October 1, 2015 by BusinessMirror

VW details brands affected by scandal

ERLIN—Volkswagen’s (VW) commercial vehicles and cars from its Spanish unit SEAT are among the 11 million fitted with a diesel engine that can cheat on emissions tests, the company said on Tuesday.

In this November 20, 2008, file photo, a Volkswagen Jetta TDI diesel engine is displayed at the Los Angeles Auto Show. Green Car Journal named Volkswagen’s 2009 Jetta TDI as the “Green Car of the Year” at the show, making it the first clean-diesel vehicle to win the prize. Around €15 billion ($16.9 billion) was wiped off the market value of Volkswagen AG on September 21, following revelations that the German carmaker rigged US emissions tests for about 500,000 diesel cars. AP/Damian Dovarganes

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Strong El Niño on, but P-Noy still not aware of action plan By Cai U. Ordinario

‘TaKlub’: hiding hope and despair Show BusinessMirror

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Thursday, October 1, 2015

‘Taklub’: Hiding hope and despair punctuate her anguish and abandonment. Taklub is directed by Brillante Mendoza from the screenplay of Honeylyn Joy Alipio. Diwa de Leon provides the misic. The cinematography by Odyssey Flores alternates between crusty and soft-focused images, giving the film a touch of the documentarian. n

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T the end of Taklub, the Brillante Mendoza film, I kept wondering why I did not get a sense of sadness or despair or joy. There is nothing wrong with the film but there is an absence that was more palpable than the presences—the characters, the landscape and the pervasive dreary, bleak air. I wanted to be moved by the film, which explores life after the destruction of Supertyphoon Yolanda. Perhaps, that was the problematic situation I placed myself in. In Thy Womb, Mendoza’s acclaimed 2012 film, there was no problem about the story touching the audience. Mendoza crafted a world of the Badjao that was more truthful and had more candor than any previous attempt to capture this group of people on film. The power of Thy Womb is that the director’s camera was more focused, more dedicated to a simple, quiet story. The silences in the film did not stop the filmmaker to allow the scenarios and the actors to grow before us until they have bigger than life-size. This is the sort of transformation that makes films great, and urges us to rethink about the avowed power of cinema. It is, of course, not morally proper to celebrate destruction, especially if one had not been there at the center of the storm. But art, more than our moralizing and grieving, has the function to rewind time and allow us to see once more what indeed happened on that day. Yolanda has such a lyrical sound to it and when one appends that music in that name to an event of discord, then one has to grapple with memory—and with art. How to depict a land that is reduced to ruin and mud and ash? How to tell the story of the lives of people who did not have any wealth except each other? Mendoza has been through this path already, and his sharp aversion to melodrama pushes him to slash and burn through the horizon. Violence becomes poetry in his hands. In Taklub, he decides to be prosaic about it. This may be the reason I could not be moved by the scenes. This is not saying that there are no good scenes in the film. There are but, far from weaving them into the lives of the four lead characters, they are like threads that are unspooled. Julio Diaz has the most colorful character among the leads. In one scene, he carries the Cross in a ritual that bears the notion of self-flagellation to the extreme. Films are always the sum of choices, and in Taklub, Mendoza makes one of the best decisions ever: to portray the faith of the people to the point of pain. Here is a city battered by the storm and, as a response, the community decides to hold a penitential procession. Who taught them this religion of terrible sacrifice? A slice of life is but a

in Brillante Mendoza’s Taklub, the camera pays homage to nora aunor in many scenes where nothingness gathers itself into a force that compels us to watch and watch forever lest we miss out on the message of nature not meant to serve humanity always.

slice, but there is a scene in Taklub where Larry (Julio Diaz) comes to their house to meet up with Bebeth, the character played by Nora Aunor who loses her children in the terrible wrath of Yolanda. The exchange is full of candor and no bittersweetness to the two separated couple. The other woman remains outside, waiting by the tricycle, neither timid nor arrogant. A masterful rendition of pathos is caught by this scene. Renato, as played by Lou Veloso, is the character who sails out to sea and prays that he be swallowed by it. Renato has lost his loved ones and it is his fate that the sea always brings him back to shore and an unwelcomed safety. Again, there is a meeting between Bebeth and Renato, but the latter watches merely. This, I believe, is where the weakness of the film lies—in characters that do not seem to have anything between and among them. We are like Bebeth walking and walking in a hazy way, devoid of direction and purpose. Is Mendoza illustrating for us the critical state of life in Tacloban, where people wait aimlessly and where aid and assistance come to the land but do not reach those who need them? Those who believe in the genius of Nora Aunor will be relieved. In a role that can be deemed insignificant, Aunor never searches for moment as inferior actors are wont to do. In the first place, this peerless actor has no scenes that she, as the idiom goes, could chew on. Given the narrow space bestowed upon her by the screenplay,

Aunor once more shows that there are no small roles but only small actors. What we are treated to is Aunor, the actor, who, carrying herself in the film with her back in an almost scoliotic bend, manages to portray for us the unseen burden of those who experienced the sorrow, the surge and the deaths. All this in a long shot showing Aunor’s Bebeth leaving the hospital. It can be a cultural flaw but Bebeth, as essayed by Aunor, is the person whose resignation to fate is as fatal as the belief that, after a massive destruction, help will come. If ever the silences in Taklub work, it can only be ascribed to this actor who treats stillness not as gaps but as gorgeous emptiness where the soul is awed by its darkness or lightness. The camera pays homage to Aunor in many scenes where nothingness gathers itself into a force that compels us to watch and watch forever lest we miss out the message of nature not meant to serve humanity always. I wish though that Aunor was given more difficult scenes. At this point of her career, Nora Aunor can practically do anything. A huge ship is seen astoundingly beached, its prow hitting the sky. I think Nora Aunor’s Bebeth, like the ship, is stranded in the narrative about a land that lives by its name, which means “covered” in Filipino. I go back to Thy Womb, where Nora Aunor as Shaleha delineates a barrenness through a performance that is fertile in metaphors and as soaring as the birds that

glaiza de Castro Celebrates her journey as a musiCian via ‘dreams never end’ ConCert

gMa leading lady glaiza de Castro will be claiming the spotlight on october 3 for her first major solo concert at the Music Museum. Dubbed as Dreams Never End, glaiza will be channeling her inner rock star to perform some of the chart-topping hits from her self-produced album Synthesis. get to know a more profound glaiza as she shares her music with the people who continue to join her journey in reaching her dreams. Feeling ecstatic, the gMa artist Center star shares how she is preparing for the big night, “ever since the launch of Synthesis, i’ve become more inspired to share my music. excited ako to perform my songs to everyone, and above anything else, i want to make it intimate for my fans. this is going to be my way of saying thanks.” the singer-songwriter will be joined by her fellow artistfriends including Jay-R, Kitchie nadal, aiza Seguerra and Regine velasquez-alcasid. avid fans of the recently concluded groundbreaking series The Rich Man’s Daughter, who call themselves RaStro rebels, will be able to catch another glimpse of their favorite love team as Rhian Ramos will also be jamming with glaiza at the concert. Dreams Never End is directed by Rico gutierrez, with Marc lopez as the musical director and gMa network as its official media partner.

aBC news apologizes for false promotion of o.J. Simpson civil-trial deposition tapes ABC News has been promoting its airing of deposition tapes from O.J. Simpson’s civil trial as being seen for the first time since they were recorded in 1996. But had ABC News done a bit more digging, it would have learned that the tapes first aired on NBC’s Dateline in 1999. The news division had to issue an apology on Friday for the erroneous claim. “We were wrongly under the impression these deposition tapes were exclusive and had not aired before at length,” an ABC News spokesman said in a statement. “We learned this morning portions did air 15 years ago. We apologize for the mistake.” The airing of the tapes, scheduled for Friday night’s edition of the news magazine 20/20 was heavily touted in on-air promos and by Robin Roberts and George Stephanopoulos during Friday’s edition of Good Morning America. The Los Angeles Times also reported that ABC was airing the tapes for the first time after being in storage for nearly 20 years, based on information provided by the network and an interview with 20/20 coanchor Elizabeth Vargas, who is scheduled to present the video and related interviews on the program. However, once GMA aired on Friday, NBC News executives quickly noted that the tapes have aired before, most recently in a June 11, 2014, edition of Dateline NBC and in a 14-and-a-half minute segment that ran on the program on June 15, 1999.

life

los angeles times

In year of diplomatic triumphs, Obama still dogged by Syria

Economic Planning Secretary and National Economic and Development Authority (Neda) Director General Arsenio M. Balisacan said the interagency task force will be submitting the plan to the President within the week. “We don’t have solid numbers yet, but based on the information we are See “El Niño,” A2

economic briefing Bangko Sentral ng Pilipinas Governor and Chairman of the Monetary Board Amando M. Tetangco Jr. opens the Philippine Economic Briefing held at the Philippine International Convention Center in Pasay City. The briefing includes discussions on harnessing the Filipino talent and accelerating infrastructure development and financing. ALYSA SALEN

Vista Land allots ₧40B for Iloilo township By VG Cabuag

broader look

By Catherine N. Pillas

he Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa) has officially declared that a strong El Niño now prevails in the country, but President Aquino has yet to see a blueprint to mitigate the ill effects of the likely weather disruptions drawn up by various agencies.

INSIDE

b4-B5

ista Land & Lifescapes Inc., the real-estate arm of the Villar family, on Wednesday said it will spend some P40 billion in developing its vast property in Iloilo City into a master-planned community that will have, among others, malls, hospitals, residential and office buildings mainly for business-process outsourcing (BPO) firms. The company said its Vista City Iloilo will cover about 500 hectares, spanning the municipalities of Oton, Pavia and San Miguel on Panay Island. The property is close

PHL’S NEW GOAL: TOP 20% OF WEF RANKING

to the University of the Philippines Visayas, Central Philippine University, University of San Agustin and the West Visayas University, as well as the Western Visayas Medical Center and The Medical City Iloilo, the company said. Iloilo has recently attracted major players in the real-estate industry that are undertaking residential and commercial projects to take advantage of the growing domestic economy. Bordered by the provinces of Antique in the west and Capiz in the north, Iloilo has become the regional capital and the economic hub of Western Visayas.

