Businessmirror january 11, 2015

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

U.N. Media Award 2008

BusinessMirror

www.businessmirror.com.ph PAPAL VISIT 2015

A broader look at today’s business

n Sunday, January 11, 2015 Vol. 10 No. 94

week ahead

ECONOMIC DATA PREVIEW Foreign exchange n Previous week: The local currency flirted with the 45 territory in the first week of 2015 on different statements from the local economic agencies, as well as some initial indicators from the US economy. In the first trading day of the year, the peso closed at 45 to a dollar, then slightly appreciated on Tuesday to 44.93 to a dollar.

The local currency then went back to the 45 territory to trade at 45.045 to a dollar on Wednesday and 45.065 against the US dollar on Thursday, before reverting back to the 44 territory at the week’s close at 44.95 to a dollar on Friday. The total traded volume during the period was at around $3.72 billion. n Week ahead: Traders see foreign exchange to continue its rally against the US dollar with the band of a high 44 and a low 45 this week, as the market searches for fresher leads and developments. The foreign-currency trading platform operation is also shortened this week due to the pope’s visit from January 15 to 19.

Remittances (November 2014) January 14, Wednesday

n October remittances: Cash remittances—or money sent by overseas Filipino workers (OFWs) to the Philippines through banks and accredited financial institutions— reached $2.224 billion in October 2014. It is a Continued on A2

Abaya says no choice but to take over MRT

By Lorenz S. Marasigan

4 DAYS

D

ESPITE hitting a roadblock at the House of Representatives, the Department of Transportation and Communications (DOTC) will continue to pursue the multibillion-peso takeover of the Metro Rail Transit (MRT) System, a Cabinet official said.

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Transportation Secretary Joseph Emilio A. Abaya said his office is studying the options on how to execute the P54-billion acquisition of MRT Corp. (MRTC), owner of the assets of the train line, after the lower chamber had decided earlier this quarter to strike out the budget allocated to implement the buyout.

“We have to see the final form of the budget, and we’ll see what our options are,” he said, refusing to divulge his agency’s approach in executing the takeover. “We’re not left with just one option, there are other options. We’ll see. We have to check what is there.”

He said his persistence, despite the flak from several lawmakers, is driven by the order of President Aquino for his agency to take the reins of the most congested train line in Metro Manila.

“It’s going to be more of a legal approach to things,” he said.

“How could we not pursue the buyout? We have been directed by the President to execute this.”

In 2013 Mr. Aquino issued Executive Order 126, directing the DOTC, the Department of Finance, the Development Bank of the Philippines and the Land Bank of the Philippines to execute the takeover of MRTC. It will be pursued through Continued on A2

Monetary Board seeks Q4 recovery

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By Bianca Cuaresma

ARLY economic indicators point to a more rosy growth picture for the Philippines in the months of October to December 2014, indicating sound underlying conditions amid the deceleration of growth in the third quarter of last year, the Monetary Board (MB) noted.

In the highlights of its monetary-policy meeting released recently, the MB showed confidence that the Philippines will recover from the slower-than-expected third-quarter growth last year.

The board noted indicators that “continued to point to a positive growth momentum in the fourth quarter of 2014.”

In particular, business expectations turned more upbeat from October to December 2014, compared to the July-to-September period during the year on the back of the higher economic activity brought about by the holiday season and the end of harvest season.

Local companies also expressed optimism of the economy’s expansion, as earlier indicated in the quarterly survey of the Bangko Sentral ng Pilipinas, owing to the anticipation of projects to be rolled under the Public-Private Partnership Program.

See “Monetary Board,” A2

PESO exchange rates n US 45.0640

Paris attack underscores a deeper malaise GlobalEye»C2

Low oil prices may spike interest rates– market expert

A

SENIOR market expert said the continued plunge of oil prices in the world market is feared to post risks to global economic growth and higher interest rates in individual economies, including the Philippines, but maintained that the country’s economy remains robust enough to be able to offset the foreseen negative effects.

In the recent 2015 First Metro Investment Corp. (FMIC) Philippine Economic Briefing, FMIC Senior Vice President Reynaldo B. Montalbo Jr. said that the oil prices may put an additional pressure on market interest rates in 2015.

“Right now, when they say oil prices to drop below $50, all the way to $40 [per barrel], the concern is that there are a lot of oil-producing countries—like Venezuela, those in the Middle East, Russia—that will be affected and their growth will shrink; so when the growth will shrink, they will have a negative impact on world economic growth,” Montalbo said.

“So with world economic growth declining, there is a perception that there is a slowdown. So, with that, there is always fear that the Philippine economy will also be negatively affected and, when that happens, there is a fear that our growth will also be affected because they, too, are our market,” Montalbo added.

“If that is the case, interest rates will be higher, because our growth will be in peril,” he further explained.

Oil prices in the global market have been continuously dropping starting end-2014, leaving related oil-market players scrambling. As an effect to the country, the inflation toward the end of the year sharply slowed and transportation costs have been reduced.

Amid the expected fears in the market, Montalbo said the country must not put so much thought into the lower oil prices and enjoy the low rates of fuel while it lasts.

“When you start looking at the fundamentals, you will see that we should be insulated from the impact,” Montalbo said.

“Remember, a large part of our import expenses is oil,” he added. Bianca Cuaresma

n japan 0.3766 n UK 67.9926 n HK 5.8110 n CHINA 7.2514 n singapore 33.7305 n australia 36.6225 n EU 53.1485 n SAUDI arabia 12.0059 Source: BSP (09 January 2015)

News BusinessMirror

A2 Sunday, January 11, 2015

Abaya says no choice but to take over MRT

Employment...

the acquisition of all outstanding shares of stocks and other securities issued by the private concessionaire and entities that own the MRT.

The government aims to fully own the line by 2016, but it recently stumbled upon several roadblocks, such as oppositions from the private owners of the MRTC and Congress’s decision to slash out the buyout’s allocation from this year’s budget.

But for the transportation secretary, there is still ample time to execute the buyout.

“I think we still have enough time. Of course, the reality is some guys obviously don’t welcome this; but clearly, how could I renege on a presidential directive just because Congress decided not to give us the fund? What is clear to me is that there is a directive from the President,” he said.

In order to implement the P54-billion takeover deal, the government must strike a compromise deal with the private owner of the train line, which is wholly owned by MRT Holdings II Inc. of businessman Robert John L. Sobrepeña.

Signing a compromise deal

“There are certainly more jobs available out there,” said Courtney, who is earning about 20 percent more now and works from home in Lawrenceburg, Indiana. “This is exactly what I wanted. I was pretty confident I’d find a new job, and it wasn’t too difficult.”

Wage gains have lagged behind the pace of employment growth.

Increased incomes, combined with the cheapest fuel costs since 2009, are needed to help lay the ground work for a pickup in the household spending that accounts for about 70 percent of the economy.

The outlook is improving for earners at the lowest end of the income ladder. Voters approved ballot measures and legislatures enacted laws that allowed the minimum wage to rise in almost half of US states on January 1. The advances may be reflected in the wage data in the jobs report for January.

Stronger employment growth underscores the US economy’s resilience in the face of cooling markets that stretch from Europe to China.

would effectively end the ongoing arbitration case in Singapore that was lodged against the government in 2008 owing to its failure, as the operator of the line, to pay billions of equity rentals payment 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 needs, while retaining regulatory functions for passenger protection with the government.

Currently, the government is rolling out a P9.7-billion rehabilitation plan for the MRT, which serves 550,000 passengers daily, way beyond its rated capacity of 350,000 passengers per day.

It includes the procurement of additional coaches; general overhauling of trains; ancillary systems upgrade; platform edge doorstep; signaling system upgrade; steel-rail replacement; communications-system upgrade; traction motors replacement; and the improvement of the overhead catenary system.

The rehabilitation venture also includes the installation of a security fence and noise

Continued from A1

week ahead

Continued from A1 7-percent growth rate from the $2.079-billion remittances seen in October last year. The latest monthly remittance volume to the Philippines pushed the 10-month total remittance volume to the country at $19.869 billion. n November remittances: Remittance flows toward the country nearing the end of the year will have remained buoyant and accelerating due to uptick in business activity and expense expectations for the holiday season. In previous statements toward the end of 2014, the central bank governor said the continued high inflow of remittances toward the end of the year supported the peso.

Papal visit

January 15 to 19, Wednesday to Monday By virtue of Proclamation 936, President Aquino declared January 15, 16 and 19 as special nonworking holidays at the National Capital Region. As such, there will be suspension of work in government offices including the BSP’s clearing and settlement operations. As a result, trading markets—including the Philippine Stock Exchange and the Philippine Dealing System—will be forced to, likewise, suspend their operations during the period.

Bianca Cuaresma

news@businessmirror.com.ph

Monetary Board...

The BSP also noted the results of the monthly Purchasing Managers’ Index (PMI) indicating continued expansion of domestic output after slowing down in the third quarter.

