BusinessMirror July 16, 2015

BusinessMirror

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

U.N. MEDIA AWARD 2008

A broader look at today’s business Saturday 18, 2014 Vol. 102015 No. 40Vol. 10 No. 279 Wednesday, July 15,

www.businessmirror.com.ph

FRESH DEL MONTE PRODUCE INC. COMMITS TO INVEST P11.2B IN THE PROVINCE

INSIDE

NIKON ‘SUPER ZOOM’ Balance our acceptance

D

EAR Lord, when we look at ourselves, we see pains, mistakes and heartaches. We also see joys, strength, learned lessons and pride in ourselves. This should be our attitude in life: Seeing both the good and bad sides of us. This way, we can balance our acceptance of whatever comes in our life situation. We trust You, Lord, in exposing us to the ups and downs of life. Help us to overcome trials and let our hopes be over our miseries and failures with enough grace and humility. Amen.

YETTA L. CRUZ AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

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

Life

PC SALES SLOW BEFORE LAUNCH OF NEW WINDOWS SOFTWARE »D2

BusinessMirror

Wednesday, July 15, 2015

D1

Gmail adds ‘Undo Send’ button to cure your e-mail anxiety

THE Nikon P900 produces images at 4,608 by 3,456 pixels.

GMAIL is formalizing a solution to your e-mail nightmares: the “Undo Send” button. If you forward coworker gossip to the whole office, or deliver a love letter to your boss instead of your girlfriend, the goof-ups can be reversed. Gmail users can now retrieve their “oops” e-mails by putting a delay on all outgoing

messages by at least five seconds. The truly paranoid can add a 30-second lag.

Gmail users already worried over such possible snafus know that the undo option is not new; users could install it via Gmail Labs, an experimental section of Gmail, as early as 2009.

The Google crew recognized its popularity and gave it an

upgrade on Monday, making some observers ask: What took so long?

To turn it on, click “Settings” under the gear icon, and choose your cancellationtime period. Users who had already opted for the function under Google Labs will have their preferences turned on by default. LOS ANGELES TIMES

Cherry Mobile showcases new device at the 2015 Computex

NIKON’S P900 TAKES THE TERM ‘SUPER ZOOM’ TO A NEW LEVEL B J R | The Dallas Morning News

N

OT too many people know I went to college to become a newspaper photographer.

I began shooting pictures in high school and continued in college, graduating with a communications degree with an emphasis on photojournalism.

The first camera I saved up for and purchased with my own money was a Nikon FG, so shooting with the Nikon P900 (www.nikonusa.com) for the last week has been a walk down memory lane for me.

The P900 is a bridge camera.

I wasn’t familiar with the term until this week, but it makes perfect sense—it’s a bridge between the pocket camera and a full-blown DSLR. The P900 is an all-in-one—it does not have interchangeable lenses. But the lens it has is a doozey.

The P900 is in a subcategory of cameras called superzooms. Nikon and Canon seem locked in battle to best each other with longer and longer zoom range.

The Nikon P900 is the new champ.

The P900 has an 83x optical zoom lens, which is the 35mm equivalent of 24mm-2,000mm.

If you know what those numbers mean, you know that is an unbelievable range.

For comparison’s sake, Canon’s latest superzoom camera, the Powershot SX 60 HS, has a zoom range of 65x, but it’s a bit wider with a 35mm equivalent range of 21mm-1,365mm.

The Nikon’s range is so long that you’ll need a tripod or monopod to use the camera zoomed in all the way.

The Nikkor ED VR (vibration reduction) lens is sharp at the lower end of the range and not too shabby at the high end.

The autofocus speed is very fast, and I found the shutter lag (the time between pushing the shutter button and taking the picture) to be quite good.

The lens has an aperture of f/2.8 at the wide end up to f/6.5 when zoomed fully.

When fully extended, the lens doubles the length of the camera. The P900 has a 16-megapixel CMOS sensor that measures 1/2.3 inch. Image size is 4,608 by 3,456 pixels. The rear screen measures 3 inches with a resolution of 921,000 dots that swivels out and rotates to let you easily frame your shots from high or low angles. It’s not a touchscreen. You make adjustments with buttons and dials.

There is a high-resolution electronic viewfinder that turns on automatically when you raise the camera to your eye. The viewfinder is actually a tiny monitor, not an actual optical view of the scene.

The P900’s body is sturdy, with natural spots for your

fingers to rest while you shoot. It’s pleasing to hold and easy to use, but the navigation ring on the back is a bit small for my big hands. There are dual-zoom controls, one on the shutter button and one on the left side of the lens. Using either zoom control was easy.

It has built-in Wi-Fi connectivity along with near field communication, or NFC, and GPS for geotagging pictures.

There is a Wi-Fi button on the back. Press it and the camera starts broadcasting its own wireless network. Connect your phone to it, and you have lots of choices. There is a free app for iOS and Android devices that allows the camera to wirelessly offload its photos to a smartphone or tablet. The app also lets you see the camera’s viewfinder, adjust the zoom and snap photos.

If you have an Android phone with NFC, you can tap the devices to create a connection.

The camera has the usual automatic and semiautomatic (aperture priority and shutter priority) shooting modes, along with full manual controls and plenty of scene modes. There are also digital effects (think Instragram filters) that can be applied. Its ISO range is 100 to 1,600, with program modes that extend the ISO range to 6,400. The camera’s motor can shoot at 7 frames per second.

The shutter range is 1/4000-second to 15 seconds.

There is no raw mode; photos are captured as JPEG only.

The P900 records 1080p HD video and has a dedicated video button on the rear. You can zoom during video recording, and the P900 also has built-in stereo microphones.

The P900 is no pocket camera. It’s similar in size and weight to my Canon DSLR camera with its lens.

It weighs 31.8 ounces with memory card and battery installed. The battery is charged inside the camera via micro USB port, and it’s good for 360 shots, or one hour and 20 minutes of video per charge.

Recharging the battery takes three hours and 40 minutes.

So far, the P900 sounds like all the camera you’ll ever need, right? Very likely yes, with some caveats.

I took the P900 to a family reunion last weekend, and in a dark hall, the P900’s flash made some nice photos.

This would be a great camera for sports during the day, but it even takes nice photos of the moon.

If you want a camera you can slip into your shirt pocket, there are better choices. But it’s hard not to wonder whether the P900 might be the last camera you’ll ever need to buy.

That’s an interesting concept. n

THE country’s fastest-growing tech giant Cherry Mobile recently shared the spotlight, as it launched a new device at the 2015 Computex event, held recently in Taipei. Already on its 35th year, it is the largest information and communications technology trade show in Asia, and is considered the second largest in the world.

Aligning with global tech giant Microsoft, Cherry Mobile (cherrymobile.com.ph) cherrymobile.com.ph cherrymobile.com.ph) introduced its newest addition to its expanding lineup of devices— the Alpha Prime.

A key addition to its Alpha series, following the release of its initial six Windows devices in September 2014 and February 2015, the Alpha Prime is a testament to Cherry Mobile’s strengthened partnership with Microsoft. Soon to be one of the newest Windows phones running on Windows 10, Alpha Prime will be the first LTE-capable device from Cherry Mobile and will be priced less than $100.

Being able to introduce new

devices that fit the needs and demands of its consumers has been the company’s catalyst in its growing market share.

“Our ability to regularly produce new devices is Cherry Mobile’s response to what our market has been asking for.

We recognize that with our consumers’ fast-paced lifestyle also comes ever-changing needs and demands from their devices.

Because of this, our gadget lineup is always a work-in-progress, and we have aligned ourselves with global tech brands, such as Microsoft, to make everything possible and to constantly introduce new products,” said Lonson Alejandrino, product manager for Cherry Mobile.

The introduction of its newest device on the global stage also supports Cherry Mobile’s thrust as a leader in the local industry. Not new to international trade events, Cherry Mobile also launched two devices at the Mobile World Congress in Barcelona earlier in the year.

“We are very fortunate to

have been able to showcase our newest devices alongside global tech brands. Being recognized at global trade gatherings is not only an achievement for Cherry Mobile, but also for the whole local tech industry. This means that we are able to be on a par with global standards. This is something Cherry Mobile is very proud of, especially being able to achieve this milestone in only six years,” Alejandrino said.

LIFE

D1

n Pros: Great lens, articulating rear screen, Wi-Fi n Cons: Expensive, no raw mode n Bottom Line: This camera is all most of us will ever need.

BusinessMirror

E1 | Wednesday, July 15, 2015 Editor: Tet Andolong

VIABLE OPTION PREMIER LIVING AFOR INVESTORS WITH TERRAZZA F DE STO.TOMAS

I

B M S

Introducing ‘premier living’

With more pressing concerns plaguing residents of Metro Manila—traffic, flooding, congestion, etc.—developers are now eyeing alternative areas to offer home seekers on the hunt for exclusivity and privacy but still at the center of things.

An area that property builders are now looking into is Southern Luzon, now considered as one of the promising key locations for new construction efforts.

“Southern Luzon is proving to

be a very lucrative market for real estate. In fact, it is seen to be among the top 3 growth areas to watch out for in the country,” said Fatima Olivares-Vital, business unit head of Ovialand Inc. Batangas is a province in the south that is gaining recognition for its in-demand pieces of prime land. It is now home to five major industrial parks, including First Philippine Industrial Park in Santo Tomas, Batangas.

ORECLOSED properties remain an attractive option for home buyers, either as an end user or investor, because of the great deals and below-market prices they offer. To benefit from the purchase of these previously owned properties, however, buyers must know what to look and watch out for.

“The selling price of foreclosed properties are often below market value,” said Jay Castillo, licensed real-estate broker and founder of foreclosurephilippines.com. Buying foreclosed properties can save about 20 percent to 40 percent off the cost of buying a house through traditional means.

It is important, however, that buyers know what to expect before they venture into foreclosure sales. “Foreclosed properties often need repairs, but these may actually provide a greater opportunity for investors to make money as the repairs can add value many times over the amount of the money spent,” Castillo said.

He illustrated in his web site how, based on conservative estimates, one can get a return of more than two times, or 200 percent, of the money invested for repairs.

Aside from the need for renovation work, there are the usual delays in transferring the property title to the name of the

modate 200 people; swimming pool; fully landscaped pocket gardens; 24/7 gated security; and full perimeter fence.

A company with over 28 years of experience in housing development, MCDC also gives importance to space by planning to build only 330 units in the 5.8-hectare development, approximately 53 units per hectare, with 54 percent of the land dedicated to open spaces.

With its concept of garden living, Terrazza de Sto. Tomas units are all connected to over a dozen pocket landscapes in the community.

To secure the sturdiness of each model unit, it features the Sterling Plaswall building system, an innovative system designed to produce high-quality load-bearing walls for residential and commercial projects, which utilizes 100-percent recycled plastic injection moulded inserts bonded between two layers of fibercement boards to produce a straight to finish wall.

It offers three unit types: Amore (single-detached) with 99 square meters of floor area; Dolce (duplex), 75 sq m; and Bacci (quad); 65 to 86 sq m per unit. Starting price for a unit can be as low as P1.6 million.

Terrazza de Sto. Tomas is about 40-percent done with land development, with model units planned to be built starting September 2015 and is set to be completed in 2017.

