Businessmirror june 12, 2015

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Saturday 18, 2014 10 No.Vol. 40 n Friday, June 12,Vol.2015 10 No. 246

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CONGRESS DISAPPOINTS BUSINESS GROUPS ANEW AS SPEAKER ADMITS TIME NO LONGER ON HIS SIDE

Belmonte gives up on economic Cha-cha INSIDE

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iffy time for iggy G

Life

An authentic life of discipleship

OOD Lord, we know that it is the Holy Spirit who enriches us with His seven gifts, and who brings about in us that abundance of virtuous dispositions that call His “fruits,” and that are the signs and means of an authentic life of discipleship. Pentecost then, is not the nostalgic commemoration of an extraordinary event buried in the sands of the past. Rather, it is the yearly culminating celebration of a perennial event—the life—giving presence of the Spirit in the Church today. Amen.

WORD AND LIFE, FR. SAL PUTZU, SDB AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

GAB FAB: WEIGHTY ISSUES WITH DREW »D4

BusinessMirror

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

Friday, June 12, 2015

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An iffy time for Iggy Azalea B G D. K Los Angeles Times

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HIS time last year Iggy Azalea was riding a wave.

Between her hit single “Fancy” and a collaboration with Ariana Grande, Azalea was dominating radio dials and the pop conversation. Her dual summer smashes broke all kinds of records, and the steam from her breakout yielded her billing at festivals, such as Made in America, performance slots on virtually every single music awards show and multiple Grammy nominations, including record of the year and new artist.

However, as the cliché goes, what a difference a year makes. And these days, her stock appears to have hit its lowest point.

Just a week after announcing a headlining arena tour was scrapped, Azalea has pulled out

of yet another high-profile gig: After ongoing controversy tied to her booking, the Australian pop-rapper has canceled a performance at Pittsburgh Pride planned for this weekend.

“This has been a difficult decision, as I truly support the event and, Lesbians, Gays, Bisexuals, Transgenders [LGBT], Intersexes, Queers and Allies communities, however I feel my participation at this point would only serve to further distract from the true purpose of the event,” she wrote in a statement.

When it was announced that Azalea would perform at Pittsburgh’s LGBT celebration, it drew the ire of many, given the performer had been called out repeatedly for a series of old, off-color tweets.

In one of the cleaner ones, which she wrote in 2010 and has since deleted, she said: “When guys whisper in each other’s ears I always think it’s kind of homo.”

Another old deleted message contained a

slur directed at lesbians.

Because of Azalea’s booking, several LGBT-friendly groups pulled out of the event in protest of her appearance.

This included the local chapter of the Gay, Lesbian and Straight Education Network and a Unitarian church.

“I am a firm believer in equality. Unfortunately in the past as a young person, I used words I should not have. The last thing I want is for something so carelessly said to be interpreted as reflective of my character,” Azalea’s statement said.

“I meant no harm and deeply regret ever uttering those words.

As an adult I would never use them because I understand they play a detrimental role in the fight for issues

C  D

life

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best even at rest BusinessMirror

E1 | Friday, June 12, 2015 | Editor: Tet Andolong

The besT,

Flat out quick

the 2.0-liter cRDi turbocharged and intercooled diesel engine can outrun bigger displacements.

even aT resT Story & photos by Ronald Rey M. de los Reyes

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Now a household name among the local motoring media, the annual Toyota Road Trek again swept the hearts and minds of journalists, who took a breathtaking drive to scenic spots and faced mind-boggling challenges while being treated to a welldeserved respite from everyday life.

Over the past 11 years, the Toyota Road Trek has earned the reputation as an event that offers one exciting adventure after another. From Iloilo and Aklan, where it first started back in 2004, to Cagayan de Oro and Davao the following year, to Dumaguete, Pampanga and so forth, the affair has never failed to impress.

And while we frolicked on the white sands of Boracay last year, this time, we were whisked further down south to Cebu’s uncharted northern regions of Daanbantayan.

As soon as we arrived in Mactan

airport in Lapu-Lapu City one early Sunday morning, all 30 media particpants were immediately brought to Toyota’s 25,000-square-meter dealership in South Mandaue for breakfast and a briefing. With a full belly and a bit of know-how, we proceeded to the parking lot, where a row of 10 Toyota vehicles eagerly waited for us. These included a Wigo, Vios, Altis, Camry, Yaris, Innova, RAV 4, Fortuner, FJ Cruiser and the Hi-Ace LXV. Since the Road Trek wouldn’t be the same without any challenges along the way, Toyota made sure to pit us against some mindtwisters. First, we were tasked to form as many rice casings (or “Puso”) as possible using banana leaves and to count the number of bridges from the showroom all the way to our final destination.

“The Road Trek is our way of

thanking the media,” Toyota Motor Philippines VP for Marketing Sherwin Chua-Lim said.

“Here, our aim is to build friendship with them,” he added.

Our team was composed of Auto Review father-and-son tandem Ron de los Reyes and this writer together with C! Magazine’s Carl Cunanan in the Innova. The seven-seater’s 2.5-liter D-4D common rail turbo diesel engine powered through steep mountain roads and maneuvered well in tight bends. Thanks to its lean muscle. The MPV delivered 102 hp of power and 260 N-m torque.

After about 50 kilometers of driving in the hilly outskirts, we arrived at our first pit stop challenge at Canso X in Balamban. Here, the test was to build a pyramid of plastic cups while only using take note strings. Part of the challenge was to screen air currents that were coming from all directions on the windy hill,. The team that finished first got top points.

With all our troubles, we were lucky to finish third in the activity.

From Balamban, we were steered 80 km north to San Remigio Beach Club, where another set of activities awaited us. “Stick and Balls Won’t Hurt Your Bones” was what they called it. The goal was to take out all the sticks as carefully as possible so as to keep the plastic balls from falling. The 10 teams, divided equally into five, competed headto-head against each other for the least amount of balls until the container was emptied. With a little caress and a bit of physics, the team, luckily, took third.

Before heading toward our next destination, the organizers ordered a car-switch so that the participants could try out other Toyota vehicles.

From a box of keys, a Toyota Vios

1.5 TRD key slipped right into our hands. It was timely as the pressure of competition and fatigue from the sleepless nights were slowly catching up. On our part, it was about time to, at least, experience firsthand “Waku-Doki” in Cebu, not on a racetrack though, like the one recently held in SRP, but on real onroad driving conditions. This looker still has basically a 1.5-L VVT-i engine that makes 107 ps of power and 142 N-m of torque. Just think of it that this TRD version is just a little sporty compared to a regular one, or in short, a tad cooler on the road as you’re almost-sure to swoon the ladies with its nasty side skirts, rear bumper and trunk lid spoilers and 17-inch TRD alloy wheels with center cap and tire valve.

For our final challenge, the convoy had to traverse a 10-km stretch via

the Cebu North Hagnaya Wharf Road before reaching Queens Island Golf Club in Medellin. There, another challenge trampled on egos, fed insecurities and raised blood pressures. The tests included guessing the Toyota vehicle with its corresponding tagline given and naming the favorite Cebuano delicacy with only riddles written on clue cards to work with.

After a whole day of activities, the time came for a 30-minute drive toward seventh heaven. The place? The recently opened Kandaya Resort in Aguho, Daan-Bantayan Cebu. Nestled on a white sandy beach, this newly explored sanctuary has 22 villas and 18 elegantly styled rooms. Reaching the sweet haven was like winning the gold after an agonizing anaerobic 400-meter dash or a mother’s indescribable glee upon seeing her new-

born child after hours of labor.

The resort was a perfect place to relax and rejuvenate. Away from the usual hustle and bustle of the Metro, we were able to enjoy a two-hour back-and-forth trip to Malapascua Island onboard a yacht, go snorkeling, feast on sumptuous seafood, paddleboard, box, workout and even play basketball in their various sports facilities.

To top it off, legendary Filipino rock artist Ely Buendia took hearts away as he sang and strummed into the night with some classic favorites.

Now, before we end the story, this writer has to say that it’s not easy being Toyota. Being the No. 1 player in the industry, the company has to live up to its reputation in each and every situation, even at play or at rest, they still have to consistently be the best.

Motoring

On “KASANGGA MO ANG LANGIT SA IZ” “[Ang isyu ng Epal] sa ngayon, hindi na ito usapang legal kundi usapang moral.”— Commission on Elections Chairman Andres D. Bautista www.dwiz882.com

he 16th Congress adjourned and began on Thursday a six-week break without the House of Representatives adopting the amendments to the economic provisions of the 1987 Constitution, boosting the likelihood of the measure eventually failing to successfully navigate the legislative process.

