Businessmirror february 15, 2015

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

U.N. Media Award 2008

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A broader look at today’s business

n Sunday, February 15, 2015 Vol. 10 No. 129

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BSP’s next move: Cut or tighten rates? week ahead

ECONOMIC DATA PREVIEW Previous week

The local currency started the week at a weaker note at 44.355 to a dollar, from the previous week’s end at 44.15 to a dollar. This appreciated on Tuesday to 44.31 to a dollar, and further at 44.3 to a dollar on Wednesday.

The peso then hit depreciation on Thursday at 44.385 to a dollar, and ended the week at 44.285 to a dollar on Friday. The peso moved along with regional peers during the week. n Week ahead: The peso is expected to rally for the week ahead, but is still seen to trade sideways within the lower band of the 44 territory next week, with a slight depreciation bias due to lack of local leads to catalyze the market.

Balance of Payments (BOP) January 2015 Wednesday, February 18

n December 2014 BOP: The Bangko Sentral ng Pilipinas earlier reported that the country’s balance of payments (BOP) position yielded a deficit of $2.88 billion for 2014. This is a steep reversal of the country’s BOP position from the previous year, which yielded at $5.085-billion net surplus. The deficit seen last year has been attributed by the central bank to the heavy capital outflow seen earlier during the year, when markets were rattled by the plans of ending the quantitative easing program of the US during the year. n January 2015 BOP: The country’s transactions with the rest of the world are expected to recover this year, according to BSP senior officials, amid the expected disturbances in the external front. The BOP should be able to bounce back strongly from a shortfall in 2014 to a surplus in 2015, with the current account expected to show increasing positive position of at least $6 billion, BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo earlier said. Bianca Cuaresma

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By Bianca Cuaresma

he recent slash made by the Bangko Sentral ng Pilipinas (BSP) to its inflation forecast is expected to diversify the market’s view further of the central bank’s next policy action down the line, an international banking giant said.

In an analysis commentary following the central bank’s decision to maintain policy rates untouched this week, the DBS Bank Group Research said more economists and analysts are likely to shift their biases from tightening

to cutting rates at the end of the year, as inflation has fallen down to near floor level for the year.

After the BSP said that the Monetary Board (MB) decided to maintain policy rates—at 4-percent Continued on A2

War history is littered with

civilian

deaths

‘Cyberthreat onslaught requires joint defense’

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By Margaret Talev & Chris Strohm | Bloomberg

resident Barack Obama said the onslaught of Internet threats against the US government and business computers requires a joint defense by federal and private security specialists.

At a time when relations between Silicon Valley and Washington are frayed over government surveillance and data collection, Obama is appealing to technology companies for cooperation to fend off criminal and state-sponsored attacks on the nation’s computer networks.

“The very technologies that empower us to do great good can also be used to undermine us,” Obama said at a White House-sponsored cybersecurity summit on Friday at the Stanford University in California. “Everybody’s online, and everybody’s vulnerable.”

Addressing an audience that included executives and security officials from companies such as Microsoft Corp., Google Inc., Yahoo! Inc. and Facebook Inc., Obama said he will make it easier for the government and companies to share threat information while he awaits congressional action on cybersecurity legislation.

One of the areas of friction between the government and technology companies is how to balance the privacy of users or customers with national security concerns in the extensive government-surveillance programs that intercept phone, Internet and other communications.

See “Cyberthreat,” A2

MRT 3 owner, govt eye compromise

By Lorenz S. Marasigan

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HE longdrawn battle between the government and the owner of the Metro Rail Transit (MRT) Line 3 may soon end, after a senior official of the transportation department admitted that his office is currently weighing the proposal of the Sobrepeñaled company to invest more money in the train system in exchange for an extension of its contract.

Still, the government is taking extra precaution in considering the

PESO exchange rates n US 44.3960

offer that would free the state from paying billions of pesos in equity rental payments to the company, which also proposed to overhaul the train line without a single centavo from the government.

“We’re studying it; we don’t want to say outright that we are in favor or against it. There are certain concerns, like fares,” Transportation Undersecretary Jose Perpetuo M. Lotilla said in an interview.

MRT Holdings II Inc. (MRTHII) and Metro Pacific Investments Corp. (MPIC) are proposing to defray the upgrade costs of the train system and release the government from the bondage of paying billions of See “MRT 3,” A2

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arely has the world had such a frontrow seat for a concerted attack by a major air force on an urban area as it did during last summer’s Gaza war. But Israel is far from the only country to have killed civilians during war. The list is long, from Dresden to Japan, from Grozny to Algeria. GlobalEye»C2

n japan 0.3732 n UK 68.3343 n HK 5.7261 n CHINA 7.1086 n singapore 32.7380 n australia 34.3888 n EU 50.6336 n SAUDI arabia 11.8342 Source: BSP (13 February 2015)

News

BusinessMirror

A2 Sunday, February 15, 2015

MRT 3...

BSP’s next move: Cut or tighten rates? vised downward, from the earlier 2.6 percent in December to 2.5 percent, based on their present assessment.

“We have a low actual December 2014 and January inflation rate. We have also seen oil prices bringing down the level of inflation. Stronger peso is also supportive of lower inflation forecast.

Lower global growth is another factor behind the lower inflation forecast for both 2015 and 2016,” Guinigundo said in the post-policy meeting on February 12 this year.

Earlier in 2014, the BSP forecasted annual inflation in 2015 to hit about 3.9 percent—almost breaching the target for the year.

“There was little indication of any move in the near term [in the BSP’s statements after the policy

Continued from A1

reverse repurchase rate and at 6-percent repurchase rate—BSP Deputy Governor for Monetary Stability Sector Diwa Guinigundo said the inflation assessment of the MB yielded a lower trajectory for the year.

In particular, Guinigundo said the BSP now expects the country’s inflation rate to hit 2.3 percent— or at the lower band of the government’s target for the year at 2 percent to 4 percent.

This is a downward revision from the earlier forecast of the central bank at 3 percent, which was announced in December 2014.

Likewise, the deputy governor said inflation forecast for 2016 was re-

Cyberthreat...

Privacy rights

Obama was preceded on the stage

by Tim Cook, chief executive of Apple Inc., who said sacrificing privacy rights “can have dire consequences” beyond business interests.

“If those of us in positions of responsibility fail to do everything in our power to protect the right of privacy, we risk something far more valuable than money, we risk our way of life,” he said.

Obama listed that as one of the principles that will guide his strategy in confronting cyberthreats.

“When we go online we shouldn’t have to forfeit the basic privacy we’re entitled to as Americans,” Obama said.

Obama signed an executive order intended to encourage companies to share information on Internet

meeting]. But by lowering its consumer price index forecast for 2015 and 2016 to 2.3 percent and 2.5 percent, respectively, we are likely to see some in the markets toying with the idea for a rate cut going forward,” the DBS Bank said.

At present, only the economist group from JPMorgan expressed the views that the BSP will cut rates toward the end of the year by about 25 basis points.

The DBS Bank said it still forecasts a rate hike this year as the central bank remains concerned about liquidity in the financial system.

“The preference to raise rates is intact, but it is hard to justify making a move in the current environment. Expect steady rates for now,” the DBS Bank, however, said.

blamed on North Korean hackers.

“This has to be a shared mission.”

In an interview later with the web site Re/Code, Obama said the US has become “hugely vulnerable” as critical systems from Wall Street to utilities to air traffic control have become more dependent on digital data.

Obama told the web site the US needs to work with businesses individually and “pull those companies together so they’re working together more effectively” to prevent attacks.

While there is broad agreement companies should get legal protections for sharing threat data, Congress has failed to reach a deal on similar legislation in the past four years.

Chief executives from a variety of industries emphasized the importance of public-private sector sharing of information about cyberthreats.

continued from A1 threats with one another and create a framework to help the private sector turn over data to federal agencies investigating data breaches. Companies would share the information voluntarily.

Legislative proposal

The White House in January proposed legislation that would give companies legal protections for sharing information with each other and the government about hacking threats. The administration argues it’s needed to help prevent attacks like the November hack that crippled thousands of computers at Sony Pictures Entertainment.

“These attacks are hurting American companies and costing American jobs,” Obama said, citing the Sony attack, which US authorities have

FEBRUARY 15, 2015 | SUNDAY

continued from A1

pesos in equity rental payments.

The group of businessman Manuel V. Pangilinan, which earlier entered into a partnership agreement with the corporate owner of the MRT 3, intends to spend $524 million to overhaul the line.

The agreement would allow Pangilinan’s company to invest some $600 million to improve the services of the train system.

The venture would effectively expand the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. The multimillion-dollar expansion plan would double the capacity of the line to 700,000 passengers a day, from the current 350,000 passengers daily.

It was submitted in 2011, but the transportation agency’s chief back then rejected the proposal.

Separately, MRTH-II and Sumi­­ tomo Corp., the original contractor of the most congested railway system in the Philippines, are proposing to invest P6.75 billion into the system. The proposal involves the procurement of a total of 96 new train cars, the rehabilitation of the existing 73 coaches, and the extension of the MRT all the way to Caloocan, while liberating the government from renting the train system.

Under the proposal, a single point of responsibility will be implemented, meaning the rehabilitation and the maintenance of the line will be handled by a single company.

