BusinessMirror August 4, 2015

SPECIAL REPORT

INTEGRATION REMAINS AN ELUSIVE DREAM FOR PHL STEEL INDUSTRY B C N. P

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Second of three parts

HE Philippine Iron and Steel Institute (Pisi) wants government action on a package of reforms aimed at boosting the competitiveness of the import-dependent industry, particularly now that the Association of Southeast Asian Nations integration is at hand.

The iron and steel industry said this is the right opportunity to address its pressing problems, as the Department of Trade

and Industry (DTI) has moved to jumpstart the revival of the manufacturing sector, with an overall goal of increasing manufacturing contribution to gross domestic product (GDP) from the current 23 percent to 30 percent by 2020.

“There are a lot of governance issues why we’re attracting so few investments in the steel industry. There’s the infrastructure, transportation issues and electricity. On average, these factors account for an average 30 percent of the C  A

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

U.N. MEDIA AWARD 2008

A broader look at today’s business Saturday 2014 Vol. 10 No. 40Vol. 10 No. 299 Tuesday,18,August 4, 2015

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

AFTER BOTCHED BUYIN DEAL, ANG SUES GOZON, OTHER GMA NETWORK OFFICIALS FOR SYNDICATED ESTAFA

Ang files ₧1-B suit vs GMA execs B B J R. S J  L S. M

USINESSMAN Ramon S. Ang has filed a syndicated estafa complaint before the Department of Justice (DOJ) against executives of television giant GMA Network Inc. for their refusal to return his P1billion down payment for their botched buy-in transaction.

INSIDE

‘FENG SHUI’ May become channels of grace

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RAISE to You, Lord Jesus Christ, the Light of the world! You challenged us, “You are the Light of the world. Let your light shine before men so that seeing your good works they may give glory to your Father in Heaven.” This is not an easy task, but You want us to take it seriously. May we spend time to study and reflect on Your word so that we may proclaim it clearly and boldly. May we participate worthily and actively in the celebration of the sacraments so that we too may become channels of grace and thus become true believers in justice and practice charity and inspire others to holiness. Amen.

DAILY PRAYERS, VIRGIE SALAZAR AND LOUIE M. LACSON

Word&Life Publications • teacherlouie1965@yahoo.com

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

Life

In a 19-page complaint, Ang said lawyer Felipe L. Gozon, one of the majority shareholders of GMA Network, his family members and several others, should be held accountable for syndicated estafa under Presidential Decree 1689, in relation with the crime of estafa under Article 315 of the Revised Penal Code.

Syndicated estafa is a nonbailable offense.

HOW TO DEFINE YOUR PERSONAL STYLE »D4

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Tuesday, August 4, 2015

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‘Feng shui’: The ultimate guide to designing your desk for success

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B E S greatist.com

ENG shui (pronounced “fung shway”) is the ancient Chinese practice of arranging physical objects to attract positive energy.

It’s based on the idea that everything in a person’s surrounding environment affects his or her inner life. Feng shui practitioners believe the placement of objects in a room, building or other space will affect the flow of chi (life force or essential energy) within the space. If there’s good chi flowing, whoever’s in the space will get a boost of positive energy. Pretty sweet, right?

According to feng shui expert RD Chin, people often turn to the practice if “they don’t feel right or comfortable in their space.” Perhaps nowhere is this more relevant than in the workspace—painful chairs, bad lighting and a boss breathing down our necks hardly promote feelings of comfort.

That’s where feng shui comes in. If you’re looking to feel a little more “at home” even while at work, or just want to send some good vibes your way on the job (promotion, anyone?), read on to find out how to use feng shui on your desk.

IS CHI FOR ME? WHILE there are few to no scientific findings that look at the effectiveness of feng shui directly (just, you know, thousands of years of Chinese tradition), some research backs up the practice’s basic principles. One study suggests getting more organized can improve time management, which helps boost productivity at work.

And psychology research found that adding natural elements—such as sunlight, green plants and physical movement—to the workplace can boost employee health, happiness and productivity. How’s that for some positive energy?

So how is feng shui different from just getting organized or decorating better? “It goes beyond just decorating because feng shui has a psychological component to the principles, says Laura Cerrano of Feng Shui Manhattan. “Your surroundings have a deep and profound impact on your emotional, mental, physical and spiritual well-being.” Since the daily 9-to-5 makes up a big part of the day, improving the chi in the workspace will help you out at work and in the rest of your life.

GETTING STARTED: HOW TO FENG SHUI YOUR DESK ONE of the basic tools for a feng shui practitioner is the bagua map. It’s a nine-part grid depicting the different areas of a space (home, desk, office, what have you) and how they correspond to different areas of life.

Think of it as a general blueprint for any feng shui endeavor. To let the positive energy flow, follow the basic guidelines below.

■ Orient your desk. If possible, place your desk directly opposite the front door of your office. If you don’t have a private office, try to orient your desk to face the main door. Cerrano calls this a “commanding position.” If your boss isn’t willing to accept furniture rearrangement in the name of chi, Cerrano says arranging a small mirror on your desk to reflect the

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office’s entrance is the next best thing. “According to the principles of feng shui, this arrangement offers protection and symbolizes you seeing opportunities as they come to you during your career,” Cerrano says. In other words, you have to be able to see opportunities in order to seize them.

■ Make room for creativity. Once you have a full view of any incoming opportunities, it’s time to tackle the desk’s surface. Chances are there’s a bit of clutter, which Cerrano defines as “anything unfinished, unresolved, tolerated or disorganized.”

Clear the clutter and organize things in a way that suits your work style and personal preferences. Cerrano suggests organizing by date or category, using colored binders if that appeals to you. Getting organized can boost productivity, while clearing clutter can provide a space that allows creativity to flow.

■ Desk for success. Now comes the fun part: arranging your desk to promote the flow of positive energy. Imagine the desktop divided into a nine-part grid, as in the bagua map shown above. Choose several areas of your life that could use a little boost, and use the following tips to attract good energy to those areas.

Each section is associated with a color, and you can use objects of that color if you have them. Just don’t go overboard—remember, clutter blocks creativity, so at least 50 percent of the desktop should be clear at all times. Don’t focus on all nine sections; instead, select two to three priorities.

1. Wealth and prosperity: The back left corner of the desk represents prosperity. Target this space to

attract money and abundance. It’s a great place for a plant, but if your green thumb is more on the brown side, consider placing a valuable item (such as a crystal vase or jar of change) in this corner. This could also be a good spot for a (well-functioning) computer.

2. Fame and reputation: Want more than 15 minutes in the spotlight? In the center back of the bagua map, you’ll find the space for fame. Place business cards or a nameplate here. Cerrano also recommends “motivational images that highlight who you are and your accomplishments” (think: a photo of your first marathon finish or your hard-earned diploma).

3. Love and relationships: To find a little love today (or in the future), focus on the back right corner.

Single? A fresh flower, which can bring luck and maybe even spark romance, goes here. Already have a special someone? Place a photo of the two of you here.

4. Family: Although it’s a cliché desktop feature, a family photo, according to feng shui principles, fits well on the left center of the desk. A wood frame enhances the energy of this particular space.

5. Health: Although sitting at a desk doesn’t do much for your health, there are a few ways to promote health even while working. Keep the center area of the desktop free of clutter to attract good energy to the area.

In addition, Cerrano recommends taking short breaks throughout the day to reduce stress and maintain focus.

6. Creativity: Boost creativity by adding inspiration to the right center of the grid. Aspiring writers, place a journal or book here. A blank sketchbook would be ideal for artists, while a metal object may work well for others.

But really, anything goes—just get creative.

7. Knowledge and wisdom: Struggling to learn new material, or just want to be wise beyond your years? Focus on the front left corner of the desk.

Place a reference book (or maybe a picture of Albert Einstein) here.

8. Career: Front and center is the career space— definitely appropriate for a desk. Keep this spot free of clutter. Cerrano suggests displaying affirmations or motivational quotes around the office; this would be a great place to stick one of those.

9. Helpful people and travel: If you’re in need of a little help from your friends, focus on the front right section. This is a good spot to put a phone or an address book (do people use those anymore?). This area also represents travel, so a travel guide or a photo of a dream vacation locale would work well here.

THE TAKEAWAY FENG shui isn’t a magic formula; rather, it provides a visual reminder of the areas of life that you value or are working to improve. Chin notes that feng shui is a “matter of perspective, a way of thinking or creating balance in our lives.” Start by following the guidelines above as a way to add positivity and balance to your desk—and to your life.

■ Greatist ((http://greatist.com http://greatist.com)) is the fastest-growing http://greatist.com fitness, health and happiness media start-up. Check out more health and fitness news, tips, healthy recipes, expert opinion and fun at Greatist.

7 OLD THINGS I LOVE B M C G Tribune News Service I’M not one to live in the past, but oh my, do I love lots of old things. I have peppered my home with collections of vintage treasures, family heirlooms and a few antiques because they fill my heart and just make me happy. The secret to decorating effectively with old things, I’ve found, is to use them sparingly and to mix them with fresh, new pieces so your interior doesn’t feel stale or stuffy. Here are seven of my favorite old things to have in my home: 1. Transferware. If my house was on fire, I would run back in for my transferware dishes. A quick snatch of history: Transferware was developed in England in the 1750s as a way to mass produce dinnerware so it was accessible

and affordable for middle-class folks. It’s been produced ever since. If I could, I would have a set in every color imaginable. I use it in my everyday dining to set a beautiful table when I entertain and in decorating.

Hang transferware plates on your wall as art. Put a beautiful bowl filed with apples or lemons at the center of your kitchen island. Prop a platter in an easel and use it as a backdrop for a display in a bookcase. Blue and white transferware steals the show in my friend Ann’s light, bright, airy kitchen.

2. Silver. My love affair with silver began when Mimi, my husband Dan’s mother, started giving me a few pieces from her collection as gifts for Christmas or my birthday (I always knew I was in trouble with her when she gave me Isotoner gloves instead!). I’ve been collecting

vintage silver ever since. It’s magical how adding something as simple a silver bowl, candlestick or tray can take a ho-hum display and sent it through the roof.

Ann created a simple yet stunning centerpiece for her dining room table just by filling a silver serving dish with flowers and flanking them with a set of charming candelabra. You can’t beat silver when it’s kept shiny (It’s painless to polish it while you’re binge watching your favorite series on Netfilx!). But it’s also great with a touch of tarnish if you’re going for an aged look in your display.

3. Florals. Florals are crazy hot right now. I am thrilled floral fabrics are back, because I’ve loved them for years. Today’s florals span the spectrum from traditional patterns to transitional and modern.

4. Tole trays. Tole trays, with their

romantic designs and rich colors, are perfect accent pieces for your kitchen, living room or bath.

Really, they work anywhere in your home—they are just that wonderful. The tole painting process was developed in the 17th century as a way to help protect metal household pieces from rusting. These charming trays have been popular ever since. If you’re a collector of fine antiques, expect to pay a bundle for the real deal. But if you want vintage trays from the 1940s and 1950s, or modern reproductions, you can snag them for as little sum on sites like Etsy. I love tole trays hung as art, backing a display in a bookcase, or used as a base of a lovely display.

