Businessmirror september 01, 2015

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Thursday 18, 2014 Vol.1,102015 No. 40 Tuesday, September Vol. 10 No. 327

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

Islamic banks can fill PHL financing needs

By Genivi Factao

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he World Bank said the Philippines is in a position to partake of the trillion-dollar global Islamic financing market, as interest in the instrument has risen sharply in recent years.

INSIDE

the edison bulb exposes a hunger for nostalgia Mental peace

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EAR Lord, when in trouble, be it physically, mentally or spiritually, grant us mental peace, so we can have a full control of the gift of mind You gave us. Let tranquillity and hope prevail in our whole system.

We reach out to You for strength against our weaknesses. Teach a searching heart that Your love is unchanging; that human love begins and grows by touching. Keep us closer to You, by way of mental peace. Amen.

DAILY PRAYERS, THOMAS A. NELSON AND LOUIE M. LACSON

Word&Life Publications • teacherlouie1965@yahoo.com

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

Life

Tuesday, September 1, 2015

B L L The Orange County Register

HEN Irene Conable moved from her 1927 historic home into a sleek condo last year, both in Riverside, Washington, she alighted upon compatible accents for her mother’s 19thcentury furnishings and antiques.

She looked to the hottest trend in home illumination, the Edison, vintage or nostalgia globes, a nod to Thomas Alva Edison, who’s considered the father of incandescent lighting.

Resurrected as reproductions of the inventor’s first bulb, the Edisons now shimmer from coast to coast. Manufactured in hundreds of designs, the exposed bulbs are celebrated as

hip throwbacks to more rustic times. “I wanted to continue the modern version of Victoriana steampunk through the plumbing and lighting,” said Conable, 70, a retired school librarian.

“That’s why I chose these bulbs.”

In the past three years, these improbable luminaries in the interior design world have jumped the grid from commercial to home décor, said David Gray, a spokesman for Chatsworth, California-based Lamps Plus, the nation’s largest specialty lighting retailer.

Coiled, twisted, crisscrossed, laced, separated or bunched, the visible filaments—or threadlike heating elements made of tungsten or carbon— provide much of the bulb’s aesthetic charm.

“Any fixture that surrounds these bulbs usually represents some type of industrial function, like pipes or a safety cage,” Gray said.

See “Islamic Banks,” A8

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The Edison bulb exposes a hunger for nostalgia

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which frowns on the acceptance of interest or fees for loans.

According to the World Bank, Shariah-compliant financing can enhance investments on such underser ved segments in the Philippines as households, small and medium enter pr ises and agriculture. Islamic finance helps contribute to the World Bank’s program of promoting financial

special report

OWEN WILSON BREAKS OUT OF COMEDY FOR SERIOUS ‘NO ESCAPE’ ROLE »D2

BusinessMirror

Dr. Zamir Iqbal, lead financialsector specialist at the World Bank Global Islamic Finance Development Centre (GIFD), bared this development even as the volume of so-called Shariah-compliant instruments expanded at more than 10 percent each year the past many years.

The GIFD Center helps World Bank client-countries to take advantage of the rapid growth of financial assets that are compliant with Shariah law,

MODERNIZING PHL MILITARY ON A SHOESTRING BUDGET

Movies such as Skyfall and the TV show Scandal have glamorized these unlikely beacons of beauty as soft, romantic sparkles in subway tunnels, hideouts, basements, clandestine meeting rooms and attic crawl spaces, Gray said.

Janice Morell-Bielman used the Edison bulbs in her living room scences and the dining room candelabra in her 1929 Tudor home in Riverside.

“Great mood lighting,” she said. “Much better than traditional incandescents.”

The Edison bulb works well in contemporary décor, too. “They’re welcome in any design, except glitz and glamour,” Gray said.

The consumer’s fascination with industrial chic, inspired by pendant Edison bulbs in restaurants, has fueled the craze, according to

C  D

life

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kerry, obama to raise global warming issues in Alaska The World BusinessMirror

B3-2 Tuesday, September 1, 2015

China gives little credit, or help, to Nationalist WWII vets

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In this June 7 file photo provided by the Alaska Division of Forestry, smoke rises from the Bogus Creek Fire, one of two fires burning in the Yukon Delta national Wildlife Refuge in southwest Alaska. Global warming is carving measurable changes into Alaska, and President Barack Obama is about to see it. Matt Snyder/alaSka diviSion of foreStry via aP

Kerry, Obama to raise global warming issues in Alaska

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NCHORAGE, Alaska—Scientists are “overwhelmingly unified” in concluding that humans are contributing to global climate change, Secretary of State John Kerry said on Sunday night, and the public is slowly getting the full picture.

Skeptics who stand in the way of action to respond to climate change will not be remembered kindly, he told Alaska reporters.

“I think the people who are slow to come to this table will be written up by historians as having been some of the folks most irresponsible in understanding and reacting to scientific analysis,” he said.

Kerry spoke one day before he and President Barack Obama will address the State Department’s Conference on Global Leadership in the Arctic. The purpose, according to the State Department, is to focus world attention on urgent issues facing the Arctic and provide foreign ministers and residents a way to address challenges.

“The president believes this is one of the most important issues we face,” Kerry said. “It is a national security problem.”

Warming’s effects on Alaska have been more dramatic than elsewhere in the country as glaciers thaw, coastlines erode and sea ice, the habitat for threatened polar bears, Pacific walrus and ice seals, diminishes.

The president is taking steps to address warming, Kerry said, and will advocate strongly for an international pact on cutting carbon emissions at a United Nations conference in December in Paris.

Kerry said he traveled to China to negotiate on carbon reductions and the country has set targets. China is taking the issue seriously, he said.

“We’ve been urging other countries all around the world to do so,” he said. The president’s climate

action plan involves all carbon sources, from appliances to automobiles to power generators.

“So we’re doing as much as we can to try to move people toward sustainable sources of energy and the president will talk about this very much while he’s up here in Alaska.

Part of the reason for being here is to underscore this problem.”

Environmental groups plan to protest on Monday over Obama’s decision to grant permits to Royal Dutch Shell for exploratory drilling in the Chukchi Sea off Alaska’s northwest coast. Kerry said the administration is taking a balanced approach to moving away from carbon sources of energy. “You have to balance it with the fundamentals of your economy and of basic needs.

That’s one of the things we’ll talk about here—how fast can we encourage people to switch.” AP

EIJING—Chinese veteran Sun Yibai doesn’t have much time for the Communist Party’s claim to have led China to victory against Japan in World War II. “The Communist Party didn’t fight Japan,” said the sprightly 97-year-old, who once served as a translator with the storied Flying Tigers aviation brigade. “They made up a whole bunch of stories afterward, but it was all fabricated.”

That view challenges a basic premise underpinning this week’s lavish celebrations in Beijing of the 70th anniversary of Japan’s defeat: That Mao Zedong’s Communists were the saviors of the nation, battling against Japanese forces that began occupying parts of China in 1931 before launching a full-blown invasion in 1937.

Veterans, such as Sun, have long found themselves on the wrong side of that narrative. Their service with the Nationalists led to imprisonment, persecution and often death in the years after the 1949 Communist revolution. Now mostly in their 90s, they’re living out their remaining years shunned and forgotten by all but a few who care to hear their stories.

“Nobody cares about veterans like me. Nobody cares. People just forget what happened in the past,” Sun said in an interview in his Beijing apartment stuffed with books and old photos.

In a Beijing suburb, Lu Chunshan, 91, held up fingers gnarled and deformed from two decades of hard labor, his sentence for having signed on as a military cadet with the Nationalists in 1942. Following the war, Lu found temporary employment but was dragged before baying crowds during political campaigns in the 1950s and 1960s and denounced as an enemy of the Communist cause.

“If you tangled with the Communists, then it was as if you made no contribution at all to speak of,” Lu said. “If you did just what the party said, you’d have a good life.”

Despite having faded documentation confirming his national service, Lu receives no pension, surviving mainly on 2,400 yuan ($380) per month provided by a former employer, a state oil company. He and his female companion of the last decade buy their market produce late in the afternoon, when the prices are lowest.

Most independent historians agree that it was the forces of the Nationalist Party, or Kuomintang, led by Mao’s archrival Chiang Kaishek, that led the anti-Japanese struggle and suffered the vast majority of casualties. Following the war’s end, the exhausted and

divided Nationalists were defeated by the Communists in a renewed civil war and fled to Taiwan, cementing Mao’s claim to having defeated imperialism, unified the country and overthrown the old feudal order.

“This joint victory over the external enemy and the internal one, including the landlord class, is a fundamental component of [the party’s] founding myth,” Harvard University China scholar Anthony Saich said. While the Nationalists’ contribution to the war effort is no longer denied outright, it is heavily minimized, and veterans such as Sun and Lu are largely ignored.

“The mainstay role of the Communist Party was the linchpin in the victory of the entire nation in the war of resistance,” top party historian Gao Yongzhong recently told reporters in a reiteration of the party’s basic line. “This conclusion has been long established,” Gao said.

Formal 70th anniversary commemorations begin on Wednesday with a ceremony at the Great Hall of the People to honor veterans—at least those whose service has been officially recognized. On Thursday will see a massive military through Beijing showcasing the growing might of the People’s Liberation Army that has unnerved many neighboring countries.

China marks the victory over the Japanese on September 3, the day after Tokyo’s formal surrender, though the festivities gloss over the fact that Japan surrendered to the Allies aboard a US naval ship and that Chiang Kai-shek was the Allied commander for mainland China at the time. The Communist claim to have led China to victory against Japan is rooted in a hazy assertion that the party was the first to call for fighting against Japan, at a time when the Nationalists were biding their time to build up China’s strength for the coming conflict with Tokyo. That Mao spent the war well behind the lines in remote Shaanxi province is little mentioned.

