BusinessMirror
THREETIME ROTARY CLUB OF MANILA JOURNALISM AWARDEE 2006, 2010, 2012
U.N. MEDIA AWARD 2008
www.businessmirror.com.ph
After grief
LIVING WATER, AW PINK AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com
Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com
Life
‘MAN IN THE MACHINE’ CAPTURES FLAWED GENIUS JOBS »D2
BusinessMirror
Thursday, September 10, 2015
❸
❹
MOCK OCK sea tour guiding
❶
TAKHI horses roam across the landscape in Khustain National Park in central Mongolia. More than 300 of these golden horses now roam the park, the result of a successful reintroduction project supported by the Dutch and Mongolian governments.
Why Mongolia should be on your rustic bucket list
❷ THE sun sets
over Terkhiin Tsagaan Nuur, a lake in central Mongolia. The lake, part of the Khorgo-Terkhiin Tsagaan Nuur National Park, is one of the most beautiful in Mongolia.
❸
OGII, whose full name is Oyunbaatar, makes a version of Mongolian hot pot over an outdoor wood stove, at Terkhiin Tsagaan Nuur. This version of hot pot had lamb, onions, potatoes and carrots, slow cooked for several hours.
❹
TWO wrestling contestants face off at the Nadaam festival in Karakorum, Mongolia.
B S L McClatchy Washington Bureau
K
ARAKORUM, Mongolia—A few weeks ago, I was bouncing down a bumpy Mongolian highway, seated in a Russian-made UAZ van with my wife and two friends. Our driver was a larger-than-life character named Oyunbaatar, or Ogii. He wore a beret and as he gripped the steering wheel, dodging potholes, he’d occasionally bark out streams of mystifying Mongolian. In Russia, a UAZ van is known as a Bukhanka, or bread loaf, because of its boxy appearance. With impressive suspension, these off-road vehicles can be seen across Mongolia, rugged as the country’s vast grasslands. As we soon learned. Suddenly, without warning, Ogii veered off the highway, hit the gas and accelerated across the scrubby landscape and up a hillside. Within minutes, he had brought us to a 360-degree view of the steppes—with flocks of animals grazing in the distance, next to groups of white yurts, or gers as they are called here. This is what travel is like in Mongolia: Huge distances. Broad vistas. Big skies. Bright stars. For a week, we slept in gers, hiked mountains, rode horses, swam in lakes, soaked in hot springs. Along the way, we met several Mongolian families, including traditional herders who seasonally move their gers and animals to greener pastures. Covering 603,000 square miles—roughly the size of California, Oregon, Washington, Idaho and Utah combined—Mongolia is vast, but home to a mere 3 million people. Half of them live in Ulaanbaatar, the capital. Most of the rest are spread out on the grasslands, making a traditional living, herding and
breeding livestock. Yet, even in the outback, signs of modernization are everywhere. On our first day on the road, we came across a large flock of camels, including some newborns. The camels made for excellent photos, but we were surprised by the two shepherds that soon arrived. They were riding a motorcycle. The next day, we stopped at a ger camp, perched on a plateau and run by an elegant woman named Yandag. Inside her ger, Yandag was making a batch of urum, the Mongolian name for clotted cream, or “white butter.” She soon stepped outside to track her livestock with the aid of some high-quality binoculars. Outside her ger stood solar panels and a satellite dish, for watching television. In every ger camp we visited, families would invite us inside and offer us something, usually suutei tsai—salty milk tea. As we sipped our drinks and chatted, we took note of the colorful, ornate furniture inside these tents, including the altars festooned with photos of several generations of family. The land of Genghis Khan is a rare destination for American tourists. According to government figures, last year there were fewer than 15,000 visits by US citizens to Mongolia, compared with 258,000 by Chinese passport holders. For lovers of nature and ancient cultures, Mongolia remains a relatively undiscovered gem. It feels like one of the last frontiers in Asia. A typical road trip takes you west from Ulaanbaatar, the capital, through Khustain National Park, where Mongolia’s semi-wild Takhi horses are protected. More than 300 of these golden horses now roam the park, the result of a successful reintroduction project supported by the Dutch and Mongolian governments. Further west is Khogno Khan Uul Nature Reserve, which is dotted with remains of old Buddhist temples,
and one active one. You can camp here, explore the ruins and hike up a lovely creek into hills filled with wildflowers. Every day seemed to bring some new visual splendor. We passed by a deep gorge that looked like a tributary to the Grand Canyon. We camped at a lake so vast and undeveloped that you just wanted to stare at it for hours. But the thing I’ll remember most was a toast on the first night of our trip. Ogii, our driver, pulled out shot glasses and a bottle of Mongolian vodka. He insisted that we partake, and of course, how could we say no? The customary Mongolian toast involves dipping your right ring finger into the glass and flicking it three or four times. First we toasted the sky, then the Earth. The last time we touched our fingers to our foreheads, gave thanks, and knocked back the shot. We all did this. By the end of it, we felt like we were all members of a time-honored, secret club. IF YOU GO ■ Tours: We booked our tour with Tselmeg Erdenekhuu, who runs Meg’s Adventure Tours in Ulaanbaatar (http://www.megmongolia.com/). Costs for a seven-day trip are about $665 per person for three people, which includes a driver, a guide, a van, lodging, food and tours. It does not include airfare. If Meg’s is booked, Lonely Planet has suggestions for other tour companies. ■ Connections: Ulaanbaatar is served by flights from China, Japan, South Korea and other countries. Mongolia makes for a relaxing diversion after a week of touring China. ■ Preparations: US citizens do not need a visa to visit Mongolia, but a visa may be needed for surrounding countries. A sleeping bag and a pad can be helpful for sleeping in gers, which may or may not have mattresses. ■
DAVAO AIMS FOR WORLD-CLASS TOURISM SERVICES DAVAO is improving its tour guide services to attract more visitors, create more jobs and put the province on the map as a global travel destination. “Davao is considered one of safest cities globally, with some of the world’s most beautiful beaches, best seafood and amazing ecotourism attractions,” said GeneRose Tecson, president of The Guide Union for Inbound Destination and Ecotourism Inc. (Guide). “Tour guides are recognized as important ambassadors, and by providing them with worldclass training, we hope to take a big step toward making Davao one of the region’s most desirable cities for tourists.” To upgrade the quality of its services, Guide Davao recently concluded a series of training program on tour guiding services using the tourism skills grant from the Department of Tourism (DOT). Funded by the Government of Canada and administered by Asian Development Bank (ADB) under the Philippines Improving Competitiveness in Tourism Program, it was designed to support the government’s effort to achieve inclusive growth and create employment opportunities in tourism. “More than providing financial assistance to support professional skills training, the grant will usher in jobs and opportunities for growth for young Davaoeños,” Tecson said. “Using what we learned from the training, we seek to expand training and mentoring to junior tour guides in various cities and municipalities in the Davao region and help develop a new breed of tourism industry workers.” Tecson said that while members of their group are licensed and accredited by the DOT and have received previous trainings, they seek to benefit from more relevant training courses to achieve worldclass status. With the help of the skills grant, they conducted workshops on personality development, quality in communications, security awareness, train the trainers and professional tour guiding. With the help of DOT-ADB-Canada grant, Guide Davao hopes to improve its services and training programs to align with the standards of the Association of Southeast Asian Nations Tourism, as well as the newly implemented standards of the DOT. Guide Davao also hopes to become a key driving force in making their province known more globally, with tour guides as Davao’s fifth icon. Davao is best known for its Durian fruit, the Waling Orchid, Mount Apo and the Philippine Eagle.
LIFE
B J R. S J
D1
SERENA BEATS VENUS IN U.S. OPEN QUARTERS Sports BusinessMirror
C1
| THURSDAY, SEPTEMBER 10, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao
SERENA BEATS VENUS IN U.S. OPEN QUARTERS
THE Williams sisters, Serena (right) and Venus, hug after the well-played match. AP
MONEY’S WORTH Serena Williams called their unique sibling rivalry “the greatest story in tennis,” and who would argue? A couple of kids taught by their dad on cement courts in Compton, California, making it all the way to the top. B H F
N
The Associated Press
EW YORK—For stretches of the 27th edition of Williams versus Williams, Venus gave Serena all she could handle. And when Serena took control down the stretch to emerge with a 6-2, 1-6, 6-3 victory in a well-played US Open quarterfinal, allowing her to continue pursuing the first calendar-year Grand Slam in more than a quarter-century, a smiling Venus wrapped both arms around her little sister for a warm hug at the net and whispered, “So happy for you.” “Obviously we are very, very tough competitors on the court,” Serena said later, “but once the match is over, the second it’s done, you know, we’re sisters, we’re roommates, and we’re all that.” Serena called their unique sibling rivalry “the greatest story in tennis,” and who would argue? A couple of kids taught by their dad on cement courts in Compton, California, making it all the way to the top. With two more match wins, the No. 1-ranked Serena would become the first player since Steffi Graf in 1988 to collect all four Grand Slam titles in a single season. Plus, if she can win what would be her fourth US Open in a row, and seventh overall, she would equal Graf with 22 major championships, the most in the professional era and second-most ever behind Margaret Court’s 24. “That would be huge, not just for me, but for my family, just for what it represents and how hard we have worked and where we come from. So it would be a moment for our family,” said the 23rd-seeded Venus, who is 15 months older. “But at the same time, if it doesn’t happen it’s not going to make or break you. We don’t have anything to prove. She has nothing to prove. She’s really the best ever.” Serena is 16-11 in their all-in-the-family matches, including 9-5 in majors and 3-2 at the US Open. And 14 years to the day after Venus beat Serena in the 2001 final at Flushing Meadows, they met again with so much at stake. Well-known folks such as Donald Trump—who was booed when shown on video screens—Oprah Winfrey and Kim Kardashian dotted the teeming stands in Arthur Ashe Stadium, and the sellout crowd of 23,771 got its money’s worth. “They both played their best,” said Serena’s coach, Patrick Mouratoglou. “If they were feeling uncomfortable with playing each other, they could not play at that level.”