Speaker Feliciano Belmonte Jr. told reporters,after the adjournment sine die ceremony of Congress, of the aborted plan to put to a vote the so-called Resolution of Both Houses 1 (RBH 1) on Wednesday because the leadership did not have the numbers to get approval.

“It is now unlikely to be passed.

We did not have the numbers [during the last day of the session], so we

Motoring

NE’S dominance, or anything else for that matter, can only go the distance if one knows how to balance work and play, with the former, obviously, chalking up the better half of the equilibrium. As for the country’s imperious automotive sales leader, rest seems to be obsolete in Toyota Motor Philippines’s illustrious vocabulary—well, not until recently.

By Jovee Marie N. dela Cruz

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decided we did not like to take the risk,” Belmonte said.

At least 217 (three-fourths), votes were needed for RBH 1 to hurdle the final reading at the lower chamber. There were 267 lawmakers present during the last day of the session.

Earlier, Belmonte said the measure should be passed before the Continued on A2

Foreign capital exodus soared 18 times in May

By Bianca Cuaresma

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he exodus of foreign capital—considered only a trickle in March and April this year—ramped up more than 18 times in May to $569.3 million, latest data from the Bangko Sentral ng Pilipinas show.

From only $21.6 million in March to $31.1 million the following April, the net outward flow of foreign capital, also known as “hot” or speculative funds, accelerated to $569.3 million, as temperatures begin to climb in May. The exodus was a turnaround

PESO exchange rates n US 44.9660

from year-ago inflows of $545 million, and one more manifestation of the mind-set among foreign fund managers already looking forward to when the US Federal Reserve (the Fed) finally begins tightening the monetary levers, as the world’s largest economy begins to normalize.

Gross outflows of $2.10 billion in March moderated to only $1.95 billion in April, but promptly racheted up to $2.16 billion again in May, as the US reported substantially improved employment data that boosted the view that soon the US Fed were to begin raising interest rates.

ALC Group of Companies Founder and Chairman Emeritus Ambassador Antonio L. Cabangon Chua (center) receives a special award from the Rotary Club of Manila during the Rotary Club of Manila Journalism Awards 2015 held at a hotel in Makati City. Presenting the award are (from left) Journalism Awards Committee Past Vice President Fausto Preysler, Rotary Club Manila President Frank A. Evaristo, Sen. Grace Poe and former Bulacan Gov. Roberto M. Pagdanganan. ALYSA SALEN

BusinessMirror FOUNDER HONORED BY ROTARY CLUB

By David Cagahastian

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he Rotary Club of Manila has cited BusinessMirror founder Ambassador Antonio L. Cabangon Chua for his numerous contributions to the development of Philippine journalism toward its vital role in building the nation.

The Rotary Club of Manila’s prestigious annual Journalism Awards, held in Makati City on Thursday, recognized the exemplary performance and work ethics of the awardees, as well as their

dedication to strictly uphold journalism ethics and press freedom.

The Rotary Club of Manila’s Journalism Awards is recognized by the Rotary International, and the awardees are automatically nominated for the International Journalism Awards of Rotary International.

Sen. Grace Poe, the guest of honor and speaker in the event, cited the role of journalists in bringing relevant and timely information to the people to allow them to make informed decisions regarding issues af-

fecting the country. Poe said she is pushing for the passage of the Freedom of Information bill in Congress, in recognition of the importance of an informed citizenry in building the nation.

Cabangon Chua had been consistently recognized by award-giving bodies for his contributions and achievements in the field of media. Recently, he had been conferred the Lifetime Achievement Award by the Kapisanan ng mga Brodkaster ng Pilipinas for his contributions in the broadcasting industry.

Continued on A2

n japan 0.3667 n UK 69.8457 n HK 5.7997 n CHINA 7.2455 n singapore 33.3972 n australia 34.8763 n EU 50.9420 n SAUDI arabia 11.9916 Source: BSP (11 June 2015)

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Friday, June 12, 2015

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Belmonte gives up on economic Cha-cha Foreign capital exodus soared Continued from A1

16th Congress’s adjournment sine die because August had been set aside for the annual budget deliberations, while the remaining months will naturally be used to prepare for the 2016 national elections.

Congress is on recess from June 11 to July 26. Belmonte said as the author of the bill, he will continue to push the measure’s passage in the House as a “political statement.”

“The economic Cha-cha, as an amendment of the Constitution, is actually facing a difficult time because it will have to go through the Senate. And as you know, there are only 21 senators and three-fourths of 24 is 18, so the margin [for passing it] is very small,” Belmonte said.

“When we come back, we will have a chance to discuss it again with one another and we will give it a try. But as I said, it is really symbolic because it has no time to pass,” he added.

The resolution, filed by Belmonte and Sen. Ralph Recto, seeks to amend such provisions as the 60-40 rule that limits foreign participation of certain activities in the Philippines. The resolution will include the phrase “unless provided by law” in the foreign-ownership provision of the Constitution, particularly land ownership, public utilities, natural resources, the media and advertising industries.

Under Article 12 of the Constitution, which was ratified during the term of the President’s mother, then-President Corazon Aquino, foreign investors are prohibited from owning more than 40 percent of real property and businesses, and are prohibited from exploiting natural resources or own any company in the media industry.

Belmonte said the economic Cha-cha is a large contributor to economic growth as foreign direct investments (FDI) were to increase once ownership of real estate and corporations, one of the issues raised by investors for not investing in the country is relaxed.

The development is sure to disappoint anew the Joint Foreign Chamber of Commerce in the Philippines and other business groups, which expressed support for the passage of the economic Cha-cha. They believe easing the foreign-ownership restrictions would result in better FDI inflows and make the country more competitive as an investment destination.

“I [think] a better opportunity [for economic Charter Change] will come, but perhaps no longer with us,” Belmonte said.

Earlier, President Aquino, an ally of Belmonte, repeatedly rejected the proposal amending the economic provisions of the 1987 Constitution, which ratified during the term of his mother, the late President Corazon Aquino.

The Aquino administration has argued that investments continue to come despite existing foreign-ownership restrictions in certain sectors.

Still, Belmonte said he believes there was no outside force from Malacañang influencing the lawmakers’ vote on the measure.

Rep. Fernando Hicap of Anakpawis said a thousand members of militant groups, mostly from the Kilusang Magbubukid ng Pilipinas and its regional affiliates in Southern Tagalog, Central Luzon and Cagayan Valley, oppose the removal of protectionist provisions under the Constitution that ban 100-percent foreign ownership of corporations and land.

Hicap said the Cha-cha would encourage anti-Filipino and anti-people laws that favor foreign interests, especially against farmers’ rights on land, workers right to living wages, the small businessmen, the professionals and other sectors.

Party-list Reps. Emmi A. de Jesus and Luzviminda Ilagan of Gabriela Women said the Cha-cha is an act of treason. Rep. Terry L. Ridon of Kabataan also expressed the view that RBH 1 would “destroy the standards and limits set by the Constitution” and would also spell disaster for the Philippine economy.

“RBH 1 poses a double-edged threat One, it will open new loopholes in the 1987 Constitution that would allow the haphazard revision of economic provisions. Second, the catch-all amendment pushed by the House Speaker will inevitably lead to the bastardization of constitutional standards and limits,” Ridon said.

Rep. Neri J. Colmenares of Bayan Muna said any form of Cha-cha now, whether economic or political, is dangerous because it will open the floodgates for any or wholesale amendments to the Constitution. Meanwhile, the lower chamber has approved on final reading House Bill 5842 that would mandate a P2,000 Social Security System (SSS) pension increase across the board.

Colmenares, author of the bill, said: “This means that those receiving the basic P1,200 pension per month would now receive P3,200, if this was finally enacted. All the succeeding pension brackets would also have a P2,000 increase.” “This is a very positive development and I hope that the Senate would pass a similar bill. This would really be welcome news for the 1.9 million pensioners of the SSS,” Colmenares added.

Also, a bill mandating free public Wi-Fi was approved on final reading with 211-0 votes. House Bill 5791, or “An Act providing free public wireless internet access in public buildings, terminal, parks and plazas throughout the country,” was principally authored by Ridon.

The lower chamber has ratified the amendments to Cabotage law and proposed Philippine Fair Competition Act. The proposed Fair Competition Act aims to minimize, if not totally eradicate, unfair competition, monopolies and cartels, while the amendments to Cabotage law seek to liberalize the entry of foreign vessels into the country’s ports.

After the ratification in both chambers, the two measures will be transmitted to the President for signature.

18 times in May . . .

