BusinessMirror 11, 2015

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

U.N. MEDIA AWARD 2008

BusinessMirror A broader look at today’s business TfridayNovember 18,2015 2014Vol.Vol.1010No.No.21440 Monday, May 11,

www.businessmirror.com.ph

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

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‘CHILLING EFFECT’HURTING ENERGY DEVELOPMENT FEARED

B L L

NERGY Secretary Carlos Jericho L. Petilla is worried that the recent ruling of the Commission on Audit (COA) ordering the consortium behind the Malampaya deepwater gas-to-power project to pay the government P53.14 billion in taxes could affect other oil and gas contracts and create a “chilling effect” that would hurt energy development in the country.

Petilla said the COA order might set a precedent that can be implemented in other service contracts entered into by the government with the private sector.

He cited the case of the Galoc oil field, under Service Contract (SC)

14C1, located in waters northwest of Palawan. The Galoc field is the Philippines’s only oil producer of commercial scale with an output of over 10,000 barrels per day.

The stakeholders in SC 14C1 are Galoc Production Co., 33 percent;

Galoc Production Co. No.2 Pte. Ltd., 26.84 percent; Oriental Petroleum & Minerals Corp. and Linapacan Oil & Gas Power Corp., 7.79 percent; Philodrill Corp., 7.21 percent; and Forum Energy Philippines Corp., 2.28 percent.

“The implication of this is that it will not only affect the Malampaya project, but affect other petroleum drillings, including Galoc,” he said.

To recall, the COA overruled the petition of the consortium, together with the Department of Energy (DOE), that the income tax was already included in the government’s 60-percent share in the Malampaya royalties.

The members of the consortium include Shell Philippines Exploration B.V. (SPEX), 45 percent; Chevron Malampaya Llc., 45 percent; C  A

Michael Romero owns Harbour Centre–RTC T

HERegional Trial Court (RTC) in Manila recently ruled that Michael L. Romero is the true and rightful owner of the disputed Harbour Centre Port Terminal Inc. (HCPTI). The decision effectively quashed all previous orders on the contested port facility.

“This court recognizes the authority of the Movant’s board of directors, to which Michael L. Romero belongs, and their authority to act for and in behalf of the HCPTI,” according to the 11-page order, dated May 6, 2015, issued by Judge Silvino T. Pampilo Jr. of the RTC Branch 26.

Bolstering the ownership issue, the court even referred to the “first Deed of Assignment transferred and conveyed

to HCPHI [Harbour Centre Port Holdings Inc.] the 286,495,652 shares of R-II Builders, whose shares represent 28.21 percent of the total issued and outstanding capital stock in HCPTI.” “The second Deed of Assignment, on the other hand, transferred and conveyed again to HCPHI the 403,799,000 shares of R-II Holdings, representing 39.90 percent of the total issued and outstanding capital stock in HCPTI, or for a total of 68.11-percent corporate shareholding out of the total issued and outstanding capital stock in HCPTI,” the court said.

The RTC in Manila noted that the corresponding taxes were paid on the transfers as evidenced by the Certifi-

PESO EXCHANGE RATES n US 44.6500

cates Authorizing Registration and Tax Clearance Certificates issued by the Bureau of Internal Revenue, in relation to the transfer between R-II Holdings Inc. and HCPHI, and the transfer between R-II Builders Inc. and HCPHI. “Notably, plaintiff did not bother to refute Movant’s allegations and arguments regarding the 68.11percent ownership of HCPHI in HCPTI,” the court said.

As far as the court is concerned, “these two Deeds of Assignment, to date, remain valid and effective, as the same were not questioned, controverted, much less nullified, in a court of law.”

WILL PPP, P6.58-T INFRA BINGE END PINOYS’ TRANSPORT WOES? COMPREHENSIVE & INTEGRATED INFRASTRUCTURE PROGRAM 20132016

TRANSPORT SYSTEM

₧6.58T TOTAL INVESTMENT REQUIREMENT

DOE worried over Malampaya ruling E

SPECIAL REPORT

₧3T

SOCIAL INFRASTRUCTURE

₧1.37T WATER RESOURCESS

₧1T

ENERGY RESOURCES

₧847B ICT

M

₧89B

BM GRAPHICS: ED DAVAD

B L S. M

ANILA, a busy capital in Southeast Asia, was still asleep when James Lopez, a 24-year-old tech specialist, rose from his soft bed. His senses were still fighting the sandman’s magical sand and his will to go as early as he could before the traffic C  A in the city becomes a nightmare.

C  A

n JAPAN 0.3728 n UK 68.1493 n HK 5.7585 n CHINA 7.1936 n SINGAPORE 33.5160 n AUSTRALIA 35.3579 n EU 50.3250 n SAUDI ARABIA 11.9064 Source: BSP (8 May 2015)

A2 Monday, May 11, 2015

BMReports BusinessMirror

news@businessmirror.com.ph

Will ppp, ₧6.58-T infra binge end Pinoys’ transport woes?

Continued from A1

He carefully stirred his morning brew, sipped and felt a rush of heat come into his system. Wistfully, he took a quick shower, donned his office clothes and rode a jeepney to the nearest train station to come to work.

But, he was unfortunate that day.

Monday’s rush had him praying that he would catch the early-morning train before the crowd gets unruly. His usual commute requires him to rise by 4 a.m. to catch the 5:30 a.m. jeepney going to the Light Rail Transit (LRT) Line 1’s Central station in Manila from his house in Sampaloc.

He usually rides two railway systems to get to his office in McKinley in Taguig City: the LRT 1 and the infamous Metro Rail Transit (MRT) Line 3.

“I take the LRT Central station to Edsa station route from LRT 1. Then I transfer to the MRT station in Taft then get off at Magallanes station. I then take another public transportation to my office in McKinley in Taguig,” he said, eyes shot upward, while remembering his daily commute.

Sometimes, he said, he rides the Philippine National Railways going to Magallanes. He takes the early-morning ride from España, Manila, to Makati City.

Daily commute, he said, usually takes about an hour and a half to about two hours, if the traffic is bad.

But that particular Monday, he said, was a nightmare. The traffic along España was congested to the point that his feet were itching to brave the streets and walk along the busy arteries of the capital. España is home to the University of Santo Tomas, which is a kilometer or two away from the Far Eastern University and the University of the East. The thoroughfare itself is found along the unversity belt.

He arrived at a quarter past 6 at Central Station.

“I had to improvise. I squeezed my way through the queue of the LRT. I didn’t mind that I will have to stand along the crowded train coach for more than 15 minutes just to get to the office,” Lopez said, laughing with the thought.

By then, sweat started to trickle down his chin, with the sweltering heat of the summer and the combined body heat of the passengers inside the train. His office clothes started to have paintings of perspiration— from his and the lady standing beside him.

“I have my handkerchief ready. I have no choice but to do it, because if I don’t I’ll be late, and I’ll get a demerit,” he said. “This is just one of the challenges that I have to face. I try to avoid those who are perspiring too much.”

Finally, he arrived at his train stop and transferred to the next train line. He started to queue once more. Thankfully, the queue was much shorter, he said.

After a grueling morning of com-

Chaos is the order of the day at Metro Rail Transit train stations, as commuters literally have to elbow their way in and out of overloaded train cars during rush hour. ED DAVAD

mute, Lopez finally arrived at his office. He rushed to the bathroom to freshen up.

Despite all this, the tech specialist still continues to put the train lines as his first choice of transportation mode.

“They are still the fastest way to get to the office. The traffic is just too bad, if you ask me,” Lopez explained.

He is just one of the millions of Filipinos who use the country’s train systems daily. The railway lines were developed during the last century, with the oldest overhead train system in Asia, the LRT Line 1, still standing up to date. This transportation mode is seen as the best way to combat the congestion along major arteries in Manila and its neighboring cities, but this transportation mode is also experiencing bottlenecks on themselves.

Infrastructure has long been the weak spot of the Philippine economy. Losses from traffic costs due to the lack of infrastructure amount to about P2 billion daily, a figure that could shoot up to as high as P6 billion in 20 years, according to the Japan International Cooperation Agency.

Should these problems persist, Manila will see a giant parking lot along its major roads during rush hours. The only way to

combat this is to increase capital spending in infrastructure, experts said.

Indeed, the government has moved to increase its budget for the sector, with an P826-billion capital target for 2016. This, Economic Secretary Arsenio M. Balisacan said, would hopefully translate into revenue growth in the long run.

“In recent years, the Philippines has seen stellar economic growth and critical structural reforms transforming the country’s image in the international development community from the ‘Sick Man of Asia’ to one of the most economically dynamic, fast-growing countries. One of the government’s strategies to sustain this robust economic performance and the improved confidence among the international business community is to accelerate infrastructure development as stipulated in the Philippine Development Plan,” he said.

In line with this, various master plans have been formulated to guide the development and implementation of infrastructure projects and other development interventions. These plans are translated into priority programs and projects that are currently being implemented and will be started within the medium term by national government

agencies, government-owned and -controlled corporations, government financial institutions and other government offices.

According to the Comprehensive and Integrated Infrastructure Program for the years 2013 to 2016, and beyond, the priority programs and projects for the infrastructure sector comprise a total of 3,077 projects, with total investment requirements of about P6.58 trillion. Of this investment requirement, a total of nearly P3 trillion is allocated for the development of the country’s transport system covering air, land and water; P1.37 trillion is for social infrastructure to ensure the protection of public health and the environment, improvement of access to quality health and education facilities, and access to decent housing and services; over P1 trillion is for the equitable and efficient management of water resources to ensure adequate, safe and sustainable water for all; P847 billion is for sustainable, diverse and reliable energy sources; and P89 billion is for the provision of fast, reliable and affordable information and communications technology.

But, this is not enough, economic managers once argued, leading to the for-

DOE worried over Malampaya ruling. . . and Philippine National Oil Co.-Exploration Corp., 10 percent.

Petilla said this matter would have to be discussed within the agency and with the consortium members. “We will sit down with the legal people in the DOE. Moving forward, it will be a discussion among us first,” he said.

But what is clear is that the DOE, if directed to collect additional taxes from the consortium, does not have any choice but to do so, Petilla said, adding that it would have to be the consortium that should elevate the matter to the Supreme Court (SC), if necessary. “If they say that we should collect, then we have to collect. If we are asked to give our opinion, we will just give [our opinion]. But it is not the DOE that will appeal for them,” he pointed out.

SPEX, according to its Managing Director Sebastian Quiniones, would seek guidance from Petilla’s office. “We are studying it with the DOE. The DOE has to guide us. We are one party with the DOE so we need to consult them,” he said last week when asked to comment.

When asked if SPEX agrees with the COA report, Quiniones said the contract it entered into with the government dictates that the said taxes are already included in the government’s share that it yearly remits.

“That is what we signed up for. We have to get together with [DOE] to talk. We will wait. The COA is government and the DOE is also government,” Quiniones said.

Petilla agrees on this. “In the past, I was still not yet the DOE secretary then, the sharing was already net of income tax. So probably this will have to be raised by the Malampaya consortium to the Supreme Court.”

The SPEX official had met with Chevron on the matter. “I had a meeting with our JV [joint venture] partner,” he said last Friday.

The Malampaya consortium has remitted $900 million in royalty payment to the national government last year.

This brings to $8.5 billion the total payment turned over to the government since the successful commissioning of the project in 2001.

“Last year it was around $900 million.

It was based on the pricing of oil and gas, which had an impact on pricing,” said Quiniones, when asked why last year’s payment was lower than in the previous years, which reached over $1 billion.

Malampaya royalties have so far been used for the fuel requirements of the National Power Corp.-Small Power Utilities Group amounting to P2 billion; Pantawid Pasada Program, P450 million; and for the

purchase of the USS Hamilton cutter marine vessel to strengthen the security perimeter of the Malampaya Natural Gas Project, P423 million.

