Businessmirror 10 22 2014

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ebola’s economic fallout persists in rising africa The World BusinessMirror

Ebola’s economic fallout persists in rising Africa

Wednesday, October 22, 2014 B3-3

commuters, some are wearing masks to protect themselves from pollutants, ride on a bus on a hazy day in Beijing, china, on monday. AP/AnDy Wong

China’s leaders oppose $2-T megacity dividend

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A medicAl worker sprays people being discharged from the island clinic ebola treatment center in monrovia, liberia. AP/Jerome DelAy

By Matthew Campbell, Chris Kay & Pauline Bax | Bloomberg

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bola’s economic effects in africa are proving hard to quarantine even in the 49 of 54 countries that are untouched by the virus.

Corporate events are being canceled, international investors are declining to visit and multinationals are on high alert.

The International Monetary Fund (IMF) on Sunday cut its forecast for economic growth in sub-Saharan Africa this year to 5 percent from 5.5 percent, due in part to “economic spillovers starting to materialize” from the outbreak.

The ripple effects present a fresh challenge to Africa’s economic progress, which is heavily dependent on foreign investment and vulnerable to even slight shocks.

Business and political leaders say the virus is making overseas partners nervous and in some cases hurting bottom lines.

“The investors generally have all been concerned,” said Peter Sullivan, CEO of Australia’s Resolute Mining Ltd., which mines for gold in Mali, bordering Ebola-stricken Guinea.

“For some of them, what you find is a degree of speculation on you being impacted significantly as a result of any outbreak.”

No country has felt the psychological impact of the disease more than Nigeria, Africa’s most populous nation. With a gross domestic product (GDP) of more than $500 billion, it registered 20 cases and eight deaths.

Although Nigeria was declared Ebola-free on Monday by the World Health Organization (WHO), with no new cases since September 8, the stigma lingers.

Event canceled

THE Bobby Taylor Co. a Lagos-based communications firm, had to cancel an event for about 150 music aficionados from the US, Nigeria and South Africa late last month over Ebola fears.

“Lagos being Ebola-free is definitely something we can boast about but there’s still that twang of concern for people, the stigma that comes with us getting it in the first place,” CEO Bukky Karibi-Whyte said.

“How do you really convince someone that the disease won’t touch them?”

Ebola’s effects have reached the pinnacle of Nigeria’s corporate world, which is seeking international investment to refurbish ports, build

power plants and erect waterfront skyscrapers for Lagos’s burgeoning upper classes.

Dangote Group, the Lagos-based business empire controlled by billionaire Aliko Dangote, last month scrapped a planned visit by international investors to cement and sugar factories in and around the city. Some had said they were worried about Ebola. The trip hasn’t been rescheduled.

Dangote declined further comment.

Lengthy recovery

MANy overseas organizations “fail to distinguish between high and low risk areas and the whole of West Africa has suffered as a result,” said Charles Laurie, the head of Africa at Bath, England-based risk consulting firm Maplecroft.

For that reason, he said, “economic recovery for the region will, in all likelihood, be a lengthy process.”

The three countries still battling the virus—Guinea, Sierra Leone and Liberia—together have a GDP smaller than Afghanistan’s and are crowded together in the far western edge of the 4,500-mile-wide continent. That may not stop investors unfamiliar with the diversity of Africa’s 54 distinct countries from responding disproportionately to negative news.

“Psychology plays a huge role and this has taken on a life of its own,” said Michael Marshall, whose Atago Pacific Partners advises on investments in sub-Saharan Africa. “Our long-term investment is not interrupted. The numbers, demographics and all the things that have made Africa compelling are still the case.”

Worst-hit region

IN the short term, the damage is being felt both next door to the worst-hit region and further afield, the World Bank said in a report this month trying to quantify the overall economic impact of the epidemic.

Senegal, which the WHO last week said was Ebola-free, and Ivory Coast, which has had no cases, are losing trade by closing their borders with affected countries, for instance.

In Gambia, a tourist-dependent nation of picturesque beaches and palm trees surrounded by Senegal, hotel bookings are down by 65

percent due to fear of the virus, the report said.

Gambia’s geographic misfortune: being located within a few hundred kilometers of Senegal’s border with Guinea.

In Lagos, a metropolis of more than 20 million, early reports from malls and shops “indicate significant recent declines in demand, sometimes in the range of 20 percent to 40 percent,” the Washington-based lender said.

All told, the bank estimates, a worst-case Ebola scenario could knock about $33 billion off of the region’s GDP, an estimated $750 billion for 2014, by the end of next year.

Tapping brakes

EBOLA fears are “tapping the brakes” for some businesspeople considering African projects, said Bobby Pittman, who advised US president George W. Bush on African issues and now works as an investor based in Washington.

Some outsiders have a less-thaninformed approach to the risks; Pittman said he recently received an e-mail urging him to watch out for the virus on a planned trip to Johannesburg—which is about as far from Liberia as New york is from Paris and has never recorded a case.

“I said to them, ‘In Washington you may be closer to Ebola than I am,’” Pittman said.

Africa’s economic boom is unlikely to take a significant hit even after the largest-ever outbreak of a fearsome disease. Thanks to resource projects, gradually improving infrastructure and the demographic dividend of a growing population, subSaharan Africa has vied with Asia to lead the world in growth over the last decade.

Positive news

THE combined economy of the region will grow by 5.8 percent next year, with Nigeria, Zambia, and Tanzania expanding by 7 percent or more, the IMF said on Sunday, and there is no shortage of positive investment news.

Intercontinental Hotels Group is developing six new African hotels, to add to 27 already in operation, while rival Marriott International Inc. works to integrate Protea Hotels, a South African-based chain with 116 hotels across the continent it bought for $196 million last year.

Both companies—neither has hotels in the three affected countries—said via spokesmen that they were monitoring the Ebola situation carefully.

An 1,800-mile rail link between Rwanda and the Kenyan port city of Mombasa, now under construc-

tion, will also connect landlocked Uganda to global markets. Dams for hydroelectric power are being built in Ethiopia and proposed for Congo and Mozambique.

Don’t understand

AT African Alliance, an investment bank focused on the region, “we continue to take clients all over the continent and we’re still very busy with that,” New york-based Executive Ashley Bendell said.

“People who don’t know Africa don’t really understand the implications of the outbreak and think it’s a major threat to the whole continent.”

Companies with factories in West Africa are trying to prevent that.

Nestlé SA, the world’s largest food producer, has sharply limited employee travel to the affected region and said its operations are “on high alert” for the disease.

Spirits manufacturer Diageo Plc. and brewer SABMiller Plc. are telling employees at facilities in Nigeria and Ghana to watch out for and report any Ebola symptoms.

The best course of action for companies is “to continue with what you do there, which is to create stability,” Nestlé CEO Paul Bulcke, whose company operates in Ivory Coast, Ghana and Nigeria, said in an interview. “If all of a sudden you close all factories in Africa, that would cause more panic.”

Greater effect

THE virus is having a greater effect on home-grown African businesses that have sought to develop West Africa as an important market.

At Kenya Airways, which depends in part on West African travelers to feed its Nairobi hub, annual sales may slide as much as 4 percent this year after it pulled out of Liberia and Sierra Leone, CEO Mbuvi Ngunze said October 15.

MTN Group Ltd., Africa’s largest mobile provider, can’t just pick up and leave. To keep its network running in affected parts of West Africa, the company is equipping maintenance staff with protective suits for their visits to some cellular base stations.

At headquarters in Johannesburg, life continues as normal, with some exceptions.

When this month MTN held one of its regular corporate affairs forums for senior staff from around the group, the crowd was slightly smaller than normal.

Two executives from Guinea and Liberia were missing.

The reason: because the company, wary of the risk of infection and following government guidelines, had asked them not to come.

HINA needs a new prescription for growth: Cram even more people into the pollution-ridden megacities of Beijing, Shanghai, Guangzhou and Shenzhen.

While this may sound like a recipe for disaster, failing to expand and improve these urban areas could be even worse. That’s because the biggest cities drive innovation and specialization, with easier-to-reach consumers and more cost-efficient public transport systems, according to yukon Huang, a former World Bank chief in China.

He estimates China’s leaders’ sevenmonth-old urbanization blueprint, which aims to funnel rural migrants to smaller cities, will slice as much as a percentage point off gross domestic product (GDP) growth annually through the end of 2020.

“China’s big cities are actually too small,” said Huang, a senior associate at the Carnegie Endowment for International Peace’s Asia program in Washington. “If China wants to grow at 7 percent for the rest of this decade, it’s got to find another 1 percentage to 1.5 percentage points of productivity from somewhere.”

A strategy that supports the biggest cities’ expansion would add $2 trillion to China’s output in 10 years—more than India’s 2013 GDP—according to Shanghai-based Andy Xie, a former Morgan Stanley chief Asia-Pacific economist.

With a population more than four times that of the US living on roughly the same land mass, China should have big, densely populated urban areas, Xie said. To make that a reality, the megacities need to build up, not out, he added, citing Tokyo and its population of about 37 million as a workable example.

‘Ecological catastrophe’ “IF you do not focus on big cities with concentrated populations, China will become an ecological catastrophe,” he said. “If you pick the wrong model of urbanization, it sets you back not just for years, it could cap your income level for eternity.”

Beijing and Shanghai already have about 20 million people each, while Guangzhou and Shenzhen both top 10 million. Even so, given China’s 1.4 billion population, their concentration is low by global standards.

In the US, the largest 10 metropolitan areas account for about 38 percent of GDP, about double that in China.

Echoing Mao-era central planning, China’s current urbanization policy decrees that populations will be “strictly controlled” in metropolises with more than 5 million people, while expansion is allowed in mid-sized cities and encouraged in small ones.

The plan will redress unbalanced development that has left megacities overburdened, with deteriorating environments, Vice Minister of Public Security Huang Ming said at a March briefing.

‘Old thinking’ THE edict shows the “persistence of old thinking” even after past attempts to shift people and resources to smaller, less productive cities proved “hugely wasteful,” Andrew Batson, an analyst at researcher Gavekal Dragonomics in Beijing, wrote in an August note.

“Planners still seem convinced that big cities are crowded, terrible places whose growth must be controlled,” wrote Batson, who has covered China since 1998. “In reality, big cities are China’s richest and most vibrant places, and restraining their growth does the economy no favors.”

Premier Li Keqiang is under increasing pressure to boost the economy, which

is headed this year for its slowest expansion since 1990. Growth probably fell to 7.2 percent in the third quarter from 7.8 percent a year earlier, according to the median estimate of analysts in a Bloomberg News survey.

Fourth plenum WHILE Li and his fellow Communist leaders have the chance to shift policy priorities when they gather for the fourth plenum that started in Beijing on Tuesday, any major rethink on urbanization is unlikely. The conclave will focus on efforts to bolster the rule of law, state media reported last month.

The pace of migration from rural areas to cities, a dynamic hailed by Li as key to the nation’s development, is set to slow by a third in the years from 2013 to 2020 compared with the previous seven years, the government forecasts.

That’s pressuring Li to find ways to optimize productivity. The rapid expansion of China’s cities hasn’t been accompanied by efficiency gains because of impediments, including urban sprawl and inadequate infrastructure, according to Cui Li, a Hong Kong-based economist at Goldman Sachs Group Inc. Achieving the same efficiencies as US cities, which are modest compared to those in more compact European metropolises, could add 1 percentage point to annual growth by the end of the decade, she estimates.

