BusinessMirror February 20, 2015

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

U.N. Media Award 2008

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Friday, February18, 20,2014 2015Vol. Vol.1010No. No.40134

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FIRMS ALREADY COMMITTED 739 MW TO D.O.E.’s INTERRUPTIBLE LOAD PROGRAM TO HELP AVERT POWER CRISIS

700-MW supply gap covered by ILP Isuzu urges oil firms to O hasten shift

By Lenie Lectura

ver 1,000 megawatts (MW) of additional powergenerating capacity will be available in the Luzon grid this summer, according to the latest data from the Department of Energy (DOE).

The DOE said 739.58 MW will come from its Interruptible Load Program (ILP), which attracted 252 participants. Some 15 more participants, which have a combined potential of 33.68 MW of deloading capacity, are expected to join the ILP. This is already enough to cover the expected 700-MW supply gap that is seen to result in rotating brownouts in Metro Manila in March.

The remaining 297 MW will be sourced from various power plants that are undergoing rehabilitation and uprating.

Power facilities that are expected to generate additional capacity from end-February up to May this year include the Limay combine-cycle (CC) power plant of Matsushita Electric Industrial Co. Inc., Bauang diesel power plant of First Gen, Botocan hydropower plant, Navotas diesel power plant of Millennium Energy Inc., the solar power project of Majestic CEZ and the Avion open-cycle natural-gas power plant of First Gen Corp.

The uprating of Limay CC and Bauang power facilities, with additional 36 MW and 20 MW, respectively, will be operational by early March.

Meanwhile, the rehabilitation of the 100-MW Navotas power plant is ongoing. It is expected to be Continued on A2

to ‘Euro 4’

I

pointed nuncio in Papua New Guinea and the Solomon Islands, and five years later to Pakistan.

Nine years later, he was named apostolic nuncio to Congo.

Yllana speaks English, Spanish, Italian and French.

Following his appointment, the Australian Catholic Bishops’ Conference (ACBC) thanked the pope and welcomed the Vatican envoy.

“Archbishop Yllana brings wide and diverse experience, great faith and priestly gifts. We assure him of

suzu Philippines Corp. is calling on oil companies to start developing so-called Euro 4-compliant fuels to be consistent with the car companies’ shift to more environment-friendly Euro 4 engines as mandated by the Department of Environment and Natural Resources (DENR).

“The DENR is advancing its scheduled adoption, but the Euro 4-compliant fuels have to be developed first before engine standards shift,” Arthur Balmadrid, senior vice president for sales at IPC, said at the Japanese car firm’s launch of the 2015 Crosswind in Pasay City on Wednesday evening.

The environment and natural resources office is eyeing an early implementation of the carbon-emission standard known as Euro 4 six months ahead of the original target date, or on the first day of January next year, a development posing a potential problem to car companies, as Euro 4 fuel is not yet as widespread.

The more environment-friendly Euro 4 emission standard mandates maximum sulfur content of just 50 parts per million (ppm), in contrast with the prevailing Euro 2 emission standard that allows for 500-ppm maximum sulfur content As early as 2010, the DENR issued an administrative order requiring passenger and light-duty vehicles to comply with Euro 4 emission limits

by January 1, 2016, subject to Euro 4 fuel availability.

Environment Secretary Ramon J.P. Paje, in September 2014, proposed to the Department of Energy (DOE) that the deadline be imposed six months ahead, or in June 2015, citing the

See “Envoy,” A2

See “Euro 4,” A2

WELCOMING THE YEAR OF THE SHEEP Members of the Philippine Lion King Dance Troupe perform the traditional dragon dance to celebrate Chinese New Year in Binondo—widely regarded as the world’s oldest Chinatown, which was established by the Spaniards in 1594. The Chinese believe that the dragon dance would bring good luck in the Lunar New Year. ALYSA SALEN

POPE APPOINTS PINOY AS ENVOY TO AUSTRALIA

By Claudeth Mocon-Ciriaco Correspondent

F

ilipino Archbishop Adolfo Tito Yllana has been appointed by Pope Francis as the new apostolic nuncio to Australia.

Y llana, who had previously served as the apostolic nuncio to the Democratic Republic of the Congo, replaced Archbishop Paul Gallagher. Gallagher has been appointed as the Vatican’s secretary for relations with states.

Yllana, 67, a native of Naga

PESO exchange rates n US 44.2790

HART: “Archbishop Yllana brings wide and diverse experience, great faith and priestly gifts.”

City, was ordained priest by the Archdiocese of Caceres in March 1972 and has a doctorate in Civil and Canon Law. After taking International Diplomacy at the Pontifical Ecclesiastical Service in Rome, he entered the diplomatic service of the Vatican and was named to his first post in 2001 as the nuncio to Papua New Guinea.

He had also served as the Holy See’s diplomatic representative on the Solomon Islands and Pakistan.

In December 2001 he was ap-

n japan 0.3712 n UK 67.9860 n HK 5.7081 n CHINA 7.0863 n singapore 32.6613 n australia 34.4262 n EU 50.5401 n SAUDI arabia 11.8036 Source: BSP (18 February 2015)

News

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Friday, February 20, 2015

A2

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700-MW supply gap covered by ILP tics CEZ would contribute some 21 MW once it goes on commercial operation also by end-February. Commissioning for the solar project is ongoing and now awaits the notice to operate from the National Grid Corp. of the Philippines.

The DOE said the Avion power project will be completed by April 15, but since it will be fired up by natu-

Continued from A1

completed by March 15, pending issuance of necessary permits and interconnection to the nearest transmission line facility.

By the end of this month, the Botocan facility is expected to be completed and will contribute 20 MW. The solar project of Majes-

Housing. . .

ral gas from the Malamapaya facility, which will undergo maintenance shutdown from March 15 to April 14, its 100-MW output will be available early May. There are other power plants that could help address the power shortage, but the DOE did not include these in its updated list because of uncertainty in their target schedule.

For instance, the Malaya Unit 1

Continued from A8

tween P800,000 and P900,000.

The midsegment condo projects are those with prices ranging from P1.5 million to P10 million, as the high-end customers are offered prices P10 million and higher.

“So, without the targeted subsidy, the very poor cannot afford [to buy housing units],” Ayco said. “The government has to intervene and provide subsidy so that the people can afford to buy what the private sector is going to produce.”

He cited, for instance, the relocation program involving 104,000 families from so-called danger areas near the waterways of Metro Manila, for which the government allotted P50 billion for their relocation to much safer sites.

Based on a World Bank study using these beneficiaries as reference, Ayco said they can only afford to pay P397 as monthly amortization on the housing unit.

“If you belong to the poorest of the poor, you will not pay the actual cost of the house, but only the 10-percent [interest],” Ayco said.

While this remains a suggestion,

housing units must be built between 2014 and 2016 and the next 2 million should be done until 2020.

“From 2020 to 2030, if I’m not mistaken, it should be 7 million so as to catch up with the projected backlog,” Ayco said.

However, he cited a UA&P survey indicating that more than 800,000 families cannot afford to buy a house even if these were priced at only P365,000.

This, Ayco said, was apparent in the mushrooming of numerous residential development projects, mostly catered to by the low- to highincome segments of the market.

“For any businessman who would like to have a return on his money, it does not make sense to build houses and sell it to the socialized sector. He might as well sell it at the better-paying sector, which are the low income, economic or even the high-end” segments, Ayco said.

Dwelling units for the low-income market are priced at around P600,000, while housing for the economic sector typically costs be-

Ayco said such has proven a success in South American countries, particularly in Ecuador, where families save 10 percent of their income that the government matches with a 20-percent grant, and the remaining 70 percent paid for by a loan from a partner bank.

“It’s really the bank funding [the program]. It’s not a pure dole out.

It’s an investment,” he said, noting the program first evolved in Peru, Chile and now in Brazil.

Since housing creates a big impact in the economy, Ayco called on the government to start investing in it given the resulting multiplier impact.

Studies show that 4.82 jobs are created for every P1 million invested in housing.

For every peso in housing tax paid, the government collects P3.39 in indirect taxes.

“Housing is one of the industries where local input is very high. In other words, it’s not a losing proposition. Solving a social problem, eventually, is just a bonus,” Ayco said.

could contribute an additional 300 MW. However, the facility is currently undergoing an overhaul and only 50 percent of rehabilitation work has, so far, been completed.

In July last year, Energy Secretary Carlos Jericho L. Petilla announced the probability of a looming power shortage of at least 700 MW that will affect Luzon during summer this year.

Subway. . .

