Businessmirror march 22, 2015 by BusinessMirror

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U.N. Media Award 2008

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A broader look at today’s business

n Sunday, March 22, 2015 Vol. 10 No. 164

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S&P: Philippine banking system most resilient in Asia-Pacific region

week ahead

ECONOMIC DATA PREVIEW

Foreign currency

n Previous week: Dollar strength pulled the movements in the foreign-exchange trading platform this week, causing the peso to lose value and go near the 45 territory. The deceleration started at the week’s start as it traded at 44.415 to a dollar on Monday, versus the previous week’s close of 44.3 to a dollar. This decelerated further to 44.55 to a dollar on Tuesday and at 44.75 to a dollar on Wednesday. The peso slightly corrected to 44.72 to a dollar on Thursday, and ended the week at 44.815 to a dollar. The total traded volume slightly rose during the week at $3.176 billion, compared to $3.161 billion in the previous week. The average value of the peso during the week is at 44.65 to a dollar, sharply decelerating from the previous week’s average of 44.274 against the dollar. n Week ahead: Markets will still likely watch out for economic-data releases from advanced economies, particularly the United States, that will likely dictate the movement in the coming week, as the local central bank’s decision of an unchanged monetary-policy stance in its upcoming Thursday meeting has already been factored in by markets.

Monetary-policy stance March 26, Thursday

n Previous monetary-policy stance: In its first monetary-policy meeting for the year, the Monetary Board (MB) decided to keep its key policy rates at 4 percent for the overnight borrowing, or reverse repurchase facility, and 6 percent for the overnight lending, or repurchase facility. The special deposit accounts interest rates were also kept steady at 2.5 percent, and the reserve requirement ratios were left unchanged for the meeting. Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said in his postMB meeting statement that the sevenman monetary policy-making board made the decision to maintain all policy levers unchanged based on its assessment that prevailing monetary-policy settings remain appropriate due to the lower trajectory of inflation for the year. n Upcoming monetary-policy stance: Economists polled by the BusinessMirror showed consensus in the view that the BSP will not change its monetary-policy stance in the March 26 meeting due to tame inflation dynamics and the uncertainty in oilprice movement and monetary-policy actions of advanced economies. The BSP is also seen to not join the wave of economies cutting rates to lift inflation number (see related story). Bianca Cuaresma

By Bianca Cuaresma

HE Philippine banking system remains the most resilient in the Asia-Pacific region, as indicated in the most recent assessment made by an international credit watcher. In a recent webinar, Standard & Poor’s (S&P) Ratings Services presented the heat map of the AsiaPacific Banking Outlook for 2015, in which the Philippines remained largely insulated against shocks in the local and international developments that may emerge in 2015. S&P assessed banking systems in terms of six risk factors—including a local economic slowdown; interest-rate increases in their own central banks; a property price drop in their jurisdictions; and a possibility of a senior creditor bail-in for international events—banks were gauged on the hazards of risks in the euro zone and in China.

Dollar drop is worst since 2011 as investors rethink Fed policy

In these six risk factors, the Philippine banking system scored a “limited impact” on four risk factors, “intermediate impact” on one risk factor and “high impact” on senior creditor bail-in. In particular, the euro-zone risks, China’s possible disorderly property adjustment, an interest-rate increase in the Philippines and a property price drop have a limited impact on the country’s financial system. A possible economic slowdown in the Philippines, meanwhile, has an intermediate impact for the country. Senior creditor bail-in—or the potential removal of government support, meanwhile, has a negative See “Banking System,” A2

Economists see no change in BSP monetary policies

CONOMISTS based here and abroad believe that the Bangko Sentral ng Pilipinas (BSP) will not change any of its current monetary policies in the second Monetary Board policy-stance meeting on Thursday, amid the divergence of global economic developments in the previous months. Seven bank economists shared an “unchanged” forecast for the central board’s meeting on March 26, very much like its other last three policy meetings. This, despite the fast-rising trend in central banks across the globe of cutting their rates down—mostly in a surprise move—owing to the steep decline of inflation caused by the very low prices of oil in the global market. “[There is] no compelling reason to change monetary-policy settings at this time. Inflation expectations are relatively stable and within the target inflation range, while economic growth is likely to retain the momentum of 2014 and see a modest acceleration, as domestic demands are likely to remain strong,” ING Bank Manila economist Joey Cuyegkeng told the BusinessMirror in a response to a query. Other economists also said that BSP Governor Amando M. Tetangco Jr. has laid out clear forward-guidance statements in his recent speaking engagements and accounts with the media that there will be no change in the upcoming policy meeting this month. “Forward guidance has been a hallmark of Tetangco’s career. They always let the market know what is on their minds. Comments from the governor and deputy governors affirm our view,” Bank of the Philippine Islands (BPI) economist Nicholas Antonio Mapa said. “As the governor himself said, there is no need for economic stimulus [read: cut in rates], despite some 20 central banks around the world cutting their policy rates because we continue to enjoy a robust growth, coupled with a benign inflation figure that is well within their

PESO exchange rates n US 44.6610

See “Monetary policies,” A2

he dollar slumped the most since October 2011, after the Federal Reserve (the Fed) reduced projections for interest-rate increases and expressed concern that the dollar’s surge is weighing on exports and inflation. See “Dollar,” A2

n japan 0.3697 n UK 65.8214 n HK 5.7558 n CHINA 7.2079 n singapore 32.1974 n australia 34.1132 n EU 47.5640 n SAUDI arabia 11.9083 Source: BSP (20 March 2015)

News

BusinessMirror

A2 Sunday, March 22, 2015

Banking system...

Continued from a8 Separately, Metro Pacific Investments Corp. (MPIC) is proposing to shoulder the upgrade costs of the train system and release the government from the bondage of paying billions of pesos in equity rental payments. The group of businessman Manuel V. Pangilinan, which earlier entered into a partnership agreement with the corporate owner of the MRT, intends to spend $524 million to overhaul the line. The venture would effectively expand the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. The multi-

rating impact on the country, which means that this event will likely result in a downgrade of rating in the sector. This is because the Philippines, as with other countries in the region, has a “highly supportive” government toward its own banking sector. This scenario, however, has a low probability of happening according to the ratings agency. All banking systems in the Asia Pacific have a “negative rating impact” on senior creditor bail-in risk factor, except Sri Lanka. Of all 15 banking systems in the Asia Pacific, only the Philippines had four out of six risk factors graded as with “limited impact.” This is followed by Sri Lanka, with three risk factors graded as such. Countries assessed by the S&P in the region included Singapore, Malaysia, the Philippines, Thailand, Indonesia, Vietnam, India, Sri Lanka, China, Hong Kong, Taiwan, Korea, Japan, Australia and New Zealand.

Monetary policies...

