BusinessMirror November 27, 2014 by BusinessMirror

he BusinessMirror was awarded the Asean Champion of Biodiversity for the Media Category in 2014 for being the “only newspaper in the Southeast Asia region with an environment section and a dedicated biodiversity page.” The award was given by the Asean Centre for Biodiversity (ACB) and the ACB-GIZ Biodiversity and Climate Change Project on Wednesday at a hotel in Mandaluyong City. The BusinessMirror was recognized for being a newspaper that “makes biodiversity a priority topic.” “Living up to its commitment of providing a ‘broader look at today’s business,’ the BusinessMirror is promoting biodiversity conservation through its day-today reportage and special reports, as well as its evaluation and presentation of stories across all sections,” the certificate of recognition said. The BusinessMirror comes out with an environment section, the Green Section, that has the Green, Biodiver-

sity and Science pages every Sunday. “It is the ‘only newspaper in the Southeast Asia which gives importance to environment and biodiversity,” Rolly Inciong, head of Communication and Public Affairs of ACB, said during the awarding ceremony. The other awardees were two Youth Sector champions. Adeline Tiffanie Suwana was awarded for having founded the Sahabat Alam (Friends of Nature), an environmental education and youth-empowerment program with 25,000 members. She is from Indonesia. Another Youth Sector champions are Gabriella and Giovanna Thorir for the Bekantan Twins Project that works to stop the loss of the endangered proboscis monkey. They are also from Indonesia. The first Asean Champions of Biodiversity award was held in 2011, where the BusinessMirror bagged third place in the Media Category. Lyn Resurreccion

The BusinessMirror was awarded the Asean Champion of Biodiversity 2014 in the Media Category by the Asean Centre for Biodiversity (ACB) and the ACB-GIZ Biodiversity and Climate Change Project on Wednesday at a hotel in Mandaluyong City. Receiving the award are T. Anthony C. Cabangon (third from left), BusinessMirror publisher; Max de Leon (second from left), BusinessMirror Special Projects editor; and Lyn Resurreccion (fourth from left), BusinessMirror Green Section editor. With them are (from left) Dr. Dicky Simorangkir, deputy director of GIZ; lawyer Roberto Oliva, executive director of ACB; Dr. Berthold Siebert, program director of ACB-GIZ Biodiversitty and Climate Change; and Meriden Maranan, officer in charge of Nature Recreation and Extension Division, Biodiversity Management Bureau of the Department of Environment and Natural Resources. Alysa Salen

BusinessMirror

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

U.N. Media Award 2008

www.businessmirror.com.ph

health&fitness

BOHOL REINVENTS ITSELF

Life

Your special presence

POCKET PLANNER PRAYER BOOK, FR. SAL PUTZU, SDB AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

MARTIN AMIS TAKES ON NAZI LOVE IN ‘ZONE OF INTEREST.’ REALLY. »D4

BusinessMirror

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

Thursday, November 27, 2014

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PAMILACAN Island of Baclayon

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PANGLAO Bluewater Resort

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OBSERVING loom weaving at the Bee Farm.

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HINAGDANAN Cave in Dauis

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THE Church of Saint Monica in Alburquerque

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EXPERIENCING “The Rush” at the Chocolate Hills Adventure Park.

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Bohol reinvents itself

B B L

T’S been a little over a year since the devastating 7.2-magnitude earthquake struck Bohol on October 15, 2013, destroying or damaging many of its iconic Spanish-era churches, as well as other infrastructure. However, slowly the province and its people are picking up the pieces and getting on with their lives. Joining a media familiarization tour with seven newsmen and bloggers, we explored Bohol’s now revived tourism potential, which includes alternative destinations such as the Chocolate Hills Adventure Park and the Bee Farm. Boholanos have also turned the tragic aftermath of the earthquake into tourist attractions (such as the tectonic uplift along the coasts). Upon landing at Tagbilaran Airport, we were soon on our way on our Countryside Tour. Our first stop was the Philippine Tarsier and Wildlife Sanctuary, where we saw, observed and photographed, up close and personal, three Philippine tarsiers, Bohol’s mascot, in their nature habitat. At the Visitor’s Center, we met up with the celebrated “Tarsier Man”, Carlito “Lito” Pizarras, a

former tarsier hunter turned conservationist who is now the field supervisor of the sanctuary. From the sanctuary, we made our next stop at the newly restored Church of Saint Monica in Alburquerque (nicknamed by the Boholanos as “Albur”). Here, we were awed by its painted ceiling which was done by Ray Francia from April 12 to August 3, 1932, and recently restored by Manila-born but Spain-based artist Guy Custodio. The church’s massive pillars are actually large tree trunks. It was now past noontime, so we proceeded to the Loboc Tourism Complex (across which is the seriously damaged Church of Saint Peter the Apostle), where we were to have lunch on board a double-hulled, flowerbedecked floating restaurant as we cruised along the Loboc River. While we dined, boodle-style, on Boholano cuisine, we were serenaded by a bossa-nova singer. Our boat also made stopover at a riverside pavilion where traditional folk dances, such as the kuradang and tinikling were performed for our viewing pleasure. The highlight of our Bohol Countryside Tour was the four-hectare Chocolate Hills Adventure

Park, where a number of us tried the famous, exciting and very unique bike zip line, dubbed as “The Rush.” The park also features a restaurant, hiking trails and tree-top adventures. Our home for the three days and two nights we stayed in Bohol was the extremely quiet and refreshing Class “AAA” Panglao Bluewater Resort. Here, we stayed in some of the 54 elegantly appointed, spacious, very Zen and modern airconditioned guestrooms. The resort also has a restaurant (Aplaya), two swimming pools, a wellmaintained Zen garden, a cliff with a view of the sea, bar (Baroto Poolside Bar), watersports center (Aquamania), boutique, facilities for disabled guests, gift shop, meeting facilities and children’s playground. The morning of the next day, we went on an island-hopping tour to Pamilacan Island where we had a merienda of kamote (sweet potatoes cooked three different ways) and corn coffee, went on a snorkeling tour and visited its Spanish-era watchtower. In the afternoon we visited the small Hinagdanan Cave in Dauis, with its picturesque, underground spring-fed swimming pool, and watched the sun set at

the Punta Cruz Watchtower in Maribojoc. At the latter, we saw where the sea-bed was lifted more than a meter due to tectonic uplift. As a result, the coastline receded some 50 meters to 100 meters. In the evening, we shopped for seafood at the Manga Public Market (which was prepared and cooked for us and partaken of at Lic Lic Fastfood & Sutukil) in Tagbilaran City. Prior to dinner, we observed fireflies lighting up the trees along the Abatan River in Cortes. On our third and last day, we had a healthy lunch at the Bee Farm in Dauis. Here, we tasted malunggay ice cream, observed loom weaving and organic farming techniques, and bought their signature food products for pasalubong. This was followed by a visit to the Church of the Immaculate Conception in Baclayon whose facade was seriously damaged during the earthquake. Here, we toured its museum which displays an ivory statue of the crucified Christ, relics of Saint Ignatius Loyola, a statue of the Blessed Virgin (said to have been presented by Queen Catherine of Aragon), vestments, books, and church music. Prior to being dropped off at the airport, we again shopped for souvenirs at Aproniana Gift Shop, also in Baclayon. ■

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Tuesday, Thursday,November November18, 27,2014 2014Vol.Vol.1010No.No.4049

P25.00 nationwide | 6 sections 30 pages | 7 days a week

‘Expect fuel costs to go up’

health& fitness celebrates third anniversary

PETILLA SAYS s.c. order on TRANSFER OF OIL DEPOT TO CAUSE ‘LOGISTICS NIGHTMARE’

INSIDE

EAR Lord, we thank You for Your special presence as we were reading Your Word and pondering on it in our heart. We thank You for the opportunity to know Your Word, do service to You and learn Your ways better. Strengthen our will that we may put into practice what You have revealed to us through the Sacred Scriptures. Amen.

A broader look at today’s business

life

By Lenie Lectura

CARRASCAL BAGS AWARD FOR BEST MINING PROGRAM

he Supreme Court’s (SC) directive to the country’s big three oil firms to vacate the Pandacan oil depot in Manila could cause fuel prices to go up due to the ensuing “logistics nightmare,” the Department of Energy (DOE) said on Wednesday.

arrascal Nickel Corp. (CNC) once again bagged the coveted Best Mining Forest Program Award for Metallic Category for the year 2014. The award was given during the 61st Annual National Mine Safety and Environment Conference testimonial dinner on November 14 at Cap-John Hay Trade and Cultural Center at Camp John Hay in Baguio City. The company garnered a sky-high 95.70-percent rating, topping other veteran mines, such as Taganito Mining Corp., Carmen Copper Corp. and Philsaga Mining Corp. which were also in the top tier of the competition. CNC won the award for two consecutive years now, since it first entered the competition in 2013. CNC’s mine site is at the municipality of Carrascal, Surigao del Sur province. Since the start of its commercial operations in 2009, CNC experienced rapid growth through the commendable vision, teamwork and collaboration of its management and technical teams.

Energy Secretary Carlos Jericho L. Petilla made this pronouncement when asked about the possible repercussions of the closure of the Pandacan oil depot. “[Fuel] is going to be more expensive. Distribution cost will go up. How expensive? I don’t know,” Petilla said. “But it’s also a free market. It’s their prerogative [if they will increase prices]. They may maintain prices to be competitive, or they may increase it to survive, but it’s an open competition,” he added. Fuel prices have drastically gone down over the past weeks. An increase in prices on account of the High Tribunal’s order is not on the horizon, because it would take effect six months after the oil firms’ submission of an updated comprehensive plan and relocation schedule. Also, the oil firms could still file for a motion for reconsideration, which could push back their six-month timetable. Petilla said he is more apprehensive about the need to deliver aviation fuel, considering a truck ban is in place. The truck ban in Manila has caused monstrous traffic and delays in the delivery of commodities.

