BusinessMirror April 8, 2015

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THERAPY FOR A CLOUDY OUTLOOK

Life

The promised Messiah

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EXPLORING GOD’S WORD, FR. SAL PUTZU SDB, AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

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SELL YOURSELF FIRST, THEN SELL YOUR ART SECOND »D4

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Wednesday, April 8, 2015

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Therapy for a cloudy outlook B H G Tribune News Service

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FOOL and his money... ...Or.... Insanity is doing the same thing over and over when it didn’t work the first time.

I had severe doubts about my sanity as I whiled away a spring afternoon with the kind folks at Western Digital tech support. It was only a week ago that I was butting my head against a Seagate Personal Cloud drive. I finally gave up when I realized, quite sanely, that no matter what I did, it wouldn’t work for me.

Others who tried it either sang its praises or agreed with me that, while it promises, promises, the experience is mostly unfulfilled, unfulfilled.

The idea behind the Western Digital My Cloud is exactly the same as the idea behind the Seagate drive. Connect a cable between a wireless router and the device, plug it in and wirelessly back up files you may need when you’re away from your computer. It’s called a personal cloud, as opposed to the cloud you may be using already, such as Dropbox or Carbonite. With your personal cloud, only you have the key to your files.

There’s a downside to having files stored on a drive next to your PC. If your house burns down, your files will go with it. A power outage would make the drive inaccessible. If you back up to the usual cloud, your files are offsite, presumably—hopefully—impervious to power outages and earthquakes.

I take it on trust that people who store my cloud files can’t get into them. But if you’re sloppy about your personal cloud password, a hacker could do some real harm.

Compared to the Seagate device, the My Cloud’s software is intuitive, once you get used to the terms it uses. Videos on the Western Digital web site ( d o ) held my hand as I learned the difference between a “share” and a “user.” Shares are folders that you use to back

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up your files. Users are, well, you and I. There also is an abundance of tutorials on YouTube.

Folders can be password-protected, or if you want the world to know how much you owe the IRS, you can make them public. Folders can be read-only, or you can give your users full access to them. Video that’s been backed up can be streamed to your smartphone, tablet or another PC. The iPhone and iPad apps for the Western Digital drive are clean and user-friendly. There also is an app for Android devices. You choose which categories of files, such as documents, you want to back up, or you can back up only individual files. Backups can run continuously in the background, or you can set a time for a daily or hourly backup.

Like the Seagate Personal Cloud, the Western Digital My Cloud that I bought holds 3 terabytes (TB) of data, photos, music, videos—everything except applications—and costs $169. And, like the Seagate, the WD drive supports Time Machine backups from Macs.

Backing up wirelessly can be slow. It took the better part of a day to do a Time Machine backup of 500 gigabytes.

If you need extra storage and don’t want to spring for a larger hard drive, you can attach at least one auxiliary external hard drive, via USB, to the My Cloud drive, which means your storage space could be much more than the My Cloud’s native capacity, which ranges from 2 TB to 6 TB. If you hanker for a mirror drive next to the original drive, they are available, too. Now, about doing the same thing over and over.

I wanted to create a password-protected folder on the My Cloud drive called “harold.”

Despite following WD’s tutorials, I simply couldn’t back up to the folder. It kept asking for my password—I mean, like over and over. A first-tier WD tech support engineer took over my screen, and tried over and over to back up to the “harold” folder. Flummoxed, he bumped

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The Philippines shows the world how to #VibeOn IT’S not uncommon for Filipinos to encounter challenges as we go through work and study every day. And while a little glitch here and there can make us sad or grumpy, it’s nothing that a mood boost from our favorite people can’t fix. Viber, the country’s leading mobile-messaging app (www.viber.com/ viberph), advocates the spread of uplifting viberph messages to counter everyday setbacks with its new #VibeOn campaign, which invites users to turn challenges into good vibes through the Vibe On! Sticker Pack.

There’s no better group to share positive vibes than your family and friends, and the special sticker pack makes for inspiring exchange of messages with stickers like

“Kaya mo yan!”, “Chill ka lang”, “Ikain mo na lang yan”, and “Go, friend!” The pack is free to download and features 36 expressions of beloved Viber characters Violet, LegCat & DJ that can make anyone’s day brighter and happier.

“Viber wants its signature stickers to do more than just enliven conversations so we came up with the Vibe On! Sticker Pack.

It promotes a culture of encouragement among Filipino Viber users and each sticker is like a virtual consoling hug or pat on the back that will surely turn woes into wonderful opportunities to cheer family and friends up,” said Crystal Lee, Viber country manager for the Philippines.

Viber recently launched the #VibeOn campaign through a series of mall events at SM Mall of Asia, Glorietta and SM City Manila. Attendees were treated to a day of fun games, great music and cool freebies from Viber and partners like GrabTaxi, which now allows passengers to Viber their drivers whenever they book a ride through GrabTaxi. “We Filipinos are famous for our ability to smile despite our problems and this new campaign highlights that endearing trait. We invite Viber users to download the Vibe On! Sticker Pack and create more heartwarming moments with friends and family,” Lee concluded.

LIFE

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FASTGROWING ASIAN AVIATION CONFRONTS SAFETY CHALLENGES BusinessMirror

World The

B3-1 | Wednesday, April 8, 2015 • Editor: Lyn Resurreccion

SECURITY guards stand near the newly recovered remains of the fuselage of the ill-fated AirAsia Flight 8501 on the deck of rescue ship Crest Onyx at TTanjung Priok port in Jakarta, Indonesia, in this March 2 photo. AP/DITA ALANGKARA

Fast-growing Asian aviation confronts safety challenges

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ONG KONG—For Asia’s aviation industry, the growing pains have just begun.

airlines or block them from launching new flights and modifying schedules.

The leader of Thailand’s military government, which ousted its civilian predecessor in a coup last year, blamed years of neglect for allowing problems to accumulate to a critical mass. He said the civil aviation department has only 12 inspectors, a figure unchanged for years despite huge growth in tourism.

The dictator has vowed to use his authoritarian powers to overhaul aviation, but it’s unclear whether sweeping changes can be implemented fast enough to avoid a damaging downgrade of Thailand’s safety rating.

Ross said Thailand’s problems are not unique and stem from the “superfast expansion that’s been taking place over the last 10 years.”

Besides hurting tourism, the Icao warning could also prompt insurance companies to raise their rates for airlines operating in Thailand.

Passenger numbers in Asia Pacific have risen by a third over the past five years to 1.1 billion, and the region now accounts for 33 percent of global air passenger traffic, according to the International Air Transport Association (IATA). That proportion is forecast to grow to 42 percent within the next two decades as an extra 1.8 bil-

“We’re in uncharted waters,” said Desmond Ross, principal at DRA International aviation consultants and former head of the Pacific Aviation Safety Office, which oversees airline safety for South Pacific islands. “I don’t think the world has seen this sort of growth before.”

A third of airplane accidents in the Asia-Pacific region from 2008 to 2012 “involved deficiencies in regulatory oversight,” the International Civil Aviation Organization (Icao) said in a report this year.

Another 27 percent involved “deficiencies in safety management.”

Meanwhile, the agency’s recent audit of Thailand has produced disquieting revelations about what lies below the surface of a country that has marketed itself to the world as a safe and welcoming destination.

The agency informed governments in March of “significant safety concerns,” prompting several Asian nations to step up inspections of Thai

A year of disasters, the disappearance of Malaysia Airlines Flight 370 and financial turbulence highlight the challenges confronting the world’s biggest air-travel market, where governments, regulators and airlines are struggling to keep up af after a decade of astonishing growth.

A United Nations agency’s warning about airline safety in Thailand, one of the world’s top tourist destinations, is just the latest sign of ferment in the industry.

The boom has been driven by the region’s explosive economic growth and market liberalizations that have allowed dozens of new discount carriers to flourish, turning the airline business on its head.

The strains are also showing in recurring pilot shortages and shortcomings in air traffic-control systems and airport infrastructure that countries are scrambling to upgrade, especially in big Southeast Asian nations, such as Indonesia.

U.S. SERVICE FIRMS GREW A SLOWER PA AT PACE IN MARCH

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delayed the shipping of needed parts and components.

Fourteen of 18 services industries reported growth in March, led by real estate, hotels and restaurants, and transportation and shipping.

Still, many analysts now forecast that the economy barely expanded in the first three months of this year. Growth has slowed dramatically in the last six months.

The ISM is a trade group of purchasing managers. Its survey of services firms covers businesses that employ 90 percent of the American work force, including retail, construction, health care and financial ser services companies.

The ISM’s manufacturing index, released last week, fell for the fifth straight month in March. In addition to the strong dollar, factories have been held back by cheaper oil, which has hurt orders for steel pipe and other equipment.

Home construction has been weak despite low mortgage rates. And Americans are still cautious about spending, even with a sharp plunge in gas prices since last June.

Growth has faltered as a result. The economy expanded at a 2.2-percent annual rate in the final three months of last year, down sharply from a blistering 4.8 percent in the six months from last April through November.

Most analysts expect it slowed even further in the January to March quarter.

Harsh winter weather may have been partly to blame. But paychecks are still barely keeping up with inflation, even as the unemployment rate has fallen. That is likely weighing on spending and growth. AP

ASHINGTON—US service firms expanded at a slightly slower yet still healthy pace in March, an encouraging sign after multiple reports last week pointed to a slowing economy.

The Institute for Supply Management (ISM) said on Monday that its services index slipped to 56.5 last month, from 56.9 in February. Any reading over 50 indicates expansion.

