Businessmirror august 31, 2015 by BusinessMirror

Huge Malaysia rally for Najib’s resignation enters 2nd day »B3-1

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Thursday 201431, Vol. 10 No. 40Vol. Monday,18, August 2015 10 No. 326

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Collection of additional taxes from contractors may discourage investments in oil exploration

‘Malampaya ruling worries investors’ By Lenie Lectura

nvestor confidence in the certainty and stability of local investment laws may have been damaged by the recent finding by the Commission on Audit (COA) ordering the consortium behind the Malampaya Deepwater Gas-to-Power Project to pay the government P53.14 billion, approximately $1.19 billion, in taxes.

INSIDE

pageant updates

Life

The teacher, You

ear God, do You hear our voices? When we have our trials, when we ache for our pains, when our loved ones seem not to care, when we are down because of sickness, when our financial and basic needs are not enough, when hope is at a distance, when light is nowhere, when we are weary and devastated. Oh, yes, our loving God, it could be because our voices are louder than Yours. Help us remember always, that the teacher, You, is always quiet and ready to assist during the test. amen. FB InspIratIons, Yetta L. Cruz and LouIe M. LaCson Word&Life Publications • teacherlouie1965@yahoo.com

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Editor: Gerard S. Ramos

ALL ACCESS:

HigH HopES for ‘HEnErAL LunA’ »d3

lifestylebusinessmirror@gmail.com | Monday, August 31, 2015 D1

Pageant updates from the Binibinis

ANNE LORRAINE COLIS

Twitter: @misscharlize

EAUTy-CONTEST fanatics like me thought we had nothing to cheer for at the moment, what with the major pageants scheduled at the end of the year yet. But we were thrown into a frenzy last week when the Binibining Pilipinas organization announced, not just one but two pageants, that our beloved Binibinis will be sent to compete in. PARUL SHAH and Ann Lorraine Colis BRUCE CASANOVA FOR OPMB WORLDWIDE

PARUL SHAH in Leo Almodal

Parul Shah, crowned Bb. Pilipinas Tourism in 2014 and who was not able to compete internationally during her reign, will be sent to represent the country in the Miss Grand International (MGI) in Bangkok, Thailand, on October 26. She is set to leave on October 4. On the other hand, the reigning Bb. Pilipinas Tourism, Ann Lorraine Colis, will leave for Toronto, Canada, on September 20 to vie for the Miss Globe title on October 11. Ideally, both would have been sent to the Miss Tourism Queen International pageant, but this tilt hasn’t been staging a contest in recent years. Our own Justine Gabionza reigned in 2006. Like Venus Raj, Parul is half-Indian. She is a nursing graduate from the University of the Cordilleras. She previously competed in Bb. Pilipinas in 2013 and emerged one of the top 15 finalists. The Dubai-born, dusky beauty is fluent in English, Filipino, Hindi and Arabic. MGI is now on its third year and is fast gaining traction as a pageant powerhouse, attracting more than 80 contestants from around the world. It is a “search for the potential woman to encourage and run the campaign ‘Stop War and Violence’ to help people to avoid conflict and violence that may lead to war in any form.” Parul hopes to better the third-runner-up finish of Annalie Forbes in 2013 at MGI. The reigning queen is Daryanne Lees of Cuba. Meanwhile, Ann Lorraine will be the first beauty queen to compete internationally. However, there’s too much confusion between Miss Globe (www.themissglobe.com), the

pageant, which she will be sent to, and Miss Globe International (www.missglobeinternational. com). The latter lists the Philippine representative as one Princes Ramos (yes, Princes). But wasn’t Toni Alyessa Hipolito, another Bb. alumna, bound for this competition supposedly in Brussels, Belgium? (Our own Maricar Balagtas won in 2001.) Ann Lorraine, 22, was one of my favorites at the recent Binibini pageant for her regal bearing, Nina Ricci Alagao confidence and Lala Flores winning smile. She is a management accounting graduate of the University of Santo Tomas. She hails from Mexico, Pampanga. I admit I’m not very familiar with Miss Globe, and the Internet offers little information. On its site, Miss Globe, founded in Albania and run by Petri Bozo of Deliart Association, was built on the mission of introducing to the world a different side to the little European nation—not its problems and poverty, but its true nature as a beautiful, ancient, attractive and welcoming country. This much it has in common with Miss Earth and the Philippines, Miss Grand and Thailand, and Miss International and Japan. I’m afraid Ann Lorraine will have an uphill climb to winning the Miss Globe crown. Previous winners are mostly of the blond, blue-eyed, Latina variety, such as Bianca Maria Paduraru of Romania (2013), Kleoniki Deligorgji of Albania (2012), Stephanie Alice of Germany (2011), Laura Urbonite of Lithuania (2010), Samah Gahfaz of Algeria (2009), Almeda Abazi of Algeria (2008), Helen da Silva of Brazil (2007), Viviana Puna of Venezuela (2006), Lucia Liptakova of Slovenia (2005) and Kristina Slavinskaya of Russia (2004). The reigning Miss Globe is Jacqueline Wojciechowski of Canada. In carriage and elegance, Ann Lorraine closely resembles the Slovenian Liptakova. Will she be the first Asian to be Miss Globe? Here’s hoping for the best!

primer launches the first-ever the sak Brand Group pop-up store

EEPLy rooted in peace and harmony, The Sak Brand Group was founded in 1989 by Mark Talucci and Todd Elliott after an inspirational trip to the East. As natural entrepreneurs who were growing jaded in the corporate setting, the two were instantly captivated with the extraordinary objects

and artisan fabrics they discovered in Bali. Soon, the two began importing these “found treasures” to their hometown in San Francisco, California. Today, The Sak Brand Group has grown to become a leader in the handbag industry and has expanded into a lifestyle company that owns and operates several distinctly different accessory brands, including The Sak (www.thesak.com) and Sakroots (www. sakroots.com), which both offer multiple categories, such as handbags, accessories, and travel goods—all of which imbibe that quintessential California-cool attitude. As the formidable brand group continues to expand and reach out to the rest of the world, it found an ideal partnership in the Philippines with retail giant and iconic brand-building institution, the Primer Group of Companies. To officially announce its exclusivity with the Primer Group, The Sak Brand Group held a press launch last August 26 in Makati City—all to celebrate several milestones, namely, its newly officiated partnership, the introduction of its newest collection for fall, and the opening of its first-ever pop-up store in Glorietta 2. The Sak and Sakroots are also available at The Travel Club and Bratpack stores, and other leading retailers.

life

According to the Department of Energy (DOE), the COA decision “has totally brought havoc to the representation of the government to these investors.” The COA told the DOE to collect the additional taxes from the consortium members, which include Shell Philippines Exploration (SPEX) BV (45 percent), Chevron Malampaya Llc. (45 percent) and Philippine National Oil Co.-Exploration Corp. (PNOC-EC) (10 percent). To recall, the COA overruled the petition of the Malampaya consortium, together with the DOE, that the income tax was already included in the government’s 60-percent share in the Malampaya royalties. The tax, they argued, was deductible from the government’s share of the Malampaya earnings. However, the COA said there

BusinessMirror

Modernizing PHL military on a shoestring budget

Monday, August 31, 2015 E 1

Long Hours Backfire

for PeoPLe and comPanies A By Sarah Green Carmichael

lArge body of research suggests that regardless of our reasons for working long hours—demanding bosses, financial incentives, personal ambition–overwork does not help us.

Lessons from the US military on thwarting cyberattacks James A. (Sandy) Winnefeld Jr.

HE uS department of defense has found that most successful cyberattacks are made possible by poor human performance. Consider, for instance, the recent breach of the unclassified e-mail system used by employees of the Joint Chiefs of Staff in the pentagon, which was reportedly achieved through a spear-phishing e-mail. indeed most organizations pl ace too l itt le emphasis on chang ing behav ior and too much on technica l safeg uards. The uS military is strengthening its cybersecurity by applying the methods used by the navy’s

nuc lea r - propu l sion prog ra m, whose safety record is second to none. These include a robust program of training, reporting and inspections, as well as six operational excellence principles: Integrity, a deeply internalized ideal that leads people, without exception, to eliminate deliberate departures from protocol and own up immediately to mistakes. depth of knowledge, or a thorough understanding of all aspects of a system, so people will more readily recognize when something is wrong and will handle any anomaly more effectively. Procedural compliance, which enta i ls requ ir ing workers to know—or know where to find—

proper operational procedures and to follow them to the letter. They’re also expected to recognize when a situation has eclipsed existing written procedures and new ones are called for. Forceful backup, which means, among other things, having two people, not just one, perform any action that poses a high risk to the system and empowering every member of the crew to stop a process when a problem arises. A questioning attitude, which can be instilled by training people to listen to their internal alarm bells, search for the causes and then take corrective action.

Formality in communication,

which means communicating in a

prescribed manner to minimize the possibility that instructions are given or received incorrectly at critical moments (e.g., by mandating that those g iv ing instructions state them clearly, and the recipients repeat them back verbatim). The entire uS military is gradually embracing these methods to bolster cybersecurity, and business leaders would do well to follow that example. Technological safeguards alone will not make a company safe. James A. (Sandy) Winnefeld Jr. was the ninth vice chairman of the US Joint Chiefs of Staff and an admiral in the US Navy until August 2015, when he retired.

A consultant’s guide to difficult client feedback Ron Ashkenas

uring one of my first consulting assignments, a colleague and i interviewed a chief information officer’s direct reports about improving project execution. We consistently heard that the CiO was autocratic and intimidating, and that his people were afraid to talk openly about mistakes. We met with the CiO and, with some trepidation, gave him this feedback—direct and to the point. To our relief, he said “thank you” and that he’d take the feedback into consideration. At the next meeting with his direct reports, however, he said, “i hear from the consultants that you’re afraid to be open with me.

is that true?” Of course, each person denied the allegation, after which the CiO turned to us and said: “See, i didn’t think that people were afraid of me.” in hindsight, it’s easy to see that we should have been more adroit about the feedback process. But after hearing over and over that the CiO was intimidating, we were unconsciously terrified. So our approach to giving feedback was essentially: get it over with and get out of there. Our own anxiety got in the way of giving constructive feedback. When left unchecked, anxietydriven behaviors impair your judgment and prevent you from doing what’s in the client’s best interest. To avoid this, consultants need to remove themselves

from the feedback they’re giving. remember that it’s not about you; it’s to help the client become a more effective manager. You also have to gauge a client’s readiness to hear your message— and openness to change—and adjust how you deliver feedback accordingly. i recently worked with a large division of a health care company that was struggling to meet its revenue targets. Based on feedback and data, one of the keys to a turnaround was for the division head to be more demanding and to hold people accountable for deadlines and deliverables. This manager, however, wanted everyone to like her and didn’t want to come across as “tough.” i couldn’t just tell her to change her behaviors; rather, we had to

explore what it would mean to be more demanding and test out different ways for her to start being tougher. i walked her through the data until she reached the conclusion, on her own, that “people want me to hold them to deadlines in a more disciplined way.” Then we got into a problemsolving discussion about how she might do that. no matter the approach, giving feedback to anyone is a difficult dance that requires thought, preparation and learning over time. But when you get it right, it can be the beginning of a valuable partnership.

For starters, it doesn’t seem to result in more output. in a study of consultants by Erin reid, a professor at Boston university’s Questrom School of Business, managers couldn’t tell the difference between employees who actually worked 80 hours a week and those who just pretended to. While managers did penalize employees who were transparent about working less, reid was not able to find any evidence that those employees actually accomplished less, or any sign that the overworking employees accomplished more. Considerable evidence shows that overwork hurts us and the companies we work for. numerous studies by Marianna Virtanen of the Finnish institute of Occupational Health and her colleagues (as well as other studies) have found that overwork and the resulting stress can lead to all sorts of health problems, including impaired sleep, depression, heavy drinking, diabetes, impaired memory and heart disease. Of course, those are bad on their own. But they’re also terrible for a company’s bottom line, leading to absenteeism, turnover and rising health insurance costs. researchers have found that

overwork (and its accompanying stress and exhaustion) can impede interpersonal communication, making judgment calls, reading other people’s faces and managing your own emotional reactions—all things that the modern office requires. Even if you enjoy your job and work long hours voluntarily, you’re simply more likely to make mistakes when you’re tired. Only 1 percent to 3 percent of the population can sleep five or six hours a night without suffering some performance drop-off. Work too hard and you also lose sight of the bigger picture. research suggests that as we burn out, we have a greater tendency to get lost in the weeds. in sum the story of overwork is one of diminishing returns: Keep overworking, and you’ll progressively work more stupidly on tasks that are increasingly meaningless. now, this isn’t to say we can never pull a long day. We just can’t do it routinely. Most of the research i’ve seen suggests that people can put in one or two 60-hour weeks to resolve a true crisis. But that’s different from chronic overwork. Sarah Green Carmichael is a senior associate editor at Harvard Business review.