The proposals, Lotilla said, should also entail a provision that protects the public from ridiculously high fares.

“We want to be secured that the fares would not be too high,” the transport official said.

MRTH-II Chairman Robert John L. Sobrepeña, in response,

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allayed fears that the company would increase the fares sharply should its proposal be adopted by the government.

“We will not increase the fares sharply. It will be done staggeringly, and will only be equal to bus fares,” the businessman said in a separate interview.

The government, despite being open to the proposals, will still pursue the P54-billion takeover of the train line, Lotilla said.

He said the transportation department is looking at tapping the local lending market to bankroll the initiative that was thumbed down by the Legislative department.

Lawmakers were not keen on effecting the buyout, after they found the acquisition of the train line to be lacking in “economic value.” Congressmen argued that the P54 billion is only enough to buy the 80-percent economic interest held by the Land Bank of the Philippines and the Development Bank of the Philippines in MRT Corp., the owner of the train line.

To fully take over the line, the government must buy out all the shares and the bonds in the railway company. Another requirement of the buyout deal is for the government and the private partner to strike up a compromise deal to end the ongoing arbitration case in Singapore that was lodged against the state in 2008 due to its failure, as the operator of the line, to pay billions of equity rental payments to the owner of the rail system.

Should the buyout be completed in 2016, the transportation agency may then bid out the operations and maintenance contract of the line, thereby tapping privatesector efficiency and customerservice orientation for operational

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needs, while retaining regulatory functions for passenger protection with the government.

For now, passengers of the 15-year-old mass-transit system, which ferries more than half a million passengers daily, should make do with what is available: long queues caused by the lack of light-rail vehicles, an inefficient ticketing system, humid train cars, faulty elevators and escalators, and rude tellers.

The train system is even a risk to the safety of the riding public. Rail experts from MTR Corp. Ltd., the operator of the railway system in Hong Kong, concluded that the MRT is already exhibiting signs of obsolescence.

Hence, improvements must be made in order to address the risks posed to the lives of half a billion commuters.

The state of the line was poor enough to discourage prospective maintenance contractors from joining the auction for the P2.38-billion MRT 3 upkeep deal. The maintenance contract was snubbed twice by railway maintenance providers, such as Busan Transport Corp., MosanInekon Phils. Ltd. Co., SMRT International Pte. Ltd., Miescorrail Inc. and D.M. Consunji Inc. In order to address the present woes of the MRT 3, the government is currently in the process of rolling out a P9.7-billion multiyear venture to overhaul the line. The complete makeover is expected to be done within the term of President Aquino.

The train system has been operating at overcapacity since 2004.

Currently, the line serves nearly 550,000 passengers per day; it even reached, at one point last year, the 650,000-daily-passenger mark.

It has a rated capacity of 350,000 daily passengers.

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Philippines, US forge another labor-protection accord

Sunday, February 15, 2015

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Legislator opposes integration of terminal fee in price of air ticket

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By Jovee Marie N. dela Cruz

LAWMAKER on Saturday said the Manila International Airport Authority (Miaa) should suspend the implementation of the integration of terminal fees in airfares.

PHILIPPINE Ambassador to Washington, D.C. Jose L. Cuisia Jr. and Chairman Jenny R. Yang of the Equal Employment Opportunity Commission shake hands following the signing of a memorandum of understanding that seeks to protect the rights and welfare of Filipinos working in the US. Philippine Embassy Photo by Majalya A. Fernando

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HE Philippines marked another milestone in its efforts to protect the interests of overseas Filipinos by formally entering into another partnership agreement that will protect the rights and welfare of Filipinos working in the US. In a statement, the Philippine Embassy in Wahington, D.C., said a memorandum of understanding (MOU) was signed on Thursday between the Department of Foreign Affairs (DFA), represented by Ambassador Jose L. Cuisia Jr., and the US Equal Employment Opportunity Commission (EEOC), represented by its chairman, Jenny R. Yang.

The MOU, the fourth migrant worker-related bilateral agreement entered into by the embassy, aims to come up with more protective measures and better welfare interventions for Filipinos working in the US. The MOU is also only the second agreement entered into by the EEOC with a foreign government.

“We are pleased at being able

to formalize our alliance with the EOCC and collaborate closely toward ensuring that Filipino nationals working in the US are accorded equal opportunities at their workplace,” Cuisia said, as he thanked the EEOC for initiating collaborations with countries like the Philippines that have substantial worker populations in the US. Cuisia said the MOU with the EEOC is an affirmation of the US government’s advocacy for equal opportunity in the workplace and prohibited employment discrimination.

Cuisia, at the same time, cited the contribution of EEOC’s district representatives, who have participated in the embassy’s consular outreach missions in the US Southeast.

He said EEOC’s participation enhanced the awareness of Filipino workers of their rights, as well as remedies available to them under existing labor laws regardless of their status.

In her remarks, Yang noted the invaluable contribution of Filipinos

to American society and the US workforce and reiterated the EEOC’s commitment to uphold the rights of migrant workers.

Chairman Yang said EEOC estimates place the number of Filipino immigrant workers in the US at more than 1 million.

She said Filipinos not only comprise one of the largest immigrant groups, but also have a high rate of participation in the labor force compared to other groups.

“By signing this MOU today, the commission signals its unwavering commitment to justice and equality in the workplace for individuals of Filipino descent, whose efforts and contributions have been invaluable to American society and the US workforce,” Yang said.

Officials from the US Department of Labor’s Occupational Safety and Health Administration were present at the signing ceremony, which was streamed live to the various EEOC district offices throughout the US.

Issue rules on new tax-exemption Manila Water posted modest in earnings last year law, lawmaker urges Malacañang increase YALA-LED Manila Water Co. Inc. (MWC) reBy Jovee Marie N. dela Cruz

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OLLOWING the recent signing into law of the bill raising the taxexemption cap for 13th-month pay and other bonuses into a law, one of the principal authors of the law urged the Aquino administration to immediately issue its implementing rules.

Party-list Rep. Antonio Tinio of ACT Teachers, one of the authors of Republic Act 10653 in the House of Representatives, said the administration, through its finance and tax chiefs, to immediately issue implementing rules for the new law, which increases the ceiling on tax-exempt bonuses from P30,000 to P82,000.

Tinio said its benefits need to be felt by the people, especially low- and middle-income earners, as soon as possible. He added that the law will “enable lower-and middle-income earners to take home to their families more of their hard-earned money.” “We hope that the Department of Finance [DOF] will not drag its feet in issuing the implementing rules,” Tinio said, noting that the DOF and the Bureau of Internal Revenue had vehemently opposed the measure.

“The DOF and the BIR should no longer complain about revenue loss.

There will be no revenue loss in the long run because we’ll only be giving the people more of the income that they rightfully earn, and, in turn, they will have more to spend for their families. Greater spending power for the majority of the people will be good for the economy as a whole,” he said.

Also, Libertal Party Rep. Romero Quimbo of Marikina, chairman of the House Committee on Ways and Means and coauthor of the law, said that, as early as June 2015, when half of the 13th-month pay is released, teachers, soldiers, ordinary rank-and-file em-

ployees all the way to middle-level management employees will be able to enjoy bigger bonuses.

The law that was ratified by both houses of Congress in December, covers the tax exemption for the 13th-month pay, Christmas bonus and other bonuses received by employees every year.

It also allows employees in the public and the private sectors to take home a larger share of their bonuses.

Earlier DOF officials warned that raising the tax exemption cap on bonuses would result in revenue loss to the government of about P30 billion per year.

But other experts said any revenue loss would be just P3 billion.

Income tax MEANWHILE, after passing the law on raising the tax exemption on bonuses, Quimbo said the House is now gearing up for deliberations on income-tax reform, which is envisioned to simplify the tax structure, adjust the brackets to inflation and reduce tax rates.

“The President recognizes the importance of having more tax reform measures benefitting the middle class, especially the salary and wage earners, with direct impact on the earnings they receive every month. So these are all forthcoming,” Quimbo said. He said the House Committee on Ways and Means is finalizing the substitute bill on income-tax reforms, which is likely to be approved on second reading before Congress goes on recess on March 20. But, according to Finance Undersecretary Jeremias Paul Jr., the bill reducing the individual incometax rates, which included to the top priorities of the lower chamber—may cause the government to lose revenues totaling as much as 1.5 percent of the country’s gross domestic product or P30 billion.

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ported a slight increase in both revenue and net income as per its unaudited performance results for the full year 2014.

The publicly listed water concessionaire’s consolidated revenues for the 12 months ending December 31, 2014, reached P16.36 billion, or 3 percent greater than the audited P15.93 billion in the same period in 2013.

Consolidated net profit, likewise, showed an incremental increase of 1 percent to P5.82 billion from P5.75 billion year on year. The company’s improved financial results last year could be attributed to higher bills volume and water-service connections within its concession areas in Metro Manila, as well as in Boracay, Laguna, Clark and Vietnam.

MWC’s total billed volume grew 12 percent to 671.2 million cubic meters (mcm) in 2014 from 599.4 mcm two years ago.