NOVAK DJOKOVIC is into the US Open semifinals for the ninth year in row. AP
The sisters combined for 57 winners (Serena had more, 35) and only 37 unforced errors (Venus had fewer, 15). How close was it? Serena won 76 points, Venus 75. Both pounded serves fast, very fast, each topping 120 mph. Both returned well, oh so well, each managing to put into play at least one serve at more than 115 mph by the other. Venus often attempted to end baseline exchanges quickly. Serena showed tremendous touch by using drop shots, one paired with a backhand passing winner, another with a perfectly curled lob. When a reporter implied he wasn’t sure whether Venus really wanted to beat Serena, the reply was drenched with incredulity. “I tried,” Venus replied. “Were you there?” On Thursday Serena faces unseeded Robert Vinci of Italy, who reached her first Grand Slam semifinal at age 32 by outlasting Kristina Mladenovic 6-3, 5-7, 6-4. The 43rd-ranked Vinci is playing in the 44th major tournament of her singles career, the second-most appearances by a woman before reaching her initial semifinal. Vinci is 0-4 against Serena and joked about wearing a helmet for protection from some of the 33-year-old American’s booming shots. “She’s the favorite. Maybe she’ll feel the pressure. Who knows? It all depends on her. If she serves well, it’s tough to return,” Vinci said. “But I have nothing to lose.” Against Venus, Serena earned a key break to lead 2-0 in the third set thanks to a down-the-line backhand winner that landed in a corner, then she gritted her teeth, held clenched fists near her head and leaned forward, holding the pose. When she got to match point as a shot by Venus sailed long, Serena dropped to a knee behind the baseline and pumped an arm, her back to her sister. Serena then smacked a 107 mph ace, her 12th, to end it. At 35, the oldest woman to enter the tournament, Venus had her own reasons for wanting to beat Serena, of course. She hasn’t reached the semifinals at any Grand Slam tournament since the 2010 US Open, and might have considered this her last, best chance to collect an eighth major singles championship of her own. Mouratoglou was asked whether Venus can do that. “I think so,” he responded, “except if she plays Serena.”
DJOKOVIC KEEPS STREAK GOING N
EW YORK—Novak Djokovic’s US Open quarterfinal was suddenly tied at a set apiece, and he tore off his shirt as he headed to the sideline. He sat, halfheartedly tried to smash his racket, then began screaming. Hardly the first time, nor likely to be the last, that Djokovic let out a little emotion during a match. Whatever gets you through the day, right? Gathering himself after getting pushed around a bit by an opponent with an unconventional style, Djokovic wound up reaching the semifinals at Flushing Meadows for the ninth consecutive
year with a 6-1, 3-6, 6-3, 7-6 (2) victory over 18thseeded Feliciano Lopez that finished a little after 1 a.m. on Wednesday. For all of that success getting to the closing days of the US Open, though, Djokovic has one championship to show for it, in 2011. His other eight major titles came at either the Australian Open or Wimbledon. Still, the No. 1-ranked Serb is certainly consistent: He has now made it to the semifinals at 22 of the past 23 major tournaments. On Friday he will take on defending champion Marin Cilic, who was unfazed by wasting a big lead or match points while holding on to beat 19th-
This early, just as the buzz on the possible entry of Telstra Corp. Ltd.— Australia’s largest telecom player— becomes louder, Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc. indicated that they are ready to compete against another mobile-services provider. Manuel V. Pangilinan, the chairman of the dominant telco in the country, said his group is anticipating the entry of another market player, as San Miguel Corp. confirmed that it is negotiating with
Telstra for the possibility of introducing another core market player. “We just have to deal with it when they come. It’s anticipated that San Miguel will do it whether with Telstra or another partner,” he said in an interview late Tuesday. Globe President Ernest L. Cu, on the other hand, was more confident that it can continue to aggressively compete with another player, especially after proving that it can lead the local market. C A
PIATCO TO GET AT LEAST $510M IN COMPENSATION
PHOTOS: STAURT LEAVENWORTH/ MCCLATCHY/TNS
❷
B L S. M
D1
SHEPHERDS move a flock of camels away from the road, on motorcycles, in central Mongolia. Horses are still used for herding animals in Mongolia, but motorcycles are starting to replace them.
❶
P. | | 7 DAYS A WEEK
PLDT, Globe ready to battle with Telstra NEW core player in the hotly contested, duopolistic telecommunications market in the Philippines will prove to be a challenge to the incumbent carriers, forcing them to step up their game and provide better and more affordable services.
WHY MONGOLIA SHOULD BE ON YOUR RUSTIC BUCKET LIST LMIGHTY Father, we cry out to You now for forgiveness. We offer our tears and sorrows. We realize our mistakes and wrongdoings. May Your grace and mercy ease out our miseries and remorse. After grief for our sins, we bend our knees in full contrition, asking for forgiveness and Your willingness to take us back in Your fold. We promise not to offend Thee again. Amen.
ThursdaySeptember 18, 2014 Vol.10, 10 No. 40 Vol. 10 No. 336 Thursday, 2015
■■
A
INSIDE
A
A broader look at today’s business
seeded Jo-Wilfried Tsonga of France 6-4, 6-4, 3-6, 6-7 (3), 6-4 earlier Tuesday. “A big mental fight,” the Croatian called it, “especially after losing that fourth set.” Djokovic has never lost to Cilic, winning all 13 of their matches. The two men’s quarterfinals on the other half of the men’s draw are on Wednesday: No. 2 Roger Federer versus No. 12 Richard Gasquet of France, and No. 5 Stan Wawrinka versus No. 15 Kevin Anderson of South Africa. Lopez’s loss dropped him to 0-4 in Grand Slam quarterfinals; this was his first time that far in New York. AP
SPORTS
C1
T
HE Supreme Court (SC), in a 10-0 decision, ordered the government to directly pay Philippine International Air Terminals Co. Inc. (Piatco) at least $510 million in just compensation for the construction of the Ninoy Aquino International AirportInternational Passenger Terminal (Naia-IPT) 3. In a 144-page decision penned by Associate Justice Arturo Brion, the SC partially reversed the August 22, 2013, amended decision and the October 19, 2013, resolution of the Court of Appeals, which modified the May 23, 2011, decision of the Regional Trial Court (RTC) in Pasay City in connection with Piatco’s claim for just compensation. The RTC’s decision ordered the government to pay just compensation to Piatco in the amount of $116,348,641, and directed the government and subcontractors Takenaka and Asahikosan to pay the commissioner’s fees in the amount of P1.7 million.
