TCR Volume 2 Issue No 29 by The CenSEI Report

Strategic Analysis and Research by the

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Whatever may be the hardships today — and there are many more not mentioned — we should help him because he’s the skipper. The weather is still a bit rough, and we have far to travel ~ Former President Fidel Ramos on President Benigno Aquino III's third State of the Nation Address

Volume 2 - Number 29 • July 23-29, 2012

I appreciated his pronouncements on the economy, education, health, security, and employment ~ Former President Joseph Estrada on the SONA

CENTER FOR STRATEGY, ENTERPRISE & INTELLIGENCE

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Report

BUSINESS

3 Philippines on the Rise

Major investment houses are touting the country to become one of the world’s top economies in the coming decades. A major asset in their calculations: the young Philippine population • Goldman Sachs’s growth environment score: Measuring the nation’s macroeconomic, technological, demographic, and political indicators

NATION

13 How to Get the Vote Count Right

To make sure the PCOS automated election system truly reflects the people's will, the Comelec must fully and properly implement the Random Manual Audit • Checking on the counter: The report by the Technical Working Group on the Random Manual Audit discusses the different types of variance it encountered

WORLD

23 The Quest for Gold

The London Olympics start on July 27, and the major sporting powers of the world are expected to dominate. Here’s how the winners are made • Southeast Asia’s prospects: While big countries join most, if not all major events, Southeast Asian countries pick their spots for the best chances of success

TECHNOLOGY

29 Painting the Town Green

Cities should be a big part of solutions to climate change, if only because most of humankind will be living in them by 2050 • Metropolitan emissions: The powerful impact of cities on global warming

HEALTH/LIFESTYLE

35 Heroes of the Masses

Dolphy, FPJ and Erap did more than just make Filipinos laugh, cry and cheer. They shaped the way the masses see and live their lives

CONTENTS

BUSINESS

NATION WORLD TECHNOLOGY

POINT & CLICK You can access online research via the Internet by clicking phrases in blue

HEALTH/LIFESTYLE

Center for Strategy, Enterprise & Intelligence provides expertise in strategy and management, enterprise development, intelligence, Internet and media. For subscriptions, research, and advisory services, please e-mail report@censeisolutions.com or call/fax +63-2-5311182. Links to online material on public websites are current as of the week prior to the publication date, but might be removed without warning. Publishers of linked content should e-mail us or contact us by fax if they do not wish their websites to be linked to our material in the future.

Some Questions for Our Valued and Esteemed Readers Having published for a year now with trial issues in the second half of 2011 and weekly publication since January, The CenSEI Report surveyed readers recently on what you thought about our year-old strategic analysis and research journal. The results were positive on the whole, providing not just timely and accurate information and insight, but also the authoritative, definitive take on pretty much every topic taken up. In sum, when the Report tackles an issue, it’s hard to find another article giving more information both on the page and through the online links. But there was one frequent caveat, not unexpected given the thorough and comprehensive breadth and depth we aim to give every story in the Report: they’re long. Most readers found articles a bit too hefty to digest in one sitting, especially for today’s time-challenged thinkers and decision-makers. Some also thought the Report could be punchier and more opinionated in parts, which could be partly due to the lengthy exposition of strategy points. Hence, in our quest to keep improving The CenSEI Report and serving our subscribers better, we seem to have two choices in adjusting to your hectic days and limited reading time: cut the stories down to less formidable size, or give readers more time to read every issue. Do we keep articles to 3-6 pages instead of the usual 8 or more? Or do we double the time to read the Report by coming out one every two weeks? Or perhaps both: shorten the stories and lengthen the time between issues? For those who may have the time after reading this issue, it would most helpful for readers to send a brief note on your own replies to the above questions. Tell us your own preference between shorter stories or less frequent issues, or both. And if you like fewer pages per article, how many would be optimal? Please email us at report@censeisolutions.com, and we will add two issues to your subscription as a token of thanks for taking the time to give us your thoughts. Even as we ponder the length and frequency of The CenSEI Report, one thing we will not change is the strategic perspective, authoritative information, and online resources we deliver in every article every issue. If we go shorter, we will pack in more in each page. If we become every fortnight like, say, Fortune magazine, we will ensure that our pieces become even more insightful with the added research, writing and editing time. In sum, we will make sure The CenSEI Report serves you better than ever.

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The Rise of the Philippines

The country is touted to be among the world’s topperforming economies within the next three decades. Is prosperity really around the corner? By Joanne Angela B. Marzan

STRATEGY POINTS Various economic indicators of late — strong economic growth, renewed interest in the stock market, and a stronger peso — have given the country reason for optimism Even prior to the latest indicators, the country has been projected by more than one credible source to become among the world’s top economies in the next two or three decades, mainly on the potential of its young population Much work remains before the country can deliver on the promise of sustained and sustainable economic growth

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The rise of the Philippines

he Philippines has many reasons to smile these days.

In a July 20 press release, the International Monetary Fund (IMF) said that the country’s 2012 first-quarter economic growth of 6.4% is “among the best performing in Asia.”

The S&P upgrade followed an upgrade by Moody’s in May, from stable to positive, the sixth upgrade during President Benigno Aquino III’s term, as reported in The Philippine Star.

On July 6, the Philippine Daily Inquirer reported that the peso hit a four-year high of 41.68 against the U.S. dollar. The aforementioned Bloomberg ‘The economy article said that based on its rebounded own monitoring, the peso is strongly in the the “best performer in a first quarter basket of 11 major Asian currencies” in 2012. In addition, of 2012 to 6.4 percent (year-on- the Philippine Stock Exchange also reached a new all-time record year)-among the when it breached past 5,300 on best performing July 2, as reported by an article on www.interaksyon.com. in Asia.’

“After its subdued growth in 2011, the economy rebounded strongly in the first quarter of 2012 to 6.4 percent (year-on-year)— among the best performing in Asia—partly reflecting a spike in net exports and fixed investment. Growth is expected to stabilize around 4.8 percent and 4.9 percent in 2012 and - International 2013, respectively, in line But, are we finally about to Monetary Fund with soft global economic achieve sustained economic conditions reflected in the growth? After all, this is not the IMF’s World Economic Outlook forecast,” first time we are hearing about the Philippines said the press release after IMF ‘s four-day becoming the next tiger economy in Asia; after staff mission to the Philippines from being repeated so many times, it might sound July 16-19, 2012. like a broken record. The IMF staff mission added that the “economy has sustained its solid momentum, and has the policy space to support growth if tail risks from the global economy materialize.

If indeed our time is finally coming, what does the country need to do in order to stay on the path to economic growth and development?

Macroeconomic conditions remain generally sound and the authorities’ policy management is supporting confidence.”

Philippine potential according to Goldman Sachs. If you ask Goldman Sachs, the Philippines is definitely on its way to becoming one of the largest economies in the world.

Meanwhile, a July 5 Bloomberg article said that Standard & Poor’s upgraded the country’s credit rating from BB to BB+, the highest since 2003. “The rating action also reflects the country’s strengthening external position, with remittances and an expanding service export sector continuing to drive current- account surpluses,” Singapore-based analyst at Standard &Poor’s Agost Benard said in the article.

The

According to the 2005 Goldman Sachs’ Global Economics Paper: 134 by Jim O’Neill, Dominic Wilson, Roopa Purushothaman and Anna Stupnytska, the Philippines is one of the Next -11 (N-11) countries, which have the greatest potential to become among the world’s largest economies in the 21st century.

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5 Acknowledging that the potential to emerge is still “an open question for many” of the N-11 countries, the authors picked Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey, and Vietnam as having “BRICs-like potential,” referring to the bloc of Brazil, Russia, India, and China also tipped by Goldman Sachs a decade ago.

a successful growth story is unlikely to have a global impact. Hong Kong will never be a global power nor Luxembourg, despite the very high levels of income and living standards that they have achieved,” the authors explained.

“In thinking about other countries that might have BRICs- like potential, we focused on demographic profiles, which drive much of the analysis. Without a substantial population, even

Caution two years later. However, the 2007 Global Economics Paper: 153 by Goldman Sachs warned that these projections should not be taken in hook, line and sinker. “As we have

Goldman Sachs projects the Philippines to be the world’s 19th largest economy in 2025 and the 18th in 2050.

Computing the Growth Environment Score The Growth Environment Score (GES) was developed and used by Goldman Sachs to determine the Next-11 (N-11) countries with the greatest potential of becoming the world’s largest economies in 2050. Goldman Sachs divides the 13 GES variables into five different clusters, enumerated and discussed briefly in Appendix 2 of the Global Economics Paper: 134 (p.14), summarized as follows: Macroeconomic Stability 1. Inflation: High inflation discourages investment and erodes growth performance. Based on Goldman Sachs data, the Philippines has the fourth-highest inflation among BRICs and N-11 countries. 2. Government deficit (as % of Gross Domestic Product): High budget deficits can hurt economic stability and push up borrowing costs. Among BRICs and N-11 countries, the Philippines has one of the lowest government deficitGDP ratios. 3. External debt (as % of GDP): Large foreign borrowing raises the risk of external crises and tends to push up real interest rates. The Philippines also has one of the lowest external debt-GDP ratios among BRICs and N-11 countries. Macroeconomic Conditions 4. Investment rates: High investment rates encourage capital accumulation and growth, but investment should be productive. On this front, the Philippines has one of the

lowest investment rates among BRIC and N-11 countries, beating only Egypt, Brazil, Turkey and Pakistan. 5. Openness of the economy: Proxied by the share of trade as a proportion of GDP (adjusted for population and geographical area). According to studies, more open economies showed greater tendency for convergence. The Philippines ranked third-highest in this category. Technological Capabilities 6. Penetration of phones: Proxied by mainlines per 1,000 people. Telephone penetration is a basic proxy for technology adoption. Communications technology may help the transfer of broader technology and techniques that aid growth. The Philippines is fifth from last here. 7. Penetration of personal computers: The number of PCs per 1,000 people was used to estimate the score for this indicator. The Philippines is sixth-highest in terms of the number of PCs among BRIC and N-11 countries. 8. Penetration of Internet: Estimates of Internet usage per 1,000 people, like PC usage, provide another important measure of technology adoption and interconnectedness. The Philippines ranks 7th on this score. Human Capital 9. Average years of secondary education: Higher levels of education aid the growth process, with secondary education

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The rise of the Philippines

said on many occasions, these are not forecasts but rather a look at what might happen under reasonable assumptions if these economies can stay on their current paths,” the firm reiterated in its 2007 paper. What it did was to develop the Growth Environment Score (GES) to “summarise the overall environment in an economy, emphasising the dimensions that are important to economic growth (p.10).” The Philippines got a total GES Index of 3.8 and is ranked 96th across all countries and 59th across all developing countries in the world.

“Our focus here is less to pick winners and more to provide a road-map for assessing the kind of growth that each of the N-11 could deliver and the problems that need to be addressed to get there,” Goldman Sachs clarified in its 2007 paper. “If some of these economies can defy skeptics and take concrete steps towards addressing areas of weakness, their growth could be much higher.” HSBC boosts expectations further. Meanwhile, in the 2012 HSBC Global Research presentation, The World in 2050: From the Top 30 to the Top 50, the Philippines is classified

most consistently identified. The Philippines is fourth-highest in secondary education.

the developing country mean,” the Goldman Sachs study observed.

