottom left side and moving to the right, cutting tiles at the end if needed, and leaving space between each tile for a plastic spacer that you’ll later remove, replacing it with grout.

■ Once all the tiles are in and spacers out, you will apply the grout. To apply, use a rectangular float, similar to a sponge, and dab the grout in between the tiles like you’re buttering toast—at a 45-degree angle. You can later sponge off excess with water.

INSTALL A NEW TOILET REPLACING a toilet, believe it or not, is almost simpler than baking a pie. The trick is to take it one step at a time. Our advice: Follow an online video, using these tips to navigate key details.

The tips: ■ Before removing the old toilet, measure the area from the wall behind the toilet to center of one of the closet bolts, which hold down the toilet. If the toilet has four closet bolts, measure to the center of one of the rear

ones. Then, measure from the center of the mounting holes to back of the new toilet you’re considering. If the base of the new toilet is shorter than the distance between the rear bolt holes and wall, it should fit. In small bathrooms, also measure from the sides of the flange bolts to sidewalls or other objects—maybe a sink to be sure there’s clearance.

■ Check out supplies packaged in a complete kits that include the tank, bowl, wax ring and a hardware kit. If you plan to replace the supply line, the flexible ones encased in stainless-steel mesh are strong and convenient.

■ When removing your old toilet, place the tank top flat on the floor, preferably in another room. Don’t prop this fragile top against a wall close to where you’re working. If it falls, or if you bump into it while trying to maneuver the heavy toilet pieces, it will probably break.

■ As soon as you remove your old toilet, plug the drain hole to keep gases from escaping into the room, making sure that your plug can’t fall into the drain line and stop it up.

■ When you’re ready to install your new toilet, put something under it such as a blanket to prevent damage.

■ When installing washers and bolts to hold the new toilet in place, make sure the tapered washers are installed with the appropriate side up. The washers will be labeled in the manufacturer’s instructions.

■ When your toilet is installed, you may need to make minor adjustments to the flushing mechanism.

Try flushing to see it works.

FIX A CLOGGED GARBAGE DISPOSAL FIRST, know how to avoid a clogged disposal in the first FIRST place. Don’t overload it and never pour grease, vegetable peels or rinds down the drain. Use cold water and run the disposal until empty.

The tips: ■ Every so often, grind a few pieces of lemon in the disposal for 30 seconds in cold water. Acids are good for the drain pipe and to keep the disposal smelling clean.

■ If your disposal doesn’t turn on, reset the switch on the bottom by pressing it. Next, check the breaker. If it’s off, turn it back on.

■ If the disposal hums, there may be something caught. Use an allen wrench to move the drum back and forth and try to free the obstruction.

■ If you reach into the disposal, always first unplug it.

■ To get something out that’s already inside your disposal, like a bone or rock, go in with tongs.

Lift the flap, take a look, and see if you can find and grab the item.

■ More information is available at www. todayshomeowner.com.

‘It’s Great. It’s British. It’s Here.’

A GREAT PARTNERSHIP British Embassy Deputy Head of Mission Trevor Lewis (from left), John Lewis Head for International Development Katie Jordan, John Lewis Manager and for International Development Louise Jones with SM Retail Vice President for Business Development Pascale Jimenez, SM Home Senior Vice President for Operations Siony Yap and SM Retail President Jorge T. Mendiola

JORDAN (from left), Jones and SM Retail Chairman Tessie Sy-Coson

JOHN Lewis Tableware Collection

THE John Lewis Linen Collection

JOHN LEWIS, a chain of quality department stores operating throughout Great Britain, recently opened its first shop-in-shop in the Philippines at SM Makati, in partnership with SM Retail.

The chain is part of the John Lewis Partnership, and is known for its policy of “Never Knowingly Undersold,” which has been in use since 1925.

A wide range of own-brand home products including bed, bath, tableware and home accessories, such as candles and photo frames, is now on offer in a dedicated John Lewis Department at SM Home in SM Makati, SM Megamall, SM Aura Premier, SM Mall of Asia, SM City North Edsa, and SM Southmall in Metro Manila; SM City Cebu and SM Lanang Premier in the provincial areas; as well as three Our Home stores. The sites are between 300 square feet and 1,000 square feet and have a dedicated staff.

The shop-in-shop departments build on the success of John Lewis existing outlets in seven branches of South Korean department store Shinsegae, and follows John Lewis’s recent announcement to open shop-in-shop departments in three branches of Singapore department store Robinsons.

“SM Retail is a perfect partner to help bring the John Lewis brand to a new Asian customer base,” says Andy Street, managing director at John Lewis.

“When we met the SM team over a year ago, we recognized their passion for surprising and delighting their customers with great design and quality products. We are excited to be working with the SM and Our Home buyers to bring the best of our products that include bed, bath, tableware and home accessories to the Philippines,” says Katie Jordan, John Lewis head of International Development “We hope our slice of British heritage right here in The SM Store will surprise and delight customers and add to the rich mix of home products available in-store,” she adds.

“I would like to congratulate SM for successfully bringing John Lewis to the Philippines,” says HE British Ambassador to the Philippines Asif Ahmad.

“In the UK, John Lewis is known as a top retailer and has a reputation for offering excellent value to customers for many years. We are delighted to have another iconic brand that will bring the experience of British quality, creativity and lifestyle to the Filipino home.”

The first John Lewis store was opened in 1864 in Oxford Street, London. Today, it operates 43 John Lewis stores across the UK (31 department stores, 10 John Lewis at Home stores, and shops at Saint Pancras and Heathrow Terminal 2), as well as johnlewis.com.

It is part of the John Lewis Partnership, the

UK’s largest example of worker co-ownership where all 30,000 staff are partners in the business.

John Lewis has been named Omnichannel Retailer of the Year in the 2014 World Retail Awards.

Other awards received include Multichannel Retailer of the Year and Marketing Advertising Campaign of the Year at the Oracle Retail Week Awards 2014 plus Best Department Store at the Drapers Awards 2014.

On January 1, 2008, the Oxford Street store

was awarded a Royal Warrant from Her Majesty the Queen as: “suppliers of haberdashery and household goods.”

John Lewis Reading is also the holder of a Royal Warrant from the Queen as suppliers of household and fancy goods. Peter Jones in Sloane Square, Chelsea, which is part of the John Lewis Group, is the holder of a Royal Warrant to both HRH The Prince of Wales and HRH the Duke of Edinburgh as draper and furnisher.

LIFE

D1

AMAZING! C1

Sports

| TUESDAY, JUNE 23, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

AMAZING! Jordan Spieth won the US Open in a heart-stopper on Sunday with a turn of events even more wild than the terrain at Chambers Bay. He thought he had it won with a 25-foot birdie putt on the 16th hole. He threw away a three-shot lead one hole later. He made birdie on the final hole. And then he thought it was over as Dustin Johnson settled in over a 12-foot eagle putt for the victory.

B D F

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The Associated Press

NIVERSITY PLACE, Washington—Jordan Spieth is halfway home to the Grand Slam, a prize only three of the biggest names in modern golf have ever chased.

And he still can’t believe how he got there.

Spieth won the US Open in a heart-stopper on Sunday with a turn of events even more wild than the terrain at Chambers Bay. He thought he had it won with a 25-foot birdie putt on the 16th hole. He threw away a three-shot lead one hole later. He made birdie on the final hole. And then he thought it was over as Dustin Johnson settled in over a 12-foot eagle putt for the victory.

Three putts later, Spieth was the US Open champion.

“I’m still in shock,” he said with the gleaming US Open trophy at his side. “I’ve never experienced a feeling like this. It was a very intense back nine.”

Spieth became only the sixth player to win the Masters and US Open in the same year, and he joined Arnold Palmer, Jack Nicklaus and Tiger Woods in getting the first two legs of the modern slam that Palmer created on his way to Saint Andrews in 1960.

That’s the next stop for the 21-year-old Texan whose two major championships could not be any more different.

A wire-to-wire runaway at Augusta National. A nail-biter on the edge of Puget Sound.

And another major heartache for Johnson.

“I had all the chances in the world,” said Johnson, who missed six putts inside 10 feet on the back nine and finished one shot behind.

Spieth, the youngest US Open champion since Bobby Jones in 1923, did his part. Even after letting Johnson and fast-closing Louis Oosthuizen back into the game with his double bogey on the 17th hole, Spieth responded with a 3-wood that caught the backboard on the 18th hole and

BusinessMirror

settled below the hole for an eagle putt. He missed it left, made birdie and walked off the green feeling more regret than excitement over his one-under 69 for a one-shot lead with the big-hitting Johnson behind him.

Johnson reached the par-5 18th with a 5-iron—that’s how far he smashed his tee shot on the 601-yard hole.

Make the putt and he wins the US Open. Two putts would force an 18-hole playoff on Monday on a course that favors power.

“I’m still amazed that I won, let alone that we weren’t playing tomorrow,” Spieth said. “So for that turnaround right there, to watch that happen, I feel for Dustin, but I haven’t been able to put anything in perspective yet.”

Spieth now prepares for Saint Andrews, the next stop on this improbable ride.

Woods in 2002 was the last player to get the first two legs of the slam.

The others to win the Masters and US Open in the same year were Craig Wood in 1941 and Ben Hogan in 1951 and 1953.

Hogan won the British Open in 1953, though he never played the Professional Golfers’ Association (PGA) Championship because it was held roughly the same time as the British.

Spieth finished at five-under 275 in winning for the third time this year. He is still No. 2 and closing fast on Rory McIlroy, who has top 10s in both majors this year without being a serious contender.

Spieth becomes the first player since Jones to make birdie on the 72nd hole to win the US Open by one shot—all because of Johnson’s three-putt. He also became the youngest player with two majors since Gene Sarazen in 1922.

For all the criticism of the unique course at Chambers Bay, this was the theater at its finest.

But there will be lingering questions about the condition of the greens, so bumpy that they were referred to as broccoli and Billy Horschel said he lost respect for the United States Golf Association. This championship ended with a short miss, the target of complaints all week.

‘IT WAS A BATTLE’ U

NIVERSITY PLACE, Washington—Jason Day was simply zapped.

All the energy and effort needed to get through his remarkable third round at the US Open caught up with the Australian while playing in the final group on Sunday.

Tired and drained, and still feeling the effects of the vertigo that caused him to collapse on the final hole of his second round, Day faded.

Understandable, and disappointing all the same.

“He was totally exhausted. He was exhausted yesterday,” Day’s caddie and longtime coach, Colin Swatton, said. “I’m not sure how much of yesterday took it out of him. I really don’t. It’s in the result. I don’t know what to say. I’m obviously disappointed.”