Dollar...

continued from A1

expectation and a relatively low money-supply growth rate,” Reynaldo Montalbo Jr., First Metro Investment Corp. senior vice president and head of financial markets group, likewise, told the BusinessMirror in response to a query. Other bank economists in the country, including Patrick Ella from the Security Bank and Banco de Oro, chief market strategist Jonathan Ravelas, likewise, aired their “unchanged” forecast for the BSP this Thursday. For international banks, meanwhile, both the Singapore-based DBS Bank and British bank Hongkong and Shanghai Banking Corp. also are on the “unchanged policy stance” boat for the coming meeting. In a previous research note, the DBS Bank said that the country is not likely to join its neighbor central banks in cutting rates. “The central bank will wait for more data to change its monetary stance. Given that both headline and core inflation picked up to 2.5 percent year on year in February, and there is plenty of uncertainty to keep the BSP vigilant [think Fed rate hike and volatile oil prices],” HSBC economist Trinh Nguyen said. The current monetary-policy stance of the BSP is at 4 percent for the reverse repurchase rate, 6 percent for the repurchase rate, 2.5 percent for the special deposits account interest rate and 20-percent reserve requirement ratio. Bianca Cuaresma

million-dollar expansion plan would double the capacity of the line to 700,000 passengers a day, from the current 350,000 passengers daily. It was submitted in 2011, but the transportation agency’s chief back then rejected the proposal. On the other hand, German firms Schunk Bahn- und Industrietechnik GmbH and HEAG Mobilo GmbH are seeking to place the whole train system under a massive transformation program to augment its capacity and to provide a safe and comfortable travel to commuters from the northern and southern corridors of Metro Manila. The P4.64-billion proposal, sub-

continued from A1

The US currency fell against all of its 16 major peers, as banks, including HSBC Holdings Plc., said the 20-percent surge since August is coming to an end. Economic reports next week may show inflation remains below the Fed’s target, giving the central bank more room to maneuver. “You always have to be careful with foreign exchange—it can move very quickly and you can’t imply anything from previous trends,” Charles St-Arnaud, senior economist at Nomura Securities International Inc., said by phone from London. “That’s what happened to the US dollar.” The Bloomberg Dollar Spot Index fell 2.2 percent this week to 1,195.01 in New York. The gauge is up 1.9 percent this month, and 5.7 percent this year.

The greenback slumped 3.1 percent this week to $1.0821 versus the euro, and fell 1.1 percent to ¥120.04. Hedge funds trimmed their bullish dollar futures positions to the least since December, according to Commodity Futures Trading Commission data. Net futures position betting on a stronger greenback versus eight major peers in this category reached a record 448,675 contracts in January.

Fed policy

Fed policy-makers on Wednesday lowered their median 2015 forecast for the federal funds rate to 0.625 percent from 1.125 percent three months ago. The slower projected pace of tightening boosted demand for emerging-market currencies, led by a 4.8-percent rally in Russia’s

3-DAY EXTENDED FORECAST MARCH 22, 2015 | SUNDAY (AS OF MARCH 21, 5:00 PM)

MAR 24 TUESDAY

METRO MANILA

22 – 32°C

22 – 33°C

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19 – 33°C

19 – 32°C

LAOAG

BAGUIO CITY 14 – 26°C SBMA/CLARK 22 – 33°C

ruble and 3.8-percent surge in Hungary’s forint. The change in Fed estimates softened the perceived monetarypolicy divergence between the US and the rest of the world, which has been a driver of the dollar’s ascent. Central banks from Sweden to Australia have eased policies this year to spur growth and fight deflation by devaluing their currencies, in turn boosting investors’ demand for dollar-denominated assets. The stronger greenback contributed to weaker exports that would be a “notable drag” on growth this year, Fed Chairman Janet Yellen said. Economic expansion has slowed in the US this year, and the inflation rate has consistently fallen below the Fed’s 2-percent target. Economists forecast the consumer price index rose 0.2 percent in February, following a 0.7-percent decline the previous month. Bloomberg News

MAR 25 WEDNESDAY

MAR 24 TUESDAY

MAR 25 WEDNESDAY

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18 – 32°C

TACLOBAN

22 – 33°C

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20 – 31°C

CAGAYAN DE ORO

TAGAYTAY CITY 21 – 27°C

20 – 32°C

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24 – 33°C

20 – 33°C

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BAGUIO

15 – 25°C

14 – 25°C

14 – 24°C

SBMA/ CLARK

21 – 34°C

22 – 33°C

22 – 32°C

ZAMBOANGA

TAGAYTAY

LEGAZPI

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

MAR 23 3-DAY MONDAY EXTENDED FORECAST

METRO CEBU

20 – 29°C

19 – 30°C

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

TACLOBAN CITY 22 – 33°C

CAGAYAN DE ORO CITY 22 – 32°C

ZAMBOANGA CITY 20 – 34°C

21 – 32°C

22 – 32°C

23 – 32°C

SUNSET

MOONSET

MOONRISE

5:59 AM

6:07 PM

8:05 PM

7:19 AM

NEW MOON HALF MOON

22 – 32°C

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ILOILO/ BACOLOD

23 – 32°C

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24 – 33°C

5:36 PM

MAR 27 3:43 PM

CELEBES SEA

5:48 PM

0.02 METER

11:30 PM

0.77 METER

Partly cloudy to at times cloudy with rainshowers and/or thunderstorms

Partly cloudy to at times cloudy with rainshowers Light Rains

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

www.panahon.tv

SABAH

LOW TIDEMANILA HIGH TIDE SOUTH HARBOR

MAR 20

PUERTO PRINCESA

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

METRO DAVAO 25 – 33°C

SUNRISE 19 – 30°C

LEGAZPI CITY 22 – 31°C

PUERTO PRINCESA CITY 22 – 31°C

P122.8-billion Laguna Lakeshore Expressway Dike deal. The same department is currently tightening the loose ends of the P35.42-billion Cavite-Laguna Expressway (Calax) rebidding. Documents from the public work agency showed that the deadline for the submission of bids for Calax is on May 19. The opening of the technical proposals is set for June 2. The technical requirements will then be evaluated. The financial proposals of those whose documents passed the review will then be opened on June 15. The awarding is set for July 7. So far, three parties have signified their interest in the controversial deal. These are San Miguel Corp. (SMC), Metro Pacific Investments Corp. and another private company that is represented by a law firm. The tender process, as earlier reported, will require bidders to place offers higher than P20.1 billion in premium, the alleged financial proposal of SMC. To recall, the results of the initial auction for the deal were declared void by President Aquino, after his uncle’s firm sought for a reconsideration of its multibillionpeso bid. It took the Aquino administration four months to decide on the petition of Optimal Infrastructure Development Inc., which sought to overthrow the offer of Team Orion of Ayala Corp. and Aboitiz Equity Ventures Inc. Team Orion emerged as the first auction’s top bidder, with a premium bid of P11.33 billion. Lorenzo S. Marasigan

mitted in February with Filipino partner Comm Builders and Technology Philippines Corp., calls for the complete overhaul of the 73 light-rail vehicles of the MRT; the replacement of the rails; the upgrading of the line’s ancillary system; the upgrade of the track circuit and signaling systems; the modernization of the conveyance system; and a three-year maintenance contract. The train system has been operating at overcapacity since 2004. Currently, the line serves nearly 550,000 passengers per day, it even reached, at one point last year, the 650,000-dailypassenger mark. It has a rated capacity of 350,000 daily passengers.

METRO DAVAO

TUGUEGARAO CITY 18 – 34°C

METRO MANILA 23 – 32°C

MAR 23 MONDAY

continued from A8

LOW PRESSURE AREA WAS ESTIMATED AT 70 KM NORTHWEST OF DAET, CAMARINES NORTE

Trough of Low Pressure Area is an elongated region of LPA. It can bring in cloudy conditions and precipitation or cold air mass.