A measure of sales fell last month and dragged down the overall index. But gauges of hiring and orders rose, evidence that services firms may see solid growth in the coming months.

That suggests that recent signs of a weakening economy could prove temporary. The services figures come after a disappointing jobs report last week, which echoed a slew of other weak economic data this month. Employers added just 126,000 jobs in March, the fewest in 15 months.

“Based on this survey, rumors of the demise of the US economy have been greatly exaggerated,” Paul Ashworth, chief US economist at Capital Economics, said in a note to clients.

At the same time, service firms covered by the report—which include health-care providers, hotels, restaurants, construction companies and banks—are less affected by some of the trends which have held back manufacturing.

Factory output has slowed partly because of a rapid rise in the value of the dollar, which makes goods exports more expensive.

Manufacturing firms were also hit by a labor dispute at ports in California, which

lion passengers take to the skies.

Another big source of concern is Indonesia, where in December an AirAsia jet carrying 162 people plummeted into the sea as it ran into stormy weather on its way from Surabaya to Singapore.

The disaster, which was the first-ev first-ever fatal plane crash for the popular budget operator, was one of five suffered by Asian carriers in a 12-month span. The flight itself was unauthorized by Indonesian authorities, showing up laxness in its aviation oversight.

Flying is often the easiest travel option in Indonesia, a sprawling archipelago of 17,000 islands that’s home to 250 million people.

IATA is worried that regulations and infrastructure aren’t being updated fast enough to keep pace with Indonesia’s expansion. The Southeast Asian country’s air-travel market is forecast to triple over the next 20 years to 270 million passengers, making it the world’s sixth biggest.

“I am very concerned about safety in Indonesia,” IATA Firector General and former Cathay Pacific Airways CEO Tony Tyler said in a speech to Indonesian aviation officials in Jakarta last month. He noted the country has had at least one crash in which a plane has been written off every year since 2010.AP

Malaysia’s lawmakers revive detention without trial in antiterror law

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State (IS) group.

Authorities on Sunday arrested 17 people, including an Indonesian, accused of planning to rob banks and attack police stations and army camps to obtain weapons.

Critics said the new law was a revival of the Internal Security Act, which was repealed in 2012.

New York-based Human Rights Watch called it a “giant step backward for human rights” in Malaysia, and said it raised concerns that the government will once again use the law to intimidate and silence vocal critics.

“By restoring indefinite detention without trial, Malaysia has reopened Pandora’s box for politically motivated, abusive state actions that many had thought was closed when the abusive

UALA LUMPUR, Malaysia—Malaysia revived detention without trial when lawmakers on Tuesday approved an antiterror law that the government said was needed to fight Islamic militants, but rights groups criticized as a giant step backward for human rights in the country.

The Prevention of Terrorism Act bill was passed by lower house lawmakers in the wee hours of the morning after hours of debate, with 79 votes in favor and 60 against.

It allows authorities to detain suspects indefinitely without trial, with no court challenges permitted.

The government said the law was needed because dozens of Malaysians have been arrested since 2013 for suspected links to the Islamic

Internal Security Act was revoked in 2012,” the group’s deputy Asia director, Phil Robertson, said in a statement.

Home Minister Zahid Hamidi, however, said the new law was crucial to curb the rise of Islamic militants.

“This is a real threat, and prevention measures are needed,” he said during the debate. National police chief Khalid Abu Bakar said the 17 people, aged from 14 to 49, were arrested during a secret meeting on Sunday to plot attacks in Kuala Lumpur, Malaysia’s biggest city, and in the administrative capital of Putrajaya.

The group was planning to kidnap several high-profile individuals, rob banks for money, raid police stations and army camps for weapons, and procure more firearms from another terror group

in a neighboring country, Khalid said in a statement on Tuesday.

The senior member of the cell is a man detained in 2001 under the former Internal Security Act, and has undergone militant training in Afghanistan and Indonesia’s Sulawesi province, he said.

Another key member is a 38-year-old religious teacher.

Khalid said both men were in Syria last year for militant training and returned to Malaysia in December.

“The aim for this new terror group is to form an Islamic state in Malaysia,” he said.

Other detainees include two army personnel, a security guard who has access to firearms and an Indonesian militant who is skilled in handling weapons, Khalid said. AP

WORLD

MALAYSIA’S landmark Petronas Twin Towers illuminates the night skyline in Kuala Lumpur, Malaysia. AP/JOSHUA PAUL

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ON THE PROWL ON THE PROWL

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BusinessMirror

| WEDNESDAY, APRIL 8, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

Sports TIGER WOODS offers a quick glimpse that it could be just about anything. AP

» JASON DAY looking uncomfortable. AP

“But to be able to slip on a green jacket...I don’t know,” he said. “That’s a difficult one, mate. I’m dancing around the question.”

Here’s the easy solution for Day. He can’t reach No. 1 in the world this week if he were to win. But at No. 5 in the world, and healthy and determined as ever, he is among the favorites to win the Masters this week.

EARLY TO WORK

UGUSTA, Georgia—Jason Day set two goals for his career. He wanted to get to No. 1 in the world, and he wanted to win the Masters.

But if he could only reach one goal, which does he choose?

For the only time during his engaging news conference on Monday, the 27-year-old Australian looked uncomfortable.

He loves the Masters, his favorite major. He was runner-up in 2011. He had a share of the lead late on Sunday in 2013 until he missed out on the playoff between Adam Scott and Angel Cabrera, with Scott becoming the first Aussie in a green jacket.

But there’s an appeal to be No. 1 in the world, too. And four members of Augusta National in their green jackets were in the room.

“It’s tough,” Day said, leaning back and shaking his head. “This is the tournament that got me into golf. And being No. 1 has always been a lifelong goal of mine. Just to be able to say you’re No. 1, you are the best golfer on the planet, just for one day, would be the best thing ever. Knowing that you were the best in the world would be pretty neat.”

So the answer is to be No. 1 in the world?

Hang on.

A TOUGH CHOICE FOR DAY

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TWO-TIME US Open champion Curtis Strange was at the Masters on Monday and already at work with ESPN. It’s one day earlier than he usually works. Chalk that up to “The North Clause.”

Andy North, who grew up and still lives in Wisconsin, typically works on Monday, but there was an agreement that Strange would fill in if Wisconsin reached the National Collegiate Athletic Association championship game. The Badgers played Duke for the title on Monday night.

Strange was happy to fill in. That was before Tiger Woods showed up at 3:30 and didn’t finish 11 holes of practice until 7 p.m. AP

speculation—some coaches, including former swing coach Hank Haney, said he had the yips. He was said to be practicing hard at home in Florida. When he showed up at Augusta National last week to practice, one report said he shot 74. Another said he was playing better than ever at home.

The fans who stuck around the Masters got to see for themselves, at least in practice. The real show starts on Thursday, and everyone is curious.

“We’re all waiting with bated breath what Tiger is bringing,” three-time champion Nick Faldo said. “He’s got to believe he’s got a bit more game than that. This is not the place. These are the toughest chipping areas, but off perfect lies, anywhere in the world.... It’s all nerve. That’s what the Masters is. It’s nerve. It’s the most nerve-racking golf course.”

Woods looked relatively calm on the golf course.

He reached the par-5 second hole with ease on his second shot. He smashed a drive down the short par-4 third and hit a flip wedge that trickled a few inches by the hole, making a tough shot look easy.

O’Meara hit a good tee shot on the par-3 fourth.

Woods hit it inside that.

“I felt good,” Woods said. “It was nice to get out here and play it. It’s a little bit faster than what we played last week. It’s great.”

Woods played twice last week, the last time on Friday just before ending speculation by saying he would play in the Masters.

Gary Player was among those—and a few thousand fans in the late afternoon would agree— that it was good to see him back inside the ropes.

“Golf internationally needs Tiger Woods. He does make a difference,” three-time Masters champion Player said. “People say—I hear this all the time—’Well, they won’t miss Tiger Woods.

There’s so many young guys that will take his place.’ There is nobody in the world today that can play like Tiger Woods at his best. Nobody yet. I’m not saying in time to come, a Rory, Jordan Spieth, Jason Day. “As of today, there’s nobody playing like Tiger at his best.” holes. Before that, he shot 82 and missed the cut in the Phoenix Open. In both events, he played 47 holes and hit chips that either didn’t reach the green from 5 yards away or went some 25 yards over the green.

That’s when he stepped away, saying his game was not acceptable and he would not return until it was.

After his opening birdie, Woods tossed two balls short of the green to work on his chipping. He hit 14 chips—two balls each from various hollows around the green to different pin positions. Most looked reasonable. Some looked good.

“Chipping was fine,” Woods said. “I wanted to test out some wedges out here. That’s why I was chipping a little bit more—a couple different bounce settings, because it’s a little bit different than Florida. We figured the right one out.”

The real test comes on Thursday, when the shots count. What he showed on Monday certainly looked acceptable, and it was a treat for the fans who normally would be headed home after a long day at Augusta. The first hole was packed when Woods and O’Meara teed off at 4:20 p.m., and more than 2,000 kept following him. Dozens of fans raced over from the second fairway to the fourth tee to get a good spot.

Remember, you’re not supposed to run at Augusta National.

“I hope he’s happy. I hope he’s fine,” US Open champion Martin Kaymer said. “I hope he will play well this week. But what would bother me a lot is all the speculation. You don’t have a choice. You will read about it somewhere. You will hear about it because you socialize with people. So mentally, it must be quite exhausting, and we know how important the mental part is in golf.”

“So it’s difficult, and some things I don’t find very fair,” he said. “You should just let him be.

Let him play golf, what he likes to do.”