In a briefing last Friday, the SPEX official underscored the importance of the recently concluded 30-day maintenance shutdown of the Malampaya facility that ended on April 13.

To sustain the level of gas production from the reservoir, the consortium has started a $1-billion expansion program through two new project phases. Phase 2 involves the installation of two new subsea gas wells worth $250 million. Phase 3, meanwhile, is composed of new compressors and a platform that will be completed in 2015.

Quiniones said this platform will be commercially operational by the middle of this year. “We need to lay out the cables. We need to make sure that the structure is strong,” he said, adding that the next shutdown is scheduled in 2020.

The Malampaya gas project supplies 40 percent of Luzon’s energy needs by fueling three natural gas power plants with a combined capacity of 2,700 megawatts (MW).

Permit extension

SPEX wants the DOE to extend its license to operate the gas field for 15 years.

Continued from A1

The license granted to the Malampaya consortium to conduct exploration and drill activities under Service Contract (SC) 38 is valid until 2024.

“We sent them a letter in 2011. We always have talks with the government. We now patiently wait. It’s difficult to second guess what the government will do next,” Quiniones said, adding that to do more drilling, they need government assistance, particularly in the issuance of permits.

But Petilla said the government could not act on the license renewal until SPEX submits a definitive proposal, which must include the gas volumes beyond 2024 and the cost of the gas.

“We are interested to extend it but until they submit an offer, we would not know what we are extending here. Probably, best to leave it to the next administration since 2024 is still far away,” he said.

Petilla said his office might craft a policy that seeks to officially bid out an extension for SC 38 after 2024. “I think that is what we can do. We will have to issue a policy on that so that it would be clear what to do next.

[SPEX] may bid and they will probably win.”

On the lookout

mulation of the Public-Private Partnership (PPP) Program, which is currently headed

by Executive Director Cosette V. Canilao, a former bank executive.

This initiative aims to boost public infrastructure spending by tapping private-sector participation in public infrastructure development. Through private-sector investments under the country’s pioneering key infrastructure program, public resources can be freed up and be utilized for the provision of much-needed social services.

The program, as in any new initiative, was launched with a slow start, owing to the needed reforms by several agencies and the lead time to lay down the plans for the country’s infrastructure policy measure. It was launched in 2010, a few months after President Aquino assumed office in June that year.

Its first three years saw only a few projects being auctioned off, and a few more being drawn up. The PPP Center passed through a rough road during these years, as regulatory and legal issues sprout like mushrooms, spreading like wildfire. By 2014 the center and the implementing agencies of the projects have learned valuable lessons, enough to make the process of procurement and market sounding faster.

As of today, it has awarded and signed nine infrastructure contracts with an indicative total price tag of P133.4 billion.

Some of these projects were won by consortium of big companies by offering premium bids—or offers that allow the government to generate instant revenue for just awarding the project to the proponents.

A few months away from bidding goodbye to her post, Canilao and her team are pushing projects out of the robust pipeline of PPP deals and are trying to sustain the momentum that the government has achieved throughout its six-year tenure.

Several implementing agencies are currently tendering 14 deals that are on the list of the government’s priority projects.

But these might be put into peril as the administration is set to step down in 2016. History dictates that changes in the country’s heads carry necessary setbacks in reforms and projects. This, according to several businessmen, bankers and government officials might put a shadow of doubt in the current administration’s infrastructure initiative.

Risks are heightened when an administration passes the crown to another, Marsh Ltd. Senior Vice President for Asia Infrastructure Practice John Holmes told the BusinessMirror.

“Any change in administration presents heightened risk around uncertainty of honoring existing contracts. However, we are confident that the progress in PPP delivery will continue,” he explained.

This places Filipinos like Lopez at the losing end.

Quiniones said SPEX could be interested

to join Otto Energy Investments Ltd. and its partner Trans-Asia Petroleum Corp. in SC 55, which covers Hawkeye-1 exploratory well in offshore Southwest Palawan.

“They are taking a risk to drill on their own. If they find enough gas, which is near [Malampaya], we already have a technical hub. What I’m saying is, if they are successful and they discover gas, then obviously we can have a discussion,” the SPEX official said.

Graeme Smith, SPEX vice president for Exploration in Asia, said earlier the company remains interested to conduct future exploration activities after work for SC 38 is done.

“We’re always interested to look at all opportunities available. We are constantly looking and taking note of the financial and technical risks involved,” Smith said.

The Malampaya gas field off Palawan contains 2.7 trillion cubic feet of natural gas and 85 million barrels of condensate.

The consortium has consumed around 1.5 cubic trillion of gas, Quiniones said. But the facility is expected to run out of gas by 2024.

“We are always on the lookout for additional gas and we are always looking at what others are doing to answer a question. Do we want to join in this endeavor or not?”

news@businessmirror.com.ph

The Nation BusinessMirror

Editor: Dionisio L. Pelayo • Monday, May 11, 2015 A3

Palace, lobbyists bank on new Comelec chief

A

By Butch Fernandez & Joel R. San Juan

MID criticism he’s not an election lawyer, exPresidential Commission on Good Government (PCGG) Chairman Andres D. Bautista is getting good reception from Malacañang and the Center Left.

“We’re confident that he [Bautista] can hurdle the Commission on Appointments,” Palace Deputy Spokesman Abigail Valte said over the weekend.

Bautista’s record “will also bear out his credentials and his competence,” Valte added.

The group Citizens for Clean and Credible Elections (C3E), which touts itself as an “election watchdog,” also welcomed on Sunday Valte’s announcement of Bautista as newly appointed Commission on Elections (Comelec) chairman.

Prior to Valte’s announcement, Bautista attended the forum on alternative election systems last week in Quezon City that C3E coorganized with organizations in the Center Left.

“His presence sends all the right signals to us concerned groups that he is open, and is willing to listen, to all options before deciding which path to take,” C3E coconvenor Alain Pascua said. Aside from Pascua’s group, the event was coorganized by Kalusugan alang sa Bayan Inc. and Social Watch Philippines Inc., the organization led by former National Treasurer Leonor Magtolis-Briones.

Briones, National Center for Public Administration and Governance professor emeritus, said they weren’t expecting Bautista to come.

“It was definitely a pleasant surprise seeing Chairman Bautista in the event, and it goes to show how open he is to the many options available to the Comelec for the 2016 elections,” Briones said.

Valte brushed aside the issue of Bautista not being an election lawyer as “unlikely to affect his competence as Comelec chief.”

“I understand there are some other ‘observations’ at the very least, but Chair Bautista is ready to face the CA.” The Palace deputy spokesman indicated that Malacañang’s vetting process is still ongoing in relation to the choice of President Aquino’s nominee to replace Bautista as PCGG chairman. Valte noted that the PCGG still has incumbent Commissioner Ronald Chua and Commissioner Richard Amurao to ensure that the work of the PCGG will continue “despite the departure of Chair Bautista.”

Other appointees, however, are expected to go through a needle’s eye. One is new Comelec Commissioner Rowena Guanzon, whom opposition lawmakers allege to have close ties with Secretary Manuel Roxas II of the Liberal Party.

Some anti-administration pundits expressed apprehensions

Technologies on automated elections discussed in forum

C

OMPANIES that participated in Commission on Elections (Comelec) biddings for automated poll system bared their respective technologies nearly a month after a court ruling may prompt the Philippines’s return to manual counting of returns.

Scytl-Secured Electronic Voting, Vibal Group Inc., IndraSistemas S.A. and e-Konek Pilipinas presented last week their firm’s products and services in a forum organized by Centrist groups. The forum was held two weeks after the Supreme Court on April 21 ruled null-and-void the P240-million contract between the Comelec and Smartmatic-Total Information Management Corp. (Smartmatic-TIM) for the repair of 82,000 poll machines.

Venezuelan company Smartmatic-TIM was not invited in the event, according to Citizens for Clean and Credible Elections coconvenor Alain Pascua. Pascua’s group was a coconvenor of the forum where former Comelec Commissioner Gus Lagman presented his Transparent and Credible Election System (TCres).

While several suppliers were unable to attend, three options were still showcased in the forum.

Lagman claimed the strengths of his TCres is in semi-automation, citing that the voting need not be fully automated as the focus of automation should be in the transmission of the votes.

He also noted how all election equipment used can be donated to the local schools after the polls, including laptops, projectors and printers. He also suggested an increase in teacher’s allowances would be better instead of using funds to buy or lease expensive voting machines.

Spain-based Indra Sistemas S.A. was the lone supplier present, and explained how a supplier should be aware of how elections are conducted in a particular country in order to find a suitable technology to fit the needs.

During the gathering, Indray presented its Central Count Optical Scan (CCOS) System as one possible alternative for 2016.

“The CCOS system using OMR [Optical Mark Reader] technology is one of the most promising alternatives we could offer in terms of the needs and criteria set by the Comelec,” said Rain See, Indra representative, said.

She highlighted transparency as one key advantage in their CCOS system, where canvassing areas would have multiple screens in every section of the counting process, and party representatives and the media would have freedom to observe the proceedings, and be able to contest ballots with questionable markings.

“We have successfully implemented a similar system in London and Norway, and we are proud of the speed, accuracy and transparency of our system,” See added.

Last, Cebu-based Vir Gaerlan also presented his own alternative dubbed the “Fast Manual Voting System,” highlighting that it needs no electricity, and has the benefits of the transparency of manual voting albeit at a faster speed. Joel R. San Juan

Guanzon will be a “stooge” of the ruling LP, which is eyeing to field Roxas as its presidential bet in 2016.

Also likely to undergo closer scrutiny at the Commission on Appointments (CA) is another new Comelec commissioner, Sheriff Abbas. Abbas is reportedly the nephew of Moro Islamic Liberation Front chief negotiator Mohagher Iqbal.

He is expected to sweat out at the CA following reports the MILF is set to register as a political party that will field candidates in next year’s national and local elections.

Valte said the family ties between Abbas and Iqbal was no secret to the Palace “because the vetting of the search committee is quite extensive

and, of course, in the course of that, it was made known to us.”

“Obviously, what some people are trying to imply is that it [Abbas’s appointment to Comelec] was influenced by the MILF, which it was not, because you can see also that Commissioner Abbas was already in the government, in the Civil Service Com-

mission, prior to his appointment, and most of his professional life has been spent in the government.”

Valte announced that Mr. Aquino had also appointed Sarah Jane T. Fernandez as Sandiganbayan associate justice to fill up a vacant post created “upon the departure of former Sandiganbayan Justice Gregory Ong.”

Economy

A4 Monday, May 11, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

news@businessmirror.com.ph

Businessmen, House leaders meet today on reforms Uber-type transport services set to get authority to operate

T

By Lorenz S. Marasigan

RANSPORTATION services that bank on mobile applications to acquire customers will soon be legalized in the Philippines, as the government moves to modernize the sector a few months before President Aquino bows out from office in 2016, the Department of Transportation and Communications (DOTC) announced.

Transportation Secretary Joseph Emilio A. Abaya said his office will publish later this week new categories of public-transport conveyances to allow application-based services to operate in the country.

“We view technological innovation as a driver for progress, especially in transportation, where it can provide safer and more convenient commuting options to the public.

App-based transport services help address the increasing demand for mobility spurred by rapid urbanization,” he said.

The transport chief explained that the new classification—tagged as the Transportation Network Vehicle Service (TNVS)—will allow app-based services offered by transportation network companies (TNCs) to exist within our regulatory framework.

He also called for collaborative efforts between the transport agency, the Land

Transportation Franchising and Regulatory Board (LTFRB) and TNCs a few months ago in order to formulate updated classification policies.

Under the new classification, a TNC is defined as an organization that provides prearranged transportation services for compensation using an Internet-based technology application or a digital platform technology to connect passengers with drivers using their personal vehicles. They will provide the public with online-enabled transportation services known as a TNVS, which will connect drivers with ride-seekers through an app.