Were it not for substantially large gross foreign fund inflows in the first two months this year when this totaled $2.19 billion and 2.55 billion, respectively, the $272-billion Philippine economy would have been able to report net inward flow of foreign funds in the first five months.

From January to May this year, gross foreign fund inflows, also alternately called portfolio money, totaled $1.59 billion.

In that same five-month period, gross portfolio outflows totaled only $9.19 billion that resulted to a net inward flow of portfolio funds aggregating $1.16 billion.

This five-month aggregate inflow of portfolio money alsorepresented a turnaround from year-ago outflows totaling $1.42 billion.

In that same period last year, gross foreign inflows totaled only $8.74 billion, while gross outflows stood at $10.16 billion.

Governments around the world do not actively encourage portfolio funds as these are very volatile funds that exit just as quickly as they enter a country’s markets.

Unlike foreign direct investments that stay for the long haul and generate tax for the national coffers and employment for Filipinos, portfolio funds are invested on equity or debt securities that are immediately dumped at

Pessimism. . .

Continued from A1

the merest hint of domestic trouble or promise of better earnings overseas.

The central bank attributed the outflows to profit taking and the outward remittance of sales proceeds of investments in stock-listed stocks and peso government securities previously kept in interim peso deposits.

The inflows also have been muted during the month as sentiment shifted on account of the disappointing firstquarter corporate earnings, poor manufacturing data from China and the weaker-than-expected first quarter gross domestic product (GDP) growth of 5.2 percent compared to the 6.6 percent in the previous quarter.

The United Kingdom, the United States, Singapore, Hong Kong, and Belgium were the top 5 investor countries for the month, with combined share to total of 77 percent.

The US continued to be the main destination of outflows, receiving 76.6 percent of total.

Some 80.6 percent of portfolio investments in May were in stock-listed securities as holding firms, banks, food, beverage and tobacco companies; property companies and utilities firms.

The rest were in peso government securities at 19.2 percent and other peso debt instruments at 0.2 percent.

Continued from A8

intentions for consumer durables remained broadly steady,” the BSP quickly added.

The BSP also said that for second quarter of 2015, households with savings reached an alltime high of 33.9 percent from 31.6 percent in the previous quarter. The proportion of households with savings increased across all income groups, with the high-income group posting the highest increment quarter-on-quarter, consistent with their more optimistic outlook on family finances and income during the current quarter.

“According to respondents, they save money for the following reasons: [a] emergencies, [b] education, [c] health and hospitalization, [d] retirement, and [e] business capital and investment. More than

two-thirds [68.8 percent] of household savers had bank deposit accounts, while 38.3 percent kept their savings at home and 22.6 percent put their money in cooperatives, paluwagan, other credit/ loan associations and as investments.

“Although households anticipated higher consumer spending, the percentage of respondents who reported that they could set aside money for savings during the current quarter reached a record high at 42.4 percent [from 40.9 percent for first quarter of 2015]. The proportion of those that could set aside 10 percent or more of their monthly gross family income remained broadly steady at 36.5 percent [from 36.2 percent for first quarter of 2015, the BSP said.

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The Nation BusinessMirror

Editor: Dionisio L. Pelayo • Friday, June 12, 2015 A3

Duterte: Pangilinan law gave rise to number of child lawbreakers

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By Jovee Marie N. dela Cruz

AVAO City Mayor Rodrigo Duterte on Thursday blamed the Juvenile Justice and Child Welfare Act for the increasing number of children involved in crime.

Duterte said law enforcers have a hard time dealing with minor offenders because all that the police are allowed to do under the law is to turn over the suspects, who are still minors, to social workers.

Duterte said the dilemma started when the Juvenile Justice and Welfare Act of 2006, or Republic Act 9344, was enacted.

Under the law, authored by then-Sen. Francis Pangilinan, young criminals aged 15 and below are exempted from imprisonment or other punishment, even if the act committed is a heinous crime.

In the case of young offenders between 16 and 18 years

SC braces for deluge of poll-related cases

By Joel R. San Juan

C

HIEF Justice Maria Lourdes Sereno said the Judiciary is now preparing for a possible deluge of election-related cases, with less than a year before the 2016 polls.

Sereno said the Judiciary should be able to provide “the best possible quality of service in the form of justice” during this period.

She also considers the 2016 polls as a “major test, which will determine if our country’s democratic institutions will remain strong.”

“Hindi biro ang mag-launch ng national elections sa atin. I think everyone should be aware of the challenges that are ahead of us. Maraming legal questions na haharap sa atin, kaya kailangan iyong ating will ay nagkakaisa that we provide the best possible quality of service in the form of justice to our people.”

“Wala na iyan, trend na iyan talaga, it’s a given. Ang job namin ngayon is to manage our time…how to make sure that we can deliver all these thoughtful decisions in the appropriate time,” Sereno told reporters, when asked about the possible influx of election-related cases.

“We are also very much aware of our role come election time. It’s time we prepare,” she added.

She said the Judiciary is currently doing a “systemic review” of processes and procedures to be able to respond to these cases.

Earlier, the Legal Network for Truthful Elections (Lente) expressed readiness to provide assistance to those who want to hold accountable government officials engaging in premature campaigning with still about a year before the 2016 elections.

Lente acting Executive Director Rona Ann Caritos said the group will be more than willing to help combat the prematurecampaigning activities of those planning to run in 2016.

“We are looking at what they are doing.... We can assist naman anyone who wants to file a case. We can provide our services,” Caritos said.

Earlier, lawyer Romulo Macalintal said the absence of a law against premature campaigning should not stop the public from holding accountable those engaged in it.

Abu Sayyaf bandit killed by troops in Sulu firefight

By Rene Acosta

A

BANDIT, whose group is holding several kidnap victims in Sulu, including the two recently kidnapped Malaysians, was killed by govrnment security forces in a firefight in Sulu on Thursday.

The firefight between members of the Army’s 35th Infantry Battalion and about 50 Abu Sayyaf bandits occurred at around 8 a.m. in Barangay Sawaki, Indanan, Sulu, according to Lt. Col. Harold Cabunoc, chief of the Armed Forces Public Affairs Office.

Cabunoc said the troops launched the operation to intercept the Abu Sayyaf gunmen, following confirmed reports that the bandits have been bringing their captives to Indanan from Patikul, where the terrorist group has kept the kidnap victims for some time.

He said the group was holding about 10 kidnap victims, including the two Malaysians who were snatched in Sabah recently.

Col. Alan Arrojado, Joint Task Group Sulu commander, reported to the Armed Forces General Headquarters in Camp Gen. Emilio Aguinaldo, Quezon City, that the soldiers encountered the group of Abu Sayyaf Group leader Jun Aksa, but the bandits retreated.

A fter the firefight, the soldiers recovered at least two motorcycles. During the pursuit operations, the troops reencountered the group and one bandit was killed. The fatality’s body was recovered by the troops.

“Colonel Arrojado has ordered for additional reinforcements and continuous operation against the group, which they believed was holding several kidnap victims,” Cabunoc said.

old, the Department of Social Welfare and Development (DSWD) is required to determine “if the perpetrator acted with discernment.”

If there was no discernment, the child-offender will be turned over to the DSWD either for “diversion” or “intervention.” If, however, discernment has been proven, the child will be referred to the prosecutor or judge for determi-

nation of the case to be filed.

Just recently, Duterte said, two boys aged 14 and 16 were taken into custody allegedly for killing a 15-year-old boy in Ecoland Subdivision in Davao City.

The victim sustained multiple-stab wounds and died while undergoing treatment at a nearby hospital.

He said, in most cases, discernment is not proven and law enforcers

are left with no choice but to let the child offenders go scot-free. “This emboldens the youth to be more aggressive and commit more dastardly acts, because they know that the next time they are apprehended, they will not be jailed anyway.”

“We have Senator Pangilinan to thank for this vicious cycle, which must immediately end,” Duterte added.

“It is the Pangilinan law that messed up with this until now. What is really bugging the peace-and-order situation are the crime incidents committed by some children,” Duterte said.

Police records indicate that children are now actively being used by syndicates, who have taken advantage of the provisions of the Pangilinan law to carry out their criminal operations.

Economy

A4 Friday, June 12, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

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DTI investigating pricing behavior of millers, bakers

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he Department of Trade and Industry (DTI) is set to initiate an investigation against 14 local flour millers and 12 bakers for refusing to lower their prices despite the plunge in the cost of wheat globally.

The DTI’s Consumer Protection Group (CPG), headed by Trade Undersecretary Victorio Mario A. Dimagiba, has set a June 19 deadline for compliance of the millers and bakers.