Guangzhou, Shenzhen AN additional 4.2 million people can be added to Guangzhou and 5.3 million to Shenzhen if those cities had the same population density as Seoul, according to a March report by the World Bank and the State Council’s Development Research Center.

Making changes to land use that would spur denser cities could save China $1.4 trillion from a projected $5.3 trillion in infrastructure-spending needs during the next 15 years, World Bank COO Sri Mulyani Indrawati said.

There are signs of progress.

A bus rapid-transit system that opened in Guangzhou in 2010 has saved passengers a combined 32 million commuting hours a year and is projected to reduce carbon-dioxide emissions by 84,000 tons in its first decade of operation, the United Nations estimates.

In Kunming, capital of southwestern yunnan province, a new district is being developed with a subway system, bus stations and green spaces planned every 300 meters.

Cleaner skies BUILDING dense cities around masstransit systems that balance commercial and residential areas would slash reliance on cars, according to the Energy Foundation, a San Francisco-based nonprofit organization that promotes clean energy.

That would prevent as much as 800 million tons of carbon dioxide from spewing into the atmosphere by 2030, more than emitted by Germany in 2011, it estimates. A continuation of old methods raises the specter of worsening traffic congestion and pollution in the biggest cities if migration continues to outpace policy-makers’ plans.

“For the last two to three decades, China’s city planning has not taken migrants into account in their plans for transport, housing and many social services,” said Kam Wing Chan, a professor at the University of Washington in Seattle and author of Cities With Invisible Walls: Reinterpreting Urbanization in Post1949 China. Urban problems including traffic gridlock “are mainly a result of not providing for population growth,” he said. Bloomberg News

world

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‘which colors would you like, luv?’

Any person

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EAR Lord, teach us that if we look at any person, we remember that each one has a story. A story that each one had been through. Something that made each one, something that shaped each one, something that changed each one like the way we are changed. We pray that any person can change for the better in God’s grace and love.

Amen.

YETTA L. CRUZ AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

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

Life

THE Sony Xperia Z3

>>

CAN WHISPER, AN APP D2 FOR ANONYMOUS CONFESSIONS, PROTECT USERS’ IDENTITIES?

BusinessMirror

Wednesday, October 22, 2014

D1

T is simply the best Android smartphone on the market at the moment.” And so goes the summary of Engadget.com Associate Editor Jamie Rigg’s review of the Sony Xperia Z3 Compact—also referred to as the Xperia Z3C, which is part of the surprisingly beefed-up Xperia family of mobile communications/productivity devices that Sony Philippines unveiled on October 14 at a midday event in posh Century City Mall in Makati City.

We say “surprisingly” because not only does this latest collection of Xperia products carry the usual suspects of sexy, cutting-edge smartphones targeted at markets that go from the mid-range to the high-end, but also an unexpected tablet (the Xperia Z3 Tablet Compact with a stunning 8-inch display), SmartWear offerings (the downright exciting SmartBand Talk that Dick Tracy would have loved, and the SmartWatch 3), plus a gaggle of accessories that easily turn your Xperia smartphone into a professional-grade DSLR camera (Smartphone Attachable Lens-style Camera DSCQX100), or a kick-ass PlayStation 4 remote player (the trifecta of Xperia smartphone, DualShock4 wireless controller and Game Control Mount GCM10), plus lots of wireless state-of-the-art speakers, headphones and charging docks.

Of course, the attention-grabber at the launch was the Xperia Z3, which is a fabulous refinement over its predecessors with edges and corners that are softer and just a tad rounder, a 5.2” Full HD display with even more exceptional viewing angles, and even more color choices (white, black, copper or silver green).

Now, which colors would you like, luv?

That said, the Xperia Z3 Compact (available in orange and green, in addition to the classic white and black) garnered its share of fans during the recent reveal—and with good reason.

Unlike rival smartphone vendors’ smaller “mini” iterations of their flagships, which are not just smaller in size but also considerably lesser in performance, the Z3C is identical to its bigger sibling in almost every way but the screen size.

Of course, this means the Z3C is as much a powerhouse as the flagship Xperia Z3: integrated Qualcomm Snapdragon 801 processor with 2.5 GHz quad-core CPU with 4G LTE modem, 20.7-megapixel camera with 1/2.3” “Exmor RS for mobile” image sensor, new 25 millimeter “G Lens” and ISO 12800 sensitivity—a first for smartphones—for superior photos even in low-light conditions, and a battery life that Sony claims (and early reviews buttress) powers the Z3 and the Z3 Compact for up to two days with typical use—two days, and that’s even with the excellent power-saving Battery Stamina Mode off.

“At Sony Mobile, ‘flagship’ now means offering a choice to consumers of enjoying a large-screen Xperia Z3 for immersive entertainment, or the more compact, lighter Xperia Z3 Compact that doesn’t ask you to

compromise on features,” says Vince de la Cruz, Sony Philippines manager for mobile communications.

“Consumers demand and deserve greatness from their smartphone—in design, camera and battery life. That’s precisely what we aim to deliver with Xperia Z3 and Xperia Z3 Compact, at the same time as delivering leading innovations such as unique Sony camera experiences and, for the first time, PS4 Remote Play in two beautifully designed, fully waterproof smartphones.”

You don’t get a similar range of color choices with the Sony Xperia Z3 Tablet Compact—but that doesn’t diminish the lust factor of this tablet.

Impossibly slim, astonishingly light and exquisitely crafted—Xperia Z3 Tablet Compact is a design sensation. At just 6.4mm slim, its compact design is perfect for those on the go, while advanced Sony technology ensures you don’t have to compromise on power. Weighing just 270 grams, the ultra-portable tablet feels weightless in your hand.

Created using the highest quality materials, its clean lines and uniquely designed power button capture Sony’s exquisite attention to detail. Stainless steel corners, an ultra slim rounded frame and a tempered glass front give an elegant and durable finish.

Even more compelling, Sony’s passion for perfection takes the design of this compact tablet even further— adding market-leading waterproofing to beauty. The IP65/68 rating means you won’t ever have to worry about water or dust getting in the way of performance. Take your tablet poolside, find your way in the rain, and keep scrolling through your recipe next to the kitchen sink.

Wet conditions are no problem, and other compact tablets are officially blown out of the water.

There’s much more to write about the latest and totally exciting additions to Sony’s Xperia family of mobile and wearable devices and accessories, and we’ll do just that as soon as we get to take a product or three for a spin.

Meanwhile, Sony Philippines has launched an early Christmas campaign that encourages Filipinos to create and share random acts of kindness to move Filipinos to spread the Christmas cheer this season.

Entitled as “Loud and Clear,” the social-media campaign calls for netizens to capture and upload photos or videos on any social-media platform (Facebook, Twitter or Instagram) that show how they or other people make family, friends, or even strangers happy with a small or big gesture.

Running from October 24, 2014 to January 25, 2015, the campaign requires netizens to use the hashtag #PassTheCheer and tag @SonyPHInc for Instagram and Twitter and @SonyPhilippines for Facebook to qualify in the promo.

Every month from October to January, two winners will be randomly selected to bag exciting surprises and gadgets from Sony.

Know more at www.facebook.com/SonyPhilippines. ■

life

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Rest or rust?

Sports BusinessMirror

C1 | Wednesday, October 22, 2014 • Editor: Jun Lomibao mirror_sports@yahoo.com.ph • sports@businessmirror.com.ph

THE Royals’ Alex Gordon throws during practice on Monday in Kansas City. AP

GoinG into Game one on tuesday niGht at Kauffman stadium, both teams will deal with a familiar issue this deep in the postseason: does an extended layoff translate into rest or rust?

By Ben Walker The Associated Press

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five years. Lorenzo Cain and the Royals zoomed along, reaching the Series for the first time since 1985.

And then, they all got some time off. Almost an eternity, by October standards.

The Royals went 8-0 in the American League (AL) playoffs, giving them five idle days before Shields starts the opener. San Francisco went 8-2 on the National League (NL) side and had four days to relax before Madison Bumgarner pitches.

“It’s definitely different because we have played so many games over the last seven-anda-half, eight months. But you just understand it’s one of those things,” Posey said.

As recent history has shown, hitters can be very vulnerable

when they get out of rhythm.

“It affects a bit with your timing, especially when trying to adjust to pitchers,” Kansas City second baseman Omar Infante said.

“It’s hard to recover that groove you have.”

The slightly favored Giants and Royals held practices, studied video and checked out scouting reports. But as several teams that stumbled in the World Series after long breaks discovered, nothing can duplicate playing a real game.

Triple Crown winner Miguel Cabrera and Detroit got nearly a week off in 2012, then the Tigers hit a combined .159 and totaled six runs in getting swept by the Giants.

Troy Tulowitzki and the Colorado Rockies rushed into the 2007 World Series, waited a week and got

outscored 29-10 in Boston’s sweep.

A year earlier, Magglio Ordonez and the Tigers looked so powerful in the playoffs, but fell apart a week later and hit only .199 in a five-game loss to St. Louis.

Infante played on both of those Detroit teams that got wiped out. He actually excelled in 2012, hitting .333.

“It’s a short series, you need some luck. We lost four in a row and they were coming from playing seven. In this series, I think both teams are even,” he said.

Royals reserve Raul Ibanez, who’s enjoyed postseason success in the past, said “determination and will” carry players in the fall.

Yet, the timing and confidence that lifts them for so long can be lost in a hurry.

All of a sudden, a ball that might’ve been a solid double becomes a soft fly. A line drive up the middle turns into a foul ball straight back. A big hit winds up a great catch.

Just like that, a magical touch is missing, and can’t be recaptured until it’s too late.

Royals catcher Salvador Perez hooted at himself after a popup and an easy grounder in BP on Monday, and changed bats for his next round.

He homered on his final swing.

“When you’ve been playing for seven or eight months, it’s nice to have an off day every now and then. But when you do have those workout days where you just go in and hit BP and take grounders and stuff, you try to keep it as much like game day as possible,” Giants

first baseman Brandon Belt said.

Royals designated hitter Billy Butler said he didn’t see the fiveday break being a detriment.

“Hey, they’ve had four days off.

That’s the way you look at it. They played one day later than we have— they’ve had a layoff, too,” he said.

“I don’t know if it’ll play any factor. It definitely won’t be the reason if we go out there and don’t win tomorrow,” Butler said.

Shields and Bumgarner seemed unconcerned. This will be Shields’s first start since October 10 in the AL Championship Series opener against Baltimore.

“I think this late in the year almost too much throwing is too much,” he said. “So I’ve just kind of rested my body up for tomorrow.”

Bumgarner has already thrown 249 innings this year, including four postseason outings.

He was the NLCS MVP, and started last Thursday when the Giants closed out Saint Louis.

“Honestly, I feel the best I’ve felt all year for the last probably two months,” the lefty said.

Korean luCKy Charm S

EOUL, South Korea—A diehard, longtime Kansas City Royals fan from Seoul who became an international celebrity after he was superstitiously credited with sparking the team’s playoff run left Tuesday for Missouri to watch the Royals appear in their first World Series since 1985.

After learning of his passion for their team, a group of American fans helped Sung-Woo Lee arrange a visit to Kansas City in August so he could watch a Royals game in person for the first time.

By the time Lee returned to Seoul, the Royals, perennial alsorans, had won nine out of 10 games and were in first place in their division, and Lee had gained widespread fame among sports fans in the United States and in South Korea.

The 38-year-old duty-free shop employee is reluctant to make World Series predictions because of worries about jinxing the team. But he also said he can’t help imagining a celebration with Royals’ players in a champagne-soaked locker room.