On another warm, grinding afternoon, Day couldn’t muster up the energy needed for the final round. He closed with a four-over 74 and finished at even-par for the tournament.

He made five bogeys and a double bogey, falling back into the pack with a rough three-hole stretch.

Day missed a 12-foot birdie putt at No. 11 and a 6-footer at the 12th, then followed up with a doublebogey six at the uphill par-4 13th.

By the time he made birdie at No. 16, Day was five shots behind the leaders.

“I had a lot of in-between clubs and started feeling a lot better after the 12th hole. That was a plus,” Day said.

“I think I hit 13 greens and just didn’t capitalize at all on the stuff that I had. It’s unfortunate because I felt like I gave myself enough opportunities. Couple of putts, 11 and 12, go in and it’s a different story, I feel different and opportunities come down the line. If you don’t hole those, it doesn’t go your way.”

Afterward, Day said he likely would be “taking some time off” to get his health in order.

During the third round on Saturday, Swatton was constantly giving Day encouragement, although there were a handful of times when he believed Day was potentially ready to call it quits on the hilly layout. Day’s vertigo returned near the end, even as he finished with birdies on three of his final four holes to move into a tie for the lead at four under.

There were less moments of concern about Day’s health on Sunday, although Swatton said he clearly wasn’t 100 percent.

“Early in the round he said he wasn’t feeling 100 percent and as the round went on he sort of got into his groove a little bit,” Swatton said.

“As you can tell, it’s very difficult to get them in the hole out there,” Johnson said. “The greens were really fast and they were rolling fairly smooth, but it was still bouncing a little bit.”

The final hour was so wild that four players could have won over the last two holes.

Branden Grace of South Africa was tied for the lead when he hit his tee shot on the reachable 16th hole over the fence and onto the railroads that run along Puget Sound. He made double bogey and never challenged again.

Spieth hit into the fescue-covered mounds right of the 17th and made double bogey just as Oosthuizen made one last birdie—his sixth over the last seven holes—for a 67 to post at four-under 276.

Johnson, who had a two-shot lead at the turn until missing so many putts on the back nine, was forgotten until he stuffed his tee shot on the par-3 17th to 4 feet for birdie. He just couldn’t make one from a little closer when it mattered even more.

“I did everything I was supposed to do,” he said. “I hit the ball really well. I’m proud of the way I handled myself and the way I played today. I just really struggled getting it in the hole today. I didn’t think I was hitting bad putts. I thought I was hitting them pretty good they just weren’t going in.”

It was the fourth heartache for Johnson in the majors, and this was the worst.

Jason Day, who collapsed on Friday with vertigo only to rally for a share of the 54-hole lead, fell back with missed putt and was never in the hunt on the back nine. He closed with a 74 to finish five shots behind.

Grace never recovered from that double bogey on No. 16 and shot 71 to tie for fourth with Adam Scott (64) and Cameron Smith (68).

SPIETH wins a stunner at Chambers Bay for the US »OpenJORDAN title. AP

Day’s problem was simply not hitting the ball as well as he did 24 hours earlier. When Day missed, he put himself in bad positions to try and salvage par on the sloped greens. He missed the green badly on the 10th and needed a hand from Swatton to get out of a steep bunker.

Day also took five more putts than he did in the third round.

“He didn’t hit as many fairways, missed the greens in some pretty bad places and didn’t putt as good as yesterday,” Swatton said.

Day still managed to finish in a tie for ninth for his eighth top-10 finish in a major since 2010 and his fourth top 10 in a US Open.

“I was taken by the fact that so many people supported me,” Day said. “I really made a lot of Jason Day fans out there this week, even though it didn’t end up the way I wanted it to end up. I fought a good fight. And I think everybody that watched the telecast knows that I never gave up. It was a battle.” AP

SPORTS »

TIRED and drained, and still feeling the effects of the vertigo that caused him to collapse on the final hole of his second round, Jason Day faded. AP

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Joey Salgado, the Vice President’s media affairs chief, said Makati City Rep. Abigail Binay hand-car r ied the resig nation letter of her father addressed to President Aquino.

“She was accompanied by Undersecretary Benjamin E. Martinez Jr., chief of staff of the Vice President. Executive Secretary Paquito N. Ochoa received the letter at around 3:55 p.m. at the Office of the Executive Secretary,” Salgado said in a press statement.

Bi n ay ser ved a s t he pre sidential adviser on overseas Filipino workers’ concerns and chairman of the Housing and Urban Development Coordinating Council (HUDCC).

He resigned on the same day a Pulse Asia survey was released, showing that he is the top trusted government leader despite the alle-

gations of corruption being investigated by the Senate.

When asked of the reason for her father’s resignation, Representative Binay told the BM: “My dad will issue a statement at the proper time.”

Binay announced his intention to run for president right after his assumption as vice president in 2010.

According to Article IX, Section 66 of the Omnibus Election Code, candidates holding appointive office or positions “shall be considered ipso facto resigned from his office upon the filing of his certificate of candidacy.”

Section 67 states “any elective official, whether national or local, running for any office other than the one which he is holding in a permanent capacity, except for C  A

SPECIAL REPORT

ANOTHER ADMINISTRATION, ANOTHER FAILURE FOR ECONOMIC CHACHA ‘CHOREOGRAPHERS’ B C N. P  J M N.  C

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

■ ■

Second of three parts

HE proposal to amend the Constitution—despite enjoying the support of the business community and was among the main legislative agenda of the previous administrations—has been rejected repeatedly by no other than President Aquino. The 1987 Constitution was ratified during the term of his mother, the late President Corazon Aquino.

President Aquino asserts that investments are coming in despite existing restrictions limiting ownership by foreign investors in certain sectors. The President also announced his stance against Charter change (Cha-cha) until 2016, saying Congress is wasting time on it.

Communications Secretary Herminio B. Coloma Jr. said he has yet to see a signal that the President had relented on his firm belief that there is no need to amend the economic provisions of the 1987 Constitution.

Resolution of Both Houses (RBH) 1, filed by House Speaker Feliciano Belmonte Jr. and Sen. Ralph Recto, is

eyeing to amend the provisions on the 60-40 rule limiting foreign ownership of certain activities in the Philippines.

The resolution will include the phrase “unless provided by law”in the foreign-ownership provision of the Constitution, particularly land ownership, public utilities, natural resources, media and advertising industries.

Under Article XII of the Constitution, foreign investors are prohibited to own more than 40 percent of real properties and businesses, while they are totally restricted to exploit natural resources and own any company in the media industry.

The Foreign Investment Negative List, released every two years, serves as a guide to non-Filipinos on what economic activities they can participate in.

On List A, foreign ownership is limited by the mandate of the Constitution and specific laws. On List B, foreign ownership is limited for reasons of security, defense, risk to health, and morals and protection of small- and mediumscale enterprises.

The amendments to the Charter need to be atpproved through separate votings by both chambers, with a threefourths vote required from them.

C  A

THE Department of Tourism, Asian Development Bank (ADB) and the government of Canada launched on Monday a new project, dubbed “Philippines Improving Competitiveness in Tourism,” with (from left) Canadian Ambassador to Manila Neil Reeder, Tourism Secretary Ramon R. Jimenez Jr. and Kelly Bird, director for Public Management of ADB’s Financial Sector and Trade Division Southeast Asia Department, leading the initiative. NONIE REYES

DOT stands US growth no longer translates pat on 10-M visitors goal to better export figures for Asia B M. S F. A

Special to the BM

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OURISM businesses working in every sector of the industry received grants to improve their competitiveness from the Asian Development Bank and Canadian International Development Assistance (ADB-Cida).

The grants are part of the $7.1-million (P319.5-million) technical assistance extended by Cida to the Department of Tourism (DOT), and administered by the ADB, to complement efforts by the agency to reach its 10million visitor arrivals target in 2016.

DOT officials on Monday stood pat on the agency’s 2016 foreign visitors target, despite missing their targets in the past three years, and underscored substantial increases in other tourism-performance indicators.

C  A

PESO EXCHANGE RATES ■ US 45.0110

I

F you wanted to figure out where Asian exports were headed, United States manufacturing data used to be a logical place to start. Not anymore.

The US is buying more goods from neighbors such as Mexico instead of Asia, and the shale-gas boom has kept demand within the country, said Christy Tan, head of markets strategy for Asia at National Australia Bank Ltd. The recovery in the world’s biggest economy is also more services-oriented this time, and some of the increase in wealth and employment is being used to pay off debt rather than on consumption, she said.

“Asia’s definitely lagging behind the US recovery, and so, if you’re talking about an export-led recovery, I’m afraid that’s not happening in Asia,’’ Tan said.

“It’s the structural shift in terms of the US recovery where demand is now more domestic oriented.’’

Export growth in China, Japan, South Korea and Singapore previously tracked a rebound in the Institute for

Supply Management’s US factory index as it recovered in 2009. This year exports from South Korea, Singapore and China to the US rose less in the first five months than they did during the same period in 2007 and 2010. Shipments from China gained 11.2 percent from January to May in 2015, compared with about 20 percent in 2007, the year before the start of the global financial crisis, data showed.

While Chinese exports spiked in February this year, the 48-percent increase from a year earlier was skewed by distortions from the timing of the Lunar New Year holiday. Slumping commodity prices in countries like South Korea—a large oil refiner—have also affected the numbers. The smaller export growth also reflects a more general slowdown in global trade since the financial crisis.

The US economy is poised to pick up this quarter, a Bloomberg survey showed. Whether that will spur exports from Asia is less certain. Bloomberg News

■ JAPAN 0.3669 ■ UK 71.4820 ■ HK 5.8071 ■ CHINA 7.2510 ■ SINGAPORE 33.7515 ■ AUSTRALIA 34.9004 ■ EU 51.0965 ■ SAUDI ARABIA 12.0029 Source: BSP (22 June 2015)

A2 Tuesday, June 23, 2015

BMReports BusinessMirror

news@businessmirror.com.ph

Another administration, another failure for economic Cha-cha ‘choreographers’ Continued from A1

Belmonte said to make the country globally competitive in attracting foreign direct investment (FDI), as well as to spur productivity and employment generation, “we need to amend economic provisions of the Constitution that are deemed restrictive and counterproductive.”

“Relaxing [the Constitution’s] economic provisions would make the country competitively attractive to foreign investments, capital and technology in utilities, media and education, among others,” he said.

The so-called 42-man Visayan bloc in the House of Representatives, led

by Liberal Party Rep. Alfredo Benitez of Negros Occidental, is also in favor of the economic Cha-cha.