Failure to comply would prompt the CPG to submit findings of profiteering, collusion and violations of the Price Act against them before the National Bureau of Investigation (NBI).

“Global prices of wheat has gone down 28.8 percent from January to April of 2015, and yet we’ve monitored no decreases in the prices of flour, noodles or bread. Millers should recognize passing on the benefits of lower wheat price. We will send a third and final demand letter next week [to the millers and bakers]. After five days and they have

not complied, we will send our findings if there has been a violation of the Price Act. The NBI, on the basis of our findings, will conduct investigations,” Dimagiba said in a news conference held on Thursday.

The trade official, in two previous letters, appealed to bakers and millers to be transparent in their pricing to dispel any suspicion of connivance to maintain their high prices, and requested for adjustment of the prices.

Of the 16 millers contacted by the DTI-CPG, only the Philippine Foremost Milling Corp. and Atlantic Grains Corp. responded. However, neither company adjusted their pricing.

Of the 12 bakers, only Gardenia Bakers Phils Inc. complied with the request of the DTI-CPG to give sales

invoices for their flour orders, but the documents only covered a limited period. The DTI-CPG asked the bakers to submit sales invoices from January 2014 to present.

At present, Dimagiba said the NBI is already investigating two unnamed millers, and the other 14 will, likewise, be investigated if they do not impose the price decrease.

Bakers are also in the line of fire, as Dimagiba said the DTI intends to look at the whole supply chain.

“By the end of June we should be able to complete the analysis and endorse it to the necessary agencies,” said Dimagiba, adding that the Bureau of Customs is also submitting the wheat-importation data of companies to help the DTI-CPG in determining Price Act violations.

Based on the 28.8-percent dive of

global wheat prices, the 600-gram bread loaf should have a price cut of P0.75 to P1.83, while a 450-gram loaf bread should have a price decrease of P0.56 to P1.83.

Pan de sal, per piece, should see a price cut of P.03 to P.06. Prices of noodles should go down by P0.26 to P0.34.

For three types of flour being milled, namely, premium, Class 1 and Class 2 flour, the following

price decreases should be imposed (See table).

“Wheat makes up 75 percent of the price of flour, the [remaining] 25 percent are their other costs; so we maintain that bread, flour and noodle prices should go down,”Dimagiba added.

Dimagiba said flour millers and bakers should have imposed the price cut as early as March. Catherine N. Pillas

Manila, Istanbul upgrade air deal

By Lorenz S. Marasigan

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hilippine and Turkish state officials agreed to modernize their air-services agreement on late Wednesday, more than doubling the flight entitlements between the nations’ capitals.

Civil Aeronautics Board Executive Director Carmelo L. Arcilla said the Philippines and Turkey signed a memorandum of understanding on air services expanding the allowable number of f lights per week between Manila and Istanbul, from the current three flights per week to seven.

“In addition, the parties also agreed to allow 14 flights per week between Turkey and all other international airports in the Philippines, except Manila,” he said in a text message.

The parties also agreed to allow Philippine carriers fifth freedom to Frankfurt in Germany or Tel Aviv in Israel.

“This will allow a Philippine carrier to fly from Manila to Istanbul and onward to Frankfurt or via Tel Aviv,” the government official said.

Currently only Turkish Airlines serve the Istanbul-Manila route.

“They plan to increase their operations from three to seven flights per week in October 2015,” Arcilla said. “Turkey is a major gateway to Europe, and Turkish Airlines has about 106 destinations in Europe.”

Data from the Department of Tourism showed that a total of 3,731 tourists from Turkey visited the Philippines in 2013.

Trade between both countries is also robust. Data from Turkey’s Ministry of Economy showed that Turkey’s exports to the Philippines reached $135.5 million, while imports increased by 15 percent to $181.2 million in 2013.

The Philippine air panel has so far expanded air pacts with Singapore, Oman, Australia and Qatar this year.

In February the local air panel was able to expand the country’s air traffic to Singapore, increasing capacity entitlements to 18,888 seats per week from 17,627 weekly seats. It also bagged additional flight frequencies from Oman in April, raising the country’s air-traffic entitlements to seven from three flights per week.

The Philippines and Australia in April signed a new air pact, increasing the entitlements

MURALS OF MAKATI UNDERPASS

Murals give life to the Ayala-Salcedo pedestrian underpass in Makati City, giving busy workers in the central business district a good moment to relax and enjoy the artworks for a while as they walk to and from work. NONIE REYES

between Manila and Canberra to 9,300 seats per week from 6,000 seats per week.

Last month the Philippines and Qatar increased the number of flights between their capitals to 14 flights per week from eight. The last round of air

talks was held in 2009.

In 2014 the Philippine air panel was able to yield additional flight entitlements from the following countries: Malaysia, Hong Kong, Ethiopia, South Africa, Macau, Canada, Myanmar, New Zealand,

Emerging Asia’s small businesses are embracing online tools faster

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usinesses, from Vietnam to the Philippines, are turning small budgets and traffic jams to their advantage by harnessing employees’ familiarity with online platforms to exploit the latest and cheapest technologies to boost productivity.

A Microsoft-backed survey found small and medium firms in emerging economies in the Asia Pacific embracing tools, such as Skype, Dropbox and Whatsapp, more readily than their peers in advanced nations. Vietnam and the Philippines topped the region in using four or five such online tools, including e-mail, social networking, file-sharing, document collaboration and virtual meetings, according to the survey of 10 countries excluding China and India.

Of the 2,000 respondents from small and medium businesses, about 80 percent from Vietnam and the Philippines said they used four or five of these tools, compared with 35 percent in Australia and 40 percent in Taiwan.

A company in Vietnam may use Skype for video conferences because it’s cheaper and because their employees are already comfortable using it with their families, while a firm in Taiwan may stick to conventional calls because it’s invested in a conference bridge or has security policies against using open networks, it said. Another reason could be the traf-

fic gridlocks in cities, such as Manila, Jakarta and Bangkok, which make it imperative for employees to be able to work more easily on the go.

“It could be that it’s the state of development of the country, it could be that certain countries have more norms for certain types of meetings than others,” said James Eyring, COO of Singaporebased Organisation Solutions, which collaborated with Microsoft on the study.

“They’re much more flexible, and much more willing” to try and use new technologies in emerging economies, he said.

The survey was part of the New World of Work Index created by Microsoft this year, which surveys how much respondents feel their employers enable them to be productive, collaborative and innovative, while still ensuring their personal well-being.

Indonesia and the Philippines topped the list, with Taiwan coming in last.

Simply being able to work on the go more easily doesn’t mean productivity is automatically boosted as a result. Vietnam ranked 68 out of 144 countries in the World Economic Forum’s Global Competitiveness Index for 2014 and 2015, while Singapore placed second and Taiwan was 14th.

The other downside to using the same platforms for work and play is thatbosses are just a Whatsapp message or Skype call away. Bloomberg News

Singapore and France.

The local regulator aims to improve the situation of passenger traffic by increasing seat entitlements as part of its drive to expand air-traffic rights.

The government aims to generate

$4.6 billion in tourism revenues by the end of the Aquino administration.

It also aims to attract 6 million tourists and create 3 million jobs by 2016. This would allow the sector to contribute 6.35 percent to the gross domestic product.

DOE no longer extending deadline for PECR 5 bids

By Lenie Lectura

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he Department of Energy (DOE) will accept bid proposals for the 5th Philippine Energy Contracting Round (PECR 5) only until the end of this month.

“We will proceed as scheduled,” said Energy Undersecretary Zenaida Y. Monsada, chairman of the Review and Evaluation Committee (REC) overseeing PECR 5.

Under the PECR 5 Guidelines, the deadline for prospective investors and developers to submit bids was extended to June 30 from end-March. Endorsement of winning applicants will be held on September 4.

The DOE decided to adjust the time frame for the said contracting round in a bid to give prospective investors enough time to prepare.

After June 30, the applications will be evaluated for two months.

The bids will be reviewed based on their financial, legal and technical aspects.

So far, there are six multinational firms that have expressed strong interest in participating in PECR5.

The DOE said it will continue to

monitor and spearhead all activities leading to a successful bidding of the country’s energy-rich areas.

PECR aims to showcase the exploration of potential coal and petroleum areas in the country.

The DOE launched last year PECR 5, in which 11 blocks covering a total area of 47,840 square kilometers are being offered to potential investors.

Most of the oil and gas exploration blocks are near the Philippines’s main island of Luzon, while most of the coal blocks are in southern Philippine provinces.

Ten of the 11 oil and gas blocks on offer are offshore.

