Businessmirror june 07, 2015

A look at some of hacking accusations against China Accusations of hacking by China and Beijing’s counterclaims of such activity by the US government have strained USChinese relations. China has consistently denied cyberspying and says it, too, has been victimized by cyberattacks. Related story on C2

A look at some of the American accusations against China-based hackers:

n June 2015. American officials said on Thursday that China-based hackers are suspected of breaking into the computer networks of the US government personnel office and stealing identifying information of at least 4 million federal workers.

n September 2014. Senate investigators said China’s military had hacked into computer networks of civilian transporta-

three-time rotary club of manila journalism awardee 2006, 2010, 2012

U.N. Media Award 2008

tion companies hired by the Pentagon at least nine times, breaking into computers aboard a commercial ship, targeting logistics companies and uploading malicious software onto an airline’s computers.

n May 2014. US prosecutors accused China of vast business spying and charged five Chinese military officials with hacking into American companies’ computers to steal trade secrets. The companies were big-name American makers of nuclear and solar technology. China objected strongly to the charges and called for a halt against what it called unscrupulous US cyberspying, saying its own investigations “confirmed the existence of snooping activities directed against China.”

n February 2013. American private

security company Mandiant claimed to have traced a massive hacking campaign against US businesses to the Chinese military. After analyzing breaches that compromised more than 140 companies, Mandiant concluded they could be linked to a drab, white 12-story building outside Shanghai run by the People’s Liberation Army’s Unit 61398, a secret Chinese military organization. China’s defense minister called the report deeply flawed.

n 2009. Google Inc. closed its mainland China search engine in 2009, saying it no longer wanted to cooperate with censorship after hacking attacks aimed at stealing the company’s operating code and breaking into e-mail accounts were traced to China. AP

BusinessMirror

www.businessmirror.com.ph

A broader look at today’s business

n Sunday, June 7, 2015 Vol. 10 No. 241

P25.00 nationwide | 7 sections 32 pages | 7 days a week

House OKs Timta despite business-sector opposition

By Jovee Marie N. dela Cruz

week ahead

ECONOMIC DATA PREVIEW Foreign exchange

n Previous week: The local currency trended weaker in the previous week owing to the dollar’s overall strength. On Monday the peso started the week at 44.53 to a dollar, and further declining in value on Tuesday at 44.71 to a dollar. The peso then proceeded to go south at 44.74 against the greenback on Wednesday, and to 44.815 to a dollar on Thursday. The peso ended the week in a five-month low value of 44.87 to a dollar. The total traded volume is at $3.306 billion, higher than the $2.6 billion seen in the previous week. The average value of the peso is also weaker at 44.73 to a dollar, compared to the previous week’s 44.636 to a dollar.

n Week ahead: The peso is seen to be broadly within its movement in the following week as internal and external developments continue to tug the value of the local currency.

“For next week, we expect some consolidation in the US dollar-Philippine peso pair on profit-taking following the greenback’s recent strengthening,” the Bank of the Philippine Islands told its clients.

June 10 Manufacturing (April)

n March manufacturing: The volume of production index at the end of the first quarter of the year rebounded strongly to hit a double-digit growth in March at 13.6 percent, the Philippine Statistics Authority (PSA)

Continued on A2

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ESPITE opposition from foreign and local businessmen, the House of Representatives approved the proposed Tax Incentives Management and Transparency Act (Timta).

House Bill 5831, filed by Liberal Party Rep. Ma. Leonor Gerona-Robredo of Camarines Sur, seeks to monitor the tax incentives granted by the government to several companies.

In a position paper submitted to the House last week, 14 local and foreign business groups, which claim to represent 35,000 business establishments in the country, identified the provisions they want

to scrap in the House’s version of the contentious Timta.

These provisions include the e-filing requirement of the Bureau of Internal Revenue (BIR); the slapping of “steep” penalties for nonsubmission of incentive claims during the prescribed period; and an extension of the BIR’s assessment period.

However, the lower chamber Continued on A2

‘Philippines to continue leading industrial-sector growth in Aspac’

By Roderick L. Abad

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HE Philippine industrial sector will remain the fastest growing in the Asia Pacific on the back of lower operation and labor costs, a real-estate consultancy firm said.

Based on the recently released study of CBRE Aspac, industrial output is seen to grow by 10.8 percent year-on-year this 2015.

The booming industrial field in the country is evident in the fast take-up of economic zones launched in the previous quarters and the manufacturing growth rate last year,

PESO exchange rates n US 44.8080

which stood at 7.5 percent.

At present, there are 316 economic zones nationwide, hosting some of the top global manufacturing and industrial companies.

CBRE Philippines Chairman, Founder and CEO Rick Santos said the country’s edge over its peers in the region is its cheaper price offering in input and work force, plus other perks.

“More companies are putting the Philippines in the spotlight of industrial investments. The country offers low costs in operations and labor, as well as other incentives from the government. Close coordination between the private and public sectors is positively seen

Opec maintains oil-output target

Organization of the Petroleum Exporting Countries (Opec) Secretary-General Abdallah Salem el-Badri of Libya speaks at a news conference after a meeting of the Opec at its headquarters in Vienna, Austria, on Friday. AP/Ronald Zak

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IENNA—The Organization of the Petroleum Exporting Countries (Opec) decided to keep its oil-output target on hold on Friday, and predicted that prices would remain low for the foreseeable future— good news for both oil-hungry international industries and consumers at the gas pump.

The cartel said its output level would remain at 30 million barrels a day, despite the fact that prices were still low compared with a year ago. It left it to member-states to restrain any overproduction, an acknowledgment of the cartel’s inability to enforce its own limits as it struggles to control world supply and prices.

With non-Opec oil-producing countries ready to ramp up production if prices go much

above present levels, the Opec’s secretary-general said the cost of crude will stay relatively low for a while.

“The reality now is that we cannot have these $100 [prices] anymore,” Abdallah Salem elBadri told reporters.

The international price of crude was down $1.62 at $62.10 after Friday’s announcement, having traded above $115 a barrel in 2014.

While the Opec accounts for over a third of the world’s oil, its power to determine supply and demand has been steadily eroding, as outsiders capture large shares of the market. It gave up imposing quotas on individual members four years ago after these were consistently ignored.

That has led to an overhang in recent months of more than 1 million barrels a day of Opec production beyond the target. But the likelihood of continued overproduction persists.

Opec powerhouse Saudi Arabia is fighting to keep market share against US shale oil; Iran plans to increase production in anticipation of an end to sanctions that have crimped its crude exports; and other countries are trying to compensate for low prices by selling more.

“Opec realizes...that it is now in a highly competitive market, in which its own members will compete against each other and collectively against non-Opec producers, and, in particular, shale producers,” said John Hall of See “Opec,” A2

See “Growth,” A2

n japan 0.3603 n UK 68.8699 n HK 5.7803 n CHINA 7.2259 n singapore 33.2625 n australia 34.3725 n EU 50.3866 n SAUDI arabia 11.9488 Source: BSP (5 June 2015)

NewsSunday BusinessMirror

A2 Sunday, June 7, 2015

Growth...

continued from A1

by investors who wish for a more efficient and convenient place of operations,” he said.

Economic zones within and outside Metro Manila still have more sites for prospective investors and locators.

In fact, Philippine Economic Zone Authority Director General Lilia B. de Lima recently said that there is a growing trend of companies wanting to have a good address in the metropolis and, at the same time, willing to venture expanding in provincial areas to avail themselves of the good human resources there.

“We will never run out of people to hire because, in the Philippines, annually, over 1 million Filipinos reach working age,” de Lima boasted.

“So we are prepared for manufacturing. We encourage them to make the Philippines the base [of their operations] to attract some 600 million consumers in the Asean [Association of Southeast Asian Nations] region. That’s the advantage of the Philippines. Our workers— they continue to be the best.”

Outlook...

Apart from the growing interest among the investors, the local manufacturing industry is seen to further improve because of the increasing private consumption pattern in the country at a faster pace of 6 percent in 2015 due to the rising disposable income of the people.

Beyond the entry of multinational companies here, the Philippines is also gaining ground as a top exporter in the region.

Market view on the Asia-Pacific region reveals that exports are expected to increase across all markets this year, with the Philippines taking the lead at a growth rate of 7.9 percent.

More and more manufacturing, electronics and textile production companies are expected to relocate from their traditional base in China to the country and its neighbors in Southeast Asia.

