BusinessMirror January 27, 2015

A piece of ‘heaven’ on earth:

EVM Self-Sustainable Resettlement Community inaugurated

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LANGALANG, Leyte—On February 15 last year, Iglesia Ni Cristo (INC) brethren from all over the world walked for a cause to help generate funds to provide housing and livelihood for the victims of Supertyphoon Yolanda (international code name Haiyan).

Barely a year later, that promise was fulfilled with God’s help.

Here in Sitio New Era, in a village named Barangay Langit, 500 concrete housing units now stand ready for occupancy, with an eco-farming site, a garments factory, a dried-fish factory and a mushroom facility that would provide jobs for those living in the village.

On January 23 INC Executive Minister Edu-

The Iglesia Ni Cristo’s EVM Self-Sustainable Resettlement Community in Sitio New Era, Barangay Langit in Alangalang, Leyte, is nestled atop a mountain where no storm surge could reach it. The project, inaugurated last Friday by INC Executive Minister Eduardo V. Manalo, has 500 concrete housing units now ready for occupancy, as well as an eco-farming site, a garments factory, a mushroom facility and a fish-drying plant that will provide livelihood for the housing beneficiaries. Photo courtesy of INCTV

2006, 2010, 2012

U.N. Media Award 2008

www.businessmirror.com.ph INSIDE

Life

EAR God, we recognize that there is a bond between all people that comes, especially from the common origin and end of the entire human race. The Catholic Church recognizes that whatever is good or true in other religions comes from God and is a reflection of His truth. As such it can prepare for the acceptance of the Gospel and act as a stimulus toward the unity of humanity in the Church of Christ. May all the human race come as one family of God. Amen.

LOUIE M. LACSON

Word&Life Publications • teacherlouie1965@yahoo.com

Tuesday, January 27, 2015

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Singing the praise of ottomans

without the cost of buying a new sofa or chair. If you get tired of the fabric, no problem. It only takes a few yards to reupholster an ottoman.

2. EXTRA SEATING EVERY once in a while, we need an extra seat or two in our homes. An ottoman is the perfect pick. When we design furniture groupings, we often include an ottoman or bench that can be pulled up to seat guests. When they are not in use they can be stored in front of the fireplace, under a console table or under a window.

When you slide an ottoman under a console table, it also fills in that empty space between the long, thin legs of these graceful tables. We layer up the top of these tables with lamps and accessories, but if there is nothing underneath them, they can appear top-heavy and out of balance. The ottoman solves this design dilemma.

I love ottomans standing guard at the end of a bed, a perfect spot for all those pillows at night or to sit while you put on your shoes in the morning. We also have customers who like to put ottomans in their larger bathrooms or closet spaces to sit on while dressing.

Four color personalities to redefine your living spaces

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Tribune News Service

Y home has long been a part of the Ottoman Empire. I was conquered years ago when I starting dreaming of all the ways I could use these small but mighty pieces of furniture in my home to add style and function.

Here are the top 3 ways you can use an ottoman to enhance your interior spaces.

1. A COFFEE TABLE WANT to ground a conversation area? Place an upholstered coffee table at the center. Ottomans are a very fetching hub for furniture groupings, from a sectional to a circle of four club chairs. Since

B C H Tribune News Service

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OR this year Boysen is forecasting four color themes—Naturist, Kinetic, Avant-Garde, and Perfectionist—inspired by social influences on our current lifestyle. These color themes were based on the results of an extensive research project with international partners.

“Filipinos have always been known to be creative with expressing themselves through color, whether through the clothes they wear or the things they carry,” said Johnson Ongking, vice president of Pacific Paint (Boysen) Philippines Inc. “We want to help extend that ability to express themselves to the places where they live by letting them know what we think are the colors that are most likely to have an influence on living spaces this coming year.”

“We compared notes with color experts all around the world so we could understand the global lifestyle trends that were influencing color choices. So these four color palettes contain elements of what we’re seeing in the Philippines combined with what other color professionals are seeing in other parts of the world.”

Boysen is part of the Nova Paint Club, an international organization of leading paint companies from Europe, Asia, North America and South America. Color Trend 2015 is the result of a collaboration of Boysen with its partners in Nova and a global color research company, which has extensive experience in forecasting color trends in the global fashion, publishing, automotive and telecommunications industries.

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N many ways, deep rich brown has replaced black as the new neutral.

Not quite as harsh, it adds warmth and richness. Brown, like a welloiled piece of wood, often contains various tint and tones, that to some may be more appealing than black.

KINETIC. This palette is for those living in the fast lane, where things vibrate at a higher pitch. The intensity of tangerine is balanced by cool greys and sophisticated blues. Youthful and energetic, this is perfect for Type A personalities, people who are moving toward their goal at warp speed.

AVANT-GARDE. More opportunities in society open the door for embracing a more individualistic style. There will be more outliers who will march to their own beat, and no rules will define them. Reds, blues, yellows, greens—bold, intense, all a little bit off the beaten track.

Combinations are bound only by the imagination.

PERFECTIONIST. This palette is for those who prefer the timelessness and subtlety of classic colors. The tones are subdued and very selfassured, befitting those who have enjoyed success for a longer duration, and who prefer to retreat into homes that calm the senses instead of stimulating them.

 This article was adapted from Mary Carol Garrity’s blog at www.nellhills.com. She can be reached at marycarol@nellhills.com.

DEEP browns can add a sense of elegance and richness. MCT

THE BEAUTY OF BROWN

BROWN AND WHITE

WHEN it comes to creating the perfect color palette, there is nothing quite as pure, timeless and versatile as decorating using brown and white.

Brown and white simply serves as the perfect blank slate for creating virtually any color scheme you desire.

Don’t be afraid to use a simple all-white color palette, as it can be crisp and fresh. Be open to the possibility of creating a pure brown and white palette as the stark contrast of the pure white paired with the rich brown, which can be stunning.

USING BROWN AS A FOUNDATION COLOR

A VERSATILE way to decorate with brown is to use it as the main color in a space, then pair it with a single accent color, such as yellow, green, orange or even turquoise. Warm colors work really well as accent colors against chocolate brown and can add an appealing sense of luxury and coziness. Also, don’t be afraid to bring in an accent color by using an accent wall. Some of my most successful designs ever have involved the use of pure white furniture or a white and black color scheme, highlighted by a bright, bold accent wall!

BE BOLD

WHEN it comes to color, I believe it should be both seen and heard.

THE BOYSEN COLOR TREND 2015 PALETTES

NATURIST. Increasingly important in the world today is our connection with nature. For many of the city dwellers, there is a need to bring in the lush greens, warm wood tones, and vibrant reds into our living spaces. The lighter hues of marble and silk transform the palette from rustic to urbane, adapted to the contemporary taste of a society enjoying an economic upturn.

3. TURN A CHAIR INTO A RECLINER WHEN I finally sit down at the end of a long day, I need to have someplace to put my feet up.

That’s why you’ll also see ottomans used in the traditional way in my home, as footstools. With your feet up and comfy, you can squish back into the chair and really relax.

I’m a fan of ottomans that match the style and upholstery fabric of the chair they accompany, and of those that look completely different from their partner chair. I like them nestled up next to the foot of a chair, or centered between two chairs so you can use one with a buddy. And I like them sitting next to a chair when they are not in use, acting as a side table. It’s all good, so experiment until you get a look you love.

ottomans come in just about every shape, size and style, the sky is the limit.

As I’ve worked with homeowners to warm up their large, high-ceilinged rooms, I’ve found an ottoman is a perfect pick. We like to work a 54-inch ottoman into the furniture design, centering it in front of the fireplace. Somehow, this last touch of textile just radiates warmth and changes the mood of the space. Soft-sided coffee tables are ideal for families and grandparents because little ones can’t conk their heads on them.

Coffee table ottomans are an ideal place to experiment with bolder fabrics, like large-scaled patterns and strong colors—statement textiles you might not want on a piece as large as a sofa or chair.

You could use a contemporary or transitional fabric on an ottoman to instantly give a space a bright new look

Instead of a muted or watered-down brown, go bold! I suggest using a deep chocolate or caramel brown to create a cozy room or a light brown or khaki to create a neutral yet warm and inviting space.

 Cathy Hobbs, based in New York City, is an Emmy Award-winning television host and a nationally known interior design and home staging expert.

Contact her at info@cathyhobbs.com or visit her web site at www.cathyhobbs.com.

GET HOOKED ON DIY

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IY enthusiasts recently discovered how it easy it is to “Get Hooked on DIY” with 3M Command during the recent event of ACE Builders and Summit Media at SM City North Edsa.

Hosted by Angel Jacob, it featured home-improvement solutions with the latest innovative 3M products, as well as insights on space management and organization with Good Housekeeping Editor Maita de Jesus and blogger Coni Tejada. Celebrity parents Doug and Cheska Kramer also shared their favorite 3M products, as well as tips on practical home improvement and cool parenting.

“We will continue to provide solutions for every Filipino consumer to help them make their homes a better place for their families,” 3M Philippines Consumer and Home Improvement Markets Division Product Manager Jermits Rabonza says.

With seven product categories covering every part of the home (decorative, multiuse, home and office organizers, cord management, picture hanging systems, replacement strips and bathroom solutions), Command has the full range of smart solutions for every occasion.

Attendees also enjoyed going around 3M’s fun demo booths.

3M Command Damage-free hanging solutions are available at all ACE Hardware (www.acehardware.ph) stores nationwide.

HOME organizing is easier with these damagefree 3M Command adhesive hooks.

CELEBRITY parents Doug and Cheska Kramer with 3M’s Jermits Rabonza and Rene de los Reyes at the ACE Builders store in SM City North Edsa Annex.

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japan logs record trade deficit in 2014 on weakening yen BusinessMirror

World The

B3-1 | Tuesday, January 27, 2015 • Editor: Lyn Resurreccion

Japan logs record trade deficit threateninG market turmoil in 2014 on weakening yen A

Greek radical left wins election,

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Preliminary data from the Finance Ministry released on Monday showed Japan’s exports rose 4.8 percent to ¥73.1 trillion ($620 billion) in 2014, while imports climbed 5.7 percent to ¥85.9 trillion ($763.7 billion). The trade deficit rose by 11.4 percent from the ¥11.5-trillion ($97.7 billion) gap in 2013.

The data show exports from the world’s third-largest economy ris-

ing nearly twice as fast in the latter half of the year than in the first half, while the increase in imports fell sharply, suggesting the deficit will narrow in coming months.

The Japanese yen has weakened over the past year to about 117 to the dollar compared with about 100 in early 2014. That raises the value of Japan’s exports in yen terms. But it also pushes up costs

for imports of fuel and food.

Japan ran trade surpluses for decades until its nuclear reactors were idled following a disaster at the Fukushima Dai-ichi power plant in March 2011. Imports of oil and gas rose to compensate for the lost nuclear power capacity.

The more than 60-percent plunge in oil prices is a boon to Japanese businesses that have been pinched by rising energy costs. But the impact was not fully reflected in the most recent data, Marcel Thieliant of Capital Economics said.

“Lower energy prices may briefly return the trade balance to surplus in coming months, before a weaker yen and a rebound in the oil price push it back into deficit,” Thieliant said in a commentary.

But Thielient also said exports may slow in coming months.

Japan’s exports of vehicles, a major

component of its total overseas business, fell 1.4 percent in volume terms in 2014 from a year earlier, though the value rose nearly 5 percent to said ¥10.9 trillion ($92.6 billion).

Electrical machinery exports rose 5 percent and exports of other machinery such as power generating equipment increased 6.4 percent, accounting for more than a quarter of total exports last year.

Exports to China rose 15 percent last year but are expected to slow as the economy of Japan’s neighbor cools after three decades of torrid growth.

Japan’s exports to the United States, its biggest single export market, rose 5.6 percent last year to ¥13.6 trillion ($115.5 billion) while imports jumped nearly 11 percent to ¥7.5 trillion ($63.7 billion). The resulting trade surplus was nearly level with that of 2013, at ¥6.1 trillion ($51.8 billion). AP

afGhan economic crisis looms as foreiGn aid dollars depart

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ABUL, Afghanistan—Afghanistan’s fragile economy has lost around a third of its value in the past year as international aid organizations that poured in cash for more than a decade have drastically scaled back after Western forces effectively ended their 13-year war against the Taliban.

Assuming power in September amid a continuing Taliban insurgency, President Ashraf Ghani inherited a moribund economy and an electorate weary of endemic corruption and soaring unemployment. But economists, analysts and officials agree that the economic challenge has been compounded by the Western handover of security to Afghan forces, completed at the end of last month, whose knock-on effect has left key sectors lacking investment and struggling for funds.

Economic growth that was above 14 percent in 2012 will fall to just 1.4 percent this year, the World Bank predicts. In recent months, fears about the state of the economy have outstripped security concerns in opinion polls taken across the country.

The central bank spends tens of millions of dollars weekly to stem the fall of the afghani as money continues

to leave the country, traders said, reflecting a general lack of confidence in the government’s ability to introduce reforms, stimulate growth, guarantee security and cut corruption.