Vista Land established its presence in Iloilo in September 2000, when it opened Savannah Glades. The project’s two main residential components are Savannah and Lumina. The project now has seven residential enclaves, covering more than 300 hectares. Savannah is the largest residential community on Panay Island. The residential community is supported by numerous amenities, including a school, five clubhouses, four basketball courts, one tennis court, jogging and biking paths, and numerous gazebos, parks and children’s playground. “The integration of the residen-

tial project with commercial development will complete Vista City Iloilo’s transformation with adequate security and convenient transportation services,” the company said. It added that the company has allocated at least 100 hectares for the City Center, where the BPO offices, shopping establishments and hotels will be located. The City Center will also include churches with columbarium, events places and amusement parks. Vista Land has established its presence in 35 provinces, and 90 cities and municipalities. To date, the group has 23 master-planned city developments spread all over the country.

ow that the Philippines has breached the upper third of the World Economic Forum’s (WEF) Global Competitiveness Report, it is now eyeing to enter the top 20 percent of the list by 2020, or a jump of at least 18 spots over a period of five years. And Guillermo M. Luz, privatesector cochairman of National Competitiveness Council (NCC), said the key to achieving this new target is the policy direction of the next leader. “Moving up into a new neighborhood of competitors means we have to be looking up at the top 20 percent, which means a ranking of 30 or higher in the next five years. Absolutely, everything depends on the next administration, because leadership matters,” said Luz in an interview at the Investor Relations Office’s Philippine Economic Briefing on Wednesday. The latest Global Competitiveness Report of the WEF placed the Philippines at the 47th spot out of 140 economies, up by 5 notches from 2014’s ranking of 52nd. This year’s five-spot jump represents the fifth time in a row that the Philippines improved its ranking in the WEF’s Global Competitiveness Report. Of the 12 pillars tracked in the report, the Philippines notched improvement in 10 pillars, with the biggest improvements noted in Labor Market Efficiency, Health and Primary Education, Market Size, Business Sophistication, Innovation and Macroeconomic Environment. The two pillars that registered declines are Institutions and Goods Market Efficiency. Factors that led to a drop in the country’s ranking in the Institutions pillar were government inefficiency, or red tape, in establishing a business. For the Goods Market Effieciency, a specific area that needs to be improved are customs procedures. Moving forward, the NCC said it will now focus on lessening the number of procedures to start a See “Wef,” A2

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n japan 0.3918 n UK 71.1164 n HK 6.0553 n CHINA 7.3741 n singapore 32.8682 n australia 32.8659 n EU 52.8011 n SAUDI arabia 12.5126 Source: BSP (30 September 2015)

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Thursday, October 1, 2015

DTI to release guidelines for CARS perks next week

By Catherine N. Pillas

he Department of Trade and Industry (DTI) has committed to release the implementing rules and regulations (IRR) of the Comprehensive Automotive Resurgence Strategy (CARS) next week then finalize the list of participants by year-end.

“We expect to release the IRR next week, and our target is by year-end, it must already be clear who among the applicants are qualified,” Trade Undersecretary Adrian S. Cristobal Jr. said. The CARS Program, seen as the cornerstone of the government’s Manufacturing Resurgence Program (MRP), seeks to make the Philippines a major auto-manu-

El Niño...

facturing hub in Asia. Embodied in Executive Order 182, the CARS requires a production-volume hurdle of at least 200,000 units over a period of six years and substantial investment in order for car manufacturers to be eligible for the incentives available under the program. There is no fixed amount on the investments, Cristobal clarified.

continued from A1

getting from Pagasa, the El Niño that we are experiencing, which will last until mid-next year, is expected to be as intense as the one we had in 1997 and 1998. During that period agriculture output declined by almost 23 percent, particularly in grains and that was coupled by the sharp increase in prices,” Balisacan said in a media briefing on Wednesday. He said the action plan will contain various intervention measures that agencies will put in place to address the needs of the most affected by the prolonged dry spell, which is

expected to last until mid-2016. Balisacan said these interventions will include cash-for-work programs, which the government has been implementing in recent months to augment the incomes of farmers in the four regions that are severely affected by the drought. What is working to the advantage of the government, Balisacan said, is its “relatively sufficient” sufficient fiscal scape needed to finance interventions to augment farmers’ incomes and shield poor consumers from skyrocketing prices.

In exchange for the infusion of investments in auto manufacturing, the Board of Investments will grant fiscal perks to the tune of P27 billion. This will come in the form of the Fixed Investment Support Incentive and Production Volume Incentive. The program will cover three vehicle models, with an allotment of P9 billion each. On the complaints of auto makers that the CARS is discouraging to new entrants, Cristobal emphasized that the program is meant to filter the serious auto players that have

plans to cater to overseas markets. “This program is not meant for everyone; it’s meant for the serious investors with plans to make the Philippines a regional hub, which means they are not limiting their vision to the domestic market,” Cristobal stressed. Two car firms are said to be interested in the program: Toyota Motor Philippines Inc. and Mitsubishi Motors Philippines Corp. This was confirmed by Cristobal during a budget hearing at the House of Representatives. Meanwhile, the CARS Program became a central point of interest for Japanese auto-parts suppliers and manufacturers at a recent investment forum held in Japan. “There was positive and strong interest from the parts manufacturers and suppliers, and they are also waiting for the IRR,” Cristobal said. With the expected release of the IRR next week, the DTI is eyeing to finish the application and evaluation process by the end of the year.

“Unlike the El Niño in 1997 and 1998, when our government’s financial position was also weak, this time around we have quite sufficient fiscal space to alleviate its effects on various groups, particularly farmers and poor consumers,” he said. “We learned quite a lot from the previous El Niño and this early, we have decided to import more [rice] this year and in the first quarter of next year,” Balisacan added.Last year, Philippine Statistics Authority (PSA) Interim Deputy National Statistician Sectoral Statistics Romeo Recide said the impact of a severe El Niño on agriculture growth could reach up to a reduction of 10 percentage points.

Recide said this is what happened in the 1997 and 1998 El Niño years, when the dry spell not only affected crops such as palay but also livestock. He said a dry spell that occurs during harvest season or during the rainy months would be beneficial to crops. Recide added that there are crops that thrive during El Niño like mangoes, which could offset the slack in production experienced by other crops such as palay. “It can get really, really bad. Agriculture growth went down by as much as 8 to 10 percentage points in 1998. That was huge because all commodities were affected, even livestock was affected. Rice alone went down by 26 percent,” Recide said.

CRISTOBAL: “This program is not meant for everyone; it’s meant for the serious investors with plans to make the Philippines a regional hub.”

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VW...

continued from A1

Volkswagen AG has admitted using a piece of engine software to cheat on diesel car-emissions tests in the US, where authorities say there are 482,000 such cars. The company says that up to 11 million vehicles worldwide were fitted with the engine in question. The company said it would present authorities with its “technical solutions and measures” to fix the problem in October. Not all of the 11 million vehicles, however, would have had the software activated, according to new CEO Matthias Mueller. Details have emerged gradually of how many were made by which VW division. Guenther Scherelis, a spokesman for the commercial vehicles unit—which makes vans and pickups—on Tuesday confirmed that 1.8 million of its vehicles were affected. He did not give further details. Spanish subsidiary SEAT said it fitted 700,000 vehicles with the EA 189 diesel engines in which Volkswagen has said there are “discrepancies.” SEAT said the cars were sold worldwide and it was seeking to determine how many were sold in each market. Also fitted with the suspect software were 5 million VW brand cars, 2.1 million Audis and 1.2 million Skodas. SEAT and Volkswagen-Audi Spain on Tuesday ordered a suspension of sales of all SEAT, Volkswagen, Audi, Skoda and Volkswagen commercial vehicles with the EA 189 diesel engine. It said this decision would affect 3,320 vehicles currently in stock. Volkswagen in Sweden said 224,746 vehicles of those brands that had been sold in the Nordic country were affected. In a speech to VW managers on Monday evening, Mueller said the offending software was activated only in part of the cars fitted with the engine, so “we expect that the number of vehicles actually affected will be smaller,” according to extracts released by the company. He said customers will be informed in the coming days that their

vehicles need work and authorities will be presented with “technical solutions” in October. Mueller said that, alongside the company’s internal investigation, Volkswagen’s supervisory board has commissioned an external investigation by US law firm Jones Day, and “that will start very quickly.” “A long road and a lot of hard work lie ahead of us,” he said. Volkswagen on Tuesday made another managerial change, putting longtime engineer and executive Winfried Vahland in charge of a newly created North American Region starting November 1. Vahland will oversee operations in the US, Canada and Mexico that are now separate, and he will have a seat on the VW brand’s management board. The German government last week set up a commission of inquiry on the scandal. Transport Ministry Spokesman Martin Susteck said that the panel is in contact with the US Environmental Protection Agency. In Brussels, European Union Industry Commissioner Elzbieta Bienkowska met on Tuesday with Volkswagen brand chief Herbert Diess. Ahead of the meeting, Diess said only VWs with 1.6-liter and 2-liter engines are concerned, and for the latter “we are quite sure we can fix the problem with software.” He said he would explain to EU authorities what his company is doing to fix its engines and plan “a way forward.” An EU representative said the meeting was not about fixing blame “but to establish the facts—how many vehicles have been affected, since when and in which countries.” “Both participants agreed that restoring confidence in the European car industry is of utmost importance,” said the representative, who was not authorized to make public statements and spoke to journalists on condition of anonymity. The person said Bienkowska stressed to the Volkswagen executive “the importance to fully cooperate with national authorities.” AP