Bullish on this development, the government is taking the initiative to further the infrastructure so as to attract more foreign direct investments and sustain the growth of the industry in the coming years.

continued from A1

reported a month ago. The PSA said eight of the 14 major sectors registered growth, led by petroleum products, followed by basic metals, tobacco products, chemical products, textiles, printing, beverages and leather products.

n April manufacturing: April’s manufacturing data is seen to have cooled down, analysts said, but remained at a positive growth of at a single digit. This commenced as external developments continue to dampen demand as volatile oil prices affect the industry during the month.

June 10 Foreign direct investments (March 2015)

n February FDI: In the central bank’s report last month, the country’s foreign direct investments (FDI) showed a decline of 48.6 percent in the first two

months of the year to hit $622 million.

While February’s inflows alone this year is 17.9 percent higher than the inflows in February this year, this was not enough to cover for the strong 71-percent decline seen in January this year. As such, February’s FDI inflows of $622 million in 2015 is still steeply lower than the $1.209-billion inflows in the same two-month period in 2014.

In February alone, FDI inflows reached $359 million, higher than the $305 million seen in February last year.

n March FDI: FDI is seen to pick up in the coming months, as hinted by the central bank governor, due in part to the nonresidents’ investor confidence to the Philippines particularly now that the foreign banks are allowed to enter the industry. Bianca Cuaresma

news@businessmirror.com.ph

House OKs Timta despite business-sector opposition continued from a1

approved on second reading the proposed Timta, including the said provisions opposed by the business groups.

Under the bill, all registered business entities are required to file their returns and pay their tax liabilities using the electronic system of the BIR.

It added that application for income-tax holiday (ITH) or other income-tax-based incentives or both availment with the Board of Investments and other relevant investment promotion agencies (IPAs) shall be made within six months from the statutatory deadline (April 15) for filing of tax returns and only be accepted upon proof of filing of tax returns using the BIR electronic system; failure to make a valid application within said period results in forfeiture of incentives for the taxable period concerned.

The bill also grants the BOI a period of one year from filing of the application for availment of income-tax holiday or other income-

Opec...

based tax incentives or both to conduct validation of said application and make a recommendation to the BIR.

It mandates that the threeyear prescriptive period of the BIR to make any assessment be toiled to 18 months for business entities registered with the BOI, beginning from the filing of tax returns up to the end of the one-year period of validation by the BOI of applications for availment of incometax holiday; the said prescriptive, hence, runs not upon the filing of tax returns but upon the end of the one-year period for the BOI to make a validation of said applications for availment of ITH and other income-based taxed incentives.

The measure mandates the Department of Finance (DOF) to maintain a single database for tax incentives data submitted by the BIR and the Bureau of Customs for purposes of monitoring and analysis of tax incentives granted.

The bill also directs the DOF to submit to the Department of Budget and Management the actual,

continued from A1

Alfa Energy in London.

Announcing the decision to keep the present target, an Opec statement urged members “to adhere to it.”

But al-Badri, the secretary general, acknowledged that, as in the past, countries had only been assigned “indicators”—not quotas —in attempts to hew to the target.

In contrast, Saudi and Iranian

comments on Friday reflected the countries’ determination to produce what they decide.

“Production policy is a sovereign right,” Naimi told reporters.

Iranian Petroleum Minister Bijar Namdar Zangeneh, meanwhile, advised Opec to make room for increased output from his country as early as the end of the month. That’s the target date for a deal between

estimate, programmed and projected tax incentives, which shall thereafter be reflected by the latter in a section in the annual Budget Expenditure and Sources of Financing (BESF), to be known as the Tax Incentives Information section, and the BESF shall be referred to the President and Congress.

The measure also provides that the National Economic and Development Authority (Neda) is mandated to conduct cost-benefit analysis on the incentives to determine the impact of tax incentives on the Philippine economy.

“All heads of the IPAs shall submit to the Neda investmentrelated data that shall include, but not limited to, the list of registered business entities, investment projects, investment cost, actual employment and export earnings,” the measure said.

The bill also said that the repeated violations of the act shall be penalized with the cancellation of the registration of the registered business entity.

“Any government official or employee who fails without justifiable reason to provide or furnish data or information, as required under this act, shall be punished by a fine equivalent to that official’s or employee’s basic salary for a period of one month to six months or by suspension from government service for not more than one year, or both, in addition to any criminal and administrative penalties imposable under existing laws,” it said.

Robredo said the approval of her measure is one big step to fight corruption in the government.

She also said the Timta is in support with the Aquino administration’s goal to fight corruption, as the measure seeks to promote transparency and accountability in the grant and administration of tax incentives.

“With the passage of this bill, all the agencies will now comply to one system of reporting. Also with this measure, we will now determine if the government loses or gains when it is giving tax incentives,” Robredo said.

Tehran and six world powers envisaging an end to sanctions on the Islamic Republic in exchange for curbs on its nuclear program.

Iran hopes to ramp up production by up to 1 million barrels a day within a year once sanctions are gone, and Zangeneh said his country doesn’t “need any decision from the Opec side to return to the market, because it’s our right.”

Opec powerhouse Saudi Arabia and their Gulf allies are best set to continue all-out producing—

even though they, like others, are selling at a loss.

But they can afford to do so.

The Saudi sovereign wealth fund stands at over $700 billion and the coffers of the other Gulf nations are also well stocked. The Saudis, who effectively set Opec policy, were the prime drivers in the decision last November to keep the 30-million-barrel-a-day target, the seventh time in three years that the group opted for the status quo. AP

EconomySunday

www.businessmirror.com.ph • Editor: Vittorio V. Vitug

Lawmaker seeks to outlaw grant of allowance to COA auditors

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t’s time to ban the grant of honoraria or additional allowances to officials and personnel of the Commission on Audit (COA) assigned to government offices, Rep. Erlpe John M. Amante of Agusan del Norte declared over the weekend.

“We should preserve the independence, morality and integrity of the Commission on Audit, and assure the people there are concrete safeguards in the government spending of public funds,” stressed Amante, author of House Bill (HB) 5352.

Amante is pushing for the passage of HB 5352, or the proposed Anti-Patronage in State Auditing Act of 2015.

HB 5352 is “An Act Prohibiting Government Entities Including Government-owned or -controlled Corporations and the Local Government Units to Allocate Funds for the Additional Compensation, Allowances, Honoraria, Bonuses or Other Emoluments to the Officials and Personnel of Commission on Audit Stationed or Assigned in their Tespective Offices Thereby Strengthening the Independence, Morality and Integrity of the Commission on Audit and for Other Purposes.”

Although Section 18 of Republic Act (RA) 6758, or the Compensation and Position Classification Act of 1989, provides for this prohibition, the enactment of the Local Government Code of 1991 created confusion whether the provision of the code authorizing the local government units (LGUs), subject to the condition that if their local finances allow, automatically and impliedly repeal the provision of RA 6758 on the prohibition on the COA officials and personnel to receive additional compensation from the LGUs. In his explanatory note, Amante cited the case of Villarama v. COA, GR No. 145383-84, dated August 6, 2003, the Supreme Court decided that the apparent inconsistency with the two laws should be reconciled by regarding the prohibition stated in RA 6758 as an exception or limitation to the authority of local legislative bodies under RA 7160.

“Though there are existing ruling of the High Court and memorandum orders from the COA regarding this matter, there are still LGUs and resident COA auditors who are continuing this practice,” he disclosed. In fact, Amante added, there are still resident COA auditors who present and defend their annual allocation from the LGU before the Sandiganbayan for the inclusion in the annual LGU budget.

“With this scenario, we can never discount and remove in the minds of our people that there are possibilities that they may be influenced by their benefactor LGU,” the author surmised.

HB 5352 provides that any official or personnel of the COA found violating this Act shall, upon conviction, be punished with imprisonment of six months and one day to 12 years, perpetual disqualification from public office, and shall refund all those previously received additional compensation, allowances, honoraria, bonuses and other emoluments. PNA

BusinessMirror

LP poised to beef up ‘election war chest’ with proposed P3-trillion 2016 natl budget

B

By Marvyn N. Benaning

udget Secretary Florencio B. Abad is buttressing the election war chest of Liberal Party (LP) presidential candidate Mar Roxas using the proposed P3-trillion national budget for 2016.

