BusinessMirror August 17, 2015 by BusinessMirror

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A broader look at today’s business Saturday 2014 17, Vol. 10 No. 40Vol. Monday,18, August 2015 10 No. 312

TRANSIT-ORIENTED DEVELOPMENTS PRICED 15% HIGHER

ROPERTIES close to train stations are about 15 percent more expensive than condominiums that are less than a kilometer away, as railways are still considered the fastest transportation mode in Metro Manila despite their deteriorating state, a study conducted by an online property portal showed.

Monday, August 10, 2015 E 1

Leading Job growth in the digitaL economy T

By Claudio Fernández-Aráoz

here is no escaping employment market upheaval in the digital age. Consider the global trends cited by erik Brynjolfsson and Andrew McAfee in a recent interview with hBr. In most countries, both developed and developing, private employment and median family income have stopped growing at the same pace as labor productivity and real gross domestic product (GDP) per capita—mostly due, they argue, to technological advances. In emerging markets, labor’s share of gross domestic product is declining in 42 out of 59 countries, including China, India and Mexico—areas with 90 percent of the world’s population. Fewer jobs and diminishing wages can only lead to greater inequality and global instability. So what are we to do? Learn from countries that are bucking the trend. In Singapore median income, GDP per capita and labor productivity have all grown dramatically over the past 30 years; unemployment stands at just 3 percent; wages account for a larger percentage of GDP than they did in 1980; and middle-income earnings have increased sixfold in the past five decades. With the highest median wage among newly industrialized asian nations, the city-state also ranks first globally in worker productivity and attitude. Singapore has succeeded by investing large portions of its public budget in education, a strong civil service and the development of great leaders, proactively moving its economy toward technology-based manufacturing, and more recently to knowledge-based research and development sectors.

Professions-based education— which strengthens future employability for students—has also been a key area for investment and innovation in Singapore. Today, 95 percent of its young people progress to post-secondary education institutes, but there are also different pathways to work, including a German-style apprenticeship and certification program. Most recently, Singapore launched a fund in which the government provides a yearly stipend to be used for continuing education at all levels. Can other countries follow this model? With the right leadership, I think so. On a recent trip to africa I was greatly impressed by the african Leadership academy, founded in 2008, which offers a highly selective two-year panafrican pre-university program. Nearly 800 young people have already studied there, and the goal is to develop 6,000 leaders over the next five decades—who will, it’s hoped, transform africa as national presidents, central bank governors or CEOs of major corporations. This is the sort of institution that public and private organizations around the world should look to build. We need extraordinary leaders to face the monumental challenge of preserving human dignity in the digital age. Claudio Fernández-Aráoz is a senior adviser at the global executive search firm Egon Zehnder and the author of It’s Not the How or the What but the Who.

Does stAting WhAt Your CompAnY stAnDs for AffeCt Your Bottom Line?

ESPECT, integrity, communication and excellence: These were Enron’s selfprofessed values, before accounting fraud brought down the firm. So you’d be justified in thinking that the values listed on corporate web sites don’t really matter. yes, talk is cheap, and public proclamations aren’t the same thing as living up to one’s values. Still, stated values might also represent a firm’s aspirations. If that’s the case, maybe the values on a company’s web site are meaningful after all; perhaps Enron is the exception rather than the rule. In a paper published earlier this year, researchers at INSEaD and IMD business school arrived at this conclusion: Don’t dismiss the corporate values statement. It seems to be linked to financial performance. The researchers measured which values and how many were listed for the Fortune 100 in 2005. They compared each measure to the firm’s return on assets over the subsequent three years. The researchers found that the more values a firm lists on its web site, the better its financial performance. and the more those

values differed from competitors’ values, the better the company performed. These relationships might not be causal, the authors cautioned, but they offer a plausible reason for the link. “One could argue that espoused values are the calling card to recruit talent and to show good citizenship,” they wrote. Why does listing different values than competitors correlate with performance? The authors argue that such a list reflects a timeless principle of competitive strategy: differentiating yourself is a classic way to stay profitable. These results suggest that values do matter, and that when firms state those values publicly, they’re saying something meaningful about who they are. But those values shouldn’t be considered immutable. Companies that changed their values between 2005 and 2008 had higher return on assets than those that did not. So perhaps the lesson isn’t quite that dynamic values beat stable ones. It’s that even timeless values aren’t a substitute for good strategy.

By Mark W. Schaefer

NEW research report from the Society of Digital agencies found that there has been a dramatic spike during the past year in the number of companies who no longer work with outside marketing agencies—27 percent, up from 13 percent in the previous year. These companies aren’t getting rid of marketing—they’re just bringing it in-house. Mitch Joel, president of Mirum, recently called this inhouse movement one of the industry’s most disruptive trends. after interviewing several adagency executives and marketing leaders in a diverse group of businesses, I’ve found common themes that help explain why:

1. Agencies are slow. an executive from one of the world’s largest ad agencies told me that his company was too big—and consequently too slow—to compete in the lightningfast digital space. 2. Agencies are stuck on advertising. agencies have been slow

to leverage social media, content marketing and integrated models. a brand manager told me that although many agencies are creating social-media spin-offs, they still operate like traditional ad agencies.

3. Continuity has become more

important than campaigns. In an ad campaign, you make a pitch, win a deal, execute the creative component and start over. But in a socially oriented world, the connection never stops. you fund, staff and execute continuously.

4. Companies no longer want to outsource customer relationships.

as Big Data gives way to the real insights in Little Data, we can drive our efforts down to individuals. When the primary focus of our marketing finally shifts from mass broadcasting to discrete customer relationships, is that something we really want to send to an outside company? Do we want somebody else to own these critical relationships?

5. Companies want to own the

data. Marketing activities today generate unprecedented amounts of data. Who owns that data? Who owns the algorithms to interpret the data? This information must be kept in-house.

6. Are agencies attracting the best digital marketing talent? Recently, I

was brought in to do marketing triage for a large company in Florida. They had already fired two large national agencies. I was allowed to see both agencies’ social-media marketing plans—formulaic, cookie-cutter approaches that were out of touch with the strategy, resources and political realities of the company. Market dynamics and customer needs are rapidly outpacing the agency model. Maybe it’s time for companies to be more directly involved with their marketing, more accountable and more intimately involved with their customers.

ay you are competing in a fast-growing industry. How much do you care about profits versus market share? It’s conventional wisdom that businesses should go for market share, but that’s not a law of physics. you don’t have to go for share. Whether to pursue profits or share is one of the questions posed in an ongoing tournament I conduct that uses computer simulation to test strategic decision-making among executives, students and other management enthusiasts. More than 700 people have entered the tournament. The tournament asks entrants to allocate 100 points between profits and market share. On average, 700+ people have allocated 55 of their points to market share and 45 to

profits in the tournament’s “fast growth” industries. They clearly intended their strategies to gain market share. In industries with much slower growth, people put markedly more emphasis on profits. That’s also what conventional wisdom advises. yet, in over 173 million tournament simulations the quest for market share has led to price wars 90 percent of the time, subtracting value from the industry. So following the “rule” produced results worse than if the participants had done nothing at all. Price is the only lever tournament strategists could pull. So they cut price because they obeyed the common practice of going for market share in fast-growing industries. They made different decisions in industries where growth was slow or negative.

There is always exactly 100-percent market share in any market. That’s why, despite the vigorous price wars, tournament strategists gained little or no share. (No one gets ahead when everyone moves in the same direction.) What they got, 90 percent of the time, was mutually assured destruction. I hope you now see go-for-share more as an assumption to be assessed critically. Here’s another rule: We must keep our strategy secret from competitors. In the tournament, groups always hide their strategies from the other groups. Real-life collusion is illegal and it’s explicitly forbidden in these games, but as in real life, nothing prevents groups from signaling or taking action visible to other groups. By reflexively hiding, they obey a rule that isn’t there and hold themselves back by

limiting their options. Fortunes are made by noticing such practices and challenging the assumptions behind them. Fortunately, breaking rules is free. all you need is curiosity and the courage to challenge conventional wisdom. Some suggestions: n Switch mind-sets and mentally place yourself outside your company as a dispassionate analyst. What rules are the company’s people following? n When you hear advice containing “obviously,” ask the speaker whether that advice is based on evidence or common practice? n What would famous rule-breakers say to your company? n apply all of the above to yourself.

network’s landing station somewhere in Mindanao. “We already have three landing stations in Luzon, hence our east-west diversity. We would like to have something in Mindanao to link us to the US,” he said. Nazareno noted that his company is still in the planning stage, and is still talking with foreign telecommunications providers for partnerships. See “PLDT,” A12

Continued on A12

IS PHL READY TO SCRAP RICE IMPORT QUOTAS IN 2017?

Mark W. Schaefer is executive director of Schaefer Marketing Solutions. His latest book is The Content Code.

Question what you ‘know’ about strategy By Mark Chussil

Lamudi Philippines, a subsidiary of Rocket Internet, said condominium projects situated near the Metro Rail Transit (MRT) Line 3 stations along Edsa peg average prices of about P125,129 per square meter (sq m), or about P16,195 more than a similar condominium project located about a kilometer away from the train stations. “The price gap becomes even wider, depending on the condo and its developer,” it noted. The property listing firm picked the Boni and Magallanes stations as

ULTIMEDIA conglomerate Philippine Long Distance Telephone Co. (PLDT) is planning to form a consortium with multinational telecommunications firms in establishing an international undersea cable system that will link the Southern Philippines to the US. President Napoleon L. Nazareno said his company is mulling over the prospect of building the fiber-optic

special report

6 reasons marketing is moving in-house

MONDAY MORNING

Walter Frick is a senior associate editor at HBR.

By Lorenz S. Marasigan

leading job growth in the digital economy BusinessMirror

PLDT MAY PARTNER WITH FOREIGN FIRMS FOR UNDERSEA CABLE LINK

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improving access to Perspective quality BusinessMirror IMPROVING health ACCESS care isTO QUALITY HEALTH CARE IS SANOFI’S PITCH sanofi’s pitch

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E4 Monday, August 17, 2015

B E L

ITH new developments in the pharmaceutical industry—including the implementation of the Mexico City Principles (MCP)—and the growing importance of emerging markets like the Philippines to trade and investment, the BM has thought proper to interview Sanofi Senior Vice President for Asia Jean-Luc Lowinski to know his views and get a glimpse of how a global leader, like Sanofi, is positioning itself in the midst of advancements in the medical field.

NONIE REYES

Here is the excerpt of the Q&A with Lowinski, who holds a PhD in Veterinary Science from the University of Nantes, France, and is an Institut Européen d'Administration des Affaires (INSEAD) graduate: Aside from Sanofi’s presence in developed countries, the company is also investing in emerging markets. What is the strategic importance of the emerging markets to Sanofi? Countries throughout the emerging markets, including the Philippines, have immense growth potential for Sanofi. This is driven by an expanding middle class, increasing urbanization and greater overall investment in health care. With around 70 percent of the world’s population, Sanofi is a health-care leader in these markets with sales of around €11B in 2014. We are excited about the opportunity to dramatically improve the health and well-being of the people in the developing world through innovation and we will continue to work hard to serve their health-care needs. How do you plan to sustain this leadership position? Leadership is built on innovation. This is true for both established and emerging markets. Through our innovative vaccines, medicine and solutions, we help address the health-care needs of real patients in the real world. We recognize that health-care needs continuously evolve, and we are committed to innovating to adapt to these needs. Sanofi will potentially launch up to six new products in 2015 alone, and approximately one new product every six months between 2016 and 2018. The other part of the equation is access. As a health-care leader, we have a responsibility to collaborate with our industry peers and local governments to improve access to quality health care. This is particularly important to emerging markets. The marketing strategies in the pharmaceutical industry have drastically changed over the years. How is Sanofi adopting to these changes? We continue to significantly transform the group to be focused on improving access to quality health care and meet unmet needs, but also on delivering the sustainable growth required to allow us to continue to invest in innovative research and developments (R&D). Our ambition is to offer an integrated set of businesses within the healthcare space with opportunities to create synergies across activities, both upstream and at an R&D level and downstream in the market place. R&D has always been, and will continue to be, the cornerstone of our company. The advancements in science mean that more targeted, more effective treatments are within reach and we are ready to take on this challenge. The changing face of the industry, healthcare needs and scientific discovery led us to the realization that we need to diversify to grow the business. We need to look outside at partnerships and acquisitions to succeed in delivering future innovative solutions. We have been successful in searching out the best science and the best companies to acquire and partner with. We have strongly reinforced our business in particular areas, such as diabetes, oncology, rare diseases and consumer health care. We will continue to look for opportunities and partner with the best, whomever and wherever they may be. The successful companies of tomorrow are those that go beyond delivering products to delivering real solutions and services. We have identified and delivered on our growth objectives and continue to undergo a deep organizational transformation. This has included a complete restructure of R&D, the expansion of our footprint in biotechnology through the acquisition of Genzyme and refocused regional and global operations to be ready to meet the next challenge and opportunity around the corner.