Last year’s billed water volume for the East Zone increased 4 percent to 449 mcm from 433.6 mcm in 2013, while the overall number of connections to its water service rose 3 percent to 949,230 from 921,898 during the periods in review.

Such concession area encompasses parts of Manila, San Juan, Taguig, Pateros, Antipolo, Taytay, Jala-Jala, Baras, Angono, San Mateo, Rodriquez, Marikina, Pasig, Mandaluyong, Makati and most of Quezon City.

With the number of service connections expanding by 8 percent from 5,647 to 6,125, the volume of water bills of subsidiary Boracay Island Water increased 11 percent to 4 mcm from 3.6 mcm.

Clark Water’s billed volume gained 18 percent to 11.6 mcm from 9.8 mcm in 2012, as water service connections totaled to 1,978 from 1,975.

The billed volume of Laguna Water posted a 179-percent hike to 31.8 mcm from the previous 11.4 mcm, after water-service connections rose by 35 percent to 90,016 from 66,433.

Vietnam-based Thu Duc Water registered a billed volume of 119.7 mcm, down by 1 percent from 120.4 mcm, while Kenh Dong Water marked a billed volume increase of 168 percent to 55.2 mcm from 20.6 mcm.

In December 2011, MWC acquired a 49-percent stake in the former. It then owned 47.35 percent of the latter in 2012. Roderick L. Abad

Liberal Party Rep. Karlo Alexei B. Nograles of Davao said the integration of terminal fees in airfares could only fuel more public outrage on President Aquino, who is under intense criticisms following the death of 44 elite policemen in Mamasapano, Maguindanao.

According to Nograles, this directive of General Manager Jose Angel Honrado is not only ill-timed because of the present public relations crisis faced by the Aquino administration, following the Mamasapano incident but it is also against the interest and welfare of the country’s overseas workers.

Section 35 of Republic Act 10022, or the Migrant Workers and Overseas Filipinos Act of 1995, grants migrant Filipino workers exemption from payment of terminal fees.

“I think Honrado should be more sensitive on what is happening right now. His directive to merge the charging of terminal fees into our plane tickets would surely anger our overseas workers, who are heroes, just like our Fallen 44.

Honrado should learn from what

happened to former Philippine National Police Chief Director General Alan Purisima,” Nograles said.

Despite opposition from migrant workers’ groups, the Miaa said that, starting February 1, passengers who use the Ninoy Aquino International Airport will pay terminal fees in their online plane tickets.

Moreover, Nograles added he will resist Honrado’s order and as chairman of the House Committee on Labor, he would definitely call for an investigation in aid of legislation on this issue.

“I will call for an investigation, as this is a disservice to our ovrseas workers, the heroes who keep our economy afloat and in good shape.

They are our heroes, just like the SAF [Special Action Force] 44,” he said.

Nograles insisted that Honrado’s action is also illegal because, by law, Filipinos legally working overseas are exempt from paying terminal fees.

“We need to suspend his directive immediately because migrant Filipino workers, by law, are exempt from these charges. We keep saying they are our heroes and maliit

na bagay ito tapos ayaw pagbigyan,” Nograles said.

In an earlier letter to the BusinessMirror, Maria Consuelo Bungag, officer-in-charge of the Miaa Public Affairs Department, said the integration will, in fact, bring added convenience to passengers as a result of reduced queuing process for them.

“Under the [previous] system, all OFWs line up to either pay terminal fee or have their OEC [Overseas Employment Certificate] validated to obtain exemption. With the integration in place, passengers, including OFWs, will no longer have to line up because exemption will be honored at the point of sale, except for tickets purchase abroad or online. For this purpose, refund may be done at the terminals or at the Miaa administration building,” she said.

Bungag added that the total number of departing passengers, who will not line up to pay terminal fee, is 5.6 million a year, and these include overseas workers, athletes and pilgrims.

“The 197,569 passengers expected to buy their tickets online or abroad also may not even have to line up because, according to Philippine Overseas Employment Administration (POEA), in most cases, the worker does not pay for the airfare as it is a condition in the employment contract that tickets should be for the account of the foreign employers. Thus, the terminal fee, which has been incorporated in the airfare, can only be refunded by the foreign employer,” she said.

SundayV

Busine

A4 Sunday, February 15, 2015

editorial The Fallen 44: They died with their boots on

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he tumult that has characterized the Senate and House hearings on Operation Exodus reminds one of that story of the traveler who found himself lost in a dark forest one stormy night. Every roar of thunder sent him clamping up his ears to prevent them from shattering; it was only when lightning flashed through the skies that he could gain a few yards on a way out. In desperation he looked up to the heavens and screamed, “Dear God, please give me more light and less noise.”

Through the rowdy congressional hearings, at least a beam of light has been cast on one conclusion—that the Philippine National Police Special Action Force (PNP-SAF) commandos achieved their objective, which was to neutralize the international terrorist Zulkifli bin Hir, alias Marwan.

The accomplishment came at a high price, however, the loss of life of 44 brave commandos. By this act of courage, unflinching response to duty, in the service of our security as a people, they passed on to the pantheon of our national heroes.

Beyond these facts, everything else is murky. The murkiest of all is the answer to the question of what participation the President had in the whole enterprise.

The commander of the operation, SAF Director Getulio Napeñas, gave a testimony that is a model for emulation by all who dream of becoming leaders of their fellow human beings. In describing details of the Mission, Director Napeñas acknowledged responsibility not just for the things that went right but, most important for the things that went wrong.

He made no effort to pass the blame to any one; certainly not to his superiors, whom he almost appeared to be protecting. His testimony is a study in responsible leadership.

The clarity of the Director’s testimony only served to highlight the evasiveness of the testimony of his superior, suspended PNP chief Director General Alan Purisima. This evasiveness became wanton when, in reply to a query from Senator Santiago of whether the President was involved in giving the go signal to the operation, Purisima said that he needed the clearance of the President before he could answer the question.

Many other questions of great importance, including why the Armed Forces of the Philippines (AFP) did not send any force to rescue the commandos, who had run out of ammunition, from what turned out to be the killing ground, elicited no straightforward answers.

In the House hearing, edified by details unearthed in the Senate investigation, committee members zeroed in on the question left dangling by Director General Purisima. What is the extent of the President’s involvement in the tragedy?

Indeed, what is the extent of the President’s involvement in Operation Exodus? This is the all-important question. We join millions of our countrymen and countrywomen in demanding an answer.

The time has come for the President to step forward and give the answer. The President is the Commander in Chief of the AFP of our country including the police force. He owes it to the people, including the bereaved families of the fallen commandos, to explain the circumstances that gave rise to this one of the saddest episodes in our national experience.

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SINCE coming to office, Li and Chinese President Xi Jinping have laid great emphasis on rebalancing the economy away from exports and investment and toward services and consumption. Yet, since 2009, when Beijing launched a massive stimulus effort to fend off the global financial crisis, per-capita consumption is down: It stands at 7.1 percent now, compared to 8.5 percent then. One key reason is that the

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T Davos last month Chinese Premier Li Keqiang told a room full of fretting executives and policy-makers not to worry about his country’s slowing economy.

China, he argued, had a foolproof means of maintaining rapid growth: an urbanization boom that is creating millions of new consumers.

“China has much room for urban, suburban and regional development, and domestic demand has huge potential,” Li said on January 21. “Domestic demand will keep improving and bring even greater development for the world.”

There’s one problem with this argument, though. China’s massive stimulus efforts since 2009 are, indeed, enriching new city dwellers, but not necessarily the ones most important to the global economy: the middle class.

In a recent report, titled “Will the Middle-Class Consumer Please Stand Up?” Ernan Cui of Gavekal Dragonomics notes that “the real drivers of consumer spending in China, as elsewhere, are the middle classes—and their income has been slowing.” He warns, “If householdincome growth follows the business cycle downward in 2015, as it has so far, then China’s consumption will disappoint.”

Gospel

Sunday, February 15, 2015

A

bottom 40 percent of households saw incomes rise most during the period—about 70 percent, considerably faster than the middle 40 percent (where incomes are stagnating around $3,320).

Of course, China should welcome the fact that lower-income migrant workers are climbing out of poverty.

The gap between extreme rich and poor has narrowed for six straight years—a remarkable accomplishment that is to be applauded. But China also desperately needs the middle class—the ones who buy flatscreen TVs, iPhones and Starbucks lattes rather than cheap rice cookers—to boost consumption; so do multinational companies. Instead, a 19.9-percent year-on-year plunge in January imports may be an omen of things to come.

What gives? Demographics, for one thing. Contrary to conventional wisdom, the increase in the flow of new migrant labor into cities from Beijing to Chongqing has slowed to about 1.3 percent from 5.5 percent in 2010. Labor scarcity—partly because of the one-child policy—means the bottom of the labor market is receiving big wage gains, while the middle 40 percent isn’t. China, it seems, is approaching its so-called Lewis Turning Point—when a nation runs out of cheap labor—sooner than expected.

In a 2013 paper, for example, International Monetary Fund (IMF) economists Mitali Das and Papa N’Diaye figured it wouldn’t arrive until 2020 at the earliest.

