BusinessMirror June 30, 2015

three-time rotary club of manila journalism awardee 2006, 2010, 2012

U.N. Media Award 2008

BusinessMirror

www.businessmirror.com.ph

A broader look at today’s business Saturday 18,June 201430, Vol.2015 10 No. 40

Tuesday, Vol. 10 No. 264

Reserves declined due to forced outages of power plants

Luzon placed on red alert as power supply dwindled

By Lenie Lectura

T

hinning power reserves, which could result in power outages, forced the Department of Energy (DOE) to place Luzon on red alert on Monday afternoon.

Despite this, DOE officials said the island of Luzon—which is home to the country’s central business district and economic zones—was able to avoid brownouts. “ There’s the 340 -megawatt [MW] regulating reserves that the NGCP [National Grid Corp. of the Philippines] was able to tap despite the red alert. This was the reason we did not have any brownout,” Energy Undersecretary Mylene C.

Capongcol said.

The red alert was issued from 2 to 3 p.m. Prior to 2 p.m., NGCP issued a yellow alert starting 10 a.m.

A yellow alert means thin power reserves.

This is issued when power reserves dwindle and fall below 647 MW. “A red alert is issued when there is zero contingency reserve, which is about 647 MW. However, there is another security

P25.00 nationwide | 7 sections 32 pages | 7 days a week

n n

layer, the regulating reserves. This is NGCP’s last card,” Capongcol said.

After 3 p.m. on Monday, the alert shifted to yellow. The DOE lifted the yellow alert at 4:30 p.m due to “sufficient operating reserves.” Monday’s yellow alert was the sixth notice issued by NGCP for this month. The same alert was issued on June 3, 15, 17, 26 and 27.

In a separate advisory issued at 5 p.m., NGCP said, “Luzon grid was placed on red alert due to zero contingency reserve. Forecast load for 2 p.m. is 8,679 MW, while available capacity is 8,948 MW.” A red-alert notice is issued by NGCP due to forced outages of a number of power plants. The power plants that went on forced outage include Calaca 1 (300 MW), SLTEC 1 (121 MW) and Ilijan Block A (600 MW).

PHL economy seen growing by more than 7% this year on election spending

T

he country’s economic growth, measured in terms of gross domestic product (GDP), could still breach 7 percent this year, on the back of “massive” election spending in the second half and the rollout of public-private partnership (PPP) projects.

In its latest Market Call report, First Metro Investment Corp. and the University of Asia and the Pacific (UA&P) Capital Markets Research group said the sharp fall in fuel prices would also bolster consumption—one of the main drivers of Philippine GDP. “Expected GDP gains remain strong, as household consumption is supported with lower levels of inflation, more employment and more election spending,” the report read.

“Inflation is likely to ease further, as food prices continue to fall or steady with

the revival of supply chains, and as crudeoil prices remain depressed due to oversupply from the Organization of the Petroleum Exporting Countries and North America,” the report added.

The report noted that remittances from overseas Filipino workers (OFWs) will continue to remain strong and would boost consumption. Cash remittances, which were coursed through banks by OFWs, rose by 11.3 percent to $2.1 billion in March, the highest recorded in more than five years.

Remittances in January to March this year reached $5.8 billion, 5.5 percent higher than the level recorded in the first quarter of 2014. The report noted that the increase in OFW remittances in the first half of the year may settle at 5 percent.

The FMIC-UA&P Capital Market Research said the expected recovery in the See “PHL economy,” A8

See “Power supply,” A8

special report

banking sector still beyond the reach of filipino masses

By Bianca Cuaresma

W

Second of three parts

hile the banking sector continues to display formidable resiliency in managing risks amid the external headwinds, a significant number of municipalities in the country remain out of reach. A good number of Filipinos remain reluctant to own a bank account.

According to data from the National Baseline Survey on Financial Inclusion (NBSFI) provided by the Bangko Sentral ng Pilipinas (BSP), 7 out of 10 Filipinos who have savings opt to keep their cash at home, instead of entrusting the money to the banks. The data parallel that of the World Bank’s latest review on global financial inclusion, saying that only 31 percent of all adults in the Philippines own a bank account, and pale in comparison with peer countries in the region.

Likewise, in terms of geographical reach, more than a third of the country still does not have a banking presence.

The data from the central bank show that 595 municipalities still have no banking presence as of 2014. While this was an improvement from the 611 unbanked municipalities in 2012, this still represented a large proportion of the country’s total 1,490 municipalities.

Central bank Governor Amando M. Tetangco Jr. acknowledged that, no mat-

ter the relative success in establishing consumer access to the various financial services in most parts of the country, the BSP recognizes that the unbanked areas in the country remain “significant”.

In separate studies, the International Monetary Fund (IMF) and the Asian Development Bank (ADB) said one of the barriers to a more extensive geographical reach by banks is the archipelagic

PESO exchange rates n US 45.1420

nature of the country.

Also, as the central bank looks for solutions to the problem of the unbanked in the country, the NBSFI identified eight major reasons behind the Filipinos’ reluctance to open a bank account.

The most basic was the lack of money to open a bank account. Other reasons cited include the lack of a need for a Continued on A2

n japan 0.3645 n UK 71.0806 n HK 5.8230 n CHINA 7.2704 n singapore 33.4757 n australia 34.5334 n EU 50.3920 n SAUDI arabia 12.0385 Source: BSP (29 June 2015)

A2 Tuesday, June 30, 2015

BMReports BusinessMirror

news@businessmirror.com.ph

Banking sector still beyond the reach of Filipino masses Continued from A1

bank account; limited knowledge in opening and managing an account; the mentality that it is “expensive” to have an account; the minimum balance is too high; the bank is too far away; the lack of an identification card; the interest rate on deposits is too low; and a general lack of trust in the banks.

As a result, the BSP pounced on these responses to combat the relatively low banking-penetration rate in the Philippines.

“The top three reasons [lack of money, lack of need and limited knowledge] can be addressed with greater awareness through financial education, capacity building and personal finance management,” Tetangco told the BusinessMirror.

“The BSP, through a comprehensive Economic and Financial Learning Program [EFLP], is trying to address this,” he added.

However, Tetangco said, financial education should be a “collective responsibility” and a shared accountability among the BSP and other players, the financial institutions and the financial consumers.

“The next two reasons [it is expensive to have an account, minimum balance is too high] can be addressed by product suitability,” Tetangco said.

The central bank ’s solution to this was the establishment of microfinance programs in the country, essentially financial services served by institutions to low-

income individuals.

“Microfinance has proven that an appropriately designed product that is aligned with needs and capacities of the low-income sector can be provided in a sustainable and viable manner. Our regulations allow for innovative products that are tailor-fitted to the requirements of small clients,” Tetangco said.

“An example is a microdeposit account, which can be maintained even with less than P100 maintaining balance and has no dormancy charges. As of end-year 2014, there were over 2 million microdeposit accounts amounting to almost P4 billion,” the central bank governor said.

However, in a paper on financial inclusion, the ADB noted that, while the Philippine microfinance sector is rated as one of the best in the world, there remains a large unmet demand for microfinance services in the country.

In particular, the ADB noted that in 2005, almost two-thirds of poor families (or 17 million) cannot access microfinance services, no matter that 4.1 million are engaged in microenterprise activities for their livelihood.

Meanwhile, the BSP looks to address the problem of the banks’ being too far away from clients, as recorded in the NBSFI, is establishment of alternatives to banking.

As the central bank cannot mandate banks to put up branches in certain areas and can only encourage them through regulatory incen-

tives, the BSP looks at microbanking offices and the introduction of electronic financial services as alternative tools to reach the unbanked.

“Our regulations on expandi n g phy s ic a l re a c h t h rou g h microbanking offices [MBOs] and extending virtual reach through e-money and mobile-banking address the issue of distance to access points. As of end-year 2014, there are 517 operating MBOs serving 334 municipalities. Sixtyfour municipalities do not have regular bank branches but have MBOs. There are 31 e-money issuers and a wide agent network of 13,435 active cash-in and cash-out outlets. In 2014 there were 273 million transactions in e-money,” Tetangco said.

Asked on the efficiency of such alternatives to traditional banking services in delivering the needed financial access of citizens, Tetangco said that these alternatives—particularly the use of electronic money services (e-money)—is a “very potent” solution that “should be supported and promoted.”

E-money is a monetary value digitally stored in a designated electronic account that may be remotely accessed through an instrument or device.

