BusinessMirror January 30, 2015

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TfridayNovember 18, 2015 2014 Vol. 10 No. 113 40 Friday, January 30,

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Balisacan SAYS up to 8% EXPANSION NOW SUSTAINABLE ON DOMESTIC STRENGTHS

‘PHL on a long-term growth path’

No longer ‘sick man of Asia’

By Cai U. Ordinario

T

he government is confident the Philippine economy will attain its 7-percent to 8-percent growth target this year and in 2016, according to the National Economic and Development Authority (Neda).

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BALISACAN: “For this year and next, we are targeting 7 [percent] to 8 percent.

We believe that, based on our analysis of the growth trends and the information available, our economy has moved into a long-term growth path, [where] 7 percent is quite sustainable and achievable.”

Neda Director General and Socioeconomic Planning Secretary Arsenio M. Balisacan said a 7-percent to 8-percent growth in terms of the gross domestic product (GDP) is “achievable,” despite such risks as the sluggish global demand, as well as other “surprises” that could crop up in the next two years.

“For this year and next, we are targeting 7 [percent] to 8 percent.

We believe that, based on our analysis of the growth trends and the information available, our economy has moved into a long-term growth path, [where] 7 percent is quite susta inable and achievable,” Balisacan said.

The Neda chief said that growth in 2015 will be driven by domestic, as well as government, spending.

Household consumption spending will continue to be a source of growth since this accounts for 70 percent of the Philippine economy based on an analysis released by the World Bank.

‘CONTINUE PURSUIT OF LONG-LASTING PEACE’

By Recto Mercene

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he international community called on the Philippine government to continue striving for peace in the Mindanao region by pursuing the talks with the Moro Islamic Liberation Front (MILF), in the wake of the massacre of 44 members of the Philippine National Police-Special Action Force (PNP-SAF).

“I think the only sensible thing I can say—when we are all trying to find out what exactly happened, and why—is how important it is for the people of the Philippines, including Mindanao, that the peace

Continued on A8

PESO exchange rates n US 44.1400

process is not discarded as a result of this tragedy. And we are just hoping that that could be the case,” Australian Ambassador to the Philippines Bill Tweddel said. “It is a very sad development for those of us who care to see peace in the Philippines.”

Other countries have also released statements on the Mamasapano encounter, and called for peace and sobriety.

Canadian Ambassador to the Philippines Neil Reeder quoted the statement of Canadian Foreign Minister John Baird: “Despite the deadly clash, Canada continues to support the peace process in Mindanao,” he said.

“Despite the gravity and depth of what’s happened, we believe in the peace process.

We do believe in the aspirations of the country and the people in the Bangsamoro region to have a better life, and we hope this won’t derail that process and allow it to go forward.”

Spain called for a speedy investigation of the clash and hoped for the continuation of the peace process.

“The government of Spain most categorically condemns the brutal murder of 44 members of the PNP in the region of Maguindanao on January 25, in the course See “Long-lasting peace,” A8

Members of the Philippine National Police-Special Action Force carry the flag-draped caskets of their slain comrades for a solemn ceremony upon arrival from southern Philippines on Thursday at Villamor Air Base in Pasay City.

The coffins, bearing the bodies of 42 of the 44 policemen killed last Sunday, were flown on Thursday to Manila, where top government, police and military officials stood in mourning.

AP/Bullit Marquez

Philippine official says the country no longer deserves to be branded the “sick man of Asia,” after its economy grew more than 6 percent for a third consecutive year.

Hampered by natural disasters, growth of the $300-billion economy slowed to 6.1 percent in 2014, but still outpaced most other countries in Asia, officials said on Thursday.

The 2014 performance ranks the Philippines as the second-fastest-growing Asian country behind China, which posted a 7.3-percent growth, and ahead of Vietnam’s 6-percent growth, Socioeconomic Planning Secretary Arsenio M. Balisacan said. The Philippine economy grew 7.2 percent in 2013.

“Our country can no longer be called the sick man of Asia,” Balisacan said. “Our economic growth is becoming more competitive with our East and Southeast Asian neighbors.”

The Philippines has been blighted by decades of corrupt governments, and the archipelago nation is also vulnerable to frequent natural disasters, such as typhoons and floods.

Investor perceptions of the country have improved under the government of President Aquino, who was elected in 2010 with promises to combat endemic graft and poverty.

“The numbers tell us that we are moving in the right direction,” Balisacan said. “Clearly, the economic policies and strategies we are implementing to achieve sustained and inclusive growth are bearing fruit,” he said.

Finance Secretary Cesar V. Purisima on Thursday said higher growth of 6.9 percent in terms of the gross Continued on A2

n japan 0.3757 n UK 66.8059 n HK 5.6941 n CHINA 7.0647 n singapore 32.6335 n australia 35.0568 n EU 49.7899 n SAUDI arabia 11.7441 Source: BSP (29 January 2015)

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Friday, January 30, 2015

A2

‘PHL on a long-term growth path’ Continued from A8

were significantly affected by the government’s underspending.

However, a recovery in government spending in the last quarter of 2014 boosted growth in the fourth quarter to 6.9 percent, an estimate that was above market expectations.

The full 2014 economic expansion ranked the Philippines as the second fastest-growing economy in Asia, while its fourth-quarter growth performance placed the country as the third fastest in Asia for the period.

The fastest-growing economy in Asia in terms of full-year and fourth-quarter growth was the People’s Republic of China with a growth of 7.4 percent and 7.3 percent, respectively.

“Overall, the Philippine economy’s performance in 2014 and the preceding years starting in 2010 shows how our country can no longer be called the ‘sick man’ of Asia. Our economic growth is becoming more competitive with our East and Southeast Asian neighbors. We have avoided the dreaded boom-and-bust cycle that has hounded our economy for decades,” Balisacan said.

The Philippine Statistics Authority (PSA) said the robust performance of the Industry sector, particularly by manufacturing and construction and supported by the trade, real estate, renting and business activities, and transport, storage and communication, boosted the country’s GDP. The PSA said gross national income (GNI) slowed to 6.3 percent in 2014, from 7.5 percent the previous year, with the deceleration of net primary income to 7.3 percent in 2014 from 9 percent in 2013. For the fourth quarter, GNI decelerated to 6.3 percent in 2014, from the previous year’s 7.2 percent ,with the slowdown of NPI by 2.8 percent from a double-digit growth of 12.3 percent the previous year.

the moderate expansion of livestock and poultry,” Balisacan said.

Meanwhile, Balisacan said the recent incidence of violence in Mindanao, where over 40 members of the Philippine National Police (PNP) Special Action Force were slain, should not have a significant impact on the economy this year.

The Neda chief said Mindanao only accounts for 14 percent of GDP. Luzon, including Metro Manila, accounts for 60 percent of GDP and the Visayas accounts for the remaining 26 percent.

However, Balisacan said, armed conflicts, particularly in Mindanao, exact an economic toll measured in terms of lost opportunities to benefit from the rich resources of Mindanao.

He also said that what is important at this point is for the government to resolve the issue immediately to prevent any untoward impact on the economy.

“I think we should be able to put a closure to this issue quickly because that obviously will raise uncertainty, and any uncertainty or even just a perception of risk is bad for business, is bad for confidence. But I don’t think that it will, at this point, have any significant impact on investment. But again, its the closure, we need to have this closure as soon as we can,” Balisacan said.

Economic growth in 2014

In 2014 the Philippine economy posted a growth of 6.1 percent, the slowest since 2011, when the economy posted a full-year economic growth of 3.7 percent.

Basilican said the slower full-year economic growth was largely due to the lackluster economic performance in the first three quarters of the year. The country’s GDP growth in the first to third quarters

No longer ‘sick man of Asia’ Continued from A1

domestic product (GDP) in the final three months of 2014 was made possible by higher government spending during the period. He also said lower oil prices in the fourth quarter also contributed to accelerated GDP expansion, as consumption, driven by savings of consumers, picked up pace.