FEBRUARY 20, 2015 | FRIDAY

TODAY’S WEATHER

TAIL-END OF A COLD FRONT AFFECTING EASTERN SECTION OF SOUTHERN LUZON. NORTHEAST MONSOON AFFECTING NORTHERN AND CENTRAL LUZON. (AS OF FEBRUARY 19, 5:00 PM)

Tail-end of a cold front is the extended part of the boundary, which happens when the cold air and warm air meet. This may bring rainfall and cloudiness over affected areas. It is felt at the northern hemisphere winter season.

SBMA/CLARK 22 – 31°C METRO MANILA 23 – 31°C

TAGAYTAY CITY 19 – 27°C

FEB 22 SUNDAY

23 – 31°C

22 – 31°C

TUGUEGARAO

20 – 29°C

20 – 28°C

20 – 30°C

20 – 29°C

Lao Construction consortium; ■ the P5.69-billion Modernization of the Philippine Orthopedic Center project that went to the Megawide-World Citi Inc. consortium also in 2013.

■ the P1.72-billion Automatic Fare Collection System contract awarded to the AF Consortium of Ayala and Metro Pacific Investments Corp. in 2014; ■ the P17.5-billion Mactan Cebu International Airport New Passenger Terminal project bagged in 2014 by Megawide Construction Corp. and GMR Infrastructures Ltd.; ■ the P64.9-billion Light Rail Transit Line 1 Cavite Extension deal, awarded in 2014 to Light Rail Manila Consortium of Ayala and MPIC; and ■ the P2.5-billion Integrated Transport System Southwest Terminal, won by Megawide and partner Walter Mart Property Management Inc. of billionaire and retail magnate Henry Sy in January.

The state intends to plug the gap in the country’s transportation systems over the next decade by rolling out massive infrastructure projects that are seen to spur economic growth.

FEB 23 MONDAY

TACLOBAN

21 – 29°C

22 – 30°C

22 – 31°C

20 – 29°C

CAGAYAN DE ORO

23 – 31°C

22 – 30°C

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22 – 32°C

23 – 32°C

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23 – 33°C

MOONRISE

22 – 31°C

22 – 30°C

ZAMBOANGA

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

PUERTO PRINCESA CITY 23 – 31°C

METRO CEBU 24 – 30°C

TACLOBAN CITY 24 – 28°C

CAGAYAN DE ORO CITY 22– 31°C

ZAMBOANGA CITY 22 – 33°C

PUERTO PRINCESA

ILOILO/ BACOLOD

23 – 30°C

SUNSET

MOONSET

6:18 AM

6:02 PM

7:24 PM

NEW MOON HALF MOON

FEB 19

23 – 31°C

23 – 32°C

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FEB 26

CELEBES SEA

5:58 AM

-0.09 METER 1:14 AM Partly cloudy to at times cloudy with rain showers and/or thunderstorms

24 – 31°C

24 – 31°C

Cloudy skies with rain showers Cloudy to at times cloudy with rain showers and/or thunderstorms

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

www.panahon.tv

SABAH

LOW TIDEMANILA HIGH TIDE

Partly cloudy to at times cloudy with rainshowers

24 – 30°C

7:03 AM

SOUTH HARBOR

7:47 AM

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

METRO DAVAO 23 – 32°C

SUNRISE 19 – 28°C

LEGAZPI CITY 25 – 30°C

ILOILO/ BACOLOD 23 – 32°C

FEB 23 MONDAY

20 – 28°C

23 – 31°C

23 – 29°C

FEB 22 SUNDAY

24 – 32°C

SBMA/ CLARK

23 – 30°C

urgent need to improve Metro Manila’s air quality.

The DENR also said early on that the more refined and ‘greener’ fuel under Euro 4 standards will come with a higher price tag.

Car firms themselves warned of “price adjustments” for models to be introduced after the adoption of Euro 4 standards as the shift will entail engine modifications to accept the new fuel.

Seaoil, Unioil and Petron are among the fuel companies reportedly offering fuel products that comply with the Euro 4 standards although the availability of Euro 4 is not yet as extensive and has not reached other significant car markets in the Philippines, such as those in the Visayas and Mindano.

IPC on Wednesday also unveiled its top-selling Asian utility vehicle, the Isuzu Crosswind 2015, available in Sportivo, X, XUV and XT variants. The variants’ price range from P750,000 to P1.1 million.

24 – 32°C

14 – 22°C

LEGAZPI

Continued from A1

24 – 31°C

14 – 22°C

19 – 29°C

Euro 4. . .

22 – 30°C

14 – 23°C

20 – 29°C

a warm and enthusiastic welcome upon his arrival and service here in Australia,” said Archbishop Denis Hart, ACBC president, in a statement.

At least four Filipinos serve as the pope’s envoy to different countries—Bohol-native Archbishop Bernardito Auza is currently the Vatican’s permanent representative to the United Nations and Archbishop Osvaldo Padilla, a Cebuano, is the apostolic nuncio to Korea. His brother, Archbishop Francisco Padilla, is the nuncio to Tanzania.

METRO CEBU

BAGUIO

TAGAYTAY

Continued from A1

FEB 21 3-DAY SATURDAY EXTENDED FORECAST

METRO DAVAO

TUGUEGARAO CITY 22 – 28°C

BAGUIO CITY 14 – 23°C

FEB 21 SATURDAY

METRO MANILA

LAOAG

LAOAG CITY 20 – 29°C

Continued from A8

volume of vehicular traffic traversing the major business districts. The 12-kilometer railway line will have 11 stations: two of which are elevated, five are underground and the other four are interchanges.

The project is one of the key infrastructure deals of the Aquino administration, which has awarded nine contract since the program’s inception in 2010, namely: ■ the P1.96-billion Daang HariSouth Luzon Expressway project bagged by Ayala Corp. in 2011; ■ the P16.42-billion first phase of the PPP School Infrastructure Program (PSIP), which went in 2012 to the consortium formed by Megawide Construction Corp. and Citicore Holdings Investment Inc., as well as the BF Corp.-Riverbanks Development Corp.

Consortium; ■ t he P15.68 -bi l l ion Ninoy Aquino International Airport expressway, given to San Miguel Corp. unit Vertex Tollways Development Inc. in 2013; and ■ the P3.86-billion PSIP Phase II contract, partially awarded in 2013 to Megawide and the BSP & Co., Inc.-Vicente T.

3-DAY EXTENDED FORECAST

The scarce energy reserve has pushed the government to come up with alternative solutions to avert its impact, which include the ILP for large commercial electricity consumers.

In response, private companies and organizations are now teaming up to help the government in mitigating or, ideally, preventing the disruption of power.

Nuncio. . .

@PanahonTV

11:25 PM

1.06 METER

The Nation BusinessMirror

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CIDG exec says Mamasapano incident probe nearly finished

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HE Board of Inquiry (BOI) of the Philippine National Police (PNP) created to investigate the death of 44 police commandos in Mamasapano, Maguindanao, already has a nearly complete picture of the incident.

Director Benjamin Magalong, chief of the Criminal Investigation and Detection Group and also head of the BOI, said they are almost done in their probe and they only need to get some more affidavits, including those from Director General Alan Purisima and PNP Officer in Charge Deputy Director General Leonardo Espina.

“Basically, we already knew what happened. From mission planning to execution and to termination, we already knew it,” Magalong said on Thursday, during the turning over of the firearms of the killed commandos to the PNP by the military.

Magalong said it is now up to the Department of Justice (DOJ) to decide whether it will use the surrendered firearms as evidence in its own ongoing probe to determine the criminal charges against those involved in the incident, and even against police officials involved in the operation that ended in the commandos’ death.

He clarified that the BOI is only a fact-finding body, and it is up to the PNP leadership to determine the administrative liability and even the decision to file administrative charges against police officials who may be liable over the death of the SAF personnel.

For the criminal aspect, possibly even against Moro Islamic Liberation Front (MILF) guerrillas who took part in the killing, Magalong said the DOJ is also in the process of determining such through its own investigation.

We are also working with the justice department, he added.

The BOI head said they were already 70-percent finished with the fact finding as of Thursday.

Aside from securing the affidavits of Espina and Purisima, Magalong said they also need to visit the site where the 44 died, possibly to reconstruct the event.

“We will go to Mamasapano because we already saw; we completed the picture of what happened. There are just claims, allegations and assertions that we need to validate, and we need to be on the site to know the environment at that time.”

While in Maguindanao, he said they would also try to talk to the involved fighters and commanders of the MILF if the Moro group will agree. Magalong said they have already relayed their intentions to talk to the MILF guerrillas allegedly involved in the killings.

We received a “positive feedback,” he said.