WEF. . . Continued from A1

LOW PRESSURE AREA 470 KM EAST OF CATARMAN, NORTHERN SAMAR (SEPTEMBER 30, 5:00 PM)

business, as well as the number of days to start a business, to respond to the downgrade in the Institutions pillar. “Corruption has been undertaken by government inefficiency, and inadequate infrastructure. w..these are the factors we should be mindful about in terms of the concerns of investors,” Luz said. The country already scaled 38 spots since 2010. Despite the jump, the Philippines remained in the fifth place in the Asean ranking. “Our current rank of 47—compared to last year’s 52—further cements our reputation as a bright spot in Asia, an attractive destination for foreign investment, and a better place to do business for Filipinos,” Palace Spokesman Edwin Lacierda said. “This gain is the largest measured over that period, reflecting the extent to which daang matuwid has transformed the country,” he added. “Surveys such as this have proven it time and again: reform works, good governance works.” “The changes implemented under the Aquino administration have contributed toward increased transparency and efficiency, bolstering public trust and creating a more enabling environment for business,” he said, adding: “The effects are palpable, not only at a macroeconomic level but also in our citizens’ everyday lives, with continuous improvements in the delivery of social services. As the country prepares for next year’s referendum on daang matuwid, developments such as these continue to demonstrate the benefits of treading the straight and righteous path.” With Butch Fernandez

The Nation BusinessMirror

news@businessmirror.com.ph

Editor: Dionisio L. Pelayo • Thursday, October 1, 2015 A3

Ombudsman: Abad, Relampagos face probe over DAP

HE Ombudsman on Wednesday said that Budget Secretary Florencio B. Abad and Undersecretary Mario L. Relampagos are now facing preliminary investigation for alleged technical malversation and administrative charges in connection with Disbursement Acceleration Program (DAP) funds. In a statement Ombudsman Conchita Carpio-Morales said that her field investigation office (FIO) completed its fact-finding investigation into the utilization of the DAP funds for the period 2011 to 2012. Morales, citing the special panel of field investigators, said that Abad and Relampagos authorized the DAP sourced from pooled savings as “a plan to boost disbursements” and “to jump-start the implementation” of the government’s expenditure

abad

relampagos

program, adding, as authorized, the DAP projects were identified based

on their “multiplier impact on the economy and infrastructure benefit, beneficial effect on the poor and translation into disbursements.” The Ombudsman said that documents noted irregularities in the cross border DAP transfer transactions to the Commission on Audit (COA) and the House of Representatives (HOR). “From the total P31.9 billion DAP funds, the amount of P250 million was released to the HOR for the construction of its legislative library and archive buildingcongressional e-library. Field investigators noted, however, that the HOR project is not among those approved by the President,” the Ombudsman added. On the other hand, the total amount of P143.7 million was released to the COA to augment its information-technology infrastructure program and hiring of additional litigation experts as per approved Special Allotment Release Order (Saro), Morales’s statement added. According to Ombudsman, Abad prepared and signed all memoranda

and issuances concerning DAP implementation while Relampagos signed the corresponding Saros to the COA and the HOR. A special panel of lawyers was constituted to conduct the preliminary investigation. Under Article 220 of the Revised Penal Code, the crime of technical malversation is committed by a public officer who disburses public funds or property for a purpose different from which they were originally appropriated by law or ordinance. The FIO also recommended that the issue on the utilization of funds to DAP projects in the Executive department be referred to the COA for special audit. The DAP, which was declared unconstitutional by the SC, came under fire in 2013 after detained Sen. Jinggoy Estrada revealed that the said funds were used as “incentives” for legislators who supported the impeachment of Supreme Court Justice Renato Corona in 2012. For his part Abad said that the preliminary investigation on DAP is a “welcome move” from the Of-

fice of the Ombudsman, saying the inquiry enable the parties to present their views on all remaining issues involving DAP. “At the same time, we wish to clarify certain terms relevant to the investigation, particularly those that may invite specific public attention. First, technical malversation does not suggest that the individuals in question committed acts of graft or corruption. Nor does the investigation imply that these individuals used public funds for their personal gain or benefit. Certainly the inquiry is not a matter of whether individuals had stolen from public coffers,” he said. “The inquiry involves the application of excess or unutilized public funds to existing priority government projects and programs that require additional funding. The investigation seeks to determine whether these uses of public funds constitute technical malversation, where public funds are used for a public purpose that differed—in a very technical sense—from the original plan,” Abad added.

According to Abad the declaration of these public funds as savings and their subsequent use to augment deficient items of appropriations were authorized under the General Appropriations Act and other laws. “We must also remind our people that despite several news reports, the final Supreme Court decision on DAP did not declare the program unconstitutional,” he said. “Furthermore, the final Supreme Court ruling stresses that the doctrine of operative fact holds sway over the implementation of DAP. In other words, the program’s authors, sponsors and implementers must be presumed to have acted in good faith and with regularity in the performance of their official duties. It is also worth noting that DAP is not a novel program. Its implementation only followed precedents set by previous Presidents and their respective budget secretaries,” Abad added. Abad also said that the Department of Budget and Management will cooperate with the Office of the Ombudsman in the course of the investigation. Jovee Marie N. dela Cruz

Filipino, US Comelec finalizing schedule presidential debates Groups ask DENR stop DMCI’s power-plant project in Palawan marines start amphibious exercises By Jovee Marie N. dela Cruz

By Rene Acosta

ILIPINO and American troops will start on Thursday amphibious exercises amid tensions in the West Philippine Sea brought by China’s expansive claims as characterized by its building of a third airfield on one of the reefs that it has occupied. Capt. Jerber Anthony Belonio, Marine Corps spokesman, said the war games that will run for nine days will improve the capability and interoperability of both forces in responding to crisis situations, including during calamities and disasters. The exercises, which will involve Filipino and American sailors and Marines, will take place in the wake of a US report that Beijing was constructing a runway at the Mischief Reef that could land bigger Chinese aircraft, including fighter jets. However, Belonio said there have been no scheduled actual exercise in Palawan, the province that exercises control and supervision over the West Philippine Sea as the war games would mostly be conducted in Luzon. Only the command post exercise or the table top exercise will be held in Palawan, Belonio said. The Philippine Bilateral Exercise (Phiblex) is an annual military training between the sea forces of the US and the Philippines, and it has been held during the past years in areas close to the territory that China is disputing. Earlier the US said that the exercises should continue to enhance the interoperability between the US Marines air-ground task force and the Philippine military with the goal of improving bilateral response to regional issues and maritime security crises within the Asia Pacific. The war games will involve at least 650 American and Filipino troops in command post exercise, field training exercises, amphibious operations, combined arms training, civil-military operations and humanitarian and civicassistance projects. The command post exercise, which will test the capability of the joint forces to conduct planning for and execution of bilateral maritime operations, will be held in Palawan or within the jurisdiction of the Armed Forces Western Command, which also exercises operational control over the West Philippine Sea. On the other hand, the field training exercises will be held in the vicinity of Clark Field in Pampanga, and it will include small arms and artillery live-fire training.

HE Commission on Elections (Comelec) on Wednesday announced that the poll body is now finalizing the holding three presidential debates and one vice presidential debate, saying the BusinessMirror and the CNN Philippines will be the main media partners for the vice presidential debate. Comelec Chairman Andres D. Bautista, in an interview at the House of Representatives, said that talks between the poll body and Kapisanan ng mga Brodkaster ng Pilipinas (KBP) and other media organizations are on going. “We will be meeting the KBP on Friday and then again will be meeting all the networks on Tuesday, October 6, to talk about the rules and regulations for us to finalize the guidelines, but basically we agreed that there will be four debates— three presidential and one vice presidential. The three debates will be held in Mindanao, the Visayas and Luzon, in that order, and then the vice presidential will be held in Metro Manila,” Bautista said.

He added that the presidential debates in Mindanao will be conducted between February 8 and 22; in the Visayas, between March 8 and 21; and in Luzon, between April 12 and 15. Bautista said the vice presidential debate in Metro Manila will be between April 4 and 8. “There will be a lead organizer [for every presidential debate] and these three groups include ABSCBN with Manila Bulletin, GMA7 with Philippine Daily Inquirer and TV 5 with the Philippine Star, and then CNN Philippines and BusinessMirror will be the lead organizers for the vice presidential debate. But all debates will be opened to all media,” Bautista added. Ambassador Antonio L. Cabangon Chua, Aliw Broadcasting chairman emeritus and founder, is the owner of the BusinessMirror. He is also the chairman of Nine Media Corp., the company behind the CNN Philippines. Moreover, among the possible issues to be debated upon are agricultural development, poverty reduction, charter change, peace and

order, disaster preparedness, healthcare, education, corruption, public transportation, traffic, electoral reforms, foreign policy, tax reform, and national defense, according to the poll body chairman. Section 7 of the Fair Election Act states that the Comelec “may require national television and radio networks to sponsor at least three national debates among presidential candidates and at least one among vice presidential candidates.” Meanwhile, Bautista said that the presidential and vice presidential debates are on a voluntary basis. “But those who will not attend the debates might send a message to the electorate,” he said. Bautista said that holding such debates, is their way of helping the candidates in presenting their platforms, saying it will also help voters to know more about these candidates. “We are doing the candidates a favor by providing a venue, a free venue where they can ventilate their arguments, where they can discuss their platforms of government,” he said.

