BusinessMirror January 29, 2015

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The purpose of holy images

compendium of the catechism of the catholic church and louie m. lacson Word&Life Publications • teacherlouie1965@yahoo.com

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

Life

‘the partnership’ looks new at brecht’s creative circle »D4

BusinessMirror

Thursday, January 29, 2015

By Cai U. Ordinario

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The lure of Sumilon

By Benjamin L. Layug

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agaIn got an invitation from Pete Dacuycuy to join a three-day media familiarization tour of another Bluewater resort (the first one we visited was the Panglao Bluewater Resort in Bohol), this time to the 27-room Bluewater Sumilon Island Resort (www.bluewatersumilon.com.ph) in Cebu. Joining me were two bloggers and five writers from the print media. We all arrived at Sibulan airport by 3:30 pm via a PaL Express flight and, upon exiting the terminal, we were whisked via two air-conditioned vans to Sibulan Port. Here, a big 50-pax outrigger boat was waiting to bring us to the island, foregoing the tedious land-sea transfer and, instead, directly getting to the island via a one-hour boat trip. We arrived at the island by 4:50 pm. Dinner was prepared, al fresco, along the island’s signature shifting sandbar.

The spacious, tastefully and comfortably decorated air-conditioned deluxe rooms we stayed in had a high ceiling and impressive interiors with two very comfortable queen-size beds with many fluffy pillows, a big private bathroom with hot/cold shower and a skylighted ceiling, cable TV with DVD player, a work

Continued on D2

life

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Singapore surprise spurs dollar’s gain, ringgit’s fall

Asean www.businessmirror.com.ph

The digital wave needs to be taken seriously Asean-EU Perspective

HENRY J. SCHUMACHER

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APID developments in technology are changing the world and having a dramatic impact on the way we live, work, communicate and interact and do business. The government and the private sector should, therefore, be setting out an ambitious journey toward achieving a digital economy, highlighting the role of information and communications technology as a key enabler in social, economic and environmentally sustainable growth and development.

The digital economy should be built on five pillars: n Hard infrastructure, n Soft infrastructure, n Service infrastructure, n Digital economy promotion, and n Digital society and knowledge resources.

It should focus on mobile technologies, cloud, big data analytics and social networks. Given the Philippines’s success in business-process management (BPM) and knowledge-process management (KPM), it is essential that we focus on the infrastructure needs mentioned above but also develop the human resource to play a major role in big data analysis.

Part of big data analysis is the development of key strategies for digital marketing, as outlined by Mindshare: n Connect the dots between online and offline channels and build fluid customer experience with no breaches. n Put mobile at the center of your communications; mobile is building the culture of m-commerce anywhere. n Search for a need beyond “always on,” adding category and lifestyle to the search to connect with fans and not just buyers. n Constantly listen to the social buzz, and respond to negative comments. n Be part of the conversation, generate content that builds “earned media” and tells the brand story. n Understand your digital micro-segmentation; unlike TV, digital targeting can be as precise as a single person. n Amplify the voice of your advocates, these are your most influential and powerful assets—so use them. n Always be adaptable, measure everything and act in real time.

Looking at the experiences of other countries that have embraced the “digital economy” as a core national strategy to drive their economic and social development, progress can be described in three steps: n Digital commerce, n Digital transformation, and n Digital consumption.

Most countries begin with the digital commerce stage, meaning that digital technologies are widely deployed for selling and buying goods. Digital commerce is a broader term of e-commerce and includes mobile commerce, business-to-business, and government’s electronics transactions. Digital transformation occurs when organizations have embraced digital technologies for transforming their businesses, not just as a tool for trading.

In Japan, digital technologies are now embedded in production lines and even in agricultural farms. Digital consumption happens when intangible digital goods become daily staple of the consumer.

The “digital divide” or an inequality among people will be one of the biggest challenges faced by the Philippine policy-makers in accomplishing the digital economy policy. With the large majority of the population living in the provinces and going digital or not is of little concern to them, the government must aim to bridge this gap, which will enable the digital market to grow further through building infrastructure and digital literacy, including providing access to education, mobile finance/insurance and health care. I am aware that the Information and Communications Technology Office of the Department of Science and Technology is moving forward to connect ten-thousands of barangays but the telcos that had it so good for a long time and are resting on their past profits should be challenged to do their part and make the Philippines better and connected faster.

Important is that the “digital wave” offers the “road to smarter small and medium enterprises” (SMEs). While SMEs remain fundamental to economic growth, many entrepreneurs suffer from a lack of knowledge of how to select affordable technologies that can be successfully implemented in their businesses. The government should consider creating a digital SME/ SME platform, as a platform for entrepreneurs to exchange knowledge and support their businesses. Microsoft and Cisco have the technologies and programs to allow this to happen.

Lastly, the digital wave needs data protection. In this context it is just not acceptable that the Data Privacy Act remains unimplemented. That’s bad for business, that’s bad for investors, that’s bad for companies around the world that are considering the Philippines as a BPM/KPM location.

While the DICT is still not there, I suggest that the DOST take action and move ahead in creating the Data Privacy Commission to get the IRR written.

Indonesia cocoa output, demand continue rise

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HOCOL ATE demand in Asia will probably rise as much as 20 percent this year, spurred by confectionery and drinks consumption among young people, an industry group said.

Demand will climb as economies expand in China, India and Indonesia, boosting incomes of the growing middle class, Piter Jasman, chairman of the Indonesia Cocoa Industry Association, said in an e-mail. While

surging bean prices cut processing, factories in Indonesia are increasing market share, he said.

Futures touched a three-year high in September amid concern the deadly Ebola disease would disrupt shipments in Africa. Higher costs and slowing growth in Europe and China crimped processing from the US to Asia in the fourth quarter, pushing down prices. The Asia-Pacific See “Indonesia,” B3-2

BusinessMirror Editor: Max V. de Leon • Thursday, January 29, 2015 B3-1

Singapore surprise spurs dollar’s gain, ringgit’s fall

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HE dollar rose against most of its major peers after Singapore’s central bank unexpectedly eased monetary policy before a Federal Reserve meeting concluded on Wednesday.

The Australian dollar rose against all its major counterparts after a report showed the nation’s underlying inflation accelerated. Singapore’s dollar slid to the lowest since 2010 after the Monetary Authority of Singapore (MAS) reduced the slope of its currency band. Malaysia’s ringgit fell before the country’s policymakers announce their decision late Wednesday.

“The divergence in monetary policy direction is lending support to the dollar, which is leading other currencies,” said Yuji Saito, director of foreign exchange at Credit Agricole SA in Tokyo.

The US dollar rose 0.1 percent to $1.1367 per euro at 6:56 a.m. in London, after falling 1.3 percent on Tuesday, the biggest drop since October 15. It reached the highest since September 2003 on January

26 at $1.1098. The yen declined 0.1 percent to 118.01 per dollar and was little changed at 134.16 per euro.

The Aussie jumped 0.9 percent to 80.08 US cents, heading for its biggest advance since January 9. It touched 78.55 cents on January 26, the least since July 2009. Singapore’s currency was at S$1.3517 per dollar after falling as low as to S$1.3569, heading for the lowest close since August 2010.

MAS surprise

THE Singapore dollar weakened against all of the 16 major currencies after the MAS, which uses the currency as its main policy tool, said it will reduce the slope of the policy band for the island’s dollar in an unscheduled policy statement on Wednesday. It also cut the inflation forecast for 2015, predicting prices

may fall as much as 0.5 percent.

“The fact that even the MAS has to ease its hawkish stance signifies the effects of cheaper oil as well as how bad the domestic economy is,” Masashi Murata, a currency strategist at Brown Brothers Harriman & Co. in Tokyo, said in phone interview.

The Aussie rose for a third day as the trimmed-mean gauge of Australia’s consumer-price index—one of the Reserve Bank of Australia’s (RBA) preferred measures—rose 0.7 percent in the fourth quarter from the previous three-month period, beating the 0.5-percent median estimate of economists surveyed by Bloomberg News. The RBA targets an inflation rate between 2 and 3 percent.

ficult to expect the Aussie to keep supported especially against the US dollar as the underlying strength of the US dollar remains intact.”

The Bloomberg Dollar Spot Index, a gauge of the currency’s performance against 10 major peers, rose 0.1 percent. It closed at 1,161.42 in New York on January 26, the highest in data back to 2004.

The Fed is forecast to leave interest rates unchanged at the two-day policy meeting that ends today, a Bloomberg survey of economists shows. The chance of a interest-rate increase by the October meeting was 51 percent, futures data showed. The odds were 72 percent at the end of last year.

RBA outlook

FALLING oil prices could prompt the US central bank to also lower its inflation outlook, said Kumiko Ishikawa, analyst at Gaitame.com Research Institute Ltd. “If there are any comments regarding the risk of further decline in oil prices by the Fed, markets may take it as indicating a delayed timing for a rate increase, pressuring the dollar,” she said.

The ringgit depreciated 0.6 percent to 3.6195 a dollar in Kuala

TRADERS saw a 17 percent chance the central bank will cut rates at this year’s first policy meeting on Febuary 3, down from 44 percent odds on Tuesday, according to overnight interest rate swaps.

“There was talk of a rate cut next week, so the solid CPI numbers have significantly reduced that possibility, supporting the Australian dollar,” said Koji Fukaya, chief executive officer and currency strategist at FPG Securities Co. in Tokyo. “But it is dif-

‘Delayed timing’

See “Singapore,” B3-2

Snails slither into spa scene in Chiang Mai, Thailand

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HE last time I encountered escargots they were served up by a French waiter, sizzling in garlic and herb butter. Now, one is slithering up the bridge of my nose while five others are being stuck onto other parts of my face by a Thai beautician, all secreting snail slime to hopefully smooth out some wrinkles and otherwise give me a younger-than-my-age look.

That this latest addition to the global beauty and wellness craze— snail facials—should surface in the hills of northern Thailand is only natural. This Southeast Asian country ranks among the world’s top spa destinations, with massage treatments of every description offered around just about every corner. Other members of the animal kingdom are also enlisted, including fish at some 4,000 pedicure spas.

Merely another marketing ploy or an effective way to plump up skin in need of repair or rejuvenation? Expert opinions differ. The two young Thai women reclining next to me at Chiang Mai’s Snail Spa sang the praises of helix aspera muller glycoconjugates, snail mucus for short.

And when I returned home, my wife described my face as “different,” but declined to go into detail.

Appropriately, given the French passion for these gastropods, the spa was started last year by two Frenchmen who had imported 100 of them from home. The colony now boasts more than 30,000, munching on chemically free carrots, cabbage and aloe on a certified organic farm.

“We take care of the snails as if they were our family, our babies.

You can see they look very good,” says Luc Champeyroux, one of the partners, gently applying one to his forearm. He does confess to eating escargots (“but not mine”), plans to breed some for the table and is currently experimenting to produce “the perfect snail caviar.”

A chosen few get plucked from the farm for duty at the spa, where I opted for the 45-minute Snail Spa Celebrity Course. For $30, it’s a bargain compared to the $200 customers

IN this photo taken on Monday, a customer receives beauty treatment with snails at a snail farm in Chiang Mai province, northern of Thailand. This latest addition to the global beauty and wellness craze—snail facials— should surface in the hills of the area is only natural. This Southeast Asian country ranks among the world’s top spa destinations, with massage treatments of every description offered around just about every corner. AP

must shell out at Tokyo’s Ci:z.Labo, a beauty salon where snail massage made its debut in 2013. Spas have also opened in China and London, and the French duo are expanding to Bangkok next month.

Given its novelty, Chiang Mai public-health inspectors last month descended on the spa to determine whether the treatment was safe and if imported snails—officially classified as “alien creatures”—might prove harmful to local species. Results of the investigation have not yet been released.

While the facials are new, concoctions made from snail mucus are said to date back to ancient Greece, when the great physician Hippocrates reportedly crushed snails and sour milk as a cure for skin inflammations. In recent times, the French have turned this essence of escargot into assorted creams and lotions.

The fluid, exuded by snails when under stress, is known to contain beneficial nutrients and antioxidants, but Bangkok-based Dr. Dissapong Panithaporn and other dermatologists say that there has been

no significant scientific research on how these actually work when applied to the skin.

