BusinessMirror January 6, 2014 by BusinessMirror

PSEi OFF TO A GOOD START FOR 2015 By VG Cabuag

Philippine Stock Exchange (PSE) officials (from left) Director Alejandro T. Yu and Director Edgardo G. Lacson, Capital Markets Integrity Corp. President Cornelio C. Gison, PSE Treasurer Omelita J. Tianco, President Hans B. Sicat, Chairman Jose T. Pardo and Director Vivian Yuchengco, Capital Markets Integrity Corp. consultant lawyer Daisy Arse and COO Roel A. Refran blow horns while leading the bell-ringing ceremony to open the first trading day of the year. ALYSA SALEN

hare prices gained during the first trading day of the year on Monday, as buying picked up although the value of trade was lower due to the holiday hangover. The benchmark Philippine Stock Exchange index (PSEi) gained 46.06 points to close at 7,276.63 points, while other subindices ended mixed. “I hope that 2015 will be the year when we see more of our countrymen reap the benefits of investing in the stock market. And with our individual endeavors, as well as collective effort, I am optimistic that we can help bring financial freedom to more Filipinos,” PSE Chairman Jose T. Pardo said. Volume of trade was at 1.42 billion shares worth P7.37 billion, or lower than last year’s average of about P7.8 billion.

Foreign investors were net buyers at P85.58 million. Gainers led losers 99 to 87, and 42 shares were unchanged. Other subindices ended mixed. The All Shares index closed higher by 18.11 to 4,282.72; the Industrial index shed 63.84 to 11,918.92; the Financials index rose 7.37 to 1,703.57; the Holding Firms index gained 125.74 to 6,425.68; and the Property index closed lower by 6.73 points to 2,803.52. Property developer Ayala Land Inc. was the day’s most traded and gained P0.30 to close at P34. Universal Robina Corp. shed P5 to P191; Metropolitan Bank and Trust Co. was up P1; Philippine Long Distance Telephone Co. fell P32 to P2,874; Energy Development Corp. climbed P0.30 to P8.50; SM Investments Corp. rose P6 to P821; Alliance Global Group Inc. expanded P0.75 to P23.30; and Ayala Corp. added P3 to P697.

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D.O.T.C.’s ‘UNILATERAL’ADJUSTMENT OF LRT, MRT FARES CHALLENGED BEFORE HIGH COURT

PAPAL VISIT 2015

Rail fare-hike debate shifts to SC By Joel San Juan, Butch Fernandez & Lorenz S. Marasigan

WO petitions seeking to suspend the implementation of fare increases for the Light Rail Transit (LRT) and the Metro Rail Transit (MRT), which took effect on January 4, were filed before the Supreme Court (SC) on Monday.

8 DAYS INSIDE

DECORATING RESOLUTIONS FOR 2015 D

A true friend

EAR Lord, give us courage and equip us with practical plans to show that we are really a true friend. For example, if our friends edge somebody out of the group, we should reach out to them by text or over lunch, or change the subject if our friends are gossiping or picking on someone. “A friend loves at all times...some friends play at friendship but a true friend sticks closer than one’s nearest kin. (Proverbs 17:17, 18: 24). Help us, oh Lord to be a true friend. Amen. CHRISTOPHER NEWS NOTES AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

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

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The petitions were filed by militant group Bagong Alyansang Makabayan (Bayan) and other concerned individuals, and former Iloilo Rep. Augusto Syjuco. Petitioners are seeking the issuance of a temporary restraining order (TRO) to stop the government from collecting higher LRT and MRT fares. They questioned the legality of an order issued by Transportation Secretary Jose Emilio A. Abaya in December, which called for collecting higher fares from users of LRT and MRT.

SONY INSIDER, NOT NORTH KOREA, LIKELY INVOLVED IN HACK... »D2

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Tuesday, January 6, 2015

Decorating resolutions for 2015 B M C G Tribune News Service

HAT decorating projects and plans do you have in store for the new year? Are you renovating a key space like your kitchen or bath? Redecorating a well-used room, like your bedroom or family room? Hoping to add a bit more personality to an area that feels blah or unfinished? I like to make decorating-related New Year’s resolutions every year to spark my creativity as I make my spaces lovelier. Want to join me? A few Nell Hill’s designers and I share resolutions for making your home more beautiful in 2015. ■ Resolution No. 1 from Mary Carol: Stop hoarding. After many years living in our beloved old home in Atchison, Kansas, Dan and I have officially moved to a bungalow near Kansas City. I loved my majestic fixer-upper and will always treasure the fabulous memories we made there, but I was more than ready to downsize, to have less home to take care of. As we got ready to move, I was blown away by how hard it was to go through all our stuff, deciding which things would go with us to our cottage and which would have to find a new home. I had no idea I was such a hoarder! Not to the point where someone was going to do a TV documentary on me, but still! As I stood in my basement and looked at the tubs and tubs of accents I had saved through the years, I wished I had undertaken this task earlier and purged on a regular basis. But when I was done

emptying out my closets and garage and basement, I felt fabulous and free. You don’t have to move to begin to sift through your belongings and simplify. During 2015, I’d encourage you to set aside some time to review the items in your home. If something is no longer of use to you, or no longer brings you joy, give it to someone who needs it. Then, when and if you ever move, you’ll be so thankful this big job is done. ■ Resolution No. 2 from Mary-Christine: Find and embrace your own style. As an interior designer, Mary-Christine has seen lots of trends come and go. While it’s fun to incorporate new looks you love into your décor, her advice is to always be true to yourself and embrace a style that suits you. In 2015 she encourages you to discover your signature style. It sounds really hard to do, but, she says, it’s actually super simple to pinpoint your decorating passion. First, she says, figure out what you need from your home. For example, since she works with so much color and pattern every day as a designer, she needs her own home to be very simple and serene. You may be just the opposite. Next, fill your home with things you really love. You want to look forward to walking through your door every day and drinking in the furnishings and accents you’ve used to feather your nest. What do you gravitate toward? What colors or patterns or styles capture your eye over and again? It’s that simple to find your style. ■ Resolution No. 3 from Scott: When decorating, don’t just stop with the furniture. Scott says he’s noticed that, when people redo spaces in their homes or move to a new home, they usually start

the decorating process by selecting the upholstered pieces they want to include in the room. The style and fabric they choose does a great job of setting the tone for the space. But that’s only the first step, Scott explains. Too often, he sees people stop with their redesign once the new sofa is in place. Then, they aren’t quite satisfied with the results, and aren’t sure why. There’s an easy explanation, he says. The room isn’t done. A well-designed space includes much more than great furniture. All the other elements in the room, like the artwork, accessories, rugs and lighting, are essential for completing the design. They work together to give the room its individuality and dramatic flair, to ensure the space is a reflection of you. If you’re redecorating a space this year, Scott advises, “Make sure to see the vision through to the end!” ■ Resolution No. 4 from Nicole: Add a bit of luxury to your home. Everyone loves indulging in a little luxury now and then. And Nicole says 2015 is the year to explore ways you can add some glitz to your everyday life through your home décor. Even if you like things casual and simple, a dot or two of glam will give your spaces a spark of new energy. Nicole suggests picking one little space, maybe a corner of a room or one piece of furniture, and adding a touch of luxury there. Perhaps it’s tossing a pillow corded in a yummy velvet onto your bed, sofa or favorite chair. Gold accents are super hot right now, so you will find lots of options for adding sparkle to your home. How about replacing a tired old lamp with one that features a gold base or a gold-line shade? Place a cluster of gold pottery on your mantel or weave gold picture

frames into the display on a side table. You will be surprised by how much a dash of gold warms up your spaces and makes you feel pampered. ■ Resolution No. 5 from Kristen: Explore the power of stripes. Stripes are Kristen’s new decorating crush. She loves big, bold stripes. She loves little tiny stripes. She loves them turned vertically, horizontally and everywhere in between. She loves them on bedding, furniture and accents. And, in 2015, she invites to play around with the power of stripes in your home, too. When she’s designing gorgeous custom beds, Kristen blends a variety of fabrics and patterns to add dimension to the grouping and give it visual interest. Stripes are always a part of the mix. Want to freshen up your bedding this winter? Bring in a stripe, she advises, whether it’s a large, bold stripe duvet or just an accent pillow that features a ticking ruffle. Stripes belong all over the house, Kristen maintains. Drapes done in a striped fabric add height to a room. Want the window to look larger? Include a striped fabric going horizontally at the base of the drape. It will bring added weight to the space. Have you avoided using a bold stripe on a larger piece of furniture, like a sofa or chair, because you’re afraid it will be too much pattern? Don’t be, she says. It will add lots of drama to the room, and, when accessorized correctly, will recede into the background. Still not convinced? Then cover a piece of furniture in ticking, like I did for my new lake house! ■ Nell Hills is a home furnishings store in Kasas City, owned by Mary Carol Garrity. This article was adapted from Garrity’s blog at www.nellhills.com.

5 ways to repurpose a calendar B A W Milwaukee Journal Sentinel IT happens year after year. You spend 12 months filling in birthdays, appointments and other reminders. You cross off the days of the week until you get to the weekend. And the days, weeks and months just fly by. And then January 1 hits and your trusted calendar hits the garbage. What a shame! So many pretty pictures with such a dismal fate. After buying a fancy calendar from a premium paper store last year, I refused

to succumb to my usual habits. I vowed to find ways to reuse the gorgeous art housed within these pages—and I did. Here are five ways to repurpose a calendar. 1. Gallery wall. There’s nothing that makes your calendar shine like putting it front and center for everyone to enjoy. The best thing about this project? It’s cheap! The only things you need are frames (mat is optional). Use only one type of frame for a uniform look. See a complete tutorial at The Creativity Exchange blog at http:// tinyurl.com/mb8gwmn. 2. Flower vases. In addition to your calendar, save used cans from a fate in the

recycling bin by repurposing them into vases or containers to hold knickknacks. This is best for calendars with thin paper, rather than heavy cardstock. Simply use an acrylic sealer, like Mod Podge, to adhere the paper to the can. After it dries, distress the paper with sandpaper and apply a light coat of a water-based dark stain. See the complete tutorial at the blog Fishtail Cottage at http://tinyurl.com/qg8bwkl. 3. Greeting cards. Impress others with your craft skills by sending them homemade greeting cards. Use a plain, blank greeting card as a template and cut a rectangle the same size as the card from

a calendar picture. Then use a glue stick to adhere the picture to the card. All that’s left is writing a witty note. 4. Gift wrap. Calendars make adorable gift wrap for small gifts. And, with 12 months to choose from, any occasion should be right at your fingertips. Make your packages even more special with pretty ribbons and bows. 5. Bookmarks and gift tags. Put your hole punch to good use by making your own bookmarks and gift tags. Just cut the shape you want, round out the corners and thread a ribbon through a punched hole in the tag.