“We, the members of the bloc, do hereby express our support to RBH 1 proposing amendments to certain economic provisions of the 1987 Constitution, particularly on Articles XII, XIV and XVI,” Benitez said.

According to Benitez, the bloc, recognize that the Philippines is currently enjoying a growing confidence from foreign investors and that minimizing the economic restrictions sends a strong signal to investors that the government is serious in improving the investment climate in the country, and in sustaining the positive outlook of the economy.

But despite these strong claims that the economic Cha-cha is good for

the country’s economy, the proposal amending the economic provisions of the 1987 Constitution has failed to get the support of several lawmakers in the House of Representatives.

Belmonte has just admitted that the proposal amending the Constitution will unlikely be passed this 16th Congress after the lower chamber went on a sixweek break without adopting it.

The Speaker also admitted that they aborted their plan to put on final vote the RBH because the leadership did not have the numbers to get the approval.

“People who are in business, our businessmen, foreign businesses, cannot understand why such an innocuous amendment, which is simply an empowering from Congress, is having a difficult time to pass,” Belmonte said.

As the author of the bill, Belmonte said he would still push the measure’s passage in the House, but only as a “political statement.”

In the Senate, Recto has also given up hope that they will be able to pass the amendments during the 16th Congress, which is set to end in June next year, after the lower chamber failed to adopt it.

“These economic provisions are perceived to be trade and investment barriers responsible for the continuous decline of foreign investments and are restrictive by global standards,” Recto said in his version of the resolution.

Besides Recto, Senate President

Franklin Drilon, Senators Juan Edgardo Angara, Ferdinand Marcos Jr., Grace Poe and Cynthia Villar are supporting the economic measure, provided that only economic provisions are amended.

According to Belmonte, during the 15th Congress, he also filed the economic Cha-cha but failed to get the nod of both houses of Congress due to lack of support from President Aquino.

“In the 15th Congress, [former Senate President] JPE [Juan Ponce Enrile] and I wrote a letter to President Aquino asking for his support on our proposal [amending the Constitution] . . .in other words, a great constitutionalist like JPE agreed entirely with me. But President [Aquino] wrote a memo and he said ‘l’ll have it studied.’ But the 15th Congress ended, we did not receive his study,” Belmonte said.

Besides Mr. Aquino, the Catholic Bishops’ Conference of the Philippines (CBCP) is also opposing the proposal changing the so-called highest law of the land.

C B C P Pre s i d e nt A rc h b i s h o p Socrates Villegas said the proposed amendments should first undergo indepth analysis.

“Before we rush into amending the Constitution, we, your bishops, urge all responsible to conduct serious studies in economics, sociology, the law and in related disciplines, including the Catholic social teachings,” Villegas said in the CBCP news web site.

Manila Auxiliary Bishop Broderick

Pabillo said the government should address corruption if only to improve the FDI inflows into the country.

Pabillo, in a CBCP web-site article, also said he sees no need for economic Cha-cha, saying it is widespread corruption that has long been affecting the country’s growth.

According to the bishop, many investors are wary of investing in a country where corruption in the government is rife.

“Let us not touch the Constitution anymore. What we need to do is fix our economic climate by addressing corruption because that drives foreigners away,” he said.

In the lower chamber, Party-list Rep. Fernando Hicap of Anakpawis said militant groups, like the Kilusang Magbubukid ng Pilipinas and its regional affiliates in Southern Tagalog, Central Luzon and Cagayan Valley, are mainly opposing the removal of protectionist provisions that ban 100-percent foreign ownership of corporations and land.

Hicap said Cha-cha would activate anti-Filipino and anti-people laws that favor foreign interests, especially those against farmers’ rights on land, workers right to living wages, small businessmen and Filipino professionals.

Party-list Reps. Emmi De Jesus and Luzviminda Ilagan of Gabriela branded the Cha-cha as an act of treason.

Party-list Rep.Terry Ridon of Kabataan also expressed belief that RBH 1 would “destroy the standards and limits set by the Constitution” and would also spell

disaster for the Philippine economy.

“RBH 1 poses a double-edged threat: one, it will open new loopholes in the 1987 Constitution that would allow the haphazard revision of economic provisions; second, the catch-all amendment pushed by the House Speaker will inevitably lead to the bastardization of constitutional standards and limits,” Ridon said.

Party-list Rep. Neri Colmenares of Bayan Muna said any form of Cha-cha now, whether it be economic or political, is dangerous because it will open the floodgates for any or wholesale amendments to the Constitution.

Also, according to the survey by Pulse Asia, about three of five Filipinos do not want the 1987 Constitution amended at this time, though nearly half of them are open to having it amended sometime in the future.

“For 62 percent of Filipinos, there is no need to amend the 1987 Constitution at the present time—with 32 percent opposed to Charter change at any other time and 30 percent being open to Charter change at some future time,” it said.

The survey results came following Belmonte’s several statements that the amendments he is pushing are purely for the economic provisions. Belmonte said he will not allow anyone to insert any provision other than what is specified in his resolution.

“We are not interested in changing the [form of ] government, only the economic Cha-cha. Foreigners

don’t care what form of government we have; what they are interested in is what kind of economic policies we have,” the Speaker said.

For Bagong Alyansang Makabayan Secretary-General Renato Reyes Jr., the House of Representatives will be committing a “national betrayal” once it approves the so-called economic Cha-cha.

“While foreign powers are playing tug-of-war in the West Philippine Sea, here are our congressmen moving to sell the entire Philippines to foreign interests. This is the worst form of betrayal,” Reyes said.

“The rush to ease constitutional restrictions on foreign ownership is one of the biggest threats to our sovereignty and economy. The entire country will be up for sale to foreign powers,” he added.

“This move removes from the Filipinos the power to chart our own economic progress. We would be forever subsumed under the interests of big foreign corporations and their profit motives,” Reyes said.

But House Majority Leader and Mandaluyong City Rep. Neptali Gonzales II said some people believe the move is political. “They [people and some lawmakers] don’t want a Cha-cha because they think we are targeting to insert political provisions such as extension of term, allowing the president to run for reelection and shifting [from presidential] to parliamentary [the] form of government.” To be continued

The Nation BusinessMirror

news@businessmirror.com.ph

Editor: Dionisio L. Pelayo • Tuesday, June 23, 2015 A3

Poe told: Focus on residency, US, Japan join Philippines citizenship issues, not surveys in SCS military exercises T

HE US and Japan are conducting separate military drills with the Philippines near disputed islands in the South China Sea (SCS) signaling support for the country as China builds out reclaimed reefs in the waters.

The annual Cooperation at Afloat Readiness and Training (Carat) Philippines joint exercise started on Monday off Palawan island and will run until June 26, according to US Navy Spokesman Arlo Abrahamson. The Philippine and Japanese navies are holding drills around the same island through June 27, Japan’s Maritime Self-Defense Force said last week.

The US has backed Southeast Asian nations including the Philippines as tensions escalate with China over territorial claims in the SCS, while Japan is providing patrol vessels to the Philippine coast guard.

Closer to home, President Aquino has rallied neighbors to more aggressively respond to China’s efforts to enforce its claims to 80 percent of the waters.

“This year’s exercise reflects more than two decades of increasingly complex training ashore, at sea and in the air,” Abrahamson said.

The drill includes a sea phase with the littoral combat ship USS Fort Worth, diving and salvage ship USNS Safeguard and a P-3 Orion surveillance aircraft, as well as at least one Philippine frigate, according to the US Navy. It’s the first time a littoral combat ship has taken part in the Philippine Carat exercise.

Japan’s exercises with the Philippines will take place adjacent to the Spratly Islands, where China has created more than 2,000 acres of land in waters also claimed by the Philippines, Vietnam, Brunei Darussalam, Taiwan and Malaysia. Japan will send a P-3C antisubmarine, maritime surveillance aircraft and 20 personnel.

Land construction

TENSIONS in the area have risen recently with China warning planes and ships away from reefs where it is reclaiming land. The Fort Worth had

an encounter last month with a Chinese ship—it was reportedly followed by a frigate—and a US surveillance plane was repeatedly warned by radio to divert from its path near the reefs.

China will construct facilities to meet “necessary” military needs and various civilian needs, after it finishes reclamation in the near term, its Foreign Ministry said in a statement this month. The construction doesn’t target any nation and won’t affect navigation or aviation freedom, it said.

Protecting freedom of navigation in the disputed waters resonates in the region because the SCS hosts more than $5 trillion of shipping each year and is home to about a 10th of the world’s annual fishing catch.

China criticized joint drills involving more than 11,000 soldiers from the Philippines, the US and Australia near the contested islands in April. The expanded war games were inappropriate and ran counter to efforts to ease territorial tensions, the state-run Global Times said at the time. Bloomberg News

Legislator backs chopper deal whistle-blower’s WPP bid

By Recto Mercene

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EN. Teofisto “TG” Guingona III, chairman of the Senate Blue Ribbon Committee, on Monday assured the whistle-blower in the helicopter deal controversy that he is supporting her bid to be placed in the Witness Protection Program (WPP).

Guingona said he wrote a letter to Justice Secretary Leila de Lima on June 3 to request that Rhodora Alvarez be placed in the WPP in the wake of the latter’s concern that her life “may be in danger.”

Alvarez earlier disclosed alleged anomalies surrounding the purchase of secondhand helicopters by the Department of National Defense (DND). She accused DND officials of “tailor-fitting” the terms of reference for the supply to favor a bidder—Rice Aircraft Services Inc.

Guingona said de Lima has assured him that the request for Alvarez’s placement under the WPP “is being studied” and that a decision “will be arrived at within the week.”

He said Alvarez “plays a key role” in the Blue Ribbon Committee investigation on the controversy.

“We recognize the value of that role and we are making sure she is safe and protected so she can fulfill that role,” Guingona added.

Earlier, he said he wants DND officials to answer the “serious and potentially damaging allegations” by Alvarez in connection with the purchase of 21 refurbished UH-1 helicopters.

He said the accusations contained in an affidavit submitted by Alvarez are “disturbing.” He expressed hope that the DND will be able to answer them.

Zamboanga hero leads TOPS ’15

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HE commander of one of the military’s elite units, who was instrumental in ending the occupation by Moro National Liberation Front (MNLF) fighters of at least six barangays of Zamboanga City, led this year’s awardees for the Ten Outstanding Philippine Soldiers (TOPS) sponsored by the Metro Bank Foundation.