By Marc Effron & Miriam Ort

T’S much easier to propose dramatic reinvention and trendy new practices than to execute the sometimes boring fundamentals of great human resources (Hr). While change in the Hr function is overdue, the function won’t be deemed successful until it can flawlessly do one thing: improve business results by increasing the company’s talent quality and depth. getting to that outcome is simpler and easier than it might appear. There are three fundamental elements:

Research-based simplicity

THOuSAndS of research-based articles published in the past 50 years tell us why organizations and people behave as they do. From increasing employee satisfaction to building effective teams, we largely understand which levers to push or pull to get optimal results. if we genuinely care about Hr being effective, then that science seems like the logical place to start. We should understand what the academic research says about how a process should work and then implement that knowledge in the simplest possible way.

consequences for managers who developed their team. in only 12 percent of companies did managers suffer negative consequences for not developing their team members. To increase accountability, the executive team should agree on the two talent measures for which leaders will be held accountable (we suggest engagement scores and talent depth in key roles.) We believe that the most effective approach combines cultural accountability (public praising or shaming of leaders) and compensation-based accountability.

Transparency

TrAnSpArEnCY about the outcome of talent practices, especially about one’s potential to advance, is still rare in most organizations. But transparency is simple: You start being open with people about where they stand and why. Simple doesn’t mean easy, of course. it will require some difficult conversations—difficult because many are months or years overdue. if you don’t want to be transparent, then it might help to consider the question, “How long do you feel it’s appropriate to lie to your employees about their future?” These elements are the relevant and necessary foundation for any company that believes that better talent delivers better business results.

Monday morning Ron Ashkenas is a managing partner of Schaffer Consulting. His latest book is Simply Effective.

By Rene Acosta

The Unsexy FUndAmenTAls oF GReAT hUmAn ResoURces

Accountability

WiTH regard to talent building, accountability is still in very short supply in most companies. in a recent new Talent Management network study, only 30 percent of companies said there were positive

Marc Effron is president of The Talent Strategy Group. Miriam Ort is the head of human resources for PepsiCo UK. They are coauthors of One page Talent Management: Eliminating Complexity, Adding Value.

Gift of gold

Sports BusinessMirror

| Monday, august 31, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

JaMaica’s Usain Bolt takes a photo with his teammates after ruling the men’s 4x100-meter relay final. AP

UniteD states’s ashton eaton celebrates after winning the gold medal in the men’s decathlon in a world-record 9,045 points. AP

Eaton breaks world record as he wins decathlon gold By Pat Graham

The Associated Press

Bolt wins again, with help FroM UniteD states

GIFT OF GOLD B

By Eddie Pells

The Associated Press

EIJING—Usain Bolt’s final gold medal at the Bird’s Nest came giftwrapped. With a red-white-and-blue bow, too. The world’s fastest man made it three-forthree in Beijing again, leading the Jamaicans to a runaway win on Saturday in the 4x100-meter relay that came easy, thanks to an American team that still hasn’t figured out how to get the baton around the track. Tyson Gay’s handoff to anchor Mike Rodgers came outside the passing zone, and the Americans were disqualified. It turned Bolt’s anchor leg into a pick-your-time free-run to the finish. He went hard the whole way, grimacing and dipping his head at the line, to finish Jamaica’s lap in 37.36 seconds. That was .52 off the country’s world record but more than fast enough to do the job against the team that consistently folds under the bright lights. This marked the eighth time since 1995 the American men have either been disqualified or failed to finish at the worlds or the Olympics. “We know the key thing is just to get the baton around,” said Bolt, who extended his record to 11 gold medals at world championships. “Because with the US, we know we always have the best team, and they tend to panic. Pressure gets to them sometimes.” In the women’s race, Jamaica did it with pure speed, no gifts. Three-time 100-meter world champion Shelly-Ann Fraser-Pryce blew by Jasmine Todd on the anchor leg for the gold. The American team, with Allyson Felix in the second

position, got the baton around cleanly to secure the silver. That left Ashton Eaton as the only American winner on Saturday—and what a win it was. The gold medal already secured, Eaton ran the final event of the decathlon, the 1,500 meters, in 4 minutes, 17.52 seconds to finish with 9,045 points and break his old world record by six. “It’s like, where do you find the inner strength?” Eaton said. “I don’t know. But I think the important thing is to search for it.” Other gold medals went to Maria Kuchina of Russia in the high jump; Marina Arzamasova of Belarus in the 800; Piotr Malachowski in the discus; and Matej Toth of Slovakia in the 50-kilometer walk. Mo Farah completed his second straight double at the world championships, adding the 5,000-meter win to his earlier 10,000 title. After getting passed by Caleb Ndiku with two laps to go, the British runner lined him up and charged past over the final 100 meters. All in all, it was a more suspenseful homestretch than the men’s relay produced. Thanks to Justin Gatlin’s speedy second leg, the US was ahead through about 250 meters. But as Gay approached Rodgers for the final handoff, Rodgers appeared to start too early. Gay flailed the baton as his teammate took off and reached back his left hand. The exchange wasn’t complete until after Rodgers had crossed the yellow line at the end of the passing zone. “I don’t know if I left on time, I don’t know if I left early,” Rodgers said. “I don’t know what happened.” Even without the DQ, which moved China up to second place and Canada into third, the

US was history. Rodgers finished 0.41 seconds behind Bolt. Explanations, there were plenty. “It has to be bad luck,” said Gay, whose doping violation caused the US to retroactively lose the relay silver they took at the London Olympics. Gatlin: “Mike and Tyson got lost in the excitement and the crowd and they couldn’t hear each other, and they were out of the zone.” Maybe Jamaica’s Nickel Ashmeade was onto something. “It’s like chicken—put in a pot, pressure too much, they can’t handle it,” Ashmeade said. Bolt has a way of doing that to them. Though Bolt took offense to the idea, Gatlin said his early lean in the 100 meters last week gave away the race he lost to Bolt by 0.01 seconds. Some portrayed it as a pressure-induced mistake. That win was the fuel Bolt needed to get stronger over the rest of the meet. Seven years after he introduced himself to the world at the Beijing Olympics with three gold medals and three world records, he leaves China as the legend—a single shining star in an otherwise troubled sport dogged by doping. The Olympics in Rio de Janeiro are less than a year away, and there, Bolt will try to make it three sprint sweeps in three Olympics. Nobody had ever swept two before he came along. But before that, he’ll head back to the island and enjoy what he did at these world championships. Bolt heard what the haters were saying when he came to Beijing hurting and not at his best: He was beatable. He was done. “I came out and proved you can never count Usain Bolt out,” he said. “I’m a champion.”

EIJING—This was going to hurt. No way around it for Ashton Eaton. To get where the American decathlete wanted to go, he had to endure just a little more pain, dig just a little deeper. So Eaton gritted his teeth and charged ahead, grimacing as he stepped over a low railing and into the stands to wrap his exhausted arms around his wife. That was about all the strength he had left. Setting a world record takes that much out of you. With an all-out run in the final event, the 1,500 meters, Eaton finished the two-day event with 9,045 points on Saturday at the world championships. It was six points better than the mark he set at US Olympic Trials in 2012. “It’s like, ‘Where do you find the inner strength?’ I don’t know,” Eaton said. “But I think the important thing is to search for it.” The 27-year-old Eaton hasn’t completed a full decathlon since capturing the world title in Moscow two years ago. That was also the last time he ran a 1,500. But in the 10th and final event, with his Achilles and knee throbbing and the record within reach, he went for it. Eaton needed to finish in 4 minutes, 18.25 seconds to earn enough points. He used a faster runner, Larbi Bourrada of Algeria, to pace him around the track. And with the finish line in sight, Eaton pushed even harder. He crossed the line, looked at the clock almost in disbelief—4:17.52. Only, he didn’t have the energy to raise his hands. The only thing he could do was drop to the track, where he sprawled across two lanes. The runners finishing up the event carefully avoided stepping on him. “I didn’t think this thing was possible,” Eaton said. It always is whenever Eaton steps onto the track. Especially when he’s in this kind of shape. On the first day, he broke the world-record time for the 400-meter decathlon event, finishing in 45.00 and eclipsing the old mark he shared with 1968 Olympic champion Bill Toomey by .68 seconds. He also ran the 100 meters in a championship-record 10.23 seconds. Most of the second day, he was hovering within world-record range. What really did the trick was the javelin. He threw it 63.63 meters, not his best, but a mark that put him within striking distance going into the grueling 1,500. “After his first warmup throw, I went down to give him a cue and he just said, ‘Coach, I’m ready,”’ said Harry Marra, who instructs Eaton and his wife, heptathlete Brianne TheisenEaton. “I could see it in his eyes. He knew.” Shortly after hugging his wife, Eaton ever-so-slowly made his way over for pictures in front of the on-track display flashing his world-record score in yellow letters. He leaned against it for support. Later, he was front and center when the decathletes lined up on the track to take a bow. “You’re always fighting for gold, but when the guy breaks the world record you can’t complain too much,” said Damian Warner, who finished runner-up to Eaton. He’s taking some of the credit, too. Warner gave Eaton some of his pasta before the 1,500. “I think that helped a little bit,” Warner said. Eaton shot back: “Yeah, but my breath smells like onions so...” A small price to pay. “I knew he was in shape to be able to get the record,” said Theisen-Eaton, who won silver in the heptathlon. “You just don’t know what you have left.” Turns out, plenty. “The first day, you’re an athlete, anyone can do the first day,” said Eaton, who went to the University of Oregon. “The second day, you’re a decathlete.” Some are better than others, but nobody’s better than Eaton—and he’s not done breaking records yet. “You can bet I’m going try to get more,” Eaton said. “Because that’s the only thing to do.”

Mo rUles 5,000 Meters For 5th worlD title

EIJING—Only seven years ago, Mo Farah was daydreaming about winning a medal—just one, any color. On Saturday the British distance runner was on the track posing with Usain Bolt at the Bird’s Nest as the friends continue to collect gold by the bagful. With his runaway victory in the 5,000 meters, Farah now has five world titles in as many major races dating back to the same event in Daegu in 2011. He’s also got two from the 2012 London Olympics. “If you would have said to me seven years ago

you’ll have one medal, I’d say OK,” Farah said. Bolt, he’s not—with his high-pitched voice, wiry frame and ever cheerful demeanor. But to any long-distance runner out there, Farah is just as formidable. The way he won Saturday’s 5,000 was almost ho-hum. The early pace was so slow that he sat back in last place for the first two kilometers, even veering away to grab some drinks during the race to deal with the 28-degree C (82-degree F) temperature.

With the experience of a 32-year-old veteran, he moved up by midway. When Caleb Ndiku made a dash for victory with two laps to go, Farah quickly settled into his slipstream and then overtook him with ease in the finishing straight. Another gold in the pocket. As much as he had been yearning for medals early in his career, now something else is gnawing at his heart—the sense of family. The loneliness of a longdistance runner training in remote areas is starting to wear him down.

Sports

“Definitely been hard. Never easy,” Farah said. “The other day I was speaking to my daughter and she thinks I have another home somewhere else. She said: ‘Daddy, I’m coming to your home.’” His preferred address next year: the Engenhao in Rio de Janeiro, where there are two more gold medals up for grabs in next year’s Olympics. AP Mo Farah breaks down after bagging »theBritain’s gold in the men’s 5,000-meter final. AP

See “Malampaya,” A12

special report

long hours backfire www.businessmirror.com.ph

was no provision in the law stating that the income tax of the contractors forms part of the share of the government. In a 30-page motion asking the COA to reconsider, the DOE pleaded the decision reversed and set aside. “The assailed decision has sent a very wrong signal to existing and future petroleum-exploration investors in the country,” the energy department said. The DOE warned that the decision “will cause enormous harm to the country’s long-term interest, as it will further erode the confidence of investors in the stability and certainty of our rules and regulations.” The COA decision, dated April 6, 2015, stated that the consolidated petitions for review of SPEX, PNOC, Chevron and the DOE was “hereby denied.”

First of three parts

n the decades that spanned four administrations, including the government of Fidel V. Ramos, the Armed Forces of the Philippines (AFP) was forced to accept the reality that it was a laggard among the military troops in Southeast Asia, particularly in the area of firepower. While Ramos vainly attempted to upgrade the military and make it on a par with its regional counterparts, his efforts sputtered, due mainly to the lack of funds or the absence of political will. Ramos’s efforts to transform soldiers into modern and adequately equipped fighting troops through Republic Act (RA) 7898, or the military modernization law, which was passed during his term in 1995, was supposed to have given the military new assets and equipment.

PESO exchange rates n US 46.7050

But the law—with a coverage of 15 years and with an initial budget of P50 billion during its first five years—only gave the AFP a paltry amount, which it even used in the repair and maintenance of its decrepit and vintage World War II assets. Worse, the modernization of the military failed to pick up speed during the succeeding administrations of Joseph Estrada and Gloria Macapagal-Arroyo until the law expired in 2010. Estrada’s term was aborted after barely three years in office.