After their visit in Maguindanao, the members of the BOI would also make clarificatory questions with personalities that they have already interviewed in Cotabato City and from there, they would finally write their report. Rene Acosta

Aside from firearms, govt demands MILF to give up Usman, SAF killers

A

By Rene Acosta & Butch Fernandez

FTER returning some weapons police commandos lost in an ambush, the Moro Islamic Liberation Front (MILF) is now pressed by the Philippine National Police (PNP) to also surrender bomb expert Abdul Bassit Usman.

According to PNP Officer in Charge Deputy Director General Leonardo Espina, they welcome the surrender of firearms of the slain 44 members of the PNP’s Special Action Force (SAF).

The commandos were killed during operations targeting Usman and Jema’ah Islamiyah leader Zulkifli bin Bir, alias Marwan. Usman escaped, and both the PNP and the military claim he is being coddled or given protection by the MILF. The MILF surrendered the firearms on Wednesday to the Coordinating Committee on the Cessation of Hostilities (ccch) at the headquarters of the Army’s 6th Infantry Division in Maguindanao. These were brought to Manila by Armed

AFP to step in, stop MILF-BIFF clash

T

HE military will intervene to stop the sporadic clashes between the Moro Islamic Liberation Front (MILF) and the Bangsamoro Islamic Freedom Fighters (BIFF), as these already affected people in six North Cotabato villages.

Armed Forces of the Philippines (AFP) Chief of Staff Gen. Gregorio Pio Catapang Jr. said the fighting must stop as a growing number of families are leaving their homes for fear they might get caught in the middle of the skirmishes.

“We are coming in,” Catapang said, sans providing details on how the AFP would stop the fighting between the MILF and the BIFF, which the government said was due to a clan war.

The skirmishes between the two groups began on February 3 in Sitio Kalbugan, Barangay Kabasalan in the town of Pikit wherein a top commander of the MILF was reportedly killed.

Minda Morente, director of the Office of Civil Defense Region 12, said the fighting has already affected 10, 664 persons in the villages of Kabasalan, Rajamuda, Barungis, Buliok, Bulol and Bagoinged as of Wednesday.

Catapang said the situation must be deescalated so that it will not fan out to other areas.

However, pacifying the two groups would be a big headache for the military.

CATAPANG: “We are studying as to how we can pacify the two groups.”

“We are studying as to how we can pacify the two groups,” Catapang said.

Both the MILF and the BIFF have been involved in the ambush-killing of 44 police commandos in Mamasapano, Maguindanao.

Catapang said it was because of a rido, or a clan war, that the MILF and the BIFF ended up fighting each other. Rene Acosta

Lawyers’ group asks SC to void Comelec deal with Smartmatic

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HE Integrated Bar of the Philippines (IBP) has asked the Supreme Court to declare illegal the awarding of a P268.8-million contract by the Commission on Elections (Comelec) to technology provider SmartmaticTotal Information Management (TIM).

The national organization of lawyers said the awarding of a contract for the diagnosis of all the 82,000 Precinct Count Optical Scan (PCOS) voting machines was conducted without a public bidding.

In a 28-page petition, the IBP, through its national president Vicente Joyas and general counsel Pacifico Agabin, also sought the Court’s issuance of a temporary restraining order (TRO) to immediately stop the implementation of the contract as mandated under Comelec Resolution (CR) 9922.

The IBP argued that CR 9922 should be declared null and void for violating Republic Act (RA) 9184, otherwise known a the Government Procurement Reform Act. Earlier election watchdogs Citizens for Clean and Credible Elections and Automated Election System (AES) Watch have also filed separate petitions before the SC seeking to blacklist Smartmatic from participating in any bidding process for next year’s elections.

The two groups also asked the Court to issue a TRO enjoining the Comelec from awarding any contract to Smartmatic or from proceeding with the bidding of multimillion-peso contracts for the 2016 elections where the latter is a participant.

The petitioners were also referring to the contract for the diagnosis of the PCOS machines for reuse in the 2016 elections; procurement of the Optimal Mark Reader and DRE Machines; and the procurement of papers, or the lease of Election Management System and Precinct-Based DRE Technology.

The groups also insisted that Smartmatic should be barred from participating in the procurement for the 2016

Editor: Dionisio L. Pelayo • Friday, February 20, 2015 A3

elections, or in any government procurement, for a period of at least two years for committing several “misrepresentations” to the poll body and for violating its obligations under the 2010 automated election system project contract.

On the other hand, the IBP noted the Comelec blatantly violated RA 9184 when then-Chairman Sixto Brillantes Jr. signed the contract with Smartmatic-TIM for the repair, refurbishment and maintenance of the PCOS machines.

In opting to approve Smartmtic’s extended warrant proposal instead of conducting a public bidding, the Comelec cites “tight time schedule” in the preparations for the forthcoming national and local elections if public bidding is to be conducted.

The poll body added it would be “too great a risk” to give the refurbishment and repair of the PCOS machines to any third party other than Smartmatic, considering the highly technical nature of the refurbishment and repairs of the machines. But the IBP said the Comelec’s reason is not a ground to dispense with the conduct of public bidding under the law.

“It may not be amiss to point out that one of the policies of the state is the promotion of good governance in all its instrumentalities. Corollary to this policy is the Comelec’s duty to safeguard the public trust and confidence in elections,” the IBP said.

“This duty is only possible when there is transparency and a system of accountability in the procurement of the maintenance, diagnostics and repair of the PCOS machines.

Accordingly, the Comelec’s approval of the extended warranty proposal constitutes grave abuse of discretion as it grossly violates the requirement of public and competitive bidding under RA 9184, which was enacted to ensure trnsparency in procurement processes conducted by the government,” the petitioner added. Joel R. San Juan

Forces Chief of Staff Gen. Gregorio Pio Catapang Jr. “The return of these firearms is a beginning, and we expect this continues until the firearms, the uniforms and all the personal belongings of our people are returned to us,” Espina said.

“Second, we expect all the demands and requests we have given to the other party—the surrender of Basit Usman to the government, as well as all those who will be held and are accountable for killing—be met,” he added.

A side f rom t he f i re a r m s, the slain commandos were also stripped of uniforms, helmets and cellular phones.

Bangsamoro Islamic Freedom

Fighters Spokesman Abu Misri Mama said his men also took 10 firearms from the killed commandos.

Meanwhile, Malacañang said it is not setting a “fixed deadline” for the MILF’s full compliance with the wish list of President Aquino.

Aside from the return of all the firearms, Mr. Aquino is also asking the MILF to help the government get escaped terrorist Basit Usman and identify those involved in the death of the SAF commandos.

“There is no fixed deadline set, but there is a clear sense of urgency,” Communications Secretary Herminio B. Coloma Jr. said in a text message to the BusinessMirror on Thursday.

While the government awaits the surrender of at least 28 more government-issued firearms, bulletproof vests and other personal belongings taken from SAF commandos killed in the bloody January 25 encounter, Coloma had acknowledged the rebel leaders’ commitment to abide by the peace pact earlier forged by the Aquino administration and the MILF. According to Coloma, “The return of firearms belonging to the SAF 44 partially meets the call of President Aquino for the MILF to show concrete manifestation of their support to the

ongoing Bangsamoro Peace Process.”

The Palace official also noted that the return of the firearms was done “through the mechanisms of the peace process” involving an International Monitoring Team and the CCCH. Coloma said they affirm the statement of government chief negotiator Prof. Miriam Colonel-Ferrer that the return of the firearms by the MILF is a sign of goodwill and commitment to the peace process.

He, however, reiterated Mr. Aquino’s earlier demand for more “concrete manifestations expected from the MILF,” including support and noninterference to government efforts to capture Basir Usman; identification and prosecution of those involved in the slaying of the members of SAF 44; and the return of the other firearms and equipment.

Mindanao leaders and civic groups also lauded the MILF’s return of some of the seized SAF weapons.

Mindanao Business Council Chairman Vincent T. Lao said the action done by the MILF “will help in boosting public support toward the southern peace efforts.”

“It’s a good gesture. The problem was not the MILF,” Lao was quoted in the statement as saying.

Economy

A4 Friday, February 20, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

Education: First step to PHL’s edge in AEC

PLCPD sets series of briefings on MDGs

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By Marvyn N. Benaning Correspondent

T

HE Philippine Legislators’ Committee on Population and Development (PLCPD) will be holding a series of briefings to tackle what the country has achieved so far in halving poverty rates by this year as part of its Millennium Development Goals (MDGs).

The PLPCD said for the first briefing scheduled at 10 a.m. on February 24 at the Alex III Restaurant at the corner of Morato Extension and Scout Bayoran Street, Quezon City, Director Erlinda M. Capones of the National Economic and Development Authority’s (Neda) Social Development Staff will give an update on the country’s efforts to achieve the MDGs. The most formidable MDG target is halving poverty incidence, which has worsened to 27 percent from the previous 23 percent, putting doubts to the claims of the Neda and President Aquino that inclusive growth is being achieved.