10. Life expectancy: The higher the average life expectancy, the higher the growth performance. The Philippines has the third-highest life expectancy, trailing only Mexico and China.

Having said that, the study still puts the Philippines among countries with medium-high convergence speeds (with developed country income levels), meaning slow at the start of the projection period but reaching higher speeds at the end of the period. (p. 13)

Political Conditions 11. Political stability: Stable political regimes promote confidence and therefore entail higher investment and growth. The Philippines is fifth from last in this indicator. 12. Rule of law: Well-defined property rights and generally well-functioning institutions are believed to be conducive to higher investment and growth. Here, the Philippines is eighth among the BRIC + N-11 countries.

13. Corruption: Increased corruption is likely to have an adverse effect on growth via distorting incentives. The Philippines is the seventh most corrupt country among the BRIC + N-11 countries. GES results have shown that the Philippines is one among six N-11 countries that have broad-based weaknesses; the other five being Egypt, Indonesia, Bangladesh, Nigeria and Pakistan. “The most striking feature of this group is their marked weaknesses in political conditions, with all sub-components below

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It no longer comes as a surprise that the Philippines did poorly in the political stability, rule of law and corruption indicators. The Heritage Foundation and Wall Street Journal’s 2012 Index of Economic Freedom, in its analysis of the Philippines, also took into account the country’s perennial problem with corruption and implementing the rule of law. “There are lingering institutional challenges that will require deeper commitment to reform. Despite some progress, corruption continues to undermine prospects for long-term economic development. The inefficient judiciary, which remains susceptible to political interference, does not provide effective protection for property rights or strong and transparent enforcement of the law,” the report explained. Despite this, the country’s economic freedom score is still 0.9 point higher than last year at 57.1, ranked the 107th freest economy in the 2012 Index.

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as one of the 26 fast-growth countries, defined here as expected to post average annual growth of more than 5%. “We identify 26 fast-growth countries. They share a very low level of development but have made great progress in improving fundamentals. As they open themselves to the technology available elsewhere, they should enjoy many years of ‘copy and paste’ growth ahead. Besides China, India, the Philippines and Malaysia, this category includes Bangladesh, the central Asian countries of Uzbekistan, Kazakhstan and Turkmenistan, Peru and Ecuador in Latin America, and Egypt and Jordan in the Middle East,” the HSBC report explained. HSBC highlights the “striking rise of the Philippines, which is set to become the world’s sixteenth-largest economy, up 27 places from today.” The report tips the Philippines in 2050 to outpace Australia (18th), Thailand (23rd) and Singapore (42nd).

The variables used by HSBC to derive the top economies in 2050 were based on American macroeconomist Robert J. Barro’s growth model, which was discussed lengthily in the 1991 paper, Economic Growth in a Cross Section of Countries, published by the Massachusetts Institute of Technology’s (MIT) The Quarterly Journal of Economics, as seen below. In addition, the global research also called the Philippines “the star performer,” elaborating that “the combination of strong fundamentals and powerful demographics gives rise to an average growth rate of 7% for the coming 40 years.” The importance of demographics. HSBC discussed the importance of demographics in economic growth. “First and most straightforward, it is generally easier to produce more stuff when you have more people on the production line. The second impact is a little more subtle and relates to the

BARRO'S GROWTH MODEL Log GDP

Variable

Male schooling

Coefficients -0.018 0.002

Log GDP* schooling

-0.004

Log fertility

-0.016

Log life expectancy

Government consumption ratio Rule of law index

Democracy index

Democracy index squared Inflation rate

-0.044 -0.136 0.029 0.090

-0.088 -0.043

Taken from The World in 2050: From the Top 30 to the Top 50, HSBC Global Research, p. 32

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The rise of the Philippines

ratio of working population to total population. As Stephen King discusses in ‘Losing control’ (2010, Yale University Press), when you have many ‘producers’ but not many ‘dependents’ the burden on producers, perhaps because of tax payments to support the elderly and young, are small and therefore the rewards for effort are great. Therefore, demographic burdens can in turn feed back to individual productivity.” The country’s “powerful demographics” were also discussed in a July 12 article by CNN. The article considers the country’s massive working population as one of the pillars for the country’s “surprisingly strong growth.” “Because Filipinos head to a wide variety of countries to work, the diversity protects them from the full impact of regional economic troubles,” said the article. "You have an aging population in the West, and you have a young population here in the Philippines that is waiting to do jobs that some people in the West aren't willing to do," said Haj Narvaez, Manilabased head of research for the Philippines at Credit-Suisse said. The Philippines is aware that its young population is an advantage. In fact, according to the First Consumer Finance Survey conducted by the Bangko Sentral ng Pilipinas in 2012, 21.5% of the population are 5-14 years old while only 6.9% belong to the 5564 age bracket, and only 5.4% are 65 years old and above. “These figures also indicated that a significant increase in the country’s labor force could be

The

expected over the next decade given that a much bigger number of young people could enter the labor force every year compared to the number of older people who leave the labor force working age group,” the BSP said. Other foundations needed for growth. But, then again, demographics is not enough. “[P] opulation growth is not itself enough to guarantee growth. You need the other foundations to ensure jobs are created for these new entrants to the labour market,” HSBC stressed in its report. Hence, it highlighted the importance of having the “right economic infrastructure” so that a “change in working population” would emerge. The Global Competitiveness Report 2011-2012 by the World Economic Forum also issued the same warning that a young population does not automatically translate to economic growth and development in the future. “Today’s globalizing economy requires countries to nurture pools of healthy and well-educated workers who are able to adapt rapidly to their changing environment and the evolving needs of the production system,” the report explained. Therefore, the government should invest in quality health care and education to ensure that the young population of today will become the highly skilled and highly productive workers of tomorrow. The report also highlighted the importance of the country’s domestic market and said that this is “a notable competitive advantage [for the Philippines].”

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9 The Philippines is up ten places to 75th in this yearâ&#x20AC;&#x2122;s competitiveness report due to marked improvements in some key indicators. A countryâ&#x20AC;&#x2122;s competitiveness is measured using the 12 pillars of competitiveness, as seen in the figure below:

According to the report, the Philippines is still making the transition from a Stage 1 (factordriven) economy to a Stage 2 (efficiency-driven) economy. The table below shows the countries of the world according to the World Economic Forum analysis.

THE 12 PILLARS OF COMPETITIVENESS Basic requirements

Institutions Infrastructure Macroeconomic environment Health and primary education

Key for factor-driven economies

Efficiency enhancers

Higher education and training Goods market efficiency Labor market efficiency Financial market development Technological readiness Market size

Key for efficiency-driven economies

Innovation and sophistication Higher education and training Goods market efficiency Labor market efficiency Financial market development Technological readiness Market size

Key for innovation-driven economies

Chart from Global Competitiveness Report 2011-2012, World Economic Forum, p. 9

The World Economic Forum report also identified the most problematic factors that hamper the business climate in the Philippines.

1. Attain a sustained and high economic growth that provides productive employment opportunities;

The National Economic Development Authority, in its September 2010 presentation, The Philippine Economy, Challenges and

2. Equalization of access to development opportunities; a. Better education, primary health care and

Emerging Priorities, has come up with a growth framework that it hopes will address the challenges facing the Philippines. These are:

nutrition, and other basic social services b. Equal access to infrastructure, credit, land, technology, and other productive inputs continued on page 11

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The rise of the Philippines

COUNTRIES/ECONOMIES AT EACH STAGE OF DEVELOPMENT Stage 1: Factor-driven (37 economies)

Transition from stage 1 to stage 2 (24 economies)

Stage 2: Efficiency-driven (28 economies)

Transition from stage 2 to stage 3 (18 economies)

Stage 3: Innovation-driven (35 economies

Bangladesh

Algeria

Albania

Argentina

Australia

Benin

Angola

Belize

Babados

Austris

Bolivia

Armenia

Bosnia and Herzegovina

Brazil

Bahrain

Burkina Faso

Azerbaijan

Bulgaria

Chile

Belgium Canada Cyprus

Burundi

Botswana

Cape Verde

Croatia

Czech Republic

Cambodia

Brunei Darussalam

China

Estonia

Denmark

Cameroon

Egypt

Colombia

Hungary

Finland

Chad

Georgia

Costa Rica

Latvia

France

Cote d'Ivoire

Guatemala

Dominican Republic

Lebanon

Germany

Ethiopia

Guyana

Ecuador

Lithuana

Greece

Gambia, The

Honduras

El Salvador

Mexico

Hong Kong SAR

Ghana

Iran, Islamic Rep.

Indonesia

Oman

Iceland

Haiti

Jamaica

Jordan

Poland

Ireland

India

Kazakhstan

Macedonia, FYR

Russian Federation

Israel

Kenya

Kuwait

Malaysia

Slovak Republic

Italy

Kyrgyz Republic

Mongolia

Mauritius

Trinidad and Tobago

Japan

Lesotho

Paraguay

Montenegro

Turkey

Korea, Rep.

Madagascar

Philippines

Morocco

Uruguay

Luxembourg

Malawi

Qatar

Namibia

Malta

Mali

Saudi Arabia

Panama

Netherlands

Mauritania

Sri Lanka

Peru

New Zealand

Moldova

Syria

Romania

Norway

Mozambique

Ukraine

Serbia

Portugal

Nepal

Venezuela

South Africa

Puerto Rico

Nicaragua

Suriname

Singapore

Nigeria

Swaziland

Slovenia

Pakistan

Thailand

Spain

Rwanda

Tunisia

Sweden

Senegal

Switzerland

Tajikistan

Taiwan, China

Tanzania

United Arab Emirates

Timor-Leste

United Kingdom

Uganda

United States

Vietnam Yemen Zambia Zimbabwe Table from Global Competitiveness Report 2011-2012, World Economic Forum, p. 11.

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The rise of the Philippines

THE MOST PROBLEMATIC FACTORS FOR DOING BUSINESS, PHILIPPINES Percent of responses Corruption

24.4

Inadequate supply if infrastructure

16.5

Inefficient government bureacracy Policy instability Tax rates

7.9 5.7

Crime and theft

5.6

Tax regulations

Restrictive labor regulations

Inadequately educated workforce Access to financing Inflation

Government instability/coups

Poor work ethic in national labor force Foreign currency regu;lations Poor public health

18.3

5.6 4.6 2.5 2.2 2.0 1.9 1.9 0.5 0.5

Table from Global Competitiveness Report 2011-2012, World Economic Forum, p. 294

c. Improve governance and strengthen institutions to promote competition 3. Implementation of social safety nets to protect and enable those who do not have the capability to participate in the economic growth process. So, while the Philippines remains full of potential, the road to sustained (and sustainable) economic development indicates much work still needs to be done for the country to reap the rewards that are said to be looming just over the horizon. As for those who insist on counting chickens before they hatch, ponder this: 55 years ago, the

World Bank touted two Southeast Asian countries as offering the most promise for sustained long-term growth: Burma and the Philippines. Meanwhile, Hong Kong, Singapore, Taiwan and South Korea were predicted to fall behind India, Pakistan and Sri Lanka, as related in a 1993 World Bank paper, “Explaining Miracles” (page 12). Needless to say, things didn’t turn out that way, as per capita income data since 1960 show. The challenge, as always, is translating potential into performance, glowing prospects into sustained growth. This time, the Philippines should not let the hype get in the way of hard work.

