Businessmirror march 16, 2015

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A broader look at today’s business TfridayNovember 18, 2015 2014 Vol. 10 No. 158 40 Monday, March 16,

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Exporters at odds with BSP anew

terms of adornment D

eAr Lord, even in our spiritual, moral and affective life, we may have experienced destructive spiritual or moral “typhoons,” like Yolanda, ruby and Seniang.

They have surely left their mark and sad memories. We must not get resigned to live a life of moral misery, but should take the necessary steps to experience a spiritual renewal and rebirth. May we strive to be prayerful to regain spiritual strength. Amen!

WorD anD Life, fr. SaL Putzu, SDB anD Louie M. LacSon Word&Life Publications • teacherlouie1965@yahoo.com

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

Life

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Confessions of a lipstiCk addiCt

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BusinessMirror

he country’s export sector is again feeling the pinch of what it suspects as central bank’s hand in allowing the peso to appreciate steadily in the last five months.

Monday, March 16, 2015 D1

TERMS OF ADORNMENT

Michelle PaneManglor wears a Mimosa necklace in white gold and diamonds; calicantus earrings in white gold with yellow-and-white diamonds; anima ring in white gold and diamonds; and Mimosa bracelet SaMantha goMez wears a Spring time collection pendant, earrings, ring and bracelet in white gold and diamonds

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ne after the other, two jewelry brands—Damiani and Karat World—unveiled their exquisite collections. While Damiani (the “expression of the Italian style worldwide”) is for the affluent, Karat World (everyday jewelry for the working men and women of today) aims to be more accessible. Both, however, are founded on a strong design heritage and storied family traditions.

Do it LiKe DaMiani RememBeR that jaw-dropping necklace that Aro (michael Sheen), leader of the Volturi vampires, gave to Bella (Kristen Stewart) in Twilight Saga: The Breaking Dawn Part 2? That was especially created by Damiani Jewellery, and was included in the metropolitan Dream collection. The Italian brand also made the wedding rings of Brad Pitt and Jennifer Aniston (long divorced). Through the years, it has also collaborated with Isabella Rossellini, nastassja Kinski, milla Jovovich, Gwyneth Paltrow and Sharon Stone in their marketing campaigns.

Founded in 1924 by enrico Grassi Damiani, in Valenza, Italy, the company has since built a luxury empire that designs, manufactures, distributes and sells jewelry and watches. It has won 18 consecutive Diamonds International Awards, the “Oscars” of the jewelry industry.

Today the world-renowned label is led by Giorgio Grassi Damiani, the CeO of the group and part of the third generation of the Damiani family, who showcased stupendous pieces at sparkling rites at Rustan’s makati graced by his Philippine retail partners—the Tantocos of course—and the Italian Ambassador massimo Roscigno and his wife Agnes Roscigno.

On display at the Rustan’s Silver Vault are the fine-jewelry collections called Bocciolo (“diamonds and white-and-pink gold are used for these jewels crafted with care and passion to ‘blossom’ on every woman wearing them”); D.Lace (“reworks part of Damiani’s iconic hallmark D, entwining it with gold and precious stones”); Anima (“white-and-brown diamonds are matched with precious stones, including purple and blue sapphires, and semiprecious stones, such as amethyst, aquamarine and smoky quartz”); and mimosa (“the pearls and gems are set almost casually with a slight three-dimensional effect, recalling the flower that inspires the collection”).

“The history of Damiani jewelry is that of an Italian family with a deep-rooted tradition and a passion for the art of jewelry-making. The tradition expressed in all Damiani jewelry is a unique heritage, made of passion and attention to details that we are proud of and wish to pass on to our children. This is a philosophy we share and that gives rise to our creations, which continue to be handcrafted in Italy, one by one,” Giorgio Grassi Damiani said on the company web site.

gretchen Barretto brandishes the Square 01 ring.

Barretto flaunts the swirl earrings.

a WorLD of KaratS IF Damiani has as its muse the neopolitan goddess Sophia Loren, Karat World has local cinema’s screen siren Gretchen Barretto. The gorgeous and controversial actress has just won Best Supporting Actress plums from Gawad Tanglaw and Star Awards for movies for 2014’s The Trial, adding “awardwinning” to her intriguing showbiz résumé. One of the most beautiful faces in the industry, Gretchen is also known as a style icon.

Her sophisticated taste in jewelry, however, she has carefully cultivated through the years.

“Mukha lang akong sosyal. I can fake it,” she declared with a vivacious laugh during the launch of Karat World’s everyday Gretchen collection, which she meticulously “curated.”

Karat World, which sources classic and contemporary jewelry from Italy, Hong Kong and France, was founded by Dr. Sandra SarabiaGorriceta and her husband in Iloilo City. Their son, Felix III, is the current COO. The brand’s everyday Gretchen, a collection of classicdiamond jewelry, addresses the “unanswered demand for modest and elegant pieces, as it promises easy luxury with stylish designs that won’t break the bank.”

“When I was young, I was always fascinated by jewelry. not that I thought I could afford it because we knew that pag-sinabi mong jewelry, it’s expensive,” Gretchen related, adding that during her struggling days, she coveted a Rolex watch. “’Yun talaga. That [Rolex] was my dream. every time may nakikitaan akong ganun, my eyes would forever be dun na naka-focus and I said, ‘I wanna get that one day.’”

She finally bought the watch from “jeweler to celebrities” Vicky elises, but was only able to fully pay for it after a year. earrings, though, are the ones she fancies wearing the most. “Ang unang-una mong titingnan is always the face. You see people, they glance at the ears. And then next na ’yung bracelet and ’yung watch,” Gretchen said.

“To be honest, I couldn’t really afford very, very expensive jewelry,” she shared. “Whatever expensive jewelry I have were given to me. Lucky me!”

Gretchen may be regarded nowadays as high wattage and high profile, intimidating to most, even her most ardent fans. Karat World’s everyday Gretchen shouldn’t come off as snooty or snobbish, but as an affordable indulgence. Its heart ring, 14 kt in yellow and white gold, starts at a price of P16,560; a pair of swirl earrings, 14 kt in white gold and yellow gold, sells for P38,080; a cross pendant, in 14-kt yellow, white and rose gold with 14-kt necklace retails for P7,055; and a pair of white gold 14-kt hoop earrings can be yours for P20,860.

Karat World is hoping that consumers will love its new offering as much as its muse does. “It’s fun, and it’s not scary to wear,” Gretchen said.

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what executives value in their ceos BusinessMirror

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WHy youR CusTomeR LoyaLTy PRoGRam Isn’T WoRkInG

By Michael Schrage

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GGRESSIvE moves by airlines to migrate frequent flyer metrics from miles flown to dollars spent have caused bargainhunting road warriors worldwide to whine about “disloyalty programs.” A PriceWaterhouseCoopers review suggests that 45percent of flyers would lose under the new schemes. Conversely, about 40 percent would benefit.

Flyers taking shorter, more expensive trips will reap more benefits than passengers purchasing longdistance discounts. Airlines have calculated that customers who spend more are more valuable to them than customers who fly more.

This latest frequent flyer reboot is an example of how the meaning, measure and management of “customer loyalty” are changing.

The nature of loyalty depends on the economics of the business: loyalty to automobiles and mobile phones is different from loyalty to hotels and airlines. So customer-centric organizations and innovative marketers are asking, “What kind of loyalty do we want our customers to have, and do we want to have for our customers?”

Organizations need to identify the loyal behaviors that deserve explicit recognition, reward and investment.

How should loyalty from the most valuable customers be recognized and rewarded differently from that of typical customers? The answer depends on how businesses and their customers define, perceive and value loyalty.

True loyalty creates and inspires more valuable customers. Loyalty is a mutual investment, not just an exchange. That’s why improving the loyalty of bargain hunters rarely delivers sustainable value. Confusing loyalty with retention, promotion and rewards undermines brand equity more than it creates new value opportunities.

The rise of social-media platforms, such as Yelp, Facebook, Twitter and TripAdvisor, guarantees that customers will get a global say on what loyalty should mean and who “loyal customers” really are. They’re rewriting the economic rules about customer value. Who is truly more valuable to an airline or hotel chain? A profitable repeat customer? Or a lessprofitable customer whose critiques on Yelp influence hundreds of prospects?

W hen loya lt y can be defined as innovative contributions and influential word-of-mouth as opposed to repeat high-margin business, traditional measures for loyalty become an anachronism. Loyalty shouldn’t be a data-driven gimmick for capturing customers and market share.

It can be both a means and an end for new value creation in healthy relationships between consumers and companies. But that only happens if companies commit to offering loyalty, as well as asking for it.

Michael Schrage, a research fellow at MIT Sloan School’s Center for Digital Business, is the author of Serious Play, Who Do You Want Your Customers to Become? and The Innovator’s Hypothesis.

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What executives value in their CEOs

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By Leslie Gaines-Ross

CEO’S reputation is a key part of a company’s success. But how about specifics? In a recent survey of more than 1,700 executives worldwide by Weber Shandwick and KRC Research, we sought out the perspectives of those closest to the CEO. We found that nearly one-half of a company’s corporate reputation and market value are attributable

to its CEO’s reputation. Half of the executives expect the CEO’s reputation to matter even more over the

Avoiding decision paralysis in the face of uncertainty

By Patti Johnson

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HE best leaders know how to keep moving forward in ambiguous situations.

Whether it’s a shifting industry or a public-relations crisis, they’re expected to make decisions even in extremely uncertain circumstances. Any leader facing high levels of ambiguity needs to get comfortable with the idea of not having all the answers and take steps to reduce the uncertainty.

Here are some suggestions:

1. Get comfortable with the unknown. It takes courage to

walk into a situation knowing you won’t be able to judge your decisions until you’ve succeeded or failed. Do you have a natural tendency to overanalyze or seek perfection? If so, set limits on yourself. Decide that you’ll gather as much information as you can in one week or restrict yourself to consulting no more than four people before acting.

Researchers who study how people in high-risk professions, such as firefighting, deal with uncertainty have formed the

theory of “organizing ambiguity.” Leaders who successfully navigate uncertain situations are able to properly contextualize their circumstances, which lets them take action while recognizing that adjustments may be needed if their assumptions prove wrong. When you face dilemmas calmly, using a balance of information and instinct, you make better decisions that fit the changing conditions.

In fact, uncertainty may help create a new future. Help your staff see that ambiguity can unlock potential. For example, you may explore options that you wouldn’t have considered just months earlier.

2. Reduce uncertainty where you can. There are rarely “right”

2.Visibility. A successful CEO can’t be a wallflower. A hefty 81percent of global executives believe that for a company to be highly regarded, the CEO needs a visible public profile.

Admired CEOs are four times more likely to be skilled at engaging the public than those with less ability.

CEOs are the purveyors of the company’s narrative, which must stand out from the flood of competing information.

3. Persuasiveness. Which of the many communications channels are most important? A large majority of executives cite speaking engagements, especially industry-specific ones. Also important are building relationships with the media, using

next few years. A large majority say that a positive CEO reputation also attracts new employees and helps retain them. The most-valued attributes include: 1. Humility. Only one out of four CEOs in our study was described by their colleagues as humble. Yet, we found that highly regarded CEOs are nearly six times as likely to be described as humble than less highly regarded CEOs. Humble CEOs motivate and empower those around them, share employees’ values and listen well.

They rely on their senior teams to validate strategy. They build cultures that are about the whole, not individual stars.

consider multiple perspectives when they’re in uncharted waters, by encouraging collaboration, input and new ideas. Rely less on hierarchy and more on relevant experience. Above all, avoid the “I have all the answers” trap. It’s important to know when your expertise helps and when it’s creating a blind spot.

Finally, an incremental approach can reduce uncertainty while avoiding the risks that come with a big, sweeping decision. Create a series of shortterm plans that can evolve as the situation becomes clearer. Keep your operational plan more fluid, adjusting it with new information. Regularly ask your team, “What have we learned that must change our plans in the next three months?” You can’t wait to have all the information or the perfect conditions to set your course.

Instead, take the initiative to actively manage uncertainty.

the company website strategically and identifying thought leadership platforms, including social media.

Along with public visibility and engagement, however, comes risk. A CEO’s reputation can cut two ways.

The smart CEO takes advantage of the positives but is wary of the negatives. By virtue of digital communications, we all have in some sense gone public. But some CEOs are more public than others. It’s time to embrace engagement—but humbly.

Leslie Gaines-Ross is chief reputation strategist at Weber Shandwick, and author of Corporate Reputation: 12 Steps to Safeguarding and Recovering Reputation.

The sharing economy’s new middlemen

By Sophie-Charlotte Moatti

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ODAY the sharing economy is becoming professionalized. For some, it’s no longer a secondary source of income but a primary job. In response to this shift, several shrewd entrepreneurs have set themselves up as middlemen. Who are these entrepreneurs, and what businesses are they building? Here are three categories: 1. The power-sharer: Optimize asset utilization. In large cities with lots of demand, power-sharers buy assets to rent to participants in the sharing economy. For a membership fee and a weekly fee, Breeze will lease you a car to use as a driver for Lyft, a shopper for Instacart or a cleaner for Homejoy (or all three). And unlike with a traditional lease, you can cancel your Breeze car with just two weeks’ notice. YardClub lets contractors rent out their tools and equipment to a screened set of renters, while providing insurance. Members can rent equipment by the hour, using it either for their own projects or to perform a job for a company like TaskRabbit.

2. The power-operator: Empower freelancers with tools. A large population of people in the sharing economy have no idea how to run a business nor the time or desire to learn. Say you decide that you’ll rent your apartment

on Airbnb or HomeAway and lack the tools you need to run your operation efficiently. A company like Pillow will clean after each guest or optimize price and occupancy rate in exchange for a commission on rent generated via Airbnb. For a small monthly fee per driver, ZenDrive screens would-be drivers and monitors their performance.

3. The power-organizer: Organize community and build trust.

Each individual sharer has to learn what works and what doesn’t. There is a need for communities in which people can exchange knowledge. For example, the Rideshare Guy provides advice to drivers on optimizing their income from the different car-sharing marketplaces. Peers.org offers a platform to organize, curate and moderate both its freelance population and its customers.

