BusinessMirror March 11, 2015 by BusinessMirror

U.S. shale gas, shale oil deposits Energy companies are using horizontal drilling and hydraulic fracturing to extract huge amounts of oil and gas from underground rock formations that were previously inaccessible. States that sit on top of

shale with the potential to produce oil or gas using the controversial fracking technique: Current shale drilling areas

Prospective drilling areas

Oil basins

Bakken-Three Forks Antrim

Niobrara Marcellus

New Albany Woodford

899

Permian

Fayetteville

Monterey

Barnett

Eagle Ford

Haynesville

Where the oil rigs are

82,000 wells have been drilled or permitted since 2005

The number of monthly average active oil and gas rigs by state for 2012

Alaska Miss. Ohio

Mont.

Ark.

W.Va.

Kan.

Utah

Calif.

Wyo. Colo.

Pa.

N.M.

124

La.

188

196

N.D.

Okla. Texas

Source: Baker Hughes, U.S. Geological Survey, Fracking by the Numbers Graphic: Judy Treible, Robert Dorrell

2006, 2010, 2012

U.N. Media Award 2008

A broader look at today’s business

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samsung overtaken Personal Tech BusinessMirror

Samsung overtaken as world’s No. 1 smartphone maker B A C Los Angeles Times

PPLE topped Samsung in smartphone sales for the first time since 2012, selling 74.8 million units in the fourth quarter of last year, surpassing Samsung as the No. 1 smartphone maker globally. Apple’s success was driven by huge demand for the iPhone 6 and 6 Plus in the US and in China, according to research firm Gartner. “Samsung’s performance in the smartphone market deteriorated further in the fourth quarter of 2014, when it lost nearly 10 percentage points in market share,” Anshul Gupta, principal research analyst at Gartner, wrote in a report released on Tuesday. “Samsung continues to struggle to control its falling smartphone share, which was at its highest in the third quarter of 2013. This downward trend shows that Samsung’s share of profitable premium smartphone users has come under significant pressure.” It was, however, also a record quarter for the smartphone industry overall: Worldwide sales of smartphones increased 29.9 percent year over

Connected home goes from science fiction to science fact

THE Telpad HC7 from PLDT Home

TAURUS (April 20-May 20): Do your best to get ahead. Take the initiative to go above and beyond the call of duty, and you will prove you have what it takes to be a leader in your field. Don’t rely on others; do the work yourself. ★★★

By Eugenia Last

CELEBRITIES BORN ON THIS DAY: Anton Yelchin, 26; Thora Birch, 33; Johnny Knoxville, 44; Terrence Howard, 46.

GEMINI (May 21-June 20): Don’t leave anything to chance or believe everything you hear. Focus on your ability to adapt to whatever change comes your way and outsmart anyone who challenges you. Romance will enhance your personal life and improve your living arrangements. ★★★

HAPPY BIRTHDAY: You will have plenty of interesting opportunities, but your emotions will cost you this year if you are too busy feeling sorry for yourself to recognize a good thing when it comes along. It will be important for you to take a chance either personally or professionally. Don’t let anyone overshadow you. Contribute what you have to offer and don’t look back. Your numbers are 4, 13, 20, 23, 32, 35, 42.

changing needs of the digitally connected Filipino family.” HIGH-TECH HOME MANAGEMENT FORGOT to turn the air-conditioner off? Want to turn down the volume on the television? Now, consumers can use the PLDT Home Telpad to do that, and more, remotely. The all-new Telpad has an intelligent technology feature that enables it to be used to control home appliances through Wi-Fi and infrared. It is also ideal for controlling PLDT Home’s recently launched home monitoring system, the Fam Cam. In addition to landline and high-speed PLDT Home DSL connection, the Telpad HC7 can connect the family through a built-in WiFi repeater and router.

ARIES (March 21-April 19): Greater opportunity surrounds you. Get involved in networking functions that can provide you with new contacts and a better position. Add to your résumé and you will impress someone influential. A new contract will be offered. ★★★

Today’s Horoscope

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A PDF without the borscht stains B H G Tribune News Service

year to reach 367.5 million units sold. In 2014 smartphone sales totaled 1.2 billion units, up 28.4 percent from 2013 and representing two-thirds of global mobile-phone sales. Part of the problem for Samsung: The market is bifurcating. Apple commands the high-end, aspirational customer while a fast-rising crop of Chinese phone makers are snapping up the more price-conscious buyer. Samsung is caught in the middle. To help combat its market share slide, Samsung released overhauled versions of its Galaxy line of smartphones recently, featuring premium materials and a new emphasis on design. Samsung, based in South Korea, did hang on to the No. 2 spot. Rounding out the top 5 for the fourth quarter were Lenovo, Huawei and Xiaomi, all Chinese companies. Among operating systems, Google’s Android is still dominant, running on 80.7 percent of the smartphones sold globally last year, up from 78.5 percent the year before. BlackBerry, on the other hand, saw its market share by operating system slip to under 1 percent. It now accounts for just 0.6 percent of the market. ■

PLDT Home Telpad, the world’s first and only landline, tablet and broadband in one, recently launched its latest and most high-technology unit to date. The all-new Telpad HC7 is the most advanced centerpiece of the digitally connected Filipino home which is designed to level up the way families connect and manage the home. “Ever since we launched the PLDT Home Telpad, we’ve sought to raise the bar when it comes to communicating and creating meaningful connections at home,” said Ariel P. Fermin, PLDT executive vice president and head of home business. “We continue to embrace the digital age and with it, its benefits for managing the home. The new PLDT Home Telpad HC7 is testament to that, as it addresses the

Music lovers in the family will also enjoy listening to their favorite hits with the all-new Telpad’s high-fidelity speakers that provide distinctly better audio quality output. Connect to the dock via Bluetooth and play songs from your smartphone or laptop. “The PLDT Home Telpad HC7 is the most advanced centerpiece of the digitally connected home,” said Gary Dujali, PLDT vice president and Home marketing head. “It is the ideal platform for enjoying PLDT Home’s suite of multimedia services, and for efficiently managing the way families connect, share and enjoy at home.” This newest and most advanced PLDT Home Telpad is available on high-speed PLDT Home DSL Plan 2099 and up, and all PLDT Home Fibr plans. To know more, visit www.pldthome.com.

I’M not saying that my document needed redacting. After all, it was just my shopping list. But, using Corel PDF Fusion, I was able to black out “pickled herring” on my list. I mean, suppose the National Security Agency found my choice of appetizer was something only a mad Russian would buy. Then I put a watermark of my family crest on the document, in this case a herring superimposed on a bowl of borscht. Since I’m sensitive about what others find out about my culinary proclivities, I encrypted the document, including the redacted shopping item. Corel PDF Fusion did all that for me, and more. Here’s how it works: Create a document in Microsoft Word, PowerPoint or pretty much any other program, drag and drop it onto an icon in the PDF Fusion desktop. Faster than you can say, “Don’t hold back on the beets,” the document turns into a PDF, short for portable document file, which can be viewed on just about any kind of device, including your ditsy great-aunt’s iPhone 3. If you’re using Microsoft Office programs, the formatting will stay intact in your PDF. Once the PDF is created, you can rename it, along with the subject and author, and enter keywords. Editing and searching for words are child’s play. You can add comments to the PDF, along with yellow sticky notes, reorder pages and even drag a page from one PDF to another. If you’re collaborating on a project, you can add PDF pages from your herring supplier in Twillingate Harbour into the cold borscht proposal from your gal in Brooklyn. Fusion opens any kind of PDF instantly just by dragging it to its desktop icon. But the editing features don’t work with a scanned PDF or photos. They will work with original or edited photo files. You can change the order of a scanned PDF’s pages, and text can be highlighted. I wanted to make sure that the borscht was the kind that’s served cold, so I highlighted “cold,” as if I had used a yellow marker. This isn’t the first time I’ve reviewed Fusion, but I’ve been using it for enough time to run it around the grocery aisles many times. I’ve used it far more than I thought, and I’m still impressed with it. I’ve also been using an ancient copy of Acrobat Standard for years, but haven’t been able to afford the steep ($139, or $15 a month) upgrade fee. I like PDF Fusion better because it’s intuitive, has excellent help files and the price is right—$69. A generous 30-day trial version can be downloaded at www.corel.com. Despite it all, though, I didn’t get my pickled herring or borscht. I forgot to un-redact the items, and when I printed shopping list, I didn’t notice that they were blacked out. Naturally, when I got to the store I couldn’t figure out what I had written. Life is a test, and a man without his borscht and herring is a mad Russian who comes to the table in his underwear and howls at the moon.

LIBRA (Sept. 23-Oct. 22): Take initiative and be the one to instigate anything you want to see happen. Don’t let a difference of opinion ruin your day or spoil an important relationship. Love is highlighted and getting along will lead to greater happiness. ★★★★

CAPRICORN (Dec. 22-Jan. 19): Offer what you can, but don’t expect instant results. Someone is likely to oppose you no matter what you do. Rely on your knowledge, expertise and practical way of handling situations, and you will come out on top. ★★★★

Don’t get uptight; get moving. It’s what you do that will count. Stop reworking the same old thing over and over. Make your move and make it count. You need to be creative, not a perfectionist who is never satisfied. ★★★

AQUARIUS (Jan. 20-Feb. 18): Don’t let an emotional situation ruin a perfectly good day. Make personal changes that will enhance your outlook as well as update your appearance. Romance will help you stabilize your love life. An open attitude will be well-received. ★★

VIRGO (Aug. 23-Sept. 22): Mingle, network and communicate directly with the person you want to influence. You have plenty to contribute, so don’t be afraid to share. Striving for perfection and putting additional detail into your work will pay off as long as you finish what you start. ★★

SCORPIO (Oct. 23-Nov. 21):

PISCES (Feb. 19-March 20): Get involved in a discussion with someone who has a different outlook or opinion than yours. Your creative and compassionate approach to what you do will attract the help and support you need to follow through with your plans. ★★★★★

SAGITTARIUS (Nov. 22-Dec. 21):

Expect the unexpected and prepare to deal with whatever comes your way. Hidden secrets may surface that could lead to a situation you have been avoiding. Put the past behind you and enjoy your life. Explore what excites you the most. ★★★

BIRTHDAY BABY: You are emotional, loving and entrepreneurial. You are interesting and enticing.

