Businessmirror december 30, 2014

NEW DESIGN SERIES (WILL BE DEMONITIZED) DEADLINE SET ON USE, EXCHANGE OF OLD BILLS

By Bianca Cuaresma

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he Bangko Sentral ng Pilipinas (BSP) announced on Monday that peso bills with the old currency design, collectively branded as the “New Design Series” (NDS), will be demonetized and will no longer be accepted starting January 1, 2016.

In a news briefing on Monday, the central bank said it will start demonetizing the old bank notes on January 1, and will only accept the new-generation currency bank notes as part of the BSP’s objective to “preserve the integrity of the Philippine currency.”

“This move is in line with the provisions of Section 57 of Republic Act 7653, otherwise known as the New Central Bank Act, which authorizes the BSP to replace banknotes that are more than five years old,” the central bank said.

»Continued on A2

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U.N. Media Award 2008

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5 WAYS TO REFUEL YOURSELF DURING THE HOLIDAYS

Life

WORD OF LIFE, FR. SAL PUTZU, SDB, AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

‘BONIFACIO: ANG UNANG PANGULO’ TAKES HOME 9 AWARDS »C2

BusinessMirror

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

Tuesday, December 30, 2014

B M C G | Tribune News Service HE holidays are a time of magic, and mania, aren’t they? We are all so busy making merry, shopping for gifts for loved ones, baking and cooking, and entertaining, that we risk running ourselves ragged. Take a moment to stop and refuel yourself.

Here are my top 5 refresh strategies:

REFRESH 1: POUR YOURSELF A CUP OF CHEER WHEN you’ve wrung the last ounce of energy from your hard-working holiday-making self, what is your favorite beverage to indulge in? Mine is hot cocoa: Steaming, creamy rich, liquid chocolate heaven in a cute-as-a-button mug. When I come home on a freezing cold winter night, chilled to the bone, all I want to do is soak in the tub while I drink a cup of cocoa. Perhaps this is why I will never be thin.... Filling yourself with your favorite beverage is only half the fun. The other is enjoying the indulgence of serving it up in a beautiful mug or glass, stirring things up with a sweet little spoon, perhaps balancing it all on a lovely plate. When you have the right dishes, even the simple things in life become luxurious.

REFRESH 2: GET YOUR BEAUTY SLEEP WE’VE always known it; science has proven it: A good night’s sleep does wonders for our physical and mental wellbeing. Unfortunately, too few of us get the shuteye we need every night, especially during the hurly-burly holiday season. I am convinced that a good night’s sleep starts with the sheets. I am rather OCD about my sheets. I like high-quality cotton sheets that are freshly ironed (yes, I literally iron my sheets, and yes, I can see you rolling your eyes right now!). There is something magical to me about slipping into those crisp, soft sheets. Next, I like to pile up my bed with layers of blankets. I sleep best when the room is chilly, buried under a stack of blankets. Maybe this is a result of living in a drafty old house!

REFRESH 3: INDULGE IN SOME EYE CANDY THOSE of us who love beautiful spaces need to indulge ourselves is books and magazines and Pinterest boards filled with decorating eye candy, don’t we? These beautiful tomes, filled with gorgeous photos of homes we’d love to live in (or at least visit!) restore our creativity and rekindle our passion to feather our own nests.

My prepare-myself-for-the-world morning ritual includes 30 minutes with a decorating book. Bundled up under a throw, cup of coffee in hand, I join homeowners and designers on their journeys to make their spaces beautiful.

Right now, my decorating book faves are: ■ One Man’s Folly: The Exceptional Houses of Furlow Gatewood, by Julia Reed. Besides having a fabulous name, Furlow Gatewood has a singular ability to use antiques in his décor so they look fresh, not like your grandmother’s parlor. Furlow is an antique dealer in New York who refers to his homes as “laboratories.” One of the tips I gained from Furlow was to use light colors with my antiques so they don’t look stale and stuffy.

■ Veranda—A Passion for Living: Houses of Style and Inspiration, by Carolyn Englefield. I will never live in a luxurious European home. But I can visit them every day through indulgent books like this one. Chock full of take-me-away photos, the book features 30 stunning homes in France, Italy, Switzerland and Sweden. Threaded throughout the photos are tips from top designers on how to create drool-worthy interiors.

■ Nell Hill’s: Rooms We Love, by Mary Carol Garrity. Do you have a copy of my latest book? It features the interiors of my home and a few of my dear friends. I hope you like it!

■ The Shoebox, by Lisa Fernandez. It’s also wonderful to hit the pause button on your chaotic schedule to enjoy a take-me-away read. Maybe your favorite is a romance novel or a mystery. Recently, my friend Lisa Fernandez sent me a copy of her novel, The Shoebox. It was so fun to read this story of love, loss and regret, especially since I know the author.

REFRESH 4: TREAT YOURSELF TO LUXURIOUS BATH PRODUCTS WHEN you’re tired and weary from holiday shopping, baking, wrapping and decorating, give yourself a mini spa break with some luxurious bath products.

It may be as simple as keeping some lovely scented hand cream in your purse

to keep those dry winter hands happy. Or a favorite body butter to use after you shower to hydrate and heal your body and mind and spirit. There is something wonderful about the silky texture and alluring aroma that just does us good.

Since I end every day with a long, indulgent soak in the tub, I’m always on the lookout for fabulous bath products. Right now I’m hook-line-and-sinker in love with Lollia products. I discovered them at market a few years ago and knew I had to start carrying them at Nell Hill’s. My favorite scents are the Relax foaming bath and the Calm hand cream.

REFRESH 5: NOSH ON SOME YUMMIES OK, all you health nuts out there, whose idea of an indulgent snack is an extra carrot stick or two, you might want to quit reading. Because when I’m bone-

dead tired from the holiday crazies, I crave baked goods. Rich, gooey, flakey, sinfully high-calorie croissants and éclairs and cookies and cakes and pies and...oh my goodness, I got carried away there.

My friend Tracy, who owns the French Bee Bakery in Parkville, Missouri, keeps me supplied with the best pastries in the world. It’s super easy for me to swing by her bakery in this adorable old river town on my way to work.

I fill up a box with an assortment of bite-sized treats to share with the Nell Hill’s team or to take and give to guests when I entertain. Even though these appropriately portioned treats are just the right size for a little indulgence, I don’t just eat one. This is another reason I will never be thin. What is your favorite binge food, the little treat you give yourself when you are ready to indulge? After you finish a monumental holiday task, like wrapping a stack of gifts or sending out that last holiday letter, treat yourself. ■

Coral Reef is the ‘it’ color for 2015 B V P The Charlotte Observer

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OW does a paint chip become an “it” color?

The team at SherwinWilliams researches color influences from around the world. The result each year is a color forecast of 40 colors grouped into four palettes. The company has just introduced its Color of the Year for 2015, and the winner is Coral Reef. It blends pink, orange and red for an uplifting, vivacious hue with floral notes. It’s part of a collection called the Buoyant palette.

Coral Reef is showing up on fashion runways, in jewelry and on the home

accessory front. It is strong enough to stand on its own as an accent wall or occasional chair but is happy to add excitement as an accessory to a neutral color scheme.

Unlike some past years’ color selections, Coral Reef is a color most homeowners can feel comfortable embracing for home décor.

If you have been hesitant to fully embrace the shades of blazing orange, this might be your perfect color option.

Coral Reef plays happily with white, black, lush greens and lilacs.

For a more subdued palette, mix it with warm neutrals such as gray or buttery yellows and soft browns.

For the mid-century modern enthusiast, Coral Reef is a softer, more approachable orange than the pumpkin of the 1950s. Its

undertones work well with warm wood finishes such as walnut.

For transitional décor, this color works well with trendy copper finishes and aged matte brass finishes.

Don’t limit the color to the interior.

Consider brightening your home’s exterior by applying it to your front door, shutters, flower boxes or garden structures. But don’t go overboard; pick just one element to accent. It is clear that 2015 is shaping up to be a very colorful year for home décor.

Continued on A8

■ Designer and home improvement expert Vicki Payne is host and producer of For Your Home, available on PBS, Create TV and in national and international syndication.

Reach her at ForYourHome.com.

LIFE

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MALARIA KILLING THOUSANDS more THAN EBOLA IN W. AFRICA B2

Tuesday, December 30, 2014

briefs

Ebola chief says CDC lab

incident poses no risk to public

In this October 6, file photo, licensed clinician Hala Fawal practices drawing blood from a patient using a dummy in Anniston, Alabama. AP ATLANTA—The US Ebola response coordinator is calling the mishandling of materials that led to a lab technician’s possible exposure to the virus “unacceptable.” Ebola Response Coordinator Ron Klain told CBS television’s Face the Nation on Sunday that the incident at a Centers for Disease Control and Prevention lab carried no risk to the public because of protocols and procedures in place. Klain says the CDC technician, who may have come into contact with a small amount of live virus during an experiment, is being monitored daily and shows no signs of infection. Klain also said the Food and Drug Administration has approved widespread testing to begin in three or four weeks in West Africa of a vaccine to prevent Ebola. AP

Alleged sex victims sue when predator wins lottery ORLANDO, Florida—Two alleged victims of a registered sex offender have filed a lawsuit seeking damages for pain and suffering after the man won $3 million in a Florida Lottery jackpot. Timothy Poole purchased the winning ticket earlier this month in Mount Dora, near Orlando. He took a lump-sum payment of about $2.2 million. Poole was accused of sexually battering a 9-year-old boy in 1999. Poole denied the allegations but pleaded guilty to attempted sexual battery and was sentenced to time served. AP

Blizzard causes pileup killing 1, injuring 26 LJUBLJANA, Slovenia—Police in Slovenia say a truck skidded in a blizzard, causing a pileup that killed one person and injured 26, three of them seriously. About 50 vehicles were involved in Sunday’s accident on a motorway connecting the capital, Ljubljana, with the Adriatic coast. Police have closed the road for traffic. AP

The World BusinessMirror

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news@businessmirror.com.ph

UECKEDOU, Guinea—West Africa’s fight to contain Ebola has hampered the campaign against malaria, a preventable and treatable disease that is claiming many thousands more lives than the dreaded virus.

Guinea, where half the 12 million people have no access to health centers and die uncounted. Some 15,000 Guineans died from malaria last year, 14,000 of them children under 5, according to Nets for Life Africa, a New York-based charity dedicated to providing insecticidetreated mosquito nets to put over beds. In comparison, about 1,600 people in Guinea have died from Ebola, according to statistics from the World Health Organization (WHO).