Col. Danilo Pamonag, commander of the Army’s Light Reaction Regiment (LRR), was cited for his role as the senior military commander who stopped the attack and occupation of MNLF fighters of the six barangays of Zamboanga City in 2013.

More than a hundred Moro fighters and soldiers were killed during the intense fighting as the troops cleared the barangays of the attackers.

“In 2013 his leadership was vigorously tested when a number of rogue MNLF members stormed Zamboanga City holding civilian hostages and human shields,” the citation reads for Pamonag.

“As the commander of the Armed Forces’ counterterrorism unit, he was able to successfully guide and motivate his men to accomplish their mission of rescuing more than 162 hostages, capturing more than 160 MNLF fighters and recovering high-powered firearms without leaving any of his men behind,” it added. Rene Acosta

DONATION FOR HUMANITY

Philippine Red Cross (PRC) Chairman Richard J. Gordon (second from left) and PRC Secretary-General Gwendolyn Pang (right) accept a check donation worth P7,368,000 from Yoshiari Kato (second from right)) Mitsubishi Motors Philippines president and CEO, and Junya Masuda, the car company’s executive vice president for marketing, during the PRC’s Annual Fund Generation Kick-Off held at a hotel in Pasay City. Mitsubishi and other partners were given certificates of recognition during the event.

ERRATUM

IN the story titled “Government urged to take over, overhaul MRT” published in the BusinessMirror on June 20, 2015, the group of scientist referred to should have been AGHAM - Advocates of Science and Technology for the People and NOT AGHAM party-list group.

We regret the error.

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By Joel R. San Juan

AW experts expressed belief that Sen. Grace Poe’s residency and citizenship qualifications would make or break her possible 2016 presidential bid and not the surveys.

Former University of the Philippines College of Law Dean Pacifico Agabin, litigation expert Raymond Fortun, and UP law professor Harry Roque Jr. all agreed that Poe first has to prove, either before the courts or the Commission on Elections (Comelec), that she is a natural-born Filipino citizen and has been a resident of the Philippine for at least 10 years before the May 2016 elections.

They added that the female senator must first hurdle probable disqualification cases before the Comelec and the Supreme Court before her popularity could translate into valid votes.

Poe has edged other presidential contenders in surveys conducted by both Pulse Asia and the Social Weather Station, in which she was ahead of her closest rival—Vice President Jejomar C. Binay—both by 8 percentage points.

“Qualifications to run for the presidency is enshrined in the Constitution. I am certain that the courts will not be moved to favor an unqualified

candidate regardless of competence, integrity or popularity,” Fortun said Fortun was obviously referring to Article VII, Section 2 of the 1987 Constitution, which requires a presidential candidate to be a naturalborn citizen and a resident of the Philippines for at least 10 years immediately preceding such election.

Agabin, for his part, believes that Poe’s popularity in the surveys would be rendered “useless” if she eventually gets disqualified over her residency or citizenship qualifications.

“So those issues [on residency and citizenship] still need to be settled if she intends to file her certificate of candidacy in October,” Agabin said.

Like Fortun and Roque, Agabin said questions on Poe’s qualifications are best threshed out in the proper forum.

For Fortun and Roque, it is before the courts; and for Agabin, it is before the Comelec after she has filed her certificate of candidacy.

Economy

A4 Tuesday, June 23, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

Aquino: P600B allotted for DPWH projects

By Butch Fernandez

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resident Aquino, bouyed by the ISO certification given to the Department of Public Works and Highways (DPWH), confirmed on Monday that the DPWH will get some P600-billion funding for projects in 2016, estimating it to be approximately 5 percent of an expectedly bigger gross domestic product (GDP) next year.

“Sa susunod na taon po, tinataya na ang budget ng DPWH ay katumbas sa limang porsiyento ng mas malaking gross domestic product natin,” Aquino said in a speech at the DPWH 117th anniversary rites on Monday.

Without identif ying specific projects, Aquino acknowledged the huge allocation for the DPWH on election year 2016 after briefly doublechecking the amount on his cell phone.

“Medyo malaki-laki. Somewhere in the vicinity of P600 billion ang naka-earmark for 2016 na mga proyekto ninyo.

At siyempre, di mabigat maglaan ng ganoon kalaking pondo kung sigurado tayong napupunta sa tamang lugar. Maski na isang libong piso, kung talagang duda kang aabot doon, ‘wag na lang,” he said.

Mr. Aquino, however, clarified that the estimated 5 percent of the projected GDP next year “is our target...right now, we are at four percent.”

“Pero dito po, ulitin ko, five percent of next year’s GDP, o ’yung projected GDP, ang target natin. Ngayon po’y nasa 4 percent na tayo. So, keep up the good work,” President Aquino told DPWH officials and employees, led by Secretary Rogelio L. Singson.

Mr. Aquino acknowledged that the ISO Certification, or ISO 9001:2008 Certificate for Quality Management System, is the result of the remarkable transformation at the DPWH under Singson.

Aquino openly credited Singson for erasing the DPWH former image as a “former poster boy” of anomalies in government.

DOTC earmarks P142.2M for Bohol, Camiguin airports

By Regina Coeli T. Aquino Special to The BusinessMirror

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he Department of Transportation and Communications (DOTC) seeks to improve the services of the airports in the Visayas by earmarking P145.2 million to develop the aviation hubs in Bohol and Camiguin.

In an invitation to bid, the transportation department invited companies to bid for the P60.06-million Tagbilaran Airport Development Project, which involves the completion of asphalt overlay of the runway to expand it to 27,600 square meters (sqm).

Bohol’s main airport needs renovation to accommodate larger planes of commercial airlines and to give better service to the increasing number of tourists in the province.

Meanwhile, the P85.149-million Camiguin Airport Development Project entails the correction of the 11,340-sqm runway slope. The rehabilitation of the airport is part of the government’s ongoing thrust to boost tourism in Mindanao.

BusinessMirror

Comelec moves back opening of bids for P2.5-billion OMR units to June 29

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By Joel R. San Juan

HE Commission on ElectionsSpecial Bids and Awards Committee (Comelec-SBAC 1) has decided to defer the deadline for the submission of bids for the P2.5-billion contract for the supply of 23,000 Optical Mark Reader (OMR) units to be used in 2016 elections.

In its Bid Bulletin 6, the SBAC 1 said it has reset the submission and opening of bids to June 29,

the same date for the scheduled opening of bids for the P7.8billion contract for the supply of

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70,977 OMR units.

“The bidding for the 23,000 and the 70,977 units of OMR could be pragmatically and conveniently conducted simultaneously to obviate incongruity in procedures and requirements of substantially similar procurement projects,” the Comelec announced in its bid bulletin dated June 18.

“In view of the foregoing, the SBAC 1 has resolved to move the schedule of the submission and opening of bids from June 23 to 29,” it further stated.

It also extended until next week the deadline to purchase bidding documents for the 23,000 OMR units. “Moreover, in faithful observance of the requirement of

Republic Act 9184, to extend equal opportunity to eligible, qualified and capable private entities to participate in the public bidding,” the SBAC 1 added.

The SBAC said six companies have already signified their intention to bid by buying the bidding documents for a nonrefundable fee of P75,000.

Among these companies are Sysco Paper Corp., Miru Systems Co., Smartmatic-Total Information Management (TIM) Corp., Dermalog Identification Systems GmbH, Indra Sistemas S.A. and Agan Montenegro Malasaga& Co. The SBAC 1 said bids must be submitted on or before 9 a.m. at the Bureau of the Treasury Convention

Hall at the Palacio del Gobernador Building in Intramuros, Manila, as the opening of bids will take place an hour later.

The bidding for the 23,000 OMR units is on its second round after the first round was ruled as a failure with the disqualification of SmartmaticTIM during the postqualification evaluation stage.

The use of the new OMR machines by combining the 23,000 and the 70,977 units is one of the two options being eyed by the Comelec for the 2016 polls.

The other option is the refurbishment of the old Precinct Count Optical Scan machines to be supplemented by the 23,000 OMR machines.

Abad defends UACS, says system seeks to keep tab on spending, detect irregularities

By Estella Torres

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udget Secretary Florencio B. Abad maintained that the administration has installed measures to monitor budget spending of agencies and detect irregularities through the Unified Account Code Structure (UACS).

He said the UACS of the Department of Budget and Management (DBM) aims to streamline the budget process and create an environment of fiscal transparency and accountability in government.

The coding system, Abad explained is a tool that agencies and departments can use to help monitor the status of each government project, activity, or program (PAP), as well as to record government financial data.

“The beauty of the UACS is that as a classification system, it gives oversight agencies a common reference in tracking each individual government project or program. This will not only aid us in managing the government budget more efficiently, it will help us detect irregularities,” Abad said in a news statement released on Monday.

Abad issued the clarification following concerns raised by Sen. Panfilo Lacson on some confusions over the UACS serial numbers of the projects or programs in the 2015 General Appropriations Act (GAA) as well items that were not identified or “left blank.”

Budget Undersecretar y Luz Cantor, likewise, said the codes in the UACS are generated by the system for each project or program that comes in but its presentation is different in the GA A document.

“In the GA A, these projects and programs are grouped ac-

cording to project categories, which may account for the sequential variation,” Cantor said in the same statement issued by the budget department.

“Likewise, the UACS permanently maintains each project or program code in the system even if these have already been fully implemented in the past years or were disapproved. For clarity’s sake, these aren’t presented in the current GAA to avoid confusion,” Cantor said.

Abad also said most items in the GAA are disaggregated and itemized.

“Unless identified as aggregated or ‘lump-sum’ funds [like the Special Purpose Funds or SPFs], funds have a corresponding item noted in the GA A document,” Abad said.

He said the UACS system also helps the DBM in monitoring spending as each code identifies and describes the item and fund in the GAA, depending on the category.

Abad also said that under the UACS, each PAP will get a unique number code that can go as high as 54 digits. The code is also divided into five distinct subcategories (including the Commission on Audit’s Chart of Accounts) that describe every aspect of the PAP. He said that each UACS code will also pinpoint the location of each PAP being implemented, up to varying degrees of specificity.

The UACS, Abad said is a big help for the DBM to monitor budget transactions, from appropriations and allotments to actual expenditures.

“Likewise, the system will allow others to derive and analyze data from each program or project, and later convert it to timely and useful information that will facilitate decision-making or policy-formation,” Abad said.

OSG asks SC to reset oral arguments on Torre de Manila construction freeze HE Office of the Solicitor General (OSG) has asked the Supreme Court (SC) to reset the scheduled arguments on the petition seeking to permanently ban the construction of the 46-story Torre de Manila condominium, as it blocks the iconic sight line of the popular monument of national hero Jose Rizal at the Luneta Park.