The SC’s new ruling states that the amount of $267,493,617.26, which is the difference between the principal amount of just compensation and the proferred value, shall earn a straight interest of 12 percent per annum, from September 11, 2006, to June 30, 2013; and a straight interest of 6 percent per year, from July 1, 2013, until full payment. The High Court pegged the total amount due to Piatco at $510 million as of December 2014. “The government is hereby ordered to make direct payment of the just compensation due Piatco,” the SC ruled. In computing the just compensation, the SC used the replacement-cost method and the standards laid down in Section 5 of Republic Act (RA) 8974, as well as Section 10 of RA 8974, otherwise known as “An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National Government Infrastructure Projects and for Other Purposes.” S “P,” A
CLOUD TECH Pierre Noel, chief security officer of Microsoft Philippines, discusses the prospects of investing in cloud technologies to help businesses boost growth at The Big Top Cloud Festival in Parañaque City on Wednesday. The festival, organized by Microsoft, seeks to help local businesses keep pace with world-class solutions and uncover latest trends in technologies that could help boost their business with top-security support offered by Microsoft. STEPHANIE TUMAMPOS
AYALA ENTERS SOLARPOWER MARKET VIA BRONZEOAK B L L
A
C Energy Holdings Inc., the power arm of Ayala Corp., is investing in a solar-power project in Negros Oriental. The company said on Wednesday that it signed a subscription and shareholders’ agreement with Bronzeoak Clean Energy Inc., the investment arm of Bronzeoak Philippines Inc., for the development, construction and operation of a 40-megawatt (MW) solar-power farm in Bais City, Negros Oriental. “We are excited to pursue this opportunity and expand our renewable-energy [RE] assets, in line with our broader objective to create a balanced energy portfolio. This project serves as a good entry platform for our investment in solar power, particularly as technology costs have dramatically improved over the past few years,” AC Energy President John Eric Francia said. The company gave no other details on the investment. The solar project will be owned and operated by Monte Solar Energy Inc. (MonteSol), a special-purpose vehicle company, and shall be undertaken in two phases. The first phase is for an 18-MW solar power plant, with a total project cost of P1.3 billion and is targeted for completion by March 2016. The second phase is for the expansion of the initial 18-MW solar power plant to up to 40MW. Bronzeoak was the developer and is a managing shareholder of the 45-MW San Carlos Solar Energy (SacaSol) project, the country’s first and largest solar farm inaugurated by President Aquino in May 2014. SacaSol was the first-ever RE project that was awarded feed-intariff (FiT) under the Philippine FiT System. “MonteSol is part of Bronzeoak’s development portfolio of 202MW of solar projects now in operation or under construction, and we couldn’t be any more excited to be S “A,” A
Cebu Action Plan to boost global growth B C U. O
M
ACTAN, Cebu—The new direction being charted by the Asia-Pacific Economic Cooperation (Apec)— specifically the Cebu Action Plan (CAP)—will not only have a great impact on its members, but also the world. In a briefing here on Wednesday, Finance Undersecretary Gil S. Beltran said the CAP, to be signed by Apec finance
PESO EXCHANGE RATES ■ US 46.9880
ministers on Friday, will chart an ambitious path that will help push up growth rates and improve the resiliency of Apec economies and the world. “[Apec economies will] adopt policies that will enhance their resiliency and enhance their inclusivity, [and] will be a big boon to the world economy as a whole,” Beltran said. “It will push up growth rates, [and] avoid the dampening impact of disasters and volatilities. We have had several crises
in the past and we have learned from them; and based on these lessons, we are trying to adopt the policies that will help us avoid crises in the future.” Beltran said the CAP will have four pillars: financial integration, fiscal reforms and transparency, financial resilience and infrastructure-development finance. The CAP is envisioned as a 20-year road map for Apec economies. It will contain C A
■ JAPAN 0.3922 ■ UK 72.3756 ■ HK 6.0627 ■ CHINA 7.3797 ■ SINGAPORE 33.1485 ■ AUSTRALIA 32.9856 ■ EU 52.6829 ■ SAUDI ARABIA 12.5335 Source: BSP (9 September 2015)
A2
News
BusinessMirror
Thursday, September 10, 2015
news@businessmirror.com.ph
PLDT, Globe ready to battle with Telstra Continued from A1
“Globe has been successful in its transformation initiatives over the last five years, which resulted in consistent market-share gains and strong business performance,” he said in an e-mail on Wednesday. Whether or not Telstra will prove to be a challenge for the largest telco player in the Philippines, Pangilinan said it will depend on how San Miguel will position itself in the market. “It depends on how they behave to get market share,” the businessman said. “Telstra is the leading telecommunications provider in Australia.” Cu, meanwhile, said his company will be more than ready to take on the challenge, as it has already prepared its network and infrastructure. “While the entry of another competitor into the mature Philippine telco market is something we are closely looking at, Globe has had a long history of fighting a larger, wellresourced incumbent. We were a challenger brand for quite sometime and now we have emerged a leader,” he said.
Ayala. . .
Globe outperformed PLDT during the first half of the year, as PLDT posted a 5-percent drop in its net income, while Globe saw its bottom line surging by 27 percent on the back of record-breaking revenues from data and broadband. Pangilinan noted that his camp may not necessarily review its business strategy. The company, however, will base its future plans on developments in the market. Telstra and San Miguel in late August announced that they are currently negotiating for the possible joint venture to introduce a new player in the Philippine telecommunications market. Industry observers predict that the Australian company will bring into Manila its Internet expertise through its 4G technologies.
Boon and bane
Experts said the entry of a new core player will prove to be both a boon and a bane to the market as a whole. International Data Corp. (IDC) Philippines analyst Alon Anthony D. Rejano said a new telecommunications provider will be advantageous to consumers, as it will result in a more competitive market.
Continued from A1
welcoming a partner like AC Energy into MonteSol and into the solar-power sector,” Bronzeoak President Jose Maria P. Zabaleta said. “Renewable energy brings reliable and clean power to the countryside to accelerate our nation’s sustainable development,” added Montesol President Xavier Zabaleta, “and the investment of AC Energy will only accelerate the ongoing rapid development of Negros.” Ac Energy earlier dropped plans to develop solarpower projects. “We shelved our solar project in Mindanao but we continue to monitor the develop-
ments in solar, particularly the drop in solar-power panel prices. We can’t ignore these developments. We continue to study the prospects basically for our medium- to long-term plans,” Francia earlier said. Since 2011, Ayala has committed over $700 million in equity to develop conventional and renewable-energy sources. AC Energy has currently assembled over 700 MW of attributable capacity, putting the company closer to achieving its target of assembling over 1,000 MW of attributable capacity from power plants by 2016.
“The market will be more competitive. For the consumers, it will be an advantage, because it will give them more options and will lower the price,”he explained. Both National Telecommunications Commission (NTC) Director Edgardo V. Cabarios and Democracy.PH Founder Pierre Tito Galla echoed Rejano’s observation, saying that it will help improve the market condition in the Philippines. “There is still room for a third network player. Right now, we only have two core networks. True competition in the core network market is slightly minimal. If you want a free competition in the marketplace, a third core network player is welcome,” Cabarios said in an interview. He also admitted the need of the government for assistance in developing the telecommunications market. “We need investments in infrastructure because we are one of the countries in the region with the slowest Internet speeds. We need help from the private sector,” Cabarios explained. According to studies conducted by Ookla, an Internet metrics provider, the Philippines has the second-slowest average download speed among 22 countries in Asia.
As of May, the country’s average download speed reached 3.64 Mbps, ranking 176th out of 202 nations around the world. It is eight times slower than the global average broadband download speed of 23.3 Mbps. In a separate report, cloud services provider Akamai Technologies said that, while the Philippines might have improved its connection by a percentage point, its overall ranking in Asia still remains at number 13 out of 15, or the third-worst connection in the region. Filipinos, according to the first-quarter report of Akamai, enjoyed an average download speed of 2.8 Mbps during the period under review. Trailing behind are India and Indonesia with 2.3 Mpbs and 2.2 Mbps average speed, respectively.
ICT market
Galla added that Telstra’s entry will help develop the information communications technology (ICT) market in the Philippines. “A new player in the ICT space will lead to more competition that we hope will result in better services,
Cebu Action Plan to boost global growth. . .
courses of action in the next year, as well as five and 10 years from now. Beltran said some of these measures may include policies on Apec’s excess savings, currently among the highest in the world. He said savings can be utilized as investments that can improve the resiliency of economies to economic shocks and disasters, among others. “Despite being a driver of the global economy, Asia Pacific is vulnerable to risks. But with the measures proposed under the CAP, the region can be better guided on how to ensure sustainability and to improve inclusivity of growth in a coordinated manner,” Beltran said.
The CAP is a development road map for the Asia-Pacific region that was drafted by the Philippines with inputs from other Apec member-economies, multilateral organizations and the private sector through the Apec Business Advisory Council. The first pillar, financial integration, is aimed at easing the flow of trade and investments, such as by rationalizing and harmonizing rules on cross-border flow of funds. The second pillar, fiscal reforms and transparency, promotes sound fiscal policy and accessibility of data on state revenues and expenditures. By allowing greater scrutiny, the CAP
Continued from A1
proponents believe, governments will be forced to improve efficiency of public spending. The third pillar, financial resilience, seeks to make households, communities, enterprises and governments resilient to various shocks, including natural calamities. A key feature of this pillar is the promotion of accessible and affordable insurance products. The fourth pillar, infrastructure development and financing, is geared toward improving mobility and connectivity in the region, such as by promoting more public-private partnerships for public infrastructure projects.
more reasonable costs and greater penetration and access,” he said. “We also hope that this heralds the possibility of faster, more reliable and cheaper Internet and network services to the public.” However, this would prove to be a threat to the incumbent vendors. “If Telstra will bring in connectivity from Australia, there will be lower traffic in our local network. This is a threat to the vendors,” Rejano added. Telstra recently acquired undersea-cable company Pacnet Ltd., the operator of a 28,000-mile submarine network in the Asia-Pacific region. “Knowing Telstra, the largest telco in Australia, and with the capabilities provided by the incumbents, the largest factor that will determine the consumer’s choice is the pricing. So, aside from just providing connectivity, Telstra should also provide content. The battle cry for consumers today is entertainment and connectivity,”Rejano explained. Mobile services providers Smart, Sun and Globe have taken their battle for market supremacy in the digital space, with all of them entering into different partnerships with multinational companies for content.
Piatco. . .
Continued from A1
The Court also considered equity in the determination of the just compensation due for Naia 3. Replacement cost is a different standard of valuation from fair market value, which is the price at which a property may be sold by a seller who is not compelled to sell and bought by a buyer who is not compelled to buy. In contrast, replacement cost is the amount necessary to replace the improvements/structures, based on the current market prices for materials, equipment, labor, contractor’s profit and overhead, and all other attendant costs associated with the acquisition and installation in place of the affected improvements/structures. “The government shall only have ownership of the Naia-IPT 3 after it fully pays Piatco the just compensation due,” the SC explained.
news@businessmirror.com.ph
The Nation BusinessMirror
Editor: Dionisio L. Pelayo • Thursday, September 10, 2015 A3
‘Out of focus’ DILG neglects fight vs crime–Binay
D
By Recto L. Mercene
ESPIRE hefty budget increases every year, the Department of the Interior and Local Government (DILG) has failed to curb criminality because it undertakes programs outside its mandate, the camp of Vice President Jejomar C. Binay said on Wednesday.