The DOTC is also imposing certain standards for vehicle eligibility, such as the requirement of global positioning system (GPS) tracking and navigation devices for convenient and safer services. Only sedans, Asian utility vehicles, sport-utility vehicles, vans, or other similar vehicles will be allowed. A maximum age limit of seven years will be enforced.

Operators will be required to obtain a Certificate of Public Convenience for every vehicle to ensure accountability. To promote passenger safety, drivers must be screened and accredited by the TNCs and registered with the LTFRB. “Many people appreciate the safe and convenient services offered by the TNVS category.

We want this to motivate other public utility vehicle operators to modernize, upgrade and innovate their services for the benefit of the public,” Abaya said.

A new classification is also being created for premium taxis, which, compared to regular taxis, will have the advantage of being equipped with GPS, of having online and smartphone booking capability, a seven-year age limit and cashless transactions through credit- or debit-card payments.

Abaya earlier announced that legitimizing colorum vehicles may be done by enrolling them in UberPool, the carpooling unit of online-enabled transportation-services provider Uber.

“What we’re looking at is UberPool, another system they are operating, which is currently done in just a few countries. If we ever launch this, this could be an avenue for colorum utility vehicles to come in and be legitimized,” Abaya said in an interview. “Hopefully, this is a channel for them to upgrade their service and be legitimized,” he added.

He said there is a need to legitimize illegal-vehicle operators due to the growing demand for transportation in some growth areas in Metro Manila.

“They are on the road, but they are also harassed by all sorts of monkeys. So it’s my obligation to legitimize them,” Abaya said.

T

By Jovee Marie N. dela Cruz

he chairman of the House Committee on Ways and Means on Sunday said the Joint Foreign Chambers (JFC) and Philippine business groups are asking the lower chamber to prioritize the passage of several economic bills in the remaining months of the Aquino administration.

House Committee on Ways and Means Chairman and Liberal Party Rep. Romero S. Quimbo of Marikina, who is set to meet the JFC and local chambers on Monday, said busines groups have been pushing— since the15th Congress in 2010—for the passage of several economic bills.

“I am meeting them, in fact, tomorrow [Monday],” said Quimbo, adding, “They’ve always been pushing from the first day of the 15th Congress for economic measures, as well as transparency ones.”

According to Quimbo, the JFC and the Philippine business groups are pushing for the passage of the proposed amendments to Customs Modernization and Tariff Act (CMTA), proposed amendments to the cabotage law, as well as the new version of fiscal incentives rationalization bill and measure lowering income and corporate taxes.

The CMTA, which had been approved last November by the House Committee on Ways and Means, is now ready for the plenary debate this month, while the House has recently approved on second reading the proposed amendments to the cabotage law seeking to liberalize the entry of foreign vessels between ports in the country.

On the other hand, the fiscal incentives rationalization bill and the measure lowering income and corporate taxes are currently under committee deliberations and are set to be passed in December.

Quimbo also said the business groups are backing the passage of Resolution of Both Houses (RBH) 1, or the economic Charter change of Speaker Feliciano Belmonte Jr. The RBH 1, filed by Belmonte and Sen. Ralph Recto, is eyeing to amend economic provisions on the 60-40 rule that limits foreign ownership of certain activities in the Philippines.

The resolution, currently under plenary deliberations, will include the phrase “unless provided by law” in the foreign-ownership provision of the Constitution, particularly land ownership, public utilities, natural resources, media and advertising industries.

Under Article XII of the Constitution, foreign investors are prohibited to own more than 40 percent of real properties and businesses, while they are totally restricted to exploit natural resources and own any company in the media industry.

Quimbo said the leadership of the House is regularly conducting meetings with foreign and local business groups for consultative discussions on economic bills.

“Speaker Belmonte and all concerned [House committee] chairmen regularly meet them [to discuss] priority measures,” the lawmaker said.

The JFC is comprised of the American, Australian-New Zealand, Canadian, European, Japanese and Korean Chambers of Commerce in the Philippines, as well as Philippine Association of Multinational Companies Regional Headquarters Inc. The Philippine business groups they are meeting include the Export Development Council; Foundation of Economic Freedom; IT and Business Process Association of the Philippines; Management Association of the Philippines, Makati Business Club (MBC); Philippine Chamber of Commerce and Industry (PCCI); Philippine Exporters Confederation; Semiconductor and Electronics Industries in the Philippines; and Tax Management Association of the Philippines.

Economic bills

Earlier, Peter Perfecto, MBC executive director, indicated his group’s support for the constitutional amendments, particularly the economic provisions to attract foreign direct investments (FDI).

“Revising the restrictive economic provisions of the 1987 Constitution to enable the passage of specific laws easing restrictions on natural resources, agricultural lands, institutions and mass media,” he said.

Perfecto also said that the passage of Freedom of Information bill will address the corruption in the bureaucracy by making government transactions transparent to the public and holding public officials accountable for their actions.

Rhicke Jennings, AmCham president, urged Congress to pass the Customs Modernization and Tariff Act. He said the passage of CMTA will take into account the country’s international obligation to comply with the provisions of the Revised Kyoto Convention.

AmCham Senior Adviser John Forbes, meanwhile, asked Congress to amend the Foreign Investment Act, Retail Trade Act, Government Procurement law and Public Services Act.

quimbo

belmonte

Forbes also asked Congress to repeal Republic Act (RA) 3018, which restricts foreign participation in the country’s rice and corn trade.

PCCI’s Donald Dee said the passage of Philippine Fair Competition Act will prohibit anticompetitive agreements and abuses of dominant positions that distort, manipulate or constrict the operations of market in the Philippines in support of the growth of small and medium enterprises and in fulfilling the country's commitment under the Asean Economic Community Blueprint that calls for the implementation of national competition laws in all Asean member-states.

Also, Alfredo Yao, PCCI president, said Congress should consider the proposed Philippine Fair Competition law.

“There should be a level playing field for businesses to provide better services and products,” he said.

The proposed Philippine Fair Competition law is now under plenary deliberations. The bill heavily penalizes monopoly, anticompetitive mergers and other unfair trade practices.

For Julian Payne, president of the Canadian Chamber of Commerce of the Philippines, removing the Department of Justice, Office of the Ombudsman, Court of Appeals, Sandiganbayan and Supreme Court from the coverage of the Government Salary Standardization will make the salaries of prosecutors and members of the judiciary more competitive.

Payne added that the passage of a Whistleblowers Protection Act and a Witness Protection, Security and Benefits Act will provide effective legal protection and rewards system to whistle-blowers and state witness to embolden them to come forward and support the prosecution of corrupt public officials.

Meanwhile, on his part, Calixto Chikiamco, president of Foundation of Economic Freedom, supported the proposal that creates the Bangsamoro region.

“The Bangsamoro basic law that will be submitted by the Bangsamoro Transition Commission should be swiftly passed in order to complete the comprehensive peace agreement on the Bangsamoro and to pave the way for peace prosperity in the region,” he said.

Forbes also called for the removal of investment restrictions.

“Investment restrictions in specific laws cited in the FINL [Foreign Investment Negative List] should be removed,” Forbes said.

He also said that the Foreign Investment Act and the Retail Trade law should be amended.

Michael Raeuber, president of the European Chamber of Commerce of the Philippines, said the cost of domestic maritime transportation will be lowered through the cabotage law amendment.

To suppor t i nf ra st r uc t u re de ve lopment, Raeuber said the build-operate-transfer law needs to be amended.

He also said RA 8947, or “An Act to Facilitate the Acquisition of Right of Way, Site or Location for National Government Projects and for Other Purposes,” should be amended, while a Department of Information and Communications Technology should be created.

Belmonte has said the priority list of legislative measures drawn up by the business groups and the House of Representatives are almost the same.

“I do not think that we are here to argue or preach to one another, but to map out directions and strengthen our collaboration for the passage of legislations that would uplift the lives of the people,” he said.

“We want to encourage them to invest more in our country. We have seen the major vehicle of their growth was their big FDI. So we make it a point to have a dialogue with them so we know what they want,” Belmonte said.

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Groups condemn ‘harassment’ against Aklan resort owner

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cloud of fear has enveloped the business community in an emerging tourism town in Aklan, after the local government there reportedly padlocked a resort owned by a leader of the local chamber of commerce without due process.

Businessman Ariel Abram has asked the Regional Trial Court (RTC) in Kalibo to order Mayor Quezon F. Labindao of Buruanga, Aklan, to cease and desist from further implementing the notice of permanent closure he issued versus Ariel’s Point, a resort in the area that has caught the fancy of international tourists and has been featured in several online sites.

Ariel’s Point, acquired by the Abriam family in 2009 and has been granted permits and licenses by the office of Labindao and the national government since then up to 2014, is a subject of a permanent closure order issued by the mayor on March 3, 2015 that was enforced immediately.

Abriam, through his counsel Marienne M. Ibadlit, in response, filed a petition for certiorari, prohibition and mandamus with urgent application for temporary restraining order (TRO), and/or writ of preliminary prohibition/mandatory injunction.

In his petition, Abriam said he became a subject of harassment by the municipal government since June 2014 up to the time when Ariel’s Point Resort was padlocked by Labindao’s men.

Abriam revealed that, in one occasion during a hearing set by the municipal government on the alleged violations of Ariel’s Point Resort, Labindao disclosed his desire to have the property acquired by Oceanpark, which already has a facility nearby. “He explained that it would be more beneficial to the Municipality of Buruanga if the property is sold to Oceanpark as it is a bigger investor.”

He said the municipal government only concocted grounds to shut down the resort, and that the closure order was issued without due process.

Abriam, thus, asked the court to issue a 72-hour ex-parte TRO; upon summary hearing extend the TRO for another 20 days, and subsequently injunction orders to permanently stop the implementation of the mayor’s order to padlock the resort.

Aside from declaring the notice of closure as null and void, Abriam also wants the judge to order Labindao and his fellow respondents to pay P4.7 million in indemnity, damages and litigation fees.

Monday, May 11, 2015 A5

Filipino franchisers told to look at Asean markets for expansion

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S the country holds the Franchise Asia Philippines 2015 next month, local franchisers are urged to set their sights on other Asean markets that present very good expansion opportunities.

Samie Lim, acknowledged as the “Father of Philippine Franchising” and chairman emeritus of the Philippine Franchise Association (PFA), said Myanmar, Vietnam and Cambodia are the new frontiers that Filipino franchisers should tap in expanding their market reach. “Myanmar, Vietnam and Cambodia, these are virgin markets for us. So I’ll tell our people to stop looking at New York or other distant markets,” Lim stressed.

Lim is one of the PFA stalwarts, who thought of organizing the annual Franchise Asia Philippines.

This year the event will have four components: the Certified Franchise Executive (CFE) Program on June 8 and 9; the International Franchise Conference on June 10 and 11; the three-day International Franchise Expo from June 12 to 14; and the Educational Seminars simultaneous with the Expo from June 12 to 14. PFA, the country’s pioneer and largest franchise association, is holding the show in cooperation with BPI Family Ka-Negosyo Franchising Loan, PLDT SME Nation, Sun, Smart and ePLDT. Lim said only a handful of American brands are in Myanmar right now because of the trade sanctions. In the next five years, however, when more Americans come in, there will be no more room for Philippine franchise brands there.

Currently, Lim said Thai firms are invading Myanmar, “But these are not as good as ours.”

LIM: “Myanmar, Vietnam and Cambodia, these are virgin markets for us. So I’ll tell our people to stop looking at New York or other distant markets.”

Myanmar, which has a population of about 60 million, is being regarded by Thai companies as a province of Thailand.

Those that are going there are provincial brands of Thailand, which cannot penetrate Bangkok. It is easier for them to cross the border to Myanmar, Lim said.

“Our brands, whether food or fashion, will be the high-end brands there. But there is no intellectual-property law as of now, that is the caveat. The key is to have a partner, who can protect you and not take advantage of you and not use you,” he explained.

Lim added he is also excited about the franchising prospects in Vietnam so he

is going there in a few weeks.