This is due to the already resolved supply chain problems seen in the third quarter of the year.

The sustained expansion in

continued from A1

bank lending, according to the central bank, also supports the view that underlying domestic demand remains strong amid the sharp slowdown in the third quarter of 2014.

In a separate commentary, the international DBS Bank still noted risks to the country’s gross domes-

barrier; consulting services; upgrade of conveyance facilities; a footbridge for the North Avenue Station; weather-protection cladding; Internet connection; passenger-information system; and passenger hand straps.

Separately, the local flagship of the Hong Kong-based First Pacific Co. Ltd. is proposing to shoulder the upgrade costs of the train system and free the government from paying billions of pesos in equity rental payments.

Metro Pacific Investments Corp. President Jose Maria K. Lim said his group will soon submit its $524-million proposal to the Department of Transportation and Communications, which has already rejected a $565-million offer.

The lower budget for the offer,

Metro Pacific Business Development Officer John B. Echauz explained, stemmed from the removal of the automated fare collection system and another component from the proposal.

The unified-ticketing system project was auctioned off by the transportation agency in 2013, and was awarded last year to the consortium between Metro Pacific and Ayala Corp.

The total $524 million also included the $30-million working capital and the $229-million budget for the settlement of the government’s equity rental payment.

The group of businessman Manuel V. Pangilinan earlier entered into a partnership agreement with the corporate owner of the MRT, a move that would have allowed the Pangilinan group 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 these to carry more pasengerss. The multimillion-dollar expansion plan would double the capacity of the line to 700,000 passengers a day.

It was submitted in 2011, but then-Transportation Secretary Manuel Roxas II rejected the proposal.

tic product (GDP) going forward in 2015.

“A pullback in private consumption growth is definitely a huge risk on GDP growth outlook this year. And it is one that may change the central bank’s policy trajectory,” the DBS Bank said.

“For now, we still think downside risks on GDP growth are fairly limited, but a close monitoring on

core inflation trend going forward is warranted,” the DBS Bank added.

According to the international bank’s research team, the moderation in core inflation as seen in the previous months is a “crucial factor” if it were to be sustained.

“One wonders if we are beginning to see second-round impact from the sharp fall in fiscal spending last year,” the bank said.

ABAYA: “The reality is some guys obviously don’t welcome this; but clearly, how could I renege on a presidential directive just because Congress decided not to give us the fund?”

3-DAY EXTENDED FORECAST JANUARY 11, 2015 | SUNDAY

TODAY’S WEATHER

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

JAN 13 TUESDAY

METRO MANILA

20 – 31°C

21– 31°C

TUGUEGARAO

18 – 30°C

20 – 29°C

JAN 14 WEDNESDAY

BAGUIO

LAOAG CITY 19 – 30°C

TUGUEGARAO CITY 19 – 29°C

SBMA/ CLARK

BAGUIO CITY 11 – 23°C SBMA/CLARK 22 – 30°C TAGAYTAY CITY 17 – 28°C

TAGAYTAY

LEGAZPI

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

US leading

Greenbrier Cos. is among companies that are expecting stronger domestic demand. The Lake Oswego, Oregon-based supplier of railroad equipment boosted its annual forecast after reporting a record backlog in the first quarter.

“Macroeconomic conditions indicate strength and expansion for the US economy in 2015 and beyond, with lower energy prices creating a strong impetus for auto production, consumer spending and overall growth,” William Furman, CEO, said in a news statement on January 7.

JAN 12 MONDAY

JAN 13 TUESDAY

JAN 14 WEDNESDAY

21 – 30°C

METRO CEBU

24 – 31°C

24 – 29°C

23 – 30°C

20 – 30°C

TACLOBAN

24 – 29°C

24 – 28°C

24 – 28°C

21 – 31°C

CAGAYAN DE ORO

19 – 30°C

12 – 23°C

21 – 31°C

18 – 28°C

20 – 31°C

24 – 29°C

25 – 28°C

24 – 30°C

METRO DAVAO

12 – 23°C

24 – 30°C

24 – 32°C

22 – 32°C

24 – 33°C

25 – 33°C

18 – 29°C

12 – 23°C

22 – 31°C

ILOILO/ BACOLOD 23 – 31°C

TACLOBAN CITY 24 – 30°C

METRO CEBU 23 – 31°C

ZAMBOANGA CITY 24 – 32°C

PUERTO PRINCESA

ILOILO/ BACOLOD CAGAYAN DE ORO CITY 23 – 31°C METRO DAVAO 24 – 31°C

23 – 30°C

23 – 31°C

ZAMBOANGA

24 – 32°C

24 – 31°C

23 – 32°C

SUNSET

MOONSET

MOONRISE

6:24 AM

5:44 PM

10:15 AM

10:38 PM

23 – 32°C

FULL MOON HALF MOON

23 – 31°C

24 – 32°C

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

CELEBES SEA

LOW TIDEMANILA HIGH TIDE SOUTH HARBOR

JAN 13

8:31 AM

0.03 METER 12:53 PM 5:46 PM Partly cloudy to cloudy skies with isolated rain showers and/or thunderstorms

Cloudy skies with rain showers and/or thunderstorms.

Partly cloudy to at times cloudy with rainshowers Light rains

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

24 – 32°C

SUNRISE

JAN 05

24 – 30°C

25 – 29°C

19 – 29°C

LEGAZPI CITY 22 – 31°C

PUERTO PRINCESA CITY 23 – 31°C

3-DAY EXTENDED FORECAST

Successful search

NORTHEAST MONSOON AFFECTING LUZON. (AS OF JANUARY 10, 5:00 AM)

LAOAG

METRO MANILA 20 – 30°C

JAN 12 MONDAY

continued from A8

@PanahonTV

1:00 AM

0.82 METER

EconomySunday

www.businessmirror.com.ph • Editor: Vittorio V. Vitug

BusinessMirror

Sunday, January 11, 2015 A3

Govt eyes minimum-wage adjustment for NCR workers

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By Estrella Torres

ABOR Secretary Rosalinda D. Baldoz said the government will announce a new adjustment to the minimum wage of workers in Metro Manila, owing to the recent increases in commuter train systems’ fares and changes in prices of basic commodities.

Baldoz said the Regional Tripartite Wage and Productivity Board (RTWPB) in the National Capital Region will meet with private sector groups and representatives of minimum-wage earners by end of

January and early February, respectively, to tackle the minimumwage adjustments.

In determining minimum wages, Baldoz said the regional wage boards consider the basic needs of

workers and their families, such as food and nonfood commodities, including cost of transportation, particularly adjustments in publicutility vehicle (PUV) fares.

“Minimum wages are aimed to primarily protect poor and vulnerable workers from undue low wages,” Baldoz said in a news statement released over the weekend.

She said the Wage Rationalization Act of 1989 recognizes the importance of the differences in the levels of living and socioeconomic development across regions, and the RTWPBs take these into account in setting minimum wages.

Baldoz added that minimumwages are based on the following indicators (1) most recent poverty income threshold for a family; (2) average

Baldoz: “On the second week of February, the board will tentatively conduct a public hearing as part of the minimum wage setting process. Its results will be the basis for a decision on the petitions filed by the sectors”

wage as measure of employers’ capacity to pay; (3) socioeconomic conditions, such as the labor force, employment, unemployment, and underemployment; (4) business conditions, such as gross regional domestic product, trends and outlook

of key industries in the region; (5) prices, such as the consumer price index, which is used to compute inflation rate; and (6) purchasing power of the peso. The Department of Labor and Employment, meanwhile, established the minimum-wage reform under the two-tier wage system.

The two-tier system aims to close the gap between the minimum wages and the poverty thresholds in the country’s 16 regions. Baldoz said the regional wage board in the NCR regularly monitors trend in oil prices in the global and local markets “The RTWPB-NCR is presently studying the impact of the P10 adjustment in Metro Rail Transit [MRT] fare, as well as the possible further reduction in the fare in public-utility jeepneys, following the P1 fare re-

duction in the last quarter of 2014.

All these adjustments and related developments will be considered by the board in making a decision on minimum-wage adjustments,” Baldoz said.

Both labor and management sectors filed separate petitions before the RTWPB-NCR due to the economic conditions and recent MRT/ Light Rail Transit fare increase.

The regional wage board has scheduled consultations with labor and management sectors and other stakeholders on January 23 and 30.

“On the second week of February, the board will tentatively conduct a public hearing as part of the minimumwage setting process. Its results will be the basis for a decision on the petitions filed by the sectors,” Baldoz said.

PCCI, HK trade body agree to promote 16 priority sectors

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HE Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization, and the Hong Kong Trade Development Corp. (HKTDC) signed a memorandum of agreement (MOA) to promote 16 export sectors with the best business potential, PCCI President Alfredo M. Yao said.