Malaria is the leading cause of death in children under five in Guinea and, after AIDS, the leading cause of adult deaths, according to Nets for Life. Ebola and malaria have many of the same symptoms, including fever, dizziness, head and muscle aches. Malaria is caused by bites from infected mosquitoes, while Ebola can be contracted only from the body fluids of an infected victim—hence doctors’ fears of

Brazil policeman killed, other officer hurt in Rio

In this February 20, 2010, file photo, former British Prime Minister Tony Blair (left), former nigerian President Olusegun Obasanjo, on Blair’s left, and religion leaders hold a mosquito net with a women lying inside to demonstrate the use of the net against malaria in Abuja, nigeria.

The operation to fight Ebola in West Africa has hampered the campaigns against malaria, a preventable and treatable disease that is claiming many thousands of lives. AP

drawing blood to do malaria tests.

People suffering malaria fear being quarantined in Ebola treatment centers and health centers not equipped to treat Ebola are turning away patients with Ebola-like symptoms, doctors said. WHO figures from Gueckedou show that of people coming in with fever in October, 24 percent who tested positive for Ebola also tested positive for malaria, and 33 percent of those who did not have Ebola tested positive for malaria—an indication of the

great burden of malaria in Guinea.

Malaria killed one of 38 Cuban doctors sent to Guinea to help fight the Ebola outbreak.

One private hospital had a kidney dialysis machine that could have saved his failing organ but the clinic was shut after several people died there of Ebola. The US President’s Malaria Initiative ground to a halt in Guinea months ago and the WHO in November advised health workers against testing for malaria unless they have protective gear.

The malaria initiative is doing a national survey of health facilities and elsewhere to try to find out “what’s actually happening here... where people with malaria are going,” said Nahlen, of the US campaign.

There was some positive news in Guinea—it had just completed a national mosquito net campaign against malaria when Ebola struck, he said. Neighboring Liberia, on the other hand, suspended the planned distribution of 2 million nets, Nahlen said.

In Sierra Leone, the third country hard-hit by Ebola, Doctors Without Borders took unprecedented, preemptive action this month, distributing 1.5 million antimalarial drugs that can be used to both prevent and treat, aiming to protect people during the disease’s peak season.

“Most people turn up at Ebola treatment centers thinking that they have Ebola, when actually they have malaria,” said Patrick Robataille, Doctors Without Borders field coordinator in Freetown.

“It’s a huge load on the system, as well as being a huge stress on patients and their families.” He said a second distribution is planned in Freetown and western areas most affected by Ebola. Robataille said the huge delivery of antimalarial drugs was “in proportion to the scale of the Ebola epidemic—it’s massive.” AP

NYC police boss: Less rhetoric, more dialogue needed

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ÃO PAULO—Brazilian authorities say a police officer has been killed and another one wounded in two separate attacks in Rio de Janeiro. The second officer survived a shooting. The dead man is military police Officer Ivo Leandro Zaru.

Firefighters on Sunday found the 34-year-old’s body near a dam in a coastal city part of Rio’s greater metropolitan region.

Police provided few details but said they are investigating the death as a possible homicide. AP

POlIcE officers salute as the hearse of new York city police officer Rafael Ramos drives along his funeral procession route in the Glendale section of Queens on Saturday in new York. Ramos and his partner, officer Wenjian liu, were killed on December 20 as they sat in their patrol car on a Brooklyn street. The shooter, Ismaaiyl Brinsley, later killed himself. AP

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EW YORK—A day after the funeral of one of two police officers gunned down in their patrol car, New York City’s police commissioner called on Sunday for a “lot less rhetoric and a lot more dialogue” to defuse the tension between police officers and the minority communities they protect.

Speaking on NBC television’s Meet The Press, Commissioner William Bratton said the “pent-up frustrations” that have caused people to take to the streets in recent weeks go far beyond policing policies across the US. “This is about the continuing poverty rates, the continuing growing disparity between the wealthy and the poor. It’s still about unemployment issues.

There are so many national issues that have to be addressed that it isn’t just policing, as I think we all well know,” he said.

Bratton said rank-and-file officers and much of America’s police leadership feels under attack, including “from the federal government at the highest levels.”

He urged: “See us. See the

police. See why they have the anxieties and the perceptions they have.”

Bratton also appeared on CBS’s Face the Nation, where he defended Mayor Bill de Blasio, saying it was wrong for hundreds of police officers to turn their backs to a video monitor outside a Queens church as de Blasio spoke at the funeral of slain Officer Rafael Ramos.

“I certainly don’t support that action,” he said. “That funeral was held to honor Officer Ramos. And to bring politics, to bring issues into that event, I think, was very inappropriate.”

He acknowledged, though, that the morale of officers is low and said their actions “unfortunately” reflected the feelings of some toward the mayor. Some police officers blame de Blasio for creating an atmosphere of negativity toward the New York Police Department in the city after a grand jury declined to charge an officer in the police chokehold death of Eric Garner on Staten Island.

The gesture at Ramos’s funeral came amid contentious contract negotiations with the city. The rank-and-file police

union did not claim credit for the symbolic protest, and its head, Patrick Lynch, repeatedly dodged reporters’ attempts to ask about it after Ramos’s funeral. It was not clear if officers planned to turn their backs on de Blasio again at the funeral for Ramos’s partner.

Arrangements for that service have not yet been announced.

The silent protest was a continuation of the defiance shown at a hospital after the officers’ slayings on December 20, when Lynch and others turned their backs on de Blasio. Lynch said the mayor had “blood on his hands.”

Bratton said de Blasio was “totally supportive” of officers and had contributed hundreds of millions of dollars outside the department’s budget this year, much of it focused on officer safety enhancements.

After Bratton, former Mayor Rudolph Giuliani told the CBS program that it was wrong for officers to turn their backs on de Blasio or to try to blame him for officers’ deaths. But he also said de Blasio should apologize to the police department because he “created an impression with

the police that he was on the side of the protesters.” “Say you’re sorry,” Giuliani urged.

De Blasio stayed out of sight on Sunday, staging no public events and continuing to let Bratton hold center stage in the week since the double murder.

The five city police unions will meet with Bratton this week. Ramos and his partner, Wenjian Liu, were shot to death as they sat in their patrol car in daylight. After the officers’ deaths, the gunman, Ismaaiyl Brinsley killed himself.

Police said he was troubled and had shot and wounded an ex-girlfriend in Baltimore earlier that day.

In online posts shortly before the attack, Brinsley referenced the killings of two unarmed black men by white police officers—Michael Brown in Ferguson, Missouri, and Garner, in the New York borough of Staten Island.

Bratton said the department had recently investigated more than 50 reports of threats against officers, closing out over half of them with nine arrests, and had warned officers to be alert to potential dangers. AP

THE WORLD

SURPLUS WIDENS DESPITE DROP IN NOV COLLECTION

BY David Cagahastian

Malaria killing thousands more than Ebola in W. Africa G In Gueckedou, near the village where Ebola first started killing people in Guinea’s tropical southern forests a year ago, doctors say they have had to stop pricking fingers to do blood tests for malaria.

Guinea’s drop in reported malaria cases this year by as much as 40 percent is not good news, said Dr. Bernard Nahlen, deputy director of the US President’s Malaria Initiative.

He said the decrease is likely because people are too scared to go to health facilities and are not getting treated for malaria.

“It would be a major failure on the part of everybody involved to have a lot of people die from malaria in the midst of the Ebola epidemic,” he said in a telephone interview. “I would be surprised if there were not an increase in unnecessary malaria deaths in the midst of all this, and a lot of those will be young children.”

Figures are always estimates in

By Lorenz S. Marasigan

In lieu of the new runway, Transportation Secretary Joseph Emilio A. Abaya said his office would now shift its focus on constructing another terminal at the country’s main international gateway in Manila.

The decision of the government to drop its plan of constructing a third runway came after Dutch consultant Ruud Ummels discouraged the transportation agency from pursuing the project, citing minimal gains and additional headaches.

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5 ways to refuel yourself during the holidays

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P25.00 nationwide | 4 sections 20 pages | 7 days a week

he Department of Transportation and Communications (DOTC) has abandoned its plan to construct another runway to improve aircraft movement at the Ninoy Aquino International Airport (Naia), the agency’s chief said.

INSIDE

Father and teacher of youth

Tuesday, Tuesday,November December 18, 30, 2014 Vol. Vol.10 10No. No.40 82

‘No need for new Naia runway’

15 DAYS

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D.O.T.C. HEEDS ADVICE OF DUTCH CONSULTANT constructing another TERMINAL IS BETTER OPTION

PAPAL VISIT 2015

EAR Lord, I wish to pay homage and full respect to Saint John Bosco, the” father and teacher of youth.” Another great event is the celebration of the Bicentenary of the Birth (August 16, 2015) of Saint John Bosco, the man who is known as the “father and teacher of youth” and who had a special love of predilection for the youth who are poor and in danger. Although Saint John Bosco’s birthday will be celebrated on August 16, the preparation for that great day and subsequent activities will last several months. Don Bosco Makati School was my first formative years of teaching that lasted for 48 years including my stint at Lasallians Institutions. To Saint Bosco and Saint La Salle, I gave my all in the service of Evangelization in Education. Amen.

A broader look at today’s business

B2

he disbursement of public funds designed to optimize growth this year and the next five years slowed by 8 percent to only P151.4 billion, a development resulting in a budget surplus as wide as P6.8 billion in November.

Data from the Department of Finance (DOF) show collections in November aggregating P158.2 billion, or 4 percent lower than revenues collected in November last year.

Total expenditures for the month amounted to P151.4 billion, or 8 percent lower than expenditures last year.

The latest fiscal data is indicative of the government having reneged on its original commitment to accelerate spending in support of growth, measured as the gross domestic product (GDP), as high as 7 percent this year, primarily in the form of an infrastructure buildup.

PESO exchange rates n US 44.6170

Continued on A2

GOOD-BYE 2014 The Philippine Stock Exchange (PSE) celebrated the last trading day of 2014 on Monday, December 29. Attending the event at the Ayala Triangle in Makati City were (from left) VP and Head of Corporate Governance Risk and Compliance J. Argel G. Astudillo; nominee for PSE board and IGC Securities Inc. President Ismael G. Cruz; Capital Markets Integrity Corp. President Cornelio Gison; PSE President Hans B. Sicat; and AVP and Head of PSE Capital Markets Integrity Surveillance Department Grace M. Calubaquib. KEVIN DELA CRUZ

Peso stands out among Asian peers in Q4

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he Philippine peso is set to be the only Asian currency, apart from the Hong Kong dollar, to strengthen this quarter, supported by a seasonal increase in remittances.

Money sent home from abroad, which accounts for about 10 percent of the economy, usually peaks in the fourth quarter as some 10.5 million Filipinos living overseas send cash to their families before Christmas. The slump in global oil prices, a recent debt-rating upgrade from Moody’s Investors Service and stable inflation are also supporting the peso, said Alan Cayetano, head of foreignexchange trading at Bank of the Philippine Islands in Manila.

