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BusinessMirror

three-time rotary club of manila journalism awardee 2006, 2010, 2012

U.N. Media Award 2008

www.businessmirror.com.ph

A broader look at today’s business n

Tuesday, October 7, 2014 Vol. 9 No. 360

P25.00 nationwide | 7 sections 32 pages | 7 days a week

LOW GOV’T SPENDING, REFORM LAGS, SNAIL-LIKE RECONSTRUCTION TAGGED AS CAUSES

World Bank: PHL growth to slow

INSIDE

save space, think vertically

Life

beautiful things

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ear Lord, whenever we think of beautiful things, we should always count ourselves in them. The best use of beautiful things is to live life simply and love sincerely. The best expression of beautiful things is there is time for everything. The best time to use beautiful things is when we love endlessly. amen! rick warren and Louie M. Lacson Word&Life Publications • teacherlouie1965@yahoo.com

Strong debutS of ‘gone girl,’ ‘AnnAbelle’ booSt box office

BusinessMirror

Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

A room furnished by IKEA exhibits the ingenious use of vertical space through the shelves placed atop a built-in daybed.

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An ultimate in space-saving is the creation of more room via the loft, where a whole new level is added. Leather chair by IKEA.

save space, think vertically

By Samito Jalbuena | the.beast@zoho.com

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T may come as a surprise, but there are rare individuals who never seem to throw away their junk. Such people have been featured in television specials as “wonders” of the natural world. In their homes are piles of stuff reaching as high up the ceiling. For most, it sounds horrific, but there is a lesson we can learn from their carefully constructed habitats: Minimize the horizontal and maximize the vertical.

Organizing the home and saving space should go hand in hand. No matter how big or small your space, they all have a tendency to get cramped over time. It’s a law of nature to find room to stuff our acquisitions. Before you search for precious “acreage” in your abode, take a look upwards to see if you can employ some underutilized vertical space for your storage needs and, perhaps, fit in a few

design flourishes, too.

Stacking up things shouldn’t be an alien concept. Think of that bunk bed you crashed in at college, or explain why those high-rise buildings have been erected heads and shoulders all over the city. There is no more room, except up. The space over our heads is a resource that

should simply go to use. Making the most of overhead room is a stroke of spacesaving genius.

STACKABLE STORAGE MODuLAr storage solutions, such as stackable boxes made of plastic or wood, offer the convenience of prefabrication.

These bins and dispensers work well to conceal stuff, while their construction into stackable shapes—with quite a number having contraptions that allow them to latch atop one another—provide a boon to the space hungry. Other than that, one can find modular solutions that can be suspended from a ceiling, mounted to a wall, or hooked over a door.

The only problem is that searching for piled stuff often means “deconstructing” the whole “installation”. This is where good planning comes in the form of solutions that sit comfortably on their own level or are attached to a frame that makes access easy. Like skyscrapers, such solutions offer a hierarchy of “floors” for optimum search and find with a minimum of inconvenience.

SHELVES SheLveS are as natural as vertical space stations, and, these days, there’s a universe to choose from. With prefab units available in nearly any height you can imagine, the sky is often the limit to our choice of options. Shelves aren’t just for the wall; they can be placed in a closet or under stairs. The possibilities are endless, especially with the custom designs that decorators can think of.

Also effective for the meager office, shelves provide a boon when desk space is cluttered. By organizing work stuff into two sets—the things always needed and the things needed in priority—we can get a better grasp of work-related materials.

Things always needed, such as pens, staplers, calculators and the like, are best laid on the desk, while things needed in priority are cascaded from the shelves to the desk and back in the order of need.

LOFTS AND BUNKS We’ve talked about shelving and stackable bins, but these options aren’t the only way people are going vertical.

In the home, as well as the office, installing lofts and overhead bunks enables the creation of mezzanine “levels”, a boon to the search for space,

if ceiling height allows.

In terms of construction, think of a loft as an oversized platform that acts much like another floor added to a room. That said, it must be able to hold the weight of humans and, then, some. Meanwhile, bunks are just like lofts, except for their smaller size. The traditional bunk bed has undergone a transformation in recent years into the loft bed. Loft beds keep the top bed but lose the bottom bed in favor of a space that can be converted into an office workstation, wardrobe or storage area.

But, an ultimate in space-saving is the creation of more room via the aforementioned loft. Through this solution, a whole new level is added. Its inclusion and design, however, requires the prior approval of municipal and city authorities who are responsible for making sure the construction is in line with structural and safety standards.

One will have to seek the advice of an architect and civil engineer when setting about the task.

The search for space can lead to a number of vertically minded variables.

It’s time we shut our eyes to the merely horizontal and open our minds to the air space above.

Modern deco sTYLe

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he mood in the early 20th century was optimistic and hopeful—there was a sense of excitement and expectancy in the air, a time of anticipating a future full of promise. It was during this time that Art Deco started to emerge, and the aesthetic translated seamlessly into the realm of interior design.

Like the mood of society at the time, Art Deco’s aesthetic was sparkling and bright. It was associated with sleek, symmetrical shapes and bold bright colors like yellow, purple, ruby and turquoise. Furniture and other household items had a futuristic, modern look. Sweeping curved lines and angular shapes were a common sight. everything was modern and elegant.

The fascination with Art Deco never seems to go away, and Our home’s Modern Deco collection brings the style’s visual drama into contemporary lifestyles with accent pieces in decorative designs, playful colors and shapes.

There are Modern Deco accent chairs in bright colors and artsy designs, as well as side tables with an emphasis on details—each piece ready to make a statement in your home.

BoLd and bright orange Ansel accent chair.

sLEEK black Ethan side table

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The Modern Deco collection is available at the newly renovated Our Home branch at SM Megamall and in other Our Home branches.

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AdorABLE Asha accent chair will bring Art deco’s visual drama to your home.

ThIs purple Amanda accent chair will create a conversational piece in your home.

hong kong protests subside after tumultuous week BusinessMirror

World The

B3-1 | Tuesday, October 7, 2014 • Editor: Lyn Resurreccion

EID’L ADHA IN EGYPT

Egyptians celebrate after the early morning prayers marking Eid’l Adha, a three-day Muslim holiday that started on Saturday across much of the Middle East, in Cairo, Egypt. It commemorates the willingness of the Prophet Ibrahim—or Abraham as he is known in the Bible—to sacrifice his son in accordance with God’s will, though, in the end, God provides him a sheep to sacrifice instead. Parents often buy new clothes for their children for the holiday. AP/HUSSEIN TALLAL

Hong Kong protests subside after tumultuous week

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ONG KONG—Passionate student-led protests for democratic reforms in Hong Kong subsided on Monday but a few hundred demonstrators remained camped out, vowing to keep up the pressure on the government until officials show they are sincere in responding to their demands.

Schools reopened and civil servants returned to work on Monday morning after protesters cleared the area outside the city’s government headquarters, where they had gathered for more than a week.

About 25 protesters, mostly students, refused to budge from the site, and some say they plan to stay for as long as they can. Another couple hundred of protesters remained in the Mong Kok area, where some scuffles broke out over the weekend.

Parts of a main thoroughfare through the heart of the business district remained closed.

Student demonstrators say they have taken early steps to begin talks

with the government on their demands for wider political reforms, but actual negotiations have not started and many disagreements remain.

Tens of thousands of people, many of them students, have poured into the streets of the semi-autonomous city since September 28 to peacefully protest China’s restrictions on the first direct election for Hong Kong’s leader, promised by Beijing for 2017.

The protests are the strongest challenge to authorities in Beijing since the former British colony returned to Chinese rule in 1997.

China has promised that Hong Kong can have universal suffrage by 2017, but, it says, a committee of most-

PEOPLE walk to work on a main road in the occupied areas surrounding the government complex in Hong Kong on Monday. Hong Kong’s civil servants returned to work and schools were reopened as a massive pro-democracy protest that has occupied much of the city center for the week dwindled. AP/KIN CHEUNG

THAI KING HAS GALLBLADDER SURGERY

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dition has improved: his heart rate has decreased, his blood pressure in a normal range, his fever has decreased.”

Worries about the revered king’s health and succession have contributed to Thailand’s political instability of the last eight years.

The king spent almost four years in the hospital until leaving in August last year.

When he was admitted in 2009, doctors said he was suffering from a lung inflammation, though he also suffers from a variety of ailments usually associated with age.

Thais hold great affection for Bhumibol, who took the throne in 1946 and is revered as a moral authority who stepped in repeatedly over the years to unify the country despite his lack of a formal political role.

His fading from public life and the palace’s perceived role in the nation’s latest political battles that started in 2006 have tarnished the institution in recent years, undermining what had previously been near-universal respect

ANGKOK—Thailand’s 86-year-old king underwent surgery to have his gallbladder removed, and doctors said the procedure went well and the monarch’s overall condition had improved since he was hospitalized three days ago, a palace statement said on Monday.

King Bhumibol Adulyadej, the world’s longest reigning monarch, was admitted to a Bangkok hospital on Friday night with symptoms of fever and an increased heart rate, and blood tests showed signs of an infection.

In a statement on Monday, the palace said additional testing, including a computerized axial tomography scan, showed the king’s “gallbladder was inflamed and very swollen” and doctors performed a 75-minute laparoscopic operation on Sunday night.

“The operation went well. His condition is satisfactory,” the statement said, adding that he was being treated with intravenous antibiotics.

By Monday morning “his overall con-

ly pro-Beijing figures must screen candidates for the top job.

The protesters also are demanding the resignation of Hong Kong Chief Executive Leung Chun-ying, the city’s current leader, but he has refused to step down.

Some activists disagree with the partial withdrawal at government headquarters, and an alliance of students say they will keep up their protests until details of the talks are worked out. They say they will walk away from the talks as soon as the government uses force to clear away the remaining protesters.

Alex Chow, a student leader, said he was not worried about the crowd dwindling.

“Because people need rest, but they will come out again. It doesn’t mean the movement is diminishing. Many people still support it,” Chow said.

But Louis Chan, who still plans to stay at the government headquarters for “as long as he can,” is not sure achieving universal suffrage—the students’ original goal—is now likely.

“I think it was possible, but, now, I don’t think so because they [the Hong Kong government] don’t give any response and China is also very much against this,” he said.

Police said they had arrested 30 people since the start of the protests.

Protesters, meanwhile, complained the police were failing to protect them from attacks by mobs intent on driving them away. AP

IN this May 25, 2012, photo, Thai King Bhumibol Adulyadej (center, front) is pushed on a wheelchair as he arrives with Queen Sirikit (second from right) and Princess Sirindhorn (right) at a pavilion in Ayutthaya province, central Thailand. AP

was closely and actively involved in his country’s development efforts.

Open discussion of the monarchy is also constrained by strict lese majeste laws that make criticism of the monarchy punishable by up to 15 years in prison. AP

for the royal institution.

The king’s health has also raised concerns about what will happen after his passing. Crown Prince Vajiralongkorn does not command the same respect and affection as the king, who

Underwater search resumes for Malaysian airliner

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YDNEY—The hunt for Malaysia Airlines Flight MH370 resumed on Monday in a desolate stretch of the Indian Ocean, more than six months after the jet vanished.

The GO Phoenix, the first of three ships that will spend up to a year hunting for the wreckage far off Australia’s west coast, is expected to spend 12 days hunting for the jet before heading to shore to refuel.

Crews will use sonar, video cameras and jet fuel sensors to scour the seabed for the Boeing 777, which vanished for reasons unknown on March 8 during a flight from Kuala Lumpur to Beijing with 239 people onboard.

The search has been on hold for four months so crews could map the seabed in the search zone, about 1,800 kilometers west of Australia.

The 60,000-square-kilometer search site lies along what is known as the “seventh arc”—a stretch of ocean where investigators believe the aircraft ran out of fuel and crashed. Officials analyzed transmissions between the plane and a satellite to estimate

where it entered the water.

Two other ships being provided by Dutch contractor Fugro are expected to join the Malaysian-contracted GO Phoenix later this month.

The ships will be dragging sonar devices called towfish through the water about 100 meters above the seabed to hunt for the wreckage. The towfish are also equipped with sensors that can detect the presence of jet fuel, and are expected to be able to cope with the dizzying depths of the search zone, which is 6.5 kilometers deep in places.

If anything of interest is spotted on the sonar, crews will attach a video camera to the towfish to film the seabed.

Australian Transport Safety Bureau Chief Commissioner Martin Dolan, whose agency is leading the search, has expressed cautious optimism that the plane will eventually be found.

“We’re confident in the analysis and we’re confident that the aircraft is close to the seventh arc,” he said. AP

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brazilian taxi-booking app sashays into corporate market Editor: Armin A. Amio • corp@businessmirror.com.ph

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By Rizal Raoul Reyes

The best thing is, they don’t need to pay the fare.

Claiming to be the largest taxibooking application (app) in the world, ETI will introduce in Philippine cities in the latter part of the

year a business-to-business platform targeting corporate clients.

“We are bullish on our Easy Taxi Corporate [ETC] platform because it can provide efficient service to employees and employers, as well,

service would be done in batches.