Yao identified the priority sectors as fashion, garments and textiles; housewares, furniture and furnishings, handicraft, decorative arts and crafts, gift and premium items, fash-

Holy enterprise

A sales clerk of the Immaculate Conception Church in Baguio City proudly shows samples of Pope Francis key chains and necklaces fashioned from resin and designed and carved by Ifugao woodcarver Wilson Abagge in his home shop in Asin Road, Benguet province. The items are being sold at P200 for every key chain and P220 for the necklace. The proceeds will go to the construction of a proposed Church along Kisad Road also in Baguio City. Mau Victa

IdeaSpace gears up for regional role in 2015 Asean integration

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By Lorenz S. Marasigan

OCAL start-up incubator IdeaSpace Foundation Inc. has set its sights on a more challenging regional role for its accelaration program, its president said, as efforts toward the creation of a unified Asean Economic Community (AEC) continue steadily.

IdeaSpace Foundation President and Cofounder Earl Martin Valencia said the Asean integration scheme gives his group the opportunity to showcase its technology prowess and business acumen to expand beyond the borders of the country.

“The world has seen how the Southeast Asian region is becoming one of the most important start-up hubs in the world, and the Philippines is well-positioned to become the region’s innovation bright spot in the years to come,” he said. “Our start-ups have the talent, the skills, and now the resources to make it big regionally and globally.”

The Asean integration bats for the creation of the AEC, a single-trade market that includes 10 member-nations—Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar (Burma), the Philippines, Singapore, Thailand and Vietnam.

Valencia said the AEC will create better market runway for technology start-ups to expand outside the Philippines and create new market opportunities for unique innovations developed in the Philippines.

For its 2015 start-up competition, for example, IdeaSpace has seen increased interest from early-stage start-ups in neighboring Asean countries, with submissions coming from Singapore, Malaysia, the US, Brazil, Mexico, England, Hungary, the United Kingdom and India, among others. The competition is slated to close for submissions on January 15.

Similarly, some of the start-ups that IdeaSpace had invested in over

the years are making its mark in the region and around the world.

These include TimeFree Innovations, a virtual queuing start-up, which has successfully deployed its solution to other countries, most recently in Malaysia. Meanwhile, Tudlo, which focuses on providing mobile tools for disaster preparedness and mitigation, has recently been invited to the Future Innovators Summit in Austria.

Another IdeaSpace-backed start-up, SALt (Sustainable Alternative Lighting), which developed a saltwater-powered lamp and mobile charger, emerged as the only Asian start-up to place in the top 5 out of participants from 50 countries in the recently held World Startup Competition.

“These start-ups have proven that Philippine innovations, when combined with the grit and mettle of the founders behind them, can make it big in the world stage,” Valencia stressed. “This has been the vision of IdeaSpace from the very beginning.” Now on the third year of its fiveyear investment commitment, the IdeaSpace Startup Competition will be accepting entries online until January 15.

The top 20 ideas after three rounds of judging will officially enter IdeaSpace’s six-week incubation phase, where each start-up will receive a P50,000 grant for prototype development, presentation materials, and customer validation, among others.

After the incubation phase, the IdeaSpace Board of Trustees will select the top 10 start-ups that will enter the acceleration phase, an intensive 18-week program that will help each start-up develop their products, set up their corporation and business permits, and conduct market validation, among others.

Each start-up that successfully enters the acceleration phase will get P500,000 in seed funding, plus a separate grant worth at least another P500,000 inclusive of business-management classes, marketing and financial consulting, intellectual property consulting and incorporation, office space, and business registration costs, among others.

Etihad Airways makes it on top 10 safest airlines list

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tihad Airways, the national airline of the United Arab Emirates (UAE), has been recognized as one of the top 10 safest airlines in the world. Etihad operates two flights daily between Abu Dhabi and Manila using Boeing 777-300 aircraft with 28 seats in Business Class and 384 in Economy Class.

The internationally regarded web site www.AirlineRatings.com selected Etihad Airways as one of the safest airlines for 2015, out of a list of 449 global airlines monitored, while only 149 of the 449 have the top 7-star safety ranking.

The airline ratings system takes into account a variety of factors related to audits from aviation’s governing bodies and lead associations, as well as government audits and the airlines’ own records.

James Hogan, president and CEO of Etihad Airways, said: “Our commitment to the safety and security of our guests and staff is a cornerstone of our company.

We’re naturally delighted to be listed in the top 10 and that’s where we want to stay. All of our staff are accountable for the delivery of the highest level of safety performance.”

As an example of the company’s approach, Etihad Airways’ Innovation Center in Abu Dhabi is home to the airline’s Training Academy, which comprises the largest A380 and B787 cabin and safety trainer facility in the world. Measuring around 30 meters long and between 6 and four meters high, the safety trainers are fully functioning models and were built under licence, using data supplied by Airbus and Boeing.

ion and accessories, gems and jewelry, food, intellectual property, logistics, licensing, franchising, finance, film and TV, and information and communications technology.

Yao said the MOA was signed by Dr. Francis Chua, PCCI chairmanemeritus; and Benjamin Chau, deputy executive director of the HKTDC, in Hong Kong last month.

Under the agreement, Yao said the chamber and HKTDC expressed their intent to cooperate on promoting increased bilateral commercial activity

for the benefit of the Philippines and Hong Kong business communities, particularly the small and medium enterprises, and to strengthen economic partnership between the Philippines and Hong Kong.

PCCI provides focused advocacy for business growth and sustainable development by providing business services for the advancement of grassroots entrepreneurships, chamber development, international trade relations, business innovation and excellence, and operating efficiency.

SundayV

Busine

A4 Sunday, January 11, 2015

editorial

Cartels and the public interest

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ARTELS are producers’ organizations aimed at the control of production and the fixing of price, activities that are anathema to the public interest. In most countries, including the United States, they are illegal.

The first time we heard of cartels was in 1972, when petroleum-producing countries began actively implementing the objective of the Organization of Petroleum Exporting Countries (Opec), which was to fix the price of petroleum for the avowed purpose of protecting the interest of petroleum-exporting countries. As a result, the price of oil went up from some 10 cents a barrel to some $10 a barrel.

In the Philippines we hear of cartels each time November to December comes. These are rice-lean months and the price of rice goes up during this period. Consumer groups rise in protest. Legislators form investigating teams and go to Binondo. They then come to the conclusion that a cartel operates from there, controlling and dictating the price of rice.

Related to this issue, the National Food Authority (NFA) is often accused of acting as a monopoly in the importation of rice or of granting import licenses to some favored rice importers. These actions notwithstanding, the NFA is unable to arrest increases in the price of rice.

Now comes the report that 119 public officials, including the highest officials of the Bureau of Plant Industry, importers and several farmers’ associations and multipurpose cooperatives are facing criminal charges at the Office of the Ombudsman “for their alleged role in the spike of garlic prices last year.”

Whether cartels do operate in the garlic and/or the rice markets is still to be proven in court. Whatever the reality on the ground is, there are some things we must know about cartels. Cartels contain the seeds of their own destruction. There will be some members who will cheat by increasing production in stealth and taking advantage of the cartel price. Either they are discovered and thrown out of the cartel or they remain in the cartel and continue to undermine it, causing the cartel to weaken and lose its price-setting power.

With respect to Opec, in the face of sinking oil prices, members in their last meeting committed themselves not to decrease production levels but to maintain them, in order to keep their share of the market, however steeply the price of petroleum falls. This is contrary to expected cartel-like behavior (requiring a separate analysis), but it is in the best interest of the consuming countries.

In the case of the Philippines, those accused of cartel-like conduct must answer the accusation and show that they are not guilty of conspiring against the public interest.

All things considered, the solution to the cartel problem is not to go on a witch hunt or even to rely on a cartel member to destroy the cartel from within, but to remove the very foundation of cartels—barriers to trade, high tariffs, import licenses, etcetera—and promote freedom of exchange among members of the community.

RBS says ‘sayonara’ to world’s weirdest bond market J

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APAN has long been the world’s living laboratory for observing what happens when a large chunk of the population grows old.

Now, it’s also a financial testing ground—demonstrating how a huge, developed economy will live without a bond market.

The nation has loads of bonds—¥1 quadrillion ($8.67 trillion) worth— but no real market for them. That’s because the Bank of Japan (BOJ), in its aggressive campaign to end deflation, is nationalizing the debt arena.

In response, Royal Bank of Scotland is saying “sayonara” to Japan’s debt business, giving up its position as a primary dealer.

Haruhiko Kuroda, governor of Japan’s central bank, has been buying up roughly $100 billion in debt per month, immobilizing trading opportunities and giving new meaning to the old concept of “crowding out.”

That’s when government dominates an area of the private sector to the point where the laws of supply and demand stop working. That’s where Japan finds itself as the BOJ bigfoots individual buyers and narrows the investor base.