5. Books. I like to wax poetic about my love of books. They bring warmth and character to a display, and I use them

all over my home when I decorate. They serve as risers, conversation pieces and backdrops. Ann created a tower of tomes to serve as a little side table in her living room.

6. Porch swings. Why did porch swings ever go out of style? There is nothing better to do on a warm summer evening than sit on the porch and swing back and forth as you sip a cold drink, watch the fireflies and talk with friends.

Ann says her guests always gravitate to the swing on their porch. No wonder: That’s where I would be too!

7. Dan garrity. I couldn’t resist this one. But, honestly, what a blessing it is to grow old together, still in love after all these years.

LIFE

■ This article was adapted from Mary Carol Garrity’s blog at www.nellhills.com.

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ATHLETICS IN TURMOIL C1

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| TUESDAY, AUGUST 4, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

TESTS UP FOR RIO 2016 OLYMPICS WATER VENUES

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IO DE JANEIRO—The International Olympic Committee (IOC) said on Sunday it will order testing for diseasecausing viruses in the sewage-polluted waters where athletes will compete in next year’s Rio de Janeiro Games.

Before, the IOC and local Olympic organizers in Rio said they would only test for bacteria in the water, as Brazil and virtually all nations only mandate such testing to determine the safety of recreational waters.

But after an Associated Press (AP) investigation published last week revealed high counts of viruses directly linked to human sewage in the Olympic waters, the IOC reversed course after being advised by the World Health Organization (WHO) that it should expand its testing.

“The WHO is saying they are recommending viral testing,” IOC Medical Director Dr. Richard Budgett told the AP. “We’ve always said we will follow the expert advice, so we will now be asking the appropriate authorities in Rio to follow the expert advice which is for viral testing.

We have to follow the best expert advice.”

On Saturday the International Sailing Federation (ISAF) became the first to break with the IOC’s insistence on bacteria-only testing, saying it would do its own independent tests for viruses.

“We’re going to find someone who can do the testing for us that can safely cover what we need to know from a virus perspective as well as the bacteria perspective,” said Peter Sowrey, chief executive of the ISAF. “That’s my plan.”

That came after the WHO told the AP on Saturday that it had advised the IOC to test for viruses.

A five-month AP analysis of water at each of the venues where about 1,400 Olympic athletes will have contact with water showed dangerously high levels of viruses from sewage.

The AP commissioned four rounds of testing in each of those three Olympic water venues, and also in the surf off Ipanema Beach, which is popular with tourists but where no events will be held. Thirty-seven samples were checked for three types of human adenovirus, as well as rotavirus, enterovirus and fecal coliforms.

The AP viral testing, which will continue in the coming year, found not one water venue safe for swimming or boating, according to global water experts who analyzed the AP data. A risk assessment done based on the AP’s study found that athletes who ingest just three teaspoons of water have a 99-percent chance of being infected by a virus—though that does not automatically mean they would fall ill. That depends upon a person’s immune system and a number of other factors.

The concentrations of the viruses in all AP samples were roughly equivalent to that seen in raw sewage—even at one of the least-polluted areas tested, Copacabana Beach, where marathon and triathlon swimming will take place and where many of the expected 350,000 foreign tourists may take a dip.

In Rio, much of sewage goes untreated and runs down hillside ditches and streams into Olympic water venues that are littered with floating rubbish, household waste and even dead animals.

The pollution problem has been around for decades, and has sparked what top medical experts in Rio call an

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endemic public health crisis because of the dirty water in this otherwise stunningly gorgeous city circled by Atlantic rain forest and golden sand beaches.

On Sunday athletes competed under a blazing Rio sun in an Olympic test event in the triathlon.

“It’s been an interesting learning experience over the last few days. I think some athletes went back to Biology 101 to learn the difference between bacteria and viruses,” said American triathlete Sarah True, who has qualified for next year’s Olympics. “It’s kind of eye-opening for me that people didn’t differentiate the two.”

She said that for the athletes, “obviously it’s a concern, it’s a risk” but that “ultimately the Olympic dream is so strong that sometimes we put the pursuit of excellence above our health.”

True said she didn’t think the Olympic venue could be moved from Copacabana even if the IOC’s tests also find high viral counts.

“We can’t move,” she said. “Ultimately too much money has been invested.”

So far, neither the IOC nor the sailing federation has

said who would do their testing. Virology experts in Brazil say there are only three or four labs with the molecular biology equipment and trained scientists who can carry out the testing for viruses in water.

The AP’s tests are being conducted by Fernando Spilki, a respected virologist who is a board member of the Brazilian Society for Virology and editor of its scientific journal. He is not being paid by the AP to conduct the testing, though the AP is purchasing the lab materials required to carry out the research.

When Rio was awarded the games in 2009, it promised cleaning its waters would be an Olympic legacy.

But Rio Mayor Eduardo Paes has repeatedly acknowledged this will not be done, calling it a “lost opportunity.” AP go out of the water after swimming in »theTRIATHLETES Copacabana beach during a training ahead of the Triathlon Olympic Qualifier event in Rio de Janeiro over the weekend. AP

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B S P The Associated Press

ARIS—Three weeks before the world championships, athletics was thrown into turmoil by new accusations of widespread doping and experts denouncing an antidoping system compromised by leniency.

The World Anti-Doping Agency (Wada) responded to the “wild allegations” made by two European media outlets of suspicious drug tests in athletics by asking an independent body to investigate.

Wada President Craig Reedie said on Sunday he was surprised by the scale of the allegations, including that one-third of medals in endurance races at the Olympics and world championships over a 10-year period were won by athletes who recorded suspicious doping tests.

German broadcaster ARD and The Sunday Times newspaper in Britain said they obtained access to the results of 12,000 blood tests from 5,000 athletes. The files came from the database of the International Association of Athletics Federations (IAAF) and were leaked by a whistle-blower, according to the reports.

Antidoping scientist Robin Parisotto, who reviewed the data from the period covering 2001 to 2012 with blood doping expert Michael Ashenden, was critical of the federation, saying many athletes appeared to “have doped with impunity, and it is damning that the IAAF appears to have idly sat by and let this happen.”

The IAAF and Wada were already investigating accusations made in two previous ARD documentaries of alleged systematic doping and cover-ups in Russia.

Reedie said the material from the new ARD program and The Sunday Times would be turned over immediately to Wada’s independent commission for investigation.

“These are wild allegations, wide allegations, and we’ll have to check them out and we’ll have done that by the commission as quickly as possible,” Reedie said in Kuala Lumpur, where he was attending IOC meetings.

Sebastian Coe, the former head of the London Organizing Committee for the Olympic Games who will bid to become the next IAAF president later this month, said the federation is taking the accusations very seriously

German broadcaster ARD and The Sunday Times newspaper in Britain said they obtained access to the results of 12,000 blood tests from 5,000 athletes.

The files came from the database of the International Association of Athletics Federations and were leaked by a whistle-blower, according to the reports.

INTERNATIONAL Olympic Committee (IOC) President Thomas Bach speaks at a press conference after the 128th IOC session in Kuala Lumpur on Monday. Bach says the Olympic body will take action against any Olympic medalists if they are found guilty of the latest doping allegations in track and field. AP

and “will issue a robust and detailed response to them and continue to work closely, as it has always done, with Wada.”

IAAF Vice President Sergei Bubka, who is also running to replace Lamine Diack, echoed the sentiment.

“Everyone should know—there is no space for cheaters, not in athletics, not in other sport, not in the Olympic Movement. The IAAF position is always zero-tolerance for doping,” said Bubka, who also sits on

the IOC executive board.

The ARD program, called Doping Top Secret: The Shadowy World of Athletics, was broadcast three weeks before the world championships in Beijing, which run from August 22 to 30.

Parisotto and Ashenden reported that 800 athletes, competing in disciplines ranging from the 800 meters to the marathon, registered blood values that are

with suspicious results, and that, in some finals, every athlete in the medal positions had recorded a dubious blood test.

The reports also alleged that more than 80 of Russia’s medals were won by athletes with suspicious tests, while Kenya had 18 medals won by suspicious athletes. ARD said it has evidence of human growth hormone being used by Russian runners.

Russian Sports Minister Vitaly Mutko suggested there was an ulterior motive to the allegations and Athletics Kenya said it was considering legal action against ARD and The Sunday Times.

“Clearly, some people are trying to destroy athletics by putting out films like this. But, in any case, you can’t base accusations on films,” Mutko said in comments reported by the Tass news agency.

He added that Saturday’s documentary “is not so much a blow to Russia as a blow to the IAAF.” Parisotto and Ashenden compared IAAF’s current doping problems with those faced by professional cycling 20 years ago—in an era when the use of the bloodbooster EPO was widespread—underlining that some athletes’ blood values were “life-threatening.”

“If it is true there was a spate of deaths in professional cycling, when EPO first appeared during the early 1990s, then I worry there may have been a larger hidden trail of death in athletics,” Ashenden said.

The IAAF said it was aware of “serious allegations made against the integrity and competence of its antidoping program.”

“They are largely based on analysis of an IAAF data base of private and confidential medical data which has been obtained without consent,” the federation said, adding that it reserves the right to take action to “protect the rights of the IAAF and its athletes.”

The IOC was also aware of the accusations.

“It’s up to the Wada commission to gather evidence,” IOC Spokesman Mark Adams said. “We have full confidence in them.”

The president of the European athletics federation, Svein Arne Hansen, said the allegations “are a cause for deep dismay and yet another indication of how much we as a sport still have to do to ensure that athletics is free of doping and seen to be fair and clean.”

SPORTS

considered suspicious under Wada standards.

The report found that 146 medals—including 55 golds—in those disciplines at the Olympics and world championships were won by athletes who have recorded suspicious tests. None of the athletes have been stripped of those medals, according to the report.

The Sunday Times also said that 10 medals at the 2012 London Olympics were won by athletes

CHINA PREPARING FRESH STIMULUS TO BOOST GROWTH

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HINA’S leadership is preparing fresh stimulus spending to ensure that signs of economic weakening don’t put the country’s 2015 growth target out of reach, a danger that was underscored by a deterioration in manufacturing in July.

Ahead of the top leadership’s annual gathering at the Beidaihe seaside resort east of Beijing, the Communist Party’s Politburo pledged last week to make “preemptive” policy adjustments in the second half. Premier Li Keqiang highlighted one area targeted for spending will be a “severely outdated” underground pipe system in the nation’s expanding megacities.

Factories could use the work that such construction projects will bring, with a private manufacturing gauge released on Monday falling to a two-year low. An official factory index on Saturday slipped to a five-month low in July, amid a drop in new orders and jobs, adding to threats that include a near-$4 trillion rout in Chinese stocks and a fall in car sales that endanger Li’s goal of about 7-percent growth this year. Bloomberg News

PESO EXCHANGE RATES ■ US 45.6810

U.N. SUSTAINABLE DEVT PROGRAM Earth Institute and Sustainable Development Solutions Network (SDSN) Director Jeffrey Sachs (center) leads the news conference for the launch of SDSN, a special initiative by United Nations Secretary-General Ban Ki-moon in August 2012, which seeks to mobilize scientific and technical expertise from academia, civil society, and the private sector to solve sustainable development problems at local, national and global scales. Present during the news conference are economist and professor Solita Colla-Monsod, and National Economic and Development Authority Director General and Economic Planning Secretary Arsenio M. Balisacan. ALYSA SALEN

Govt to restructure 4 delayed ODA projects B C U. O

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HE national government plans to restructure four official development assistance (ODA) projects this year following delays in their implementation due to procurement problems, according to the National Economic and Development Authority (Neda).