The SC has set the oral arguments on June 30 but Solicitor General Florin Hilbay asked for a one month extension from the said date to be able to prepare for the oral arguments.

In his five-page motion filed on Friday, Hilbay explained that his office wants to focus on the forthcom-

news@businessmirror.com.ph

ing hearings at the Permanent Court of Arbitration (PCA) in The Hague, Netherlands, on the case filed by the Philippine government against China over disputed islands in the West Philippine Sea. Hilbay told the Court that he is “presently undertaking very important arrangements and other pre-hearing preparations in order to ensure that the interest of the republic is best pursued and protected,” referring to scheduled hearings of PCA from July 7 to 13.

“As agent of the republic in the arbitration, the solicitor general shall lead the Philippine delegation in these crucial hearings involving

the jurisdiction and admissibility of the republic’s claims before an ad hoc arbitral tribunal of the Permanent Council of Arbitration,” he said.

Last week the Court issued a temporary restraining order (TRO) enjoining further construction of the building being developed by DMCI Homes Inc. The TRO was effective immediately and valid until further orders from the High Court.

The Knights of Rizal, in its petition, said that by defacing the visual corridors of the monument, the DMCI violated several laws mandating the protection and preservation of the Rizal monument. Joel R. San Juan

A PNP-SAF V-150 armored personnel carries drives over thousands of pirated DVDs, sunglasses, bags, lipsticks and sex-enhancing drugs at Camp Crame on Monday. Nonoy Lacza

IPO leads ceremonial destruction of P100M worth of pirated goods

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By Rene Acosta

he government destroyed on Monday an estimated P100 million worth of pirated goods that it has seized over the past months as the country joined other countries in celebrating the World Counterfeiting Day. The ceremonial destruction of the counterfeit products at Camp Crame, was led by the Intellectual Property Office (IPO) and attended by other offices forming the interagency task force against piracy.

“What we are destroying today are just samples of the seized items because most of the products have pending cases, and you could not just destroy them as it is,” IPO Officer in Charge Deputy Director General Allan Gepty said. “But under the rules, if there is a complaint or information, there is a remedy to fast-track

the destruction of counterfeit items,” he added.

Among those that were destroyed were fake designer bags and luxury items, counterfeit drugs, lipsticks, tools, softwares, sunglasses, compact discs and DVDs. The pirated products were seized by members of the interagency task force that included the Philippine National Police, the National Bureau of Investigation and the Bureau of Customs.

Gepty said the operations of the interagency task force headed by the IPO to rid the market of counterfeit products were continuing as the government aims to surpas its record haul last year.

“Last year we seized a total of at least $300 million worth of counterfeit goods and pirated items,” he said.

The challenge for the IPO is to sustain its campaign against the proliferation of fake

products following the country’s removal from the list of pirating countries by the United States Trade Representative’s (USTR) office.

The country had been off the list for a couple of years now.

Previously, the Philippines was in the list of the USTR for 20 years, joining other countries that have serious problems on the existence and proliferation of pirated goods and products.

“Our operations are continuing, and we are hoping to surpass [our record] last year,” Gepty said.

Gepty said the government’s strategy in combating the influx of counterfeit items is not only through law-enforcement operations, but through information campaign.

This a parallel intervention. While we are running after counterfeiters, we are also educating [the public],” he said.

briefs house adopts creation of oversight body on socialized, low-cost housing loan The House of Representatives has adopted on second reading a resolution creating a congressional oversight committee on socialized and low-cost housing loan restructuring and condonation.

Rep. Alfredo B. Benitez of the Third District, Negros Occidental, chairman of the House Committee on Housing and Urban Development, said that the oversight committee provided under House Joint Resolution 31 shall review the implementation of Republic Act (RA) 9507, otherwise known as the “Socialized and Low-Cost Housing Loan Restructuring and Condonation Act of 2008.”

Benitez said RA 9507 authorized the governing boards of the government financing institutions, such as the Home Development and Mutual Fund (Pag-IBIG Fund), Social Security System, Government Service Insurance System, National Home Mortgage Finance Corp., Social Housing Finance Corp., Home Guaranty Corp. and National Housing Authority, to continue the loan restructuring and condonation beyond the 18-month mandatory period of implementation from its effectivity.

“Six years since the enactment of RA 9507 and these government financing institutions have yet to submit to the House of Representatives Committee on Housing and Urban

Development and the Senate Committee on Urban Planning, Housing and Resettlement an annual report on the loan restructuring and condonation program,” Benitez said.

Benitez said there is a need to constitute a Congressional Oversight Committee on Socialized and Low-Cost Housing Loan Restructuring and Condonation to review the implementation of RA 9507. PNA

Diesel P0.25 centavos cheaper; no price movement for gas, kerosene

Oil firms will cut diesel pump per liter prices by P0.25 centavos a liter on Tuesday.

Pilipinas Shell Petroleum Corp. (PSPC), Seaoil Philippines Inc. (SPI) and Phoenix Petroleum Corp. said they will lower pump prices of diesel at 12:01 am.

The Department of Energy’s (DOE’s) oil monitor reported that diesel prices per liter played between P28.85 to P32.20 as of June 16, with most service stations offering diesel fuel at P30.05.

However, gasoline and kerosene prices will not move, according to the three firms.

With that, gasoline prices will stay at its rate of P41.20 to P47.85 per liter, based on the DOE’s oil-price monitor.

Most stations offer gasoline at P46.95 per liter. PNA

news@businessmirror.com.ph

Economy BusinessMirror

Tuesday, June 23, 2015 A5

Mindanao sees rise in renewable-energy projects

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AVAO CITY—Applications for renewable-energy (RE) projects in Mindanao posted a 25.64-percent increase, showing a growing interest for clean energy investments in the island-region.

The One Stop Facilitation and Monitoring Center (OSFMC), which handles the fast-tracking of pending RE projects in Mindanao, received 59 new applications adding to a total of 290 applications for RE projects with a combined capacity of almost 3,000 megawatts (MW).

In May this year, the center reported 231 applications with a combined capacity of 2,419.17 MW. The additional RE project applications will have a combined capacity of 578.92 MW if completed and fully operational.

“The projects are spread across hydro, geothermal, solar and biomass. The bulk of the pending RE power-project applications, however, are hydropower with a total of 242 projects and a combined potential capacity of 2,147.71 MW,” said Romeo Montenegro, director for Investment Promotions and Public Affairs Office of the Mindanao Development Authority (MinDA).

Montenegro, who also oversees the operations of the OSFMC, said majority of the hydropower projects are in Northern Mindanao.

At the recently concluded Energy Investment Briefing held here at the Waterfront Insular Hotel, Montenegro announced that Mindanao’s power supply mix will shift in 2017 to 45-percent RE and 67-percent non-RE from the current 55-percent RE and 33 percent non-RE. “The OSFMC ensures that facilitation and the fast-tracking of these energy projects are given utmost importance in order that Mindanao will continue to enjoy an affordable, reliable and clean energy source,” he said.

An initiative of MinDA, the Department of Energy, and USAID’s Building Low Emission Alternatives to Develop Economic Resilience and Sustainability (B-LEADERS) Project, the OSFMC is aimed to help address Mindanao’s power supply deficit by fast-tracking the approval process of RE projects.

Lawmaker: Review RE law

A party-list lawmaker on Monday urged Congress to the review the implementation of the seven-year-old Republic Act 9513, or the Renewable Energy Act of 2008.

Party-list Rep. Francisco Ashley Acedillo of Magdalo said that Congress should conduct a review on the RE law to further enhance and strengthen the country’s exploration, development, promotion and utilization of RE. “[We should review the law] after the Department of Energy admittedly failed to reach the sufficiency goal identified

by RA 9513 seven years ago as it only achieved 10 percent of the government’s energy sufficiency goal,” Acedillo said during the Kapihan sa Diamond Hotel media forum.

PNA with Lenie Lectura and Jovee Marie N. dela Cruz

With or without a replacement, Petilla says he will leave DOE post on June 30

By Lenie Lectura

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utgoing Energy Secretary Carlos Jericho L. Petilla is 100-percent definite that he is vacating his post starting July 1, with or without any replacement.

“My last day is on June 30,” Petilla said in a text message on Monday.

Petilla is the only Cabinet secretary that has not been confirmed yet. So, Malacañang reappointed him until June 30, he said.

Petilla’s resignation was supposed to take effect April 30.

As to the next Department of Energy (DOE) Secretary Petilla said he has no idea if the President has made a decision. “As for my replacement, I don’t know but I can’t be accused of abandonment since I extended my stay for two months already.”

There are four candidates vying for the next DOE secretary.

First, is former Energy Secretary Raphael “Popo” Lotilla.

The second candidate is current National Transmission Corp.

President Roland Bacani.

The third, DOE Undersecretary Zenaida Monsada, is also a top candidate. Monsada, a veteran in the energy sector, is Petilla’s top pick. The fourth candidate is National Power Corp. President Gladys Cruz-Sta. Rita.

Petilla, in his resignation letter, cited “personal and family reasons,” as to why he wanted to quit his job. He, however, did not deny that he is considering running for higher office in 2016.

Petilla had told the President as early as last year that he wants to pursue his personal plans and that his desire to resign from his post was delayed because he had to deal with so many issues in the power sector.

“I could not then because there were so many issues to deal with. There was the Meralco [Manila Electric Co.] rate hike, power restoration after [Supertyphoon] Yolanda, and the power situation for the summer of 2015,” he recalled.

In December of 2013 Petilla resigned after he failed to make good on his promise to energize the areas in the Visayas that were badly hit by a tropical storm. President Aquino did not accept his resignation.

“Now, there are those saying that I resigned because the emergency power I was seeking was not given. Worse, they said I resigned because I was not among those picked to be included in the ‘Magic 12’ of the Liberal Party. None are close to the truth,” Petilla, who was appointed in October 2012, said.

A6 Tuesday, June 23, 2015

Opinion BusinessMirror

editorial

What’s the problem with Indonesia?

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T seems like only yesterday when Joko “Jokowi” Widodo was elected president of Indonesia, with celebration and excitement from the local press and media—the BusinessMirror included. Back in October 2014, Philippine pundits far and wide congratulated Jokowi as the template for what the next Philippine leader should be like.

Here was a man of the people who had risen from humble middle-class beginnings to become first a city mayor and then governor of Jakarta who knew what needed to be done to bring prosperity and inclusive growth to his nation.