“The DILG budget has increased by 30.2 percent under the current administration. The budget of the interior secretary has soared from P2.8 billion in 2010 to P16 billion in 2015. Unfortunately, this whopping increase of 471 percent in the budget of Interior Secretary Manuel A. Roxas II has not steadily reduced the crime rate,” Joey Salgado, media affairs head of the Office of the Vice President, said. Rather than focus on its key mandates, the DILG has involved itself with projects that are not within its core mandate and competency but for which it got billions from the administration, Salgado said. “It has no technical know-how in constructing housing projects, roads and irrigation, but the DILG has the Informal Settler-Families Shelter Program, the Payapa at Masaganang Pamayanan [Pamana] Program, and Sagana at Ligtas na Tubig [Salintubig] Program. These were given the time and attention
Naia’s newest terminal flooded during downpour
T
ERMINAL 4 of the Ninoy Aquino International Airport (Naia) on Tuesday night was flooded during the sudden downpour which affected many parts of Metro Manila, and delayed the departure and arrival of four Zest Air flights. The heavy rains caused the flooding of the secondary Runway 13-31, as well as the taxiway near Terminal 4. “The management wishes to add that the airport was merely one of those affected by the flooding which is a metro-wide concern,” the Naia Media Affairs Division (MAD) said. All operations returned to normal after the flood subsided. MAD said floods started to rise at 7 p.m. as the Parañaque River overflowed and flooded nearby areas. After three hours, flood waters were observed to be a knee-high level along the taxiway. While flights were delayed owing to the weather, arriving aircraft that were supposed to park at Terminal 4 had to be brought to a remote parking area. From there, passengers were provided with buses to get to the terminal, the MAD said. Flood waters completely subsided past 2 a.m. on Wednesday. Recto L. Mercene
NTC pushes anew for SIM card registration By Lorenz S. Marasigan
W
ITH reports on the proliferation of text scams sprouting anew, the National Telecommunications Commission (NTC) pushed anew for the registration of subscriber identification module (SIM) cards. NTC data showed that there are about 423 cases of reported text scams as of end-July. These, NTC Director for Regulations Edgardo V. Cabarios said, do not include cases where the victims were too disinterested or too embarassed to report. “What will ultimately stop these scams would be SIM card registration. We are supporting the House bill on SIM card registration and the Senate bill on the same matter,” Cabarios said in a media briefing on Wednesday. In March this year the House Committee on Information and Communications Technology, chaired by Nationalist People’s Coalition Rep. Joel Roy Duavit of Rizal, unanimously approved House Bill 5231, otherwise known as SIM Card Registration Act of 2015, a consolidation of nine bills. Under the measure, all direct sellers are mandated to register data on SIM card buyers in a registration form including the full name and address of the end users. It also requires the end user of a SIM card to present valid identification with photograph to ascertain his identity. The direct seller shall also require the end user to accomplish and sign a control-numbered registration form issued by the respective public telecommunications entity of the SIM card being purchased. The registration form shall include an attestation by the end user that the person personally appearing before the direct seller and the identification documents presented are true and correct and that the person is one and the same who has accomplished and signed the registration form. A fine of P300,000 would be imposed if the offense is committed by a public telecommunications entity for the first time, P500,000 for the second offense and for the third and subsequent offenses, a fine of P1,000,000 each.
by Secretary Roxas,” he said. On Tuesday the president of the Catholic Bishops’ Conference of the Philippines (CBCP), Lingayen-Dagupan Archbishop Socrates Villegas, expressed concern over the increasing crime rate. “Who would not be concerned about the increasing crime incidence? A crime is an offense against human dignity. So we should always be concerned about it,” Villegas said. Data from the National Police showed that a total of
885,445 crimes were reported from January to June this year, more than than the 603,085 incidents reported during the same period last year. The Volunteers Against Crime and Corruption (VACC) estimates that from January to June 2015, there were 40 murder a day and 36 homicides daily. “Three journalists were killed in August. A judge in Baler was, likewise, shot dead last month. Eleven cases of extrajudicial killings were recorded, too, in the same month. But these are the only incidents
that made it to the news. There are a lot more committed every day that are not reported in the media,” Salgado said. He said no excuses can be made for the failure, considering that the administration has been very generous in supporting the DILG. “One of the reasons for the high-crime rate is the lack of attention on the problem, which is the major job of the interior secretary. He is busy on other things that are not part of his job,” he said.
A4
TheBroa
Business
Thursday, September 10, 2015
Prime properti ‘dreary’ part o R
By David Cagahastian
izal Avenue used to be the longest national road before the Epifanio de los Santos Avenue, or Edsa, was opened. Named after the country’s national hero, Rizal Avenue was a vibrant economic center where people loved to shop and have fun.
The construction of the Light Rail Transit (LRT) three decades ago, coupled with the mushrooming of big department stores and malls in other parts of the metropolis, drove away Metro Manila shoppers from the area. While the exodus of Rizal Avenue’s clientele was not entirely due to the presence of the LRT, it may have contributed to its deterioration as it made some parts of the area dreary. The tracks of the LRT covered Rizal Avenue, making its surroundings dark even during the day. This may have encouraged the proliferation of thugs and criminals in the area. Despite the perception that Rizal Avenue has lost its old glory, residents in the area have fond memories of the area and refuse to let it go into oblivion. The fondness of long-time residents for the area, coupled with efforts of the government and the private sector to clean up Rizal Avenue, fuel hopes that the historical road could somehow recapture its lost glory. Some of the old buildings on Rizal Avenue may give off the impression that properties in the area are no longer worth much. But figures from the City of Manila’s assessor showed that properties on Rizal Avenue command a price that is comparable to those in other business districts in Metro Manila.
Expensive lots
According to the City of Manila’s assessor, the properties on
Rizal Avenue, circa 1930s. At left is Ideal Theater, designed in 1933 by National Artist Pablo Antonio.
Rizal Avenue and adjacent areas are still owned by the old owners because they don’t really want to sell those prime properties. Even for taxation purposes, the market values of properties in the area are still high and have appreciated through the years. These properties could fetch even higher prices in an actual sale since market values for taxation purposes are lower than the actual fair market values. “But nobody really wants to sell these properties,” said Manila City Assessor Engr. Jose V. de Juan in an interview. “If you look at the area, the owners of the properties there are still the old owners.” De Juan said the buildings may already be old, but the lots are still considered as prime properties, and have not depreciated in value, despite the gloom caused by the presence of the LRT in the area. Market values have not gone down despite the bad reputation earned by Rizal Avenue. According to the latest Schedule of Base Unit Values for Residential, Commercial and Industrial Lands in the City of Manila, market values of lots in this area have kept pace with those of other areas in Metro Manila. For instance, market values for purposes of computing real property tax of properties in the Carriedo area on Rizal Avenue is pegged at an average of P70,000 per square meter as of 2014. The average market value has gone up since 1979, when it was at P6,500 per square
meter. Seventeen years later, the value would jump to P31,710 per square meter. In the area adjacent to Ongpin Street in Santa Cruz, the market values are at P103,000 per square meter as of 2014. This is a steep climb from market values in 1979 (when it was only P3,100 per square meter). In the historical area of Plaza Miranda, market values of properties in 2014 are at P103,000 per square meter. In 1979 the market values of properties in Plaza Miranda were only P6,000 per square meter. This went up to P9,700 per square meter in 1983, then to P41,710 per square meter in 1996.
Zonal values
Even in the zonal values used by the Bureau of Internal Revenue in computing capital gains tax due on lots sold in the Rizal Avenue area, the zonal values are even higher than those of lots in the area of Aurora Boulevard in Cubao, Quezon City. Zonal values of commercial lots on Aurora Boulevard reached only a maximum of P50,000 per square meter as of May 2015, while zonal values of commercial lots in the Ongpin area in Santa Cruz reached a maximum of P91,410 per square meter. These high zonal values for commercial lots in the Santa Cruz area already appear to rival the zonal value of commercial lots in the Forbes Park and Dasmariñas
Village area (those along Edsa and McKinley Road) in Makati, which is pegged at P100,000 per square meter. This is probably the reason why the old shopping mall Isetann in Carriedo is neither folding up nor selling the lot it was built on.
Present fair market values
Due to the paucity of sale transactions involving real estate in the Rizal Avenue area of Manila, it is hard to pinpoint an exact figure regarding the fair market values of the properties in the area. This is because the history of
aderLook
sMirror
www.businessmirror.com.ph | Thursday, Thursday, September 10, 2015
ies in a of Manila that properties 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.
Historical premium?