Based on the 2014 ODA Portfolio Review, the Neda said the four projects are the Environmental Development Project; Logistics Infrastructure Development; Support for Strategic Local Development and Investment Project; and Agrarian Reform Infrastructure Communities Phase III (Arisp III).

“Based on the series of agency consul-

tations conducted as part of the review process, [these] projects were identified as most likely to seek ICC [Investment Coordination Committee] approval for project restructuring in CY [Calendar Year] 2015,” the Neda explained.

The Environmental Development Project and Logistics Infrastructure Development are implemented by the Development Bank of the Philippines and financed by the Japan International Cooperation Agency (Jica).

The Neda said the Environmental Development Project will be restructured to make room for the extension of the project’s loan-disbursement schedule.

The report stated that this extension will address policy and documen-

tary compliance of approved sub-loan accounts, which are part of DBP’s due diligence procedure.

The Logistics Infrastructure Development project, meanwhile, would require restructuring due to the delays in the bidding of some of its public-private Partnership (PPP) components.

“As some PPP subprojects, which availed of sub loans have started to pick up with their bidding only recently, a request for the extension of the loan may be necessary,” Neda said.

The Support for Strategic Local Development and Investment Project, meanwhile, is implemented by the Land Bank of the Philippines and financed by C  A

■ JAPAN 0.3687 ■ UK 71.3720 ■ HK 5.8937 ■ CHINA 7.3564 ■ SINGAPORE 33.2976 ■ AUSTRALIA 33.5199 ■ EU 50.1806 ■ SAUDI ARABIA 12.1816 Source: BSP (3 August 2015)

A2 Tuesday, August 4, 2015

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Integration remains an elusive dream for Phl steel industry continued from A1

production of steel,” said Rolando Narciso, member of the Pisi and former National Steel Corp. president.

Investments in basic iron and steel making are on an erratic trend.

Based on available data, the Board of Investments (BOI) registered P 35.4 billion worth of fresh capital infusion in the industry in 2012, which rose to P 42.3 billion in 2013. However, a low of P297 million was registered in 2009. In 2003 the industry received P1.5 billion in investments.

“There are no investments in flat steel, just long products. We’re importing most of our requirements for flat steel from China, same as other Asean countries,” said Roberto Cola, president of Pisi.

According to data from the BOI, there is no local production of hotrolled coils (HRC), hot-rolled plates and cold-rolled coils (CRC), meaning all requirements for these intermediate materials for flat products are being imported.

Investments in the industry are concentrated toward long-products manufacturing, as the cost differential between producing the highervalued flat products and importing them are too close.

Despite this disadvantage, the local steel and iron industry, in its roadmap, is batting for new capacities for the flat-products sector, as well as expansion of existing capacity in long products with the help of foreign players Given the capital-intensive nature of an integration project, more foreign direct investments (FDI)

are needed for the country to have its truly integrated steel mill. Today this remains an elusive dream.

Considering the Philippines’s standing as an FDI laggard in the Asean region, the industry said the bigger picture of improving the overall investment environment—not just for steel—must be looked at.

As with most industries, the problems of prohibitive logistics and electricity costs, as well as rampant smuggling, are also plaguing the iron and steel industry.

On smuggling, Pisi said about 20 percent to 25 percent of importations yearly went in without the payment of proper taxes and duties.

In 2014 smuggled crude steel was estimated at about 1.1 million metric tons (MT).

“Government implementation, of course, is always an issue on these matters,” Narciso said, adding that stricter enforcement is necessary.

Pisi, in a position paper, said the light sections—galvanized iron (GI)/prepainted galvanizediron sheets (PPGI), CRC, HRC and pipes—are the most common steel and iron products that are being smuggled into the country.

Last year a player in the domestic steel-roofing manufacturing industry pushed for safeguard duties on imports GI and PPGI imports, as these were reportedly hurting the local industry.

The player, Puyat Steel Corp., claimed that there is underutilization of installed capacity for roofing materials due to the unfair competition posed by the importation of the same products.

In this file photo, a public-private team, led by the Department of Trade and Industry, confiscated substandard steel angle bars that were believed to have been smuggled into the country.

The company said local steel producers could only produce 450,000 MT of roofing materials, or only 60 percent of the installed capacity of 750,000 MT. The group added that local PPGI production could meet the demand for prepainted sheets, but capacity utilization declined due to the overwhelming presence of cheaper substitutes from China.

In a decision earlier this year, however, the Department of Trade and Industry (DTI) dismissed the petition for safeguard measure.

Government action must be more responsive to the industry’s needs, the group urged.

“In other countries, their governments are very proactive in the steel industry. India has its own Ministry of Steel Industry and Malaysia has its Steel Council. In Indonesia, the filing of [petition for] protective tariffs against steel imports before the World Trade Organization is often done and with haste. Here it’s hands off,” Narciso said.

To this end, the industry is seeking a revival of the Presidential Iron and Steel Committee created by thenPresident Fidel V. Ramos to challenge the private sector to integrate the iron and steel industry. This was discontinued reportedly because it failed to gain any support from the private sector during that time.

Other actions urged by the iron and steel industry is the acquisition of the shuttered flat-steel facilities of Global Steel’s plant in Iligan through the National Development Corp. (NDC), an attached agency of the DTI. The NDC, according to the

group, should spearhead projects that basic industries like iron and steel need.

Moreover, the industry is also pushing for the government— through the NDC—to start feasibility studies on an integrated steel mill (ISM) project, with the aim of using the country’s rich resources of iron ore that could be used for a specific type of steel-making technology.

“There have been several reports of big-volume extraction of iron sands in Region I. This information has to be investigated further, particularly on the quantity or quality, specific source and size of remaining supply or reserve, because there is a distinct possibility that these materials are suitable,” according to the position paper of steel industry stakeholders submitted to the BOI. “What we have to do now is to start the feasibility studies so we know what kind of technology to use, and determine the amount of investments we can attract for integration projects,” Narciso said.

According to the stakeholders’ position paper, the ISM project should be done by the DTI and BOI, NDC, the departments of Environment and Natural Resources, and Energy.

Cola and Narciso stressed that with the country’s apparent steel consumption estimated to reach 20 million MT by 2030, and with the integration of the domestic steel industry far from reality, import dependence is sure to rise—from the present 80 percent to 100 percent. This means total annihilation of the domestic steel industry. To be continued

news@businessmirror.com.ph

The Nation BusinessMirror

Wars over resources feared as climate change worsens

By Marvyn N. Benaning Correspondent

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HE world is teetering on wars over water and other natural resources as climate change worsens, the Pentagon has warned in a document that took several months before being cleared for release.

In a report released last week, the US Department of Defense admitted that climate change will exacerbate current world problems like “poverty, social tensions, environmental degradation, ineffectual leadership and weak political institutions that threaten stability in a number of countries.”

US interest in maintaining stability worldwide has been so intense that it had created practically a global military organization comprising the African Command, Central Command, Pacific Command, Northern Command, as well as the European Command, all of which equipped to wage war and implement different types of operations in response to human, as well as natural disasters.

Ret. Gen. Charles Jacoby, who commanded the US Northern Command, which is charged with protecting the US mainland, until last year, warned that stiff competition for energy and water sources would intensify competition among states and instigate armed conflict.

In ZME Science, writer Tibi Puiu said the US military should also do something to curb climate change.

“The Pentagon is very apt in identifying threats. No one can

deny this. Personally, it would be a lot more constructive and helpful if the Pentagon also took steps to help curb the problem. The US military is the primary polluter in the world’s second biggest polluting country,” Puiu explained.

Negligence had been blamed for the beaching last year of the USS Guardian, a minesweeper, in the Tubbataha Reef, a UN protected marine sanctuary.

Pentagon paid only P87 million for the damage to the corals, an amount deemed by experts to be puny even as the damage was really on a smaller scale compared to the reclamation of reefs and shoals undertaken by China in the disputed areas of the West Philippine Sea. With various reefs unchartered and not well studied by various agencies, the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (Searca) said it is now time for the National Mapping and Resources Inventory Agency and the Bureau of Aquatic and Fisheries Resources to map all of them and determine as well the biomass of pelagic fish species in the country’s 13 fastdepleting fishing grounds.

Searca Director Gil C. Saguiguit Jr. said the Philippine Coast Guard can also pitch in by helping implement fisheries and environmental laws, particularly against illegal fishing.

The Pentagon is also concerned about the rapid melting of ice in the Arctic, which would lead to the opening of new shipping routes through

the Northwest Passage, which had trapped ships for centuries.

Moreover, oil drilling has intensified in the general area.

“Future Arctic offshore drilling will also create a resource demand and the need for emergency response, risk reduction measures, and environmental protections,” the Pentagon report added.

In the Middle East, the greatest climate-change risk is water scarcity while the humanitarian crisis is the main concern in Africa, where the US Africa Command operates.

In Hawaii, the Pentagon is concerned with the resilience of its military installations, whether these will hold against rising sea levels and more weather calamities.

“The National Security Strategy, issued in February 2015, is clear that climate change is an urgent and growing threat to our national security, contributing to increased natural disasters, refugee flows, and conflicts over basic resources such as food and water,” the report said.

“These impacts are already occurring, and the scope, scale and intensity of these impacts are projected to increase over time.”

“The Department of Defense’s primary responsibility is to protect national security interests around the world. This involves considering all aspects of the global security environment and planning appropriately for potential contingencies and the possibility of unexpected developments both in the near and the longer terms,” Pentagon noted.

Editor: Dionisio L. Pelayo • Tuesday, August 4, 2015 A3

Election lawyer to Roxas: Resign now as a matter of delicadeza

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By Joel R. San Juan and Rene Acosta

LECTION lawyer Romulo Macalintal on Monday said the resignation of Interior Secretary Manuel “Mar” A. Roxas II from his post to pursue his presidential ambition is a matter of delicadeza than a requirement of the law.

In a statement, Macalintal noted that there is no law requiring appointed government officials to resign from their posts after making public their intention to participate in elections.

Roxas has been proclaimed as the standard bearer of the Liberal Party (LP) for the 2016 presidential elections.

“It is actually addressed to his [Roxas] sound discretion or sense of delicadeza.... The law does not require him to resign,” Macalintal said.

Section 13 of the Poll Automation law provides that appointive officials and employees “shall be considered ipso facto resigned from his office and must vacate the same at the start of the day of the filing of the certificate of candidacy.”

On the other hand, Section 67 of the Omnibus Election Code, which mandates the automatic resignation of elective officials if they run for any position other than the one they are holding in a permanent capacity, was annulled by Section 14 of Republic Act 9006, or the Fair Election Act. Following President Aquino’s announcement that Roxas is the LP’s standard bearer, some sectors have called on Roxas to resign to prevent him from using his post for his political ambition.

