Businessmirror 10 30 2014

Spatting Tycoons Stunt Philippine Infrastructure growth W

hile Philippine tycoons argue over a typing error in a highway bid and whose shopping mall benefits the most from a train station, commuters are paying the price. A 47-kilometer expressway connecting Manila to the southern provinces has been delayed by a San Miguel Corp.

(SMC) appeal to President Aquino after its bid was rejected on a technicality. »A9

President Aquino (right) and Jaime Augusto Zobel de Ayala AP

Henry Sy

Ramon Ang

bloomberg

BusinessMirror

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

U.N. Media Award 2008

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A broader look at today’s business n

Thursday, October 30, 2014 Vol. 10 No. 22

P25.00 nationwide | 9 sections 46 pages | 7 days a week

PHL’S RANKING UP 13 NOTCHES TO 95TH OVERALL IN 2015WORLD BANK REPORT

INSIDE

Doing business in PHL eases

breast cancer

By Cai U. Ordinario & Catherine N. Pillas

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he Philippines improved its performance in the World Bank’s Ease of Doing Business 2015 report, despite the negative health&fitness impact of the truck ban in Manila on the country’s rankings.

Royals force game 7

Sports BusinessMirror

ROYALS FORCE GAME 7 K

By Ronald Blum The Associated Press

ANSAS CITY, Missouri—Lorenzo Cain hit a two-run single and Eric Hosmer lined a two-run double over shortstop in a seven-run second inning as the Kansas City Royals battered the San Francisco Giants, 10-0, on Tuesday to force a decisive Game Seven in the World Series.

Yordano Ventura, a 23-year-old rookie pitching with a heavy heart and the initials of late Saint Louis outfielder Oscar Taveras on his cap, allowed three hits over seven stifling innings as the Series drew level at three games each.

“This is what we all prepared for. This is why we play the game,” Royals first baseman Eric Hosmer said. As bouncers rolled by infielders and bloops dropped in front of outfielders, the raucous roar at Kauffman Stadium swelled with every hit in the second and then got louder the rest of the night.

Lorenzo Cain looped a two-run single—one of eight Royals to get hits in the seven-run burst—and Hosmer chopped a two-run double over shortstop. “Guys stepped up in a big way tonight,” Cain said. Jeremy Guthrie starts on Wednesday night for Kansas City and Tim Hudson for San Francisco in a rematch of Game Three, won

by Kansas City, 3-2. Hudson, 39, will become the oldest Game Seven starter in Series history.

“We’re confident,” the Royals’ Billy Butler said.

“Jeremy, every time out, gives us a chance to win.”

Lurking is Madison Bumgarner, ready to pitch in relief after suffocating the Royals on a total of one run in winning Games One and Five. Giants Manager Bruce Bochy elected not to start him on two days’ rest.

“This guy is human. I mean, you can’t push him that much,” Bochy said. “He’ll be available if we need him, but to start him, I think that’s asking a lot.” Kansas City can be comfortable in this bit of history: Home teams have won nine straight Game Sevens in the Series since Pittsburgh’s victory at Baltimore in 1979, including the Royals’ 11-0 rout

C | T, O ,  mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

KANSAS CITY CAN BE COMFORTABLE IN THIS BIT OF HISTORY: HOME TEAMS HAVE WON NINE STRAIGHT GAME SEVENS IN THE SERIES SINCE PITTSBURGH’S VICTORY AT BALTIMORE IN 1979, INCLUDING THE ROYALS’ 11-0 ROUT OF SAINT LOUIS IN 1985. AND THE GIANTS HAVE LOST ALL FOUR OF THEIR WORLD SERIES FINALES PUSHED TO THE LIMIT.

of Saint Louis in 1985. And the Giants have lost all four of their World Series finales pushed to the limit.

“I had a very, very strong feeling that whoever won Game Six was going to win Game Seven,” Royals Manager Ned Yost said.

“We have to wait until tomorrow to see if my theory’s correct.” Teams with the home-field advantage have won 23 of the last 28 titles, including five in a row. This Series has followed the exact pattern of the only other all-wild card matchup in 2002, when the Giants won the opener, fell behind 2-1, took a 3-2 lead and lost the last two games at Anaheim.

“I can’t wait to get out there tomorrow and have some fun,” Hudson said.

There was a moment of silence before the game in honor of Taveras, the 22-year-old killed in an automobile accident on Sunday in the Dominican Republic. Ventura wrote “RIP O.T #18” in silver marker on the left side of his cap and brought a Dominican flag to his postgame interview. “From the minute that I found out about Oscar, I said this game was going to be dedicated to him,” Ventura said through a translator.

“I prepared myself mentally and physically for this game, and I’m very proud to be a Dominican, and that’s why I brought the flag.”

He escaped his only trouble in the third, when he walked the bases loaded with one out and got Buster Posey to ground a fastball into a double play. Ventura threw fastballs on 81 of 100 pitches, reaching

up to 100 mph (160 kph). Yost was able to rest the hardthrowing back of his bullpen: Kelvin Herrera and Wade Davis enter Game Seven with two days off and closer Greg Holland with four. Kansas City out-hit the Giants 15-6 in another blowout in the first Series in which five games were decided by five runs or more.

All nine Royals had hits by the third, matching the mark set by Arizona against the Yankees in Game Six in 2001.

Cain drove in three runs and was among six Royals with two hits each.

Mike Moustakas homered

YORDANO VENTURA pitches with a heavy heart but allows just three hits over seven stifling innings as the Series drew level at three games each. AP

in the seventh against Hunter Strickland, ending a 36-inning homerless streak in the Series, the longest since 1945.

Peavy was charged with five runs and six hits in 1 1-3 innings, leaving with a career Series record of 0-2 with a 9.58 ERA in three starts. His record at Kauffman Stadium is 1-7 with a 7.28 ERA. “It’s hugely disappointing. It’s as disappointing as it can get,” he said.

San Francisco had scored 15 straight runs entering the night, but the Royals rocked Peavy and Yusmeiro Petit in the 32-minute bottom of the second. Moustakas grounded an RBI double over the first-base bag, past Brandon Belt and down the right-field line.

Alcides Escobar hit a one-out bouncer to Belt.

With Peavy yelling “Home!” Belt checked Salvador Perez at third and then tried to out-race Escobar to first base rather than throw to second baseman Joe Panik, who already was at the base. Escobar slid past Belt’s failed tag attempt and into first to reach on the infield hit. “It’s a play you can definitely learn from,” Belt said. “Unfortunately, it happened in the World Series.”

HUDSON VS GUTHRIE KANSAS CITY, Missouri—After long waits to make their World Series debuts, Tim Hudson and Jeremy Guthrie will get another opportunity to pitch on Wednesday night.

This time, everything is on the line.

Guthrie, who had never reached the postseason before this year, will be on the mound for Kansas City in Game Seven. Once again, he will face the 39-yearold Hudson, who finally made it to the World Series with San Francisco after 16 seasons in the majors.

“I’m no different than anybody else. As a kid, you think about it. As a big leaguer, you think about it,” said Hudson, set to become the oldest Game Seven starter in Series history. “You wonder if you’re going to have an opportunity to do it. Sixteen years in the big leagues, I’m finally getting that chance. I can’t wait to get out there and have some fun.”

The 35-year-old Guthrie helped pitch Royals to a 3-2 win last Friday night in San Francisco, giving them a 2-1 lead in the Series. But after the Giants rallied to win the next two at home, the teams returned to Kansas City with the Royals needing a victory to force Game Seven.

They got it—a 10-0 rout—behind a resurgent offense that relentlessly peppered Giants starter Jake Peavy and reliever Yusmeiro Petit, and a brilliant start by rookie Yordano Ventura.

“A lot of guys had this weird feeling it would come to this,” Giants outfielder Hunter Pence said afterward, “and here we are.”

Guthrie allowed two runs over five innings in his World Series debut, and Hudson was nearly as sharp, allowing three runs on four hits while pitching into the sixth. But when the Giants were unable to score a tying run off the Kansas City bullpen, Hudson was

stuck with the loss.

Now, he has a chance to bag the biggest win possible. “I mean, obviously I’m going to go as deep as I can,” Hudson said. “Hopefully I can give a quality six, seven innings out there and turn it over to those guys in the ‘pen.”

That bullpen could be even stronger than normal with ace Madison Bumgarner, who won Game One and pitched a shutout in Game Five, available for a

THIS time, everything is on the line as Tim Hudson and Jeremy Guthrie get another opportunity to pitch on Wednesday night. AP

be Wednesday night, Bumgarner gave a predictably preposterous answer.

“I said maybe 200. No, I don’t know. I don’t even know if I’m going to be called on. But if you are, as long as you’re getting outs and you’re not hurting...” he said.

First things first, though: Bumgarner is excited for his friend Hudson.

“There couldn’t be a better story for Huddy. I know he’s going to be ready,” Bumgarner said.

As for playing a Game Seven, “if you want to be a baseball player, that’s what you think about.”

The Royals will also have a fresh bullpen after Ventura’s sublime start. Kansas City Manager Ned Yost has even said his star trio of Kelvin Herrera, Wade Davis and All-Star closer Greg Holland would be available to pitch two innings apiece if needed.

“That keeps all of our big guns fresh and ready to go,” Yost said.

The Royals also will have a bit of history on their side. When they were last in the World Series in 1985, they also faced a 3-2 deficit returning home against Saint Louis. They won Game Six, made famous by umpire Don Denkinger’s blown call at first base, and then took Game Seven in an 11-0 rout for their only championship. The Giants, meanwhile, had a 3-2 lead this year for the third time in franchise history. Just like in 1924 and 2002, they lost Game Six. Both of those years, they lost Game Seven as well.

“We’ll take any win. Close, blowout, any win,” Royals outfielder Lorenzo Cain said. “Guys stepped up and we definitely needed everyone in our lineup. We needed to swing the bats and have a good outing from our starter. We need that again. I hope the entire team gets hot.” AP

sports

relief stint on Wednesday night.

Bumgarner has allowed one run over 16 innings in his two starts against Kansas City.

“We’ll see where he’s at and how he’s doing out there,” Giants Manager Bruce Bochy said. “I can’t tell you exactly how far he could go or how many pitches he could go. I think you read him and see how he’s doing out there.”

Asked what his pitch limit might

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kurds cross turkey B3-6 Thursday, October 30, 2014

The World BusinessMirror

Girls trying to join jihadis confused

D

ENVER—One of three girls who authorities say tried to join Islamic State militants in Syria was confused about what her role would be if she had actually made it there, the girl’s father said on Tuesday.

The Federal Bureau of Investigation (FBI) says a 16-year-old Somali girl and her friends, 15- and 17-yearold sisters of Somali descent, were headed toward Turkey en route to Syria when authorities stopped them on October 20 at the Frankfurt, Germany airport. They sent them back to Denver, where FBI agents again interviewed them before releasing them to their parents without pressing charges.

“She told me they were going to get there and somebody is going to contact them,” said the father of the 16-yearold, who spoke to The Associated Press on the condition of anonymity because he is concerned for the girls’ safety. “I ask her, ‘Who’s that person?’

She actually didn’t have a clear idea about what’s going on.

They’re just like, you know, stupid little girls.

They just want to do something, and they do it.”

They’re safe now, but the father said he is still troubled by lingering questions about their intentions, who recruited them online and how they were so easily able to board a plane and head overseas.

The FBI is focusing on what contacts they had in Syria, having searched the girls’ computers for clues.

“What they did is unacceptable, and they changed their lives, and they changed our lives,” the father said, adding that he pulled his daughter out of school. She hasn’t had contact with her friends. She told her father she was afraid to talk to him about going to Syria because she knew he would oppose it. “She realizes she made a mistake.”

He said he became concerned on October 17, when his daughter’s high school called to say she had not shown up for classes. He texted her, and she responded that she was just late, but she didn’t return home, and her brother mentioned a disturbing Twitter conversation from her account.

“She asked her friends to pray for

her because she and the other two girls...and at that time, I just knew that something really bad was going to happen,” he said.

Then, he noticed her passport missing. He called the FBI and his state lawmaker, Rep. Daniel Kagan, for help. Authorities said the girls had saved their money and stole from their parents to buy their tickets in cash at a Lufthansa counter at Denver International Airport. Their overseas trip raised no red flags.

The US government doesn’t have any restrictions on children flying alone, domestically or internationally.

Most US airlines allow children 12 and older to fly alone but often with restrictions on international flights.

The girl left behind her laptop, which showed she had been researching whether minors could travel alone and if an entry visa to Turkey was required. The father wasn’t sure how his daughter, a typical high-school girl who likes going to the movies and the mall, was lured to terrorism online.

Officials have said one of the girls had planned the voyage and encouraged the others to come along. AP

Militias vow to repel assault in eastern Libya

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AIRO—Islamist militias in Libya’s war-ravaged Benghazi have vowed to repel advancing pro-government forces who have been fighting them for nearly two weeks for control of the eastern city.

In a Tuesday statement, The Shura Council of Benghazi Revolutionaries, an umbrella group for the city’s

hard-line militias, vowed “it’s time for the battle.”

They were addressing supporters of the former Libyan Gen. Khalifa Hifter, who unilaterally led an offensive against the militias in the spring.

Hifter and allied army units were forced to leave much of the city in

August after militias overran army barracks. However, on October 15, he, along with the internationally recognized government, joined ranks and led an anti-Islamist offensive to retake the city.

Over the past days, the army units have been advancing inside Benghazi. AP

Iraqi Kurds cross Turkey to fight militants in Syria

In this image taken from video, people welcome peshmerga soldiers as they arrive at the Ibrahim Khalil border entrance in Zakho, Iraq, on Wednesday. AP/APTN

RBIL, Iraq—A group of Iraqi Kurdish peshmerga troops arrived in Turkey early on Wednesday and headed toward the border to help their Syrian brethren fight Islamic State (IS) extremists in the embattled town of Kobani.

Earlier, they received a rousing send-off from thousands of cheering, flag-waving supporters as they left the Iraqi Kurdish capital of Irbil by plane for Turkey.

The unprecedented mission by the 150 fighters to help fellow Kurds in their battle with the IS group came after Ankara agreed to allow the peshmerga to cross into Syria via Turkey—although the Turkish prime minister reiterated that his country would not be sending any ground forces of its own to Kobani.