“The e-money platform can be used to pay bills, make purchases and send or receive money in a safe way, just like traditional payment and remittance services, but perhaps in a more convenient and cost-effective manner. For

instance, a businessman can save time, money and effort in going to his bank by just using his mobile phone to pay his loan amortization or deposit money to his account. It is also cheaper to transfer funds via e-money—for example, it only costs at most P10 for every P1,000 money sent. Compare this to more than P50 for every P1,000, which is the [average] rate for most pawnshops and remittance agents,” Tetangco said.

The central bank governor also said transactional accounts, like emoney accounts, are an “enabler” and an “important first step” to access other financial services, such as savings, credit and insurance.

While Tetangco said banks still offer a wider range of products which are prudentially regulated, such as the benefits of interest-bearing desposits and the safety of deposit insurance, banks can use the e-money ecosystem in their operations, either by creating linkages with e-money service providers like telecommunications, or becoming e-money issuers directly or through outsourcing arrangements. “ T hese options present an enormous opportunity for banks to create their own local agent network in partnership with merchant customers as extended touchpoints, thereby expanding their virtual reach to unbanked communities,” Tetangco said.

IMF R esident Represent ative to the Philippines Shanaka Jayanath Peiris backed up the

central bank, saying that putting up alternatives has “considerable” impact on the country, most particularly the unbanked.

“In a ‘first best’ world, all residents would have access to both banking services and payment services. But given this is not always possible, ensuring that those without banking services at least have access to payment services becomes important [even though payment services cannot substitute for access to full-banking services, such as the provision of long-term credit]. This is why the BSP [and others] have directed considerable effort toward expanding the avenues for residents to send and receive funds in a safe and timely manner,” Peiris told the BusinessMirror.

The BSP also said the other concern on the lack of identification documents for opening bank accounts is also actively being addressed.

“Concerns about lack of ID and other documentary requirements are being addressed by our liberalized antimoney laundering [AML] regulations, allowing for reduced due diligence for customers carrying low AML risks, such as clients of microfinance with small-value transactions,” Tetangco said.

“Proof of identification will not be a problem, because there is an expanded list of acceptable IDs and financial institutions are only required to obtain at least one valid photo-bearing ID from the client,” he added.

As a result, despite the lag in the banking penetration in the coun-

try, the government, international organizations and local banks remain optimistic that the BSP will continue to find regulatory solutions promoting greater financial access in the country.

“High banking penetration, if we assume this to be the percentage of areas reached by banks, contributes to greater financial inclusion. But two things should be noted: First, while high banking penetration is important, we should also recognize the role of nonbank financial- service providers, such as pawnshops, cooperatives, microfinance, nongovermental organizations, etc., in increasing access to financial services. Second, financial access is not enough; financial inclusion encompasses other dimensions, such as usage, quality and welfare,” Tetangco said.

Add to that, the governor said, this means that, aside from physical access to financial products and services, these products and services must be appropriately designed, of good quality, and relevant to lead to actual usage that can benefit the person accessing the cited products and services.

“For a country like the Philippines where GDP [gross domestic product] continues to grow and yet the majority of the population are still outside the economic and social mainstream, financial inclusion is one of the tools to ensure that economic growth will be inclusive,” Tetangco said.

To be continued

news@businessmirror.com.ph

The Nation

briefs colmenares, sss members hit planned premium hike PARTY-LIST Rep. Neri J. Colmenares of Bayan Muna slammed the Social Security System (SSS) on Monday for planning to increase monthly premiums in retaliation for the passage of a House bill that raised SSS pensions by P2,000.

Colmenares and other protesters assailed SSS officials for their ploy to force members to finance the pension increase.

Colmenares, principal author of House Bill 5842 that would mandate a P2,000 SSS pension increase across the board, warned SSS officials that “we will fight against any premium increase, because it will cancel out any relief that would result from the pension hike.”

“The protest rally not only expresses objection to the planned increase in premium by the SSS but also urges the Senate to side with the people and immediately pass their counterpart bill,” Colmenares added.

“The SSS has more than P400 billion in assets. It must give part of the pension fund to its retired members. Besides, unlike other government-owned and -controlled corporations that remit their income as dividends every year, the SSS never plowed back to the government its income, which averages P30 billion a year. Under the law, SSS officials are supposed to conduct a regular study on how to increase the pension of pensioners, but they have failed to do so,” Colmenares said. Marvyn Benaning

congressman seeks pcg modernization

AMID China’s current aggressive activities in the West Philippine Sea, a lawmaker filed a measure modernizing the Coast Guard (PCG).

House Bill 5112, or “An Act modernizing the Philippine Coast Guard, Creating for the Purpose the Philippine Coast Guard Modernization Trust Fund and Appropriating Funds Therefor,” authored by Nacionalista Party Rep. Eleandro Jesus F. Madrona of Romblon, seeks to strengthen the capabilities of the Coast Guard to secure the country’s 36,000-kilometer coastline, as well as territorial waters.

Under the bill, the modernization program components include organization development; professionalization of its human resources; doctrinal development; infrastructure development; and equipment and facilities acquisition and modernization.

According to the measure, the proposed program shall be based on a ceiling of P50 billion for the first five years, and thereafter, may be increased commensurate to the increase in the gross national product.

“The PCG Modernization Trust Fund to be administered by the transportation secretary shall be used exclusively for the PCG modernization program, excluding salaries and allowances,” the bill said. Jovee Marie N. dela Cruz

BusinessMirror

Editor: Dionisio L. Pelayo • Tuesday, June 30, 2015 A3

Whistle-blowers confirm ‘double standard’ in inclusion to WPP

T

By Joel R. San Juan

HE head of the Whistleblowers Association of the Philippines on Monday backed a senator’s accusation of “double standard” against Justice Secretary Leila de Lima when it comes to accepting witnesses under the Witness Protection Program (WPP) of the Department of Justice (DOJ).

Sandra Cam, herself a former whistle-blower, claimed that de Lima has a history of rejecting prospective state witnesses if their testimony would be critical of the government.

“I agree with Sen. Nancy Binay with her sentiments because if you are a witness against a political opponent of the administration, they would do that, they would secure you,” Cam said.

“But if you are against government officials, naku, thank you na lang. This secretary of justice is a double-standard woman. Huwag na siyang magmaang-maangan at magmalinis,” she said.

Binay earlier criticized the DOJ for taking its own “sweet time” in

processing the application of Rhodora Alvarez, the whistle-blower in the alleged P1.2-billion Department of National Defense helicopter deal.

Binay also noted the apparent “preferential treatment” that the DOJ accorded to former Makati Vice Mayor Ernesto Mercado, who is now enjoying the WPP coverage.

Mercado is one of the whistleblowers in the corruption claims against the senator’s father, Vice President Jejomar C. Binay.

Cam cited three cases in which de Lima and the DOJ became “selective” of the witnesses they would be giving government protection and placing under the WPP. One of them was the case of prison

guard Makilala Kabungsuan, who sought witness protection from the DOJ in 2012 for exposing alleged rampant prostitution inside the New Bilibid Prison in Muntinlupa.

Cam said Kabungsuan was initially given temporary protection, but it was eventually withdrawn after a panel of investigators found probable cause to criminally charge Bureau of Corrections Director Gaudencio Pangilinan.

Pangilinan later resigned, and Kabungsuan was “thrown away” to the Davao Penal Colony, according to Cam. “Nandoon siya ngayon, naghihirap doon dahil pinatapon nila at wala siya sa [witness-protection] program,” Cam said.

The second case was that of the seven overseas Filipino workers who were allegedly raped and victimized by the sex-for-flight scheme in the Middle East.

“Nagyabang pa si de Lima noon at nagsabi sa Kongreso na poproteksyunan ang mga babae. Pero nang pumunta iyong mga babae, hindi niya hinarap.

Bakit? Kasi these women were complaining against labor attaches. They are government officials,” she said.

Without protection from the government, some of the Filipinos victimized abroad, Cam said, have been instead forced to go abroad once

more to look for jobs.

“These woman-whistle-blowers are against the administration, so wala silang [government] pakialam.

Pero kung alam nila [government] na kaya nilang gamitin against the opposition, bibilisan nila,” Cam said.

The third case was that of the immigration official who turned whistle-blower in the supposed escape of former Palawan Gov. Joel Reyes, wanted for the killing of environmentalist and broadcaster Gerardo “Gerry” Ortega in 2011.

“Witness siya sa pag-alis ni Joel Reyes. Nilagay ba nila sa witness protection? Hindi,” said Cam, adding that the whistle-blower now has been left to fend for himself and his family.

Meanwhile, de Lima denied the senator’s accusation, saying that Alvarez has provisionally been admitted to the WPP. De Lima recalled that when Sen. Teofisto Guingona III referred Alvarez to the DOJ on June 23, she immediately referred her to the WPP for evaluation.