The Commission on Elections has set the filing of certificate of candicacy for the May 2016 national and local elections from October 12 to 16.

Roxas bids adieu

ROXAS, meanwhile, bid good-bye

to the National Police on Monday as he began divesting himself of his duties leading to his resignation in order to push for his presidential campaign.

“I will bid good-bye to the DILG [Department of the Interior and Local Government] and to the other units,” he said after gracing the traditional Monday flag-raising ceremony of the National Police at Camp General Rafael Crame, Quezon City, where he delivered his last message to the men and women of the police organization.

On Monday afternoon, Roxas said he was scheduled to meet with Aquino to discuss his decision to officially leave the Cabinet.

In his speech at Camp Crame, Roxas recalled how he accepted the post of administering the National Police more than two years ago by becoming the secretary of the DILG. He also recalled the challenges that he and the force have faced and went through, especially in the campaign against crime.

“It is my honor to have served along with you. I am proud to have been with you and to have served with you,” Roxas said.

He prodded the policemen to continue doing the “right thing” as he assured he would do everything in order to ensure that the improvement of the force will continue.

Economy

A4 Tuesday, August 4, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

news@businessmirror.com.ph

Lawmaker to DFA: Justify envoys’ ‘excessive salaries’

NREB cites need to amend FiT rules and RE Act if…

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By Jovee Marie N. dela Cruz

party-list lawmaker on Monday asked the Department of Foreign Affairs (DFA) to explain before the House of Representatives the “excessive salaries” of its 13 officials amounting to P138.25 million in 2014.

Party-list Rep. Luzviminda C. Ilagan of Gabriela said that DFA officials will be made to explain these salaries when the House of Representatives scrutinizes the proposed budget for 2016. The lower chamber’s budget deliberation is set to start on August 10.

“The Department of Foreign Affairs repeatedly bemoans the lack of resources for OFW [overseas Filipino workers] assistance, maintains that budget is never enough to maintain shelters for OFWs in distress, yet it can afford to give 13 officials P138.25 million in salaries, allowances and bonuses in 2014,” the lawmaker said.

“These are highly irregular and even scandalous. It is unconscionable, especially amid OFW neglect,” she added.

The Gabriela solon deplored that the DFA often lacks funds for the repatriation of OFWs in distress, saying it could not even secure decent shelters or afford to give OFWs facing legal battles abroad, competent interpreters and lawyers.

“This is the reason Mary Jane Veloso remains in Indonesia’s death

row. This is the reason migrant workers get abducted from OFW shelters.

Clearly, DFA official are enriching themselves while doing a disservice to migrant workers,” she said.

Ilagan added that DFA officials who received excessive salaries in 2014 include Ambassador to China, Erlinda Basilio (P16.44 million); Ambassador to the United Kingdom, Enrique Manalo (P12.34 million); Ambassador to Austria, Lourdes Yparraguirre (P11.74 million), World Trade Organization Rep. Esteban Conejos (P10.7 million); Ambassador to Portugal, Philippe Lhuillier (P10.56 million); Consul General to Tokyo, Maria Teresa Taguiang (P10.91 million); Ambassador to Germany, Maria Cleofe Natividad (P9.86 million); Ambassador to Vatican, Mercedes Tuason (P9.7 million); Ambassador to United Arab Emirates, Grace Princesa (P9.6 million); Ambassador to Qatar, Cresente Relacion (P9.4 million); Ambassador to Belgium, Victoria Batacian (P9.1 million); Ambassador to Iran, Eduardo Menez (P9.1 million); and Philippine Permanent Representative to the United Nations in Geneva, Cecilia Rebong (P8.8 million).

Misleading

The Commission on Audit (COA) report, saying that several Philippine ambassadors were among the highest paid officials of the government, was misleading, a DFA statement released on Monday said.

The DFA said the salaries appears huge because the computation included the ambassadors’ rental fees of their residences while abroad.

“The Report on Salaries and Allowances [Rosa] for 2014 inaccurately indicates several Philippine ambassadors as among the highest paid officials of the Philippine government,” the statement said.

“Philippine ambassadors, like other members of the Philippine civil service, receive salaries that are based on the Salary Standardization law,” the statement added.

“Philippine ambassadors, however, are provided with official residences while they are assigned abroad. The rental fee for the official residence is paid by the Philippine government directly to the owner of the property and not to the personal account of an ambassador. The COA report computed these rental fees as part of the allowances of Philippine ambassadors, which is misleading.”

The DFA added that all allowances of Philippine ambassadors follow the UN Index System that is based on the living standards and economic conditions of countries where the Philippine government maintains embassies and consulates.

It was reported in the media last week that Philippine Ambassador to Beijing Basilio was the highest paid government official in 2014, based on the Rosa as released by the COA. With Recto Mercene

By Lenie Lectura

HE National Renewable Energy Board (NREB) on Monday said that there is a need to amend existing rules on feed-in tariff (FiT), as well as the Renewable Energy Act, if a policy of the Department of Energy (DOE) to auction off RE projects is pursued.

NR EB Chair man Pedro H. Maniego, in a text message, said that the DOE circular must be reconciled with the provisions of the Renewable Energy Act and the FiT rules on setting and granting the FiT rates.

Under the law, the Energy Regulatory Commission (ERC) is mandated to set the FiT rates, while the DOE is the lead implementing agency of the Renewable Energy Act. It also approves the FiT eligibilty of the Renewable Energy (RE) plants.

“However, power tariff and rate setting are under the authority of ERC,” said Maniego, while stressing that if auction is to be used to set the FiT rates, the rules must be changed.

“If the auction will be utilized to set the installation, but in so doing will affect the FiT rates to be granted to developers, then the rules must also be changed. Under the present rules approved by ERC, auction

mechanism is not one of the methods for determining and setting the FiT rates,” he said.

Under Depa r t ment Circ ular 2015-07-0014, the share of RE in the energy mix should be at least 30 percent. The renewable sources of power include solar, wind, biomass, ocean and hydro.

Based on 2014 DOE Power Statistics, 25.64 percent of the country’s total power generation are sourced from RE facilities or equivalent to installed generating capacity of about 32.87 percent of the country’s installed capacity.

“To maintain the share of RE in power generation, the DOE hereby adopts a policy of adopting at least 30-percent share of RE in the country’s total power-generation capacity through the holistic implementation of the FiT System and other pertinent provisions under the RE Act and RE

IRR [implementing rules and regulations],” the circular stated.

FiT is the per kilowatt-hour (kWh) rate guaranteed to RE developers to ensure the viability of their projects.

Consumers are the ones who shoulder this under FiT-Allowance (FiTAll), a separate line component in the power bills. They are now paying an additional P0.0406 per kWh since February this year.

To be sure that this policy is strictly enforced, the DOE will use the FIT installation targets: 250 megawatts (MW) for hydro; 250 MW for biomass, 400 MW for wind; 500 MW for solar, and 10 MW for ocean. When these targets are met, a bidding will take place.

“Upon the full subscription of the existing FiT installation target, the succeeding rounds for the installation targets for FiT-eligible resources shall be made through an auction system to be adopted by the DOE,” the circular, which takes effect 15 days upon its publication, stated.

The present system involves filling FiT allocation on a first come, first-served basis. When the slots are filled, the DOE will then adjust the quotas to accommodate more RE developers.

“We have to conduct consultation and coordinate with both DOE and ERC in view of the DOE circular recommending a 30-percent minimum share of RE in the total powergeneration capacity and an auction mechanism for implementing the next round of FiT,” Maniego added.

PNR rehab on track

The Philippine National Railways continues the rehabilitation of its facilities by replacing the old hardwood sleepers of its rail tracks with concrete metal to ensure the safety and convenience of train commuters. The state-run firm resumed its train service between the Tutuban Station in Divisoria, Manila, and Alabang, Muntinlupa City, last month following a two-month suspension since May due to the derailment of one of its trains near the Magallanes Station in Makati City. PNA

briefs d.o.t.c. to hold prebid conference for lrt 2 o&m deal A prebid conference for the Light Rail Transit (LRT) Line 2 operations and maintenance (O&M) public-private partnership (PPP) project is scheduled this week.

According to the PPP Center, the prebid conference will be held at the International Finance Corp. office in Taguig City on Wednesday.

The Department of Transportation and Communications (DOTC) has, meanwhile, invited prequalified bidders to attend the conference.

Meetings with the prequalified bidders for the project will take place from Wednesday to Friday.

To date, prequalified bidders for the project are Aboitiz —SMRT Transport Solutions consortium, DM Consunji Inc.—Tokyo Metro Co.; Ltd. Consortium; Light Rail Manila Holdings 2 Inc. (which is composed of Ayala Corp., Metro Pacific Investments Corp., RATP TRANSDEV Asia, and RATP Development SA); and San Miguel Corp.—Korail consortium.

Under the contract, the winning bidder is expected to undertake the operation and maintenance of the existing LRT Line 2, the 4.14-kilometer East Extension, and any other future extensions implemented by the government during the project’s term.

The project will have a cooperation period covering 10 to 15 years.

Submission of bid proposals for the project is on November. PNA

miaa honors 35 airport workers for honesty

The Manila International Airport Authority (Miaa) honored 35 airport workers for practicing honesty in their work during a flag-raising ceremony on Monday.

Included in the commendation ceremony was Ninoy Aquino International Airport (Naia) Terminal 1 pushcart retriever Porferio Lavado, who returned cash amounting to P120,000 early last month.

Recognition is given to its employees for, among others, reporting lost cash or valuable items found within the premises of the Naia.

It is estimated that about a hundred Naia employees were honored in the past for their honesty and dedication to work.

It is customary to hold a commendation ceremony for outstanding airport personnel. They are given certificates during the monthly flag-raising ceremony where all employees are gathered. They are also given a complimentary breakfast buffet with the general manager’s office footing the bill, according to the airport's public information office.

Miaa chief Jose Angel Honrado likened the honest workers to that of a mirror.

He said that their good qualities reflect the ideal dedicated service which the airport strives for.

“Every morning we look at the mirror just to check if we still look as good as on Monday. Honest employees are constant reminders that the culture of service and excellence at the airport lives on,” Honrado said.

He encouraged the employees to serve as an inspiration for others to follow in their footsteps. Recto Mercene

Economy BusinessMirror

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briefs oil firms slash fuel pump prices anew

Local pump prices went down anew, reflecting the continued downward movements in the prices of petroleum products in the international market.

For the seventh consecutive week, oil firms slashed the prices of diesel, kerosene and gasoline effective on Tuesday On Monday morning Pilipinas Shell, Phoenix Petroleum and Seaoil separately said they would bring down the price of gasoline by P0.40 per liter, P0.70 per liter for kerosene and P0.90 per liter for diesel.

Flying V, meanwhile, would implement a price rollback of P0.30 per liter for gasoline, P0.75 per liter for kerosene and P0.90 per liter for biodiesel.

Other oil firms are expected to follow suit.

“World oil prices continue to be low owing to the oversupply situation of petroleum products in the world oil market. And while analysts have earlier indicated that prices may remain stable at low levels up to August 2015, September prices are seen to be on the uptrend. But motorists can rest assured that Eastern Petroleum’s pump prices will be reflective of world oil prices” Eastern Petroleum Chairman Fernando Martinez said.