Despite being considered a good luck charm by the club and

its fan base, Lee said in a telephone interview on Monday night that he doesn’t feel any pressure.

“I just want to root for the team with fellow Royals fans as hard as I can,” he said. “I will try to enjoy every moment.”

Lee belongs to a generation of South Korean sports fans in their 30s and 40s who developed an attachment to American professional sports by watching a local TV network for US servicemen stationed in South Korea to guard the heavily-armed border with North Korea.

Free from the obligations of supporting the “local” team, South Korean fans often developed interests in major league teams for quirky reasons. Some of them, for instance, began cheering for the New York Yankees because they thought the team had the best uniforms. Others supported the Atlanta Braves because of Fred McGriff’s exaggerated swing motion.

Lee, who has more than 21,800 followers on Twitter, said he began supporting the Royals because he fell in love with Kauffman Stadium

when he saw it in the early 90s in a short highlight package shown on what was then known as the American Forces Korea Network.

“The Royals won, and they did the fireworks show afterward with the fountain and the crown logo on the stadium in the background,” Lee said.

“It was amazing and beautiful.”

An official from Lee’s employer, Shinsegae Duty Free, thought that Lee’s international celebrity was both surprising and amusing.

As soon as the Royals reached the World Series, the company found itself receiving huge attention about whether it would allow Lee to attend. Lee joined Shinsegae just a month ago in a busy time when the company is preparing a bid for a new shop at the Incheon International Airport.

“We have arranged his vacation days so that he could stay in the US throughout the run of the World Series,” company official Lee Jeong-wook said.

He added, with a laugh: “If the Royals win in four, his vacation will be cut short.” AP

LONGTIME Kansas City Royals fan Sungwoo Lee throws the ceremonial first pitch against the Oakland. AP

sports

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E1 Wednesday, October 22, 2014

BusinessMirror

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EEPLY rooted in understanding the needs of the Filipino family, Pro-Friends has envisioned a one-of-a-kind township community that will enable families to bond with each other.

a unique township near Metro Manila that focuses on the most important aspect of family lives…to live, learn, work, play and worship.

Live

LANCASTER New City currently has two- and three-story townhomes, and two-story single-attached homes

Friends’ first office IT park development, SuntechiPark, which is designed to allow residents to work close to home, thus giving them more time to spend with the family.

Lancaster New City is also developing its transport system that will bring residents from their place of work to their homes in less time.

Play

designed for young professionals, start-up families and bigger growing families. Each home has sufficient space for dwellers to comfortably move around inside the house.

In September Lancaster New City introduced six new Modern Asian-inspired homes that celebrate the use of light and space. Its high ceilings and windows are created to allow more light and ventilation inside the rooms. In consideration of importance of the Internet to any growing family, four of the new house models (Briana, Chessa, Mabelle and Adelle) have ready outlets for home Internet cables.

Residents of selected house models have their very own Family Courtyard or Family Enclaves, extra spaces in the back or front of each single-attached home where children may safely play or for special private gatherings.

Learn

MORE than just providing homes, Lancaster New City has made high-quality, affordable education accessible to its residents. Saint Edward Integrated School (SEIS), a school established inside Lancaster New City in 2012, gives families the option to send their children

to a school that prides in raising globally competitive students with a strong sense of character. It has a dynamic project-oriented curriculum, which aims to address the needs of different types of learners.

It has life labs, clubs and organizations that allow students to develop their talents and equipped them with real-life skills. Moving forward, SEIS will have institutes of learning that is generally a mere 400-meter walk from the nearest residential area.

Work

INSIDE Lancaster New City is the pioneer IT Park of Cavite and Pro-

LANCASTER New City will also build Downtown Lancaster, a 25-hectare commercial-business-lifestyle district that will provide retail and leisure activities to both office workers and its residents, who will enjoy the convergence of SuntechiPark with the Square, its commercial area and Central Greens.

The Square will be a sprawling commercial center that houses several commercial and retail establishments. In 2013 the Square opened its first commercial building and houses, selection of restaurants, wellness boutiques and other service centers.

Central Greens will be a place of relaxation with its tree-shaded pathways, pocket gardens and children’s playground.

Worship

AT the heart of Lancaster New City is the Church of the Holy Family.

Built in 2012, the church became a place of worship where families attend Sunday Mass, hold their wedding vows and ceremonies, or celebrate the simbang gabi tradition. www.lancasternewcity-cavite.com

PROPERTY

Strong market demand greets Ayala’s ₧15-B shares offering

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Editor: Tet Andolong

A new city rises in Mega Manila

The new fortifications are directly aimed at so-called systemically important financial institutions (FIs), or those lenders considered too big to fail.

In a statement issued on Tuesday, the central bank said systemically important banks, local financial institutions whose distress or disorderly failure would cause significant disruptions to the wider financial system and the economy, are required to raise their common equity Tier 1 (CET1) depending on their classification.

CET1 represents the highest quality of bank capital qualified under the new Basel 3 capitalization rules.

By VG Cabuag

a new city rises in mega manila

Starting with its first phase in 2007, Lancaster has evolved into a master-planned community that spans more than 1,400 hectares, covering Kawit, General Trias and Imus, Cavite. Situated near the Manila-Cavite Expressway (Cavitex), families now have an option to own reasonably priced homes in

ust a day after mandating a fourfold increase in lender capital in anticipation of more stringent global competition, the Bangko Sentral ng Pilipinas (BSP) issued a new mandate expanding the banks’ buffer, or reserve funds, as added measure.

Continued on A2

REST OR RUST? ANSAS CITY, Missouri— Alex Gordon took a big rip at a batting-practice fastball, fouled it off badly into the cage, and ducked when the carom nearly hit him in the head.

Gordon let out a huge laugh, and so did a bunch of his Kansas City Royals teammates watching Monday’s workout.

“I can’t believe that just happened, dude,” pitcher James Shields razzed.

It’ll be more frustrating than funny if those are the same awkward swings the Royals and San Francisco Giants take once the World Series begins.

Going into Game one on Tuesday night at Kauffman Stadium, both teams will deal with a familiar issue this deep in the postseason: Does an extended layoff translate into rest or rust?

Buster Posey and the Giants zipped through the playoffs, and now will try for their third title in

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By Bianca Cuaresma

XPERIA Z3 Compact

‘Which colors would you like, luv?’

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BSP orders big banks to boost reserve funds as added cushion

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A broader look at today’s business

E1

yala Corp. on Tuesday said it received strong investor demand for its P15billion preferred shares, which the company will start selling this week.

The company said in its disclosure to the Philippine Stock Exchange (PSE) that the Class “B” Series 2 preferred shares will have a dividend rate of 5.575 percent per year.

“The dividend rate was set at the end of trading hours on October 20, 2014, following the customary book-building process and reflecting strong investor demand,” the company said.

The said shares will be issued on November 5, the same time it will become available for trading at the PSE. The company is offering up to 30 million in preferred shares at P500 apiece with a total

PESO exchange rates n US 44.8300

See “Ayala,” A2

EXIT SCREENING CRITICAL IN CURBING EBOLA SPREAD

By Recto Mercene

Q

uarantine doctors at the Ninoy Aquino International Airport (Naia) terminals will finally have protective gears to protect themselves and other medical personnel from being infected by the deadly Ebola virus, in case passengers would accidentally bring the virus to Philippine shores.

The head of airport quarantine personnel, Dr. Alexander Oba, said since the outbreak of Ebola virus in South Africa, they sought to purchase the protective suits from abroad.

The suit consists of rubberize coat, gloves and protective mask.

The rubber boots are locally made.

Oba said he is setting a clinical eye for a group of doctors assigned at the airports. Only doctors with a clinical eye can determine if an arriving passenger is sick or weak, even without the thermal scanners.

“This means having a critical thinking in observing if someone is sick,” Oba said.

Oba also said the complete suit costs about P2,000 each.

In highly developed countries, the suits are disposable but Oba said he is considering soaking the suit after use in sodium hypochlorite, a solution that can kill germs and other viruses.

“Maybe we can use the suit twice after disinfecting it before throwing it away for incineration,” Oba said. “As far as we know, the

Hospital safety guidelines The CDC provides guidelines for hospitals in the prevention and control of Ebola transmission. These are the personal protective gear recommendations for health care personnel working with a potentially infected patient.

Sequence for putting on necessary protective equipment

2 Mask or respirator

should fit snugly to face and cover bridge of nose to below the chin.

Ties or elastic band should be secure at middle of head and neck.

shield must fit securely and shield eyes.

4 Gloves are

equipped last and should extend to cover the wrist of the gown.

© 2014 MCT Source: Centers for Disease Control and Prevention Graphic: Troy Oxford, Dallas Morning News

A poll done by YouGov asks people about their fears of Ebola How worried are you about experiencing the following illnesses?

Cancer Ebola

12%

22%

Not sure

20%

38%

15% No

72% Yes

25%

28%

29% 12%

Very worried Somewhat worried

26% Not too worried Not worried

Subjects were asked whether or not they thought it’s possible to get Ebola certain ways (%)

94

82

Yes

No

74

69 53

53

47

43 30 2 From bodily fluids of infected person

7

17

94

28

24

6

Infectious Touching Someone Through Through Mosquito Properly person infected who is water air bites cooked sneezing surface not sick food

Source: YouGov Graphic: Erik Rodriguez

must fully cover torso from neck to knees, arms to end of wrists and be wrapped around the back and fastened.

3 Goggles or face

Ebola fears

Would you be afraid to sit next to a person who had recently been in any of the countries in Western Africa?

1 Isolation gown

© 2014 MCT

Safe work practices • Keep hands away from face.

• Limit surfaces touched.

• Change gloves when torn or heavily contaminated.

• Wash hands immediately after removing all protective equipment.

Ebola virus might not reach our country because the virus will travel at least three more countries before reaching the Philippines, so by that time, the virus is dead.”

Meanwhile, a new study underscores the potential danger of airplane passengers infected with Ebola leaving West Africa: If there were no exit screening in place, researchers estimate that three people with the disease might fly out of the region each month.

The hardest-hit West African nations have been checking passengers since summer, but the new work is a reminder of how much easier it could be for the virus to travel outside the outbreak region if those measures weren’t in place—and that screening can’t catch every case.

Since the Ebola outbreak was first identified in March, there have been only two known exported cases involving flights, one before and one after screening began in Liberia.

A Liberian-American flew to Nigeria in July and sparked a small outbreak there, which has since been contained. The second man, Liberian Thomas Eric Duncan, passed a screening See “Ebola,” A8

E.U. Council endorses PHL’s GSP+ application

By Catherine N. Pillas

T

he European Union (EU) Council has endorsed to the European Parliament the Philippines’s bid for inclusion in the economic bloc’s expanded preferential trade scheme called the Generalized Scheme of Preferences Plus (GSP+).

This put the country’s bid to gain the EU’s approval by the end of the year in a better position, according to the Department of Trade and Industry (DTI).

The EU Council announced last week in a news statement that it has no objection to the inclusion of the Philippines on the list of beneficiarycountries for the GSP+ scheme.

“The council decided not to object to a commission regulation adding the Philippines to the list of beneficiary-countries of the EU’s GSP+ system of tariff preferences…. It can now enter into force, unless the European Parliament objects,” the statement read.

“With this development, our application is now headed to the European Parliament for deliberation. We are optimistic that we will get approval from the EU Parliament before the year ends,” Trade Undersecretary Adrian S. Cristobal said in a statement.