The storied Capitan Pepe Building, designed by National Artist and Dean of Filipino Architects Juan Nakpil in the 1930s; (top) aerial view of Avenida area (Rizal Avenue) in Santa Cruz, Manila, as of June 2015. patrick roque
sale for the past three years, or the history of purchase prices in sale transactions in the area, is one of the factors in determining fair market values, according to Leo Hernandez, a former president of the Philippine Association of Realtors Board. The possible utilization of the property, factoring in the properties and improvements adjacent to the property subject of the appraisal, may also have an impact on the fair market value of a particular property. According to Institute of Philippine Real Estate Appraisers President Leo Albano, the LRT could still have some positive effects on the fair market values of properties on Rizal Avenue, especially those near the train stations. Albano said the proximity to the train stations makes it more convenient for residents in the area to get to their workplaces elsewhere in the metropolis. Albano said properties near the train stations are generally 20 percent to 30 percent more valuable than other properties that are farther away, given that other factors, such as the utilization and improvements of adjacent properties, which affect the appraisal of a particular property, are the same. A study conducted by an online property portal indicated
It is arguable whether a historical background of a particular property could actually put a premium that would make the fair market value of that property unusually high. Hernandez said that sometimes the price of a parcel of land on which a historical building stands could be boosted by its historical background. He cited the residence of former President Jose P. Laurel on Shaw Boulevard in Mandaluyong City which was sold to former Senator and another Nacionalista Party stalwart Manuel Villar as an example of a parcel of land that has gone up faster due to its historical background. However, some appraisers would disagree as to the premium to be given to some of the old buildings on Rizal Avenue which were built during the American occupation. During the heyday of the boda bil era—the local adaptation of vaudeville, which is the theatrical genre of variety entertainment in North America in the late 1800s up to the period before World War II—many art deco buildings mushroomed on Rizal Avenue, most of them designed by renowned architects and National Artists Juan Nakpil and Pablo Antonio. Nakpil designed, among many others, the Avenue Theater (demolished in 2006) and the State Theater (demolished in 2001), both found on Rizal Avenue. Meanwhile, Antonio designed the Ideal Theater, which was demolished in the 1970s, and the Scala Theater, which is still standing but is in a dilapidated condition. According to the National Historical Commission of the Philippines, these theaters on Rizal Avenue, back when it was still called Avenida Rizal, used to be the venues for theatrical performances, then they were converted to become moviehouses during the 1960s and the 1970s when the Philippine movie industry flourished. The storied Capitan Pepe Building, designed by Nakpil in the 1930s and still standing at the corner of Claro M. Recto and Rizal avenues, used to house The Moonlit Terrace and The Central Hotel, which used to be popular venues for prom nights and graduation balls. During the Japanese occupation, it used to house a military police (Kempeitai) headquarters. But now, even though some of these historical buildings are still standing, their historical background would not be a premium on the value of the land if sold to a buyer who has other purposes for it aside from rekindling and capitalizing on its very historical background. Engr. Jose Ocampo, a licensed appraiser, said some of these old buildings could not be considered as improvements in appraising the properties, and could actually be a “nuisance” because the buyer of the properties would still have to demolish the old building if he intends to do something else with it.
While it may be possible that the historical background of these properties could amount to nothing in the appraisal process of their fair market values, Ocampo said properties on Rizal Avenue could still fetch a high price, anywhere from P60,000 to P150,000 per square meter, depending on the “peculiar circumstances” of a particular parcel of land. These peculiar circumstances include, among others, the adjacent properties and their uses, the size of the lot, the size of the streets adjacent to the property, and all other details considered by appraisers in determining the fair market value
of a particular property.
Rizal Avenue’s revival
Nonetheless, these high market values of prime real estate in the area could only mean that efforts to regain the lost glory of Rizal Avenue may not be such a tall order. For one, its glorious past may have inspired businesses, such as the Manila Grand Opera Hotel, to set up shop in the area. The Manila Grand Opera Hotel was built on the original site of the revered Manila Grand Opera House at the corner of Rizal Avenue and Doroteo Jose Street. ALC Group of Companies, which
A5
owns and operates Manila Grand Opera Hotel, has decided to retain its name to serve as a reminder to Filipinos to remember their roots and the lessons of history. It was at the Manila Grand Opera House when the first Philippine Assembly was inaugurated in 1907, and, as an opera house, became the center of cultural events that helped shape the minds of Filipinos before World War II. Rizal Avenue occupies a significant place in the nation’s history. The government and the private sector can always look back on Rizal Avenue’s glorious past to find ways to recapture its old magic.
Opinion BusinessMirror
A6 Thursday, September 10, 2015
editorial
How the UN can shield civilians from war
O
f all the efforts the United Nations (UN) undertakes to make the world a better place, none is more vital than its work to keep people safe from war. Yet, the organization’s global peacekeeping missions are among its most troubled endeavors. This month’s annual General Assembly opening offers an opportunity to do something about that. The UN has 16 peacekeeping operations going on at the moment, the largest in hot spots, such as the Central African Republic, Congo, Darfur and Lebanon. Most are undermanned: The Congo mission has 24,000 troops and police to quell violence among a population of more than 68 million. And most are either inadequately protecting civilians or mired in scandals. They are also outgunned: Many of the 56 peacekeeping deaths in Mali, which has been desperately short of armored vehicles, have come from ambushes involving homemade bombs. One main reason: UN peacekeeping has become less a serious military effort than a job-creation program for poor countries. Consider that the country now contributing the greatest number of troops is Bangladesh— 9,400 of the UN’s 105,000 uniformed personnel—followed by Ethiopia, India, Pakistan, Rwanda and Nepal. While these nations may well be committed to protecting civilians, there is no doubt that, for their militaries, the $1,000-a-month-per-soldier paychecks are a big part of the appeal. And while it’s understandable that many impoverished African countries are involved, given that nine of the 16 missions are on that continent, most of the African troops come from poorly run, corrupt militaries and, thus, lack sufficient training for the job. The world’s richer countries mainly contribute money. The US provides about 28 percent of the $7 billion in annual funding; Japan chips in 11 percent; and the three European powers—France, Germany and the United Kingdom—give a combined 21 percent. But the world’s best militaries send few of their own well-trained and experienced troops. Only 78 Americans, 76 Russians and 287 Brits serve as peacekeepers. This system is exactly backward. The UN forces would be far more effective if they were manned by well-trained troops and led by experienced commanders. With North Atlantic Treaty Organizations (Nato) drawing down its troops in Afghanistan and the US playing only a supporting role against Islamic State in Iraq and Syria, tens of thousands of battle-hardened Western troops and commanders are available to better protect at-risk civilian populations in the developing world. Peacekeeping would also provide Japan, which this summer passed a legislation relieving restrictions on sending combat forces overseas, an opportunity to give its troops front-line experience. In exchange, the rising nations that gain the most economic or political benefits from UN peacekeeping efforts—including Brazil, China and Russia—should shoulder more of the financial cost. No doubt, there would be political backlash in the US over putting American soldiers under the control of UN bureaucrats. That need not happen: These missions should be put at least, in part, under the established command-and-control structures of the Nato nations, a military cooperation system that the US is comfortable with. Other reforms are needed, as well. Among the most urgent identified in a 2015 report by the Stockholm International Peace Research Institute is to set stricter mandates for when UN troops engage hostile forces to protect civilians: Too often, peacekeepers stand by or retreat in the face of danger. Also, UN missions need the freedom to cross national borders when hostile forces do, as in Sudan and West Africa. And the UN could do a far better job of coordinating its actions with regional peacekeeping forces, such as those of the African Union. Bloomberg editorial
Since 2005
BusinessMirror A broader look at today’s business Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief
T. Anthony C. Cabangon Jun B. Vallecera
Associate Editor News Editor City & Assignments Editor Special Projects Editor
Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Max V. de Leon
Online Editor
Ruben M. Cruz Jr.
Research Bureau Head Creative Director Chief Photographer Chairman of the Board & Ombudsman President VP-Finance VP-Corporate Affairs VP Advertising Sales Advertising Sales Manager Group Circulation Manager
Dennis D. Estopace Eduardo A. Davad Nonilon G. Reyes
Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.
www.businessmirror.com.ph
regional offices
n DXQR -93dot5 HOME RADIO CAGAYAN DE ORO E-MAIL ADDRESS: homecdo@yahoo.com ADDRESS: Archbishop Hayes corner Velez Street, Cagayan de Oro City CONTACT NOs.: (088) 227-2104/ 857-9350/ 0922-811-3997 n DYQC -106dot7 HOME RADIO CEBU E-MAIL ADDRESS: homecebu@yahoo.com ADDRESS: Ground Floor, Fortune Life Building, Jones Avenue, Cebu City CONTACT NOs.: (032) 253-2973/ 234-4252/ 416-1067/ 0922-811-3994 n DWQT -89dot3 HOME RADIO DAGUPAN E-MAIL ADDRESS: homeradiodagupan@ yahoo.com ADDRESS: 4th Floor, Orchids Hotel Building,
John Mangun
OUTSIDE THE BOX
A
fter seven years of the Philippine stock-market “bull run” that saw the composite index move from 2,000 to 8,000 and now back to 7,000, have we come to the end? The question being asked by the stock brokers is, are we in a correction or in the beginning of a “bear market”? Everyone, from the hallowed halls of political power to the “man on the street,” is almost desperate to keep this uptrend going. Members of the brokerage community that have made plenty of profits from increased trading are not going to cheer a change of stock-price trend. The stock-market experts are going to see their incomes fall and may have to get a real job at some point in the future. The Philippine stock market is not going to disappear like dust in the wind. My personal opinion at this point is that the concerns about the probable six-month drop in shares prices are overdone. The Philippine Stock Exchange Composite Index (PSEi) is off about 13 percent from its 8,000+ historic high. In the greater scheme of things—looking back farther than 2009—this decline is really not a big deal. The bigger problem is that most of the current
Rizal Street, Dagupan City CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001 n DXQM – 98dot7 HOME RADIO DAVAO E-MAIL ADDRESS: home98dot7@gmail.com ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996 n DXQS -98dot3 HOME RADIO GENERAL SANTOS E-MAIL ADDRESS: homegensan@yahoo.com ADDRESS: 2nd Floor, Penamante Clinic Tiongson Street, General Santos City CONTACT NO.: 0922-811-3998 n DYQN -89dot5 HOME RADIO ILOILO E-MAIL ADDRESS: homeiloilo@yahoo.com
ADDRESS: 3rd Floor, Eternal Plans Building, Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995 n DWQA -92dot3 HOME RADIO LEGAZPI E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal Street, Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992 n DWQJ -95dot1 HOME RADIO NAGA E-MAIL ADDRESS: homenaga@yahoo.com ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993
Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila
crop of investors and their experts have not been around long enough to know what a major decline in the local stock market looks like. The decline of the PSEi, particularly since the middle of May, is something I have been talking about for months, as we come to the economic cycle change at the end of this month (September). This coming new cycle—which reverses the current cycle that began in 2011—is both expected and inevitable. Economic confidence in the private sector ended on schedule at the top in 2007, which saw the start of the global financial crisis. While the problems that led to the debt crisis may have been the fault of governments, the blame was put on “evil” banks and greedy speculators. The world rushed to put its faith in the central banks and their monetary policies, and in governments and
their fiscal policies. Now that those policies have failed, the cycle is changing again. Any transition of the cycle brings the massive price and trading volume swings in the financial markets that we are also witnessing here on the PSE. All you have to do is look at local gasoline prices moving up and down like a yo-yo to see what is going on in the markets. What happens is each successive cycle is a “flight to quality” back and forth between the public and the private sector, depending on which sector is in trouble. After the banks failed in 2007, everyone went into buying government debt. Even now, people are willing to loan their money to governments at a negative interest rate. If you are willing to loan money to someone for “free,” you must have a lot of confidence that they are going to pay you back the principal. But too many governments are on the edge of debt deals, as happened to Greece. Look around Southeast Asia. Do you really want to loan your money to Malaysia or Indonesia right now, with their currencies falling like dead birds? Does the Chinese government inspire confidence? Is Japan your model of wise economic policy? Mexico and Latin America were bailed out of their debt crisis in the 1980s. Much of Asia was bailed out in 1997. These types of sovereign bailouts have happened over and over before. But not this time around.