Champeyroux, a manager in France’s nuclear power sector before falling in love with Chiang Mai some years ago, says his all-natural line of snail products, Coquille, acts against burns, acne, stretch marks, scars and aging. The two women next to me concurred.

Taksaphan na Pohn, a 22-yearold recent university graduate, said she had earlier tried laser and other techno-treatments but after some research decided that “natural therapy” was better. She said snails helped clear her acne when she was stressed during her studies.

“My face is firmer and softer,” she said. “But you don’t get immediate results. It shows gradually.”

Like for many, the prospect of having my face crawling with slimy hermaphrodites (snails are unisex) did not immediately appeal.

Although from my own research I decided it might be preferable to another natural therapy—“uguisu no fun,” or nightingale feces facial, which has been around in Japan for centuries.

So after being slathered with one of Champeyroux’s creams, the beautician plopped down the first of half a dozen mollusks on my face.

A balmy coolness I sensed as they proceeded to slide over my cheeks, furrow through my eyebrows and tickle my lips, taking particular liking to my nose since snails are fond of climbing.

Opening my eyes, I got a macro lens view of one critter perched on my nose tip. Its twin, antennae-like feelers were weaving about, possibly seeking an escape route with its tiny eyes. The snail’s 14,000 microscopic teeth produced a slight, not unpleasant, scratching when it slid toward my nostrils. So if truth be told, I sort of missed my harmless, sensuous sextet when they were dislodged, clinging to my skin with a gentle suction.

Maybe I won’t eat another escargot again. AP

Asean

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SERENA IN, VENUS OUT Sports BusinessMirror

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| Thursday, January 29, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

younG Players turninG to eX-Pros

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serena Williams celebrates after beating dominika Cibulkova of slovakia in their quarterfinal match, but her sister Venus is not as fortunate as she bowed to compatriot madison Keys. AP

19-year-old Keys foils Williams sisters semis duel

SERENA IN, VENUS OUT There had been some hope that the semis might feature an all-Williams matchup at a major for the first time in more than five years.

The Williams sisters last met in a Grand Slam match at Wimbledon in 2009, when Serena won the final.

By Dennis Passa The Associated Press

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ELBOURNE, Australia—Madison Keys defeated one Williams sister on Wednesday at the Australian Open. On Thursday the 19-yearold American will try to make it two, and this sibling might be a little tougher, even with a cold.

Keys overcame a left thigh injury to beat No. 18-ranked Venus Williams, 6-3, 4-6, 6-4, and advance to the last four against top-ranked and 18-time major winner Serena Williams, who had little trouble beating last year’s finalist, Dominika Cibulkova, 6-2, 6-2.

In men’s play, defending champion Stan Wawrinka beat Kei Nishikori 6-3, 6-4, 7-6 (6) to avenge a five-set loss to the Japanese star in the quarterfinals of the US Open last year. Wawrinka, who let slip a 6-1 lead in the third-set tiebreaker and eventually needed six match points to close it out, will play the winner of the Novak DjokovicMilos Raonic night match on Rod Laver Arena.

Serena made her win look easy despite suffering from a bad cold the past few days. She spoke with a hoarse voice in her post-match interview on court.

“I have to keep my answers short because I keep coughing,” Serena said.

“I’ve been sick the past few days, and it’s just getting worse and worse, but hopefully it will get better,” Serena added later. “I heard there’s a virus going around with a lot of the players, and I think I caught it.”

There had been some hope that the semis might feature an all-Williams matchup at a major for the first time in more than five years. The Williams sisters last met in a Grand Slam match at Wimbledon in 2009, when Serena won the final.

The semifinalists from the other half of the women’s draw have already been determined—No. 2 Maria Sharapova will play No. 10-seeded Ekaterina Makarova, also on Thursday.

Serena’s win doesn’t bode well for the other three women left—all five past times Serena has advanced to the semifinals at Melbourne Park, she’s won the tournament.

Keys received treatment on her leg after

dropping serve in the second set to give Venus a 4-1 lead. After the medical time-out, she broke Venus’s serve twice to level the set at 4-all, but Venus then captured the next two games to send it to a decider.

Keys was also behind 3-1 in the final set before breaking Venus’s serve three times in a row to close out the match.

The loss ended an encouraging 10 days for Venus at Melbourne Park. She hadn’t advanced to the quarterfinals of a Grand Slam since the US Open in 2010 and had struggled to recapture her earlier form after being diagnosed in 2011 with Sjogren’s syndrome, an auto-immune disease that causes fatigue and joint pain.

But Venus is 9-1 to start the new year after capturing her season-opening tournament in Auckland, New Zealand, before the Australian Open.

“It already feels like a long season already, so many matches in a row,” she said. “But it’s a great start. Hopefully I’ll be able to keep this level up.”

Regardless of the quality of the match, in which the two players combined for 83 unforced errors, Keys was pleased to be through to the semis.

“It’s amazing, you just have to embrace the moment,” said Keys, who is now coached by threetime major winner Lindsay Davenport. “And I get to enjoy another moment next round.”

She later identified the injury as a left adductor, and was optimistic it wouldn’t affect her in her match against Serena.

“I think it’s one of those things where all of us have dealt with injuries before,” she said. “I’m probably going to have tape on it, but I’m just going to do my absolute best and enjoy the moment.”

Wawrinka looked to be cruising in his tiebreaker with Nishikori, but the Japanese player saved match point after match point with a combination of great shots and errors by Wawrinka.

Nishikori made the biggest error at the wrong time, however, attempting a drop shot from the back of the court that bundled into the net. That set up another match point for Wawrinka, which he converted with an ace, his 20th of the match.

“Phew, I’m still nervous,” Wawrinka said in his post-match interview on court. “It’s never easy with his returning. You have to go for it.”

Andy Murray and Tomas Berdych will play in the other men’s semifinal on Thursday.

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Jobs aplenty for Pinoys this year BSP: LOWEST H INFLATION IN DECADES SEEN

the lure of sumilon ear lord, Your image, christ, is the liturgical icon par excellence. other images, representations of our lady and of the saints, signify christ who is glorified in them. they proclaim the same gospel message that sacred scripture communicates by the word and they help to awaken and nourish the faith of believers. the purpose of holy images can be in comparison to monuments of our heroes and pictures of people we love, as reminders and treasures we must respect. amen.

TfridayNovember

Thursday, January18, 29,2014 2015Vol.Vol.1010No.No.40112

THINK TANK SEES UP TO 7.5% GROWTH FOR 2015 ON BETTER LABOR CONDITIONS, HIGHER SPENDING

INSIDE

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ELBOURNE, Australia—Goran Ivanisevic won one Wimbledon title in his colorful tennis career, but the big-serving Croatian believes he might have won even more if he’d had an ex-player as his coach, like many of the top competitors do today.

“Bad luck I did not have someone like me to coach me when I was [playing],” he said on Tuesday at the Australian Open. “I should have had this Goran to coach that Goran. Probably I would win at least five, six more Grand Slams.”

Ivanisevic, 43, is now part of the latest trend in tennis—the exclusive but steadily growing club of former pro players who have turned to coaching in their post-retirement years.

The big-name stars like Novak Djokovic, Roger Federer and Andy Murray may have glamorized the ex-player hires in recent years, taking on Boris Becker, Stefan Edberg and Ivan Lendl/Amelie Mauresmo, respectively. But the players just behind them in the rankings have also jumped on the bandwagon to try to close the gap and contend for slams.

Stan Wawrinka and Marin Cilic both won their first majors last year under the tutelage of former players—Wawrinka is coached by Swede Magnus Norman and Cilic by Ivanisevic. And Kei Nishikori has former French Open champion Michael Chang in his corner, while Milos Raonic is coached by Ivan Ljubicic, once ranked No. 3 in the world.

Chang believes the ex-player coaches have caught on among these players, in part, because they can bring valuable perspective from their own careers that could be the final piece needed for a breakthrough at the majors.

The fifth-seeded Nishikori hired Chang at the end of 2013 and proceeded to make his first Grand Slam final at the US Open, where he was beaten by Cilic. He played defending champion Wawrinka on Wednesday for a spot in the semifinals.

“The mentality and attitude ends up playing a very important role,” the 42-year-old Chang said.

“We all know everybody can come out here and play great tennis, they all hit great forehands, great backhands and great serves, but the mind-set is another element that the public and press don’t see. Something that I try to help him out and give him good advice wherever I can.”

Ivanisevic, who reached three Wimbledon finals before finally winning in 2001, sees how valuable this insight can be when looking back at his own career.

“I say [to Cilic], ‘Listen, you’re going to learn only by learning not to [do] the same mistakes that I did,’” he said. “It would take 10 days to tell you how many mistakes I made.”

Ivanisevic has known Cilic since 2002 when he invited the then-14year-old rising junior to practice with him. Cilic, who pulled out of this year’s Australian Open due to a shoulder injury, hired Ivanisevic to coach him in 2013.

“It’s nice to have somebody in the corner who was through all these things,” Ivanisevic said. “Unfortunately, I could not do things with myself that I can do with him. But I succeeded with him, also made me proud.”

Ljubicic, too, was drawn to coaching by the opportunity to help one of the game’s rising stars take the next step. Raonic also plays for a spot in the semifinals on Wednesday against Djokovic.

A former French Open semifinalist, Ljubicic, 35, said there’s an expectation that an ex-player coach can have an immediate impact on a player’s results, but this isn’t necessarily the case.

His coaching relationship with Raonic, which began just a year after Ljubicic retired in 2012, got off to a rocky start.

“We had difficult first few weeks because [Raonic] was struggling, out of confidence and out of shape, but we decided to try a little bit longer and the results started to come,” Ljubicic said.

Ljubicic said he wasn’t going to return to the grind of the tennis tour for just any player, either. He wanted to coach a contender. “[Milos is] one of the most determined and motivated people that I have ever met, and that meets my needs and my type of people that I want to work with,” he said.

Chang, too, didn’t take the decision to return to the tour lightly. He said it wouldn’t have been possible without the help of his wife, who travels with him and takes care of their two children.

“It’s fun to be able to work with Kei and to see him excel and improve,” Chang said. “Spending time with my family is important, too.” AP

stan-ner a face-painted supporter of swiss

tennis player stan Wawrinka watches his quarterfinal match against Kei nishikori of Japan at the australian open tennis championship. Wawrinka won to reach the semifinals of the tournament. AP

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igher funding support for priority sectors and last year’s economic gains that led to the betterthan-expected job generation in 2014 are likely to increase employment opportunities this year, according to a local think tank.

This, coupled with the low oil prices, will kick up consumption further and boost the country’s gross domestic product (GDP) growth to between 7 percent and 7.5 percent this year, the First Metro Investment Corp.-University of Asia and the Pacific (FMIC-UA&P) Capital Markets Research said in its latest Market Call.

“W hile there remain challenges that the Philippines has yet to address [i.e., access to education, health care and human-resource development], the 2014 employment data offer encouraging labor conditions for 2015,” the FMIC-UA&P Capital Markets Research said.

The Department of Labor and Employment (DOLE) projected a total demand of 4.5 million workers until 2016. “The proposed budget expansion for the identified priority sectors and the proposed development of a number of business zones should bode well for the country’s labor force,” it added.

The think tank cited data from the Philippine Statistics Authority (PSA), which showed that the economy was able to breach its 1million target for three consecutive quarters in 2014.

Continued on A8

PESO exchange rates n US 44.1170

IN JANUARY

TETANGCO: “The BSP’s assessment shows continued easing of price pressures. The January inflation is seen to fall within the range of 1.8 percent to 2.7 percent.”

playing field, especially for micro, small and medium firms that are at a disadvantage in the marketplace in reference to competing with the big firms. There is a need to provide equal opportunities to all to promote entrepreneurial spirit, encourage private investments and facilitate technology transfer,” Domingo said in a statement.

“With the onset of Asean integration in the next few months, the need to put in place such mechanism is more compelling,” Domingo added.

