Pluto is bigger than previously estimated
The New Horizons mission to Pluto has found its size to be bigger than originally estimated; it’s only slightly smaller than Mercury. However, to be considered a planet Pluto must also achieve gravitational dominance in its vicinity, clearing or vacuuming up any objects around it.
Jupiter RADIUS
43,441 miles 69,911 km
Saturn
36,184 m 58,232 km
Solar system planet size Uranus
15,759 m 25,362 km
Neptune
15,299 m 25,362 km
Earth Venus Mars Mercury Pluto
3,959 m 3,761 m 2,460 m 1,516 m 1,473 m 6,371 km 6,052 km 3,390 km 2,440 km 2,370 km
Pluto’s moon Charon orbits 12,000 miles away from Pluto — too close, which inhibits Pluto from being labeled as a planet in the solar system according to the International Astronomical Union Source: NASA, International Astronomical Union Graphic: Tribune News Service
Pluto continues to surprise and impress
The latest data downloaded from National Aeronautics and Space Administration’s New Horizons spacecraft suggest mountains of nitrogen ice thousands of feet high have evaporated into Pluto’s atmosphere since the dwarf planet formed 4.5 billion years ago, and hundreds of tons of that gas are escaping into space each hour. New images of Pluto, meanwhile, show land forms that suggest heat is rising up from beneath the surface, with troughs of dark matter either collecting or rising up in between flat segments of crust. Scientists discussed the findings on Friday in their second major release of data collected when New Horizons made a historic pass 7,700 miles from Pluto on Tuesday. AP
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A broader look at today’s business
n Sunday, July 19, 2015 Vol. 10 No. 283
By Lorenz S. Marasigan
week ahead
ECONOMIC DATA PREVIEW week ahead
n Previous week: The local currency traded at a slightly lower value in the shortened week, compared to the previous week. The peso averaged 45.205 from July 13 to 16, as opposed to the 45.154 in the previous week. The peso started trading in the week at 45.16 to a dollar, then further slumped downward to 45.195 to a dollar. The peso further followed the descent of value on Wednesday at 45.215 to a dollar, and ended the week at 45.25 to a dollar. There was no trading on Friday. The total traded volume of the peso is at $2.3 billion during the week. n Week ahead: Markets are seen to continue to be cautious and, thus, risk averse in trading foreign currency. The market participants are on the watch for developments for fresher leads, particularly in data from the local scene.
Balance of payments (June) July 20, Monday n May BOP: The country’s balance of payments (BOP)—or the summary of the country’s transactions with other countries—hit a deficit of $58 million in May. This is the second month that the country registered a monthly deficit in its foreign transactions. In March this year, the BOP saw a deficit of $244 million. This has been the largest monthly deficit for the year. The May’s BOP number pushed the five-month BOP total to $1.199 billion in surplus. While lower than the previous month’s total surplus, January to May’s total BOP surplus is still a recovery from the $4.12-billion deficit seen in the same five-month period last year. n June BOP: The government targets a BOP surplus of $2 billion for the year. Foreign portfolio investment—one of the main components of the country’s BOP—has shown a deficit in end-June this year, similar to the magnitude that of May, when the BOP also showed an overall deficit. Bianca Cuaresma
W
HILE the government is planning to bid out the operations and maintenance of the Ninoy Aquino International Airport (Naia) in the near future, an organization of international airlines suggested a few things for the state to consider before placing the deal on the auction block.
Specifically, the International Air Transport Association (Iata) listed eight considerations for the government to ponder on, and one of them is the creation of an independent regulatory agency, aside from the Civil Aeronautics Board (CAB) and the Civil Aviation Authority of the Philippines (Caap). “Airports are natural monopolies that are able to exert significant market power. In the absence of independent economic regulation, this market power can be ex-
A
MID next year’s presidential elections—and even if tumultuous world events, like the financial convulsions in China and Greece’s bailout strategy, prevail—the bull market is expected to continue, with the benchmark Philippine Stock Exchange index (PSEi) breaching the 8,000-point level by end of 2015. Philam Life Equity Fund Management Head Eduardo R. Banaag Jr. said the estimated intrinsic value of the country’s equity market today is 18.5 times.
PESO exchange rates n US 45.2000
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Traders align with Federal Reserve on inflation as rate-hike bets intensify
ploited,” the group said in a report. But, in order to effectively create a framework, the government must also consult all aviation stakeholders, keeping transparency at bay throughout the process. “There is no ‘one-size-fits-all’ regulatory framework—and the key is to implement a regulatory framework appropriate to the nature of and objectives for the regulated entity,” Iata said. Continued on A2
‘PSEi could hit 8,081 by end of 2015’ By Roderick L. Abad
“So, we think the right valuation of this market should be at about 8,081 by year-end,” he said of the trend, as implied by the rise in earnings per share. Citing long-term prospects on how trends are moving from 2005 to 2015, Banaag noted that the index is heading toward the 7,400 mark. But, because of positive international developments, local shares have already managed to go past that psychological barrier, when PSEi recovered from its slide last week, adding 224.54 points (+3.04 percent) to close at 7,617.13 on Thursday. Wednesday’s index ended at 7,392.59. Continued on A8
Federal Reserve Chairman Janet Yellen sits under a current US national debt chart as she testifies on Capitol Hill in Washington on Wednesday. AP/Manuel Balce Ceneta
CPI
Consumer Price Index percent change, by month, seasonally adjusted: 0.75
0.75
ANNUAL 4 2
3.3%
0
’04
0.8 ’14
+0.3%
0.50
0.50
0.25
0.25
0.00 0.00
-0.25
-0.25
-0.50 -0.50
June ’14
June ’15
Graphic: Tribune News Service Source: U.S. Bureau of Labor Statistics
A
FTER chiding the Federal Reserve (the Fed) earlier this year for having overly bullish inflation expectations, the Treasury market is starting to concede that consumer prices are set to move higher. Traders are gravitating toward Fed Chairman Janet Yellen’s stance that the rout in oil prices will fade, inflation will tick up and the US economy will be able to withstand the first increase in interest rates in almost a decade. A measure of traders’ expectations for inflation beginning in 2020 has held above the Fed’s 2-percent target since April. The central bank targets the level as
part of its mandate to balance price stability with fostering economic growth to achieve full employment. The five-year forward break-even rate, at 2.14 percent as of July 13, is just off its 2015 high. “They are coming around partly to the Fed’s point of view,”’ Jim Vogel, head of interest-rate strategy at FTN Financial in Memphis, Tennessee, said by telephone. “Traders now recognize that inflation has a great deal more potential in a couple of years than they did earlier this year.” Traders admonished the Fed earlier this year for its view that See “Inflation,” A2
n japan 0.3652 n UK 70.6973 n HK 5.8322 n CHINA 7.2795 n singapore 33.1038 n australia 33.3481 n EU 49.4850 n SAUDI arabia 12.0524 Source: BSP (16 July 2015)
NewsSunday BusinessMirror
A2 Sunday, July 19, 2015
Privatized airports need separate regulator–Iata continued from A1 “Nevertheless, in each case the underlying principle should be for an independent framework that allows a fair and constructive relationship between airlines and suppliers to develop and flourish.” Currently, there is no such independent economic and service regulator at present that is dedicated to regulating privatized airports. While the CAB deals with the economic aspect of air transportation, it does not regulate airports. The Caap, on the other hand, performs general aviation oversight functions, but does not have any rules or a regulatory framework for airports’ service or economic efficiency behavior. “This lack of regulation is seen as a weakness in the governmental framework,” the organization pointed out. It cited, for example, an airline that owns or operates an airport may abuse its ownership position in the absence of controls to the disadvantage of competing airlines. “This market power could theoretically be manifested in favorable allocation of facilities like check-in counters or gates, discriminatory charges or terms and conditions. Thus, the government’s current thinking is to limit airline ownership to a minority stake,” it explained. But this should not be the case, Iata explained, noting that it does not support any restriction on airline ownership of airports, as it unfairly discriminates against airline owners. “There are already a number of cases globally where the airline and the airport share the same owner and the airport is considered world class with no evidence of other airlines being subject to discriminatory practices—Singapore and Dubai are two such examples,” the international aviation group said.
It added: “It is always in the airport owner’s self-interest to ensure that the airport provides fair and nondiscriminatory services to all airlines as a means to maximizing service levels and user satisfaction. Any other behavior will undoubtedly lead to an erosion of the airport’s competitiveness and profitability in the long run while reflecting poorly on the airport management and owners.” So, instead, the priority should be in ensuring that there is a robust service and economic regulation framework that protects the interest of all the users, while allowing for investment by any interested party, including airlines. “In fact, airline owners are uniquely placed to ensure that airports fulfill their fundamental role—to deliver services in line with user—airline and passenger—expectations. These regulatory functions should be performed by an independent entity and should cover various financial and service aspects, including service levels, pricing, slots, counter
allocation, etc.,” Iata added. The government is planning to auction off the operations and maintenance of the decades-old Naia in order to combine public and private sector efficiencies in managing the gateway to the capital. But more than just addressing the regulator issues, the airport in Manila is also plagued by infrastructure constraints. The Japan International Cooperation Agency has predicted that this year would mark the start of the main gateway’s dark days. The airport is expected to handle some 37.78 million passengers, way beyond its 30-million annual passenger capacity and a few notches up from its maximum capacity of 35 million passengers per year. With this, Iata proposes the optimization of the current capacity of Naia through more efficient air-traffic control and improvements in the runway system, particularly the addition of rapid-exit taxiways.