The sharing economy can be a huge source of social mobility and financial wealth. Before it becomes mainstream and large industry incumbents get involved, ambitious entrepreneurs can capture a share of this fast-growing market.

MONDAY MORNING answers in business. But making a decision—even if it’s deemed imperfect later—has the benefit of reducing uncertainty for the rest of your company or team.

Ask what’s different about the circumstances you’re in now, as well as which players have changed or introduced new elements. Effective leaders also

Patti Johnson is the CEO of PeopleResults, and author of Make Waves: Be the One to Start Change at Work and in Life.

Sophie-Charlotte Moatti has created Emmy-nominated mobile services used by billions of people. Currently, she is general manager of Products That Count.

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birthday Present C1

| Monday, MarCh 16, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

Sports BusinessMirror

FISHER

BOSTON Celtics guard Evan Turner (11) drives hard against the defense of Indiana Pacers. AP

CELTICS TAKE CONTROL EARLY, THEN HOLD OFF PACERS I

NDIANAPOLIS—Tyler Zeller scored 18 points, three other Celtics added 16 and Boston ended the Indiana Pacers’ seven-game winning streak with a 93-89 victory in the National Basketball Association (NBA) on Saturday night.

The Celtics have won four straight and moved into a tie for ninth place in the Eastern Conference, a half-game behind Charlotte for the final playoff spot. Indiana is seventh.

George Hill scored a season-high 30 points for Indiana. C.J. Miles had 13.

Boston took control with a 17-4 run that started late in the first quarter and ended midway through the second with a 32-20 lead.

The Pacers spent the rest of the night playing catch-up. After Indiana trailed 45-37 at halftime, Hill scored six straight points to cap an 11-4 run that got the Pacers within one.

Boston responded by pushing the lead back to 54-48, closing the third

quarter on an 8-4 spurt to make it 67-60 and taking a 77-66 lead early in the fourth on Marcus Smart’s 3.

The Pacers finally closed to 91-89 on Rodney Stuckey’s three-pointer with 5.8 seconds left, but Brandon Bass made two free throws to seal it.

Courtney Lee scored 17 points, Jeff Green and Zach Randolph added 15 apiece, and the Memphis Grizzlies beat the Milwaukee Bucks 96-83.

Beno Udrih, starting in place of the injured Mike Conley, had 14 points as Memphis ended a two-game losing streak. Marc Gasol finished with 12 points, seven rebounds and seven assists.

Giannis Antetokounmpo led the Bucks with 19 points, shooting seven of 10. Khris Middleton finished with 17, while Zaza Pachulia scored 14.

Ersan Ilyasova added 12 for Milwaukee, which lost its second straight and ninth in the last 12.

Memphis went eight-of-14 from three-point range, with Vince Carter and Lee each making two.

Thaddeus Young scored 21 points and the Brooklyn Nets broke its fivegame losing streak with a 94-87 victory over the Philadelphia 76ers.

Joe Johnson added 15 points and Jarrett Jack contributed 12 for the Nets, who moved within three games of eighth place in the Eastern Conference.

Nerlens Noel scored 17 points for Philadelphia. Isaiah Canaan added 13 and Hollis Thompson had 12.

In other games on Saturday, the Washington Wizards down the Sacramento Kings 113-97 and the Detroit Pistons beat the Utah Jazz 88-85. AP

BirthDAY PrESENt CuRRY TuRNS 27 AS WARRIORS ROuT KNICKS

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By Jeff Faraudo

San Jose Mercury News

AKLAND, California—Golden State Warriors Coach Steve Kerr got angry e-mails from three fans, including one in South Dakota, unhappy that he sat Stephen Curry, Klay Thompson and three other players on Friday night at Denver.

“I can’t argue with them,” Kerr said before Golden State’s 125-94 rout of the New York Knicks on Saturday night at Oracle Arena. “You spend a lot of money on tickets and you want to see somebody, that’s really disappointing.

“But not enough to sway me to send Steph and Klay out there when they desperately needed a day off.”

In a mismatch of teams with the National Basketball Association’s (NBA) best and worst records, Curry and Thompson delivered the kind of refreshed performances Kerr hoped to see as the Warriors opened a sixgame homestand.

Curry had 25 points and 11 assists on his 27th birthday and Thompson scored 27 as Golden State improved to 52-13, including 29-2 at home. Neither played after the Warriors built their lead to 111-73 after three quarters.

The Knicks, coming off a road win over the Los Angeles Lakers two days earlier, skidded to 13-52 in front of Spike Lee, their No. 1 fan.

“Sometimes the rest is just as much emotional as it is physical,” Kerr said.

“It’s not just the wear and tear on the legs, it’s the getting pumped up for game after game after game. Especially for a guy like Steph, who is expected to put on a show for the fans who come to see him.”

Curry did that—once again drawing “MVP” chants—as he and Thompson each made six-of-10 from the three-point line. The Warriors finished with 19 threepointers—equaling their season-high and just two off the franchise record.

Golden State totaled 85 points in the second and third quarters, converting 69 percent of its shots over that span.

The second unit actually helped Golden State take control, sparking a season-high 47-point second quarter that created a 73-52 halftime lead.

Golden State shot 78.3 percent in the quarter, hitting 18-of-23 shots, including eight-of-nine from three-point range.

The Warriors appeared only slightly interested early and the Knicks—with three starting players who are on 10-day contracts—actually led 27-26 at the end of the first quarter.

That didn’t last long.

Andre Iguodala, Justin Holiday and the second team ran off 12 straight points early in the second period to take a 40-33 lead. The intensity level and execution was so good Kerr let the five reserves remain in the game for more than six minutes.

Curry returned with 3:49 left in the half and scored 10 more points before the break, including back-to-back three-pointers off assists from Shaun Livingston that pushed the margin to 68-48.

Then, after a lay-up by New York’s Alexey Shved with 2.8 seconds left in the half, Andrew Bogut got the ball to Curry, who beat the buzzer with a 28-footer for a 21-point lead.

The onslaught continued in the third quarter, and when Thompson hit a three-pointer with 3:33 left, Golden State led 103-67 and had made 15 of 17 shots from beyond the arc since the start of the second quarter.

The Warriors assigned forward James Michael McAdoo to the Santa Cruz Warriors of the NBA Development League one day after he scored a career-high 16 points in the loss at Denver. Golden State recalled center Ognjen Kuzmic from Santa Cruz, where he averages 12 points and 11.5 rebounds. Kuzmic will have his shoulder injury evaluated by team doctors.

Kerr said McAdoo could “absolutely” see action in the playoffs. “One of the reasons we have him in Santa Cruz is so he can play every night,” Kerr said. “He’s gotten dramatically better since training camp. We saw what he could do last night.”

The Warriors entered the game 0-3 on Curry’s birthday, having lost to Cleveland last season, Boston in 2012 and Sacramento in 2011. Curry only played in two of those, averaging 24 points.

The Warriors improved to an NBA-best 12-3 in the second game of back-to-backs.

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PhilexPort says central banK Policies allowing Peso to aPPreciate bane for the sector

INSIDE

A life of moral misery

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As Kerr eyes playoffs, Fisher thinks about the next NBA season

By Al Iannazzone Newsday

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AKLAND, California—Derek Fisher says he hasn’t thought about what he would be doing if Steve Kerr had accepted Phil Jackson’s offer to coach the Knicks. Fisher doesn’t believe there’s any reason to look back.

Kerr’s decision looks like a stroke of genius. He took over a team that won 51 games last season and now owns the National Basketball Association’s (NBA) best record. There’s no reason for him to look back.

The two first-time coaches with five championship rings each as players met on Saturday night at Oracle Arena with their focus on the present. But Fisher, whose team has the NBA’s worst record, says it’s hard to not look ahead.

“I think it’s difficult to do that no matter what the circumstances are,” Fisher said. “It’s challenging to just remain present and aware of where you are at the moment. So that’s just a challenge that we try to talk to our guys about every single day, and even as we do go forward and grow, that all goes with the challenge.

“Even after we find success, it’ll be a challenge to stay in the moment of even where we are then compared to where we’ve been and where we’re going. But the best are able to do so.

That’s what we’re trying to become.”

Everything concerning the Knicks (13-51) is about the future.

Jackson spoke about it at length on Thursday in Los Angeles.

He said the events of the season forced him to fast-forward and start preparing for next season and beyond.

Jackson said the Knicks will build through free agency and doesn’t believe their record or how the triangle offense has been viewed or criticized will affect whether a player wants to sign. Fisher agrees.

“I don’t know if a player is going to decide whether the system is the factor that’s going to make the biggest difference whether he signs with the team,” he said.... “We’re selling who we are, and right now that’s a part of who we are. I don’t think that a guy that knows how to play basketball would be afraid of having an opportunity to come and play basketball here.”

The Warriors (51-13) have been built differently than what Jackson intends to do with the Knicks. Their core players— Stephen Curry, Klay Thompson, Harrison Barnes and Draymond Green—were drafted by the Warriors. They added key pieces in veterans Andrew Bogut, Andre Iguodala and David Lee. But Golden State showed patience with Curry and endured some lean years.

The Knicks have only one pick in the next GOLDEN State Warriors two drafts, so they guard Stephen have to be smart with Curry celebrates his it and find the right 27th birthday with players on the market a double-double to fill their needs. performance against “Resources for us the New York Knicks. AP have never been an issue,” Fisher said. “So it’s more about how we utilize those resources or where we invest them. I think quality people always make what you do special. So we’ve got to make sure that from top to bottom, we’re surrounded with quality people that are striving to be the best in the world at what they do. “...We have the opportunity to do it. The resources are there. Now it’s up to the human beings involved to figure it out. We have some very successful basketball people to figure it out. And it’s not just going to happen overnight.... We have to accept the fact that becoming great does take time, but we’re willing to put that time in.”

Jose Calderon missed his eighth straight game with a left Achilles injury. Fisher said he will be reevaluated after the Knicks return home on Monday.

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The Philippine Exporters Confederation Inc. (Philexport) said slower growth in exports this year is likely due to the peso’s strong rally, blaming the Bangko Sentral ng Pilipinas’s (BSP) monetary policies to keep inflation low, but are proving to be detrimental to the export sector’s competitiveness.

“It’s true. As a matter of fact, [in] January exports, we already felt the exchange-rate problem; and with the port congestion, we lost the repeat orders,” said Philexport President Sergio R. Ortiz-Luis Jr., commenting on the trade depart-

ment’s prediction of a lackluster exports growth brought about by the peso’s robust appreciation against the US dollar.

Trade Secretary Gregory L. Domingo made a pronouncement on Friday before manufacturingindustry stakeholders that, even as the country’s economy is seen to have a strong showing this year, exports may be an exception, as the peso continues to strengthen.

Domingo noted that the more pressing concern is the peso’s appreciation against the yen and Continued on A2

cnn PhiliPPines begins broadcasting today

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NN Philippines, the country’s highly anticipated brandnew, predominantly English, 24-hour free-to-air news channel and web site, launched today.

At 6 a.m. local time, 9TV officially rebranded to become CNN Philippines, marking a historic day for Filipinos, as well as CNN International and Nine Media Corp..

“We are thrilled to welcome CNN Philippines to the CNN family. Both CNN and Nine Media have worked exceptionally hard to make this a reality. We are confident the Filipino audience is going to embrace CNN Philippines and the unmatched news and information it delivers—something not seen in this country before,” CNN Worldwide President Jeff Zucker said.

“This is such a significant milestone not only for Nine Media, but for Filipinos everywhere. This is a

Peso exchange rates n us 44.2710

news service they have never had before. We aspire to be the trusted name in news in the Philippines.

We are proud to tell the story of the Filipino through the unique content we provide,” said Ambassador Antonio L. Cabangon Chua, chairman of Nine Media Corp.

CNN Philippines operates from studio facilities in Manila, and offers a dynamic combination of local and international news, as well as current affairs, feature programming and documentaries. The accompanying web site, CNNPhilippines.com, offers the latest news, business, science and technology, entertainment and sports, as well as opinion and analysis, special reports, exclusive interviews and videos.

“The Philippines is such an important market for us, and we See “CNN,” A2

TUNA INDUSTRY A fisherman unloads tuna the old-fashioned way in General Santos City, a kind of practice in the country’s tuna industry that needs improvement, according to Labor Secretary Rosalinda D. Baldoz. She called on tuna-industry players in General Santos to pursue critical reforms in their labor practices and make sure they are aligned with the international standards, fearing that the country’s inclusion on the European Union’s Generalized System of Preferences Plus scheme could be jeopardized by the prevailing questionable labor practices in the tuna industry. NONIE REYES

Govt plans debt swap, repo to help boost bond market T hE Philippines plans a pesodenominated debt exchange to trim the number of its outstanding securities, while seeking to let banks engage in bond repurchases to help reinvigorate the market, Treasurer Roberto Tan said.

“The country’s strong economic and fiscal fundamentals must be reflected in the secondary debt market, but the volumes have become volatile,” Tan said in an interview on Saturday at the central Philippine island of Mactan, Cebu. “We need to address this, push for ini-

TAN: “The country’s strong economic and fiscal fundamentals must be reflected in the secondary debt market, but the volumes have become volatile.”

tiatives to boost trading volumes and improve the yield curve.”

The Treasury may offer two tenors of new securities with a size of at least P50 billion ($1.1 billion) each, in ex-

change for securities that are illiquid, infrequently traded, expensive and worth retiring, Tan said. The target is to reduce the count of debt securities to below 100 by the end of the year, the treasurer said in his speech before the Fund Managers Association of the Philippines on March 13.

The average daily trading volume in the Philippine peso-bond market fell to a three-year low in 2014, and returns in the past three months on sovereign peso debt are the least in Southeast Asia. A healthy domestic See “Debt swap,” A12

n jaPan 0.3651 n uK 65.9594 n hK 5.7001 n china 7.0693 n singaPore 32.0549 n australia 34.1334 n eu 47.0955 n saudi arabia 11.8043 Source: BSP (13 March 2015)

News

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Monday, March 16, 2015

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Exporters at odds with BSP anew

CNN. . .

Continued from A1

couldn’t be happier to find a likeminded partner in Nine Media. We have so many exciting developments planned for the Asia-Pacific region, this is just the beginning,” Gerhard Zeiler, president of Turner Broadcasting International, said.