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NEWS ON THE NET Business

Bloombery poaches Filipinos In Macau for Manila casino Bloomberry Resorts Corp. needs as many as 4,500 workers for its $1-billion Solaire Manila Resort & Casino, scheduled to open sometime in the first quarter of 2013, and has been drawing Filipino talent from Macau and Singapore to fill those positions. According to Michael French, the company’s chief operating officer, the company has already enticed more than 400 Filipinos to return, Solaire’s recruitment efforts reflect the rising competition for casino workers and high-stake gamblers that Macau faces from smaller hubs such as the Philippines and Singapore. Bloomberry has one of the four licenses the Philippines awarded for gambling and hotel complexes in its 110-hectare Entertainment City Manila. Japanese billionaire Kazuo Okada, Genting Hong Kong Ltd. and Henry Sy’s SM Group – through SM Investments subsidiary Belle Resources -- also have permits.

Philippines has surpassed “even the most optimistic forecasts because of the exemplary public-private partnership they demonstrated,” citing recently released data from the Business Processing Association of the Philippines that highlighted the industry’s outstanding performance in 2011: $11 billion in revenue, up by 24% from 2010, and 638,000 jobs, up by 22% over the previous year. Assuming current growth rates hold, the BPAP predicts the industry will bring in $25 billion a year by 2016, making up 9% of the Philippine gross domestic product (GDP) and 10% of the sector’s global market share, apart from employing 1.3 million Filipinos by then. GDP is the total value of goods and services produced in a country in a year.

Most Filipinos still impulsive buyers, says Nielsen report Despite efforts to keep their spending low and within their budgets, around 7 out of 10 Filipinos remain impulsive buyers, according to the latest annual Philippines Shopper Trends Report released by Nielsen Philippines on Thursday July 19. According to Nielsen, a global provider of information on consumer behavior, while 9 in 10 Filipinos prepare shipping lists, almost 7 out of 10 do not stick to their shopping plans and remain open to impulsedriven purchases.

IT-BPO industry to ‘spark’ Philippine economic boom According to Sen. Edgardo Angara, the Information Technology and Business-Process Outsourcing (ITBPO) industry could “very well be the spark that sets off the Philippines’s economic boom,” and the government should strengthen the country’s foothold on it.

Nielsen data shows that Filipino shoppers have a high degree of loyalty toward both retailers and brands. According to the report, only 7% of Filipinos are likely to change the store they shop in based on promotional offerings, and just 9% regularly buy different brands due to promotions.

Angara added that rapid expansion of the IT-BPO industry in the

Nielsen also reports that while 9 in 10 Filipino shoppers claim to make

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an effort to buy products that are friendly to the environment, this does not translate into actual purchases. Only 27% of shoppers claim to purchase more or the same number of environmentally friendly products in 2011 as they did before, while around 44% say they do not purchase any environmentally friendly products. The report is based on interviews of 1,500 respondents of ages 15 to 65 in urban locations, conducted between Oct. 8 and Nov. 23, 2011.

BSP cites global woes as payments surplus shrinks The Philippines saw its balance of payments (BoP) surplus plunge by more than 70% in the first semester as the global economy weakened, the Bangko Sentral ng Pilipinas said on Thursday July 19. The BSP reported a January-to-June surplus of $1.316 billion, 74% below last year’s $5.016 billion. The June result of $14 million alone was well below the $222 million recorded a year earlier. “Overall, the global economy is much weaker than last year’s,” central bank Deputy Governor Diwa C. Guinigundo said. The BoP provides an overview of a country’s transactions with the rest of the world. A surplus provides a cushion against external volatility. Last month, the central bank lowered its 2012 BoP forecast to a surplus of $2.6 billion from $2.8 billion, citing the euro zone crisis and a United States slowdown. In 2011, the country recorded a BoP surplus of $10.8 billion.

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Fixing the Fix A credible Random Manual Audit process is crucial for an automated election system to deliver credible results in the May 2013 elections By Zandro G. Rapadas, M.D.C.

STRATEGY POINTS The May 2010 automated national and local elections were regarded as a landmark achievement in the countryâ&#x20AC;&#x2122;s history, but while the results were generally accepted, serious doubts have arisen regarding the accuracy of the automated election system Doubts center on the failure of the post-election audit procedure, or the Random Manual Audit, to check accurately the results of automated counting The direct participation of the Commission on Elections and its citizensâ&#x20AC;&#x2122; arm in the audit process, combined with the exclusion of other observers, has cast doubt on the integrity of the entire automated counting process

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It is the policy of the State to ensure free, orderly, honest, peaceful, credible, and informed elections, plebiscites, referenda, recall, and other similar electoral exercises by improving on the election process and adopting systems, which shall involve the use of automated election system that will ensure the secrecy and sanctity of the ballot and all election, consolidation, and transmission documents in order that the process shall be transparent and credible and that the results shall be fast, accurate, and reflective of the genuine will of the people. ~ Declaration of Policy, Section 1, Republic Act 9369 or an Act amending R.A. 8436 entitled “An Act Authorizing the Commission on Elections to use an Automated Election System”

he 2010 automated national and local elections in the Philippines were

Section 29 in Republic Act 8436 provides for a post-election audit mechanism in the AES:

collectively lauded as a landmark achievement in the nation’s history of democracy and suffrage, but continue to be hounded with unresolved issues and serious doubts on their accuracy and credibility. From technology and security concerns involving the hardware, software, and process of the automated election system (AES) provided by vendor Smartmatic-TIM to the nitty-gritty of implementation, adequacy of resources, and preparation time for the Commission on Elections (Comelec) and its partner institutions, the issues raised by various local election stakeholders, international observers, and IT experts left more to be desired from what was touted as the cure to our manual election woes. The general acceptability of the results notwithstanding, the 2010 automated elections have turned out to fall short of expectations. Checking automated election results. Just as there are system fixes to address errors or data corruption in personal computers -- antivirus, disk cleanup, and defragmentation programs -- there is a built-in feature provided by law to check on the accuracy and reliability of automated election results: the random manual audit (RMA).

The

Where the AES is used, there shall be a random manual audit in one precinct per congressional district [emphasis ours] randomly chosen by the Commission in each province and city. Any difference between the automated and manual count will result in the determination of root cause and initiate a manual count for those precincts affected by the computer or procedural error. Kathy Dopp, in her 2010 dissertation at the Rockefeller College of Public Affairs and Policy, “Checking Election Outcome Accuracy: Postelection Audit Sampling Methods,” defines “post-election audit” as a “check of the accuracy of reported election results done by manually counting all the voter-verifiable paper ballots associated with randomly sampled reported initial vote counts, and checking such additional records as necessary to ensure the integrity of the electoral process.” Moreover, in its Final Report, the Carter Center Limited Mission to the May 2010 Elections in the Philippines noted that “in an automated system such as the Smartmatic AES, the burden of building public trust in the results rests

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15 largely on the audit process. Post-election audits must be both comprehensive and well-implemented, in order to verify that the machines performed as intended and were not subject to any manipulation or programing error.”

only those for President and Vice-President on the national level, and Governor, Congressman, and Mayor on the local level.

Too much, too late. On April 30, 2010, just 10 days before the elections, the Comelec promulgated the “General Instructions for the Conduct of a Random Manual Audit (RMA) for the May 10, 2010 National and Local Elections.”

The Provincial Election Supervisors (PES) implemented the RMA in the legislative districts, including designating members of the audit team. The auditors were members of the Board of Election Inspectors (BEI) from the clustered polling precinct that was immediately after the randomly selected precinct or before it, should the latter be the last precinct in the voting center, or from the next barangay should the randomly selected precinct be the lone precinct in the voting center. According to TWG-RMA, selecting another set of BEI to do the manual audit in the randomly selected precincts ensures a blind audit, given that “it precludes the possibility of any attempt to ‘reconcile’ the manual count with the AES count,” as noted in their terminal report submitted to the Comelec on July 20, 2010, a copy of which was obtained by The CenSEI Report.

The general instructions for RMA also increased the number of clustered polling

Prolonged selection process leads to delays, errors, confusion. The selection of the 1,145 polling precincts was done manually by drawing ping-pong balls from a tambiolo (a rotating receptacle used in raffle draws), with one ball assigned to a clustered polling precinct per legislative district, as witnessed by representatives of various election stakeholders. The draw was done from 10:30 a.m. to 7 p.m. on May 10 at the Philippine International Convention Center in Pasay City (where Comelec set up its national canvassing). However, the prolonged process delayed the transmission of the selection results and instructions to the audit teams, and there was confusion as well as several glitches, as reflected in

precincts to be audited – from 1 per legislative district (as provided for in R.A. 9369) to five, for a total of 1,145 (from the original 229). Also, the elective positions to be audited included

reports from Davao City and Quezon City, the former being the largest city in the country geographically, and the latter in terms of voting population.

Comelec Advisory Council member Henrietta de Villa, who heads the Parish Pastoral Council for Responsible Voting (PPCRV), which was the Comelec’s accredited citizens’ arm in 2010, was also the chair of the Technical Working Group on the Random Manual Audit (TWG-RMA), with a representative from Comelec’s Internal Audit Office and the National Statistics Office (NSO) as members. The NSO slot was originally for the Commission on Audit (COA), but the latter withdrew in March 2010, citing possible conflict of interest.

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The random manual audit, just like the AES, suffered from a very tight timetable for its preparations. Adversely affected was the selection of the Random Manual Audit Team (RMAT) composed of teachers totaling 3,435 (each RMAT was composed of three members) that were only given one-day session of training a week prior to elections. Some of those who were not reached by such session had to rely on a training CD. This lack of sufficient in-depth training was evident in the errors and flawed improvisations committed during the implementation of the RMA.

~ Excerpt from the Executive Summary of the Report of TWG-RMA to Comelec, July 20, 2010

Acceptable margin of variance adopted by TWG-RMA. Based on the ninety-nine percent (99%) accuracy rate adopted by the TWG-RMA, the acceptable margin of “variance” was one percent or 10 votes’ difference in absolute value for every 1,000 valid ballots cast. “Variance” was defined as the absolute difference between the number of votes per AES and per RMA. Thus, from the given sample of 1,046 clustered precincts with 540,942 valid ballots cast through AES, the allowable total cumulative discrepancy based from the sample should be less than 5,409 votes. At the clustered precinct level, a candidate that was found to have a variance of 10 or more votes underwent further validation by the audit process.