Luistro assures students have full grasp of history

DUCATION Secretary Armin A. Luistro on Wednesday assured President Aquino that the students, under the K to 12 Program, will have a full grasp of Philippine history. “I assured the President that Philippine history, including local and national heroes, is taught in Grades 4, 5 and 6 in the new K to 12 curriculum,” Luistro said. The President was bothered by the question of students who watched the movie Heneral Luna why Apolinario Mabini was sitting throughout the movie. President Aquino made the remark when he conferred the 2015 Apolinario Mabini Awards to outstanding persons with disabilities and advocates for their welfare. The Apolinario Mabini Awards was launched in 1974 to give recogni-

LUISTRO: “I assured the President that Philippine history, including local and national heroes, is taught in Grades 4, 5 and 6 in the new K to 12 curriculum.”

tion to individuals with disabilities, and professionals and various groups that have rendered outstanding service to people with disabilities. Luistro said he would discuss with school supervisors the students’ apparent lack of knowledge about the country’s history. “In any case, I committed to discuss this concern with our curriculum supervisors, validate if the majority of the students have simi-

lar deficiencies, and ensure that we do not just simply dismiss the issue without a fair assessment of the real situation,” Luistro said. In an interview, the actor who portrayed Mabini narrated that he was approached by three students who asked him why he was sitting during the entire film. The actor said he asked the students if they knew who Apolinario Mabini was, and they answered “no.” Reacting to the actor’s revelation, the President asked: “What have we been teaching these kids in our history classes?” Mabini—the country’s first prime minister who is known by his historical moniker as the “Brains of the Philippine Revolution” and the “Sublime Paralytic”—lost the use of both his legs to polio. Claudeth Mocon-Ciriaco

NVIRONMENT groups based in Palawan on Wednesday urged the Department of Environment and Natural Resources (DENR) to stop the proposed coalfired power-plant project of D.M. Consunji Holdings Inc. (DMCI) in the town of Narra. Grizelda Anda, a lawyer and spokesman of the Palawan Alliance for Clean Energy (Pace) said the project, once operational, will cause pollution and threaten people’s lives and destroy the environment. Palawan is considered as the country’s last ecological frontier. Anda said the people, particularly in Barangay San Isidro, were not properly consulted about the project. “There was no consultation. Even without public consultation, the project was endorsed by local officials,” she said. She added that the project was endorsed by the barangay, the municipal and provincial government. Eventually, it was approved by the Palawan Council for Sustainable Development (PCSD), but the people who stand to be affected by the project were left out in the dark of its potential adverse impact to human health, as well as their environment. The 15-megawatt coal-fired power plant is being eyed to augment Palawan’s energy needs. Palawan is also host to several nickel mines that will require huge amount of electricity. The group is armed with copies of a petition against the project signed by 6,000 individuals from all over Palawan, calling on the DENR to stop DMCI’s coal-fired power-plant project. The petition asked the DENR to refrain from issuing the required environmental compliance certificate for DMCI’s project. The group is also supporting a resolution urging the committees on ecology, natural resources and climate-change calling for an investigation into what they describe as “the anomalous approval by the Palawan

Council for Sustainable Development of the said coal power project.” “The project is the biggest threat to Palawan’s environment and wellbeing of the people. The coal project has been rejected three times already. Now, they want it in Barangay San Isidro,” she said. The proposed project site is an agricultural land and near a nickel ore dump site. A fish sanctuary, she said, is also very near the area where the coal-fired power plant will be constructed. Anda said the construction of a coal-fired power plant is inconsistent with the Palawan Island Power Development Plan which is supposed to push for the development of hydropower. “We are appealing to the DENR not to grant the Environmental Compliance Certificate for the project,” she said. Earlier, Party-list Reps. Carlos Isagani T. Zarate and Neri J. Colmenares of Bayan Muna and Luzviminda C. Ilagan of Gabriela filed House Resolution 2164 questioning the decision of the PCSD to issue a permit allowing DMCI to operate a 15-mW coal–fired power plant amid environmental, health and safety risks considerations. On May 28 PCSD issued a Strategic Environmental Plan (SEP) clearance for the project upon endorsement by the provincial board, even as Pace claimed that DMCI has not submitted an environmental impact assessment to the Environmentally Critical Areas Network board, a multisectoral body created to advise the local government unit in the protection, management and utilization of Palawan resources. The PCSD is a body created by Republic Act 7611 or the Strategic Environmental Plan (SEP) for Palawan Act. It is in charge of governance, policy guidance and implementation of the SEP, which primarily aims to protect the province’s environment and natural resources. Jonathan L. Mayuga

Body scanners join list of unused security equipment at airport

By Recto L. Mercene

ESPITE the funfare that attended their installation two months ago, the 14 units of brand-new EQO body scanners from Germany remain unused and have become mere “security decorations” at the Ninoy Aquino International Airport (Naia) departure terminals. The scanners, costing P12 million to P14 million each, arrived in July. They were installed to detect weapons and will be used in time for

the arrival of foreign guests during the AsiaPacific Economic Cooperation (Apec) summit here in November. Airport authorities said the 14 units would be distributed to the four passenger terminals of the Naia. When asked to comment, Manila International Airport Authority Spokesman David de Castro said the airport is waiting for the Office of Transportation Security (OTS) personnel to finish the training on the use of the scanners.

It was reported earlier that some personnel were sent to Germany, courtesy of the supplier, Smith Detection of Singapore, to train them on the use of the scanners. De Castro said those who were sent to Germany months ago were trained only on how to inspect the equipment. “Iba sa Germany, inspection of the equipment ang ginagawa nila doon. Now, training naman for the personnel who will actually man the body scanners ang kailangan.”

“We’re now training the personnel who will actually man the body scanners. We expect the scanners to be up and running by the Apec summit,” de Castro added. Some members of the OTS said the scanners have no available spare parts, such as “sockets” needed to operate the machine. According to a brochure from the supplier, the EQO millimeter wave scanners and x-ray machine are a pair of detectors, and installed to prevent would-be terrorists from bringing in guns and

other hardware. It is sensitive enough to detect metallic objects, but the “waves” are not powerful enough to show the anatomical outline of the body, a taboo for many passengers and those who are concerned with privacy. However, if a questionable object is detected, a separate, but twin accompaniment to the scanner subjects the passenger to a second inspection. If guns or other illegal devices are detected, then the passenger will be subjected to body frisking.

TheBroa

Business

Thursday, October 1, 2015

Demograph Time for Millennials to fle

By Cai U. Ordinario, Catherine N. Pillas, Lorenz S. Marasigan & Bianca Cuaresma

ith a median age of 23 years, Filipinos are considered among the youngest in the world. A median age of 23 years means that half of the population is aged below 23, while the other half is above 23. Since many Filipinos are relatively young and belong to the socalled Millennial generation, the country is in the best position to reap the demographic dividend. The demographic dividend, according to the United Nations Population Fund (UNFPA), is “a boost in economic productivity that occurs when there are growing numbers of people in the work force relative to the number of dependents.” “The best-selling point of the Philippines right now is its young work force,” Trade Undersecretary Adrian S. Cristobal Jr. said in a news briefing on Wednesday. Apart from being young, Filipinos are also among the world’s most-educated work force. A major advantage is their English proficiency, a skill that is required by the numerous call centers and outsourcing companies that have sprouted in the Philippines. Based on the 2010 Census of Population and Household, around 81.87 million Filipinos were aged 5 and above. Only 3.31 million did not complete any grade in elementary or year in high school and college. Around 22.51 million, or 27.5 percent, were elementary undergraduates and below; and 9.54 million, or 11.7 percent, were elementary graduates. The Philippine Statistics Authority (PSA) reported that some 11.77 million, or 14.4 percent, were high-school undergraduates;

and 15.68 million, or 19.1 percent, were high-school graduates. There were around 7.71 million, or 9.4 percent, college undergraduates; and 8.29 million, or 10.1 percent, graduated from college. Cristobal said a relatively young work force will also help the Philippines attract more investments in the labor-intensive manufacturing sector. “Our demographics now is our strongest feature in marketing and promoting the Philippines as an investment destination. This young, literate and highly skilled population is a big driver of manufacturing,” he said.

Constraints

However, Economic Planning Secretary Arsenio M. Balisacan said the country may not be able to realize fully its demographic dividend relative to its neighbors. “The country faces a demographic window of opportunity where demographic dividends can be reaped. Studies estimate that demographic transition was responsible for about one-third of the economic growth experienced by East Asia’s ‘economic’ tigers during the period 1965 to 1995,” Balisacan said in a presentation at the Philippine Economic Briefing on Wednesday. “Our own studies, however, show that we may not be able to realize as much demographic dividend as our neighbors did,” he added. For one, the Department of Trade and Industry (DTI) said

many manufacturers consistently highlight the lack of human capital as a constraint in the Industry Development Program/Roadmapping Initiative of the agency. “There are always these horizontal-policy constraints in these 35 road maps we have so far, and human-resource development is always an issue,” Cristobal said. Launched in 2011, the roadmapping initiative is the main program of the DTI to spur the growth of the manufacturing sector and expand its contribution to national output. Its goal is to make the country’s manufacturing sector on a par with neighboring Southeast Asian countries. Manufacturing accounts for 23 percent of Philippine gross domestic product (GDP) and only 10 percent of employment. Government data showed that 3.2 million Filipinos are employed in manufacturing as of July 2015. Cristobal said the DTI has linked with the Technical Education and Skills Development Authority (Tesda) to work on a common problem aired by industries: skills deficiency. Tesda develops standards and programs to match the skills needed by particular industries with the training received by workers.

Investment priorities

To harness the potential of a young work force and to boost the country’s economic growth, Balisacan said the government must

age-sex pyramid of H

“The country faces a demographic window of opportunity where demographic dividends can be reaped. Studies estimate that demographic transition was responsible for about one-third of the economic growth experienced by East Asia’s ‘economic’ tigers during the period 1965 to 1995.” —Balisacan

cristobal: “Our demographics now is our strongest feature in marketing and promoting the Philippines as an investment destination. This young, literate and highly skilled population is a big driver of manufacturing.”

age group

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household population: 76.3 million (2000) 85 and over 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 Under 5 7

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Female

Percent to Household population

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www.businessmirror.com.ph | Thursday, October 1, 2015

hic window ex their economic muscle

Household population

age group

household population: 92.1 million (2010) 85 and over 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 Under 5 7

Male

Female

SINGSON: “Continuity will be a challenge, as it will depend on the next administration. But hopefully, they will adopt it as it is a good solution. What we are saying is rather than waste three or four years to do a road map, they can opt to adopt the current one.”