Prior to its launch in the Philippines this year, the ETC service was first introduced in the United Arab Emirates.

“After this, we will be introducing it to Malaysia and Singapore,” he said.

Aside from the Philippines, Easy Taxi has also presence in Hong Kong, Taiwan, Vietnam, Indonesia, Singapore, Pakistan and Thailand. The app is available in 11 languages, including Tagalog.

“We are also giving a focus on all investing countries to determine if their markets are mature,” Vaz said.

He said the Philippines has one of the biggest potentials for ET as “many Filipinos have a stronger purchasing power brought by the economic boom enjoyed by the country

in recent years.”

To solidify their presence in the Philippine market, Vaz said their Philippine team, led by CEO Danilo Torres, is currently building up networking relationships with local taxi operators.

“Easy Taxi will go and dig deep into the taxi community to basically understand how the system works,” Vaz said.

He added that ET has to take different approaches, because the market conditions in the countries where it operates are different.

In Brazil ET is using socialmedia platforms, such as Facebook and Twitter, Vaz explained.

Meanwhile, marketing and promotions are done through the malls, printed media and public

relations. Asked about the presence of two other taxi-booking apps, Vaz said he believes the Philippine market “is not yet saturated.”

“I think competition is better, because it makes things cheaper and better. As taxi companies, we want to introduce innovations and services for the benefit of the consumer.” As far as Easy Taxi is concerned, Vaz said the goal is to make company the first option in transportation.

Founded in April 2012 in Rio de Janeiro, Brazil, Easy Taxi became the pioneer in online taxi service in Latin America.

Currently available in 27 countries and more than 120 cities, the app has “globally redefined taxi booking.”

Progress Software keen on financial verticals market in Asia AMD banks on mobile chip for better notebook biz share

By Dennis D. Estopace

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MERICAN multinational semiconductor company Advanced Micro Devices Inc. (AMD) is banking on its mobile microchip to reverse a lower market share in the notebook business.

“The Philippines is a very strong market for us. We have a very good share in the desktop [component business]. We want to do likewise or replicate it for the notebook, as well,” Ryan Sim, general manager for AMD Far East Ltd., told the BusinessMirror.

Citing data from IDC Corp., Sim said AMD’s desktop component grabbed 40 percent of the Philippine market in the second quarter of this year.

This means 4 in 10 desktop computers sold in the country from April to June runs on AMD’s microprocessor. Sim didn’t say, however, how many of these computers are. Sim said AMD’s notebook business market share is “lower.”

Hence, the company is banking on its “Performance Mobile” Accelerated Processing Unit (APU) launched recently in the Philippines to grow its local notebook market share.

Codenamed “Kaveri,” the fourth-generation AMD A-Series APU family is designed for ultra-thin and high-performance mobile PCs for both personal and professional use, according to Sim. He claims the processor offers better compute performance, enhanced graphic acceleration and optimal power use. Sim said Acer and Lenovo notebook computers are the first brands in the domestic market at present that carry AMD’s 2014 A-Series APU Processor lineup and incorporated with the AMD Radeon R-Series.

Meanwhile, AMD also recently demonstrated its Embedded R-Series 64-bit ARM-based multicore system-on-chip for network functions virtualization (NFV) solution.

“Our demonstration of a NFV solution on ARM will help advance the development of telecommunications and network-infrastructure products,” a statement quoted Dilip Ramachandran, senior director of marketing, communications infrastructure solutions, AMD Embedded Business Unit, as saying.

“The increasing growth in Linux-based applications, and the advanced power and performance of AMD 64-bit ARM processors will help enable our customers to rapidly develop products and introduce new services with improved productivity and reduced costs.” Ramachandran explained that the NFV is a network architecture concept based on virtualizing classes of network node functions into building blocks.

“These blocks can be interconnected to create communications services, but this process is complicated and requires long development cycles, must adhere to industry standards for quality and performance and relies on expertise of hardware and software specialists.”

AMD demonstrated the world’s first NFV solution powered by a 64-bit Advanced RISC (reduced instruction set computing) Machines, or ARM, based processor, including traffic between ARM and x86 architectures, at the ARM Tech Con in Santa Clara, California, on October 2.

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OP executives of business rules management (BRM) system software-maker Progress Software Corp. expressed keen interest on the financial verticals market in Asia.

“Southeast Asia’s next, that’s what we’re focusing on more,” Asia Pacific and Japan Managing Director Stephen McNulty said in a news conference in Singapore.

McNulty spoke before the Bedford, Massachusetts-based firm reported on September 25 that 6.22 percent, or $4.93 million, of its thirdquarter 2014 revenue from continuing operation of $79.274 million was contributed by Asia.

But while the firm reported income from continuing operations was $11.1 million compared to $7.2 million in the third quarter of last year, contribution of Asia slid by 4.7 percent from 5.171 million.

The company opened its Japan office last year and supported start-up firms in India in September.

McNulty also said in the news conference in mid-September that they are encouraging independent software vendors in Asia to participate in a contest for start-ups called ExtremeTech Challenge, which Progress Software is supporting through its own contest within that contest.

Participants in that contest will receive free development licenses, free product training and mentoring, Chief Technology Officer Mark Allen said in the same news conference.

The winner will receive $25,000 in market development funds, with the two runners-up receiving $5,000 in marketing development funds each, according to a company news brief.

Participants must, however, use the firm’s products, like Corticon BRM software.

processing could become automated. Corticon provides them with lower cost and greater agility as against doing this, making some decisions, manually.”

Allen, who developed Corticon while in the medical industry, said the product has a “patented algorithm that performs and scales very well with increasing amount of data you’re processing.”

“Rules interact with one another in complex ways. But the complexity increases as the rules increase.

So what we have is a BRM that allows businesses to solve much more complex problems.”

Citing a quiet period prior to the announcement of the firm’s thirdquarter 2014 performance, Allen and McNulty declined to provide details on Progress Software’s plans for Asia.

Nonethelles, McNulty said the firm has been in talks with financial verticals in the Philippines and that Progress Software’s Japan office “has been doing good.”

digital life

HITeCH SCare John Murdy, executive producer of Halloween Horror Nights at Universal Studios Hollywood, during a tour of the mazes that are being set up around the theme of the horror movie an American Werewolf in london in Universal City, California, on September 12. Story on page B4-3. anne cusack/Los angeLes times/mct

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golden double Sports BusinessMirror

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| Tuesday, OCTOber 7, 2014 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

U.S. WOMEN WIN WORLD BASKETBALL GOLD MEDAL

GOLDEN DOUBLE

Next up for the Americans is the 2016 Olympics in Rio. There’s no reason to think they won’t be a heavy favorite for a sixth straight gold there.

YORDENI CABALLEROS (center) bats while his friend Duani Rojas (right) and his coach Kiomai Aguiar watch during a game of street cricket in the neighborhood of San Miguel del Padrón in havana, Cuba. AP

By Doug Feinberg

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The Associated Press

STANBUL—After dominantly winning another world championship, the US women’s basketball team left no doubt of the gap between the Americans and the rest of the world.

And with so much young talent in the system, it might be a while before anyone can catch up.

Maya Moore scored 18 points and earned Most Valuable Player honors as the Americans beat Spain, 77-64, on Sunday to win a second straight world title.

With Moore, Brittney Griner, Tina Charles and a host of others still yet to reach their primes, it’s a scary thought.

“This was a great first taste,” Griner said. “It leaves me hungry for more. I’m going to pin this medal up on my wall. It’s the biggest thing I’ve ever won.”

With the exception of the Australia game, when Griner got in early foul trouble, the 6-foot-8 star was exceptional in making the all-tournament team. She had the first dunk in tournament history in the opener against China and dominated on both ends of the court.

“She has potential to be one of the best ever,” Coach Geno Auriemma said. “She is very coachable and picks things up very quickly.”

Next up for the Americans is the 2016 Olympics in Rio. There’s no reason to think they won’t be a heavy favorite for a sixth straight gold there.

That Olympics could be the last go-round for Sue Bird and a few others, but with the young core still intact, as well as players like Chiney Ogwumike, Breanna Stewart and Elena Delle Donne in the pipeline, it will be hard to see the US not continuing this run for a long time.

Bird became the most decorated player in world

CRICKETERS fIGhT fOR fOOThOLD IN BASEBALL-MAD CUBA

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AVANA—The ball bounced off the pavement and Yordeni Caballero swung, whacking it with a soft thud and hurling his bat to the side as if he’d hit a home run. As the seven-year-old raced down a streetturned-cricket pitch, his coach shouted instructions about a sport that’s barely known in Cuba.

The Caribbean is divided between baseball-playing countries with US ties and cricket-playing islands that once belonged to the British Empire.

Nowhere is more baseball-crazy than Cuba, but even here, a tiny but passionate group of men is trying to win people over to cricket, baseball’s slowerpaced, more courtly British relative.

Mostly descendants of sugar-cane workers who migrated from other islands in the early 20th century, Cuba’s cricket partisans subsist on homemade

and donated equipment from the embassies of cricket-playing countries.

They recruit players from the streets and teach them rules of the new sport, while exploiting baseball-honed skills such as batting and running bases.

The offspring of immigrants from the island of Martinique, Kiomai Aguiar said he played baseball and basketball as a child, then switched to cricket at 16, falling in love with its leisurely pace and courtly interactions between players. He now coaches Caballero and other youths playing pickup games in San Miguel del Padron on the outskirts of Havana “It’s a game that forces you to think, to organize, to do things deliberately. At the same time, there’s respect and unity among the players,” said Aguiar, a 35-yearold unemployed maintenance worker.

“There’s not a single cricket pitch in Cuba, so we play where they let us, on a soccer

field, a baseball field, a running track.”

Cuba has organized cricket in six of its 16 provinces, with 1,150 registered players throughout the country of 11 million, said Barbara Delarra, an official with Cuba’s National Sports Institute.

“Youngsters like it because it’s similar to baseball, with pitching, batting and fielding. It’s a new sport and appealing to youngsters frustrated with baseball,” she said.

Cricket is also part of the cultural identity of Caribbean migrant communities in Cuba, the descendants of some 250,000 workers from Jamaica, Dominica and other British colonies who moved to sugar towns in eastern Cuba where they attended Protestant churches, ate spicier food and played cricket.

“They kept a lot of their identity,” said Jorge Giovannetti, chairman of the Department of Sociology and

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In its October East Asia Economic (EAP) Update, the World Bank said the Philippine economy, as measured

by GDP, is now seen to expand by only 6.4 percent in 2014 and 6.7 percent in 2015.

In the April EAP, the World Bank forecast the country’s growth to reach 6.6 percent this year and 6.9 percent next year.

The World Bank said it also expects the country’s growth to reach 6.5 percent in 2016, which is below the government’s target of 7.5 percent to 8.5 percent.

“This lower growth was due to weak government consumption and the decline in public construction [i.e., infrastructure spending],” the World Bank added.

“In the near term, the Philippines is expected to maintain growth at 6.4 percent in 2014 and 6.7 percent in 2015. These projections hinge on the implementation

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Mark allen, chief technology officer of Progress Software Corp., gestures as he explains the benefits of Corticon, a decision-and rules-based management system software, in a news conference in Singapore on September 11. allen said the automation of a single decision-making task through Corticon is improved 10 times during the task’s initial development. Dennis D. estopace

Progress is raising the stakes for ISVs, challenging them to build their applications using our development tools like Corticon, Allen said.

Corticon, which competes head to head with IBM Corp.’s WebShere ILOG in the BRM market, simplifies and automates decision-making processes, Allen explained.

For example, a 35-year-old skydiver could be appraised automatically for an insurance-risk premium, thereby helping insurers cut steps and costs. “There are no coding rules.

It’s not programming. It’s like using a spreadsheet so we can take people with no programming experience and background, and in a matter of three days teach them to be as productive as somebody who is a programmer,” Allen said.

He cited as another example the processing of claims that could take to only seven from 21 manual steps with the use of his firm’s BRM software.

“Eighty-five percent of claims

By VG Cabuag

‘CHINA’S SLUMPING ECONOMY TO DRAG DOWN EAST ASIA’

Tuesday, October 7, 2014 B4-1

during their travels,” said Gustavo Vaz, ETI co-founder and global chief operating officer.

Vaz said ETC is their latest service, and will be introduced in the Philippines before the year ends.

Under the scheme, ETC will be the taxi provider for a company. Upon enabling of the application, a user books a cab using a mobile phone.

The app also allows users to track the whereabouts of the cab they booked.

“You don’t need to pay the fare because our taxi drivers will not charge you,” Vaz said.

Vaz ex plained the company charged with a monthly fee by ETI would pay for the fare.

According to Vaz, taxi fares will be recorded in the app, which will serve as the basis for payment to ETI. He said the launch of the ETC

MEGAWORLD BUILDING UP INVENTORY IN PASIG, QC

he Philippines’s weak gross domestic product (GDP) growth in the first quarter and the government’s slow spending have prompted the World Bank Group to trim its economic forecast for the country this year and in 2015.