“All these add up to less dollar demand,

more supply and increased investor confidence,” he said. “The peso may still succumb to the strong dollar trend in 2015, but the market expects stability in the currency compared with its emergingmarket peers.”

The peso fell 0.2 percent to 44.750 a dollar as of the midday break in Manila, paring its gain since the end of September to 0.3 percent, according to Tullett Prebon Plc. data. It has weakened 0.8 percent this year. Local markets will close on Tuesday for the New Year holidays and reopen on January 5.

Inflation cooled to 3.7 percent in November, the slowest pace in 12 months, and will ease to 3.1 percent this month, according to

the median estimate in a Bloomberg survey before data due next week.

The Philippines plans to sell dollar bonds in early 2015, Treasurer Rosalia de Leon said last month. Nine banks were tapped for the benchmark-sized offer, according to people familiar with the details who are not authorized to speak publicly.

The yield on benchmark two-year local-currency sovereign notes fell 14 basis points, or 0.14 percentage point, to 3.06 percent, according to fixing prices from the Philippine Dealing & Exchange Corp.

The yield has risen 54 basis points this year, as the central bank raised its policy rate by 50 basis points, in two increases, to 4 percent. Bloomberg News

n japan 0.3706 n UK 69.4062 n HK 5.7489 n CHINA 7.1813 n singapore 33.6961 n australia 36.2063 n EU 54.3390 n SAUDI arabia 11.8899 Source: BSP (29 December 2014)

News BusinessMirror

Tuesday, December 30, 2014

A2

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Deadline set on use, exchange of old bills SURPLUS WIDENS DESPITE Continued from A1

The NDS has been in circulation for almost three decades.

“The public may continue to use the NDS banknotes up to December 31, 2015, in paying and buying of goods and services and other business or financial transactions requiring the use of cash. Thereafter, the NDS banknotes will no longer be accepted for payment transactions,” the central bank said.

In 2010 the central bank issued the new designs for peso bills, collectively branded as the “New Generation Currency [NGC].” Starting

next year, only bank notes with this design will be accepted and have monetary value.

To facilitate the transition to the NGC, the BSP said the public may still exchange their old bank notes in banks from January 1, 2015 to December 31, 2016. Old bank notes will be replaced by banks with the new-generation currency design at full face value without charge. The public may also exchange the old bank notes with the BSP in any of its branches in the country.

The central bank reminded that all old banknotes that were not

exchanged will no longer have any value and cannot by exchanged in banks anymore starting January 1, 2017.

The BSP said government institutions holding in trust the old bank notes which could not be exchanged during the prescribed period—such as those used as evidence in a litigation case—will have to request the BSP Cash Department in writing, within the period of exchange, for a special exchange arrangement.

The central bank also set a provision for overseas Filipinos with old bank notes in possession and cannot exchange their bills in the prescribed

period. The BSP said they may register online from October 1, 2015, to December 31, 2015, through the BSP web site. Their old banknotes may then by exchanged with the BSP within one year from the date of registration.

“The demonetization of the NDS will result in the circulation of a single currency series in the country—the NGC Series. The NGC banknotes which were issued on December 16, 2010, use new and enhanced security features to protect the safety of the public against counterfeiters,” the BSP said.

AirAsia drops most since 2011 after flight vanished Continued from A8

X Bhd., the long-haul arm of AirAsia, fell 6.6 percent. The FTSE Bursa Malaysia KLCI Index was little changed.

Search teams from Indonesia and three other nations are hunting for the Airbus Group NV A320 single-aisle plane that went missing on Sunday off the coast of Borneo with 155 passengers and seven crew onboard. The disappearance evoked fresh memories of the unresolved disappearance of Malaysian Airline System Bhd.’s Flight MH370 in March.

“The AirAsia incident is worrying,” Alan Richardson, an investment manager at Samsung Asset Management Co. in Hong Kong, said by phone. “Investor sentiment toward Malaysian aviation has been hurt by the unfortunate incidents” in a short span of time, he said.

Longest search

Malaysian Airline’s Flight MH370

vanished from radar screens en route to Beijing from Kuala Lumpur on March 8 in what authorities called a deliberate act. No debris has been found in what’s become the world’s longest search for a missing passenger jet. The stock fell as much as 18 percent to a record low in its first day of trading after the flight went missing.

AirAsia shares had climbed 34 percent in the 12 months through December 26 and the stock’s relative strength index rose to 74, above the 70 level that signals declines may be imminent to some investors. As of last week, 24 analysts recommended buying AirAsia shares, three said hold and one advised selling, giving the company a score of 4.61 out of a maximum 5 on a Bloomberg scale.

The company’s net income fell 85 percent to 5.4 million ringgit ($1.5 million) in the third quarter, dragged down by foreign-

exchange losses. Annual earnings are projected to increase 38 percent for 2014 and 69 percent next year, analyst estimates compiled

by Bloomberg show.

AirAsia QZ8501 was flying at 32,000 feet when the pilots requested to go higher to avoid clouds, Indonesia’s acting Air Transport Director Djoko Murjatmodjo said in Jakarta.

Buy recommendation

There were storms along AirAsia’s flight path, Accuweather.com said on its web site, citing its meteorologist Dave Samuhel. Storms are very active this time of year, Samuhel was quoted as saying, with December and January the wettest period of the year in Indonesia.

Investors should accumulate AirAsia shares amid the stock’s weakness as Indonesian demand shouldn’t be too “adversely affected,” analysts Raymond Yap and Gan Jian Bo at CIMB Group Holdings Bhd. wrote

in report dated on Monday.

AirAsia, the region’s biggest budget airline, had no fatal crashes in its history of more than a decade of operations, according to AviationSafetyNetwork, which tracks accident data.

The carrier’s Indonesian affiliate is one of only five airlines in the country allowed to fly into European Union nations. More than 60 others are banned by the EU from flying for safety reasons. While AirAsia is based in Sepang, Malaysia, it operates with subsidiaries and affiliates in different nations and the missing plane belonged to its Indonesian operations.

Of the 155 passengers, 138 were adults, 16 children and one an infant. The plane was carrying one Singaporean, a Malaysian, a person from France, one from the United Kingdom, three from South Korea and 155 Indonesians, according to AirAsia. Bloomberg News, AP

3-DAY EXTENDED FORECAST DECEMBER 30, 2014 | TUESDAY

TODAY’S WEATHER Tropical Storm is a cyclone category with winds of 64 - 118 kph.

TROPICAL STORM “SENIANG” WAS ESTIMATED AT 140 KM EAST SOUTHEAST OF TAGBILARAN CITY.

JAN 1 DEC 31 WEDNESDAY THURSDAY

METRO MANILA

22 – 31°C

23 – 31°C

TUGUEGARAO

21 – 28°C

20 –28°C

DROP IN NOV COLLECTION Continued from A1

trillion as of November.

The Bureau of Internal Revenue’s (BIR) collection for November fell by 4 percent from its collection for the same month last year. Year-to-date, the BIR collected P1.2 trillion from January to November, up by 9 percent from its collection for the same period last year.

The Bureau of Customs’s (BOC) collection for November also suffered a decline by 13 percent, breaking the BOC’s streak of monthly double-digit growth this year. Year-to-date, the BOC collected P324.6 billion, up by 16 percent from its collection for the same period in 2013.

The total expenditures of the government from January to November amounted to P1.8 trillion, inclusive of interest payments for its loans.

Without factoring in interest payments, the government would have experienced a primary surplus of P265.5 billion, or 43 percent higher than the primary surplus registered for the same 11-month period in 2013.

The government’s fiscal policy has been to increase revenues by broadening the tax base and plugging tax leakages, and keeping interest payments at a low percentage in relation to the total expenditures to free up more cash for spending in infrastructure and social services.

As of the third quarter, the disbursement of growth-boosting public funds actually fell to only P170.6 billion or sharply down from aggregate disbursements totaling P221.7 billion, a development that has raised the hackles of analysts and economists such as former Budget Secretary Benjamin Diokno who has since said the country’s fiscal planners are either incompetent at what they do or criminally negligent.

Diokno has repeatedly said Manila’s peers in the region typically spend 5 percent of GDP or even higher and this partly explains why those economies have far superior physical infrastructures than the $270-billion Southeast Asian economy has managed thus far.

According to Diokno, President Aquino has shown capacity to spend less than half his colleagues in the region typically spent the last few years, or only around 2 percent of GDP. The fiscal position from January to November stood as a deficit of P26.8 billion, or 76 percent lower than the deficit registered in the same 11-month period in 2013.

The DOF, however, said despite the lower fiscal deficit this year, total expenditures was still 5 percent higher from January to November this year versus the comparable figures last year. Yearto-date expenditures amounted to P1.8

Developers. . . Continued from A8 talks are still at an early stages with “no concrete move”having taken place. Ayala Land“would be interested”in the development, said Bobby Dy, president of the Philippine builder, while Robinsons

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BusinessMirror Editor: Dionisio L. Pelayo • Tuesday, December 30, 2014 A3

BOC seizes firecrackers declared as tissue paper

T

By Joel R. San Juan

WO shipments of firecrackers declared as tissue paper by its importer have been seized by operatives of the Bureau of Customs (BOC) at the Manila International Container Port.

In a statement, Customs Deputy Commissioner for Intelligence Jessie Dellosa said the two shipments actually contained firecrackers which include a repackaged version of the banned Piccolo and Pop Pop. The shipments which were consigned to Stellent Corp. arrived from China in October 2014, but were not released following derogatory information on the cargo gathered by the Customs Intelligence Group.

Dellosa said the BOC expects to seize more illegal firecrackers from several shipments that

DELLOSA: “We have reason to believe that at least five other shipments that we placed under alert orders all contain smuggled firecrackers.”

have yet to undergo 100-percent physical inspection.

“We have reason to believe that at least five other shipments that we placed under alert orders

all contain smuggled firecrackers.

However, these shipments have yet to be subjected to 100-percent physical inspection under strict safety conditions at the port.

What is worse is that the packaging of the firecrackers seized say these are made in Bulacan and even have text in Filipino,” Dellosa added. “ L et t h i s be a w a r n i ng to the public and to the local pyrotechnics industr y that smugglers may be using legitimate m a nu fac t u rers to se l l i l lega l firecrackers.”

The BOC noted that Republic Act 7183, or the Anti-Firecrackers Law strictly regulates the sale, manufacture, distribution and use of firecrackers and other pyrotechnics for the prevention of injuries, death, and damage to properties caused by firecrackers.

It also bans at least 20 firecrackers with explosive content at over 0.2 grams, the legal limit for all types of pyrotechnics.

Aside from Piccolo and Pop Pop, also banned are Goodbye Philip-

pines or Crying Bading, Yolanda or Goodbye Napoles, watusi, Pla-pla, Giant Kuwitis, Super Lolo, Atomic Big Trianggulo, Mother Rockets, Lolo Thunder, Pillbox, Boga, Big Judas Belt, Big Bawang, Kwiton and Bin. Also banned are Laden, Kabasi, Atomic Bomb, Five Star, Og and Giant Whistle Bomb.