At a news briefing on Saturday, Partylist Rep. Terry L. Ridon of Kabataan warned that Abad and his cohorts at the Department of Budget and Management (DBM) will be allegedly fattening a number of congressmen, governors and mayors with grease from the proposed General Appropriations Act (GAA), which Abad wants to increase to P3 trillion

from the current P2.6-trillion.

With P400 billion to play around with, President Aquino and the LP will create hundreds of new projects for vote-rich provinces and other local government units in the hope of winning votes for Roxas, whose political fortunes sagged when he was trounced by Vice President Jejomar C. Binay in the 2010 elections.

Comply with the law, TNC operators told

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ransportation network companies (TNCs) like Uber and GrabCar, are here to stay, but they, according to government officials, must abide by the law.

This was the reaction of Department of Transportation and Communications (DOTC) Spokesman Michael Arthur C. Sagcal and Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Winston M. Ginez to the call of Rep. Raneo B. Abu of the Second District of Batangas for TNCs to immediately stop their operations.

He said the operations of companies are considered illegal, as they have yet to apply for a franchise before the regulator.

Ginez confirmed this in a text message.

“None has applied,” he said briefly.

The LTFRB issued last month a memorandum requiring TNCs to apply for accreditation before the regulator by submitting a list of requirements and paying a nonrefundable fee of P10,000.

“We are calling on the TNCs to comply with our new rules,” Sagcal said. “We issue the new rules to improve the transport services in the Philippines.”

The spokesman added that the new rules are also issued to help “motivate” taxis to improve their services.

“We did this in accordance with our mandate. So long as we are in accordance with the law, we see no reason to cease from doing so,” Sagcal said. Lorenz S. Marasigaan

Life and Style Expo RCBC Savings Bank President Rommel Latinazo cuts the banner to welcome guests to the three-day Life and Style Expo that the bank is holding from Friday to Sunday at the Midtown Atrium of Robinsons Place Manila. PNA

Metro Cebu power supply restored as Naga plant resumes operation

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EBU CITY—The Visayas Electric Co. (Veco) said power supply within its franchise area in Metro Cebu has returned to normalcy after the 100-megawatt Unit 1 of Kepco-Salcon Power Plant (KSPP) in the city of Naga in southern Cebu resumed operations.

Risa Coloyan, Veco corporate communications department supervisor, said they have also stopped implementing rotational brownouts.

Normal power supply in Naga and Minglanilla were restored at 2 p.m. on Thursday.

But Engineer Rey Maleza, supervisor of the Energy Industry and Management Division of the Department of Energy (DOE) 7, said emergency load drops were

Sunday, June 7, 2015 A3

implemented in the Visayas grid starting at 2:47 p.m. on Thursday, due to the tripping off of 45-megawatt Panay Diesel Power Plant.

The Mactan Electric Co. (Meco) implemented rotational brownouts in Barangays Pusok and Soong in Lapu-Lapu City and Ibabao in Cordova for about two hours starting at 2 p.m. on Thursday.

The normal power supply, however, was back at 4:30 p.m. in the entire service area of Meco.

Rotational brownouts were implemented by Veco, Meco and other power cooperatives in the Visayas, after the 200-megawatt power plant of KSPP went offline after its crusher building caught fire on Saturday. PNA

The DBM disclosed earlier it wants a 15-percent increase in the national budget for 2016. “Expect the 2016 national budget to be loaded with infrastructure projects, lump sums for questionable programs, and various nefarious items all aimed at funding the 2016 election stint of the ruling party,” Ridon said.

The youth lawmaker pointed out that even the P2.6-trillion national budget is already ridden with “hidden pork projects” that aim to solidify the ruling party’s position in the coming elections.

During the budget deliberations last year, Ridon and his colleagues in the Makabayan bloc pointed out several anomalies and “hidden pork” in the 2015 national budget.

The legislator feared that, with a budget that essentially “legalized” the “savings scheme” of the Disbursement Acceleration Program, the LP and its allies will be able to divert public funds to their election war chest.

“The 2015 budget will undoubtedly authorize corruption-ridden transactions in the run-up for the presidential elections.

The same could be said of the 2016 budget,” Ridon warned.

DBM has yet to submit the 2016 national budget proposal to the President for review.

The budget is set to be submitted to Congress a day after the last State of the Nation Address of President Aquino on July 27. With Jovee Marie N. dela Cruz

SundayV

Busine

A4 Sunday, June 7, 2015

editorial

Are we losing our paradise island?

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WENTY-FIVE years ago, Boracay Island was an undiscovered paradise, with most accommodations made of nipa and bamboo.

One hotel had the island’s only swimming pool and if you ordered one of the famous mango shakes, someone had to crank up a small generator to run the blender. Foreign backpackers found a place to sleep for P50 a night and the barbecue vendors were able to turn a profit, selling a single stick for five bucks.

Now Boracay is five-star resorts and the fast-food restaurants that you can find on most any corner of Metro Manila. The flashlight that you had to carry at night to get from one place to another has been replaced with electricity that is more reliable than in some other parts of the country.

However, all that economic progress has come at a price that may have been too high.

Concern over the Boracay environment has always been a critical topic in discussing expansion and modernization. It has been the responsibility of both the national and local governments.

But the ultimate accountability has been in the hands of those that own and operate the local businesses and the people who live on the island.

Twenty years ago, it seemed that all stakeholders were more concerned about preserving Boracay’s paradise environment. But something went terribly wrong along the way.

The government has been pushing hard to boost tourist arrivals, and it shows in the numbers from Boracay. Tourism to Boracay rose 38 percent just from 2010 to 2015. But since the 1990s, it was not the backpackers that the island businesses and the government wanted to attract, and high-spending tourists want more than a P50 nipa hut.

While being assured by the resort developers and builders carrying government permits that every proper precaution would be taken with the environment, all parties have failed at their duty.

According to a study by the Japanese and Philippine governments, the coral cover in the area has declined 70 percent over a period of only two decades. This is a disaster.

Boracay is also experiencing a shrinking beach area from sand erosion, which was confirmed when Japanese and Filipino scientists installed cameras in select locations. University of the Philippines scientist Miguel Fortes also says that water-quality level at the eastern part of Boracay beach is alarming, making it unsafe for swimming.

Thailand experienced the same water-quality issues at the famed Pattaya Beach area north of Bangkok, which eventually got so bad that the government had to completely close down the ocean at certain areas around the bay.

It is too bad that the government is spending tens of millions of pesos on “climate change,” while allowing the waters around the jewel in the crown of Philippine tourism to turn into a dumping ground for the discharge of untreated wastewater.

The developers and government may find that their environmental neglect may eventually kill the goose that laid the golden tourism egg. Like the folk song says, “Don’t it always seem to go that you don’t know what you’ve got till it’s gone.”

Opec opens the oil spigots A

Bloomberg View

Leonid Bershidsky

Gospel

Sunday, June 7, 2015

S expected, the Organization of the Petroleum Exporting Countries (Opec) agreed on Friday to maintain crude-oil production at 30 million barrels a day. In effect, that means a license for both Opec and non-Opec producers to increase output as they see fit. Saudi Arabia intends to continue its price war on US shale that was interrupted by the recent speculative upswing in crude prices.

Oil prices plummeted last year after Opec, led by the Saudis, refused to cut output in response to a global glut. That has already cost the oil industry about 100,000 jobs and as much as $1 trillion in scrapped investment projects. Yet, the main players have only increased output.

In April, according to the International Energy Agency, Opec supply was at 31.2 million barrels a day, the highest since September 2012. That was the 12th consecutive month that Opec production was above the official 30-million-barrel limit, and Saudi Arabia was pumping as fast as it could, keeping its output above 10 million barrels a day.

Its enthusiasm was, however, surpassed by the biggest non-Opec oil power, Russia. In May it extracted 10.7 million barrels per day, compared with the Saudis’ 10.2 million.

It was the first time Russia took the global lead since 2010.

The US oil industry, too, did its best to show it was not intimidated. In May it produced an average of 9.4 million barrels of crude per day, 2.7 percent more than in January and the most since 1972.

That provided a nice backdrop to the gung-ho speech by ConocoPhillips CEO Ryan Lance at this week’s Opec conference.

“This business will survive at

A

$100 Brent oil pricing, and it will survive at $60 to $70 Brent pricing,” he said, adding that a 15-percent to 30-percent drop in production costs in recent months allows the best US frackers to stay profitable even with Brent crude at $40.

That last bit of bravado is either unjustified or irrelevant to traditional producers trying to put pressure on US shale. The US Energy Information Administration expects US crude production to start going down this month and to keep falling through September before growth resumes.