New modernization law

In December 2012, RA 7898 was amended by RA 10349, or the revised AFP Modernization Act, which extended the law for another 15 years and allocated an initial budget of P75 billion for the first five years of its implementation. The Continued on A2

TOYOTA MOTOR PHILIPPINES GRADUATION Rene So (from left) Toyota Dealers Association President; Michinobu Sugata, Toyota Motors Philippines (TMP) president; and Alfred Ty, TMP Vice Chairman, congratulate Melvin Lunas for being named as the Most Outstanding Student of TMP School of Technology during the school’s first commencement exercises in Santa Rosa, Laguna. NONIE REYES

Firms to hire more workers in Q4–BSP By Bianca Cuaresma

usinesses across the country look to hiring more employees—not just for the July-toSeptember period, but in the final three months—as the entire archipelago ramps up preparations for the Christmas holidays. This was indicated in latest data from the Bangko Sentral ng Pilipinas (BSP) showing significant improvement in the employment outlook index, which lifted from 20.7 percent to 22.3 percent in the October-to-December period. “This indicates expectations of an overall increase in the number of new employees to be hired for the fourth quarter of the year,” the BSP said. This developed even as the number of industrial companies with expansion plans for the period rose from 29.1 percent to 32.9 percent. According to the BSP, the various businesses anticipate better financial conditions and greater access to

financing not just for now but in the waning months of the year, as well. “Firms that expected better financial conditions outnumbered those that said otherwise during the quarter. Firms were also of the view that their financing requirements could be met through available credit, as respondents who reported easy access to credit exceeded those that said otherwise. Notably, the number that said so also increased compared to that a quarter ago,” the BSP said. The employment index is computed as the percentage of firms optimistic about added employment and expansion plans minus the percentage of firms which indicated otherwise. A higher index means that the number of firms wanting to expand and hire more employees are in lockstep with positive economic developments. “Among subsectors, agriculture, fishery and forestry recorded the strongest expansion plans, followed by electricity, gas

and water, mining and quarrying, and manufacturing,” the BSP said. Meanwhile, the major business constraints identified by the businesses in the months of July to September were domestic competition and insufficient demand leading to low sales volume. The BSP survey also showed that more respondents expected inflation to increase compared to those who said otherwise for the current and next quarters. However, businesses expected that the rate of increase in commodity prices was likely to remain low and within the 2-percent to 4-percent target range in 2015, at 2.7 percent for the third quarter of 2015 and 2.9 percent for the fourth quarter of 2015 (compared to 3.2 percent and 3.4 percent in the previous quarter’s survey results, respectively). Meanwhile, more respondents expected the peso to appreciate than those who said otherwise for the third quarter and the fourth quarter of 2015.

n japan 0.3860 n UK 71.9444 n HK 6.0263 n CHINA 7.2916 n singapore 33.3893 n australia 33.4635 n EU 52.5571 n SAUDI arabia 12.4523 Source: BSP (29 August 2015)

A2 Monday, August 31, 2015

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Modernizing PHL military on a shoestring budget Continued from A1

Department of National Defense drafted and implemented the “Horizon,” a three-phase plan that would modestly equip the individual soldier and the defense establishments as a whole until2028.The Philippine Air Force and the Philippine Navy crafted their “flight” and “sails” plans, respectively, and the Army began to transform itself into a modern force that “is a source of national pride.” Barely three years since the revised modernization law was implemented, assets and equipment had begun to trickle into the AFP. “It may be recalled that P331 billion was allocated for the implementation of the AFP Modernization Program under RA 7898, however, only P58.4 billion was released. It must be mentioned that of this amount, P31.6 billion was provided during the Aquino administration,” Defense Secretary Voltaire T. Gazmin said late last year.

Transforming the military

While the modernization of the military

is basically focused on equipping its troops with modern assets and equipment like stateof-the-art weapons, ships and aircraft, the AFP must, however, transform its mind-set to cope with the changes associated with using new weapons. “The modernization program is not only about buying the assets and equipment, but in preparing our personnel in handling these assets. It involves training and organizational transformation,” AFP Public Affairs Office Chief Lt. Col. Noel Detoyato said. Detoyato said the military must make adjustments so that troops could fully use the new equipment. “Doctrine will also have to be adjusted,” he said, adding that while the AFP is revising its doctrine “every five years or earlier,” the arrival of new assets and equipment necessitates an earlier adjustment. However, whether the new assets and equipment were for internal or external defense, the doctrine in relation to the equipment stays. “In the case of infantry, the doctrine

must be adjusted in the way [a soldier] fights using the new weapon. But whether he is fighting insurgency or any other threat, it is the same weapon that he would be using,” Detoyato said. Part of the military’s modernization program is the acquisition of force protection system for soldiers, which includes basic equipment such as firearms, nightfighting apparatus, helmets, vests and even combat boots. “The force protection gears are the same equipment that the infantry would be using whether they would be involved in internal security operations or territorial security,” Detoyato said. Of the big-ticket items identified in the modernization, smaller procurements have been made for the military, which boosted the morale of soldiers. These included the purchase of M-4 assault rif les, Squad Automatic Weapon (SAW) that met the military’s standard requirement of having two SAWs for every squad of soldiers, more advanced

radio, like Harris squad and platoon radio, and night-operating systems, like goggles and scopes. The Philippine Army has also ordered 28 Israeli-upgraded M113 armored personnel carriers in a government-to-government contract, six of which have already been delivered. The 28 armored personnel carriers (APCs), 14 of which were upgraded into fire-support vehicles, four as armoredrecovery vehicles, six as APCs and four as infantry-fighting vehicles, were procured for P882 million. The APCs are armed with the latest automated firing system that has a 99.9percent accuracy of hitting its target with a single bullet. “This means that the sighting and correction for wind shear and other factors are done electronically and that a highly accurate and computerized firing control ensures for a very lethal weapon system against the enemies of the state,” Israeli defense contractor Elbit System Ltd. said.

APCs are usually fitted with machine guns that allow strafing fire. The upgraded APCs are also equipped with modern thermal sights and infrared equipment, which means that firing can be done even in the dark, allowing soldiers to effectively engage their targets. Detoyato said the military choose the APCs because the AFP already has the expertise in using them, and as such, could easily integrate the weapons into its system. The AFP is also in the process of acquiring 114 M113 APCs from the US through the latter’s Excess Defense Articles, which would allow the Philippines to get the equipment for free. However, the military has to shell out more than P60 million to cover freight costs. Detoyato said the military is not acquiring assets and equipment in order to portray force in Southeast Asia, but only to be able to protect its territory. “We are not a power-projecting nation in the region, we only want to protect our territory,” he said. To be continued

Economy

A4 Monday, August 31, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

news@businessmirror.com.ph

JFC asks govt to implement Data Privacy Act

By Catherine N. Pillas

oreign businessmen again pushed for the implementation of the Data Privacy Act of 2012, specifically the provision that called for the creation of the National Privacy Commission (NPC), to protect the information-technology and businessprocess outsourcing (IT-BPM) industry.

In a statement, foreign businessmen belonging to the Joint Foreign Chambers (JFC) lamented government’s inaction on the implementation of the Data Privacy Act. It calls for the establishment of the NPC, which will draft and issue the implementing rules and regulations (IRR) of the three-year-old law. “The IRR is needed to provide the clear guidelines on dealing with data breaches; establishing data-breach policies and response protocols and crafting safety standards, among others,” the JFC said. The full implementation of Republic Act 10173, or the Data Privacy Act of 2012, the JFC said, will ensure the sustained growth of the IT-BPM industry—the country’s third-largest net foreign earner. “Champions of the data-privacy law see this landmark piece of legislation as key to securing urgently

needed investments in the Philippines’s still-booming IT-BPM industry by addressing investor concerns about the lack of protection of personal data,” the JFC said. The JFC tied this advocacy with the creation of the Department of Information and Communications Technology (DICT), which has yet to gain ground in either the House or the Senate. The NPC can be an office under the DICT, the group said. The JFC is a coalition of the American, Australian-New Zealand, Canadian, European, Japanese, Korean chambers and the Philippine Association of Multinational Companies Regional Headquarters Inc. The JFC represents over 3,000 member-companies engaged in over $230 billion worth of trade and some $30 billion worth of investments in the Philippines.

Oil firms roll back gasoline, diesel prices By Lenie Lectura

il firms on Sunday reduced the price of petroleum products to reflect movements in international oil prices. Petron Corp., Pilipinas Shell and Caltex Philippines implemented a P1.45-per-liter reduction in gasoline, P0.70 per liter in diesel, and P0.90 per liter in kerosene effective 12:01 a.m. of August 30. Seaoil, PTT Philippines, Total Philippines, Phoenix Petroleum carried out similar reductions, but implemented them starting 6 a.m. According to the Department of Energy (DOE), global oversupply and record stockpile levels continued to drive the unabated downtrend in crude-oil prices. Asia’s price benchmark Dubai crude dived to around $46 per barrel. International oil market analysts have said that the recent drop in the price of oil confirms the commitment of global producers to keep their high levels of production. Although prices may rebound in some weeks, the downward price trend will likely continue into next year, unless there are signs of significant demand or reduction in global supply, the DOE said. Reports also disclosed that a steady drumbeat of economic data out of China, suggesting the sluggish condition of the world’s secondlargest economy, is adding to the downward pressure on oil prices. Overall, Dubai crude decreased week-on-week by more than $2 per barrel. MOPS gasoline and diesel also decreased by about $4.50 and $2.00 per barrel, respectively. Photo taken from Petron Corp.’s web site

Difference in workers’ monthly incomes wider in 2014—PSA By Cai U. Ordinario

he average monthly income of technicians and associate professionals went up in 2014, according to data released by the Philippine Statistics Authority (PSA). In 2014 the average earnings of technicians and associate professionals ranged from P9,954 to P156,823 a month. This means the lowest paid among these workers earned almost 16 times less than the highest paid workers in the category. This indicated a wider wage difference compared to 2012, when the same workers earned an average of P9,359 to P74,989 a month. The lowest paid worker earned eight times less than the highest paid employee in this category. “The 15.8 ratio means that the highest wage rate in the group is almost 16 times its lowest wage rate. This is the highest ratio recorded in the OWS [Occupational Wages Survey] through the years. It implies

wide disparities in wage rates in this occupation group,” the PSA said. Compared to unskilled workers, the lowest paid technicians and associate professionals now earn almost double, or 1.6 times the amount an unskilled worker earned in a month. Compared to 2012, the 2014 wage ratios between the unskilled and various occupations hardly changed. However, elementary occupations, such as janitors and messengers, recorded a lower ratio of 1.2 from 1.7 in 2012. The professionals (1.7) and farmers, forestry workers and fishermen (1.0) also posted similar wage ratios for both years. “Likewise, in 2014, there were very minimal wage differentials noted between the lowest wage rates of unskilled workers and lowest paid workers in major occupation groups,” the PSA said. The ratios ranged from 1 for farmers, forestry workers and fishermen, who received a monthly income

of P6,290, almost the same as the P6,118 given to unskilled workers. The OWS requires the generation of critical and essential data for decision-making of the government and the private sector. The data “average monthly occupational wage rates of selected occupations” is among those listed by the Philippine government under the Special Data Dissemination Standard (SDDS) of the International Monetary Fund. The SDDS serves as reference to member-countries in the dissemination of economic and financial data to the public. The 2014 OWS covered 8,399 agricultural and nonagricultural establishments employing at least 20 workers, wherein wage rates of 188 occupations across 50 pre-determined industry groups were collected. It also provided the median monthly basic pay and allowances in selected industry groups. The survey’s reference period was July 2014.

Lawmaker urges BPOs to give working mothers four-month paid maternity leave By Jovee Marie N. dela Cruz

leader of the House of Representatives on Sunday urged all business-process outsourcing (BPO) firms operating in the country to grant working mothers at least four-month paid maternity leave. Citing figures from the Philippine Statistics Authority (PSA), House Deputy Majority Leader and United Nationalist Alliance Rep. Mar-Len Abigail Binay of Makati City said women now comprise 54.9 percent of the country’s estimated 1-million BPO workers. “Now would be an excellent time for BPO firms to increase the paid maternity leave benefits of their working mothers, considering the tailwinds helping the industry,” Binay said. The lawmaker was referring to the peso’s more than 10-percent decline against the US dollar since 2013. A weaker peso is considered highly beneficial to BPO firms, which earn in US dollars, but pay for their Philippine operations, including the

wages of their workers, in pesos. According to Binay, BPO firms have gained steadily since the pesodollar rate moved from 42:1 in 2013 to 44:1 in 2014, and then to 46.70:1 as of August 28. She said that BPO firms have emerged as the country’s biggest employers in the private sector. Binay, meanwhile, urged the lower chamber to pass two bills that seek to exempt from income taxes the nightshift differential and overtime pay received by salaried employees. “BPO firms operate 24 hours a day, seven days a week, so their workers perform night as well as overtime work,” she said. As proposed in House Bills 2836 and 4682, all overtime and graveyard shift wages shall be expressly excluded from the computation of the gross taxable income of all workers, regardless of their hourly pay rate. Under the bill, overtime pay refers to the additional 25 to 30 percent compensation received by an employee for labor rendered in excess of the required maximum

eight hours a day. The night-shift premium is the extra 10-percent remuneration for work delivered between 10 p.m. and 6 a.m., it added. Under the Labor Code, if the overtime work falls inside the graveyard shift, the extra reward for overtime labor is first added to the employee’s regular hourly rate before computing the night differential pay. The country’s highly labor-intensive BPO and information technology (IT)-enabled services industry includes contact centers, back offices, data transcription, animation, software development, engineering design, and digital content. The IT and Business Processing Association of the Philippines sees the sector generating up to $25 billion in annual revenues and directly employing some 1.3 million Filipinos by 2016. Earlier, Accenture Inc. said it will grant their working mothers at least four-month paid maternity leave. The Philippines’s mandatory minimum paid maternity leave benefit is 60 days.