With this project, Ovialand is committed to show its sincere objective of building “ideal homes” that give its clients the best value for their money.

“Life does not have to be spent in tight expensive places. For the same amount one spends in a studio-type condominium, we can offer threebedroom, two-bathroom, two-story house and lot,” Vital concluded.

Just roughly 60 kilometers from Makati City lies the town of Santo Tomas, Batangas. Only five minutes from Star Tollway Santo Tomas exit, the city shows promise with its industry and commerce. It is also close to entertainment, with Nuvali just 15 minutes away and Tagaytay just a 30-minute drive.

According to Vital, “We’re calling Santo Tomas the gateway to Southern Metro.” “The Terrazza de Sto. Tomas is the company’s newest P500-million venture in this firstclass municipality,” said Vital during a media briefing held recently at a hotel in Makati City.

“WHEN we talk about ‘premier living’ we’re talking about exclusivity and privacy. We’re talking about total lifestyle, of better amenities and an alternative way of living life,” Vital stressed.

Among the amenities that the property boast of are mini football field and basketball half court; multipurpose clubhouse that can accom-

new owner. The process of buying the foreclosed property and getting the title released looks simple on paper, but may take time due to complications with documents and other government requirements.

“Transferring the title in your name looks easy, but, in reality, these tasks are very tedious and time consuming. If you are investing in real estate, you will have to do these sooner or later, unless you outsource it,” Castillo said. Among the government institutions buyers would need to work with are the regional trial court, the Registry of Deeds, the local government units and the Bureau of Internal Revenue.

Overall, Castillo says that investing in foreclosures makes sense if done right. “Once proper research and analysis is done, there are a lot of opportunities out there,” he added. A quick analysis of available properties would include determining a buyer’s area of focus, for instance, then determining one’s budget. Buyers must also check descriptions of available properties well, and check details such as floor area to see if these fit their preferences.

“Once the needed repair works are completed, a foreclosed property’s market value increases, which translates to greater equity,” Castillo said.

International retailers hot on expansion

A

SIAN market fares well in the list of top target cities for retail expansion. In a recent study released by CBRE, “How Global is the Business of Retail?” an examination of 50 countries and 164 cities from across the world showed that international retail brands looking to enter new markets increased by 14 percent in 2014, with six Asian countries on the list.

Top target cities include Tokyo with 63 new entrants, Singapore with 58, Abu Dhabi with 55, Taipei with 49, Dubai and Hong Kong with 45, Moscow with 41, Paris with 40, Beijing with 34, Doha with 30, Berlin with 29, Toronto with 25, Manila with 24, and Stuttgart and Istanbul with 21.

Retailers from the Americas and Asia Pacific are the main regions eyeing the Asia-Pacific market.

The study also noted that the inclusion of new entrants in the list—Doha, Toronto, Manila, Stuttgart and Istanbul—suggests that retailers are looking into new markets for retail expansion and investment.

On one hand, midrange fashion retailers are the most active globally, focusing on the EMEA. On the other, luxury and

business fashion retailers target the Americas and Asia Pacific.

“The Asia-Pacific retail market is gaining more ground as a top spot for expansion of international brands. In the Philippines alone, the demand and interest from the local retail market and the affordable rates drive more investors into the country. When this trend continues, Asia Pacific can even compete with the bigger EMEA and American markets,” shared Rick Santos, chairman, founder and CEO of CBRE Philippines.

The study identified globalization, technology, and demographic change as core elements affecting the business of retail. The recognition of international brands in different countries, the use of technology in assessing a market, and the growing consumer appetite and spending power of the retail markets across the globe continue to fuel the interest of retailers in expanding. Similarly, as long as consumers continue to flock the malls and shopping centers for leisure, the expansion of more brands will, likewise, continue to increase.

PROPERTY

E1

CLEARLY NO. 1

Sports BusinessMirror

C |

Palawan to spend ₧7B on infra, tourism push T B C N. P

PREMIER LIVING

N its effort to bring space and comfort to home buyers, Ovialand Inc., which is a subsidiary of Malate Construction and Development Corp. (MCDC), brings its newest flagship project south of the Metro.

HE provincial government of Palawan has earmarked at least P7 billion for various infrastructure and livelihood-development projects to achieve its twin aims of drawing more foreign investments and boosting the province’s standing as a prime tourist destination.

At a news conference launching the Palawan: World’s Best Island Tourism and Investment Expo, Palawan Gov. Jose Ch. Alvarez said much-needed infrastructure projects will be under way in the coming months to improve the tourism and investment climate in the province.

Infrastructure plays a key role, Alvarez said, in facilitating an incoming P11.2-billion investment of Fresh Del Monte DEBBIE TAN (from left), of the Palawan Tourism Council; Rep. Franz E. Alvarez of the First District of Palawan; Palawan Gov. Jose Ch. Produce Inc. S “P,” A Alvarez; and Enrico Basilio, of the Advancing Philippine Competitiveness Project, field questions from the media during the launch of

SPECIAL REPORT

W, J , 

mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

CLEARLY NO. 1 B H F The Associated Press

L

ONDON—It’s more obvious than ever that Novak Djokovic and Serena Williams have really distanced themselves from the rest of the elite in tennis. Not just because they were the ones who got to dress up and attend the Wimbledon champions’ dinner on Sunday night.

And not just because their leads at No. 1 in the rankings will remain large on Monday. Both Djokovic, who won his third trophy at the All England Club by beating Roger Federer, 7-6 (1), 6-7 (10), 6-4, 6-3, in the final, and Williams, who won her sixth, are demonstrating that they’re capable of taking home the title each and every time they enter a Grand Slam tournament. Barring an injury or some other unforeseeable event, each will go to the US Open in late August as a big favorite.

Williams, of course, heads to Flushing Meadows, seeking to complete a calendaryear Grand Slam, having added a championship on the grass of Wimbledon to those on the hard courts of the Australian Open in January and the red clay of the French Open in June.

Only three women and two men in the century-plus of major tennis tournaments have won all four majors in a single season; the last to do it was Steffi Graf in 1988. Djokovic came oh-so-close to joining her in pursuit of that rare feat.

He, too, won the Australian Open and Wimbledon, but in between, he made it to the final at the French Open before

NOVAK DJOKOVIC AND SERENA WILLIAMS ARE DEMONSTRATING THAT THEY’RE CAPABLE OF TAKING HOME THE TITLE EACH AND EVERY TIME THEY ENTER A GRAND SLAM TOURNAMENT.

losing in four sets to Stan Wawrinka, a setback that left the 28-year-old Serb “disappointed and heartbroken.”

“But if there is one thing that I learned in the sport,” Djokovic said, “[it] is to recover fast and to leave things behind me and move on.” He is up to nine major titles, one more than such greats of the game as Andre Agassi, Jimmy Connors and Ivan Lendl. And he’s more than halfway to Federer’s 17.

Over the past 20 Grand Slam tournaments, Djokovic has reached 15 finals, winning eight. Williams, meanwhile, has won eight of the past 13 majors to get her total to 21. “Staying injury-free now for him is crucial,” Federer said about Djokovic. “Clearly he’s going to be one of the top guys—where, we’ll still have to wait and see. I’m sure he still has many more great years ahead of him.”

Here are other things we learned at Wimbledon: n Federer still capable. So many have been so ready to write him off, over and over, but Federer showed in the past two weeks that he is still capable of terrific play, particularly on grass. He held serve in 89 of 90 games until the final, when Novak Djokovic earned four breaks. “I’m right there,” declared Federer, who turns 34 on August 8. “My game is good.” n Nadal in a rut. Is he done winning Grand Slam tournaments? Or will he rebound in New York? After losing to Novak Djokovic at the French Open—no shame in that, even for a nine-time champion at Roland Garros—Rafael Nadal exited in the second round at Wimbledon, losing there to a man ranked No. 100 or worse for the fourth year in a row. n Who can challenge Williams? Serena Williams has won 28 consecutive Grand Slam matches. She’s also 39-1 this season overall. Who stands a chance right now?

Against the other women ranked in the top 10 entering Wimbledon, Williams is 70-8 for her career, an .897 winning percentage. The player in that group with the most victories over Williams is Maria Sharapova, who is 2-18 against her. n Muguruza Emerged. Here’s someone who is not intimidated by Williams and appears to have a big-hitting style to hang with her: Garbine Muguruza, the 21-year-old from Spain who lost 6-4, 6-4 in the Wimbledon final.

It was Muguruza’s debut in a Grand Slam title match and she didn’t shrink.

“She came out there to win; she wasn’t out there just to play a final,” Williams said.

“That says a lot about her and her future.”

A

NOVAK DJOKOVIC (right) and Serena Williams dance onstage during the Wimbledon Champion dinner at the Guildhall in London on Sunday. AP

IVAN GARCIA (bottom) and Jonathan Ruvalcaba of Mexico compete in the men’s synchronized 10-meter platform diving event at the Pan Am Games on Monday in Toronto. AP

C TROVERSY CON SY, SY Y, CRITICISM HIT TENNIS DOOWN UNDER

USTRALIAN tennis once was full of good-news stories, and personalities to match.

Rod Laver, the only male player to twice win all four Grand Slam tournaments in the same calendar year—in 1962 and 1969—and leading women’s major winner Margaret Court were in that category. Other exemplary role models and multiple major winners include Evonne Goolagong Cawley, Ken Rosewall, John Newcombe and Pat Rafter.

T Two-time Grand Slam champion Lleyton Hewitt, a Davis Cup stalwart who had an often difficult time with his oncourt demeanor, has emerged recently as a more eloquent elder statesman during his injury-forced move toward retirement. Even during dry spells in Davis Cup play and in men’s majors over the past decade, players have mostly been respectful.

So where, seemingly, has it all gone wrong?

At Wimbledon, 20-year-old Nick KKyrgios battled with umpires time and again, was accusing of tanking and swore so loudly and abused his rackets so violently that he was fined nearly $10,000.

That behavior earned him the wrath of an Australian sports great, Olympic champion swimmer Dawn Fraser. The 77-year-old Fraser told a breakfast television show in Australia that she was disgusted by Kyrgios’s K behavior in his fourth-round loss to Richard Gasquet at Wimbledon.

“They should be setting a better example for the younger generation of this great country of ours,” Fraser said. “If they don’t like it, go back to where their fathers or their parents came from.”

KKyrgios, who was born in Canberra, the Australian capital, has a father born in Greece and a Malaysianborn mother.

After outrage on social media, Fraser apologized for her comments about KKyrgios’s family.

Laver told ESPN television that he thought Kyrgios’s K behavior was holding him back.

“Nick’s young and maybe doesn’t realize what he is doing sometimes,” Laver said. “He’s playing with emotion...that’s certainly something that he needs to grow out of and he needs to grow out of that sooner rather than later. There’s certainly no excuse for swearing.

That’s just bad behavior, that’s ugly.”

Just when that media skirmish was settling, 22-year-old Bernard Tomic renewed his ongoing messy tussle with Rafter, who now is Tennis T Australia’s performance director.

Tomic, after reading Rafter’s earlier comments critical of him, complained at a post-match news conference at Wimbledon about lack of support when he was injured, being made to pay for practice balls and courts and directly criticized other Tennis Australia officials, which drew him a suspension from this weekend’s home Davis Cup quarterfinal against Kazakhstan in Darwin.