life

C | T, J ,  mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

FOCUSED MAVS RACE PAST LEBRON-LESS CAVS

BUSINESS-LIKE ALL GAME LONG B D P Fort Worth Star-Telegram

that’s how we approached it,” said Dirk Nowitzki, who scored 15 points and blocked two shots. “No letdowns. “I think we’re all focused. We talked about it before the game that we want to be in attack mode on both ends of the floor, and we built some nice little leads there.” Monta Ellis scored 13 of his 20 points in the first half when the Mavs built a 57-47 lead. Then, with Richard Jefferson making a pair of three-pointers and Al-Farouq Aminu adding a lay-up, the Mavs bolted to an 89-69 lead late in the third quarter. “I thought Aminu was one of the keys to the game,” Mavs Coach Rick Carlisle said. “He was active, he did a great job on [Kevin] Love when he was on him, he rebounded, he ran, he got a couple of big buckets. “I’m happy for him because it’s been a rough go here in the last week and a half or so, but he’s worked hard.” Without James, the Cavs aren’t half the team they can be. And when the Cavs lost point guard Kyrie Irving for the rest of the game with 6:42 remaining in the third quarter because of lower back tightness, all trends shifted in the direction of the visitors. The Cavs finished the game with no fastbreak points, a stat that’s always been one of the hallmarks of James’s career. “They’re without the best player in the world and they’re without one of the best point guards

in the game out there for most of the game,” Carlisle said. “That’s going to take away fastbreak opportunities, as well.” The Mavs also saw new point guard Rajon Rondo making a better connection with center Tyson Chandler. Early in the third quarter Rondo lobbed two balls near the rim that Chandler grabbed and dunked, and then jogged happily away, knowing that the synergy between the two is taking shape. “Every game we’re getting a little more efficient and understanding each other,” Chandler said. “I’m understanding his patterns and the way he likes to pass the ball, and he’s understanding me. “We’re starting to get a little eye contact and it’s only going to get better.” As they wind up this three-game road trip at 6:30 p.m. on Monday against the Brooklyn Nets at the Barclays Center, the Mavs do so knowing they’re a perfect 10-0 on the road against teams from the East. But the Mavs, who received 14 points each from Chandler Parsons, J.J. Barea and Chandler, are not about to get comfortable with their rise up the Western Conference ladder. “You can’t get happy in this league or satisfied, especially in the West,” Nowitzki said. “One loss can drop you all the way to five or six. “We’ve just got to keep playing, keep working hard. There’s another game [tonight], and hopefully we can keep the same focus and have everybody ready to roll and go from there.” ■

HEAT BREAK OUT OF SKID MIAMI—Chris Bosh scored 26 points, Dwyane Wade buried 10 of his 25 points in the final minutes and the Heat held off Brooklyn to snap a fourgame losing streak, 88-84, on Sunday in the National Basketball Association. Hassan Whiteside had 11 points, 10 rebounds and five blocks off the bench for Miami, which won for only the seventh time in 19 home games. Joe Johnson scored 19, Brook Lopez added 16 and Mirza Teletovic had 14 for Brooklyn, which had won six of seven and was seeking to get back over .500 for the first time since November 12. In Auburn Hills, Michigan, Brandon Jennings scored 35 points as

the Pistons beat the Kings, 114-95, for their fifth straight win. Andre Drummond had 15 points and 14 rebounds, and Greg Monroe had 14 points 11 rebounds for Detroit, which improved to 5-0 since Josh Smith was released in December. Detroit is 10-23. DeMarcus Cousins led the Kings with 18 points and 15 rebounds. Eric Bledsoe scored 20 points, fellow guards Goran Dragic and Isaiah Thomas added 18 apiece, and the Suns handed the Raptors their second straight blowout loss, 125-109, in Phoenix. Seven Suns hit double figures in the team’s highest-scoring nonovertime game this season.

Ayala constructing ₧1-B mall in Legazpi

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The Raptors, who trailed by as many as 19 points in the first half and 27 in the second, finished a seasonlong six-game road trip with their two most one-sided losses of the season. Jonas Valanciunas scored 21 and Kyle Lowry 19 for the Raptors. Lou Williams and James Johnson added 17 apiece. Phoenix won for the eighth time in 10 games. In New York Zaza Pachulia had 16 points and 14 rebounds, as the Milwaukee Bucks handed the New York Knicks their 11th straight loss, 95-82. Tim Hardaway Jr. had 17 points for the Knicks (5-31), who lost a franchise-record 10th straight home game. They are one overall loss from

matching the team’s 1985 record for most consecutive losses. Giannis Antetokounmpo had 16 points and 12 rebounds for Milwaukee (18-17). Kobe Bryant, meanwhile, scored 20 points and hit the go-ahead short jumper with 12.4 seconds to play to lead the Los Angeles Lakers to a comeback victory over Indiana, 88-87. Roy Hibbert missed a difficult jumper off a broken play as time expired to end the Lakers’ third win in 10 games. Bryant scored nine points in the final 2:32 while the Lakers rallied past the Pacers, who blew a 13-point lead in the second half. AP

KOBE BRYANT is keeping his temper in check. AP

MODEL TEAMMATE B M B Los Angeles Times

LOS ANGELES—Byron Scott swears it’s true. Kobe Bryant has been a model teammate despite the losses piling up at the Los Angeles Lakers’ feet. “He really hasn’t blown up, to be honest with you. He’s been really good with his teammates, been encouraging at times,” Scott told the Los Angeles Times on Sunday. “But, at times, just like you know he will, and great players do, he’s going to get on some players’ butts.” Wait a sec. What about that rant at practice last month, the one where Bryant said teammates were “soft like Charmin” and yelled at Lakers General Manager Mitch Kupchak to get him better players to practice against? “His blowup, to me, in the ‘80s that’s a normal practice,” Scott said. “That’s how we used to go at each other. And it was fun.” Beyond that, Scott said Bryant’s temperament had been “very good. He doesn’t let things fester in the locker room,” Scott said. “We both have to be patient. Neither one of us is very patient but we both understand that we have to be through this whole process. I think we lean on each other a lot. The relationship that I have with him has really kept me going.” Bryant’s disposition came into question again on Friday night when he yelled at Jeremy Lin to foul Mike Conley late in the game against Memphis. When Lin didn’t do it, Bryant angrily ran out to the three-point line and fouled Conley with 12.6 seconds left and the Lakers down one. Scott took charge, telling Bryant in a time-out afterward that he’d wanted Lin to wait until there were 10 seconds left. “Our relationship has grown,” Scott said. “Our communication has always been good. I think it’s even better now because of the fact we see each other every day and we talk about the game and talk about the future.” The future. When the past isn’t so great, it only makes sense to look at ways to fix it. The Lakers (11-23) continue to linger near bottom-five territory in the National Basketball Association, almost low enough to potentially keep the draft pick they owe Phoenix for the Steve Nash trade. After beating Indiana on Sunday, 88-87, the Lakers hold the sixth-worst record. They keep the pick only if they get one of the top-5 selections in the draft lottery. The Lakers currently have enough salary-cap space to sign one maximum-contract free agent in July. They are projected to have room for another max player in the summer of 2016.

sports

Commuters have no choice but to pay the higher Light Rail Transit and Metro Rail Transit fares for now, as the various court actions taken by different groups versus the increase are still to take their due course. NONIE REYES

EURO NEARS 9-YR LOW ON GREECE CONCERNS T

Sports

LEVELAND—The last thing the Dallas Mavericks were thinking about on Sunday afternoon was falling into the trap of easing off the gas pedal because they were playing a Cleveland Cavaliers team that was without injured superstar LeBron James. The Mavericks were in a business-like mood all game long and made quick work of the Cavs at Quicken Loans Arena, winning, 109-90, to go to 2-0 on this three-game road trip. In winning their fifth straight game and raising their record to 25-10, the Mavericks moved into a tie with the Memphis Grizzlies (24-9) for the Western Conference’s third seed. The Grizzlies are just a few percentage points ahead of the Mavs— .727 to .714—and both teams are only three games behind the top-seeded Golden State Warriors. It would have been easy for the Mavs to have been a bit overconfident on Sunday knowing that James wasn’t going to play because of a strained lower back and strained left knee. But the Mavericks were so focused that they distributed 30 assists on their 44 field goals, shot a sizzling 56.4 percent from the field, put six players in double-figure scoring, and also made 12-of-26 baskets from three-point range. “We wanted all games on this trip, so I think

Continued on A2

BUSINESS-LIKE ALL GAME LONG

CLEVELAND’S Kevin Love (left) and Dallas’s Monta Ellis battle for the ball in the third quarter of their game on Sunday. AP

Bayan said Abaya acted with grave abuse of discretion in raising the fares, as the three train systems are supposedly “public services” that are “subject to regulation.” Hence, “their fare rate may not be adjusted unilaterally.” “As public services, they are subject to regulation, not only as regards their route and the quality of service they offer to the public, but also as regards the manner of fixing the rate of fees that they impose for the use of their services,” the petition of

he euro weakened to an almost nine-year low and European stocks fell for a second day amid concern Greece will exit the currency union. Chinese shares jumped, while oil slumped to its lowest level since 2009. The euro depreciated 0.4 percent to $1.1958 at 8:05 a.m. in London, after touching its lowest level since March 2006. The dollar gained against 14 of its 16 major peers. The ruble slid 5.1 percent. The Stoxx Europe 600 Index lost 0.4 percent, while Standard & Poor’s 500 Index futures fell 0.2 percent. The Shanghai Composite Index surged 3.6 percent to its highest level in five years. A gauge of global bond yields approached a record low. Crude slid 1.9 percent and gold rose 0.6 percent. Greece’s political parties have embarked on a campaign for elections this month that may determine the fate of the

PESO exchange rates n US 44.7400

Continued on A8

he Ayala Corp. has poured in P1 billion worth of investments in Legazpi City, a year before the Southern Luzon International Airport operates in the Bicol region, specifically in Albay province. Legazpi City Mayor Noel Rosal said on Saturday evening during his 51st birthday celebration held at the city motorpool compound, where a P30million convention center is being built, that Ayala Corp. has invested P1 billion for the construction of a new mall right at the heart of the city. “Because of the great potential and business opportunities in Legazpi, though we’re a small city, the Ayala Corp. did not hesitate and invested P1 billion worth of new mall,” Rosal added. Legazpi City, which is known in

the travel industry as the “City of Fun and Adventure,” was voted as the second livable city in the country in last year’s search for the country’s top 3 most-livable cities. In the ranking among the three, Iloilo came first; Legazpi City, second; and Cebu, third. The search, called the Livable Cities Design Challenge, was organized by the National Competitiveness Council, Asia-Pacific Economic Cooperation 2015 National Organizing Council, World Wildlife Fund, Alliance for Safe and Sustainable Reconstruction, Asia Society, Urban Land Institute and the United States Assistance for International Development, which has been supporting the Cities Development Initiative programs, like Project Invest.

ROSAL: “Because of the great potential and business opportunities in Legazpi, though we’re a small city, the Ayala Corp. did not hesitate and invested P1 billion worth of new mall.”

The Ayala mall project is expected to be operational by December. Rosal said Ayala Corp. took over the construction of the mall from Liberty Commercial Center (LCC), which started to build the project in the site of the old public market. See “Ayala,” A8

n japan 0.3714 n UK 68.6222 n HK 5.7690 n CHINA 7.2115 n singapore 33.6189 n australia 36.3651 n EU 53.7059 n SAUDI arabia 11.9180 Source: BSP (05 January 2015)