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Economy BusinessMirror

Escudero urges FPA to persuade makers to reduce fertilizer prices

By Recto Mercene

en. Francis G. Escudero has urged the Fertilizer and Pesticide Authority (FPA) to initiate talks with fertilizer manufacturers and distributors about the possibility of a price rollback for fertilizer and pesticide products, saying that the falling prices of oil in the global markets has automatically slashed the production cost of these farm inputs. Escudero said that, while fertilizer prices are deregulated, the FPA can persuade manufacturers to lower the retail prices of their products for the benefit of small farmers. “If we don’t do this and allow businessmen to establish their own price, we would not be able to help the agriculture sector because there is no law that declares a price cap on farm inputs. That means that while the profit of businessmen increased, the farmer would remain mired in poverty because of the huge price they pay for farm inputs,” Escudero said. The senator noted that in 2008, fertilizer prices dropped by as much as 43 percent after the Department of Agriculture (DA) asked fertilizer suppliers to bring down their retail rates to reflect the low price of oil. Escudero said he sees no reason the FPA, which is

under the Office of the President, could not make the same call now. “I don’t see any reason we can’t bring the price of fertilizer down. Even if they reduce the retail price, the manufacturers and distributors would still earn because of the low price of oil today. I’m sure they have profited from the low cost of production,” said the senator, who chairs the Senate Committee on Environment and Natural Resources. According to a study released last year, fertilizers were cheapest in Ilocos, Cagayan Valley, Western Visayas and Davao. Ironically, they are most expensive in the poorest regions of the country, such as the Autonomous Region in Muslim Mindanao and Eastern Visayas. Escudero said the FPA should scrutinize the prevailing prices of fertilizers, amid complaints that the retail rates of said farm inputs are not commensurate to the reduction in manufacturing costs brought about by the huge drop in oil prices. The price of US light crude dropped 5.5 percent, hitting $38.24 a barrel on August 26, the lowest rate since February 2009. The FPA’s weekly price monitoring covering the period August 10 to 14 showed that a 50-kilogram bag of Triple 14 still has an average price of P1,156.88; a 21-0-0 still costs P558.36; and 16-20-0 is still sold at P977.99 per bag.

Monday, August 31, 2015 A5

PEMC probes 1,611 reported violations by WESM players

he Philippine Electricity Market Corp.’s (PEMC) Enforcement and Compliance Office (ECO) has so far received 1,611 cases that mostly involve violations of the Must-Offer Rule.

PEMC President Melinda L. Ocampo said in her report delivered during the Ninth WESM (Wholesale Electricity Spot Market) annual participants’ meeting that the WESM saw a significant increase in the number of cases referred for investigation to the ECO as a result of the monthly endorsement by the Market Surveillance Committee. “As of June 2015, the ECO has received 1,611 RFI since February 2014,” Ocampo said. “These involves incidents on must offer rule and real time response. But it’s mostly violations of the Must-Offer Rule,”

the PEMC official said. The ECO will make a report that will serve as basis of the PEMC board for the penalties that will be meted out against the violators. Ocampo reported that the market experienced significant price spikes in the last quarter of 2013. PEMC has investigated nine WESM players for possible violation of the Must-Offer Rule. The violators have breached WESM rules, such as the provision of real-time dispatch, among others. “As reported last year, PEMC provided

support to the DOE [Department of Energy] and ERC [Energy Regulatory Commission], in their probe into the events, including a review of existing market mitigating measures, and the conduct of investigations on the possible violation of the Must-Offer Rule. This is a testament to the market’s determination to strengthen its monitoring and enforcement processes, with a view to promote accountability and foster a culture of compliance,” Ocampo said. The newly appointed chairman of the ERC, who was present during the PEMC event last week, said the market is working and that the public is benefiting well from the good performance of the WESM. “If my first impression about the spot market is correct, then let us make it a lasting one. Let’s make sure it continues to work...and to work well,” Jose Vicente Salazar said. Lenie Lectura

Tourism

A6 Monday, August 31, 2015 • Editor: Carla Mortel-Baricaua

DAVAO CITY: A P

Story & photos by Henrylito D. Tacio

n the 1970s, Davao City became known as the “killing fields” of the Philippines, earning the moniker as the country’s Nicaragua. As a result, the rest of the country shunned this once bustling and promising city. But it changed after the 1988 elections. The newly elected mayor, Rodrigo R. Duterte, did an impossible task—that of restoring peace and order of a city that was divided by religion and ideological belief.

Man-made lake at People’s Park D’Bone Collector Museum

“I hold it as an article of faith in the government that there can never be development and progress in any city or province in the country, unless there is stability, unless there is peace and order,” said Duterte, who is rumored to be running as the country’s next President. From being tagged as “Murder City,” Davao City became “one of the most liv-

able cities in the Asia” (both sobriquets were bestowed by the defunct Asiaweek magazine). Indeed, Davao City has gone a long, long way. Today the city is one of the country’s top tourist destinations. Most recent visitors who come here describe Davao as a land of exotic beauty and rich culture. “Davao is probably the least exposed of the country’s urban areas, and the most

appealing,” contends Gregory C. Ira, a Filipino-American friend who visited the city together with his family. “It’s a great holiday hideaway, what with its lush greenery and exotic wild flora and fauna that contribute to its picturesque view,” he adds. The de facto capital of Mindanao, Davao is one of the largest cities in the world with a total land area of 224,000 hectares. Its boundaries encompass commercial areas, as well as beaches,

World’s Best Island showcases Tourism and Trade Fair

The ribbon-cutting ceremony of the Palawan: World’s Best Island Tourism and Trade Fair

n an effort to boost Palawan’s investment environment, the province of Palawan formally launched its World’s Best Island campaign through a five-day travel fair held recently at the Makati’s business district. Gov. Jose Ch. Alvarez and Vice Gov. Victorino Dennis M. Socrates led the opening ceremony of the event dubbed as “Palawan: World’s Best Island Tourism and Trade Fair,” an off-shoot of a collaborative effort between the provincial government, Palawan Tourism Council, the Department of Tourism (DOT), Tour-

ism Promotions Board and the United States Agency for International Development (USAID) through its Advancing Philippine Competitiveness project. Alvarez and Socrates were joined by DOT Mimaropa Regional Director lawyer Minerva Morada, Palawan Tourism Council President Debbie Tan, key officials of the province, and USAID representatives. This first-ever tourism and trade fair initiated by the provincial government aims to capture a wider tourism market, create broader awareness for Palawan, and bring together local

and foreign investors, economic development organizations, and high level government officials for greater business-matching opportunities. The province targets 3 million arrivals by 2016. Local government units, top resorts and hotels, as well as tour operators from Palawan joined the event to showcase products and services. Visitors can avail themselves as much as 70-percentdiscount on products and services, including top resorts, such as El Nido Resorts, Princesa Garden Island Resort and Spa, The Funny Lion Inn, Microtel by Wyndham, Club Paradise, Dos Palmas, Ipil Suites, Blue Palawan, Two Seasons Resort, One Manalo Place, Huma Island Resort and Daluyon Beach and Mountain Resort. AirAsia, the official airline partner of the World’s Best Island campaign, will be offering low fares. “This is a cooperative effort of the public-private partnerships, which will ultimately bring Palawan to the forefront of economic development,” said Maribel Buñi, chief tourism operations officer of the provincial government of Palawan.

m&Entertainment

tourism@businessmirror.com.ph • Monday, August 31, 2015 A7

PERFECT TOURIST DESTINATION

Floral float during Kadayawan Festival

EXOTIC fruits

mountains and forests. Approximately, it is 7.8 times the size of Cebu and three times that of the entire Metro Manila. Situated beside Davao Gulf, the city is dominated by the country’s highest peak, the 2,954-meter-high Mount Apo. The dormant volcano is home to tribes, such as Bagobo, Manobo, Mandaya and B’laan, and its fertile rolling foothills are teeming with exotic fruits, like durian, marang, mangosteen, rambutan and pomelos, as

well as the country’s second flower icon, the waling-waling. If you want to see waling-waling up close, then go to the Malagos Garden Resort in Calinan. Other species of orchids abound, but the resort is more noted for its amazing bird show every Sunday. The show strikes a serious environment note to the audience: Save the birds before they’re gone forever. One bird that needs to be saved

from extinction is the Philippine Eagle, the country’s bird icon. There are several of them at the Philippine Eagle Center, just 2 kilometers away from the Malagos Garden Resort. Don’t fail to marvel at “Pag-asa,” the very first tropical eagle bred in captivity and hatched scientifically. If crocodile is your thing, visit Davao Crocodile Park in Maa. This 5.4-hectare mini zoo houses several of the two species of crocodiles found

DIAMOND HOTEL BAGS MEDALS AT THE PHILIPPINE CULINARY CUP 2015

Diamond Hotel’s culinary team

he culinary team of Diamond Hotel Philippines was awarded three silver medals and four bronze medals in the recently concluded Philippine Culinary Cup 2015. This year is the sixth year of the Philippine Culinary Cup, the established “most prestigious culinary competition” in the country today. Diamond Hotel supports its advocacy to advance culinary expertise and tradition and sent its top professionals to participate in the contest. The initiative is designed to hone skills and talents of the land’s budding and seasoned professional practitioners. The Diamond Hotel Philippines culinary competition champions and their respective categories are Chef Mon Quilon, Silver for US Beef; Chef Allan Reta, Bronze for Poultry; Chef Villafando Pascual, Bronze for Plated Dessert;

Chef Honey Ecraela, Silver for Quick Fire Salad; Chef Willson Tumanon, Bronze for Lamb; Dream Team Challenge Bronze medalists are Chef Mel Taylo, Chef Michelle Ang, Chef Allan Reta and Chef Mark Matias and the Filipino Cuisine Challenge Silver awardees are Chef Dennis Mora, Chef Art Tawatao and Chef Willson Tumanon. Diamond Hotel Philippines has always been proud of its recognized culinary team and continuous to participate in events that will challenge and enhance the group’s skills. The notable Philippine Culinary Cup (PCC) is a product of a collaboration with LTB Chefs Association Philippines, the Pastry Alliance of the Philippines and PEPGroup Inc. PCC has progressed to be the contemporary elite arena for kitchen masters in the country with world standard platforms in place.

in the Philippines. It is here where you can find the country’s second largest known crocodile—at 18 feet—which is aptly named “Pangil” (Filipino for “fang”). It also houses wild cats, python, turtles, monitor lizard, monkeys and various kinds of birds. Far from the center of the city is Eden Nature Park and Resort in Toril. This 80-hectare cool mountain resort is a testament to how man’s ingenuity and concern for the environment can create a paradise on earth. At 2,650 feet above sea level, it offers breath taking views of Davao City

and the Davao Gulf. Now, let’s do the tour in the heart of the city. Start at the city hall in San Pedro Street. A few distant walk is the legislative building, whose façade has the famous freedom statue designed by the talented Kublai Millan. Adjacent to the statue is the historic San Pedro Cathedral (built in 1847 during the Spanish period under the leadership of Don Jose Uyanguren, the Spanish conquistador of Davao). Not far from the Catholic cathedral is the D’Bone Collector Museum (shades of one of those Smithsonian

museums in Washington, D.C.) in Barangay Bucana. You will be mesmerized to see a 41-foot, or 12.4-meter long sperm whale (which has the largest species of toothed whale). Bones and skeletons of snakes, tarsier, marine turtles, various fish species, different sizes of the mouths of sharks and birds abound. From there, take a taxi and tell the driver to bring you to People’s Park (yes, its Davao’s counterpart of Manhattan’s Central Park) in Legazpi Street. It’s a place where people gather around, stroll and cross bridges, watch man-made waterfalls, or sit under the beautiful trees. Davao comes alive with the celebration of “Kadayawan sa Dabaw” every third week of August, coinciding with the harvest of fruits, flowers and agricultural products. Major thoroughfares are set ablaze with dancing and cheers with the indakindak sa kadalanan (street dancing), a spectacle of performers in ethnicinspired garments dancing to the beat of tribal music, and the Floral Float Parade, which features floral and agricultural bounties. Now, let’s talk about the food. There are plenty of them and visitors have several choices. First of all, try eating the controversial durian, which smells like hell but tastes like heaven. If you hate the smell, then you better drink durian coffee at Java Jive in Quirino Street. Chicken afficionados can go to Dusk ‘Til Dawn Restaurant and order its most flavorful chicken wing. Enjoy a Filipino dinner al fresco up a hill at Dencio’s Hilltop. Ranchero offers the best baby back ribs in the city. Yes, you can have fresh tuna kinilaw in most restaurants in the city. Before leaving Davao, don’t forget to visit the Aldevinco Shopping Center in C.M. Recto Street, right across the Marco Polo Hotel. There are pearl inlaid chests, brass cannons, gongs, batik shirts, wrap-around skirts, native cloth and bags. You can always find a little something to bring back home instead of the usual T-shirt. “It is a city by appearance but a village by heart. It is a city by appearance, but a home by heart.” That is how columnist Rene Lizada describes Davao. In a way, it is! Madayaw, Davao!