At Kabul’s Saraye Shahzada money market, traders dealing in dollars, rubles, euros, rials, rupees and dirhams, are concerned about capital flight.

“At least twice a week, the central bank sells $40 million to $50 million to support the afghani,” said Mohammad Khan Baz, the market’s manager.

“If the government doesn’t pay attention to security and provide opportunities for investors, I am afraid that the economic situation for ordinary people will go from bad to worse.”

Imports vastly outstrip exports, Ghani recently told parliament, exacerbating the country’s dependence on financial support from international partners—who are already spending billions annually on the military and police.

Afghan authorities had four years’ notice that the US military, which spent more than $1 trillion between 2001 and 2014, would close most bases and withdraw combat troops at the end of last year. About a third of Afghanistan’s population lived close enough to a military base to benefit

from its presence. On top of war costs, the US spent more than $100 billion on development.

Construction, one of the few industries that offered employment outside of aid projects, has stalled with half-finished buildings dotting the capital and other cities. Kabul rents, once among the world's highest, have plummeted.

Former construction engineer Hamid Sahak, 38, said he noticed the downturn creeping up more than a year ago.

“Even though a lot of projects are half-completed—not only office blocks but hospitals, clinics, schools and roads all over the country — the money has simply run out and everything has closed down,” he said.

Afghanistan’s dependency on international funding for development in the decade after the Taliban were toppled in the 2001 US-led invasion led to widespread corruption that stifled industrial growth, experts say.

Opium continues to be the country’s biggest earner, with the United Nations saying it brings in close to $3 billion a year—enriching mobsters and funding insurgents.

By contrast, the Finance Ministry said 2014 government revenues were

just over $2 billion—25 percent lower than initial projections. Abdul Qadir Jaillani, the ministry’s spokesman, attributed the lower-than-expected revenues to “the long election process, the fall in overall investment, trade and business across the country, the negative impact of the end of the international combat mission, and concerns about the ability of the Afghan security forces to take on the insurgency.”

Afghanistan’s security forces have been leading the fight against the insurgency since mid-2014. Since December 31, they have been fighting largely alone. A support contingent of 13,500 foreign troops, mostly Americans, will remain through this year.

Wafillah Iftakhar, head of the Afghanistan Investment Support Agency, said entrepreneurs were delaying investments as they waited for positive signs that the government is tackling corruption and cutting red tape.

“Investors have stopped most of their activities or have cut their turnover, which has had a serious impact on the economy, contributing to the rise in unemployment,” he said. AP

THENS, Greece—A radical leftwing party vowing to end Greece's painful austerity program won a historic victory in Sunday’s parliamentary elections, setting up a showdown with the country’s international creditors that could shake the euro zone.

Alexis Tsipras, leader of the communist-rooted Syriza party, immediately promised to end the “five years of humiliation and pain” that Greece has endured since an international bailout saved it from bankruptcy in 2010.

“The verdict of the Greek people ends, beyond any doubt, the vicious circle of austerity in our country,” Tsipras told a crowd of rapturous flag-waving supporters.

Syriza appeared just shy of the majority that would allow it to govern alone.

With 97.6 percent of polling stations counted, Syriza had 36.4 percent—and 149 of parliament’s 300 seats—versus 27.8 percent for Prime Minister Antonis Samaras’s conservatives.

If Tsipras, 40, can put together a government, he will be Greece’s youngest prime minister in 150 years, while Syriza would be the first radical left party to ever govern the country.

The prospect of an anti-bailout government coming to power in Greece has revived fears of a bankruptcy that could reverberate across the euro zone, send shockwaves through global markets and undermine the euro, the currency shared by 19 European countries.

The already battered euro was down 0.3 percent on Monday, at $1.117, on the news of Syriza’s victory. That was its lowest since April 2003.

Syriza’s rhetoric appealed to many in a country that has seen a quarter of its economy wiped out, unemployment above 25 percent and average income losses of at least 30 percent.

Tsipras won on promises to demand debt forgiveness and renegotiate the terms of Greece’s €240-billion ($270-billion) bailout, which has kept the debt-ridden country afloat since mid-2010.

To qualify for the cash, Greece has had to impose deep and bitterly resented cuts in public spending, wages and pensions, along with public sector layoffs and repeated tax increases.

Samaras soon conceded defeat on Sunday, saying he had received a country “on the brink of disaster” when he took over in 2012 and was close to ushering it out of the crisis.

“I was asked to hold live coals in my hands and I did,” he said.

The country's progress in reforms is reviewed by inspectors from the International Monetary Fund, European Commission and European Central Bank, collectively known as the troika, before each installment of bailout funds can be released.

Tsipras pronounced the troika and its

regular debt inspections “a thing of the past.”

Greece’s creditors insist the country must abide by previous commitments to continue receiving support. In Germany, Bundesbank President Jens Weidmann told ARD network that he hoped “the new Greek government will not make promises it cannot keep and the country cannot afford.”

The election results will be the main topic at Monday’s meeting of euro-zone finance ministers. Belgium’s minister, Johan Van Overtveldt, said there is room for some flexibility, but not much.

“We can talk modalities, we can talk debt restructuring, but the cornerstone that Greece must respect the rules of monetary union—that must stay as it is,” Van Overtveldt told VRT network.

JPMorgan analyst David Mackie said negotiations between the new government in Athens and creditors “are likely to be very difficult” but cannot drag on indefinitely.

“If Greece is unable to honor its obligations this year, then economic, financial and banking stress is likely to lead either to an agreement, or to a second round of elections, or to an EMU exit,” he said, referring to Greece’s membership in the euro zone.

But Re-Define think tank analyst Sony Kapoor said that while Greece has failed the euro zone and EU authorities, they have also failed Greece.

“The Greek rescue package was financially unsustainable, economically wrongheaded, politically tone-deaf and socially callous,” he said. “Syriza deserves a chance, and their victory will force the EU to confront the elephant in the room: unpayable debt and bad policy decisions.”

He noted that Syriza’s moderation of its rhetoric before the election “is promising, making it likely that it will govern closer to the center than many think.”

A Syriza official said Tsipras would meet on Monday with the head of the small Independent Greeks party, which elected 13 lawmakers, “to confirm the support and possible participation of the Independent Greeks in the new government.” Apart from their mutual opposition to austerity, the two parties disagree on practically every other issue.

The official, who asked not to be named because he was not authorized to speak on the record, said Tsipras would likely be sworn in as prime minister later Monday, and the new government would be formed in the following couple of days.

The centrist Potami (river) party was battling for third place with the Naziinspired Golden Dawn, whose leader and several lawmakers campaigned from prison, where they are awaiting trial on charges of participating in a criminal organization. AP

World

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BusinessMirror

SERENA WILLIAMS signs autographs after her victory on Monday.

She takes on 5-foot-3 Dominika Cibulkova (left) next. AP

VENGEFUL COMEBACK

There was a lot to distract Serena Williams. In the first set, six planes were doing coordinated loops and tricks in the sky over Rod Laver Arena, as part of the national day celebrations in downtown Melbourne. She had difficulty breathing at times, and had heaving coughing fit into a towel at a changeover.

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ANDY PREPARES FOR AUSTRALIAN CHALLENGE

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ELBOURNE, Australia—After the clock ticked past midnight, Andy Murray became aware that it was officially Australia Day and he already knew from the crowd reaction what to expect in the quarterfinals.

Murray, a two-time Grand Slam champion and threetime Australian Open finalist, fended off racket-smashing Grigor Dimitrov, 6-4, 6-7 (5), 6-3, 7-5, in a fourth-round match that started on Sunday but continued into the early hours of January 26, the national holiday that regularly occurs during the Australian Open.

Midway through his match against No. 10-ranked Dimitrov, who beat him in the Wimbledon quarterfinals last year, Murray heard a distinctive roar that started somewhere in the distance and echoed through Rod Laver Arena.

“I heard a lot of noise—I had to ask my box what it was for,” he said. It was for 19-year-old Nick Kyrgios, who came back from two sets down and saved a match point to beat Andreas Seppi, 5-7, 4-6, 6-3, 7-6 (5), 8-6, on Hisense Arena—the No. 3 court at Melbourne Park—to become the first Aussie male to reach the last eight at the Australian Open since Lleyton Hewitt in 2005, and the first male teenager since Roger Federer in 2001 to reach two Grand Slam quarterfinals.

Kyrgios has developed quite a reputation for his audacious blend of shots, for his crowd interaction, for his

outbursts and for his results: as a wild-entry with a No. 144 ranking at Wimbledon last year, he beat then No. 1-ranked Nadal in the fourth round. That was after he’d saved nine match points and come from two sets down to beat Richard Gasquet in the second round.

As a couple stood to leave Hisense Arena on Sunday during the fifth set—one in which Kyrgios let a 4-1 lead slip and then had to save break points—he called out to them: “Hey, where are you going?”The show, evidently, was not over.

His first words after the win, as the crowd continued to chant and scream like soccer fans: “Thanks mate. Feels so good.”

“It’s crazy,” he said. “When I saw I had finally won the match it was incredible—it was the best feeling I ever had.

It’s just massive confidence.”

Murray, who was broken when serving for the second set and lost the subsequent tiebreaker, rallied from 5-2 down in the fourth set to beat Dimitrov, who shattered his racket on the court after surrendering his last service game.

Murray has a 10-0 winning record against Australian players, but hasn’t come across anyone quite as precocious as Kyrgios.

“I would say maybe he’s more confident than I would have been at that age...he obviously backs himself a lot,” Murray said.

“I’m going to have to play a great match to win against him.

“He’s had an unbelievable tournament so far and he’s only

The Associated Press

ELBOURNE, Australia—Serena Williams avenged her heaviest Grand Slam defeat with a comeback 2-6, 6-3, 6-2 win over Garbine Muguruza on Monday to reach the Australian Open quarterfinals.

The top-ranked Williams was pushed all the way by No. 24-seeded Muguruza, who matched her in the heavy-hitting rallies, and who had conceded only four games to her in a second-round upset last year at the French Open.

Five-time Australian Open winner Williams next faces Dominika Cibulkova, who reproduced the kind of tennis that helped her reach the final here last year as she beat

going to keep getting better.

Hopefully my streak doesn’t end in a couple of days.”

The high-energy night matches overshadowed the day session Sunday, when Nadal continued his comeback from a longterm injury layoff with a 7-5, 6-1, 6-4 win over towering Kevin Anderson to set up a quarterfinal against No. 7 Tomas Berdych, who had a 6-2, 7-6 (3), 6-2 win over Bernard Tomic.

“The chance to be in the quarterfinals after a tough period of time for me is a fantastic result,” said Nadal, who didn’t let a small thing like his superstitiously and carefully positioned water bottles being knocked over bother him too much. “I was playing better than the days before. The way that I improved my level is not the most important thing; obviously the victory is.” AP ANDY MURRAY has a 10-0 winning »record against Australian players, but hasn’t come across anyone quite as precocious as Nick Kyrgios. AP

two-time champion Victoria Azarenka, 6-2, 3-6, 6-3.

Defending champion Stan Wawrinka beat Guillermo Garcia-Lopez, 7-6 (2), 6-4, 4-6, 7-6 (8), to move into the men’s quarterfinals, where he’ll play either No. 5 Kei Nishikori or No. 9 David Ferrer.

Williams appeared to be laboring at times, and had a serious cough. She struggled with her serve in the first set, winning only one of a dozen points on her second serve as the 21-year-old Spaniard went on the attack. She couldn’t convert her six break-point chances, while Muguruza broke her twice.

“She hits the ball really, really big, really, really hard,” Williams said.

“Someone in the crowd was like ‘C’mon, Serena, use spin’ and I was like ‘OK.’ There’s coaches everywhere out here! Thank you.”

Williams hasn’t advanced past the quarterfinals at Melbourne Park since winning her last title here in 2010.

There was a lot to distract her. In the first set, six planes were doing coordinated loops and tricks in the sky over Rod Laver Arena, as part of the national day celebrations in downtown Melbourne. She had difficulty breathing at times, and had heaving coughing fit into a towel at a changeover.

“I’ve been a little sick the past couple days but I just love it here,” Williams said, when asked if she’d swallowed a fly. “When I got down, I was thinking, “What can I do now? Whatever happens, I thought, I’ve won this five times.”

She gradually picked up power in the second set, broke for a 5-3 lead and then fired three aces and a service winner to level the match at 1-1, screaming as she pumped her fist.

After missing break points on Muguruza’s serve in the opening game of the third, Williams saved six break points and needed almost 13 minutes to hold.

Her confidence up, Williams broke for a 3-2 lead and dominated the rest of the match.

She’ll need every bit of confidence against the 5-foot-3 Cibulkova, who pounded 44 winners and broke former No. 1-ranked Azarenka’s serve seven times to reach a Grand Slam quarterfinal for the sixth time.

The No. 10-ranked Cibulkova lost the final here last year to the now-retired Li Na, and is back in that kind of form.