Continued on A2

See “BSP,” A8

THE ‘INDEPENDENCE’ The liquefied natural gas (LNG) ship Independence is transferred from the dry dock in Ulsan port, South Korea, in this handout photo taken on June 1, 2014. Oil’s slump is set to extend the biggest drop in LNG costs in five years, spurring demand in emerging Asian economies. Related story on A8. Bloomberg

Competition law badly needed as Asean integration nears–DTI

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rade Secretary Gregory L. Domingo asked the House of Representatives to fasttrack the passage of its version of the competition law, which is seen as a vital component of the country’s preparation for the Asean economic integration in end-2015.

The House counterpart of the bill is now on second reading, while the Senate version was already approved on third reading last year.

“A competition law will level the

DOMINGO: “A competition law will level the playing field, especially for micro, small and medium firms that are at a disadvantage in the marketplace in reference to competing with the big firms.”

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nflation, or the rate of change in prices, could fall to its lowest yet in January when latest modeling indicate it could drop as low as 1.8 percent, based on the most optimistic forecast bared on Wednesday

by Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. In a text message, Tetangco said the falling price of oil in the world market should help move inflation sharply lower in January from rates posted last December.

“The BSP’s assessment shows continued easing of price pressures.

The January inflation is seen to fall within the range of 1.8 percent to 2.7 percent,” Tetangco said.

“Latest runs show domestic inflation over the policy horizon will be well within the target range,” he added.

Should inflation slow even more in January as forecast, this will be the slowest inflation for the country to date, based on BSP data dating back as early as 1998.

At this rate, inflation should fall at the low end of the target range of 2 percent to 4 percent for the month.

See “Oil,” A2

By Catherine N. Pillas

By Bianca Cuaresma

n japan 0.3744 n UK 67.0490 n HK 5.6911 n CHINA 7.0661 n singapore 32.9650 n australia 34.9940 n EU 50.1963 n SAUDI arabia 11.7410 Source: BSP (28 January 2015)

News BusinessMirror

Thursday, January 29, 2015

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news@businessmirror.com.ph

Oil. . .

Competition law badly needed as Asean integration nears–DTI

Group, one of the biggest independent traders of the fuel.

Brent, a global benchmark, traded at $48.97 a barrel, the equivalent of $8.41 a million Btu, on Wednesday compared with a high of $115.71 last June amid a global glut.

India’s domestic energy prices are regulated, which limits LNG imports at higher prices. About 42 percent of its purchases are spot and short-term deals, according to Petronet LNG Ltd., which operates two of the country’s four terminals. Gas accounted for 9 percent of India’s electricity mix last year, while coal was 60 percent, according to the nation’s power ministry.

Regional integration will open up the Philippine market to the nine other Asean member-states and the region’s 600 million consumers.

The DTI chief said a competition law in place will serve to protect the local firms.

“We hope that the host of 14 congressmen authoring the bill from various political affiliations, especially the Speaker, himself, and a former President, will highlight the importance of the bill at the House of Representatives,”

Continued from A8

Trade Undersecretary and Head for Asean SME Trade Facilitation Prudencio Reyes added.

The proposed measures in both chambers of Congress will create an independent commission tasked to implement the competition law.

The said measures will also recognize the role of the Department of Justice- Office for Competition (DOJ-OFC), as it will continue to investigate and prosecute all criminal offenses arising under this act and other competition-related laws.

“Enactment by Congress of such

Continued from A1

measure will ensure of a strong and more permanent government office, the present office is only created by an executive order,” Reyes said, adding that an independent enforcement body to regulate and rule on cases is preferable as opposed to previous proposal of lodging authority under the DOJ. Senate Bill 2882 entitled “An Act Promoting Fair Competition to Protect Consumer Welfare, Advance Domestic and International Trade and Sustained Economic Development by, among others, Regulating Monopolies, Anti-

Moody’s: Asia resilient to global headwinds

Competing coal

Gas on a delivered basis would probably need to be less than $5 or $6 longer term to compete with coal in India, David Thomas, Vitol’s head of LNG trading, said last November 24 in an interview. Pipeline constraints also limit imports, he said.

LNG prices will average $8.70 a million Btu and $9.10 this year in India and Japan, respectively, Energy Aspects said on Tuesday in a report.

While lower LNG prices make the fuel more affordable for China and India, it’s still more expensive than Chinese coal, Laszlo Varro, head of gas, coal and power at the International Energy Agency, said on January 8 in Beijing.

“If oil prices remain low, say below $75, into the future, this is a huge change for all Asian LNG importers in terms of savings,” Leigh Bolton, managing director of Holmwood Consulting Ltd. in Surbiton, south of London, said by e-mail on January 8. “India is probably the best example, as they are critically price sensitive against both domestic gas and also other fuels, such as naphtha.” Bloomberg News

By Bianca Cuaresma

prospects and forecast capital shifts from Asia Pacific to other parts of the world.

The credit watcher, saying growth issues in the euro area could undermine investor confidence and shrink demand for Asian exports, also noted the lackluster growth in China and Japan. Europe accounts for around 10 percent of the region’s exports.

“But Asia is supported by healthy external vulnerability metrics and the policy space to support growth through accommodative domestic monetary and fiscal policies,” Moody’s said. “While Moody’s expects capital inflows to Asia Pacific to moderate in 2015, offshore borrowing costs will remain below historical norms, reflecting Asia’s

S

o-called challenges to the global growth outlook seen this year should only serve to highlight the Asia-Pacific region’s macroeconomic underpinnings and strength, the global credit watcher Moody’s Investor Service said on Tuesday. In a statement released on Tuesday, Moody’s said Asia will be resilient to global macroeconomic challenges in 2015, with less vulnerability to external shocks than other emerging economies.

The global challenges, according to Moody’s, include the US Federal Reserve taking the first steps to normalize its monetary policy crafting, China’s increasingly weaker growth

sound fundamentals,” it added.

Moody’s also said the status of Asia Pacific economies as net oil importers should prove “credit positive” for the region as a whole.

On the domestic front, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said global risks continue to “cloud the future” for the Philippine economy.

“The continuing uncertainty in the global financial markets is a concern as geopolitical tensions go on and economic performance among major economies remains divergent,” Tetangco said.

“While all of this was happening, the balance of supply and demand in the oil market has triggered a precipitous decline in oil price,” he added.

3-DAY EXTENDED FORECAST JANUARY 29, 2015 | THURSDAY

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Competitive Agreements, Abuse of Dominant Position and AntiCompetitive Mergers, Establishing the Fair Competition Commission and Appropriating Funds Therefor, and Other Purposes,” is authored

by Senators Sergio Osmeña III, Teofisto Guingona III, Miriam Defensor-Santiago, JV Ejercito Estrada, Antonio Trillanes IV and Paolo Benigno Aquino IV. House Bill 5286 entitled “Promoting a National Competition Policy for the Philippines, Prohibiting Anti-Competitive Practices in Restraint of Trade, Abuse of

Aquino. . . Continued from A8

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BAGUIO CITY 12 – 23°C

SBMA/ CLARK

SBMA/CLARK 21 – 29°C METRO MANILA 20 – 31°C

FEB 1 SUNDAY

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TACLOBAN

22 – 29°C

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CAGAYAN DE ORO

TAGAYTAY CITY 18 – 26°C

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19 – 29°C

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METRO DAVAO

12 – 22°C

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LEGAZPI ILOILO/ BACOLOD 24 – 30°C METRO CEBU 24 – 30°C

TACLOBAN CITY 23 – 29°C

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ZAMBOANGA CITY 24 – 34°C

PUERTO PRINCESA

ILOILO/ BACOLOD

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SUNSET

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MOONRISE

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25 – 30°C

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FEB 4

7:09 PM

CELEBES SEA

1:15 AM

0.19 METER

5:54 PM

0.86 METER

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

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Cloudy skies with rain showers and/or thunderstorms Light rains

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

METRO DAVAO 24 – 31°C

ZAMBOANGA

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LEGAZPI CITY 24 – 30°C

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

of the PNP-SAF mission only after the fighting between the policemen and the the MILF and BIFF erupted.

Still, he said, “the truth shall set us free, so let us wait for the Board of Inquiry.”

Mr. Aquino then insisted the incident should not setback the passage of the Bangsamoro basic law granting greater autonomy to the Muslim Community in Mindanao saying, “If we do not, we return to the status quo [and] if nothing is done, who will benefit?”

In the meantime, he assured that the families of the slain SAF members will “receive all the benefits” the government is required to extend to them. “Let, us show to all that the SAF members’ sacrifice would not be for naught,” he added. As for the MILF, President Aquino said he expects to the Moro rebel group not to get in the way of follow-up operations to go after suspected terrorists and “show sincerity in the peace process.”

sion to serve warrants against two suspected terrorist bombers hiding out in the known MILF territory.

President Aquino clarified at the outset he did not intend to preempt the inquiry and was simply pointing out that the mission carried out by the PNP-SAF in Maguindanao starting Saturday night was intended to serve long-standing warrants against two suspected bomb experts Abdul Basit Usman and Sulkifli Bun Hir alias Marwan, an alleged member of the central command of the Jemaah Islamiya terrorist group.

“These two are not ordinary criminals with several warrants [dating back to 2002],” he said. “With such warrants, it is the duty of the lawmen to arrest them, “ Mr. Aquino said, adding “they need not ask permission” from him all the time there is a mission to go after the two suspects.

President Aquino claimed he, too, was “surprised” to learn other military forces in the area were informed

NORTHEAST MONSOON AFFECTING LUZON. (AS OF JANUARY 28, 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.

PUERTO PRINCESA CITY 24 – 30°C

Dominant Position, Unfair Competition, Establishing the Philippine Competition Commission, Appropriating Funds Therefor, and for Other Purposes,” is authored

by Speaker Feliciano Belmonte Jr. and former President and now Rep. Gloria Macapagal-Arroyo along with Reps. Rufus Rodriguez, Maximo Rodriguez, Salvacion Ponce-Enrile, Marcelino Teodoro, Reynaldo Umali, Diosdado Ignacio Arroyo, Teodoro Haresco Jr., Neil Tupas, Sergio Apostol, Anthony del Rosario, Giogidi Aggabao and Ibarra Gutierrez.

@PanahonTV

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Skyway sets 12-hour closure

S

K Y WAY System operator Skyway O&M Corp. (Somco) will close the entire stretch of the elevated section of the Skyway System from Buendia to Alabang, both northbound and southbound directions, from 8 p.m. on January 31 until 8 a.m. on February 1, for the staging of a marathon race for the benefit of the Hero Foundation Inc. (Hero) in partnership with Condura.

Hero is a non-governmental organization providing educational assistance to children and dependent siblings of Filipino soldiers killed in action or totally incapacitated while in the line of duty.

In a statement, Somco advised motorists to use the Skyway’s atgrade section for the duration of the marathon, and appeals for their understanding and cooperation for any inconvenience the said event may cause.

It assured its motoring patrons of continuous safe and smooth flow of vehicular traffic along the tollway in coordination with, among others, the Highway Patrol Group and the Metropolitan Manila Development Authority.

It added that it will also intensify its monitoring operations both on Skyway System’s elevated and atgrade sections to secure people and facilities, assist distressed motorists and prevent lawless activities.

Editor: Dionisio L. Pelayo • Thursday, January 29, 2015 A3

‘Larger force’ pushing Comelec in Pcos deal–legislator

A

By Jovee Marie N. dela Cruz

PARTY-LIST lawmaker on Wednesday said that there is a “larger force” behind the “highly orchestrated move” of the Commission on Elections (Comelec) to keep Smartmatic-Total Information Management (TIM) in control of the automated elections.

Party-list Rep. Terry Ridon of Kabataan, quoting AES Watch coordinator Evita Jimenez during a recent House Committee on Suffrage and Electoral Reforms hearing, asked Comelec Chairman Sixto Brillantes why the poll body chose to go against the advice of its own Law Department and went ahead and decided to tap Smartmatic-TIM’s diagnostic services to check the state of the 82,000 Precinct Count Optical Scan (Pcos) machines even without the benefit of a public bidding.

“The issue here is not only the highly irregular process in which Comelec chose Smartmatic-TIM to do diagnostic work with the Pcos machines. The issue here is the lack of transparency, the lack of check and balance within the Comelec, the lack of openness and accountability to the public,” Ridon said.