LAOAG CITY 19– 32°C

PPP...

DOTC eyes negotiated deal for MRT 3 upkeep

continued from A1

TODAY’S WEATHER

news@businessmirror.com.ph

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EconomySunday

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

BusinessMirror

Sunday, March 22, 2015 A3

DOE should make ILP mandatory to avert power outages–lawmaker

SENIOR member of the House Minority Bloc on Saturday pushed for the mandatory and compulsory implementation of the Interruptible Load Program (ILP) by heavy power users with power-generating capability to make the program effective in addressing the projected 782-megawatt (MW) power shortage in Luzon from March to July.

Nationa list People’s Coa lition Rep. Rodolfo A lbano III of Isabel a, a member of t he M i nor it y Bloc of t he Hou se Committee on Energ y, said the Department of Energ y should issue an order making the ILP mandator y and compulsor y to ensure that the targeted shortfall of power is achieved during the dr y months. Albano said the ILP, as the major solut ion adopted by the Executive and Legislative branches of the government to augment the thin power reserves

from March to July this year, may not be much effective if it is done on a “voluntary” basis. Based on established protocols, ILP is implemented during a red-alert status (minimal power reserve) upon the notice of the National Grid Corp. of the Philippines and the power utilities informing ILP participants to deload from the grid. The ILP is a voluntary program, whereby businesses, such as malls and factories that have their own generators, can be disconnected from the power grid in

times of short supply, and can sell any excess power they generate to distributors. “What happens if these identified heavy power users refuse to join the ILP and continue to draw heavily from the national grid? The ILP would then be rendered ineffective and inutile,” Albano, former executive director of the Joint Congressional Power Commission, said. He said the government must make the ILP mandatory and compulsory to make it work. Albano said it should not simply depend or rely on “volunteerism” by heavy power users with powergenerating capacity. Last week Congress went on break without approving joint resolution granting President Aquino special powers to address the projected 782-MW power shortage. Liberal Party Rep. Reynaldo Umali of Oriental Mindoro, chairman of the House Committee on Energy, said that members of the congressional bicameral committee failed to reconcile the differences in the Senate and House versions of the measure. Congress takes a break from March 21 to May 3. Uma li said the Lower Cham-

ber had done its pa r t but no one a mong t he t wo c ha mbers wa nted to g ive in. “I have talked to my colleagues and the House leadership if we can bargain some provisions but the decision is final that we need to stand on our version,” Umali said. The joint resolution wants the government to mainly use the ILP in generating additional power capacity these dry months. But members of the lower chamber are strongly pushing for the no pass-on scheme in using the ILP as it is eyeing to tap Malampaya funds as subsidy. On the other hand, the Senate said the adoption of the ILP scheme would cost consumers P7 to P8 per kilowatt-hour under its version of the emergency powers. On the time frame, the Senate still wants the special powers to be extended until July 2016, while the House wants it from March to July only. Both chambers want the government to mainly use the ILP in generating additional power capacity these dry months. Umali, however, said the ILP can still function, but the cost will have to be passed on to consumers, in accordance with protocols established by the Energy Regulatory Commission. Jovee Marie N. dela Cruz

briefs pnp remitted p3.88b in withholding taxes to b.i.r. last year The 150,000-strong Philippine National Police (PNP) has remitted P3.88 billion worth of individual taxes to the Bureau of Internal Revenue (BIR) in 2014. Citing records from its finance service, PNP Spokesman Chief Supt. Generoso R. Cerbo Jr. said total taxes withheld by the PNP in 2014 amounted to P3,883,039,689.85, or an average of P25,886.93 tax withheld per individual PNP taxpayer in 2014. Withholding tax on compensation is the tax withheld from income payments to individuals receiving purely compensation income. In the PNP, individual tax withheld is automatically deducted from the monthly salary. The taxes withheld become obligations of the PNP to the BIR that is remitted to the account of the tax-collection agency every year, Cerbo explained. According to BIR records, self-employed individuals and professionals in the private sector paid only an average of P18,813 income tax last year. This was only slightly higher than the average P16,407 income tax they paid in 2010. PNA

p199-m fund to bolster fire safety in armm

AS part of the national government’s commitment to ensure security and the rule of law in areas of the country that need essential government services, the Department of Budget and Management has approved the release of P199 million to the Bureau of Fire Protection (BFP) in the Autonomous Region in Muslim Mindanao (ARMM) for the procurement of 33 fire trucks. This release coincides with the designation of the month of March as Fire Prevention Month, and is part of the P22.47-billion supplemental budget passed in December 2014. Aside from being part of the ARMM Transition Investment Support Plan, the amount of P199 million also supplements the BFP’s P8-billion budget in the fiscal year 2015 General Appropriations Act. Budget Secretary Florencio “Butch” Abad said: “These fire trucks are the final element needed to complement the recently constructed fire stations in the ARMM municipalities. That’s why we need to guarantee budgetary support for agencies like the BFP, whose main task is to ensure public order and safety. With the help of these agencies, we’ll be able to establish an environment of social stability in areas that need it so that inclusive development can thrive and grow.” Each of the 33 recently constructed ARMM fire stations will receive one water tank pumper truck, which has a capacity of 3,800 liters. These fire stations are located throughout the five ARMM provinces—Lanao del Sur, Maguindanao, Basilan, Sulu and Tawi-Tawi—and their construction was completed in 2013. PNA

SundayV

Busine

A4 Sunday, March 22, 2015

editorial

On the recent minimum wage adjustment

HE recent increase by the National Capital Region Tripartite Wages and Productivity Board (NCR TWPB) of P15 in the minimum daily wage for Metro Manila workers, which raises the wage to P481, has been found by the IBON Foundation to be extremely inadequate, constituting only 44 percent of the P1,088 that the foundation said has been estimated to be the living wage for a family of six in the NCR. We cannot help but agree with the foundation. The increase is so small, it has no relation at all to the rise in the cost of living in Metro Manila. That conclusion seems to be clear enough, but not presumably to owners of businesses. The reason for the divergence of opinion is that, while workers relate the wage or salary to the cost of living, owners of businesses relate it to productivity. Now, productivity is theoretically simple. It is output per worker. From any given base, if the quantity of production is increasing (decreasing) faster than employment, then productivity is increasing (decreasing). Of course, if the two sides are changing at the same rate, then productivity is unchanged. The statement frequently made to describe recent Philippine economic experience as “jobless growth” implies increasing labor productivity. (There are enough technical arguments to muddle the issue—learning by doing, technological change, forms of investment, etc.—we cannot go into them here.) Productivity is elusive in practice. That has to be the reason debates on productivity, in fact, hinge on profitability. If the firm is profitable, owners agree to the wage increase; if it is not, owners stonewall. The trouble with the profitability criterion is that, even if production is increasing if operating expenditures are increasing faster (through, let us say, unwarranted allowances of senior officers, unjustified travels, wasteful air-conditioning, etc.), the firm will be less profitable than in the normal state of affairs. In other words, the profitability argument is loaded against the workers. The only good thing about the current minimum-wage adjustment is that it comes from the NCR TWPB, the government wage-fixing agency for the region, and not from the private business corporations that now punctuate the metropolitan landscape. Many of these firms have been declaring solid earnings lately. Surely, they can find ways to respond to the needs of their workers. Of course, there are also businesses that are barely breaking, even if not losing outright. They must be given their day in court. There is need for a creative way in dealing with the problem. In place of an adjustment in the minimum wage, which never ceases to generate conflicts between labor and management, what about a 14th-month bonus? Or a two-month bonus? Even a nonrecurring profit share? We are not enthused by minimum-wage fixing, whether by the public or the private sector. We do not mind unions, except that unions have been a colossal failure in practice. We are rather sympathetically inclined to labor-management working committees or teams regularly monitoring or following up developments on the work-floor and proposing improvement measures in production, including wage or salary increases. We cast our vote unequivocally in favor of living wages for our workers.