With more than 90 percent of IOUs held domestically, Japan is already the Galapagos of debt realms.

As yields disappear, it’s looking like the financial equivalent of “The Matrix,” where market reality is a simulated one.

It’s impossible, after all, to rationalize a nation’s 10-year bonds with a public debt two-and-half times bigger than the economy. Soon, quips

Richard Duncan of Blackhorse Asset Management, people will be paying Japan’s government for the right to hold its debt. “The very low JGB yields,” he says, “certainly do indicate that something is very wrong.”

It also indicates why central bankers in the US and Europe need to tread carefully with their own quantitative-easing schemes. Japan is also the word’s lab for the post-QE experience. How it copes without a conventional debt market will offer timely lessons for policymakers from Washington to Frankfurt.

Among the unknowns is how corporate borrowers price debt. Deciding on a security’s coupon, maturity and structure is a challenge in the best of times. But, when yields on 2- and 5-year Japanese debt are going negative—and 10-year bonds are heading that way, too—corporate treasurers might as well rely on a coin toss. That could lead to mispricing on an epic scale.

Kuroda has been driving down sovereign yields to encourage investment in riskier corporate notes and stocks. But, when it comes to measuring risk, says Marshall Mays, director of Emerging Alpha Advisors, Kuroda’s massive easing efforts have obliterated the lines between perception and reality.

Another problem is the replacement of old bubbles with new ones. As I’ve written before, Kuroda is adding fresh fuel for the world’s most obvious bond bubble. Even if the BOJ were to achieve its 2-percent inflation goal, it would struggle to keep

yields from skyrocketing. Kuroda would need to buy up ever-larger blocks of debt, further warping the financial system and forcing the BOJ to feed an expanding pyramid scheme.

How to mitigate the damage?

Avoid encroaching so much on the bond market. While it’s possible that Janet Yellen’s Federal Reserve can avoid this fate, Mario Draghi’s European Central Bank might not, as deflation grips the continent.

Deadening the mechanics of European and US bond markets, Japanstyle, would raise the odds of another global crisis. What’s more, without the risk-measuring function that yields provide, investors won’t see it coming.

Central banks also should turn up the heat on government policy makers—something the BOJ has avoided. Becoming a crutch for riskadverse politicians has its dangers— including, in Japan, renewed recession and disappearing yields. Huge injections of liquidity should come with quid pro quos: We do X on monetary side, you do Y on the fiscal side.

For Japan, the end, as Duncan points out, may justify the means.

“I believe the BOJ will eventually write off all the government debt it’s acquiring through QE,” he says.

“I think that will be a good thing as it will greatly reduce the level of Japan’s government debt.”

But a functioning and trusted debt market is the backbone of any healthy economy. Japan no longer has one.

Gospel

Sunday, January 11, 2015

A

nd he preached, saying, “After me comes He who is mightier than I, the thong of whose sandals I am not worthy to stoop down and untie. I have baptized you with water; but He will baptize you with the Holy Spirit.” In those days Jesus came from Nazareth of Galilee and was baptized by John in the Jordan.

And when He came up out of the water, immediately He saw the heavens opened and the Spirit descending upon Him like a dove; and a voice came from heaven, “Thou art my beloved Son; with thee I am well-pleased.”—Mark 1:7-11

Voices

essMirror

opinion@businessmirror.com.ph • Sunday, January 11, 2015 A5

Tax reform: Still not happening T Bloomberg View

By Ramesh Ponnuru

AX reformers’ hope springs eternal, but don’t bet on a big tax deal in 2015 or 2016. Don’t bet on a medium-sized one either.

The parties are too far apart to enact a sweeping reform of the US tax code that includes the personal-income tax. Most Republicans want fewer tax breaks, lower rates and especially a lower top rate, and they don’t want the total tax burden to rise. Democrats want fewer tax breaks, too, but they count different provisions as “breaks”. And they want to increase revenue.

Maybe those differences could be bridged, though it would be extremely hard. But there’s a bigger problem:

The Republican insistence on lower rates is impossible to reconcile with the Democratic concern that the top 1 percent of earners have too much money, too much power and too much influence over the government.

It might be possible to lower rates and scale back tax breaks in a way that increases the top 10 percent’s share of the tax burden. But there’s no way to do so without shrinking the burden for the top 1 percent. The benefit of a lower rate for them will always be bigger than the benefit of tax breaks. That means that a lower top rate is going to be off limits for Democrats. But for Republicans, lowering that rate is the main point

of getting rid of tax breaks. No deal.

Okay, then, what about corporate tax reform? Most Republicans and Democrats agree that the corporate tax rate should be lowered and tax breaks for companies should be scaled back, right? In theory, yes.

Here, though, the difference between the parties on what counts as an unjustified tax break are an obstacle to a deal. Many Democrats want to make companies write off the cost of investments over a longer time frame than they do today. A reform that does so would increase the tax burden on new investments by corporations, which makes it on balance a step backward from

Republicans’ point of view.

Assume, though, that congressional dealmakers could find a way around that issue. The probably insuperable problem that’s left is that small businesses mostly pay taxes under the individual, rather than the corporate tax code. Those small businesses saw their tax rates go up in 2013. That creates a political problem for corporate tax reform: It seems unlikely that Congress would now cut rates for big businesses while offering no relief for most small businesses.

Ending this impasse would require a new approach, as Rep. Devin Nunes, a California Republican, has

been urging for some time. He thinks that all businesses, however organized, should be able to write off the cost of an investment in the year the cost is incurred. He would make up for the lost revenue by ending tax breaks for companies’ borrowing.

But that’s still a minority position in Congress.

A broader reform of the income tax, meanwhile, will require one of two things to happen. Either one of the parties needs to back away from some of its commitments, or one of them needs to gain unified control of the government, and then make its version of reform a priority.

Be prepared to wait a while.

No nation wants to be labeled ‘least developed’

By Ahmed Sareer Inter Press Service

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EW YORK—Since 1971, Maldives is one of only three countries that have graduated from the ranks of the world’s “least developed countries” (LDCs)— the other two being Botswana and Cape Verde.

The Maldives graduated on January 1, 2011. The review of LDCs conducted in 1997 concluded that the Maldives was ready for immediate graduation.

The Maldives government argued that the UN criteria for graduation should include a “smooth transition period” in order to bring into place adequate adjustments necessary for full transition into middle-income country status.

The UN Resolution adopted on December 20, 2004, endorsed and adopted these arguments. Under that resolution, the Maldives was set to graduate from the list of LDCs on January 1, 2008.

Just six days after adoption of the resolution, the Indian Ocean tsunami struck the Maldives.

The Maldives economy, which had

grown at an average of 8 percent per annum for two consecutive years, was devastated by the tsunami: 62 percent of the gross domestic product was destroyed; over 7 percent of the population was internally displaced; social and economic infrastructure damaged or destroyed in over one quarter of the inhabited islands; 12 inhabited islands were turned into complete rubble.

Following the disaster and on the request of the Maldives, the General Assembly decided to defer the graduation until 2011, with a smooth transition period until 2014.

Graduation from LDC does not help a country to overcome the development challenges it faces. Graduation does not make a country less vulnerable to the consequences of its geography.

It is no secret that small islandstates being assessed for graduation do not meet the threshold for economic vulnerability.

Sm a l l i sl a nd- st ates of ten achieve their high development status because of high and consistent investment in human resources, and the social sector, as well as government administration.

This leaves limited financial resources for the country to prepare for natural disasters or to carry out mitigation and adaptation measures.

Countries often have to rely on multilateral and bilateral donors for assistance for environmental projects: Donors that often assess a country’s need by its developmental status at the UN, which traps countries such as the Maldives in a vicious cycle being now termed as the “Middle Income Paradox”.

However, all this is conveniently ignored or overlooked.

Graduation from LDC status need not be feared, nor does it need to be an obstacle in a country’s development path. We only fear what we don’t know.

T he Ma ldives’s ex per ience showed that due to the infancy of the graduation program, the relatively low number of countries that have graduated, and the lack of coordinated commitment from bilateral partners, the graduation process has been far from smooth.

The General Assembly Resolution, which the Maldives helped to coordinate, adopted in December 2012 provided a smooth transi-

tion for countries graduated from the LDC list. The resolution has put into place greater oversight ability for the UN and articulated the need for a strengthened consultative mechanism for the coordination of bilateral aid.

The Maldives has tried to make the path for subsequent graduates smoother. Yet, it is a fact that the graduation process still relies on flawed criteria.

While no country wants to be termed the “least” on any group, it cannot be denied that inherent vulnerabilities and geophysical realities of some of the countries that often extend beyond their national jurisdiction, need help that are specific and targeted, in order to improve the resilience of those countries.

It is for that reason that the Maldives lobbied extensively with the World Trade Organization (WTO) to extend the application of TRIPS for all LDCs. Following graduation, the Maldives also applied to join the EU’s Generalized System of Preferences but new regulations prevented Maldives from the scheme. This posed a significant loss to our fishing

industry, which is the export sector in the economy.