The blocks are mainly located in frontier regions and cover an average size of 4,350 sq km per block, with the largest covering 5,760 sq km in the East Palawan region.

The areas for petroleum exploration include Area 1 in Southeast Luzon; 2 and 3 in Masbate-Iloilo; 4 and 5 in Northeast Palawan; 6 in Southeast Palawan; 7 in West Palawan; and 8 to 11 in West Luzon.

Two of the blocks are close to the Spratly Islands, of which a portion are claimed by the Philippine government.

news@businessmirror.com.ph

Economy BusinessMirror

Friday, June 12, 2015 A5

Gun industry on verge of collapse–Afad

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By Rene Acosta

he country’s gun industry is on the verge of collapse due to an almost nil income caused by stricter regulations covering the purchase and possession of firearms being implemented by the Philippine National Police (PNP).

However, the industry is not the only one reeling from the adverse effects of the new regulations. Even the PNP is feeling the impact of its policies, police officials and gun dealers admitted at the start of the four-day defense and arms sporting show on Thursday.

“We were really severely hit. In 2014 a lot of firearm dealers closed shops. A lot of us turned in negative income, while many were also forced to retrench employees because they could not do anything,” said Joselyn Jose, president of the Association of Firearms and Ammunition Dealers of the Philippines Inc. (Afad).

“We are continuously meeting with the PNP, and we are glad that they are very open to us. They are working with us in order that the requirement for those who wanted to legally own firearms will be simplified,” she added.

The PNP crafted and implemented the implementing rules and regulations (IRRs) for Republic Act 10591, or the Comprehensive Firearms and Ammunition Regulations Act of 2013, during the term of resigned PNP chief Director General Alan Purisima, which imposed stricter rules for gun owners.

The IRRs mandated any would-be gun owner, and even those who already legally possessed firearms but would be renewing their licenses, to secure a license to own and possess firearms (LTOPF) even before they could purchase a gun.

The LTOPF, before it could be secured from the PNP’s Firearms and Explosives Office (FEO), however, required several documents and papers, such clearances from the regional trial court and the municipal/metropolitan trial courts; neuropsychiatric clearance issued by the PNP Health Service and its accredited psychologists or psychiatrists; and a drug test conducted by the PNP Crime Laboratory or any accredited and authorized drug-testing laboratory or clinic.

The LTOPF also required that the applicant has passed a gun-safety and responsible gun-ownership seminar, which is administered by the PNP or a registered and authorized gun club; PNP and National Bureau of Investigation clearances; National Statistics Office-issued birth certificate; proof of latest billing; two valid IDs and income-tax return, certificate of

Manila declaration against human trafficking signed

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By Joel R. San Juan

HE Department of Justice (DOJ) on Monday lauded the efforts of various sectors of governments and groups that participated in the “First International Dialogue on Human Trafficking,” which resulted in the signing of the Manila Declaration to Enhance International Cooperation in Combating Human Trafficking.

The event was attended by more than 100 delegates from 19 different embassies in the Philippines, 11 non-governmental organizations (NGOs) and 15 government agencies.

Justice Secretary Leila M. de Lima praised the delegates “for refusing to look away and, instead, identifying more decisive steps to combat this global menace.”

“When those who can do something to stop human trafficking look away, the dreams of the victims of this crime die,” she emphasized.

On the other hand, Justice Undersecretary Jose Vicente B. Salazar, who is incharge of the Interagency Council Against Trafficking (Iacat), underscored the significance of the two-day event in the mandate of all governments involved in fighting human trafficking.

“This international dialogue is a key element in moving forward in our drive against human trafficking, as it seeks to integrate all the efforts of the international community into a cohesive approach in ending modern-day slavery,” Salazar said.

Salazar delivered the Manila declaration affirming the strengthened cooperation and addressing human trafficking as a serious international concern during the event.

The Manila declaration recognized that there is an urgent need for a comprehensive international approach to prevent and combat human trafficking.

In addition, the delegates agreed that an effective international approach against human trafficking requires innovative actions in the face of changing schemes of perpetrators, along with continued dialogue, exchange of information through sanctioned channels and cooperation among stakeholders.

“Acknowledging that each one of us has a role and responsibility to build barriers against and effectively fight human trafficking at every step of a trafficking victim’s experience, including the recruitment stage, visa and immigration process and employment, victim identification procedures, as well as during the investigation and prosecution of perpetrators for the ultimate protection of victims,” the declaration states.

The event was organized by the Iacat, in partnership with the embassy of the Kingdom of the Netherlands.

Meanwhile, a group said human trafficking has become a widespread problem in the Philippines with half-a-million Filipinos falling victims every year.

Anthony Pangilinan, officer in charge of Call to Rescue, an NGO that prevents the illicit trade and rescues trafficked victims, said the organization made the revelation during the recently held self-defense demonstration Ultimate Fighting Championship (UFC).

UFC champion Miesha Tate said women and children are vulnerable to abuse and human trafficking and must be taught self-defense technique to ward off attackers.

The UFC event was cosponsored by SM Lifestyle Entertainment Inc. Pangilinan said human trafficking is widespread in the Philippines because of the economic condition, as well as the lack of proper parental guidance to children.

employment; business permit; or any appropriate document as proof of income.

Under the new regulations, licensed gun owners are also required to personally appear before the PNP-FEO, since their pictures and fingerprints will be taken by a biometrics machine for inclusion in the Automated Fingerprint Identification System of the PNP.

Gun owners and even gun groups have questioned the IRRs before the Supreme Court by assailing its constitutionality, saying that the PNP “whimsically” implemented it despite knowing that it would violate several provisions of the Constitution.

The High Court is yet to decide on the petition.

Due to complaints coming not only from licensed gun owners but even associations, the PNP, under the leadership of Deputy Director General Leonardo Espina, has been forced to review the regulations.

“The IRR is already being reviewed and revised, it is already with the technical working group,” said PNP chief di-

rectorial staff Director Danilo Constantino, who represented Espina during the opening of the arms show.

Jose said the IRRs are wreaking havoc on the firearms industry, as some of the firearms dealers have been reporting a decline in sales by about 90 percent.

“That’s how bad [it was] in 2014,” she said.

A6 Friday, June 12, 2015

Opinion BusinessMirror

editorial

The struggle and spirit of independence

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ODAY marks 117 years since the Philippines declared its independence on the march to becoming a sovereign nation.

For most nations that threw off the yoke of colonization, independence was a fairly uncomplicated process. The colonized country fought a war—or two, as in the case of the United States—against the “Mother Country.” Sometimes it took a long time to win the war, as with Vietnam.

Other countries did not need the general population to take up arms, achieving their freedom by being a perpetual thorn in the neck and economic burden, as did India against Great Britain.

However, we can say, without any hesitation, that no nation struggled more to become a sovereign and free nation than the Philippines.

While our independence was first declared 117 years ago, our sovereignty was not achieved until nearly a half century later. Not only did Filipinos have to fight two wars of independence, but against two different colonizing nations. And these were not just any nations, but two military giants. Actually, we might say two-and-a-half wars, as Filipinos also fought the Japanese, who would have gladly made the Philippines part of their “Greater East Asia CoProsperity Sphere.”

But legal sovereignty has not kept other countries from doing all they could to interfere with our country. Malaysia, the Soviet Union and China have gladly assisted those groups that have tried to tear our nation apart. The US has felt the need to “persuade” our domestic political process and external foreign policy for decades.

Here we are, 117 years from that afternoon in Cavite at the ancestral home of Gen. Emilio Aguinaldo, still trying to chart our own independent course without “help” from the friendly foreigners.

China steals our territory, and our only recourse is to turn to the US and Japan, which will both use the Philippines to further their own geopolitical agendas. We are still caught in the black hole economically, and as a society of being neither fully Western nor fully Asian.

Our excuse for not standing completely on our own, taking full responsibility and dealing with the consequences of making our own way is that we are not strong enough. At least, that is what our leaders have been telling us for decades. Had the members of the Samaháng Kataástaasan, Kagalanggalang Katipunan ng mga Anak ng Bayan (Supreme and Most Honorable Society of the Children of the Nation) waited until we were “strong” enough, we would still be called “Indios,” “little brown-skinned Americans,” or worse.

Maybe someday we will be blessed with men and women as leaders who have the courage, the love of country and the confidence to stand tall for the Philippines, as the members of Katipunan did.

A thoughtful Independence Day James Jimenez

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spox

OINT your browser to bingguanzon.com, and you’ll find this: “Maria Rowena Amelia V. Guanzon is a litigation lawyer, writer and a law professor who is well-known as an expert in the field of gender equality and laws on violence against women.