He brought government closer to the people and instituted reforms in transparency, health services, education and public transportation in the Jakarta area. His close election over rival Prabowo Subianto, a former military general, caused the New York Times to call him “the Indonesian dream” for being the first Indonesian president not from the military or the political elite.

Prior to Widodo’s election, the Indonesian economy had been growing at 5 percent to 7 percent since 2011. Indonesia’s gross domestic product shrank 0.18 percent in the first quarter of 2015 after the slowest annual growth rate in 2014 seen in five years.

Business confidence has fallen from 108 in the third quarter of 2014 to the current 96. Widodo’s public approval rating has spiked to negative numbers where a majority of the people are not satisfied with his performance. His “Mr. Clean” anticorruption image was severely damaged when he launched an assault against Indonesia’s highly regarded Corruption Eradication Commission.

This was compounded by naming a new national police chief, a man the commission had under investigation for corruption. The nominee was selected by members of Widodo’s political party.

When he took office eight months ago, Widodo said he would spend billions on infrastructure but the promised roads, power plants and ports have not materialized, largely because of “bureaucratic holdups.”

The government’s ban on the export of mineral ore has caused massive unemployment in the nation’s vital mining sector, particularly in the regions that are dependent on mining for their economic survival. Total export value of all goods is down 20 percent since the ban was put into place. The total value of imported goods, showing weak consumer spending growth, is off more than 25 percent. Automobile sales in May fell 18 percent from a year earlier, the ninth consecutive monthly decline.

The Indonesian rupiah is at a 17-year low against the US dollar, as capital flees the country to more profitable places.

Widodo has learned the lesson many idealistic politicians face when they reach the pinnacle of national office. When noble intentions confront harsh reality, harsh reality usually wins.

Let’s not lose Boracay Manny B. Villar

THE Entrepreneur First of two parts

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HE reported degradation of Boracay Island is alarming. It could aggravate the already slow growth of international tourist arrivals in the country.

In 2014 the number of inbound visitors totalled 4.83 million, representing a 3.25-percent improvement from 4.68 million in 2013, but short of the Department of Tourism’s (DOT) target of 5 million for last year. As a result, the department reduced its target for this year, from 6 million to between 5 million and 5.5 million tourist arrivals. That puts in doubt the 10-million target for 2016.

For the first four months of 2015, the DOT statistics show tourist arrivals increased by 6.99 percent to 1.81 million compared with 1.70 million for the same period last year. Visitor arrivals in April 2015 grew at a faster rate of 9.49 percent to reach 423,366, up from 386,665 a year ago. I consider what is happening in Boracay as an urgent and serious issue because it is the jewel of the Philippine tourism industry. Our country has been classified as a laggard in many areas, but Boracay put us on top, regionally and globally.

The 4-kilometer stretch of sand in

Boracay called White Beach has been touted as the “finest beach in the world.”

Adding to Boracay’s attraction is the shallow water surrounding the island; its sand is finer and brighter than most beaches in the archipelago.

First discovered by backpackers, Boracay has been enjoying a global reputation as the best in the world since the 1990s. International travel magazine Travel & Leisure named Boracay as the best island in the world in 2012.

Boracay, however, may have lost its No. 1 position among favored beach destinations in the world. In February Boracay was named the best beach in Asia by travel web site TripAdvisor’s 2015 Traveler’s Choice Awards. The White Beach won the top award for its “calm, warm waters and gently sloping sand.”

Worldwide, however, TripAdvisor ranked Boracay only as seventh best. The top position went to Baia do Sancho in Brazil.

The BPO business cycle John Mangun

OUTSIDE THE BOX

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F you want to understand how the business cycle works, look no farther than the call-center business in the Philippines.

If you want to learn how the business cycle functions most successfully without government interference, check the timeline of the Philippines’s business-process outsourcing (BPO) business.

The Philippine government has supported the industry and that is a huge and critical step away from interfering.

Investment incentives were given to the foreign companies to step up their operations here in the country. That’s good and similar to the practices that private businesses do when they introduce a new product.

Those promo ladies giving free samples of the latest noodle flavor or softdrink at the supermarket is a financial incentive to buy the product as is the buy-one-take-one deal. This is a successful marketing technique that was used by the government in the early days of the Philippines trying to attract new business.

As the global recession hit, the government assisted many returning overseas workers in receiving training and finding jobs in the business showing more support. The government also set up English language-training

programs and scholarships to help those that just missed being fully qualified for employment.

When Metro Manila seemed to be stretched to the limit of available and qualified personnel for the call centers many years ago, the national, provincial and local governments provided other locations that have expanded dramatically. Along the way, the private sector at times led and at other times followed government initiatives to support this growing industry. If the government and the private sector could work together as well in other industries, the country could be “richer” more quickly. But back to the call-center business cycle.

If you followed the industry over the last 12 to 15 years, you see the normal business cycle at work. In the beginning, there was a confusing landscape as to salaries and qualifications. You had high wages and low qualifications at some companies and low wages and

Several weeks ago, a local television station exposed the pollution of the water in some parts of Boracay caused by wastewater. And newspapers reported the results of a study conducted by the Japan International Cooperation Agency (Jica), which attributed the continuous degradation of the Boracay ecosystem to unabated commercial development and other tourism-related activities on the island.

The Jica study, which started in 2010, said the degradation primarily affected the coral reefs around the island.

Satellite images show that coral cover in Boracay has declined by about 70.5 percent from 1988 to 2011. The study noted the highest decrease in coral cover during the 23-year period between 2008 and 2011, when tourist arrivals rose by 38.4 percent.

The degradation coincided with the surge in tourism in Boracay. The study pointed to unmonitored snorkeling and diving activities as among the major causes of the destruction of the island’s coral ecosystem. The Jica also expressed concern over beach erosion, shrinking of the beach area, as well as the poor quality of water due to the discharge of untreated wastewater right into the sea.

Unless this practice is stopped, Boracay could be rendered unsafe for swimming and other water activities. When that happens, even the whitest, finest and brightest sand in the world will be shunned by tourists.

I agree with the Jica experts’ warning: “If the current environment situation in Boracay Island prevails, there will

high requirements across the street and all the other possible variations of these two factors.

Employee attrition, particularly moving to another company, is a critical part of the business. The call centers tried to stop this through what were really unlawful trade and employment practices. More important, restricting employee movement did not work and actually hurt the business. The free labor market worked better.

Then as the business reached its “teenage” years, there appeared to be a looming shortage of qualified candidates particularly in the area of English expertise. Salaries rose to get qualified people from other sectors like nursing, a booming business at the time. Some experts predicted the death of the callcenter business because the Philippines had run out of English speakers who were not subject to frequent “nose bleeds” on the telephone.

But over the course of a very few years, and not coincidentally as salaries increased, the number of young people looking for jobs that had more proficient English-speaking skills “magically” also increased. The normal market business cycle kicked in where supply increased to meet more expensive demand.

Then we went through a period where, because of the oversupply of qualified candidates, salaries came down.

Bonuses and employee incentives were reduced and companies increased their hiring standards.

All the while, the industry was growing (and continues to grow) both in terms

certainly be imminent loss.”

I don’t know who’s in charge of regulating activities in Boracay or protecting its natural endowments, but two things are clear. One, the existing system is not working, and two, steps should be taken to be stricter in implementing measures to preserve Boracay’s ecosystem.

The local government clearly doesn’t have the technical expertise to repair the damage caused by unregulated activities, or the authority to limit commercial development on the island. Thus, the national government must step in and maximize its authority over tourism and commercial projects in Boracay.

Anyway, Boracay is the top beach destination being promoted by the DOT in its campaign to attract tourists. We may need to adopt strict policies, including stiffer penalties, to enforce those policies. I’m sure that developers and businesses will follow if they are made aware that protecting Boracay’s ecosystem is also for their own benefit.

Protecting Boracay’s ecosystem should be replicated in other beach destinations. The Philippines’s archipelago of more than 7,000 islands has given the tourism industry so many beach destinations that can be marketed abroad.

These are nature’s gifts, and it is our responsibility to keep them in the same condition as these were given to us, so that generations of Filipinos may continue to reap the benefits from them.

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

of employees and company revenues by a steady rate of about 20 percent.

The call-center industry has kept a steady growth rate in commercial realestate development in many places around the country. New opportunities have been constantly opening up for employment outside of Metro Manila. BPO remittances have helped keep the peso exchange rate steady and the industry is a major contributor to the economy from being a small sideline a decade ago.

The important thing is that the callcenter industry has had mini-booms and mini-busts over that last decade. However, the normal business cycle was not interfered with nor did the government try to control it. The government played a critical but delicate role in the beginning to get the business going. It was there to help out when necessary and walked away when that was the prudent action to take.

As in every relationship—and the government and business is in a relationship—you have to know when to push and when to lay back. That applies to both parties. The industry did not push too hard for financial incentives. The government did not push too hard for more control. Both of these sensible practices allowed the business cycle to help make the BPO industry so successful.

E-mail me at mangun@gmail.com.

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

Tuesday, June 23, 2015

No preconditions please A facade of a representative government Ernesto M. Hilario

ABOUT TOWN

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HE Aquino government, we’re told by Malacañang, is open to the possibility of resuming peace talks with the Communist Party of the Philippines-New People’s ArmyNational Democratic Front (CPP-NPA-NDF), apparently in light of the advances made in political negotiations with the Moro Islamic Liberation Front.

The formal peace talks with the NDF were called off in April 2013.

The chairman of the government peace panel then, Alexander Padilla, said: “We need to see sincerity and political will on their part...and an end to the senseless violence they are inflicting on our people especially on innocent civilians.”

NDF negotiation panel chairman Luis Jalandoni hinted in April that formal talks might resume before the end of the Aquino administration next year.

But wait. There’s a whole raft of preconditions the NDF wants the government to put in place before the talks can resume.

One, the government should release 16 NDF peace consultants, including alleged top officials on the underground now under detention.

The NDF said government must also release at least 200 political prisoners, especially “those who are sick, elderly and those who have been imprisoned for four years or more.”

The government must also work toward socioeconomic reforms, including the removal of the government’s labor export policy, or the deployment of overseas Filipino workers that puts them in danger.

All these are preconditions that the NDF demands for the talks to proceed. If the NDF wants these from the government, are they also willing to give concessions to the government panel before they sit down?

An end to “revolutionary taxation” in the countryside? An end to attacks on government forces?

Without a formal declaration that both sides are willing to meet the other halfway on contentious issues, all talk about resuming peace negotiations is all sound and fury signifying nothing.

Politics behind delay in tollways rate hike

PRIVATE toll operators are up in arms against the Toll Regulatory Board (TRB) for sitting on their petitions for scheduled rate adjustments.