Selling off the state in China
Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro
BusinessMirror is published daily by the Philippine Business Daily Mirror
HOM
PSE: Correction or collapse?
William Pesek
BLOOMBERG VIEW
C
hina’s latest batch of ugly data offers a stark message to President Xi Jinping: Whatever he’s doing to prop up growth isn’t working. Even worse than the 5.5-percent drop in exports last month was the 13.8-percent plunge in imports, indicating that domestic demand is weaker than the external sector.
The good news is Xi is changing tack. Rather than just tossing more stimulus at the economy and stocks, he’s redoubling efforts to reform the inefficient and opaque state-owned enterprises at the root of so many of China’s vulnerabilities. In other words, Xi is finally working to strengthen China’s foundations rather than papering over the cracks. The bad news is that Xi could just as easily be making things worse.
China’s pain points
Beijing is targeting the public sale of shares in state-owned enterprises (SOEs) in order to inject some market discipline into the companies’ governance, according to documents seen by Bloomberg News. The plan includes steps to increase the number of outside directors on boards, devise appropriate
executive salary levels and promote consolidation. But the overriding focus is on encouraging private capital to pile into SOEs, rather than wholesale reforms to make them more competitive first. As such, China may just be engineering a huge corporatist land grab—one that harkens back to the days Russia sold off its own state companies to a now-loathed class of oligarchs. If Moscow could undo any decision of the last 25 years it would be that epic carve-up of Soviet-era assets. Rather than transform Russia into an innovative industrial powerhouse, the privatization bonanza created a handful of young billionaire monopolists. In a 2008 retrospective, The Guardian described the oligarchs as “about as popular with your average Russian as a man idly burning bundles of £50s
outside an orphanage.” Russia has since devolved into a graft-ridden petro-state that’s becoming a smaller and smaller blip on investors’ radar screens. China, needless to say, can’t afford that outcome, and not just because it lacks Russia’s natural resources. The country very much needs a big, thriving private sector. The problem is that at the moment, political connections still matter greatly in the Chinese corporate world. Odds are, the best-placed tycoons will get first crack at share sales, possibly on sweetheart terms. And if they press for continuing cheap loans from state banks, the misallocation of capital that plagues the Chinese economy will only continue. To beat the middle-income curse, China needs to create hundreds of millions of new, good-paying jobs in nimble industries. That means leveling the playing field and creating the right incentives for young game-changers to disrupt an economy burdened by overcapacity. Entrusting the process to a group of greedy tycoons would set back China’s growth potential. Corrupt as is it is, Xi’s Communist Party is at least nominally charged with sharing the fruits of China’s 7-percent growth. Robber barons have few such compunctions. China can avoid that fate by not putting the cart before the proverbial horse. There are more than 150,000 SOEs, accounting for roughly 80 percent of the CSI 300 Index in China. We’re talking about the core of the world’s No. 2
Greece was not bailed out. Just enough financial assistance was given to keep the country from totally collapsing. You are not seeing the international financial institutions like the World Bank rushing to prop up the Malaysian ringgit. China is on its own, as if it was an infectious patient trying to escape from the hospital isolation ward. The flight to quality now will be into the US dollar and the stable and financially sound stock markets. King Dollar will remain so, at least in the foreseeable future. While it is true that the stock markets have been “stimulated” by quantitative easing, who can say that there will not be another round of QE? Can Europe and the US really handle significant sovereign debt default—which is inevitable—and see their stock markets collapse, too? The current action on the PSE is all part of the cycle change. Wake me up in a few months, because we will be in a new economic world after the onset of 2016. And barring any major political foolishness in the Philippines, the PSE will see another major uptrend. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.
economy. Rather than just creating new national champions, China must use this opportunity to consolidate industries in ways that increase efficiency, innovation and competition. That means modernizing SOEs before privatizing them— weeding out underperforming executives, dumping unprofitable businesses, increasing transparency and tightening the corporate-reporting process. Once companies are ready for sale, Beijing should sell them off in their entirety and not maintain huge public stakes (as is currently envisioned). For all the focus over trading in the A shares of PetroChina, for example, the state owns 97 percent of China’s biggest oil and gas producer. Really, who wants to buy shares in a “private” company when the government could ban you from dumping your holdings? The privatization process must be open, fair and rigorous. Finally, Xi needs to institutionalize his antigraft campaign. So far, it’s looked more like an effort to eliminate rivals and settle political scores than a broad and methodical push to clean up China Inc. A clear list of rules, red lines for malfeasance and indications of how cases will be pursued legally are needed to keep these new entities from becoming just as corrupt and bloated as their state-owned counterparts. Xi’s heart is in the right place. But he should remember, veering in the direction of Russia won’t take China where it wants to go.
Opinion BusinessMirror
opinion@businessmirror.com.ph
As Kadiwa following Jesus The fearsome foreign fighters of Islamic State? Msgr. Sabino A. Vengco Jr. Many are just children
I
By Julia Ioffe | TNS
t’s no longer shocking to hear that young men and women raised in the West have left the comforts of home for the turmoil of Iraq and Syria, eager to fight on behalf of Islamic State (IS). But still, we can’t understand why they do it, much less figure out how to dissuade them. Ask any expert in the field, and you’re likely to get a long disquisition on the various profiles of foreign fighters. Some are from poor suburbs; some are from middleclass families. Some are converts; some are born Muslim. Some come from broken homes; some come from intact families. Some are loners who struggle at school; some are popular overachievers. Some were radicalized online, others by someone they met in person. Some, often boys, are running from their problems; others, often girls, are running from the strictures of a conservative home. There is, however, one thing that most of these foreign recruits have in common: They are very young. A recent Danish intelligence report noted that the typical age range of foreigners joining the fight in Syria was 16 to 25. That makes them younger than the foreign fighters who streamed into previous jihadist struggles in Afghanistan, Iraq and Bosnia, who were 25 to 30. The process of radicalization begins even earlier, from ages 12 to 16. In other words, when we talk about the fearsome foreign fighters of the IS, we are, to a large extent, talking about children. And these children’s families are just as bewildered as everyone else. Recently I interviewed six women from five Western countries whose children had joined the IS. One of them, Christianne Boudreau of Calgary, Canada, recalled that her son, Damian, wouldn’t introduce her to his friends, wouldn’t sit at the dinner table if she served wine and would talk about “justified” killing. But she didn’t recognize what was happening. She thought, “Here’s a teenager going through another phase.” That’s more or less how all the mothers I spoke to experienced their children’s radicalization: just another, perhaps more angry, phase of adolescence. But neither Damian nor the other children had the chance to outgrow that phase. All but two died in Syria. The mothers of the two teenagers who are still alive expect the bad news any day. Many believe that Islamic State attracts a younger set than alQaeda did because it emphasizes excitement. Islamic State “paints a heroic picture,” says Farhad Khosrokhovar, a French Iranian terrorism expert. Al-Qaeda’s strategy, on the other hand, is “boring,” he says. “It’s just imams talking. [Islamic State] doesn’t do that at all. It shows images of young men and girls who are fighting and living an adventurous life.” The IS also gives recruits the impression that they’re fighting at a particularly important time, in
an epic, millenarian standoff between cultures. Magnus Ranstrop, who co-chairs the Radicalization Awareness Network, a European Union working group, told me, “It’s like being given a chance to play in the Super Bowl.” Islamic State’s sophistication doesn’t mean we should pity the young foreign recruits who heed the call. But it does suggest that we need to improve our counter-programming and develop a prevention strategy, even as we struggle to come up with a satisfying explanation for why Westerners join at all. Today, most Western governments focus on punishment. In August a Virginia teenager was sentenced to 11 years in prison for tweeting about how the IS could use bitcoin and for helping his friend travel to Syria. Those who return from the battlefield have faced criminal charges. What governments don’t provide is tangible assistance, or even much advice, for the first responders in this crisis: families. That’s in part because there’s no working model for effective intervention. “It’s new, it hasn’t been done before, and often we don’t know how to do it,” says Jessica Stern, coauthor of ISIS: The State of Terror. Still, the mothers I interviewed believe they could have done more to keep their sons and daughters from leaving. One Dane said she should have taken a more active role in her son’s newfound Muslim faith, to make sure he didn’t end up going to a radical mosque. She wishes she had helped her son gather aid for Syrian refugees from their home in Copenhagen so that he didn’t feel compelled to go to Syria. Daniel Koehler, a radicalization expert in Berlin, thinks active involvement is indeed crucial, and believes that joining the IS is not all that different from joining a cult or a gang, or falling down the rabbit hole of drug addiction. There is value in this point of view. As imperfectly as we’ve learned to deal with cults and gangs and addiction as a society, we find these problems less mystifying than religious radicalization. In Norway an organization called Just Unity has had success bringing young radicals back from the brink. It’s found that some devotees of Profetens Ummah, the main Norwegian radical group, are former gang members. And the same strategies that work on gang members also seem to work on radicals. A safe exit, a sense of community belonging and a job are all that some young men and women need to rejoin the mainstream.
