VISTA RESIDENCES TURNS MANILA INTO ONE OF TOP INVESTMENT CITIES IN THE WORLD Property»E1
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THREETIME ROTARY CLUB OF MANILA JOURNALISM AWARDEE 2006, 2010, 2012
U.N. MEDIA AWARD 2008
A broader look at today’s business TfridayNovember Wednesday, March18, 25,2014 2015Vol.Vol.1010No.No.40167
www.businessmirror.com.ph INSIDE
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EAR Lord, we must have the courage and honesty to have a straight look at our spiritual condition, evaluate it in the light of the demands of the Gospel, and take appropriate action. The beginning of the Lenten Season is sure a most appropriate moment for such a thorough evaluation of our present spiritual condition, as well as for planning the necessary “structural” and “operational” reforms.. May we all be in the state of grace and sacrifice this Lenten Season. Amen. WORD AND LIFE, FR. SAL PUTZU, SDB AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com
Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com
APPLE CEO Tim Cook during the launch of Apple Watch earlier this month. AP
Life
PHL seen to miss 2015 growth goal
SILICON VALLEY MEETS SWITZERLAND IN A LUXURY ANDROID WATCH »D2
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Wednesday, March 25, 2015
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THE best-selling Samsung Galaxy Note Edge
GLOBE GETS AN ‘EDGE’
Pins and needles for Apple Watch app makers
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EVELOPER Curtis Herbert worries that a winter’s worth of work on an Apple Watch app will come to nothing. Herbert and other independent developers haven’t gotten nearly as much guidance from the tech giant as they’d like. They’ve had no access to the watch to test their work, and little direction on how to land a coveted spot in the virtual Apple App Store. Apple “might rip my app to shreds,” said Herbert, whose Slopes app would serve skiers and snowboarders. The success of the Apple Watch—set to go on sale on April 24—will depend largely on the quality of apps built for its tiny screen. But critics have questioned whether a “killer app” will emerge, one that can transform the Watch from a novelty or fashion item into a breakout hit, like the iPhone or iPad. Such an app or apps would arise from the thousands of developers’ submissions that the company plans to stock in the Apple App Store. But except for a softwaredeveloper kit Apple handed out months ago, most app developers have been left in the dark. The stakes are high for developers. It’s not expensive to develop most apps, but the rewards of being among the first to offer apps could be great. It’s hard for new apps to get noticed amid the million-plus apps available for iPhones and iPads. But the limited number of Watch apps now offers better odds of them going viral, said Aaron Wadler, chief executive of ShopPad.
These are the “Golden Days” for the Apple Watch platform, said Wadler, whose company is developing a Watch companion to its iPhone app, Chameleon, which notifies wearers of special deals when they walk into a store. The potential upside, combined with the uncertainty of the selection process, makes him nervous. He has little idea what app advertising or inapp purchase design should look like. “We’re having to imagine and extrapolate and read the tea leaves of Apple,” he said. Herbert, an independent developer, is eager to see how Slopes looks on an actual watch. His iPhone version of Slopes is used by skiers and boarders to track their routes on the mountain with lively animations that show speed and altitude change. The app makes more sense on a wrist device for snow-sports enthusiasts wearing gloves and heavy clothes. Dealing with a tiny screen size, though, has been a challenge. He said he’s seen screen shots of other apps in development where the font size is too small or the colors don’t have enough contrast. Apple is beginning to accommodate app developers—sort of. It has invited developers to travel to Apple headquarters in Cupertino, California, to try out their apps on real Apple Watches. For Herbert, that means flying to California from his home in Collegeville, Pennsylvania. Once he’s got the look right, Herbert will have to wait for his app to be approved, and the company has offered little information about the process. An Apple spokesman declined to discuss the app approval process, except to say no Watch apps would
be shown in the Apple Store until after the device goes on sale. Bigger companies working directly with Apple are more confident, but even some of them are having issues. Target boasts that its app will help guide people through stores, but the feature won’t be ready by launch. An uncertainty for almost everyone is what users will want in a smartwatch. Executives at Fandango, the movie-ticket-buying service, think they know one answer. Its Apple Watch app will display purchased movie tickets with a countdown clock before the movie begins—aimed, for instance, at families eating dinner at the mall before the show. “It’s a watch, and Fandango is well-suited to be aligned with the notion of time,” said company President Paul Yanover. About 50 percent of Fandango sales come from its mobile apps, which have been downloaded 45 million times. Ticket-buying won’t come to Watch soon, though. The Los Angeles company plans to gauge how users like the original ideas before developing more. Some companies, with big brand names and tech industry clout, don’t seem worried or impatient. Asked onstage at a recent tech industry event what communications app Snapchat might look like on Apple Watch, the Los Angeles start-up’s chief executive, Evan Spiegel, said that he hopes to design something but that it won’t come before he “hangs out” with the device. “If you have your phone with you...you probably want to watch photos and videos on the biggest screen you have around you,” he said. “I don’t think the best solution is repurposing our app for a smaller screen; it’s probably a new, innovative experience.” ■
GLOBE Telecom has acquired exclusive rights to carry the new Samsung Galaxy Note Edge in the Philippine market on the back of its strong partnership with Korean consumer-electronics giant Samsung. The leader in postpaid is offering the device exclusively to its distinguished customers through its premier postpaid brand Globe Platinum (www.globe.com.ph/platinum). www.globe.com.ph/platinum www.globe.com.ph/platinum). The ultra-premium device, which got its name from its Sleek Edge Screen feature, is a marriage of brilliant craftsmanship and luxurious feel that discerning customers can exclusively enjoy with a Globe Platinum postpaid plan. The Sleek Edge Screen not only adds dimension but also enables a seamless multitasking experience with applications running independently on the gadget’s attention-grabbing surface. This secondary display makes for additional screen options, like folders, application controls, personalized messages and ticker-style notifications. Note Edge also captures brighter, clearer images with its powerful 16MP Smart OIS rear camera and 3.7MP front-facing F1.9 lens camera that allows for 120-degree wide-angle shots. The device also powers up in a flash with faster charging time and higher batter capacity (3000mAh) that allows it to zoom from zero to 50 percent in only 30 minutes. Not to forget, the Galaxy Note Edge also comes with the über-handy S-pen that allows users to multitask and navigate through all of the productive and cool features of the device. During its unveiling last year, the Samsung Galaxy Note Edge made waves with the announcement of limited distribution in only 22 countries. With the arrival of the Note Edge in the Philippines through Globe Platinum, Filipino consumers get the privilege of becoming one of the few in the world to own the smart and stylish smartphone. Those who want to get their hands on one of the Samsung Galaxy Note Edge units can subscribe or upgrade their existing postpaid plan to Globe Platinum’s premium plans that come with unlimited calls and texts, worry-free mobile surfing, worldwide roaming services, and exclusive Platinum perks and privileges, such as a dedicated hotline, priority handling in Globe Stores, 24/7 concierge service, and exclusive discounts from partner establishments. “As one of the world’s premium devices, the Samsung Galaxy Note Edge has found a perfect telco partner in Globe Platinum. Both are meant for discerning customers who need a device that performs extremely well and is powered by a worryfree mobile postpaid service. We are excited to offer the Samsung Galaxy Note Edge to our customers who will be one of the few in the world to own it, once again giving them the exclusive privilege that Globe Platinum customers continue to enjoy. We want Filipinos to get their hands on this rare and revolutionary device powered by our robust network that delivers on superior service and world-class connectivity,” shares Globe Vice President for Platinum and Roaming Business Coco Domingo.
Watch your favorite shows and movies at home and on-demand RUSS REGASPI, SKY Broadband marketing head, talking up the features of SKY On-Demand.
B JT N WHEN the television set was unveiled at the turn of the 20th century, not everyone saw it as a breakthrough that would redefine the media landscape. One cynic even declared: “No one would stare at a box for hours.” Well, perhaps it’s safe to assume that the cynic did not pursue a career as a soothsayer. Recently at The Loft @ Manansala in Rockwell Center, Makati, SKYcable launched SKY On-Demand, its newest offering, with the hope of keeping viewers glued to their boxes even longer. The service, which runs on the company’s most advanced digibox yet, enables viewers to directly stream their favorite cable-TV content, both local
and foreign, on their telly in the supreme comfort of their own home. According to SKYcable COO Rodrigo Montinola, SKY On-Demand—billed as the company’s “Big Level-Up”—is for those who want to watch their favorite shows on a TV screen at their most convenient time for a fuller and much comfortable experience, which is something that you won’t get watching on the monitor of a desktop PC, or on the screen of a laptop or some other mobile device. “Our lives are the busiest they’ve ever been, so we want to savor our down time through the relaxation afforded by watching our favorite shows on our own terms,” Montinola said during the launch. “SKY On-Demand allows you to watch your favorite shows from the biggest TV networks and iconic films from award-
winning studios when you want it.” Available starting this month, the service banks on the growing video-on-demand library of iWantTV, including channels, such as AXN, Disney Jr. and Sony TV that will soon be made available. Also, the number of shows and channels available for streaming will depend on a subscriber’s current cable-TV plan. SKY On-Demand also features videoplayback functionality and personal playlist creation with a user-friendly interface. Existing SKYcable subscribers looking to avail themselves of the service only need to upgrade their digibox to the SKY On-Demand digibox through a onetime payment fee that starts at P499. For more information on the SKYcable’s newest offering, visit mysky.com.ph.
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THE WORLD REMEMBERS SINGAPORE’S LEE KUAN YEW BusinessMirror
World The
A MAN bows to pay his respects to the late Lee Kuan Yew at a community club where members of the public can gather to express their condolences on Monday in Singapore. Singaporeans wept and world leaders paid tribute, as the Southeast Asian city-state mourned the death of its founding father Lee. AP/WONG MAYEA E AYE-
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S Singapore’s prime minister ordered all flags in the country to be flown at half-staff for the week, condolences poured in honoring Lee Kuan Yew, the formidable but influential statesman who many considered modern Singapore’s founding father. “To many Singaporeans, and indeed others, too, Lee Kuan Yew was Singapore,” said Lee Hsien Loong, Singapore’s prime minister and Lee’s son, addressing the nation in English, Malay and Chinese, and struggling to choke back tears. “He fought for our independence, built a nation where there was none, and made us proud to be Singaporeans. We won’t see another man like him.” Lee’s body will lie in state in Singapore’s parliament for five days starting on Wednesday and a state funeral service is planned for Sunday afternoon. Many citizens expressed their sorrow in condolence books provided outside the Istana, Singapore’s official presidential residence, and
through Facebook messages and an online message board created by the government. “What words can be used to portray the long and arduous journey that he took to help turn a little red dot into one of the most admired countries in the world,” wrote Liew Patrick in one such tribute. “Every breath of fresh air, every drop of water, every morsel of food, every shelter above our heads …carries marks of his effort and contribution.” “A leader with an iron fist, they might say, but if this is what Singapore had to have to become the impeccably clean and efficient citystate it now is, we are more than thankful,” wrote Jeremy Teng in a Facebook post. “As you said, you did your best, and, indeed, so you did to make Singapore the best it could be.” World leaders also expressed their condolences to the leaders and people of Singapore on Monday. Indian Prime Minister Narendra
Modi called Lee a “far-sighted statesman and a lion among leaders,” in a message posted on Twitter. “May his soul rest in peace.” In a letter to Lee Hsien Loong, Chinese Premier Li Keqiang credited Lee with “opening the gate for the friendly cooperation” between the two countries, adding that Lee’s contributions to “China’s reform and opening up will surely be marked by history.” “Mr. Lee Kuan Yew was an old friend of the Chinese people,” Chinese President Xi Jinping wrote in a letter to Singapore’s president, Tony Tan, the Wall Street Journal reported. President Barack Obama called Lee a “visionary leader” who was “sometimes uncompromising” but who spearheaded Singapore’s incredible economic growth during his tenure. Expressing his condolences on behalf of “all Malaysians,” Prime Minister Najib Razak said that Lee’s “achievements were great, and his legacy is assured.” Los Angeles Times/TNS
GREEK, GERMAN LEADERS SEEK TO REBOOT RELATIONSHIP
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ERLIN—Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel sought on Monday to reboot an increasingly sour relationship, saying they are looking for ways to help Athens reach a deal with creditors that will keep it from falling out of the euro. In his first visit to Germany since coming to power in January, Tsipras sounded a conciliatory note—though he stopped short of promising anything concrete on reforms that creditors like Germany want to see before they pay more money. Greece urgently needs more funds, as it faces a cash crunch within weeks. Backtracking on some of his previously fiery rhetoric blaming Greece’s problems on German insistence on budget austerity measures, Tsipras said he wanted to “break the stereotypes that have grown in the past five years: The Greeks are not lazy and the Germans are not to blame for everything.” Tsipras said Merkel invited him to Berlin for talks as the tensions between the two countries increased, telling him “it is better to talk with one another than about one another.” “I did not come here to ask for financial help,” Tsipras told reporters after meeting with Merkel behind closed doors for more than an hour. “I came for an exchange of our thoughts and opinions, to see where there is common ground and where there is disagreement.” He characterized the talks as “positive,” saying he found Merkel “listens
GERMAN Chancellor Angela Merkel (right) points, as she and Greek Prime Minister Alexis TTsipras leave after a news conference as part of a meeting at the chancellery in Berlin, Germany, on Monday. AP/ MICHAEL SOHN
and wants to be constructive in the exchange of opinions.” Merkel was careful to point out Germany was only one of the euro-zone nations that would be responsible for deciding whether Greece’s reforms are sufficient, and said no decisions had been made in her talks with Tsipras. “Today we can only talk about things,” she said, characterizing the meetings as being held in “a spirit of trust.” The two were to continue their discussions over dinner following the media briefing. Tsipras’s first weeks in office have been marked by tensions between the two governments’ contrasting approaches to Greece’s debt crisis and over Athens’s revival of calls for World War II reparations from Berlin. Tsipras brought reparations up as he spoke alongside Merkel, but said “there is no linkage at all with the financial crisis and the euro zone crisis—it is clearly a bilateral issue.”