03222015

Japan needs a bigger land grab J Bloomberg View William Pesek

Gospel

Sunday, March 22, 2015

APAN’S latest land-price data poses a conundrum for economists. Is a 0.7-percent rise in Tokyo, Osaka and Nagoya prices proof that the central bank’s quantitative easing program is gaining traction? Or does the 0.3-percent drop in land costs nationwide underscore how persistent deflation remains? Let’s put this one in the plus column for Bank of Japan (BOJ) Governor Haruhiko Kuroda. It’s clear progress that January land prices in Japan’s three largest metropolitan areas rose even slightly from 12 months earlier, for the second year in a row. Record-low interest rates— and debt yields that have gone negative at times—are boosting housing demand and property investments. It’s promising, too, that the average decline in nationwide values was the smallest in seven years. The question is how Kuroda can expand on this pocket of success to broaden the impact of the BOJ’s unprecedented easing program. Here, it’s worth noting that skeptics, too, have a valid point. The divergence in price trends between Japan’s biggest cities and the rest of the country suggests that BOJ policies are too geographically concentrated to succeed. It highlights also the piecemeal impact of Prime Minister Shinzo Abe’s reforms. If you own land in three of Japan’s 800 largest cities, or stocks, Abe’s efforts are clearly bearing fruit. If not, your disposable income is falling as the weak yen boosts consumer prices. This tale of two recoveries extends to exporters. Giant manufacturers are recording record

profits, while small companies that have to import raw materials or intermediate goods are seeing red ink. This may not be Kuroda’s fault, but it’s certainly the BOJ’s problem—and a growing one. Since I last explored this dilemma in January, the argument for a broader, lessurban BOJ approach has only gotten stronger. In that earlier piece, I argued that Kuroda should target the hinterlands with his monetary largess. Along with the $700 billion of government bonds it’s buying annually, the BOJ could be loading up on regional-government debt. It also could shop for regional bank IOUs in hopes of getting lenders to help Tokyo catalyze the multiplier effect that lends impetus to monetary policy. Two years into Kuroda’s shockand-awe campaign, these latest land data show it’s time for the BOJ to get more involved in property markets. In January 2013 the bank trumpeted plans to buy into real-estate investment trusts, or REITs. Yet, as of today, it’s pumped less than $1.7 billion into such investments, a pittance in a $4.9-trillion economy struggling to end 20 years of deflation. Remember that while the BOJ isn’t getting traction broadly (Kuroda himself says consumer prices may soon dip below zero again), it’s having some success in the landvalue space. Kuroda should ramp up REIT purchases significantly. In January he said “we can make adjustments to our monetary policy,” if the BOJ’s 2-percent inflation target looks unattainable. We’re way past that point, with oil prices continu-

ow among those who went up to worship at the feast were some Greeks. So these came to Philip, who was from Beth-sa’ida in Galilee, and said to him, “Sir, we wish to see Jesus.” Philip went and told Andrew; Andrew went with Philip and they told Jesus. And Jesus answered them, “The hour has come for the Son of man to be glorified. Truly, truly, I say to you, unless a grain of wheat falls into the earth and dies, it remains alone; but if it dies, it bears much fruit. He who loves his life loses it, and he who hates his life in this world will keep it for eternal life. If any one serves Me, he must follow Me; and where I am, there shall My servant be also; if any

ing to fall, China slowing and the wage gains Tokyo was hoping to see from corporate Japan looking relatively modest. As of January, wages adjusted for inflation were down for 19 consecutive months. Kuroda’s purchases of exchangetraded funds (about $37 billion) far exceed REIT investments. Enlivening land prices in rural Japan would pay much greater dividends. Stocks don’t need more attention from the government, which has nudged the $1.1-trillion Government Pension Investment Fund to pump up the Nikkei. And as my Bloomberg colleagues Anna Kitanaka and Toshiro Hasegawa have shown, Tokyo’s bureaucrats are rolling out ever-more gimmicks to get average Japanese to buy stocks—pushing a list of companies that prioritize employee health, getting women to buy shares by offering free cakes, you name it. What’s missing is liquidity flowing beyond the three biggest cities to places such as Hokkaido, Kyushu, Okinawa and earthquakeravaged Tohoku. Among the steps Kuroda could take: assuming (and effectively forgiving) debt of the most down-and-out municipalities; buying distressed properties from airports to underused sports facilities; loading up on more asset- and mortgage-backed securities; investing in “zaito bonds,” which state-run companies issue to finance projects. The key is to put cash directly into the hands of rural Japanese. Pouring money into land could be just the thing for a recovery in need of stronger foundations.

one serves Me, the Father will honor him. “Now is My soul troubled. And what shall I say? ‘Father, save Me from this hour’? No, for this purpose I have come to this hour. Father, glorify thy name.” Then a voice came from heaven, “I have glorified it, and I will glorify it again.” The crowd standing by heard it and said that it had thundered. Others said, “An angel has spoken to Him.” Jesus answered, “This voice has come for your sake, not for mine. Now is the judgment of this world, now shall the ruler of this world be cast out; and I, when I am lifted up from the earth, will draw all men to Myself.” He said this to show by what death He was to die.—John 12:20-33

Voices

essMirror

opinion@businessmirror.com.ph • Sunday, March 22, 2015 A5

Perfect as can be T Free Fire

By Teddy Locsin Jr.

HE report of the Philippine National Police (PNP) Board of Inquiry is clearly written, tightly organized and coherent. More than a balanced account, it is a spare narrative of what the PNP gathered in the teeth of Palace resistance; that resistance included withholding text messages—that maybe tried to save the men—or maybe left them to die. The report is a precision piece of military writing. It is crystal because misunderstanding in battle spells death and defeat. So I was not surprised to learn that the report was finalized by a small group, under the

direction of a woman—and a pretty one at that. They worked on a draft that was factual but it read like a Tom Clancy novel on adrenalin. They organized the material; erased adjectives and adverbs; double-checked sources; cut out conclusions of law; conducted fresh interviews; and stripped away the sort of Monday Mourning Quarterbacking the President did last week. That left only the facts—and the narrowest conclusions that were so tight with the facts they didn’t have to be drawn; they just bled out in buckets.