Louie R. Sarmiento (left), president of the Philippine Mine Safety and Environment Association, hands over the trophy to Antonio L. Co (center), president of the mining firm Carrascal Nickel Corp. (CNC), with William A. Kewan, resident manager of CNC.

See “Fuel costs,” A2

record goals! RECORD Sports GOALS!

Calax rebidding U.S. ECONOMY POSTS EVEN OFWs shielding real-estate to take place not STRONGER GROWTH IN Q3 sector from another bubble later than April T

BusinessMirror

| Thursday, November 27, 2014 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

The previous record of 71 had been set by former Real Madrid and Schalke striker Raul over the course of 142 matches. Raul’s record fell when Messi struck his first in the 38th minute to give Barcelona a 2-0 lead after Luis Suarez had opened the scoring. It was Messi’s 91st match in Europe’s top club competition.

ICOSIA, Cyprus—Barcelona’s Lionel Messi scored a hat trick to shatter the Champions League goal scoring record by taking his tally in the competition to 74 in a 4-0 win over APOEL on Tuesday. The previous record of 71 had been set by former Real Madrid and Schalke striker Raul over the course of 142 matches. Raul’s record fell when Messi struck his first in the 38th minute to give Barcelona a 2-0 lead after Luis Suarez had opened the scoring. It was Messi’s 91st match in Europe’s top club competition. Barcelona’s Brazilian midfielder Rafihna unleashed a powerful shot from some 20 yards out. Despite being closely marked, Messi was able to get a foot to the ball and redirect it past the helpless APOEL goalkeeper Urko Pardo. Messi’s teammates swarmed around him to congratulate the Argentina star on his achievement. He struck again in the 58th when a defense-splitting pass from Dani Alves put him through and Messi’s chip past Pardo bounced into the net off the post. Messi rounded off the scoring in the 87th minute of the Group F match, completing his 28th Barcelona hat trick and his fifth in the Champions League. Real Madrid’s Cristiano Ronaldo, who has scored 70 goals in the Champions League from its group stages onward, gets his chance to catch up with Messi’s record when the defending champions face Basel away on Wednesday. Messi’s latest feat came three days after he became the Spanish league’s all-time scorer by netting a hat trick to give him 253 goals in the domestic competition, two more than former Athletic Bilbao great Telmo Zarra scored from 1940-55. Messi was also the unanimous choice as leading player in the Associated Press Global Football 10 poll on Tuesday after his recordbreaking weekend. Messi received the maximum 180 points from the media voters for becoming the Spanish league’s all-time leading scorer with a hat trick as Barcelona thrashed Sevilla, 5-1. His treble took him to 253 career league goals, surpassing Telmo Zarra’s record of 251 set from 1940-1955. “Messi scored a hat trick against a very respectable side and broke a historic record,” voter Ubiratan Leal of trivela.com in Brazil said. “The Argentine is so good that this kind of achievement is losing its impact. All this seems so natural and predictable. But it is not, and I have to remind myself of that every Barcelona match.” Barcelona was also the top team and Neymar, who scored Barcelona’s second goal, is seventh in the player poll.

Paul Pogba was second to Messi after the midfielder scored twice as Serie A leader Juventus won 3-0 at Lazio, with Messi’s fellow Argentina international Carlos Tevez scoring the third. “Juventus made a statement in beating Lazio in the Italian capital this weekend, demonstrating the gap still existent between the Old Lady and the league’s emerging, better sides,” Sam Tighe of the Bleacher Report said. “Paul Pogba grabbed a brace as he continues his development into the best central midfielder in the world.” Cristiano Ronaldo was third after his two goals in Real Madrid’s 4-0 thrashing of Eibar took his league goal tally to 20 in only 11 games. Bundesliga leader Bayern Munich polled second in the team list with one more point than Juventus after thrashing Hoffenheim 4-0 to move seven points clear at the top. Arjen Robben and Mario Goetze both scored and were the pick of the players for the German side in fourth and 10th places respectively. Chelsea has extended its advantage to six points at the top of the Premier League and striker Diego Costa, who opened the scoring in its 2-0 win over West Brom, is fifth in the player poll. Wayne Rooney is a position further back after scoring the winner in Manchester United’s 2-1 victory at Arsenal on Saturday. Panelist Julian Bennetts believes the result could be the catalyst for Louis van Gaal’s side to produce the regular winning form that United is renowned for. “This could be a weekend that kickstarts the Louis van Gaal reign at Manchester United,” Bennetts said. “[It was] a vital win at Arsenal and a game that vindicated the Dutchman’s change in tactics ahead of the weekend.” Van Gaal and United had goalkeeper David de Gea to thank for the game being scoreless at halftime, and the Spain goalkeeper denied Arsenal further with his side leading 1-0. He enters the poll in eighth place this week. Elsewhere, Marseille ranks seventh after two late goals secured a 3-1 victory over Bordeaux to maintain its position at the of the French league with a point more than defending champion Paris Saint-Germain. Crystal Palace enters the top 10 teams in ninth this week after coming from behind to record an emphatic 3-1 win against Liverpool on Sunday. Cruzeiro is 10th after winning a second consecutive Brazilian league title. AP

By Butch Fernandez & Lorenz S. Marasigan

» lIonel MessI sets european record with 74 goals.

FIFA FAces ‘yeArs’ to rebuIld reputAtIon

ELFAST, Northern Ireland— International Football Federation SecretaryGeneral Jerome Valcke acknowledged on Tuesday that it will take “years to rebuild our reputation” following the World Cup bidding-corruption investigation. But Valcke insisted that Sony and Emirates airline are not ending their Fifa sponsorships to protest against allegations of bribery and favor-seeking that have engulfed world football in the four years since Russia was awarded the 2018 World Cup and Qatar was voted the 2022 hosts. Emirates has already announced it is not renewing its sponsorship and Valcke said he “would be surprised” if Sony extended its deal, which expires at the end of this year. “Both Sony and Emirates have nothing to do with the situation we are facing these last days,” Valcke

said, referring to the fallout from the bidding corruption report compiled by prosecutor Michael Garcia. “I know that football is still a very strong product and I am not really concerned with Fifa’s finances for the future.” But, speaking in Belfast after a meeting of the International Football Association Board, Valcke acknowledged the immediate future is not bright for Fifa’s global standing while insisting “we are doing a great job.” “The image of Fifa is something I agree, over the last two weeks I would not say reached the bottom, but has reached a level which is definitely a level which we will not go lower than,” Valcke said. “Things are happening, things have happened, but we are still doing a lot of good things. We have to rebuild this image day after day. It’s easy to destroy the reputation. It takes one second. It takes years to rebuild our reputation, but

that’s what we will do.” Sepp Blatter, the magnet for much of the criticism directed at Fifa, is seeking a fifth four-year term as president in May. Much of that criticism— particularly from Fifa’s own executive members—has centered on Blatter keeping Garcia’s full 430-page report into impropriety during World Cup bidding confidential. Blatter received a further demand for Garcia’s investigation to be released from the British government on Tuesday. Sajid Javid—the culture, media and sport secretary— wrote to Blatter, saying Fifa should be operating “with the highest ethical standards” and be able to find a way of publishing the report without contravening confidentiality assurances. “Without the disclosure of the full report, Fifa risks not just further damage to its own credibility, but now significant damage to the reputation of football as a whole,” Javid wrote. Valcke, Fifa’s top administrator, said the report must stay secret to “mainly to protect 75 persons who

have made a deposition and were given confidentiality” including himself. The sense of disarray at Fifa heightened when Garcia objected to ethics judge Joachim Eckert’s interpretation of his investigative work, appealing to Fifa citing “numerous materially incomplete and erroneous representations” of his work. “It’s said it’s a bit Fifa versus Fifa,” Valcke said. “It’s sad for Fifa definitely, and it’s sad for our reputation and for the image. It’s sad for commercial partners, it’s sad for all the people who are supporting football.” The Garcia-Eckert clash has led to Domenico Scala, the head of Fifa’s auditing committee, being allowed to review the full investigation findings. “I hope deeply the decision would be that this bidding process on ‘18 and ‘22 is closed,” Valcke said, hopeful Russia and Qatar will retain their hosting rights. But Switzerland’s attorney general is looking into possible law-breaking by unnamed individuals highlighted in Garcia’s investigation. AP

World cHess cHAMp

norway’s Magnus carlsen lifts his trophy after beating India’s Vishwanathan Anand in the Fide World chess championship in sochi, russia, on tuesday. carlsen retained the title after defeating Anand, a former world champion, 6.5-4.5. AP

sports

he fresh tender for the P35.42-billion Cavite-Laguna Expressway (Calax) deal will be staged not later than the first half of 2015, a Palace spokesman said on Wednesday. Palace Spokesman Edwin S. Lacierda said the Department of Public Works and Highways (DPWH) aims to put the contract on the auction block by April 2015, almost a year after the initial bidding was staged. See “Calax,” A2

PESO exchange rates n US 44.9600

he United States economy grew even faster in the third quarter than initially thought, posting the strongest six months of growth in more than a decade and pulling further ahead of other big economies of the world. The gross domestic product (GDP), the country’s total output of goods and services, expanded at a healthy 3.9-percent annual rate in the July-to-September period, the Commerce Department reported on Tuesday. That’s a notable jump from its first estimate of 3.5 percent. The revision was propelled higher by more robust consumer and business spending. Together with a 4.6-percent surge in the spring, the country has recorded its biggest back-to-back quarterly performance since 2003. See “U.S. economy,” A8

