BusinessMirror August 13, 2015

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BSP INTERVENES ‘TO REIN IN EXCESS VOLATILITY’

Yuan drags down peso to 5-year low

INSIDE

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NATO, RUSSIA WAR GAMES FUEL RISK OF WAR The World BusinessMirror

B3-6 Thursday, August 13, 2015

Nato, Russia war games fuel risk of war, think tank warns

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RUSSELS—The increase in the scale and number of military ex exercises being undertaken by the North Atlantic Treaty Organization (Nato) and Russia is making armed conflict in Europe more likely, a think tank warned on Wednesday.

Ian Kearns, director of the London-based European Leadership Network (ELN), told the Associated Press that the war games “are contributing to a climate of mistrust” that have “on occasion become the

focal point for some quite close encounters between the Nato and Russian militaries.” Kearns is one of the co-authors of an ELN study, which looked in detail at two military exercises held this year by Russia and

Nato and found signs that “Russia is preparing for a conflict with Nato, and Nato is preparing for a possible confrontation with Russia.”

The exercises, according to the ELN, “can feed uncertainty” and heighten the risk of “dangerous military encounters.”

Relations between Russia and the West have been in the deep freeze since Russia’s annexation of Crimea from Ukraine last year. The ELN study said Nato plans approximately 270 exercises this year, while Russia has announced 4,000 drills at all levels.

The Russian exercise in March involved 80,000 personnel, while Nato’s Allied Shield in June mobilized 15,000 people from 19 Nato

countries and three partner states.

The ELN study said the exercises showed what each side views as its most vulnerable points: For Nato, it’s Poland and the Baltic states while for Russia, concerns are more numerous and include the Arctic, Crimea and border areas with Nato members Estonia and Latvia.

The ELN has formulated a few ideas to defuse tensions, including for governments to examine the need for more restraint in the size and scenarios of future exercises.

“History is full of examples of leaders who think they can keep control of events, and events have a habit of taking on a momentum and dynamic of their own,” Kearns said. AP

US intervenes in lawsuit over Palestinian terror attacks

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ASHINGTON—The Obama administration has intervened in a lawsuit over Palestinian terror attacks that have killed Americans, advising a judge that requiring a hefty bond payment in the case could financially destabilize the Palestinian government. The filing comes in a case in New York City, where a jury this year awarded $218.5 million to Americans affected by the attacks in a lawsuit brought against the Palestine Liberation Organization and the Palestinian Authority (PA).

That amount is automatically tripled under the Anti-Terrorism Act, lawyers have said.

By intervening, the government said it was trying to strike a balance between its support for the rights of terrorism victims to be compensated in court and concerns that a large bond imposed while the verdict is on appeal would weaken the legitimacy of the Palestinian Authority and undermine “several decades of US foreign policy.”

“Senior US officials have made clear to

other governments that if the PA were to collapse, we would be faced with a crisis that would not only impact the security of Israelis and Palestinians, but would potentially have ripple effects elsewhere in the region,” Deputy Secretary of State Antony Blinken said in a five-page sworn declaration filed on Monday in US District Court in Manhattan.

He said the loss of the PA’s governing powers would likely “fuel anger and frustration” and could lead to widespread violence in the West

Bank. The Justice Department filed a formal “statement of interest”in the case at the behest of the State Department, federal officials have said. Lawyers for the Palestinian Authority have argued that the group is effectively insolvent and have asked the judge, George Daniels, to waive the bond requirement. Gassan Baloul, a lawyer for the Palestinians, said on Tuesday that the defendants were studying the government’s filing and would respond at a hearing later this month. AP

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XFORD, Mississippi—A young Mississippi couple who are charged with attempting to join the Islamic State (IS) were ordered held without bail on Tuesday, pending federal grand jury action on the charges.

Tw e n t y - y e a r - o l d J a e l y n Delshaun Young and 22-year-old Muhammad “Mo” Dakhlalla, who were arrested at a local airport just before boarding a flight with tickets bound for Istanbul, went before a US Magistrate Judge on Tuesday in Oxford, Mississippi.

The judge denied bail, saying that even though the pair have never been in trouble with the law and have relatives willing to oversee their home confinement, their desire commit terrorism is “probably still there.”

Urging the court to keep the suspects in custody, Assistant US Attorney Clay Joyner likened them to Boston Marathon bomber Dzhokhar Tsarnaev, saying that like him, they could commit violence with knives, vehicles or homemade weapons.

“They don’t need a gun to do harm,” Joyner said. “They don’t need military training to do harm. What they need is a violent, extremist ideology, and that’s exactly what they have espoused.”

FBI agents arrested them at a Mississippi airport, filing criminal charges that both were attempting and conspiring to provide material support to a terrorist group, a federal crime punishable by up to 20 years in

B B C

HE local currency hit a new record low on Wednesday, as Asian currencies came tumbling down for the second day in a row after China devalued the yuan.

Couple charged in IS case ordered held without bail

IN this October 5, 2012, photo, Jaelyn Young, an honor student at Warren Central High School, poses for a photo in Vicksburg, Mississippi.

Young and another Mississippi resident were arrested on August 8, on charges that they were trying to travel abroad to join the Islamic State militant group. AP

prison and a fine of $250,000.

An FBI agent’s affidavit said both confessed their plans after their arrest. Defense attorneys declined to comment after the hearing, but told the court that the material didn’t prove either had committed a crime.

Court papers say both Young and Dakhlalla are US citizens.

The government says FBI agents began interacting online with Young in May about her desire to travel to Syria to join the group. It says her Twitter page said the only thing keeping her from traveling to Syria was her need to earn money. AP

Kerry, top Democratic senator spar on Iran nuke deal, sanctions

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ASHINGTON—Secretary of State John F. Kerry sparred on Tuesday with the lone Democratic senator to publicly oppose last month’s historic Iran nuclear deal, saying there was no way the US could prevent American allies from doing business with Tehran if Congress were to reject the agreement.

Speaking across town in New York, Sen. Chuck Schumer disagreed and suggested Washington still could force the world into isolating the Iranians until they make deeper nuclear concessions. The dispute goes to the heart of the questions that American lawmakers are considering as they prepare to vote on the nuclear accord.

If they were to shelve the deal—and override an expected presidential veto—they could severely complicate the Obama administration’s ability to honor its commitments to roll back economic sanctions on Iran. In exchange, Iran has agreed to a decade of tough restrictions on Iran’s nuclear program and a far more intrusive inspections regime. Republicans are almost universally opposed at this point.

Addressing a Reuters Newsmaker event in New York, Kerry took aim at those in Congress who say a better deal could still be reached. That argument would entail the US maintaining or increasing pressure on Iran by threatening foreign governments and businesses for trading with Tehran or buying Iranian oil, a strategy that both President Barack Obama and Republicans credit with drawing Iran into serious nuclear negotiations two years ago.

Now that the pact has been finalized, Kerry said such a heavyhanded approach was an option no longer.

“Are you kidding me?” he asked the crowd. “The United States is going to start sanctioning our allies and their banks and their businesses because we walked away from a deal? And we’re going to force them to do

Data from the Philippine Dealing System Holdings Corp. showed the peso closing Wednesday’s trade at 46.26 per dollar, shedding 33 cen-

IN this July 16 file photo, Sen. Charles Schumer, Democrat-New York, speaks during a hearing on Capitol Hill in Washington. The lone Democratic senator to publicly oppose President Barack Obama’s nuclear agreement with Iran said on Tuesday that even if the US backs away and other countries lift their sanctions, Iran still will feel “meaningful pressure” from the US penalties. AP

what we want them to do, even though they agreed to the deal we came to?”

Kerry warned of severe consequences for pursuing such an approach after the agreement has been accepted by Iran and fellow negotiating countries Britain, China, France, Germany and Russia—and endorsed by all 15 members of the UN Security Council.

He said that European governments could walk away from the US-led sanctions strategy against Russia, that the US and Israel would have no support for military action against Iran, if such action were necessary, and that the US dollar would lose its status as the reserve currency of the world.

The top American diplomat also challenged those who have criticized the length of the deal’s restrictions on Iranian enrichment of material that can be used in nuclear warheads and other elements of its program.

He suggested it was illegitimate to worry that Iran would be a “nuclear threshold nation”

in 15 years or 20 years, because it already is one today. “They became that while we had a policy of no enrichment,” he said, referencing the continued demand of Republicans and Israeli Prime Minister Benjamin Netanyahu.

If Congress were to vote down the deal, he said, the US would lose the moral high ground.

“We will have left Iran free to go do its program, without restraints, without inspections, w ithout knock ing dow n its stockpile, without knowing what they’re doing,” he said.

Echoing Kerry’s case, 36 retired generals and admirals released an open letter on Tuesday urging Congress to back the deal.

“Military action would be less effective than the deal, assuming it is fully implemented,” the letter said. “If the Iranians cheat, our advanced technology, intelligence and the inspections will reveal it, and US military options remain on the table. And if the deal is rejected by America, the Iranians could have a nuclear weapon within a year. The choice is that stark.” AP

WORLD

tavos lower than its closing rate of 45.93 per dollar on Tuesday.

Total traded volume on Wednesday also aggregated higher to

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| THURSDAY, AUGUST 13, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

TIGER’S MODEST GOAL?

TO GET

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HEBOYGAN, Wisconsin—Tiger Woods knows the concept of going through a transition, just not the numbers associated with this one.

His world ranking is No. 278. Throw out some of the past champions and the 20 club pros at the Professional Golfers’ Association (PGA) Championship, and his ranking is the worst of all but two players at Whistling Straits—Nick Taylor and Darren Clarke.

He has not won a tournament in two years, and he has only one top 10 on the PGA Tour since.

And while his winless streak in the majors is at 23 dating to the 2008 US Open, only once in the last six years has he gone into the final round within three shots or fewer of the lead. That was at Muirfield two years ago, and he closed with a 74 to finish five shots behind.

This is the new world of Woods at the majors.

Expectations are lower than ever.

There wasn’t a lot of talk about Woods winning the PGA Championship. His main theme was taking baby steps.

“I’m just trying to get better,” Woods said after playing nine holes with Davis Love III. “I’m just trying

to get up there where I can win tournaments, get my game organized so I can be consistent on a tournament basis where I’m going to give myself a chance to win each and every event I play in. That’s what I have done over most of my career. And I’d like to get to that point again where I could do it.”

Even if expectations are low, he is still Tiger Woods.

He had one of the largest galleries for a morning practice round at Whistling Straits, and he stopped to sign autographs heading to the next tee, which is unusual for him. Hundreds of fans stood below the steps of the media center when they saw Woods walk in, all of them holding flags for him to sign.

Woods, who turns 40 at the end of the year, made it clear at the Memorial (where he shot a career-high 85) that he was in this for the long haul. Different from past swing changes is that he is coping with what he keeps calling a “perfect storm” because the switch followed back surgery and recovery that cost him half the 2014 season.

Steve Stricker played with him two days at The Greenbrier Classic, where Woods tied for 32nd while posting his lowest 72-hole score (273) since his last win.

“He’s going through some down times,” Stricker said.

“It looks like he’s getting things pushed back into shape and he’s getting stronger and healthier. I’ve talked to him. He’s feeling better. And it’s just about getting that confidence level back, him settling on what he wants to do with his swing and going from there, and then that confidence level will come back.... I expect him to get it back and get it going again.”

Still, it’s odd for Woods to be at a major and attract so little attention.

The majors this year have been about Jordan Spieth, the Masters and US Open champion who missed by one shot a chance at the third leg of the Grand Slam at Saint Andrews. Still in play at Whistling Straits is a chance to sweep the US majors, which has never been done.

Rory McIlroy, the world’s No. 1 player, returns from an ankle injury that has kept him out since the US Open.

Dustin Johnson has had at least a share of the lead in four rounds at the majors this year and comes back to the course where a two-shot penalty on the final hole cost him a spot in the playoff.