GDP expansion in the fourth quarter last year averaged 6.9 percent, a strong rebound from the third-quarter figure, which registered at only 5.3 percent.

This brought the full 2014 GDP growth rate to 6.1 percent.

“The robust, broad-based growth bodes well for this administration’s inclusive development agenda, as all sectors, including agriculture, contributed to the acceleration of the economy. With extensive fiscal space, government spending reversed itself to a 9.8-percent uptick in the fourth quarter, while acceleration in the services sector grew by 6.0 percent owing to a boost in public administration and defense,” Purisima said.

He said the government was able to increase spending by giving incentives to disbursements and by creating fiscal space to free up more cash to boost spending on public investments, like infrastructure.

Available figures from the Bureau of the Treasury show the government spent P306.19 billion last October and November. This number was seen to increase as expenditures last December are released.

“We are pleased to note that our investments in agricultural infrastructure and technology are bearing fruit with higher agricultural output for fourth quarter. The

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ter GDP expansion was also buoyed by the significant hike in government spending, especially during the last three months of 2014. “We affirm Neda’s projection that the country’s economy will gain further traction this year as the economic policies and strategies of the government to achieve sustained and inclusive growth are bearing fruit,” the secretary added.

Asked by the BusinessMirror if President Aquino was disappointed in missing the government’s growth target of 6.5 percent up to 7.5 percent, Coloma acknowledged that the Palace “would have welcomed” something close to the 6.5-percent target.

Still, he said, they remain “more optimistic” this year, considering that the Philippines’s record in posting the second-highest growth performance among Asian countries.

“We targeted growth ranging from 6.5-percent up to 7.5 [percent]. But considering that there was a significant rebound from only 5.3-percent GDP growth in the third quarter to 6.9 percent in the fourth quarter, considering further that the growth was broad-based and includes all three main sectors, namely, agriculture, industry and services, and considering, finally, that our country is the second-fastest-growing economy in the region, I think we have all the reasons to become more optimistic about the future growth projections in terms of GDP,” Coloma explained.

In a separate statement Spokesman Edwin Lacierda said that the “welcome news about our economic expansion once more reaffirms the resounding truth that good governance is good economics.”

industrial sector maintains its fast-paced growth, with construction expanding by double digits and manufacturing remaining as the biggest contributor to the sector’s growth at 7.3 percent. Lower oil prices contribute to an even more robust growth on the demand side, with consumption accelerating to 5.1 percent and net exports picking up by 47.4 percent,” he said.

Purisima said the priority bills in Congress, like the fiscal incentives rationalization bill and the amendments to the buildoperate-transfer law and the Foreign Investments Negative List, are expected to further fuel growth in the medium term by providing the government with additional revenues. In a separate development, Malacañang vowed to continue the economic reforms to ensure that the growth track is sustained.

“The government shall remain vigilant against external risks that would undermine the gains of the economy,” Communications Secretary Herminio B. Coloma Jr. said. “We will continue to work toward enhancing the people’s faith in the bureaucracy and their support for the government’s efforts to attain lasting peace,” Coloma added.

In a Palace briefing on Thursday, the secretary said the Office of the President was taking note of “the stellar performance of the Philippine economy that posted the second-fastest annual GDP growth in Asia last year at 6.1 percent.”

He cited the Neda report showing growth in the fourth quarter of 2014 averaging 6.9 percent, and that such growth was broad-based, as all three major sectors—agriculture, industry and services—showed “positive and robust growth.”

Coloma said the impressive fourth-quar-

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CA affirms life for drug mart operator

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HE Court of Appeals (CA) affirmed on Thursday the life sentences handed down in 2009 against the operator of a shabu flea market by the Regional Trial Court (RTC) in Pasig City.

Amin Imam Boratong and his wife were both convicted by the RTC in Pasig City Branch 154 Presiding Judge Abraham Borreta on June 30, 2009, for maintaining a drug den and possession of illegal drugs.

Aside from life imprisonment, the trial court also ordered them to jointly pay a fine in the amount of P11 million.

Boratong was one of the 19 inmates recently transferred from the New Bilibid Prison in Muntinlupa City to the National Bureau of Investigation headquarters in Manila, following a government crackdown on the illegal activities inside the penitentiary, including drug trafficking.

Boratong has questioned the legality of his transfer before the Supreme Court.

In a 38-page decision penned by Associate Justice Stephen Cruz, the CA’s Eight Division also upheld the orders issued by the RTC in Pasig City directing the continuation of the forfeiture proceedings of all the assets and properties of Boratong that were illegally acquired.

The Anti-Money Laundering Council (AMLC) has previously traced 19 bank accounts in the name of Boratong.

Further examination of the accounts showed that the bank deposits of Boratong from December 1 to February 2006 amounted to P907.4 million.

In addition to the bank accounts, the AMLC was also able to discover real properties belonging to Boratong such as a mansion in Rainwood Village, Cainta, and in Gardenia Street, Greenwoods Subdivision. The AMLC also uncovered Boratong also owns a rice mill in Bulacan.

“Regrettably for accused-appellants, Sheryl Molera Boratong and Amin Imam Boratong, this Court failed to identfy any error committed by the court a quo, both in the appreciation of the evidence presented before it and in the conclusion it arrived at,” the CA declared.

The CA stressed the evidence of the prosecution are sufficient to establish that the two maintained the so-called shabu tiangge along F. Soriano Street Barangay Palatiw, Pasig City.

“The foregoing testimonies clearly show how the dangerous drugs were used and sold in the said place. Pertinently, the trial court found the testimonies of the prosecution witnesses credible and trustworthy,” it ruled.

The CA did not give weight to the claim of Boratong and his wife that their arrest were illegal since the search warrant issued against them were improperly served. They noted that the search warrant did not reflect their names and that it did not describe the place to be searched.

The appellate court, however, explained that Section 4, Rule 126 of the Revised Rules of Criminal Procedure does not require that search warrants name the person who occupies the described premises.

Furthermore, the CA held the failure to name the owner or occupant of such property in the affidavit and search warrant does not invalidate the warrant.

“The rule is that a description of the place to be searched is sufficient if the officer with the warrant can, with reasonable effort, ascertain and identify the place intended to be searched,” the CA ruled.

The CA also ruled that the accused-appellants’ defense that they were framed-up is considered weak and has been viewed by courts against the accused since it can easily be concocted. Joel R. San Juan

Editor: Dionisio L. Pelayo • Friday, January 30, 2015 A3

Army’s 6th ID launches probe on Mamasapano massacre

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By Rene Acosta

N investigation into the death of 44 police commandos in Mamasapano, Maguindanao, last Sunday has been launched by the Philippine Army’s 6th Infantry Division (6th ID), a person familiar with the decision told reporters on Thursday.

The military is conducting its own investigation, wanting to know whether it acted appropriately or even enough that could have otherwise saved the lives of members of the Philippine National Police or at least backed them up, according to a 6th ID officer who requested anonymity to freely discuss the matter.

“It’s through the direction of the higher command, Army and the General Headquarters that we are holding a Board of Inquiry on what have we done in order to mitigate the incident,” the officer said.

In the aftermath of the ambush

of Special Action Force (SAF) personnel, questions were also being directed against the soldiers and against their conscience, with the answer that had they heeded the pleas for help by the commandos, SAF personnel, or most of them, would still be alive today, according to the officer.

The policemen were already moving out from serving a warrant of arrest against Jemaah Islamiyah leader Zulkifli bin Hir and bomb expert Bassit Usman when they were mowed down by the Moro Islamic Liberation Front (MILF) and the breakaway Bangsamoro Islamic

Liberation Front at Barangay, Tukanalipao, Mamasapano.