By Manuel T. Cayon

Mindanao Bureau Chief

AVAO CITY—Around 3 percent, or P27 billion, of the estimated P980 billion in remittances sent home by overseas Filipino workers (OFWs) to their families last year were spent in real-estate purchases, a real-estate company operating a popular online search portal for available Philippine real-estate properties said. Arthur M. Gonzales, vice president for Mindanao of FilipinoHomes.com, a Web-linked real-

estate company, said that OFWs funneled this much money last year to the renting and buying of houses and lots, commercial properties and other real-estate investments in the Philippines. He said the amount represented a sizable portion of the total $22.8 billion (P980 billion) in cash remittances sent home by more or less 10 million OFWs last year. “This year we expect OFWs to spend as much as P40 billion on acquiring properties,” he said. Overseas Filipino spending has See “OFws,” A8

n japan 0.3812 n UK 70.6232 n HK 5.7974 n CHINA 7.3266 n singapore 34.5793 n australia 38.3422 n EU 56.0831 n SAUDI arabia 11.9833 Source: BSP (26 November 2014)

News BusinessMirror

Thursday, November 27, 2014

news@businessmirror.com.ph

House urged to prioritize passage of economic bills Continued from A8

Forbes also asked Congress to repeal Republic Act 3018 which restricts foreign participation in the country’s rice and corn trade. Local businessmen belonging to the Philippine Chamber of Commerce and Industry (PCCI) pushed for the passage of the Philippine Fair Competition Act which will prohibit anti-competitive agreements, distortion and manipulation of the local market. PCCI President Donald Dee said the enacting the measure is needed to fulfill the country’s commitment under the Asean Economic Community blue-

print which calls for the implementation of national competition laws in all member-states of the Association of Asean. The House Committee on Trade and Industry and the House Committee on Appropriations have recently approved a consolidated bill on Philippine fair competition. To strengthen Philippine judiciary, Canadian Chamber of Commerce of the Philippines President Julian Payne called for the removal of the Department of Justice, Office of the Ombudsman, Court of Appeals, Sandiganbayan and Supreme Court

Fuel costs. . . continued from a1

“What worries me is not so much the supply because the supply is there. What I have to ask them is have they prepared for aviation fuel? If the depot will be relocated in Batangas or Bataan, we see problems due to the truck ban,” he said. “If fuel will come from Batangas, they have to be smart in deploying their trucks because the area is already congested plus there is a truck ban in Manila. Basically, it will simply be a challenge for them because there is a problem of transporting the fuel,” Petilla added. When asked if he will push for the lifting of the truck ban, Petilla said he will urge oil firms to do a simulation and coordinate with the Metro Manila Development Authority. The SC gave respondents Chevron Philippines Inc., Pilipinas Shell Petroleum Corp., and Petron Corp. 45 days to submit an updated comprehensive plan and relocation schedule. After which, they are given six months within which to move out of Pandacan. The SC issued the order after it declared unconstitutional and invalid Manila City Ordinance 8187, which allows continuous operation of the Pandacan oil terminals by the country’s major oil companies.

Petron and Shell, in separate statements, said they will comply with the High Court’s ruling. “Petron respects and will abide with the SC’s decision to cease operation of Pandacan terminal,” the country’s largest oil refiner said on Tuesday upon release of the SC order. When sought for comment, Petron Chairman Ramon S. Ang said in a text message that “Petron will comply.” In May Ang said Petron is committed to leave Pandacan next year. “By end of 2015, we are totally out of Pandacan. We have started to transfer our depot, for example in Limay, Bataan; Rosario in Cavite; and in Navotas. We are law-abiding citizens.” “When we promised the city government of Manila that within five years we will be moving out of Pandacan, we will. I think we are the only oil firm in compliance to that promise,”he added. Ang assured that the relocation would not result in any fuel-price increase. He said Petron’s operational costs could even go down upon relocation of its oil depot to new sites. The oil firm is spending P15 billion for the transfer. Shell, for it part, said it could not further comment until its lawyers have secured an official copy of the decision. “We have yet to receive the court order to enable us to

from the coverage of the Government Salary Standardization. Payne said this will make the salaries of prosecutors and members of the judiciary more competitive. Payne also pushed for the passage of a Whistleblowers Protection Act and a Witness Protection, Security and Benefits Act, which will provide effective legal protection and rewards system to whistle-blowers and state witness to embolden them to come forward and support the prosecution of corrupt public officials. Belmonte, for his part, said the priority list of legislative measures

drawn up by the JFC, the local business groups and the lower chamber are almost identical. “I do not think that we are here to argue or preach to one another, but to map out directions and strengthen our collaboration for the passage of legislations that would uplift the lives of the people,” he said. “We want to encourage them to invest more in our country. We have seen the major vehicle of our growth was their big foreign direct investments. So we make it a point to have a dialogue with them on an annual basis so we know what they want,” Belmonte added.

comment further. Rest assured that Shell will observe the rule of law and good governance.” Petilla said he thinks the oil firms can make do with the six-month period. Chevron, for one, has started to move out of Pandacan in June. “For Petron and Shell, they already have interim plans. I just don’t know how advanced their plans are. Petron has since started to move out. For Shell, I don’t know if they are going to implement it now,” he said. Some lawyers said it would be difficult to convince the court to reverse its November 25 decision. Out of the 12 justices, 10 voted to declare the Manila City Ordinance unconstitutional. “It’s going to be tough. They can file for a motion of reconsideration but a court that voted 10-2, seems difficult to convince otherwise. It will take seven of them to overturn the decision,” noted one lawyer who requested for anonymity. Another industry lawyer said the oil firms are already aware of this but filing for a motion for reconsideration could give the oil firms more time, much longer than six months. “On the other hand, it will delay the implementation which could mean that it will delay everything,” the other lawyer said. None of the oil firms replied when

asked if they plan to file for a motion for reconsideration. Petilla, however, said it’s their prerogative. “It will be up to them to appeal the decision but I think in the past, they’ve seen this coming already and they have contingency plans. Personally, I think, even if you appeal it, if the LGU [local government unit] is really against you then you will have a hard time. It’s going to be difficult to relocate in other areas where you are not welcome,” he said. The energy chief said he will ask the oil firms to submit their respective contingency plans. “We will now ask them what their contingency plans are for our own internal consumption,” Petilla said while adding that new permits from the LGU would have to be secured before relocation. “Actually they have other depots now. What will only happen is that they will close down their operations in Pandacan. They will just continue operations in their other depots or refineries. The thing is their distribution cost will be more expensive,” he added. For now, Petilla’s fears—a possible fuel price hike, logistics difficulty and horrendous traffic—will have to take a back seat until the oil firms have vacated the Pandacan oil depot.

3-DAY EXTENDED FORECAST

TODAY’S WEATHER

NOVEMBER 27, 2014 | FRIDAY

NOV 28 FRIDAY

NOV 29

SATURDAY

NOV 30 SUNDAY

Calax. . . continued from a1

The agency is now finalizing the deal’s new terms of reference (TOR). “We are just preparing the TOR for the rebidding and we are looking for a period not longer than five months since it will be a new bidding,” Lacierda quoted Public Works Secretary Rogelio L. Singson as saying. He noted the Palace has instructed the agency to fast-track the process for the rebidding. The four parties that previously participated in the original tender were at loggerheads over their participation in the fresh auction. San Miguel Corp. President and COO Ramon S. Ang has said his firm’s subsidiary Optimal Infrastructure Development Inc. will participate in the bidding. Metro Pacific Investments Corp., meanwhile, is still weighing the economic and political implications of the original auction. It, however, renewed its bid bond, signifying its intention to join the fresh tender. MTD Philippines Inc. President Isaac S. David has expressed his firm’s disinterest in the deal, saying the government’s thirst for higher premium would be a deterrent to the riding public. Team Orion of AC Infrastructure Holdings Corp. and Aboitiz Land Inc. have repeatedly said they will not join the tender despite being the top bidder during the original auction held in June. President Aquino effectively voided the initial bidding conducted by the DPWH’s Special Bids and Awards Committee for the public-private partnership project when he decided on November 19 to put the contract to a fresh auction, rueing the P8-billion difference between the winning bid of Team Orion and disqualified party Optimal. Team Orion emerged as the front-runner during the auction, submitting an P11.66-billion premium to win the deal. Rival Optimal, whose bid was disqualified after failing the evaluation of its technical proposal, allegedly offered a higher P20.1-billion premium. Business groups, led by the Makati Business Club, earlier warned President Aquino that his key infrastructure program’s good name may lose its credibility due to inconsistencies in rules, not to mention an alleged violation of the law. But the Philippine Chamber of Commerce and Industry, the largest business group in the Philippines, backed Mr. Aquino’s decision, as the rebidding would optimize the economic benefits for the state. The project is a 47-kilometer thoroughfare that would start from the Manila-Cavite Expressway in Kawit, Cavite, and end at the South Luzon Expressway (Slex)-Mamplasan Interchange in Biñan, Laguna. It would consist of nine interchanges and a toll barrier before the Slex.

3-DAY EXTENDED FORECAST

NOV 28

NOV 29

NOV 30

FRIDAY

SATURDAY

25 – 32°C

26 – 32°C

SUNDAY

METRO MANILA

23 – 32°C

22 – 32°C

23 – 33°C

METRO CEBU

TUGUEGARAO

23 – 32°C

23 – 33°C

23 – 34°C

TACLOBAN

24 – 31°C

23 – 30°C

24 – 31°C

22 – 32°C

CAGAYAN DE ORO

23 – 30°C

24 – 31°C

24 – 32°C

METRO DAVAO

24 – 32°C

25 – 32°C

25 – 33°C

24 – 32°C

25 – 33°C

25 – 34°C

TROPICAL DEPRESSION “QUEENIE”

Tropical Depression is a cyclone category with winds of 30 - 60 kph.