Zach Johnson goes for back-to-back majors. Jason Day is trying to win his first after being in contention in the last two.

It’s a long list.

And at the moment, that list doesn’t include Woods.

The greatest player of his generation, at the moment, is an afterthought.

Woods was going through swing changes during his two previous trips to Whistling Straits—with Hank Haney in 2004 (tie for 24th) and he was just starting to work with Sean Foley in 2010 (tie for 28th). So it’s not as if he has positive memories from this course.

“Tiger’s game has been flat-lined for the last couple years, and we’re starting to see a sign here or there that he might be able to orchestrate something at Whistling Straits,” longtime friend Notah Begay III said. “But it’s not a golf course that particularly suits his eye or his game.”

Woods was in contention going into the weekend at his Quicken Loans National until fading badly, but it was a step. Barring a turnaround, this likely will be his last event of the season. He is at No. 186 in the FedEx Cup, and only the top 125 qualify for the playoffs.

“I’m not looking at it like that at all,” Woods said. “I’m just trying to get my game better for years to come.... I’m here now in this position, and as far as my tournament future, if I play well, I play well and I’ll play in more events. If I don’t, then I have more time to practice and get ready for the following events the next season.”

ANGEL YIN (left) shares medalist honors with Jennifer Hahn.

YIN AND HAHN

SHARE LEAD

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ORTLAND, Oregon—Angel Yin shot a five-under 67 on Tuesday to share medalist honors with Jennifer Hahn in the US Women’s Amateur at Portland Golf Club.

They topped the 64 qualifiers for match play.

The 16-year-old Yin, from Arcadia, California, had seven birdies and two bogeys to match Hahn at six-under 138. Yin lost to Eun-jeong Seong last month in the US Girls’ Junior final in Tulsa, Oklahoma.

“Confidence. Maybe momentum,” Yin said. “I didn’t play golf for three days after I went back home [from the Girls’ Junior], so I took a break, which is good.”

The 21-year-old Hahn, from Henderson, Nevada, had a 70. She’ll be a senior at Vanderbilt.

“Staying patient was a big factor,” Hahn said. “Ball-striking wasn’t as good as yesterday. I was kind of crooked off the tee, found myself in the rough a lot, hitting punch shots, but I gave myself the best chances to save or get up and down for par.”

Nelly Korda of Bradenton, Florida, broke the women’s course record with a 66 to tie for third with Australia’s Hannah Green at five under. The 17-year-old Korda, sister of Ladies Professional Golf Association Tour player Jessica Korda and daughter of former tennis player Petr Korda, birdied eight of the first 14 holes, but dropped strokes on her 16th and 17th holes.

“It was amazing,” Korda said. “I’ve never been eight

SINGAPORE DAY Singaporean Ambassador to the Philippines Kok Li Peng (center), Foreign

under par, the lowest score ([’ve ever] shot was seven under. To come one short of it is kind of a little sad, but I’m happy with how I played.”

Petr Korda caddied for his daughter.

The 18-year-old Green had a 68.

Defending champion Kristen Gillman, 17, of Austin, Texas, tied for ninth at two under after a 71.

The 15-year-old Seong, from South Korea, tied for 22nd at even par after a 70. Ellen Port, the oldest player in the field at 53, failed to qualify. The 2014 US Curtis Cup captain, from Saint Louis, followed her opening 77 with a 72. The youngest, 14-year-old Anne Chen of Sugar Land, Texas, also dropped out. She shot 82-78. AP

SPORTS

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Secretary Albert del Rosario (left) and Apostolic Nuncio to the Philippines Archbishop Guiseppe Pinto lead the ceremonial toast during the celebration of the 50th National Day of Singapore held at a Makati City hotel. ROY DOMINGO

Megaworld income rose 12% in H1 B VG C

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HE Department of Transportation and Communications (DOTC) aims to award the P171-billion North-South Commuter Railway-South Line deal two months before President Aquino bows out from office in June 2016.

In a bid bulletin, the agency said it aims to complete the tender process for the railway project in less than a year, with the bid submission date now scheduled for March 28.

Awarding should be a month after, or April 27, about two months before the President bids good-bye to his office in Malacañang.

The South Line of the larger $6.27-billion North-South Commut-

er Railway project aims to connect Manila to Matnog in Sorsogon. The winner of the deal will construct the 56km double-track commuter rail from Tutuban in Manila City to Calamba City in Laguna. It will also be in charge of the rehab of the existing 422-km Philippine National Railways (PNR) Mainline South long-haul line, which runs from Calamba City to Legaspi City.

It will also construct new singletrack long-haul lines from Legaspi City to Matnog, Sorsogon (117 km), and from Calamba City to Batangas City (58 km). The railway line, which was auctioned off under the PublicPrivate Partnership Program, will be completed by the fourth quarter of 2019.

S “R,” A

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BETTER TIGER WOODS (left) and Davis Love III putt on the first green during a practice round on Tuesday. AP

The Associated Press

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Dams’ stability beyond the 7.2 magnitude earthquake

BusinessMirror

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$1.102 billion.

The value of the peso on Wednesday, currencies traders said, was the local currency’s weakest in more than five years.

Not since July 23, 2010, when the exchange rate stood at 46.315 per dollar, had the peso been this weak.

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said the peso moved in tandem with generally weaker currencies in the region in reaction to China’s decision to devalue the yuan, also known as renminbi.

GOVT SEEKS TO AWARD P171B RAILWAY SOUTH LINE CONTRACT IN APRIL

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TIGER’S MODEST GOAL? TO GET BETTER Sports

Tiger Woods’s world ranking is No. 278. Throw out some of the past champions and the 20 club pros at the Professional Golfers’ Association Championship, and his ranking is the worst of all but two players at Whistling Straits—Nick Taylor and Darren Clarke.

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

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EGAWORLD Corp. on Wednesday said its income rose 12 percent in the first half of the year as a result of the aggressive expansion of its mixed-use communities.

The property-development arm of businessman Andrew L. Tan said its net income increased to P5.43 billion during the period from last year’s P4.82 billion, which excludes the P11.62-billion nonrecurring gains.

Consolidated core revenues,

PESO EXCHANGE RATES n US 45.8600

which include Global-Estate Resorts Inc., Empire East Land Holdings Inc. and Suntrust Properties Inc., amounted to P20.93 billion for the period, up 13 percent from P18.43 billion last year.

“The backdrop of the Philippines’s

he recent visit of Pres. Benigno Aquino III to Angat Dam in Norzagaray, Bulacan signaled the start of the rehabilitation and repair of the structure of the main dike of the dam, which has been found by several scientific studies to be sitting on a splay or branch of the main West Valley Fault.

Tonkin and Taylor, an independent and foreign engineering consultant, even revealed in its report that a break in the Angat Dam can inundate by up to 30 meters in several towns and cities in Bulacan, Pampanga and even parts of Metro Manila.

While the problem on the rehabilitation of the Angat Dam has been resolved, another problem that has been besetting all the dams, not only Angat, is the number of agencies that oversee the maintenance, operation, and water usage of the more than 20 dams all over the country.

President Aquino said that there

are 30 government agencies that have overlapping functions and responsibilities over our dams.

In his speech during his visit at Angat Dam, Aquino said: “Thirty ang ahensya ng naghahati-hati sa

pangangasiwa sa sector na ito. Ang malala pa po nito, watak-watak ang mga institusyon, barabara ang mga plano, butas-butas ang datos at talagang talamakang pamumulitika.”

C  A

S “M,” A

n JAPAN 0.3664 n UK 71.4453 n HK 5.9082 n CHINA 7.2528 n SINGAPORE 32.7408 n AUSTRALIA 33.4501 n EU 50.6432 n SAUDI ARABIA 12.2283 Source: BSP (12 August 2015)

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News

BusinessMirror

Thursday, August 13, 2015

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Yuan drags down peso to 5-year low C  A

“During the day, the price action on the peso was also affected by some choppy corporate demand for real foreign-exchange obligations,” Tetangco said.

“Year-to-date, however, the peso continues to trade well in line with others in the region. Going forward, we anticipate market moves in the spot market will be driven by domestic supply or demand forces, as well as market views on data that will be coming out of the US this week,” he added. The local currency received twin blows on Wednesday, due to China’s move to devalue the yuan as part of a broader effort to make it more market oriented.

That decision sent Asian markets

Megaworld. . .

tumbling down to historic lows.

In a commentary, Bank of the Philippine Islands (BPI) said the decision to allow the yuan to weaken was not based solely in consideration for China’s exports, which has weakened in recent months, but also as part of the larger goal of stabilizing the unit and hoped-for inclusion as one of several so-called reserve currencies making up the special drawing rights (SDRs) of the International Monetary Fund (IMF).

“Inclusion in the IMF’s SDR basket may not have an immediate impact on the economy, but it signifies an important step in the opening of China’s financial markets to the rest of the world,” BPI said.

The local banking giant further said the weakening of the peso could have

C  A

vibrant economy continues to benefit the local property market as evident in our first-half results.

We look forward to another bright year for Megaworld as we focus our efforts on aggressively expanding our townships across the country, and providing new offerings in residential, office and commercial businesses. This year, five new townships will be launched, which will give us around 400 hectares of land for development,” company CFO Francis Canuto said in a statement.

Rental income reached P4.21 billion during the period, an increase of 22 percent year-on-year from P3.44 billion.

Earlier this year, the company increased its 2015 rental income target to P9 billion from P8 billion,

as it continues to expand its rental portfolio across townships.

Real-estate sales from residential business soared to P13.43 billion from P12.01 billion, or a 12-percent growth.

Megaworld is now one of the biggest residential condominium developers in the country, especially in the fastest-growing metropolitan centers of Makati and Fort Bonifacio, as well as emerging regional centers outside Metro Manila, with about 4,000 hectares in land bank.

Last month Megaworld announced that it is cementing its leadership as the largest office space developer and landlord in Bonifacio Global City, spending around P20 billion for 12 office towers in the next three years.

been steeper were it not for the central bank’s intervention at the currencies market. “In the coming days, currencies in the region can be expected to continue to trade from the soft side, taking cues from yuan moves, as well as data coming out of the US, and any news from Greece. Today’s spot peso market had the added pressure of choppy domestic corporate demand for real foreign-exchange obligations. Year-todate, however, the peso continues to trade well in line with others in the region. As I have explained before, the exchange rate almost always is the first to domestically reflect volatility in global markets. Hence, as is our policy, the BSP, while maintaining essentially a market-determined exchange rate, will be present in the market to rein in excessive volatility,” Tetangco said.

Brands. . .

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The first phase of the facility, which will be funded by a loan package from Japan, will involve the construction of a 36.7-kilometer narrow gauge elevated commuter railway from Malolos, Bulacan, to Tutuban in Manila. It is seen to be completed by the third quarter of 2020.

Essentially, the whole project aims to revive the Bicol line of the PNR, while improving its decades-old facilities that are far below the train systems of its peers.

The two-phase project is part of the P4.76trillion Roadmap for Transport Infrastructure Development for Metro Manila and its Surrounding Areas, otherwise known as the Dream Plan, that was formulated by the Japan International Cooperation Agency.

The Dream Plan lists the transport infrastructure requirements of the Philippines, facilities that are expected to alleviate potential losses and gain from prospective savings.

Dams’ stability beyond the 7.2 magnitude earthquake C  A Just for the water usage alone, there are already four government agencies that directly supervise the release of water from our dams, namely: the National Water Resources Board (NWRB) that determines the prioritization on the use of water, the Metropolitan Waterworks and Sewerage System (MWSS), National Irrigation Authority (NIA), and the National Power Corporation (Napocor) that operates several dams.