During the hearing, Jimenez

questioned the lack of an “independent and comprehensive audit” on the current status of the Pcos machines, emphasizing the lack of a system of “check and balance,” particularly with regard to the upkeep of the machines.

Brillantes, however, repeatedly told the House panel that the diagnostics and refurbishment contracts are still under negotiation.

“It is very apparent that Chairman Brillantes has no answer to give on the very essential question posed by AES Watch on the current status of the Pcos machines. All he could explain was that the price of the diagnostics contract has yet to be finalized,” Ridon said, adding, “The House of Representatives conducted this hearing to find answers to the controversies hounding the preparations for the 2016 automated elections. Yet, I think we will be leaving

with more questions in our minds than answers.”

National Unity Party Rep. Fredenil Castro of Capiz, chairman of the House Committee on Suffrage and Electoral Reforms, meanwhile, warned AES Watch for accusing the Comelec of entering into a P1.2-billion midnight deal with Smartmatic-TIM. Castro urged the AES Watch to refrain from releasing statements against the Comelec without substantiating its claims.

Jimenez had alleged that the Comelec had held secret talks with Smartmatic so that the Venezuelan company would bag the P1.2-billion contract for the diagnostics, repair and refurbishing of some 82,000 Pcos machines.

Also present during the hearing are representatives of Indra Sistemas SA, a rival of Smartmatic in the public bidding for Optical Mark Reader (OMR) machines, planned to be used in the 2016 elections, in addition to the Pcos machines now owned by the Comelec.

Smartmatic-TIM has filed a protest before the Comelec seeking the disqualification of Indra Sistemas SA in the public bidding for OMR machines.

In its protest, Smartmatic said Indra should be declared ineligible by the Comelec Bids and Awards Committee (BAC) to participate in the second stage of the public bidding, for failing 121 of 408 initial technical requirements of the project during the end-to-end demonstration.

“The Smartmatic joint venture Tech Team recorded a total of 121 failures out of a total of 408 minimum requirements. These 121 failures represent 29.66 percent of the total requirements under the ITS,” read the protest.

These include the absences of log file monitoring, backup files generation, nondisplay of the hash code, incapability to handle large data at similar time, absence of the required software utility, lack of the ballot definition management capability and failure to show demonstration ballots.

Carlos Suarez, Indra executive vice president, said that “after the recent deceptive accusations made against our company, Indra, besides emphatically denying such false assertions,

wants the Filipino people to know that Indra is a company that absolutely fulfills with each and every most demanding requirements of the quoted companies, the maximum standards of transparency and the best practices of corporate governance.”

Indra is a global company, with more than 43,000 professionals, who are present in 138 countries and count on own branches in 46 countries, Suarez said.

“Indra has been present in the Philippines since 1995, providing information-technology solutions and services to all Southeast Asia.

The company counts in the country more than 800 highly skilled employees and works for the most dynamic sectors of the Philippine economy,” he told lawmakers.

Economy

A4 Thursday, January 29, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

Meralco execs can’t guarantee blackout-free summer, but power-rate hike likely in Feb

By Lenie Lectura

O

fficials of the Manila Electric Company (Meralco) on Wednesday could not guarantee that there will be no power outages during the summer months but hinted that generation charge, the largest component of an electricity bill, could go up in February.

“We are trying the best we can in terms of procuring supply. We can be ready as best as we can but it really depends on how the power plants will operate. There is no certainty, really,” Meralco Chairman Manuel Pangilinan said.

Pangilinan was referring to a number of power plants that went offline either due to forced outage or scheduled maintenance work.

Latest data indicate that some 660 megawatts (MW) of installed capacity from various power plants in Luzon have already been shaved off due to forced outage and over 1,300 MW owing to scheduled maintenance of power plants.

“The reason there are a number of power plants that are out, particularly those that are on maintenance shutdown, is because it is better to do this than in summer when demand is at its peak,” Energy Secretary Carlos Jerico L. Petilla explained.

Even Meralco President Oscar Reyes said it is difficult to guarantee a brownout-free summer. “Supply is there. If there are no further forced outage, then malaki ang tiwala namin na walang power outage,” he said.

Despite low demand for electricity because of cool weather, Meralco hinted that there could be adjustments in power rates in the February power bills. This is because prices in the Wholesale Electricity Spot Market (WESM) are affected by the multiple simultaneous outages of power plants.

“The price at the spot market, we can’t estimate that. Remember that WESM prices is a supply and demand thing. Although we are sourcing only a small portion of our requirements at the WESM, it still affects the overall power rates. Yes, there may be higher generation charge in February,” Reyes said.

In the meantime, Meralco is closely monitoring prices at the spot market. “We are awaiting the billing of WESM to see how all these outages affected spot-market prices,” Meralco Utility Economics Head Larry Fernandez said.

In terms of share to Meralco’s total power requirements for December 2014 supply month, which are reflected in the January 2015 electricity bills, the power supply agreements, independent power producers and WESM accounted for 52, 45 and 3 percent, respectively.

Generation charge have been low in the past months, but Meralco

said that this series of lower generation charges may be difficult to sustain, especially as warmer temperatures set in, coinciding with the shutdown of the Malampaya gas facility sometime from March to April this year.

Probe

Meanwhile, lawmakers have called on the House Committee on Energy to conduct an inquiry on Shell’s maintenance schedule of the Camago Malampaya natural-gas facility in the West Philippine Sea and its impact on the overall power-supply situation of the country.

Part y-list Reps. Wa lden F. Bello and Ibarra M. Gutierrez III of Akbayan sought the inquiry through House Resolution 1785, saying that the public must know if Shell’s action in the Camago Malampaya gas reservoir is undermining the country’s energysecurity requirements.

“There is a need to determine if the planned maintenance activities

by Shell of the Malampaya facility are the single biggest contributory factor in the projection that there will be a power crisis in the summer months of 2015,” Bello said.

Bello said the Malampaya deepwater gas-to-power project is a joint undertaking between the Philippine government and the private sector to develop the Camago Malampaya gas reservoir in the West Philippine Sea, northwest of Palawan.

He added that the Department of Energy (DOE) leads the project and Shell Philippines Exploration B.V. develops and operates the gas reservoir.

According to Bello, also chairman of the House Committee on Overseas Workers Affairs, the Executive announced a few months back that it is expecting a shortfall in the supply of power during the summer months of 2015.

Bello said this maintenance schedule has been cited as one of the reasons for the projected power crisis this year. Malampaya supplies almost half of the power demand of the island of Luzon.

“This planned maintenance at the time of the year when demand for power is at its peak greatly influences the country’s ability maintaining steady power-supply for all of its consumers,” Bello said.

Gutierrez said Shell remains inflexible and insensitive despite the projected power-supply shortfall this year.

“To prevent this problem created by Shell from happening again, Congress should come up with a framework legislation that would ensure that future energy developers contracted by the government will strictly adhere to the energy-security requirements of the country,” Gutierrez said. With PNA

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Exports and consumer spending seen to boost Philippine economy in 2015

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By Leslie D. Venzon | Philippines News Agency

he Philippine economy is expected to strengthen its growth this year on the back of robust consumption and exports data.

“We expect more bubbly consumer spending in the coming quarters as a result of high job generation and drastically lower inflation due to the collapsing crudeoil prices,” said a joint report by the First Metro Investment Corp.

(FMIC) and the University of Asia

and the Pacific (UA&P).

It said that while the free-falling crude-oil prices have markedly changed the outlook for emerging countries, the Philippines is one of the countries predicted to benefit from the “new normal.”

Crude-oil prices have hit five-

year lows and not expected to recover any time soon.

The latest issue of the Market Call noted that investments should also regain buoyancy as lower oil prices mean better profits. “...And construction regains momentum with a bunch of large PPP [public-private partnership] projects finally taking off,” it said.

The government targets to roll out nine PPP projects with combined costs of P702.78 billion in 2015.

The FMIC and UA&P also expect sustained export expansion at double-digit pace this year, bolstered by low oil prices and the recovery of the US economy.

The US is one the country’s larg-

est export markets.

The report sees headline inflation averaging 2.4 percent in the first quarter of the year with the continuing weakness in crude-oil prices, which also impacts on food prices and other consumer goods.

“This low level of inflation is expected to span the whole of first half [of 2015],” it added.

Meanwhi le, t he FMIC and UA&P said the Philippine economy is poised for a recovery starting fourth quarter if the economic data released in December were to be replicated for the rest of the quarter.

The government will release its 2014 economic report this week.

Milk makers, bakers heed DTI call to lower product SRP

By Catherine N. Pillas

B

read and milk manufacturers have heeded the call of the Department of Trade and Industry (DTI) to lower the suggested retail price (SRP) of their products, with Nestlé Philippines reducing the SRP of its Bear Brand powdered milk, and community bakers opting to either lower bread price or add weight to their pan de sal to reflect the decrease in oil prices and raw materials.

Nestlé Philippines will decrease the SRP of its 150 gram Bear Brand powdered milk by P1 and community bakers will either lower the price of their pan de sal

by P0.15 per piece or increase the weight of the Filipino breakfast staple by 2 grams apiece, the DTI reported on Wednesday.

DTI-Consumer Protection Group (CPG) Undersecretary Victorio Mario A. Dimagiba is, likewise, in talks with the producers of Pinoy Tasty and Pinoy pan de sal to explore the use of alternative flour brands so they can lower the prices of their products.

The pan de sal from community bakeries in the country has a price range of P2 to P2.50 per piece with a corresponding weight range of 25 to 30 grams.

Lucito Chavez, Philippine Federation of Bakers’s Association Inc. national vice president and Tinapayan president, said in a news statement that they have heeded the DTI’s notification to lower bread price amid decreasing liquefied petroleum gas prices.

Philippine Baking (Philbaking) President Nestor Constancia, for his part, said that Philbaking members use electricity in preparing bread so, as a compromise, they would be looking for alternative flour brands with lower prices to be used in Pinoy

AN elderly man buys a loaf of bread from a neighborhood store in Manila. The trade department has called on bakers and retailers to bring down the price of bread amid the continuous decline in the price of oil and liquefied natural gas in the global market. The price for a loaf of bread, the trade department said, should go down by as much as P4.75. The price of the Filipino breakfast staple, the pan de sal, on the other hand, can be reduced by as much P0.16 apiece. Stephanie Tumampos

Tasty and Pinoy pan de sal.

“We are optimistic about the new formulation for Pinoy Tasty and Pinoy pan de sal, and expect to be ready with these in the market by the latter part of February with reduced SRPs,” Constancia added.

Currently, the Pinoy Tasty and Pinoy pan de sal are being sold at P36.50 per loaf and P22.25 per 10-piece pack, respectively.

The DTI will also meet with flour millers next week to discuss the possible reduction of the prices of flour bags to further bring down the SRPs of the two bread brands.

As for powdered milk, Nestlé Philippines Senior Vice President Edith de Leon said: “Effective

March 1, 2015, we are decreasing the SRP of our most salable milk product, Bear Brand powdered milk in 150 grams, from P51 to P50. Although there are product costs that hinder us to lower our prices, such as the impacts of port congestion, we heed to the DTI’s call to help the consumers.”

“In addition, starting April 1, Nestlé will provide extra grams in its Bear Brand powdered milk in 320 grams, 900 grams and 1.2 grams at the same prices,” de Leon added.

Dimagiba further said that CDO, a manufacturer of luncheon meat and corned-beef brands, will raise the price of their processed-

meat products and that Nissin Monde may lower its 55-gram pack of instant noodles by P0.10 to P0.15 centavos.

The DTI will convene the National Price Coordinating Council on February 5 to check on the price and supply of other products under the basic necessities and prime commodities that are under the jurisdictions of the Departments of Agriculture, Health, Environment and Natural Resources, and Energy.

The DTI enjoins the consumers before purchasing goods, to check on the published SRPs for nonagricultural basic necessities and prime commodities at the DTI web site.

Passage of House bill on lower income-tax cap set in March

By Jovee Marie N. dela Cruz

T

he chairman of the House Committee on Ways and Means on Wednesday said the lower chamber is eyeing to pass the bill lowering individual income-tax rates in March.