See “PHL growth,” A2

Brazilian taxi-booking app sashays into corporate market T may teach employees how to do the samba later but for now—or at least by December—Brazilian firm Easy Taxi Inc. (ETI) would make booking a cab for company staff less difficult as its officials said.

By Cai U. Ordinario

Anthropology at the University of Puerto Rico and an expert on Caribbean migration to Cuba. “They kept some of their diet, they kept some of their religious heritage, and cricket is part of it, as well.”

Cricket is most deeply rooted in the eastern province of Guantánamo, home to many of Cuba’s immigrantfounded communities, where cricket is frequently taught to children in after-school athletics programs despite the lack of standard equipment.

“If we don’t have a bat, we make it from a stick. If there’s no ball, we make it from rags,” said Eliecer Brooks, the descendant of Jamaican immigrants who plays for Guatánamo’s cricket team. “We’ve wanted to maintain this tradition because it’s beautiful to remember one’s roots.” AP

championship history with Sunday’s gold. She has won three gold medals and a bronze in her career.

“It was a great win for us,” Bird said. “We had one goal the entire time this team’s been together and that’s win a gold medal. A lot of people see a lot of talent and think it’s going to be easy and it’s not. Whenever you can win a gold medal and it’s a tough journey, everyone’s happy. I’m definitely proud of this team.”

Lindsay Whalen added 12 points for the United States (6-0), which hasn’t lost in a gold-medal game in the world championship since 1983, when it was beaten by the Soviet Union, 84-82. Except for a hiccup in 2006, when the Americans lost to Russia in the semifinals, they have won every Olympic and world championship game since 1996. If not for that upset in Brazil, the US would have five straight world titles.

“I know when I hear 2006, it still makes me mad,” Bird said of her only bronze medal.

The Americans jumped out to a 13-point lead in the game’s first four-and-a-half minutes. Spain (5-1) could only get within seven the rest of the way.

Moore was the key in that early burst, scoring 11 points during the opening 18-5 run. Her threepointers barely moved the net as the Americans blitzed Spain, which was making its first appearance in the championship game.

“It’s always a focus, we want to punch first,” Moore said. “I put pressure on myself and the starting five, we put pressure on ourselves to get a good start, set the tone for the game.”

The Spaniards rallied within 24-17, but then Whalen took over. She had nine points during a 13-0 run by the Americans spanning the end of the first and start of the second quarter to make it a 20-point game. Whalen ended the first quarter with a spectacular drive that ended with a floater in the lane right before the buzzer.

“We knew that we had to come in and provide a spark and I had an aggressive mentality,” Whalen said.

The Americans led 48-29 at the half and by 25 points in the second half before Spain closed the game with a 14-2 run.

“It’s sweet to have a silver medal around your neck as we are one step closer to a gold,” said Sancho Lyttle, who led Spain with 16 points. “But it also hurts because we know we were almost there.”

sports be hard to see the US not continuing a golden »runITforwilla long time. AP

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he World Bank lowered its forecasts for growth in developing East Asia this year and next, as China’s expansion moderates and policy-makers brace for tighter global monetary conditions.

The region is forecast to grow 6.9 percent in 2014 and 2015, down from 7.1 percent projected in April, the Washington-based lender said in its East Asia and Pacific Economic Update released on Monday. China will expand 7.4 percent this year and 7.2 percent next year, compared with 7.6 percent and 7.5 percent previously forecast, the report showed.

Data released last month showed China’s industrialoutput expansion at its weakest since the global financial crisis, while moderating investment and retail-sales growth underscore the risks of a deepening economic slowdown, led by a slumping property market. Significant uncertainties remain that could affect the region’s growth, including downside risks in the euro area and Japan; a sharp tightening in global financial conditions; and international and regional geopolitical tensions, the World Bank said.

“The best way for countries in the region to deal with these risks is to address vulnerabilities caused by past financial and fiscal policies, and complement these measures with structural reforms to enhance export Continued on A8

PESO exchange rates n US 44.7570

Eastwood City, Megaworld’s first township project, joined the commemoration of the Feast Day of Saint Francis of Assisi and World Animal Day with the annual pet-blessing ceremony on Sunday, attracting hundreds of people who brought their pets for the blessing rites. JENZINE ALCANTARA

egaworld Corp. said it may accelerate the development of its Woodside City project in Pasig City, as many of its tenants in the nearby Eastwood City, the company’s first township project, clamor for an expansion of their respective operations.

Jericho Go, the company’s senior vice president, said the first of the two twin towers in the 12.3-hectare property is set for completion by 2016 or 2017, a year ahead of the original plan of between 2018 and 2019 opening.

“The good news is the tenants that we have here in Eastwood City are saying they need to grow further, and they are asking where we can grow.

[So] we offered Woodside City, and they said perfect,” Go said, adding that the current plan will add some 30,000 square meters to 40,000 sq m of new office space.

“So, hopefully, even though we are still two to three years down the road, we might be able to sign up a client already,” Go added.

Megaworld, controlled by billionaire Andrew Tan, is also expanding the 17-hectare Eastwood City by another 1.5 hectares.

Eastwood, in Libis, Quezon City, is just 3.2 kilometers away from Woodside City, where the former Ajinomoto factory on C-5 Road in Pasig City was located.

“Now they’re saying finish Eastwood, and then let’s go there. But, See “Megaworld,” A2

Daang Hari-Slex link done by Feb–Francia FRANCIA: “We’re really able to go full blast in February this year, because that’s when the right of way on the Slex side was cleared.”

By Lorenz S. Marasigan

T

he private concessionaire for the P2.01-billion Daang Hari-South Luzon Expressway (Slex) link aims to complete the thoroughfare by February next year, a company executive said.

“It is not yet complete, but we’re making really good progress. So we expect that by February we could complete the project,” AC Infrastructure Holdings Inc. President John Eric T. Fran-

cia said, when asked for updates on the road venture.

He said his firm, the infrastructure arm of Ayala Corp., wan-ted to finish the construction of the expressway by December this year, “but with all the [bad] weather that we’re experiencing now, it’s hard to catch up.”

“We’re really able to go full blast in February this year, because that’s when the right of way on the Slex side was cleared. The agreement with our contractor was, once they start

constructing in full blast, they would deliver within a year— that’s really the standard schedule for that,” Francia added.

“December would have been a fighting target, but given the strong rains and floods that we were having, unfortunately, it’s too much of the stretch to expect that,” he stressed. Commercial operations, Francia said, would depend on how fast the Toll Regulatory Board approves the group’s proposal.

See “Daang Hari-Slex,” A8

n japan 0.4128 n UK 72.2602 n HK 5.7656 n CHINA 7.2774 n singapore 35.2029 n australia 39.2709 n EU 56.7026 n SAUDI arabia 11.9311 Source: BSP (3 October 2014)

A2

News BusinessMirror

Tuesday, October 7, 2014

Think tank: Petilla has doubts on ILP

Megaworld. . . continued from a1

even though they ’re saying [there is] growth in Eastwood City, the clients are very interested in Woodside. Those are two geographical locations: this is Quezon City, that’s Pasig,” he said.

Go said the company is sitting on a cash hoard and has enough funds to bankroll the projects. As of the first half of the year, Megaworld has cash and cash equivalents of P28.58 billion.

Woodside City is the company’s ninth township development and Megaworld is spending some P35 billion on its development for the next 10 years.

The company is still in the development stage of the plan for the township, but its initial projects will consist of three high-rise office buildings that will have total floor area of 150,000 sq m.

The first tower, to be designed by American architectural firm Skidmore, Owings and Merrill, will be launched by early next year.

Initially, the three towers will house some 16,000 people from the business-process outsourcing sector, Go said.

The three initial office towers in Woodside City, coined after a community in the US, where Apple Inc.’s founder Steve Jobs once lived, will all be Leadership in Energy and Environmental Designregistered, Go said.

He also said Megaworld plans planting 1,000 trees around the development as part of the effort to market the project as environment-friendly.

Megaworld has eight existing township projects in its portfolio, including the 17-hectare Eastwood City; the 50-hectare McKinley Hill and the 5-hectare Forbes Town Center in Fort Bonifacio in Taguig; the 25-hectare Newport City in Pasay; the 28.8-hectare Mactan Newtown in Lapu-Lapu City, Cebu; the 72-hectare Iloilo Business Park in Mandurriao, Iloilo City; the 15.4-hectare Uptown Bonifacio, and the 34.5-hectare McKinley West, both in Fort Bonifacio.

Continued from A8

However, there is a pressing concern. Cost.

“The fear among private players is that the government may end up with costly, extended contracts that not only burden taxpayers and/or end-users with needlessly high power bills but which, beyond the critical summer months, will serve as government-owned reserve capacity that can be sold to the spot market, contravening the intent of the Epira,” Global Source added.

Several lawmakers have publicly expressed reservations about the government’s preferred option, also citing cost considerations.

Global Source also noted that ILP may burden consumers in terms of paying for more in their electricity bills. “Overall, the main attraction of this packaged option is that government’s role is less heavy-handed, and the ILP kicks in only at particular points in time, thus keeping added costs to a minimum.

“While the energy secretary openly recognizes the value of these measures, he appears less confident that the ILP can produce the needed volume, thus preferring that the government contract additional capacity to guarantee adequate supply.”

Preventing abuse of power

For Global Source, the joint resolution granting the President special powers should not be unlimited. Also, there should be clear-cut rules in implementing the resolution.

“Our best case here is a well-studied, timebound resolution, clearly defining the parameters of the authority granted to the Executive, which leaves little room for perceptions of abuse of power to arise. Additionally, the resolution needs to be accompanied by clearer policy direction from the energy department and its regulatory arm that turn around perceptions of non-market-based price setting. This will help preserve private players’ confidence in the Epira, ensure that this episode is

Real-estate . . continued from a8

the country. It explained that a low interest rate environment could also lead to relaxed “credit standards and documentary requirements for household real-estate loans” and threaten the sector with defaults.

The bank further said there are findings that the demand for mid- and high-end condominiums “may be overstated” since only 10 percent of the country’s population belong to the middleand high-income brackets. This could lead to an oversupply in condominiums and falling real-estate prices.

TODAY’S WEATHER

OCTOBER 7, 2014 | TUESDAY

Intertropical Convergence Zone (ITCZ) is the resultof the Northern and Southern Hemisphere tradewind convergence; widespread cloudiness, occasional thunderstorms, precipitation and moderate to strong surface winds are associated weather conditions.

INTERTROPICAL CONVERGENCE ZONE AFFECTING MINDANAO. (AS OF OCTOBER 6, 5:00 PM)

METRO MANILA 24 – 33°C

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Cloudy skies with rainshowers and/or thunderstorms

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

METRO DAVAO 25 – 32°C

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PUERTO PRINCESA CITY 24 – 30°C

THURSDAY

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LEGAZPI CITY 23 – 29°C

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3-DAY EXTENDED FORECAST

and newly awarded public-private partnership projects [worth 15 percent of GDP] will provide an additional boost to demand,” the bank added.

Nonetheless, the World Bank said there are a number of external factors that could weaken economic growth this year until 2016.

The bank said these include adjustments in China’s property market and political tensions in the Middle East and Eastern Europe.

It added that the Philippines’s territorial disputes with China may also be a factor that could affect economic growth in the near term.

“On the domestic side, the main sources of risk are low government consumption, slow reconstruction spending, and domestic reform lags, in particular reforms to raise tax revenues needed to raise infrastructure, and social-services spending,” it added.

In terms of sustaining the country’s infrastructure investments, the World Bank believes the government must consider increasing tax revenues by broadening the tax base.

This measure can be coupled with efforts to make the tax system simpler, more efficient, and more equitable. There must also be some reductions in tax rates to “increase the political feasibility of such a package.”

“The government’s planned doubling of infrastructure spending to 5 percent of GDP, and significant increases in health and education spending, require new sources of revenues. This can be achieved through a package of tax policy and administrative reforms,” the bank said.

METRO CEBU

TUGUEGARAO CITY 23 – 29°C

SBMA/CLARK 23 – 31°C

OCT 8

WEDNESDAY

of the government’s planned spending for typhoon reconstruction and planned expenditure programs,” it added.

Further, higher inflation is also a factor that could bring down economic growth in the medium term.

The Washington-based lender said inflation will reach 5 percent, the high-end of the government’s 3-percent to 5-percent target, this year.

But it sees inflation remaining in the 4-percent range in the next two years. The increase in commodity prices is expected to average 4.5 percent next year and 4 percent in 2016.

“Food supply could remain tight throughout 2014 because of poor harvests due to weather-related disturbances, and could be exacerbated by droughts due to El Niño. In addition, because rice is a basic consumption necessity with inelastic demand, mistiming the importation of rice, which is controlled by the government, could result in sharp increases in rice prices,” the World Bank said.

It added that if inflation remains high, the central bank may be forced to undertake further monetary tightening.

However, the country’s infrastructure spending and trade performance are expected to recover in the medium term.

The bank added that private consumption, fueled by overseas Filipino worker remittances, is expected to account for more than 50 percent of the country’s overall economic growth.