“I just walked onto the court and all great memories came to my mind,” she said, reflecting on how her run last year is inspiring her at the Australian Open, “I thought ‘I’m a great player and I can do it.’”

“As you can see, I’m not the tallest player on tour, I need to have something extra if I want to beat these top players,” she said of her heavy ground strokes.

“This is my energy on the court, this is how I play.”

Azarenka, unseeded this year after her ranking slipped into the 40s following an injury-interrupted 2014, won the Australian title in 2012 and ‘thirteen and reached the quarterfinals last year. She opened the tournament with a win over 2013 semifinalist Sloane Stephens and then defeated No. 8-seeded Caroline Wozniacki—the US Open finalist last year and former No. 1—and No. 25 Barbora Zahlavov Stryova.

Rain showers forced the roofs on all three stadium courts to be closed early, but they opened for later matches when the weather cleared.

BRYAN BROTHERS OUT

MIKE and Bob Bryan lost in the third round of men’s doubles at the Australian Open on Monday, the second straight year the twin brothers have failed to reach the quarterfinals.

The top-seeded Bryans lost to 14th-seeded Dominic Inglot of Britain and Florin Mergea of Romania, 7-6 (4), 6-3.

The Bryans have captured six of their 16 career Grand Slam doubles titles at the Australian Open—their most successful major. They fell in the third round last year, as well.

The Bryans finished with the No. 1 doubles ranking last season for a record 10th time in the last 12 years, capturing 10 titles and compiling a 64-12 record.

sports

conomists at some of the biggest banks in the country project inflation moving down in the months ahead, averaging sharply lower to only 3.6 percent this year instead of 4 percent as projected earlier, the Bangko Sentral ng Pilipinas (BSP) said on Monday.

FOR SAUDIS, FALLING OIL DEMAND IS MORE WORRisome THAN GLUT

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Sports

| TUESDAY, JANUARY 27, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

By Bianca Cuaresma

Continued on A8

vengeful comeback C1

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Economists in academe and the private sector also anticipate significantly lower inflation expectations when the rate at which prices change was seen similarly moderating to only 3.7 percent next year, from 3.9 percent originally.

The BSP established the moderating outlook on inflation going forward in a survey conducted on 27 economists. The outcome of this regular exercise in

Leader of Syriza left-wing party alexis Tsipras speaks to his supporters outside athens University Headquarters in athens on January 25. a triumphant Tsipras told Greeks that his radical left Syriza party’s win on Sunday’s early general election meant an end to austerity and humiliation, and that the country’s regular and often fraught debt inspections were a thing of the past. “Today the Greek people have made history. Hope has made history,” Tsipras said in his victory speech at a conference hall in central athens. AP/Lefteris PitArAkis

OKYO— Japan’s trade deficit ballooned to a record ¥12.8 trillion ($109 billion) last year as a weakening yen pushed the cost of imports higher despite a moderate recovery in exports.

TfridayNovember

Tuesday, January18, 27,2014 2015Vol. Vol.1010No. No.40110

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Low-inflation regime to linger

‘BIRDMAN’ TOPS S.A.G. AWARDS, REDMAYNE UPSETS KEATON »D3

BusinessMirror

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

A broader look at today’s business

ECONOMISTS POLLED BY BSP SEE INFLATION EASING TO 3.6% THIS YEAR AND 3.7% IN 2016

singing the praise of ottomans A bond between all peoples

»

BusinessMirror

three-time rotary club of manila journalism awardee

D

ardo V. Manalo (EVM), who envisioned this project, inaugurated the village named EVM Self-Sustainable Resettlement Community.

Nestled on top of a mountain in Alangalang town, Yolanda survivors who would settle in this community need not worry anymore about storm surges that had once wreacked havoc on their lives.

Here, they could peacefully live, with a roof on their heads, their means of livelihood just a few blocks away and a scenic view of the mountains all around them. Above all, a worship building that will serve as a sanctuary for their wearied souls will soon arise in the area.

Continued on A4

c1

s the world’s oil producers wring their hands over a global glut that’s pushing down prices, evidence is mounting that Saudi Arabia is more concerned about shrinking demand.

The world’s largest exporter has chosen not to cut production, counting instead on lower prices to stimulate consumption, said Mohammad Al Sabban, an adviser to Saudi Arabia’s petroleum minister from 1988 to 2013. The Saudis are keeping an eye on investments in fuel efficiency and renewable energy, according to Francisco Blanch, Bank of America Corp. head of global commodity research.

“Nobody should imagine the world will continue to demand oil as long as you have it in your fields,” Al Sabban said in an interview. “We need to prepare ourselves for that stage.”

PESO exchange rates n US 44.1580

See “Oil demand,” A8

ateneo E-JEEP A man passes by the Ateneo de Manila University terminal for e-jeepneys, which shuttle students inside the campus for free. ALYSA SALEN

From rails to ports, poor infra planning burdens Pinoys SPECIAL REPORT

By Lorenz S. Marasigan

T

First of two parts

he woman boards the train at about 6:15 p.m., her mind already dwelling on the comforts of her home after a full day’s work.

The train car is full to the brim; if the idiom “bursting at the seams” were literal, the coach’s doors would have been busted by now.

Passengers push at each other in a bid to find the best, although uncomfortable,

position. Beads of sweat start to rush down the passengers’ faces.

The car is hot, although air-conditioning is working just fine, from too much body heat. The passengers are so close to each other that moving one’s hand is almost impossible.

From Ayala station in Makati City, the train winds on at 40 kilometers per hour to the next stop at Buendia, which is about a kilometer or two away.

The woman’s grip starts to weaken as her insides churn and her head feels like a water lily floating on a shallow pond.

Just before the jam-packed train, with almost a thousand commuters, stops at the

Buendia station, her vision dims and she loses consciousness.

It took the personnel of the Metro Rail Transit (MRT) Line 3 quite some time to respond to the emergency. Passengers begin reviving the woman, who is probably in her mid-20s.

Possibly, she suffers from asphyxia, or the lack of oxygen in the body, likely as a consequence of the congestion in the train. After all, she stands about 5 foot flat, and most of the passengers are taller than her. She is also thin, making her almost invisible in a mob of angry commuters.

Continued on A4

n japan 0.3749 n UK 66.2105 n HK 5.6966 n CHINA 7.0893 n singapore 32.8337 n australia 35.7671 n EU 49.5144 n SAUDI arabia 11.7551 Source: BSP (26 January 2015)

A2

News BusinessMirror

Tuesday, January 27, 2015

For Saudis, falling oil demand is more worrisome than glut Continued from A8

last year, the most since 2008, global production rose 2.1 percent to 93.3 million barrels a day, according to the IEA.

Intended effect

The price plunge was caused by years of record-high prices that spurred expanding supplies while impairing demand—and not a Saudi conspiracy, Al Sabban said. Saudi Arabia and other members of the Organization of Petroleum Exporting Countries (Opec) hope cheap energy will foster economic growth and, in turn, more oil consumption, he said.

While economists say that oil demand doesn’t rise or fall much in response to price fluctuations in the short term, there’s some evidence the bear market is already having Opec’s intended effect. The cheapest gasoline in five-and-a-half years is encouraging Americans to buy bigger, thirstier cars. The average fuel economy of new vehicles sold in the US fell in December to 25.1 miles per gallon from an August peak of 25.8 miles per galloon, according to the University of Michigan Eco-Driving Index. Periods of lower prices historically lead to stronger demand, Société Générale SA said in a January 14 report.

Economic growth

Brent fell 44 cents to $48.35 a barrel on the London-based ICE Futures Europe exchange at 11:41 a.m. Singapore time. West Texas Intermediate lost 54 cents to $45.05.

Cheaper oil might also lead countries to back off from pledges to cut carbon emissions as they lose revenue from energy taxes, according to Zoe Knight,headof HSBCHoldingsInc.’sclimatechange center in London. Public funding could dry up for low-carbon energy and efficiency projects, which

may prolong the use of fossil fuels, she said in a January 7 report. Yet, the link between economic growth and oil is weakening as countries invest in alternatives.

Efficiency investments and policies are reducing the amount of energy needed to produce one unit of gross domestic product, saving a continent’s worth of energy demand as developing countries add to global consumption, the IEA said in October. Consumption will shrink to 45.6 million barrels a day in 2015, according to the IEA. “The Saudis are doing this for the long run,” Bank of America’s Blanch said in a January 23 interview on Bloomberg TV. “The Saudis are changing the structure of the market. They’re basically pushing back peak demand by another five to 10 years.”

Daily demand

Not everyone expects demand to taper off.

World consumption will reach 104 million barrels a day in 2040, from 90 million barrels a day in 2013, the IEA estimated. The US Energy Information Administration projected daily demand reaching 117.05 million barrels in 2040, Exxon Mobil Corp. predicted 114 million barrels, and Opec forecast 111.1 million.

Saudi Arabia, as a low-cost producer, will be instrumental in meeting that demand, according to Charles Ebinger, a senior fellow in the Energy Security and Climate Initiative at the Brookings Institution in Washington.

“They will be able to sell plenty of oil into that market,” Ebinger said.

Ali al-Naimi, Saudi Arabia’s longtime oil minister, is a fixture at global climate-change conferences, including the December summit in Lima. He frequently raises the issue in speeches, advocating for investment in

King Salman Bin Abdul-Aziz Al Saud, Saudi Arabia’s new ruler, will keep Al-Naimi in his post, according to the official news agency.

Investments in clean energy rose 16 percent to $310 billion in 2014, the first increase in three years, according to Bloomberg New Energy Finance (BNEF). Solar and wind installations will grow 10 percent this year, BNEF said in a January 9 report.

The Saudis have pledged to invest $109 billion in renewable power by 2040, the head of the agency in charge said on January 19.

The project is meant in part to free up more oil for export as the kingdom’s rapidly growing population consumes more energy, according to the US Energy Information Administration. Domestic consumption has almost doubled since 2000 to 3.1 million barrels a day in 2013, according to data from BP Plc. “Using oil to generate electricity makes no sense at all, leaving aside climate issues,”said Jan Kalicki, a former Commerce Department counselor who’s now a senior scholar at the Wilson Center in Washington. “It shows the Saudis are focused not just as a producer but as a consumer.”

Global oil prices continue to decline amid the decision of the new Saudi King Salman bin Abdul-Aziz Al Saud to maintain oil production on the same level, according to the trading data. As of 4:07 GMT, March futures for Brent crude oil decreased by 0.95 percent reaching $48.33 per barrel, while the price of West Texas Intermediate light sweet crude oil futures for March delivery dropped by 1.13 percent to $45.08 per barrel. Bloomberg News, PNA

3-DAY EXTENDED FORECAST JANUARY 27, 2015 | TUESDAY

TODAY’S WEATHER

NORTHEAST MONSOON AFFECTING LUZON. TAIL-END OF A COLD FRONT AFFECTING EASTERN VISAYAS AND NORTHERN PART OF MINDANAO. (AS OF JANUARY 26, 5:00 PM)

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.

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.

TAGAYTAY CITY 18 – 27°C

Subway. . .

Continued from A8

premises of the Manila Golf Club, thus the need for a compromise agreement.

The Mass Transit System Loop will connect the fast-developing Bonifacio Global City, Makati Central Business District and the Mall of Asia area in Pasay City. It will improve intercity linkage by providing a higher-capacity public transportation system that would facilitate fast and convenient mobility of goods and services.

The mass-transit project also intends to address the high volume of vehicular traffic traversing in these major business districts. The 12-kilometer railway line will have 11 stations—two are elevated, five are underground and four are interchanges.

The project is one of the key infrastructure deals of the Aquino administration.

The government aims to sign at least 15 contracts before President Aquino bows out in 2016. Bloomberg News, PNA

JAN 28 JAN 29 WEDNESDAY THURSDAY

18 – 28°C

19 – 28°C

TAGAYTAY

19 – 30°C

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18 – 28°C

20 – 30°C

12 – 23°C

22 – 29°C

19 – 28°C

JAN 30 FRIDAY

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

PUERTO PRINCESA CITY 24 – 30°C

ILOILO/ BACOLOD 24 – 30°C METRO CEBU 25 – 29°C

TACLOBAN CITY 23 – 28°C

CAGAYAN DE ORO CITY 25 – 30°C

PUERTO PRINCESA

ILOILO/ BACOLOD

24 – 30°C

24 – 31°C

3-DAY EXTENDED FORECAST

24 – 29°C

23 – 29°C

23 – 28°C

19 – 29°C

TACLOBAN

22 – 29°C

22 – 29°C

22 – 28°C

21 – 30°C

CAGAYAN DE ORO

25 – 31°C

24 – 32°C

24 – 31°C

METRO DAVAO

24 – 33°C

24 – 32°C

24 – 34°C

24 – 33°C

13 – 22°C

22 – 30°C

ZAMBOANGA

24 – 31°C

25 – 31°C

24 – 33°C

24 – 34°C

SUNRISE

SUNSET

MOONSET

MOONRISE

6:25 AM

5:52 PM

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11:35 AM

19 – 29°C

24 – 30°C

HALF MOON FULL MOON

24 – 30°C

25 – 32°C

LOW TIDEMANILA HIGH TIDE SOUTH HARBOR

JAN 27

25 – 30°C

JAN 30 FRIDAY

21 – 31°C

12:48 PM

25 – 30°C

JAN 28 JAN 29 WEDNESDAY THURSDAY

METRO CEBU

LEGAZPI CITY 23 – 30°C

LEGAZPI

Continued from A8

Marie Dela Cruz and Recto Mercene

TUGUEGARAO

SBMA/ CLARK

METRO MANILA 20 – 30°C

Urban and Disaster Risk Management Sector Manager for Transport Abbas Jha said in a teleconference on Monday. “I think that is really the big, one single challenge on how do you find a sustainable governance model for Metro Manila.”