A8 Monday, August 31, 2015 • Editor: Efleda P. Campos

OurTime BusinessMirror

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Dance artist is Ramon Magsaysay awardee from PHL

By Claudeth Mocon-Ciriaco | Correspondent

IGAYA FernandoAmilbangsa, 71, of Marikina is one of the recipients of the Ramon Magsaysay Award this year. The award will be conferred to Fernando-Amilbangsa and four other awardees during formal presentation ceremonies to be held today at the Cultural Center of the Philippines. Awardees will each receive a certificate, a medallion bearing the likeness of the late President Ramon Magsaysay and a cash prize. Fernando-Amilbangsa, who came from a prominent Catholic family in Marikina, and sister of former Marikina Mayor and Metro Manila

fernando-amilbangsa

Development Authority Chairman Bayani Fernando, is being recognized for “her single-minded crusade in preserving the endangered artistic heritage of southern Philippines, and in creatively propagating a dance form that celebrates and deepens the sense of shared cultural identity among Asians.” In her biographic sketch on the web site of Ramon Magsaysay Awards Foundation, Fernando-Amilbangsa is described as one who has always loved dance and the arts. A turning point in her life came when she married a schoolmate and moved to his home in Sulu where she immersed herself in the rich cultural life of the Muslim South in the next three decades. An excerpt from her bio sketch lifted from rmaf.org.ph states: “Her signature involvement has been the study, conservation, practice and

promotion of the dance style called pangalay [gift offering or ‘temple of dance’ in Sanskrit], a pre-Islamic dance tradition among the Samal, Badjao, Jama Mapun and Tausug peoples of the provinces of Sulu and Tawi-Tawi. She inspired the formation of performing arts groups, networked with dance scholars and practitioners in Asia and presented both traditional and innovative pangalay choreographies in and outside the country. “Moving back to Metro Manila in 1999, she formed the AlunAlun Dance Circle and lent her own home for a dance studio—to study, teach and perform pangalay and other traditional dance forms. The group has since done hundreds of performances and workshops throughout the country.” Fer na ndo -A m i lba ngsa is honored along with Kommaly

Chanthavong (Lao PDR), Anshu Gupta (India), Kyaw Thu (Myanmar) and Sanjiv Chaturvedi (for Emergent Leadership; India). Marikina Mayor Del de Guzman expressed his pride as FernandoAmilbangsa is a Marikeña. “What other honors could we give to our nation than by giving selfless service and creating an impact in the lives of many people? This distinct recognition is, indeed, an honor for all of us Filipinos. Tunay na kapuripuri siya,” de Guzman said. Since 1958 the Ramon Magsaysay Award has been giving honors to individuals whose lives are characterized by selfless service which impacts the lives of the greater many—the same ideals and achievements for which President Ramon Magsaysay was known for. The Magsaysay Award is often regarded as Asia’s equivalent of the Nobel Prize.

‘our time‘ named winner of ‘rename this page’ tilt

HIS page has a new name. “Our Time” reflects the importance of the nation’s older people, the focus society and the government place on them, and the honor and respect they deserve from the rest of us. “It also echoes what our lolo and lola are won’t to say whenever they reminisce: During our time…,” BusinessMirror Sports Editor Jun Lomibao said. The BusinessMirror received 66 entries from our readers and staff when we launched the “Rename the Elderly Page” contest. Aside from the winning entry, the short list included Vintage, Prime Time, Seasons and Generations. The winning entry was submitted by B usiness M irror Senior Editor Lyn Resurreccion. She said, “To me, it is time for our elderly to shine and share their wisdom—both the positive and the negative experiences they learned in life—to all of us, especially the younger generation.”

22 Bacolod City New twist on Medicare scam: Services actually were provided in Nicaragua residents finish digital-literacy training course O By Jay Weaver

The Miami Herald (TNS)

ACOLOD CITY—Twenty-two students graduated from a basic computer training conducted in the city. The students, composed of senior citizens and out-of-school youth (OSY) on Thursday received a certificate of completion for the course. The initiative is a part of the digital-literacy program sponsored by the City Public Library in partnership with Molave Development Foundation Inc. Librarian I Greta Memoria said the digital-literacy program is in line with the implementation of Beyond Access Program initiated by the foundation to develop public libraries and help create information and communications technology centers, and train elderly, OSY and mothers. “The Bacolod City Public Library introduced a new program called ‘Digital Literary,’ a basic computer training for free to all individuals who have no knowledge of computer operation,” Memoria said. The City Library recognized 80-year-old Thelma Las Piñas as the oldest student in the program which started in May 2015. Earlier, 36 individuals also finished the training. They comprised batches one and two who received a certificate of completion for the 18 hours of basic computer training. PNA

NLY in Miami: A local doctor was sentenced to four years in prison on Thursday for providing millions of dollars in medical services to US expatriates at a clinic in Nicaragua—all fraudulently billed to the taxpayer-funded Medicare program. Dr. Santiago B. Montoya received the same punishment as his son, Rodney, a one-time lawyer, who was sentenced earlier this summer to four years in prison for his role in the unprecedented $25-million health-care fraud scheme. The father and son, who cut plea deals, operated a clinic in Managua under the network of a now-closed managed-care business, Florida Healthcare Plus. Using phony Miamiarea addresses, more than 1,000 expatriate patients were illegally, and perhaps wittingly, enrolled between 2011 and 2014 in the network run by the Coral Gables business and several other companies. The scheme without borders broke Medicare laws because the federal insurance program for the elderly and disabled does not allow coverage of beneficiaries’ claims if they are receiving the services in a foreign country. US District Judge Federico Moreno gave the physician a substantial break on his sentence—and not because of his age, 73. Moreno noted that Montoya actually provided care to the retired expatriates, unlike the typical South Florida Medicare criminal case, where little to no services are rendered. The judge also recognized that the doctor helped federal prosecutors with

FREE MEDICAL CHECKUP

The Benguet and Baguio City chapters of the Family Planning Organization of the Philippines conduct a free clinic for the older citizens of Baguio City during the 46th Blues Anniversary organized at the People’s Park. MAU VICTA

incriminating evidence against the ringleader of the health-care fraud conspiracy, just as Montoya’s son did. “I think the father and son should get the same thing,” said Moreno, who also pointed out that the son, Rodney, had cooperated with prosecutors in their case against the father, Santiago. “Doesn’t that make you queasy?” the judge asked during Thursday’s hearing. Moreno’s stiffest sentence was reserved for Pedro Hernandez, the

former COO of Florida Healthcare Plus, who went into business with the Montoyas in Nicaragua. The judge gave Hernandez eight years—about half the punishment sought by prosecutors—after citing the “nature of the fraud” and that medical services were provided at the Nicaraguan clinic. “I think it’s a lesser fraud than not rendering services,” the judge said. But Assistant US Attorney Eric Morales strongly disagreed: “We think the court is focusing too much on that.”

Morales argued that Hernandez was the “leader” who organized the international scam to provide cheap medical services in Nicaragua covered by federal dollars from the Medicare program. Morales objected to Hernandez’s sentencing, saying it was not “reasonable.” The judge also sentenced the former executive’s business associate in the Miami-Nicaragua scheme, Freddy Zeron, to three years in prison. Moreno credited him with returning

Indigent seniors receive monthly pension in Mimaropa

Cebu City to release ₧120-M cash aid to senior citizens, PWDs

EBU CITY—The Cebu City government will release some P120 million in cash assistance to senior citizens and persons with disabilities (PWDs) next week. There are at least 60,000 senior citizens and 7,000 PWDs in the city. Mayor Michael Rama said he has asked the City Treasurer’s Office (CTO) to prepare the payroll on the release of the financial aid and determine the exact date of the two distributions. Each qualified senior citizen will receive P2,000 out of their P12,000 total financial assistance this year. The fourth tranche of cash aid to senior citizens brings to P7,000 the total financial assistance released so far to senior citizens this year. The city distributed P1,000 in January; P2,000 in April; and another P2,000 in July. Each PWD will get P1,000 financial assistance during next week’s distribution. It forms part of the P5,000 total yearly financial assistance for each PWD. Cebu City Treasurer Diwa Cuevas said the cash aid will be given next week once the processing of the payroll is completed. PNA

from Nicaragua, assisting prosecutors in the probe and also providing actual medical services to the expatriates. At Thursday’s hearing, the prosecutor and Hernandez’s defense attorney, Omar Johansson, argued over the leadership role of the one-time Florida Healthcare Plus executive in the Medicare fraud scheme. Morales insisted that Hernandez was “No. 1” among the 11 defendants charged in the case. Johansson countered that Hernandez was not a “godfather” figure in the racket, accusing the Montoya family of being involved in Medicare fraud in Nicaragua since 2004. Court records show that in 2012, the father and son agreed to merge their Managua clinic with an established medical facility run in Nicaragua’s capital by Hernandez and his associates, Zeron, and Edgardo Rodriguez. Earlier this summer, Rodriguez was sentenced to 3-1/2 years in prison. In his plea agreement, Hernandez admitted that he collaborated with Abram Rodriguez, the former marketing director at Florida Healthcare Plus, to sign up retirees abroad as Medicare patients. Rodriguez, who pleaded guilty, faces sentencing in September. The illicit operation also extended to the Dominican Republic, where it was directed by Erendira V. Delgado. She was sentenced to almost 3-1/2 years in prison. “In these enrollment applications, the defendants represented that the foreign residents resided in Florida by using nonresidential addresses, the addresses of beneficiaries’ friends and relatives, and addresses associated with the defendants,” the US attorney’s office said.

SITTING WITH RONALD MCDONALD Older people take it easy on a weekend in a mall in Makati City, as they rest on a chair beside an international fast-food chain’s popular mascot. NONIE REYES

BOUT 36,502 poor senior citizens are receiving monthly cash grants in Mimaropa, according to the Department of Social Welfare and Development (DSWD) Social Pension (SocPen) Program. In the recent SocPen regionwide Project Implementation Review (PIR) shows that the DSWD Mimaropa has disbursed more than P22.1 million to 14,749 beneficiaries for the first and second quarters of 2015. Pay-outs of cash grants to senior citizens are ongoing for the said two quarters. SocPen is a social-protection program of the DSWD that provides P500 monthly cash grant to indigent senior citizens 60 years old and above stipulated in the Republic Act 9994, or the Expanded Senior Citizens Act of 2010. Beneficiaries of SocPen are determined by the DSWD in coordination with the local government units, local Office of Senior Citizens Affairs and Federation of Senior Citizens Association of the Philippines. The DSWD prioritizes indigent, frail, sickly or with disability, and without pension or permanent source of income senior citizens. To date, Oriental Mindoro has 11,759 social pensioners; Palawan with 10,333; Romblon with 5,992; Occidental Mindoro with 5,444; and Marinduque 2,974. PNA

A BusinessMirror Special Feature

CARDINAL SANTOS MEDICAL CENTER 41th Anniversary

Monday, August 31, 2015 A9

www.businessmirror.com.ph

REDEFINING HEALTH CARE TODAY AND ONWARD TO THE FUTURE

By Vernon Velasco

YEAR past its 40th anniversary, Cardinal Santos Medical Center (CSMC) has ever transcended its benchmark-quality brand that embodies the link between social service and health care.