Liberal Party Rep. Romero Quimbo, chairman of the committee, said the measure will most likely be approved on second reading before the House of Representatives goes on recess on March 19 as lawmakers are winding up the discussions on the tax measure.

Quimbo said his panel is now finalizing the substitute bill consolidating pending measures on lowering the individual income-tax rate and simplifying the country’s tax structure.

Quimbo, however, warned that the Department of Finance and the Bureau of Internal Revenue have jointly launched a lobby drive to veto the bill increasing to P82,000 the tax exemption ceiling for the 13th-month pay and other bonuses.

“I’ve [received information] that the DOF, BIR are lobbying for the President to veto the bill raising tax-exempt ceiling of the bonuses,” he said.

Quimbo said that these agencies are pushing for an issuance of an administrative order fixing the tax exemption ceiling for bonuses to P55,000.

“We have had exhaustive studies and discussions on the proposed measures, and we now have solid data to finalize the substitute bill. We are, therefore, nearing the end of the legislative process on the part of the House as we project the approval on second reading of the proposed lower income taxes before March 19, 2015,” Quimbo said.

Quimbo’s House Bill 4829, a centerpiece bill of the 16th Congress, is among the 13 pending bills, which seek to restructure the income taxes imposed on individuals.

House Bill 4829 is seeking the revision of income taxes for compensation of income earners, self-employed and professionals, and corporations through simplification of tiers and rates, and indexation to inflation.

Quimbo added that his bill proposes the adjustment of the top tax base from P500,000 to P1.4 million based on the Consumer Price Index, and the indexation of other tax brackets to inflation. More significantly, workers earning P180,000 and below will now be completely tax exempt under the proposal.

Quimbo said tax brackets have remained unchanged since 1997 and have not been adjusted to inflation. And because workers’ salaries have been adjusted for inflation but

tax brackets remain frozen, a vast number of workers have been pushed to higher brackets thus paying higher tax rates.

“Our current income-tax system perpetuates an archaic, unfair and inequitable policy.

The data that we have gathered prove that the lowly taxpayer has been carrying the weight of income taxes for so long now. We cannot allow the suffering of our ordinary tax payers under a flawed tax system to perpetuate and last longer than necessary,” Quimbo said. The bill also seeks to simplify tax scheme for professionals and self-employed individuals by the cutting down the number of tiers from 7 to 4.

Quimbo also proposes a competitive corporate income-tax rate of 25 percent in preparation for the Asean Economic Integration.

“By undertaking these reforms, we are paving the way for inclusive growth since implementing a fair and equitable tax system is an essential component of development. Further, these reforms will also allow us to have comparable tax rates with Indonesia, Vietnam, and Malaysia - our prime competitors in trade and investments. Thus, we are vigorously pushing for the approval of the income tax reforms before session ends by midMarch,” Quimbo said.

Sardine trip

A housewife on a shopping trip to a local supermarket checks on the price of canned goods on the shelf. Amid the global oil glut, the price of canned goods in Metro Manila, notably canned sardines, remain stable this week, the cheapest of which carry the brands Ligo, Master and Mega that are being sold for P14 per 155-gram tin can. Stephanie Tumampos

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Govt urged to lower import duties on boat importation

By Catherine N. Pillas

T

he Philippine government should consider lowering the duties on importation of watercraft and review antiquated laws on the maritime industry to spur growth in the local boating industry.

This was aired by the European Chamber of Commerce of the Philippines (ECCP), architect and urban planner Felino A. Palafox Jr. and Headsail Inc. President Angelo Olondriz on Wednesday at a news conference on the potential of the boat-building and marine-tourism industries in the country.

Among the recommendations of the group is the lowering of import taxes on leisure and luxury watercraft, which Thailand has enacted a decade ago and has resulted in the booming of Phuket’s yachting industry. In 2003 Thailand slashed the luxury import tax from 204 percent to zero percent.

“Currently, the import tax on these watecraft is at 100 percent to 150 percent, same as for luxury vehicles,” Olondriz said.

The Thai government’s move also paved the way for local boatbuilders in Thailand to compete with imported crafts, leading to the increase in local players which now export various watercraft worldwide.

Another area for improvement, said ECCP Vice President and General Manager Martial Beck, is the review of the cabotage law, which primarily protects domestic shipping lines from foreign competition. Currently, only domestic shipping lines may ply domestic routes,

ramping up shipping costs.

Such a change may usher in interest from foreign lines not just for commercial purposes, or transporting goods, but for tourism purposes.

“If government relaxes the rules, it will help not just for tourism but will improve our logistics cost. The logistics cost of bringing in goods via sea is at 30 percent of the commodity,” Palafox echoed.

“We want to position the Philippines as the Caribbean of the Far East,” said Beck on the tourism aspect, saying that the reforms would likely push marina and waterfront tourist-attraction development along Philippine coasts.

Beck added that developing the local boat-building capability will answer not only to the “luxury needs” of high-rollers, but also to the transportation and logistics needs of ordinary people as more transport water vehicles can be made.

At present, Olondriz said that there are 25 boat-building firms in the Philippines, raking in less than $10 million annually, far below the potential of the industry considering the archipelagic features of the Philippines.

Infrastructure needs, legislative reforms and the future of the industry are set to be discussed in Sea-ex, a nautical lifestyle conference and exhibit to be held at the SMX Convention from February 20 to 22.

The said event is spearheaded

by Headsail Inc. and the ECCP; the three-day event will convene manufacturers and distributors of yachts, sail boats, boating accessories, watersports equipment and other marinerelated businesses.

Thursday, January 29, 2015 A5

ADB approves $75-M loan for MCIA expansion project

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By Cai U. Ordinario

he Asian Development Bank (ADB) has approved a $75-million loan for the expansion and renovation of the Mactan Cebu International Airport (MCIA) in the Philippines.

The airport project, one of the country’s largest public-private partnership undertakings, aims to boost passenger traffic and support inclusive growth in Cebu.

“ADB’s involvement demonstrates its commitment to assist the government in developing critical infrastructure, the lack of which has been hampering new investments in the country,” said

Christine Genalin Uy, investment specialist in the ADB’s Private Sector Operations Department.

The financing for the project also includes debt of P20 billion, or $450 million, from a consortium of Philippine banks.

The consortium is made up of BDO Unibank Inc., Bank of the Philippine Islands, Development Bank of the Philippines, Land Bank of the

Philippines, Metropolitan Bank & Trust Co. and Philippine National Bank.

The loan from the ADB and cofinancing from the consortium of private banks will be provided to GMR Megawide Cebu Airport Corp., a consortium of India’s GMR Infrastructure Ltd. and Philippine construction firm Megawide Construction Corp.

“The project will increase tourism, and support industry and agricultural activity, thus, creating employment opportunities in the province of Cebu and its neighboring provinces,” Uy said.

The project consists of the construction of a new passenger terminal and renovation of the existing one, as well as providing new commercial facilities.

Upon completion of the upgrade, passengerer capacity at the new terminal will reach 12.5 million each

Leave now, DFA tells 700 OFWs in Yemen

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Peso ends sideways vs USD ahead of FOMC decision, PHL GDP report

F

oreign capital continues to flock to the Philippines to fuel the local currency and the local bourse.

This resulted to the peso ending on Wednesday at 44.08, little changed from the 44.06 a day ago.

A trader said investors took positions in the local government securities market and their dollar holdings ahead of the end of the Federal Open Market Committee’s (FOMC) two-day meeting later in the day.

The FOMC is widely expected to keep the Federal Reserve’s key rate to its current level of zero percent to 0.25 percent but the trader said another factor they are eyeing is whether the committee will touch the issue on the European Central Bank’s (ECB) fresh stimulus program.

The ECB is scheduled to implement

a €60-billion monthly bond purchases from March 2015 to September 2016 to help the ailing economy of the euro zone.

With these factors in play, the local unit opened the day’s trading at 44.08, almost unchanged from the 44.10 on Tuesday.

It traded between 44.19 and 44.06 resulting to an average of 44.14. Volume of trade reached $771.8 million, a bit higher than the $703.4 million in the previous trading. ”Appreciation [of the peso] was on the back of sustained interest in the local equity market,” the trader said.

The Philippine Stock Exchange index further grew by 0.40 points to 7,661.18 points on Wednesday as most of the counters posted increases lead by the holding firms and industrial indices. PNA

year. The project will be developed under a 25-year concession agreement for the operation of both terminals and commercial outlets.

India’s GMR Infrastructure is the fourth-largest private airport operator in the world, while Megawide Construction Corp. is recognized as a local leader in the use of cutting- edge construction technology.

Cebu is among the fastestgrowing regions in the Philippines and a major contributor to the country’s economy. It is the gateway to the Visayas islands but the existing airport at Mactan can no longer cope with the surge in passenger numbers.

T he Mactan Cebu A ir port, which opened in the 1960s, was designed to serve up to 4.5 million passengers a year but in 2014 it served over 7 million.

Beauteous 13 The 13 candidates vying for the title Miss Aviation 2015 beauty contest pose at an airport hangar in Pasay City. This year’s finalists are Blessilda Joy Lazaleta, Cleo Margaret Brown, Leihcel Galvez, Christinabelle Angeles, Lyra Velchez, Mica Angela Angeles, Kathlyn Almeda, Lizl Luoise Camille Resoles, Jamil Joy Tabayoyong, Dayna de la Vega, Phieliz Djyn Mari, Elaine Elago and Angelic Magat. Nonie Reyes

BCDA eyes signing of Nlex-SCTEx link deal before February 12 deadline

By Kris M. Crismundo Philippines News Agency

T

he state-owned Bases Conversion and Development Authority (BCDA) targets to sign with the

Manila North Tollways Corp.

(MNTC) an agreement that will pave the way for the integration of the North Luzon Expressway (Nlex) and Subic-Clark-Tarlac Expressway (SCTEx) before its February 12 deadline set by Senate President Franklin M. Drilon.

“The BCDA is coordinating with Manila North Tollways Corp. to speed up the signing of the agreement on the [NlexSCTEx] integration,” the BCDA said on Wednesday.

BCDA President and CEO Arnel Paciano Casanova said the BCDA was eyeing for the agreement signing by first week of February this year.

“We are just waiting for the go-signal of the Office of the Government Corporate Counsel before we can sign off on the agreement,” Casanova said.

“We just need to thresh out details on the settlement of payments and other

documentation,” he said.

MNTC sees that about P600 million will be spent for the integration project, which includes the relocation of the toll plaza, additional toll booths, and the deployment of the electronic payment system.

The integration works are expected to begin immediately after the signing of the agreement.

MNTC is targeting to complete the Nlex-SCTEx integration by November. The toll integration agreement, once signed, will be elevated to the Toll Regulatory Board for approval.

Currently, only the SCTEx and Tarlac-Pangasinan-La Union Expressway are partially integrated.

“For the long term, there will be discussions for a unified radio frequency ID and other technologies to make it even more efficient for operators and motorists,” the BCDA chief said. PNA

he Philippine government on Wednesday urged the estimated 700 Filipinos in Yemen to leave “as soon as possible” amid heightened political tensions in the troubled Middle East state.

Manila has no diplomatic post in Yemen but said its embassy in Saudi Arabia continues to assess the political and security situation there in light of the recent resignations of high officials of the Yemeni government and after the Houthi occupation of the presidential palace.

“All Filipinos in Yemen are urged to leave the country as soon as possible. The Republic of Yemen continues to be under Alert Level 3 [voluntary repatriation] with all new deployments of Filipino workers or their return from vacation banned,” a Department of Foreign Affairs (DFA) statement said.

All Filipinos are urged to avoid unnecessary travel outside their homes which should also be fortified against stray bullets, it said.

Filipinos are, likewise, discouraged from joining in any mass demonstrations and to avoid areas of conflict.

“If necessary, they are advised to leave their places of residence which are in or near areas of conflict,” the DFA said.

All Filipinos who wish to avail themselves of voluntary repatriation must immediately coordinate with the crisis management team (CMT) based in Sana’a for assistance, it added.

Filipinos in Yemen may contact the CMT at MÖvenpick Hotel Sana’a in Berlin Street through its mobile number +967-73-384-4958.