Those who will be caught using the items may be penalized from six months to one year imprisonment, or a possible fine of up to P20,000.

With only two days to go before New Year’s Day, the BOC said the Department of HealthNational Epidemiology Center has already recorded 113 firecrackerrelated injuries nationwide, 39 of which involved children younger than 10.

Last year more than 900 injuries related to the celebration to welcome 2014, while a 3-month-old baby was killed by a stray bullet.

Sixteen cases involved eye injuries, while six required amputation. Most these were caused

by Piccolo.

Natl Police target: Safest holidays

By Rene Acosta

S

ELECTED National Police units went on high alert on Monday in preparation for the New Year’s Eve revelry as the force aims for the “safest holiday season.”

Upon orders from Deputy Director General Leonardo Espina, National Police officer in charge, the force initiated a series of operations as early as December 16 in preparation for the holidays. This include increased police presence in key places of convergences such as malls and terminals.

“Safety is our Christmas gift to the people,” Espina told police line commanders.

Espina has instructed police regional commanders to intensify the implementation of “Oplan Bakal” and “Oplan Sita” to deter any untoward incidents involving stray bullets.

Oplan Bakal is the campaign against the illegal carrying of firearms, while Oplan Sita is the drive against firearms with expired licenses.

Espina earlier ordered the taping of the muzzles of the firearms of policemen to deter them from using their weapons during the New Year revelry.

In addition, Espina said caught selling and possessing illegal firecrackers will be charged in accordance with Republic Act 7138, which provides for the control and regulation of fireworks and other pyrotechnic devices.

Espina has expressed the commitment of the National Police to enforce the law and ensure the public’s safety amid revelries.

“The National Police remains focused in doing its job in maintaining the peace and order situation in the country,” he said.

Meanwhile, the National Police said that its National Operations Center has already recorded a total of 68 incidents with 13 persons arrested and more than 16,000 pieces of firecrackers confiscated.

The figure covered the period from December 16 to 29, Chief Supt.

Wilben Mayor, National Police spokesman, said.

News

BusinessMirror

A4 Tuesday, December 30, 2014

House blocs back MRT, LRT fare hike

S

By Jovee Marie N. dela Cruz

EVERAL blocs in the House of Representatives on Monday expressed support for the implemen tation of the approved fare increase in Lines 1 and 2 of the Light Rail Transit (LRT), and the Metro Rail Transit (MRT) in January.

Crossing party lines, stalwarts of the lower chamber from across the country, in a joint statement, said instead of allotting multibillion-peso subsidies for MRT and LRT, the government should use the funds for programs that will best improve public-transport and other social services.

These lawmakers include Mindanao Bloc Head Rep. Rufus Rodriguez (Centrist Democratic Party, Cagayan de Oro City); Central Luzon Bloc Head and Liberal Party (LP) Rep. Oscar Rodriguez of Pampanga; Ilocano Bloc leaders Reps. Rodolfo Fariñas (Nationalista Party, Ilocos Norte) and Eric Singson (Liberal Party, Ilocos Sur); Bicol Bloc and LP Rep. Cesar Sarmiento of Catanduanes; Southern Tagalog Bloc Head and LP Rep. Joaquin Chipeco Jr. of Laguna; and Rep. Ben P. Evardone (LP, Eastern Samar) of the Visayas Bloc.

The House leaders said the fare adjustments would enable the government to save P2 billion in annual subsidies, or 17 percent of the P12

billion it allots each year to subsidize the LRT and MRT train systems.

“Malacañang could make better use of the P2 billion in subsidy savings to rev up these vital mass-transport systems for the benefit of Metro Manila commuters and to fund other nonrail development projects for nonMRT and -LRT users in the Visayas and Mindanao,” they said.

The government is paying P25 for every LRT passenger and P45 for every MRT passenger.

They noted, for instance, that the P2 billion in projected annual savings would be enough to build 8,240 classrooms or 82 kilometers of farm-to-market roads, or irrigate 11,240 hectares of cropland.

The solons said part of the savings to be realized from the fare adjustment would also be used by the government to bankroll priority-development programs in nonrail sectors for poor and marginalized Filipinos.

“I support the fare increase to sustain proper maintenance of the

rail systems, to lessen subsidy from the national government and to reallocate savings from subsidy to social projects in Mindanao,” Rodriguez said.

Evardone said the savings from the subsidy can be used to rehabilitate communities devastated by typhoons Yolanda and Ruby.

“We need more funds to build back better our public infrastructure and sustain the livelihood programs for victims of Yolanda and Ruby,” said Evardone, whose province was hit badly by the two strong typhoons.

The fare adjustments, which the Department of Transportation and Communications (DOTC) announced last week and which will take effect on January 4, marks the first such hike in ticket prices for Metro Manila’s train riders in a decade.

The base fare for the LRT Lines 1 and 2 and the MRT will be P11 and an additional P1 will be charged for every kilometer from the station of origin.

This means that a single journey ticket from Baclaran station to Roosevelt station will cost P30 from the present fare of P20.

Passengers who use stored-value tickets for end-to-end trips on the LRT 1 and 2 will get a P1 discount.

For MRT 3 single-journey and stored-value tickets, a journey from the Taft station to the North Avenue station or vice-versa, will cost P28 from the current P15.

In the absence of long-overdue fare adjustments to raise revenues, the lawmakers said the LRT Author-

ity and MRT office have been earning just enough cash from ticket sales to finance their day-to-day operations, hence leaving them with zero resources for major undertakings like buying more light-rail vehicles, replacing or rehabilitating tracks, and replacing or upgrading their now obsolete or worn-out signaling, brake and other systems.

They said the last fare increase for LRT 1 was in 2003, from P12 to P15 for a full run, while LRT 2’s fares have not been changed since this system opened in 2003.

They also said that after opening in 1999 with a fare range of P17 to P34, MRT 3’s fares were even reduced to the P12 to P20 range in February 2000 and to a lower P9.50 to P15 range in July 2000. The current range of P10 to P15 was implemented in March 2005.

Meanwhile, Bayan Muna Reps.

Neri Colmenares and Carlos Zarate said they will ask the Supreme Court to issue a temporary restraining order against the implementation of the fare increase.

They said they will file the petition after the DOTC implements the fare hike on January 5.

“As it is the best way to defer the MRT/LRT fare hike is for the Supreme Court to issue a temporary restraining order against it. The DOTC did not follow due process in this case and no sufficient public hearing was held. We also fear that the P2 billion that the DOTC would be able to save by increasing the fares of the MRT and LRT would just be turned to pork barrel,” Colmenares said.

news@businessmirror.com.ph

CTA orders BIR to give back P46-M tax refund to Pilipinas Shell Corp.

By David Cagahastian

T

HE Court of Tax Appeals (CTA) has granted a P46million tax refund to Pilipinas Shell Petroleum Corp. for erroneously paying excise taxes on imported fuel sold to international air carriers.

Imported oil sold to international carriers is exempt from excise taxes.

In the case filed by Pilipinas Shell against the Bureau of Internal Revenue (BIR), the CTA ruled that petroleum products sold to international air carriers, whether of Philippine or foreign registry, are exempt from excise taxes, subject to certain requirements for the exemption to take effect.

The BIR said the exemption from excise taxes is granted by the National Internal Revenue Code (NIRC, or Tax Code) to international air carriers, and that such tax exemption does not extend to manufacturers or importers of petroleum products, such as Pilipinas Shell.

But the CTA said the exemption also applies to Pilipinas Shell because Section 135 of the Tax Code exempts from the excise tax petroleum products sold to international air carriers as long as such sale satisfies certain requirements.

The CTA named the requirements for the application of the

Govt orders probe of Cebu Pac Naia airport mess during the holidays

F

OLLOWING the recent mess at the Ninoy Aquino International Airport (Naia) Terminal 3, involving the purportedly poor service of low-cost carrier Cebu Pacific during the holiday rush, the government is now eying to impose stricter civil- aviation rules to improve the commercial airline’s services in the Philippines.

Civil Aeronautics Board (CAB) Executive Director Carmelo L. Arcilla said after a three-agency panel started on Monday the official investigation of the “unprecedented” mayhem at the youngest aviation hub in Manila.

The panel asked the Gokongwei-led carrier to submit pertinent documents involving the number of seats sold, flights operated, number of passengers displaced, and the actual load factor of the flights from December 24 to 26 in

order to resolve the issue.

The panel composed of the Manila International Airport Authority, the Civil Aviation Authority of the Philippines and the CAB will convene in January to evaluate and decide on the matter. “The findings of this joint committee will be submitted to our respective boards for evaluation and for regulation,” Arcilla said. “We will make recommendations later for a possible amendment of regulation.”

From Christmas Eve to December 26, passengers of Cebu Pacific swamped the check-in counters of the low-cost airline, complaining about delayed or canceled flights.

Cebu Pacific, in an earlier statement, said the delays and the dislocation of a large volume of passengers were caused by airtraffic congestion, coupled with the weather condition on the 24th

exemption: The petroleum products are consumed outside the Philippines; such petroleum products are stored in a bonded storage tank and should be disposed of in accordance with the rules and regulations prescribed by the secretary of finance; and, in case of foreign international air carriers, their country of registry is also exempt from excise or similar taxes on petroleum products sold to Philippine carriers.

In this case, Pilipinas Shell was able to prove that the jet fuel it sold to international carriers complies with the requirements prescribed by the NIRC for the sale of such jet fuel to be exempt from excise taxes.

Pilipinas Shell was able to prove that its clients were international carriers exempt from excise taxes on the sale of petroleum products by presenting, among others, a certificate from the Department of Foreign Affairs of the list of countries, which grant the same reciprocal tax exemptions to Philippineregistered airline carriers, and a certificate from the Civil Aviation Authority of the Philippines, indicating the nationalities and countries of registration of the aircraft to which the jet fuel was sold.

Thus, Pilipinas Shell was granted a tax refund amounting to P46.79 million, representing erroneously paid excise taxes on the sale of jet fuel to international air carriers.

Road improvement seen to usher era of peace, prosperity in Basilan province

By Lorenz S. Marasigan

T

Fireworks bonanza The owner of a fireworks stall in Bulacan gets busy on the Saturday before New Year’s Day as Filipinos start to stock up on fireworks for the New Year’s Eve revelry. Store owners say sales are expected to increase as the current year draws to an end. ALYSA SALEN

of December, resulting in a spill over of traffic to the next day.

The fiasco was further fueled by the large number of absentee check-in personnel that resulted in the delayed processing of passengers.

“We also spoke about the possibility of overbooking, so we asked for more data for us to be enlighted,” Arcilla said.

“We are also looking at the data from the airport to see the passenger manifest and check the actual load factors.