PERSPECTIVE

In connection to integrity, the Philippines is in the process of adopting MCP. How will this affect the promotion/ marketing practices of pharma companies? The Philippines is expected to be one of the first countries to implement the “Mexico City Principles (MCP) for Voluntary Codes of Business Ethics for the Biopharmaceutical Sector” which was first endorsed during the 19th Asia-Pacific Economic Cooperation (Apec) Economic Leaders Meeting in Hawaii. Sanofi supports this completely and we are absolutely convinced that higher ethical standards in the pharmaceutical sector will ensure a level playing field that benefits everyone: beginning with patients, doctors and health-care professionals, as well as our own employees. I will be speaking precisely on this critical issue during the Pharmaceutical Compliance Congress and Best Practices Forum happening on August 17 in Manila and look forward to a productive conversation that helps patients both here in the Philippines and all throughout the world. The APEC Biopharmaceutical Sector Workshop happening on August 19 and 20, which I am also participating in, is an equally important opportunity to highlight the importance of business ethics particularly in the biopharmaceutical industry.

By Alladin S. Diega Correspondent

And how will the adoption of this law benefit the Filipino patients? Adoption of the MCP highlights the strong commitment of the Philippine government to promote a whole-of-society approach to integrity that will ultimately benefit Filipino patients. Ethical relationships are crucial to the country’s mission of developing and making quality medicines available for everyone. We strongly support efforts to encourage greater local support for/compliance with ethical marketing practices. It is critical for us in the health-care industry to protect the independence of decisions taken by health-care professionals in prescribing medicines to their patients. Ethical promotion ensures that a) health-care professionals have access to information they need; b) patients have access to medicines they need; and c) medicines are prescribed and used in a manner that provides maximum health-care benefit to patients. Ultimately, we are all focused on patient welfare and safety. The MCP are perfectly consistent with this objective.

PESO exchange rates n US 46.1290

First of three parts

early two decades after Manila opted to maintain import caps on rice, the Philippines has yet to entertain the idea of letting go of the

trade protection. When the extension for the so-called quantitative restriction (QR) on rice expired in 2012, the Philippine government declared its intention to extend it further to 2017. During negotiations for the ratification of the World Trade Organization (WTO) in 1994, the Philippines Continued from A2

n japan 0.3707 n UK 72.0304 n HK 5.9488 n CHINA 7.2088 n singapore 33.0390 n australia 33.9733 n EU 51.4800 n SAUDI arabia 12.2978 Source: BSP (14 August 2015)

A2 Monday, August 17, 2015

BMReports BusinessMirror

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Is Phl ready to scrap rice import quotas in 2017? Continued from A1

chose to maintain the QR on rice for 10 years instead of slapping tariffs on imports. When it expired in 2004, Manila negotiated for an extension and was allowed to continue implementing it until 2012. In requesting for the extension, Manila said the QR is vital to safeguard the livelihood of rice farmers. The Department of Agriculture (DA) said rice is the predominant staple in the Philippines and the primary source of employment for at least 2.4 million farmers, who are small landholders. The QR on rice had allowed the government to limit the entry of cheaper rice imports, especially from neighboring Asian countries such as Thailand and Vietnam. Maintaining it, however, did not come cheap, as the Philippines had to make concessions to garner support for its bid. For one, the minimum access volume (MAV) of rice was increased to 805,200 metric tons (MT) annually, from the previous 350,000 MT. Rice that falls within MAV is slapped a tariff of 35 percent, lower than the 40-percent tariff imposed on “outMAV” imports. In extending the QR on rice in 2004,

industry sources said the Philippines was forced to lower the tariff on pork offal to 5 percent from 40 percent. In two years, the government would again have to grapple with the dilemma of whether to let go of rice-import quotas or fully open up the country’s rice market. With this in mind, the DA has started to conduct nationwide consultations on preparations for the possible removal of the QR in 2017. Last year the DA commissioned a study on the possible impact of the QR expiration on the country’s farm sector. One of the findings of the study is that the local rice industry stands to lose P170 billion in potential income and some 11 million farmers could be displaced. The study is a midterm assessment of the agriculture program of the government, which covered the years 2011 to 2013. Under a fully liberalized scenario, the study noted that a trade-policy shift is “vital,” entailing adjustments in the scale of imports, palay production and farm-gate prices. In a copy of the presentation obtained by the BusinessMirror, scrapping rice-import quotas would have tremendous implications. For one, retail prices would drop to P17 a

kilogram (kg), from the current P30. Because of the stiff competition posed by cheaper imports, palay output would decline to 13 million metric tons (MMT) from 18 MMT. Also, a liberalized rice market could cause rice imports to shoot up to 5 MMT from 600,000 MT. With the availability of cheaper rice from abroad, farm-gate prices could fall to P7.7 per kg from the current P16 per kg. The midterm assessment also reviewed the Food Staples Sufficiency Program (FSSP) of the Aquino administration, which was rolled out in 2011. The two major goals of FSSP are increasing farm productivity and competitiveness, and enhancing economic incentives and enabling mechanisms. The FSSP specified strategies for attaining these goals. These include strengthening price support and raising domestic procurement, allowing market forces greater role in setting retail prices, and distributing rice to poor households and victims of calamities. To reduce rice imports, the DA had encouraged the consumption of brown rice, white corn and root crops. The government had also launched a program to encourage consumers to avoid wasting rice. The program also called for a shift in the

National Food Authority’s (NFA) role. The DA had initially wanted the food agency to just focus on buffer stocking or local rice procurement and minimize its involvement in rice distribution and importation. Under the FSSP, the DA sought to strengthen credit provision to small farmers via the Sikat-Saka Program and expand crop-insurance coverage. In its assessment, the study noted that while unmilled-rice output rose in the years 2011 to 2013, production did not reach the targets set by the government. Factors, such as strong typhoons and drought, had made it difficult for the DA to hit its riceproduction targets. The study also noted that the NFA’s procurement of rice from farmers under the FSSP was lower compared to the pre-FSSP period. Part of the NFA’s mandate is to buy rice from farmers to beef up its buffer stock. In 2008, when the Philippines was affected by the global food crisis, the DA was forced to step up its purchase of palay from farmers to ensure that the food agency would have enough stocks. Non-governmental organization Rice Watch and Action Network (R1) called on the government to act on the impending

expiration of the QR in 2017. R1 Convenor Aurora Regalado said the government needs to fast-track the implementation of initiatives aimed at improving the competitiveness of the country’s rice sector. These initiatives include expanding irrigated areas, agricultural credit and crop insurance, and providing agricultural extension services. “The overall effect should lower the cost of production of palay, to make it competitive,” Regalado told the BusinessMirror in an interview. A separate study disclosed that in terms of yield in irrigated and intensively cultivated areas, the Philippines is not far behind from its neighbors. The study, however, concluded that the Philippine rice sector needs more improvement. The study, titled “Benchmarking Philippine Rice Economy Relative to Major RiceProducing Countries in Asia,” was also commissioned by the DA, in close collaboration with the International Rice Research Institute. The study covered six Asian rice-producing countries—the Philippines, China, India, Indonesia, Thailand and Vietnam. The results of the study have yet to be discussed with stakeholders in the country’s rice sector. To be continued

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Monday, August 17, 2015

ROCKWELL PRIMARIES EXPANDS PORTFOLIO, PROVIDES MORE THAN A HOME Celebrating Rockwell heritage and delivering better than good quality developments

ELEBRATING over two decades of success in providing high-quality living spaces and communities, Rockwell Land has extended its brand heritage with Rockwell Primaries, its newest subsidiary that provides new-to-Rockwell home owners the opportunity to experience the Rockwell lifestyle at a more reasonable price.

Comfort, quality living, security and safety are some of the priorities that Rockwell Primaries takes into account when developing more than just a home. With Rockwell Primaries’ two developments namely 53 Benitez and The Vantage at Kapitolyo it is now possible for young families, couples, professionals and even investors to experience a community of shared values. “We want to provide our growing number of customers an investment that ensures their money’s worth. We aim to provide more than a home where our residents can experience a community of shared values. For 20 years, Rockwell has earned the reputation of ensuring that our properties are

well-maintained and secure. We are more than committed to deliver on a development that is not only well made but also prioritizes the needs and interests of our Rockwell residents,” said Malou Pineda, Senior Vice President, Rockwell Primaries Development Corporation. Rockwell Primaries offers a fresh new look to its properties, by delivering the same quality living that people associate with Rockwell Land at a more attainable price. With their most recent project, The Vantage at Kapitolyo, Rockwell Primaries makes affordable living easy by strategically situating this property in a desirable location within the metro, specifically in Pasig.

The Vantage at Kapitolyo

THE Vantage is Rockwell Primaries’ second property that has been introduced in the market. It is the first high-rise and integrated vertical village development in Kapitolyo, Pasig. Rockwell Primaries strengthens its commitment to provide safe and secure living developments for its customers with its first high-rise development. The Vantage by Rockwell Primaries offers the convenience of a variety of food establishments and major thoroughfares in and around Kapitolyo and Ortigas area. It provides residents the ideal home that situates them closer to key destinations in the metro. Being at the vantage point of everything important, new-to-Rockwell residents will get to enjoy the privacy of condo living within a close-knit, affordable premium, and well-managed property.

“There is a lot in store for Rockwell Primaries in the second half of 2015 and we are more than excited to share the good news to our valued clients and future buyers. Our venture to provide the first highrise project of Rockwell Primaries shows that we are continually addressing the demand for quality living spaces within strategic locations,” shared Pineda. The launch of The Vantage continues to uphold the reputation that Rockwell Primaries is building as a real-estate company that provides security, comfort, accessibility and quality lifestyle for its residents. For more details on Rockwell Primaries visit the Power Plant Mall North Court on August 8 to 20, 2015 or check out the website at www. rockwellprimaries.com.ph or the Facebook page at www.facebook.com/RockwellPrimaries.

Economy

A4 Monday, August 17, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

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LTFRB on Uber clampdown: We are just doing our job

By Lorenz S. Marasigan

and Transportation Franchising and Regulatory Board (LTFRB) Chairman Winston M. Ginez was appalled by the corruption allegations hurled against his office, when it announced the clampdown against transport-network companies (TNCs), such as Uber and GrabCar, for their “illegal” operations. Minutes after reports on the regulator’s initiative of cracking down on the operations of Transport Network Vehicle Service (TNVS) operators—or partner-drivers of Uber and GrabCar—went online, Internet users quickly criticized the government for it. Transport advocates even called the initiative as a way to milk money from TNCs, and that the endeavor is backward looking. B ut for Gi ne z , h i s of f ic e should not take the blame on

this issue. He maintained that his men will just do their job, as the law requires. In a lengthy response to critics, the chief land-transportation regulator said his office did its part in disseminating information that Uber, GrabCar and their partners should secure franchise to operate. GrabCar was accredited as a TNC last month, boasting that it was the first to do so. Uber, on the other hand, is still working on the

requirements. Their partner-drivers, meanwhile, have yet to apply for their own accreditation. Under the memos issued by the LTFRB and the Department of Transportation and Communications (DOTC), both the company and the driver should apply for their accreditation. It has been three months since the memos were published on major newspapers and on the Internet. GrabCar and Uber were quick to praise the government for this landmark regulation, which is the first in the world. “Yet, despite the Philippine regulations becoming effective on May 30, Uber has not yet applied for accreditation. Its partner vehicles continue to ply our streets and engage in public land transportation without the requisite franchise,” Ginez said. He added that DOTC officials reached out to Uber officials, urging them to comply with the registration regulations, but Uber just kept on promising that it will file its application. “Thus, in fulfillment of our sworn duty to implement our public land-transportation law, the

DOTC and the LTFRB gave Uber and its partner-vehicles and the partner-vehicles of GrabCar, which is LTFRB-accredited already, until August 20 to apply for and be granted a franchise. We just want them to apply for and be granted with franchise by complying with the department order and memos that were issued three months ago,” Ginez said. The application fee for the issuance of a franchise for TNVS operators is only P520 for the first two units. A fee of P70 per unit will be added for the excess. No other fee is required to be paid other than the application fee. “In apprehending unregistered Uber and GrabCar vehicles, we do not and will not put Uber or GrabCar out of business,” he said. He was also disappointed at how blogs and media organizations spinned the republished memo on the new classifications of transport modes. These organizations claimed that the state’s supposed deployment of its “own premium taxi services” was the apparent reason for the LTFRB’s warning against Uber and GrabCar drivers. “The allegation that Premium

Taxi was created to compete with Uber and GrabCar is without basis,” Ginez said. “The introduction of premium taxis won’t kill Uber or GrabCar. By design, its introduction intends to pose as a challenge to current taxi operators for them to upgrade and improve their traditional taxi operation.” According to the memo, a premium taxi is a metered service using a black sedan that sports a yellow plate. The premium-taxi franchise will be given to qualified operators with a minimum unit count of 25, which will also sport a top light that identifies them as premium taxis. These sedans can pick and drop passengers a long the streets, unlike Uber and GrabCar that can only be booked through an online application. “The goal of rolling out premium taxi is to provide alternative-taxi transport to more discerning and higher-end taxi passengers who are willing and ready to pay higher fare for better service. The target clientele of premium taxi are domestic and international tourists, professionals, millennials and the like,” Ginez said.