The last image of Woods was the best player of his generation at his worst, especially with the chipping. That led to rampant The Associated Press

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UGUSTA, Georgia—Tiger Woods arrived later than usual on Monday for a Masters that is different from all the others he has played.

No one was sure what to expect from him.

Woods offered a quick glimpse that it could be just about anything. He hooked his tee shot so far left that it nearly went into the ninth fairway. And then he hit a shot to about 6 feet and rolled in the putt for birdie.

“I felt like I had to get my game into a spot where I felt I could compete to win a golf tournament and it’s finally there,” Woods said after playing 11 holes.

He played the front nine with Mark O’Meara, then the 10th and 18th holes before darkness.

More relevant than any of his shots—including his chipping, which looked fine—was the atmosphere.

The first official day of practice at Augusta National was filled with warmth and optimism for the first major of the year. Rory McIlroy, No. 1 in the world and going for a career Grand Slam, played 18 holes with British Amateur champion Bradley Neil.

Steve Stricker is playing for the first time all year.

Jason Day took four hours on the back nine alone, letting groups through so he could chip and putt, the key to winning a green jacket.

And then Woods arrived.

Fans ran to the side of the practice area when his cart pulled up, with one man holding a digital camera high above his head for a picture. Fittingly, Woods headed straight for the chipping area and went through two bags of balls before heading to the first tee with O’Meara.

Woods is playing for the first time since February 5. He was off nearly five months when he returned at the Masters in 2010 following the scandal in his personal life, but he was No. 1 in the world back then. His last competition was a victory in the Australian Masters.

Now he is No. 111. In his last tournament this year, he walked off the course at Torrey Pines after 11

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What Tiger Woods showed on Monday certainly looked acceptable, and it was a treat for the fans who normally would be headed home after a long day at Augusta.

TIGER WOODS ARRIVES AT AUGUSTA NATIONAL

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Wednesday, April 8, 2015 • Editor: Tet Andolong CAPITAL House retail

CAPITAL House unit

CAPITAL House elevator lobby

Jonathan Fabricante, Avida’s innovation and design group head, said the Ayala Land subsidiary is optimistic their latest project can attract small and medium enterprises (SMEs) and other impassioned business people.

“We see a good market for businesses seeking a sought-after address like BGC, as evidenced by the success of One Park Drive. Capital House positions movers into an area primed for success with world-class amenities,” Fabricante said.

The Capital House is a sequel to the successful One Park Drive office project, which is also in BGC. One Park Drive, at 20 stories high, is also geared for SMEs, and has been completely snapped up at a P2.5-billion value on its first year of selling alone.

Fabricante noted the develop-

ment of One Park Drive and Capital House was envisioned to give SMEs the opportunity to have a sweet spot in one of the fastest-growing commercial business districts in the country. He added that a majority of the office spaces in BGC were tailorfit to large-scale operations, such as business-process outsourcing (BPOs) and multinational conglomerates.

Units are at least 100 square meters (sq m), while modal offices measure around 250 sq m.

Capital House has 222 units with sizes ranging from 62 to 159 sq m., with special whole-floor units at 1,400 sq m. The project sells from P9.9 million to P25.6 million.

Office units are appropriate for about six to 20 employees. This size has already attracted a number of law firms, architectural studios and

creative agencies to locate at Capital House, which currently has about 12-percent takeup.

On the ground floor will be retail spaces for dining and shopping.

The building will also feature an open deck, a roof deck and numerous parking slots. Owners will have 344 slots, while 110 slots will be reserved for visitors.

Fabricante said Capital House has been designed for greater flexibility and convenience of start-up and expanding businesses. Furthermore, multipurpose and conference rooms can be leased so owners can expand their office operations without adding to their investment.

Instead of a centralized air-conditioning system, Fabricante said Avida has given businesses individualized setups for office units to ensure greater economy and more savings for the tenants.

Avida is also offering unit owners leasing services to help them find tenants for their spaces.

“Right now, our buyers are a mix of investors and end-users. As the Philippines becomes a booming real-estate market, more and more investors are inclined to buy a mix of residential and office developments.

We’ve also noted an increasing rise among foreign buyers for our offices,” said Herbert Herrero, Avida project development manager, Metro Manila and Luzon Area.

“Capital House complements the Avida portfolio. It enables the company to enhance the living ex-

perience of our developments. It provides us with the opportunity to offer our buyers and communities the complete live, work and play lifestyle,” Herrero added.

The property is in BGC’s “Active North” district, along 34th Street corner 9th Avenue, near such active lifestyle attractions as the Turf BGC all-weather football field and Flying Trapeze Philippines. Soon to rise in the area are the BGC Sports Complex and Kidzania, a family “edutainment” center.

Completion of the project will be in December 2017, while turnover will happen by the second quarter 2018.

Avida boasts of five residential condominiums near their BGC office projects, four of which are within walking distance of Capital House.

This large footprint across the city embodies Avida’s live-work-play balance for developments. All the elements for this lifestyle are carried in its growing range of products.

Commemorating 25 years this year, Avida has consistently been top ranked among developers in the entry-level property segment.

To date, Avida has built 60,000 homes across 73 projects in 29 strategic locations nationwide, making it the Ayala Land subsidiary with the most number of projects and broadest geographic presence in the country. This includes South Park District, its first large-scale, master-planned mixed-use estate in Muntinlupa.

THE ‘ALL SUITES’ CONDO LIFESTYLE IN UPTOWN BONIFACIO

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PTOWN Bonifacio, the 15.4-hectare integrated urban township in Fort Bonifacio, advances the ante of luxury living by introducing a unique “all suites” residential condominium designed for the lifestyle of the country’s elite with Uptown Ritz Residence.

Megaworld, the country’s leading real-estate developer, has taken careful steps in conceptualizing a well-designed layout that sets the benchmark for an ideal first-class lifestyle in Uptown Bonifacio.

In Uptown Ritz Residence, all units come with a five-star suite ambiance with large and proud spaces offering two- to four-bedroom (ranging from 78 to 167 square meters). Future residents will also reap the benefits of low-density and true exclusivity

because of its six units per floor.

This all-glass and aluminum tower will be at par with some of the world’s most chic residential towers. The project will have a bilevel podium amenity deck that offers a fitness center overlooking a swimming pool and spa complex, children’s playground, bilevel nursery and function rooms fitting for the most glamorous social gatherings and elite corporate events.

“We set the bar higher in luxury living.

What we are offering at Uptown Ritz are spacious units that overlook the cosmopolitan views of the Fort Bonifacio and Makati central business district [CBD]” said Noli D. Hernandez, senior vice president for sales and marketing, Megaworld.

Uptown Ritz Residence will stand in the heart of the Fort’s newest cor-

porate playground, Uptown Bonifacio, where the powerhouses of Asia Pacific’s business and commerce are relocating.

Slated to spearhead the growth and development of the up-and-coming CBD, Uptown Bonifacio will offer Megaworld’s signature township components: live, work, play and learn.

The township will offer top-grade office sites and a cosmopolitan commercial center at the doorstep of its luxury residential condominiums. Situated next to the institutional zone, the families of business leaders will be perfectly placed beside the country’s most reputable international secondary schools: International School Manila, British School Manila and Manila Japanese School. Within the confines of the global city, Uptown Bonifacio will also be just

steps away from world-class health care at St. Luke’s Medical Center and several of Manila’s finest lifestyle attractions, such as Forbes Town Center and the Manila Polo Club.

Uptown Ritz Residence is also easily accessible through major thoroughfares: Kalayaan Avenue and Sen. Gil Puyat Avenue toward Makati, Edsa to Quezon City and C-5 toward Pasig and the South Luzon Expressway.

Uptown Bonifacio is one of Megaworld’s 15 townships in its portfolio. The company has allocated P65 billion to develop the township within 10 to 20 years.

It will be comprised of several corporate and residential towers.

As an integrated urban township, Uptown Bonifacio made its first salvo when the biggest superclub in the Philippines,

The Palace, partially opened its doors in November 2014 with The Valkyrie Nightclub (one of the six sections of the superclub). Once completed, The Palace will be able to accommodate 10,000 people with over 40,000 sq m of party space.

This year Megaworld will also open Uptown Place mall, a five-level lifestyle mall in Uptown Bonifacio that will house several shops of renowned international brands, world-class restaurants and stateof-the-art cinemas, among others.

Also soon to rise are modern office towers, including the Alliance Global Tower, which will become the future headquarters of Alliance Global Group Inc., the holdings company of tycoon Andrew L. Tan and parent company of Megaworld. www.megaworldcorp.com

PROPERTY

BANGKO Sentral ng Pilipinas Governor Amando M. Tetangco Jr. keynotes the 2015 convention of Chamber of Thrift Banks, themed “Thrift Banks: Meeting the Challenges of a Bouyant Economy,” on Tuesday at a hotel in Makati City attended by representatives of different banks. (From left) Citystate Savings Bank CEO Andres Narvasa and President Benjamin Ramos participate in the convention. ALYSA SALEN

Capital House: A power address for SMEs B R R R

On Tuesday the Philippine Statistics Authority (PSA) said inflation averaged 2.4 percent in the first quarter and in March 2015. This was still within the Development Budget Coordination Committee’s inflation target of 2 percent to 4 percent for 2015.

Economic Planning Secretary and National Economic and Development Authority (Neda) Director General Arsenio M. Balisacan said this trend will likely continue due to low pump prices.

“Our overall inflation outlook remains well anchored as policies continue to be supportive of a stable inflation rate.