Meanwhile, white-collar workers who urbanized earlier, as well as college graduates, face a tough job market. With higher-end jobs harder to find, wages are under downward pressure. As Beijing’s clampdown on credit and shadow banking hits profits at state-owned enterprises,

nd a leper came to him beseeching Him, and kneeling said to Him, “If You will, You can make me clean.”

Moved with pity, He stretched out His hand and touched him, and said to him, “I will; be clean.” And immediately the leprosy left him, and he was made clean.

And He sternly charged him, and sent him away at once, and said to him, “See that you

Cui expects a “clear, if not disastrous, slowdown in China’s consumption growth in 2015. The hit to consumption growth will come from the more gradual, but very real, slowdown in earnings of the middleincome households.”

China’s reform process also deserves some blame. Since the global crisis, China has spent trillions of dollars (only Beijing knows the true tally) ginning up growth with new six-lane highways, airports, shopping malls and high-speed rail networks. The stimulus boom solidified the primacy of state-owned enterprises in the economy. Their outsized role is stunting the development of the private sector needed to create good-paying services jobs that would benefit the middle class. Xi and Li need to invest less in construction and manufacturing and more on supporting small- to mid-size private companies.

As usual, Li said all the right things at Davos: China “will let the market play a decisive role in resource allocation to foster a new engine of growth”; will “focus on structural reform and encourage mass entrepreneurship and innovation,” and “will successfully overcome the middleincome trap” that ensnares all too many developing nations. That, he declared, will “bring greater opportunities to the world economy.”

First, though, China needs to do better at enriching the middle 40 percent of the population. In November the IMF’s senior resident representative for China issued a blunt warning.

China, Alfred Schipke said, needs better regulation and supervision and faster results on its reform program to keep income growth from stalling. It’s great that China wants to make the world richer. It should start with its own middle class.

say nothing to any one; but go, show yourself to the priest, and offer for your cleansing what Moses commanded, for a proof to the people.”

But he went out and began to talk freely about it, and to spread the news, so that Jesus could no longer openly enter a town, but was out in the country; and people came to Him from every quarter.—Mark 1:40-45

Voices

essMirror

opinion@businessmirror.com.ph • Sunday, February 15, 2015 A5

We need a savior I Free Fire

By Teddy Locsin Jr.

T is a casual observation; it is a matter-of-fact assumption; and, for all we know, it is US combat doctrine; but every time you do not kill determined enemies; they get harder to kill the next time around.

Meanwhile they get better at killing you. You get that from David Belavia’s war memoir, House to House, Stryker, Lions of Kandahar and other literary victories that the longest American war has at least produced, if nothing else.

The slaughter of our men at Ma-

masapano and the slaughter of half that number when the previous administration was hammering out the same peace agreement, which the Supreme Court struck down, raises the specter of an enemy harder to kill when we finally set our minds to it.

Meanwhile, the enemy gets better at killing us.

That is the problem with getting our soldiers killed without killing a far greater number of the enemy. By the time the Republic comes to its senses, the enemy will have taken as

much of our country as they want because we won’t be able to stop them.

The only way to stop them is never to let them try; and the only way not to let them is to keep fighting them.

The only way to fight well is to keep fighting. The only way to win is to keep winning as we did under Marcos, Ramos and Estrada.

Unjustly fired Special Action Force chief Napeñas’s assurance that his boys killed 5 times their casualties is, therefore, good news.

If true, it reveals an advantage we

must exploit. If anyone tells you different she is working for the enemy.

If there are terrorist attacks from the south on peaceful population centers elsewhere in our country, mainly Manila, it will be the fault of this government. A government that let’s murderers get away with murder and a Congress that wants to blame everybody but the murderers is begging for this to happen. Because if the enemy can do it, they will do it; nothing will hold them back because they will come to

believe that nothing can hold them back. Our military is so accustomed to failure that failure is all we and the enemy expect. And that emboldens the enemy and boldness brings victory.

We need a new Army; but those who lost the old one cannot create it. We need better fighting forces; but those who weakened the one we have, with blame and confusion, cannot be trusted to give it to us.

We need a savior and he must ride a horse.

Israel’s obsession for monopoly on Middle East nuclear power U Bloomberg View Thalif Deen

NITED NATIONS—As the Iranian nuclear talks hurtle toward a March 24 deadline, there is renewed debate among activists about the blatant Western double standards underlying the politically heated issue, and more important, the resurrection of a longstanding proposal for a Middle East free from weapons of mass destruction (WMD).

Asked about the Israeli obsession to prevent neighbors—first and foremost Iran, but also Saudi Arabia and Egypt—from going nuclear, Hillel Schenker, co-editor of the Jerusalembased Palestine-Israel Journal, told Inter Press Service (IPS), “This is primarily the work of Prime Minister Benjamin Netanyahu, who has built his political career on fanning the flames of fear, and saying that Israel has to stand pat, with a strong leader [him] to withstand the challenges.”

And this is the primary motivation for his upcoming and very controversial partisan speech before the US Congress on the eve of the Israeli elections, which has aroused a tremendous amount of opposition in Israel, in the American Jewish community and in the US, in general, he pointed out.

Iran, which has consistently denied any plans to acquire nuclear weapons, will continue its final round of talks involving Germany and the five permanent members of the UN Security Council: the United States, Britain, France, China and Russia (collectively known as P-5, plus one).

Last week Iranian President Hassan Rouhani asked the US and Israel, both armed with nuclear weapons, a rhetorical question tinged with sarcasm: “Have you managed to bring about security for yourselves with your atomic bombs?”

The New York Times quoted the Washington-based Arms Control Association as saying Israel is believed to have 100 to 200 nuclear warheads.

The Israelis, as a longstanding policy, have neither confirmed nor denied the nuclear arsenal. But both the US and Israel have been dragging their feet over the proposal for a nuclear-free Middle East.

Bob Rigg, a former senior editor with the Organization for the Prohibition of Chemical Weapons (OPCW), told IPS the US government conveniently ignores its own successive National Intelligence Estimates, which represent the consensus views of all 13 or so US intelligence agencies, that there has been no evidence, in the period since 2004, of any Iranian intention to acquire nuclear weapons.

“If Israel is the only nuclear possessor in the Middle East, this combined with the US nuclear and conventional capability, gives the US and Israel an enormously powerful strategic lever in the region,” Rigg said.

He said this is even more realistic, especially now that Syria’s chemical weapons (CW) have been destroyed.

They were the only real threat to Israel in the region.

“This dimension of the destruction of Syria’s CW has gone strangely unnoticed.

Syria had Russian-made missiles that could have targeted population centres right throughout Israel,” said Rigg, a former chairman of the New Zealand Consultative Committee on Disarmament.

A question being asked by military analysts is: why is Israel, armed with both nuclear weapons and also some of the most sophisticated conventional arms from the US, fearful of any neighbour with WMDs? Will a possibly nuclear-armed Iran,

or for that matter Saudi Arabia or Egypt, risk using nuclear weapons against Israel since it would also exterminate the Palestinians in the Israeli-occupied territories? Ask nuclear activists.

Schenker told IPS: “I believe that if Iran were to opt for nuclear weapons, the primary motivation would be to defend the regime, not to attack Israel.

Still, it is preferable that they not gain nuclear weapons.”

Of course, he said, the fundamental solution to this danger would be the creation of a WMD Free Zone in the Middle East.

That will require a two-track parallel process: One track moving towards a resolution of the Israeli-Palestinian conflict, and the other track moving towards the creation of a regional regime of peace and security, with the aid of the Arab Peace Initiative (API), within which a WMD Free Zone would be a major component, said Schenker, a strong advocate of nuclear disarmament.

As for the international conference on a nuclear and WMD free zone before the next NPT (Nuclear Non-Proliferation Treaty) Review Conference, scheduled to begin at the end of April in New York, he said, the proposal is still alive.

In mid-March the Academic Peace Orchestra Middle East initiative will convene a conference in Berlin, whose theme is “Fulfilling the Mandate of the Helsinki Conference in View of the 2015 NPT Review Conference.”

It will include a session on the topic featuring Finnish Ambassador Jaakko Laajava, the facilitator of the conference, together with governmental representatives from Israel, Saudi Arabia, Egypt and Germany.

There will also be an Iranian participant at the conference, Schenker said.

Rigg told IPS Israel’s first Prime Minister Ben Gurion wanted nuclear weapons from the outset. Israel was approved by the new UN, which then had only 55 or so members. Most of the developing world was still recovering from World War II and many new states had yet to emerge.

He said the US and the Western powers played the key role in setting up the UN “They wanted an Israel, even though Israeli terrorists murdered Count Folke Berdadotte of Sweden, the UN representative who was suspected of being favourable to the Palestinians,” Rigg said.

The Palestinians were consulted, and said no, but were ignored, he said. Only two Arab states were then UN members.

They were also ignored. Most of today’s Muslim states either did not exist or were also ignored.

“When the UN approved Israel, Arab states attacked, but were beaten off. They did not want an Israel to be transplanted into their midst. They still don’t. Nothing has changed. ” Given the unrelenting hostility of the Arab states to the Western creation of Israel, he said, Israel developed nuclear weapons to give itself a greater sense of security.

“If Israel lost its regional monopoly on nuclear weapons, it would be vulnerable. So the US goes all out to block nuclear weapons—except for Israel,” he added. Not even Israel argues that Iran has nuclear weapons now.

