BusinessMirror January 6, 2016

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TECH OUTLOOK The navitity of Your son

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GIVE US THIS DAY, COMMITTEE ON DIVINE WORSHIP AND LOUIE M, LACSON, HFL

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Life

FIVE BOOKS TO INSPIRE A CREATIVE SPARK FOR A NEW YEAR »D2

BusinessMirror

Wednesday, January 6, 2016

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THE ULTIMATE SELFIE Globe’s Rebel Heart raffle winner Kathrine Martinez with The Queen.

GLOBE CEO Ernest Cu joins #BeOneWithMadonna flyaway winners in LA.

GLOBE BRINGS LUCKY PINOY FANS TO MADONNA’S ‘REBEL HEART’ CONCERT IN L.A.

Tech outlook for 2016 V IRTUAL reality, connected cars, e-sports, the on-demand economy—all are becoming important elements in the Southland economy, and all are poised for rapid growth in 2016—along with some challenges. And then there’s Snapchat Inc., based in Venice, and one of the most highly valued companies currently competing in the latest venture-capital-juiced start-up cycle, which many believe is way overheated.

SNAPCHAT THE popular disappearing chat and video app needs to create predictability for investors to increase the odds of going public at a valuation exceeding the $16 billion at which it’s supposedly valued. That includes steady growth in sales.

More time spent on Snapchat means more ad revenue for the company. So a string of new features will certainly be added in 2016. Some possible new additions include: group chats, voice features (the company can’t ignore the smashing success of Dubsmash, an app that dubs selfie videos with popular sound clips), curated user-generated videos and camera upgrades.

—P D

VIRTUAL REALITY JUST this year, Apple, Nokia, Netflix, the New York Times, GoPro, the Discovery Channel and even toy maker Mattel introduced loads of hardware and content for immersive technology—a burgeoning market segment that includes virtual reality, augmented reality and other means of putting users in an alternate universe, usually with the aid of computerconnected goggles.

Expect 2016 to be even bigger. Right now, Samsung’s Gear VR is the only major brand with a

headset available to consumers. But come next year, Sony’s Playstation VR, Facebook’s Oculus Rift and HTC’s Vive are expected to be released and rumored to range in price from about $300 to $1,500. Of course, there’s Google Cardboard, which one can build with everyday items (see goo.gl/CHUo90). The New York Times’s partnership with Google Cardboard demonstrates the medium’s potential in journalistic storytelling. The challenge will be finding enough games, movies, TV shows and other software to make the technology compelling. Remember when 3D glasses were supposed to be the next big thing?

On that note, here’s hoping there’s a way to one day look less dorky strapping a plastic block to your face.

—D P

E-SPORTS GREAT video-game players have competed against others for years with money or trophies at stake. But now that millions of people are watching those e-sports contests in big arenas and other venues, entrepreneurs are perking up.

In 2016 the e-sports industry will see a huge burst of investment and rapid professionalization, analysts say.

Video game competitions will begin running on cable network TBS on Friday nights, sponsors will increase tournament prizes, and those scheming entrepreneurs will try to cash in quickly just in case e-sports turn out to be a fad. For now, industry experts are optimistic that they’re onto the next $1-billion sport. —P D CONNECTED CARS WHETHER it’s Internet-connected cars or selfdriving vehicles, the very definition of an automobile is changing dramatically. Car-industry analysts portray a world in which cars transform into entertainment hubs

and people won’t have to get driver’s licenses anymore.

It’ll be years before you can ditch your car and rely on a fleet of on-demand driverless vehicles, but the auto revolution will continue to make big strides in 2016.

Still, for all the buzz and potential, there are numerous tensions at play. For one, California’s Department of Motor Vehicles introduced draft rules for public use of driverless cars that would require a licensed driver to be in the vehicle, among other regulations. Google has already voiced its disappointment with the proposed restrictions.

—A C

THE ON-DEMAND ECONOMY IF 2015 was the year the on-demand economy became a mainstay in California, 2016 could be the year the business model powering services such as Uber, Lyft and GrubHub unravels.

Come June 20, 2016, the business model of using independent contractors to fulfill on-demand service such as taxiing passengers, cleaning houses and delivering meals will quite literally be put on trial when a class-action lawsuit against Uber over worker misclassification goes before a jury in a US District Court. Other businesses, such as Lyft and DoorDash, face similar lawsuits. The class actions argue that many workers in the on-demand economy have been misclassified as independent contractors, effectively stripping them of rights to overtime, expense reimbursements and other benefits.

Many workers want to be recognized as employees— benefits and all—a proposition that start-ups are balking at because, in addition to the costs involved, it would require a complete business model overhaul.

—T L

LOS ANGELES TIMES

Amplify your life IN eye-popping colors and modern designs, JBL’s newest portable speakers are sure to amplify life and celebrations with its high-definition sound quality—with the right bass and tremble combination to keep you dancing and singing all day with family and friends.

Whether we enjoy it in the comforts of home, or going on a road trip, music will always be key in making things more interesting and memorable. Helping everyone in spicing up and amplifying their celebrations is JBL (http://ph.jbl.com).

Revolutionizing your traditional outdoor boom-box celebrations, JBL Xtreme speakers can turn any

occasion into a worthwhile gathering with its loud and solid sound quality.

The perfect outdoor companion, these speakers come in a splashproof design that allows users to enjoy the music—without the fear of getting your speakers wet or dirty.

Music lovers who wish to experience great sounding music with a more portable gadget can look forward to the JBL Charge 2+ and Flip 3 speakers. These handy speakers also have the same splash-proof design to make parties beachside or poolside possible.

Redefining music on the go are JBL’s ultra-portable speakers with their clear sound quality. Stay

motivated to push further and keep your energy-pumping music on hand wherever your adventures lead you with the Clip+. If that doesn’t tickle your fancy, the GO speakers can be the best fit for you and your mobile phone, as it turns spontaneous gatherings into a habit while enjoying your favorite tunes.

Those wanting to make not just an aural statement at night can do so with the JBL Pulse 2. Coupled with the same splash-proof design and the brand’s signature sound quality, the Pulse 2 takes your parties and musical experience a notch higher with eye-catching color light patterns that move to the beat of your music.

MADONNA fans Kathrine Martinez and Mylene Manuel had the biggest music experience of their lives when Globe Telecom brought them closer to their idol at her Rebel Heart Tour stop in Los Angeles, California, USA, in October.

Martinez, a Tattoo Home customer, and Manuel, a Globe Prepaid customer, were the lucky winners drawn from millions of entries for the Globe Rebel Heart Tour Raffle Promo. Upon subscription to Globe or Tattoo services, customers earned entries to win an all-expense-paid trip to catch Madonna’s Rebel Heart Tour stop in Los Angeles (whose lucky winners were Martinez and Manuel) or tickets to Madonna’s Rebel Heart Tour stop in Manila on February 24.

Martinez and Manuel won the LA flyaway package, which included roundtrip airfare, three-night hotel accommodation and $300 pocket money each. But the highlight of their trip was the exclusive Rebel Heart Tour concert experience made possible by Globe in collaboration with MMI Live and Live Nation, promoters of Madonna’s Rebel Heart Tour. The winners were given an exclusive backstage tour where they witnessed how the grand production was done from behind the scenes. They were also treated to preconcert cocktails at the Rebel Heart VIP lounge. And best of all, they had front row seats inches away from The Queen as she performed onstage for almost three hours nonstop, covering her hits from her best-selling Rebel Heart album and her iconic songs.

Manuel recounts her Rebel Heart Tour LA experience: “It was one for the books. Together with the other winner, Kathrine, we were treated like VIPs. We were able to enter the Rebel Heart Lounge, which was only meant for select VIPs. We were also given a backstage tour. We had some of the best seats in the concert. We were so close to the stage that we could actually hold Madonna if ever she held her hand out. Also, we were able to see Michael Weatherly, Ashton Kutcher and Katy Perry, who joined Madonna onstage in the latter part of the show.”

“Watching her live, up close—really close—and personal was a huge moment for me. I have always wanted to see her perform live because she truly does entertain. The lights, the stage, the production, the dances and the songs—everything was perfect, designed to entertain and amaze,” shares Martinez on her bucket-list moment.

Just like a true Madonna fan, even if Martinez already saw the concert in LA, she will still go to the Madonna concert in Manila in February.

“I have tickets to her Manila concert and after watching her in LA, I’m just so excited to watch again. That shows that watching her is really worth it. Not just because I am a fan but also because she delivers a concert performance like no other.”

Aside from the two Madonna Rebel Heart Tour LA concert winners, other Globe customers are also set to see Madonna up close and personal for free when the Rebel Heart Tour comes to Manila in February.

Meanwhile, Madonna fans in the Philippines also have the chance to catch her live at the Rebel Heart Tour Manila, which is being presented by Globe at the Mall of Asia Arena on February 24 and 25, with tickets available at SM Tickets. A special offer is also available for Lower Box ticket buyers who can avail of the tickets at zeropercent interest for a six-month installment plan.

For inquiries, call SM Tickets at 470-2222 or visit www.smtickets.com.

LIFE

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BusinessMirror

Editor: Tet Andolong

THE pool at the Avant at the Fort

VISTA RESIDENCES CATERS TO PRIME CONDO BUYERS N B M G S

OT all condominiums are alike. That said, not all condominium dwellers are alike. Fully understanding this and knowing the profiles of its many markets, Vista Residences Inc.—the condominium arm of the country’s premier property-development company Vista Land—has created a roster of “condominium series,” each designed to respond to the diverse needs and preferences of its equally diverse markets.

To date, there are three. There is the highly viable University Series, a selection of value-priced high- and midrise towers strategically located within university clusters in the country’s top cities. Currently, there are nine towers, four of which have already been sold out. The second is dubbed Transit-oriented Developments—condominiums nestling on top of key transit hubs to allow residents easy movement. Presently, there are two—Symphony on Timog Avenue, Quezon City, and The Laureano di Trevi, standing tall on Chino Roces Avenue, Makati City.

The third is called the Prime Series, a collection of exquisitely designed towers. Today there are seven beautiful vertical villages in the Prime Series, and these are the gems in Vista Residences’s property portfolio. The word “prime” is defined as “something of the best quality, of excellence.” The Vista Residences’s Prime Series is a listing of skillfully engineered and beautifully designed towers—often serving as both residential homes and business headquarters within the country’s central business districts (CBDs). Created by top architectural firms and built with leadingedge technology, these vertical villages are outfitted with facilities and amenities that take the residents’ lives a notch beyond expectations.

One of the key strengths of the seven towers in the Prime Series is their location. Each stands centrally within one of Metro Manila’s CBDs. Designed as lifestyle towers, the homes-in-the-sky are built right in the middle of the commercial and business hubs, allowing residents easy and quick access to places of work, as well as places of leisure.

Salcedo Square opens its doors to unit owners and investors, as it

recently held its blessing of the property and ribbon-cutting rites. The 30-story of edgy glamour rising into the Makati skyline was created to finally give the city’s natives a venue to express who they are and how they want to live. Sitting on prime real estate, Salcedo Square is conveniently located on L.P. Leviste Street, in the heart of Salcedo Village’s “quieter” side. The village is dotted with cozy cafés, food centers and well-landscaped parks that on weekends become either the jogger’s haven or Makati’s biggest weekend food-and-flea market. Salcedo Square was designed to allow its residents the flexibility of selecting and dressing up their units as they choose. At the end of each day, a grand lobby will welcome residents home to a place where they can say good-bye to the mind-numbing monotony of the corporate world and walk into a refuge they have designed for themselves.

In response to the residents’ need for escaping and unwinding, the “amenities center” will house a swimming pool, garden patios, fitness gym and a function hall. The lobby will be manned 24/7 with security. An intelligent building, Salcedo Square will boast of two highspeed residential elevators and one service elevator, Wi-Fi, a CCTV system with round-the-clock security, an automatic fire alarm and sprinkler system and a standby generator.

The building’s ground floor will be a commercial area housing boutiques and a café.

Vista Residences’s roster of prime vertical showpieces in the country’s top CBDs right within Greenbelt’s perimeter is an amazing piece of architecture called the KL Tower— a 32-story condominium that pioneers the concept of “Art-chitecture”, the seamless blending of elegant art with building design. KL Mosaic has

six façades, as opposed to the usual four, making it the only hexagonal building in the country. Designed by W.V. Coscolluela & Associates, one of the country’s finest architectural firms, the company has created the blueprints for both cultural and architectural landmark. A few steps from the Greenbelt commercial center stands Mosaic Tower, the country’s first-ever “designer” condominium. In building the tower, Vista Residences partners with the illustrious Lopez clan, with W.V. Coscolluela & Associates at the helm. To add the “designer” element, Vista Residences commissioned some of the country’s top designers to create the public areas.

The result? Mosaic’s building façade and interiors are a confluence of art, fashion and architecture.

Standing in the heart of the last remaining prime spot in the golden triangle that is Crescent Park West in the Bonifacio Global City, is Avant at the Fort. Avant’s location makes it central to everything, from the city’s hottest commercial centers and hippest lifestyle areas to the busiest business districts, as well as schools and hospitals. Avant’s magnificence goes beyond skin deep. Designed by Asya Design Partners, Avant has taken sustainable architecture technology from around the world and put it into a 38-story marvel. The tower offers a range of lifestyle features and amenities, including a chic highceilinged lobby, a welcoming lobby lounge, a free-form pool nestled in a sundeck and, in tribute to green living, a sky garden.

Another stunning Prime condominium rises in one of the most sought-after locations in the Ortigas Business District. The Currency, is a glass-and-steel tower strategically bordered by the city’s key avenues: Julia Vargas, F. Ortigas Jr. and Garnet.

Rising to 32 stories, the architectural masterpiece is a hub of residential units and business flats that seamlessly blend enterprise with sanctuary.

The vertical village comes with multiple unique enclaves for momentary relaxation, as well as a ground-level commercial plaza that houses retail and commercial shops and restaurants. Several stories up, on the 12th

THE gym at the Avant at the Fort

THE lobby at Salcedo Square

floor, hanging gardens offer an exquisite panorama of the city—several cities, in fact.

On the corner of Laurel Street and Shaw Boulevard in Mandaluyong City stands an epic token of the country’s history—the former Laurel mansion, home to a president and homestead to his family for generations. On these celebrated grounds, Vista Residences is erecting a residential-cum-commercial condominium complex, the iconic Vista Shaw. Sprawling over 1,000 hectares, the former Laurel compound

ONE bedroom at Vista Shaw

was the setting for a large part of the country’s political past. The master plan for the new tower will keep the Laurel Mansion as a commercial center and the heart that will fuse the two towers in the complex to keep the development firmly connected to our history.

Revamping of Quezon City’s skyline on Eugenio Lopez Drive is the Wil Tower—a 42-story, mixed-use condominium, where the high life will meet the good life. Sitting on a 3,000-square-meter lot and located in the glitzy center of the country’s

show business and television industry, the Wil Tower is rubbing elbows with the city’s biggest and brightest television and movie complexes, ABS-CBN and GMA 7. This pièce de résistance in Quezon City will offer its residents a variety of high-end studio spaces to luxurious two-bedroom retreats with a panorama of nearly the entire city. Wil Tower greets the street with a four-level commercial complex called All Home.

At Vista Residences, every suite and studio is a place where dreams will be dreamt and lived, and lives created and evolved. Whatever the cost, every room, every space is designed with creative and practical space planning. It is something Vista Residences and its mother company, Vista Land, is known for. Whether the property is themed, elegant or sensibly practical; wherever possible, the rooms are designed with space to breathe, the designs are stylish and the amenities first-rate.