Now that it has set its sights on its 50th, the BusinessMirror sat down with CSMC President and CEO lawyer Pilar Nenuca Almira on how the Archdiocese of Manila-owned, Metro Pacific Investment Corp.-operated 245-bed tertiary hospital will ride the next decade as a hospital extraordinaire. It has been a year since CSMC celebrated its 40th. What major transformations have happened since then? Where is CSMC headed in a span of 10 years toward its 50th? What do you imagine recounting on your Golden Anniversary speech? What we have done in a span of one year is that we have gotten accreditations, especially in our research works; we have renewed our accreditation with International Organization for Standardization; we are renewing our accreditation this year, in the next month, with the Philippines Healthcare Initiative; we have also been accredited in our research endeavors: Our Minimally Invasive Surgery (MIS) Training Center has conducted a lot of programs with international participants and we have been accredited by international bodies for the standards that the MIS Training Center has been implementing (in other words, what we offer at MIS Training Center are at par

with Vietnam’s and Singapore’s. Our nurses and doctors do not have to go to other countries to be able to learn). We have been accredited by ELSA. We have added new pieces of equipment: We have upgraded our mammography; there is an installation of the new gamma-knife camera called Perfexion, which is the only gammaknife camera in the country today. The 40th anniversary was celebrated in 2014 and, since then, we’ve planned to put together what it will have been for the next 10 years when we reach our 50th. What has happened is that a lot of things we had planned have already been executed: We have expanded our emergency room; we have developed and renovated our outpatient department dedicated for poor patients; we are to put up an outpatient pharmacy that offers much lower prices of medicines. We have also rationalized our infrastructure and, therefore, starting this year, construction has been in the works so that there would be an additional 46 rooms next year, and 40 rooms more to complete the planned total 100-plus more rooms in the future. We opened a specialty center; soon after our 40th anniversary celebration: Brain and Spine Institute, the Pain Management and Acupuncture

and Alternative Medicine Center, the Comprehensive Vascular and Wound Care Center, the Diabetes, Endocrine, Metabolic and Nutrition Center. [Come our Golden Anniversary,] we will have been able to service a lot of patients; we will have made it 500 times in terms of number because we will have increased our capacity onsite and our facilities outside; we will have introduced a robust geriatric facility to take care of the elderly; and we will have stood out in the areas of cancer and cardiology and nephrology and neurology because we’re very good in these fields. We will have expanded our rehab center because the father of rehab is here, Dr. Tyrone Reyes. Our cancer center will have been holistic because we have all types of cancer treatments here. Our cardiology department will have also been more recognized and will have maintained our footing as a leader in this area. By then also, when we celebrate our Golden Anniversary, we will have set up five facilities outside this site to be able to reach out to more patients and bring the care to where they are. We will have treated more marginalized patients—we will have institutionalized our partnerships with various similarly focused institutions in terms of servicing the poor. Where is CSMC in the grand

scheme of things? There are many things in this hospital that we alone, among all hospitals in the Philippines, have and which people don’t know about. Again, we have the MIS Training Center; we have the InMotion Robotic System rehab; we have recently acquired the Tomo mammogram, a topof-the-line equipment to detect breast cancer. I think we are also the only hospital which has the Hand Center. You ask where CSMC is in the perception ranking, you might as well ask: “On what criterion?” You say in the number of beds? That would be easy to count. But on which hospital can give the best value, we are better than other hospitals, considering the amenities that we have, the doctors that we have and what we offer as service. This is why, if you want to get an upgraded value and you want more amenities and you want to make sure you don’t have to spend a lot more money, you go to Cardinal. It has been always said that CSMC’s brand of health care is preventive, rather than curative. Practically, what has the CSMC done in the area of prevention? Has the word been spread beyond where you matter? Here in Cardinal we put a lot of focus on making sure we contribute to people not getting sick. We are not the kind of hospital that is hinged on the mantra that we would make a lot of money if there are a lot of confinements. We have a very intensive campaign aligned with the programs of the Department of Health. For example, in the celebration of Cancer Week, we make sure that there is a campaign for stringing, for early detection. We are putting a lot of effort on checkups—in fact we have made our packages very competitive and very reasonably priced. What does CSMC stand for? Why most hospitals, at least in the Philippines, are named after saints?

We are a Catholic hospital; the titular hospital was put up by Cardinal Rufino Santos, and this is really meant to be of service to the general public. People think that Cardinal Santos is exclusively for the rich because it is in an exclusive subdivision. No. In fact, it is our target to treat a lot more poor patients that’s why we have renovated our outpatient department. And it is in our balanced scorecard to increase the marginalized patients we can treat yearly. We provide care and assistance to the poor patients. That’s the general public does not know. We have developed and renovated our outpatient department dedicated for poor patients, not to mention an outpatient pharmacy that offers much lower prices of medicines, which we are to put up. We have a newly renovated San Lorenzo ward, where our poor patients are confined. It’s air-conditioned and the amenities are as though they are paying. In terms of how many, we’d say 10 percent to 15 percent of the general patients we have are poor. Offsite, we have Cardinal on Wheels, a vehicle that goes to service patients when they don’t want to go to the hospital to undergo procedures. I think we’re the only hospital doing that. It can perform ultrasound and ECG. You only get to pay for the procedures and the lab tests. CSMC live by the spirit of its mission. This hospital, as we researched, is liked by many people for its very caring attitude. It is emanating from the culture of spirituality—how we are a very caring hospital. I think that’s the spirit by which we want to be known. We’re looking for the census more than the pesos. Because our mission is to heal and to prevent illnesses, and we want more people to serve—the essence is how many you have served. Should quality health care, like the kind provided by Cardinal Santos, be a basic human right? What’s so wrong about our health-care system? Health care should be a basic

human right and I salute the government for introducing universal health care and making sure that everyone is covered by PhilHealth. What’s so wrong about our healthcare system is the implementation. We have to make sure that all the health-care facilities are competent and are accessible to be able to provide these to the general public. I believe that there is still a need to have everyone engaged in believing that health care is a basic right and every hospital should be able to provide that fairly because, sometimes, the challenge is cost and profitability. You may be making a lot of money, but, in so doing, you may be depriving the general public of the quality care they deserve. If you were the Philippines’s Health secretary, what health-care reform would you lobby for? What is the future of Philippine health care? I would ensure that I would adopt a holistic set of standards for all health-care facilities to follow and these should be product of researches and what had worked globally. You wouldn’t get a permit if you are not operating according to the standards that had been set. I am very positive because many businessmen and many big corporations, for that matter, recognize the importance of health care. Unlike before when they used to indulge in businesses where they will be getting a lot more money not thinking of giving service at the same time. But, now, big institutions are already putting a premium on health care. And how many companies have actually ventured into the health-care business? I am very positive that, because of this, the cost of health care will also go down because of the competition. People will have choices and, in the process that they are choosing, different health-care facilities will endeavor to have their costs down and that will be, in the end, good to the general public.

culture of partnership and collaboration amongst doctors with different specializations. The Philippine Gamma Knife Center, the country’s premier stereotactic radiosurgery facility recently acquired the Leksell Gamma Knife Perfexion, the latest and most advanced tool for cranial radiosurgery in the world. Established in 1997, the Philippine Gamma Knife Center has successfully treated more than 2,000 patients and continues to provide the safest, fastest, and most accurate alternative treatment to brain surgery. Recently, CSMC acquired a 3D mammogram called breast tomosynthesis which allows doctors to examine

the breast tissue one layer at a time. 3D mammography increases cancer detection by 27 percent compared to 2D mammography alone. Early detection of breast cancer increases the patient’s chance of survival. CSMC also takes pride in being the first and only hospital today to offer robotic solutions for rehabilitation therapy. It recently opened the Cardinal Santos Medical Center Research Center which was built for the supervision of the training, technical review, completion, presentation, and publication of all medical research conducted in CSMC. Among its other roster of achievements are quality assurance certifica-

tions from the Investors in People (IiP), the International Organization for Standardization (ISO), and the Philippine Healthcare Initiative (PHI). With these certifications, CSMC proudly joins the ranks of local and international companies that have been proven world class providers of innovative products and services as well as investors in quality people management.

date the growing number of patients needing its services. A bridgeway connecting the 3rd floor of the PCAS building to the main hospital will likewise be erected in 2016. State-of-the art facilities will be purchased according to the demand of the market. Indeed, CSMC is committed in providing only the most sophisticated and best healthcare service there is as it continues to adapt to the changing times in the service of its loyal patrons. To know more about our facilities and services, contact us at (02)7270001 or at info@csmc.ph. Cardinal Santos Medical Center is located at 10 Wilson St. Greenhills West, San Juan City.

ATTY. ALMIRA

CARDINAL SANTOS MEDICAL CENTER Proud of its past

FORTY-ONE years ago, on August 15, 1974, Cardinal Santos Memorial Hospital, a 235-bed tertiary hospital became one of the country’s most soughtafter medical centers for professional and excellent healthcare service. In 1988, the Archdiocese of Manila renamed the hospital as Cardinal Santos Medical Center (CSMC) and entrusted its management to Hospital Managers, Inc. for two decades. On August 15, 2008, Colinas Verdes Hospital Managers Corporation (CVHMC), a subsidiary of Metro Pacific Investments Corporation took over the management of the hospital. Under the new management team, CSMC has earned its position as one of the country’s leading hospitals specializing in the fields of Brain and Spine, Cardiology, Oncology, Minimally Invasive Surgery, and Rehabilitation Medicine.

Zealous of the present

THE opening of the Philippine Center for Advanced Surgery (PCAS) was a milestone for CSMC. It houses the first and only training center for minimally invasive surgery (MIS) in

the Philippines. The MIS Training Center is fully equipped with stateof-the-art facilities and cutting edge surgical technologies allowing surgeons to train locally on MIS at par with those offered abroad. Last month, the center was recognized for its excellence in laparoscopic and hernia procedures, the first in the Philippines, making the CSMC-MIS Training Center a proud member of the prestigious Asia Pacific Hernia Society (APHS). Other accreditations received were from the Philippine Association for Laboratory and Animal Science (PALAS), the Philippine Association of Laparoscopic and Endoscopic Surgeons (PALES), and the Endoscopic and Laparoscopic Surgeons of Asia (ELSA). CSMC also opened its Specialty Center, a disease-specific facility located in the PCAS Building. It houses four out-patient clinics: the Brain and Spine Institute, the Comprehensive Vascular and Wound Care Center, the Diabetes, Endocrine, Metabolic, and Nutrition Center, and the Pain Management and Acupuncture and Alternative Medicine Center. Its advocacy is to promote healthcare and wellness as a way of life and as a shared responsibility, instilling a

Ready for the future

PLANS to build a five-storey hospital annex is already underway. By early next year, additional 40 patient’s rooms will be made available. Furthermore, the Rehabilitation Medicine Department is expanding to accommo-

A10 Monday, August 31, 2015

Opinion BusinessMirror

editorial

GDP: Private spending matters more

08312015

ith the second-quarter gross domestic product growth coming in lower than everyone had hoped for, the full-year forecast of 7 percent to 8 percent, in the words of Senate President Franklin M. Drilon, is a “pipe dream.”

Drilon voiced his opinion that the nation’s economic growth is being dragged down by an “alarming” trend of government underspending. He points out that government spending represents nearly 20 percent of the nation’s economic output. However, we would caution that, paraphrasing American psychologist Abraham Maslow, “If all you have is a hammer, everything looks like a nail.” Those in the government appear to believe that the only tool they have is the hammer of government spending because that is what they are directly in charge of. In other words, as American philosopher Abraham Kaplan wrote, “Give a small boy a hammer, and he will find that everything he encounters needs pounding.” What is missing in the conversation about government spending is the fact that the bulk of that spending is for ordinary expenses, like salaries of government employees. If government spending was the best solution to increasing economic growth, then doubling the salaries of the military, police and teachers would be the answer. Conventional economic wisdom would say that increasing salaries of employees without an increase in productivity would not be cost-effective. However, the government is not expected to create a profit and, in fact, doubling salaries would have a positive impact on the economy even if it meant more government borrowing to pay for it. But that salary increase would not be politically acceptable and, therefore, will not happen. The greater question though, is, does economic growth follow increases in government spending? The men and women holding the hammers would like us to believe that it does. The facts may show something different. If you look at the actual growth—not the growth rate—of the nation’s economic output, the correlation is not with government expenditures but with capital formation. Government spending was lower in 2010, even as the economy did well, and the correlation is with capital spending for equipment, buildings, machinery and the like. Capital formation boomed in 2013, as did the economy, in spite of lower government spending. Total government spending was never any higher than in the first quarter of 2015, yet economic growth turned lower as capital formation decreased substantially. Yes, the government needs to do its part in capital formation by better and increased infrastructure spending. That is the job of the hammer. But most of the economy’s capital formation comes from the private sector. Using another tool to make private-sector investments easier, more cost-effective and faster is what is really needed.