The Department of Energy (DOE) said crude -oil prices continued its downtrend in view of the rising US crude inventory, the Iranian nuclear deal with the West, Organization of the Petroleum Exporting Countries’s production stance, oil surplus, US dollar strength, and drilling activity. Lenie Lectura

alzona replaces ledesma as psalm president, ceo MALACAÑANG has appointed Lourdes S. Alzona, officer in charge of the Power Sector Assets and Liabilities Management (PSALM) Corp., as the state firm’s concurrent president and chief executive officer (CEO).

In a letter dated July 30, President Aquino appointed Alzona as the replacement of Emmanuel R. Ledesma Jr. “for the unexpired term of office that began on July 1, 2015 and will end on June 30, 2016.”

Following the presidential appointment, the PSALM board then elected Alzona as the PSALM president and CEO during its meeting on Monday.

With the appointment, Alzona becomes the sixth chief executive of PSALM, succeeding previous appointees Edgardo M. del Fonso, Raphael Perpetuo M. Lotilla, Nieves L. Osorio, Jose C. Ibazeta and Ledesma. After Osorio, she is also the second woman to assume the position.

Alzona, a certified public accountant and a Business Administration graduate from the Philippine Women’s University, has been in public service for 33 years.

Prior to joining PSALM, Alzona was with the National Power Corp. for more than 20 years. Lenie Lectura

Ports ready for expected cargo surge after revision of Cabotage law–PPA

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By Lorenz S. Marasigan

EAPORTS controlled by the Philippine Ports Authority (PPA) can accommodate the expected spike in cargo volume brought about by the amendment of the decades-old Cabotage law.

This was the assurance of PPA General Manager Juan C. Sta. Ana, who said the state-owned agency has been improving the capacity and capability of Philippine ports in anticipation of the implementation of the Asean Economic Community at the start of next year.

Those measures, somehow, help the state-owned agency adjust easily in the amendment to the Cabotage law, he added.

“Philippine ports are ready even prior to the signing of the law relaxing the country’s Cabotage law,” he said. “The major gateways have long been capable of handling bigger ships and our secondary gateways are being improved to handle inter-

Mark the spot

Workers of D.M. Consunji Inc. place concrete barriers to mark the construction perimeter of the Light Rail Transit Line 2 along Marcos Highway from Santolan, Pasig City to Masinag, Antipolo City, on Sunday. The P2.27-billion project is scheduled for completion by September 2016. PNA

Operator of new bus airport service needs to shell out at least P420-M fresh investment

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h e b u s c o mp a n y t h at will win the bidding for the franchise to operate premium airport bus services in Manila is required to invest roughly P420 million to provide such transport service.

The investment, Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Winston M. Ginez said, will be used to purchase premium bus units that will be equipped with technologies that will enhance the bus riding experience to and from the airport in the capital.

The agency launched the bidding for the contract earlier this year.

According to Ginez, there were “several interested applicants and corporations” that submitted their legal, financial and technical qualification documents during the deal’s prequalification activities on Monday.

Only one qualified applicant will be selected to apply for franchise to operate more than 40 units of modern airport buses equipped with onboard CCTV, WiFi, onboard automated bus arrival electronic display and announcement system.

“The opening and evaluation of the legal, financial and technical capability of the participants is the first step to determine who will qualify to provide the premium airport bus service,” Ginez said.

The agency will announce the selected participant on August 10.

The LTFRB has identified two airport bus routes. The first is the

24-kilometer Ninoy Aquino International Airport (Naia)-Roxas Boulevard area including Mall of Asia and Entertainment City, and the 18-km Naia-Makati Central Business District route.

Each route will have two subroutes, with one serving Naia Terminal 1 and 2 and the other serving Naia Terminal 3. Each route variant and subroute will have no more than five stops, all within the “target zone” to ensure efficient travel times for passengers.

“Ang additional na transport means na maibibigay ng airport bus services ay magdudulot ng malaking ginhawa at tulong sa ating mga kababayan na patutungo sa ating mga paliparan,” Ginez said.

Under the terms of the contract, the winning bidder will provide up to 42 airport bus units with 24-passenger seating capacity that will operate from 4 in the morning to 12 midnight and can only pick up passengers on designated off-street stops.

The company will also be required to set up booking offices in off-street stops and airport terminals to allow passengers conveniently and easily purchase tickets.

Authorized airport taxi services currently provide transport service to airline passengers in the three terminals but with the increasing number of tourist arrival particularly on peak travel months, there is a need to offer travellers alternate and convenient transport mode.

Lorenz S. Marasigan

Tuesday, August 4, 2015 A5

Senate passes bill seeking to improve Pinoy competency

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he Senate on Monday approved on third and final reading a bill seeking to improve the competence of Filipino professionals.

Voting 15-0, the Senate approved Senate Bill 2581, also known as the “Continuing Professional Development Act of 2015,” requiring the professionals to take additional formal and nonformal learning before they can renew their professional identification cards and licenses.

Sen. Antonio Trillanes IV, chairman of the Committee on Civil Service and Government Reorganization and sponsor of the bill, proposed to strengthen government efforts toward the continuing professional development (CPD) of all regulated professions in the country.

“CPD is the post-licensure practice of inculcating skills, knowledge and ethical values upon all professionals through various methods, such as formal learning, informal learning, self-directed learning, online learning activities and accredited professional work experience,” Trillanes said.

Senate President Franklin M. Drilon said the bill would go a long way “in strengthening the Filipino work force and producing highly competent professionals, who are considered as our country’s “best asset due to their leading role in national growth and prosperity.”

Once enacted into law, he said, all government agencies and private firms and organizations employing professionals would be required to include CPD as part of their human-resource development plan and program. PNA

STA. ANA: “Our ports will not have a hard time adjusting to expected influx of vessels and cargoes in the different ports.”

national vessels.”

The port chief, however, noted that the effect of the sweetening of the Cabotage law will not immediately trickle down to port operations.

“Our ports will not have a hard time adjusting to expected influx of vessels and cargoes in the different

ports,” Sta. Ana said.

Currently, there are 10 major Philippine gateways where foreign-flagged ships dock, like the Manila International Container Terminal, the Manila South Harbor and the Manila North Harbor in Manila; Port of Batangas; Port of Davao; Makar Wharf in General Santos; and the ports of Iloilo Zamboanga, Ozamiz and Cagayan de Oro. Other government ports where ships call include Cebu and Subic Bay. These ports handle about 90 percent of the total cargo movement in and out of the Philippines, while the Manila ports corner about 85 percent of the percentage. The remaining 10 percent is scattered in other private ports like the Manila Harbour Centre.

President Aquino signed last month the Foreign Ships Co-Loading Act, amending the 50-year-old Cabotage law.

In a nutshell, the law frees up the strains on foreign operations in the country. It allows ships from other nations to dock in multiple ports in the Philippines.

The law is seen to cut logistics costs, improve the efficiency of the import and export system, and lower costs of consumer goods.

Philippine cargo volume rose modestly in the first four months of the year, anchored on strong foreign container cargo—specifically exports—and healthier domestic cargo volume.

Total volume reached 66.60 million metric tons (mmt), higher by 6.34 percent from 62.63 mmt posted in the same period of 2014.

Domestic cargoes registered a 6.87-percent hike to 27.75 mmt from only 25.97 mmt in the January to April 2014 period.

Foreign cargo volume increased by 5.97 percent to 38.85 mmt from 36.66 mmt a year ago.

Import volume rose by 7.69 percent to 22.21 mmt from 20.63 mmt in 2014, while export volume inched up by 3.75 percent to 16.63 mmt compared to the 16.03 mmt posted last year.

The North Harbor is the top performer in terms of cargo volume with a share of 8.19 mmt of the total cargo volume nationwide, followed by Batangas with 7.79 mmt, Bataan/Aurora with 6.15 mmt and Davao 4.14 mmt.

Private ports handled 41.21 mmt, or 57.38 percent, of the total cargo volume nationwide, while government ports accounted for 25.39 mmt or 42.62 percent.

A6 Tuesday, August 4, 2015

Opinion BusinessMirror

editorial

Malaysia has a problem– but not the Philippines

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oreign-exchange reserves—or gross international reserves (GIR), as most commonly called in the Philippines—are assets held by the Bangko Sentral ng Pilipinas (BSP) not denominated in Philippine pesos. The foreign-currency component is primarily US dollars, but it can also be other currencies.

When reporting the total GIR, most recently at a value of $80.76 billion, media and politicians—especially politicians—tend to think of it as a petty cash kept in a metal box. But $70.78 billion of the total amount are investment placements, such as ownership of other government’s debt. Gold holdings, both physical and paper, amount to $7.4 billion, and physical foreign currency is $980 million.

Foreign currency is collected by the BSP as it exchanges Philippine pesos for the foreign currency when money comes in from remittances, tourism receipts, export earnings and the like. The BSP also exchanges the foreign currency for pesos as importers pay for goods and other purposes requiring the public and private sector to use foreign currency. The GIR is also used by the BSP to buy and sell the peso to keep the foreign-exchange rate stable.

Because the BSP is a quasi-government agency, there are calls that the GIR should be used for other purposes, such as government spending. But that money does not belong to the government and must be kept away from the hands of politicians. When politicians start playing with the central bank functions, what follows are usually economic disasters, like what happened in Venezuela.

Our GIR has been steady at around $80 billion since 2012, but it was not always that way. The GIR stayed at around $40 billion from 1996 to 2006, when it started increasing. It was almost a straight-line trend until 2013.

Malaysia has had problems with maintaining the stability of its GIR since 1997. Its policy of trying to keep an artificial hold on the exchange rate of the Malaysian ringgit at the level of 3.8 to one dollar has forced the Bank Negara Malaysia to deplete GIR to support the currency. It is happening again, as Malaysia’s GIR is poised to fall below the desired level of $100 billion. By doing the same thing in 2008, it caused its reserves to fall from $90 billion to $50 billion in two years.

Any government can try to suppress free-market determined prices. But if you do this, you better have the currency ammunition to back up your actions.

Despite spending about $20 billion in currency support, Malaysia failed to arrest the ringgit’s depreciation last year, which saw the worst decrease among Southeast Asian currencies. Partly as a result, Malaysian government debt is considered more risky than either Thailand or the Philippines.

The probability of an increasingly strong US dollar in the months to come requires the complete independence of the BSP. Trying to control the currencyexchange rate is more of a political decision than an economic one. What is economically crucial is that the movement of the peso be gradual and not volatile. Unlike in Malaysia, the BSP has the situation under proper management without depleting our currency reserves.

BUSINESSMIRROR 08042015

A businessman’s take on the economy Manny B. Villar

THE Entrepreneur Third of a series

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here was a time when high-income Filipino consumers could go only to Rustan’s to buy international brands of perfume, jewelry, clothing and other personal items, as well as kitchen and dining utensils. Later on, duty-free shops provided a limited alternative.

Today, global brands are competing with locally produced consumer items, and luxury items have become affordable to more Filipinos, as the middle class expands.