“So, ano ang sinasabi nila na hindi ko inaksyunan? And I think less than two weeks ang gap. From the time Senator Guingona referred that to me, less than two weeks ang naging aksyon ng WPP diyan. So sana naman iyong nag-i-issue ng ganoong statement, chini-check muna nila ang facts bago nila sinasabi iyan,” she said.

Economy

A4 Tuesday, June 30, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

news@businessmirror.com.ph

House urged to look into CCT Program

A

By Jovee Marie N. dela Cruz

Suweco eyeing expansion of power projects

party-list lawmaker on Monday urged the leadership of the House of Representatives to act on the Makabayan bloc’s pending resolution investigating the implementation of the national government’s flagship Conditional Cash-Transfer (CCT) Program, or the Pantawid Pamilyang Pilipino Program (4Ps).

Gabriela Women’s Party Rep. Luzviminda Ilagan made the call after the Asian Development Bank’s (ADB) findings showed that almost P19 billion of the CCT Program’s P62-billion budget did not go to the poor. “ The Pantawid Pamilyang Pilipino Program’s leakage rate of 30 percentage is a huge waste of people’s taxes. The ADB’s findings that almost P19 billion of the CCT Program’s P62-billion budget did not go to the poor bolster the call to rechannel funds allocated to the Aquino administration’s much touted poverty-alleviation program directly to social services,” she said.

Ilagan said the number of poor

families continues to increase at a rate that is on a par with the increase in the number of politicians who seek to benefit from the program’s implementation, “exploiting poverty and cultivating mendicancy to bolster political ambitions and political patronage.”

“The CCT compels children to attend schools and mothers to bring their children to health centers, yet the quality of education and health care given them continues to deteriorate. Public-school classrooms, like public hospitals are overcrowded and are short of facilities and personnel,” she said.

“It would benefit poor families more if funds were channeled directly to health and, education and,

By Lenie Lectura

S

Photo shows two of the target beneficiaries of the Conditional Cash-Transfer Program in the Cordillera Administrative Region. Department of Social Welfare and Development

more important, toward job creation, instead of imposing conditionalities for meager sums. The CCT funds should be rechanneled to basic services,” Ilagan added.

According to the ADB, the CCT Program needs to improve the selection of its beneficiaries, saying, “The inclusive growth study notes, however, that improvements are needed in the program’s targeting system to reduce an estimated leakage rate of 30 percent.”

The ADB, however, said the program improved health outcomes and increased school participation among children 6 to 14 years old.

On her part, Social Welfare Secretary Dinky Soliman said the agency is already working to address problems in the implementation of 4Ps. In House Resolution 332, filed by Minority Floor Leader Rep. Ronaldo Zamora, Bayan Muna Reps. Neri Colmenares and Carlos Isagani Zarate, Gabriela Reps. Ilagan and Emmi De Jesus, Kabataan Rep. Terry Ridon, ACT Teachers Rep. Antonio Tinio and AnakPawis Rep. Fernando Hicap, the lawmakers direct Committee on Poverty Alleviation to conduct inquiries on the CCT implementation.

De Jesus said the national wom-

en’s movement has consistently documented many irregularities in the implementation of 4Ps and their ill effects on women and families, dispelling claims made by the government that it has improved the situation of the poor.

Hicap said the Aquino government should get an explanation from the Department of Social Welfare and Development on this reported irregularities on implementation of its program.

4Ps is a human-development program of the Philippine national government which targets children up to 14 years old.

MOBILE ENTREPRENEUR An ambulant vendor selling various motorcycle accessories walks past a mural of an elephant on the wall of the Manila Zoo in Malate, Manila. Despite the risks associated with roaming the streets to peddle their wares, many Filipinos continue to sell products on pushcarts to support their families. NONIE REYES

unwest Water and Electric Co. Inc. (Suweco) is looking at expanding its power projects by 50 megawatts (MW) more in the next five years, its top official said over the weekend.

“We have a total of 250 MW all in all, which include projects with partners. In the next five years, more or less, we aim for 300 MW,” said Suweco President Elizaldy Co, who added that the additional capacity could be done via an expansion of its existing projects.

Suweco is a member of the Sunwest Group of Companies owned

by Co. Investments for the additional 50 MW could amount to $150 million, the official added.

Co said Suweco will inaugurate two more power projects this year.

These include an 8-MW hydro facility in Antique and 5-MW diesel power facility in Catanduanes. “For this year, its Romblon, Antique and Catanduanes,” Co added.

Suweco has just inaugurated an 8.8-MW diesel-fired power facility in Barangay Batiano in Odiongan, Romblon.

Built at a cost of over P225 million, Suweco’s power plant consists of 8x 1.1MW diesel-fired generators.

It received its certificate of endorsement from the Department of Energy (DOE) in September 2014 pursuant to the government’s Missionary Electrification Development Plan under Republic Act 9136, or the Electric Power Industry Reform Act of 2001.

Suweco’s power facility is a welcome relief to more than 200,000 Romblon residents who have been suffering from the four to five hours of daily power outages since 2012.

Limited supply from the National Power Corp.’s Small Power Utilities Group (Napocor-SPUG) and the dry-docking of Napocor’s Power Barge 114 exacerbated the “rotational load shedding” in the island-province.

“We thank DOE Secretary Carlos Jericho L. Petilla, the ERC [Energy Regulatory Commission] and LGUs [local government units] of Romblon for supporting this power project,” Co said.

Town mayors from Romblon’s 17 municipalities and Rep. Eleandro Madrona welcomed the new power plant’s inauguration. They said stable and reliable power supply is a big boost for business, tourism and delivery of basic government services.

The diesel power facility is meant as an interim solution to the power woes in Tablas, Romblon, while Suweco completes its hydropower project.

Spain eyes PHL as a trade partner in Asean

B

ALER, Aurora—Spain is targeting to tap the Philippines as its top trade partner in Asean, according to Sen. Juan Edgardo M. Angara.

Angara said Spanish officials and businessmen are keen on increasing trade activities with the Philippines and making it the most important Southeast Asian trade partner.

As the Philippines and Spain observe the 116th anniversary of the historic “Siege of Baler” and the 13th Philippines-Spanish Friendship Day in this capital town of Aurora on Tuesday, it is expected that bilateral trade between the two countries will continue to expand in the coming years.

He said this year’s celebration carrying the theme “Transitions, Trade and Transpacific Changes” manifests the strong bilateral relations between the two countries as a result of their deep historical and cultural ties.

“The Aurorans have always looked forward to this event, which puts one in mind how the bilateral relations of the Philippines and Spain have shared the same vision for a brighter future,” he said.

Meanwhile, the PhilippineSpanish Friendship Day, embodied in Republic Act (RA) 9187, is celebrated on June 30 every year in this capital town and in Spain.

RA 9187 was authored

by Angara, then Aurora

ANGARA: “The Aurorans have always looked forward to this event, which puts one in mind how the bilateral relations of the Philippines and Spain have shared the same vision for a brighter future.”

representative, and his father, former Sen. Edgardo Angara.

It is meant to mark the act of benevolence which has paved the way in bridging better relations between Philippines and Spain.

The bilateral relationship

between the two countries has been rooted in the “Siege of Baler” which refers to the saga of 54 Spanish soldiers who holed out for almost a year inside the Baler Church more than a century ago even when the war has ended. Only 33 of them survived.

Angara said that after a century, the event has opened up opportunities for cultural and economic agreements, billions worth of investments and grants and numerous educational programs.

Based on the data, Spain ranks as the Philippines’s 28th largest trading partner with total bilateral trade amounting to $ 329.6 million in 2011. PNA

Economy BusinessMirror

news@businessmirror.com.ph

Tuesday, June 30, 2015 A5

Araneta Group ventures into solar energy

G

REGORIO Araneta Inc. (GAI) has joined the power industry to help meet the country’s demand for adequate electricity with its first solar farm that began supplying power to the national grid in March.

Partnered with Soleq, the 30-megawatt (MW) solar farm in Ormoc, Leyte, came at the right time after the province was hit by Supertyphoon Yolanda (international code name Haiyan) in November 2013.

The development of the project, which included land clearing, installation and maintenance of solar panels generated much-needed employment for locals while reinforcing power supply in Leyte and the country.

Among renewable-energy (RE) facilities, solar farm takes the shortest period to construct. Only six months after it began construction in September 2014, the $50-million solar farm in Ormoc began generating power in March.

Meanwhile, GAI is raring to launch in early 2016 what is seen to be the largest solar farm in Southeast Asia.

The company is eyeing its 100-MW solar project, which cost about $170 million, in Cadiz, Negros Occidental to begin supplying power to the national grid by January next year.