The peshmerga forces landed early Wednesday at the Sanliurfa airport in southeastern Turkey, according to the Associated Press video journalists. They left the airport in buses escorted by Turkish security forces and are expected to travel to Kobani through the Mursitpinar border crossing.

Prime Minister Ahmet Davutoglu told the BBC that sending the peshmerga was “the only way to

help Kobani, since other countries don’t want to use ground troops.”

The IS group launched its offensive on Kobani and nearby Syrian villages in mid-September, killing more than 800 people, according to activists.

The Sunni extremists captured dozens of Kurdish villages around Kobani and control parts of the town. More than 200,000 people have fled across the border into Turkey. The US is leading a coalition that has carried out dozens of air strikes targeting the militants in and around Kobani.

The deployment of the 150 peshmerga fighters, who were authorized by the Iraqi Kurdish government to go to Kobani, underscores the sensitive political tensions in the region.

Turkey’s government views the Syrian Kurds defending Kobani as loyal to what Ankara regards as an extension of the Kurdistan Workers’ Party, or PKK. That group has waged

a 30-year insurgency in Turkey and is designated a terrorist group by the US and the North Atlantic Treaty Organization.

Under pressure to take greater action against the IS militants— from the West, as well as from Kurds inside Turkey and Syria—the Turkish government agreed to let the fighters cross through its territory.

But it only is allowing the peshmerga forces from Iraq, with whom it has a good relationship, and not those from the PKK. A separate Iraqi Kurdish peshmerga convoy of Toyota Land Cruisers and trucks carrying cannons and machine guns crossed into Turkey early on Wednesday at the Ibrahim Khalil border crossing at Zakho in northern Iraq en route to Kobani.

Peshmerga soldiers carrying Kurdish flags were atop some of the vehicles as they headed from Irbil to the border crossing. The troops made the victory sign for the cameras. An ambulance and government vehicles blaring their sirens accompanied the convoy.

Scores of people waited by the side of the road in villages for the troops to pass. Thousands of people awaited them at the border.

The crowd sang and chanted traditional peshmerga songs and had to be pushed back by every vehicle that tried to make its way through the masses. Many people carried colorful Kurdish flags and portraits of the Iraqi Kurdish regional President Massoud Barzani. AP

Kerry expresses solidarity with Canada

O

TTAWA, Ontario—The United States and Canada vowed on Tuesday to step up already close counterterrorism and border security cooperation as US Secretary of State John F. Kerry paid condolences to the Canadian people following last week’s terror attacks.

On his first trip to Canada since taking office, Kerry flew to Ottawa and went immediately to the National War Memorial to lay a wreath in honor of Cpl. Nathan Cirillo, the Canadian soldier killed there by a gunman believed to have been inspired by the Islamic State group.

The attack on Wednesday was the second in three days in Canada, after an earlier incident in Quebec.

“There is nowhere safe for those who would pervert the teachings of a great religion, betray their neighbors and line up on the side of such pernicious groups such as al-Qaeda and ISIL [Islamic State of Iraq and the Levant],” Kerry told reporters after meeting Canadian Foreign Minister John Baird.

“Together, on this side of the Atlantic and where necessary overseas, we will defeat the advocates and practitioners of terror, expose their hypocrisy and we will win the battle of ideas,” he said.

Standing beside Kerry, Baird stressed Canada’s resolve in fighting extremism.

“We cannot allow there to be a safe haven for this medieval savagery, or a launchpad for attacks on our home soil,” Baird said.

The pair of attacks in Canada have prompted concerns among some in the US over security along the world’s longest undefended border. But Baird noted that there has never been a successful terrorist attack across either border and officials traveling with Kerry said that while there is always room for improvement, Washington is satisfied with the current state of cooperation with Ottawa on the matter.

That said, Kerry pointed out that the US and Canada “are always looking at ways to cooperate more” and would “continue to intensify our law enforcement, border security and intelligence sharing.” He did not elaborate.

The officials with Kerry said there were virtually no areas of disagreement between the neighbors on big international issues, including the fight against extremism, the effort to halt the spread of the deadly Ebola virus and the crisis in Ukraine. Indeed, on Ukraine both

Kerry and Baird commended the country on its recent parliamentary elections and demanded that Russia halt any intervention in the east, where Kerry said the US would not recognize planned upcoming elections in areas held by pro-Russian separatists.

During his brief visit, Kerry also met with Canadian Prime Minister Stephen Harper and with members of Parliament.

One area of US-Canadian friction—delays and uncertainty in the Obama administration’s decision over the Keystone XL pipeline—was raised in Kerry’s meeting with Baird, both men said. But each played down dissension on the matter.

Kerry said a State Department review of the project was still pending and that while he would like to make a decision on it “sooner rather than later,” he would not do so until due diligence had been paid to its pros and cons.

The pipeline, much wanted by Canada and supported by conservatives in the US, is fiercely opposed by many environmental groups.

Baird said the pipeline issue was “important” for Canada and that he appreciated the seriousness with which the review was being taken. AP

world

borders; enforcing contracts; and resolving insolvency.

This year the Philippines ranked high, 16th out of 189, in getting electricity; and ranked 50th out of 189 in resolving insolvency.

Despite being ranked relatively high at 65th out of 189 in trading across borders, the World Bank noted that the imposition of the truck ban was having a reverse impact on the country’s performance in this indicator.

The change, the bank said, “was making it more difficult to do business” in the country. The truck ban, however, has recently been lifted by the City of Manila, and this has improved the flow of goods nationwide.

“In the Philippines trading across borders became more difficult because of a new city ordinance restricting truck traffic in Manila,” the report stated.

See “Doing business,” A12

b3-6

PURISIMA: “Total revenues amounted to P154.7 billion in September, higher than last year’s comparable figures by 21.4 percent and exceeding the program by 1.8 percent. Year-to-date total revenues reached P1.425 trillion, a growth of 12.5 percent year on year.”

saint moritz Our destiny

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EAR Lord, inspire our thoughts for they become our words. May we speak Your words for they become our actions. Lead our actions for they become our service to You. Let our good habits become our character for in turn lead us to our destiny. Amen.

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

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

Life

Thursday, October 30, 2014

Saint Moritz: Where the world’s wealthy go in winter

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By David Cagahastian

BETWEEN THE LINES... »D4

BusinessMirror

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»

B J B | The Charlotte Observer

IF you’re looking for the ultimate winter getaway, visit the Badrutt’s Palace Hotel in Saint Moritz, Switzerland.

VES GARDIOL is general manager of Badrutt’s Palace Hotel (www. badruttspalace.com), the famous resort in Saint Moritz, Switzerland.

Gardiol, a 53-year-old native of Lausanne, Switzerland, has been at the Palace for a decade.

How about a little background about the hotel?

Saint Moritz is in the Swiss Alps, and this year marks 150 years of winter sports here; Saint Moritz has hosted the Olympics twice: 1928 and 1948. The hotel was built in 1896 as a winter destination, and the Palace itself has always been the place to be for celebrities and rich people of the world.

C  D

life

ebola-ready Government health workers practice wearing Ebola protective suits on the

first day of training on hospital management for Ebola virus disease at the Research Institute for Tropical Medicine in Alabang, Muntinlupa City, on Tuesday. The Department of Health and the World Health Organization have teamed up to conduct training for government health workers, private hospitals and local government units to prepare and help prevent the spread of the Ebola virus. The country remains to be Ebola-free. AP/Bullit Marquez

9-month budget U.S. AIRLINES KEEP FARES Palace gives cryptic shortfall widened DESPITE FUEL-COST DROP reply to Calax uproar to ₧31.1 billion A

news@businessmirror.com.ph

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In the Ease of Doing Business 2015 report, the Philippines ranked 95th out of 189 countries, a considerable jump from last year’s ranking of 108th overall.

“In the Philippines improvements in resolving insolvency, getting electricity, registering property and paying taxes enhanced the country’s ranking from 108 in 2014 to 95 in 2015,” the World Bank said.

“Measured against global best practice or distance to frontier [DTF] in business regulations, the country’s performance [62.08] puts the Philippines in the same range as Vietnam [64.42] and Indonesia [59.15],” it added.

The Doing Business report has 10 indicators: starting a business; dealing with construction permits; getting electricity; registering property, getting credit; protecting minority investors; paying taxes; trading across

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he government incurred a P5.2-billion budget deficit in September, or P13.4 billion lower than the budget shortfall incurred in September 2013, the Department of Finance (DOF) said on Wednesday.

Finance Secretary Cesar V. Purisima said the lower fiscal deficit for September was due to the improved efficiency in the collection activities of the Bureau of Internal Revenue (BIR).

The P5.2-billion budget deficit in September brought the total budgetary shortfall for the first three quarters of the year to P31.1 billion, or P70.2 billion lower than in the same period last year.

“Total revenues amounted to P154.7 billion in See “Budget shortfall,” A12

PESO exchange rates n US 44.7810 n japan 0.4140

ir travelers filling planes in the US at a record pace are missing out on the fuel savings that motorists are finding at the pump.

Even as jet kerosene heads for its first annual decline since 2008, airlines are relying on strong ticket demand to hold the line on prices. US carriers have no incentive to start offering fares for less—and they say they won’t.

“Just like gasoline prices drop for the consumer, why not airline prices?” said Hank Levenson, who was flying this month to Orlando, Florida, from Dallas for his law-enforcement training business. “Coming from the same refinery, the same source, why not pass it on to the consumer? That’s what good customer service is all about.”

Crude oil’s worldwide slide in 2014 has cut jet fuel by 22 percent, a boost for US carriers because it’s their largest cost. At the same time, one-way domestic coach flights averaged $466 this year through September, 1.7 percent more than for all of 2013, according to data compiled by Bloomberg Intelligence.

“You were willing to pay that price yesterday, so what’s different?” said Bob Mann, a former American Airlines executive who is now president of aviation consultant R.W. Mann & Co. in Port Washington, New York. “Airlines have the pricing power. Why are they ever going to give it up?”

Shares surge

Spending less and charging more has been good for airline earnings—and share prices. Excluding some onetime items, the six largest US carriers posted more than $3.96 billion in third-quarter profits. The Bloomberg US Airlines Index surged See “U.S. airlines,” A9

By Butch Fernandez

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alacañang on Wednesday reacted cautiously to moves by local and foreign business groups questioning President Aquino’s “inclination” to reopen the bidding for the P35.2-B CaviteLaguna Expressway (Calax) project.

In separate statements earlier this week, various trade groups warned that the government’s pronouncement to rebid the toll-road project was “ill-advised,” and could dampen investors’ confidence in doing business in the country.

On Wednesday, however, Palace officials gave cryptic replies to the BusinessMirror’s queries, when asked about concerns raised by worried business groups that rebidding the Calax deal could also derail the Aquino administration’s flagship Public-Private Partnership (PPP) Program, covering mostly big-ticket infrastructure projects.

“The case will be decided on the merits in accordance with law and in consonance with the national interest,” Communications Secretary

Herminio B. Coloma Jr. said.

For his part, Palace Chief Spokesman Edwin Lacierda would only say that “the President already mentioned his inclination [to rebid Calax]” during Mr. Aquino’s appearance at a forum hosted by the Foreign Correspondents Association of the Philippines (Focap) last week.

At the Focap forum, President Aquino indicated he was inclined to order a rebidding of the Calax road project, initially won by the AyalaAboitiz Team Orion consortium with an P11.65-billion premium offer, after the disqualified bidder, San Miguel Corp.’s Optimal Infrastructure Development Inc. (OIDI), was found to have submitted a much higher P20.1-billion offer.

Both the Ayala-Aboitiz group and San Miguel’s OIDI have assured Mr. Aquino they would not go to court if the President decides to go ahead or abort a planned rebidding, whose date has yet to be set by the Department of Public Works and Highways.

Continued on A12

n UK 72.2631 n HK 5.7728 n CHINA 7.3252 n singapore 35.2135 n australia 39.6257 n EU 57.0331 n SAUDI arabia 11.9359 Source: BSP (29 October 2014)

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News BusinessMirror

Thursday, October 30, 2014

3-DAY EXTENDED FORECAST OCTOBER 30, 2014 | THURSDAY

TODAY’S WEATHER Tail-end of a cold front is the extended part of the boundary, which happens when the cold air and warm air meet. This may bring rainfall and cloudiness over affected areas.

Northeast Monsoon locally known as “Amihan”. It affects the eastern portions of the country. It is cold and dry; characterized by widespread cloudiness with rains and showers.

TAIL-END OF A COLD FRONT AFFECTING EASTERN SECTION OF CENTRAL AND SOUTHERN LUZON. NORTHEAST MONSOON AFFECTING NORTHERN LUZON. (AS OF OCTOBER 29, 5:00 PM)

SBMA/CLARK 24 – 30°C METRO MANILA 24 – 28°C

TAGAYTAY CITY 21° – 26°C

NOV 1

SATURDAY

24 – 28°C

23 – 28°C

TUGUEGARAO

22 – 29°C

22 – 30°C

23 – 31°C

22 – 31°C

NOV 2

SUNDAY

24 – 30°C

22 – 29°C

TACLOBAN

24 – 30°C

23 – 30°C

23 – 30°C

22 – 31°C

CAGAYAN DE ORO

23 – 31°C

24 – 31°C

24 – 31°C

24 – 31°C

25 – 32°C

25 – 33°C

23 – 32°C

23 – 32°C

23 – 32°C

15 – 22°C

SBMA/ CLARK

23 – 30°C

24 – 30°C

24 – 30°C

ZAMBOANGA

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

LEGAZPI

PUERTO PRINCESA CITY 24 – 31°C

TACLOBAN CITY 24 – 30°C

METRO CEBU 24 – 30°C CAGAYAN DE ORO CITY 23 – 31°C ZAMBOANGA CITY 24 – 33°C

PUERTO PRINCESA

ILOILO/ BACOLOD

24 – 27°C

23 – 27°C

SUNSET

MOONSET

MOONRISE

5:50 AM

5:28 PM

11:11 PM

11:19 AM

21 – 26°C

23 – 27°C

NEW MOON HALF MOON

23 – 31°C

23 – 30°C

OCT 30

10:48 PM

CELEBES SEA

9:50 AM

- 0.07 METER

1:03 AM

1.06 METER

Partly cloudy to cloudy skies with isolated rain showers and/or thunderstorms Cloudy skies with rain showers and/or thunderstorms.