This second part of our AES review focuses on its audit mechanism, the RMA, and reports on the audit results in 2010, as well as the issues raised about its flaws and action points to consider in 2013. The details of the RMA process, culled from the TWG-RMA Terminal Report, will be posted on The CenSEI Report’s blog at http://censei.wordpress.com. Actual audit results in 2010. Only 1,046 of the total 1,145 sampled clustered precincts (91.3%) turned in complete audit reports to TWG-RMA by July 7, 2010. A report was deemed complete if it provided the number of votes per AES and per RMA.

High school teacher Janet Layosa-Arbon, who heads the Random Manual Audit Team assigned in Krus na Ligas Elementary School in Quezon City, reads out the votes from over 700 ballots to be manually tallied by two other team members. This is to check whether the results recorded by the counting machine tallies with the results obtained through manual counting Jerrie Abella/GMA News

From this number of precincts covered, a total of 540,942 persons voted using the AES. The TWG-RMA reported that audit compared the results of the AES count to the

Variance was computed at the sample clustered precinct level. The sum of variance at the legislative district level was computed by adding all the variances of the sampled clustered

results of the manual count. Ideally, the number of votes counted from the AES should be the same as the number of votes counted manually.

precincts within the district, while the regional variance was equal to the sum of the variances of the legislative districts within the region. Finally, the national total variance was the sum

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PERCENT DISTRIBUTION OF SAMPLED CLUSTER ARMM 2% CAR 3% Region 4B 3% Region12 3% Region 9 4% Caraga 4% Region 2 5% Region 11 5% Region 8 5% Region 1 6%

NCR 13% Region 4A 10% Region 3 9%

Region 6 8% Region 7 7% Region 5 7% Region 10 6%

Chart from Executive Summary of the Report of the Technical Working Group on Random Manual Audit to the Commission on Elections, July 20, 2010, unpublished document obtained by TCR

of the variances of all the regions. Large variances were subjected to further validation. A variance was considered large if it was double digit and exceeded the allowable margin of variance. Validation required identifying the root cause of discrepancies, and variances attributable to clerical or computing errors were immediately corrected and reflected in the variance summary results. However, errors other than clerical or mathematical errors were referred to the TWG-RMA. Accuracy rate. The accuracy rate was computed as the complement of percentage variance. Thus, a 0.49 percentage variance has an accuracy rate of 99.51%. The 2010 audit outcome revealed that on the average, accuracy rate at the national level for all positions was at 99.6%. The highest accuracy rate was recorded in Region 11 for President (99.65%) and CAR for Vice President (99.74%). For the local positions, the highest rate was recorded in Region 2 for Congressman (99.87%), CAR for Mayor (99.7%), and Region 11 for Governor (99.79%).

Flaws in the audit system. University of the Philippines economics professor Solita Monsod, in her May 28, 2010 Philippine Daily Inquirer column, criticized the last-minute inclusion of an National Statistics Office representative in the TWG-RMA, noting that the NSO was involved only five days before the elections, and that NSO head Carmencita Ericta’s expertise in choosing the most appropriate sampling design and analyzing the results of the audit was not utilized. “If one of the three members of the TWG-RMA was not in the loop, one can only imagine how important technical decisions were made. I am not sure where De Villa’s or Carreon’s technical expertise lies, but I am sure where Ericta’s expertise lies. And she was not used,” Monsod stated. Meanwhile, a May 20, 2010 ABS-CBN report on the RMA drew a response from a reader (edward42479), who commented that the audit lacked credibility, obviously referring to the involvement of Comelec personnel in the audit. “How can you expect a credible random

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manual audit if Comelec personnel are also involved in the so-called checking? Of course, they will refrain from divulging BIG discrepancies because that will invalidate the Commission’s claim that the electronic election is reliable and accurate. This is a very basic audit principle,” he said. (The reader, who signed his posts “Eduardo from Dubai,” identified himself as having worked in PricewaterhouseCoopers and KPMG in Manila, and as currently employed as an internal auditor in Dubai.)

-The Carter Center

• Delay of several days after the elections in conducting the audit, instead of immediately after election returns were transmitted from the precinct level • Some instances when the audit was done without political party watchers and election watchdogs, who were essential to the integrity of the process • Delay in the announcement of results immediately after the conduct of the audit, with results going through further “processing,” raising concerns that the results were sanitized. The Carter Center, an international human rights organization based in Atlanta, Georgia, shared the same observation and noted in its mission report that “while there were very few variances between the AES and RMA results as reported by Comelec and PPCRV, the utility of this audit was severely curtailed by a lack of transparency and ineffective administration.”

The Carter Center also noted “because the national results of the election so closely mirrored the pre-election polls, the audit’s role as a check on the accuracy of the system received minimal attention in the post-election period and was not subject to scrutiny by watchers or political parties.”

‘The utility of this audit was severely curtailed by a lack of transparency and ineffective administration’

For local election watchdog Halalang Marangal, the conduct of audit in only 1,145 out of 76,347 precincts, was a poor substitute for public counting. They also noted several flaws in the audit, including:

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Meanwhile, the Center for Public Empowerment and Governance (CenPEG) questioned the exclusion of party-list representatives and senators, as well as the positions for vice-governor and vice-mayor from the

audit. In its analysis of the random manual audit, CenPEG cited Comelec Resolution 8834, which maintained that the audit aims to discover if the cause of errors is attributable to the PCOS, and thereafter seeks to determine if, with errors accounted for, the PCOS is still reliable. “If the RMA was conducted to determine whether the PCOS count is reliable, then the RMA should examine all the positions in the last election,” CenPEG said. Furthermore, CenPEG noted that the TWGRMA arbitrarily imposed an “allowable margin of variance” of one percent, which they say was not supported by any Comelec document. In fact, a provision in the Request for Proposal of the Comelec for the Automation of the 2010 election (dated March 11, 2009) noted that the system shall count the voter’s vote as marked on the ballot with an accuracy rating of 99.995% or an error rate of 0.005%. “Hence, the allowable margin of variance is 0.005%. This is 1 error out of 20,000 trials. However, 1% is 200 errors out of 20,000 trials,” CenPEG explained. It further noted that if there were 540,942 votes cast through the AES that continued on page 22

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Report of the TWG-RMA on the elective positions audited The cumulative variance for President was tallied at 2,653 votes, which was almost half of the allowable variance of 5,409 votes. The computed variance was 0.49%, which meant a 99.51% accuracy rate. Percentage variance is the ratio between total variance and the number of persons who actually voted. For the VP position, the total variance was 2,180 votes or 0.40 percent, which was almost 0.1% lower than the percentage variance for President. Meanwhile, the total variance recorded for Congressman was 1,947 votes, or 0.36% variance. The mayoralty position had a total cumulative variance of 2,182 votes, or 0.4% variance, while the gubernatorial post had a total variance of 1,910 votes, or 0.35%. Please see the following table for the percentage share by regions for the five elective posts audited:

VARIANCE SUMMARY RESULTS FOR NATIONAL AND LOCAL ELECTIONS: PHILIPPINES 2010 Before Validation of Large Variances

After Initial Validation of Large Variances

After Final Validation of Large Variances

June 4

June 17

July 7

Position

Total Variance

Percentage Variance

Total Variance

Percentage Variance

Total Variance

Percentage Variance

President

3,787

0.70

3,528

0.65

2,653

0.49

Vice President

2,835

0.52

2,529

0.47

2,180

0.40

Total (National)

6,622

0.61

6,057

0.56

4,833

0.45

Mayor

3,042

0.56

2,808

0.52

2,182

0.40

Member, House of Representatives

2,605

0.48

2,642

0.49

1,947

0.36

Governor

2,766

0.51

2,467

0.46

1,910

0.35

Total (Locals)

8,413

0.52

7,917

0.49

6,039

0.37

Table from Executive Summary of the Report of the Technical Working Group on Random Manual Audit to the Commission on Elections, July 20, 2010, unpublished document obtained by TCR

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There were three (3) cases that the TWG-RMA deemed as beyond their mandate, and as such were submitted to the attention and action of Comelec. 1. The first case involved legislative districts that were found to have large discrepancies in number of ballots, whereby the AES count was more than the physical count. These included the Municipality of Pambujan in Northern Samar (difference of 24 ballots), Municipality of Tuburan in Basilan (diff: 13), Municipality of Gerona in Tarlac (diff: 14), and Tarlac City (diff: 18). The TWG-RMA suggested that the RMAT and the BEI of these precincts be made to explain the reason for the discrepancies with the number of ballots per AES and per manual count. 2. The second case involved the Municipality of Lutayan in Sultan Kudarat, which had 99 “rejected” ballots, which required further analysis, while the Municipality of Maluso in Basilan, which posted large variances, thus requiring the retrieval and opening of the ballot box of the polling precinct. The audit team found no variance but noted a very low number of valid votes at 99, as compared to 171 voters who voted and 980 registered voters. 3. The last case involved the cumulative variances for the Third District of Manila, which posted unexplainable large variances, even after physical count of the ballots and ruling out “over votes.” The memory cards of the PCOS machines involved were then retrieved and the scanned images of the ballots analyzed. The TWG-RMA reported that a vertical line was discovered to have run through a portion of the ballot where the local positions were found, which could not be seen in the actual ballots. “As explained by Smartmatic-TIM, this must have been caused by a ‘foreign object’ that got ‘unintentionally’ lodged in the scanner of the PCSOS during the voting and scanning process. It might be interesting to note that when the particular PCOS machine was inspected in the presence of several watchers, indeed a fiber-like substance was found inside the machine. This case appears to be machine and not procedural error,” the report said. The TWG-RMA ended its report to Comelec by noting that the “root cause analysis of the variances in a majority of the sampled clustered precincts manifested the difficulty of conducting parallel manual and machine counts,” adding that the manual count is prone to the subjective appreciation by the auditor of the voter’s intent, whereas the machine will only count in the way it was programmed to do. They also distinguished between margin of variance, which is a computation of the difference between the manual count and the machine count, and the tolerance level set for the accuracy of the machines. At this point, we wonder whether there was an audit on the accuracy of PCOS machines (based on the tolerance level) for sampled precincts that posted large variances. “The margin of variance indicated by the NSO as equivalent to 1% based on the accuracy rate of 99% (the allowable rate used in statistical analysis) cannot thus be used as the basis of comparison with the 99.995% accuracy rate of the PCOS machine set as a requirement for the bidding process of the AES technology. As indicated in the NSO cumulative variances for the five positions audited, none failed the accuracy rate of 99%,” the report maintained.