We will collate all these documents to come up with a conclusion.”

At the lower chamber, Party-list Rep. Neri J. Colmenares of Bayan Muna sought for a congerssional probe on the “dismal services” of the local carrier.

“Aside from the long queues, delayed flights and overbooking, the resolution will probe the following: canceled

flights, expensive rebooking fees and penalties, and the deceptively low initial base fare, but big tax and surcharges. They also charge passengers with a web administration fee that is ridiculous,” he said.

Colmenares said, “It would be better if the Committee on Transportation would just call for a motu propio hearing to probe these issues during the break but if not, then I hope that it would immediately be scheduled on the resumption of sessions so that these airlines would improve their services.”

The dominant budget carrier offers flights to 28 international destinations, namely, Bali, Bangkok, Beijing, Brunei Darussalam, Busan, Dammam, Dubai, Guangzhou, Hanoi, Ho Chi Minh, Hong Kong, Incheon (Seoul), Jakarta, Kota Kinabalu, Kuala Lumpur, Kuwait, Macau, Nagoya, Narita, Osaka Phuket, Riyadh, Shanghai, Siem Reap, Singapore, Sydney, Taipei and Xiamen.

It also operates the most extensive airline network in the Philippines, with 55 routes and 44 destinations.

The airline’s 52-strong fleet is comprised of 10 Airbus A319, 29 Airbus

A320, five Airbus A330 and eight ATR72 500 aircraft. Between 2015 and 2021, Cebu Pacific will take delivery of nine more brand-new Airbus A320, 30 Airbus A321neo and one Airbus A330 aircraft.

Meanwhile, the Department of Trade and Industry (DTI) said it will be looking into the reported overbooking and flight cancellations by Cebu Pacific after thousands of passengers were inconvenienced at the Ninoy Aquino International Airport during the holidays.

Trade Secretary Gregory L. Domingo directed the office of consumer protection under Trade Undersecretary Victorio Mario A. Dimagiba to look into the complaints of overbooking of flights by budget carrier Cebu Pacific, as well as the mass flight cancellations and delays on December 24 and 25.

“We are coordinating with Executive Director Arcilla [of the Civil Aeronautics Board], to require Cebu Pacific to submit booking records 10 days before and 10 days after December 25 to establish baseline day and assess, evaluate, and determine the overbooking," Dimagiba said. Lorenz Marasigan and Catherine Pillas

HE P1.567-billion Basilan Circumferential Road is nearing completion as the Department of Public Works and Highways has accelerated the construction of the the 47-kilometer thoroughfare in Mindanao.

Public Works Secretary Rogelio L. Singson said the newly paved road section brought the completed section of the road to 44 km, trimming down the remaining concrete-paving requirements to just 3 km.

Considered an elusive dream in the past, the improvement of the Basilan Circumferential Road, with an entire length of 133 km connecting almost all municipalities of Basilan, has reduced travel time from five hours to two hours, while travel for the improved length of 44 km of two hours was cut short to 30 to 45 minutes.

“The people of Basilan have witnessed the new meaning of peace and development because of the road project. In due time, they shall realize the national government’s vision for inclusive growth for the province,” Singson said.

ABS-CBN apologizes on ‘Pope shirts’

N

etwork ABS-CBN issued a statement to defend the company from criticisms over its recently released commemorative shirts.

Bong Osorio, ABS-CBN spokesman, said: “ABS-CBN assures the public that there was no intent to deceive or mislead the public through the commemorative shirts that carry statements inspired by Pope Francis’s message of love, openness and humility.”

“We apologize if a particular statement shirt offended anyone. We are pulling out the item from our online shop and all retail partner stores.”

News BusinessMirror

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Manufacturing subsidy reached P5.8B in 2012

By Cai U. Ordinario

T

he Philippine Statistics Authority (PSA) disclosed that the government extended P5.8 billion worth of subsidies to the manufacturing sector in 2012.

In the final results of the 2012 Census of Philippine Business and Industry (CPBI) for all manufacturing firms, the PSA said this amount is nine times the value extended to the sector in 2010.

“This [subsidies] amounted to P5.8 billion in 2012, a value more than nine times of the subsidies received by all manufacturing establishments in 2010 [P0.6 billion],” the PSA said.

The PSA explained that subsidies are special grants in the form of financial assistance or tax exemption or tax privileges given by the government to aid and develop an industry.

Data showed that the manufacture of other electrical equipment received the bulk of the subsidies or P2.5 billion, around 43.4 percent of the total.

Electronic components followed closely with P2.2 billion, which accounted for 37.3 percent while spinning, weaving and finishing of textiles placed third with P268.6 million, or 4.6 percent of the total.

“In 2010 there were only 13 industry groups that received subsidies and general purpose machinery received the biggest share with 57.6 percent of the total,” the PSA said.

By region, Calabarzon received the highest worth of subsidies at P3.3 billion, or 55.8 percent of the total.

Metro Manila, or the National Capital Region (NCR), came in second place with P2.1 billion-worth of subsidies, or 36.7 percent of the total.

This was followed by Central Luzon that accounted for P280 million or 4.8 percent of the total subsidies extended to the manufacturing sector.

“Altogether, the three regions accounted for 97.3 percent of the total subsidies received by the manufacturing sector,” the PSA said.

Meanwhile, the total value of output generated by all manufacturing establishments was estimated at P4.5 trillion in 2012. This was a 24.7-percent growth from the P3.6 trillion generated in 2010.

Value added, generated by all manufacturing establishments, reached P1.2 trillion in 2012, an increase of 12.3 percent from P1 trillion in 2010.

“Among the industry groups, the 10 industries that occupied the Top 9 slots comprised 68.6 percent of the total value added for all manufacturing establishments,” the PSA said.

Data showed that the manufacture of electronic components led the top contributors to value added with P321.9 billion, or 27.8 percent, of the total.

This was followed by computers and peripheral equipment and accessories placed second with P114.4 billion or 9.9 percent of the total value added and beverages with P86 billion, or 7.4 percent.

In 2012 the PSA said there were around 25,064 manufacturing establishments that employed as much as 1.19 million Filipinos.

Tuesday, December 30, 2014 A5

ERC imposes secondary-price cap to control WESM rate spike

A

By Lenie Lectura

resolution adopting and establishing a preemptive mitigating measure in the Wholesale Electricity Spot Market (WESM) meant to limit possible instances of excessive rate increases has been signed and released by the Energy Regulatory Commission (ERC).

In a 15-page resolution docketed December 23, ERC resolution 20, Series of 2014, puts in place a secondary-price cap of P6.245 per kilowatthour (kWh) once the P9 per kWh threshold was breached.

“A Cumulative Price Threshold [CPT] amounting to P1,512,028.00 equivalent to the Generator Weighted Average Prices (GWAP) over a rolling seven-day period, or 168-hour trading interval, is hereby set in the WESM. This is equivalent to an average spot price of P9,000/megawatt (P9 per kWh) over the period,” the ERC said.

“A breach of the CPT for the period triggers the imposition of a price cap amounting to P6,245/MWh [P6.245 per kWh]. The market clearing price for the immediate trading

interval following the breach will be pegged at the value of the price cap and shall be imposed until after a determination that the succeeding GWAP rolling average is already below the CPT,” the ERC said.

During the period when the price cap is imposed, the market-clearing price will be applied for settlement purposes if there are intervals where the market-clearing price is lower than the price cap.

Also the ERC ruled that during the period when the CPT has been breached and the price cap is in effect, the oil-based plants will be entitled to recover additional compensation equivalent to the remainder of the total cost of fuel and variable operations and maintenance costs upon submission of

sufficient proof that the application of the preemptive mitigation measure is not sufficient to cover their costs.

The claim for additional compensation by oil-based plants shall be processed by WESM operator Philippine Electricity Market Corp. within 30 days from receipt of the proof.

Aside from the secondary-price cap, the ERC had also put in place a primary bid cap of P32 per kWh. However, significant spikes in market clearing prices experienced in the November and December 2013 billing months indicated that the offer price cap being the only price mitigation in the market is not sufficient to address conditions of sustained high market prices.

The ERC noted that, throughout WESM operation, the market has already experienced a number of extremely positive and negative prices. The possibility and actual occurrence of such only cause price to be more volatile and tends to induce opportunistic participant behavior. “Ultimately, all of this can potentially form a vicious cycle that could harm the sustainability of the whole market in the long run,” the ERC said.

With this, a preemptive mitigating measure, which caters to unreasonably sustained high prices, is needed to be set in the market in a manner that will equally consider the interests of the stakeholders and the public.

The resolution will take effect 15 days after publication.

Opinion BusinessMirror

A6 Tuesday, December 30, 2014

Editor: Alvin I. Dacanay

editorial

Learn a skill; Get a job

O

NE of the concerns that took a prominent place in discussions about unemployment in the Philippines this past year was the idea there is a mismatch between the skills of job seekers and the skillset needed by companies.

In 1996 a significant but quiet change took place in the Philippine economy. At that time the larger percentage share of total employment shifted from the agricultural sector to the services sector. This was not so much that the total employment in the agricultural sector declined but that the number of workers in the services sector increased.

The tendency is to think that the services sector primarily includes the cashier at the department store and the teller in the bank. While these are important positions that require, for want of a better term, intelligence, they are low-skill jobs.

The cook at a fast-food restaurant must learn and be proficient in a particular skill not required by the personnel at the counter taking orders and running the cash register. The salary for a person with a technical skill is usually higher than another, whose job does not require a higher level of technical skill.

Over the past years we have seen a rush into learning programs that do require higher technical skills, such as nursing and computer services. However, both of those industries soon became flooded with qualified people that outstripped the employment demand. While it did make sense to go into those areas as employment opportunities were initially high, employment growth was not sustained.

Recognizing that the highest unemployment lies in the group that only have high-school education, perhaps that is where the emphasis should be placed and not those that have attended at least some college.

Rep. Roman T. Romulo (lone district of Pasig City), chairman of the House Committee on Higher and Technical Education, is urging high school graduates to learn specific technical skills that do not require going to college. Rep. Romulo cites the automotive service sector because of the continuing increase in car sales. This makes good sense.

The lawmaker points out that a technical education in automobile mechanics is readily available through both the public and private sector. In a recent news release, he mentions the Toyota Motor Philippines School of Technology and the Don Bosco Technical Institute in Makati City. Further, the Technical and Education Skills Development Authority offers courses that can lead to an Automotive Servicing National Certificate.

Nursing and computer courses may have more glamour but basic skills like cooking, mechanics and the like are always needed and jobs are always available.

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

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

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

2015, 2016 augur well for the economy Manny B. Villar

THE Entrepreneur

T

Socioeconomic Planning Secretary Arsenio Balisacan estimates that growth, in terms of Gross Domestic Product (GDP), in the fourth quarter should be at least 8.2 percent to reach the low end (6.5 percent) of the government’s target for the whole year, given the 5.8 percent growth for the first three quarters of 2014.