‘popularity contest’ BY JANET WISE The Universal Crossword/Edited by Timothy E. Parker

ACROSS 1 Sweet tropical fruit 6 Paradise lost 10 Face-to-face exam 14 Body of salt water 15 Balcony section 16 Arid Asian expanse 17 “Popular” question? (Part one) 20 Life, for one 21 Use one’s reflexes 22 Rat-a-___ (drum sound) 23 Amtrak unit 25 Fleur-de-___ (symbol on Quebec’s flag) 26 Imitates a hot dog 30 Insect stage 31 Eleven digits 32 Au ___ (menu phrase) 34 Australian runner 37 “Popular” question? (Part two) 40 Bass-heavy music genre 41 Lend an ear 42 Underling 43 Andy’s radio partner

44 Absolute 45 Space between teeth 48 Fresh from the factory 49 Ballpoint, e.g. 51 Be bombastic 53 Muse of epic poetry 58 “Popular” question? (Part three) 61 Some astronauts’ insignia 62 Eye part 63 Covers the overhead? 64 Marshal’s badge 65 Film about a lovable pig 66 Be theatrical DOWN 1 Does a landscaping chore 2 Bad end for a tooth 3 Advertising sign 4 Dog show concern 5 Beginnings 6 Bumper sticker word 7 Capitol feature 8 “I” problem 9 After expenses 10 Eye up and down

11 12 13 18 19 23 24 26 27 28 29 30 32 33 34 35 36 38 39 44 45 46 47 49

50 52 53 54 55 56 57 59 60

“The ___ Tenenbaums” Old-style counters Catalogs Biochemistry abbr. Off the mark Adorable one Beelike Come down hard Palindromic girl’s name Less than average tide Cooking meas. Agreements Cleaning lady’s target Plant new crops Correct a manuscript Earned ___-friendly Krypton, e.g. Absorb, as an expense Loosen, as skates Garb for grads Enlightened one, in Buddhism Coin of Kolkata Hardly current

Santa’s helper Ivan the Terrible, e.g. Nursery furnishing Menu selection River or state Bombard with snowballs An old Irish tongue “Ad” add-on Failed Constitutional measure (Abbr.)

Solution to yesterday’s puzzle:

personal tech

the next generation of cities? Wednesday, March 11, 2015 • Editor: Tet Andolong

Is PHL equipped to build the next generation of cities?

I’m so thrilled and honored to be joining a stellar cast of resource speakers, and I look forward to gaining a lot of fresh ideas from individuals who remain very passionate with their respective crafts. As the Worldbex celebrates a thriving building and construction industry, I’d like to point out that there seems to be a great number of buildings racing to dot the Metro Manila skyline, as we speak. Interestingly, it’s starting to look like we’re seeing a new generation of high-rise buildings and infrastructure—the elaborately designed ones—that are emerging as icons in various parts of the metropolis. We know for a fact that these edifices require some specialized, advanced machinery and the adoption of modern architecture ideologies, which prompt me to pose this question: “Is the Philippines on the cusp of building the next wave of modern cities?” I spoke to a few industry players about their take on the future of modern architecture and how today’s real-estate developers are adapting to global standards of infrastructure and property development.

Adaptation is key to innovation

WITH the rapid pace of urbanization, the technologies and methodologies involved in the design and building of today’s cities are also becoming more complex to adapt to the needs of the modern times. “In real-estate development, the construction of high-rise buildings in cities and mixed land use, among a few others, have provided developers a cost-efficient way to utilize parcels of land,” said Enrico Micu, national sales manager of Allgemeine Bau-Chemie Philippines. “With the onset of high-rise developments, cities have become more capable of accommodating its expanding population, while lowering infrastructure costs. Mixed-use developments, meanwhile, help enhance the quality of living. As offices, leisure and commercial areas have now become more accessible within the neighborhood, travel time in

CEMEX Asia Director for Business Development Arturo Rodriguez: “Understand that investing in the country and shaking things out of the comfort zone, even though others will eventually adopt the same technologies, will result into growing the pie for your business and putting you in a better position in terms of agility and innovation against our peers.”

construction practices by bringing in technologies and expertise that provide advantages to the current systems in cost, efficiency and quality,” Cemex Asia Director for Business Development Arturo Rodriguez added. “The good thing is that some are already being employed in other developing and more developed countries worldwide.”

Global to local MATIMCO Inc. Marketing Director Billy Arrienda: “We observed that with the awakening consciousness for sustainability and lower waste contribution, technology for wood nowadays is geared toward engineering.”

between places are decreased, thus ensuring a more efficient lifestyle for the inhabitants within the area.” Another key initiative developers and industry players have championed is the move toward the use of energy-efficient building designs and materials. “Notice that major infrastructure nowadays appreciate and incorporate the use of organic and sustainable materials, all the while actively seeking LEED-certifications or in some cases, the local version, Berde,” shared Billy Arrienda, marketing director of Matimco Inc., one of the Philippines’s leading providers of architectural wood products. “With the opening of world markets, a rise in number of developments with foreign designer alliances can also be seen, thus, raising demand for complementing building products with understated aesthetics—minimalist designs that effectively combine different materials and efficient use of space contributing to the overall impact of the design.” Despite this kind of dynamism, the industry has also become used to a certain level of cost and efficiency, as well as market practices that potentially undermine quality. “Here lies the opportunity for willing industry players to infuse innovation into these traditional

BUILDING the next generation of cities here in the Philippines is no easy task; it requires a great deal of commitment to innovation and embracing a more sustainable approach to enhancing the landscape—a vision that translates to concrete solutions for the needs of the modern world. “Here in the Philippines, we have already embraced the use of better materials, like concrete for roads, and now taking the next step by adopting the use of roller-compacted concrete [RCC] pavements,” Rodriguez explained. “This entails the laying of a dry concrete mix placed using an asphalt paver and compacted using a static or vibratory roller. The road is built without forms, dowels or reinforcing steel, while being strong, dense and durable. The RCC pavement is used for select highways with moderate speeds, local streets, parking lots, industrial yards, bus lanes, rural roads and sometimes, as a base for top layers.” The advantage, he adds, includes better cost and a shorter construction time than asphalt and concrete pavements, higher durability than asphalt, and a smoother and more reliable surface than other solutions. For Matimco, meanwhile, planning for new products goes beyond just coming up with new designs. “We consider factors like the current market demand, anticipated future aspirations, wood supply and sources—whether they are sustainable in supply or sourced responsibly—and whether they reinforce our commitment to delivering

superior quality and maximum value to our market,” Arrienda added.

Becoming ‘game changers’

FOR companies to really champion the idea of innovation, one must be able to understand the opportunities that are readily present and come up with strategies to maximize their resources toward this objective. “The key to becoming game changers is by understanding the challenges and needs that the country is facing and the need to respond to them,” Rodriguez explained. “Companies should also be able to promote local research and development, while importing successfully proven products and systems coming from similar markets. Understand that investing in the country and shaking things out of the comfort zone, even though others will eventually adopt the same technologies, will result the growth of the pie for your business and put you in a better position in terms of agility and innovation against our peers.” Agility and flexibility has also been one of the pillars of success of Matimco. “We strive to constantly listen to our customers, keep an eye on local or global trends, and be highly responsive to change because one cannot afford to be stagnant,” Arrienda said. We, likewise, place a premium on integrity and strive to be a trustworthy name in how we conduct business to our market, our stakeholders and the environment. We firmly believe it is a prerequisite for business sustainability.” For the Philippines to really sustain its momentum of building a solid foundation toward the future, industry players must adopt the same mindset that propelled the world’s most successful businesses to the top. As I’ve said in the past, making constant progress, no matter how small or seemingly insignificant it is, will still take you one step closer to reaching your goal. And I’m confident to say that, with industry players committed to shaking up things, it seems like we’re on our way toward achieving sustainable progress.

2 families receive house and lot from Pro-Friends

Experience urban resort living at the heart of Newport City

EWPORT City is one of the best world-class tourist and entertainment destinations in the country that offers a perfect “live, work, play, and learn” lifestyle. It offers an indulgence of “all feel-good” activities, such as do nonstop shopping, dine at favorite restaurants, pampering at various leisure and entertainment offerings, or stay at home with family or friends while enjoying freshly brewed coffee over the cool breeze of fresh air. To experience all these and more, you no longer have to wait for a holiday, as Megaworld, the country’s leading real-estate developer which pioneered the “live-work-play-learn” lifestyle township concept, will bring this kind of lifestyle everyday at 81 Newport Boulevard. The six-clustered mid-rise residential enclave is designed with unique amenities that will let out the resort fantasies of pleasureloving people. Its variety of outdoor amenities include a lap pool, children’s pool, in-water pool lounge, pool deck, sun deck, function areas, green trellis, state-of-the-art gym, day care center, pocket gardens and courtyards.

Another option at 81 Newport Boulevard is the direct access to the township’s very own worldclass entertainment complex where future residents can just take a leisurely walk going to the famous Resorts World Manila, home of an upscale shopping mall; international-themed restaurants; a state-of-the-art performing arts theater featuring world-renowned musicals and other productions; and a firstclass gaming center. Aside from living in a tourist destination designed to fully integrate luxury residences, prime office spaces and an entertainment complex, the 81 Newport Boulevard is also right across the Ninoy Aquino International Airport Terminal 3 and 15 minutes away from central business districts of Fort Bonifacio and Makati City. It also has a direct link to South Luzon Expressway, Edsa and Naia road. 81 Newport Boulevard is a prime address in Newport City where everything you need is within easy reach. Visit the Newport grand showroom at Montecito, the Residential Resort, Newport City (beside Marriott Hotel Manila). www.newportcity.com.ph.

Property

‘doping endemic in cycling’ R

EAL-ESTATE developer Property Company of Friends Inc. (Pro-Friends), in partnership with GMA Network Inc.’s Kapuso Milyonaryo Season 6: Level Up Pamasko, has awarded two Sophie units to this year’s winners: 46-year-old Julieta Suico and 37-year-old Sergio Bolivar Jr. Sophie is a 52-square-meter single-attached house on an 80sqm lot area inside Pro-Friends’ flagship project, Lancaster New City in Cavite. It has three bedrooms, two toilet and baths and a provision for one-car garage.

Sports

While the yearlong probe turned up no major revelations, and found no proof that payments Lance Armstrong made to the International Cycling Union was to cover up positive tests, it suggested doping is still rife.

By Graham Dunbar

The Associated Press

IGLE, Switzerland—As cycling deals with a scathing report into its deep-rooted culture of doping, International Cycling Union (UCI) President Brian Cookson said on Monday that cheating remains “endemic’” in the sport but the governing body will “no longer turn a blind eye” to the problem. Cookson also said he wants former UCI leader Hein Verbruggen to give up his honorary presidency after the 227-page dossier said the governing body colluded with Lance Armstrong to cover up positive tests at the 1999 Tour de France. The UCI was severely criticized in the report for failing to act during the doping era dominated by Armstrong, and broke rules to favor the now-disgraced rider. The report was commissioned by the new UCI leadership to investigate doping that shredded cycling’s credibility and led to Armstrong being stripped of his seven Tour de France titles in 2012. While the yearlong probe turned up no major revelations, and found no proof that payments Armstrong made to the UCI was to cover up positive tests, it suggested doping is still rife. “I do believe that there is still an endemic problem of lower-level doping throughout different levels of our

‘DOPING ENDEMIC IN CYCLING’ membership is at risk. He was an elected member for 12 years, ending after overseeing the 2008 Beijing Games for the Olympic body. The International Olympic Committee did not address questions over whether Verbruggen’s honorary status would be reviewed, though issued a statement welcoming the UCI report. Verbruggen’s chosen successor as UCI leader, McQuaid, said Monday’s report “totally exonerates me on the key questions it set out to answer, on corruption and cover-ups in doping.” Armstrong, Verbruggen and McQuaid were among 174 witnesses from across the sport interviewed by the panel chaired by Dick Marty, a Swiss politician who formerly investigated the CIA’s use of secret interrogation prisons in Europe. Though Armstrong wants to reduce his lifetime ban imposed by the US Anti-Doping Agency, the report did not include any published recommendation. It did say that many riders believe doping is still widespread as athletes adapt to evade new tests and detection methods, including the biological passport program pioneered by the UCI. “A common response to the commission, when asked about teams, was that probably three or four were clean, three or four were doping, and the rest were a ‘don’t know,’” the report said. It said the “generally sophisticated” cheating is

likely done outside team control by riders meeting with “doping doctors.” Cookson said it was “despicable” that some banned doctors continue to work with riders. The report identified former Armstrong associate Michele Ferrari and Eufemiano Fuentes, the Spanish doctor in the Operation Puerto case who was banned for four years in 2013. However, clean riders today have a chance of being competitive, Cookson said. The micro doses of doping products now used, the report said, boost performance by just “3 [percent] to 5 percent gains, instead of 10 [percent] to 15 percent in the EPO era.” The UCI of Verbruggen’s era was criticized for “inadequate” antidoping policies and seeing only excessive drug use as a health problem. The report noted that Verbruggen, “with his business experience” as a marketing executive, saw the potential appeal of Armstrong returning as a cancer survivor to cycling after scandal blighted the 1998 Tour. “UCI saw Lance Armstrong as the perfect choice to lead the sport’s renaissance,” the report said, adding, “the fact that he was American opened up a new continent for the sport.” Armstrong said in a statement last Sunday he was “deeply sorry for many things I have done.” “I am grateful to CIRC for seeking the truth and allowing me to assist in that search,” Armstrong said ahead of seeing the report.