“CNN is a company we have long admired and share its vision, mission and values. To be an official part of the CNN family is an honor and a privilege.

We look forward to delivering a worldclass product to our local Filipino audience,” Reggie Galura, president of Nine Media Corp., said.

The launch of CNN Philippines is part of a strategic effort by CNN International Commercial’s Content Sales and Partnerships Group, a division of Turner Broadcasting System International. The core business is to explore ways in which CNN can reach more consumers locally, regionally and internationally by partnering with other leading media organizations.

CNN Philippines is the latest addition to the CNN family, which includes CNN Turk, CNN IBN, which Chile and CNN Indonesia.

CNN Philippines is available on freeto-air television in Manila RPN-TV9, Cebu RPN-TV9, Davao RPN-TV9, Zamboanga RPN-TV5, Baguio RPN-TV12 and Bacolod RPN-TV8; and also on cable TV through Skycable Channel 14 (Metro Manila), Skycable Channel 6 (Cebu, Davao, Bacolod, Iloilo and Baguio), Destiny Cable Channel 14, Cablelink Channel 14 and Cignal Channel 10, and over 200 cable affiliates nationwide. The award-winning CNN International channel will continue to be available to pay-TV viewers throughout the Philippines.

44.604, then to 44.221 in February.

The past two weeks the peso also appreciated further to 44.179, prompting analysts to forecast that should the psychologically important 43-per-dollar barrier is breached, then a peso as strong as 43.50 per dollar should not be far off.

A stronger peso is a bane for dollar-earning groups such as overseas Filipino workers, whose families will receive less for the dollars they remit; and exporters, as this makes their products more expensive and uncompetitive.

Ortiz-Luis, in a phone interview, pointed out the stringent controls

Continued from A1

the euro, as this may significantly impact the competitiveness of the country’s exports to the European Union and Japan.

The peso has appreciated by 20 percent against the yen over the past 12 months and against the euro by 35 percent in the past six months, Domingo said.

The local currency has also steadily gained strength versus the dollar since November last year, when it averaged 44.951 per dollar and gained some more in December to 44.688 per dollar. In January the exchange rate climbed higher to

PLDT. . .

Continued from A12

Cellular also continued to dominate the mobile postpaid segment with a 16-percent increase in subscriber base to over 2.8 million, outpacing that of competition.

This also represents 55 percent of the total Philippine mobile postpaid market.

“We have seen a significant jump in our wireless broadband subscribers following the ‘Free Internet’ offer in the last quarter of 2014. This is part of the suite of services under our ‘Internet for All’ advocacy, which is expanding rapidly,” Smart Chief Wireless Adviser Orlando B. Vea said.

He added that this campaign allows for a wide-ranging collaboration with the likes of Google for Android One handsets, consumer giant McDonald’s for free coupons and global multimedia player Disney for unique interactive content. Shares of PLDT shed P52, or 2 percent, to close at P2,950 apiece on Friday.

of the country’s central bank, noting that the inflation target of the government, set at 2 percent to 4 percent, is “too low.”

“I don’t think this lower inflation target should be pursued at the expense of exports. Don’t sacrifice exports and dollar earners for slower inflation; our competitiveness will suffer. The inflation rate should be calibrated so we would remain competitive versus the neighboring currencies,” noted Ortiz-Luis.

Last week the central banks of South Korea and Thailand joined the ranks of monetary institutions in the region that cut interest rates in a bid to stimulate economic growth.

Election. . .

The economy grew by 6.1 percent in 2014 and missed the target for the year ranging from 6.5 percent to 7.5 percent.

In 2013 the Philippines exceeded government expectations and expanded by 7.2 percent despite the destruction wrought by Supertyphoon Yolanda (international code name Haiyan) in the Visayas.

“Expect high fiscal spending to [be sustained] this year, providing yet another layer of support in domestic demand. Bulk of the support still comes from the private sector, though,” the Singapore-based bank said.

“Private consumption is resilient, while investment growth will remain close to the double-digit territory. Some moderation in

MARCH 16, 2015 | MONDAY

exports is likely, following the robust growth over the past two years…. While export growth may moderate this year, the manufacturing sector will continue playing an important role,” it added.

DBS Bank also said the inflation trend has shifted down to 2.5 percent in recent months from the 4.5 percent trend six months ago.

“Lower crude-oil price has led to deflation in the utilities and transport components of the CPI basket, which are the most sensitive to changes in crude-oil prices. There are some upside risks on CPI inflation going forward, but we now forecast average CPI inflation to come in at 3.2 percent in 2015—well within the BSP official target of 2 to 4 percent,” DBS Bank said.

MAR 17 MAR 18 MAR 19 TUESDAY WEDNESDAY THURSDAY

METRO MANILA

22 – 33°C

22 – 33°C

TUGUEGARAO

22 – 36°C

23 – 34°C

LAOAG

LAOAG CITY 21– 32°C

SBMA/CLARK 22 – 33°C

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MAR 18 MAR 19 WEDNESDAY THURSDAY

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BAGUIO

14 – 24°C

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ZAMBOANGA

TAGAYTAY

21 – 28°C

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LEGAZPI ILOILO/ BACOLOD 23 – 33°C METRO CEBU 24 – 32°C

TACLOBAN CITY 24 – 32°C

CAGAYAN DE ORO CITY 22 – 31°C

PUERTO PRINCESA

ILOILO/ BACOLOD

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SUNRISE

SUNSET

MOONSET

MOONRISE

6:04 AM

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1:58 PM

2:08 AM

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LEGAZPI CITY 24 – 31°C

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

3-DAY EXTENDED FORECAST

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TUGUEGARAO CITY 22 – 35°C

BAGUIO CITY 14 – 23°C

PUERTO PRINCESA CITY 23 – 32°C

For the next year, the regional banking giant expressed apprehension on the impact of the election period on government performance and its ability to pursue reforms crucial for the economy.

“The presidential election is due in 2016, and there are some concerns of policy continuity. On the fiscal position, revenue collection may come under pressure. There are also risks that protectionist interests may derail the efforts to boost FDI inflows,” the DBS Bank said.

“Political noise ahead of next year’s election may affect government’s efficacy and its push for stronger reforms. For now, we reckon that these risks are fairly limited,” it said.

WEAK NORTHEAST MONSOON AFFECTING EXTREME NORTHERN LUZON (AS OF MARCH 15, 5:00 AM)

Ridge of High Pressure Area (HPA) will bring fair weather to the country except for isolated rainshowers and thunderstorms in the afternoon or evening.

METRO MANILA 21 – 33°C

Inflation climbed to 2.5 percent in February, from 2.4 percent in January, on increases in pump prices and other utility rates. The 2.4-percent average in the first two months of the year is well within the government’s 2-percent to 4-percent target for inflation this year.

The country registered a 2.4-percent inf lation in January, an 18-month low, on the back of continuous cuts in pump prices and utility rates.

“You should allow a little bit inflation because we are a developing country. This inflation targeting is eroding our competitiveness,” OrtizLuis said. Catherine N. Pillas

Continued from A12

3-DAY EXTENDED FORECAST

TODAY’S WEATHER

More than 20 economies, including India, Denmark, Switzerland, Egypt, Turkey, Canada, Singapore and Russia, have been on the easing path amid the plummeting of fuel prices.

The lower interest rates effectively weaken their respective currencies and make exports more competitive.

However, reducing interest rates, as this strengthens consumers’ borrowing power, also spikes inflation, a move that, analysts say, the country’s central bank isn’t too keen to make, as inflation is still within target and macroeconomic fundamentals are strong.

23 – 29°C

HALF MOON NEW MOON

SOUTH HARBOR

MAR 14

1:48 AM

23 – 31°C

24 – 33°C

23 – 32°C

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MAR 20 5:36 PM

Partly cloudy to at times cloudy with rainshowers

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

METRO DAVAO 23 – 33°C

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 CELEBES SEA

2:02 AM

-0.05 METER

Partly cloudy to at times cloudy with rain showers and/or thunderstorms

Partly cloudy skies

ZAMBOANGA CITY 23 – 34°C

LOW TIDEMANILA HIGH TIDE

@PanahonTV

5:58 PM

0.93 METER

news@businessmirror.com.ph

The Nation BusinessMirror

AFP remains mum on BOI report

By Rene Acosta

T

he military continues to refuse to comment on the finding of the Philippine National Police Board of Inquiry (PNP-BOI) that it withheld fire support to the Special Action Force (SAF) during the Mamasapano operation due to the ongoing peace process.

“We will answer those issues in the proper time. We believe that most of these concerns were already addressed during the previous Senate hearings,” Armed Forces of the Philippines (AFP) Public Affairs Office chief Lt. Col. Harold Cabunoc said on Sunday.

“We are waiting for the clearance from the chief of staff, because we need to get more information on that,” Cabunoc added.

In its findings, the BOI stated that the artillery fire requested by the pinned commandos “was not delivered,” because the commander of the Army’s 6th Infantry Division (ID), Major Gen. Edmundo Pangilinan, has “considered the peace process and the protocols.”

The BOI, headed by Director Benjamin Magalong, investigated the Mamasapano incident, wherein 44 members of the SAF lost their lives.

The body also held President Aquino accountable over the bloody operations for supposedly violating the chain of command

and for involving resigned PNP chief Director General Alan Purisima while he was under suspension.

The lack of artillery support from the 6th ID, as requested by the pinned SAF, was blamed for the death of its commandos.

The BOI said the high casualty rate could have been prevented had the military delivered fire support.

On Saturday, Defense Secretary Voltaire Gazmin fended off criticisms that the military chose the peace process over the lives of the commandos, saying the soldiers have to observe protocols.

He said the use of artillery needs a lot of preparation, and this includes coordination, which, the military insisted, was absent between the 6th ID and the SAF during the operation.

Earlier, AFP Chief of Staff Gen. Gregorio Pio Catapang Jr. said the peace talks between the government and the Moro Islamic Liberation Front (MILF) were the “principal reason” for the military’s failure to respond on time.

Catapang issued the statement, even as MILF fighters were identified as the ones who mowed down the commandos.

W hen the soldiers finally came to the commandos’ aid, he said their mission was not to help policemen ward off their attackers but to rescue the pinned SAF personnel.

Editor: Dionisio L. Pelayo • Monday, March 16, 2015 A3

House to OK resolution extending term of ad hoc panel on BBL

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he House of Representatives will pass this week a resolution extending for three months the life of the special Ad Hoc Committee on the Bangsamoro basic law (BBL), its leader said on Sunday.

BELMONTE: “We are committed to passing the resolution, because we believe that peace is the better alternative to war.”

Speaker Feliciano Belmonte Jr. said the special committee, headed

by Rep. Rufus Rodriguez of Cagayan de Oro City, should be extended to address the conflict in Mindanao.

“We are committed to passing the resolution, because we believe that peace is the better alternative to war,” Belmonte said.

Originally, the ad hoc panel was given six months from its creation to review and fine tune the Palace-endorsed BBL, but it failed

to make its final recommendation, following the death of 44 Philippine National Police-Special Action Force (PNP-SAF) commandos that clashed with some members of the Moro Islamic Liberatino Front in Mamasapano, Maguindanao, on January 25.

“The resolution will be adopted before we go on break and allow the ad hoc panel to proceed,” Belmonte said.

House Resolution 1966, authored

by Belmonte, aims to extend the life of the ad hoc panel until June 12. The second regular session of the 16th Congress will end on June 11.

“The panel has yet to conclude the deliberations on the proposed Bangsamoro basic law, and it becomes imperative to extend until June 12, 2015, the period given to the Ad Hoc Committee to meet and submit its reports and recommendations to the House of Representa-

tives,” the resolution read.

Joining Belmonte in filing the resolution are House Majority Leader and Mandaluyong City Rep. Neptali Gonzales II, House Minority Leader Rep. Ronaldo Zamora of San Juan City and Rodriguez.

Following the submission of PNP-Board of Inquiry (BOI) report on the Mamasapano encounter, Rodriguez said the lower chamber is set to resume its executive session on the BBL from April 6 to 16, while Congress is on a summer break. The summer break is scheduled from March 18 to May 3.

Last month the lower house suspended its BBL deliberations pending the submission of the BOI report of the Mamasapano encounter.

Chain of command

Meanwhile, an administration ally, Liberal Party Rep. Ben Evardone of Eastern Samar said the finding that President Aquino broke the chain of command in the Mamasapano incident is “unconstitutional.”

Last week the BOI report indicated that the President violated the PNP chain of command in the Mamasapano operation.

Evardone said the 1987 Constitution has clearly separated the police force from the armed forces, which were merged during the martial-law years.

“The chain-of-command concept is a military concept also applied to the police force during the martiallaw era, because the Integrated National Police at the time was under the command and control of then ‘Commander in Chief’ President Marcos,” Evardone said.

During the martial-law years, Marcos merged the Philippine Constabulary with all police organizations nationwide and created the Philippine ConstabularyIntegrated National Police, which was what Fidel Ramos headed for a long time until Edsa came about, Evardone said.

“The Armed Forces is composed only of the Army, Air Force and Navy service commands, while there is only one police force which is clearly characterized as ‘civilian,’” he said.

“The President is not the ‘Commander in Chief’ of the PNP, because the PNP does not have a commander in chief. And that’s because the PNP is part of the civilian government.

But like any other civilian department of agency of government, the President is the PNP ‘head’ as President, not as commander in chief,” Evardone added.

The lawmaker said the PNP, being civilian in character, is covered by rules of civil service, not the military-style chain of command.

Economy

A4 Monday, March 16, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

briefs supreme court bans three mining companies

THE Supreme Court has affirmed with finality its decision issued last year barring three miners from operating in the country for violation of the constitutional provision that limits foreign ownership in mining companies to 40 percent.

In a 22-page resoution penned by Associate Justice Presbitero Velasco Jr., the Court’s Third Division junked the motion for reconsideration filed by Narra Nickel and Mininng Development Corp., Tesoro Mining and Development Inc. and McArthur Mining Inc. The Court did not give merit to the claim of the three mining firms that its decision issued in April 2014 was not in accord with law and logic.