Function, design and the building of dwellings that families can truly call a “home” is central to the Vista Residences philosophy. www.vistaresidences.com.ph

PROPERTY

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A UNIT at Salcedo Square

REAL WARRIORS

Sports

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AS if the Lakers don’t have enough issues, now Byron Scott (right) and Julius Randle are at odds.

BusinessMirror

| WEDNESDAY, JANUARY 6, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana

B M B Los Angeles Times

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OS ANGELES—Drama always has a way of tiptoeing into the Los Angeles Lakers’ backdrop, whether they’re seeking four consecutive championships or, in these sadder days, four victories in a row.

Even though the Golden State Warriors are coming to town on Tuesday for a true reality check, there was more interest on Monday in the prickly relationship between Lakers Coach Byron Scott and Julius Randle.

The 21-year-old reserve power forward did not like being mentioned by Scott for playing poor defense after the Lakers’ 97-77 victory on Sunday against the Phoenix Suns.

“I don’t think there was defense on the court at all in the fourth quarter and he singled me out. I think it was a team thing,” said Randle, who didn’t speak to reporters after Sunday’s game but was available on Monday after practice.

Randle also disliked being taken out of the game by Scott. He appeared to pout on the bench.

“Fifteen minutes,” he said, referring to his approximate total playing time. “I was frustrated I wasn’t on the court. Simple.”

His official playing time was 15 minutes and 57 seconds, during which he scored two points and missed all four of his shots from the field.

His stats weren’t poor enough to be removed, he suggested.

“It wasn’t like I was 0 for 25 or something. I took four shots. Still had 12 rebounds, still had three assists,” Randle said.

Randle was irritated on the court in the fourth quarter of a rare Lakers blowout victory, yelling at reserve point guard Marcelo Huertas to pass him the ball. Randle was trying to post up Phoenix guard Ronnie Price but was near the free-throw line, not down low.

The way Randle acted in the game and also afterward by ditching reporters was not condoned by Lakers officials.

“He’s got to grow up. Simple as that,” Scott said. “I think the main thing I don’t like is when you take him out of games, how he reacts sometimes. I chalk it up to immaturity and just being inexperienced in this level. It’s going to happen again. I’m going to take him out of other games that he’s not going to like.”

Some of this could be big-picture frustration coming out sideways. Randle has lost ground in trying to recapture his starting job because rookie Larry Nance Jr. has been a pleasant surprise since replacing him in the opening lineup four weeks ago.

Nance is one of the friendliest players on the team. There’s no rivalry there. But maybe Randle is feeling the pinch of reduced minutes.

Nance was the 27th overall pick in the 2015

draft, while Randle was drafted seventh in 2014.

“That’s almost asking if he’s jealous of Larry.

I don’t think so,” Scott said. “The one thing about Julius that I do know is that he wants this bad.

He wants to perform. He wants to play well.

“Sometimes you want that too bad. You’ve got to relax and just kind of let the game come to you.

But again, he’s 21 years old. He’s young. He’s going to go through these type of things. As a coach, I’m going to let him go through it. I said my peace last night and I’m going to let him go through it.”

Randle’s stats are almost the same whether he starts or comes off the bench.

He is averaging 11.7 points and 9.2 rebounds as a starter, 10.8 and 10.1 as a reserve. The main difference is in his accuracy—he makes 43.3 percent of his shots when starting and 38.9 percent off the bench. Both figures are substandard for a power forward operating close to the basket.

If Randle needed to be apologetic to Scott, he wasn’t.

“Basketball is an emotional sport. I’m going to feel some type of way about it,” Randle said.

“It’s not in my control [to start], but regardless, I’m going to feel frustrated or happy or whatever it may be.”

$95,000 BASKET

THE Staples Center crowd went crazy. So did the Lakers’ bench. Lakers forward Julius Randle even

REAL WARRIORS

CHARLOTTE’S Jeremy Lin protects the ball against Golden State’s Klay Thompson during the second half of their game on Monday. AP

The Warriors seemed to almost toy with the Charlotte Hornets on Monday night before turning on the jets midway through the third quarter and cruising to a 111-101 victory, their 35th in a row at Oracle Arena.

B C S The Oakland Tribune

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AKLAND, California—The Golden State Warriors suddenly look like the real Warriors again. Stephen Curry’s left-shin scare was just that, Harrison Barnes has returned with a flourish, Klay Thompson is on a very nice roll of games, Draymond Green is still triple-doubling, and even Marreese Speights is starting to show flashes of Mo Buckets form.

Next thing you know, Steve Kerr will come strolling out to the bench to start barking at officials again.

The Warriors seemed to almost toy with the Charlotte Hornets on Monday night before turning on the jets midway through the third quarter and cruising to a 111-101 victory, their 35th in a row at Oracle Arena.

Even though they trailed through much of the first half, the Hornets were hanging in nicely for much of the game and made a run to get within 66-65 on Jeremy Lin’s three-pointer with 8:56 to go in the third quarter.

But the Warriors (32-2) finally decided enough was enough. They went on a 9-0 run as part of a 29-12 blitz over the rest of the third and led, 95-77, heading into the fourth quarter.

It was a night of impressive numbers for Golden State. First among them was Green’s third triple-double in a row, just the 15th time that has been accomplished in the history of the National Basketball Association. Green had 13 points, 15 rebounds and 10 assists. He became just the second Warrior to accomplish the feat, and it’s been awhile since the last time—Tom Gola did it way back in 1959-1960.

Close behind Green were Curry and Thompson, who scored 30 points apiece.

Thompson, who hit six-of-11 three-point tries, has scored at least 20 in seven of his last nine games, and had 18 in one of the others.

As for Curry, who appeared unlikely to play earlier in the day, the reigning Most Valuable Player hit 12-of-21 shots and scored 30 points in front of his dad, Dell, a

broadcaster for the Hornets. He also secured Green’s stubborn last assist in the fourth quarter, canning a 26-footer after several misses to finish off the forward’s latest triple-double.

Rounding things out, Speights seems to have finally found his groove of a year ago.

Backing up Andrew Bogut at center in place of Festus Ezeli, who was active but missed his fourth straight game with a sore toe, Speights hit seven-of-10 shots and scored 15 points off the bench. Barnes, meanwhile, played 20 minutes and scored eight points after missing the previous 16 games with a severe left-ankle sprain and bone bruise suffered on November 27 at Phoenix.

The Warriors were in command for much of the first half, leading by as many as 12 before ultimately settling for a 62-54 advantage at intermission. Barnes finally made his long-awaited return with 2:11 to go in the first quarter and didn’t look rusty.

After missing his first shot, he hit three in a row from midrange and showed very little ill effects from his five-week layoff.

Kemba Walker and Jeremy Lamb led Charlotte with 22 points each.

Guard Leandro Barbosa (left-shoulder sprain) and forward James Michael McAdoo (sprained toe) were out.

SPORTS NBA RESULTS

Cleveland 122, Toronto 100

AVING earlier been proven wrong on the path the inflation trod in 2015, and obligated by law to explain how and why it happened, the Bangko Sentral ng Pilipinas (BSP) on Tuesday stubbornly insisted that price pressures over the policy horizon were to boil hot enough as to move back to the 2 percent-to-4 percent range this year.

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Philadelphia 109, Minnesota 99 Miami 103, Indiana 100, OT Boston 103, Brooklyn 94 Detroit 115, Orlando 89 San Antonio 123, Milwaukee 98 Sacramento 116, Oklahoma City 104 Houston 93, Utah 91 Memphis 91, Portland 78 Golden State 111, Charlotte 101

The declaration carries with it an implied optimism that inflation, or the rate of change in prices, would ramp up gradually and end the year within the target. This means the economic activities over the next 18 to 24 months, pushed forward by within-target inflation, should be frenetic enough as to make possible local output, measured as the GDP, averaging a moderate 6 percent.

S “BSP,” A

AN attendant of a Shell station in Paco, Manila, services an SUV owner, a beneficiary of cheaper oil that pulled down inflation in 2015. ROY DOMINGO

Inflation slowed to 1.4% in 2015 on cheaper oil

T

ran out onto the court.

No, Kobe Bryant did not make a miraculous shot. He was sideline with a sore right shoulder.

But on a night where everything seemed to go right for the Lakers in their 97-77 win over the Phoenix Suns on Sunday at Staples Center, it also went right for their fanbase.

David Moya, of Oakdale, California, hit a half-court shot between the third and fourth quarters to win the $95,000 MGM Grand Big Shot Jackpot. Moya shared afterward that he plans to spend part of the money to attend Bryant’s final game on April 13, against the Utah Jazz at Staples Center.

“Shooting is half luck and half skill,” Lakers guard Lou Williams said.

“He made a big one. I’m sure that’s a great way for him to start his New Year.”

HE increase in consumer prices in 2015 slowed to 1.4 percent— compared to 4.1 percent recorded a year ago—due to cheaper gasoline, as well as food and utilities, the Philippine Statistics Authority (PSA) said on Tuesday.

The National Economic and Development Authority (Neda) said the generally low-inflation environment last year was “expected.” The average inflation in 2015 was lower than the 2 percent-to-4

2.1%

Core inflation, which excludes volatile items like food, in 2015 percent government target. “[The low inflation] was largely due to favorable supply-side factors, such as relatively lower domestic retail C  A

US Pacific Fleet shrinks as China grows more aggressive

W

HEN the US wanted to show the world it didn’t recognize what it called China’s “excessive” territorial claims in disputed waters of the South China Sea this fall, it sent a warship near one of Beijing’s newly built artificial reefs.

The move came amid a debate about whether the US has enough ships to meet challenges posed by a fast-growing, increasingly assertive Chinese Navy that is unsettling some

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

B B C

B C U. O

SCOTT TO RANDLE GROW UP!

Wednesday, January 6, 2016 Vol. 11 No. 90

BSP still disinclined to adjust rates as inflation uptick seen H “Inflation for December at 1.5 percent brings the full-year inflation average to 1.4 percent. As we expected, this is below the government’s target for 2015. But our forecasts for 2016 to 2017 show an inflation path consistent with the national government’s target of 2 [percent] to 4 percent,” BSP Governor Amando M. Tetangco Jr. said in a text message after the Philippine Statistics Authority’s announcement of the December 2015 inflation.

PRIME CONDO E1 Wednesday, January 6, 2016

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INSIDE

LMIGHTY ever loving God, as we see how the nativity of Your son according to the flesh draws near, we pray that to us, Your unworthy servants, mercy may flow from Your Word, who chose to become flesh of the Virgin Mary and establish among us his dwelling, Jesus Christ our Lord. Amen.

A broader look at today’s business

of its neighbors. China announced last week that it would build its second aircraft carrier, this one with domestic technology.

The Navy and its regional component, the US Pacific Fleet, both have fewer ships now than in the mid1990s. Navy officials say vastly improved technology on those vessels outweighs any disadvantage from a drop in numbers.

Questions about whether the

PESO EXCHANGE RATES n US 47.1250

Pacific Fleet has enough resources are more of a reflection of regional anxieties than the Navy’s actual capability, said its commander, Adm. Scott Swift.

Even if the entire fleet was in the South China Sea, he said, he’d still get asked whether the US was bringing more forces.

“It’s this sense of angst that I hear from those in the region, driven by the uncertainty and the rhetoric and,

BMReports

OPTIMISM ABOUNDS AS EXPANSION DRIVERS SEEN MORE THAN HEADWINDS B M R M  R C

A

Conclusion

T least five major challenges to growth were identified by economists, leaders of trade groups and business executives in a poll conducted by the BM.

These concerns—change of administration uncertainty, export financing, public-private partnership (PPP) implementation, poverty and power— are seen to temper the pace of GDP expansion to 6.35 percent for full-year 2016, based on the poll’s average growth forecast.

They serve as the counterweight to the economic drivers that include election spending, infrastructure spending, tourism, remittances and consumer spending, foreign direct investments, exports and manufacturing.

Change of administration

WHILE seen as the top growth driver this year, the national election is also deemed by experts as an obstacle for economic expansion because of the uncertainty it creates.

“Positive, if the elections were perceived to be

Growth hurdles Change of administration, export financing, publicprivate partnership implementation, poverty and power honest, open and peaceful, and if the elected president is seen as a major departure from the present inept, indecisive and vindictive incumbent. Negative, if the elections were inconclusive and violent, and the elected president is seen as a clone of the present inept, indecisive and vindictive incumbent,” former Budget Secretary Benjamin E. Diokno said.

Experts also say that if the new administration is able to effectively utilize the budget it has allotted for the different projects and sectors, it could serve as a catalyst for growth. “[The new president C  A

S “U.S. P F,” A

n JAPAN 0.3948 n UK 69.3586 n HK 6.0796 n CHINA 7.2125 n SINGAPORE 33.1143 n AUSTRALIA 33.7596 n EU 51.0552 n SAUDI ARABIA 12.5616

Source: BSP (5 January 2016 )

A2 Wednesday, January 6, 2016

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Optimism abounds as expansion drivers seen more than headwinds Continued from A1

has to] be credible, have strong support at the grassroots level, be a true leader, and able to hit the ground running since the pace was slow in the current administration,” University of Asia and the Pacific (UA&P) associate professor Victor Abola said.

“With the uncertainty of the next administration, of course, the 2016 budget has been passed so it makes large exempts that the democracy continues to spend that particular budget by the Congress very recently,” said John D. Forbes, legislative chairman of the American Chamber of Commerce of the Philippines. “But there is a tendency—when a new administration comes in—to want to do things differently just because they have the power to do it, which is not good sense for the economy.

So there is some risk for the economy that in some areas they may study, they may change and they may cancel some of the policies programs that are represented in the 2016 budget.”

But Dr. Bernardo M. Villegas, UA&P Board of Trustees member, thinks otherwise. He believes that the change in administration will not hinder economic progress. “The main drivers are already on automatic pilot. They do not depend on who will be elected president,” the economist said.

Export financing

Lackluster global demand pulled down the country’s merchandise exports in the first 10 months of 2015

to $48.87 billion, 6.2 percent lower than last year’s receipts.

The drop in the export of commodities, like agro-based products, manufactured goods, mineral products, and petroleum products is an offshoot of the downward trend in global economic activities, triggered by the China gloom.

According to Export Marketing Bureau Director Senen M. Perlada, for the export sector to snap back and contribute more to GDP, it must be aided by proper export financing. Without adequate export financing, most micro, small and medium enterprises (MSMEs) will have trouble competing in the global market.

“Challenges for exports will be export financing. Lalo na ’yung mga MSMEs, kulang talaga sila ng [especially the MSME’s who lack] financing to be able to tie them through. It’s something like this, if you were a successful entrepreneur in the local market and you wanted to go cross border, you will probably need first to increase your capacity,” Perlada said.“Second, you will need to invest in certain upgrades in machinery, altogether technology and probably communication. That cannot necessarily be funded organically from your own growth. So you will need some assistance in financing to be able to do that,” Perlada added.

PPP implementation

The PPP program is also seen as a challenge for 2016, particularly if the implementation is derailed by the change in administration. Experts also fear a re-

peat of the government’s failure to honor an existing contract or a won bidding, a danger that lurks when a new administration takes power.

“Whether the PPP projects, especially big-ticket items, accelerate or not, reviewed again or hastened their implementation, if these projects move faster, then there is a chance that the 6.5-percent forecast growth may be exceeded not only in 2016 but also in 2017,” Abola said.

Power

Power, both in terms of supply and cost, has been a perennial concern of businessmen in the country.

“Challenge pa din sa atin would be one that cuts across all industries, which is power. Power costs will still be there. It is somehow being mitigated by the lowering of oil prices, but to enable us to sustain that, we still really need to address availability, quantity and cost of power,” Perlada said.