According to analysis by Bloomberg Intelligence, prices predicted by the futures market wouldn’t be sufficiently high to get US oil companies to start unsealing drilled but uncompleted wells.

That, however, is hardly a satisfactory result for the Saudis. Like Lance, Saudi Oil Minister Ali al-Naimi is putting on a brave face: On Monday he said things were moving “in the right direction,” and the Saudi strategy was working to reduce supply as demand increased. But he can’t really be happy until he’s put the up-start Americans in their place.

The biggest obstacle to that is the oil price: It’s too high, higher than is necessary to make frackers bleed rather than just squirm.

All those production records and the de-facto absence of an Opec output ceiling have been unable to lower it enough, largely because of speculators. In May money managers still had a net long position in oil futures and options, expecting prices to rise.

It’s hard to find a rational explanation for these expectations.

With oil supply still growing faster than demand, it can hardly be sustainable, and the expected US

ND on the first day of unleavened bread, when they sacrificed the Passover lamb, His disciples said to Him, “Where will You have us go and prepare for You to eat the Passover?”

And He sent two of His disciples, and said to them, “Go into the city, and a man carrying a jar of water will meet you; follow him, and wherever he enters, say to the householder, ‘The Teacher says, Where is my guest room? Where am I to eat the Passover with my disciples?

And he will show you a large upper room furnished and ready; there to prepare for us.”

And the disciples set out and went to the city, and found

production drop in the summer months won’t be big enough to help.

The Opec decision sent the price lower, to below $62 per barrel of Brent from above $65 just two days ago, but that’s not a big change, either.

Perhaps, Iran will set off the next downward slide if it does a deal with the rest of the world on the future of its nuclear program. Sanctions on the oil industry would be lifted, and Iran would ultimately be able to increase its exports by as much as 1 million barrels a day. Apparently, this wouldn’t affect the increasingly fictional Opec production quota.

“You know that production is a sovereign right,” al-Naimi said on Friday, adding that Iran was free to produce as much as it wanted. In other words, the sky, not 30 million barrels per day, is the real output limit, and the Saudis will welcome anyone willing and able to pump more oil so its attack on frackers can resume.

Both Saudi Arabia and Russia are now prepared for lower prices. The Saudi budget was drafted last December, when the price was about $60 per barrel, but the country can take much more pain, thanks to its $731-billion sovereign wealth fund.

Russia’s budget is based on $50 per barrel and, because the price is higher, the ruble has also been stronger than the Russian authorities want, forcing the central bank to buy dollars and euros. Neither of the oilmarket leaders wants the pain of last year’s price drop to have been in vain, and they haven’t secured their market share yet.

For now, financial speculators are playing an outsize role in maintaining the current price equilibrium.

Once something spooks them, frackers will be in for another round of shock therapy.

it as He had told them; and they prepared the Passover.

And as they were eating, He took bread, blessed, and broke it, and gave it to them, and said, “Take; this is My Body.”

And He took a cup, and when He had given thanks, He gave it to them, and they all drank of it. And He said to them, “This is my blood of the covenant, which is poured out for many. Truly, I say to you, I shall not drink again of the fruit of the vine until that day when I drink it new in the kingdom of God.” And when they had sung a hymn, they went out to the Mount of Olives.— Mark 14:12-16, 22-26

Voices

essMirror

opinion@businessmirror.com.ph • Sunday, June 7, 2015 A5

Hong Kong embraces China’s bubble B Bloomberg View William Pesek

ILL Gross of Janus Capital says his next great short trade may be Chinese stocks. With the Shenzhen and Shanghai markets up another 9 percent this week, it’s not hard to understand why. But the investment guru might want to consider betting against Hong Kong, too, given that city’s continued courting of high-volume traders from mainland China.

Hong Kong’s trading tax has generally dissuaded the West’s highfrequency trading firms from doing business there. But the city’s stock exchange is now explicitly enticing China’s hundreds of millions of eager day traders—whose frenetic high-volume investing can be just as volatile as that of high-frequency trading technology—to take advantage of the mainland’s new financial

link with the city. Years from now, Hong Kong will almost certainly regret extending the invitation.

There are now more stock-trading accounts in mainland China than there are people in Brazil— more than 200 million, and counting. Surging stocks have become the Communist Party’s catch-all strategy amid the country’s economic downturn, a way to help companies cut debt, boost local-government revenues, and accelerate the government’s privatization plans.

But it has also instilled a sense of irrational exuberance among Chinese traders who are ignoring China’s worsening economic outlook. On Friday the Shanghai Composite Index climbed above 5,000 for the first time in seven years; gross has been especially transfixed by

the 190-percent jump in Shenzhen stocks in the past 12 months, a rally he calls “almost hyperbolic.”

A case in point is China National Nuclear Power, which attracted $273 billion of bids this week for a $2-billion share sale. Meanwhile, shares of the 144 companies that went public this year are up an average 539 percent so far (44-percent increase on the first day of trading). There seems to be little immediate incentive for investors to slow their trading.

Hong Kong, which had previously been separated from China financial free-for-all, is now keen to join the party. So keen, in fact, that it’s forgetting the basics that made Hong Kong a model for freemarket enthusiasts. The city’s low taxes, unfettered capital flows and

rule of law routinely earn recognition as the world’s freest economy.

In its haste to win more mainland money, though, Hong Kong is now risking its reputation for sound and dispassionate management. Introducing the mainland’s high-frequency-trading dynamic could open it to all kinds of dodgy dealings (as Nick Leeson, the rogue trader who brought down a major British bank 20 years ago, warned last month).

In the short term, Hong Kong markets can expect an increase in volatility, as hundreds of millions of mainland traders start heading Hong Kong’s way. The value of the 10 Hong Kong shares most often traded by mainland investors more than tripled in April, increasing at almost twice the rate as the bench-

mark Hang Seng Index. It’s only a matter of time until that surge, and others like it, reverses itself.

Hong Kong should focus on improving its financial infrastructure. At the very least, it should create a so-called circuit-breaker mechanism, which would allow it to temporarily halt trading activity if prices plunge too suddenly.

It also should consider halting the use of its stock-market link with mainland China until the city’s regulators are ready for the oncoming waves of volatility.

It’s understandable that Hong Kong sees mainlanders as a ready source of market liquidity. But they shouldn’t be surprised if Gross and his peers start seeing Hong Kong’s stock market as the next great short trade.

Santorum’s wrong; Pope Francis’s environmental teachings are important

By Stephen Seufert

The Philadelphia Inquirer (TNS)

R

ICK Santorum recently spoke with Philadelphia radio host Dom Giordano about Pope Francis and his planned visit to the city in September. Santorum, the former Pennsylvania senator and current Republican presidential hopeful, praised the pope for “his focus on making sure that we have a healthier society” and said, “I support completely the pope’s call for us to do more to create opportunities for people to be able to rise in society and care for the poor. That’s our obligation as a society.”

If Santorum had left it at that, there would be no problem. Unfortunately, he didn’t. When asked about the pope’s upcoming encyclical on the environment, Santorum said, “The Church has gotten it wrong a few times on science, and I think we’re probably better off leaving science to the scientists and focus

on what we’re really good on, which is theology and morality. When we get involved with political and controversial scientific theories, then I think the Church is probably not as forceful and credible.”

Santorum added that when Catholic bishops “get involved with agriculture policy, or things like that that are really outside the scope of what the Church’s main message is, that we’re better off sticking to things that are really the core teachings of the Church, as opposed to getting involved with every other kind of issue that happens to be popular at the time.”

Being responsible stewards of the planet is not an issue because society currently deems it popular.

This focus on the environment will not diminish the way a child loses interest in a long-forgotten favorite toy of yesteryears. As students of history know, the Catholic Church was promoting responsible environmental stewardship long before

it was deemed cool or popular. Furthermore, the relationship between Catholicism and science has largely been one of cooperation, not conflict.

Whether it be through universities or hospitals, Catholics have been consistently active in advancing the sciences in various fields of study— ranging from Galileo and physics to Mendel and genetics.

The Vatican even has its own scientific research department, called the Pontifical Academy of Sciences.

Its stated mission is “to honor pure science wherever it may be found, ensure its freedom, and encourage research for the progress of science.”

