Caribbean Business - March 24, 2016

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A faster network. n Find out m more inside. w e e k o f M A R C H 2 4 - 3 0 , 2 0 1 6 | V o l . 2 E d i t i o n 1 1 | WEEKL Y $ 2 . 0 0 | © 2 0 1 6 La t i n M e d i a H o u s e , LL C | car i b b e a n b u s i n e s s . p r

Debt Recovery Act has its Day in Top Court

Obama Trip to Cuba Sets Stage for Further Opening

Financial Control Board Still Up in the Air

If at First You Don’t Succeed, Try, Try Again

Status Issue Remains at Forefront Page 6

Sticking Points Remain Page 7

Yet to be Scheduled for Markup Page 8

New Tax Reform Bills Filed in House Page 24

COVER STORY

TOP STORY

Jittery Creditors Leery of Debt Moratorium Talk Measure Could Thwart Prepa, Prasa Deals Creditor groups angling to recoup their investment in the face of Puerto Rico’s volatile debt crisis are facing a deeper crisis of confidence as talk of legislation to declare a debt moratorium continues to resound among lawmakers and officials tied to the administration of Gov. Alejandro García Padilla.

And patience is wearing thin

“All the talk about legislation to facilitate a debt moratorium makes investors jittery,” said one lobbyist with ties to two creditor groups who chose to remain nameless.

As previously reported by Caribbean Business, the government could be pressed to enact debt-moratorium legislation, as the clock

among creditor groups that will soon receive a revised debtrestructuring offer from the commonwealth government.

While La Fortaleza continues to say that debt moratorium remains an option, it has yet to call on the Legislature to enact a moratorium law. At least two sources have told Caribbean Business that the administration is seriously evaluating whether to pull the trigger on such a measure.

continues to tick on Congress to act timely on Puerto Rico’s fiscal crisis—if it decides to do so. With the support of the U.S. Treasury, the García Padilla administration is seeking broad debt-restructuring tools, but a majority of Republicans on Capitol Hill have yet to come onboard with the idea, and instead are calling for strong fiscal oversight.

Puerto Rico’s Aging Population Another Lost Decade Report The idea of a traditional retirement after age 65 is a notion that is fading as rapidly as the legendary gunslinger Shane rode off into the sunset.

Back in 2008, a fifth (20%) of Puerto Rico’s residents age 40 and older expected to retire at any age between 68 and 80.

And even as early as 2007, the U.S. Bureau of Labor Statistics (BLS) estimated two major shifts would occur in workforce demographics that would

lead American employers to face “unique human resources challenges”—the aging of the workforce and a diminishing number of young workers. Almost 10 years later, that estimation has become a harsh reality for Puerto Rico with a potential for even harsher consequences for the local economy.

“The law in Puerto Rico states that a senior citizen is anyone who is 60 years or older. But even though this age is the

judicial cutline for what is considered the second half of our lives, as part of the senior citizens’ group, distinctions must be made [within this group],” said gerontologist Mildred Rivera.

In 2010, the U.S. Census Bureau reported 20.4% of Puerto Rico’s population was 60 years of age or older, and 14.5% was 65 years or older.

BY JUAN A. HERNÁNDEZ pages 14-18

BY philipe schoene roura & LUIS J. VALENTÍN continues on page 4

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Thursday, march 24, 2016

Contents

Editorial

picture of the week page 24

By Philipe Schoene Roura EXECUTIVE EDITOR

Those Were the Days Tax reform

Advertising Calendar............................................................................................38 Autos.....................................................................................................................37 Banking/Finance............................................................................................. 10-11 Column.................................................................................................................19 Cover Story...................................................................................................... 14-18 Economy.......................................................................................................... 12-13 Editorial..................................................................................................................2 From the Web........................................................................................................23 Government..................................................................................................... 24-25 Lead Stories........................................................................................................ 6-8 Legislature............................................................................................................27 Marketing..............................................................................................................38 Municipalities.......................................................................................................26 Politics............................................................................................................ 28-30 Poll........................................................................................................................22 Sin Comillas.................................................................................................... 12-13 Sports...................................................................................................................36 Technology............................................................................................................36 Top Story............................................................................................................ 1, 4 Tourism.................................................................................................................31

Financial Data: Stock Comment.....................................................................................................12 Winners & Losers..................................................................................................12

special feature: Brand-New Companies................................................................................... 33-35

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In the days of old, when the governor was bold and jobs were created by the tens of thousands, Puerto Rico produced Old Colony, a soft drink that had a huge consumer base on the island— uvita, the grape flavor, was canned “By the People, For the People.” That was but one product canned in a local factory that employed several hundred people. The economy grew at a steady clip averaging more than 4% growth annually—Puerto Rico developed a reputation as one of the world’s top manufacturing locations.

Sadly, in 2016, Puerto Rico has become an “Old Colony.” The U.S. Census Bureau reported 20.4% of Puerto Rico’s population was 60 years of age or older in 2010, and 14.5% were 65 years or older. By 2014, those 60 and older were estimated to be 812,000, or 28.4% of the population, representing an 8% increase in just four years.

This is a worrisome trend that has been exacerbated by the flight of thousands of young professionals and families leaving Puerto Rico every year, with no end in sight. Populations that age at a disproportionate rate put a huge strain on societies in the way of pensions and decreased productivity.

Puerto Rico is in a free fall of apocalyptic proportions that started in 2006 and shows no signs of abating.

Dating back to the epicenter of this historic decline, Puerto Rico has seen more than 325,000 jobs lost and more than 12,000 businesses close.

The lack of jobs has forced more than 300,000 residents to leave the island over the past decade. Many of those who have left are college graduates and professionals with families who either cannot find work or are not paid competitive salaries. Take the case of schoolteachers and nurses who are heading for the states in droves because

they are being offered compensation packages that are often double the pay here.

This edition’s cover story, the third installment in a series on Puerto Rico’s Lost Decade, takes a look at Puerto Rico’s aging population—more than an anthropological account on a graying population, the report has telling—if not harrowing—indicators that should concern us all. For instance, a 2014 survey conducted by AARP, formerly the American Association of Retired Persons, estimates that 40% of senior citizens in Puerto Rico were living below the poverty level. That is four times higher than the poverty rate for seniors in the United States.

The AARP study reports that some 537,000 senior citizens in Puerto Rico are out of the labor force and living on a fixed income provided by Social Security benefits, pensions and the federal Nutritional Assistance Program.

At the same time, there is particular pressure put on pension plans, which happen to be unfunded in Puerto Rico and there is huge weight on health plans, which face a crisis tracing to a steep drop off in federal funding levels scheduled to hit in 2018. Then, there is a decline in productivity by a gray population that pays fewer taxes.

The combination is toxic to economic growth—it should be of particular concern to whoever wins the race for La Fortaleza in November.

Yes, debt restructuring and financial control are important to fix this discombobulated economy. But this newspaper has yet to see one credible plan that would lead to job creation.

This is an essential element in bringing back professionals and their families, as well as capital that can put Puerto Rico on a path to economic growth. n

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Thursday, march 24, 2016

Top Story Moratorium

Continued from cover

The standoff is taking place in the face of a fast approaching debt cliff— the commonwealth has large debt-service payments of $422 million due May 1 and more than $1.5 billion due July 1—which if unmet would prompt investors to file suit and bring down the fragile restructuring paradigm like a house of cards.

“This requires legislation and we have been discussing it for a long time. It is probably something that is necessary for Puerto Rico,” said Senate President Eduardo Bhatia earlier this week, when asked about declaring a debt moratorium.

He stressed that the island has reached the end of the road and was quick to point out that litigation would most likely follow.

For his part, House Speaker Jaime Perelló seemed a bit more optimistic than his counterpart in the upper chamber, as he believes there is still time for Congress to act and avoid having to locally pass a debt moratorium law.

“With all this [debt moratorium talk], I don’t want Congress saying, ‘let’s not act because they are saying they would do that,” Perelló noted, while adding that all efforts must continue to focus on achieving timely congressional action. Nevertheless, absent the latter, he said legislation would be enacted to guarantee government stability.

Effects on Prepa, Prasa The possibility of declaring a debt moratorium could hinder the prospects of the island’s main utilities, the Puerto Rico Electric Power Authority (Prepa) and Puerto Rico Aqueduct & Sewer Authority (Prasa), to access the market for much-needed financing.

“A measure to pave the way for what essentially amounts to a default will lead to litigation that could have devastating consequences on the Prepa and Prasa deals,” a source told Caribbean Business.

The moratorium monologues could have a negative impact on headway that has already been made in tortured negotiations

Source Says Moratorium Means Default

water utility’s securitization bill cleared the House two weeks ago, it has been pending the Senate’s consideration ever since.

Consensual, debtrestructuring talks between Puerto Rico and its creditors would run counter to the administration’s demands on Capitol Hill over broad debtrestructuring authority. fraught with complexity at Prepa—principally tied to the multiplicity of creditor groups backing the utility’s roughly $9 billion debt. “Imagine the impact that default on payments hitting in May could have on the securitization deals struck with Prepa,” the source noted.

Prepa was able to reach a restructuring agreement with a majority of its

creditors and is now moving forward on a series of milestones geared toward consummating the deal.

Meanwhile, Prasa could also be affected if the commonwealth defaults on its debt—with or without a moratorium law—as it tries to follow Prepa’s footsteps in establishing a securitization mechanism that would allow it to access capital markets. While the

New debt-exchange offer As this newspaper was going to press on Tuesday, at least two sources told Caribbean Business that the administration could present, as soon as this week, a revised voluntary debt-exchange proposal to creditors.

“This week, the excuse could be the Easter break, but the truth is that they still have a May 1 payment to meet and it could be done,” said one creditor who represents a huge constituency.

While some creditor groups have said talks with the commonwealth’s restructuring brigades have picked up steam lately, they still believe the government has somehow been dragging its feet, particularly amid the impasse in Congress.

Consensual, debt-restructuring talks between Puerto Rico and its creditors would run counter to the administration’s demands on Capitol Hill over

broad debt-restructuring authority.

As for the commonwealth’s most recent offer, it is expected to address some of the feedback received since the government put forth its last offer in February, particularly from those holding general-obligation (GO) and Sales Tax Financing Corp. (Cofina by its Spanish acronym) bonds.

The two groups of bondholders are in a classic faceoff over the hierarchy of their investment—GO holders claim to have precedence because their paper is backed by Puerto Rico’s constitution, while holders of Cofina bonds claim priority by noting that the portion of the island’s sales tax that pays Cofina has never been in the government’s pockets.

In this dangerous game of chicken being played by competing interests— analysts have resorted to the Latin phrase pari passu (all things being equal) to explain what in simple English means “treating things equally.” In the end, creditors have realized it will be impossible to please everyone equally. n

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Thursday, MARCH 24, 2016

Lead

Top court has to deal with thorny status issue as it decides legality of Debt Recovery Act

U.S. Supreme Court Faces Dilemma on Whether Puerto Rico can be Treated Differently from 50 States

By EVA LLORÉNS VÉLEZ e.llorens@cb.pr

The U.S. Supreme Court was expected to hear oral arguments this week on a case that has serious ramifications on Puerto Rico’s legal right to restructure its debt, leaving everyone sitting on the edge of their seats as they wait for a final determination.

Facing a $70 billion debt load, impatient bond investors and Congress’ unwillingness to act, the commonwealth argued for its right to pass its own law that would allow it to restructure its own debt as it presented arguments on the combined cases of Puerto Rico v. Franklin California Tax-Free Trust and Acosta-Febo v.

Franklin California TaxFree Trust.

Justice Samuel A. Alito Jr. recused himself because some of his investments

include Puerto Rico bonds, while late Justice Antonin Scalia’s seat remains vacant. Experts have said these two developments are favorable to Puerto Rico because the case will likely be decided by seven judges. Alito is viewed as conservative, as was Scalia. Of the remaining seven, four are considered liberal and three are conservative.

Behind this case and another one that the top court recently heard involving Puerto Rico’s right to prosecute individuals who have already been convicted for the same crimes in a federal court, is the broader question as to whether the U.S. commonwealth can be treated differently from the other 50 states.

In 1984, Congress took away from local government agencies, the right to file for federal bankruptcy

protection—otherwise known as Chapter 9—a right retained by other jurisdictions. Two years ago, the commonwealth government enacted the Debt Recovery & Enforcement Act to allow local utilities to restructure their debt and continue operating. However, a

group of investors challenged the law. A federal judge in Puerto Rico and the U.S. Court of Appeals for the First Circuit ruled that the Recovery Act was pre-empted by the Federal Bankruptcy Law. The ruling has left Puerto Rico in legal limbo to deal with its debt.

“Something baffles me. This is the first case that I have heard of preemption by omission….

The law remains preempted even though there is nothing to pre-empt it with,” said Popular Democratic Party Rep. Luis Vega Ramos, noting that

“Something baffles me.

This is the first case that I have heard of pre-emption by omission….The law remains pre-empted even though there is nothing to pre-empt it with.”

—Popular Democratic Party Rep. Luis Vega Ramos, noting that Puerto Rico cannot benefit from Chapter 9 of the U.S. Bankruptcy Code.

Puerto Rico cannot benefit from Chapter 9 of the U.S. Bankruptcy Code.

A few days before the hearing, the commonwealth and Government Development Bank (GDB) President Melba Acosta filed last-minute briefs challenging the plaintiffs’ arguments that Congress intended to prevent Puerto Rico from enacting its own bankruptcy law.

“That position can be sustained only if Congress made “clear and manifest” its intention to preempt several of the most fundamental aspects of Puerto Rico’s police powers—the power to manage its public corporations and to protect its citizens from economic calamity. But Congress did not do so….Far from signaling pre-emption, that statutory design fits the approach Congress has always taken in bankruptcy matters: When entities like Puerto Rico’s municipalities are excluded from federal law, they may be governed by their States’ bankruptcy statutes,” the GDB argues in its brief.

While the Puerto Rico government is trying to focus on the technical aspect of pre-emption,

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Nicolás Nogueras, a lawyer and former lawmaker, said the Supreme Court is inevitably faced with the dilemma of having to discuss the island’s political status as it dwells on whether Puerto Rico can be treated differently from other jurisdictions.

“Whether they say the law is valid or not, they cannot get away from the argument on whether Puerto Rico can be discriminated against. This goes further than the technical aspect of the problem,” Nogueras said.

“The only way they can say Puerto Rico should not be treated differently is by saying it must be treated like a state,” he added.

During a recent forum discussing the case, constitutional law Prof.

Carlos Gorrin said the problem will not be resolved, regardless of how the Supreme Court may rule, because the island’s problem is structural. Any decision, either by the Supreme Court or Congress that would allow bankruptcy protection, is just a temporary aid “to cure the patient but not the disease that continues to fester,” he said. n

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Thursday, MARCH 24, 2016

Lead

Obama makes ‘historic’ trip to Cuba

Differences Persist but Castro, Obama Vow to Continue Talks

BY JUAN A. HERNÁNDEZ j.hernandez@cb.pr

The presidents of the United States and Cuba, Barrack Obama and Raúl Castro, respectively, agreed Monday, March 21, that while there are still serious and profound differences between the two governments, they will continue to work to build a relationship based on areas of agreement.

“I have come to Havana to extend the hand of friendship to the Cuban people. I am here to

bury the last vestige of the Cold War in the Americas and to forge a new era of understanding to help improve the daily lives of the Cuban people. There continue to be real and important differences between our governments, including profound differences on the way to promote safety, security, opportunity, and human rights. But there’s so much Americans and Cubans share—our cultures and passions, our hopes for the future, not to mention a love of baseball,”

Obama said after meeting with Castro in Havana.

For his part, the Cuban president assured that a lot more could be achieved if the U.S. embargo to the Communist Caribbean nation is lifted, but recognized the positive steps made by the Obama administration to normalize relations between the two countries.