Court of Appeals stops arrest, trial of cjhdevCo executives

HE Court of Appeals (CA) has ordered the Regional Trial Court (RTC) of Baguio City to dismiss the two complaints of

malversation of public funds filed by the state-run Bases Conversion Development Authority (BCDA) against four top executives of Camp John

Hay Development Corp. (CJHDevCo). In a 15-page decision penned by Associate Justice Zenaida GalapateLaguilles, the CA’s Special Tenth Divi-

sion granted the petition for certiorari and prohibition filed by Robert John Sobrepeña, CJHDevCo CEO and chairman; Ferdinand Santos, president; Alfredo Yniguez, executive vice president and COO; and Emily RocesFalco, chief finance officer, seeking to set aside the orders issued by the Baguio RTC in 2013 that found probable cause for their arrest and trial. “Wherefore, premises considered, the instant petition for certiorari and prohibition is granted. The orders of the public respondent RTC dated June 27, 2013 and October 31, 2013 in criminal cases 34422-R, and 34423-R, finding probable cause for the petitioners’s arrest and trial, concerning the charges of malversation of public funds in the amounts of P1,490,717.26 and P2,839,969.40 are set aside. Accordingly, the aforesaid criminal cases are dismissed for failure to establish probable cause pursuant to...the Revised Rules on Criminal Procedure,” the CA ruled. The CA pointed out that the amount of P4.33 million allegedly misused by the four CJHDevCo officials is not considered public

funds, which is an essential element of malversation under Articles 217 and 222 of the Revised Penal Code. It noted that the character of the case filed by BCDA is just a mere civil suit for a collection of sums of money. “For it is elementary that nonpayment of an indebtedness is not a criminal act. More so is a mere delay in the payment of civil obligations, which in fact have already been paid, not the proper subject of a criminal charge nor penal litigation for malversation of public funds,” the CA said. The appellate court noted that no less than the Constitution declares that no one may be criminally charged for a nonpayment of a sum of money. “There can be, even at the outset, no criminal offense to speak of,” the CA added. Concurring with the ruling were Associate Justices Florito Macalino and Manuel Barrios. Prior to the controversy, the BCDA entered into a lease agreement with CJHDevCo for the use, management and operation of 247-hectare property in John Hay Special Economic Zone. Joel R. San Juan

Poe: Climate change making at least 12M Pinoys poorer By Recto Mercene

he impact of climate change is aggravating the situation of at least 12 million poor Filipinos, the second biggest population of at-risk people in the AsiaPacific region. This is brought about by storms and floods, taxing the government’s resources, as extreme weather events continue to create new demographics, according to Sen. Grace Poe. From 1998 to 2009, the country has lost at least $24 billion in gross domestic product value due to the impact of climate change, the senator said, citing a report by the Intergovernmental Panel on Climate Change. “Extreme-weather conditions destroy not just people’s homes but also their sources of food and livelihood. With every storm that passes, more people are displaced, more people go hungry, more lose their livelihood,” Poe said. “Climate change just keeps creating a new set of poor Filipinos, so we have to mitigate its impact,” she said. The Philippines ranks fifth in the world among countries most affected by extreme-weather events from 1994 to 2013, according to the 2015 Long-Term Climate Risk Index prepared by Germanwatch,

an environmental organization that analyzes the quantified impacts of extreme-weather events. Last month more than 20,000 people were affected by floods in Central Mindanao. Damage to agriculture and infrastructure in South Cotabato alone were estimated at P109 million. The Philippines’s annual mean temperature is expected to increase by 0.9 to 1.1 degrees Celsius by 2020, and 1.8-2.2 degrees Celsius by 2050. A 1-degree change in temperature will cause a 10-percent to 15-percent drop in agricultural production, experts say. On the other hand, the increase in rainfall volume, which the Philippines is experiencing now, causes more frequent landslides and floods that will also be damaging to crops. “Either way, farmers, who are already among the poorest in the country, will suffer a significant decrease in crop yield. And with the Philippines’s growing population, food will become even more unaffordable for those who are already struggling,” the senator said. Poe urged greater private-sector involvement in helping build the resilience of at-risk communities and in coming up with sustainable adaptation and mitigation initiatives.

briefs self-imposed srp for lpg pushed

A party-list lawmaker on Sunday urged brand owners to implement a voluntary suggested retail price (SRP) mechanism for liquefied petroleum gas (LPG). House Deputy Minority Leader and LPG Marketers’ Association (LPGMA) Rep. Arnel Ty said consumers should benefit fully from the 15-percent drop in the international contract price of fuel. “The brand owners, themselves, should publicly declare or publish at least once a month their SRPs, which can then serve as a benchmark for their retailers, as well as consumers,” Ty said. Ty said he is not asking the Department of Trade and Industry to fix the SRP for LPG, the way the agency sets the SRP for other prime commdities, from canned sardines to school supplies. Jovee Marie dela Cruz

group hits denr lifting of semirara’s suspension

The Philippine Movement for Climate Justice (PMCJ) on Sunday criticized the decision of the Department of Environment and Natural Resources (DENR) to lift the suspension of the environmental compliance certificate of Semirara Mining and Power Corp. recently. Sought for comment, an official of the DENR defended the decision to lift the suspension order of the company. The DENR, however, gave the company an “ultimatum” to shape up “because a third mining incident may prompt concerned government regulators to review the company’s permits to operate the coal mine.” According to PMCJ, the move to lift the company’s ECC for the coal mine in Semirara “was a show of blatant disregard for the 14 lives lost and the environmental degradation and destruction” caused by the company’s operations. Jonathan Mayuga

lack of quorum threatens blbar passage The chairman of the House Committee on the Bangsamoro Basic Law on Sunday said the lack of quorum is a big threat to the passage of the proposed Basic Law on the Bangsamoro Autonomous Region (BLBar) at the lower chamber. “We should really look at this problem. Speaker [Feliciano Belmonte Jr.] and Majority Leader [Liberal Party Rep. Neptali Gonzales II of Mandaluyong] should be able to appeal to all the congressmen to at least come to have a quorum and stay until the deliberations [of the BLBar] are finished,” Centrist Democratic Party Rep. Rufus Rodriguez of Cagayan de Oro said. He said that there are at least 17 lawmakers who want to interpellate the peace measure. The House is eyeing to pass the the peace measure on final reading by September 20, or before the proposed P3.002-trillion national budget for 2016 is tackled on the floor. Jovee Marie dela Cruz

paraÑaque’s top 50 firms hold job fair

THE Parañaque City government has partnered with its top 50 locatorcompanies in conducting a job fair today (August 17) as part of its continuing commitment to provide employment opportunities for residents in the area, particularly the newly graduates. The activity, through its Public Employment Service Office (Peso), will be held at the City Hall grounds from 8 a.m. to 4 p.m. Interested job applicants must be at least 18 years old, at least high-school graduates, and must bring copies of their résumé during the event. According to Henry Leonardo, Peso head, job vacancies available include engineers, accountants, nurses, cashiers, service crew, hotel crew, waiters, drivers, warehouseman, electricians and welders, among others.

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Economy BusinessMirror

Monday, August 17, 2015 A5

JFC wants apprenticeship program extended

he Joint Foreign Chambers (JFC) is urging the Senate to speed up its deliberations on the bill improving the National Apprenticeship Program (NAP), which is meant to boost the employability of young workers.

Senate Bill 136 is pending on second reading. Its counterpart bill in the House of Representatives was already approved. In a statement released over the weekend, the JFC said the country badly needs the National Apprenticeship Training Act to institute reforms in the existing program. The reforms pushed by the chambers include extending the apprenticeship period in private firms, as well as the joint implementation of the NAP by the government and the private sector to fulfill the training-allowance requirement. “The current program allows apprentices to be trained by a private firm up to six months and to receive a fee of 75 percent of the applicable minimum wage. In 2013 Tesda [Technical Education and Skills Development Authority] reported that 56,832 students enrolled under the program; 51,912 graduated and 13,011 were hired by the companies where they have

Govt steps up drive vs investment scams By Butch Fernandez

alacañang has ordered the Department of Trade and Industry (DTI) and Securities and Exchange Commission (SEC) to step up the government’s campaign to boost public vigilance against the proliferation of so-called Ponzi schemes and other pyramid investment scams. Communications Secretary Herminio B. Coloma Jr. confirmed over the weekend the Palace directive to crack down on perpetrators of the scams following reports citing increasing complaints against fraudulent investment schemes that already duped unwitting investors in various regions. The Palace official said the National Bureau of Investigation and the Philippine National Police teams have also been mobilized to go after the scammers. Coloma said the DTI and the SEC were also asked to mount a massive information drive to alert the public on different schemes used to lure potential investors who end up losing their hard-earned savings. He said the DTI’s Consumers’ Protection and Advocacy Bureau and SEC’s Enforcement and Investor Protection Department have intensified efforts to make the public more aware of these illegal investment schemes. The secretary added that a recent DTI report had noted the mounting cases of investment scams involving use of the Internet. He added that the DTI had also received complaints involving other fraudulent schemes using the Internet amid the proliferation of online shopping Coloma noted that both the DTI and the SEC have already issued warnings to the public to be wary of online scams. He said estafa charges have already been filed against those found to be involved in these scams based on evidence gathered by probers. At the same time, Coloma appealed to the public to remain vigilant and carefully consider investment proposals promising huge and instant return on investments to avoid being the next victim of these scams.

DFA machines for e-passports won’t be ready till mid-2016 By Recto Mercene

he Consular Affairs of the Department of Foreign Affairs (DFA) has admitted that the new machines designed for the e-passports would not be ready till the middle of 2016, thus, delaying the applications of hundreds of overseas Filipino workers (OFWs). In a radio interview on Sunday, Assistant Secretary Frank R. Cimafranca said the transition to the new machines acquired by the DFA, to be implemented by the government printing plant in Malvar, Batangas, would require several more months to run smoothly. Cimafranca recently said the backlog in the passports that need to be processed by the DFA is now over 42,000. Every day more than 12,000 passport applicants flock to the main Consular Office in Pasay City and regional offices in the provinces. The delay could affect many OFWs, whose applications for work have been approved, and who might no longer be accepted by the hiring companies abroad if the delays proved too long. Local recruitment agencies, on the other hand, would also be affected since they could not provide the required number of qualified household-service workers due to lack of passports. The ill effects of this delays could possibly affect the amount of remittances from OFWs in the coming years, recruitment consultant Manny Geslani said.

apprenticed. Such a small number indicates the importance of reforming and expanding the program to provide a route to long-term jobs for much larger number of young Filipinos,” the JFC said. The provision on the training allowance, which should not be below 75 percent of the minimum wage, was changed in the House version to include the phrase: “Provided, however, that contributions to the apprentice by national and/or the local government and non-

governmental organizations shall be considered in computing the 75 percent.” “This language would assure trainees to receive 75 percent of minimum wage, combining what the employer pays and what the government may pay in order to attract more investors to the Philippines,” the foreign chambers added. As provided for in the House version of the bill, the extension of the period will depend on the

complexity of the skills needed under a specific apprenticeship program. The NAP is carried out by the Tesda and the private sector. Apprentices are those who are at least 15 years old. The JFC is a coalition of the American, Australian, New Zealand, Canadian, European, Japanese and Korean chambers in the Philippines, with companies represented by the Philippine Association of Multinational Companies Headquarters. Catherine N. Pillas

Tourism

A6 Monday, August 17, 2015 • Editor: Carla Mortel-Baricaua

Nature, Adventure

CABADBARAN River

ATEGA ancestral house

HIGANTENG Bato in Cabadbaran

PLAZA Rizal and Cabadbaran Church

S  P  B L. S

ANY seasoned and learned travelers today look for three elements for a consummate destination—nature, adventure and culture. They go beyond the typical beach hideaways and the night parties that go with them. For them, travel should be a soul-inspiring journey and encounter with a local culture. Cabadbaran City, the provincial capital of Agusan del Norte, may not dazzle you instantly with its simplicity. But soon enough, you will realize that just like the mythical land of Serendip, this is a serendipitous place awash with pleasant surprises that satisfy these three elements.