“Higher government spending on infrastructure and social services, an acceleration of reconstruction, and progress with ongoing

METRO MANILA

LAOAG

BAGUIO CITY 16 – 21°C

PHL growth. . . continued from a1

seen as a one-off case, and make needed private investment in additional generating capacity take place,” Global Source said.

Some business groups have, likewise, expressed their concern.

“The Philippine Chamber of Commerce and Industry and the Makati Business Club are not supporting unlimited powers. They feel that the government should be completely out of power generation. The moment this starts, what’s preventing this from happening again? That’s what they are worried about,” said energy committee head of the Management Association of the Philippines, Ernesto Pantangco.

And with the controversies hounding the Executive branch on the Disbursement Acceleration Program, many are worried there could be abuse of power. It can be recalled that former President FidelV. Ramos exercised emergency powers during his term to buy more capacity, albeit on a take or pay basis which led to higher power rates because consumers had to pay for electricity that was not consumed.

In order to contract additional capacity, the government will have to pay the power generators for the power that will be leased from them. Petilla made an estimate of $18 million to $20 million per year for every 100 MW. He said partial funding may be sourced from the Malampaya Fund, which was earlier linked to the Priority Development Assistance Fund scam.

To dispel worries on possible abuse of power, Pantangco suggested that the emergency powers for President Aquino will be limited to power supply contracting for two years only covering 300 MW. Petilla also gave assurances that these additional powers won’t be similar to the emergency powers that Congress granted to Ramos to secure additional power supply to fix the power shortage that began with the Cory Aquino administration.

The Ramos emergency powers had been blamed for the high cost of power in the country.

To be continued

3-DAY EXTENDED FORECAST

LAOAG CITY 23 – 30°C

news@businessmirror.com.ph

@PanahonTV

The Nation

Editor: Dionisio L. Pelayo

BusinessMirror Tuesday, October 7, 2014 A3

House set to discuss wealth sharing provisions of BBL

T

HE House of Representatives ad hoc committee on the Bangsamoro basic law (BBL) will discuss on Tuesday the income and wealth-sharing provisions of the BBL.

Puwersa ng Masang Pilipino Rep. Rufus Rodriguez of Cagayan de Oro, the panel chairman, said officials from the Departments of Finance and of Budget and Management, the Bureau of Internal Revenue, the Bureau of Customs and the Bangko Sentral ng Pilipinas are expected to attend Tuesday’s hearing.

Rodriguez also said that his committee will hear on the same day the positions of representatives from the Commission on Audit, the Commission on Elections and the Civil Service Commission.

Liberal Party (LP) Rep. Jim Hataman-Salliman of Basilan, the panel’s vice chairman, said the hearing will continue until Wednesday

despite Congress’s three-week break that started on September 19. ““We will continue the hearing until Wednesday to expedite the bill’s passage,” Hataman-Salliman said.

The panel is also set to conduct hearings and consultations on October 23 in Maguindanao, North Cotabato, and the cities of Cotabato, General Santos, Cagayan de Oro, Iligan and Zamboanga.

In November the panel will hold hearings and consultations in Sulu, Basilan and Tawi-Tawi.

LP Rep. Jerry Treñas of Iloilo earlier admitted that one of the issues that may be raised during the deliberation of the proposed BBL is the wealth-sharing aspect of the peace agreement, as this could be

seen as prejudicial to other local governmentss and is giving undue special treatment to the proposed Bangsamoro entity.

“We already expect that other local governments, especially the rich ones, would demand the same kind of wealth-sharing deal but I’m very optimistic that they will eventually understand the need to do this in the name of peace in Mindanao,” he said.

MILF chief negotiator Mohagher Iqbal, during the panel’s first hearing two weeks ago, urged Congress to treat the proposed BBL carefully as it means “the whole world” to Muslim in the Philippines.

Iqbal, however, said that Congress should not be afraid and instead be hopeful about the proposed law that seeks to create a Bangsamoro political entity replacing the Autonomous Region in Muslim Mindanao. “[It] may be just another piece of legislation [but] for us it is something more,” Iqbal said.

Jovee Marie N. dela Cruz

House to investigate relocation of sea people to mountainous area

T

WO party-list lawmakers have sought an investigation on the relocation of Badjaos or sea gypsies to the mountainous area of Zamboanga City following the armed conflict between the government forces and the Moro National Liberation Front (MNLF) in the locality last year.

According to House Resolution 1409 of Party-list Reps. Luzviminda Ilagan and Rep. Emmi de Jesus of Gabriela, hundreds of displaced Badjao families are being relocated to barangays Tulungatong, Mampang and other villages far from the sea.

The resolution said that Badjaos in Zamboanga City live in boathouses or stilt houses in the coastal areas of

Mariki and Rio Hondo, and earn a living mostly through fishing, deep-sea pearl diving and seaweed farming.

It added the displaced Badjao families were prohibited from returning to their homes and sources of livelihood after the local government of Zamboanga City declared certain parts of their villages as “no-build, no-return zones.”

The resolution also said barangays Santa Catalina, Santa Barbara, Rio Hondo and Mariki were included on the list of environmental protection areas under the National Integrated Protected Areas System (Nipas).

It added that the Badjaos cannot live in the mountains, “and it is the same

as relocating the mountain people to the sea. They cannot survive too.”

The lawmakers said the displaced Badjao families were excluded in the decision-making process and were only informed later by the government authorities regarding their relocation and resettlement.

They said the Badjaos want to go back to Rio Hondo and Mariki.

The lawmakers cited the United Nations Guiding Principles in internal displacement, which states that “governments are mandated to protect the displaced indigenous peoples, minorities, peasants and other groups with a special dependency on and attachment to their lands.” Jovee Marie N. dela Cruz

Economy

A4 Tuesday, October 7, 2014 • Editors: Vittorio V. Vitug and Max V. de Leon

briefs oil firms roll back gas, diesel pump prices

Aside from a long weekend, consumers are expected to start an enjoyable week with oil companies announcing cuts on their oil products.

Petron Corp., PTT Philippines and Pilipinas Shell Petroleum Corp. (PSPC) will roll back their gas prices effective 12:01 a.m. on Tuesday.

The two oil companies will reduce their gas prices by 15 centavos per liter, while PSPC will lower its petroleum product by 10 centavos per liter.

Similarly, PTT and Petron’s diesel rates will decrease by 35 centavos per liter, with PSPC cutting back at 30 centavos per liter.

Shell also announced a reduction of 35 centavos on their kerosene product. Petron said that the reduction was due to the trend in international market prices.

As of October 6, the West Texas Intermediate was trading at $89.74 per barrel, citing a 1.42-percent change in the New York Mercantile Exchange. It is the industry standard and is often purchased due to its easily breakable characteristic, which is vital for the refining process.

Moreover, following a similar trend is Brent Crude Oil, with a 1.20-percent movement in the London branch of the Intercontinental Exchange. Brent is Europe’s premier blend. PNA

more tax perks for large families sought

A lawmaker is seeking to address the inequalities and biases against large families by removing the limitation on the number of qualified dependents a taxpayer may claim for tax deduction, as well as expanding the coverage of qualified dependents.

Authored by Rep. Mar-Len Abigail S. Binay of Makati City, House Bill 5020, or the “Family Care Act of 2014,” aims to strengthen the solidarity of the Filipino family, as well as to ensure the welfare of the elderly, as stipulated in the Constitution.

“Hence, Congress shall give highest priority to the enactment of measures that will grant reprieves and reduce social and economic inequalities by alleviating the financial conditions of every family, especially those with more children, those individuals caring for aging parents, and those who act as legal guardians to persons with mental or physically disabilities,” Binay said.

To achieve these goals, Binay said her proposal seeks to remove the limitation on the number of qualified dependents that a taxpayer may claim for tax deduction. At present, she said a maximum of only four qualified dependents may be claimed by qualified taxpayers as additional exemption.

The bill also seeks to expand the coverage of qualified dependents by including aging parents and persons with mental or physical disabilities, regardless of age.

Upon approval, the bill provides the Department of Finance, in coordination with the Bureau of Internal Revenue and the Department of Social Welfare and Development to issue the necessary implementing guidelines of the bill. ABS-CBNnews.com

poea suspends recruiter for overcharging ofws deployed to taiwan

The Philippine Overseas Employment Administration (POEA) suspended a recruitment agency for complaints of overcharging filed by overseas Filipino workers (OFWs) deployed to Taiwan.

The POEA issued an order of preventive suspension against Lexus Inc. after allegedly collecting placement fees higher than what was allowed by POEA rules and regulation.

Separate complaints have been filed by some 20 Filipino factory workers against the said agency at MECO Labor Affairs in Kaohsiung in July according to POEA Administrator Hans Leo J. Cacdac.

An amount ranging from P90,000 to P130,000 was allegedly charged

by Lexus to the workers even though the latter have signed contracts with a monthly salary of Taiwanese $18,000 to Taiwanese $19,000 or just equivalent to about P28,000.

Lexus did not issue them appropriate receipts for their payment. PNA

BusinessMirror

news@businessmirror.com.ph

Swiss challenge for implementation of P18-B Connector Road to push through in Q1 2015

T

By Lorenz S. Marasigan

he competitive challenge for the P18-billion Connector Road proposal of Metro Pacific Investment Corp. is expected to push through by the first quarter of 2015.

A fourth-quarter deadline for the said auction is not viable, conceded Public Works Secretary Rogelio L. Singson, amid calls from the private sector to hasten the long-delayed implementation of the project.

“To schedule the Swiss challenge for the connector road within the year is not realistic. It might go about 90 days, or sometime in the first quarter,” he replied, when asked for updates on the proposal.

Sought for comment, Metro Pacific Tollways Corp. (MPTC) President Ramon S. Fernandez expressed his group’s disappointment of the long process that his firm had to go through only to get back to square one after four long years.

“We are disappointed because

that project is very much needed now, more specifically because of the traffic. We can’t finish it on schedule,” he said. “The port congestion that is happening now is affecting our economy.”

The group of businessman Manuel V. Pangilinan submitted the expressway project to the public works agency as an unsolicited proposal in May 2010. It was duly approved by the highest planning body of the government in 2013.

Under the recommendation of Transportation Secretary Joseph Emilio A. Abaya, the National Economic and Development Board (Neda) moved to amend the existing supplemental toll operations agreement of the firm to hasten the

project’s mode of implementation.

Under the revised supplemental toll operations agreement, Manila North Tollways Corp. (MNTC), the corporate vehicle for the implementation of the Connector Road, would connect the thoroughfare to the two-segment Harbor Link Project.

This effectively eliminates the long process of placing the unsolicited offer under a competitive challenge.

MNTC is a joint venture between MPTC and state-run Philippine National Construction Corp., which holds the franchise for both the North and South Luzon Expressways.

But the Toll Regulatory Board, acting to a complaint filed by a private citizen, recommended that the deal be subject to a Swiss challenge, following the opinion of the justice department on the matter.

Justice Secretary Leila M. de Lima, in a 41-page opinion, emphasized the need for the project to be reverted back to an unsolicited proposal and undergo a competitive challenge, declaring the franchise extension method illegal.

This effectively delayed the completion of the 8-kilometer

road that will link the North and South Luzon Expressways by at least a year. The expressway was expected to be completed by the time President Aquino steps down from office in 2016.

A Swiss challenge normally takes about three to 10 months from the publication of the invitation to bid for the unsolicited proposal. The original proponent has the right to match the highest bid garnered during the process.

“We are going back to Neda for reconfirmation,” Singson noted.

The Connector Road or Segment 10.2, is an 8-km mainline road that will run from C-3 Road in Caloocan to Polytechnic University of the Philippines in Santa Mesa, Manila.

It will also have 2.6-km port area spur road that will run from C-2 Road to R10 in Tondo, Manila.

The expressway is expected to facilitate the seamless exchange of goods and services between the two ends of the country’s capital. This would aid truck operators and freight services firms to pickup shipped goods from the ports in Manila and deliver them to markets.

LRT 1 commuters: Rail-service improvements first before fare hike

C

OMMUTERS slammed on Monday the Department of Transportation and Communications (DOTC) for entering into a rail contract that effectively placed the riding public on the losing end due to the inevitable fare hike at the Light Rail Transit (LRT) Line 1.

NationalCenterforCommuterSafety and Protection President Elvira Medina said the government and the private concessionaire must first improve the services of the railway system before imposing any increase in ticket prices.

“The commuters want to see improvements of the service first, before any increase. If there will be no improvements in the service, then we will not allow any fare hike. We will exhaust all legal means if this is going to happen,” she told the BusinessMirror in a phone interview.

She added that Transportation Secretary Joseph Emilio A. Abaya “must have enough wisdom to look into the plight of the consumers before allowing this to happen.”

The Light Rail Manila Corp.

(LRMC) is demanding the the government to implement a fare increase ahead of its takeover in October 2015.

Metro Pacific Investments Corp.

(MPIC) President Jose Ma. K. Lim explained the consortium’s plea for a fare hike is part of its requirements before financially closing the P64.9-billion LRT Line 1 Cavite Extension deal.