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allowable margin of variance at 0.005% should then be equal to 27 votes. “Therefore, the actual variance 2,653 in the presidential level is over 2,653/27 or over 98 times than the allowable limit,” it maintained. Recommendations for conduct of future RMAs. The TWG-RMA proposed several improvements on the RMA system, which include, among others: • Setting a standard number of precincts to be audited • Including the RMA in the general appropriations act of the Commission • Learning from other post-election audit methodologies from other countries or from research • Improving technical features of voting machines to become more audit-able and accountable • Inclusion of auditors in the regular training of BEI before elections. In an interview with The CenSEI Report, TWG-RMA chair Henrietta de Villa noted that she would recommend to the Comelec en banc to revert to 1 precinct per legislative district to be audited, and when asked why the audit task was not given to volunteers from the Parish Pastoral Council for Responsible Voting (PPCRV), considering that they are as capable as the Board of

Election Inspectors (BEI), De Villa said it could be explored. As noted earlier in this report, another set of BEI composed the audit team, but ABS-CBN reported that PPCRV dismissed a petition by the coalition of the National Citizens Movement for Free Elections and the Catholic Bishops’ Conference of the Philippines’ National Secretariat for Social Action to observe and assist in the random manual audit, arguing that such duty is also PPCRV’s function. “Hence, co-petitioners are asking for a duplication of the task that has already been awarded to PPCRV,” it said. Could it be that PPCRV’s own parallel count prevented them from doing the random manual audit, which they say was part of their mandate? This and many other stones need to be turned in order to understand why the RMA in 2010 failed, and, more importantly, how to prevent a recurrence in 2013. About the author: Zandro Rapadas was a Namfrel volunteer since 2001, starting out as a voting center manager, and later on becoming chairman of Namfrel Quezon City in 2007. He was part of the international observation mission of the Asian Network for Free Elections (ANFREL) for the presidential elections and referenda in Taiwan in 2008. His article is the second installment of The CenSEI Report assessment and recommendations on automated elections, after the first one in the Vol. 2, No. 26 issue dated July 2-8, 2012

CONTENTS BUSINESS NATION WORLD TECHNOLOGY HEALTH/LIFESTYLE

NEWS ON THE NET Nation

UNA ready to face off against LP in 2013, rules out ‘super coalition’ The United Nationalist Alliance has ruled out any plans of coalescing with the administration's Liberal Party for the upcoming 2013 elections. Founding leader former President Joseph Estrada reiterated that his coalition is the opposition and that it would not ally with the ruling party. Only a few days ago Estrada's son, Congressman Joseph Victor Ejercito, proposed forming a rainbow coalition with the Liberal Party to put up a super senatorial slate. This caused the latter's members to raise their eyebrows and question UNA's actual openness to form such a coalition. UNA now maintains that it would rather stand on its own than form a “coalition of convenience” with other parties.

'PCSO plunder case to pin down Arroyo' Journalism for Nation Building Foundation president Marites Vitug thinks that the latest plunder case filed against Gloria Macapagal Arroyo over alleged misuse of Philippine Charity Sweepstakes Office (PCSO) intelligence funds is a strong case that could possibly put the former president in jail. This was after Arroyo's legal representative, lawyer Anacleto Diaz, said that the plunder case against Arroyo was in preparation for the upcoming State of the Nation Address of President Benigno S. Aquino III on July 23. On July 16, the Office of the Ombudsman filed plunder charges against Arroyo and nine PCSO officials for the alleged misuse of

₧365,997,915.00 in PCSO confidential/ intelligence funds. In a Senate Blue Ribbon Committee investigation, it was revealed that Arroyo approved Uriarte's request for the use of intelligence funds from 2008 to 2010 that were used for the purchase of relief goods and payment of blood money for overseas Filipino workers. Malacanang denies it had anything to do with the filing of the case against Arroyo or the separate case against former Philippine Amusement and Gaming Corporation chair Ephraim Genuino involving overpriced coffee at Casino Filipino branches.

of peace, and to fulfill their obligations of sacrifice as part of the nation's continuing quest for harmony and development. The President also said in his message, conveyed through the National Commission on Muslim Filipinos, that they must also "take part in sustaining our collective aspirations of goodwill as a people and solidarity amidst our diversity." Ramadan, which begins the day after the crescent moon is sighted during the ninth month of the Islamic lunar calendar, calls for abstention from food, drink, smoking, sex, and general selfrestraint from dawn to dusk.

Jeepney operators to DND on Chinese military strength: seek new fare hike We will defend the Three jeepney-operator groups said Philippine territory they will file a rate-hike petition if diesel fuel costs reach ₧43 a liter. They also ‘whatever happens’ said they would ask authorities for permission to increase fares by as much as 25% – from ₧8 to ₧10 – if diesel fuel reaches ₧45 a liter. In any event, the groups will be asking for a provisional increase of 50 centavos while the ratehike petition is being heard. Earlier this month the operator groups asked the LTFRB to revive their petition to increase fare due to the sudden increase in diesel prices. Just a week ago, the Department of Energy warned the public of upcoming successive increase in oil price, as delivery of supply might be affected by the embargo imposed by the eurozone against Iran for the latter’s refusal to terminate its nuclearenhancement program.

Aquino tells Muslims: Uphold peace During the beginning of the Islamic celebration of Ramadan, President Benigno S. Aquino III told his brother Muslims to uphold Ramadan's message

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The Department of National Defense assured the Filipino nation that it will defend the Philippine territory in the controversial South China Sea. It was earlier reported that about 30 Chinese vessels have invaded the Zamora Reef located within the Kalayaan Island Group (KIG) in Palawan. DND Spokeperson Peter Paul Galvez said that it would render the necessary support within its capability to the Department of Foreign Affairs, which is the main department handling the situation in the disputed territories. On Friday a Chinese landing ship was spotted at the said Zamora Reef which is 12 nautical miles from the Philippineoccupied Pag-asa Island. The Philippine Navy is also continuously monitoring the activities of the Chinese fishing fleet in Kagitingan Reef. The dispute also prevented the ASEAN ministers from forging a joint communiqué after the host country Cambodia refused to include the issue in the regional forum’s statement despite support from other member states

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The Quest for Olympic Gold in London

rom July 27 to August 12, London will play host to 10,500 athletes from 205 countries, who will compete in 302 medal events across 26 sporting events at the 2012 London Olympics, according to the London Organizing Committee of the Olympic Games and Paralympic Games. The success of an athlete in any of these events is an important source of national pride, and the keys to Olympic success have been the subject of serious studies. In the past three Olympic Games, the United States, Russia and China dominate the medal tally, and for this year, studies predict that these three countries will remain to be on top.

Athletic potential, it turns out, is only part of the formula for Olympic success By Pia Rufino

STRATEGY POINTS United States, Russia and China are projected to rule the 2012 London Olympics medal tally Asia, as represented by China, Japan, and South Korea, is expected to do as well as it did in 2008, but don’t expect to see Southeast Asia come up big in the 2012 Olympic medal tally Population, income per capita, ‘home town’ effect, and political system drive Olympic success, according to studies

According to the medal table for all Olympic Games compiled by The Telegraph, the United States, Russia, and China were the top three Olympic medal receivers during the 2000 Sydney Olympics, tallying 98, 84 and 59 medals, respectively. During the 2004 Athens Olympics, the U.S. led all countries with a total of 102 total medals (36 of which were gold). Russia tallied more medals (92 total medals) compared to China (63) but the latter got the second-most gold medals, 32 compared to Russia’s 27. Then, in the Olympic Games in Beijing, China got 51 gold medals, compared to U.S.’ 36 and Russia’s 23, even as the U.S. won the most medals, 107 to China’s 100 and Russia’s 73. Regional first, then global focus for sports development in Asia. According to the paper “Regional Sports: Navigating the Winds of Social Change for Female Elite Athletes in Asia” by the New Zealand Asian Studies Society, the most significant feature of sport development in Asia is the promotion of sporting opportunities at the regional level. These continental and regional sports events regulated by the Olympic Council of Asia were “created to encourage more Asian athletes to achieve medals and to help them reach elite level in the world sporting competitions,” based on the study.

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These sports competitions include the Asian Games, a multi-sport event held every four years among athletes from all over Asia, as well as regional games in five Asia zones -- South Asian Games, East Asian Games, Central Asian Games, Southeast Asian (SEA) Games and West Asian Games, -- which have provided support and opportunity for the less developed Asian countries to strengthen their sporting abilities and training. According to the study, “Asia is the fastest growing continent in the world in winning gold in the Olympics.” The study notes that in the 2008 Beijing Olympics, Asian athletes won 86 gold medals, 28.5% of the gold-medal count, placing the region second to Europe, which got almost half of the total gold medals. (See bottom right chart) The number of the gold Olympic medals the region earned rose by four times since 1988, when it got 21 gold medals. Moreover, the number of Asian countries that won gold medals in the Olympics increased from three to 12, while the number of those who achieved silver or bronze increased from nine in 1988 to 19 in 2008. Southeast Asia’s Beijing results, predicted London performance not impressive. For its part, Southeast Asia’s Olympic performance has not been particularly noteworthy, its current prominence as a bloc of emerging economic powerhouses notwithstanding. Southeast Asian countries collectively got 12 medals in the 2008 Beijing Olympics. Indonesia led the group with five medals, Thailand with four, while Singapore, Malaysia and Vietnam won one medal each. For the upcoming London Olympics, Southeast Asia is sending few title contenders due to “enduring poverty, threadbare facilities, skewed funding and a focus on non-Olympic sports,” according to a report by Agence France Presse posted in Business World on July 11.

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Santiparb Tejavanija, an adviser to the Olympic Council of Asia, was quoted as saying: “The risk is that sport in our region collapses.” He explained that “under-investment results in a lack of facilities, financing and top-level coaching, and short-changes athletes and the patriotic millions they represent,” warning that, “If we cannot nurture the best young people, we will be unable to compete in the long term. Each year that passes, another group of potential athletes disappears.” Another concern, according to Greg Wilson, an Australian advising the Indonesian Olympic

TOP 10 COUNTRY MEDAL STANDINGS, 2008 OLYMPICS Rank NOC Total 1 China 51 21 28 100 2 United States 36 37 34 107 3 Russia 23 21 29 73 4 Great Britain 19 13 15 47 5 Germany 16 10 15 41 6 Australia 14 15 17 46 7 South Korea 13 10 8 31 8 Japan 9 6 10 25 9 Italy 8 9 10 27 10 Ukraine 7 5 15 27 The Telegraph ranks the countries according to the number of gold medals awarded during the 2008 Beijing Olympics Source: Medal table for all Olympic Games compiled by The Telegraph, July 22, 2012

GOLD MEDAL SHARES ACROSS REGIONS, 2008 OLYMPICS

ASIA 28.50%

AMERICA 18.50% OCEANIA 5.60% AFRICA 4%

EUROPE 43.40% Source: “Regional Sports: Navigating the Winds of Social Change for Female Elite Athletes in Asia,” New Zealand Asian Studies Society, published in New Zealand Journal of Asian Studies, Dec. 2010, p. 40