They could also get in touch with Philippine Honorary Consul Mohammad Saleh Al Jamal in UPS, Damascus St., Hadda Area, Sana’a, or reach him by phone at +967-1-416-751 and +967-777-255-511 or e-mail at honconsanaa@philembassy-riyadh.org. PNA

Sen. Binay backs PPP nutrition drive for kids

S Science nation media tour

Supervising Science Research Specialist Araceli M. Monsada (third from left) of the Materials Science Division, Industrial Technology Development Institute, Department of Science and Technology, supervises the Metallurgical Laboratory facilities during the DOST’s First Science Nation Media Tour, themed “Agham na Ramdam” on Wednesday at the Admatel Building, DOST Complex, Bicutan, Taguig City. PNA

EN. Nancy Binay has committed her support of a public-private partnership (PPP) initiative aimed at combating malnutrition, specifically iron deficiency, among Filipino children.

The legislator officially signed in on Wednesday as one of the partners of Nutrijuice Supplementary Feeding

Program of Coca-Cola Philippines, benefiting 1,000 students and children aged 6 to 12 from Laguna and Cavite.

Binay said that as a children’s welfare advocate, particularly on matters that concern health, she will be collaborating with non-governmental organizations to implement such project.

“Since Vice President Jejomar Binay

[her father] is engaged in housing, I’ll bring them [the Nutrijuices] to relocation sites where there are Day Care [Centers],” Binay said.

“I’ll start this February for the actual distribution with the kids,” she added, without naming the identified areas as details for project implementation are yet to be finalized. R. Abad

Opinion BusinessMirror

A6 Thursday, January 29, 2015

editorial

Greece’s crazy leftists have a good idea

A

MID the populist rhetoric that propelled the far-left Syriza party to victory in Greece’s parliamentary elections, there’s one idea that Germany in particular should take to heart: revive growth in the euro area by giving the hardest-hit countries a break on their debts.

Syriza leader Alexis Tsipras, who was sworn in on Monday as Greece’s new prime minister, has long been calling for a “European debt conference”–a summit meeting at which the region’s leaders would reduce the debilitating obligations of Greece and other financially troubled euro-area governments.

Unlike the rest of the party’s program, this idea makes sense.

Greece has already been granted some debt relief, but not enough to make its fiscal position sustainable. Tsipras is calling for a writedown of about one-third.

There’s plenty of historical precedent for relief on this scale. One case in particular ought to resonate with German officials, who are among the most steadfast opponents of debt relief. After World War 2, Germany’s creditors recognized that full payment of the country’s debts would make revival harder and could destabilize the whole of Europe. In 1953, they agreed to forgive about 50 percent of West Germany’s debts, and made the rest contingent on economic performance. The creditor countries acknowledged at the time that the debt relief was in their own interests.

Today, Germany is the most powerful creditor nation in the euro area. A prolonged financial and economic crisis–together with fiscal and regulatory mismanagement on all sides–has left Greece and others in financial distress.

Concerned that further debt relief would encourage profligacy, Germany opposes writedowns and insists on severe fiscal austerity. The results have been disastrous. In Greece, one in four workers is unemployed and–by one estimate– almost half the population is now in poverty.

This enforced hardship isn’t improving the countries’ ability to pay their debts or helping the European Union’s economic prospects. Slow growth has eroded the fiscal benefits of austerity. Despite spending cuts and tax increases, Greece, Italy, Portugal, Spain and even France will be unable to get their ratios of debt to gross domestic product down to the euro area’s permitted maximum of 60 percent in the foreseeable future.

Debt forgiveness tied to pro-growth economic reforms would help. In some countries, the cost of servicing debt exceeds 10 percent of government expenditures. Some of this money would be better used for spending that would put people back to work. Higher employment and faster growth would make it easier for governments to pay their remaining obligations. That’s why, in circumstances as dire as these, the true cost of debt relief to creditors is low, at worst, and in some cases could even be negative.

There’d be other benefits too–above all, easing the suffering already inflicted on Greece and others, and restoring popular support for the European project. As a principal stakeholder in that project, Germany stands to gain a lot. Its refusal to countenance further debt relief is economically damaging and politically dangerous. For its own sake, Germany should think again.

Bloomberg editorial

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Asean integration won’t be fair John Mangun

OUTSIDE THE BOX

T

HE other day a news headline flashed across the television screen: “Greek Fighter Jet Crashes in Spain Killing 8 French Military.” With my warped sense of humor, I was immediately reminded of one of those old jokes that starts something like “A priest, a politician and a penguin walk into a bar together and . . .”

Of course it is not a joke as the Greek military jet, part of a North Atlantic Treaty Organization (Nato) training exercise, crashed at a military airbase in southeastern Spain killing the two pilots and eight French ground personnel.

The exercise program includes 750 participants from nine countries working and training together to “improve multi-national tactical air operations.”

The irony of the United Kingdom, France, and Germany participating in a joint military training exercise is truly astonishing considering that these three nations have been at war one time or another for most of the last two hundred years. The other European countries involved– Italy, Spain, Belgium, Denmark and Greece–were either allies of the first three or were sites of major battlegrounds and war dead cemeteries.

Throw in the participation of the United States and you have the classic example of ‘strange bedfellows.’

Then the question rises, just exactly who is the enemy that these nations are preparing to fight against?

Military preparedness is the obligation of every nation in a global atmosphere of mutual distrust and caution. Historically though, most nations’ armies have been used for the purpose of conquest rather than defense. In reality, most nations put on the defensive by an invading force have been conquered at least temporarily. And the invasion has always been in support of economic gains either directly or through added territory.

But this is the 21st century and while the newspaper headlines are full of war and rumors of war, the world is actually in the midst of the most peaceful era in human history based on the number of war-related deaths.

Although never accurately attributed to any one person, the idea that “When goods don’t cross borders, soldiers will” describes the ba-

sic relations between nations. Each nation needs the other. None can fully prosper because none are fully self-sufficient.

In his recent Businessmirror column, former Senator Manny B. Villar wrote this; “There is no argument that integration of the economies of the members of the Association of Southeast Asian Nations (Asean) will create huge opportunities and boost growth in the region.” However, Sen. Villar also cautioned: “There are apprehensions over the negative impact of Asean economic integration on different sectors of the Philippine economy”.

The concern is that Asean Integration is not going to provide equal opportunities for all nations in the region. Villar writes, “I won’t dwell on technicalities, but I would like to call for fairness.” And therein lies the problem.

Philippine rice producers are going to have a difficult time competing with Vietnam and Thailand.

Yet Filipino banks should be easily able to counter the Asean banks that will come to the Philippines.

Cambodia and Myanmar are very worried about competing with Filipino workers who may compete for jobs across the region as integration provides more cross-border employ ment. Local consumer goods manufacturers are eager to be more able to easier sell their products abroad.

Singapore has pledged S$50 million to help Laos, Cambodia, Myanmar and Vietnam integrate better

Congress is anti-immigrant–again

By Francis Wilkinson Bloomberg View

I

T’S possible that nothing is ever new in the US immigration debate. In 1977, his first year in office, President Jimmy Carter proposed “an adjustment of status” for perhaps eight to 10 million (who really knew how many?) undocumented immigrants living in the US The point, Carter said, was to avoid having: “A permanent ‘underclass’ of millions of persons who have not been and cannot practically be deported, and who would continue living here in perpetual fear of immigration authorities, the local police, employers and neighbors.”

Objections were raised immediately.

Such an amnesty would reward illegal behavior and penalize those aspiring immigrants who had followed the rules only to see cheaters get ahead. It would send a signal to others that they, too, should game the system by entering the US illegally. And, of course, undocumented immigrants were stealing the jobs and lowering the wages of American citizens.

Amnesty. Deportation. Border security. All the pieces on the board remain the same–but the game, and the nation, is slightly different. The US Hispanic population has more than tripled since 1980.

The share of marriages between spouses of a different race or ethnicity has more than doubled in that time. And attitudes about immigrants, including the undocumented, have evolved. The Republican House majority, which recently passed a series of bills to strip undocumented immigrants of protections, is building a fortress on shifting sand.

Public views of President Barack Obama’s executive actions designed to protect millions of undocumented immigrants from deportation are mixed. But in a Pew Research Center/USA Today poll in December, only 27 percent wanted to deport those who meet the requirements.

According to Gallup surveys, Americans were more favorably disposed toward immigrants during the depths of the Great Recession in 2009 than they were at the peak of the Reagan or Clinton booms.

But the paradox of this nation of immigrants is that it is often bitterly antiimmigrant. Historically, the nation’s love-hate relationship with immigrants has emphasized the latter at the expense of the former. Yet immigration was a tide not easily turned back even in eras when the public stood resolutely opposed to it. As political scientist Daniel Tichenor wrote, US immigration policy has often appeared insulated from “mass publics long opposed to new immigration.”

There was no great popular clamor for the immigration overhaul of 1986, for example, yet it was passed by Congress and signed into law by President Ronald Reagan. The law granted amnesty to several million undocumented immigrants who had been in the US at least since January 1, 1982. Its enforcement provisions, such as forbidding employers from knowingly hiring undocumented workers, proved notoriously weak. More undocumented immigrants–millions more–arrived in the US and stayed.

In 2013, it looked as if Congress might follow the blueprint of the 1986 law. The 2013 legislation, passed overwhelmingly by the Senate, struck essentially the same balance as in 1986: amnesty for millions in return for tougher enforce-

into the coming integration. Yet many younger Singaporeans agree with this sentiment from a political science honors student at the National University of Singapore: “We might have even more of an influx of foreigners, which Singaporeans are already complaining about. Our neighbors’ emergence might be a threat to our existence.”

Asean integration is not going to be fair or equal for any country. However, the size, economic strength, and strategic importance of the Asean region requires that these nations work together not unlike the Nato military trading exercise.

If the Philippines, given its strong economic fundamentals including a sound banking system, good government financials and quality workforce, cannot gain a competitive advantage from the increased economic opportunities, we have no one to blame but ourselves.

Complaining about losing the game because of a bad referee is for losers. Winners score enough points to win regardless of any bad calls.

Sen. Villar offers, “We cannot just let the liberalization program to work against us again, just as it did to our industries decades ago.”

That is the bottom line.

E-mail me at mangun@gmail.com.

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ment and border security. But skeptical conservatives revolted, and the bill died in the House. Since then, the House has moved aggressively to undermine Obama’s actions to protect immigrants from deportation, including his deferred action for “Dreamers” who were brought to the US as children. The nativist wing’s preferred policy of de facto deportation has overtaken the business wing’s desire for a reprise of the 1986 deal.

As a result, anti-immigrant rhetoric is growing more acceptable among Republican politicians. Its main effect is to polarize a previously bipartisan issue–probably inevitable in Washington circa 2015 in any case–and to mobilize competing constituencies. However, it’s unlikely to reverse the trend toward greater acceptance of immigrants.

Republicans have the power, at least through 2016 and perhaps far longer, to block the path of undocumented immigrants into the American mainstream.

Some small percentage of noncriminal aliens will continue to be deported from the US even under Obama’s directives.

Most will not; as a practical reality, they are here to stay. They, or their children, or their children’s children will be Americans. The only question is when.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Thursday, January 29, 2015

The CIR ought to know Bowed in worship before the Lord the records of all taxpayers Msgr. Sabino A. Vengco Jr. Atty. Ayesha Hania B. Matanog

Tax Law for Business

I

N a case involving a claim for tax refund, the taxpayer declared in its 1989 Income Tax Return that it would apply the excess withholding tax as a tax credit for the following year. However, the taxpayer did not in fact apply the excess withholding tax as tax credit. Hence, it applied for a refund.

Both the Court of Tax Appeals and Court of Appeals denied the taxpayer’s claim. The reason is that since the taxpayer declared in its return that is would apply the excess withholding tax as credit, it was presumed to have done so. Because of its failure to present the 1990 return which would have shown that it did not apply the claimed amount as tax credit, taxpayer was not able to overcome the presumption.

However, the Supreme Court ruled that the taxpayer is entitled to a refund. The Court held that petitioner presented evidence to prove its claim that it did not apply the claimed amount as tax credit.

For its part, the Bureau of Internal Revenue (BIR) presented no evidence at all. The Court stressed that the BIR could have easily disproved petitioner’s claim because it ought to know the records of all taxpayers.