Nature

THIS eight-year-old city in northern Mindanao takes pride in its serene beaches, making you feel like a stranger on the shore where time seems to stand still. While it may not be as dazzling like the popular white-sand getaways, it is not every day that you can have an almost infinite stretch of fine sand without the madding crowd. The sun mesmerizes you as it dramatically sets in the horizon of the Butuan Bay, and as it gently peers behind the mountains to greet the dawn of a new day. With the coastal area is Calibunan Marine Protected Area (MPA), a showcase for a successful artificial fish-sanctuary restoration which is now teeming with 76 species of aquatic life. A pagang coral reef, which was just about the size of the human hand when it was transplanted, has grown into more than 3 square meters in area. With a depth of 16 meters, it is ideal for snorkeling and free diving. The sea is connected by the verdant rivers emanating from the mountain’s bosom, whose lush forest cover has helped maintain ecological balance. The meandering Cabadbaran River is being groomed as a tubing site with its rushing voluminous whitewater whose whole 9 yards spans an adventurepacked course of more than an hour of fun-filled adrenaline-pumping ride.

This scenic waterway is also ideal for a lazy old-fashioned cruise aboard paddle boats, bamboo rafts, pump boats and, soon, kayaks.

Adventure

MOUNTAINEERING is the common adventure here due to its rugged topography. Towering at 2,012 meters is Mount Hilong-Hilong, Caraga region’s tallest peak, considered as among the most technically difficult mountains to ascend and is only suitable for intermediate and expert climbers. According to the Protected Areas and Wildlife Bureau, it has seven major waterfalls, an ancient rock art, a carpet of giant white anthuriums, as well as unexplored cave systems. The mountain is also the nest of the endangered Philippine Eagle, habitat of the Philippine wildcat, flying squirrel, tarsier and microscopic flower not found anywhere else in country. It is also a habitat to some 120 birds species, 59 of these can only be found in the archipelago. It is also a sanctuary of indigenous frogs, reptiles, mammals, and ecologically threatened flora. Closer to the city is the PongkayMount Agong-ong Prayer Mountain, a moderate climb whose reward is a breath-taking panorama of Butuan Bay, Mount Hilong-Hilong and Cabadbaran River. Adventurer-pilgrims who want to commune with the Almighty through Mother Nature can take time to meditate at the mountain top altar. Higanteng Bato is an amazing geological formation in the city’s hinterlands, which is the biggest boulder in northern Mindanao. Measuring 54.13 meters tall, 124 meters in circumference and 31 meters wide, this rock has a waterfall and a cool stream at its foot.

MOUNT Hilong Hilong

MOUNT Pongkay prayer mountain

Culture

HERITAGE is Cabadbaran’s unique character, being the de facto heritage village of Agusan del Norte because of its American-era ancestral houses which have survived the destruction of World War II. A must-see is the 111-year-old Don Andres Atega Mansion, regarded as a “living museum” because it is still inhabited by the descendants of the grand old man. During the Japanese Occupation, the house was used as officers’ quarter, and many people suspected of being guerrillas were killed in its basement. In many occasions, it has hosted prominent national personalities when hotels were not yet in place. This well-preserved house has adapted to the changing times by adding contemporary features and rooms

m&Entertainment

e and Culture

tourism@businessmirror.com.ph • Monday, August 17, 2015 A7

REVIVING AN ANCIENT BOAT CULTURE

MAGUINDANAOAN royalty at Pakaradyan Festival street parade

GINAKIT boats of Malapatan, Sarangani

TINAGTAG cooking in Malapatan

KANDULI meal setup

WATER tubing

AILY decorated ancient Moro boats called ginakit parade at the Sarangani Bay in Malapatan town as part of the town’s 10th Pakaradyan Festival, which also celebrates the municipality’s 26th founding anniversary. The indigenous ginakit is used in transporting royals and tribal chieftains around the waters of Mindanao during the precolonial and Spanish era. Pakaradyan is a Maguindanaoan word literally meaning festivity and

often held with a kanduli, or thanksgiving, and a celebratory pagana, or banquet feast. The festival also included a street-dancing contest and a land float competition depicting the theme. With the theme “Embracing History, Culture and Resources in Shaping Development,” the festival showcases community development, social empowerment and the peaceful coexistence of the B’laan, Moros and Lumulupyo settlers as the tri-people of

Sarangani province. Malapatan is also made famous for exquisite inaul hand-woven fiber, which has found its way around the world as an elegant ethnic fiber, and the tinagtag sweet delicacy, a staple of the Maguindanaoan tribe. Situated at the mouth of the Sarangani Bay, Malapatan boasts of a rich coastal ecosystem and diverse underwater life due to its numerous marine-protected areas which promote aquatic life.

HANDWOVEN inaul from Malapatan

SUBLIAN FESTIVAL IN BATANGAS CITY SENIOR dancers perform in the “Patimpalak Sublian sa Batangas” (Subli Dance Competition) at the Batangas City Sports Coliseum PHOTOS BY KIKO CABUENA

ATANGAS CITY celebrated its 46th Foundation Day recently highlighted by various activities, including the Sublian Festival. The festival was started by city Mayor Eduardo Dimacuha on July 23, 1988, on the annual observation of the cityhood of Batangas City. The objective was to renew the practice of the subli. The city government of Batangas is one of the Cultural Center of the Philippines’s (CCP) regional art centers in Luzon under the Kaisa Sa Sining program of the CCP Cultural

Exchange Department. A subli is presented during a feast, as ceremonial worship dance in honor of the Holy Cross. The image of the Holy Cross was found during the Spanish rule in the town of Alitagtag. It is the patron saint of ancient town of Bauan. Indigenous to the province of Batangas, the subli is made up of lengthy prayers, songs and dances in predetermined arrangement. The dancers are made up of one, two or eight couples, where the males shuffle in intense fashion and hit the ground using a

SUBLIAN Festival in Batangas City PHOTOS BY KIKO CABUENA bamboo stick, while the females dance with a sophisticated wrist and finger movement. Themed as Yamang Batangenyo! Palakat na ih! Tara na sa Sublian Festival!, other events included the Parada at Sublian sa Kalye (Sublian Street Parade), wherein partakers marched and danced the subli on the streets. The Sublian Float Parade started in the morning after the floral offering, participated in by the city government employees, non-governmental organization, schools and sociocivic organizations clad in native

attire with adorned subli hats to symbolize Batangueño attributes and customs. The celebration also featured the Lupakan (making of a snack called nilupak) at Awitan (singing) held at the patio of the Basilica of the Immaculate Concepcion, as well as the “Patimpalak Sublian sa Batangas” (Subli Dance Competition) held at the Batangas City Sports Coliseum, ending with the “Paghahatid sa mga Mahal na Poong Sto. Niño at Sta. Cruz” (Bringing the images of the Holy Child and Holy Cross back to the Church).

ONLINE DILIGENCE PAYS OFF FOR SEDA HOTELS

INTERIOR of Artega ancestral house

without corrupting its stately architecture and interiors. Those who want to travel back in time can stay at Casa Alburo, a cozy ancestral home-turned-hotel dating back to the Commonwealth era. A no-frills board and lodging facility, it will surely enrapture you with its Old World feel. Local authorities and heritage advocates are planning to set up walking tours of the art deco houses which have been mute witnesses of the city’s checkered past and march to progress. Visits to the ancestral homes should be arranged with the city tourism office since they are still inhabited. Cabadbaran also boasts of a repository of artifacts excavated in its territory decades ago, attesting that it had a flourishing pre-colonial civilization.

Currently stored at the makeshift museum in the old municipal building, these relics will soon find a permanent home at the City Museum which will be completed this year. Local historians assert that these ancient finds bolster their longstanding claim that the environs of Butuan Citymay indeed be the site of the first Catholic Mass in the archipelago in 1521, and not Limasawa as generally accepted. Another mirror of its rich culture is Dagkot Festival, a religious feast which pays homage to the Nuestra Señora de Candelaria and the symbolic light that the baby Jesus represents upon His purification. Held every February 2, this has inspired barangays to rediscover their identities and portray them in their own festivities.

OTEL reviews on the Web can make or break a brand in the age of digital media. Travelers will always choose a hotel based on comfort and convenience. But in the age of digital media, positive comments and good reviews online are helping more than ever to keep the guests coming, according to Andrea Mastellone, Seda Group general manager. Because 87 percent of all travelers today use the Internet for travel planning, Seda takes its online presence very seriously, he says. Of that number, 43 percent read the reviews about hotels and other travel suppliers, according to a 2014 Euromonitor report. The Italian-born hotelier, thus, finds the time to thank reviewers for positive reports, as well as to assure the others that his or her concerns will be addressed. Seda’s online diligence has paid off. Ranked among the best in the industry by travel web sites Expedia and TripAdvisor, Seda hotels by AyalaLand Hotels and Re-

sorts Corp. has grown to four properties in Luzon and Mindanao —and soon to open a fifth hotel in Iloilo City—in less than three years since it launched its first property in Bonifacio Global City. The world’s leading online travel company Expedia recently disclosed to Seda officials that the wholly owned Filipino hotel brand is one of only four hotels in Manila with a high rating of 4.5 (5 being the highest). The young hospitality brand has held its own against better-known international chains in the Philippine capital, as well as in Davao City. Seda BGC and Seda

Centrio in Cagayan de Oro City have also been awarded certificates of excellence by travel web site TripAdvisor, whose ratings are aggregated from hundreds of reviews from hotel guests. The reviews, nevertheless, have simply helped to create greater awareness for the benefits of location, warm Filipino hospitality and high service levels offered by each Seda property, Mastellone observes. Its Ayala Land heritage assures that every Seda hotel is in a strategically located area in the center of a city or a rising business district. Moreover, every hotel is part of a self-contained community with scores of restaurants and shops, offices and residences just a few steps away. “In whatever city the hotel is located, guests are assured of a high-energy and vibrant location,” Mastellone observes. Nevertheless, each property has its own distinct offerings. Seda BGC attracts international business travelers whose headquarters are located in the fastest-growing and most

cosmopolitan business district in the country; Seda Centrio is the first lifestyle hotel in Cagayan de Oro City, so is Seda Abreeza in Davao and, soon, Seda Atria in Iloilo; while Seda Nuvali offers business and leisure facilities in a resort-style environment. But in every Seda location, the reviews focus on the service: how the staff go out of their way to please; how people remember names and preferences of guests; how consistently warm the front-liners are, all the time ensuring efficiency in service delivery. “It’s a five-star hotel with an official ranking of four stars,” a guest observes. Mastellone recalls that prior to the establishment of Seda, which means “silk” and refers to the seamless service it aims to offer, guests seeking international service levels in the Philippines would go to the more familiar foreign hotel chains. But as confirmed by the growing popularity of this Ayala-owned hotel chain, discerning travelers have discovered Seda to be an excellent alternative.