And on the day that Novak Djokovic defeated Roger Federer for his third Wimbledon title, and with the Australian singles players long gone from southwest London, the feud kept simmering Down Under. Rafter, responding to Tomic’s comments, told Sunday’s News Limited newspapers that playing tennis for Australia

was “about opportunity, not entitlement.”

“It’s a principle I believe in and feel really passionate about,” Rafter added.

KKyrgios was quick to respond on TTwitter: witter: ““AAnother negative comment out of Rafters mouth. Does this guy ever stop?”

KKyrgios later deleted the tweet, but damage was done. On Monday, as if the sport in Australia needed another controversy, Tennis T Australia sent out a listing of upcoming matches for Australians overseas, and it noted that Tomic had a first-round match at the “Hall of Shame” tournament in Newport, Rhode Island. That was supposed to be the Hall of Fame tournament, and Ten T nis Australia quickly sent a correction and an apology.

As many tweets suggested, you couldn’t make this up. “This unfortunate error has been widely circulated on social media and there is some discussion as to how such a mistake could occur,” Tennis T Australia said. “We have a very upset staff member who made a simple clerical error.”

Tomic’s family said they were considering legal action because of Tennis T Australia’s “continual shaming and misrepresentation of Bernard.” Tomic lost in the first round in Newport on Monday in straight sets.

KKyrgios arrived in Darwin for the Davis Cup match against Kazakhstan and said Tomic should have been included, but Australian captain Wally Masur was in a more conciliatory mood.

“We’d like to think that cool heads will prevail,” Masur said, “and at some point everyone can sit down in a room and get to the bottom of all the issues.” AP

SPORTS

Palawan: World’s Best Island Tourism and Investment Expo in Makati City. NONIE REYES

The feared power shortage: Why it did not happen B L L

»C2

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

n n

C1

I

Conclusion

NDUSTRY data show that a number of power plants that avoided maintenance shutdowns during the summer months will have to undergo such activities from June onward.

“It also helped that power-plant

PESO EXCHANGE RATES n US 45.1510

owners heeded the call of the government, the Department of Energy [DOE], in particular, to move the maintenance work from summer to the months of June, July and August,” said Oscar Reyes, Manila Electric Co. (Meralco) president.

In June the following power plants implemented maintenance shutdowns: Pagbilao, 367.5 mega-

watts (MW), for 27 days up to June 28; Module 40 of Santa Rita power plant, 250 MW, from June 25 to 28; Module 50 of San Lorenzo power facility, 250 MW, on June 13 and 14; and Module 60 of the same power plant, 250 MW, on June 20 and 21.

Based on this, some 600 MW were shaved off from the Luzon grid on certain days. Still, there was suffi-

cient power reserve last month, at 905 MW. This month Pagbilao 2, 367.5 MW, is scheduled to go offline from July 4 to August 2; Module 10, 250 MW, of Santa Rita power plant, on July 11 and 12; Module 20, 250 MW, on July 18 and 19; and Module 30, 250 MW, on July 14 and 15.

C  A

IMF echoes calls for PHL to raise taxes on petroleum B C U. O

T

HE International Monetary Fund (IMF) expects oil prices to gradually increase to around $75 per barrel by 2020, which could buy net importers like the Philippines more time to save on fuel imports and adjust their petroleum taxes.

In its report, titled “Global Implications of Lower Oil Prices,” released on Tuesday, the IMF, however, said there is “a lot of volatility” surrounding this forecast.

“The oil-price outlook is highly uncertain; but a substantial part of the oil-price decline is expected to persist into the medium term. Futures markets imply an increase in Brent oil prices to some $75 a barrel in 2020, but recent experience—including the Brent price rally to about $65 a barrel in April—suggests there may be considerable volatility around this upward trend,” the IMF said.

To minimize the impact of this volatility, the IMF advised net oil importers to spend their savings on long-term projects.

It also urged both oil exporters and net oil importers to explore fuel and taxation reforms during the period. This is the same call made by the country’s planning agency, the National Economic and Development Authority (Neda), which was supported by multilateral development banks, such as the Asian Development Bank and the World Bank.

Neda Director General and Economic Planning Secretary Arsenio M. Balisacan said increasing excise taxes on petroleum will augment the shortfall in customs revenues brought about by lower pump prices.

This view was also aired by Finance Undersecretary Gil S. Beltran.

C  A

n JAPAN 0.3659 n UK 69.9434 n HK 5.8246 n CHINA 7.2726 n SINGAPORE 33.2800 n AUSTRALIA 33.4353 n EU 49.7203 n SAUDI ARABIA 12.0400 Source: BSP (14 July 2015)

BMReports BusinessMirror

A2 Wednesday, July 15, 2015

news@businessmirror.com.ph

The feared power shortage: Why it did not happen Continued from A1

Based on Meralco data, power demand in Luzon could hit 8,680 MW in July as against a supply of 9,719 MW, leaving 1,039 MW of reserves.

For August, demand is seen to reach 8,647 MW, while supply would reach 9,191 MW. With only 550 MW of reserves anticipated, a yellow alert would probably be raised by the National Grid Corp. of the Philippines.

In the months ahead, the following power facilities are scheduled to go offline to give way to maintenance work.

These are the Unit-1 of the 1,200-MW Sual coal-fired power plant in Pangasinan (August 8 to September 6) and the Unit 2 of Sual (September 7 to November 5). Each unit has a capacity of 600 MW. The Pagbilao power station is a 735MW coal-fired thermal power plant in Pagbilao, Quezon, and is operated by Team Energy Corp.

The 600-MW Ilijan Unit1 is also scheduled for maintenance shutdown up to August 5. The 1,200-MW Ilijancombined cycle natural gas is one of the country’s largest energy producers, accounting for about 15 percent of Luzon power-grid requirement. Santa Rita Module 20’s (250 MW) shutdown is from August 8 to September 6.

Module 60 of the San Lorenzo power plant will go offline from August 15 to 19 and from October 3 to 7. Its capacity is also 250 MW. San Lorenzo’s Module 50, another 250 MW, will shut down from October 10 to 14.

Last in the list is the 600-MW thermal coal-fired Calaca power plant in Batangas. The first unit, with a capacity of 300 MW, will undergo maintenance from August 22 to October 5. Calaca Unit 2, another 300 MW, is scheduled for main-

tenance shutdown from November 16 to December 15.

“These are the maintenance schedule of the power plants that we have contracts with. We hope that there will be no unscheduled shutdown of power plants coinciding with the list of scheduled maintenance,” Meralco Utility Economics Head Lawrence Fernandez said.

Energy Secretary Carlos Jericho L. Petilla said the Department of Energy (DOE) strongly urged power producers to hold off the maintenance shutdown of their power plants that were originally scheduled from March to May. “And they listened to us, unlike when it was the NGCP that used to tell them that. We may have a problem of yet another possible tight supply from July onward, but the cool climate in these months will play an important factor in easing demand.”

The country’s largest utility firm assured that it is prepared to deal with yet another possible tight supply in Luzon.

“We have to meet whatever the consumer needs. It’s demand management and in the supply side, we have to add more capacity. We have the ILP [Interruptible Load Program] on standby in case we are called to activate it,”Reyes said.

“Our view is that, absent any forced outages, particularly overlapping forced outages, we should have enough capacity and reserve in the system to accommodate what we won’t have due to these scheduled shutdowns,” he added.

Power crisis no more

Moving forward, it is anticipated that Luzon will have enough supply, which could mean that it is unlikely for a power crisis to occur in the years to come.

“Onward, as demand is continuously growing, it calls for additional capacity

A man inspects solar panels at San Carlos Solar Energy Inc.’s utility-scale solar plant in San Carlos Ecozone, San Carlos City, Negros Occidental. Solar companies are lobbying for a fourfold increase in incentives for suppliers of renewable energy and to speed up project approvals, as the country grapples with precarious electricity supply. NONIE REYES so as to put the Luzon grid at lower risk of power shortage. On the other hand, there are now proven measures taken that would avert any such event happening,” said Lourdes Alzona Alzona, officer in charge of PSALM. In a report, the DOE said the following power projects are set to be commissioned this year: the 150-MW SLPGC coal plant Unit 1; Anda Power Corp.’s 82-MW coal-fired power plant; the 150-MW SLPGC coal plant Unit2; the 67.5-MW Pilila wind farm; the 150MW SLTEC Putting Bato coal-fired plant Unit 2; the 87-MW Burgos wind; the 81MW Caparispisan; 12-MW SJCI Biomass Unit 2; the 18-MW IBEC Biomass; the 10.8-MW Green Biomass; the 13.2-MW Sabangan hydro; and the 100-MW Avion.

Moreover, PSALM is implementing projects that are geared toward increasing and stabilizing power supply, which includes the overhauling of Malaya Thermal Power Plant (MTTP)-Unit 1.

The STX Marine of Korea recently completed the rehabilitation of Malaya Unit 1.

Now that Malaya1 has been rehabilitated, the entire power facility can

run at its full capacity of 650 MW. “There will be an additional 300 MW to be used as reserved. Malaya, being a must-run plant, operates at time of plant outages, Malampaya in particular,” Alzona said.

The DOE earlier designated the MTPP as a must-run unit to address any instability or supply deficiency that may occur as a result of sudden unavailability of any of the operating power plants in the grid.

“The CBK [727-MW Caliraya-Botocan-Kalayaan], Casecnan and Malaya are the only plants remaining in Luzon.

The Kalayaan [unit] of the CBK plant complex acts both as regulating and contingency reserves. The CBK will continuously provide the ancillary requirement in the Luzon grid. Malaya, meanwhile, will be continuously operated as a must-run plant. These are all in support of power supply security initiatives of the DOE,” Alzona said.

When Petilla was still in office, he identified a long-term solution to avert a power crisis. He labeled this as the Demand Aggregation and Supply Auctioning Policy (Dasap).

Under Dasap, all distribution

units (Dus) and electric cooperatives (Ecs) will present their demand and existing contracts.

In a nutshell, the agency’s draft memorandum circular was envisioned to be the platform for a yearly venue to auction the electricity demands—future and current—of all DUs and ECs. In this way, it can easily be predicted if supply is enough or lacking.

More importantly, consumers will be assured of a secured and reliable supply of electric power.

Petilla said the draft circular, if implemented, is going to be a landmark policy under his term. “We should not wait for their contacts to end before DUs and Ecs contract another power supplier. We need to secure their requirements today and not when their contracts expire,” Petilla said. “With aggregate demand, this will not only assure consumers of lower prices but also assures them that the power plants are always there when they are needed.” The draft policy was later enhanced to what is now called as Competitive Selection Process (CSP). The DOE was able to issue a circular on this before Petilla stepped down.

DOE Circular 2015-06-0008 mandates all DUs and ECs to undergo CSP in securing their power-supply agreements (PSAs). They would have to bid out their power requirements from a pool of interested power firms, thereby, eliminating bilateral negotiation, which, industry observers say, is “not a transparent way to do it because it involves pass-through cost.”

The CSP will be conducted by a third party. The circular applies to future contracts. It does not apply to existing PSAs that have been approved or have been filed for approval before the Energy Regulatory Commission (ERC).