HEIN VERBRUGGEN: I’m not a criminal. I don’t feel guilty of anything.

AUSANNE, Switzerland—Under fire in a scathing report into cycling’s doping culture which said he colluded to protect Lance Armstrong, former International Cycling Union (UCI) President Hein Verbruggen insists he has “nothing to be ashamed for.” “I’m not a criminal. I don’t feel guilty of anything,” Verbruggen told the Associated Press (AP) in an interview on Monday. Still, as president of the UCI from 1991-2005— throughout Armstrong’s seven-year Tour de France title run—the Dutch official was severely criticized in the dossier. The most serious conclusions of the Cycling Independent Reform Commission (CIRC) concern Verbruggen’s UCI covering up doping issues from Armstrong’s first Tour de France win in 1999. Then, cycling sought a new star after a doping scandal the previous year. Current UCI President Brian Cookson said he will ask Verbruggen to resign the honorary presidency he has held for the past 10 years. Verbruggen doesn’t think that threat “is to be taken seriously,” and dismissed suggestions his IOC honorary membership could be at risk. “I think if there would have been bribery, it would have been another story,” Verbruggen said.

VERBRUGGEN DEFIANT The UCI-appointed investigation panel dismissed claims that Armstrong reached an agreement with Verbruggen to pay the UCI $25,000 to cover up alleged positive tests for EPO at the 2001 Tour de Suisse. The panel also found no evidence that Armstrong’s later $100,000 donation to the governing body was linked to discrediting French reports that his 1999 Tour samples later tested positive for EPO. Verbruggen was joined by his successor as UCI president, Pat McQuaid, in expressing satisfaction that the most serious claims were not proven. “This report totally exonerates me on the key questions it set out to answer, on corruption and cover-ups in doping,” McQuaid told the AP. However, the report said both former leaders undermined antidoping efforts and made decisions to favor Armstrong despite suspicions he was doping. It concluded that the Verbruggen-led UCI helped cover up Armstrong’s positive tests for corticosteroids during the race by breaking its own rules to accepting a backdated prescription. “It was in line with our rules,” Verbruggen said Monday. “They [the CIRC] say it wasn’t, we say it was.” In some of the strongest language of the

n n

TfridayNovember Wednesday, March18, 11,2014 2015Vol.Vol.1010No.No.40153

227-report, the panel cited the UCI’s “serious breach of its obligations to govern the sport correctly.” A false medical certificate issued on Armstrong’s behalf PAT MCQUAID feels exonerated by report into doping culture. “should have been reported to the criminal authorities and the relevant medical boards,” the report said. UBLIN—Former International Cycling Union (UCI) President “I have been in the papers for Pat McQuaid says a report into the culture of doping has years for covering up tests, for bribes, cleared him of corruption allegations in the handling of the for EPO cases and so on and so on,” Lance Armstrong case. Verbruggen said. “And we are all back Although the report concluded that he undermined now on a cortisone case in 1999 for antidoping efforts by protecting Armstrong, McQuaid says “this which even the French government report totally exonerates me on the key questions it set out to decided was not a doping case.” answer, on corruption and cover-ups in doping.” An IOC member from 1996-2008, and McQuaid, who was UCI president from 2005 to 2013, an honorary member since, Verbruggen is credited with increasing the antidoping budget but said he would “definitely” attend the body’s criticized for giving Armstrong preferential treatment, next annual session, held in Kuala Lumpur, notably when he was allowed to make his comeback at Malaysia, in July. the 2009 Tour Down Under. The IOC did not address questions put by McQuaid tells the Associated Press “the man was fully the AP about a possible ethics commission entitled to compete in the sport, just like any athlete, case against Verbruggen when it issued a because we tested him more than 200 times and he statement on Monday welcoming publication never tested positive.” AP of the CIRC report. AP

MCQUAID: I’M CLEAR

sports

the Court to rule upon them anew,” the SC ruled. On the other hand, it was Chevron (formerly Caltex Philippines Inc.) which sought the Court’s clarification. The Court pointed out that there are overwhelming reasons stated in its previous decision to support its pronouncement that the very nature of depots has no place in a densely populated area. Continued on A2

FDI INFLOWS ROSE 66% IN 2014 T0 REACH NEW ALL-TIME HIGH

| Wednesday, MarCh 11, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

sport,” Cookson said on Monday. Still, the UCI chief questioned the claim of one Cycling Independent Reform Commission (CIRC) witness who suggested 90 percent of top-level riders still dope. Cookson hopes publishing the report can help turn the page on the doping era. “We will no longer turn a blind eye to doping, we will no longer assist people in covering up doping,” he said. Cookson’s two predecessors, Verbruggen and Pat McQuaid—described respectively in the report as “autocratic” and “weak” leaders—were severely criticized for undermining antidoping efforts. “I am surprised and occasionally appalled by some of the things” in the report, said Cookson, citing Armstrong’s 1999 Tour win as “an absolutely critical moment” in sending a message the UCI was not serious about stopping doping. The report confirmed Armstrong’s first Tour title was possible only because the UCI accepted a back-dated prescription for corticosteroids to explain positive tests during the race. Still, Verbruggen insisted he had “nothing to be ashamed for” and that UCI rules were not broken. “I’m not a criminal. I don’t feel guilty of anything,” Verbruggen told the Associated Press in an interview on Monday. The Dutch official dismissed threats to his UCI figurehead role and suggestions that his honorary IOC

10.74 2.0 2.3

6.44

3.5

Other Liquified natural gas Total crude oil

10.4

2012

2017

• U.S. has 60 percent of the world’s drilling rigs; 90 percent of them can do horizontal drilling, key to hydraulic fracturing, or fracking • Hundreds of small independent companies ready to develop new resources and technology • Private ownership of mineral rights

Top shale oil nations

Top shale gas nations

Recoverable shale oil, in billions of barrels Russia U.S. China 32 Argentina 27 Libya 26 Australia 18 Venezuela 13 Mexico 13 Pakistan 9 Canada 9

Recoverable shale gas, in trillions of cubic feet China 1,115 Argentina 802 Algeria 707 U.S. 665 Canada 573 Mexico 545 Australia 437 S. Africa 390 Russia 285 Brazil 245

75 58

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

HE Supreme Court (SC) on Monday clarified that its ruling issued last November mandates oil companies to remove the entire oil facilities out of Pandacan, Manila, and not merely to cease operations.

By Bianca Cuaresma

BusinessMirror

BRIAN COOKSON: I do believe that there is still an endemic problem of lower-level doping throughout different levels of our sport. AP

2.0

• Access to cutting edge technology and lots of venture capital

SC: Dismantle the oil depot T At a news briefing, SC Spokesman Theodore Te said the magistrates agreed to issue such clarification during their regular en banc session, where they also junked the motion for reconsideration filed by Pilipinas Shell Petroleum Corp. “The Court denied the motion for reconsideration of Shell, because the reasons given had already been decided upon by the Court, and there was no need for

BusinessMirror

COULDN’T contain my excitement the moment I received an invitation to speak at the 17th Worldbex Conference, which will be kicking off next week.

15.9

What puts U.S. ahead in the shale revolution

By Joel R. San Juan

CANCER (June 21-July 22): You’ll have to do things differently if you want to avoid being accused of copying someone. Focus on your own ideas and look for ways to distinguish yourself from the crowd. Don’t let personal matters stop you from taking care of your work responsibilities. ★★★★★ LEO (July 23-Aug. 22): Keep your emotions under control and focus on what you can do to make selfimprovements while also adding to your skills. Someone will try to take money or possessions from you. ★★★

The U.S. is on target to reach its highest oil production ever by 2017; projected production in millions of barrels per day

COURT CLARIFIES THAT FINAL RULING MANDATES OIL FIRMS TO COMPLETELY REMOVE PANDACAN TERMINALS

INSIDE

Wednesday, March 11, 2015

he biggest slowdown in oil drilling on record is showing signs of reining in the US shale boom. US shale-oil output is expected to post the slowest growth in more than four years in April, the Energy Information Administration (EIA) said on Tuesday. That follows a 41-percent plunge since December in the number of drilling rigs seeking oil. »A2

Record oil production?

BusinessMirror

three-time rotary club of manila journalism awardee

U.S. Shale-Oil Growth Slows as Price Crash Idles Drill Rigs

Energy boom gives U.S. clout The shale oil and gas bonanza gives the U.S. dominance in the global energy sector because few nations can exploit their shale energy reserves as the U.S. has with hydraulic fracturing.

oreign investors who have taken a long view on the Philippines in 2014 poured an aggregate $6.20 billion, a new all-time high and 66 percent more than the year before, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday. According to the BSP, foreign direct investments (FDI) in 2013 totaled only $3.34 billion and an indication of heightened investor regard for the $272-billion economy that expanded by 6.9 percent in the final quarter last year and the fastest it has achieved the past five quarters. The Philippines expanded last

PESO exchange rates n US 44.2500

year by 6.1 percent versus 7.2 percent the previous year. This development, the central bank said, was “buoyed by strong investors’confidence in the country’s solid macroeconomic fundamentals.” In particular, for the month of December alone, FDI amounted to $557 million, surging more than fivefold from $102 million recorded in the same month a year ago. The December 2014 inflows were also higher than the $399 million reported the previous month. Based on government expectations, the FDI inflows in 2014 exceeded the projected number by $1.8 billion. See “FDI,” A2

QUILL AWARDS In celebration of its 25th year, leading property developer Megaworld bagged 12 coveted awards at the prestigious 13th Philippine Quill Awards held on Monday night at the Crowne Plaza Galleria Manila, making it the most awarded real-estate company during the awards night. Garnering its first Quill victories, Megaworld has earned its way to become a front-runner and trailblazer in business communications in the Philippine real-estate industry. The company won four excellence awards for the various campaigns of Megaworld Lifestyle Malls: Race to Success: Welcoming the Year of the Horse at Lucky Chinatown (Marketing Communications); Eastwood City Pet Blessing 2013: Promoting Responsible Pet Ownership (Special Events); Saint John Paul II Canonization—Celebrating Our Most Beloved Pope (Special Events); and Adventures Around the World in Easter Wonderland World Explorers (Special Events); and eight merit awards for the Megaworld: 25 Years of Building Visions (Multi-Audience Communication); Megaworld’s Silver Tie Gala: Building Visions for 25 Years (Special Events); Megaworld 25 Years Chronicles of Vision coffee-table book (Publication and Corporate Writing); Megaworld 25 Years: Building Visions AVP (Audio/Visual); The Megaworld Lifestyle Malls Magazine—Your Guide to the Good Life (Publications); Eastwood City’s New Year Countdown to 2014—Welcoming the New Year with Hope (Special Events); and Megaworld Foundation’s Breaking Ground and Thriving coffee-table book (Publications). Receiving the awards were (from left) Tefel Pesigan-Valentino, head of marketing and business development, Megaworld Lifestyle Malls; Kim Sta. Maria, head of corporate communications and advertising, Megaworld; Harold C. Geronimo, head of public relations and communications, Megaworld; Lourdes Gutierrez-Alfonso, chief operating officer, Megaworld; Kevin L. Tan, first vice president and head of commercial division, Megaworld; Jericho P. Go, senior vice president, Megaworld; Francis Canuto, president, Megaworld Foundation; and Danilo Madlansakay, executive director, Megaworld Foundation.