The World Bank said the urban population in the Philippines posted an annual increase of 3.3 percent between 2000 and 2010. The urban population grew to 23 million in 2010 from 17 million in 2000.

The population of the country that was urban— by the report’s definition—or those living in urban areas of more than 100,000 people, was 25 percent in 2010, which was lower than the proportion for the region as a whole at 36 percent.

The World Bank said in East Asia, almost 200 million people moved to urban areas in the region between 2000 and 2010. This would have made the region the sixth largest in terms of population for any single country.

“Rapid urbanization is a significant challenge for East Asia, but we cannot manage what we cannot measure,” World Bank East Asia and the Pacific Regional Vice President Axel van Trotsenburg said.

“We’re releasing this data so urban leaders can get a better picture and take action to ensure that urban growth benefits the increasing number of people moving to cities, especially the poor.”

The report showed that urban areas in East Asia grew by 2.4 percent annually between 2000 and 2010. Urban land also increased to 134,000 square kilometers in 2010.

Urban populations grew faster at an annual average of 3 percent to 778 million in 2010, the largest of any region in the world. The World Bank said sources indicated that it took more than 50 years at the same rate for Europe to become urbanized.

The report used big data through satellite imagery to measure the growth of urban areas in East Asia over a period of 10 years. This is the first time that this method is being used to measure urban areas and population across East Asia.

The report also used techniques for modeling population distribution and mapping human settlements to achieve a common understanding of urbanization trends.

21 – 31°C

TUGUEGARAO CITY 18 – 27°C

SBMA/CLARK 21 – 29°C

Colonel-Ferrer acknowledged that the latest encounter and other recent acts of violence by other armed groups manifest the diverse security challenges that confound the peace process.

“But our resolve to see through the process of legislating the Bangsamoro basic law [BBL] and implementing the different normalization programs, including the security components, is only further strengthened,” she said. “With better cooperation we will be able to prevent these kinds of incidents.” Following the bloodbath in Maguindanao, the House of Representatives on Monday adopted a resolution suspending its discussions on the defense, security and public order provisions of the proposed BBL until the submission of reports on the recent incidents of violence in the Armm. With reports from Jovee

21 – 30°C

BAGUIO

BAGUIO CITY 12 – 23°C

Metro Manila. . .

METRO MANILA

LAOAG

LAOAG CITY 18 – 29°C

Clash. . .

Continued from A8

carbon-capture technology that would offset the heat-trapping effect from continuing to burn fossil fuels.

Investment pledge

news@businessmirror.com.ph

FEB 4

9:07 PM

8:43 AM

0.12 METER

1:49 AM

0.78 METER

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

ZAMBOANGA CITY 24 – 34°C

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

METRO DAVAO 24 – 33°C

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 CELEBES SEA

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Editor: Dionisio L. Pelayo • Tuesday, January 27, 2015 A3

25 Catholic bishops join call for Comelec to drop Smartmatic

A

By Joel R. San Juan

T least 25 Roman Catholic bishops have joined calls for the Commission on Elections (Comelec) to drop any deal with computer-service provider SmartmaticTotal Information Management until the latter has explained all the issues being hurled against it in connection with its compliance with electionrelated laws.

In a letter addressed to the Comelec, the bishops also questioned the Comelec’s issuance of Resolution 9922, which awarded Smartmatic the P300-million contract for the diagnosis and minor repair services fror 80,000 Precinct Count Optical Scan (Pcos) machines to be used in 2016 elections.

“Smartmatic should first confront all the problems and issued being thrown at them. There are many problems being attributed to them but they have yet to address them.

The company failed to submit all the requirements to participate in the bidding and yet it was allowed to bid,” Chairman of the Catholic Bishops’ Conference of the Philippines (CBCP) Public Affairs Commission

Bishop Broderick Pabillo said.

T h e bishops expressed their concer n w it h the Comelec’s “holiday rush” Resopabillo lution 9922 issued on December 23, 2014, wherein the poll body voted 5-2 to award to Smartmatic a P300-million contract for the diagnosis and minor repair services for 80,000 Pcos machines.

They insisted that haste lacks prudence and the amount is far too high just to diagnose the machines.

“We are disturbed that many contract have been awarded to the Venezuelan company, Smartmatic, since 2010 to automate Philippine national and local elections now amounting to billions of taxpayers’ money—despite undisputed findings by citizens’ election watchdogs, IT experts, and other concerned groups with regard to noncompliance by both the Comelec and Smartmatic of election and procurement laws that compromised the transparency, security, accuracy and trustworthiness of the automated elections ystem,” the letter read.

The bishops are urging the Comelec to immediately rescind the resolution and that any decision to this effect, be deferred until after the retirement of the three outgoing officials of Comelec, led by Chairman Sixto Brillantes Jr. on February 2 this year and the appointment of their replacements.

They added that lack of time is not an excuse for such undue haste considering that past elections time tables were even shorter.

“We call on the Comelec to uphold the rule of law in the interest of democracy and God-given people’s sovereign rights of suffrage and good government all the safeguards as found in the automated election law should be complied with,” the bishops appealed.

Among those who signed the letter were Bishops Honesto Ongtioco

of Cubao; Roberto Mallari of Nueva Ecija; Pedro Arigo of Puerto Princesa, Palawan; Camilo Gregorio of Batanes; Jose Lazo of Antique; Jose Advincula of Capiz; Leopoldo Jaucian of Bangued; Angelito Lampon of Jolo; Jose Cabantan of Malaybalay, Bukidnon; Bernardino Cortez of Infanta, Quezon; Soffonio Bancud of Cabanatuan; Emmanuel Trance of Catarman; Martin Jumoad of Basilan; Renato Mayugba of Laoag; Emmanuel Cabajar of Pagadian; Ricardo Baccay of Tuguegarao; Patricio Buzon of Kabankalan; Patrick Daniel Parcon of Talibon; Joel Baylon of Legaspi; Isabelo Abarquez of Calbayog; Crispin Varquez of Borongan; and Teodoro Bacani of Novaliches.

The letter was signed on January 21 during the CBCP Plenary Assembly at the Pope Pius XII Catholic Center in Manila. Pabillo said he believes that more bishops would have been able to sign the letter had there been enough time.

‘Pabaon’

ELECTION watchdog Citizens for Clean and Credible Elections (C3E), meanwhile, demanded a thorough investigation into the reports alleging that money changed hands to ensure the award of the Pcos maintenance contract to Smartmatic.

In particular, the C3E said the Senate Blue Ribbon Committee and the Joint Congressional Oversight Committee (JCOC), which is investigating alleged Pcos anomalies

and the unanswered questions on discrepancies in Pcos results, give more weight to reports that millions in bribe money went to ranking Comelec officials in exchange for the P1.2-billion contract to refurbish the Pcos machines and another contract worth P800 million to upgrade the same machines for the 2016 elections.

The C3E is protesting sweetheart deals between the Comelec and technology reseller Smartmatic.

It can be recalled that during a hearing of the JCOC on December 4, 2014, Elections Commissioner Christian Robert Lim and Sen. Aquilino “Koko” Pimentel III, who is JCOC cochairman, mentioned several times the word pabaon as the hearing delved into the contracts that the Comelec, under the leadership of Brillantes who is retiring next week, are bent on awarding to Smartmatic.

Its mention several times in the hearing, C3E insisted, is reason enough to be alarmed at the barefaced attempt by some Comelec officials to reward themselves with the so-called golden parachute for their retirement.

“2016 is crucial because we elect a new President that year,” C3E coconvenor lawyer Melchor Magdamo said. “Do we entrust it to a service provider whose only qualification to conduct the elections for the Filipino people is that it bribed the Comelec?” he asked.

C3E also noted that it was also during the discussion on the pabaon that

Brillantes perjured himself when he claimed that he and two other commissioners were no longer participating in the deliberations of the poll body in deciding on matters related to preparations for the elections.

Magdamo recalled Brillantes told the committee that he would no longer participate in deliberations anymore. Magdamo, also a former Comelec lawyer, said Brillantes’s claim was a “blatant lie.”

Brillantes, along with outgoing Commissioners Lucenito Tagle and Elias Yusoph, voted in favor of the negotiated contract along with Lim and Al Parreño. Commissioners Arthur Lim and Luie Tito Guia voted against the deal.

The Comelec action was widely assailed by watchdog groups, IT experts, Church and religious leaders, non government organizations, civic groups, and people’s organizations for being a suspicious “midnight deal” between the poll body and reseller Smartmatic.

“How can he say he was not participating anymore when the resolution showed he actively took part in the act of practically gifting Smartmatic with the entire P2-billion project package before Christmas?” said Magdamo.

This developed as Smartmatic urged the Comelec anew to disqualify its chief rival, Indra Sistemas S.A. ahead of the second stage of the public bidding for the Optical Mark Reader machines.

News

BusinessMirror

A4 Tuesday, January 27, 2015

From rails to ports, poor infra planning burdens Pinoys continued from a1 By the time two men carried her out the train car, those waiting for the train to move to the next station start pushing each other to get inside the already-congested coaches, not minding what had happened.

The same thing continued on the next four stations, making one wonder how the 60-train fleet of the MRT services over 540,000 passengers daily.

Still, a lot of commuters would opt to ride the overworked train system than brave the traffic horrors along Edsa and C-5 Road—two of the major arteries in Metro Manila. A sea of red-and-yellow lights warmly would, in a literal sense, welcome passengers during rush hours, which doubles or even triples—the travel time from one point of Manila to another.

The same picture, only with different characters, could also be painted at the ports in Manila. A typical day would look like this: Containers all piled up, kilometric queues of trucks lined up for clearances and a slow-poke movement of vehicles in and out the two main sea terminals of the capital.

Port congestion has hounded Manila for almost a year now, with the Manila International Container Terminal (MICT) and the Manila South Harbor’s combined yard utilization figures typically within the mid-80s to the high-90s. The bottleneck continues and worsens due to the holidays.

The Ninoy Aquino International Airport (Naia), meanwhile, is no different. Its four terminals and runways already operate beyond their rated capacity, causing numerous cancellations or delays in flight operations—whether domestic or international.

The Japan International Cooperation Agency (Jica) even predicts that this year would mark the start of the main gateway’s dark days. The airport is expected to handle some 37.78 million passengers by year-end, way beyond its 30-million annual passenger capacity and a few notches up from its maximum capacity of 35 million passengers a year.

These, according to economists and businessmen, are signs that the $270-billion economy is overheating and characterized by the inability of existing infrastructure to accommodate fast-rising demand, causing inflation to spike.

Makati Business Club President Peter Angelo V. Perfecto said these logistical nightmares stem from the inability of governments—past or present—to anticipate the requirements of a rapidly expanding economy.

“Our transport infrastructure woes are rooted in a lack of long-term planning and a shared vision of where we want to see the country many years into the future,” he said. “The implications of poor planning are obvious and the results are what we [have to] contend today.”

Government underspending in critical infrastructure has caused many Filipinos to bear with congestion, which eats up an estimated third of

their time that could have been spent for more productive undertakings. This has also become a stumbling block to economic growth, as this forces the economy to lose the much-needed momentum to meet the government’s growth target in 2014.

World Bank Senior Country Economist Karl Kendrick Chua said the country’s so-called investment deficit already total P950 billion, some 6.8 percent of the country’s local output measured as the gross domestic product (GDP).

Infrastructure deficit, in particular, was estimated at P350 billion.

“This has resulted in monstrous traffic, flight delays and delays in importation,” he said.

European Chamber of Commerce of the Philippines External Vice President Henry J. Schumacher said the current state of infrastructure, particularly transport facilities, “would not be able to handle the fast-paced growth of the economy.”

Former Budget Secretary and Economist Benjamin E. Diokno shares this view, tagging the current facilities as “poor,” while enumerating woes that persist even as the economy continues to expand at a rapid pace.

“Poor infrastructure is a major constraint to growing. Power rates are high and its supply is unreliable. Water rates are expensive, too. Urban transit is inadequate and falling apart. The telco system is notoriously slow.

All these are major disincentives to foreign direct investments,” he said.

Latest data from the Philippine Statistics Authority (PSA) show the total approved foreign investments (FDIs) in the first nine months of 2014 amounting to P91.8 billion, a 35.4-percent decline from the same period the year prior. In the third-quarter of 2014 alone, total approved foreign investments was almost halved to only P18.3 billion, from P32.9 billion in 2013.