GAI hopes to contribute to the reduction of carbon emissions through the use of RE, by harnessing the power of the sun to produce electricity. “We want to be agents of change in the energy sector by investing in renewableenergy projects,” said Gregorio Araneta III, CEO of GAI. The company sees a bright future for the early players in the RE sector in the country.

PCCI gathers decision-makers to build stronger synergy for Asean integration

T

HE new economy, characterized by the increasing integration of economies and the globalization of business that has sharpened competition, is the focus of the 41st Philippine Business Conference (PBC) organized by the Philippine Chamber of Commerce and Industry (PCCI) on October 26 and 27.

Benedicto V. Yujuico, conference chairman and immediate past president of the Confederation of Asia-Pacific Chambers of Commerce and Industry (CACCI), said this year’s theme of the PBC, the country’s premier results-oriented dialogue between government and private sector decision-makers

is “Synergies in Partnerships for Global Competitiveness.”

After his appointment was announced by PCCI President Alfredo M. Yao, Yujuico said “the main challenge facing business is how to take advantage of new resources and markets while dealing with intense and growing competition,

2nd KSK training program on sustainable agri methods held in Leyte

SAVEMORE staff tour farmer participants of the Kabalikat sa Kabuhayan Program in Tacloban to show the quality of fruits and vegetables that must be met to be suppliers of the supermarket.

A

S part of SM Foundation’s support to communities in Leyte, the second Farmers’ Training Program or the Kabalikat sa Kabuhayan Program (KSK) was completed on June 22 and 23 in Santa Elena, Tacloban.

The 12-week hands-on training on modern farming technologies attended by 168 farmer participants culminated with a Harvest Festival and a graduation program attended by the participants, SM Foundation officials, the Department of Social Work and Development, the Department of Agriculture and local government units.

Part of the training was teaching them simple bookkeeping and marketing strategies to better guide them to achieve high daily income. Aside from these doable agricultural technologies, sessions on values formation, capability building and social entrepreneurship were, likewise, tackled during these sessions.

The farmers who participated aside those from Santa Elena were from nearby barangays Santo Niño, Kabalawan, Kamansihay, Bagakay, San Roque, Salvacion, Palanog and Calanipawan. Farmers from Alang-alang which is about 40 minutes away sacrificed commuting to the site to avail themselves of the training, while two from Palo also braved the heat and expenses to commute to the demo farm.

Cristy Angeles, program director of the foundation emphasized to the participants that SM is now gearing toward recovery programs gradually weaning typhoon victims from dependence on relief goods. Farmers are encouraged to apply the training most especially to those who have sufficient space for backyard farming and to those who till big agricultural farms. This enables them to attain food security and therefore be

self-sufficient.

At present, there are an abundance of jobs in the construction business in the city so that 60 percent of the trainees were women. One of the trainees, Magdalena Oquino, 38, with four children trained in the KSK; while her husband is a construction worker in one of the projects of USAID. She is planting sweet corn in a 1,000-square-meter leased property. Aside from that, she plants veggies in her backyard which she shares with her extended family.

She sells the harvested corn to a supplier of vegetables of Savemore and said she was able to enrol her second daughter in the East Visayas State University with her earnings in time for school opening in June. She hopes to continue planting corn which is in-season then shift to other products depending on the recommendation of the city agriculturist, Vicky Collantes.

Siblings Daniel and Erwin Rellona together with a sister-in-law Minerva Rellona are tenants of a 6-hectare property of a family who has allowed them to use the land after the devastation of their coconut plantation.

Recovery of the coconut may take years so they are doing corn planting and vegetable and fruit-farming until the coconut trees are fully recovered. They, together with other farmers, have formed an association so that they can deliver vegetables in bulk to supermarkets in Tacloban and Ormoc.

A Buyers Forum was conducted which taught them the quality and quantity of their produce versus the demand of their market, price negotiations and the actual cost of transporting produce from farm to market. A market tour in Savemore gave the participants an opportunity to study the quality standards set forth of fruits and vegetables in SM stalls.

while for governments, it is how to design and implement supportive policies and strategies.”

He said the key to success is for business and government to intensify their partnership to build and strengthen competitiveness.

The 41st PBC, the Philippines’s premier annual dialogue between government and private sector leaders, will dwell on building synergies and strategic alliances to deliver the promise of competitive environments, global integration of economies and value-added formation of industries to enable business to gain competitive advantage to grow and expand more quickly and efficiently.

The PBC program will touch on investment oppor tunities in the local, regional and global settings; it will highlight success stories and global and regional trends on business competitiveness, including strategies for

business and economic growth, developing a world-class infrastructure and advancing international trade partnerships.

Yao said the PBC brings together an influential audience of manufacturers, entrepreneurs, investors, CEOs, bankers, mining executives, transportation and telecommunications experts, leaders of various industries and government policymakers, Yao said.

“An intense focus of every Filipino businessman is to maximize the benefits offered by a market of 650 million consumers whose purchasing power is among the fastest growing in the world,” he said. “One company can’t best its competitors in this huge market all alone. If it wants an early success, it needs to be a value-producing link in a global supply chain. It needs to identify and work with strategic allies.”

Foreign business leaders from the CACCI and several enterprises

from Latin America, Europe, Japan and the US are attending the 41st PBC. Delegates from PCCI memberchambers in the regions can, thus, transform the 41st PBC as their venue to establish contacts with foreign businessmen exploring or planning to do business in the Philippines and the Asia Pacific.

Takeaways from the conference, aside from profiting through business networking, include insights from speakers and panelists from the Cabinet, local governments and the country’s top corporations who will discuss competitiveness, economic transformation and best practices.

An international expo of products and services will also be held.

The PBC participants will submit a package of business recommendations that are doable during the remaining months of the Aquino administration.

Opinion BusinessMirror

A6 Tuesday, June 30, 2015

editorial

Tourism: Malaysia can; why can’t PHL?

W

ITH all the excitement of local politics and the global financial markets in total chaos, maybe it is time to just lay back and relax on a beach.

Actually that is what a large percentage of the world has been doing, with international tourists reaching over 1 billion in 2014.

And tourism to Southeast Asia is growing at over 10 percent per year.

The revenue that countries in our region are generating is phenomenal. Looking at the data for 2013, which we grant is outdated, Thailand brought in $42 billion from its tourist industry.

Malaysia hit $21 billion and Singapore was right behind with $19 billion. Indonesia generated $9.3 billion and Vietnam posted $7.5 billion from tourist spending.

Naturally, the Philippines is at the end of the line with only $4.7 billion in tourism revenues.

For the first four months of 2015, revenues from tourism activities of international visitors grew by 2.81 percent, amounting to P77.14 billion, or about $1.7 billion. If that trend continues, total revenues for 2015 will be about $5.5 billion.

But the final numbers for 2015 may be worse. Last week the Department of Tourism (DOT) announced that it has cut its outlook for tourists and was no longer optimistic about hitting the medium-term target of 10 million by next year.

At this point we would normally be inclined to mutter something under our breath, turn the page and blame “normal” government inefficiency. But we know that the DOT under Secretary Ramon Reyes Jimenez Jr. has been diligent and hard-working at increasing tourist arrivals. So what is the problem?

Then something caught our eyes. Tourism Malaysia Director General Dato Mirza Mohammad Taiyab said recently that Filipinos are among their top foreign visitors with over 600,000 Filipino visitors in 2014, an 11-percent rise from the previous year.

Could we then assume that since Malaysia is so popular with Filipinos, the opposite could also be true? Unfortunately in 2014, the Philippines attracted 50,425 Malaysian arrivals.

In 2014 44 percent of all tourists coming to Association of Southeast Asian Nations (Asean) countries came from other Asean countries—expect for the Philippines, of course. Our top markets are South Korea, the US, Japan, China and Australia.

Malaysia’s top markets are Singapore, Indonesia, Brunei Darussalam, China and Thailand, followed by India and the Philippines. Taiyab says that his country has an advantage since their top visitors can drive in by car but visitors must fly to come to the Philippines. We think that is a feeble excuse. If 600,000 Filipinos can fly to Malaysia, why can’t 600,000 Malaysians fly to the Philippines?

For Malaysia and Thailand, the DOT uses as its marketing representative a local Malaysian travel agent, Borneo Tours. That is hardly a dedicated marketing program.

In the Philippines, Malaysian tourism promotion is handled through its embassy just as the Philippines does in the US, the UK, Japan, China, Germany, Australia and South Korea.

In Singapore, Indonesia, Dubai and Hong Kong, we also use local travel agents to represent our country.

Outsourcing has been good to the Philippines but maybe outsourcing our tourism is not such a good idea.

Since 2005

BusinessMirror A broader look at today’s business Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief

Online Editor

Ruben M. Cruz Jr. Dennis D. Estopace Eduardo A. Davad Nonilon G. Reyes Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro

Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines.

Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025.

(Advertising Sales) 893-2019; 817-1351, 817-2807.

(Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

www.businessmirror.com.ph

REGIONAL OFFICES

n DXQR -93dot5 HOME RADIO CAGAYAN DE ORO STATION MANAGER: JENNIFER B. YTING E-MAIL ADDRESS: homecdo@yahoo.com ADDRESS: Archbishop Hayes corner Velez Street, Cagayan de Oro City CONTACT NOs.: (088) 227-2104/ 857-9350/ 0922-811-3997 n DYQC -106dot7 HOME RADIO CEBU STATION MANAGER: JULIUS A. MANAHAN E-MAIL ADDRESS: homecebu@yahoo.com ADDRESS: Ground Floor, Fortune Life Building, Jones Avenue, Cebu City CONTACT NOs.: (032) 253-2973/ 234-4252/ 416-1067/ 0922-811-3994 n DWQT -89dot3 HOME RADIO DAGUPAN STATION MANAGER: RAMIR C. DE GUZMAN E-MAIL ADDRESS: homeradiodagupan@ yahoo.com ADDRESS: 4th Floor, Orchids Hotel Building, Rizal Street, Dagupan City

Preelection polling generally makes accurate prediction and may be a factor in an aspirant’s decision.

But that’s only one of several factors.

And, in this Internet era, despite measurement of voters’ sentiments that employs state-of-the-art devices, the polls can be dead wrong.

For instance, the recent general elec-

tions in the UK. Preelection surveys showed a hung parliament was certain, given the two major parties— the Conservatives (Tories) and the Labor Party—were running neckand-neck race.

And even the exit polls did not read the Tories would win a resounding victory. Or that a

Let’s not lose Boracay Manny B. Villar

BusinessMirror is published daily by the Philippine Business Daily Mirror

HOM

P

reelection surveys have generated much publicity as the deadline for the filing of candidacy draws near. And, while few have formally announced their candidacies next year, a number of presidential aspirants have said that they will make their decision whether to run or not on the basis of such surveys.

Jun B. Vallecera Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Max V. de Leon

Chairman of the Board & Ombudsman President VP-Finance VP-Corporate Affairs VP Advertising Sales Advertising Sales Manager Group Circulation Manager

Edgardo J. Angara

T. Anthony C. Cabangon

Associate Editor News Editor City & Assignments Editor Special Projects Editor

Research Bureau Head Creative Director Chief Photographer

The poll that matters

CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001 n DXQM – 98dot7 HOME RADIO DAVAO STATION MANAGER: RYAN C. RODRIGUEZ E-MAIL ADDRESS: home98dot7@gmail.com ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996 n DXQS -98dot3 HOME RADIO GENERAL SANTOS STATION MANAGER: AILYM C. MATANGUIHAN E-MAIL ADDRESS: homegensan@yahoo.com ADDRESS: Ground Floor, Dimalanta Building, Pioneer Avenue, General Santos City CONTACT NOs.: (083) 301-2769/ 553-6137/ 0922-811-3998 n DYQN -89dot5 HOME RADIO ILOILO STATION MANAGER: MARIPAZ U. SONG E-MAIL ADDRESS: homeiloilo@yahoo.com ADDRESS: 3rd Floor, Eternal Plans Building,

Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995 n DWQA -92dot3 HOME RADIO LEGAZPI STATION MANAGER: CLETO PIO D. ABOGADO E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal St., Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992 n DWQJ -95dot1 HOME RADIO NAGA STATION MANAGER: JUSTO MANUEL P. VILLANTE JR. EMAIL ADDRESS: homenaga@yahoo.com ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993

Printed by BROWN MADONNA Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila

THE Entrepreneur Second of two parts

T

he Malaysian Association of Tour and Travel Agents (Matta) declared Boracay as the Favorite Beach Destination 2015 during the annual Matta Fair in Kuala Lumpur in March.

Boracay’s fine white-sand beaches, as well as the Philippines’s biodiversity and wealth of natural resources, were cited by Matta during a news conference. And, at the time, the Philippine Embassy in Kuala Lumpur also launched the Second Ambassador’s Tour to the Philippines, which would take foreign diplomats to Cebu and Bohol this year.

While Boracay remains the top tourist destination, despite the emerging problems about the destruction of its coral resources and pollution, the Philippines has many other beautiful beaches and attractive spots that can be promoted as alternative destinations.

Panglao Island in the province of Bohol, for instance, can rival Boracay with its rich diving spots and beautiful beaches. Bohol also has many of the country’s historical churches, which should be worthwhile to visit, despite the damage caused by the 7.2-magnitude earthquake that struck the province in 2013.

This is the best time to pursue a massive campaign to promote tourism and recover from the slowerthan-expected growth in tourist arrivals in 2014.

The Department of Tourism (DOT) has declared 2015 as “Visit the Philippines Year” (VPY). The Philippines is hosting the Asia-

Pacific Economic Cooperation Ministerial Meetings and Leaders’ Summit in November, which is expected to have 25,000 international delegates.

Actually, the flurry of international events started in January, with the visit of Pope Francis, which gave global media exposure to the Philippines. In April the Philippines hosted the Madrid Fusion Manila, touted as the biggest culinary event in the world.

The commemoration of the 70th anniversary of the final battles of World War II in September is also expected to attract foreign visitors, particularly from the US and Japan.

The country is also hosting different events that feature international celebrities, like Katy Perry, Taylor Swift and One Direction, as well as sports tournaments, like the Siargao International Surfing Competition and the Philippine Dive Show.

All these events help put the Philippines and its offerings of tourist spots in the global travel market.

Global travel web site TripAdvisor, in February, included three Philippine beaches in the 2015 Traveler’s Choice Awards. In addition to White Beach in Boracay, which was named the best beach in Asia, the list also included Yapak

surge of nationalism would allow the Scottish National Party to take all but three of Scotland’s 59 constituencies.

Such was the failure of the UK electoral polls that the British Polling Council—the pollsters’ industry association—conducted an independent inquiry into the matter. And, while many explanations were proposed, the most popular was also the simplest—respondents simply said one thing and did another.

The UK experience, however, does not appear to be entirely novel.

Months before, during Israel’s parliamentary elections, Prime Minister Benjamin Netanyahu and his Likud party enjoyed a five-seat lead over opposition leader Isaac Herzog and the Zionist Union, whom opinion polls had predicted to win a four-seat lead in a runup vote.

Up to a year before the 1948 US

presidential elections, opinion polls clearly pointed to New York Gov. and Republican candidate Thomas E. Dewey winning over Democrat incumbent Harry S. Truman.

Dewey’s triumph almost became conventional wisdom. Yet the outcome confounded all, as Truman won and served another term as US president.

Methodologies and statistical techniques have advanced greatly since the 1940s and have become useful tools for making decisions.

Nonetheless, poll results should not be seen or taken as foregone conclusions, despite higher levels of confidence, larger sample sizes and slimmer margins of error. For like any other human behavior, elections are complex and, hence, unpredictable human phenomena.

Beach (also in Boracay), which was ranked fifth, and the Secret Lagoon Beach in El Nido, which placed 16th.

Being an archipelago is a challenge to the development of transportation infrastructure. On the other hand, the country’s more than 7,000 islands offer an almost limitless variety of getaway spots.

Global news leader CNN noted in an online report in February 2014 that the Philippines had “some of the world’s most diverse marine life…and most of them are relatively unexplored.”

In addition to Boracay and El Nido, the CNN report, titled “The Philippines’s best beaches and islands” picked eight other attractive destinations, some of which may even be unfamiliar to Filipinos. The CNN’s list: 1. Palaui Island in Santa Ana, Cagayan, is “all about raw beauty,” with white sands surrounded by volcanic rocks on one side and bluegreen waters on the other. Snorkelers and scuba divers will enjoy the island’s coral gardens and rich marine preserve.

2. Panglao Island, once a sleepy island, is now gaining popularity among tourists. It offers dolphinwatching, whale-spotting and diving among coral formations. Panglao is in the province of Bohol, which is famous for its Chocolate Hills (numbering more than 1,000), the tarsier (the world’s smallest primate) and Spanish-era churches.

3. Bantayan Island, Cebu, which has remained relatively untouched by modern life. The island boasts of white-sand beaches and a magnificent view of sunset.

4. Caramoan, Camarines Sur, has stretches of white sand, huge boulders and rock formations, caves, waterfalls, freshwater pools and underground streams. Mountain climbers can tackle Mount Caglago’s summit, which offers a magnificent view of

the Caramoan islands and islets.