“A NW free zone in the Middle East is simply a joke. If Israel joined the nuclear Non-Proliferation Treaty [NPT], it would have to declare and destroy its nuclear arsenal.”

The US finds excuses to avoid prodding Israel into joining the NPT. The

US is effectively for nuclear proliferation in the Middle East, but successive US presidents have refused to publicly say that Israel has nuclear weapons, he added.

Because of all this, a NWF zone in the ME is not a real possibility, even if US President Barack Obama and Netanyahu are at each other’s throats, Rigg said.

Schenker said Netanyahu’s comments come at a time when the 22-member League of Arab States, backed by the 57-member Organisation of Islamic Cooperation (OIC) have, since 2002, presented Israel an API. The API offers peace and normal relations in exchange for the end of the occupation and the establishment of a Palestinian state in the West Bank, Gaza, with East Jerusalem as its capital, and an agreed upon solution to the refugee problem.

This doesn’t mean that the danger of nuclear proliferation isn’t a problem in the Middle East, Schenker said.

“As long as Israel has retained a monopoly on nuclear weapons, and promised to use them only as a last resort, everyone seemed to live with the situation.”

The challenge of a potential Iranian nuclear weapons program would break that status quo, and create the danger of a regional nuclear arms race, he noted.

Unfortunately, the global community is very occupied with the challenge of other crises right now, such as Ukraine and the Islamic State.

“So it is to be hoped the necessary political attention will also be focused on the challenges connected to the upcoming NPT Review conference, and the need to make progress on the Middle Eastern WMD Free Zone track, as well,” he declared.

Kennedy and Reagan lead overrated list of US presidents

By Jonathan Bernstein Bloomberg View

J

UST in time for the Washington’s birthday holiday, two political scientists are ready to release the results of a presidential greatness survey of presidency scholars (full release on Monday), and I got a sneak peak.

I really like the survey, conducted

by Justin Vaughn of Boise State University and Brandon Rottinghaus of the University of Houston. I like that they asked about skills, specifically legislative, diplomatic and military abilities. That’s a good approach for political scientists to take.

No big surprises at the top: Abraham Lincoln, George Washington and Franklin Delano Roosevelt led the pack by a comfortable margin.

The rest of the top 10 are Teddy

Roosevelt, Thomas Jefferson, Harry Truman, Dwight Eisenhower, Bill Clinton, Andrew Jackson and Woodrow Wilson.

Some of the other headlines: Barack Obama ranks mid-pack at 18th, just behind George HW Bush and ahead of James Polk. His average “overall greatness” rating, on a zero to 100 scale, comes in at 58, just a bit above average. Obama scores well on “integrity,” but only a little above average on legislative, diplomatic and military skills. He’s also rated the second-most polarizing (behind George W. Bush).

George W. Bush isn’t popular among political scientists who study the presidency; his “overall greatness” average is just 37, placing him 35th, the lowest score of any president since Herbert Hoover. On legislative skill and integrity, Bush does

OK, just a bit above average, but is rated well below average in military and diplomatic skills.

Who do political scientists like?

When these rankings are compared to an average of recent scholar opinion compiled by Nate Silver, Bill Clinton is a big winner; he’s ranked No. 8 in the new survey, but only 18th by the historians and others who participated in those earlier efforts.

Also doing well are George H.W. Bush (17 here, 22 in Silver’s compilation); William Howard Taft (20th versus 25th); Martin Van Buren (25th versus 31st); and Benjamin Harrison (29th versus 34th).

Who do political scientists dislike? Again, compared to other recent surveys, John F. Kennedy drops to 14th from ninth. The other droppers are Ulysses Grant to 28 from 23, and Richard Nixon to 34 from 29.

Vaughn and Rottinghaus also asked which presidents were overrated and underrated. It’s a tricky question because it requires an appraisal of how presidents are “rated,” which is always tricky. But I think it gets at how political scientists look at presidents compared to how they think others do (though, again, the question didn’t ask who was setting the conventional wisdom).

Overrated? The ones getting the most mentions were Kennedy, Ronald Reagan, Jackson, Wilson and Jefferson. Most mentions for underrated were Eisenhower, George H.W. Bush and Truman.

A big caveat is that making these rankings is more like a fun game than serious scholarship (though studying people’s perceptions, including those of scholars, may well be very serious scholarship).

My list of overrated would include Kennedy, Reagan and Wilson, and perhaps Jackson, but I’d add Jimmy Carter and Richard Nixon. For underrated, I usually say Grant, but I’ve also sometimes added Harding and Ford. I do wonder whether those suggesting that Ike and Truman are underrated are behind the curve by a few decades about how those presidents are viewed.

When I do these ratings, I tend to emphasize skills more than anything. I ask how good they were at presidenting, not whether I agree with their policies or not. But in practical terms, it’s sometimes hard to separate those things, especially for the presidents I’m less familiar with.

As I said, a fun game for the holiday weekend, and thanks to Justin for the early look at the survey.

NewsSunday

A6 Sunday, February 15, 2015 • Editor: Vittorio V. Vitug

BusinessMirror

Malacañang assures continued assistance to families of Fallen 44

M

By Joann Santiago Philippines News Agency

ALACAÑANG on Saturday said help continue to pour in to families left behind by the Fallen 44 who died while on a mission to arrest terrorists hiding in Mindanao.

In a statement on Saturday, Palace Spokesman Edwin Lacierda said “all available mechanisms of the national government are in motion to ensure the well-being of the families.”

He said families of the National Police’s Special Action Force (SAF) troopers who were killed have been provided with financial assistance from the President’s Social Fund (PSF).

The Department of Labor and Employment and the Technical Education and Skills Development Authority (Tesda) are also coordinating with the families for skills matching of working-age members and for training of those who want to undergo a Tesda program.

Children of the SAF commandos, who are in the elementary and secondary levels, are covered under the National Police Commission’s (Napolcom) existing scholarship program, while the Commission on Higher Education (CHED) will take care of the educational needs of those in the college level, Lacierda said.

Likewise, the Office of the Executive Secretary will recommend a mechanism to provide educational assistance to dependents not covered by the Napolcom or CHED programs through the PSF. L ac ierd a sa id gover nment agencies that can provide jobs to the SAF members’ families have been in touch, with some already

providing employment.

“The government is also reaching out to the private sector to recommend the employment of relatives of the SAF troopers,” he said.

Livelihood assistance is now under way as the Department of Social Welfare and Development helps the families “determine the best path for them” while the Department of Trade and Industry is “studying the respective areas of residence of the families to see which businesses are feasible.”

The Department of Health is also currently conducting diagnostic procedures to the policemen’s family members who requested for tests, while Philippine Health Insurance Corp. is now studying ways to ensure the dependents’ continued membership.

Requests for assistance for Social Security System’s benefit claims, for fishing and farming equipment, for facilitating transfer of relatives in the uniformed service, as well as housing needs are currently being looked into.

“The national government will continue working until we have made sure that the futures of the bereaved families are secured,” Lacierda said.

Quest for Mindanao peace

MALACAÑANG, meanwhile, said

lawmakers should not lose the perspective of attaining a lasting peace in Mindanao as they investigate the bloody Mamasapano clash that killed 44 SAF commandos more than two weeks ago. The House leadership said that because of the investigation on the encounter and the effects on lawmakers’ perception about the peace process, the Bangsamoro basic law (BBL) can no longer be passed in the first quarter of the year.

The BBL may stay in the back burner until late this year or early next year, it said.

Lacierda admitted that it would be hard to discuss the BBL right now given the emphasis of Congress on the investigation on the Mamasapano incident.

“But I hope that as we continue to seek accountability, let us not lose focus on the importance of finding a peaceful solution,” Lacierda said. “ The Mamasapano incident may provide some context to the Bangsamoro basic law bill being deliberated and...siguro kailangan tingnan ito, at kung ano ang kailangan nilang ma-improve sa bill, pagusapan, dahil mahalaga naman that we move forward.”

The ongoing inquiry must seek accountability but it also needs to look at what will happen to Mindanao in

the long term, he said, adding that Congress has to come up with a BBL. “Kung ano sa tingin nila ang kailangang pagbabago doon sa Bangsamoro basic law, gawin po nila. Pero huwag tayong tumigil sa ating perspective, sa ating focus na kailangan tayong magkaroon ng isang just and lasting peace sa Mindanao,” he said.

Some lawmakers said the unfortunate Mamasapano incident eroded some support because of the brutality of the killings, as well as the large number of casualties on the government side.

Lacierda said the MILF could regain the thrust of the people if it returns the weapons seized from the dead commandos and honor its pledge to help the government capture Basit Usman, one of the targets of the January 25 SAF operation in Maguindanao.

He added that the appearance of Moro Islamic Liberation Front chief negotiator Mohagher Iqbal at the Senate investigation this week was a positive development.

The Palace official also said that he does not know what the MILF is doing at this time with regards to apprehending Usman, but the group should show sincerity that it is a true government partner in the peace process.

WHO: Transfer of MERSCoV requires close contact

By Leilani S. Junio Philippines News Agency

T

HE World Health Organization (WHO) said over the weekend that Middle East Respiratory Syndrome Corona Virus (MERSCoV) is a disease that is not easy to be transferred from one person to another.