“This is primarily a moral issue, and I believe that we have to work together, our two countries, to address this moral issue,” he said. Merkel stuck to her government’s contention that “the question of reparations has been politically and legally settled” with a 1960 accord with Greece and a payment at that time. But she noted Germany has earmarked €1 million ($1.1 million) annually for a “German-Greek future foundation” meant to fund remembrance and historical research projects, and “in this spirit we will talk with the Greek government further.” Tsipras’s left-wing Syriza party won general elections with the campaign promise to end the spending cuts favored by Germany in exchange for €240 billion ($260 billion) in international bailout money. His new government agreed a month ago to push through reforms in exchange for keeping European Union aid flowing, but has delayed submitting the measures for approval. AP
Japan productivity gains vital to prevent decline
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Japan’s population of about 127 million began declining in 2011 and is rapidly aging, a trend seen in many industrialized countries. The country’s gains in productivity—or the value added for each hour of labor—have lagged behind other wealthy countries in almost all industries, even advanced manufacturing. That has hurt wage growth and also keeps returns on investment comparatively low, even for the largest Japanese companies, says the report, released on Tuesday. Japan’s labor productivity lags 32 percent behind Germany’s and 29 percent behind that in the US—a gap that will widen to 37 percent over the next decade and ensure continued stagnation, the report said. Only in real estate did Japan show higher productivity than the US. “Many of the barriers and bottlenecks that have constrained growth are not imposed by regulation; they stem from traditional ways of doing business,” the report said. “Japan can reach 50 percent to 70 percent of its productivity goal by adopting prac-
tices that are already in use around the world, while most of the remaining improvement can be captured by deploying new technologies.” The report suggests better use of women and older workers; improved access to financing for entrepreneurs, and a more aggressive approach to tackling global markets by making company management more global in nature. At stake is the country’s economic future: Without improvements, Japan’s per-capita gross domestic product will likely fall to $32,000, down from $46,736 in 2012. With major gains, it would at least hold steady, at about $48,000, the report says. Prime Minister Shinzo Abe has made improving Japan’s competitiveness a priority of his “Abenomics” growth strategy, which has so far mainly focused on lavish monetary stimulus and public works’ spending. Abe’s government has also drawn up a sweeping set up proposed reforms meant to spur growth, the third of his three economic-policy “arrows” but has made little headway in what will be a years’ long
battle against vested interests in many industries. “There is a fourth arrow, in a sense, which is what will companies actually do?” said Georges Desvaux, managing partner of McKinsey&Company’s Japan office. Japan’s automakers, such as Toyota Motor Corp. and Nissan Motor Co., have done better than some other industries, especially consumer-electronics manufacturers, in tapping into faster-growing emerging markets. Japan can do a better job, Desvaux said, of capitalizing on its expertise in robotics and 3-D printing to significantly boost profitability. In other areas, such as retailing, there is ample room for improvement, and an urgent need for quicker action given the strong growth in online commerce, the report said. In financial services, productivity has been declining at an average rate of 2 percent a year, it said. “What Japanese have not been able to do is actually move from components to software and services,” Desvaux said. “Japanese companies tend to be very good around manufacturing and development but not the rest,” such as sourcing, procurement, supply chain management and pricing, he said. Squeezed by competition from China, South Korea, Germany and other major exporting nations, Japanese manufacturers have sought to squeeze labor costs, mainly by shifting factories overseas and by slashing payrolls. But relying on temporary or contract workers who lack social benefits or long-term career prospects can hurt productivity, the report notes. “That is a real issue because it’s a lack of investment,” Desvaux said. AP
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BOTTOM OF THE NINTH Sports
It isn’t pretty, but there is no reason for Rory McIlroy to panic. AP
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| WEDNESDAY, MARCH 25, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao
A 120-FOOT-TALL replica bat fronts the Louisville Slugger Museum and Factory in Louisville, Kentucky. AP
BOTTOM OF THE NINTH The company that makes the iconic bats gripped by generations of ballplayers—from Babe Ruth to David Wright— announced a deal on Monday to sell its Louisville Slugger brand to rival Wilson Sporting Goods Co. for $70 million.
A WILSON baseball glove and a Louisville slugger bat sit on the field prior to a spring training game between the Kansas City Royals and the San Francisco Giants on Monday in Scottsdale, Arizona. AP
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VER a century of family ownership of Louisville Slugger bats is going... going...nearly gone. The company that makes the iconic bats gripped by generations of ballplayers—from Babe Ruth to David Wright— announced a deal on Monday to sell its Louisville Slugger brand to rival Wilson Sporting Goods Co. for $70 million. For 131 years, the family behind Hillerich & Bradsby Co. has supplied bats for games from the sandlots to the big leagues. H&B CEO John A. Hillerich IV said keeping the bat business in family hands had been a dinnertime topic for years. But as the competition’s lineup grew in recent years, the family became willing to listen to offers to acquire the brand. “It’s always been the family’s desire to keep the brand independent and family owned,” Hillerich told reporters. “It’s worked extremely well for 131 years. “But we’ve seen things change and we had to make a very tough decision. We’d rather the brand go on and have somebody else own it than potentially put it in jeopardy by keeping it in the family.” Hillerich is the great-
grandson of John A. “Bud” Hillerich, who churned out the first Louisville Slugger bat in 1884 for a renowned baseball player in his day, Pete Browning. Under terms of the agreement, H&B will continue to manufacture Louisville Slugger wood bats at its factory in downtown Louisville, Kentucky. “The guys down on the floor today are going to be the guys making the bats tomorrow and a year from now and a decade from now,” Hillerich said. But sale of the brand will cost 52 H&B workers their jobs, out of a total work force numbering about 270, Hillerich said. The remaining employees will work either for H&B or Wilson. Louisville Slugger will remain an independent brand once the deal is completed, said Mike Dowse, president of Wilson Sporting Goods. That means the Louisville Slugger bats will still carry the brand’s recognizable oval logo. Wilson’s deal to acquire the global brand, sales and innovation rights of Louisville Slugger still requires approval by H&B shareholders. Wilson Sporting Goods is a division of Finnish sports equipment maker AmerSports Corp. The Helsinki-based company said it expects the deal to be completed in the second quarter. Former players who now manage major league clubs sounded nostalgic about the age-old brand on Monday. “I still remember my first Louisville Slugger bat as a kid,” Hall of Fame player and current Minnesota Twins Manager Paul Molitor said. “All I knew was that Harmon Killebrew used one, and that was good enough for me. Part of the excitement of signing your first pro contract was getting a bat deal with Louisville Slugger.” Former All-Star player Matt Williams, who now manages the Washington Nationals, said Louisville Slugger bats were popular
among players of his generation. “There’s so many bats today to choose from that I, for one, would go crazy trying to choose a bat or a company,” he said. “I was a Louisville guy. Used them for a long time.” About half of all current major league players swing Louisville Slugger bats, according to H&B. The company said it has churned out more than 100 million bats in its history, including aluminum and composite bats. The sale includes the brand’s aluminum and composite bats, as well as Louisville Slugger lines of fielding and batting gloves, protective gear and equipment bags. Louisville Slugger’s wood bats are formed mostly out of northern white ash or maple, but a small percentage is made out of birch. The timber comes from forests in New York and Pennsylvania. H&B will maintain ownership and continue to operate the Louisville Slugger Museum & Factory and Gift Shop, a popular tourist destination. Towering outside the museum and factory is a 120-foot-tall steel bat that looms as a landmark in downtown Louisville. H&B’s Bionic Gloves division and Powerbilt golf brand are not part of the deal, it said. Dowse said expanding Wilson’s baseball and softball business globally is a key part of its business strategy. Wilson sees strong growth potential for Louisville Slugger, he said. He noted sales for DeMarini bats have quadrupled since Wilson acquired the brand about 15 years ago. “We see that same strategy and formula working extremely well for us at the Louisville brand,” he said. Wilson currently manufactures and sells gloves, bats, uniforms, apparel, protective gear, accessories and player development equipment and training tools through its Wilson, DeMarini and Atec brands. Like its DeMarini brand, Wilson will market and sell Louisville Slugger as a stand-alone brand.
ROUGH ROAD TO MASTERS
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RLANDO, Florida—Rory McIlroy’s road to the Masters was memorable for reasons not many would have imagined. He missed the cut at the Honda Classic. He was missing a club at the Cadillac Championship when he flung his 3-iron into a lake. And his highlight at the Arnold Palmer Invitational was eating a banana split after dinner with the King. “He went into it like it was the last supper,” Palmer said. It wasn’t pretty, but there was no reason for McIlroy to panic. He finished off the Florida swing with two birdies on the last three holes for a two-under 70, eight shots behind Matt Every at Bay Hill. He tied for ninth at Doral, though he was still eight shots behind Dustin Johnson and never really featured on the weekend. In 10 rounds over three tournaments, he broke 70 only once. Before heading home to South Florida for two weeks of work before the Masters, he was asked if he should be the favorite at Augusta National. “Given how I’ve been playing, I guess if you go on form, then probably no,” McIlroy said. “But it depends how far you take that for back, and you’ve got to look at previous results there and all sorts of stuff.” There was no right way to answer the question, so he made an artful escape by adding, “I’m not a bookie.” But he is the favorite. And there will be loads of pressure on McIlroy. The opportunity is too great. Not since Lee Trevino in 1991 has a player gone to the Masters with a chance to complete the Grand Slam. Trevino never cared for Augusta National, never seriously contended there and besides, he was 51. McIlroy had a four-shot lead going into the final round in 2011 and shot 80. He knows he can play there. He’s only 25. And he’s No. 1 in the world. Beyond the Grand Slam, he can join Tiger Woods and Ben Hogan as the only players with three straight majors since the Masters began in 1934. Those opportunities don’t come along very often, which is why Woods points to the 2000 Professional Golfers’ Association (PGA) Championship (his third straight major) as his most clutch putting performance.