Gao, the party historian, puts the Communists’ wartime losses at 450,000 dead and injured. Independent historians put the Nationalists’ losses at around 3.2 million troops suffered in more than 1,000 engagements with Japanese forces ranging from the cities of the east coast to the southwestern province of Yunnan. The Nationalists also worked closely with the US and Britain, contributing forces to the fight in Burma and hosting air bases in the interior of China used in bombing missions against targets as far away as the Japanese home islands. AP

By Rene Acosta

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Mothers, students join Japan’s Tony Blair cautions Labour party over Corbyn leadership protests over security bills T

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okyo—Mothers holding their children’s hands stood in the sprinkling rain, some carrying antiwar placards, while students chanted slogans to the beat of a drum against Prime Minister Shinzo abe and his defense policies. Japan is seeing new faces join the ranks of protesters typically made up of labor-union members and graying leftist activists. tens of thousands filled the streets outside tokyo’s parliament on Sunday to rally against security legislation expected to pass in September. “no to war legislation,” ‘’Scrap the bills now!” and “abe, quit!” they chanted in one of the biggest protests in recent memory. the bills would expand Japan’s military role under a reinterpretation of the country’s war-renouncing constitution. in Japan, where people generally don’t express political views in public, such rallies have largely diminished since often violent university student protests in the 1960s. the 2011 fukushima nuclear plant disaster, however, prompted a spurt of antinuclear protests that brought mothers out of their homes. now at least some seem to be shifting their focus to the security debate. the demonstrations started earlier this year and grew sharply after July, when abe’s ruling coalition pushed the legislation through

the more powerful lower house despite polls showing a majority of Japanese opposed.

Whether the protests signal wider social change remains to be seen. the antinuclear protests have faded somewhat, and these could too, once the summer holiday is over and the legislation passes, as expected.

But grassroots movements among typically apolitical groups, such as mothers and students—aided by social media— appear to be growing. a group called Mothers against War started in July and gained supporters rapidly via facebook. it collected nearly 20,000 signatures of people opposed to the legislation, which representatives tried unsuccessfully to submit to abe’s office last friday. etsuko Matsuda, a member of the group, said she has seen too many things going in the wrong direction, including the recent return to nuclear power in postfukushima Japan. “i think there are a growing number of people like me who realized our lives have only turned worse under abe’s government,” said the 40-year-old mother of two from Sendai city in northern Japan. “i hope more people would be interested in politics and speak up.” AP

ONY BLAIR, the most successful leader in Labour history who led the party to three consecutive wins starting from 1997, cautioned his party on Sunday against electing Jeremy Corbyn, the candidate tipped to win the leadership poll on September 12. Blair, who previously criticized Corbyn and his growing band of supporters for their hard-left posture that, according to him, would make the party unelectable, wrote in The Observer that his politics were fantasy, just like Alice in Wonderland.

Corbyn has attracted much criticism from past and current leading lights of the party, including Gordon Brown and Neil Kinnock.

Blair’s former aide, Alistair Campbell, voiced the apprehensions of many about Corbyn: “ABC: Anyone But Corbyn”. However, the more trenchant the criticism, the more supporters Corbyn has won.

The other three candidates— none of whom has so far stood out with their policies--are Andy Burnham, Yvette Cooper and Liz Kendall. Blair, who admitted that

TOnY BlAIR, former United Kingdom prime minister ChriS ratCliffe/BlooMBerg

criticism led to more support for Corbyn, wrote: “Anyone listening?

Nope. In fact, the opposite. It actually makes them more likely to support him. In the Alice in Wonderland world this parallel reality has created, it is we who are backward looking for pointing out that the Corbyn program is exactly what we fought and lost on 30 years ago, not him for having it.”

According to Blair, Corbyn’s rise

is similar to trends of “parallel reality” in other countries, such as Donald Trump leading the field of Republican candidates in the US; Alexis Tsipras winning in Greece; or Marine Le Pen riding high in France. “There is a politics of parallel reality going on, in which reason is an irritation, evidence a distraction, emotional impact is king and the only thing that counts is feeling good about it all. So when

people like me come forward and say elect Jeremy Corbyn as leader and it will be an electoral disaster, his enthusiastic new supporters roll their eyes,” Blair wrote.

B l a i r ’s i nt e r v e nt i o n w a s promptly flayed by Corbyn supporters, like Tessa Jowell: “I don’t think there is any point in people who are no longer engaged in frontline politics giving their view from afar. I really don’t.” TNS

World

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Second of three parts

f the P331 billion allocated for the implementation of the Armed Forces of the Philippines (AFP) Modernization Program, Defense Secretary Voltaire T. Gazmin said only P58.4 billion had been released.

“It must be mentioned that of this amount, P31.6 billion was provided during the Aquino administration,” Gazmin said.

Various factors and the confluence of events

in the West Philippine Sea resketched the country’s overall defense horizon and its current security strategy, which emphasized the need for the military to upgrade its capability. The modernization of the military was made more urgent by China’s expansive maritime claims in the West Philippine Sea, which threaten Philippine sovereignty and integrity.

With this external threat, which was described by military planners and strategists as no longer looming but “real and immediate,” the government revised its existing de-

fense plan by signing the Enhanced Defense Cooperation Agreement (Edca) with the United States and fast-tracking the military’s acquisition program.

Beyond its signing on April 28 last year, the Edca became the country’s temporary, but primary defense plan, or foremost territorial defense strategy, while it was beefing up the armaments of the Philippine military.

For the Americans, the agreement, which was signed by Gazmin and US Ambassador Continued on A2

COMPETITION ACT TO BOOST PHL’S ROLE IN SERVICES GVC Esguerra: “We would like to see greater participation of services in various GVCs that will increase productivity and add value to goods produced.”

By Cai U. Ordinario

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he government sees further improvement in the count r y ’s r e v e n u e s from services trade due to the enactment of the Competition Act, with the boost coming from the foreseen increase in the Philippines’s participation in global value chains (GVCs).

National Economic and Development Authority (Neda) Deputy Director General Emmanuel F. Esguerra said the level playing field that the new law promotes is sure to attract more investments from companies in the services GVC. With an enabling environment for the flourishing of GVCs in the Philippines, Esguerra said the country will be able to solidify its footing in the global services trade.

“GVCs now account for more than 50 percent of global trade. The significant role of GVCs in international services trade creates a sense of urgency to make the services sector more competitive. So it’s very important for us to do further analytical work in the area,” said Esguerra, who is also the Asia-Pacific Economic Cooperation (Apec) Group on Services convener.

In a paper for the Apec 2015 Research Project, the Philippine Institute of Development Studies explained that GVCs constitute value chains that produce goods and services globally.

Esguerra noted the importance of developing innovative services within GVCs and prioritizing services on the development agenda, addressing Continued on A8

Asian currencies record biggest monthly decline in 3 years A sia’s currencies posted their biggest monthly loss in three years, led by Malaysia’s ringgit, after a yuan devaluation heightened the risk of a currency war in the region as the United States prepares to raise interest rates.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies, excluding the yen, retreated 2.6 percent in August, the biggest monthly decline since May 2012. Global funds sold

about $10-billion more equities than they bought in South Korea, India, Taiwan, Thailand, Indonesia and the Philippines, the latest exchange data show.

China’s August 11 devaluation took investors by surprise and sparked concern other Asian countries will favor depreciation to protect exports. The ringgit tumbled 8.6 percent this month, the worst performance since 1998, as a political scandal sapped investor confidence and a plunge in com-

PESO exchange rates n US 46.7050

modities prices dimmed the outlook for Malaysian shipments. Indonesia’s rupiah fell 3.8 percent, the most in 11 months, and the yuan declined 2.7 percent as its one-month implied volatility quadrupled amid a shift to a more market-determined exchange rate.

Asian currencies “now have to deal with a new uncertainty in the form of a more market-oriented yuan that is potentially more volatile,” said Koon How Heng, a Singapore-

based strategist at Credit Suisse Private Bank and Wealth Management. “As investor risk aversion has grown, the increasing sell-off in local capital markets and resultant capital flight has added more pressure.”

Malaysian protests

Tens of thousands of people gathered in Malaysia’s capital over the weekend, demanding the resignation of Prime Minister Najib Razak over claims he received billions

of ringgit linked to a troubled state investment fund in his private accounts. Najib has denied the allegations. The furor, coupled with a 23-percent slide in Brent crude over the past two months, has contributed to the ringgit’s decline. The currency’s 17-percent slide this year is the worst in Asia.

The rupiah weakened beyond 14,000 a dollar for the first time since 1998 this month, as the country’s stocks entered a bear market. Bloomberg News

n japan 0.3860 n UK 71.9444 n HK 6.0263 n CHINA 7.2916 n singapore 33.3893 n australia 33.4635 n EU 52.5571 n SAUDI arabia 12.4523 Source: BSP (29 August 2015)

A2 Tuesday, September 1, 2015

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Modernizing PHL military on a shoestring budget Continued from A1

Philip Goldberg, forms part of a bigger American security strategy in the Asia Pacific.

Defense Undersecretary Pio Lorenzo Batino, head of the panel that negotiated the Edca, said the agreement would ensure security for the Philippines, amid the geopolitical challenges of the 21st century.

Batino said the agreement will help build up the capability of the military and support efforts in dealing with “aggressive expansionist acts” in the West Philippine Sea. He said the agreement will strengthen and reinforce the capabilities of the AFP in maritime security, maritime domain awareness and humanitarian assistance and disaster relief (HADR).

“The Philippines faces serious

challenges: To our sovereignty and sovereign rights, developments in the region point to an increasingly aggressive acts; to human safety and security, the frequency and severity of natural disasters point to the need to anticipate, address or mitigate their real impact on people and communities,” Batino said.

“In these very fluid times, we are forced to take a long and hard look at what we can do as one government to respond to the challenges before us,” he added.

The rotating US forces and their equipment are initially eyed to be hosted in facilities that will be constructed at military camps and naval bases, such as Fort Magsaysay in Nueva Ecija, Fort San Felipe in Zambales and Hulugan Bay in Palawan.

But Batino was quick to say that

these areas or bases are not final yet, and there would be no permanent bases for the pivoting US forces.

“With prepositioned equipment and materiel, our soldiers will be able to train and develop their capabilities even before the Philippine government acquires equipment, boosting the speed of our capacitybuilding efforts for men and women in uniform,” he said. The prepositioned HADR equipment of the US should allow the government to respond more rapidly in times of natural disasters and other crises.

The buildings and other permanent structures that will be constructed for the use of the visiting forces “will be automatically owned by the government and, as such, will greatly hasten the development of Philippine military facilities.”

Sadly, the Edca was questioned by some groups before the Supreme Cour,t which is now undergoing constitutional scrutiny.