24 – 29°C

23 – 29°C

23 – 29°C

Partly cloudy to at times cloudy with rain showers.

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The Nation

A4 Thursday, October 30, 2014 • Editor: Dionisio L. Pelayo

BusinessMirror

Pimentel: Inclusion of terminal fee in tickets violation of law on OFWs

‘S

TOP the implementation of the proposed integration of terminal fees with airplane tickets by November 1, or face charges.”

This was the advice of Sen. Aquilino “Koko” Pimentel III to the Department of Transportation and Communications (DOTC) and the Manila International Airport Authority (Miaa).

Pimentel said integration of terminal fees in the price of airline tickets violates the law exempting overseas Filipino workers (OFWs) from paying such fees.

“They want to violate an existing law exempting OFWs from paying terminal fees.

What for? Removing the terminal-fee counters at the airport will not ease congestion because you will have another line where our modern-day heroes need to line up to refund a fee that they are legally exempted from paying.”

“This new scheme should be scrapped because it is illogical, legally questionable, and extremely unfair to OFWs,” Pimentel added.

Under Miaa Circular 08, terminal fees otherwise known as “international passenger service charge” (IPSC) amounting to P550 per passenger will be integrated in all air tickets, subject to remittance to Miaa by international airlines.

Filipino migrant workers who purchase their tickets in the Philippines will be able to claim their exemption by showing their overseas employment certificate (OEC) issued by the Philippine Overseas Employment Adminis-

tration (POEA). However, for tickets that OFWs will purchase online and outside the country, the IPSC will be collected by default subject to refund by returning OFWs upon presentation of their OECs at the airport’s designated counters or through the Miaa office.

Pimentel echoed the position taken by Labor Secretary Rosalinda D. Baldoz in her letter to Transportation Secretary Joseph Emilio Abaya, which the department received on October 7. In that letter, Baldoz said: “While there is a refund scheme the Miaa has put in place for terminal fees to be integrated into the airline tickets, we reiterate our earlier position articulated by our representatives during the meetings called

by Miaa to continuously and automatically exempt the OFWs from paying the IPSC even for tickets purchased abroad or via online.

This is pursuant to Republic Act 8042 as amended by RA 10022 that mandates the exemption of migrant workers from the payment of the travel tax, documentary stamp and airport fee upon proper showing of proof of entitlement which is the OEC issued by the POEA.” Pimentel said the Department of Labor and Employment’s (DOLE) position is clear: Miaa and the DOTC should undertake all the preparations and systems to ensure the continued automatic exemption of OFWs

news@businessmirror.com.ph

Senator: Aquino correct in not eyeing another term

By Recto Mercene

P

RESIDENT Aquino is correct in saying that efforts by some quarters to make him seek a second term is not the right solution for economic growth, Sen. JV Ejer PIMENTEL: “This new cito, chairman of Senate Committee on Ecoscheme should be scrapped nomic Affairs said on Wednesday. because it is illogical, le “I concur with the President that a second gally questionable, and term may create political turmoil and divisiveextremely unfair to OFWs.” ness, and is counterproductive in attaining economic development.”

“I hope the group who call themselves More 2 Come headed by a certain Melvin Matibag, RJ Echiverri and several individuals behind from payment of terminal fee and other these efforts for a second term will now refees provided by existing laws. frain from campaigning,” Ejercito added.

“We cannot have two major departments “People in the administration and their at odds with each other over the collection supporters who are advocating for term exof terminal fees by airline companies. By detension should bear in mind that the parents fault, this scheme will deprive our OFWs of of the President themselves, President Cory a benefit that they have been enjoying since and Senator Ninoy, were against presidential1995, when the Migrant Workers’ Act was term extensions,” Ejercito said.

Mr. Aquino received plenty of brickbats in passed. While we favor moves to ease the August, when he said he was open to a second congestion in our airport terminals, existterm and to constitutional change. ing laws must be respected,” Pimentel said.

However, he suddenly changed his tune He lamented that airline companies should on Tuesday, when he said that having a secnot be caught between such differences in ond term would not be the “right solution” opinion between the DOTC and Dole. to sustain the Philippines’s economic growth “Let’s resolve these issues by hearing all beyond 2016. That was the most categorical sides, and agreeing on a common interpretaanswer he has made to the question of whether tion of what the law actually says. Definitely, he is open to extending his term. we will question the Dotc and Miaa on why “There are some quarters that were saying I they continue to insist on a November 1 impleshould try and go for a second term. I don’t think mentation of the Ipsc scheme even after getthat’s a right solution,” Aquino said at ther genting the position of the secretary of labor, as eral membership meeting of the Semiconductor well as various OFW groups about this matter.” and Electronics Industries in the Philippines.

The senator will file a Senate resolution President Aquino’s threat to the possibility calling for an inquiry into Miaa’s Memoranof a second term came shortly after the Sudum Circular 08, series of 2014. Recto Mercene

EJERCITO: “People in the administration and their supporters who are advocating for term extension should bear in mind that the parents of the President themselves, President Cory and Senator Ninoy, were against presidentialterm extensions.”

preme Court declared as illegal part of the Disbursement Acceleration Program, which was also followed by impeachment calls against him by several groups.

Analysts say that the view, expressed by his critics, that the Chief Executive has become a “lame duck,” had forced some of his advisers to tell President Aquino to accept a secondterm extension so that the President’s critics would stop.

The President’s decision not to pursue a second term extension also came about following a survey, saying six out of 10 Filipinos do not want a second term for Mr. Aquino through amendments to the 1987 Constitution.

The Pulse Asia’s latest survey conducted from September 8 to 15, saying 62 percent do not want Aquino in power beyond 2016 while only 38 percent favor a second term for President Aquino.

Pulse Asia said opposition to Charter change is majority sentiment in each geographic area and socioeconomic grouping, and that there is an increase in the overall level of opposition to Cha-cha now or at any other time (+14 percentage points).

CA affirms injunction vs Burgundy

By Joel R. San Juan

T

HE Court of Appeals (CA) has affirmed the injunction order issued by the Regional Trial court in Pasig City in 2012 enjoining the Department of Energy (DOE) from terminating its three service contracts (SCs) with Burgundy Global Exploration Corp. (BGEC) for oil-gas exploration in specified areas off the coast of East Palawan.

In a nine-page ruling penned by Associate Justice Elihu Ybañez, the CA’s Twelfth Division held that there was no grave abuse of discretion on the part of the trial court in issuing the writ of preliminary injunction in favor of Burgundy.

It held that Burgundy has a “clear and unmistakable right to be protected and this right was violated by the DOE in prematurely terminating the service contracts without amicabkle settlement and arbitration.”

It can be recalled that the DOE awarded three SCs in 2006 and 2008 to Burgundy which were supposed to run for seven years consiting of six subphases.

From 2007 to 2010, Burgundy sought several extension of the periods for the completion of subphase one

Thank you and protect us

of each SC due to various reasons.

Most of the requests for extention were granted but Burgundy’s last request for extension of period for the three SCs was denied by the DOE in 2011.

Burgundy asked the DOE to refer the matter for consultation and arbitration pursuant to the provisions of its SCs before deciding on a final termination of the agreement.

The DOE, however, rejected Burgundy’s request and informed the latter that its SCs were to be auctioned off to other companies.

This prompted Burgundy to seek redress before the lower court which issued its a preliminary injunction on June 4, 2012.

Burgundy is a Filipino-owned corporation and a member of the Burgundy Group of Companies which has vast experience in bringing foreign investments into the country.

Among the cancelled contracts were SCs 67 and 68, which cover 648 hectares and 983,000 hectares, respectively.

Also subject of the case is SC 61 covering 1.3 million hectares in southestern Palawan.

A leader of the Bukidnon Tribe perform the “Pangagda” or Pangahikaw ritual by offering food at the Pan-ay River in Tapaz, Capiz, during the synchronized Indigenous Peoples Rights Act (Ipra) Hour on Wednesday. The Pangahikaw is usually performed by a Babaylan. It is a tribal ritual of thanksgiving and asking for blessings and protection. The Ipra Hour marks the beginning of the 2014 Ipra Week celebration, led by the National Commission on Indigenous Peoples. The Ipra was enacted into law 17 years ago.

The Nation BusinessMirror

news@businessmirror.com.ph

Thursday, October 30, 2014 A5

Graft, plunder raps filed vs Drilon, others

A

By Jovee Marie N. dela Cruz

FORMER city administrator of Iloilo on Wednesday filed graft and plunder charges before the Ombudsman against Senate President Franklin M. Drilon, Tourism Secretary Ramon R. Jimenez Jr., Public Works Secretary Rogelio L. Singson and Mark Lapid, COO of the Tourism Infrastructure and Enterprise Zone Authority (Tieza), in connection with the alleged overpricing in the construction of the Iloilo Convention Center (ICC).

In an 18-page complaint-affidavit, Manuel Mejorada also charged Public Works Undersecretaries Jaime Pacanan and Romeo Momo, P u b l i c Wo r k s Western Visayas drilon Regional Director Edilberto Tayao, and Public Works Western Visayas Bids and Awards Committee Chairman Marilyn Celiz with graft and plunder.

Mejorada accused the said individuals of violation of Republic Act (RA) 7080, or the plunder law, malversation of public funds under the Revised Penal Code, Section 3 of RA 3019 of the Anti-Graft and Corrupt Practices Act, dishonesty and grave misconduct.

Also facing criminal complaints were W.V. Coscolluela & Associates and Hilmarc’s Construction Corp. (HCC), the contractors of the P700-million pet project of Drilon.

Hilmarc is also contractor of the allegedly overpriced Makati City Hall Parking Building II. “The contract is manifestly and grossly disadvantageous to the government because it is overpriced by as much as P488 million,” Mejorada said.

Party-list Rep. Terry Ridon of Kabataan has said the P700-million ICC, construction of which was partly financed

by Drilon, who allocated P200 million of his Priority Development Assistance Fund to the project in 2013, and another P100 million from his share of Malacañang’s Disbursement Acceleration Program (DAP), which was later outlawed by the Supreme Court.

Other sources of funds for the ICC’s construction include the P200 million from the Tieza and another P200 million from the Department of Public Works and Highways (DPWH).

The complainant said the construction of the ICC is only a disguise “for the proponent, Drilon, to build an avenue for corruption with public funds coming from DAP, which the Supreme Court had declared as illegal and unconstitutional.”

More expensive than Bird’s Nest Stadium

IN House Resolution (HR) 1466, Ridon said Drilon’s pet project is more expensive than the world-famous Bird’s Nest Stadium in Beijing.

HR 1466 calls on the House Committee on Public Works and Highways to “conduct an inquiry, in aid of legislation, on the possible cases of corruption and overpricing involving government infrastructure projects contracted with Hilmarc’s Construction Corp. by local and national government officials to determine and exact accountability.”

“In the past decade, HCC was able to clinch no less than 20 government infrastructure projects. In some cities, including Iloilo and Makati, HCC was able to clinch two or more government infrastructure projects in consecutive years.

Several government projects entered by HCC have been the center of local and national controversies involving issues of corruption and overpricing,” Ridon said in HR 1466.

He added that HCC was not only involved with the controversial Makati parking building, but also with the botched P550-million call-center project of the Commission on Higher Education in 2007, and several other government

Guimaras cleared of NPA rebels

T

By Rene Acosta

HE Army’s Third Infantry “Spearhead” Division (3ID) turned over on Wednesday the responsibility over the internal peace and security efforts in Guimaras to the Provincial Peace and Order Council (PPOC) after driving New People’s Army rebels out of the island-province.

Col. Eric Uchida, 301st Infantry Brigade commander handed over the responsibility to the provincial government during the signing of a joint memorandum of agreement (MOA) held in Jordan, Guimaras.

The MOA was signed by Gov. Samuel Guarin, who is also the chairman of the PPOC; Chief Supt.

Josephus Angan, Western Visayas police commander and Maj. Gen. Rey Leonardo Guerrero, 3ID commander.

“Guimaras province was declared a [communist] insurgency-free province six years ago and the peace and security situation continue to

improve as manifested by the absence of violent incidents attributed to the Communist Party of the Philippines-NPA [New People’s Army]. It further boosted the socioeconomic, agro-industrial and infrastructure development activities in the province,” Uchida said.

Guimaras was declared as insurgency-free province in 2008 through a joint resolution signed by the government, the 3ID and the Western Visayas police command.

Through Provincial Resolution 2, the Guimaras PPOC unanimously accepted the responsibility over the peace and security efforts in the province.

As such, it will take the lead role in maintaining internal peace and security.

The declaration of Guimaras as insurgency-free in 2008 has paved the way for the entry of investors and boosted the healthy tourism atmosphere in the province that, likewise, contributed to the regional stability in Western Visayas.

‘Talk on VFA review meaningless’

P

RESIDENT Aquino and the Department of Foreign Affairs (DFA) are engaging in “meaningless talk” on the supposed review of the Visiting Forces Agreement (VFA), Party-list Rep. Terry Ridon of Kabataan said on Wednesday.

“Both Malacañang and the DFA are saying that the VFA is being reviewed, while quickly adding that the review will not lead to an amendment or renegotiation of the VFA. So what’s the review for? What will be its function? All this talk about reviewing without amending the VFA is really

nonsensical,” he added.

Calls to terminate the 16-year VFA snowballed in the past weeks following the alleged killing of 26-year-old Jeffrey Laude by Pfc. Joseph Scott Pemberton of the US Marines.

Foreign Affairs Secretary Albert F. del Rosario earlier said that while there is an ongoing VFA review, renegotiation “is not plausible at this time, considering that both the Philippines and the US are fully committed to a successful implementation of the VFA that is in place.” Marvyn Benaning

infrastructure in Makati City and other local governments.

“Probably the biggest overpriced project involving HCC to date is the P700-million Iloilo Convention Center, which is said to be a pet project of Senate President Franklin Drilon,” the lawmaker said.

The project was publicly launched in 2012, and construction is being hastened for it to be finished in time for the Asia-Pacific Economic Cooperation (Apec) meeting in 2015. Iloilo was said to have been preselected by the organizing committee of Apec to host two of the 20 meetings that will be held in the country in 2015.

On July 8 Drilon announced that another P100 million has been infused to the ICC project through the DAP. The contract for Phase 1 of the ICC was awarded to HCC on December 2, 2013, after the company offered a bid of P479 million for construction of the first phase of the said project, which involves the construction of the façade and skeletal structure of the convention center.