Based on the competing use of water, dams in Luzon have to be managed by these agencies. MWSS, for example, oversees the Angat, Ipo and La Mesa dams for water supply to more than three million water consumers in Metro Manila and three provinces. The NIA operates the Pantabangan and Bustos dams to irrigate agricultural lands, and Napocor oversees the hydroelectric system of the Angat Dam for power generation.

All these agencies have one common objective: revenues from water.

The government should not only concentrate on the usage of water, but should look into the structural condition of our dams. The dams protect our water resources, hence, it is reasonable that the government pays utmost attention to the structural integrity and protection of our dams.

Most of our dams are already old and were built without the aid of modern technology, such as the 42-year-old Pantabangan Dam and the 47-year-old Angat Dam. Leo Jasareno of the Mines and Geoscience Bureau said that a structure is considered old when it is over 20 years.

These structures, he added, had no geotechnical studies conducted before these dams were constructed.

“Ang geotechnical studies, yan ay ang science na nag-aalam kung ang pundasyon

ay matibay at kaya ng itayo ang dam. So mga private study yan. Bina-validate nalang ng government,” Jasareno said. “Lumalabas na isa yang policy gap na dapat mayrong ahensya ng gobyerno na tumitingin sa mga infrastructure na na-consruct bago pa narequire ang geo-hazard assessment.

Even Engr. Manny Monteverde of the Napocor admitted that the government has no dam safety act. The guidelines they are using are based on the international commission on large dam standards.

Monteverde said that they are following the integrated comprehensive safety program consisting of structural safety, operational, monitoring, and emergency preparedness. Every 5 years, they conduct comprehensive review with a third party to check the condition of the dam.

They also conduct daily monitoring and twice-a-year inspection on our dams.

The Angat Dam, Ipo Dam, and the Bustos Dam are all located in Bulacan.

No wonder the Bulakenos are very much concerned with the structure of these dams.

Bulacan Gov. Wilhelmino Alvarado likened himself to a traffic enforcer who constantly monitors the usage and flow of water from the three dams in his province.

“As governor, ako nagsasabi sa kanila kailan magtatapon, magrerelease, mahihinto sapagkat kami ay lulubog,” said Alvarado.

He emphasized the need for a single government agency that should handle all the maintenance, operation and water usage of the dams in the country.

“We have so many dams throughout the country, kinakailangan talaga mayroong isang departamento na nakatutok dito.”

Governor Alvarado added that we do not even have a national dam safety law.

Former Agham Partylist Rep. Angelo Palmones said that during his stint in Congress, he and some lower house members filed House Bill No. 5402 or the

Philippine Dam Authority Act of 2011. Their group realized the importance of a single agency that should concentrate on dams only – from construction and maintenance up to operation and usage.

“Kinakailangang may isang ahensya ng gobyerno natutugon sa proteksyon at pagsasa-ayos ng mga dam sa bansa,”explained Palmones.

Palmones suggested that the Philippine Dam Authority should be under the Department of National Defense (DND) considering water is a national treasure.

It is just frustrating, he says, that this very important piece of legislation that could save people from possible catastrophic event has not been passed by congress.

The Aquino administration has seen this problem that it created the inter-agency committee on the water sector headed

by Public Works Sec. Rogelio Singson.

This committee is tasked to implement the so-called integrated Water Resource Management Policy.

For so many years, our dams have suffered from landslides, siltation, see pages and leaks. The watersheds of our dams, such as the Ipo Dam watershed, have suffered not from natural events but from man’s abuses – illegal logging, pangangaingin, and habitation. Without a single department that would integrate and harmonize the functions of different agencies, the danger posed by our aging dams will still remain.

If there as issue or exposé you would like to disclose, contact jundelrosario@gmail.com or 09997720991/09063261921.

For more investigative reports, watch Headline News at 7 AM, Newsroom at 12 noon, Network News at 6 PM and Nightly News at 9 PM or visit cnnphilippines.com/investigative.

The Nation BusinessMirror

news@businessmirror.com.ph

SC asked to compel Comelec to return to manual voting

By Joel R. San Juan

A

PETITION was filed yesterday before the Supreme Court (SC) seeking to compel the Commisssion on Elections (Comelec) to abandon the automated election system (AES) and instead return to manual voting in the 2016 elections.

In a 21-page petition for certiorari and prohibition and mandamus filed by the Kilusang Bagong Lipunan (KBL), a dominant political party during the Marcos administration, and the Movement for National Salvation (MNS), said the Comelec should opt for manual voting instead of using the precinct count optical scan (Pcos) machines provided

by Smartmatic-Total Information Management Corp. (Smartmatic-TIM).

The petitioners claimed that the elections in 2010 and 2013 conducted with the use of PCOS were marred with irregularities. “Despite the sordid record and background of respondent Smartmatic, respondents Comelec and Smartmatic

are pursuing the same conduct of elections for the May 2016 elections, using the same unreliable Pcos machine of Smartmatic, that will once more deprive the people of their constitutional right to elect their officials, freely and personally, in a free, honest and clean elections,” the petitioners said.

The petitioners also expressed apprehension that the integrity of the 2016 elections will be compromised if the Comelec is allowed to tap the services of Smartmatic anew.

“Unless the Honorable Supreme Court issues a writ of prohibition against the use of Pcos machines by the respondents, and a writ of mandamus to compel the respondent Comelec to go back to manual voting, the elections in 2016 will surely be a repetition of the anomalous 2010 and 2013 elections, and for the next six years from 2016, this nation will be governed by unelected representatives, who are not voted by the people, in a free, honest and clean elections,” it added.

Editor: Dionisio L. Pelayo • Thursday, August 13, 2015 A3

Palace vows to strike down pork revival in 2016 budget

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By Butch Fernandez

alacañang is committed to comply with the Supreme Court (SC) ruling outlawing congressional pork barrel, reaffirming its stand to strike down any attempt to revive the outlawed congressional insertions in the P3.002-trillion 2016 budget the Palace submitted to Congress last week.

Communications Secretary Herminio B. Coloma Jr. confirmed on Wednesday that President Aquino remains firm in his position against the revival of pork-barrel allocations for lawmakers, in any form, through congressional amendments that the SC earlier ruled as unconstitutional.

Coloma, however, sidestepped a question on whether President Aquino would veto the reported P4.8billion congressional insertions in the 2016 budget seen as a circumvention of the SC ruling banning the porkbarrel allocations for lawmakers.

“As Budget Secretary Florencio B. Abad told Congress there is no pork barrel in the proposed 2016 national budget,” Coloma recalled. He pointed

out that Aquino and his Cabinet officials are duty bound to obey the law in implementing provisions of the General Appropriations Act. “The Aquino administration follows the law and the Constitution in terms of implementing an approved national government budget,” Coloma said, adding, “It is too early to speculate as the House has just started public hearings.”

Asked if the President would live up to his commitment to strike down the reported P4.8-billion congressional insertions in the 2016 budget bill being crafted in Congress, Coloma replied, “A veto applies to a law already passed and ratified by both Houses [of Congress].”

Embassy repatriates more Filipinos from Baghdad T

HE Philippine Embassy in Baghdad has repatriated eight more Filipino workers who requested assistance in returning home owing to concerns for their safety and security in Iraq.

The embassy said the four restaurant workers who were repatriated on Wednesday bring to 11 the number of Filipinos in Baghdad that it has assisted in the past several weeks. Another four were repatriated to Manila last week.

Philippine Embassy Chargé d’Affaires Elmer G. Cato said the eight represent the second and third batches of 19 employees of a high-end retaurant in Baghdad who asked to be repatriated. The first three employees arrived in Manila last month, while the remaining eight will be repatriated before the end of the month.

Cato said the workers asked to be covered by the mandatory repatriation program being offered by the Philippine government after they nearly became casualties in a suicide car bomb explosion outside the hotel they were staying in on May 5.

The incident was followed three weeks later by the coordinated suicide car bombings of two five-star hotels in the capital, including one that employed 21 Filipinos.

The attacks prompted the embassy to reiterate its call for Filipinos in Baghdad and other parts of Iraq to seriously consider returning to the Philippines, as well as its offer to facilitate their repatriation. A total of 50 Filipinos have now been repatriated since the program was launched last year.

Manila placed most of Iraq under Alert Level 4 (Mandatory Repatriation) after the Islamic State captured the city of Mosul in June last year. Except for the Kurdistan region in the north, which is under Alert Level 2, most of Iraq remains under Alert Level 4 owing to the volatile security environment in the country.

Manila has also imposed a ban on the deployment of new workers to Iraq because of the prevailing security situation.

The embassy is regularly issuing advisories urging Filipinos in Baghdad and other parts of Iraq to exercise extreme caution and to limit their movements due to bombings and other violent incidents in the past weeks.

Filipinos working in Iraq have been urged to register with the embassy so that they could easily be contacted in case of emergency. Recto Mercene

Chargé d’Affaires Elmer G. Cato of the Philippine Embassy in Baghdad bids good-bye to the third batch of overseas Filipino workers who are returning to Manila under the mandatory repatriation program of the Department of Foreign Affairs. The four, who are employees of a high-end restaurant in Baghdad, asked for assistance in returning to the Philippines after a car bomb exploded outside the hotel they were staying in three months ago.

TheBroa scrutinizing the ele

Business

A4 Thursday, August 13, 2015

By Jovee Marie N. de la Cruz, Butch Fernandez, Recto Mercene, Cai U. Ordinario, Genivi Factao and David Cagahastian

M

ALACAñANG is strongly disputing insinuations that the P3.002-trillion 2016 budget, as well as the projected multibillion “savings” from the current year’s national budget, would be used to bankroll the campaign of Aquino administration-backed candidates in next year’s national and local elections.

Here are the agencies with lump sums and/or questionable project allocations:

high level of trust in President Aquino’s personal integrity.”

He recalled that since 2010, Mr. Aquino has steadily built a platform of good governance characterized by openness, transparency and accountability. “Hence, he is urging the Filipino people to continue choosing the righteous path [daang matuwid] so that the reforms that have been instituted will be brought to their full fruition.”

According to Coloma, “it is against the solid panoply of achievement that critics and detractors of the administration are now crafting gloom-and-doom scenarios in a thinly veiled attempt to misdirect and mislead the people” in fanning fears that public funds would be diverted to the campaign of proadministration Liberal Party (LP) bets in next year’s polls.

“The specter of reckless government spending and diversion of public funds to partisan political activities has been raised. A system of checks and balances is in place. Recall that it was a special audit of the Commission on Audit [COA] that exposed the massive misuse of Priority Development Assistance Fund [PDAF], or pork barrel, that took place in 2008, as well as the alleged embezzlement of funds from the Malampaya oil revenues,” he said.

But like the Congressional Policy and Budget Research Department, many people, including lawmakers, are asking, “is the government spending the annual funds for undertakings that are responsive to their needs? Is the government efficient and not wasteful in its spending? And are the people getting value for their money?”

Agencies

Amount (in thousand pesos)

Senate

69,356

Department of Agrarian Reform

1,630,697

Department of Agriculture

21,055,353

Department of Energy

1,041,966

Department of Environment and Natural Resources

753,416

Department of Finance

220,000

Department of Health

1,307,933

Department of the Interior and Local Government

10,465,812

Department of Justice

369,692

Department of Labor and Employment

76,650

Department of National Defense

25,000,000

Department of Public Works and Highways

83,872,470

Department of Science and Technology

2,862,635

Department of Social Welfare and Development

12,207,509

Department of Tourism

1,150,000

Special Purpose Fund

Department of Trade and Industry

311,491

Department of Transportation and Communications

4,700,000

National Economic and Development Authority

8,105

Commission on Higher Education

1,777,500

Dangerous Drugs Board

69,300

Housing and Urban Development Coordinating Council

26,368

National Commission for Culture and the Arts

599,739

Office of the Presidential Adviser on the Peace Process

388,367

Philippine Commission on Women

53,712

Autonomous Region in Muslim Mindanao

4,789,491

Supreme Court

1,665,000

Commission on Elections

192,912

Commission on Human Rights

2,135

National Irrigation Authority

2,897,570

National Tobacco Administration

571,500

Philippine Coconut Authority

989,887

Philippine Fisheries Development Authority

288,627

National Electrification Administration

3,494,600

National Power Corporation

306,000

Local Water Utilities Administration

1,394,547

National Housing Authority

29,901,000

Social Housing Finance Corporation

908,516

Metropolitan Manila Development Authority

356,590

Ridon noted that despite the fact that President Aquino’s term will end by June 2016, next year’s P3.002-trillion national budget is more than double than 2010’s P1.541 trillion.