“An effective strategy to support sustainable growth in the Metro Manila area in the short-medium term is to re-prioritize sufficient investment and resources in Naia to relieve congestion issues and help address existing capacity constraints,” the group said. Alternatively, limited investment in Naia will continue to result in the ongoing degradation of passenger experience at the airport, Iata noted. “This will have a detrimental impact on the airport’s ability to attract transfer traffic, and the airport’s reputation in the region, notwithstanding the airlines requirement for an acceptable level of customer experience,” the international airline agency said. Iata added that the long-term solution for the airport woes in the capital is the development of a “new greenfield airport with sufficient capacity to meet Manila’s aviation needs that is situated no greater than 50 kilometers from the city center.” “This would be in line with the public’s expectations and the conditions at other major city airports. This would make Manila a bona fide contender for the leading aviation hub in the region and meet its obligation to be the gateway for tourism and business into the Philippines,” the group said. Japanese consultants had proposed that the new international gateway be constructed in Sangley Point in Cavite to meet the parameters set by the transportation agency. The future airport will boast of four runways, which can handle 700,000 aircraft movements per year. It will have a rated capacity of 130 million passengers annually. The deal is expected to be implemented under the government’s key infrastructure program, mixed with funding from official development assistance. Commercial operations of the new airport should start by 2025, just about 10 years from now.
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Inflation... continued from A1
the rate of price increases would pick up. Inflation expectations based on the break-even rate fell to 1.75 percent on January 30, the lowest since 1999. Now, as sentiments align, the market is growing more confident that the central bank is better positioned to move forward with increasing its benchmark rate, which has been near zero since 2008. “The market has no longer priced in the doomsday scenario,”’ Stanley Sun, a New York-based strategist at Nomura Holdings Inc., one of 22 primary dealers that trade with the Fed, said by phone. “The market overshot toward the downside.”
Price measures
THE consumer price index rose for the fifth consecutive month in June, a Labor Department report showed on Friday. The gauge climbed 0.3 percent, in line with forecasts, after rising 0.4 percent a month earlier. The Fed in June raised the outlook for the core personal consumption index for 2016 to a central tendency range of 1.6 percent to 1.9 percent, from 1.5 percent to 1.9 percent. It also raised the measure for 2017 to 1.9 percent to 2 percent, from 1.8 percent to 2 percent. The yield on the 30-year US Treasury bond, the maturity most sensitive to inflation expectations, has surged 0.86 percentage point from this year’s low in February to 3.08 percent. Hedge-fund managers and other large speculators were the most bearish since February, according to US Commodity Futures Trading Commission data released on Friday. Traders swung to a net-short position of 4,943 contracts as of July 14, compared with a net long position of 10,857 contracts the week before. “It’s all about the data,”’ said Ray Remy, head of fixed income in New York at primary dealer Daiwa Capital Markets America Inc. “The general economy seems to be doing OK.” Fed funds futures on Friday showed a 33-percent chance the central bank will increase its benchmark rate at its September meeting from virtually zero, and 70 percent odds for a rise by year-end, according to data compiled by Bloomberg. Bloomberg News
EconomySunday
www.businessmirror.com.ph • Editor: Vittorio V. Vitug
BusinessMirror
Sunday, July 19, 2015 A3
House bill seeks creation of agency to facilitate foreign investments
ERC sets implementation of RCOA
By Jovee Marie N. dela Cruz
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LAWMAKER has filed a measure creating an agency facilitating the entry of foreign direct investments (FDI) in the country. House Bill (HB) 4838, or “An Act Creating the Office for Investor Facilitator and Protection and for Other Purposes,” authored by Centrist Democratic Party Rep. Rufus Rodriguez of Cagayan de Oro and Party-list Rep. Maximo B. Rodriguez Jr. of Abamin, seeks to address the bureaucratic red tape and other problems in the government. Under the bill, the proposed office shall be known as the Office for Investor Facilitation and Protection (OIFP), which shall be an independent and attached agency to the Office of the President. HB 4838 is currently under consideration by the Committee on Government Reorganization. Moreover, the bill said the OIFP, foremost among its vital mandates, acts as a coordinator and integrator for the investor, the investment-promotion agencies (IPAs) and all other related government agencies or department with respect to business registration, permits, clearances and endorsements. It is also tasked to process the automatic approval if not acted upon by the appropriate agency or department within the time frame from the endorsement by the Office for Investor Facilitation and Protection, provided that the documentary requirements are complete and without prejudice to the provisions of Executive Order 226. In filing the bill, the authors said that FDI is internationally recognized as an imperative factor both for developed and developing economies, saying that benefits from FDI can be seen across the spectrum of activities not only with respect to investible resources but its corresponding capital formation. “FDI drives economic productivity—creates jobs, raises income levels, transfers production technology, innovative capacity, as well as creating access to international marketing networks,” the lawmakers said in the bill’s explanatory note. In giving due credit, they said the government encourages foreign and local investments because it generates employment opportunities, boosts economic development, increases financial resources, increases exports by raising efficiency and enhances marketing opportunities.
“In fact, the government has launched investment incentives programs administered by 13 IPAs for the purpose of attracting domestic and foreign direct investments,” they said. These agencies are the Board of Investments; Philippine Economic Zone Authority; Bases Conversion and Development Authority; Subic Bay Metropolitan Authority; Clark Development Corp.; Poro Point Management Corp.; Bataan Technology Park Inc.; Cagayan Economic Zone Authority; Zamboanga City Special Economic Zone Authority; Phividec Industrial Estate; Aurora Pacific Economic and Freeport Zone; Authority of the Freeport Bataan; and Tourism Infrastructure and Enterprise Zone Authority. IPAs are government entities created by law, executive order, decree or other issuance for the purpose of attracting domestic and FDI, and exercise regulatory powers over the economic zones. Despite the existence of these IPAs, the authors said the National Economic and Development Authority (Neda) reported in its Philippine Development Plan of 20112016 the lack of inclusive growth in the economy. Citing the report, they said the country’s economic performances in investments, exports and terms of competitiveness need to be improved. The legislators said the gover n ment mu st be add ressed soonest if the country hopes to be competitive in attracting FDI. “A Neda study also showed that applying for a business in the country involves a long, tedious and difficult process—an average of 15 procedures, 38 days and costs 29.7 percent of income per capital,” they said. “There is a need to create a government agency-office that can assist in the expeditious facilitation of business-investment registration and permit requirements, and efficient process for investors to avail of the investment incentives programs of the government,” the authors said. Meanwhile, a separate study conducted by the World Bank with the International Finance Corp. in 2013 said the Philippines ranked 138th out of 185 economies with regard to ease of doing business in said economies. According to the World bank study, the first top 5 criteria where the Philippines ranked low were in: starting a business, registration of property, paying taxes, getting credit and protecting investors.
Lawmaker proposes free ICT courses in SUCs
A
S the country is experiencing growth in the informationtechnology (IT) and businessprocess management (BPM) industry, a lawmaker is pushing for the approval of a measure providing for free information and communications technology (ICT) courses in state colleges and universities (SUCs). House Bill 5625, filed by Nationalist People’s Coalition Rep. Scott Davies S. Lanete of Masbate, aims to entice younger Filipinos, especially the underprivileged, to choose IT and BPM industry as their field of endeavor. Under the proposed “Free Information and Communications College Education Act of 2015,” qualified students intending to enroll or already enrolled in ICT course shall be free from payment of tuition and other school fees and shall be entitled to other benefits. The bill said that funding for project shall be sourced out from the gross annual revenues of the Philippine Charity Sweepstakes Office and in a special fund to be included in the annual General Appropriations Fund thereafter.