TheElderly

Monday, August 17, 2015 • Editor: Efleda P. Campos

BusinessMirror

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Tito Varela rises as a basketball star and retires as a Caloocan vice mayor

Story and photo by Oliver Samson | Correspondent

OMETIME during his active years in the league, someone claiming to be the late Gregorio “Ka Roger” Rosal, spokesman for the Communist Party of the Philippines, dispatched a death threat to scare him and, perhaps, sell a basketball game he was officiating. But it did not or at least make him believe. If Rosal was a fan, intimidating a professional referee for a basketball violation call was light years away from Leftist politics. Luis Yaranon Varela, 61, who is more popularly known as Tito Varela, knew it was just a rabid basketball fan who was angered by the defeat of his team. “Fans agree and disagree with you,” he said. “Those whose team lost the game are likely to disagree.” Varela, sixth among seven children, was born in Samar on January 4, 1954. He was a fifth grader when he went to Manila in 1965. He graduated from primary at Novaliches Academy (now Metro Manila Academy) in 1967, where he also finished his secondary education in 1971. Due to his parents’ financial difficulty, he took the job of a

LUIS “Tito” Varela, 61, is a former Philippine Basketball Association player and referee. He served as councilor for one term and vice mayor of Caloocan for three consecutive terms until 2006.

security guard at the University of the East (UE) after graduating

from high school. But his height of 6 feet and 1 inch was about to give him the leap of his life. He was invited to try out for the Red Warriors, and eventually played for the team. This gave him a scholarship for Bachelor of Science in Business Administration. At the age of 19, he played his first amateur game. After winning two University Athletic Association of the Philippines (UAAP) championships and about a year before his graduation, he was drafted to play in the Philippine Basketball Association (PBA) in 1975. He played for Tanduay, 7Up and Crispa Redmanizers. In 1975 he became part of the Philippine contingent to the Asian Basketball Conference. He retired in 1986, but his basketball career did not end there. Varela became a professional PBA referee in 1988. Although a referee should not favor a team, a player, or a coach, he highly esteemed some for being professionals. “I liked one team coach who would confront me for a call, but after the game, he would speak to me warmly,” he said. “Some coaches take it personally and bear it for a long time.” He still remembers some disappointed fans removed one of his car tires. Following 13 years of running after game-court violators, he finally retired from the PBA in 2001. “I raised and educated my children and sustained my family on

basketball,” he said. He has four children: Two finished medicine, one finished commerce, the other an informationtechnology course. He was elected to the city council of Caloocan for one term in 1988 while still a PBA referee. As a councilor, he worked with non-governmental and people’s organizations. In 2001 he was elected Caloocan City vice mayor, a position he held for three consecutive terms until 2009. As a presiding officer of the city council, he could not propose any resolution, he said. The position is limited to presiding sessions. “A role something like you are a referee,” he said. He last held public office in 2006 as the vice mayor of Caloocan. By this time, he was supposed to be enjoying his retirement back in the province with his wife, Margie. “Someone is encouraging me to run again for public office,” he said. “If I do, it will be for seniors.” He is currently involved in the physical-fitness program of the senior citizens of Caloocan. He teaches and encourages them to stay fit through dancing. Aerodance is fit and safe for seniors, which is the basic of ballroom dancing, he said. Varela is thankful to everyone who has been around him from his days in UE, to the PBA and to public offices. He returns the blessing he and his family had received by helping others.

love is not blind

A couple of blind elderly walk around the downtown section of Baguio City after going to the market to buy their daily needs. MAU VICTA

San Juan City Osca proposes P1.023-M budget for older citizens By Claudeth Mocon-Ciriaco Correspondent

SUPER ‘LOLO’ Ted Torres, 62, exudes youthful buoyancy as he rides the 840 M, the longest zipline in Asia at Dahilaya Forest Park Resort in

Bukidnon. MAU VICTA

HE Office of the Senior Citizen Affairs (Osca) in San Juan City has proposed a P1.023million budget for its annual Gender and Development (GAD) Plan for year 2016 to 2019. Teresita C. Cumba, Osca head, said the budget will be allotted for the activities of the 20,000 senior citizens of the city. The activities include camaraderie, sportsmanship, physical fitness, the annual Elderly Week, and Walk for Life. “We have yet to receive the official approval from Mayor Guia G. Gomez for our proposal. But, I have heard that she already approved it during our recent visit in Cebu,”

Health spending to gobble up more of U.S. economy in next decade

PENDING on health care will take up an increasing proportion of the US economy over the next decade, as the population ages and more people gain insurance coverage under Obamacare, a government report said. Payments for hospitals, doctors, drugs and insurance will rise by about 5.8 percent a year through 2024, 1.1 percentage points faster than overall economic growth, actuaries at the Centers for Medicare and Medicaid Services said on Tuesday in an annual study. Health spending will account for 19.6 percent of gross domestic product (GDP) in 2024, up from 17.7 percent last year. The acceleration in health spending is a change from the past few years, when the recession that ended in 2009, and its aftermath, kept growth about in line with the economy. Still, it’s slower than in the three

decades before the economic downturn, when it rose at about 9 percent a year, according to the report. “There are some long-lasting factors that will most likely keep growth in health spending modest, even with a greater amount of the population insured,” Sean Keehan, a CMS economist, said on a conference call with reporters. A lot of the spending growth comes from millions of people gaining insurance through the Patient Protection and Affordable Care Act —the insured share of the population is projected to climb from 86 percent in 2013, to 92.4 percent by 2024. At the same time, the country is aging. By 2024, the number of Medicare beneficiaries will climb to 70.3 million from 54.5 million this year, while Medicaid members will number 78.1 million, up from 70.5 mil-

lion. Medicare covers the elderly and disabled, while Medicaid is intended for the poor. What’s not yet clear is whether provisions of the Affordable Care Act designed to rein in the pace of spending increases, particularly in Medicare, will be effective. The US no longer provides a forecast for what health spending would be in the absence of the ACA. “To the extent that these programs have been implemented and actually illustrated savings, they’ve been incorporated,” Gigi Cuckler, a CMS economist, said on a conference call with reporters. “It’s still too early to determine whether these demonstrations will have a lasting effect on health spending.” The spending-growth rate isn’t expected to return to prerecession levels in part because higher deductibles and copays mean that

consumers are bearing more of the costs of care than in the past, according to Keehan. Individuals may be more reluctant to spend money on health services that aren’t covered by insurers. The US dedicates far more of its GDP to health care than other developed nations. Health spending was 10 percent of GDP in Canada last year and 11 percent in Germany, according to the Organisation for Economic Cooperation and Development. Expensive cures for hepatitis C contributed to a 12.6-percent jump in prescription-drug spending in 2014, the biggest increase in more than a decade. Prescription medicines are expected to account for 10.4 percent of health spending in 2024, up from 9.3 percent in 2013, while the share going to physicians and clinical services will decline by a percentage point, to 19.1 percent. Bloomberg News

Cumba said in an interview. Cumba was referring to the city government’s recent visit to Cebu City on July 22 when both cities forged a sister-city agreement. Cumba said the budget, once approved, will help in their goal to enlighten, empower and energize the seniors to be active in the community. O f t he prop ose d bud get , P243,750 will be allotted for “Paskuhan ni Lolo at ni Lola” for the bedridden and sick senior citizens from District I and II; P44,600 for the annual certificate cash award and grocery, especially for the four centenarians of the city; P46,000 for the “Healthy Lifestyle ni Lolo at ni Lola”; and P220,000 for the Elderly Week celebration and Walk for Life in San Juan City at the Mall

of Asia Arena for the regional Gawad Kalinga and for the tokens of the participants. The budget will also assist in the monthly monitoring and validation of senior citizens in every barangay and the continuous advocacy of Republic Act 9994, or the Expanded Senior Citizens Act. Last June 20 Gomez said the senior citizens participated in the annual Ground Golf Tournament at the Pinaglabanan Shrine. “We want them to be active and to enjoy. We have regular zumba, aerobics, bicycle and walking,” Gomez said, adding that these activities will help develop a positive and healthy outlook among the city’s aging population and encourage social interactions with their peers.

Senior citizens to get more benefits

ENIOR citizens will soon get a 20-percent discount and exemption from value-added tax on all Food and Drug Administration (FDA)-approved nutritional food and drinks. Party-list Rep. Carlos Isagani T. Zarate of Bayan Muna, author of House Bill 5903, said it is an obligation of the government to make essential goods, health and other social services available to people at affordable cost with prioritization to the underprivileged, sick, elderly, disabled women and children. Zarate said the bill would help the elderly, most especially the underprivileged ones, gain access to nutritional food and drinks. He said illnesses like diabetes, renal disorder and hypertension are also common which make the elderly resort to nutritional food and drinks. “The measure will update and

enhance the original cat by expanding its scope while putting in mind the new options brought to us by the technological innovation of our time that can uphold one of the act’s objectives to improve the total well-being of the elderly,” Zarate said. Party-list Rep. Neri J. Colmenares of Bayan Muna, another author of the bill, said at present, FDA-approved nutritional products come in relatively unaffordable prices, which make them accessible only to rich people. Colmenares said these products have a high potential of improving the health of the elderly by boosting their nutrition and aiding their digestion, which is a common concern among senior citizens. “This kind of opportunity for health development should be made accessible to every senior citizen,” he said. PNA

The Regions BusinessMirror

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Editor: Dionisio L. Pelayo • Monday, August 17, 2015

New water source enough to rest Davao City acquifers for 30 years PAY CELL-PHONE CHARGER A customer waits for his cell phone to charge at a coin-operated charger located in some bus terminals in the provinces. The charger costs P10 per five minutes of use. MAU VICTA

Outgoing Albay PNP director orders stronger anti-illegal fishing drive B M M. U Correspondent

EGAZPI CITY— Outgoing Bicol police director chief supt. Victor P. Deona directed his police commanders to strengthen the campaign against illegal fishing in the region and file the charges against the perpetrators of a lady anti-illegal advocate in Camarines Sur. Described by Philippine National Police Director General Ricardo Marquez as a cop with a remarkable accomplishments, Deona resumed his new post as chief of the PNP Criminal Investigation and Detection Group on Wednesday. He was the Bicol PNP chief since 2013. A non-Bicolano former police regional director had been denounced as a protector of illegal fishing in the region with his deputy reported to have often been seen meeting with big-time commercial fishing vessels in the ocean. The Catholic Church in Albay called the attention of Malacañang over this and resulted in the relief of said PNP official on illegal gambling. On July 29 an anti-illegal fishing advocate, Gerlie Menchie Alpajora, 33, of Sangay, Camarines Sur, was gunned down in her residence in front of her two sons as illegal fishers stepped up its war and propaganda against the illegal-fishing campaign. Alpajora is the secretary of Sangay Tuna Fishing Association (STFA), a community organization that actively assists law enforcers in monitoring fish catch and illegal fishing. Police cited the killing of Alpajaro as very much related to her advocacy against illegal fishing. Deona said police has already identified

the suspect in Alpajora’s murder, but refused to elaborate pending his arrest. Oceana Philippines issued a statement strongly condemning the killing of Alpajaro whose activities include giving seminars about government fisheries programs, and conducting information campaigns in the villages around Lagonoy Gulf in Camarines Sur, one of the country’s major fishing grounds. Oceana is an international organization focused solely on oceans, dedicated to achieving measurable change by conducting specific, science-based campaigns with fixed deadlines and articulated goals. Deona said Alpajaro already received death threats prior to her killing. He said some members of STFA also received threats after her killing. Despite the threats, however, Alpajaro and her group continued with their activities against illegal fishing, Deona said. Bicol PNP statistics showed that a total of 2,698 persons engaged in illegal fishing in various Bicol coastal waters were arrested in 2014 against the 627 arrested in 2013. Of the 2,698 illegal fishers arrested, 2,027 have been jailed and charged in court adding a total of 64 fishing vessels were also seized in Masbate and Sorsogon. In a news statement, lawyer Gloria EstenzoRamos, vice president for Oceana Philippines, said the killing of Alpajaro must be given immediate justice. She called Alpajaro as Oceana Philippines’s “hero” who dedicated her life in the service of the country and people in furthering the organization’s goal toward sustainable fisheries.

B M T. C | Mindanao Bureau Chief

AVAO CITY—The pristine water north of downtown here is enough to supply 70 percent of this city’s current drinking-water needs and can allow the Davao City Water District to rest for 30 years the city acquifer currently supplying the city’s drinking water. Water District Spokesman and lawyer Bernardo D. Delima said the water volume of Tamugan River in the mostly forested Baguio District is estimated to supply most of the city’s water needs for the next 30 years, enough to recharge the city’s acquifer system. The extraction of the surface water is also being awaited by the residents in the northern areas of Buhangin, Indangan and up to Barangay Lasang in the boundary with Panabo City in the northeast. For

B C M-C Correspondent

HE Technical Education and Skills Development Authority (Tesda) has poured in millions of pesos for the two provinces in the north to train an initial 11,500 beneficiaries and make them ready for employment or to start a business. Tesda Director General Joel Villanueva said the scholarship slots will be available to

and Pilipinas Shell Foundation Inc. (PSFI) have signed a memorandum of agreement (MOA) to jointly undertake mangrove and beach forestprotection and rehabilitation efforts in areas affected by Typhoon Yolanda. Mangroves are critical ecological buffers that protect coastlines and shield vulnerable inland areas during storms, minimizing damage such as those sustained during Yolanda. Signing the MOA are (from left) PDRF President Rene Meily, Shell Social Investment Manager Jackie Ampil, PDRF Cochairman Jaime Augusto Zobel de Ayala, PDRF Cochairman Manuel V. Pangilinan, Shell Chairman Ed Chua and PDRF adviser Bill Luz.