Only 85 indivuals actually own 25 percent of the country’s gross domestic product (GDP), and the top 40 families actually account for nearly half of the nation’s wealth.

Globally, the situation is pretty much the same, with less than 1 percent of the global populatuion controlling half of the entire planet’s wealth, with the trend showing that wealth is getting concentrated among billionaires who do not event reinvest and use their resources for productive activities.

Dr. Enrique Tayag, chief of the Epidemiology Bureau of the Department of Health, will talk on the challenges in meeting health-related MDG targets.

Rep. Sharon Garin of AAMBISOWA party-list will discuss MDGrelated legislation and prospects for legislation on the post-2015 development agenda.

PLPCD was an active supporter of the reproductive-health bill, which has been enacted into law, and it is urging the Aquino administration to work double-time in achieving the MDGs for this year.

Among the issues covered by MDGs are women’s health, business and human rights, children’s rights and HIV/AIDS. The briefing series, titled “Closing Gaps, Expanding Opportunities,” hopes to encourage government to work harder in meeting the MDGs. In 2000, world leaders committed to address a range of issues from reducing extreme poverty to halting and reversing the spread of HIV, and set out a series of targets that became known as the MDGs to be achieved by this year.

Leading the ribbon-cutting rites for the opening of the Philippine Council of Deans and Educators in Business (PCDEB) 14th National Convention and Second Asean Conference, with the theme “Business Education Gearing Towards Asean Economic Community,” are (from left) Dean Ma. Victoria Rosas, PCDEB president-elect; Dean Flory Anastacio, PCDEB past president; Dr. Eduardo “E.G.” Ong, PCDEB president and chairman of the Professional Regulatory Board of Real Estate Service; Sen. Nancy Binay; Ma. Alegria Sibal-Limjoco, president of Central Books and vice chairman for Continuing Education of the Philippine Retailers Association; and Edgardo Lacson, president of the Employers Confederation of the Philippines. Nonie Reyes

EU firms seek better procurement rules

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By Estrella Torres

uropean companies remain reluctant to invest in the Philippines due to concerns over the country’s bidding process. This, according to European Union (EU) Ambassador to the Philippines Guy Ledoux, is despite the procurement reforms initiated by the Aquino administration.

Ledoux hailed the move of the Department of Budget and Management (DBM) to modernize the government’s procurement process through the electronic-bidding platform called PhilGEPS. The system ensures accessibility and transparency of the procurement process.

He said PhilGEPS now includes thousands of state agencies and has provided over 550,000 opportunities, but was not known for its “user-friendliness.”

“The recent decision to update the tool by 2016 is encouraging, as the increase of functionality of the system will further reduce procurement costs, provide audit trails and make available online services, such as e-bidding and e-payment,” said Ledoux at the forum on procurement Friedrich Neumann Founda-

tion (FNF) organized recently at the Mind Museum in Taguig City.

However, Ledoux urged the Philippine government to address concerns of foreign companies on the country’s bidding process. “[T hese] problems i nc lude short timeframes between publication of tenders and bid submissions, which do not allow foreign bidders to complete all the formal requirements, for instance, the certification of eligibility and translation of documents," said Ledoux in his speech at the FNF forum on procurement.

The EU envoy said foreign companies also face difficulty in dealing with the complex formal requirements, such as certifications, business licensing and disclosure requirements. These include details of similar contracts performed in

other countries and details on prices, which have become deterrents for interested bidders.

He said several regulatory measures need to be addressed “for the Philippines to get a much larger share of EU investments.”

These include joining the Government Procurement Agreement as an observer, so the administration can show its engagement toward transparency, nondiscrimination and international competition, as well as benchmark its own policies against international ones.

The Philippines can also attract investments from Europe by improving the legal framework for foreign bidders by allowing foreign companies to bid at a more equal footing.

“A procurement market open to foreign bidders is a key asset to significantly upgrade the level of competition and ensure better value for money. One way to facilitate this is to include all 28 EU member-states on the ‘reciprocity’ list envisaged in the Government Procurement Reform Act,” Ledoux said.

He said the government needs to liberalize foreign bids for infrastructure projects above P1 billion.

“This task that has just been outlined is certainly an ambitious one,” said Ledoux, as he hailed the government’s move to pass economic-reform bills and to create a more conducive regulatory environment for foreign investment.

Apec meet on PPPs scheduled in Tagaytay

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year of the sheep

news@businessmirror.com.ph

Members of the People for the Ethical Treatment of Animals, wearing white jumpsuits and sheep masks, display placards during a protest at Manila’s Chinatown district of Binondo to remind shoppers and tourists celebrating the Year of the Sheep not to patronize wool made from shearing off its hair. AP

xperts and finance officials will meet in Tagaytay City from March 4 to 6 to discuss the Public-Private Partnership (PPP) Program, as well as infrastructure, as part of this year’s Asia-Pacific Economic Cooperation (Apec) forum, which is being hosted by the Philippines.

When the Fourth Apec PPP Experts Advisory Panel Meeting opens on March 4, participants will get a report from the Apec Secretariat and Indonesia regarding the discussions made and decisions taken during the panel’s third meeting, as well as updates on the works undertaken

by Indonesia or the panel.

Indonesia will also give an update on its PPP unit and its various PPP projects, as well as the challenges the country faces.

PNA

mproving the current state of education in schools and universities is one of the areas that the Philippines needs to work on to excel in an integrated Asean setting.

Dr. Eduardo Ong, president of the Philippine Council of Deans and Educators in Business (PCDEB), said facing the challenges and improving the education sector will make the country have an edge in the upcoming Asean Economic Community (AEC).

He said: “The K to 12 Law is the first step to align to the Asean context. The shift of school calendar year from June to August is a step toward integration.”

“Curricula and subjects taught must include relevance to the Asean milieu. Education infrastructure facilities must be updated to the regional standards. To be able to be an educational hub in Asia, the Philippines must take the lead to participate in the integration and step up in the education sector,” added Ong, who is also the chairman of the Philippine Association of Real Estate Boards Inc. In order to be an academically advanced nation, business educators in the country must align to the challenges in the integration in the areas of human-resource development, marketing resource, financial resource, operations and production, technology and academic cooperation, the PCDEB head said.

Ong said Filipinos, especially educators, must not only think, act and focus locally, but they must also think and act globally to have a mindset of both global and local implications.

“The Asean economic integration 2015 jump-starts Asean solidarity in terms of free movement of goods, services, capital investment and mobility of professional services and academic pursuits.

Business educators in the Philippines should take the lead in making this possible by thinking global and local to be able to outshine our regional counterparts,” he said.

In line with this, the PCDEB is now holding a forum titled “Global Alignment of Business Education towards Asean Economic Integration.” Attending the February 19 and 20 conference at the Hotel Jen (formerly Traders Hotel Manila) are business educators from across the country.

The event will gather various business educators nationwide—deans,

directors, administrators, facilitators, professors teaching businessrelated courses and subjects—to share ideas on how to fare, cope and outshine other regional competitors by 2016.

It will give light to relevant issues that will guide educators as they prepare for the integration. The Philippine Qualification framework will be also discussed to raise benchmark with that of the other Asean models.

Known as the “Father of the Philippine Real Estate,” Ong will be speaking during the convention to discuss educational and real-estate sector issues and answer questions on the looming AEC integration.

Ong is a real-estate expert who once topped the Real Estate Consultancy examination and the Real Estate Brokers examination by the Department of Trade and Industry. He also served as one of the leaders of the Philippine Chamber of Commerce and Industry, the largest business group in the country.

Aside from him, prominent speakers from other parts of Asia will share their thoughts on business education and issues on the upcoming integration.

Key topics of speakers include: Preparing the Youth for Regional Leadership Towards Asean 2015; Increasing People Competitiveness for Asean Integration; and Ensuring Philippine Readiness for Asean 2015 Through Greater Regional Integration, among others.

The business-educational forum will serve as annual meeting, induction of new members and election of new officers of the PCDEB. The PCDEB is a professional organization of deans, directors, chairmen, administrators and professors teaching business courses, such as Accountancy, Business Administration, Marketing, Economics, Travel and Hotel Management, Entrepreneurship, Commerce, Management, and Office Administration in various colleges and universities nationwide.

Since its inception 12 years ago, the group has been organizing regional associations and sponsoring forum, seminars, and conventions in Manila and in different regions for the professional growth of members and business students. It also aims to bridge the gap between education and employment and attain inclusive growth for the country.