WAS LOCATED AT 60 KM EAST NORTHEAST OF HINATUAN, SURIGAO DEL SUR (AS OF NOVEMBER 26, 5:00 PM)

LAOAG

RAINS WITH GUSTYWINDS

LAOAG CITY 23 – 31°C

SBMA/CLARK 24 – 32°C TAGAYTAY CITY 22 – 30°C

METRO MANILA 23 – 32°C

22 – 31°C

BAGUIO

15 – 24°C

16 – 24°C

SBMA/ CLARK

24 – 32°C

24 – 33°C

TUGUEGARAO CITY 23 – 32°C BAGUIO CITY 15 – 24°C

23 – 31°C

TAGAYTAY

22 – 31°C

16 – 24°C

24 – 33°C

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

PUERTO PRINCESA CITY 24 – 31°C

ILOILO/ BACOLOD 25 – 31°C

TACLOBAN CITY 23 – 30°C

METRO CEBU 24 – 31°C

ZAMBOANGA CITY 24 – 32°C

CAGAYAN DE ORO CITY 23 – 30°C METRO DAVAO 23 – 31°C

24 – 31°C

23 – 30°C

SUNRISE

SUNSET

MOONSET

MOONRISE

6:03 AM

5:24 PM

10:05 PM

10:09 AM

21 – 30°C

LEGAZPI CITY 23 – 30°C

LEGAZPI

ZAMBOANGA

23– 29°C

NEW MOON

24 – 32°C

25 – 33°C

ILOILO/ BACOLOD

24 – 31°C

25 – 32°C

25 – 33°C

8:32 PM

NOV 29

6:06 PM

CELEBES SEA

8:35 PM

-0.21 METER

12:02 AM

1.13 METER

Partly cloudy to cloudy skies with isolated rain showers and/or thunderstorms Cloudy skies with rain showers and/or thunderstorms. Rains with gusty winds

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Economy

A4 Thursday, November 27, 2014 • Editors: Vittorio V. Vitug and Max V. de Leon

Solon: ‘Enough with legislative inquiries on port congestion’

lawmaker on Wednesday has called on his colleagues to stop the hearings on the portcongestion issue, saying the problem has been solved, and that government agencies are already working to address the issue. Liberal Party Rep. Fernando Gonzales of Albay made this remark after Raul Santos, Philippine Ports Authority (PPA) assistant general manager, reported to the House Committee on Transportation in a recent hearing that congestion at the ports in Manila has started go down and that the utilization has eased up despite the increasing volumes. “Congestion is dwindling and utilization has come to a manageable level, but we at the PPA continue to coordinate with the Cabinet cluster on port congestion,” Santos said. Gonzalez, vice chairman of the transportation committee, said there is no congestion in the ports in the first place. “Our ports have the capacity. It is operated well. The problem is that road capacity has not coped up with the capacity of the ports,” he added. Gonzalez, who worked as a young stevedore in Legazpi port, was former operations manager of a local stevedoring firm. He also worked overseas in the ports of Jeddah and Dammam in Saudi Arabia for 10 years until his return to the Philippines in 1987. He also likened the port to the human heart and the road network to arteries. “Even if you have an extremely powerful and strong heart, but if the arteries are clogged, what happens?” Gonzalez said. “The next step is for the government to expand road infrastructure. The problem is not the port but the limited roads that serve the port,” he added. Jovee Marie N. dela Cruz

BusinessMirror

news@businessmirror.com.ph

House eyes passage of P23.3-billion supplemental budget by December

By Jovee Marie N. dela Cruz

he House of Representatives is planning to pass a P23.3billion supplemental budget before the year ends to continue all the projects halted by the abolition of the Priority Development Assistance Fund (PDAF) and the Disbursement Acceleration Program (DAP). Speaker Feliciano Belmonte Jr., in an interview, said the supplemental budget will also fund infrastructure projects for post-Yolanda rehabilitation and preparations for the 2015 Asia-Pacific Economic Cooperation (Apec) summit. “We had a brief meeting [with

Budget Secretary Florencio Abad about the supplemental budget]. We expect to file it by next week,” Belmonte said. “Some of the DAP projects were only completed but has not been paid yet. That’s among those that are included. Some of them are

about to be completed when the Supreme Court prohibits the [use of PDAF and DAP]. I think we should complete that,” he said. Under the Department of Budget and Management-proposed P23. 3 - bi l l ion supplement a l budget, P5.08 billion will be allocated for previously approved projects, but were stopped due to SC rulings against the PDAF and DAP. The DBM said that P1.85 billion will be spent for infrastructure projects being implemented by the Department of Public Works and Highways. It said that other parts of the supplemental budget will be used to fund Yolanda reconstruction efforts and government preparations for the 2015 Apec summit. According to Abad, “The funds will account for the budgetary requirements of priority projects

that were partially implemented or previously approved for implementation this year.” “Most of these projects have already been completed, are ongoing, or are urgently needed to sustain our socioeconomic development. The passage of the proposed supplemental budget will allow us to allocate funds accordingly so we can complete these projects right away,” Abad added. Moreover, Belmonte assured the public that the passage of the supplemental budget will go under thorough scrutiny and deliberation of a House committee. Earlier, House Senior Deputy Minority Leader and Party-list Rep. Neri Colmenares of Bayan Muna criticized the supplemental budget proposal, fearing it may just be used for the campaigns of administration politicians in the 2016 elections.

Senate OKs higher tax cap for 13th-month pay, bonus By Recto Mercene

mployees from both the private and public sector can expect a bigger take-home pay soon, but probably not this year, with the Senate’s approval of a bill seeking to raise the tax-exemption ceiling of 13th-month pay and other benefits from P30,000 to P82,000. Sen. Juan Edgardo Angara, coauthor and sponsor of Senate Bill (SB) 2437, said that once the bill is enacted into law, employees receiving 13th-month pay and other benefits, including Christmas and productivity bonuses, not exceeding P82,000, will be exempted from tax. The original bill pegged the ceiling for tax-exempt bonuses at P75,000 but was raised to P82,000 as proposed by Sen. Ralph Recto during plenary deliberations. Angara, chairman of the Senate Committee on Ways and Means, said he accepted Recto’s amendments because his proposal was the “same figure given by Revenue Commissioner Kim Jacinto-Hernares in one of the previous hearings on SB 2437.” “She [Henares] said that P30,000 in 1994 would be worth around P82,000 today,” Angara said.

Senate President Franklin M. Drilon concurred with the move, saying that the bill’s passage is necessary “to provide relief to state and private workers whose purchasing power has been shrinking for years due to inflation, but still have had to deal with the consequences of an outdated law.” When the P30,000 tax ceiling was first legislated in 1994, Angara explained, the basic salary of a government employee in the lowest rung was P3,800, a month while that of the President was P25,000. The ceiling, he noted, had not been adjusted in 20 years although Congress had legislated other measures to soften the impact of inflation on the workers. More important, Angara said, SB 2437 had included a provision “that the adjustment be made mandatorily every three years to coincide with major surveys conducted by the Philippine Statistics Authority such as the Family and Income Expenditure Survey.” Recto, principal author of the bill, said the peso had lost two-thirds of its value over the past 20 years. The equivalent of P1 in 1994, he said, was worth 36 centavos today. Recto was the director general of the National

Economic and Development Authority in 2008. “When the 17-year-old Bam Aquino sipped his first beer in 1994, Pale Pilsen cost P8.50 a bottle. Of course, Sen. Sonny Angara, on vacation from his London studies then—or I am told that he graduated in 1994—and if he were to borrow one of his dad’s cars, he would have paid P8.50 for a liter of gasoline,” Recto said in his co-sponsorship speech. While some experts estimated that the government would lose around P42 billion in taxes with the enactment of SB 2437 into law, Recto argued that there was no basis for the computation. A more reasonable computation of tax loss, he said, was estimated by the Philippine Institute for Development Studies at P2.6 billion and Dr. Stella Quimbo of the University of the Philippines School of Economics at P5.6 billion. “But whatever is the revenue loss for the government is actually income gained for the working man. And even if his 13th-month pay is tax-exempt upon receipt, it will be taxable when spent,” Recto said, adding that taxes not withheld at source will later be captured in the form of

sales tax at points of sales. In response to concerns about the speedy implementation of the law, Drilon had also introduced an amendment to the bill stating that “the failure of the Secretary of Finance to promulgate the necessary rules and regulations shall not prevent the effectivity of the law.” “This is because it is up to the Department of Finance and the Bureau of Internal Revenue to come up with the implementing rules and regulations when this law is passed, and they may not have enough time to accomplish that in time. But surely, the law will be fully implemented next year,” the Senate leader assured. For his part, Sen. Manuel “Lito” Lapid Jr. then said that “increasing the cap of exemption on the 13th month pay and other benefits from income tax would increase the disposable income of the working class. This in turn, Lapid said in his cosponsorship speech, would stimulate consumption. “All reasons to increase the cap for the tax exemption on the 13thmonth and other benefits points to one thing: to enhance the welfare of the working class,” Lapid said.

SC asked to stop bidding for PCOS machines A

Consultation with stakeholders

Bases Conversion and Development Authority (BCDA) President and CEO Arnel Paciano D. Casanova discusses with some 200 residents of Capas, Tarlac, the plan to build a smart, green and disaster-resilient city called the Clark Green City at the government-owned Clark Special Economic Zone in Capas, Tarlac. During the consultation, Casanova said town residents will be among the primary beneficiaries and stakeholders of the Clark Green City project who will benefit the most in BCDA’s most ambitious project to date. Casanova called on the residents to work with the BCDA in building the country’s most modern city. In May President Aquino approved the master development plan of Clark Green City and gave the green light to start the development of the first phase. BCDA reels from the success of developing the Bonifacio Global City, the country’s most beautifully planned and developed city using the best practices around the world.