Capas to become a city by 2019 Correspondent

LARK FREEPORT—Capas, the leading first-class municipality in Tarlac, will be a city by 2019. This was confidently declared by municipal Mayor Antonio C. Rodriguez Jr. over the weekend, even as he vowed to go after, hammer-andtong, against the parties involved in the dumping of Canadian garbage in one of its barangays in violation of local ordinances and international accord, including the Basel Convention—the international agreement governing waste disposal. Rodriguez said Capas is already categorized as partly an urban municipality, with a population of 130,000 and annual revenue of over P60 million as of June this year. By 2019, the town that sits on a land area of 376.39 hectares is forecast to have more than 200,000 population and internally generated revenues of P100 million and, thus, fully qualified for cityhood, Rodriguez said in last Friday’s media forum “Balitaan,” organized by the Capampangan in Media Inc., in cooperation with the Clark Development Corp. (CDC). Tarlac, a landlocked province in Central Luzon, is hosts to a city, Tarlac City, which also serves as the provincial capital, and 17 municipalities with 511 barangays. The province is divided into three congressional districts.

Records show that Capas’s annual budget this year stood at P278,069,878, or P121,789,004 higher than its P156,280,874 budget in 2009, the year before Rodriguez took over as mayor. Its internal revenue allotment (IRA) also posted an P82,149,829 increase at P214,359,177 for this year from the previous P132,209,348 in 2009. Revenues generated by the town this year reached P63,710,701 or P39,369,175 higher than the previous level of P24,071,526. The second-termer mayor attributed the rise in the town’s internal revenues to the following: the entry of fresh private investments and increase in real property tax (RPT) collection. During the years 2010 to 2015, some 1,293 new business establishments were registered in Capas, boosting business-permit collections by P35,419,537 as compared from the previous five-year period of 2005 to 2009. The town’s RPT collections from 2011 to 2014 also jumped from P5,503,862 to P15,623,164 from the P10,119,302 tax-take in the period 2007 to 2010. Capas also generates an average of P5 million annual revenues from tourismoriented activities and businesses in Barangay Santa Juliana, a popular a jump-off point for tourists visiting the crater of Mount Pinatubo, which erupted in 1991. A 2-percent gross income earned is also derived from the revenues of the Metro Clark Waste

would close the 27 extraction wells within the Dumoy acquifers and the 20 other production wells outside the acquifers. Only about 10 wells would be left running to supply the Toril and Lubogan areas, which Delima said would not be supplied by the river waters. By 2019 also, the unserved areas of Buhangin, Talandang and Indangan would experience sufficient water with sufficient pressure, he said. However, in an earlier interview with the BusinessMirror, Delima said the problem of unreliable and unsafe water systems maintained and managed by private-housing developers would be left to the homeowners’ associations to resolve. “We cannot just enter and force our way in because we can be faulted by the Commission on Audit, which protects them,” he said. He said some posh subdivisions have already turned over to the water district their water systems, and a homeowners’s group in another posh subdivision in Mintal, west of this city, forced the developer to turn over the water system to the water district.

Tesda to train La Union, Pangasinan residents to be employable or form own businesses

PDRF, PILIPINAS SHELL TIE UP FOR MANGROVE REHABILITATION The Philippine Disaster Recovery Foundation (PDRF)

B A M

a long time, these areas have had to suffer low-water pressure and issues of sandy particles and other sediments flowing with the water. The water-district project to extract water from the river would cost P12 billion, including a P2-billion bulk water-supply contract with the Aboitiz Group, which would also operate a run-of-the-river mini-hydroelectric power plant downstream. Councilor Leonardo Avila III, chairman of the City Council committee on the environment, said

the water district has submitted to the council an exception from a watershed prohibition on constructions inside the watershed regions. He said the Watershed Management Council, assigned to evaluate and assess all activities inside the watershed, already finished its evaluation and has submitted its findings to his committee. Avila said in his regular Saturday program Konsensya sa Kinaiyahan at Radio 5 FM station here, that the committee may tackle the WMC findings on Monday. “Probably, this project would be granted exemption because this is a government project and it involves the use of water that would be used for the welfare of the residents, which are contained in the provision for exemptions.” Delima said the project would take four years before the city would finally use the Tamugan River waters. Between now and July next year would be the period to get the permits and other documentary requirements, and for the next three years would be the construction period. When fully operational, the water district

Management Corp. (MCWMC), where Capas is host to its sanitary landfill in Barangay Kalangitan which is now embroiled in an ongoing controversy following the “surreptitious and illegal” dumping of garbage imported from Canada contained in some 29 40-foot container vans. Rodriguez said he has ordered the return of eight 40-foot container vans containing Canadian garbage that are still in the barangay after they were prevented from dumping its content at the sanitary landfill. Rodriquez said that, under the MCWMC contract, only domestic trash originating from the provinces of Tarlac and Pampanga, Baguio City and some parts of Metro Manila are allowed to be dumped in Barangay Kalangitan. “We in Capas and the whole of Tarlac were surprised to learn that MCWMC was dumping the Canadian trash in the Kalangitan landfill in violation of the terms of its contract with the Tarlac provincial government,” Rodriguez said. When asked if the Canadian trash in question was toxic, Rodriguyez said, “No one is sure because the experts of the Department of Environment and Natural Resources have been giving conflicting answers and assessments.” Still, the mayor said he fully supports the move of the Tarlac Sangguniang Panlalawigan to impose sanctions on the MCWMC for the violation of the terms of its contract. The sanctions may come in the form of heavy penalties or the suspension of that contract, Rodriguez said.

residents of La Union (1,504) and Pangasinan (9,931). All scholarships will be implemented through Tesda programs including Training for Work Scholarship Program, Private Education Student Financial Assistance, Special Training for Employment Program, and Bottom-Up Budgeting. “We hope that the youth of these provinces can take the lead in pushing the growth of their respective provinces. Through their skills, they can get employed, improve the living condition

of their families and their communities,” Villanueva said. As the agency prepared to make available more scholarship slots, a fresh batch of trainees completed their training. “Thousands of rewarding, skilled jobs go unfilled. Tesda and technical-vocational institutions, through our various programs, hold an important key to addressing the skills shortages,” he added. In ceremonies at the St. Louis College of San Fernando, La Union gymnasium, Villanueva

led in feting around 300 graduates of the STEP. A total of 100 graduates coming from Ilocos Sur and Ilocos Norte were also recognized. The graduates received toolkits to help them start their livelihood. The ceremony also saw the launch of TESDAMAN@Your Service, which featured the services offered by Tesda graduates sponsored by the association of private institutions in the province. The free services included manicure/ pedicure, massage, haircutting, hair/foot spa and demonstration on food processing.

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Opinion BusinessMirror

editorial

Government failing and blaming game

eachers are used to students coming up with excuses for failing to complete an assignment or a project. Sometimes these explanations can get very creative. However, the best way to reason out is the same as that of telling lies—keep it simple and believable. When a person wants to avoid taking responsibility for a failure, that person must find someone or something to put the blame on. An elementary pupil can always blame a younger brother or sister—or even the dog—for ruining the homework assignment; government has to reach just a little farther. The probability of second-quarter economic growth beating the first-quarter’s dismal-growth numbers has all but evaporated. The government reported that agricultural output in the first half of 2015 grew by only 0.7 percent. The first-semester growth in 2014 was 1.4 percent, and the first quarter in 2015 saw agricultural output up 1.78 percent. Agricultural output actually contracted in the second quarter by 0.5 percent, but the internal numbers show how bad the situation really is. During April to June, the production of crops—including important things, like rice and corn—fell by 3 percent year-on-year. Measured in peso value, palay production was down by 14 percent from a year ago. The government attributed part of that to lower farm-gate prices, but the primary reason was lower production. We are told by the Philippine Statistics Authority (PSA): “The significant reduction in palay production was due to a contraction in harvest area and reduction in yield as a result of the prolonged dry spell, insufficient rainfall and intense heat.” Now we can blame the severe El Niño weather condition for our woes. But then, a closer examination shows that “the National Irrigation Administration-run Aris Dam 2 had to be shut down for the rehabilitation of canals.” “In Bukidnon, yield reduction was caused by insufficiency of irrigation water from the National Irrigation System,” the PSA said. There are probably other examples of government’s failure to provide enough water in the irrigated areas. The El Niño condition should not be a surprise at all. The El Niño cycle occurs regularly and generally takes three to seven years. Weak El Niños happened in 2004 and in 2006. Moderate conditions from El Niño happened in 2002 and 2009. Very strong occurrences, such as what we are having now, took place in 1982 and in 1998. While the economy is much more diversified now and less dependent on agriculture than before, in 1998 the economic share of agriculture fell by 21 percent. In part due to the drop in agricultural production, economic growth in 1998 was a negative 0.6 percent. Every 16 years or so, there is a harsh El Niño, but as so often happens, the government is taken by surprise and is caught unprepared. Then we get all kinds of excuses. Perhaps there was a comprehensive and long-term plan created to prepare the country’s agricultural industry for the next severe El Niño, like we are experiencing in 2015. Perhaps some government exec’s younger brother or sister lost the plan. Or was it eaten by the dog?

PCSO opens 48th branch office Atty. Jose Ferdinand M. Rojas II

RISING SUN

omorrow, August 18, I and the other directors of the Philippine Charity Sweepstakes Office (PCSO) will be in Tuao, Cagayan, to open the agency’s 48th branch office and turn over ambulances to municipalities in the area. This is a continuation of a yearlong series of such activities related to PCSO’s branch-network expansion and Ambulance Donation program, and the fulfillment of the agency’s major final outputs for the year as committed to the Governance Commission for GOCCs (government-owned and-controlled corporations), or GCG. At the moment, we are on target for both these key result areas and other MFOs as well, including the number of retailers (700 more Lotto outlets as of June) and the evaluation of new games and products (accomplished). It is under the Aquino administration that serious steps toward the enhancement of professionalization of government service have been taken. The intentions are, among others, to upgrade personnel qualifications and standards and hold government agencies responsible and accountable for their performance.

In the case of the PCSO and other GOCCs, the GCG (headed by Chairman Cesar L. Villanueva with Commissioners Angela E. Ignacio and Rainier B. Butalid) acts as an advisory and oversight committee, and provides valuable and helpful guidance on how to adhere “to the highest standards of corporate governance,” as their mission states, and align corporate programs and strategies with national development goals and policies. nnn

I was in Paete, Laguna, last week with fellow PCSO directors Betty B. Nantes and lawyer Mabel V. Mamba to deliver 11 ambulances to various municipalities there. We were welcomed at the town plaza by Paete Mayor Rojilyn Bagabaldo, who took us on a tour of the town after the ambulance turnover ceremony. Paete is known for the artistry and skill of its wood carvers; the

town’s name came from the word paet or pait—chisel. We visited the workshop of a famous son of Paete, Angelo Baldemor, who began carving when he was 10 years old. He creates realistic depictions of everyday things, such as rice, dried fish, and flowers from baticuling wood and paints them in their natural colors. His sunwashed studio displays his art and tools in all its nooks and crannies—a gallinera-type bench carved with orange santan by one corner; carved wooden bilaos of rice and fish on the walls; sleeping Saint Joseph’s arranged on another carved bench, the saint’s cheek pillowed on his hand and his carpentry tools and sandals scattered by his feet; carved and painted Santo Niños on a table, their colors glowing in the sunlight; a farmer’s straw hat capping a carved easel; and glass jars and bamboo containers crammed with hundreds of paintbrushes. Paete Church, which was founded in 1580, is another must-see for art and history aficionados. It is filled with interesting antique paintings and carvings. On either side of the church near the entrance are large frescoes by Paete artist Luciano Dans, dating to the mid-1800s. The one on the right, painted on wood, depicts heaven, purgatory and hell. Two on the left both show a gigantic Saint Christopher bearing

the Christ Child on his shoulder, one painted on the plaster wall, the other on wood. A much older work near the altar shows the Final Judgment. All the artworks need conservation to clean and preserve them. The theme of the stained-glass windows along the sides of the church are the sacraments—baptism, matrimony, holy orders and so on—in a style reminiscent of Art Nouveau, while the retablo and pulpit are masterpieces of the wood carver’s art. The pews are also antiques, at least the ones near the entrance; on the backs of several are painted the names of donors—“Abuloy ng sam. [samahang] Lourdesiana,” “Abuloy ni Marta D. Adao Caparas Familia”—in a blackletter font. Many of the churches and old homes in Philippine towns and cities are architectural wonders and contain antique artworks and artifacts. Local government unit officials could consider assisting with art-conservation efforts in their towns to preserve our rich history and art heritage, and promote “art tourism” that will draw not only aficionados but also students and teachers of art and architecture. nnn

Atty. Rojas is vice chairman and general manager of the Philippine Charity Sweepstakes Office.