Percent to Household population Source: Philippine Statistics Authority

continue to invest in both human capital and infrastructure. “We must continue investing in socioeconomic resiliency while, at the same time, promoting more sustainable production and consumption patterns. These include disaster preparedness, income diversification, social protection and insurance,” he said. Balisacan said it is also important to strengthen and improve the country’s institutions, including political ones, as these play a “critical” role in development. “A peaceful and credible transfer of power in 2016 to a new administration and lasting peace in Mindanao will, likewise, be critical in reaping the growth potential of that region and lifting millions of our countrymen out of poverty,” he said. The Japan International Cooperation Agency (Jica) said the government must ensure the availability of facilities in other cities and provinces to create jobs for young people in rural areas. Demographics in the Philippines, according to Jica Chief Representative to the Philippines Noriaki Niwa, is monocentric. This means that most of the population flock to one city instead of being

distributed to other locations. Spatial structure in the greater capital region is highly concentrated in Metro Manila, and although developments are taking place in Clark, Subic, Tarlac, Batangas, Cavite and Laguna, they are considered to be at their early stages and are implemented under a rather uncoordinated manner. “Today everything is concentrated in Metro Manila. [Economic activities exhibit] a monocentric pattern, but we expect this to shift to a polycentric pattern,” Niwa said on Monday. He said decongesting Metro Manila and the emergence of growth centers could be done via the P4.76-trillion Roadmap for Transport Infrastructure Development and its Surrounding Areas. It calls for the establishment of a modern, well-integrated and -coordinated, and affordable transport system for Metro Manila and the adjacent areas of Bulacan, Pampanga, Cavite and Batangas. The system will consist of expressways, new roads elevated and on ground, railways elevated and on ground, subways, airports and seaports. Near-term components are for completion by 2016, while medium- and longer-term components are for completion by 2020 and 2030, respectively. Despite its cost and scope, Niwa believes that the Philippine government has the capability to complete the road map. “The government has enough funds to implement the road map. According to our study, if the Philippine government will only invest 5 percent of its GDP for infrastructure development in the years to come, the Dream Plan can come true. Metro Manila has a historic chance to make the plan a reality,” he said. Public Works Secretary Rogelio L. Singson said the government is committed to spend 5 percent of the country’s GDP by 2016 for infrastructure alone. “The transport road map is no longer a dream plan. It has been adopted by the Philippine government,” Singson said. The Cabinet official said, however, that implementing the project through 2030 will be a “challenge,” especially since there is a constant change in government leadership. “Continuity will be a challenge, as it will depend on the next administration. But, hopefully, they will adopt it, as it is a good solution. What we are saying is rather than waste three or four years to do a road map, they can opt to adopt the current one,” Singson said. Data from the Department of Budget and Management showed that government spending in the month of July rose by 92.9 percent to P38.3 billion versus the figure in the same month last year. This, however, was below the government’s target of spending P45.98 billion for infrastructure in July alone. It was 17 percent lower compared to the government’s self-imposed goal. Education Secretary Armin A. Luistro, for his part, said the Aquino administration has “actively invested” in the country’s human capital. Luistro noted that the government increased its allocation for education and health care. He noted that the budget for education rose to P453 billion this year, from P225.1 billion in 2010. Also, the budget for the Conditional Cash-Transfer Program, which encourages school attendance among children from poor households, expanded to P62.3 billion

this year, compared to P10.9 billion in 2010.

Demographic window

“If we get it right, sustained GDP growth of about 7 percent yearly could bring us to higher middleincome economy status [per capita of $4,125] by the end of the next administration,” Balisacan said. He said sustained GDP growth of 7 percent for three more administrations could bring the Philippines at or near high-income economy status (per capita of $12,746) by 2040. Cristobal said the Philippines could enjoy this demographic advantage for two more decades. But data from the PSA indicated that the Philippines must act with a sense of urgency to be able to take advantage of this demograhic window of opportunity. PSA data showed that the country’s aging index, or the proportion of persons aged 60 and over per 100 persons under the age of 15, was computed at 20.3 percent in 2010. This means that there is one person aged 60 and over for every five children under 15 years old. However, data showed that the aging index in 2010 was significantly higher than the 16.1 percent posted in 2000. Further, the country’s agedependency ratio—ratio of dependents (people younger than 15 or older than 64) to the working-age population (ages 15 to 64)—is declining. World Bank data showed that the country’s dependency ratio declined from 61 percent in 2010 to 58 percent in 2014. Between 2005 and 2009, the dependency ratio declined from 68 percent to 62 percent. Last year University of the Philippines School of Statistics Dean Dennis Mapa said the Philippines needs to address the jobs challenge soon. If the country fails to provide jobs to those entering the demographic transition, Mapa said it will take around 40 to 50 years before the country can start reaping the demographic dividend again. He explained that when workers enter the labor force at around the age of 20, they have 40 to 50 years to be productive members of the labor force. But if, from the start, they do not have jobs, it will cost the Philippines its demographic dividend. Luckily, he said the Philippines has not reached the “goldilocks period” when the country’s total fertility rate (TFR) is at around 2.1 percent to 2.4 percent. This means the TFR is “just right,” as it is neither very high nor very low. The UNFPA data showed that the country’s current TFR is at 3.1 percent. Mapa said his study estimates that the country will reach the goldilocks period by 2020, assuming there are interventions done, or by 2030, under a “business-as-usual” scenario. “As countries move from large families [high fertility rate] into small families [low fertility rate], they pass through what is called a goldilocks period described as a generation or two in which fertility rate is neither too high nor too low,” Mapa said. “This fertility rate that is consistent with stable population is about 2.1 [the replacement rate of fertility]. The fall to replacement fertility is a unique and precious opportunity for higher economic growth—demographic gift or dividend,” he added.

Opinion BusinessMirror

A6 Thursday, October 1, 2015

editorial

The global economy’s new normal

he global economy is not growing as fast as it historically should and this poses a grave threat to emerging economies, like the Philippines, as it impacts their ability to tackle key challenges such as unemployment and poverty.

This, in essence, is the message we got from The Global Competitiveness Report 2015-2016, which was released in Geneva on Wednesday by the World Economic Forum. The report is an annual assessment of the factors driving productivity and prosperity in 140 countries. Competitiveness is defined as “the set of institutions, policies and factors that determine the level of productivity of an economy, which, in turn, sets the level of prosperity that the country can earn.” These indicators include areas such as infrastructure, innovation and the macroeconomic environment. This year’s edition found a correlation between highly competitive countries and those that have either withstood the global economic crisis or made a swift recovery from it. And the message it imparts to economic and political leaders is straightforward: Improve competitiveness and deploy policies that strengthen the economy to be able to absorb future shocks. Unfortunately, the report cited a general failure to embrace long-term structural reforms that boost productivity and free up entrepreneurial talent, which is harming the global economy’s ability to improve living standards, solve chronic unemployment and generate adequate resilience for future economic downturns. This paved the way to what it calls the global economy’s “new normal of slow growth.” The best way to address this, according to Columbia University Economics Prof. Xavier Sala-i-Martin, is for leaders to prioritize reform and investment in areas, such as innovation and labor markets, as this will free up entrepreneurial talent and allow human capital to flourish. The report’s Global Competitiveness Index (GCI) also finds a close link between competitiveness and an economy’s ability to nurture, attract, leverage and support talent. The top-ranking countries all fare well in this regard. But in many countries, too few people have access to high-quality education and training, and labor markets are not flexible enough. Unlike the larger emerging markets that are in a state of decline or stagnation, the report found bright spots in Asia. Among emerging and developing Asian economies, the competitiveness trends are mostly positive, despite the many challenges and profound intra-regional disparities. China and most of the Southeast Asian countries are performing well, the report said. The five largest Asean members—Malaysia (18th, up two), Thailand (32nd, down one), Indonesia (37th, down three), the Philippines (47th, up five) and Vietnam (56th, up 12)—all rank in the top half of the overall GCI rankings. The country’s favorable GCI ranking validates the expertise and management skills of our economic managers. As in recent years, they can help ensure robust growth rates for the economy despite the global headwinds. With the election fever about to engulf the entire country, however, our fundamental strength can easily change if we are not careful enough to elect a good leader. History dictates that our economic health depends on the character and ability of our Chief Executive. Only an intelligent choice can help us sustain and improve our economic gains. Since 2005

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The coming battle between good and evil John Mangun

OUTSIDE THE BOX

he term “Armageddon” has come to mean the final battle of “good” versus “evil” when presumably, good will win the war.

On another level, it is a coming together of forces each so strong and so opposite in nature that they cannot coexist without one eventually destroying the other. For example, we may have experimented as schoolchildren with mixing a strong acidvinegar—with a strong alkaline— baking soda. The violent confrontation between the two substances creates a rather innocent mixture of primarily plain water and sodium acetate. Sodium acetate is used to flavor snacks, like potato chips. There are many strong forces in the world economy today. Unemployment is far too high in the developed nations. Various strong forces are causing that unemployment including wages that have outstripped productivity in the last decades, automation replacing human workers in a variety of industries, and contrarily, cheaper wages allowing for increased employment in undeveloped countries. This is creating forces of social and political unrest, as well as geopolitical upheaval. Governments, corporations and individuals around the world are carrying way too much debt that is

nonproductive in that this debt is not creating economic output or wealth for the borrowers. The lenders are not increasing their wealth either because the interest paid on that debt does not create any substantial monetary return. The commodity market prices are under pressure from both sides of the pricing mechanism; increased supply or substitutes and declining demand. Stock markets are being torn between economic and corporate fundamentals and the need for capital to find an asset or assets that can offer a reasonable wealthcreating rate of return. We have strong forces within other strong forces that are creating situations where severe damage is being seen as when that vinegar and baking soda initially explodes. However, there is a much greater clash of forces that is beginning. For countless centuries, people understood the natural cycles of the economy. Idol-making was a big business in ancient Greece. But the big problem for this industry was that the Greek pantheon of gods numbered in the hundreds.

Statues of Agon—male spirit of competition—were very popular during the Olympic Games, but after the games finished were then probably sold at bargain prices: “Buy one; take one.” The god Zeus was always a best seller, but how many Zeus statues could a person keep around the house? The business cycle—booms and busts—caused by natural and manmade factors have been present since time immemorial. Remember biblical Joseph and his advice to the Egyptian pharaoh about seven fat and seven lean years? In the 19th century, politicians and business leaders decided that the business cycle was either just a coincidence, or if it did exist, could be controlled by the government. One event that shook them was the US Panic of 1907 that saw the stock market fall by 50 percent. There were many causes including stock and commodity price manipulation, the San Francisco earthquake and—note this—a crisis of confidence in the government. It was decided that the government could control the natural ups and downs of the free-market business cycle. It was also decided that any previous downs, like 1907, was the fault of the government simply not doing a good job of controlling the markets. Two world wars, the Great Depression, and the post-war booms came and went, and economic “experts” were convinced that all the bad ones were only errors in government judgment and all the good were proper decisions.