Exporters off to a poor start this year By Cai U. Ordinario

he slowdown in the country’s export earnings in Ja nu a r y m ay cont i nue in the short term on the back of wea k demand f rom the United States, according to the National Economic and Development Authority (Neda). T he Ph i l ippi ne St at i st ic s

Authority (PSA) on Tuesday disclosed that the country’s export earnings contracted 0.5 percent in January 2015. This was, however, higher than the 3-percent contraction posted in January 2014 and 3.2-percent decline in December 2014. “While the Japanese and Chinese m a nu fac t u r i ng sec tors slightly recovered in February, recent developments in the US

manufacturing sector may further strain exports over the short run. The composite index for the US manufacturing sector suggests a moderation in the next period, reflecting the downward trend in new orders and employment in the sector,” Neda Director General and Economic Planning Secretary Arsenio M. Balisacan said. Continued on A8

n japan 0.3653 n UK 66.9370 n HK 5.7043 n CHINA 7.0637 n singapore 32.0722 n australia 34.2307 n EU 48.0290 n SAUDI arabia 11.7994 Source: BSP (10 March 2015)

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Wednesday, March 11, 2015

SC: Dismantle the oil depot

U.S. Shale-Oil Growth Slows as Price Crash Idles Drill Rigs

Continued from A1

A slowdown in US output would come at the same time that refineries are expected to return from seasonal maintenance and bring relief to an oil market that has seen prices decline more than 50 percent since June. Companies had 444.4 million barrels of oil in storage in the US as of February 27, the most in weekly records dating back to 1982. “You have refineries coming back out of maintenance, and production getting cut back,” said Carl Larry, head of oil and gas for Frost & Sullivan Lp. in Houston. “Everything could come together where, all of a sudden, everyone thought there was plenty of supply and there’s not.” Oil production from six major US shale plays will be 5.6 million barrels a day in April, an increase of 298 over March, according to the EIA’s estimate. It’s the smallest projected increase since February 2011.

DOTC. . .

news@businessmirror.com.ph

Continued from A8

ready and we will get a consultant to revise the plans.” The new terminal is designed with a capacity of 10 million passengers annually. “If the Neda Board runs smooth on the Clark terminal, the bidding will start on the third quarter of this year. “Hopefully, construction will be on second quarter of 2016 and completion will be around 2018,” he said. “What is important on my end is to get it to the Neda Board for approval.” The target is two years behind the initial goal of completing the low-cost terminal by the time President Aquino bows out from office in 2016. In 2013 the gateway to Northern Luzon saw an expansion of its passenger-terminal building through a P417-million deal that boosted the annual passenger capacity of the airport to 4 million, from 2.5 million passengers, per year. At present, the airlines operating out of Clark include Cebu Pacific, Tigerair Philippines, Jin Air, Asiana, Dragaon Air and Qatar Airways.

It cited the history of the Pandacan terminals, where flames spread over the entire city of Manila when fuel-storage dumps were set on fire in December 1942, and another incident involving an explosion—both of which were discussed in an earlier challenge to the oil depots. It pointed out that its decision is clear and that it was the City Ordinance 8187 that had been declared unconstitutional and invalid as far as the continued stay of the Pandacan Oil terminals is concerned. “The Court resolves to clarify that the relocation and transfer necessarily include the complete removal of the facilities in the Pandacan terminals and should be made part of the required comprehensive plan and relocation,” the SC ruled. It also reminded Petron that it did not give its consent to consider January 2016 as separate deadline for compliance with its decision. “The timelines prescribed in the assailed decision shall be observed to the letter,” it stressed. The Court also said its decision is final and that no further pleadings will be entertatained to avoid further attempts to delay the enforcements of its decision Last November the SC declared unconstitutional and invalid Manila City Ordinance 8187, which the oil companies were using to justify the continued operation of the Pandacan oil depot. The Court also directed the Manila City government to cease and desist from implementing the said ordinance. Instead, the Court affirmed the validity of Manila City Ordinance 8027, which reclassifies portions of the Manila districts of Pandacan and Santa Ana from industrial to commercial and directs certain business owners and operators, including Caltex (Philippines) Inc., Petron Corp. and Pilipinas Shell Petroleum Corp. to cease from operating their businesses.

The SC declared in its February 13, 2008, decision that the objective of the ordinance “is to protect the residents of Manila from the catastrophic devastation that will surely occur in case of a terrorist attack on the Pandacan terminals.” However, following the February 2008 ruling, the Manila city government approved in 2009 Ordinance 8187, or “An Ordinance Amending Ordinance No. 8119, otherwise known as The Comprehensive Land Use and Zoning Ordinance of 2006,” in an apparent bid to allow oil companies to remain at the Pandacan oil depot. Ordinance 8187, according to the petitioners Manileño Kontra Abuso led by lawyer Vladimir Cabigao and the Social Justice Society led by lawyer Samson Alcantara, allows the reintroduction of hazardous, highly poisonous and toxic activities and substances within the Pandacan premises, as it reclassifies the area as an industrial zone, thus, allowing the three major oil firms to maintain their oil depots in the 36-hectare area. In its November 2014 decision, the SC has given the oil companies six months to remove their Pandacan oil terminals after its submission of an updated comprehensive plan and relocation schedule. It also gave the oil firms 45 days to submit the relecation plan. Former Philippine Economic Society President Alvin Ang said oil prices could increase once the depot is moved farther away from Manila due to additional transportation costs. In terms of its impact on the country’s gross domestic product (GDP) growth, Ang said the increase in oil prices in Metro Manila may be reflected in the expenditure side of GDP, particularly in private-sector spending. Ang added that other consequences include lower tax revenues and some job losses in the services sector. However, Ang said these may easily be recovered by the new development that will be placed in the location of the Pandacan oil depot.

3-DAY EXTENDED FORECAST MARCH 11, 2015 | WEDNESDAY

TODAY’S WEATHER

MAR 12 THURSDAY

But Li sneered at the two countries strategic partnership because “Manila and Hanoi’s combined strength is merely a fraction of China’s.” “In the short run, this partnership might gain themselves some leverage in dealing with China, but these petty interests would be acquired at the larger cost of China’s trust, thus, doing no good to peace in the South China Sea.” The third option, which includes Asean in the mediation, is the point where the interests of all parties can be balanced, according to Li. He said Chinese Foreign Minister Wang Yi has suggested a dual-track approach, which seeks a one-onone mechanism in sovereignty issues, but an all-inclusive system in regional peacekeeping. “China has offered a flexible solution, and now is the time that the other claimants show their sincerity.”

Ang said in terms of job losses, however, he does not expect workers who are highly skilled like chemists to lose their jobs since they are still needed in the new depot that will be located outside of Metro Manila. Most of those who will lose their jobs, he said, are those in the services sector. These jobs, however, are easy to replace because of the plan to redevelop the oil depot. University of Asia and the Pacific School of Economics Vice Dean Cid Terosa said the impact on local fuel prices may be minimal since fuel costs are more dependent on movements globally. “Yes, there are potential logistics problems related to the delivery of fuel to their users. As for fuel prices, the rise in distribution or transportation cost can exert upward pressure on prices. Of course, the influence of price trends in the world market on fuel prices will be greater than the influence of relocating the oil depot,” Terosa said. Former Budget Secretary Benjamin Diokno said in the long term, the new location may bring in a lot of investments to the city of Manila. Diokno even said the downside effects of relocating the oil depot such as higher oil prices and job losses, as well as lower tax revenues, may be compensated by the redevelopment of the oil depot. Terosa added that if the present location of the oil depot is redeveloped correctly, there will be sizable economic gains, particularly for the city of Manila. “The transfer will free up the area to new business and investment ventures. Initially Manila will bear the loss of tax revenues, but over a long period of time, Manila will benefit if the area is used productively to provide income and jobs,” Terosa said. "I cannot expect for any of the oil companies, but anything like that which involves logistics and supply chains should be done very gradually; six months is too short," said John Forbes, senior adviser of the American Chamber of Commerce. With Cai Ordinario

MAR 13 FRIDAY

METRO MANILA

20 – 32°C

20 – 33°C

TUGUEGARAO

19 – 33°C

LAOAG

LAOAG CITY 19 – 30°C

MAR 14 SATURDAY

FDI. . .

Continued from A1

The government’s FDI target for the year was set at only $4.4 billion. The record high FDI inflows resulted from net equity capital infusion rising by 206.7 percent to $2 billion from only $664 million in 2013. Investments in debt instruments, alternately known as intercompany borrowings, grew by 26.1 percent to $3.3 billion. So-called reinvestment of earnings, meanwhile expanded by 94.8 percent to $819 million. Equity capital investments came mostly from the US, Hong Kong, Singapore, Japan and the UK. These were channeled mainly to the financial and insurance sectors, the manufacturing sector, the real-estate sector, mining and quarrying sector and the wholesale and retail trade sector.