“A lot more could be done if the United States decides to lift the blockade…We must agree that the latest measures adopted by his [Obama’s]

government are positive, but they are not enough…

The blockade is the most important obstacle for our economic development and the well being of the Cuban people. That is why its elimination is essential for the normalization of bilateral relations,” said Castro, who also mentioned the U.S. returning Guantánamo Naval Base to Cuba as a requisite for normalizing relations.

Seeming to anticipate Castro’s requirements, Obama previously mentioned that “sometimes the most important changes begin with the smallest step.”

Still, there is a package of bilateral proposals being negotiated to expand

cooperation between Cuba and the U.S. in such areas as the war against drugs and commercial and passenger air safety, as well as public health issues.

Another area of collaboration still being negotiated between the representatives of both countries Monday afternoon was the issue of commercial trade.

Before departing for Argentina, the U.S. president was scheduled to meet on Tuesday with members of the opposition in Cuba, a meeting he insisted on having. And while Obama does not expect significant advances in terms of easing state regulations on political dissent and media control, among other civil liberties, he

said those issues were discussed “openly” with Castro.

“This is something that we are going to stay on,” Obama said, adding that for the moment, “in the absence of that, I think it will continue to be a very powerful irritant.”

The U.S. president’s objective is to create the conditions for normalizing relations between the two countries and establishing a series of trade and exchange mechanisms that, once in place, would not be easily undone by his successor at the White House. For most analysts, reestablishing relations with Cuba will be part of Obama’s legacy as president. n

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Thursday, MARCH 24, 2016

Lead

Legislation to provide debt relief for Puerto Rico still in the works

Congress Working to Ease Puerto Rico’s Fiscal Crisis Restructuring Poses Sticking Point in Drafting Measures

BY EVA LLORÉNS VÉLEZ e.llorens@cb.pr

By March 31 at the latest, the U.S. House Natural Resources Committee is slated to present the bill that would establish a “strong” oversight board to help Puerto Rico deal with its $70 billion debt; however, it is unclear if the legislation will have the votes for approval.

Parish Braden, communications director for Committee Chairman Rob Bishop (R-Utah), in response to a question from Caribbean Business, denied House Republicans were in no mood to pass a bill helping Puerto Rico.

“No one has seen the bill, it is still being drafted.

It will be released publicly

by March 31 at the latest.

We will hold a hearing and markup shortly after that,” he said. He did not know if the legislation

will contain language that would promote the economy’s revitalization.

A “background call” with reporters was slated this week.

The committee has sent out hints about the contents of the legislation via Twitter. According to the panel, in addition to the strong fiscal oversight board, the legislation will require audited financial statements, provide for voluntary debt restructuring, set government reforms and fiscal responsibility, and restore market confidence.

Gov. Alejandro García Padilla and other officials were in Washington, D.C., lobbying Congress for solutions to the crisis since the island could become insolvent as early as May. Democrats in the House and Senate are proposing to allow the island to restructure all of its debt,

a fiscal oversight board, and parity and improved federal funding.

However, Senate Finance Committee chair Orrin Hatch (R-Utah), in a speech from the Senate floor, told Democrats and the administration to be more transparent and realistic since they were proposing “unworkable” solutions to the crisis.

“The latest group of bills introduced by Democrats include a number of repackaged ideas from last year, including unscored and unsound proposals to allocate funds and direct aid as well as a renewed effort to grant unprecedented debt resolution authority for Puerto Rico,” Hatch said.

He added that any congressional solution must be done “in a manner that is fiscally responsible with an eye toward righting the irresponsible

course taken by the government of Puerto Rico.”

Democrats in Congress and the U.S. Treasury Department have not said how much the proposals will cost.

Chapter 9 Hatch also attacked Democrats for incorrectly saying their restructuring ideas or bills would simply be an extension of federal Chapter 9 bankruptcy law, which allows a state’s public authorities to restructure their debts.

“In reality, their proposal would create, for lack of a better word, a Super Chapter 9 specifically for Puerto Rico and grant the territory unprecedented authority to

restructure its debt,” he said.

Pension obligations vs. GOs A bill from Sen. Bob Menéndez (D-N.J.) would elevate Puerto Rico’s pension obligations to the level of senior secured debt, which presumably means they would have priority over the commonwealth’s constitutionally backed generalobligation debt (GOs) since pension obligations are neither secured nor debt unless these are pension bonds.

Hatch reportedly said that proposal was “irresponsible” and instead called for “at least some action to improve public pension reporting and

Sen. Orrin Hatch said any congressional solution must be done “in a manner that is fiscally responsible with an eye toward righting the irresponsible course taken by the government of Puerto Rico.”

transparency” instead of allowing complete restructuring that would cause costs to go up because of “bad and imprudent actors.”

Hatch called upon Democrats to help Puerto Rico by showing interest in a bill that he and Sens. Lisa Murkowski (R-Alaska) and Chuck Grassley (R-Iowa) introduced last year.

Their legislation would not provide any restructuring authority but instead would establish an authority that could issue bonds and provide up to $3 billion in resources, taken from unallocated Affordable Care Act funds, to help Puerto Rico stabilize its budget and debt. The bill also calls for a number of studies, including on the commonwealth’s pension plans and liabilities, and healthcare treatment by the federal government. Additionally, it would provide assistance to the island to improve its accounting and disclosure practices, given the opacity of the commonwealth’s current financial situation.

García Padilla says any legislation should provide a stay on the debt. n

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Thursday, march 24, 2016

Banking/Finance

25 Puerto Rico-chartered credit unions represent 56% of assets and members in full credit-union system

Group of Puerto Rico-Chartered Credit Unions Presents Novel Debt-Restructuring Idea ‘Entry Point’ Exchange Proposal Allows ‘Fair’ Treatment of Investors

BY JOSÉ L. CARMONA j.carmona@cb.pr

A group of the 25 largest and most active among the 116 Puerto Rico-chartered credit unions, or savings & loans co-ops, which hold 40% to 50% of the $1.1 billion in government bonds in the hands of local credit unions, have joined in a debtrestructuring proposal that they say would allow for “fair” treatment of investors.

The restructuring proposals publicly disclosed by the Puerto Rico government, namely the “superbond” as well as the “base/growth bond” proposals, would imply a 57% loss of the par value of current holdings of Puerto Rico investors—a capital loss estimated at about $7.7 billion to Puerto Rico’s economy, based on the financial and economic analysis of Ramírez & Co., the financial adviser to the credit union representative group.

In addition to the harsher treatment of Puerto Rico investors, the credit unions claim the government’s proposals uniformly punish traditional investors, while favoring speculative investing.

Entry Point exchange offer Seeking what they say is a more equitable

approach, the 25 Puerto Rico credit unions sought the help of local corporate law firm Sosa Lloréns Cruz Neris & Associates LLP, which along with Ramírez & Co., conducted a research and analysis and came up with a novel restructuring idea, called Entry Point Exchange.

“We believe the goals of the proposed debt restructuring can be achieved with a fair treatment of investors and without hurting the economy, if the pricing of a voluntary exchange proposed to creditors is based on each bondholder’s ‘entry point,’ that is, the price at which each bondholder acquired their respective Puerto Rico bonds,” José Sosa-Lloréns, partner at Sosa Lloréns Cruz Neris & Associates LLP, explained to Caribbean Business during an exclusive interview.

Sosa Lloréns said that recognizing the speculative interests of some investors, and to encourage their participation, the Entry Point Exchange offer could include a modest profit margin above the entry price, but never exceeding par value.

The exchange, he added, would seek to match the shortest tenor (i.e. length of time of a debt’s maturity) of the new bonds to those investors who acquired the bonds at the

lowest price. Conversely, investors who acquired their bonds at par would be offered bonds of a longer tenor, he added.

“This alternative pricing structure could certainly face pushback from investors seeking to profit from the seniority and rights granted to the different investor classes. However, if properly structured, any such challenge would be at a handicap to prove

that a higher value was paid to par value buyers, who would receive bonds of a longer tenor,” Sosa Lloréns said.

A scenario prepared

by Ramírez & Co. for the restructuring of all Government Development Bank (GDB) outstanding debt under the proposed alternative showed that the GDB would receive principal payment relief over a six-year period, and would extend its tenor profile from an average life of 4.7 years for its bonds to 15.4 years.

The principal reduction would amount to about $1.042 billion, or 28.5% of the GDB’s total debt, the analysis revealed.

Continues on page 11

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11

Thursday, march 24, 2016

Banking/Finance Continued from previous page

“The damaging loss of capital that would be caused to Puerto Rico’s economy by the current restructuring proposals would be further amplified by the impairment to the regulatory capital of Puerto Rico’s state chartered credit unions, which as we all know, constitute one of Puerto Rico’s main institutional investors of commonwealth bonds,” Sosa Lloréns commented.

The island’s chartered credit unions constitute a key component of Puerto Rico’s financial system, facilitating financial intermediation, providing savings and lending products to over one million

members and depositors, including a high proportion of low- to mediumincome families and senior citizens, said the former Commissioner of Financial Institutions.

The island’s chartered credit unions have 966,274 members, total assets of $8.47 billion, total shares and deposits of $8.09 billion, and a risk-weighted regulatory capital of $342 million.

The financial analysis and stress tests of the system show that its core components, including the Cooperatives Supervision & Insurance Corp. are healthy, safe and sound— except for the risk associated with commonwealth government paper, Sosa

Advantages of an Entry Point Exchange offer • Bolsters the commonwealth government’s credibility and market reputation • New Puerto Rico bonds would trade at prices closer to par • Allows the government to achieve debt relief across the investor spectrum • Reduces risk of litigation • Would be based on actual market prices and trading ranges for each specific issuer • Would reduce the credit exposures of monoline bond insurers

“Reparation of this risk is part of the government’s inherent duty to protect the safety and soundness of financial systems and of preserving the savings of members and depositors.”

—José Sosa-Lloréns, partner at Sosa Lloréns Cruz Neris & Associates LLP Lloréns noted.

“The risk comes from the government’s conditions, and not from the credit unions themselves, and reparation of this risk is part of the government’s inherent duty to protect the safety and soundness of financial

systems and of preserving the savings of members and depositors,” he said.

“Let us not forget that a majority of the system’s members and non-member depositors are lowto middle-income working families and senior citizens.” n

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12

Thursday, MARCH 24, 2016

WINNERS & LOSERS WINNERS&& LOSERS WINNERS WINNERS & LOSERS WEEKLY PERFORMANCE OF PUERTO RICO STOCKS WEEKLYPERFORMANCE PERFORMANCE OF OF PUERTO PUERTO RICO RICO STOCKS STOCKS WEEKLY

WINNERS FOR THE WEEK WINNERS FORTHE THEWEEK WEEK 52-wk 52-wk WINNERS FOR

PRICE

PRICE

52-wk 52-wk PRICE 52-wk 12/31 PRICE SYMBOL LOW52-wk HIGH SYMBOL LOW HIGH 12/31 -

PRICE PRICE 1/8 1/8 -

PUERTO12/31 RICO 1/8 STOCKS STOCKWEEKLY PERFORMANCE SYMBOL 52-wk LOW OF 52-wk HIGH CHANGE PRICE PRICE STOCK STOCK -

STOCK SYMBOL LOW HIGH - Popular - THE WINNERS FOR Inc. BPOP- WEEK 22.40- 35.81 LOSERS FOR THE WEEK First BanCorp FBP 52-wk2.06 52-wk 6.76 LOSERS FOR THE WEEK 52-wk 52-wk LOSERS FOR THE WEEK Evertec Inc. EVTC LOW11.27 HIGH 23.12 STOCK SYMBOL STOCK SYMBOL 52-wk LOW HIGH 52-wk OFG Bancorp OFG 52-wk 4.5652-wk 17.46

STOCK Popular Inc. STOCK

SYMBOL LOW BPOP 25,80 SYMBOL LOW

HIGH 35,83 HIGH

Popular Inc. 25,80 35,83 Triple-S Management Corp. BPOP GTS 17,34 27,07 LOSERS FOR THE WEEK Popular Inc. BPOP 25,80 35,83 Triple-S Corp. GTS 17,34 27,07 EvertecManagement Inc. EVTC 14,93 23,12 52-wk 52-wk Triple-S Management Corp. GTS 17,34 27,07 52-wk 52-wk STOCK SYMBOL LOW HIGH Evertec Inc. EVTC 14,93 23,12 OFG Bancorp OFG 6,25 17,83 Evertec Inc. EVTC SYMBOL 14,93 LOW23,12HIGH STOCK OFG OFG 6,25 17,83 FirstBancorp BanCorp FBP 2,97 6,76 Popular Inc. BPOP 25,80 35,83 OFGTriple-S BancorpManagement Corp.

OFG GTS 6,25 17.3417,8327.23 First BanCorp 2,97 6,76 Triple-S Management Corp. FBP GTS 17,34 27,07 First BanCorp FBP 2,97 6,76 Evertec Inc. EVTC 14,93 23,12

3/11 - 28.35 3.01 PRICE PRICE 13.96 12/31 12/31 PRICE 7.18 PRICE

CHANGE CHANGE -

3/18 CHANGE -28.57 - 0.22 3.15 0.14 PRICE PRICE 14.00 0.04 1/8 CHANGE 1/8 CHANGE PRICE 7.20 0.02 PRICE

12/31 28,34 12/31

1/8 25,84 1/8

CHANGE -2,50 CHANGE

28,34 23,91 28,34 23,91 16,74 PRICE 23,91 PRICE 12/31 16,74 7,32 16,74 3/11 7,32 3,25 28,34 25.98 7,32 3,25 23,91 3,25 16,74

25,84 22,07 25,84 22,07 15,47 PRICE 22,07 PRICE 1/8 15,47 6,30 15,47 3/18 6,30 2,99 25,84 24.74 6,30 2,99 22,07 2,99 15,47

-2,50 -1,84 -2,50 -1,84 -1,27 -1,84 CHANGE -1,27 -1,02 -1,27 CHANGE -1,02 -0,26 -2,50 -1.24 -1,02 -0,26 -1,84 -0,26 -1,27

Sin Comillas is a Spanish-language digital media website that specializes news in suchdigital areas media as economics, banking, Sin Comillas Comillasinis isbusiness aa Spanish-language that Sin Spanish-language digital mediainwebsite website that planning and tourism.

Sin Comillas was founded 2010 by specializes in business news in such areas as economics, banking, specializes in business news in such areas as economics, banking, economist andtourism. journalist García Pelatti. planning and SinLuisa Comillas was founded in 2010 by planning and tourism. Sin Comillas was founded in 2010 by economist and journalist Luisa García Pelatti. economist and journalist Luisa García Pelatti.

Sin Comillas is a Spanish-language digital media website that Public-Debt to Hold First Meeting specializes in business Audit news in suchCommittee areas as economics, banking, Public-Debt Audit Committee planning and tourism. Sin Comillas was founded in 2010 by to Hold First Meeting Public-Debt Audit Committee to Hold First Meeting Next Week economist and journalist Luisa García Pelatti.

Next Week Week Next Public-Debt Audit Committee to Hold First Meeting Next Week

Banks’ Assets at Their Lowest in 15 Years

Weekly Comment on Puerto Rico Stocks OFG Bancorp OFG 6,25on Puerto 17,83 7,32 Stocks 6,30 -1,02 Weekly Comment Rico Weekly Comment on Puerto Rico Stocks Despite a stronger-than-expected U.S. jobs-growth report for December, For the first time in 2016, the Standard & Poor’s (S&P) 500 Index

First BanCorp FBP 2,97 6,76 3,25 2,99 -0,26 the Standard & Poor’s (S&P) 500 Index and Dow Jones Industrial Average closed for the year last Friday, as the Federal Despite positive a stronger-than-expected U.S. jobs-growth report forReserve’s December, posted their worst five-day start to a year on record last Friday, on contindocile and a strengthened outlook induced Despite atone stronger-than-expected U.S.U.S. jobs-growth report for December, the Standard & Poor’s (S&P) 500 Index andeconomic Dow Jones Industrial Average ued concerns a slowdown in500 China could damage thefears globalfaded. economy.