Alálaong Bagá
G
od keeps the little ones in His mercy, who walk before Him in the land of the living (Psalm 116:1-2, 3-4, 5-6, 8-9). To think as God does is for the disciples of Jesus to walk after Him, denying oneself and taking up one’s cross (Mark 8:27-35).
I shall walk before the Lord The Hebrew Psalm 116 is divided into Psalm 114-115 in the Greek and Latin versions. This Hallel psalm is a song of praise, the first psalm sung after meal, and possibly the psalm sung by Jesus and His group after the Last Supper (Matthew 26:30). As a prayer of thanksgiving, it praises God because God has rescued the psalmist from a life-threatening situation. God has heard his cry for help and granted his petition and rescued him. That is why the psalmist, in turn, declares his love for God, his fidelity to the Lord. Death was like a dark power that was seizing him and dragging him to the netherworld of sheol. In his desperate situation he called upon the Lord, and his distress turned into grateful rejoicing. “Our God” is undeniably gracious and just and compassionate, true to His covenant relationship with His people. The psalmist’s confidence and devotion is bolstered by the experience that
God looks after the little ones who have nobody to turn to. Even as he was brought low by his personal condition, the saving love of God for him was there. His soul was liberated from death; he was freed from tears, grief and sorrow, and his feet from stumbling farther down. Now in a more secure condition, the psalmist is determined to walk in the sight of God with fidelity and gratitude.
Taking Jesus aside
AS Jesus and his disciples were on the way for the villages of Caesarea Philippi to proclaim to the people God’s saving love, Jesus sought to find out how His words and actions are understood by the people and also by His own disciples. He asked the disciples what the people are saying about Him. The answers were striking: people thought Jesus was John the Baptizer, or Elijah, or one of the prophets—all dead religious figures earlier concerned with the coming of the reign of God, who
M
a hard one to live. Some nations, like Germany, have gone to heroic lengths to accommodate this tragic exodus, which includes some 4 million souls. And some nations have not. Conspicuous among them are some of Syria’s wealthiest neighbors. “The Gulf countries—Qatar, the United Arab Emirates, Saudi Arabia, Kuwait and Bahrain—have offered zero resettlement places to Syrian refugees,” notes Amnesty International. These nations are not only physically close but have a great deal in common with Syria, particularly in language, religion, culture. They feel enough of a connection that some of their
the people thought had come back from the dead. Jesus was, in the mind of the people, a prophetic figure returned to life, a point lost on Peter when he heard Jesus’ words about His death. The faith of His disciples concerned Jesus, as well: Who do they think He is? The disciples, in fact, asked this question among themselves (Mark 4:41), when they witnessed how Jesus calmed the angry sea threatening them all. In the name of his companions Peter answered that Jesus is the Christ, the anointed one of God, the awaited Messiah. Peter took a step farther than the people, but not enough. Not just a prophetic figure and not just the popular messianic conception revolving around the enigmatic figure of the Son of Man who would come on the clouds at the end. To the shock of His disciples, Jesus confided to them that He would be rejected and killed, but that He would rise again. That path projection was too much for Peter, who took Jesus literally aside and tried to talk Him out of such self-understanding that could jeopardize His acceptance by the public.
Come after Me, take up your cross
Jesus rebuked and silenced Peter and the other disciples for their obvious misunderstanding of His mission. Their confession that Jesus is the Messiah carried only the popular connotation of glory and triumph for the Messiah and for those who
When traffic is not triviality Ariel Nepomuceno
DECISION TIME Make use of time, let not advantage slip! That’s not from a management guru but from a literary genius, William Shakespeare, who clearly assigned a high premium to the value of productive time.
T
here is absolutely no question that the current traffic situation in Metro Manila is no longer a joke. Edsa can only handle 120,000 vehicles per lane per hour but currently, this number grew to 145,000 vehicles. More vehicles with no effective traffic management and control is a formula for an urban disaster in a megacity like Metro Manila. Unfortunately, traffic statistics would show that a trip by car from the Camp Crame area in Quezon City to the business district of Makati City now takes about one hour and 45 minutes in the morning if one leaves between 7 and 8 a.m. If you leave Makati by 5 p.m., one would reach Cubao in about two hours and 15 minutes. The traditional choke points along Edsa have now increased from three (Balintawak, Cubao, Guadalupe) to at least eight, which now include Ortigas proper, Megamall area, Shaw Boulevard and Taft Avenue.
Filipino family, the work force and the industry. There is a peso value attached to lost time and opportunity, not to mention excess costs in fuel consumption. The gridlock in Edsa and its arteries adversely affects competitiveness and efficiency. Free flowing travel enables companies to bring merchandise to the market quicker. Consequently, this also boosts profits. Undoubtedly, productivity is a cornerstone of increased and sustained economic output. In turn, economic growth enables more gains in poverty reduction.
Lost productivity
Long-term solutions: Urgent
People who spend less time to get to key employment, education, commercial and population centers are inclined to be more socially and economically productive than those whose travel time takes several meaningless hours. Traffic congestion intensifies costs to the
Good traffic management and control systems, coupled with an effective transportation system, are crucial in promoting economic growth because it cements the interconnections between different parts of the country and even beyond our borders. Superior urban transporta-
Gulf states’ shameful silence on the refugees
unich is some 1,600 miles from Syria, and far removed from the political and religious disputes that have fueled the four-yearold civil war there. But in recent days, thousands of Syrian refugees have arrived there by train, to be greeted with applause, welcoming signs, tea and food. Germans are under no special obligation to help Syrians, but the government of Chancellor Angela Merkel has agreed to take some 800,000 of them—inspiring some to proclaim the chancellor, “Mama Merkel, Mother of Outcasts.” Merkel said, “The fundamental right to asylum does not have a limitation.” It’s an easy sentiment to preach but
Thursday, September 10, 2015
governments have provided money and weapons to groups fighting to remove Syrian President Bashar al-Assad. But while Germans (and others) are making room for the migrants, the Gulf states are making excuses. They point to the $1 billion contributed by their citizens and charitable organizations to help these Arab brethren. That’s significant, but it’s only a quarter of humanitarian aid furnished by the United States, the biggest donor. The US has been faulted for agreeing to admit so few refugees from the Syrian conflict (1,500 so far), but that’s better than the Gulf nations, which ought to feel a vastly greater responsibility, given
their proximity and their wealth. The average income in Qatar is $143,000; in Saudi Arabia, it’s $52,000. Yet, these countries have evaded a burden taken on by poorer nations like Lebanon, which has 1.2 million Syrian refugees, and Jordan, which has 630,000. The Gulf countries have grounds to be wary of large inflows that could upset existing political balances. But the same could be said of Iraq, Egypt and Turkey, which have stepped up anyway. Another rationalization is that the Gulf states have native populations that are greatly outnumbered by foreigners. In the UAE, 88 percent of residents come from elsewhere, mostly to work. In
A7
follow Him. Jesus “turned around” and answered Peter’s rebuke of Him with His own rebuke of them. Taken aside by Peter, Jesus would not be diverted from His right way and emphatically pointed out that Peter had joined the ranks of Satan, whose principal intention is to subvert God’s plan. Jesus demanded that Peter return to following Him: “Get behind Me!” The way Peter’s mind was working clearly was not “thinking as God does, but as human beings do;” he was set not on divine things, but on human things. Jesus is the way; His way is doing the will of God (Mark 3:35), being the least and servant of all (9:35), offering one’s life for the sake of the gospel (8:35). To follow Jesus means denying oneself, taking up the cross. In the divine plan, the seed must die before it can bear fruit; the one “who wishes to save his life will lose it, but whoever loses his life” for the sake of Jesus will save it. Alálaong bagá, where do our minds dwell? What path are we taking? Saving or augmenting our possessions and position and reputation, wanting to gain the whole world but losing what is most valuable? Are we walking before the Lord, filled with trust and praise? Are we behind Jesus in imitation of Him? Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.
tion systems facilitate more access to important services and social activities. They link people to their workplace, deliver products to market faster, solidify both supply chain and logistics concerns, and boost local and international trade. Environmentally speaking, less traffic congestion means less greenhousegas emissions. A plethora of scientific and policy studies on the direct linkage between mobility, transport systems and productivity support the aforementioned conclusion. A study made by the Japan International Cooperation Agency (Jica) showed that Metro Manila’s traffic congestion costs the Philippines P2.4 billion every day way back in 2012 when the study was made, and that the country stands to lose up to P6 billion a day by 2030 if the problem persists. With transit demand that reach up to 7.4 million passengers a day by 2030, Jica said there is a need for good mass-transport services to address this issue. Public transport accounts for 69 percent of the total number of trips taken in Metro Manila every day. Jica also came up with a 2030 plan, which involves the establishment of an integrated urban mass-transit network, efficient infrastructure and improvement in traffic-management activities. If the plan is operationalized, our country can save as much as P1.2 trillion in 2030: P1.9 billion a day or P570 billion a year from time cost savings and P2.1 billion a day or P630 billion a year from vehicle operating cost savings.