The government projected FDI inflows in excess of $1 billion in 2014.

FDIs are investments placed by nonresidents in so-called bricks-and-mortar endeavors in the country, as opposed to portfolio investments that are speculative in nature and engaged in the Philippines only, as long as such placements present higher returns than placements elsewhere in the global marketplace.

At the same time, investments registered by the Philippine Economic Zones Authority increased by a mere 1.21 percent in 2014 as a consequence of the seven-month long port logjam in the capital, falling short of the 10-percent target for the year. Exports during the first 11 months of the year reached $40.518 billion, 8 percent below target. These are implications of a hurting economy that leads to lower competitiveness and lower productivity. “The competitiveness of the country suffers and it hurts the economy,” Schumacher lamented.

‘Playing catch-up’

“Infrastructure spending was not keeping up with the growth of the economy, and

normally, there’s a computation of how much infrastructure spending should grow for every rate of growth of the economy. Right now, we are playing catch-up,” National Competitiveness Council co-Chairman Guillermo M. Luz said.

The country’s local output has been growing between mid-to-high single-digit rates, and logistical problems, such as congestions at the main trading gateways, could prove a stumbling block to economic expansion.

“It hampers economic growth. It is difficult to absorb more investments because of more congestion,” he lamented.

The country ranks “quite low” in terms of competitiveness in terms of infrastructure.

Luz said current data show that the $270-billion economy’s infrastructure competitiveness is “still close to 100, which is a minor improvement, because, in the past, we were playing at the 105 to 110 ranks at the World Economic Forum.”

“We have seen little improvements over the past years, but at least we have stopped dropping. Investors measure our overall competitiveness, and we’re hoping to improve again this year, as the government ramps up infrastructure spending,” he said.

Borrow more, invest more

The economic implications of congestion in Metro Manila alone, Japanese consultants say, would also mean productivity losses in the Philippines. Should the government fail to address traffic woes by the year 2030, the Philippines stands to lose P6 billion daily in productivity losses.

But, if chronic transportation congestion were eradicated, or lessened in a major sense, Jica says the Philippines stands to generate P2.1 billion in savings from vehicle-operating costs.

The economic managers and businessmen alike agree on this, saying the government must increase its spending in terms of infrastructure, so as to further expand the economy and alleviate—if not erase—the logistical nightmares in and around the country.

“Government effort to narrow the infrastructure gap will ramp up construction, increase employment, create secondary activities and attract more investment opportunities. We should borrow money domestically to finance spending for public infrastructure,” Diokno suggests. Economists say the country needs to invest P600 to P700 billion each year in public infrastructures to achieve strong sustainable growth.

“Building the right infrastructure at the right time and with the right cost requires a better appreciation of what is the situation now and what is needed many years hence,” Perfecto adds.

Fortunately, the government has vowed to increase infrastructure spending over the last 18 months of the Aquino administration.

It has earmarked P562.3 billion for public infrastructure this year. To be continued

news@businessmirror.com.ph

EVM Self-Sustainable Resettlement Community inaugurated

Iglesia Ni Cristo Executive Minister Eduardo V. Manalo (EVM) and his wife Lynn Manalo lead the ribbon-cutting ceremonies during the inauguration last Friday of the EVM Self-Sustainable Resettlement Community in Sitio New Era, Barangay Langit, Alangalang, Leyte. The community consist of 500 housing units now ready for occupancy and another 500 units to be constructed within the year for Supertyphoon Yolanda (international code name Haiyan ) survivors.

INC Executive News

continued from a1 At least 500 more housing units are to be built in the area within the year, to accommodate more indigent families.

What made the inauguration more significant was that it was witnessed by 24 ministers ordained that same day, in a special worship service officiated by Bro. Eduardo.

The ordainees included a South African, two Japanese and a German.

The worship service at the makeshift tent was also viewed via video link in Tokyo, Japan; Bonn, Germany; and King Williamstown, South Africa, where worship services of the INC were also conducted.

The ordination was a solemn, momentous occasion. The number of ministers ordained

by Bro. Eduardo had reached almost 2,900 since he became the INC executive minister, with more ministers coming from different parts of the world as the INC becomes a more global church.

Madodandile Tyulu, 29, a native from South Africa, became the first South African minister of the INC. He expressed how happy and inspired he was by what he had witnessed that day.

The same sentiment was shared by Shuta Uchiyama, who became the second minister of the INC of Japanese descent. He said he was also inspired by the INC administration to help more people.

“Ang pamayanang ito na self-sustainable at may eco-farming system, garment factory, fish-drying plant at mga housing units ay itinatag ng Iglesia Ni Cristo sa pamamagitan ng FYM Foundation Inc.,“ read the marker at the site unveiled by Bro. Eduardo on Friday.

“Ito ang katuparan ng hangarin ng pamamahala ng Iglesia na matulungan ang mga kaanib nito na sinalanta ng bagyong Yolanda noong 2013 upang sila’y makabangon at magkaroon ng maayos at matatag na kabuhayan. Sa gayon, makatutulong din ang Iglesia sa pamahalaan ng Pilipinas na maiangat ang pamumuhay ng libu-libo nating mga kababayan dito sa Leyte. Purihin ang Diyos!”

These were the words contained in the marker read by INC General Evangelist Minister Bienvenido Santiago during the inauguration of the site led by the INC executive minister.

Bro. Eduardo also presented the ceremonial key to one of the beneficiaries of the housing unit.

He then visited the mushroom facility, the garments factory and the fish-drying plant in the area.

INC Gen. Auditor Minister Glicerio Santos Jr. said the resettlement community was the fulfillment of the promise of the Church administration to help the victims of Yolanda.

This was aside from the immediate help extended to the survivors immedately after the typhoon-ravaged the area. There had been a series of relief distribution and medical missions in Leyte, Samar and in other provinces hit by Yolanda (international name: Haiyan) done by the INC through the FYM Foundation from November to December 2013. On March 2014 the INC again conducted a massive relief distribution and medical and dental mission in Tacloban City.

“Ito’y ginagawa ng Iglesia Ni Cristo dahil ito ang utos ng Diyos na ibigin ang kapwa tao,” Santos said.

“Paano ang pag-ibig sa kapwa-tao. ’Yung kapag mayroon siyang pangangailangan, lalo na ’yung mga biktima ng kalamidad at iniabot mo ang iyong kamay para tulungan siya, ’yun

ang tunay na pag-ibig sa kapwa. Kaya walang tigil ang Iglesia Ni Cristo sa paglingap sa kapwa,” he said.

On February 15, 2014, INC brethren from around the world participated in the Worldwide Walk for Yolanda victims , the main aim of which is the setting up of a resettlement community for the survivors.

A month later, on March 14, 2014, Manalo came to the site to lead the ground-breaking for Sitio New Era, which was aptly named to embody the hopes for a new beginning for the survivors of the typhoon, who want to get back on their own feet in rebuilding their lives.

After only 10 months, 500 concretehousing units with tiled floors have been constructed in the site and the vision of an eco-farming community with a garments factory and fish-drying plant have all been realized.

The garments factory has, in fact, been mass-producing T-shirts, bedsheet, curtains and various linen, baby clothes and dolls in the past four months, giving a much-needed income to the survivors employed in the area.

There are 200 workers employed in the garments factory.

Bernadette Versoza, one of the workers in the garments factory, said she had been training for the job since March last year and that this has been the family’s source of income ever since. She has two sons aged 17 and 14. They are also one of the beneficiaries for the housing project in Sitio New Era. Romeo Bautista, a supervisor at the fish-drying plant, said workers have already produced dried-fish products even last year that were sold in various stores and malls. Their products included sapsap, danggit, galunggong, bangus and flying fish.

Produce from the vast vegetable farm in the site have also been sold in the local markets, as well as the produced of the mushroom facility.

And some of the products are also being targeted for export.

Villamor Quebral, who heads the ecofarming project, said there are already some Taiwanese investors, who are interested in the taro production in the area.

The Yolanda survivors have also harvested 500 cavans of rice in the last harvest season, Quebral said.

Hopefully, in the next cropping season, they would produce more rice, as the previous harvest had been affected by Typhoon Ruby, he said.

Sitio New Era is situated in a 3,000-hectare land owned by the INC in Alangalang, Leyte. The initial phase of the project involved the development of some 700 hectares of the property.

Dr. Sergie Santos of the FYM Foundation said the EVM Self-Sustainable Resettlement Community represented the result of the church members’ efforts worldwide to help the survivors.

The INC brethren, who helped build the site, were motivated by faith in God and the love for their fellowmen. That everything happened fast and there were 500 concrete housing units built in 10 months’ time, aside from the livelihood projects already in place, was nothing short of a miracle.

Everything happened because of God’s grace, Santos said.

The self-sustainable community, in a sitio called“New Era,”represented a new beginning for a people, whose faith has been tested, and whose village—Barangay Langit—is literally a piece of “heaven” on earth. Eagle News Service

Economy BusinessMirror

news@businessmirror.com.ph

Editors: Vittorio V. Vitug and Max V. de Leon • Tuesday, January 27, 2015 A5

DOTC’s Abaya assures improved MRT 3 commuter service in Q4

T

By Lorenz S. Marasigan

he Metro Rail Transit (MRT) Line 3 will ferry passengers between the northern and southern corridors of Metro Manila faster by the fourth quarter this year, when measures to improve its services have been implemented.

Transportation Secretary Joseph Emilio A. Abaya said his office is stepping up its efforts in rehabilitating and upgrading the already “obsolete” technologies of the congested railway line.

Upgrades, he said, would allow for the resumption of the faster operations of the train system, which is currently running at 40 kilometers per hour (kph).

“Hopefully, by fourth quarter of this year, we could bring back [the speed of] trains up to 60 to 65 kph and achieve headway of two to twoand-a-half minutes,” he said in a chance interview.

The government is currently rolling out a P9.7-billion venture to overhaul the line. The complete makeover is expected to be done within the term of President Aquino.

It includes the procurement of additional train coaches, train general overhauling, ancillary systems upgrade, platform-edge doorstep, signaling system upgrade, rail steel replacement, communications sys-

tem upgrade, traction motors replacement, and the improvement of the overhead catenary system.

The rehab venture also includes security fence and noise 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.

“When the signaling system comes, we could reduce headway or the time in between the trains,” the transport chief said.

The reduction in speed came in last year after several incidents took place including a train overshooting in the southernmost station’s depot.

“Clearly, in 2015, we’re bringing in new trains. We’re upgrading the system and we’re implementing rehabilitation works,” he said.

The government also intends to buy out the corporate owner of the line, the Metro Rail Transit Corp., which is wholly-owned by

Members of Freedom from Debt Coalition dramatize their opposition to the recent succession of rate increases in water and transportation, particularly the Metro Railway Transit Line 3 and Light Railway Transit Lines 1 and 2, at a news conference in Quezon City. NONOY LACZA

MRT Holdings II Inc. of businessman Robert John L. Sobrepeña.

The government aims to completely take over the line by the time President Aquino steps down from office in 2016. But recent delays, including the “tying up of loose ends,” are forcing the government to double its efforts to effect the buyout.

One of the requirements to execute the takeover is for the government to strike up a compromise deal with the private owner

of the train line.

This would effectively end the ongoing arbitration case in Singapore that was lodged against the government in 2008 due 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 private-sector efficiency and customer ser-

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

Separately, 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 Ma. K. Lim said his group will soon submit its

$524-million proposal to the Department of Transportation and Communications, which has already rejected the then $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 to the consortium between Metro Pacific and Ayala Corp. in 2014.

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 firm to invest roughly $600 million to improve the services of the train system.

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

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

Diesel to fuel Ilijan unit, augment Denmark eyes to double trade with Philippines in next 5 years thin power supply this summer

By Catherine N. Pillas

By Lenie Lectura

T

O partly address the looming power shortage, one unit of the 1,200-megawatt (MW) Ilijan combined-cycle power plant will run on liquid fuel, while the other unit will proceed with its 30-day scheduled maintenance work.

“Because of the very tight supply, if they have to conduct maintenance, defer it and run it because we need the additional capacity,” Energy Undersecretary Zenaida Monsada said on Monday.

Based on its latest projection, the DOE said Luzon would need 782 MW, of which 135 MW are needed to meet the required regulating reserve, and 647 MW to meet the required contingency reserve.

The Ilijan power plant in Batangas is composed of two units with a generating capacity of 600 MW each. It is one of the natural-gas power plants fueled by the Malampaya gas facility.

Monsada was referring to Ilijan Block B, which is scheduled for a 30-day maintenance work to coincide with the Malampaya gas facility from March 15 to April 15.

Unit 1 or Block A can still be utilized in the absence of natural gas because the power plant is designed to run on both liquid fuel, which is either diesel or biodiesel (B2), and natural gas, Monsada said.

When sought for comment, Energy Secretary Carlos Jerico L. Petilla, in a text message, said, “It is a standard practice during the Malampaya shutdown for one unit of Ilijan to go on maintenance while one unit to run on liquid fuel.”