A 2013 research by The Lantau Group, a leading strategy and economics consultancy in Asia Pacific, showed that out of 14 main cities in North and Southeast Asia, along with Australia and New Zealand, Manila is ranked third with the most expensive electricity prices, as well as in-grid charges. It also ranked third in generation cost.

Poverty reduction

Data from the National Anti-Poverty Commission show that the poverty incidence in the Philippines increased by 25.8 percent in 2014 primarily because

of Supertyphoon Yolanda. Because of this, 1 out of 5 Filipino families are now living below the poverty line.

At present, the PSA is formulating a multidimensional poverty index to envision how economic growth affects poverty in the country and to help plan poverty-reduction programs.

Other issues to be resolved

El Niño is already affecting the agriculture sector. “How bad will agriculture be hit? This is supposed to be the most severe El Niño and we had a bad one in 1998 when agricultural output plunged by 6 percent. Hopefully, the rains we were experiencing in November and December eases this major concern,” Abola said.

Peter Lee U, vice dean at the U&AP School of Economics, said infrastructure also remains as the main handicap to sustaining investment and economic growth.

He added that: “Reforming the income-tax system could help address inequality by at least rationalizing the personal income-tax brackets to account for inflation.”

“Overall, 2015 was a good year, driven by consumption. To achieve sustainable GDP growth, there has to be more focus on infrastructure investments, and investments in manufacturing and agriculture supply chains, from agricultural products to finished food products,” said Henry Schumacher, vice president for external affairs of the European Chamber of Commerce of the Philippines.

www.businessmirror.com.ph

BSP. . .

Continued from A1

Some estimates project growth in 2015 averaging 6.6 percent.

But no matter the sanguine outlook for 2016 and 2017, Tetangco acknowledged growth prospects this year have been rendered uncertain by a number of potential risks.

For instance, the crisis in the Middle East escalated as the New Year began, with the Kingdom of Saudi Arabia announcing it has severed diplomatic ties with the government of Iran after an attack on the Saudi Embassy in Tehran, Iran’s capital city.

The tension between the two nations has spread throughout the region and has generated apprehension over possible adverse impact on the Philippines, particularly a spike in oil price, as well as a decline in remittances sent home from the Middle East by millions of overseas Filipino Workers (OFWs).

Remittances have proven a key contributor to the country’s growth narrative the past many years and its role in ramping up growth-boosting consumption.

But Tetangco was quick to point out the impact of Middle East tensions on the $285-billion economy was likely limited.

“Analysts’ initial assessment is that the impact of the tensions on international oil prices at this time would be limited because the oil markets remain oversupplied,” Tetangco said.

“As for [OFW] remittances, we may see some temporary setbacks because of logistical difficulties and deployment may slow. But based on experience from past regional conflicts, our overseas workers are able to find ways of sending back money to their families here, and also work in other areas that may be safe from conflict,” he added.

Aside from apprehension over oil prices and remittance flows, Tetangco said on the domestic front, the Philippines may be facing possibly harsh and prolonged El Niño weather disruptions this year. The upcoming electoral exercises, the governor added, may “generate changes” that could change the global perception and investor sentiment about the Philippines.

On the international front, Tetangco pointed to the uncertain growth path of countries, such as China, the United States, the Euro area and Japan, as risk areas for 2016. The interest rate adjustments in the US was also seen to cause volatility in the local financial markets, especially on global capital flows, exchange-rate movements and their effect on domestic financial-asset valuations.

In its report on Tuesday, the ING Bank in Manila backed Tetangco’s views on the economy, saying growth prospects for 2016 have been moderated due to local, as well as global risks.

Amid the expected storms in 2016, Tetangco hinted broadly on keeping the policy rates steady when it convenes at the first monetary policy meeting of the year. “These still show no strong need to change our policy stance. Nevertheless, we will monitor developments and adjust as needed,” Tetangco said.

He also vowed to keep future decisions “data-dependent” and take into account the confluence of demand and supply factors.

ING Bank Manila economist Joey Cuyegkeng said monetary policy should remain prudent from 2016 all the way to 2017 despite risks to inflation.

“We expect BSP’s rate hike after the introduction of the interest rate corridor early in the second quarter,” Cuyegkeng said.

Inflation slowed to 1.4% in 2015 on cheaper oil. . . prices of corn, oil and rice; lower international oil prices of housing and other utilities,” Economic Planning Secretary Arsenio M. Balisacan said in a statement.

Compared to 2014 rates, the PSA said the annual average add-ons in all the commodity groups slowed down during the year with the indices for housing, water, electricity, gas and

other fuels and transport registering negative annual average rates of 1.3 percent and 0.1 percent, respectively.

“The annual average rate of the food alone

index in the Philippines decelerated to 2.6 percent in 2015. It was 7 percent a year ago,” the PSA said.

Excluding selected food and energy items,

Continued from A1

core inflation eased to 2.1 percent in 2015 from 3 percent posted a year ago.

In December alone, the increase in demand for food and energy pushed inflation to 1.5 percent from 1.1 percent in November.

“Price increases were largely due to the upbeat demand during the holiday season.

Inclement weather conditions, primarily Typhoon Nona, also adversely affected agricultural areas, hampering the production, delivery and transport of products, which, in turn, pushed up prices,” Balisacan said.

Economists said Filipinos should brace for higher prices in the coming months due to El Niño and the 2016 presidential elections.

They said inflation may average 2 percent to 3 percent this year.

“Inflation this year will be higher than last year given election spending, higher food costs due to drought, and possible spikes in oil prices in the second half of 2016,” University of Asia and the Pacific School of Economics Dean Cid Terosa said. “It could be higher than 2 percent, but not beyond 3 percent.”

Alvin Ang, senior fellow of Ateneo de Manila University’s economic forecasting unit Eagle Watch, said food and oil prices will be the “key drivers” of inflation this year. “[In 2015, inflation was low because of] base effect plus low oil prices. But this is not the case for 2016, it could be above 2 percent on average,” Ang said. “[The main drivers are] food prices and oil prices, as well as the El Niño.”

Former Budget Secretary Benjamin E. Diokno, for his part, said inflation would likely average 2 percent to 2.5 percent in 2016 on the back of the same reasons cited by Ang and Terosa. Diokno said overall inflation will be tame in 2016 as long as oil prices remain low and the impact of El Niño on food prices will be minimal.

“Inflation should be the least of policymakers’ worry,” Diokno said. “It is expected to be equally subdued in 2016 for as long as oil prices stay near rock bottom and El Niño in the first half of 2016 remains tame.”

An official of the Philippine Chamber of Commerce and Industry (PCCI) said low inflation is “good” for the country as this means that products are more affordable.

PCCI President George T. Barcelon said the average inflation rate recorded in 2015 “reflects the inclusiveness” of growth.

“If the inflation we have is propelled by domestic growth and not by external factors, then that is sustainable. Inflation should be at least in the middle of the [government’s] target range, not at the low-end [of the target],” Barcelon said. With report from Catherine N. Pillas

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Lawmakers weigh Mamasapano inquiry results to passage of BBL

L

By Butch Fernandez & Jovee de la Cruz

AWMAKERS are weighing the impact of the results of a Senate inquiry in the killing of 44 policemen in Mamasapano, Maguindanao, on the future of the Palacebacked Bangsamoro basic law (BBL).

Pro-administration and opposition senators said they are decoupling the reopening of a probe into the killing and whether the august body would approve or reject the BBL. In a text message from Singapore on Tuesday, Senate Deputy Minority Leader Vicente Sotto III allayed concerns over the potential setback of the Aquino administration as it awaits approval of the BBL before Congress finally adjourns by February.

“Not really,” Sotto’s message read when asked if the ongoing plenary deliberations would be affected by the reopening of the Mamasapano inquiry. Minority Leader Juan Ponce Enrile sought to reopen inquiry into the massacre of 44 Special Action Force (SAF) police commandos by Moro rebels in Mamasapano, Maguindanao.

Still, Sotto acknowledged there will be “some implications”, but did not elaborate.

“It could have some implications, but I think we should vote on the BBL soon,” Sotto said.

The Senate, he stressed, needs to make a decision “once and for all” to approve or reject the BBL that, if passed, would create a new entity to replace the existing Autonomous Region in Muslim Mindanao.

The BBL is currently under plenary deliberations at the House of Representatives.

“I cannot predict what will happen,” National Unity Party (NUP) Rep. Karlo B. Nograles of Davao said.

Nograles, who is a member of the special ad hoc panel on the BBL, said the encounter on January 25 last year is still endangering the passage of the BBL “as there are members of the Moro Islamic Liberation Front [MILF] involved in the incident.”

“The issue here is justice. How will

justice be served for the SAF members who were senselessly killed, and what about their family members?

Those responsible for the killing must be brought to justice,” Nograles said.

Nationalist People’s Coalition Rep. Sherwin T. Gatchalian of Valenzuela has said Congress has been under intense pressure to approve the BBL following the deaths of the policemen.

“It is like the BBL has been declared dead on arrival and has no chance of being resuscitated due to the slaughter of SAF personnel,” Gatchalian said.

Reports

NEGROS Occidental Rep. Jeffrey Ferrer said the House Committee on Public Order and Safety is still finalizing its report on the Mamasapano incident.

“We are still drafting the report and we’ll still have to meet again to finalize it,” Ferrer, who heads the committee, said. “As you know, there could be many vested interests; the elections are just around the corner. It [the report] could be used for whatever purpose.”

Both houses would adjourn in February to give way to the May 9 national and local election campaign.

Ferrer’s committee and the House Committee on Peace, Reconciliation and Unity have conducted three public hearings on the Mamasapano encounter last April.

However, the results of the investigation have not been released.

Sen. Grace Poe, on the other hand, said the Public Order Committee has scheduled the additional hearing on January 25.

“It is good that the Rules Committee gave a go signal that additional hearing/s can be called, in response to Minority Leader Enrile’s

Philippine Special Forces march past the grandstand during the 80th celebration of the founding of the Armed Forces of the Philippines at Clark Air Base in Pampanga province, north of Manila, on December 21, 2015. Various military vehicles and hardware were paraded on Monday to showcase the country’s military modernization program. AP/Bullit Marquez

If under our present system we cannot serve justice, how can we be assured that the Philippine justice system will work once the Bangsamoro basic law is passed?”

—Nograles request to call such, citing his personal information and possibly new evidence,” Poe said in an e-mail to Senate reporters.

Poe added that she welcomed the verdict of the Senate Rules Committee granting Enrile’s motion to allow senators to reopen the probe to hear new testimonies that will help clarify earlier findings on the massacre.

“Let it be stated as I manifested before, the new hearing/s will not affect or void our earlier findings. Our committee report has been signed by 21 members. Lagi namang may puwang kung may bagong ebidensya.”

Vows

MEMBERS of the so-called Saturday Group, who are former military and police officials, vowed to release their own report on the Mamasapano killings if the House committees would not release a joint report.

We will base the report on evidence, testimony, Congress committee hearing and report by the Philippine National Police (PNP), Liberal Party Rep. Romeo Acop of Antipolo said in Tagalog. “Hopefully may outline na before the January 25 anniversary [of the Mamasapano killings].” added

Antipolo, vice chairman of the Hou se Com m it tee on P ubl ic Order and Safety.

Party-list Rep. Samuel Pagdilao of ACT-CIS, a former police director, said they will release their own report “if we’re going to feel and see that there are indicators that the report of the joint House committees will not be released.”

Other members of the Saturday Group are Party-list Reps. Gary Alejano and Ashely Acedillo of the Magdalo and NUP Rep. Leopoldo Bataoil of Pangasinan.

The 44 policemen were killed as the PNP-SAF commandos attempted to serve warrants of arrest on Basit Usman and Zulkifli Bin Hir, alias “Marwan,” in Mamasapano, Maguindanao. Both had alleged links to the terrorist group Jemaah Islamiyah.

“Let it be stated as I manifested before, the new hearing/s will not affect or void our earlier findings,” Poe said on the reopening of the Senate inquiry into the Mamasapano massacre of 44 SAF police commandos

by Moro rebels in Maguindanao.

Megawide, partners complete first phase of classroom PPP

Q

By Lorenz S. Marasigan

UALITY school infrastructure greeted the students of around 9,296 classrooms in the regions of Ilocos, Central Luzon and Calabarzon this year, as the government and its private partners completed the first phase of their social infrastructure program last month.

This milestone also brings the number of completed public-private partnership (PPP) projects under the Aquino administration to three, making the government’s target of finishing five infrastructure facilities before President Aquino steps down from office this June more realistic.

Megawide Construction Corp., Citicorp Holdings Investment Inc. and Bright Future Educational Facilities Inc. took on the design, financing and construction of 9,296 one-story and two-story classrooms, including furniture and fixtures.

It took the private partners almost three years to complete the project, which is aimed at reducing the classroom backlog around the country.

The new classroom facilities have started to benefit over 400,000 students in Luzon.

Data from the PPP Center showed that the second phase of the social infrastructure program is still a long way from being completed, with only 1,690 classrooms completed out of the 4,370-classroom target under the contract.

The same document dated December 17 showed that around 33.91 percent, or 1,482

billion Automatic Fare Collection System and the P16.43-billion PPP for School Infrastructure Phase I.

Transport infra deal to be awarded

by March

classrooms, are undergoing construction, while 1,320 classrooms are still under preconstruction phases.

The project, which was awarded to the consortium of BSP & Co. Inc.-Vicente T. Lao Construction and Megawide in 2013, is expected to benefit the regions of Ilocos, Cagayan Valley, Central Luzon, Northern Mindanao and Caraga. Even at this phase, the government is still confident that it can meet its goal of completing five projects before the Aquino administration ends.

“We will meet the target of finishing five projects before our term ends,” PPP Center Executive Director Cosette V. Canilao said in an interview. “We still hope to award and sign 15 contracts, as we still have 13 projects currently under procurement. From the number, I think we can achieve that goal.”

As of today, the government and its private partners have completed three projects under the key infrastructure scheme of the current administration. These are the P2.2-billion Muntinlupa-Cavite Expressway, the P1.72-

The state has awarded 12 PPP contracts to date.

Such a figure is expected to reach 15 by June.

One of the three projects targeted to be awarded is the P298-million deal for the upgrading of the existing tech infrastructure of the Land Transportation Franchising and Regulatory Board (LTFRB).

“We have qualified IL&FS Technologies Ltd. and Sahi Technologies Unlimited Inc. for the first stage of the bidding. The timetable is to award it by March, so they could start working on building the software for a year and a half,” LTFRB Chairman Winston M. Ginez said on Tuesday. “It’s a priority project for us.”

The project intends to computerize the agency’s manual processes, as well as the development, supply and operationalization of its network infrastructure (hardware) and database and applications (software).

The computerization efforts will help clean up existing data of the agency, and enhance data collection and processing. It is also envisioned to effect integration within the board and among related agencies.

As a result, this will lessen the processing time for its transactions, promote and improve access to public information and provide channels for feedback.

Wednesday, January 6, 2016 A3

US Pacific Fleet. . .

Continued from A1

you know, the challenges that the region is facing right now,” Swift said.

“But I’m very comfortable with the resources I have.”

Peter Jennings, an expert at the Australian Strategic Policy Institute think tank said the issue in peacetime is whether there are enough American vessels to reassure friends and allies, and demonstrate US capacity to use power when it needs to.

In wartime, it comes down to whether enough platforms survive missile strikes to carry on their work, Jennings said.

“I think this is emerging as a serious long-term problem.”

The Pacific Fleet currently has 182 vessels, including combat ships like aircraft carriers, as well as auxiliary and logistics vessels, Spokesman Cmdr. Clay Doss said.