In filing the bill, Lanete said the Constitution mandates that the sustained development of a reservoir of national talents consisting of Filipino scientists, entrepreneurs, professionals, managers, high-level technical manpower and skilled workers and craftsmen in all fields shall be promoted by the state. “In order to sustain growth in IT and BPM industry, there is a need to equip more Filipinos with adequate skills geared toward employment in the industry. By prioritizing the marginalized, the state will not only sustain growth in the industry but also lend a helping hand to the underprivileged citizens,” Lanete said. According to Lanete, “some $50 billion has been generated by the industry in the past three years.” “The growth is due to the relatively low cost of business in the Philippines and the Filipino’s linguistic skills, particularly in English. More and more foreign investors are flocking the country establishing IT and BPM centers which are more popularly known as call center,” the lawmaker said. Jovee Marie N. dela Cruz
By Lenie Lectura
HE Energy Regulatory Commission (ERC) will start soliciting comments for the full implementation of Retail Competition and Open Access (RCOA) by end of this month. In an announcement, the ERC invited all industry stakeholders to submit their comments on or before July 30. The commission has released the first draft of “Rules Governing the Issuances of Licenses or Authorization for Retail Electricity Suppliers [RES] and Prescribing the Requirements and Conditions Thereto” and the “Revised Rules for Contestability.” The draft rules are, likewise, schedu led for public hear ing on August 14. “The proposed amendments to the Rules for Contestability focus on the timeline for the mandatory contestability and the lowering of the threshold to 750 kilowatts [kW], which is set on June 26, 2016,” ERC Director Francis Saturnino Juan said in a text message, when sought for comment. He said that among the amendments in the 2015 RES rules are the restriction of RES to supply not more than 25 percent of the total
peak demand of the retail market; classification of RES licenses; renegotiation, auction or declaration in the Wholesale Electricity Spot Market (WESM) as options in treating displaced contract capacity; and a one-year timeline for existing RES to comply with such limitations. Further, Juan said the move to amend the rules is in line with the Department of Energy’s (DOE) directive to establish policies to facilitate the full implementation of RCOA. Under RCOA, which officially began on June 26, 2013, customers with monthly average peak demand of at least 1 megawatt, dubbed as contestable customers (CCs) by the ERC, are now able to choose the supplier of their energy requirement. These suppliers, commonly known as RES, will directly negotiate and contract on a wholesale level with power-generation companies so they can sell electricity to contestable customers at competitive rates. Two years thereafter, the Electric
Power Industry Reform Act (Epira ) of 2001 mandates that the threshold level for contestable market shall be reduced to 750 kW. Subsequently, every year thereafter, the ERC shall evaluate the performance of the market. On the basis of such evaluation, it shall gradually reduce the threshold level until it reaches the household-demand level. However, participation in this mechanism is voluntary, as CCs could still choose whether to ink retail service contracts (RSCs) or continue sourcing from their current power distributors. As of April this year, only about 35 percent of the total CCs that have been certified by the ERC have chosen their RES and registered with Philippine Electricity Market Corp., administrator of the WESM. “The DOE takes cognizance of the uncertainties brought about by the status quo regime, its impact on the preparation of Distribution Development Plan, particularly in the load or demand forecasting, and the DUs [distribution utilities] power supply contracting for its franchise area,” the agency said in its June 19 circular. Therefore, the agency “issues, adopts and promulgates the following policies for the continued development and implementation of RCOA as embodied in the Epira,” Department Circular 2015-06-0010 stated. It said that all CCs, currently being served by their franchised DUs, are mandated to secure their
respective RSCs no later than June 25, 2016, with a licensed RES. This also applies to all CCs, with an average demand ranging from 750 kWh and 999 kWh for the proceeding 12-month period. The RSCs should be submitted to the DOE and the ERC for monitoring, assessment, policy- and rule-making purposes, particularly on the timelines and effectivity date of the RSC. Moreover, all electricity end-users with an average demand ranging from 501 kWh to 750 kWh for the preceding 12 months may be allowed to choose their respective RES effective June 26, 2018, subject to the determination of the ERC. Voluntary contestability for endusers with average demand of 500 kW and below for the preceding 12 months shall be based on continuing evaluation and assessment by the ERC. The Manila Electric Co. (Meralco), the largest DU in the country, said it will still continue to distribute electricity to all contestable customers in its franchise area. The corresponding distribution charge due to Meralco for rendering this service will be reflected in the RES’s monthly bill. Moreover, all power distributionrelated concerns, like scheduled and unscheduled interruptions, new service applications for electricity, application for increased power requirements and energizing new facilities, will still be coursed by the CCs to Meralco.
NREB boss open to ERC post
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HE top official of the National Renewable Energy Board (NREB) will accept the position of Energy Regulatory Commission (ERC) chairman if it is offered to him. “If offered to me, how can I refuse the President?” NREB Chairman Pedro Maniego said last week when sought for comment. NREB is the body tasked by the Renewable Energy Act of 2008 to recommend policies, rules and standards to govern the implementation of the law, which granted fiscal and nonfiscal incentives to renewableenergy projects. Maniego is among the three candidates that were recommended to President Aquino as a possible replacement of ERC Chairman Zenaida Ducut, who retired from office on July 10. Maniego clarified that he is not presenting himself to the President to be chosen. “I have no backers. I am not offering myself. It’s better to just stay quiet about this. After all, it’s the prerogative of the President,” he said. The other two candidates are Joseph Ferdinand Dechavez, former senior adviser to National Grid Corp. of the Philippines President Henry Sy Jr. and Justice Undersecretary Jose Vicente Salazar. Maniego, Dechavez and Salazar are all lawyers, thus making them qualified for the post. The ERC chairman must be a lawyer by profession. Among the three, a source said Salazar is a frontrunner, while another source said a thorough and diligent review is already being conducted on the justice department official. Malacañang, however, has yet to announce Ducut’s replacement. Just months back, word got out that ERC Commissioner Josefina Patricia Magpale-Asirit, who served as undersecretary of energy from 2010 to 2012, is going to be the next ERC chairman. Asirit’s family ties with Cabinet Secretary Jose Almendras, her uncle, and with Cebu Vice Gov. Agnes Magpale, her mother, make her a “very strong candidate,” industry
Calax project briefing at the Palace
President Aquino witnesses the turnover by Metro Pacific Group Chairman Manuel V. Pangilinan (second from right) to Public Works and Highways Secretary Rogelio L. Singson of a P5.46-billion check during the project briefing on the CaviteLaguna Expressway (Calax) Project at the President’s Hall of Malacañang on Thursday. The public-private partnership (PPP) project, approved by the National Economic and Development Authority (Neda) Board on November 21, 2013, is a 45.5-kilometer four-lane paved toll road that will connect Cavite Expressway (Cavitex) in Kawit, Cavite, and South Luzon Expressway (Slex)-Mamplasan interchange in Biñan, Laguna. Calax is expected to reduce travel time between Cavitex and Slex from an average of 1.15 to two hours to only 45 minutes. Also in photo are PPP Center Executive Director Cosette Canilao and Department of Finance Secretary Cezar Purisima. PNA
stakeholders pointed out. However, her name as ERC’s next possible chairman “just fizzled out,” said another source. Former Energy Secretary Carlos Jericho L. Petilla said late last month that albeit “very qualified” Asirit is hounded with “perception problems” because of her strong ties with Almendras. “Knowing her, I don’t think she will be biased, but the problem is she will always be linked to her uncle,” Petilla added. Petilla did not say if he had made recommendations to the President, but commented that the next ERC chairman should be “a man or a woman with a solid integrity.” “This is a very contentious position. Malacañang will have to make sure that whoever is appointed will stabilize the industry. It’s a must that he or she must have the technical know-how because we cant afford for the next ERC chairman to study while things are not moving inside. “So the next ERC chairman must have integrity and must posses the technical know-how,” Petilla said.
Petilla stepped down early this month, two months after he submitted his resignation letter. Energy Undersecretary Zenaide Monsada took over as DOE officer in charge (OIC) pending Petilla’s replacement. ERC Commissioner Alfredo Non, meanwhile, is ERC’s OIC. These are two key positions in the power sector. Industry stakeholders are on a wait-and-see attitude as to who gets to sit as the next ERC chairman, because whoever will be appointed will lead the agency in the next seven years regardless of who the next President will be. While the DOE is mostly responsible on crafting policies, it is the ERC that sets out the guidelines and also rules on landmark cases. During Ducut’s seven-year term, the ERC was able to create a new regulatory framework for the setting of the electric cooperatives’ (ECs) wheeling rates. The system -loss caps were also lowered from 14 percent for ECs to 13 percent, and 9.5 percent for private utilities to 8.5 percent. Company use was also excluded in the computation of the system loss.