The Edca is the immediate defense plan or strategy for the country’s territorial defense, while the modernization of the AFP is the longterm plan for achieving “a credible defense posture.”

Military officials said the Edca would give the AFP time to acquire much-needed equipment, while the agreement with the US should safeguard the country’s territory or scare off “intruders.”

Gazmin, and even Foreign Secretary Albert F. del Rosario, said the presence of rotating US troops should be a “stabilizing factor” even in the West Philippine Sea. Their presence is deemed more crucial

Doubts about China’s leaders sap confidence. . .

And a series of bungled decisions have escalated doubts about Beijing’s economic stewardship. The skepticism is rising just as China is pursuing one of the most daunting transitions in modern economic history—from overheated growth, driven by exports and often-wasteful investment, toward slower and sturdier growth fueled by spending from an emerging middle class.

The leadership’s miscues have multiplied, starting with its handling of the stock market. To try to cushion the pain from a slower economy, the government deployed state-run media to promote

stocks for inexperienced individual investors. The hope was that Chinese companies could issue shares into a rising market and use the proceeds to finance growth and shrink their heavy debt levels. Untethered from economic reality, Chinese stocks took wing. The Shanghai Composite Index rocketed 150 percent in the year through mid-June, propelled in part by individuals who poured money in, often on borrowed funds, confident that their government wouldn’t steer them wrong.

On June12thebubbleburst:Shanghai stocks have since tumbled 37 percent, though they remain 47 percent

above where they were a year ago.

Beijing, abandoning a pledge to let market forces play a bigger role in the economy, tried futilely to stop the freefall. It suspended trading in many companies, restricted the use of borrowed money for some trades and banned big investors from selling their stakes for six months. “The bubble pops, and they intervene and it doesn’t work,” says Derek Scissors, resident scholar at the conservative American Enterprise Institute. Beijing suddenly looked like something less than omnipotent.

Then, on August 11, China devalued the yuan. The government

Continued from A8

said the move was a nod to reality: Investors were signaling that the currency was overvalued. And the United States and the International Monetary Fund had long urged China to let market forces play a bigger role in the yuan’s exchange rate.

Yet ,the decision surprised investors and aroused suspicions that it was a bid to drive up exports, which tumbled more than 8 percent in July from a year earlier. (A lower-valued yuan gives Chinese goods a competitive edge overseas.) And Beijing has since sent confusing signals, sometimes intervening to keep the yuan from falling too fast. AP

with the reclamation activities being undertaken by China.

“Let us not forget that the Visiting Forces Agreement is a component of our overall defense strategy and its abrogation now will have an adverse effect on the minimum credible defense posture that we are working hard to achieve,” Gazmin said.

Big-ticket acquisitions

The rotation of US forces should happen while the military is desperately working to build up its capabilities by acquiring assets and equipment, which are necessary to secure and guard its interests in the West Philippine Sea and for its territorial defense in general.

Gazmin disclosed that 33 bigticket projects have been lined up for

Construction. . . showed increases were residential condominium at 8.6 percent and apartment/accessoria-type buildings at 3.9 percent.

By region, Metro Manila or the National Capital Region (NCR), ranked third in the number of construction projects but remained with highest estimated value at P189.2 billion, for more than half (51.6 percent) of the total.

The NCR was followed by the adjacent regions of Calabarzon and Central Luzon. Calabarzon recorded P56.6 billion worth of construction projects, a growth of 15.5 percent, while Central Luzon logged P24.9

implementation until 2017, with the projects and procurement amounting to over P90.86 billion. This includes the procurement of 12 units of surface attack lead-in fighter aircraft and eight units of combat-utility helicopters with a total contract price of P23.6 billion.

“To date, total payment made for these two projects amounted to P9.74 billion. The other big-ticket items included in the Revised AFP Modernization Program are airdefense surveillance radar system, long-range patrol aircraft, closeair support aircraft, C-130 Tango aircraft, anti-submarine warfare helicopters, frigates, amphibious assault vehicles, and various items of communication equipment and night-fighting systems,” Gazmin said. To be continued

Continued from A8

billion a 6.8-percent growth.

Western Visayas, which ranked sixth in 2013 occupied the fifth slot in 2014 displacing Davao Region.

Construction value for this region amounted to P14.8 billion, or a 4-percent growth. Construction statistics are obtained from approved building permits. It relates to administrative-based data on new constructions and additions, alterations and repairs of existing residential and nonresidential buildings.

It includes data on other structures proposed to be constructed in all cities/municipalities of the country in a specific period.

Economy

A4 Tuesday, September 1, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

DOTC teams up with British firm to ease Naia air traffic

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By Lorenz S. Marasigan

he Department of Transportation and Communications (DOTC) has tapped the consultancy services of British firm NATS—renowned worldwide for its air-traffic management expertise— to maximize runway use at the Ninoy Aquino International Airport (Naia).

Transportation Secretary Joseph Emilio A. Abaya said the P66-million runway optimization deal awarded to the joint venture between NATS Services Limited and Schema Konsult Inc. will help ease congestion at the country’s primary gateway.

Over the contract’s 12-month span, the group will aim to increase hourly air-traffic movements (ATMs) from 40 to 60 by determining the optimal configuration for the airport’s intersecting runways.

“We are excited to work with one of the world’s best firms in the industry toward optimizing Naia’s runway capacity. With NATS—which has worked on the Dubai, Singapore and

Heathrow Airports—we can expect safer, more efficient operations, and much less flight delays and cancellations,” he said.

NATS provides air-traffic navigation services to the world’s busiest single- and dual-runway airports: London Gatwick handles 53 ATMs per hour and over 250,000 flights per year; and London Heathrow handles 90 ATMs per hour and over 470,000 flights per year.

It has boosted runway capacity at the Hong Kong International Airport by 30 percent. It also redesigned Dubai’s Al Maktoum International Airport’s airspace, and is now tasked to increase ATMs at the

Singapore Changi Airport.

Abaya noted that the “road map for short- and long-term improvements will focus on the optimization of runway capacity by cutting aircrafts’ occupancy times; the development of Air Traffic Controllers’ (ATC) surveillance capabilities through technology and determining needed alterations to access points; and the maximization of available airspace by reducing restrictions and making procedural improvements to tighten intervals between aircraft movements.

During the first six months of its contract, NATS will conduct a comprehensive evaluation of the airport’s current airspace, runway, and terminal capacities; air traffic and surface operations; runway access points; and ATC training.

The Manila International Airport Authority and Civil Aviation Authority of the Philippines will then implement the recommended improvement measures over the ensuing six months.

These agencies have also implemented measures to help ease runway congestion, such as the reactivation of Runway 31 last July and the relocation of general

aviation activities.

Manila’s main gateway has been plagued by issues on inefficiency and congestion brought about by the lack of investments in infrastructure.

The Japan International Cooperation Agency has predicted that this year would mark the start of the main gateway’s dark days. The airport is expected to handle some 37.78 million passengers, way beyond its 30-million annual passenger capacity and a few notches up from its maximum capacity of 35 million passengers per year.

Japanese consultants had proposed that the new international gateway be constructed in Sangley Point in Cavite to meet the parameters set by the transportation agency.

The future airport will boast of four runways, which can handle 700,000 aircraft movements per year. It will have a rated capacity of 130 million passengers annually.

The deal is expected to be implemented under the government’s key infrastructure program, mixed with funding from official development assistance.

Commercial operations of the new airport should start by 2025 just about 10 years from now.

Lawmaker to SSS: Don’t mess with measure to hike retirees’ pension

By Jovee Marie N. dela Cruz

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mid Senate deliberations on a bill that proposes to raise the pension of SSS members, a party-list lawmaker on Monday asked the Social Security System (SSS) to stop “sabotaging” the proposed pension increase.

“The SSS should stop trying to delude the people and the Senate that it has no funds for the P2,000 pension increase because this is not true. The SSS board is trying to sabotage the passage of the P2,000 pension increase, even if it has actually admitted several times that it has the funds for the pension increase.

The increase will only shorten its fund life to 2029, instead of the current 2042,” Party-list Rep. Neri J. Colmenares of Bayan Muna said.

Earlier, the SSS claimed that it has no funds for the P2,000 pension hike.

In a news report, SSS President and CEO Emilio de Quiros Jr. said that the P2,000 pension increase will result in a decrease in the actuarial life of the pension fund by 13 years.

According to de Quiros, the monthly contributions of its members would have to be raised to 15 percent, from the current 11 percent to offset losses and extend the pension fund’s life.

He said that the SSS needs at least P49 billion every year once the measure is passed into a law.

Moreover, Colmenares said 14 years is more than enough for the

preparing for the big catch

A fisherman in Cadiz, Negros Occidental takes advantage of the prevailing fair weather over the weekend to patch his wooden fishing boat and prepare the vessel for more fishing trips this week. Fishing a main livelihood in this town. Nonie Reyes

government and SSS to find ways to increase its fund life, saying that in 2001, the SSS declared that it has a fund life of only five years and yet it was able to increase this to 2042 in just 14 years.

“If it previously survived a fiveyear fund life, then surely it can also survive a 14-year fund life. Truthfully speaking, we are in a better shape than the United Kingdom which has a fund life of only up to 2027 and Canada which has a fund life of 2022 or merely seven years,” Colmenares, a senior deputy minority leader said.

The lawmaker said that the SSS has P428 billion in investment fund, which generates an investment income of an average of P32

billion per year.

“With this, the net revenue of the SSS in 2014 was a huge P44.47 billion. Its assets amount to nearly P 500 billion,” Colmenares added.

Instead of harping on increasing contributions, Colmenares added that the SSS should improve its collection efficiency from the employers of its 29 million members and collect the billions of pesos in contributions which delinquent employers failed to remit in the last 10 years.

He also said that the SSS should cut down in bonuses and perks given to its board members and collect the more than P200-million retirement package given to SSS board members in 2009 and collect the fines imposed

by the courts against employers who violated the SSS law.

“If this is not enough, then Congress can always provide for subsidies as provided under Section 20 of RA [Republic Act] 8282 as amended.

There is no way that the SSS will go bankrupt as the SSS wants people to believe. In fact, under Section 21 the Philippine government guarantees the benefits and solvency of SSS,” he added.