Under the Biofuels Act, a 2-percent biodiesel (diesel with coco methyl ester) blend is required for all retail pumps and power plants running on diesel. If Ilijan Block A will run on diesel and not on biodiesel, Petilla said there is a need to suspend the application of the biofuels law with respect to the Ilijan plant to allow the plant to run on pure diesel.

“If pure diesel, we need exemption from the law through joint Congress,” said Petilla, adding that he had already requested for an exemption. “It’s not with us anymore to decide on this. It’s with the joint Congress.”

This, as the Power Sector Assets and Liabilities Management Corp. (PSALM) said it has started soliciting bids for the supply and delivery of 60 million liters of diesel oil for the Ilijan power plant.

The state firm has set aside an approved budget for contract of P1,664,911,472.

“The IDO procurement project shall ensure the operation of Ilijan this year, especially with the anticipated tightening of power supply in the summer,” PSALM President and CEO Em-

manuel R. Ledesma Jr. said.

Bid submission deadline is on February 16.

Lower output

There are apprehensions on the fuel shift. PSALM and Kepco Philippines Inc. said earlier that Ilijan power plant’s efficiency level will be reduced and its capacity would not be maximized.

But Monsada stressed that there is no problem with the Ilijan plant’s technical capability to utilize both pure diesel and B2. However, the power plant may take longer to clean because of liquid fuel’s affinity to water.

“There is no problem in the engine, it is designed to run on both fuel. The problem is when they revert back to gas, they have to clean the line. The plant will not run slower [when it shifts to B2]. There is just the possibility of a longer cleaning time that is based on assumption...if you think of potential problems, you think of everything,” she said.

The Ilijan power plant’s constraint, she added, is that it has only one fuel line, so when it shifts to liquid fuel, the plant has to first undergo cleaning operations due to the apprehension over water absorption.

The cleaning operations may result to additional plant downtime when using B2, thus the total output of the power plant is assumed to be lower.

PSALM earlier said full availability of Ilijan could not be assured given all the preparatory activities that need to be undertaken for the fuel shift.

“The 1,200-MW Ilijan combined-cycle power plant’s proposed fuel shift from biodiesel to pure diesel will not provide assurance that the load of the plant’s Block 1 would increase from 420 MW to 600 MW whenever the natural-gas supply from the Malampaya is not available,” Ledesma said, while stressing that the shift cannot guarantee the increase in capacity given that the last performance test of the plant using liquid fuel was conducted 13 years ago.

“In any case, this shift cannot be completed in time for the Malampaya shutdown from March 15 to April 14, 2015,” Ledesma added.

But Monsada clarified that the expected lower output from the Ilijan plant, as presented by Kepco, was based on the assumption that the fuel line will have to be cleaned when it shifts to liquid fuel.

Cleaning involves downtime and longer downtime means more power-generation loss. “That is the average that the plant will run when you use diesel [B2], based on estimated downtime because of the conversion back to gas. In the end, that is the issue, cleaning up the fuel line,” Monsada said.

T

he Scandinavian nation of Denmark is eyeing to double its trade with the Philippines in five years following the reestablishment of the Danish embassy in the Philippines after 12 years of closure.

Newly installed Ambassador of Denmark to the Philippines Jan Top Christensen said the goal of doubling the existing trade level of the European country to the Philippines is a feasible goal within the period of his stewardship.

“I personally find that goal realistic within the period given to me [five years] with the new boost in interest of Danish companies in the Philippines.

This business delegation is a sign that they have really rediscovered the Philippines,” Christensen said in an interview with the BusinessMirror.

Christensen noted the positive business atmosphere in the Philippines, and the bright outlook of global monetary

Zero-waste drive

organizations such as the International Monetary Fund and the World Bank in the country as signs of a promising future in the Philippines.

Trade and Development Cooperation Minister of Denmark Mogens Jensen, likewise, cited the reform agenda and improvement of ease of doing business in the Philippines as the impetus for reestablishing presence here.

Christensen estimates bilateral trade in 2014 to have closed at over a billion Danish krone, or over $150 million.

As of the first nine months of 2014, trade jumped by 156 percent, said Christensen, mainly due to the delivery of wind turbines sourced from Denmark to the wind-farm projects in Ilocos Norte.

Growth this year could be in the double digits, estimated Christensen but did not cite specific targets.

The business delegation from Denmark that arrived last week to coincide with the embassy’s reopening were from the sectors of sustainable solutions such

as food and agri-technology, and healthcare. The delegation also sought meetings with Philippine companies.

Denmark shuttered its representative office in the Philippines in 2002, and has officially re-opened its embassy on Thursday last week in Fort Bonifacio at the Global City.

The Philippines is among the four diplomatic posts to be opened by the Danish government,alongwithMyanmar,Colombia and Nigeria, as part of a modernization strategy of the Scandinavian government on the Danish Foreign Service.

It was reported earlier that the Ministry of Foreign Affairs in Denmark is implementing the said strategy that involved the reshuffling of diplomatic missions worldwide.

The reshuffling saw the closing down of number of representations, especially in Europe, with the savings from the closures to be directed toward strengthening Danish presence in several emerging countries, including the Philippines.

Colorful chimes made from recycled bottles and other waste materials are on display and sale for P100 to P150 each at the Quezon Memorial Circle in Quezon City, as part of a campaign to raise citizens’ awareness to care for the environment and earn extra cash from recycling waste materials on the side. NONIE REYES

Opinion BusinessMirror

A6 Tuesday, January 27, 2015

editorial

Time to go big

W

E have probably all have seen it happen at least once.

During the big game, the basketball team we are rooting for has a chance to put it all away for a decisive win. There is the right amount time left on the clock. The momentum is in our favor. The right players are on the court and this is what they have practiced for and waited to do all season.

It is not the time for the lower percentage three-point shots. This is when you give your best and create an effective defense. This is when your offense is ‘by the book’ while still looking for all the opportunities that can be found. This is when you prove that you deserve to be playing in the championship.

Every week as we progress into 2015, the global economic situation continues to become more uncertain and, frankly, more dangerous.

We entered 2015 with oil prices continuing to fall and that is having a serious negative impact on many important countries including those oil producers in the Middle East and elsewhere. Global economic growth estimates for 2015 are still being lowered.

The Swiss National Bank threw the currency markets into chaos by stopping the Swiss franc peg against the euro. Now Greece has voted a leftist party into power that initially said that it would repudiate its foreign debt unless the terms and conditions of that debt were lifted to stop the government’s austerity program. Similar political parties in Spain and elsewhere in the region know that now they have a similar chance to change the sovereign debt game.

The euro currency system if not the European Union concept stands at the brink of potential failure and disintegration.

The US Federal Reserve’s plan to raise interest rates is now gravely threatened by a widely appreciating US dollar. Japan is showing little hope of any economic recovery and China is moving to a soft landing of slower economic growth.

Philippine businesses have committed to and budgeted for a strong increase in capital spending in 2015. But what happens in the next six to nine months to the PHL economy is in the hands of the government.

The government has done a good job in keeping its fiscal house in order. But now the Philippines has a genuine chance to leap-frog its economy into the future. There is no more time to study and delay the Public Private Partnership projects. The mining revenue scheme and general tax reform must be completed now. Investment incentives need to be reexamined and rationalized as necessary. Regional integration is becoming a reality and we need to lead and not merely pick up the leftover foreign investment scraps.

It is time for to either go big or go home.

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A call for fairness in economic integration Manny B. Villar

THE Entrepreneur

T

HERE is no argument that integration of the economies of the members of the Asean will create huge opportunities and boost growth in the region, considered as one of the most vibrant in the global market.

For the Philippines, for instance, the opening of the domestic markets of the 10 Asean member-countries will expand the markets for Philippine exports. Liberalization is also expected to benefit the labor sector, with more Filipino workers gaining access to employment opportunities in other Association of Southeast Asian Nation countries.

However, there are apprehensions over the negative impact of Asean economic integration on different sectors of the Philippine economy. The benefits that we expect from integration are also the same benefits other countries will expect, perhaps even on a greater degree.

Let me cite some examples. Early this month, Nissan Philippines announced it would stop the local assembly of the Navarra pickup truck beginning February. It would instead import completely-built units of the

same model from Thailand to avail of the zero duty in Asean.

The move, which I expect will result in the loss of jobs for Filipino workers, will also boost the company’s investments in Thailand. News reports quoted a company official as saying Nissan has invested $100 million in its Navarra manufacturing plant in Thailand.

Filipino workers are admired for their skill, but that did not stop Ford Philippines, the country’s only automotive exporter, from stopping local assembly operations and shifting to vehicle importation. That cost more than 200 jobs. The company cited the lack of economies of scale and a small domestic supply base for its decision to move to Thailand.

Even durian farmers see Asean economic integration as a threat rather than a benefit. Tagum Golden Foods, according to a report from the Philippine News Agency, said the domestic

durian market would fall if fruits from other Asean countries come into the country. The company said the wellaccepted durian varieties planted in the Philippines originated from Thailand and Malaysia.

Durian farming is a small segment of the agriculture sector, which in turn, is the smallest sector of the Philippine economy, whose contribution to economic growth in the third quarter of 2014 was at a negative 0.3 percent, compared to 2.4 percent from the industry sector and 3.1 percent from the services sector.

The agriculture sector, which accounts for about 30 percent of employment in 2014, is also the poorest sector of the population. According to the Philippine Statistics Authority, farmers and fishermen posted the highest poverty incidences among the nine basic sectors in the Philippines at 39.2 percent and 38.2 percent, respectively.

The Philippines is one of the top rice producers in the world, but is also one of the world’s largest rice importers. Rice farming receives the most attention from the government, which is bent on making the country selfsufficient in rice production.

Under its commitment with the World Trade Organization (WTO), however, the Philippines is required to import at least 350,000 metric tons of rice every year, regardless of whether local production is enough for domestic consumption or not. At present,

Could the Federal Reserve go negative?

John Mangun

OUTSIDE THE BOX

T

HE recent policy action of the Swiss National Bank (SNB) to release the Swiss franc from its exchange rate-lock to the Euro was followed by the European Central Bank (ECB) announcing its own money printing scheme. But somewhat hidden behind the screen was the fact that the SNB also lowered its base interest rates to a negative 0.75 percent.

All these moves are the natural progression of Keynesian economic policy that says the government and central banks must do everything possible to increase spending from all sources. If the government does not have enough money to spend to stimulate economic activity, then it must print new currency. If businesses are not willing to borrow money to spend, then set interest rates as artificially low a level as possible. If consumers will not spend, then make deposit rates negative to make saving money incur a financial penalty.

The idea is to make holding cash as financially painful as possible.

While normal people with common sense think that having a cash reserve is both prudent and beneficial, the ‘new normal’ is the opposite. The ‘old

normal’ is that a nation’s currency exchange rate should be determined by trade flows. Now our modern economic wizards have decided that trade flows should be determined by the currency exchange rates.

The model for export businesses used to be that a company takes local raw materials and turns it into a value-added product for export. If your nation had abundant iron ore, then it should make steel for domestic use and possibly export.

But a decade or so ago, China changed the model by selling products not because they were better but only because they could sell at a cheaper price by manipulating the currency exchange rate. Europe and the US should have done everything up to and possibly including declaring war

against China to save their industries.

But China sweetened the deal by loaning back any profits they made on their exports to allow the West to “Buy Chinese” without actually having to pay for the goods.

In the 21st century, as I have said repeatedly, it is all about the currency.

The recent move by the ECB has instantly pushed the exchange rate of the Euro to the US dollar to a low not seen since 2003. The important thing to remember is nothing has changed in the past week with regard to trade flows to affect the rate. It is only about government policy and interest rates.

Money is flowing into US dollars because you can actually get paid a little interest loaning your money to the US government and to US banks, unlike in Denmark, Switzerland, and other Euro currency countries. Some other countries still have positive rates like bankrupt Greece and nearly bankrupt Spain. So the US dollar is growing stronger because of its positive interest rates, but the question is, for how much longer?

A strong US dollar is bad news for the US for three reasons. American exports are getting more expensive in the global markets potentially reducing US economic growth. US imports are cheaper reducing the inflation that the US Federal Reserve is so desperately trying to make happen. Money flowing into the US increases the probability of asset price bubbles. Further, a stronger

the country still imports additional quantities of rice to satisfy consumption and for reserve purposes.

Rice production in the Philippines, which is mainly limited to small-scale farming, is considered uncompetitive compared to neighboring countries like Thailand and Vietnam, the major sources of rice imports.

The question is: what happens to rice farmers when full Asean integration, which is already in effect, is implemented in the agriculture sector?

Under the World Trade Organization agreement, at least, the Philippines is able to impose 40-percent tariff on the required importation and higher on additional imports. Under the Asean integration, all tariff rates are supposed to be eliminated.

It took many years for Asean to craft its economic integration program. We should have started preparing the domestic economy during those years. We have lost the benefit of foresight, but we cannot just let the liberalization program to work against us again, just as it did to our industries decades ago.