I mentioned last week A.T. Kearney’s observation about modern retailers making headway in the domestic retail market. The firm, which included the Philippines among the 30 countries in its 2014 Global Retail Development Index (GRDI), named global brands that entered the local market in 2013: clothing seller American Eagle Outfitters, international jeweler Claire’s, Korean bakery Tous Les Jours, Japanese conveniencestore chain FamilyMart, and Hong Kong supermarket Wellcome.

In June local media carried the results of a study conducted by property consultant CBRE, which included Manila (actually, Metro Manila) among the most preferred destinations for the expansion

of global brands. The study ranked Manila 13th among the top 15 target cities, with 24 new global retail brands coming into the country this year. Manila joined Tokyo, Singapore, Abu Dhabi, Taipei, Dubai, Istanbul, Doha, Beijing, Hong Kong, Toronto, Berlin, Stuttgart, Moscow and Paris in the top 15 list.

In its market view report for the first quarter of 2015, CBRE cited the robust economy and strong purchasing power of local consumers as the main factors that encourage global retail brands to invest in the country.

The firm expects the retail business to stay profitable for the rest of the year as the economy continues to grow, driven by higher consumer spending.

Thus, international food brands Burgoo and Coffee Bean expanded their presence with the opening of new stores at Starmall Prima in Taguig. Gap set up additional stores at Shangri-La Mall

Political party time John Mangun

OUTSIDE THE BOX

‘W

hom the gods would destroy, they first make mad” is spoken by Prometheus in Henry Wadsworth Longfellow’s poem “The Masque of Pandora” (1875).

The tone of the 2016 presidential campaign, and perhaps even the outcome, may very well be determined in the next 45 days.

I have been feeling lately like I am sitting next to a guy on the Titanic with a glass of champagne in one hand and wearing a party hat who turns and says, “It’s only a chunk of ice. The ship is unsinkable and everyone in charge knows exactly what they are doing.”

What we are hearing from the government as embodied in the State of the Nation Address (Sona) is like what was probably written in the Titanic’s daily ship newspaper up to the moment it hit the iceberg. The end of September is going to mark a change in trend and an end to the current global economic phase. I was convinced that this would not seriously damage the Philippine economy and that it would even present some good opportunities.

Unfortunately, I was not smart enough to anticipate that the government and the country’s vast political leadership intended to go on a yearlong miting de avance, perhaps complete with champagne and party hats.

But it is not just the political class that has turned off on the economy.

When we read newspaper editorials questioning why President Aquino gave his Sona in Filipino rather than English and another titled “The anointing”—a term usually reserved for royalty and religious messiahs—Prometheus may have been right.

By the end of August, the secondquarter economic numbers are supposed to be released. If the Philippine economy has regained at least some of the strength it lost in the last two reports of end-2014 and first quarter 2015, well and good. I will then attribute my pessimism to old age and falling hair.

and Fairview Terraces. At the UP Town Center, the global brands that have set up shop included Sbarro, Pepper Lunch, Ramen Nagi, Penguin, Sperry, Onitsuka and Stansbury. Melco Crown has brought Porsche Design, Rolex, Stuart Weitzman and Linda Farrow into the casino operator’s City of Dreams Manila.

Rustan’s, of course, still maintains one of the largest, if not the largest, collection of luxury global brands, including Marc Jacobs, Salvatore Ferragamo, Prada, Louis Vuitton, Gucci and Bottega Venetta, among others.

Rustan’s saw the expansion of the local market for luxury goods as early as 1988, when it established Stores Specialists Inc. (SSI) to acquire and develop exclusive franchises for top global brands.

SSI expanded the market for luxury brands by taking them outside department stores. The company opened boutique stores for each brand, which allowed designer brands to present their unique image and reach a wider market.

SSI now has more than 45 international franchises in its portfolio.

Rustan’s Coffee Corp. acquired in 1997 the local license for the Starbucks coffee shop, which paved the way for the development of the coffee shop as a new segment of the retail market. It also provided a boost to coffee farming in the country.

Global property portal Lamudi Philippines says local retailers are also bringing in international fashion brands. It cites entries during the period 2012 to 2014, including Uniqlo, Bershka, Cotton On, Old Navy, American Eagle Outfitters, Aeropostale, and H&M, which opened its 3,000-square-meter flagship

store in SM Megamall in November 2014.

According to Lamudi, many global brands are opening outlets outside Metro Manila. Uniqlo, which is targeting 50 stores by the end of 2015, now has 11 branches, including those in Cavite, Lipa and Pampanga. The Japanese clothing brand will establish its presence in the Visayas market with the opening of two stores at the SM City Cebu and SM Seaside City Cebu by the fourth quarter of this year. Cosco Capital Inc. has secured sites for 20 Lawson convenience stores.

Lawson is a partnership between Cosco and Japan’s Lawson Asia Pacific Inc. The joint venture is targeting a total of 50 stores this year.

In addition, Cosco expects to open five S&R New York-Style Pizza parlors, also this year.

Cosco’s subsidiary Puregold Price Club Inc. has partnered with Ayala Land Inc. to launch Merkado, a new supermarket brand. The joint venture, Ayagold, plans to open eight to 10 branches in the next three to four years, mostly in Metro Manila. Merkado is targeting the middleincome market, and the first branches will be inside Ayala’s malls.

As shown by the entry of Starbucks, which encouraged the entry of other global coffee-shop brands and the birth of homegrown brands, like Figaro and The Coffee Project, the entry of global brands provide additional fuel to drive the explosion of the retail industry.

However, if the gross domestic product (GDP) growth numbers are disappointing, then the announced and prospective presidential candidates would be forced to do something they are not used to doing; presenting a real plan and not just “motherhood statements” to deal with the economy.

The global economy’s negative shift by the end of September that I keep whining about has already started. While it may take months for the Philippine government to put its economic data together, others are not so slow. For the second quarter of 2015, Singapore reported a 4.6-percent quarter-on-quarter economic contraction and a year-on-year growth of a smaller-than-expected 1.7percent increase versus a forecast for a 2.4-percent rise.

But Singapore is not alone in showing some potentially severe economic problems. The Malaysian ringgit just hit a 17-year low against the US dollar. Brazil is ready to report that it is officially in a recession. That country’s retail sales growth just went negative for the first time since 2003. Japan has shown four quarters of negative quarter-on-quarter growth. Taiwan reported the slowest quarterly growth in three years. South Korea’s second-quarter GDP growth was its worst in over six years.

Russia, Canada, Switzerland, Finland and Indonesia all reported that their economies shrank in the last reporting period. Denmark, Israel, Belgium,

Germany, Norway and Austria have reported less than 0.50-percent quarterly growth. These are not countries you usually find in the list of economic losers.

Regardless of what the government may be saying about the continuing strength of the Philippine economy and that the best is yet to come, money is not coming into the country like before. The current account—payment inflows like remittances versus payments going out, like for foreign debt and exports—is positive. But the capital flow is trending lower from its 2013 high of a positive $16 billion and it is accelerating. The current capital flow is a positive $8 billion and was at $10 billion in 2014.

We are seeing this in the massive liquidation of foreign money from the stock market in the last six months and in the peso’s declining exchange rate. Foreign direct investment is at the same amount as in 2011 and in 2007, and is trending lower from the 2012 high.

Even the government admits that public spending is not properly supporting the economy, and we should wait until 2016 for things to really improve.

In the meantime, it looks like it is going to be political party time.

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

E-mail me at mangun@gmail.com.

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

A few more pennies won’t perk up Japan William Pesek

BLOOMBERG VIEW

H

ere’s one for the Freakonomics guys: Why aren’t Japan’s drum-tight labor markets leading to higher wages and inflation?

When Prime Minister Shinzo Abe embarked on one of modern history’s most audacious economic revival efforts, conventional wisdom held that Japan’s sub-4-percent unemployment (it’s now 3.3 percent) would aid the cause. Labor scarcity should in theory force Japan’s cashrich companies to raise wages, at least according to what economists call Nairu, the non-accelerating inflation rate of unemployment. Well, 31 months into Abenomics, Japan has blown that theory all to hell.

Pay adjusted for inflation hasn’t risen for 25 months, while household spending has dropped in 14 of the past 15 months, down 2 percent from a year earlier in June alone. Consumer prices excluding fresh food are essentially flat, up just 0.1 percent in June, despite the Bank of Japan’s (BOJ) titanic stimulus program and the lowest productivity among the Group of Seven nations.

What gives? Dismal demographics deserve some of the blame. An aging and declining population robs the BOJ of the cyclical jump in inflation it’s trying to engineer. But the real problem is government timidity.

Consider this: To help boost wages, Abe’s team last week suggested that companies raise the minimum hourly wage by all of ¥18. It’s currently ¥780, or about $6.30.

On July 29, Abe’s chief cabinet secretary, Yoshihide Suga, declared that Japan needed “bold”’ pay hikes to stimulate growth and endorsed the ¥18 boost. With the current hourly wage about enough to buy a beer at a run-of-the-mill pub, the increase would only buy another after more than 43 hours on the job.

It’s going to take a lot more than that to prod companies to hike wages.

Clearly, Abe bet badly on Japan Inc.’s willingness to share the spoils of the yen’s 35-percent plunge since late 2012. Corporate chieftains, who are sitting on roughly $2 trillion of cash, have continued to hoard earnings for 26 straight quarters now. Capital expenditure, meanwhile, remains below levels seen before the 2008 global crisis.

This isn’t just greed. Companies are waiting for Abe to implement the supply-side reforms needed to hasten growth in the years ahead.

Ironically, in many areas, Abe hasn’t shied away from daring and controversial policies: reinterpreting the pacifist constitution to expand Japan’s military role; passing a statesecrets law that could put journalists and whistleblowers in jail; raising sales taxes amid deflation. Joining the US-led Trans-Pacific Partnership talks pits Abe’s Liberal Democratic Party against the farmers on which it relies for support.

But when it comes to the really

Clearly, Abe bet badly on Japan Inc.’s willingness to share the spoils of the yen’s 35-percent plunge since late 2012. Corporate chieftains, who are sitting on roughly $2 trillion of cash, have continued to hoard earnings for 26 straight quarters now.

Capital expenditure, meanwhile, remains below levels seen before the 2008 global crisis. important structural reforms needed to enliven growth—loosening labor markets, reducing regulations, encouraging start-ups, empowering women, developing a new energy policy—Abe has been a study in hesitancy. This lack of urgency is dimming Japan’s outlook.

The International Monetary Fund warns that by 2018, growth could be even weaker than during the darkest years of Japan’s deflation era (2000 to 2012). Expectations for 0.65-percent growth from 2018 to 2020 mean Tokyo’s plan to grow its way out of the world’s biggest debt budget will require serious revision.

Japan may have contracted in the second quarter.

Even Abe’s successes require asterisks. The weak yen, for example, is hurting small companies as import costs skyrocket. Worthy efforts to tighten corporate governance are faltering in implementation. The new JPX-Nikkei Index meant to showcase Japan’s 400 best-run companies just added Tokyo Electric Power, the utility behind Fukushima, the worst nuclear disaster since Chernobyl. Tepco joins Toshiba, which is embroiled in a $1.2-billion accounting scandal.