Petilla said he expects some industry players to oppose the implementation of the circular. It may, he said, even be brought all the way to the courts.

“Why will you object if you have nothing to hide? The objective of the CSP is transparency and reasonable rates for consumers. This is a passthrough cost, which means consumers will pay for it. So, the more it is important for a bidding to take place rather than negotiate,” he said.

“We can be challenged. This is policy direction. Now, if they will question this they have to tell the public why transparency is not good for the public. This is a sure way to prevent any repeat of a possible power crisis and, more important, shield the consumers from any unnecessary charges. If you have nothing to hide then why oppose this? Prove that the CSP is not going to benefit the public,” the former energy chief dared.

The guidelines for the CSP have yet to be crafted by the ERC. Expectations are high that the implementing rules and regulations will be issued within the year, eventually paving the way for this landmark policy of Petilla to finally come true.

Economy

A4 Wednesday, July 15, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

news@businessmirror.com.ph

Legislator seeks thorough investigation of Lacson exposé on Roxas’s pork fund

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By Marvyn N. Benaning | Correspondent

arty-list Rep. Neri J. Colmenares of Bayan Muna has called for a thorough scrutiny on the resurrection of the illegal pork barrel in the 2015 budget that President Aquino and the Liberal Party (LP) allegedly rammed through Congress.

The lawmaker’s plea came after former Sen. Panfilo Lacson exposed the rebirth of the Priority Development Assistance Fund by way of P424 billion in discretionary funds embedded in the appropriations for 11 agencies out of the government’s 21 departments.

Colmenares explained that the Makabayan Bloc tried to stop the passage of the 2015 budget in the LP-dominated House of Reprsentatives but the majority passed it the way Sen. Francis Escudero and other Aquino allies allowed the bloated P2.6-trillion budget to be approved.

The legislator added it is Lacson’s duty as a citizen and former Cabinet member in charge of the rebuilding of houses washed away by Supertyphoon Yolanda in Tacloban and other areas of Eastern Visayas to expose the financial shenanigans of the administration.

Lacson quit his job after Interior Secretary Manuel Roxas II took over the task of crafting the overall development plan for Tacloban just as Vice President Jejomar C. Binay sent a one-sentence resignation letter to President Aquino after Roxas was given the chore of uprooting squatter residents from danger zones in Metro Manila and bundling them off to relocation sites outside the region.

In both instances, Colmenares said, Mr. Aquino gave Roxas more than he could chew, with the people of Tacloban condemning his topsy-turvy resettlement plan and housing cooperatives slamming the slow pace of approvals of housing proposals submitted by urban poor communities.

Of the 88 proposals submitted, only 23 had been approved by the Socialized Housing Finance Corp.

Lacson also scored Malacañang

for making Roxas not only the housing czar but also the water czar, the dispenser of police patrol cars and the distributor of countless projects earmarked for the counterinsurgency campaign worth P3.1 billion and doled out

by Secretary Teresita Deles of the Office of the Presidential Adviser on the Peace Process, who is a close Roxas political ally.

For squatters, Colmenares said, Roxas had full control of the P1.244billion fund for the quick construction of medium-rise residential buildings worth P700 million and houses for 26,367 squatters at a cost of P454.6 million.

The lawmaker stressed that Roxas had been given so many tasks, save for planning and executing Oplan Exodus in Mamasapano, Maguindanao, on January 25, 2015, in order to boost his political stock.

This, he argued, is meant to prop up Roxas even as he failed to improve the mass-rail system, with the Metro Railway Transit 3 losing 57 coaches under his watch.

Colmenares pooh-poohed the justifications of Palace Spokesman Edwin Lacierda about the legality and propriety of Roxas’s controlling a big chunk of the budget for housing, potable-water systems and even rural roads.

Colmenares said, “The pork-barrel issue should also be one of the top election issues and those running for president, vice president,

senator and congressman must state their stand now whether they are for or against the abolition of the pork barrel, whether it be presidential or congressional pork.”

“Mabuti at napag-uusapan na uli ngayon ang issue ng pork barrel lalo pa at malapit na naming isalang ang national budget sa Kongreso.

Mabuti at nakita at inilantad ni Sen. Ping ang mga lump sum o pork items sa mga departamento o mga ahensya. Ito ay labas pa sa Special Purpose Fund, Malampaya Funds, President Social Fund at Motor Vehicles User’s Charge. Kaya malinaw na malinaw na mayroon pa at buhay na buhay ang pork-barrel system sa administrasyong Aquino sa kabila ng pagdedeklara ng Korte Suprema na unconstitutional ito,” he argued.

Colmenares said that, as it is, pork barrel is defined as any lump sum under the discretion of an individual; and with the budget that passed the House of Representatives, pork barrel is strewn all over the 2015 budget and even outside the budget.

“That is why it is not true that there is no pork in the 2015 budget. Mahirap itong itago dahil napakalaki nito at dapat ay hindi na nagpapalusot si Secretary Abad,” Colmenares said.

“We are calling on the people to mount protests against the porkbarrel system and sign the ongoing people’s initiative against the pork barrel. We also demand an

immediate audit of all Disbursement Acceleration Program pork,” he said.

No basis

Malacañang saw no basis for fears aired by Lacson over some P4bilion discretionary lump sum appropriations in the Palace-endorsed 2015 national budget that Lacson warned would be “prone to misuse and corruption.”

Presidential Communications Secretary Herminio B. Coloma Jr., at a Palace briefing yesterday, allayed Lacson’s fears saying President Aquino had instituted adequate safeguards to ensure that public funds are properly spent.

“Isa sa mga mahalagang reporma na ipinatupad ni Pangulong Aquino ang tapat at tamang paggamit ng pondo ng bayan,” Coloma told palace reporters, adding: “Ito ay nakabatay sa napapanahong pag pasa ng Pambansang Budget na naipatupad taun-taon simula noong 2011.”

Coloma noted that the multibillion-peso allocations and their subsequent disbursement by the different departments and agencies to which the funds were alloted are to be closely monitored by the Budget Department and the Commission on Audit.

“Ang paggamit ng budget ng lahat ng ahensiya ay maaari ding matunghayan sa web site ng Department of Budget and Management,” the Secretary said. With Butch Fernandez

PCGG faces another hurdle in Payanig property auction

By Joel R. San Juan

T

HE Presidential Commission on Good Government (PCGG) is facing another legal obstacle in its effort to auction off the sequestered 18.4-hectare property known as the Payanig sa Pasig.

This was after a notice of lis pendens (pending suit) was recently filed

by BLEMP Commercial of the Philippines Inc. with the Registry of Deeds in Pasig City in an apparent effort to block any attempt by the PCGG to sell the property.

BLEMP is claiming full ownership of the property by virtue of two original titles in its possession.

Lis pendens—which literally means a pending suit—refers to the jurisdiction, power, or control which a court acquires over a property involved in a suit, pending the continuance of the action, until final judgment.

“Effectively, it serves as an official and public notice that a particular real property is in litigation, and serves as a warning that anyone who acquires interest over the litigated property does so at his own risk,” BLEMP legal counsel Dennis Manalo said.

“More important, it binds would-

be purchasers of the litigated property to the judgment or decree of the court, whether they are legitimate buyers or not,” he added.

It can be recalled that in 2011, the Supreme Court (SC) declared null and void the auction sale of the controversial 18.4891-hectare Payanig property conducted by the Pasig City government in 2005, due to nonpayment of real-property taxes.

The SC also nullified the P389.02million real-property tax assessment and the warrants of levy on the said properties issued by the Pasig City government.

However, it partially granted the petition filed by the Pasig City government as it allowed the latter to issue to the PCGG new realproperty tax assessments covering only the portions of the properties actually leased to various taxable individuals and entities, and only for the period of such leases.

Sometime in 1986, Jose Campos, a known crony of then-President Ferdinand E. Marcos and the controlling owner of Mid-Pasig Land Development Corp. and Independent Realty Corp., voluntarily surrendered the said corporations and their assets to the PCGG, including the Payanig property, for being part of the illgotten wealth of the Marcos family.

Lingerie sale

A lady stall owner selling lingerie patiently waits for customers, who may be interested in her products, outside a mall in Divisoria district. All items on display are sold at a reasonable price that ranges between P50 and P100. Nonie Reyes

In return, Campos and his associates were granted immunity from suit. The PCGG’s right to bid out the property is based on the agency’s claim that it holds a reconstituted title obtained after the Edsa revolution, through an assignment by Campos.

But BLEMP argued that under the law, a reconstituted title is rendered

void if the original title still exists, and BLEMP has stated that they are in possession of these titles.

The company has even gone as far as issuing an open challenge to any document verification experts to prove that these titles are not original, which no one has taken so far.

“My advise to all the bidders is for them to consult and carefully deliber-

ate with their lawyers, because they are literally taking a multibillion peso gamble and leaving it up to the courts,” Manalo added.

“This case is now entirely dependent on the legal merits of each claimant, and no matter how you spin it, nothing will ever beat the original, physical titles that we have in our possession,” the lawyer stressed.

EU envoy lauds CSP policy for power co-ops and distributors

By Lenie Lectura

T

he European Union (EU) on Tuesday expressed approval on a recently issued policy of the Department of Energy (DOE) that seeks to bid out the power requirements of distribution utilities (DUs) and electric cooperatives (ECs).

“The recently adopted measure to require distribution utilities to secure supply agreements using competitive processes is much welcome and will contribute to increase competitiveness in the sector,” EU Ambassador Guy Ledoux said in his opening speech during the Third EUPhilippines meeting on energy.

Before he resigned, former DOE Secretary Carlos Jericho L. Petilla issued DOE Circular 2015-06-0008, requiring all DUs and ECs to secure their power requirements via a Competitive Selection Process (CSP) instead of entering into negotiated contracts with power producers.

The policy has yet to be implemented, pending the issuance of the implementing rules and regulations by the Energy Regulatory Commission (ERC).

When asked on his personal insight, Ledoux said the CSP, if and when implemented, will level the playing field for all industry players.

“Currently, the competitive segment in energy supply in the Philippines is not very large. With this decree, this obliges the distributor to secure any new supply through competitive process to get the lowest price and consumers will benefit from that. It’s a major measure that has been applauded,” Ledoux said when querry of his personal view on the new policy during a media briefing.

Ledoux noted that one of the challenges faced by the country is to ensure the provision of reliable and affordable energy. It was earlier projected that generation capacity must double between 2015 to 2025 to support the country’s growing economy.

The Philippines currently utilizes 26 percent of renewable energy (RE) in its power-generation mix. The EU wants to increase the share to at least 27 percent by 2030.

The European private sector is already strongly involved in the Philippine energy sector, said Ledoux.

“We have a lot to learn from each other. The EU and the Philippines have been cooperating on energy for many years. Through our partnership agreement we committed to stronger engagement in energy and climate change,” he said.

DOE Officer in Charge Zenaida Monsada said her office welcomes the continuing interest and support of the EU in the energy sector, particularly in electrification, RE and energy efficiency. “The DOE looks forward to a more fruitful collaboration and cooperation with the EU in the coming years.”

A high level of cooperation between the EU and the Philippines can be illustrated with various initiatives, like the EU-sponsored SWITCH project, which has developed action plans for each energyconsuming sectors.