The good news for McIlroy is the buildup to the Masters is over—at least for now. The first three months of the year were all about Augusta National, and the hype wasn’t quite as strong as it could have been. He was asked about it a fair amount, though not enough to consume him. Either way, he was prepared for it. “I was expecting to get a lot of questions,” he said. “It’s a big deal what I’m trying to achieve over there.” It’s difficult to measure progress over five tournaments spread across two months, though his win in Dubai and runner-up finish in Abu Dhabi should not be overlooked. McIlroy said the best golf he was playing going into the Masters was in 2011. He didn’t win in five events leading to the Augusta, with a runner-up in Abu Dhabi and a tie for 10th in Dubai and Doral. By that measure, this year has been slightly better. There was a glimpse of impatience early in the Florida swing, particularly at Doral when he had trouble trusting the difficult shots, such as the pull with a 3-iron into the lake, and the club that soon followed the ball into the water. McIlroy managed to turn that into a light-hearted moment. Donald Trump managed to turn that into a three-day news event. And then it was time to move on. The real culprit has been his wedges and irons. He’s simply not hitting it very close for a reasonable chance at making birdie putts. In a tiny sample size, but McIlroy’s average proximity from 125 yards to 150 yards was 30 feet in the Florida swing, or about 10 feet farther away than his 2014 average on the PGA Tour. The good news for McIlroy is no one is talking about a slump. And there’s something to be said about not peaking too early. Woods was going for an unprecedented sweep of the majors in 2001 and there were suggestions of a slump. He went six tournaments without winning (though he was never worse than a tie for 13th). The Masters was approaching. The pressure was building. And then Woods won Bay Hill, The Players Championship and the Masters. It’s all about peaking at the right time. The Masters starts in 17 days. AP
SPORTS
HE Asian Development Bank (ADB) said the Philippines could miss the government-set growth target this year despite plus factors, such as the promised increase in government spending and lower oil prices. mestic product (GDP) growth in 2014, the estimates for 2015 and 2016 growth are both below the government’s 7-percent to 8-percent target. “The pickup in growth in 2015 will stand largely on the rebound in government spending. Lower oil prices will benefit consumption and investments,” C A
MACAU AIMS TO BE LESS DEPENDENT ON CASINOS
A SHINTO priest blesses company workers for the prosperity of their firms during a ceremony at the main hall of Kanda Myojin Shrine, known as the shrine of commerce and industry, as they offer prayers for a good business year on the first business day of the year on January 5.
OKYO—Japan’s future prosperity will depend on improving its lagging productivity, says a report by McKinsey Global Institute that urges companies to boost their competitiveness by better use of their workers.
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In the Asian Development Outlook (ADO) 2015 report released on Tuesday, the Manila-based multilateral development bank said the Philippine economy could only grow by 6.4 percent this year and 6.3 percent in 2016. While the ADB’s growth estimates are higher than the 6.1-percent actual gross do-
B3-1 | Wednesday, March 25, 2015 • Editor: Lyn Resurreccion
THE WORLD REMEMBERS SINGAPORE’S LEE KUAN YEW
P. | | 7 DAYS A WEEK
ADB EXPECTS ECONOMY TO GROW BY ONLY 6.4% THIS YEAR DESPITE BOOST FROM CHEAPER OIL, GOVT SPENDING
PINS AND NEEDLES FOR APPLE WATCH APP MAKERS Of the Lenten Season
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ACAU slashed its monthly gamblingrevenue forecast by 27 percent, as the city’s chief executive pledged a five-year plan to make the world’s largest gaming hub less dependent on casinos. The city expects average gross monthly gaming revenue of 20 billion patacas ($2.5 billion) this year, down from an earlier estimate of 27.5 billion patacas, Chief Executive Fernando Chui said on Monday. Macau has entered an “adjustment” period of slower growth, and needed to develop a broader range of attractions to draw tourists from around the world, he said. “We think this is pretty pessimistic, though it may
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be better for an official to slash things so much that they can then eventually get into positiverevision mode from a low base,” said Tim Craighead, head of Asian research at Bloomberg Intelligence. “If they use this as a base assumption, it emphasizes the need to diversify the economy, which is already in the plans.” Chinese President Xi Jinping has called on Macau to move beyond gambling, as his corruption crackdown and a slowing national economy keep high rollers and middle-class patrons alike away from the tables. Gaming revenue is expected to fall for a second year, S “M,” A
ALC Group of Companies Founder and Chairman Emeritus Ambassador Antonio L. Cabangon Chua gives his message to the hardworking Fortune Care team and awardees of the 2015 Perlas Awards held at the Citystate Tower in Malate, Manila, on Monday. Honorees include winners of the 2014 Sales Contest and Fortune Care employees who rendered 20 to 30 years of service to the company. Health Secretary Janette L. Garin is the event’s guest of honor. ALYSA SALEN
70% of health spending still ‘out of pocket’ B D C
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ROUND 60 percent to 70 percent of medical expenses in the country still come from Filipinos’ own pocket, instead of being covered by health insurance, Health Secretary Janette Loreto-Garin said on Monday night. In her speech at the 2015 Perlas Awards of Fortune Care, Garin thanked the private sector—especially the health-maintenance organizations (HMOs)—for its contribution in making health care more accessible to all Filipinos. She, however, pointed out that a lot more could be done by the government and the private sector in further reduc-
GARIN: “Every investment that every private company has for the health care of its employees will always redound for the good of the economy of our country, and that is the great legacy that Fortune Care has contributed to health care in our country.”
ing “out-of-pocket” expenses of patients. “In our country, 60 [percent] to 70 percent of health-care expenditure is out-ofpocket expenditure, and Fortune Care’s efforts to partner with public- school
teachers, with policemen, with government employees is a big help, not only in terms of reducing out-of-pocket expenditures; not only in terms of preparing them for catastrophic incidents—like a disease in the family—but more so in building our country, because a healthy Filipino is always our key toward achieving a better Philippines,” Garin said. “Public health is not only the responsibility of the Department of Health. Public health is a responsibility of every individual. Whatever antipoverty measures our government has, these will all boil down to almost nothing if we don’t have a healthy community. Therefore, every investment that every S “H ,” A
■ JAPAN 0.3744 ■ UK 67.0433 ■ HK 5.7793 ■ CHINA 7.2106 ■ SINGAPORE 32.8383 ■ AUSTRALIA 35.1207 ■ EU 49.1014 ■ SAUDI ARABIA 11.9510 Source: BSP (24 March 2015)
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Wednesday, March 25, 2015
A2
Health spending. . . Continued from A1
private company has for the health care of its employees will always redound for the good of the economy of our country, and that is the great legacy that Fortune Care has contributed to health care in our country,” she added. Fortune Care Founder and Chairman Emeritus Ambassador Antonio L. Cabangon Chua shared Garin’s insights on the importance of securing the health of Filipinos in the overall goal of reducing poverty in the country. “Hindi ko itinuturing na negosyo itong Fortune Care [I don’t consider Fortune Care as a business], it is more of a service, sapagkat mahirap magkasakit [because it is difficult to get sick]—it’s very expensive. Kaya kailangan ay mapagsilbihan natin ang ating mga pasyente [so we need to serve our patients better],” Ambassador Cabangon Chua said in his speech. Fortune Care Chairman and CEO J. Antonio A. Cabangon Jr. thanked the employees and sales staff of Fortune Care for their dedication and commitment, which resulted in ta banner year for the company in 2014. “Tonight, we celebrate the people who made 2014 a banner year for our company. And as we move forward, we will see more innovations that Fortune Care will institute as the industry changes. We have already seen how much more efficient and coordinated we are in servicing our patients, and there will be more innovations to come this year,” he said. Fortune Care holds the Perlas Awards each year to honor the achievements of individual sales staff. Among those who were awarded for their work in 2014 are Norberto de Ocampo and Myra Sheila Arriola (General Agency Manager Level, first and second place, respectively); Priscila Tolentino and Merewyn Floresca (Agency Manager Level, first and second place, respectively); and Glecy Matsui and Marilou Lumban (Account Executive Level, first and second place, respectively).
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PHL seen to miss 2015 growth goal Continued from A1
ADB Country Director Richard Bolt said in a news conference on Tuesday. “A pickup in the growth of industrial economies in the US will boost exports and foreign direct investments. Growth is projected to slightly ease in 2016, partly reflecting investor concerns on uncertainties with the elections and higher oil prices,” he added. The ADB said inflation is expected to average 2.8 percent this year due to low oil prices, but could accelerate to an average of 3.3 percent in 2016, when the cost of oil is expected to rise. The ADB said global oil prices this year will be low, benefiting net oil-importing countries like the Philippines. When oil prices increase again next year, however, the Philippines, along with other Asian countries, will likely see slower growth in 2016. ADB Philippines principal country economist Sona Shrestha said this is the reason that, despite the boost that the Philippine economy will get from the conduct of the Presidential elections, growth will
This will reduce the aggregate demand for power from the system and help ensure the availability of power supply, especially during the anticipated power crisis next year. “In terms of the specific risks, one risk that we pointed out is the possible power shortages in Luzon area. As you know, the government has [disclosed that Luzon] may experience [a] shortfall in power during peak hours,” Shrestha explained. “The government is undertaking measures mostly in the form of the interruptible load program, which provides incentives for large users of electricity to use their power generators, so as to ease the demand on the main grid. So, to that extent, we think the risk is minimized,” she added. The ADO also highlights the need to stimulate investment, and generate more and better jobs. Even when the unemployment rate fell to 6.6 percent in January 2015, the lowest in 10 years, 2.6 million people remained jobless, half of them aged 15 to 25, and a further
still be below government expectations next year. “The impact of a sharp rebound in oil prices would be stronger in Asia than elsewhere. When the oil price returns to $100 per barrel in a year, growth in Asia could slow by as much as 1 percentage point in 2016,” the ADB stated. Another factor that poses a threat to the country’s economic growth is the country’s thin power reserves. Power shortages have been identified by the ADB and even the National Economic and Development Authority as threats to GDP growth. The ADO said the looming power shortage in Luzon poses a threat to the productivity of both industry and services sectors. However, the ADB said measures, such as the Interruptible Load Program (ILP), will help address some of the shortfall in the country’s power supply. Under the ILP, unused power supply from the grid by participating customers will be made available for use by other customers within a franchise area.
Also during the day, Hongkong and Shanghai Banking Corp. (HSBC) released its quarterly report on the region, also affirming its growth forecast for the Philippines at 6 percent. Tetangco reasoned that the Philippine economy remains in a favorable spot to withstand external economic disturbances
this year, as seen in the strong private demand and the continuous growth of the manufacturing sector. Tetangco also said that the economy is sufficiently supplied with ample cash stock to support broad-based growth without stoking inflationary pressures. As such, Tetangco said the “positive alignment” of inflation and
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growth—or the so-called Philippine economic “sweet spot” of high growth and low inflation—gives the BSP sufficient room to make policy adjustments as may be warranted. But HSBC shared the BSP’s views of a strong underlying growth in the economy—calling the Philippines the “comeback kid” of Asia. “For the first time since 1996,
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the Philippines will host and chair the Asia-Pacific Economic Cooperation forum this year. The event punctuates the country’s remarkable comeback—the Philippines has transformed itself from one of the laggards of Asia into one of the region’s best-performing economies,” HSBC economist Trinh Nguyen said in her report on the Philippines.
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The ADB said the low-inflation regime will keep the region’s aggregate current account balance in surplus at 2.5 percent of gross domestic product (GDP) in 2015. In the Philippines, the country’s current account balance is expected to reach 4 percent of GDP in 2015 and 3.6 percent of GDP in 2016. “Developing Asia is making a strong contribution to global economic growth,” ADB chief economist Shang-Jin Wei said. “Falling commodity prices are creating space for policymakers across the region to cut costly fuel subsidies or initiate other structural reforms. This is a key opportunity to build frameworks that will support more inclusive and sustainable growth in the longer term.” However, the ADB warned that the window to implement such measures will be short-lived since oil prices are expected to again increase toward the end of 2015 and throughout 2016. The ADB said that if oil prices return to $100 per barrel, this could shave off as much as 1 percentage point off of average growth in developing Asia in 2016. The effect of oil prices on economic growth in the US, the euro area, and Japan would be less severe at about 0.6 percentage point. In emerging Asia excluding the People’s Republic of China, high oil prices could shave off 0.2 percent from 2015 growth and 1.1 percent in 2016.