MAR 12 3-DAY THURSDAY EXTENDED FORECAST

MAR 13 FRIDAY

MAR 14 SATURDAY

20 – 32°C

METRO CEBU

23 – 31°C

24 – 31°C

19 – 32°C

TACLOBAN

21 – 30°C

22 – 30°C

20 – 30°C

CAGAYAN DE ORO

SBMA/CLARK 21 – 32°C METRO MANILA 19 – 32°C

TAGAYTAY CITY 18 – 28°C

20 – 30°C

19 – 30°C

22 – 31°C

21 – 31°C

23 – 33°C

23 – 32°C

23 – 33°C

24 – 34°C

23 – 34°C

MOONRISE

BAGUIO

14 – 24°C

14 – 25°C

METRO DAVAO

SBMA/ CLARK

21 – 33°C

ZAMBOANGA

TUGUEGARAO CITY 19 – 32°C

BAGUIO CITY 13 – 24°C

TAGAYTAY

18 – 29°C

19 – 28°C

LEGAZPI ILOILO/ BACOLOD 23 – 31°C METRO CEBU 23 – 30°C

TACLOBAN CITY 20 – 30°C

CAGAYAN DE ORO CITY 21 – 31°C

ZAMBOANGA CITY 23 – 34°C

PUERTO PRINCESA

ILOILO/ BACOLOD

22 – 30°C

23 – 30°C

SUNSET

MOONSET

6:07 AM

6:06 PM

9:35 AM

FULL MOON HALF MOON

23 – 32°C

24 – 32°C

MAR 14

CELEBES SEA

8:25 PM

0.09 METER 2:05 AM 1:48 AM Partly cloudy to at times cloudy with rain showers and/or thunderstorms

24 – 32°C

Cloudy to at times cloudy with rainshowers and/or thunderstorms Light rains

Weekday hourly updates: 6:00 AM on Balitaan, 7:00 AM & 8:00 AM on Good Morning Boss!, 9:00 AM, 10:00 AM, 11:00 AM, 12:00 PM, 1:00 PM on News@1, 3:00 PM, 4:30 PM, and 6:00 PM on News@6

www.panahon.tv

SABAH

LOW TIDEMANILA HIGH TIDE

Partly cloudy to at times cloudy with rainshowers

23 – 32°C

11:33 PM

SOUTH HARBOR

MAR 6

Watch PANAHON.TV everyday at 5:00 AM on PTV (Channel 4).

METRO DAVAO 23 – 32°C

SUNRISE 19 – 28°C

LEGAZPI CITY 21 – 29°C

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

Continued from A8

NORTHEAST MONSOON AFFECTING LUZON (AS OF MARCH 10, 5:00 PM)

Northeast Monsoon locally known as “Amihan”. It affects the eastern portions of the country. It is cold and dry; characterized by widespread cloudiness with rain showers.

PUERTO PRINCESA CITY 23 – 31°C

China. . .

@PanahonTV

1:15 PM

0.75 METER

The Nation BusinessMirror

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Editor: Dionisio L. Pelayo • Wednesday, March 11, 2015 A3

Poll watchdog: Smartmatic will ensure admin bet’s victory in ’16

By Joel R. San Juan

LECTION watchdog Citizens for Clean and Credible Election (C3E) on Tuesday accused proadministration legislators of paving the way for the victory of President Aquino’s presidential candidate in 2016, by ensuring that SmartmaticTotal Information Management will remain as the country’s sole provider of automated voting machines for next year’s elections.

C3E co-convener Nicanor Elman said this could be the main reason key leaders of the proadministration House of Representatives “are suspiciously turning a blind eye on the frailties” of the Venezuelan company’s Precint Count Optical Scan machines used in the past national and local polls. “What we are trying to understand is, why some leaders of Congress had apparently turned defenders and apologists for Smartmatic,”

Elman said in a statement. “If ever the elections push through, the Smartmatic cheating machine seems part of the grand equation for the administration,” he added. Elman said that a number of congressman revealed their “bias for Smartmatic,” and even manifested questionable motives over that of the national interest of ensuring clean and credible elections.

“There have been plenty of issues raised against Smartmatic, even as far back as 2009. We wonder why not one among these members of Congress has come out and asked questions about Smartmatic’s numerous acts of omission and misrepresentation,” he said. Elman went to the extent of challenging the alleged “congressman-defenders” to debate over the issues raised against Smartmatic. “Since they have come forward in defense of Smartmatic, we challenge them to publicly debate over the merits of Smartmatic. We are convinced that Smartmatic should not be allowed to participate any longer and cause further damage to our electoral system,” Elman said. The C3E is particularly protesting the manner by which Liberal Party congressmen took turns in assailing a decision of the Commission on Elections’ (Comelec) Bids and Awards Committee (BAC) last week disqualifying Smartmatic and another bidder for additional counting machines for submitting unresponsive bids. He said that, while the decision will set back preparations for the 2016 elections, the congressmen “went overboard.” “Overstretching legislative un-

JIMENEZ: “We don’t expect to come down to zero naman...more or less mga 1 [million] to 2 million iyong potential na hindi na talaga boboto.”

dertones, they obviously sounded more like lawyers and defenders of Smartmatic,” Elman said. He said that what the administration congressmen refused to see was the Comelec’s failure to identify the more compelling and solid grounds to exclude the Venezuelan company from the bidding. Smartmatic was disqualified by the Comelec BAC for having submitted a bid with no price indication on several items. Fellow bidder Indra Sistemas was also disqualified for placing a bid higher than the approved budget for the contract. Earlier, C3E, the Integrated Bar of the Philippines and Automated Election System Watch filed separate petitions before the Supreme Court, seeking to enjoin the Comelec from awarding any contract in connection with the 2016 elections to Smartmatic ow-

ing to its failure to comply with the country’s elections laws and other violations. Meanwhile, the Comelec said that it is expecting between 1 million and 2 million voters to skip next year’s elections. “We don’t expect to come down to zero naman...more or less mga one [million] to two million iyong potential na hindi na talaga boboto,” Comelec Spokesman James Jimenez said. He said this would include those who failed to vote twice in previous elections; those who died; those who migrated; those who are convicted and those who gave up on the electoral system. Jimenez said having an estimated two million voters not having their records validated is already acceptable for the Comelec. “Our goal has always been to bring that number down...basta dapat walang ma-disfranchise,” Jimenez said. Currently, the poll official said they have already brought down the number of registered voters who have been found to be without biometrics data to 4.7 million, from the 9.6 million last May. Voter validation is defined as the process of adding a registered voter's biometrics data into his or her existing registration record.

Republic Act 10367, or the Mandatory Biometrics Registration Act of 2013, provides that voters who fail to submit for validation prior to the May 2016 elections shall be removed from the voters’ list and shall not be allowed to vote. Biometrics data refer to the automated identification of an individual, particularly his or her photograph, fingerprint and signature. Meanwhile, the Comelec called on private and public schools to open iRehistro centers in their establishments to help encourage their students to become registered voters. Jimenez said they are hoping that school administrators will accomodate the online accomplishment of voter-registration application system of the Comelec. “We’re calling out to schools to get in touch with us and then we’ll come to you and set it up, para matulungan naman ang mga kabataan natin,” Jimenez said. He said the help of the schools is crucial in ensuring that students would have access to registration facilities by providing a special area, computer units and Internet access. Voter registration for the 2016 elections will be until October 31, 2015.

Palace won’t press charges vs ex-SAF Policemen to get more submachine guns commander for ‘deceiving’ Aquino T By Butch Fernandez

FTER pinning all the blame on the former Special Action Force (SAF) chief, Director Getulio Napeñas, for the massacre of SAF commandos in Maguindanao, Malacañang said on Tuesday that it has no plans to press charges against Napeñas for “deceiving” President Aquino. The Palace also left it up to the Senate and the National Police Board of Inquiry to determine the accountability of Aquino’s trusted aide, suspended National Police chief Alan Purisima, through whom Aquino coursed orders to the SAF commandos tasked to serve arrest warrants against two terrorists hiding out in a known Moro Islamic Liberation Front territory. Communications Secretary Herminio B. Coloma Jr. clarified that Aquino, speaking before Christian sect leaders at a prayer gathering at the Palace on Monday, did not intend to heap blame anyone, having publicly assumed responsibility for the Mamasapano bloodshed in his speech on February 6 where the President also cited three instances where the SAF mission could have been aborted by Napeñas to spare the lives of SAF commandos. As for Purisima’s accountability for taking part in the police operation in Mamasapano despite being under suspension on alleged graft charges, Coloma said: “Ito ay tutukuyin ng Senado sa kanilang ulat at tutukuyin din ng Board of Inquiry.”

‘Rise above your anger’

DAVAO CITY—Mayor Rodrigo Duterte urged alumni of the Philippine National Police Academy and active police officers here to rein in their disgust over the mishandling of the Mamasapano operation and to allow Aquino to finish his term of office. “Rise above your anger,” he told a late night command conference on Sunday, during which he also put on speak-

erphone his conversation with a local New People’s Army commander who extended apology for the ambush of a police team that was supposed to respond only to a rural traffic accident. Duterte told the different police station commanders here that the country would not benefit with another round of coup d’etat that “would only send you to a label as an international pariah.” “For me, I would rather have the President finish his term,” he said. However, Duterte repeated his call on Aquino “to own up to the Mamasapano killing.” “It’s not difficult to say that he [Aquino] ordered the operation and to say sorry that the operation failed and 44 policemen were killed,” he said.

House hearings on carnage

AT least 82 lawmakers on Tuesday urged the leadership of the House of Representatives to continue its hearing on the SAF massacre. In a letter-petition to Speaker Feliciano Belmonte Jr., the lawmakers, led by the minority bloc, requested for the immediate resumption of the lower chamber hearings on the bloody Mamasapano encounter on January 25 that killed 44 SAF commandos. Minority Leader Ronaldo Zamora, in a news conference, said that their bloc has filed a resolution urging Belmone to resume the investigation on the incident. “We’re determined to ensure the hearing on the Mamasapano takes place again. You cannot talk about the Bangsamoro basic law without determining the truth behind Mamasapano,” he said. Last month the lower house suspended its investigation into the Mamasapano encounter pending submission of the report of the Board of Inquiry. According to Belmonte, he would reconsider the resumption of its investigation if the report submitted by the BOI turns out to be unsatisfactory. With Manuel Cayon and Jovee Marie N. dela Cruz

DANGEROUS JOB Two glass cleaners polish the façade of the building in Makati City. The two help make the city look cleaner. NONIE REYES

HE National Police is acquiring 743 submachine guns worth P133,740,000 as it moves to beef up the firepower of its personnel. Chief Supt. Generoso Cerbo, National Police spokesman, said the firearms would be acquired through public bidding, with the opening of bids already set on April 17. He said the submachine guns should be deliv-

ered within 150 days and in two tranches, with the first tranche consisting of 400 units and the second tranche consisting of 343. Acompletesetofbiddingdocumentscanacquired by interested bidders from March 4 to April 17 upon the payment a nonrefundable fee of P50,000. “The prebid conference would be held at the National Police’s main conference

room on March 17 at 9 a.m.,” said Director Juanito Vaño Jr., chairman of the Bids and Awards Committee. Meanwhile, the PNP will also buy 34 highfrequency, single-sideband base radio sets. The transceiver radios will be acquired through the funds of P17 million that will be taken from the 2014 budget of the National Police. Rene Acosta

Business

Wednesday, March 11, 2015 | www.businessmirror.com.ph

VISTA RESIDENCES BUILDS ‘HOMES A AN artist's rendition of the soon to rise Vista GL Taft along Taft Avenue in Manila

B J V B.  B

EARLY everywhere in the world, “university towns” are developing around educational institutions. Residences and businesses for the academic community have been proliferating, turning schools’ environs into selfsustained villages—cities-inminiature—that cater to the needs of students and faculty. Vista Residences, the high-rise condominium arm of the country’s biggest property developer, Vista Land, is tweaking the concept of the university town by building vertical versions for the country’s key universities, lifting “higher learning” even higher. By creating its “University Series,” Vista Residences is giving students better living options while in school. The company has a special place in its heart for the academe, believing very strongly that the country’s future depends on the education of its youth. Thus, in an effort to further empower this sector, the group has created vertical residences that are designed around student needs, as well as those of the rest of the academe. Fully understanding the pressures and difficulties of student life, Vista Residences believes they deserve better than the dorm options commonly available today. The University Series condominiums, for instance, are equipped with study areas and common spaces, which are perfect for discussions and provide a respite from the stresses of academics. Also, by building living options closer to the schools, students are spared the inconvenience and long hours of the daily commute to and from their homes. This allows them to spend more time studying and attending other school activities. The locations of the Vista Residences university condominiums allow their residents to take better advantage of student life and better enjoy what is usually a short, but meaningful and memorable time.