Steelmakers laud Lacson, DTI’s drive vsagainst substandard steel

L

ocal steelmakers are calling on the Department of Trade and Industry (DTI) and the Criminal Investigation and Detection Group (CIDG) to continue their campaign versus the proliferation of substandard construction materials in Supertyphoon Yolanda-stricken areas despite the resignation of Secretary Panfilo Lacson as rehabilitation czar.

Roberto Cola, president of the Philippine Iron and Steel Institute (PISI), said the sudden resignation of Lacson should not dissuade the DTI and the CIDG from strengthening their cooperation as mandated by the memorandum of agreement (MOA) they signed last year.

“The DTI-CIDG MOA, under the stewardship of Lacson, has already resulted in successful operations that spared Yolanda victims from getting victimized

by peddlers of substandard construction materials. We hope that this formidable partnership will continue through the renewal of the MOA,” Cola said.

Last year the DTI and the CIDG conducted a series of raids that resulted in the confiscation of over P100 million worth of substandard steel products and other construction materials that were supposed to be sold in Yolanda-damaged areas.

Cola said this partnership has become doubly important, as the government is set to release the funding for the rehabilitation of areas in the so-called Yolanda Corridor amounting to about P170 billion.

Under the MOA, the CIDG will conduct operations in five phases namely, the planning and preparation phase; intelligence and buildup phase; negation phase; legal offensive phase; and the monitoring phase.

Economy BusinessMirror

news@businessmirror.com.ph

Friday, February 20, 2015 A5

‘PHL still not fully utilizing talent pool’

T

By Bianca Cuaresma

HE Philippines needs to come up with measures that will unlock the potential of its quality labor pool, with reductions in the country’s unemployment and underemployment numbers translating to better trend growth up to 2020, an international banking giant said.

In a research note, Standard Chartered said a percentage-point reduction in unemployment and a percentage-point reduction in underemployment will yield a 0.1-percentage-point improvement in the country’s gross domestic product (GDP) growth rate.

“The Philippines has abundant

prosperity god A diver dressed as “Prosperity God” feeds its collection of fish as they celebrate the Chinese New Year at the Manila Ocean Park. AP

Manila got $9M from ADB’s Asia-Pacific disaster fund

By Cai U. Ordinario

T

he Philippines received a total of $9 million from the Asia-Pacific Disaster-Response Fund (APRDF) between 2009 and 2014, the largest amount according to the Asian Development Bank (ADB).

In a performance review of the fund, the ADB said the Philippines received 23 percent of the $39.7million total approved grants from the APRDF. The Philippines also received three grants over the five-year period, the most number of grants extended to any recipient-country.

“The Philippines has been the largest single recipient of APDRF grants, both in number and value.

The country has received three grants, each for the maximum amount of $3 million. The Philippines has received 23 percent of total approved grants in value terms,” the report stated.

The Philippines received APRDF grants for Typhoon Ondoy (international code name Ketsana), in 2009; Tropical Storm Sendong (international code name Washi), in 2011; and Supertyphoon Yolanda (international code name Haiyan), in 2013.

All the grants received by the Philippines were used to respond to the destruction caused by Sendong and Yolanda. However, the country only used $1.65 million of the grant it received for Ondoy.

The remaining $1.35 million of the grant was returned to the APRDF, the second-largest amount returned to the fund. The largest return was $3 million granted to Indonesia for the Mount Merapi Disaster Response.

In terms of the actual use of the grants, the report stated that the Philippines used the grants for various purposes, including what they were intended for.

In 2009 the Philippines used $1.65 million from the fund for food, mats, water jugs, plastic bags, rice bags, mosquito nets, blankets and fuel.

The funds were also used for one forklift truck and two hand pallet trucks; cash assistance; cash for work; and medical, burial, and transportation assistance.

“Eight regions were declared disaster areas, prompting the government of the Philippines to declare a state of national calamity in Metro Manila and 25 provinces. Damage was initially estimated at $48.8 million, but later revised to $1.45 billion,” the ADB said.

In 2011 the country used $3 million for food, water, kitchen kits; transitional shelter; cash for work site clearance; and hauling and trucking services.

The ADB said the President declared a national calamity on December 20, 2011. The government’s initial assessment estimated the total damage to infrastructure, agriculture and schools at $23 million.

“Three cities and one municipality were badly affected. Rivers overflowed and inundated the cities with muddy water at an alarming rate. The flooding drowned many residents in their sleep and swept away houses made of light materials,” the ADB said.

However, the ADB has not yet liquidated the $3 million extended by the fund to the Philippines for Yolanda. The funds were supposed to be used for the “restoration of life-preserving services.”

The ADB said the grant was extended to the Philippines after two other emergencies brought by the Zamboanga City and Basilan siege in September2013andthe7.2-magnitude Bohol earthquake in October 2013.

“Maximum sustained winds

reached at least 215 kilometers per hour near the center with gusts reaching up to 275 kilometers per hour. Yolanda is the third category 5, or super typhoon, to hit the Philippines since 2010, and possibly the strongest to ever hit land,” the ADB said.

The ADB said that, from 2009 to 2013, three to five grants were approved each year. Only one grant was approved in 2014.

The annual total grant approvals have varied in value terms between $0.2 million in 2014 and $15 million in 2011.

“Four of the five grants approved in 2011 were made in response to floods linked to La Niña conditions, which resulted in a higher incidence of extreme rainfall events in Asia,” the ADB said.

The APRDF was established in April 2009 as a special fund to provide timely, incremental grant resources to ADB’s Developing Member Countries (DMCs) in order to help them cover the initial costs of responding to a major disaster.

The APDRF was designed to provide quick-disbursing grants of up to $3 million per event to assist DMCs in meeting immediate expenses to restore life-saving services to affected populations, augmenting aid provided by other donors in times of national crisis.

An initial tranche of $40 million was transferred to the APDRF from uncommitted resources of the Asian Tsunami Fund.

The APDRF paper indicated that the ADB would also accept contributions to the fund from bilateral, multilateral and individual sources, including companies and foundations, on an untied grant basis.

To ensure cost-effective processing and reporting, a minimum contribution of $500,000 equivalent was set.

labor supply. Further, a significant portion of its working-age population is not employed. Measures to boost employment should boost trend growth. We estimate that between now and 2020, the Philippines’s trend GDP growth rate will improve by 0.1 percentage point if 1 percentage of the percentage of people currently not in

the labor force obtain full-time employment,” Standard Chartered said.

In particular, every 1-percent reduction in unemployment will improve the country’s growth rate by about 0.07 percentage point, while a percentage-point reduction in the country’s underemployment will yield about 0.03 percentage-point increase in the country’s GDP growth trend.

The country’s unemployment rate as of October 2014, data from the Philippine Statistics Authority (PSA) showed, hit 6 percent, while underemployment is at 18.7 percent during the same month.

The country’s current trend growth in the past five years, as earlier stated by government officials, is at about 5 percent to 6 percent.

“The Labor market has improved but has yet to reach full employment.

The Philippines’s labor market has improved since 2010. There is, however, scope to improve the labor market further,” Standard Chartered said.

Solon hits power industry for scheduled rate hikes

By Marvyn N. Benaning Correspondent

A

party-list representative criticized energy-industry players for unduly using plant shutdowns and repairs in raising power rates.

Rep. Neri J. Colmenares of Bayan Muna said reports on the looming increases in electricity rates Manila Electric Co. have been floating around could only be based on scheduled shutdowns.

He argued that these shutdowns have been used for years to justify exorbitant increases in power rates that batter manufacturers, commercial enterprises and households, Colmenares stressed.

“This type of power-rate hike is exactly the type, which we have warned about and may just be a prelude to higher rate hikes during the summer months. Synchronized power-plant shutdowns, like the one in 2013, whether they be scheduled or unscheduled, is a surefire way to jack up power rates. Why should the price of electricity go up because of plant shutdowns?” he asked.

“Add to this is the fact that we have received reports that the Power Sector Assets and Liabilities Management Corp. [PSALM] entered into a questionable deal concerning the Malaya Thermal Power Plant, which is currently managed under an Operations and Maintenance Service Contract (OMSC) by STX Marine Service Co. Ltd, a South Korean company whose main experience is

shipping and not maintaining power plants,” Colmenares revealed.

“Based on reports, PSALM awarded the OMSC agreement for one year to STX even though the company has no track record in handling a powergenerating facility and maintaining it. After the awarding of OMSC to STX, PSALM conducted another separate bidding for Maintenance or Overhaul of Malaya 1 Turbine, a Siemens HP barrel-type turbine.

The overhaul and maintenance of Malaya turbine were participated in by three bidders Weir Engineering Services Limited, a British company with experience of turbine overhaul; a Chinese company with unknown maintenance exposure, and; STX Marine Service Co. with no experience on overhaul of turbines.