The House of Representatives has already approved House Bill 5842, mandating a P2,000 acrossthe-board increase in the monthly pension of retirees, while the Senate is currently deliberating an identical measure.

GDAP sets ‘aggressive’ drive to reach global markets

By Catherine N. Pillas

T

he game-development industry, an emerging subsector under the informationtechnology and business-process outsourcing (IT-BPM) industry, is embarking on an aggressive campaign to reach out to global markets with the Department of Trade and Industry (DTI) by lining up more trade missions for the rest of the year.

Andro Baluyut, chief executive officer of GameOps Inc. and board member of the Game Develop-

ment Association of the Philippines (GDAP), said that the industry has been on the move to create more partnerships between local game developers and international-gaming studios with the DTI’s support.

“Government support has been very strong. From September of last year until March of 2015, we’ve had three trade missions in the United States, Canada and Korea. For the rest of the year, we’ll be going to Singapore and Hong Kong, and going back to the US,” Baluyut in a phone interview said.

Canada is being targeted as its

game-development industry has been pegged at $ 3 billion with the number of game professionals rising.

The GDAP board official said that trade promotion was in aid of building its international network of partners of game-development studios, a significant move in facilitating knowledge transfer to the nascent industry.

With the country’s cost competitiveness, the industry’s minimal barriers to entry, and Filipinos’ English skills, the Philippines remains a prime destination for international gaming companies looking to out-

source game-support services “The Philippines is the ideal set up for that. Thailand, Bangkok,Vietnam, and other Southeast Asian countries can go too, but [other countries] don't have the same combination of the language and the cost,” Baluyut added.

A main objective in promoting the Philippines’s skill in the industry, as prescribed in its road map, is enticing international players to set up studios here, which will see local employment of Filipino developers as well as serve as the “best form of expertise transfer.”

news@businessmirror.com.ph

No charter breach in spending public funds for INC century stamps–CA

By Joel R. San Juan

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HE Court of Appeals (CA) has declared that the use of public funds to print more than 1 million postage stamps to commemorate the 100th founding anniverary of Iglesia Ni Cristo (INC) last year did not violate any provisions of the Constitution.

In a 10-page decision penned by Associate Justice Remedios Salazar-Fernando, the Court’s Second Division junked the petition filed by taxpayer Renato Peralta seeking the reversal of the order issued by the Regional Trial Court (RTC) in Manila City on July 25 last year.

The Manila RTC, in the said ruling, junked Peralta’s complaint for injunction seeking to enjoin the Philippine Postal Corp. (PhilPost) from paying for the printing of the commemorative stamps and to stop their distribution.

In his appeal before the CA, Peralta said that as a taxpayer he is allowed to sue when there is a claim that public funds are illegally disbursed.

He insisted that the printing and issuance of the INC centennial stamps violated Section 29 (2) Article VI of the Constitution, which bars the use of public funds to support a religious sect.

The commemorative stamps, he pointed out, constitute free advertisement for the INC at the expense of taxpayers’s money.

He noted that PhilPost printed a total of 1.2 million stamps, although the memorandum of agreement between INC and PhilPost covered only 50,000 pieces.

The production of the commemorative stamps was allowed by President Aquino through Presidential Proclamation 81, which declared 2014 as the INC Centennial Year, and directed the postmaster general to “cause the design, printing and issuance of a special stamp for said purpose.”

But the CA did not give weight to Peralta’s arguments in asking to set aside the Manila RTC’s ruling.

The appellate court held that what Section 29 (2), Article VI of the 1987 Constitution prohibits is the giving of aid to a religious institution and not the mere entering into a transaction or agreement where the State could benefit for itself.

It explained that it is not accurate to say that aid was given to INC, since it is the government which is expected to earn from the sale of the stamps not the INC. “Defendant-appellee PhilPost merely exercised its proprietary function and entered into a business transaction intended to generate income for the

state, rather than bestow any grant or aid to the INC,” the decision read.

“It is not as if the government donated these stamps to the INC....

Ultimately, it is the state which benefited from the issuance of these stamps which could be bought by anyone,” it added.

Furthermore, the CA explained that not every government activity involving use of public funds and which has some religious shade is violative of the constitutional provisions regarding separation of the church and state.

The appellate court pointed out that under the Lemon Test, the American doctrine on the separation of the church and state, public money can be made available to religious persons or institutions if the use will be for a secular purpose; neither primarily advance nor inhibit religion; and will not involve excessive government entanglement with religion.

“In this case...the stamps printed for a secular purpose, and did not primarily advance religion. Likewise, the issuance of these stamps did not result to excessive entanglemennt by the government, such as to require state monitoring, as these stamps were simply printed then sold to the public by defendant-appellee PhilPost,” the CA explained.

The CA added that the purpose for printing the commemorative stamps which is “to enhance awareness of the INC’s contribution in national development” is a “legitimate secular purpose.”

The CA also did not give weight to Peralta’s argument that the late Felix Manalo’s portrait in the stamp is religious in character since he is not the head of state like the pope.

“There is no question that the late Felix Y. Manalo is a prominent figure in Philippine history who deserves to be commemorated like any other Filipino here, statesman, or national artist which is what defendant-appelle PhilPost has been doing in the design of its commemorative stamps,” the CA stressed.

It added that even the Supreme Court has recognized Manalo's significance when it declared as valid the use of public funds for the expropriation of his birthplace.

“No amount of bigotry or spite against INC can erode the historial and cultural significance to the nation of Felix Y. Manalo and the institution he founded. To strike down the subject commemorative stamps is to illiterately ignore these contributions recognized by no less than the National Historical Commission and the President of the Philippines,” it declared.

Concurring with the ruling were Associate Justices Priscilla Baltazar-Padilla and Socorro B. Inting.

Economy BusinessMirror

news@businessmirror.com.ph

Peza eyeing ten big investors to lift falling investment figures

T

he Philippine Economic Zone Authority (Peza) is eyeing for 10 big foreign investors to enter the country to lift the falling investment figures.

Peza Spokesman Elmer San Pasucal told reporters that Peza is expecting those investors that delayed their expansion and investment plans in the Philippines due to the Manila Port congestion last year have already talked to their mother companies and discuss the improvements in the logistics situation in the country.

San Pascual said that six foreign investors, particularly from the United States and Taiwan, are eyeing the Philippines, but are still ensuring that the port mess will no longer occur once they invested in the local market.

He said these firms may come up with decisions in the last two months of the year.

Another four companies are supposed to expand their operations here but still need “compelling reasons” to defend to their headquarters their target expansions in the country, the Peza official added.

He said the latter part of the year

will be crucial for these companies to push their expansions.

“That expansion will only come if their present capacity will be short of the orders that they will be taking in,” he said. “We’re now entering September, and, of course, their orders will jack up on fourth quarter.”

“Hopefully the international situation will be cooperative,” he added.

San Pascual declined to give investment figures of each firm, but he said that these investors are eyeing for 10 to 15 hectares of land per company for their facilities—mostly for manufacturing purposes.

“We’re hoping to jump-start by end of this year towards 2016,” the Peza spokesman said.

Latest figures from Peza showed that the investment pledges posted a 19-percent decline at end-July this year, to P103.15 billion from P127.46 billion in the same period of 2014.

Despite the drop in investment amount, the number of projects increased to 360 this year from 337 a year ago.

San Pascual said once the 10 companies invest this year, Peza will be able to post positive growth in investment approvals at end-2015. PNA

DOE exec bares 5-year action plan on energy efficiency, RE utilization

C

EBU CITY—The Philippines will begin implementing next year a five-year action plan for energy efficiency and is increasing the use of renewable energy (RE) in a bid to address issues related to climate change.

Counting the wad A teller of a foreign-currency exchange booth in Manila counts a wad of

Philippine peso currency after closing a deal with a customer. A report indicated that the peso remains in a better position than most currencies in the region, with peso expected at 46.60 to 46.90 a dollar this week. Nonie Reyes

Debt interest payment Comelec looking for ways to use old PCOS machines down 2% in Q2–DBM

T

he Commission on Elections (Comelec) is looking at the possibility of refurbishing some of the 82,000 old Precinct Count Optical Scan (PCOS) machines to augment the new machines it will lease for the May 2016 national and local elections.

“One of the Comelec’s goals is to enhance the voting experience....

We are also trying to find ways on how to decongest some clustered precincts with traditionally highvoter population turnouts so that our people would not be inconvenienced when they go to their precincts. Let us eliminate those long lines. And the only way to do just that is to increase the number of PCOS machines per clustered precincts,” Comelec Chairman Juan Andres D. Bautista said in a news statement.

He noted that adding more machines by refurbishing some of the old machines aims to bring down the voter-to-machine ratio to approximately 600 voters per cluster, per machine.

Earlier the poll body decided to lease the 93,000 Optical Mark Reader (OMR) machines with Smartmatic-Total Information Management (TIM) for the forthcoming polls.The machines are the combination of the 23,000 and

73,000 OMR units.

Bautista added that some information-technology firms have already signified their intention to volunteer their expertise and time to check on the old machines and see which ones we can still use for 2016.

There are about 82,000 old PCOS machines that were purchased in 2012, which are being kept in a warehouse in Laguna by the Comelec.

On the other hand, Bautista has also instructed the Comelec's asset department to conduct an inventory of the equipment and election paraphernalia used during the last 2013 midterm elections. This would not only allow the Commission to assess their preparedness and readiness for the 2016 elections, but would likewise afford them the opportunity to reuse old materials to save funds.

“To save more, we are looking at partnering with government agencies on producing some of the election components such as ballot printing and logistics, one example is having a partnership with National Printing Office and the Philippine Postal Corporation. If we can secure these tie-ups, then we may be able to lower the expenditure for the elections,” the poll body chief added. PNA

briefs usaid holds forum on pwd rights The United States Embassy for International Development (USAID) in Manila will hold a forum on the “Economic Rights of Persons with Disabilities” on Tuesday.

Judith Heumann, US Department of State’s Special Advisor for International Disability Rights, will grace the forum together with advocates of persons with disabilities (PWDs) from the Philippine Government, civil society and academe, the US Embassy said in a news statement.

The forum will also include a presentation by Saint Paul University-Quezon City on “The Barriers to Employment and Economic Independence of People with Disabilities.”