“The disease [referring to MERSCoV] is very difficult to spread from one person to the next. It is a disease that you do need close contact for that virus to spread from one person to the next,” said Julie Hall, WHO country representative.

Hall added that even in Saudi Arabia and the United Arab Emirates, where there are more cases of MERSCoV, the spread to thousands of people is very rare.

“So it is really is a disease that requires close contact with someone who is sick with it. Which is why the measures taking place in the hospitals are the most important,” Hall said as she praised the efforts of Evangelista Hospital in San Pedro City, Laguna, which conformed with the recommendation to undergo “disinfection” of the hospital’s facility after a patient was diagnosed with th disease.

She lauded the hospital for its cooperation, vigilance and willingness to temporarily close for the next 14 days as the WHO and the Department of health (DOH) will be doing their own form of disinfection.

“That was a big sacrifice on their [Evangelista Hospital] part. But they

agreed just to sow calmness among the residents in the area and to ensure that there is no reason to panic,” Health Acting Secretary Janette L. Garin said, adding that the DOH is on top on the situation and doing its best to the control any possible local transmission, with close coordination with other agencies and local health units.

Garin added that 56 persons who had close contacts with the patient were located and have undergone first round of testing using nose and throat swab samples.

Garin also said that the 11 “symptomatic patients” who had shown flu-like symptoms “since it is a fluseason,” will be further evaluated and recommended to undergo another round of tests using sputum and rectal swab samples.

Flu-like symptoms are fever, cough, and difficulty of breathing.

Aside from the 11 others who had close contact with the patient, the husband and mother-in-law were also being monitored since they are among those that has the probability of closer exposure to the patient.

The WHO and the DOH said the second round of tests are vital to ensure that the symptoms are not MERSCoV and in case it is, proper treatment can be given to ensure that local transmission will be under control.

To further discourage panic, the DOH, WHO, together with the local government officials of San Pedro City, conducted community assem-

blies to explain to the people what the DOH is doing to fight MERSCoV. The DOH also asked the cooperation of the public to be vigilant for the flu-like symptoms and asthmalike symptoms among the travelers who came from Middle East region.

Evangelista Hospital, where the confirmed MERSCoV-afflicted Filipino female nurse who arrived recently from Saudi Arabia, was the private hospital where the patient initially sought consultation prior to confinement at Research Institute for Tropical Medicine (RITM) in Alabang, Muntinlupa City.

It was reported that a sort of panic spread in the town when tricycle drivers saw hospital staff members wearing masks which prompted other residents to buy and use masks.

This resulted in parents’ refusal to send their children to school.

Through the cooperation with the Department of Education, the DOH, the local government and other local health units, San Pedronians were told not to panic and explained that the disease requires close contact with the infected person.

It was in RITM where the patient was confirmed positive with MERSCoV after undertaking series of three confirmatory testing which all yielded positive results.

To date, out of the 220 co-passengers of the patient who arrived in the country on February 1, 92 had signified willingness to undergo testing not only to protect themselves but also members of their families.

L

Brightspace will, likewise, aid in personalizing the student experience and engaging learners through various engines, applications and game-based learning services. It will also assist in performing data analytics to help teachers take learning to the next level and accelerate student success.

“Our recent foray into the e-learning space in the country with our Education Solutions is pushing the boundaries in learning innovation, with D2L as one of our world-class partners. Through the use of leading technologies such as Brightspace, we can work closely with our local educators in trans-

forming the full spectrum of our education systems, from K to 12, universities, corporations, including those offering continuing and life-long learning,” Globe President Ernest L. Cu said.

For his part, D2L President John Baker said, “At D2L, our mission is clear: to transform the way the world learns. Through our partnership with Globe, we hope to align with institutions throughout the Philippines, personalizing the learning experience for students and empowering educators with the industry’s most powerful tools to teach. We look forward to helping our mutual clients in the region ex-

briefs ‘casecnan river drying up’ BALER, Aurora—A ranking official of the Bugkalot tribes in the tri-boundary of Nueva Vizcaya, Quirino and Aurora has expressed alarm over the drying up of the Casecnan River which he blamed on the American operator of the $600-million buildoperate-transfer component of the Casecnan Multipurpose Irrigation and Power Project.

Rocky Valderama Jr., a member of the board of directors of the Confederation of Bugkalots in Aurora, Nueva Vizcaya and Quirino, accused the California Energy Casecnan Water and Energy Co. Inc. (Cecweci) of diverting a huge volume of water from the Casecnan River causing it to dry up, affecting the Bugkalot families who rely on fishing for their livelihood.

“The Casecnan River has dried up. What remains is a trickle of water downstream,” Valderama said.

He blamed the sudden loss of water in the Casecnan River to Cecweci that allegedly used it, violating an agreement it entered into with the National Irrigation Administration before the dam was constructed that it would only utilize 1.6 percent of the 49 billion cubic meters of water in the river. PNA

npa vice commander nabbed INTENSIFIED security operations of units under Eastern Mindanao Command resulted in four encounters against New People’s Army (NPA) rebels and the capture of an NPA vice commander on February 12.

Maj. Ezra Balagtey, Eastern Mindanao Command spokesman said in a statement that troops from the Second Scout Ranger Battalion and the Lianga Police Station arrested two communist guerrillas in a checkpoint at the Samilia Detachment, Barangay Diatagon, Lianga, Surigao del Sur. The two, identified as Robert Laurente Rivas Jr., alias “Opos,” a rebel vice commander operating in the area and Jojean Alameda, were on their way allegedly to lay landmines when intercepted by government troops.

Recovered from their possession were an anti-personnel homemade bomb, a caliber .38 revolver, a blasting cap, 27 meters of firing wire for the landmine, a cellular telephone with SIM pack, two batteries for the telephone and cash money amounting to P520. PNA

BSP waives charges for handling old bank notes

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‘Selfie’ on Valentine’s

A couple takes a selfie at the replica of the Eiffel Tower which was installed for the love month on Bonifacio High Street in Taguig City. The original Eiffel Tower is in Paris, France, which is known as a place for love and romance. ALYSA SALEN

Globe partners with D2L to boost e-learning technology in PHL ISTED Globe Telecom Inc. has collaborated with e-learning solutions provider D2L Corp. to champion technology-powered education in the Philippines.

The Brightspace integrated learning platform will enable Globe’s education client to go beyond simply managing learning with technology and transform the learning experience for students.

Instructors using the Brightspace platform are able to save time, boost efficiencies in course development, increase student engagement, push adoption of advanced multimedia and facilitate learning anytime, anywhere.

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cel and to see more learners reach their full potential.”

The Globe-D2L alliance foresees mutual growth for both companies by enriching and evolving each other’s products and solutions, as well as working together to capitalize on their strengths in the realm of education toward possible expansion in Asia.

Baker said that it forges alliances with thought-leading organizations such as Globe to elevate learning through data-driven technology.

This will help deliver a personalized experience to every learner, regardless of geography or ability.

The Brightspace platform is

currently enabling educational and corporate institutions worldwide, including the New York City Department of Education in the US, Singapore Management University in Singapore, the UAE National Research and Education in the United Arab Emirates, Deakin University in Australia, Saudi Arabia’s Umm al Qura University and Al Majmaah University, Brazil’s Fundação Getúlio Vargas, and United Kingdom’s Nottingham Trent University. D2L’s open and extensible platform serves higher education, K to 12, health care, government, and the enterprise sector which includes Fortune 1000 companies. Lorenz S. Marasigan

HE Bangko Sentral ng Pilipinas (BSP) has waived the fees for the withdrawal and deposit of old bank notes this year.

In a memorandum addressed to all authorized agent banks, the central bank officially said that it has exempted the deposit and withdrawal of old banknotes named New Design Series (NDS) from the imposition of service fees.

In particular, deposit transactions of all old note denomination will have no fees up until end-2016.

No fees will be imposed for the withdrawal of P200 bills, until the end of March this year. The BSP, at the end of 2014, announced the demonetization of old currency designs until 2016. “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 earlier.

The old bank note currency design, or collectively branded as the New Design Series (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. Bianca Cuaresma

RegionsSunday BusinessMirror

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Sunday, February 15, 2015

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Investors plunked ₧11B to Davao Norte in 2014

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By Manuel T. Cayon | Mindanao Bureau Chief

AVAO CITY—The province of Davao del Norte earned P11.194 billion last year from big investors as the local government stepped up the implementation of its investment code to encourage more business prospects.

Romeo Castañaga, acting chief of the provincial Department of Trade and Industry said the income placed the province in the top investment spot in the region last year.

T he fou r b i g - t ic k e t p ro j ects with a combined worth of P11.194 billion were the P5.724-

billion seaport and container yard project of the Hijo International Port Services Inc., the P2.7-billion mall project of the Robinsons Land Corp. both in Tagum City, the P2.653-billion international container terminal of the Anflocor-owned San

Vicente Terminal and Brokerage Services in Panabo City, as well as the P116.210-million Oakwood Residences undertaken by the HLC Construction and Development Corp. also in Panabo City.

Castañaga said the four big projects accounted for 76 percent of all investments registered in the Board of Investments (BOI) last year.