5. Samal Island in Davao, has 118-kilometer coastline of white sandy beaches with clear waters, rock formations and mangrove and coconut trees. Visitors can stay in luxurious resorts or backpackersuited accommodations.

6. Siargao in Surigao del Norte is known as the surfing capital of the Philippines, but is also a beachcomber’s paradise.

7. Great Santa Cruz Island, Zamboanga, has a pink-colored beach, which was the result of pulverized red coral being washed up from the sea floor, mixing with the white sand on the surface. However, visits to the island require a permit from the Department of Tourism in Zamboanga City, which provides security as a precaution.

8. Pagudpud, a coastal town in Ilocos Norte, is known as the Boracay of the main island of Luzon, which can be reached by car from Metro Manila. It has caught surfers because parts of the island are exposed to winds that blow in from the West Philippine Sea and the Pacific Ocean, producing high waves.

It may be difficult to achieve the target of 10 million international visitors by 2016, considering that foreign arrivals totaled only 4.83 million last year, and this year’s estimate of 5.0 million to 5.5 million.

This should not, however, dissuade us from exploiting our natural advantage—the wealth of beautiful beaches and other vacation spots— to attract more visitors.

Addressing the environmental problems of Boracay should serve not only as a first step, but also as a reminder that we should preserve the beauty and protect the ecosystems in our tourist spots.

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

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

Tuesday, June 30, 2015

PPP project goes haywire Baffled with the stock market John Mangun

Ernesto M. Hilario

ABOUT TOWN

I

f this is how the Public-Private Partnership (PPP) Program of the Aquino administration is being implemented, no wonder it has proven to be far less promising than it’s been touted to be.

We’re talking about what’s going on at Camp John Hay in Baguio City, where the state-run Bases Conversion and Development Authority (BCDA) has been engaged in a longdrawn legal dispute with its private developer-partner, Camp John Hay Development Corp. (CJHDevco).

Last month the BCDA took over a portion of the former American facility using 20 armed guards, in violation of standing orders from the regional trial court (RTC) and the ruling of an arbitral tribunal of the Philippine Dispute Resolution Center Inc. (PDRCI) for the peaceful settlement of the legal standoff.

The BCDA also refused to settle its delinquent electricity bills for five Voice of America cottages occupied by its officers, prompting the CJHDevco to cut off power from these facilities.

But rather than settle its overdue bills after the power cut-off, the BCDA resorted to installing jumpers at the five cottages to reconnect these to the main power line.

CJHDevco decided to seek the Baguio City mayor’s intercession after the police had failed to act on the firm’s request for assistance to remove the illegal jumpers at the VOA compound.

Given the police inaction on these incidents, CJHDevco suspects that the law enforcers are in cahoots with the BCDA and its subsidiary John Hay Management Corp. (JHMC), or are probably being pressured to look the other way in the face of such illicit acts by the state-run firm.

CJHDevco had been the developer-private partner of the BCDA for 18 years. But that period had been marked by one legal feud after another, with CJHDevco accusing the BCDA of serial violations of its original lease deal or memorandum of agreement and revised memorandums.

The legal dispute led to a twoyear arbitration case that culminated in February with the PDRCI’s rescission of the 18-year-old lease agreement and orders for the lessee to vacate the Special Economic Zone (SEZ) and for the BCDA to return P1.42 billion in rental payments to CJHDevco.

The BCDA, headed by its president and CEO Arnel Paciano Casanova, has refused to pay CJHDevco and, worse, has been forcing CJH’s 1,631 sublessees to vacate the SEZ even if they are third-party investors “in good faith” who are protected by law from such arbitration cases or legal disputes between lessors and their principal lessees.

In ordering the eviction of the third-party investors, the BCDA has transgressed the RTC ruling that these sublocators are covered by the law on obligations and contracts, which, according to legal experts, shield third parties acting in good faith from arbitration disputes between lessors and lessees.

Former Chief Justice Artemio V. Panganiban, for instance, emphasized in a recent newspaper column that, “As innocent bystanders who were not parties to the arbitration, [third-party CJH investors] should not be penalized and deprived of what they had paid for in good faith.”

“While the arbitral decision may have settled the dispute between the two parties, it did not touch on the rights and obligations of the investors, locators and condominium owners in Camp John Hay who were not parties to the arbitration,” Panganiban wrote. “But, in good faith, they paid CJHDevco for their

rights over the homes, condominiums, golf-club shares and other improvements built thereon by the developer.”

Even lawmakers have taken notice of BCDA’s bullying tactics against CJHDevco and, now, against the CJH sublocators and concessionaires. Party-list Rep. Jonathan de la Cruz of Abakada and Rep. Winston Castelo of the Second District of Quezon City have been urging Congress to investigate the BCDA’s mismanagement of the John Hay SEZ and the reverse privatization that Casanova wants to implement following the PDRCI’s rescission of the agency’s lease accord with CJHDevco.

In House Resolution 1936, Castelo wants the House panels on bases development and on national defense to jointly look into the lapses committed by the BCDA that resulted to contract breaches in its lease agreement with CJHDevco​, notably the non-establishment of a One-Stop Action Center.

In a separate privilege speech similarly seeking a House investigation, de la Cruz said the questionable acts of Casanova in mishandling CJH has a “deleterious” effect on the modernization program of the AFP, which is supposed to get 50 percent of lease revenues under the bases-conversion law.

The government’s PPP has “gone haywire resulting from the misguided, misplaced and high-handed management style of the current BCDA leadership,” de la Cruz said.

DOST project picks up speed

QUIETLY and with little publicity, the Department of Science and Technology (DOST) has been doing its job of tapping local expertise to help solve the challenge of providing convenient, safe and affordable urban transport to the citizenry.

The DOST recently launched in Clark, Pampanga, the prototype of hybrid road train developed by its engineers. The 40-meter-long road train has a maximum speed of 50 kilometers per hour and can accommodate as many as 240 passengers, or 60 for each of the five air-conditioned and interlinked coaches, the last of which carries the vehicle’s generator set and battery system.

As it is a hybrid system, the train produces less smoke emissions compared to conventional vehicles.

The engines are elevated inside the vehicle, allowing it to withstand floods as high as 1.5 meters.

The vehicle also harnesses additional energy every time it decelerates through what the DOST calls its “regenerative” breaking capability.

The vehicle was developed by engineers from the DOST-Metals Industry Research and Development Center over three years and was assembled using locally fabricated parts, except for the controls and motors.

The development of the prototype racked up a total cost of P45 million, but the DOST said the actual cost per unit will be cut by at least half if it is produced in commercial quantities. They are willing to sell the license for the vehicle’s design to any local company that intends to mass-produce it. As of now, the DOST said they are already in talks to deploy road train units in Cebu.

The DOST deserves kudos for undertaking this project, which we hope the next administration will continue.

E-mail: ernhil@yahoo.com.

OUTSIDE THE BOX

B

ASED on the e-mails I receive on a daily basis, stock-market investors generally fall into two major camps. There are those who are confused about stock-price movement and know it.

There are those who are confused and do not admit it.

For the small group of professional traders and investors, they know that they know just enough to be dangerous and always assume that they are going to be wrong about the market.

Finally there is another small group—experts—that are sure that they know most everything. It is their overwhelming self-confidence that leads the majority of investors, particularly the new participants, into thinking “knowledge is power.”

Further, they preach that total knowledge is almost achievable—if you read their books enough times.

A proverb through many cultures reads something like this: “He who knows not and knows not that he knows not is a fool.” A better proverb would be “He who knows not and knows he knows not is the person you want to listen to. He is always learning.”

Many of the e-mails start with something similar to this. “I read in

one book that I should do this. Yet, another says my investing should be based on this strategy.”

Maybe the easiest thing to do is buy all the Top 100 ‘Best Sellers in Stock Market Investing’ on Amazon.

Unfortunately, you will not find the one you need. The title is “Ultimate Stock Market Investing From The Stock Market Gods On Mt. Olympus.” It has never been written.

Most of those Top 100 have some very good ideas, but too many investors believe that if they read enough experts, they can put it all together in one unified theory of the stock market.

“But why can’t I combine the ‘best’ of fundamental analysis with the ‘best’ of technical analysis?” Of course you can, in the same way you can combine two religions. But then, is the gods’ sacred animal the cow or the elephant in your new religion?

Fundamental Analysis (FA) is the concept that price reflects

“corporate value.’” Technical Analysis (TA) is the methodology for forecasting the future of prices through the study of past price movement and volume.

If you choose FA, you must also choose between the Efficient Market Theory that says prices always reflect value, or the Inefficient Market Theory that price does not always reflect value. If efficient, then buy revenue and profit trends. If not efficient, then you must devise a formula for determining when prices are too low or too high to value. Which is correct?