He noted that it’s a good thing that the government, through the Department of Trade and Industry and the Center of International Trade Exposition and Mission (Citem), is now supporting the PFA in its campaign to “export” Filipino brands through participation in franchise shows in different countries.

“We had pavilions in Indonesia and Dubai…we will do that more often. In Indonesia we brought 10 brands. Citem shouldered the pavilion and promotion.

We used our connections there and they [Indonesians] supplied the models. There was a fashion show of Philippine clothes with Indonesian models,” he narrated.

For the Franchise Asia Philippines 2015, Lim said the conference component will be another must-attend event for franchisers and those who want to expand their business via franchising.

Among the topics to be discussed in the super sessions are Opportunities and Challenges in an Integrated Global Economy; The CFO Forum: Managing Growth; The CMO Forum: Marketing Strategies for Different Generations; The CEO Forum: Failure is not an Option amidst Globalization; Retail 2025—Reconfigure for Success; Emergence of a New Franchise Leader in a Chaotic World; and the Future of Digital Marketing and its Impact to Business, among others.

Concurrent Breakout sessions will also be conducted by industry experts in the following topics: Traits of a Successful Leader; Inspiration and Insights from Successful Franchisees; How to Stay Relevant Amidst

Changing Consumer Behavior; People Recruitment and Retention; Think Big: Creative Social Media Campaigns; Overcoming Tax Issues in Franchising; Latest Trends and Innovation in Store Design Efficiency and Creating Loyal Customers.

The expo is expected to attract more than 40,000 visitors and would-be franchisees, who can explore unlimited business opportunities from homegrown and international exhibitors coming from the food, retail and service sectors.

The event is supported by 7-Eleven, Megaworld Intl., The Generics Pharmacy and Seaoil Phils. (Platinum); Coca-Cola & Qualiplus (Gold); Max’s Group, Goldilocks, Meralco BIZ Partners, All Day, Mister Donut, Farmacia Ni Dok, Francorp Philippines and Pepsi Cola (Silver); Potato Corner, PR Gaz, Mini Stop, Jollibee, Wendy’s, HBC, Bibingkinitan, Philippine Business Bank, K2 Drug, Crystal Clear and Blooming Ventures Inc. (Bronze). The Mall partners include Araneta Center, Ayala Malls (Glorietta, Market!

Market! TriNoma), Robinsons Malls, Walter Mart, SM Supermalls and Star Mall.

Event partners AM Cleofe Prints, Corporate Pisanti, Commerce Asia Inc, Chase Technologies Corp., Globaltronics Inc., Jimac Inc. & Sportshouse. Donor-sponsors are Bench, Duty Free Phils., Giordano, Kambal Pandesal, Oryspa and St. Francis GenericDrug. Partner Organizations: Department of Trade and Industry, Federation of Filipino-Chinese Chamber of Commerce and Industry Inc., Go Negosyo; Philippine Chamber of Commerce and Industry and Philippine Retailers Association.

Tourism&E

BusinessM

A6 Monday, May 11, 2015 • Editor: Gerard Ramos

TEN THINGS YOU MAY NOT K O B B L

N the 73rd anniversary of the Fall of Corregidor, here are 10 facts that Filipinos may not know about the island fortress of Corregidor and its adjoining islands.

THE nearby Bataan peninsula as seen from Corregidor.

The cement for concrete used to line the 30-foot to 40-foot-thick walls of Malinta Tunnel (an 836-foot-long, fishbone-shaped system of bombproof tunnels with three 227-meterx8-meter main sections and 24 49-meterx4.5-meter laterals) was, ironically, Asada cement bought from the Japanese.

MILE Long Barracks—the longest in the world

GUAM POSITIONS ITSELF AS SPORTING DESTINATION FOR TOURISTS

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THLETES and sports enthusiasts can now look forward to a new destination to strut their skills in the world stage as Guam positions itself as a premier sporting destination. The Guam Visitors Bureau (GVB, www.facebook.com/visitguamusa), together with its partners United Airlines and KaiZen, recently announced its lineup of sporting events at a trade gathering at the Shangri-La Makati.

Attended by representatives for the country’s top schools and top-tier sports teams, the GVB shared what Guam has to offer to Filipino visitors. Going beyond its scenic beaches, breathtaking tourist spots and dutyfree shopping, GVB offered a fresh proposition for tourists to visit Guam with its all-year-round lineup of sports competitions.

A veteran in hosting international sporting events, Guam has played host to a handful of competitions that have proven to attract participants from all over the world. Out of Guam’s array of sports-related events, the annual Guam Ko’Ko’ Road Race Half Marathon and Ekiden Relay, which is slated for December 6, has been a favorite for runners as it allows them to enjoy Guam’s picturesque ocean and mountain views, while being cheered on by the local’s Hafa Adai spirit. In

last year’s event, the Philippines’s Team United Manila participated, bannered by Shavonne Martin and Kirby Martin for the Ekiden Relay, and Rovilson Fernandez for the HalfMarathon event.

Apart from running events in Guam, it also plays host to other sporting events in the fields of swimming, badminton, table tennis, tennis and cycling. GVB announced the following competitions for 2015: Cocos Crossing (May 24); King’s and Delta Guam Futures Tennis Tournament (May 25 to 31); Guam Women’s Baseball (August 11 to 16); Guam National Bodybuilding and Fitness Championships and International Invitational (October); Tour of Guam Cycling (November); 22nd Junko Friendship Rubber Baseball Tournament (December 5 and 6); and the Guam Ko’Ko’ Kids Fun Run (December 6).

Guam’s extensive lineup of sporting events highlights the country’s world-class sporting facilities that are utilized by sports teams globally for competitions and skills development.

Also, for the first time on the island’s football history, Guam will play host to Fédération Internationale de Football Association (Fifa) World Cup matches this summer, featuring Turkmenistan and India.

The matches are part of the 2018 Fifa World Cup qualifiers that will be

held in Guam on June 11 and 16.

Guam was part of Asia’s top 34-ranked countries in January 2015 and did not need to play in a prequalification playoff. The national team automatically qualified for the second round of qualifiers— a first in Guam’s football history.

“It will take the support of the entire community in Guam and supporters abroad for the team to be successful in Round 2 of 2018 Fifa World Cup qualifiers. For the first time, Guam qualified automatically for Round 2 of the World Cup qualifiers and the team is at a level that can fully compete with the countries in the group.

I am proud of the work of the entire GFA organization, including all players past and present who have helped Guam achieve what is has to date,” Guam Football Association president Richard K. Lai said.

The schedule for the 2018 Fifa World Cup qualifiers matches is as follows: Guam faces Turkmenistan on June 11, and India on June 16—both matches will kickoff at 4:15 pm at the Guam Football Association National Training Center. The matches will be open to the public, with ticket prices yet to be announced, and will be aired across Asia. The World Cup qualifiers also double as the 2019 AFC Asian Cup Qualifiers.

EXCLUSIVE STAYCATION DEAL AT NOBU HOTEL

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HIS summer, experience a luxurious staycation at the newly opened Nobu Hotel—and grab an exclusive deal when you pay with your Citi credit card (www.citibank.com.ph). Book an overnight stay with your family or friends and enjoy lower accommodation rates and dining privileges.

To avail yourself of of the offer, which is valid until June 15, simply book an overnight stay for two adults and one child using your Citi credit card at Nobu Hotel. Pay as low as P12,200 (originally priced at P17,185) for a delightful staycation package that includes breakfast buffet, complimentary Nobu’s signature Yuzu Pound Cake, plus get priority seating and P3,000 worth of food and beverage credit at the internationally acclaimed, trendy and upscale Nobu restaurant.

Nobu Hotel is one of the three hotels

BOOK an overnight stay at Nobu Hotel with your Citi credit card and enjoy lower accommodation rates and dining privileges. located at the City of Dreams Manila.

Founded by the award-winning Hollywood actor Robert De Niro and Japanese culinary genius Nobu Matsuhisa, the 321-

room trendsetting boutique Nobu Hotel delivers a thrilling, celebrity-inspired and “fun-luxury” experience informed by utmost quality for its guests.

Corregidor and Caballo islands are believed to be the exposed rim of a volcano that form parts of a potentially active (according to the Philippine Institute of Volcanology and Seismology) volcanic caldera. With a rim elevation of 173 meter (568 foot) and a base diameter of 4 kilometers (2.5 meter), it has no known erup-

Entertainment

Mirror

tourism@businessmirror.com.ph • Monday, May 11, 2015 A7

KNOW ABOUT CORREGIDOR tions in the Holocene Period (around 10,000 years ago), as its last eruption was about 1 million years ago, based on the age of deposits.

Malinta Tunnel was bored out of Malinta Hill using “forced labor” in the form of 1,000 convicts from the Old Bilibid Prison in Manila, most of whom were serving life sentences. The Philippine Commonwealth offered them as equity in the construction of the Malinta Tunnel Project.

The island’s name was either derived from the Spanish name for corrector (one who checks and corrects papers of incoming ships), or from the Spanish word corregidor (the man who heads the corregimiento, or unpacified military zone).

Though Corregidor is much nearer geographically (it is 3 nautical miles away with 30-minute travel time from Barangay Cabcaben) and, historically, to Mariveles (Bataan), it belongs to Cavite, being under the territorial jurisdiction and administrative management of Cavite City.

When you are on the island, you can see more of Bataan than Cavite City.

The 880-meter (1,520-foot)-long, three-story-high and hurricaneproof Mile Long Barracks, though less than a third of a mile long, is reputedly the world’s longest military barracks. It housed 8,000 men and was the headquarters of Gen. Douglas MacArthur.

The flagpole, where the American flag was lowered during the May 6, 1942, surrender to the Japanese and raised during the March 2, 1945, liberation, is actually a mast of a Spanish warship, Reina Cristina, which was captured by Adm.

George Dewey after the May 1, 1898, Battle of Manila Bay and put up in Corregidor. The American flag was lowered for the last time on October 12, 1947, and the Philippine flag hoisted in its stead.

Corregidor had “disappearing” gun batteries. These disappearing guns were mounted on a “disappearing carriage,” which enabled a gun to hide from direct fire and observation. Battery Crockett and Cheney each had two 12-inch “seacoast guns, while Battery Grubbs had two 10-inch guns.

Fort Drum, the “concrete battleship,” seven minutes southeast of Corregidor, must be unprecedented in the history of military fortifications. Located on the former small, rocky El Fraile Island, this heavily fortified 240-foot- long, 160-footwide and 40-foot-high citadel bristled with 11-inch guns (including two batteries with rotating turrets with two 14-inch guns). It was built from 1909 to 1919 by the US Army Corps of Engineers, who flattened the island and reconstructed it to resemble the forepart of a battleship, with one end flat and the other shaped like a prow.

Though Corregidor and the adjoining islands are bristled with 56 coastal guns and mortars in 23 seacoast batteries and 76 (28 3-inch and 48 50-caliber) anti-aircraft guns in 13 batteries, with artillery models dating back to 1890, only the eight 12-inch mortars of Battery Geary and the four 12-inch mortars of Way proved to be the best and most effective for the defense of Corregidor during the Japanese siege.

MALINTA Tunnel was built with convict labor and Japanese.

THE flagpole from the Spanish warship Reina Cristina

THE disappearing gun of Battery Crockett

TheElderly

A8 Monday, May 11, 2015 • Editor: Efleda P. Campos

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Magnesium a big hit among retired priests

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By Oliver Samson | Correspondent

ARY JEAN Netario-Cruz, the world’s magnesiumclinic pioneer, introduced the natural and safe curative power of the mineral to retired priests from dioceses across the country during a recent retreat in Tagaytay City.

Cruz, who pioneered the clinic in 2014 in Antipolo City, put in plain words how the deficiency in the mineral triggers the nerves to communicate pain and how magnesium addresses it, said Msgr. Sabino Vengco Jr., retreat master.

In attendance were 60 retired priests, including six bishops, who complained of joints and muscle pains common among aging priests, he said.