Colombia’s chance for peace

olombia has a shattering history of violence. In the early 1990s the city of Medellin, a trafficking hub for cocaine, was the murder capital of the world. Then there’s the Revolutionary Armed Forces of Colombia (FARC), the leftist guerrilla army, fighting a brutal civil war that has claimed 220,000 Colombian lives since 1963. But old wounds can heal in South America. The drug wars receded years ago (Pablo Escobar is dead and Medellin wants your tourism dollars). Now the soldiers of the FARC are ready to come down from the hills. After three years of talks, Colombia’s government and the FARC say they have a formula to end their conflict. If the agreement sticks—still an “if”—the last of the big rebel insurgencies in Latin America would be over, with a clever twist: Guilty parties among both rebel and government troops who confess to war crimes would get leniency. But they would not get amnesty. Soldiers in other conflicts, from Nicaragua and El Salvador to South Africa, talked

and walked. The decades of chaos and killings in Colombia involve a tangled web of combatants and bad guys: the rebels, government forces, right-wing paramilitary groups and drug lords. Add a century or two of partisan strife and class warfare between peasants and landowners, and Colombia is a vibrant country where peace never sticks around for long. Here’s the best chance to change the dynamic. While the deal has many components, the crucial one is about seeking justice. Rebels long insisted they would not accept punishment for fighting what they considered a just war. But many Colombians, traumatized by the killings, kidnappings, torture and bombings, despise the FARC and want to see the rebels pay. The compromise agreement, reached in Havana last week, won’t be finalized until next year and requires ratification. It would induce fighters from both the rebels and the government to acknowledge their crimes before a special tribunal. If they hold nothing back in their tes-

timony, they would avoid jail time, agreeing to serve five to eight years of restricted liberty—some form of farm work or other community service as a way of making amends. If they are caught lying to the tribunal, they could serve 20 years in jail. There’s a lot of vague sketch work in the agreement that could allow soldiers to accept a light sentence and slink away, or never show up at all. They’d have a place to hide: among drug gangs that still thrive. Some Colombians are incensed by the deal-making. Former President Alvaro Uribe, whose tough military actions helped draw the FARC to the table, said treating loyal government soldiers and “terrorists” as equals before the law amounts to a sellout. On Twitter, Uribe has trashed the deal using the hashtag “agreement of impunity.” Some human-rights officials also question whether “restricted liberty” goes too easy on killers. But the fact is Colombia didn’t defeat the FARC, so this is a negotiated settlement, not a surrender. There is also an imperfect track record of

I was fortunate to live in a brief window when the business cycle gained respect before it was rebuked again leading to the mess we are in today. Chairman of the Federal Reserve (the Fed) Paul Volcker wrote a book in 1978 called The Rediscovery of the Business Cycle. Arthur Burns, Fed chairman before Volcker, wrote that the business cycle was really “invictus” or invincible. Today marks the turning point at a peak in the economic confidence cycle that signals a downtrend of confidence in the government to try to control the business cycle. The Armageddon will be the governments trying to retain power and the markets trying to take the power back. Governments will not give up their power easily and will do everything from curtailing the use of cash to ruthlessly penalizing people who want to save rather than spend. The free market will fight back with demanding higher interest rates to loan money to governments and by buying stock markets higher. Quantitative easing will begin again to try to stop interest-rate increases. Government and corporate debt defaults will occur. The last two months have seen extreme market price volatility and lack of liquidity. This is just the beginning. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

the government holding combatants responsible for war crimes. Some paramilitaries demobilized in exchange for lenient treatment and some Colombian soldiers have been convicted in civilian courts of committing human-rights violations. Colombia expert Adam Isacson of the Washington Office on Latin America tells us that if confessions get soldiers and rebels five years of restricted liberty instead of decades in prison, “many of them will go for that.” Tribunals and truth commissions have had mixed results bringing closure and justice to civil war victims. They worked in South Africa but struggled to move forward in Cambodia. They never got off the ground in Northern Ireland. This is war-weary Colombia’s chance to put its past aside in a way that upholds respect for the law. Skeptics are right to point out the flaws and weaknesses of a stressed democracy. But if Colombia pulls off this peace deal, including real penalties to offenders, it puts the country on much stronger footing. TNS

Opinion BusinessMirror

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BIR’s new regulation on the contents of CRM/POS invoices and receipts Atty. Ronald S. Cubero

Tax Law for Business

ith respect to the contents of invoices and receipts, recall that the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) 12-2013 on May 2, 2013, which laid down the required information to be indicated on the invoices and receipts. This RMO, however, expressly excluded the taxpayers that use receipts/invoices issued through cash-register machines/point-of-sales (CRM/POS) machines and computerized accounting system. Such RMO says that CRM/POS machines are regulated in separate revenue issuances. On July 21, 2014, the BIR this time issued RMO 27-2014, prescribing the policies and procedures in the accreditation of CRM, POS and other sales machines. In this RMO, the data required to be reflected on the tape receipt or invoice include (1) business name; (2) registered taxpayer’s name with BIR; (3) taxpayers identification number (TIN); (4) address where the machine will be used; (5) receipt/invoice number; (6) machine model accreditation number; (7) date of transaction; (8) quantity; (9) product description; (10) amount of transaction; and (11) the phrase “This serves as an official receipt.” On the above data and information required to be printed on the receipts and invoices, many value- added tax (VAT) registered taxpayers have noticed that there appears no name, address and TIN of the buyer listed therein. As a result, these taxpayers are in limbo where they will indicate such information in compliance with the VAT invoicing and accounting requirements. As we all know, such information is vital to a VAT-registered person insofar as their substantiation of input taxes is concerned. Absence of those will result to denial of the related input tax. In order to address the above pressing concerns of many taxpayers, the BIR recently issued Revenue Regulations (RR) 10-2015, dated September 21, 2015. In this RR, in addition to the directive to use nonthermal paper, it provides information that shall now appear on the receipts/invoices generated from CRM/POS/other similar machines. The information that shall now be indicated on the receipts for sales of services or invoices for sales of goods generated from CRM/POS/ other similar machines includes (1) taxpayer’s registered name; (2) TP’s business name/style; (3) a statement that the taxpayer is VAT- or non-VAT-registered, followed by the TIN and 4-digit branch code; (4) machine identification number; (5) detailed business address where such receipts/invoices shall be used; (6) date of transaction; (7) serial number of the receipts/ invoices printed prominently; (8) a space provided for the name, address and TIN of the buyer; (9) description of the items/goods or nature of service; (10) quantity; (11) unit cost; (12) total cost; (13) VAT amount; (14) breakdown of VATable sales, VAT amount, zero rated sales, and VAT- exempt sales if engaged in mixed transactions; (15) The phrase “This document is not valid for claim of input tax” in bold letters shall be conspicuously printed at the bottom of the non-VAT receipts/invoices; (16) the word “exempt” shall be indicated prominently at the face of the nonVAT principal receipts/invoices whose transactions are not subject to VAT or percentage tax; and (17) the breakdown of sales subject to percentage tax and exempt sales on the non-VAT principal receipts/ invoices if the taxpayer is subject to percentage tax under Title V of the NIRC, but also sells goods/services under Section 109 (A) to (W), excluding (E) of the same Code.

It is clear that a space for the name, address and TIN of the buyer in the receipts/ invoices of CRM/POS is now required, which answers the lingering question of many VAT-registered taxpayers. And the mixup mystification of many taxpayers—whether the information required under manually issued receipts is also applicable for CRM/POS receipts and invoices—is now settled. Similar to RMO 12-2013 relative to manually issued receipts, this RR also requires at the bottom portion of the CRM/POS receipts/ invoices the (1) name, address and TIN of the accredited supplier of CRM/POS/other similar machines; (2) accreditation number and the date of accreditation of the accredited supplier; (3) BIR final permit to use number; and (4) The phrase “This invoice/receipt shall be valid for five years from the date of the permit to use.” Moreover, a space shall be provided for (1) senior citizen/PWD TIN; (2) OSCA ID/PWD ID; (3) Senior citizen discount/PWD discount (show detailed breakdown of 20percent discount and/or 12-percent VAT exempt); and (4) signature of the senior citizen/PWD. For those taxpayers, however, whose transactions are not covered by Expanded Senior Citizens Act of 2010, the above information may no longer be indicated. In sum, as can be gleaned from the above-listed information, it is crystal clear that a space for the name, address and TIN of the buyer in the receipts/invoices of CRM/ POS is now required, which answers the lingering question of many VAT-registered taxpayers. And the mix-up mystification of many taxpayers—whether the information required under manually issued receipts is also applicable for CRM/ POS receipts and invoices—is now settled, because the information required under the manually issued receipts under RMO 12-2013 was substantially adopted also under this RR. Ergo, with this recent issuance of the BIR, the story of confusion regarding the content of the CRM/POS invoices and receipts is now finally settled. The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services (WTS) Alliance. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at ronald.cubero@bdblaw. com.ph or call 403-2001, local 350.

Thursday, October 1, 2015

Walking in the ways of the Lord Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

lessed shall you be who walk in the ways of the Lord! (Psalm 128:1-2, 3, 4-5, 6). God made them male and female; they are no longer two but one flesh. To enter the kingdom of God, one must be like a child with complete trust in God (Mark 10:2-16).

Blessed is the person who fears the Lord

your grain for food or drink your wine (cf. Isaiah 62:8-9). God’s favor will also be experienced in having a happy and large family: the wife like a fruitful vine and one’s sons like olive saplings. A large family is a sign of fertility and prosperity, providing companions through life, partners in work and protectors in a hostile environment. Such is your blessing, if you fear the Lord. And may God bless you from His sacred dwelling place in Zion, and may you share in the favored city Jerusalem’s prosperity all the days of your life!