At investors take on more risk as Last the Standard & Poor’s (S&P) andrecession Dow Jones posted theirto worst five-day startIndex to a year on record lastIndustrial Friday, onAverage continthe end of trading last Friday, the Dow fell 1.02%, the S&P 500 lost 1.08% Friday’s rally was viewed as a continued reaction to the Fed’s move posted their worst five-day start to a year record the lastglobal Friday,economy. on continued concerns a slowdown in China couldon damage At and the Nasdaq Composite dropped 0.98%.

The weekly declines on the S&P last Wednesday, when it scaled back expectations for the number ued concerns a slowdown in China could damage the global economy.

At the end of trading last Friday, the Dow fell 1.02%, the S&P 500 lost 1.08% and thehikes were the largest since September 2011, and the largest on reof rate in the months.

The top-three indexes gained Despite aDow stronger-than-expected U.S. jobs-growth for December, the end trading last coming Friday, the Dow fell 1.02%, thereport S&P 500 lost 1.08% and theofNasdaq Composite dropped 0.98%.

The weekly declines on the S&P cordthe to mark the start a year.

Data released

by Jones theIndustrial U.S. BureauAverage of Labor for fifth week in aof row, while the Dow Jones the Standard & Poor’s (S&P) 500 Index and Dow Industrial Average and the Nasdaq Composite dropped 0.98%.

The weekly declines on the and the Dow were the largest since September 2011, and the largest onS&P reclosed higher every day last week.

Inincreased fact, theby Dow closed positive Statistics showed U.S. nonfarm payrolls 292,000 inon December posted their worst five-day start toSeptember a year on record last Friday, continand thetoDow were largest since 2011, and the largest on record mark the the start of a year.

Data released by the U.S. Bureau of Labor for the firsta time in steady 2016 last Thursday.

Following the Fed’s and concerns the jobless rate held at 5%.

In addition, U.S. payrolls for October ued slowdown in China could damage the global economy.

At cord to mark the start a year.

Data released by the U.S. Bureau of Labor Statistics showed U.S.ofnonfarm payrolls increased by 292,000 in December move, the greenback weakened, driving up commodity prices. and November were revised to show 50,000 more jobs created than previthe end of trading last Friday, the Dow fell 1.02%, the S&P 500 lost 1.08% and the showed jobless rate steadypayrolls at 5%. In addition,by U.S. payrolls October Statistics U.S.held nonfarm increased 292,000 infor December Meanwhile, oilOil rose above $42 barrel, signaling it hadof hit bottom. ously reported. prices fell for aafifth day last Friday.

Fears aon slowdown and the Nasdaq Composite dropped 0.98%.

The weekly declines the S&P and November were revised toat show 50,000 more jobspayrolls created for than previand the jobless rate held steady 5%.

In addition, U.S. October Stronger-than-expected U.S. economic data on jobs and wages, in China and were the global economy kept spooking investors lastlargest week, creatand the Dow the largest since September 2011, and the on reously reported.

Oilexpectations prices fell afor fifth day last Friday.

Fears of a slowdown and November were revised tofor show 50,000 more jobs created than previplus improved corporate earnings, have eased ing a turbulent start to the trading year.

For the week, the Dow fell 6.2% to cord to mark the global start of a year. Data released by the U.S.last Bureau ofcreatLabor in China the economy kept spooking investors ously reported.

Oil prices fell for a fifth day Friday.

Fears of week, a slowdown fears of and a stateside recession.

Bank oflast America and JPMorgan each 16,346.45.

The S&P 500 lost 6% to 1,922.03, while the Nasdaq Composite Statistics showed U.S. nonfarm payrolls increased by 292,000 infell December ing a 2.9% turbulent to the trading year.

For the week, thelast Dow 6.2% to inrose China and after the start global economy kept spooking investors week, creattheto financial companies announced share buyback Index dropped 7.3% 4,643.63. and the jobless rate held steady at 5%.

In addition, U.S. payrolls for October 16,346.45.

The S&P 500 lost 6% to 1,922.03, while the Nasdaq Composite ing a turbulentgiving start to thebiggest tradingboost year. For the Dow to programs, the to the week, S&P 500.

For fell the 6.2% week, and November wereto revised to show 50,000 more jobs created than previIndex dropped 7.3% the Dow roseS&P 1.8% to 4,643.63.

17,602.3.

S&P 500 gained 1.3% to Composite 2,049.56, 16,346.45.

The 500 lost 6% toThe 1,922.03, while the Nasdaq On the local front, the Government Development Bank’s Puerto Stock ously reported.

Oil prices fell for a fifth day last Friday.

Fears of aRico slowdown while the Nasdaq Index was up 1% to 4,795.65.

Index dropped 7.3% toComposite 4,643.63.

Index (PRSI) posted a heavy loss during its first week of the year, spearin China andfront, the global economy kept spooking investors last week, creatOnOn thethe local the Government Development Bank’s Puerto Rico Stock local front, the Government Development Bank’s Puerto headed by last start week’s massive stock selloff.

For the the week, the PRSI lost ing a turbulent to the trading year.

For the week, Dow fell 6.2% to Rico Stock Index (PRSI) managed its fifth positive weekly closing Index (PRSI) posted a heavy loss during its first week of the year, spearOn150.86, the local front, the Government Development Bank’s Puerto Rico Stock or 8.62%, to close at 1,598.79, with all components in the red for the 16,346.45.

S&P 500massive loststock 6% stock torally.

1,922.03, while theweek, Nasdaq Composite last week, buoyed the For the week, PRSI added headed

by The last week’s selloff.

For the the PRSI lost Index (PRSI) posted a by heavy loss during its first week of the the year, spearfive-day period.

Leading last week’s nongainers was OFG Bancorp, which Index dropped 7.3% to 4,643.63.

7.42, or 0.44%, toclose close at 1,690.86.

Topping last in week’s list of 150.86, or 8.62%, to at 1,598.79, with all components the red for the headed last week’s massive stock selloff.

For followed the week, PRSI Inc., lost erasedby $1.02, or 13.93%, to close at $6.30.

It was bythe Popular gainers was First BanCorp, whichnongainers climbed 14 cents, or 4.65%, to five-day period.

Leading last week’s was OFG Bancorp, which 150.86, orskidded 8.62%, $2.50, to close at8.82%, 1,598.79, withat all$25.84. components red for the which or to close Sharesin ofthe First BanCorp On theat local front, Government Development Bank’s Puerto Rico Stock close $3.15.

Itthe was followed Popular Inc., which moved up erased $1.02, orLeading 13.93%, to close at by $6.30.

It waswas followed

by Popular Inc., five-day period. last week’s nongainers OFG Bancorp, which fellcents, 26(PRSI) cents, or 8%,ato close atat $2.99.

Triple-S Management Corp. edged Index posted heavy loss during its first week of the year, spear22 or 0.78%, to close $28.57.

Shares of Evertec Inc. rose which$1.02, skidded $2.50, orto8.82%, to close $25.84.

Shares by of First BanCorp erased or 13.93%, close at at $6.30.atIt was followed Popular Inc., down $1.84, or 7.70%,to to close $22.07.

Shares of Evertec lost $1.27, headed byor last week’s massive stock selloff.

For the week,Inc. the PRSI lost 4 cents, 0.29%, close at $14.00.

OFG Bancorp inched up 2 fell 26 cents, or 8%, to close at $2.99.

Triple-S Management Corp. edged which skidded $2.50, or 8.82%, to close at $25.84.

Shares of First BanCorp or 7.59%, to close at $15.47. cents, or 8.62%, 0.28%,toto close at $7.20.with Last week’s sole nongainer was 150.86, close at 1,598.79, all components in the red for the down $1.84, or or 8%, 7.70%, to close $22.07.

Shares of Evertec Inc. lostedged $1.27, fell 26 cents, to close at at $2.99.

Triple-S Management Corp.

Triple-S Management Corp., which erased $1.24, or 4.77%, to close five-day period.

Leading last week’s nongainers was OFG Bancorp, which or 7.59%, to close at $15.47. down $1.84, or 7.70%, to close at $22.07.

Shares Evertec by Inc. lost $1.27, By $24.74.

José L. Carmona at erased $1.02, or 13.93%, to close at $6.30.

It wasoffollowed Popular Inc., senior reporter, Banking/FinanCe orwhich 7.59%,skidded to close$2.50, at $15.47. or 8.82%, to close at $25.84.

Shares of First BanCorp By José L. Carmona By José L.BUsiness Carmona CariBBean fell 26 cents, orBanking/FinanCe 8%, Banking/Finance to close at $2.99. Triple-S Management Corp. edged Senior Reporter, senior reporter, ByCaribbean José L.$1.84, Carmona Business down or 7.70%, to close at $22.07. Shares of Evertec Inc. lost $1.27, CariBBean BUsiness senior reporter, Banking/FinanCe or 7.59%, to close at $15.47.

CariBBean BUsiness

Weekly Comment on Puerto Rico Stocks

Puerto Rico Senate President Eduardo Bhatia called for the first meeting next Tuesday, Jan. 19, of the Public Debt Audit Committee. The committee will examine and evaluate the hiring, refinancing and/or renegotiatPuerto Rico Senate President Eduardo Bhatia called for the first meeting next Tuesday, Jan. 19, of the Public ing process of Puerto Rico’s public debt, the origin and destination of resources, as well as the performance of Puerto RicoCommittee.

Senate President Eduardo Bhatia called for first meeting next Tuesday, Jan. 19, renegotiatof the Public Debt Audit The committee will examine andthe evaluate the hiring, refinancing and/or programs financed with internal or external debt. The first meeting was originally set for December but was Debt Audit Committee.

Thepublic committee willorigin examine evaluateof the hiring, refinancing and/or renegotiating process of Puerto Rico’s debt, the andand destination resources, as well as the performance of cancelled. The Public-Debt Audit Committee was created through Act 97 of 2015 in July, and has to render programs with internal external debt. The meetingofwas originally but wasof ing processfinanced of Puerto Rico’s publicordebt, the origin and first destination resources, as set wellfor asDecember the performance reports of its performance every six months. cancelled.financed The Public-Debt Audit or Committee was created through Act 97originally of 2015 inset July, has to render programs with internal external debt.

The first meeting was forand December but was reportsRico of its performance every sixCommittee months. cancelled.

The Public-Debt Audit was created Act 97 of Tuesday, 2015 in July, has render Puerto Senate President Eduardo Bhatia called for the through first meeting next Jan. and 19, of thetoPublic The commission has to define the methodology to conduct the audit of Puerto Rico’s $70 billion debt as orDebt Audit Committee.

Theevery committee will examine and evaluate the hiring, refinancing and/or renegotiatreports of its performance six months. dered by law, create a database that allows for all manner of analysis regarding the indebtedness process and TheLUISA commission has to define the debt, methodology toand conduct the2015— audit of Puerto Rico’s $70 billion debt as oring process of Puerto Rico’s public thefor origin destination of resources, as as In the performance By GARCÍA PELATTI 10.2% in fourth-quarter share ofwell 17%. third place isof set up an information transparency system the investigative, auditing and future indebtedness processes. dered by law, create ato database that allows for all manner of analysis regarding the indebtedness process and programs financed with internal ormethodology external debt.

The first meeting was originally set for December but was The commission has define the to conduct the audit of Puerto Rico’s $70 billion debt as the biggest drop in 19 months— Oriental, with $6.653 billion inorset up an information transparency system the investigative, auditing and future processes. cancelled.

The Public-Debt Audit Committee was created through Act 97 of 2015 inindebtedness July, and to render dered by law, create a database that allows for all manner of analysis regarding the process PuertoBhatia, Rico banks’ assets havemembers marking 28 negative quarters. assets, 4.7% less thanhas a year ago,and Besides the committee’s are P.R. House Speaker Jaime Perelló; Senate majority spokesperreports of its performance every six months. set up an information transparency system for the investigative, auditing and future indebtedness processes. not stopped falling since midloans continued to Rican with a 12% market share. son Aníbal José Torres; Senate MinorityMortgage Leader Larry Seilhamer, Puerto Independence Party Sen. María Besidesand Bhatia, committee’s members are P.R. House Speaker Jaime Perelló; Senate majority spokesper2008, in the fourth-quarter drastically decreased

by Minority In addition to commercial de Lourdes Santiago; House Majority fall Leader Charlie and Hernández; House Leader Jenniffer González; son Aníbal José Torres; Senate Minority Leader Larry Seilhamer, Puerto Rican Independence Party Sen. María The commission has to define the methodology to conduct the audit of Puerto Rico’s $70 billion debt as orBesides Bhatia, the committee’s members P.R. HouseMelba Speaker JaimeStatistics Perelló; Senate majority spokesper2015 assets plummeted toBank theirPresident 12.4%&are in fourth-quarter 2015. banks, the financial system inGovernment Development Chairwoman Acosta; Institute Executive Mario de Lourdes Santiago; House Majority Leader Charlie Hernández; House Minority Leader Jenniffer González; dered by law, create a database that allows for all manner of analysis regarding the indebtedness process and son Aníbal Josésince Torres; Senate Minority Leader Puerto Independence Party Sen. María Marazzi; economist José Alameda; lawyer & CPALarry JuanSeilhamer, Lorenzo Martínez; Puerto Rico Syndicate of Workers lowest level 2001.

AsMortgage-loan portfolios rep- Rican cludes international organizaGovernment Development Bank President & Chairwoman Melba Acosta; Statistics Institute Executive Mario set up an reached information transparency system for the auditing and future indebtedness processes. de Lourdes Santiago; House Majority Leader Charlie Hernández; House Minority Leader Jenniffer González; President Roberto Pagán; FirstBank President Aurelio Alemán; Irma Hilario Arroyo, representing the Caguas sets had a record level resent 65% ofinvestigative, total loan portfotions, credit unions, brokerage Marazzi; economist José Alameda; lawyer & CPA Juan Lorenzo Martínez; Puerto Rico Syndicate of Workers Government Development President & Chairwoman Melba Acosta; Statistics Institute Executive Mario Savings & Loan Cooperative; and Chamber of Commerce President Frank Medina. of $101.479 billion in theBank lastP.R. lios.

Commercial loans fell 26% firms, mortgage institutions President Roberto FirstBank President Aurelio Alemán; Irma Hilario Arroyo, representing the Caguas Besides Bhatia, thePagán; committee’s members are P.R. Juan House Speaker Jaime Perelló; Senate majority spokesperMarazzi; economist José Alameda; lawyer & CPA Lorenzo Martínez; Puerto Rico Syndicate of Workers quarter of 2005. while personal loans experiand other entities. In the fourth Savings & Roberto Loan and P.R. Chamber ofthe Commerce Frank Medina. son Aníbal José Cooperative; Torres; Senate Minority Leaderby Larry Seilhamer, Puerto Rican bodies, Independence Party Sen. María President FirstBank President Aurelio Alemán; Irma Hilario Arroyo, representing thesysCaguas These appointments were made last November heads ofPresident both legislative compliance with the Assets stood at Pagán; $56.527 bilenced a 7.3% reduction. quarter of in 2015, the entire de Lourdes Santiago; House Majority Leader Charlie Hernández; House Minority Leader Jenniffer González; Savings & Loan Cooperative; and P.R. Chamber of Commerce President Frank Medina. disposition of law that states that if the governor didn’t complete the appointments within 10 days after the lion, which is $3.856 billion Investments—another of the tem had $143.584 billion in asThese appointments were made last November by the heads of both legislative bodies, inout. compliance with the Government Development Bank President & Chairwoman Melba Acosta; Statistics Institute Executive Mario law went into effect, by mutual agreement the heads of the Legislature would carry them less (minus 6.4%) than in the bank assets’ components— sets, which is 6.1% less than disposition of law that states that if the governor didn’t complete the appointments within 10 days after the Marazzi; economist José Alameda; lawyer & CPA Juan Lorenzo Martínez; Puerto Rico Syndicate of Workers These appointments were made last November ofquarter both legislative in compliance fourth quarter of 2014, accordgrew 26.2%by inthe theheads fourth 2014, bodies, representing $9.336with bil-the law went into effect, by mutual agreement the heads of the Legislature would carry them out.