News BusinessMirror

Tuesday, January 6, 2015

House leaders endorse EBC license renewal Continued from A8

appropriate permits and licenses for the operation of its stations and facilities. EBC shall not use any frequency on the radio and television spectrum without authorization from the NTC. Acceptance of the franchise shall be written to Congress of the Philippines through the Committee on Legislative Franchises of the House of Representatives and the Committee on Public Services of the Senate within 60 days from the effectivity of the proposed Act. EBC shall also submit an annual report to Congress of the Philippines on its compliance with the terms and conditions of the franchise and on its operations on or before April 30 of the succeeding year. Failure to submit the Annual Report to Congress, EBC shall be fined P500 per working day of noncompliance, collected by the NTC separate from the reportorial penalties NTC imposed. Congress shall be informed of any lease, transfer, granting the usufruct of, sale or assignment of franchise or the rights or privileges acquired within 60 days after the completion of said transaction. Failure to report to Congress such change of ownership shall render the franchise ipso facto revoked, and that any person or entity to which this franchise is sold, transferred, or assigned, shall be subject to the same conditions, terms, restrictions and limitations of the proposed Act. A special right is hereby reserved to the President of the Philippines, in times of war, rebellion, public peril, calamity, emergency disaster or disturbance of peace and order, to temporarily take over and operate the stations or facilities of EBC. The President may also temporarily suspend the operation of EBC or its facility in the interest of public safety, security and public welfare, or authorize the temporary use and operation thereof by any agency of the government, upon due compensation to EBC, for the use of said stations or facilities during the period when they shall be so operated. EBC shall hold the national, provincial, city and municipal governments of the Philippines free from all claims, accounts, demands, or actions arising out of accidents or injuries, whether to property or to persons, caused by the construction or operation of the EBC stations. PNA

existence, has been protective of the right of the public to information on matters that are of public concern, as well as balanced news and content that uphold the morals and public policy of the society,” the Speaker said. “Further, EBC has been proactive in environment, social and humanitarian concerns, promotion of historical and cultural heritages, promotion of original Filipino values and artistic creation and communitarianism,” Belmonte said. “EBC’s broadcasting expansion abroad, through international bureaus and correspondents, have opened up windows to the world for the Filipino society,” Belmonte added. Under the measure, EBC’s franchise shall be renewed, amending Republic Act (RA) 4916, as amended by RA 7299, the validity of which is until November 2, 2018, subject to the provisions of the 1987 Philippine Constitution and applicable laws, rules and regulations. The renewed franchise shall be in effect for a period of 25 years, and shall be deemed ipso facto revoked if EBC fails to operate continuously for two years. Also, the renewed franchise allows EBC to construct, install, establish, operate and maintain for commercial purposes and in the public interest, radio and/or television broadcasting stations, where frequencies and/or channels are still available, including digital television and/ or radio systems, through microwave, satellite or the use of any new technologies in television and radio systems, with the corresponding technological auxiliaries and/or facilities, special broadcast, and other program and distribution services and relay stations. The facilities of EBC shall be constructed and operated in the minimum interference on the wavelengths or frequencies of existing stations or other stations, which may be established by law, without in any way diminishing its own right to use its selected wavelengths or frequencies and the quality of transmission or reception thereon as should maximize rendition of EBC’s services and or availability. The measure requires EBC to secure from the National Telecommunications Commission (NTC), the

Rail fare-hike debate shifts to SC Continued from A1

the militant group read. Bayan also questioned the power of the transport chief to execute a fare increase, saying that Abaya has no quasi-judicial power to determine fare rates for the LRT and the MRT. The Department of Transportation and Communications order called for the implementation of an P11 base fare plus P1 per kilometer formula for fares at the LRT Lines 1 and 2 and the MRT. Hence, a ride on LRT 1, from Baclaran to Roosevelt, now costs P29, while a one-way trip on LRT 2, from Santolan to Recto, is now at P24, and a trip on MRT 3, between North Avenue and Taft Avenue, now costs P28. Before the new matrices were implemented, a ride on the MRT 3 ranged from P10 to P15, while a ride on LRT 1 and LRT 2 ranged from P12 to P15 and P20, respectively. DOTC Spokesman Michael Arthur C. Sagcal defended his agency’s decision, saying the fare increase will result in better train services.

Euro. . . Continued from A8 to say.” European consumer prices probably dropped 0.1 percent in December from a year earlier, according to a Bloomberg survey. That would be the first decline since October 2009, when the economy was struggling to recover from a slump after the financial crisis. German inflation and Spanish unemployment figures are due on Monday.

Bond yields

The pound declined to its weakest level since August 2013, while the Swiss franc lost 0.3 percent and the Australian dollar depreciated 0.5 percent. The Bloomberg Dollar Spot Index, which tracks the US currency against 10 major counterparts, added 0.3 percent, heading for its highest close since March 2009. Australian 15-year yields fell to

3-DAY EXTENDED FORECAST JANUARY 6, 2015 | TUESDAY

TODAY’S WEATHER

JAN 7 JAN 8 WEDNESDAY THURSDAY

METRO MANILA

21 – 30°C

TUGUEGARAO

20 – 28°C

21 – 28°C

(AS OF JANUARY 5, 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 rains and showers.

LAOAG

BAGUIO

LAOAG CITY 18 – 29°C

TUGUEGARAO CITY 20 – 28°C

SBMA/ CLARK

BAGUIO CITY 12 – 23°C SBMA/CLARK 21 – 30°C

an unprecedented 2.97 percent and Japan’s five-year yield dropped to a record 0.025 percent. Bonds in the Bank of America Merrill Lynch Global Broad Market Sovereign Plus Index had an effective yield of 1.30 percent on January 2, approaching the low of 1.29 percent set in 2013, based on data going back to 1996. Consumer staples and telecom stocks led declines on the MSCI Asia Pacific Index, which dropped 0.8 percent. The Kospi lost 0.6 percent in Seoul and Taiwan’s Taiex Index retreated 0.4 percent. Japan’s Topix fell 0.5 percent. Hong Kong’s Hang Seng Index dropped 0.6 percent. The Shanghai Composite extended its rally over the past six months to 63 percent. A gauge of Chinese energy shares rose 8.9 percent on Monday, the most in more than six years, with PetroChina Co. and China Shenhua Energy Co. soaring

JAN 9 FRIDAY

TAGAYTAY CITY 18 – 27°C

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Crude falls

West Texas Intermediate (WTI) crude slipped to $51.74 a barrel after capping a sixth straight weekly loss on January 2. Brent crude in London fell 1.8 percent to $55.43 per barrel, with both blends headed for their lowest settlement levels since 2009. WTI and Brent tumbled more than 40 percent last year as the highest US oil output in about 30 years collided with slowing global demand and Opec’s reluctance to reduce its own production. Iraq plans to boost crude exports this month, according to the oil ministry. Gold for immediate delivery gained to $1,196.26 an ounce. Silver advanced 2.2 percent to $16.0721 an ounce in the spot market, while platinum climbed 1.3 percent. Bloomberg News

JAN 7 JAN 8 WEDNESDAY THURSDAY

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JAN 13 -0.21 METER 12:53 PM 5:46 PM Partly cloudy to cloudy skies with isolated rain showers and/or thunderstorms

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Sagcal also said the DOTC is ready to face the petitioners at court. “We will argue our case before the Supreme Court and we are confident that our actions are fully in accord with the law,” he said. “We respect the freedom of those groups to express themselves and file appropriate cases, but these will not stop us from our modernization and improvement programs for the LRT and MRT systems,” Sagcal added. Despite mounting protests, Malacañang remained firm in cutting the P10-billion annual subsidy for the MRT, saying the transport system being supported by taxpayers’ money benefits only commuters in Metro Manila. “This is an issue which is Metro Manila-centric. Certainly, there is unhappy, displeasure or dissatisfaction with riding passengers,” Palace Spokesman Edwin Lacierda said. Lacierda said the subsidy removed from the MRT will be allocated to other regions of the country. He also assured that the government is bent on improving the services of the MRT and its rehabilitation will push through this year.

DIFFUSED TAIL-END OF A COLD FRONT AFFECTING MINDANAO. NORTHEAST MONSOON AFFECTING LUZON.

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METRO MANILA 20 – 30°C

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Palace ignores Trillanes, to pursue peace talks with communist rebs By Butch Fernandez

ALACAÑANG, ignoring Sen. Antonio Trillanes’s warning against resuming talks with communist rebels, on Monday affirmed its readiness to reopen negotiations for a lasting cease-fire with Communist Party of the Philippines-New People’s Army-National Democratic Front leaders. But President Aquino’s chief Spokesman, Secretary Edwin Lacierda, clarified that the government panel would sit down for a new round of peace negotiations with the CPPNPA-NDF, “only if they are timebound and doable.” “We have always said we are open to resuming talks, provided that we avoid the mistakes of the past,” Lacierda told Palace reporters at a news briefing on Monday. “And, I think, that’s not an unreasonable request,” he quickly added. And, even if the resumption of peace talks with the rebels do not quickly materialize, Lacierda said the Aquino administration would simply continue to do its mandate to serve the people. “As far as we are concerned,

our burden is to uplift the concerns of every Filipino,” Lacierda said, adding that “our concern is to make sure that the welfare of every Filipino, whether you’re a rebel, whether you’re a civilian, or whether you’re a law-abiding citizen is taken cared of.” He said this simply means that, “If they [CPP-NPA leaders] are not willing to talk peace, we are going to continue to go and go to areas where we can help the people [with the] poverty-intervention programs that we have, other alleviation measures that we can do to help the poor.” At the same time, Lacierda assured that the Armed Forces will, likewise, proceed to enforce the government’s Internal Security Plan to protect unarmed civilian communities from rebel forces. He noted that both the government and the rebels are “coming from a situation where there are no peace talks...so we’re status quo right now.” But Lacierda also admitted that “there are friends of the [peace process,] who are channeling back and forth to see if there is a possibility of restarting the peace process.”

Comelec’s P1.2-billion PCOS contract with Smartmatic faces court challenge

By Joel R. San Juan

LECTION watchdog Citizens for Clean and Credible Elections (C3E) said it is ready to stop the Commission on Elections (Comelec) from eventually awarding the P1.2-billion contract for the repair and refurbishing of the 80,000 voting machines that were used in previous elections.

“We are going to the Supreme Court as soon as it seems there is no more chance to be heard in the Comelec,” C3E Coconvener Hermenegildo Estrella said. C3E’s statement was issued in response to reports that the poll body has already decided to do away with the bidding for the P1.2-billion contract for the repair of the 80,000 Precinct Count Optical Scan (PCOS) machines in favor of Smartmatic.

However, Comelec Chairman Sixto Brillantes immediately denied that the poll body has already decided to award the P1.2-billion contract to Smartmatic. Brillantes said the Comelec awarded only the first portion, which is the P300-million maximum contract, and not the entire P1.2-billion contract. The first portion, according to Brillantes, refers to P300-million

Premier airport ready for pope’s arrival By Recto Mercene

HE Manila International Airport Authority (Miaa) on Monday announced that it is ready for the arrival of Pope Francis on January 15, even as it warned passengers leaving or arriving on this date and on January 19, the day of the pope’s departure for Rome, to contact their airlines or travel agents for their revised flight schedules. “As we have earlier announced, there will be no flights arriving in all Ninoy Aquino International Airport [Naia] terminals from 2 to 7 p.m. on January 15 and 6 to 10:30 a.m. on January 19, 2015,” Miaa General Manager Jose Angel Honrado said. Honrado said this consensus was reached with the airlines in a series of consultative meetings, following the announcement of the Pope’s Visit National Organizing Committee that some major roads around the Naia Complex will be closed on the arrival and departure days of the pope. Representatives from government agencies operating out of the Naia were also present during all the meetings, according to the Miaa Me-

dia Affairs Division (MAD). Following the consultations, the Civil Aviation Authority of the Philippines issued a Notice to Airmen announcing the suspension of arriving flights on the dates mentioned. However, the Caap said, flights related to the pope’s visit will continue to operate. Honrado said the Notam shall guide the airline operators in revising their flight schedules or adopting other options that passengers with bookings on these days may take. “The prerogative to cancel, advance, delay or divert flights rests on the airline companies,” Honrado said. “Whatever it is, Miaa and other

‘Moros living outside Bangsamoro entity should be represented’

HONRADO: “As we have earlier announced, there will be no flights arriving in all Ninoy Aquino International Airport terminals from 2 p.m. to 7 p.m. on January 15 and 16 to 10:30 a.m. on January 19, 2015.”

USLIM leaders gathered on Monday in a discussion to convey their call for a sectoral representative of Muslims residing outside the Bangsamoro entity. Led by 1-Bangsamoro movement, the event served as a venue for leaders to justify their recommendation for the Bangsamoro basic law (BBL). Among the factors that support their recommendation are said to be the large number of Moros living outside the Bangsamoro entity, who have found residence in some parts of Luzon and Visayas and also the “big contribution” of the sector of Moros. Apart from having a sectoral representative, Muslim leaders also urged for the creation of Shari’ah courts in certain areas in the country, where there is an “appreciable” number of Muslims. This is due to some cases of Muslims, which are only covered by the Shari’ah law, they said. Adding to their list of demands for the BBL is the conduct of special voters’ registration for Muslims outside Mindanao and also for Moro overseas workers. In the House of Representatives, only two committee hearings are left before the panel’s voting on the BBL bill. “We are looking forward to the passage of BBL before the year ends,” Sultan Mohammad Bano of the National Federation of Police-Accredited Muslim Nongovernment Organizations said. PNA

government agencies in Naia will support them. The Civil Aeronautics Board has cleared the airlines of any liability pertaining to the consequential effect of the suspension of flight arrivals on the two days.” Honrado added that the Miaa has scheduled a final consultative meeting with the airlines and government agencies on January 7, where he hopes to obtain information as to the revision preferences being considered by passengers, who will be affected, or the airlines’ plan to implement revised schedules. Since departure f lights will proceed on the 15th and the 19th, Honrado reminded passengers with departing flights on these days to be at the airport much earlier than the usual three hours before a flight. “It would be best for passengers to make their way to the airport way ahead before the roads within the Naia complex start to close at 3pm on January 15, and at 7am on January 19,” Honrado said. “On these days, the Naia Complex will only be accessible via South Luzon Expressway through Bicutan, Alabang and Sucat Roads.”