A STUDENT'S retreat after a long day at school

Creating the perfect lifestyle for the nation’s developing minds

The Vista Residences properties are actually just across or within walking distance from universities, and since many of the schools are located close together, there is at least one University Series tower literally a few steps away. It is also interesting to note that Vista Residences always takes into consideration the unique needs and personalities of each of their markets. Beyond the usual conveniences of condominium living, each property is meticulously designed for those whose lives revolve around institutions of learning. Their study needs, as well as other everyday concerns like food, laundry and socializing, are key aspects that are considered when designing the condominiums. Proximity to the schools and universities is key, of course, but equally crucial is safety and security. With Vista Residences, the residents—and their parents— have less to worry about. This is especially important when one’s main customers are students— young, probably rather carefree— and for many, moving into a condo or dorm could be the first time they have been away from home. Each building is equipped with a guarded reception area and parking, smoke and fire alarms, sprinkler systems, generators and CCTV systems in most of the common areas. Beyond all these, the vertical residences of the University Series offer facilities both typical to the Vista Residences condominiums, as well as those especially designed for academic life. For instance, the amenities designed into the University Series’ towers are inspired by the Google offices. Currently in nine projects—four

of which are already sold out— each university tower houses an E-Library, a completely modern and ideal learning hub; a fitness center that also promotes recreational sports; a swimming pool; a roof deck; and multi-purpose function rooms for hosting parties, other social events and school meetings or study groups. Another interesting feature in the design of the University Series is that each building uses solar panels, which is an effort to decrease their carbon footprint. To date, the solar panels are used to power select communal areas and mobile charging stations. In the future, Vista Residences hopes to use solar energy to supply even more of its electricity needs.

A topnotcher in building projects that cater to students

Vista Residences has four standing university projects: Crown Tower University Belt launched in 2005, Vista 309 Katipunan and Vista Taft in 2011, and 878 España launched in 2012. All four have been sold out—a testimony to their ideal locations, well-thought out designs and facilities, quality, and how well each caters to the needs of students and educators. Owing to the success of these four properties, Vista Residences is ready to launch five more that are just as strategically located near universities within Metro

INTEGRATING learning and fun in one conducive environment

AN onsite fitness center with everything one needs for a good workout

ssMirror

www.businessmirror.com.ph | Wednesday, March 11, 2015 A5

AWAY FROM HOME’ FOR STUDENTS Manila and key provincial destinations, namely: Vista GL Taft, Vista Heights in Legarda, Vista Brenthill in Baguio, Vista Katipunan in Quezon City the second project in the area and Vista Recto in Manila. A lot more projects are in the pipeline and will begin construction within the year. With five new towers and another four sold out under the University Series, Vista Residences is redefining what student living is about. The sedate and crowded dormitories are still around, but considering the success of the company’s first four forays into student housing, it seems the market is asking for better living options and a more

progressive vision that better caters to the evolving needs, priorities, and preferences of our student body.

An investment in education, a lifestyle and the future

The condominiums are also wise investments, as they are all located within the Metro’s key commercial and business centers, allowing access not just to schools and universities, but also to the main places of work and entertainment, as well as transportation hubs. These are investments that can be passed on from one generation to

the next, as it is common practice in the country for families to be loyal to particular schools. Also, while the University Series properties were designed for the more “scholarly,” their size, affordability and locations make them just as perfect as homes for new families, yuppies, and those who work in the metro and thus need a “halfway home” closer to their offices. To learn more about the Vista Residences’ University Series properties, call 650.0753 or 0999.887.1705 or visit www.vistaresidences.com.ph. For news, updates, and announcements, follow vistaresidencesofficial on Facebook and vistarescondo on Instagram.

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STUDYING together creates an inspired learning experience

A6 Wednesday, March 11, 2015

Opinion BusinessMirror

editorial

An irresistible force meeting an immovable object

HAT happens when an irresistible force meets an immovable object? This paradox of old comes to mind when we read of the Chinese Ambassador to the Philippines saying “China is willing to work with the Philippines to move and bring our bilateral relations to new heights” while the Foreign Minister in Beijing is asserting that China “had the right to construct on its claimed territories in the South China Sea and won’t accept criticisms from others about it.”

We can imagine in parallel fashion the Philippine Department of Foreign Affairs affirming its readiness to settle the issue of the Spratlys through peaceful negotiation and the Department of National Defense declaring that the country’s exclusive economic zone cannot be a subject of compromise. The internal dissonance in the articulations of the two high officials on each side can be assumed to be intentional, to assure the domestic population that, in any negotiation, the national interest will be protected. In any case, we support wholeheartedly the ambassador’s sentiment. The ambassador placed matters in perspective when he said China has high goals of growth and development and, to “reach these targets, it is essential to maintain regional peace and cooperation with our neighbors and countries in other parts of the world.” The ambassador pointed out that, as it grew, China could contribute much to the development of the countries in the region, in trade and tourism, among various activities. His entreaty is worth repeating. “Let us maintain stability and peace in the region, particularly the South China Sea. Let us be kind and gentle to each other. Let us be hardworking and perseverant in making new progress for the betterment of China-Philippines relations.” Philippine-Chinese cooperation can only be extremely favorable to both countries. Our potential for exporting manufactured products to China is enormous. We can also export services, especially in banking, finance and the professions. Philippine exports to China can double in four to five years. All of this will create employment opportunities and increase income in the Philippines for the betterment of the lives of Filipinos. One needs not go as deep in history as the Manila-Acapulco Galleon Trade of the 18th century which, among other things, carried Chinese products to Mexico and Europe via Manila or the local trade between Filipinos and Chinese at that time, to appreciate the importance of peaceful international interaction. One needs only to recall that, as recently as 10 years ago, the Chinese government approved loans to the Philippines for infrastructure, including one for a double-tracked railway to and from Malolos, Bulacan. It was not China’s fault that Philippine politics got in the way and the loan was never used. And we still do not have the railway. Relations between the two countries began getting sour only in August 2010 when a bus load of Hong Kong tourists was taken hostage by a deranged Manila policeman. The newly installed Philippine government bungled the incident, resulting in the death of eight of the tourists. From then on relations have steadily taken a turn for the worst. The good thing is that the current Philippine administration is only a parenthetical expression in the history of contemporary Philippine development. We can begin picking up the shattered pieces of our relations with China when the second comma is jotted down. Then we can count on diplomacy, which has been described as the art of the possible, to solve the riddle of the irresistible force and the immovable object.

There is life after death Susie G. Bugante

All About Social Security

HE Social Security System (SSS) was set up basically as a pension fund for private sector workers, who are no longer able to work due to old age and disability. It also takes care of its members’ short-term needs in the form of sickness and maternity benefits. But its mandate goes beyond taking care of its members. It also provides for the spouses and minor or dependent children in the event of the members’ death. The payment of death benefits is simple under a normal family setup: The SSS member (either father or mother) dies and the legal spouse with minor kids receive the monthly pension. But the colorful, complicated and a la-teleserye lives of some SSS members challenge the judgment of the claims processors of SSS. One case is Remy’s death-benefit claim. Her husband abandoned her for another woman about eight years

ago. He died at age 55 with three minor children by his commonlaw-wife Gina. Both Remy and Gina filed for death benefits in separate SSS branches. Another case is Mario who replaced his legal spouse as SSS beneficiary with his other woman five years after he left his family. Both his legal spouse and common-law wife applied for death benefits with the SSS, when he suddenly died in an accident. With a centralized

processing system, SSS personnel could see the status of claims applications filed anywhere in the country such as the cases cited above. Cases like these undergo careful evaluation to ensure that only the rightful beneficiaries are granted benefits. However complicated the death claim benefit is, SSS is guided by these questions: Is the claimant the correct beneficiary? Is the claim in accordance with the Social Security Law? Under the law, a member’s primary beneficiaries are his or her: Dependent, legal spouse who has not remarried or cohabited and has no children with other partners. Dependent legitimate, legitimated or legally adopted and illegitimate children below 21 years old, unmarried, unemployed or incapacitated if older than 21. As such, Remy is entitled to the death benefits of her husband since she has not remarried or cohabited with a new partner. The three minor children will also have a share in the death benefits equivalent to 10

percent of Remy’s monthly pension or P250, whichever is higher. In the case of Mario, his legal spouse is entitled to death benefits because, like Remy, she has not remarried or lived-in with a new partner. Unless there is a Court Order declaring the marriage null and void, the legal spouse is the primary beneficiary of an SSS member. With the death benefits, SSS puts meaning to the term “life after death.” After all, this death benefit in the form of monthly pension if the deceased member had at least 36 monthly contributions or lump sum amount if not, is given to the beneficiaries to enable them to go on with their lives despite their loss. For more information about the SSS and its programs, call our 24-hour call center at (632) 920-6446 to 55, Monday to Friday, or send an e-mail to member_relations@sss.gov.ph. Susie G. Bugante is the vice president for public affairs and special events of the Social Security System. Send comments about this column to susiebugante.bmirror@gmail.com.

Three reasons Japan will get more stimulus William Pesek

BLOOMBERG VIEW

WO years after Haruhiko Kuroda, governor of the Bank of Japan, declared his team will “do whatever it can” to end deflation, it’s painfully clear their efforts aren’t working.