The priests complained of various pains, including leg cramps, frozen shoulder, migraine and headache, said Netario-Cruz, a certified well-being coach, who demonstrated to the clergy how they could do the therapy themselves or with the help of a house companion.

Netario-Cruz, a member of the American Association of Drugless

Practitioners, addresses arthritis, back pain, Charley horse, frozen shoulders, stiff neck and fingers, and even insomnia, with magnesium transdermally.

After the demonstration, the retreatants moved in haste to apply the mineral on the affected parts of their body, said Victoria BaterinaSolis, Kanlungan ni Maria-Home for the Aged (Kanlungan) special projects director.

“It was a big hit among the elderly priests, who have abundant stories to tell about painful joints and muscles,” Vengco said.

The typical diet poor in magnesium and a lifestyle that depletes it are responsible for pains, NetarioCruz said.

“Magnesium has the capacity to relive pain, since it relaxes the mus-

MARY JEAN Netario-Cruz, world pioneer of magnesium clinic and Kanlungan ni Maria—Home for the Aged well-being director, talks about the curative powers of magnesium to 60 retired priests and bishops at Angels’ Retreat House in Antipolo City. OLIVER SAMSON

cles and prevents muscle spasms and the jolting of nerves,” she said.

Excessive calcium in the body is also responsible for pain, she said.

“The main symptoms of magnesium deficiency and calcium excess are headache, fatigue, muscle pain and insomnia,” she said. Large calcium deposit can deplete magnesium in the body, she noted.

Free 100ml bottles of magnesium, which were sponsored by Magiteque Pain Therapy Centre, were given to the retreatants, said Fr. Dari D. Dioquino, priest in charge of Kanlungan.

The four-day assembly of retired priests at the Angels’ Retreat House was the 17th, said Vengco, the founding president of Kadiwa

tirement homes, like the Cardinal Sin Welcome Home in Sampaloc, Manila, and Villa San Rafael in Bonuan Gueset, Dagupan,” Vengco said.

The retreatants came from Metro Manila and as far as Ilocos Norte, Ilocos Sur, Cagayan, La Union, Pangasinan, Pampanga, Bulacan, Laguna, Quezon, Albay, Sorsogon, Camarines Norte, Samar and Iloilo.

Solon-brothers seek inquiry into nonimplementation of Expanded Senior Citizens Act

Bicol’s indigent elderly get P50-M more social pension fund

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By Danny O. Calleja Philippines News Agency

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EGAZPI CITY—Over 8,300 indigent senior citizens in Bicol are going to benefit from the nearly P50 million in newly released national government fund for their social pension, the Department of Social Welfare and Development (DSWD) said.

The amount is the region’s share from the total of P1.2 billion recently released by the Department of Budget and Management (DBM) to the DSWD for the 200,000 needy elderly in all the 16 administrative regions of the country in support of the Aquino administration’s goal to facilitate inclusive growth.

“As the country’s economy expands, Filipinos, young and old, should benefit directly from our reforms. This is exactly what inclusive growth is all about,” DSWD Regional Director Arnel Garcia on Friday here said.

The fund release is mandated under Republic Act (RA) 9994, or the Expanded Senior Citizens Act of 2010, which provides for the Social Pension of Indigent Senior Citizens, which means more elderly indigents can now receive additional government assistance in the form of a monthly stipend amounting to P500, he said.

The same Act also mandates the Philippine Health Insurance Corp. (PhilHealth) to automatically place under its coverage all the 2.16 million senior citizens across the country, who have yet to get the health insurance.

In announcing the fund release over the week, Budget Secretary Florencio B. Abad said, “We crafted the 2015 budget to prioritize the poor and the vulnerable, including indigent senior citizens. This release will allow us to address the basic needs of our elderly indigents, who do not, otherwise, have the resources to support themselves.”

Indigent senior citizens are defined under RA 9994 as “any

sa Pagkapari Foundation, an arm of the Catholic Bishops’ Conference of the Philippines’s Episcopal Commission on Clergy.

The foundation’s Ephesus Ministry has been “caring for Filipino diocesan elderly priests in their retirement and sickness,” he said.

“The priests variously live in their family residences and diocesan re-

PASSING ON A VINTAGE LIVELIHOOD

Josefa Rampacan, 86, uses clay in molding pots in their family shop in San Nicholas, Laoag City, Ilocos Norte.

Josefa has taught hundreds of young people, including her children and grandchildren, the art of clay pot and brick-making, a traditional craft and the One Town, One Product livelihood in their area. MAU VICTA

elderly who is frail, sickly or with disability and without pension or permanent source of income, compensation or financial assistance from his/her relatives to support his/her basic needs, as determined by the DSWD in consultation with the National Coordinating and Monitoring Board.”

The P1.2-billion release—which will benefit a total of 200,000 elderly indigents aged 65 and above—was charged against the 2015 General Appropriations Act , under the DSWD’s P5.96-billion budget for Social Pension for Indigent Senior Citizens.

Through this fund, the administration could support this year a total of 200,000 indigent senior citizens living anywhere within the country’s 16 regions, with Bicol having 8,329—the third lowest in number, following Central Mindanao (Region 12), the lowest with 7,756, and the Southern Tagalog (Region 4A) with 8,309.

The P1.2-billion fund is divided among regions, according to the

number of beneficiaries as follows: National Capital Region, P106.004 million, 17,674 beneficiaries; the Ilocos region, P51.522 million, 8,587; Cagayan Valley, P68.898 million, 11,483; Cordillera Autonomous Region, P82.914 million, 13,819; Central Luzon, P74.934 million, 12,489; Calabarzon, P49.854 million; Mimaropa, P63.372 million, 10,562; Western Visayas, P54.516 million, 9,086; Central Visayas, P50.322 million, 8,387; Eastern Visayas, P78.132 million, 13,022; Zamboanga Peninsula, P70.950 million, 11,825; Northern Mindanao, P59.748 million, 9,958; Davao region, P143.16 million, 23,860; Soccsksargen, P46.536 million; and Caraga, P149.124 million, 24,854.

The beneficiaries were preidentified through the Listahanan, or the National Household Targeting System for Poverty Reduction, an information-management system that determines who and where the poor are and made available to government agencies and other social- protection stake-

holders, as a basis in identifying potential targets of social-protection programs and services.

In Bicol the 2011 Listahanan, which was validated in the last quarter of 2014 through the Proxy Means Test (PMT), identified a total of 10,643 social pensioners 70 years old and above, who have been receiving the P500 monthly stipend since 2009.

The validation was done following reports on discrepancies involving the program, where some beneficiaries were either unqualified or nonexisting.

Garcia said the current listing of beneficiaries is now reliable, following the PMT, as it assures that only those who are qualified and deserving are getting the pension under RA 9994, which is an expanded version of the past program that qualified only those who were 70 years old and above.

Under this new fund, 65 years old and above are covered, which means more senior citizens are getting the benefits, he explained.

EP. Rufus B. Rodriguez of Cagayan de Oro City and his brother, Partylist Rep. Maximo Rodriguez Jr. of Abamin, want business establishments that do not extend the full 20-percent discount to senior citizens be punished.

The reported noncompliance by some business establishments to extend the full 20-percent discount to senior citizens under the Expanded Senior Citizens’ Act should be castigated, the duo said.

The Rodriguez brothers filed House Resolution 1892, in light of reports that some restaurants were not extending the full 20-percent discount to senior citizens and, instead, give a f lat-rate discount for deliveries and takeouts, while others refuse to give the discount if the senior citizen was a privilege cardholder.

On top of these unfair practices is the strict policy by some establishments of not granting the 20-percent discount if the customer cannot produce his or her senior citizen’s identification cards, although he or she has other IDs or documents stating his or her date of birth, the lawmakers said.

The older Rodriguez said there were many other reported incidents when establishments tried to come up with so-called policies just to evade the mandated benefits for senior citizens provided under Republic Act (RA 9994), otherwise known as the Expanded Senior Citizens’ Act. “The Department of Trade and Industry [DTI] has already come up with an opinion that the 20-percent discount to senior citizens is over and above the discount offered by an establishment for its membership or privilege cards,” Rodriguez, a lawyer, said.

The DTI said that, while double discounts were not allowed when an establishment offered a promotion, the selling of privilege card for valuable consideration was or was not for the intention of promoting the establishment,

Rodriguez said.

“We call on the House Committee on Trade and Industry to look into this matter to determine if new legislation is needed to ensure the effective and consistent implementation of RA 9994,” he said.

The elder Rodriguez, chairman of the Ad Hoc Committee on the Bangsamoro basic law, said that among the objectives of RA 9994 is to recognize the rights of senior citizens to take their proper places in society and make it a concern of the family, community and the government, and to give full support for the improvement of the total well-being of the elderly and their full participation in society, considering that they are an integral part of society.

Signed into law on February 15, 2010, by former President Gloria Macapagal-A rroyo, R A 9994 lists down the privileges that senior citizens shall be entitled to, which include a 20-percent discount in restaurants, hotels, and medical and dental services, among others.

Section 4 of RA 9994, pertaining to privileges for the senior citizens, provides that the elderly shall be entitled to the following, among others, the grant of a 20-percent discount and exemption from the value–added tax, if applicable, on the sale of certain goods and services from all establishments, for the exclusive use and enjoyment or availment of the senior citizen; Exemption from the payment of individual income taxes of senior citizens, who are considered to be minimum-wage earners; the grant of a minimum of 5-percent discount relative to the monthly utilization of water and electricity supplied by the public utilities; and Exemption from training fees for socioeconomic programs; and free medical and dental services, diagnostic and laboratory fees, such as, but not limited to, x-rays, computerized tomography scans and blood tests, in all government facilities. PNA

news@businessmirror.com.ph | Editor: Dionisio L. Pelayo

The Regions BusinessMirror

Monday, May 11, 2015

A9

DOE wants privatization of 200-MW Mindanao coal plant pushed to 2016

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GUIMARAS MANGOES The island province is known for its sweet mangoes, some of which are arranged to look like a chandelier in a local stall. Among the most anticipated events in Guimaras is the annual Mango Eat-All-You-Can which will be held this year from May 11 to 22. The event will begin each day from 9 to 11 a.m., resuming at 2 to 4:30 p.m. Each participant pays a registration fee of P70 and is served at least a kilo of local mangoes to finish in 30 minutes with their bare hands. The daily winner of eating the most number of mangoes within the allotted time joins other daily winners for the finale on May 22.

EDC to expand Burgos solar power to 150 MW B L L

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OPEZ-LED Energy Development Corp. (EDC) is going to expand its solar-power project in Burgos so it could generate as much as 150 megawatts (MW) of solar-power capacity.

“As a company, we are looking at 100 MW to 150 MW in three to five years from 4 MW. One-hundred fifty MW is an aspiration,” EDC Vice President for Corporate Finance Erwin Avante said.

EDC’s 4.1-MW Burgos solar project in Barangay Saoit in Burgos, Ilocos Norte, consists of 13,500 photovoltaic solar panels and 70 inverters. It sits on a 5.5- hectare site.

To push through with its expansion plans, EDC needs to spend at least $584 million based on a rule of thumb that 1 MW of solar power is equivalent to an investment of $2 million.

The Burgos solar project was constructed in October 2014. The Department of Energy granted the project the Certificate of Endorsement for Feed-in Tariff eligibility, stating March 2, 2015, as its successful commissioning date. The solar project will generate around 5.7 gigawatt hours annually and will feed energy directly into the local utility, Ilocos Norte Electric Cooperative (Inec).

“We believe that we can expand this portfolio rapidly in the coming years,” Avante added.

EDC will build P17.5-million dedicated point-to-point facilities to connect the power facility to the transmission system of Inec.

EDC is also the owner of the 150-MW Burgos wind project in Ilocos Norte. EDC won the rights to build two wind projects in Iloilo and plans to build more wind projects in Negros Occidental.