IMF echoes calls for PHL to raise taxes on petroleum. . .

World Bank Philippines econo-

mist Rogier van den Brink also said lowering income and corporate taxes could help broaden the tax base, as well as revising the real-property tax to aid in the government’s revenuecollection efforts.

Increasing excise taxes are necessary, since former Budget Secretary Benjamin Diokno said the “biggest loser” in the decline in oil prices will be the government, because taxes on oil and oil products will also decline.

The Bureau of Internal Revenue (BIR) collects excise taxes from oil importers. An excise tax is a tax on the

production, sale or consumption of a commodity in a country.

The highest excise tax on petroleum products that is collected by the government is for lead premium gasoline at P5.35 per liter. Unleaded premium gasoline, on the other hand, is slapped with a P4.35-per-liter excise tax.

Further, the IMF explained that investing now on these oil and tax reforms are necessary considering that the 50-percent drop in oil prices in 2014 should have resulted in a 0.5-percentage-point increase in global growth this year.

The IMF said this increase may

not be realized due to the global uncertainties surrounding the rebalancing in China and financial troubles of the euro zone. These reasons were highlighted by the IMF in the recently released World Economic Outlook Update.

This is the reason, the IMF said, why it revised downward its 2015 and 2016 growth forecasts for the world and even for net oil importers like the Philippines despite the drop in oil prices.

The IMF cut economic growth projections for emerging economies to 4.7 percent in 2015, lower than the

April estimate of 4.8 percent.

The IMF also cut its growth forecast for the Asean to 4.7 percent this year and 5.1 percent next year, from the April estimates of 5.2 percent in 2015 and 5.3 percent in 2016.

“After accounting for the limited pass-through to retail prices, the fall in oil prices should boost global growth by about half a percentage point in 2015 to 2016, but other shocks are expected to offset this positive effect.

Headwinds include slowing growth in emerging markets and developing countries; these are partly related to structural bottlenecks, reassessment

of potential growth, and geopolitical risks,” IMF said.

Oil fell for a third day, as Iran and wo rld powers neared a nuclear agreement that would allow the Islamic Republic to increase crude exports in an oversupplied market.

Futures slid as much as 1.5 percent in New York. Diplomats are preparing to present the final text of an expected deal with Iran after 18 days of talks.

Saudi Arabia told the Organization of Petroleum Exporting Countries it raised output to a record in June as the producer group forecast stronger demand for its members’ crude in 2016.

continued from a1

Oil’s rebound from a six-year low in March has faltered amid economic uncertainty in China and Greece and speculation a global glut will persist as Iran seeks to regain market share.

Prices may fall further as the world remains “massively oversupplied,” according to the International Energy Agency.

“More oil from Iran is not a good sign, given the market is already flush with supply,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone.

“The risk for prices is to the downside, primarily because of that supply situation.” With Bloomberg News

Economy BusinessMirror

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briefs miaa’s honrado goes on leave Manila International Airport Authority (Miaa) General Manager Jose Angel A. Honrado has gone on leave on June 29 following a heart attack two weeks ago.

Honrado, 65, underwent triple heart bypass operations last year.

Miaa Media Affairs Division (MAD) issued a statement to say that Honrado has not relinquished his position at the airport.

The Department of Transportation and Communications issued a special order on July 3, designating Senior Assistant General Manager Vicente Guerzon Jr. as the Miaa officer in charge (OIC).

Guerzon will cease to be OIC upon the return of Honrado, according to MAD. Guerzon, a former Philippine Air Force officer, used to head the Villamor Air Base Golf Club before joining the M iaa five years ago.

Recto Mercene

sc taps 3 amici in next week’s oral arguments on torre de manila case THE Supreme Court (SC) announced on Tuesday that it has tapped three amici curiae, or friends of the Court, for the scheduled oral arguments next week on the case involving the construction of the 46-story Torre de Manila condominium that ruins the iconic sight line of the monument of national hero Jose Rizal in Luneta Park.

In an advisory issued, the High Court designated as amici curiae Architect Emmanuel Cuntapay of the Department of Public Works and Highways (DPWH), an expert on the National Building Code as designated by the DPWH, and a representative from the Housing and Land Use Regulatory Board.

Also, the SC, for the first time, has allowed “noninterested parties” in the case to submit their positions by way of briefs.

SC Spokesman Theodore Te said the Court defined noninterested parties as “professional associations, non-governmental organizations, interest group,” which are not to be hereby considered as neutral amici curiae from or representing the fields of real estate, tourism, construction, architecture, engineering and heritage conservation. Joel R. San Juan

aquino designates new police chief

President Aquino has designated Director Ricardo Marquez as the incoming chief of the Philippine National Police (PNP), succeeding Deputy Director General Leonardo Espina upon his retirement on Thursday.

The appointment of Marquez, a member of the Philippine Military Academy Class of 1982 and head of the PNP directorate for operations, was announced on Tuesday by Interior Secretary Manuel Roxas II at Camp Crame.

Rene Acosta

dole told: provide safety net for k to 12 ‘casualties’

A member of the House Committee on Higher and Technical Education on Tuesday urged the Department of Labor and Employment (DOLE) to come up with a plan for all nonteaching personnel who will be affected with the full implementation of the K to 12 Program next year.

Liberal Party Rep. Niel Tupas Jr. of Iloilo said the government should provide jobs for these 11,000 nonteaching staff.

“Give us more specific [plan on how the DOLE will help the 11,000 nonteaching staff,” Tupas told the labor department.

Earlier, Party-list Rep. Terry Ridon of Kabataan said that 25,000 teaching and nonteaching personnel are set to be displaced by the full implementation of the K to 12 Program next year. Jovee Marie N. dela Cruz

Wednesday, July 15, 2015 A5

Mindanao hydroelectric generators scrape critical bottom amid new energy crisis watch

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By Manuel T. Cayon | Mindanao Bureau Chief

AVAO CITY—The rain and typhoon alerts from three low-pressure areas coming in succession this month appeared to have done little to prevent all the hydroelectric sources in Mindanao from scraping the barest bottom for available water for power generation, sending all energy agencies to another round of critical energy watch.

The guitarman An aspiring musician browses an inventory of quality secondhand, branded electric, classical and acoustic guitars—being sold at a base price of P7,500—at a shop in Pasay City. Nonie Reyes

Meralco releases computation for July power bill

T

HE Manila Electric Co. (Meralco) released on Tuesday the final computation of power rates for July, following last week’s order from the regulators to lower distribution rates.

For this month, overall power bills will be reduced by only P0.2 per kilowatt-hour (kWh) for consumers with a monthly consumption of 200 kWh. A Meralco bill is mainly composed of generation, distribution, transmission and other charges.

Generation charge, the largest component of a Meralco bill, went up by P0.28 per kWh to P4.73 per kWh in July. But distribution rates declined by P0.25; transmission charge

by P0.05; taxes down by P0.02; while other charges increased by P 0.02 per kWh. Meralco was slightly delayed in sending out the bills for this month because it had to wait for the Energy Regulatory Commission’s (ERC) ruling on an application for lower distribution charge filed by Meralco last month.

With the issuance of the ERC order last

week, Meralco said it will reflect the lower distribution charge, by 11.26 percent, in the bills of customers starting this July.

Based on the ERC order, Meralco said reduction in the bills of residential customers with varying monthly consumption are as follows: 200 kWh—P4.50; 300 kWh—P19.14; 400 kWh—P41.83, and; 500 kWh —P88.89.

At P9.387 per kWh for a 200-kWh consumer, this month’s overall rate is P1.24 per kWh lower compared to rates in July last year.

Net impact may vary, though, for other customer categories. However, any reduction in distribution charge was offset by a higher generation charge.

The higher generation charge was mainly driven by higher prices at the Wholesale Electricity Spot Market (WESM) for the June supply month, which registered an increase of P5.05 per kWh. Numerous instances of forced outages by various power plants also triggered a number of yellow alerts, affecting three days for the June supply month, thereby putting

more upward pressure on WESM prices. Despite the elevated market prices, the secondary price cap was not triggered.

The Malampaya gas restrictions during said supply month also resulted in the use of more expensive alternative fuel by the First Gas plants. As a result, cost of power from plants under the independent power producers (IPPs) increased by P0.07 per kWh. Power supply agreements (PSAs), meanwhile, registered a reduction of P0.09 per kWh due to higher dispatch of the plants.

The share of PSAs, IPPs and WESM to Meralco’s total power requirements stood at 48.3 percent, 44.2 and 7.5 percent, respectively.

Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corp. of the Philippines. Of the total bill, only the distribution, supply and metering charges accrue to Meralco. Lenie Lectura

In succession this week, the National Power Corp. (Napocor) posted critical figures for the Agus 4 power plant, the Lake Lanao that is the source of water for the six Agus power plants, and the Pulangui 4 power plant in Maramag, Bukidnon.

The water level at Lake Lanao, the country’s second-largest lake and source of more than half of the power supply in the Mindanao grid, has gone steady since Monday at 699.31 meters above sea level (masl), barely touching the critical operating bottom of 699.15 masl. Further downstream to Baloi town in Lanao del Norte, where the lake’s water form the Maria Cristina Falls, and which has fed Agus 4, the water level was neither encouraging at 358.79 masl, barely above the critical level of 357 masl.

But the Pulangui 4, which takes water from Pulangui River in Bukidnon, was further down the critical level of 282 masl. On Monday the water level was already below at 281.81 masl, and on Tuesday it dipped further to 281.78 masl.

The Davao Light and Power Co. here already posted a warning on Tuesday, announcing that “after having a stable power supply for the last two months, it faces another tight power-supply situation within its franchise.”

“Early this [Tuesday] morning, the National Grid Corp. of the Philippines announced a 70-megawatt [MW] deficiency in the Mindanao Grid due to the reduced capability of Napocor-Power Sector Assets and Liabilities Management Corp.’s Pulangui hydroelectric power plant,” the power company said.

Rossano Luga, Davao Light’s corporate communications officer, said that “in order to mitigate the impact of the current power situation, Davao Light will tap the participating big customers through the activation of its Interruptible Load Program.”

“These companies will run their generators instead of drawing power from the distribution line, sparing around 4,000 smaller customers.

Furthermore, Davao Light will run its standby Bajada power plant and optimize on its supply agreement with the Hedcor Sibulan Inc. and the Therma Marine Inc.,” he said.

Davao Light also announced that it would implement “a maximum of 30-minute rotating power interruption, but only as a last resort.”

The rest of Mindanao was expected to sustain longer power cutbacks due to lack of backup energy sources in their localities. The Association of Mindanao Rural Electric Cooperatives has yet to issue a statement.

Escudero urges govt to plug loopholes in budget process

S

en. Francis G. Escudero on Tuesday said the national government should go beyond allocating funds and work harder to plug the loopholes in the budget process that prevent it from delivering basic services to the public in a timely manner.

Escudero, chairman of the Senate Committee on Finance, said the government needs to further streamline state agencies and offices whose functions are teeming with duplication in order to improve the budgeting process and public-service delivery.

“An audit and analysis of the process of planning and budgeting will reveal the overlapping of functions of some government agencies,” he said.

“The government needs to close the gaps and fix the bottlenecks.”