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25 Committee, is that the funding of sporting bodies goes to regional instead of global competition, saying that cash incentives are only offered to Indonesian athletes to prepare for the SEA Games and domestic competition. Population, income, and political system matter at the Olympics. Various studies consider population, income per capita, home country advantage, and political system as significant factors in determining countries’ probabilities of Olympic success. In a 2005 paper from Illinois Wesleyan University, “Predicting Olympic Medal Counts: the Effects of Economic Development on Olympic Performance,” as published in The Park Place Economist, author Xun Bian concludes that “the larger the population size, the more likely a country is going to do better in the Olympics and the richer a country is, the more Olympic medals it will likely win.” The paper, which probes the relationship between a country's Olympic performance and its economic condition, including population, economic resources, and political structures, explains that high-income countries can afford the training and medical care for the athletes, and are able to send a large group of athletes to the Olympic Games. Meanwhile, the study said that communist countries perform better “probably because a centrally-planned economic system allows more specialization in sports, and more resources can be

distributed to training and supporting athletes as compared to market-based economies.” Economists at UK-based global professional services firm PriceWaterhouseCoopers (PwC) said in an analysis titled “Economic Briefing paper: Modelling Olympic performance,” that political factors —whether a country was formerly in the Soviet bloc or is in a communist regime -- stimulates Olympic success given the high political importance of sporting success in many of these countries (in particular, Russia, Ukraine, Poland, Bulgaria and Romania, as well as China and Cuba). PwC also said that population, average income levels (measured by GDP per capita), and the home country advantage are statistically important in explaining the number of medals won by each country at previous Olympic Games. The firm uses these determinants to provide projected medal tallies of different countries. Based on PwC’s medal projections, the U.S., China, and Russia will top the 2012 London Olympics, with a projected 113, 87, and 68 medals, respectively. Meanwhile, the British team could bag 54 medals this time, seven medals more than it got in Beijing. The home-country advantage. In a 2002 paper, “Who Wins the Olympic Games: Economic resources and Medal totals,” by Andrew Bernard continued on page 27

2012 TOTAL MEDAL PROJECTIONS Country U.S. China Russia Great Britain Australia Germany France Japan Italy South Korea

PriceWaterhouseCoopers 2012 Projections 113 87 68 54 42 41 37 28 27 27

Goldman Sachs 2012 Projections 108 98 74 65 46 41 41 26 30 31

2008 Olympic Medals 110 10 73 47 46 41 41 25 27 31

Source: Table from TCR compilation of data from “Economic Briefing paper: Modelling Olympic performance” by PriceWaterhouseCoopers and “The Olympics and Economics 2012” by Goldman Sachs

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The quest for Olympic gold in London

Southeast Asian countries’ medal prospects Malaysia’s hope for gold rests on 2008 Beijing Olympic men’s singles badminton silver medalist Lee Chong-Wei, according to a report from Egyptian independent news agency Bikyamasr. Aside from badminton, Olympic Council of Malaysia President Tunku Tan Sri Imran Tuanku Jaafar said the country also hopes to earn its first gold medal in Archery, diving and track cycling, according to a report from Malaysian National News Agency Bernama Media. Meanwhile, Indonesia’s President Susilo Bambang Yudhoyono said he hopes that the country will maintain its performance in London, noting that the country has so far won gold, silver, or bronze medals in every Olympic Games, according to a July 16 report from Indonesia’s official news agency Antara. A July 13 Antara report said the 21-athlete Indonesian contingent to London includes 2004 Athens Olympics gold medalist in men’s badminton singles Taufik Hidayat and Liliyana Natsir, who won a silver medal along with Nova Widianto in the badminton mixed-doubles event in Beijing. Thailand, which has a good record in boxing and weightlifting, might struggle to repeat its two-gold haul from Beijing, but maintains that at least one gold is still achievable for the county, according to Sports Authority of Thailand governor Kanokphand Chulakasem, the Thai news website The Nation reported on July 20. The Thai squad will be composed of 37 athletes in 20 disciplines in London including 2004 Olympic weightlifting champion Pawina Thongsuk and Buttree Puedpong, who clinched the silver medal in Beijing in taekwondo. Thailand has managed to win at least one gold in every Olympics since 1996, according to the report. Thai flyweight veteran Somjit Jongjohor and weightlifter Prapawadee Jaroenrattanatarakoon, who brought home Thailand’s gold medals from Beijing, will not defend their Olympic titles since the former has retired while the latter was dismissed from the team earlier this month, according to a July 18 report from The Nation. Meanwhile, among the Singaporean athletes that will compete in London is 2008 team table-tennis silver medalist Feng Tianwei, and Tao Li, the first Singapore swimmer to reach an Olympic final, according to Singapore news website Todayonline.com. Philippine Olympic medal hope. Sports officials from the Philippines said light-flyweight boxing contender Mark Anthony Barriga, 19, is the country’s main hope for gold

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at the London Games, according to a report from Agence France-Presse posted on ABS-CBN news website. Philippine Sports Commission (PSC) Chairman Richie Garcia remarks on Baringa: “He has a very good chance of winning in his weight category. He seems to have the spirit and determination to win.” The Philippines has an impressive record in professional boxing, with two current world champions -- Manny Pacquiao and Nonito Donaire – but the Philippines has not won a medal in the Olympics since the 1996 Atlanta Olympics. In a July 7 Senate press release, Senator Edgardo J. Angara, Chair of the Senate Committee on Education, Arts and Culture, urged the government to provide adequate support to Filipino athletes competing in the 2012 Olympic Games in London. Aside from Baringa, other Filipino athletes that have qualified for the London Olympics are: tracsksters Marestella Torres and Rene Herrera, swimmers Jasmine Alkhaldi and Jessie Lacuña, shooter Brian Rosario, weightlifter Hidilyn Diaz, BMX rider Daniel Caluag, judoka Tomohiko Hoshina, and archers Mark Javier and Rachel Cabral, according to the Senate press release. According to the press release, Angara authored Senate Bill No. 48, also known as the “Philippine Sports University Act of 2010,” which seeks to create an institution to oversee the welfare of the athletes in the country, ensuring world-class training and development. Angara said: "Our Filipino athletes bring us great pride from international sporting events such as the Olympics despite our country's great lack in sports infrastructure and policies.” The legislation is still pending in the Senate. In a 2011 report on Interaksyon, the online news portal of TV5, PSC Chair Garcia said that Philippines spends only P600 million a year for sports. Inadequate funding, he says, remains the reason why Team Philippines finished sixth in the 2011 Southeast Asian games with 36 gold medals, the lowest output of the country since bagging just 31 gold medals in the 2001 Kuala Lumpur Games. Garcia also said that the national budget for sports in the country pales in comparison to other Southeast Asian countries, whose governments spend more for their programs such as Singapore which spends the equivalent of ₧4.8 billion for its sports programs.

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The quest for Olympic gold in London

from Dartmouth University’s Tuck School of Business at Dartmouth and Meghan Busse from the University of California-Berkeley’s Haas School of Business, the country benefits from hosting the Olympic Games since the cost of attending Olympic events is minimized. The host nation also has the opportunity to tailor the facilities to meet the demand of the athletes and it also has a big influence in terms of addition of new sports to the sporting event, according to the study. Athletes will also be motivated if they are competing in front of their loved ones, it added.

THE HOME TOWN ADVANTAGE

The Host Nation Has Won 54% More Medals, on Average, Than It Typically Does 200 160

Average no. of medals won when not hosting No. of medals won when hosting

120 80

“Our forecasts reflect two very clear patterns revealed in our analysis. First, countries with superior growth environments and higher incomes are expected to win more medals, and, second, there is also a marked host effect that will likely bump up the number of medals,” according to the report. State support and specialization. Goldman Sachs says aside from income, factors related to the local sports culture, facilities and infrastructure, as well as training and focus, which facilitates the improvement of sports performance, makes the richer countries more prone to Olympic success.

Average

Germany

Canada

Russia

South Korea

Spain

U.S.

Ausralia

Likewise, PwC, in its aforementioned analysis, says that policy-related factors such as the state and corporate funding of Olympic athletes influence a country’s Olympic performance. However, the firm said that high levels of corporate Source: “The Olympics and Economics 2012,” Goldman Sachs, p.5 sponsorship might also help explain In a July 11 research report that explores links why the U.S. -- home of Olympic swimming between economics and the Olympic Games, champion Michael Phelps, who won eight gold “The Olympics and Economics 2012,” global medals at the 2008 Beijing Games – is expected investment banking and securities firm Goldman to win the most medals. Sachs reported that over the past 10 Olympics, the host nation has won 54% more medals on Moreover, according to PwC, specialization average than it has won in Olympic games it did can help countries win Olympic events. “While not host. “Overall, our model estimates suggest outstanding athletes in large countries like the that home country advantage should on average US, may be spread across a very wide range of boost medal share by around two percentage Olympic and non-Olympic sports, there may points, which might translate to around 19 extra be more of a tendency for athletes in smaller medals for Britain in 2012.” countries to specialize in a narrower range of disciplines where there is a local track record Based on Goldman Sachs’ medal projections in of success,” its report said, citing long-distance the upcoming London Olympics, the U.S. (108 running for Kenya or sprinting for Jamaica as medals) is expected to lead all countries, followed examples. Based on the 2008 Olympic Games by China (98), Russia (74), Great Britain (65), medal tally, Kenya ranked 18th with 14 medals, Australia (46), France (41), Germany (41), South while Jamaica placed 20th with 11 medals.

Greece

China

Korea (31), Italy (30) and Ukraine (27). These 10 countries will likely capture more than half of all medals available at the Olympic Games, according to the firm’s analysis.

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NEWS ON THE NET World

Reuters exclusive: Kim to reform North Korean economy after purge - source

bias, which, if anything, is “becoming more deeply entrenched,” as one of the reasons why the fund failed to deliver on its surveillance of the global economy. Referring to Christine Lagarde, the IMF’s first female managing director, "even the current incumbent is tainted, as neither her gender, integrity, or elan can't make up for the fundamental illegitimacy of the selection process."

In efforts to save its decaying economy, North Korean leader Kim Jong-un and his uncle purged the country’s top general for opposing change, according to a source with ties to both Pyongyang and Beijing, as cited in a July 20 Reuters exclusive. The story cites the source in reporting that the cabinet had created a special bureau to take control of the economy from the military, with the country gearing to experiment with agricultural and economic reforms after the purge. With the downfall of Vice Marshal Ri Yong-ho and his allies, the young leader and his uncle Jang Song-thaek now have the mandate to save the battered economy and prevent the collapse of the regime.

Departing IMF economist blasts fund for eurozone 'failure'; Lagarde is 'tainted'

Recent changes could herald the most significant reforms by North Korea in decades. If reforms take root, North Korea would be the next pariah state to open up after Myanmar. It should be noted that previous attempts at a more market-driven economy have floundered in the past. In late 2009, a drastic currency redenomination triggered outrage and is believed to have resulted in the execution of its chief proponent. The source’s revelation is also viewed as an indication of a power struggle in the state, with Kim Jong-un and Jang appearing to have further consolidated political and military power. With his ascent to power following his father Kim Jong-il’s death in Dec. 2011, many believe the young leader is illequipped to deal with the challenges confronting North Korea.