Contrary to the claim of petitioners, the Court said the case has not been rendered moot and academic by the conversion of their Mineral Production Sharing Agreements to an application for a financial technnical assistance Agreement, which in fact, has been granted. Joel San Juan

phl to hold trade, investment forum in japan The trade department will be visiting Japan later this month for a trade and investment road show, organized by the Philippine-Japan Economic Cooperation Committee (PhilJec).

“Japan is one of our strategic economic partners. We’ll have an investment forum and business meetings with various companies,” Trade Secretary Gregory L. Domingo said.

He, however, did not disclose the Japanese companies he is scheduled to meet.

The forum, the 33rd Joint Meeting of the Philippines’s and Japan’s Economic Cooperation Committee, will be attended by 300 to 500 Japanese companies on March 30 and 31.

PhilJec is a group representing Filipino businessmen, with the goal of establishing economic and business relations with its counterpart Japanese association, the JapanPhilippines Economic Cooperation Committee. Annual joint meetings of these two bodies have been held since 1973. It produces and submits official communiqués to the governments of the Philippines and Japan as private-sector inputs for the formulation of bilateral economic policies. Catherine N. Pillas

nlex segment 9 operational this week The 2.42-kilometer road that will link the North Luzon Expressway (Nlex) to MacArthur Highway in Valenzuela City is expected to be commercially operational this week.

Manila North Tollways Corp.

President Rodrigo E. Franco said the company is aiming to open Segment 9, a P1.59-billion extension of the thoroughfare to the north, on Wednesday.

“We are targeting to open the road by this week, maybe March 18,” he said. “We are just awaiting the toll operations permit from the Toll Regulatory Board.”

Once opened, Segment 9 will require motorists to pay the same toll fees as those currently collected in the existing Nlex Open System.

Toll rates amount to P45 for Class 1 vehicles (cars, jeepneys, pickup trucks and vans); P114 for Class 2 vehicles (two-axle trucks, buses and vans); and P136 for Class 3 vehicles (trucks and trailers with three or more axles).

Segment 9, Franco said, will dramatically facilitate the movement of people and goods between Central and Northern Luzon and Metro Manila, particularly the CaloocanMalabon-Navotas-Valenzuela or Camanava area.

The new tollway will be particularly beneficial to the factories and industrial plants in Camanava since it will improve transport logistics through the more-efficient movement of trucks, he added. Lorenz S. Marasigan

BusinessMirror

news@businessmirror.com.ph

PHL-Efta trade talks to begin this month

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By Catherine N. Pillas

he trade department is confident that a free-trade agreement (FTA) with the European Free Trade Association (Efta)—a bloc of wealthy European countries that can become a major export market for certain sectors—can be completed by 2016, as the first round of negotiations is set to begin this month.

“It’s doable. We did studies on that, and our economies are complementary. We already did a

round of consultations last year and started scoping talks last year. An agreement with Efta

can be done by 2016,” Trade Undersecretary Adrian S. Cristobal told reporters at the sidelines of the Gathering of Industry Champions hosted by the Board of Investments (BOI).

Trade Secretary Gregory L. Domingo earlier expressed the same sentiment, as most of the groundwork for an FTA has already been laid down in the past year.

The trade bloc—composed of Sw itzerland, Nor way, Iceland and Liechtenstein—are keen, as well, on finishing a deal before 2016, when the elections are to take place.

Areas for cooperation that may be beneficial for local industries, said Cristobal, are in shipbuilding, iron and steel, auto and auto-parts components, aerospace,

IT-BPM and pharmaceuticals.

C r i s t o b a l m e nt i o n e d t h e strengths of the countr y and its possible offering to the European bloc, citing voice and nonvoice services and IT solutions, as well as in the sectors of banking, shipbuilding, precision engineering, pharmaceuticals and chemicals.

There is export potential, as well, to Efta for creative services, such as editing, sound mixing, dubbing, animation and computer graphics.

Raoul Imbach, deputy head of Mission at the Swiss Embassy, in a previous report, cited said export sectors in the Philippines that may benefit from the FTA include agriculture, fisheries, handicrafts and IT.

Palawan airport deal ‘held in abeyance’

Govt prays El Niño not as bad as in 1998

By Cai U. Ordinario

T

he national government is crossing its fingers that the impending El Niño will not be as worse as the one the country experienced in 1998 when the country saw a 10-percent contraction in farm sector growth.

“Up until now, it’s still on the 50 percent-to-60 percent probability, so it’s still low. I think what we’ll have is like a spot El Niño; so hopefully its not going to be as bad as 1998,” National Economic and Development Authority (Neda) Assistant Director General Rosemarie Edillion said.

The El Niño weather phenomenon usually hits the production of the country’s staple, rice, a waterloving crop. If there is a reduction in rice production, prices of the staple could escalate.

In 2014 Bureau of Agricultural Statistics (BAS) Head Romeo Recide said the impact of a severe El Niño on agriculture growth could lead to a reduction of 10 percentage points. He said this is what happened in the 1997 and 1998 El Niño phenomenon, when the dry spell not only affected crops, such as palay, but also livestock.

Recide, however, said given that the Pagasa has already revised its predictions on the El Niño and it seems that the dry spell would not be as severe as expected, the impact on agriculture growth could be a reduction of less than a percentage point.

He explained that a dry spell that occurs during harvest season, or during the rainy months, would be beneficial to crops. Recide added that there are crops that thrive during El Niño like mangoes, which could offset the slack in production experienced by other crops such as palay.

“Not all El Niños are alike. Some El Niños are actually favorable, some of them become too severe affecting the whole sector as what happened in 1997 and 1998,” Recide said.

“It can get really, really bad. Agriculture growth went down by as much as 8 to 10 percentage points in 1998. That was huge because all commodities were affected, even livestock was affected. Usually, livestock is robust during El Niño

Efta’s chief trade negotiators and their DTI counterparts will meet from March 24 to 27 in Manila to kick off negotiations.

Efta economies are among the countries with the highest gross domestic product (GDP) per capita in the world. Liechtenstein has the second-highest GDP per capita in the world at $89,400, while Switzerland, the largest market among the Efta member-states, has a GDP per capita of $54,800 and ranks 11th in the economies with the highest GDP per capita.

Efta-Philippines’s total merchandise trade amounted to $633 million in 2013. Efta economies’ exports have amounted to $440 mil lion, composed mainly of pharmaceutical products, aircraft and machinery.

By Lorenz S. Marasigan

T

FIREWORKS DISPLAY

The Philippine team wows the crowd with its beautiful display of fireworks during the last day of the Pyromusical 2015 competition at the SM Mall of Asia on Sunday. KEVIN DELA CRUZ

but at that time, rice, alone, went down by 26 percent, so it’s almost one-fourth. But that was the worst El Niño,” he explained.

Meanwhile, Neda Director General and Economic Planning Secretary Arsenio M. Balisacan said the high cost of rice was among the primary reasons for the increase in poverty in the first semester of 2014.

The country’s poverty incidence increased to 25.8 percent in the January-to-June period in 2014, higher than the 24.6 percent. This fell short of the 23-percent to 25-percent target of the government for the period.

Balisacan said food inflation in 2014 averaged 6.5 percent on the back of an 11.9-percent increase in rice inflation and 10.3 percent increase in vegetable prices.

“The reduction of poverty incidence in 2013 could have continued in 2014 were it not for the high food price inflation. In particular, for rice, the situation could have been avoided had we been able to take advantage of the favorable world market condition for rice,” Balisacan said.

Due to this missed opportunity, Balisacan said the government al-

ready learned its lesson and is now undertaking efforts to plan a post2017 scenario when the extension of the country’s quantitative restriction (QR) on Rice is expected to expire.

When the Philippines acceded to the World Trade Organization (WTO) in 1995, the country agreed to convert QRs into equivalent tariffs (tariffication).

However, the Philippines obtained a special treatment for rice up to 2005, allowing it to maintain its rice QR. The Philippines was, thus far, successful in extending its QR to 2017.

Balisacan said the extension of the QR was also necessary since Republic Act 8178, or the Agriculture Tariffication Act of 1996, provides that rice should be covered by a QR. “[Until the law is amended] de facto QR ang [tariff] natin sa rice.

We will study it sowe can recommended something to theCabinet.

We have to cure the root of the problem, which is the uncertainty in trade of agricultural commodities,” Balisacan said.

Removing the QR, the Neda

chief said, will help stabilize prices because there will be a steady flow of rice imports entering the Philippines. This will also reduce rice prices.

Balisacan said the Neda, along with the agriculture and trade departments, will also be drafting proposals to address the QR and prepare for its expiration on 2017.

These proposals will include transparent measures such as tariffication of the rice QR in the post2017 period. However, Balisacan said the law must first be amended before 2017 to ensure that these measures can be implemented.

A study released by state-owned think tank Philippine Institute for Development Studies estimated that under a free-trade scenario, total rice imports could have reached 4.2 million tons. This will bring down retail prices to P19.8 per kilo and wholesale prices to P17.66 per kilo.

This would result in a consumer surplus of P178.07 billion. However, this would cause a P33.99billion reduction in producer surplus and a P5.63-billion reduction in importer’s revenue.

he multibillion-peso development of a secondary airport in Palawan was temporarily held back after the transportation department decided to rationalize the government’s airport strategy in the province.

Transportation Undersecretary Jose Perpetuo M. Lotilla said the auction for the P5.81-billion contract to develop the Puerto Princesa Airport has been “held in abeyance until further notice.”

This means that the contract will now be separately auctioned off from the larger P116.23-billion airport development plan under the Public-Private Partnership (PPP) Program. The bidding for the five other airports—BacolodSilay, Davao, Iloilo, Laguindingan and New Bohol (Panglao)—will continue as scheduled.

Sought for more details, Transportation Spokesman Michael Arthur C. Sagcal explained the department decided to suspend the auction as infusing the project with a comprehensive tourism airportcentric strategy is more feasible versus bundling it with the five other airport deals.

“It now appears feasible to bid out its operations and maintenance component separately, possibly bundled together into a comprehensive tourism airport-centric strategy for Palawan airports such as San Vicente, which will be completed in around three months and Busuanga,” he said.

“The prequalification bids and awards committee shall issue a bid bulletin within a reasonable period before the prequalification documents submission date on the inclusion of the Puerto Princesa Airport in the bidding process,” the undersecretary said.

The auction for the five other projects will be implemented under a two-stage bidding, meaning interested parties must first prequalify before allowing them to place technical and financial offers.

Bicol electric co-ops buck grant of franchise to a private firm

E

lectric cooperatives in the Bicol region have expressed their opposition to a House bill granting a private company a franchise to establish and operate a distribution system “for the conveyance of electric power to the end-users in the entire Bicol region.”

Members of the Bicol Electric Cooperative Association Inc. (Beca), in their resolution dated February 3 submitted to the lower chamber, said granting a franchise to the Bicol Light and Power Corp. as mandated by House Bill (HB) 4935 poses “a serious and present

danger” to the cooperatives, and may lead to massive displacement of their workforce, wastage of assets funded by the government, depress growth in rural areas, and render the National Electrification Administration (NEA) irrelevant.

“The passage of HB 4935 would surely result in higher power rates in the Bicol region because the Bicol Light and Power Corp.

(BLPC), being a private company, is profitoriented and is expected to add on profit to its power rates on top of its recovery of the

cost of development and maintenance of its power infrastructure and operation and management of the company.”

HB 4935 was filed on September 1, 2014, and was subsequently referred to the Committee on Legislative Franchises last September 3.

Beca, composed of 12 electric cooperatives in the region, said through the NEA, the cooperatives have been the pioneering implementing arm of the government in its banner program of countryside development through total electrification of the rural areas for more

than four decades now.

Being nonprofit in nature, Beca said the cooperatives measure their power rates strictly on the basis of their monthly operating cost, without any provision for net margins. They are also service-oriented and missionary in nature, serving even the thinly populated areas and geographically dispersed consumers in Bicol.

The passage of HB 4935, the group said, would pave the way for the “corporatization” of all power utilities under the “opulent and powerful.”

“The passage of HB 4935 would deny extension of lines to heretofore unenergized areas and could even cut off electric lines to energized but far-flung barangays and sitios due to high maintenance cost vis-à-vis zero-profit margins, which could result in stunted growth and development of the Bicol region,” Beca said.

The cooperatives also fear that their right to exercise their franchise to operate an electric power-distribution service in their respective franchise areas up to the full term of their franchise may be unduly undermined by the BLPC.

news@businessmirror.com.ph

Economy BusinessMirror

Monday, March 16, 2015 A5

3 groups qualify for Lakeshore deal auction

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By Lorenz S. Marasigan

HREE groups have so far passed the prequalification stage of the auction for the P122.8-billion Laguna Lakeshore Expressway Dike contract, a senior government official said over the weekend.

Public Works Undersecretary Rafael C. Yabut said the three groups that prequalified were Trident Infrastructure and Development Corp. or Team Trident, composed of Ayala Corp., Aboitiz Equity Ventures Inc., SM Prime Holdings Inc. and Megaworld Corp.; Alloy-Pavi Hanshin LLEDP Consortium of Alloy MTD Capital Bhd., Prime Asset Ventures Inc. and Hanshin Engineering Constructions; and San Miguel Holdings Corp.

Rainbow Consortium—composed of Rainbow Holdings Inc., PT Nusa Konstruksi Enjiniring Tbk., The No. 4 Metalurgical Co. of China Ltd. and Shindong-Ah Construction Co. Ltd.—was “initially disqualified” from the prequalification stage, Yabut said.

“Initially, three are found to be prequalified, namely, Team Trident, San Miguel Holdings Corp. and Alloy MTD, the Malaysian-led group,” Yabut said in a text message. “We are still finalizing the evaluation for Rainbow Group, which is initially predisqualified because of noncompliance in the submission of required and prescribed documents.”

Hence, the three groups are now qualified to submit their technical and financial proposals to the government to win the much-coveted deal.

The official notices of prequalification are expected to be released on March 24.

A day after that, an indicative timeline showed, bid documents will be issued and one-on-one meetings will then commence.

Those who are still interested in the deal have until July 6 to submit their technical and financial proposals to the Department of Public Works and Highways.

The department will then have 20 days to evaluate the technical proposals. The financial bids of those who passed the technical review will be opened and announced on July 27.

The top bidder’s financial proposal will then be scrutinized, and if it passes, the notice of award will then be issued. The awarding is slated for August 21.