While the current episode of mild El Niño and power woes still pose risks to inflation, the continuing efforts to ensure that appropriate policy actions are implemented are expected to temper inflationary pressures over the near to medium term,” Balisacan said.

PHL CONGLOMERATES Citystate to increase MSME loan portfolio to 25 percent KEEN ON DEVELOPING SECONDARY AIRPORTS

BusinessMirror

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HE national government is optimistic that inflation will be kept at bay despite the El Niño phenomenon and thin power supply, with appropriate policies and remedial actions ready to be implemented to make sure the hike in prices will not go beyond targets.

C  A

CAPITAL HOUSE: A POWER ADDRESS FOR SMEs

OR the driven who want a good start in their business endeavors and are in search of a power address, Avida Land is offering the P4-billion, 26-story Capital House in Bonifacio Global City (BGC), which is specifically designed for professional firms, boutique agencies and entrepreneurs.

B C U. O

B L S. M

SPORTS

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

RELATIVELY LOW2.4%INFLATION IN Q1GIVES B.S.P. REASONTO HOLD INTEREST RATES STEADY

INSIDE

EAR Jesus, Your disciples have already reached the certainty that You are the promised Messiah and not just one of the prophets (Mark 8:27-30); though for them, the concept of “Messiah” is equated with a conquering leader. For three times, You tried to correct that wrong notion and to prepare them for the shocking experience of a violent end in Jerusalem (Mark 8:31; Mark 30-31 and especially Mark 10:32-34). Meanwhile, the time has come for You to take the final steps in the fulfillment of the Father’s plan, which has already been outlined in the writings of the prophets. Amen.

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IVE parties have so far signified their interest in bidding for the P108.2-billion contract to develop several secondary airports in the Philippines, a senior government official said on Tuesday.

Transportation Undersecretary for Planning Rene K. Limcaoco listed the companies as San Miguel Corp., Aboitiz Equity Ventures Inc., Philippine Skylanders Inc., the partnership between Metro Pacific Investments Corp. and JG Summit Holdings Inc., and the joint venture between Megawide Construction Corp. and GMR Infrastructures Ltd. The list is a mix of new and old players, with the last group being the current concessionaire of the P17.5-billion Mactan-Cebu International Airport deal in 2014. Aboitiz Equity Ventures also participated in the auction for the said deal, but only emerged as the third best. JG Summit, meanwhile, is the parent company of budget carrier Cebu Pacific.

Philippine Skylanders, according to its web site, is a pioneer in the air cargo-warehousing industry based in Pasay City.

San Miguel, on the other hand, used to control flag carrier Philippine Airlines. It also submitted a $10-billion deal that essentially calls for the construction of a new international gateway in Metro Manila.

PESO EXCHANGE RATES n US 44.3990

S “A,” A

B G F

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ITYSTATE Savings Bank Inc. targets to grow its micro, small and medium enterprise (MSME) loan portfolio, from 10 percent of total loans at present to 25 percent this year.

Newly appointed Citystate President Benjamin V. Ramos said the MSMEs sector is the niche market for thrift lenders like Citystate.

“We’re focusing on that particular segment. We cannot compete with the big universal and commercial banks so we have to provide them [MSMEs] with more personal-

ized services that the big banks cannot offer.

Growing the MSMEs is our main thrust for this year,” he said at the sidelines of the national convention organized by the Chamber of Thrift Banks.

“We’re concentrating on consumer lending, such as jewelry loans, car financing and market vendor loans,” he quickly added.

Citystate CEO and Vice Chairman Andres Narvasa Jr. said bank funds set aside for MSMEs is rather small, comprising only 10 percent to 15 percent of total, while the remaining 85 percent to 90 percent are corporate loans and housing.

“We target to grow our MSME loan port-

folio to 20 percent, or 25 percent from 10 percent to 15 percent. The loan amount ranges from P500,000 to P3 million per borrower,” according to Narvasa.

Ramos said more than tapping the MSME market, the bank will also leverage its relations with sister companies within the ALC Group of Companies.

“We had the bank reorganized. All preparations are in place to fully maximize the synergy within the ALC group, which has a strong client base. We have realty, car dealership, securities and insurance.

The insurance company is a big provider C  A

Interest rates should rise slightly but very manageably–BPI

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HE rate at which the Bangko Sentral ng Pilipinas (BSP) borrows from or lends to banks will likely rise by 25 to 50 basis points around the middle of the year, and more or less align with an expected US Federal Reserve (the Fed) increase in rates.

But Bank of the Philippine Islands Vice President and lead economist Emilio Neri said that even if US regulators were to hike its interest-rate structure, any BSP

adjustment was not likely a one-for-one response. “We can afford [an interest-rate hike] because there are lots of investments coming into the Philippines,” he told the BM.

He said most analysts and observers expect the adjustments will happen in September, although he personally expects the same around June.

But, most important, Neri said that even if domestic rates adjust upward, “the

increase should still be manageable and only very modest.”

He also said the BSP will allow the local currency the peso to weaken a bit because other currencies weaken, as US authorities scale up interest rates to moderate domestic expansion only beginning to take hold in the world’s largest economy.

But with the peso depreciating slightly, the remittances should improve. Neri C  A

n JAPAN 0.3717 n UK 66.1190 n HK 5.7272 n CHINA 7.1669 n SINGAPORE 32.7861 n AUSTRALIA 34.0326 n EU 48.5903 n SAUDI ARABIA 11.8366 Source: BSP (7 April 2015)

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News

BusinessMirror

Wednesday, April 8, 2015

Airports. . .

Continued from A1

The five aviation hubs are bundled into two. The first package consists of the Bacolod-Silay Airport (P20.26 billion) and Iloilo Airport (P30.40 billion), while the second bundle is composed of the New Bohol or Panglao Airport (P2.34 billion), Laguindingan Airport (P14.62 billion) and Davao Airport (P40.57 billion).

“The companies can bid on both bundled airports, but the policy is that you can only win one regional airport bundled,” Limcaoco said.

The Bacolod Airport, also known as BacolodSilay Airport, commenced operations in 2008 and is one of the recently completed airports in the Philippines with modern facilities.

The airport is in Silay City, Negros Occidental, and generally caters to traffic for Negros Island—including Bacolod City— which is one of the most populous cities in the Western Visayas region. Tourism is one of the main industries in Negros Occidental and is fast growing, with domestic tourists reaching 1.33 million in 2013.

The Iloilo Airport, on the other hand, is in Cabatuan, province of Iloilo, and is among the top 5 airports in the Philippines in terms of traffic data.

It started its commercial operations in 2007, providing both domestic and international connectivity with seven domestic destinations and two international destinations. The airport served roughly 1.87 million passengers in 2013.

Seen to start its commercial operations by 2017, the P3.36-billion New Bohol Airport in Panglao is designed to accommodate 1 million passengers annually.

The contract to construct the new aviation hub in Bohol was awarded to Japanese joint venture of Chiyoda Corp. and Mitsubishi Corp. last month.

Found on the northern tip of Misamis Oriental, the Laguindingan Airport has a

design capacity of accommodating 1.6 million passengers annually. It started its operations in 2013. It replaced the Lumbia Airport in Cagayan de Oro, which was among the five busiest airports in the Philippines in terms of passenger traffic.

Also known as Francisco Bangoy International Airport, Davao Airport is the third-busiest airport in the Philippines after the Ninoy Aquino International Airport (Naia) and the Mactan-Cebu International Airport.

Located in Catitipan, Davao City, the airport has been operational for more than 15 years, currently serving both domestic and international operations.

The Davao region is one of the top tourism destinations in the country, with passenger traffic settling at 2.79 million in 2013.

All in all, these deals have an indicative cost of P108.19 billion and are set to undergo a dual-stage public auction. The prequalification conference was scheduled on April 7, while the deadline for the submission of prequalification documents is on May 18.

The deals were first introduced to the public in December last year, after the department published an invitation to bid for the aviation contracts. Discussions as to how these projects will be bundled started as early as 2013.

The government decided to bundle the projects into two in order to raise the palatability of the deals to the private sector.

The P5.8-billion Puerto Princesa Airport was initially included in the roster. It was excluded as the said aviation hub would soon be infused with a “comprehensive tourism airport-centric strategy for Palawan airports.”

Overall, the private-sector partners will be tasked to improve the services at the respective key regional airports. This includes concessioning the operations and maintenance to the proponents, including required enhancement of airside and landside facilities at the respective airports.

news@businessmirror.com.ph

Govt ready to keep inflation at bay. . .

Balisacan added that other factors that support stable commodity prices include strong remittances and rising business-process outsourcing earnings.

The Neda director general also said the country’s foreign direct investment inflows, ample international reserves and manageable external debt level are expected to keep domestic prices low.

The Bangko Sentral ng Pilipinas (BSP) said it is in no hurry to tinker with its monetary-policy toolkit, as the current settings remain appropriate following the slight deceleration in the growth of consumer prices in March this year.

In his statement following the release of the March inflation data, BSP Governor Amando M. Tetangco Jr. said the BSP will likely stay pat with its unchanged monetary settings—a view supported by several economist this year.

March’s inflation is slower than the 2.5-percent inflation rate seen

in the previous month and the 3.9 percent seen in March 2014.

Although the BSP clearly has more headroom to rest on its laurels and keep monetary policy unchanged, Tetangco said they will still remain watchful of possible movements in prices, particularly due to developments overseas.

“The BSP remains watchful, particularly of movements in commodity prices and any shifts in market sentiment due to geopolitical developments,” Tetangco said.

“At the moment, the view is that the stance of monetary policy remains appropriate, but we are ready to make adjustments as and if warranted,” he added.