Owing to the road closures, Naia Terminals 3 and 4 will be isolated since the entire stretch beginning from Sales Avenue fronting Terminal 3 all the way to the Domestic Road fronting Terminal 4 will be closed and will not be accessible to vehicular traffic,” Honrado said. On the other hand, for the benefit of Terminals 3 and 4 passengers with departing flights on these days, Miaa will set up a drop-off pointcum-staging area for them at the Naia Terminal 1 Parking B. He said the passengers shall be initially gathered there and initial security procedures will be in place to secure both passengers and their baggage. From Parking B, the passengers will be taken by the Miaa shuttle buses to Terminals 3 and 4 through the airside. “The Miaa also encourages a dropand-go system for those who will bring their passengers to Naia.” Honrado added that the Miaa shall also close Naia Terminal 3 arrival and departure lobbies to nonpassengers during the entire day on January 15 and from 12 midnight to 12 noon on January 19.

‘BBL crucial to Mindanao economic development’ By Manuel T. Cayon Mindanao Bureau Chief

Editor: Dionisio L. Pelayo • Tuesday, January 6, 2015 A3

AVAO CITY—The enactment, or rejection, of the body of laws governing the new Bangsamoro political unit would be crucial to the economic projections of Mindanao, the government’s socioeconomic planning unit for the island, said. “Aside from having the highest incidence of poverty and slowest growth among all regions, the Moro areas are also the areas with almost all sordid situation: very low ratio of physicians, or nurses, or midwives to population,” said Romeo Montenegro, chief of the international investment and public affairs division of the Mindanao Development Authority (MinDA). Montenegro said the central and western regions of Mindanao, the areas that are dominantly Moro, “are also the areas where we have experienced decades of conflict.” “That is why it is difficult to bring Mindanao to the next level [of economic growth without bringing these areas to the road to peace],” he told a regular Monday news briefing. Montenegro said the signing of the Bangsamoro basic law into a law is one of the crucial elements that would propel Mindanao into steadily increasing growth during the next years. Among the other former disadvantageous positions that have turned positive for Mindanao was its electric power supply, where at least

three coal-fired power plants with minimum aggregate capacity of 900 megawatts would come into full operation within the next three years, with the 300-MW plant in Davao City to start streaming to the Mindanao grid by the last quarter of this year. He said infrastructure constructions have also intensified, and disclosed that the Department of Public Works and Highways would be spending this year its biggest allocation on infrastructure in Mindanao. The DPWH has already allocated 30 percent of its budget to Mindanao, which Montenegro said has vastly improved road networks and sea and air ports. These steady infrastructure spending and increasing attraction of Mindanao to investments have led to the highest growth in 2012 at 8.1 percent, “much higher than the national growth of 7 percent that year.” If not for the Zamboanga siege by armed followers of the Moro National Liberation Front and the Typhoon Pablo late in the year, “the island could have improved on its still high 6.3percent growth.” “We expect 2014 to hit 7-percent growth,” he said. “We are highly optimistic for 2015, because of the predictable coming in of more corporate investments, not only on agribusiness which is the strength of Mindanao, but also of the needed big investments in manufacturing,” he said.

contract for diagnostics examination and minor repairs. On the other hand, the Comelec chairman said the second stage of the contract, worth P900 million, will be used for the actual repair and maintenance, while the third stage, which would be worth another P300 million, is for the upgrade of the machines. Brillantes stressed that public bidding may still be conducted for the second portion depending on the results of the first stage of repairs. But, the C3E warned that it will exhaust all legal remedies to prevent the Comelec from giving the contracts to Smartmatic. “We will use all available means to stop the Comelec from further rewarding the inefficiency of Smartmatic,” Estrella said. Estrella said the poll watchdog group and their allies are strongly opposed to the reported decision of the commission en banc to extend the poll body’s warranty contract with Smartmatic-TIM, instead of holding a public bidding.

“We are manifesting our strongest rejection of this callous and despicable act,” he added. He said this is because they believe that Smartmatic has already lost control and ownership of the PCOS machines when the units were sold to the Comelec in 2012. Citing provisions of the 2012 Deed of Sale between Comelec and Smartmatic, C3E pointed that “the control and ownership of the hardware and software shall be transferred to the buyer upon acceptance per batch of 20,000 units during the Hardware Acceptance Process.” Estrella said this makes the threat of legal actions by Smartmatic-TIM for intellectual-property violation being committed by the Comelec when it contracts a different service provider, “false and bereft of basis.” “The machines belong to the Comelec…. As the owner of the machine, opening it for repairs is not a violation [of the law]. An owner of a Toyota vehicle can opt to have his car repaired in any shop or by any mechanic he prefers,” Estrella added.

Lawmaker wants to define any form of smuggling as economic sabotage

BILL seeking to define any form of smuggling, which involves goods with an aggregate value of P1 million as an act of economic sabotage, has been filed at the House of Representatives. In House Bill (HB) 5179, Unang Sigaw Rep. Estrellita B. Suansing of Nueva Ecija noted that the country has constantly grappled with the problem of rampant smuggling. HB 5179, now pending at the Committee on Ways and Means chaired by Liberal Party Rep. Romero S. Quimbo of Marikina City, seeks to amend Presidential Decree (PD) 1464, otherwise known as “The Tariff and Customs Code of the Philippines,” to define smuggling as an act of economic sabotage and provide the appropriate punishment and penalties thereof. The bill seeks to amend Section 3514 of PD 1464, so that economic sabotage will refer to “any and all activities that undermines weaken or render into disrepute the economic system or viability of the country or tend to bring about such effects, for the purpose of this Act, any violation of Sections 3601 and 3602 of this Act, which involves goods or articles with the aggregate value of P1 million, shall constitute an economic sabotage.” The bill also seeks to amend Section 3601 of the Tariff and Customs Code of the Philippines, pertaining to unlawful importation, and Section 3602, pertaining to various fraudulent practices against customs revenue, so that any violation of these provisions that constitute an economic sabotage, as defined in the law, shall be punished as follows: Fine equal to twice the fair market value of the articles involved; Fine equal to the aggregate amount of the taxes, duties and other charges avoided; Imprisonment of a minimum of eight years and one day up to life imprisonment; and Confiscation of the articles involved. If the violator is a juridical entity, the penalty of imprisonment shall be imposed on its president and other responsible officers. In addition, the business permits and licenses of the business entity shall be revoked or cancelled. The broker of the violator shall be punished as a principal, the bill provides. In filing the bill, Suansing said, “Considering the detrimental effect of smuggling on the country’s

SUANSING: “Aside from the revenue losses, smuggling constantly poses as a hindrance to the growth of domestic industries.”

economy and the problems it presents to the Filipino people, HB 5179 seeks to define any form of smuggling, which involves goods with an aggregate value of P1 million, as an act of economic sabotage. It aims to ward off such illegal activities by providing appropriate punishments and penalties.” She said smuggling has plagued the national economy, depriving the country of its much-needed revenue and crippling key programs of the government. “Aside from the revenue losses, smuggling constantly poses as a hindrance to the growth of domestic industries. It fosters unfair competition with the local producers and manufacturers, including licensed distributors, wholesalers and retailers,” Suansing added. The lawmaker also cited a report of the Global Financial Integrity, which pointed out that the Philippine government has lost at least $19.3 billion since 1990 in tax revenue due to customs duties-evasion through import under-invoicing alone. Moreover, the report said that, combined with an additional $3.7 billion in tax revenue lost through export under-invoicing, the government has lost at least $23 billion in customs revenue due to trade misinvoicing since 1990. Suansing said the report further said that, in 2011 alone, the country lost an estimated $3.85 billion in tax revenues due to smuggling. “The report described the revenue loss as more than double the size of the fiscal deficit and also constituted 95 percent of the Philippines’ total government expenditures on social benefits during the same year. In the 52-year period covered by the study, the Philippines lost $177 billion through capital flight according to the report,” she said. Meanwhile, Suansing said the Bureau of Customs reportedly did not meet its collection target even with the reported gains in the first half of 2014, as compared to the same period last year. Jovee Marie N. dela Cruz

Economy

A4 Tuesday, January 6, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

ADB extended $555-M loan for 8 PHL projects in 2014

By Cai U. Ordinario

HE Asian Development Bank (ADB) has approved a total financing of at least $555 million for eight Philippine project loans and grants in 2014.

Data obtained from the ADB web site showed the Senior High School Support Program will receive the largest chunk of ADB’s assistance with a $300-million loan. The project, which was approved on December 15, 2014, aims to improve teaching and learning at the secondary education level. The project that was approved with the second largest assistance from ADB is the Local Government Finance and Fiscal Decentralization Reform Program-Subprogram 1, which will receive $250 million worth of technical assistance. The project aims to help improve

the efficiency and transparency in local government units (LGUs). The project will also include fiscal management for LGUs. Other projects that were approved by the ADB last year included a nonsovereign financing for the MactanCebu International Airport Passenger Terminal Project. However, as of press time, the BusinessMirror could not confirm the amount extended by ADB for the project. The expansion of the MCIA is one of the major public-private partnership (PPP) projects of the Aquino administration. The P17.22 billion worth project

was awarded to GMR Megawide Cebu Airport Corp. in 2013. Another project included in the list is the Strengthening Evaluation and Fiscal Cost Management of PPPs Project that will receive a $2-millionworth grant from ADB. The project aims to improve the financial sustainability infrastructure investments made through PPPs by strengthening the National Economic and Development Authority’s capacity to appraise PPP projects. Meanwhile, other projects approved by the Manila-based multilateral development bank include the Enhancing Rural Enterprise and Rural Employment Project and Metro Manila Water and Sanitation Development Project that will each receive an assistance of $1 million. The project outputs for the Enhancing Rural Enterprise and Rural Employment Project is still being drafted. According to ADB documents, the design will be conducted this month until June 2015.

The Metro Manila Water and Sanitation Project will finance priority water and sanitation investments of Metropolitan Waterworks and Sewerage System. It will also contribute to improving the living and health conditions in the National Capital Region, which accounts for 33 percent of the country’s gross domestic product. The other projects on the list are Teach for the Philippines Project and the Strengthening Treasury Operations and Capital Market Reform Project that will receive an estimated $500,000 worth of technical assistance from ADB. The Teach for Philippines Project aims to improve the country’s progress in meeting the education-related Millennium Development Goals. The project will focus on regional and income-based inequalities. The Strengthening Treasury Operations and Capital Market Reform Project seeks to improve the Bureau of the Treasury staff capacity in dealing, processing and asset management.