Particularly, the lawmaker noted the sharp increase in the budget allotted to the Special Purpose Fund (SPF) for 2016, the portion of the budget which various public-finance watchdogs have invariably identified as a big red herring due to their discretionary nature.

The SPF is under the sole discretion of the President.

Of the P648.2-billion pork, P430.4 billion are from SPF, while P217.8 billion are lump sums stashed in 38 national government agencies and executive offices.

For 2016 the SPF increased by 75.2 percent, from P245.7 billion in 2015 to P430.4 billion. “More glaringly, the lump sum portion of SPF is set to increase by 101.7 percent, from the current P48.3 billion to P97.4 billion,” Ridon said.

House Independent Bloc Leader and Lakas Rep. Ferdinand Martin Romualdez of Leyte said the lower chamber should examine carefully the hundreds of billions of SPF of the Office of the President and other lump sum appropriations that could be included in next year’s national budget that are left unscrutinized and unchecked over the years.

“It’s our role to scrutinize the national budget for next year to guarantee that no funds are misused. We will dissect and analyze the contents of the national expenditures,” Romualdez said.

But the Palace cannot blame its detractors for pouncing on a general appropriations bill that is 15.2 percent higher than this year’s P2.606-trillion budget when the administration will only stay in power for half of 2016 and with “pork-like” insertions present in the new budget proposal.

For them, a close scrutiny of the election-year budget is a must to guard the people’s purse and to make sure local and national posts in the 2016 polls would be disputed in a level playing field.

Designed for corruption Party-list Rep. Terry L. Ridon of kabataan put in bluntly—the national budget for 2016 is “intrinsically designed for corruption” and “ramped-up election spending.”

Of the P3.002-trillion proposed national budget for 2016, about P648.2 billion, or 22 percent, can be considered “pork,” according to Ridon.

“When we say pork barrel, it’s not just about post-enactment identification of projects. We can classify as pork every item that is vulnerable to corruption and political maneuvering, and funds of which the manner of allocation and disbursement are left to

the sole discretion of the President and the Executive department he leads, thereby leading to the funding of programs and projects that favor his select allies,” Ridon explained.

“Our team exhaustively analyzed 5.8 million cells of data in the 2016 National Expenditure Program [NEP], and we have come to the conclusion that—at the bare minimum—about P648.2 billion falls under our definition of pork.

This means about P2 out of every P10 in our national budget next year is highly vulnerable to corruption and patronage politics,” the legislator added.

Public trust on the line But Palace spokesmen assert that the track record of President Aquino’s fiveyear incumbency has not been associated with misuse of public funds and it is not likely to risk losing hard-earned public trust and confidence by bending the rules to accommodate political allies seeking election to public office.

“International confidence on the robust performance and prospects of the Philippine economy is at an alltime high,” Communications Secretary Herminio B. Coloma Jr. noted, adding, “Such confidence is anchored upon a

Presidential Social Fund Nationalist People’s Coalition Rep. Sherwin Gatchalian of Valenzuela also calls for more transparent accounting of President Aquino’s P500-million intelligence fund, as well as the more than P2 billion in Presidential Social Fund ​(​PSF​)​.

In deference to the President, Gatchalian said the House of Representatives and the Senate do not inquire into how the Chief Executive uses his confidential and intelligence funds. But hesaid it would do Mr. Aquino well, particularly his daang matuwid campaign, if Malacañang would exercise transparency, since the intelligence fund and the PSF are also taxpayers’ money. “It would be a good legacy for P-Noy’s tuwid na daan ​i f, ​d uring his last

10 months i​n ​ Malacañang, a more transparent accounting of his PSF and intel funds will be made by Palace officials,” he said, noting that with the 2016 presidential elections just around the corner, transparency is important to douse suspicions that the PSF will be used for the campaign of the administration candidates. “​ The PSF can be considered as a presidential pork barrel since its disbursement is known only to Malacañang and does not undergo the usual post-audit scrutiny of the Commission on Audit.

This makes it susceptible to fund misuse, especially now that elections are coming up,” the lawmaker added. ​The PSF is mainly sourced from the Philippine Amusement and Gaming Corp. (Pagcor) and the Philippine Charity Sweepstakes Office (PCSO).

While the two government-owned and -controlled corporations (GOCCs) undergo COA scrutiny, their contributions to the PSF do not. As a rule, the COA just accepts the Malacañang report on PSF disbursement in deference to the President.

Annual remittance of Pagcor to the PSF is around P2 billion, while PCSO’s is around P900 million. Amount remitted to PSF is net of the two GOCCs’ salaries and monthly operating expenses, plus the 23-percent tax being paid to the Bureau of Internal Revenue (BIR).

The P500-million presidential intelligence fund is under the item Presidential Anti-Organized Crime Commission (PAOCC), which is headed by Anti-Crime czar and Executive Secretary Paquito N. Ochoa Jr. The P500-million PAOCC budget started in 1999 under the administration of former President Joseph Estrada, and a portion of this budget was used to fund the operation of the now-defunct Presidential Anti-Organized Crime Task Force, then headed by former National Police Director General Panfilo M. Lacson, who later became a senator.

“It’s about time that Congress, which has the power of the purse, makes a scrutiny of the PSF and the P500-million intel fund to determine if these funds are being spent wisely by the Aquino administration, especially at a time when elections are just around the corner,” Gatchalian said.

Based on his budget proposal, President Aquino will have P250 million for confidential expenses and another P250 million, for intelligence expenses next year. He is only required to submit to the COA a certification stating in very general terms the purpose for which the money is used.

The P500 million is part of the nearly P2-billion appropriation for maintenance and other operating expenses (MOOE) for the Office of the President (OP).

The OP budget will increase by more than P200 million​​to P2.86 billion next year​from P2.602 billion this year ​. This does not include the more than P2 billion worth of PSF, which is basically a presidential pork barrel.

Support Fund Ridon also noted the conspicuous increase in the lump-sum Local Government Support Fund (LGSF), which increased more than four times from the current P3.1 billion to P18.4 billion in 2016. According to the 2016 NEP Program, the LGSF will be used to support various “priority programs and projects of LGUs [local goverment units],” implement “bottom-up budgeting projects,” and “rehabilitate and upgrade provincial roads.”

“The sheer size of the LGSF alone is suspect. This is essentially a fund that the administration will use to strengthen its grip and influence in LGUs ahead of the 2016 presidential elections,” Ridon said.

He noted the 29-percent increase in the government’s infrastructure outlay, which is set at P766.5 billion, of which P268.4 billion is allocated for the paving of 31,242 kilometers of roads.

“The increase in the infrastructure outlay is no doubt related to the upcoming polls. For the common Filipino,

one signal of the upcoming elections is the untimely rebuilding of national and arterial roads. It is not a secret to the people that many corrupt politicians get kickbacks from these road projects,” he said.

“With the government seeking to pave 31,000 km of roads next year, don’t be surprised if the recently paved road in your neighborhood gets excavated and repaved in the months leading to elections,” Ridon added.

Also,Ridon said, despite the abolition of PDAF, or the there are still many ways in which government officials can dip their hands into public infrastructure funds under the 2016 budget.

“For example, the P32.7-billion budget for irrigation under the National Irrigation Administration [NIA] is divided into several lump sums that have yet to be disaggregated. There is also a special provision in the said budget that allows for post-enactment modification of project details, giving ample room for corrupt practices and insertion of pork projects,” Ridon said.

The same could be said for the P7billion budget for farm-to-market roads under the Department of Agriculture (DA) next year, he said.

Ridon added that there are many other lump-sum allocations for various programs and projects of several agencies, including the Department of Public Works and Highways, that are highly vulnerable to corruption.

“Flipping through the pages of the 2016 NEP, one can readily see traces of pork barrel. It’s practically everywhere,” he added.

38 govt agencies Ridon said about P217.8 billion is also stashed in 38 national government agencies and executive offices for programs and projects that are “lump sums, lack details for implementation, and can be subject to political maneuverings.”

“Budget Secretary [Florencio] Abad purports that there is no pork in the 2016 budget. But if we look at the line items, many lack details for implementation and are highly vulnerable to corruption,” Ridon said.

Mar’s commercial Meanwhile, Party-list Rep. Carlos Isagani Zarate of Bayan questioned the sources of campaign funds of LP standard-bearer Manuel A. Roxas II, secretary of the Department of the Interior and Local Government (DILG).

President Aquino is the chairman of LP. “It seems that they are really bent on building up a more masa image for Mar Roxas, as his face is conspicuous on TV morning shows and with all his campaign ads on TV. But it makes us wonder where Mar Roxas is pulling all the money from. Fifteen seconds on a prime-time commercial spot can go upward from P250,000, while 30 seconds on TV can go upward from half a million. His TV placements early in the game makes questioning his fund sources a valid point,” Zarate said.

“The budget was described as an elections budget, as it was padded here and there to provide the administration substantial fuel for their campaign train.

The DILG, for example, with Roxas in the stern, has a whopping P154.5-billion budget this year. The government cleverly crafted the budget to service the allies of the administration,” Zarate added.

“Are we seeing the people’s money in the campaign ads of Mar Roxas?”

Zarate said the large sums of money in strategic departments and the revolving definition of savings go hand in hand in ensuring money for LP campaign kitties. “We saw it last year and we see it again in the budget deliberations this year how the Executive is pooling funds in LGUs and in LP allies in the bureaucracy.

Funds for LGUs increased fivefold in the 2016 National Expenditures Program, because it is common knowledge among politicians that LGUs, up to the barangay level, are the base in ensuring electoral victories for national candidates, especially in presidential races,” Zarate said.

Scrutiny Gatchalian, meanwhile, said daang matuwid should be strictly observed in the next 2016 elections. “That means the GAA [General Appropriations Act] cannot be used for anyone’s personal campaign expenses. That’s not fair. Congress should scrutinize every lump sum and every detail of the proposed budget for next year to prevent abuse and corruption,” he said.

Party-list Reps. Jonathan dela Cruz of Abakada and Antonio Tinio of ACT of teachers also vowed to scrutinize the budget of every government agencies.

“Of course, it may be used for election. It has to be said that the only way that the LP was able to build itself up from a minor party with a handful of members at the start of the Aquino administration is through deft use of government programs and projects funded by the national budget as pork barrel, particularly for winning over legislators and local government officials. Certainly, we’ll see more of this in the coming months,” he said.

Party-list Rep. Sherwin Tugna of Cibac urged the public to be vigilant on the budget process. “Due to this possibility [misusing the public funds], it is with more reason that legislators and the public should scrutinize the budget hearing and its corresponding implementation more stringently. Make sure that all and 100 percent of public fund is spent in the project.” House Speaker Feliciano Belmonte Jr. said all the lawmakers are free to scrutinize the proposed 2016 national budget.

aderLook

sMirror

www.businessmirror.com.ph | Thursday, August 13, 2015

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ection-year budget So, public funds were not used in 2013 [campaign of administration bet], what do you expect? Why would we use it[in the next elections]?,’” he asked.

Election ban

Also, House Committee on Appropr iations and LP Rep. Isidro Ungab of Davao assured all the lawmakers—allies and non-allies—of a free and independent discussion of the proposed budget at the committee and the plenary levels. “We will allow congressmen to make full debates...they can question any item, they can question any page of the proposed budget.”