Like a wisdom piece of writing, Psalm 128 instructs, rather than addresses, God directly in praise or in petition. It begins with a beatitude: Happy are all who fear the Lord and follow His ways. Fear of the Lord is characteristic of the righteous person. It is not an abstract attitude but involves concrete fidelity to the ways of the Lord. It denotes tremendous awe at the marvels and power of God, which moves one to live in accord with the will of the Almighty and would not take any risk that might lead to separation from God. Fear of the Lord is not terror at being mistreated, but uncertainty should one be negligent in one’s obligations proper to the relationship with the Lord. The blessings promised begin with the good fortune of enjoying the fruit of one’s labor, and not somebody else eating the fruit of what one planted (cf. Isaiah 65:21-23). In other words, no enemies shall have

God made them male and female

Divorce among the Jews was permitted by law; debated were the grounds acceptable for divorce. The Pharisees were trying to get Jesus to take a position on the public question of appropriate reason for breaking up marriage. Also, they would have wanted to see if Jesus would disagree with Moses or show fidelity to the tradition of Moses. Jesus did not engage in the debate on divorce,

taking neither the conservative position allowing divorce on the ground of adultery nor a more liberal stand, but brought clarity to the whole issue by challenging his opponents’ fidelity to God’s will regarding the union of husband and wife. He went beyond the Mosaic Law back to the original intent of God in creation. In God’s design the couple in becoming one flesh should not be separated in any man-made breakup. In making His stand on the divine intention of permanent marital union between a man and a woman, Jesus taught that absolute fidelity must characterize our relationship with God which should be reflected in a husband-wife union joined together by God. Called to a covenant bond with God and created in God’s image, human beings are challenged to a radical fidelity. Hardness of heart has been driving men to promote divorce; Moses himself had to resort to some damage-control by regulating the writ of divorce. Jesus now calls the whole setup as the road to adultery.

The Kingdom of God belongs to the childlike

AS unmistakable as His stand on divorce, Jesus was indignant over the behavior of His own disciples who rebuked children away. In conventional social awareness, children were not important and so should not be bothering Jesus. The disciples, however, have been previously told by Jesus that embracing the child, the symbol of the least, will bring

them to the consciousness of God, into the Kingdom of God. Apparently they were not ready for this. As Jesus told them not to stop the outside exorcist, now He tells them not to stop children. They must be welcoming, not exclusive, trusting in the abundance of divine love. For Jesus, the children are the symbol and model of those who would enter the Kingdom of God. One must become like a child to be able really to accept God’s reign. In their weakness, dependence and insignificance, children have the innocence and openness and trust to abandon themselves to the love of God. The reign of God must be accepted and entered into with the unself-consciousness of a child. A child, ever conscious of its need for someone who cares, does not have the delusion of complete independence or the fantasy of self-invention. Alálaong bagá, who are the happy ones who fear God and walk in the ways of God? Fidelity to God’s will must be the one direction in anyone’s life and in every human relationship. The union of a husband and a wife is a divinely preordained and primordial sacrament of sharing in God’s generosity and compassion. To trust and persevere and walk in that communion is the child-like way of entering into God’s reign. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.

When graft corrupts the heart of a nation Ariel Nepomuceno

DECISION TIME “The time to guard against corruption and tyranny, is before they shall have gotten hold on us. It is better to keep the wolf out of the fold, than to trust to drawing his teeth and talons after he shall have entered.”—Thomas Jefferson

orruption is a difficult and cumbersome dilemma of any nation. It’s rooted from the fundamental political and social history of the country’s major institutions. Its direct negative effects on economic development are obvious and undeniable. According to the Asian Development Bank, corruption is commonly defined as the misuse or the abuse of public office for private gain. Bribery occurs when a gift, favor, payment or monetary consideration is offered, made, sought or accepted to influence a business objective. In several countries where bribery and corruption is illegal, significant penalties, including prison sentences, are imposed. These illicit activities may involve government officials and personnel, private companies or even individuals, and may be committed through third parties. Interestingly, corruption comes in all shapes and sizes. It can involve bribes, influence peddling, fraud, embezzlement, theft, extortion and tampering or falsification of records. For instance, bribery is commonplace in the grant of government benefits; contracting and procurement of goods and services; payment of taxes and imposts; licensing and permitry; acceptance of gifts and hospitality; payment of facilitation fee to speed up government action; and issuance of regulations or rules to favor one business over another. These nefarious transactions can happen inside and outside Philippine jurisdiction. On the other hand, theft and embezzlement in the public sector normally occur in the area of government assets that range from minor stealing of office equipment or supplies to massive erosion of funds from the treasury, with personal bank accounts of government bureaucrats getting heftier day by day due to unlawful and shameless deposits of tax proceeds, licensing fees and other unimaginable amounts which they normally receive in the course of their work. In the political arena, corruption is well entrenched in the enforcement of election laws, especially in the field of campaign contributions, passage of

critical legislation facilitated by graftridden lobbyists; and patent conflict of interest situations confronting some government officials. There is hardly any difference between the interest of their respective government offices and that of their private businesses or enterprises.

Limited controls Unfortunately, gaps and limitations in financial control, audit and accountability systems encourage this kind of behavior. Some institutions would have this, but the existing political culture does not allow or encourage compliance.

Cause of corruption However, there can only be corruption if there are those who continuously corrupt. The private sector has a very big contribution to this hounding problem. Some companies and business enterprises are so results-driven that they also do unethical shortcuts; illegally transact with government by paying kickbacks; extending nonmonetary benefits in exchange for favorable business outcomes; and meeting their key performance targets. Earning profit is not wrong nor is it immoral. It becomes one when everything, be it illegal or unethical, is offered at its altar. Public greed feeds on private avarice and vice versa. What causes corruption? Both academic and sociopolitical research attribute this phenomenon to our civil servants’ demoralization and poor work habits that flow from very low salaries, less or nonexistent career-progression opportunities. In turn, this fact engenders patron-client relationships that develop and entrenches at a very fast pace. Additionally, the sheer lack of financialcontrol mechanisms; nonenforcement of government offices’ code of ethics and internal rules; unbridled or uncontrolled

grant of discretion to manage budgets; structural weaknesses of watchdog institutions; and long, ineffective court processes have all led to the unwritten rule that when everyone does it, it must be acceptable behavior. While international conventions and even local laws in most of the countries around the world have outlawed and criminalized bribery and corruption, this malady persists like a deeply invasive virus. The effects are deadly. And deadly is the word that describes how bribery and corruption impacts on economic progress.

Huge collateral damage When corruption becomes a systemic feature in the fabric of any country’s life, the government and its personnel get distracted from its duty and the performance of its mandate to the people. It wrongfully focuses on activities that will result to personal gain and enrichment rather than producing and enforcing policies that promote a healthy investment climate; predictable and consistent rules on entry and maintenance of businesses; respects and preserves of sanctity of contracts and property rights; establishes a strong judicial and enforcement regime for commercial and transactional violations; consistent application of local and national rules on land use and classification, permits and taxes; and abolishment of unreasonable legal restrictions in trade and commerce. Leveling the playing field sans bribes, gifts or personal favors should be the norm and not just a hollow promise. Undeniably, systemic corruption turns off foreign-exchange markets, funding institutions, investors, global trading partners and the market, in general. Most often than not, foreign governments stop giving aid or support to corrupt regimes. And the poor gets the brunt of its economic, not to mention political and social costs.

Current battle President Aquino made antigraft and corruption the centerpiece of his government in 2010. Daang matuwid was the battle cry, and his justification was ’pag walang corrupt, walang mahirap. His pledge to free the country from all forms of corruption was supplemented by his drive to enforce laws, such as the Revised Penal Code, the Anti-Graft and Corrupt Practices Act and the Code of Ethical Conduct for Public Officials. He made good appointments in the Supreme Court and other courts; strengthened and supported the Office of the Ombudsman and the Sandigan-

bayan in order to send a strong message that he means business when it comes to the issue of prosecuting, trying and punishing grafters. In the past few years, charges have been filed against corrupt government officials, and some popular and high-profile politicians have also been imprisoned. In his private and public speeches, he has consistently and openly chastised and ridiculed people whom he believed do not possess integrity and ethical values. Moreover, the international community and anticorruption groups lauded the President’s efforts at improving the country’s governance image by taking steps to create a competitive, fair and transparent environment for investors and entrepreneurs. Legislative, fiscal and monetary reforms have also been instituted to enhance said initiatives. Efforts have been shown to better the businessregulatory environment.

Long road However, much is still to be done. Fiscal incentives should be further developed and operationalized, tax administration should be made better and the private sector enlarged and supported, among others. Key amendments to the restrictive economic provisions of the Constitution remain to be an action item. More important, the enforcement capabilities of the agencies tasked to monitor, check and stop graft and corruption should still be intensified.

Modest victory in a protracted war

From 2000 to 2008, the Philippines has been doing miserably in terms of the Transparency International corruption index and was lagging behind other emerging Asian economies. However, since 2010, the country has shown tremendous improvement in this space. The Philippines ranked 85th out of 175 countries in the Corruption Perception Index (CPI) for 2014, an improvement from the 94th spot last year. According to Transparency International, the country received a score of 38 on a scale of 1 to 100. The CPI scores countries from 0 (highly corrupt) to 100 (very clean). But it is too early for celebration, and there should be no room for complacency. The Philippines still occupies the lower two-thirds of 175 countries with scores below 50. The journey has just begun and all the gains in curbing graft and corruption should be sustained regardless of who occupies Malacañang next year. Our fate lies in our very hands.