By September 20 the government and the private-sector partner should have signed the concession agreement.

A two-stage bidding system was adopted for the auction, meaning bidders must first prequalify on minimum legal, technical and financial requirements as set by the implementing agency. Only prequalified bidders will be permitted to submit their technical and financial offers for the contract.

Group calls for urgent action to avert crisis

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onsumer group CitizenWatch urged government agencies to immediately comply with the call of the Joint Congressional Oversight Committee (JCOC) on Energy to submit all necessary data and information available to implement the Interruptible Load Program (ILP) smoothly and efficiently.

According to lawyer Tim Abejo, co-convenor of CitizenWatch, government agencies need to show a sense of urgency in providing data critical to the implementation of the ILP. “The members of the JCOC need pertinent data and information for them to come up with a reasonable decision on whether to pass on the additional charge to consumers or not.”

Abejo agreed with the position of House Commitee on Energy Rep. Reynaldo Umali that all we need to do is to convene all the pertinent government agencies to do the math so that reliable data would be available to aid the legislators and break the ongoing deadlock in the Bicam sessions.

Brownouts are not far from happening. In fact, in some areas notice of brownout schedules have been given out to consumers, these are warning signals of the looming power crisis, Abejo said.

The ILP is a proposal in the joint resolution where large energy users would disconnect from the grid and instead run on their own generators. In return, they would get paid for the costs of running their generators.

Wilford Wong, secretary-general of CitizenWatch, said: “We support the House version wherein the additional costs of the ILP will be charged to the Malampaya Fund. The power shortage is not the fault of the consumers and any additional costs should not be passed on to the already high price of electricity.

“Aside from ILP Watch, we are set to launch Powerplant Watch, an information advocacy project that will help consumers understand our energy situation in the country. This project aims to monitor the power situation and unscheduled shutdowns of power plants that might trigger spikes in the price of electricity. This will hopefully discourage price manipulation in the Wholesale Electricity Spot Market by power-generating companies who might take advantage of the power shortage.

This is set to run by March up to June 2015,” Wong added.

CitizenWatch is an independent network, which advocates for the interests of citizen rights, especially against powerful interests.

The thoroughfare-cum-dike project will help mitigate flooding along the western coast of the Laguna Lake, and will run from Taguig to the town of Bay in Laguna. It will also serve as an alternative transport route to the congested South Luzon Expressway (Slex) and enhance the hydrology for the ecosystem of Laguna Lake.

A total of 24 parties expressed their interest in the multibillionpeso contract.

The winning bidder will start designing and constructing the expressway-dike by April next year. The thoroughfare should be commercially operational by 2022.

The project involves the construction

of a 47-kilometer flood-control dike—on top of which will be a six-lane expressway—on an offshore alignment 500 meters away from the western shoreline of Laguna Lake. It includes interchanges, bridges, floodgates and pumps, from Taguig to Los Baños in Laguna.

It also involves the reclamation of 700 hectares of raw land adjoining the

expressway-dike.

The public works department has so far awarded two key infrastructure projects, namely, P1.96-billion Daang Hari-Slex project bagged by Ayala Corp. in 2011; and the P15.68-billion Ninoy Aquino International Airport expressway, given to San Miguel Corp. unit Vertex Tollways Development Inc. in 2013.

Tourism&En

Business

A6 Monday, March 16, 2015 • Editor: Gerard Ramos

TOURING THE PHILIPPINES THE

I

B B L

N line with the Department of Tourism’s (DOT) “Visit the Philippines 2015” campaign that was launched last September, the Philippine Tour Operators Association (Philtoa), one of the DOT’s most active partners in strengthening the country’s tourism sector, is bringing in the “Islands Philippines Fun Caravans.”

CORDILLERA HERITAGE WARRIOR CARAVAN—The Batad Rice Terraces

During a news conference held at the Mabuhay Room at the DOT with Tourism Undersecretary for Tourism Development Benito C. Bengzon Jr. in attendance, Philtoa President Cesar Cruz said, “The Island Philippines Fun Caravans will accommodate both foreign and local markets, where they can choose to bring their own vehicles or avail themselves of the caravan vehicle—of course, only if the destinations can be accessed via land transportation. The participants also have the option to avail themselves of the accommodations that will be announced prior to the trip—campsite, lodging houses, hostels, or star-rated properties.” Cruz also added that the

are meant to become interactive and participative, hence, there will be programs that will encourage them to interact and immerse themselves in the local communities. Other facets that are expected to be entailed during each course are a dummy passport that will be stamped by the participating local government unit, minitrade fairs, a festive welcome reception and other community-based activities that will highlight the best spots and emerging lifestyle and travel trends in the municipalities included in the itinerary.

“As our tourism industry further shapes up through Visit the Philippines 2015, Philtoa wanted to con-

VISAYAS CHARMS—Bike Zipping at Chocolate Hills

project is designed to provide flexibility in the choices of activities and accommodation in each destination based on the interest and affordability of the participants.

Cruz also shares that the caravans

BICOL EXPRESS—Mayon Volcano and Cagsawa Ruins

tribute through this caravan project, which aims to provide an effective platform for the promotion of different tourist destinations across the country,” Cruz said. The project will be featuring five major caravan programs and three minor caravans that are all designed to promote, reestablish and reinforce tourism activities across the region. Each caravan is calendared in different months throughout 2015, lasting from three to seven days, depending on the number of municipalities included.

Philtoa, the largest association of registered tour operators (with allied members from various tourism sectors, such as airlines, hotels, resorts,

tourist transportation and more), actively contributes to national economic growth, and enhances and promotes domestic and inbound Philippine tourism by forging national and global affiliations and alliances with tourism-related associations and organizations.

The five major caravans are the Cordillera Heritage Warrior (February 4 to 8); the Southern Luzon Kulinarya Caravan (April 25 to 29); the Visayas Charm (August 21 to 27); the Bicol Express (October 17 to 22); and The Plains and Heights of Central Luzon (December 11 to 17), while the three minor caravans are Rediscover Batanes (March 26 to 29); the North-

ern Palawan Eco Adventure Discovery (June 19 to 22); and Hola, Zamboanga (November 13 to 16).

The Cordillera Heritage Warrior Caravan will encompass San Jose City in Nueva Ecija, Bayombong and Santa Fe in Nueva Vizcaya; Banaue, Kiangan and Lagawe in Ifugao; Bontoc and Sagada in Mountain Province; and Baguio City and La Trinidad in Benguet. The Southern Luzon Kulinarya will involve Tagaytay City and the towns of Indang, Kawit and Tanza in the historical province of Cavite; San Pablo City and the towns of Alaminos, Liliw, Majayjay and Nagcarlan in the province of Laguna; Tayabas City and the towns of Lucban and Sariaya in Quezon province; and the towns of Agoncillo, San Juan, Taal and Talisay in Batangas province.

ntertainment

sMirror

E CARAVAN WAY

tourism@businessmirror.com.ph • Monday, March 16, 2015 A7

PAL ALL SET TO FLY TO NEW YORK CITY

PLAINS and HEIGHTS OF CENTRAL LUZON CARAVAN—Mount Pinatubo

REDISCOVER BATANES—The Lighthouse at Naidi Hills in Basco

The Visayas Charm Caravan underscores the island-provinces of Bohol (Tagbilaran City and the town of Anda and includes the Chocolate Hills Adventure Park) and Cebu and Boracay in Aklan. Optional tours include the Tuki (Whale Shark) Adventure and Olango Island, both in

Cebu. The Bicol Express will cover Naga City in Camarines Sur; Legazpi City, Tabaco City and the town of Tiwi plus Misibis (Bacacay) in Albay; and the towns of Bulusan and Matnog in Sorsogon province. The Plains and Heights of Central Luzon Caravan will put into spotlight Mt. Pina-

tubo; Clark and the town of Bacolor in Pampanga; the town of Concepcion in Tarlac, the town of Agoo in La Union; Alaminos City and the towns of Bolinao, Dasol and Lingayen in Pangasinan; Baguio City in Benguet; and the towns of Botolan, Iba, San Felipe, San Narciso and Subic in Zambales.

Rediscover Batanes highlights the grandness of Batanes’s plateaus; the Northern Palawan Eco Adventure Discovery features the lush islands, pristine coastlines and cobalt waters of the Calamianes Group of Islands; and Hola, Zamboanga, spotlights the vibrant culture and diverse landscape of the Zamboanga Peninsula, covering Zamboanga City (includes Santa Cruz Island) in Zamboanga del Sur and the cities of Dapitan and Dipolog in Zamboanga del Norte.

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ARCH 15, 2015, is a milestone date for flag carrier Philippine Airlines (PAL), as it marks the company’s 74th founding anniversary and signals the start of PAL’s four-timesweekly service to New York City.

“We are prioritizing our US network expansion in answer to the clamor of the huge Filipino community in the East Coast. We are confident we will be able to meet the expectations of our passengers in New York with PAL’s brand of quality service that is distinctively Filipino,” PAL President Jaime J. Bautista said.

The new service will operate between Manila’s Ninoy Aquino International Airport and New York’s John F. Kennedy International (JFK) Airport. PAL’s flagship

airplane—the Boeing 777-300ER—will be utilized for the inaugural journey to the Big Apple. The aircraft, with its award-winning passenger experience, delivers the highest reliability and lowest operating cost-per-seat of any aircraft flying today.

New York marks the fifth US city in PAL’s network, following Los Angeles, San Francisco, Honolulu and Guam.

PAL’s arrival has been keenly anticipated by the huge Filipino-American communities along the US eastern seaboard. About half a million ethnic Filipinos reside on the East Coast, with more than 253,000 in the New York-New Jersey metropolitan area; 90,000 in Virginia; 75,000 in Washington, D.C. and environs;

and 31,000 in the Philadelphia metro area.

Overall, Filipinos on the East Coast account for 15 percent of the estimated 3.4 millionstrong Filipino population in the US, comprising a natural base market for PAL. The robust business sector in New York City, the world’s financial capital, as well as the sizable government and diplomatic community attached to the United Nations, which is also based in the city, provide other key traffic streams.

The choice of JFK International, one of the busiest airports in the US, as PAL’s gateway to New York, is a major advantage for the new service. Located in the borough of Queens, the airport is a mere 15 miles from midtown Manhattan, the nerve center of New York.

TheElderly

A8

Monday, March 16, 2015 • Editor: Efleda P. Campos

BusinessMirror

news@businessmirror.com.ph

International community development LTFRB’s Pink4Project adds 60 LBR taxicabs worker still on the move at 72 years old T

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HE latest addition to the Land Transportation Franchising and Regulatory Board’s (LTFRB) Pink4Project are 60 units of a taxi company owned and operated by a famous showbiz personality.

LTFRB announced on Wednesday that 60 units of LBR Transport Inc., which is owned and operated

by TV host and son of Batangas Gov. Vilma Santos-Recto, Luis “Lucky” Manzano, will also be serving women, children, senior citizens and persons with disabilities during rush hours.

The LTFRB Pink4Project aims to give priority to these special groups to ease their convenience while commuting.

There will be a motorcade of the pink taxis on Wednesday afternoon from LTFRB’s central office to the Quezon Memorial Circle in Quezon City and return to board’s office to officially launch the project.

The 60 LBR taxis will bear double-pink stripes on both sides of the units’ bodies and double-pink ribbons on their top lights. The drivers will also wear pink shirts with collar.

These taxis will give priority to these passengers in taxi bays at shopping malls and other public places, or when they hail the unit along roads and streets in

By Oliver Samson | Correspondent

ESTOR Maniebo Pestelos, one of the country’s community development pioneers, wishes to retire from what he continues to do best at age 72.

This, after nearly four decades of working on projects for the United Nations Development Program (UNDP) in South Pacific atoll countries and the United Nations Children’s Fund (Unicef) in the Philippines.

But he can’t close his eyes to the problems that Bohol province, where he rebuilt his life, faces today.

Bohol, one of the country’s premier ecotourism destinations, has been rocked by a spate of drug-related killings in recent months. It was also hit by a magnitude 7.2 quake in 2013.

Men and women, young and old alike, were shot dead in the streets of Tagbilaran City and towns in broad daylight, and the number of young people getting hooked is alarmingly growing, Pestelos said.

A drug-dependent youth disrespectfully warned his own parents he would blow their heads off if they disclosed his vice to the authorities, a priest based in Bohol said.

Pestelos, the older of two siblings, originally came from Tiaong, Quezon. After graduating from the Quezon Provincial High School, whose school paper he edited, he went to the University of the Philippines in Los Baños in 1958 to study Development Communication, but he dropped out.

In 1974 he got involved in Project Compassion, Green Revolution Program, and Environmental Center of the Philippines. His boss then was Ramon P. Binamira, father of Philippine community development.

Pestelos’s involvement in Unicef projects in the Philippines gave him opportunities to pursue his studies.

In 1981 the Unicef sent him to Bangladesh Academy for Rural Development to study Integrated Rural Development and the University of Bradford to further study a similar discipline.

When the establishment of the Ilaw International Center in Bohol was approved, the Unicef recalled him from England to become the resource center’s resident director.

Pestelos said, “At that time, the Unicef was trying to apply the basicservices strategies, which, in effect, encouraged community develop-

ment globally.”

The Ilaw International Center implemented community development projects not only by the Unicef, but also by AusAID, USAID, World Bank and other foreign institutions that offer aid.

Through his scholarship sponsored by the Unicef, Pestelos obtained a Master of Management degree from the Asian Institute of Management in Makati in 1987 and a doctorate degree from the University of Bohol the following year.

From 1989 to 1994, he worked as community development specialist for the projects of the United Nations Development Program (UNDP) in Fiji Islands and Maldives.

He was participatory development specialist for the Pacific Regional Integrated Atoll Development Project of the UNDP from 1994 to 1997, providing technical inputs for training, advocacy activities and practical approaches to participatory planning, implementation, monitoring and assessment in 10 South Pacific atoll countries and Maldives in the Indian Ocean. In 1997 he became chief technical adviser of a UNDP project in Solomon Islands.

After his retirement from the UNDP in 2002, he assumed various posts in a number of local government and non-governmental agencies. He was consultant (2002) and later head (2003) of Bohol Poverty Reduction Program.