(G.R. No. 122480) In a more recent case also involving a claim for tax refund, the Court ruled that since the claimant sufficiently established its entitlement for refund with the BIR offering no contradictory evidence or objections to claimant’s allegations despite an opportunity to do so, claimant is rightfully entitled to refund. The High Court reiterated the principle that the BIR could have easily disproved claimant’s assertion because it ought to know the records of all taxpayers. That the BIR chose not to disprove claimant’s allegations amounts to a waiver of that right.

(G.R. No. 180042) This very same principle was applied lately by the Court of Tax Appeals in CTA EB Case No. 1054.

To justify its assessment, the BIR blamed the taxpayer for its failure to submit the required invoices/official receipts and schedule of purchases.

The BIR claimed that because of this non-submission, the discrepancies noted in the Letter Notice were not reconciled. The Court En Banc pronounced that the BIR cannot feign ignorance of respondent’s records because it ought to know the records of all taxpayers. To the mind of the Court En Banc, the principle that the CIR ought to know the records of all taxpayers emanates from the fact that the CIR has been vested ample powers to know the records of taxpayers and assess the correct

amount of taxes.

For one, pursuant to Section 5 (a) and (b) of the National Internal Revenue Code of 1997, the CIR has the power to obtain information.

The CIR is authorized to examine any book, paper, record, or other data which may be relevant in determining the tax liability of any person. She is even allowed to obtain data from any person other than the person whose internal revenue tax liability is subject to audit or investigation.

To further strengthen this power to obtain information, the CIR is also empowered to summon the person under audit or investigation, or any officer or employee of such person, or any person having possession, custody, or care of accounting records relating to the business of the person under audit or investigation to appear before the CIR and/or to produce such records. Moreover, the CIR is authorized to take testimonies under oath. To make this summoning power more effective, the NIRC penalizes one’s failure to obey the summons. Under Section 266 of the Code, failure to obey summons shall, upon conviction, is punishable by a fine of not less than P5,000 but not more than P10,000 and imprisonment of not less than one year but not more than two years.

Though there are still limits to this power to obtain information, such as inquiring into bank accounts which is allowed only in specific instances as provided under the NIRC, with these broad powers conferred upon the CIR, the CIR or its duly authorized representatives could easily obtain practically all the information it needs. Thus, as said by the Supreme Court, the CIR ought to know the records of all taxpayers.

Atty. Ayesha Hania GuilingMatanog is a junior associate of DuBaladad and Associates Law Offices (BDB Law), a member firm of World Tax Services (WTS) Alliance. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. Atty. Guiling-Matanog can be reached via ayesha.matanog@ bdblaw.com.ph.

Alálaong Bagá

W

ITH hearts not hardened, we bow before the Lord with thanksgiving and listen to His voice with trust and joy (Psalm 95:1-2, 6-7, 7-9). In amazement, we marvel at the teaching and authority of Jesus and realize that before him evil spirits are silenced (Mark 1:21-28).

Hearing God’s voice we bow in worship PSALM 95, the invitatory psalm that opens the Divine Office each day, invites us to join in praise and homage of the Lord and to respect God’s authority.

The invitation rings out thrice: “Come, let us sing joyfully…; let us come into his presence with thanksgiving…; come, let us bow down in worship.” As if in a liturgical setting, the community of the faithful is first summoned for praise, then invited to enter the presence of the Lord, and finally told to bow down in worship, at which God then addresses the community at prayer.

Three images express who God is to the people: “the rock of salvation” which provides shelter and protection, the creator “who made us” and the “shepherd” who guides the people as His flock. To God as our caring and reliable protector, says the psalmist in a concluding plea, we need to be open to His voice.

The people have gathered to wor-

ship God and to receive His word to comfort them and to give directions to them. Everything is rounded off with an appeal by God Himself: “Harden not your hearts….” Be not like your ancestors in the desert (Exodus 17:1-7), when they demanded for signs that prove divine power in their favour, though they have seen how God delivered them from the Egyptians.

“Meribah” (strife) and “Massah” (testing) were places in the wilderness memorializing their rebellious hardness of hearts. “Today,” God desires hearts open in faith and obedience.

Jesus teaches with authority

JESUS enters the sacred space of the synagogue during the sacred time of the Sabbath and, in that place and time, he teaches.

He is not merely claiming the customary right of an adult male member of the community to take his turn at teaching the assembly in the synagogue. Jesus is assert-

Los Angeles Times/TNS

I

N 2011, the US ambassador to Syria, a mild-mannered diplomat named Robert S. Ford, became the face of American support for the Arab Spring when he boldly visited opponents to the brutal regime of Bashar Assad in the northern city of Hama.

In 2014, Ford quit, saying he could not defend the Obama administration’s inconstant support for Syrian rebels. “More hesitation ... (will) simply hasten the day when American forces have to intervene against Al Qaeda in Syria,” he warned.

Now, a year later, Ford’s warning has come true. US warplanes bomb jihadists in Syria week after week.

Northern Syria has become a base for both Islamic State, which invaded Iraq last year, and an Al Qaeda franchise that trains European terrorists.

But Ford thinks US policy has moved backward, not forward.

“We’re seeing Syria divide into four countries,” he told me last week,

“and I’m not sure it can be put back together.”

It’s the most conspicuous failure of US foreign policy today. The Assad regime that President Obama declared dead remains in power, and roughly half its territory is held by jihadists. The moderates the US said it would support are mostly scattered and defeated.

You wouldn’t have learned that from Obama’s State of the Union speech last week, though. In Obama’s telling, Syria is part of a success story.

“In Iraq and Syria, American leadership, including our military power, is stopping (Islamic State’s) advance,” Obama said. “Instead of

He rebukes an unclean spirit

THE man possessed of an unclean spirit should be removed from the sacred precinct.

But Jesus does not demand the man’s removal from that holy place; instead he drives the evil spirit away.

The reign of God is thus proclaimed, and man’s liberation from evil demonstrated, to the astonishment and admiration of the people. It is a confrontation between the power of good and the power of evil, the advent of the power and authority of the kingdom of God that alone can end the reign of evil and darkness.

Japan’s hope may be its hinterlands William Pesek

BLOOMBERG VIEW

A

S the European Central Bank prepares to inject up to a trillion euros into Europe’s faltering economy, Mario Draghi would be wise to study Japan’s experience with massive quantitative easing.

In recent interviews, Bank of Japan Governor Haruhiko Kuroda has come close to admitting that his own monetary “bazooka” hasn’t succeeded in jolting the economy out of its deflationary funk. Simply providing liquidity isn’t enough; banks and corporations need incentive to tap that money.

That means central bankers such as Kuroda and Draghi need to get more innovative with their policies. For the BOJ, the ripest targets of opportunity could well lie outside Tokyo and the corporate headquarters of Japan’s once world-beating companies.

Kuroda and Prime Minister Shinzo Abe have learned the hard way that Japan Inc. has changed too much for traditional monetary and fiscal in-

centives to work on their own. Having moved many of their operations overseas, Japanese manufacturers are benefiting less than expected from the yen’s 30 percent drop, while even big exporters such as Toyota and Sony aren’t sharing their recent spoils with workers as they might have 20 years ago. Banks are still too traumatized by the specter of deflation to lend.

The logjam is driving Abe to look for new areas in which to boost growth–in particular the Japanese hinterlands.

Tokyo has traditionally favored socalled regional economies with boondoggle public-works projects. These bring short-term gain to places such as Okinawa or Hokkaido, but only add to public debt. With the latter bill now

A conspicuous failure of US foreign policy in Syria

By Doyle McManus

ing the right to interpret anew the people’s covenant relationship with God. Traditionally the code of purity defines the religiosity of the people: one must remain pure before the Holy One; whatever pollutes and contaminates must be avoided at all cost; rituals of purification are vital.

Exclusivism and rigorous ritualism are essential.

The official interpreters of the law, the scribes, derive their authority from the precedents set by earlier teachers. Jesus is teaching as one who has authority on his own. The people in the synagogue recognize this and marvel at it. And this “new teaching with authority” is exactly what the exorcism Jesus performs in the synagogue is in its deeper meaning.

A man in the synagogue has an unclean spirit. He is highly contagious in his uncleanness; to be in the presence of the unclean one is to be oneself defiled. The teaching of the scribes is to steer clear.

getting dragged into another ground war in the Middle East, we are leading a broad coalition ... (and) supporting a moderate opposition in Syria that can help us in this effort.”

It’s “a smarter kind of American leadership,” the president said.

Actually, two American impulses have collided in Syria. One was the desire to help topple a regime that has held power through “murder, hostage-taking, enforced disappearances, torture, rape, sexual violence, use of child soldiers, targeting civilians, and indiscriminate bombing,” to quote the State Department.

The other, stronger impulse was to avoid getting entangled in another war–and that, officials said, has been the most consistent message from Obama and his closest aides.

So even as the administration announced program after program to aid moderate rebels–from humanitarian aid and “non-lethal supplies” to a not-yet-started plan to train 5,400 rebels a year–the warning that

filtered through the bureaucracy was: It’s safer to move slowly than it is to take risks.

“There’s never been a great sense of urgency in the administration about doing something big,” Ford said. The new training program, he added, is so small that it “has the feel of checking a box.”

Meanwhile, the jihadists didn’t wait. They collected government aid and private donations from the Arab Gulf states; they bought weapons and trained rebels; and, in November, they overran bases of Harakat Hazm, an armed group the United States was backing, and seized its US-supplied anti-tank missiles. “At that point, our window (for arming rebels) closed,” Ford said.

There isn’t much appetite in Congress for shipping anti-tank missiles to rebels if the missiles end up in the hands of Al Qaeda affiliates. But that still leaves the United States fighting a war in Syria if it is to “destroy” Islamic State, as Obama has promised.

A7

The unclean spirit calls Jesus by name, testing if it has power over him and taking the offensive in the presence of Jesus who shows no sign of fear or intention to flee from it. The evil spirit shows panic, helplessly questioning Jesus as to his intent: what do you want with us? Then answering its own question with another suggestive question: have you come to destroy us?—speaking in the name of the multitude of evil spirits. And as if to assuage its own anxiety, the devil blurts out: “I know who you are–the Holy One of God!”—You will not want to deal with us, so better just stay out of our way.

But God’s Holy One does not subscribe to the idea of avoiding the evil ones. He asserts power over them: “Shut up!”—stop sowing your confusion and lies; “Get out!”—leave the man alone, free to respond to and welcome the reign of God. Alálaong bagá, the teaching of Jesus about the kingdom of God is accompanied with marvellous power and irresistible authority. He releases people from bondage to evil and grants them the assurance of God’s grace. Today the same good news of salvation demands of us openness to His word and joy-filled thanksgiving with hearts unhardened. So in the Eucharist we enter the presence of the Lord and bow in worship.

Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.

topping $8.5 trillion, such largesse is no longer feasible. Instead, Abe hopes to spur competition between traditionally sleepy localities. Enterprising communities that create jobs will get state funding, while laggards are cut loose.

Kuroda could greatly aid this survival-of-the-fittest experiment. As analysts have urged, the BOJ should consider massive purchases of regional-government debt. The total amount of regional bonds outstanding may be roughly $1.7 trillion at the end of March; the BOJ should buy up as many of them as possible, while also forgiving the debt of the most financially troubled municipalities. That way, governments will squander less tax revenue on servicing debt and can issue more to invest and qualify for Abe’s support program.

The BOJ also should consider buying up the nation’s most distressed properties and egregious white-elephant projects. The area surrounding the idled Fukushima nuclear plant springs immediately to mind. So do dozens of barely utilized sports arenas built for the 2002 World Cup, the quiet “international” airports around the nation with only a handful of overseas flights (yes, you Ibaraki) and any number of cavernous museums and concert halls

built to gin up growth in recent decades.

There’s lots more the BOJ could do, including buying the “zaito bonds” state-run companies issue to fund projects, a range of asset-backed and mortgage-backed securities or even derivatives contracts (a possibility Kuroda has raised before). The central bank could buy stocks directly from banks and real estate and commodity funds. Loading up on foreign bonds would help extend the yen’s declines and support exports.