House Committee on Trade and Industry Vice Chairman and LP Rep. Anthony del Rosario of Davao del Norte, and LP Spokesman Rep. Ben Evardone of Eastern Samar believe that President Aquino will not allow anybody to use the national budget as his or her campaign funds.

“The 2016 budget is very transparent. More important, the projects and programs are based on need and not on party affiliation. It is a budget that is anchored on the daang matuwid agenda of fighting corruption, strengthening the country’s macro economic fundamentals and ensuring inclusive growth, so that no one is left behind,” del Rosario said.

Evardone said: “I am very confident that President Aquino will not allow that [the use of public funds as campaign kitty], we saw that during the midterm elections, how much more in the upcoming 2016 elections. He wants to leave a legacy of good governance and wise spending of people’s money.”

Additional safeguards Coloma also assured that additional safeguards have been put in place in

the aftermath of the Supreme Court decision on the proper use of budgetary savings. “Most important, an enlightened and vigilant citizenry is actively monitoring the government transactions that are regularly posted in web sites,” the Palace official said.

Coloma assured that the Aquino administration is working closely with the leaders of Congress to ensure the timely enactment of the 2016 national budget so that it may be implemented on the first day of the year, just like the budgets from 2011 to 2015.

The proposed NEP totaling P3.002 trillion, he added, is “described as a legacy budget, as it prioritizes investment in people, infrastructure and socioeconomic development.”

“Our bosses can rest assured that government spending will be judicious and beneficial; all disbursements will be aboveboard and in accordance with law. The Aquino administration is determined to bequeath to its successor sufficient resources for effective governance, as well as for responding adequately to calamities and contingencies that may arise during the second half of 2016,” Coloma said.

Palace Spokesman Edwin Lacierda, for his part, cited elections held under Mr. Aquino’s term to drive home the Palace line, noting the 2016 elections will be no different than the 2013 midterm elections.

“This [2016 polls] is going to be the second one, right? The first one was during the 2013, the midterm elections. The President answered this already very categorically: ‘In 2013 I never used it.

Finance Undersecretary and chief economist Gil S. Beltran said the procurement ban that will be automatically imposed at the onset of the election period would prevent the government from spending more than it should.

Under the Omnibus Election Code, public officials, including officials of GOCCs, are not allowed to disburse public funds during the 45 days before a regular election, except for the following: Maintenance of existing and/or completed public-works project; work undertaken by contract through public bidding held, or by negotiated contract awarded, before the 45-day period before election; payment for the usual cost of preparation for working drawings, specifications, bills of materials, estimates and other procedures preparatory to actual construction; and emergency work necessitated by the occurrence of a public calamity.

The intent of such a provision in the law is precisely to prevent those in power to use public funds to gain favor from those who will be benefited by the disbursements of such funds.

Beltran added that it is customary during transition periods for the current administration to spend only half of what is allocated by Congress for the whole year, leaving behind some cash for the incoming administration to spend for its projects.

“Usually, during transitional periods like next year, the outgoing administration spends only a half of the year’s budget. The election ban puts a brake on spending.” Former Budget Secretary Benjamin E. Diokno agreed that the 45-day election ban will prevent the administration from undertaking lastminute and low-priority projects that would benefit its candidates. He said the procurement process would take at least six months before a contractor can be obtained for one project.

“They can bid it out now, pero hindi rin pwede ’yun kasi wala pa namang appropriations eh, ano’ng gagamitin nila?”

Diokno said.

Ateneo de Manila University economist Alvin Ang also said given the battle cry of the Aquino administration for good governance, the LP-led government would not want to taint its name, especially at this time.

Ang said the mere fact that the current administration has had underspending problems since it took office in 2010, say a lot about its spending priorities.

“I think very careful lang talaga sila kaya I doubt it na gagamitin ’yan for other purposes. That’s the reason they are very careful, so I don’t think na gagamitin ’yan for campaign,” Ang said.

Funding sources However, economists admit that there are problems that may come with a budget that increased by 15.2 percent compared to the previous P2.606-trillion national budget.

Diokno and Ang agreed that issues include the ability of the current government to spend in such a short period of time. The delays that it experienced in the past few years only highlight the difficulty of the current government to increase its spending for such items, as infrastructure.

Diokno added that other problems with a large budget is the revenue cover that will be required to support the projects and programs that need to be financed.

He said apart from having a history of underspending, the Aquino administration has also had a history of “undercollection.” Diokno doubts whether the BIR and the Bureau of Customs will be able to collect funds enough to finance a P3-trillion budget.

Further, Diokno said with expectations that the government’s growth target of 7 percent to 8 percent will not be met, personal and corporate income taxes to be collected may be

lower than expected. The former budget secretary also said the continued decline in oil prices, which is providing a boost to consumption spending, is causing the government’s excise-tax collections to decline.

With a low budget cover, Diokno said the country’s incoming budget secretary could be in a very powerful position to choose which projects can be funded, or not.

Kung malaki ’yung budget na inallocate sa kanya, maliit naman ’yung revenue, then the budget secretary has a leeway, he can pick and choose kung anong i-re-release niya, ano ang hindi niya i-re-release, that makes the budget secretary powerful again. Magche-cherry pick siya,” Diokno said. “I think the congressmen and senators should be aware of this. ’Wag naman masyadong malaki ’yung slack, or the budget secretary will be, in effect, choosing which projects to fund and which projects not to fund.” Ang also said that if the country’s revenues would be insufficient in financing the budget, the next government may find it necessary to go to the debt markets.

But, Ang said, the main issue with the budget is very basic: whether the government—the current one and the next—could and will be able to spend the money.

The government’s underspending has been a factor in the country’s lowerthan-expected gross domestic product (GDP) growth since 2010.

In the first quarter of 2015, GDP grew only 5.2 percent on the back of the decline in public spending, particularly for infrastructure.

Senators divided The BusinessMirror asked 11 senators to comment on the P2.606 trillion budget for 2016—the largest in the country’s history—which would be implemented during a crucial presidential election and, as expected, the legislators’ answers hew closely along party lines.

Notwithstanding that the budget contains suspicious lump-sums that critics said would be conveniently used in next year’s elections to buy votes, Sen. Franklin M. Drilon said: “It is important that we keep on expanding the economy.”

How about suspicions that part of the budget would be used to buy votes in the next election? “There’s no basis, those are only suspicions,” Drilon said.

Nationalista Party Sen. Ferdinand Marcos Jr., on the other hand, said the opposition is concerned about the huge lump-sums.

“We’re still worried about the lumpsums. Napakalaki, na kahit ’yun ang ipinangako ng Department of Budget and Management [DBM] na ipapaliwanag daw nila, hanggang ngayon ay wala pa, kaya nang magsimula ang hearing sa House of Representatives ay kitang-kita na hindi pa rin naibigay ’yung itemized na list.”

“But we will not allow the lump-sums to go through. They need to spell out in detail what they promised, because it would be very hard to trace where the money will go,” he said.

LP Sen. Loren Legarda said: “I will scrutinize the budget, and I will help so that all those [lump-sum] concerns could be raised.”

“But I cannot answer that [suspicions of the lump-sums being used to buy votes] because I am not the implementor of the budget,” she added.

Vicente Sotto III, Majority Floor leader and and a member of the NPC, said the opposition will subject the budget to a fine-toothed comb. “Ano ba’ng nakita natin at napala nitong taong ito na kailangan pang dagdagan para sa susunod na taon.”

Sen. Paolo Benigno Aquino IV, the youngest senator of the 16th Congress and the president’s ally in Team Pinoy, said there’s always the suspicion that part of the budget would be used for election-related purposes.

“But, at the end of the day, if you fulfill your budget, you are providing services to the people. If the administration is good, you are able to provide services, that’s a by-product, having a good plan of governance. Hindi mo

naman pwedeng sabihin ’wag nating pondohan yung importanteng bagay kasi may eleksyon, di ’ ba?”

“It’s one of those things na damn if you do, damn if you don’t, talagang bibigyan ka ng kulay. But, I think, what’s important as you go through the process is that, nasasagot nung budget ’yung pangangailangan ng bayan at ’yun naman talaga ang trabaho namin, to make sure na nasasagot ‘yung mga bagay na iyan,” he added.

Opposition Sen. Joseph Victor G. Ejercito of the Partido ng Masang Pilipino said they have to make sure that there will be minimal lump-sums or insertions in the budget.

“We have to practice transparency because, after all, that’s the thrust of governance, of daang matuwid by the President. They should adhere to this principle of transparency and accountability. As a member of the minority, I’ll make sure there will be minimal lumpsum inclusions in the budget.”

He said that every election year, the budget really balloons, “so we want to make sure that some programs, or projects like the CCT [conditional-cash transfer], would not be used for political purposes.”

Ejercito said it was his personal experience in 2013, running as an opposition candidate in San Juan, where some local officials discouraged him by saying: “Naku, mahirap kayong manalo, kasi kakagaling lang dito ng kabilang partido, namigay ng CCT [It would be very difficult for you to win, people from the other party just came here, distributing CCT].”

On the other hand, Sen. Aquilino Pimentel Jr. was noncommittal, not having seen a copy of the proposed budget.

“Hindi ko pa nakita ang budget, we’ll be briefed on Wednesday and Thursday.”

“Ako, I don’t accept the mere passage of time as the reason for automatically increasing the budget. It must be supported by actual programs to address actual needs of the people,” he added.

Pimentel said it is about time to get rid of lump-sums in the national budget. Juan Edgardo Angara said there will always be accusations against a new budget, “but if you look at the budget every year, it’s always going up. So I think about it, it’s consistent with past years because the government was able to set aside money for expenditures.”

Asked if contingencies would always be a valid excuse for lump-sums, Angara agrees: “Oo, hindi mo naman alam kung sino ang tatamaan eh, [You wouldn’t know who would be struck by calamity].”

Sen. Cynthia Villar, a businesswoman and Nationalista Party lawmaker, said she would try to see whether the budget, which she admits she has yet to see, would be used for upright purposes.

“Kung maganda naman ang pagdadalhan, okay. Pero kung hindi, we’ll see what we can cut.”

“I have not seen the budget, but personally, I’ll give them the benefit of the doubt if it has basis; if it will be used for the purpose it was intended. We will see in the deliberations,” Sen. Antonio F. Trillanes IV said.

Sen. Francis G. Escudero is also not up-to-date with the budget, professing he has not read it, but agrees that it should be the right amount since the budget is in line with infrastructure spending, which is 5 percent of the GDP. “We still need to spend more and, hopefully, we’ll be able to increase it during the budget deliberations here in the Senate.”

He allayed fears that part of the budget would be used to buy votes, saying, “Our election laws are complete.”

Spending it well Despite potential headwinds due to possible misuse of the 2016 budget for next year’s elections, bankers are not wary about the size of the 2016 national budget. Rather, they intend to look at how quickly the funds will be disbursed and whether these will be efficiently used. The 2016 proposed budget is an economic-political issue, being tied to the coming presidential

elections. But from the perspective of growth, the increased budget for 2016 would translate to faster economic growth, if spent wisely.

“The increased budget is more an indication of the collection and growth efforts of the past. Again, it is one thing to have a huge budget. If it is not being spent wisely, then of course it will not translate into faster economic growth,” stock analyst Luis Limlingan, head of Business Development at Regina Capital, told the BusinessMirror.

Another thing to look at is how quickly the budget gets approved, the sooner the better, of course.

“Short-term effects from electionrelated spending will, however, boost economic growth all the way to 2016, with investment spending potentially picking up as well with expectations of a new government being more aggressive in pushing infrastructure projects, in line with other Asean countries,” Metropolitan Bank & Trust Company (Metrobank) research head Marc Bautista told the BusinessMirror.