Throughout its existence—its roots extend to the Academy of the Lynxes, founded in 1603—the academy’s members have won at least 48 Nobel Prizes. I agree with Santorum that the Church should leave science to scientists. Any rational person should defer to the experts. Furthermore, academic reports from experts should be used by elected officials to

make informed, fact-based decisions that benefit the common good.

So what do scientists who study climate change have to say? A report

by Nasa shows that 97 percent of climate scientists agree the theory of climate change is negatively affecting the planet and that human activity is a leading contributor.

Statistically speaking, 97 percent is a consensus, hardly among what Santorum calls “controversial scientific theories.” Santorum is also correct that the Church has gotten it wrong on science in the past. But the very nature of science allows for mistakes.

That’s why there are hypotheses and theories.

Scientists who disagree with climate change are obligated to challenge the current theory. Thus far, there has been no compelling countertheory to climate change.

Catholics are called to address the pressing political issues of their time. Why else would Santorum mention his Catholic faith on the

campaign trail, if not to influence the political debate?

In “The Joy of the Gospel,” an apostolic exhortation, Pope Francis quotes Pope Benedict XVI, declaring, “The Earth is our common home and all of us are brothers and sisters. If indeed ‘the just ordering of society and of the state is a central responsibility of politics,’ the Church ‘cannot and must not remain on the sidelines in the fight for justice.’” With an encyclical on the environment, Pope Francis would be doing his part to protect and defend a planet we share with current and future generations. Nothing is more Christian or moral than promoting environment-friendly ideas aimed at uplifting all of humanity. The promotion and protection of life are of paramount concern for Catholics.

Therefore, if Rick Santorum is truly a faithful defender and promoter of life, he will come to embrace the teachings of Pope Francis on the environment.

Immigration, myths and Europe R

Inter Press Service Roberto Savio

OME—With little fanfare, the German IFO Institute for Economic Research recently published a report on population projections for Germany, which states simply that the country’s population is shrinking fast.

The country has lost 1.5 million inhabitants since the last census in 2011, and it is estimated that it will have fallen from the 82.5 million in 2003 to 66 million in 2060, when Great Britain (if it still exists as such), will be the most populated country in Europe.

Meanwhile, a European Commission Population Policy Acceptance study found that 23 percent of German males thought that “zero” was the ideal family size, and this, despite the €243 billion that the government spends each year in family subsidies.

The IFO report also states that, without immigrant families, the number of newly-born children would only reach 400,000 in a country of 82 million, and that even if German couples were to start having children again, it would take two decades to have citizens contributing to the social system.

It concludes that a decline in income and productivity because of the aging population is a serious concern for everybody for the near future.

This is happening in the European country which has most immigrants—close to 10 million. Last year Germany accepted almost 700,000 immigrants, placing itself after the United States in terms of numbers. Nevertheless, even with that “open” policy, its population is destined to a massive decline.

“Instead of opposing populist parties with a campaign of facts, European governments try to neutralize them by incorporating their requests.”

At European level, we see the same chilling trend. According to population projections from Eurostat, the official statistical agency of the European Union, the projected values for Europe’s population “are unprecedented in any human population.”

It says that “whereas in 1960 there were on average about three youngsters [aged 0 to 14 years] for every elderly person [aged 65 or over], by 2060 there may be more than two elderly people for each youngster: In other words, more grandparents for fewer grandchildren than in the past.”

Let us add to all this a Migration Policy Debate paper issued in 2014 by the Organization for Economic Cooperation and Development, which states that ”contrary to widespread public belief, low-

educated immigrants have a better fiscal position—the difference between their contributions and the benefits they receive—than their native born peers.”

“Where immigrants have a less favorable fiscal position, this is not driven by a greater dependence on social benefits, but rather by the fact they often have lower wages and thus tend to contribute less….

Efforts to better integrate immigrants should be seen as an investment rather than a cost.”

Finally, the United Kingdom government has declared that, although migrants make up only 8 percent of the population, they contribute 10 percent to the country’s gross domestic product, and that the economic growth rate of the UK would be some 0.5 percent lower for the next two years if net immigration were to cease.

Now, what is impressive is that those data remain for the specialists even though they have vital political implications. No newspaper has been publishing them and no parliamentarian—let alone government—has used them.

This simply because we now have anti-immigration (and usually right-wing and anti-euro) political parties which have sprung up in every European country, especially since the financial crisis of 2008,

and this argument is now taboo.

The fact that the UN Population Fund considers that Europe will no longer be competitive in just a few decades, because its aging population will not be competitive and a major burden on the social system, unless it opens the door to at least 10 million people, is totally ignored.

Instead of opposing populist parties with a campaign of facts, European governments try to neutralize them by incorporating their requests. After the anti-immigrant and anti-euro UK Independence Party took 4 million votes in May’s general elections, Prime Minister David Cameron has embarked on a campaign among European colleagues to demand that he be allowed to expel European immigrants if they do not find a job within six months and, among others, cancel their rights to social benefits. This is a brilliant example of the difference between a statesman and a politician. A statesman does what is good for his country, even if that costs him dear.

When German Chancellor Helmut Khol was in favor of European integration and the euro, he had to face very hostile public opinion. For the Germans, the Deutsche mark was a symbol of stability and trust, and the idea of a new currency shared with other less responsible people revived memories of the hyperinflation of

the Weimar Republic. At the same time, Europeans were suspicious of German intentions.

Kohl decided to accept a nonGerman, Wim Duisenberg of the Netherlands, as the first governor of the European Central Bank to make the Euro possible.

Today the existence of Pegida, a German far-right anti-Islam political organization which boasts of a few thousand members at most, is enough to paralyze Chancellor Angela Merkel, a politician. She has voiced her opposition to the quota proposed by the European Union for sharing the load of immigrants entering Europe via the Mediterranean. Her position has immediately been shared by France, with the UK and Denmark asking to be left out, and several Eastern and Central Europe countries agitating against immigrants…even though they are the countries which provide the bulk of internal immigrants in Europe!

So, we have the data, the projections and the hard fact that Europe is heading for decline, unless it changes policy and acts to increase its population. And, speaking of projections, in the meantime, the population of Africa is expected to double.

When will the European political class wake up and realize that time is passing?

NewsSunday BusinessMirror

A6 Sunday, June 7, 2015 • Editor: Vittorio V. Vitug

www.businessmirror.com.ph

Solon to Lina: Implement top-to-bottom revamp at BOC

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By Jovee Marie N. dela Cruz

o stamp out rampant graft and corruption reportedly besetting the Bureau of Customs (BOC), a member of the House of Representatives on Saturday urged Customs Commissioner Alberto D. Lina to implement a top-to-bottom revamp at the agency.

Nationalist People’s Coalition Rep. Rodolfo Albano III of Isabela, a senior member of the minority bloc, said the BOC should also create a professional “meritocracy” among its personnel that could improve services to the public and allow the agency to hit its annual revenue targets.

The lawmaker, citing reports, said corruption has worsened in the second-biggest revenue-collection arm of the government.

Albano cited media reports that Lina declared “that he has no plans yet of implementing a revamp at the BOC” amid complaints of worsening red tape and graft and corruption practices in the bureau.

“The cancer of corruption in the BOC must be excised once and for all, and Commissioner Lina should adopt an iron-fist policy with resolute and utmost political will to surgically clean up the agency,” said Albano, House contingent head for the minority bloc of the Commission on Appointments.

“A top-to-bottom revamp at the BOC is one of the feasible surgical solutions to excise this cancer,” Albano stressed, adding, “Com-

missioner Bert Lina should have his own team and rid the bureau of nonteam players.”

Albano said the persistent problem of missing container vans resulting in billions worth of lost government revenues, delay in the release of container vans and cargo at the Manila port and the continuing failure of the BOC to meet collection targets are the sordid results because of unbridled corruption and extortion at the Customs bureau.

Earlier, the Social Weather Stations (SWS) said the BOC tops the list of “most corrupt government office in the country.”

The survey result of the SWS Survey of Enterprises on Corruption for 2013 said the BOC got a “very bad” rating of -63 for 2013, which, in effect, worsened compared to the -46 “bad” rating the agency received in 2012.

Moreover, Albano said the survey result was a clear proof that graft and corruption, abuse and the ever-worsening red tape is firmly entrenched in the entire BOC system, which officials and employees nurture as a bureaucratic subculture.