NORTHEAST MONSOON AFFECTING LUZON (AS OF MARCH 24, 5:00 PM)
Northeast Monsoon locally known as “Amihan”. It affects the eastern portions of the country. It is cold and dry; characterized by widespread cloudiness with rain showers.
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6.5 million were underemployed. Also, the ADB said inadequate infrastructure is a constraint to investment, and the government aims to double outlays on infrastructure from 2 percent of GDP over the past decade to 4 percent in 2015, and further to 5 percent in 2016. The ADB said some of these concerns, such as the country’s infrastructure deficit, will be addressed by the government’s Public-Private Partnership Program. The ADB added that another key factor is the budgeted increase in government spending to more than 18 percent of GDP—the biggest ratio to GDP in at least a decade. The Manila-based multilateral development bank added that the budget boosts allocations for social services and infrastructure, and directs additional support for the development of agriculture, tourism and manufacturing. Further, the ADB said a plan approved last October to rehabilitate areas devastated by Supertyphoon Yolanda (international code name Haiyan) will accelerate reconstruction spending.
Tetangco still not giving up on targets. . . Amando M. Tetangco Jr. said in his keynote address at the Euromoney Philippine Investment Forum 2015 on Tuesday. During the same day, however, the Asian Development Bank (ADB) said that it is keeping its growth forecast at 6.4 percent, relatively strong, but below government expectations.
ADB. . .
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Divorce bill? No way, House leaders say
SAF chief to Trillanes: Watch your mouth
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D
espite the recent survey showing that 60 percent of Filipinos want divorce to be legalized, the leadership of the House of Representatives on Tuesday vowed not to legalize divorce in the country. House Speaker Feliciano Belmonte Jr. said marriage should be respected and protected, adding that the 16th Congress leadership will not approve any proposal that would legalize divorce in the country. “The proposal to legalize divorce will not pass under my watch [as Speaker],” Belmonte said. Based on the recent Social Weather Stations survey, 60 percent of Filipino adults favor the legalization of divorce among married couples. House Independent Bloc Leader and Lakas Rep. Ferdinand Martin Romualdez of Leyte, for his part, said the government should not allow such proposal to prosper, explaining Filipinos have very close family relations. “We have to look at our existing laws and culture, and we should be very deliberate about it.... We have to preserve the sanctity of marriage and family,” he said. Last year Party-list Reps. Luz Ilagan and Emmi de Jesus of Gabriela filed House Bill 4408, or “An Act Introducing Divorce in the Philippines.” Ilagan said the bill seeks to help liberate couples trapped in unhappy, irreconcilable marriage. She said the measure allows
those who have been separated for five years and those already legally separated for two years to apply for divorce. The grounds for legal separation may also apply when these same grounds have already caused the irreparable breakdown of the marriage. As provided under Article 36 of the Family Code, psychological incapacity is one of the grounds
briefs
MNTC-controlled tollways prepare for Holy Week rush
THE Supreme Court (SC) on Tuesday stopped the implementation of the P268.8-million extended warranty contract entered into by the Commission on Elections (Comelec) and technology provider SmartmaticTotal Information Management for the diagnostic of all the 82,000 Precinct Count Optical Scan (PCOS) voting machines in preparation for the 2016 national and local elections. At a news briefing, SC Spokesman Theodore Te said the Court voted 12-2 in granting the plea of petitioners Integrated Bar of the Philippines (IBP) and poll watchdog Automated Elections System Watch, led by Auxilliary Bishop of Manila Broderick Pabillo and former Comelec Commissioner Augusto Lagman, for the issuance of a temporary restraining order (TRO) against the enforcement of the contract signed on January 30. Chief Justice Ma. Lourdes Sereno and Associate Justice Presbitero Velasco both dissented from the majority as the were of the view that the issues raised in the consolidated petitions should be heard first on oral argument before issuing a TRO. Joel R. San Juan
gazmin visits lubang island ahead of radar installation
Defense Secretary Voltaire T. Gazmin has visited the Gozar Air Station in Occidental Mindoro, one of the three military monitoring stations in the country that would soon be fitted with an Israeli-made radar equipment under the ongoing modernization of the Armed Forces. Gazmin’s visit into the Philippine Air Force Air Defense Wing’s Gozar station over the weekend in Lubang Island was in preparation for the expected installation of a brand-new radar from Israel, which is being negotiated through a government-to-government contract. “We give primacy to the enhancement of our capability to monitor and secure our territory. Gozar Air Station will play a major role as we shift our focus from internal security operations to territorial defense,” Gazmin said. Rene Acosta
By Rene Acosta
he director of the Philippine National Police Special Action Force (SAF) called on Sen. Antonio Trillanes IV to be more circumspect on the issue of the Mamasapano massacre and refrain from pitting the PNP against the Armed Forces.
By Jovee Marie N. dela Cruz
sc stops p268.8-million comelec-smartmatic deal
Editor: Dionisio L. Pelayo • Wednesday, March 25, 2015 A3
P15 wage-hike furor
A biker rides past a group of workers who trooped at the intersection of Taft Avenue and Pedro Gil streets on Monday to dramatize their indignation over the recent P15 wage hike by the Regional Tripartite Wages and Productivity Board. The workers’ wage hike granted by the government, the workers insist, was a “pittance.” Alysa Salen
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for legal separation or nullity of marriage. Lack of authority of the solemnizing officer, bigamous or polygamous marriages and marriages where one or both parties were below the marrying age allowed by law are among the other grounds for the marriage to be nullified under the law. Nacionalista Party Rep. Rodolfo Fariñas of Ilocos Norte said there is a need to amend first the 1987 Consti-
By Lorenz S. Marasigan
RAFFIC at the expressways controlled by the Metro Pacific Tollways Corp. is expected to spike during the Lenten season, as commuters are expected to travel to and from the north during the holidays. Hence, the operators of the North Luzon Expressway (Nlex), Subic-ClarkTarlac Expressway (SCTEx), and Manila-Cavite Toll Expressway (Cavitex) are beefing up their toll-collection and traffic-management efforts to accommodate the expected growth. Manila North Tollways Corp. (MNTC) President Rodrigo E. Franco said traffic at the thoroughfare to the north is expected to increase to 200,00 this coming Holy Week from the daily average of vehicles of more than 180,000. The central expressway, meanwhile, is expected to accommodate roughly 24,000 vehicles per day, 15 percent higher than the current traffic. “Traffic is expected to build up in the afternoon of April 1 to Holy Wednesday—until late morning of April 2 to Maundy Thursday—going north. For vehicles traveling back to Manila, heavy traffic is expected to start in the afternoon of April 4 to Black Saturday—up to late evening of April 5 or Easter Sunday,” Franco said at a news briefing on Tuesday morning. In Cavitex traffic volume is expected to be low. Nevertheless, it is still preparing for the Holy Week. On April 1 and 2 gates of the Dau northbound barrier will be opened from 2 p.m. of Wednesday to 4 p.m. of Thursday. Cash-paying motorists bound to far north will no longer stop at Dau northbound barrier to pay. Instead, toll payment will be processed at the Mabalacat barrier in SCTEx. Easytrip subscribers should still pass through their designated exit lanes at the Dau northbound barrier. Three temporary collection points will be also be opened on April 1 and 2 at the Dau northbound flyover, Santa Ines and Mabalacat. For Class 1 motorists coming from Balintawak and bound to Tarlac, P277 will be collected at Mabalacat, and for those bound to Subic, P363 will be collected. On the other hand, Class 1 motorists entering SCTEx Plazas other than Mabalacat and bound to either Tarlac or Subic, toll based on their entry point will also be collected in advance. “Motorists are advised to surrender their stubs upon exit since this will serve as their proof of payment. This advance-payment scheme is being implemented in order to minimize queue length at Tarlac and Subic toll plazas,” Franco said. Southbound on April 4 and 5, gates at the Dau southbound barrier will be opened from 12 noon of Saturday to 11 p.m. of Sunday. Cash-paying motorists bound to Manila will no longer stop at the Dau southbound barrier for the transit ticket. Easytrip subscribers should still pass through their designated exit lanes at Dau northbound barrier. Additional portable booths will be set up at the Bocaue barrier to speed up payment of vehicles bound to Manila. “Road works will be suspended beginning March 27. It will resume on April 6. There will be no mainline roadwork lane closures during this period unless safety repair is required,” Franco added. Traffic personnel will conduct round-the-clock patrolling. The light bar of patrol vehicles will be turned on at night during heavy volume of vehicles to increase patrol visibility. Drums of water will be placed at strategic locations to serve overheated vehicles. There will be free towing services to Class 1 vehicles
tution before approving the divorce bill because it is unconstitutional. Citing Article X V, Section 2 of the Constitution, Fariñas said “marriage, as an inviolable social institution, is the foundation of the family and shall be protected by the State.” According to the lawmaker, it is the main obligation of the government to protect and preserve marriage as an inviolable social institution.
from 6 a.m. to 6 p.m. on April 1, 2 ,4 and 5. “Nlex will also implement its motorist-assistance program, Safe Trip Mo, Sagot Ko or SMSK. MNTC mobilized the SMSK motorist-assistance program in anticipation of the expected traffic increase in the three expressways,” the executive said. SMSK Motorist Camps will be located in all fuel stations in Nlex, and one fuel station in Subic Freeport Expressway. In Cavitex, SMSK Motorist Service Camps will be located at the southbound lane before the Parañaque toll plaza and before Kawit toll plaza on April 1, 2 and 4, and at the northbound lane after Parañaque toll plaza and before Kawit toll plaza on April 5 and 6. In addition, SMSK Express Cards will be sold to motorists using Class 1 vehicles. Northbound motorists exiting at SCTEx-Tipo and SCTEx-Tarlac may avail themselves of discounted toll by buying the SMSK Express Exit Card at the following locations from 7 a.m. of April 1 until 7 p.m. of April 2: Petron Marilao, Shell Balagtas, Total San Simon, Petron Lakeshore and at the Dau toll plaza. Manila-bound motorists exiting Bocaue may avail themselves of discounted toll by buying the SMSK Express Exit Card at the following locations from 7 a.m. of April 4 until 10 p.m. of April 5: Shell Mexico, Caltex Mega Station San Fernando, Shell of Asia Santa Rita and Petron Balagtas.
At the same time, Chief Supt. Virgilio Moro Lazo expressed their readiness to face a Senate investigation under Trillanes, if only to correct the senator’s statement that SAF officers “wined and dined” Army officers on the eve of the Mamasapano operations by the SAF that bagged regional terrorist Zulkifli bin Hir, alias Marwan. The operation also resulted in the ambush-killing of 44 police commandos by the Moro Islamic Liberation Front and the Bangsamoro Islamic Freedom Fighters. “He [Trillanes] was once a soldier and I am appealing to him that if he would investigate and find out what really happened, he would rectify his insinuations,” said Lazo during an interview over radio station dzMM on Tuesday. “I do not want to pick a fight with Senator Trillanes, but as a soldier, as a cavalier, I am appealing to him that he should straighten out his facts first before he would come up with an announcement like this because it really hurt us,” he added. Trillanes has said that on the eve of the operation, SAF officers dined and engaged officers of the Army’s 6th Infantry Division in a drinking session, hinting that the scheme was hatched as a tactic to find out whether the Army officers have any inkling about the operation against Marwan. Defense Secretary Voltaire T. Gazmin and Armed Forces Chief of Staff Gen. Gregorio Pio Catapang confirmed on Monday that Col. Melquiades Feliciano, commander of the Army’s 601st Brigade, and Lt. Col. Romeo Bautista, commander of the 45th Infantry Battalion, were invited to a drinking session by SAF officers. But Lazo denied the claims. “There is no truth to that, that SAF engaged the soldiers in a drinking session. Now, if there are other PNP officers who did that, we have no knowledge of it,” Lazo said. “Lumalabas itong mga insinuation na ito na iniisahan namin, niloloko namin ’yung mga counterparts namin sa AFP, ang pangit pong tingnan,” the SAF commander said in the vernacular.