The research was supported by the USAID’s Support the Employment and Livelihood of Persons with Disability (SELP) Activity.

SELP aims to reduce poverty and exclusion of people with disabilities in the Philippines through improved access to gainful employment and livelihood opportunities. To date USAID has provided employment and income generating activities for over 500 people with disabilities in Metro Manila, Metro Cebu and Davao City. Recto Mercene

student group to aquino: stop k to 12 implementation The militant student group League of Filipino Students (LFS) on Monday urged anew the Aquino administration to immediately stop the K to 12 program and confer the graduation of Grade 10 students in March 2016.

Citing data from the Department of Education (DepEd), LFS national spokesperson Charisse Bañez said that at least 2 million Grade 10 (4th year) students will not graduate from high school next year due to the full implementation of K to 12.

Tuesday, September 1, 2015 A5

B

udget Secretary Florencio B. Abad said that the government’s interest payments for the second quarter this year contracted by 2 percent year-on-year to P55.5 billion that allowed more spending for infrastructure projects to sustain economic growth.

He said that based on the disbursement report by the Department of Budget and Management (DBM) for the second quarter this year, interest payments were reduced for the second quarter this year compared to P56.6 billion during the same period last year due to the administration’s drive to improve debt burden management.

The DBM report showed that disbursements for infrastructure and outlays were among the highest spending at P81.8 billion for second quarter this year compared with P56.6 billion during the same period last year due to higher spending by the Department of Public Works and Highways.

“When we devote less of the budget to nat iona l debt, we can allocate more resources to antipoverty and economic development programs. In this manner, the national budget can be truly responsive to the needs of

the Filipino people,” Abad said in a news statement.

Earlier the budget chief emphasized the need to ramp up agency expenditures in light of the administration’s goal of rapid and sustainable economic growth.

He said vigorous and strategic government spending is key to driving economic progress.

“If we intend to sustain our country’s growth momentum, our departments and agencies will have to catch up with their spending targets and optimize their funds. We’ve already mobilized full-time delivery units [FDUs] across major spending agencies so we don’t lose sight of our expenditure and program implementation targets,” Abad said.

Abad said that with various pu bl ic f i n a nc e m a n a ge me nt refor ms bei ng i mplemented , agencies and departments are spending efficiently their respective allocations.

The DBM has been facing problems on underspending in the last three years with P303 billion underspent budget in 2014.

The Budget Department has stepped up measures to speed up spending, such as direct release of funds to local government units under the bottom up budgeting program. Estrella Torres

President Aquino’s flagship education, or the K to 12 program, will add two years of senior high school (Grades 11 and 12) to basic education.

“President Aquino should not bar millions of young Filipinos from entering college and deprive them of their right to tertiary education and a shot at a better future,” Bañez added.

Following the implementation of the K to 12 program, Bañez said that the number of high-school students who took the University of the Philippines College Admission Test (UPCAT) last Monday plunged to 6,000 from 87,000 in 2014.

“UPCAT is done. Most of the country’s top universities and colleges would have finished their admission tests before the year ends,” she said.

Jovee Marie N. dela Cruz

farmers get p2.3-m rubber tree production support

DAVAO CITY—Farmers in the tribal and Muslim villages of Tarragona town, Davao Oriental became recipients of a P2.3-million rubber tree plantation support from the regional Department of Agriculture and the Office of the Presidential Adviser on Peace Process.

The provincial government also joined in the distribution of the free seedlings and farm inputs to three farmers’ organization covering about 200 members in Tarragona, northwest of the capital town of Mati.

The DA said 40,000 rubber seedlings are expected to be planted to 200 hectares of farmlands in the villages of Ompao, Tomoaong and Tubaon. Along with the seedlings were 1,100 bags of organic fertilizer, 200 bottles of organic foliar fertilizer and 96 pieces of farming tools.

The beneficiary associations were the Ompao Muslim-Christian Cooperative (OMCC), Tomoaong United Lumad Association for Development and Ugbo Tubaon Mandaya Planters Association.

The project was implemented through the Payapa at Masaganang Pamayanan livelihood program. Manuel T. Cayon

Energy Undersecretary Donato D. Marcos bared these Philippine initiatives during the opening of the 46th Asia-Pacific Economic Cooperation Energy Efficiency and Conservation (Apec-EGEEC) Meeting held here on Monday.

“I trust that Apec will tackle interventions to mitigate the effects of climate change through energy efficiency and push for an environment friendly and developed economy,” he said.

For its part, Marcos said the Philippines has come up with an Energy Efficiency Road map and its corresponding action plan that it will undertake from 2016 to 2020.

“This road map is envisioned to be the master plan of the Philippines’s Department of Energy in achieving energy efficiency and conservation programs and activities to higher levels and define the role of the government in coming up with a range of measures aimed at improving energy efficiency, driven by legislative orders and decrees targeting energy saving programs,” he noted.

Marcos said the action plan has targeted five energy-intensive sectors, namely: transport, industry, commercial and residential buildings

and the cross-sectoral.

Moreover, the energy official said the Philippines is aggressive in the promotion and installation of RE, as it recognizes the importance of addressing energy issues relevant to economic growth and development.

“As a matter of record, we rank second as the largest geothermal producer in the world with 1,868-MW [megawatts] installed capacity as of 2013, or equivalent to 10.78 percent of the total installed capacity of the country,” he stressed.

For its energy efficiency programs, Marcos said the country has generated energy savings of 1.6 million tons of oil equivalent for the same year.

“The Philippines reaffirms its commitment to the Apec’s unified goal of building strong partnerships toward economic development as we are optimistic that with Apec support, our vision of harmonization and connectivity will come to excellent productive realization,” he further said.

The 46th Apec-EGEEC Meeting will discuss various priority areas, including energy efficiency policies and programs, and energy intensity and RE goals. PNA

Angara alarmed by Jica study on Metro traffic

S

en. Juan Edgarco “Sonny” Angara on Monday urged government authorities to immediately address the worsening traffic conditions in Metro Manila as studies have shown that Filipino workers not only waste time in traffic but also a quarter of their salaries.

According to a study by the Japan International Cooperation Agency (Jica), traffic congestion cost the country P2.4 billion every day in 2012.

“Traffic jams are mostly concentrated here in Metro Manila which

has a population of 20 million,” Angara said.

“The minimum wage of the workers is only P481 and 25 percent of P125 is consumed for transportation. Pagod na sila sa trabaho, pagod pa sila sa trapiko,” Angara said.

The lawmaker further urged the government to come up more with a long-term infrastructure and transport plan to address worsening traffic in the country.

“There must be discipline and order especially in our public transport system,” he pointed out. PNA

A6 Tuesday, September 1, 2015

Opinion BusinessMirror

editorial

Separation of Church and State

T

he protests and demonstrations staged by members of the Iglesia Ni Cristo (INC) over the weekend created a veritable firestorm of discussion centered in large measure on the concept of the separation of Church and State.

We are not here to take a position, one way or the other, on the merits or lack thereof as the case may be on the usefulness of taking to the streets to further a particular agenda or to voice a grievance. Street protests seem to be valid or invalid based on whether or not you agree with the protestors, regardless of what the issue is.

However, the greater concern is the call that comes up from time to time that organizations defined by religious beliefs be limited as to their involvement in helping sway public opinion about government actions and decisions.

The INC has been criticized as being too involved in being a political force, the same way that organizations of the Catholic Church were vilified about the reproductive-health law.

The Philippine Constitution embraces the concept of freedom of religion in that the government may not endorse a state religion and that a person is free to follow and exercise any religious belief he or she wants as long as practicing that belief does not violate basic laws.

But there are those that say church organizations violate the concept of church and state separation by being politically involved.

The US constitution was the first to prevent government from interfering in a person’s right to worship. A religious organization is not different legally from any other legally incorporated organization, and members of both groups have a constitutional protection of the right to free speech.

Therefore, both groups have a right to “interfere” in the formation of government policy.

In some ways, such as with tax laws, religion is given what may be considered special privileges over other groups, and that creates a problem. Some people feel that because of this freedom from taxation, religious groups are treated more favorably under the law than other organizations.

The 1905 French law on the “Separation of the Churches and the State” defines the religious neutrality of the state, the freedom of religious exercise and public powers related to the church. The “public power” was interpreted as the separation of religion from political power. Specifically, the implementation of the law was to protect the public power from the influences of religious institutions.

“Freedom of Religion” is, at the core, simply “Freedom of Speech.” Should religious organizations have the same absolute freedom of speech and right to influence political discussion as everyone else? Should freedom of speech be limited only to secular groups?

The more dangerous concern is, who gets to decide the answers to these questions.

A businessman’s take on the economy Manny B. Villar

THE Entrepreneur Seventh of a series

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heir diversification in the power industry is another indication of the big business groups’ optimism about the Philippine economy’s future. Power generation is both a capital-intensive and long-term investment; it does not yield profits overnight.

This is good for the Philippines, where power shortages can derail economic growth. The US Energy Information Administration, in a report published online in March, said the Philippines “is facing growing concerns over resource adequacy in its power sector, as the nation is challenged to add supply quickly enough to keep up with growing demand.”

The report noted that in Mindanao, power shortages had already led to recurring outages.

The big demand for electricity has opened opportunities for investments by the big players in business. GT Capital, the flagship firm of George S.K. Ty, conducts its power-generation business through its 51.3-percent direct ownership interest in Global Business Power Corp. (GBP), a leading independent

power producer in the Visayas with a combined gross dependable capacity of 704 megawatts (MW).

GBP continues to look for opportunities to expand its power portfolio not only in the Visayas but also in other parts of the country.

Trans-Asia Oil and Energy Development Corp., a unit of real-estate firm Phinma Group, is reportedly eyeing to double its generating capacity to about 500 MW by 2016, from 250 MW in 2014.

AC Energy Holdings Inc. of Ayala Corp., which initially ventured into renewable-energy projects, is now building a 540-MW coal-fired plant in Southern Mindanao as part of its efforts to have 1,000 MW in its power portfolio.

AC Energy currently has a total of 133-MW capacity in its wind-farm projects in Ilocos Norte.

It is all connected John Mangun

OUTSIDE THE BOX

T

he focus of attention has been on the global financial and asset markets for the last two weeks, as chaos seems to reign supreme. But it is much more than that, as we enter this next phase of the economic model where government began to lose the people’s confidence.