He joined Habitat for Humanity International in 2005, assuming the post of regional manager for Southeast Asia. Two years later he was appointed director of a project funded by the UK Economic, seeking to strengthen local governance for sustainable economic growth and effective delivery of social services.

He led several recent community development projects, including construction of core houses through Bohol Local Development Foundation, which he currently presides, for the quake survivors in the province.

After building over 100 core houses, Pestelos wished to retire. But the former activist could not just ignore

NESTOR Maniebo Pestelos, Bohol Local Development Foundation president, at the site of the proposed drug-rehabilitation center in Baclayon, Bohol. OLIVER SAMSON

the growing problem of illegal drugs in Bohol. A mother was raped by her own son, who mutated into a beast by drugs. To help address the problem, he proposed with the New Day Rehabilitation Center (NDRC) in Davao to set up similar drug-recovery facility in Baclayon, a town immediately next to Tagbilaran City.

Eyeing to accommodate a total of 100 patients, 50 for drug-related cases, the other 50 for patients who need psychiatric care, the project, which may cost P40 million, will not only rehabilitate victims of drugs, but also forewarn the Boholano youth of the evil effects of drugs on the individual, family and community, which, at first try, may lead to addiction and, eventually, all sorts of drug-related violence.

Sustainable programs to educate the youth on drugs will be intensely pushed in the community level, Pestelos said.

In partnership with NDRC-Davao,

BLDF, which Pestelos currently presides, will set up drop-in centers, where parents, who suspect their children are doing drugs, can seek initial assistance, in the barangays of the province.

“Since rehabilitation is expensive, which only the rich can afford, the New Day Rehabilitation Center— Bohol will cater to poor victims of drugs,” he said. The project may raise a trust fund to subsidize poor clients, Pestelos said. It may tap corporations, government agencies, local government units and other institutions.

With a population of about 1.2 million, Bohol currently has no existing rehabilitation center, he said. Victims of drugs and individuals, who need psychiatric care, are brought to Cebu, Davao, Tagaytay and Manila, which is costly to the poor.

Pestelos, an outstanding alumnus of Quezon Provincial High School, authored the Old Warrior and Other Poems launched in April 2014.

US research project explains why Americans should delay retirement

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A SHINGTON—For Americans with their 60th birthday behind them, a retirement research recently explained why it might be a better choice for them to keep their jobs a bit longer.

The Center for Retirement Research at Boston College, a nonprofit research institute based at Chestnut Hill, Massachusetts, said in its report that for Americans, working longer is the key to a secure retirement.

According to the report, changes in the provision of retirement income together with a decline in retiree health insurance played important roles in senior citizens’ decisions to put off their retirement.

Before mid-1980s, workers were entitled to a defined benefit pension that provided a fixed income stream.

However, thanks to the 401(k) plan, workers are now responsible for their own retirement income through their 401(k) accounts.

N

Nurnberg said, one of the few people connected to the book’s publication who has met in person with Lee at the assisted-living facility in her Alabama hometown of Monroeville, the inspiration for Mockingbird.

“The fact that she is hard of hearing and suffers from some macular degeneration [entirely common for someone in their late 80s] has no bearing whatsoever on her quick wit or of speaking her mind on all manner of things,” he said.

State investigators in Alabama have looked into whether publishing Go Set a Watchman, scheduled for July 14 and highly in demand as a preorder, involved financial fraud.

She answered questions to the satisfaction of the Alabama Securities Commission and that part of the inquiry was closed, a state official said on Thursday. The status of the larger investigation by Alabama’s Department of Human Resources is unclear. AP

Under the 401(k) plan, retirement savings contributions are offered by an employer and are deducted from the employee’s paycheck before taxation.

“Studies show that workers covered by 401(k) plans retire a year or two later on average than similarly situated workers covered by a defined benefit plan,” the study found.

The decline of retiree health benefits and the rapid rise in health-care costs should also be considered when making the decision to retire, the report suggested.

“Given that the earlier factors contributing to later retirement appear to have run their course, the most potent level at this point may be educating workers about the enormous payoff to working longer and delaying claiming retirement benefits,” said Alicia Munnell, director of the center, in a interview with the TV network NBC News. PNA/Xinhua

SM project to help seniors to stay fit

Harper Lee’s agent dismisses allegations of ‘elder abuse’

EW YORK—Harper Lee’s literary agent says he was “surprised” that his client was believed a victim of elder abuse and asserted “categorically” that she was in “full possession of her mental faculties” and “delighted” about this summer’s publication of her second novel.

The statement from Andrew Nurnberg was issued on Friday through Lee’s publisher, HarperCollins. Speculation about the 88-yearold author has been ongoing since last month’s stunning announcement that Lee had approved the release of Go Set a Watchman, her first book since To Kill a Mockingbird. Lee has rarely spoken to the press over the past 50 years and had apparently long resigned herself to never publishing again.

“We have had wonderful discussions ranging over many subjects from the state of contemporary politics to University life in England,”

the metropolis.

In a statement, Winston Ginez, LTFRB chairman, welcomed the newest public-utility vehicle (PUV) company to join the movement.

“We express our utmost gratitude to the LBR Transport Inc. for their participation in our project,” Ginez said in the vernacular.

“We are glad that more PUV operators are joining hands with us to ease the burden of finding a convenient commute for these special groups, which often had difficulty getting a ride home or to reach their destinations during rush hours,” Ginez said.

The LTFRB chief also expressed hope that more public-transport services to participate in the program for a good cause.

Earlier this week RRCG Bus Inc. joined the same project by fielding its first pink bus plying the Quiapo-Cainta route to pick up and provide transport only to these special groups from 4 to 10 a.m., and from 4 to 10 p.m.

Last month there were also 14 public-utility jeepneys plying the Pateros-Guadalupe route and 16 UV express vehicles plying the TriNoma-Tandang Sora route, which kicked off the Pink4Project by picking up and transporting only these group of passengers. PNA

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A CALL TO CELEBRATE A tribal elder tries out the solibao (a native drum) and the gangsa (gong) being sold at the Peoples Park in Baguio City.

Both indigenous musical instruments are used widely in the Cordillera during celebrations.

MAU VICTA

AUAYAN CITY, Isabela—Age is never an excuse not to catch up with new trends and to stay fit.

Truly, life doesn’t slow down after retirement; it just gets better.

SM City Cauayan on March 10, started its Seniors Day at the mall with its Senior Citizens Movement program. SM City Cauayan invited elderly to participate in its program where they can have a zumba session.

SM City Information Officer Krystal Gayle Agbulig said the Senior Citizens Movement aims to make the elderly stay fit and also to enjoy the new trends to become fit. It’s also a medium to establish socialization among the senior citizens and the younger generation. More so, it’s an initiative to make the seniors feel included in the activities of the mall.

Agbulig also set to conduct livelihood trainings and gadget literacy sessions among senior citizens in the coming months.

Continuously, SM strives to ensure the senior citizens to become well-integrated in the community through its programs that encourage the elderly to be more active, engaged and social, Agbulig said.

Seniors Day at the Mall is one of the Elderly Care programs to appreciate and celebrate the senior citizens.

It is one of the programs of SM Cares, a division of SM Foundation, the corporate social responsibility arm of SM Group of Companies, Agbulig said. PNA

Shopping

A BusinessMirror Special Feature

www.businessmirror.com.ph

Monday, March 16, 2015

A9

A PASSAGE TO INDIA AT L’INDOCHINE

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HE crafts of India are diverse, rich in history and religion.

Reflecting the influence of different empires, Indian crafts are part of culture and tradition within rural communities.

The adventure continues as L’Indochine’s takes us to a passage to India in its latest collection of expertly curated and exquisitely designed jewelry, as well as fashion and home accessories.

In India ornaments are made practically for every part of the body. In ancient times, rajahs and majarajas rivaled each other to possess the most exquisite and magnificent pieces of jewelry.

Different regions have their own unique jewelry making styles—Jaipur is famous for the art of enameling or meenakari; Orissa and Andhra Pradesh are known for fine filigree work done in silver; Nagercoil is renowned for its temple jewelry. A wide variety of silver beads are found all over India, especially in Rajasthan, Gujarat, Madhya Pradesh, and Himachal Pradesh. L’Indochine’s

collection of brass bangles, statement necklaces, and dangling earrings reflects this rich tradition.

India’s textile tradition, on the other hand, is varied, rich, and can be traced back to the Indus Valley civilization. The past traditions of textiles and handlooms can be seen amongst the motifs, patterns, designs, and the old techniques of weaving still used by Indian weavers today.

Silk fabrics from south India were exported to Indonesia during the 13th century. India also exported printed cotton fabrics to European countries and the Far East before the coming of the Europeans to India.

During colonial times, the British East India Company traded Indian cotton and silk fabrics, including the

BRASS bangles

COTTON silk crinkled scarves

GREEN, amber and red glass metal lanterns

famous Dacca muslins.

L’Indochine’s Indian collection weaves wonders with silk scarves; pillow cases with block prints; and quilts and blankets using mirror embroidery.

Traditional techniques and modern ideas also make unique statement home accessories like fabric woven chests, tables, and benches.

The art of metal work, meanwhile, has flourished in India for over 5,000 years and today can be seen richly engraved iron and brass bowls, samovars, plates, and trays from Kashmir; as well as brass items with intricate etching

from Uttar Pradesh.

Jaipur is the main center for brass engraving and lacquering in Rajasthan; while the art of koftagari or damascening work is practiced in Alwar.

L’Inodchine’s brass, metal, and glass lanterns will bring a cozy ambiance as well as a touch of the exotic to your home.

Whether you’re planning to add a touch of the exotic to your lifestyle or searching for an exquisite gift, join us in our journey and check out the India collection at L’Indochine stores located at the 3rd level of SM Aura Premier and at the 4th level of SM Mega Fashion Hall.

GREEN, amber and red glass metal hanging lanterns

GOLD, red and amber glass metal lanterns

FABRIC woven chest

EXQUISITELY embroidered bed cover.

Opinion BusinessMirror

A10 Monday, March 16, 2015

editorial

Is China crumbling?

A

N essay, titled “The Coming Chinese Crackup,”

by David Shambaugh was published in the Wall Street Journal on March 6. Shambaugh, a professor of international affairs and the director of the China Policy Program at George Washington University, gives an opinion and analysis and should not be taken lightly. He knows China and its government extremely well.

In fact, the essay should be required reading for all Philippine political leaders, in light of the fact that foreign relations conducted by our government is usually all show for domestic consumption. The history of Philippine foreign policy has been mostly efforts to keep our overseas workers employed and safe and some focus on international trade.

Complaining about and even going to the United Nations over our territorial disputes with China is not proactive foreign-policy application any more than during the presidency of Corazon Aquino, when the thrust was state dinners and lots of smiling to get more foreign aid.

While it is necessary to tread a sometimes delicate path with China, the truth is the Chinese hold all the cards and they are Aces, no matter what the public pronouncements from either side happen to be.

The greatest concern from the Philippines, however, may be in internal political struggles occurring in China.

Shambaugh writes, “Despite appearances, China’s political system is badly broken, and nobody knows it better than the Communist Party itself. He [Xi Jinping] is determined to avoid becoming the Mikhail Gorbachev of China, presiding over the party’s collapse. But, instead of being the antithesis of Mr. Gorbachev, Mr. Xi may well wind up having the same effect. His despotism is severely stressing China’s system and society—and bringing it closer to a breaking point”.

Five points of analysis are given in the essay.

First, China’s wealthy elite are ready to bail out and leave at any time, reminiscent of the last years of the Marcos presidency. Second, political repression against dissidents, the press, the Internet and foreign NGOs is increasing every month.

Shambaugh, based on his trips to China, says that even regime a loyalists are just “going through the motions” of governance.

On the issue of the fight against corruption, Xi’s campaign is turning out to be at least as much a selective political purge as an antigraft campaign as he goes after supports of former Chinese leader Jiang Zemin, who still holds considerable influence.

Finally, China’s economy “is stuck in a series of systemic traps, from which there is no easy exit” Shambaugh says.

While acknowledging that making predictions about a nation as unpredictable as China is difficult, Shambaugh concludes, “I wouldn’t rule out the possibility that Xi will be deposed in a power struggle or coup d’état”.

The Philippines has too often pursued a ‘personality-based’ foreign policy, particularly with China, whose leaders stay in power for many years. It is time to cultivate relationships more deeply into the Chinese power structure. Who knows who might be the next boss and how soon?

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BusinessMirror A broader look at today’s business Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief

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Associate Editor News Editor City & Assignments Editor Special Projects Editor

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Employment rate rises Atty. Jose Ferdinand M. Rojas II

RISING SUN

T

HE Philippine Statistics Authority announced last week that the employment rate increased since January 2014 for a year-on-year (YOY) addition of 1.04 million workers to the employment force.

The employment rate grew during that period by 2.8 percent to 93.4 percent, or a total of 37.5 million employed.

This is a fourfold hike over the 0.8-percent increase, or 281,000 new jobs created from January 2013 to 2014.

According to the January 2015 Labor Force Survey, from January 2014 to January 2015, employment grew over all classes of workers, except those in family-owned businesses.

Across all regions, the YOY unemployment rate fell to 6.6 percent, from 7.5 percent, or, in number terms, down by 334,000 to 2.6 million.

The underemployment rate dropped to 17.5 percent from 19.5 percent, a reduction in underemployed workers from 7.1 million to 6.5 million.

The unemployment rate among the youth (15 to 24 years old) fell from 17.3 percent in January 2014 to 15 percent in January 2015.