President Roberto Pagán; FirstBank President Aurelio Alemán; Irmathe Hilario Arroyo, representing the Caguas “The fiscal situation at a critical moment whereby determined has to10bedays taken re-the disposition ofand lawits that states that ifare the2015. governor didn’t complete appointments within after ing tocountry the Financial Institutions of lion lessaction in assets.

Savings & Loan Cooperative; and P.R. Chamber of Commerce President Frank Medina. garding the debt.

In this process, transparency is indispensable for all parts, especially for the people of Puerto law went into effect, by mutual agreement the heads of Legislature would carry thembanks out. in Puerto Commissioner’s Office (OCIF Banco Popular is the in first place determined Commercial “TheThat country and its fiscal are at Public-Debt a critical moment whereby action to and be taken reRico. is the spirit of thesituation creation of the Audit Committee through Act 97 ofhas 2015, it is my by its Spanish acronym).

Asset in terms of assets among local Rico manage 39% of financial garding the debt.

In this process, transparency is indispensable for all parts, especially for the people of Puerto Thesecountry appointments were last November by themoment heads of whereby both legislative bodies, in compliance the commitment that ismade taken to carry the duties described in that law,” Bhatia said.

“The and action itsin fiscal situation are out at awith critical determined action has toare be with taken rereduction all Puerto banks, $26.355 billion, which assets.

37% manRico.

That occurred isof the spirit the creation of the Public-Debt Committee throughAnother Actwithin 97 of 2015, andafter it is the my disposition law thatof states that if the governor didn’t Audit complete the appointments 10 days garding the debt.

In this process, transparency is indispensable for all parts, especially for the people of Puerto Rico banks, except for is 2.4% more than year ago, in and aged by them international entities BY SINwent COMILLAS STAFF commitment that action is taken to carry out the duties described that law,” Bhatia said. law into effect,

by Popular. mutual agreement the heads of athe Legislature would carry out.

Rico.

That isportfolios the spirit of theconcreationits of the Public-Debt Audit Committee($53.569 through Act 97 of 2015, and it is my Mortgage also market share has increased billion).

Investment commitment that action is taken outIn the dutiesplace described in thatcompanies law,” Bhatiahave said. $6.515 billion BY SIN COMILLAS STAFF tinue on an accelerated fall. to carry to second is First“The country and its fiscal situation are47%. at a critical moment whereby determined action has to be taken reLoans, which have not been Bank, whose assets dropped 1.4% in assets, representing 5% of garding the debt.

BY SIN COMILLAS STAFF In this process, transparency is indispensable for all parts, especially for the people of Puerto growing late 2008, fell to billion; it Audit has a Committee market the total. n 97 of 2015, and it is my Rico. Thatsince is the spirit of the creation of $9.717 the Public-Debt through Act

commitment that action is taken to carry out the duties described in that law,” Bhatia said.

13

Thursday, MARCH 24, 2016

Electoral Districts’ Profile Revealed Customs Facilities to be Renovated at LMM Airport

BY SIN COMILLAS STAFF

The Puerto Rico Statistics Institute announced publication of the “Demographic Profile of the Electoral Districts: 2010-14.” The information focuses on Puerto Rico’s population by geographic regions, such as the island’s electoral districts, and uses the latest estimates from information collected over the five-year period 2010 to 2014.

The source of information for the publication is the Survey on the Community of Puerto Rico conducted by the U.S. Census Bureau.

“The profile provides a comprehensive picture of each electoral district with essential information about the particulars of each region’s population. The information provided in the profile provides a starting point for people interested in studying electoral districts, which may stimulate deeper and more comprehensive studies about the districts,” said the

institute’s Executive Director Mario Marazzi Santiago.

The profiles are divided by demographic, social, economic and housing characteristics. Specifically, it presents data on sex, age, race, relationship, marital status, fertility, school enrollment, academic level, and veteran and disability classification of the inhabitants and dwellings of each senatorial and representative district. It also provides data on place of birth, language spoken at home, ancestry, employment status, occupation, industry, class of worker, income, benefits, health insurance, poverty, housing occupancy and year it was built, among others.

The profile is available in the publications section of the institute’s website. The publication consists of two volumes. Volume I is the senatorial districts’ profile and Volume II is the profile for representative districts. n

BY SIN COMILLAS

Aerostar Airport Holdings, the company that operates the Luis Muñoz Marín (LMM) International Airport in Carolina, will invest $4 million in the construction of new facilities for the U.S. Customs & Border Protection.

The facilities to be located in Terminal A, will occupy 30,000 square feet, where there will be a center for passenger documentation processing, an area for administrative support and sanitary facilities.

Once completed, the facilities will have the capacity to support the processing of 400 airline passengers an hour.

The facilities will allow passenger traffic to go much faster through the terminal and will count on an area of 5,000 square feet for visitors’ baggage claim. Furthermore, the renovated area will have space to perform security checks for those passengers who have connecting flights in Puerto Rico as they travel to their final destination.

Construction should be completed by September of this year.

Puerto Rico Secretary of State Víctor Suárez Meléndez participated in the groundbreaking ceremony at the airport.

Aerostar, a Puerto Rico-based joint venture of Highstar Capital and Grupo Aeroportuario del Sureste, the latter of which operates the airport in Cancún, Mexico and eight other airports in southeastern Mexico, was tapped by the Puerto Rico government to run LMM Airport under a 40-year public-private partnership (P3) deal that took effect in early 2013. The P3 deal calls for Aerostar to invest nearly $1.4 billion over the life of the lease to transform the airport into a world-class gateway.

Since taking over management of Puerto Rico’s main international airport, Aerostar has invested an estimated $937.4 million in remodeling and modernizing the facilities. n

—Editor Rosario Fajardo contributed to this story.

Puerto Rico Among the Happiest Countries in the World

By SIN COMILLAS

It is no surprise that Syria, which has been mired in a civil war since 2011 that has provoked the displacement of millions of refugees, is one of the least happy countries in the world. Syria is ahead only of Burundi, one of the 10 poorest countries worldwide. The World Happiness Report classifies 156 countries by the level of happiness of their inhabitants using six indicators: per capita income, social support, life expectancy, freedom to make life choices, generosity and perceptions of corruption.

This year, Puerto Rico appears in the 15th position, improving from last year, despite the island’s ongoing economic and fiscal woes. The first-five positions are European countries: Denmark (1), Switzerland (2), Iceland (3), Norway (4) and Finland (5). Canada (6) is the first country from the Western Hemisphere on the list. The United States (13) is followed by Costa Rica (14).

Among the 10 countries with the lowest happiness levels, eight are in Africa and two are at war: Syria and

Afghanistan. The life expectancy of the first 10 countries on the list is more than twice the life expectancy in the last 10 countries on the list.

Greece is the country that has reduced its happiness level the most, while there has been a greater increase in Latin American countries. n

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Thursday, MARCH 24, 2016

Puerto Rico’s Lost Decade Part iii in a Series

Life After 60 in Puerto Rico’s Lost Decade

BY JUAN A. HERNÁNDEZ j.hernandez@cb.pr

T

It is a Marathon!

he idea of a traditional retirement after age 65 is a notion that is fading as rapidly as the legendary

gunslinger Shane rode off into the sunset.

Back in 2008, a fifth (20%) of Puerto Rico’s residents age 40 and older expected to retire at any age between 68 and 80. And even as

early as 2007, the U.S. Bureau of Labor Statistics (BLS) estimated two major shifts would occur in workforce demographics that would lead American employers to face “unique human resources

challenges”—the aging of the workforce and a diminishing number of young workers. Almost 10 years later, that estimation has become a harsh reality for Puerto Rico with a potential for even

harsher consequences for the local economy.

“The law in Puerto Rico states that a senior citizen is anyone who is 60 years or older. But even though this age is the judicial cutline for what is considered

the second half of our lives, as part of the senior citizens’ group, distinctions must be made [within this group],” said gerontologist Mildred Rivera.

Continues on next page

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Thursday, MARCH 24, 2016

Continues from previous page

The situation with so many senior citizens living in poverty and on fixed incomes has prompted a significant number of people who are still working to postpone their retirement, while those who have retired are contemplating or even returning to the workforce, perhaps part-time or in different fields altogether.

Continues from previous page

In 2010, the U.S. Census Bureau reported 20.4% of Puerto Rico’s population was 60 years of age or older, and 14.5% was 65 years or older.

By 2014, those 60 and older were estimated to make up 28.4% of the local population or 812,000, of the non-institutionalized population 16 years and older.

This trend, which was

originally attributed to lower birth rates in Puerto Rico and longer life expectancy, is expected to continue in the coming years, as Puerto Rico’s lost decade and continuing fiscal and economic woes have led thousands of residents to move to the U.S. seeking better lives. According to the Census Bureau, about 300,000 people have migrated out of Puerto Rico in recent years, and many of these are younger adults with children who have favored the state of Florida as their new home. In a recent interview with Caribbean Business, the president of the Broward Chamber of Commerce said a survey ordered by the Orlando Sentinel newspaper confirmed more than 100,000 Puerto Ricans had moved there in recent years.

This trend coincides with the exit since 2006 of many pharmaceutical plants and other companies operating in Puerto Rico under Section 936 of the U.S. Internal Revenue Code, after the section was repealed by Congress. Since then, and along with other factors, Puerto Rico’s economy has spiraled down into a recession lasting 10 years.

The direct and indirect effects of lost jobs and decreasing government revenues from Section 936 industries leaving the island, the worldwide financial crisis in 2008 and the manner in which the Puerto Rico government has attempted to keep the island’s economy afloat, first by increasing public debt and later by approving more taxes, has plunged the island deeper into recession and pushed itself into the verge of default and bankruptcy.

For the past 10 years, whatever economic advances Puerto Rico may have previously made, were reversed or cancelled by negative or flat growth in its gross national product, insufficient revenues, increasing public debt, new and higher taxes and increasing unemployment rates.

In fact, based on government figures, Puerto Rico’s economic indicators are currently at the same level as they were in the early 1990s.

40% of elderly residents living in poverty In a 2014 survey conducted by AARP, formerly the American Association of Retired Persons, it was estimated that

40% of senior citizens in Puerto Rico were living below the poverty level, as defined by the Census Bureau. The report said this figure is almost four times higher than that of the elderly population in the U.S. The AARP survey also reported that some 537,000 senior citizens in Puerto Rico were out of the labor force and living on fixed incomes provided by Social Security benefits, retirement pensions and the U.S. Nutritional Assistance Program for low-income individuals and their families.

The situation with so many senior citizens living in poverty and on fixed incomes has prompted a significant number of people who are still working to postpone their retirement, while those who have retired are contemplating or even returning to the workforce, perhaps parttime or in different fields altogether.

“The majority of [senior citizens] expect to be working and in a variety of ways—at least seven in 10 say they expect to work at their current jobs as long as possible or as a consultant on an as-needed basis. Half of these respondents think they will be working part-

time at another company or organization or change careers, while others are thinking about starting a business or going back to school,” according to the AARP report.

Specifically, seven out of 10 (69%) Puerto Rican workers interviewed for the report indicated “it is likely they will put off complete retirement.”

Most of these respondents said they will likely be working in different ways, such as continuing to work at their current jobs (full or part time), becoming consultants or starting their own businesses. More than half of those currently working and age 40 or older—expected to retire between the ages of 68 and 80.

This situation, estimated to be a global trend in terms of a worldwide reduction of births, improved living conditions and life expectancy, is the main reason why the BLS gave a heads-up to American businesses on “the two major shifts in workforce demographics.”

As a result of the aging population and the continuing outmigration, employers in Puerto Rico have expressed their concerns regarding specific issues that could Continues on page 16

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Continues from page 15

have an impact on their businesses. Among those issues are: • the difficulty of finding employees with the right skills and qualifications; • the difficulty of recruiting key positions; • providing competitive benefits and/or compensation to workers; and • the impact of professional emigration on their respective industries.

Senior workforce

offers solutions While these concerns are real, for José Acarón, who is the director of AARP Puerto Rico, both the central government and private-sector employers are failing to see that the solution is right in front of them.

“They don’t see the experience in the senior workforce as an asset. They see the senior worker as someone on the verge of retirement, so they don’t provide those workers with the necessary training to make them more competitive in their respective fields,” Acarón said.

Because of Puerto Rico’s tough economy, what is happening is that senior workers are not leaving their jobs or retiring, he indicated. At the same time, they have not been trained to be competitive in such areas as managerial or executive functions, technical expertise and even computer technology.

According to the AARP Puerto Rico director, employers have to start changing their perspectives on senior workers and start seeing them as solutions to some of their

Thursday, MARCH 24, 2016

concerns.

“One of the alternatives that can be explored is ‘position-sharing,’ whereby two employees share the same position in a company. This is a surefire mechanism for transferring knowledge that would otherwise be lost when the senior employee leaves,” explained Acarón, who also assured that from a certain moment in life on, the senior worker will not necessarily be interested in working full time.

Acarón recalled a case in which a senior manager at a famous rum plant in Puerto Rico decided to retire at age 70 and had met with his younger successor to say hello and wish him good luck. A couple of months later, the young manager suffered a heart attack and died. As a result, the recently retired manager was hired once again because no one else could do the job as well.

Acarón believes the island’s labor laws must be changed to make them more flexible in terms of work schedules and conditions. Even though he foresees there could be strong opposition from different sectors, particularly labor unions, he is convinced changes to make labor laws more flexible would be beneficial for unionized workers as well as employers and their businesses.

“There’s a rich source of talent and experience withering away watching TV and playing dominoes while the country falls apart,” Acarón said.

Gerontologist Rivera had stated there is a need to distinguish between “the different kinds of senior citizens” mainly because of the wide age bracket used to define them.

“There’s a rich source of talent and experience withering away watching TV and playing dominoes while the country falls apart.”

—José Acarón, director of AARP Puerto Rico “Distinctions have to be made because a 60-yearold person is not the same as a 75-year-old or an 80-year-old. There are 60-year-olds who enjoy good health and an active lifestyle and do not see themselves as senior citizens,” she said.

Rivera’s proposed distinctions would include from healthy seniors who live independently, to those who are still independent but require some assistance with certain services, to others who are bedridden and in need of assistance 24-7. As the island’s population

continues to age, it is expected that the need for senior citizens’ services will also increase, in such areas as health, transportation, food preparation, caregivers, etc.

An analysis made by the Puerto Rico Planning Board revealed that the main problem affecting seniors is health. While 95% of seniors (people 60+) in Puerto Rico have medical insurance, a number of health-related problems stemming from limited insurance coverage have a negative impact on their quality of life, such as the lack of

integrated services and restrictions on services and medical procedures, among others.

Elderly needs

represent opportunities Acarón sees a silver lining here, provided the necessary changes in attitudes and perspectives are made.

“One of the changes that we need to make is our conviction that entrepreneurship is in the exclusive realm of the young. Seniors can also be entrepreneurs,” said Acarón, who characterized the job market as an extremely limited universe for those 45 and older.

“Those 60 and older are almost unemployable,” he added.

Acarón proposes that the needs of one be provided by the other.

“Think of it. If you are an independent retired senior and you need to supplement your income now that you live off a

pension or Social Security benefits, you could very well provide transportation, food services or any related service needed by seniors who suffer from vulnerabilities. This way you supplement your income and keep your independent lifestyle.