Economy
A4 Wednesday, March 25, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon
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Jobstreet: IT grads likely to get ‘best-paying’ job
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By Catherine N. Pillas
RESH graduates in the field of information technology (IT) can look forward to comparatively high paychecks on their first jobs, according to the latest Jobs and Salary Report for Fresh Graduates conducted by online job market Jobstreet Philippines. The 2015 Jobs and Salary Report for Fresh Graduates, which marks its third edition this year, provides a separate assessment on both in-demand jobs and those with the highest starting salaries for new graduates. Marketing Director for Jobstreet Philippines Yoda Buyco said the report’s objective is to give options to the hordes of fresh graduates assessing which jobs are most readily available, and which ones offer the best compensation. In the salary report, the field of specialization that offers the most rewarding salary—at almost P24,000 starting-pay mark—was IT/Computer Course in Software. Taking second place is still in the field of IT, in the specialization of Database Administration. The third- and fourth-highest-paying jobs are dominated similarly by other specializations under IT, specifically technical and helpdesk support and hardware, respectively. Rounding off the top 5 is a specialization in finance, specifically in corporate finance and merchant banking, with a starting pay of P21,345. Data from the salary report was culled from 22,000 companies that posted their job listings on the web
site in the fourth quarter of 2014. The demand section of the report, however, was taken from postings during the first quarter of the year. The most sought-after job, the report added, is in the business-process outsourcing industry, specifically call-center representatives. The second most in demand job is in IT Computer, specializing in hardware; technical helpdesk, telemarketing and clerical support emerged as the top 5 most available jobs in the market. Another welcome development for fresh graduates, the report added, is the fact that companies are beginning to place less importance on which schools the graduates studied. Out of the 450 human-resource executives sampled by Jobstreet, those who rated school factor as “quite important” declined from 61 percent of respondents to 51 percent. According to the report, companies have listed the top 5 “priority schools” as the University of the Philippines on the top spot, the University of Santo Tomas, Ateneo De Manila University and de La Salle University tying in third, and Polytechnic University of the Philippines on the fourth slot.
Vehicles pass in front of a container depot in Delpan, Tondo, Manila, on Tuesday, as the Philippine Ports Authority girds for the Lenten rush at the country’s ports. Kevin dela Cruz
PPA girds for Holy Week rush at the ports By Lorenz S. Marasigan
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IGHTER security measures will be implemented beginning this week in all state-run sea terminals in preparation of the summer and Lenten breaks, the chief of the Philippine Ports Authority (PPA) said on Tuesday. The port body, General Manager Juan C. Sta. Ana added, is also expecting a large number of passengers to flock the ports to take advantage of the break from school and work. Foreign sea travel is also anticipated to rise, as the demand for cruises has been constantly increasing. “PPA is increasing the security schemes this early in order to determine possible flaws before the bulk of passengers starts flocking the different ports nationwide... this weekend,” Sta. Ana said. He added: “I am directing all port managers to come up with the best security schemes and other action plans to complement and enhance the existing measures being enforced.” The security procedures, on the other hand, include maximum utilization of walk-through and baggage x-ray machines, walk-through metal detectors, as well as continuing visibility of PPA Police and security guards within the port area and passenger-terminal buildings. All ports, the port chief said, should provide wellventilated terminals, as well as clean comfort rooms, nursing stations and other travel amenities. Round-theclock Medical and Passenger Assistance Counters and Passenger Help Desks will, likewise, be installed for to immediately assist passengers. The port body will also provide a security check fast lane for passengers carrying minimal belongings, while designation of holding, waiting, or embarkation areas to segregate screened from unscreened persons were also deployed. Passengers, Sta. Ana noted, are asked to segregate and declare metallic objects and bladed tools for industry use so that such items can be tagged, then turned over for
briefs maritime confab to showcase subic as gateway to central, northern luzon
SUBIC BAY FREEPORT—A maritime conference will held here next month to highlight Subic’s advantages as a logistics hub for cargo shippers, as well as service providers, in Central and Northern Luzon. The Second Subic Bay Maritime Conference and Exhibit will be held on April 24 at the Subic Bay Exhibition and Convention Center, with the theme “Subic Bay: Your Gateway to Central and Northern Luzon.” The conference is expected to draw participants from business locators here, as well as logistics and supply-chain executives, import and export managers, manufacturers, shipping line executives, key national and local government officials, and other stakeholders. The conference will be hosted by the Subic Bay Metropolitan Authority, in cooperation with the Subic Bay International Terminal Corp., which operates the New Container Terminals 1 and 2 in this free port. Henry Empeño
safekeeping and finally retrieve at the port of destination by the owner. Vessel operators are, likewise, encouraged to assist in the information dissemination in the event that vessels stopped issuance of tickets for whatever reasons and to provide information when affected passengers can be accommodated in succeeding trips. Sta. Ana also reiterated his earlier directive disallowing the selling of additional insurance coverage on top of the mandatory insurance cover already embedded to the tickets to passengers inside port premises. Among the ports with high concentration of passengers include the Batangas Port, which is a jump-off point to Puerto Galera, Mindoro and eventually to Boracay via Caticlan; the North Port in Manila, which is considered as the country’s main domestic port; Tagbilaran port, which serves as receiving areas for people visiting the famous Panglao Island; Matnog in Sorsogon for those going to the Samar and Leyte provinces; and Dumaguete, which is due primarily to the number of students; as well as Davao and Cagayan de Oro, among others. The state-run agency booked P4.26 billion in net income in 2014, 15 percent higher than the P3.7 billion posted the year prior. Despite being higher by 16 percent versus the P3.67billion target of the port agency, the growth is relatively slower than the rate in 2013, saw the port body's bottomline growing by 29 percent to P3.7 billion. In the same comparative periods, gross revenues grew by 13.5 percent to P12.57 billion from P11.07 billion, while total expenses rose by a slower 10 percent to P6.47 billion from P5.89 billion. Traffic in ports around the country also increased by 5 percent last year, with cargo volume reaching 211.20 million metric tons as of end-December. The rise in volume was driven by the large exportation of river sand, magnetite sand, crude minerals, nickel ore, limestone ore, clinker and slag and coconut oil and copra, fruits and fish, as well as the importation of fuel, coal, grains and fertilizers.
pagasa earns international kudos for improved performance
State-run weather agency Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa) further gained praise for increasingly improving its forecasting and other related services. World Meteorological Organization Secretary-General Michel Jarraud lauded Pagasa for its capacity- and capability-strengthening efforts, noting these initiatives are enabling the state weather bureau to deliver better meteorological and hydrological services that are essential in helping protect life, limb and property nationwide, particularly amid climate change. “Pagasa can be regarded as a model for other developing countries, especially those which are vulnerable to natural disasters,” he said in a message for Pagasa’s 150th anniversary this week. He noted improved capacity and capability enabled PAGASA to provide “accurate and timely” forecasts and warnings on movement and intensity of supertyphoon Yolanda (international code name Haiyan) days before this cyclone ravaged the Philippines, Jarraud said. PNA
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Wednesday, March 25, 2015 A5
Aquino vows increased spending for infra, power projects until ’16
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By Butch Fernandez
resident Aquino on Tuesday committed to further increase his administration’s multibillionpeso annual spending for various infrastructure and power projects in the remaining 15 months of his six-year term, which ends on June 30 next year. Speaking before business leaders attending the Philippine Investment Forum at the Peninsula Hotel in Makati City, Mr. Aquino also vowed to continue pouring public funds to other government projects intended to create more jobs. President Aquino announced his term-ending plans, as Moody’s on Tuesday increased its Philippine growth forecast for the year at 6.6 percent. The President affirmed that infrastructure remains one of the sectors that greatly benefited from the government’s drive to become more competitive, acknowledging that, through the efforts of the Department of Public Works and Highways (DPWH), “corruption has been vastly minimized, if not eradicated” and projects are now regularly completed ahead of time and under budget, including those started by past administrations. “The good news is that the DPWH’s budget has more than tripled: from P165 billion in 2010 to almost P570 billion in 2015. We can expect this to grow even more, as our goal is to have infrastructure spending comprise 5 percent of GDP [gross domestic product] by 2016,” he said. Mr. Aquino assured that the administration is continuing to pursue another path toward accelerating infrastructure development in the Philippines, through the socalled Public-Private Partnerships (PPP) Program. “Thanks to the good work of those in the Public-Private Partnership Center, we have proved to be exceedingly efficient in executing PPP projects. If you will allow me to make a quick comparison: The past three administrations combined were only able to complete six solicited PPP projects. On the other hand, under our administration, nine projects have been awarded; 16 are in the process of being bid out; and more than 30 other projects are under various stages of development.” Mr. Aquino reported that another sector his administration is focused on is that of power, which, he admitted, “has been rather complicated, to say the least.” “Rest assured: We share your concern. Right now, the Philippines has a total dependable capacity of 15,665 megawatts (MW), which is—or should be—sufficient to meet our highest projected demand
level of 10,222 MW for 2015. But we cannot be content with this, especially with the potential powersupply gap in Luzon this summer, due to the threat of El Niño and rehabilitation of the Malampaya gas field,” President Aquino informed the investors’ forum. At the same time, Mr. Aquino disclosed that his administration is also pursuing an entire menu of options to address this projected power-supply shortfall. “We are expediting the rehabilitation of the 300-MW Malaya Thermal Power Plant Unit 1 to help augment power supply in Luzon. We are also requesting National Grid Corp. of the Philippines [NGCP] to optimize the dispatch of hydropower plants, which will generate additional energy supply during peak hours. Partnerships with the private sector have also proved useful: Under the Interruptible Load Program, as of January 2015, 252 participants have signed up to use their own generators and deload a total of 688.67 MW during times when power supply is too tight.” According to Mr. Aquino, the good news is that a total of 48 committed incoming power projects with 4,693.6 MW of power are expected to come online between now and 2018. He added that out of the 48 power plants, 21 will be from renewable energy, in line with the government’s goal of diversifying the energy mix and building a power supply that is as clean and reasonably priced, as possible. “As you can see, we are determined to continue treading green pathways to development, and to maintain our status as one of the driving forces for clean energy in the region. As I have said before, our vulnerabilities to climate risk should not keep us from exerting maximum efforts in pursuing nonconventional sources of energy. We are hopeful that the rest of the world will see the value in such a strategy,” he said. The President explained that these efforts are even more crucial, in light of the realization of the Asean Economic Community, expected to take place further this year. He noted that Asean remains a formidable economic force, adding that at a time where many countries in the world are experiencing economic uncertainty, it has remained
PRESIDENT Aquino addresses the Fourth Euromoney Philippine Investment Forum at the Rigodon Ballroom of The Peninsula Manila in Makati City on Tuesday. The forum played host to a by-invitationonly audience of over 500 business leaders, investors and policy-makers. Malacañang Photo Bureau
one of the world’s fastest-growing regions. “On top of this, one must consider its size: If Asean were just one country, it would be a $2.4-trillion economy. This is precisely why, as Asean integration takes full effect, the Philippines is taking every possible measure to take on a more dynamic economic role in the region,” he said. Mr. Aquino reported that he had already signed crucial laws that will enable the Philippines to “meet our financial integration commitments, including an “Act Strengthening the Insurance Industry” and the “Act Allowing the Full Entry of Foreign Banks in the Philippines.” Moving forward, we will continue expanding the range of financial tools available in our country, so we can maximize the advantages of integration.” The President also pointed out that widening the range of financial options in the country also helped another key sector: that of micro, small and medium enterprises (MSMEs), explaining that an empowered MSME sector is one of the main foundations of a healthy economy, as it “enables us to establish economic dynamos in even the most remote parts of the nation; it creates opportunities, giving our countrymen yet another path through which they can take hold of their destinies. Ultimately, it can become one of the strongest and most direct tools toward inclusive growth, and thus, we want MSMEs to take on a leading role in our country’s growth story.” This is why, he said, “we have been working overtime to provide MSMEs the wherewithal to compete and succeed in an increasingly global market. For instance, our SME Roving Academy has conducted more than 1,871 training sessions focused on skills training, product pricing and costing, business planning, entrepreneurship development and financial management, among many others. To date, these have helped more
Passage of tax-cut measure possible in June
T
By Jovee Marie N. dela Cruz
he House of Representatives is eyeing to pass a bill lowering individual income-tax rate in June, a lawmaker said on Tuesday. Deputy Majority Leader and National Unity Party Rep. Magtanggol T. Gunigundo of Valenzuela, at a news conference, said that the tax measure will most likely be approved on third reading before the second regular session ends on June 11, as members of the House Committee on Ways and Means, who tackle the measure, are finalizing the discussions on the tax bill. “The House Committee on Ways and Means’s technical working group is currently consolidating the 13 bills on lowering income-tax rate; hopefully, we will approve it on final reading before Congress’s second regular session ends,” he said. Gunigundo filed House Bill 4099, seeking to lower individual and corporate income-tax rates to 15 percent, from the current 32 percent and 30 percent, respectively. He said his proposal, if enacted into law, will definitely reduce the number of Filipinos who do not pay taxes, as lower taxes mean higher level of compliance. According to Gunigundo, the advantages of having 15-percent incometax rates are enormous, among them it will stimulate the economy by providing individual taxpayers more after tax income, or disposable income, which they can either save or spend in the engagement of services
or purchase of goods that are subject to value-added tax. Meanwhile, House Committee on Ways and Means Chairman and Liberal Party Rep. Romero Quimbo of Marikina said his panel is now finalizing the substitute bill consolidating pending measures on lowering the individual income-tax rate and simplifying the country’s tax structure. Quimbo’s House Bill (HB) 4829 is also among the 13 pending bills, which seek to restructure the income taxes imposed on individuals. HB 4829 is seeking for the revision of income taxes for compensationincome earners, self-employed and professionals, and corporations through simplification of tiers and rates, and indexation to inflation. Quimbo added that the current income taxes imposed on individuals have become uncompetitive and unresponsive. Currently, an employee, who has an annual taxable income of as low as P10,000 and less is already paying a 5-percent tax, which goes up to a high of 32 percent for those earning P500,000 and above. He said since the effectivity on January 1, 1998, of the National Internal Revenue Code of 1997, the levels of taxable income brackets have been pegged at the 1998, Consumer Price Index (CPI) of 67.8 percent, which is starkly less than half of the present CPI of 137.7 percent. Earlier, Finance Undersecretary Jeremias Paul warned lawmakers that reducing the individual income-tax rates may cause the government to lose revenues totaling as much as 1.5 percent of the country’s gross domestic product, or P30 billion. “We need to have a compensating measure. It has to be revenue-neutral,” he said.