BSP DEMONETIZATION BRIEFING IN DAVAO

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo (left photo, center) led a multisectoral briefing at the BSP Davao Regional Office to remind the public that the old banknote series launched in 1985 can only be used for daily transactions up to December 31. Starting January 1, 2016, the old banknote series can only be exchanged in banks or at the BSP. Effective 2017, the series will be demonetized and can no longer be used in daily transactions nor exchanged at banks or at the BSP. With Guinigundo are Director Fe de la Cruz of the BSP Corporate Affairs Office and Acting Director Perry Dequita of the Davao Regional Office. The briefing was attended by retailers, bankers, representatives from transport groups, other government agencies and members of the local press. Posters featuring the demonetization schedule were distributed to the participants. [Right photo] Also during the briefing, the BSP discussed security features of the new banknote series which was launched in December 2010.

Youths ask Congress to pass a BBL ‘superior’ than ARMM law

By Manuel T. Cayon

Mindanao Bureau Chief

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AVAO CITY—Young men and women from various parts of Mindanao have appealed to Congress to pass a “superior” Bangsamoro basic law (BBL) if they decide to thrash the original version submitted to them.

In a manifesto at the end of the June 2 to 4 conference in Cotabato City, the 400 representatives called on both the Senate and the House of Representatives to pass “a Bangsamoro basic law that is stronger than the law that created the Autonomous Region in Muslim Mindanao [ARMM].”

The call came in the wake of warnings from senators and congressmen aggrieved with the death of the 44 police commandos that they would ensure the death of the BBL submitted by the Moro Islamic Liberation Front and endorsed by Malacañang.

The youths were also alarmed at the promise of lawmakers that they would produce their own version of the BBL but which would already skip the “essential element of consultation.”

“The 400 participants reiterated that the youths are the hope of the future and they want to help achieve peace and development in the region,” said Isa Tom del Monte,

executive director of the Coordinating and Development Office on Bangsamoro Youth Affairs of the ARMM. He said that the manifesto wanted to “remind the leaders that apathy will be developed from the people if leaders would not help improve the peoples’ lives.”

“The three-day conference not only provided awareness to the participants but it was also a moment of reflection where they realized the important role the youth plays in society,” del Monte said.

He said the youth wanted “to help the people of ARMM in enhancing the delivery of education, health and government services, strengthen lo-

cal government units and recognize the role of women in development.”

The youth leaders were among the movers of a signature campaign launched by the ARMM government, titled “I Value Life, I Sign For Peace,” which already gathered 100,000 signatures.

The campaign aims at generating at least 1 million signatures “in support of the ongoing peace process and the call to end the wars in Mindanao,” a communication from the ARMM Bureau of Public Information said.

Del Monte said the signatures were gathered from individuals, organizations and institutions nationwide.

‘End political dynasties by changing Constitution’

By Rene Acosta

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HE only way to end political dynasties is to change the Constitution, former Chief Justice Reynato S. Puno said on Saturday as he led the launch of “Bagong Sistema, Bagong Pagasa,” a new movement seeking to change the country’s political system by revising the 1987 Charter.

Puno is leading the movement to press the President and Congress to call for a constitutional convention (Con-con) to propose changes to the Constitution.

“We cannot eliminate political dynasties by relying on Congress to pass the necessary laws,” Puno told a crowd of almost 3,000 that attended a gathering of advocates of constitutional change at the San Andres Sports Complex in Manila, and the thousands more gathered in at least 11 regions who watched him through Internet live streaming.

The elimination of political dynasties is one good reason for changing the 1987 Constitution, Puno said.

“The only way to eliminate political dynasties is through the Constitution, by providing a self-executing provision that does not need any implementing law from Congress,” Puno pointed out.

Nearly 30 years after the 1987 Constitution took effect, which prohibits political dynasties “in accordance with law,” Congress has yet to pass any law to give flesh to the constitutional provision.

Puno described political dynasties as “the modern resurrections of the discredited monarchs, kings and queens of the medieval times [who] believe that political power comes from bloodline and not from the ballot box.”

“We will never attain full democracy until we eliminate these political dynasties, for in a true democracy political power cannot be a monopoly of a few but should be in the hands of the many,” he said.

Puno had earlier called for revision of the Constitution as the alternative to the proposed Bangsamoro basic law now pending in Congress.

In his speech on Saturday, Puno reiterated that the Mindanao problem cannot be solved by a mere law that will establish a Bangsamoro government.

Said Puno: “Mali po iyang sistemang ginagawa natin upang magkaroon ng kapayapaan sa Mindanao. Bumuo tayo ng panukalang batas, iyang BBL at iyong Framework Agreement. Dito sa BBL, binibigyan natin

Former Chief Justice Reynato S. Puno leads the launch of Bagong Sistema, Bagong Pagasa: A Call for System Change on Saturday at the San Andres Sports Complex, where he also presented the mechanics for the convening of a constitutional convention as the alternative platform to address national issues, including the ratification of the proposed Bangsamoro basic law, that require the revision of the 1987 Constitution. The event was attended by representatives of different sectors. ALYSA SALEN ang Bangsamoro ng ibang structure of government, ng iba’t-ibang kapangyarihan na higit pa sa ipinagkaloob ng ARMM [Autonomous Region in Muslim Mindanao]. Wala pong masama dito kung ito ang pangangailangan nila, kung ito ang tunay na magdudulot ng kapayapaan sa Mindanao. Ngunit ang tanong po ay maibibigay ba natin ito, magagawa ba natin ito ng hindi natin nilalabag ang ating 1987 Constitution?”

Puno said Congress cannot give the powers demanded in the BBL “without destroying the unitary character of our government, without violating our 1987 Constitution,” even as he warned of a crisis regardless of the fate of BBL. “Kaya po sinasabi natin na nasa crisis tayo, dahil ang sitwasyon natin ay isang no-win situation. Kapag hindi pinagtibay ang BBL, may gulo sa Mindanao.

Kapag pinagtibay ng walang pagbabago, ito ay labag sa Saligang Batas at ibabasura ng Korte Suprema, at gulo sa Mindanao.

Kapag pinagtibay ng maraming amienda, gulo pa din dahil it will not satisfy anybody,” he pointed out.

The solution, he said, is to bring the Mindanao issue before a Con-con so that the proper framework for the distribution of power can be put in a new Constitution.

“That way, the solution will be permanent,” Puno said.

He said the problem in Mindanao

is about balance of power—between the national government and Muslim Mindanao, between the national government and local governments, between the three branches of government, even the powers of the constitutional commissions.

Puno also proposed that socioeconomic rights should be included in the Bill of Rights, like political and civil rights, so that they become “demandable” and the poor have a better chance of improving their lot in society.

But he said the Con-con must truly represent the interest of the Filipino people and not be dominated by traditional politicians, political parties, political dynasties and interest groups.

“To make this happen, we must have both elected delegates and those who will be appointed as representatives of different sectors of society, and from the ranks of national luminaries known for their integrity, probity and patriotism.”

He proposed that the election of delegates be held simultaneously with next year’s presidential elections.

Puno said having both elected and appointed delegates to a Con-con is not new, citing the case of Australia when it amended its constitution in 1998.

The Australian Con-con had equal number of elected and appointed delegates, he noted.

RegionsSunday BusinessMirror

www.businessmirror.com.ph • Editor: Dionisio L. Pelayo

Sunday, June 7, 2015 A7

Crooked government men prey on Koreans

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By Ashley Manabat | Correspondent

LARK FREEPORT—There is a pervading air of uneasiness hanging over the South Korean community in nearby Angeles City just outside the Friendship Gate of this free port with the government’s seeming apathy toward their welfare.

This developed even as they assured the good health of their compatriots who recently arrived from South Korea in the light of the spreading Middle East Respiratory Syn-

drome-Corona Virus (MERS-COV) contamination in their country.

The president of the Korean Community Association Central Luzon Inc. (KCACLI) said they are saddened

Alviera leaps forward as Phase 1 development surges

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LARK FREEPORT—Despite a brewing controversy with militant peasant groups, Alviera, the 1,100-hectare large-scale master-planned development of Ayala Land Inc. (ALI), continues to move forward with its Phase 1 development.

During a media forum at the Prism Lounge of the Widus Hotel and Casino here, Alviera General Manager John Estacio said Phase 1 will see the rise of the industrial park, country club, three residential communities and two academic institutions spread over 207 hectares.

A joint venture of ALI and Leonio Land Holdings, Alviera will be built at a cost of over P90 billion over its project life. “We’re in the middle of Phase 1 developments which will be undertaken over the next three years at the cost of P7.3 billion,” Estacio said.