Cristobal urged stakeholders to support the Philippines’s strategy in ensuring the country can maximize the benefits of the EU’s GSP+.

“We have been conducting a series of briefings with stakeholders to provide them information on our application to the GSP+ scheme, as well as assistance on nontariff measures and rules of origin [ROO] issues to capitalize on the full benefits of GSP+. We need to expand our country’s market access and increase investments to further strengthen the emerging sectors of our industry and generate more job opportunities to benefit especially the rural communities,” Cristobal added.

The Philippines officially completed its application process to the GSP+ arrangement in February. The DTI has been working closely with See “EU,” A2

n japan 0.4196 n UK 72.4946 n HK 5.7791 n CHINA 7.3217 n singapore 35.3215 n australia 39.3729 n EU 57.4138 n SAUDI arabia 11.9515 Source: BSP (21 October 2014)

A2

News BusinessMirror

Wednesday, October 22, 2014

SC. . . continued from a8 (OP), which junked the ruling of the DTI. In its April 3, 2007 decision, the OP reversed the DTI secretary’s resolution with a ruling that PGA Cars Inc. could not be held liable for the defects of the car bought by Moran because “private respondent [PGA Cars Inc.] was not the manufacturer, builder, producer or importer of the subject BMW car but only its seller.”

When his motion to reconsider the OP’s ruling was denied, Moran elevated the issue before the CA on the ground that the OP has no jurisdiction to review the resolution of the trade secretary.

BSP orders big banks to boost reserve funds as added cushion

But the CA dismissed his petition, prompting Mrs. Moran, in substitution of her husband, to raise the issue before the SC. The High Court pointed out that the OP has no jurisdiction to review the resolutions of the DTI Secretary on disputes involving violations of RA 7394.

It said that under RA 7394, “the DTI has the authority and the mandate to act upon complaints filed by consumers pursuant to the state policy of protecting the consumer against deceptive, unfair and unconscionable sales, acts or practices.”

Continued from A1

The new framework, the BSP said, should help strengthen financial markets and remove the moral hazard of publicly funded bailouts as required by the Basel 3 reform agenda.

“Global reforms on the treatment of systemically important financial institutions have been initiated in the light of socioeconomic costs arising from the financial crisis. This includes government bailout of failed financial institutions particularly in advanced economies,” the central bank said.

According to the BSP, banks will be evaluated based on size, interconnectedness, financial institution infrastructure and complexity.

“Although these measures are largely quantitative, supervisory judgment may also be applied as warranted in determining a bank’s systemic importance,” the central bank added.

Ayala. . . continued from a1 value of P15 billion. The said offering involves 20 million in primary offer and 10 million in oversubscription option. Class B shares are available both for purchase of both local and international investors. The company, however, will only sell the said securities locally.

The said shares are perpetual equity securities that have preference in the payment of dividends. If the shares are not redeemed at the end of the fifth year from the date of issue, the dividend yield shall be reset to either the original dividend rate or the sum of the closing of the five-year secondary market rate for bonds, plus a spread of 175 basis points.

In the 10th year, the dividend rate shall be reset to either the adjusted dividend rate or the sum of the closing of 10-year secondary market rate, and a spread of 300 basis points.

Proceeds of the offer will be used by the company to pay off its maturing domestic loans.

The company said it has a P1.46billion loan from Metropolitan Bank and Trust Co. and P5 billion from Banco de Oro. Both loans were due in October.

Ayala also has a P1.49-billion loan in the form of corporate notes from various lenders, including the Government Service Insurance System and Philippine American Life and General Insurance Co., falling due in February 2018, and another P5-billion loan from BDO that will mature in November 2019.

Previously, the company earmarked the said proceeds for capital spending, mostly for its infrastructure projects.

“The change in plan is to provide investors more certainty in the use of proceeds. The additional debt that will be refinanced by the preferred shares will help us manage our maturity profile and allow us to fix some of our floating obligations,” the company said in its recent disclosure.

EU. . . continued from a1 relevant agencies and stakeholders to update them on the status of the Philippines’s application to the GSP+.

The Philippines is currently a beneficiary of the EU GSP. Some 2,442 products from the Philippines can enter the EU market at zero duty, while 3,767 goods are subject to reduced tariffs.

With the inclusion of the Philippines in the EU GSP+ scheme, the Philippines will get to enjoy

The bigger the financial institution and the more complex its dealings in the markets, the greater the amount taken from its assets and set aside as buffer, the central bank said.

Similar structures have been set up by regulators in other markets and jurisdictions for precisely that situation when public funds have to be rechanneled to privately held undertakings to prevent failures that do even more harm were the systemically important financial institutions allowed to fall by the wayside.

After the evaluation, banks will be slotted in one of three “buckets” of systematic importance based on their composite score on all four major evaluation factors.

Systemically important banks will have to raise their minimum CET1 ratio by 1.5 to 3.5 percent depending on their level of importance.

This higher CET1 ratio will be on top of the existing CET1 minimum ratio of 6 per-

cent and the capital conservation buffer of 2.5 percent as mandated by the central bank just this year.

Failure to meet the requirements, according to the BSP Governor Amando M. Tetangco Jr., would be subject to constraints in the distribution of their income.

Tetangco also said systematically important banks will be given ample time to meet the higher capital ratio.

“Should banks be unable, limiting the distribution of profits is the way for these banks to build up their capital position by rechanneling their profits,” the central bank governor said, adding this restriction would be lifted once the capital ratios are brought to the required minimum.

The BSP said that by mid-2015, regulator were to inform each bank if they are classified as systematically important.

These banks will have to be able to meet the CET1 requirement by 2019.

Whether or not specific banks are systematically important will not be made public to “minimize potential moral hazard.”

On Monday the central bank rolled out the latest banking sector reforms, one seeking to lift the banks’ minimum capital level, and the other amending the rules on credit-risk management.

The new credit-risk management rules allow lenders to focus on capacity to pay and analysis on client cash flow to determine credit worthiness.

“By focusing primarily on cash flow and ability to pay, the BSP is signaling that collateral should only play a supporting role in credit decisions. This regulatory point of view is expected to give banks more leeway to lend to customers who are creditworthy but may not necessarily have collateral, particularly real estate, which could unduly restrict access to credit,” the central bank said.

zero duty for all 6,274 covered products, translating to increase in the country’s exports to the EU, and consequently resulting in more employment opportunities.

The product sectors most likely to benefit from the GSP+ are animal or vegetable fats and oils, prepared foodstuff, textiles and garments, footwear, headwear, umbrellas and chemical products.

Philippine Exporters Confederation Inc. President Sergio R. Ortiz-

Luis Jr., in a speech delivered in the association’s fourth quarter general membership meeting, underscored the significance of the trade scheme to secure wider market access in the EU for the said product sectors, as well as the creation of 267,587 jobs both in the agriculture and manufacturing sector.

Once approved by the EU Parliament, the Philippines will be the only GSP+ beneficiary in Asean.

Walter van Hattum, trade head

of the European Delegation here, gave a timeline on the proposal and said in a text message that the Parliament has until December 19 to raise objections to the European Commission’s proposal to grant GSP+ benefits to the Philippines.

“If there will be no objection, GSP+ preferences will be implemented immediately, following publication of the decision in the Official Journal,” van Hattum added.

3-DAY EXTENDED FORECAST

TODAY’S WEATHER

OCTOBER 22, 2014 | WEDNESDAY

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

EASTERLIES AFFECTING LUZON AND VISAYAS. (AS OF OCTOBER 21, 5:00 PM)

SBMA/CLARK 25 – 31°C METRO MANILA 23 – 32°C

TAGAYTAY CITY 22° – 28°C

THURSDAY

OCT 24 FRIDAY

24 – 32°C

23 – 33°C

TUGUEGARAO

25 – 33°C

24 – 33°C

23 – 31°C

23 – 31°C

OCT 25

SATURDAY

24 – 32°C

24 – 33°C

TACLOBAN

25 – 32°C

24 – 31°C

24 – 31°C

23 – 30°C

CAGAYAN DE ORO

24 – 31°C

24 – 32°C

24 – 32°C

26 – 32°C

25 – 32°C

26 – 32°C

25 – 33°C

26 – 33°C

26 – 33°C

14 – 23°C

SBMA/ CLARK

25 – 32°C

25 – 32°C

26 – 32°C

ZAMBOANGA

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

LEGAZPI

PUERTO PRINCESA CITY 24 – 29°C

TACLOBAN CITY 24 – 32°C

PUERTO PRINCESA

24 – 30°C

24 – 30°C

SUNRISE

SUNSET

MOONSET

MOONRISE

5:48 AM

5:32 PM

4:26 PM

4:13 AM

22 – 29°C

23 – 30°C

HALF MOON NEW MOON

OCT 16

3:12 PM

25 – 29°C

25 – 30°C

SATURDAY

25 – 32°C

14 – 23°C

23 – 29°C

FRIDAY

OCT 25

25 – 31°C

15– 24°C

23 – 28°C

THURSDAY

OCT 24

22 – 32°C

BAGUIO

TAGAYTAY

OCT 23

METRO CEBU

LEGAZPI CITY 24 – 31°C

ILOILO/ BACOLOD 25 – 30°C

3-DAY EXTENDED FORECAST

METRO DAVAO

TUGUEGARAO CITY 24 – 33°C BAGUIO CITY 16 – 24°C

OCT 23

METRO MANILA

LAOAG

LAOAG CITY 24 – 31°C

news@businessmirror.com.ph

OCT 24

5:57 AM

LOW TIDE

HIGH TIDE

MANILA BAY

3:09 PM

0.24 METER

9:25 AM

0.75 METER

25 – 30°C Partly cloudy to cloudy skies with isolated rain showers and/or thunderstorms

METRO CEBU 24 – 31°C CAGAYAN DE ORO CITY 23 – 31°C ZAMBOANGA CITY 25 – 33°C

ILOILO/ BACOLOD

Cloudy skies with rain showers and/or thunderstorms.

26 – 30°C

26 – 31°C

26 – 31°C

Partly cloudy to at times cloudy with rain showers.

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

METRO DAVAO 25 – 32°C

Weekday hourly updates: 6:00 AM on Balitaan, 7:00 AM & 8:00 AM on Good Morning Boss!, 9:00 AM, 10:00 AM, 11:00 AM, 12:00 PM, 1:00 PM on News@1, 3:00 PM, 4:30 PM, and 6:00 PM on News@6

www.panahon.tv

SABAH CELEBES SEA

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Economy

A4 Wednesday, October 22, 2014 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Senate to raise tax-exempt limit on Christmas perks, other bonuses before year-end–Drilon

A

bill that will increase the take-home pay of public and private employees is among the measures that will be passed before the year ends, Senate President Franklin M. Drilon said.

“In the meeting we had with the House leadership, we have resolved that the tax-exemption limit on 13th- month pay and other benefits should have the Congress’s approval before the year ends. This bill has already the lawmakers’ thumbs up, so it’s possible that we can pass it this year,” he said.

Drilon said the Senate Committee on Ways and Means is already finished with its committee report and it will be brought to plenary debates this week.

“Once it is laid on the floor, we will immediately calendar it for debates. I am sure we can come up with the solutions on how to address the

concerns regarding its effects on our national coffers,” he said.

“What we are more concerned about is how we can help our millions of workers who are struggling from day to day to cope with the effects of inflation. The exemplary actions of our workers, for instance, our teachers, cops and soldiers deserve more support from the government,” Drilon added.