Some issues within government agencies, such as reporting of field data and jurisdictional conflicts among different offices under one department, however, impede the swift delivery of basic services, he said. “In the end, project implementation suffers and Filipinos don’t get the services they need and deserve.”

Malacañang is expected to submit to Congress its proposed P3.002-trillion national budget for 2016 on July 28, a day after President Aquino delivers his final State of the Nation Address.

According to Escudero, the Senate finance panel will scrutinize the proposed budget of the administration in order to determine its spending plan, assess the imple-

mentation of current projects and arrest underspending.

Escudero shared the observation of the International Monetary Fund (IMF) that the Philippines needs to improve its unusually complex budgeting system and address the weaknesses in the quality and integrity of the country’s fiscal data, partly reflecting multiple agencies having responsibilities for fiscal reporting.

“The key is to simplify the process of delivering basic services,” Escudero said. “The proper and appropriate implementation of plans and programs depends on proper and appropriate fiscal reporting, forecasting and budgeting.” “ The accurate reporting of public finances is a foundation of sound planning and project implementation. But, sometimes, we don’t get quality data because there are issues at the agency level,” Escudero explained.

As head of the Senate budget panel, Escudero had already implemented a number of streamlining activities, including a detailed listing of farm-to-market road projects under the Department of Agriculture to avoid overlapping with the Department of Public Works and Highways.

He also pushed for a uniform formula for the fair and equitable distribution of Emergency Shelter Assistance funds for typhoon-affected local government units to prevent uncoordinated and ineffective response initiatives. Recto Mercene

PCSO AMBULANCE DONATION Philippine Charity Sweepstakes Office (PCSO) officials led by Vice Chairman and General Manager lawyer Jose

Ferdinand M. Rojas II (third from left) with Directors lawyer Mabel Mamba and Betty Nantes, along with Quezon Gov. David C. Suarez (second from left) and Vice Gov. Samuel Nantes (left), inspect 24 brand-new ambulances from the PCSO Ambulance Donation Program given to 19 municipalities and five district hospitals in the province during the formal turnover held at the Kalilayan Hall, Capitol Compound in Lucena City, on Monday. JOSEPH MUEGO

SC to Comelec: Justify parallel biddings for PCOS, OMR

By Joel R. San Juan

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HE Supreme Cour t (SC) directed the Commission on Elections (Comelec) on Tuesday to comment on the two separate petitions seeking to prevent the election body from pursuing the conduct of parallel public biddings for the refurbishment of the existing Precinct Count Optical Scan (PCOS) machines and for the lease with option to purchase of new Optical Mark Reader (OMR) units.

SC Spokesman Thedore Te said

the magistrates ordered the Comelec to submit their separate comments within 10 days on the petitions filed

by Archbishop Rolando Tirona and the Center for People Empowerment in Governance (Cenpeg).

The Tirona petition sought to declare Comelec Resolution 15-0444 null and void.

The said resolution canceled the lease of Election Management System and Precinct-Based Direct Recording Electronic in the amount of P32 million and procurement of Voter Verification System in the amount of P727 million.

The resolution also realigned the Comelec’s unobligated balances from its 2014 maintenance and other operating expenses for Sangguniang Kabataan (SK) elections and SK registration for its capital-outlay requirement for 2016.

Tirona was joined by Archbishops Romulo de la Cruz, Oscar Cruz, Fernando Capalla, Ramon Arguelles; Bishops Filomeno Bactol, Juan de Dios Pueblos, Ramon Villena; Rev. Arthur Corpuz; former Sen. Francisco Tatad; former Manila Councilor Antonious Belgica; and lawyer Glenn Chiong as petitioners.

Opinion BusinessMirror

A6 Wednesday, July 15, 2015

editorial

Lessons from the Greek crisis

L

est we get lost in the drama of the current tug-of-war between Greece and its creditors, let us figure out how the whole tragic event came about in the first place, and what lessons can be learned from it, if any. The problem was long in the making, over 20 years beginning in the 1990s, but its discovery was only recently, beginning in 2010.

After joining the European Union in 1981, adopting the euro in 2001, Greece entered a period of unprecedented growth. Its gross domestic product (GDP) per capita rose from $12,400 in 2000 to $31,700 in 2008. Along the way, however, it developed huge budget deficits, reaching 12 percent of GDP in 2010, and acquired external debt that rose to 160 percent of GDP in 2010.

For many years after World War II, Greece was ruled by a succession of socialist-oriented governments, whose policies led to the expansion of the role of government, the increase in the size of the bureaucracy, the proliferation of state corporations, the enlargement of the pension system, the rise in wages, the shortening of work hours, etc., etc.

Under the circumstances, budget deficits and external debts were inevitable. Prime Minister Andreas Papandreou in 2010 formally requested an international bailout. The European Union (EU), the European Central Bank and the International Monetary Fund responded favorably. The Troika made available to Greece bailout funds to be given out in tranches, subject to conditionalities—austerity measures, including the cutting down of pensions, the reduction of wages, the privatization of budget-eating state corporations and the closing down of tax loopholes.

But the disease was too far gone. Remedial measures led to unemployment, which rose to 26 percent in 2014. The Greek people groaned under the intense austerity program. Today Greece is out of money, most of its banks are closed; those that are open can dispense at most €60 per person per day.

Prime Minister Alexis Tsipras has just been obliged by the creditors to accept, as a condition to the continuation of the bailout, the same terms that were rejected by his constituents in the referendum of last week. He had no choice. In the opinion of many observers, it was a humiliating bargain.

Greece can exit the euro zone. But can it escape its international obligations?

The ultimate results of this history-shattering debacle is still unfolding. No one seems bold enough to predict the final outcome.

Lessons to be learned: Socialist or capitalist, you cannot distribute anything that has not been produced. Produce first before you distribute. Do not take the producer for granted as you focus on the consumer.

The government is an enabler of production, the creator of facilitative environments. It is itself not a producer, the private sector is.

Beggars cannot be choosers. A debtor can appeal to the compassion of his creditor; but if the creditor does not have it, the debtor must accept his fate. Debtors must look themselves in the mirror. He who is without sin cast the first stone.

There is no substitute for hard work.

Since 2005

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Are you covered by SSS? Susie G. Bugante

All About Social Security

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f you are a worker in the private sector, whether as employee or self-employed and you are not yet over 60 years old, you are compulsorily covered under the Social Security System (SSS).

If you are employed in a private company, whether as a permanent, temporary or provisional worker, your company or employer is obliged to report you for coverage with the SSS within 30 days from the first day of your employment.

Employed workers include household helpers, who are defined as persons who render domestic or household services exclusively to a household employer who is not a relative, and whose salary is not less than P1,000. Under the Kasambahay law of 2014, the minimum wage for household helpers had gone up

to P2,500 in the National Capital Region, P2,000 for cities and firstclass municipalities, and P1,500 for other municipalities.

The social-security coverage of self-employed persons is also compulsory under the law. Selfemployed persons include a) selfemployed professionals; b) partners and single proprietors of businesses; c) actors, actresses, directors, scriptwriters and news correspondents, who do not fall within the definition of “employee” as provided in Section 8 (d) of the Social Security law; d) professional athletes, coach-

es, trainers and jockeys; and e) individual farmers and fishermen, as well as other informal sector workers, such as vendors, pedicab drivers, etc. The compulsory coverage of self-employed persons takes effect on their registration with the SSS. If you devote yourself to fulltime management of your household and family affairs and you are married to a member of the SSS, you may be covered on a voluntary basis. You may register as a nonworking spouse, provided you are not over 60 years old.

Similarly, Filipinos recruited by foreign-based employers for employment abroad may be covered by the SSS on a voluntary basis. This pertains to land-based overseas Filipino workers.

Filipino seafarers deployed to foreign vessels by manning agencies, on the other hand, are covered under the SSS, as provided for by Rule 8 of the Department of Labor and Employment Department Order (DO) 130 series of 2013. This provision of DO 130 requires that seafarers hired by foreign vessels through Philippine-

based manning agencies should be provided social-security benefits under the SSS law with the manning agencies serving as the employers.

If you work for a foreign government or international organization, or their wholly owned instrumentality operating in the Philippines or employing Filipinos outside the Philippines, you may be covered under the SSS for as long as there is an agreement between the foreign government or entity and the Philippine government that is in accordance with the provisions of the SSS law.

So, given all these pieces of information, are you covered by the SSS?

For more information about the SSS and its programs, call our 24-hour call center at (632) 920-6446 to 55, Monday to Friday, or send an e-mail to member_relations@sss.gov.ph.

Susie G. Bugante is the vice president for public affairs and special events of the Social Security System. Send comments about this column to susiebugante.bmirror@gmail.com.

Hong Kong, China’s real stock market, remains calm William Pesek

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BLOOMBERG VIEW

ot so long ago, Hong Kong was regularly dismissed as a financial backwater—not just internationally, but even within China. Many pundits started writing the city’s obituary when Jack Ma, CEO of China’s e-commerce giant Alibaba, rejected listing his company in Hong Kong, in favor of New York.

And as Shanghai’s stocks skyrocketed in recent months, it seemed to confirm Hong Kong’s obsolescence.

But the more instructive comparison between the markets in Hong Kong and mainland China has come more recently, as Chinese stocks have started to plunge. Government officials in Beijing have panicked, doing anything and everything to stop their stock markets’ slide; they’ve slashed interest rates, boosted margin lending, loosened collateral rules, scrapped IPOs, strong-armed big shareholders, pushed brokerages to buy, and took about 1,300 companies off the market.

Hong Kong officials, meanwhile, have calmly let market forces do their thing, as a selling tsunami slammed the Hang Seng Index. Hong Kong’s composed and hands-off leaders

have been showing Beijing how a mature and open economy is supposed to run.

That’s worth keeping in mind this week, as the world obsesses over the release of China’s latest gross domestic product (GDP) figures. Officials in Beijing are likely to report China grew 6.8 percent in the second quarter (although there’s reason to doubt the accuracy of whatever number is ultimately released). Investors will likely applaud the news, just as they did Monday’s announcement that June exports rose 2.1 percent from a year earlier.

But the divergent responses to the equities debacle are far more important than China’s inflated GDP

numbers. And what they tell us is that size isn’t everything. Hong Kong is Asia’s 11th-biggest economy, just barely ahead of the Philippines. Yet, thanks to its low taxes, rule of law, unfettered capital flows and transparent markets, it earns its status as one of the world’s freest economies.

The city isn’t without economic impediments, including a pegged currency, oligarchs towering over the economy and a leader picked

by China (one reason for last year’s massive Umbrella Revolution protests). But capitalist mores are clearly ingrained in Hong Kong in a way they’re not in mainland China.

When Hong Kong reverted to Chinese rule in 1997, the hope was that Beijing would emulate the city.

Twenty years on, optimists said, China would boast a free media, a stable and transparent financial system, and greater respect for human rights. Instead, President Xi Jinping’s Communist Party is steadily trying to impose its brand of opacity, censorship and top-down economic-policy making on financial markets.

China will pay a price for not importing more of Hong Kong’s sensibility. Xi’s wildly-over-the-top moves to manipulate the market higher vindicates MSCI’s recent refusal to include what’s now effectively a state-backed market in its indexes.