2nd Front Page BusinessMirror

A8 Thursday, October 1, 2015

SMC’s Ang says there’s room for 3rd telco player

By VG Cabuag

amon S. Ang, president and COO of conglomerate San Miguel Corp. (SMC), said there is room for a third telecommunications firm and vowed the one the company should soon offer will be better than the two big players now in operation. Ang said that its partner, Australia’s Telstra, should not have a hard time investing in the joint venture the two firms are creating. “Whatever contribution that they [Telstra] will put in is nothing to them because they are a very big company,” Ang said. He did not discuss details like how much Telstra will invest, but said that its network will focus on mobile broadband that will run on both wired and wireless network. Telstra previously confirmed it

is in talks with San Miguel. “The moment that our telco will be operational, it will give a better service to everyone,” he said. “We are building a network that will provide our countrymen a good network that will at least work. It will be a better network [than the two current networks].” Ang added there is room for one more player in the manner of other countries where there are at least three carriers. At t he moment, t he ma in

Energy dept bares El Niño action plan for Mindanao By Lenie Lectura

he Department of Energy (DOE) on Wednesday released an action plan to mitigate the impact of El Niño in Mindanao. Among the plans drawn up include an intensified energy efficiency and conservation campaigns; implementation of the Interruptible Load Program; ensuring minimal forced outages of power plants; managing the maintenance schedules of power plants, transmission and distribution facilities; optimization of the dispatch protocol for power plants with hydropower plants serving as peaking requirement; and deployment of modular generator sets. The agency, according to Energy Undersecretary Loreta Ayson, has also created “Energy Task Force on El Niño” to address the power-supply situation in Mindanao, which is largely dependent on hydroelectric power plants. The members of the task force include the DOE, National Power Corp., Energy Regulatory Commission, power generators, private distribution utilities and electric cooperatives. “For Mindanao, the power situation will be a challenge in the event of moderate to severe El Niño since the share of the hydropower plants in Mindanao is accounted for 50 percent and 42 percent in the powergeneration mix in 2014 and January to June 2015, respectively,” Ayson said. Moreover, the DOE has coordinated with the National Renewable Energy Board (NREB) to verify the capacity used for Variable Renewable Energy (VRE) sources such as solar, wind and biomass from October 2015 to June 2016. For hydroelectric power plants, the DOE requested operators of hydropower plants to provide a weekly average available capacity for the same period with the VRE plants, since hydro plants will be the most affected by the impact of the El Niño. The DOE will continue to provide an updated simulation of the power outlook with El Niño scenario once it has gathered the data and finalized the simulation, Ayson added. Based on the initial simulation of the DOE, “in the absence of any increase in forced outages in the power plants for Luzon and the Visayas, the power situation will be manageable.” For Mindanao, however, the worst could be felt toward the end of 2015 up until the first quarter of 2016. Earlier, DOE Officer in Charge Zenaida Monsada said the agency estimates a 13,300-megawatt (MW) power supply to be available in 2016. Demand, meanwhile, is estimated to reach 12,000 MW, she said. “The committed capacities, if they come in on time, could meet up to the contingency reserve requirement of the country by 2016,” Monsada said. Broken down by major island groups, the DOE estimates the power supply in Luzon to reach 9,800 MW in 2016, while that for the Visayas is 1,800 MW. Mindanao is expected to have a supply of 1,700 MW for next year, as against an anticipated demand of 1,500 MW.

telecommunications brands are owned by either Philippine Long Distance Telephone Co. (PLDT) and by the Ayala-led Globe Telecom Inc. All others have been bought out by these two players. Ang said the telecommunications business is one of the company’s major projects in the medium term and comes on top of its capital-intensive power-generation projects. The enterprise was seen to at least double the conglomerate’s revenues to $40 billion to $50 billion in five years. San Miguel, in partnership with the Qtel Group, currently backs the company that operates the wi-Tribe brand, which focuses on providing 4G technology. The business, however, hardly made a difference in PLDT through its Smart Communications Inc. and for Globe Telecom. “We hope to build more infrastructure projects for our country and hope to provide a good telecom or a working telecom network,” Ang said. San Miguel said its income in the first half fell 8 percent to P16.8 bil-

lion, from P18.4 billion as a result of huge foreign-exchange (forex) losses. Excluding the effects of forex adjustments amounting to P18 billion, this was 15 percent higher than last year’s P15.7 billion. The company incurred P1.1 billion in forex losses as of June 30. Revenues, meanwhile, dropped by 16 percent to P338.8 billion from last year’s P404.9 billion, as a result of unfavorable crude prices at the start of the year, along with lower volumes for SMC Global Power resulting from the maintenance shutdown of its Malampaya gas facilities. The company said it had P40.7 billion in consolidated operating income in the first half, a 23-percent increase over the same period last year, on the back of a 5-percent combined revenue growth in its core businesses, the significant profit recovery of Petron Corp. in the second quarter as a result of more stable crude-oil prices, and higher contribution from its infrastructure business. Consolidated earnings before interest, depreciation and amortization aggregated P51.8 billion, 14 percent higher than 2014.

B.O.I., peza see 8-percent investment drop next year

he Board of Investments (BOI) and the Philippine Economic Zone Authority (Peza), the country’s two major investment- promotion agencies, are expecting a combined 13-percent growth in investments this year but slower growth of 8 percent is seen next year. Data obtained from the Department of Trade and Industry (DTI) and presented during the Philippine Economic Briefing showed that the combined investments target for Peza and the BOI for 2015 stands at P719.4 billion, a 13.4-percent improvement over the actual combined investments of P634.2 billion last year. Of the total, the BOI, which mostly registers domestic-oriented investments, is expected to haul in P390.2 billion, a 10-percent improvement over the actual investments recorded in 2014 at P354 billion. Peza hopes to net P329.2 billion this year, an improvement of 17 percent over 2014’s P279.5 bilion. Peza, which caters to exporting firms, have narrowed its deficit in investments to -2.7 percent as of September, and expects several big-ticket American and Taiwanese manufacturing investments to come in the last quarter. This was echoed by outgoing Trade Secretary Gregory L. Domingo, who hinted at the establishment of “mega

Subic doubles container volume to 83,000 TEUs

A container ship unloads cargo at the New Container Terminal in the Subic Bay Freeport. Henry Empeño

By Henry Empeño Correspondent

UBIC BAY FREEPORT—The Subic Bay Metropolitan Authority (SBMA) has reported the continuing growth in container shipments here since the Port of Subic was named an alternative port to ease container traffic congestion in Metro Manila. According to SBMA Chairman Roberto Garcia, the volume of container shipments in Subic doubled as of August this year, reaching more than 83,000 twenty-foot equivalent units (TEUs) compared to 43,000 TEUs for the same period last year. Garcia said the unprecedented 93-percent increase could be attributed to efforts by the SBMA and its partner-business locators to ensure ease in cargo processing at the Port of Subic, as well as other marketing initiatives, in the face of continued port congestion in Manila.

“We are the only port in Luzon that has a one-stop shop, and this gives us the competitive edge,” Garcia said in a news briefing here. “[Port users] come to our container port, go to our one-stop shop where offices of the SBMA, Customs and the LandBank [Land Bank of the Philippines] are there all in one place, and in just a matter of 30 minutes, their papers are already processed,” Garcia pointed out. “The one-stop shop and our marketing programs, such as the two recent maritime summits and the formation of a Maritime Technical Group, are all coming into play right now,” he added. The SBMA official also said that at the rate the Port of Subic is performing, authorities here expect the shipping volume this year to double last year’s year-end record of 77,000 TEUs. Garcia also concurred with Sen. Ferdinand Marcos Jr., who said in a

www.businessmirror.com.ph

recent forum here that Subic is the answer to the current traffic congestion in Manila. “Senator Marcos hasn’t been here for some time but he was really impressed with Subic. We are really pushing very hard to increase the volume here to help decongest Manila,” Garcia said. Garcia also stressed that Subic Bay is the only port in the western seaboard of the Philippines that still has enough capacity to handle additional container volume. “Unlike the Port of Batangas, which has now reached its full capacity, shippers can come to Subic anytime,” he said. The SBMA Seaport Department said that, as of now, seven major shipping lines regularly call on the Port of Subic, unloading and loading container cargo and various kinds of bulk items. The regular callers include Wan Hai, Maersk, APL, NYK and SITC, some of the biggest commercial shipping lines operating worldwide.

factories” within the year. The BOI, as of May, has experienced a 20.2-percent growth. However, for 2016, the outlook is dimmer as both investment-promotion agencies see tempered growth in investment inflow. For the BOI, the investment target is at P417.5 billion, reflecting a slower growth target of 7 percent over the 2015 target. Peza, meanwhile, also only see a 10-percent growth in 2016, or P362.1 billion. Taken together, the total expected investment haul in 2016 is at P779.6 billion, a contracted growth of 8 percent, compared to 2015’s 13percent growth Taken together, the total expected investment haul in 2016 is at P779.6 billion, a contracted growth of 8 percent, compared to the 13 percent seen by year-end this 2015. According to the DTI, the sluggish growth can be credited to the changes made to the Investment Priorities Plan from 2014 to 2016, which now specified the specific activities of sectors eligible for government incentives. “For 2016 approved investments is seen to continue to increase but at a slower rate at 7 percent, considering that the Investment Priorities Plan is now more focused and keys in on relatively fewer, more strategic sectors,” according to the DTI’s briefing notes. Catherine N. Pillas

Retailers see 8% sales growth this year through 2017

he Philippine retail industry is banking on the onset of a “consumption sweet spot” to realize an annual sales growth of at least 8 percent from this year through 2017. At the launch of the Asia-Pacific Retailers Convention and Exhibition (APRCE) 2015, Philippine Retailers Association (PRA) President Lorenzo Formoso said that consumer spending is foreseen to accelerate starting this year until 2017. “No less than the Chief Executive advised us, some 17 retailer groups, that this consumption sweet spot will happen from 2015 until 2017, when a large part of the population will reach the working age and spend more,” Formoso said. He expressed confidence that this phenomenon can accelerate the estimated 5- percent to 8-percent growth of the retail industry over the next few years, possibly even reaching 10 percent in the long term. According to PRA data, retail sales have increased by 1.5 percent in May over the same month last year. This is a minimal slowdown from the previous month’s growth of 1.8 percent. Consumption spending has already reached P6 trillion, according to PRA Chairman Roberto “Toby” Claudio Jr. This prediction can be further propped up by the establishment of at least 20 more malls, nationwide, in the next couple of years, Formoso added. The first step toward this faster growth, however, is promoting the Philippines as a shopping mecca on a par with Singapore and Hong Kong. “We’re not trying to compete with other shopping destinations but we want to be considered in the same group, we want to be top of mind when foreign tourists think of shopping,” Formoso said. To raise awareness of the Philippines as a viable shopping destination in Asia, the PRA has partnered with the Department of Tourism (DOT) to hold a Philippine Shopping Festival this year, from October 23 to November 8. The two-week sale is being eyed to be an annual event to carve out the Philippines as a shopping spot. The PRA and the DOT has partnered up this year with 14 shopping mall chain operators with more than 40 retail establishments to be participants in the festival. Catherine N. Pillas