A senior economist has left the International Monetary Fund (IMF) and lambasted the institution’s lack of leadership and claimed the incumbent IMF chief is not fit for the job. Peter Doyle, a 20-year veteran, says in a letter obtained exclusively by CNN that he is “ashamed to have had any association with the Fund at all.” Doyle is a former advisor to the IMF’s European Department, which runs its programs for Greece, Portugal, and Ireland. He argues that much of the widespread suffering for those living in crisis-stricken countries is due to the failure to deliver timely and sustained warnings to the region’s dithering politicians. He writes, "The fund for the past two years has been playing catch-up and reactive roles in the last ditch efforts to save it.” According to IMF insiders who do not wish to be named, the former division head for Israel, Sweden, and Denmark was widely respected within the organization. Doyle cited European

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Last year, Lagarde replaced disgraced colleague Dominique Strauss-Kahn amid the latter’s involvement in a criminal case regarding allegations of sexual assault and attempted rape made by a hotel maid. A trained lawyer, Lagarde’s appointment came as no surprise for many observers.

Colorado shooting: 12 dead at Batman screening At least 12 people are dead and dozens injured after a shooting at a movie theater in Denver on Friday. The gunfire broke out during the screening of the movie The Dark Knight Rises. Moviegoers saw the shooter “released some sort of canister.” Aurora Police Chief Dan Oates continued, “They heard a hissing sound, some gas emerged and the gunman opened fire.” Colorado police say they have arrested 24-year-old suspect named James Holmes, who did not resist nor put up a fight. The suspect was believed to have three weapons and a bulletproof vest in his possession.The police also found no evidence that there was more than one shooter. U.S. President Barack Obama said in a statement that he and wife Michelle were “shocked and saddened by the horrific and tragic shooting in Colorado.”

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Cities Going Green: Technological Solutions to Mitigate Climate Change

STRATEGY POINTS The future is remarkably urban: by 2050, 70% of the world’s population will live in cities Cities are a part of the climate-change problem, but are also key components of the solution TCR features several cities that harness technology to achieve sustainability

centers of economic activity, education, and science and technology, it is little wonder that the world’s cities are finding innovative solutions to the threats posed by climate change. One of them is Singapore, which recently unveiled its “Supertrees,” giant solar-powered vertical gardens that are a tall testament to the city-state’s commitment to environmental sustainability. Many other cities are also harnessing technology to fight climate change. Aside from immediate improvements to the quality of life of its residents and long-term benefits to the environment, some of these urban centers have found that efforts to become greener and

smarter translate to significant savings as well. Here are some of the cities and technologies that are doing their part in securing a better future for the planet. Singapore’s solar-powered ‘Supertrees.’ Located in the Bay South Garden, which was opened to the public on June 29, the 250-acre landscape project called Gardens by the Bay features 25- to 50-meter high “Supertrees” capable of generating solar power, collecting rainwater, acting as air venting ducts for adjacent structures, and hosting more than 162,900 plants of over 200 different kinds of orchids, bromeliads, ferns, and tropical flowering climbers.

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Cities going green: Technological solutions to mitigate climate change 30

Each giant tree is made up of a concrete core, a trunk, planting panels, and a canopy that provides shade during the day and a light-and-sound display at night. There are 18 in total: 12 found in the Supertree Grove, and six in other areas of the Gardens. There is a 128-meter walkway connecting the two 25-meter Supertrees, and a bistro sits atop a 50-meter-tall tree.

Hong Kong’s first zero-carbon building. Along Sheung Yuet Road in Kowloon Bay stands a three-story, 14,700-square-meter building that promises carbon neutrality via the use of solar panels, the production of biodiesel made from waste cooking oil, and a design that features improved ventilation, says a news release from the developer, the Hong Kong Construction Industry Council.

Gardens by the Bay also features two climate-controlled biomes – the Flower Dome, which houses flora from the Mediterranean regions, and the Cloud Forest, with its 35-meter-high mountain and indoor waterfall – as well as two lakes.

The building, which is said to be 45% more energy-efficient than standard structures, was developed in partnership with the local government and is slated be officially open to the public in September.

The master plan for the sprawling urban oasis was a product of a design competition organized by the Singapore National Parks Board in January 2006. The winning entries were from U.K.-based design firms Grant Associates and Gustafson Porter.

Some doubt, however, that this will start a trend. Sam Hui, professor of mechanical engineering at the University of Hong Kong, tells web magazine Smart Planet, “I think in Hong Kong, this project will be the only one… Most buildings in Hong

This animation produced by Gardens by the Bay shows a Supertree being constructed Source: Video uploaded to YouTube by Gardens by the Bay

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31 Kong are high-rises, where energy intensity is high and zero carbon is hard to achieve.” For now, the effort is commendable, but it still remains to be seen whether low-rise, carbon-neutral buildings will gain traction in places like Hong Kong, where space is scant and expensive. Amsterdam’s lake water airconditioning. The marriage of technology and natural resource allows the Dutch capital to cool its buildings with 70% less carbon-dioxide emissions than the amount generated from conventional cooling methods, according to a case study from C40 Cities Climate Leadership Group.

Why cities should lead the way Over half of the world’s 7 billion people live in cities, according to the United Nations’ “World of Urbanization Prospects Report 2011.” By 2050, the proportion will balloon to 70%, with 6.3 billion out of 9.3 billion people living in urban areas. This means that cities will bear the brunt of absorbing most of the population growth that will occur over the next four decades, and will have to deal with a significant number of people relocating from rural areas as well.

URBAN POPULATION PROJECTIONS TO 2050

Launched in 2006 by utility company Nuon, the project generates 60 megawatts of cooling power to provide air-conditioning to buildings located in Zuidas, a rapidly developing business district. The system employs a process called “deep water source cooling,” where cold water from 30 meters below the surface of the man-made lake, Nieuwe Meer, is pumped into a transfer station where, with the help of a compressor-cooling machine, it cools the water inside the pipeline that services Zuidas customers. Once delivered to the customers’ buildings, the water travels to the in-house installation, which then cools the air. A second sustainable cooling station was opened in 2010 for customers in the Amsterdam-Zuidoost district, according to a press release by Nuon. Similar systems are in place

Percentage of global population living in cities will continue to grow Source: “Cities and Climate Change: An Urgent Agenda,” 2012, The World Bank, page 16

This rapid urbanization spells an increase in activities that exacerbate climate change, but also opens up opportunities to fight it. Several studies – “Competitive Cities and Climate Change” (2009, The Organisation for Economic Cooperation and Development), “Cities and Climate Change: An Urgent Agenda” (2010, The World Bank), and “Global Report on Human Settlements” (2011, United Nations

CONTENTS BUSINESS NATION WORLD TECHNOLOGY HEALTH/LIFESTYLE

Cities going green: Technological solutions to mitigate climate change

Source: Infographic, “Why cities? Ending climate change begins in the city,” C40 Cities Climate Leadership Group

Human Settlements Programme) – highlight the inextricable link between cities and climate change and why cities should be involved in adaptation and mitigation efforts. It is not only because they contribute significantly to climate change through energy consumption, greenhouse gas emissions, and waste production, among other things, and are themselves highly vulnerable to extreme weather patterns given that many cities are located in coastal areas. City-level efforts will have immediate benefits to residents and, collectively, will give a substantial push to the global action towards sustainable development. As hubs of commerce, innovation, and culture, cities are also a good source of novel ideas on how to make the planet greener, says C40, a global network of megacities committed to addressing

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climate risks.There has been substantial progress in achieving green objectives related to green space, water pollution, and recycling, according to “Going Green: How cities are leading the next economy,” a survey of 53 city governments around the world and their efforts to transition to a green economy, conducted by LSE Cities at the London School of Economics and Political Science. Energy security, air pollution, and resource efficiency issues prove to be more challenging, say the respondent cities. Also, while 75% of cities are willing to invest in new green technology, two-thirds report budget constraints. With the 3% increase in global greenhouse gas emissions in 2011, based on findings of the 2012 report by the PBL Netherlands Environmental Assessment Agency and the European Commission’s Joint Research Center, the task of cleaning up our act becomes all the more urgent.

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Cities going green: Technological solutions to mitigate climate change

in Toronto, Canada, and Cornell University in Ithaca, New York. Philadelphia’s solarpowered trash compactors and recycling containers. By replacing downtown Philadelphia’s 700 ordinary wastebaskets with 500 solarpowered trash compactors and 210 singlestream recycling units, the city slashed by 70% the annual operating costs related to trash collection and management, according to a case study by BigBelly Solar, makers of the innovative trash receptacles.

Radio Netherlands Worldwide talks with Hank Dekker of Dutch utility company Nuon, and takes a tour of the facility that cools buildings in Amsterdam using lake water Radio Netherlands Worldwide

SAVINGS FROM PHILADELPHIA TRASH COLLECTION IMPROVEMENT, 2009 Before

After

Savings

Collection Frequency

17/week

5/week

24 (73%)

Number of Shifts

2 (67%)

Number of Workers

12/week (71%)

that triggers the mechanism to compact the contents in order to accommodate more trash. The compactors also feature a wireless monitoring and notification system, allowing operators to check on the bins’ fullness level using a computer connected to the Internet. Attached to the compactor is a regular recycling bin for easy segregation.

Sustainability through Annual $2,300,000 $720,000 $1,580,000 Operating (67%) technology. Cost With the urban Cumulative $23 million $10 million* $13 million population expected 10-year cost (70%) to almost double in *including the cost of the solar compactor and recycling equipment the coming decades, “BigBellys” reduce Philadelphia’s trash management cities must do their costs by 70% part in preventing Source: “City of Philadelphia Case Study: Cost-savings from solar-powered compactors for trash and recycling,” 2009, and managing BigBelly Solar, Inc., page 4 the ill effects of rapid urbanization particularly on the environment. Technology offers a way to help cities mitigate and adapt When the level of trash in a compactor reaches to climate change, whether through new a certain level, it hits an electric-eye beam inventions or novel ways to use existing ones.

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NEWS ON THE NET Technology

12 more universities join Coursera to offer free online courses

MIT and Harvard have also teamed up to launch a similar project called edX, with classes set to be begin in the Fall of 2012.

Coursera, the startup that offers free online courses from Princeton University, Stanford University, University of Pennsylvania, and University of Michigan, announced on July 17 that 12 more universities have joined the team, including California Institute of Technology, Duke University, Johns Hopkins University, École Polytechnique Federale de Lausanne in Switzerland, and University of Edinburgh in the U.K. Founded by Stanford University professors Daphne Koller and Andrew Ng in 2011, Coursera offers a wide range of courses, such as “Fundamentals of Pharmacology,” “Listening to World Music,” “Functional Programming Principles in Scala,” “Greek and Roman Mythology,” “and “Cryptography.” These usually take several weeks and anyone with an Internet connection can sign up. Modules are taught using video lectures and students get to interact with each other via online forums.

Introductory video to Coursera YouTube

Koller, who spoke at TEDGlobal in June, believes offering the best education to everyone around the world would enable lifelong learning, establish education as a fundamental human right, and open the door to innovation.

Another player in the global classroom game is Udacity. Founded by three roboticists, Udacity’s courses are more science and technology-oriented.

However, the interface needs to be more user-friendlybefore it can be used commercially, and, as with all security systems, it isn’t entirely safe from hackers. According to the news report, “For these reasons, Bojinov says it is more likely to find applications in high-risk scenarios when the code-holder needs to be physically present, such as to gain access to a nuclear or military facility.”