Don’t want your car hacked? Keep it simple

By Leonid Bershidsky | Bloomberg View

ll the frenzy over car-hacking would make more sense if the risk weren’t so easy to reduce: Just drive a simple car. The threat of hackers taking control of cars has lately elicited, perhaps, more excitement than it deserves. The success of two security researchers in remotely hacking a Jeep—and taking over its accelerator while in motion—has prompted a class-action suit, a Senate bill to require automakers to protect cars from such attacks, and a 1.4-million-vehicle recall, all without a single incident of malicious hacking. That said, cars have long been susceptible to hacks. Consider, for example, keyless theft. Criminals have stolen thousands of cars— including David Beckham’s BMW X5 SUV in 2006—by cracking the code needed to disable the immobilizer, a theft-prevention device that is obligatory in the European Union and that 86 percent of cars in the US have. The immobilizer employs a radio frequency identification (RFID) chip that won’t allow the engine to run unless the car’s original key, which transmits the necessary code, is present. The

auto industry doesn’t want people to hear too much about hacking immobilizers. Bloomberg News reported on Friday that Volkswagen, the world’s biggest car manufacturer by volume, had spent two years trying to suppress a report— now finally public—concerning a flaw in the chip that powers immobilizers. The paper’s authors, Roel Verdult, Flavio Garcia and Baris Ege, found three vulnerabilities in the Megamos Crypto RFID transponder used by Volkswagen, Fiat, Honda and Volvo. They said a successful attack took them about 30 minutes. Although those vulnerabilities are probably fixed, new ones will inevitably arise. Messing with the immobilizer is not the same as taking over the car’s entire computer system, as hackers Charlie Miller and Chris Valasek did with the Jeep. The more microprocessors a car has, the greater the “attack surface,”

as security analysts call it. The Tesla Model S has 62 processors, about as many as top-flight BMWs, Mercedes, Audis and Lexuses do. There’s one in each airbag and each headlight. The processors are linked into networks so they can “talk” to each other, and the networks are accessible from the outside through Wi-Fi, Bluetooth, cellular connections, RFID—every possible kind of communication technology. Some of the chip-enabled functions are far from essential. The processor that runs the entertainment system, for example, might communicate with the one in charge of the antilock brakes to find out the vehicle’s speed and adjust the music volume accordingly. All these little computerized actions add up to a level of comfort drivers and passengers couldn’t even dream of 30 years ago, but, to make them possible, engineers pile on potential vulnerabilities. A typical car uses 10 million lines of software code. A successful attack requires time, equipment and expertise. So if you drive a scratched Ford with 80,000 miles on it, you might be

able to console yourself with the thought that you’re not worth the trouble. Wealthy people have more to worry about: They’re more likely to have expensive cars, or covetous enemies who won’t be above hiring hackers to commit what could be a perfect, undetectable crime. For everyone, not worrying about car hacking is like living with a “12345” e-mail password: For a long time nobody cares enough to break it, then suddenly it’s too late and your account is sending out virulent spam. I am no Luddite. I know driverless vehicles are likely to be everywhere within a decade, and I’m not particularly concerned about what might go wrong: Where’s the money in hacking them, unless you specialize in cybersecurity? Still, the trade-off of security for convenience should be made consciously. I will always choose cars with a minimum of gimmicky functions, and prefer ones with an old-fashioned key that you turn in the ignition. The ability to start the engine with the push of a button is definitely not worth the trouble of having the car stolen.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Fallible Federal Reserve needs a few good rules

E-commerce taxation

By Ramesh Ponnuru | Bloomberg View

he top question at the Federal Reserve (the Fed), and for Fed watchers around the world, is when will it raise interest rates. For months, the central bank has been signaling that—as the effects of the financial crisis finally start to ebb—it will act soon, perhaps as early as September. Alan Blinder, a former Fed vice chairman, says everyone is paying too much attention to the question of timing. So let’s focus some of that attention on two other issues that ought to be before the Fed. One concerns the policy framework within which it makes its moves on interest rates; the other, the way it communicates those moves. Tightening monetary policy by raising interest rates could make sense in today’s economy, depending on the Fed’s overall objectives. It’s a peculiar move, though, in the context of the Fed’s announced goals of minimizing unemployment and hitting a 2 percent goal for inflation. Inflation is running below 2 percent, and as Blinder notes, the Fed itself does not expect it to rise to 2 percent until 2017. Some Republicans think that Congress should supply a framework for the Fed, making it more rule-bound. One much-discussed approach would have the Fed follow the “Taylor rule”—named after John Taylor, a Stanford economist—which says that the federalfunds rate should be set according to a formula involving inflation, the long-run real-interest rate, and the gap between the economy’s actual output and its potential output. The Fed’s behavior might then be more predictable. It would raise and lower the Fed funds rate according to the formula. The Economist magazine recently criticized the idea of following a formula, arguing that the Taylor rule has drawbacks. It argued that the Fed should continue to exercise broad discretion over monetary policy. But to say that a central bank acting on its own discretion could perform better than one following the Taylor rule doesn’t mean that it is likely to do so. And the Taylor rule isn’t the only possible rule. The Fed could instead act to keep the growth in nominal spending— the total amount of dollars being spent each year on consumption and investment—at a fixed percentage each year. That approach wouldn’t require it to make confident estimates about the output gap or long-term interest rates. It would also lend itself to greater predictability, and a recent paper

suggests that it might work better than either inflation-targeting or the Taylor rule, especially given uncertainty about those values. Whether it adopts a nominalspending rule, or any other rule, the Fed could also, with minimal effort, make its reasoning clearer. It should regularly produce and share its estimate of the short-term natural-interest rate. When the Fed wants to stimulate the economy, it tries to bring interest rates below their natural, or equilibrium, level. When it wants to restrain the economy, it tries to bring them above that level. But it doesn’t plainly say what it thinks that level is. Sharing an estimate, even if it covers a range, could actually make the Fed’s job easier. Over the past few years, for example, the Fed has been accused of punishing savers and engaging in “financial repression” by holding interest rates low. But its actions were clearly premised on the idea that the naturalinterest rate at the trough of the recession was negative. Saying so would have offered some perspective on whether Fed policy was really as loose as it was generally taken to be, as economist David Beckworth has argued. It would also have made clear that the state of the economy, not the Fed’s policies, were to blame for the low return on savings. T hat wouldn’t have gotten the Fed completely off the hook because its policies inf luence that natural rate. But publishing such estimates would help to clarify the debate over its past and future decisions. It is unlikely that the Fed, in the near term, will either adopt a nominal-spending target or produce estimates of the natural-interest rate in real time. The central bank is slow to change and insulated from pressure. But the Fed doesn’t have an especially good track record, either over the course of its history or in recent years. That’s a reason for changing some of its practices and for lashing the Fed’s fallible human governors to a wellconsidered rule.

Leader-for-life: Congo’s president refuses to give up power

he Democratic Republic of the Congo (DRC), formerly called Zaire, has been a center of unrest in Africa ever since its independence in 1960.

It may be heading in that direction again as its president, Joseph Kabila, tries to extend his constitutionally limited two five-year terms beyond the scheduled 2016 presidential elections. In taking that course he is seeking to follow in the footsteps of other African presidents-for-life, including Zimbabwe’s Robert Mugabe, Uganda’s Yoweri Museveni, Cameroon’s Paul Biya and Rwanda’s Paul Kagame. He would also be emulating his country’s famed long-term tyrant, Mobutu Sese-Seko, in power for 32 years, until he was overthrown in 1997 by Kabila’s father. Kabila was welcomed by some to power when he succeeded his father, assassinated in 2001. He was then elected president in 2006 and reelected in 2011, in a relatively democratic election. Now he is taking advantage of the DRC’s chaotic governmental situation to stay in power. He first argued that a census was necessary before the election.

He is also proposing that the country be reorganized, from 11 to 26 provinces, a long and tortuous process, before the 2016 presidential contest can take place. The government is also complaining that it is $900 million short in financing the election, which it claims will cost $1.4 billion. Advocates of democracy, including the United States, oppose any postponement of the presidential election on any grounds. America has offered to contribute $30 million toward the enterprise if Kabila steps down. The problem is that trouble in the Congo, with a population of 70 million and borders on nine countries, has traditionally spread throughout the region and cost thousands of lives. Continued rule by Kabila serves no useful purpose in the DRC. He should be obliged by whatever means necessary—sanctions, an aid cut-off or other pressure—to proceed with the election on schedule, as directed by the constitution. TNS

Atty. Lorna Patajo-Kapunan

legally speaking

he volume of e-commerce in the Philippines is still currently miniscule compared to the more developed economies. Still, the Bureau of Internal Revenue (BIR) recognizes that electronic commerce has the potential to grow by leaps and bounds in the near future.

The BIR’s intention is not only to go after online entrepreneurs who fail to pay taxes and issue receipts, but also operators of “buy and sell” web sites, which allow their members to conduct business online without verifying if they are registered with the BIR and the Department of Trade and Industry (DTI). Online sellers using Sulit.com.ph, AyosDito.ph, Facebook and Instagram, according to Internal Revenue Commissioner Kim Jacinto-Henares, should be registered, must issue electronic invoices, and pay taxes the way brick and mortar entrepreneurs do. While the BIR is correct in going after these online sellers, there is a need to know if such transactions are actually taxable under our

jurisdiction. The basic rule is that the state, where the subject to be taxed has a situs, may rightfully levy and collect the tax; and the situs is necessarily in the state, which has jurisdiction, or which exercises dominion over the subject in question. Situs literally means “place of taxation.” Hence, before one can proceed to the possible imposition of e-commerce taxation, we must first look into the perfection of ecommerce contracts; how they are formed; what constitutes an offer and an acceptance between the seller and the buyer. It is the perfection of e-commerce contracts that gives rise to the possible imposition of tax on e-commerce. It is said that the perfection of a

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contract comes when the parties to a contract have come to a definite agreement or meeting of the minds regarding the terms, that is, the subject matter and the cause of the contract. While such definition is easy to apply in regular transactions in commerce, it is entirely different in ecommerce transactions since it would be difficult to know at which point both parties have a meeting of the minds. It is also interesting to note that even the Electronic Commerce Act, which was crafted to address such transactions, gives no precise definition of an electronic contract. Without determining how and when an electronic contract is perfected, how can our tax authorities say that an e-commerce transaction is taxable under Philippine laws? In e-commerce transactions, the problem arises in the determination of the source of the income because the line between the principle of ecommerce transactions and the traditional physical-business concept, which involves assets, personnel, or both, becomes vague. Foreign businesses, or even individuals, can tap the domestic market without having to go through the burdensome ins and outs of establishing physical presence within the domestic market. When an online seller and an online buyer are both physically present

in the Philippines, there should be no issue as to income-tax liability, since the income is clearly sourced within the Philippines and the BIR can easily apply our domestic laws on taxation. But when the online seller is a nonresident or physically situated outside the Philippines, while the buyers are Philippine residents, the rules on sources of income and the proper characterization of income become problematic. As of date, no law has specifically discussed, to a large extent, the taxation of e-commerce transactions. Ecommerce is only slowly gaining the trust of most Filipino online consumers, as well as Filipino online sellers, it is wise to let e-commerce gradually grow in the Philippines, and in the process, gain familiarity with it while drawing knowledge and experience from foreign countries and international organizations. E-commerce, although a more complex form of commerce, may be said to be covered by the existing laws of the country. It is still in the nature of a contract, over which the general law may still be applicable to e-commerce transactions by analogy. If this is so, then the law must provide for standards that will establish the formation of e-commerce contracts that will supplement the application of the existing laws of the country.

Google’s Alphabet will be like...