If you have not noticed lately, it is not “business as usual” in just about all aspects of what we consider normal life.

The markets, as well as politics, are only a reflection of what is going on deep inside the social structure.

Here is the key to the deal once again.

We are witnessing a type of global “phase transition” and that is also true in the Philippines. The scientific definition of a phase transition is “The transformation of a thermodynamic system from one phase or state of matter to another one by heat transfer. The term is most commonly used to describe transitions between solid, liquid and gaseous.” Water is liquid within a certain range of temperature. Reduce that temperate by removing the heat from the water and it becomes solid or ice. Increase the temperature and it becomes gas or steam.

Each move from one state to another comes from a violent change in the en-

vironment that requires the release of a tremendous amount of energy. Think of all the heat it takes to boil water or, conversely, think of all the energy necessary to transform water into ice.

The same thing happens in the socialeconomic world and it does not come quietly or calmly.

The United States is witnessing an unprecedented political shift. Republican Party front-runner businessman Donald Trump does not stand for any ideology, yet he is being criticized at the same time for being too conservative and too liberal. In second place is Ben Carson, a black, world-famous neurosurgeon, and neither of these men have ever held elective office and are now gunning for the top government spot in the world.

Challenging the queen of trapo politicians in America—Hillary Clinton—is Bernie Sanders, a political party inde-

Diversified San Miguel Corp. ventured into the power business by bidding for contracts to operate the power plants being privatized by the National Power Corp. This allowed the company, through SMC Global Power Holdings, to build a vertically integrated power company involving fuel sourcing, power generation and power distribution.

SMC Global’s portfolio includes the 1,000-MW coal-fired Sual Power Plant in Pangasinan, the 345-MW hydro-based San Roque Power Plant, also in Pangasinan, and the 1,200-MW gas-fired Ilijan Power Plant in Batangas.

SMC has also launched greenfield power plants in Alita, Davao, and in Limay, Bataan, with initial combined capacity of up to 900 MW. Manila Electric Co. (Meralco), the country’s largest power distributor, is also ramping up its investments in power generation.

In a media briefing in July, the company disclosed its plans to invest $1.2 billion in equity in ongoing power-generation projects. The equity investments will go to the 460-MW plant in Mauban, Quezon, and the 600-MW plant in Subic, Zambales, which are being pursued in partnership with other investors.

Meralco is also developing a 1,200MW power plant in Atimonan, also in Quezon, which will be 100-percent company-owned.

Meralco’s goal is to have a total generation capacity of 3,000 MW. Publicly listed Vivant Corp. of Cebu’s Garcia-Escano family, which already has 249 MW in its portfolio, is planning to

pendent who is a staunch socialist with the credentials to prove it.

Trump, Carson and Sanders are unbelievably far outside the political elite mainstream. Jeb Bush of the political dynasty that gave the US two presidents is being crushed in the polls. In a recently released mainstream political survey, the most often used word to describe Jeb Bush was “Bush”. To describe Mrs. Clinton, the one word used most often was “liar”.

We are seeing the same sort of thing here in the Philippines with political neophytes Grace Poe and Leni Robredo being seriously suggested to occupy Malacañang.

There are now daily protests in Malaysia for the removal of Prime Minister Najib Razak on charges of corruption.

Malaysians are not prone to going into the streets except to support issues along political party or ethnic lines. Now those lines are blurred.

In just two years Left-wing and populist Brazilian President Dilma Rousseff has seen her approval rating go from 79 percent to the current 8 percent, amid calls for her resignation or impeachment. Germany’s Angela Merkel is tied for Germany’s longest-serving head of government and is under intense pressure for supporting more immigration of Muslim refugees. Greece will hold elections for the second time in 2015.

Only 40 percent of Japanese approve of their prime minister’s performance.

Chinese investors kidnapped the head of the Fanya Metals Exchange, a government-regulated market that was

invest P67 billion for new power-generation projects with total capacity exceeding 460 MW in the next three years.

Minergy Power Corp., which is owned 40 percent by Vivant, is currently building a coal-fired plant with three generating units of 55 MW each in Misamis Oriental. The project is expected to be completed in 2017.

Citicore Holdings Investment Inc., the parent company of listed Megawide Construction Corp., is also going into power generation with the establishment of Citicore Power. The company plans to develop up to 500 MW of renewable energy (solar, hydro and biomass) as part of its diversification activities.

The power industry is also attracting foreign investors. A Reuters report in June cited Thailand’s Chow Steel Industries as saying one of its units would invest $43 million in solar-power plants in the Philippines. Construction of the power plants is expected to be completed in 2016, the report said.

The growing interest in the power industry is timely because of the exciting things that are happening in the business sector. The aggressive moves by the big business players to expand and diversify will translate into increased demand for power.

Again, this can only be good for the Philippines.

(To be continued) For comments, e-mail mbv.secretariat@gmail.com or visit www.mannyvillar.com.ph.

basically a legal Ponzi scheme.

This list could go on and on.

The annual US Federal Reserve (the Fed) meeting takes place this week with plans and general outlook for the year being defined. Fed Chairman Janet Yellen will not be attending. But what will be “attending” is a petition signed by 100,000 people telling the Fed not to raise interest rates until real wages go up. As SovereignMan.com’s Simon Black said, “All these people have their hopes and dreams tied on a quarter of a percent. That’s how ridiculous things have become.”

The last time there was a major downturn phase transition was at the middle of February 2007. We all know how that turned out. As a run-up to that transition, the Thai military staged a coup in Bangkok, declaring martial law, and the Shanghai Stock Exchange dropped 9 percent in one day, the largest drop in 10 years.

There are always going to be incidents of chaos and confusion. That is part of life. Of course, some people can tie all these events together into some sort of master conspiracy with politics and the global financial markets. However, maybe these are just the cycles and trends naturally moving the world.

E-mail me at mangun@gmail.com.

Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Roadblocks

A7

Tax reform is the best example of a ‘matuwid na daan’ change Ernesto M. Hilario

ABOUT TOWN

Y

ou would think that with the private sector now actively helping the government in building better road infrastructure through the Public-Private Partnership Program, both commuters and motorists would now be enjoying fast and safe travel to their destinations.

Banish the thought.

The stark reality is that even if we now have more expressways running the length and breadth of the main island of Luzon, we have yet to achieve the goal of seamless travel since there are many roadblocks along the way.

What is taking place now is that the toll-road operators—Manila North Tollways Corp. (MNTC) for North Luzon Expressway (Nlex) and Subic-Clark-Tarlac Expressway (SCTEx); San Miguel Corp.-Private Infra Development Corp. for TarlacPangasinan-La Union Expressway; San Miguel Corp.-Citra Metro Manila Tollway Corp. (SMC-Citra) for the South Luzon Expressway (Slex); Cavite Infrastructure Corp. (CIC) for the Cavite Expressway (Cavitex); and Star Infrastructure Development Corp. (SIDC) for the Southern Tagalog Arterial Road (STAR)—have been unable to do much to improve driving conditions and integrate the expressways, because government agencies overseeing public transport seem to be erecting one barrier after another in improving the road infrastructure.

Take the case of SCTEx, the country’s longest toll road with a span of 94 kilometers. Built at a cost of P28 billion through a loan from the Japan International Cooperation Agency, it opened in April 2008. Since then, SCTEx has shown marks of wear and tear and requires heavy repair work, the inevitable result of failure

by MNTC and its partner, Egis Projects S.A. of France, to formally take over the operation and maintenance (O&M) work for almost six years after MNTC was already supposed to do so.

MNTC’s O&M contract for SCTEx was approved under the Arroyo administration in 2009, but the Aquino administration deemed it fit to renegotiate the deal. After the renegotiations, President Aquino directed the Bases Conversion and Development Authority (BCDA) in November 2014 to stage a price challenge or competitive bidding for SCTEx’s O&M contract. MNTC won the price challenge in the absence of any rival bidder.

Up till now, however, the government has yet to award the O&M contract to MNTC, seven months after the toll operator won the price challenge and already deposited the P3.5-billion cash in an escrow account. The BCDA issued a Notice of Award to MNTC on February 4, but the official O&M contract is not yet in this toll operator’s hands because the Supplemental Toll Operation Agreement, though already approved by Toll Regulatory Board (TRB), is still pending at the Office of the President.

Work on the C-5 Link Expressway, a P9-billion, 7.6-km road project connecting C-5 Road in Taguig City to the R-1 (Coastal) Expressway, is also on hold as the TRB has yet to issue a Notice to Proceed, pending a certification from an independent consulting firm on the availability of the right-of-way (ROW) for the alignment already approved by the Department of Public Works and Highways (DPWH), the approval of a final engineering design now undergoing final review, and construction schedules and costs.

This Cavitex extension project has been favorably endorsed by Parañaque City residents, and has already been issued the required Environmental Compliance Certificate by the Department of Environment and Natural Resources. Once completed, the project is expected to relieve traffic congestion in Parañaque City and assure safe, fast and convenient expressway travel for other users in the

Tuesday, September 1, 2015

Cavite, Las Piñas, Taguig and Makati areas. But, despite the readiness of CIC to commence construction as soon as possible, a big obstacle is the lack of the TRB’s Notice to Proceed.

The snags do not end there. The P25.6-billion Metro Manila Skyway 3 of the SMC-Citra consortium and the Nlex-Slex Connector Road project of Metro Pacific Investments Corp. are also delayed because of the need to redesign both alignments, as the National Economic and Development Authority (Neda) Board has approved the North-South Railway Project, which will use the same railroad tracks of`the Philippine National Railways.

SMC-Citra has begun construction of Skyway 3, but has moved back its target completion to 2017. MPIC’s Nlex-Connector Road, on the other hand, has yet to start as government agencies tarried in making a decision to hold a Swiss Challenge after mulling over a joint venture with the Philippine National Construction Corp. that holds the franchise to both Nlex and Slex. It is only after the Neda Board has confirmed the Swiss Challenge that interested parties can submit counteroffers.

The Neda Board will still schedule a meeting to approve the Swiss Challenge process.