Embankment works have now been completed in priority areas and soon to be followed by land-development works and utilities which will include a seamless road connection from Alviera to the Subic-Clark Tarlac Expressway, he added.

Duplicating the success of its Laguna Technopark in the south, ALI envisions the Alviera Industrial Park (AIP) as the driver of economic activity in the region.

Sixteen lots on the 31-hectare industrial park have already been sold, according to Estacio. Three clusters of standard factory buildings (SFB) are still available for lease, he added. The SFB floor area totals 20,000 square meters available for lease with rental rate starting at P150 to P200 per sq m per month.

AIP is seen to complement the industrial hubs in Clark and Subic targeting companies in light to medium, nonpolluting enterprises.

A slideshow during the forum showed that Avida Land, Alveo Land and Ayala Land Premier are all offering a broad range of residential options for the growing Alviera community. About 1,500 residential units will be ready by the end of Phase 1 devel-

peace in ourtime

opment, it was learned.

Avida Settings Alviera offers houses and lots, and lots alone, ranging in size from 125 sq mto 313 sq m. About 85 percent of the residential units have been sold out. The community will rise across Alviera’s future city center, Estacio said.

Alveo will launch its Phase 1 project in the middle of the year with about 784 units of prime lots with scenic views of the mountain range.

Estacio said lot cuts will be from 250 sq m to 542 sq m in size. This new residential community will lie beside Miriam College. Holy Angel University is also set to build a campus in Alviera.

Ayala Land Premier’s project will have the lowest density and the largest lot cuts of 450 sq m to 1,400 sq m. The community will be launched later this year and will rise beside the six-hectare Alviera Country Club.

Designed by the renowned architectural firm Leandro V. Locsin and Partners, the country club promises to be an iconic structure in Pampanga which will feature pools, a kids’ area, wellness spa, sports facilities, entertainment facilities with active sports bar, event areas like meeting rooms, a boardroom, a multipurpose hall and ballrooms that can accommodate as much as 500 to 600 guests. It will have a main restaurant and a specialty restaurant.

Alviera Country Club will be managed by the Ayala Club Management Inc., which also manages Anvaya Cove and South Links Golf Club. Club shares go for P580,000 for individuals and P950,000 for corporate shares.

“People can expect retail in Alviera as residential units are turned over. The retail development will follow the buildup of population in the development.

Currently, we are developing a retail program for SandBox at Alviera given that the park has been getting a lot of visitors, most of which are from Central Luzon and Metro Manila,” Estacio said. Ashley Manabat

by some of their compatriots who give in to bribery just to have peace and settle down quietly.

But even with this development, KCACLI President Kim Ki-young also gave his assurance that South Koreans who recently arrived here from South Korea are now being monitored by their community primarily for health reasons owing to the MERS-COV scare.

KCACLI Vice President Kim Taeyoung said there are more than 20,000 South Koreans and some 150 business establishments in the South Korean community excluding investor-locators in this free port.

The Phoenix Semiconductor Philippines Corp. (PSPC), a South Korean company which specializes in packaging and testing semiconductors, is the top locator here with roughly P7.6

billion in investments here.

Ruperto Cruz, chairman of the advocacy group Pinoy Gumising Ka Movement (PGKM), earlier urged the government to be fair in dealing with South Koreans especially those who invest in the community.

Cruz said the South Koreans should be given credit for resurrecting the Friendship Area from being a ghost town into a thriving business community now.

During a media forum here, a South Korean businessman narrated how he was victimized by customs personnel when he arrived in the country onboard an Asiana Airlines flight. “They opened all the bags and took whatever they want,” he lamented.

He said he went through the Chek Lap Kok Airport in Hong Kong onboard a Cebu Pacific flight and

never experienced being harassed by customs personnel.

Another South Korean said they are being shaken down for money even if they try to seek the assistance of government agencies.

Kim admitted that some South Koreans want to settle down in peace that’s why they negotiate. “We do not know what happens after that,” he added.

Meanwhile, KCACLI Secretary Chung Su-min said among the South Korean organizations in their community include Korean schools, a culture center, Korean safety measure community and its affiliated groups, church council, missionaries’ council, athletic associations, South Korean travel agencies council, women association, youth association and the Korean elders’ association.

Kim said they want the government to realize that more South Korean investors would be coming here if their problems are resolved.

He said as a sign of cooperation, the KCACLI is now currently installing 16 CCTV cameras along the Friendship highway in the South Korean community to help the local police fight crime.

The KCACLI has also established the Fil-Kor police for the longest time to help monitor peace and order in their area. Kim said the government’s positive response to their plight will have a big impact on would be investors.

The KCACLI said they are also monitoring the cases of South Korean investors locked up in controversy with government agencies as they call for “fair treatment” on their cases.

Angeles City council opposes P7-B project in Clark

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NGELES CITY—The Sangguniang Panlungsod (SP) is opposing the construction of structures along Manuel A. Roxas Avenue at Clark Field, which is parallel to Don Juico Avenue along the south perimeter fence of the Clark Freeport here.

Sponsored by Councilor Max Sangil, Resolution 7184, S-2015 opposed the construction of any structure in the said area. The said resolution was unanimously approved by the city council during its Regular Session 15 on June 2.

This means that Singapore-based Capilion Corp. Pte. Ltd., which has committed to invest P7 billion for the long-term lease and development of a 3-hectare lot in the area, will have to scout for another site.

“Whereas, it has been a matter of policy that no structures or edifices will be built or established in the aforesaid area which is significant as a buffer zone since the American time,” the resolution read.

“Whereas, the structures will disturb the aesthetic structure of the area… a great concern with regard to traffic gridlock may occur in case of business establishments be constructed in the said area,” it added as it cites “certain environmental issues with regard to the construction of those structures which may result to the cutting of age-old trees.”

The resolution was co-sponsored by Councilors Amos B. Rivera, Maricel G. Morales, Bryan Matthew C. Nepomuceno and Alexander P. Indiongco. It was seconded by Councilors Arvin M. Suller, Danica A. Lacson, Carmelo G. Lazatin Jr. and Carlito M. Ganzon.

Meanwhile, the Clark Development Corp. (CDC) said the area earmarked for the Capilion project has been cleared for mix-land use by the CDC Board.

Noel Tulabut, CDC-External Affairs Department assistant manager, also said a traffic study plan was required

by CDC and such study will be submitted by Capilion to CDC as required.

Peace advocates belonging to Sending Good Vives stage a mass action for peace at the open grounds of a mall.

Fernando Diaz (inset), founder of Sending Good Vives, said the rally was held in commemoration of the 70th anniversary of the end of World War II. “We must never forget the lessons that war brings to people’s lives. We cannot measure the massive destruction, deaths and grief that WW II and the Japanese Occupation of the Philippines brought to the Filipino people. The horrific effects of armed conflicts on the lives of the people cannot be defined by words alone,” Diaz said.

On the environmental impact, Tulabut said “nothing has been earmarked for the cutting or transfer of trees. If and when the project begins, CDC will require Capilion to submit its plan.” He said, “CDC would not hesitate to impose sanctions just in case there would be any violations.”

CDC President Arthur P. Tugade earlier said Capilion is the biggest contract to be signed by his administration in terms of employment generation estimated at 75,000 in seven years.

Capilion was established in 2006 in

Singapore to act as an international private equity and corporate finance advisory firm. It is part of the Capilion Group of Companies, Capilion Financial Ltd. and Capilion RE Engineering Ltd. The Capilion Group has businesses involved in private equity, corporate services, real estate, financial securities, ship ownership, shipping and shipbuilding, infrastructure development and clean and renewable-energy projects.

It also has investments in different countries such as in the securities indus-

try in Indonesia, a ferry project in China, a biofuel plant in Indonesia, infrastructure in Kyrgyzstan, a monorail project in India, and various other real-estate projects in Southeast Asia.

Following the signing of the lease agreement, Capilion presented to CDC demand drafts worth $4.9 million (approximately P215 million) to represent the firm’s advance lease, security deposit and performance security plus a reservation for another 8,639 square meters adjacent to its property. Ashley Manabat

2nd Front Page BusinessMirror

A8 Sunday, June 7, 2015

Taiwanese investors leaving China for PHL

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By Recto Mercene

T least 100,000 tourists a month would come to the Philippines from Taipei in the wake of the signing of the air-service agreement (ASA) between the two countries, Ambassador Gary Song-Huann Lin said in a speech before the Taiwan Alumni Association on Saturday.