The central bank has been maintaining its policy stance for four consecutive times since November last year.

The BSP’s next monetary policy meeting will be on May 14 this year.

Market consensus of analysts and economists show that the BSP

will likely stay with its unchanged policy course until at least the first half of the year.

Balisacan said in March, low inflation was supported by cheaper rice. This cushioned the increase in vegetable and fish prices caused by the onset of the Lenten season.

The annual growth of the country’s food index alone improved to 4.4 percent in March 2015. It was registered at 4.9 percent last month and 6 percent in March 2014.

“All the food groups had lower annual growths except for the indices of fish, vegetables and food products not elsewhere classified.

While the index for fish retained its last month’s rate, the indices of vegetables and food products not elsewhere classified had higher annual gains,” the PSA said.

Balisacan added that local bread producers cut down the prices of bread as transportation and production costs declined due to cheaper fuel.

However, inf l at ion a mong non-food items rose slightly to 0.9 percent in March 2015, from 0.6 percent in February, due to softer declines in the price indices of electricity, gas and other fuels price and operation of personal transport equipment.

Core inflation, which excludes selected volatile food and energy prices, inched up to 2.7 percent in March from 2.5 percent in February.

However, this was still slower than the 2.8 percent registered in the same period a year ago. It averaged at 2.5 percent in January to March 2015. Inflation in the National Capital Region (NCR), likewise, settled to 1.9 percent in March. It was registered at 2.2 percent last month and 2.9 percent during the same period a year ago.

Inflation in Areas Outside NCR was pegged at 2.6 percent in March.

It was the same rate recorded last month. In March 2014, the rate was 4.2 percent.

Interest rates should rise slightly but very manageably–BPI. . . forecasts the exchange rate at 46.50 to 46.80 by the end of 2015. It stood eight centavos weaker at the close on Tuesday at the Philippine Dealing System to 44.484 per dollar.

The executive, likewise, expects remittances to slow by maybe 3 percent toward the end of the year as euro-denominated remittances continue to thin.

“We must slowly depend less on the deployment of Filipinos overseas. Instead, we must generate domestic employment by helping the micro, small and medium enterprise [space],” he said.

Standard Chartered Bank economist for Asean Jeff Ng said inflation should remain benign the rest of the year. “We expect inflation to

have eased to 2.4 percent year-onyear from 2.5 percent in February, representing a 0.1-percent monthon-month fall on subdued utilities inflation due to the fall in domestic energy prices,” Ng said.

Inflation likely remained anchored owing to steady core inflation as most components of core inflation, including health, educa-

Continued from A1

Continued from A1

tion and recreation were stable, he quickly added.

Food inflation likely eased slightly as well, owing to a favorable base effect. Inflation will remain benign at around 2.2 percent this year from 4.2 percent in 2014, although it may rebound in the fourth quarter owing to an unfavorable base effect and if oil prices recover. Genivi Factao

The Nation BusinessMirror

news@businessmirror.com.ph

Editor: Dionisio L. Pelayo • Wednesday, April 8, 2015 A3

DOE chief: Luzon power supply better than expected

PSA: Vehicular accidents kill more Pinoys yearly

By Cai U. Ordinario

B

EWARE! The next car or jeep you take can kill you.

Vehicular accidents are the biggest manmade killers in the Philippines between 2003 and 2013, according to data released by the Philippine Statistics Authority (PSA).

Some 532 vehicular accidents nationwide caused the death of 1,240 Filipinos during the 10-year period. That means annually, 53 vehicle accidents kill an average of 124 people a year.

With such high stakes in vehicular accidents, commonly perceived “killers” such as structural fires and sea mishaps pale in comparison. Data showed there were 662 Filipinos who died in structural fires and 635 who died in sea mishaps between 2003 and 2013.

The number of deaths caused by vehicular accidents was 21 percent of the total human-induced deaths pegged at 5,738 during the 10-year period.

The PSA data also showed that some 583 Filipinos were killed in firecracker incidents; 473 from complex emergencies; 347 in armed conflict; and 336 in bombings or grenade explosions.

Incidents that caused the death of only one individual between 2003 and 2013 were cave-ins; chemical or oil spills; gas explosions, such as LPG explosions; landline explosion; and mining incident. There was also one missing fisherman who died during the period.

In 2012 PSA data showed there were 7.46 million motor vehicles nationwide. The majority, or 6.42 million of these vehicles were privately owned and only 969,784 vehicles were for hire.

More than half or 3.44 million of the private vehicles were accounted for by motorcycles and tricycles in 2012. Other vehicle types that posted the highest numbers were utility vehicles at 1.82 million and cars, 808,968.

The 2014 Compendium of Philippine Environment Statistics (CPES) tables were derived mainly from data provided by the Natural Disaster Risk Reduction and Management Council.

The 2014 CPES is a compilation of statistics and other information focusing on the core indicators of the six components following the revised Framework for the Development of Environment Statistics of the United Nations.

T

By Lenie Lectura

HE power situation in Luzon is turning out to be better than expected, meaning, there is just enough supply and reserve to meet consumers’ power needs, mainly on account of cooler temperature during summer.

“This is the only summer I can remember that we have a typhoon in April. Also, it was raining. Basically, it is unusual. This is good because our hydropower plants are not drying up. They are supposed to dry up during this month. The temperature is also not that high so demand is not yet at its very peak,” Energy Secretary Carlos Jericho L. Petilla observed.

Philippine Independent Power Producers Association President (PIPPA) Luis Miguel Aboitiz had earlier said April 5 to 15 is a critical period in terms of power in Luzon because high demand will coincide with the one-month maintenance shutdown of the Malampaya gas field that will end on April 14.

The Malampaya facility fuels the 1,200-megawatt (MW) Ilijan, 1,000-MW Santa Rita and the 500-MW San Lorenzo natural gas plants, which provide around 40 percent of the Manila Electric Co.’s

(Meralco) supply requirements.

The Malampaya facility will be back online next week.

“Even if the shutdown period ends in a couple of days from now, we are not relaxing. There could be a change in the weather. Summer could be extended until June and July. Given the climate change, we have to be prepared for it,” Petilla said.

Based on the Department of Energy’s (DOE) weekly forecast, Petilla said there is “plenty of reserve now.”

“We are still going to be ok at this point. The hydropower plants are performing well. We have a good weather.

All these things are coming into play.

But, should we relax? Of course not,” the energy chief said.

Based on DOE’s latest data, Luzon will need an additional 782 MW to cover both supply deficit and required reserves.

Energy Undersecretary Zenaida

3-DAY EXTENDED FORECAST APRIL 8, 2015 | WEDNESDAY

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Monsada said the current-power supply can meet demand.

“We hope that there will be no unscheduled shutdown of power plants because that will have an impact on our reserves. We have enough supply and reserves provided that no power plants conk out all at the same time,” Monsada said when sought for comment.

Preparations to avert or at least minimize power outages have been under way since the third quarter last year.

These include granting President Aquino special powers to address the potential power supply shortage through an enactment of a joint resolution.

But Congress already went on a sixweek vacation without passing the proposed resolution.

“It’s unfortunate that the joint resolution was not finalized before we went on recess. The issue on who shall pay for the ILP [Interruptible Load Program] costs was not yet addressed,” House Energy Committee Chairman and Oriental Mindoro Rep. Reynaldo Umali said in a text message.

Under the program, big consumers will run their power-generator sets, instead of drawing from the grid, in exchange for compensation.

Aboitiz said it was up to the legislators to determine if consumers or the government—via Malampaya funds—should shoulder the costs.

“That’s the main concern. Senate

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EASTERLIES AFFECTING THE EASTERN SECTION OF LUZON AND VISAYAS (AS OF APRIL 7, 5:00 PM)

Easterlies are winds coming from the East passing over the Pacific Ocean. These are warm and moist in nature; causing hot weather and generating thunderstorms.

PUERTO PRINCESA CITY 24 – 33°C

wants the consumers to pay for it and I agree so that consumers would be aware how to save on electricity and, therefore, consume and pay less,” Aboitiz said separately when sought for comment.

The ILP is a government program, where private companies with their own power-generating facilities can be tapped to supply additional power to the national grid if there is a shortage.

As of latest count, Meralco has signed up more participants for the ILP, bringing to 667.29 MW of committed interruptible load (CIL) for the summer.

It has registered 80 customers from the private sector that will contribute 393.36 MW of capacity. It, likewise, signed up 1.7 MW of CIL from the government sector.

Contestable customer participants, or those with a monthly average peak demand of at least 1 MW, have signed up a total of 264.73 MW of interruptible load. Of which, 110.44 MW will come from different Retail Electricity Suppliers and 154.29 MW from MPower, the retail electricity supplier unit of Meralco.

With or without the joint resoluion, the DOE and industry players have done all they can to prepare for an anticipated power shortage in Luzon this summer.

“We are confident that we can get through summer without any problem, although the joint resolution could have helped, as well,” Petilla said.

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Partly cloudy to at times cloudy with rainshowers and/or thunderstorms

Watch PANAHON.TV everyday at 5:00 AM on PTV (Channel 4).

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A6 Wednesday, April 8, 2015

Opinion BusinessMirror

editorial

More thoughts about the BBL discussion

A

S the discussion, often heated and emotional, continues to focus on the merits of the Bangsamoro basic law (BBL), the granting of more autonomy to the Filipinos in Muslim Mindanao is not merely a Philippine issue.

When the Autonomous Region in Muslim Mindanao was created in 1989, the world was a much different place. To deny that as a fact is ignoring reality. The grievances and concerns of the Moro people have existed for literally centuries which also cannot be ignored.