Employment, income, services…everything is covered,” argued Acarón, who also assured this could be developed as a community-based business model.

Some of these services are being offered, mainly by the government at both the state and municipal level, but in a very limited scope. For example, the Metropolitan Bus Authority offers its Llame y Viaje (Call and Get a Lift) program, which takes senior and handicapped residents to their medical appointments. Nevertheless, the program is limited to the San Juan metropolitan area and only for medical Continues on next page

17

Thursday, MARCH 24, 2016

Continued from previous page

appointments.

Other transportation needs, such as grocery shopping and entertainment, are not covered by the service.

There is also the Ama de Llaves (Housekeeping) program, in which mainly municipal governments assign housekeepers to help seniors and handicapped people with regular chores they have difficulties performing, such as cleaning and cooking.

In terms of food services, several years ago the concept of providing fully cooked meals— known as fiambreras (lunchboxes)—was common, mainly for families with both parents working, the concept has not been widely developed, if

at all, to include seniors with limited mobility.

Nowadays, there are but a handful of businesses offering this service and combining it with catering. Even fewer businesses offer meal delivery, such as meals on wheels.

Housing, a key

issue For Rivera, the next significant need that has to be managed for senior citizens is housing, particularly for those who are still working and are independent, but their incomes are not necessarily enough to pay their monthly rents or mortgages, and for those who are retired and independent and have seen their incomes reduced.

The gerontologist argued the best alternative is for a person to be able

to stay in his/her home during his/her elderly years because not only is this situation emotionally healthy, but also because the local community serves as a support network. Nevertheless, she admits there are circumstances that could limit this possibility, such as loss of income, widowhood, health conditions and lack of mobility, among other vulnerabilities.

The concept of égidas, a residential complex for the retired that could be oriented to specific professional groups (i.e. teachers, policemen, etc.) because part of their retirement funds were used to build the facility, is “the healthy solution” for these independent seniors, according to Rivera.

“There are 60-year-olds who enjoy good health and an active lifestyle and do not see themselves as senior citizens.”

—Mildred Rivera, gerontologist Most, if not all, of these égidas are subsidized by government-managed federal programs that have set a predetermined cost for each housing unit and, depending on the seniors’ incomes, the federal government pays for part of the rent or its totality.

Some égidas have been developed recently by a few municipal governments and social interest groups, such as the Methodist Church, whereby the eligibility of prospective residents is

determined by their incomes, among other requirements. But the most important requirement is for residents to be independent. Residents who need medical care need to relocate to a proper facility, most likely a nursing home, which in turn also represents a significant housing need for this population.

Tamara Pérez, former president of the Federation of Extended Care Centers of Puerto Rico, has said that despite “the enormous need” for nursing

homes on the island, the government is making it “more and more difficult for these to operate.

“The government has strict requirements for licensing nursing homes in Puerto Rico, and if any of our centers does not comply with one or more of those requirements, it could be closed down immediately. But when an illegal nursing home is detected operating without a license, that center is allowed 60 days to comply with all regulations. This isn’t fair for those that are complying but could fail in one or two items,” Pérez said.

Most of the extended care centers affiliated with the Federation serves middle class families that cannot care for their elderly loved ones. There are a few high-end nursing homes on the island, where the cost of caring for an elderly person exceeds $3,000 a month,

not including the cost of medicine or other special needs.

According to Acarón, as Baby Boomers—those born between 1946 and 1964—start reaching their retirement age, an increase in the number of working, independent seniors can be expected.

This is despite the fact that, according to the Labor Department, in 2014, 72,000 out of a total senior population of 812,000 was working. Within this working group, 69,000 were employed, with the balance actively seeking employment.

It should be noted, though, that the laborforce participation rate for those 60 to 64 years old was estimated at 18.8%. Within that age group, 24.3% were men.

This means that almost 25 out of every 100 men in Puerto Rico between Continues on page 18

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Thursday, MARCH 24, 2016

Continues from page 17

60 and 64 are working beyond the common age boundary for retirement.

Meanwhile, the laborforce participation rate for female senior citizens is higher, reported at 36.6% in 2014, corresponding with another trend of more women working than men in Puerto Rico.

Baby Boomers have also been labeled the “Sandwich Generation� because they have had the double responsibility of raising their children while caring for their elderly parents. Today, some adult children have also started living with

their older parents, due to economic difficulties.

These circumstances, along with the need for medical care, could be among the reasons why Baby Boomers are postponing their retirement, according to AcarĂłn.

If this trend continues, as a consequence of Puerto Rico’s paralyzed economy, by 2024—when the last of the Baby Boomers reach retirement age and as senior adults continue to work and lead independent, active lives— the need for services and facilities for seniors in Puerto Rico will become immediate and can no longer be postponed. This is only eight years away. n

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Thursday, MARCH 24, 2016

Column

By Dr. Pedro Rosselló

The Internationalization of Higher Education: Education for the Global Citizen

BY DR. PEDRO ROSSELLÓ

Editor’s note: This is the sixth in a series of seven columns derived from research undertaken as a requirement for a doctoral degree in Education from Universidad del Turabo.

The concept of what has been considered a “citizen”—or even a “nation”—has been evolving since the creation of nation-states, when “citizen” was mainly defined in terms of national identity. The education of that citizen centered on creating a good national individual. But considering the current challenges posed by globalization and the internationalization of higher education institutions, it is imperative to redefine a new kind of educated person. The current “Era of Knowledge” demands a new education for the global citizen.

This new requirement becomes a key component in the evolving internationalization process of today’s university. Author Lynn Davies (2006) suggested that global citizenship education should be focused on creating

international conscience through holistic and participative learning. Adding the “citizenship” aspect to the global education equation reflects a refocusing on a more active role involving global responsibilities and human rights that goes beyond creating conscience about particular issues or a single identity. Our group identities are based not on a single factor, but rather on a multiplicity of elements including family, regions, languages, professions, religions, cultures, ethnicity, race, gender, values, morals and politics, among others, that reflect the diversity of our shared humanity. In this regard, Nobel Prize laureate Amartya Sen (2006) argues that expressing our identity based on just one of these elements is a simplistic characterization. If we aspire to achieve peace and harmony in the world, we must possess a deep understanding of the plurality of human identities.

In a globalized world, education—especially higher education—needs to provide this understanding of human plurality.

As such, developing intercultural competencies

must become an integral part of any university’s institutional fabric, which includes not only internal policies and mission/vision statements, but also embedding these in research, teaching, learning and curricular [i.e. courses of study] activities. It could

and valuing diversity. The global citizen must have a deep understanding of the functioning of the multiple economic, political, social, cultural, technological and environmental sectors. Furthermore, the global citizen recognizes social injustice and reacts by participating in or contributing to the community on various levels, locally or globally. The global citizen is committed to act and assume responsibility in making the world a more sustainable place. Other experts have presented similar descriptions, while adding the need to develop the capacity, attitude and mindset to make important decisions in a complex environment of cultural pluralism. The global citizen should also

Developing intercultural competencies must become an integral part of any university’s institutional fabric. be said that internationalization efforts impact the university itself, while a global education is directed toward the student or individual.

This dynamic then poses the following question: What constitutes an educated person in the 21st century? Several scholars and researchers have presented their particular views in this regard. Oxfam (2006), for instance, describes the global citizen as one who is sensitive to the world around him/her and understands his/her role as a citizen of that world, respecting

have working knowledge of the interdependency of the world economy, exert leadership in groups, organizations and institutions different than his/her own, and behave appropriately under relevant cultural conditions (Leninger & Javidian, 2010; Zapalska et. al., 2013).

In essence, the most prominent characteristic of the new global citizen is respect for the rights and dignity of all human beings. And when it comes to commercial activity, the emphasis is on adding value to all parties involved, instead of trying to

exploit some for the benefit of others. Global citizenship is as much about knowledge and skills as it is about behaving properly under complex cosmopolitan scenarios, how to resolve conflicting priorities and how success is ultimately defined.

But the development of this new kind of education is not happening spontaneously. A study of 2,700 colleges and universities in the U.S. found that less than 40% refer to globalization or internationalization in their mission and vision statements.

Additionally, most of them do not employ fulltime staff or faculty to supervise or coordinate internationalization efforts (Greene, Luu & Burris, 2008). While most higher learning institutions agree on the need to have a firm institutional commitment to implement this new kind of education, there is in fact a lack of consensus regarding a specific formula or format to educate a global citizen.

However, some progress is being made in this area.

Several universities (University of Delaware; Haverford College; Chatham University; Lehigh University; Duke University; Tufts University; University of Glasgow) do have fully established global citizen education programs.

Others that do not have specific global education programs (University College of London; University of British Columbia; Fairleigh Dickinson University) have adopted global citizenship as part of their missions (Schultz & Jorgensen, 2009). Moreover, in 2002, under the auspices of the Association

of American Colleges & Universities and the U.S. Department of Education, 10 U.S. colleges and universities joined efforts to design a new global studies curriculum. The process required modifying their study programs, as well as their internships and study abroad programs, to emphasize civic and social responsibility principles, develop intercultural competencies and promote democracy (Sperandio, Grudzinski-Hall & Stewart-Gambino, 2010).

From these efforts, we can then learn and work to elaborate an emergent theory that redefines the university’s new role. We must begin to create universities that develop professionals with a universal and cosmopolitan vision, allowing them to see beyond the barriers of national borders. It is a new perspective that will define a new finality for our colleges and universities.

This entails rethinking our public policies regarding all levels of education, with the express purpose of preparing our students to become global citizens.

In our next and last column in this series, we will explore the agenda that should be set forth to make higher education truly international in scope. n

Dr. Pedro Rosselló is a two-term former governor of Puerto Rico (19922000). He was president of the New Progressive Party for 12 years. He holds a Master’s degree in Public Health, a Doctorate in Medicine, plus a Doctorate in Education, and is currently a lecturer and scholar at Universidad del Turabo.

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Thursday, MARCH 24, 2016

Poll

P.R. bucks U.S. trend

Cereal Purchases Increase in Past Five Months About 88% of Purchasers Live in Households With Two or More Members

BY ROSARIO FAJARDO r.fajardo@cb.pr

There has been a 4% increase in cereal purchases during the past five months among consumers in Puerto Rico, according to this week’s Gaither International survey.

More than half of the local population is eating cereal frequently, as 58% of people surveyed in recent weeks said they have bought cereal during the past month, compared with 54% in October 2015.

According to those who have purchased cereal during the past 30 days, among the top mentioned brands and types of cereal were Kellogg’s, Corn Flakes, Frosted Flakes, Malt-O-Meal and Corn Pops.

The majority of cereal purchasers live in households of two to three members (56%), while 32% live in households of four or more people. The rest live alone (12%), Gaither reported.

When asked if they have

children, 19% stated they have none; among the 81% who indicated they do have children, 16% have only one child, 49% have two or three children and 16% reported having four or more.

It is not clear why more local residents are pur-

Dederick, a client service associate at Gaither International. “It’s possibly a mixture of price and convenience, especially if they have children. [Cereal] is fast to serve and inexpensive.�

As for ad awareness in the cereal category, Gaith-

Cereal makers have focused on dropping artificial flavors and colors, and “played up the nostalgia angle.� —Time Magazine

chasing cereal these days. “A direct reason was not asked, but I would correlate it to the general increase of people eating at home instead of going out to eat, especially for breakfast,� said Melanie

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er said only 28% recall having seen an ad for cereal during the past three months and among those who did, the brands and types fo cereal they mostly remembered seeing advertised were: Kellogg’s,

Corn Flakes, Frosted Flakes, Malt-O-Meal and Cheerios.

However, when asked what cereal brand people are familiar with, the topfive brands and types of cereal mentioned were Kellogg’s, Corn Flakes, Frosted Flakes, Corn Pops and Froot Loops.

Among those who did purchase cereal during the past month, 41% said they consumed one to two bowls of cereal during the past week, 17% ate three to six bowls and 5% consumed seven or more bowls of cereal. Among respondents, 37% said they did not consume cereal during the past week; however, among those

who said they have not purchased cereal in the past month, 23% said they ate one to two bowls of cereal during the past week.

The results are from Gaither International’s Media Brand Profiles tracking survey, which interviews more than 80 people daily among a representative sample of Puerto Rico’s population 12 years and older.

Puerto Rico is bucking the trend in the U.S. mainland, where cereal sales have been dropping in recent years. Cereal sales in the U.S. totaled $8.75 billion in 2015, down from $9.6 billion in 2012, according to a March 2016 report in Time magazine.

In response, cereal makers have focused on dropping artificial flavors and colors, and “played up the nostalgia angle, periodically bringing back Boo Berry and other monster cereals that were part of many Gen X childhoods,� Time said. “They have [also] marketed cereal as the perfect option for dinner and late-night snacking, rather than have it limited to the breakfast hours.�

It remains to be seen whether these strategies will increase cereal sales.n

Polling is conducted by Gaither International and the results are reported exclusively by Caribbean Business.

Thursday, march 24, 2016

From the Web Check out our ‘Question of the Week’ at cb.pr.

Will the U.S. Supreme Court Favor Enforcing the Debt Recovery Act?

Results From Survey (3/10/16)

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Thursday, MARCH 24, 2016

Government

In proposed bills, income from individuals below $40,000, or $80,000 for married taxpayers, are exempted from filing income-tax returns

Value-Added Tax Killed in House Tax-Reform Proposals Most Deductions Eliminated, Except Mortgage Interest

BY JOSÉ L. CARMONA j.carmona@cb.pr

Last week P.R. Rep. Rafael “Tatito” Hernández, chairman of the House Tax Committee, filed three new bills, namely HB 2838, HB 2939 and HB 2940, with the purpose of completing a tax reform.

Some tax proposals are contained in all three bills, while others are exclusive to specific bills. Many currently taxexempted items, such as food and medicines, would pay taxes under the new proposals.

The value-added tax (VAT, or IVA by its Spanish acronym) is eliminated in all three, along with a long list of items and deductions. By the same token, the three bills also increase tax rates on certain items, such as capital gains and dividends.

Under the three bills, the sales & use tax (SUT, or IVU by its Spanish acronym) essentially becomes

an excise tax, although there are not many details about it, Kenneth Rivera, former Society of CPAs president and partner at local accounting firm FPV & Galíndez PSC, told Caribbean Business.

“The problem is that 95% of items coming into Puerto Rico are exempt, such as raw materials, machinery used by firms with tax decrees, medicines and food, while automobiles and gasoline are items that already pay an excise tax,” Rivera commented. “When you look at it, of the $40 billion in imports, only a tenth of that, or $4 billion, has historically paid taxes.”

In Rivera’s view, to balance the budget, you would need to raise $20 billion to $30 billion through the taxation of currently exempt items, but the bills don’t specify which.

“In theory, by the way the bills are written, this

means imposing taxes on food, medicines and raw materials used by manufacturing companies,” Rivera said.

Similar provisions in the bills Provisions occurring in all three bills include allowing certain regular corporations to elect to be taxed as pass-through entities; individual net income will be taxed in excess of $40,000 for individuals or married taxpayers electing the optional computation, or in excess of $80,000 for married taxpayers who do not elect the optional computation.

There are reduced income-tax rates for most individual taxpayers earning more than $40,000.

Tax rates for individual capital gains increase from 15% to 20%. The 10% tax rate on accumulated interest in eligible bank accounts is eliminated. The

Last week P.R. Rep. Rafael ‘Tatito’ Hernández, chairman of the House Tax Committee, filed three new bills, namely HB 2838, HB 2939 and HB 2940, with the purpose of completing a tax reform.

tax rate on dividends is increased from 15% to 20%.

Exclusions on income from literary, scientific, artistic, professional, agricultural awards, crop insurance, IVU-Loto awards and interest on residential-property mortgages in Puerto Rico are eliminated as well.

Limitations to personal deduction Young workers’ income of up to $40,000 is exempt from filing income taxes. The maximum deduction amount on mortgage interest is reduced from $35,000 to $25,000.