“There are offers from several banks, and we don’t want to close until we have all the requirements. One of the most critical aspects is the fare increase which we hope will be implemented in a timely fashion, so that we have enough time to close with the banks,” he pointed out.

He refused to disclose the banking institutions that will be tapped for the deal, but he stressed the need for the fare hike to convince lenders that the consortium has enough revenue stream to pay for the debt.

David J. Nicol, chief financial officer of the infrastructure giant, said the group is targeting to financially close the deal by the first half of 2015.

“We at the moment have three willing lenders. [But] a financial close [is not likely to take place] until the middle of next year. There is a huge amount of work that has to go in from now to

PHL seen to complete 5 PPP projects by 2016

A Light Rail Transit (LRT) Line 1 commuter train passes by a building undergoing construction in Pasay City. A commuters’ group is opposing a proposal to hike LRT 1 fares. Alysa Salen

get to financial close, including what the tariff is going to be,” he added.

The implementation of the fare increase on the three overhead railway systems in the Philippines dating back to 2011 had long been delayed, Sought for comment, Transportation Spokesman Michael Arthur C. Sagcal said the government will be forced to increase the passenger ticket prices as the hike is part of the contract signed by the government and the private concessionaire for the extension of the train system.

“The contract presumes that the P11+1 formula is already in effect since the proposed fare increase was supposed to have been implemented three years ago,” he explained. “The fare increase could be implemented anytime, it has been pending since 2011,” he said.

This means that for LRT 1, the proposed fare hike would be P30 for single journey and P29 for stored value tickets from Roosevelt in Quezon City to Baclaran in Pasay City from an existing P20 fare.

Under the key infrastructure contract inked on Thursday, the concessionaire will shoulder the market risks of the project, while the regulatory risks remain with the government.

T

he Aquino administration expects to complete five projects under the public-private partnerships (PPP) program with combined costs of around P40 billion before President Aquino’s term ends in 2016.

PPP Center Executive Director Co-

This means that there will be annual increases in fares, but will only be implemented every two years.

The 5-percent annual increase, the contract showed, is meant to cover the effects of inflation.

The fare increase was sought by railway regulatory bodies in 2011 as the three overhead train lines have been operating at a loss, forcing the national government to subsidize bulk of their expenses.

This include daily operating expenses, such as overhead, power supply and salaries. They also include costs for repairs and replacement of train and rail parts, and for the payment of existing debts.

Government officials tagged the financial position of the train systems as “anemic” as reflected in the deficit posted in 2012.

The LRMC will start operating and maintaining the LRT 1 by October next year, and the construction of the additional stations to Cavite will start thereafter. It will take five years from now for the extension to be commercially operational.

“Our immediate objective is to get familiar with the assets and conditions of those assets. We want to work closely with the existing organization

sette Canilao, in an interview, said these projects include the Automatic Fare Collection System, the Ninoy Aquino International Airport Expressway Project (Phase 2), the Daang Hari-South Luzon Expressway Link Road Project, the PPP for School Infrastructure Project (Phase 1) and the PPP for School Infrastructure

and turn the operations over smoothly in 12 months,” Lim said.

The tandem of MPIC and Ayala Corp. was the lone bidder during the auction for the P65-billion deal. The LRMC's offer carried a P9.35-billion premium on top of the project cost.

Under the 32-year concession agreement, the consortium will operate and maintain the existing line and construct and 11-kilometer extension from the present end-point at Baclaran to the Niog area in Bacoor, Cavite.

A total of eight new stations will be built along this route, which traverses the cities of Parañaque and Las Piñas up to Bacoor, Cavite.

In signing the agreement, the concessionaire agreed to invest P35 billion to construct the extension of line, which is envisioned to help ease the worsening traffic conditions in the Parañaque-Las PiñasCavite corridor.

The remaining P30 billion will be spent by the government to procure train coaches, construct and expand depots, and the acquisition of the right of way.

The extension is expected to enhance commercial development around the rail stations. Lorenz S. Marasigan

Project (Phase 2).

Canilao said five projects are also up for bidding, including the Integrated Transport System (ITS)-Southwest Terminal Project, the ITS South Terminal Project, the Bulacan Bulk Water Supply Project, the Laguna-Lakeshore Expressway Dike Project and the Op-

Bayan Muna blames Epira for energy woes

By Marvyn N. Benaning Correspondent

P

arty-list Rep. Neri J. Colmenares of Bayan Muna has blamed the Electric Power Industry Reform Act (Epira) for the high cost of electricity and the continuing instability of energy supply in the country.

“Privatizing the energy sector left the country subject to the whims and collusion of private corporations resulting to the instability and high prices of electricity,” he added.

“Secretary Jericho L. Petilla’s threats of a specter of brownouts only proves that the country is still in the same rut it was when Epira was passed. While we continue to question basis for the supposed lack of supply, the much feared energy crisis will eventually happen unless we repeal Epira and craft a pro-people law that will govern the energy sector,” Colmenares said.

“We oppose emergency powers for President Aquino precisely because not only has Petilla failed to prove the claimed lack of supply, but also because this short-sighted, ‘Band Aid’ solution will increase the cost of electricity and will not assure stable energy supply. We need long term solutions, not short term magic tricks,” he added.

“There is only one and only one solution to our energy problem—repeal Epira now,” Colmenares said.

While calling for the immediate repeal of Epira, Colmenares continues to assert that Petilla has not adequately explained why there is a lack of supply.

The Energy secretary said that the figures he earlier used were wrong and that they were surprised about the supposed needed overhaul of Malaya 1.

“But what will keep Petilla from later claiming that the figures they are presently using are also wrong? As it is the secretary was hard put in explaining their obsession for emergency powers here in Congress and even at the Senate. So what would be the basis for congress and senate to grant emergency powers to the President before the end of October?

There is no hard evidence that there would indeed be a power crisis next year” argued Colmenares.

“Hindi nga maipaliwanag ng maayos at kapani-paniwala kung kukulangin nga ba talaga ng kuryente sa susunod na taon ay minamadali naman itong emergency powers.

Ang masama pa ay kukuhanan nito ng P6 hanggang P12 bilyon ang Malampaya funds at iba pa ito sa ipapasang singil sa mga gumagamit ng kuryente. Sa ngayon ay wala pa kaming nakikitang dahilan kung papaano magkakaroon ng kakulangan sa kuryente kung hindi ito sasadyain ng mga generating companies,” Colmenares said.

“At the next energy committee hearing we will request all the owners and operators of power plants in Luzon to submit a detailed report of their installed and dependable capacities and their availability, as well as power plants to go on the grid in six to nine months. We also want a detailed report on the complete status of each plant, as well as their scheduled shut downs.

We also want various groups to present their position on alternative approaches other than the use of emergency powers,” he said.

eration and Maintenance of Light Rail Transit Line 2.

“On top of that, we are hoping to bid at least 10 more projects. These are mostly DOTC [Department of Transportation and Communications] and DPWH (Department of Public Works and Highways) projects,” she said. PNA

Economy

news@businessmirror.com.ph

BusinessMirror

Tuesday, October 7, 2014 A5

Aquino likely to favor ILP rather than lease of costly generator sets

T

By Butch Fernandez & Jovee Marie N. dela Cruz

he Aquino administration is leaning heavily toward the Interruptible Load Program (ILP) option that would tap high-powered generator sets (gensets) of private firms on a voluntary basis under a scheme where they would be recompensed for helping reduce an energy-supply shortage likely to trigger brownouts in 2015.

Malacañang Spokesman Edwin Lacierda indicated on Monday this was emerging as the favored option rather than lease costly gensets for fixed amounts likely to invite comparisons with “onerous” take-or-pay contracts during the Ramos-era energy crisis, where consumers were made to pay even for electricity they did not use.

Asked if the government had already fixed the amount it would need to draw from Malampaya funds to lease gensets for additional capacity to avert the 2015 brownouts, Lacierda told the BusinessMirror that energy officials are set to hold further talks with lawmakers on the funding issue, as well as other options to deal with the powersupply problem.

“Congress and [the] Department of Energy will be in discussions as to the best manner to address the power shortage in 2015,” Lacierda said. “Let us wait for all options to be threshed out.”

This, even as another Palace official, who spoke on condition of anonymity, confided that the estimated drawdown from Malampaya funds to bankroll government efforts to avert the power supply may eventually be “much lower” than the initial P6-billion estimate earlier made by energy officials for options to bridge the serious power-supply gap projected to hit Luzon by summer next year.

The lower cost estimate is likely to result if more private companies with big gensets opt to join the ILP to close the supply gap, with government assurance of cost recovery for participating companies.

Congress leaders, in the meantime, assured that lawmakers are working to fast track passage of a joint resolution requested earlier by President Aquino for authority to contract additional capacity to cut the serious supply shortfall.

“We must recognize and accept the fact that we need additional generating capacity in order to avert looming power crisis in the summer of 2015,” said Senate President Franklin Drilon. “Right now, we are looking at a shortage of 300 megawatts [MW].”

Drilon disclosed they are looking at the availability of “about 475 MW from new

power plants and from the repair of existing power plants and another 275 MW or so from private generating sets.”

“So the shortfall we are looking at is approximately 300 MW, at ito po ang kailangan natin na gawaan ng paraan kung paano magkakaroon ng additional generating capacity. May authority sa Section 71 of the Epira [Electric Power Industry Reform Act] para po mabigyan ng kapangyarihan ang Pangulo na gumawa ng paraan para magkaroon ng additional generating capacity,” he added.

According to Malacañang, the Department of Energy had already received commitments from early volunteers who have enlisted to join the ILP, including SM malls.

Summer power-shortage potential loss

A lawmak er on Monday warned the Aquino administration of an estimated P81.6-billion loss in potential income for Luzon if the looming power shortage remains unacted upon

by Congress.

Nationalist People’s Coalition Rep. Sherwin Gatchalian of Valenzuela City said the administration should expedite its decision in solving next year’s projected power shortage, saying the country stands to lose P81.6 billion if no resolution is reached by the end of October.

“Time is running out for Luzon as the specter of a power shortage threatens the country’s center of commerce, which contributes a lion’s share of the country’s yearly gross domestic product [GDP],” he said.

“According to our rough estimates, the country will lose P81.6-billion in potential income from production in Luzon next year if the government, especially Congress, does not come up with an immediate solution to avert the crisis,” added Gatchalian, a senior vice chairman of the House Committee on Metro Manila Development.

The lawmaker said the projected income loss in Luzon is equivalent to 1.2 percent of last year’s real GDP of P6.76 trillion. “[In computing the lost potential income]…we multiply the [expected] power shortfall, [which is expected to reach

952,560 megawatt-hours by the respective power consumption rate [at 85,692 MWh] to obtain the estimated reduction in GDP, which results to around P81.63 billion, or 1.21 percent, of 2013’s real GDP of about P6.8 trillion,” he said.

The numbers obtained are converted from megawatt to megawatt-hour by multiplying the respective megawatts value by 168, the number of hours in a given week, he added.

Aside from the loss of potential income, other effects include increased risks to health, detrimental effects on the school performance of children, lower foreign direct investment levels and increased consumer prices, Gatchalian added.

If Congress will comply with the Executive’s request for emergency powers in accordance with the Epira, both houses will have to immediately pass a joint resolution for the grant of such power because the purchase or lease requires at least three months, the lawmaker said.

He added the other option favored by the Lower House is the grant of perks to prospective ILP participants.

Last month President Aquino asked Congress to grant him emergency power that will allow him to contract additional power capacity to avert the looming power crisis in summer next year.

Mr. Aquino cited Section 71 of the Epira, which states that, “Upon determination by the President of the Philippines of an imminent shortage of the supply of electricity, Congress may authorize, through a joint resolution, the establishment of additional generating capacity.”

But House House leaders deferred the filing of the of the joint resolution granting Mr. Aquino emergency power to contact additional capacity. Instead, they agreed to hold an investigation— through House Resolution 1533—into whether there is really to vest Mr. Aquino with such power.

The energy committee is now conducting hearings to discuss the resolution.

Fund

Meanwhile, House Speaker Feliciano Belmonte Jr. said the lower chamber is now seriously considering empowering President Aquino to utilize the Malampaya Fund as subsidy to spare the public from paying the expected additional cost of electricity in summer next year.

“Yes, it’s [tapping Malampaya fund] an option,” Belmonte said.

Liberal Party Rep. Reynaldo Umali of Occidental Mindoro, chairman of the House Committee on Energy, said tapping the fund would be part of the emergency powers that Congress is considering.

“If the source is Malampaya, then there is no additional burden to consumers,” Umali said in an interview after Drilon disclosed that Congress will authorize President Aquino to tap about P4 billion to P10 billion from the Malampaya Fund.

SRP on chicken, pork not followed in Metro wet markets

T

he government’s suggested retail prices (SRP) on pork and chicken are not being followed in wet markets in Metro Manila.

Based on the government’s monitoring as of September 30, prices of pork hover between P200 and P210 per kilo, above the SRP of P175 to P185/kilo.

Chicken prices range from P140 to P145/kilo, above the SRP of P135.