than 85,000 potential and established entrepreneurs.” President Aquino lamented that “there has been so much good news these past few years, and yet, this good news has often been relegated to the back pages of our broadsheets,” he told guests at the forum. “I must admit: Our campaign to change the mind-set that negativism sells is still a work in progress.” Admitting that his administration had its share of setbacks and challenges, Mr. Aquino asserted, “we also have an impressive number of achievements under our belt. This is why I have made it a point to spread the good news, and why I am always thankful for those who stay balanced and constructive: pointing out areas in which we can improve, while also acknowledging our progress.”
For instance, he recalled that 2014 was “indeed, a banner year for net FDI [foreign direct investments], reaching an all-time high of $6.2 billion, 65.9 percent higher than what we received in 2013.” “We have, likewise, posted impressive growth: from 2010 to 2013, the Philippines averaged a GDP growth of 6.3 percent,” he said, adding: “Compare this to the previous three-year period, under my predecessor, where growth was just at 4.3 percent. On top of this: in spite of the lingering effects of Typhoon Haiyan and the uncertainty in the global economy, our country still posted a respectable 6.1-percent GDP growth figure last year.” According to Mr. Aquino, the Philippines was upgraded to investment grade by all three major credit-rating agencies in 2013, and has continued to receive upgrades since. “We are, indeed, making history. All these, and many other factors, have led to even greater optimism for our country’s prospects.” The President also cited a recent Bloomberg report which, he said, noted that “the Philippines is forecasted to be the world’s second-fastest-growing economy in 2015.” “The tremendous amount of confidence the global community has developed for the Philippines is incredibly gratifying, especially considering that, not too long ago, we were known as the ‘Sick Man of Asia.’ However, our administration remains hard at work so that we can maximize every opportunity available to us, and I think many of you will agree with me when I say: You ain’t seen nothing yet,” President Aquino added.
briefs r&e ties up with govago’s taxi-booking system
A LOCAL taxi operator has tied up with a start-up technology company to compete with booking application operators such as GrabTaxi and Easy Taxi. Taxi operator R&E Group tapped tech-solutions firm Govago Inc. for the installation of global positioning system devices on the taxis of the former for “efficient dispatching and taxi-fleet management.” It is seen to compete with multinataional taxi-booking apps in the Philippines. According to a media release Govago’s taxi-booking system “provides valuable information such as taxi occupancy rate or number of passenger bookings, waiting time, the number of hours the taxi is on the road, average speed and identification of areas with the highest passenger occupancy, among others.” Lorenz S. Marasigan
manila water donates drinking bottles to mmda
The Metropolitan Manila Development Authority (MMDA) renewed its partnership with Manila Water for the former’s anti-heat stroke campaign with the East Zone concessionaire providing some 500 reusable drinking bottles for the use of traffic enforcers. Manila Water said the donation of drinking bottles to the MMDA, which were turned over to MMDA Chairman Francis Tolentino and MMDA General Manager Cora Jimenez, is a continuation of their support to MMDA when the agency conceived the antiheat stroke campaign in 2013. PNA
A6 Wednesday, March 25, 2015
Opinion BusinessMirror
editorial
Get online and shop
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NCE again, the Philippines has risen above the rest of the world. A survey done by the Pew Research Center showed that 98 percent of all Filipinos with cell phones have used short message service or text messaging in the last 12 months. They probably could have asked how many have sent or received a text message in the last 12 hours, and the percentage would have been the same. By comparison, only 39 percent of cell-phone users in Thailand have used text messaging. There seems to be some correlation between the use of texting and the fact that a home language uses the Roman or Latin alphabet, instead of unique language characters. The highest non-Roman alphabet text users are Russian, far behind at 83 percent. Even China comes in with only 78 percent of subscribers as “texters.” While smartphones are now connecting the globe through Facebook and other platforms, with nearly 70 percent access the social media through their phones, the next great explosion will be in e-commerce. In 1998 Nobel Prize-winning economist Paul Krugman wrote, “By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.” That only goes to prove that even the top experts are often wrong with their forecasts. Currently, China and India are the fastest-growing markets for buying goods and services electronically on the Internet. But these nations are only the top of the trend. Customers around the world are buying everything, from homedelivered pizzas to clothes and even astrological forecasts, using e-commerce. E-commerce-industry consultants are saying that the next big market will be in the Southeast Asian region, including the Philippines. In 2013 it is estimated that the region spent about $7 billion online. By 2018 that number is expected to rise to a huge $35 billion. Consulting firms A.T. Kearney and CIMB Asian Research Institute said last month in a joint report that three factors are driving this growth: increase purchasing power, Internet penetration and improving online offerings by retailers. While there is some negative sentiment about Filipinos using e-commerce, this sentiment may be as inaccurate as Krugman’s was. The Philippines is showing the fifth-fastest e-commerce growth in the world. A few years ago, the problem was that most Filipinos did not have credit cards, and that is still true. But with the advent of other payment portals, such as PayPal and Dragonpay Corp., retailers can find an active market if they wish to. That is the real problem now with growth. It is not that the consumer is unable or necessarily unwilling to use ecommerce; it is that the local sellers have not moved quickly and efficiently into selling their products and services online. Consumer hesitation comes with the first purchase or two. After that, they can become dedicated online shoppers.
The unbearable exuberance of China’s markets William Pesek
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BLOOMBERG VIEW
HINESE investors are acting as giddy as Americans were on December 5, 1996, the day Alan Greenspan made his infamous “irrational exuberance” dig at markets. Don’t take my word for it. Here’s what the country’s securities regulator said on Friday, the day the Shanghai Composite Index rallied to its highest close since May 2008: “Investors should be cautious about market risks,” the China Securities Regulatory Commission (CSRC) said on its microblog. “We shouldn’t be thinking if we don’t buy now, we will miss it.” Not much ambiguity there, and yet Shanghai stocks rallied on Monday, heading to their longest streak of gains since 2007. What gives? Beijing is making the same mistake Washington did 18-plus years ago by not clamping down on a stock-market boom that’s based more on leverage than reality. Then-Federal Reserve (the Fed) Chairman Greenspan’s swipe at Wall Street froth was a halfhearted one—so cryptic, in fact, that many seasoned Fed reporters missed it. It came in the middle of a mind-numbingly boring speech
about Japan’s 1980s bubble. For a couple of days markets quaked at the prospect that the Fed might cut short the ongoing rally, which had assigned astronomical valuations to the dodgiest start-ups. But then Greenspan blew the endgame. Lawmakers were apoplectic over the Fed targeting stocks. Rather than stand his ground, Greenspan shut up and moved on. If the Fed had clamped down more assertively in the late 1990s—say, with stringent margin requirements— a Nasdaq crash might’ve been averted. Chastened investors might’ve been less inclined to overleverage in the decade that followed. In Beijing central bank governor Zhou Xiaochuan can’t afford to make the same mistake. Economic fundamentals aren’t driving this rally—political expedience is. Chinese growth is slowing—an early indicator of factory activity hit
an 11-month low in March—Beijing is clamping down on credit and a property market that once seemed unstoppable is reeling. That leaves one place for Chinese to satisfy their urge to get rich quick: equities. And recent policy tweaks are helping them. Last September China reduced fees by more than half for individuals and institutions to open share accounts. At the same time, the futures exchange-cut margin requirements for equity-index contracts. Last month it trimmed the amount of cash banks must hold back from lending by 50 basis points to 19.5 percent. Not surprisingly, the outstanding value of margin trading, or shares purchased with borrowed money, on the Shanghai Stock Exchange rose to a record $158 billion on March 20. Actually, it’s been setting new highs almost daily for weeks now. In the week that ended on March 6, mainland investors opened 662,000 new stock accounts, the most since December, when the Shanghai gauge jumped 21 percent. Obviously, a fast-growing number of Chinese are buying for fear of missing out on the boom. With $3.8 trillion of currency reserves, China can always bail out the market if a crash happens. But before long, on top of keeping economic growth near 7 percent, the government will be propping up stocks, companies on the verge defaulting on dollar-denominated loans (property developer Kaisa may be the first) and state-owned enterprises suddenly starved for liquidity. Smart
as Zhou and President Xi Jinping are, that’s a lot of leaks to plug at a time when they’re also switching growth engines from investment and exports to services. Authorities must clamp down more forcefully on margin lending. The CSRC has already been ignored once. An eerie coincidence, its earlier warning came on December 5, 18 years to the day Greenspan first uttered his signature phrase. China’s regulator warned that stock prices for some listed companies were “relatively high,” and that “there are about 700 companies in the Shanghai and Shenzhen stock exchanges with a price-earnings ratio of above 100.” Three days later, investors pushed the Shanghai Composite up 2.8 percent to surpass 3,000. Today it’s 25 percent higher than it was on December 5. There are a few plausible explanations why so many investors might leave logic at the door. First, the potential of China’s middle class and hopes for more blockbuster initial public offerings like Alibaba’s are eclipsing worries about deflation. Second, Beijing had until recently been directing its 1.3 billion to pile savings into equities to support the market. Third, there’s some genuine optimism that China is serious about transforming its economy. But policy makers will regret willingly orchestrating this bubble. Making it easier for tens of thousands of small investors to bet on stocks will backfire terribly if economic fundamentals don’t begin to validate the market’s exuberance, and fast.