A passionate advocate of women’s human rights, she is a founding member of the Asia Cause Lawyers Network.”

And now, she is also a commissioner of the Commission on Elections (Comelec) whose ad-interim appointment was confirmed on Wednesday by a unanimous vote of the Commission on Appointments.

Her curriculum vitae reveals the depth of her qualifications.

She holds a Masters degree in Public Administration from Harvard University, class of 1995, where she was an Edward Mason fellow and class marshal. Prior to that, she earned a degree in Economics from the University of the Philippines (UP), and then went on to graduate in the top 10 of her class in the UP College of Law, where she received a Dean’s Medal.

At 28 years old, she was appointed officer in charge (OIC)/city mayor by President Corazon C. Aquino and, in 1988, won the post in her own right, serving until 1992. As mayor, she

personally managed the Urban Basic Services Program, and helmed the Cadiz City in Negros Occidental toward becoming a first-class city.

In 2013 she was OIC of the Institute for the Administration of Justice in the UP Law Center. She taught Election Law, Public Officers and Local Government at the UP College of Law. From March to December of the same year, she served as commissioner of the Commission on Audit.

The newly confirmed commissioner, as it turns out, also has a very prolific pen.

She is the author of a law book, The Anti-Violence Against Women and Their Children Act of 2004. Apart from that not inconsiderable achievement, she was also the lead author of Engendering the Philippine Judiciary, published by the United Nations Development Fund for Women and the UP Center

for Women’s Studies Foundation Inc. (UP CWSFI) and The Davide Court: Its Contributions to Gender and Women’s Rights, published by The Asia Foundation and the UP CWSFI. Her new book, The Anti-Sexual Harassment Act Notes and Cases, was published by the UP Law Center. She is currently writing a textbook on the Local Government Code for UP and her latest work, The Auditing Code of the Philippines Casebook, will be launched soon.

Her list of published articles reads like a bibliography for the entire field of gender equality and the protection of women. Issues and Problems in the Enforcement of the Anti-Violence Against Women and Their Children Act of 2004, Philippine Law Journal (December 2008); Constitutional Challenges to the Anti-Violence Against Women and Their Children Act of 2004, Journal of the Integrated Bar of the Philippines (March 2009); The Anti-Trafficking in Persons Act: Issues and Problems,” Journal of the Integrated Bar of the Philippines; Legal and Conceptual Framework of Battered Woman Syndrome as a Defense, Philippine Law Journal (Volume 86, No. 1 December 2011).

Small wonder then, that she’s the recipient of several distinctions. In 2013 she received the American Field Service Mabuhay Award for her outstanding work in government and in the field of law; and on June 21, 2014, the UP Alumni Association gave her an award for Outstanding Alumna in Gender Equality and Women Empow-

erment. In August of this year she is set to receive the Outstanding Sillimanian Award from Silliman University. nnn TODAY I expect that a great number of people will be waving Philippine flags around, proclaiming to all and sundry how patriotic they are. That’s good.

But it would be even better if patriotism were to run deeper than the skin.

The flag, after all, isn’t just some marketing logo but the distillation of the aspirations of people who actually put themselves in harm’s way for the sake of freedom. Oh, I know it’s the fashion now to revisit the motivations of those men and women we learned to call heroes—deconstruction seems to be the order of the day. Despite all of that, however, regardless of why they did what they did, the fact remains that our eventual independence was built on the foundations they laid down.

So look again at the flag you’re brandishing. And, instead of just parroting what you’ve been told about the symbols on it, see those symbols—see the flag— as a constant reminder of the price our predecessors paid for freedom, and also of the cost of maintaining that freedom today and forever after. It is a cost that we must pay, and pay constantly, if we don’t want to see that flag unraveling stitch by stitch in our lifetime.

Have a thoughtful Independence Day everyone.

James Arthur B. Jimenez is director of the Commission on Elections’s education and information department.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Friday, June 12, 2015

A7

Don’t ask, don’t tell ‘I money launder’ Luis F. Dumlao, Ph.D.

EAGLE WATCH

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N the beginning of the Clinton administration, the US military and the homosexual rights movement clashed over discrimination issues. Although the administration did not discriminate, it also knew that it could not control its military ranks from discriminating. So that no more discrimination would occur, the military in 1994 instituted the “don’t ask, don’t tell” policy.

“Don’t ask” means nobody was allowed to ask anybody’s sexual orientation. “Don’t tell” means nobody was allowed to disclose one’s sexual orientation. So in theory, nobody knows if someone is homosexual and so nobody could discriminate.

In 2011 the US courts banned the policy. Everybody is eventually granted the right to disclose or not disclose one’s sexual orientation while the policy still prohibits discrimination.

suspects that a certain account is being used to money launder, the law requires the bank to submit a SAR else that bank will be held criminally liable.

Can the bank turn its head away as if it sees no evil and hears no evil to prevent itself from being criminally liable? In 2010 HSBC settled $1.9 billion to the US for failing to suspect and then report money laundering of drug cartels in HSBC-Xs system (HSBC-Mexico).

The United Nations Convention defines money laundering as an activity where there is conversion or transfer, concealment or disguise, or acquisition or possession of property derived from criminal offenses. Quoting from Criminal Capital (Platt, 2015), the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) describes money laundering as “the process of making illegally gained proceeds appear legal” (p. 26).

Unfortunately, don’t ask, don’t tell between banks, money launderers and the government is still the de facto policy. Banks don’t ask customers if a transaction facilitates money laundering. The money launderer with enough common sense doesn’t tell the bank that he launders. The government does not ask banks if they see suspicious money launderers. Banks don’t tell the government unless the government asks.

Before proceeding, some clarifications must be stated. Don’t ask, don’t tell of one’s orientation (say sexual, political, etc.) is bad because it deprives one the fundamental right to announce orientation. Don’t ask, don’t tell in money laundering is bad because it deprives the public of truth and justice. A person’s orientation usually carries pride while a person laundering money always carries shame.

The United Nations Convention defines money laundering as an activity where there is conversion or transfer, concealment or disguise, or acquisition or possession of property derived from criminal offenses. Quoting from Criminal Capital (Platt, 2015), the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) describes money laundering as “the process of making illegally gained proceeds appear legal” (p. 26).

The Anti-Money Laundering Act (AMLA) of 2001 of the Philippines with its subsequent amendments in 2003, 2012 and 2013 requires banks to report to the government any transactions worth at least P500 thousand. However, transactions of bigger institutions that reasonably and regularly transact such an amount are exempted from the rule.

For example, a school in Makati City with the size of its asset transacting something worth P500 thousand is not unusual. It might be just for the purpose of buying 30 desktop computers. So, the bank does not have to report it. What typically happens in transactions is that banks don’t ask and its customers don’t tell.

In the banking world, SAR refers to “suspicious activity report,” which is required of banks to submit in certain jurisdictions. Platt (2015) boasts of this as a financial regulatory innovation. If your neighbor is suspiciously acting as if he is manufacturing illegal drugs, the law does not criminalize you for not reporting to the police. Whereas if a bank

In contrast, the AMLA requires banks to report to the government “any person knowingly” engaging in money laundering. Suspicion is not enough to require reporting. Knowing is the minimum requirement.

To know that someone is money launderer requires evidence without reasonable doubt.

How would a bank know without reasonable doubt? The bank can ask, but it usually does not; or the money launderer can tell but he usually does not. Even if a bank asks, the money launderer will deny no matter how suspicious his transactions are. It only takes denial of the money launderer to get the bank off the hook of criminal liability.

In the world of financial regulation, KYC refers to “know your customer” and PEP refers to “politically exposed persons.” In KYC, banks know the stakeholders of an account. In knowing, they see if there is a PEP stakeholder, especially if that PEP is a household name.

Given the peso amount involved in transactions and general knowledge of government salary, any bank personnel qualifies to detect whether suspicion is warranted.

The AMLA requires banks to “establish and record the true identity” of accounts and transactions.

So banks practice KYC. So unfortunately to the banks, they cannot claim innocence whether accounts are suspicious money-laundering vehicles. Fortunately for the banks, the accounts do not meet the “any person knowingly” criteria for reporting to the government much less to the public.

So banks don’t tell the government. Thanks to bank secrecy laws, banks don’t tell the public. The system of incentives and rewards of the AMLA awards government personnel only, but does not say anything about rewarding civilian whistleblowers. Thanks to that, potential civilian whistle-blowers don’t tell.

The AMLA bans its use for “political persecution or harassment” and the government often dodges being wrongfully accused of politicizing.