Manila suspends classes, city hall work for Feast of Black Nazarene

anila Mayor Joseph Estrada has ordered the suspension of classes, city hall work on Friday, the Feast of Black Nazarene. “Classes for all levels, in all universities, colleges and schools in the city of Manila is suspended on January 9, 2015, Friday,” Executive Order (EO) 01, signed by Mayor Estrada on Monday, said. The EO does not cover work in national government offices and private offices, or in select frontline and security services “Work is suspended on January 9, 2015, Friday, in all departments, offices and bureaus in the city government of Manila, except those involved in the maintenance of peace and order, traffic enforcement, disaster and risk-reduction management, health and sanitation and in the issuance of business permits and collection of taxes,” it said. The suspension of classes was based on the recommendation of various offices considering the thousands of pilgrims the city is expecting to participate in the procession of the Black Nazarene. “The Traffic Management Committee, the Manila Traffic and Parking Bureau, the Manila Disaster Risk Reduction Management Office and the Manila Police District have recommended the suspension of classes for all levels in all universities, colleges and schools in the city of Manila, as well as the suspension of work in the City Government Offices to ensure public order safety and convenience and to reduce traffic congestion during the occasion,” the EO read. PNA

news@businessmirror.com.ph

CCCI: 2014 another banner year for Cebu biz chamber

EBU CITY—An official of the Cebu Chamber of Commerce and Industry (CCCI) said 2014 could be considered another banner year for the organization. In her year-end report, CCCI President Ma. Teresa Chan said the chamber became an important voice of the local business community when it became a member of several government committees. Chan said CCCI was invited to become member of the Metro Cebu Development Coordinating Board, chairman of the economic sector committee of the Cebu City Development Council, member of the SmallMedium Enterprise Development Council, the Solid Waste Management Board, Rivers Management Council and the Cebu City’s South Road Properties Joint Venture Committee. Chan said the CCCI was also invited to chair the infrastructure committee and vice chair of the investment board of the Cebu Provincial Government. They also hold memberships in the Regional Development Council 7, its Economic Sector Committee and the Regional Peace and Order Council. CCCI also received accreditation from the Department of Public Works and Highways. Chan said they became part of so many committees that they had to decline participation to some, such as invitations to become part of bids and awards committees of different government agencies because they felt they could no longer give enough time to attend to the responsibilities. Chan said being asked to be part of these bodies means local government units recognize CCCI’s role as liaison and channel for communication of the business community in Cebu.

CCCI, she said, was geared to advance the well-being of Cebu by initiating, submitting, recommending and assisting in the formulation, development, implementation and evaluation of plans, policies, programs and activities that will promote and enhance the interests and growth of private businesses. Chan said they also facilitated international events, projects and inbound missions last year such as hosting the World Economic Forum’s young global leaders event, liaisoning with international humanitarian aid agencies for the recovery and rehabilitation of typhoon-stricken northern Cebu. They have also been active in the preparations for the hosting of the Asia-Pacific Economic Cooperation meetings in coordination with the Cebu Provincial Government and the Department of Foreign Affairs. The CCCI also held trade missions in Nigeria, Sabah, Turkey, Canada, Israel, Vietnam and Indonesia. Chan said these trade missions have helped local enterprises in their partnerships and strengthened their relationships with international business chambers. Chan said business chambers based in Singapore and Thailand have signified interest in sending delegates to this year’s Cebu Business Month in June and participate in the exposition during the activity. CCCI has 708 member-companies, with an addition of 47 last year. Chan said 2014 was a good year for membership because aside from the addition of member-companies, existing members that have not been as active in the past began paying attention and paying membership dues once again. PNA

It’s Filinvest vs Megawide again in ITS Southwest project bidding By Lorenz S. Marasigan

A worker works overtime to meet the spike in the demand for printed Black Nazarene T-shirts ahead of the culmination of the Black Nazarene feast on Friday in Quiapo, Manila. Nonie Reyes

ROPERTY developers Filinvest Land Inc. and Megawide Construction Corp. will once again meet on the battlefield of the government’s Public-Private Partnership (PPP) Program after they were deemed qualified to officially vie for the P2.5-billion Integrated Transport System (ITS) Southwest Terminal deal. Transportation Spokesman Michael Arthur C. Sagcal said the two firms’ qualification documents passed the evaluation conducted by the agency’s bids and awards committee. “Our bids and awards committee will now proceed to the opening and evaluation of technical proposals,” he said. Out of a dozen potential investors that expressed their interest in the project, only Filinvest and Megawide joined the long-delayed auction, submitting their offers before the

agency last month. The two groups last year fought over the P17.5-billion Mactan-Cebu International Airport Expansion deal, with one party accusing another of illegally bidding for the said project. The airport contract was then awarded to top bidder GMR-Megawide Cebu Airport Corp., which is now operating and maintaining the aviation hub in Cebu. After battling for the airport deal, the two camps will now wage war for the contract to build an intermodal terminal near the Manila-Cavite Toll Expressway (Cavitex) to connect passengers coming from Cavite to urban transport systems in Metro Manila. It will include a passenger terminal building, arrival and departure bays, public information systems, ticketing and baggage handling facilities and park-ride facilities. The government has awarded eight contracts since the infrastruc-

Good governance bedrock of sustainable development, economics professor says By Rizal Raoul Reyes Correspondent

N this age of environmental degradation, global warming and climate change, the alternative is to pursue sustainable development. But before pursuing the path toward sustainable development, a country must also, at the same time, pursue good governance. “Good governance is essential for any institution to work, or any organization for that matter. Assigning and electing abusive government officials do not only have hazardous repercussions on government efficiency, but also affects investor confidence and aggregate productivity, said Edgardo Manuel Jopson, a professor of economics at the De La Salle UniversityManila in an e-mail interview with the BusinessMirror. In expounding his viewpoint, Jopson cited the work of economists Daron Acemoglu and James Robinson called “Why Nations Fail.” In order to achieve sustainable development, Acemoglu and Robinson pointed out that political and economic institutions of nation should have an inclusive—instead of an extractive group—to ensure the path of growth

is equitably distributed. On the other hand, the authors said an extractive act hinders development. Corruption, for example, is a form of an extractive act. The authors define an extractive institution as a “small” group of individuals who do their best to exploit— in the sense of Marx—the rest of the population, and while “inclusive” institutions in which “many” people are included in the process of governing, hence the exploitation process is either attenuated or absent.” The recent controversies on the Priority Development Assistance Fund and the Disbursement Accelerated Program are very good references in the study of extractive process. For Acemoglu and Robinson, political institutions must be solid and centralized to ensure economic success and provide basic public services including justice, the enforcement of contracts and education. Furthermore, he said a government must be concerned on misallocation of resources because this would cause market failure which will have strong economic repercussions, such as shortage of resources in the fight against poverty alleviation, among others. “This, in turn, would have a dire effect on the aggregate economy

as markets will be mispriced, making them prone to higher risk, dispelling potential investment and market credibility,” he said. With the absence of good governance, Jopson stressed the economy itself will be inefficient. He said providing opportunity for growth should be included in the march toward sustainable development. “If the government becomes a hindrance to such, then the disparity between the elite and poor will widen, which is not sustainable,” he said. In general, Jopson said a pro-poor government is usually concerned with providing sustainable employment for everyone in the economy, as well as improving the living conditions of every household. However, he said this becomes a challenge when a mismatch between academe and industry arise. For instance, college graduates are facing challenges to find jobs because there is little or no need for their skills in the market. In response, the government and private sector recently formed the National Industry-Academe Council to address the mismatch in the country. The low amount of foreign direct investment is another challenge the country needs to address immediate-

ly because it is the most important element in achieving higher employment and growth. “Basically, investment is the key to providing opportunities for commerce and trade to flourish in the economy, which, in turn, hires labor. Without making the county more attractive to domestic and foreign investors, then it would be difficult for the country to improve further. Actions that the government may do in order to solve these problems is to increase its expenditure on basic services (education and health) and infrastructure. It is also equally important to make the investment climate more conducive to investors by improving the processes involved in setting up a business,” he said. As far as the working class is concerned, Jopson said they have the right to pursue a dignified existence as long as it is within the bounds of respect for human rights. Further, Jopson remarked that market forces will eventually adjust in case there are violations committed against labor organizations. For as long as the market exists, and there are individuals who are willing to work under such conditions, Jopson said the workers in the long run

who push that their standard of living must improve, without any incentive for firms to do so, may lose their jobs. “This move is not without danger in the aggregate economy, as well; an increase in wages may drive away investors simply because the price of labor has now increased,” he pointed out. Meanwhile, an increase in the purchasing power of workers will not only increase their productivity but also their consumption. Based on the Keynesian framework, Jopson said it is well known within the bounds of the Keynesian framework that the inevitable effect of increased wages results to inflation, but since prices are sticky, this move may even improve the aggregate economy due to increase in consumption. He said the Philippines will face a big challenge to pursue the green agenda. Jopson said the country lacks the technological capabilities of adapting green technology for now. However, Jopson said this does not mean the country should not participate in the green movement right now. The country can contribute in the green movement by funding its research and being part of the development team in order to make green technology more sustainable.“

“But green technology, in its current state, cannot be fully utilized by the country as of now. At least for some private institutions, they are able to invest in green technology which could be a source of best practices for other institutions,” he said. On the controversial population issue, Jopson stressed to look at both sides and consider the advantages and disadvantages of an increase or decrease in population. In practice, however, Jopson said the best way to address the population issue is to provide investments in human capital which include education and health. Currently, Jopson said the biggest problem in the population issue is rooted on the fear that the additional individuals will be less productive than before that will “consume” resources available in the economy. “By making these additional people more productive in the economy, then an increase in population is not really a bad thing. Another threat of overpopulation is the supposedly inevitable increase in population density in urban areas. If businesses and job opportunities were decentralized from Metro Manila, then the dangers of an increase in population is still quite far off,” he said.

news@businessmirror.com.ph

Economy BusinessMirror

Tuesday, January 6, 2015 A5

Global glut won’t halt local oil drillings and explorations–DOE

ompanies are not canceling oil-rig drillings and explorations amid the continuous slide in global oil prices, according to Energy Undersecretary Zenaida Monsada.

Not for kids

Children attempt to tinker with a cluster of water meters installed at a residential area in Kamias, Quezon City, amid the reported increase in monthly water bills imposed by Metro Manila water concessionaries Maynilad and Manila Water. Nonoy Lacza

Meralco exec sees ‘challenging’ 2015 By Lenie Lectura

top official of the Manila Electric Co. (Meralco) said 2015 is going to 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,” Meralco President Oscar Reyes said in an interview. While 2014 was a “relatively good year” for Meralco because of stable power supply and lower rates, Reyes urged industry players to work together to ensure a reliable power supply during those months when demand is at its peak. “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. These all happened in 2014. We hope that everyone will do its part to ensure supply availability this year,” Reyes explained. For Meralco’s part, the utility firm continues to entice companies to sign up with its Interruptible Load Program (ILP), a government initiative meant to address the looming power shortage. Meralco utility economics head Lawrence Fernandez said the company will continue to invite captive and contestable customers to participate in the program and is targeting to formally sign up the ones currently under negotiations before January 31. As of December 5 last year, 141 companies have signed up for the pro-

gram. These represent 593 megawatts (MW) of committed interruptible load (CIL) capacity. Of the total number if ILP participants, 105 are retail electricity suppliers (RES) customers and 36 are Meralco customers. The RES have committed a total of 402 MW of capacity and 191 from Meralco customers. ILP works by calling on business customers with loads of at least 1 MW to run their own generator sets, if needed, instead of drawing power from the grid. With the ILP, power supply from the grid that will not be consumed by participating customers will be available for use by other customers within the franchise area. Through this, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply during the anticipated power crisis this year. Meralco also continues to source additional power from power producers to mitigate its exposure to the Wholesale Electricity Sport Market. The projected power shortage for two weeks in April is estimated to reach 678 MW. This translates to a one-hour rotating brownout per day for two weeks. The imminent threat of electric power shortage in the months of 2015 is a threat to the country’s economic and social life. The power crisis would be brought about by higher demand, the Malampaya gas facility shutdown, the coming El Niño months and the Pagbilao 1 facility shutdown in May.