Jr. NBA/Jr. WNBA Philippines 2015 reaches out to local communities

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ITH the Philippines being a basketball-crazy country, the Jr. NBA/Jr. WNBA Philippines program presented by Alaska has brought NBA basketball to various key cities for the past eight years and brightened up the lives of young people, their parents, schools and local coaches.

The program, which just completed its eighth year in April, has been conducting NBA Cares activities in different barangays in various parts of the country since its introduction here in 2007. Since then, it has reached over 500 schools and communities and 80,000 students, parents and coaches across the country.

NBA Cares is the global basketball league’s social responsibility program that builds on the NBA’s long tradition of addressing important social issues in the US and around the world. NBA Cares activities run alongside the NBA’s global youth development program that promotes basketball participation and an active lifestyle among children. Participants are trained in the fundamentals of basketball and learn the importance of the Jr. NBA/Jr. WNBA core values of sportsmanship, teamwork, a positive attitude, and respect (STAR).

Absolutely free at all stages, the program starts with school and coaches’ clinics followed by regional selection camps that choose the best players aged 10 to 14 in various regions. The regions’ best players then compete in the National Training Camp where finalists vie for the honor of being named Jr. NBA and Jr. WNBA All-Stars. The program ends yearly with the NBA Experience, where the All-Stars are sent abroad to watch an NBA game live and play with counterpart Jr. NBA/Jr. WNBA teams from other

countries—all for free.

Over the past eight years, the Jr. NBA has gone from Metro Manila to Cebu City, Davao City, Bacolod City, Biñan, Laguna; Puerto Princesa, Cagayan de Oro, Pampanga, Iloilo, Lucena City, Surigao del Sur, and Baguio City. New cities are added each year.

As the kids learn basketball in the key cities visited by the program, communities also benefit through NBA Cares activities that have been conducted through the program’s eight consecutive stagings.

In 2009 the Jr. NBA repainted a damaged basketball court in Marikina City ravaged by the floodwaters of Typhoon Ondoy. NBA legends like BJ Armstrong of the Chicago Bulls, former LA Laker AC Green, Muggsy Bogues—the NBA’s most diminutive player at 5'3" conducted basketball clinics for children in youth centers, Special Olympics athletes and street children. Luc Longley, the 7'2" tall former Chicago Bull, visited Cagayan de Oro evacuees affected by Typhoon Pablo in 2012, conducted clinics and donated goodies to the families there.

Jr. NBA regional finalists from Dagupan helped clean up the Calmay River—a major fishing ground in Dagupan—of clogging water hyacinths in 2013 after the river experienced serious flooding which destroyed not just homes but also the fishing livelihood of the surrounding communities.

Another set of Jr. NBA regional finalists from Davao planted trees at the Malagos Watershed in Calinan, Davao City, alongside NBA and Phoneix Petroleum officials to help preserve Davao’s source of clean, potable water. Davao City ranks third in the world for the city with the cleanest water supply.

NGP targets 300 hectares in Soccsksargen

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HE government seeks to reforest some 300 hectares of degraded forest in Soccsksargen, in support of the Sajahatra Bangsamoro Program (SBP). A basic services program for Moro Islamic Liberation Front (MILF) communities, the program is part of the Framework Agreement on the Bangsamoro (FAB) being pursued by the Aquino administration as part of its peace-building efforts in the region known as Soccsksargen which covers South Cotabato, Cotabato, Sultan Kudarat, Sarangani and General Santos City.

The government has allotted P7 million for the massive reforestation activities in the barangays of Buliok in Pagalungan and Sambolawan in Sultan Kudarat municipality, and in Sitio B’lungan, Upper Sepaka in Surallah, South Cotabato under the program. The areas will be planted with coffee, fruit trees and forest trees. The regional office of the Department of Environment and Natural Resources (DENR) in Koronadal City has earlier forged a memorandum of agreement with the SBP on March 24, two months after the FAB was formalized by President Aquino and the MILF leadership.The signatories were DENR Region 12 Director Datu Tungko M. Saikol and Sajahatra Bangsamoro Project Management team leader Dr. Taugan S. Kikay. The tree-planting activities will be implemented until December 2017.

The financial support for Soccsksargen covers activities that include seedling production, plantation establishment, monitoring, maintenance and protection of the National Greening Program areas. People’s organizations in the area will be tapped to help implement the project, Saikol said. The partnership is a long-awaited program for the Bangsamoro communities, Saikol said. “NGP has made great contributions for our environment but we are still seeing idle mountains.

“Our objective is to implement the program of President Aquino while pursuing the improvement of the lives of the MILF communities and this complements the livelihood component of the Sajahatra Bangsamoro,” Kikay said in a statement. DENR Assistant Regional Director for Technical Services Hadja Didaw D. Piang-Brahim said the DENR will provide financial and technical assistance to ensure the successful implementation of the project. The head of the SBPSocio Economic Component Director Hadzer M. Birowa said the program will help bridge the gap between the government and MILF.

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NERGY Secretary Carlos Jericho L. Petilla wants to push back the privatization of the supply contracts for the output of the 200-megawatt (MW) Mindanao coal-fired plant to next year from September this year.

The power plant supplies about a fifth of Mindanao’s power requirements. Petilla is concerned that an early auction could result in powerrate hikes. He said electric cooperatives would be forced to source power from the winning bidder which, in turn, could dictate prices due to lack of competition.

“I want to ask PSALM [Power Sector Assets and Liabilities Management Corp.] to delay the privatization until such time that the power plants of Aboitiz, Alsons or San Miguel have been put up,” Petilla said. The energy chief said a better scenario would be to privatize the contracted capacity of the STeag coal-fired power plant in Misamis Oriental sometime within the first half of 2016 when the new power

plants of the power- generation companies are expected to come online.

“It’s better to hold off the privatization so that the consumers won’t be burdened only until such time when at least two power plants are up and running which is actually very soon, maybe in the first half of 2016,” Petilla said. Therma South Inc. (TSI), a unit of Aboitiz Power, is building two by 300-MW coal-power plant in Davao.

San Miguel Corp. Davao is also putting up a 600-MW power facility.

Alson’s Sarangani Energy Corp.

(SEC) is on track to begin commercial operations in the fourth quarter of 2015 for the first 105-MW section of its 210-MW coal-fired power plant at Maasim, Sarangani. The plant will begin commissioning within the first

half of 2016. Alsons Power is also developing the 105-MW San Ramon Power Inc. coal-fired power plant in Zamboanga City. SMC and TSI are among the 12 prospective bidders eyeing to bag the supply contracts for the output of the Mindanao coalfired plant. Other interested bidders include Conal Holdings Corp., FDC Davao del Norte Power Corp., FirstGen Northern Power Corp., GDF Suez Energy Philippines Inc., Masinloc Power Partners Co. Ltd., Meralco Powergen Corp., Nexif Pte. Ltd., SPC Power Corp., Team (Philippines) Energy Corp. and Vivant Energy Corp.

These 12 interested bidders are eyeing the selection and appointment of the independent power producer administrator for the Mindanao coal-fired thermal power plant.

PSALM has set the bidding schedule on September 23, 2015. Located in Misamis Oriental, the Mindanao coal plant was constructed in 2006 under a 25-year build-operatetransfer—Power Purchase Agreement scheme with the government.

The power facility is made up of two units with a generating capacity of 105 MW each. It is currently being operated by Steag State Power Inc. of Germany. The cooperation period with the operator officially ends in 2031.

A10 Monday, May 11, 2015

Opinion BusinessMirror

editorial

Why we should want free trade

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HY is that for the most part it is the liberals and the political left that are most against free trade? While we believe that the US initiative, the Trans-Pacific Partnership (TPP), may not offer the best playing field for the Philippines, we strongly support free and fair trade agreements.

Former Akbayan Party-list Rep. Walden Bello, reacting to the launch of the world’s biggest free trade area comprising China and the Association of Southeast Asian Nations (Asean), said: “We have warned against the detrimental effects of free trade agreements with strong economic powers like China, Japan, the US and Europe. Unfortunately, all our fears have come true.” The words of Bello, the author of 15 books, should probably be taken into consideration.

Except Bello made that statement in 2010.

Bilateral trade with China has been growing, registering about a 20-percent increase in 2014 in spite of tensions between the two countries. The “Bellos” of the country point to the fact that the Philippines has almost a $2-billion trade deficit with China. However, almost all of that deficit can be attributed to our importing Chinese electronic products valued at $1.6 billion.

Here is a suggestion to help mitigate the trade deficit with China. Stop texting about it on your Chinese-made cell phone or Apple computer product.

There are also those that believe that the oligarchs, the large companies that have a “too-large” a share of Philippine business, do not want the competition from free trade. If that is true—and we are not saying it is—then both the Left and the oligarchs have the same goal of wanting the people to be dependent on either “big business” or the government for their economic prosperity.

Without free trade between nations, we face the condition of autarky where an economy depends on consuming only what it produces and producing only what it consumes. That generally works badly as North Korea is the best example of autarky.

People and nations depend on each other through trade for their economic well-being. Try raising your own chickens if you doubt that truth. The division of labor among people and among nations is the essence of civilization.

Trade is the ultimate example of cooperation between nations. Otto T. Mallery, a late 19th-century economist in his 1943 book Economic Union and Enduring Peace, states, “If soldiers are not to cross international boundaries, goods must do so. Unless the Shackles can be dropped from trade, bombs will be dropped from the sky.”

The idea that for every “poor” Filipino working in a call center, an American loses a job is nonsense. Because Filipinos can provide a most cost-effective service to Americans, then America saves money to be utilized creating jobs at what they are good at and can sell their products to Filipinos.

The Left also says that with free trade, jobs will always go to the bottom of the economic food chain, limiting countries slightly higher up like the Philippine from getting richer. If that’s true, why are Mercedes still made in Germany and not in Haiti?

The choice comes down to “trade wars” or “free trade.” There are never any winners from a war.

PCSO opens branch in Ilocos Sur Atty. Jose Ferdinand M. Rojas II

RISING SUN

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S part of a long-term strategy that it set after the start of the Aquino administration, the Philippine Charity Sweepstakes Office (PCSO) opens a branch office today in Ilocos Sur.

This is in line with the agency’s efforts to extend the reach of the PCSO’s services all around the country. The new office, located in the Municipal Hall of Candon, has a manpower complement of two at the moment—Mary Jane Claridad, as acting head; and Remelyn Cuaresma, as social worker. Together, these two ladies will bring PCSO services to the public, from processing of lot to outlet applications to evaluation of requests for medical assistance.

The branch office had a soft opening in April, while the ceremony today is the official opening that formally marks the establishment of this branch that will serve the residents of the province of Ilocos Sur and surrounding areas.

The next branch to be opened will be in Ozamiz City, Misamis

Occidental, sometime next month.

When that happens, the PCSO’s network of branches will extend to 45, an increase of 20 branches from the initial 25 in the second semester of 2010.

The PCSO started opening additional branches in 2012, toward the goal of opening an office in every province. nnn

THIS weekend, members of the PCSO Board of Directors, including myself, will travel to the province of Albay to celebrate the agency’s 80th anniversary with the personnel of the branches under the Southern Tagalog and Bicol region department.

There are now 13 PCSO branches in the region: Batangas, headed by Leticia Renomeron; Cavit, under Paloma Malinao; Laguna, Flora Obi-

na; Palawan, Rolando Batislaong Jr.; Quezon, Lady Elaine Gatdula; Rizal, Maria Cecilia Cruz; Oriental Mindoro, Augusto Tordillos; Marinduque, Albay, Laila Galang; Sorsogon, Doris Olondriz; Camarines Sur, Nelly Loyola; Camarines Norte, Estrella Abasolo; and Ilocos Sur. While there, we will turn over one ambulance to Naga City and five more to Albay province. Under the PCSO’s Ambulance Donation Program, qualified local government units and institutions may request for an ambulance to be used in the areas under their jurisdiction. First- to third-class municipalities can avail themselves of an ambulance under a 60-to-40 sharing scheme, and fourth- to sixth-class municipalities may receive ambulances under outright donation. nnn

THE PCSO and St. Luke’s Medical Center (SLMC)-Global City are now partners in bringing the services of the PCSO to the public they serve, right at the hospital.