Thanks to that, the government does not ask banks. Only when there is public outcry does the government ask banks. And only when the government asks that banks tell.

Will some lawmaker please sponsor a bill outlawing the don’t ask, don’t tell policy in money laundering?

Chronicling Saturdays Tito Genova Valiente

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annotations ATURDAY is really the Sunday of this generation. There is the Friday, which becomes a throbbing day of activities and there is Sunday, when everyone, it seems, stay at home.

The Sunday street is practically deserted. If ever there is a crowd on Sunday, this is a crowd of people going in and coming out of churches and rushing to fast-food stalls so they could be home before 3 p.m. or 4 p.m., from which ensues the wait for Monday, the dreaded day of work.

Saturday is something else. It comes between the relief of Friday and the paranoia of Sunday. Saturday is when people are ready to have fun and work at the same time, to go to restaurants before a meeting or meet while partaking of food in a restoran.

I have reserved lately my Saturdays for breakfast in any of the fastfood outlets in the Metro. I do not go for the chi-chi breakfast in hotels where the breakfast table reaches the level of a production design. Last Saturday I decided to try the coffee in one of the least-popular fast-food franchise in the country. The coffee was good and instead of creamer they had milk. I thought that was

solicitous of them.

Saturdays are not only for fine coffee but for fine people watching.

Last Saturday did not fail me. I not only eavesdropped on the conversation of men and women, I observed and concluded about common human behavior of Filipinos.

As breakfast is about the body, the sordid thing I observed last Saturday has something to do with the body and its exuviae. Why is it that Filipinos do not flush. All it takes is a slight bend of the body and the hand extending so daintily to press the button that works wonders with water. But wonder of wonders, no one flushes. This could be a force of habit. Rare are fast-food outlets that have toilets that allow one to flush. Always, there is a pail beside the bowl, which does not mean you can assume there is water that will go through that water.

Toilet paper is an index of our own civilization. When a roll of toilet

paper is present in the toilet, people use it. Under the present dispensation, however, there is a new practice that used toilet paper should not be thrown into the bowl but in a plastic can. Now this is sordid.

Why build two doors when one can only use half of it. Please use the other door. On that door can be seen one of the most ignored or unseen signs: “Pull” or “Push.” Now this is most interesting, when it says “Pull,” you see people deciding to “Push.”

This is my proposal: Build a single wide door so there is no need to unsettle customer to grapple with a door that is stuck permanently. Then build this door so that it is versatile enough to be pushed or pulled, We like to redesign things. Or, rearrange things. Last Saturday a group of garrulous women of all sizes barged into my Saturday café. Even as I recall the old adage from the late Chona Recto Kasten who said, when someone enters a place, do not turn your head to find out who is this person. I am not sure if Kasten did say those words but it is nice to quote her anyway for she was Miss Manners/ Etiquette/Sophistication. If she did mouth those imperious maxims, the presence of a group of almost thuglike beings forced me to look back and risk being turned into a pillar of salt. Well, I did ask for some salt for my French fries.

The women immediately commandeered tables and chairs and

Janet Yellen gives Asia the jitters William Pesek

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BLOOMBERG VIEW

ANET Yellen probably doesn’t think about Bangkok, Jakarta or Manila very often—the Federal Reserve (the Fed) chairman has enough to worry about in Washington. But as she continues to ponder hiking interest rates, the frenetic selloffs in stock markets on the other side of the world should give her pause.

Stock exchanges in emerging markets are on their longest losing streak since 1990; since a late-April high, the MSCI Southeast Asia Index has lost almost 9 percent. If Yellen is wondering whether the developing world is ready for a tightening of US monetary policy, the answer from Asia has been a resounding no.

Late last year, a tightening of 25 basis points would probably not have posed any problem. But, in the interim, China’s slowdown has darkened the global economic outlook (even as its own equity bourses continue to skyrocket). Selloffs in Indonesia, Malaysia, the Philippines, Thailand and elsewhere speak to the growing anxiety about the two biggest actors in the global economy.

The most immediate worry is the trade shock emanating from China.

Massive share rallies in Shanghai and Shenzhen are papering over a growing number of economic cracks

in China, including deflation and weak household spending. Despite government pledges to achieve 7-percent growth, sliding commodity prices suggests Chinese growth is decelerating. And MSCI’s decision not to include China in its indices is a reminder that Asia has been hitching its future on an economy that isn’t yet ready for prime time.

Asia also worries that China’s problems will be exacerbated by the Fed. Monetary purists will be tempted to dismiss the argument out of hand—the Fed should focus on keeping the US economy stable and healthy, because that’s ultimately in the best interests of everyone from Seoul to São Paulo.

What this line of thinking misses, though, are the feedback effects created by Fed policy. As the dollar rises, it draws money away from the developing world—often violently so. Consider how a strong dollar

helped precipitate Asia’s 1997 and 1998 crisis and Latin America’s a decade earlier.

The world, it must be acknowledged, has become addicted to zero interest rates. In the 10 years between its late-1990s crisis and Wall Street’s in 2008, countries in Asia stabilized their banking systems, diversified their economies away from exports, encouraged entrepreneurship and attacked corruption. Central banks in the region amassed trillion of dollars of currency reserves and markets became more transparent. But the urgency disappeared as ultralow rates in Washington, Tokyo, Frankfurt and London sent waves of liquidity Asia’s way, boosting equities, lowering bond yields and ginning up growth.

Quantitative easing (QE) arguably benefited Asia more than the West. Officials in the region have spent the past several years signing foreign direct investment deals—witness the many splashy new skyscrapers, shopping malls, and state-of-the-art factories funded by foreign money—and celebrating countless initial public offerings on their stock exchanges.

Complacency set in as unproductive investments accumulated, cronyism thrived and everything from financial systems to education programs went neglected.

Asian markets are understandably anxious about the prospect

transformed them into an Ikea presidential table where everyone was president. Creating a new table setting has noise and conduct implications. Imagine a table for four or two stretched into a long banquet. The implication is great. A table for two or four people limits the conversation to, yes, two or four persons. Everyone is within clear listening and talking distance. The suddenly-long table means the decibel is higher among the participants. In this Saturday case, the two beings at the ends of the table, respectively, had to shout at each other, the better to show who is the real boss in this power table.

Saturdays are not Sundays. Who was it who said that if Sunday is the Lord’s Day, then Saturday is for the Devil. I wrote this on my fieldnotes so I could be reminded that in fieldworks, there are no holidays.

Last Saturday behind me were three elegant well-coiffed old women. They were gossiping. The butt of their conversation are their children and their children, who happen to be their grandchildren. The old women were catty and in their best fighting mood. Amid their vicious laughter (I would not call them evil, one of the three said: “Oh, what a conversation we are having!” They all stood up and turned briskly around.

On their shirt was emblazoned the name of their Church’s group.

E-mail: titovaliente@yahoo.com

of the monetary fuel that’s been driving this growth these last six or seven years running dry. Reclaiming monetary normalcy can be a near-impossible task once investors, bankers, businesspeople and politicians alike get used to wonders of free money. That’s especially true of nations with sizeable debt loads. (Yes, that means America and Europe.)

Central bankers also find it hard to withdraw from loose money policies. They know that at the first sign of financial fallout, lawmakers will be quick to blame them for acting too rashly. The Fed now finds itself at the same crossroads at which the Bank of Japan (BOJ) stood nine years ago. In February 2006 the BOJ began raising rates away from zero—25 basis points and another 25 in February 2007. The Japanese establishment howled its disapproval as deflation deepened and the BOJ was back at zero by 2009.

The massive QE-programs initiated by current BOJ Head Haruhiko Kuroda suggest Japan will be at zero many years to come.

Understandably, Yellen doesn’t want to get trapped in Japan’s dysfunctional cycle. But when you’re in charge of the Fed, you’re responsible for more than just the US economy. And it increasingly seems that the rest of the world, and Southeast Asia in particular, for the sort of shock that Yellen seems to have in store.

2nd Front Page BusinessMirror

A8 Friday, June 12, 2015

Q2 consumer pessimism deepens on rising prices

By Bianca Cuaresma

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onsumer pessimism deepened in the April-to-June period, resulting in the confidence index falling to minus 16.2 percent from minus 10 percent in the first quarter, and stirred by anticipated higher commodity prices traced to adjustments in the cost of oil, power rates and school tuition seen leading to more restricted household spending.

According to the Bangko Sentral ng Pilipinas (BSP), the index—computed as the percentage of optimistic respondents minus the percentage of consumers that indicated otherwise—was driven lower also because of a projected increase in the number of unemployed, as the latest batch of college graduates enters the labor force.