With a total price tag of P700 million for a 6,400-square-meter infrastructure project, the construction cost per sq m of the ICC stands at a P109,375.00 per sq m.

“This is a staggering amount, considering that according to the estimates of the 2014

Davis Langdon & Seah Construction Costs Handbook, a five-star luxury hotel only costs P63,350 to P77,800 per sq m, including amenities,” Ridon noted in HR 1466.

“To further illustrate the magnitude of the overpricing of the ICC, it is helpful to compare it with the China National Convention Center, which is one of the venues of the 2014 Apec Summit that will be held in Beijing this November,” the lawmaker said.

The construction of the China Convention Center costs only $78 million, or P3.47 billion, in 2008. With a gross floor area of 530,000 sq m, the construction cost of the China Convention Center is only $147, or P6,545, per sq m.

Adjusted to current prices, the cost of the China Convention Center is $86.3 million, or P3.76 billion, which translates to $163, or P7,092, per sq m construction cost.

“This means that the cost of building every sq m of the ICC is almost equivalent to the cost of building 15 sq m of the China Convention Center,” Ridon said.

“Even more confounding is the fact that the construction cost per sq m of the ICC even upstages the world-renowned Beijing National Stadium, more popularly known as the Bird’s Nest—the centerpiece of the 2008 Beijing Olympics,” the lawmaker added.

Finished in 2008, the gross floor area of the Bird’s Nest is 254,600 thousand sq m and total construction is $423 million or P18.8 billion (in 2008 conversion rates). This translates to P73,892 per sq m construction cost. In current prices, the total construction cost of the Bird’s Nest is $463 million, or P20.17 billion, bringing the inflation-adjusted per sq m cost of the famous stadium at only P79,216.

“This means that the per sq m cost of the ICC is P30,149 more expensive than that of the Bird’s Nest,” Ridon said.

The lawmaker noted that even at the local level, the ICC cost per sq m is still too high.

In fact, the ICC is four times the actual cost per sq m of the four-level SMX Convention Center at the SM Mall of Asia in Pasay City. The 46,647- sqm project was constructed with a P900-million budget. Adjusted to current prices, the P26,400 construction cost per sq m of the SMX Convention Center still remains only a quarter of the P109,375 cost per sq m of the ICC. “If we match the cost of the ICC to the per sq m cost of the Bird’s Nest, the budget for the Iloilo project will appear overpriced by P191 million. Worse, if the ICC was built with the same cost per sq m of the SMX Convention Center, it will appear that it is overpriced by P531 million,” Ridon said.

Economy

A6 Thursday, October 30, 2014 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

House approves P2.606-T budget bill

T

By Jovee Marie N. dela Cruz

he House of Representatives approved on Wednesday the proposed national budget on third and final reading.

House Deputy Speaker and Nacionalista Party Rep. Carlos Padilla of Nueva Vizcaya said that at least 198 members of the lower chamber have voted, through nominal voting, to pass House Bill 4968, or the 2015 General Appropriations bill, before Congress takes a two-week break from November 1 to 16.

The lower chamber will immediately transmit the budget to the Senate for its own deliberations.

Meanwhile, 18 lawmakers that include Party-list Rep. Antonio Tinio of ACT Teachers; Reps. Neri Colmenares and Isagani Zarate of Bayan Muna; Reps. Luz Ilagan and Emmi de Jesus of Gabriela Women’s Party; and Rep. Terry Ridon of Kabataan, United Na-

tionalist Alliance Rep. Toby Tiangco of Navotas, Rep. Jonathan de la Cruz of Abakada, and Rep. Lito Atienza of Buhay, voted against the passage of the budget bill.

Liberal Party Rep. Isidro Ungab of Davao City, chairman of the House Committee on Appropriations, reiterated that the proposed 2015 P2.606-trillion budget does not contain provisions similar to the outlawed pork- barrel fund.

He also said that the budget bill is in “fulfillment of the Aquino administration’s commitment to further facilitate rapid, inclusive, and sustainable growth in the country.”

The 2015 budget bill is 15.1 percent higher from the current year’s

P2.265-trillion budget, representing 18.4 percent of the country’s gross domestic product (GDP) and reflecting the jump in the administration’s growth assumption of 7.0 percent to 8.0 percent for 2015.

On a per sectoral allocation basis, social services continue to take the lion’s share of the proposed budget; social protection and welfare services—which include the provision of basic education and universal health care—account for 37.1 percent of the proposed expenditure program, with P967.9 billion now devoted to the sector.

The social services budget is 15 percent higher than the P841.8 billion that currently supports social services under the 2014 National Budget, and will allow the administration to strengthen its K to 12 Program, as well as the Universal Health and Conditional Cash-Transfer programs.

Meanwhile, economic services are still a major mover in the President’s inclusive growth campaign, with the 2015 proposed budget directing P700.2 billion toward this sector.

This comprises 4.9 percent of the country’s GDP and accounts for 27 percent of the expenditure program for the next fiscal year.

At least P339.4 billion in funds will go to various infrastructure programs, including the construction of national roads and integrated transport systems nationwide.

Meanwhile, of all the government agencies, the Department of Education (DepEd) will get the biggest share at P364.958 billion.

Next to the DepEd are the departments of Public Works and Highways with P300.519 billion; National Defense, P144.036 billion; the Interior and Local Government, P141.423 billion; of Social Welfare and Development, P108.970 billion; and of Health with P102.178 billion.

The government has also allotted P88.818 billion for the Department of Agriculture; P59.463 billion for the Department of Transportation and Communications; P21.290 billion for the Department of Environment and Natural Resources; and P20.285 billion for the Judiciary.

news@businessmirror.com.ph

Batangas coal plant to double power-generation output to 600 MW in summer of 2015

By Lenie Lectura

J

G Summit Holdings Inc. has informed the Department of Energy (DOE) that it plans to double the power-generation output of its coal-fired power plant in Batangas City to 600 megawatts (MW).

Based on the DOE records, the agency has included JG Summit’s 600-MW coal plant as one of the indicative power projects for Luzon.

JG Summit initially planned to construct a 300-MW coal-fired power plant.

JG Summit plans to undertake the construction of the power facility in four phases each with a 150-MW capacity. The firm could secure an environmental compliance certificate for the project before the end of the year.

So far, JG Summit has received approval from the energy department to conduct the grid impact study, while “negotiations for financing

arrangements and other permits and securing other regulatory requirements are ongoing.”

Just recently, JG Summit has committed to the DOE that it will make available 60 MW of generation capacity in time for summer next year.

JG Summit now owns 21.7 percent of Manila Electric Co. (Meralco), the country’s biggest power distributor, after acquiring the stake of San Miguel Corp. for P72 billion.

Meralco and JG are now in exploring possible partnerships in the power sector.

JG Summit is a pioneer in the petrochemical industry and now has two wholly owned subsidiaries in its 250-hectare fully integrated, world-class, Philippine Export Zone Authority-accredited petrochemical-manufacturing complex in Barangay Simlong, Batangas City. These are JG Summit Petrochemical Corp. and JG Summit Olefins Corp.

LRT 1, MRT 3 rail-track link to be completed in December

By Lorenz S. Marasigan

T

candle season

An enterprising sidewalk vendor, cashing in on the anticipated demand for candles this forthcoming All Saints’ and All Souls’ Day this weekend, sets up his makeshift stall along a sidewalk around the vicinity of Nepa Q-Mart in Quezon City. The retail price of candles has gone up not only because of the peak-season demand but also due to the spike in the price of raw materials in candle making.

Nonoy Lacza

he laying of rail tracks that will connect the Light Rail Transit (LRT) Line 1 and the Metro Rail Transit (MRT) Line 3, costing roughly P7 billion, is set to be completed by December, an update from the Light Rail Transit Authority (LRTA) showed.

The online update also said the multibillion-peso interconnection project is 99.32-percent complete.

The 0.63-percent slippage “was due to the delayed implementation of west walkway at Monumento Sta-

tion because of the right-of-way issue, particularly the annotation of land titles between LRTA and Intraland.” Nevertheless, the office promised to deliver the facility before the year ends.

“The land titles to be affected by the project are already segregated from the main title, and thus ready for annotation,” the agency noted. The previous administration of former President Gloria Macapagal-Arroyo jump-started the project in May 2007.

It aims to complete the MRT Line 3 and the LRT Line 1 loop by connecting the Monumento Station of the older train system to the North Avenue Station.

Part of the larger P11-billion project is the Common Station, which is currently

being contested by two property developers. The hub will connect the two railway systems with the future MRT Line 7, which will be constructed by San Miguel Corp.’s Universal LRT Corp. MRT 7 should be completed by 2017, a tentative timeline showed.

Currently, the Common Station, costing P1.4 billion in investments, is in limbo, following the Supreme Court’s injunction against the relocation of the facility from TriNoma to SM North Edsa.

The Department of Transportation and Communications in September awarded the P64.9-billion LRT 1 Cavite Extension deal to the Light Rail Manila Corp. of Metro Pacific Investments Corp. and Ayala Corp.

With Jae Denise Adolfo

CIAC targeting Mindanao and Visayas MICE guests

T

he management of Clark International Airport (CIA) will work for more domestic linkages between the aviation hub north of Luzon and Mindanao as the Clark Freeport Zone is fast emerging as a center for conventions.

Speaking before League of Municipalities of the Philippines (LMP) Mindanao Chapter, Clark International Airport Corp. (CIAC) President and CEO Emigdio Tanjuatco III said his office will work out additional flights to and from Mindanao.

“We will try our best to increase the flights from Mindanao and the Visayas to Clark to make it easier for our brothers and sisters in the south to fly to Clark,” he said.

“This is for the convenience of our fellow Mindanaoans to have flights to the Clark airport as the Clark Freeport Zone is fast becoming a hub for conventions by people from the various regions of the country,” Tanjuatco added.

He said such events, collectively known as MICE, or meetings, incentive travel, conventions and events or exhibitions, help boost the tourism industry in Pampanga that, in turn, enhances the local economy that benefits the various cities and municipalities in Central Luzon.

Tanjuatco noted that CIAC will have the opportunity to market the CIA in Mindanao should flights to the southern Philippines be secured.

CIAC recently conducted promotional road shows in the provinces of Pangasinan, La Union, Vigan, Laoag and Baguio City as part of its program to promote the international and domestic flights at the Clark airport. Lorenz S. Marasigan

DOTC allots P281.4 million for sea, airport projects in Luzon and Visayas

T

he Department of Transportation and Communications (DOTC) is spending P281.4 million to develop various sea and aviation hubs in Luzon and the Eastern and Western fronts of the Visayas region.

In a bid bulletin, the transport agency said it will auction off the construction and development three sea ports and an airport around the country to promote trade and tourism.

The government is bidding out the contract for the construction of the P182.537-million Caticlan Jetty Port in Aklan. It involves the construction of a finger pier, covered walkway, seawall, access road and back-up area, new outpost and Philippine Coast Guard building.

It is also tendering the P18.684-million construction of the backup area of the Calayan Seaport in Cagayan. The transport agency is, likewise, offering the P19.38-million development of San Isidro Port in Northern Samar, a project which aims to construct the shore protection and terminal shed at the sea hub.

The DOTC is also auctioning off the P61.240-million development of the Roxas Airport in Capiz. The project entails the runway shoulder grade correction, the improvement of the existing perimeter fence and the construction of the vehicular parking area, as well as the x-ray cargo building. Lorenz S. Marasigan with Jae Denise Rodolfo

Economy BusinessMirror

news@businessmirror.com.ph

Bidders shun P2.2-B MRT 3 maintenance-contract auction

By Lorenz S. Marasigan

T

he bidding for the P2.2-billion maintenance contract of the Metro Rail Transit (MRT) Line 3 was literally ditched by prospective bidders, a railway spokesman confirmed.

Hence, the tender for the upkeep deal was declared failed as five investors refused to submit bids.

“The bidding was a failure. We have to review the terms of reference again,” the train system’s Spokesman Hernando T. Cabrera said.

The five prospective bidders were named as: Busan Transport Corp., Mosan-Inekon Phils. Ltd. Co., SMRT International Pte. Ltd., Miescorrail Inc., and D.M. Consunji Inc. The bidders, he said, raised concerns on the deal’s provisions on “penalties and performance inductors” amid the current status of the 15-year-old train system.

“We are now preparing the bid documents…maybe we could publish the invitation to bid by next month," Cabrera said. The multibillion-peso upkeep deal involves a three-yearconcession period.

“Definitely within the year, we will award it,” the spokesman said.

He dismissed the prospect that the bidding was rigged as some industry players have alleged.

“That is an irresponsible, baseless statement. The terms of reference is designed specifically that the provision of spare parts necessary for efficient and safe operations is the

obligation of the maintenance contractor,” Cabrera explained.

The current upkeep provider, APT Global Inc., will continue maintaining the line, along with a counterpart team deployed by the transport agency.

The transportation department is currently pursuing a P54-billion takeover of the line’s corporate owner, a move that MRT Holdings II Inc. (MRTH-II) is blocking due to lack of communication with the party led by the Sobrepeña family.

MRTH-II is the majority shareholder of MRT Corp. (MRTC), the owner of the assets of the 15-year- old line.

The buyout of the train system’s private concessionaire will put to a close the ongoing arbitration case in Singapore between the government and the concessionaire. This will also terminate the concession agreement, and end the government’s obligation to pay billions of pesos in equity rental payments to MRTC. Once the buyout is completed in 2016, the transport agency may then bid out an operations and maintenance contract for the line, thereby tapping private sector efficiency and customer service orientation for operational needs, while retaining regulatory functions for passenger protection with government.

Since 2004, the train system has been operating at overcapacity. Currently, the line serves nearly 550,000 passengers per day, it even reached, at one point this year, the 650,000-daily passenger mark. It has a rated capacity of 350,000 daily passengers.

Thursday, October 30, 2014 A7

House to DOE: Present better justification on grant of emergency powers to Aquino

H

By Jovee Marie N. dela Cruz

emergency powers will include 847 megawatts(MW)fromILP; 264MWfrompower plants for interconnection as disclosed by the Manila Electric Co. (Meralco); 690 MW from committed power plants; and various energy conservation measures.

According to the draft resolution on emergency powers, the House of Representatives wants the government to use the committed ILP in addressing the looming power shortage next year.