Politicians need to tackle infrastructure problem By Michael Smerconish The Philadelphia Inquirer/TNS
M
Y birthday celebration last weekend was the most expensive of my 53 years, but not because of celebratory extravagance. My car was eaten by the Godzilla of American potholes and, regardless of what I’m personally reimbursed, that impact will have a several-thousand-dollar reverberation on the economy. For me, this is no one-off. It’s the third time in five years that I have suffered blowouts on pothole-strewn roads, and I’m not that much of an outlier. AAA Mid-Atlantic calculates that nearly 50 percent of American motorists have experienced damage to their vehicles as a result of potholes in the last five years. Our family had just finished brunch in Brooklyn before heading home with me at the wheel. Trouble came just minutes after I exited the VerrazanoNarrows Bridge. Traffic on both sides of me prevented my swerving to avoid what’s best described as a crater. The result was one of those impacts that you feel in your bones. I quickly maneuvered off I-278 via Exit 13A, where I took position on the side of a busy road. I soon learned that our plight was not unique. The area’s tow trucks were all overwhelmed. Despite my best imitation of Jack Lemmon in the “Out of Towners (“You’ll hear from me if I don’t hear from you”), more than five hours passed before we were rescued. Two days later, on Monday at 6 p.m., I received an e-mail from the service manager of the garage where the car had been flat-bedded:
“I’m sorry. I have gotten over 24 towins today, 14 of them all needed tires. On top of the 85 appointments we had today for service/repairs/more tires. We do our best to get to every tow in the day they arrive. Unfortunately, with the road conditions in the tristate area, the cars coming in for blowouts are here by the dozens.” While on the side of the road I passed some of the time Googling “infrastructure.” I learned that once every four years, the American Society of Civil Engineers (ASCE) gives letter grades to our nation’s infrastructure in 16 categories. In 2013 the overall assessment warranted a D-plus, and in the category of roads, we received a D (poor). The executive summary on roads noted: “Currently, the Federal Highway Administration estimates that $170 billion in capital investment would be needed on an annual basis to significantly improve conditions and performance.” The remainder of the report card had grades that would make any parent wince: Airports: D; Bridges: C-plus; Dams: D; Drinking Water: D; Energy: Dplus; Hazardous Waste: D; Inland Waterways: D-minus; Levees: D-minus; Ports: C; Public Parks and Recreation: C-minus;
Rail: C-plus; Schools: D; Solid Waste: Bminus; Transit: D; Wastewater: D. “Civil engineers work on civil infrastructure,” ASCE past president Andy Herrmann told me. “That’s what we do. That’s what we see every day, and we’re seeing it deteriorate. The lack of investment is starting to hurt us and we’re seeing the lack of maintenance, which just accelerates the deterioration of our infrastructure.” According to Herrmann, 32 percent of America’s major roads are in poor or mediocre condition, and that costs each US motorist $324 on average. The average for Pennsylvania is $424 per motorist, and in New York that number jumps to $505. (AAA Mid-Atlantic told me that the annual cost to motorists of potholes alone is $6.4 billion, which might be exceeded this year due to weather.) Herrmann faults elected officials for not addressing the infrastructure issues. “I think the political leadership is afraid to present it to us,” he said. “They are so looking at no new taxes, no new taxes, they’re not looking at just basic maintenance. The gas tax hasn’t really been raised, the federal one, since 1993. So we’re living on 1993 dollars in 2015 to maintain our roads and bridges.” Ed Rendell might be the exception. In the late 1990s he replaced Houston Mayor Bob Lanier as the chairman of an organization called Rebuild America, an interest that continued while he was governor and included his founding Building America’s Future, with Michael Bloomberg and Arnold Schwarzenegger as the cochairmen. “Infrastructure is important, first
and foremost, to our public safety,” he told me. “We see what happens when bridges collapse or pipelines burst. It’s important to our quality of life. It’s important to our economic competitiveness. The ability to move goods swiftly is crucial, particularly in the global economy. And, last, it’s the best producer of quality middle-class jobs that pay $60,000, $70,000 and $80,000 a year, and you don’t have to have a college degree for it.” I asked him what would happen to 2016 congressional, senatorial, or presidential candidates who premise their campaign on addressing the infrastructure? “I think that candidate, if they explain it well and talk about the cost of doing nothing compared to the little cost of raising a tax to help pay for infrastructure, does very well,” Rendell said. “You know, people think that you raise taxes, and that’s immediate death. My first year as governor...I inherited a $2.4billion deficit from the outgoing administration. I wanted to put half a billion dollars into early childhood education. “I raised $2.7 billion in taxes—the second biggest in Pennsylvania history—and everyone said I was dead politically. Three years later, I got elected by a margin of 21 percent, more than Chris Christie got reelected. Of course, nobody talks about me running for president.... Nonetheless, raising taxes isn’t death if you use the money and give people something concrete that they can see and understand as benefiting their lives.” I’m ready to test Rendell’s hypothesis. Now, all we need are candidates to champion the cause.
Opinion BusinessMirror
opinion@businessmirror.com.ph
China wants to buy Europe
Life-insurance business in Japan Dennis B. Funa
Leonid Bershidsky
C
BLOOMBERG VIEW
HINESE investors have a powerful attraction to companies in the European Union, and their targets are increasingly high-profile. In recent days, they’ve shown interest in an 18-building compound on Berlin’s Potsdamer Platz and in the Italian tire-maker Pirelli. For some unfathomable reason, Europe considers Chinese investors, even state-owned ones, more benign than, say, Russian ones. Until 2011, China was mostly a receiver of European investment, but then the debt crisis drove down asset prices. Some governments became desperate to privatize, and venerable corporations got less picky about potential investors. Chinese buyers acquired Volvo in Sweden, a large stake in Peugeot Citroen and fashion house Sonya Rykiel in France, the Piraeus Port in Greece, Pizza Express restaurants and the upscale clothing maker Aquascutum in the UK. Chinese investment increased exponentially. Last year—when the Peugeot and Pizza Express deals were made—Chinese merger and acquisition activity in Europe set a new record. Although Chinese investment in the US has also grown, outstripping US flows into China, Europe has proved more welcoming. China holds only about 1 percent of the European foreign direct investment stock—not enough to worry about. But this doesn’t include local booms in private Chinese investment, like those in Portuguese or Latvian real estate under those countries “golden visa” programs. Europe is relatively cheap, it’s open, and it’s got things that Chinese companies are after: technology and household names. The Pirelli deal is about the latter. The bidder, China National Tire & Rubber Co., part of the state-owned giant ChemChina, sells 20 million tires a year, but no one has ever heard of its brands, Rubber Six and Aeolus. It doesn’t have Pirelli’s glorious racing history or its famous calendar. The Italian company seems overvalued—trading at 23 times earnings, compared with 16 for Michelin and 11 for South Korea’s Kumho. Yet it has the fifth most valuable tire brand in the world, and the other two European brands in the top 5, Michelin and Continental, belong to much bigger companies that make unwieldy targets for acquisition. For an ambitious buyer with plenty of money and production capacity, Pirelli is the perfect deal. Its market cap is only $7.5 billion (tiny compared with ChemChina’s revenue last year of almost $40 billion), and its name can propel the Chinese tire giant to international prominence. It’s a bit like when the Chinese company Geely bought Volvo—not just for its technology but for its internation-
al recognition. Although the market has already overshot ChemChina’s initial offer price, premium and all, it would need to go much higher before Pirelli becomes too expensive for what is essentially an arm of the Chinese government. Therein lies a problem. Most Chinese investment in Europe goes into existing, established firms. There are almost no greenfield projects. There’s nothing wrong with private companies—such as Pizza Express buyer Hony Capital, potential Potsdamer Platz investors Fosun International and Ping An Insurance, or Volvo savior Geely— buying into European firms. Crossborder business is common these days. But when old European brands fall into the hands of Chinese state companies, it becomes geopolitics, too: European countries are, in effect, lending part of their heritage to the octopus that is the Chinese government so it can expand its global influence. “For the moment, Chinese investment seems like money falling from the sky, but it could turn ... into a Trojan horse introducing Chinese politics and values into the heart of Europe,” Princeton University’s Sophie Meunier wrote in a 2014 paper. European investors in China are required to set up joint ventures with Chinese partners, and other restrictions apply in specific industries. The EU is trying to negotiate for more openness, but Europe remains at a disadvantage. This isn’t just about reciprocity, however. Openness to investment by Chinese state entities means support for a regime that is not necessarily Europe’s friend and that certainly doesn’t share its values. It’s no better than throwing European markets open to state-owned Russian energy giants such as Rosneft and Gazprom. They would gladly buy up everything they could, if only to strengthen Moscow’s negotiating position with the EU. These days, European governments are wary of Russian investments, even the private kind. The UK is forcing billionaire Mikhail Fridman’s company LetterOne to sell off the North Sea oil production facilities it acquired with the German energy company Dea. It’s not clear what makes state-owned Dongfeng Motor or ChemChina more acceptable.
I
INSURANCE FORUM
N terms of life-insurance premium, Japan is the second-largest market in the world, second only to the United States. As of 2013 figures, Japan generated a premium volume of around $422 billion. A 16.21-percent share of the world market. The United States is still the world’s largest life-insurance market with $522 billion in premium volume, or 20.43 percent, of the world’s market share. Coming in a far third is the United Kingdom with $222 billion in premium volume, or 8.55 percent, of the world’s market.
Like that in the Philippines, the life-insurance market in Japan is dominated by foreign life insurers. As of 2012, the top 3 life insurers in Japan are Axa S.A. at No. 1, United Health Group Inc. at second and Allianz SE at third. There are only four Japanese insurers in the top 20, they are Japan Post Insurance Co. Ltd. at No. 6, Nippon Life Insurance Co. at No. 11, Meiji Yasuda Life Insurance Co. at No. 16 and Dai-ichi Life Insurance Co. Ltd. at No. 17. The total life-insurance payments averaged at Y23 trillion annually.
The scourge of illegal-wildlife trade
C
By Steven Broad
AMBRIDGE, United Kingdom—On February 13, 2014, heads of state and ministers from 41 countries met in London to inject a new level of political momentum into efforts to combat the growing global threat posed by illegal-wildlife trade to species such as elephants, rhinos and tigers. The UK government-hosted meeting adopted the 25-point London Declaration, with ambitious measures agreed to eradicate the market for illegal-wildlife products; strengthen law-enforcement efforts and ensure effective legal frameworks and deterrents are in place; and promote sustainable livelihoods through positive engagement with local communities. More than a year on, representatives from these governments will gather again on March 25 in Kasane, Botswana, to review progress on the implementation of that declaration and, hopefully, commit to new and tangible actions to further strengthen their implementation. The scale of the crisis governments in Kasane are facing is daunting: Africa-wide, almost 1,300 rhinos were lost to poaching in 2014,
Wednesday, March 25, 2015
1,215 of them in South Africa alone. The situation with elephants remains dire—the most recent analysis of data from the Traffic-managed Elephant Trade Information System (ETIS) clearly indicates high levels of illegal ivory trade continuing. Most worrying is the significant increase in the frequency of largescale ivory seizures—those of over 500 kg—which are a strong indication of the involvement of organized criminal networks. The 18 seizures made in 2013 collectively constitute the greatest quantity of ivory derived from large-scale seizures since 1989, when records began. The crisis is not confined to Africa: in Asia, Traffic’s tiger-seizures database clearly indicates that illicit trafficking of tiger parts remains persistent. A minimum of 1,590 tigers were seized in tiger range
countries between January 2000 and April 2014, an average of two per week and increasing numbers of seizures have been made by most range states. With over 218,000 pangolins reported to have been seized by enforcement agencies between 2000 and 2012 worldwide, we must also remember that wildlife crime is an issue that goes well beyond elephants, rhinos and tigers. While these figures paint a bleak picture of the illegal-wildlife trade landscape, it would be wrong to conclude that countries will have little to report in terms of progress at Kasane. Although the ivory-seizure figures do demonstrate high levels of trade, they also demonstrate higher levels of law-enforcement action, especially in Africa, and we hope these countries remain vigilant. High-level political attention to the issue continues to be significant, with United Nations SecretaryGeneral Ban Ki-moon earlier this month expressing concern over the environmental, economic and social consequences of wildlife crime, and Premier Li Keqiang of China last May pledging financial support for African countries to combat poaching.