The growth was primarily driven

HOM

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regional offices

n DXQR -93dot5 HOME RADIO CAGAYAN DE ORO STATION MANAGER: JENNIFER B. YTING E-MAIL ADDRESS: homecdo@yahoo.com ADDRESS: Archbishop Hayes corner Velez Street, Cagayan de Oro City CONTACT NOs.: (088) 227-2104/ 857-9350/ 0922-811-3997 n DYQC -106dot7 HOME RADIO CEBU STATION MANAGER: JULIUS A. MANAHAN E-MAIL ADDRESS: homecebu@yahoo.com ADDRESS: Ground Floor, Fortune Life Building, Jones Avenue, Cebu City CONTACT NOs.: (032) 253-2973/ 234-4252/ 416-1067/ 0922-811-3994 n DWQT -89dot3 HOME RADIO DAGUPAN STATION MANAGER: RAMIR C. DE GUZMAN E-MAIL ADDRESS: homeradiodagupan@ yahoo.com ADDRESS: 4th Floor, Orchids Hotel Building, Rizal Street, Dagupan City

CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001 n DXQM – 98dot7 HOME RADIO DAVAO STATION MANAGER: RYAN C. RODRIGUEZ E-MAIL ADDRESS: home98dot7@gmail.com ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996 n DXQS -98dot3 HOME RADIO GENERAL SANTOS STATION MANAGER: AILYM C. MATANGUIHAN E-MAIL ADDRESS: homegensan@yahoo.com ADDRESS: Ground Floor, Dimalanta Building, Pioneer Avenue, General Santos City CONTACT NOs.: (083) 301-2769/ 553-6137/ 0922-811-3998 n DYQN -89dot5 HOME RADIO ILOILO STATION MANAGER: MARIPAZ U. SONG E-MAIL ADDRESS: homeiloilo@yahoo.com ADDRESS: 3rd Floor, Eternal Plans Building,

Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995 n DWQA -92dot3 HOME RADIO LEGAZPI STATION MANAGER: CLETO PIO D. ABOGADO E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal St., Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992 n DWQJ -95dot1 HOME RADIO NAGA STATION MANAGER: JUSTO MANUEL P. VILLANTE JR. EMAIL ADDRESS: homenaga@yahoo.com ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993

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TO allow the solemn observance of the religious traditions of Holy Week, the Philippine Charity Sweepstakes Office (PCSO) will not sell tickets nor hold draws from April 2 (Maundy Thursday) to April 5 (Easter Sunday) for all PCSO games, including Lotto and Lotto Express.

We invite the public to continue playing PCSO games on April 6, when regular selling and draws resume.

Thirty percent of the revenue from these games is allocated to PCSO’s Charity Fund, which goes to medical- and health care-related assistance for our kababayan and

China can’t get enough bitcoins William Pesek

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by the services sector that grew 3.9 percent for a 766,000 net employment gain in January 2015.

The survey, however, excluded data from Region 8, the area ravaged by Supertyphoon Yolanda (international code name Haiyan). The disaster caused labor displacement and made data gathering difficult.

The hike in the employment rate is yet another indicator of a vibrant economy, one that has grown by leaps and bounds after the Aquino administration began enacting widespread reforms that have garnered public trust in the government and a surge in investor interest in the country.

Another indicator of a healthy economy is the stock market. On Thursday the Philippine Stock Exchange index gained 49.12 points to close at 7,839.82.

Likewise, foreign portfolio investments—“hot money”—posted a net inflow of $1.19 billion in February 2015, compared to the $354-million

net outflow in February last year, while gross inflows also in February 2015 were pegged at $2.549 billion, up from $1.497 billion a year ago.

Consumer spending is also robust, as indicated for one by the rise in auto sales recorded by the Chamber of Automotive Manufacturers of the Philippines and the Truck Manufacturers Association.

Sales in all vehicle product categories, according to these two industry groups, rose by 22.6 percent in February 2015 YOY. In February alone, 20,663 units were sold, compared to 18,662 sold in January this year for an increase of 11 percent over that one-month period.

A stronger economy is more capable of generating jobs and livelihood opportunities, thus the marked growth that looks to be sustainable given the resiliency and energy of the country’s economy.

BLOOMBERG VIEW

A

S if Zhou Xiaochuan didn’t have enough to worry about, China’s central bank governor now has a bitcoin problem on his hands. In a new report, Goldman Sachs says the yuan is now used in 80 percent of transactions into and out of the cyber currency, topping the dollar, yen and euro. Given that the Communist Party’s highest priority is stability, and the rampant use of bitcoin represents nothing if not the opposite, it’s probably only a matter of time until Beijing tries to crack down.

It wouldn’t be the first time. In December 2013—at a time when the yuan accounted for about 50 percent of bitcoin transactions—Zhou clamped down hard on the nascent payment system, citing concerns that it was enabling money laundering and undermining capital controls. On December 5 the People’s Bank of China (PBOC) barred financial institutions from handling bitcoin transactions, concluding it isn’t a currency with “real meaning.” A few months later, in March 2014, the PBOC went further, ordering banks and payment companies to close the trading accounts of more

than 10 bitcoin exchanges.

But bitcoin traders continue to show up the PBOC. As Goldman Sachs points out, the trading volume inside China has risen markedly–even as bitcoins plunge in value (from about $1,100 in late 2013 to around $300) and lose cachet elsewhere. “Bitcoin,” writes Goldman Sachs analyst James Schneider, “has momentum in China.”

What gives? Some people in China are surely buying bitcoin to engage in relatively innocent forms of financial speculation. But they are probably outnumbered by the people, who are

using it to move yuan out of the country, while circumventing Beijing’s currency controls. That’s partly because China’s broader economic slowdown provides fewer lucrative investment opportunities. But it’s also because of President Xi Jinping’s ongoing crackdown on corruption, which has made it harder to launder ill-gotten funds. (Hong Kong money changers used to be the laundering method of choice, but are no longer readily available.) Bitcoin’s value gyrates too wildly to be a viable transactional unit, but it’s proving to be a nifty way to move money across borders beyond the watchful eye of the government.

Bitcoin’s surging popularity in China—despite the attempts to crack down against it–underscores how fragile the world’s second-biggest economy is at present. Data released on March 10 showed industrial output since the beginning of the year was at its slowest pace since 2009, rising just 6.8 percent in January and February. Deflation also seems to be on the horizon.

As growth slows, the risk of a hard landing for the Chinese economy increases. Officially, Beijing is on the hook for about $3 trillion of regional debt. (The Japanese investment bank Mizuho Securities says $4 trillion is closer to the mark.) What’s

the agency’s other social programs. nnn

LAST Saturday I was among the guests at the opening of the art event “Jaime Gubaton in Negros” at the new location of Charlie’s Art Gallery in Mandalagan, Bacolod City.

This is the first one-man exhibition at the new space, with 20 works displayed on the walls of the venue, Italia Restaurant.

Gubaton’s style have been described as being “surreal and somber,” but a discerning viewer may find themes of celebration and tradition in the works, which have for their subjects the local surroundings and cultural practices, such as the much-vaunted Masskara festival of Negros Occidental.

Gubaton won the grand prize in the PLDT-sponsored 16th Visual Arts National Competition and the grand prize in the Art Petron National Student Competition, among other prizes, and was named University of the East (UE) Artist of the Year.

He graduated from UE in 2003 with a degree in fine arts and is currently a member of the Saturday Artists Group.

We look forward to more events at Charlie’s Art Gallery, which is one of the foremost venues for art in Bacolod City, having featured the shows of other prominent practitioners of the visual arts.

Atty. Jose Ferdinand M. Rojas II is the vice chairman and general manager of the PCSO.

much harder to estimate is what the financial fallout will be from the more than $20 trillion of credit churned out by the shadow banking system between 2008 and 2014. If large numbers of borrowers start defaulting on their debt—and analysts estimate that’s only a matter of time–Beijing will almost certainly be on the hook for massive bailouts.

With the market thought to be capped at about 21 million bitcoins, it’s unlikely the currency will pose an overwhelming challenge to the PBOC. But what about other digital currencies created inside China? In November Wired magazine explored the rise of darkcoin, which is fast becoming the chosen medium of drug merchants and others active on China’s black market. It’s not hard to imagine the development of other such cryptocurrencies with Chinese characteristics.

When China has previously faced money laundering problems, it had clearer solutions at its disposal. In 2014, for example, Beijing clamped down hard on Macau, the former Portuguese enclave whose casinos had become a favored laundromat for ultra-rich Chinese. But now that China’s facing a stealthier threat in bitcoin, its options are more limited.

Zhou is undoubtedly aware of the problem posed by bitcoin, but he may not yet know what he should do about it.

Opinion BusinessMirror

opinion@businessmirror.com.ph

We need to remember Archbishop Romero

The age of China

By Randy Jurado Ertll

W

Teddy Locsin Jr.

Tribune News Service

E need to remember Archbishop Oscar Romero 35 years after his assassination on March 24, 1980.

Romero’s political evolution took place once he was named to head the Catholic Church in El Salvador.

He was transferred to the capital San Salvador, where he was met with much antagonism and dislike. It was not just Roberto D’Aubuisson (the politician who hatched the conspiracy), the death squads and some members of the Salvadoran elite, who murdered him. Many others were complicit, too.

While in the capital, leading the church, he gained incredible spiritual strength to defend the poor and the voiceless. Millions would listen to his homilies on radio.

The people who truly embraced Romero were the poor campesinos, who attended his mass and those who had the privilege to get to know him when he would visit their villages. Romero came from a middle-class background but he purposely chose to live a humble life.

Romero was not afraid to die. He was a valiant man, who did not accept bodyguards. He consciously chose to give his life for the poor.

But he was very afraid of the demons that were being unleashed upon the Salvadoran populace. He knew much blood would be spilled. He even risked his life by having a dialogue with the guerrilla leaders, asking them to avoid using violence.

He tried everything in his power to stop the oncoming bloodbath.

Before his assassination, Romero visited Pope John Paul II, who snubbed Romero.

Romero was deliberately made to wait an inordinate amount of time and relegated to a long line to meet the pope. The pope

chastised Romero and ordered him to stop speaking up for the rights of the poor and involving himself in political issues.

Romero returned heartbroken to El Salvador. But he still continued to denounce the regime’s human-rights abuses and killings.

He made up his mind that he would give his life for the persecuted Salvadoran people, even if the Vatican refused to acknowledge the atrocities.

Ironically, the same church that turned its back on Romero is all set to venerate him.

The Catholic Church will formally beatify Romero on May 23 in San Salvador, one step short of sainthood.

Even if not a saint, Romero did actually conduct countless miracles. He saved the lives of numerous people who would otherwise have been tortured and killed. He sheltered and protected innocent victims in his churches.

He fed the poor, clothed them and he spoke up for them, knowing that he would possibly be killed. In fact, the miracle is that Romero has been now recognized as an international hero by the Catholic Church, when before he was demonized by many of his fellow clergy.

Finally, the church is atoning for its sins toward him.

Romero taught us all an invaluable lesson: He stood up to bullies and he did not turn his back on his people.

Archbishop Romero was a hero and martyr. We honor him on his assassination anniversary by remembering all the good that he did.

A

Free fire

TOP American admiral told American congressmen that China has more submarines than the US, though, he admits, the Chinese subs are inferior in quality to the American.

Just the same he described their performance as amazing, both diesel- and nuclear-powered. For example, China has carried out maneuvers in the Indian Ocean lasting 95 days. That’s a long time to hold your breath. Indeed, there is a line after which quantity matches quality, and soon exceeds it as the Chinese destroy more American warships than the latter can sink Chinese submarines.

But US submarines are made by Huntington Ingalls and General Dynamics, which have long had the Pentagon in their pockets, if only because those make more of

them for longer produce the best submarines so there is something to be said for oligopoly. So what the admiral said must be taken with a grain of salt and there is

Monday, March 16, 2015 A11

plenty of that in the ocean.

But, true or not, if increasing Chinese parity is what the US navy believes, the US will act on that belief. Therefore, the admiral’s real message to the Philippines is not to be even more pro-American than we already are in the struggle for supremacy in the South China Sea. Laboring under its own belief that it faces a formidable foe, we should expect the US to balk at fighting for us over Chinese claims in the South China Sea. Yet this is not a problem.

Thanks to the Internet, if China attacks and the US does not instantly counter-attack we simply welcome China, instead of fighting her, breaking out the champagne and shouting kampie, instead of pulling out the guns; throwing confetti, instead of grenades. That will stop the attack on top of which we may finally get an MRT that

works, a rail system spanning the length of our country, and superhighways and bridges of the gigantic kind that China builds effortlessly without a second thought about the expense.

Sometimes it pays to lose a war before fighting it; a vast improvement over the German and Japanese experience in World War II. But only if we are fighting the modern armed forces of 1.2 billion Chinese; not if we are conceding victory to a repeatedly defeated ragtag raghead enemy to whom Deles and Ferrer would have us surrender without a fight. No, here we are talking about the second leading economic, technological and, very soon, military power in the world. In a way we are so lucky to be living in the age of China: There are so many more options; the most obvious being the most delightful.

Financial inclusion should not end with poor Filipinos FORTUNE LIFE INSURANCE C0. INC.

By Emmanuel F. Dooc Insurance Commissioner

2014 (32 Companies)

V

IEWING the crowd from where I stand and the hall teeming with people, I can definitely say this event has drawn larger audience than the much ballyhooed MayweatherPacquiao press conference. This doesn’t surprise me because Ambassador Antonio L. Cabangon Chua is a better draw than the Pacquiao-Mayweather combination. Ambassador Cabangon Chua has also notched more knockouts in his business career than Mayweather’s record of 47 knockouts.

Despite the difficult year, Fortune

Life is one of the few companies that posted a positive growth last year. It generated P1.055 billion in premium income in 2014, slightly higher than the P1.041-billion premium generated in 2013. What makes it remarkable is that Fortune Life does not sell variable life products. It has no single premium revenue that largely accounts for the substantial revenues of the top-producing companies. It ranked No. 15 among the 31 life companies that submitted their unaudited financial reports. It is currently one of the Top 5 Filipino companies in the country.

I should commend the management of your insurance group.

Both your life and nonlife companies performed well last year.

Fortune Gen’s net premium grew from P296,788,995 in 2013 to P407,928,195 in 2014, or an increase of 37.44 percent.

Unofficially, since the audited financial statements are not yet submitted, Fortune Gen inched 2 places higher in the ranking of non-life companies—based on net premium written—from No. 23 in 2013, up to No. 21 in 2014. Together with good performance of Fortune Life, your achievement last year is a good send-off to our well-loved former Commissioner Armando Ansaldo, former Chairman of the Boards of Fortune Life and Fortune Gen for several years.

I’ve been your commissioner since January 2011 and I was given a fresh mandate of six years starting December 2013. It has been my good fortune, and for that I am eternally grateful for having dedicated leaders like Ambassador Cabangon Chua and insurance professionals like Arnold

Cabangon and Evelyn Carada working with me during my watch. My success at the helm of the Philippine insurance industry reflects the quality and competence of the leaders of the life industry. I only bask in the glow, glory and greatness of industry leaders.