The latest draft of the House resolution authorized Mr. Aquino to establish additional generating capacity to effecMr. Aquino emergency powers will tively address the projected electricity not be included as an option to rent shortage in 2015. The DOE projects a gensets, after the DOE admitted the critical power shortage estimated at 700 country will face a reserve crisis and MW to occur from March to July 2015, not a power-supply crisis. Because of consisting of 14 weeks, yellow alert and this, the lawmakers want the Aquino two weeks of red alert, for a total of 16 administration to rely on the Inter- weeks, or approximately one hour of roruptible Load Program (ILP) and tating brownouts for one day per week. approve the granting of emergency It said that provision and procurepowers to President Aquino before ment of additional generation capacity December 1, instead of October 29. shall be available on or before March But a draft of the resolution sub- 1 next year, and the additional genermitted by the DOE to the Senate ating capacity shall be preferentially seeks to grant the President an au- sourced from the ILP. thority to negotiate contracts for the The resolution added that the adopacquisition of additional generation tion and execution of energy and concapacity either via lease or purchase. servation measures shall be pursued as “This [power shortage] can be a further fallback mechanism. addressed through fast-tracking of It said that to stimulate additional committed projects and plants for generation capacities, private entities interconnection, ILP and energy- with self-generating facilities are enconservation program,” Umali said. couraged to participate voluntarily in According to Umali, Mr. Aquino’s the ILP on or before December 1.

ouse leaders on Wednesday challenged the Department of Energy (DOE) anew to further justify the need for emergency powers of President Aquino to address the looming electricity shortage by the summer of next year.

Speaker Feliciano Belmonte Jr. said the DOE should clarify the need for the request, after the department admitted that the problem is about the lack of power reserves, and not on the supply side.

“Oncetheneed[forimmediategrant of emergency powers] is substantiated, I would have no objection. But this has not been done so far,” Belmonte said, as Congress adjourns for All Saints’ Day break without approving Mr. Aquino’s request for such powers.

Liberal Party Rep. Reynaldo Umali of Oriental Mindoro, chairman of the House Committee on Energy and also the cochairman of the Joint Congressional Power Commission, clarified that there is no need for the so-called lease option for generator sets (gensets) anymore.

Last week the House committee said the joint resolution granting

“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 the ERC [Energy Regulatory Commission] rules and validated by the distribution utilities,” it said.

Based on established protocols, ILP is implemented during a red-alert status (minimal power reserve) upon the notice of the National Grid Corp. of the Philippines and the distribution utilities informing ILP participants to deload from the grid. The ILP is a voluntary program whereby businesses, such as malls and factories that have their own generators, can be disconnected from the power grid in times of short supply, and can sell any excess power they generate to distributors.

Through the ILP, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply during the summer season.The lawmaker said the government will encourage more businesses to sign up for the ILP to increase the power reserves available next summer.

“We can’t approve it (emergency powers) before we adjourn this week, but this is our priority when we resume our work on November 17. After approving the committee report, we will immediately pass the emergency powers in a matter of week or two weeks in the plenary,” Umali said.

A8

The Regions BusinessMirror

Thursday, October 30, 2014

news@businessmirror.com.ph

Landless farmers unable to avail North Cotabato support after Yolanda–group power co-op

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By Jonathan L. Mayuga

ANDLESS farmers in Supertyphoon Yolanda-affected areas are being deprived of government support, according to Rural Poor Institute for Land and Human Rights Services (RIGHTS) Inc.

The group said farmers need to show proof of ownership rights to be included on the list of beneficiaries of government support for Yolanda survivors such as housing and livelihood.

RIGHTS documented several cases wherein farmers were asked to show land titles and their failure to show proof of ownership of the land they cultivate is sometimes being used by local officials to dissuade donor agencies from extending them support.

In Barangay Veteranos, Alangalang, Leyte, only those with land titles received shelter support from donor agencies.

Of the 169 houses destroyed by the typhoon in the said area, 80 percent were classified as totally

destroyed. Yet, only 15 householders who had land titles or less than 10 percent of affected families received shelter support.

Of the 116 houses in Barangay Tutug-an in Barugo, Leyte, the owners of the 35 totally damaged structures have difficulty getting support to rebuild their houses as donor agencies require proof of ownership.

The farmers claimed that they should have been issued certificates of land ownership awards (Cloas), which is proof of ownership of Comprehensive Agrarian Reform Program-awarded lands as early as 2008 but for undetermined reasons, they said the Department of Agrarian Reform (DAR) has not distributed the certificates.

RIGHTS found out that as of

2007-2008, the DAR distributed 11,865 Cloas to farmers in the towns of Alangalang and Barugo and Ormoc City between 1991 and 2008. In Barugo alone, the regional office of the DAR reported the complete distribution of more than 4,000 Cloas to 4,151 agrarianreform beneficiares, according to the regional office of the DAR in Eastern Visayas.

However, farmer-leaders in the said towns claimed that agrarianreform beneficiaries have not received their Cloas yet.

Jean Rollo, a farmer-leader in Bukid, Barugo, asked: “Bakit hindi pa rin ipinapamahagi ang Cloas namin na registered na pala? Ano ba ang problema e government lands naman ito? Akala namin, dahil government lands, mas madali ang distribution?” in apparent reference to pronouncements of Agrarian Reform Secretary Virgilio R. de los Reyes that the reason for higher land distribution accomplishment of the past DAR administration was due to the redistribution of public lands.

They said the DAR only reported that the lands targeted for distribution in Leyte have been already been distributed and as such is included in the DAR’s accomplishment report.

In Ormoc even Cloa holders

who have not been installed also criticized their lack of control over awarded lands as the main reason for absence of livelihood support.

“How can we rebuild our homes when the land where we use to live on and plant our crops are not ours,” says Rosenda Apay, a leader of Katarungan, Ormoc.

Apay revealed that there are at least 1,258 Cloa holders in a total of 40 landholdings involving 1,864 hectares who have yet to be installed by the DAR. To get support for shelter, farmers and fishermen alike are required by donor agencies to secure a certification from established landowners that they will be allowed to construct a house in a particular portion of the owner’s house for 10 to15 years.

They said that donor agencies may have fears that the shelter support to be given to them will only go to waste once the landowners decide to evict them and destroy the houses.

Violeta Magadan, a farmer-leader from Poblacion VI, Leyte, said.

The farmers have already asked the Committee on Agrarian Reform in the House of Representatives to conduct an investigation on the undistributed Cloas particularly in Leyte and the first hearing is scheduled to be held on Wednesday afternoon.

TFM hits illegal transfer of land titles, sale of CARP-able lands in N. Occidental

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ASK Force Mapalad (TFM) on Monday hit the illegal sale and transfer of land titles by landowners to evade the Comprehensive Agrarian Reform Program (CARP) in Negros Occidental.

Led by TFM, farmers from Negros Occidental recently trooped to Manila to push for the distribution of the remaining 700,000 hectares of agricultural landholdings covered by CARP. They blamed the Registry of Deeds (ROD), an agency under the Land Registration Authority (LRA), for allegedly tolerating the illegal transfer of land titles that paved the way for landowners of CARP-covered land to sell their real-estate properties and successfully evade CARP. “The law is very clear on the prohibition of selling or transferring ownership of farms already covered

by CARP. And we wonder why the ROD, is tolerating this illegal act by issuing new titles to these landholdings. Could there be an unholy alliance between the ROD and hacienderos so that the latter could evade CARP?” Alberto Jayme, president of TFMNegros said in a statement.

Republic Act 6657, or the Comprehensive Agrarian Reform Law Section 6 of the law states that, “Upon the effectivity of this Act, any sale, disposition, lease, management contract or transfer of possession of private lands executed by the original landowner in violation of this Act shall be null and void.”

CARP took effect on June 15, 1988, and thus any sale or transfer of ownership or possession of agricultural landholdings on or after the said date is illegal.

“If the sale or transfer of possession of a landholding is null and void, why should the ROD recognize it by issuing new land titles? Why is the ROD not coordinating and consulting with the Department of Agrarian Reform [DAR], the main CARP implementer, on these illegal land transfers? Why is the ROD allowing itself to become a party to the illegal acts of hacienderos who defy CARP?” Jayme said.

“It’s not only the sluggish performance of the DAR that has deprived farmers of their right to own the haciendas they have been tilling for generations. The ROD has also contributed to the problem,” Jayme added.

He said there are also cases wherein government entities such as the Philippine National Bank (PNB), where agricultural landholdings are often mortgaged, are the ones violating the law by selling unredeemed lands to new owners instead of having them covered by the CARP. TFM cited the cases of three haciendas in Negros Occidental that have been illegally sold, transferred or subdivided after June 15, 1988, but still managed to get new titles from the ROD. These include the Hacienda Dos Heremanos in Barangay Purisima,

a 29-hectare landholding with 37 CARP farmer-beneficiaries originally owned by Vicente Garcia.

The landholding was illegally transferred to Angela Isabela Garcia through six new titles issued by the ROD in 2013, or 25 years after the effectivity of the CARP. According to TFM, the illegal transfer and issuance of new titles by the ROD did not end in 2013. Another six new titles with new owners, led by Dominguez Bolo were again issued by the ROD on July 22, or a month after the DAR started acquiring the land supposedly for distribution to farmer-beneficiaries. Because of the issuance of new titles, a surveyor from the DAR was told by the lawyer of the landowner to stop placing the hacienda under the CARP. The 25-hectare Hacienda San Luis in Barangay Purisima, Manapla, with 21 farmers is originally owned by the Tirol family. The landowner mortgaged the property to the PNB but failed to redeem it, making the bank the owner of the estate.

In January 2012 the DAR started to cover the landholding by issuing a CARP notice of coverage (NOC) to PNB. However, in July 2012 or six months after the NOC issuance, the PNB sold the farm to Paul and Vina Chang, who were issued a new title by the ROD. The DAR was already on the last stages of covering the hacienda under CARP, nearing distribution of the

More public works, infrastructure projects proposed for Bacolod

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ACOLOD CITY—Nationalist People’s Coalition Rep. Evelio Leonardia of Bacolod City said he is working to sustain the momentum of public works for the city next year with the completion and ongoing implementation of P893 million in projects so far.

Leonardia said he is optimistic that Bacolod can draw the same package of public works and infrastructure projects for 2015, if not surpass it. “The country is enjoying unprecedented volume of resources for public works, and we hope to keep getting our fair share of this,” he added.

Leonardia, a member of the House appropriations committee which scrutinizes the national budget, said he has been meeting with the heads of different agencies. They have been very accommodating of Bacolod’s

requests for projects, he said.

From June 2013 to June this year, the national government has poured in P893 million worth of projects for Bacolod through the departments of Public Works and Highways, of Tourism and of Agriculture and agencies such as the Road Board and the Philippine Amusement and Gaming Corp.

Last month Leonardia also announced that the Department of Transportation and Communications (DOTC) approved a P20-billion project for the expansion of the terminal and apron and the extension of the runway of the Bacolod-Silay Airport.

Leonardia said the project will be implemented by the DOTC under an “OperateAdd-Transfer” scheme with the private sector, and work is expected to start late next year or early 2016. PNA

landholding to its farmers when the ROD, on July 28, refused to issue a title to the Republic of the Philippines (a requirement before certificates of landownership award are generated and issued to farmers-beneficiaries) because of the PNB’s sale of the farm to the Changs.

The Hacienda Tamsi in Bangkerohan, Cadiz, the 56-hectare landholding with 28 farmers-beneficiaries originally belonged to Punay Lopez Kabayao Fernandez with Transfer Certificate of Title 13735. However, the landholding was old to Jaynen Sy in June 2014 and “chopped” into 10 new titles issued by the ROD. Negros Occidental is the province with the biggest combined area of agricultural landholdings that have not yet been distributed to farmerbeneficiaries of the CARP. The CARP balance in the province as of December 2013 stood at 129,317 hectares, or nearly 17 percent of the nationwide balance of 771,000 hectares, based on the DAR data. As of August 2014, only 2,687 hectares, or 2 percent of the December 2013 balance was acquired and distributed to farmers.

As of June 20, there are still 22,000 hectares out of 84,000 hectares of landholdings in Negros Occidental that are without NOC, based on the DAR OpTool, which serves as the agency’s centralized repository of land tenure improvement data. Jonathan L. Mayuga

seeks govt’s help

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IDAPAWA N CIT Y—The North Cotabato Electric Cooperative (Cotelco) is seeking the help of provincial officials to improve its power supply.

Power in the ser vice areas of Cotelco-main office remained unstable as it was still uncertain it the electric cooperative wou ld re ce ive p owe r s up ply anew from the Mount Apo geothermal plant.

Herminigildo Homez, Cotelcomain general manager, said his office is uncertain the geothermal plant would provide power to the cooperative.

Kidapawan City in North Cotabato hosts the two geothermal power plants.

Homez said the administrator of the geothermal plant could prioritize Filinvest Development Corp., a

sister company, than Cotelco.

If that is the case, Cotelco’s power deficiency will continue and, in turn, Cotelco will ration electricity to its consumers in the days ahead.

Homez said being host to the Mount Apo Geothermal Power Plant Mindanao 1 and 2 was not an assurance Cotelco will get power supply from the 100 megaWatt (MW) plant.

Homez appealed to the local governments of North Cotabato and Kidapawan City to help the electric cooperative get power from geothermal plant.

Homez said the power demand for its service area is about 35 MW daily while its current supply is only about half of the requirements, thus the occasional power outages. PNA

ARMM outperforms all regions in immunization of children

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AVAO CITY—The Autonomous Region in Muslim Mindanao was the topnotcher in the immunization of children against two debilitating diseases.

The Department of Health (DOH) acknowledged the effort of the ARMM in this year’s anti-measles and anti-polio mass vaccination campaign throughout the country.

T he reg ion’s P rov i nc i a l Hea lt h O f f ices accompl i shed 102 percent i n t he a nt imea sles a nd 101 percent i n t he a nt i- pol io i m mu n i z at ion c a mpa ig n , t he A R M M Bu reau of P ubl ic I n for m at ion h a s re por ted .

In the data released by the DOH-ARMM, it said that 408,746 target infants and children were administered the anti-measles vaccines and 469,660 for anti-polio as of October 13 this year.

“The DOH established the Expanded Program on Immunization in 1976 to further strengthen the immunization program as mandated under Republic Act 10152, or the Mandatory Infants and Children Health Immunization Act of 2011, which requires all children under 5 years old to be given the basic immunization,” the ARMM said.