That may kill China’s hopes to join the International Monetary Fund’s special-drawing rights system; to become a global reserve currency, the yuan has to be reliably convertible.

Beijing is also moving the country’s financial froth into even riskier territory, says Marshall Mays, director of Emerging Alpha Advisors. It’s nice that the Shanghai Composite Index has rebounded 13 percent in three days. The trouble is, Beijing “had the chutzpah to do it without any premise of earnings growth to support it,” Mays says. “Sooner or later, even the speculators will figure that out and sell.”

Foreigners also may be less willing to invest in Shanghai if they feel like they’ll have to constantly be worrying about political machinations in Beijing. Who wants to establish short positions or try hedging a bet on higher prices with China’s public security bureau breathing down your neck? Meanwhile, the ongoing antiforeigner campaign in state-run media is as creepy as it is hypocritical. Xi’s government is second to none in the marketmanipulation department.

The message seems to be that if you want a piece of China’s rise, it’s best to find a proven and safe entry point. Fortunately, there’s one already available—its name is Hong Kong.

opinion@businessmirror.com.ph

Opinion

Takaful insurance

Europe’s insane deal with Greece

BusinessMirror

Atty. Dennis B. Funa

INSURANCE FORUM

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here is, as of today, no regulatory framework for Takaful Insurance in the Philippines. Takaful has been defined as “a cooperative system of reimbursement or repayment in case of loss, paid to people and companies concerned about hazards, compensated out of a fund to which they agree to donate small regular contributions managed on their behalf by a Takaful operator.”

Takaful insurance, or Islamic insurance, is governed by the Shariah law. Its basic principle is Ta’awan, or mutual assistance. The word “Takaful” is derived from the Arabic word kafala, or guarantee. The nearest concept under Philippine insurance law is the concept of mutual insurance.

The creation of a modern Takaful insurance company is relatively new.

The first Takaful insurance company in the world was established only in 1979 in Sudan, followed soon after

by Bahrain. But the concept of Takaful, or mutual assistance, has been in existence since 622 A.D. As of 2013, it is estimated that Takaful insurance worldwide has total assets of $28 billion. There are now a total of 281 Takaful insurance companies and 13 re-Takaful companies in 46 countries. Interestingly, non-Muslims are an increasing market for Takaful insurance. Reinsurance is known as re-Takaful. The total world Islamic finance market is estimated at $2 trillion as of 2014.

Islamic law does not allow conventional insurance, because there are several aspects of conventional insurance that are considered as unIslamic. Examples of these would be the imposition of interest, or Riba (or usury in Western concept); the concept of risk transfer (which is addressed by the Islamic concept of risk-sharing); and the characteristics of gambling (or Qamar or Maisir).

Financial and economic activities are governed by Muamalat, or man-to-man activities. It is believed that human conduct is restricted by three factors: divine restrictions; government restrictions and ethical restrictions. Shariah, or Divine Law, has several sources. These are the Koran; Sunnah of the Holy Prophet (his sayings and acts); Ijma (or the consensus of the Ummah); Qiyas (or by analogy); and Ijtihad.

There are a number of notable economic concepts under Islam that are worth looking into. Among these are: a) Haram economic dealings, or the general prohibitions; b) Riba (or interest); c) Gharar (or excessive uncertainty); d) Qimar (or gambling); e) violation of the law of contract; f) Irtikaaz (or the concentration of wealth); g) Ihtikaar (or hoarding); and h) Iktinaaz (or concealment of wealth). Indeed, the first hurdle in formulating a Takaful framework is determining what are the haram activities, or the prohibited activities. Any activity declared to be haram cannot be the subject of a transaction. Under the concept of Riba-Hadith, the one paying the interest, the one receiving and the one who records the transaction will all be cursed. The Koran, speaking of Riba, stated: “O you who believe, Fear Allah and give up what remains of your demand for interest if you are indeed a believer. If you do not, then you are warned of the declaration of war from Allah and His Messenger; But if you turn back you shall have your principal: Deal not unjustly and you shall not be dealt with unjustly” (Al Baqarah 278-279, Fourth Revelation).

Under the concept of Takaful, participants “pool” their contributions which are then invested in Shariah-compliant products, such as securities and sukuk (or bonds).

Normally, these investments are overseen by a Shariah supervisory board. The profits from these investments are then used to pay the claims, wakalah fees (or agency fee) and other expenses. A part goes to the insurance company for acting as the mudarib. All the surplus or excess amounts are then used for

Takaful insurance, or Islamic insurance, is governed by the Shariah law. Its basic principle is Ta’awan or mutual assistance.

The word “Takaful” is derived from the Arabic word kafala, or guarantee. The nearest concept under Philippine insurance law is the concept of mutual insurance.

The creation of a modern Takaful insurance company is relatively new. The first Takaful insurance company in the world was established only in 1979 in Sudan, followed soon after by Bahrain. contingency reserves, for charity and for distribution to all participants on a pro-rata basis.

There are at least three different Takaful Models. First, Wakalah, based on Waqf Model, where the participants donate the fund and the operator charges an agency fee (practiced mainly in Pakistan and South Africa). Wakalah refers to an agency agreement. Second, the Pure Mudarabah (or Mudharabah) Model, where the participants and the operator enter into a modarabah contract (profit-sharing). Third, the Wakalah Model, where an agency agreement is executed between the participants and the operator on the basis of Wakalah. Saudi Arabia, it is noted, has a unique cooperative model differing from the pure Takaful model of other countries. The regulatory agency there is known as the Saudi Arabian Monetary Agency. The leading Takaful markets in the world are Saudi Arabia, the United Arab Emirates and Malaysia.

Under the Mudharabah Model, the premiums, or ra’s-ul-mal, is received by the Takaful operator or the alMudharib. A profit-sharing agreement is mutually reached between the parties on how the profits will be divided among them. Claims are paid under the concept of tabarru (or to donate or contribute), where a participant agrees to give a portion of his or her contributions.

Among the recent developments on Takaful in the international stage is the recent issuance of RM300 million ($93.8 million) sukuk in an effort to boost the capital of Etiqa Takaful Berhad, an Islamic insurer and a subsidiary of Malaysia’s largest banking group, Malayan Banking Berhad (Maybank). In 2013 Oman launched two IPOs for Al Madina Takaful and Takaful Oman Insurance. Oman’s Muscat Securities Market recently launched Shariahcompliant index for investors seeking Islamic equities.

From the Asean perspective, the gross Takaful “contribution” was estimated to be $4.2 billion in 2014, from an estimated $3.5 billion in 2013. Malaysia is the biggest market for Takaful, with 71 percent of total gross Takaful contributions in Asean. Indonesia is second at 23 percent, and the remaining 6 percent distributed among the other Asean countries. In terms of distribution, the top channels are through brokers, retail agencies and bancatakaful (their version of bancassurance). It has been projected by Ernst & Young that for the period 2013 to 2016, global Takaful market will grow by 14 percent annually.

Dennis B. Funa is currently the deput y insurance commissioner for legal services of the Insurance Commission. E-mail: dennisfuna@ yahoo.com.

I

By Eric Beinhocker | Bloomberg View

f the definition of insanity is doing the same thing over and over and expecting a different result, the leaders of Europe and Greece are insane.

After a 17-hour summit, Europe’s leaders have reached a deal. If the Greek parliament passes a package of reforms by Wednesday night, the country’s creditors will move forward with a third bailout on terms that are much stricter than previous proposals.

If the deal proceeds, it will avert the immediate chaos that Greece’s uncontrolled exit from the euro area would entail, and enable European leaders to talk about something else for a while. Unfortunately, it does nothing to address the fundamental issues that have repeatedly landed Europe in crisis since 2009. Former German Economic Minister KarlTheodor zu Guttenberg quipped that Europe hasn’t been kicking the can down the road, it’s been kicking it up a hill and wondering why it keeps rolling back on its foot.

The core issue: Although the European Union (EU) can handle economies of widely varying types and levels of development, the euro area cannot. Greece’s gross domestic product (GDP) per person was about half of Germany’s when it joined the euro in 2001. Since then, Greece’s competitiveness relative to Germany’s has slid by about 40 percent.

For a currency union to handle widely divergent economies, they must be deeply integrated across multiple dimensions. In the US, the average citizen of Mississippi makes just $20,618 a year, compared with $37,892 in Connecticut—almost as big a gap as between Greece and Germany. Yet, the US doesn’t worry about a “Missexit,” because the

country has various mechanisms for smoothing over differences among its states. The recent problems of Puerto Rico show the danger of being locked to a currency without such buffers.

The mechanisms include large fiscal transfers—by necessity currency unions are transfer unions.

Last year 28 US states sent the equivalent of 2.3 percent of their GDP through the federal budget to the other 22 states. The biggest donor, Delaware, gave 21 percent.

The biggest recipient, North Dakota, got 90 percent. By contrast, in 2011 Germany made a net contribution of 0.2 percent of its GDP to the EU budget, while Greece received 0.2 percent. Would German voters really support a tenfold jump in their contributions from €210 to €2,100 per person?

Large-scale fiscal transfers are not the only mechanism needed.

Mississippi has probably run the equivalent of a current-account deficit with New York ever since the Civil War. Every April, the banks in the Federal Reserve system reallocate assets and smooth over such regional imbalances. By contrast, when Greece runs a deficit with Germany—for example, due to trade with Germany or capital flight from Greece—its central bank accumulates debts to the Bundesbank indefinitely. The Bundesbank currently holds more than €500 billion in credits against other eurozone central banks. Again, would German taxpayers be willing to see the Bundesbank regularly write off

Wednesday, July 15, 2015

The euro was never conceived as an end in itself. It was created as a means toward greater growth and unity.

It has failed badly on both counts. If US-style integration is politically unrealistic, then the only hope for long-term stability is a slimmed-down euro area of more homogeneous countries. Europe must get out of its halfway house of horrors.

Repeated bailouts and austerity won’t achieve that. Europe’s leaders may buy themselves a period of respite this week, but eventually they must choose: Either integrate far more deeply, or help the euro area’s most troubled members escape. some portion of those liabilities?

Another reason US states don’t pop out of the dollar area is that they (with the exception of Vermont) have to balance their operating budgets. Only the federal government can run a long-term deficit. Again, Germany and other EU states have explicitly rejected any kind of euro-area sovereignbond arrangement that would pool deficits. Finally, the US has a deep single market for products, services and labor and a true national banking union, all of which in Europe are only partially completed projects. The lack of truly integrated markets allowed real interest rates and inflation to diverge across the euro zone, leading to a loss of competitiveness and a credit boom and bust in the south.

Thus, the euro area is stuck in a dysfunctional netherworld between a fully integrated union and a more

A7

flexible exchange-rate mechanism.

So Greece has to become a lot more like Germany (unlikely), the euro area needs to become a lot more like the US (also unlikely), or we’ll have another crisis (very likely).

I have argued that, given political reality, the only long-term solution is a managed exit for Greece, in which the country would stay in the EU and receive lots of help from fellow member-states. Although the transition would be difficult, it would ultimately allow the Greeks to regain sovereignty over their economy and rekindle growth, while helping Europe heal its divisions and move on.