The Senate intends to raise the exclusion limit of an individual’s 13th-month pay, Christmas bonus and other work benefits from income taxation from the current imposed limit of P30,000 to P75,000.

A House version of the proposed measure had already been transmitted to the Senate in September.

Meanwhile, Drilon said he ex-

pects floor deliberations on the 2015 national budget to start by November 18.

He said the Chamber remains ontrack on the budget and is committed to approve it before yearend.

The Senate leader also enumerated a number of measures, mostly economic measures, that will receive urgent legislative action, which include the Bangsamoro Basic Law, Fair Competition Act, Rationalization of Fiscal Incentives Law, Customs and Tariff Modernization Act, Rationalization of Mining Revenues Act, amendments to the charter of the Bangko Sentral ng Pilipinas and Built-Operate-Transfer law, and the establishment of an information and communications technology department. Recto Mercene with PNA

OFWs urge Palace to void ‘illegal’ airport terminal fee directive

By Jovee Marie N. dela Cruz

G

roups of migrant workers on Tuesday urged the Palace to void a Manila International Airport Authority (Miaa) directive that would integrate the P550 terminal fee in the price of airline tickets.

At least 15 groups of led by Partylist Rep. Roy Señeres of OFW Family, in a letter dated October 15, asked President Aquino to uphold the interest of the “unsung heroes,” the biggest contributors to Philippine economic progress.

The OFWs also assailed the Miaa directive, saying it constitutes a gross violation of the Migrant Workers and Overseas Filipinos Act. “Miaa Memorandum Circular 08 mandates the integration of the airport terminal fee to the airline ticket cost for all passengers, thus, violating Republic Act 8042, or the Migrant Workers Law, which exempts the millions of OFWs from payment of terminal fee,” the letter said.

The Miaa said that beginning on November 1, the airport terminal fee of P550 per departing

passenger would be incorporated in the price of airline tickets. The decision was arrived at following talks with the representatives of some 30 international air carriers operating out of the Ninoy Aquino International Airport.

The groups also appealed to President Aquino to “totally abrogate” the Miaa circular in response to the “groundswell of opposition from OFWs” against it.

According to Señeres, “the circular flagrantly violates the right of OFWs to be exempted from payment of the airport terminal fee.”

The group also thumbed down Miaa’s assurance that OFWs will be allowed to demand the refund of paid terminal fees upon presentation of their Overseas Employment Certificate.

“Needless to say, the refund will not, in anyway, cure a consummated violation of the law as it would already be a fait accompli,” Señeres said, adding that “a mere circular cannot amend or disregard a clear provision of the republic act.”

Among the OFW leaders who affirmed the appeal to President Aquino were Susan Ople of the Blas F. Ople Policy Center and Training Institute; Carmelita Nuqui, president of Philippine Migrants Rights Watch; Gemma Comiso, Pinoy Expats/OFW Blogs Awards Inc.; Elsa Cabangon, Filipino Migrants Worker; Nelson Ramirez, United Filipino Seafarers; Sis. Teresa Evasco, Daughters of Charity Migrants Desk; Bienvenido Lorque, United Filipino Seafarers; Ma. Fe Nicodemus, Kakammpi; Luther Calderon, Kampi; Rashid Fabricante, Filipino Migrants Worker; Edward Era, Filipino Lifeline Inc.; Lito Soriano, LBS Recruitment; and Elena Sana, Center for Migrant Advocacy Philippines.

news@businessmirror.com.ph

Better absorptive capacity key to solving PHL urbanization woes

By Cai U. Ordinario

T

he country’s major challenge in addressing urbanization is low absorptive capacity in government line agencies, according to a study released by state-owned think tank Philippine Institute for Development Studies (PIDS).

In a study titled “Scrutinizi ng Urba n i z ation Challenges i n t he Ph i l ip pines Through the Infrastructure Lens,” PIDS senior research fellow Adoracion Navarro said the country aims to increase its infrastructure spending to 5 percent of gross domestic product to address problems brought about by urbanization and poverty.

Navarro said these problems, such as the lack of potable water, poor sanitation, flooding, poor waste disposal and insufficient urban transport, also increase poverty incidence.

“In previous years, the major constraint to meeting the target is resource availability but now that the Philippines is experiencing wider fiscal space, more public resources are being made available for infrastructure investments,” Navarro said.

“At present, it appears that the more serious short- term constraints are the weak capacity of government implementing agencies to absorb more funds and implement projects,” she added.

Navarro recommended increasing regional cooperation to address short-term problems on absorptive capacity. It will also require tapping into global best practices and better partnerships between and among government personnel and managers.

Improving absorptive capacity will enable the government to finance much-needed investments in mass transport, highways, bridges, ports, airports, water-distribution networks, electric power systems, and telecommunications and information infrastructure.

“Addressing this may require sharing of best practices and innovations in procurement, contractual arrangements, and project management and implementa-

briefs bidding for lrt 2 o&m set in q2 2016

THE private sector may start operating the railway line east of Metro Manila by second half of 2016, an indicative timeline showed.

Government officials presented Tuesday the timetable for the Light Rail Transit (LRT) Line 2 operations and maintenance (O&M) contract to interested parties.

It showed that the bid submission date for the deal is set in May or June 2015.

The issuance of the notice of award will be a month after, thus the signing of the concession agreement between the government and the winning concessionaire will be scheduled by August or September next year and the private sector may start the takeover a year after, Transportation Undersecretary Jose Perpetuo M. Lotilla said “It will require at least 12 months for the winning bidder to start operating and maintaining the line,” he said in a chance interview.

This means the assets of the line will be turned over by the second semester of 2016, when a new President will be at the helm of the Executive branch of the State.

But transitioning from one government to another might bear negative implications.

“The timing of the turnover of the asset, as much as possible should not coincide with the change of administration because it makes it more complicated due to transition of position,” AC Infrastructure Holdings Corp. Executive Vice President Noel Eli B. Kintanar advised.

He noted that the government might want shorten the transition period to avoid further complications.

tion,” the study added.

Improving absorptive capacity to get these infrastructure investments on the ground will attain the recommendations included in the National Urban Development and Housing Framework (NUDHF) 2009 to 2016, formulated by the Housing and Urban Development Coord inating Council, in cooperation with the PIDS. The NUDHF recommended t he i mpro ve ment of urban competitiveness, such as in the greater Metro Manila area, Cebu and Davao City. This recommendation urges the increase of industrial productivity in urban centers nationwide.

The plan also recommended the reduction of poverty in urban areas by improving urban mobility, encouraging smaller families to help control population growth, and implementing livelihood programs.

Further, the NUDHF recommended addressing the country’s housing backlog through af fordable housing and the promotion of sustainable communities by encouraging green building, integrating climatechange adaptation and sustainable planning in cities.

Also, a key recommendation under the NUDHF is to encourage performance-based governance by providing incentives to local governments and making them less dependent on the Internal Revenue Allotment (IRA), among others.

The study cited official government data that showed that as of the 2010 census, urbanization in the Philippines was at 45.3 percent. In absolute terms, this means that of the 92.3 million Filipinos, around 41.9 million are living in urban areas.

Navarro also cited United Nations projections that estimated that by 2030, the Philippines will be 56.3- percent urban and by 2050, around 65.6-percent urban.

These projections, the study noted, are not far from the overall urbanization rates projected for Southeast Asia of 55.7 percent in 2030 and 65.9 percent in 2050.

dotc extends qualification deadline for proposed i.t.s. terminal until nov. 4

THE Department of Transportation and Communications (DOTC) has extended the qualification deadline for the proposed P4-billion Integrated Transport System (ITS)-South terminal until next month.

In a bid bulletin, the DOTC said it will be accepting bids for the public private partnership (PPP) project until November 4. The initial deadline of submission of bids for the PPP project was October 6.

DOTC Undersecretary Jose Perpetuo Lotilla said opening of bids will be held immediately after the deadline for the submission of bids.

At present, prospective bidders for the project include the San Miguel Corp., Ayala Land Inc., Filinvest Group, Megawide Construction Corp. and Datem Construction.

The ITS-South terminal will be located near the Food Terminal Inc. compound in Taguig City. It is meant to serve passengers coming from the provinces of Laguna and Batangas.

It will include a passenger terminal building, arrival and departure bays, public information systems, ticketing and baggage holding facilities, as well as parkride facilities.

Meanwhile, another ITS terminal, the P2.5-billion ITS Southwest will be located near the Manila-Cavite Expressway. It will connect passengers coming from Cavite to other urban transport systems, such as the future Light Rail Transit Line 1 (LRT1) South Extension to Bacoor City in Cavite, city buses, taxis and other public utility vehicles plying Metro Manila. PNA

Economy BusinessMirror

news@businessmirror.com.ph

Wednesday, October 22, 2014 A5

DOE, House disagree on grant of emergency powers to Aquino

E

By Lenie Lectura

NERGY officials on Tuesday stressed the need for Congress to still issue a joint resolution that will authorize President Aquino to deal with the looming power crisis in 2015, a day after they were apparently misunderstood by lawmakers during the House Committee on Energy hearing on Monday.

Energy Undersecretary Raul Aguilos, Director for Electric Power Industry Management Bureau Myleen Capongcol, and Assistant Director Irma Exconde said in a news conference that the country still needs Congress’s approval to invoke Section 71 of the Electric Power Industry Reform Act (Epira) in order to address the power crisis that will hit Luzon during the summer months next year.

A draft of the resolution submitted by the Department of Energy (DOE) seeks to grant the President an authority to negotiate contracts for the acquisition of additional generation capacity either via lease or purchase Epira prohibits the government from putting up power plants. However, Section 71 of the said law states that the President, upon determi-

nation 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.

“We need Section 71. What was presented on Tuesday during the hearing was the best-case scenario for 2015,” Aguilos said.

The lawmakers were under the impression that there is an anticipated 1,200 megawatts (MW) of shortfall, translating to up to eight hours of daily rotational brownout.

But during the hearing on Monday, the same energy officials told the congressmen that the shortfall would only amount to 31 MW, at most, at any given day from March to June next year.

Therefore, the congressmen concluded that there is no urgency

to issue the joint resolution that was supposedly targeted to come out by end of this month. Instead, they said, the Interruptible Load Program (ILP) will suffice because there is no need for emergency powers to address the situation.

What they failed to thoroughly explain during the hearing was that aside from the projected 31 MW of anticipated daily generation deficiency, the country is in need of three kinds of power-reserve requirements—regulating reserves, contingency reserves and dispatchable reserves.

Capongcol said a 350-MW regulating reserve is meant to ensure the system reliability of the power grid; 647 MW for contingency reserve, which is equivalent to the highest online power plant when it suddenly conks out; and another 647 MW of dispatchable reserve for offline plants that can be switched on when power supply falls.

“Ideally, we need to raise all these kinds of reserves but since it is too huge, we are eyeing to meet only the contingency reserves of 647 MW,” Capongcol said. Given this, the Luzon grid is in need of 678 MW to cover for the 647-MW contingency reserve and 31 MW of deficit.

The DOE officials said it has received firm commitments from industry stakeholders an additional 424 MW of capacity but this was already factored into its computation.

“We have a power-supply problem of 700 MW. We already factored in the additional capacities that will come in.

We need even more than 700 MW in

order to satisfy the regulated reserve.

That is what we need,” Aguilos said.

For now, the government is banking on the ILP to cover the needed 700-MW capacity.

Under ILP, its participants will be called upon to voluntarily use their respective generating sets. Through this, 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. Thus 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.