The “Ligtas sa Tigdas at Polio” is a monthlong and nationwide immunization campaign every September, and aims to halt the growing cases of measles and make the

Philippines a polio-free country.

It also aims to protect about 13 million Filipino new-borns and 5-year-old children against measles and rubella and 11 million against polio.

K adil Sinolinding, DOHARMM health secretar y, said that among the provinces in the region, Lanao del Sur got the highest percentage performance in both measles and rubella at 118 percent and oral polio vaccination at 117 percent.

Sinolinding said the DOHA R MM wou ld continue to tie up w ith loca l gover nments in the anti-measles and antipolio vaccination dr ives even after the campaig n per iod.

He said that “to ascertain that the vaccination drive reaches the target clientele, the health units adopted the doorto-door strategy where the service providers and workers visited the households in coordination with the local governments, non-government organizations, barangay officials, and other health stakeholders.”

“Children who did not receive the supplemental dose of measles and polio vaccine can still go to the health centers for the vaccination” he said.

The ARMM information office said that 2,000 midwives and nurses have been employed to help the health workers in administering immunization to almost 1 million babies and children across the region this year. Manuel T. Cayon

GenSan allots P200M for operations of 4 economic enterprises

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ENERAL SANTOS CITY—The city government has allocated some P200 million for the operation and planned expansion of its four economic enterprises next year.

City Councilor Franklin Gacal Jr., chairman of the council’s Committee on Finance, Ways and Means and Economic Enterprises, said such appropriation was in the proposed budget for 2015 set by the city’s Executive Department for the city hospital, public market, slaughterhouse and transportation terminal.

Gacal said the city hospital, which is currently undergoing expansion, received the bulk of the proposed budget with P175.4 million, an increase of P5 million to its budget this year.

The city’s public market received around P12.85 million, followed by the transportation terminal with P10.5 million and the

slaughterhouse with P1.429 million, he said.

Gacal said his committee will conduct a series of hearings for the proposed appropriations along with the city’s government’s proposed budget of P1.461 billion for 2015.

Such allocation increased by around P166 million when compared to the city’s P1.29billion budget this year.

City Mayor Ronnel Rivera had committed to increase the city hospital’s budget for next year to continue with its ongoing expansion and improvements.

In the last two years, the local government has increased the city hospital’s budget by around P40 million, from the P130.167 million it received in 2013.

Through assistance from the Department of Health, the mayor said the city have invested around P67 million since last year for the rehabilitation and improvement of

the city hospital.

Rivera said they completed the construction of additional operating room theaters, medical isolation unit and hemodialysis center building; and, the renovation and expansion of the Tuberculosis Multi-Drug Resistant clinic, intensive care unit and the maternity or obstetrics and gynecology ward.

He said they have spent an additional P47 million for the procurement of drugs, medicines and other vital hospital supplies.

Rivera said they are drawing out plans to further improve and expand the other facilities at the hospital to address its overcrowding problems.

Aside from the infrastructure improvements, he added that they are currently implementing several reforms to further enhance the hospital’s operations and services. PNA

News BusinessMirror

news@businessmirror.com.ph

Thursday, October 30, 2014 A9

Spatting tycoons stunt Philippine infrastructure growth Continued from A1

Meanwhile, SM Prime Holdings Inc., the group of billionaire Henry Sy, and Ayala Land Inc. are fighting over where to build a train station, both seeking to place it closer to their respective malls 600 meters from each other.

Caught in the middle are 22.7 million people who live and work in Metro Manila, where inadequate infrastructure and recurring flooding produce gridlock and stunt the economy. The project delays threaten Mr. Aquino’s plan to lure $11.6 billion of investment in roads, railways and airports to spur growth to as much as 8.5 percent by the time he leaves office in 2016.

“It is frustrating how delays in major infrastructure arise from conflicts between those who wield economic or legal power,” said Rodriguez, 31. A court injunction on the train station means further delays to projects that may cut her daily commute by five hours, she said.

The Philippine economy is dominated by business groups run by a handful of politically connected families. The Zobel family owns half

of 180-year-old Ayala Corp., which transformed a former airstrip in Makati City into the nation’s Wall Street and has a market value of $9 billion. The Zobels supported Corazon Aquino, the former president and Benigno’s mother.

tract SM Prime signed in 2009 putting the station in front of its mall, while an Ayala-led venture won a government contract to extend LRT 1 last month that effectively allowed it to build the station near its own mall. San Miguel, which is building MRT-7, supports SM Prime.

Sy, 90, is the nation’s richest man with a net worth of $11.6 billion, according to the Bloomberg Billionaires Index. He built his empire from a shoe business and now owns the nation’s biggest bank and mall operator. SM Prime has also locked horns with Ayala Land over reclamation projects in Manila Bay. San Miguel, the nation’s biggest company and maker of the 116-yearold beer brand, is run by Ramon Ang and its chairman, Eduardo Cojuangco, is an uncle of the nation’s President.

The key to cutting Rodriguez’s commute is the planned station where Light Rail Transit 1 (LRT 1), Metro Rail Transit 3 (MRT 3) and Metro Rail Transit 7 (MRT 7) intersect, which is in limbo as SM Prime and Ayala fight over the location.

The argument stems from a con-

Expressway bids

Political businesses

US airlines. . . continued from a1

44 percent this year through on Tuesday.

“In a strong demand environment, we don’t plan to go off and just proactively cut fares,”American Airlines Group Inc. President Scott Kirby said in an October 23 conference call.

The industry finds itself in a sweet spot not seen in years. Jet kerosene last fell on an annual basis when the global financial crisis eroded leisure and business flying so much that US airlines shrank operations by the

government should have the best options available,” San Miguel said in a statement on October 22.

Presidential appeal

The delays frustrate about 1.1 million commuters who use LRT 1 and MRT 3 daily. The MRT 7 line, first proposed in 2002, has an estimated capacity of 450,000 travelers.

Corazon Guidote, SM head of investor relations, said the common station case is separate from other contracts and the company “does not include, nor intend to delay all other infrastructure projects.”

The $790-million Cavite-Laguna Expressway, or Calax, is also stalled after a P20.1-billion ($449-million) bid by San Miguel in June was rejected because of an incorrectly dated credit letter, leaving an Ayala venture as the winner with a bid of P11.7 billion.

“This huge undertaking will have a big impact on the country for many years to come and we believe the

Ayala has asked President Aquino to award the project to either San Miguel or its venture, Ayala Managing Director Eric Francia said in an email reply to questions. He said Ayala won’t go to court if San Miguel gets the project to avoid further delays.

Court cases and appeals to the President’s office “delay the process and can be frustrating to investors,” Francia said. “The possibility of a rebid in the case of Calax yet threatens further delay.”

The discrepancy led President Aquino to signal last week that the bidding process might be repeated, potentially leading to further legal challenges and delays in the project.

Aquino has said that accepting a lower bid while there is a higher offer is a public issue. “We have to protect the people’s interest,” he said.

To get to grips with delays caused by legal challenges, a proposed law pending in Congress calls for com-

most since World War II. Now, carriers are pocketing savings from lessexpensive fuel while still holding the line on fares.

Fuel was the largest single operating expense for American, United Continental Holdings Inc., Delta Air Lines Inc. and Southwest Airlines Co., the four biggest US carriers, during the

first nine months of 2014. It accounts for about a third of all spending at each of the companies.

“For the whole industry, it’s roughly a 10-percent increase in profit for every 10-cent drop in jet fuel” on a per-gallon basis, said Michael Derchin, an analyst at Stamford, Connecticut-based CRT Capital Group.

panies to be fined 0.5 percent of a project’s cost if they make an appeal to the government after bids are submitted, said Cosette Canilao, executive director at the PublicPrivate Partnership Center. An appeal costs about $40 now, she said.

Attracting investment

“The Philippine economy can grow even faster if infrastructure logjams were cleared,” said Gundy Cahyadi, a Singapore-based economist at DBS Group Holdings Ltd. “If infrastructure development goes full steam that would mean higher capacity, improved production and lower cost tfor industries.”

While the Philippine economy is projected to be among the world’s five fastest-growing until 2016, it ranks 96th in infrastructure in the World Economic Forum’s 2013 Global Competitiveness report, the lowest among major Southeast Asian nations.

The Philippines attracted a record $4 billion in foreign direct investment in 2013, yet it drew the least among major Southeast Asian economies, according to the United Nations Conference on Trade and Development.

Jet fuel

Jet fuel for immediate delivery in New York Harbor has been retreating since a 2014 high of $3.20 a gallon on February 20. Refined from crude, it’s been tumbling along with oil prices amid surging US supplies and production increases by the Organization of Petroleum Exporting Countries. The price was at $2.46 a

“Material delays in project implementation could incur concerns on regulatory consistency and transparency, which are important for sustainable, long-term interest from private-sector investors,” said Mic Kang, a Hong Kong-based infrastructure analyst at Moody’s.

‘Right direction’

Not all projects are delayed. About 80 percent of 15,000 classrooms being built in a PPP venture are done, while Ayala’s 4-km toll road south of Manila is 50-percent complete.

The government is moving “in the right direction,” said Richard Bolt, the country director at Asian Development Bank. “Reforms don’t happen overnight.”

For commuters like Rodriguez, they can’t happen soon enough.

The legal associate rented a $300-amonth apartment with friends to be closer to her office in Makati and goes to her family home 34 kilometers away only on weekends.

“I chose to move around this problem,” she said, noting that not everyone in the nation has that ability.

Bloomberg News

gallon on Tuesday, according to data compiled by Bloomberg.

Because drivers see their gasoline bills when they fill up, the 8.7-percent drop in 2014 retail prices tracked by motoring club AAA through October 27 is more apparent than the decline in jet fuel, which is only one of many costs for airlines. Bloomberg News

Opinion BusinessMirror

A10 Thursday, October 30, 2014

Editor: Alvin I. Dacanay

editorial

Keeping the cost of a pandemic manageable

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S of this writing, the Ebola virus disease has claimed the lives of close to 5,000 people, most of them in West Africa, in countries such as Sierra Leone, Liberia and Guinea. The disease has already crossed the Atlantic Ocean, and at least four people in the United States have been diagnosed with it.

But, according to Cable News Network reports, so far, “every American Ebola patient who has received a blood transfusion from a survivor has also survived.”

New York City’s Filipino population is a little over 200,000—a small figure compared to the 3.4 million Filipinos living and working in the US. Thus, Ebola striking Filipinos is not far-fetched.

But while it may already be true that Filipinos and other minorities have a greater chance of being infected with the deadly virus, the chances of it reaching the Philippines may not be as close.

Despite claims by a handful of hospitals in the country that they can somehow deal with Ebola, should it reach the archipelago, doubts about medical efficiency linger. Most hospital personnel are not trained to handle the disease. Those in West Africa who had been exposed to the virus and got infected were mostly medical practitioners, people trained to handle deadly diseases.

The question is: If medical personnel, trained as they are to deal with sundry diseases, still get infected, how can a population less likely to deal with it survive a possible infection?

Effectively dealing with the possibility of a pandemic requires logistics.

As of this writing, hospitals are on alert for possible infections in people coming from West Africa.

Experts are already predicting the chances of the virus reaching the country. Schools will have to stop operations; so should businesses, if Ebola is to be contained. Public places where people congregate—malls, churches, parks, moviehouses, restaurants and bars, among others—may have to be closed for the meantime.

The toll on the economy, let alone human life, would be staggering if and when the pandemic is managed poorly.

The Department of Health should now lobby for more improved hospital equipment designed to deal with Ebola infections. It’s an investment worth its weight in gold. The Philippines successfully dealt with the Severe Acute Respiratory Syndrome when it struck more than a decade ago. With billions going to corruption, it’s high time our officials rethought the cost of a massive pandemic in our midst.

Medical practitioners are the country’s first line of defense. They must enjoy the first benefits of protection. No future could be so grim than the one where our medical personnel suffer the deadly effects of the virus.

Who will then be left to care for the patients?

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OUTSIDE THE BOX

A

S you read this, I am on a jet with my Pineider alligator briefcase filled with gold coins and brightly colored trinkets, and headed to an exotic island, where its inhabitants have never heard of the global financial crisis.

Actually, I am not. But it would not be a bad idea if this were any place but the Philippines.

While the Executive and Legislative branches have one eye on the 2016 elections and the other on immediate problems that they are sort of trying to deal with, it’s the Bangko Sentral ng Pilipinas (BSP) that will get the country through the next six months.

A nation’s central bank is one of the least understood and, yet, most critical institutions in the government. Because most central banks, like the one here in the Philippines, are part of the government, they must walk a thin line between doing what they think is best for the economy and also supporting politically inspired economic policy.

When Japanese Prime Minister Shinzo Abe came to power, one of

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his first acts was to push the Bank of Japan to make decisions that would help implement his policy decisions.

Here in the Philippines, the BSP has been able to maintain a great degree of autonomy from Malacañang.

The primary tool that the BSP has in influencing the economy is managing the country’s money supply through bank-reserve requirements and setting basic interest rates. While this seems simple to most people, it is about the same as deciding to remodel your house and tearing out a few walls. Once you make that decision, you cannot immediately change your mind, and the good or bad results will not be known for a relatively long time.

Along with that power over the money supply is the responsibility to regulate banks.

I have been critical of BSP actions

and inactions in the past. However, BSP Governor Amando M. Tetangco Jr. and his team have a superb general-performance record in dealing with the global situation and in protecting the Philippines.

The last two months have seen the global financial markets starting to run headlong into the wall of reality.

Have you ever been to a party where there was that one drunk person being obnoxious? For the first couple of hours, everyone tries to ignore him or her, but then, eventually, everybody has to accept that this person is a problem and must be dealt with. The BSP has been handling “drunken” economic conditions since the beginning.

Equally difficult and equally important is the function of the BSP to regulate banks. We have seen what happens when banks control the central bank and not the other way around, like what has happened in the West. But it is not a simple job.

BSP banking-sector regulation is not like some traffic enforcer who issues parking tickets. The BSP makes the rules, must coordinate closely with the banking community and must have that sector’s trust. Regulation must keep both banks and the economy healthy, and doing both is not always easy or compatible.