That compares to 192 nearly two decades ago.

Around the world, the Navy has 272 ships usable in combat or to support ships in combat, nearly 20 percent less than 1998. The current total includes 10 aircraft carriers.

Swift said he would rather have the Navy he has today—and its advanced technology—than the Navy of two decades ago.

He pointed to the USS Benfold, a guided missile destroyer upgraded with new ballistic missile defenses, as well as three new stealth destroyers, the DDG-1000, in the pipeline, as examples.

One consequence of a smaller fleet has been more time at sea. Retired Adm. Zap Zlatoper, who commanded Pacific Fleet in the 1990s, said sixmonth deployments used to be “sacrosanct,” as anything longer made it harder for the Navy to retain sailors.

Ships now deploy for an average of seven to nine months, though the Navy plans to lower this to seven.

Ship conditions have also suffered. The USS Essex left an exercise with Australia early in 2011 and skipped another with Thailand the following year because it developed mechanical problems after delaying maintenance to stay at sea.

Bryan Clark, a senior fellow at the Center for Strategic and Budgetary Assessments, a Washington think tank, said these are signs the status quo is unsustainable.

In a November report, Clark outlined alternatives: build more ships, though this would require money Congress may not give the Navy, or deploy less, though the Pentagon has been reluctant to accept less of an overseas presence.

The other choices: keep more ships at overseas bases where they would be closer to where they operate or mix up how ships deploy, for example, by sending fewer escorts with an aircraft carrier which would free some ships to operate separately.

China’s People’s Liberation Army Navy has more than 300 surface ships, submarines, amphibious ships and patrol craft, according to the Pentagon’s Asia-Pacific Maritime Security Strategy report released last August.

China’s coast guard and other maritime law-enforcement fleet, meanwhile, has upward of 200 ships —more than the combined fleets of neighbors with competing claims to tiny islands in the East and South China Seas.

The US Coast Guard has about 280 cutters, or vessels at least 65 feet in length, though they primarily operate stateside.

China has also grown more aggressive in asserting its claims to disputed territory. Since December 2013 it’s built what the US estimates to be 3,000 acres of artificial islands in the South China Sea using sand dredged from the ocean floor.

China has said the islands are meant to help ships, fishermen and disaster relief. The US says the islands will enable China to expand its maritime law enforcement and naval presence further south. It worries China could use them to disrupt sea traffic in the South China Sea, a thoroughfare for 30 percent of global maritime trade. Some of China’s ships are rudimentary, like its existing aircraft carrier. AP

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A4 Wednesday, January 6, 2016

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Farmers pin hopes on credit data submission to secure bank loans W

By David Cagahastian

ithout access to credit due to a lack of acceptable collateral and hopelessly exposed to many forms of risk, Filipino farmers seem entirely on their own. A possible exception is when they band together to form cooperatives, when they are more noticeably better off. But, time and again, hapless farmers incur painful losses because of devastating typhoons; they are almost always left to fend for their lonesome selves and fight their battles alone.

This is probably why farmers’ cooperatives are the most eager to provide the Credit Information Corp. (CIC) the credit histories of their members, if only to show the government-owned and -controlled corporation (GOCC) that farmers are worth the risk.

At a recent ceremony to thank financial institutions which were the earliest in submitting credit data in their possession to the CIC, one farmers’ cooperative made it to the list. Farmers’ cooperatives throughout the country are said to be more prompt than banks in providing CIC the credit data of their members.

‘Urgently needed’

The Taloy Norte Multi-Purpose Cooperative based in the Cordilleras can only provide small loans and death benefits to its 8,000 members, and needs the assistance of rural banks and private insurers to provide them with loans and crop insurance.

“We can provide for small loans and aid in cases of death, but most of our members do not have the financial links to banks that can give them access to credit for their livelihood, even though they are in good standing by our records,” Taloy Norte General Manager Deborah Palgue said.

Palgue hopes that the collection of the credit data by the CIC and the subsequent credit scores of their members would finally result in their members getting loans from private

5%

The measly marketpenetration rate achieved by government crop insurer Philippine Crop Insurance Corp.

rural banks. She said that even the government-owned Land Bank of the Philippines, which is mandated to serve farmers and fishermen, refuses to give them loans sans qualified collateral.

Although the lands being tilled by their members already have titles, Palgue said banks remain averse to accepting these as collaterals, particularly if there are problems with the certificate of title, such as when the land is registered under the name of a deceased relative instead of the current owner.

Aggravating the problem of farmers is the lack of a crop-insurance product, which makes it harder for farmers to recover following a devastating natural disaster. The uninsured find it difficult to recoup their production cost and are forced to turn to informal lenders so they can plant anew.

At the vegetable fields of Taloy

A farmer in Nueva Ecija carries a bundle of rice stalks. NONIE REYES

Norte’s members in Benguet province, crops were destroyed by Typhoon Lando (international code name Koppu) last October, but Palgue said the crops of their members were not insured because even the Philippine Crop Insurance Corp.

(PCIC) has deemed the location of their farmlands as “too risky.” The PCIC, another GOCC, is already the biggest provider of crop insurance in the country despite notching a measly market penetration rate of about 5 percent.

Palgue said the PCIC would not insure their crops against risks because their crops, most of which are planted on terraces made along the mountainsides of the Cordilleras, are “too risky” to insure because of the threat of landslides.

“I really just hope that they can have an insurance product that will be applicable to us because, right now, our members only have our cooperative, they don’t have access to the banks, they don’t have crop insurance,” she said.

Fernan Talamayan, public information officer of the CIC, said

many cooperatives are upbeat about the GOCC’s efforts to consolidate credit data, especially of their members.

Talamayan said this is the reason behind the special attention given by CIC President Jaime P. Garchiterona to cooperatives to drum up support for compliance with the submission of credit data.

The data can lower risks, as well as the cost of borrowing money.

Rural banks’ compliance

According to Rural Bankers Association of the Philippines (RBAP) Executive Director Vicente Mendoza, rural banks are submitting the credit data of their clients in the hopes of lowering the cost of providing and obtaining credit.

“Hopefully, it will bring down the cost of credit. In the past, the vetting system is very small, but with the collection of credit data, we can be able to know clients not only by their negative standing but also by their positive standing in repaying debt,” Mendoza said.

“Then the efforts can be toward

noncollateral lending,” he added.

Some of the bigger banks have also been complying with their submissions of credit data to the CIC, and six credit-card issuers had been recognized for their early submissions, namely, Metrobank Card, HSBC Philippines, EastWest Bank, UnionBank, RCBC Bankard, and Security Bank.

Operational by year-end

At the rate of submissions by the banks, Garchitorena said he expects the credit-reporting system to be operational by late 2016, or, at the latest, by early 2017.

The gathering of credit data is expected to be completed this year and the accreditation of special accessing entities—those which will be accredited and granted access to the CIC’s consolidated basic credit data for the purpose of generating credit scores of bank clients—had already passed the first phase. Further screenings are expected to be completed this year to come up with the initial list of special accessing entities.

This means that by 2017, the credit-reporting system would have already been operational, and banks may be able to use, through the accredited special accessing entities, the credit scores that are based from a more comprehensive and accurate database than those that banks are currently using.

Borrowers may also be able to find out from the CIC their own credit standing as the banks see it.

Having the more comprehensive and accurate credit scores would then translate to lower costs for banks in their lending activities, since banks would have a better view of a particular borrower’s credit transactions and a better idea of whether he would be at risk of defaulting on a loan.

For consumers, a consolidated credit database is also beneficial, such that it would promote competition among lenders to offer a wider range of products and services, and will allow those borrowers to correct any erroneous data in their credit record which they probably don’t know about.

Lawmaker tells DOTC, LTFRB: Go slow on old jeepney phaseout plan

By Jovee Marie N. Dela Cruz

T

he chairman of the House Committee on Metro Manila Development on Tuesday asked the national government to study the impact of a proposal raised by the Department of Transportation and Communications (DOTC) and the Land Transportation Franchising and Regulatory Board (LTFRB) to phase out old jeepney units that have been on the road for more than 15 years.

Liberal Party Rep. Winston Castelo of Quezon City, panel chairman, warned that hundreds of thousands of jeepney drivers and operators will be affected if the phaseout plan is implemented.

“The socioeconomic impact should be addressed first before we can phase out the old jeepneys,” Castelo said in a text message.

Pinagkaisang Samahan ng mga Tsuper at Operator Nationwide President George San Mateo said the proposal to phase out old jeepneys will af-

fect the livelihood of at least 600,000 jeepney drivers and more than 250,000 jeepney operators nationwide.

Last Monday jeepney drivers and operators held a protest in front of the DOTC office in Ortigas and LTO office in Quezon City to express their opposition to the Aquino administration’s plan to phase out public-utility jeepneys that are at least 15 years old.

Defending the government’s phaseout proposal, LTFRB Chairman Winston Ginez said the move “is part of the modernization program of the transport department, but it is still a plan.”

He added that the LTFRB, supported by the DOTC under Secretary Joseph Emilio A. Abaya, has already drafted an order calling for the phasing out of old jeepneys.

“For 2016, jeepeney operators may voluntarily phase their units out. Under the draft department order, we will start the actual phaseout of the old units by 2017,” Ginez said in an interview with the BusinessMirror

600,000

Estimated number of drivers, operators to be affected nationwide by the Aquino administration’s old jeepney phaseout plan on Tuesday.

For his part, the Alliance of Concerned Transport Organizations President Efren de Luna

said jeepney drivers and operators should be given more time to prepare, and that loans should be extended to affected parties to buy ejeepneys if the government wants to push through with its jeepney modernization program.

The jeepney phaseout scheme, according to the labor group Kilusang Mayo Uno (KMU), is not a modernization program but rather a “corporatization and monopolization” of an important sector of the country’s transportation system.

“We say no to the jeepney phaseout scheme. It will result in the loss of livelihoods for hundreds of thousands of jeepney drivers and operators making a living out of the 300,000 jeepney units in the country,” the KMU said.

“It will subject a portion of jeepney drivers to exploitative conditions under the so-called fleet management scheme. It will definitely result in higher fares for passengers who will shoulder the cost of new vehicles,” it added.

With Lorenz S. Marasigan

jeepney units that have been on the road for more than 15 years will be affected by the phaseout plan. roy domingo

AseanWednesday news@businessmirror.com.ph

BusinessMirror

Wednesday, January 6, 2016 A5

Indonesia’s fuel-price cut spurs consumer optimism

I

ndonesia’s rupiah rose for the first time in six days, as the government’s latest fuel-price cuts spurred optimism that consumer spending will increase and help the economy.

The rupiah strengthened 0.9 percent, the most since December 21, to 13,801 a dollar as of 12:55 p.m. in Jakarta, according to prices from local banks. The currency is the best-performing in Asia in the past three months with a gain of 5 percent, as overseas investors boosted holdings of Indonesian debt to a record.

The price of regulated diesel will be reduced by 5 percent to 5,650 rupiah a liter effective Tuesday, while gasoline rates will be lowered by at least 3 percent, Dwi Soetjipto, president director of state energy company Pertamina, told reporters in Jakarta. These are in addition to cuts of 11 percent for diesel nationwide and 2 percent for gasoline in some regions announced last December 23.

5%

Rupiah’s appreciation in past three months, making it Asia’s bestperforming currency

“Inflation will be lower, and this will have a positive impact on purchasing power especially,” said Leo Rinaldy, an economist at PT Mandiri Sekuritas in Jakarta. “The government cut the price because of lower oil prices and a more stable exchange rate. The total reductions in the fuel prices are bigger than what we expected.”

Boosting growth

President Joko Widodo is seeking to spur growth in Southeast Asia’s largest economy at a time when commodity-export revenues are falling short of projections. The economy expanded an estimated 4.73 percent from a year earlier in 2015, missing the 5.7-percent target set in the state budget, the Finance Ministry said on Sunday.

Overseas funds increased their holdings of rupiah government bonds by 10 trillion rupiah ($724 million) to a record 558.5 trillion rupiah in December, Finance Ministry data show. The yield on government bonds due September 2026 was little changed at 8.83 percent in Jakarta, according to the Inter Dealer Market Association.

The two-year yield was also steady at 8.64 percent. Bloomberg News

Suu Kyi: Incoming government to prioritize peace in Myanmar

A supporter of Myanmar’s National League for Democracy party braves rain outside the NLD headquarters in Yangon, Myanmar. AP

A

ung San Suu Kyi said on Monday that building peace will be the first priority of her prodemocracy party’s incoming administration when it replaces Myanmar’s military-backed government soon.

Suu Kyi spoke at the headquarters of her National League for Democracy (NLD) to mark the nation’s Independence Day. She said the incoming government would seek to improve a cease-fire agreement the outgoing regime signed last October with eight ethnic minorities that have long fought for greater autonomy.

The ethnic rebellions remain a threat to the country’s unity, since several larger ethnic guerrilla armies declined to sign the agreement. Fighting persists in some border areas. Though largely an agreement to keep talking, the agreement could pave the way for a more comprehensive political settlement in the future.

“The first responsibility of the next government is to build peace. We will organize an effective peace conference to improve the recent ceasefire agreement and we will urge widespread participation,” she said in a speech lasting almost 15 minutes, her first major public address since the November 8 election victory.

The NLD secured enough parliamentary seats in the last elections to oust a military-backed party that has been in power for five years. A clause in the 2008 military-directed constitution bars her

from the presidency, but she has vowed to be the country’s leader by proxy.

Despite the NLD’s landslide victory, most analysts agree the party must have the support of the military establishment to be able to govern. By law, the military still has a quarter of the seats in Parliament, giving it veto power over all constitutional amendments. It also has a grip on all key security portfolios.

The transition will take place in February at the earliest, with Parliament’s military bloc and the largest party in both houses—the NLD—proposing three candidates, one of whom will be elected president and the others becoming vice presidents.

The president will then form a Cabinet.

Suu Kyi has met several times since the polls with key members of the army and the outgoing military government, and all parties have made conciliatory statements about making a smooth transition of government.

“I would like to add again that our government will be a government based on a policy of national reconciliation and we will try to stick with that,” Suu Kyi said on Monday.

In a statement supporting her speech, her party executive committee said it was time to go forward and “build a peaceful, democratic federal union together.”

It added: “We must learn from history and turn the page from the legacy of previous governments.” AP

AP

We will organize an effective peace conference to improve the recent cease-fire agreement and we will urge widespread participation.”

–Suu Kyi

The W

Business

A6 Wednesday, January 6, 2016 | Editor: Lyn Resurreccion

Saudi showdown with Iran puts strain on

T

HE alliance between the US and Saudi Arabia—an almost century-old friendship at the heart of American policy in the region— is coming under growing strain as the Sunni-led kingdom engages in an escalating Cold War with Shiite Iran.

With President Barack Obama entering his final year in office, tensions between the regional powers put at risk Obama’s initiatives in the Mideast, from ending the war in Syria to combating Islamic State (IS) terrorists and improving relations with Iran.

In each, the US counts on Saudi support, or at least acquiescence.

Now the Saudi breach with Iran is being viewed by some as a deliberate attempt to undermine Obama’s broader efforts, at a moment when many of those plans are faltering and Saudi assistance is crucial, particularly in Syria.

“This is a power play,” said Vali Nasr, a former State Department adviser. “The Saudis are showing the US that they are capable of dominating regional politics.”

While the US usually has offered only muted criticism of the kingdom’s human-rights record, administration officials emphasized on Monday that they had urged against plans for mass executions, including the killing of cleric Nimr al-Nimr, a critic of the kingdom’s treatment of its Shiite minority.