After the evaluation of bids, PSALM awarded the contract to STX Marine Service Co., even though STX was not able to provide the list of similar projects concerning overhauling of turbines, especially on Siemens HP barrel-type turbines,” he added.

“During the implementation of the contract starting December 03, 2014, it was noticed that STX subcontracted the opening of HP Turbine to IWHA, a South Korean company again without experience in major overhaul of turbines. Then it was again subcontracted to SHILOH, a South Korean-formed company in the Philippines, to supply local manpower and some tools needed for turbine overhaul. After a month of overhaul practice by IWHA, the HP turbine overhaul is now delayed in its

implementation because of IWHA’s inexperience on HP Siemens turbines, with some parts, like coupling bolts damaged. The fact that the subcontractor company subcontracted the job several times only shows that they are incapable of doing the job,” Colmenares argued.

“This is very alarming, considering that this inexperience will cause delay in the overhaul. And, if no remedies are done by STX, or its South Korean partner contractor, the expected startup at Malaya 1 turbine overhaul will not materialize and possibly the turbine, itself, will also be damaged,” Colmenares explained.

“This is very critical because the overhaul of Malaya 1, which is expected to back up power in the Luzon grid, will not be completed in the summer of 2015. PSALM should think twice in awarding a contract to an inexperienced contractor. Why did PSALM award the contract to the OMSC operator, which is STX, that is the same STX contractor that is managing the overhaul. In this case, the activities under the overhaul will be irregular, since there is no check and balance between managing and overhauling. Last, this is very dangerous because it would imperil the power supply of Luzon. In essence, PSALM is sabotaging the industry with this deal. If brownouts take place, the Department of Energy and PSALM must be held accountable for their failure to revive Malaya, which could have provided more than 600 megawatts to our power supply,” Colmenares said.

Angara: Upgrade seaports as well

W

hile the country remains focused on improve its airports, a legislator on Thursday reminded the administration to upgrade the seaports as well to boost cruise tourism.

“While we are all pushing for the development of our airports, let us not forget that a number of tourists also arrive by boat. Our archipelagic geography beams with immense opportunities for a cruise tourism industry to grow and flourish,” said Sen. Sonny Angara, vice chairman of the Senate tourism committee.

The poor state of the country’s

seaport infrastructure was noted

by Tourism Secretary Benito Bengson Jr. during a recent hearing of the Congressional Oversight Committee on Tourism. He said it is one of the major constraints for the development of cruise tourism in the country.

Based on the 2014 World Economic Forum Global Competitiveness Index, the Philippines’s port infrastructure ranks 101st out of 144—the lowest among the Asean-6.

Singapore ranks second; Malaysia, 19th; Thailand, 54th; Indonesia, 77th; and Vietnam 88th.

“That our neighboring countries are way ahead of us only means that we need to double, quadruple even, our efforts. If we do not speed up infrastructure development, we’ll be missing out on a lot of opportunities,” Angara said. “Clearly, the strong demand is there. We need to step up.

Tourist arrivals by sea, mostly via cruises, rose to 52,820 passengers in 2014, from 41,624 in 2013, and 23,857 in 2012.

Cruise tourism is one of the strategic tourism products identified under the National Tourism Development Plan.

With Metro Manila feared to experience two-hour rotating brownouts—aside from the scheduled electricity rate hikes—next month, generator sets have become in demand in the market. Photo shows workers unloading 50 generator sets at a store in Quezon City. NONOY LACZA

Opinion BusinessMirror

A6 Friday, February 20, 2015

editorial

PHL call centers: Getting even better

D

uring the administration of President Gloria Arroyo, in about 2003, is when the Philippine call-center business first began to show signs of the potential to be a sustainable business sector.

The outsourcing industry was properly supported by government policy and programs unlike is so many other instances.

It would have been more typical if the government had taken a heavy-handed approach, trying to control and shape the industry. But, instead, there was a series of small but important steps that allowed the industry to thrive and flourish at its own speed.

The law establishing the Philippine Economic Zone Authority (Peza) was approved by former Philippine President Fidel V. Ramos in 1995. Peza was designed to offer incentives to companies that exported goods. But the government had a rare stroke of common sense and expanded the definition of ‘exports’ to include ‘service exports’. As of last years, there were over 300 fully operating economic zones around the country.

But, in 2003 and later when India controlled the global call-center business, there were concerns about finding enough qualified employees. Government programs were launched to try to help what the industry calls ‘near-hires’ with training to improve their English. It all worked.

The call-center business was not universally welcomed to the Philippines. One commentator in another newspaper talked about the business being only for the ‘rich kids’ with college educations. Of course, over the years, his attitude has changed. Now call centers are factories only for the lower economic groups that learned English from watching cartoons.

Today, the Philippines is the No. 1 destination for the call-center business, putting India far behind in the dust. Estimates are that as many as 3 million Filipinos benefit from direct and indirect employment from outsourcing, as each direct job can generate as many as two more. It is a critical source of both foreign investment and foreign currency inflow.

India lost to the Philippines because the industry was never respected as an economic opportunity. Jobs at a call-center were only stop gap measures for most employees and even today, job attrition runs at 30 percent to 35 percent in the large cities. The damage to India is this: A new study estimates that, in the ongoing decade, India might lose $30 billion in terms of foreignexchange earnings to the Philippines.

One of the reasons for success is that the local industry has been able to solve some of the inherent problems in the industry, the primary being after- qualifications employee attrition.

From the BusinessMirror: “According to a survey by Towers Watson, a global professional services company, the Philippine BPO industry has managed to retain employees, resulting in a 20-percent turnover rate, the lowest since 2007. The percentage is a marked improvement, compared to the 33-percent, 24-percent and 26-percent attrition rates from 2011 to 2013, respectively”.

The growth of the industry is also seeing growth of wages. “The overall salary increase in the outsourcing industry in the Philippines in 2014 was 7 percent on average, and is expected to be stable in the next two years at 7 percent to 7.5 percent”. That is well above inflation.

This important industry must be respected and continued to be encouraged.

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Inconceivable without them James Jimenez

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spox

HENEVER it is asked why public school teachers are required to render poll service, the Commission on Elections (Comelec) always points out that teachers are respected by everyone and that their presence in the polling place has been proven to contribute to the preservation of orderliness in elections. To be honest, I would say that this is reason enough for the electorate to continue its reliance on teachers.

However, there are at least four other, more pragmatic, reasons for statutorily requiring members of the Boards of Election Inspectors or BEIs–to be teachers.

First, the Department of Education is the only organization with the manpower to meet the requirements of election service. Think about it.

During the 2013 National, Local, and Autonomous Region in Muslim Mindanao (ARMM) elections, there were a total of 77,829 polling places–not counting the special precincts for detainee voting and pilot precinct for persons with disabilities. This means that there were at least 233,487 ma’am and sirs drafted to be members of the BEIs. During the 2013 Barangay elections there were 170,603 polling places that had to be manned by 511,809 members of the Boards of Election Tellers. And in the 2016 National and Local elections, there will be an esti-

mated 102,000 polling places activated– again not including those precincts for detainees and PWDs–which translates to at least 306,000 BEI members seeing action on election day.

Of course this doesn’t mean that it’s a no-way out kind of situation for teachers. The Comelec has, in the past, excused teachers from this duty when circumstances called for it. A common example would be when teachers were found to have relatives among the candidates.

Second, if election service were to be merely voluntary, appointing members of the BEIs from the private sector–such as ordinary citizens or members of civil society organizations–essentially makes the orderly conduct of elections dependent on the spirit of volunteerism. Despite recent massive displays of the communitarian spirit of ordinary Filipinos, it cannot be denied that volunteering

for election duty does not quite fall into the same category as volunteering for humanitarian causes.

For one thing, people on election duty are bound to the entire process.

This means undergoing the necessary training several weeks before election day, conducting final testing and sealing procedures immediately preceding election day, coming to work at approximately 4 am on election day itself, setting up the polling precinct by 7 am, running the elections until around 4 pm, and staying on the job until the successful completion of results transmission to the municipal canvassing centre. With each step being critical to the success of the whole, the volunteer cannot quit at any time without throwing the entire election process into disarray.

Needless to say, there are volunteers out there who would have no problem at all doing what our public school teachers are expected to do, but still the question remains, will there be enough of them?

Third, there is the question of neutrality. It has been suggested that employees of other government offices be allowed to volunteer. In theory, this will widen the pool of potential BEIs. In practice, however, this would open the elections up to suspicions of partisanship at the most fundamental level imaginable: the polling place. In fact, the Comelec was turned into a Constitutional Commission back in 1940, precisely to put an end to that sort of situation.

Sourcing volunteers from the pri-

vate sector would also be problematic.