Businesses registered with the BOI could avail of incentives from the national government.

Gov. Rodolfo del Rosario said the province “is poised to sustain its lead as the top investment haven in the Davao region, with the formulation of the rules implementing its Local Investment and Incentives Code.”

The legislation could become landmark legislation, he said, as he requested the Provincial Board to prioritize the proposal.

The governor said he wanted the passage of the proposal “to strengthen the province’s preparation for the Asean regional economic integration this year.”

The Davao del Norte Investment Promotion Center led the crafting of the implementing rules. It was being assisted by the Canadian government-funded Local Governance Support Program for Local Economic Development.

The implementing rules of the investment code cover features like integration of global themes, promotion of sustainable agriculture, and the expansion of coverage and non-fiscal incentives.

He said more investments would mean “accelerated economic progress, provide employment opportunities, increase revenues, reduce poverty, and ultimately improve the quality of life of the people.”

Several legislators still committed to peace negotiations with MILF

By Jovee Marie N. dela Cruz

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EVERAL lawmakers over the weekend reiterated their commitment to the peace talks with the Moro Islamic Liberation Front (MILF) despite the January 25 gun battle that saw 44 troopers of the National Police’s Special Action Force (SAF) killed by joint MILF fighters, Bangsa Moro Islamic Freedom Fighters gunmen and other groups.

Party-list Rep. Jonathan de la Cruz of Abakada, Liberal Party Rep.

Romeo Acop of Antipolo City and National Unity Party Rep. Tupay Loong of Sulu said there is a need to pursue the talks to achieve lasting peace in Mindanao.

“Well, we’ll just have to work out the best constitutionally acceptable law. After all, the BBL [Bangsamoro basic law] is not the end to attain peace and development in Mindanao and the entire country,” de la Cruz said.

Acop, a retired police director and former National Police comptroller, said peace talks are the only solution

to the problems in Mindanao.

“I recommend that peace talks must always prevail. However, we cannot talk of peace without giving justice to the victims [of the SAF massacre] and their loved ones,” Acop said.

Last week the House Ad Hoc Committee on Bangsamoro Basic Law chaired by Puwersa ng Masang Pilipino Rep. Rufus Rodriguez of Cagayan de Oro indefinitely suspended its deliberations on the proposed BBL pending the lower chamber’s investigation of the Mamasapano,

Maguindanao, incident.

The BBL aims to create the new Bangsamoro juridical entity replacing the Autonomous Region in Muslim Mindanao.

Rodriguez admitted that the lawmakers support for the BBL has been eroded following the Mamasapano encounter between SAF and Moro rebels.

The lower chamber is set to resume its investigation on Mamasapano gun battle on Tuesday and Wednesday.

Manaoag church to be declared minor basilica

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ANAOAG, Pangasinan— Thousands of people have started to converge in this town, best known as a pilgrimage center of the north, to witness the unfolding of two major events of regional and worldwide significance.

Chief Insp. Edison Revita, chief of police of Manaoag, said the two events are the Region 1 Athletic Association (IRAA) meet from February 15 to 21 and the solemn proclamation of the Our Lady of the Rosary of Manaoag Church into a minor basilica from February 14 to 17.

Anticipating thousands of people to flock to Manaoag for the twin events, the municipal government, headed by Mayor Kim Amador, has set up a traffic rerouting scheme before, during and even after the two activities.

Some 65 bishops and 1,000 priests locally and abroad are expected to come for the church event.

Revita has sought an augmentation force to beef up the more than 40-police force from the Pangasinan Police Office, Police Regional Office and even from the Philippine Army.

In the afternoon of February 17, the Shrine of Our Lady of the Rosary of Manaoag will be formally proclaimed as a “Minor Basilica.”

A long-awaited event, which is expected to be attended by the Catholic community, is the solemn proclamation of the Manaoag into a basilica minor . The church has been proclaimed by Pope Francis in Rome on October 11, 2014.

The 1989 Vatican document Domus Ecclesiae declares, “Minor, or lesser, basilicas are significant churches in Rome and elsewhere in the world that meet certain criteria and are given special ecclesiastical privileges.”

Minor basilicas are traditionally named because of their antiquity, dignity, historical value, architectural and artistic worth, and/or significance as centers of worship. At the same time a basilica must stand out as a center of active and pastoral liturgy. PNA

Mindanao planners eye reopening of Davao and Indonesia air linkage

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AVAO CITY—Government planners for Mindanao would seek the reestablishment of the air link between this city and Manado, Indonesia, and this time will offer medical, education and tourism destinations to the Indonesian market.

Unlike before when exchange of mostly agriculture and small retail on personal goods and food items marked the unsteady air traffic served by Indonesia’s Bouraq Airlines and later by two Indonesian budget airlines, Filipino planners from the Mindanao Development Authority (MinDA) proposed the development of a market strategy to repackage Mindanao.

The MinDA announced that “a multistakeholder group from Mindanao and Indonesia is poised to revive the air connectivity between Mindanao and Manado, in North Sulawesi, starting off with a market-development strategy for the Davao-Manado route.”

On the Philippine side, the MinDA announced it already gathered “key players from tourism, trade, academe and government line agencies to reestablish the connectivity between the two BIMP-Eaga cities,” “We must package Mindanao based on the needs of our target market from North Sulawesi, while capitalizing on our high-value offerings such as our medical, education, and tourism sectors,” said Capt. Ben Solis, senior advisor of the Asia Foundation.

BIMP-Eaga stands for Brunei Darussalam, Indonesia, Malaysia, the Philippines-East Asean (Association of Southeast Asian Na-

tions) Growth Area. The economic grouping was formed in 1994 from among the backwater regions of the four countries.

A BIMP-Eaga strategic planning meeting will be conducted from February 15 to 18 at the Royale Chulan Hotel in Kuala Lumpur, Malaysia, “in which initiatives to reopen the Davao-Manado route will be discussed,” said Jonathan Miral, chief of MinDA’s International Relations Division.

“It is best to start offering regular and reliable flights to passengers instead of the usual chartered flights,” Solis said.

MinDA is pushing for more air links between the Philippines and its Eaga counterparts and “maximize the travel-tax exemption approved by the Philippine government for travelers from Mindanao and Palawan heading to any of the BIMP-Eaga destinations”.

MinDA serves as the Philippine national secretariat for BIMP-Eaga and coordinates with the Department of Tourism and the Manado Transport and Tourism Ministry in developing the market for the Davao-Manado linkage.

Miral said the stakeholders’ meeting wanted to ensure “new and more promising approach to establishing the connectivity between Mindanao and North Sulawesi [which was] always challenged [with] sustaining the passenger traffic.”

Among the strategies to be pursued to promote the Davao-Manado route are the development of tour packages, business matching, trade sessions, and student-exchange programs. Manuel T. Cayon

Sobrepeña assures protection of Camp John Hay locators

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Vegetable bouquet

A new innovation by Anthoniuz Paulite, a creative florist in Baguio City, is a bouquet of Ilocano vegetables like eggplants, saluyot, okra, squash flowers and malunggay accented with ribbons and heart pins. This dinengdeng bouquet is targeting romantic vegetarians and environmentalists who want their vegetables and eat them, too. MAU VICTA

DENR moves vs pollution from agri waste

By Jonathan L. Mayuga

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HE Department of Environment and Natural Resources (DENR) recently forged ties with the Tarlac College of Agriculture (TCA) to train farmers on proper management of agricultural waste, considered a major pollution hazard.

The DENR-TCA partnership is an important step toward addressing environmental problems associated with improper management of waste from farm operations, Director Jonas Leones of the DENR’s Environmental Management Bureau said.

“We need to train our farmers on how to properly manage agricultural waste in order to reduce risks to the environment, as well as human health,” Leones said.

Leones signed an agreement in behalf of Environment Secretary Ramon JP Paje. TCA President Dr. Max Guillermo signed for the college.

Under the agreement, the TCA will put up Satellite Ecology Center within its campus in Camiling. The TCA will also develop and hold short-term training courses on ecological solid-waste management for farmers, as well as other stakeholders.

The DENR will provide an initial fund of P300,000 for TCA to develop training modules and conduct the training.

Aside from farmers, the TCA will also train government workers, teachers, agricultural technicians and junk-shop owners on solid-waste management.

Leones said the undertaking was expected to develop an “army of ESWM

trainers,” who use existing technologies and innovations aimed at reducing waste in the agricultural sector.

Republic Act (RA) 9003 defines agricultural wastes as those “generated from planting or harvesting of crops, trimming or pruning of plants and wastes or runoff materials from farms or fields.”

The most common agricultural wastes in the Philippines are rice husk, rice straw, coconut husk, coconut shell and bagasse.

Waste from farm operations can pollute the environment resulting in impacts to water quality.

The signing of the DENR-TCA deal was among the highlights of the 14th anniversary celebration of the implementation of RA 9003, or the Ecological Solid Waste Management Act, held recently at the DENR central office in Quezon City.

HE Camp John Hay Development Corp.

(CJHDevCo) on Saturday assured subleases and sub-locators at Camp John Hay that the rights and interests would be protected and respected.