The report tells the whole truth and nothing but except for the truth about the Mamasapano mission-massacre that the dead took to the grave. It compares the facts with the manuals of operation, which detail the best way to carry out a mission like that. Clearly, all should follow these manuals so that everyone knows what to expect from each other. In short, the report compares the way things went with the way they could have gone by the book. That makes sense. And yet the highest authority on warfare says that after

the best-laid plans of generals, the fog of war descends on the battle obscuring the view—and when you suffer drop calls in the battle, you are back in Germany BC, fighting the tribes but without Julius Caesar. In the Philippines, there are no Julius Caesars. There is only Caesar salad. In the meantime, the friction of fighting mucks up the gears, slows the advance, and misdirects the actions of the best fighting men. The report is missing only the lies and the truth held back out of fear by the government. To be fair, if the chain of command controlled

the president, that would be the end of civilian supremacy over the military. That said, this is as perfect as it is possible for a report to be, yet none of its makers want their part to be known. That shows a becoming modesty sorely lacking in the government that sacrificed, after their success, the men it sent off on a deadly mission. But the sacrifice was imperative for the time-on-target the government had set for a crack at the Nobel Peace Prize even if no one in the government had been shot in the head like Malala who took the prize.

Political wrangling dooms victims of human trafficking By Christine M. Flowers Philadelphia Daily News

HE idea that human beings can be treated like property is not new. It’s as old as Pharaoh using the Israelites as tools to build his pyramids. It’s as old as the slaves who were counted as three-fifths of a man by the Supreme Court of this nation. It’s as old as the woman who, married to her rapist, could not claim injury because the law said you couldn’t be charged with stealing something—a vagina—you already owned. And to those of us who’ve been bleeding with righteous anger since that same law made unborn children maternal property in 1973, the insult to human dignity marches on unimpeded. There is an unbreakable chord that connects the ancient to the modern, and even though many who use sophistry and clever words to hide the biological and moral truth of abortion will vehemently deny the connection (because they must), it’s clear. Never was that more apparent than in the recent battle over another form of bondage: human trafficking. This past month, the US Congress was presented with an opportunity to alleviate the suffering of people who are caught up in the

widespread, deadly and extremely lucrative commerce in human lives. As an immigration attorney who has come in contact with women and children who’ve been trafficked, I have firsthand knowledge of the hell they’ve experienced both across international borders and—most shamefully—in our own country. It is abuse beyond imagining, degradation beyond belief and the most effective way to kill the fragile spirit of the most vulnerable. The proposed bill, aptly named the “Justice for Victims of Trafficking Act” (JVTA) would have provided funding for the victims of a wide range of crimes that fall under the definition of “trafficking.” Initially, it had full bipartisan support. That is, until a majority of the Democrats in the Senate realized that the bill would apply Hyde Amendment restrictions to the financial aid, and would bar federal money from being used to fund abortions. Actually, there was a fairly large exception to that bar, an exception that has existed for over four decades. Federal money can still be used to pay for abortions that terminate pregnancies arising out of rape or incest, or that endanger the life of the mother. This has always been the law, and the language to

which the 41 Democrats objected simply extended it to the JVTA. But the abortion lobby is a large and vocal one, and has the ear of the Democratic establishment. Once Harry Reid and his fellow Planned Parenthood groupies realized that they were voting for abortion restrictions, even though these restrictions had existed before a few of them could even spell the word “termination,” the legislative express train heading toward justice for society’s most vulnerable came to a screeching halt. It had hit the third rail: reproductive rights. It was useless to try and convince the ideologues on the Left that banning federal funds for most abortions was as old as Nancy Pelosi’s standing Botox appointment. If there is one thing that all liberals and most Democrats cannot stand it is the appearance of restricting any woman’s ability to become “un-pregnant.” Even though the proposed bill would still allow Uncle Sam to pay for abortions where the woman had been raped, which is always a big red herring raised by pro-choice activists, this wasn’t enough for the Friends of Cecile (as in Richards.) They started yammering about how the Hyde Amendment is only supposed to apply to taxpayer money and that the JVTA would have included in its

The whole argument that the Hyde Amendment doesn’t apply is a ridiculous, transparent and completely amateurish smoke screen set up by people who should know better. It also ignores the fact that, according to a recent Quinnipiac poll, seven out of 10 Americans don’t want their tax dollars paying for abortions. funding base criminal fines paid by convicted traffickers. Here is the part where we start calculating how many angels are dancing on the head of a pin. Whether the money comes from John Q. Public on tax day, or whether it comes from a vile slave trader as part of his punishment, that money is “federal money.” Therefore, the whole argument that the Hyde Amendment doesn’t apply is a ridiculous, transparent and completely amateurish smoke screen set up by people who should know better.

It also ignores the fact that, according to a recent Quinnipiac poll, seven out of 10 Americans don’t want their tax dollars paying for abortions. To be fair, a few Democrats were embarrassed enough by the infantile antics of their colleagues and voted to advance the bill in Congress. I’m proud to say that our own senator, Bob Casey of Pennsylvania, was one of them (surely his dad is smiling in heaven), as well as Heidi Heidtkamp of North Dakota, Joe Manchin of West Virginia and Joe Donnelly of Indiana. Interestingly, there has been no gushing praise for these politicians who bucked their party and voted their conscience, unlike the situation where pro-choice female Republicans have blocked legislation which would have restricted abortion. Who am I kidding? It’s not interesting. It’s predictable. Lost in all of this internecine wrangling are the true victims: the women, children and even men who have been sold into modern slavery and stripped of their dignity. Pawns in a power struggle between those who see all human life as valuable and those who need to pacify a demanding lobby, they are left without protection. Pharaoh would be proud.

A return to China’s isolationist past would be disastrous By Carl Minzner Los Angeles Times

EIJING increasingly appears to be walling China off from the outside world, with potentially disastrous consequences. Take civil society. China’s national legislature is considering a bill that would further restrict the operations of foreign non-governmental organizations, deepening the bitter chill that has descended on the operations of domestic and foreign nonprofits over the last year. Or look at the Internet. State authorities once confined themselves to censoring dissident voices. Now, they are disrupting technologies such as virtual private networks that China’s tech gurus and foreign companies rely on to access commercial sites abroad and to scale the so-called Great Firewall, which blocks sites the government doesn’t want people to see. Higher education is another example. Universities that once thought themselves exempt from official pressure now are accused of facilitating the nefarious infiltration of “Western

values” and are forced to fend off calls to ban or amend textbooks. China is steadily drifting away from the reform path set in the late 1970s. Then, Deng Xiaoping opened China to the world, encouraging citizens to seek knowledge abroad. Today Chinese leaders increasingly call for it to return to its own past. But what period do they want to return to? Historically, China’s most glorious eras have been its most open ones. During the cosmopolitan Tang (618-907 AD) and Song (960-1279 AD) dynasties, central Asian traders flocked to the imperial capital, Arab merchants to eastern seaports. China grew wealthy from trade. While medieval Europe remained wracked by purges against Muslims, Jews and all who dared challenge the ideological orthodoxy of the church, China was open to the world. Innovation flourished: Gunpowder, paper currency and the navigational compass were all invented during this time. Emissaries from neighboring states streamed to China. Japan adopted Chinese writing and modeled its first capital after the Tang imperial