Limitations on mortgage interest are reduced from 30% to 25% on modified adjusted gross income.

“The only deduction that remains is mortgage interest, and the amount was lowered in all three bills,” Rivera commented.

Property losses from acts of God/nature are eliminated. The personal deduction is eliminated,

along with the dependents deduction. The Seniors Credit, however, is increased from $200 to $400 (which re-establishes the credit’s original amount).

The Educational and Health Individual Retirement Accounts, or IRAs, are also eliminated.

The three bills also include the creation of Eligible Consumer Payments, a form of credit to compensate for the tax’s regressivity. Those eligible for the credit include low- & medium-income workers, older adults (seniors) 65 years or older with low or medium income, and low- & medium-income people with disabilities.

The credit is 2% of the first $15,000 in wages, reduced by 1.5% for income in excess of $15,000, up to $20,000. There’s no credit for those earning more than $20,000.

Older adults (seniors) receive $300, plus there’s

an additional $50 credit for each dependent.

In all three bills, individuals with income solely from salaries below $40,000, or $80,000 for married taxpayers, are exempted from filing income-tax returns. An Informative Declaration, however, will be required.

Provisions for each bill In HB 2838, the SUT (IVU) changes its name to Consumption Tax. Its use and application are limited, as well as limiting credits to inventory purchases. In HB 2838, the SUT has a basic 6% rate. The surtax on consumption is 8%, the regular rate is 3% on prepared foods, and a business-tobusiness (B2B) tax of only 4%. The 1% municipal tax rate continues to apply.

In HB 2839, a 10% excise tax applies on all articles of use or consumption, Continues on page 25

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Thursday, MARCH 24, 2016

Government

“After all we’ve been through with the patente nacional [gross-receipts tax], the PICO [Integrated Merchants Portal excise-tax system at the ports] and many other things, let’s do this the right way, not in two and half months and with political pressures.”

—Kenneth Rivera, former Society of CPAs president and partner at local accounting firm FPV & Galíndez PSC Continues on page 25

otherwise those items not taxed (untaxed items).

This bill eliminates all excise-tax exemptions, as well as the SUT at the end of 2016, and provides for certain changes in terms and provisions.

HB 2840 increases the 4% excise tax (Act No. 154-2010) to 5.5%. This tax is imposed until calendar year 2017.

This tax is transformed into an effectively connected source rule for later years. HB 2840 maintains the SUT with a basic 6% rate, a surtax on consumption of 4.5% and a regular 4% tax on services.

Future of bills doubtful For Rivera, the evaluation and approval of any of these bills, in less than three months before the year’s last legislative session in June, is an uphill task. The government’s fiscal year begins July 1.

“I would have loved to evaluate all the proposals with more time. Nevertheless, I believe this has been a good exercise.

However, with so little time, I don’t think it can be done in a responsible way before mid-June,” Rivera said. “The uncertainty of having our tax system changed now, and then again next year,

really frustrates me.”

In Rivera’s view, is it better to leave things as they are and start from scratch.

“After all we’ve been through with the patente nacional [gross-receipts tax], the PICO [Integrated Merchants Portal excisetax system at the ports] and many other things, let’s do this the right way, not in two and half months and with political pressures,” Rivera said.

“Our tax system needs to be fixed entirely, so let’s do it right.”

Attempts to obtain Hernández’s comments were unsuccessful as of presstime Monday. n

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Thursday, MARCH 24, 2016

Municipalities

Three municipalities cross party lines to work together, save money

Aibonito, Barranquitas and Comerío Join in Consortium to Grant Permits, Promote Economic Development

BY EVA LLORÉNS VÉLEZ e.llorens@cb.pr

Despite being controlled by different political parties, the municipalities of Aibonito, Barranquitas and Comerío have made history after starting the operations of a consortium that would evaluate permits that they hope would lead to economic revitalization and growth.

Mayors Association President Rolando Ortiz Velázquez, who is a

promote the economic development of the municipalities in question.

As previously reported (CB April 9, 2015), the mayors signed an agreement to create the consortium, which opened to the public this week.

For decades, mayors have talked about the idea of joining as regions or in consortiums to share the increasing costs of delivering services to residents as they take over responsibilities that used to belong to the

make viable the development of our cities and small municipalities that despite their economic limitations, have created options to develop an area of the island,” Ortiz Velázquez said during an interview at the Mayors Federation, the organization that groups New Progressive Party (NPP) mayors.

Comerío is a PDP bastion while the municipalities of Barranquitas and Aibonito are NPP strongholds. The ABC

grant permits in a fast and cost-effective manner. The municipalities will be able to take over the role of administering their master zoning plans. He said that if each of the three towns were to take over the cost of having a permits office, they will each have to spend $200,000 yearly.

“This is a historic event. It is the first in its class and the fact that we do it in the Federation’s headquarters shows a lot…The 21st century will be the century of cities and we have to take over the leading role that history demands of us. At a time of fiscal crisis [in Puerto Rico], this has a lot of significance. We are taking over from the state the costs of operating the permitting offices. The permits office

“At a time of fiscal crisis [in Puerto Rico], this has a lot of significance. We are taking over from the state the costs of operating the permitting offices. The permits office will be paid by us.”

— Comerío Mayor José A. Santiago Mayors Association President Rolando Ortiz Velázquez

member of the Popular Democratic Party (PDP), said the creation of the ABC Consortium and the Mountain’s Permitting Office will allow permits to move faster and

central government.

“This shows the capacity that we have as Puerto Ricans when we look beyond our political parties…The Mountain’s Permitting Office will

Consortium is located in Barranquitas.

Comerío Mayor José A. Santiago described the accord as historic because the three small towns will be able to

will be paid by us,” Santiago said.

Currently, Comerío residents have to go to Humacao to get permits, while those of Aibonito and Barranquitas have

Comerío Mayor José A. Santiago

to go to Ponce. “[The residents of these towns] will now go to an office that is closer to them and has people they know,” he said.

Santiago said the three municipalities will look for other areas of responsibility whose costs they can also share. “If you look at the three towns, we have a lot of people coming to do chinchorreo [barhopping], so we can certainly work on a plan to develop our tourism,” he said.

The mayors said they have to act on their own because legislation to help municipalities join forces to share the costs of providing services has failed to move forward.

In 2014, a government committee that evaluated the regionalization of municipalities recommended starting the new structure through a two-year pilot project with three regions to determine which central government tasks could be transferred. The chosen regions would have

comprised contiguous towns.

The Decentralization & Autonomous Regions Committee made 31 recommendations to consolidate services to residents. One of the recommendations called for the creation of autonomous regions comprised of towns.

According to the report, the different regions depending upon their development and the needs of the population, would take over tasks that the central government was doing, not as another level of government, but rather as part of sustainable planning.

The report rejected the consolidation of more populous cities. Cities, however, can still cooperate to provide services in consortiums to offer certain services. It is estimated that consortiums can help cities save 20% to 40% in costs, a significant savings for many municipalities that are now struggling financially. n

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Thursday, MARCH 24, 2016

Legislature

La Fortaleza bill to help spur growth of nonprofit organizations

La Fortaleza Files Bill to Promote Creation, Contracting of Nonprofit Organizations

BY EVA LLORÉNS VÉLEZ e.llorens@cb.pr

La Fortaleza has sent the Legislature a measure containing the legal framework to support the formation of nonprofit organizations since the government will increasingly rely on them to assume community-service responsibilities because of the fiscal crisis.

Nonprofit organizations, or NPOs, which utilize a business model that experts say comprises a strong economic component with the capacity for growth, have a purpose that is other than making a profit.

For each dollar paid to an NPO to perform a job, the government can save $7 to $20, according to the legislation submitted.

NPOs are entities whose revenues are used to further the goals of the organization and not to enrich

its members. NPOs are dedicated to furthering a particular social cause or advocating for a particular point of view. In economic terms, a nonprofit organization uses its surplus revenues to further achieve its purpose or mission, rather than distributing the surplus income to the organization’s shareholders, or equivalents, as profit or dividends.

A 2015 study by the Estudios Técnicos economic firm shows NPOs serve one in five people in Puerto Rico and yield 150,000 jobs that represent 16% of the workforce. These entities also have 400,000 volunteers whose donated time is the equivalent of 23,000 full-time jobs and contribute 6% to the gross national product.

The Fortaleza bill, which came to light after the State Department began a series of meetings with

“the Organized Civil Society,” seeks to create an integrated structure to promote NPOs and determine agencies’ responsibilities when the government is working with them.

House Bill 2829, which has a similar version in the Senate, states that NPOs can be created as nonprofit corporations, cooperatives and trusts.

The law amends the 1991 Municipal Autonomous Law to allow NPOs to be created as special corporations to work with cities. They can also be created in collaboration with government agencies as occurs with Community Safety Councils.

An examination by Caribbean Business found the bill did not provide tax incentives or exemptions for these organizations but about 83% of them already enjoy local tax exemptions. These organizations, which

CPA Nilmary Flores discusses taxes and regulations at a recent Bankers Association Conference for nonprofits.

surpass the 6,000 mark, include churches, which also provide community service.

Helping and coordinating efforts among these entities is the proposed Organized Civil Society, which will be in charge of coordinating dialogues between agencies and NPOs, serve as a facilitator in making agreements and work together with the proposed Advisory Council on Issues Related to the Organized Civil Society, a strategic

five-year plan to establish goals and measure performance.

The office will also be in charge of drafting yearly plans and helping NPOs participate in establishing public policy.

The legislation amends the Municipal Autonomous Law to help develop NPOs that can assist communities in cities to channel their initiatives.

Regarding the proposed Advisory Council, the legislation says it will be composed of representatives

The legislation not only would allow agencies to contract NPOs to manage and provide certain community and social services but will also allow agencies to give NPOs grants or assistance to help them fulfill their duties to the agency.

from NPOs who will work for free, or ad honorem.

The legislation not only would allow agencies to contract NPOs to manage and provide certain community and social services but will also allow agencies to give NPOs grants or assistance to help them fulfill their duties to the agency.

According to the Estudios Técnicos study, the nonprofit landscape is highly varied, although many people associate NPOs with charitable organizations.

Although charities do comprise an often high-profile or visible aspect of the sector, there are many other types of nonprofits.

Overall, they tend to be either member-serving or community-serving.

Member-serving organizations include mutual societies, cooperatives, trade unions, credit unions, industry associations, sports clubs, retired service men’s & women’s clubs, and organizations that benefit a particular group of people. n

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Thursday, MARCH 24, 2016

Politics

CEE to cut number of polling stations, add some 700,000 people to official voter lists for 2016 elections

Fiscal Situation Could Change P.R.’s Electoral Process

BY ISMAEL TORRES i.torres@cb.pr

Remember when voters calmly left home the day of the general elections, walked to the nearest school and cast their vote? Well, apparently, that scenario won’t be seen again.

The government’s tight fiscal situation could have a strong impact on how the June 5 primary and November general elections will be held, particularly in terms of the number of available polling stations.

For the past general election, 1,533 electoral units were open with some 7,255 polling stations—but during those two events (primary and general elections), the number of units could be significantly lower, as well as the number of polling stations, because of a lack of funds to pay for them.

The situation is further complicated because, in addition to that possible reduction in units, you must add the fact that the State Elections Commission (CEE by its Spanish acronym)—responding to a decision by Federal District Court Judge Carmen Consuelo Vargas de Cerezo in San Juan—will have to add some 700,000 people to the official voter lists, who had been excluded from the election rolls because they didn’t vote in the 2008 and 2012 elections. Puerto Rico’s electoral law stated that

if a voter did not vote in an electoral event, he or she was automatically excluded from voter lists—and the federal court declared this was unconstitutional.

“Including those 700,000 voters on the voting lists for this election cycle poses a serious problem for the commission because it significantly alters the design of the electoral process in terms of the number of voters who would vote at the polling stations,” said Roberto Iván Aponte, electoral commissioner for the Puerto Rican Independence Party (PIP).

In addition, the CEE so far has received only $7.1 million out of the $10 million that had been approved for the general primary, which could force the commission to make major adjustments to that event—particularly a significant reduction in polling stations and voter education campaigns, among others.

The State Elections Commission pays private schools and universities so the government agency can use their facilities during primaries and general elections, but due to the lack of funds, the CEE may not be able to use many of the polling stations because there is no money to pay the rent.

Importance of voter education Both Aponte and former Popular Democratic Party (PDP) electoral

commissioner Eudaldo Báez Galib have warned about the problem posed by a lack of voter education when the government plans to use a new electronic voting system with a new ballot and an electronic vote count.

Aponte said that if we have to reduce the number of open stations during the June 5 primaries and the November general elections, electoral commissioners have already warned that the number of voters who will vote at each polling station will rise from 325 to 425—and this number could increase along with the problems it would represent for voters.

CEE President Liza García Vélez said she has the commitment of Luis Cruz Batista, director of the Office of Management & Budget, to identify funds to hold the elections, but so far the meetings to refine the money transfer have been postponed again and again. “We are confident the executive branch’s commitment to the promised funds will be honored,” García Vélez said.

CEE Vice President María “Lolín” Santiago said the money that came in for the general primary ran out and it is not known how the remaining primary process will be financed when contracts still need to be issued for ballot printing, voting booths, transporting services, and a number of materials and tasks

“We are confident the executive branch’s commitment to the promised funds will be honored.”

—CEE President Liza García Vélez that should have been assigned by now to hold the event.

In the June 5 primaries, Pedro Pierluisi and Ricardo Rosselló will compete to become the New Progressive Party’s (NPP) gubernatorial candidate, plus Jenniffer González and Carlos Ignacio Pesquera will vie for the party’s resident commissioner nomination. In addition, there are a large number of primaries on the legislative and municipal levels.

The PDP has no primary for a gubernatorial nomination since the party secured David Bernier’s candidacy, but will hold primaries for the resident commissioner nomination between former PDP president & former Rep. Héctor Ferrer and Sen. Ángel Rosa, plus dozens of other legislative and

municipal primaries.

Since the Puerto Rican Independence Party (PIP) has Sen. María de Lourdes Santiago as its candidate for governor, and the Working People’s Party (PPT by its Spanish initials) has Prof. Rafael Bernabe as its gubernatorial candidate, neither of these parties will hold primaries.

Gubernatorial hopefuls also include Alexandra Lúgaro and Manuel Cidre, both as independent candidates.

PIP candidates for atlarge legislative positions in the House and Senate— Denis Márquez Lebrón and Juan Dalmau Ramírez, respectively—have also raised concerns regarding campaign financing, particularly for small parties that have difficulties raising funds for their campaigns against the

so-called political investing of the larger political parties.

Pro-independence candidates have specifically warned about the effect of the Citizens United v.

Federal Election Commission case on Puerto Rico’s political campaigns, which opens the door to powerful economic interests’ political investments in election campaigns through the so-called super political action committees, or PACs. “The political investing and electoral colonialism exemplified in this case constitute an insult to any hope for a fair and democratic election process in Puerto Rico because it deprives citizens of the opportunity to have equal participation in the process of selecting their candidates,” they said in a joint statement. n

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Thursday, MARCH 24, 2016

Calls for Radical Changes to the Electoral Law to Break Bipartisanship in Puerto Rico

BY ISMAEL TORRES i.torres@cb.pr

The traditional bipartisanship that has dominated Puerto Rico for more than half a century seems to be weakening with the birth and consolidation of emerging parties and independent candidacies.

To begin to break this

a phenomenon shared by traditional political parties, “that gives a political identity to the party system.”

According to the Puerto Rican Independence Party (PIP) gubernatorial candidate, María de Lourdes Santiago, bipartisanship operates as a two-headed monster.

PIP María de Lourdes Santiago

system, according to University of Puerto Rico professor Carlos Pabón, the first thing that has to be done is to change the electoral law because as it stands, it perpetuates bipartisanship and blocks the way for new political parties and groups and independent candidacies.