The Maldives has been continually exploring the viability of a “small and vulnerable economy” category at the UN, similar to that which exists in the WTO. Such a category will acknowledge the particular needs of countries arising from the smallness of their economies and inherent geographical realities. Small island-states have continually argued that special consideration needs to be given to SIDS that are slated for graduation. Yet, these voices of concern have fallen largely on deaf years.

But the needs of our people, the development we desire cannot wait to be recognized.

That is why the Maldives decided to take our development path into our own hands. This can be done by consistently employing good policies.

Development is the result of a combination of bold decisions and an ability to seize the opportunities.

SIDS have shown to the world that we are not short of smart ideas. Rather than relying on others, we have to develop our own economies our way!

photos or exhibits that might offend Islamic fundamentalists, along with the request of a group of Danish imams that the Danish government censor press coverage of Islam.

I spoke by phone to Rose in Copenhagen. (He recently published a prescient book in the United States titled The Tyranny of Silence: How One Cartoon Ignited a Global Debate on the Future of Free Speech.)

“Today cannot be a surprise to anyone who has followed events over

the past 10 years,” he said, sadly.

“Charlie Hebdo was maybe the only paper in Europe that didn’t cave in after what we went through or after the fatwa against Rushdie,” Rose continued. Most other media in Europe accepted self-censorship due to intimidation or fear of violence, but Charlie Hebdo kept making fun of all kinds of religions, including Islam, despite the death threats. Today they paid the price for not being willing to shut up.”

The question now, says Rose, is how Europeans and Americans will react to these murders. “Are we going to accept this new order—in which we have to be very careful of what we say? Or are we going to ask ourselves what are the minimum limits in order to live in peace with each other?”

In Rose’s mind, those limits should exclude any incitement to violence. “It should be a criminal offense to say ‘attack Muslims,’” he says, but not to offend Muslims—or any other religious group—in a newspaper or text. That, he says, is the price of living in a democracy, where the right to free speech distinguishes between words and deeds.

Moreover, giving in to self-censorship does no favor to Muslims. Wouldbe Muslim reformers in the Arab world and elsewhere are suffering from blasphemy laws that threaten death to anyone who criticizes their religion. And the Charlie Hebdo murders are likely to help the European “Far Right” and create more prejudice against Islam than any cartoons.

Stand up for free speech

By Trudy Rubin

The Philadelphia Inquirer (TNS)

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EDNESDAY’S shocking terror attack on the French satirical journal Charlie Hebdo should finally awaken Western publics to the threat posed by radical Islamists to free speech worldwide.

That threat may seem obvious when 10 journalists from a newspaper that published caricatures of the Prophet Muhammad are murdered by masked men with Kalashnikovs shouting “Allahu Akbar”.

Yet, these assassinations follow a rising number of death threats and violent protests by Islamic fundamentalists against Western books, films, or newspapers they deem offensive. Many Western observers have blamed the authors—for disrespecting Islam—rather than those who organize the violence.

Let’s hope the Charlie Hebdo murders debunk that fuzzy thinking. Religious zealots can’t be permitted to define the limits of our free speech.

That was the attitude of Charlie Hebdo, whose comic jibes spared no one. In 2011 the magazine’s office was firebombed as it was about to publish a cartoon cover depicting the prophet Muhammad saying, “100 lashes if you’re not dying of laughter.”

“We want to laugh at the extremists—every extremist,” staffer Laurent Leger said in a French TV interview in 2012. “They can be Muslim, Jewish, Catholic. Everyone can be religious, but extremist thoughts

and acts we cannot accept.”

“In France we always have the right to write and draw,” he added.

“And if some people are not happy with this, they can sue us and we can defend ourselves. That’s democracy.

You don’t throw bombs; you discuss, you debate. But you don’t act violently.” (Leger was wounded on Wednesday but survived.)

Yet, when Islamic fundamentalists repeatedly threatened violence for Western media portrayals of the prophet Muhammad, many commentators blamed the victims.

These threats began when Iran’s Ayatollah Khomeini issued a fatwa in 1989, calling for the death of author Salman Rushdie because his novel The Satanic Verses supposedly “insulted” Islam. Many Western critics labeled Rushdie a provocateur.

When the Danish newspaper Jyllands-Posten published cartoons of Muhammad in 2005, leading to deadly riots in several Muslim countries and death threats against the cartoonists, many observers blamed the newspaper. They ignored those who incited the mayhem—such as the Danish imam who traveled to Cairo and stirred up riots over cartoons few Egyptians had seen.

Death threats against JyllandsPosten continued for years, including a plot by a Pakistani terrorist group that was discovered. Only four US newspapers had the guts to print any of the cartoons to inform their readers. I’m proud to say The Inquirer was one of the four.

The editor at Jyllands-Posten who

had assigned the cartoons, Flemming Rose, explained the rationale for running them: “The idea wasn’t to provoke gratuitously—and we certainly didn’t intend to trigger violent demonstrations,” he wrote in the Washington Post in early 2006.

“Our goal was simply to push back self-imposed limits on expression that seemed to be closing in tighter.”

Rose was referring to a series of decisions at the time by European book editors and museums to avoid

NewsSunday

A6 Sunday, January 11, 2015 • Editor: Vittorio V. Vitug

BusinessMirror

42.2 tons of contraband sugar ‘disappear’ in Zamboanga port

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AMBOANGA CITY—Rep. Lilia Nuño of the Second District of Zamboanga on Saturday said a full-blown investigation should be conducted over the “disappearance” of some 42.2 tons of confiscated smuggled sugar while under custody of the Bureau of Customs (BOC) in this city.

Nuño’s statement came a day after Mayor Ma. Isabelle Climaco-Salazar discovered that only 326 of the 1,170 sacks of 50 kilos each, or 58.5 tons of confiscated smuggled sugar, were in the custody of the BOC-Zamboanga District Office.

The 58.5 tons of smuggled sugar with an estimated worth of P2.5 million were confiscated on Tuesday by combined police, military and Philippine Coast Guard personnel near a beach in Barangay Bolong, 32.60 kilometers east of this city.

Nuño said all those involved in

the disappearance of the 42.2 tons of sugar must be held liable.

“W hat is happening to our city? After the rice smuggling, now it’s sugar. I’m calling for a full-blown investigation [into] this,” Nuño added.

Nuño said she would request the Senate Committee on Agriculture and Food Security to include sugar smuggling in its investigation.

She disclosed the committee, chaired by Sen. Cynthia Villar, is set to come to this city this month to investigate the rice smuggling.

PNA

SMC unit restores power supply in 5 towns, 1 city in Albay

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EGAZPI CITY—The San Miguel Corp.-owned Albay Power and Energy Corp. (Apec) shut down the power connection in five municipalities and one city of Albay as a result of an ongoing trouble between the new management, on one hand, and some disgruntled consumers and former employees of the lone electric power provider in the province, on other.

Hazel Morallos, Apec spokesman, said that management temporarily shut down the power transformer in two substations of Malinao town and in Karangahan, Tabaco City, after former employees of Albay Electric Cooperative (Aleco) forcibly ransacked the substation tender on Thursday morning using acetylene.

“To secure the lives of our men, we were forced to temporarily shut down the power transformer to prevent [any further] untoward incident after our substation tender in Karangahan, Tabaco City, was forcibly ransacked by the strikers, mostly former Aleco employees, with the support of outsiders,” Morallos said.

Following the shutdown of two substations in Albay, the entire first congressional district covering the towns of Santo Domingo, Bacacay, Malilipot, Malinao and Tiwi and Tabaco City experienced a 24-hour power blackout, hurting the business sector and economic activities of the Albayanos.

Tiwi town is the main source of clean and renewable energy that supplies the Luzon grid, but due to the labor dispute involving the Apec management and the former Aleco labor union, the town’s power supply efficiency has greatly diminished marked with periodic episodes of blackouts.

Power was cut off at about 10 a.m. on Thursday until Friday afternoon. PNA

Visit Bohol 2015

South Palms Resort Panglao, a leading resort destination in Panglao, Bohol, participated in the first Visit Bohol 2015 travel fair that seeks to vigorously promote the island-resort as a major tourism destination in the country. The event will run at the Glorietta Activity Center in Makati City from Friday until Sunday. Photo shows (seated, from left) Fe S. Ginete, sales and marketing manager; Hope Uy, managing director; Lolita Lyn Uy, food and beverage service manager, Marietta Sarabia-Gasatan, real-estate officer and finance coordinator, (standing, from left) Sheila S.Soriano, front office manager; Happy Lagrosas, sales associate and Kenneth Lloyd I. Poquita, sales associates; and Arman Silva Gabriel, food and beverage service manager.

www.businessmirror.com.ph

Solon pushes for creation of railway regulatory body

By Jovee Marie N. dela Cruz

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OLLOWING the Metro Rail Transit (MRT) and the Light Rail Transit (LRT) fare increases, the chairman of the House Committee on Metro Manila Development urged President Aquino to certify as urgent the measure creating the Rail Regulatory Board (RRB), which will supervise, oversee and regulate the country’s railway system.