court. Japan did this not because it was compelled to by force but because an open, self-confident China was one of the great centers of civilization. Culture flowed the other way, too. Foreign dance and music were imported from Central Asia, and beliefs such as Buddhism entered from India. These fused with China’s indigenous traditions to become integral parts of a vibrant intellectual and cultural heritage. Then, there are the other eras, when paranoid imperial rulers lashed out at foreign influences and cut China off from the outside. After the collapse of Mongol rule in the 14th century, Ming emperors briefly flirted with other cultures. But then they turned inward. They adopted a narrow ethnic self-conception. Mongol cultural influences were purged, foreign trade barred. Similar trends took place after the founding of the modern People’s Republic of China. Communist leaders expelled Western missionaries, then Soviet advisors. China retreated back into splendid isolation. Such measures helped repressive rulers strengthen their

iron grip over society, but they crippled China. The Ming fleets that had begun to explore the Indian Ocean were called home and cut up for scrap, just as Spanish and Portuguese explorers set forth on their voyages of discovery. As the scientific and industrial revolutions rippled through Europe, China fell behind. And when Mao Tse-tung closed the nation off in the mid-20th century, the results were equally disastrous: decades of economic stagnation, mass famine (Great Leap Forward, 1958-1960) and political chaos (Cultural Revolution, 1966-1976). Today China’s leaders have begun to tentatively steer their nation down a similar path. They could go yet further. Faced with a restless society, they could expel even more foreign journalists, further block cultural imports, sharpen attacks on “foreign” religions, such as Christianity and Islam, and tighten their suppression of Uighur identity in Xinjiang province. They could stress a narrow concept of what it means to be Chinese, ram patriotic education through

Hong Kong schools, and whip up nationalist sentiment among the discontented and underemployed youths flowing out of China’s colleges. They could also fuse Marx with Confucius to create a new ideological orthodoxy. And when populist anger begins to seethe over a slowing economy and widening divide between rich and poor, the government could redirect it at liberal intellectuals and economic elites to steer it away from central party officials. But if they do all this, the results will be catastrophic. It would pit Chinese citizens against one another. It would shut down innovation and weaken China’s influence abroad. And it would eventually turn on China’s leaders themselves, many of whom see this danger all too clearly and are privately hedging against it by stashing their wealth and children abroad. In short, it would repeat precisely the same errors that generations of enlightened Chinese leaders—including Communist luminaries such as Deng Xiaoping have sought to escape from.

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A6 Sunday, March 22, 2015 • Editor: Vittorio V. Vitug

briefs

more troops deployed to maguindanao

TO ensure greater peace and security, troopers of the 34th Infantry Battalion was ordered deployed to Maguindanao and the nearby provinces of North Cotabato, Sultan Kudarat and Lanao del Sur. The unit was formally welcomed on Saturday at the 6th Infantry Division headquarters in Camp Siongco, Awang, Datu Odin Sinsuat, Maguindanao. Officers and enlisted troopers of the unit were formally welcomed by 6th Infantry Division Assistant Division Commander Brig. Gen. Manolito Orense. The 34th IB is a field unit of the Catbalogan-based 8th Infantry Division. It is commanded by Lt. Col. Edgar K. de los Reyes. The 34th IB will augment 6th Infantry Division efforts in maintaining peace and security in Maguindanao, parts of North Cotabato, Sultan Kudarat and Lanao del Sur. The deployment marks the start of the holding phase wherein government forces will establish encampments in former lairs of the Bangsamoro Islamic Freedom Fighters in order to prevent armed lawless group from going back to said areas. It will further pave the way for the implementation of various developmental projects in the different communities in the 6th Infantry Division’s area of operations. PNA

ltfrb inspects alps passenger-bus fleet

The Land Transportation Franchising and Regulatory Board (LTFRB) on Saturday morning began inspection of 189 units of ALPS bus company in time for Holy Week. The inspection was led by LTFRB Chairman Winston Ginez and done in the bus company’s Batangas and Cubao service areas in a move to ensure the bus units’ roadworthiness. Major service areas of ALPS in Batangas include Batangas City Grand Terminal; San Juan Batangas; Nasugbu, Batangas; and Lipa City. The bus company also has service areas in Alabang; Araneta Center Cubao; Edsa Terminal southbound fronting Nepa Q Mart; Taytay Rizal; Naga; Iriga; Legaspi; Tabaco; and Sorsogon. At present, the board is also observing the 15-year-age limit in buses, from date of manufacture of the subject vehicle instead of date of initial registration with the Land Transportation Office. The program is part of the Department of Transportation and Communications’s Modernization of Public Transport Service initiative in phasing out buses that are more than 15 years old. PNA

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House leaders downplay impeach-Aquino plans

By Jovee Marie N. dela Cruz

HE leadership of the House of Representatives on Saturday downplayed the reported plans to impeach President Aquino in connection with the ill-fated Mamasapano mission that killed 44 Philippine National PoliceSpecial Action Force commandos. Speaker Feliciano Belmonte Jr. said that an impeachment complaint should be credible enough to unseat the President. “Anybody can file an impeachment complaint [against the President]. And if it is duly endorsed by a [House] member, then it will be entertained by the House,” he said. “But on the basis of all the evidence from the two reports I have read, I don’t think it could reach first base in this chamber,” Belmonte said, referring to the reports on the Mamasapano massacre of the Board of Inquiry (BOI) and the Senate. Belmonte also said that President Aquino did not commit an impeachable

offense, “[but] the only thing that he can be faulted with is the fact that he continued to talk to, issue orders to and act through [then suspended and now resigned National Police chief Alan] Purisima,” he added. “From a clearly legal point of view, a person who has been suspended and on whom the order of suspension has been served shouldn’t be exercised in those functions,” the Speaker added. Nacionalista Party Rep. Rodolfo Fariñas of Ilocos Norte and House Independent Bloc Leader and Lakas Rep. Ferdinand Martin Romualdez of Leyte in separate statements also said that any impeachment case to be filed against President Aquino in relation to the Mamasapano encounter would not prosper. “...Any impeachment proceedings against the President cannot prosper within one year from the initiation of the present one, which should be around August this year. It would be too close to the May 2016 elections to even consider impeaching the President,” Fariñas said.

On the other hand, Romualdez said that it would a waste of time, energy and resources for impeachment movers to pursue their case against the President in light of the fact that the President is in “full control” of government resources. Liberal Party Rep. Neil Tupas of Iloilo, chairman of the House Committee on Justice, said that the House is bound by a one-year ban on the filing of an impeachment complaint against the President. Tupas said that another impeachment complaint could be filed by August 11 when the one-year ban expired. Tupas added that the left-wing Makabayan bloc, which includes the party-list groups Bayan Muna, Kabataan, Gabriela, Act Teachers and Anak Pawis had already approached him about their plan to file an impeachment against the president. The House leadership has yet to decide on the impeachment case filed against the President in September. Last week members of the Minority Bloc in the House of Representatives urged the House leadership to finally decide on the impeachment case filed against President Aquino. House Minority Leader and Partido Magdiwang Rep. Ronaldo Zamora of San Juan City, in a news conference, said the leadership should not discount the possibility that the 126 lawmakers supporting the resumption of the House probe on Mamasapano might translate into an impeachment vote against the President.