The P15.8-billion Ninoy Aquino International Airport Expressway, a four-lane, 7-km elevated expressway and 2.2-km at-grade feeder road that will provide access to Naia Terminals 1, 2, 3 and 4 and connect to the Skyway system and Cavitex, is already a year behind schedule due to the failure of the DPWH to secure the ROW for the project. It was originally scheduled to be completed in November to facilitate traffic during the Asia-Pacific Economic Conference summit in Manila.

ROW issues are, likewise, behind the delay in the start of the P35.42billion Cavite-Laguna Expressway.

ROW delivery could be completed in two years, or in 2017. Calax is a 44.6km, four-lane expressway connecting Cavitex in Kawit, Cavite, and the Slex-Mamplasan Interchange in Biñan, Laguna. MPIC formally signed the Calax concession deal on July 10 and made a down payment of P5.4 billion that same day—representing 20 percent of the P27.3-billion premium that it had offered to win the second public bidding.

ROW problems also hound MNTC’s Nlex Harbor Link project and the extension of Nlex from Mindanao Avenue to Commonwealth Avenue in Quezon City. If the government is able to deliver full ROW acquisition within the year, the construction of Segments 9 and 10 of the Nlex Harbor Link is expected to be completed by MNTC in December 2016.

Finally, the failure of the TRB to approve petitions for toll increases by the operators and concessionaires of Nlex, Slex, Cavitex and STAR has stymied the implementation of road improvements. The TRB even pressed SIDC to expand STAR’s Phase 2 expansion without waiting for the toll-fee adjustment, which the latter did, but the firm is now worried whether it can still recover its additional investment in STAR, amounting to P2.3 billion. The 22-km STAR Tollway 1 starts from Santo Tomas, Batangas, to Lipa City, while its 20km expansion project extended the expressway from Lipa City to Batangas City.

Amid all this, wonder no more that the traffic situation in and out of Metro Manila is in shambles.

E-mail: ernhil@yahoo.com.

Edgardo J. Angara

R

ep. Romero S. Quimbo, chairman of the House Committee on Ways and Means, recently called on President Aquino to convene the Legislative-Executive Development Advisory Council (Ledac) to tackle the growing clamor for income-tax reform.

As it’s a matter of taxation, the proposal was put forward by the House from where tax legislation must originate.

The Ledac was established in 1992 through Republic Act 7640 during the 9th Congress. It was authored

by Sen. Neptali Gonzales, a noted political and law expert, and myself.

The council was set up as a consultative and advisory body in which the country’s policy-reform agenda was drafted. The council serves as the mechanism to achieve cooperation between the President and Congress.

It’s the medium to break political gridlock between a President and a Congress belonging to opposing political parties.

Chaired by the President, the council includes the Vice President, the Senate President, the Speaker of the House, seven members from the Cabinet, three senators, three members of the House of Representatives

and three representatives appointed by the President, coming from local government units, the youth and the private sector.

At the time the Ledac was first established, the country was going through a tumultuous period, suffering a negative gross domestic product growth rate, high poverty incidence, a huge deficit and a paralyzing power crisis.

Broad and deep structural changes were needed. And the Ledac became the indispensable mechanism for galvanizing support and achieving the reform agenda.

The Ledac ushered in a politics of consensus. It flourished because the political leadership fostered a culture of collaboration rather than confrontation. Some political ana-

lysts consider the 9th Congress one of the most productive of the postEdsa Congress because of the structural reforms it had enacted.

Today the country is in a similar juncture. It needs to undertake deep reforms and structural overhaul again—this time, in particular, of its outdated tax system that marginalizes many Filipinos, while enriching a few.

Currently, our income-tax rates are among the highest in Asean.

These rates affect our global competitiveness and dampen our attractiveness to foreign investment, especially when Asean economic integration comes in full effect next year.

Sen. Sonny Angara, chairman of the Senate Committee on Ways and Means, sounded off this problem as early as the first quarter of 2014 as he filed Senate Bill 2149, which adjusts income-tax brackets and proposes a staggered decrease of tax rates over three years (for instance, from 32 percent to 25 percent). Revenue agencies sent mixed signals on their openness to the proposal, saying that income-tax reform should coincide with revenue-generating measures.

Recently, the Department of Finance endorsed to the President a so-called comprehensive tax-reform package, which included a reduction of income-tax rates (32 percent to 25 percent over six years) and an

increase of value-added tax from 12 percent to 14 percent. The President reportedly thumbed down the proposal and asked for other revenuegenerating or -neutral measures to be found.

Several analysts and groups, such as the Tax Management Association of the Philippines, have already proposed their own comprehensive tax-reform packages. A Ledac meeting is the most appropriate forum for such proposals to be vetted and discussed. With broad consensus, a reform agenda could be crafted and then implemented with deliberate speed.

Under past administrations, Ledac meetings were fairly regular given the council is mandated to meet at least once every quarter.

Malacañan Palace assures that coordination between the Executive and Legislative branches remains vibrant, though since 2010, only two Ledac meetings have been convened.

Comprehensive tax reform— aimed at striking an equitable balance between collecting revenues for government coffers and putting more into the pockets of Filipino families—should be an “all-handson-deck” affair. There is broad consensus that such reforms are urgent.

A Ledac meeting should be convened.

E-mail: angara.ed@gmail.com.

Two big winners from China’s big slowdown William Pesek

BLOOMBERG VIEW

H

ow panicked were investors last week about China’s stockmarket plunge? Enough to treat the Korean peninsula, a place that was teetering on the brink of war, as a safe haven.

Even as policy-makers braced for renewed military confrontation between North and South Korea, the won staged a rally.

That has made South Korean assets one of the few bright spots in a dark time for emerging markets. On August 24 alone, investors yanked $2.7 trillion out of developing nations, with Indonesia, Malaysia and Thailand especially hard-hit. It matched the violent September 2008 sell-off after Lehman Brothers collapsed.

Back then, Korea was battered so hard that pundits were calling it the “next Iceland” and the “Bear Stearns economy.” Now, together with the Philippines, it’s one of Asia’s only refuges from chaos.

It’s not hard to explain why many Asian economies are suffering from China’s slowdown. Exporters of commodities, who depended on a humming Chinese market, have especially suffered. But why are there such big outliers among battered emerging markets?

The answer is that investors are finally basing their decisions less

on herd mentality than nuanced, case-by-case analyses. “Emergingmarket investors have become a lot savvier,” economist Frederic Neumann of HSBC in Hong Kong says.

“Gone are the days where emerging markets were all lumped into one bucket. Today countries with stronger fundamentals are able to resist the spread of contagion washing over global financial markets.”

Along with South Korea and the Philippines, Neumann notes that even some frontier economies, like Vietnam, “have weathered global financial turmoil with apparent ease.”

The common link among the success stories is they’ve gotten the basics right since Asia’s 1997 financial meltdown: They have healthier financial systems, greater transparency, stronger banks, sober national balance sheets and reasonable current-account deficits.

Malaysia’s reckoning, by contrast, is long overdue. The ringgit is trading

near 17-year lows because scandalplagued Prime Minister Najib Razak cares more about staying in power than modernizing the country’s unproductive economy.

Meanwhile, Thailand’s military junta is undoing much of the progress Bangkok made since the late 1990s in strengthening the rule of law. And for all its gripes that Indonesia is being unfairly lumped in with Asia’s laggards, President Joko Widodo’s administration is rapidly losing the trust of investors. While there’s still time to win it back, Widodo’s first 315 days in office have been a case study in timidity, drift and lost opportunities.

Korea, by contrast, is on the “more credible side of the spectrum,” economist Marc Chandler of Brown Brothers Harriman says.

Even though China’s downshift and US interest rate hikes will eventually make a dent, the won was Asia’s top performer last week. Its 2.7-percent gain almost matched the drop in the Chinese yuan since August 11.

Meanwhile, Korean bond yields are falling. It turns out that the world’s central banks had it right last year when they boosted their Korean debt holdings. In 2014 they made up 45.4 percent of the foreign-held portion of Korea Treasury bonds, up from 41.8 percent a year earlier.

It may be time to start counting Korea as a developed nation, rather than an emerging market. Korea still faces many challenges, not least of which are its rogue family-run conglomerates. But its macroeconomic

performance deserves the recognition it’s receiving from investors.

The same goes for the Philippines. Since 2010 President Aquino has steadily improved his nation’s debt position (winning investmentgrade ratings in the process), attacked graft and drawn in waves of foreign-direct investment. Last month reporters asked Philippine central bank Governor Amando M. Tetangco Jr. if he’s worried about the specter of economic crisis haunting Asia at the moment. “There’s a herd mentality,” he said, “but there’ll be differentiation.” So far, he’s been proven right. The country formerly derided as the “sick man of Asia” has been standing its ground amid market chaos.

Risks abound, of course. While South Korea’s economic fundamentals are stable—it’s growing at a rate of 2.2 percent with a 3.7-percent jobless rate—its high household debt of $458 billion is a concern. Manila, for its part, faces an uncertain 2016 election, in which Ferdinand Marcos Jr., son of the dictator who ravaged the nation in the 1970s and 1980s, may make a bid for the presidency. History has shown that emerging markets are often just one bad leader away from relapsing into chaos.

For now, the relative stability washing over Korea and the Philippines underscores that steady leadership and long-term thinking matter.

It also shows that global investors are getting better at identifying those factors in Asia.

Fiorina may find center stage uncomfortable

By Albert R. Hunt Bloomberg View

T

here is a strong desire in Republican circles for Carly Fiorina to be on the main stage in the next presidential debate.

Few in the party say the former Hewlett-Packard (HP) chief executive has any chance of winning the nomination or even think she is the best candidate. Instead, they argue that a party that has a problem with female voters can ill afford a sizable top-tier field that’s exclusively middle-aged or older men. Moreover, they love her slashing attacks on Hillary Clinton, whom Fiorina frequently calls a liar.

Fiorina obviously would relish greater visibility, and her supporters anticipate that unlike the first presidential debate, on August 6, when she was on the undercard, she’ll be part of the main event on September 16.

If so, there will be a new level of scrutiny that she may not find altogether welcome.

There are two basic rationales for the Fiorina candidacy: She’s not a politician, and she was a successful business executive who knows how to run the economy and has dealt with world leaders.

The trouble is, she was a politician.

She ran for the Senate in California in 2010 and lost by more than 1 million votes to the incumbent, Barbara Boxer.