While the banks themselves want to be financially stable and strong, each one also has to compete for

It’s time to give China some time

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan

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BSP: Keeping the nation safe

William Pesek

BLOOMBERG VIEW

I

S China headed for a boom or bust? Depending on whom you read, the world’s most populous nation is on the cusp of either a debt meltdown or a middle-class expansion.

I’ve written before about the possibility of China suffering its own “Minsky moment”—the point when a debt-driven speculative bubble comes to a sudden and nasty end. Yet, there’s also evidence that the country may be approaching something of a Henry Ford moment, when a manufacturing-based economy matures to a point where workers can afford to buy the products they’re making. The reality, as unsatisfying as it may be to those looking for a dramatic headline, is probably somewhere in between.

The recent Conference Board report I referenced last week paints the direr picture. Authors David Hoffman and Andrew Polk predict that Chinese gross domestic product (GDP) growth will drop below 4 percent in the next decade. At the same time, more optimistic takes from the Asia Society Policy Institute and the Rhodium Group argue that financial upgrades are under way in China that could pro-

duce a more sustainable growth path.

Those who fear a slowing economy might spark riots and instability also have to be heartened by new data that suggest incomes across China—which is what matters most to ordinary Chinese—are rising more than is commonly acknowledged.

For now, the best strategy for outsiders may be to look the other way, as best they can. Instead of obsessing over every tick up or down in China’s GDP growth rate, the investment world needs to give Chinese leaders time and space to implement the reforms they’ve pledged thus far.

When Deng Xiaoping opened China’s economy in the 1980s, he followed several of the dictates of Adam Smith.

Current President Xi Jinping must reinvent the world’s second-biggest economy in entirely new ways. He must sideline the state-owned enterprises that make the political class wealthy, rein in a sprawling shadow-banking

system with tentacles everywhere and gradually decelerate the economy as it transitions from an investmentheavy, debt-fueled growth model to one based more on consumption and services than exports. To use a familiar metaphor, Xi is trying to change China’s engines in midflight. Having an army of analysts screech about every zig and zag in the growth rate can’t be helping him concentrate.

I’m tempted to suggest a moratorium on Chinese GDP figures for a couple of years. That sounds hypocritical, I realize, given that we in the foreign media always demand greater transparency from China. Yet, even if the Chinese economy slowed to the 3.9-percent rate that former United States Treasury Secretary Lawrence Summers thinks lies ahead, would Beijing admit it, anyway?

There are many other ways to take China’s pulse. Economists’ favorite reality-check indicators include HSBC’s purchasing manager’s index, rail-freight traffic, export and import data (which can be confirmed by crosschecking the numbers with trading partners), electricity-use trends and the trajectory of prices of commodities that China dominates, like iron ore and coal. Even if this is a nonstarter, let’s, at least, encourage Beijing to forgo a growth target next year.

Xi’s challenge was clear last week when the global media convulsed over news that China had grown the slowest in five years in the third quarter. Editors

the lending business, which is also a balancing act. The BSP’s monitoring of lending and borrowing practices is critical for both a strong banking industry and a growing economy.

While the “bubble-blowers” are constantly looking for ways to criticize the Philippines, most of their comments do not have any basis in reality.

As the BSP just reported, Philippine banks’ consumer loans are only 16.5 percent of all loans, in comparison to Malaysia (62.2 percent), Indonesia (28.4 percent), Thailand (27.5 percent) and Singapore (25.5 percent).

You can give large credit to the BSP for the country’s favorable PHL numbers.

But the next six months are, perhaps, going to be the most difficult for the BSP to face, as far as the last five years are concerned. Current monetary and fiscal policy in the West is not working, and major changes must be made. What those changes will be are still unknown. But the BSP cannot afford to relax at all.

The country’s investment slogan should be this: “The Central Bank: It’s Better in the Philippines.”

E-mail me at mangun@gmail.com.

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

and bankers tripped over themselves to urge Beijing to do more to spur growth.

This is what’s truly hypocritical: Even though everyone acknowledges that China must stop artificially pumping up its economy, markets panic at the slightest hint that GDP is losing altitude—as if China were some giant company that must constantly impress us.

The last thing China should do is embark on a fresh stimulus kick to placate the nail-biters: That would result merely in more debt and unproductive investment and even bigger asset bubbles. The world needs a stable China more than it needs a fast-growing one.

And on that front, the economy is doing surprisingly well.

Buried in recent data, Bloomberg News reports, are signs that average Chinese are benefiting more, despite slower growth: The disposable incomes of urban residents jumped 9.3 percent in the first three quarters from the same period a year ago; rural residents’ cash income leapt 11.8 percent. The 176 million migrant workers at factories and construction sites also are enjoying wage increases.

None of this means China will avoid a date with financial destiny—just about every developing nation crashes.

But we’re years away from knowing whether China ends this decade in the boom or bust category. Xi’s job is difficult enough without our impatience pushing him into ill-considered decisions. Give the man a chance.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Thursday, October 30, 2014 A11

How Germany conquered The kind and merciful Lord Europe in 25 years Msgr. Sabino A. Vengco Jr. Pankaj Mishra

BLOOMBERG VIEW

O

N November 9 Berlin will celebrate the 25th anniversary of the fall of the wall that divided the city during much of the Cold War. At the time, images of exuberant wall-breakers signaled the end of communism. A quarter-century later, the event seems to have also been a prelude to the rebirth of Berlin and the emergence of Germany as Europe’s supreme power.

This astonishing turnaround contains many inescapable historical ironies. Germany’s great intellectual, political and scientific talent had once destined it to be the principal nation of Europe. But Germany went on to produce the most terrible variant of European imperialism, and almost brought about the destruction of Europe itself.

Not surprisingly, after the fall of the Berlin Wall, the prospect of a reunified Germany struck terror in the hearts of British and French leaders. The late British Prime Minister Margaret Thatcher recorded in her memoir how she pulled out a map from her famous handbag to show French President François Mitterrand “the various configurations of Germany in the past, which were not altogether reassuring about the future.”

Mitterrand, going all misty-eyed, said that “at moments of great danger in the past, France had always established special relations with Britain and he felt such a time had come again.” Thatcher solemnly concluded that “although we had not discovered the means, at least we both had the will to check the German juggernaut. That was a start.”

It remains one. In Berlin, from where I write, this Anglo-French grandstanding makes for sad reading today. France and the United Kingdom have rarely been so divided from each other since the end of World War II. In that time, their international stock has never been lower.

Even as ethnic-racial chauvinists around the world pursue a range of enemies—from Shiites, Kurds and Roma to Ebola-Obama—Britain is locked into a puerile debate about immigration and the European Union. The far-right UK Independence Party (Ukip) seems almost to be dictating the national agenda. British Prime Minister David Cameron has responded to the rise of Ukip by threatening— imprecisely—to crack down on European Union (EU) migrants rather than rebutting the far right’s scaremongering. His demand for restrictions on free movement within Europe—a sacred principle in Brussels—could help bring down the EU. Diminished by private scandal and economic setbacks, French

President François Holland looks similarly helpless against the National Front’s popular rightist leader Marine Le Pen. Earlier this year French Prime Minister Manuel Valls was reduced to insisting that “we are a great nation,” suggesting that France was not as obliged as, say, Portugal to follow the EU rules on budget deficits.

Meanwhile, Germany has become the world’s second-biggest immigrant nation. Berlin’s mixed population, which now includes Jewish immigrants from Israel, as well as Turks and Arabs, is engaged in a fresh European experiment in coexistence. The Euroskeptic Alternative for Germany Party is a fringe nuisance.

Thatcher and Mitterrand did not envision such a fractious and crisisprone Europe, and never imagined Germany would become its reluctant leader. Of course, Germany’s preeminence within Europe may not last forever; already, it is hardly loved. In countries such as Spain and Greece, one only has to start a conversation about Germany— as I did in Barcelona recently—to quickly tap into reserves of deep unhappiness and distrust, if not outright loathing.

At home, Germany has just suffered the biggest strike by workers in years, which crippled rail services across the country. Industrial output is down, and uncertainty about China’s growth clouds the future. Racism remains a big problem. Even Berlin’s canny branding as “poor but sexy” conceals its exceptional character among German cities, not to mention such problems as an endlessly delayed new airport and other white-elephant projects.

Germany also confronts more pressing new questions abroad.

What to do about the Russian juggernaut? Or about right-wing leaders in neighboring Hungary, who mock the EU’s ideals with their xenophobia and open love of Chinesestyle authoritarianism?

Indeed, instead of ending in 1989, history may have now embarked on one of its most ironic episodes. Germany finds itself saddled with an unexpected and unsought responsibility: Having once almost destroyed Europe, it may now be called upon to save it.

Alálaong Bagá

I

N commemorating all the faithful departed, it is vital to believe that God’s mercy, moved by human weakness, is experienced by those who are faithful to the covenant, and that He does not deal with us as our sins deserve (Psalm 103:8, 10, 13–14, 15–16, 17–18). Jesus promises His followers that they will all be together again in communion with God (John 14:1–6).

Not angry forever PSALM 103 is sometimes called the Old Testament’s “Te Deum” (the Church’s ancient song of praise and thanksgiving to God), in which numerous reasons are given on why one and all humankind should bless and praise the Lord. A final reason is God’s tender compassion (rahamim) and graciousness (hesed), as especially manifested in the covenant with Israel. In dealing with unfaithful Israel, God was slow to anger and abounding in kindness. And even when He was angry, like in the time of the Exile, it was not forever. Psalm 77:8 asked: “Has His steadfast love forever ceased? Are His promises at an end for all time?” Jeremiah knew the answer: “Return, faithless Israel, says the Lord. I will not look on you in anger, for I am merciful, says the Lord; I will not be angry forever” (Jeremiah 3:12). God does not deal with us as our sins deserve.

Like a father, God has compassion (womb-love, like a mother’s) for His children and those who fear Him, knowing that we are dust and weak, prone to sin. According to Sirach (18:9-13), the Lord is patient with human beings, upon whom He pours out His mercy, because He sees “that their death is grievous, and so He forgives them all the more.” We mortals are like grass that withers or flowers that fade: now here, then gone and forgotten. But God’s kindness is forever and will always be for those who fear Him. Mary herself sings to God’s glory because His mercy is for those who fear Him from generation to generation (Luke 1:50), and those who are faithful to His covenant and keep His commandments.

I prepare a place for you

HIS followers are troubled by Jesus’s impending departure, His death. In His tender concern for them, Jesus

Inter press service

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ONN—The United Nations Framework Convention on Climate Change has set a target of reducing emissions of greenhouse gases, such as carbon dioxide. One way that countries can meet their obligations is to switch energy production from the burning of fossil fuels to “renewables,” generally understood to include wind, wave, tidal, hydro, solar and geothermal power and biomass.

They have a dual advantage: First, they do not create the by-products responsible for global warming and climate change; and second, they are nonconsumptive, drawing on primary energy sources that are, for all intents and purposes, inexhaustible.

Why, then, is the Convention on the Conservation of Migratory Species of Wild Animals (CMS), which is holding its

triennial policy conference next month in Quito, Ecuador, rocking the boat by publishing a review highlighting the serious environmental threats posed by the new technologies?

First and foremost, CMS is not joining the climate skeptics’ camp. There is ample evidence of the effects that climate change is having on migratory animals.

CMS has long been grappling with

I am the way

JESUS assures His disciples that they know where He is going and the way He will be taking. But Thomas interjects that they do not know those things: Where he is going and the way there. Thomas still does not understand, and so he remains troubled; he is ignorant both of the “where” (the Father) and of the “way” (Jesus). By admitting His ignorance, Thomas shows that he is on the way to understanding what Jesus is teaching them. Jesus

reveals the symbiotic relationship between Him and the Father, between the “way” and the “where.”

Jesus is “the way, the truth and the life.” And “no one comes to the Father except through” Jesus. He and His Father are so linked together that it is impossible to come to the Father without going through Jesus.

Jesus is claiming union with God and the divine prerogatives of mutual indwelling and equality, so that to know one is to know the other; to be with one is to be with the other, and that is already now and not only later at His second coming. As the “way” (landas) to the Father and eternal life, Jesus is the way of the wise (Proverbs 4:11), and the manner of living in conformity with Him is necessary to be with God always.

Alálaong bagá, God’s love and mercy for us is forever, so much so that even the death of Jesus is temporary, in the same way that our own departure from life is temporary. We, His followers, will be reunited with Jesus at His Father’s house. We must know and believe that, just as Jesus and His Father are so intimately in communion that they cannot be separated, we, too, are so connected with Jesus and, through Him, the Father that we cannot be separated, even by death.

We are for God’s love, which is forever.

Join me in meditating on the Word of God every Sunday, 5 to 6 a.m., on DWIZ 882, or by audio-streaming on www.dwiz882.com.

Remedies for excise taxes on petroleum products Atty. Pierre Martin D. Reyes

Tax law for business

T

HANKS to the Supreme Court’s decision on Commissioner of Internal Revenue (CIR) v Pilipinas Shell (Shell), GR 188497, February 19, 2014, petroleum companies are now allowed to file a claim for refund of the excise taxes paid on petroleum products subsequently sold to international carriers. Because of this, there is a need to reexamine the remedies available to petroleum companies under existing tax laws.

Section 135 of the National Internal Revenue Code (NIRC) exempts from excise tax petroleum products sold and delivered to: 1) international carriers of Philippine and foreign registry, provided that they use or consume these products outside the country; and 2) tax-exempt entities. In the case of international carriers of foreign registry, petroleum products are exempt from excise taxes on the condition that their country of registry exempts from excise tax or similar taxes petroleum products sold to Philippine carriers, entities or agencies.

This, however, is not an outright exemption. Under current rules, the excise tax is paid before removal from the place of production, in the case of locally manufactured petroleum, or before release from the custody of the

Bureau of Customs, in the case of imported petroleum. Thus, if a petroleum company sells and delivers its products to those exempt from excise taxes, it will have to pursue remedies after the payment of the tax.

In this regard, there are two remedies.

In the first, the company can file a claim for excise credit/refund under Sections 204 and 229 of the NIRC. Section 229 speaks of the recovery of taxes erroneously or illegally assessed and collected.

In this case, since the tax-paid petroleum was subsequently sold to international carriers or tax-exempt entities, the payment of excise taxes can be considered as erroneously made. Pursuant to Section 229, the company must file the administrative and judicial claim within two years from the time the erroneous pay-

Renewable energies: A double-edged sword Bradnee Chambers

calms their hearts by urging them to have faith in God and in himself. But faith always seeks understanding, and without it faith can have little impact. Without concealing His imminent departure, Jesus gives His disciples a mental framework within which to interpret His departure, a positive perspective that can dispel their foreboding sense of loss, with its sadness and confusion.