An agency attached to the Department of Transportation and Communications, the TRB supervises the operations of seven toll roads, including the North and South expressways.

The private sector operators of these public roads have pending petitions for toll-fee adjustments as per the terms of their concessions.

But the TRB has opted to put these in the backburner, apparently to earn political points for the ruling party ahead of the 2016 elections.

The scuttlebutt is that members of theAquinoCabinet’seconomiccluster, among them Finance Secretary Cesar V. Purisima and Public Works and Highways Secretary Rogelio L. Singson, are in favor of granting the overdue toll-fee adjustment to allow the operators to realize their rate of return from their multibillion-peso investments, as provided in their respective concession agreements or O&M contracts.

At first glance, the rate-adjustment freeze favors taxpayers, but this is actually bad news for motorists as it could undermine the toll operators’ expansion plans and stop them eventually from delivering better services to road users and improving the quality of the tollways.

The TRB has been urging the operators to improve and widen their tollways to ease the traffic congestion amid the huge volume of cars on the road.

However, how can the operators

The scuttlebutt is that members of the Aquino Cabinet’s economic cluster, among them Finance Secretary Cesar V. Purisima and Public Works and Highways Secretary Rogelio L. Singson, are in favor of granting the overdue tollfee adjustment to allow the operators to realize their rate of return from their multibillion-peso investments, as provided in their respective concession agreements or O&M contracts. undertake expansion projects, such as increasing the number of lanes from two to three or from three to four, in the absence of any investment-recovery component laid out by the government?

The only way for operators to generate more revenues to finance road improvement or expansion is through either a rate adjustment, direct cash infusion from the government or an extension of their concessions.

Among these three options, the most viable is for TRB to grant the rate adjustments, which are long overdue anyway and represent a small mark-up from current toll fees.

Take the case of the operator of the Southern Tagalog Arterial Road—a 42-kilometer expressway in Batangas from Santo Tomas to Batangas City—which had undertaken improvements sought

by TRB ahead of the still-suspended rate adjustments. Now, it finds itself in a bind on how to recoup its additional investment.

T he predicament of STA R operators certainly is something that prompts prospective investors to take a second look at putting their money here against the backdrop of an unpredictable business environment and the government’s disregard for the sanctity of contracts.

Posted on TRB’s web site are the rate-adjustment petitions of the operators of two of the seven toll roads under its supervision.

The petitions show that jurisprudence is on the side of these operators seeking long-overdue adjustments, as the Supreme Court (SC), while affirming the primacy of public interest in this issue, at the same time recognized the right of the private operators to a reasonable rate of return on their investments.

Here’s what the SC said on this issue: “Running through the gamut of our statutes providing for and encouraging partnership of the public and private sector is the paramount common good for infrastructure projects and the equally important factor of giving a reasonable rate of return to private sector’s investments. The viability of any infrastructure project depends on the returns—which should be reasonable—of the investment coming from the private sector.”

Further on, the High Tribunal pointed out: “While the interests of the public are ideally to be accorded primacy in considering government contracts, the reality on the ground is that the tollway projects may not at all be possible or would be difficult to realize without the involvement of the investing private sector, which expects its usual share of profit.”

E-mail: ernhil@yahoo.com.

Edgardo J. Angara

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MID the ongoing preelection buzz, three aspirants admitted that they prefer to run as an “independent” should they join the presidential or vice presidential races next year.

One described his running as an “independent” as being able to discern and decide on national matters without the constraints and partisan interests of a political party. Another said that previous elections show how there is no disadvantage to going solo. And the third said that candidates can still get political party support (ostensibly as “guest candidates” or coalition partners), so long as they are able to demonstrate that they are electable.

True enough, these remarks,

though, point up the poor state of the country’s political party system, where established political parties are just loose alliances based on expediency, machinery and money— rather than on shared ideologies and policy prescriptions. They underscore the extremely personalistic and hence, dysfunctional nature of Philippine politics, where electoral campaigns are organized around personalities, not on programs.

A few months shy of the deadline for the filing of candidacy, one un-

pleasant question to ask is whether or not political turncoatism will again become commonplace. Our electoral history in this regard has been far from encouraging.

Up to seven Philippine presidents jumped from previous parties to new ones as part of their bid for the presidency. A 2014 Asian Institute of Management policy paper even found that compared to the legislatures of Brazil, Russia, Japan, Italy and Spain, the Philippines exhibited the highest degree of turncoatism, up to 45 percent of the members of the House of Representatives between 2001 and 2013 were recorded as turncoat artists.

The upshot is political disenfranchisement. For most parties, choosing a standard bearer remains a top-down rather than a grassrootsdriven affair. Instead of becoming training grounds for everyday citizens, our political parties merely act as venues for party leaders to dispense patronage—which only

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leads to maladministration and policy instability.

For over a decade while in the Senate, I pushed for the Political Party Development Act (PPDA) to reform our party system and help political parties become institutional, transparent and accountable, and program-based. The salient points of the measure, among others, were stringent rules and guidelines for party accreditation; internal code of conduct; regular leadership selection; and a state subsidy fund to make political parties independent of and weaned away from lobby and vested interest money.

The PPDA gained headway during the 15th Congress, but failed to complete the legislative mill. The progressive members of both Houses of Congress should expedite passage in the run-up to the 2016 elections, and leave a mark in our representative government.

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

Chinese companies with no heir apparent Adam Minter

BLOOMBERG VIEW

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ANG Jianlin, chairman of Dalian Wanda Group and China’s richest man, has just one child, 27-year-old Wang Sicong. That would seem to make the question of succession at the privately held Wanda a simple matter.

The problem is, the younger Wang—a notorious playboy with an obnoxious Sina Weibo social-media feed that he keeps on behalf of his dog (including photos of the pet wearing gold Apple Watch Editions)— doesn’t seem prepared to take up his birthright leading the conglomerate, which develops commercial property and owns AMC theaters. In 2012 the elder Wang said of his shiftless son: “If he can make himself accepted by everyone [at Wanda] in the next five to eight years, he will succeed me. If he doesn’t have that ability, he won’t.”

Wang Sicong is part of a broader challenge facing the Chinese government. In a speech in mid-May, President Xi Jinping turned his attention to the generation of pleasureseeking business scions—or fuerdai, as they’re known—and called for a national effort to “make them appreciate where money comes from.”

But tempering the habits of China’s young and rich, after a lifetime spent indulging their impulses,

won’t be easy. And, unfortunately, the millions of family businesses that comprise the backbone of the Chinese economy don’t have a clear backup plan.

The fuerdai don’t just pose an economic problem. They also threaten China’s social fabric. Their extravagance provokes the country’s less fortunate (complaints about fuerdai spending habits are a constant subject on Chinese social media) and offends the Communist Party’s value system, which emphasizes public modesty, including in matters of wealth.

Last week, Chinese state media published a message from the United Front Work Department, an agency tasked with promoting the party’s ethic among nonmembers, complaining about China’s wealthy heirs.

Fuerdai “know only how to show off their wealth, but don’t know how to create wealth,” it noted. “If this behavior becomes a common problem for family-run businesses and makes all private entrepreneurs look bad,

or affects social confidence toward private businesses, it will no longer be simply an economic problem.”

In truth, the economic problem is a large enough challenge on its own.

More than half of China’s gross domestic product is generated by private companies and, according to a 2010 Chinese government survey, 85.4 percent of China’s private companies are family businesses in which an individual or family controls at least 50 percent of the firm. Over the next five to 10 years roughly three-quarters of those family companies is expected to face a leadership succession.

The most pressing question isn’t whether the fuerdai are capable of taking over the executive suite, but whether they even want to. Fortune Generation, a magazine published by an organization of children of wealthy entrepreneurs, reports that 65 percent of the group’s members who are part of manufacturing families aren’t interested in continuing the family’s line of work. Likewise, a 2011 study from coastal Zhejiang Province, traditionally a hotbed of Chinese entrepreneurialism, revealed that only 35 percent of the children of business owners had any interest in taking those businesses over.

One of the biggest reasons for this divergence is generational friction within families. Many of China’s first-generation entrepreneurs are influenced by their experience of China’s mid-century upheavals, prior to the country’s shift toward a market economy. The worldview of the

fuerdai, by contrast, has been shaped by wealth, privilege, and, quite often, overseas education that lends them a different perspective on the Chinese economy. In China, it’s common to meet young Chinese who reject a life in business because they “don’t like dealing with the government”—a thin euphemism for the graft that many Chinese entrepreneurs price into their transactions.

Elsewhere in the world, familyowned businesses deal with these kinds of succession problems by seeking out professional management. But that’s an unlikely option in China, where skepticism of outsiders is firmly rooted in the culture’s business traditions. (The Harvard Business Review recently reported that nearly three-quarters of all companies in Taiwan, and 69 percent in Hong Kong, pass down to family heirs.) It doesn’t help matters that China has a serious dearth of welltrained professional managers.

The Chinese government would be wise to try expanding the country’s ranks of professional business leaders. But for now Beijing seems focused on persuading fuerdai to simply lead more productive lives.

Last weekend, Chinese state media reported on a government-run seminar for 70 wealthy scions, average age 27, one-third of whom had “just returned from overseas study.” In addition to receiving instruction in management, these fuerdai were drilled on traditional Confucian virtues, including “filial piety.”

Chinese investors are swimming in a bubble William Pesek

BLOOMBERG VIEW

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PMorgan Chase and BlackRock disagree about China’s stock bubble. The former says last week’s 13-percent-share plunge is a reason to buy; the latter sees things “deflating quite rapidly.”

So who’s right? JPMorgan is correct in the very short run. President Xi Jinping’s government has fueled China’s bull market and it will do all in its power to sustain it. But in the months ahead, the odds favor BlackRock’s take, which is based on the Warren Buffett school of financial analysis.

“The tide is going to go out, and there’s going to be a lot of people without their swimming trunks on,” strategist Ewen Cameron Watt of BlackRock told Bloomberg Television, borrowing from Buffett’s observation about investors caught swimming naked when markets get shaky.

Considering the sudden wave of sell orders in Shanghai and Shenzhen, we’re about to witness a surge of investors caught skinny

dipping. The math behind Chinese stock markets’ more than $6-trillion surge over the past 12 months makes less sense by the day. Shares on mainland exchanges are trading at an average of about 256 times reported earnings, making China’s market mania of 2007 look rational by comparison.