PCSO Chairman Erineo S. Maliksi and SLMC President and CEO Edgardo R. Cortez signed an agreement on April 22 to establish the PCSO Desk at the hospital, under the charity agency’s At Source ang Processing, or Asap, Program.

The SLMC-PCSO Desk will be an

The truth about inflation Paul Donovan

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UST three short months ago, the focus in financial markets was all about deflation. Commodity prices remained weak, inflation was turning negative in the euro area and European Central Bank President Mario Draghi conjured images of a “Japanstyle” scenario.

Since then, inflation has started to offer some positive surprises.

German consumer prices have picked up quickly. US core consumer-price inflation has consistently come in stronger than had been expected. Some economies still experience negative inflation, but this is the negative inflation of a relative price shift, not the deflation of a general price decline. Having falling oil prices, and all other prices rising, is a very different economic proposition from the across-theboard price decline that warrants the title “deflation.”

This shift to modestly higher inflation is largely a developed economy phenomenon. Inflation in these countries is generally dependent on domestic-labor costs, and the tighter labor market in the US and more limited labor flexibility in Europe have helped keep these costs higher.

No one is suggesting runaway inflation, but certainly consumer prices

seem to be moving higher.

The problem for investors is that financial markets are not terribly good at understanding inflation, and investors may find their future standard of living is unexpectedly damaged as a result of this misunderstanding. In some ways, this is somewhat surprising—inflation is hardly a novel concept. We have almost 3,000 years of inflation evidence. On the other hand, the lessons of inflation are often swiftly forgotten—dynasty after dynasty in medieval China collapsed amid hyperinflation, failing to learn the lessons of their predecessors.

The 20th century is littered with instances of high inflation and hyperinflation—most the result of avoidable policy errors.

If we are entering into a period of modestly increasing inflation (at least for prices away from commodities), what should investors be aware of? One important point

is that the inflation, of itself, will do little to ease debt burdens. So much government spending is tied to the rate of inflation these days (up to 70 percent in some Organisation for Economic Cooperation and Development economies) that a rising inflation rate tends to make a government’s debt-to-GDP (gross domestic product) ratio worse, not better. This means that governments are going to continue to engage in financial repression (forcing certain investors to buy bonds for “regulatory purposes”) as a subtle form of savings tax—the better to keep debt under control.

A second key point to bear in mind is that inflation is very rarely caused by foreigners. Around two-thirds of any country’s inflation can be directly attributed to domestic-labor costs.

Think about how much domestic labor is added on to an imported good after it arrives in a country—the transport, marketing, storage and retailing of a product are all labor costs.

Foreigners may have some impact, but the impact pales in comparison with domestic-labor costs.

Most important, perhaps, investors need to understand that the headline consumer-price inflation that they read about is very unlikely to reflect the inflation rate that they experience. Inflation inequality has been a key feature of the global economy in the recent past.

This means that certain groups in society will tend to face a higher inflation rate than do other groups

extension of the PCSO’s services under its flagship Individual Medical Assistance Program, or Imap.

The PCSO Desk at the SLMC will be manned by a St. Luke’s social worker trained by the PCSO. Patients who require financial assistance for their hospitalization, dialysis, medicines and other medical- and health-care-related concerns may submit their applications for assistance at the desk. The PCSO will then issue the appropriate assistance via guarantee letters to qualified beneficiaries.

The agency’s vision is to install these PCSO Desks in as many hospitals as possible, to make it more convenient for the public to access the charity agency’s services.

This would also reduce the long lines of patients or their loved ones queuing up to submit their requests for assistance at the PCSO’s Charity Assistance department at the Lung Center of the Philippines in Quezon City. Other hospitals are expected to be part of the Asap Program in due time. We welcome queries from interested institutions that would like to be part of this endeavor.

Atty. Jose Ferdinand M. Rojas II is the vice chairman and general manager of the Philippine Charity Sweepstakes Office.

in society. Generally speaking, the lower your income, the higher your inflation. In addition, the older you are, the higher your inflation. This is a lesson that, considered from the perspective of price inflation, one should try to be young and rich if one can possibly help it (economists rarely fulfil either of these qualifications).

This inflation inequality is important, because it means that (for example) if an investor is trying to save for retirement, it is no good just beating the average consumer-price inflation measure. The cost of living in retirement may well be rising faster than the average cost of living in an economy (medical bills are an obvious source of this discrepancy).

This means that some investment instruments, like inflation-linked bonds, may actually provide less insurance against the future cost of living than investors might hope.

So as inflation creeps back onto the global agenda, however slowly and subtly, investors may need to start considering how best to guard against it. It is important to understand what inflation actually is. Inflation is a simple concept—we all experience inflation, we all know what it means when prices are rising.

However, inflation is not simplistic. Inflation cannot be reduced to a single line on a chart, and presented as the definitive change in the cost of living. Once investors understand that, then they can start to protect themselves from its consequences.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Monday, May 11, 2015 A11

Choosing sides in war on sugar

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By Justin Fox | Bloomberg

HE people at candy-maker Mars Inc. have something to tell you: Stop eating so much sugar! According to the Wall Street Journal (WSJ), the manufacturer of M&Ms, Snickers and Twix has thrown its weight behind a US Food and Drug Administration push to include measures of added sugar on food labels. Non-candy food manufacturers, such as Campbell Soup Co., are opposed to the change, but Mars figures that people already know their candy bars are full of sugar. From the WSJ story: “It might appear to be counterintuitive, but, if you dig down a bit more, we know candy itself is not a diet,” said Dave Crean, global head of research and development at Mars. “It shouldn’t be consumed too often, and having transparency of how much it should be consumed is actually quite helpful to consumers.”

In a comment letter submitted to the government on Thursday, Mars also backed recommendations that people should limit their consumption of added sugars to less than 10 percent of daily energy intake and eat lots of whole grains. The letter also mentions that “enriched grains, like white rice, can provide a meaningful contribution to the diet,” and goes on and on about the benefits of sugar-free gum in fighting cavities. Did I mention that Mars also makes Uncle Ben’s rice? And Orbit sugar-free gum?

The stands food manufacturers take in the coming Sugar Wars will be determined by what they make.

For makers of sugar-filled treats, the rational response seems to be, “It’s candy, people. Eat too much and you’ll get sick.” Softdrink companies have been toying with a similar approach, although they can’t embrace it as enthusiastically as Mars has because fizzy, sugary (and fake-sugary) beverages risk losing their status as a global dietary staple. Food manufacturers that sneak sugar into soups, crackers, salad dressings and deli meat are fighting the addedsugar labeling, but will surely find ways to adjust to changing dietary recommendations. The group most adamantly opposed to added-sugar labeling is probably cranberry-juice makers, because cranberries taste terrible without lots of added sugar.

Most other juice makers don’t care so much about the added-sugar labeling, but must be at least as worried as the soft-drink makers about the new targeting of dietary sugar.

This new targeting took its clearest form in the recommendations that the US Dietary Guidelines Advisory Committee issued in February. In them, the committee finally abandoned long-held strictures on the consumption of fat and cholesterol and targeted overconsumption of added sugars and refined grains as major health hazards. This shift has been a long time in coming— I remember science writer Gary Taubes announcing its inevitability in a New York Times Magazine article 13 years ago. It is also, of course, ironic, in that past dietary recommendations helped drive the very public-health debacle that the

new ones aim to fix. Here’s Taubes, writing in 2002: [P]ublic health authorities told us unwittingly, but with the best of intentions, to eat precisely those foods that would make us fat, and we did. We ate more fat-free carbohydrates, which, in turn, made us hungrier and then heavier.… [A] low-fat diet is not, by definition, a healthy diet. In practice, such a diet cannot help being high in carbohydrates, and that can lead to obesity, and, perhaps, even heart disease.

One possible takeaway here is that the government should just stop trying to tell us what to eat. It was wrong the last time, so who’s not to say it’s wrong again—and, even if it’s right, can’t we just figure out for ourselves what to consume?

Still, as a major underwriter of food purchases (through school lunch and food stamp programs, not to mention agricultural subsidies) and medical expenses, the federal government kind of has to have some sort of stance on what’s good to eat and what’s not. Also, I’m pretty sure the new antisugar view is correct, so aren’t public-health authorities morally obligated to expunge their earlier errors by pushing the new recommendations?

Ah, but how? The added-sugar labeling seems a bit superfluous in that nutrition labels in the US already give the sugar content of a serving of food. The dietary guidelines committee proposed a tax on high-sugar drinks and snacks, which is a nicely Pigovian approach but is full of complications and surely won’t happen anytime soon beyond the very local level.

Just the discussion of the dangers of sugar is already affecting behavior, with consumption of sugary soft drinks on the decline since the late 1990s. Still, I can’t resist suggesting another idea, born of my love for breakfast, my low tolerance for sugar in the morning and my paternalistic tendencies. Something like 99.7 percent of the breakfast cereals available in the US contain significant added sugar, which always drives me a little crazy when I visit a supermarket or raid someone’s pantry as a house guest. The worst are the cereals that trumpet their natural, organic, gluten-free, earth-friendly bona fides, yet are almost a third sugar (I’m looking at you, Gorilla Munch). I’d love to slap a big label on the front of those: “This is candy, people. Eat too much and you’ll get sick.” Yes, that’s excessively paternalistic. But it might work.

Uberride Teddy Locsin Jr.

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IMOTHY Stenovec in Huffington Post writes that thanks to a rape by an Uber driver in India, the percentage of adults who’ve heard of Uber grew from 45 percent to 60 percent in the US alone. The rape highlighted the enormous risk that an Uber driver runs if he plans on raping his passenger because his route is satellite-tracked from the moment he takes in a ride.

The brouhaha raised by cab companies here over the rape there generated the first widespread awareness of Uber in the Philippines. The brouhaha also highlighted how badly cabs compare with Uber in cleanliness, propriety, safety and service.

Uber is now a $41-billion

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ANT Pritchett is a development economist, which means that he studies why countries make (or fail to make) the transition from poor to rich. He teaches at Harvard’s Kennedy School of Government, which makes him pretty elite. I, on the other hand, have never even studied development economics. So when I say that I think Pritchett’s four criteria for determinants of development are almost entirely wrong, you should take it with several grains of salt.

Pritchett laid them out in a recent blog post about women’s self-help groups in West Bengal, which the World Bank financed as a development initiative. Pritchett said that these groups didn’t pass his “smell test.” Alex Tabarrok, writing at Marginal Revolution, summarized the four key requirements of Pritchett’s smell test in quite a pithy manner.

Here they are: 1. More developed countries must have more “x” than less developed countries.

2. The developed countries must have more “x” than when they were less developed.

3. Recent development successes must have more “x” than development failures.

4. Countries that are developing rapidly must have more rapid growth of “x” than those that are developing slowly.

I think that three of these are flatout wrong. I don’t mean that good development characteristics will never pass these tests, only that they fairly

business without a single employee on the road. The way it works is people needing a ride call Uber, using an “app” in their phone—what that is—to connect them to someone with a car and a yen to drive but with nowhere in particular to go plus she wants to be paid for it. Okay, street-

I had visited a relative by marriage and another marriage, a distinguished white Russian who had fled massacre in Moscow—eventually ending up in pre-war Kobe in time for the Great Earthquake, which left him the sole survivor of his family—but he moved back there under Joseph Stalin when Hitler attacked Russia. Thing about Russians is they don’t care if their own countrymen shoot them, so long as they are with Mother Russia when she is attacked.

He wrote a beautiful and very thick autobiography. He looks like Vladimir Nabokov and his wife looks like Vera.