The Japanese life-insurance market has been plagued by a decreasing penetration rate, which has seen a gradual decrease in the number of life-insurance policies issued since the 1990s. It has been observed that there has been a decrease in mortality-type insurance and an increase in the more medical-type policies. Perhaps a direct consequence of an aging population, a problem recognized by the industry. From a peak of five insurance policies owned per household in 1994, it has decreased to 3.6
Most worrying is the significant increase in the frequency of largescale ivory seizures—those of over 500 kg—which are a strong indication of the involvement of organized criminal networks. The 18 seizures made in 2013 collectively constitute the greatest quantity of ivory derived from large-scale seizures since 1989, when records began. Some countries have made improvements to legislation, including Thailand, which probably had one of the largest unregulated ivory markets in the world but has recently taken steps to improve the legislation governing its domestic ivory market. There is still a very long way to go for Thailand before its illegal ivory markets are shut down, but this was an important step in the right direction. China has recognized the importance of a more targeted approach to reducing demand for ivory and this January organized a workshop to discuss strategies for curbing illegal ivory trade—particularly
A7
policies per household in 2012. A look at their 2013 figures will show that whole life insurance still constitutes a bulk of the policies issued at 25.56 percent of the total policies. Coming in second is the medical type of insurance at 24.15 percent of the total policies. Third is the term life at 14. 41 percent, fourth is the endowment type (death benefits) at 10.77 percent, fifth is cancer insurance at 8.8 percent, sixth is fixed annuity at 8.25 percent, seventh is juvenile insurance at 3.57 percent and eighth is the variable annuity at 1.01 percent. In terms of assets, the Japanese life-insurance industry holds a total asset of ¥350 trillion as of the end-March 2013. Almost 42.73 percent of these assets are in Japanese government bonds (JGB). As of February 27, 2015, $1 is equivalent to ¥120.27. Japan, as we all know, remains in an economic slump. After the financial crisis in the 1990s following the collapse of its “bubble economy,” its 2013 gross domestic product (GDP) is at 1 percent with a GDP per capita (2013) of ¥3.756 million. It suffers from falling stock prices, falling interest rates (0.349 percent for the JGB 10-year yield as
of February 27, 2015). Between 1997 and 2009, a total of eight insurance companies went bankrupt. Four of these, however, were able to restart business again, particularly Chiyoda Life, Kyoei Life, Tokyo Life and Yamato Life. In order to face these difficult challenges, a number of steps have been instituted. Foremost of these are the accumulation of internal reserves; restructuring their investment portfolios, particularly by reducing their stocks investments; putting in place asset-liability management; reducing operating expenses, accumulation of additional policy reserves; and revising their products, such as moving into medical insurance. There are lessons to be learned by the Philippine life-insurance industry. At the forefront in confronting these challenges is the Life Insurance Association of Japan, an association incorporated on December 7, 1908. Its avowed mission is the promotion of a sound development for the life-insurance industry. No doubt, as the second-largest lifeinsurance market in the world, the Japanese life-insurance industry will continuously be watched as it faces strong challenges.
targeted at the collection and art investment circles. Countries in Africa are working together on a common African Strategy on combatting illegal-wildlife trade that will be discussed at an African Union conference just a month after Kasane. While these green shoots of progress are promising, there is little doubt that much more needs to be done and it is hoped that Kasane can be the turning point where the lofty declarations of London can be translated into tangible actions on the ground. Wildlife criminals are responding to the actions of last year by changing their trade routes and methods, using new technologies and getting more organized. To keep up with these developments, new approaches need to be agreed at Kasane that make it significantly harder for criminals to operate, increasing the indirect and actual risks they face and reduce the rewards they reap. New players will also need to be brought into the fray. For example, with traffickers typically using the same transportation means as legal importers, the transport sector is in-
advertently becoming a critical link within illegal-wildlife trade chains. Much more outreach is needed to the private sector, to prevent criminals abusing other legitimate business services in the finance, insurance and retail sectors. Meanwhile, the power of local communities, who live with and adjacent to wildlife, needs to be harnessed for they are the eyes and ears, the very guardians of the wildlife within their realm. Community-led approaches need to strengthen the role these communities can play in reducing illegal-wildlife trade—while safeguarding their dependence on natural resources. The world’s governments in London last year declared they were up to the challenge and committed to end the scourge of illegal-wildlife trade. A year later, Kasane provides the venue for those governments, and others, to show that they are able and willing to turn those words into action. Steven Broad is executive director of the wildlife-trade monitoring network Traffic.
2nd Front Page BusinessMirror
A8 Wednesday, March 25, 2015
Tetangco still not giving up on targets By Bianca Cuaresma
T
he Bangko Sentral ng Pilipinas (BSP) is confident that the higher growth target set by the government for this year is still within reach on the back of firm domestic conditions and improved production efficiency. This view is in contrast, however, to the analysis of some international bank economist, who said while the country’s growth momentum is still there, it will likely fall short of the government’s ambitious 7-percent to 8-percent target for 2015. “Very broadly, we see the country continuing to grow in a stable inflationary environment…. More specifically, the government’s target of 7 [percent] to 8 percent is attainable, as domestic demand conditions remain firm and supported by improving production efficiency and robust labor market dynamics,” the central bank governor, Continued on A2
SMC boss wants to bag ‘the deal of the century’
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By VG Cabuag
onglomerate San Miguel Corp. (SMC) on Tuesday said it wants to bid for the right to own and operate the Malampaya deepwater gas-to-power project, which the company president called “the deal of the century.” Ramon Ang, SMC president and COO, said the company is interested in the project even before the government has decided to bid it out. “That is the bidding that I want to join. We are ready to bid if they [Department of Energy] are ready,” Ang told reporters. “Once the contract expires, all of that will be returned to the government. So that really is the biggest opportunity coming for us,” Ang said.
ANG: “Once the contract expires, all of that will be returned to the government. So that really is the biggest opportunity coming for us.”
The 25-year contract of the Malampaya consortium, which includes Shell Philippines Exploration BV, Chevron Texaco Malampaya Llc. and Philippine National Oil Co., is set to expire in 2022. The 25-year contract, however, was made on the assumption that the field only has a life of 25 years. Ang, however, said the current pipeline is the main line that connects to other hundreds more lines in Batangas. The Malampaya gas field currently supplies natural gas to the 1,200-megawatt (MW) Ilijan plant, the 1,000-MW Santa Rita and 500-MW San Lorenzo plants. The gas field is 850 meters deep offshore northwest Palawan and has proven reserves of about 2.5 trillion to 3.5 trillion cubic feet of gas. Ang said it would cost a company about $10 billion to build another Malampaya today. The Malampaya project is regarded as one of the longest subsea pipeline in the world at 504 kilometers. It extracts natural gas from the Malampaya gas field covered by Service Contract 38 that is condensed and is delivered straight to power plants. Ang said the initiative is part of SMC’s plan to participate in the bidding for all infrastructure projects of the government.
www.businessmirror.com.ph
ADB: Low inflation chance to hike taxes T By Cai U. Ordinario
he current low-inflation environment brought about by the cheaper cost of oil presents an opportunity for governments like the Philippines to raise taxes to improve social services and invest in renewable-energy projects, according to the Asian Development Bank (ADB). In the Asian Development Outlook 2015 (ADO), ADB said low oil prices in recent months have benefited Asian economies as it resulted in cheaper consumer goods. “I think it was indicated in the presentation [that low oil prices] is good news for businesses, consumers, and so forth. It’s also an opportunity to raise taxes for other purposes. These can be for social spe nding or renewable-energy sources, and so on, so there’s an opportunity there,” ADB Philippines Country Director Richard Bolt said in a news conference on Tuesday. Apart from increasing taxes, the ADB said other measures, such as the removal of energy subsidies, can also be implemented to provide some relief to countries’ finances. Bolt said countries like Indonesia would do well to cut energy subsidies at this time to free up public finances that can be realigned to increase spending for social services. See “ADB,” A2
CHINA FACTORY GAUGE SLUMPS TO 11-MO. LOW
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Chinese manufacturing gauge fell to an 11-month low in March, suggesting more stimulus may be needed to bolster factories in the world’s second-largest economy. The preliminary Purchasing Managers’ Index (PMI) from HSBC Holdings Plc. and Markit Economics was at 49.2, missing the median estimate of 50.5 in a Bloomberg survey and down from February’s 50.7. Numbers below 50 indicate contraction. The first reading of momentum in March may add to concerns of a deeper downturn after industrial output, investment and retail-sales growth missed analysts’ estimates in January and February. Premier Li Keqiang this month pledged to take action if needed to shore up growth. “Activity growth slowed in the first quarter,” said Tim Condon, head of Asia research at ING Groep NV in Singapore. “If the official PMI also slides, it will reinforce that further policy stimulus will be needed to hit the 7-percent GDP [gross domestic product] growth target.” Chinese stocks slipped in Hong Kong, the one-year interest-rate swap declined, and the Australian dollar—
Macau. . .
seen as a proxy for China’s economy due to the nation’s shipments of raw materials—slipped after the news. Readings of employment and new orders both worsened. The report, known as the Flash PMI, is based on 85 percent to 90 percent of responses to surveys sent to more than 420 manufacturers.
Policy action
Policy-makers will take action if China’s growth, which the government targeted at about 7 percent this year, drifts toward the lower limit of its range and cuts into employment or wages, Li said this month. Bloomberg’s GDP tracker, which draws on measures such as electricity production, shows the pace weakened to 6.28 percent in February. “With the data continuing to disappoint, the stimulus schedule may have to be stepped up,” Bloomberg economists Tom Orlik and Fielding Chen wrote in a note. “We expect the government to continue to roll out a combination of targeted pro-growth moves and universal cuts in interest rates and the reserve requirement ratio.” Bloomberg News
Continued from A1
battering the local economy and the share prices of casino operators such as Sands China Ltd. and Galaxy Entertainment Group Ltd. Sands China rose 1.6 percent to HK$32.40 in Hong Kong trading as of 10:14 a.m., while Wynn Macau Ltd. and MGM China Holdings Ltd. gained about 1.2 percent. SJM Holdings Ltd. was unchanged, while Galaxy Entertainment dropped 1 percent. Chui’s tourism panel would draft a five-year plan for stable casino growth while expanding the city’s tourist offerings, the chief executive said. The Macanese government will evaluate the development of the gaming industry since ending local casino mogul Stanley Ho’s monopoly in 2002 and opening casinos to foreign operators, with the goal of strengthening oversight. “Even though the economy has faced major difficulties and challenges, the overall fundamentals of the economy are good,” Chui told legislators on Monday, his first policy address since starting a second term last December. “The pace of the economic growth has slowed, prompting us to accelerate economic diver-
sification.” The government also plans to improve airport facilities and expand airline services, Chui said. Macau’s economy shrank 17 percent in the final quarter of last year as casino revenues slipped 2.6 percent, the first such annual decline. According to the median estimate of nine analysts surveyed by Bloomberg News in January, gaming revenues would probably drop another 8 percent this year. The most pessimistic expected a 21-percent decline. The new projection provided by Chui in a post-speech briefing would represent a 32percent decline from last year’s average of 29.3 billion patacas, according to data from Bloomberg Intelligence. The government’s projection hasn’t historically been a good indicator, D.S. Kim, an analyst at JPMorgan Chase & Co., wrote in a note on Tuesday, saying he would leave unchanged his estimate of an 18-percent drop. Kim joined Barclays Plc. in predicting a March casino revenue decline of 36 percent to 39 percent. Bloomberg News