As your regulator, I’ve been thrust into a position of leadership and find myself at the driving edge of our industry’s efforts to introduce initiatives and reforms. But I owe it all to you. Your collective support and guidance during critical times have emboldened me to pursue reforms we have successfully undertaken.

If my experience in regulating our industry has taught me one valuable lesson, it is this: “The life industry is fortunate and unique in having unselfish and dedicated leaders and professionals, who are willing to sacrifice personal glory in favor of the common wealth and public interests.”

You do not have to be in front to lead.

I may sound presumptuous and I know that others may disagree with me but it is my dream to make the decade of 2010 to 2020 as the the insurance industry’s “Golden Age”.

With the Fortune Group of Insurance Cos. and its leaders behind me, I have no doubt this will become a reality.

Let’s look at your numbers by comparing your 2009 year-end numbers with your 2014 year-end figures.

They say numbers don’t lie but, if such were the case, then the future of the insurance industry appears rosy.

We have a burgeoning population and, as early as September, we have breached 100 million. Majority of our people are young, educated and employable. Every year our colleges

2009 (35 Companies)

Fortune Life TotalLife Industry

Fortune Life

(In Billion Pesos)

DOOC and universities produce an average of 500,000 graduates who are raring, eager and willing to join the workforce. Let us not look at them as an army who will swell our jobless statistics, but as employable human resources who will become productive members of our society. Once they land their jobs, they will be your target consumers and, eventually, your proud policy-owners.

The Philippines has a very low savings rate compared to other Association of Southeast Asian Nations (Asean) members. While this is a weakness, we should also view it as an opportunity.

In a 2013 study, only roughly a fourth of the households surveyed have savings and only two-thirds of them have bank accounts. So a significant number of Filipinos just keep their money under pillows. Convince them it is a lot safer if Fortune Life keeps their money in the form of premium.

Among our population, the overseas Filipino worker (OFW) households have reported better saving habit, with about 42.5 percent of them setting aside a portion of their income to savings. Our gross domestic savings as a percentage of gross domestic product was only 15.9 percent. In comparison, Thailand’s at 29.5 percent; Malaysia’s at 44.3 percent; and Singapore’s at 49.4 percent. In 2012 our savings rate dipped to 15.3 percent.

Our economy is propped up by two major industries: the OFW, which reported $24 billion in remittances; and the business-process outsourcing and information technology-sector, which contributed $16 billion to our economy. These two sectors alone could be a rich source of productive investments if

Total Life Industry

(In Billion Pesos)

Assets Networth

3.23 0.71

855.28 122.13

1.91 0.56

419.53

Premium income

1.06

157.83

0.69

57.24

Net Income

0.30

14.01

0.21

11.95

your industry can tap them.

Some say there’s a dearth of financial instruments to capture savings, but I personally believe the insurance industry has a lot to offer. There are definitely distinct advantages in buying insurance, particularly if it is coupled with an investment scheme.

You have competitive products.

You provide not only insurance protection but financial security. You have competent management to administer and render professional services to your clientele. What you need is to promote financial literacy among Filipinos, particularly the poor, so they, too, can benefit from our improving economy.

In the words of US President William Jefferson Clinton: “Let’s build an American home for the 21st century, where everyone has a place at the table and not a child is left behind. In this world and the world of tomorrow, we must go forward together or not at all.” That is financial inclusion in action.

Authors Daron Acemoglu and James Robinson described a regime opposite to an inclusive economy as extractive economy—extractive because the institutions are designed to extract incomes and wealth from one sector of society to benefit a different sector.

For centuries, Philippine society was characterized as being an extractive economy: the rich robbing from the poor; the mighty taking advantage of the powerless; and, the government exploiting the masses to keep the favored few, the political dynasties, in power and continue their undemocratic rule, where the poor are further taken advantage of and unabashedly used to keep privileged positions or transfer these to family members and cronies.

71.16

The industry is fast emerging as a major pillar of our economy. Our total assets has breached the P1trillion mark last year. Our total investment has exceeded P850 billion.

Our total benefit payment is much greater than the total conditional cash transfer paid to the poor annually. We, the insurance industry, can make a difference in the lives of our people, particularly the poor.

Let us set our vision high. Financial inclusion does not end with the poor.

It does not stop with microinsurance.

In insurance, our dream is not simply to replace the poor man’s shanty with another shanty every time his dwelling unit made of light materials is blown to smithereens when a signal No. 2 storm hits his village. It does not mean providing a two-week food supply or a bag of used clothes.

We want them to move to a safer place, with livelihood and social services available—schools, health centers, playground, market and other basic facilities, which make up a sustainable and resilient community. So that when they have finally settled and the head of the families and their children of working ages find jobs and actually “winning bread,” they can send their children and siblings to schools and get training and education that will prepare them for their life ahead; better prepared and better equipped than their parents and elder siblings to take their rightful place in the sun. That, for me, is the object of financial inclusion.

We should be ready at all times to give them the insurance services that suit their needs until they become financially independent.

Without any modicum of doubt, I believe promoting financial inclusion would be on top of your

business agenda. Your advantage is that you can call on the support of your affiliates and subsidiaries and tap the resources of the Fortune Group of Cos. to deliver financial inclusion.

Asean integration would be implemented by the end of this year.

Our domestic insurance players should be prepared to meet their Asean counterparts head on to be fairly competitive. We have fortified your capital, introduced regulatory reforms and amended our Insurance Code to keep pace with the best international practices.

We have reviewed and reformulated the RBC framework, migrated to gross premium valuation, adapted the Asean Scorecard and Corporate Governance, aligned our financial reporting with international accounting standards and liberalized our investment rules to allow insurance companies to maximize their investment yields among others to strengthen our regulatory framework and expand further the insurance industry.

Trust is the main ingredient of insurance.

You may not know it but Ambassador Cabangon Chua provided for free the pope mobile used by Pope Francis during his pastoral visit to our country. Obviously satisfied with his experience, His Holiness requested Ambassador Cabangon Chua to ship the vehicle to the Vatican for his permanent use.

If the pope trusts his life and security to Fortune Life, what life insurance company can provide you better insurance and protection?

There is so much we can do together to further grow our industry and serve the interests of the public.

John Wesley, one of the foremost thinkers of our time, said: “Do all the good you can, by all the means you can, in all the places you can, at all the times you can, to all the people you can, as long as ever you can.”

We can. Just do it!

Mabuhay ang Fortune Life.

Abridged version of speech delivered during the Fortune Life Annual Awards Night at The Citystate Tower Hotel on March 12.

2nd Front Page BusinessMirror

A12 Monday, March 16, 2015

PLDT expanded market share to 60% last year

By Lorenz S. Marasigan

T

he telecommunications business of tycoon Manuel V. Pangilinan claimed the lion’s share of the broadband market in 2014, cornering roughly 60 percent in end-December.

Philippine Long Distance Telephone Co. (PLDT) President and CEO Napoleon L. Nazareno said his company posted a 19-percent increase in broadband subscribers to 4 million subscribers in 2014, following sustained expansion in its fixed and wireless broadband subscriber base.

“We are pleased to see that the PLDT Group remains the preferred broadband provider in the country, whether among corporates, at home, or on the go, as we continuously strive to bring the most innovative products and services to our subscribers that allow them to live connected,” he said on Sunday.

The PLDT Group, which includes PLDT Alpha Enterprise, PLDT SME Nation, PLDT Home and mobile subsidiaries Smart Communications and Sun Cellular, cornered almost 60 percent of total broadband subscribers in the country.

The growth, Nazareno added, was backed by PLDT’s “formidable integrated network,” which allowed the telco to offer a variety of broadband plans that suit the customer’s requirements.

PLDT spent over P34.8 billion in capital expenditures in 2014, as it expanded its fiber network to nearly 100,000 kilometers, making it the most extensive, robust and resilient network in the country. Such network is needed for reliable broadband services that can simultaneously deliver voice, video and data offerings at faster speeds and larger capacities through various devices from computers, tablets and cell phones, to television sets.

In anticipation of greater data usage, PLDT is planning to spend another P39 billion in capital investments this year.

PLDT’s total fixed broadband subscribers jumped by 13 percent to 1.1 million, representing over 70 percent of the total market, and now accounting for almost 50 percent of the fixed-line subscriber base.

Smart broadband subscribers increased by 21 percent from its year-ago level to over 2.3 million in 2014, about 1.8 million of whom were on Smart Broadband’s prepaid service. On the other hand, Sun Cellular broadband subscriber base grew by 24 percent to over 676,000.

On combined basis, the PLDT group’s wireless broadband-subscriber base of nearly 3 million accounts for about 56 percent of the market.

Its wireless units Smart and Sun See “PLDT,” A2

www.businessmirror.com.ph

Election year could be bad for economy L

By Bianca Cuaresma

ocal output measured as the gross domestic product (GDP) was seen slowing to only 6 percent in 2016, an election year, from forecast growth averaging 6.3 percent this year on fears of policy discontinuity likely prompting investors, local or foreign, to hold back a little, analysts at DBS Bank said.

“The presidential election is due in 2016 and there are some concerns of policy continuity,” the regional lender said in commentaries on the Philippines and its prospects between now [when the global price of oil is low] and in 2016 [when the $272-billion economy shall have benefited even more from the fiscal and monetary-policy adjustments

adopted the past many years].

It said the Philippines will likely stay on the path to high growth, supported by low inflation until at least 2016. But it quickly added that uncertainty looms around the next presidential electoral cycle in 2016.

However, while the prospects for

growth remains at optimum, the growth target set by the government for 2015 and 2016 at 7 percent to 8 percent may be too high for the Philippines to hit.

In its quarterly report on global economies, DBS Bank retained its forecast GDP growth for the Philippines at 6.3 percent this year, and at 6 percent in 2016.

The Philippines section in that report, titled “PH: Staying Strong”, showed the bank’s optimism for the country as the forecast numbers were supported by high fiscal spending and steady private consumption, plus the strong and steady rise of the manufacturing sector, which are all expected to boost the economy this year and in 2016.

The sustained growth momentum was seen enhanced by a relatively low-inflation environment averaging 3.2 percent this year and slightly higher to 3.8 percent next year.

The forecast for growth, however, show that the country may yet again fall short of the country’s growth targets of 7 percent to 8 percent for 2015 and 2016.

See “Election,” A2

SUBSIDIES TO GOCCs UP 21% TO P80.4B IN 2014

F

unds for the construction and upkeep of the country’s health infrastructure, as well as for the housing requirements of millions of Filipinos, accounted for the bulk of subsidy money spent on the sectors, data from the Department of Finance (DOF) show.

Total government subsidies extended by the national government to government-owned and -controlled corporations (GOCCs) surged by 21 percent in 2014.

Data from the DOF show total subsidies in 2014 amounting to P80.44 billion.

This was P14.11 billion higher than subsidies granted in 2013 totaling only P66.33 billion and an increased from the past three years as the subsidies spent in 2012 amounted only to P42.64 billion.

The Philippine Health Insurance Corp. remained the biggest recipient, getting a total of P35.33 billion in 2014, followed by the National Housing Authority, which received P19.06 billion in subsidies.

The Philippines has a rather grave housing backlog, the deficiency of which has ballooned over the past 10

Debt swap. . .

David Cagahastian

Continued from A1

debt market is crucial to a government that’s been relying less on overseas borrowing and to fund the nation’s companies investing in record amounts, Tan said.

The ratio of domestic borrowing to total debt may increase to 88 percent next year and to 89 percent in 2017, from a planned 86 percent this year, according to presentation materials e-mailed by Tan. Gross borrowing is projected to rise to P760.3 billion in 2016 before easing to P688.08 billion, based on a medium-term plan in Tan’s presentation.

The average daily bond-trading value fell to P18.2 billion last year after rising above P20 billion in 2012 and 2013, according to data compiled by Bloomberg. While volumes recovered in January, they were back to low levels again since February, Tan said.

Repo, tax-exempt

years from some 2 million units to more or less 5.5 million, based on privatesector estimates.

The other GOCCs, which received at least a billion in government subsidies, are National Electrification Administration (P5.65 billion); National Food Authority (P4.25 billion); Philippine Deposit Insurance Corp. (P2.79 billion); Philippine Coconut Authority (P1.97 billion); Philippine Crop Insurance Corp.

(P1.15 billion); and National Irrigation Administration (P1.07 billion).

Some of the other GOCCs, which received big subsidies from the national government, include Philippine Postal Corp. (P968 million); National Power Corp. (P960 million); People’s Credit and Finance Corp. (P900 million); Social Housing Finance Corp. (P799 million); Social Security System (P772 million); Philippine Rice Research Institute (P547 million); National Home Mortgage Finance Corp. (P500 million); Tourism Promotions Board (P500 million); Philippine Children’s Medical Center (P365 million); and Philippine Institute for Development Studies (P348 million).

The Treasury is in discussions with the central bank and the Securities and Exchange Commission for the interbank Specials Repo program that will improve pricing of government securities, Tan said. The Bureau of Internal Revenue agreed in January to exempt the repos from documentary stamp tax, as long as these are transacted on a “true sale basis.”

“A repo will help address market-pricing inefficiencies, especially when interest rates are going up,” said Deanno Basas, investment director at ATR KimEng Asset Management Inc. in Manila, which has about P90 billion in assets. “Repos provide hedging alternatives, which should deepen market liquidity.”

Market makers

The government will also establish a primary dealer system to create “market makers, who will help provide liquidity” once the repo market is functioning, said Tan, 60, who returned as treasurer this year after a two-year stint as executive director at the World Bank.

The Treasury will probably decide on Monday if the market is ready to start trading with state-run pension funds and other tax-exempt companies holding about P800 billion, or a third of sovereign debt, Tan said. These investors will be allowed to buy and sell bonds for the first time under nonrestricted trading originally planned to start in October. There are no plans yet to sell new retail peso bonds or raise the remaining $500 million from this year’s overseas debt approval, according to the treasurer, who said there’s no need for cash. The budget deficit was less than 30 percent of the P266.2-billion ceiling for 2014. Bloomberg News