The question is, can Beijing put a bottom under history’s biggest equity bubble? As JPMorgan strategist Adrian Mowat sees it, “policymakers will step in if the market correction gets beyond a comfortable level. I would imagine if the correction continues [this] week you will hear something reassuring.” He’s not necessarily wrong for the moment.

China will indeed throw everything it has at the market: central bank

rate cuts, tweaking margin-trading rules, slowing the pace of initial public offerings, talking up share prices, you name it.

What is wrong, though, is the belief that China can prevent the crash of a market already defying the most wildly optimistic of economic scenarios. Beijing can’t do it anymore than Tokyo could in 1990, Seoul in 1997 or Washington in 2008.

China is reaching the limits of its ability to prolong a rally that turned 928 days old on Friday. Beijing has encouraged companies to pursue splashy initial public offerings in order to sustain the excitement on stock markets, and lure Chinese households to open trading accounts.

The thought is that if average Chinese feel wealthy, they’ll buy into Xi’s vision of a “China Dream” and the legitimacy of the Communist Party.

But, the market bubble has grown to unsustainable proportions. The median stock, for instance, has a price-to-earnings ratio of 98, while the Shanghai Composite, which has a heavy weighting toward low-priced bank shares, is valued at 23 times. The reason bank shares are so depressed, of course, is China’s dueling bubble in debt. China has $28 trillion of public and private debt; then there’s the unprecedented $363 billion of margin

debt that’s supporting shares.

It doesn’t help that China’s economic fundamentals have turned for the worse. As Bloomberg Intelligence analyst Kenneth Hoffman detailed in a report on Friday, Chinese demand for steel is collapsing. On June 18 Bloomberg’s steel profitability lost $37 per metric ton, hitting a record low. Chinese manufacturing activity, Hoffman wrote, could be in for a “major decline,” even if Beijing ramps up its stimulus programs.

That may explain the breadth of last week’s selloff. Among 10 industry groups in the CSI 300 Index of the biggest Chinese shares, technology, phone and industrial companies plunged most—at least 15 percent.

The ChiNext Index of small-cap stocks slumped 5.4 percent on Friday alone, extending losses to 17 percent since a record high on June 3.

The selloff suggests China’s stimulate-growth-via-stocks plan may be approaching an endgame.

The government will surely try to backstop the market: Xi needs to maintain the aura of Chinese government omnipotence. But there will come a time when the tide turns and the market gets away from Beijing, proving that the world’s most exciting stock rally has no clothes. It may soon be upon us.

2nd Front Page BusinessMirror

A8 Tuesday, June 23, 2015

Binay makes early exit from Cabinet. . .

President and Vice President, shall be considered ipso facto resigned from his office upon the filing of his certificate of candidacy.”

Federation of Philippine Industries Chairman Jesus L. Arranza said that when the President and Vice President no longer “see eye to eye,” the best move for Binay is to resign. “It [resignation] has no reflection on President Aquino’s administration. The system of the government will continue and run smoothly.”

But the resignation, Arranza said, confirmed the intention of Binay to run for president in the next elections.

Management Association of the Philippines President Francisco F. del Rosario said the vacancy at the HUDCC should be filled immediately by “someone recognized for his capability for the housing industry...

HUDCC is the coordinating body for all housing agencies, and we have huge housing needs; it’s one of the national agencies that have to be manned to respond to the inclusive growth agenda. It is a very important sector.”

The Makati Business Club, Philippine Chamber of Commerce and Industry and Joint Foreign Chambers declined to give comments for now.

“The timing is most likely driven by growing friction over the ongoing corruption

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investigations against Binay and his family, which have been largely driven by Mr. Aquino’s legislative allies,” Richard Javad Heydarian, a political science professor at the De La Salle University in Manila, said in a mobile-phone message.

“There is a growing sense of frustration, if not panic, over Binay’s precipitous decline in surveys” of likely presidential candidates, Heydarian said. “So, surely, Binay wants to focus on battling against the corruption allegations, turn the tide in surveys and defend his family against potential prosecution.”

Binay, an ally of the late President Corazon Aquino, Benigno Aquino’s mother, made a name for himself as a human-rights lawyer during the the martial law years of the late dictator Ferdinand Marcos.

Then-President Corazon Aquino appointed Binay officer in charge of Makati City, Manila’s main financial district, after the popular street uprising that toppled Marcos in 1986. He and his family went on to run Makati for almost three decades. He won the vice presidency in 2010 without going through the usual route of first running for Congress.

“He probably wants to clear the air and try to gain lost ground,” BDO Unibank chief market strategist Jonathan Ravelas said. Claudeth Mocon-Ciriaco, Catherine N. Pillas, PNA, Bloomberg News

Bank deposits rose 7.5% in Q1 despite near-zero interest rates

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By Bianca Cuaresma

he various lenders reported 7.5 percent more savings and time deposits in the first three months this year, equal to P6.7 trillion, even though none of the banks pay depositors interest larger than 1.728 percent.

While the interest income on any bank deposit remains miniscule or fractional, the Filipino as bank depositor continue to patronize the various lenders for lack of better investment alternative

that some economists blame of the relative lack of financial savvy.

In the central bank’s comprehensive report on economic and financial developments in the first quarter, the Bangko

DOT stands pat on 10-M visitors goal. . .

In a ceremony on Monday, led by officials from the DOT, ADB and Cida, skills-training grants amounting to $440,000 (P19.8-million) were awarded to 23 businesses from pilot regions of Bohol, Cebu, Davao and Palawan under the second phase of the program.

They are Amarela Resort, Bahandi, Bluewater Panglao Beach Resort, Cambugay Tree Planters Association, Amorita Resort, South Palms Resort Panglao (Bohol); Cebu Association of Tour Guides, Cebu White Sands Resort and Spa, Costabella Tropical Beach Hotel, Jpark Island Resort and Water Park, Montebello Vista Hotel, Olango Ecotour Island Association, Quest Hotel Center and Conference Center Cebu; Association of Human Resources Manager in the Hospitality Industry-Davao chapter, Grand Menseng Hotel, Philippine Eagle Conservation Program Foundation Inc., The Pinnacle Hotel and Suites, Seda Abreeza Hotel (Davao); and

Calamian Association of Tourism Establishments Inc., Coron Restaurant Consortium, Hacienda El Sol Development Corp., Honda Bay Boatowners Association Inc., Skylight Hotel Group (Palawan).

“Tourism and hospitality used to be the least of priorities not until this government administration recognized its huge potential for inclusive economic growth,” Tourism Secretary Ramon R. Jimenez Jr. said in his speech at the ceremony.

“The structural reforms instituted by our President have, indeed, encouraged the private sector in the country and the rest of the world, including the government of Canada and the ADB, to respond positively.

And we could not thank them enough for investing in our country’s core strength, the Filipino work force.

“Hopefully, through this project we get to keep our best and brightest right here in the

www.businessmirror.com.ph

Philippines, closer to home, closer to friends and families,” he stressed.

Meanwhile, the DOT underscored the other performance indicators of the tourism industry, even though the agency has missed its foreign visitors targets for the past three years.

“The target of 10-million foreign visitors in 2016 remains as it is embodied in the National Tourism Development Plan for 2011-2016,” said Tourism Undersecretary for Market Development and Spokesman Benito Bengzon Jr. in a text message to the BusinessMirror.

But he added that “more important than the headcount is tourism revenue, which is a more significant performance indicator, and for which we are on track.”

Natural calamities, political skirmishes in the south, diplomatic issues with China, Hong Kong and Taiwan, as well as significant infrastructure shortfalls have slowed down the trips of foreign tourists to the

Philippines since 2012.

However, the DOT has been surpassing most of its tourism receipts targets, which indicate how much income has been earned by the tourism industry from visits by foreigners.

These receipts encompass monies spent by tourists on accommodations, food and beverage, tours and shopping.

In 2014 there were 4.8 million foreigners who visited the Philippines, which fell short of the 6.8-million arrivals target of the DOT. But tourism receipts reached P215 billion, exceeding the P168-billion target for that year.

Jimenez, likewise, said the agency is standing pat on the agency’s 10-million target for 2016, while stressing the significant leap in earnings of the tourism industry. “We’re aiming for the best while securing the real gains,” he told the BusinessMirror.

He added, “even at less than 10 million,

Sentral ng Pilipinas said the banks’ total deposits at endMarch this year swelled anew to P6.7 trillion.

This was 7.5 percent, or P4.7 billion, higher compared to the same quarter a year ago.

In terms of component, savings deposit expanded by 3.9 percent during the quarter to hit P3.21 billion, from the P3.08 trillion in the same period last year.

Time deposits during the period grew by 9.6 percent to P1.82 trillion as of end-March this year, from P1.66 trillion worth of time deposits reported in the first quarter of 2014.

“Savings and time deposits remained the primary sources of funds for the banking system,” the central bank said.

Savings deposits, which

are held in a bank for security reasons and at minimal interest rates, accounted for 47.76 percent of total deposits in the first quarter.

Time deposits, which are held for a fixed term and may not be withdrawn before a set date and with comparably higher interest rate, accounted for another 26.87 percent of total deposits.

Demand deposits, or transferable deposits, hit P1.65 trillion as of end-March this year, having grown by 12.8 percent during the period from P1.47 trillion last year.

Foreign-currency deposits and other deposits in foreign currency grew by 15.6 percent year-on-year, from P1.185 trillion last year to P1.37 trillion as of end-March this year.

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we are confident we will still hit our targets for revenue and our targets for employment.

This is because of the quality of our arrivals [i.e., length of stay and spending per head] are at an all-time high.”

The ADB-Cida grant program was launched last year and supported 25 businesses in carrying out training programs for over 5,000 employees, under the first phase of the grant program.

The first phase commenced in May 2014, and grants totaling over $821,000 (P37 million) were awarded to businesses from the pilot regions to plan and implement skills training to support business growth and employee development. Programs ranging from the core skills of front office, housekeeping, food and beverage, culinary and more professionally focused programs for tour guides and tourism associations were implemented over the period from July 2014 to June 2015.

Each of the 25 tourism businesses identified their specific training priorities and then planned a range of training interventions to address these challenges. The grants were used to pay for the costs of bringing in professional training programs. For some grantees, the goal was to improve the technical skills of staff to improve the quality of service in guest areas.

For other grantees, it was improvement in a specific area, such as putting in place good food hygiene or creating new dishes for the menu.

An additional feature of the project was the collaboration between tourism business and an academic institution, bringing in both teachers and students to take part in the training, thereby bringing education and industry closer together.

“Behind this scheme is the principle and belief that investment in the skills development of people is vital to a successful business in tourism and ultimately will lead to a more competitive tourism sector,” Jimenez said.