“Rest assured that the rights and interests of subleases and sub-locators in Camp John Hay will continue to be respected and protected. The BCDA [Bases Conversion and Development Authority] consented to all subleases within the camp when it expressly gave, in the lease agreement itself, CJHDevCo the right to sublease various areas and real-estate inventory therein,” CJHDevCo Chairman Robert Sobrepeña said.

While the lawyers of CJHDevCo are currently studying legal options, Sobrepeña noted that the Philippine Dispute Resolution Center Inc. (PDRCI) has found the BCDA to be in breach and CJHDevCo was absolved of liability for the supposed back rentals.

“We are pleased that the arbitral tribunal dismissed the BCDA’s claim for back rentals which we have always maintained were never due,” Sobrepeña said.

“We are also grateful that the substantial rentals the company paid in the course of over more than a decade were ordered returned to CJHDevCo. But we would like to emphasize that we sought for arbitration,” he added.

In the meantime, Sobrepeña said, neither party can implement the award, without an order confirming the same and a writ of execution being issued by the court.

“Please note that the writ of

preliminary injunction enjoining the BCDA from taking over Camp John Hay remains in full force and effect unless the court orders otherwise,” Sobrepeña pointed out.

“We trust that, even with the issuance of the award, the parties will act in good faith and with due regard for the rights and interests of innocent third parties who are not involved in the dispute between CJHDevCo and the BCDA,” he added.

In its 274-page Final Award dated February 11, 2015, the three-man PDRCI also declared CJHDevCo as “not liable for any unpaid back rent” after it found both the BCDA and CJHDevCo of mutually committing breach of their contractual obligations, in connection with the development of the Camp John Hay in Baguio City “The claimant [CJHDevCo] is ordered to vacate the leased premises and promptly deliver the leased property, inclusive of all new constructions including permanent improvements introduced during the term of the lease as reckoned from the execution of the original lease agreement, to respondent in good and tenantable condition in all respects, reasonable wear and tear excepted,” the arbitral decision added.

“The respondent [BCDA] is ordered to return to claimant [CJHDevCo] the total amount of rentals claimant has paid in the total amount of P1,421,096,052,” the PDRCI said, adding, “claimant is hereby declared as not liable for any unpaid back rent consistent with the ruling that rescission and mutual restitution is proper in this case.”

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Deutsche Bank forecasts bigger loan growth this year and next

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By Genivi Factao

HE Deutsche Bank expects the loan growth of Philippine banks to hit 18 percent to 25 percent on the back of the positive outlook of the country’s gross domestic product (GDP) and benign inflation.

Deutsche Regis Partners Inc. research analyst Rafael Garchitorena also said he anticipates strong loan demand and benign nonperforming loans (NPLs).

“Loan-demand drivers remain robust. We remain reasonably sanguine on loan-growth prospects, with forecasts ranging from 18 percent to 25 percent for 2015, and 16 for banks under our coverage,” Garchitorena said.

Heading into 2015 and 2016, they expect an acceleration of growth, as the issue focused on government spending appears to have quieted down and that election spending will start to pick up in the second half of the year, ahead of the

May 2016 national elections.

Deutsche forecast GDP growth of 6.5 percent to 6.6 percent in 2015 and 2016.

They also expect continued strong investment in the powergeneration sector, as groups race to build capacity.

With robust loan growth, and increased regulation, the clear upside potential could come from a return to rational loan pricing.

The real-estate stress test and 60-percent loan-to-value rules would, in theory, restrict funds available to the property sector and potentially to small and medium enterprises. And the domestic systemically important

banks rules would make lending, in general, more expensive from a capital-allocation perspective.

Garchitorena said, however, that it is not happening yet.

“Could the raft of regulations be the splash of cold water that brings rationality back to loan pricing? Potentially, yes, but apparently not quite yet. Anecdotally, our bank contacts tell us that loanprice competition remains intense,” he said.

“We understand that some toptier corporations are still able to get short-term funding at less than 2 percent. This is below the risk-free special deposit account [SDA] rates of the BSP [Bangko Sentral ng Pilipinas] and it’s not just coming from the large banks either,” he added.

The lower inflation rate could also mean less pressure to tighten monetary policy, at least for a few quarters.

System-wide NPL ratios continue to improve.

As of September 2014, gross NPLs stood at 2.11 percent, a new low. The level of “distressed assets”—NPLs, plus foreclosures and restructured loans—also continues to fall, at 4.3 percent in September, compared to 5.4 percent a year ago and 4.6 percent the previous month.

Garchitorena: “Loan-demand drivers remain robust.” stephanie tumampos

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China orders heightened travel safety after deadly stampede

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EIJING—China has ordered stepped-up safety measures over the Lunar New Year travel rush, in the wake of terrorist threats and a December stampede in Shanghai that killed 36 people.

The government estimates about 2.8 billion trips will be made by train, bus, plane and car during the 40-day travel rush that began in early February and ends around March 15.

While the travel peak is always hectic, special measures have been put in place this year, including the posting of more armed security guards; restricted access to crowded areas such as train platforms; and the stationing of watchmen on elevated posts to keep an eye out for trouble.

A circular from China’s Cabinet posted on Saturday demanded greater attention to safety and threatened punishment for officials found lacking in their duties.

Shanghai fired four top officials and disciplined seven others

over the December 31 stampede in the city’s historic riverfront Bund area, saying that some of the officials were attending an opulent banquet as the disaster unfolded.

An investigation blamed the officials for failing to take proper precautions at the scene and for not responding fast enough to the disaster—the worst to hit China’s showcase financial center in recent years.

Authorities are also on guard against attacks blamed on ethnic Uighur extremists seeking independence for the northwestern region of Xinjiang. Rumors have circulated online about plots being planned against transportation sites, similar to the March 29, 2014, attack on a train station in the southwestern city of Kunming, in which 31 people were slashed and stabbed to death.

Beijing says that and other attacks were carried out by radicals inspired by extremist Islamist teachings. AP

OFW remittances, BPO earnings to buoy stable peso in 2015–Abad

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UDGET Secretary Florencio B. Abad has assured a stable peso rate at a range between 42 and 45 to a US dollar, despite the anticipated Federal Reserve (the Fed) increase in policy rates owing to the robust growth of the American economy this year.

Abad said that “domestic prospects” are firmly grounded to support a stable peso, despite the anticipated increase in the Fed on the account of the rosy forecasts on the US economy.

Abad, who chairs the Development Budget Coordination Committee (DBCC), said the “rosy domestic prospects,” such as stable remittances from overseas Filipino workers (OFWs) and rising investments from business-process outsourcing (BPO), will continue to buoy up a stable peso.

He added that the recommendation by the Bangko Sentral ng

Pilipinas (BSP) that was adopted by the DBCC is “to retain the mediumterm [foreign-exchange] assumption,” with peso range at 42 to 45 to a dollar in 2015.

A recent Reuters poll of 82 economists forecast US gross domestic product growing at an average 3.2 percent this year, the fastest since 2005. The optismism is expected to raise the Fed rate by 2015, as economists see the US economy’s fundamentals strong enough to outweigh the problems abroad, such as weakening Asian and European economies and the decline of crudeoil prices that has forced some businesses to either delay or cut back on capital expenditure.

“That level of [foreign-exchange] assumption will be kept up to 2018 as recommended by the BSP,” said Abad, adding that “the position of the BSP is that the peso may weaken but will continue to be stable.”

Some of the assessments presented to the DBCC, Abad said, include the peso-depreciation pressures to be triggered by capital outflows due to uncertainties in the global dynamics.

The global dynamic uncertainties include the anticipated hiking of the federal funds rate in 2015, as well as the monetary easing in European areas along with that of Japan.

But the budget chief said domestic prospects remain intact to ensure a stable peso buoyed by the steady remittances from OFWs and the continuing robust BPO earnings.

Abad added that the Philippine peso will remain stable amid the continuing increase in tourism receipts and the improving exports performance.

The series of investments upgrade on the Philippines, he said, “will also help [support a stable peso].”

Estrella Torres

Boracay invades Beijing metro rail

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STOP, IN THE NAME OF LOVE Even traffic lights in Bonifacio Global City celebrate Valentine’s Day with a heart-shaped red light. ALYSA SALEN

LOILO CITY—Images of the world’s 24/7 island, Boracay Island, covered the Metro Line 2 of Beijing Transport Metro, invading the railway transport of Beijing, China.

Boracay, Bohol and Palawan were featured in a roving visual gallery, delightfully surprising the commuters.

The interiors of Beijing’s Metro Line 2 train also carried the trainwrap images in posters, while the island-destination names were greatly emphasized on the train doors. The tropical images set as a reminder for the tourists on what are the ideal holiday choices for the Spring Festival this 2015.

“This is another benchmark in the tourism campaign of the Department of Tourism [DOT] promoting the different tourist destinations in the country. China remains one of the top foreign tourist markets of Western Visayas. We want to further strengthen Region 6’s position in this huge tourist market, which currently occupies the No. 2 spot in terms of foreign tourist arrivals for the last three consecutive years,” DOT Region 6 Director Helen J. Catalbas said.

The train-wrap project is scheduled to run for a month, and is a consumer-promotional effort of the Philippine DOT Beijing Office and the Tourism Promotions Board. PNA