However, the last time the Philippine economy breached the 8.0-percent GDP growth level was in the second quarter of 2010, when it reached 8.9 percent. During that year, GDP grew by 7.6 percent, which remains a record.

The government has admitted that the slower growth in 2014 was due to lower spending on public projects. As a result, public construction contracted from a double-digit growth of 19.1 percent in the third quarter of 2013 to -6.2 percent in the same period this year.

In contrast, private construction grew by 15.7 percent in the third quarter of 2014 compared to 1.6 percent a year ago.

The lower government spending in

HOM

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2014 was due to issues surrounding the Priority Development Assistance Fund and the Disbursement Acceleration Program. This resulted in confusion and restrained spending. I think these issues have been addressed and government spending will be smoother beginning in 2015.

I consider the performance in 2014 as a break in the upward trek of the Philippine economy, which remains one of the fastest-growing in Southeast Asia.

My prognosis for the economy is good, both for 2015 and 2016. This is because our fundamentals remain strong.

We are also seeing developments that are expected to improve our growth prospects.

Inflation, which measures the movement of prices of basic goods and services, slowed down to 3.7 percent in November 2014 from 4.3 percent in October. The government’s inflation target for 2014 is plus or minus 4 percent.

Interest rates also remain low.

During its meeting on December 11,

It’s a game, not a science John Mangun

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines.

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HE final figures are yet to come but it is reasonable to expect that economic growth in 2014 will be significantly lower than the 7.2 percent posted in 2013.

OUTSIDE THE BOX

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TOCK market investors want to believe that prices follow a logical and well-ordered pattern. If that is true, then all that is necessary to make good profits is to figure out what the pattern is.

If prices go higher because of good company earnings reports, then all you need to do is simply follow the earnings reports. If prices go down on bad economic news, then all we need to do is listen to when government releases the official numbers.

But maybe the analysts that use charts and price movement patterns are the ones that have the answer to winning in the stock market. Stock market investing then is a simple operation.

Weather forecasters and meteorologists know that certain cloud formations can accurately predict when it is going to rain and when there will be sunshine.

So therefore, learn the patterns and you can predict the future.

Why then is it true that most investors are not maximizing their investing profit potential and taking large losses

than in hindsight seem very avoidable?

There are several mistakes that investors make that repeatedly causes low wins and large losses. The gambler’s fallacy is the belief that if something happened frequently in the past, it will happen less in the future. If you flip a coin and it comes up ’heads’ 100 times in a row, the gambler’s fallacy is that the next time it will be ‘tails’. But each coin toss is independent of the other and the odds are always 50/50 no matter how many times one side has come up.

While stock market price movements are not mathematically certain like the toss of a coin, we have the desire to believe that a mathematical formula can be applied and then create a gambler’s fallacy.

How many times have you heard it said that the stock market is due for a correction? Many supposedly valid reasons

the Bangko Sentral’s Monetary Board decided to keep its policy rates, which private banks use to set their lending rates, at 4.0 percent for overnight borrowing and 6.0 percent for overnight lending.

I believe fuel prices (gasoline and diesel) are a big factor behind the low inflation, and the decision of the Bangko Sentral to keep interest rates low.

In its update on economic prospects, the Asian Development Bank said declining oil prices could bring about a positive surprise for developing countries in Asia, like the Philippines, most of which are oil importers. The reduction in fuel prices is good for the business sector, especially for the real estate industry.

I won’t call the current state of the real estate industry as a boom, but I see no reason to expect a serious drop in sales.

In addition, we are facing an election year. While the elections are scheduled for 2016, election-related spending will start by the middle of 2015, so it will have a positive impact on the economy as early as next year.

Election spending will peak in 2016, which means higher GDP growth. Hopefully, the high growth rates in 2015 and 2016 will be achieved with low inflation.

I think there will be “one-for-theroad” drive for infrastructure development. Traditionally, outgoing administrations want to leave as many visible projects as possible as part of their legacy.

There’s a lot of work to catch up with respect to roads, bridges, ports and other infrastructure projects.

Another development that I believe will contribute to higher growth in the

are given for that assumption. Prices are too high. Valuations are too expensive.

Prices need to consolidate.

That is a variation of the gambler’s fallacy. In late 2011 through early 2013, the Philippine Stock Exchange Composite (PSE) Index closed higher for 16 out of 19 months and closed higher for 8 straight months. No, the market was not due for a correction because assuming a correction is necessary is to also assume that the coin toss will not result in ‘heads’ 100 times in a row.

The problem is our basic understanding of the stock market price movement.

The most basic assumption for price movement is, for example, that there are more buyers than sellers and prices go higher. That would seem to make sense but only if all buyers and all sellers are acting for the same reasons. Yes, buyers only buy if they believe that prices will go higher. Sellers sell for many reasons other than a belief that prices will go lower.

But even if that is true, it is still an over simplification.

A good computer program can consistently and continuously beat the best human chess players in the world. The same is true for Othello, Scrabble, backgammon and even poker. Companies that make stock market trading software would like you to believe that their programs can do the same thing for the stock market. Studies have shown that these programs succeed only because

next two years is the return of President Aquino’s high approval and trust ratings.

Based on the survey conducted by Pulse Asia in November 2014, the President’s ratings stood at 59 percent and 56 percent, respectively, making him the most trusted among the top five national government officials.

The President’s relentless campaign against corruption instills confidence on the minds of the people, which translates, in turn, to consumer confidence.

This was confirmed by a separate survey conducted by the Bangko Sentral.

According to the monetary authority’s Consumer Expectations Survey, which was conducted on October 1 to 11, consumer sentiment improved in the fourth quarter of 2014 compared to the same quarter in 2013.

The improved confidence, in turn, contributes to higher consumer spending, which continues to account for a major share of the economy’s growth.

These factors are on top of the traditional growth drivers, specifically the business process outsourcing industry, remittances from overseas Filipinos and the tourism industry.

I will continue the discussion on the country’s outlook, including the challenges to growth, next week. In the meantime, with the current year closing after tomorrow, let me wish all Filipinos a peaceful and prosperous New Year. (To be continued) For comments, e-mail mbv.secretariat@gmail.com or visit www.mannyvillar.com.ph.

they take advantage of trading mechanics and do not ‘predict’ what stock is going to be higher in a week the same way rain is predicted.

Every stock market trading book in effect acknowledges the belief that stock price movement cannot be accurately predicted. That is why much of the books are devoted to ‘strategies’ rather than predicting.

No computer program can consistently and continuously beat the best human player of the ancient Chinese game of Go or Weiqi. That is because after both white and black pieces have made their first move in chess, there are 400 possible moves in the next round.

After the first move in Go, there are 129,960 possible moves in the second round. It is almost the same for the stock market.

In the first six months of 2014, the biggest PSE gainer was Sinophil Corp., up 430 percent. The biggest loser was PhilWeb Corp., down 43 percent. Which expert or guru on January 1, 2014 predicted either of those price changes?

The stock market is a game, not a science.

E-mail me at mangun@gmail.com.

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

opinion@businessmirror.com.ph

Opinion

The year of Piketty

Broad support for automated polls

BusinessMirror

Clive Crook

Ernesto M. Hilario

BLOOMBERG view

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AST month the Financial Times chose Thomas Piketty’s “Capital in the Twenty-First Century,” a study of the underlying dynamics of inequality, as its Business Book of the Year. The honor rather understates the book’s impact.

Forget “business book.” “Capital” was the non-fiction publishing sensation of the year, and maybe of the decade or more. When has a work of its kind ever been so rapturously received?

Yet what a perplexing phenomenon this was. Now that the acclaim and the subsequent backlash have subsided, the Year of Piketty seems worth another moment’s reflection.

Let me say at the outset, I wasn’t among the book’s admirers. I found it mostly infuriating. As I wrote in “The Most Important Book Ever Is All Wrong.”

There’s a persistent tension between the limits of the data he presents and the grandiosity of the conclusions he draws. At times this borders on schizophrenia. In introducing each set of data, he’s all caution and modesty, as he should be, because measurement problems arise at every stage. Almost in the next paragraph, he states a conclusion that goes beyond what the data would support even if it were unimpeachable.

I stand by that, even though much of the scholarly discussion of the book has led me to think I was too kind. The most pointed scholarly critique was by Per Krusell (Stockholm University) and Tony Smith (Yale). They say Piketty makes an unwittingly extreme assumption about saving that makes his math wrong.

Larry Summers wrote a congratulatory appraisal, which gently picks apart the economics and dissents from Piketty’s analysis on every key point. Turning to policy, and Piketty’s recommended global wealth tax, Summers says, “Perhaps the best way of thinking about Piketty’s wealth tax is less as a serious proposal than as a device for pointing up two truths.”

The truths in question (reducing inequality requires tax reform; high taxes on the rich call for international cooperation) were obvious before Piketty sat down at his keyboard.

There’s a pattern here. Scholars who profess admiration for the book, and who call it the hithertomissing foundation for any intelligent discussion of policy, proceed to discuss policy in ways that have almost nothing to do with it. Summers’ mode of praise, applied to the book as a whole, is typical: What Piketty says might not make sense, but we applaud him for saying it.

An interesting essay by Oxford University’s Tony Atkinson, long an academic authority on inequality, is another example. Atkinson discusses a wide range of policies to promote equality. Some of them are more plausible than others, but none—despite strenuous tributes to “Capital” throughout—is new, and none, so far as I can see, is illuminated by Piketty’s supposed theoretical insights. The essay is entitled, “After Piketty?”

Piketty told the FT that his aim had been “to promote the democratization of economic knowledge.”

The issues are too important “to be left to a small group of economists and statisticians,” he added. He’s right that the issues are important, which is why his book annoys me so much: It democratized confusion and misdirection more than knowledge.

The expert review I found most interesting didn’t appear until later in the year; by that time a degree of Piketty exhaustion had set in, so it didn’t get the attention it deserved. Daron Acemoglu (MIT) and James Robinson (Harvard) took the book to task in “The Rise and Fall of General Laws of Capitalism.”

They argued, first, that Piketty’s

economic theory would be wrong even if his basic approach to the issue was correct; and, second, that his basic approach to the issue is wrong as well.

Regarding the theory, Piketty is fond of stating “laws” of economics. He emphasizes throughout a “fundamental logical contradiction” in capitalism, arising from the fact that the rate of return on capital, r, is greater than the rate of economic growth, g. The fact that r is greater than g, he says, tends to give owners of capital an increasing share of national income; unless this is offset, by global warfare or other interruptions, it serves to widen inequality.

One problem with this, as Acemoglu and Robinson explain, is that g and r aren’t independent, as Piketty’s reasoning requires. Piketty’s view about the future gap between r and g is a conjecture not a deduction, and one that’s at odds with most of the empirical evidence.