By nature, elections are highly divisive and the public tends to cleave along partisan lines. It is not unrealistic to wonder whether there will be enough individuals emerging from the populace willing–not to mention able–to perform BEI functions with the requisite neutrality.

There is likewise always the possibility that some unscrupulous politicians might seek to game the system by stacking the list of volunteers with persons committed to their candidacy. While it is hypothetically possible to disqualify the least suitable, the screening process itself will take time that might not necessarily be available.

And fourth: accountability. Even assuming that enough suitable volunteers sign up for election duty, and that none of them have inappropriate family ties with any candidate, there is still no assurance that these volunteers will be around to answer for their actions in the event that their performance of their duties is questioned. With teachers under the DepEd, the lines of accountability are much clearer.

Mandatory election service is no small matter. It is a heavy burden that exacts an enormous toll on our teachers and it would be massively unjust to them to trivialize that in any way. But the truth is, they are the only ones who can do what needs to be done–how it needs to be done. It would be inconceivable to have elections without them as the cornerstone.

opinion@businessmirror.com.ph

Opinion

Peace and development

Little pure Azkals

BusinessMirror

Tito Genova Valiente

Leonardo A. Lanzona Jr.

EAGLE WATCH

T

HE debacle in Mamasapano, Maguindanao, only highlights the fact that peace in Mindanao remains elusive.

This incident came at a time when the Bangsamoro basic law (BBL) was being discussed and finalized. Now, because of this tragedy that led to the death of 44 Special Action Force commandos, this law, which intends to create a lasting peace agreement with the Moro Islamic Liberation Force (MILF), is in danger of being dismantled.

From a development point of view, the main concern here is not lack of coordination between the police and military forces nor the violation of the chain of command in the executive level. The issue is why certain sectors, allegedly part of the MILF, chose to side with terrorism. The SAF mainly served an arrest warrant for a well-known terrorist Zulkifli bin Hir, also called Marwan, whose head commanded a huge amount of reward money for international terrorism. What caused the skirmish and the loss of lives (an “overkill”) was the apparently loyalty of several persons and groups to this terrorist.

What makes one choose to be identified with terrorism? Studies point to neither poverty nor the lack of material welfare as the causes of terrorism. Terrorists like Marwan and his men are relatively well-off and presumably are not motivated by material gain. Instead, individuals turn to terrorism because they care about influencing society and consider themselves sufficiently well informed to want to express their opinions.

Terrorists in particular care about influencing political outcomes. Instead of asking who has a low salary and few opportunities, to understand what makes a terrorist we should ask: “Who holds strong political views and is confident enough to try to impose their extremist vision by violent means?”

Most terrorists are not so desperately poor that they have nothing to live for. Instead they are people who care so deeply and fervently about a cause that they are willing to die for it. Hence, in the midst of the ongoing peace process, one can infer that the MILF has nothing to gain from this incident.

Moreover, we need to highlight that the lack of inclusive institutions, not desperate poverty, creates the breeding ground for terrorism.

By definition, inclusive institutions are those that allow and encourage participation by the great mass of people in political and economic activities. These institutions make the best use of their talents and skills and enable individuals to make choices they wish. In economics, such institutions must secure private property, an unbiased system of law and a provision of public services that provide a level playing field in which people can exchange and contract. It leads to the emergence of new businesses and allows people to choose their careers and meaningfully change

their fortunes. In politics, inclusiveness pertains to the conditions of residents even at the local level to realize such fundamental political values as liberty (personal rights, political equality such as collective preferences through broad participation in public affairs), and human welfare in their everyday lives.

Viewed in this light, the incident in Mamasapano is really caused by our society’s failure to establish more inclusive political and economic institutions. The death of Marwan does not mean the end of terrorism. Staging a coup d’ etat and an overthrow of the present administration will not keep terrorism at bay. Equivalently, the passage of the BBL that only intends to end the war in Mindanao will not be enough.

What will be needed is a law that encourages inclusivity in a long term; one that respects the rights of Bangsamoro for self-determination.

While this incident is not causing any dislocation to our current economic growth, the long standing war in Mindanao represents a significant loss in our potential for development.

This point underscores the importance of institutional change through the passage of laws. Our forefathers, beginning with Jose Rizal, were personally concerned about racial diversity and dreamed of a nation where people of varied cultures can live together as one.

During Rizal’s time, Europeans regard themselves as the sovereign masters of the earth, the only supporters of progress and culture and the sole legitimate species, while they proclaim all other races as inferior.

Rizal then asked himself, “Are these views just?”

Today, in delaying the BBL and denying the right of the Bangsamoro to self-govern within our political system, we are similarly asked this question by our Muslim brothers.

Surely, a number of people should be held responsible for this tragedy.

But behind these despicable acts are unjust structures. For peace to happen, we need laws to build more inclusive institutions. The deaths of 44 SAF troopers would be meaningless unless we resolve to change our institutions and ourselves.

‘T

ANNOTATIONS

HERE was something missing in the footages taken in London. We had to go to to Koronadal to look at one young football athlete.”

Those were the words of documentarian, Baby Ruth Villarama, the person behind the engaging and moving documentary, Little Azkals.

She was referring to Kano, this character of a kid who was one of those chosen to undergo trainings for the under-11 football players in UK. The program was geared at developing children into football players of the future. The training is not a one-shot deal but one that is ambitious. Part of this plan is to follow through the lives and skills development of the children who started in London one late Spring some years ago.

The sports program is aimed at nurturing what one of the boys described as “pure Askals” The reference is the many mixed-blood football players who came back to the country not only to seek their roots but to contribute as well to the development of a sport that is quite new to the sports buff in the country. Outstanding among this wave of sports heroes are the Younghusband brothers, The documentary begins with the selection of the children who were

coming from all walks of life, and from different places in the country.

Once pruned to a team, the bunch of kids trooped to the British Embassy so they could seek audience with the British ambassador.

England is considered the proud capital of football, The documentary showed the children preparing for their trip to England, where they would stay for three weeks, Villarama emphasized during the open forum that the magic and the risk, of a documentary for it to work is to open it to possibilities. Villarama who graduated with a degree in Journalism recalled that afternoon in De La Salle in Dasmariñas that one of the things she learned from school is the readiness to anticipate, In London, armed with a camera, Villarama was overwhelmed with one thing: this documentary was really about the boys representing the country. Awesome was the responsibility and England gazing back at her with its huge history of the sport was heartbreaking.

There are heartbreaks and heartbreaks in the documentary. At a cer-

A7

tain point, two boys could not almost make it to the trip after someone bungled their DSWD papers.

As the training progressed, we see the kids slowly acclimatized but we forget one thing – these are kids.

They will miss their home. They will miss their parents, their fathers and mothers. They will miss the food that their mothers cook for them.

The child-athletes had to deal also with the bruises and sprains they had while undergoing training, Are the wounds and scars and loneliness worth the special training? Many women and men in the audience were moved by what the kids had to go through. And these kids will cry once they could not bear the situations anymore.

The documentary done by Baby Ruth Villarama started from a simple premise. What happens when you bring to a foreign country boys who below eleven years of age for a training. What happens when you constantly advise them about the value of the training they are privileged to be part of? What happens when you need to convince them about the need to sacrifice comfort and other things? At the age of 10, heroism is a dense construct. The kids are clueless about the end-results of their training program.

The candor of the documentarian and the unique experiences of the very young boys are just two of the elements that make Little Azkals a warm, unpretentious, honest document.

It was a wise decision for Villarama, the documentarian, to focus on

the children’s journey. There were side-trips to the lives and travails of the real Azkals. But in the end, we are interested in the children and how they cope with the monumental task ahead of them. We see this problem grow as we watch the film over and over.

I first saw this documentary by way of the screener sent to me by its producers. I then had the opportunity to view Little Azkals again in the recently completed Pasale, the film concourse held each year in Ateneo de Naga. There it was the closing film.

Last Wednesday, February 18, I had the privilege again to feel the growing impact of the documentary as it opened the Calabarzon Film Festival in Cavite.

The applause at the end of the screening confirmed what I felt is the power of the documentary: the realities it is able to express. A part of this reality surfaces when Villarama and another filmmaker follow one of the children who returned from England. Kano is this boy. He is poor once more. The training facilities are substandard once more. And even when mothers help in feeding the children, we know that the diet is not comparable to what is given in England.

Kano represents all the children who aspire to be world-class or even just good footballers. He is there as the screen darkens, as he goes back, hunched, to the classroom with his meager food on the plate. The score he made in England is a memory.

talk of crisis was in the air from Jakarta to New Delhi.