Clark gears up for Apec-SOM1

LARK FREEPORT, Pampanga— The Clark Development Corp. (CDC) is gearing up for the Asia Pacific Economic Cooperation (Apec) Senior Officials’ Meeting inside this Freeport this month. CDC President Arthur P. Tugade on Monday said that among the Apec requirements include the convention hall and hotel rooms to host the delegates that will arrive during the First Senior Officials’ Meeting and Related Meetings (SOM1) from January 26 to February 7. Tugade also said that Clark-Apec applications are now available on all Android phones or tablets. This would allow the android users to keep track on the Apec events in Clark, he said. He added that Widus Hotel and Casino had allotted one tower hotel and would request for another 30 rooms. Oxford and Casino Hotel is also setting aside two floors, which are expected to be

completed before the Apec meet in Clark. He also thanked the new owners of the newly renovated Oxford Hotel for expediting the renovation and rehabilitation of the hotel. Earlier the Oxford hotel agreed to invest P200 million for the beautification and renovation of the hotel and its grounds. Fontana Hotsprings and Leisure Parks has also reported the nearing completion of its convention hall that can accommodated more than 1,800 people in a seating capacity. Fontana has also improved some of its villas in preparation and accommodation of Apec delegates during the SOM1 meeting here. Other hotels with improved rooms include Holiday Inn Clark and Stotsenberg Hotel. Tugade said that the P15.14-million Bayanihan Park Rotunda in Balibago, which would serve as the main entrance to the Freeport zone, is expected to be completed before the Apec. PNA

“Thankfull no, oil rigs are not closing in the country,” Monsada said. Currently, there are three petroleum production sites in the country, namely, Malampaya, Galoc and the Cadlao fields, which are all based in Palawan. The three fields are projected to have an monsada output of 43,190 barrels per day by 2018, according to Fitch Group’s Business Monitor International.

Other areas, run through awarded service contract operatorships, are still at exploration stage. It involves the study of the area to ensure the highest production of oil and gas. Monsada assured that projects in the exploration stage are also not being canceled due to the global glut that originated from increased shale oil production and the Organization of Petroleum Exporting Countries’ decision not to cut supply. Moreover, the energy undersecretary added that the energy department hopes that the interest for the Philippine Energy Contracting Round 5 (PECR 5) will still be converted to applications from international companies despite the continuous fall of oil prices. PECR 5 is the bidding for service contracts on potential petroleum and coal-rich sites. PNA

Opinion BusinessMirror

A6 Tuesday, January 6, 2015

editorial

The failure of govt subsidies

HE fare increases for the Light Rail Transit Lines 1 and 2 (LRT-1 and LRT-2) and the Metro Rail Transit Line 3 (MRT3) come down to one issue: government subsidies. Most of the other arguments both for and against the increase are just noise.

“Why should taxpayers outside of Metro Manila pay for a rail system that they do not use?” is one of our favorites. By the same logic, why should taxpayers in Metro Manila pay for national roads in provinces hundreds of kilometers from the metropolitan area? Both arguments are nonsense since a nation’s economy and infrastructure is completely connected one way or another. The justification for the transit rail fare increases is that the actual cost of taking a passenger from one point on the system to another is not being covered by the amount of the fare. However, no one really knows the actual cost for that transportation. Even the Department of Transportation and Communications (DOTC) uses ambiguous terms as the “government subsidizes around 60 percent of the cost for each LRT-1 and LRT-2 passenger and around 75 percent of each MRT-3 passenger.” The word “around” can cover a multitude of financial sins and absolutely would not be accepted in the private sector. But the real issue and the real problem is the government subsidy. Government subsidies of any price paid by the consumer distort the market. Indonesia’s fuel subsidy is a classic example. The fuel subsidy will cost Indonesia $20 billion this year, which is one-fifth of the country’s national budget and the artificially low price of gasoline has made Indonesia one of the least fuel–conservation conscious countries in the world. The Philippine government has been subsidizing the MRT at about P6-7 billion a year. Some say that this is because of a bad public and/or private sector operation agreement that should have been voided. But, if true, what it really proves is that hybrid projects like these are inherently flawed. The private sector operates within market forces. The government operates within political forces. You cannot mix apples and mangoes successfully. The subsidization program is a failure both financially and politically. The consumer has suffered in ways that would not have occurred if the rail system were totally private. The taxpayers have suffered supporting a system that has not served the train passengers well. If the government builds, owns, operates, and subsidizes prices, at least we know what we are getting into both good and bad. The same is true for private sector ownership. But the current situation seems to gives the public only bad results and this system should be stopped.

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Manny B. Villar

THE Entrepreneur Conclusion

Growth Drivers remain intact

ECENT moves by the government support my expectations of increased public spending in the next two years, which should help reverse the slowdown in economic growth in 2014. The P2.606-trillion national budget for 2015 will boost spending for infrastructure, including the rehabilitation of Eastern Visayas and other areas damaged by natural disasters. The government also hopes to accelerate the implementation of projects under the Public-Private Partnership (PPP) program, including eight projects worth about P625 billion. Increased infrastructure spending will also contribute to the growth of the BPO industry, as it will open more areas outside Metro Manila for development as BPO hubs. This, in turn, will boost the real estate industry by increasing demand for office buildings. The government says the tourism

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industry, which also stimulates the real estate industry and generates a lot of employment, is already recovering from the setback caused by the natural calamities in 2013. Tourist arrivals for 2014 are expected to reach 6.8 million and will continue to increase in the next two years to reach the target of 10 million by 2016. Remittances from overseas Filipinos, both workers and immigrants, also continue to grow despite conflicts in some foreign countries. Data from the Bangko Sentral show that cash remittances coursed through banks amounted to $2.2 billion in October 2014, up 7 percent from the same month in 2013. This

Heads, I win; tails, you lose

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan

BusinessMirror is published daily by the Philippine Business Daily Mirror

HOM

2015, 2016 augur well for the economy

John Mangun

OUTSIDE THE BOX

IMPLISTICALLY, the world is divided into two economic philosophy and policy camps. There are the “Keynesians” who follow a 21st century version of the works of John Maynard Keynes. Then there are the “Austrians” who believe in the theories of the so-called Austrian School of economic thought. The “Keynesians” embrace the idea that during times of economic stress, mainly recessions, it is beneficial in the short term for the government to stimulate the economy through whatever means necessary. This includes low interest rates to encourage borrowing and increased government spending through increased debt if necessary. The “Austrians” believe that Keynesian practices will lead to assets price bubbles that will eventually burst, debt bubbles that will create hyperinflation, and bad investments that will distort future economic growth. The Austrian solution to recessions and the like is to allow the normal business cycle to work things out without too much government interference. Austrians would let the market decide interest rates and not the central banks. The global economic system

through the banks and the government have adopted Keynesian polices for the most part over the last 6 years. Even the most dedicated Keynesians can only say at best that things would have been much worse without government borrowing and stimulus. At best, economic growth in the US and Europe is increasing at a miserably slow rate. Unemployment in Europe is a disaster and in the US the number of people available for work that are actually employed is very low. Median wages in the US are at the lowest level since 1998. Adjusted for inflation, Americans are earning less today than they did even as recently as 2012. Keynesians who might have bet on a strong economic recovery has lost. However, Keynesians who put their money in the stock market have been huge winners. Your investment in an

brought the total remittances for the first 10 months of 2014 to $19.9 billion, higher by 6.2 percent compared to $18.7 billion in the same period in the previous year. The Philippines is also attracting more investments, partly because of the numerous credit rating upgrades that international rating agencies have given the country. In another report, the Bangko Sentral said foreign direct investments (FDIs) posted net inflows of $680 million in September 2014, more than double the net inflows of $314 million in the same month in 2013. For the period January to September 2014, net FDI inflows surged by 61.3 percent to $4.9 billion compared to $3 billion a year ago. Even local investors are pouring capital on different projects throughout the country. In particular, the tycoons are very aggressive in investments, whether on their own or in partnership with other local or foreign investors. Thus, we see big projects rising in Cebu and Iloilo in the Visayas, and in Cagayan de Oro and Davao in Mindanao, in addition to Mega Manila. I believe FDI is one of the things that we lack. It is the missing link between slow or moderate growth and the fastpaced growth that we need to develop an inclusive economy. Despite the temporary slowdown

in 2014, the Philippine economy is ready to take off and the government must make sure that no other obstacle stands in the way, by continuing its reforms to make it easy for investors to do business here. The Asian Development Bank (ADB) shares this optimistic outlook for the Philippines, citing robust domestic demand and investment, low inflation and interest rates, increased remittances and upbeat business sentiment. At the same time, however, the ADB laments that growth has not been creating enough jobs, as more than a quarter of Filipino workers remain jobless or underemployed. I mentioned the ADB’s observation both to serve as a reminder and as a challenge. The large number of Filipino workers who have no jobs or do not have enough income should remind us that the growth of the economy should include the objective of generating employment and livelihood. For policymakers, the large number of Filipino workers who have no jobs or do not have enough income should be a challenge that must be addressed if we are to solve the problem of poverty. In closing, let me greet all Filipinos a happy New Year!

Exchange Trade Fund (ETF) that tracks the Morgan Stanley World index of markets in 23 developed countries has gone from $10,000 in July 2009 to its current $20,374. The ETF for the 21 nation Emerging Markets Index has also double in value since 2009. Congratulations to the Keynesians you made a killing in the stock market. Of course if you are a Keynesian who works a real job, you’re making less money if you still have a job. “Austrians” who bet on $3,000 per ounce gold, hyperinflation, or a collapse in the price of government bonds are big losers. And, in constant anticipation of the bubble breaking, they did not buy the stock markets. The only consolation at least from the Austrians I read, is that they are still right and they have more time to get ready for the global economic Armageddon. In truth, both the Keynesians and the Austrians have spent many years being wrong. Global economic growth and particularly in the US and Europe is not happening. The stock market increase has benefited the wealthy by whatever way you measure it. The economic future still looks dim. Global debt continues to rise with many European countries having a higher debt to economic output higher than in 2009. Japan has no economic growth and an unmanageable debt. But the worst insult and slap to the face of both Keynesians and Austrians is an insignificant little coun-

try sitting on the edge of nowhere. Stable economic growth-check. Stable currency exchange rate-check. Low government, corporate and personal debt-check. Low government budget deficit-check. One of the best performing stock markets-check. Low and very manageable inflation-check. The Philippine does not follow either the Keynesian or the Austrian economic ideas. While always subject (mainly by Filipinos) to intense criticism of how we do things here, the nations’ economic policy might be best called “Common Sense Economics”. This philosophy includes: don’t spend too much, don’t borrow to spend, don’t buy what you can’t afford, and don’t spend on too many foolish things. Another key component to Philippine economic theory is that government can rarely solve important problems. Filipinos have learned over at least 100 years that government often makes things worse, not better. And the moment you really depend on government, it usually fails. In the last few years, no matter what the result from the global economic coin toss, it has been, “Heads, PHL wins; Tails, PHL still wins”.

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

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

Being poor is getting scarier in the US

BCDA suffers yet another legal setback

By Mark Whitehouse

Ernesto M. Hilario

Bloomberg View

Y any measure, the US is among the wealthiest countries in the world. Judging from new research, though, it’s becoming an increasingly hazardous place to be poor.

Every advanced nation has a mechanism to protect its most vulnerable members from economic shocks. In the US, government transfer programs such as unemployment insurance, food stamps and the earned income-tax credit act to offset the impact of recessions, particularly for the poorest families. By putting much-needed money in the pockets of the people most likely to spend it, these “automatic stabilizers” also help the broader economy recover. In a paper presented over the weekend at the annual meeting of the American Economic Association, economists Hilary Hoynes of the University of California at Berkeley and Marianne Bitler of UC Irvine explored how well automatic stabilizers in the US are working. Using state-level data on unemployment rates and a measure of household income that accounts for taxes and transfers, they compared the effects of the most recent recession to those of the last deep recession in the 1980s. The result: The US is doing a significantly worse job of protecting its most vulnerable households than it did a few decades ago. Specifically, the economists estimate that during the 2008 recession, a 1-percentage-point increase in the unemployment rate was associated with a nearly 10-percent increase in the share of 18- to 64-year-olds with household incomes of less than half the poverty level. That’s roughly double the effect of unemployment in the 1980s recession. Here’s a chart showing the estimated effect of a 1-percentage-point increase in the unemployment rate on the share of households that fall below various income levels, for both recession periods (ATTI means income after taxes and transfers):

ABOUT TOWN

HEN it rains, it pours. The legal setbacks of the Bases Conversion and Development Authority (BCDA) never seem to end.