Justify insertions Economic analyst and Political Science Prof. Richard Heydarian at De La Salle University said it’s very important for the government to dispel any speculation that it intends to use taxpayers’ money to boost the chances of its own candidates in the 2016 elections.

“This, if ever true, would be a violation of the fundamental principle of electoral fairness, putting into doubt the credibility of our democratic institutions. With Aquino endorsing Roxas, who is still struggling in the polls—there are bound to be suspicions that the incumbent will use state machinery to boost its anointed successor’s chances,” he told the BusinessMirror.

On top of this, the Disbursement Acceleration Program controversy has also cast a dark shadow on the DBM, so much so that the Aquino administration should double its efforts to clarify and justify the rationale for any suspicious budget insertion.

Otherwise, this will affect President Aquino’s legacy as a genuine reformist.

One of the risks confronting the Philippine economy is the state of the global economies, said Chamber of Thrift Banks President and RCBC Sav ings Bank President Rommel Latinazo. When US interest rates begin rising again, it is expected that the large amounts of liquidity still within the system can blunt and even offset expected hikes in policy rates, as such, liquidity will keep interest rates from rising too much or too fast.

“Interest rates are expected to rise more smoothly in time rather than in large jumps given that inflation expectations are largely muted and a lot of countries are actually experiencing deflationary spirals given the low price of oil and commodities,” Bautista said.

He said government can be more aggressive in pushing deficit spending to promote infrastructure and development projects, as inflation expectations are well-anchored and there is a large amount of liquidity available that can be largely tapped to fund such, development, given the still low yields on government bonds.

It is not expected that such issuances will crowd out the market and unduly drive up interest rates.

Limlingan said the slower remittances, interest-rate hikes, delayed rollout of infrastructure, as well as the economic woes of the US, China and some European countries will have a strong impact on the growth of the economy. He said once the US hikes interest rates, our local currency will devalue, as foreign funds will exit because of the high cost of borrowing.

On the flipside, it will become much more profitable to export goods.

He said the Monetary Board can manage borrowing and lending rates, reserve requirements, and money being circulated. The government can actually pull the levers on taxes and spending and can also look into rules for foreign and local ownership.

Opinion BusinessMirror

A6 Thursday, August 13, 2015

editorial

China’s currency devaluation and the Philippines

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orking at the Bangko Sentral ng Pilipinas (BSP) just became more difficult.

On Tuesday the People’s Bank of China (PBOC) devalued the renminbi, China’s currency. As a side note, the Chinese currency is named the renminbi, but it is divided into units called yuan (CNY). Therefore, these terms are often used interchangeably, although, as with many things Chinese, they do create some confusion.

Then again, the British currency is named the “sterling,” and the units are “pounds.” So the Chinese are not alone.

The PBOC devalued the CNY against the US dollar by the largest amount in its history—1.9 percent. The likelihood of more devaluation in the future is strong, so we must look at the consequences for the Philippines.

One immediate reaction came from Australia, China’s major trading partner. The Australian dollar dropped by about 1.3 percent against the US dollar. With the PBOC devaluing, China’s imports, such as those from Australia, became more expensive and its exports became cheaper. To keep the previous balance, other countries would be tempted to devalue their currency against the US dollar. This will help keep the relation between their currency and the CNY at the same level before the PBOC action.

But this is not a simple process, as shown by the Philippine trade relations with China.

China is the Philippines’s largest import market, with 15.5 percent of our imported goods coming from China. Theoretically then, we would want the peso to remain strong against the CNY to make paying for our Chinese imports less expensive. However, China is our third-largest export market, taking 10 percent of our total merchandise exports. We might gain a bit on imports with a strong peso, but lose some of our export earnings if the peso remains strong.

Complications also arise from the fact that everything is connected. Japan is our top export market at 20 percent of the total. But the Japanese yen fell 0.30 percent against the dollar on Tuesday. So, to keep things “normal” in our trade with Japan, we need a weaker peso.

But oil and oil products are denominated in US dollars, so a weaker peso means our gasoline will cost more.

The reality is that, for some nations we want a strong peso, and for other trade purposes, we want a weak peso. Overseas workers want a 100 to 1 peso-dollar exchange rate to easily acquire a new car. On the other hand, they want a 10 to 1 peso-dollar rate to be able to buy cheap gasoline. But you can’t have both.

The BSP will have a difficult job balancing both sides of the economic equation with regard to the peso exchange rate. But China may have just set the trend, and we would not be surprised to see the Philippine peso fall to 48 to 1 US dollar in the next few months.

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China goes to war John Mangun

OUTSIDE THE BOX

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or a decade, US politicians have been complaining that the Chinese have been keeping the renminbi (RMB) exchange rate artificially low against the US dollar. This was done, according to the geniuses in Washington, D.C., to keep prices of Chinese exports low so the American consumers would buy them.

Bear in mind, first, that politicians understand as much about money and economics as monkeys do about jet engines. Sure, the monkeys can hold the tools and make a lot of noise banging things, but you do not want to fly an airplane serviced by monkeys. Neither do you want your economy run by elected officials.

The politicians still do not understand how China came to dominate the global manufacturing market.

China simply copied the model first used by Japan: Make a simple product that everyone uses, like an oven toaster, sell it at a low price regardless of quality, and make a profit.

Enough people will buy it because of the price, and eventually, you can improve quality while capturing market share.

Then move up the value chain to shoes and clothes, followed by televisions and cars. Eventually you will get so good at making stuff at a reasonable price with comparable quality,

no one will care that your workers are making 10 percent of what your own people used to be paid.

The Chinese never had to keep their currency artificially low. The world kept sending its money to China in such massive amounts. The RMB could reflect domestic value and price, which, in a relatively poor country like China, kept the currency cheap compared to dollars.

For the last five years, it has been the US, Japan, Europe and nations like Brazil that have kept an artificial foreign-exchange rate for their currencies. This is the “Currency War.” China has been very patient not to get involved, keeping the yuan (CNY) pegged to the US dollar at about 6.3 since 2011. The euro-dollar rate has moved from 1.50 to 1.07, or 30 percent, from top to bottom.

The Swiss National Bank tried to cooperate with the US and it cost them billions. Finally, they gave up trying to keep the Swiss franc

artificially low to help the rest of Europe, and their currency appreciated 20 percent in one day earlier this year.

The Chinese asked the International Monetary Fund (IMF) to include the RMB as part of the Special Drawing Rights basket of currencies. This would have allowed China to keep the CNY-USD exchange rate at 6.3, while making its currency more competitive. The IMF rejected that request on August 5, as the US wanted to show the Chinese who is really the global economic boss.

Backed into a corner, the Chinese devalued the CNY on Tuesday by the largest amount in history: 1.9 percent. Previously, China held its currency moves in check by allowing only a small variation from the 6.3 exchange peg.

The People’s Bank of China (PBOC) said that, while this was a one-time devaluation, it would now keep the daily variation in check against the previous day’s close, not against a set target. In other words, the PBOC will do exactly what the Bangko Sentral ng Pilipinas (BSP) does. Free-market flows determine the rate, but volatility is kept in control.

Both the PBOC and the BSP are managed not by politicians but by professionals who understand money and markets. Politically motivated decisions made by a central bank—which is what the US Federal Reserve (the Fed) does—will always be overtaken by free capital markets.

Further, the PBOC has effectively

cut the Fed’s interest-rate policy legs off at the knees. The US dollar will now strengthen against all currencies. The US trade deficit will become much worse. A Fed interest-rate increase—which is still possible—will make these situations more serious.

The US economy will drop.

This is all a part of the cycle trend change coming at the end of September, as identified by Martin Armstrong that I have been talking about for months. We are soon going to see a significant downturn in the global economy, led by the US. While local newspapers are focused on politics, economics will soon rule the headlines.

This devaluation of the RMB is a major event that will have significant and lasting repercussions. It is only the next escalation in the global currency war, with many more economic battles to come. Be prepared.

If you need a break from my rantings, go on Twitter and follow @SenorBarbero, @genkumag and @ ravelasj—all professionals, highly knowledgeable and unbiased globalmarket participants. You will get more sound analysis in 140 characters from these gentlemen than hours of listening to the financial media or to the “experts” and gurus.

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.

As galactic light fades, astronomers study the death of the universe

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By Amina Khan | TNS

ere’s some cosmically bad news: The universe is dying. An international team of scientists that used seven powerful telescopes around the world to capture light coming from more than 200,000 galaxies has found that they’re putting out half of the light that they did just 2 billion years ago—and they’re continuing to fade.

The findings, presented at the General Assembly of the International Astronomical Union in Honolulu, reveal the extent to which the cosmos are apparently losing steam, and could help astronomers better understand the evolution and structure of the cosmos.

Scientists have known—since the 1990s—that the universe seems to be producing less light than it did in the past; studies of ancient galaxies show that many were producing stars at much higher rates than they typically do today, giving off far more ultraviolet light in the past than we see in the present.

But ultraviolet light is just one slice of the light that galaxies give

off. So the scientists decided to tally up as much of the light coming from about 221,373 different galaxies as they could to finally get a proper gauge on how much energy they were putting out in the past.

“We’d seen this decline in just the ultraviolet light,” said lead author Simon Driver, an astronomer at the University of Western Australia, “but we didn’t know whether it was happening at all wavelengths.”

Stars produce many other wavelengths of light, including optical wavelengths (the kind of light we can see with our naked eye), as well as infrared. Clouds of hydrogen gas also absorb higher-energy starlight and then give off an infrared glow, so

that has to be taken into account, too.

The astronomers gathered data from seven different telescopes, including the Anglo-Australian Telescope in New South Wales, as well as National Aeronautics and Space Administration’s Wide-field Infrared Survey Explorer spacecraft, looking for 21 different wavelengths of light, from the far ultraviolet (higher-energy light) to the far infrared (lowerenergy light). They found that, about 2 billion years ago, the universe was producing roughly twice as much as it is today.

“We’ve got three different indicators—we’ve got the total energy output, we’ve got rate at which galaxies are merging and we’ve got the star formation rate,” Driver said. “All three of those indicators are telling us that the universe is on a steady decline—kind of going into its nodding-off phase at the moment.”

On the bright side (so to speak), this isn’t something we need to worry about for a while—if at all.

The universe is about 13.8 billion years old, and its period of

senescence will probably stretch far into the foreseeable future—practically forever, in fact.

“It’s going to be a long process; I guess we’ve got worse things to worry about at some level,” Driver said. “In about 5 billion years the sun is going to swell up and swallow the Earth; in about 10 billion years it’s going to collide with the nearest [major] galaxy, the Andromeda galaxy; and in about 100 billion years the universe will be so expanded and producing so little light that we basically won’t see anything.”

By profiling a large chunk of the galaxies in the observable universe, astronomers could further understand the differences between galaxies past and present, and perhaps, probe the underlying structure of the cosmos (which is largely defined by dark matter, the mysterious stuff that can’t be seen or touched but that makes up most of the known matter in the cosmos).

The findings have been submitted for publication to the Monthly Notices of the Royal Astronomical Society.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Republic Act 10668: Relaxing old cabotage restrictions Atty. Esther M. Weigand

Tax law for business

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n July 21, 2015, the President signed Republic Act (RA) 10668 which amended the old cabotage law of the Philippines, with the intention of enhancing Philippine competitiveness in international trade and lowering the cost of shipping cargo to and from the Philippines.

Black’s Law Dictionary defines cabotage as “the transport of goods or passengers from one port or place to another in same country.” Based on earlier laws, domestic trade or shipping can only be undertaken by domestic shipowners or operators of domestic vessels. Under RA 9295, domestic shipping or trade is limited only to domestic ship owners or operators, which are defined under the said law as “a citizen of the Philippines, or a commercial partnership wholly owned by Filipinos, or a corporation at least 60 percent of the capital of which is owned by Filipinos, which is duly authorized by the Maritime Industry Authority [Marina] to engage in the business or domestic shipping.”