Liberal Party (LP) Rep. Winston Castelo of Quezon City, chairman of the panel, made the statement after top Department of Transportation and Communications (DOTC) officials, led by Undersecretary Jose Perpetuo M. Lotilla told lawmakers in a recent hearing that only the railway-transport sector does not have a regulatory body to oversee rail-transport issues, including fare increases.

During the recent hearing of the House Committee on Transportation, chaired by LP Rep. Cesar Sarmiento of Catanduanes, several lawmakers said the land-transport system has its regulatory agency the Land Transportation Franchising and Regulatory Board, sea transport the Maritime Industry Authority and air transport the Civil Aeronautics Board.

“But rail transport does not have any regulatory agency, pushing all stakeholders to rely on the contents of the contracts, which private concessionaires have entered into with the government,” they said.

Castelo said he would immediately write Executive Secretary Paquito N. Ochoa Jr. to include his bill on the list of the major legislations that Malacañang would push as urgent for enactment within this year.

Castelo has authored House Bill 5313, or the Rail Regulatory Board Act of 2015, which pushes as state policy the provision of “efficient, affordable and comfortable means of travel,” and empowers the RRB

to set and approve fares and other costs for all transport systems that use rails and tracks.

The lawmaker said that, in the case of the Philippine National Railway, its charter is the basis for any fare increases.

He said both majority and minority blocs of the lower chamber support the creation of the RRB. Under the bill, the proposed RRB will be composed of the DOTC as chairman, and the secretaries of the departments of Finance, Budget and Management, and Public Works and Highways as members.

The measure said that the RRB will also have as ex-officio members a member of the Senate and two members of the House of Representatives.

The proposed measure seeks to address the issue of unregulated fare increases of the rail transport system, including the LRT Lines 1 and 2, and the MRT Line 3.

Meanwhile, the fare adjustment that took effect on January 4 marked the first increase in ticket prices for Metro Manila’s train riders in a decade.

The base fare for the LRT Lines 1 and 2 and the MRT Line 3 is now P11 and an additional P1 will be charged for every kilometer from the station of origin.

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

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

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

Earlier the DOTC said the fare adjustments would enable the government to save P2 billion in annual subsidies, or 17 percent, of the P12 billion that it allots each year to subsidize the LRT and MRT train systems.

Zambales seeks P200-M grant to develop mango industry

By Henry Empeño Correspondent

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ba, Zambales—The Zambales provincial government is seeking a P200million grant from the Department of Agriculture (DA) for the development of the local mango industry and the promotion of the popular Zambales sweet mango as a world-class product.

Gov. Hermogenes Ebdane Jr. said in a meeting with stakeholders here that his Capitol staff are now formulating a Prime Commodity Investment Plan (PCIP), which is a prerequisite for grant applicants under the DA’s Philippine Rural Development Program (PRDP).

“We have formed a technical working group to work on the PRDP application, that’s why we are conducting this workshop to get your inputs,” Ebdane explained.

He also reminded government planners and local mango stakeholders to review all angles of the industry before mapping out strategies, pointing out that the returns of investment should surpass the cost, most especially the social cost.

Letty Viernes, manager of the Provincial Planning and Development Office, said that, prior to the PCIP preparation, concerned departments at the Capitol have already formulated a value-chain analysis for mango, which is a prime product of the province of Zambales.

Viernes said the workshop is the culmination of months-long studies jointly made by the provincial offices for agriculture, planning and development, environment, and engineering, in consultation with local mango growers.

She added that, in another workshop held last month, mango stakeholders identified several constraints that hamper the development of the local mango industry. These included lack of nursery for the propagation of indigenous mango varieties; high cost of production inputs; poor marketing; and revenue losses from unsold harvests.

The popular Zambales mango is being developed by the provincial government and local industry stakeholders as a globally competitive product. HENRY EMPEÑO

The group then concluded that the provincial government and its privatesector partners would need to implement measures to boost local mango production and ensure its development as a prime product.

Dr. Rene Mendoza, chief of the Provincial Agriculture Office, said among the priority measures identified to prod the development of the local mango industry are the establishment of nurseries to increase the availability of quality planting materials, particularly of the indigenous Sweet Elena and King Rudolph varieties, and the setting up of check points to monitor entry of seedlings, fertilizers and other materials used in mango farming.

The government, he added, would also need to put up a trading center, where growers and traders could do business, and build postharvest facilities, where locally harvested mango fruits would be labeled and packed identically as Zambales mangoes.

A processing plant, where unsold man-

goes could be made into purees and juices, would also have to be built, along with more farm-to-market roads to speed up the transport of harvests to trading centers, Mendoza added.

During the recent workshop, Ebdane, likewise, stressed that the Zambales mango is best served fresh and it must be promoted so.

“Our mangoes are already known as the most delicious in the world,” Ebdane said.

“The methods other provinces or countries employ in producing their mangoes may not be applicable to varieties that are indigenous to the province, so let us be mindful of our plans here,” he added.

In applying new technology, Ebdane also advised growers to consider the quantity of yield against the deterioration of the quality of Zambales mango.

The popular Zambales mango is being developed by the provincial government and local industry stakeholders as a globally competitive product.

RegionsSunday BusinessMirror

www.businessmirror.com.ph • Editor: Efleda P. Campos

Sunday, January 11, 2015

A7

Opposition lawmaker to colleagues: Pass Constitution-compliant BBL

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N opposition lawmaker urged fellow legislators on Saturday not to cave in to political pressure and fears of the possible resumption and escalation of the armed conflict in Mindanao and pass a Bangsamoro Basic Law (BBL) that conforms with the Constitution.

Nationalist People’s Coalition Rep. Rodolfo Albano III of Isabela, in a statement, said passing into law “a half-baked and constitutionally infirm” peace pact will be a legislative misadventure because it would be opposed and brought to the Supreme Court and ultimately dumped for being repugnant and offensive to the Constitution.

“We must make it a life mission to study every provision of the

BBL to ensure that the proposed measure conforms with the Constitution, to ensure that we have not created a special state within the Republic of the Philippines and other provisions that may be deemed constitutionally contemptible,” Albano said.

He added that Congress should clarify all conflicting and execrable provisions of the BBL on national defense and security, the

police, foreign relations, revenue or wealth sharing, justice system and the legislature as pointed by many constitutionalists, legal experts and even the legal minds in the government.

“At the end of the day, the real test for the BBL is its constitutionality. It is not a matter of whether it will be passed in the House or it will muster the support of the Senate to be signed into law by the President.

The BBL must strictly conform and adhere to every provision of the Constitution of the Republic of the Philippines,” Albano said.

Earlier, Speaker Feliciano Belmonte Jr., said the House Ad Hoc Committee on the Bangsamoro, chaired by Puwersa ng Masang Pilipino Rep. Rufus Rodriguez of Cagayan de Oro City, is continuously undergoing public hearings and consultations to ensure and sustain peace and national economic development.

Belmonte also said the consultation also seeks to ensure that none of the BBL provisions would

fail the tests of constitutionality, among other concerns.

Moreover, A lbano said the BBL—that is aimed at creating the new Bangsamoro juridical entity replacing the Autonomous Region in Muslim Mindanao, has to pass all the constitutional tests because a rebellion cannot be simply ended by passing a law that is as flawed, contentious and divisive as the draft BBL sent by its proponents to Congress for legislative action.

“Let us remember that the BBL advocates a peace agreement with only one group of Muslim separatists, there are others like the MNLF [Moro National Liberation Front], which have waged a bloody and costly secessionist rebellion in Mindanao earlier than the MILF,” Albano said.

He added that excluding other secessionist Muslim rebel groups in the peace process is a self-defeating strategy that could only lead to another rebel group or groups to continue the bloody, fratricidal war in Mindanao. Jovee Marie N. dela Cruz

Bataan gov condemns journalist’s killing, offers P100,000 reward

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ALANGA CITY—The governor of Bataan and the president of a media organization in this city have strongly condemned the killing on Thursday of 47-year-old Abante reporter Nerlita “Nerlie” Ledesma.

Gov. Albert Garcia has offered a P100,000-cash reward for any information leading to the arrest of the mastermind.

“We condemn the act of the gunmen, who killed Ate Nerlie who is part of the family in the capitol.

We are saddened by her loss,” the governor said.

Ledesma worked at the Provincial Information Office of the Bataan capitol.

She was also president of the 200-member Tagnai Homeowners Association in Tuyo, Balanga City.

“The Bataan Press Club condemns the killing of Nerlie Ledesma, who was a respected reporter and radio commentator,” club president Rafael Viray, a Philippine Star correspondent, said.