However, the decisions that the Philippine government and the Filipino make in regard to the Bangsamoro territory have global implications, like it or not. Some opponents of the BBL have said the creation of the Bangsamoro state—whether part of the Philippines or not—may lend itself to the kinds of nefarious, if not terrorist, activities that are occurring in the Middle East and elsewhere. While that may or may not be valid—who can say at this point— the BBL does have significance in the global arena.

There is no doubt that other nations, both Muslim and otherwise, are looking to see what the Philippines does in this situation. Malaysia has been involved for better or worse since the beginning may decades ago. Thailand has a Muslim separatist movement in the south of that country. The Muslim Rohingya and other Muslims of the Rakhaing State of Burma have previously fought their own independence.

The United States is most interested in the Philippine Muslim community, although it is always hard to figure out when the US operates in another nation’s interest or is simply looking out for its own.

The emergence of the Islamic State (IS) in the last year and the ongoing war in Iraq and Syria has seen jihadist Muslims from around the world joining the fight. This is not a new phenomenon since Osama bin Laden was part of the armed resistance against the Soviet Union in Afghanistan many decades ago.

But according to a new United Nations report, between mid-2014 and March 2015, more than 25,000 people from over 100 countries came to join the fight with the IS army in Iraq and other groups in Afghanistan. Afghan security forces estimated in March that about 6,500 foreign fighters were active in that country. Foreign fighters have come to wage war in the Middle East region from around the globe including the Philippines. This is not a matter to be taken lightly.

Ayman al Zawahiri, the leader al-Qaeda, is characterized as unpredictable.

Bruce Hoffman, counterterrorism expert who teaches at Georgetown University, said al Zawahiri is looking to remake the terrorist group into more of a global phenomenon by turning his attention to India, which has the second largest Muslim population in the world, as well as Burma, the Maldives, the Philippines and Malaysia. The loyalty of the Bangsamoro people and leaders to the Philippines is not the issue. However, steps must be taken to insure that terrorism is not exported from, or imported to, our nation.

Being a responsible employer Susie G. Bugante

All About Social Security Part 1

T

he employer is a very important part of the equation in providing social-security protection to workers in the private sector. For every peso that a worker contributes, the employer contributes P2 on his behalf, i.e, the employer saves more on behalf of his employee.

An employer may be a a sole proprietor or business owner, a partnership, or a corporation. In order to sustain his business for the long term, he must know his duties and responsibilities under the law. One of the laws that an employer must abide with is Republic Act (RA) 8282, or the Social Security Act of 1997 which amended RA 1161, or the Social Security Law implemented in 1957.

What are the legal obligations of an employer under the Social Security System (SSS)?

Under the SSS law, the employer is obliged to register with the SSS by accomplishing the Employer Registration Form (SS Form R-1) and to

report all his employees for coverage by accomplishing the Employment Report (SS Form R-1A). These forms must be submitted together, at the nearest SSS branch.

The effectivity of the employer’s compulsory coverage with the SSS starts on the first day he hires his first employee/s. The employer is given 30 days from the date of employment to report an employee for coverage.

He is required to deduct from his employees their monthly contributions; pay his share of contributions, including Employees’ Compensation and remit these contributions to the SSS within the prescribed schedule of payments. He is likewise required

to submit to the nearest SSS branch the monthly report of his employees’ contributions using the Contribution Collection List (Form R-3) in electronic format together with the validated Employer Contributions Payment Return (Form R-5), and the Special Bank Receipt (SBR) on or before the 10th day after the payment due date. The employer can opt to submit the Form R-3, online via the My.SSS facility at the SSS website (www.sss.gov.ph). He can also submit his report using the electronic data interchange technology offered as a free service by BancNet online to the depositors of its member-banks.

Aside from the monthly contributions, the employer is also obliged to deduct from his employees’ salaries, the monthly loan amortizations based on the scheduled payment deadlines for member loans and remit the same to the nearest SSS branch with tellering facility or through accredited banks and payment centers using the Monthly Loan Payment Return (Form ML-1) on the scheduled payment deadlines. He should also send a monthly report of his employees’ loan payments by accomplishing the Loan Billing Statement (Form ML-2) in electronic format together with the validated ML-1 Form and Special Bank Receipt.

Just like the contribution payment

China’s war on golf courses Adam Minter

L

BLOOMBERG VIEW

AST week the Chinese government quietly went to war against golf—or, to be more specific, against golf courses.

Two-thirds of the country’s approximately 600 fairways were allegedly built in violation of a 2004 national moratorium, and Beijing is no longer willing to look the other way. On Wednesday China’s Ministry of Land and Resources shut down 66 illegally built courses nationwide, including three in Beijing. More closures could happen anytime.

This isn’t China’s first golf crackdown. In 1949 Mao Zedong deemed the game a “bourgeois” excess and had all the country’s courses destroyed. (The Shanghai Zoo is located on a former fairway.) But today’s Chinese government has its own reasons for targeting the sport.

Golf crept back into China in the 1980s, together with free enterprise.

Of course, hardly any Chinese at the time knew how to swing a club. But, as in the West (and in confirmation of Mao’s assessment), Chinese businessmen, regardless of their handicaps, were eager to treat the sport as a networking opportunity. It was also a convenient chance for newly wealthy Chinese elites to indulge in some con-

spicuous consumption. (Course fees— currently over $150 per round, on average—have always been well beyond the means of ordinary Chinese.)

What sparked the current crackdown? In part, it seems to be an extension of President Xi Jinping’s ongoing campaign against extravagance on the part of public officials, who are said to be among the country’s most frequent golfers. Chinese media reported on Wednesday—the same day as the golf course closures—that an official at the Ministry of Commerce was under investigation because he “allegedly played golf.”

But Beijing also seems intent on using the golf crackdown as a way to reassert its control over the coun-

try’s real-estate market. In recent years, the insatiable search for fresh land to develop has started to conflict with the central government’s land use priorities. Although Beijing would like China to be agriculturally self-sufficient, real-estate developers are increasingly buying up large stretches of what remains of the country’s arable land. In 2013 the government announced that China had just enough arable land to keep the country above a self-declared food security red line. (And that’s before factoring in the effects of pollution: Last year the government reported that 2 percent of China’s arable land is now too polluted to support agriculture.)

This isn’t just a conflict between the government and developers—it’s also between the central government and local government officials. When developers have shown up in local government offices looking to buy acreage for golf courses, local officials have tended to treat it as an opportunity to fill public coffers, even if it involves skirting the law. (Golf goes unmentioned in any subsequent paper work.)

Although the central government has likely known about such transactions for years—and even offered its tacit approval in some instances in order to encourage economic growth—it now seems to want to put local officials

report, the loan payment report may be sent electronically through My.SSS facility.

Oftentimes employers don’t realize that it is their obligation to pay in advance the sickness and maternity benefits of their employees based on SSS approved sickness and maternity notifications. This is a rule that they should observe for the benefit of their employees who have immediate need for cash under these circumstances.

Only when they have paid the benefits in advance to their employees can they file for reimbursement of the sickness and maternity benefits from SSS. It makes good business sense for employers to be responsible and lawabiding. They gain peace of mind by being on the good side of the law and enjoy industrial harmony by keeping their employees happy.

To be continued For more information about the SSS and its programs, call our 24-hour call center at (632) 920-6446 to 55, Monday to Friday, or send an e-mail to member_relations@sss.gov.ph.

Susie G. Bugante is the vice president for public affairs and special events of the Social Security System. Send comments about this column to susiebugante.bmirror@gmail.com.

on a tighter leash when it comes to land use policy.

The crackdown against golf is likely also motivated by environmental concerns. Golf courses can have a negative impact on the local environment, both as a result of their extensive water demands, and—in places with lax regulatory regimes, like China—the chemicals and pesticides used to keep them green. China faces water shortages and high levels of soil contamination even without golf.

In 2012 the city’s water consumption levels were 70 percent greater than its supply. To meet those needs, China is building a massive series of canals to divert water from the country’s wet south to its arid north, a project with uncertain environmental consequences. Meanwhile, close to 20 percent of China’s soil is polluted, and the government is actively trying to control pesticide use as a means to curb it.

Golf courses only make the task harder.

Shutting down 66 courses is a strong start, but it leaves behind hundreds more, as well as many dozens frozen in various stages of development. In all likelihood, some of those will remain (if only to nurse Chinese dreams that they can eventually earn gold medals in another Olympic sport). But for Chinese officials, in particular, it’s clear that the days of approving, much less enjoying, an afternoon on the course, are over.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Wednesday, April 8, 2015

A long history of predatory practices An introduction to suretyship against developing countries

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By Kinda Mohamadieh | Inter Press Service

ENEVA—The world’s attention turned to the practices of vulture funds after the US Supreme Court affirmed a lower court opinion in the NML Capital v Argentina case, which forbids the country from making payments on its restructured debt.

Argentina had defaulted in 2001 and went through two rounds of negotiations to restructure its debt, both in 2005 and 2010. In June 2014 the court ordered Argentina to pay the “vulture funds” that held out and did not accept the terms of the debt swaps.

The vulture funds had held out with the aim of achieving what amounts to a 1,600-percent return on their original investment. The funds concerned had purchased the Argentinian bonds in 2008 at $48 million and the court ruling ordered Argentina to pay them $832 million.

Nobel laureate Joseph Stiglitz noted that this was “the first time in history that a country was willing and able to pay its creditors, but was blocked by a judge from doing so.”

While this case brought the term vulture funds into the public sphere, the predatory practices of these entities did not start with Argentina.