By Joel R. San Juan

PETITION has been filed before the Supreme Court (SC) seeking the issuance of a temporary restraining order to stop the Commission on Elections (Comelec) from proceeding with the public bidding for the supply, lease or purchase of Precinct Count Optical Scan (PCOS) voting machines scheduled on December 4. In a 19-page petition, former Assemblyman Homobono Adaza also asked the Court to enjoin Smartmatic Inc. from participating in any public bidding for new PCOS machines. Adaza argued that the appropriation of billions of pesos to procure additional PCOS machines without undertaking an inventory and technical and forensic tests of the more than 80,000 PCOS machines constitute grave abuse of discretion and a violation of the provisions of the Constitution. “Considering that many PCOS machines remain unaccounted for and considering, further, that the remaining PCOS machines are now stored in a warehouse without any configuration facilities, there is no way to determine how many are still usable or can still be repaired,” the petitioner said. “Without making the inventory desired tests, it is absolutely a grave abuse of power for respondent Comelec to disburse billions of pesos and conduct public bidding for acquisition of voting machines, which may not be necessary and will involve wastage of billions of pesos,” he added. Adaza added that the Comelec should exclude Smartmatic from participating in the bidding process for its “glaring” violations of election laws. “The inclusion of respondent Smartmatic in the December 4, 2014 bidding, should be enjoined as the same constitutes grave abuse of discretion,” Adaza said.

This developed as an election watchdog group formally asked the Comelec to blacklist Smartmatic from participating in all election-related projects for misrepresentation, having claimed that it owned the automated election technology, and numerous violations of the country’s election laws. The Citizens for Clean and Credible Elections (C3E) said Smartmatic also failed to meet several provisions in the 2010 Automated Election System Project Contract, including its failure to deliver the required services in a specified period. C3E Spokesman and National Labor Union President Dave Diwa said that aside from these shortcomings, Smartmatic is also guilty of misinformation when it declared that Taiwan-based Jarltech International Corp. was its subsidiary in its qualification statements. Smartmatic submitted Jarltech’s ISO-9001 certification as part of the requirements for eligibility to bid, claiming that they are a majority owner of Jarltech, while, in fact, they are merely subcontracting Jarltech for the manufacture of the PCOS machines. It was also uncovered that Smartmatic did not own the automated election technology that it provided to the Comelec when it (Smartmatic) sued Dominion Voting Systems of Canada for failing to supply “fully functional technology...[and] timely technical support.…” It also held Dominion liable for its failure to deposit in escrow the required source code for the software, and its manufacturing design. Diwa said the lawsuit, which Smartmatic filed in September 2012 in the Delaware chancery court, was a clear evidence and Smarmatic’s admission it did not own the automated voting technology that it provided to the Comelec, a clear misrepresentation and violation of the terms of contract and election laws.

briefs

lower chamber keen on tapping solar energy for power House Speaker Feliciano Belmonte Jr. on Wednesday said they are seriously considering the installation of solar panels at the House of Representatives to generate part of the chamber’s energy requirements as the use of renewable-energy sources is the direction that the Philippines is taking. “Green energy is a terrific thing and the logical thing to do,” Belmonte said in a chance encounter with reporters at the sidelines of the meeting of House leaders with the Joint Foreign Chambers and Philippine business groups. The Speaker made the statement after personally attending the launching on Monday of the largest solar rooftop installation in the Philippines at the SM City North Edsa’s multilevel parking building in Quezon City. The system is composed of 5,760 solar panels occupying 11,511 square meters of the SM building’s roof deck. It is expected to power 5 percent of the mall’s daily energy consumption, saving the mall an estimated P2 million a month. Belmonte also urged other business establishments as well as government agencies to, likewise, seriously consider installing similar systems in their buildings not just to reduce dependence on fossil fuels—the main fuel for our power generators—but also of its positive impact to the environment. “They should visit SM and see for themselves the system. I was assured that people could view it for free. I, myself, am considering of installing a solar-panel system in my residence,” Belmonte said. Besides being eco-friendly, he was assured that the system is also easily installed, which is about six to 10 months for the one like SM’s. In the meantime, Belmonte said he would meet with the House leadership on the matter in order to properly discuss the various issues in installing a similar system at the House of Representatives. PNA

mmda creates tf phantom to manage holiday traffic on edsa The Metropolitan Manila Development Authority (MMDA) on Wednesday formed Task Force Phantom to help in the effective management of traffic within the vicinity of shopping malls in Metro Manila during the holiday season. MMDA Chairman Francis Tolentino said the task force is composed of 15 motorcycle traffic enforcers and 15 members of the Philippine National Police Highway Patrol Group. Tolentino said that members of the task force will join traffic enforcers and security personnel in alleviating traffic congestion in the vicinity of shopping malls along Epifanio de los Santos Avenue (Edsa). He added that the task force members and security guards will be given a crash course on traffic management by the MMDA. “They will also seize violators of the drunk-driving law [especially among holiday revelers],” he said. Apart from securing the holiday shopping season, the task force will assist in the traffic-management operations, provide motorcycleescort security and crowd-control operations on the Feast of the Black Nazarene in January, and the Philippines’s hosting of the AsiaPacific Economic Cooperation summit next year. The task force will be deployed to both Manila and Tacloban, where Pope Francis will have engagements during his visit from January 15 to 19. Claudeth Mocon-Ciriaco

Opinion BusinessMirror

A6 Thursday, November 27, 2014

Editor: Alvin I. Dacanay

editorial

A waste of time

HILE it may be entertaining for many people to indulge in a bit of mudslinging as the 2016 elections loom, a crisis is about to explode in our midst.

You guessed it: Trash. Based on the Metropolitan Manila Development Authority’s (MMDA) solid-waste management data for the first half of the year, the agency had disposed 26,776.93 cubic meters of solid waste daily, or 9,773,580.78 cubic meters per year. A Philippines Graphic magazine report on the subject says “this was equivalent to 55 percent of the estimated waste [that] generated 43,491.39 cubic meters per day.” “For the period of January to June this year, the agency was able to increase by 12 percent the actual volume disposed to 26,838.37 cubic meters per day,” it adds. The data were culled as part of the MMDA’s compliance with the environmental standards for the operation of dumpsites and landfills provided for under Republic Act 9003, or the Ecological Solid Waste Management Act. As for the Navotas-Tanza landfill and the Rizal Provincial Sanitary Landfill, which serve 17 local government units in Metro Manila, there are still six years’ worth of space left. For the Quezon City sanitary landfill, however, a serious problem looms. The MMDA data show that it has an initial space of 3 hectares that are capable of accommodating 6,570,000 cubic meters of solid waste for three years. This is crucial, because Quezon City has the largest land area in Metro Manila and, thus, has one of the highest trash-generation rates in any city. The report also says, “Based on the data of the Solid Waste Management Office of the MMDA, this landfill has only 89,107 cubic meters of space left, or 1.4 percent of its initial capacity. However, there is a plan to expand the Quezon City sanitary landfill’s space by 4 hectares, which will give it an additional capacity to accommodate solid waste for an estimated four to five years.” Additional data show that the 292,217-square-meter Quezon City landfill has an estimated 31,422 sq m of space left. This means that the city’s landfill is “computed to reach full capacity by March 2015.” March 2015—that’s a few months from now. If, by any chance, the city acquires additional hectares for the dumping of the city’s garbage, then all will be well. However, it would do us well to remember that four to five years of extended capacity for landfills and dumpsites are a mere blink of an eye. There must be a way to improve our waste-management strategy for the long haul, outside of the commonplace strategies that local governments are currently employing. Waste management needs the cooperation of all—private individuals, corporations included. And the government should refrain from making it difficult for private corporations to invest in state-of-the-art engineered sanitary landfills. The problem has reached such proportions that the government must now seek the help of private corporations. The investment is, no doubt, worthwhile.

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

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The monster in the closet John Mangun

OUTSIDE THE BOX

HILDREN are sometimes afraid that there is a monster hiding in their closet. This comes from the mistaken belief that monsters always hide in closets. It would be relatively simple for children to banish their fear. All they need to do is open the closet and look inside. But children will not open it, because they’re afraid they might be right and actually find a monster hiding there. “Experts” on the Philippine economy have their own beliefs about monsters hiding in the closet. But they will not open it, because they’re afraid there’s no monster inside and that they might be proven wrong. If you believe that the Philippines is facing a property bubble, then you probably are also afraid to look inside your closet for fear of monsters. This is the way the real world works: If property prices are too high, then people will stop buying. The developers have two choices: They can do what the major developers did during the 1997 Asian financial crisis and just sit on the units without lowering prices. Once the economy improves and people are willing to pay the “high” price, sales will increase. Can the developers afford to sit

on unsold units? Can they continue to service their debt payments? Looking at the financial statements of the publically listed property companies, the answer is yes, even if, in the worst case, the banks need to cooperate. But we will get to that in a moment. Alternatively, the developers could lower prices to stimulate sales. It is an amazing factor of the free market that you can lower the price to attract more customers. The experts may not have heard of this technique, but some say the Babylonian Code of Hammurabi, which reputedly date back to about 1754 B.C., contains a section on “buy one, take one” rules. Business owners are very smart; experts, not so much. Almost every evening, at virtually every mall in

Japan is running out of options

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the Philippines, there is a “food bubble”. That is why, at many stalls in the food courts, there is a sign that says something like “25-percent discount after 8 p.m.” Profits are made when business is booming, and the cost of raw materials is recovered by selling at a discount when business is slow. The same market forces apply to the real-estate industry. In the November 23 issue of the BusinessMirror, the headline was: “Banks’ property-sector exposure exceeds P1 trillion”. For me, that is good news, as it shows growth in an important part of our economy. For some experts, though, that means there is a monster in the closet. But let’s open it and look inside. Of that P1 trillion, 84 percent was for loans, while the remaining 16 percent was for real-estate securities or publically listed stocks. Considering that the top five property developers’ share prices are up between 14 percent and 40 percent in 2014, I would say that the banks’ P172.9-billion investment was pretty smart. “Land developers, construction companies and other corporate entities obtained 60 percent of the real-estate loans, while borrowers acquiring residential properties received the remaining 40 percent,” the Bangko Sentral ng Pilipinas said in the BusinessMirror report. Majority of the loans are going