During the incident, the commandos were appealing for reinforcement from soldiers but the military earlier claimed the operation was not coordinated with its officials. However, Defense Secretary Voltaire T. Gazmin said the operating policemen sounded off with military commanders in the area.

The source said the focus of the probe of the 6th ID, which is based in Maguindanao, were the circumstances surrounding the carnage.

The person who spoke with reporters said the probe would also look into the role of the 6th ID in the incident.

The Army’s investigation is separate from the Board of Inquiry that the leadership of the PNP has created. The latter is now looking into possible lapses in police operations.

Other than determining whether the military acted appropriately out of the ambush, officials also wanted to come up with measures to avoid a repeat of the incident.

The principal reason that had been blamed over the late reaction or the delayed action of the

military in reinforcing the SAF personnel was the ongoing peace talks with the MILF. The Association of General and Flag Officers has no control over the members of the MILF, a person familiar with the matter said.

This was also being eyed as the reason US soldiers were the first to reach the site of the carnage and reportedly evacuated the dead and the wounded.

“They [Americans] are not allowed to join operations but we asked for their help because they have all the assets to provide the medical evacuation,” Gazmin said.

Aside from the dead, 12 other SAF personnel were also wounded during the ambush.

The remains of 42 of the 44 commandos arrived on Thursday at the Villamor Air Base in Pasay City.

The bodies were given a mournful arrival honors ceremony.

PNP Officer in Charge and Deputy Director General Leonardo Espina and Armed Forces Chief of Staff Gen. Gregorio Pio Catapang Jr. led police, military and even government officials in receiving the bodies, along with the grieving family members of the killed policemen.

Economy

A4 Friday, January 30, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

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P-Noy asked not to dilly-dally on bill raising bonuses tax-exemption cap

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By Jovee Marie N. dela Cruz

Nigerian businessmen to seek local partners

party-list lawmaker and one of the principal authors of the bill seeking to raise the taxexemption cap for 13th-month pay and other bonuses on Thursday warned President Aquino against vetoing it, as he would risk earning the ire of around 43 million workers in the private and public sectors.

Rep. Antonio Tinio of ACT Teachers said the bill that would increase tax-exemption ceiling on bonuses to P82,000, or nearly three times the current cap of P30,000, has been pending as early as January 14 at the Office of the President, who referred it to its legal department “for further study.”

“All working people want some relief from unconscionably high personal income taxes. They are eagerly awaiting enactment of this bill into law as soon as possible. A presidential veto will deny the majority of Filipinos, who are mostly low- and middle-income earners, the higher take-home pay that they so justly deserve and need,” Tinio said.

Tinio added that the fact President Aquino is entertaining the thought of vetoing the measure, which was approved unanimously by the House of Representatives and the Senate, shows that he is really keen on giving economic relief to the people.

“A veto would send a strong sig-

nal to ordinary working people and their families that the Aquino administration has little regard for their welfare. On the other hand, it has no qualms about using taxpayers’ funds to subsidize the private profits of the big foreign and local corporations through public-private partnerships, tax holidays and other incentives,” Tinio added.

He noted the widespread resentment among teachers and other government employees on the taxes imposed on their year-end bonus and productivity incentive last December.

Tinio also questioned the Department of Finance (DOF) proposal to raise the tax ceiling to P55,000 through an administrative order, in lieu of the enactment of the measure.

“Based on the movement of the CPI [Consumer Price Index] with 2006 as the base year, the P30,000 ceiling first set in 1994 should now be P82,000,” Tinio said. “The DOF

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UFC AT MOA SM Lifestyle Entertainment President Edgar Tejerero (left) and SM Prime Holdings President Hans Sy (center) exchange gloves with UFC Executive Vice President Kenneth Berger during the Ultimate Fighting Championship news conference at the Mall of Asia Arena. Story on C3. KEVIN DELA CRUZ

proposal falls far short and will continue to unjustly burden workers.”

In the event that the President decides to veto the measure, Tinio vowed that he would urge colleagues to overturn it, saying “Congress must take a stand and side with the working people.”

Liberal Party Rep. Romero Quimbo of Marikina, chairman of the House Committee on Ways and Means, said on Wednesday that he

received reports that the DOF and the Bureau of Internal Revenue (BIR) are urging the President to veto the measure, and proposes instead a lower tax-exemption ceiling of P55,000 through an administrative order.

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

Earlier finance officials warned

that raising the tax-exemption cap would result in revenue loss to the government of about P30 billion per year. But other experts said revenue loss would be just P3 billion.

The measure, which raised the tax-exemption ceiling of the 13th month pay and other bonuses from P30,000 to P82,000, covers the 13thmonth pay, Christmas bonus and other bonuses received by employees every year.

business delegation from Nigeria will be in the country to look for potential partners in various sectors, such as energy, business-process outsourcing (BPO) and construction.

The business delegation will be welcomed by the the Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization on Monday.

PCCI Chairman Miguel B. Varela said the 30-man delegation is composed of government and private- sector representatives. They are interested in seeking partnerships and joint ventures in the sectors of tourism, health care, oil and gas, power and alternative energy, BPO, housing and construction of malls, among others.

Ambassador Abdulkadir Musa MNI, permanent secretary of the Federal Ministry, will give a presentation on specific sectors of the Nigerian economy. On the Philippines side, Philippine Economic Zone Authority Director General Lilia B. de Lima will present the incentives being given by the govenrment, while Jose Mari Mercado, president and CEO, of the Informaiton Technology and Business Process Association of the Philippines, will brief the Nigerians on the opportunities in the Philippine BPO industry. Catherine N. Pillas

P136 wage hike sought for NCR workers

By Jonathan L. Mayuga

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he Trade Union Congress of the Philippines (TUCP)-Nagkaisa and the Trade Union Congress Party-list is seeking a P136 wage hike for Metro Manila workers, who currently receive P466 in minimum daily pay.

The petition for the wage hike was filed before the Regional Tripartite Wages and Productivity Board -National Capital Region during a public consultation conducted by the board on Thursday.

In a position paper, Rep. Raymond Mendoza said workers are “wallowing in poverty,” despite economic growth, which, he said, is “unfair and grossly unjust” to workers and their families.

“It is a social discrepancy that needs

urgent attention from the government and employers must take seriously into consideration,” Mendoza said.

According to TUCP Spokesman Alan Tanjusay, inflation eroded the real value of peso by 35 percent. Moreover, he said, the consumer price index, tuition and recent fare hikes in the Metro Rail Transit and Light Rail Transit added burden to the workers.

“The real value of the current P466 minimum wage is P299 only. It cannot sustain the needs of a family. As a result, many employees fall through the cracks and join the growing ranks of the working poor. Thus, we are asking the board to give a ‘living’ minimum wage. We, particularly, appeal to employers to grant our petition,” Tanjusay said.

The board is composed of three government representatives—one each from the departments of Labor and Employment, Trade and Industry, and of National Economic Development Authority—and two each from the labor and employers’ sectors.

The review process will take a maximum of two months, before deciding on the lawful amount for the wage hike.

In the position paper, the proponents said: “The P136 across-the-board and region-wide daily increase is essential, if workers are to cope with the increasing prices of commodities and cost of living, if they are to meet the basic needs of their families— even if only partially—and if the country is to give meaning and substance to the policy of equitable distribution of income and wealth.”

Submission of bid proposal for CLLEx moved to Feb. 9

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ubmission of bids for the Tarlac Section of the Central Luzon Link Expressway Project (CLLEx) Phase 1 has been extended for one week, or from February 2 to 9, the Department of Public Works and Highways (DPWH) said on Thursday.