Likewise, new capital expenditure (capex) rules to aid the utilities in preparing their capex proposals were promulgated. Planning manuals, such as the Electric Cooperative Distribution Utilities Planning Manual and Investor-Owned Electric Distribution Utilities Planning Manuals were released, the ERC said. It was also during Ducut’s term that Retail Competition and Open Access (RCOA) was declared, with its initial implementation commencing on June 26, 2013. Prior to this, the ERC laid down the foundation of RCOA by promulgating several rules governing the retail market. Under her watch, the ERC was also successful in setting up the regulatory framework for the implementation of the incentive mechanisms under the Renewable Energy Act of 2008, such as the Feed-in Tariff System and the Net Metering program. The commission also approved last year for the entire 2015 a lower transmission charge from P0.6416 per kWh to P0.6161 per kWh. Lenie Lectura
SundayV
Busine
A4 Sunday, July 19, 2015
editorial
A welcome partnership: Affordable health care
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O this very day, the Philippines has one of the highest price levels for medicines in the developing world. What drug sells for the equivalent of P10 in India sells for P100 in the Philippines; P20 in India, P200 in the Philippines. In other words, drug prices in the Philippines are typically 10 times higher than in India. They are, to lesser extents, higher than drug prices in Pakistan, Bangladesh, Sri Lanka, Nepal, Thailand, Malaysia, Indonesia, and other South and Southeast Asian countries. What accounts for these extortionately high prices of medicines in the Philippines? One, the patent law whose intention to protect innovation and invention has been perverted to preserve monopoly power for pharmaceutical firms. Two, the laws on intellectual-property rights which have been interpreted to include practically all individual claims to property rights. And three, the mobilization by drug manufacturers of medical doctors, hospital owners and managers into sales agents for specific medical brands through bribes of free travels abroad for this or that so-called medical conference or seminar. The government has been aware of this situation and has done something about it—establishing Botika ng Bayan, to import and sell to the public pharmaceutical products at affordable prices. This endeavor has been emulated by the private sector which now brings to the public generic drugs and medicines to break the stranglehold of heavily advertised specific brands. It is in this context that we welcome with no small amount of jubilation the acquisition by Ayala Corp. of a 50-percent stake in the drug-store chain Generika Group. Led by businessmen Julien Bello and Teodoro Ferrer, Generika Group is one of the country’s pioneers in the retail distribution of quality generic medicines and the offering of a range of select branded medicines, medical supplies and consumer goods. It has more than 500 stores nationwide. Generika has done a tremendous job of raising the awareness of the public to the existence of generic medicine as a substitute for the specific brands advertised under its rubric. Through Generika’s influence, the Philippine public now knows that generic medicine is the foundation of the curative power of the differentiated brands advertised in the market. Despite its success, however, Generika has made little impact on the monopolistic predominance of differentiated brands. A financially powerful partner like Ayala Corp. can make a difference. It can contribute to the lowering of the prices of pharmaceutical products through the establishment of a wider network of drugstores nationwide; the improvement of the aesthetic appearance of these stores, and the broadening and deepening of offerings of generic medicines. More important, and this seems to be a principal objective of the Ayala group, it can bring high-level medical services to the people through the building and operation of state-of-the-art health-care facilities for them, etc. May this partnership of two of the country’s socially oriented firms in the provision of affordable first-class health care to our countrymen be rewarded with resounding success.
President Obama, on behalf of an ungrateful nation, thank you By Dick Meyer
Scripps Washington Bureau (TNS)
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ASHINGTON—I’ve never written a column like this. Readers rarely believe it, but I am not on any political team. Generosity toward the high and mighty isn’t among my few virtues. But this needs to be said: Americans are lucky to have Barack Obama as president and we should wake up and appreciate it while we can. President Obama will go down in history as an extraordinary president, probably a great one. He will have done this in an era that doesn’t aggrandize leaders and presidents, but shrinks them. All presidents have had profound opposition, vicious enemies and colossal failures. A few were beloved and others deeply respected in their day, but none in the modern era and certainly not Obama. Why? Marcus Aurelius said, “Man is puny in the face of destiny.” If the stoic king were writing about modern, democratic sovereigns, he might say, “Kings are puny in a world blind to destiny, a world seen through the sacred screens of televisions and computers that can view only the puny.” Many presidents fared better in history than in office. But it would be a morale booster and a sign of civic maturity if more Americans appreciated what an exceptional president they have right now. It could be a long wait for the next one. One can hate the Democrats, disagree with Obama on big issues, dislike his style or be disappointed the excitement of his election didn’t last. But his accomplishments, ambitious goals, dignity and honesty under tough circumstances demand admiration and appreciation. This is, of course, perverse liberalmedia propaganda to conservative Obama haters. It’s wobbly centrism to a left-flank frustrated Obama hasn’t done more for them. And it’s naïve hot air to Washington’s political clans that think Obama
Gospel
Sunday, July 19, 2015
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Many presidents fared better in history than in office. But it would be a morale booster and a sign of civic maturity if more Americans appreciated what an exceptional president they have right now. It could be a long wait for the next one. One can hate the Democrats, disagree with Obama on big issues, dislike his style or be disappointed the excitement of his election didn’t last. But his accomplishments, ambitious goals, dignity and honesty under tough circumstances demand admiration and appreciation. doesn’t play the game well. Changing minds with a keypad is a fool’s errand; I’m surely a fool, but not on that count. I simply offer some points for the open-minded to ponder: The Iran deal: Time will reveal if the deal worked, not today’s talking/tweeting heads. What cannot be in dispute is this was a momentous initiative, a gutsy political risk, a diplomatic success and, potentially, a giant step in defusing a long-ticking time bomb. Obamacare: In the midst of the worst economy since the Great Depression, Obama delivered one of the most important domestic programs since the New Deal. Only LBJ’s Great Society laws compare. Obamacare has survived two challenges in the Supreme Court and constant, kabukistyle congressional votes to repeal. It’s now off life support. Key goals are being met. It will evolve and improve. One day it will be taken for granted and people will say, “Keep the government out of my Obamacare.” The financial meltdown: Obama inherited it, then managed the recovery to the degree possible in the global economy. The recovery has been steady, though slow. The worstcase predictions didn’t happen. He began to reverse the deregulation of
HE apostles returned to Jesus, and told Him all that they had done and taught. And He said to them, “Come away by yourselves to a lonely place, and rest a while.” For many were coming and going, and they had no leisure even to eat. And they went away in the boat to a lonely place by themselves.
the financial industry. He delivered a significant Asian trade deal. Yet few give Obama much credit. The first: Becoming the first black president is itself an epic triumph. Obama doesn’t get much good will for that any more. We properly canonize Rosa Parks, Jackie Robinson and Martin Luther King. Of Obama, we ask, “What have you done for me lately?” That’s fair, he’s president. He doesn’t ask for credit for being the first black one. He and his family are at risk every day and we take their courage for granted. Dignity and honesty: Obama’s administration has been as free of corruption and well, peccadillo as any in memory. It’s the first twoterm presidency not to be derailed by scandal since Eisenhower. A few will stay in paranoid lather about Benghazi or Fast and Furious, but those pseudo-scandals don’t compare to Watergate, Iran-Contra, Bill Clinton’s carnal antics or the phony evidence used to justify attacking Iraq. Obama has weathered a recession, invisible racism, a reckless Republican Congress, a lily-livered Democratic Party, attacks from the richest pressure groups ever (Super PACs) and a 24/7, ADHD press corps under existential pressure to deliver page views and Nielsen ratings. He has done it with the “No Drama Obama” style that befits the office. Obama isn’t a performer like Reagan or a preacher like Clinton. He’s head over heart, cool over warm. Yet he did his pastoral duties after Sandy Hook, the Boston Marathon and Charleston. He wasn’t a catalyst for same-sex marriage, but nourished the culture that made it possible. It is harder than ever to see the big canvas and thus find fresh perspectives. We view current events as puny rivers of Tweets, not grand chapters in the ultimate story—history. In that longer view, we should feel well served. So, Mr. President, on behalf of an ungrateful nation, thank you.
Now many saw them going, and knew them, and they ran there on foot from all the towns, and got there ahead of them. As He went ashore, He saw a great throng, and He had compassion on them, because they were like sheep without a shepherd; and He began to teach them many things.—Mark 6:30-34
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opinion@businessmirror.com.ph • Sunday, July 19, 2015 A5
Fighting the Fourth Reich N Free Fire
By Teddy Locsin Jr.
OBEL Prize winner Joseph Stiglitz, the other smartest man in economics alongside Thomas Piketty, wrote in Time magazine that the United States must help Greece, which is under German attack, like the US helped England in the same circumstances. England was worth helping, because it was fighting back. Greece has shown comparable defiance. Stiglitz said Greece was doing well before it let in the Germans with the euro. From the mid-1990s to the start of the Greek crisis, the Greek economy was growing at a faster rate than the European Union (EU) average—3.9 person versus 2.4 percent. When it was imposed,
the Greeks took austerity to heart, said Stiglitz—slashing expenditures and increasing taxes. Just the same, they achieved a surplus; i.e., tax revenues exceeded expenditures minus interest payments. The Greek fiscal position would have been impressive if Greece was not shoved into the depression of a mass grave by the austerity Germany imposed: 25-percent drop in gross domestic product (GDP), 25-percent unemployment, 50-percent youth unemployment—the most productive kind. European Central Bank should be helping Greece; after all, it is the central bank for Greece. But it is acting like the financial Gestapo of
Germany in Europe. The EU was a good idea only if it was to be just another name for the Fourth Reich and the euro for the Reichmark. If Greece exits the euro, what happens? “Not the end of the world,” Stiglitz said. “Currencies come and go.” Indeed, the euro is just a 16-year-old terrible idea. In a crisis, the euro escapes from weak country banks to French and German banks. Greek GDP is 17 percent below where it would be if Greece never adopted the euro, Stiglitz notes. The transition from euro to a new Greek currency will be like Argentina, when it changed currency in
a debt crisis: hard but better than under the EU and it went like this in Argentina: Government recapitalizes banks in the new currency; it continues with capital controls—always a good idea—and continues to restrict bank withdrawals, though it facilitates money transfers, but only within the Greek banking system and not outside it. People on pensions get special treatment. Greece will pay its debts but not on self-destructive terms; though never on the same generous terms that Germany got, when the US wiped off German war debts, instead of making Germany pay. Argentina exchanged current bonds for GDP-linked bonds so
creditors have a stake in the debtorcountry’s recovery. Greece won’t need funding from the International Monetary Fund (IMF). With no debt service, Greece achieved a surplus. It doesn’t need the EU or the IMF for foreign exchange, what with a lower exchange rate and with oil still down. Greece will get more dollars from more tourism and exports. After Argentina self-restructured its debt and devalued, its rate of growth was the fastest in the world, second only to China’s. Stiglitz asked his country to help the cradle of democracy weather the assaults of the Fourth Reich. Seems only right to do so.