But so far, the Manila Electric Co. (Meralco) has so far signed up 155 MW of accumulated committed interruptible load capacity from various ILP participants. Meralco is the largest distribution utility in Luzon.

The DOE, however, said that only half of that capacity will turn out as actual capacity that can be de-loaded based on previous incidents.

When sought for comment, Energy Secretary Carlos Jericho L.Petilla said he is confident that more will participate in the ILP soon. “We will be scraping from the bottom of the barrel to make up for what we need,” he said.

He added that, when the time comes when ILP will be able to cover for the needed capacity, then he would not have second thoughts to recall the emergency powers, should Congress grants the President.

“I am not for Section 71 absolutely.

If there is enough capacity then I will

be more than happy to recall Section 71. But for as long as we haven’t completed what we need then I have to push for it. Maniniguro muna ako. I have to keep that option,” Petilla said.

Rely on ILP

THE House of Representatives wants the Aquino administration rely on ILP to address the looming power shortage next year, according to the draft resolution granting President Aquino emergency powers.

Based on the latest draft of the House resolution, authorizing the president to establish additional generating capacity to effectively address the projected electricity shortage in 2015, the DOE projects a critical power shortage estimated at 700 MW to occur in March to July 2015 consisting of 14 weeks yellow alert and two weeks of red alert for a total of 16 weeks of approximately one hour of brownouts for one day per week.

The draft resolution added that to authorize the President of the Philippines to provide for the establishment of additional power-generating capacity as a strategic response to the need for specific, focused and targeted acquisition of additional energy capacities to meet the critical threat of electric power shortage estimated at 700 MW from March to July 2015, the following terms and conditions will be implemented:

Provision and procurement of additional generation capacity shall be available on or before March 1, 2015.

Additional generating capacity shall be preferentially sourced from the ILP, fast-tracking of committed projects and plants for interconnection

Adoption and execution of energy and conservation measures shall be pursued as further fallback mechanism.

It said that to stimulate additional generation capacities, private entities with self-generating facilities are hereby encouraged to participate voluntarily in the ILP on or before December 1, 2014.

“Provided, that the government shall reimburse the owners of SGFs or backup generators for fuel expenses and reasonable recovery for their use in accordance with ERC [Energy Regulatory Commission] rules and validated by the distribution utilities,” it said.

‘Absence of substantiation’

THE joint resolution granting President Aquino emergency powers to address the looming power crisis in summer next year has been opposed by various groups, claiming his determination of a shortfall in electricity supply is based only on “conjecture absent of substantiation.”

“Essentially, what we are saying is that the emergency powers will not solve the real power crisis,” Sanlakas Secretary-General Lawyer Aaron Pedrosa told the BusinessMirror, citing that this will only redound to socializing more obligations that the state plans to pursue. With Jovee Marie N. dela Cruz, Rod Abad, Recto Mercene,

Opinion BusinessMirror

A6 Wednesday, October 22, 2014

Editor: Alvin I. Dacanay

editorial

Asean economic integration: The benefits and costs

T

HE coming Association of Southeast Asian Nations (Asean) economic integration is striking fear into some people. Although their worries about this integration are understandable and valid, we believe that its benefits outweigh its costs.

Simply put, economic integration means the unification of economic policies, including trade, tax and monetary ones, which affect the exchanges of goods and services, as well as the movement of labor and capital in the countries involved. Later on, economic integration can involve the adoption of a common currency.

What are its benefits? For one, the trade that economic integration will spur will be enormous, because the market will grow from 100 million in the Philippines to some 600 million people in the region. Merely responding to a fraction of this figure will already pose a serious challenge to Filipino producers. But there will be ample rewards for responding producers. As for consumers, they will be faced with a wider array of lower-priced products.

There will also be opportunities to not only sell already existing products, but also produce new ones. This will need a rapid response from producers, who will be required to increase capacity and adopt more advanced production techniques. We have no doubt our producers can do this.

New employment opportunities will also be created throughout the economic community, and both local and foreign workers can be expected to respond to them. Member-countries can be expected to have their versions of our own overseas Filipino workers. If our employmentcreation efforts have, so far, been ineffective, economic integration might just save the day for us.

We can expect businessmen and investments from other Southeast Asian countries to come to the Philippines, even as our own businessmen open up new ventures in those nations. But here, we come face-to-face with a problem: The restrictions on foreign investment that are embedded in our 1987 Constitution will naturally repel these countries from investing in the Philippines. As a result, investors within and outside the community will put their money elsewhere. So if we are only attracting a small amount of foreign investments these days, we can expect even fewer investments as integration progresses—unless, of course, we amend the Constitution.

Now, what are the costs? Following tariff and nontariff unification, the arrival of new competitors with lower production costs can pose a threat to local businesses with higher production costs. Fearful of losing their market, these businesses might be driven to seek government protection, which cannot be granted, because economic integration prohibits it. They just have to bite the bullet, reduce costs and become more competitive.

There is also the possibility of diverting trade from low-cost producers outside the integrated community to high-cost producers within it who are no longer subject to tariff. But this is a problem to those outside the community, not to those within.

Is this not exaggerating the benefits of integration and downplaying its costs? No, it is not. No matter how you slice the cake, this is the way it crumbles. Let’s welcome the Asean economic integration.

BusinessMirror A broader look at today’s business Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief

T. Anthony C. Cabangon Jun B. Vallecera

News Editor City & Assignments Editor Special Projects Editor

Dionisio L. Pelayo Vittorio V. Vitug Max V. de Leon

Online Editor

Ruben M. Cruz Jr.

Research Bureau Head Creative Director Chief Photographer Editorial Consultant Chairman of the Board & Ombudsman President VP-Finance VP-Corporate Affairs VP Advertising Sales Advertising Sales Manager Circulation Manager

Dennis D. Estopace Eduardo A. Davad Nonilon G. Reyes Romeo M. del Castillo Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan

10222014

A campaign amplifying members’ voices Susie G. Bugante

All About Social Security

D

URING its 57th anniversary celebration last month, the Social Security System (SSS) launched a new campaign featuring the voices of its members who have experienced, with great appreciation, the help their social-security program has given them in times of economic distress. The campaign highlights the members’ inner expression of “Buti na lang may SSS! [It’s a good thing there’s SSS!]” that testifies to the institution’s faithfulness to its mandate of being a shoulder to lean on in times of contingencies.

One such voice is that of Rubylyn Reclusado, a market vendor who works at the Vigan Public Market in Ilocos Norte province. When she first heard about the plan of her group, Vigan Market Vendors Inc. (VMVI), to partner with the SSS through the latter’s AlkanSSSya program, so that she and fellow vendors could become SSS members and pay their contributions more affordably, she was doubtful, yet intrigued: doubtful that she could afford to make her contributions;

The trouble with tokenism William Pesek

BLOOMBERG VIEW

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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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intrigued at the thought that even market vendors like her could become SSS members. She thought that SSS membership was only for factory and office workers.

Reclusado’s initial doubts were erased when representatives from the SSS Vigan branch went to her association’s meeting and explained the AlkanSSSya as a microsavings scheme that enables self-employed individuals from the informal sector to save on a daily basis for their monthly contributions. On

F

OR Japanese Prime Minister Shinzo Abe, losing two of five female Cabinet members to scandal in one day is hugely embarrassing and a grave setback to his efforts to shake up the staid, male-dominated world of Japanese politics. More important, it’s a reminder of the real problem with Abe’s female-empowerment drive: His policies remain more symbolic than substantial.

In a Cabinet reshuffle last month, Abe hired the five female ministers to buttress his case for raising the profile of women in Japan, which ranks behind Burkina Faso in gender equality. For a time, his Liberal Democratic Party (LDP) basked in global headlines celebrating its progressiveness and commitment to getting more women into the workplace, which is a key to Japan’s future growth.

The resignations of Trade Minister Yuko Obuchi and Justice Minister Midori Matsushima on Monday because of unrelated spending scandals naturally call into question Abe’s choices. Rather than tap strong, independent-minded women who might challenge government policy,

he seems to have favored warm, telegenic figures who could help him sell unpopular policies. Obuchi, for example, was tasked with leading efforts to restart Japan’s nuclear reactors—a still-controversial idea after the 2011 Fukushima disaster.

Presumably, LDP barons assumed that a 40-year-old mother of two could help convince Japanese that reactors were safe.

Other female ministers appear to have been selected for their rightwing credentials: Internal Affairs Minister Sanae Takaichi and Eriko Yamatani, minister for the North Korea abductee issue, were embarrassed recently after photos emerged of them beside a former Japanese neo-

December 17, 2012, VMVI officially became part of the program, and Reclusado was one of the 160 initial members who eagerly dropped their first savings in their designated compartments that day.

Dropping coins in her A lkanSSSya unit slowly became a habit for Reclusado. At the end of her work day, she would pass by her unit and drop in some amount from her daily income. If she had no time or money to spare one day, she would make sure to double her savings the next day. She needed to save up at least P330 a month for her SSS contribution. By saving small amounts daily, she was able to meet that required amount.

In April Reclusado gave birth to her second child via caesarean operation. While she was happy to have another baby, the cost of childbirth seemed overwhelming to her.

Fortunately, she had the SSS to lean on. She filed a maternity-benefit claim, and because of her contributions, she qualified for a maternity benefit of P7,800. While it was not enough to cover the cost of childbirth, the modest amount was a big help in defraying it. Even her fellow

market vendors were surprised and happy for her.

“Sabi ng mga kasamahan ko, maganda pala maging miyembro ng SSS. Gusto na rin nilang sumali sa AlkanSSSya. Tuwang-tuwa ako nang makakuha ako ng maternity benefit mula sa SSS. Bumalik sa akin ang ’yung mga hinulog ko at higit pa. Buti nalang may SSS! [My co-vendors realized that being an SSS member is a good thing. They now want to join the AlkanSSSya. I was so happy when I got my maternity benefit from the SSS. I got back what I contributed, and more! It’s a good thing there’s SSS!]” Reclusado happily recalled.

Her story is just one of the many that show how being covered by the SSS has benefited members.

If Japanese Prime Minister Shinzo Abe really wants to increase female labor participation in his country, he needs to introduce clear policies that use tax incentives to reward companies for leaning forward. He also should name, shame and even punish companies that fail to tap the other half of Japan’s population. Truly empowering women requires bold and creative policies, not tokenism.

Japanese media dubbed “Koizumi’s assassins”—to run for office.

None of this would matter much if Abe’s efforts to raise women’s participation in the workforce looked likely to bear fruit. In the coming weeks, his government is expected to unveil a package of measures to increase that ratio to 30 percent by 2020.

Yet, thus far, Abe has laid out a three-pronged approach toward gender equality that’s timid and unimaginative. Its pillars include greater access to child care (without helping families defray the prohibitive costs); extending maternity leave to three years (which may dissuade many career women from having kids); and asking companies to invite more women into the executive suite.

Already there signs Abe is backtracking on key pledges, like requiring numerical targets for companies to hire or promote female executives, never mind mandating quotas.

If Abe really wants to increase female labor participation, he needs to introduce clear policies that use tax incentives to reward companies for leaning forward. He also should name, shame and even punish companies that fail to tap the other half of Japan’s population. Truly empowering women requires bold and creative policies, not tokenism.

Nazi leader. Feminists, meanwhile, were aghast at Haruko Arimura getting the women’s empowerment portfolio, despite her strong support for traditional family values. She opposes women keeping maiden names after marriage or allowing a woman to succeed to the imperial throne.