According to vendors, the government’s SRP cannot be implemented since the prices of their respective suppliers are already high.

Some consumers don’t mind the high prices, but others are wondering why the SRP is being not implemented.

Meanwhile, Agriculture Undersecretary Jose Reaño explained that while the SRP is indeed in effect, the Department of Agriculture will first issue warnings to those who sell beyond the SRP. After the warnings, a penalty of P5,000 will be imposed and if the vendors still sell above the SRP, then revocation of business permit will be done.

Vendors in Mega-Q-Mart said aside from not following the SRP, pork and chicken prices are also likely to go up as the holiday season nears.

According to vendors, it’s a seasonal uptick due to the demand. ABS.CBNnews.com

Bill proposes to institutionalize cyber education program in public schools

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O address the declining quality of education in the country, a lawmaker has filed a measure pushing for the use of touchscreen computer blackboard in all public schools.

House Bill 53, authored by Liberal Party Rep. Alfredo Benitez of Negros Occidental, seeks to institutionalize the implementation of a cyber education program for primary, secondary and tertiary education in the country.

The bill also seeks to achieve higher standards of education and bring about significant improvements in the performance of students through the utilization of information and communication technology (ICT); improve the quality of classroom lessons and the fundamental improvement of public education through the use of ICT; address the inequality in education by bringing the educational system even to the remotest barangay and to many underserved children, especially those who come from lower-income families and prepare students to become ICT literate and provide them unlimited opportunities for learning.

The bill, now pending at the committees level, proposes that there shall be at least one cyber-education classroom in every school.

The measure also mandates the creation of a Cyber Education Development and Management Corp. (CyberEd Corp.) under the Department of Education.

Under the bill the CyberEd Corp., which will be organized within 60 days from the

effectivity of the act, shall be the primary policy-making, planning and coordinating entity of the government that will be tasked to develop, coordinate and ensure the implementation of government programs and action plans relating to the cyber education program.

In his province, Benitez said that they have launched the implementation of similar ICT program in at least 70 schools through the use of touchscreen computer blackboard or the Alternative Learning Board (AL-B).

“Since the implementation of AL-B, we notice that the passing rate of our students in the National Achievement Test has been increased significantly from 69 in 2011 to 74 percent in 2012,” he said.

Benitez said in the Global Competitiveness Report of the World Economic Forum for 2010 to 2011, the Philippines ranked 99th out of the 138 economies in the area of primary education, 69th in educational system, 112th in science and math and 76th on Internet access.

“The Philippines ranked poorly in all categories, even falling behind its neighboring Southeast Asian countries including Singapore, Brunei Darussalam, Malaysia, Indonesia, Thailand and Vietnam,” he said.

“The importance of technology in providing good quality education cannot be taken for granted. For one, the Philippines has a reputation for being a world-class ICT hub in Asia, a status that we have to uphold,” he said.

Jovee Marie N. dela Cruz

Opinion BusinessMirror

A6 Tuesday, October 7, 2014

Editor: Alvin I. Dacanay

editorial

Not very helpful advice

A

SSUME, for a moment, that you are sitting in your doctor’s office, waiting for the results of your annual physical exam. Your doctor has been examining you for many years and knows your medical history very well.

The doctor starts by telling you that all your test results are normal, then offers some suggestions: You should get more exercise; you spend a few more hours each week relaxing and not working; and you should watch your diet a little more closely. All these are good advice.

But then the doctor goes on, telling you that the good test results really mean nothing if, by chance, you get run over by a bus. Or that getting struck by lightning during the next storm might significantly reduce your life expectancy. Also, you might want to avoid being the victim of a violent crime.

If you think that conversation started sensibly and ended strangely, then you might also think that way about the World Bank (WB) report on the Philippine economy and its future prospects.

A few months ago, the WB released its “East Asia Pacific Economic Update”.

In it, the WB lowered economic-growth projections for the Philippines from 6.6 percent to 6.4 percent for this year and from 6.9 percent to 6.7 percent for 2015. Presumably, these estimates are based on the best and latest research from WB economists.

There is no reason to argue with the WB experts, as that is their job, and their research and data are probably accurate. According to the WB’s analysis, the Philippine economy is, at least, somewhat dependent on “public spending, disaster reconstruction and further structural reforms.” Of course, we would question what is meant by those items. What “public spending” does the WB think is necessary to improve the economy? Is it talking about infrastructure, increasing the salaries of government employees or, maybe, better training for our athletes for next the Asian Games?

The WB report goes on to state that “an acceleration of reconstruction spending can support growth at above 6 percent.” Maybe that also means that it is good that the Philippines has so many natural disasters, because then we can spend funds to repair the damage they wreaked.

The report notes that there are several external factors that pose risks to economic growth. These include “disorderly policy normalization in highincome countries, a disorderly adjustment in China’s property market, political tensions in the Middle East and Eastern Europe, and territorial disputes with China.”

That analysis may be true, but how exactly can we prepare in the event the Chinese property market crashes or if the conflict in Ukraine flares up again?

If you are going to highlight potential problems, it might be good to offer potential solutions.

BusinessMirror A broader look at today’s business Ambassador Antonio L. Cabangon Chua Founder Publisher Associate Editors

T. Anthony C. Cabangon Jun B. Vallecera Armin A. Amio

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Retail business: The new battleground in a booming economy Manny B. Villar

THE Entrepreneur Conclusion

Local brands can take on the competition

T

The first direct impact is on employment. The cost of labor in the Philippines is still way below those in developed markets, so retail establishments in the country are able to hire more employees than their outlets in affluent markets, like the United States.

The consistent increase in remittances from more than 10 million overseas Filipino workers (OFWs) and the 1 million employees of the business-process outsourcing (BPO) industry—who receive salaries above the minimum wage—means more people with higher purchasing power, who, in turn, fuel the demand for consumer goods, including many branded items that were considered unaffordable luxuries in the past.

In turn, the robust demand for consumer goods also make investments in factories viable. That is why the Philippines, which has been granted investment-grade status, is seeing an increase in foreign direct investments (FDI).

Cash remittances from overseas

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REGIONAL OFFICES n DXQR - 93dot5 HOME RADIO CAGAYAN DE ORO STATION MANAGER: JENNIFER B. YTING E-MAIL ADDRESS: homecdo@yahoo.com ADDRESS: Archbishop Hayes corner Velez Street, Cagayan de Oro City CONTACT NOs.: (088) 227-2104/ 857-9350/ 0922-811-3997 n DYQC - 106dot7 HOME RADIO CEBU STATION MANAGER: JULIUS A. MANAHAN E-MAIL ADDRESS: homecebu@yahoo.com ADDRESS: Ground Floor, Fortune Life Building, Jones Avenue, Cebu City CONTACT NOs.: (032) 253-2973/ 234-4252/ 416-1067/ 0922-811-3994 n DWQT - 89dot3 HOME RADIO DAGUPAN STATION MANAGER: RAMIR C. DE GUZMAN E-MAIL ADDRESS: homeradiodagupan@ yahoo.com ADDRESS: 4th Floor, Orchids Hotel Building, Rizal Street, Dagupan City

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Filipinos stood at $2.1 billion in July, up 6 percent from the same month last year, according to the Bangko Sentral Pilipinas (BSP). This brought cash remittances for the first seven months of 2014 to $13.5 billion, a 5.8-percent increase from $12.7 billion for the same period in 2013.

In another report, the BSP said net FDI inflows amounted to $588 million in June, a substantial turnaround from the $26-million net outflows posted in the same month in 2013. For the first six months of 2014, net FDI inflows surged 76.9 percent to $3.6 billion from $2 billion a year ago. The BSP said the impressive growth in foreign investments reflected strong investor confidence in the country’s macroeconomic fundamentals.

Nestlé Philippines Inc., the local unit of the global food giant, is among the Philippines’s largest corporations. It is also one of the biggest foreign investors and employers (according to Nestlé’s website, it has 3,700 employees throughout the country).

What have you done for me lately?

John Mangun

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HE explosive growth of the retail business will generate a wide-ranging and lasting impact on other sectors of the economy, and not just on consumer spending.

Nestlé, which has been operating in the Philippines for more than a century, has manufacturing facilities in Cabuyao town, Laguna province; Cagayan de Oro City, Misamis Oriental province; Pulilan municipality, Bulacan province; and Lipa City and Tanauan town, Batangas province.

Nestlé said it had invested more than P16 billion in recent years to expand its factories in the Philippines and raise production capacity. The investments include P4.8 billion for the expansion of the company’s coffee-creamer manufacturing plant in Tanauan in October 2012.

The factory is equipped with a number of systems for rainwater collection, the recovery and reuse of industrial wastewater, and light-saving energy. The factory also converts its waste into fertilizer for coffee farms.

In Tagum City, Davao del Norte province, Nestlé’s experimental and demonstration farm has trained 10,700 coffee farmers on modern planting and harvesting techniques to increase harvest and improve crop quality, and distributed 3.5 million Robusta coffee seedlings from 1996 to 2011.

Filipino-owned companies also make similar investments in manufacturing facilities, albeit on a smaller scale. Peerless Products Manufacturing Corp., which launched its Champion laundry detergent in 1997, currently operates one factory in Bulacan and another in Laguna. In addition to Champion, touted as one of the top 3 detergents in the country with a 20-percent market share, Peerless also manufactures Champion dishwashing liquid and fabric conditioner.

Lamoiyan Corp., which started as a

OUTSIDE THE BOX

I

N case you haven’t noticed, the Philippine government has been out of the business of managing the economy for the last six months or so. And, depending on how you look at it, that could be a positive development.

For the first eight months of 2014, national-government borrowings were down 43 percent from 2013. In August alone, borrowings were P22.8 billion, down 85 percent from P148.9 billion in the same month last year. The Department of Finance said this is part of the Aquino administration’s efforts to improve its fiscal situation, which is true.

What’s also true is that spending growth is down, increasing only 4 percent (net of debt service expenditures in August) from 2013.

The government is now talking about all the infrastructure spending that is going to be made in 2016.

The awarding of the massive, P123billion Laguna Lakeshore ExpresswayDike Project would probably be postponed until early 2016. Other current

public-private partnership projects are mere petty cash in the great economic scheme of things. The specifics show that, regardless of the monetary value of the current projects, there is nothing that is economically earthshaking, which is what the Laguna Lake project is going to be. If you look at the ongoing projects, these are really ordinary. The P2-billion Daang Hari-South Luzon Expressway link road serves to increase access to property developments that have been in place for a decade.

The large school infrastructure spending is trying to fill the gap that has been growing for 20 years. Airport expansions are also long overdue, but they are not groundbreaking with a large economic multiplier effect. The P65billion Light Rail Transit Line 1 Cavite

Extension project is very important and will come on line sometime in 2019.

This is all like the lyrics of the 1986 Janet Jackson song “What have you done for me lately?”

But the government agency in charge of the economy right now is the Bangko Sentral ng Pilipinas (BSP). Unfortunately, its powers are limited, and the best that it (and we) can hope for is that it would be able to take advantage of external conditions. BSP policy decisions can try to push the Philippines’s economic ship, but, like a tugboat on the Manila Bay harbor, they can only have so much influence.

While the BSP, in my opinion, allowed inflation to grow too high and too fast by ignoring the signs seen 18 months ago, it may have gotten lucky with a three-point shot when they raised interest rates the first time. If i nflation for September is lower than the 4.9-percent rate in the previous two months, the worst may be over.

Right now, the most important positive thing that government could do for the economy is to get the inflation problem under control.

Actually, if the BSP had raised interest rates in March when they should have, the inflation problem would have not existed and the economy would have been stronger. Higher interest rates at

supplier of aluminum toothpaste tubes for Colgate-Palmolive and Unilever, shifted to toothpaste production after the two multinational firms replaced their containers with plastic tubes.

Lamoiyan’s manufacturing facility now produces toothpaste under the Hapee and Gumtect brands, Dazz dishwashing liquid and paste, and Licealiz anti-lice shampoo and conditioner.

Publicly listed Splash Corp. is probably the biggest Filipino-owned manufacturer of personal care, health and wellness products. The company grew into a P4-billion enterprise from a backyard business founded in 1985 with a P12,000 capital. Splash carries the brands Extraderm, Maxi-Peel and Skin White, as well as Biolink, touted as one of the fastestgrowing skin-care brands in the country.

Splash invested P400 million in a manufacturing complex in Valenzuela City in 2002 to meet its capacity requirements in the medium term.

The company said it had established a presence in more than 30 countries, including the US, Australia, India, Canada, Vietnam, Saudi Arabia, Egypt and Singapore.

In conclusion, we have a healthy competition in the retail business, one that affects the whole economy. The lesson I want to impart through this series is that local brands can take on their foreign rivals.

We have the home-court advantage, and we know what the Filipino consumer wants and needs. Giving up is not an option.

For comments, e-mail mbv.secretariat@gmail.com or visit www.mannyvillar.com.ph.

that time would have caused the peso to appreciate, unlike now when the peso is weak, in spite of higher Philippine interest rates. There is just too much upside pressure on the US dollar now.