He urged the police to speed up the investigation.

The governor said the police are on top of the situation.

“There are some angles that the police are looking into and there is a task force created for the immediate resolution of the case,” Garcia said.

“Make sure that something will happen in the investigation,” Metro Bataan Development Authority Chairman Carlos Pizarro Jr. quoted Nationalist People’s

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HE Tacloban-born and the lead singer of the international electropop band Ooberfuse on Friday launched one of the official songs for the visit of Pope Francis, in the country next week.

Ooberfuse vocalist Cherrie Anderson, told reporters, that the fourminute song “Mercy” is dedicated to Pope Francis and Supertyphoon Yolanda (international code name Haiyan) survivors.

She said “Mercy” was officially nominated as one of the songs that convey the message behind Pope Francis’s coming state and pastoral visit in the country.

The theme of the pastoral visit will be “Mercy and Compassion.”

Aside from “Mercy,” the two other theme songs for the papal visit are “We are all God’s Children” by Jamie Rivera and “Shepherd’s Love” composed by Fr. Kim Margallo.

“I will sing ‘Mercy’ live during the visit of Pope Francis in Palo, Leyte,” Anderson said.

Anderson, whose mother is from Tacloban, said the lyrics of “Mercy” highlight “the love of God, and usher in a season of restoration and grace.”

Yolanda slammed Eastern Visayas and parts of Western and Central Visayas on November 8, 2013 and killed at least 6,300 people, dislocated some 4.1 million, and damaged or destroyed 1.1 million homes.

“I vividly remember the night Typhoon Yolanda hit,” she said, adding,

“I sat up all night frantically ringing members of my family to make sure they were okay. I could not contact my family directly for days and relied exclusively on media reports for news.”

“That’s why I am grateful for the pope’s decision to visit the place where I was born,” she said.

Francis will be in the Philippines from January 15 to 19. He will visit Manila, and then arrive in Tacloban on January 17, where he will have a Mass. He will also have lunch with the survivors of natural calamities and the poor at the residence of Archbishop of Palo in Leyte.

For his part, Hal Saint Jhon, another member of the Ooberfuse, said the group also did an acoustic Filipino version of the song, as well as remix.

“Pope Francis’s visit to the victims and their families will help keep the plight of those who have lost everything, like some members of Cherrie’s family. ‘Mercy’ tries to emphasize that, in spite of the worst tragedies, God’s eternal mercy and compassion will sustain us through the darkest hour,” he said.

Meanwhile, the UK-base band Ooberfuse, which has also performed during the World Youth Days in Madrid, Spain, in 2011, and Rio de Janairo in 2013, also organized a musical fund-raising event in central London after Yolanda to send financial assistance to Yolanda survivors. Jovee Marie N. dela Cruz

Solcom beefs up security for papal-visit participants

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Going native

Dressed in ethnic attires, street dancers from the Isabela State University in Roxas, Isabela, perform a unity bow during a recent dress rehearsal at the university ground. The folk group will represent the town in the “Bambanti Festival” to be held at the Isabela capitol grounds later this month. LEONARDO PERANTE II Coalition Rep. Enrique Garcia of Bataan as saying.

Ledesma, was second to the eldest of nine children of Natividad and the late Virgilio Tabuso.

Cop chief warns traders vs extortionists UMAGUETE CITY—Supt.

James Goforth, the police chief of Dumaguete, has urged business establishments to step up their security measures as he cautioned them against possible extortion activities by certain individuals or groups.

Goforth raised the warning as he confirmed that a business establishment in Dumaguete City, the capital of Negros Oriental, recently received a telephone call from a man who claimed membership in the Bangsamoro Freedom Fighters and asked for money.

He said that, while the local police could not verify the presence of the group or trace the telephone call as the business establishment did not have a caller ID feature in its telephone system, police authorities are still not taking this incident for granted.

Goforth said tha, while the telephone call could be a hoax, this early it appears that there are some individuals trying to extort money from the business establishment.

Intl band launches Pope Francis visit official song

The caller had demanded for money and warned that the business establishment would be bombed or set on fire if it failed to heed the demand, Goforth added.

Goforth said intelligence agents are now looking into this latest incident although he disclosed this is not the first time that extortion attempts were made at other business establishments in Dumaguete.

At the time of the incident, the police deployed discreetly to the said business establishment and conducted a thorough search without having to cause undue public panic, although a bomb threat was remote, Goforth said.

He reiterated that police are continuously in close coordination with security providers of the business establishments in Dumaguete, meeting with them on a regular basis.

He added that security providers must also take on their responsibility as police cannot possibly be guarding every single business establishment all the time. PNA

Two still-unidentified men in bonnets and riding on a tricycle fired at Ledesma, who was waiting for a tricycle to report for work, shortly before 8 a.m. on Thurs-

day some 300 meters away from her residence.

She died on the spot from four gunshot wounds from a caliber .45 pistol. PNA

₧200,000 bounty raised to find Abra girl’s killer

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AMP BADO DANGWA, La Trinidad, Benguet—A P200,000 reward was offered for the arrest of the person who fired his gun, which killed an 11-year-old girl in Abra on January 1.

In an interview on Saturday, Chief Supt. Isagani Nerez, Cordillera police commander, said the groups National Police Civilian Pro-peace Supporters, Guardians Reform Advocacy and Cooperation toward Economic Prosperity offered P100,000 to anyone who could provide vital information for the identification and immediate arrest of the assailant. Abra Gov. Estaquio Bersamin offered another P100,000.

Reports indicate that 11-yearold Jersey Buenafe Tabaday was watching the fireworks outside their home in Barangay Bumagcat, Tayum town, when

hit by a stray bullet from a caliber .45 pistol around 12:20 a.m. on January 1.

She was rushed to the Abra Provincial Hospital in Bangued, where she expired at 2 a.m.

Paraffin tests were done on five civilians, who voluntarily presented themselves at the National Police crime laboratory in the provincial capital of Bangued.

Reports from the different provincial police commands in the region in coordination with the Department of Health showed there were two victims of indiscriminate firing and 69 firecrackerrelated injuries in the Cordilleras from December 21, 2014 to Januar y 5, 2015.

The other stray bullet victim was a 13-year-old boy, also from Abra. The victim is now recuperating. PNA

HE Armed Forces Southern Luzon Command has ordered all its units to beef up their security preparations to ensure the safety of people who will be joining activities in honor of Pope Francis, who will visit the country from January 15 to 19.

Maj. Gen. Ricardo Visaya, Southern Luzon Command chief, said this is to ensure devotees coming from Bicol and Southern Tagalog regions will be protected from groups or individuals, who may disrupt the papal visit-related activities.

“Security along national roads, conduct of checkpoints with the national police, as well as security augmentation to the coast guard in major ports in Bicol and Southern Tagalog regions are among the primary activities of our forces before, during and after the papal visit,” Visaya said.

“There are no monitored threats.

However, we will continue monitoring and intensifying our security operations and not discount the possibility of some spoilers,” he added.

In Sorsogon an Army K-9 unit will augment the coast guard in security operations at the Matnog Port.

A platoon-sized unit that can be deployed at any point is also on alert.

Mea nwh i le, hu m a n- r ig ht s watchdog Karapatan has warned that the Aquino administration may militarize the visit of Pope Francis and keep him away from his flock.

“While it is the prime duty of the government to protect Pope Francis and ensure his safety and security, we fear that these socalled security measures will also be used to keep the pope away from the people, especially those who would want him to know what ails in this country,” Karapatan Secretary General Cristina Palabay said.

“There are legitimate issues and concerns that the Filipino people would want the pope to know. These are issues that President Aquino

would not address but the Armed Forces will also try to hide these through massive troop deployment,” she added.

Palabay raised the concern as the Armed forces Chief of Staff, Gen. Pio Gregorio Catapang announced the deployment of 17,000 soldiers for the pope’s visit from January 15 to 20.

With an additional 20,000 members of the national police guarding Francis, Palabay said the total security complement for the visit would be more than two regular Army divisions or four undermanned divisions.

“The massive deployment of soldiers and policemen is an antithesis of the spirit of the pope’s visit, although it bespeaks of the essence of this government,” Palabay said.

“This is a ‘once-in-a-lifetime event’ for the Filipino people and we do not want soldiers in the shadows.

The people’s message might not reach Pope Francis,” she warned.

“For one, we would want Pope Francis to know the wishes of the political prisoners for him to intercede for their release, especially the elderly and the sick.

Relatives of political prisoners and human rights advocates hope that we will be able to convey this message to Pope Francis,” Palabay added.

Political prisoners and their relatives, as well as the kin of the victims of extrajudicial killings and enforced disappearances, have also written letters to Francis calling for his support for justice and peace.