Stocks are up, bond yields are down and people are buzzing about Japan for the first time in years. What’s still missing, though, is any hint of the self-sustaining recovery Kuroda hoped to be touting by now. With annualized growth of 1.5 percent between October and December after two straight quarters of contraction, Japan is hobbling out of recession far more slowly than hoped. A third dose of quantitative easing is almost certain. Here are three reasons. First, the initial rounds of QE weren’t potent enough. “In order to escape from deflationary equilibrium, tremendous velocity is needed, just like when a spacecraft moves away from Earth’s strong gravitation,” Kuroda recently explained. “It requires greater power than that of a satellite that moves in a stable orbit.” Although the Bank of Japan managed to lower the value of the yen by more than 20 percent beginning in April 2013, that clearly hasn’t provided enough of a boost

to the economy. (Net exports, for example, added just 0.2 percent to fourth quarter gross domestic product.) Meanwhile, the bank’s 2 percent inflation target looks more and more distant. The BOJ’s main inflation gauge slowed to just 0.2 percent in January, down from 1.5 percent in April last year. The trouble with the first two rounds of QE was both the size and the strategy. While undoubtedly huge, neither injection was aggressive enough to, at Kuroda puts it, “drastically convert the deflationary mindset.” Also, the BOJ must get more creative than just hoarding government debt. This time, the BOJ should pledge bond purchases of closer to $1 trillion a year and buy bigger blocks of assetbacked, mortgage-backed and corporate securities; load up on distressed assets, including property in rural areas; and prod the government to tax excessive bond holdings by banks and households. Second, the Federal Reserve is complicating Kuroda’s job. With US

unemployment falling to 5.5 percent in February, the lowest level in almost seven years, US interest rates will soon be heading higher. On Friday, Fed Bank of Richmond President Jeffrey Lacker employed his own cosmic imagery when he declared: “June would strike me as the leading candidate for liftoff.” Monetary largess isn’t exactly a zero-sum game, but the Fed’s QE experiment supported asset markets from London to Tokyo as much as it’s enlivened US demand. As the Fed withdraws, Kuroda will face pressure to make up the difference. There’s an argument to be made that, as the Fed tightens, the dollar will rise versus the yen, providing its own measure of stimulus to Japan. “They don’t care about global liquidity,” economist Richard Jerram of Bank of Singapore says about Japan. “They care about the exchange rate.” But improved exchange rates may not cut it for Japan; the weak yen hasn’t been fattening Japanese paychecks as BOJ once hoped. Take Toyota, which is arguably benefiting most from the BOJ’s policies. Last month its workers asked for a piddling $50 monthly wage hike from a corporate giant projecting a record $18-billion profit for the year. Toyota is balking at sharing just four days of profits with the salarymen and women, whose sweat helps fill its showrooms and coffers. More QE, structured wisely, might both increase demand for credit and give corporate chieftains greater confidence in Tokyo’s

determination to end the country’s two-decade-long funk. The third reason to expect another round of QE from Japan is that monetary policy is the only active game in Tokyo. Prime Minister Shinzo Abe’s revival program was supposed to include three elements: monetary stimulus, fiscal expansion and deregulation. But the third stage—including pro-growth steps, like lowering trade barriers, loosening labor markets and encouraging entrepreneurship—never materialized. And, in the year ahead, Abe’s focus will almost certainly be on geopolitical concerns, not retooling the economy. Despite winning a fresh electoral mandate in December to implement phase three of his economic plan, he has devoted most of his efforts since then to security policy—specifically, to reinterpreting the postwar pacifist constitution to allow Japan to defend itself and allies abroad. This push gained renewed urgency after the beheadings of two Japanese in Syria in January. The trouble is, all of the structural economic reforms Abe has promised would boost wages, encourage a start-up boom and raise competitiveness have been put on the back burner. As long as Abe is distracted, Kuroda and his BOJ staff are the only ones who can do what’s necessary to convince markets that Japan is still intent on making a comeback. That’s why all signs point to QE3 in the weeks or months ahead.

Opinion BusinessMirror

opinion@businessmirror.com.ph

How MH370 changed Malaysia

Lloyd’s of London Dennis B. Funa

Adam Minter

BLOOMBERG VIEW

NE year later, the disappearance of Malaysia Airlines Flight 370 is still Malaysia’s biggest story, dominating front pages when even the smallest new details emerge. That’s with good reason. The missing flight, and the Malaysian government’s controversial early responses to it, have had a staggering impact on the country. Politically, diplomatically and economically, Malaysia is vastly different than it was a year ago.

Transparency at the top For more than 50 years, Malaysia has been ruled by the same governing coalition, one with a reputation for lacking transparency and scorning media scrutiny. Its inexperience dealing with the press became apparent in the hours and then days following MH370’s disappearance. Senior Malaysian officials held meetings with international journalists during which they were evasive, contradictory, and even condescending. At a March 10 presser, for example, Datuk Seri Hishammuddin Hussein, the defense minister, petulantly answered one question by snapping: “You are talking to a defense minister and acting transport minister. I wouldn’t know.” For those covering Malaysia for the first time, such evasions made it seem that Malaysia might be hiding something it knew about the disappearance. The scathing criticism that followed in the international press was an embarrassment for most Malaysians. The blowback was immediate, especially on Facebook and other social media, where Malaysians expressed astonishment and anger at their government’s seeming incompetence. The Malaysian government surely recognized this as a potential threat: 10 months earlier, the young, middle-class urban Malaysians who dominate social media were the voters responsible for handing Malaysia’s ruling coalition an unexpected loss in the popular vote of the May 2013 general election. (The coalition held onto power because of the way that parliamentary seats are apportioned.) The government heeded the online anger, and quickly became more forthcoming about what exactly it did and did not know about MH370—including unflattering revelations about Malaysia’s slow initial response to the disaster. This marked an almost unprecedented degree of transparency and public accountability for the Malaysian government. And that was only a prelude to the government’s quick and coherent response to the downing of MH17 over Ukraine several months later. More important, Malaysia’s independent media and political opposition were energized by the government’s sudden responsiveness. MH370 was proof that enough pressure (combined with international shaming) could bring at least some transparency to Malaysian politics and governance. In the year since the disappearance, independent media and Malaysia’s opposition have been much more aggressive in their questioning of the government. And they’ve produced real results, including a long-sought audit of a Malaysian government development fund plagued by allegations of financial mismanagement.

Pivot to the US

OF the 227 passengers on MH370, 153 were Chinese. In the days and weeks after the disappearance, China’s official media criticized the Malaysian government’s efforts and attitude. At the same time, it permitted families of Chinese victims to publicly berate the Malaysian ambassador and—in otherwise protestfree Beijing—allowed them to hold a rowdy demonstration outside of the Malaysian embassy in Beijing. In Malaysia popular sympathy

for the Chinese quickly gave way to online revulsion and a public rebuke from the Malaysian defense minister, who said that flawed Chinese satellite data had “distracted” Malaysia from the search for the plane. Such open hostility marks a significant shift in Malaysia. According to a July 2014 Pew Research Center study of global opinion toward the US and China (taken during the first month of the MH370 controversy), Malaysia was one of two Asian countries where the population viewed China as its chief ally—and one of three that recognized the US as its chief threat. Bilateral relations with China were so close in 2013 that a Malaysian official announced that Malaysia was willing to collaborate with China on developing natural resources in the South China Sea—a blatant break with other countries in the region. That spirit of cooperation is now gone. Not long after the disappearance, a former Malaysian ambassador to Beijing told The Malaysian Insider that he believed that China’s reaction revealed a “bullying tendency,” and added: “China has bullied the Philippines and Vietnam. So Malaysia has to be careful.” He also said that Malaysia should review ties between the two countries. Over the last year, the Malaysian government has also made an effort to build closer ties with the United States. It even invited US spy planes to use bases on Malaysian territory—an invitation that likely infuriated China. Though MH370’s disappearance isn’t solely responsible for this important diplomatic hedge, it certainly played a key role in widening a gap that barely existed on March 7, 2014.

INSURANCE FORUM

LOYD’S of London is an insurance market governed by various Acts of Parliament of the United Kingdom. Foremost of these acts are the Lloyd’s Act of 1871 and the Lloyd’s Act of 1982. It is not an insurance company, as in fact, it is not a company at all. As a market, underwriting is done by syndicates which are actually a pool of financiers composed of corporations and individuals. The individual members are known as “Names.” While the insurance business offered by Lloyd’s is very diverse, it is well-known for its reinsurance business. It is also well-known for taking up unusual risks, such as providing insurance cover for Celine Dion’s and Bruce Springsteen’s vocal cords and Tina Turner’s legs.

In 2011 its gross premiums totaled £23.44 billion. And in 2012 it rose to £25.50. As of December 31, 2013, £1 is equivalent to $1.66. By Philippine legal standards, its existence is peculiar for no such notion of an “insurance market” exists in Philippine legal contemplation. By general recognition, its existence is “unusual,” different and unique. The underwriting is done, not by Lloyd’s itself, but by its syndicates. Supervising these syndicates is the Council of Lloyd’s (“Council”). The Council, on the other hand, is regulated by the Prudential Regulation Authority, a subsidiary of the Bank of England created under the 2012 Financial Services Act. It is also supervised by Financial Conduct Authority, a non-governmental financial regulatory body. A body called the Corporation of Lloyd’s supports the market and the operation of the syndicates. The financial capacity of the syndicates is provided by individuals called Names, who are obviously very wealthy, comprising 12 percent of the financial capacity of Lloyd’s (9 percent with limited liability and 3 percent with unlimited liability); by corporations (both the UK and others) with limited liability, comprising

32 percent of the financial capacity; and the others by the international insurance industry, of which 21 percent are from the United States, 15 percent are Bermuda-registered, and 20 percent from the rest of the world. Supporting the syndicates are the agents and the brokers. Transactions are never carried out directly with the syndicates. These must be coursed through the brokers as the only intermediaries. Thus, Lloyd’s is known as a broker market. As of 2013, there are 181 Lloyd’s brokers and 56 managing agents. There are 91 syndicates (there used to be 410 syndicates) composed of 773 individual Names with unlimited liability and 1,238 corporate members. Each syndicate may choose the kind of risk it wants to underwrite. Most syndicates specialize in one or two types of risks. Syndicates are managed by a managing agent who may manage one or more syndicates. A managing agent hires the underwriter and his team. A notable manner by which it does business is the face to face transaction between the brokers (on behalf of the insured) and the underwriters in their mammoth Underwriting Room in particular areas called “underwriting boxes.” A syndicate’s

Wednesday, March 11, 2015

As of 2013, there are 181 Lloyd’s brokers and 56 managing agents. There are 91 syndicates (there used to be 410 syndicates) composed of 773 individual Names with unlimited liability and 1,238 corporate members. Each syndicate may choose the kind of risk it wants to underwrite. Most syndicates specialize in one or two types of risks. Syndicates are managed by a managing agent who may manage one or more syndicates. A managing agent hires the underwriter and his team. underwriter decides which insurance policies the syndicate will underwrite. A broker approaches an underwriter with policies already written and priced and the underwriter will decide whether to accept the risk at a given premium or to reject it. “Trading” is carried out in floors of the Lloyd’s building along Lime Street with the first floor reserved for marine insurance. It is said that 15,000 people pass through these floors during peak days. One function of the underwriter is the setting of reserves. The reinsurance for estimated future liability function is the creation of a reserve or a fund wherein every year, a reserve required for the estimate of future liabilities is recalculated. Actuarial services are needed for this function. Lloyd’s does business in over 200 countries. Forty-three percent of its transactions come from the US and Canada, 18 percent from the UK, 15 percent from the rest of Europe, 12 percent from Central Asia and Asia Pacific, 8 percent from the other Americas, and 4 percent from the rest of the world. The financial strength of Lloyd’s has been rated as A+ (Strong) by Standard & Poor’s, A+ (Strong) by Fitch Ratings, and A (Excellent) by AM Best. The reinsurance business of Lloyd’s covers both short- and longtail, both facultative and treaty,

generally on an excess of loss basis. The bulk of its reinsurance covers property insurance including catastrophe risks. The Lloyd’s of London was founded in 1688 quiet notably in a coffeeshop owned by Edward Lloyd. Rich merchants gathered in coffeeshops for coffee was an expensive commodity at that time. Back then, marine insurance was its exclusive concern. Specifically, it insured slaves, slave ships, and other maritime-related risks. Its leadership in marine insurance (ships and cargo) continues to this day. It was only in 1885 when Lloyd’s created its first nonmarine syndicate. In 1774 Lloyd’s transferred to the Royal Exchange in Cornhill to be known as the Society of Lloyd’s, under the influence of John Julius Augestein. While it continued long after Edward Lloyd’s death in 1713, it was only in 1871 when Parliament gave legal recognition to Lloyd’s. The Lloyd’s Act of 1911 defined its objectives. Lloyd’s established its reputation for reliability during the San Francisco earthquake of 1906. Lloyd’s Chairman Cuthbert Heath ordered all claims to be expeditiously paid, and they were. While Lloyd’s has been embroiled in controversies in the past including accusations of fraud, it has manifested that all these are now in the past. There have been reforms since then to satisfy regulator’s concerns in various jurisdictions. As A. M. Best stated in 2010: “Lloyd’s occupies an excellent position in the global general insurance and reinsurance markets as a specialist writer of property and casualty risks. Its competitive strength derives from its reputation for innovation and flexibility, which is supported by the pool of underwriting expertise in London.” Atty. Dennis B. Funa is the Insurance Commission’s deputy commissioner for legal services. Send comments to dennisfuna@yahoo.com.