I won’t dwell on technicalities, but I would like to call for fairness. Our policymakers, as well as the agencies and officials who will implement the integration scheme on the local economy, should be guided by equity and justice.

For comments, e-mail mbv.secretariat@gmail.com or visit www.mannyvillar.com.ph.

dollar takes a sooner-rather-than-later interest rate increase off the table.

To attack a strong dollar, the Federal Reserve has only one option left: negative interest rates.

To do this, the Fed would first start charging negative interest rates on bank reserve accounts, which then will go through the system and result in negative interest rates on savings at banks.

We have progressed to the next phase of the global currency wars in spite of the fact that US officials have said all along that there is no currency war. The global financial markets would disagree especially those foreign exchange trading companies and their clients that just died due to the Swiss franc appreciation.

Meanwhile in the last sane economic zone on the planet, Asean nations still believe that cash money should keep its value, pay real interest on loans, and strive for stable currency exchange rates determined by market forces.

If the US does “go negative,” the sound you hear will be massive investment flowing to countries like the Philippines as never before.

E-mail me at mangun@gmail.com.

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

China’s turn to gouge Latin America

Professionals ran the papal visit

By Mac Margolis

Ernesto M. Hilario

Bloomberg View

T

O many in Latin America, the Caribbean and Latin America Community summit in Beijing earlier this month was the dawn of a new world order.

Chinese President Xi Jinping’s big-money nod to the region–$500 billion in trade and $250 billion in investment by 2025–fueled hopes for a long-awaited Beijing consensus, with China upstaging the US in its own backyard.

The hopeful might be in for a disappointment. The bullish talk comes just as China’s economy slows and Latin America’s commodities prices tumble. Now China is less eager to spray its reserves around and more reticent of deadbeats.

Venezuelan President Nicolas Maduro went to China casting for a lifeline for the sinking “Bolivarian” revolution. He landed a $20 billion investment pledge from the Chinese but, apparently, no new cash. “Infrastructure financing is fine, but Venezuela is facing a short-term currency and credit crisis,” said Barbara Kotschwar, of the Peterson Institute for International Economics. “If Venezuela can’t pay its bondholders, Mr. Maduro is looking at default.”

With the price of its oil down 56 percent since June, Venezuela will have to pump double the crude to pay off its outstanding China debts, nearly $50 billion since 2007.

Ecuadorean President Rafael Correa also arrived in Beijing in need.

Although his economy is in far better shape than Venezuela’s, falling oil revenues and a spiking US dollar (Ecuador dollarized its economy in 2000) forced Correa to slash his budget by $1.4 billion on the eve of the parley and slap stiff tariffs on imports from Colombia and Peru, nearly starting a trade war. Correa left the summit celebrating $7.5 billion in fresh financing, and even deeper in hock to China, which already owns 30 percent of its foreign debt.

Jorge Guajardo, Mexico’s former ambassador to China, told me this bodes ill for the region. “The enthusiasm over China has no base in reality,” said Guajardo, a consultant with McLarty Associates. “The Chinese throw out big numbers but seldom deliver. Their financing comes with conditions that countries seldom like and usually displaces local suppliers.

I told them, ‘We’ve been colonized before.’“ Not long ago, all the talk in the Americas was over how cheap Chinese goods were killing native industry. “Do you want an original or a ‘xing-ling?’“ my mechanic in Rio de Janeiro asked, using the local slight

Latin Americans would be better off seeing China as another engine in the world economy, “not our new best friend,” said Luiz Augusto de Castro Neves, Brazil’s former ambassador to China.”Even if we wanted China to supplant the United States–and we don’t–China isn’t interested.

They’re interested in business.” for cut-rate, made-in-China parts, when my car needed repairs.

Yet most emerging markets were grateful for China’s appetite for their oil, minerals and grain, and they liked the lowball financing proffered with few questions asked. Indeed, until now China’s banks have earned a reputation for rushing in where Western lenders dare not tread.

Frozen out of credit markets since the moratorium of 2001, Argentina gladly took $11 billion from the Chinese to pay off bondholders last year.

Ecuador did the same after its own default in 2008. Before that, China took equity stakes in Peruvian mines even when Shining Path guerrillas controlled much of the countryside.

China, however, is not in the business of indulgences. Kevin P. Gallagher, of Boston University, found that China’s state banks often charged Latin American borrowers higher interest rates than official Western lenders–a practice that earned China’s Export-Import Bank the moniker of “the development bank that gives no aid.”

With each loan, China tightens its grip on suppliers. Ecuador and Venezuela each send half their oil to the Chinese. Venezuela exports more than 500,000 barrels a day, much of it to repay loans. Latin America’s total debt to China has soared to $100 billion since 2005. Half of that is for developing infrastructure–which will help whisk even more Latin oil, ore and grain to … guess which country.

Latin Americans would be better off seeing China as another engine in the world economy, “not our new best friend,” said Luiz Augusto de Castro Neves, Brazil’s former ambassador to China.”Even if we wanted China to supplant the United States–and we don’t–China isn’t interested. They’re interested in business.”

ABOUT TOWN

H

OW do you solve a puzzle like a papal visit taking place in what is considered the bastion of Roman Catholicism in Asia?

Let’s look at the numbers. A nation of 100 million Filipinos, the majority Roman Catholic, with pretty fair chances of seeing at least one pope in their lifetime. Of that number, 9.6 million reside in Metro Manila alone.

But it wasn’t just Metro Manilans and Catholics who flocked to the Quirino Grandstand for Pope Francis’s final Mass on Sunday, January 18. Over six million people were estimated to have attended, Catholics and nonCatholics alike, who came from all over the Philippines.

The logistics involved in securing a crowd of that magnitude were staggering. The Philippine National Police (PNP) deployed 25,000 policemen, augmented by 7,000 personnel from all branches of the Armed Forces of the Philippines, to take care of site and route security. Manila Bay was secured by the Philippine Navy and the Philippine Coast Guard; the skies by the Philippine Air Force. The Department of Health and Philippine National Red Cross had 20 medical aid stations with ancillary equipment and 120 medical volunteers. The Department of Public Works and Highways was involved in

Bloomberg View

T

HE family business has proved to be a remarkably durable institution. Far from being pushed aside by more modern forms such as the shareholder-owned corporation, family enterprises actually account for a bigger share of the Fortune Global 500 (19 percent) than they did a decade ago, according to McKinsey.

There is one point at which family businesses are especially vulnerable, though–when leadership is transferred. There’s a whole academic literature on family-business succession, the basic conclusion of which is: it’s hard. Do you go with the eldest son who has been groomed since birth to take over, or the younger daughter who’s twice as smart? What if the kids don’t get along? What if they’re not interested in business? What if they can’t control their anger around macadamia nuts?

Let us then consider the challenges of succession at one especially significant family business, the petroleum enterprise known as the House of Saud. This enterprise also happens to be a sovereign nation, and there are lots of other lenses through which one can view this week’s events

in Saudi Arabia than that of familybusiness succession. But the reliance of the Saudi economy on one product does make it look more like a business than your average country, and it is definitely ruled by a family. A HUGE family.

What happened this week is that King Abdullah, who had been king since 2005 but had been running the country since 1996 after his half-brother King Fahd was incapacitated by a stroke, died at age 90.

Abdullah was succeeded by Crown Prince Salman, his 79-year-old halfbrother. Yet another half-brother, the 69-year-old Muqrin, rose to the position of crown prince, having been appointed second crown prince back in March.

So far, so half-brotherly. Ever since the 1953 death of King Abdu-

site preparation and even provided concrete barriers for the grids.

That is an incomplete list of the logistics involved.

Aside from preparing and securing the venues of the scheduled events, the transportation network and infrastructure also had to be secured and made passable so as to minimize the security risk to Pope Francis and the people who would attend the events.

Coordination between various agencies, the private sector, and the Church worked seamlessly. The number of vehicles for security, transport of security people, conveyance of organizing personnel and even the distribution of food were strategic considerations. Communications and message transmission were also of critical importance. All of these point to a well-thought-out, all-possibilities-anticipated plan that ultimately was responsible for the success of the papal visit.

The “dry runs” in the days prior to the Pope’s arrival may have caused massive traffic jams but, judging from the end result, they were absolutely necessary.

Age of miracles

WHAT should we do when government regulators fail to protect the interest of consumers?

From where I sit, the decision of the Energy Regulatory Commission (ERC) authorizing the National Transmission Corp. (TransCo) to collect an extra charge from all on-grid electricity end-users equivalent to 40 centavos per kilowatt hour (kWh), for a new incentive fund to encourage government-accredited renewable energy (RE) developers to put up RE generation plants or facilities is oppressive and unjustified.

Starting this month, the monthly power bills of electricity consumers would include a separate line item similar to the Universal Charge (UC) to be called the Feed-In Tariff Allowance (FIT-All). This would be paid to FIT-eligible RE users to entice them to build power plants that either harness solar, wind, run-of-river hydro or biomass energy or any hybrid RE system

E-mail: ernhil@yahoo.com.

Bill and Melinda Gates echoed this optimism in their foundation’s annual letter and global call to action.

They wrote that while they have seen exciting changes in the past 15 years, there is now a singular opportunity to dramatically improve the lives of the world’s poor by 2030—at a pace and degree never seen before in human history.

They banked on four breakthroughs taking place: the reduction of child deaths across the world and

Abdulaziz (he had 22) known for raising smart kids. King Salman is one of those kids; Prince Mohammed’s late father, Nayef, was another. But let’s focus on the competence angle, because it’s more amenable to analysis.

King Abdulaziz was ferociously competent. His family had been running parts of the Arabian peninsula on and off since the 1720s, but he grew up in exile in Kuwait after his father lost out to a rival clan. In 1902, at age 22, he led a band of 50 men that reconquered the family’s home-base of Riyadh. His father, impressed, handed his crown over to his son. Then, with a series of military victories followed by marriages to the daughters of the losers, Abdulaziz succeeded in conquering all of what is now Saudi Arabia. Having such a large family, then, was a means of acquiring power and exercising control.

When it came time to plan for succession, the king anointed his eldest living son, Saud, as crown prince.

Saud was a bit unreliable, though, so Abdulaziz also decreed that the next eldest, the obviously more competent Faisal, would be Saud’s crown prince. This both inaugurated

the unconventional Saudi practice of handing power from brother to brother rather than father to son and indicated that competence would be a factor in choosing the country’s rulers. In 1958, after five years of inept rule by Saud, the rest of the family demanded that most of his powers be handed over to Faisal. Several tense years followed until Saud abdicated in 1964.

In choosing his crown prince, Faisal (and his brothers; Henderson surmised that large group deliberations preceded all these decisions) skipped over the next oldest son of Abdulaziz, who was known for his hard drinking and bad temper, and appointed the one after, the eventempered Khalid. Khalid took over when Faisal was assassinated (by a nephew) in 1975, and passed over a couple of unimpressive brothers to choose the experienced technocrat Fahd as crown prince. After some fraught family negotiations, Khalid then named the next eldest, Abdullah, as Fahd’s deputy.

Which brings us to this week.

Abdullah ended up outlasting a long line of would-be successors.

Salman, who became crown prince

in 2012, was long seen as a promising potential ruler, but is now in ill health and possibly suffering from dementia. Last spring the Saudis skipped over several older sons of Abdulaziz to put Muqrin second in line. And now they’ve made the historic appointment of Prince Mohammed–although of course much could happen between now and his planned succession to the throne.

These moves illustrate what seem to be three main priorities at work in the House of Saud. The first is keeping the family united and in control of the country, the second is choosing a competent ruler and the third is favoring one’s closest relations over more-distant ones. There’s always potential for conflict among these three–managing it requires a constant balancing act. But while the Saudi system of governance can seem awfully medieval to those of us on the outside, families aren’t the worst mechanisms for managing conflict. Western observers have been predicting for decades that the next succession would be the one where Saud family unity starts to unravel. Could be. It hasn’t happened yet, though.

I

laziz Ibn Saud, the founder of the Kingdom of Saudi Arabia, the country has been run by his sons. He had a lot of them–44 in total, 35 of whom were still alive when he died, according to Simon Henderson’s history, “After King Fahd: Succession in Saudi Arabia,” from which pretty much all my knowledge of Saudi succession springs. Muqrin is the youngest.

After that it is, finally, on to the next generation. The really big news on this came today, when King Salman appointed his nephew, Mohammed bin Nayef, as second crown prince. This wasn’t just a move to the next generation; it’s a move that bypassed most of the next generation. Of the 37 living grandsons of Abdulaziz, Prince Mohammed, who is 55, ranks 27th in age (according to Wikipedia, which in this case appears to be the best available source).

This seems like a pretty dramatic choice for competence–Prince Mohammed led the successful campaign against al Qaeda forces inside the country in the 2000s, and has been Interior Minister since 2012–over seniority. Then again, it might also indicate a power grab by the descendants of Hassa Al Sudairi, a wife of

Unjustified rate hike

for commercial supply.