The House’s investigation into the Mamasapano encounter was indefinitely suspended after one hearing was held on February 11 pending the submission of the report of the PNP-BOI. But the House of Representatives is set to resume its investigation on botched Mamasapano operation on April 7 and 8. A vote of at least one-third of the 290 House members is needed to finally junk the imp e a c h me nt compl a i nt s . T he same number of votes is needed to impeach the President. In September the members of the House Committee on Justice, voted unanimously to junk separately the three impeachment complaints filed against [Mr.] Aquino for being “insufficient in substance.” In the first and second impeachment complaints, which was endorsed by Party-list Reps. Neri Colmenares and Carlos Zarrate of Bayan Muna, Fernando Hicap of Anakpawis and Terry Ridon of Kabataan are seeking President Aquino’s removal from office, accusing him of culpable violation of the Constitution and betrayal of public trust under Section 2, Article XI of the 1987 Constitution arising from his implementation of the Disbursement Acceleration Program. The third complaint, which was endorsed by Party-list Reps. Antonio Tinio of ACT Teachers and Emmi de Jesus of Gabriela, was over the Edca between the Philippines and the US.

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RegionsSunday BusinessMirror

Sunday, March 22, 2015 • Editor: Dionisio L. Pelayo

‘Naia chief part of anti-Clark conspiracy’

By Ashley Manabat | Correspondent

NGELES CITY—Despite saying “there is no competition between the Ninoy Aquino International Airport [Naia] and the Clark International Airport [CIA],” the Pinoy Gumising Ka Movement (PGKM) expressed fears that Naia General Manager Jose Angel Honrado is part of the conspiracy not to develop Clark.

Honrado made the statement during the consultative meeting called by the Department of Transportation and Communications for the development of the CIA, where he also said Clark or Naia “should maximize their network and that the two airports should grow together.” But PGKM Chairman Ruperto Cruz said on Saturday that Honrado, who is also a member of the board of the Clark International Airport Corp. (Ciac), should all the more know what is not happening in Clark which could have pushed him to do more. “He [Honrado] sits in the Ciac board just to make sure Clark does not develop,” Cruz said. He noted that Honrado, in his

twin capacity as Naia head and Ciac director, was in the best position to have “maximized Clark when Naia was faced with difficulties.” Cruz cited the “chaos at the Naia during the Christmas situation that resulted in delayed and canceled flights to the disadvantage of the passengers” when Honrado could have “moved some flights to Clark to ease the Naia congestion.” “During the pope’s visit in January, Naia had to cancel some flights that could have simply been diverted to Clark, as is the case during emergencies at Naia, had Honrado done his homework,” Cruz noted. “It was the same case with the Apec [Asia-Pacific Economic Cooperation] Ministerial Meeting,” he added. Cruz said Honrado could

have “willfully excluded Clark as a solution in the Naia congestion problem to hide its actual potential [as premier international gateway] from the aviation community.” “That smacks of sabotage lends credence to our suspicion of a conspiracy against the development of Clark,” Cruz said. There is also the issue of not only flights but airline cancellations in Clark, he noted. “SeaAir is making money with its Caticlan airport flights to Boracay. Why was it canceled? “The SeaAir charter flight to South Korea was also canceled. Emirates airlines left Clark after only less than seven months of operation. What happened to AirAsia [Philippines] that left Clark for Naia?” Cruz asked. “Why is the air fare to and from the Clark airport higher as compared to Manila? No Filipino worker in Saudi would take Qatar Airlines simply because it costs P12,000 more to land in Clark including a 12-hour layover as compared to Naia. It is also noticeable that majority of flights in Clark are red-eye” he added. These are clear manifestation that Honrado, along with the Clark board and officials, are doing nothing to push for the full utilization and immediate development of Clark, Cruz said. “Of course there is no competition between Clark and Naia because Clark cannot compete with Naia since all the odds are against Clark

and because of his [Honrado’s] presence in the Ciac board,” he added. “The CIA is not competing with Naia. In fact, it is only [Transportation Secretary Joseph Emilio Aguinaldo] Abaya who wants to close it [Naia] down,” he said. The PGKM

is not supporting moves to close down Naia,” Cruz said. However, he clarified that the PGKM is against the “twin airport system” being pushed by Honrado and other officials. “[The] twin airport system is

not true. They include Clark in the context that they will only rule and dictate on it. That is why we need to support the bill creating the Clark Airport Authority filed by [Liberal Party Rep.] Yeng Guiao [of Pampanga] in Congress,” he said.

Clean hands

A ribbon-cutting ceremony followed the installation of a brand-new AquaTower built by Planet Water and Amcor to provide clean water for the students of Exodus Elementary School (EES) in Cainta, Rizal. Among those who attended the simple rites are, (front row, from right), Dario Operario, project manager of Planet Water; Renato Guivencan, president of EES Parents-Teachers Association; Lito Trilles, general manager of Amcor Tobacco Packaging Philippines; Maria Ontanco, human-relations manager of Amcor; Fe Año, EES principal; and Barangay Chairman Wilfredo C. Felix. Inset shows EES pupils wash their hands after learning the importance of hand washing as a way to protect themselves against germs.

Yolanda survivors get ₧4.5 million from shipping, manning companies

OTING the still huge rehabilitation work that still needs to be done in areas devastated by Supertyphoon Yolanda, Filipino shipping and manning companies have donated P4.5 million to a housing project for the victims. In a simple turnover ceremony, Capt. Emmanuel Regio, chairman of the Joint Ship Manning Group (JMG), turned over his association’s donation to SM Foundation Executive Director Debbie Sy. The donation will be used to help build the SM Cares Housing Village, SM’s flagship project to build 1,000 disaster-proof homes in areas affected by Yolanda. JMG’s donation will be used to build the Community Center in the first SM Cares Village in Bogo, Cebu. Regio said the P4.5-million donation will only be the first tranche as his group had promised give more donations to

construct the community centers in the other three SM Cares villages in the Iloilo, Palo and Tacloban City in Leyte. JMG is an umbrella organization of maritime and manning associations in the Philippines with more than 250 shipping and manning companies as members. It brings in $5 billion in foreign-exchange earnings yearly and provides employment to over 500,000 Filipino seamen. The construction of JMG’s community center in Bogo, Cebu, has started with its groundbreaking ceremony attended by local government officials and executives from the SM Group and JMG. Sy said the community center will be used as a venue to make the SM Cares villages to be more sustainable by teaching the new homeowners community and livelihood-development programs to enable them to start life anew.

Regio said JMG chose to contribute to the SM Cares Housing Village project because of its track record in corporate social responsibility and community building. “Our members want our donations to be put to a worthy cause and to an organization that has a solid reputation and that is SM Cares and SM Foundation,” Regio said. “We are very happy and honored of the trust they continue to give us. This keeps us inspired to see the project through until the last family-beneficiary moves in to their new home,” Sy said. On November 9, 2014, a year after the devastation, the first Housing Cares Village in Bogo, Cebu, was turned over to the 200 beneficiary-families. Three more villages are being built and will be turned over to 800 family-beneficiaries by July.