As in many religions, “It’s a mystery.”

I am a professional Technical Analyst (TA) with four decades of experience. But, you know what?

Ninety percent of TA is one step removed from astrology or feeling the bumps on a person’s head to predict their future. Put all the books on the shelf until they are covered with dust and start over. There are only two universal truths. Water flows downhill and money flows to profitable opportunities, often creating those opportunities in the same way flowing water creates a river.

The most underrated market strategy is “follow the money” as smart capital moves in anticipation of events. That is why, usually, the highest volume comes at the price tops and bottoms as that is when the “dumb” money is most active.

So how do you follow the money?

Watch for a volume spike first and then second, a price spike. Volume

The Kabuki art of public apology William Pesek

BLOOMBERG VIEW

P

UBLIC contrition has long been an art in Japan, and this past month has offered a great opportunity to study the form.

June has seen a sudden rash of apologies from top CEOs (including the bosses of Toshiba, Sharp, Takata and Toyota) and Prime Minister Shinzo Abe. The chastened executives have each stood stiffly before a sea of cameras, begging forgiveness before plunging into a deep bow. (Tears were optional.)

The apologies have coincided with Abe’s much-touted June 1 introduction of a corporate-governance code compelling executives to be more accountable. (The reforms include rules urging investors to speak out against management, and modest efforts to force CEOs to boost returns on equity.) The prime minister might even be tempted to cite the parade of contrition as evidence that his policy is working.

That would be a mistake. Japan’s shame culture, at least in the business world, has always been more about distraction than accountability, and this past month’s examples are no exception. Corporate apologies have allowed CEOs to feign taking responsibility for crises, before returning to business as usual.

Take Thursday’s apology by Shigehisa Takada, CEO of Takata, whose deadly air bags have made global headlines in recent months. His carefully crafted statement referred to eight deaths and hundreds of injuries dating back more than a decade.

But he stonewalled where it mattered

most—on the question of whether the company would accept a financial burden for producing flawed products by compensating victims. Toshiba’s CEO, for his part, expressed regret earlier this month for a widening accounting scandal, but glossed over how it happened, who’s being punished or how to fix the problem. And the head of Sharp bowed to shareholders, but offered no new thoughts on how his company might revive its moneylosing businesses or manage a huge debt load.

In the West, moments of corporate atonement tend to focus on the lessons from a crisis and how to avoid another. In Japan they’re about defusing the public outcry—they tackle only the symptoms of a crisis, not the underlying problem.

“It’s a Kabuki ritual,” says Robert Whiting, author of several books on Japanese culture, including Tokyo Underworld and You Gotta Have Wa. “Official in charge bows deeply in apology and, perhaps, resigns, but then reenters again from the back after media interest has died down

Toyota’s ambiguous apology this month was a case in point.

CEO Akio Toyoda bowed for the cameras to atone for the arrest of American executive Julie Hamp on narcotics charges. He steered entirely around the most important issues—namely, who exactly bore responsibility for the public uproar. He was careful not to address the appearance of selective prosecution in the case, or the question of why police made it public with myriad press leaks. and the price of the company’s stock is back up. You see the same thing in politics.”

Abe’s own recent gestures seem to fit the pattern. On June 5 he apologized for alarming the public following a breach of Japan Pension Service data. It’s hardly the first time that such a breach has occurred, but Abe offered no details on what he plans to do to protect sensitive information in the government’s possession. The most important apology of Abe’s career is expected to come in August, on the 70th anniversary of World War II’s end. Officials in China and South Korea have, with good reason, expressed worry that Abe will offer watered-down confessions of Tokyo’s previous crimes. Abe believes Japan has unfairly been cast in the role as wartime aggressor and that other countries have exaggerated stories about the Imperial Army’s brothels and sex slaves.

But part of the problem has to do

A7

cannot be hidden any more than water from a torrential rain can somehow secretly move down the mountainside. The price spike is that rainwater rather quickly cutting a stream into the face of the hill.

There is not any “daang matuwid” for the stock market and the sooner you accept that as a fact, the sooner you will improve your performance.

Trust your own judgment for a while and see what happens. The key is to run away as fast as you can when you realize you are wrong.

Are you smart and confident enough to leave a job, relationship, or even a house if you know it is not good for you? The same applies to buying stocks.

As for buying, go into companies that you like and want to be an owner.

Good—in the broadest sense of the word—companies see stock-price increases over time. Do you choose your relationships based on some sort of analysis?

If you want to be a stock “trader,” you will not become good at it from any book. The best traders always had a reliable mentor. But the best teacher is learning from your own mistakes.

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.

with Japanese culture. Apologies in Japan tend to be vague and sweeping so as to cover all possible past, present and even future scenarios. That helps to explain why, despite myriad apologies about its colonial past and World War II misdeeds, much of Asia says Japan is still obfuscating.

For executives, deciding how to express regret is a careful process.

Shamed executives can consult any number of books (like 2007’s Apologizing That Way Will Endanger Your Company by Tatsumi Tanaka) to help them pick from among the dozen or so most common penitential phrases.

They hope to display a proportionate amount of guilt and contrition— while leaving themselves maximal wiggle room, says Colin Jones of Doshisha Law School in Kyoto.

“One of the things about Japanese corporate apologies is that it is not always clear who they are directed at,” Jones says. “And that’s the whole idea.”

Toyota’s ambiguous apology this month was a case in point. CEO Akio Toyoda bowed for the cameras to atone for the arrest of American executive Julie Hamp on narcotics charges. He steered entirely around the most important issues—namely, who exactly bore responsibility for the public uproar. He was careful not to address the appearance of selective prosecution in the case, or the question of why police made it public with myriad press leaks.

Until Japanese CEOs back up their apologies with concrete action to change their ways and become more accountable, their words will ring hollow—as will government efforts to improve the sorry state of the country’s corporate governance.

The pope needs to go even further on the environment

By Randy Jurado Ertll Tribune News Service

T

HE message of Pope Francis on the environment is welcome, but he needs to go further.

The pope showed tremendous courage and leadership on this issue.

He will persuade a lot of Catholics to not just recycle but to advocate for real environmental protections at the international, national, state and local levels.

But it is much easier to make big declarations than to make small, concrete changes when it comes to the environment. Environmental

fights often take place on the very local level. I meet poor community activists who have to confront giant corporate polluters and developers.

Many do not get support from the government, foundations or major environmental nonprofits.

These community members have to struggle on their own, and some have lost their lives due to pollution.

Others have been murdered, including Chico Mendes, a well-known Brazilian environmental activist who was killed in 1988. He was fighting to protect the Amazon rain forest and ranchers and the government saw him as a threat.

We have many activists in the US waging lonely battles in poor communities and advocating for environmental justice. When Francis visits the US in September to make Junipero Serra (an 18th-century missionary) a saint, he should take the time to visit the most invisible, polluted and disempowered communities—specifically lowincome black, Latino and Asian neighborhoods.

The pope should also meet with major foundations to ask them why they do not adequately fund minority-focused environmental justice efforts. And he should also

request that their investments be made public. We may find some interesting links with corporate polluters. The New York Times has reported that the Nature Conservancy makes profits from oil investments in Texas. The group has assets exceeding $6 billion.

The pope’s efforts to raise awareness about climate change are very important, but he should also advocate for poor black, Latino and Asian communities in the US that have been the most negatively affected by adverse environmental conditions. They need him to intercede on their behalf.

2nd Front Page BusinessMirror

A8 Tuesday, June 30, 2015

www.businessmirror.com.ph

Govt fast-tracking infrastructure projects

P

By Butch Fernandez

resident Aquino, aiming to fast-track government efforts to spur economic activity in the countryside, on Monday personally checked on progress of ongoing projects seen to boost the tourism industry and business sector in Palawan and Cebu.

LACIERDA: “Improvements such as these help to stimulate our economy and boost our country’s reputation as a tourist and business destination.”

Accompanied by aides and local officials hosting his visit, Mr. Aquino’s delegation inspected and got updates on the progress of work at the Korean-funded Puerto Princesa Airport Development Project and the Mactan-Cebu In-

ternational Airport (MCIA) Terminal 2 project. “Improvements such as these help to stimulate our economy and boost our country’s reputation as a tourist and business destination,” Palace Spokesman Edwin Lacierda said.

Lacierda recalled that, just last week, the European Commission also removed all Philippine-certified airlines from the European Union (EU) Air Safety List, “thus granting them the authorization to operate in EU airspace.”

“This is a boon for the tourism industry, and the economy, too, as we can now expect more flights and exchanges to occur between our country and the EU,” he said. “Moving

forward, the Aquino administration aims to reap greater achievements for the Philippines and bring about even more benefits for the people,” he added. According to Lacierda, the Puerto Princesa Airport project and the MCIA Terminal 2 project “form part of this effort.”