William Pesek

BLOOMBERG VIEW

HE New York Times recently lit up the Japanese Twittersphere with a cartoon that was a little too accurate for comfort. In it, a stretcher marked “economy” is loaded into an ambulance with “Abenomics” painted on the side; the vehicle lacks tires and sits atop cinder blocks. Japanese Prime Minister Shinzo Abe looks on nervously, holding an IV bag. The image aptly sums up Japan’s failure to gain traction in its push to end deflation. The Bank of Japan’s (BOJ) unprecedented stimulus and Abe’s pro-growth reforms have yet to spur a recovery in inflation and gross domestic product growth; and the country is, yet again, in recession. Worse, BOJ Governor Haruhiko Kuroda is rapidly running out of weapons in his battle to eradicate Japan’s “deflationary mind-set”. Minutes from the central bank’s October 31 board meeting, in which

officials surprised the world by expanding an already massive quantitative-easing program, show that Kuroda now has a budding mutiny on his hands. Many of his staffers think that the central bank has already gone too far to weaken the yen and buy virtually every bond in sight. That’s a problem for Kuroda and Abe in two ways. First, board members warned that the costs of additional monetary stimulus outweigh the benefits. We already knew that Kuroda had

only won approval for his shockand-awe announcement by a paperthin 5 to 4 margin, and that Takahide Kiuchi dissented when the BOJ boosted bond sales to about $700 billion annually. But the minutes suggest that Kuroda came as close to any modern BOJ leader ever has to defeat on a policy move. Cautionary voices like Kiuchi’s worry that the BOJ could be “perceived as effectively financing fiscal deficits.” I’d say it’s too late for that. Of course, the BOJ is acting as the Ministry of Finance’s automated teller machine, just as Abe intended when he hired Kuroda. Still, the fact is that Kuroda’s odds of getting away with yet another Friday surprise are nil, at best. Second, maintaining stability in the bond market just got harder. The only way Kuroda can stop 10year yields—currently at 0.44 percent—from spiking as he tries to generate 2-percent inflation is by making even bigger bond purchases. But fellow BOJ board members will be giving Kuroda less latitude to cap market rates. Japan is lucky in one

to developers that intend to profit from using them, and not loaned to property buyers, whom the experts tell us are dumb to buy real estate during a bubble. Because the experts have never looked inside a Philippine-property closet, they do not know that Philippine property developers spend very little of their borrowed money until they start selling the units during the preconstruction phase. In the United States a developer cannot sell until it reaches a certain stage of construction. In the Philippines units can be sold once the Housing and Land Use Regulatory Board’s “Certificate of Registration and License to Sell” has been approved. This allows for less risk to the banks and helps ensure that borrowers can service their debt from ongoing sales. This system works very well, as evidenced by the fact that the banks’ nonperforming loans are only 2.64 percent of their total real-estate loan portfolio—and it’s decreasing. If you want to find monsters, go see a movie. Do not bother looking at the Philippine property industry. Send me an e-mail at mangun@ gmail.com. Visit my website at www. mangunonmarkets.com. Follow me on Twitter at @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

way: Given that more than 90 percent of public debt is held domestically, Tokyo can avoid the wrath of the “bond vigilantes”. Kuroda further neutralized these activist traders by saying there’s “no limit” to what he can do to make Abenomics work. The fact that so many of his colleagues are skeptical of the policy, however, undermines Kuroda’s credibility. If markets begin to doubt his staying power, yields are sure to rise. The answer, of course, is for Abe to get more serious about deregulating the economy; that was the thrust of Kiuchi’s dissenting vote last month. Unfortunately, progress on Abe’s so-called thirdarrow reforms is set to slow as Tokyo stops all business to contest a December 14 election. The vote could well leave Abe with a smaller mandate for change than he won in 2012. Whatever the margin, though, the prime minister needs to act faster to increase competitiveness. Or the next thing being placed in an ambulance could be his premiership.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Certificate of tax exemption is not mandatory Atty. Rodel C. Unciano

Tax Law for Business

UCH has been said about nonstock, nonprofit entities, but because of the apparent instability of the rules governing their taxability, the time has come for us to revisit the subject. This time, however, we do so with the optimism that the long-standing issue of these entities’ taxability will now be put to rest, thanks to the promulgation of Court of Tax Appeals (CTA) Case 8377 on November 4. In this case, the CTA ruled that the certificate of tax exemption is not a condition precedent for the nonstock, nonprofit educational institutions’ entitlement to incometax exemption. The tax court ruled that these institutions do not need to secure a ruling from the Bureau of Internal Revenue (BIR) to enjoy a tax exemption on their tax-exempt activities. In retrospect, Revenue Memorandum Order (RMO) 34-2014, dated September 18, has clarified that tax-exemption rulings neither confer nor abrogate exemptions granted by law. However, reading through the order’s provisions, it appears that the BIR still requires the filing of an application for a taxexemption ruling. While RMO 34-2014 declares the BIR’s position that the absence of a valid, current and subsisting taxexemption ruling does not divest qualified entities of the tax exemption provided under the 1987 Philippine Constitution or Section 30 of the Tax Code of 1997, the same order, however, reiterates the provisions of RMO 08-2014, which states that the failure of the nonstock, nonprofit entity to present its valid, current and subsisting tax-exemption ruling to the appropriate withholding agents shall subject it to the payment of the withholding taxes due on their transactions, and that the withholding agents’ failure to withhold, notwithstanding the lack of a tax-exemption ruling, shall cause the imposition of penalties under Section 251 and other pertinent sections of the Tax Code. Hence, following the provisions of RMO 34-2014, there still appears a need to secure a ruling so that income payments to nonstock, nonprofit educational institutions will not be imposed with withholding tax. But with the promulgation of the court’s decision in CTA Case 8377, nonstock, nonprofit schools can now feel confident in entering into a transaction without having to worry about presenting their tax-exemption ruling from the BIR. Similarly, the school’s suppliers can now freely transact with these schools without requiring the latter to present their tax-exemption ruling. In the CTA case, the tribunal ruled that the BIR cannot impose additional requirements that are not provided by law. The CTA cited the Supreme Court’s (SC) decision in GR 158085, in which the latter

held that, when the Tax Code does not provide a requirement to avail a tax exemption granted under the law, the BIR cannot add an additional requirement to implement the law. The CTA said the requirement for certificate of exemption prescribed in RMO 20-2013 is not a requirement stated by the law. Therefore, this certificate is not a condition precedent for the petitioner to be entitled to income-tax exemption. The only requirement is that the school must show that it is a nonstock, nonprofit educational institution, and that no part of its income is derived from activities conducted for profit pursuant to Section 4(3), Article XIV of the Constitution and Section 30(H) of the Tax Code, as amended. Section 4(3), Article XIV of the Constitution provides that all revenues and assets of nonstock, nonprofit educational institutions that are used actually, directly and exclusively for educational purposes shall be exempt from taxes and duties. Upon the dissolution or cessation of the corporate existence of such institutions, their assets shall be disposed of in the manner provided by law. While CTA Case 8377 limited the discussion to nonstock, nonprofit educational institutions, it is my humble view that the same rule should also apply to all taxpayers whose tax exemptions are clearly defined under our laws, invoking the well-enshrined doctrine of stare decisis, which means that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same, even though the parties may be different. This case, though, may yet find its way up to the SC. The author is a senior associate of the Du-Baladad and Associates Law Offices, a member-firm of the World Tax Services Alliance. The article is for general information only, and is neither intended nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. For comments or questions about the article, send them to the author at rodel. unciano@bdblaw.com.ph or call 4032001, local 140.

Watchful waiting Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

ELIEVING that God is the shepherd and protector of His people, the psalmist begs Him to come and save them (Psalm 80:2–3, 15–16, 18–19). The Lord is, indeed, coming, so we must stay awake and be watchful (Mark 13:33–37).

Come and save us IN the context of the military debacle suffered at the hands of its enemies, the psalmist prays to God to look at Israel favorably, and to come and save His people. Confidence in God’s power and concern is expressed in the titles used for Him. He is referred to as the “shepherd of Israel”, who knows His flock intimately and hears their pleas; God is called upon to “hearken” and, from His heavenly throne surrounded by the Cherubim, His royal guards, to stir up His might and show it. The shepherd, who brings his flock to verdant pastures and protects them from predators, will surely come to save them, and let them see His face, His favor. God is also referred to as the “Lord of hosts”, the mighty leader of legions of soldiers, majestically enthroned in heaven and pleaded with to look down and see the condition of His own people. God is next portrayed as a cultivator of vines. Vineyard-

keepers are dedicated and patient persons, just like shepherds, solicitous of their wards. That is why the psalmist pleads with God to “take care of this vine” (Israel) and protect what His right hand has planted. God’s help is expected to be with the favored one on His right hand (the King), the Son of Man, whom God made strong for His people’s sake. Speaking for the people, the psalmist says that, if given new life and another chance, they will call upon God’s name in adoration and promise not to turn their back on Him ever again.

You do not know when

THE short parable in the Gospel shows how the servants of a man traveling abroad are placed in charge of his household, each with his own assigned task. The gatekeeper, in particular, is told to be on guard, to make sure that what or who should not be let in his property does not

Thursday, November 27, 2014

get in, and what or who should not get out does not leave. The time of the return of the Lord of the house is not known. It can be in the evening, or at midnight, or at cockcrow, or at dawn—four periods of time for the night watches in the military. Like soldiers, the servants are expected to stand guard and not be caught sleeping. The enemies make their move especially at night; diligence and vigilance are vital. No one knows when the Lord of the house is coming. It is unscheduled, or clearly not according to our schedule. This is of main significance: The servants are uncertain about the time of their master’s return. They are not allowed to be idle while waiting for him; they all have their respective responsibilities, which are to be accounted for in due time. Until the owner of the house returns, everyone must be diligent in his or her work. It will be disastrous if the owner suddenly returns home to find his servants asleep and not expecting him at all.