The Saudis went ahead with the executions anyway. Protesters in Iran responded by setting fire to the Saudi embassy in Tehran, and the Saudis broke off diplomatic relations with Iran. The result is the biggest meltdown between the two regional powers in almost three decades.

Saudi Arabia-Iran tensions

THE Saudis may have executed al-Nimr “to stir the pot a bit in the last year of the Obama presidency, when he may be looking to fortify the Iran deal and leave his mark on the region,” said Brett Bruen, former director of global engagement for Obama’s National Security Council and now president of the Global Situation Room consulting firm. “This may be an attempt by the Saudis to try to disrupt those efforts.”

Saudi Arabia’s relationship with the US already had been strained by Obama’s refusal to back Egyptian President Hosni Mubarak in the Arab Spring protests that toppled him, perceptions the US hasn’t pressed hard enough for Syrian President Bashar al-Assad’s ouster and conclusion of the US- led nuclear agreement with Iran.

While the Iranian deal will probably proceed, bolstered by the Obama administration’s support and the interest of Iran’s trading partners in resuming economic ties, the tensions are an obstacle to broader improvements in relations between the US and Iran. The Saudis and their Sunni allies went along with the nuclear accord reluctantly, warning that Iran remained intent on undermining them and supporting terrorism.

Presidential politics

IN the US, the latest events in the Middle East will add fodder to the narrative of Republican presidential candidates that Obama has been an unsuccessful president, said Paul Pillar, a senior fellow at Georgetown University’s Center for Security Studies and a former senior Central Intelligence Agency official.

“It will be folded under the overall theme that the Middle East has become a greater mess under Obama, and here’s an indication of how big the mess has gotten,” he said. The widening rift between Iran and Saudi Arabia worsens

100 The estimated number of years of friendship between US and Saudi Arabia

sectarian fault lines throughout a region where tensions between Sunni and Shiite populations drive many local conflicts.

“The Obama administration has kind of lost control of the dialogue, the agenda in the Middle East right now,” said Karen Young, a senior fellow at the Arab States Gulf Institute. “We’re not playing the deciding role. I think what’s happening with Iran and Saudi Arabia right now is they’re both realizing they can be spoilers.”

Syria talks

PROSPECTS for a political settlement in Syria are now “very dim,” said Edward Djerejian, a former assistant secretary of state for Middle East affairs and ambassador to Syria, who’s now director of Rice University’s Baker Institute for Public Policy. “There was at least some modicum of progress. Now that is put very much in doubt.”

Saudi Arabia, which has aided Sunni rebel groups in Syria, and Iran, a military backer of Assad’s regime there, are key parties in international talks that seek to bring to the negotiating table the Syrian government and its opponents.

The Obama administration has said such an accord is needed so that all parties can concentrate on fighting IS terrorists. Obama’s strategy in Syria and Iraq depends on building governing institutions that are credible to both Sunnis and Shiites.

“This will make it much more difficult to show progress” against IS, according to Nasr, who’s dean of the Johns Hopkins University School of Advanced International Studies.

“Now our terrorism policy becomes like pouring water into sand. It’s just not going to go anywhere.”

In Iraq, the sectarian tensions will make it harder for the Shiitedominated government to build on the recapture of Ramadi to regain control of other Sunni-majority areas of the country, large sections of which are now held by IS. It may also make it harder to halt a resurgence of the Taliban in Afghanistan because cooperation from neighboring Iran is crucial, Djerejian said.

“The US is stuck in a region that it can’t fix and it can’t leave,” said Aaron David Miller, a vice president of the Wilson Institute and former Middle East adviser to Republican and Democratic administrations.

“It’s trapped by unreliable allies pursuing agendas that conflict with the United States and problems that simply are not amenable to resolution by conventional American military or political strategies.”

Despite the new complications, the White House isn’t likely to make any major change in its approach to the region during the limited time before a new president takes office, Miller said.

“The arc of this administration’s policies in the Middle East is set,” Miller said. Bloomberg News

AN Iranian woman holds up a poster on Monday showing Sheikh Nimr al-Nimr, a prominent opposition Saudi Shiite cleric who was executed last week by Saudi Arabia in Tehran, Iran. AP/VAHID SALEMI

IRANIAN men take a selfie with a poster of Sheikh Nimr al-Nimr at the conclusion of a rally protesting his execution in Tehran, Iran, on Monday. AP/VAHID SALEMI

IRAN a ral

World

sMirror

news@businessmirror.com.ph | Wednesday, January 6, 2016

A7

n decades-old US ties Saudi allies cutting ties

NIAN demonstrators chant slogans and hold anti-Saudi placards and flags during lly to protest the execution by Saudi Arabia of Sheikh Nimr al-Nimr. AP/VAHID SALEMI

with Iran amid tensions D

UBAI, United Arab Emirates—Allies of Saudi Arabia followed the kingdom’s lead on Monday and scaled back diplomatic ties to Iran after the ransacking of Saudi diplomatic missions in the Islamic Republic, violence sparked by the Saudi execution of a prominent Shiite cleric.

Sudan and the tiny island kingdom of Bahrain said they would sever ties with Iran, as Saudi Arabia did late on Sunday. Within hours, the United Arab Emirates announced it would downgrade ties to Tehran to the level of the charge d’affaires, while other nations issued statements criticizing Iran.

The concerted campaign by Sunni-ruled Saudi Arabia highlights the aggressive stance King Salman and his son, Deputy Crown Prince Mohammed bin Salman, have adopted in confronting Iran, a longtime regional rival.

“What we have seen during the last 24 hours is unprecedented....

It shows you Saudi Arabia has had enough of Iran and wants to send a message,” said Abdulkhaleq Abdullah, a political science professor at Emirates University. “This is the Saudis saying: ‘There is no limit to how far we will go.’”

The standoff began on Saturday, when Saudi Arabia executed Shiite cleric Sheikh Nimr al-Nimr and 46 others convicted of terror charges— the largest mass execution carried out by the kingdom since 1980.

Al-Nimr, a central figure in the Arab Spring-inspired protests by Saudi Arabia’s Shiite minority, long denied advocating violence.

News of his execution has sparked Shiite protests from Bahrain to Pakistan. In Iran, protesters attacked the Saudi Embassy in Tehran and its consulate in Mashhad. Late on Sunday Saudi Foreign Minister Adel al-Jubeir announced the kingdom would sever its relations with Iran over the assaults, giving Iranian diplomatic personnel 48 hours to leave his country.

On Monday Saudi Arabia’s civil aviation authority suspended all flights to and from Iran, saying the move was based on the kingdom’s cutting of diplomatic ties.

Iran expressed “regret” over the attacks on the diplomatic missions in a letter to the United Nations on

Monday and vowed to arrest those responsible. In the letter, obtained by the Associated Press, Iran’s UN envoy Gholamali Khoshroo said more than 40 protesters have been arrested and that authorities are searching for other suspects.

In response to a Saudi letter, the UN Security Council late on Monday strongly condemned the attacks by Iranian protesters on Saudi diplomatic posts. The council statement, agreed to after hours of negotiations, made no mention of the Saudi executions or the rupture in Saudi-Iranian relations.

Saudi Arabia and Iran have long vied for influence in the Middle East. Their rivalry deepened following the toppling of Saddam Hussein in Iraq and the chaos of the Arab Spring, which gave rise to proxy wars in Syria and Yemen.

An early battleground was Bahrain, where the Shiite majority staged mass protests in 2011 demanding political reforms from the Sunni monarchy. Saudi Arabia and the Emirates sent in troops to help quash the revolt, viewing it as an Iranian bid to expand its influence.

Bahraini officials since have accused Iran of training militants and attempting to smuggle arms into the country, which hosts the US Navy’s 5th Fleet. Last October Bahrain ordered the acting Iranian charge d’affaires to leave within 72 hours and recalled its own ambassador after alleging that Iran sponsored “subversion” and “terrorism” and funneled arms to militants.

Sudan, which has been looking to Saudi Arabia for aid since the secession of oil-rich South Sudan in 2011, on Monday announced an “immediate severing of ties” over the diplomatic mission attacks.

Sudan once was closer to Iran, but in recent years has tilted toward Saudi Arabia, and has contributed forces to the Saudi-led coalition battling Shiite rebels in Yemen.

The UAE, a country of seven emirates, has a long trading history with Iran and is home to many ethnic Iranians. It said it would reduce the number of diplomats in Iran and recall its ambassador “in the light of Iran’s continuous interference in the internal affairs of Gulf and Arab states, which has reached unprecedented levels.”

Saudi Arabia had previously severed ties with Iran from 1988 to 1991 over rioting during the hajj in 1987 and Iran’s attacks on shipping in the Persian Gulf.

That diplomatic freeze saw Iran halt pilgrims from attending the hajj in Saudi Arabia, something required of all able Muslims once in their lives.

Iranian lawmaker Mohammad Ali Esfanani, spokesman of the Judicial and Legal Committee, said security issues and the fact that Iranian pilgrims wouldn’t have consular protection inside the kingdom made halting the pilgrimage for Iranians likely, according to the semi-official Isna news agency.

World powers have sought to calm the tensions. On Monday Germany called on both sides to mend ties, while Russian state news agency RIA Novosti quoted an unnamed senior diplomat as saying Moscow is ready to act as a mediator.

The UN envoy for Syria, Staffan de Mistura, was en route to Riyadh on Monday with plans to later visit Tehran. Iran, a staunch supporter of embattled Syrian President Bashar al-Assad, and Saudi Arabia, a key backer of the opposition, have participated in three rounds of international talks aimed at ending the conflict. De Mistura has set a January 25 target date for a fourth round of talks.

The White House urged Saudi Arabia and Iran to not let their dispute derail efforts to end the Syrian civil war.

“Hopefully they will continue to engage,” White House Spokesman Josh Earnest said. “It is so clearly in the interests of both countries to advance a political solution to the situation inside of Syria.”

Saudi Arabian UN Ambassador Abdallah al-Moualimi said late on Monday that Saudi Arabia will attend the January 25 talks in Geneva on Syria. Iran has not said whether it will attend. Meanwhile, al-Nimr’s family is holding three days of mourning at a mosque in alAwamiya village in the kingdom’s al-Qatif region in predominantly Shiite eastern Saudi Arabia. Authorities have already buried the sheikh’s body in an undisclosed cemetery, his family said. AP

TO FIGHT THE WORLD’S WORST AIR POLLUTION

New Delhi forces cars off the roads

N

EW DELHI—Like many middle-class professionals in this car-crazed capital, Tarun Thawani drives to work every day, both for comfort and because he usually has piles of documents to carry. But on Monday the accountant left his car and bulky briefcase at home and wedged into the back of a motorized rickshaw for his 10mile commute as New Delhi tries to curb the use of private vehicles.

“It was inconvenient,” said Thawani, 32. “But in the long term, hopefully, this will be something good.” The Indian capital is counting on cooperation from residents such as Thawani as it becomes the latest city to force cars off the road to reduce its air pollution, which by most measures now, is the worst of any major city in the world.

For the first two weeks of the year, private cars with even-numbered license plates are allowed on the roads only on even-numbered dates, and those with odd-numbered plates on odd dates. The restrictions have noticeably reduced traffic in a city with 9 million cars, more than double that of a decade ago. Like Beijing, Mexico City, Paris and other cities that have tried similar measures, officials in New Delhi describe the two-week trial as an emergency intervention to

fight the capital’s foul air, a dusky gray haze that makes visitors feel like they’re wearing permanently fogged-up sunglasses.

In 2014 the World Health Organization found New Delhi’s air to be the dirtiest of 1,600 cities it studied. Scientists blame the high levels of pollutants—especially fine PM 2.5 particles measuring 2.5 microns across, which can burrow deep into the lungs—for thousands of deaths a year. The winter months are particularly noxious in Delhi, when smoke from wood fires, burning of agricultural land on the city’s outskirts, fumes from diesel generators and dust from construction sites mix and settle above the low-lying capital.

Limiting vehicles alone is unlikely to improve air quality significantly, but supporters of the plan say it has helped raise awareness of the problem. “Transport may be only a 15-percent to 20-percent chunk of the problem at the moment, but it’s the chunk we can address right away,” said Bhargav Krishna, a researcher with the Public Health Foundation of India. “There’s a recognition within the populace that some amount of personal action and responsibility is needed to address this issue.”

After the January 1 holiday and

the weekend, Monday, the first full working day, marked the biggest test of the initiative. City officials deployed 3,000 additional buses, many borrowed from public schools that have scheduled a twoweek holiday as part of the trial.

Thousands of traffic police, volunteers and hidden cameras were posted across the smoggy city to look for odd-numbered violators, who would be subject to $30 fines.

Officials and residents reported widespread compliance. Delhi officials carpooled, rode bikes or took public transit to work. Uber and other taxi apps encouraged customers to share rides.

Buses were jammed with passengers, but unlike normal days when they are stuck in traffic for long stretches, most were able to complete their routes. Experts hoped this would demonstrate the need to improve a public transit system that is plagued by overcrowding and a chronic shortage of buses.

“With more free-flowing traffic, the efficiency of buses, taxis and rickshaws has improved for the majority of the commuting masses,” said Anumita Roy Chowdhury, executive director for research and advocacy at the Center for Science and Environment, a New Delhi think tank. Los Angeles Times/TNS

The World BusinessMirror

news@businessmirror.com.ph

Chemistry periodic table gets four new superheavy man-made elements

T

HE periodic table is about to get a little bit longer, thanks to the addition of four superheavy elements.

The discoveries of elements 113, 115, 117 and 118 were confirmed last week by the International Union of Pure and Applied Chemistry. The group vets the man-made elements seeking a permanent spot on the chart that adorns chemistry classrooms around the world.

The new elements are known as superheavy elements because the nuclei of their atoms are so enormous. Element 118, for example, is the heaviest element to date, with 118 protons alongside 176 neutrons.

Elements of this size are not routinely found in nature, and it can take years to make them in specialized laboratories.

“Probably the only other place where they might exist in a short period of time could be a supernova, where you have so much energy and so many particles that are really heavily concentrated,” said Dawn Shaughnessy, the principal investigator for the Heavy Element Group at Lawrence Livermore National Laboratory, which had a hand in three of the discoveries.

Superheavy elements are also highly unstable, existing for just a fraction of a second before they begin to decay.

Scientists never observe these elements directly. Rather, they know they briefly existed because they are able to measure their decay products.

The heaviest known elements are made by smashing two particles together and hoping they will stick. It’s a probability game with extremely long odds.

Scientists first create a target out of a carefully chosen atom with a particular number of protons and neutrons—a process that can take months. Then they purify it and bombard it with another specialized atom that they think has the best chance of recombining with the target.

“It’s really hard to smash two things together and get them to stick,” Shaughnessy said. “There is so much positive charge— they want to repel each other.”

It takes several months to try this smashing experiment roughly 10 quintillion times (10 followed by 18 zeros). If just one of those attempts works, the experiment is considered a success.

“And we’re not always successful,” she said. At most, it will work about three times in 10 quintillion tries, she said.

There are only a few of laboratories around the world equipped to do this work. The experiments generate so much data that supercomputers are required to sift through it all and search for the telltale signs of a successful mash-up.

Elements 115, 117 and 118 were created in Dubna, Russia, at the Joint Institute for Nuclear Research. Scientists from Lawrence Livermore worked on all three discoveries, and the consortium that created element 117 also included researchers from the Oak Ridge National Laboratory in Tennessee and the University of Nevada, Las Vegas.

The international chemistry body credited a Japanese group with the discovery of element 113. Led by Kosuke Morita of Riken, they are the first Asian scientists to find a new element.

Morita and his team spent several years searching for conclusive proof of element 113. During that time, whenever Morita visited a Japanese shrine, he gave an offering of ¥113.