Inflation in the Philippines rides on two factors: the exchange rate of the peso and the price of crude oil. These two factors are not mutually exclusive and go together like chicken adobo and rice.

The peso-dollar exchange rate has actually changed from January. But the global price of crude oil is down substantially. In peso terms, a barrel of crude oil cost P4,760 at the beginning of the year.

Now that same barrel costs P4,155 for a decrease of over 12 percent.

A 12-percent decrease in oil prices should have brought inflation way down, had the BSP done a better job. Now, we need at least one more interest-rate increase. This would actually increase economic growth, as money would be better allocated to more profitable investments.

We need inflation to come back to the 4-percent area, and we need that to happen quickly.

E-mail me at mangun@gmail.com.

Visit my website at www.mangunonmarkets.com. Follow me on Twitter at @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Tuesday, October 7, 2014

P-Noy-Mar plot to extend Cathay Pacific’s dishonest dealings term means instability Butch del Castillo Ernesto M. Hilario

ABOUT TOWN

N

OW the cat is out of the bag.

Interior Secretary Manuel “Mar” Roxas II has admitted that he was the one who floated the idea of a second term for President Aquino, despite the clear constitutional provision that the Chief Executive would only serve a fixed six-year term without reelection.

P-Noy has apparently warmed up to his sidekick’s idea of a second term in Malacañang, despite an earlier statement that he would step down in 2016 after his constitutionally mandated term ends, but plays coy by saying that he has to first “consult” his “bosses”—the people—before making any decision.

But here’s clear proof that the bosses he professes to listen want him to exit Malacañang in 2016 and head off to Times Street, where he can spend his days tinkering with his lethal arsenal of 16 or so firearms, or listening to his extensive collection of compact discs.

According to a new survey by pollster Pulse Asia, roughly three out of five Filipinos do not want the 1987 Philippine Constitution amended at this time, though nearly half of them are open to having it amended sometime in the future.

The survey, conducted from September 8 to 15, showed that 62 percent of Filipinos do not want the Charter amended to allow a second term for President Aquino.

“For 62 percent of Filipinos, there is no need to amend the 1987 Constitution at the present time—with 32 percent opposed to Charter change at any other time and 30 percent being open to Charter change at some future time,” it said.

The latest survey also noted that opposition to Charter change now is the majority sentiment in each geographic area (61 percent to 68 percent) and socioeconomic grouping (56 percent to 65 percent).

The survey also showed that 62 percent of Filipinos are not in favor of Mr. Aquino running again for the presidency after his term ends in 2016. “[About] six in 10 Filipinos [62 percent] are not in favor of President Benigno S. Aquino III running again for the presidency after his term ends in 2016, that is, should the 1987 Constitution be amended to allow for the reelection of an incumbent chief executive,” Pulse Asia said.

The survey results offer incontrovertible proof that President Aquino, Roxas and the ruling Liberal Party (LP) coalition are out of touch with reality on the ground.

More than that, the very idea of a second term for Mr. Aquino and attempts to to tamper with the Constitution for selfserving political interests demonstrates, in no uncertain terms, that power corrupts, and corrupts absolutely, as Lord Acton had warned.

If the President now wants to continue sitting in the Palace for another six years after 2016, this will be a

legalized power-grab being hatched by the LP. Should this take place, Mr. Aquino and Roxas will not be any different from former President Ferdinand Marcos, who orchestrated a grand scheme to impose tyranny so he could keep himself in power.

The Aquino-Roxas cabal to bastardize our democracy and trample the Constitution underfoot is pure hubris, any way you look at it.

Lopsided priorities WHAT are the bright boys at the defense and military establishments, led by Defense Secretary Voltaire T. Gazmin, up to these days?

Well, draw your own conclusion from the recent report that the Department of National Defense (DND) wants to purchase, for the astronomical sum of P5.405 billion, two antisubmarine helicopters.

That’s P2.7 billion each for two helicopters that we can only assume would be a deterrent against intrusive Chinese submarines in the West Philippine Sea (South China Sea).

This planned purchase of two very expensive pieces of military equipment is highly questionable, considering that the possibility of Chinese submarines lurking beneath our territorial waters and posing a clear and present threat to the country is very remote at this point.

This shows the lopsided priorities of the DND/Armed Forces of the Philippines (AFP) and raises the question: Who stands to benefit from this extravagant, but unnecessary, purchase?

At a mere 10 percent of the purchase cost of the two helicopters, the proponents of this project stand to gain no less than P54 million from kickbacks. If the under-the-table deal is 15 percent, then it’s P81 million in public money that will end up in private pockets. And so on, down the line, since some proponents of government contracts are known to skim off even as high as 40 percent to 50 percent of the total cost.

The modernization of the AFP should proceed to counter both external and internal threats. But the planned purchase of two state-of-the-art antisubmarine helicopters to counteract what appears to be a nonexistent threat at this time is criminal extravagance, which, perhaps, Congress should look into. We can put P5.405 billion to better use, such as housing for the homeless, or the rehabilitation of areas hit by Supertyphoon Yolanda (international code name Haiyan).

E-mail: ernhil@yahoo.com.

Japan’s tragic wake-up call William Pesek

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BLOOMBERG VIEW

ITH the discovery of four more bodies near the summit of Mount Ontake on Saturday, raising the death toll to 51, that volcano’s eruption is now Japan’s deadliest in 88 years. It’s impossible not to worry about an even bigger volcanic threat that lies just 90 miles from Tokyo: Mount Fuji. All this has both seismologists and antinuclear activists asking anew whether the most earthquake-prone nation in the developed world should be restarting its 48 nuclear reactors, which have been offline since a record earthquake and tsunami in March 2011 precipitated the Fukushima crisis.

I’m in the “no” camp, and not just because the public disapproves of Japanese Prime Minister Shinzo Abe’s coddling of the shadowy nuclear industry.

My argument—one I’ve made before—is

as much about Japan’s economic future as the personal safety of the 126 million Japanese I live among.

The tragic explosion at Ontake showed the dark side of Japan’s

F

OMERTA

ORMER Ambassador to Lao People’s Democratic Republic Antonio L. Cabangon Chua had a very unpleasant experience less than two weeks ago, when he chose to take a Cathay Pacific Airways flight to Hong Kong.

The unpleasant incident is the subject of a formal demand letter sent by lawyer Alexis S. Oco, dated October 2, 2014, to Alan Lui, Cathay Pacific country manager in the Philippines, with address at 22nd floor, LKG Tower, Ayala Avenue, Makati City.

But before we go into the details of that unfortunate incident, which could trigger a damage suit, here’s a bit of background about the ambassador.

ALC (that’s what his executives actually call him) is the chairman emeritus—as founder-patriarch—of the nowdiversified ALC Group of Companies, which has a 10,000-strong workforce.

He has just turned 80, but he continues to set a frenetic working pace for the entire mini-conglomerate, which includes three big insurance companies, two preneed firms (including 10 memorial parks), several hotels, an exclusive car dealership, two savings banks, two big property-development projects involving more than 100 hectares, and a fast-expanding media group.

The media group is composed of the BusinessMirror; the Aliw Broadcasting Network, in partnership with RPN 9; The Philippines Graphic weekly news magazine; and, of course, the Pilipino Mirror, the only tabloid in the country that its readers can take to church without scandalizing anybody.

(Incidentally, ALC has also just assumed the chairmanship of RPN 9.)

But even as an octogenarian, ALC continues to indulge what may be called one of his few weaknesses. He likes to go on weekend trips to Bangkok, Kuala Lumpur, Tokyo or Hong Kong with no other purpose than to indulge a craving for the exotic dishes available in those Asian capitals.

Amazingly, he is in the pink of health.

He unfailingly sweats it out for 90 minutes on his treadmill every morning.

That’s why his vital signs are the envy of much younger business executives who, due to the heavy pressures of work, prematurely acquire all sorts of “rich people’s diseases,” such as high blood pressure, diabetes, liver cirrhosis and heart ailments.

In short, he does not have any dietary restriction.

Hong Kong used to be his favorite weekend destination before the current Occupy Central protests effectively shut it down for tourists. It is in this former British colony that he can conveniently find scallops or soft-shelled hairy crabs prepared in a very special way—on Lamma Island, just 20 minutes away by ferryboat.

If you hanker for Peking duck, he knows exactly which little restaurant at the Kowloon side prepares it better than the finest restaurants in Peking (Beijing) itself.

(I know these bits of trivia because I’ve kept him company in one such trip, which proved too rich for my blood.)

Big mistake AND now, this is what happened when he made the mistake of choosing Cathay Pacific to take him and a companion to Hong Kong on September 26 for yet another culinary adventure: In a nutshell, he had confirmed business-class bookings for two round-trip tickets to Hong Kong for September 26 (to Hong Kong) and September 29 (to Manila).

For these business-class round-trip bookings, he paid a total of $1,958.58, including taxes and surcharges. The booking reference number was 3C3LDB. However, when they reached the airport on September 26 to check in,

they were told that their business-class bookings were “unjustifiably downgraded” into “premium economy.”

In airline-speak, premium economy merely means they would be seated in the first three rows of the economy-class section. They were issued two premiumeconomy boarding passes as if this was an important distinction.

In his formal demand letter, Oco said: “The only explanation your checkin clerk could give was that all seats in the assigned flight were classified as economy class.”

Pointing out that the ambassador and his companion could have been warned earlier that the flight didn’t have a separate section for business-class passengers, “they could have chosen another flight or airline.”

When the ambassador protested the unexpected downgrading, he was assured that Cathay Pacific would refund a total of $1,420, representing the big difference between economy and businessclass fares. For two economy tickets, the fares amounted to only $538.56.

So as not to spoil his trip, he didn’t say anything further and waited for the airline representative who was supposed to bring the refund.

“However,” Oco wrote, “instead of apologizing for all the hassles and to add insult to injury, your representative attempted to make our client sign a document without telling our client what the document was about. Fortunately, our client read the document, which turned out to be a quit-claim or waiver, in exchange for which our client would be paid P3,000.

(Incidentally, two Filipino lawmakers who were, likewise, downgraded to economy class also wanted to complain, but it was too late. They had signed the quit claims and received P3,000 each as compensation. They were, of course, furious.)

“There was also an attempt on the part of your representative to get the boarding passes they issued to the ambassador and his companion,” Oco added.

“Clearly, your company acted maliciously, fraudulently and in bad faith, in dealing with our client.

“First of all, your airline advertised that the flight to be taken by our client would have business-class accommodations—for which our client paid, in full,

Honoring outstanding teachers

Metrobank Foundation’s annual search for the best Filipino teachers has since developed into the most prestigious of its kind in the country.

More than 300 teachers have been recognized for their competence, dedication and leadership since the search began in 1984.

In 2008 Bro. Armin Luistro, FSC, then-president of De La Salle Philippines and now education secretary, and Metrobank Foundation President Aniceto “Chito” Sobrepeña spearheaded a National Teachers Month campaign, whose overarching advocacy was to get people to recognize the teacher’s invaluable role.

In 2011, at the initiative of Luistro and Sobrepeña, President Aquino issued Presidential Proclamation 242, declaring September 5 to October 5 of every year as National Teachers Month to coincide with World Teachers’ Day. What started as Ty’s idea has evolved into a national celebration and recognition of teachers, whose vocation is widely considered as one

geographic position, along the so-called Ring of Fire. But it’s also a timely reminder that the country is more blessed than cursed when it comes to natural resources. As China and India choke on fossil fuels, Japan possesses an enviable mix of water, wind and, most important, geothermal resources to fulfill its energy needs.

Just ask Abe’s one-time mentor Junichiro Koizumi, who, last week, stepped up his campaign to end Japan’s addiction to nuclear power. “Even experts say they never expected Mount Ontake to erupt,” the former prime minister told reporters on September 29. “Earthquakes, tsunamis and eruptions occur all over Japan, so it must not have nuclear power plants.”

Mount Ontake obliterated the nuclear lobby’s argument that seismic sensors and global-positioning technology can predict eruptions that may threaten reactors. This one came out of nowhere—like a huge bolt of lightning, survivors say. Even if we knew that one

of Japan’s other 100-plus active volcanoes was about to blow, Tokyo Electric Power Co. or Kyushu Electric Power Co. can’t move reactors or toss huge protective domes over them. All that Japanese authorities could do is evacuate surrounding areas to lop a zero or two off death-toll figures.

It’s time that Japan started heeding the advice of environmentalists like David Suzuki to go geothermal. In 2012 the Canadian geneticist and author joined the board of the Japan Renewable Energy Foundation at the urging of Softbank founder Masayoshi Son (who has been investing big in renewable-energy [RE] projects). Since then, Suzuki has rarely missed an opportunity to try and shame Tokyo into scrapping its reactors.

“Geothermal can be a huge source of energy and very quickly,” Suzuki told Bloomberg News in March 2013, on the second anniversary of the meltdown at Fukushima. “It is an opportunity being squandered in the drive to get the reactors up and running again.”