2nd Front Page BusinessMirror

Sunday, March 22, 2015

Value of PPP deals breaches ₧1.23-trillion mark, data show

EALS under the government’s flagship Public-Private Partnership (PPP) program amount to roughly P1.23 trillion, or $27.52 billion, as of March 10, data from the PPP Center showed. The figures, however, do not take into account bigger-ticket projects, such as the $10-billion Sangley International Airport, which is seen to replace the old Ninoy Aquino International Airport; the C-6 Expressway; the Light Rail Transit (LRT) Line 1 Dasmariñas Extension; the Santa Mesa-Ortigas-Angono Rail Line; and the North Luzon Expressway East Extension, among others. There are still 31 deals whose project costs have yet to be finalized. But the government is quickly making progress, with about P130 billion worth of key infrastructure contracts awarded in five years’ time, quicker than its peers in the Asean region. Some of the big-ticket projects that have been awarded are the P64.9-billion LRT Line 1 Cavite Extension; the P17.52billion Mactan-Cebu International Airport Modernization; the P16.28-billion PPP for School Infrastructure Project (PSIP) Phase 1; and the P15.52-billion Naia Expressway Phase 2. The name of the PPP Program is making rounds here and abroad, with foreign players calling the Aquino administration’s flagship infrastructure thrust “one of the

best” in the region. This is reflected by the various nations that sought the assistance of the Philippine government in crafting their own PPP plans and projects. Currently, the concerned departments, such as transportation, public works and energy, are bidding out deals that aim to spur economic growth through sustainable infrastructure. There are 13 deals that are currently under tender. In particular, the Department of Transportation and Communications is currently bidding out bundled contracts for five airports in key cities around the Philippines. The development of the BacolodSilay, Davao, Iloilo, Laguindingan and New Bohol (Panglao) airports has a ticket price of roughly P100 billion. The same government agency is also close to the final stages of the auction for the P4-billion Integrated Transport System South Terminal. The Metropolitan Waterworks and Sewerage System, meanwhile, is busy with the bidding for the P24.4-billion Bulacan Bulk Water Supply Project and the P19-billion New Centennial Water Source-Kaliwa Dam Project. The Department of Public Works and Highways, on the other hand, is in the process of finalizing the results of the prequalification stage of the auction for the See “PPP,” A2

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No real-estate bubble in Philippines–CBRE

By Roderick L. Abad

HE Philippine real-estate market continues to show no signs of a bubble in the residential segment, amid the growth in both the demand and supply of housing units in the country.

This, according to CBRE Philippines, could be attributed to the country’s robust macroeconomic fundamentals, as well as the preemptive measures implemented by the Bangko Sentral ng Pilipinas, which is set to release the real-estate price index by end of this year to eliminate further the risks of a property bubble. Not to be ignored also is the cautiousness among property players as regards their development projects, which somehow help in the prevention of the burst period from

happening soon, the company added. With constant real-estate market activities, prospects for the residential market remain bullish for 2015 given that the demand and supply will continue to become stable as requirements for housing prevail. Following last year’s numerous project launches and solid demand that led to the total supply of condominium units exceeding the 30,000 mark, the uptrend is seen to continue reaching more than the 50,000 level for the full year of 2015. Makati accounts for the biggest share of new stock per city at 27 percent, followed by Quezon City, 23 percent; Taguig, 19 percent; Manila, 7 percent; Mandaluyong, 7 percent; Pasig, 7 percent; and Pasay City, 4 percent. The ever-expanding business-process outsourcing industry and steady flow of overseas Filipino worker remittances continuously bring growth in the residential market, with the latter driving the mid-end housing demand for both horizontal and vertical developments. Meanwhile, the increasing expatriate population has changed the luxury-housing landscape.

With a strong take-up of residential units, CBRE Investment and Capital Markets Manager Alexandra Katindig said developers are encouraged to launch more projects and implement new strategies to hike their sales. One of the popular trends is the development of township or mixed-use projects for end-users’ convenience. Aside from the allocation of retail or office space, these self-sufficient communities sprouting in Metro Manila also have a residential component. Katindig said this only shows that the residential segment derives positive spillover effect from other booming sectors. Another strategy by developers that are presently evident is their foray into other residential subcategories. Stiff competition in the metropolis has led national developers to embrace the trend in building horizontal subdivisions in the fringes of the capital, proof of which is the recent launch of Ayala Land’s highend project in Cavite, The Courtyards. Also with Ayala Land are SM Development Corp. (SMDC) and Federal Land—both of which are in the planning phases of their pioneering horizontal projects, as well. By entering the luxury market, some players are also widening their market reach, like Filinvest Land Inc., which has started building its first luxury condo in Alabang, Muntinlupa, called the Botanika Nature Residence. SMDC, on the other hand, has launched Air Residences in Makati City, which is under its high-end brand, SMDC Premier. The Sy-led developer is eyeing to venture in the economic housing segment, as well.

DOTC eyes negotiated deal for MRT 3 upkeep

By Lorenz S. Marasigan

WO failed auctions may prompt the transportation department to conduct a negotiated procurement of a maintenance provider for the dilapidated Metro Rail Transit (MRT) Line 3, a Cabinet official said. The approval of the Government Procurement Policy Board (GPPB), Transportation Secretary Joseph Emilio A. Abaya said, is necessary before this could start the negotiated tender. “We will submit a request to undergo emergency procurement for the system’s maintenance provider to the Government Procurement Policy Board next week,” Abaya said on Thursday. The decision of the policy-making body, however, may come after the Holy Week, the transport chief noted. Abaya expressed high hopes in this measure, as the most congested train line in Metro Manila has been suffering from operational shortcomings for a long time now. “We hope that the GPPB will agree that the need for a maintenance provider is, indeed, an emergency,” Abaya said. The transportation department launched the initial auction for the multibillion-peso contract for the train line’s maintenance provider sometime in the third quarter last year. The first auction was welcomed by maintenance providers, but they decided to ditch the bidding due to issues related to transparency. In the hopes that these multinational companies would be enticed to vie for the much-needed project, the department decided to sweeten the terms of the deal. But, despite the relaxing of rules and the improvement in cost, railway upkeep services companies still decided to evade a “potential risk.” The risk, industry sources said, is obvious: The train system itself is already dilapidated. Hence, “maintaining” it, in the literal sense, would mean risking the lives of daily commuters coming from the northern and southern corridors of Metro Manila.

Currently, a shadowing team from the transport department is assisting APT Global Inc. in maintaining the line. The maintenance provider’s contract expired in the second half of last year. It was, however, extended due to the failed auctions. The government was supposed to pay the winning maintenance provider a hefty amount of P2.38 billion to maintain the railway system. The amount, however, was not enticing enough, given the poor state of the train line. The owner of the assets of the MRT Line 3 admitted that the train system already poses a certain degree of risk in the lives of the commuters, given its current state. Train experts from Hong Kong also found the line to be in a poor state, especially the rails. But the government and the privatesector partner could not meet halfway. For one, the government currently implements a P9.7-billion multiyear venture to overhaul the line. The complete makeover is expected to be done within the term of President Aquino. It also wants to buyout the corporate owner for P54 billion. But several private groups are proposing a different scheme to modernize the train system, which has been underfire for years now for its mediocre services. The group of businessman Robert John L. Sobrepeña is proposing to do a “quick fix” solution to make the train system safe for public transport. Together with foreign firms Sumitomo Corp. of Japan and Globalvia Infrastructuras of Spain, Metro Global Holdings Inc. is proposing to “fix” the ailing system through a $150-million investment that involves the procurement of a total of 96 new train cars, and the rehabilitation of the existing 73 coaches, increasing its capacity by fourfold to 1.2 million daily passengers. Under the proposal, a single point of responsibility will be implemented, meaning the rehabilitation and the maintenance of the line will be handled by a single company. Continued on A2