He is truly leaving, but He is going to God’s heavenly dwelling place.

He describes His “Father’s house” as a large mansion with many guest rooms, more than enough to accommodate His disciples. Jesus will be going ahead to prepare a place for all of them, and He promises to return and take them to that place. Thus, they will all be together again. Jesus’s objective is clear: “So that where I am, you also may be.” Eternal communion with Him in His Father’s house is the end-time reality for us who are faithful to Jesus.

this issue. The convention and the vulnerable species it protects need climate change to be halted or, at least, slowed down so that adaptation measures can be developed.

Climate change just adds to the threats that migratory species currently face. This includes threats posed by the fishing gear responsible for the by-catch of seabirds, turtles and dolphins; and the demand for luxury products that result in the wasteful practice of shark-finning and the fueling of the massacre of elephants and rhinoceros for ivory and horn. And then there is marine debris, bird-poisoning and illegal trapping—the list goes on.

Climate change is opening several new fronts in the conservation war by causing habitat change and loss; by affecting gender ratios in species, such as marine turtles; and by altering species’ behavior, with some not migrating at all and others leaving their breeding grounds later and returning earlier, while some are extending their range, displacing other species that are less

capable of adapting.

So why is CMS not rejoicing at the news that wave-energy installations, tidal barrages, solar panels and wind farms on land and at sea are being developed at unprecedented rates? CMS would give a hearty cheer if these new technologies reduce as promised the human-induced drivers of climate change.

However, the report commissioned

by CMS, together with the African-Eurasian Waterbird Agreement, the International Renewable Energy Agency and BirdLife International, explains the prudent reaction from conservationists, as it illustrates how renewable energies are a double-edged sword—a cure for some ills afflicting the world, but with potentially severe side-effects for wildlife.

Hydropower relies on dams—technological wonders in many cases— but essentially barriers across rivers, preventing migratory species, such as salmon, from reaching their spawning grounds. The changes to water flow and levels both up and downstream of the

ments were made.

In the second, the company may opt to file a claim for product replenishment based on Revenue Regulations (RR) 2-2008. If the company sold and delivered petroleum to international carriers or tax-exempt entities, it can file a claim for product replenishment that covers the volume and excise tax paid on the said transaction. That previously paid excise tax can be used to pay the excise tax due on a subsequent sale or delivery of petroleum to international carriers or tax-exempt entities. Consequently, the company can remove from the place of production a similar volume of petroleum without prepayment of excise taxes due, or a larger volume of petroleum with payment of the difference, or a lesser volume of petroleum with the option to utilize the difference in a future application or recover the same through a claim for refund or tax credit. The claim for product replenishment must be filed within 90 days from the date of delivery to the international carrier or tax-exempt entity.

It must be noted, however, that RR 2-2008 explicitly provides that imported petroleum products shall not be subject to product replenishment under any circumstance. If the claim is made up of locally manufactured and imported petroleum, it shall be disallowed. This means that, to recover the excise taxes paid on imported petroleum sold to international

carriers and tax-exempt agencies, pursuant to Section 135 of the NIRC, the only option for petroleum companies is to file an administrative and judicial claim.

This brings us to an interesting legal issue: In the case of locally manufactured petroleum, does the filing of a claim for product replenishment bar the filing of a claim for refund or tax credit, and vice versa? Are the remedies mutually exclusive? The answer is uncertain. What is only clear in RR 2-2008 is that failure to file the claim for product replenishment shall not preclude the filing of a claim for tax credit/refund. Given that the CIR v Shell case has spurred interest among petroleum companies in pursuing excise tax on petroleum claims, our courts may have the occasion to rule on this issue.

dams can drastically transform habitats. The human inhabitants displaced when their homes were flooded were given ample warning and compensation; wildlife, not so.

Wind power is harnessed through turbines, which take a huge toll on wildlife through collisions. The rotor blades of wind turbines are responsible for the deaths of hundreds of thousands of bats and birds a year, to the detriment of the ecological services these useful insectivores provide by devouring as many as 1,000 mosquitoes a night, reducing the need to use chemical pesticides.

The construction, operation and maintenance of turbines are also negative factors, especially in marine wind farms—the noise generated by the whirring of the rotors can disturb whale and dolphin species, which are particularly sensitive to sound.

Biomass production leads to habitat loss and degradation, affecting birds and terrestrial mammals. Large plantations lead to monocultures and a loss

of habitat diversity and, thus, reduce the number of species that a given area can support.

Solar, wave and tidal power similarly have their drawbacks, but the guidelines accompanying the report point the way to constructing renewable-energy installations in ways that eliminate or, at least, reduce their impacts on migrating mammals—birds, dolphins, porpoises and fish—and their habitats.

There is no silver bullet to deliver a perfect solution to the problems of our growing demand for energy and of producing it in ways that do not damage the environment in one form or another. Renewables provide many of the answers, but they need to be deployed sensitively and not indiscriminately, so that our efforts to keep the atmosphere clean and planet cool do not come at a price that our wildlife cannot afford to pay.

The author is a junior associate of DuBaladad and Associates Law Offices, a member-firm of the World Tax Services Alliance.

The article is for general information only, and is neither intended nor should be construed as a substitute for tax, legal or financial advice on any specific matter.

Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. For comments or questions about the article, e-mail the author at pierremartin.reyes@bdblaw.com.ph or call 403-2001, local 311.

Bradnee Chambers is the executive secretary of the United Nations Environment Program Convention on Migratory Species.

2nd Front Page BusinessMirror

A12 Thursday, October 30, 2014

PHL-China trade relations strong amid row–Balisacan

B

usiness activity between the Philippines and China in the first half of the year was not affected by the two Asian countries’ lingering territorial and security disputes.

Instead, according to Socioeconomic Planning Secretary Arsenio M. Balisacan, bilateral trade between the Philippines and China has even risen “tremendously” in the last four years.

The Philippines has been in a row with China in the past years due

Palace gives cryptic reply to Calax uproar

to its conflicting territorial claims over some islands in the South China Sea—which has been called by the Philippines as West Philippine Sea since.

Likewise, just last month, China has issued a travel advisory against the Philippines, warning its nationContinued from A1 Among the business groups that have voiced serious concerns over the backlash of a rebidding are the Makati Business Club, American Chamber of Commerce of the Philippines, Australia-New Zea-

als of heightened security risks following the recent killings of Chinese in the Philippines.

“Despite all these noises, it seems that it is business as usual with China,” Balisacan said at the sidelines of the Manila Times Business Forum held in Makati City on Wednesday.

In particular, Balisacan reported that as of end-July, exports to China have risen about 17.6 percent compared to the same seven-month period in 2013. This was paralleled by the Philippines’s 19.8-percent rise in importation from China during the same period.

Total bilateral trade rose by about 14 percent in 2013 to hit $15.1 billion, up from the $12.85 billion in 2012. From January to July this year, total trade volume of the Philippines

land Chamber of Commerce in the Philippines, Canadian Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry in the Philippines and the Management Association of the Philippines.

BALISACAN: “So, despite all these bans and government intervention, we still see quite a significant movement in tourist arrivals for mainland China to the Philippines.”

with China already hit $10.26 billion.

“So things are not slowing down insofar as the economic relationship between China is concerned as seen in these numbers,” Balisacan said.

The secretary also cited latest data from the Department of Tourism (DOT) showing China as the

fourth-largest tourist market of the Philippines.

“So, despite all these bans and government intervention, we still see quite a significant movement in tourist arrivals for mainland China to the Philippines,” Balisacan said.

Also, Manila is looking forward to an even freer trade with Beijing as some applied tariffs with China will subsequently be reduced to 0 to 5 percent not later than January 2018, from the existing 20-percent tariff rate.

Balisacan said he hopes to see more Chinese investments, particularly in the sectors that play important roles in the Philippines’s growth story, particularly manufacturing, logistics, infrastructure, agriculture and power. Bloomberg News

Doing business. . . continued from a1 Another problem area cited is in the area of starting a business, where the country was ranked 161st out of 189 and protecting minority shareholders, 154th out of 189.

The report also showed that the Philippine ranking in other areas was still above 100. These areas are paying taxes, where the country ranked 127th out of 189; dealing with construction permits, 124th; registering property, 108th; and getting credit, 104th.

The World Bank said the indicator sets for three of the 10 topics are being expanded in this year’s report, while five indicators will be expanded in the 2016 report.

Further, the ease of doing business ranking is now based on the DTF score.

This measure shows how close each economy is to global best practices in business regulation.

This means that a higher score indicates a more efficient business environment and stronger legal institutions.

The World Bank also said for the first time, Doing Business collected data for a second city in the 11 economies with a population of more than 100 million.

These economies are Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the US. The report found that differences between cities are common in indicators measuring the steps, time, and cost to complete regulatory transactions where local agencies play a larger role.

The report finds that Singapore tops the global ranking on the ease of doing business. Joining it on the list of the top-10 economies with the most business-friendly regulatory environments are New Zealand; Hong Kong SAR, China; Denmark; the Republic of Korea; Norway; the US; the United Kingdom; Finland; and Australia.

Despite the improvement, the Philippines only ranked fifth in the Asean, behind Vietnam, which is at 78th place; Thailand, 26th; Malaysia,

18th; and Singapore, first.

National Competitiveness Council Chairman for the Private Sector Guillermo Luz said the Philippines could have fared better than the 13-spot jump had the World Bank communicated the new changes in the methodology sooner.

“We could have done better than 95; we have been submitting data since January of the year and we only found out a few days ago of the changes and the new steps placed in the indicators,” Luz said in an interview with reporters after the presentation of the rankings, explaining the drop in some indicators of the report.

According to the World Bank, the DTF calculation allows users to see the gap between a particular economy’s performance and the best performance at any point in time.

“In this year’s Doing Business, we revised some indicators to include more consideration of their quality,”said Motoo Konishi, Philippines country director of the World Bank, in response to the adjusted evaluation system.

The truck ban pulled down the country’s ranking in the tradingacross-borders indicator, from 2014’s 42nd to the 65th spot this year.

Hans Shrader, senior program manager for trade and competitiveness of the the World Bank Group, said areas that need improvement are reducing procedures in business registration, expanding reforms in getting construction permits, getting credit, protecting minority investor and enforcing contracts.

The annual World Bank Group flagship Doing Business report analyzes regulations that apply to an economy’s small- and medium-sized businesses during their lifecycle, including start-up and operations, trading across borders, paying taxes and resolving insolvency.

According to the World Bank, the Philippines has gained 53 spots in the Doing Business report since 2011.

Budget shortfall. . . continued from a1

September, higher than last year’s comparable figures by 21.4 percent and exceeding the program by 1.8 percent.

Year-to-date, total revenues reached P1.425 trillion, a growth of 12.5 percent year on year,” Purisima said in a statement.

Out of the total revenues of P1.425 trillion, the BIR collected P996.4 billion, a double-digit growth of 11 percent from its collection from January to September 2013.

For the month of September, the Bureau of Customs (BOC) also reported double-digit growth. In September the BOC’s collection amounted to P32.9 billion, or a 27.7-percent increase from its collection a year ago. Year-to-date, the collection of the BOC totaled P265.8 billion, an improvement of 18.3 percent from comparable figures last year.

The Bureau of the Treasury (BTr), for its part, contributed P5.6 billion in September, down by 23 percent from a year ago. The DOF said this is due to the lower interest earned from investments and deposits. Yearto-date, the BTr’s income increased by 19 percent from comparable figures last year, surpassing its target by

www.businessmirror.com.ph

Lemon law IRR awaits Domingo’s signature

By Catherine N. Pillas

T

he Lemon law’s implementing rules and regulations (IRR) has been completed and is now awaiting the approval of Trade Secretary Gregory L. Domingo, a ranking official of the Department of Trade and Industry (DTI) said on Wednesday.

“We’re done [with the IRR].

It has passed the review of the legal department, as well as other processes. It’s now for the secretary’s signature. Hopefully, we can still beat the November 7 deadline,” said Trade Undersecretary for Consumer Protection Victorio Mario A. Dimagiba in a news briefing with reporters on Wednesday.

Dimagiba said the IRR clarified the steps that a complainant should take in using the law. It should make the process easier for consumers, he added. “There’s a prescribed form the complainant should fill out, and the IRR states clearly there are five attempts for repair,” Dimagiba said.

Meanwhile, in the first case testing the newly passed Lemon law brought before the DTI, Dimagiba said it may likely end up in a settlement.

“There were three sessions of mediation, but there was no agreement; so we proceeded to adjudication and, from what I understand, the adjudicator has submitted our position paper on it. The adjudication officer will probably have another hearing to call on an expert to testify on the defect, but, at the same time, the lawyer of Audi told the officer that a settlement can take place.

It may end up to be a settled case,” Dimagiba said.

According to an earlier report of the BusinessMirror, businessman Ricardo Nolasco Jr. filed a complaint against Audi Motorcars Inc. after a brand-new A6 3.0 TDI vehicle he purchased earlier in the year was found to be defective.

He was quoted as saying that the brand-new vehicle “showed signs of defects as erratic and or random error messages appearing on the dashboard panel which are alarming and misleading.”

After four attempts at repair, the defects were not resolved and have been further aggravated to the point of affecting the performance of the car, Nolasco said in his complaint.

Dimagibatoldreporters thatthe settlement could mean a replacement with additional payment and that the parties “almost agreed with replacement of the unit.”

82 percent because of higher dividend collections and interest income.

In terms of expenditures, the government also spent more in September than during the same month last year, spending P159.8 billion, or 9 percent more than the expenditures in September 2013.

Year-to-date expenditures amounted to P1.5 trillion, or about 6 percent higher than the total expenditures during the same period last year.

Purisima noted that as a percentage of expenditures, interest payments for the first three quarters of the year declined to 17.7 percent, from 18.9 percent for the same nine-month period in 2013.

“Year-to-date interest payments came in at P257.4 billion, lower than programmed and thus generating savings of P19.0 billion. Interest payments as a share of the national government’s disbursements continued its downward trend—as of the third quarter of this year, the percentage has dropped to 17.7 percent from 18.9 percent in the same period a year ago,” Purisima said.