The last two rounds of major QE injections—by the European Central Bank last month and the BOJ in October—resulted in only minor boosts to emerging markets relative to previous ones. Part of the problem is diminishing returns; too much liquidity chasing too few good investments. It also may be that, as the issuer of the reserve currency, the US has longer monetary coattails than Japan or Europe. Or are emerging markets losing their appeal?

The answer to this question should worry officials in Asia and elsewhere. In a sense, the QE-fueled boom of recent years made things too easy for them. “It has funded abnormal growth globally, compared to the cycles of the previous century,” says Marshall Mays, director of Emerging Alpha Advisors in Hong Kong.

The US resurgence has its benefits,

of course. As America’s 2.5 percent growth rate accelerates, US households will buy more Asian goods. But in the short run, Asia may run short on economic fuel. All that hot money, as I’ve written before, deadened the urgency for governments to upgrade their economies. As data series across industries soared, leaders focused more on ribboncutting ceremonies for new skyscrapers and factories, rubber-stamping foreign direct-investment deals and basking in headlines about rising share prices than in stabilizing economies and strengthening financial systems.

Now, as capital flows recede and China slows, governments face pressure to loosen fiscal policies, redouble efforts to create jobs and bolster their appeal as investment destinations. This is hard work they should have done when times were good. They’d be smart not to wait any longer than they already have.

E-mail: titovaliente@yahoo.com

Leonardo Lanzona Jr. is director of the Ateneo Center for Economic Research and Development and a senior fellow of Eagle Watch, the school’s macroeconomic research and forecasting unit.

Are emerging markets losing their appeal?

William Pesek

BLOOMBERG VIEW

I

NVESTORS are still scratching their heads over Indonesia’s surprise rate cut on Tuesday, when the central bank lowered the reference rate 25 basis points to 7.5 percent. They’re more likely to find an explanation in Frankfurt, Tokyo and Washington than in Jakarta.

At 6.96 percent, inflation is outpacing 5 percent growth in Indonesia. Maybe Bank Indonesia Governor Agus Martowardojo is worried about mounting deflation pressures around the globe.

More likely, he’s recognizing another dynamic at work: The boost that quan-

Friday, February 20, 2015

titative easing in advanced economies has delivered to emerging markets such as Indonesia may be coming to an end.

I’m not referring here to the possibility of an eventual Federal Reserve interest-rate hike, or even the Bank of Japan’s failure to expand its monetary base

today. There’s growing evidence that emerging markets are simply benefiting less and less from existing QE programs.

What’s more, the US is starting to attract much of the liquidity that those smaller countries have grown dependent upon.

“For 2015, the story may be of surprisingly strong asset performance in the US combined with a continued poor performance in the emerging world,” says Adam Slater of Oxford Economics in London.

The conventional wisdom still holds that developing-nation assets will gain from any additional stimulus from the euro zone and Japan. In a new report, however, Slater warns that the shrinking of the differential in gross domestic product between advanced and developing economies—it’s now the smallest since 1999—might well drive liquidity out of Asia. The growth gap in 2015 may be 1.2 percentage points, compared with

about 4.5 percentage points between 2000 and 2014. In fact, excluding China, emerging-economy growth could be just 2.8 percent this year, not that much more than that of the Group of Seven nations.

Yield spreads also make riskier economies less appealing. While 10-year yields in, say, Indonesia are higher than in the US (7.07 percent versus 2.12 percent), real interest rates are becoming a turnoff. They’re also either negligible or negative in Argentina, Mexico, South Africa, South Korea, Thailand and Turkey. Oxford’s sample of 13 key emerging economies shows that real rates averaged 1 percent in 2014, compared with roughly 3 percent since 2000. Not surprisingly, portfolio investment flows have decreased. On a six-month average basis, flows into emerging markets were just $11.6 billion in January, roughly equivalent to lows seen in 2013 when

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www.businessmirror.com.ph

‘Housing backlog could rise to 6.5M units’ A

By Roderick L. Abad

NONPROFIT housing organization has warned that the housing backlog in the country will likely increase to 6.5 million by 2030­—based on a study conducted by the University of Asia and the Pacific—if drastic change is not done to address the perennial problem.

At the sidelines of the We Build Chatroom event in Makati City on Wednesday, Habitat for Humanity Philippines CEO and Managing Director Charlito S. Ayco told the BusinessMirror that the lack of dwelling supply in the country, currently pegged at 4 million, is very

evident in the socialized sector. Such pertains to any house-and-lot unit costing P450,000 and below.

“Practically, the socialized sector is an abandoned sector,” he said.

“Why is that? Because the market is not supplying it now,” he added.

The executive said the hous-

ing-backlog problem will likely persist over the next 15 years, if the total dwelling supply does not meet the overall demand needed by the market.

“Every year, on average, new housing needs reach 300,000 plus.

The annual output is only like

200,000 and less. So the backlog piles up,” he said.

Citing the government-accepted Housing Road Map of the Philippines’s proposal from the Subdivision and Housing Developers Association Inc., he said around 1 million See “Housing,” A2

MANILA GOLF CLUB OPTION FOR SUBWAY P20-B CHEAPER

By Lorenz S. Marasigan

B

UILDING the P370-billion Mass Transit System Loop (MTSL), envisioned as the first subway system in the Philippines, under the Manila Golf Club (MGC) in Makati City could save the government as much as P20 billion versus that other plan of constructing the facility beneath a different street in Bonifacio Global City (BGC).

Transportation Secretary Joseph Emilio A. Abaya said the cost of the project could shoot up by P20 billion, an amount equivalent to the rehabilitation and modernization of the airport in Cebu, if the government pursues its original plan of constructing the subway under 32nd Street in Makati City BGC. “There is a P20-billion difference in cost. It would be much expensive if we constructed the facility under the 32nd Street,” he said in an interview. “Initially, we were looking at 32nd Street, although it’s much expensive, the environment is more predictable.”

The transport chief noted that, unless an issue with the owners of the MGC crops up, the government will continue to pursue the deal’s scheduled auction.

“But we will evaluate the risk of that, because we could be brought before the court, which could issue a temporary restraining order,” the Cabinet official said. “The important thing there is for us to implement the project.”

Right now the only hurdle left for its procurement is the approval of the National Economic and Development Authority (Neda) Board.

The MTSL will connect the fast-developing BGC, Makati Central Business District and the Mall of Asia area in Pasay City. This will improve intercity linkage by providing a higher-capacity public transportation system that would facilitate fast and convenient mobility of goods and services.

“The P20-billion difference is a huge amount, it could fund the construction of schools, health centers and scholarships,” Abaya said.

The mass-transit project aims to address the high See “Subway,” A2

Japan trade deficit fell 58% in January on lower oil prices

J

apan’s trade deficit plunged nearly 60 percent in January from a year before, as exports rose and its import bill for oil and gas dropped thanks to sharply lower crude oil prices.

The deficit of ¥1.18 trillion ($9.9 billion) was better than some forecasts. Exports surged a stronger-than-expected 17 percent from the year before to ¥6.1 trillion ($51.7 billion), powered by strong shipments of vehicles and machinery. Imports fell 9 percent to ¥7.32 trillion ($61.6 billion), with a nearly 25-percent drop in imports of oil and gas.

Costs for imports of other commodities have also fallen, both due to lower demand and slumping prices.

The deficit was nearly ¥2.8 trillion in January 2014.

Japan’s long era of trade surpluses ended after its nuclear plants were shut down, following the disaster at the Fukushima Daiichi nuclear power plant in 2011 and imports of oil and gas jumped to make up for lost generating capacity. January was the 31st straight month of deficits.

Strong monetary stimulus aimed at spurring inflation has caused the Japanese yen to fall, as the US dollar has gained strength.

But until recently the weaker yen had increased production costs, but done little to boost exports by Japanese manufacturers, who have shifted a large share of their production overseas. Stronger growth in the US and other major markets appears to have been a larger factor in the export recovery.

Japan logged double-digit increases in exports of machinery, electronics and vehicles in January. That contributed to improved manufacturing output, which helped the economy hobble out of recession late last year, with a 2.2-percent annualized rate of expansion from October to December.

But economic growth for the year was flat after a sales tax hike in April sapped demand, and overall net exports continued to drag on growth. Still, a stronger US economy has helped.

Japan’s exports to the US rose 16.5 percent in January, while imports fell 1.4 percent, leaving a trade surplus of ¥545.4 billion ($4.6 billion). But exports to China, whose economy has been slowing, jumped nearly 21 percent from a year earlier, as imports fell almost 7 percent, leaving a trade deficit of ¥736.4 billion ($6.2 billion), down almost 30 percent.

Meanwhile, a strategy of balancing Japan’s trade and investment in China with closer economic ties to the rest of the region is paying off, as exports to other East Asian countries and Southeast Asia surge. AP