To regain momentum, Abe needs to tap into the audacity he’s displayed elsewhere. Giving his structural upgrades a reboot would offer companies such as Toyota and Sony a reason to boost wages far more than ¥18 an hour. At the same time, Abe should be calling executives on their stinginess—publicly naming and shaming them. What’s more, he should tax excessive cash hoards and offer incentives to companies that convert low-paid part-time workers to fulltime status.

After all, the more companies invest in workers, increased productivity and new markets, the quicker Japan will grow and the fatter their profits will be. Abe has spent 31 months waiting for CEOs to do the right thing. It’s time to put them, and Japan’s tight labor markets, to work.

Workforce 2020 Edgardo J. Angara

A

recent Workforce 2020 report by Oxford Economics warned of a looming talent crisis, finding that many businesses lack the office culture to prepare for the “future of work” and hence, are unable to strategize how they should develop their work force accordingly.

Today, companies are scrambling to manage a more globalized and diverse office environment.

They are hard-pressed to harmonize their office policies with the skill sets, work habits and career expectations of five different generations—from aging baby

boomers to tech-savvy millennials.

Either way, retaining talent remains a key management issue. And competitive salaries, the report says, is still the top consideration of employees—across all ages—for staying with a job or not.

Interestingly, employees are

Is delicadeza dead?

Ernesto M. Hilario

ABOUT TOWN

D

elicadeza is a Spanish term that defies easy definition. It could mean proper decorum. Or strict adherence to what’s right, moral or ethical. Perhaps it can be better understood by saying that those who don’t have it—walang delicadeza—are “makapal ang mukha,” or thick-faced. But whatever it is, very few among our public officials appear neither ready nor willing to abide by it.

Delicadeza was the very term used by Sen. Chiz Escudero when he resigned last week as chairman of the Senate Committee on Finance and as cochairman of the Joint Congressional Oversight Committee on Public Expenditures.

Here’s what he said in his letter of resignation addressed to Senate President Franklin M. Drilon: “I believe that it behooves me to step down at this juncture to ensure that deliberations on the General Appropriations bill—considered the single most important piece of legislation passed by Congress each year—are untainted by suspicions or perceptions of partisan politics.”

“It is, Mr. President, what propriety requires; it is, I believe, what our people expect from us all: delicadeza,” the lawmaker said.

The lawmaker pointed out that speculation regarding his possible candidacy for higher office in 2016 prompted him to give up the two powerful finance panels and spare the budget deliberations from possible misperception that he could use it to advance his political plans.

At the same time, Escudero thanked the Senate President for entrusting him the responsibility of ensuring that the Senate performs its duty of overseeing the Executive department’s judicious use of public funds.

The senator’s move is laudable in light of the Supreme Court’s rulings on the Priority Development Assistance Fund and the Disbursement Acceleration Program, both of which, according to the political opposition and militant groups, had been misused by unscrupulous politicians.

During his term as head of the Senate finance committee, Escudero had moved to put in place adequate safeguards against the misuse of public funds.

Last week he said he would scrutinize to the last detail the allocation of every agency under the P3-trillion proposed General Appropriations Act for 2016.

In resigning his two powerful positions in the legislature to forestall any suspicion of wrongdoing in the use of taxpayers’ money, Escudero has given the public a deeper insight on what delicadeza really means.

If delicadeza has become a very rare attribute among Filipino politicians, it is good to know that there are still exceptions to the general rule.

How to attract more foreign investments

House Speaker Feliciano Belmonte Jr. is the main author of Resolution of Both Houses 1 seeking to amend the Constitution by lifting its restrictive economic provisions. This will be done through the simple expedient of adding the phrase, “unless otherwise provided by law” to seven economic provisions. Thus, Congress can proceed to revise the 60-40 provision limiting foreign ownership in the economy to no more than 40 percent, with Filipinos assured of 60 percent.

Changing the economic provisions of the Constitution has apparently been gaining headway among the business sector, as well as in academe.

Last month a conference organized by the private think tank Stratbase through its research arm,

Tuesday, August 4, 2015

becoming more concerned about their positions changing or becoming obsolete than being laid off. They want to keep abreast of the latest developments and technological innovations in their respective fields. In other words, they want to continue learning even while working.

However, only 37 percent of AsiaPacific companies said they were “learning organizations,” indicating that many do not see continuous learning and employee development as a vital business strategy.

Many firms reported difficulty with finding employees with base-level skills, but are reportedly investing very little in implementing in-house trainings. This indicates that the company of the future needs to foster closer ties with educational institutions and

become a meaningful partner in lifelong learning.

The future work force (and hence the future company) will also be very flexible. Traditional employeremployee relations are fast giving way to short-term, intermittent and consultancy arrangements. Up to 83 percent of the executives surveyed said that they plan to enlist more of such “flexible” employees in the next three years.

These insights have important implications, especially when technological innovation and social change are fast transforming the world of work. Firms and organizations, along with Philippine labor laws and regulations, need to anticipate such inevitable changes and keep up with the times.

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

the Alberto del Rosario Institute, discussed Cha-cha, with the participants saying that the economic provisions of the fundamental law restricting foreign participation in the economy be amended.

They concluded that despite the better-than-expected growth of the economy in recent years and a series of investment-grade updates, the Philippines has been lagging behind our neighbors in attracting foreign investments.

University of the Philippines economics professor Ramon Clarete has opined that “we really are not friendly to foreign investors.” This, he said, is the result of confusing or incoherent government regulations on businesses and high or noncompetitive corporate tax rates, among other factors.

The same view is echoed by Philippine Institute for Development Studies President Gilbert Llanto. He noted that foreign investors are wary of putting their money here despite government efforts to attract foreign direct investments (FDI) through tax incentives and creation of special economic zones in various parts of the country.

For his part, Stratbase ADR Institute President Victor Andres Manhit said that although the World Economic Forum has recognized the Philippines as the “most improved country overall,” it still lags behind Asean neighbors Singapore, Malaysia, Indonesia and Thailand in competing for FDI. He suggests that “the country must bring its policy on foreign ownership to global standards, and relaxing the limitations on foreign ownership should be key among them.”

One of the framers of the 1987 Constitution, economist Bernardo Villegas, now concedes that the fundamental law does not give the country the flexibility to adapt to changing global conditions.

He said that “nationalist industrialization policies were responsible for the inward-looking, protectionist, and capital-intensive economic strategies that dragged the Philippines from being one of the most developed countries in East Asia in the fifties and sixties to the “sick man of Asia,” and this flaw was perpetuated by the 1987 Constitution with

its economic provisions that “unreasonably restrict FDI.” In fact, Bangko Sentral ng Pilipinas (BSP) figures indicate that cumulative FDI amounted to only $1.2 billion in the January-to-April period, representing a downtrend of almost half to 48.3 percent from $2.4 billion during the same period the previous year. The BSP also reported that equity placements posted a net inflow of $279 million during the same four months of 2015, down 50.5 percent from the year-ago’s $565 million.

Meanwhile, the Philippine Statistics Authority reported that investment pledges, registered by seven investment-promotion agencies, totaled just P96.5 billion in the January-to-March period, or 10 percent below the P107.4 billion worth of commitments in the same three months of 2014.

The World Investment Report 2015 of the United Nations Conference on Development and Trade revealed a 10-percent year-on-year increase in FDI inflows of $381 billion to East and Southeast Asia amid a global economic downturn. The report showed that the Philippines attracted $6 billion worth of foreign investments last year, compared to Singapore’s $68 billion, Indonesia’s $23 billion, Thailand’s $13 billion, Malaysia’s $11 billion and Vietnam’s $9 billion.

Foreign businessmen have been among the most vocal in saying that the Philippines should amend the protectionist economic provisions of the 1987 Constitution that have restricted the entry of foreign capital.

Executive Director Nabuo Fujii of the Japanese Chamber of Commerce and Industry of the Philippines Inc. has been quoted as saying that the rule limiting foreign ownership to only 40 percent is still “a wall for us.”

For his part, Director Ian Mansfield of the United Kingdom Trade and Investment has also decried the “60-40 rule and other potential barriers to investment.”

All this tells us one thing: Changing the economic provisions of the 1987 Constitution is an idea whose time has really come.

Watchdog groups quick to criticize IOC over Beijing in 2022

K

UALA LUMPUR, Malaysia —The Beijing bid delegation had no sooner finished their congratulatory hugs and handshakes after being awarded the 2022 Winter Olympics than criticism from human rights groups over the International Olympic Committee’s (IOC) decision began to pour in.

After a closer-than-expected 44-40 win in Friday’s ballot against Almaty, Kazakhstan, Beijing will become the first city to host a summer and winter games. And just like before and after the city was awarded the 2008 Summer Olympics, watchdog groups were highly critical.

“The IOC has sent the wrong

message to the wrong people at the wrong time,” the International Tibet Network said in a statement. “China wants the world to ignore its deteriorating human rights and be impressed by Chinese can-do pragmatism instead. That’s exactly what the IOC has done. The honor of a second Olympic Games is a propaganda gift to China when what it needs is a slap in the face.”

China claims Tibet has been part of its territory for centuries, but Tibetans say the Himalayan region was virtually independent until China occupied it in 1950. Beijing staged a crackdown on Tibetan protests ahead of the 2008 Summer Games.

“Many people will remember how Tibet campaigners made our presence felt in the run-up to 2008,” the International Tibet Network statement said. “We hope that positive change in Tibet in the next seven years will mean that we don’t have to use the Olympics to highlight Tibet’s cause again.”

The group also said it was planning a protest on Friday at IOC headquarters in Lausanne, Switzerland.

From New York, Human Rights Watch, which had also complained about human-rights abuses by both Beijing and Kazakhstan ahead of the vote, said the IOC had “tripped on a major human-rights hurdle.”

“The Olympic motto of ‘higher, faster and stronger’ is a perfect description of the Chinese government’s assault on civil society: more peaceful activists detained in record time, subject to far harsher treatment,” said Sophie Richardson, China director at Human Rights Watch.

In Hong Kong, city legislator Albert Ho, a lawyer and founding member of Hong Kong-based China Human Rights Lawyers Concern Group, said the decision suggested “the IOC has lost the spirit of the Olympics.”

“This gives Beijing the wrong signal that the whole world no longer cares about the human-rights situation in China...and this is the

A7

worst time to give Beijing such a signal,” said Ho, who demonstrated against last month’s mass arrest of human-rights lawyers by mainland Chinese authorities. If the IOC “had the wishful thinking that hosting the games may help bring about change, they need only to look back at 2008.

Then they can see how their wishful thinking proved to be totally wrong.

Beijing stepped up repressive measures in the lead-up to the games.”

Reporters Without Borders later issued a statement in which the Paris-based organization defending press freedom said it is “outraged” by the IOC’s decision.

“After the 2008 Beijing Summer

E-mail: ernhil@yahoo.com.

Olympics and the 2014 Sochi Winter olympics, today’s announcement shows that the IOC continues to support regimes that openly flout human rights and freedom of information,” it said. “Beijing will now be the world’s first city to host both a Summer and Winter Olympics although the Chinese authorities are pressing on with a major crackdown on journalists and bloggers. Reporters Without Borders is appalled that the IOC is so out of touch with the reality of the humanrights situation in China.”