PCSO makes govt presence felt in North Luzon Atty. Jose Ferdinand M. Rojas II

RISING SUN

he Philippine Charity Sweepstakes Office (PCSO) made its presence felt in northern Luzon on August 18 by making a donation of 47 ambulances in Cagayan and other provinces up north. With fellow PCSO Directors Betty Nantes and Francisco Joaquin III and other PCSO personnel, we traveled to Tuao for the formal turnover ceremony held at the pavilion of the Cassily Lake Resort. In attendance were local government unit (LGU) officials from Isabela province and three out of six provinces of the Cordillera Administrative Region (CAR)—Apayao, Abra and Kalinga—to receive their ambulances. The event was all the more special for the presence of physician Manuel “Manny” Mamba of the Office of the President. A son of the town, he celebrated his birthday there the following day in the company of his wife, PCSO Director lawyer Mabel V. Mamba. Also held that day was the blessing of the new PCSO Cagayan branch office in Tuao. It was a

historic day in the agency’s annals because this is the first branch office constructed by the PCSO. It was formerly near the Tuao Gym in a space lent by the LGU, but now its clients and beneficiaries may be served in a more spacious area still within the municipality, which is accessible by residents of nearby provinces. The PCSO will open two more branches this year, in furtherance of its goal to establish an office in every province. That evening, we were warmly welcomed at the Tuao Gym by residents and neighbors celebrating the San Roque Patronal Fiesta of the municipality. The festivities, which began the night before, included town dancing, a beauty pageant, a carnival, and other forms of entertainment. nnn

The three other provinces of the CAR—Benguet, Ifugao and Mountain Province—received 27 ambulances on August 28 in a turnover ceremony at the Baguio Convention Center. I and fellow PCSO Directors Nantes and Joaquin, along with other PCSO personnel, were greeted by the governors of Benguet and Ifugao provinces and some of the mayors of the three provinces. Benguet Gov. Nestor Fongwan said, “We can see the national government [through the PCSO] responding to the needs of the LGUs…the mobile clinic that the PCSO donated to us before helped us save lives during the last calamity [Typhoon Ineng]. We will tell our people that the national government is making us feel that there is indeed a government.” Mountain Province received five ambulances for the municipalities of Sabangan, Bauko, Natonin, Paracelis and Besao. Ifugao Gov. Dennis Habawel explained that his province is the seventh poorest in the country; its terrain is mountainous and difficult to develop, with only two of their municipalities being categorized as second-class, while the others are fourth-class. Thus, he said, the PCSO’s donation of ambulances “is timely; hulog po kayo ng langit.”

He added that the PCSO helps the residents of Ifugao province in many other ways. “We are lucky to be the recipient of the generosity of the PCSO,” he said, by way of “stocking our health centers with basic medicines, while people with illnesses are referred to the PCSO.” Ifugao Province was given 10 ambulances for Asipulo, Mayoyao, Hungduan, Lamut, Aguinaldo, Lagawe, Public Health Office (PHO) of Ifugao, Mayoyao District Hospital, Hungduan Municipal Hospital and Ifugao General Hospital. Baguio City Mayor Mauricio Domogan thanked the PCSO and gave his assurance that the people of Baguio “will support your endeavors.” Baguio City’s ambulance was one of 12 allotted to Benguet Province; the rest were given to Tublay, Bokod, Bakun, La Trinidad, Kibungan, Blessed Association of Retired Persons Foundation, Baguio City General Hospital, Kabayan, Mankayan, Kapasigan and Benguet PHO. The PCSO’s ambulance-donation activities continue later this week in Tacloban, Leyte. Atty. Rojas is vice chairman and general manager of the Philippine Charity Sweepstakes Office.

Trump is a nuisance, not a nightmare

onald Trump is not high on my list of people who ought to be the president of the United States. I would prefer a candidate who has a track record of conservatism. Who supports free trade. Who has served in elective office. Who can keep his petty resentments below the surface. And who doesn’t casually slander whole ethnic groups or call reporters “bimbos” for asking him tough questions.

But even after weeks and weeks of what has become the Summer of Trump, I can’t get worked up about him. Former Texas Gov. Rick Perry said that Trump is “a cancer on conservatism” that has to be excised. Washington Post columnists George Will and Michael Gerson, among others, seem to agree. Gerson even chided those of us who have said that other pol itica l f ig ures cou ld stand to move partway toward Trump’s position on immigration. I just can’t take Trump that seriously. He is not going to be president. He’s not going to be the Republican nominee. He’s probably not going to hurt the eventual nominee’s chances of winning. Trump is an existential threat to the weakest primary candidates—but not to anybody else. Trump won’t win the primaries. How do I know? Because parties don’t pick nominees who have never run for

anything before, unless they happened to be the victorious Supreme Commander of the Allied Forces in World War II a few years earlier. Because major parties don’t succumb to sudden hostile takeovers. Because too many of his supporters are just registering discontent before they make a real decision several months from now—or have a low likelihood of voting in the primaries at all. Because Republicans aren’t going to choose a nominee who wants to raise taxes on the rich. (A lot of Republicans may be fine with that idea, but a lot of opponents care deeply about it.) Because Republican elected officials would consolidate behind a consensus choice if Trump started winning delegates. Because the decisive Republican presidential primary voters are a pretty sober-minded bunch. I’ll go further: Not only will Trump not be the nominee; his sup-

porters won’t even determine who the eventual nominee is. Take away the celebrity-besotted, the nonvoters and the single-issue opponents of immigration, and you’re left with a group of conservatives who deeply dislike what they see as a spineless Republican establishment. These voters never determine the nominee, because too many of them waste their passion on hopeless candidates, such as Ben Carson, Michele Bachmann. . .Donald Trump. In theory, Trump could hurt the eventual nominee even if he loses the primary, either by making a third-party run or by influencing the nominee to take unpopular positions. But a third-party run would happen only after Trump lost the primaries. Leaving aside legal and logistical issues, the successive losses would diminish him—both because they would inevitably diminish anyone and because Trump, in particular, makes so much noise about being a huge winner. He’d have to run instead as a sore loser, and spend a lot of money to register in the single digits on election day. Are voters who object to Trump going to hold his views against other Republicans? So far the data suggest that most people, whether

they love him or hate him, distinguish Trump from other Republicans. Hispanics have a strongly negative view of Trump, but view several other Republicans positively. That’s what you’d expect for someone who has such a strong personal brand: People think he speaks for himself. Trump can’t pull any of the other candidates to take harmful positions against their will. The Washington Post asked whether Republicans “just gave away the 2016 election by raising birthright citizenship.” Answer: No. The overwhelming likelihood is that the Republican nominee will have no plans to end birthright citizenship. (Bush and Rubio have never called for it; Kasich and Walker now agree with them.) So the risk Trump represents to the Republican Party, or conservatism, is really quite small. I understand why he gets some conservative commentators’ blood boiling. A lot of the resulting columns have been enjoyable. But some anti-Trump conservatives seem to think it’s a matter of great urgency for all decent and serious people on the right to denounce him or “stop him.” It’s not. This too shall pass. Bloomberg View

Opinion BusinessMirror

opinion@businessmirror.com.ph

Monday, August 31, 2015 A11

A crack in the Revilla law Nothing sacred Teddy Locsin Jr.

Atty. Lorna Patajo-Kapunan

legally speaking

ftentimes, children are born out of wedlock. For families with traditional values, this has, oftentimes, been regarded as a disgrace. There are even educational institutions that refuse admission of children whose parents are not married. In the end, it is the children who suffer the consequences of their unplanned birth. While I believe that there are no illegitimate children—only illegitimate parents— as it is unfair to tarnish the children who had no fault in their conception, this is the harsh reality. Thus, women are forced to fill up false information in the Certificates of Live Birth or provide false information where needed. The colossal effects of such acts prove burdensome looking forward. I recently advised a distant relative who has a peculiar situation. Maria (not her real name) was born out of wedlock and is not, has never been and never will be, recognized by her father. In her Certificate of Live Birth, she bears the surname of her mother. After all, Article 176 of the Family Code provides that illegitimate children shall use the surname of their mother. However, without her father’s knowledge, Maria has used her father’s surname since childhood, the same appearing all the way from her school records to various government documents. Considering this discrepancy, Maria is now unable to avail herself of her government benefits. In the advent of Republic Act 9255, otherwise known as the Revilla law, which amended the above-mentioned provision of the Family Code, thereby allowing illegitimate children to use the surname of their father, Maria asked whether she could avail herself of the benefits thereunder by the simple expedient of having the register of her Certificate of Live Birth corrected to reflect her father’s surname. The obvious answer is no, not without a judicial order. The bigger stumbling block in Maria’s case, however, is that the application of the Revilla law is quite specific in circumstances. By the very wording of the law, there must be acknowledgment or recognition of filiation by the father. This is where the Revilla law becomes inadequate. Article 172 of the Family Code provides that filiation may be established by the record of birth appearing in the Civil Register or a final judgment; or an admission of illegitimate filiation in a public document or a private handwritten instrument and signed by the father. In the absence of these, filiation may be proven by open and continuous possession of the

status of an illegitimate child or; by any other means allowed by the Rules of Court and special laws. Meanwhile, the Revilla law requires that the child must present an Affidavit to Use the Surname of Father (AUSF) executed by the putative father, among others. From the wording of the implementing rules and regulations of the revilla law, the AUSF appears to be required even if the child is not acknowledged by the father. This becomes an unreasonable requirement for very obvious reasons. The Revilla law seems to have left out the means by which filiation must be proven under Article 172 of the Family Code. The law limited itself to the acknowledgment of a father contained in a public document or a private handwritten document, even requiring a AUSF which an illegitimate child will have no way of obtaining if the father refuses to acknowledge filiation. This puts an unreasonable burden on the part of the child. The Revilla law may have forgotten to consider that filiation may be proved by a final judgment —say, a favorable order in a Petition for Compulsory Recognition —or other means allowed by the Rules of Court and special laws, such as the Rule on DNA Evidence. For all intents and purposes, these are more compelling than a mere AUSF and must be deemed sufficient to allow the use of a father’s surname. Incidentally, considering that the privilege of the use of a father’s surname is given to the child or the child’s mother, as the case may be, it appears that the AUSF adds no actual value and serves no legitimate purpose. As it is, the Revilla law puts an unacknowledged illegitimate child, such as Maria, to a disadvantage. To such extent, it is my humble opinion that the Revilla law must be amended accordingly.

Free fire

HEN we vote for a new president next year; worse yet, when we inaugurate a new administration, keep this in mind: none of these are special events, and there is no such thing as a presidential mandate that exalts a person above the wisdom, or lack of it, that he or she brings to the office. Someone just won a lottery or fixed it. We will have elected another kind or maybe the same problem. Sure, broadcast media will cover both events by intoning—instead of matter-of-factly stating—their small significance. A tenor will portentously voice over everything the cameras are anyway showing. A soprano will break the tedium by repeating more or less what the tenor said already. But keep in mind this is just the business of the media. A presidential election is neither a transcendental nor a historic event. What would be historic would be the appointment of a Chinese governor general for the Philippines. No matter the sonority of the coverage, the president is just the guy who won, while the rest of the coun-

try likely lost again. The presidency is the easiest and far and away the best-paying job in the world, considering the little that is ever done and even that is done by the staff. T h a t t h e r e i s mu c h t h a t should be done is what lends gravity to the office and to its

Lawmakers, congressional staffers and lobbyists opposed to the deal reached in Vienna last month tell us they are now fighting to get more than 60 votes in the Senate for a resolution of disapproval to avoid a filibuster by Democrats supporting President Barack Obama. That is a far cry from the 67 votes in the Senate needed, along with two thirds of the House, to overturn an expected presidential veto of that resolution. Yes, overturning an Obama veto was always a longshot. House Speaker John Boehner in April was privately warning Republicans that his party didn’t have the votes to stop the deal. Now Republican leaders are saying this out in the open. Bob Corker, chairman of the Senate Foreign Relations Committee, said on Wednesday it was “very unlikely” there would be 67 votes against the deal in the Senate, but there would be a “bipartisan majority” voting to disapprove of the deal. As of now, only two Senate Democrats and 14 House Democrats have come out against the pact. (The

Republicans hold 54 seats in the Senate.) Senate Minority Leader Harry Reid is threatening to filibuster the bill altogether, and unless at least four more Democrats promise to vote against the deal, Reid may succeed. Critics of the deal are outraged at the idea that Congress’s only chance at oversight of the initiative might not even get a hearing on the Senate floor. The White House is also reportedly pushing for the deal to be filibustered, so that Obama won’t have to veto a resolution disapproving the signature foreign policy accomplishment of his presidency. Such talk has prompted congressional Republicans to consider moving the legislation first in the House, where passage is assured. Looking farther ahead, deal opponents are trying to salvage political gains from their pending legislative defeat. Republicans are using the issue to batter their Democratic opponents for 2016 in ads, and the nuclear deal has already become a factor in Senate races in Ohio and Pennsylvania, both swing states in presidential elections.

the media not to describe him as sexually alluring even if he rides a black new car. After the election, the winner is still what the candidate w a s b e f o r e , e x c e p t t h at h e and his useless relatives and av a r ic iou s f r ie nd s no w fe e l e nt it l e d t o t he i r a r r o g a n c e and cupidity.

Before the ink is dry: Chasing business in Iran

resident Barack Obama barnstorms the country to sell Americans on his nuclear deal with Iran. Meanwhile, Iran’s supreme leader, Ayatollah Ali Khamenei, keeps his powder dry. He still hasn’t full-throatedly endorsed the pact negotiated by his government. One top Iranian official has even hinted that the ayatollah is against it. Stay tuned. Meanwhile, the Europeans who stood steadfast with the US in imposing crushing economic sanctions on Iran are…raring to go. To Tehran. To do business. The Washington Post reports that “the ink was barely dry” on the agreement last month when “a German government plane packed with the nation’s economic elite touched down in Tehran.” That was the first foray in a flood of European ministers and businesspeople inundating Tehran. These businesspeople anticipate that Iranian markets will reopen soon, after years of sanctions, the Post reports. “We are talking here about 80 million people who need energy supplies, who naturally also need health care, who want to get back off their knees in the oil and gas businesses,” says Joe Kaeser, CEO of German conglomerate Siemens. “There are opportunities and chances.” Proponents of the deal will say this European rush to profit proves the difficulty of getting major governments to continue economic sanctions against Iran.