Consumer sentiment also soured on perceived graft and corruption in the public sector and security fears generated by the mass death of members of a special police unit in the hands of rebels in Mindanao island.

“Respondents cited their concerns on the peace-and-order situation in the country following the death of 44 members of the Special Action Force [SAF 44] and the political issues behind it; occurrence of calamities such as fires, typhoons, and floods, as well as the impact of El Niño dry on agricultural output, as reasons behind their weaker outlook,” the BSP said.

For the next quarter, consumer still posted a pessimistic outlook, as consumers anticipate concerns over the perceived

graft and corruption in the government, and expected occurrences of typhoons and other calamities, as well as the effects of El Niño.

The sentiment of consumers in the Philippines mirrored the less favorable outlook of consumers in the euro area, China, Indonesia, Japan, Thailand and the United States, but was in contrast to the more optimistic views of those in Australia, South Korea and Taiwan.

Consumers anticipate having to spend more in the second quarter, with the index widening to 32.2 percent, from only 30 percent a quarter earlier.

“The spending outlook index rose across commodity groups, except for electricity, and personal care and effects, which remained broadly steady.

The biggest increases were observed for fuel, transportation, education, and restaurants and cafés,” the BSP said.

“The percentage of households that considered the current quarter as a favorable time to buy big-ticket items increased to 30.3 percent [from 28.4 percent for first quarter of 2015].

The more favorable outlook on buying conditions was due primarily to the improved outlook on buying conditions for real estate. The three bigticket items posted all-time-high indices since the start of the nationwide survey in first quarter of 2007. Buying intentions of respondents for big-ticket items for the year ahead improved, with the index increasing to 12.6 percent, from 11.6 percent a quarter ago. Buying intentions for real estate and motor vehicles improved, while buying See “Pessimism,” A2

www.businessmirror.com.ph

Chinese scientists asked: Help end reclamations

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By Manuel T. Cayon

ORON, Palawan—A Filipino scientist on Thursday asked his Chinese counterparts to tell their government to stop the reclamation activities in the West Philippine Sea (South China Sea) and in the Spratlys, because of the magnitude of destruction the activities have wrought on the areas’ fragile marine environment.

“I asked Chinese scientists to force their government to stop the reclamation and construction of airstrips, because these have a big impact on the marine environment,” Dr. Angel C. Alcala told seminar participants gathered here for an ocean- and marine-conservation event organized by the United States Embassy.

Alcala just last year wrote a newspaper column, urging col-

leagues from both mainland China and Taiwan for the Chinese leadership to put a stop to the construction of airstrips and military infrastructure in the disputed islands.

He acknowledged he did not get any reaction. Neither did he hear of any international gathering of scientists issuing a call to stop the destruction of corals in the Spratlys and the Scarborough Shoal.

“The impact to the marine en-

vironment of the construction of airstrips and military installations may be imperceptible at first, but the magnitude would soon be felt,” Alcala said.

He said various studies he and other local or foreign scientists conducted indicate significant impact on fish stocks in the protected areas and to the surrounding seas.

The Philippines has designated marine-protected areas the size of 20 percent of the total marine holdings of the government, in hopes that each would increase the socalled fish biomass to as much as 100 tons per square kilometer.

The fish biomass in the Tubbataha Reefs in this province, which has achieved a better protection regime than others, is estimated at more than 100 tons per sq km.

“But in the Spratlys [areas] that have not been subjected to extensive fishing, the fish biomass is more than 200 tons.”

“The sheer biomass of fishes has contributed extensively to the replenishment of the fish stocks in East Asia,” Alcala said.

By constructing airstrips and military facilities on these islands, Alcala said the damage

could be devastating to fish supply in the region.

“The reclamation and construction are destructive, especially [because] the infrastructures are constructed in the atolls, which conta in natura l nutr ients in their lagoons,” he said. Also, Alcala added, the reclamation and construction obviously blocked or disturbed the natural sea currents that supply the nutrients to distant marine environments.

He said a 2007 study made by Filipino and Vietnamese marine scientists already indicated a declining catch in and around the Spratly Islands, based on reports of Filipino fishermen.

The study said that the decline was due to the increasing activity of both Filipino and Vietnamese fishermen and other nationalities around the area in East Asia.

Both nations signed the Joint Oceanography and Marine Scientific and Research Expedition agreement in 1994, which declared the Spratlys a marine-protected area. China was invited, but, according to Alcala, Beijing refused to attend or recognize the document.

U.S. MOVES TO REGULATE EMISSIONS BY AIRLINERS

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he Obama administration proposed on Wednesday to regulate aircraft emissions in much the same way as power plants, saying they are a threat to human health because they contain pollutants that help cause global warming.

Using its authority under the Clean Air Act, the Environmental Protection Agency’s (EPA) preliminary finding of endangerment to human health clears the way for possible US adoption of international emissions standards.

The International Civil Aviation Organization (Icao), a United Nations agency, has been working for five years on developing global aircraft emissions standards for the first time. Final agreement on those standards is expected in February of next year. But a final US decision on adoption of international standards is likely to be left to the next presidential administration. EPA officials said the earliest the agency is likely to

propose adoption of Icao standards would be in 2017.

US regulations would also apply only to engines used in large planes, like airliners and cargo jets, turboprop planes and some business jets, and not to smaller jet aircraft, piston-engine planes, helicopters or military aircraft.

While Icao negotiations on the standards are still under way, the standards ultimately aren’t expected to go into effect until 2020 or afterward, and possibly as late as 2025, say environmentalists following the matter.

The international standards are also not expected to apply to airliners in service today or those that might be purchased before the effective date, said Vera Pardee, a lawyer with the Center for Biological Diversity.

The center is one of several environmental groups that sued the EPA to force the agency to issue its finding that emissions endanger public health.

Airlines typically fly planes for 20 years or more before replacing them. That means it’s likely to be decades before planes that meet the anticipated global standards are in widespread use.

Airline emissions account for about 2 percent of total annual global greenhouse-gas emissions.

That sounds small, but it’s nearly as much as the emissions produced

by Germany, the sixth-greatest greenhouse-gas-producing country, according to a study released last year by The International Council on Clean Transportation, an environmental group with offices in the US and Germany.

Aircraft manufacturers have already made significant strides in increasing fuel efficiency. Since the early years of the jet age in the 1960s, the fuel efficiency of airliners has increased 70 percent, according to Boeing. There’s plenty of incentive to be as efficient as possible: Fuel typically vies with labor as airlines’ greatest expense. AP

Drop in Q2 palay, corn output seen

By Mary Grace Padin

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roduction of palay and corn will likely decrease in the second quarter of 2015, according to forecast by the Bureau of Agricultural Statistics (BAS) as of May this year.

Palay production from April to June will probaby decline by 4.3 percent to 3.898 million metric tons (MMT), from last year’s output of 4.073 MMT. This is also lower by 0.1 percent compared to the forecast made in April, at 3.902 MMT. Corn production for the months of April to June may also experience a 17-percent decline to 997,000 MT, from the 1.2 MMT in 2014. This is lower by 3 percent, from the earlier forecast of 1.029 MMT in April.

The report said the decline could be due to the drop in harvest areas,

brought about by the adverse effects of dry spell, insufficient water supply and incidence of pests and diseases in some provinces.

Harvest areas for palay may contract from 0.92 million hectares to 0.91 million hectares. The decrease in harvest areas of palay are foreseen in Agusan del Norte, Bukidnon, Sorsogon, Agusan del Sur, Misamis Occidental Negros Occidental, Capiz, Mindoro Oriental, Samar and Negros Oriental.

Overall yield of palay crops is projected to increase from 4.25 MT per hectare to 4.27 MT per hectare. However, the insufficient water supply and intense heat in Albay, Bulacan, Davao del Sur, Palawan and Apayao may affect the vegetative and reproductive stages of the crop, which may reduce its yield. The report said the incidence of tungro in Laguna and

infestation of stemborer and rice black bug in South Cotabato and Surigao del Norte may also bring down production of palay.

Also, as of May, 630,000 hectares of the updated standing palay crops have already been harvested.

The BAS has also identified about 124,000 hectares, or 14.3 percent, of the planting intentions for the third quarter of 2015.

Meanwhile, the harvest area for corn may contract to 330,000 hectares, from 336,000 hectares. The most affected areas are foreseen to be Bukidnon, Albay, South Cotabato, Camarines Sur, Quezon, Sarangani, Misamis Oriental, Apayao, Capiz, Misamis Occidental, Sultan Kudarat and Leyte. Sarangani and Leyte are also suffering from rodent and bird infestation, which could lead to the output decrease.