Be watchful

THE parable is a metaphor. The whole point of it is the imperative “Watch!” and the injunction to be watchful is given to all. The period before the coming of the One, whenever that may be, should be spent in diligent faithfulness to the wishes of the owner of the house. Therefore, the servants must be vigilant at all times as they wait for the return of

Tribune News Service

T’S an unfortunate fact that many people don’t realize that pills, even those available over the counter (OTC), provide a lot of medication to the body—often more than the amount needed to simply dull pain. Excess medicine must be included, because the liver acts as a filter for the body and knocks out about one-third of the medicine one takes orally. The remaining medicine must then spread throughout the entire body, because your body doesn’t know

you are only trying to treat your sore knee or strained shoulder. Every day across the United States, millions of people relieve pain with the assistance of OTC pills without giving it a second thought. For the vast majority, when the medications are used as directed, pain relief is achieved safely. But pain medication can be tricky to manage, due to the range of options and varying doses available, which is why the US Federal Drug Administration (FDA) is revamping the approval path for OTC drugs. As reported by The Wall Street Journal earlier this year, “this move will change how tens of thousands of

their master. They must be ready and watchful always. Tragic events can take place in a moment of inattention. This is particularly so in the time of greatest vulnerability, in the hours of darkness. The command to watch out for the arrival of the master is repeated three times; it is very clearly emphasized as the most important. Interestingly, the Greek word for time is kairos—the propitious time, the special time above all others, the grace of a time when the Lord comes and shares His saving presence with all. This uncommon time is a gift of the one whose coming is long awaited; it brings communion and salvation. The time referred to here is not mere chronos—sequential and physical time, like any other time. And all must be ready for this time of salvation, watching and waiting. Alálaong bagá, for the First Sunday of Advent, we have established the setting for the whole season. In our context of suffering and failure, we, like the psalmist, turn our eyes to God and plead with Him to look down upon us, and come and save us. God will definitely come for our sake, but we need to be watchful all the time so as not to miss His coming. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.

Squeeze a stalling Iran to make a nuclear deal

FTER almost a year of intense negotiations and economic pressure, Iran still is not ready to yield on its nuclear program. Instead, Tehran on Monday masterfully extracted seven more months to develop its nuclear prowess: The United States and its allies again extended the deadline—is that word still appropriate?—to reach agreement. That’s the second extension the US has granted to Iran this year.

US Secretary of State John Kerry says that gaps between the sides have narrowed, that a reasonable deal can be reached. Don’t hold your breath. These talks look like a triumph of hope over experience. There’s little reason to believe that another seven months of pleading and cajoling will force Iran to yield. Remember, Iran continues to stonewall international inspectors. It won’t answer questions about its past nuclear research, or accept tight restrictions on the uranium-enriching centrifuges that are key to making a bomb. Those aren’t signs of a good-faith effort to reach agreement. The longer the talks drag on, the more leverage Iran gains. Its program projects an aura of inevitability, even respectability. Some countries, including Russia and China, may be tempted to break ranks with Washington and increase trade with Iran. Tehran remains on the brink of a nuclear breakout—likely within months of being able to build a nuclear weapon. It may also be building its capability to “sneak out”, that is, to use secret facilities to construct a weapon far from the gaze of inspectors. Remember, Iran came to the

bargaining table only because US and European Union economic sanctions were devastating its economy. Tehran’s negotiators stay there now in hopes of getting those sanctions quickly lifted in exchange for...conceding as little as possible. To conclude a deal, the West

Mark Kirk of Illinois and Democratic Sen. Robert Menendez of New Jersey would significantly tighten the embargo on Iran’s oil exports, the country’s economic lifeblood. It would blacklist mining, engineering, shipbuilding and construction industries. Its aim: Stifle Iran’s already-staggered economy with a near-complete banking and trade embargo. Kirk says Iran earns about $700 million a month, mainly from oil sales permitted under today’s sanctions. His bill is aimed at largely drying up that and other sources of revenue. “As long as the Iranian

A firmer approach from Washington would still be the best way to ensure that the talks don’t meander for another seven months. A bill pushed by Republican Sen. Mark Kirk of Illinois and Democratic Sen. Robert Menendez of New Jersey would significantly tighten the embargo on Iran’s oil exports, the country’s economic lifeblood. It would blacklist mining, engineering, shipbuilding and construction industries. Its aim: Stifle Iran’s already-staggered economy with a near-complete banking and trade embargo. needs more leverage. When the talks were extended in July, this page argued that Iran should pay a steeper price for stalling, via tougher economic sanctions. But the Obama administration views tougher sanctions as counterproductive. A firmer approach from Washington would still be the best way to ensure that the talks don’t meander for another seven months. A bill pushed by Republican Sen.

nuclear program exists, there should be an increasing cost to encourage the Iranians not to build the bomb,” he told us on Monday. Senate Majority Leader Harry Reid has bottled up the bill for months because President Barack Obama asked lawmakers for time to give negotiations a chance. Time’s more than up. Kirk tells us that a vote should come soon after Republicans take control of the Senate in

Informed choices lead to healthier pain-relief outcomes By Dr. Aristotle Economou

medicines and personal care items reach US store shelves.” Despite liver-toxicity issues concerning doses over 325 milligrams, the FDA still allows a 500-milligram OTC acetaminophen, a pain reliever, to be sold. “It is inexcusably poor judgment on the part of the FDA to have failed to take action concerning this major source of acetaminophen consumption, and, consequently, acetaminophen toxicity,” Dr. Sidney M. Wolfe, founder and senior adviser of Public Citizen Health Research Group, a Washington-based consumer advocacy group, told the Wall Street Journal. Acetaminophen has a narrow

therapeutic window, meaning the difference between a safe and effective dose and an overdose, which, in serious cases, can lead to liver toxicity, is a relatively small increment in milligram consumption. Ibuprofen, naproxen and even aspirin can cause upset stomach, and even ulcers, in a worst case, when not administered at the right dosages. Outside the US, more people use a balance of topical and external medicines. Topical-pain relievers, such as creams, gels, patches and sprays work locally and largely reduce, although they do not entirely eliminate, the systemic risk—accidental or otherwise—that OTC

pain pills can present. Many people enjoy a few glasses of wine with dinner or going out for beers after work. Combining alcohol consumption with virtually all OTC pain relievers delivered in a pill, however, is against labeled use. According to the National Institutes of Health publication on alcohol and metabolism, liver damage can occur with as few as four to five extra strength acetaminophen pills consumed with varying amounts of alcohol. There are a variety of noninvasive techniques, procedures, specific acu-points and philosophies surrounding pain relief worldwide.

January. Good. The bill has 60 sponsors, including 17 Democrats. The US House of Representatives has already passed a similar bill. Sending this legislation to Obama would be a strong signal to America’s friends and foes, all nervously watching these inconclusive negotiations. The stakes are enormous: A nuclear Iran would create an even more dangerous Middle East. Iran’s main regional rival, Saudi Arabia, has threatened to ramp up a nuclear program in response, possibly buying nuclear weapons off the shelf from Pakistan. Egypt and Jordan may also launch nuclear programs. Israel considers an Iranian bomb to be an existential threat to the Jewish state. Will the Israelis send bombers? What’s more, Iran is a chief sponsor of worldwide terror. Imagine what happens when its fanatical mullahs wield the world’s most dangerous weapon. So the moment Iran declares itself a nuclear power, others scramble for nukes and terror organizations cheer. Thus, the outcome of these negotiations promises to make the world safer or infinitely more dangerous. Kerry said on Monday that “new ideas surfaced” in recent days and that “we would be fools to walk away”. But we’re talking about an Iranian nuclear program much stronger than when we learned of it in 2002. At some point, Kerry will have to admit that those who want more talks, rather than more sanctions, are fools to stay. Chicago Tribune/TNS

With a topical, you can deliver much less medicine to the body because you’re applying it directly at the site of pain. I encourage all my patients to use medicine as directed. It is important for pain sufferers to know their options and consider treating mild to moderate pain locally to improve their pain relief outcomes. Dr. Aristotle Economou is a member of the Institute for Functional Medicine, a faculty member of The International Academy of Medical Acupuncture and author of the book Change the Way You Heal: 7 Steps to Highly Effective Healing.

2nd Front Page BusinessMirror

A8 Thursday, November 27, 2014

Inflation to ease on lower oil, food costs T

By Genivi Factao

he Bangko Sentral ng Pilipinas (BSP) was seen shifting on Wednesday to a lower inflation target as forecasts for November were expected to be within the range of 3.5 percent to 4.3 percent. “Stable food prices continue to decline and international oil prices and lower electricity rates for the month are seen to dampen inflation pressures,” BSP Governor Amando M. Tetangco Jr. said. “If, among others, inflation continues on this decelerating trend and if there continue to be no signs of second-round effects, then there is room for the BSP to pause and keep its current stance of monetary policy,” he added. The BSP continues to adhere to its inflation-targeting framework and adapts quickly to changes in the inflation outlook. When the BSP hiked both the benchmark and special deposit account rates in September, it said the inflation target for 2015 were at risk. When it paused in October, the BSP reverted to the assessment of a more manageable inflation environment, which reflects in part the recent slump in commodity prices, according to a Nomura global market research. The consumer price index (CPI) inflation target was seen lowered to a range of 2 percent to 4 percent in 2015, having been at 3 percent to 5 percent for the last four years, according to Nomura. Its analyst said domestic demandside inflation risks relative to the BSP’s more ambitious inflation target should remain the most important policy driver. “We expect the new target, even as commodity prices in our assumptions are likely to stay relatively low, to again be threatened from mid-2015, prompting the BSP to resume hiking,” Nomura analysts said. Tetangco said the BSP will continue to keep a watchful eye on evolving price and demand trends to ensure price stability.