Opponents will say the rush proves how much richer and stronger a dangerous and belligerent Iran will be when the lifting of sanctions gives it billions of currently sequestered dollars. Congress won’t vote on the deal until September. We’re still doing our own evaluation. As the days pass, new details about the pact and separate provisions between Iran and the International Atomic Energy Agency (IAEA) are still emerging. The latest bombshell: an Associated Press (AP) report that the IAEA will allow Iran to use its own inspectors to investigate the Parchin site, where Western officials suspect Iran carried out nuclear-weapons development work (and could again). The Iranian technicians would be supervised by IAEA inspectors and operate under strict guidelines, the AP reports. Iran has been trying to scrub the site clean for years, and still is. But now…why should any outsiders try to inspect Parchin? If Iran’s inspectors can use Iran’s equipment to look for Iran’s infrac-

Congressional fight on Iran deal is all but over

pponents of the Iran nuclear deal in Congress admit they can no longer kill the accord. Their focus now is making sure there will be a vote on the agreement at all, and salvaging some political benefit from their well-funded bid to stop it.

failures. So, from the moment the next aff liction we inv ite on ourselves takes its oath to uphold the Constitution it will not keep, it is ever y citizens’ solemn duty—and that is the only solemnity in the event— to view him with suspicion and treat his actions accordingly; even as it is the obligation of

Most of the Republican presidential candidates have made their opposition to the Iran deal a key plank in their foreign-policy platforms. Republicans in Congress are preparing several new Iran sanctions bills for the fall, none of which is likely to become law, in an attempt to keep the issue alive politically amid increasingly bad poll numbers for the deal. Indeed, from a political angle, not all those who oppose the nuclear deal believe that a filibuster of the Senate disapproval resolution is a bad thing. Some feel that the White House is miscalculating, and that shutting down the process for a congressional vote would only weaken the deal further. “I’m hoping Democrats filibuster the vote. As an opponent of the deal who seeks to delegitimize this deal, nothing could be better,” said Mark Dubowitz, executive director of the Foundation for the Defense of Democracies. The administration was always going to be able to implement the nuclear agreement even if Congress did initially vote against it, this argument goes, and if congressional oversight is stifled, that will only bolster the ability of the next president to scuttle the deal, or at least tighten its enforcement and punish Iran’s other illicit activities.

Dubowitz claimed the drive to delegitimize the deal has succeeded, even if it failed to stop its implementation: “On policy, deal opponents won. On politics, deal supporters won.” Nonetheless, many Republicans now acknowledge in private that they were handed both a political and a policy defeat on the nuclear deal. Since Congress left town for its August recess, momentum has largely been with the White House. Sen. Chuck Schumer, the New York Democrat and staunch Israel supporter, came out earlier than expected against the nuclear deal on August 6. But his opposition did not have coattails, even in his own state. The same week that Schumer announced he would vote to disapprove the deal, the junior senator from New York, Kirsten Gillibrand, announced her support for it. A week after Schumer’s announcement, Sen. Jon Tester, a Democrat from Montana, announced that he, too, supported the nuclear deal -- even though his state was bombarded with television ads against the Iran accord and the American Israel Public Affairs Committee had considered him a possible yes vote on the resolution of disapproval. The only other Democrat who has come out against the deal since Schumer’s an-

tions, even under the supervision of the IAEA, what are the chances that the IAEA will learn of any violations? We’d say nil. “This side agreement shows that true verification is a sham, and it begs the question of what else the administration is keeping from Congress,” said Rep. Kevin McCarthy, Republican-California, the House majority leader. IAEA chief Yukiya Amano defended the deal, not denying the AP report but offering that it’s “misleading” and that his agency is satisfied with the inspection agreement. That is, the agreement the IAEA has embraced but members of Congress can’t see. On it goes. We understand the eagerness of businesspeople to parachute into Tehran. They’re playing the odds that this deal will withstand its critics in Congress, and will go into effect later this year. But the spectacle of Western firms falling all over themselves to curry favor in Tehran, even before Iran has met its initial responsibilities under a deal ostensibly intended to stop a zealous Iran from wielding nuclear bombs, perplexes us: n Iran is run by a repressive regime that is a major sponsor of terrorism around the world. n Iran has dared the world to stop its nuclear program, thumbing its nose for years at nations

whose business execs now are racing to serve it. n If the deal goes through, and if Tehran holds up its end of the accord, then it will reap billions in sanctions relief. A huge chunk of that will flow to companies run by Iran’s Revolutionary Guard, which controls industries and defends the repressive status quo from the threat of democracy and freedom. n No one denies that some of the windfall will find its way into the coffers of terrorist organizations, as Obama himself acknowledged in an August 5 speech: “The truth is that Iran has always found a way to fund these efforts.” The president argues that the pact will stop Iran’s march to the bomb for at least a decade. He hopes that Iran will have new leadership by then—that this repressive, blood-soaked regime will be history. We’re not so sure that a regime overthrow anticipated for decades by many outsiders will occur within…one more decade. Putting billions in Khamenei’s coffers won’t hasten his regime’s departure. Just the opposite. Business is business, we understand. But it’s good to appreciate with whom you’re doing that business. And to realize that by enriching yourself, you’ll be empowering him or her, as well. TNS

nouncement is Sen. Robert Menendez of New Jersey, who was forced to give up his seat as ranking member of the Senate Foreign Relations Committee this spring after being indicted by the Justice Department on corruption charges. Menendez, a fierce critic of Iran, was always expected to oppose the deal. The pro-deal side of the fight has been willing to threaten the political futures of Democrats who oppose the president, while opponents of the deal have not. One pro-Israel lobbyist told us that the community of donors, fund-raisers and activists opposing the nuclear accord have yet to decide whether they will support primary opponents of the Democrats who vote with the president. Contrast this to the White House, which suggested earlier this month that Democrats may want to support an alternative leader in the Senate to Schumer, who was the consensus candidate to replace Harry Reid when he retires next year. In the Senate, there is now only a handful of Democrats who have yet to say how they will vote on the resolution of disapproval, assuming it actually comes to a vote. With the announcement on Thursday by Tom Carper of Delaware that he will support the deal, 30 Demo-

crats have said they will back the president. Senators Joe Manchin of West Virginia and Jeff Merkley of Oregon have yet to say how they will vote, but all are eventually expected to come out in favor of the Iran deal. According to one whip count from a prominent Republican Senate office, there are now only 12 truly undecided votes among the Senate Democrats. Among those, opponents of the deal have focused their efforts on eight of them, according to one lobbyist: Richard Blumenthal of Connecticut, Cory Booker of New Jersey, Maria Cantwell of Washington, Ben Cardin of Maryland, Bob Casey of Pennsylvania, Heidi Heitkamp of North Dakota, Mark Warner of Virginia and Ron Wyden of Oregon. Each undecided Democrat will have to weigh the risk of voter disapproval for supporting the deal against the intraparty pressure to back the president and the position of their presumptive presidential candidate, Hillary Clinton. The White House will win enough Democrats to stave off a congressional rejection of the Iran deal. The fight now is over whether the president can stop that resolution from even coming to a vote. Bloomberg View

2nd Front Page BusinessMirror

A12 Monday, August 31, 2015

Philippines, UAE sign deal to hike weekly flights–CAB

By Lorenz S. Marasigan

he results of last week’s negotiations for an expanded airservices agreement between the Philippines and the United Arab Emirates (UAE) were “more or less fair” for both parties, an official of the Civil Aeronautics Board (CAB) said.

The two nations signed on late Friday a new memorandum of understanding on air services that enhanced the exchange of traffic rights between the two countries, CAB Director Carmelo L. Arcilla said in a text message. “The parties agreed to increase the maximum number of flights per week for each country from the current 28 flights to 35, subject to the condition that the UAE carrier operating such additional flights to Manila is bound to also operate separately to Clark or Cebu within one year from signing of the memorandum,” Arcilla said.

The CAB official said the condition is in line with the country’s open-skies policy in its developmental gateways outside Manila. “It forces UAE airlines to invest in our developmental gateway,” Arcilla said. Manila also got on a unilateral basis additional fifth freedom traffic rights to the United Kingdom, the US and Saudi Arabia. “This means that our carriers can fly from Manila to the UAE and onward to any country, including the UK, the US and Saudi Arabia. This will improve Philippine connectivity and also the commercial viability of our routes to the UAE,” Arcilla said.

He said the parties also agreed on “co-terminalization.” “This means that an airline from one country can fly to a city in the other country and onward to another city in that country without picking up passengers in the domestic leg. This also improves connectivity and viability,” Arcilla said. The talks pushed through despite calls from local carriers to defer the negotiations, citing the “unfair financial advantage” held by the Middle Eastern carriers. “Overall, the talks is a success for Philippine connectivity and network development. The Philippine government panel and our airlines view the exchange as more or less fair, as the increase in traffic rights for both sides, which our airlines opposed, is minimal,” Arcilla said. “We also got unilateral concessions for the increase, in terms of subjecting the operation of the additional traffic rights by the UAE carriers, on the operation of services to Clark or Cebu—which are covered by our open-skies policy,” he added. The Philippine air panel has expanded air pacts with Singapore, Oman, Australia, Qatar, Turkey and Russia this year.

In February the local air panel was able to expand the country’s air traffic to Singapore, increasing capacity entitlements to 18,888 seats per week, from 17,627. It also bagged additional flight frequencies from Oman in April, raising the country’s air-traffic entitlements to seven from three flights per week. The Philippines and Australia in April signed a new air pact, increasing the entitlements between Manila and Canberra to 9,300 seats per week, from 6,000 seats per week. In May the Philippines and Qatar increased the number of flights between their capitals to 14 flights per week from eight. The last round of air talks was held in 2009. Manila and Istanbul agreed in June to update their agreements, increasing the number of weekly flights between the capitals from three to seven. Russia and the Philippines also agreed to expand their air-services agreement in July. In 2014 the Philippine air panel was able to yield additional flight entitlements from the following countries: Malaysia, Hong Kong, Ethiopia, South Africa, Macau, Canada, Myanmar, New Zealand, Singapore and France.

Malampaya. . .

www.businessmirror.com.ph

Continued from A1

Accordingly, the Notice of Charge for the undercollection of the government’s share in the Malampaya natural-gas project from 2002 to December 2009 in the amount of P53,140,304,739.86 was affirmed.” The DOE and the COA are both government agencies. However, in the event the COA decision is enforced, the DOE fears this will send shockwaves to the international investment community and result in “very dire repercussions and consequences to the ability of the country to attract foreign capital as far as petroleum exploration is concerned.” The Philippines, the DOE said, is perceived by many as having low potential for oil and gas discovery compared with Indonesia, Malaysia and China. The reason for this perception, among others, is the lack of petroleum data and exploration activities. In terms of the number of exploration wells drilled, the number of oil discoveries, and the volume of oil and gas produced, the Philippines clearly lags behind. In 2009 72 exploration wells were drilled in Thailand; 29 in Malaysia; 19 in Vietnam; and only one in the Philippines. From 2005 to 2009, a total of 1,108 wells were drilled in Southeast Asia, of which about one-third were in Indonesia and only five wells in the Philippines. The success rate, or the number of wells resulting in oil or gas discovery, was highest in Thailand with an average of 78 percent; followed by Brunei Darussalam with 64 percent; and Vietnam with 61 percent. The success rate for the Philippines during the period was the lowest at 33 percent. “Investment in petroleum exploration is a highly risky business as there is no guarantee of return in investments,” the DOE said. The agency said investments in seismic survey and well-drilling works cost tens of

millions of dollars. That is why many countries, including the Philippines, compete with each other in attracting the scarce capital necessary to develop their petroleum resources. “This is the reason the Philippines has to maintain the attractiveness of our contractual fiscal terms in order to get a reasonable share of that investment money,” the agency said. To attract more investments in the petroleum-exploration sector and convince those investors already in the country to remain and stay for a long haul, the Philippines needs continued enhancement of its incentives, fiscal or otherwise, the agency added. “In the face of this tight competition with other countries for foreign investors, the Philippines, if it is to achieve its aim of energy security, and, incidentally, overall economic progress, needs to discover other Malampayas by intensifying the exploration and production of its indigenous petroleum resources,” the agency said.

Precedent

The DOE pointed out the COA decision will, in the long term, do more harm than good for the country. “Right now, it has created anxiety, uncertainty and overall negative attitude toward the country not only in SC [Service Contract] 38 contractors and stakeholders, but in other existing and prospective investors,” the DOE added. Former Energy Secretary Carlos Jericho L. Petilla had said should the decision be carried out, such could set a precedent for other petroleum contracts entered into by the government with the private sector. He cited the Galoc oil field under SC 14C1 in waters northwest of Palawan. The Galoc field is the Philippines’s only oil producer on a commercial scale with an output of over 10,000 barrels per day.