When I was about to leave, I asked him how to get a cab in Moscow. He said, “Raise your arm at any passing car. If it stops, the driver may let you ride—for a price.”

There had never been a report of a mugging. Either there were none or none lived to tell of it.

Al Jazeera America’s struggles reveal need for dramatic reset

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ACK in November, we welcomed Al Jazeera America’s plan for a thoughtful and more serious approach to news coverage, in contrast to the flashy graphics and loud confrontation dominating other cable news channels. We promised to revisit the network’s experiment in six months, which happens to coincide with Al Jazeera America’s grappling with a management implosion.

The network’s internal problems might only be a sideshow to the real reasons the American public still hasn’t latched on to the Al Jazeera brand. Part of the network’s unpopularity—nightly viewership has dropped to only around 30,000 viewers—is probably rooted in lingering distrust of a news product funded by an Arab government.

Another part is the network’s obscurit y, nestled deep in a cable-television menu where much bigger news channels, including CNN, FoxNews and MSNBC, had a big head start competing

How should developing nations grow?

By Noah Smith | Bloomberg

Free fire

walking is something like that.

Every Uber ride is reviewed under a five-star rating system. Uber has added a six-star for driving beyond the call, like helping a disabled passenger with his groceries. Prizes include a $1,000 gift certificate and the usual corporate giveaways that you throw away.

A recent candidate for six stars is a Chicago Uber driver, who whipped out a licensed-to-carry pistol and shot a man threatening people with a gun.

The Uber driver was not charged by the police; leaving the way open for Uber to offer also vigilante law and order. I love it.

Uber now operates in 300 cities across 56 countries.

The Uber idea, I believe, originated in Moscow, where I enjoyed an Uber-like service right after Communism collapsed and capitalist chaos replaced it.

obviously don’t have to.

Let’s take item No. 1. Pritchett says that, if something is good for development, more developed countries will have more of it. What if we make an analogy to human development? Breastfeeding is good for babies’ growth. Is it good for adults?

Let’s hope not!

We send 5-year-olds to kindergarten to play with blocks and learn the alphabet. Should we do this for successful 40-year-olds? I predict many will protest.

I am not trying to condescend to poor countries or label them as “children.” I’m just pointing out that the things that cause early-stage growth often don’t stick around after growth is complete. Another analogy would be startup companies. Do we see General Electric taking venture capital money?

No, because it no longer needs it.

So what kind of things might be good for developing nations, but not for advanced nations? How about

for viewers’ attention.

Al Jazeera America is struggling particularly hard this week to salvage its reputation amid coverage of staffers’ allegations of harassment. Senior managers have walked out in protest over the allegedly heavy-handed leadership of Chief Executive Ehab al-Shahabi.

Now, Al-Shahabi is resigning.

Marcy McGinnis, who was the senior vice president for news, quit on Monday, citing a “culture of fear” in the workplace. Another staffer, in a lawsuit, has alleged antiSemitism, sexism and retribution

against staffers who challenged management decisions. Such allegations have yet to be proven, but when they arise in the context of an Arab-owned network trying to appeal to a Western audience, the damage could be insurmountable.

Prime-time news anchor John Siegenthaler asked us in November to look past the network’s Qatari government ownership and pledged that the news staff would jealously protect the traditions of journalistic independence followed by other governmentsupported networks such as PBS and the BBC. Indeed, Qatari government influence on Al Jazeera America’s coverage is very hard to detect.

The network tackles topics that rarely get television airtime in the Arabian Peninsula, such as Seigenthaler’s discussion of gay issues

with actor George Takei.

If anything, though, the effort to appear even handed and avoid entanglement—particularly in Middle Eastern controversy—has left Al Jazeera America with a news product that often emerges as safe, dry and sometimes even dull.

Considering that C-SPAN, which is about as sedate as a network can get, manages to attract around 47 million viewers a week, we remain convinced that a sizable segment of the American population prefers its news and current events coverage without shouting analysts, screaming headlines and constantly scrolling news alerts.

Al Jazeera America might still survive, but it’s definitely due for a new image, more sensitive executive management and injection of energy to gain a wider marketing appeal. The Dallas Morning News/TNS

spending on basic research? Does it make sense for Burma to devote large percentages of its gross domestic product to develop stem-cell therapy?

No, because Burmese resources won’t add significantly to the global effort to develop stem-cell therapy; those resources could be much better spent building infrastructure.

How about infrastructure spending, for that matter? A country with few roads needs to build a lot of them in order to have an advanced economy.

But a rich country—unless its roads are in a state of disrepair, as the US’s are at the moment—doesn’t need to splurge on road-building. If it does, it could end up wasting a lot of money, as Japan did in the 1990s.

Another example might be intellectual property protection. It makes sense for advanced countries, at the technological frontier, to have some form of IP protection, in order to encourage and reward technological progress. But for a developing country,

this doesn’t necessarily make sense.

It’s faster and easier to simply copy technologies from the rich countries.

This is what the US did when it copied British technologies in the 1800s.

It’s what China did when it copied US technologies in the 1990s and 2000s.

If these developing countries had enacted strict IP protections, it would have slowed their growth without doing much to boost innovation.

I could keep going. But the point is clear—what is appropriate for a rich country isn’t always appropriate for a developing country, and vice versa.

This also covers Pritchett’s item No. 2.

It also covers Pritchett’s item No. 4. Pritchett claims that if x is good for development, fast-growing countries should have a faster rate of increase of x than slow-growing countries. But if something is good for developing countries and not for rich countries, we’d expect that thing to decrease faster as countries grow faster. In other words, we’d expect countries

to grow out of it. For example, take infrastructure spending, as described above. We should expect it to decrease at a greater rate for countries with faster growth, because they’re growing out of it at a more rapid clip.

In other words, poor countries shouldn’t necessarily just imitate rich countries. This may have been the problem with the Washington Consensus, the development prescriptions that US economists dished out to poor countries in the 1990s. That advice is largely perceived to have been a failure. The political institutions of the poor countries might simply not have been able to handle the instabilities caused by the economic disruptions that resulted from following the advice.

So although I’m no development economist, it seems obvious to me that we need better development economics, and that simply having poor countries copy rich countries isn’t necessarily going to get the job done.

2nd Front Page BusinessMirror

A12 Monday, May 11, 2015

Michael Romero owns Harbour Centre–RTC Continued from A1

“In fact, they were all duly reflected in the GIS of HCPTI from 2011 up to 2014. Let it be noted further that they were duly notarized, such that any doubt as to its due execution and authenticity is dispelled,” the RTC in Manila added.

Further, the assignments of the 68.11-percent shareholdings in HCPTI in favor of HCPHI were, likewise, reflected in other documents, specifically the certifications dated April 11, 2013, executed by Jerome Canlas for KPMG Manabat Sanagustin and Co. and the 2011 Audited Financial Statements of RII Builders and RII Holdings.

In both certifications, Canlas categorically stated that HCPHI had a total of 689,294,652 shareholdings in HCPTI for the year 2011 and 2012.

Likewise, in the Independent Auditor’s Report dated March 28, 2012, prepared by Corazon R. Ladiza with respect to the 2010 and 2011 financial statements of RII Holdings Inc., page 11 thereof unequivocally states that “the company owns 51.67-percent interest in RII Builders Inc. and 40-percent interest of HCPTI in 2010. But, in 2011, the corporation RII Holdings transfer 100 percent of its interest to HCPI in favor of Harbour Centre Port Holdings Inc.” Additionally, in another Auditor’s Report prepared by Ladiza for RII Builders Inc., covering its financial standing for 2011, page 17 clearly indicated that “investments to HCPTI were disposed, based on its present

and fair market value.”

These certifications, together with the Independent Auditor’s Report mentioned above, refer to the 2011 Deeds of Assignment executed by RII Builders and RII Holdings Inc. in favor of HCPHI, assigning, transferring and conveying to the latter the 28.21-percent and 39.90-percent shareholdings in HCPTI for a total of 68.11 percent.

The Deeds of Assignment involving 68.11-percent shares clearly vested ownership to HCPHI which controls majority of the outstanding capital stocks in HCPTI. “After a careful and painstaking evaluation of the evidence submitted by both groups [Romero and Arellano], the court hereby grants the motion and dismisses the complaint,”the court order read.

The decision followed a motion filed by the younger Romero and other incumbent officials of the HCPTI asking the court to withdraw a complaint filed by a certain Alethea Arellano, who represented herself as assistant manager for port facility maintenance of HCPTI, because it was filed without authority from the complaining corporation, which is HCPTI. The case stemmed from the complaint filed by Arellano on March 5, 2015, against Romero and other individuals including Microtech Capital Inc., in behalf of the HCPTI. Arellano claimed that HCTPI, is seeking to recover the possession of 15 motor vehicles, registered under HCTPI which were lent to the defendants by virtue of their employment with HCPTI.

www.businessmirror.com.ph

PHL not out of the woods yet on euro crisis effects

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BY Cai U. Ordinario

espite the resiliency shown by the Philippines amid the euro crisis, the $272-billion economy is not yet in the clear and the crisis could still adversely affect the country’s growth trajectory.

This was part of the presentation made by University of Malta Prof. Lino Briguglio on the subjects of the European Union (EU) debt crisis and the Greek conundrum on Asean regional and individual economies.

“It appears that the Philippines was able to absorb the shocks that arose from the EU crisis, as evidenced by its solid economic growth rates and its relatively low debt ratio,” Briguglio said. “[However], economic conditions in the EU are likely to have an effect on the Philippine economy, given that the EU is an important trade partner and a major FDI [foreign direct investment] contributor,” he said.

Briguglio affirmed the Asian

Development Bank (ADB) position in a paper saying the euro area crisis might shave off a few percentage points from the country’s growth, measured as its local output or the gross domestic product (GDP).

He said just like other economies under the Asean banner, the Philippines has enough financial headroom that acts as cushion in case trade and FDI weaken as a result of the crisis in the euro area.

Briguglio lauded the country’s growth of above 6 percent and of how in 2014 the government reduced the national debt-to-GDP ratio to about 35 percent.

“Southeast Asian economies [are] resilient in that their debt/ GDP ratios are not high. The ADB paper states that this would give

governments in Asia the flexibility to spend on stimulus programs in the case of a downturn in trade and FDI,” Briguglio said.

State-owned think tank Philippine Institute for Development Studies President Gilberto Llanto said the EU crisis is rooted on governance.

Llanto said the governance issue pertained to the implementation of agreed rules on managing finances and ensuring euro zone stability at the national levels.

Briguglio concurred and both experts said the solution comes down not to the ability but to the willingness of countries to follow and enforce the new rules.

Overall, the Philippine Exporters Confederation Inc. (Philexport), in reaction, said these lessons have prompted Philippine and Asean regional leaders to consider the limitations of an intricately and economically integrated entity like the EU. “It is clear that a thorough understanding of the structure, capabilitie and competitiveness of each Asean member is important, with emphasis on promoting cooperation and commitment to symmetrical growth and stability and to ensure that no member is left behind,” Philexport said.

SMBI Q1 net profit up 20%

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an Miguel Brewery Inc. (SMBI) said its net income rose by 20 percent in the first quarter of the year due to steady demand for its products.

The company said its net income went up to P3.3 billion in January to March from P2.7 billion recorded in the same period last year.

Consolidated revenues reached P8.9 billion for the first quarter of 2015, an 8-percent improvement from the P17.6 billion in 2014.

SMBI outsells every other beer maker in the country at about nine to one but still struggles to compete with other brands such as the alcohol-laced pop drinks as local drinking habits change.

In its Philippine operations, the company said it implemented new campaigns and consumer and trade programs to strengthen brand equity and increase consumption.

Despite the imposition of higher excise taxes, volumes grew by 7 percent to 40.9 million cases. With higher volumes, revenues reached P16.2 billion against the P13.8 billion in 2014.

Philippine operations’ net income rose by 29 percent, ending the first quarter with P3.2 billion. VG Cabuag