“It’s not really a question of whether I believed it or not,” Morita told Asian Scientist Magazine. “The reason I did it is that I wanted to know that I had done everything humanly possible to get credit for the discovery of the element.”

Until now, these elements have been known by the generic Latin names ununtrium, ununpentium, ununseptium and ununoctium. Their confirmation paves the way for them to get permanent names. Traditionally, that honor falls to the researchers who first found them.

The team from Lawrence Livermore and their Russian colleagues had previously named element 116 Livermorium in honor of the Northern California lab. No word on what 115, 117 and 118 might be called.

With last week’s announcement, 26 elements have been added to the periodic table since 1940. But Shaughnessy said her team isn’t done.

The scientists will continue trying to make heavier elements until they hit a wall where there are just too many protons that they won’t stick together.

“These super-heavy elements help us understand how the nucleus functions, and redefines our ideas of matter and how it behaves,” she said. “We’re really studying the physics of what the extreme limits of matter might be.” Los Angeles Times/TNS

Wednesday, January 6, 2016

A8

Obama’s gun-control plan shows limits of initiative sans Congress 230

The number of new examiners the Federal Bureau of Investigation will hire to process background check of gun sellers

MIKE HOWSE (left) helps David Foley as he shops for a handgun at the Spring Guns and Ammo store on Monday in Spring, Texas. President Barack Obama defended his plans to tighten the nation’s gun-control restrictions on his own, insisting on Monday that the steps he’ll announce fall within his legal authority and uphold the constitutional right to own a gun. AP/DAVID J. PHILLIP

W

ASHINGTON—President Barack Obama’s plan for keeping guns away from those who shouldn’t have them falls far short of what he’d hoped to accomplish through legislation, after a massacre at Sandy Hook Elementary School shook the country in 2012.

Yet, even the more modest steps Obama would announce on Tuesday rely on murky interpretations of existing law that could be easily reversed by his successor.

Obama’s package of executive actions aims to curb what he’s described as a scourge of gun violence in the US, punctuated by appalling mass shootings in Newtown, Connecticut; Charleston, South Carolina; and Tucson, Arizona, among many others.

After Newtown, Obama sought farreaching, bipartisan legislation that

went beyond background checks.

When the effort collapsed in the Senate, the White House said it was thoroughly researching the president’s powers to identify every legal step he could take on his own.

A more recent spate of gun-related atrocities, including in San Bernardino, California, have spurred the administration to give the issue another look, as Obama seeks to make good on a policy issue that he’s elevated time and again but has failed until now to advance.

$500M The White House budget to improve mentalhealth care.

At the centerpiece of Obama’s plan, to be unveiled at a White House event with gun violence victims, is a broader definition of gun dealers that the administration hopes will expand the number of gun sales subject to background checks.

At gun shows, web sites and flea markets, sellers often skirt that requirement by declining to register as licensed dealers, but officials said new federal guidance would clarify that it applies to anyone “in the business” of selling firearms.

They put sellers on notice that the government planned to beef up enforcement—including with 230 new examiners the Federal Bureau of Investigation will hire to process background checks.

“This is not going to solve every violent crime in this country,” Obama said. Yet, he said the steps would “potentially save lives and spare families the pain of these extraordinary losses.”

Attorney General Loretta Lynch and other top officials declined to explain why Obama hadn’t taken these steps years ago and whether the administration had contemplated these actions in the past but determined Obama didn’t have the authority.

“We’re very comfortable that the president can legally take these actions now,” Lynch said.

After formally announcing the package on Tuesday, Obama planned to continue the weeklong push to promote the gun effort with a prime time, televised town hall discussion on Thursday. The initiative also promised to be prominent in Obama’s final State of the Union address to Congress next week.

Under current law, only federally licensed gun dealers must conduct background checks on buyers, but many who sell guns at flea markets, on web sites or in other informal set-

tings don’t register as dealers. Guncontrol advocates say that loophole is exploited to skirt the background check requirement.

Now, the Justice Department’s Bureau of Alcohol, Tobacco, Firearms and Explosives will issue updated guidance that says the government should deem anyone “in the business” of selling guns to be a dealer, regardless of where he or she sells the guns.

To that end, the government will consider other factors, including how many guns a person sells, how frequently, and whether those guns are sold for a profit.

The background check provision rests in the murky realm of agency “guidelines,” which carry less weight than formally issued federal regulations and can easily be rescinded.

Lynch said the administration chose to clarify guidelines because it allowed the policies to be implemented immediately. Left unsaid was the fact that developing regulations would have dragged out likely until Obama’s presidency ends and would generate more opportunities for Republicans to intervene.

Democratic presidential front-runner Hillary Clinton, at a rally in Iowa, said she was proud of Obama’s efforts, but warned that the next president could easily undo his changes.

“I won’t wipe it away,” Clinton said.

Republicans were quick to accuse Obama of gross overreach. Many of the Republican presidential candidates have vowed to rip up new Obama gun restrictions upon taking office, and some lawmakers are contemplating withholding Justice Department funds if it tries to implement them.

“I will work with my colleagues to respond appropriately to ensure the Constitution is respected,” Republican Sen. Bob Corker said.

The White House said it planned to ask Congress for $500 million to improve mental-health care. Obama also issued a memorandum directing federal agencies to conduct or sponsor research into smart gun technology that reduces the risk of accidental gun discharges. AP

VENEZUELA OPPOSITION ELECTS LEADER BEFORE CONGRESS TAKEOVER

C

ARACAS, Venezuela—Venezuela’s newly elected opposition lawmakers have chosen Henry Ramos Allup as president of Congress, as they prepare to take power with a legislative majority in the recession-battered country for the first time in 16 years.

The legislators, who are set to take control of Congress on Tuesday, voted in a secret ballot, said Jesus “Chuo” Torrealba, secretary of the antigovernment coalition. Ramos Allup, 72, heads the Democratic Action political party that is part of the coalition.

“We’re going to legislate,” Ramos Allup said on Monday, promising to probe allegations of corruption within President Nicolas Maduro’s government. “We’re going to regulate. Many ministers and government officials will be called in for questioning.”

Opposition leaders want to give Maduro six months to take painful economic measures or face removal. The government denies allegations of corruption and says the opposition wants to turn back its accomplishments in social policy and use its majority to regain the presidency.

“Maduro should be thinking about the possibility of resigning,” Ramos Allup said.

“If that’s one way to solve the political crisis, it shouldn’t be ruled out.”

Congress will offer a “democratic and

CONG. Henry Ramos Allup gestures during a news conference at his office in Caracas, Venezuela, on Monday.

The newly elected opposition majority voted to make Allup the president of the National Assembly when it is seated on Tuesday. AP/FERNANDO LLANO constitutional solution” for a change in government in the first quarter, he said on Sunday, after being selected as head of Congress.

The outgoing congressional leadership who supports Maduro’s government has sought to undermine the new legislature.

They named more than a dozen justices to the Supreme Court, which subsequently stripped the opposition of a two-thirds supermajority by barring three of its newly elected lawmakers from taking office.

The high court is set to rule on the cases of four others.

A supermajority would give the opposition powers to change the Constitution, impeach ministers and push for a referendum to remove the president.

To make matters worse for the embattled government, oil prices fell in December to their lowest level since 2004. That deprives the Maduro administration of funds and threatens to exacerbate shortages of everything from corn flour to birthcontrol pills. Oil accounts for 95 percent of Venezuela’s exports.

The International Monetary Fund estimates the economy contracted 10 percent in 2015, while economists polled by Bloomberg saw consumer prices rising by about 124 percent. The central bank hasn’t published data on inflation or gross domestic product since the end of 2014.

Venezuela’s dollar bonds fell on Monday, as traders speculated there would be confrontations when the opposition takes power in Congress on Tuesday. The yield on the benchmark note due in 2027 rose 21 basis points to 24.8 percent at 10:03 a.m. in New York.

In the run-up to congressional elections, Democratic Action Party candidate Luis Manuel Diaz was gunned down at an event attended by Ramos Allup, who accused government supporters of the murder.

Maduro said the killing was committed

by criminal groups.

Ramos Allup led his party even before former President Hugo Chavez first won election in 1998. When the opposition gathered signatures in 2003 for a referendum on Chavez, Ramos Allup claimed the leader would be “swept out by a landslide.”

Months later, Chavez won with 59 percent of the vote.

As Chavez amassed power, Ramos Allup backed the opposition’s call for a boycott of the 2005 congressional elections, saying the country’s electoral council was biased. The government went on to win all 167 seats.

The opposition is now calling on supporters to accompany newly elected lawmakers on Tuesday in a short march to Congress as it takes power. Opposition coalition secretary Torrealba vowed over the weekend that all 112 of its deputies, including the three barred by the high court, will be sworn in.

Jorge Piedrahita, the CEO at Torino Capital Llc in New York, said there’s speculation government elites would exit Venezuela if political turmoil increases.

“Several high-ranking officials of Chavismo have contingency plans in place to leave the country,” he wrote in a note to clients, without saying where he obtained the information. Bloomberg News/TNS

A9

The World BusinessMirror

Wednesday, January 6, 2016

news@businessmirror.com.ph

Deliberate acts cause more airline deaths than crashes

W

ASHINGTON—There were more airline deaths worldwide due to deliberate acts in 2015 than to accidental air crashes for the second year in a row, according to an industry tally.

There were only eight accidental airline crashes last year accounting for 161 passenger and crew deaths—the fewest crashes and deaths since at least 1946.

The tally by Flightglobal, an aviation news and industry data company, excludes a German airliner that was deliberately flown into a mountainside in the French Alps last March, and a Russian airliner packed with tourist that exploded over Egypt last October. The toll for those two incidents was 374 killed.

In 2014 the toll from a Malaysia Airlines plane that disappeared and another that was shot down over Ukraine in 2014 was 537 deaths compared to 436 accident deaths that year.

“In recent years, airline safety has improved very considerably to the point where, typically, there are now very few fatal accidents and fatalities in a year,” said Paul Hayes,

374 Killed in deliberate crashes of German and Russian airlines Flightglobal director of air safety and insurance. “However, flight security remains a concern.”

Although some years are better than others, the fatal accident rate has been improving for many years.

briefs

AFGHAN TROOPS END STANDOFF AT INDIAN CONSULATE IN NORTH

KABUL, Afghanistan—An Afghan official says special forces have ended the standoff with gunmen holed up near the Indian Consulate in the country’s north, and have killed all the attackers after a 24-hour gun battle.

The standoff began on Sunday night in the city of Mazar-i-Sharif, when three gunmen tried to storm the consulate, then retreated into an adjacent, four-story building. Later, Afghan troops rappelled from helicopters onto

161

Passengers and crew killed in accidental crashes.

The global fatal accident rate for all types of airline operations in 2015 was 1 per 5 million flights, the best year ever. The previous best year was 2014, with a fatal accident rate of 1 per 2.5 million flights. Airline operations are now about four or five times safer than they were 20 years ago.

Those tallies are for all types of airline flights, including cargo, positioning, training and maintenance flights. There were just 98 paying passengers killed last year in accidental crashes compared to 790 in 2007. A far cry from the 1970s, when the annual average of passengers killed in accidental crashes was 1,289.

A big reason for the improving record is better engineering: Today’s airliners and aircraft engines are far safer than earlier genera-

tions of planes. They are more highly automated, which has reduced many common pilot errors.

They have better satellite-based navigation systems. They are made of stronger, lighter weight, less corrosive materials. And they’re equipped with safety systems introduced in recent decades, and repeatedly improved over time, that have nearly eliminated midair collisions between airliners and what the industry calls “controlled flight into terrain”—pilots who lose situational awareness and fly their planes into a mountainside or into the ground.

The aircraft improvements are due primarily to lessons learned from crash investigations that are taken into account when new planes are designed, said John Goglia, a former US National Transportation Safety Board member. As older planes are replaced with newer planes, aviation becomes safer, he said.

“We’re now up to about the seventh generation of jet airplanes,” he said. “We know the first generation—DC-8s, 707s—had a higher accident rate than the second or the third or the fourth generations, and it just moves on up.”

But more needs to be done to weed out disturbed pilots and guard against acts of terrorism, experts said.

THE tail of a Metrojet plane that crashed in Hassana, Egypt, on October 31, 2015. The Russian aircraft carrying 224 people crashed in a remote mountainous region in the Sinai Peninsula about 20 minutes after taking off from a Red Sea resort popular with Russian tourists, the Egyptian government said.

There were no survivors. SULIMAN EL-OTEIFY/EGYPTIAN PRIME MINISTER’S OFFICE VIA AP

The Germanwings case is especially perplexing, said John Cox, a former airline pilot and aviation safety consultant. Copilot Andreas Lubitz managed to conceal his troubles even though airlines are continually evaluating pilots for signs of trouble. Pilots evaluate each other, as well.

It’s not known what caused Malaysia Airlines Flight 370 to disappear while flying from Kuala Lumpur to Beijing, but many aviation safety experts theorize that it was mostly likely the result of deliberate acts, probably by one of the two pilots.

“Pilots from day one are so ingrained with protecting the passengers, with learning skills to deal with unanticipated events... and evaluated on how well you deal with stress,” Cox said. “Those who don’t do well with it don’t survive as professional pilots.”

The Islamic State has claimed

credit for a bomb suspected of blowing apart a Russian MetroJet A320 over Egypt. Malaysia Airlines Flight 17 was shot down by a Russian Buk surface-to-air missile fired from rebel-held territory in Eastern Ukraine, according to Dutch crash investigators.

Terrorists “have been probing nonstop since 9/11 and, every once in a while, they find a way to get through,” Goglia said.

The new frontier in airline safety is a managerial philosophy known as SMS, or safety management systems, he said.

Airlines are systematically gathering data on safety trends and encouraging pilots, dispatchers, mechanics and others to report problems by promising there will be no retaliation for mistakes.

The information is then shared across the industry in an effort to spot problems before they lead to an accident. AP

Tokyo’s 80-year-old Tsukiji fish market holds final New Year auction

the roof of the building to drive out the gunmen.

Sarwar Hussaini, a police spokesman in northern Balkh province, said on Tuesday that the standoff ended late Monday night.

He says there were three gunmen and all were killed. Ten people were wounded during the clashes, including five civilians who got caught in the crossfire. No one has claimed responsibility for the attack. AP

BEIJING POLLUTION LESSENED IN 2015 BEIJING—Environmental authorities in Beijing say the Chinese capital’s air quality in 2015 was better than the year before despite the city’s first two red alerts for pollution late in the year.

China has been setting national and local targets to reduce its notorious air pollution as citizens have become increasingly aware of the health dangers.

Beijing’s municipal government has been replacing coal-fired boilers with natural gas-powered facilities, forcing older, more polluting vehicles off the road, and closing or moving factories

that are heavy polluters.

The city’s average concentration of PM 2.5—small, inhalable particles that can penetrate deep into the lungs and are considered a reliable gauge of air quality—was 81 micrograms per cubic meter in 2015. That was a drop of 6 percent from 2014, and 10 percent lower than 2013, when Beijing started publishing data on PM 2.5. The “number of days of most serious PM 2.5 pollution is falling each year,” Beijing’s Municipal Environmental Protection Bureau said on Monday. AP

BUS CATCHES FIRE IN CHINA, 14 DEAD, 30 INJURED BEIJING—A fire on a bus in northern China on Tuesday killed 14 people and injured more than 30, and the police were hunting for a suspect, authorities said.

The incident happened in Yinchuan, the capital of Ningxia region, at about 7 a.m., said a press officer at the Ningxia fire department, who gave only her surname, Wang.