Germany, not Greece, should exit the euro By Ashoka Mody Bloomberg View
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HE latest round of wrangling between Greece and its European creditors has demonstrated yet again that countries with such disparate economies should never have entered a currency union. It would be better for all involved, though, if Germany, rather than Greece, were the first to exit. After months of grueling negotiations, recriminations and reversals, it’s hard to see any winners. The deal Greece reached with its creditors—if it lasts—pursues the same economic strategy that has failed repeatedly to heal the country. Greeks will get more of the brutal belttightening that they voted against. The creditors will probably see even less of their money than they would with a package of reduced austerity and immediate debt relief. That said, the lead creditor, Germany, has done Europe a service: By proposing the Greece exit the euro, it has broken a political taboo. For decades, politicians have peddled the common currency as a symbol of
European unity, despite the flawed economics pointed out as far back as 1971 by the Cambridge professor Nicholas Kaldor. That changed on July 11, when European finance ministers agreed that it could be both sensible and practical for a member-country to leave. “In case no agreement can be reached,” they said, “Greece should be offered swift negotiations for a time-out.” Now that the idea of exit is in the air, though, it’s worth thinking beyond the current political reality and considering who should go. Were Greece to leave, possibly followed by Portugal and Italy in the subsequent years, the countries’ new currencies would fall sharply in value. This would leave them unable to pay debts in euros, triggering cascading defaults. Although the currency depreciation would eventually make them more competitive, the economic pain would be prolonged and would inevitably extend beyond their borders. If, however, Germany left the euro area—as influential people, including Citadel founder Kenneth Griffin, University of Chicago economist Anil Kashyap and the in-
vestor George Soros, have suggested —there really would be no losers. A German return to the deutsche mark would cause the value of the euro to fall immediately, giving countries in Europe’s periphery a much-needed boost in competitiveness. Italy and Portugal have about the same gross domestic product today as when the euro was introduced, and the Greek economy, having briefly soared, is now in danger of falling below its starting point. A weaker euro would give them a chance to jump-start growth. If, as would be likely, the Netherlands, Belgium, Austria and Finland followed Germany’s lead, perhaps to form a new currency bloc, the euro would depreciate even further. The disruption from a German exit would be minor. Because a deutsche mark would buy more goods and services in Europe (and in the rest of the world) than does a euro today, the Germans would become richer in one stroke. Germany’s assets abroad would be worth less in terms of the pricier deutsche marks, but German debts would be easier to repay.
The disruption from a German exit would be minor. Because a deutsche mark would buy more goods and services in Europe (and in the rest of the world) than does a euro today, the Germans would become richer in one stroke. Germany’s assets abroad would be worth less in terms of the pricier deutsche marks, but German debts would be easier to repay. Some Germans worry that a rising deutsche mark would render their exports less competitive abroad. That is actually a desirable outcome for the world—and eventually for Germany, too. For years, Germany has been running a large current-account surplus, meaning that it sells a lot more than it buys. The gap has only grown since the start of the crisis, reaching a new record of €215.3 billion ($244 billion) in 2014. Such insufficient German
demand weakens world growth, which is why the US Treasury and the International Monetary Fund have long prodded the country to buy more. Even the European Commission has concluded that Germany’s current-account imbalance is “excessive.” Germans know how to live with a stronger exchange rate. Before introduction of the euro, the deutsche mark continuously appreciated in value. German companies adapted by producing higher-quality products. If they reintroduce their currency now, it will give them a new incentive to improve the lagging productivity in the services they produce for themselves. Perhaps, the greatest gain would be political. Germany relishes the role of a hegemon in Europe, but it has proven unwilling to bear the cost. By playing the role of bully with a moral veneer, it is doing the region a disservice. Rather than building “an ever closer union” in Europe, the Germans are endangering its delicate fabric. To stay close, Europe’s nations may need to loosen the ties that bind them so tightly.
Iran deal shifts US relationship to the world By Moustafa Bayoumi Tribune News Service (TNS Forum)
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HE Iran nuclear agreement is a win above all for global diplomacy. Perhaps, the most significant fact of the deal is not up for debate. This will be the first time that a country facing Chapter 7 sanctions of the UN Security Council (the strictest sanctions around) has had them lifted through negotiations.
What the accord shows us is the possibility and necessity of diplomacy in the Middle East. For far too long, and especially since the 2003 invasion of Iraq, US foreign policy has been premised more on this country’s military might than on internationally coordinated diplomatic initiatives. And as our diplomacy has diminished over the years, militarism has sowed more chaos into an already volatile and complex
region. In other words, the significance of the Iran deal is more than its own accord. What it illustrates is that when multiple countries unite and undertake a concerted and imaginative effort on seemingly intractable issues, real solutions can be found. We should seize this momentum and be thinking about the next priorities for peaceful resolution in the region. Most immediately, the global
community has abysmally failed in bringing Syria’s bloody civil war to an end. Renewed international efforts on that horrific conflict, now with most likely greater Iranian cooperation, must take place. We should also aim to create a nuclear weapons-free zone for the entire Middle East and find a just and lasting solution for the Israeli-Palestinian conflict. Only diplomacy—real diplomacy
involving the kind of difficult work exhibited by the Iran deal—has a chance of success in these situations. This will require exerting pressure not only on our foes but also on our friends. The Iran agreement shows us that peacefully forging a common destiny among nations strengthens America’s place within the world. Diplomacy’s dividend is worth much more than domination through war.
Lights…camera…animal abuse? By Jennifer O’Connor
People for the Ethical Treatment of Animals (TNS Forum)
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IVEN how profoundly animals suffer at the hands of humans, you would expect to see them rebel if given the chance, as depicted in the new CBS television series Zoo. But even though the rebellious animal characters in Zoo are fictional, real animals still end up paying a price for it. Zoo producers force live animals to participate in the production, instead of availing themselves of the high-tech nonanimal options available. It’s a shame that CBS is so out of touch. Every jaw-dropping chimpanzee and gorilla in Rise of the Planet of the Apes and its sequel were created
using computer-generated imagery, as were all the animals in last year’s film Noah. All the best commercials during the last Super Bowl used faked animal scenes. And has anyone seen the dinosaurs in a little film called Jurassic World? In sharp contrast to the glamour associated with Hollywood, the day-to-day living conditions for animals used in movies, television shows and commercials are often grim. Some animals are taken from their homes in the wild. Most are kept in cramped enclosures and deprived of all that is meaningful to them, including natural social groupings and an appropriate environment. Time is money in the entertainment industry, so there is a great deal of pressure for trainers to ensure that animals perform correctly
in the fewest takes possible. These financial constraints can and do lead trainers to apply severe punishment and force during training sessions to ensure that animals perform on cue when they’re on the set. The spirits of social and intelligent animals, such as chimpanzees and orangutans, must be broken before they can be used as “actors.” Eyewitnesses at California facilities that “train” (i.e., break) great apes have reported seeing workers severely beat baby chimpanzees and orangutans with rocks, broom handles and their fists. Beatings are meted out routinely in order to ensure that the animals remain compliant. After learning about the cruelty in the industry, every one of the top 10 US advertising agencies
signed Peta’s pledge never to use great apes in their work. Between assignments, animals are often stored like props in small, barren cages. And when they are no longer of use, Hollywood animal trainers rarely provide them with appropriate lifetime care. Instead, they may spend the rest of their lives in deplorable conditions in backyard pens or cramped cages. Three chimpanzees used by the trainer who is currently supplying animals for Zoo, for example, were dumped at decrepit roadside zoos with appalling records. And there is no comfort to be taken in the ubiquitous “No Animals Were Harmed” disclaimer by the American Humane Association (AHA). Having its representatives on the set is no guarantee that animals are safe. The AHA
doesn’t oversee the off-site training of animals—where most abuse occurs—or the animals’ living and transport conditions. The AHA does not take into account a trainer’s record of animal-related offenses or violations of the federal Animal Welfare Act. A scathing 2013 exposé that ran in The Hollywood Reporter concluded that AHA monitoring is woefully inadequate and that, as a result, animals used in film and television are frequently put in dangerous situations, injured or even killed. Technology has had a profound impact on the entertainment industry, and it continues to advance by leaps and bounds. Those who are still resorting to the use of live animals may as well go back to using 8 millimeter film—because that’s how far behind they are.