And the only instance when domestic trade or shipping may be undertaken by foreign vessels is when they are granted a Special Permit (known as Certificates of Public Convenience) by Marina, and only if no domestic vessel is available or suitable to provide the needed shipping service, and public interest warrants the same.

Under the new law, the restrictions on domestic trade and shipping have been relaxed. RA 10668 now allows a foreign vessel, that is a vessel registered or documented in a flag registry other than that of the Philippines, upon submission of their cargo manifests to the port authorities, to: n Carry foreign cargo from a Philippine port of entry to a port of final destination in the country; n Carry foreign cargo of another foreign vessel from a Philippine port of entry to another Philippine port; n Carry foreign cargo intended for export when departing from a Philippine port of origin through another Philippine port; n Carry foreign cargo of another foreign vessel when departing from a Philippine port, through a domestic transshipment port and transferred at such port to its foreign port of final destination; and n Transship an empt y foreign container van, which may be transshipped between two Philippine ports.

It is worthy to note that Section 7 of RA 10668 states that carriage by foreign vessels is not a public service, and thus, such foreign vessels are not common carriers. It is especially emphasized in the law that foreign

vessels cannot be considered as offering a public service, and thus fall outside the coverage of RA 9295, or the Domestic Shipping Development Act of 2004.

The term “public service” under the Public Service Act (Commonwealth Act [CA] 146, as amended) covers services carried out by common carriers, defined under the Civil Code as “persons, corporations, firms or associations, engaged in the business of carrying or transporting passengers, or goods, or both, by land, water, or air, for compensation, offering their services to the public.” And under CA 146, if one is engaged in public service, then he or she is required to secure a certificate of public convenience or a certificate of public convenience or necessity, as the case may be. Based on this definition, it would appear that foreign vessels covered by RA 10668 could be considered as engaged in public service, required to secure a certificate of public convenience or a certificate of public convenience or necessity, as the case may be. Because of this section of RA 10668, there appears to be an indirect legislative exemption from the requirements of obtaining certificates of public convenience in favor of foreign vessels covered by the said law.

Section 7 of RA 10668 appears to be a provision inserted in the new law which differs from the provisions of other laws which were passed to implement the constitutional provision limiting the operation of public utilities to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least 60 per centum of whose capital is owned by such citizens (Section 11, Article XII, 1987 Philippine Constitution). With the new law declaring foreign vessels engaged in domestic trade or shipping covered by RA 10668 as not being engaged in public service and not being considered as common carriers, the legislature appears to have indirectly granted them an exemption from the requirements of obtaining certificates of public convenience, as well as from the provisions of the Constitution with regard to public utilities. Such indirect grant of exemption could give rise to legal issues, as the courts had declared in a number of cases that “what cannot be legally done directly cannot be done indirectly.”

Eating His body and drinking His blood Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

T

aste and see that the Lord is good; look to Him and be radiant (Psalm 34:2-3, 4-5, 6-7). Whoever eats my flesh and drinks my blood has eternal life, and remains in me and I in Him (John 6:51-58).

Taste and see that the Lord is good

BLOOMBERG VIEW

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hina’s surprise devaluation is sure to stir up fear and loathing among the world’s economic populists. (Keep your eyes on Donald Trump’s Twitter account.) But the move deserves praise, not condemnation. It might even prove a boon for world growth.

Beijing spent much of the last year propping up the yuan to combat capital outflows, avoid debt defaults and win a place among the International Monetary Fund’s (IMF) five reserve currencies. But with growth sputtering and deflation looming, China has now reversed course, cutting its daily reference rate on Tuesday by 1.9 percent, the most in two decades. The

Chinese government has effectively admitted that risks are accelerating in the world’s second-biggest economy.

Politicians in the US are sure to call the devaluation a threat to American jobs, and politicians in Japan will bemoan its effects on their deflation fight. But it’s important to keep a sense of perspective. China has called this a one-time fix designed to push the yuan

one’s face, as when we think of Moses’s face radiant with divine light (Exodus 34) after his 40 days and nights of being with God on Mount Sinai.

In our afflictions, let us turn to the Lord and call out to Him, and He will hear us and save us, as is illustrated by the case of the psalmist. We are all encouraged to taste God’s goodness and to experience how fulfilling it is.

Psalm 34 starts off with an overflowing praise to God, proclaiming the appropriateness of blessing God at all times and with one’s whole being. The psalmist takes leave to glorify God as though in an assembly at worship where other lowly ones (the anawim), who trust and depend on the Lord, are gathered and can hear the doxology and be glad. The witness by the psalmist becomes an invitation to others to join him in rejoicing and extolling the name of the Lord. Without giving details, the psalmist confesses that he was in distress and when he turned to the Lord he was rescued. This is the reason he glorifies God and bids others to do the same.

The others are encouraged to look to the Lord, so that they too may rejoice in gratitude and their faces may be radiant with joy and not covered with shame. One’s dignity and condition is mirrored and manifested on

Unless you eat and drink...

Jesus focuses on the act of eating.

In the light of His claim to be the living bread that came down from heaven, it is clear that the acquisition of this living bread is necessary if one is to participate in what heaven gives. Because Jesus has clarified that whoever eats of this bread will live forever, anyone really wanting eternal life must, therefore, eat and receive of this living bread from heaven. To eat is to assimilate something, to receive to become part of oneself something of the

world. Jesus uses this dynamic of eating for His spiritual purposes.

When we eat the bread of Jesus and it becomes part of us, we assimilate the life and consciousness of Jesus and make it our own. The material food we eat becomes us; we become the spiritual food we eat.

The Jews had difficulty when they interpreted literally what Jesus said that it is his flesh He will give to eat. The symbolic and evocative language of Jesus underscores His teaching. The picture of eating the bread come down from heaven is now transformed into eating His flesh and drinking His blood. The flesh and blood of the Son of Man divided to symbolize the death of Jesus describes the way He is going to communicate and share His life. His death is conceived as the movement from “a grain of wheat” into “much fruit” (John 12:24). By His death and resurrection Jesus and His life will be available to all people.

You will have life because of me

The mission of Jesus is to give eternal life to the world, and He would offer Himself to give this life to all.

He makes Himself available in His self-oblation in the ritual Eucharistic meal, where eating the bread is eating His flesh and drinking the wine is drinking His blood. Through these symbolic acts those drawn to Him by the Father appropriate Jesus’ life and consciousness of love

Of language and love of country Ariel Nepomuceno

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DECISION TIME

ugust is the time when malls and stores visibly display native costumes and paraphernalia for use in school activities that focus on Philippine culture and traditions. Actually, what is being honored is our national language. And from just a weeklong celebration from August 13 to 19, it has evolved to be a 30-day affair, which is intended to emphasize the value and beauty of our common language.

The 1987 Constitution enshrines Filipino as the national language of the country. Our legislators have patriotically realized the critical role played by language not only in basic communication of ideas and sentiments but also in the strengthening of ties and relationships, both social and cultural. It solidifies national identity, builds unity and contributes to economic development.

Throughout history, a common language has been regarded as a significant indicator of the solidarity of the people who speak the language.

Debates on choices

There are opposing views on the choice of Filipino as our national language. Some would focus on why Filipino and not any other local

Give China’s devaluation a chance William Pesek

Thursday, August 13, 2015

toward a more market-determined system, in accordance with the IMF’s wishes. Besides, if China were going allin on a beggar-thy-neighbor policy, its devaluation would have been far more substantial—and even then, there’s no guarantee it would have succeeded at propping up the economy. The yen’s 35-percent plunge since late 2012 is hardly reviving Japan, any more than this year’s 10-percent currency drop is saving Australia. (And let’s be honest about the hypocrisy at work: nobody gave Tokyo or Canberra grief for their dramatic currency drops.)

It’s also important to acknowledge that Beijing’s new policy poses risks for China. The weaker yuan increases the odds of a surge in defaults on foreign-currency debt, which makes the country highly vulnerable to capital flight. In April Shenzhen-based Kaisa became the first Chinese developer to renege on such debts. The People’s Bank of China is aware a lower yuan

dialect? Critics would even go to the extent of claiming that President Manuel L. Quezon acted on the basis of the geographical region where he hailed from. That he ignored the fact that most of the people living in the rest of the archipelago then did not speak Filipino, or Tagalog as they colloquially call it. Said critics believed that the choice of Filipino as the national language would alienate other regional groups and institutionalize the disparity of existing economic conditions among those not living in the greater portion of Luzon.

But there are those who advocate the use of Filipino as a tool for inculcating pride in our struggles as a nation, a love for our heritage and a

could push others to the brink, which is why it probably won’t allow the currency to fall too much farther.

The real question isn’t whether Beijing should have devalued the yuan, but what it does with the time this maneuver buys. Given how little tolerance President Xi Jinping and Premier Li Keqiang have shown for the shock therapy China needs to wean itself off excessive investment and exports, it would be reasonable to assume the currency move is a tactic to delay reforms and reinflate the country’s stock bubble. If the government unveils new policies to prop up stocks—thus giving the impression the devaluation was essentially a stock market intervention —then it could reignite the global currency war.

But there’s a more optimistic view: Beijing might be buying some stability so it can accelerate the reform process. From that perspective, this week’s news that China is preparing

language that differentiates us from the rest of the world. It is a language that equalizes the level of debate, the unfettered exchange of ideas between those in the economically advantaged and the marginalized classes of society. It enables broader participation in the political process and nation-building.

However, there are those who believe English should instead be our main language rather than Filipino. Their belief is anchored on the argument that it is time to stop our misplaced nationalism by accepting the glaring reality that English is the gateway to an increasingly borderless world, changing at such a fast pace due to innovations in information technology. From their perspective, English is the language of power.

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that transforms dying into new life.

What Jesus here terms as “eating” is the physical crunching and chewing of the food (pagnguya in Filipino), a conscious process of probing and assimilating the food.

Jesus Christ is the life of the world.

We need to be incorporated into Him by eating His body and drinking His blood, by assimilating His consciousness of love that offers all. This is the way Jesus guarantees intimacy with Him; by eating His flesh and drinking His blood we abide in Him and He in us. And it is not satisfaction as of now temporarily only; it is to be filled forever, to hunger and thirst no more, to share in life everlasting.

This is a bold and hard saying even now. The claim is an invitation that we need to respond to.

Alálaong bagá, it is the Eucharistic meal that truly gladdens the heart and gives us a real taste of the goodness of God. To feed at the table of the Lord is to have life because of Him, and to have the assurance of being raised up on the last day to live forever. At the table of the Lord, it is not only the teaching of Jesus but His body as well that is the true bread that came down from heaven, His offered body that teaches us and His teaching for us that He embodied.

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

TO stop the promotion of teaching and knowledge of English is a complete negation of the government’s efforts at enhancing our peoples’ competitiveness in the international market. Our strong command and fluency in the use of English is our advantage that allowed us to capture jobs abroad. And we must accept that English is the language of commerce, science and technology, research and development, media, courts, and most important, political, cultural and diplomatic relations. It is, after

all, the lingua franca of the world.

Our language policy must continue to strike that delicate balance between the use of English as a vehicle for excelling beyond our national borders and protecting our own beloved Filipino language as a full expression of our cultural oneness and identity.

We must not be confused by the long-drawn debates on what constitutes a better language policy and how the latter can enhance development goals where other priorities such as poverty reduction and other social needs would be more relevant.

We shall all benefit from the continued knowledge and pragmatic use of English to gain access to global opportunities while maintaining Filipino as the language of our national soul.

From Balagtas’s Florante at Laura, Amado Hernandez’s Ibong Mandaragit or from the beautiful Filipino kundiman to OPM’s Pinoy great compositions, the use of the Filipino language is a true testament to the vibrant talent, sensitivity, candor, and deep persona of our race.

We should stand proud in using Filipino if only to find what is lost in all of us as a people. And our national language will also shield what is left of us as a nation.