The Palace official added that Mr. Aquino flew to Palawan to see for himself the progress of the Puerto Princesa Airport Development Project, which is slated for completion by January 2017.

The airport project, he said, was designed to accommodate the projected rise in the number of travelers to and from Palawan, adding that it is expected to increase airport pas-

senger capacity from 350,000 to 2 million each year.

From Palawan, President Aquino proceeded to Cebu to lead the groundbreaking ceremony of the new Passenger Terminal Building of the MCIA. “Just as in Palawan, the number of travelers to and from Cebu has also been rising in recent years,” Lacierda reported.

The Mactan terminal project, he added, is targeted to increase the airport’s annual passenger capacity from 4.5 million to 15 million, and is projected for completion in June 2019.

Apart from the construction of a new terminal, the project also involves the renovation of the existing Passenger Terminal Building, he said.

Survey reveals top companies where Filipinos want to work

L

eading online job site JobStreet.com has revealed the top 10 companies in the Philippines where Filipinos aspire to work.

In the second year of JobStreet. com’s online survey Top Companies Report, San Miguel Corp. (SMC) remains the top choice of Filipino job seekers. SMC also topped the list in the 2014 report.

This is followed by Nestlé Philippines, which retained its position from last year’s Top Companies Report. Business-process outsourcing (BPO) firm Accenture got the third spot, while Shell Philippines and Procter & Gamble placed fourth and fifth, respectively.

Completing the top 10 list are SM Investments Corp., ABS-CBN Corp., BDO Unibank, Coca-Cola Femsa and Unilever.

Meanwhile, JobStreet.com Phil-

ippines Marketing Director Yoda Buyco mentioned in a briefing on Monday factors that Filipino job seekers are looking for in working in these top firms.

“Salary is no longer the top reason why job seekers want to work in these companies,” Buyco said.

In the report, JobStreet.com survey also showed benefits and incentives are foremost factors that make job seekers aspire to work in top firms.

“If employees offered more benefits and incentives, they feel that the company cares for them,” Buyco added.

Other top factors that job seekers listed in working for top companies include salary, learning and development, company reputation, and work environment and culture. The survey was conducted in March, among 4,157 respondents. PNA

Rich people still love shopping the old-school way–survey

VISUAL INSPECTION A woman inspects boats docked on the Mogpog coastline just before sunset. Fishing is one of the main sources of income of locals in Mogpog, Marinduque. ALYSA SALEN

NREB wants ₧7.93/kWh FiT rate for wind projects

By Lenie Lectura

T

he National Renewable Energy Board (NREB) is seeking a new feed-in-tariff (FiT) rate of P7.93 per kilowatt-hour (kWh) for wind projects.

According to Energy Secretary Carlos Jericho L. Petilla, NREB formally asked the Energy Regulatory Commission (ERC) to adopt its proposed rate early this month.

“They re-filed. This, however, is still subject to ERC approval,” Petilla said on Sunday.

NR EB Chair man Pedro H. Maniego Jr., when sought for com-

PHL economy. . .

ment, confirmed on Monday that the “NREB filed a lower wind FiT rate with the ERC last June 11.”

“ERC to set hearing on this,” Maniego added.

The current FiT rate for wind projects is P8.53 per kWh. “But knowing the ERC, it won’t give more than P8.

So, it’s going to be lower than P8,” Petilla said.

The ERC is currently evaluating a “reasonable” new FiT rate.

The FiT is the per-kWh rate that will be guaranteed to renewableenergy developers to ensure the viability of their projects. Consumers shoulder the tariff through a new

line item in their electricity bills.

They are now paying an additional P0.0406 per kWh. The NREB is asking for an adjustment in FiT rates for wind projects to accommodate the increased capacity allocation of wind-power projects from 200 megawatts to 400 MW. The board is the body tasked by the Renewable Energy Act of 2008 to recommend policies, rules and standards to govern the implementation of the law, which granted fiscal and nonfiscal incentives to renewable-energy projects.

According to Energy Director

Continued from A1

country’s exports would also bolster GDP growth for the year. The research group said exports in the first quarter remained weak due to slowing production activities in Japan, China and the US. “Exports will rebound in the second quarter as the harsh winter and delayed consumption response of the steep drop in crude-oil prices zapped performance in [Japan, China and the US] in the first quarter,” the report read.

“We expect recovery to gain traction for the rest of the year,” it added.

The economy grew by only 5.2 percent in the first quarter of 2015, the slowest since the last quarter of 2011, when the country’s GDP expanded 3.8 percent. The government admitted that this was largely due to

its underspending. With the disappointing result in the first three months of the year, the economy must post an average of 7.5-percent growth in the second to fourth quarters to hit the government’s full-year target of 7 percent to 8 percent.

Earlier, global credit watcher Moody’s Investors Service said economic growth this year should prove slower than projected, on account of the government having failed to extend the liquidity boost that the private sector alone cannot provide.

In a credit assessment released on June 19, Moody’s scaled back its growth forecast by half a percentage point to 6 percent, from 6.5 percent originally. For 2016, Moody’s projects local output to be limited to only 6.5 percent.

Mario Marasigan, the additional allocation will help augment the needed capacity up to 2016, since wind-installation target is already subscribed. Earlier, the ERC approved the adoption of a new FiT rate of P8.69 per kWh for solar energy projects. The change in rate for solar follows after approval to increase capacity allocation from 50 MW to 500 MW was sought.

In 2012 the ERC approved the following FiT rates for renewable energy. These are P6.63 per kWh for biomass; P8.53 per kWh for wind; P5.90 per kWh for run-of-hydro; and P9.68 per kWh for solar.

Power supply. . .

Continued from A1

Meanwhile, a number of power plants reduced their output.

These include Quezon Power—from 460 MW to 188 MW, and the Santa Rita module—from 264 MW to 80 MW. Pagbilao 1 (382 MW), on the other hand, is still on scheduled maintenance.

As a precaution, the Manila Electric Co. (Meralco) has called on its Interruptible Load Program (ILP) participants to be on standby. “They are being notified and asked to confirm readiness to activate, if needed,” Meralco Utility Economics Head Larry S. Fernandez said.

As of 1 p.m. on Monday, 197 ILP participants confirmed their readiness, equivalent to 340 MW of deloading capacity. Under the ILP scheme, big power users will be asked to run their own generators when supply is short in the summer months, instead of getting their power from the Luzon grid.

In exchange, they will be compensated for their fuel costs. The electricity that would not be taken from the grid would be available to households and other users, sparing them from rotating blackouts. With a report from PNA

E

ven as shoppers flock to the Internet to get the skinny on everything they want to buy, many wealthy patrons still prefer the traditional method. They want to go to shops, peruse the racks and have a salesperson help them pick out the perfect item, according to a new survey.

Research and advisory firm the Luxury Institute surveyed 1,600 wealthy people about their shopping habits. The men and women earn at least $150,000 a year and boast an average net worth of $2.9 million. The study found that very few affluent shoppers research exactly what they want to buy, then go out and make the purchase. Instead, they’d rather walk around a store and see things up close. Plus, many insist on guidance from living, breathing humans.

“Luxury experts and luxury executives have bought into the myth that, whether its millennials or men or women, they’ve done so much research on the Internet that they can no longer be influenced in the store,” says Milton Pedraza, chief executive of the Luxury Institute. “This demonstrates the tremendous opportunity to create relationships based on expertise, trust and generosity in the store.”

For instance, when buying jewelry, nearly half of women don’t do any research whatsoever before heading to the store, preferring to gaze at all the shiny baubles in glass

cases and make their decisions on the spot. This number’s even higher when it comes to fashion accessories, with 60 percent of women opting to forego online research before snagging a pricey handbag.

The only exceptions are men who want to buy a watch, with 28 percent selecting the item beforehand, and women who are purchasing beauty products, at 26 percent. That’s because buyers of pricey watches are often aficionados wholly familiar with the world of fancy timepieces, while makeup purchases usually occur to replenish items that were used up.

Though visiting stores without help is the most popular method of researching what to buy, many affluent shoppers prefer the guided path, with aid from a salesperson. Men especially want help picking out watches and jewelry, while women are most likely to want an associate’s expertise on beauty products. Perhaps those workers behind the counter may stay relevant after all.

As for salespeople, the perpetual quest to “sell” the customer is a model that no longer works, Pedraza says.

Shoppers go to them for knowledge and guidance, not having products shoved in their faces. For this, luxury retailers must train workers to build real, human relationships over time. “If you earn their trust, you earn the right to contact them again,” he says. Bloomberg News