According to a former United Nations independent expert on the effects of foreign debt and other related financial obligations of states on the full enjoyment of all human rights, the term vulture funds describes “private commercial entities that acquire, either by purchase, assignments or some other form of transaction, defaulted or distressed debts, and sometimes actual court judgments, with the aim of achieving higher returns.”

Basically, vulture funds are hedge funds whose modus operandi focuses on three main steps, including (1) purchasing distressed debt on the secondary market at deep discounts far less than its face value; (2) refusing to participate in restructuring agreements with the indebted state; and (3) pursuing full value of the debt often at face value plus interest, arrears and penalties, including through litigation, seizure of assets or penalties.

Many developing countries have been exposed to the predatory practices of vulture funds, especially African and Latin American countries.

The African Development Bank (ADB) has reported that at least 20 heavily indebted poor countries have been threatened with or have been subjected to legal actions by commercial creditors and vulture funds since 1999. These countries include Sierra Leone, Cote d’Ivoire, Burkina Faso, as well as Angola, Cameroon, Congo, Democratic Republic of the Congo, Ethiopia, Liberia, Madagascar, Mozambique, Niger, Sao Tome and Principe, Tanzania, and Uganda.

Peru was targeted by NML Capital in the year 2000. According to media

reports, the fund spent almost four years in the courts to win a ruling that forced Peru to settle for almost $56 million on distressed debt, which the fund had initially bought for $11.8 million.

The ADB has documented that up until the year 2007, 25 judgments in favor of vulture funds had yielded nearly $1 billion. Out of this amount, 72 percent of the judgments have been against African countries. The reported number of outstanding cases against debtor countries has doubled since 2004.

According to the World Bank and the International Monetary Fund (IMF), 54 court cases were instituted against 12 heavily indebted poor countries between 1998 and 2008. The IMF estimates that, in some cases, claims by vulture funds constitute as much as 12 percent to 13 percent of a country’s gross domestic product. The World Bank estimates that, nearly one-third of countries that are eligible for debt relief and other poverty-alleviation programs are the targets of nearly 26 vulture funds.

Concerned about the extent of the threat posed by such predatory practices and their systemic implications, several international authorities and multilateral institutions have voiced their concern about the matter.

The ADB has warned that by precluding debt relief and costing millions in legal expenses, these vulture funds undermine the development of the most vulnerable African countries.

In June 2014 the heads of state and government of the Group of 77 and China, in their declaration issued on the occasion of the “For a New World Order for Living Well” summit held in Santa Cruz de la Sierra, Bolivia, reiterated the importance of “not allowing vulture funds to paralyze the debtrestructuring efforts of developing countries” and stressed that “these funds should not supersede the state’s right to protect its people under international law.” The IMF had cautioned that upholding the decision against Argentina would harm future sovereign debt-restructuring attempts. In 2013 the IMF stated that “if upheld, [the Court of Appeals decision] would likely give hold-out creditors greater leverage and make the debt restructuring process more complicated.”

In 2007 G-8 finance ministers had expressed concern about actions of some litigating creditors against heavily indebted poor countries, and agreed to work together to identify measures to tackle this problem based on the work of the Paris Club.

Known as a “no loss contract,” engaging in the business of suretyship is also noted for its minimal marketing cost. Because bonds are universal, with applications in almost all aspects of business and commercial transactions, they are not that difficult to “sell.” Additionally, operating as a surety, in theory, should be profitable. With bonds generally amounting well within the surety’s retention, reinsurance is no longer necessary and, hence, the surety gets to retain all the premiums, as well.

Suretyship, like insurance, operates on the same basic principles of contribution, utmost good faith, subrogation, indemnity, proximate

cost and insurable interest. However, suretyship is not an insurance contract. It is only deemed as an insurance contract if it is made by a surety doing or transacting an insurance business. Nevertheless, this common factor does not necessarily mean that they are the same thing.

An insurance contract is a contract of indemnity, while a suretyship is a contract of both indemnity and guaranty. There is only one contract involved in a contract of insurance. In suretyship, however, there are three contracts: the principal contract between the obligee and the principal, the surety bond entered into by the principal and surety for the benefit of the obligee, and the indemnity agreement executed between the surety and the principal. The insurance contract is a principal contract, while a contract of suretyship is only an accessory contract to the principal contract entered by the principal and the obligee.

Nonpayment of premium invalidates an insurance contract but is not considered as a ground for denial of a claim in a suretyship. The consideration or premium in an insurance contract is the payment for the assumption of risk of loss by an insurance company while such con-

siderations collected in the case of a contract of suretyship is only a “service charge” for lending the surety’s name and credit to the principal. In an insurance contract, the payor of the premium and beneficiary is the insured. On the other hand, while the principal pays the premium in a contract of suretyship, it is the obligee who is the ultimate beneficiary of the bond.

The differences between an insurance contract and a contract of suretyship may be diverse and could be confusing. However, it is very important to remember three important things. First, in a suretyship, the liability of the surety and principal is solidary or joint and several, and the benefit of excussion does not apply.

Second, the surety’s failure to issue renewal certificates shall not absolve the principal from its duty to pay the renewal premium. Last, the premium paid by the principal is actually a service charge by the surety for lending its name and credit to the former.

That is why in the event of a loss, the surety will seek reimbursement from the principal.

and early 2000s.

After World War II there was a 20year bull market from 1946-1966. The Nifty Fifty were the must-own, onedecision names for both institutional money managers and retail investors.

Then came the bear market that ran from 1966-1982; indexes in real terms lost 75 percent of their value.

The S&P wasn’t yet cap-weighted, so we only know the impact abstractly.

But the Nifty-Fifty underperformed, even relative to their indexes.

Next, let’s jump to the end of a bull market to see what happens to a capweighted index. The results, as the dotcom era showed us, are none too pretty.

When markets go up 30 percent a year, casual investors tend to catch the fever. When this group of unsophisticated buyers all pile into the same well-known mega-cap companies, regardless of valuations, the net result isn’t a surprise—a rapidly inflating bubble.

This is characterized by a self-reinforcing cycle. When we have more buyers of these stocks, it increases the size of their market cap, which sends the S&P 500 higher. At the same time, money managers who are obligated to match the index, send ever-more capital to the shares of the biggest cap companies. This tends to lead naive individual investors to chase the flashy names even more.

The cycle will repeat—but not forever.

Once the inevitable market top occurs and the reversal begins, what began life as a virtuous cycle turns into a vicious one. The reversal of the money flows out of the biggest cap stocks can be brutal. The index buyers race to catch up (or down), exerting more downward pressure.

Companies that were tech darlings— Cisco, Intel, Microsoft,

Qualcomm—have yet to reach their late-1990s highs and have been a huge drag on the S&P 500 for much of the past 15 years.

Given these flaws, it’s no surprise that analysts have tried to find a better way to create index weighting.

Research Affiliates CEO Rob Arnott is the person credited with the best alternative to date: Weighing indexes based on a company’s fundamental footprint relative to the economy.

Arnott, along with colleagues Jason C. Hsu and Philip Moore, in an article titled Fundamental Indexation, found that creating an index using any one of a number of fundamental factors—such as earnings, revenue growth, dividend yield, price-to-book ratio—offered a variety of improvements, not the least of which was performance that exceeded indexes based on market-cap weighting. Arnott discussed this in our Masters in Business interview.

There has been lots of buzz about smart beta and its promise of better performance. Regardless of your thoughts on the topic, the flaws in market-cap weighting are there for all to see.

Dennis B. Funa

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INSURANCE FORUM

he Insurance Code defines suretyship as “a contract whereby one party—the surety—agrees to guarantee the performance or nonperformance of an obligation imposed upon another party—the principal or the obligor—in favor of a third party— the obligee.” In the same vein, the New Civil Code identifies a contract as suretyship “if a person binds himself solidarily with the principal debtor.”

There are three parties involved in a contract of suretyship. The principal, also known as the obligor, is the one who secures the bond and in whose behalf such bond is issued.

The obligee is the party requiring the principal’s performance of a particular act pursuant to the agreed conditions in a contract and is also the party in whose behalf the bond concerned is issued. The surety, the third party completing the tripartite relationship, is the party who guarantees the performance or nonperformance of an obligation imposed upon the principal. It is the one issuing and writing the bond, and is also known as the insurer.

The S&P 500’s dubious anniversary

By Barry Ritholtz Bloomberg

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HE Standard & Poor’s 500 Index is market-capitalization weighted, meaning that companies with higher stock-market valuations have a bigger influence on the index. There has been a cottage industry of criticism about this structure.

Recently, it has led to a new world of fundamental indexing and so-called smart beta, or seeking ways of using the components of the index to outperform the index itself.

The S&P 500 wasn’t always set up this way. This is a good time to think about the subject, because April 6 marks the anniversary of the index’s overhaul, giving us the structure we have now.

According to the S&P 500 2001 Directory (hat tip to Jason Zweig’s This Day in Financial History), the benchmark index for large cap US stocks looked very different than it did before this day in 1988.

Back then the index was made up of: n 400 industrial stocks n 40 utilities n 40 financials

n 20 transportations This seems like it was an effort to mimic Dow Jones, which had three big indexes—the Industrial Average, the Transportation Average and the Utilities Average. According to the Dow Jones Industrial Average Fact Sheet, the Industrial Average was designed “to represent large and well-known US companies, cover[ing] all industries with the exception of Transportation and Utilities.” Having been around since the late-19th century, it had become the benchmark for measuring the US stock market.