Abad that the government intends to increase infrastructure budget from about P400 billion in 2013 to at least P800 billion in 2016, to reach the target of 5-percent infra spending to gross domestic product ratio. The Executive department has also begun an infrastructure rationalization plan under which government processes are streamlined to fast-track infrastructure projects. These projects would include improvements in transport and traffic-management concerns. T he Highway Patrol Group (HPG) experiment is also one concrete response by our government to the public outcry to solve the chronic traffic problems in Metro Manila. It seems to be producing some positive results, but it’s still early and we are all aware that long-term solutions are needed to address this nagging issue. Positive feedback continuously builds up as the general populace is pleased that our government is seriously taking this up. Critical here is the leadership of PNP chief Gen. Ricardo Marquez, who is known for his no-nonsense management style. The government must also double the public education aspect of this traffic dilemma. Our citizens, the motorists in particular, must learn the proper rules and etiquette on our busy roads from the time they are in high school, to the moment they apply for their license to drive, and up to the first chance that they hit the road. Part of the solution is to follow and respect traffic rules.
PNP and budget support needed
Very encouraging is the pronouncement of Budget Secretary Florencio B.
For comments and suggestions, send to: arielnepo.businessmirror@ gmail.com
Kuwait the figure is 70 percent. But if they can take in hordes of Indians and Filipinos to clean houses and bus tables, they should be able to absorb Syrians, who are also capable of working. The UAE has 8 million foreigners but can’t take a few thousand Syrians? Even people in the Gulf nations are embarrassed by their failure. A newspaper columnist in Kuwait lamented, “We’re seeing a silence that’s scandalous.” Cartoonists have caustically ridiculed the inaction. The Washington Post reports, “The Arabic hashtag #Welcoming_Syria’s_refugees_is_a_Gulf_duty” was tweeted more than 33,000 times.” Recently Egyptian telecom magnate
Naguib Sawiris offered to buy an island from Greece or Italy to serve as a haven for hundreds of thousands of desperate migrants. California real-estate tycoon Jason Buzi had earlier proposed founding a new nation for such exiles, so “at least they’d have a place to live in safety and be allowed to live and work like everybody else.” Some of them are lucky enough to have found a place where they can find safety and sustenance. Some of them are not. The US, it’s fair to say, can do a lot more than it has to shelter these unfortunate souls. But the greater obligation falls on those of Syria’s neighbors that have closed their doors. TNS
2nd Front Page BusinessMirror
A8 Thursday, September 10, 2015
PHL has 2.72M unemployed, 8.32M underemployed–PSA
N
By Cai U. Ordinario
early 11 million Filipinos are either jobless or in need of other sources of income, according to data released by the Philippine Statistics Authority (PSA).
Based on the July Labor Force Survey (LFS), the PSA data showed that there were 8.32 million underemployed and 2.72 million unemployed Filipinos. “The rise in underemployment for the period has been driven by full-time workers who still want additional hours of work; whereas, the number of underemployed part-time workers actually decreased by 6 percent, accounting for 263,000 people,” Economic Planning Secretary Arsenio M. Balisacan said. Former Philippine Economic Society President Alvin Ang said the high number of underemployed Filipinos was a clear indication that the economy was not yet producing quality jobs. Ang said the government needs to boost the manufacturing sector and shift the focus of agriculture to other crops to create
better job opportunities for all. University of Asia and the Pacific School of Economics Vice Dean Cid Terosa said, for his part, that the high number of unemployed and underemployed was expected because of the economic slowdown. Terosa added that the employment data from Leyte also contributed to the number of jobless and underemployed Filipinos. “The government can raise public spending on infrastructure development; promote countryside development; and create more opportunities for MSMEs [micro, small and medium enterprises] to grow and prosper,” Terosa said. The data showed that there were a total of 66.61 million workingage Filipinos, aged 15 and over) in July 2015. The PSA estimated that
the jobless rate is at 6.5, percent and the underemployment rate is 21 percent in July. These figures already include Leyte, which has not been included in past surveys due to the devastation wrought by Supertyphoon Yolanda (international code name Haiyan). However, without Leyte, the PSA estimates that there are 65.12 million working-age Filipinos in July 2015, higher than the recorded 64.07 million in July 2014. The unemployment rate is still at 6.5 percent, with the inclusion of data from Leyte. This is lower than the 6.7 percent recorded in July 2014. The country’s underemployment rate, the PSA said, was at 20.8 percent without data from Leyte. However, this was still significantly higher than the 18.3 percent recorded in July 2014. Despite these challenges, positive shifts were mostly noted in the labor market. Mean hours of work significantly improved, indicating that economic activity has pickedup for the period. To sustain this, Balisacan said the government must ensure that the gains in raising both the level and quality of employment and gains are sustained.
Citing the likely stronger impact on the economy of El Niño in the coming months, Balisacan stressed the importance of a well-coordinated, direct and proactive set of mitigating measures for affected workers in the agriculture sector. The Roadmap to Address the Impact of El Niño is currently being drafted by the National Economic and Development Authority as the lead agency in the Task Force on El Niño. “Over the medium term, government efforts should help lift the constraints to sustained, decent and quality job-generating growth by increasing competition and reducing the cost of doing business,” Balisacan said. The data showed that most of the underemployed worked less than 40 hours a week. Most, or around 44.2 percent, were engaged in the Services sector. The PSA explained that underemployed Filipinos include those who expressed desire to have additional hours of work or an additional job or need a new job with longer work hours. Meanwhile, of the total unemployed, 62.1 percent were male; around 50.4 percent were aged 15 to 24; and 44.4 percent were either high-school undergraduates and graduates.
www.businessmirror.com.ph
D.O.T.C. TEAM HEADS TO DALIAN, CHINA, IN BID TO HASTEN TESTING OF MRT 3 PROTOTYPE TRAIN By Lorenz S. Marasigan
T
he team handling the capacity-augmentation initiative for the Metro Rail Transit (MRT) Line 3 will head off to Dalian, China, next week to meet with the German suppliers of traction systems, gearboxes and brake systems in a bid to expedite the testing of the prototype train. Transportation Secretary Joseph Emilio A. Abaya said his office aims to fast-track the tests on the prototype so that the delivery of the actual coaches will not be delayed further. “To fast-track the whole process, we met with officials from the German Embassy, Voith and Knorr-Bremse a few weeks back regarding delivery schedules. Next week our team will discuss the details with these suppliers, so we can explore ways to provide more trains to the public earlier than scheduled,” he explained. Voith will manufacture the traction systems and gearboxes for the 48 brand-new coaches of the MRT Line 3, while Knorr-Bremse is in charge of the brake systems. Both firms are established suppliers in the global rail industry. “As we announced last June, static testing will be conducted from September to October. Meanwhile, dynamic testing was scheduled from November to December, when these parts will be delivered from Germany,” Abaya said. The government aims to augment the capacity of the railway system by adding new train cars. The prototype for the new coaches arrived last month, but delivery of the actual cars is scheduled for next year.
Once the 48 new train cars come in, MRT 3’s trips per hour will increase from 20 to 24, which will translate to a 60-percent rise in the number of passengers per hour per direction. This means that there will be 37,824 passengers who can avail themselves of the rail service every hour heading toward one direction. Currently, only about 23,640 people ride an MRT service per way every hour. But that number still depends on how many trains are running on a particular day. Aside from adding new coaches to the current MRT 3 fleet, the government is also rolling out P9.7 billion worth of projects to improve the train line. The government is also spending P4.25 billion for the three-year maintenance and the general overhaul of existing train coaches and the replacement of the system’s signaling system. The agency is targeting to award the contract within the fourth quarter this year, to enable the latter to take over from the seven multidiscipline contractors currently maintaining the rail line, by January 2016. This long-term maintenance provider will not only undertake the regular maintenance requirements of the system over the next three years but will also conduct the general overhaul of existing MRT 3 coaches, as well as the replacement of the signaling system. The general overhaul is needed in order to improvetheconditionofthe16-year-oldcoaches, and the signaling-system replacement will ensure safer operations throughout the line.