Privatizing the public economy

Founded in 1972, state-owned Malaysia Airlines has long been one of Malaysia’s most prominent GLCs—or government-linked companies—that make up an astonishing 54 percent of the entities on the Kuala Lumpur Composite Index, and dominate key industries across the country. They are government controlled and owned, and widely viewed as patronage programs that bleed public cash. However, even before MH370 disappeared, Malaysia Airlines was in dire financial condition, having lost money for three years straight (while most other airlines worldwide were booming). Prior efforts at making the airline more efficient were vetoed by, among others, Malaysia’s powerful unions. But the precipitous drop in ticket revenue that followed the disappearance of MH370 (and then, MH17) brought the company to the edge of bankruptcy and dissolution. Rather than allow what would be viewed as a national humiliation, Khazanah Nasional, the sovereign wealth fund that controls the airline, took it private, and hired a foreign CEO—the first in its history—who is cutting 6,000 jobs, in addition to many of the airline’s international routes outside of Asia. It’s a pragmatic step for a company that remains one of Malaysia’s signature brands, and it raises modest hopes that a stubborn Malaysian government will be willing to treat other GLCs similarly—especially as its oil-dependent economy falters. That the discussion is even possible, however, is solely the result of MH370.

Hillary Clinton should turn over e-mail server to govt

I L L A RY C linton ’s u nseemly decision to forgo using an official government e-mail account while she was secretary of state may not have violated federal rules on records preservation, but it was a mistake. A very likely 2016 presidential candidate, Clinton exclusively used a private account hosted by a private computer server to shield her correspondence, both official and personal. As secretary, she wasn’t required to use the government

account, and it was not out of the ordinary for Cabinet members and other elected officials to sometimes use private accounts. Why Clinton took the risky step of doing so, especially while in a position that involved access to sensitive and classified information, is unknown. Not using the .gov e-mail was a troubling lack of judgment that she needs to address. Last October the State Department asked former secretaries of state to provide their private e-mail exchanges

about official business to comply with new rules that they be preserved in the National Archives. Clinton turned over 55,000 e-mails from an unknown total that had been scrutinized by her aides. Then a few minutes before midnight on Wednesday, as the controversy bubbled and the Benghazi brigade of Republicans in Congress fired off new subpoenas, Clinton tweeted that she wants the State Department to make those 55,000 e-mails public. That’s a process that could

take months. It’s a start to repair the damage, but it’s not going to be enough. We don’t know what criteria her aides used to determine what to hand over. Clinton should make the private servers containing all the correspondence, even deleted e-mails, available to the State Department for an independent review. This way we’ll know that every e-mail relevant to the historical record, even if embarrassing, will be preserved. TNS

2nd Front Page BusinessMirror

A8 Wednesday, March 11, 2015

PHL given options on sea dispute with China

By Recto Mercene

hina has offered a solution to the South China Sea (West Philippine Sea) dispute, while warning some claimants not to rely on the US or Japan to come to their support, because “they are unlikely to sacrifice their own interests to aid Asean countries.” At the same time, China said Manila’s strategic partnership with Hanoi to put up a common front against Beijing in the South China Sea row will not work also. “Vietnam and China’s common interests in ideology are no less significant than their disputed territorial interests,” according to an article written by Li Kaisheng. Both pieces were carried by the China Daily, the communist party’s mouthpiece, and Global Times, a Chinese tabloid under the auspices of the People’s Daily newspaper. Li said the best option for the Philippines “is a one-on-one interactive system between China and each other claimant,” the first of four options that he had proposed. The piece appeared at a time when the Philippines had recently filed a complaint against China for its ongoing reclamations in the South China Sea. China maintains that it has sovereignty over most of the shoals, reefs and islands in the contested area, which it defined by a tongue-shaped nine-dash line. Three other countries lay claim, in whole or in parts, to the area: Taiwan, Brunei Darussalam and Malaysia. Manila and Hanoi criticized China for unilaterally changing the status quo in the South China Sea by expanding construction on some disputed islands. Li said the first option proposed by China—a one-on-one or bilateral discussion with China—“is the last choice Manila and Hanoi want.” He said the Philippines and Vietnam have been engaged in a joint effort to establish a strategic partnership, and added that a blueprint has been produced in less than a year. “The potential influence of the partnership merits close attention,” he said. See “China,” A2

Constraints dwarfing manufacturing growth

By Cai U. Ordinario

conomic Planning Secretary Arsenio M. Balisacan said infrastructure constraints continue to affect the efficiency of the country’s manufacturing sector. “Const ra ints rem a in on air port, cargo, road network and mass transport. Despite the positive effects of implemented decongestion efforts on por ts, more needs to b e d o ne t o a c c o m mo date stronger demand,” said Balisacan, also the National Economic and Development Authority (Neda) director general. Balisacan added that the government must also address the power situation to meet higher demand from the manufacturing sector, particularly those involved in textiles, plastics, nonmetallic mineral products and some electronic products. “Short-run measures are

BALISACAN: “Constraints remain on airport, cargo, road network and mass transport. Despite the positive effects of implemented decongestion efforts on ports, more needs to be done to accommodate stronger demand.”

now being carefully weighed in the Legislative branch. The completion of committed power projects will ease concern in the medium term. Long-run energysecurity measures should, as well, be in place, such as encouraging more investments in a mix of energy sources, among others,” Balisacan said. The country’s manufactur-

ing-output growth slowed to 3.3 percent in January 2015, according to the Monthly Integrated Survey of Selected Industries (Missi) released by the Philippine Statistics Authority on Tuesday. Registering its slowest growth since April 2014, the Volume of Production Index (VoPI) grew by 3.3 percent yearon-year in January 2015, from 4.4 percent in the same month in 2014. Also, the steepest decline since May 2013 was recorded by the VoPI that decreased by 1.8 percent in January 2015, from 3.3 percent in the same month last year. “The overall production indices of the manufacturing sector is dragged down by lower food production due to postholiday tempering of consumer demand and due to firms keeping their production at manageable levels during the start of the year,” Balisacan said. “The sudden drop in food manufactures dragged the positive output of the majority of the manufacturing subsectors, including printing, leather products, basic metals, beverages and textiles, which were listed as the

highest performers in January 2015,” he added. Meanwhile, the average capacity utilization in January 2015 was at 83.2 percent, slightly higher than the 83.1 percent posted in January 2014. The average capacity utilization rate in January was the slowest since March 2014, when average capacity utilization was at 83.1 percent. “The average capacity utilization in the manufacturing sector decreased to 83.2 percent in January, due to typical downturn in production at the beginning of the year, but is expected to rise with private construction activities this year,” Neda said. “Among surveyed manufacturing firms, 23.1 percent of the establishments operated at f u l l capacit y [90 percent to 100 percent]. About 59.7 percent operated at 70-percent to 89-percent capacity, while 17.2 percent of establishments operated below 70-percent capacity,” Neda added. The Missi provides timely flash indicators that monitor the performance of growthoriented industries in the manufacturing sector.

Exporters off to a poor start this year. . . Data showed that the country’s export earnings totaled $4.357 billion in January 2015, a slowdown from $4.379 billion in January of 2014. The PSA said this was due to decreases in five major commodities: other manufactures, woodcrafts and furniture,

chemicals, metal components and coconut oil. The country’s top export in January were electronic products, which accounted for 46.8 percent of total export earnings for the period. The value of electronicproduct shipments reached $2.04

billion in January, a 14.6-percent growth, from $1.780 billion in January 2014. By major groups of electronic products, components/devices (semiconductors), comprised 32.2 percent of total exports and shared the biggest with export earnings

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DOTC keen on defending Clark airport master plan By Lorenz S. Marasigan

ASSENGERS up north should expect a bigger airport in three years’ time, as the government moves to jump-start the initial phase of the P7.2-billion low-cost carrier terminal in Clark, Pampanga. Transportation Secretary Joseph Emilio A. Abaya said his office is eager to start implementing the three-phase master plan this year, after the government had earmarked P1.2 billion this year to start the project’s Phase 1. Currently, the proposal to construct the terminal that will house budget carriers is on the hands of the National Economic and Development Authority (Neda). The transportation department, he added, is hopeful that the project will be approved by the Neda Board, which is chaired by President Aquino, in May. “There is not much of an issue, except that plans drawn up by the French firm Aeroport de Paris are quite aggressive and on a larger side. But we are sticking to their plans, and we will defend the [master] plan before the Neda Board,” Abaya said. He was referring to the airport master plan crafted by the French airport operator, which wants to aggressively expand the airport to mitigate long-term issues on demand that the larger Ninoy Aquino International Airport now faces. “Hopefully, other Cabinet secretaries would see that thinking big and thinking long term is our way to go,” the transport chief added. “However, we are prepared and ready to defend the plan. If they tell us to scale down the plans, we are See “DOTC,” A2

Continued from A1

worth $1.404 billion, a 16-percent growth from $1.211 billion recorded in January 2014. “Based on general market consensus, commodity prices will also likely remain low for the entire 2015. On that note, revenue from major agro-based commodities,

such as coconut oil and copra, may moderate given the stabilization of global supply. However, increasing demand for gadgets and smart technologies will continue to benefit the electronics sector,” Balisacan said. Balisacan said in January that export earnings from petroleum products remain affected by the continued decline in global crudeoil prices. He said the gains in mineral and total agro-based products were not enough to compensate for the lower overseas sales of manufactures and petroleum products. With these, Balisacan urges the government to fast-track the programs directed to support the industrial and manufacturing development of the country. “We note that the slack performance for the period remains in line with the anticipated low demand due to seasonal factors,” Balisacan said. “The full implementation of the Industry Development Program of the Department of Trade and Industry, which aims to enhance the competitiveness of key industries, should be supported. To complement this, gaps in infrastructure, including in energy and logistics, should also be addressed in order to enhance the competitiveness of Philippine exports,” he added. The Philippines’s top export markets were Japan, including Okinawa, which accounted for 20.3-percent share to total exports for January 2015, followed by the US, including Alaska and Hawaii, with a 15.9-percent share; and People’s Republic of China, with 10.2 percent. Exports to Japan amounted to $882.61 million in January 2015. It decreased by 23.2 percent, from $1.15 billion recorded value in the same month a year ago. Standard Chartered Singapore Branch analyst Jeff Ng said that last year’s export growth was robust, although momentum has eased in recent months. “We expect near-term export growth to be more modest, owing to sluggish global demand,” he said. With Genevi Factao