Also, as I’ve written before, the BOJ could offer cash–or debit cards–directly to households to make sure its liquidity gets traction.

The risks–increasing moral hazard, inflating new bubbles, sowing the seeds of a financial crisis–are obvious and plentiful. Yet the more the BOJ pledges to “do whatever it can” to end deflation without succeeding, the more likely it is that traders will pull the plug on bonds and stocks anyway, causing a run on the yen.

Bottom line, whatever the BOJ is doing now isn’t working, as banks like Nomura are starting to acknowledge.

Kuroda needs a better way to translate his $700 billion-plus of annual bond purchases into economic growth. Given how globalized Japan Inc. has become, maybe acting locally is the way to do it.

That goal, if it’s real, will require a ground force. US officials have nominated Turkey, or a coalition of Turkey and friendly Arab forces, plus the future Syrian rebels if their US training ever starts. But that’s a force that doesn’t exist in service of a strategy that hasn’t been described.

One thing US officials still insist they won’t do is conclude an alliance with Syria’s Assad. But they’re no longer insisting he needs to step down immediately. They’ve suggested that the United States could be flexible if Assad’s regime entered serious peace talks with the non-jihadist opposition.

“It is time for President Assad (and) the Assad regime to put their people first and to think about the consequences of their actions, which are attracting more and more terrorists to Syria,” Secretary of State John F. Kerry said on January 14.

If the administration has a diplomatic strategy, it centers on cajoling countries that have influence in

Syria–Russia, Iran, Saudi Arabia and Turkey–to join in a combined effort to end the conflict. The premise is that those countries fear Islamic State and other jihadists enough to put aside their otherwise deep divisions. But that’s a long way from happening too.

Until then, the US strategy boils down to attacking Islamic State from the air, hoping a war of attrition somehow weakens Assad’s grip on power, and asking Turkey (and perhaps others) to act on the ground where the United States has been unwilling.

“Our problem is that we don’t have much leverage,” Ford noted. “We have put very little skin in the game. The Russians and Iranians have put a lot of skin in the game.”

And that offers little ground for optimism. The lesson of our misadventure in Syria may be this: A riskaverse foreign policy can keep you out of ground wars–but it can also keep other goals out of reach, too.

2nd Front Page BusinessMirror

A8 Thursday, January 29, 2015

Aquino defends SAF operation

P

By Butch Fernandez

resident Aquino, insisting that the latest bloodshed in Mindanao should not derail the passage of the Bangsamoro Basic Law, admitted on Wednesday he is banking on a Board of Inquiry to ascertain the facts and pinpoint the perpetrators behind the massacre of 44 policemen by suspected Moro rebels in Mamasapano town last Sunday.

“Let us wait for the Board of Inquiry to ascertain [what actually happened]. It is hard to reply with no facts,” Mr. Aquino told Palace reporters after a nationwide address on Wednesday.

Mr. Aquino added that authorities have yet to establish whether

it was members of the Moro Islamic Liberation Front (MILF) or the breakaway Bangsamoro Islamic Freedon fighters (BIFF) who killed and robbed the members of the Philippine National Police-Special Action Force (PNP-SAF) on a misSee “Aquino,” A2

Jobs aplenty for Pinoys this year Continued from A1

In October 2014, around 1.04 million jobs were created. This pushed down the country’s unemployment rate to 6 percent, the lowest in 10 years. However, the think tank said ,the employment structure of the country hardly changed with services still accounting for over half of total employment.

The PSA data showed that the services sector continued to account for the largest share of total employment at 53.7 percent, followed by the agricultural sector at 30.8 percent and the industry sector at 15.6 percent.

The rosy job prospects in the Philippine economy, coupled by cheap oil prices, will likely drive up consumption spending this year. Apart from these, FMIC-UA&P Capital Markets Research said overseas Filipino workers’ remittances, which hit the highest monthly level since a decade ago, will also contribute to the increase in do-

mestic consumption.

“We expect more bubbly consumer-spending in the coming quarters as a result of high job generation and drastically lower inflation due to the collapsing crude-oil prices.

But investments should also regain buoyancy as lower oil prices mean better profits and construction regains momentum with a bunch of large PPP [public-private partnership] projects finally taking off,” the think tank said.

In its first briefing for 2015, FMICUA&P Capital Markets Research said strong consumption spending could boost the country’s GDP growth to between 7 percent and 7.5 percent this year.

In 2014 the local think tank estimated GDP might have reached 6 percent, while fourth-quarter GDP growth might have hit 6.4 percent.

The country’s national income accounts, or official GDP data for the fourth quarter and full-year 2014, will be released on Thursday.

www.businessmirror.com.ph

PSA retains 5.3% GDP estimate in Q3 2014

By Cai U. Ordinario

T

Manila Electric Co. President Oscar Reyes: “It is going to be a very challenging year for us and for the industry. The challenge lies in the power supply.” bloomberg

Meralco likely topped 2014 profit goal

By Lenie Lectura

T

he Manila Electric Co. (Meralco) likely surpassed its 2014 profit guidance of P17.8 billion, a top company official said.

“I think we are on track to be slightly better,” Meralco President Oscar Reyes said. When pressed for more details, Reyes said Meralco is “hopeful” that it can report more than P17.8 billion.

Meralco has yet to report its 2014 financial performance. At end-September last year, it posted P14.3 billion in core income and P14.308 in reported net income.

If and when Meralco meets its core profit target of P17.8 billion last year, this will be higher than the P17.023billion core profit it reported in 2013.

Earlier, Reyes said, Meralco electricity sales for 2014 is expected to grow by 3 percent on account of higher usage from industrial customers, which registered the highest increase. “We will end the year with roughly a 3-percent growth in sales volume,” Reyes said, adding

that commercial accounts also contributed to the growth, mainly from new connections and increased consumption.

Reyes said the last quarter of 2014 is expected to register a-little-over5-percent growth in sales volume.

October sales stood flat at 5.2 percent, while November sales stood at 6.6 percent, Reyes added.

He said 2014 was a “relatively good year” for Meralco because of stable power supply and lower rates.

“There had been no major disruption and supply was always available.

Prices were also lower. In fact, we just had our lowest generation charge recently,” Reyes explained.

For this year, he said 2015 will be a “challenging” year for the utility firm because of the impending power shortage feared to happen during the summer months.

“It is going to be a very challenging year for us and for the industry.

The challenge lies in the power supply,” Reyes had earlier said. Meralco customers grew to 5.5 million at end-September. In terms of energy

sales mix, commercial accounts for 39 percent of total sales, with residential and industrial at 30 percent and 31 percent, respectively.

Meanwhile, Meralco launched on Wednesday its Power Lab, a twolevel multipurpose facility that can test the power consumption of appliances and gadgets to educate Filipinos about electricity usage and help them understand the impact of energy management in their daily lives. T he Meralco Power Lab houses an equipment-testing laboratory, a demo area and an intelligent living space.

“We want our customers to visit the Meralco Power Lab to discover how much electricity typical home appliances and gadgets consume, and realize how this impacts their household expenses,” Meralco Senior Vice President and Head of Customer Retail Services and Corporate Communications Al Panlilio said.

“Hopefully, this will encourage them to become more conscious about electricity use and be more energy-efficient consumers.”

Oil slide triggers LNG drop as India demand seen rising

O

il’s slump is set to extend the biggest drop in liquefied natural gas (LNG) costs in five years, spurring demand in emerging Asian economies.

LNG prices in Japan, the world’s biggest buyer of the fuel, will probably plunge 35 percent in 2015 and Indian costs will decline 33 percent, according to Energy Aspects Ltd., a Londonbased consultant. Costs in Asia will, this year, average below $10 per million British thermal units for the first time in four years, as new projects in Australia and the US boost supply through 2016, Bloomberg New Energy Finance (BNEF) said.

Most LNG in Asia is linked to crude costs with a time lag of several months, so Brent’s 49-percent drop in the second half of 2014 hasn’t fully filtered into prices. Global demand for the gas chilled to minus 170° Celsius (minus 274° Fahrenheit) will rise 9.8 percent this year, amid increased imports

by India and Southeast Asia, after climbing 0.5 percent in the first nine months of 2014, according to Sanford C. Bernstein.

“We are already seeing, at current prices, renewed interest from Indian buyers,” Laurent Vivier, vice president for strategy and market analysis at Total Gas & Power, said on Monday by e-mail. “There is some flexibility in the demand, as well. When prices fall to current levels, it creates additional demand.”

Average LNG prices in Japan fell 17 percent in December from a year earlier, the biggest drop since 2009, to $13.68 a million British thermal unit (Btu), World Bank data show. Spot prices dropped from a record in February, amid milder weather and full storage facilities in northeast

Asia, particularly South Korea, Wood Mackenzie Ltd. said in a January 7 report. Northeast Asia spot cargoes fell 14.8 percent to $7.50 in the week to January 26, according to assessments

by World Gas Intelligence in New York.

Shrinking share

China, India and Southeast Asia accounted for 15.5 percent of global LNG demand last year, up from 12.2 percent in 2013, and will be the driving forces of incremental buying by 2020, BNEF said in a January 5 report. Japan’s share shrank to 36.7 percent from a record 37.2 percent, while South Korea’s fell to 15.5 percent from 17.1 percent.

India, the world’s second-most populous country, needs LNG to fill a gap between increasing demand from fertilizer producers to power plants and declining domestic output, according to Bernstein.

The country’s total LNG imports may increase by 7 percent to 15 million tons this year, rising to 38 million tons in 2020, according to BNEF.

Contract prices

“LNG is a way forward we are looking at setting up many more terminals, activating the existing terminals,” Piyush Goyal, the country’s power and coal minister, said in a January 23 interview in Davos, Switzerland. “We hope that, in the days to come, we will be able to reignite the gas business in India.”

LNG, under long-term contracts, can cost as much as 90 percent of crude, with spot purchases of as much as 15 percent lower, according to Vitol See “Oil,” A2

he government retained its 5.3-percent estimate for Philippine economic growth in the third quarter of 2014.

The Philippine Statistics Authority (PSA) said that, while there were significant revisions in the growth estimates in the trade and repair and other service sectors, “the changes were not adequate to affect the preliminary gross domestic product [GDP] estimate made in November 2014,” the PSA said.

The PSA said, however, that there was a downward revision in the net primary income (NPI) from the Rest of the World to 2.2 percent from the earlier estimate of 5.1 percent.

This caused the PSA to significantly cut the estimate for the country’s Gross National Income (GNI) in the third quarter.

The new estimate was revised downward to 7.7 percent from the initial figure of 8.1 percent.

GDP refers to the value of all goods and services produced domestically; the sum of gross value added of all resident institutional units engaged in production.

This includes any tax, minus any subsidy, on products not included in the values of their outputs.

GNI, on the other hand, is the total value of goods produced by the Philippine economy in a certain period of time. This is the reason computing for the GNI includes the NPI.

BSP. . .

Continued from A1

Inflation has decelerated since September last year, after peaking at 4.9 percent in July and in August.

The slowest was reported only last December, when inflation averaged 2.7 percent from the previous month’s 3.7 percent, on account of the falling oil prices in the international markets. Still, the central bank vowed to remain vigilant against unexpected price pressures, saying they will continue to be watchful against such threats over the policy horizon.

“BSP will watch economic and financial developments, including the balance of global liquidity, its impact on global inflation and growth dynamics and how these would translate to investor sentiment, financial market moves and domestic market inflation expectations,” Tetangco said.

The Philippine Statistics Authority (PSA) is scheduled to release the inflation data for January in the first week of February.

In a separate commentary, the continued deceleration of inflation this year as a result of lower oil prices should give the central bank sufficient policy space to keep the policy rates steady in the first half of the year, according to a research group.

A collaborative analysis of the First Metro Investments Corp.’s partnership with the University of Asia and the Pacific published as the Market Call indicates that the central bank is resuming a tightening bias in the second half of the year.

“The downtrend in the domestic liquidity and the anticipation of sharp decline in inflation reinforces our view that the BSP will take a pause in its monetarytightening cycle at least until the second half of 2015,” collaboration analysts said.

The BSP will decide which way the policy rates will take at their ratesetting meeting on February 12.