Lin said that from the current 28 flights a week between Manila and Taipei, the frequency would be increased to accommodate the growing number of Taiwanese tourists coming to the country. He failed to mention how many new additional flights would be mounted.

Lin said the new ASA would allow Taiwan to mount charter flights direct to Boracay, Puerto Princesa City, and other places in Palawan and Cebu.

Owing to the economic slow-

down in China, Taiwanese investors have turned their attention to the Philippines, Lin said.

Proof of this, he said, is that Taiwanese investors had bought P17.9 billion worth of shares of Rizal Commercial Banking Corp., adding that there were other Taiwanese investors who do not want their names mentioned “so as not to alert the competition from other countries.”

At the same time, Lin said the 7-Eleven franchise stores have invested to put up 1,000 more shops

Visitors review new Asus computer products at the Computex trade show in Taipei, Taiwan, on Tuesday at Computex, one of the world’s largest IT and computer trade shows. AP/Wally Santana

in Metro Manila.

“The target is to increase that number to double or three times more, so that every corner in Manila would have a 7-Eleven store.”

“These stores are not only convenience shops but they provide service to the community,” Lin added.

He said that since Taiwan offered scholarships for postgraduate studies, Taipei had graduated about 100 students from different schools in the country for the last 10 years.

“Taiwan offers from five to 10

scholarships a year,” he said, providing free tuition and stipend to Filipino students.

On Saturday about 20 alumni gathered in a Makati restaurant, sponsored by the Taiwan Economic Cooperation Office, to participate in their yearly gathering, exchanging experiences and recalling their happy times spent in Taiwan.

Many of the alumni are now employed in prestigious companies, while others are in key government positions.

www.businessmirror.com.ph

GDP deceleration won’t affect credit rating–analyst

By Bianca Cuaresma

T

HE country’s disappointing expansion—as well as the problem of government underspending—will not drag the Philippines’s sovereign rating downward even in the near to medium term, an international credit watcher said.

Moody’s Investors Service Vice President and Senior Analyst Christian de Guzman told the BusinessMirror that the rating firm remains optimistic on the prospects of the country, despite the deceleration of the economy’s expansion to 5.2 percent from January to March this year.

“While the Philippines’s GDP [gross domestic product] growth in the first quarter eased below market expectations and the government’s growth target, it continued to be healthier than many similarly rated peer countries,” de Guzman said.

De Guzman also affirmed the country’s “stable” sovereign outlook, given the most recent assessment of the balance of risks on the economy.

A stable outlook means that the country will likely be able to sustain its current sovereign standing in the next 12 to 18 months.

“…the balance of risks—including, perhaps, increased political noise ahead of next May’s elections—supports the stable outlook on our ‘Baa2’ rating at this time,” de Guzman said.

DE GUZMAN: “The Philippines continued to be healthier than many similarly rated peer countries.”

The Philippine Statistics Authority recently reported that the economy decelerated and grew at its slowest pace in three years in the first quarter of the year.

The lower-than-expected growth has been attributed to the weak export receipts, as well as the government’s failure to disburse programmed funds for economic projects during the period.

Despite this, the Moody’s analyst said most of the economic indicators of the country still remained in strength during the period.

“More important, slower growth did not negatively affect the other facets of the country’s sovereign credit profile: fiscal deficits continue to be at a level that facilitates debt reduction, while the balance of payments remains healthy, as evidenced by the accumulation of foreign reserves since the end of 2014,” de Guzman said.

“Private-sector investment remains healthy, boding well for growth going forward,” he added.

Youth groups warn Poe: Don’t let Aquino partymates use you

Protect the soil Sen. Cynthia A. Villar, chairman of the Senate Committee on Agriculture and Food, cuts the ceremonial ribbon at the opening of the Healthy Soils for a Healthy Life exhibit at the Senate. The United Nations Food and Agriculture Organization (FAO) declared 2015 as International Year of the Soils to raise awareness on the importance of soils for food security and essential ecosystem functions. Also in the photo are Sen. Loren Legarda, Senate Secretary Oscar G. Yabes and Aries Portugal, assistant FAO representative to the Philippines. ROY DOMINGO

BPI’s agri loans up, but still short on agri-agra compliance

By Genivi Factao

D

ESPITE the growth in its agribusiness loans, the Bank of the Philippine Islands (BPI) still fell short of its compliance to the mandatory lending under the agri-agra law.

Perlina Padilla, BPI assistant vice president and agribusiness head, said total loans to the agriculture sector grew 34 percent year-on-year in 2014, but still short by P8.7 billion, in terms of compliance with the agri-agra law.

“Under the agri-agra law, all banks have to set aside 25 percent of their total loanable funds

for agriculture, or else you will be penalized. It is 0.125 percent per quarter, for deficiency or noncompliance,” she told the BusinessMirror.

“BPI was penalized more than P100 million on an annualized basis, and this forms part of the bank’s expenditures. We have always been told to ‘avoid the penalty’ so many times,” she said.

But, despite the penalty, BPI’s agribusiness still managed to post a net income.

The bank supports agricultural projects that are viable, to ensure that borrowers can also pay their loans. Some of the bank’s clients were contract growers of San

Miguel Foods, Bounty Fresh and Foster Foods. The bank can lend up to a maximum of P12 million for contract growers.

The bank also has piggery partners, and has lent funds to swine raisers. The loanable amount is P10 million to P140 million.

Padilla said they stopped lending to those with conventional poultry housing, and they cater only to those with state-of-the-art housing facilities.

“We stopped lending to conventional poultry because of the risks.

If there’s a typhoon, the conventional poultry house will collapse easily. We lend to those with stateof-the-art facilities, like those with

air-conditioned facilities,” she said.

Not all were qualified to loan because of certain requirements set by the bank, such as collaterals and documents like the income-tax return.

“We don’t have the infrastructure to lend to small farmers, but we can lend to cooperatives, rural banks and financial institutions with agri projects,” she said.

“We can’t just give out loans, because we also protect the deposits of our depositors,” she added.

BPI’s average interest rate for agri-business loan is 6 percent. The short-term loan is six months to one year, medium-term loan is five years, and the long-term loan is six to 10 years.

By Marvyn N. Benaning | Correspondent

S

EN. Grace Poe should not allow herself to be used by Aquino political allies as presidential candidate in exchange for guarantees that the current Chief Executive, budget secretary, Senate President and Cabinet members would not be prosecuted should she win the May 9, 2016, race.

The Kabataan party-list group, Anakbayan, League of Filipino Students and the National Union of Students of the Philippines called on Poe to “stand above the trappings of traditional politics and dare to POe defy the current administration.”

Talk is rife that Poe would run for President despite questions about her citizenship, her being a naturalborn Filipino and her residency, with critics saying that her declaration in her certificate of candidacy in 2013 showed that her residency was only six years and six months.

Filed under oath, Poe needs six months from the filing of her candidacy in October 2015 to complete the 10-year constitutional rule on residency for anyone to qualify to run for president or vice president.

“If the good senator pushes through with her plan to run for President, we urge her not to give in to the sweet talk of the Aquino administration. We need a candidate who is committed to pursuing justice, truth and accountability, not a compromising presidential aspirant who would readily sacrifice his or her beliefs just to get the blessing of the current administration,” Party-list Rep. Terry Ridon of Kabataan said.

For Anakbayan Chairman Vencer Crisostomo, the call for justice and accountability should be a central point of discussion in the run-up to the 2016 elections.

“We need leaders who will commit to exacting justice for the crimes of the present government, not leaders who will just bury the hatchet. Aquino is surely looking for a successor who will absolve him from Disbursement Acceleration Program (DAP), the abuses of the Priority Development Assistance Fund or pork barrel and Mamasapano. We sincerely hope that Senator Poe will not fall prey to Mr. Aquino’s machinations,” Crisostomo warned.

League of Filipino Students spokesman Charisse Bañez said the discourse on the upcoming polls should not be limited to issues of eligibility.

“There should be enough of the petty debates on residency and eligibility. What we need is to begin the conversation on our demands as a people, demands for better living conditions, jobs, genuine agrarian reform and free education. We should not let those in power to dominate and steer the conversation to serve their agenda. Senator Poe, if you will push through with your presidential run, please deviate from the way of the trapos [traditional politicians] and stand for the Filipino people,” Bañez added.