NewsSunday
A6 Sunday, July 19, 2015 • Editor: Vittorio V. Vitug
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No hero’s burial for Ampatuan Sr. in Maguindanao–Mangudadatu
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Philippine Embassy in Iraq repatriates Pinoy workers
OTABATO CITY—The daughter of a Maguindanao Massacre victim received the news of Andal Ampatuan Sr.’s demise with mixed feelings.
Maria Reynafe Momay-Castillo, daughter of photojournalist Reynaldo Momay, said she could hardly understand her feelings. “I don’t want to say, I am happy he died but justice has not been served,” MomayCastillo, said in a phone interview. “But I have forgiven him already. How I wished he sought forgiveness for the sins he committed,” MomayCastillo said of Andal Sr. who was the alleged mastermind of the 2009 Maguindanao Massacre. Momay-Castillo’s father, photojournalist Reynaldo Momay was the 58th massacre victim. His remains had not been recovered but his false denture was retrieved at the massacre site by the Philippine National Police scene of the crime operatives.
“I will continue to hope that the remains of my father will be recovered so we can give him decent burial,” Momay-Castillo said. She was on a short vacation in General Santos City after her mother, Femy, died on June 16. She returned to the US on Saturday. Former Cotabato City Councilor Marino Ridao Sr., father of Anthony, a government employee and one of the massacre victims, said he has forgiven Andal Sr. even before he died. “Deep in my heart I have already forgiven him even before he died,” Ridao said in between sobs. “I believed it is only in forgiving that we are forgiven,” said Ridao, an active member of Knight of Columbus. Anthony was driving his Toyota Tamaraw on his way to Cotabato City
tailing a convoy of vehicles when gunmen flagged down his car. “While I have forgiven Andal Sr., our cry for justice continues, justice must be served,” Ridao said. Maguindanao Gov. Esmael Toto Mangudadatu, who lost his wife Genalyn in the carnage, said he would have wanted Andal Sr. to ask forgiveness for the sins he had committed before he died. Mangudadatu shut down proposals to give the former provincial governor burial honors. “We will not oppose burial for him in Maguindanao, that is his right. But burial honors, no,” Mangudadatu said, adding the Ampatuan patriarch is not a hero who is entitled to burial honors.” PNA
2 more Semirara coal mine mishap victims identified
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AN JOSE, Antique—The two other bodies were recovered on Friday in the landslide that happened at Panian Pit of Semirara Mining and Power Corp. (SMPC) have been identified by their relatives. They are Dexter Daopan and Jack Mandrique, both heavy equipment operators. Presently the five casualties are Ricaredo Panes, Arnold Omac, Alexander Nodo, Daopan and Mandrique. Still missing are Danilo Bayhon, Generoso Talaro, Ian Catulay and Noel Penola. Rescuers were able to rescue on Friday afternoon five miners identified as Brendo Tuarez, Nelson Villamor Sr., Patrick Morgado, Renan Entible and Ricardo Cabrera. They are presently
confined at the company owned SMPC Infirmary Hospital in the island. Gov. Rhodora Cadiao has sent Provincial Disaster Risk Reduction and Management Council (PDRRMC) Officer Broderick Train and Antique Police Provincial Office Director Senior Supt. Edgardo Ordaniel to the island this morning to conduct an inspection and to report to her their observation on the rescue and retrieval operations that is ongoing in the mine site. “There may still be other workers there at the mine site aside from those reported missing by the mining company. We have to rescue them as they may still be alive or retrieve their bodies just in case,” Cadiao said. On the other hand, Caluya Mayor
Genevive Lim-Reyes activated the town’s Incident Command System to coordinate with the rescue and retrieval operations. Reyes also extended all necessary support to the families of the casualties in the landslide and has ordered the Municipal Social Welfare and Development Office to attend to the needs, as well as conduct a debriefing to the immediate members of the families of the victims. Meanwhile, mining operations were suspended to give way to the rescue and retrieval operations. Cadiao is set to convene the PDRRMC on Sunday afternoon at the Sumakwel Hall to discuss the reports of Ordaniel and Train with regard to their inspection of the mine site. PNA
Chargé d’Affaires Elmer G. Cato (left) of the Philippine Embassy in Baghdad bids farewell to three Filipinos who were repatriated from Iraq on Thursday. The three are among several Filipinos who requested the assistance of the Department of Foreign Affairs in going home after their families in the Philippines expressed concern for their security and safety following a series of car bomb explosions in Baghdad. Philippine Embassy Photo
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AGHDAD—The Philippine Embassy has repatriated the first batch of overseas Filipino workers who asked to be brought home after their families expressed fears for their safety, owing to the security situation in Iraq. The Embassy said the first three of 19 Filipino employees of an upscale Baghdad restaurant were repatriated on Thursday and are scheduled to arrive in Manila on Saturday. The rest will be repatriated before the end of the month. Embassy Chargé d’Affaires Elmer G. Cato said several other Filipinos working in other establishments in the Iraqi capital have also reached out to request the assistance of the Department of Foreign Affairs in their repatriation. Cato said the workers, who are among the estimated 1,500 Filipinos in Iraq, had asked to be covered by the mandatory repatriation program being offered by the Philippine government, after they nearly became casualties in two suicide car bomb explosions in Baghdad two months ago. “A number of our kababayan here in Baghdad approached the embassy and said they want to go home because they no longer want to unnecessarily worry their families in the Philippines,” Cato said. Most of those who asked to be repatriated are waiters of a prominent restaurant who were billeted at a hotel in Baghdad’s downtown Karrada District, where a suicide car bomber detonated his vehicle on May 5.
The vehicle exploded just five minutes after most of the Filipinos staying there and in an adjoining building have left for work. Several other Filipinos were inside the hotel when it was hit by the blast that killed four persons and wounded several others. Later that month, another suicide bomb explosion hit two five-star hotels in Baghdad, including one that employed 21 Filipinos, killing six persons and wounding several more. A bomb that detonated near one of the two hotels a few weeks earlier also resulted in several casualties. The attacks prompted the embassy to reiterate its call for Filipinos in Baghdad and other parts of Iraq to seriously consider returning to the Philippines and offered to facilitate their repatriation. A total of 42 Filipinos have now been repatriated under this program. Manila placed most of Iraq under Alert Level 4 (Mandatory Repatriation) after the Islamic State captured the city of Mosul last year. Except for the Kurdistan region in the north, which is under Alert Level 2, most of Iraq remains under Alert Level 4 owing to the volatile security environment in the country. Last month the embassy issued an advisory urging Filipinos in Baghdad and other parts of Iraq to exercise extreme caution and to limit their movements, following a series of bombings and other violent incidents in the past weeks. Filipinos working in Iraq are also being urged to register with the embassy so that they could easily be contacted in case of emergency.