The counterargument is that minimizing the pain of a Greek exit would encourage others to run for the door, unraveling the whole euro project. At the moment, though, no other country is as unstable as Greece. Given the costs and uncertainties of even a managed exit, it’s unlikely that others would want to follow Greece’s path. If over the coming decades a few do, a small number of managed exits might be better than constant crisis or a true unraveling.

The euro was never conceived as an end in itself. It was created as a means toward greater growth and unity. It has failed badly on both counts. If US-style integration is politically unrealistic, then the only hope for long-term stability is a slimmed-down euro area of more homogeneous countries.

Europe must get out of its halfway house of horrors. Repeated bailouts and austerity won’t achieve that. Europe’s leaders may buy themselves a period of respite this week, but eventually they must choose: Either integrate far more deeply, or help the euro area’s most troubled members escape.

37th National Disability Prevention and Rehabilitation Week

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he third week of July is observed as the National Disability Prevention and Rehabilitation (NDPR) Week. It was originally proclaimed on June 22, 1978, through Proclamation 1870, then amended by Proclamation 361 (2000) and Administrative Order 35 (2002), in honor of Apolinario Mabini, the sublime paralytic, who made a great contribution to the Philippine Revolution despite his disability.

This year the observance will take place from July 17 to 23 with the

theme “Health and Wellness Opportunities for Persons with Disabilities Toward an Inclusive Development for AH,” which aims to promote and advocate quality health care and services for persons with disabilities (PWDs).

The weeklong celebration was institutionalized primarily to promote an understanding of disability issues and also to mobilize support for the dignity, rights and well-being of PWDs. It also calls for strong partnership and collaboration between

and among different sectors of society, including government and non-governmental organizations, disabled people’s organizations, local government units, the media and the private sector to address issues and concerns of PWDs. Various activities have been lined up for the weeklong celebration, including developmental games for children with disabilities and Boccia sports tournament, forum on health and wellness for parents of children with disabilities;

seminar on how to handle PWDs in tourism industry; orientation on drug prevention; PWD empowerment through health and livelihood; family day; concert; and wreathlaying ceremony on the birthplace of Mabini, among others.

The National Council on Disability Affairs and members of the National Working Committee, chaired by the Department of Health, deserve all the kudos for spearheading this year’s NDPR Week celebration.

2nd Front Page BusinessMirror

A8 Wednesday, July 15, 2015

Peso displaying stability amid China, Greece woes

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By Bianca Cuaresma

he local currency the peso proved one of the more stable currencies no matter the problems hounding China’s equities market and the debt problems faced by Greece with respect to its creditors.

Data from the central bank show that the peso posted a volatility of only 0.77 percent this year, significantly lower than the volatility print averaging 1.27 percent in 2014.

Also, data show that the peso is the second least volatile among the currencies monitored by the Bangko Sentral ng Pilipinas (BSP), next only to the Chinese yuan or renminbi— which posted a volatility rate of 0.37 percent this year.

Among the top volatile currencies include the New Zealand dollar, Swiss franc, euro, the Australian dollar and the Indonesian rupiah.

Tetangco said market players now focus on when the US Federal Reserve would begin to normalize its interest rate and impose a hike as countermeasure to an increasingly robust economy.

Among the more stable currencies, aside from the peso and China’s renminbi, are the Singaporean dollar, the Indian rupee and the new Taiwan dollar.

At the sidelines of the annual BSP Stakeholders Awards ceremony, BSP Governor Amando M. Tetangco Jr. said market players now focus on when the US Federal Reserve (the Fed) would begin to normalize its interest rate and impose a hike as countermeasure to an increasingly robust economy.

“This morning we’ve seen a strong dollar and the other side of that, there’s some weakening of regional currencies, including the peso. Because of the strength of the US dollar this morning, given that people are again expecting that the Fed will increase interest rates sometime this year, the dominant view is that, perhaps, this September,” the governor said.

However, Tetangco said Greece should remain up there among the many variables, as he vowed the BSP will continue to monitor developments in the European Union and make the necessary policy adjustments as and when necessary.

“There still a lot that needs to be done. The agreement, of course, is a very positive step, but the different governments in Europe will have to have these passed by their respec-

tive parliaments, especially Greece.

We’ll have to see what will come out in all of this,” Tetangco said.

On Monday Greece finally reached an agreement acceptable to the European Commission, the European Central Bank and the International Monetary Fund on how the embattled Mediterranean nation would pay back its creditors based on an outline acceptable to the creditors.

The gyrations of the peso, according to Tetangco, indicate that foreign capital has not flown out but has, instead, opted to stay in the Philippines.

“There’s no major change. There’s some weakening today, then some recovery tomorrow. That meant that the movements are within range. There’s no blowup in terms of the exchange rates in the peso, as well as the exchange rates in the rest of the region. They should, to me, indicate that the funds are not moving out of these countries or economies on the big way. There may be some declines in stock markets.

But the funds, I would say, tend to stay within the country, waiting for opportunities,” Tetangco said.

www.businessmirror.com.ph

China urges PHL to ditch its South China Sea case C hina urged the Philippines on Tuesday to ditch its attempt to solve South China Sea territorial disputes with an international tribunal and instead negotiate with Beijing directly, following the arbitration panel’s latest request for input from China.

The Philippines has asked the tribunal in The Hague to declare China’s claims to virtually all the South China Sea invalid, saying Beijing’s actions have trampled on other nations’ rights.

China contends the tribunal doesn’t have jurisdiction, and has refused to participate. The tribunal, which operates under the United Nations Convention on the Law of the Sea, held a weeklong hearing, which ended on Monday, to address China’s contention. It said that Beijing has until August 17 to comment on the hearing, and that it should make a ruling on the issue this year.

C h i nese Foreig n Mi n ist r y Spokesman Hua Chunying on Tuesday reiterated China’s opposition to the arbitration, and said China “will never accept the unilateral attempts to turn to a third party to solve the

disputes.”

“China urges the Philippines to come back to the right track of resolving disputes through negotiation and consultation,” she said in a statement.

The Philippines praised the tribunal’s effort to prod China again to join the case, saying the five-man arbitration body has been fair and transparent in its handling of Manila’s complaints against Beijing.

“We have asked China to participate and we continue to extend the invitation for them to explain their side,” Philippine Department of Foreign Affairs Spokesman Charles Jose said by phone in Manila.

China, the Philippines, Brunei Darussalam, Malaysia, Vietnam and Taiwan have been contesting ownership of the resource-rich South China Sea. The United States and other countries have expressed concerns over China’s island-building in the region that they say has been provocative and has damaged vast coral reefs in the disputed waters.

Beijing says fears that it would eventually limit freedom of navigation and overflight to back its claims are unfounded. AP

TSIPRAS FACES SYRIZA MUTINY AFTER YIELDING TO DEMANDS

P

rime Minister Alexis Tsipras returned to face a mutiny within his coalition after he surrendered to European demands for action to qualify for as much as €86 billion ($95 billion) of aid Greece needs to stay in the euro.

With two factions in his government already saying they won’t support the deal, Tsipras met with his closest aides, as he tries to stop the revolt from spreading before a vote in parliament on Wednesday.

Creditors’ demands include an overhaul of sales tax, a broadening of the tax base and a clampdown on pension costs.

Tsipras would “have to change his administration and clear out hard-liners and radicals from his party,” as well as rely on opposition support to pass the necessary measures, said Eurasia Group analysts Mujtaba Rahman and Federico Santi. “But it is a tough call

Palawan . .

to determine how Tsipras will go about doing this.”

Attention is shifting to the parliamentary hurdles before Greece can even begin negotiations with creditors to access a third international bailout in five years.

The euro was little changed at 1.1004 in Hong Kong at 10:14 a.m.

It sank 1.4 percent on Monday amid speculation the deal would produce enough calm for the US Federal Reserve to raise interest rates this year.

US stocks advanced and European equities capped their biggest rally since 2011. Asian stocks rose for a fourth day.

Default averted

“There’s a vista of division within the party, part of Syriza officials and lawmakers do not accept the tactics followed by our prime minister,” Yanis Balafas, a Syriza lawmaker close to Tsipras, said in an

interview. “What matters now is that the worst-case scenario of a default has been averted.”

Discontent brewed as Tsipras arrived back in the Greek capital.

Left Platform, a faction within Syriza, and his coalition partners, the Independent Greeks party, both signaled they won’t be able to support the deal. That opposition alone would wipe out Tsipras’s 12seat majority in parliament, forcing him to rely on opposition votes to carry the day.

“Over the next three years, things are going to just get worse,” said Yanis, a 23-year-old law student who joined a protest of a few hundred people outside the parliament building at the top of Syntagma Square on Monday evening. He declined to give his last name. “Maybe then people will think again about what kind of society they want to live in.” Bloomberg News

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“During the trade forum [of the Palawan Expo], we will be signing a memorandum of understanding involving the planned $250-million [P11.2-billion] investment of Fresh Del Monte,” Alvarez said.

The governor added that he has also met with Chairman Mohammad AbuGhazaleh of Fresh Del Monte Produce Inc. The company intends to produce fresh bananas and fresh pineapples for export to Asia and the Middle East in the province.

The company will be leasing and developing 6,000 hectares in Southern Palawan for its planned investment, and expects employment to reach 8,000 jobs.

To facilitate the P11.2-billion investment pledge of Del Monte, however, Alvarez said the local government of Palawan will fast-track some P5.2 billion worth of infrastructure projects to ease access and delivery to the ports The P5.2-billion projects include: ■ P2.3 billion for water system, which will also benefit the 367 barangays and 22 municipalities in Palawan, that is slated for completion in about two years; ■ P1.2 billion worth of equipment for

the building and rehabilitation of some 5,500 kilometers of roads; ■ P1.5 billion spread over the next five years for fuel facilities; and ■ P250 million for the rehabilitation of Buliluyan port, which will be undertaken with the Philippine Ports Authority (PPA).

To complement the infrastructure projects, the government of Palawan will also be spending an additional P1.5 billion for livelihood projects and health facilities, including P300 million for a cacaoupscaling project in partnership with Kennemer Foods International, where 6,000 families are expected to benefit; P300 million for the ramping up of seaweeds production, with the government aiming to double the output from the existing 300,000 metric tons to 600,000 in three to four years; and P900 million for 15 new hospitals in Palawan, costing P60 million each, through bridge financing.

Tourism targets Alvarez said these projects will also improve the province’s aim to net P100 billion in tourism revenues in 10 years and help alleviate the province’s living standard.

“The poverty incidence in the province,

which is 63.8 percent, will greatly diminish once that money is there, 10 years down the road. We want to attract three-and-ahalf million tourists from the 1 million we have now,” Alvarez said.

On the part of the national government, the DOT is working with the Department of Public Works and Highways and the Department of the Interior and Local Government for “convergence projects” aimed at improving the roads leading to tourist destinations.

To further drum up investor interest in Palawan, the upcoming Palawan Tourism and Investment Expo will feature two events: an investment forum focused on agriculture, agribusiness, power and infrastructure; as well as a trade fair.

The Investment Forum will be on July 28 at the Hotel InterContinental, while the trade fair will be held from August 7 to 9 at the Glorietta Activity Center.

The tourism and investment expo is a joint event organized by the government of Palawan, the Palawan Tourism Council, the DOT through the Tourism Promotions Board, the United States Agency for International Development, and the University of Asia and the Pacific.