The police were hunting a suspect named as Ma Yongping in relation to a “major crime,” state broadcaster CCTV reported a few hours later. A press officer

at Yinchuan Public Security Bureau, who gave his surname, Ding, confirmed the notice to local the police authorities and said the police were still investigating.

Wang said firefighters put out the fire in 10 minutes, and that 14 people died and 32 were injured. She said the cause of the fire was still under investigation. There have been several serious bus fires in recent years in China that have been blamed on people who were mentally unstable or with personal vendettas. AP

MISSING HK BOOKSELLER’S WIFE DROPS POLICE REPORT HONG KONG—The mystery surrounding five missing Hong Kong booksellers, known for titles banned in mainland China, has deepened after one purportedly wrote to say he was fine, prompting his wife to drop a missing person’s report.

Hong Kong police said late on Monday that Lee Bo’s wife canceled the report, but that they would continue investigating the other cases. They didn’t say whether Lee had been located.

Lee and four other people associated with publisher Mighty Current, which specializes in books critical of China’s Communist Party leaders, have disappeared in recent months.

A letter said to be from Lee has been circulating in Chinese-language media in Taiwan and Hong Kong.

It said he was doing well and had gone back to the mainland on his own to assist an investigation. AP

A PROSPECTIVE buyer inspects the quality of frozen tuna before the first auction of the year at Tsukiji fish market in Tokyo on Tuesday. AP/EUGENE HOSHIKO

T

OKYO—It’s among the biggest of Japan’s many New Year holiday rituals: Early on Tuesday, a huge, glistening tuna was auctioned for about ¥14 million ($118,000) at Tokyo’s 80-yearold Tsukiji market. Next year, if all goes as planned, the tradition won’t be quite the same.

The world’s biggest and most famous fish and seafood market is due to move in November to a massive complex further south in Tokyo Bay, making way for redevelopment of the prime slice of downtown real estate.

The closure of the Tsukiji market will punctuate the end of the postwar era for many of the mom-and-pop shops just outside the main market that peddle a cornucopia of sea-related products, from dried squid and seaweed to whale bacon and caviar.

The auction is typical of Japan’s penchant for fresh starts at the beginning of the year—the first visit of the year to a shrine and the first dream of the year are

other important firsts—and it’s meant to set an auspicious precedent for the 12 months to come.

Sushi restaurateur Kiyoshi Kimura has prevailed in most of the recent New Year auctions, and he did so again this year in the bidding for a 200-kilogram tuna.

In 2013 a bidding war drove his record winning bid to ¥154.4 million (at current exchange rates about $1.3 million) for a 222-kg fish.

That drew complaints that prices had soared way out of line, and the winning price in 2014 was dramatically lower.

Last year a 180.4-kg tuna caught off Japan’s northern region of Aomori fetched a winning bid of ¥4.51 million ($37,480).

Japanese eat about 80 percent of all bluefin tuna caught worldwide, and stocks of all three bluefin species—the Pacific, Southern and Atlantic—have fallen over the past 15 years amid overfishing.

But while the New Year and daily tuna auctions are Tsukiji’s best-known events, the market is about much more

than just tuna.

On a recent year-end day, shop owners in rubber boots and aprons were rushing to clean up and sell off the last of their inventory, as the last few hundred shoppers milled around hunting for bargains.

Already, some shops outside the market have been razed and a new building that will house a smaller “outer market” is under construction.

Conceptual drawings from the Tokyo City government show the 23-hectare market site that fronts the Sumida River’s outlet into Tokyo Bay being transformed into an open waterfront park surrounded by greenery, with a wide shopping plaza and a passenger terminal for tourist ferries traversing the bay and river.

“We are contributing with all our efforts to the revitalization of our historic Tsukiji,” said a banner emblazoned with the logos of the architect and other contractors hanging from scaffolding of the new building.

Tsukiji’s predawn auctions are a fixture

on the tourist circuit, and since it was not set up to accommodate large crowds, the management has gradually limited access for safety’s sake.

Planning for the move began nearly 20 years ago. But the shift was delayed for years due to toxins found in the soil at the new location, the former site of a coal gasification plant run by Tokyo Gas. The city announced in 2001 that the market would be moved by 2012. But cleanup work dragged on, and in 2013 Tokyo Gas disclosed it had found more toxins at the site.

Critics of the move said city authorities were swapping worries over cramped and some say unhygienic conditions in Tsukiji for a new set of health problems: unsafe levels of lead, arsenic, hexavalent chromium and other toxins.

Cleanup of the tainted site required the removal and replacement of 2 meters of topsoil, construction of retaining walls, pumping out of polluted ground water and an injection of fresh water. AP

A10 Wednesday, January 6, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

A handmaiden of development

I

N October of 2014 we hailed a decision of the Sandiganbayan dismissing the charges of the Ombudsman against businessman Roberto Ongpin that he obtained a behest loan from the Development Bank of the Philippines (DBP). Now, the Court of Appeals (CA), in a November 2015 decision released last week, exonerated 12 officers of the DBP from the same alleged irregularity, negating an order of dismissal from the service by the Ombudsman.

We respect the opinion of some legal scholars that the Ombudsman is a lawyer of outstanding ability, having distinguished herself in the Supreme Court (SC) for brilliant legal opinions, among other things. But we can never forget that in the impeachment proceedings against former Chief Justice Renato C. Corona, the Ombudsman made a spectacle of herself when she added bank withdrawals and deposits in estimating the net worth of the Chief Justice, arriving at the ludicrous estimate of something like $100 million when it was actually closer to an infinitesimal fraction of that.

That she seems unaware that she has made a public exhibition of ignorance is either good acting or plain simple-mindedness.

What now can we say of the Ombudsman, with these decisions of the CA and, earlier, of the Sandiganbayan? As lawyers would say, win some and lose some. That’s par for the course. In addition, many people remain mesmerized by the prior publicity about the Ombudsman’s record in the SC. But questions crop up, no doubt influenced by the so-called opposition: Is not the Ombudsman, along with the Department of Justice, guilty of selective prosecution? Are there only three lawmakers, all of them in the opposition, suspected of wrongdoing? What about the 250 others who have been identified in the Commission on Audit reports as also suspected of having committed the same offensive acts? Is their membership in the party of the administration or identification with powers-that-be shielding them from investigation and prosecution?

Rapid economic development requires that the national environment be conducive to investment activity, otherwise, development will not take place or will occur only slowly. A prominent feature of this environment is the justice system. The justice system must dispense justice as it sees fit, free from external influences and pressures.

An integral part of the justice system, the Ombudsman is officially designated to ensure that public servants remain faithful to their mandates.

While it may acknowledge a debt of gratitude to the appointing authority, the Ombudsman must demonstrate true independence, that its first loyalty is to “justice,” the delivery of fair treatment to all persons, national or foreign, the protection and furtherance of their rights as human beings.

The decisions of the CA and the Sandiganbayan on the DBP officials and Ongpin are unambiguous indicators that our justice system can be relied upon to give justice to people who come to it for redress of grievances. There is no reason the Ombudsman cannot remain a part of the system.

US can afford to side with Iran over Saudis Noah Feldman

BLOOMBERG

T

he rapidly escalating conflict between Saudi Arabia and Iran, sparked by the execution of a Saudi Shiite activist, may seem like the natural outgrowth of a decade’s Sunni-Shiite tensions. But more than denominational differences, what’s driving the open conflict is the Saudis’ deepening fear that the US is shifting its loyalties in the Persian Gulf region from its traditional Saudi ally to a gradually moderating Iran. And in a sense, they’re right: Although the US is a long way from becoming an instinctive Iranian ally, the nuclear deal has led Washington to start broadening its base in the Gulf, working with Iran where the two sides have overlapping interests. Of which there are many these days.

The Saudis executed the activist, Nimr al-Nimr (it means Tiger the Tiger, by the way, which could possibly be the best name ever), last weekend because they wanted to send a message to the country’s Shiite minority and neighbors, and because they thought they could get away with it.

The outspoken al-Nimr symbolized the possibility that Saudi Shiites might never fully accept their second-class status and, worse, might seek autonomy or independence in the event of the Saudi state’s weakness. The Saudis seem to have calculated that if Iran made any noise about the execution, it would not have leverage to do anything about it. Undoubtedly, the Saudis knew the

Americans wouldn’t be best pleased with them for killing a nonviolent activist—but again, they must’ve thought it wouldn’t matter.

Executing al-Nimr was, thus, probably intended to demonstrate that the Saudis can go it alone, making security-related decisions without worrying what their neighbors or the US think. If that’s right, the execution was an indirect signal that Saudi Arabia is feeling isolated, and that if isolated, it will act unilaterally.

Here, the Saudis overplayed their hand. The Iranians reacted cleverly.

First, the government stirred up public sentiment by condemning the execution. Then, it allowed angry protesters to storm the Saudi Embassy in Tehran. Finally, the Iranian

government shut down the protest, made arrests and issued public statements disclaiming responsibility for what had happened.

To be sure, the Iranian government is a complex organism with many moving parts, and the whole response likely wasn’t planned or coordinated by a single actor. But the result was highly effective. It showed the Saudis that Iran took the execution as directed toward it.

And it simultaneously gave other countries the cover they would need to side with Iran.

The Americans, rather remarkably, took the Iranian side. US Secretary of State John F. Kerry let it be known that he was talking to his Iranian counterpart, Mohammad Javad Zarif. In the past, a US secretary of state would’ve reached out solely to the Saudi foreign minister, not least because there were no official diplomatic ties to Iran. Meanwhile, a former deputy Central Intelligence Agency director, Michael Morell, publicly praised the Iranians for their handling of the situation in Tehran.

This was downright astonishing, given Americans’ historical associations with embassy occupation there.

These reactions show that Saudi worries about American abandonment are to a degree justified. After the Iran nuclear deal, American foreign policy-makers can look at an episode, like the al-Nimr affair, and ask: Whose fault is this? If the answer is the Saudis, the US can now afford to side with Iran.

More broadly, this shift reflects

increasingly overlapping US-Iranian interests. Both want to stabilize Iraq, including by keeping the Iraqi Sunnis in a secondary position. Both would like to defeat Islamic State, a relatively low priority for the Saudis, who either don’t fear the Sunni militant group or fear it so much they don’t want to join the battle.

There are still plenty of points where US and Saudi interests converge, and oppose Iranian interests.

Both sides dislike Syrian President Bashar al-Assad and want Hezbollah to have less, not more, power in Lebanon. Both want to restabilize Egypt and, indeed, the region more broadly, creating a broad-based Sunni alliance to balance Iranian expansion.

But an alliance based on accidents of converging policy is a lot less solid than what Saudi Arabia traditionally had with the US, namely an alliance based on reliable, instinctual friendship. In that longtime relationship, the Americans ignored Saudi human-rights abuses and absolutism, and the Saudis turned a blind eye to unflinching US support for Israel.

Among close friends, such aberrations can be forgiven. That’s now changing, and the Saudis are understandably feeling nervous about it.

The painful truth for the Saudis is that the US and Iran are plausible strategic allies, whose once close relationship was disrupted by the Islamic Revolution. The US preference for Saudi Arabia in the Gulf was the result of Iranian intransigence and ideology, not any inherent-strategic advantage possessed by the kingdom.

The global struggle against Islamic militant violence could last generations

T

By Henri J. Barkey | TNS

he Sinai Peninsula. Paris. Mali. San Bernardino.

We keep trying to find our way out of this recurring nightmare of terrorist attacks. The United Nations unanimously adopted a resolution to use “all necessary measures” to combat the Islamic State (IS). Security services remain on the highest alert worldwide. For New Year’s, Brussels canceled its festivities, Moscow shut down Red Square, and thousands of soldiers and police officers patrolled New York, Paris and London. But protecting every “soft target” in the world around the clock is impossible. We know more attacks will come.

Still, the scale of the problem is far larger than most of us are willing to acknowledge. Even if the IS is dealt a devastating defeat, it is just the current chapter in a line of modern concepts of jihadism since Iran’s 1979 revolution.

Three broad trends indicate that the fight to overcome this strain of violence will be a long one.

First is the large number of young men (and in some cases, women) vulnerable to recruitment by such millenarian-type organizations. The Muslim world is replete with uneducated young people for whom religion is their life’s organizing principle and a

substitute for education or opportunity. They fight for goals that defy rational explanation and in the service of a perverted interpretation of religious ideology, which, by its very nature, is closed to any reasoning.

Illiteracy in Afghanistan is greater than 60 percent; in Syria the education system has collapsed as a result of the conflict there and hundreds of thousands of children have no schools to attend. The same is true in parts of Iraq. Even where there remains a semblance of an education system, such as in Pakistan, the populace is fed antiWestern diatribes originating from

religious or state authorities.

With each passing year of war, shuttered schools and collapsed governance manufacture a new class of these susceptible youngsters. Uneducated 13- to 15-year-olds are the perfect recruiting pool for the likes of the IS. They are easily brainwashed, obedient and unlikely to be swayed by reason or outside influences. For deeply alienated immigrant youths living in Western societies, the IS and its ideology offer a sense of belonging, identity and acceptance facilitated by social media.

A second worrying development is signs of escalating competition between terrorist groups attempting to demonstrate their own prowess. The IS has eclipsed al-Qaeda of late; its November attacks in Paris were an attempt to hijack the world stage before the Group of 20 summit —a horrific televised propaganda campaign to lure new recruits.

Coming just a week later, the Mali attack that left 20 hostages dead appeared to be al-Qaeda’s response through its Maghreb affiliate. Belittling the Paris carnage, al-Qaeda boasted afterward that it knew how to

conduct terrorist attacks in a less indiscriminate manner with fewer Muslim casualties. The prospect of a competition for which group effectively kills more “infidels” would sow more fear and prove calamitous to domestic politics of the US and countries in Europe.

Third, decisively vanquishing jihadist groups has proved to be impossible. This is because the fight is not against a nation or even an organization, but a religion-based and deeply rooted ideology. Defeated in one location, adherents regroup and resurface. The IS has managed to put together a state-like apparatus in Syria, which makes it vulnerable to a determined military ground assault. That wouldn’t, however, halt the ideological contagion. The IS is the offspring of al-Qaeda in Iraq, which the US had successfully put out of business. If the IS were to be destroyed, its remnants would metastasize into something else just as deadly.

This will be the longest war in modern times. Since 2001 the US has been in a state of permanent war with the likes of the Taliban, al-Qaeda, the IS and their offspring, such as the Shabab and Boko Haram.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Putin makes his isolationism official

Royal courtesy Teddy Locsin Jr.

Free fire

Leonid Bershidsky

BLOOMBERG VIEW

T

he evolution of Russia’s National Security Strategy—a document whose latest version was published on December 31—provides valuable material for the study of the angst, paranoia and befuddlement now gripping the Kremlin.

It’s well known that during his third presidential term, Putin has cultivated the image of a Western enemy out to destroy Russia. That this concept has found a way into the strategic document is not surprising or particularly important. The significance of the rewritten national security concept is that, for the first time in the 18 years since President Boris Yeltsin signed off on the first version, the Kremlin officially regrets opening up the country economically and culturally.

Yeltsin signed the first National Security Concept, as it was then known, in 1997. Even in the first post-Soviet years, when Russia did its best to integrate into the Western world, the document called the North Atlantic Treaty Organization’s (Nato) eastward expansion a national security threat because military groupings near the Russian borders “are a potential military danger even in the absence of aggressive intentions toward Russia.”

It wasn’t the drafters’, or Yeltsin’s, biggest worry, though. The economy was: The economic crisis is the main reason for the emergence of national security threats to the Russian Federation.

It is expressed as substantial production decline, drops in investment and innovation activity, the destruction of scientific and technological potential, stagnation in agriculture, disarray in the payment and monetary system, fiscal revenue shrinkage, increases in public debt.