Lawmakers seek House probe of NHA’s payment scheme
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WO party-list lawmakers over the weekend urged the House Committee on Housing and Urban Development to investigate the payment scheme unilaterally imposed by the National Housing Authority (NHA) on relocatees in the government’s Northville resettlement sites in Metro Manila and Central Luzon. In House Resolution 2043, Partylist Reps. Luzviminda C. Ilagan and Emmi A. de Jesus of Gabriela said that there is a need to look into the loan agreement signed by the relocatees which obligates them to pay for the housing units with 6-percent annual interest and 1-percent monthly penalty in cases of default. The Northville housing projects of NHA are in Valenzuela City, Caloocan City, Angeles City in Pampanga and Santa Maria and Marilao in Bulacan. Ilagan said the NHA threatens to padlock the housing units and evict the relocatees for failing to pay their monthly obligations. “[The] NHA should resolve first that a moratorium on the accrual of interest and penalties be made pending the results of the investigation,” Ilagan said. She added that the House Committee on Housing and Urban Development Chairman and Liberal Party Rep. Alfredo Benitez of Negros Occidental should summon the officials of the NHA to shed light on the matter. Moreover, de Jesus said this payment scheme burdens the relocatees of a maximum of 18-percent interest and penalty charges annually—a rate, which is relatively higher than those charged by banking institutions. Jovee Marie N. dela Cruz
RegionsSunday BusinessMirror
www.businessmirror.com.ph • Editor: Dionisio L. Pelayo
Sunday, June 19, 2015 A7
Legislator slammed for ‘insulting’ lumad evacuees
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By Marvyn N. Benaning | Correspondent
HE Makabayan Bloc in the House of Representatives on Saturday assailed a partymate of President Aquino in the Liberal Party (LP) for allegedly insulting lumad evacuees housed in a churchoperated sanctuary in Davao City. “We, the Makabayan Bloc in the House of Representatives, express utter dismay over how our colleague, [LP] Rep. Nancy A. Catamco [of North Cotabato], chairman of the House Committee on Indigenous Peoples and Cultural Communities, disregarded basic parliamentary courtesy and showed egregious disrespect for the sensitivities of Mindanao’s indigenous people during a supposed dialogue with the latter at their evacuation sanctuary in Davao City recently,” the group of legisla-
tors said in a statement. Former Party-list Rep. Satur C. Ocampo of Bayan Muna issued the statement on behalf of the coalition. Ocampo said that Catamco, Party-list Reps. Luzviminda C. Ilagan of Gabriela, Carlos Zarate of Bayan Muna and Terry L. Ridon of Kabataan were invited by the Save our Schools Network to join a National Fact Finding Mission to investigate the alleged harassment and other human-rights violations perpetrated by the military and paramilitary groups against
the lumads in Southern Mindanao. On July 13 the mission went to Cateel, Davao Oriental, and visited a school established by the lumads. The following day, the four legislators met with the lumad evacuees and their datus and leaders at the United Church of Christ Philippines (UCCP) Haran compound in Davao City, during which the evacuees presented several concerns to them, including the military and paramilitary harassments and vilification campaign against the lumads, volunteer teachers and their support groups. At that meeting, Catamco suggested that they meet again the following morning along with officials of the National Commission of Indigenous Peoples (NCIP). The lumad leaders welcomed her suggestion. “Instead of facilitating the dialogue and evincing empathy toward the lumads, Representative Catamco made derogatory and humiliating statements against the evacuees, their tribal leaders and support groups. She gruffly stopped Representative Zarate when he tried to raise a point, telling him, ‘I’m not talking to
you.’ That prompted him to walk out of the dialogue, followed by the lumads and their supporters,” Makabayan said in a statement. “We also decry Representative Catamco’s unilateral decision to invite to the dialogue officers of the Armed Forces Eastern Mindanao Command’s 1003rd [Infantry] Brigade under the 10th Infantry “Agila” Division, when she fully knew that these military officers, along with their underlings and paramilitary groups, have been denounced by the lumads for harassing, intimidating and subjecting them to immeasurable hardship, repeatedly impelling them to leave their communities and seek sanctuary in Davao City and elsewhere,” the legislators said in the satement. “Instead of the NCIP officials, Catamco invited the military and other government agencies and proceeded to strong-arm the evacuees into returning to their homes. She manipulated the whole dialogue and dominated the discussions. She tried to stop the evacuees from expressing their real sentiments and narrating the violations committed against
them by the military,” Makabayan claimed in the statement. “Catamco further humiliated the evacuees when she uttered, “Panguli na mo kay baho na kayo mo diri. [You should go back to your homes because you are already stinky here].” She tried to entice the evacuees to go home by telling them that packed lunch and buses had been prepared for them,” the statement added. “Worse, Catamco went on questioning the datus if they were really tribal leaders, because according to her myopic view, ‘leaders should not leave their communities.’ And she maliciously asked several participants in the dialogue if they were members of the New People’s Army or of non-governmental organizations,” Makabayan added. “Thus the so-called dialogue turned into a mockery. Ultimately, it failed to address the issues of militarization being raised by the evacuees. Her words and deeds were no different in effect from what the military have been inflicting on the lumads— threats, intimidation, harassment and ridicule,” the bloc also said.
The evacuees from Talaingod, Kapalong, Davao del Norte, and from San Fernando, Bukidnon, sought refuge at the UCCP Haran compound owing to alleged repeated threats, harassments and varied forms of abuses by members of the 68th Infantry Battalion. Worse, soldiers forced them to join the paramilitary group Alamara or the Citizens Armed Forces Geographical Unit. “By inviting the military to the supposed dialogue, Catamco practically deceived the lumads who had been complaining against military atrocities and abuses. What she did was not only uncalled for—it was insensitive, insulting to the very people her legislative committee is supposed to look after,” Makabayan also said in the statement. “We view Catamco’s mockery of the dialogue as part of the orchestrated state repression sanctioned by the Aquino administration, which uses the entire state machinery against the people Mr. Aquino calls ‘my bosses.’ Surely the lumads are part of the Filipino people,” the lawmakers said.
South Rail Line to boost SL, Bicol countryside development–Salceda By Johnny C. Nuñez Philippines News Agency
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EGAZPI CITY—The recently announced bidding for the P171-billion South Line of the country’s North-South Railways System elated Albay Gov. Joey S. Salceda who said the project will give a 24-percent boost to countryside development in Bicol and Southern Luzon. The Department of Transportation and Communications (DOTC) recently started the bidding process for the 653-kilometer rail line that will connect Manila and Albay’s capital, Legazpi City. Formerly known as the Bicol Express, the link is the oldest rail system in Southeast Asia. Salceda said the South Rail Project, that he has been pushing for implementation in the past three years, stands out as the biggest single project investment in countryside in Philippine history. It is seen to offer massive growth opportunities for Bicol, particularly Albay, the regional center
and economic hub. The South Rail Line is Salceda’s pet project, coursed through the Bicol Regional Development Council (RDC) and the Luzon Regional Development Committee (RDCom), which he chaired for nine years and six years now, respectively. It was approved by the Cabinet on February 15, after many consultations with the DOTC, the National Economic and Development Authority and the Public-Private Partnership (PPP) Center. Salceda is elated that the project now nears implementation stage “finally after three years of pushing hard by RDC V and Luzon RDCom. This is the biggest investment by the central government in countryside development.” “I am privileged as RDC and Luzon RDCom chairman to have contributed to this major infrastructure project for countryside development,” he said. The RDCom has endorsed the South Rail Project during its recent meeting in Legazpi City, before the publication of the prequalification and
bidding invitations. Salceda said based on market soundings, Ayala, Metro Pacific and San Miguel Infrastructure have expressed strong intent to participate in the bidding. The project is also the government’s most monumental PPP project yet. The South Rail Project is expected to unlock the huge potentials of Bicol, particularly of Albay, the regional center and hub. It completes the multimodal transport model—air, sea, road and rails —for Albay. At the proposed fare rate of P1,300 per passenger, it will provide reliable, comfortable and affordable transport system for commuters between Manila and Bicol, particularly students, workers, traders and vacationists. Aside from travel convenience, Salceda said the project will also boost and expand attractions with the fascinating rural and green Bicol scenery starting from Sipocot town in Camarines Sur, and in Naga City where Mayon starts to become visible, down to Albay
Turtle Islands: Next wildlife sanctuary, tourist destination By Ayunan G. Gunting Special to the BusinessMirror
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IBERAL Party Rep. Ruby M. Sahali of Tawi- Tawi is working to make to make Turtle Islands, a remote town of seven islands, declared as a wildlife sanctuary. Sahali has authored a bill that provides measures to attract tourists while not harming the environment. Visitors are drawn to watch marine and leatherback turtles hatch eggs on Turtle Islands. However, the presence of human beings and other forms of life can frighten them and disorient baby turtles as they crawl out to the sea. The bill aims to protect the turtles through zoning. “There should be a sector for the community and another for the turtles to lay their eggs. That hasn’t been defined. When turtles hear noise or see light, they won’t lay eggs. Where else will they go except in that island?” she says. Her vision is to get funding from the government that would provide the equipment and manpower to protect the turtles. “Tawi-Tawi’s main attractions are its pristine natural beauty, the variety of seafood and the smile of the people. We are a thriving community of Muslims, the Sama tribes that live on the land and the sea, the Badjaos and Tausug...all of whom live in harmony,” she says. Contrary to the news that Tawi-Tawi is in the proximity of battles between the rebels and government troops, the island province has been relatively peaceful. “Although it is near Sulu, Basilan and Zamboanga, Tawi-Tawi has been stable,” Insp. Ritzuel Espiritu of the National Police Special Action Force says. “We have to ensure public safety and internal security over Philippine water and rivers, including ports in Tawi-Tawi, and sustain the protection of the maritime environment,” Insp. Jomz Leonardo Ermino of the National Police’s Maritime Group says. Bongao, the provincial capital, is famous for its stunning hilltop views and coves. Bud Bongao, the highest mountain in the province, is sacred to the locals. They climb up to commune with Allah and ask for miracles. Climbers are greeted by macacaques, local monkeys, who enjoy being fed with bananas. In Panglimasugala, Tawi-Tawi, around 15 weavers were gathered around and sitting on top of their creations—the mysterious and much sought-after baloy. Baloy is the term they use to refer to fantastically hued
Liberal Party Rep. Ruby M. Sahali of Tawi-Tawi with Insp. Jomz Leonardo Ermino of the Maritime Police.
mats made of dyed pandan leaf strips. The Sama Dilaut women weave the mats in their houses. But they brought out the mats for Sahali when she visited the town. Simunul Island, the cradle of Islam in the Philippines, is a heritage site for the tomb of Sheik Karimul Makhdum, the first Muslim missionary who built the country’s first mosque in the 14th century. Dubbed “Venice of the South,” Sitangkai is connected by waterways and foot bridges. Since only mode of transport is the boat, the Badjaos and Samas go about their daily lives on these boats. It also called the carageeneen capital of the Philippines.
where the volcano’s majestic splendor grows even more enchanting, viewed from Polangui town up to Legazpi City. It will also “expand trade and
open more investment opportunities that will make both agricultural and processed products more competitive in the central markets of
Divisoria, bringing in the needed inputs to our industries, and basic commodities to our households,” he added.