Even if r did perpetually exceed g, many other factors—including a relatively modest amount of social mobility—would be capable of offsetting the effect on income inequality.

The point is, what Piketty calls laws of economics aren’t, in fact, laws. They aren’t even well-established empirical regularities. Acemoglu and Robinson: The reader may come away from these data presented at length in Piketty’s book with the impression that the evidence supporting his proposed laws of capitalism is overwhelming. However, Piketty does not present even basic correlations between r-g and changes in inequality, much less any explicit evidence of a causal effect. Therefore, as a first step we show that the data provide little support for the general laws of capitalism he advances.

On its own terms, in other words, Piketty’s theory is unpersuasive. But Acemoglu and Robinson point to a more basic problem.

The very goal of deducing general laws of capitalism, in the spirit of Karl Marx, is misconceived. It cannot do justice to the interplay of politics, institutions and technology that drives economic outcomes. The whole point of looking for reductive logical contradictions is to deny or at least diminish those other factors. History, again and again, has mocked this endeavor. Piketty’s theory will be no exception.

The signs, though, are that being wrong won’t subtract much from the esteem accorded to the author and his book. Even critics of “Capital”—including Acemoglu and Robinson—are generous in praising Piketty for his industry and especially his ambition. Attention, social scientists. Don’t worry about being wrong, just be wrong in a big way. Be wrong because you over-reach. Be wrong the way Marx was wrong (but maybe hope for less collateral damage).

Above all, admirers and critics alike pay tribute to “Capital” for drawing attention to inequality.

I hadn’t noticed that it was lacking attention to begin with. The American left pays attention to little else. It was really the reverse: The obsession with inequality demanded, so to speak, an academic testament, and that’s what “Capital” provided. Piketty’s economics leaves a lot to be desired, but his timing was fantastic.

ABOUT TOWN

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ITH the 2016 national elections in the horizon, the Commission on Elections (Comelec) has ramped up preparations for the political exercise. Among these is the continuation of the Automated Election System (AES) based on Precinct Count Optical Scan (PCOS) machines successfully used in 2010 and 2013. Certain quarters, however, are still pushing for an Open Election System that will combine manual voting and precinct-level counting with computerized canvassing at the municipal, provincial and national levels.

The Comelec decision to continue using the AES-PCOS system appears to be a sound one. In fact, it enjoys bipartisan support among lawmakers. Rep. Fredenil Castro of Capiz, chairman of the House committee on suffrage and electoral reforms, believes that PCOS critics should just help the Comelec improve the automated system as they have failed to present “incontrovertible evidence to substantiate their claim” of electoral fraud, and the poll watchdog handled the past two automated elections very well.

In the absence of convincing proof of fraud, Castro said, “There is no reason stakeholders would want a return to manual voting.”

Rep. Rufus Rodriguez of Cagayan de Oro City said he was initially opposed to the use of PCOS machines in 2010, but then changed his mind after witnessing the accuracy of the units as a member of the House of Representatives Electoral Tribunal (HRET). “It’s really accurate and reliable,” the HRET member said. “It made our job of resolving election

cases easier and faster.”

Party-list Rep. Rodel Batocabe of Ako Bicol, likewise, denounced the incessant claims of electoral fraud in the 2010 and 2013 polls, and pointed out: “The worldwide trend is toward automation and we should not again go back to jurassic age where outcome of election results are known only after several weeks [or] even months.”

Parañaque City Rep. Gustavo TambuntingoftheoppositionUnited Nationalist Alliance personally vouched for the accuracy of the PCOS machines as proven by his victory over his pro-administration rival. “It would be a nightmare and terrible decision to go back to the old system of manual counting of votes, which takes forever and which allows miscounts and ballot switching and snatching.”

Another opposition solon—Rep. Sherwin Gatchalian of Valenzuela City—said that staging a semimanual 2016 balloting would be “like going back to the Dark Ages.”

The call for the return to tra-

Tuesday, December 30, 2014

“The antiquated electoral system anchored on manual counting had been the source of several other legitimacy crises,” according to the study commissioned by SRI. Using election forensics and accepted statistical principles, the study debunked the critics’ claim of a systematic 60:30:10 winning ratio in the 2013 polls, in which the AES/PCOS system was supposedly programmed to come up with winners at a uniform proportion of 60 percent administration candidates, 30 percent from the opposition and 10 percent independent bets. ditional manual voting is also opposed by think tanks such as the Social Research Institute (SRI).

Citing the results of a study, SRI said that reverting to the manual system might cause a legitimacy crisis for whoever succeeds President Aquino in 2016, similar to the one that hounded then-President Gloria Macapagal-Arroyo after the highly controversial 2004 polls.

“The antiquated electoral system anchored on manual counting had been the source of several other legitimacy crises,” according to the study commissioned by SRI. Using election forensics and accepted statistical principles, the study debunked the critics’ claim of a systematic 60:30:10 winning ratio in the 2013 polls, in which the AES/PCOS system was supposedly programmed to come up with winners at a uniform proportion of 60 percent administration candidates, 30 percent from the opposition and 10 percent independent bets.

Malaysia’s year of flying dangerously Adam Minter

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BLOOMBERG VIEW

HEN the Indonesian authorities called off Sunday’s search for AirAsia Flight QZ8501, lost flying between Subaya, Indonesia and Singapore, Malaysians could have been forgiven for feeling a sense of déjà vu. After all, it was only nine months earlier, on March 8, that they received word that Malaysia Airlines Flight 370 had gone missing, setting off months of onagain, off-again searches that—so far—have turned up nothing.

At least briefly, QZ8501, flown on an Indonesian subsidiary of Kuala Lumpur-based AirAsia, felt like more of the same.

There are, of course, notable, differences. QZ8501 has only been missing less than 24 hours and, unlike Flight 370, there’s actually an immediate, reasonable theory about what might have happened to it (bad weather). But the fact that there’s less mystery surrounding QZ8501 isn’t much solace.

In fact, many Malaysians are now trying to reckon with the fact that Malaysian-owned carriers will have been involved in the three worst air tragedies of the past year, including Malaysia Airlines Flight 17, shot down over the Ukraine. That’s an unlikely status for any country, much less Malaysia, population 30 million,

and hardly a global aviation power.

It’s tempting to look for a common thread to explain this inexplicable string of bad aviation luck.

But prior to March 2014, Malaysia’s two major carriers had exemplary safety records, and there was absolutely nothing about them to lead an outside observer to believe that they’d lose three jets in nine months.

Indeed, if there’s a single thread that runs from MH370 to QZ8501, it’s the public relations efforts in the face of disaster. Even that aspect hasn’t been entirely consistent.

Malaysian authorities certainly didn’t wish for the practice, but they’ve clearly become better and more transparent when responding to tragedy since the evasive, and sometimes incompetent, response to MH370.

But better PR hasn’t been able to change the central fact of the Malaysia Air tragedies—that all the disasters have been shrouded in mystery. True, the wreckage of

Filling America’s talent gap

By Harold L. Sirkin Tribune News Service

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HEN the topic is immigration, Democrats and Republicans alike continue to focus almost entirely on a single question: what to do about the millions of low-skill immigrants–mostly from Latin America–who are in the United States illegally.

While this certainly needs to be addressed, the economic slowdown in Europe–and to a lesser degree that in China–raises another, perhaps, more important, question: What can and should the US do to attract more well-educated young workers to the US from overseas, where they could help us fill thousands of technical jobs that now go begging?

Let’s be clear: Unfilled jobs don’t enhance our economy. To the contrary, they’re a drag. And despite the large number of Americans still looking for full-time employment, many companies–including some

of the biggest names in technology– are still having problems filling certain positions.

Microsoft alone reported some 6,000 tech vacancies in a recent white paper on the need to develop a “National Talent Strategy.” So why not fill these jobs with eager newcomers from abroad? It would boost our economy, creating additional jobs for US workers in the process.

This is not a substitute for home-grown talent. We urgently need to expand and upgrade vocational education in the US. But this won’t happen overnight.

In the meantime, many compa-

nies can’t find enough qualified people to fill the technology jobs they have available.

But there are plenty of possible candidates overseas, many of whom are proficient, if not fluent, in English and some of whom have studied in the US, only to be sent home after getting their degrees.

And they’re more than willing to come here.

As James Kanter noted in a recent New York Times article from Brussels, economic growth in the European Union (EU) is currently about half the US growth rate. As a result, job creation has lagged, with unemployment in the EU expected to average in the double digits for at least another year.

Among workers under 25, the unemployment rate is far worse: 24 percent overall at the end of 2013, 23.7 percent in Belgium, 18.9 percent in the Czech Republic, more than 50 percent in Greece and Spain, just under 25 percent in France, 40

A7

Poll observer Democracy Watch also blasted critics of automation, saying that such a “regression” will only benefit election operators and cheaters. According to the group, the shift to AES has modernized the country’s electoral system as it replaced the manual way of voting and canvassing, which history has shown was prone to cheating: “Our experience in 2013 was successful in reinstilling integrity in the election process. The results were reliable, efficient, and swift.”

Prominent election lawyer Romulo Macalintal has, likewise, vouched for the accuracy of the PCOS/AES setup, as well as the integrity and credibility of the balloting in 2010: “His [President Aquino] opponents did not contest his election when they all conceded defeat,” Macalintal argued. “None of them ever said that they were cheated by PCOS machines.”

Macalintal said all of the infotech experts crying fraud “miserably failed to show proof that any of the more than 80,000 PCOS machines was ever hacked or their results compromised.”

Moreover, he said all election protests involving local posts have been dismissed because the protesters or poll losers failed to present any material discrepancy between the PCOS results and the results of the physical recount of the ballots.

The best argument that the PCOS count in 2010 was accurate, added Macalintal, was that Interior Secretary Manuel Roxas II has “not been actively pursuing” his election protest against Vice President Jejomar C. Binay that he filed before the Supreme Court in July 2010.

E-mail: ernhil@yahoo.com.

MH17 was found quickly, but despite widespread suspicion that Russiansupported rebels were responsible for shooting it down, so far there’s been no official statement from accident investigators to support the claim. It doesn’t help that Malaysia has largely been at the mercy of others to solve these aviation mysteries.

The search for MH370 has been led

by Australians, among others; the investigation of MH17 is being led

by Europeans.

That sort of dependence wasn’t the best foundation for a confident response to the latest tragedy. The dominant emotion on Malaysian social media in the hours following Sunday morning’s first news of QZ8501’s disappearance was despair. Of the many responses perhaps none was more poignant than the one tweeted by Malaysia Airlines, AirAsia’s fierce competitor. “#staystrong @AirAsia-Our thoughts and prayers are with all family and friends of those on board QZ8501.”

percent in Italy, 23 percent in Sweden, more than 20 percent in Great Britain. Among the major industrial countries, only Germany–where vocational education is almost an art– appears to be in good shape.