Public Works Secretary Rogelio L. Singson said the extension would give bidders enough time to respond to additional clarification or queries on the project.

“This is to preclude any issue that may arise later during the procurement process,” he said in a statement.

Bureau of Construction Director Walter

R. Ocampo, who is also the DPWH Bids and Awards Committee for Civil Works vice chairman, issued the notice of postponement contained under Bid Bulletin 5, providing extension of bid submission period until 2 p.m. of February 9.

“We have to address all the issues or concerns being raised, otherwise, these may again be the causes of the delay in project implementation,” Singson said.

The first phase of the CLLEx project covers a 30-kilometer stretch, starting at the Luisita interchange of Subic-ClarkTarlac Expressway and ends in Cabanatuan City. The project was funded by a

loan agreement between the Philippines and Japan under the Japan International Cooperation Agency Loan Agreement.

On the other hand, the second phase, with a length of 23 kilometers, will be implemented under the Public-Private Partnership program, including the operations and maintenance of the entire 53-km CLLEx stretch.

The prospective bidders include Hanjin Heavy Industries & Construction Co. Ltd., China Harbor Engineering Co. Ltd., Obrascon Huarte Lain S.A. (OHL) & Construction Co. Ltd., China Henan Suili Yuji. PNA

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Friday, January 30, 2015 A5

Neda: GDP growth rate nearing postwar pace

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By Cai U. Ordinario

he Philippines is on track of posting its highest six-year gross domestic product (GDP) average growth since the 1950s, according to the National Economic and Development Authority (Neda).

In a lecture at the Ayala Corp.-University of the Philippines School of Economics Economic forum on Thursday, Socioeconomic Planning Secretary Arsenio M. Balisacan said the Philippine economy has now recorded an average growth of 6.3 percent from 2010 to 2014.

Balisacan said the average growth under the Aquino administration was the highest growth in a five-year period since the mid-1970s.

“If we can get 7 percent this year, that would be the fastest six-year average since the 1950s,” Balisacan said. “The growth rates in the 1950s were higher because they are coming from the post-war reconstruction—about 8 percent, 9 percent.”

Balisacan said there was a “structural

break” in the country’s real economic growth starting 2009. This structural break meant that the economy started posting broader-based and higher-thanexpected economic growth.

In the past few years, the country’s economic growth was higher than 6 percent. In 2012 GDP growth averaged 6.8 percent; in 2013 7.2 percent; and last year 6.1 percent.

Balisacan attributed this growth to the resurgence of the manufacturing sector starting in 2012. This has caused the growth of the entire industry sector to outpace that of services, the largest contributor to GDP, in most quarters starting 2012.

Despite the rosy economic picture, Balisacan believes that the country still has a long way to go in achieving high and

inclusive economic growth.

Balisacan said the country still needs to grow the agriculture sector, which is the key to boosting the country’s industry sector.

Growing the industry sector will create better jobs for Filipinos, enabling them to increase their incomes and for a quarter of the population to get out of poverty.

Balisacan attributed the slow poverty reduction in the country to the “lost decade” when there was low access to employment and development opportunities.

Poverty incidence among Filipinos in the first semester of 2013 was estimated at 24.9 percent based on the 2013 APIS conducted in July 2013. During the same period in 2012, poverty incidence among Filipinos was recorded at 27.9 percent generated from the 2012 Family Income and Expenditure Survey.

On the other hand, subsistence incidence among Filipinos, or the proportion of Filipinos, whose income is below the food threshold, was estimated at 10.7 percent in the first semester of 2013.

This is lower than the 13.4 percent estimate in the first half of 2012. Subsistence incidence among Filipinos is often referred to as the proportion of Filipinos in extreme or subsistence poverty.

Peza firms decry ‘hometown decisions’

By Catherine N. Pillas

‘H

ometown decisions,” or rulings in favor of the local government in lower courts, have been giving locators in areas accredited by the Philippine Economic Zone Authority (Peza) second thoughts about bringing their concerns before the courts.

Peza Director General Lilia B. de Lima said at the Asean Leaderspeak Forum of the Asian Institute of Managemen ’s Asean 2015 Project that among the complaints of foreign investors in getting judicial relief is the lower court’s close ties with the local government.

“One of the laments of our locators is that they get hometown decisions. This is due to the fact that most of these judges are beholden to the local government units [LGUs],” de Lima said in her speech at the forum on

Wednesday afternoon.

Judges assigned in lower courts are often enticed to side with the local government units.

This is because the judges also receive allowances from the LGUs. De Lima said that, aside from hometown decisions, locators—particualry the foreign investor—are also plagued by harassment from LGUs by way of issuances of abritrary temporary restraining orders, impeding their business operations.

De Lima declined to expound on specific cases, but said this uncertainty in getting a fair decision dissuades foreign investors and must be addressed. Only when cases are elevated to the Supreme Court (SC) do they stand a fair chance in their case.

For that purpose, Peza is backing the SC’s move to weed out corruption in the lower courts.

Meralco, 1590 Energy Corp. power supply agreement extended by ERC

By Lenie Lectura

A

World Bank Philippines Macroeconomics and Fiscal Management Global Practice Senior Economist Dr. Karl Kendrick T. Chua (right) gives a presentation at the Fifth Ayala-UPSE Economic Forum on the State of the Philippine Economy held at a Makati City hotel. Also presenting at the forum are Lazaro Bernardo Tiu and Associates President Romeo L. Bernardo. ALYSA SALEN

Manila demands Asean action on China reclamation works

F

oreign Secretary Albert F. del Rosario urged theAsean to take a stand on China’s massive reclamation works on disputed areas in the South China Sea (West Philippine Sea), warning that such activities could eventually threaten all 10 members of the regional bloc.

It was the first major call of the Philippines on the Asean, which is currently chaired by Malaysia, to take a definitive and stronger stand on the issue since the scale of China’s ongoing construction was revealed last year.

Four Asean members—Brunei Darussalam, Malaysia, the Philippines and Vietnam—have been locked in long-simmering territorial rifts in the West Philippine Sea. China and Taiwan are also involved in the disputes, which have long been feared as Asia’s next potential flashpoint for a major armed conflict.

Beijing insists ownership of nearly the whole of South China Sea, which is dotted by clusters of islands, cays, shoals and reefs with rich fishing areas. The vast sea is also believed to be abundant in oil and gas and is regarded as among the world’s most strategic and busiest waterways.

“Now is the time for Asean to come together,” del Rosario said at the bloc’s ministerial meeting in Kota Kinabalu on Wednesday. “Our inaction on this would undermine the principle of centrality, since we are unable to address in a collective and unified manner such a critical issue in our own backyard.”

In his address, del Rosario also lamented Asean’s failure to fully imple-

ment a non-binding accord it signed with China in 2002 to stifle tensions and plans to craft a legally binding pact to prevent the territorial conflicts from degenerating into armed confrontations by enacting rules that would discourage aggression.

“Let us pause for a moment to assess the significance of these massive reclamation projects, all of which are appearing to be near completion as portrayed by available photos,” del Rosario said.

China’s construction, he said, “looks like it is part of a step by step realization of China’s illegal nine-dash line”—a U-shaped encirclement that covers the breadth of Beijing’s claim in the waters.

Malaysia hosted the two-day annual Asean ministerial meetings as chairman of the bloc, which also includes Indonesia, Singapore, Lao PDR, Cambodia, Myanmar and Thailand.

Asean has been criticized for failing to take stronger and rapid steps to ease the territorial conflicts in the South China Sea, which has been renamed West Philippine Sea by Manila.

Analysts see division among its members in their political alliances between Asian powerhouse China and the US, which has been trying to reassert its influence in the Asia-Pacific region after several years of preoccupation in the wars in Iraq and Afghanistan.