ERC’s October 2014 resolution requires electricity end-users to “share in the cost of the FITs in part through a uniform charge to be referred to as FIT-All and applied to all billed (kilowatt hours).”

Although relatively meager at P0.40/kWh, the rate hike is expected to reach P2.7 billion this year alone.

This will mean windfall profits for accredited RE developers for the next two decades—at the expense of hapless electricity consumers—because the ERC has empowered TransCo to collect the extra charge for 20 straight years and would be paid over that long period even to RIT-eligible companies that have yet to build their power plants. However, a prominent lawyer has come to the rescue of hapless consumers by filing a petition asking the Supreme Court to issue a Temporary Restraining Order (TRO) to stop ERC from implementing this rate hike.

Lawyer Remigio Michael Ancheta wants the SC to stop the ERC from allowing Transco to collect this additional P0.40/kWh from electricity consumers.

The SC would should grant this TRO and require the ERC and Transco to first conduct extensive public hearings and consultations on this FIT-All scheme before even considering this additional charge.

While giving incentives to RE developers is a step in the right direction, making households and business establishments pay for it—and in advance at that—is definitely not.

raising generations of Filipinos who will face health problems in the future for not receiving proper nutrition during their most important, formative years.

The country may be undergoing some major transformations, marked in part by an economy no longer on the downtrend. But amid such growth, we have the rich still getting indecently richer in common with the fabulously rich of other countries, while the great majority are impoverished by widespread unemployment and unfair taxation and social policies.

Michael Elliot may be right about the world in general, but not necessarily so about specific countries.

The breakthroughs and innovations the Gateses mention are truly promising, but these have barely scratched the surface here at home. We may be living in an age of miracles, but such miracles have yet to be seen in the Philippines.

N a recent Time magazine article, Michael Elliott, President and CEO of the global ONE campaign, wrote about how, contrary to popular belief, the world has in fact become a better place to live in—given that more are healthy and prosperous, compared to decades ago.

Elliott pointed out that while in 1990 over a third of the globe’s population were living in extreme poverty, by 2011 that number had gone down to 14.5 percent. Where 80 percent of the world’s infants now receive lifesaving vaccines, in the 1970s only 5 percent did so.

And with today’s innovations constituting what Elliott described as an “age of miracles,” many people are now faced with opportunities once unheard of.

It was clear that the government and the Church were pulling out all the stops with regard to the visit, and Department of the Interior and Local Government Secretary Mar Roxas undertook this task seriously, pacing the routes and venues of the planned events and activities himself. He personally made sure that no stone was left unturned in making the visit a howling success.

When push comes to shove, it’s evident that the Filipino people can unite in an orderly fashion, despite their very palpable enthusiasm and deep fervor for His Holiness Pope Francis.

A7

eradication of more diseases (like polio and Guinea worm); agricultural improvements that will allow Africa and other developing areas to feed themselves; mobile banking to open up financial opportunities to the global poor; and, better educational software revolutionizing learning.

Their rallying call is that these changes will come sooner if technological innovation intensifies and the pace at which they are translated to real human benefit quickens. They also emphasized the need for “global citizens” to collaborate towards sustaining the momentum for change.

In the Philippines, a recent Social Weather Station survey may have shown that while the annual hunger rate (18.3 percent) is at its lowest in seven years, 3.8 million Filipinos were still starving as of December 2014.

Worse, such hunger adversely affects our youngest children, given that nearly a third of them under five today have stunted growth while a fifth are underweight. We are still

Edgardo J. Angara

Running the Saudi family business

By Justin Fox

Tuesday, January 27, 2015

E-mail: angara.ed@gmail.com.

2nd Front Page BusinessMirror

A8 Tuesday, January 27, 2015

Metro Manila still queen of PHL cities— World Bank

ICC wants subway project to pass through Manila Golf

M

he P374.5-billion Mass Transit System Loop will pass below the Manila Golf Club in Makati City, a senior government official said.

By Cai U. Ordinario

etro Manila is still the undisputed queen of Philippine cities as it accounts for over 70 percent of the urban population of the country, according to the World Bank.

In the report titled “East Asia’s Changing Urban Landscape: Measuring a Decade of Spatial Growth,” the World Bank said Metro Manila also accounted for 56 percent of the urban land in the country.

The Manila urban area is home to 16.5 million people in 2010 followed by Cebu at 1.5 million. Three urban areas are in the 500,000-to-1 million population range, and another 16 are in the 100,000-to-500,000 range, as of 2010.

“The Manila urban area is the Philippines’s undisputed prime city, with no close competitors,” the World Bank said. “It is spatially seven times larger than the second-largest urban area, Angeles City, and 10 times more populous than the second most-populous urban area, Cebu.”

Based on the World Bank’s definition, Metropolitan Manila is composed of 85 municipalities and cities in seven provinces. It is governed separately by 17 local government units, making it an oft-cited case of metropolitan fragmentation.

With the absence of close competitors, the Philippines can only expect the population of Metro Manila to grow even more, even if it was already one of the densest urban areas in the region.

The population density of Metro Manila increased to almost 13,000 people per square kilometer in 2010, from 11,900 people per sq km in 2000.

With Metro Manila being one of the densest cities in East Asia, the World Bank believes the biggest challenge for the country is finding a good urban development model.

The report stated in cities like Vancouver, Canada and Paris, France had regional governmental authorities and other mechanisms that can help coordinate urban-service provision across municipal boundaries. “[The challenge is] to find a good model to govern such a large area. We cited some examples, Vancouver, Paris, and others but at the end of the day, the model has to be adapted to the local realities of the Philippines,” World Bank East Asia and the Pacific See “Metro Manila,” A2

T

By Lorenz S. Marasigan

Publ ic-Pr ivate Pa r t nership (PPP) Executive Director Cosette V. Canilao clarified, however, that the Department of Transportation and Communications (DOTC) and the Manila Golf Club are still to

come up with an agreement.

She said the contract approved by the National Economic and Development Authority (Neda) Investment Coordination Council (ICC) indicated that the subway project will pass through

the 26th Avenue in Bonifacio Global City.

“But it might change in the Neda Board. The DOTC is in talks with them, and they know the plans for the project. There’s continuous discussion with Manila Golf,” Canilao said.

She said technical advisors from her agency assured that the project will not have adverse effects on the ground above the subway.

“If it will be felt on the surface, our technical advisors assured that engineering solutions will be used for it not to be felt above,” the PPP Center chief said.

Manila Golf Club, she noted,

“is open” to the prospect.

“The dialogue is still continuing,” Canilao said.

The project, along with six others, is tabled for approval of the Neda Board next month.

Earlier Transportation Secretary Joseph Emilio A. Abaya said his office is considering two options in constructing the subway, either below the 32nd Avenue or the 26th Avenue in Bonifacio Global City.

The latter is a better option, Abaya has said, as it passes through McKinley and Ayala.

However, the mass-transit system will have to pass through the See “Subway,” A2

CHILD JESUS A Catholic devotee holds an image of the Child Jesus, also known as Santo Niño as she waits for the procession of different images of the Child Jesus to celebrate its feast day on Sunday night, a week after Pope Francis made his apostolic visit to Manila. Thousands of devotees line up an avenue with their images of the Child Jesus for the annual procession. AP/Bullit Marquez

Low-inflation regime to linger Continued from A1

data gathering helps the policy-making monetary board to craft appropriate policy responses to the ever-changing domestic economic landscape.

“Primary results of the BSP’s survey of private sector economists for December 2014 yielded lower mean inflation forecasts for 2015 to 2016 relative to the results in September 2014,” the BSP said in its yearend inflation report.

In particular, the mean inflation forecast of 27 economists the central bank polled declined to 3.6 percent for 2015 from an earlier forecast of 4 percent.

Similarly, private economists said inflation is poised to hit 3.7 percent in 2016, down from an earlier forecast of 3.9 percent.

“The analysts attributed their lower inflation expectations mainly to the softening of international oil prices,” the central bank said.

The economists’ forecasts for both years are well within the government’s scaled

back target for the next two years from 2 percent to 4 percent.

Likewise, the BSP said based on the probability distribution of the forecasts provided by the respondents, there was a 58.1 percent change that the average inflation for 2015 will settle within the 3-percent to 4-percent range.

Meanwhile, there remains a 26.9-percent probability that average inflation for 2015 will exceed the target range and fall within the 4-percent to 5-percent range this year.

In other words, the likelihood for inflation to go out of hand is sharply diminished.

The BSP governor and other BSP senior officials earlier said the sharp decline in oil prices caused inflation to decelerate in the final months of 2014.

Officials also earlier said should the decline in oil prices persist, projected inflation could move further down the lower band of the target this year. The BSP, however, warned of the possible negative effects once there is a steep reversal of the decline in oil prices in the country.

Oil demand. . . Continued from A1 The US shale revolution showed that forecasts of dwindling world oil supply were premature. It also gave credence to the old adage, attributed to a Saudi oil minister more than 30 years ago, that the Stone Age didn’t end because of the lack of stone. With costs falling for clean energy and international attention focused on slowing climate change, the Saudis are more worried that the world is inching closer to peak demand.

Among industrialized countries, that peak was reached 10 years ago, according to the Paris-based International Energy Agency (IEA), and fast-developing countries, such as India and China won’t become as carbon-intensive, Al Sabban said.

Oil supplied 31 percent of the world’s energy in 2012, compared with 46 percent in 1973, the IEA said. Even as oil prices dropped 48 percent Continued on A2

www.businessmirror.com.ph

Recent clash makes BBL pressing– Malacañang

By Rene Acosta & Butch Fernandez

T

he death toll from Sunday’s fighting between the Philippine National Police (PNP) Special Action Force (SAF) and Muslim rebels has already reached 55, government security officials said on Monday.

A police report from the Autonomous Region in Muslim Mindanao (Armm) said at least 49 SAF members were killed following the clash between policemen and members of the Moro Islamic Liberation Front (MILF) and the Bangsamoro Islamic Freedom Fighters, the breakaway faction of the Moro National Liberation Front (MNLF).

The bodies of those killed were already taken to the headquarters of the Philippine Army’s 6th Infantry Division. Government security officials said the casualties could still increase as evacuation is ongoing.

“As of now there are no skirmishes happening in the ground and our effort to extricate all the casualties is ongoing and we have also facilitated the entry of the international monitoring team so that the parties involved in the recent clash will be separated from each other,” said Armed Forces of the Philippines (AFP) Public Affairs Office chief Lt. Col. Harold Cabunoc.

The dead and wounded policemen were airlifted by American troops and aircraft. Two of the policemen killed reportedly held the rank of senior inspector.

Six members of the MILF were also reportedly killed, including Abdul bin Hir alis Marwan, a Malaysian bomb expert and a leader of the Asean terror group Jemaah Islamiyah (JI), who was the subject of the police operations.

Marwan is believed to have been killed by the military in Sulu in February 2012. The US government had offered a reward of $5 million for his head. Policemen were serving the warrant of arrest for Marven and for JI-trained bomb expert, Bassit Usman, at Barangay Tukalanipao in Mamasapano, Maguindanao, on Sunday morning when they clashed with members of the MILF, who were later aided by the BIFF. A source said the policemen were already pulling out from the area when they were mowed down by Muslim rebels. The two Moro groups also ambushed the reinforcements for the beleaguered SAF contingent.

Some police officials could not hide their disappointment with the military for not assisting the cornered SAF pesonnel and for “allowing policemen, their own to be massacred by the MILF.” MILF officials blamed the policemen for not coordinating with the group prior to serving the arrest warrant to Marwan. The town of Mamasapano is considered a lair of the MILF which signed a peace agreement with the government in March 2014.

Interior Secretary Manuel Roxas II ordered all police stations and camps around the country to hoist the national flag at half-mast. Roxas and PNP Officer in Charge Deputy Director General Leonardo Espina led policemen at the national headquarters at Camp Crame in saluting the dead policemen on Monday before they flew to Maguindanao to personally check on developments in the area.

Government security officials could not provide more details about the clash. Espina, however, said that the SAF personnel were running after a “high-value” terrorist who is behind the bombings in central Mindanao.

Miriam Coronel-Ferrer, head of the government’s peace panel, admitted that despite the immediate declaration of a cease-fire following the encounter between the PNP and the MILF, other armed groups are still engaged in “intermittent fighting” with government forces deployed in Mindanao.

“We laud the quick action of our mechanisms and their courage in immediately going to the conflict site. As soon as our cease-fire teams learned of the hostilities, they immediately effected a cease-fire,” Coronel-Ferrer said. “We regret, however, that due to the involvement of other armed groups, some intermittent fighting continued.”

She confirmed initial reports that members of the PNP-SAF were conducting law-enforcement operations in the area to serve a warrant against Marwan.

Communications Secretar y Herminio B. Coloma Jr. said latest reports reaching Malacañang indicate that “there is a high likelihood that Marwan has been neutralized.” “We are deeply saddened by the loss of lives in the tragic encounter in Mamasapano, Maguindanao yesterday, January 25,” Colonel-Ferrer said.

See “Clash,” A2