China is ranked 176th out of 180 countries in the 2015 Reporters Without Borders press freedom index. AP

2nd Front Page BusinessMirror

A8 Tuesday, August 4, 2015

www.businessmirror.com.ph

House members vow to pass bill SM PRIME INCOME cutting individual income-tax rates ALMOST DOUBLED TO P18.7B IN H1

T

By Jovee Marie N. dela Cruz

here is still a good probability that the bill lowering individual income-tax rates will pass the House of Representatives this Congress, even if it was not included in President Aquino’s priority list, the chairman of the House Committee on Ways and Means said on Monday.

“[House] members are now very favorable [with the passage of the bill lowering individual tax rates].

We have finished the TWG [technical working group] and it is now at the committee proper. We will take up this matter, along with other pending bills on revenue generation. This way, we will churn out a revenue-neutral set of measures,” Liberal Party Rep. Romero S. Quimbo of Marikina, the panel chairman, said in text message. His panel will resume deliberations on the tax-reform measures soon.

Party-list Rep. Jonathan de la Cruz of Abakada earlier said the passage of the bill lowering individual tax rates will stimulate the economy, as “the bill would give working citizens more

buying power, which, in the end, would result in more consumption funds for business and other economic activities, which again would generate more government revenues.”

Party-list Rep. Terry Ridon of Kabataan said the tax-reform bill is a social-justice measure that can ease the burden of millions of workers around the country.

Party-list Rep. Antonio L. Tinio of ACT Teachers said the tax breaks for individuals, in the form of lower income tax, is one of the most effective measure to redistribute the gains of economic growth. Senior Deputy Minority Leader Rep. Neri J. Colmenares of Bayan Muna said even the Department of Finance (DOF) has admitted the country’s

tax bracket should be adjusted.

“The DOF admits that it is right that the P500,000, which is currently taxable by 32 percent, needs to be adjusted, considering that this amounts to P2.6 million today, according to NSO [National Statistics Office]. We are overtaxed,” Colmenares said.

Deputy Majority Leader and National Unity Party Rep. Magtanggol T. Gunigundo of Valenzuela, one of the principal authors of the measure in the lower chamber, said the bill, if enacted into law, will definitely reduce the number of Filipinos who do not pay taxes, as lower taxes mean higher level of compliance.

According to Quimbo, the lower chamber will pass the tax measure this December. This will give the bill a good chance of getting passed into law this 16th Congress, which is set to end in June next year.

The Palace said President Aquino would consider the long-pending tax-reform measure once Congress has approved it.

Quimbo said, “Like I’ve said before, the President has always been supportive of a new tax system that’s more responsive and fair to the ordinary taxpayer. I am, of course, happy that the Palace has confirmed it. Their wait will not be in vain.”

The panel’s TWG has recently approved the consolidated bill lowering

individual taxes.

Under the TWG-approved bill, individuals earning below P180,000 annually will be exempted from paying income tax. In the current setup, those earning P10,000 or less per month pay 5-percent income-tax.

The bill also reduces the incometax rate of those earning above P180,000 to 5 percent. The highest rate—at 30 percent—will be paid by those earning P1.1 million annually, he said. The Philippines has the second-highest individual income tax rate in the region at 32 percent, next to Thailand and Vietnam’s 35 percent, and the highest value-added tax at 12 percent, as the country’s current individual income-tax bracket has remained unchanged since 1997.

Quimbo admitted that the government stands to lose P92 billion annually should Congress approve the bills lowering individual income tax. To recover these revenue losses, Quimbo said Congress would also approve revenue-generating measures, such as the bills raising excise tax on fuel, the fiscal incentives rationalization bill, the proposed Tax Incentives Management and Transparency Act, Customs Modernization and Tariff Act and Rationalization of the Mining Fiscal Regime, as well as the bill imposing specific tax on sodas and other sweetened beverages.

By VG Cabuag

S

M Prime Holdings Inc. on Monday said its income forº the first half almost doubled from the same period last year as a result of one-time trading gains. Revenues grew at a single-digit rate.

The company said its income for the period reached P18.7 billion, or almost double from last year’s P9.8 billion. That figure, however, included one-time trading gains on securities.

Removing those gains, its income would have been at P11.2 billion, or only 15 percent higher, the company said.

Consolidated revenues grew by 8 percent to P35.9 billion for the period from P33.3 billion last year, mainly driven by the continued growth in rental revenues, as well as higher revenue recognition on completed projects of its real-estate business. “The strong financial performance is reflective of the benefits derived from a diversified property portfolio, as both rental and developmental incomes contributed to the overall performance of the company.

The sustained growth could be attributed to the consolidation of SM Prime,

which resulted in a strong balance sheet that allowed us to pursue all projects as planned. We are confident that we can sustain this growth in the long term,” SM Prime President Hans T. Sy said.

Rental revenues from retail and commercial spaces accounted for more than half of the consolidated revenues, recording a 10-percent gain to P19.4 billion, from P17.7 billion last year.

The growth in rental revenues was mainly driven by rising contribution from the new malls and the expansion of shopping spaces in existing malls in 2013 and 2014 that added a total gross floor area of 652,000 square meters.

Growth was also propelled by the increase in SM Prime’s office spaces, while same-store rental remained at 7 percent, sustaining the growth posted in 2014. SM Prime’s real-estate sales, which contributed 34 percent to consolidated revenues, went up by 3 percent to P12.3 billion from P11.9 billion in the same period last year. This allowed the group to post an 8-percent increase in net income from the group to P3 billion.

Ang files ₧1-B suit vs GMA execs continued from A1 Also named respondents in the complaint were Anna Teresa Gozon-Abrogar and Ismael Augusto S. Gozon of FLG Management Corp.; GMA stockholders Belinda G. Madrid; Ma. Erlinda G. Gana; Jaime Javier Gana; Florencia Gozon Tarriela; Edgar Tarriela; and Tricia T. Valderrama.

The Jimenez and Duavit families were not included in the complaint, as Menardo R. Jimenez Sr. and Gilberto R. Duavit Jr. have indicated their willingness to return Ang’s down payment.

In a letter addressed to Ang dated June 29, GMA’s counsel BGEPAL (Belo, Gozon, Elma, Parel, Asuncion and Lucila Law Office) said the Duavit group “has waived its participation in the retention of the P1-billion down payment and in any exercise of the rights and remedies reserved.”

Meanwhile, in a letter dated June 30, the Jimenez group said it has no interest in the P1 billion that Ang deposited as down payment under the name of Gozon.

The Jimenez group also said any portion of the P1-billion deposit that is due to them should be immediately returned to the buyer, and that they do not wish to engage Ang in any litigation that may arise in connection with the move to retain the deposit.

But in a June 29 letter sent to Ang, BGEPAL reiterated that the complainant allegedly breached his obligation under the terms of their negotiations, thus, Gozon will retain the down payment to answer for the latter’s causes of action against the buyer, including claims for actual or compensatory damages,

for opportunity to earn profit and for the cost and expenses.

Ang is currently the president and COO of diversified conglomerate San Miguel Corp.

“The respondents converted and misappropriated the P1 billion by refusing to return it to the complainant, despite demand and even though it is very clear that the transaction documentation were not agreed, concluded, finalized or executed within the exclusivity period, and that the sale shares closing will not happen,” Ang said.

“The position taken by the Gozon group that there is no obligation to return, which is contrary to the position of its fellow sellers, is a shallow and baseless excuse for the respondents to hold on to the money and misappropriate the same,” he pointed out.

In his complaint, Ang recounted that the groups of Gozon, Jimenez and Duavit agreed to negotiate for the purchase by the complainant of a 34-percent stake in GMA network from the sellers, with certain rights to participate in the management of the company.

It was recorded in the Term Sheet, or the Summary of Principal Terms and Conditions Relating to the Sale and Purchase of Equity Shares in GMA Network dated June 23, 2014, which was signed by Gozon, Jimenez Sr. and Jimenez Jr., Joel Jimenez and Gilberto Duavit Jr. The Term Sheet contains the obligation to negotiate in good faith during the exclusivity period on the sale of shares of the said company.

It also states that “the final terms of the transaction are subject to the terms of the definitive transaction documentation and final confirmation by the board of directors or

trustees of the major stockholders.”

With this, Under Clause 8 of the Term Sheet, Ang deposited P1 billion called the “down payment” with the sellers, through a manager’s check payable to Felipe L. Gozon, who shall hold the money in trust for the major shareholders.

“It was also expressly agreed that in the event the terms and conditions of the transaction documentation are not finalized and concluded by the parties within the exclusivity period, the down payment *shall be returned to the purchaser *not later than three working days from the expiration of the exclusivity period without need of any further notice or demand,” it states.

The exclusivity period was originally until April 20, 2014, and was extended until June 30, 2014. It was further extended by their mutual consent until it finally expired on November 15, 2014.

After the lapse of the period and the negotiation failed, Gozon did not return the P1 billion to Ang on November 19, 2014, as agreed upon, and instead continued to negotiate with Ang. Several months have passed and the negotiation did not materialize. Ang informed that he is constrained not to proceed with the transaction.

The Gozon group did not object and instead entered into another round of negotiations with Ang, and even provided Deed of Absolute Sale of Shares, indicating that they can sell their shares ahead of the Jimenez and Duavit group.

But, on June 22, a disclosure was made by GMA Network to the Philippine Stock Exchange that the major shareholder decided to terminate the sale transaction of the company with Ang.

Govt to restructure 4 delayed ODA projects . . .

the World Bank. This project will be restructured through an extension of the loan because of delays in the approval of the change in cost sharing to 10-percent loan and 90-percent national government grant.

The Arisp III project, meanwhile, is being implemented by the Department of Agrarian Reform (DAR) and also financed by Jica.

The Neda said the DAR requested for a four-month extension in the project implementation due to delays caused by limited manpower to handle remaining works of the central, regional and provincial levels.

“Said request underwent ICC Secretariat Review and was favorably endorsed to the DOF on April 24 , 2015,” the report stated. There

were 508 active ODA loan- or grantassisted programs and projects as of end-2014 in the ODA Portfolio with information on physical performance, of which 103 were physically completed, three were ahead of schedule, 228 were on-schedule and 78 were delayed.

Around 13 of 59 programs and projects funded by ODA loans were physically completed in 2014. Of the remaining 46 programs and projects, physical implementation of 11 projects was on schedule, two were ahead of schedule, while 33 were delayed.

Comparing the 2014 physical status of the 52 loan-assisted programs and projects which were carried over from 2013, some 31 had the same physical status, around 13

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were completed, five became worse off, and three had improved/better status in 2014.

For ODA grants, out of the 449 projects, there were 90 grants that were already completed, one was ahead, 217 were on schedule, 45 were behind schedule, one was canceled, and 95 had no disclosed information on physical status.

Meanwhile, a total of 13 actual problem projects were identified for priority monitoring and facilitation based on the Alert Mechanism of the Neda Monitoring and Evaluation Staff, from which 12 were identified to be in the Critical Stage (Alert Level II) for having implementation issues that remained unresolved for at least six months.