By this point, Abe’s hirees seem like little more than ill-advised tokenism—a familiar sight in the halls of power in Tokyo. The last time Japan had five female Cabinet members was under Junichiro Koizumi, Abe’s political mentor. For his part, Koizumi tapped female television anchors, former models and cookbook authors—a crowd the

For more information about the SSS AlkanSSSya program, call your nearest SSS branch or the SSS 24-hour call center at (632) 920-6446 to 55, Monday to Friday, or e-mail member_relations@sss.gov.ph.

Susie G. Bugante is the vice president for public affairs and special events of the Social Security System.

Send comments about this column to susie-bugante.bmirror@gmail.com.

Opinion BusinessMirror

opinion@businessmirror.com.ph

The storm sewers of Saitama and Tokyo

Nlex-Slex road project—sabotage?

apparently, has the blessings of the DOTC) is one way of sabotaging the project.

Butch del Castillo

OMERTA

Atty. Dennis B. Funa

INSURANCE FORUM

A

LTHOUGH it is unacceptable, whichever way we look at it, flooding in Metro Manila has become such a regular occurrence that even Metropolitan Manila Development Authority Chairman Francis N. Tolentino has conceded that the metropolis would never be able to avoid it.

Metro Manila, it seems, is doomed to be submerged at the first sign of a drizzle, and this scenario seems to be getting worse every year.

Although the Insurance Commission has no data that directly relate to vehicle damage inflicted by floods, losses incurred because of so-called acts of nature amounted to P334,707,914 in 2013, representing 5.13 percent of the total car business. This amount is deemed significant and upsetting, even if it covers very little of the total losses incurred by the car-insurance industry, which amounted to P6.5 billion that year. These figures are even more staggering and alarming once we realize that they represent only losses involving motor vehicles and do not yet include the damage to public infrastructure and houses.

The flooding we regularly experience in our dear country should really not come as a surprise if we consider the type and quality of our sewers: undeniably obsolete, totally neglected and unfairly ignored all these years. In most European countries, you can walk through their storm sewers. In fact, if you are daring enough, you could even drive your car through them and come out unscathed. That’s how wide their sewers are, and you simply cannot compare their sewerage systems with ours. In the Philippines we keep our sewers small—a horrible truth, which I am simply unable to either defend or justify.

Like the Philippines, Japan is regularly battered by typhoons.

In Tokyo and Saitama prefecture, which is about 15 miles north of the Japanese capital, the people there built an amazing underground surge tank that collects floodwaters. After the rain ceases, the collected floodwaters are then pumped slowly into rivers. This has been proven so effective in combating chronic flooding that Tokyo and Saitama are now considered flood-resistant.

The Tokyo Metropolitan Floodway system is the world’s largest solution to flooding. The underground surge tank is capable of storing floodwaters at the rate of five Olympic swimming pools per minute. It collects 260 cubic yards of water every second. It is so cavernous, you can even call it an underground Megamall, due to their comparable sizes. Its surge tank is about 580 feet long, 256 ft wide and 59 ft high. Connected to it are about 3.7 miles of tunnels.

After the rain stops, the floodwaters are then pumped into the Edo River by underground pumping stations without causing the river to overflow. The pumping system is powered by four turbines of jet engines, which are quite similar to those used to fly a Boeing 737 plane.

In 1991 a typhoon struck Japan, flooding 24,000 acres of land and 30,000 homes around Tokyo. As part of a firm resolve to prevent such a disaster from happening again, the construction of several gigantic surge tanks was started two years later. After they were completed in 2006, the total cost of the project was determined to be about $2.9 billion—an obviously expensive government venture, but also a very wise publicinfrastructure investment. You may very well be curious to visit this structure (if only to find out what our country has been missing

Despite our pessimism, there must be some hope in solving our flooding problem. While we need not build an exact replica of the Japanese sewerage system, we could try to replicate what they have accomplished on a significantly smaller scale. In this way, although we may not be able to completely overcome the damaging forces of Mother Nature, we can, at the very least, confidently defend ourselves from her attacks long enough to enjoy even just one floodless rainy day. all these years), but you won’t find it so easily, for it is underneath a soccer field.

In Saitama a similar system is in place. It is called the Metropolitan Area Outer Underground Discharge Channel. Gigantic concrete silos measuring 65 meters (213 ft) tall and 32 meters (105 ft) wide collect the floodwaters. Each is about as tall as a five-story building. Connected to each one are underground tunnels measuring 6.4 kilometers, which were built 50 meters (164 ft) under the ground.

There are also gigantic tanks: 25.4 meters tall, 177 meters long and 78 meters wide, with 59 concrete columns. The underground discharge channel has been revered as an aesthetically significant architectural structure, making it a well-known tourist attraction in the region.

Building a sensible sewerage system is not new to the Japanese. The Kanda Sewerage, built in the Kanda area of Tokyo in 1884, was Japan’s first modern sewerage system. The built sewers are so wide that you can drive a 6x6 truck through it.

Considering that this system was built more than a hundred years ago, comparing it to our supposedly “modern” sewerage system in 2014 should be treated as a not-soamusing pun directed at us and as a huge insult to the people of Japan.

While the Philippines continues to mope over its chronic flooding problem, Japan refuses to wallow in its own, despite the ever-aggravating nature of our global climate. At the moment, Tokyo is preoccupied with building a water-storage facility capable of absorbing 75 millimeters of rainfall per hour around the Ginza district. Meanwhile, Metro Manila remains at the mercy of its Spanish-period sewers. While Japan is exhausting efforts to resolve recurring flooding, Filipinos can only wait until the next typhoon wreaks havoc on the nation and pray that the aftermath won’t be as bad as the ones we have experienced before.

Despite our pessimism, there must be some hope in solving our flooding problem. While we need not build an exact replica of the Japanese sewerage system, we could try to replicate what they have accomplished on a significantly smaller scale. In this way, although we may not be able to completely overcome the damaging forces of Mother Nature, we can, at the very least, confidently defend ourselves from her attacks long enough to enjoy even just one floodless rainy day.

Atty. Dennis B. Funa is the deputy commissioner for legal services of the Insurance Commission.

Wednesday, October 22, 2014

Conclusion

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N outstanding example is the Toll Regulatory Board’s (TRB) incredible objection to what looks like a very sensible infrastructure project meant to significantly ease the nightmarish gridlocks in Metro Manila.

The TRB, headed by Executive Director Edmundo T. Reyes, has been consistently blocking the award of an unsolicited build-operatetransfer (BOT) project proposal that promises to ease by at least 20 percent the traffic congestion in Metro Manila. The TRB, by the way, is directly under the Department of Transportation and Communications (DOTC).

Metro Pacific Tollways Development Corp. (MPTDC), the proponent of the project as early as 2010, proposed to the then-newly installed Aquino administration a 13-kilometer elevated highway that would link the North Luzon Expressway (Nlex) and South Luzon Expressway (Slex). If constructed, this elevated highway would allow

thousands of trucks and lighter vehicles to “leap” over Metro Manila’s ground-level traffic.

The beauty of the proposal is that it would allow commercial producers in northern and southern Luzon to cross over without contributing to the congestion in Metro Manila.

As proposed by MPTDC, the elevated highway would be constructed above the railroad line of the Philippine National Railways. This means no right-of-way problems to contend with, allowing the road’s untrammeled construction.

As I have earlier pointed out, the TRB has put the project on hold for four years—on the back burner, so to speak—for no justifiable reason.

In fact, to some people, this deliberate inaction of the TRB (which,

Feud over connector-road projects?

A BUSINESSMAN has told me in confidence that from the very start, the DOTC and TRB have been feuding with the Department of Public Works and Highways (DPWH) over how best to carry out President Aquino’s directive to “facilitate the implementation of two connectorroad projects—the San Miguel Corp./ Citra’s Skyway Stage 3 [project] and MPTDC’s Nlex-Slex project.”

The TRB has been criticizing the DPWH for not leaving the integrated planning of the country’s highways to the DOTC. According to a DPWH official, however, the department, as the engineering arm of the government, is only following the President’s orders to implement both connectorroad projects, and to see to it that the two contractors should split the construction costs for the common area of the toll-road projects.

The two projects have a common alignment and, in the public interest, the DPWH wants to make sure that they would not have overlapping facilities.

The DOTC-TRB side, however, is questioning the DPWH’s authority to issue a toll-concession agree-

Nlex-Slex connector roads needed Lito U. Gagni

MARKET FILES

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HANKS to the port congestion that exposed the Philippine economy’s vulnerability to disequilibrium—in this case, the limit imposed on the number of trips that trucks can make—the need for more roads has become more urgent. This was what the Federation of Philippine Industries (FPI), an umbrella group of Philippine manufacturers, and the European Chamber of Commerce emphasized when they called on the government to allow the construction of two North Luzon Expressway-South Luzon Expressway (Nlex-Slex) connector roads.

If built, the Nlex-Slex connector roads would give trucks some breathing space and let the engine of commerce continue to run unhampered by delays, like those that resulted from the recent truck ban that hit Metro Manila—and the economy— quite badly. In addition, the roads in the metropolis would no longer be clogged by the cargo trucks that currently ply the Nlex and Slex. This is because the connector roads would be elevated, the kind that a study by the Japan International Cooperation Agency (Jica) has recommended to be constructed.

The Jica study said that if more road networks, rail lines and elevated expressways are constructed, they would yield remarkable benefits not only for the economy, but also for the poor: They would see their fares go down from P42 to P24 and their travel time cut from

80 minutes to 30 minutes.

We understand that the National Economic and Development Authority (Neda) has seen the beauty of having the two connector roads, as it hews closely to the study’s recommendation for the implementation of more infrastructure projects.

Aside from this, one of the connector roads would traverse the Port of Manila and, thereby, prevent another congestion like the one that, FPI President George Chua said, “cause[d] massive problems for consumers and businessmen, especially now that we have a backlog of more than 20 ships queued for berthing at the Port of Manila.”

The Neda, which is the economic think tank of the government, has pushed for the building of the two connector roads because of their benefits to the economy. The Neda’s approval of them has not been lost

on the Aduana Business Club, whose members include those who do business at the ports. For them, it is important for the government to have these roads constructed without delay.

The Nlex-Slex connector roads need to be on stream immediately.

Time is of the essence, for the trucks that leave the port to deliver their goods, which need to arrive at their respective destinations at an agreed time, are part and parcel of the economy. Lost delivery time means losses in business revenue. Without the connector roads, the government would have to again confront a loss of equilibrium at the ports, which has contributed to the increase in the prices of goods, especially those expected to be sold during the Christmas season.

Thus, the government should waste no time in letting the connector roads concretize the government’s attempt to see economic growth hitting 7 percent and higher.

The connection between the roads and the economy’s rise should not be lost on the government.

New FDA boss

NOW that Dr. Kenneth Hartigan-Go has quietly resigned as acting director general of the Food and Drug Administration (FDA), the focus is now on the need to appoint somebody from the ranks who knows what are needed to implement a clearer strategy regarding the policing of food supplements. After all, the FDA’s main function is to collect samples of, analyze, test and inspect health products before they are allowed

A7

ment for the Nlex-Slex project. The objection does not make sense, since the DPWH’s mandate is grounded on the BOT law or Executive Order 686.

Effectively, the common-alignment issue has been settled. So far, the DOTC and TRB have given a concession to the San Miguel/Citra Skyway Stage 3 project. But they have not stopped questioning the legality of the project.

At the rate the project is being stalled, the MPTDC project would be stalled for another year, at the very least.