Here’s what the S&P 500 looks like today: The shift toward a broader, market-cap-weighted index was designed to avoid some of the fundamental flaws in the Industrial Average, which is price weighted, meaning companies with higher stock prices have greater influence. This leads to all manner of absurdities, as we have discussed before: “Companies with higher stock prices such as Visa and Goldman Sachs have a 9.7 percent and 6.7 percent weight, respectively, while lower-priced stocks, such as Cisco Systems and General

Electric, are merely 1.05 percent and 0.91 percent, respectively. Why Goldman Sachs, with an $84 billion capitalization matters more to the Dow than General Electric, with a $257 billion capitalization, is rather mystifying. A high-priced, smaller company carrying more weight than a lower-priced, bigger company makes no sense.”

Shifting from price-weighted indexes to market cap-weighted indexes was a huge improvement, but it wasn’t without its own problems.

We can see this in two examples: The booms and busts of the ‘Nifty Fifty’ in the 1960s and early 1970s and the tech giants in late 1990s

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Atty. Dennis B. Funa is the Insurance Commission’s deputy commissioner for legal services. Send comments to dennisfuna@yahoo.com.

2nd Front Page BusinessMirror

A8 Wednesday, April 8, 2015

Foreign-exchange reserves dip to $80.38 billion in March

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By Bianca Cuaresma

he country’s foreign-currency reserves dipped in March and snapped a threemonth-long series of increases, as the central bank’s gold holdings and foreign investments declined during the period.

The Bangko Sentral ng Pilipinas (BSP) reported on Tuesday the country’s gross international reserves (GIR) totaled only $80.38 billion.

This was $460 million lower than $80.84 billion worth of foreign-currency reserves posted the previous month but higher compared to the $79.65 billion GIR level at end-March last year.

“The decrease in reserves was due mainly to payments made by the

national government (NG) for its maturing foreign-exchange obligations and revaluation adjustments on the BSP’s gold holdings and foreign currency-denominated reserves,” the BSP said in a statement.

In particular, its gold holdings totaled $7.44 billion, a decline by $190 million from the previous month.

This decline was partially offset by the NG’s net foreign-currency deposits, and the BSP’s foreign-ex-

change operations and income from investments abroad.

China, by comparison, owns the world’s largest hoard of US dollar-denominated reserves, totaling $3.84 trillion as of end-December 2014.

Japan’s foreign-currency reserves pale in comparison, having totaled only $1.24 trillion as of end-March this year.

The BSP keeps a good eye on the GIR given its utility as a yardstick against which the country’s foreigncurrency obligations may be viewed against. Its gold holdings, the special drawing rights or the foreign currency of the International Monetary Fund ,and foreign investments make up the foreign-exchange hoard.

A given level of reserves mean an economy is in a better position to service its obligations even as the same acts as a buffer against imbalances brought about by externalsector developments.

Despite the decline, the BSP maintainedthattheGIRissufficientcoverfor 10.5months’worthofimportsofgoods and payments of services and income.

The reserves also equal 4.9 times the country’s short-term external debts based on original maturity and 3.9 times based on residual maturity.

Citystate to increase MSME loan portfolio to 25 percent. . . of insurance products for government employees like the Department of Education,” Ramos said.

Citystate targets a network of 30 branches by the middle of the year even as it aims to become a commer-

cial or perhaps a universal bank in the near future.

“We need to expand. The directive of the board is to expand, to make it big, to become a commercial, and eventually, a universal bank. This year we put

up the proper infrastructure to support our plans. In 2016 we will reassess and determine the increase in number of branches and make sure the plans are good and stable,” Narvasa said.

“We’re not actively looking for part-

Continued from A1

nerships but there are foreign and local investors knocking our door,” Narvasa said. The bank’s total resources aggregated P4.194 billion as of end-December 2014. Its loan portfolio totaled P1.963 billion the same year.

www.businessmirror.com.ph

briefs

➜PEZA NOW USING EU’s GSP+ SCHEME TO LURE INVESTORS TO PHL

The Philippines’s inclusion in the European Union’s preferential treatment scheme is now a key selling point of Philippine Economic Zone Authority (Peza) in luring investors abroad to set up manufacturing operations in the country, said Elmer San Pascual, head of Peza’s Promotions and Public Relations group.

“We are encouraging locators to avail themselves of the GSP+ [Generalized System of Preferences Plus]…we are now informing the locators and it’s a highlight in the sales speeches of Director General Lilia de Lima right now,” San Pascual said.

The EU GSP+, San Pascual added, is significant as exports growth of Peza-registered enterprises was only at 3 percent as of November 2014, driven by semiconductor firms.

San Pascual highlighted the case of Shimano Inc., a Japanese bicycle manufacturer, which recently allotted P 1.32 billion for a facility in Batangas to take advantage of EU’s GSP+ program.

Another firm, CS Garment Inc. , a German manufacturer and exporter of apparel in Cavite Economic Zone, was earlier lauded for its initiative to take advantage of the trade arrangement. It expects to employ another 100 workers as it gradually increases its exports. Catherine N. Pillas

➜B.I.R. MEMO ON NEW TAX-EXEMPT BONUS CEILING OUT

Low- to middle-income employees will get to take home the full amount of their “13th-month pay and bonuses” now that the Bureau of Internal Revenue (BIR) issued the implementing guidelines of the law raising the tax-exempt ceiling to P82,000. The BIR issued Revenue Regulations 03-2015 on March 9.

Since the law is now in effect “teachers, call-center agents, and other wage earners will enjoy bigger bonuses as early as June this year when some companies release half of 13th-month pay,” said Rep. Sharon S. Garin, vice chairman of the House Committee on Ways and Means and one of the key proponents of the measure. President Aquino, in February, signed Republic Act 10653 that revises Section 32 (B) of the National Internal Revenue Code of 1997 raising the tax cap for the 13th-month pay and other benefits from P30,000 to P82,000.

➜MINING SECTOR still SADDLED BY LAWS, ENVIRONMENTAL ISSUES

The Philippines holds the world’s second-largest gold reserves, and applications from foreign mining firms are piling up to tap that, plus a list of other metals that basically just sit under the ground now. Mining account for only a small fraction of the impoverished Southeast Asian country’s economy in 2012, as gold production fell back 50 percent to 15,762 tons that year.

Access to the $1.4-trillion Philippine mining sector, rich also in copper and nickel, has been mired since the 1980s in klutzy laws, environmental battles and land-rights issues. It may be on its way out of the pit this year.

The government wants more foreign investment in mining, in turn, adding to some 250,000 jobs offered by the industry. Officials in Manila also insist on getting a bigger share of revenues from the nation’s treasures before they go offshore. That’s why Executive Order 79, signed in 2012 and now pending congressional approval, may lead to an excise tax of 10 percent on gross sales of minerals, replacing two smaller taxes today. A fiscal-mining framework under study now may give Manila more royalties, as well. Once those regulations gel, investment in mining should pick up, says Benedict Uy, a Philippine trade representative stationed in Taipei, relieving a pipeline of overseas mining firms awaiting permits. “There are a lot of mineral deposits in the Philippines, but everybody’s on hold till we come up with a clear regulation on how to handle these things, and I think it’s coming out soon,” Uy says.

MILF’S OPTIMISM Moro Islamic Liberation Front (MILF) chief peace negotiator Mohagher Iqbal (right) with Miriam Coronel-Ferrer, chief negotiator for the government, gestures during a forum with foreign correspondents based in the Philippines in Mandaluyong City on Monday. Iqbal admitted that the proposed Bangsamoro basic law, or BBL, which was stalled in its passage due to the incident in southern Philippines that resulted in the killing of 44 elite police commandos, has a “50-50 chance” of being approved by Congress but remains optimistic. AP/Bullit Marquez

Record US capital spending is last thing the market wants

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f you’re an American CEO with a couple million dollars to blow, you may want to think twice before using it to expand plants or add equipment.

That’s the message from equity markets, where shares of companies with the highest capital expenditures (capex) in 2014 trailed those that spent more on dividends and buybacks, according to data compiled by Barclays Plc. While the underperformance didn’t keep corporate investment from hitting a record last year, the rate of growth in repurchases was higher.

The research is the latest to depict the US stock market as being addicted to cash inducements provided by companies to investors at the expense of businesses and employees. Barclays’s chief equity strategist, Jonathan Glionna, said the data should dispel concern that companies are forgoing proj-

ects that boost profits and stoke economic growth. Still, he said, it shows the market prefers other uses for money.

“There’s plenty of capex spending and companies that spend more have generally been underperforming,” Glionna said via phone on April 2.

It’s a concern if investors are more apt to reward spending with the least value to the economy, said Marshall Front, who manages $800 million at Front Barnett Associates Llc. in Chicago. Over longer periods they’re better off rewarding capital spending, which boosts revenue down the supply chain and gets more people working, he said.

“You create a self-fulfilling virtuous cycle of constructing buildings, hiring people and creating more things, whereas very little in the productivity cycle comes out of

buybacks,” Front said. “There’s a limit to how far you can go with this.”

Capital expenditures

S&P 500 companies hold $1.6 trillion in cash and marketable securities, data compiled by Bloomberg show. They’ve been increasing capex every year since 2009 and spent $730 billion in 2014, the highest ever, according to Barclays, with companies like Chevron Corp. and AT&T Inc. investing more than $20 billion in the last year.

At the same time, companies in the benchmark index spent a sum equal to 95 percent of their earnings on repurchases and dividends in 2014, data compiled by S&P and Bloomberg show. That includes $553 billion of buybacks in 2014 and a total $1 trillion in the past two years, the biggest two-year sum in history, according to data going back to 1998. Bloomberg News