House urged to prioritize Government maintains passage of economic bills Q2 growth

By Jovee Marie N. dela Cruz

oreign and local businessmen on Wednesday urged leaders of the House of Representatives to prioritize the passage of several measures aimed at boosting the country’s economy and combating corruption. Makati Business Club Executive Director Peter Perfecto said he supports moves to amend the Constitution, particularly its economic provisions to attract foreign investments, during a meeting between House leaders, the Joint Foreign Chambers (JFC) and various Philippine business groups. “Revising the restrictive economic provisions of the 1987 Constitution to enable the passage of specific laws easing restrictions on natural resources, agricultural lands, institutions and mass media,” Perfecto said. The Resolution of Both Houses (RBH) 1, filed by House Speaker Feliciano Belmonte Jr. and Sen. Ralph Recto, is targeting to amend the 60-40 rule, which limits foreign ownership of land and some business entities.

PERFECTO supports moves to amend the Constitution, particularly its economic provisions, to attract foreign investments.

The resolution will include the phrase “unless provided by law” in the foreign-ownership provision of the Constitution, particularly land ownership, public utilities, natural resources, media and advertising industries.

Under Article XII of the Constitution, foreign investors are prohibited to own more than 40 percent of real properties and businesses, and are totally restricted to exploit natural resources and own any company in the media industry. Perfecto also pushed for the passage of the Freedom of Information bill, saying this will address the corruption in the bureaucracy by making government transactions transparent to the public and holding public officials accountable for their actions. For his part, American Chamber of Commerce of the Philippines Inc. (AmCham) President Rhicke Jennings urged Congress to pass the Customs Modernization and Tariff Act and Anti-Smuggling bill. Jennings said the passage of the two measures will make the Philippines compliant with its obligation under the Revised Kyoto Convention. The two proposed measures have been recently approved at the committee level of the lower chamber. Meanwhile, AmCham Senior Adviser John Forbes asked Congress to amend the Foreign Investment Act, Retail Trade Act, Government Procurement law, and the Public Services Act for trade liberalization. Continued on A2

US economy. . . continued from a1

“The question of whether the economy is accelerating or will accelerate is no longer a question; we can say somewhat definitively that the economy has already accelerated,” said Dan Greenhaus, chief strategist at BTIG, in a research note. In contrast, other advanced economies are struggling. The euro-zone economy barely grew in the third quarter, and inflation is a mere 0.4 percent, raising concerns of deflation. Japan unexpectedly found itself back in recession in the July-toSeptember period. And momentum in emerging economies like China and Brazil is also shaky. Tuesday’s data further push the world’s biggest economy“onto a different page than Europe and Japan,” said Jennifer Lee, senior economist at BMO Capital Markets. Fueling third-quarter growth was consumer spending, which accounts for 70 percent of economic activity. That climbed at a 2.2-percent rate in the three-month period, an improvement from an initial estimate of 1.8 percent. Business investment in equipment shot up at a 10.7-percent rate, revised up from 7.2 percent. GDP has been on a roller coaster this year. It started with a steep slide in activity in the first three months of the year, when the economy contracted at a 2.1-percent rate, largely due to a severe winter. Analysts believe momentum could decelerate to around 2.5 percent in the current quarter but then pick up again in 2015. They expect growth of around 3 percent, representing a sustained acceleration in activity six years after the Great Recession. Since the recession ended in June 2009, growth in the US has averaged at subpar rates just above 2 percent. The lackluster recovery has been blamed on the financial crisis and the severity of the recession. Such downturns are usually harder to recover from because it requires repairs to the banking system to get credit flowing again. But economists believe 2015 will be the year when the recovery shifts into a higher gear, in part because they expect the government itself to help. Government spending grew at a 4.2-percent rate in the third quarter, the strongest performance since the spring of 2009. The gain was bolstered by a 16-percent surge in defense spending. AP

www.businessmirror.com.ph

estimates

By Cai U. Ordinario

he Philippine Statistics Authority (PSA) has maintained the country’s gross domestic product (GDP) growth estimates for the second quarter to 6.4 percent. This despite some upward revision in the growth of Net Primary Income (NPI) from the rest of the world that saw a revision in the second-quarter gross national income (GNI) growth this year. The PSA said GNI growth was revised upward by 0.2 percentage points to 7.5 percent from the initial estimate of 7.3 percent. This was due to the revision of the NPI to 13.8 percent from the initial estimate of 12.7 percent. “It’s just about the availability of information. Data on growth is not always 100 percent. Some of these are just estimates,” National Economic and Development Authority (Neda) Director General Arsenio M. Balisacan explained on Wednesday. The PSA reported that the economy grew 6.4 percent in the second quarter and 6 percent in the January-to-June period. While the growth was higher than the 5.7-percent posted in the first quarter, the second-quarter growth was lower than the 7.9 percent posted in second quarter and also below the government’s 6.5-percent to 7.5percent full-year target this year. The PSA said the second-quarter economic growth was driven by the industry sector which posted a 7.8-percent expansion. This was slower than the 10.5-percent growth posted in the same period in 2013 but higher than the 5.3 percent in the first quarter this year. The industry sector’s growth was higher than that of the services sector which only posted a growth of 6 percent in the April-toJune period this year. This was not the first time the industry sector’s growth outpaced that of the services sector. Prior to the first quarter this year, the industry sector continually outpaced the growth of the services sector for four consecutive quarters. The country’s official GDP estimates for the third quarter this year will be released today, November 27.

OFws. . . continued from a1

manila-tehran relations Kiyomars Amiri (left), cultural counselor of the Embassy of the Islamic Republic of Iran, fields questions during the BusinessMirror, Philippines Graphic, DWIZ, View and Pilipino Mirror forum held at the BusinessMirror office in Makati City. At right is Ashkan Mombeini. ROY DOMINGO

ASIA NEEDS TO DEEPEN FINANCIAL MARKETS A

sian and Middle Eastern financial regulators and institutions have to remove roadblocks to broaden the range of financial instruments amid the rise of the Chinese currency yuan, experts said on Tuesday at the Boao Forum for Asia financialcooperation conference. The two-day financial-cooperation conference, which closed here on Tuesday, was held for the first time in West Asia. It focused on how the Far East, Central Asia and the Middle East can expand bilateral trade and grow economically together. Dr. Nasser Saidi, a leading Dubai-based economist and president of Nasser Saidi and Associates, said that Asia today produces 50 percent of the world’s output “but its global share in financial markets is far beneath that.” “The region needs to deepen its financial markets by issuing more financing and investment instruments like bonds, equities, investment funds,” he said. Zhang Hongli, executive vice president of China’s ICBC, said the Asian financial markets are still very fragmented.

“Ratings are often different and not comparable, we need to develop a unified understanding,” he said. But Zhang, on the other hand, agreed with Saidi that financing is too much bank-dominated. “Certainly, investment banking must be increased, we need bonds, equities, more Asian capital markets, but this takes time and needs qualified people,” he said. In 2008 ICBC was the first Chinese lender which opened a branch in the Dubai banking free zone DIFC in order to expand its financing operations in the Gulf Arab region. Saidi and another panelist from Pakistan, Mumtaz Hussain Syed, CEO of Pakistani investment firm Aequitas, pointed out that the fast-rising Islamic finance segment can be a catalyst to fill the financing gap in Asia, which, Saidi said, amounted to $800 billion a year. Hussain Syed said Islamic finance was growing at least 15 percent per year in Pakistan, meaning the industry doubles every five years. With China being a key trade partner for Islamabad, Chinese banks should bank

on the religious financing style to increase bilateral trade. Saidi said the rise of Islamic bonds, or sukuk, in the Middle East and Far East was positive; but more has to be done. Arab sovereign wealth funds are keen on investing in sukuk as they must be asset-based and put faith into finance, he said, adding that “if more East Asian countries launch sukuk, they can attract sovereign wealth funds.” Islamic bonds do not pay interest but periodically distribute a profit share to the bondholders based on tangible assets like commodities or real estate. Hong Kong issued its first sukuk in mid-September, raising $1 billion from 120 institutional investors and 36 percent of the funds came from the Middle East. Saidi said he expects the Chinese currency to become a global reserve currency in 2015 the earliest. Therefore, the fact that more Arab banks in the Gulf offer renminbi financing options and the growing presence of Chinese lenders in the region was a development into the right direction. PNA/Xinhua

taken an interesting turn, from mainly acquiring properties to settle their families on a house and lot they can call their own, to looking at commercial properties for business and other income-generating ventures, Gonzales said. “Many are getting practical, to see their remittance earnings [generating] revenues so that they could be assured of money when they go home after their contracts abroad,” he said. “OFWs are still our main spenders in real estate,” according to Gonzales. “And this makes it more stable for the Philippines to ward off fears of a property bubble that hit Asia in 1997.” “Unlike before, in the Asian financial meltdown, and even in the US mortgage crisis, the industry is being supported by a sector that has money,” he said. In the US subprime-mortgage debacle, the financial crisis it generated was driven mainly by the sale of unfunded properties and (similar) instruments. He said the Philippines was expected to ride high on real estate “with more people still looking for properties than for the latter to supply the demand.” “More cities are growing, and the demand for house and lot, commercial and industrial properties are also increasing, and buyers’ preference are also spread across the nation,” he added. Gonzales said FilipinoHomes.com was established as a web-site portal in 2009 and is one of the leading web-site portals for both Filipinos and foreigners looking to invest in real-estate properties in the Philippines. In 2013 the portal monitored not less than P8 billion worth of real-estate transactions in the Philippines. This did not include transactions coursed through the other real-estate companies and Internet web sites, as well as through the free social-networking sites. The FilipinoHomes.com was put up by leading Cebuano realtor Anthony Leuterio, who also operates his own real-estate company.