Last month before the year came to a close, the government agency was castigated anew by Judge Pedro Gutierrez of Regional Trial Court in Pasay City Branch 119 for having engaged in “selective prosecution” and violating the Bill of Rights in filing an estafa case against Robert John Sobrepeña, chairman of the Camp John Hay Development Corp. (CJHDevco), its private developerpartner at the former Camp John Hay in Baguio City. Gutierrez upheld his September 3 decision that BCDA President Arnel Paciano Casanova had failed to establish probable cause in filing an estafa case against Sobrepeña for alleged failure to pay rentals for its 247-hectare holding at the John Hay Special Economic Zone (JHSEZ). “BCDA agreed to restructure the debt under the lease agreement,” Gutierrez said in his final decision last December 19. “The accused [Sobrepeña] cannot be held liable for CJHDevco’s failure to pay those rentals.” “This case was filed with the Department of Justice (DOJ) after a lapse of 14 years when the obligation

was incurred in 1998. This violated the Bill of Rights under our Constitution for accused to have a speedy trial and due process of law,” Gutierrez added. Moreover, Gutierrez said that in acting on BCDA’s estafa complaint, the DOJ “made a palpable error of selective prosecution” in filing this case against Sobrepeña without including all the members of CJHDevco’s Board of Directors. Also this year, the Court of Appeals (CA) upheld the earlier decision by the RTC in Baguio City ordering BCDA to settle its long-standing dispute with CJHDevco over the lease and development of a JHSEZ property. In a 14-page decision penned by Associate Justice Victoria Isabel Paredes, the CA’s Special 11th Division affirmed the July 13, 2012 order by Baguio RTC Judge Cecilia Corazon Archog ordering the BCDA to submit itself to arbitration proceedings to resolve its financial dispute with CJHDevco. The appellate court emphasized the Supreme Court’s (SC) policy favoring arbitration as an alternative

The State of the World It’s hard to imagine how anyone can survive at 50 percent of the poverty level. As of 2013, using the measure of income employed by Hoynes and Bitler, that corresponded to $9,384 a year for a family of three. Nonetheless, more than 7 million people were living below it. Hoynes and Bitler attribute the increased vulnerability of the poorest households in part to the welfare reforms of the 1990s, which sharply reduced access to cash aid. In 1996 for example, Congress replaced the Aid to Families with Dependent Children program with Temporary Assistance for Needy Families, which was aimed at getting people back to work faster. There are various ways the US can improve its social safety net without unduly reducing the incentive to work. The Affordable Care Act, for example, subsidizes health care for the poorest families. Congress could expand the earned income-tax credit, which provides added income to people in low-paying jobs. Rules restricting access to emergency cash assistance could be relaxed during severe recessions. Over the past three decades, economic output per person in the US has increased more than 60 percent, to an estimated $54,678 in 2014. Surely such a rich country can afford to do better for the poor.

Edgardo J. Angara

HE daughter of the KoreanAir chairman, herself a Vice President of the airline, forced a taxiing airplane to return to its gate to eject a senior flight attendant who angered her over the way macadamia nuts were served in first class.

Chief Executive C.Y. Leung, in the midst of pro-democracy protests in Hong Kong that demanded direct popular vote to choose his successor, rather than a hand-picked, proBeijing and pro-business selection committee, said that allowing free and open elections was undesirable,

because it would empower Hong Kong’s working poor to dominate its politics. In an interview with the International New York Times, he stated that the Hong Kong system of preselected electors ensures broad sectoral representation.

Online privacy and the Snowden documentary By Katie Benner Bloomberg View

AURA Poitras’S new documentary about mega-leaker Edward Snowden, Citizenfour, makes no pretense at being evenhanded. It’s a polemic against the National Security Agency’s (NSA) effort to spy on people in the US and around the world—innocent, guilty, or simply suspect—all in the name of national security.

Snowden, a former government contractor who famously stole and delivered information to the press about the NSA’s spying efforts, is portrayed as an intellectually thoughtful hero (albeit young and often naïve). Poitras shot her documentary in a grainy, verite style and it has the pace and feel of a John le Carre novel. That’s because Poitras wants us to believe that the real life story of US mass surveillance is as incredible and gripping as a well-told thriller. The twist, of course, is that the tale is true. Thus, the outrage. Like so much of le Carre’s work, Poitras’s film doesn’t have a tidy or satisfying conclusion. The ostensible good guys in her story –Snowden and, later on, the journalists who help him get his message out– are left in limbo. Snowden still lives in exile in Russia, and Poitras herself is unwilling for a time to return to the US because of concerns about her own freedom. Snowden, Poitras and others continue

to fight, despite the odds that the bad guys in “Citizenfour”–national security authorities and espionage agencies - will prevail because the system that would otherwise hold them in check has been seriously compromised. If you don’t agree with Poitras’ politics and point of view in “Citizenfour,” you’re not alone. Michael Cohen at the Daily Beast is (rightfully) concerned that she and fellow reporter Glenn Greenwald work from the assumption that the government’s actions have black and white parameters, and thus mine the Snowden data to support that story. (Of course, Poitras has been spied on, and she says that she was followed while working in Hong Kong, so for her the politics are also deeply personal.) “Citizenfour” leaves little room for a more nuanced look that takes into account the reality that countries around the world are using cyber espionage (and increasingly cyber warfare) to wage an unseen and seemingly

Tuesday, January 6, 2015

never-ending war. Concerns like Cohen’s, however valid, don’t make Poitras’ film any less significant. “Citizenfour” may spark the same kind of outrage about the surveillance state that Matt Taibbi’s Rolling Stone article about (the “vampire squid”) Goldman Sachs and Michael Lewis’ book about the mortgage market, “The Big Short,” sparked about the financial crisis several years ago. Lots of solid, nuanced and hardwon reporting from other media surrounded the financial meltdown - and Taibbi and Lewis’ work relied on all of that reporting. But Taibbi and Lewis used rhetorical, narrative power to define the financial crisis in ways that gave the event meaning and clarity for a broader audience. Poitras’ documentary is considered a likely Oscar winner by some observers and while nothing has arisen proving that the NSA has used data it has collected to harm innocent citizens, the threats created by unfettered data collection are what animate “Citizenfour.” By Snowden’s reckoning, a huge database that can be used to monitor our communiqués is potentially a “weapon of oppression.” Even some of Snowden and Poitras’ critics largely agree that this threat to our privacy and freedoms should be taken seriously. The roots of this issue run deep and extend, of course, well beyond

the NSA. Concerns about online privacy ramped up in the late ‘90s as the Internet’s popularity and accessibility boomed, and heightened further when we began voluntarily ceding ever greater quantities of our personal data to telco and data giants such as Verizon, Facebook, Google and Apple. The initial bargain - our data fed to advertisers in exchange for the ability to live online lives - has in some ways been a Faustian one. We voluntarily made surveillance easier and made it a key part of the Internet’s business model, conditioning ourselves to become more comfortable with that reality along the way. The NSA’s desire to use the intimacy and reach of the Internet to monitor our communications more aggressively in the wake of the 9/11 attacks is of a fit with all of this. The revelations in the million or so documents that Snowden released have shown how effectively the government has pursued its goals. We now seem ill equipped to know exactly how to respond to that. “Citizenfour” is useful, in that it may help some of us define our feelings and judgments about government surveillance. It’s also a problematic work, in that effective narrative (whether in the hands of a Poitras or a Taibbi) can elevate emotional truths at the expense of nuance and complexity. Even if the government’s “weapon of oppression” has yet to harm any in-

method of dispute resolution: “Finally, the records of the case reveal that the factual allegations of the parties already refer to the merits of the controversy between them, which is the alleged breach of their RMOA [restructuring memorandum of agreement]. These issues are best threshed out in the appropriate arbitration proceedings.” At the SC, meantime, the justices ordered the BCDA last August 13 to abide by its original agreement with SM Land Inc. (SMLI) on a Swiss or competitive challenge for the development of the 33-hectare Bonifacio South Pointe property at Bonifacio Global City (BGC). This SC order made permanent the temporary restraining order (TRO) that it issued in January 2013 after SMLI filed a petition for certiorari, prohibition and mandamus against BCDA for reneging on its commitment to carry out a competitive challenge on SMLI’s unsolicited proposal in arbitrarily deciding to hold a public bidding instead for this state property in BGC. Penned by Associate Justice Presbitero Velasco Jr., the 26-page SC ruling ordered the BCDA to go ahead with the Swiss or competitive challenge as petitioned by SMLI, as the High Tribunal said that doing otherwise might turn away investors eyeing public-private partnerships. “To permit BCDA to suddenly cancel the procurement process and strip SMLI of its earlier-enumerated rights as an original proponent at this point—after the former has already benefited from SMLI’s

proposal through the acquisition of information and ideas for the development of the subject property— would unjustly enrich the agency through the efforts of petitioner,” the SC said in its August 13 ruling. BCDA’s recent legal setbacks come close on the heels of two similar court debacles two years ago in which the RTC in Baguio City issued separate TROs stopping the agency from taking over the properties either built or managed by CJHDevco such as Manor Hotel, Camp John Hay Suites and the Camp John Hay Golf Club. As of now, BCDA and CJHDevco are waiting for the resolution of their case at the Philippine Dispute Resolution Center Inc. The PDRCI is poised to hand out its decision any time now on issues pertaining to the lessor’s serial violations of its original MOA and subsequent RMOAs with the lessee. Apart from losing its cases against CJHDevco at the RTC and CA and against SMLI at the SC, BCDA is also facing a possible court battle with the Manila North Tollways Corp. over the state-run firm’s unexpected move to subject the MNTC-run SubicTarlac-Clark Expressway to a price challenge despite the thrice-negotiated operation and maintenance deal under the Aquino presidency that the Arroyo administration already approved in 2009. With its losing streak, this government-run agency should, at the very least, study carefully its legal position before going to court. Or else get better lawyers.

And his justification: “You have to take care of all the sectors in Hong Kong as much as you can. And if it’s entirely a numbers game and numeric representation, then obviously you would be talking to half of the people in Hong Kong who earn less than US$1,800 a month. Then you would end up with that kind of politics and policies.” The Korean “nut rage” incident and the Hong Kong Chief Executive’s political stance strikingly illustrate two of the stark realities of our time: the arrogance and insensitivity of the rich and the authoritarian ruler’s utter disdain of the masa. Both seem to describe the suspicion and indifference the rich and the powerful feel towards their constituents. The powerful can blithely ignore public sentiment while the rich disregard

individual dignity. The upshot is the systematic hollowing out of the middle class and global youth unemployment. According to Credit Suisse’s 2013 Global Wealth Report, the world’s richest 15 percent holds as much as 83 percent of global wealth, while 70 percent of the global population holds only 3 percent. And as 2014 fades away and 2015 begins, we see horrific atrocities being committed and terrorism exploding even in opulent societies. Five years ago, pundits were talking about democracy on the march. Now, we see the opposite happening because so-called democratic leaders are in fear and awe of the rich and powerful.

nocents, the NSA has tried to obfuscate the true reach of its surveillance programs and, according to “Citizenfour,” may have lied to Congress when asked about those practices. (Clips of former NSA director General Keith Alexander testifying before Congress provide some of the film’s most infuriating moments.) The rationale for the NSA’s covert, sweeping approach is a mystery. The White House has acknowledged that most of the bulk phone records collected covertly by the NSA “could readily have been obtained in a timely manner using conventional… orders.” And the very promise of mass data collection–that we can draw conclusions from links between data sets– goes only so far. As Poitras reminds “Citizenfour’s” audience, such socalled metadata always tells a story, but that story’s not always true, so establishing its value requires an appreciation of context and other factors. But, as I noted above, the espionage game is global, and every country is playing it. The US has to be in that game, which “Citizenfour” doesn’t acknowledge at all. Establishing that reality might allow for a more sophisticated analysis of how we want our own spy agencies to act. Snowden seems to have an appreciation for some of these dynamics and he’s a fascinating character, but we never come to fully understand

him. Poitras has more access to his thoughts and actions than almost any other journalist, but her picture of his motives remains incomplete. He wants to be known as the source of the NSA leaks, while also claiming that he doesn’t want to become the focus of the story once his identity is revealed. Even the most casual observer knows that both of those things can’t co-exist. Snowden never gives a fully satisfying reason for why he was so adamant about taking credit for the leaks. He was only 29 when he came forward, and he’s of a generation that likes to talk about the importance of transparency. Visibility will mean that there are no secrets, Snowden says, without, apparently, hearing echoes of the NSA’s defenders in his statement - or without realizing that a world entirely without secrets may be unappealing. Even so, it’s now impossible to ignore “Citizenfour’s” most important question: What happens when, as Snowden puts it, the “people’s ability to meaningfully oppose” the government’s willingness to take advantage of our newly connected world is secretly taken away? Or as Jacob Appelbaum, a security researcher who helped develop the anonymous Internet network Tor, also says in the film. “What we used to call liberty and freedom we now call privacy. And now people are saying privacy is dead.”