For comments and suggestions: arielnepo.businessmirror@gmail.com.

to tackle its state-owned-enterprise problem looks even more promising.

According to the South China Morning Post, China is creating two new kinds of companies to supervise and regulate state-owned behemoths. The scheme is modeled after Singapore’s stateowned investment arm Temasek and, if handled well, it has the potential to alter the foundations of Asia’s biggest economy for the better.

These politically coddled monopolies are at the nexus of all of Beijing’s worst excesses—debt, overcapacity, corruption, pollution. Reducing their influence would be a vital first step for cultivating the sort of startup boom that China needs.

But it won’t be easy. Kickbacks from land grabs, insider trading and old-school rent seeking have minted countless millionaires among Xi’s Community Party comrades. These vested interests will battle Xi’s every effort to make SOEs more open, com-

petitive and conventionally profitable.

Taking on this fight would be easier for Xi if China’s exports weren’t falling (they dropped by 8.3 percent in July) and deflation didn’t loom as a threat.

That’s where Tuesday’s devaluation, and the expected boost to exports, come in. It’s plausible that SOE reform motivated the Chinese government’s devaluation decision.

If Xi is truly interested in allowing the market to play a leading role in economic decision-making, the real test will be whether his government shows the courage to open the country’s opaque financial system, tighten corporate governance and allow the media to play a bigger role in weeding out corruption. Rather than bellyaching about the latest currency move, these are the steps China critics should be watching for. Personally, I can’t help but feel optimistic that China’s yuan-regime change suggests they’re coming.

Common ground

2nd Front Page BusinessMirror

A8 Thursday, August 13, 2015

Mining royalty earnings declined by P627M in H1

R

oyalty taxes paid by mining companies operating within mineral reservation areas during the first six months of the year dropped by 56 percent, the Finance Division of the Mines and Geosciences Bureau (MGB) reported.

According to the MGB, the royalty earnings of the government during the first half of the year reached P763.66 million, P627 million lower compared to the P1.36 billion generated during the same period last year.

The steep drop in royalty earn-

ings was attributed to the suspension of three nickel companies operating in Zambales due to environmental issues.

Nickel production last year also went up substantially, as mining companies took advantage of the increase in the price of nickel from

$16/wet metric ton (wmt) to $33wmt during first half of 2014.

The royalties generated by the government represent 5 percent of the market value of the gross output of the minerals produced by mining companies within declared mineral reservation areas.

There are currently four declared mineral reservation areas in the Philippines. These are located in Zambales, Surigao del Norte, Surigao del Sur and Dinagat Islands.

The Department of Environment and Natural Resources has been pushing to increase mining taxes and government share from mining contracts through various schemes. Environment Secretary Ramon J.P. Paje earlier floated the idea of declaring more mineral

reservation areas to boost mining revenues through royalties.

Currently, the government collects 2-percent excise tax from mining companies operating outside mineral reservation areas.

Under Section 5 of Republic Act 7942, or the Philippine Mining Act of 1995, 10 percent of the amount collected shall accrue to the MGB for “special projects and other administrative expenses related to the exploration and development of other mineral reservations.”

The remaining bulk at 90 percent shall be divided between the national government (60 percent) and the local government (40 percent) where the minerals. For the first half of 2015, local government shares amounted to P274.92 million. Jonathan L. Mayuga

Recto: P3K pay hike for govt workers possible by Jan 2016

By Recto Mercene

S

tate workers could expect an average of P3,000 monthly pay increase starting January next year once the P50.6 billion in the proposed 2016 national budget for salary hike is fleshed out in a bill the Malacañang will later send to Congress.

Although the Palace is still mum on the bill’s particulars, Sen. Ralph G. Recto said that the money being sought for the pay hike “translates into an average P3,000 monthly increase per employee.

There are 1.3 million workers in the bureaucracy.

Recto arrived at the figure by dividing the proposed P50.6 billion by 1,295,056 employees in the government payroll and using 13 com-

RECTO: “I think a P3,000 average per month increase is the floor being sought. And I have to stress the fact that I am using an average here. It may not also be uniform, kasi iba-iba ang rates ng sweldo.”

pensable months in a year.

“I think a P3,000 average per month increase is the floor being sought. And I have to stress the fact that I am using an average here. It may not also be uniform, kasi iba-iba ang rates ng sweldo,” Recto said.

“Second I am assuming a January starting date. So if the increase would take effect [in] July, then we’re looking at an average P6,000 monthly adjustment. Kaya nga maraming variables,” Recto added.

Recto said it is also possible that the possible pay hike in 2016 “may just be the first installment of a bigger pay adjustment that will be implemented in phases.”

He recalled that in the initial implementation of Salary Standardization law (SSL) III, the public sector pay guide in current use was spread out over four years.

Budget Secretary Florencio B. Abad confirmed before Senators on Wednesday that his agency is drafting an SSL IV based on a commissioned study on the state of public sector pay.

Recto urged the DBM to submit the bill as soon as possible so it can be tackled “in unison” with the national budget.

“You can’t divorce the two. 27 centavos for every budget peso in 2016 is for PS,” Recto said, referring to personal services, the budgeting term for the “pay, perks and premium contributions of government workers and the pension of retired uniformed personnel.”

“There is also the need to subject the proposal to feedback and consultation from stakeholders, like government employees,” Recto said. “Kung ano man ang numero, dapat pag-aralan kung sapat ba ito o kulang?” Recto said.

“One critical aspect is the funding—clear sources of funds must be identified. It is easy to pick a figure. The challenge is to raise the cash to fund the increase,” he said.

Recto said PS expenses of the government will hit P810 billion in 2016, from this year’s adjusted figure of P745 billion. “We’re going to spend P2.2 billion a day for PS next year,” he said.

Recto reiterated his call that any pay hike should prioritize teachers, policemen, firemen and soldiers, as they constitute about four-fifths of the government workforce.

“Ito ’yung Police Officer 1, Teacher 1, Firemen 1. They’re mostly clustered around the Salary Grade 11 to 13 brackets.

They get a basic monthly pay of between P18,549 to P21,436.

These are the people who are in need of a salary hike,” he said.

At present, the government’s “Compensation and Position Classification System” has 33 salary grades. Except for Grade 33, which is occupied by one person, the President. Each salary grade has eight steps.

“So there are a total of 257 pay categories which must be studied and adjusted. There must be distinctions and differentiation between and within the salary grades,” Recto said.

“What makes the job harder is that all of these 257 pay categories must be accommodated within a ceiling, which at present is P120,000 a month--the salary the President gets,” he explained.

www.businessmirror.com.ph

briefs

dti calls on manufacturers to roll back prices

The Department of Trade and Industry’s Consumer Protection group (DTICPG) is enjoining manufacturers to reduce prices as a result of the lowering of diesel prices.

At a news conference on Wednesday, Undersecretary for DTI-CPG Victorio Mario A. Dimagiba said that prices of basic and prime commodities should be rolled back as the Department of Energy informed the trade office of the diesel price cuts.

“From the [pump price] reduction in diesel, which is used in the transport of basic necessities and prime goods, we see a reduction of .6 percent to .9 percent in the prices of basic and prime goods,” Dimagiba said.

The following goods covered by the suggested retail price (SRP) scheme should impose the corresponding reductions: Canned sardines, .09 cents; evaporated milk, .25 cents: condensed milk, .34 cents; powdered milk; .32 cents coffee refill; .27 cents; instant noodles, .07 cents corned beef, .22 cents; cement, P2. Catherine N. Pillas

thailand to ‘import’ 400 pinoy english teachers

Thailand is mulling over the hiring of about 400 Filipino-English teachers to teach some of their citizens English proficiency subjects, Ambassador Thanatip Upatising said during a brief interview at the Singapore 50th founding anniversary at the Fairmont Hotel in Makati on Tuesday night.

“Our Prime Minsiter [Yingluck Sinatwatra] will come over in September to sign a memorandum of agreement with President Aquino to seal the deal,” the envoy said.

He added that the Philippines was chosen to be the source of English teachers because of the Filipinos’ mastery of the language, as shown by the country’s success in the business-process outsourcing industry and related informationtechnology sectors.

He said those who successfully graduate from the English class would be fielded in tourism-related industries.

Bangkok has a thriving tourism industry but there is a dearth of Englishspeaking guides and hotel employees.

Upatising said he would not like to reveal more of his prime ministers’s visit.

Recto Mercene

LGUs have no power to impose tax on petro merchants–SC

By Joel R. San Juan

T

HE Supreme Court (SC) declared on Wednesday that local government units (LGUs) have no power to impose business taxes on persons and entities engaged in the manufacturing and distribution of petroleum products.

In a 14-page decision penned by Associate Justice Diosdado Peralta, the Court’s Third Division junked the petition filed by the Batangas City government seeking to collect the amount of P405 million as business taxes from Pilipinas Shell Petroleum, which operates an oil refinery and depot in Tabagao, Batangas City.

The Court upheld the January 22, 2009, and April 13, 2009, resolutions of the Court of Tax Appeals (CTA), which reversed and set aside the ruling issued by the Regional Trial Court (RTC) of Batangas City on October 29, 2004, that sustained the imposition of business taxes against Pilipinas Shell.

In seeking the reversal of the CTA decision, the Batangas City government argued that any activity that involves the production or manufacture and the distribution or selling of any kind or nature as a means of livelihood or with a view to profit can be taxed by LGUs. The petitioner stressed that such authority emanates from Section 143 (h) of the Local Government Code (LGC), which states that “The municipality may impose taxes on any business...which the sanggunian concerned may deem proper to tax; provided that on any business subject to the excise, value-added or percentage tax under the National Internal Revenue Code (NIRC), as amended, the rate of tax shall not exceed 2 percent of gross sales or receipts of the preceding calendar year.”

Furthermore, the petitioner said the CTA erred in ruling that the word “taxes” in Section 133 (h) of the LGC does not include business taxes.

In denying the petition of the Batangas City government, the Court pointed out that although the power to tax is inherent in the State, the same cannot be said for LGUs. It explained that LGUs’ mandate to impose taxes is not encompassing as it is subject to limitations as stated in Section 5, Article X of the 1987 Constitution.

The said constitutional provision

states: “Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges subject to such guidelines and limitations as Congress may provide, consistent with the basic policy of local autonomy.”

The SC added that under Section 133 (h) of the LGC, LGUs cannot impose excise taxes on articles enumerated under the NIRC and taxes, fees or charges on petroleum products.

The Court further explained that, while the LGU’s power to impose business taxes is derived from Section 143 of the LGC, the same is subject to the restrictions provided for under Section 133 (h).

“Thus, the omnibus grant of power to LGUs under Section 143 [h] of the LGC cannot overcome the specific exception or exemption in Section 133 [h] of the same Code,” the SC stressed.

“When there is in the same statute a particular enactment and also a general one, which in its most comprehensive sense would include what is embraced in the former, the particular enactment must be operative, and the general enactment must be taken to affect only such cases within its general language as are not within the provisions of the particular enactment,” the decision read.

Concurring with the ruling were Associate Justices Teresita Leonardo-de Castro, Martin Villarama, Jose Portugal Perez and Estela Perlas-Bernabe.

The case stemmed from the notice of assessment issued on February 20, 2001, by Batangas City through its City Legal Officer Teodulfo Deguito and City Treasurer Teresa Geron demanding payment of P92.37 million and P312.65 million as business taxes for its manufacture and distribution of petroleum products.

In 2002 the respondent was only paying the amount of P98,964.71 for fees and other charges which include the amount of P1,180.34 as mayor’s permit.

Pilipinas Shell, however, filed a protest on April 17, 2002, contending among others that it is not liable for the payment of the local business tax either as a manufacturer or distributor of petroleum products. gued that the mayor’s permit fees are exorbitant, confiscatory, arbitrary, unreasonable and not commensurable with the cost of issuing a license.