The US should put out the welcome mat for overseas workers with specific technical skills needed here.

The existing H-1B visa program clearly isn’t doing the job if thousands upon thousands of technical positions remain unfilled because employers can’t find qualified workers. If politics don’t get in the way, it shouldn’t be too difficult to create agreeable rules for such a program.

Meanwhile, the USneeds to do more–much more–to interest American students in technical and engineering careers. One problem that needs to be resolved is the wall of separation that currently exists between our high schools’ “college prep” and “vocational ed” classes.

2nd Front Page BusinessMirror

A8 Tuesday, December 30, 2014

BOI-approved investments fell 24% to ₧354.5B in 2014

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By Catherine N. Pillas

EW projects approved by the Board of Investments (BOI) went down by 24 percent to P354.5 billion in 2014, from P466.03 billion posted a year ago, according to data released by the investment-promotion agency (IPA).

The decline was mainly due to the 47-percent cut in the BOI’s investment approvals in the electricity, gas, steam and air-conditioning supply sector. In 2013 investments in the sector were lower at P174.7 billion, compared to P331.1 billion posted last year.

The biggest investor in the energy sector for 2014, St. Raphael Power Generation Corp., a subsidiary of Semirara and Mining Corp., is spending P63.2 billion to operate a coal-fired power plant in Batangas.

Other notable investors in the energy

sector were GNPower Kauswagan Ltd. Co., Citra Central Expressway Corp., and Vertex Tollways Development Inc. Despite the decline, the energy sector continued to record the biggest share of total investments, accounting for 49 percent.

The construction sector posted the secondbiggest haul at P64 billion, followed by mass housing at P47.7 billion; manufacturing, P24.5 billion; and transportation and storage ice activities, P20.8 billion.

BOI figures showed that the transportation and storage sector’s haul in 2014 suffered a big drop at nearly 70 percent. The sector attracted P67.66 billion in investments last year.

In manufacturing, Unilever Philippines Inc. made the biggest investment at P9.4 billion. The amount is considered the seventhlargest for the year.

Data from the IPA showed that all manufacturing subsectors, including basic metals, beverages, electrical equipment, rubber and

plastic products, and motor vehicles, registered significant increases in 2014.

Manufacturing investments surged by 77.5 percent to P24.5 billion in 2014, from P13.8 billion posted last year.

The BOI said the National Capital Region (NCR) was the preferred destination of investors as it attracted P116 billion in investments. The figure is almost triple the P36.8 billion in investment approvals recorded by the NCR in 2013.

Other top investment destinations were Regions 4, 10, 6 and 3.

Domestic investments accounted for the bulk of BOI approvals at P317.69 billion, or 90 percent of the total, while foreign investments accounted for 10 percent, or P36.85 billion.

The investment-promotion agency approved 294 projects this year, which are expected to generate an estimated 58,619 jobs over the next few years.

AIRASIA DROPS MOST SINCE 2011 AFTER FLIGHT VANISHED

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Relatives and next-of-kin of passengers on the AirAsia Flight QZ8501 wait, some in tears while others in prayer, for the latest news on the search of the missing jetliner at Juanda International Airport in Surabaya, East Java, Indonesia, on Monday. Search planes and ships from several countries on Monday were scouring Indonesian waters over which an AirAsia jet disappeared, more than a day into the region’s latest aviation mystery. AirAsia Flight 8501 vanished on Sunday in airspace thick with storm clouds on its way from Surabaya, Indonesia, to Singapore. AP

irAsia Bhd. shares headed for the biggest tumble in three years after the Malaysian budget carrier’s flight QZ8501 disappeared en route from Indonesia to Singapore.

Meanwhile, airline and government officials in Manila said an AirAsia Zest plane developed a tire problem in the central Philippine city of Tagbilaran, prompting the airline, which is partly owned by AirAsia Philippines, to cancel its flight on Sunday to Manila with 178 passengers and six crew members, said on Monday.

The incident comes as rescuers search for a missing AirAsia plane that disappeared on a flight from Indonesia to Singapore with 162 onboard.

Civil Aviation Authority of the Philippines Spokesman Eric Apolonio said at least four domestic flights to and from Tagbilaran were canceled due to the incident.

The Airbus A320 aircraft’s tire was later fixed, allowing it to resume its flight to the Philippine capital on Monday morning. No reason was given for the problem.

AirAsia Bhd. shares slid as much as 13 percent to 2.56 ringgit and was 8.2 percent lower at 11:31 a.m. local time. Shares were cut to a trading sell from buy at Hong Leong Investment Bank Bhd., which lowered its price target to 2.64 ringgit from 3.15 ringgit. AirAsia Continued on A2

‘No need for new Naia runway’ Continued from A1

“The consultant doubted if it could even add additional movements. He said the main thing to do is preserve your main runway, maximize it, try to eliminate all forms of obstruction or delays on it, and keep planes off it most of the time,” the transport chief explained.

In August President Aquino ordered the construction of a third runway at the Naia to ease the perennial congestion at Manila’s aviation hub. It had an initial cost of P2.4 billion.

But for Ummels, “There are more prospects to a new terminal than a third runway,” Abaya said. The fifth terminal, he added, will be located near C-5 Road, the fifth beltway of Manila.

The transport chief noted that the government will no longer need to expropriate land to construct the new terminal.

“There is no need to expropriate land. It will require less land so we don’t eat into private subdivisions. What would be affected are informal settlers within the Miaa [Manila International Airport Authority] property. We don’t affect C-5.

Hopefully, once the consultant shows the numbers, we’ll go up to the President and present it,” Abaya explained.

The complete details of the fifth terminal, including its capacity, will be disclosed shortly.

“We will maximize that new terminal because one of the challenges at the Naia is the lack of parking space,” he said.

What the government will do now is to pursue the optimization of the current runway to somehow decongest the air-traffic bottleneck at one of Southeast Asia’s fastestgrowing economies.

“Now the runway-optimization project, let say it can increase the events to low 60, high 50 per hour from currently 40, that will require

additional terminal space; so we have to create space at the three terminals,” Abaya said.

The government recently auctioned off the multimillion-peso runway-optimization deal for the Naia. The past tenders for the said contract were declared failed.

“We’re waiting for the decision of the procurement. It will take them a year to study and recommend and execute the plan. By the end of 2015, we’ll know,” he explained.

“Definitely, the new terminal is not the terminal that will absorb all that we need until 2027 or 2028. Even if we put this up, there will still be need for terminal space, so we will create more space in Terminals 1, 2 and 3,” Abaya added.

Separately, the government is looking at constructing the $10-billion airport at Sangley Point in Cavite to replace the aging and dilapidated Naia.

The Japan International Cooperation Agency presented this proposition to the government earlier this year, as the Naia would “totally be capacity-saturated in 2015, and not be able to cater for the increasing passenger demand anymore.”

By next year the airport is expected to handle 37.78 million passengers, bulk of which, or 21.31 million, would be domestic traffic, while the remaining 16.46 million would be international passengers. Come 2040, Naia’s passenger traffic would reach 101.49 million.

As of end-2013, the airport’s annual passenger traffic reached 32.865 million from 31.877 million in 2012, representing a 3.1-percent rise in volume. The optimal capacity of Naia’s three terminals is 30 million passengers per year, while its maximum capacity is at roughly 35 million passengers annually.

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Developers join apl.de.ap in promotional tour for Clark

T

he plan by the Philippines to develop the former Clark Air Base has drawn interest from Asian developers, who may join a Black Eyed Peas rapper in promoting an alternative urban center to the country’s congested capital.

Taiwan’s Farglory Land Development Co. and the property arm of Japan’s Sumitomo Corp. are among foreign companies that may be keen on the project, joining local developers such as Ayala Land Inc., said Arnel Casanova, president and chief executive of the Bases Conversion and Development Authority (BCDA), the state manager of former military properties.

Earlier this year, Casanova recruited Allan Pineda, a member of hip-hop group the Black Eyed Peas, to promote the site to relieve congestion in Manila, one of the world’s most overcrowded cities. Pineda, whose American father was an airman at the former Clark Air Base, is a citizen of both the US and the Philippines.

“We need to ease the pressure of migration into Manila by creating another metropolis,” Casanova said in an interview in Manila on December 18.

The BCDA plans to sell joint development rights to local and foreign companies interested in developing a 9,450-hectare (95-squarekilometer [sq km] area of land at the former Clark base, which was used by US forces during World War II and the Vietnam War, and was handed back to the Philippine government in 1991.

It wants to develop a mix of housing, shops and manufacturing facilities on a portion of the 35,000-hectare site, which is about half the size of Singapore. That will relieve some of the pressure on the overcrowded capital, which lies about 70 kilometers to the south.

Philippine developers

Ayala Land, Robinsons Land Corp. and Century Properties Group Inc. are among half a dozen local companies talking to the BCDA about developing the so-called Clark City, Casanova said.

Manila is home to 22 million people, who share only 620 sq km of space, already one of the highest population densities in the world.

The population will rise to 30 million by 2025, making it the world’s third-largest urban area after Tokyo and Jakarta, according to forecasts

by Belleville, Illinois-based Demographia.

President Aquino has promoted the Clark City project as part of plans to spread wealth outside the capital, which accounts for more than a third of the country’s gross domestic product of $272 billion. The BCDA is hoping to sign the first development contract during the first quarter of 2015, Casanova said.

‘Technology hub’

Pineda, popularly known as apl.de.ap, has been meeting companies interested in Clark City, and helped organize a forum in Singapore on the project last month. He said in a Twitter post that he will promote the area as “a technology hub for Southeast Asia.” He couldn’t be reached for comment.

When the US military left, parts of Clark Air Base were used as an economic zone, which included an international airport, though most of the area remains undeveloped.

The new Clark City will eventually create about 1 million jobs, mostly in outsourcing and manufacturing, and generate about $36 billion worth in economic activity from industrial parks, education and recreation centers, which are planned over the next 30 years, Casanova said. The BCDA has approached colleges, such as the University of the Philippines, to set up campuses.

Developers are being offered similar terms to those used at Fort Bonifacio, a former army base, which is now one of the fastest-growing districts in the capital, Casanova said. A group led

by Metro Pacific Investments Corp., partnered with the BCDA to develop Bonifacio City, though it subsequently sold its development rights to Ayala Land and Evergreen Holdings Inc.

Fort Bonifacio

The terms for developing Fort Bonifacio will probably work for Clark City, as well, said Astro del Castillo, managing director of First Grade Finance Inc. in Manila, an investment company.

“Any government project, or any project of such magnitude, tends to attract a lot of interest from investors,” he said.

Farglory said in an e-mail that it’s assessing the Clark City project without giving further details, while Sumitomo’s spokesman, Miyuki Egusa, said See “Developers,” A2