The Philippines and Vietnam, on the other hand, have separately increased their military engagements with Washington as they confronted China in a number of inci-

dents in the disputed waters.

Del Rosario, who is leading the Philippine delegation in Malaysia, warned fellow Asean ministers that China’s reclamation is “a threat to freedom of navigation, especially when combined with other threats such as the observation network system and the Air Defense Identification Zone, which should concern all responsible nations.”

“Moreover, the profile of these developments would appear to establish full control of China over the South China Sea,” he stressed.

Del Rosario also reminded the ministers that the massive reclamation is causing “widespread destruction of the region’s marine biodiversity” and could “irreparably damage the entire ecological balance in the South China Sea.” Manila has maintained its position that the territorial row should be resolved through international law, specifically a United Nations maritime treaty signed by the Philippines, China and 162 other governments.

The Philippines filed a case against China in 2013 before a Netherlands-based arbitral tribunal to try to declare Beijing’s enormous claim as illegal. Angered by Manila’s move, China declared several times that it will not join the proceedings as it does not recognize Manila’s case.

Keeping its silence on China’s activities, which has alarmed many foreign governments, such as the US and Japan, “presents a strategic policy dilemma for Asean,” del Rosario said. PNA

N Interim Power Supply Agreement (Ipsa) between the Manila Electric Co. (Meralco) and 1590 Energy Corp. has been approved for extension by the regulators.

In a six-page decision, the Energy Regulatory Commission (ERC) has extended the two firm’s Ipsa until July 25, 2015.

“Finding the motion to be consistent with the commission’s decision, dated May 12, 2014…the Commission hereby grants the same. Accordingly, the term of the Ipsa executed between Meralco and 1590 Energy is hereby extended until July 25, 2015, subject, however, to the same conditions provided in the decision,” the ERC said.

The ERC’s May 2014 decision extended the Ipsa between the two firms up to October 31, 2014. Meralco said there is a need to further extend the Ipsa since reserve capacity is expected to fall below the required contingency reserves due to scheduled maintenance shutdown and forced outages of major base load and gas-fired power plants in Luzon. These are feared to result in a tight supply situation.

Meralco’s Ipsa is meant to lessen the utility

firm’s exposure to the Wholesale Electricity Spot Market (WESM), the country’s electricitytrading floor.

“There is a need to further extend the term of the Ipsa to ensure the availability and affordability of the supply of electricity to its customers and to mitigate exposure to the WESM,” Meralco said.

The utility firm also made calculations that an extension of its IPSA with 1590 Energy Corp. from January to July this year will result in an overall cost savings in its blended generation charge of P0.0922 per kilowatt-hour, equivalent to P1.6055 billion.

Meralco said it the Ipsa is not implemented during the period, it would be constrained to source energy from the WESM, which could have been supplied through the implementation of the Ipsa.

The 1590 Energy is primarily engaged in power generation and operates a 225-megawatt diesel-fired power plant in Bauang, La Union.

Meralco has filed similar applications with the ERC, but the agency has yet to approve them.

Among others, Meralco seeks to source additional capacity from interim bilateralsupply agreements with the units of Global Business Power Corp. until July this year.

BUNDLE OF JOY Richard Charland, president and CEO of Manulife Philippines, gets to have fun with kids during the

launch of the firm’s “Bundle of Joy” advocacy. Manulife’s Bundle of Joy is part of the insurer’s continued advocacy to reach, secure and protect as many Filipino families as possible by helping expectant parents and parents of newborns in their journey into their new stages in life. ROY DOMINGO

Opinion BusinessMirror

A6 Friday, January 30, 2015

editorial

Strong peso or strong dollar?

N

O human has won a chess tournament against a high-specification computer since 2005.

It is nearly impossible to have an objective discussion about the peso-dollar exchange rate. Virtually every opinion on whether the peso should be stronger or weaker–regardless of what the current rate might be- is based on biased self-interest. If you are buying baby formula or scotch whiskey, you want a stronger peso to reduce the cost of imported goods. If you are getting birthday cash from your relatives in the United States, you want a weaker peso.

However, the exchange rate of our currency is dependent on global money flows as well as money coming in and out of the Philippines. The exchange rate value of the US dollar is most accurately measured by the US Dollar Index (USDX), weighted against a basket of other major currencies.

Since the dollar is the reserve and the most widely used currency in the world, looking at the historical price of the USDX against the backdrop of global financial events may give some insight whether it is better to have a strong peso or a strong dollar.

In the early 1980’s, Latin America, primarily Brazil, Argentina, and Mexico, were all hit with a debt crisis from too much foreign currency borrowing. Too much debt is bad; we all know that. But the crisis of debt default was triggered when the USDX hit a major high.

Conversely, the 1987 “Black Monday” American stock market crash came as the USDX reached an extreme low.

Japan’s stock market and economic high coincided with the USDX high in the late 1980’s as did the Asian financial crisis in 1997. The US dot-com stock market bubble burst at a USDX high; the US economy went into a recession at a USDX low. The current global financial crisis came at a dollar high; the US credit rating was lowered at a dollar low.

Even with all these examples of the correlation between dollar highs and lows coming at particular economic turning points, there is no way to say that one caused the other.

While the debt default problems came because of too strong a dollar, there were many other factors that pushed the dollar higher and pushed those countries into other economic problems.

But we do know this. The exchange rate of the dollar has been controlled by the US Federal Reserve since the 1970’s during the term of Fed Chairman Paul Volcker.

A human cannot beat a computer at chess because the machine has the power to look at a thousand times more possible outcomes of any particular move. Central bankers that move the currency exchange rate to create the outcomes they desire are just as bad as humans playing chess against the computer.

The free market is like the computer when it comes to setting currency exchange rates.

Strong peso or strong dollar; let the market decide which is best for the country.

Since 2005

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The barbarity of a few James Jimenez

I

spox

can’t say I was surprised at the reaction of some netizens to the President’s speech last Wednesday.

Considering the mood then, I didn’t expect that many people would be satisfied with anything less than a “Date Which Will Live In Infamy” type of speech—if not in content exactly, then in delivery at least.

But true to form, the President spoke the way he always does and the content, well, I found it to be a comprehensibly structured and fairly nuanced address that hit all the major points without dawdling or descending into sentimentality. And that may have been part of the problem.

In times of national distress— and this one qualifies—people naturally want to hear certain things, said in certain ways: Franklin Roosevelt after Pearl Harbor, for instance, or more recently, the Prime Minister of Pakistan, speaking in the aftermath of the Peshawar killings. With both his allies and his rivals at his side, Nawaz Sharif declared that he would carry on fighting the Taliban until the last terrorist was killed.

So when the President stuck to the facts he had and spoke with an even tone, at a measured clip, it was

perhaps inevitable that many felt let down. The disappointment was so strong, in fact, that there was no shortage of people complaining that he didn’t commiserate enough or that he had all but exonerated the “most favored suspect,” so to speak.

Looking at the transcript, however, reveals a very different picture. The President expressed his condolences this way: “I am greatly saddened that our policemen had to lay down their lives for this mission. Without question, these people are heroes; they who willingly put themselves in danger to address threats to our security; they who were wounded; they who gave their lives in the name of peace.”

Later on, he continues, still without obvious breast-beating: “To the families of the SAF members who perished: I fully sympathize with your grief. I know that this grief may be

accompanied by worries about your future, especially if your loved ones who sacrificed their lives were also your breadwinners. I guarantee: The state will give the maximum assistance it can, within the limits of the laws and rules. On this occasion, I also take the opportunity to appeal to the public: If possible let us extend our utmost support to the bereaved, and maximize the help we can give to the families of those who fell, in recognition of the valour of these heroes who gave their lives for the realization of the peace we have long desired.”