Yeltsin and his strategists were right to be worried. Less than a year after the National Security Concept was approved, oil prices dropped to about $10 per barrel, Russia defaulted on its domestic debt and suffered perhaps the biggest post-Soviet blow to its prestige.

The country lay economically helpless, and only a sharp devaluation and an excess of unused industrial capacity allowed it to rise as domestic production gradually replaced imports.

The national security document got a face-lift in 2000, after Yeltsin resigned and Vladimir Putin became acting president. It still centered on economic challenges, but it reflected a growing concern with Western interference and Nato expansion: A shift, enshrined in Nato’s strategic doctrine, toward the use of military force outside the bloc’s zone of responsibility and without sanction from the United Nations Security Council carries a threat of destabilization to the entire global strategic environment.

There were other not-so-subtle changes, too: For example, where the original concept talked about the need for constructive decentralization that would devolve more powers to the vast country’s regions, the early Putin version only talked about building “a strong vertical of executive power,” a phrase that became the leitmotif of Putin’s first presidential term. The amended document stressed the need for a bigger role for the state in countering all sorts of threats, both military and economic.

Unlike in the original, there was no mention that an oversized military was too much of a burden for an economically weakened country. All in all, Putin followed through on his intentions, aided by a rise in oil revenues.

The next time Kremlin strategists felt Russia needed a new national security agenda was in 2009, when Dmitri Medvedev served as a placeholder president between Putin terms. His version was supposed to last until 2020. Medvedev, who now serves as prime minister, is into windy forward-looking documents.

Unlike the previous two iterations, this one was somewhat boastful: It claimed that Russia’s economic de-

cline had been reversed and that its resource wealth was helping to enhance the country’s international influence.

Even the traditional passage about Nato as a threat to Russian interest read as if this mild nuisance could be overcome with some assertive diplomacy: Russia is ready to develop its relations with Nato on an equitable basis in the interests of strengthening comprehensive security in the EuroAtlantic region, the depth and content of which will be determined by the alliance’s willingness to consider Russia’s legitimate interests.

The bravura tone appeared justified. Russia was successfully weathering the global financial crisis thanks to its huge international reserves, oil was getting close to $70 per barrel, and the long-term trend looked favorable.

The current version of the National Security Strategy is the most specifically anti-Western one to date. Nato and the European Union (EU) are accused of being unable to ensure the security of Europe, and the EU refugee crisis is held up as proof. The US and EU, the document says, backed “an anti-constitutional coup” in Ukraine that “led to a deep split in Ukrainian society and an armed conflict.”

The document argues that the West is out to topple “legitimate political regimes,” which creates instability and new hot spots. Even the emergence of Islamic State is blamed on “the policy of double standards practiced by some states in the fight against terror.” Those “certain states” also “use information and communication technology to reach their political goals through public opinion manipulation and history falsification.” Russia itself, with its state-controlled propaganda machine that has replaced private media for most of the domestic audience, is implicitly not among the offending countries.

Economic problems take a back seat to these threats. The Kremlin is still concerned about the commodity export dependence but, on a part with it, economic dangers include “the inadequate protection of the national financial system from the actions of nonresidents and speculative foreign capital, the vulnerability of its information infrastructure” as well as “the registration of a significant share of corporate property rights in foreign jurisdictions.”

Putin is also worried about “the watering down of traditional Russian spiritual and moral values and the weakening of the unity of the Russian Federation’s multiethnic people through the external cultural and information-related expansion.”

The 2000 iteration of the national security agenda spelled out Putin’s plan to strengthen central power, the state in all its Soviet and czarist glory. The 2015 iteration is a declaration of isolationist, defensive intentions. There is not a glimmer of hope that Putin plans to fight Russia’s economic woes by making his country more accessible to foreign capital or deepening its integration into global markets; no, he plans to keep moving in the opposite direction.

He still has time to do it. Even after the most adverse oil scenarios, Russia has enough international reserves to last through the end of this year, and probably, with frugal management, until the 2018 presidential election. Russians’ legendary patience may fray, but it will probably last until then, aided by a well-fed security apparatus. Even if Putin cannot hold on to power beyond that election, Russia will be a much more inward-looking society when the time comes for political succession.

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unctuality is the courtesy of kings. Cory was always on time, among the first to arrive and first to leave. She never wore out her welcome. This was cleverness as much as courtesy. She was entitled to run again for a first six-year term under the 1987 Constitution; she declined. The other attribute of royalty is remembering a face. This is harder than you think. Few are gifted with the ability, but it does not mean you are royal if you have it. The only thing royal in our country is a brand of spaghetti. Crooks must remember faces to spot the ones following them.

Wednesday, January 6, 2016 A11

What truly stands out as royal is remembering a kindness, even one without a face. The grandpa of Andrew Simes sent a Christmas card to Queen Elizabeth every holiday season from 1952 until his death in 2011. Queen and commoner met once in 1972, at a reception in Turkey, from where grandpa mailed his Christmas cards. When it was his turn to be introduced to the Queen, instead of a formal handshake she queen paused, smiled, and said: “So it is you who keeps sending me those lovely Christmas cards.”

After grandpa died, Andrew continued the courtesy. He was surprised to get an answer from the queen herself. She wrote, “When

Clinton’s shrewd plan to stop inversions Peter R. Orszag

P

BLOOMBERG VIEW

olitical campaigns are not generally known as ideal laboratories for devising sensible, innovative policies. Yet, Hillary Clinton’s proposals to combat corporate inversions—in which US companies move their tax homes abroad—are just that. They would largely eliminate the tax incentives to invert.

A US company currently has many such incentives. It can lower its taxes by creating a home base in a low-tax country, even if it leaves its headquarters and other operations in the US, and even if the US operations represent as much as 79.9 percent of the new combined company (though the rules are stricter if the share is 60 percent to 80 percent).

In many cases, the redomiciled company can avoid tax on profits that it accumulated tax-free abroad while it was still a US company. And it can further reduce its US taxes through “earnings stripping,” in which the US company loads up on debt owed to the parent; the payments on such debts are deductible in the US, even as the corresponding income is received in the low-tax country.

In the past two years, the Treasury Department has imposed tighter restrictions on inversions when the US company represents 60 percent to 80 percent of the combined entity. It’s now harder, for example, for these companies to access foreign earnings without triggering tax in the US. But corporations are getting around this by devising transactions that barely

avoid the 60-percent threshold. It’s clear that more has to be done, and while further administrative action is possible, the most substantial changes will require legislation.

The question is, what kind of legislation. Many people emphasize the need for comprehensive tax reform.

Yes, the US corporate tax code is a complex mess. Yes, it would be good to clean it up, and, yes, this might discourage inversions—though not as much as you might think, especially if the tax reform were designed to be revenue neutral. After all, the point of inverting is to reduce a company’s overall effective tax rate, regardless of whether its initial rate is high or low. A revenue-neutral change to the corporate tax system, by definition, would reduce some companies’ effective tax rates only if those of other companies went up.

Similarly, some strategies for reform would raise the tax rate on American companies’ foreign income, while others would reduce it.

The net effect on the overall incentive to invert is thus not clear.

Also note that a so-called territorial tax system, in which the tax on

CLINTON

foreign profits is eliminated, might reduce the incentive to invert, but, at the same time, it would increase incentives to play other games to shift foreign profits on paper. For example, it would encourage companies to abuse transfer pricing, in which profits are shifted abroad by manipulating the prices that a US company pays its foreign subsidiaries.

The one strategy for comprehensive corporate tax reform that would minimize the incentives for game-playing is something called formulary apportionment, in which X percent of a company’s global profits are taxed in the US if X percent of the company’s sales or employment are here, regardless of where the firm is domiciled for tax purposes.

Gabriel Zucman explains the rationale for this in his new book, The Hidden Wealth of Nations: The Scourge of Tax Havens: Sales and employment are the hardest things for a company to manipulate in trying to reduce its tax bill. While this may be the most effective comprehensive reform to

I received a letter from a different Simes this Christmas, I instructed my office to research your grandfather’s whereabouts.” Consider a pause here. “Therefore, it is with much sadness that I have learned of his passing and extend my condolences to you and your family.” The cynical might say that MI5 kept tabs on all her correspondents, telling her aide, “If you see Simes, tell her he is the Christmas card guy.” I doubt it.

But she probably took the initiative to have him looked up after a couple of Christmas cards. What is sure is that, every Christmas his card was on her desk and she read it, until it was something she came to expect to complete her Christmas.

combat inversions and other tax games, however, it’s not the one that most advocates have in mind when they argue for reform. It would also probably require renegotiating most if not all of the tax treaties the US has with other countries.

So, comprehensive reform is more complicated than it initially sounds.

And, more important, in today’s stultified and polarized political world, waiting for comprehensive corporate tax reform simply guarantees that inversions continue. That brings us to Clinton’s proposals, which are more targeted.

Clinton would do three things.

She would drop the 80-percent threshold to 50 percent. That means that US companies wanting to invert would have to find a foreign partner that’s at least as large as the US company. She would also impose an “exit tax” on profits that the US company had accumulated tax-free abroad—so that it would be taxed just as money that accumulates tax-free within retirement-savings accounts is taxed upon withdrawal.

And she would make it harder to strip earnings, even if that means acting without Congress via executive authority.

Taken together, those three targeted steps would effectively eliminate the tax incentives for inverting. And they could be done without major legislation. Indeed, they would combat inversions more effectively than many if not most comprehensive reforms would. So we have a choice: We could spend the next several years debating big reforms while inversions continue—or we could adopt Clinton’s proposals now.

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Pinoys start feeling the Telstra effect as incumbents launch fresh services

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By Lorenz S. Marasigan

UBSIDIARIES of multimedia conglomerate Philippine Long Distance Telephone Co. (PLDT) have teamed up to intensify their efforts to further cement the company’s image as the country’s top Internet services provider, as the group prepares for the entry of a third core player seen to shake up the local market.

Smart Communications Inc. unveiled a new product that allows users to enjoy up to 10 megabits per second (Mbps) of speed with a monthly data allocation of 50 gigabytes (GB). When upgraded, subscribers under the Speedster Fam Plan 1299 can allocate 6GB of data to their mobile-phone lines, which they can use even outside the home.

Customers may get up to four Smart mobile-phone lines bundled with their Speedster Fam Plan all billed under one subscription.

Smart Executive Vice President Ariel P. Fermin said the new product, which “humanizes” technology, will help drive the company’s campaign of growing its broadband business further this year.

the newly built Telstra building at the Mall of Asia grounds in Pasay City. ALYSA SALEN

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Mbps

The average download speed in the country, second slowest in Asia

“It’s certainly not just about the shared gigabytes, but we humanize technology by empowering our customers to live their digitally driven lives to the fullest and strengthen the connections they have with their loved ones despite physical distance through the power of digital and mobile technology,” he said.

International Data Corp. (IDC) Philippines analyst Alon Anthony D. Rejano said that, while this strategy is typical for a telecommunications company to attract new customers at the onset of the year, this move may also be seen as a preparation for the entry of Telstra Corp. Ltd. in the Philippine soil.

“Launching new products and services could be a good strategy made by PLDT in preparation for Telstra’s entry, although, we’ve been seeing product launches at the start of the year to have users subscribed to a plan for a year,” he said.

Rejano noted that this is one of the early effects of a more competitive market—companies offering better services at lower costs.

“It’s a good thing for consumers and for everyone, and we hope that the current situation of the

Philippine Internet connection will continuously improve,” he said.

Studies conducted by Ookla, an Internet metrics provider, showed that the Philippines has the second slowest average download speed among 22 countries in Asia with an average speed of 3.64 Mbps.

It ranked 176th out of 202 nations around the world. It is eight times slower than the global average broadband download speed of 23.3 Mbps.

Separately, cloud services provider Akamai Technologies found that while the Philippines might have improved its connection by a percentage point, its overall ranking in Asia still remains at No. 13 out of 15, or the third worst connection in the region.

Filipinos, according to the first quarter of 2015 report of Akamai, enjoyed an average download speed of 2.8 Mbps during the period under review.

Trailing behind are India and Indonesia with 2.3 Mbps and 2.2 Mbps average speed, respectively.

Telstra is expected to enter the Philippine market sometime this quarter through San Miguel Corp.’s Bell Telecommunications Philippines Inc., with the promise of providing better Internet services than the incumbents.

Experts believe that such a proposition may be achieved, given the frequency band assets that San Miguel currently holds.

San Miguel Group operates spectrums under the 800-megahertz (MHz), 900-MHz and 1,800MHz bands. It also holds the right to operate services under the 700MHz band—a precious asset that

the International Telecommunication Union (ITU) believes should be harmonized.

The harmonization of the asset, tagged as a “digital dividend,” means that it should be allocated to different providers. The frequency band allows for greater coverage, hence, it can penetrate into buildings and enclosed spaces thereby lessening the cost of building more base stations. Hence, the demand for the recall and auction of the asset.

Currently, San Miguel Corp. holds the right to operate the whole band: with Liberty Telecoms Holdings keeping 80 MHz, High Frequency Telecommunications with 10 MHz, and New Century Telecommunications 10 MHz.

Globe Telecom Inc. and Smart are both seeking portions of the frequency band, citing their subscriber base as a legitimate reason for the reallocation of the spectrum. San Miguel, however, is not too keen on sharing this asset.

Pundits believe that a recall and tender of the 700-MHz band from the diversified conglomerate will prove to be a risk that Telstra will have to take, should it decide to pursue its investment in the Philippines.

Telstra is known to be one of the first few telcos in the world to have successfully capitalized on the 700-MHz band.

“We are now at the final stages of the talks. We should launch really soon,” a ranking San Miguel executive who asked not to be named, said, referring to the signing of the joint-venture contract between the Filipino and Australian companies.

Sandiganbayan junks 8 graft cases vs former DoF exec

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ue to the inordinate delay on the part of the Office of the Ombudsman, the Sandiganbayan has junked the eight counts of graft and three counts of estafa filed against former Finance Deputy Director Uldarico Andutan Jr. in connection with a multibillion-peso tax-credit scam.

The Sandiganbayan granted the motion to quash the information by the accused, saying the Ombudsman violated Andutan’s right to speedy disposition of the cases.

It said that prosecutors took over five years to investigate before they could file the cases at the Sandiganbayan.

“These will not do. The right to speedy disposition of cases is enshrined in the Bill of Rights, the purpose of which is to protect the people

against arbitrary and discriminatory use of political power,” the Sandiganbayan said.

The prosecution, meanwhile, claimed that the investigation was delayed due to the voluminous documents that needed to be reviewed.

Andutan is one of the respondents in a 2009 case involving the questionable P73-million tax credits granted to Filstar Textile Industrial Corp.

Meanwhile, Andutan is still facing multiple graft charges before the Sandiganbayan in connection with the irregular issuance of tax credit certificates (TCC) to Mannequin International Corp. (MIC).

This tax-credit scheme involved the release of 45 TCCs to MIC amounting to P112 million from 1995 to 1998.

Andutan is also included in the P82-million tax-credits case involving Multi Cotton Mills Inc.

A TCC refers to a tax credit representing the tariff duties and internal revenue taxes (value-added tax) paid by an enterprise on the raw materials, supplies and semi-manufactured supplies used in the manufacture of export products, which entitle the firm to a tax refund as a package incentive.

To facilitate the TCC issuance under the illicit scheme, false and/spurious commercial documents were submitted to the OSS-Center that also failed to verify their authenticity.

The TCCs were then sold or illegally transferred to other business entities by making it appear that the transferees were suppliers of raw materials.

Jovee Marie N. dela Cruz