This project was originally scheduled to be completed before the Asia Pacific Economic Conference, to be held in the country next year. But don’t hold your breath, judging from the way the DOTC and TRB have been dragging their feet on this one.

The businessman who said there’s a feud going on between “high personages” of the DPWH and the DOTC has also revealed that “powerful lobbyists from the business sector” seem bent on pitting both departments against each other.

The net effect: It is sabotaging what is otherwise a meritorious and badly-needed infrastructure project.

In the meantime, what is there to expect under the Aquino administration? Monstrous traffic jams that become bigger and uglier by the day.

E-mail: omerta_bdc@yahoo.com.

to enter the market.

Apparently, the FDA has been performing below standards, as shown by the proliferation of fake, substandard, contaminated and hazardous food, supplements and medicines in the country, which the agency, sad to say, had to acknowledge in public.

For instance, the FDA had to make an announcement last week about a particular food supplement that was withdrawn because of ads claiming that it can cure several maladies.

Indeed, the FDA is no match for businesses that would want to rake in lots of money here by selling health products, making false promises and using a dishonest marketing strategy. The FDA is simply not in the right condition to protect Filipinos from these unscrupulous businessmen. This is probably what drove Go to resign.

President Aquino should step back from the usual way of appointing doctors and, instead, appoint somebody who really knows and understands the intricacies of the job, and who can enforce rules within and outside of the FDA. There is a need to consider someone from the agency’s ranks to ensure that it really fulfills its mandate. Besides, this would prevent FDA personnel from becoming demoralized.

Health Secretary Enrique T. Ona should consider the needs of the FDA when he submits a list of candidates for the top FDA post, especially now that the threat posed by the Ebola virus is growing every single day.

E-mail: hugagni@yahoo.com.

2nd Front Page BusinessMirror

A8 Wednesday, October 22, 2014

SC affirms DTI ruling CHINA’S ECONOMY versus PGA Cars Inc. GROWS AT SLOWEST

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By Joel R. San Juan

HE Supreme Court (SC) has given the Department of Trade and Industry (DTI) the green light to enforce its 2006 decision holding a car dealer liable for the defects of a brand-new vehicle that a consumer bought for P3.37 million in 2003.

In a ruling penned by Associate Justice Martin Villarama Jr., the SC held that the April 28, 2006, resolution of the trade secretary “had become final and executory” when PGA Cars Inc. failed to appeal the ruling within 15 days.

The DTI, in the said ruling, affirmed the September 23, 2005, decision of the DTI’s Consumer Arbitration Office (CAO) that directed

PGA Cars Inc. to refund the consumer the purchase price of the BMW sedan amounting to P3.37 million, in addition to the payment of costs of litigation in the amount of P5,000 and P10,000 as administrative fines payable to the DTI. The case stemmed from the petition filed by Concordia Moran on behalf of his deceased husband EmmanuelMoran Jr., who bought a brand-

new BMW car from PGA Cars Inc. “Wherefore, the petition for review on certiorari is granted. The resolutions dated March 13, 2009, and June 25, 2010, in CA-GR SP 107059 are reversed and set aside.

The decision dated April 3, 2007, and order dated October 22, 2008, of the Office of the President are hereby declared null and void. Consequently, the resolution dated April 28, 2006, of the DTI secretary is hereby reinstated and upheld,” the SC ruled.

Court records showed that Moran filed a case against PGA Cars in line with the provisions of the Consumer Act of the Philippines under Republic Act (RA) 7394, which is now augmented by RA 10642, known as the Philippine Lemon Law, “to strengthen consumer protection in the purchase of brand-new motor vehicles.”

The Court reversed a ruling of the Court of Appeals (CA) that dismissed the appeal they filed against the decision of the Office of the President See “SC,” A2

PACE IN FIVE YEARS

A woman waits for customers at a booth selling children’s clothing at the Wangfujing shopping district in Beijing, China, on Tuesday. AP

C

hina’s economic growth waned to a five-year low of 7.3 percent last quarter, raising concerns of a spillover effect on the global economy but falling roughly in line with Chinese leaders’ plans for a controlled slowdown.

The third-quarter figures, released on Tuesday, put China on course for annual growth somewhat lower than the 7.5 percent targeted by leaders, though they have indicated there is wiggle room in their plan. The world’s No. 2 economy grew 7.5 percent from a year earlier in the previous quarter and 7.4 percent in the first quarter.

Communist leaders are trying to steer China toward growth based on domestic consumption instead of overreliance on trade and investment, but the slowdown comes with the risk of politically dangerous job losses and policy-makers bolstered growth in the second quarter with ministimulus measures.

Employment, however, remained strong through the third quarter and the service industries that leaders want to promote have done well this year despite the downturn, which has been focused largely in the property market, economist Julian Evans-Pritchard of Capital Economics said.

“There is still a lot of downward pressure on the economy,” EvansPritchard said. Spending on infrastructure shored up growth in the second quarter but “once that fizzled out, the downward pressure has returned.”

A further slowdown in China’s economy would likely cause some damage to the US economy, the world’s largest, as well as commodity producers such as Australia, Indonesia and Brazil that have grown accustomed to strong Chinese demand.

Mark Zandi, chief economist at Moody’s Analytics, estimates that each 1 percentage point drop in China’s economic growth shaves 0.2 percentage point from annual US growth—equal to the effect of a $20-a-barrel increase in oil prices.

Still, the third-quarter figure beat expectations by many economists of about 7.2 percent, or lower, which could have increased calls for a new round of major stimulus measures that the government can ill afford after a debt fueled investment binge in response to the 2009 global recession.

“Although growth has slowed, it reflects a welcome rebalancing away from excess investment in certain sectors of the economy and is not cause for significant concern,” Evans-Pritchard said in a report.

“With policy-makers now prioritizing employment and economic rebalancing over growth, we don’t think they will feel the need to act aggressively to shore up the economy in response to today’s data,” he said.

China’s growth in industrial production was largely stable, with a rate of 8.5 percent year on year in the first three quarters, down 0.3 point from the first half, the National Bureau of Statistics reported. Investment in factories, real estate and other fixed assets rose 16.1 percent year on year, but real-estate investment lagged at 12.5-percent growth in the first nine months of 2014.

Growth in consumer spending cooled to 11.6 percent in September, the fourth monthly decline in a row.

China’s overall economic growth reached a whopping 14 percent in 2007, but took a hit from the global recession of 2008 and 2009 and has declined steadily since 2012.

The International Monetary Fund said in July that China should lower its growth target to no more than 7 percent for next year, but some analysts expect an even deeper decline, to as low as 6.8 percent. That would be stronger than the US, Japan or Europe, but it would be China’s weakest annual growth in two decades.

On Monday the Conference Board, a New York-based research group, predicted that China’s economic growth would decelerate to 4 percent a year between 2020 and 2025, well below the widespread expectation of 7-percent to 8-percent growth over the next decade. AP

Palawan is top island in the world–US travel mag

T

There were 30 islands that made it to the list of top island destinations. Aside from Palawan, Boracay Island in Aklan also made it to the list, clinching the 12th spot with a rating of 82.683.

The magazine mentioned that Palawan’s natural wonder is “one of the longest underground rivers in the world.”

It also took note of the guided boat tours that would “take visitors down a portion of the waterway, where

karsts, natural rock formations created by dissolving limestone, loom in every direction.”

Meanwhile, it gave Boracay credit for its “gentle coastlines and transporting sunsets.” It also took note of the island’s “thriving nightlife scene.”

Other islands on the list were Kiawah Island, South Carolina; Maui, Hawaii; Kauai, Hawaii; Bazaruto Archipelago, Mozambique; Great Barrier Reef and Whitsunday Islands,

Smartphone ownership continues to rise in PHL

By Lorenz S. Marasigan

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El Nido is one of the islands in Palawan, which emerged as the top island destination in a poll by an award-winning US travel magazine. NONIE REYES

he small island of Palawan, according to most readers in a survey conducted by the US travel publication Conde Nast Traveler magazine, is the top island destination in the world.

Palawan snagged the top spot after receiving a reader’s rating of 88.750 in the magazine’s annual Reader’s Choice Awards for being home to the Puerto Princesa Subterranean River, its critically acclaimed underground river.

www.businessmirror.com.ph

Australia; Santorini and Cyclades, Greece; Saint John, US Virgin Islands; Kangaroo Island, Australia; and Big Island, Hawaii in second to 10th place, respectively.

The Condé Nast Traveler Readers’ Choice Survey started in 1988, while the magazine itself began traveling the globe tracking down journeys since 1987.

Its web site, CNTraveler.com, also allows readers to tap into a living global archive of the very best

hotels, restaurants, shops, itineraries, beaches, villages and villas.

Palawan and Boracay account for two of the most visited tourist destinations in the Philippines, according to the Department of Tourism (DOT).

In fact, the two destinations are featured in the DOT’s official television commercials aired internationally and can also be viewed on video-sharing web site, YouTube. PNA

martphone ownership continues to be on the uptrend across Southeast Asia, with the Philippines seeing a fifth of the expansion in terms of sales volume, a German market-research agency revealed.

In the 12-month period ended in August, smartphone turnover in the seven markets of Singapore, Malaysia, Thailand, Indonesia, the Philippines, Vietnam and Cambodia rose to a high of nearly 120 million units, Gesellschaft für Konsumforschung (GfK) said.

The latest findings for the region reflect a spike in smartphone, including phablets, sales by 44 percent in volume and 24 percent in value compared to the same period a year ago.

“The big developing countries are the ones fueling the strong surge in adoption, as many [areas] outside the big cities are probably just making the switch from their basic feature phone and acquiring their first smartphone,” highlighted Gerard Tan, account director for Digital World at GfK Asia.

Based on the latest data from GfK, fastest-growing markets in terms of volume turnover in the past 12 months were Indonesia, Vietnam and Thailand, which reported 70-percent, 56-percent and 44- percent spike in demand over the previous period. In value terms, it was Vietnam, Indonesia and Thailand, which drew in 52-percent, 32-percent and 31- percent hikes in sales against last year.

At home, smartphone sales volume rose by 22 percent to 6.736 million units in the 12-month period, from 5.527 million units the year prior.

“A key driver fueling the strong market performance, especially in the developing countries, is the introduction of more low-end models by new Chinese manufacturers, making smartphones more affordable and taking competition in the marketplace to an even more intense level,” Tan said.

“These budget smartphone models have gone down particularly well in the developing markets.”

Although international brands dominate the region’s smartphone market, Chinese brands are gaining significant presence, he added.

“Major international brands are losing shares to the Chinese brands in price competition due to the low cost of the latter, which are selling their smartphones, including phablets, within the $50-to-$200 range,” Tan noted.

More than 345 Chinese-branded smartphones now exist across the region. While an internationally branded smartphone averaged at around $253, a Chinese-branded one cost only $159— 58 percent lower.

“Competition in the market will further intensify, as Chinese manufacturers are stepping up their activities in more countries, notably Singapore, the Philippines and Thailand,” Tan said.

Ebola. . .

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when he left for the US last month; he didn’t have a fever or symptoms until days after arriving in Dallas.

For the study, researchers used international flight data and Ebola case tallies to calculate that—without screening—three infected people a month could fly out of the region.

They noted that screening isn’t foolproof: It can take up to three weeks for people exposed to Ebola to develop symptoms, so it is likely some cases will slip through.

The out-of-control epidemic has killed an estimated 4,500 people.

“As the outbreak grows, we will be seeing more international exportations of Ebola,”said Dr. Kamran Kahn of St. Michael’s Hospital in Toronto, the study’s senior author. AP