And nowhere in the entire speech did I find anything that could even be remotely construed as declaring the Moro Islamic Liberation Front (MILF) free of any blame. In fact, he said: “I am hopeful that the MILF will show, in the soonest possible time, even more concrete evidence of their solidarity in the pursuit of peace, towards the pursuit of truth, and the accountability of those responsible.”

Read between the lines and this says: prove your innocence, prove your commitment to peace, and make sure you bring the guilty to justice.

I, for one, appreciate that the President’s address was so calm. Bluster might be more emotionally—even psychologically—satisfying, but consider what’s at stake here.

Peace.

Harsh words will not bring justice to the slain any swifter, but they

could have easily torn down the very foundations of the peace this government has laboured long and hard to build. Not the kind of peace you find in the silence of decimated villages or huts reduced to twigs by mortar shells; but that species of peace that is born out of mutual respect and brotherhood.

No. The killers of those soldiers did not show any regard for that kind of peace. They certainly did not show respect, much less brotherhood. But is it right to assume that as well for every single person who wears the same badge on their uniforms? If a Filipino kills a foreigner, would that foreigner’s relatives be justified in condemning all Filipinos?

The retribution—and retribution there must be—needs to be directed at those who are found to be guilty, after due process. If it were any other way, then we would have no moral ascendancy over those we seek to punish because then, we would be indistinguishable from them. More importantly, the retribution must not be at the expense of the greater peace. We have already lost too many and any further conflict would only serve to drive those numbers up.

You may not have been satisfied with the President’s speech, but it seems to me that the man simply wanted to pull us all back from the brink to which we have been pushed by the barbarity of a few.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Profile of jobs in the population

Numbers

A

CCORDING to the latest Labor Force Survey, which dates back to October 2014, unemployment rate improved to 6 percent compared to 7 percent of October 2013 and this 6 percent is the lowest unemployment rate in more than 10 years.

The underemployment rate is also down to about 18.5 percent compared to 19 percent of October 2013. But 6 percent of what or 18.5 percent of what? This article answers these questions by profiling the population in terms of work.

The population of the Philippines is close to 99.5 million. Of the 99.5 million, roughly 37.3 million are under 15 years old. By international labor standards they could not be part of the labor force. This leaves about 62.2 million potential workers. However, not all of 62.2 million participate in the Philippine labor market. Some do not participate for good reasons. For example, full time high school and college students do not work to focus on their studies.

Some do not participate for not so good reasons. For example, there are many who had looked for work in the past, and despite all the efforts and patience had not been employed.

They become frustrated and have stopped seeking for jobs.

Still, there are many who have depended on allowances, food and or shelter from some family members. “Why work in some substandard environment with substandard wage when one can live off of family’s accommodation?” This is even if many jobs like flipping burgers are “substandard” for some but honest and decent living for others.

Some go abroad and become Overseas Filipino Workers (OFWs). As they are not in the country and do not look for jobs in the country, they are at the moment not participants in the Philippine labor market. The number of people of at least 15 years old and do not participate in the labor market is 22.2 million.

This leaves the Philippine labor market with 40 million participants.

Forty million of 62.2 million is 64.3 percent and this 64.3 percent is what government publishes and defines as the labor force participation rate (LFPR).

Unfortunately, not all 40 million have jobs at all times. For example, many fresh graduates do not get jobs immediately. So in the time frame they are looking for jobs, they are classified as unemployed.

Others could be in transition from one work to the other. They resign to look for another job. And so between the time they resigned to the time they are hired, they are classified as unemployed.

Others are laid off and are looking for jobs and so between the time of the lay off and the time they are hired,

they are classified as unemployed.

There are 2.4 million unemployed workers. Hence, 2.4 million of 40 million is six percent and this 6 percent is what government publishes and defines as the unemployment rate.

This leaves the Philippine labor market with 37.6 employed people.

Unfortunately, not all employed people are employed in the ideal sense and are rather better classified as underemployed. There are people with work but would like to work more because their pay does not suffice to support for the basic needs of oneself and family.

For example, a part time fast food custodian who works four hours a week is employed. But four hours a week will unlikely pay an amount enough to live independently. There are others who work long hours but still do not get paid enough to pay for the basic needs of oneself and family.

For example, many vendors selling peanuts in public buses work the whole day. Because many of them do not sell enough to make money enough to support oneself, they are underemployed. The number of unemployed basically tells us the lack of quality that the labor market creates. There are 7 million underemployed workers. Seven million of 37.6 is roughly 18.5 percent and this 18.5 percent is what government publishes and defines as the underemployment rate.

This leaves the Philippine labor market with 30.7 “fully” employed people. One might say that there are 30.7 million people working to support a population of 99.5 million and each employed person has three and one-third mouths to feed.

Fortunately, the OFWs have not been counted yet. Of the 22.2 million people of at least 15 years old and do not participate in the labor market, 10 million are OFWs. So alternatively, one might say there are 40.7 million people working to support a population of 99.5 million and each working person has one and two-thirds mouths to feed.

First, the saying assumes that all OFWs make a decent pay. Second, the numbers do not account for the condition where they work. Third, the social loss of being away from the family and children being left behind is also not accounted for.

The 6 percent unemployment rate and 18.5 percent underemployment rate are good numbers in comparison to the last 10 years, but there is much to be done to improve these numbers.

F

has produced 44 casualties and some critically injured and some wounded.

After deciding to finally talk, President Aquino opted to call the battle which left 44 dead a result of lack of coordination. If I were a teacher on an educational tour with about 60 students and half of them got killed, can I use the word “lack of coordination?” Perhaps, that is a lapsed comparison.

Be that as it may, how can the president, the so-called “Father of the Nation,” maintain his quiet after one or two or three or ten hours? What is happening in and between and after those hours as the nation looks at 10, then 20, then 30, then 40 deaths in the rank of our policemen.

However we hate the guts of these warriors, with their death we are left with no answers but questions about peace, and about a president who keeps quiet when the nation’s defenders are dead and when our basic concept of peace is mutilated.

This is clearly murder, this which took place in Maguindanao. From now on, if and when we talk of

DSWD not bring them to Amoranto Stadium? The announced answered his question: But that would enable them to walk back to the streets and what, embarrass the state and the church?

Besides, if indeed picnics of excursions to the resorts are part of DSWD program for street children, why hold them during the cold season? At this point, there should be taped loud laughter.

Two events: Both lacked coordination. Both events murdered people; the children were banished and disappeared for 5 days; the soldiers totally gone from this earth.

Two events: Both lacked sense of proportion, both lacked logic. Both do not make sense.

Last week, the face of Dinky Soliman was plastered all over the Internet. By the power of selection, the photo of the DSWD top official showed her with a slight glint in her eyes. There was definitely malice in the reason for choosing that photo.

Poor Dinky. But the idea of bringing street kids to a resort, away from the Pope who, as it was written, was here for the abandoned, for the destitute children is senseless and useless.

Rage was rising and the voices were calling for the resignation of Dinky Soliman. It looks like she will be saved by the bell of justice as it tolls for the demise of reason and righteousness in the land.

Massacres occur in this land too often we are not anymore shocked by.

rally has been artificially ginned up by the Party? No and yes.

No, because Beijing sees surging stocks as a tool to accomplish bigger goals. Encouraging a bubble could be a creative way to prevent a run on the yuan as Xi’s team manages a difficult deleveraging of the property sector. With multiple layers of shakylooking dollar bonds at risk of default (developer Kaisa Group may soon be the first), Beijing wants a stable currency. In this context, the stock rally provides incentive for speculative money to stay in China.