“A movement in favor of a democratic electoral reform is needed,” said Pabón, a scholar of history and politics.

Another fundamental problem that affects the development of new political parties in Puerto Rico, he said, is the so called “status politics,”

”There is no fundamental difference in ideological terms between those two parties and that is why they both end up serving the same interests,” said Santiago, who is also a senator for the PIP. She was referring to Puerto Rico’s two dominant parties, the procommonwealth Popular Democratic Party and the pro-statehood New Progressive Party.

She said the similarities in proposals by the two main parties are seen in tax policy matters, economic development proposals and the issue of education, among others.

Passages

Politics

Bipartisanship feeds on an inadequate system of non-proportional legislative representation

Santiago said strengthening a third political force, such as the PIP, is the way to achieve different perspectives.

She pointed out that bipartisanship feeds on an inadequate system of non-proportional legislative representation, and to the extent that it guarantees absolute control to

votes have to go to that second round where they face the two parties that received the most votes during the first election,” Bernabe said.

He explained that in that second round, voters do not vote for their preferred party but for the “necessary” party. He said that the current electoral system conspires against new parties and independent candidacies, which also prevents breaking the bipartisanship that has prevailed in Puerto Rico for more than half a century.

WPP Rafael Bernabe

the majority, it prevents any political dealings with a third force.

For his part, professor Rafael Bernabe, a candidate for governor from the Working People’s Party (WPP), another emerging party, called for the radical transformation of the electoral law in a way that it facilitates the participation of new political parties in the political process in Puerto Rico, as well as independent candidacies and organizations.

“We have to achieve approving a [new] system of a second round, whereby parties that don’t obtain more than 50% of the

“It is all because parties are settled in and don’t permit and boycott the participation of new organizations,” he said.

Historically, the PDP has dominated Puerto Rican politics since its creation in 1938, a hegemony that was broken by the NPP in 1968 when it won the governorship seat and control of the House of Representatives, while the PDP retained control of the Senate. Both parties have alternated governing Puerto Rico since 1968, at times controlling both legislative bodies and the office of resident commissioner. n

Hernández Agosto Dies at 88 Former P.R. Senate President Had Long Career in Public Service

BY CB STAFF

Former Senate President Miguel Hernández Agosto passed away on March 18 at the Auxilio Mutuo Hospital in San Juan. He was 88 years old.

He had been hospitalized several times in recent months. Hernández Agosto, who also served as president of the Popular Democratic Party (PDP), had surgery in August after a blood clot was found in his brain following a fall at his home. In January, he fell again, which complicated his delicate condition.

His widow, María Casanova, said Hernández Agosto died at 4:15 a.m. on March 18 after having been hospitalized two days earlier for dehydration.

She said he died “after fighting like a warrior, like a champion, his entire life. We had been in and out of the hospital for years. He was a great human being, a great husband,” she told NotiUno radio.

Hernández Agosto began his public service in the 1960s as director of the Land Authority.

After the retirement of former Gov. Luis Muñoz Marín from his Senate seat in 1970, Hernández Agosto replaced him, serving in the Senate continuously until 1996. He presided over the Senate

from 1981 to 1992.

He also served as Agriculture secretary under Gov. Roberto Sánchez Vilella from 1965 to 1968.

“The country’s political class lost one of its greatest today. Strong in the political debate, noble in

his public service, Miguel Hernández Agosto exemplified the best of democracy in Puerto Rico.

Intelligent and brave, he wouldn’t give up. Loyal to Puerto Rico and committed to his party, he wouldn’t hesitate. Puerto Rico could trust him, and it did,” said Gov. Alejandro García Padilla.

“May his memory inspire Puerto Rico.” n

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Thursday, MARCH 24, 2016

Politics

Four NPP hopefuls already counting their chickens before they hatch

NPP Primary Candidates Already Fighting For Senate President Position Battle Lines For Control of P.R. Senate Are Forming Even Before Party Primaries Have Been Held

BY ISMAEL TORRES i.torres@cb.pr

As Puerto Rico’s June 5 general primary draws near, the internal battle between New Progressive Party (NPP) Sen. Thomas Rivera Schatz (at-large) and Yauco’s NPP Mayor Abel Nazario is intensifying along with NPP Sens.

Carmelo Ríos (Bayamón) and Margarita Nolasco (at-large), who all aspire to become Senate president. The winners of the NPP primary must then win their Senate seat in the general elections before competing for the Senate president position.

These NPP leaders are actively and aggressively campaigning in the island’s eight senatorial districts to procure support from other Senate hopefuls seeking district or at-large nominations.

There are eight at-large candidates in the primary, from which six will be chosen. As for the senatorial districts, there are primaries in all of them, and some will feature up to nine candidates—from which two will be chosen—as is the case in the Humacao district.

Former Senate President Thomas Rivera Schatz said he hopes to return to that legislative

body’s presidency with the support of new senators and others who are part of the NPP’s current Senate delegation—who are also seeking re-election in November’s general election.

Meanwhile, Yauco Mayor Nazario, who hopes to

Meanwhile, Nazario has made similar statements, pointing out that come November, you will see numerous new faces in the Senate, most of whom support his bid to become Senate president.

Yauco’s mayor announced he would make

deep reforms in the Senate, which include equal pay for all senators, even for its president. He will also seek to eliminate the Senate president’s fleet of cars and bodyguards.

“All senators will have the same salary and district senators will come to the Capitol the two days [of the week that] sessions are held. The rest of the time, they will stay in their districts, working there,” Nazario said.

He said that if he wins the primaries and fails to get at least nine Senate candidates elected in the June 5 primary, he will withdraw his bid for the presidency and support

Sen. Nolasco’s candidacy for that position. He said he is working in the senatorial districts alongside Nolasco—who also aspires to be Senate president—and both are committed to supporting each other based on who gets more candidates elected in the primaries.

“If she manages to get more candidates elected, I will support her in her aspiration to preside over the Senate and vice versa,” Nazario said. If elected Senate president, he added, his work plan will include promoting reforms of the legislative and the judiciary branches.

Nazario said Ricardo

NPP primary candidates for P.R. Senate presidency: Abel Nazario, Carmelo Ríos, Thomas Rivera Schatz and Margarita Nolasco

reach the Senate as an atlarge candidate, assures he will obtain a majority of the votes from the candidates who prevail in the primaries and later if they win the general election.

“We will wait for the caucus after the November elections to see who will prevail,” said Rivera Schatz, assuring he has support from most NPP senators who will be elected in November’s general election.

Yauco Mayor Abel Nazario announced he would make deep reforms in the Senate, which include equal pay for all senators, even for its president, as well as eliminate the Senate president’s fleet of cars and bodyguards.

Rosselló, who is running for governor against NPP President & Resident Commissioner Pedro Pierluisi in the NPP primaries, has on his agenda the reform of the executive, judicial and legislative branches. Nazario said candidates who support his bid to preside over the Senate are clear about his commitment to reform the island’s legal system.

He said that in addition to proposing a referendum to implement changes, the legislative reforms include eliminating legislators’ travel expenses, reducing the Senate’s budget by 30% and creating a system to deduct from senators’ salaries their absences from legislative sessions.

“We are working hard within the districts and are confident we will prevail,” Nazario said. He pointed out that he hopes to elect at least one candidate in each of the eight senatorial districts during the primaries. If the Yauco mayor obtains support from a greater number of candidates than Sen. Nolasco, the senator said she would support his bid for the Senate presidency and vice versa.

Nazario said that if Resident Commissioner Pedro Pierluisi wins the nomination for governor, and is later elected governor, he will support Sen. Larry Seilhamer (NPP-Ponce) as Senate president. Should Nazario become Senate president, he would have Seilhamer continue as spokesman for the NPP Senate delegation “because he has done excellent work,” he said. n

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Thursday, MARCH 24, 2016

Tourism

Many factors affect family-operated paradores

Paradores Association Head Calls for Tourism Labor Reform

BY EVA LLORÉNS VÉLEZ e.llorens@cb.pr

Increased operational costs and unfair competition from hotels are putting paradores at risk of extinction, according to the head of the Paradores Association, who urged the Legislature to help the small family-run inns by easing Puerto Rico’s tourism labor laws.

Created in 1973, the Tourism Co.’s Paradores Program includes 15 small inns, down from 30 in the 1980s. Unlike hotels, paradores are as small as seven to 75 rooms, and many are located outside the San Juan-metropolitan area.

Most are managed by families and help highlight the island’s history, gastronomy and cultural diversity.

Two years ago, there were 17 paradores, but two of them were sold by their families and were eliminated from the program.

In 2014, Paradores Association President Tomás Ramírez informed a Senate committee about the problems parador owners were facing to keep their businesses afloat. Now, two years later, many of the problems still persist, even though he acknowledged that the Tourism Co. has improved its promotion of the paradores, including the advertising it does in its official ¡Qué Pasa! magazine.

As a starting point, he said, most families that own paradores have put their entire life savings into their business. Many

paradores are “relics and natural treasures” but “they are on the verge of extinction because of high operational costs and promotional limits,” Ramírez said.

Initially, the Paradores Program was created to promote internal tourism for Puerto Ricans wanting to stay outside the San Juan-metropolitan area, thus spurring economic growth in remote parts of the island. However, the concept of internal tourism has changed and paradores are now competing for foreign tourists because of improvements in infrastructure and roads that

parador compared to two nights in a luxury hotel in the metro area.

Still, paradores have an occupancy rate of 38%, which is a much lower rate than for hotels,” he said.

Ramírez told Caribbean Business that several factors have had a negative impact on paradores’ operations, which have seen costs increase 7% to 9% through additional taxes levied by the government.

“We have experienced a hike in our water bills but our electric charges have gone down because of the lower oil prices, which has a balancing effect, he said.

He stressed the need for

“[Paradores] are on the verge of extinction because of high operational costs and promotional limits.”

—Paradores Association President Tomás Ramírez allow tourists to travel outside the metro area. Paradores have also become attractive to visitors pursuing ecological, adventure or cultural tourism.

Low rates, but low occupancy level Prices to stay in paradores, which provide about 500 rooms to the hotel industry and up to 1,000 direct jobs, are key to their popularity because, for $500, tourists can stay for a week at a

labor reform that would allow paradores to implement a four-day workweek without having to pay overtime. Ramírez said the government should allow workers to split their work schedules (dividing an eight-hour day into two shifts per day) so paradores will not have to increase their payroll. House Tourism Industry Committee Chairman Ángel Matos, representing Carolina for the Popular Democratic Party,

Paradores Association President Tomás Ramírez

supports labor reform for the tourism industry that allows for a four-day workweek but did not say anything about proposed flextime schedules.

From 2008 to 2013, the Tourism Co.’s promotional efforts were reduced.

Ramírez acknowledged that the government agency is promoting more areas of Puerto Rico, such as Porta del Sol (western region), Porta Cordillera (central mountain region) and Porta Caribe (southern region). “The ¡Qué Pasa! magazine is no longer focusing so much on highend hotels,” he said. The Asociación de Paradores, he said, is trying to increase promotional efforts through social media.

However, he noted the proliferation of boarding houses near paradores and competition from city-run hotels, which do not pay city taxes, are hurting the paradores.

The lack of signage on island roads to pinpoint tourism attractions in each town is also another factor that harms paradores.

New B2B tax another factor The hike in the businessto-business tax to 10.5%, slated to go into effect in June, is estimated to increase paradores’ costs by at least $250,000.

In a report to the P.R. Senate, the Tourism Co. said the resources for paradores not only entail “free promotions” but also incentives that include a 90% income-tax exemption on revenues from tourism activities that are not in Vieques or Culebra, since these two islandmunicipalities enjoy total income-tax exemption.

Many paradores also enjoy a 90% exemption on payment of city and business taxes, or patentes.

In a statement to the P.R. House of Representatives, Carlos Fernández, of Parador Vistamar in Quebradillas, said the Tourism Co. should give paradores the money the government agency invests in promoting the small inns so the owners can promote their own products, but also praised

the Paradores Program.

Parador Boquemar at Cabo Rojo’s Boquerón Beach has seen a decline in the number of people visiting the small inn due to competition from hotels that have had to reduce their hotel fees because of the economy, but also praised the program.

Rep. Matos, who conducted a probe into the conditions of the paradores, recently issued a series of recommendations to help the small inns, which also received support from the Paradores Association. These suggestions include the training of regional Tourism Co. offices to serve as liaisons between paradores and agencies; a promotional effort focused exclusively on highlighting attractions outside the San Juan-metro area; coordinating efforts to ensure all tourism accommodations are in good shape; improving signage on island roads to promote paradores; and better training of tourism employees. n

SPECIAL FEATURE

MARCH 24, 2016

PAGES 33-35

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San Juan Water Beach Club Helps New Businesses Add the Right Atmosphere

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white-pillow sofas and couches while sipping a cocktail and enjoying breathtaking view of Isla Verde beach? Then there is Zest, created by Chef Correa, with its unique culinary experience—an amazing subaquatic atmosphere featuring special visual effects that include dancing ripples on

BY MARIO BELAVAL DÍAZ the walls, a ceiling simulating oceanviews and capacity for 10 to the surface of the ocean, illumiAs a new business, maybe your more than 90 people, depending nated floors and a 60-foot-wide facilities are still a work in prog- on the space configuration. For cascade waterfall by the bar. ress, or you want to add a special example, among the venues at The restaurant features Modern touch and really make an im- the WBC is the Arena Boardroom, Puerto Rican & Latin American pression on your meetings with which seats 10 people around a cuisine. clients. Whatever the case may solid-onyx conference table and Other WBC venues for business be, the San Juan Water Beach features audiovisual resources activities and events include the Club (WBC) in Carolina’s Isla such as projector and flatscreen Olas Room, across from the Are• Former call center for an international banking Verde community provides the TV. The WBC also features an nas Boardroom, which is used for institution. Available power generator, cisterns, perfect atmosphere with oceanfront business center with corporate and social events. Its air-conditioning, executive offiexecuces, conference tive boardrooms, event rooms resources in- capacity depends on the type of rooms, training rooms, computer center,state-of-the-art lactation and terraces. all, the WBC bathrooms, cluding updated Wi-Fi capacity activity or event. For example, in room, cafeteria,After gymnasium, multiple sprinkler system, and modular fixtures. redefined the boutique-hotel ex- for even faster hi-speed internet a conference-room configuration perience; imagine what it can do service. where people are seated at a long • 32,000 sf dividable on one level for approx. as a space and ambiance faciliAnother added value that WBC table, the Olas Room has capac300 work stations. tator for the needs of your new can offer new companies is its ity for 30 people. For a banquet business.

• Parking 200 plus vehicles, LED lightingdining venues that transform the with tables, it seats 50, and for a “From a boardroom to a con- concept of a business lunch, or a reception-style activity, it has a ference meeting, WBC adds breakfast or dinner for that mat- capacity for 60 people. The WBC • Guaynabo / Bayamón (Carr.

174)our next door to Coca Cola. exceptional style and impeccable ter. Take, for instance, the Mist also has Horizonte and Bambú service,” said Betsy Mujica, di- Roof top Bar + Kitchen, which terraces. The Horizonte Terrace, rector of sales & marketing for offers comfortable seating areas which is covered, is used for acRealtors Invited 787-607-4779 Beta Properties Lic.10778 ricardo@betaprop.com the WBC. for rooftop relaxation, and an tivities such as breakfasts, snacks Located at an exclusive spot open-space oceanview restau- or cocktails, and has a capacity 3 x 3cols in front of Isla Verde beach, the rant that offers a casual menu for for 20 to 30 people depending on WBC features a series of venues lunch and dinner created by ce- the configuration. Bambú Terthat range from boardrooms and lebrity Chef Raúl Correa. Where race, which is popular for wedactivities to event rooms and else would a business meeting ding ceremonies and cocktails, terraces, all with spectacular take place or end, with beautiful allows for 30 to 50 people. n

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3 x 3cols

Thursday, march 24, 2016

Thursday, march 24, 2016

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MassMutual Helps New Companies Start Off on the Right Foot

BY B.G. DOYLE

Providing a wide range of personalized insurance and investment-planning services to individuals and businesses for the past 20 years, MassMutual Financial Group’s Puerto Rico agency has more than 100 career agents ready to meet any financial advisory or insurance-related need.