2nd Front Page BusinessMirror
A8 Sunday, July 19, 2015
Decline in exports seen to continue
Female aviators in PHL rising, Caap exec says By Lorenz S. Marasigan
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By Bianca Cuaresma
HE declining exports, as seen in May this year, will likely continue until the end of the year, an economist said.
Weekly views from the Metro, the research outlet of Metrobank Group, said that the country’s export number is headed for a “weak year.” “Weak demand from major trading partners continues to drag export growth. China, in particular, showed the deepest contraction—with a 32.2-percent decrease year-on-year from January to May—attributed to the
country’s slowing economy,” the research group said. Research analyst Mabellene Reynaldo from Metrobank also said that the lower exports have been seen as a trend in the rest of the region. “Aside from the Philippines, the rest of Asean [Association of Southeast Asian Nations] are also showing a similar trend, posting
lower exports, given that China is the region’s largest export market and their other trading partners, likewise, showing slowing demand,” Reynaldo said. “Furthermore, soft global commodity prices also dragged values,” she added. The analyst also said that exports are seen to be flat this year, carrying over the weakness seen until the end of the year. “The weak global growth outlook, particularly with uncertainty coming from China and the euro zone, will continue to be downside risks to exports. Base effects will also pull growth performance,” Reynaldo said. “Given this, domestic factors are likely to drive GDP [gross domestic product] growth this year,” she added.
EMALE pilots are rapidly earning their seat in the cockpit alongside their male counterparts, as the demand for more aviators continues to increase in the country and abroad, an official of the Civil Aviation Authority of the Philippines (Caap) said. Data from the aviation-safety regulator showed that there are 25 certified female pilots in the country during the first quarter of this year, a mere 2 percent of the whole pilot pool of the Philippines. Still, this figure is quite significant, Caap Assistant Director General for Flight Standard Inspectorate Service Beda B. Badiola pointed out. “Percentage-wise, it’s still small with only less than 2 percent, but the number is steadily growing. There are a lot of female aircraft commanders now— in Philippine Airlines, Cebu Pacific and even in other airlines,” he said. His daughter, Ileen Badiola-Logos, shifted careers and belatedly went on to become a pilot at 42. At present, there are 2,605 commercial-pilot license holders, 91 helicopter pilots, 538 airline-transport pilots, 66 multicrew pilots, 46 private-helicopter pilots, 2,769 private pilots, 4,074 student-pilot license holders and 68 student helicopter-pilot license grantees in the country. “More women are flying, because the challenge is there. They say it’s a man’s world. But female pilots would say, ‘If you guys can do it, so can we,’” Badiola added.
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GSIS eyes more infra investment T
HE Government Service Insurance System (GSIS) said over the weekend that investing in infrastructure projects will help the country grow faster. GSIS President and General Manager Robert G. Vergara said GSIS investment portfolio as of June 2015 stood at P840 billion, about 2 percent of which was in infrastructure. The GSIS invests heavily on fixed income—comprising 46 percent of its investible funds—about 18 percent invested on equities, 28 percent in loans to members, under 4 percent in real estate, 2 percent in infrastructure and the rest in cash. “We have carved out $400 million in infrastructure. A lot of opportunities are still in infrastructure, and we continue to look at that space. Right now, a lot of investment opportunities we see are in the domestic,” he told the BusinessMirror. Vergara said the GSIS invested in a wind-farm project and was also a part of the consortium that won the bid for the Light Rail Transit expansion. “Depending on our experience on these investments, we could increase our infrastructure investment because it’s an asset class,” he said. Vergara said infrastructure is a type of investment that other pension funds discovered to be a good investment, because it matches their long-term liabilities. “It has regulated returns and it’s predictable, the kind of income that we need,” he said. Vergara said equities investment has not changed much from 18 percent as of end-December 2014 to today’s 18.5 percent. He also targets to increase the loan portfolio to members to enable them to borrow more from the state-owned pension fund. “We would allow them to borrow longer-paying and larger amounts because the amortization is more manageable,” Vergara said. The GSIS has made tremendous growth in its financial performance over the last five years. The net income of the GSIS jumped 215.8 percent to P139.9 billion in 2014, a significant improvement over the prior year’s P44.3-billion result. Total revenues went up to P231.5 billion, 71 percent higher than the P135 billion posted in 2013. Assets increased to P910 billion in 2014, an increase of 15.6 percent from the P788 billion at the end of 2013. The claims and benefits paid to members and pensioners increased to P84.2 billion in 2014, a modest improvement from the previous year. Genivi Factao
‘PSEi could hit 8,081 by end of 2015’ continued from A1
The bullish market could be attributed to positive China data and resolution of the Greece debt turmoil. From April to June 2015, the economy of China rose by 7 percent— surpassing the forecast of 6.9 percent—bringing the first-half gross domestic product to 7 percent and on track to meeting the government’s full-year target. This could be attributed to Chinese policy-makers easing monetary actions over the last few months, including cuts in interest rates and reserve requirement ratio of banks. What is also improving is the manufacturing sector in the world’s most populous nation in June, as industrial output grew 6.8 percent year-on-year compared to the 6-percent target. Retail sales increased in the same month and hit 10.6 percent, as against estimates of 10.2 percent. The Greek debt crisis, on the other hand, is now resolved on an interim basis. This came after the parliament in Athens passed austerity measures, allowing the small European economy to remain in the euro zone and receive a $95-billion bailout. These include an increase in value-added tax on all goods and services, as well as extending retirement age, among others. Meanwhile, the world’s superpower economy has proven resilient in
the face of tumultuous global events. The United States is picking up momentum following the shrinking at a yearly rate of 0.2 percent from January to April this year. On Wednesday US Federal Reserve (the Fed) Chairman Janet Yellen said that the Fed will likely begin to raise interest rates this year had the economic state remained on track. The Fed’s outlook is based on estimates that the labor market continues to improve and inflation starts to move higher toward the 2-percent goal. While the modest signs of improvement of these influences from outside of the country somewhat have eased the concern of the investing public, what now worries them on the local front is the upcoming 2016 presidential polls. With the looming changing of the guard in the country’s top leadership post, the coming electoral exercise usually poses a “risk” in a buoyant market. But it is too early to assume a negative outcome, according to Philam Asset Management Inc. (Pami) President Ferdinand Berba, as the filing of candidacy is scheduled in October this year. “By that time, it’s going to be either a three-cornered race, four-cornered race, or five-cornered race,” he said, while citing the projections of political analysts. Although the identities of the contenders are yet to be known, vari-
ous surveys already have indicated the top 10 “presidentiables”: Vice President Jejomar C. Binay, Sen. Grace Poe, Manila Mayor Joseph Estrada, Davao City Mayor Rodrigo Duterte, Sen. Miriam Defensor-Santiago, Sen. Ferdinand “Bongbong” Marcos Jr., Interior Secretary Manuel Roxas II, Sen. Francis Escudero, Sen. Allan Peter Cayetano and Sen. Antonio Trillanes Jr. Among them, the controversyladen Binay of the United Nationalist Alliance is seen to be the closest archrival of the eventual standard-bearer of the current administration. Just last week, President Aquino met with Poe, Escudero and Roxas, but they failed to reach a consensus on who should be the lead candidate of the Liberal Party, hence, another meeting is set on a yet-to-be-determined date. “It really doesn’t matter who the next president will be. Because if you look at the other elections in the past, or every time [there’s a] new administration, of course, except for Erap [former President Joseph Estrada], the economy is doing well,” he said. Based on a report of Thompson Reuters on the performance of the stock market of the past five administrations, it improved by a bit over 25 percent, when former President Fidel V. Ramos was elected in 1992, and reached up to around 75 percent upon his exit. When Estrada came in 1998, the stocks were up by merely 10 percent, and then they plummeted to at most negative 40 percent, owing to graftand-corruption scandal that led to his ouster in 2001. The equity market’s downfall continued when Gloria Macapagal-Arroyo inherited a distressed government via the Edsa 2 People Power movement; but not until her third year, when she started to bring back investors’ confidence that led to the stocks’ recovery up to her reelection, which marked an optimum improvement level of over 100 percent. But among the successive leaderships, it is during President Aquino’s term that the local stock market has witnessed the highest and most consistent performance since assuming office in May 2010. From over 25-percent growth, the local shares have expanded to almost 150 percent in his five years of tenure. “And that is foreseen to continue, regardless of who the next president will be,” Berba said. “We are growing better than the others. If you look at the other stocks from our neighbors, you’ll see that the PSE index is doing much better than the [region’s benchmark] MSCI [Asia ex-Japan].”