Chinese leaders, too, could argue that they’re only following the example of Japan. Prime Minister Shinzo Abe can call strongarming the $1.1 trillion Government Pension Investment Fund to buy stocks a “reform,” but he’s really just trying to pump up equities and elevate confidence in the economy. Also, while moral hazards abound, China—armed with $3.8

trillion of currency reserves—can always prop up the market the way the Bank of Japan intervenes in bond markets. Given the danger that tens of thousands of small investors might lose their savings, Beijing won’t simply let this bubble implode.

On the other hand, the government is effectively promoting a massive pyramid scheme at odds with Xi’s pledge to rein in credit.

Many investors are financing their stock purchases using opaque strategies, including so-called umbrella trusts that allow for more leverage than brokerage financing. In a rather scary piece yesterday, Bloomberg’s Justina Lee explored how investors use these vehicles to take even greater risks that add to China’s overall debt tally. Rather than shrinking, Moody’s estimates credit has skyrocketed to 71 percent of gross domestic product, up from 66 percent last year.

In other words, China is trying to deflate one bubble (exploding credit) by creating a new one (stocks) that may exacerbate the first by stealth.

As bears like hedge-fund manager James Chanos warn, Beijing is now on a “treadmill to hell.” Bloomberg China economist Tom Orlik estimates investment as a share of China’s GDP has reached almost 50 percent, way higher than Japan’s 1990 peak of 32 percent in 1990.

The ratio of real estate investment to GDP, meanwhile, is in line with the highest levels seen in Japan.

It’s easy to understand why China would want more and more citizens to buy stocks. If a critical mass of Chinese feel paper-rich, they’re less likely to protest. They also may save less, spend more and help accelerate Xi’s rebalancing. But as Chinese shares soar, financial risks do, too.

I can think of one word to describe that strategy: irrational.

China hops on a ‘treadmill to hell’ William Pesek

BLOOMBERG VIEW

C

ALL it irrational exuberance with Chinese characteristics.

In August, a fascinating campaign unfolded in China’s staterun media, prodding citizens to pile into stocks. In one week alone that month, the official Xinhua News Agency ran at least eight articles touting the wonders and patriotic virtue of owning equities. The People’s Daily and local television channels joined in what analysts agreed was a Party-sponsored drive to bolster a sagging market.

The preceding few months had been a bloodbath. By the end of May 2014, the Shanghai Composite Index had lost $460 billion of market value in just three years. Presumably, officials figured that igniting a stock rally would boost confidence

as President Xi Jinping recalibrated the economy away from excessive investment and debt and toward a “new normal” of slower growth.

With foreign investors dubious, Beijing looked to households. The government augmented the PR blitz

annotations

ORTY-FOUR or 64? The social media cannot be sure. We are innumerates at this point, more than any other point in our history.

Some forty-four cops were murdered or ambushed and, if we may believe the postings, mutilated. The ordinary man and woman on the street as we are wont to call those whose voice does not matter or whose decisions do not count are running berserk. Then the social media and the formal media declared that after 24 hours, the President of this republic had not yet made any remarks. It was after those hours that the president started to deliver a speech.

The content did not make sense.

The people were not demanding a blow-by-blow account of what happened in Mamasapano. Forty-four men were killed. Think of the number and think of the coffins and multiply that with the grieving families.

It is said that Sec. Manuel Roxas called the Mamasapano event a “misencounter.” If we play by number, a misencounter should not have lasted that long. Radio commentators are agreeing on this point. And if indeed there was post-death mutilation, then it could not have been a “misencounter.” That misencounter

with regulatory sweeteners, reduced fees for trading and opening new accounts, and an orchestrated series of investor presentations by China’s biggest banks.

The charm offensive worked. By early September, the Shanghai Composite had surged to a 15-month high.

That brought even more of China’s 1.4 billion people into the A-share market, pushing the index up another 40 percent in the past three months alone. Never mind that the economy is growing the slowest in 24 years, industrial profits are down 8 percent year-over-year, default risks are rising and overseas analysts are churning out apocalyptic crash narratives: Chinese are betting their savings on bourses that seem more like casinos than rational marketplaces. The runup makes then-Federal Reserve head Alan Greenspan’s 1996 warning about a US stock bubble seem quaint.

Does it matter that China’s stock

A7

Maguindanao massacre, we need to do a disambiguation. There have been two massive massacres in that region the Ampatuan and this Mamasapano. Journalists were in the first and policemen were in the second. Two. Twice. The soil in that region is twice desecrated for lack of coordination.

Terrific coordination was at the core of another event. Not a massacre this time but a disappearance no less of some 500 children and their parents.

These were street children and, putatively, they disappeared during the week that Pope Francis was here.

It was only after the papal visit was over that the media and other people started talking of how the Department of Social Welfare and Development (DSWD) allegedly spirited away the kids and the parents to a resort south of Manila.

Apparently, the occasion was part of the program of DSWD. As I do not have the details of the program, I like to assume that the trip and the games and the fun are part of the process by which these traumatized children are rehabilitated. A radio announced talked about how the program would make the kinds—or at least some of them—to rethink their situation.

That, after enjoying the resort they would resolve not to go back to the streets anymore.

The problem with the conduct of the program is that it did not allow the children to see Pope, perhaps a once-in-a-lifetime opportunity. One radio commentator asked: why did

Tito Genova Valiente

EAGLE WATCH

Friday, January 30, 2015

E-mail: titovaliente@yahoo.com

2nd Front Page BusinessMirror

A8 Friday, January 30, 2015

Signing of Nlex-SCTEx integration deal set

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By Lorenz S. Marasigan

he toll-road unit of conglomerate Metro Pacific Investments Corp. aims to sign the P600million deal for integration of the North Luzon Expressway (Nlex) and the Subic-Clark-Tarlac Expressway (SCTEx) with the Bases Conversion and Development Authority (BCDA) next week.

Manila North Tollways Corp.

President Rodrigo E. Franco said the already delayed project needs to be implemented as soon as possible to provide a seamless connection between the two thoroughfares.

“The signing is scheduled on February 5, but we still need the approval of the BCDA board,” he told the BusinessMirror on Thursday.

The integration—which entails the removal of toll barriers and the subsequent construction of toll plazas—was included in the business and operating agreement (BOA) signed between the government and the toll road operator in 2011.

In March last year the express-

way operator suggested to “delink the integration, from the BOA and start the construction immediately.”

The company, Franco said, is willing to initially shoulder the cost for the integration as this would be beneficial to the riding public.

“This will definitely benefit the motorists, as this would elevate the service quality level at our expressways,” he said.

Integrating the two toll roads would allow for a more seamless travel between Northern and Central Luzon, as it removes the additional burden of making stops at toll plazas between Quezon City and Tarlac.

The group of businessman Manuel V. Pangilinan earlier won the

contract to operate and maintain the longest toll road in the Philippines under the Arroyo administration.

However, President Aquino refused to sign the deal, ordering in December last year that the contract be subjected to a price challenge.

The expressway operator offered to pay the government P3.5 billion for the deal. Half of the gross revenues, according to the terms laid out by the private-sector partner, will also go to the government’s disposition agency.

Earlier this month interested parties met with the BCDA to openly discuss the terms of the price challenge. San Miguel Corp., which operates the South Luzon Expressway and the Skyway System, was present during the pre-selection conference.

The deadline for the submission of bids for the competitive challenge has been set for January 30.

The government’s move to subject the deal to a dispute has earned the ire of the Pangilinan-led toll company, warning that it may resolve to legal means to block the state from executing such deal.

Awarding the contract to the private partner would partially free the government from servicing its P31-billion debt to the Japan International Cooperation Agency, as the private partner would subsidize the liability payments. In return, the concessionaire shall manage, operate and maintain the 94-kilometer toll road for 25 years. The concession period, under the terms of reference, could be extended by another eight years.

‘PHL on a long-term growth path’ Continued from A1

Government spending, Balisacan said, is expected to increase on the back of increased spending for various projects such as infra-

structure for the Yolanda corridor and election spending toward the end of the year.