By Justin Fox | Bloomberg View

o, Alphabet isn’t really going to be like Berkshire Hathaway. That was the parallel that first occurred to me and lots of others when Google CEO Larry Page announced on Monday that he and cofounder Sergey Brin would henceforth be running a holding company called Alphabet. Page had encouraged this by saying that he looks to Warren Buffett’s conglomerate as—this is the Wall Street Journal’s paraphrase of comments he made to some Google shareholders last December—“a model for how to run a large, complex company.” His Alphabet announcement also promised that he and Brin would “rigorously handle capital allocation,” and rigorous capital allocation is one of Buffett’s main claims to fame. Beyond that, as many people have pointed out this week, there isn’t much resemblance between Alphabet, with its amalgam of money-spewing Google and a bunch of potentially world-changing, but money-losing start-ups, and Berkshire’s lovingly (if rigorously) curated collection of stodgy moneymakers. Buffett’s adept balancing of ruthlessness and coziness might be something Page and Brin want to emulate, and maybe they pine to be as widely and durably beloved as Uncle Warren. I really don’t see them copying his highcarb eating habits, though. Here’s another Page paraphrase, this one from an interview last October with the Financial Times: There is no model for the kind of company Google wants to become, Page says. But if there’s a single person who represents many of the qualities he thinks will be needed for the task ahead, then it’s famed investor Warren Buffett. But is there really “no model” for the kind of company Alphabet/ Google wants to become? Observers have been throwing out different examples all week of what Alphabet is, or should be like. Here’s a roundup (although I’m sure I’m missing a few): Alphabet is like Virgin. That is, as Wall Street Journal tech columnist Christopher Mims put it on Twitter, it is (or should be) a “venture conglomerate” that creates and invests in new businesses. With the exception of Virgin Galactic, though, Sir Richard Branson’s companies tend to jump into established industries with a distinctive shared approach to marketing and service. They’re not trying to change the world with new technology, as Alphabet aims to. Also, as innovation consultant Paul Munkholm complained to Wired, “unlike Virgin, which is clearly a parent brand to businesses like Virgin Air and Virgin Mobile, Alphabet doesn’t have that same connection.” Still, there’s surely something to this parallel—Page did get married on Branson’s private island, after all.

Alphabet is like Liberty Media. Harvard Business School (HBS) Prof. Tom Eisenmann thinks media billionaire John Malone’s approach to conglomerate-building might work for Alphabet. As he wrote on the Harvard Business Review’s web site: Malone is brilliant financial engineer, who creates separate capital structures—each with a unique stock—for his different lines of business. Liberty Media, Malone’s holding company, owns a portion of the stock in each business. This approach allows Malone to attract equity and debt investors, whose preferences regarding risk and payoff horizon match those of the business in question. A somewhat similar model that I remember from the 1990s was Thermo Electron, a Massachusetts maker of scientific equipment that would spin off new technologies as publicly traded companies to motivate employees, and move research and development outlays off the parent company’s earnings statement. For now, though, Page and Brin seem to be doing the exact opposite. Google’s new projects have been sheltered from financial markets, and Alphabet’s will be too—presumably because Page and Brin think they’re better at allocating capital to such early-stage endeavors than Wall Street would be. Alphabet is like General Electric (GE). Thomas Edison invented the first durable electric lightbulb and the company he founded to manufacture it grew into a conglomerate that made all sorts of different electricity-using machines—from locomotives to x-ray machines to radios. There’s definitely a lot to like in this parallel, which has been suggested by the New York Times’s Farhad Manjoo and many others. Where electricity was the common element that united most of GE’s different endeavors, at Alphabet, it’s the power of algorithms. Over the decades, GE also developed a unique management culture,

which could eventually become a thing for Alphabet too. One striking difference, though, is that Edison was already doing a zillion different things even at the very beginning. As John F. Wasik writes in the book Merchant of Power: Imagine Microsoft…in addition to writing computer-operating systems, making every component of the computer and supplying the electricity to run them, wiring houses and owning and running power plants. It was too much, it turned out, and after Edison ran into big financial trouble in the 1880s, it was Wall Street financiers Henry Villard and J.P. Morgan who consolidated and streamlined Edison’s many businesses, creating the modern GE. Which surely isn’t the way Page and Brin want to see things play out. Alphabet is like AT&T. Ma Bell was a money-gushing monopoly that used some of that monopoly money to finance the world-changing Bell Labs. Here’s Neil Irwin in the New York Times: In this example, Google’s dominant position in search advertising plays the role of the old AT&T phone monopoly. It earns a lot of money, and its managers will siphon off a portion of the profits to fund all sorts of basic research. Many Bell Labs inventions and innovations were put to work in AT&T’s core business, making it even more efficient and profitable. Some, such as the transistor, ended up transforming the world. But none of them actually became giant new AT&T businesses—telephone service remained the core through AT&T’s courtordered breakup in the 1980s and still is for the remnant company that bears the name today (if you define telephone service broadly enough). The much-diminished Bell Labs, meanwhile, is about to become part of Nokia. Alphabet is like Xerox. This is similar to the AT&T story, but more fraught. Xerox’s Palo Alto Research Center (PARC) developed all sorts of very practical things—from laser printing to Ethernet to the personal computer to the graphical user interface that dominates modern computing and communication— that made huge fortunes for other companies, but not for Xerox, which is no longer nearly the high-tech power it once was. Michael Hiltzik, author of a history of Xerox PARC, said in an interview with Vox.com this week that the company’s culture was so dominated by the copier business

that it “was very hard for Xerox to get into anything that wasn’t really connected to the copier. They had 250,000 salesmen, and when they looked at the personal computer, it wasn’t even clear how they made their commission off of it.” Google, Hiltzik argues, has never been that one-dimensional. Also, PARC was (and is; it’s still around) a small outpost 3,000 miles from corporate headquarters in Rochester, New York. Alphabet’s new businesses, on the other hand, seem to be what Google founders Page and Brin are most interested in. Still, the basic challenge they face, finding ways to encourage and invest in continued innovation within an organization that’s built around a single hugely successful innovation, is a daunting one. As HBS professor David Yoffie told Bloomberg News: You have to be able to manage the innovation process and decide what investments are worth making and which ones are not. The history of this in the technology industry is littered with failure. This was already an issue for Google before Alphabet, and while the reorganization is clearly an attempt to address it, that doesn’t guarantee it will work. There are, contrary to what F. Scott Fitzgerald wrote, many second acts in American lives. There just aren’t so many second acts in American technology companies. Alphabet is like SPECTRE. That’s supervillain Ernst Stavro Blofeld’s corporation in multiple James Bond movies and books—a globe-spanning conglomeration of dastardliness with the full name of Special Executive for Counterintelligence, Terrorism, Revenge and Extortion. It was also the model for Dr. Evil’s Virtucon Industries in the Austin Powers movies. Here’s News Corp. CEO Robert Thomson, speaking on Thursday in Australia: That Google’s newly conceived parent company, is to be called Alphabet, has itself created a range of delicious permutations: A is for Avarice, B is for Bowdlerize, through to K for Kleptocracy, P for Piracy and Z for Zealotry. OK, so he wasn’t explicitly comparing it to SPECTRE. But that’s what jumped to my mind as I read his words. And you’ve got to admit, the prospect of “don’t be evil” Google evolving into an alphabetized crime syndicate is pretty cool, if also of course terrifying. When Page starts bringing along a cat and stroking it during all his public appearances, we’ll know to watch out.

2nd Front Page BusinessMirror

A12 Monday, August 17, 2015

PHL’s goal: Asean’s 3rd automotive hub

By Catherine N. Pillas

he Federation of Automotive Industries in the Philippines (FAIP) said the country can become the third automotive hub in the Association of Southeast Asian Nations (Asean) due to its bright growth prospects and the spiking labor cost in Thailand. “We are telling our [auto] brand principals that, for risk mitigation, don’t be satisfied with two hubs, because, let’s face it, Indonesia and Thailand are already production hubs. But, it’s logical that there is a third [hub] because the labor cost in Thailand is already high. But more than that, there is the lack of required talent for parts-making,” FAIP President Vicente T. Mills said in an interview with reporters. The Philippine government

has recently released Executive Order 182, or the Comprehensive Automotive Resurgence Strategy (Cars) Program, aimed at boosting local manufacturing through the grant of fiscal and nonfiscal incentives. The country’s economic growth prospects—now coupled with a clear policy direction for the auto industry—should entice the principals of vehicle brands to further expand operations in the country. “With the Asean zero tariff,

the tendency of brand principals is to expand where they already are, which is Thailand and Indonesia. But with this program, the Philippine government is saying basically that we’re not giving up,” Mills said. “Indonesia is a much bigger market, so growth will be slow. But again, for risk mitigation, we can be a third hub,” he added. Challenges, however, that should be addressed are the lowvehicle density in the Philippines and the poor road infrastructure. Data from the Asean Automotive Federation (AAF) showed that the Philippines stands in the middle of the pack as of June in terms of automotive sales. Indonesia’s sales volume was at 525,458 units; Thailand 369,109 units; Malaysia 322,184 units; and the Philippines 131,465 units. In terms of growth, however, the Philippines stood out as one of the three countries that registered a year-on-year increase in auto sales in June. The AAF surveyed seven nations. In terms of production, however, the Philippines is still a laggard. The country only produced 45,662 units from January to June 2015, while neighboring countries produced over 100,000 units already.

PLDT. . .

Continued from A1

Based on previous investments, such an undertaking usually cost PLDT about $50 million in capital. “We are still exploring that with other parties. Hopefully, we can finalize the plan toward the end of the year,” he said. He did not elaborate. The initiative aims to enhance the firm’s international bandwidth capacity, while raising the resiliency of its overseas links. For the past years, PLDT has been investing in international submarine cables in the Asia-Pacific region, establishing direct connections to the US Mainland and covering a majority of its total international capacity. Its portfolio of cable systems include the Asia-Africa-Europe 1; the Asia Submarine-Cable Express; the Asia Pacific Cable Network 2; the Southeast AsiaMiddle East-West Europe 3; and the Asia-America Gateway.

Smart beats Globe in postpaid

MEANWHILE, Smart Communications Inc., a subsidiary of the multimedia conglomerate, claimed to have outpaced Globe Telecom Inc. in terms of new subscribers in the first half of the year. PLDT Executive Vice President Ariel P. Fermin said Smart and Sun were able to sign up over 253,000 new subscribers—or four times the number of new subscribers of the competition—during the first six months of 2015. He attributed the growth to “improved brand positioning and attractively bundled digital offerings.” Smart and Sun grew the group’s combined postpaid cellular subscriber base by 18 percent year-on-year to over 3 million, versus the competition’s 2.3 million during the same period. “We’ve already seen traction in our campaigns for Smart and Sun. We are seeing more consumers choosing us over competition on the basis of our value proposition, and we are growing our revenues without sacrificing the quality of our receivables. Brand positioning and affordable data volume plans bundled with relevant content from our partners, like iflix and Fox, have also combined to produce strong growth in our postpaid business,” Fermin said. He added that his group is aiming to sustain such momentum in the prepaid segment. “This will be possible as we enable more and more of our prepaid subscribers to experience and enjoy our digital services. This is why we are investing heavily to strengthen our network and service delivery platform, and, offering very affordable data packages,” Fermin added. The group is spending P43 billion in capital outlays this year to beef up its access networks, expand its fiber reach and capacity and enhance coverage. The capital will also fund initiatives to optimize the mobile network, augment network resiliency and redundancy, increase data-center capacity and integrate the Smart and Sun networks for operational efficiency. Lorenz S. Marasigan

www.businessmirror.com.ph

Premium price lures developers to ‘TODs’ Continued from A1

samples for the study, analyzing the price difference between the condos that are directly connected to the MRT station with similar ones that are situated more than 500 meters away. Lamudi chose only those condominiums with more than 15 for-sale properties listed in its platform. “In the case of Boni station in Mandaluyong, there were two condominium developments that are directly connected to the MRT station. If property buyers opt to choose any of these two properties, then they should pay P31,572 and P16,645 more per sq m compared to a similar, newly built condominium in the same area, but situated more than 500 meters away from the train station,” the study showed. Over at Magallanes station in Makati, one condominium directly connected to the MRT station averages P125,129 per sq m, which is P16,195 higher than a similar condominium about 1 kilometer away on Chino Roces Avenue. “Real-estate developers have started to integrate many of their projects into transport infrastructure to attract more buyers. Dubbed transit-oriented developments (TODs), these condos located within 400-meter radius of train stations in Metro Manila are attracting buyers in search of convenient locations for their daily commute,” Lamudi said. According to Colliers International, there are approximately 100 condo developments that could be considered as TODs. Many of these real-estate projects have mushroomed in Metro Manila in recent years, specifically targeting the commuting public. Mandaluyong’s Boni and Pioneer area alone, where MRT’s Boni station is located, has 15 TODs, which boast almost 9,000 condominium units. “TODs are expected to increase over the next few years, with the completion of projects close to MRT stations. This might push down prices in the long run. These TODs include condominiums in Ayala Land’s Vertis North project connected to North Avenue Station, and several condominiums in the Greenfield area close to Shaw Boulevard station,” Lamudi noted.