Email: ernhil@yahoo.com.

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

2nd Front Page BusinessMirror

A8 Tuesday, January 6, 2015

Privatization of Naia seen to encounter resistance By Lorenz S. Marasigan

he Department of Transportation and Communications (DOTC) expects to generate flak once it starts the bidding process for the contract to operate and maintain the main international gateway in Manila. Transportation Secretary Joseph Emilio A. Abaya said some employees of the Ninoy Aquino International Airport (Naia) who will be laid off once the project has been implemented would surely take action. “There will be a little resistance, some from the employees of the Naia,” he said. However, citing the recent experience in the privatization of the Mactan-Cebu International Airport, Abaya said the prospect of tapping private-sector expertise to run the airport is bright. “I think the experience will not be too far from the one we saw in the Mactan-Cebu airport project, wherein some employees were absorbed, some opted to retire. It was a smooth transition,” the transportation chief said. Currently, the feasibility study for the privatization of the Naia is being finalized by consultants, he said. The deal will be presented before the National Economic and Development Authority -Investment Coordination Council by the first half of the year. “Some would say that the auction for the operations and maintenance of the Manila airport is just administrative in nature. But this could be a game-changer if you allow private sector, like Changi or Incheon, operating the whole Naia complex,” the Cabinet official said. The state wants to auction off the operations and maintenance of the Naia to tap the expertise of foreign airport operators to improve the services at the aging aviation hub. The deal will also involve the redevelopment of the four terminals of the decadesold airport. The optimal capacity of the airport in Manila’s four terminals is at 30 million annual passengers, while the maximum capacity is at roughly 35 million passengers per year. This year the airport is expected to handle 37.78 million passengers, bulk of which, or 21.31 million, would be domestic traffic, while the remaining 16.46 million would be international passengers. Come 2040, the Naia’s passenger traffic would reach 101.49 million.

House leaders endorse EBC license renewal

ouse leaders are pushing for the renewal of the franchise granted to Eagle Broadcasting Corp. (EBC) for another 25 years. Speaker Feliciano Belmonte Jr. of the Fourth District of Quezon City, Majority Leader Neptali Gonzales II of the Lone District of Mandaluyong City and House Committee on Legislative Franchises Chairman Rep. Marcelino Teodoro of the First District of Marikina City filed House Bill 5227 seeking to extend EBC’s legislative franchise effective until November 3, 2018. Belmonte said the measure recognizes EBC’s faithful compliance to its mandate: providing quality public service to the Filipino society it serves through broadcasts with quality multifaceted content. “EBC, in its almost half-a-century of

December inflation likely eased to 2.9 percent–BPI

By Bianca Cuaresma

he moderating impact of lower oil price, timely importation of the rice staple and the so-called base effects were seen conspiring to bring inflation in December sharply lower, the Bank of the Philippine Islands (BPI) said on Monday. BPI economist Nicholas Antonio Mapa said the rate of change in prices, or inflation, probably slowed to only 2.9 percent in December from 3.7 percent in November. This was due to the favorable base effects on the inflation print

during the last months of 2013, as well as the addressed issues of rice supply and the oil-price reduction in the period. “We see inflation decelerating to 2.9 percent as food inflation continues to dip on the back of base effects [4.1 percent in De-

cember 2013 due to storm] and better-late-than-never rice importation by the government to help bring down the staple rice prices,” Mapa said. “Other components seen to bring the overall inflation print lower will be sectors related to the free fall seen in global crude oil prices. Transportation and utilities seen to be accelerating at a slower pace compared to last year’s December pace,” he added. Mapa’s forecast was within the range given by Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. of 2.4 percent to 3.2 percent for December. Should inflation hit 2.9 percent in December, the annual inflation for 2015 should average 4.2 percent. This is higher than the 3 percent reported in 2013. This should also be within the target

inflation range for the year of 3 percent to 5 percent. This should also be the sixth consecutive year that the central bank achieved a within-target annual inflation. Me a nwh i le, I NG B a n k Manila economist Joey Cuyegkeng was also of the view that inflation should sharply decelerate in December on lower food and energy prices. But he forecasts inflation slightly higher at 3 percent, as seasonal demand may have “prevented a more pronounced slide in December inflation,” he said. The Philippine Statistics Authority is set to release inflation numbers for December today, January 6. For next year, the central bank adopted slower inflation averaging 2 percent to 4 percent up until 2016.

SECURITY PREPARATIONS UNDER WAY A picture of Pope Francis hangs on a pole, while a Philippine military rescue helicopter takes off from an area where he will hold

OIL EXTENDS DECLINE AS SUPPLY GLUT LINGERS

il fell for a third day, extending its decline from the lowest level in five and a half years amid signs a global supply glut that’s driven crude into a bear market may continue this year. Futures in London dropped as much as 1.3 percent, after sliding 5.1 percent last week. Iraq plans to boost crude exports this month, according to the oil ministry in the second-largest producer of the Organization of Petroleum Exporting Countries (Opec). Venezuela President Nicolas Maduro is traveling to China to hold talks on financing and energy and will visit

other Opec member-nations to develop an oil-pricing strategy. “Iraq’s crude production is one of the contributors to the glut we’ve been seeing,” Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul, said by phone. “The glut is expected to continue if demand fails to catch up with supplies. Venezuela’s oil industry is in recession amid falling production but, if it can attract new investments, it can boost output.” Brent for February settlement fell as much as 71 cents to $55.71 a barrel in electronic trading on the London-based

ICE Futures Europe exchange, and was at $55.92 at 10:08 a.m. Seoul time. The European benchmark grade slumped 48 percent last year, and capped a sixth weekly decline on January 2. It traded at a premium of $3.65 to West Texas Intermediate, compared with $3.73 on Friday. WTI for February delivery slid as much as 54 cents, or 1 percent, to $52.15 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 3.7 percent to $52.69 last week. Total volume of all futures traded was about 15 percent below the 100-day average. Bloomberg News

Euro nears 9-year low on Greece concerns country’s membership in the euro area, with Der Spiegel magazine reporting German Chancellor Angela Merkel is ready to accept a Greek exit. Data this week will probably show consumer prices in Europe fell for the first time in five years in December, adding to the argument for European Central

Govt looks to aid teams searching for seafarers T

By Recto Mercene

he Department of Foreign Affairs (DFA) on Monday said the lone Filipino survivor in the ill-fated cargo vessel Bulk Jupiter, Angelino Capindo Rojas, is currently under the care of the Vietnam Maritime Search and Rescue Coordinating Center in Bong Tao City. “The repatriation of Roxas is being worked out,” Foreign Affairs Spokesman Charles Jose said in a news briefing, adding that the search for 16 other Filipino crew members of the vessel continues, with Vietam authorities leading the efforts. The investigation as to the cause of the incident is also ongoing, Jose added. He said the embassy in Hanoi has identified the retrieved bodies so far as those of Capt. Rommel Aqueza Andrin, 45, and 3rd Officer Jerome Maquilang, 23. He said both bodies were transferred to Ho Chi Minh City, where the honorary consul general and the representative of the manning agency, Magsaysay Maritime Corp., are making arrangements for their repatriation. “The DFA willl try to bring them back to the Philippines as soon as possible, but there’s no definite time when that would be,” Jose added. He said Rojas was still in shock and was not able to give his statement to investigators. “On the part of the DFA, we will be working very hard to repatriate the remains, extend consular assistance to the two deceased and provide mortuary certificates.” He said more benefits would be given by other agencies, such as the Overseas Workers Welfare Administration, Philippine Overseas Employment Administration and the Department of Labor and Employment. The ship, which was carrying 46,400 tons of bauxite, was manned by 19 all-Filipino crew and left Malaysia on Friday en route to China. Except for Rojas, there are no other known survivors. Search and rescue operations for the 16 other missing Filipino seafarers are hampered by bad weather. Ships from Liberia, Oman, Singapore and China were helping the Vietnamese authorities in the search, the DFA said. Meanwhile, Malacañang has ordered the Department of National Defense to look into the possibility of sending a team to help in the search. “We are asking the secretary of National Defense if we can extend assistance,” Palace Spokesman Edwin Lacierda said in a briefing on Monday aired over state-run Radyo ng Bayan. “The Vietnamese Navy has already added three helicopters for the search and they are asking other countries to help. So far, no new remains have been recovered or survivors rescued,” Lacierda said. The ship’s cook said he did not know what caused the ship to sink. He said the ship simply tilted and he immediately put on the life vest.

Mass as part of security preparations for his visit at Rizal Park, Manila. Pope Francis will visit this predominantly Catholic country from January 15 to 19. AP

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www.businessmirror.com.ph

Bank (ECB) President Mario Draghi to extend stimulus. “The reasons to be selling the euro were pretty clear over the weekend: Draghi being a step closer to QE and deepening concerns about the Greek political situation,” Sean Callow, a currency strategist at Westpac Banking Corp. in Sydney, said by phone. “The euro was so close to such a keenly watched round number as $1.20 that we

didn’t need any fresh news to tip us over the cliff.”

Dollar strength

The euro reached a low of $1.1864 on Monday, extending its loss over the past year to 12 percent as euro-region and US monetary policy diverged. W hile the Federal Reserve has wound back its own bond-buying program and floated the

prospect of raising interest rates from near zero, the ECB reduced rates and started asset purchases in a bid to stoke economic growth. Draghi said in an interview with German newspaper Handelsblatt published last week that while deflation risks are “limited,” policymakers “have to act against such risk.” Asked how much the ECB might spend on government bonds, he answered that it’s “difficult See “Euro,” A2

Ayala. . .

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The LCC has a chain of malls in Bicol and is owned by the Filipino-Chinese Tan family from Tabaco City, who pioneered the establishment of malls in three key cities of the region—Tabaco, Legazpi and Naga. The new investment is expected to generate more jobs for the Bicolanos and additional income for the government. Aside from the additional P1-billion investment of the Ayala Corp., SM and Robinsons managements are trying to secure big lands, where they would put up multibillion-peso investments, apart from their chains of supermarkets in the region. The Asian Institute of Management described Legazpi as a fast-rising city in terms of infrastructure development, business growth and notable peace and order condition following good governance —bouncing rapidly back on its feet after the devastating impact of Supertyphoon Reming eight years ago. Legazpi is the center of trade and commerce in the Bicol region, where the seat of national government and the university belt of the region are located. With massive infrastructure development, business growth and big influx of foreign and domestic tourists in this city, Legazpi, according to Rosal, is the next investment hub in the country after to Davao and Cebu. PNA