“Amid the lingering and uneven external conditions, the economy is likely to draw its vigor from the

domestic front. On the supply side, the agriculture and fishery sector is seen to continually grow due to rice- and corn-yield improvements, resurgence of fishery, and Continued on A2

new mitsubishi plant President Aquino huddles with MMC, MMPC and Sojitz Corp. officials for a group photo souvenir during the Mitsubishi Motors Philippines Corp. (MMPC) Santa Rosa Plant inauguration at No. 1 American Road, Greenfield Automotive Park, Special Economic Zone in Santa Rosa City, Laguna, on Thursday. The acquisition and transfer to Santa Rosa, Laguna, is part of Mitsubishi Motors Corp.’s (MMC) “New Stage 2016” midterm plan of reinforcing business in the Philippines as a core market, following Thailand and Indonesia. This is in preparation for MMC’s further business development in the Asean countries. Story on B1. Malacañang Photo

DESPITE BETTER U.S. GROWTH OUTLOOK, FED TO BE‘PATIENT’

PLDT, Disney forge groundbreaking deal Nazareno: “With this partnership, the first of its kind in Southeast Asia, users will now have access to an unprecedented amount of digital-entertainment content from Disney, including mobile and online games, visual e-books, value-added content services, and other co-branded mobile and homeentertainment products for the combined 75 million mobile and broadband subscribers nationwide of PLDT and Smart.”

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he Federal Reserve’s (the Fed) outlook for the US economy is steadily brightening. Yet, the Fed will be “patient” in raising interest rates from record lows.

That was the dual message the central bank sent on Wednesday in a statement it issued after its latest policy meeting.

Why is no rate hike likely soon? The main reason, the Fed suggested in its statement, is that inflation remains well below the central bank’s target rate.

And it said the pressures holding down inflation—mainly plunging oil prices—have intensified. The Fed said it thinks inflation will decline further before eventually reaching the central bank’s 2-percent target rate.

The Fed sketched a bullish picture of the economy—with a strengthening job market, lower unemployment, rising consumer spending and higher household purchasing power fueled by lower energy prices.

Paul Ashworth, an economist at Capital Economics, said the statement suggested that the Fed “is still taking the view that the collapse in oil prices is a net positive for the economy.”

The Fed’s statement also made clear that policy-makers still think the impact of low oil prices on inflation will prove temporary, Ashworth said The statement was approved on a 10-0 vote.

On Wall Street stocks fell after the Fed’s statement was issued in midafternoon, though prices were also pressured by the continued fall in oil prices. The Dow Jones industrial average dropped 195 points, or 1.1 percent.

And the yield on the 10-year Treasury note touched 1.70 percent, the lowest level this year. It edged back up to 1.72 percent late in the day, compared with 1.82 percent late Wednesday.

The Fed’s emphasis on low inflation could affect when it decides to raise its key short-term rate from near zero.

Many economists have forecast a rate hike in June, but some have pushed back their predicted timetable.

The Fed’s statement did not explicitly mention the weakening global economy. But it did say the Fed planned to take “international developments” into account in determining when to start raising rates.

The Fed operates with two key mandates: Maximizing employment and keeping prices rising at a moderate pace of 2 percent.

The US economy’s steady growth and improving job market would normally argue for a move to begin raising rates to prevent high inflation. The Fed has kept its benchmark rate near zero since 2008 to encourage borrowing, spending and investment, and support the recovery from the Great Recession.

The Fed’s key rate affects rates on many consumer and business loans.

But the concerns about global economic weakness and low inflation have raised doubts about when the Fed’s first rate increase will occur. A growing number of economists say the date could slip to September or even later. Economists at Morgan Stanley this week pushed back their forecast for the first rake hike to March 2016 because of the factors holding inflation down. AP

www.businessmirror.com.ph

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ELECOMMUNICATIONS giant Philippine Long Distance Telephone Co. (PLDT) has entered into a multiyear collaboration with The Walt Disney Co. Southeast Asia, allowing the Filipino firm to offer more content to its 75 million subscribers.

This collaboration is the first direct partnership for Disney Interactive with a telco company in the Philippines. The partnership will allow subscribers of PLDT and its subsidiaries access to the entire breadth of the Disney Interactive portfolio, which includes popular digital titles under the Disney, Pixar, Marvel and Lucas Film brands such as Frozen, Big Hero 6, The Avengers, and Star Wars, among others.

“With this partnership, the first of its kind in Southeast Asia, users will now have access to an unprecedented amount of digital-entertainment content from Disney, including mobile and online games, visual e-books, value-added content services, and other co-branded mobile and home entertainment products for the combined 75 million mobile and broadband subscribers nationwide of PLDT and Smart,” PLDT President and CEO Napoleon L. Nazareno said.

This latest venture is part of the company’s “Internet for All” initiative, which promises to bring not only affordable access to the Internet, but the most-complete suite of apps and content services for all their needs as well, Smart Communications Inc. Executive Vice President Charles A. Lim said.

“Disney’s collection of entertaining and engaging characters for the young and young-at-heart have captured the hearts and minds of Filipinos over the years, and Smart is more than proud to be able to bring the Disney magic to fans through their mobile devices,” he added.

“As Filipinos continue to embrace digital technology, it is pertinent that we provide fans content

on these various multimedia platforms so they can enjoy the Disney experience at their leisure and convenience,” said James Gray, general manager of Disney Interactive, The Walt Disney Co. Southeast Asia.

“Working closely with the right locally popular brands like Smart and PLDT is important as they also seek to bring the best digital and multimedia experiences to their users.”

For the initial offering, Smart subscribers will be able to get full and attractively priced access to Disney mobile game titles such as “Marvel Avengers Alliance,” “Frozen,” “Free Fall,” “Big Hero 6 Bot Fight,” and other offerings such as e-books and online games.

Smart subscribers will be able to easily download the mobile games from the GameX portal and play them on their mobile devices. Users can purchase the games using their prepaid credits or charge it on top of their postpaid bills.

Smart is also planning to release Disney-branded content packages for prepaid, postpaid and broadband plans, enriching the overall experience of subscribers with a full suite of games, apps and e-books.

The same complete suite of digital content from Disney will also be available to PLDT Home subscribers nationwide.

The two brands will also help promote Club Penguin, Disney’s innovative online multiplayer virtual world designed especially for kids to interact with other children in the Philippines and around the world.

Through various in-app games, chat and interactive activities, Club Penguin fosters a digital experience that is fun, engaging and safe for use by kids of any age.

“By offering services and pursuing innovations that are both relevant and delightful to them, delivered by a robust and resilient network that is available all over the country—we are enabling Filipinos to live more and have the best Internet experience possible today,” Lim said. Lorenz S. Marasigan

Long-lasting peace. . . Continued from A1 of operations against terrorist cells and conveys its sincere condolences to the families, relatives and colleagues of the victims and its solidarity with the Philippine authorities, and also wishes those injured a speedy recovery,” Spain declared in a statement.

“The government trusts there will be a quick investigation into the facts and the consequent accountability so that the search for solid and long-lasting peace in Mindanao can be resumed with the most extensive consensus possible.”

United States Ambassador to the Philippines Philip Goldberg also expressed

condolences to the families of the police officers killed in the clash.

A post on his Twitter account read: “My thoughts, condolences to families, friends & colleagues of the brave members of PNP’s Special Action Forces who lost their lives this week—US.” British Ambassador Asif Ahmad forwarded a Twitter post from Minister of State for the Foreign and Commonwealth Office Hugo Swire. “Grim news of PNP officers killed in action in Maguindanao. Our thoughts are with the families of the men who died doing their duty,” read the Twitter message, posted on January 25.