“Hindi maiiwasang maglabas ng sama ng loob ang mga Pilipino at iparinig ito kay Pope Francis dahil hindi sila pinakikinggan ng sarili nilang gobyerno. Bilang pinuno ng Simbahang Katoliko, idinadaing nila sa santo papa ang mga paghihirap nila [We can’t help but turn to Pope Francis because the government does not heed the victims call for justice; they would want him to hear their woes],” Palabay also said. PNA and Marvyn Benaning

2nd Front Page BusinessMirror

A8

Sunday, January 11, 2015

Consulting firm forecasts office-space boom in 2015

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By Roderick L. Abad

HE real-estate industry is gearing up for the integration of economies of the 10 memberstates of the Association of Southeast Asian Nations (Asean), which will take place later this year, said the top official of a property consulting firm.

Rick Santos, founder, chairman and CEO of CBRE Philippines, said the opening of trade will open various opportunities to all segments of the real-estate market, particularly in the office sector.

“Manila looks to be well-positioned for Asean head offices,” he said, while citing to the BusinessMirror the various factors that make the Philippines the preferred destination of locators in the region.

One of the country’s comparative advantages seen to continue to attract investors to put up offices here is the youthful and English-speaking population, the top executive noted.

He added that good customerservice skills and the cost-competitiveness of the country will shore up investments.

“What’s more, vacancy rates will inch down, as more foreign firms set up shop to capitalize on the country’s strengths,” he said.

Within the region, the Philippines offers the most affordable office rents, with prevailing lease rates in Makati City costing around $29 per square foot annually.

Thailand comes next, at $31 per sq ft yearly.

“The Makati CBD [Central Business District] is still highly

attractive to global firms; Fort Bonifacio is the next preferred location,” Santos said.

“Brisk expansion among multinationals and BPO [business-process outsourcing] bolsters demand for office space,” he explained.

Based on the December 2014 Market Insight report of Pinnacle Real Estate Consulting Services Inc., lease rates of Premium Grade A offices in Makati have stayed lower than the monthly P1,200per-square-meter mark.

They have a weighted average of around P800 per sq m compared to those in Bonifacio Global City (BGC), at over P800 per sq m.

Vacancy-wise, high-quality Grade A office buildings located within Makati are “practically fully leased out,” while those in BGC have a weighted vacancy of 3 percent.

“Makati rents are seen to strengthen up to 2017 due to lack of new completion of Grade A buildings, as vacancy levels are seen to remain below 3 percent,” Santos said.

With this trend in sight, he suggested that Grade B buildings and retrofits could help answer the expansion demands of headquarter offices in CBDs.

www.businessmirror.com.ph

Employment gain boosts U.S. role as global standout

By Shobhana Chandra Bloomberg

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rise in employment and a falling jobless rate last December capped the best year for the labor market since 1999, and reinforced the US role as the global economy’s standout performer.

The 252,000 jobs added followed a 353,000 rise the prior month that was more than previously estimated, a Labor Department report released on Friday showed in Washington.

The jobless rate dropped to 5.6 percent, the lowest level since June 2008. The report wasn’t all good news, as earnings unexpectedly declined from a month earlier.

“We have continued solid job growth,” said Michael Feroli, chief US economist at JP­Morgan Chase & Co. in New York, who projected a 240,000 gain. “It shows really solid momentum in US growth. There are not a lot of places in the world where we see that these days.”

About 3 million more Americans found work in 2014, the most in 15 years and a sign companies are optimistic US demand will persist, even as overseas markets struggle. The drop in workers’ hourly wages means Federal Reserve (the Fed) policy-makers are less likely to move up the timing of an interest-rate increase.

“The data certainly don’t point to any wage pressures,” said Stephen Stanley, chief economist at Amherst Pierpont Securities Llc. in Stamford, Connecticut. “There’s nothing to worry about with respect to inflation. It lowers the odds of the Fed having to move faster than they’d like.”

Shares drop

Stocks fell, after a two-day rally in the Standard & Poor’s 500 Index, on the drop in wages and concern grew that Europe’s stimulus plan might not be sufficient. The S&P 500 declined 0.8 percent to 2,044.81 at the close in New York. The yield on the benchmark 10-year note retreated to 1.95 percent, from 2.02 percent late Thursday.

Job growth last month was highlighted by the biggest gain in construction employment in almost a year. Factories, healthcare providers and business services also kept adding workers last December.

The median forecast in a Bloomberg survey of 99 economists called for a 240,000 advance in payrolls. Estimates ranged from 160,000 to 305,000, after a previously reported 321,000 November increase. Revisions to prior reports added a

Important tools for online workers Percent of working Internet users who say each is “very important” to do their job.

Email

61% The Internet

54% Landline phone

35% Cell or smartphone

24% Social networking sites: Twitter, Facebook or LinkedIn

4% The percent of online employees that work remotely Almost A few A few Every every times a times a day day week month

Less often

Never

13% 8% 13% 10% 15%

41%

Source: Pew Research Center Graphic: Greg Good, Tribune News Service

total of 50,000 jobs to the previous two months.

The unemployment rate, which is derived from a separate Labor Department survey of households, was projected to drop to 5.7 percent from 5.8 percent, according to the survey median. The jobless rate averaged 6.2 percent last year, down from 7.4 percent in 2013 and the biggest decrease since 1984.

Labor secretary

“The jobs report demonstrates that we have a very strong wind in our back in the US economy,” Labor Department Secretary Tom Perez said in a telephone interview. Part of the government’s unfinished agenda is to “make sure the rising tide lifts all boats.”

More people dropped out of the labor force in December.

The participation rate, which indicates the share of workingage people in the labor force, decreased to 62.7 percent, matching the lowest level since February 1978, from 62.9 percent.

The combination of job growth and cheaper gasoline will probably help stretch workers’ paychecks and sustain consumer spending. Prices at the gas pump are the lowest since 2009, according to AAA, the largest US motoring organization.

Average hourly earnings for all employees dropped from the prior month by 0.2 percent, the biggest since comparable records began in 2006. Earnings rose 0.2 percent last November, half as much as previously reported. They increased 1.7 per-

cent over the 12 months ended in December, the least since October 2012.

Temporary drop

The monthly decline in pay may prove temporary because it was influenced by the mix of workers on payrolls, economists said. Big gains in hiring for the holidays, more entrylevel positions and retirements of more expensive workers all probably played a role.

“You’ve hired a lot of people in the last three or four months, and to the extent that you’re bringing in a lot of new talent, this new talent is not getting paid as the more experienced talent,” said John Silvia, chief economist at Wells Fargo Securities Llc. in Charlotte, North Carolina. “It’s probably only temporary. I would suspect that at the beginning of this year, as we go forward, those wages will pick up.”

Construction companies added 48,000 jobs last month, the most since January. Factories increased payrolls by 17,000 last December. Business services took on another 52,000 workers.

Alicia Courtney, 28, is seeing the labor-market improvement firsthand. Feeling “kind of stuck” in her old job, she said she began looking for a new one last August. FlexJobs’s search services helped her land a position in mid-November as an account manager at EmoryDay Llc., a digital marketing company.

See “Employment,” A2

job growth in 2014 by industry T he US economy added nearly 3 million jobs in 2014 in the most robust year of employment gains since 1999. The hiring spree was broad-based, with every major industry sector logging job growth.

Professional services that include high-skilled positions, such as accounting and engineering, led the way in total jobs.

It added 732,000 over the year. Health care, construction and leisure and hospitality also made notable gains.

The biggest percentage increase in job growth occurred in the temporary help industry, according to Labor Department data. Those jobs tend to pay less and provide fewer benefits.

That could partially explain one of the glaring weaknesses in Friday’s jobs report: Americans’ paychecks. They have barely kept ahead of inflation for most of the fiveand-a-half-year-old recovery. Last December average hourly pay actually fell 5 cents to $24.57 an hour. Here are the total number of jobs in various sectors and their growth over the past year. AP

Total jobs as of Dec 2014

Total jobs as of Dec 2013

Percent change

Total change

Temporary help

2,990,400

2,773,800

7.8

216,600

Construction

6,166,000

5,876,000

4.9

290,000

Professional services (accounting, engineering)

19,574,000

18,842,000

3.9

732,000

Transportation, warehousing

4,685,900

4,546,600

3

139,300

Hotels, restaurants, entertainment

14,856,000

14,435,000

2.9

421,000

Industry

Health care

14,915,500

14,604,500

2.1

311,000

Wholesale trade

5,907,500

5,796,800

1.9

110,700

Education

3,421,400

3,365,000

1.7

56,400

Retail

15,511,300

15,261,700

1.6

249,600

Financial services

8,022,000

7,901,000

1.5

121,000

Manufacturing

12,239,000

12,053,000

1.5

186,000

Information, telecommunication

2,689,000

2,674,000

0.6

15,000

Government

21,945,000

21,854,000

0.4

91,000

Source: US Bureau of Labor Statistics