True, California is a Democratic state, but that was a banner year for Republicans, and Boxer never has been as popular a vote-getter as the state’s other Democratic senator, Dianne Feinstein.

During that campaign, Fiorina was seen as smart but politically naïve. She displayed a tendency, that remains evident in her presidential quest, to go into attack mode, which created sympathy, even some Republicans acknowledge, for the hard-edged Boxer.

But her central liability in that campaign was the qualification she held up as her chief asset: her experience as a high-level business executive. Starting as a receptionist, she climbed the corporate ranks. In 1999 she was named

CEO of HP, the renowned global technology company. She was No. 1 in Fortune magazine’s first list of the most powerful women in business.

Not long after arriving at HP, she engineered the deal of the year, a huge acquisition of Compaq, the personal computer company.

That soon went south. Profits disappointed, the stock plummeted, she alienated the families of HP’s fabled founders, along with many employees, and she lost the confidence of the board of directors. In 2005 she was fired. She walked away with a package worth $42 million, which could be hard to explain to voters struggling with jobs and stagnant wages.

Fiorina still insists she was a victim of a “boardroom brawl” and dismisses criticism of her record. She says the company doubled in size and added jobs on her watch.

That’s true, but only as a result of the Compaq acquisition, which many analysts consider a catastrophe. The company now is splitting into two

divisions. Fiorina usually dismisses criticism of her claims of success as partisan or politically motivated.

She also boasts of her international experience, claiming she has dealt with more heads of state than any candidate other than former Secretary of State Clinton, and that she understands President Vladimir Putin of Russia. Yet many of her international meetings were with business groups; she had one rather short one-on-one session with Putin in 2001.

The 60-year-old candidate has an appealing story beyond her rise in business. She’s a breast cancer survivor, and is admirably transparent about the death of her stepdaughter from drug abuse and has committed herself to fighting this scourge.

And if she gets on the big stage, she might be the one to go toe-to-toe with Donald Trump, who often disparages women, including Fiorina. Nonetheless, her two chief calling cards, as a successful business executive and a non-politician, may create more problems than opportunities.

2nd Front Page BusinessMirror

A8 Tuesday, September 1, 2015

‘Stocks, peso fall no impact on economy’

T

By Bianca Cuaresma

he recent bouts of volatility in the local markets—particularly in the stock and foreignexchange markets—brought about by developments in the global front are seen to have no significant effect on the country’s economy down the line, an international research institution said.

“Admittedly, the Philippines has been caught up in the recent market turmoil. Its stock market fell sharply on Monday [last week], and it is down by almost 6 percent [in the previous week]. However, the declines so far are unlikely to be enough to make much difference to the real economy,” Capital Economics for Emerging Asia said.

In the previous week, the stock market and the foreign-exchange market both hit steep drops, following the recent news from China’s domestic economy, particularly on the devaluation of its currency and the slump of its manufacturing data.

Likewise, Bloomberg said in a recent article that its most recent

Bloomberg-JPMorgan Asia Dollar Index showed that the Philippines moved along the pack in the movement of currencies in August this year.

“Vietnam’s dong lost 2.9 percent in August, heading for its biggest decline since February 2011, as authorities devalued the currency for the third time this year and also widened its trading band in response to China’s depreciation. Elsewhere in Asia, India’s rupee weakened 3.2 percent against the dollar this month. Taiwan’s currency fell 2.6 percent, Thailand’s baht dropped 2.5 percent and the Philippine peso declined 2.2 percent,” Bloomberg said.

According to the research

institution, the Philippines has nothing to worry amid the volatilities, as it remains relatively insulated from the shocks emanating from China.

“Among Asian economies, the Philippines has relatively little exposure to China’s domestic economy, concerns over which have been the main cause of the market sell-off. As far as the peso is concerned, the recent drop against the US dollar has been mild compared with those of other emerging-market currencies and is unlikely to worry the central bank,” Capital Economics said.

The research firm also expressed confidence that the country will be on the road to recovery, although the lower-than-expected results in the first half warrant a downgrade in growth forecast.

“In light of today’s slightly disappointing data, we are taking down our growth forecast for 2015 from 6 percent to 5.7 percent. However, that still factors in some further recovery over the coming quarters, and we are keeping our forecast for next year unchanged at 6.5 percent,” Capital Economics said.

“Conditions in the domestic economy look healthy, and a continued recovery in exports should help drive a further pick-up in growth over the coming quarters,” they added.

CONSTRUCTION RUSH IN 2014 DRIVEN ANEW

BY PRIVATE OFFICES

By Cai U. Ordinario

C

onstruction of office buildings boosted the value of private-construction projects by 25 percent in 2014, according to the Philippine Statistics Authority (PSA).

PSA data showed that the value of private-construction projects increased to P366.6 billion in 2014, from P293.1 billion in 2013.

This was largely due to the value of nonresidential construction projects, which increased 36.8 percent to P184.9 billion last year, from P135.2 billion in 2013. “[The] value of nonresidential construction accounted for more than half, or 50.4 percent of the total,” the PSA said.

The number of construction projects generated from approved building permits for the year 2014 totaled 126,875, 5.1 percent higher compared to the 120,775 construction projects in 2013.

The number of nonresidential construction projects increased 3.9 percent to 15,191 in 2014, from 14,622 recorded in 2013.

“The increase in number was brought about by the growth observed in the construction, led by agricultural [36.8 percent] and industrial [9.2 percent], institutional [9.1 percent] and commercial [7.2 percent] buildings,” the PSA said.

Another major contributor to the total value of private construction was the residentialconstruction segment. PSA data showed the value of constructed residential buildings increased 14.2 percent to P152.8 billion in 2014, from P133.8 billion in 2013.

Residential construction projects also increased 2.8 percent to 90,201 in 2014, from 87,767 recorded in 2013.

The minimal increase in the number was caused by the decline in the construction of single-type houses (0.5 percent) and other residential buildings (19.7 percent), the PSA said.

However, const r uc t ion of duplex/quadruplex-type houses showed a remarkable increase of 175.4 percent.

Other types of residential construction projects that also See “Construction,” A2

PEACEFUL PROTEST Commuters use the Metro Rail Transit as protesting members of the Iglesia Ni Cristo (INC) occupy the intersection of Shaw Boulevard and Edsa in Mandaluyong City. The INC accused of Justice Secretary Leila de Lima of meddling in the internal affairs of the religious group for ordering an investigation into the alleged abductions of its members. KEVIN DE LA CRUZ

Doubts about China’s leaders sap confidence

T

he fear that gripped financial markets this month is a stark one: That China’s economy might be slipping into a decline that could persist for years.

But the world’s second-largest economy isn’t collapsing—certainly not yet, anyway. What’s really in freefall is confidence in its leaders, once seen as wielding near-mythic power to keep their economy growing at a propulsive pace.

Global stock markets have sunk —and gyrated—as investors have wrestled with their doubts. The Dow Jones industrial average has lost nearly 1,000 points since China’s surprise move to devalue its currency on August 11. That step, in part an

effort to align the yuan with market forces, was also seen by investors as a desperate bid to fuel exports in a faltering economy.

“The incredible faith in the Chinese policy-makers has been shaken,” says Ruchir Sharma, head of Morgan Stanley’s emerging markets equity team.

For all its woes, China still outruns every other major economy.

For 2015 while the nearly healthy US economy will expand, perhaps, 2.5 percent, even most pessimistic analysts predict that China’s will grow at least 5 percent. Yet, its growth has decelerated for four straight years.

Continued on A2

www.businessmirror.com.ph

COMPETITION ACT TO BOOST PHL’S ROLE IN SERVICES GVC Continued from A1

services and investment restrictions and achieving balance in regulatory reform, among others.

The Neda official added that GVCrelated initiatives, along with appropriate legal instruments, will contribute to the work on structural reform.

“We would like to see greater participation of services in various GVCs that will increase productivity and add value to goods produced. In the process these will create more jobs and make growth more inclusive,” Esguerra said.

Esguerra led the Philippine delegation to the third Apec Senior Officials’ Meeting during the Joint Meeting of the Apec Group on Services and Market Access Group (GOS-MAG).

The joint GOS-MAG meeting showcased studies on how select Apec economies opened markets for services in specific sectors so they can benefit from their participation in GVCs. Apec discussions on GVCs in services trade will also be discussed at the Apec Structural Reform Ministerial Meeting on September 7 and 8 in Cebu.

Islamic Banks. . .

Continued from A1

inclusion and ensuring universal access to financial services, Iqbal said at the recent Islamic banking forum hosted by the National Commission on Muslim Filipinos (NCMF).

Iqbal said there is an increasing interest in Islamic finance from nonMuslim countries, like the United Kingdom, Germany, France, Luxemburg, Germany, Hong Kong and South Africa.

The World Bank has also been supportive of the initiative to establish a regulatory framework for Islamic finance in the Philippines.

From a mere $150 -bi l l ion industry in the mid-1990s, Islamic finance is now worth $3 trillion, according to NCMF Bureau of Muslim Economic Affairs (BMEA) Director IV Aleem Siddiqui Matabalao Guiapal.

“The World Bank wanted the Philippines to get a slice of the $3-trillion global Islamic finance market.

We will surely explore that market,” he told the BusinessMirror.

He said all they need is a regulatory framework to expand Islamic banking and finance in the country.

The bill to amend the charter of the Al-Amanah Bank and providing for the regulation and organization of an expanded Islamic banking system in the Philippines has already been filed in Congress.

“We have the Al-Amanah Bank, the sole Islamic bank in the country. Citibank has its own Islamic window. To further expand the Islamic banking system, the Bangko Sentral ng Pilipinas [BSP] said banks may set up an Islamic bank unit within their commercial banking charter. Foreign banks wanting to set up branches here may offer Islamic banking” services, as well, he said.

The BSP heads the Islamic Finance task force, composed of the BSP, the Bureau of Internal Revenue, the Philippine Deposit Insurance Corp., the National Commission on Muslim Filipinos (NCM and AMIN (Anak Mindanao) Partyl-ist.

“Shariah financing is more stable.

It puts the money in tangible investment and not in presumptive investments. Even the non-Muslim would benefit from it. In Malaysia more than 40 percent of the clients of Shariah products were non-Muslims.

They are even Chinese investors,” he said.