Back in 2012 Japan began talking big about an RE push. In a report that year, Bloomberg New Energy Finance said Japan had 539 megawatts (MW) of geothermal capacity operating, amounting to just a quarter of wind and roughly 14 times less than solar. In May 2012 the Washington-based Geothermal Energy Association said Japan could produce 23,000 MW of geothermal power. And then, in December 2012, Abe’s Liberal Democratic Party (LDP) returned to power. So did Japan’s single-minded focus on nuclear reactors.

Geothermal is a relatively steady source of energy that doesn’t fluctuate like wind or solar, and the means to tap it are readily available. The roadblock is money, period. What the corrupt nexus of defense contractors and government is to America, the nuclear industry is to Japan. The nation’s gargantuan investments in reactors and related business sectors have created powerful vested interests that make the country’s farm lobby seem quaint. Further bolstering

Edgardo J. Angara

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HEN I was president of the University of the Philippines (UP), George Ty of the Metropolitan Bank and Trust Co. (Metrobank) sought my advice on instituting a recognition awards for teachers. I got then-Dean Paz Ramos of the UP College of Education to brainstorm on it; the Metrobank Foundation Search for Outstanding Teachers was the outcome.

A7

upon receipt of [the] confirmed booking.

“Second, our client was not given any justifiable reason for being bumped off the business-class section. Our client had [the] confirmed business-class tickets in his possession, so the claim that all seats in the flight were classified as economy doesn’t hold water.

“Finally, the underhanded attempt … to deceive our client into signing a quitclaim in exchange for the paltry sum of P3,000, plus the belated attempt to retrieve the economy boarding passes, bespoke of your airline’s low regard for our client.”

Like inanimate freight BY way of background, it is important to know that Cathay Pacific is reputed to be the world’s largest air-freight carrier.

Perhaps, that’s why it treats its passengers like inanimate freight, incapable of complaining or talking back.

But as far as the ambassador is concerned, the whole unfortunate incident would not have mattered much if the airline did not try to pull a fast one by making him sign the quit-claim. It was very insulting, to say the least.

But honest and straightforward dealing with its clientele is definitely not one of the airline’s strong suits.

Readers will recall that, in December 2012, the Hong Kong-based airline was made to pay A$11.75 million by the Federal Court of Australia after it was found guilty in a cargo price-fixing case. The complainant was the Australian Competition and Consumer Commission.

Also that year, Cathay Pacific was subject to proceedings in the United States, the European Union (EU) and South Korea “for its role in a global air-cargo cartel, which has kept fuel surcharges and other surcharges undifferentiated when the airlines moved cargo to and from those places in the past.”

Cathay Pacific appealed to the EU General Court against the EC decision to impose a fine of €57 million (HK$577.5 million). The EC had fined the airline, in particular, a total of €800 million in 2010 for “fixing the fuel surcharge, security surcharge and rates on air cargo among themselves (a total of 11 airlines in the cartel).

E-mail: omerta_bdc@yahoo.com.

of the noblest.

This year officials of public and private schools everywhere came up with activities to celebrate National Teachers Month. Students and alumni have demonstrated their gratitude for their teachers, from whom they imbibed moral values and gained knowledge.

Teachers undoubtedly help mold us into the persons we are today.

They deserve undying thanks for the exemplary role they’ve played in our growth and development, as well as in our children’s. National Teachers Month may have officially ended on Sunday, but its main sentiment remains with us the whole year round.

this institutional aversion to renewables is one of the key pillars of Abenomics— cheap domestic energy and tax revenues from nuclear-technology sales abroad.

Yet, as Koizumi argues, a greenenergy revolution would do for Japan what quantitative easing, a weak yen and fiscal pump-priming can’t: create a new economic ecosystem that generates jobs, wealth and global esteem. Japanese celebrate their outdoor bathing culture, one fueled by an abundance of geologically active hot springs. And, yet, efforts to harness those huge underground energy reserves to produce electricity remain few and far between.

If Abe’s LDP had invested some of the billions it’s squandering on the 2020 Tokyo Olympics on supporting a renewables boom, Japan’s future would be a brighter and more vibrant one. Instead, the prime minister is doubling down on old-economy reactors that are increasingly at risk from nature’s wrath. The eruption at Mount Ontake is a chance for Japan change course.

E-mail: angara.ed@gmail.com.

2nd Front Page BusinessMirror

A8 Tuesday, October 7, 2014

Moody’s: Manufacturing sector sustained solid growth in Aug

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By Bianca Cuaresma

he country’s manufacturing sector was seen posting continued solid growth in August this year as domestic demand improves, the research arm of an international credit-rating agency said.

Moody’s Analytics said in its weekly Asia-Pacific Economic Data Preview that industrial production in the country may have grown by

11 percent in August, up from the 9.6 percent the previous month.

The Philippine Statistics Authority (PSA) is scheduled to release the

actual manufacturing data for the period on October 10.

“Philippine manufacturing continues to grow solidly. Domestic demand has recovered since last year’s typhoon, and export demand continued to improve through the third quarter,” Moody’s Analytics said.

“Solid private-sector investment will continue to support production,” it added. The manufacturing sector was a recent highlight at the Philippine Mid-Year Economic Briefing hosted by the country’s economic managers, saying the sector was one of the key growth drivers having helped ramp up not only Philippine products

but offered employment opportunities to the work force, as well.

Officials have also said the percentage share of manufacturing to the country’s gross domestic product (GDP) has been rising the past few years.

In particular, manufacturing has a 22.6-percent share to the country’s GDP in the second quarter, up from the 21.7 percent the previous year.

The sector also accounted for 2.3 million jobs last year, up by 1.5 percent from employment opportunities in manufacturing last year.

Trade Undersecretary Adrian

Cristobal said at the briefing that with sustained government finance programs and technical assistance to the sector, the manufacturing industry was expected to generate even more jobs in the years ahead.

The rise in manufacturing numbers last month was attributed to improved production of printing, fabricated metal products, leather, beverage and machinery.

Firms also indicated continued rise in the manufacturing sector, especially toward the end of the year, as demand rises leading to a higher volume of production.

THINK TANK: PETILLA HAS DOUBTS ON I.L.P.

By Lenie Lectura First of two parts

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EW York-based market research firm Global Source Partners Inc. said Energy Secretary Carlos Jericho L. Petilla appears “less confident” that the Interruptible Load Program (ILP) alone can help address the power shortage next year.

The think tank particularly observed the ILP is voluntary.

Also, there have not been enough incentives seen extended to the program’s participants.

Under the ILP, customers with large loads, like commercial establishments, will be asked to operate their own generator sets if the grid operator anticipates a need to augment generation capacity in the Luzon grid. Through this, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply during the season.

With the ILP, power supply from the grid that will not be consumed by participating customers will be available for use by other customers within the franchise area.

Targeted ILP participants are those with large embedded generation capacities, such as malls, large business establishments, and factories.

“There is now a tug-of-war between private players and the energy department over the best option for filling the forecast 600-megawatt [MW] deficit. The former believes that a well-managed ILP that aggregates private companies’ selfgenerating capacities, together with energy-conservation measures and more prudent plant management [including plant rehabilitation and scheduling of maintenance shutdowns], will be enough to close the gap. So far, commitments to the ILP are less than 150 MW, about a tenth of available capacity, but the business sector is hopeful that with the government providing the proper incentive framework, more will sign

up,” Global Source Partners said.

What Petilla likely prefers is for the government to contract additional capacity to guarantee adequate supply and this could be done only if Congress grants President Aquino the emergency powers to do so.

The request for such powers is pending before Congress and the Senate. While there is uncertainty if such will be granted, the Department of Energy (DOE) is pushing for ILP and probably a mandatory implementation of energy-saving measures for both the government and the private sector, among others.

“We are keenly following three things now on Congress’s plate given their crucial role in keeping confidence and economic growth up in the very short term, as well as over the longer haul. The more immediate one is the President’s request for emergency powers to address a forecast shortage in electricity supply in the Luzon grid next summer.

There is some urgency to this, and we expect a favorable joint resolution from Congress, likely within the month. However, the burning issue is not whether or not emergency powers will be granted but what those powers will be,”Global Source noted.

Petilla had recommended to the President to invoke Section 71 of the Electric Power Industry Reform Act of 2001 (Epira-2001) granting the head of state, emergency powers, to resolve the power situation in 2015.

Invoking the power of Section 71 of the Epira would accelerate the efforts of the government to provide additional power supply to the grid and avoid possible power shortages or blackouts next year.

Epira prohibits the government from putting up power pants. However, Section 71 of the said law states that the President, upon determination of an imminent shortage of supply of electricity, may ask Congress for authority through a joint resolution, to establish additional generating capacity under such terms and conditions may approve.

Continued on A2

www.businessmirror.com.ph

‘China’s slumping economy to drag down East Asia’ Continued from A1

competitiveness,” Sudhir Shetty, the World Bank’s East Asia and Pacific chief economist, said in a statement.

Growth in the region, excluding China, is expected to accelerate to 5.3 percent in 2015 from 4.8 percent this year as a gradual recovery in high-income economies boosts demand for its exports, and domestic economic reforms advance in the large Southeast Asian economies, the World Bank said.

It raised its forecast for Malaysia’s 2014 growth to 5.7 percent from 4.9 percent in April because of robust exports in the first half, it said. The surge in shipments helped growth in the economy unexpectedly accelerate to the fastest pace in six quarters in the three months through June from a year earlier.

China’s growth is expected to slow as the government implements policies to address financial vulnerabilities and structural constraints, the World Bank said. Bloomberg News

Daang Hari-Slex

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Feast of Sacrifice Filipino Muslims attend an early-morning prayer to mark Eid’l Adha, or Feast of Sacrifice, one of the most important holidays on the Islamic calendar, on Saturday at the Blue Mosque in Taguig City. Muslims around the world mark Eid’l Adha by slaughtering goats, sheep, cattle and other livestock, and partake most of them with the poor. AP

continued from a1

“We would like to see that gap as little as possible. Hopefully, the gap from the opening of the expressway and the commercial operations would not be too long, we have to recover the investment, too,” Francia stressed.

The Daang Hari-Slex project was the first public-private partnership (PPP) project auctioned off and awarded under the flagship infrastructure program of the Aquino administration. The project starts from the junction of Daang Reyna and Daang Hari in Las Piñas/Bacoor in Cavite to Slex through the Susana Heights Interchange in Muntinlupa, traversing the New Bilibid Prisons Reservation.

Under the initial design, the proposed link-road will use the Susana Heights Interchange as exit and entry from north and south of Slex and will include the construction of a new bridge/widening of the existing bridge crossing Slex, as well as the expansion of the Susana Heights toll plaza.

Ayala bagged the 30-year concession contract in 2011. The project is being implemented by the public works agency under a Build-TransferOperate scheme.

‘Real-estate sector could see downturn in the near future’

By Cai U. Ordinario

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he Philippines’s real-estate sector may suffer from a decline in demand in the near term, according to the World Bank.

In the East Asia Pacific Update, the World Bank said the likely major source of the projected decline was weak overseas Filipino worker (OFW) remittance inflows.

“This source of demand could decrease if a slow global recovery were associated with weak remittance inflows. In addition, in Malaysia, the Philippines and Thailand, prices in high-end markets [such as the luxury market in Manila] are relatively more likely to deviate from fundamentals, and could therefore see some adjustment even in the absence of major external shocks,” the World Bank said.

The World Bank explained that the Philippines, Malaysia and other countries in the East Asia and the Pacific region have recently experienced sharp increases in real-estate prices. However, the bank explained that while these may have been fueled by high demand, not all these were fueled by stable sources such as income, population growth and employment.

The Philippines’s weak spot in real estate, the bank said, is that about 40 percent of new housing units in the country are financed by OFWs. “Where housing price growth is mainly driven by rapid credit expansion, for instance linked to loose monetary policy or easily reversed portfolio capital inflows, the economy may be more exposed to the risk of an abrupt downturn,” the bank explained.

The slowdown in the real-estate sector could also affect allied industries such as construction and building materials.

It can be noted that private consumption continues to drive the country’s economic growth. This was supported by remittances that reached $12.7 billion, or 4.7 percent, of the country’s gross domestic product (GDP) in the January-toJune 2014 period.

Remittance flows account for 10 percent of the Philippines’s annual GDP, while remittances in larger countries like China and Indonesia only account for a percent of GDP. “Annual remittances are equivalent to half of foreign-exchange reserves in Vietnam and more than 71 percent of reserves in the Philippines,” the World Bank said. “In the Philippines, there is also evidence of

significantly higher investment in housing among remittance-receiving households.” But the Washingtonbased lender was quick to point out that the Philippines’s monetary authorities have been prudent and imposed stricter capital requirements for real-estate lending such as the one implemented in July 2014.

It added that stress tests were also ordered by the Bangko Sentral ng Pilipinas on bank loans extended to the real-estate sector with an assumed 25-percent write-off on sectoral exposures.

In 2013 the World Bank said that while many OFWs and businessprocess outsourcing firms were buying real-estate properties, they were exposed to external risks such as the slowing global growth, which could impact on real-estate sales in See “Real-estate,” A2