“When I started at this firm, one of my managers told me, ‘People don’t care how much you know until they know how much you care,’” said Luis A. Pérez, financial adviser & senior manager associate with MassMutual Financial Group. “I took that advice to my practice by helping clients with their personal and business goals in the short and long terms, as well as helping them set priorities with periodic reviews, and providing recommendations that best suit their financial situation and needs.”

For newly established companies, these services are especially crucial, given that many new

entrepreneurs may be experts in their given fields, but not too savvy when it comes to making the most of their earnings or planning for future growth.

“What many new businessowners don’t realize is that managing a business takes more than hard work—they need a financial plan that addresses the financial needs and products at every stage of the business,” Pérez said. “Taking into account the emotional part of their personal financial goals and dreams, we have specially-designed services to help them in a number of ways.”

They include services to help new companies manage their taxes, with Pérez and his team working hand-in-hand with their tax advisers to help these businessowners implement strategies that can help them reduce their taxable income.

MassMutual specialists are also on hand to work with the business’ retirement planning and employee benefits.

“Although it’s a new company,

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S P E C I A L

F E A T U R E

“What many new businessowners don’t realize is that managing a business takes more than hard work—they need a financial plan that addresses the financial needs and products at every stage of the business.”

—Luis A. Pérez, financial adviser & senior manager associate with MassMutual Financial Group owners have to think years ahead and consider how they would transfer their business when it’s time, and also provide protection for an unexpected death or disability of the owner, or one of the owners, if there is more than one,” he added.

He also pointed out that the services his firm offers to both new and longstanding companies are more important than ever.

“Given the current economic environment, both companies and individuals are seeking more security, which is the base and main service of insurance companies,” he said.

He added that he would like to see insurance companies, especially those focused on financial services, working together to have a better understanding of the various state and federal rules and regulations, and how they affect the different products, as well as those U.S. citizens who were born on the island, versus those born elsewhere.

“Because we’re fully committed to the people who depend on our advice and understanding of the financial industry, we make continuous learning a top priority to stay abreast of the everchanging regulations.”

Looking ahead, and given the recent mass migration of Puerto Ricans to the U.S. mainland, Pérez noted that one of his and his firm’s goals is to continue expanding offshore, working with those families and businesses that have left the island. “Over the next five years, I see my company as the No. 1 provider of financial services to Puerto Rican families, no matter where they are,” he said. n

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Thursday, MARCH 24, 2016

Technology

Sony steps fully into virtual reality, but it won’t be cheap

Sports

PR Open keeps to its underdog status to great effect

Playstation VR Slated for October Launch

Puerto Rico Open to Hold Ninth Edition at Renamed Coco Beach

Sony Device to Compete with Oculus Rift, HTC Vive in High-End Virtual Reality

PGA TOUR Event Continues Tradition as Stage for First-Time Winners

BY DENNIS COSTA

BY DENNIS COSTA

d.costa@cb.pr

Sony revealed key details about its upcoming Playstation VR virtualreality head display March 16 at the 2016 Game Developers Conference in San Francisco, including its release date—sometime next October—and a $399 price tag.

of which have yet to be released and are geared more towards PC gaming instead of console gaming.

Shortly after the announcement, some observers expressed reservations about the price, especially since the Playstation VR requires other separately sold accessories such as the PS Cam-

VR Worlds, a five-game compendium disc featuring The London Heist, a title that has garnered lots of accolades in product demonstrations.

The Playstation VR headset boasts a 5.7-inch OLED display with a resolution of 1080p, which refers to the TV’s resolution.

The device also comes with a processor box that

The divice is one of the most eagerly awaited offerings in the burgeoning virtual reality segment.

Playstation VR

The device, which will operate as an accessory to the Playstation (PS) 4 gaming and entertainment console, is one of the most eagerly awaited offerings in the burgeoning virtual reality segment, which allows users full immersion in 360-degree environments.

In this segment, the Playstation VR is set to compete head-on with the HTV Vive that is being co-developed with Valve and the Oculus Rift, both

era, a $60 motion sensor that mounts to the TV screen, and PS Move, a motion-sensing game controller that costs $50.

The PS4 console itself, meanwhile, costs $400.

However, Sony revealed a couple of days later that the Playstation VR would also launch as part of a $500 bundle, with a preorder window that opened March 22. The bundle includes the PS Camera, a pair of PS Move controllers and Playstation

helps output the headset display image to a TV and takes care of providing 3D audio. The headset also has LED markers that the PS Camera detects to track head movement.

Game development studios are reportedly at work producing some 50 games for the Playstation VR for release before the end of the year, including virtual reality versions of popular franchises such as Gran Turismo, Eve Online and Star Wars: Battlefront. n

d.costa@cb.pr

The Puerto Rico Open will hold its ninth annual edition at the Championship Course of Coco Beach—formerly Trump International Golf Club before it filed for bankruptcy last July—in Río Grande on March 24-27.

In keeping with previous editions, the Caribbean’s only tournament certified by the Professional Golfers’ Association (PGA) promises to deliver thrills in spite, or perhaps because of, its comparatively low profile.

Because the tournament is frequently held simultaneously with more headline-grabbing tournaments in the U.S. mainland—in this year’s case, with the WGC-Dell Match Play in Austin, Texas—the Puerto Rico Open generally attracts a more under-the-radar field of players.

However, this has also turned the P.R. Open into the perfect breeding ground for first-time winners and breakout stars, such as Chesson Hadley, who won in 2014 with a two-shot victory and a 72hole record, and two-time P.R. Open winner Michael Bradley. The tournament has also gained fame for its exciting finishes, with all but two editions being

decided by one stroke or fewer.

Last year’s P.R. Open winner, 44-year-old pro Alex Cejka, became the third-oldest PGA TOUR first-time winner since 1970, and this year he

Last year’s P.R. Open winner, Alex Cejka

hopes to become the tournament’s first two-time winner since Bradley.

Several former major winners will also compete in the tournament, chief among them two-time U.S. Open winner Retief Goosen, from South Africa; 13-time PGA TOUR event winner David Toms; two-time major champion Ángel Cabrera, and golf’s famous bad boy John Daly, who will play his last golf tournament before joining the Champions Tour.

Other noteworthy competitors will include former world No. 1-ranked pro golfer Luke Donald; George McNeill, who

starred in one of the P.R. Open’s most thrilling finishes in 2012; and Tony Finau, a well-known participant in The Golf Channel’s reality TV show, The Big Break.

The island will also have its representation in the tournament with four Puerto Rican pros competing, led by Rafael Campos, whose tie for 29th in 2014 was the best yet by a Puerto Rican golfer.

Edward Figueroa, Max Alverio and Miguel Suarez, who heads Puerto Rico’s national junior program, will join Campos.

Coco Beach boasts a 7,506-yard, par 72 golf course designed

by Tom Kite and built into the hills of the El Yunque rainforest. Originally comprised of four nine-hole courses, it was reconfigured as two 18-hole layouts in 2007, just in time for the PGA TOUR to add Puerto Rico to its schedule as a hybrid Championship course.

Similar to previous occasions, the P.R. Open will boast a total purse of $3 million, with the winner earning $540,000 in prize money and 300 points toward the FedEx Cup, a year-long competition that culminates in a multimillion-dollar grand prize. The Golf Channel will broadcast highlights of each round through the tournament’s four days. n

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Thursday, MARCH 24, 2016

Autos

Local Mercedes-Benz dealer aims to sell 300 GLCs this year

Garage Isla Verde has High Expectations for All-New GLC Midsize SUV is Dealer’s Second Best-Selling Vehicle

BY JOSÉ L. CARMONA j.carmona@cb.pr

Since its official U.S. sales launch in December 2015, the all-new 2016 Mercedes-Benz GLC midsize sport utility vehicle (SUV) has beat expectations, with local dealer Garage Isla Verde LLC selling every unit on the lot.

Francisco Pérez, general manager of the only authorized Mercedes-Benz dealer on the island, said 18 units arrived in January and another 18 in February, and all were sold within days. The GLC has a starting selling price in Puerto Rico of $54,900.

With 36 total units sold as of February, the new GLC has become the dealer’s second-best-selling vehicle, after the C300 sedan. Last month, Garage Isla Verde sold a total of 128 new units, up 24.3% from the same month last year.

“We are aiming to sell 300 units of the all-new GLC this year, which replaced the GLK in the Mercedes-Benz lineup.

More than a name change, the GLC is an entirely different, larger, wider and more capable vehicle than the GLK,” Pérez told Caribbean Business.

Roomier, lighter Besides its sleeker design and more dynamic presence, the GLC is 4.6 inches longer and two inches wider than the GLK it replaced.

Its elegant profile follows the new design line also seen in the smaller GLA and the bigger GLE SUVs. “Thanks to the increase in wheelbase and length, the GLC is more spacious, especially for rear passengers. Rear-seat legroom is increased by 2.2 inches over the GLK,” Pérez said. “Thanks to intelligent packaging and

seat geometry, the GLC provides 2.2 inches of additional shoulder and elbow space.”

Entry and exit space for rear passengers has also been enhanced, Pérez added. The rear cargo area is also larger and features a level load area. The rear seat splits 40/20/40 and capacity behind the rear seats increases by 2.8 cubic feet to 3.9 cubic feet, for a total of up to 20.5 cubic feet.

In all, the GLC is able to transport up to 56.5 cubic feet of cargo—1.8 cubic feet more than the GLK. Thanks to the intelligent mix of aluminum and high- to ultra-high

strength steel components, the GLC is 176 pounds lighter than the GLK. Modern interior The new Mercedes-Benz SUV design is carried into the GLC’s cabin. Its modern look and high quality finishes and materials are reminiscent of the fullsize GLE SUV.

The GLC’s dashboard and center console showcase flowing lines, and a large, one-piece panel elegantly sweeps from the center air vents to the armrest.

Comprehensive standard infotainment capability on the GLC is courtesy of its large, 7-inch

color media display and Audio 20 USB sound system with Frontbass.

The new touchpad in the hand rests over the rotary pushbutton and sits ergonomically in the center console. The touchpad provides for simple and intuitive operations of all the head-unit functions using finger gestures.

The touchpad also allows letters, numbers and special characters to be entered by handwriting.

New engine and transmission The GLC is powered by a new turbocharged 2.0-liter four-cylinder engine producing 241 horsepower and 273 pound-feet of torque. The 9G-Tronic nine-speed automatic transmission yields improved efficiency as a result of its reduced weight and lower friction.

Combined, the engine and transmission provide for V6 level performance but with better fuel economy.

With a new chassis and suspension, the GLC surpasses its predecessor’s ride and handling characteristics. It features the Agility Control suspension with steel springs and variable damping as standard.

The new GLC also includes the Dynamic Select

Francisco Pérez, general manager of local Mercedes-Benz dealer Garage Isla Verde LLC

handling control system with five standard driving programs—Eco, Comfort, Sport, Sport Plus and Individual. The settings are shown on the central media display.

The rear-wheel drive GLC is also available with the 4Matic all-wheel drive system for greater offroad capability.

Intelligent Drive Nearly all the driver assistance systems from the C-, E-, and S-Class are available in the new GLC. As part of the Intelligent Drive concept, these systems combine data from various sensor technologies to enhance comfort and safety. Collision Prevention Assist Plus, Crosswind Assist and Attention Assist are all standard.

The Driver Assistance

Package can provide an even more comprehensive scope of active safety features. These include Distronic Plus with Steering Assist, Pre-Safe Brake with pedestrian detection, BAS [Brake Assist System] Plus with Cross Traffic Assist, Active Blind Spot Assist, Active Lane Keeping Assist and Pre-Safe Plus.

The latter offers added protection in the event of a rear-end collision.

More new models to come New models from Mercedes-Benz that are expected to arrive at Garage Isla Verde this year include the C-Class Coupe, in late March; the redesigned Eclass, in June; and the SClass Cabrio and C-Class Cabrio, slated to arrive in June and September, respectively. n

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march 31

WOMEN TO WATCH 2016 Caribbean Business salutes the drive and resolve of innate go-getters by reviewing the trajectories of remarkable businesswomen who are leaving their mark on all of the island’s business segments. This special feature will let you learn more about the women who are making a contribution to Puerto Rico’s economic development.

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april 7

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CLOSING DATE: APRIL 1

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Thursday, march 24, 2016

Marketing

It is time to move forward, Puerto Rico!

#Yonomequito Celebrates First Month Social-Media Initiative Calling for P.R. to Empower Itself Has Reached More Than 4 Million People in 25+ Countries

BY MARIO BELAVAL DÍAZ

keep moving forward and therefore keep Puerto Rico moving.”

López-Lay made these comments at press conference last week at the Puerto Rico Museum of Art in San Juan’s Santurce district, where press, museum members and friends of the #yonomequito movement gathered to hear about

organically appeared 16 million times in newsfeeds, becoming what is known as a trending topic.

Imagine a Puerto Rico marketVideos posted on the movement’s ing campaign that has reached website, which features the stories more than four million people in of everyday individuals and how just over a month in more than they are persevering through their 25 countries through digital platjob, studies or community work, forms. One would think it would have been watched by more than take a great prod1 million people, uct with a wellhad over 40,000 thought-out stratshares and more egy to achieve such than 200,000 numbers.

Howlikes. López-Lay ever, in the case of explained that to the #yonomequito achieve this level social-media iniof impact in social tiative, it is much mediums would more than that. have represented It is a call for an investment of Puerto Rico to about $320,000.

—Carlos López-Lay, creator of #yomequito empower itself in Regarding traditough times and to tional media, Lómove forward with pez-Lay said the the island’s best support provided resources, the people themby companies in the indusselves, said Carlos López-Lay, try, between coverage and ad who came up with the nonplacements, represents nearly profit movement a month $250,000. ago. The message, he added, As part of the activity and has struck a chord with peoto mark the first month of ple, spurring the effort’s nat#yonomequito, the song “Yo ural organic growth. no me quito” was premiered.

The hashtag symbol, or #, Composed by maestro Cucco plus yonomequito, derives Peña and Tato Rossy, the song from the popular refrain “Yo brings together famous voices no me quito,” which roughly from across the local musical translates as “I won’t quit” spectrum, including Dagmar, or “I am sticking with it.” The Víctor Manuel, Gilberto Santa the initiative’s achievements and organic growth of #yonomequiRosa, Glenn Monroig, Lennox, plans for the future. to throughout Puerto Rico and Richie Ray and Bobby Cruz. The At the museum presentation in beyond makes López-Lay, who activity also showcased two telethe Raúl Juliá theater, López-Lay is also a renowned local auto invision ads for #yonomequito, said not only had they reached 4 dustry businessman, immedideveloped by local advertising million people in more than 25 ately point out that this is not a agency Ground. The ads are based countries, of which Mexico tops campaign. on the audio of two radio spots in the list, followed by the U.S., but “It is a movement,” López-Lay which announcers enumerated more than 700,000 people had stressed. “Campaigns tell you how the various reasons for “stickinteracted with the movement things are or how to do something, ing with it,” ranging from Puerto through Facebook, which reprewhile #yonomequito is like the Rico’s natural beauties to famsents 6% more than the average phrase we all have to complete, ily and friends, and professional for the social platform. with what we are going to do to goals and aspirations. n In addition, #yonomequito m.belaval@cb.pr

“It is a call for Puerto Rico to empower itself in tough times and to move forward with the island’s best resources, the people themselves.”