For a more detailed account of Neurosecurity the experiment, download the full promises a password research paper. you can use without knowing it Third-largest botnet in the world A new technique that combines knocked offline neuroscience and cryptography promises to take security to new cerebral heights.

Based on a process known as “implicit learning,” in which people learn patterns unconsciously, volunteers to initial tests were able to learn a password and use it, but when asked afterwards, could not identify it. Stanford University researcher HristoBojinov and his colleagues devised a game in which players must intercept falling objects, which appear in one of six positions, by pressing a key. Although the objects’ positions seemed random, “hidden within the game was a sequence of 30 successive positions that was repeated over 100 times during the 30 to 45 minutes of game play,” reports New Scientist.” Researchers found that players made fewer errors when they encountered the sequence on subsequent rounds, suggesting an unconscious learning process that can be harnessed to form the foundation of a security system.

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A botnet known as “Grum” that is responsible for 18% of email spam all over the world has been shut down completely as of July 18. “Grum” is a four-year-old network of hundreds of thousands of infected computers sending out spam worldwide. The announcement was made by AtifMushtaq of FireEye, a U.S.-based network security company, on the company’s blog. Mushtaq led the global collaborative effort to kill the botnet by knocking down all of its command and control (CnC) servers which were located in Panama, Russia, and the Netherlands. Experts believe the takedown will not lead to an overall decline in spam, however. Reports Search Security, the security experts they spoke with believe the shut down will only provide a “short-lived reprieve from spam,” and that the cybercriminals are likely already re-grouping.

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Heroes of the Masses

Dolphy, Erap and FPJ shaped the Filipinoâ&#x20AC;&#x2122;s soul and life By Ricardo Saludo

Dolphy tributes poured in media and online

YouTube

STRATEGY POINTS The triumvirate of movie megastars taught the Filipino hope, nobility and laughter amid suffering Dolphy, Fernando Poe Jr. and Joseph Estrada showed in life and art the ups and downs of Filipinos In shaping how Filipinos think, feel and live, Erap, FPJ and Dolphy are truly artists creating the nation PREVIOUS PAGE

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“D

olphy was a good man who embodied the common Filipino ... Throughout his life, Dolphy showed that hope and happiness always lie at the other side of adversity; he knew that any problem can be overcome through a positive outlook. He did not only revolutionize the entertainment industry; he also changed our national consciousness for the better: through his art, he extended our worldviews, and gave us the ability to reflect on, value, and find joy in the daily realities of Filipino life.”

during the harsh 1941-44 Japanese occupation, the future comic megastar slaved in menial trades from shoeshine boy and button sewer to shop hand and coachman. That difficult period gave him much experience to draw on in portraying much-loved poor characters in his movies and TV shows, most especially the John en Marsha and Home Along the Riles series.

‘He embodied the Filipino, and the Filipino attitude toward life. He was a survivor’

So declared President Benigno Aquino III in his statement on the passing of Rodolfo ‘Dolphy' Vera Quizon Sr. at age 83 on July 10, idolized by millions of Filipinos -Amelia H. for his decades of film and TV comedy. Indeed, as the Palace rightly expounded, Dolphy made his legions of fans see “hope and happiness” amid their own hardship and pain, and thus “find joy in the daily realities of Filipino life.” In her tribute to the comedian, titled after his slanged nickname, “Pidol the Pinoy,” Business World columnist Amelia H.C. Ylagan echoed President Aquino’s statement. She saw Dolphy's comic artistry “as a positive coping with the limitations of life, rewarded with a happy ending. ... Comedy is an honest and positive attitude, and a 20-20 vision of life, Dolphy taught us in his various funnyman roles.”

In the same vein, two other giants of Philippine entertainment in the past halfcentury personified on the screen the poverty, oppression and hopes of the Filipino masses who mobbed their movies. The late action superstar Fernando Poe Jr., FPJ to his fans, C. Ylagan portrayed both human and superhuman heroes defeating powerful villains. As shown in a typical climactic scene from Poe’s most popular film series, Ang Panday (The Blacksmith), the characters he portrays rescues their people from malevolent forces.

The suffering Filipino onscreen. Ylagan summed up: “He embodied the Filipino, and the

Poe’s lifelong buddy and fellow action star Joseph “Erap” Estrada also battled criminals and oppressors, though rarely with magical powers. Rather, he used his bare fists, dodging and enduring blows, blades and bullets to somehow win in the end. But more than triumph over evil, Erap's most endearing trait in his fans’ hearts is the capacity of his characters to undergo suffering with dignity and nobility. Thus, in Estrada the sufferings of his adoring masses are ennobled, while still holding the promise of eventual deliverance. That not

Filipino attitude towards life. He was a survivor, having lived his 83 years in step with the history of the struggling country during and in the protracted aftermath of World War II.” Indeed, as one YouTube tribute to Dolphy recounts,

only propelled Estrada to the presidency, but sustained his popularity through his ouster, arrest, trial and conviction for corruption, even elevating him to second place after Aquino in the 2010 presidential race.

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37 In early 2001, Estrada’s fall from power and incarceration on plunder charges struck a chord of empathy among his legions of admirers, thousands of whom marched to the Palace on the eve of May 1 in protest against his arrest. In her first State of the Nation Address two and a half months later, then-President Gloria Arroyo acknowledged “the feelings of the segments of our masa [masses] who have continued to identify with his [Estrada’s] personal circumstances.” Erap's pains mirrored those of countless Filipinos. In sum, therefore, Dolphy, Erap and FPJ captivated generations of Filipinos, especially among the underprivileged, not only by leveraging their thespian talents, but also by making the people’s own burdens more bearable by Poe’s promise of deliverance, Estrada’s ennobling endurance of pain and injustice, and Quizon’s capacity to laugh amid poverty and foibles. Or rather, such traits in the characters they portrayed.

As for the comic element, Kenny adds, “Philippine comedy films are adaptations of bodabil [stage show] which in turn was adapted from [American] vaudeville and burlesque ... grounded in slapstick and physical humor ... earthy and vulgar with a healthy sprinkling of sexual and ‘toilet’ humor.” Moreover, many local films and performers styled themselves as Filipino versions of Western stars and blockbusters, from local James Bond pretenders to movie and TV titles which at puns on foreign ones, like Home Along the Riles, taking off from the hit comedy film Home Alone. That colonial legacy in Philippine theater gave rise to the three main genres for local films cited

Colonial-era movie In the 1980 film Aguila, Poe played a leader in the revolution formulas. In his essay, against Spain YouTube “Tagalog Movies and Identity : Portrayals of the Filipino Self,” Chinese University of Hong Kong (CUHK) by Kenny: the action movie, the melodrama, professor James Kenny traced the action, and the comedy. “Most movie stars, and even drama and comic strains of Philippine film’s directors and writers, will work exclusively in fabled triumvirate to past theater forms one of these genres, since their public images inherited from colonial times. The Spanish-era are firmly built around one of these three zarzuela romantic musical, komedya verse pillars of the local movie industry.” Which also drama (mostly about Christian-Muslim wars explains why FPJ, Erap and Dolphy separately in medieval Europe), and cenaculo Lenten Passion plays imbued Philippine theater with a centuries-old taste for intense emotion, song and dance, and even blood and gore.

ruled action, drama and comedy in their day, rather than straddling these cinematic forms. Moreover, given the historic roots of their entertainment formulas, it is no wonder that

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the three stars enjoyed wide and deep appeal among Filipino audiences for decades. Escapist or edifying? That Quizon, Estrada and Poe gave much joy to generations of Filipinos is unquestioned. Still, escapist entertainment is how some academics and self-styled serious filmmakers label movies and TV shows that give the masses hours of laughter, tears and action-adventure to forget momentarily their real-life woes. And some see a problem in that. Psychology professor Patricia Licuanan, now chairing the Commission on Higher Education (CHED), wrote in “Building a People, Building

extreme personalism and family-centeredness, putting highest value on ties with friends and relatives; lack of discipline, self-analysis and self-reflection; colonial mentality, giving higher regard to foreign products and culture; and the kanya-kanya syndrome, also called the crab mentality of trying to get ahead of others. Many of these traits show up not only in movies and TV shows, but also in the off-screen lives of entertainment stars, from their kilometric entourages of hangers-on (personalism and family centeredness) to a taste for the good life (lack of discipline and self-analysis) and trips abroad (colonial mentality). During his presidency, Estrada was portrayed as showing several of these traits in his “midnight cabinet” of friends drinking Johnnie Walker Blue Label whisky.

On the other hand, Licuanan’s list of Filipino character strengths are also mirrored in the reel as well as the real worlds of Philippine entertainment. These traits include: pakikipagkapwa-tao, Estrada as Manila’s Tondo gangster Asiong Salonga in with high regard for 1961 film YouTube how others feel and think; family orientation, a positive a Nation,” Chapter 4 of Values in Philippine trait in moderation; joy and humor even in the Culture and Education: “The tendency of midst of adversity; flexibility, adaptability and media to produce escapist movies, soap operas, creativity; hard work and ability to survive; comics, etc., feed the Filipino’s passivity. Rather and faith and religiosity. than confront our poverty and oppression, we fantasize instead.” The last trait often feeds the others, with the bahala na (“leave it to God”) syndrome of Along with passivity and lack of initiative, longtime Miriam College president and Ateneo de Manila professor Licuanan cited other weaknesses of the Filipino character:

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relying on heaven’s help in dire straits prodding the Filipino to work hard, be brave, adapt and laugh in the face of tough odds. Christianity also teaches love for others, which often manifests as

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Heroes of the masses

caring for clan and community, and sometimes cronies too. Besides movie stars, boxing champion Manny Pacquiao has also shown Filipino faith, industry, flexibility and drive to survive.

subjectivity.” Tolentino was writing mainly about overseas contract workers, but the same hero impact would apply to any Filipino who looks up to certain figures as heroes to admire and emulate.

Learning from the stars. It is this impact on the nation’s perspectives and ways that is the paramount value given — or detracted — by Dolphy, Erap, FPJ and other mediagenic stars who are seen as exemplars by the masses. French anthropologist Nicole Revel, who did extensive Philippine research with Ateneo, underscored the same impact of hero figures on the national mind. In her study of 66 native epics, cited in a 2006 article by University of the Philippines Film Institute scholar Ronald Tolentino, Revel explained: “In more complex societies [than ancient cultures], the hero becomes an emblem of the group, at the ethnic or even the national level.”

This, then, is the crucial social and historic role played by Philippine movie giants like Dolphy, Erap and FPJ: shaping the perspectives and ways of millions of their countrymen and women across the archipelago, for better or worse. Indeed, in this way, cinema’s triumvirate are creating and recreating no less than the national mind, heart, soul and way of life.

Tolentino’s paper added that heroic figures shape how people view their lives: “What is central, of course, in the perception of current Philippine reality is the transposition of the exemplary epic hero into the ‘ordinary’ life and

In this sense of shaping the nation’s consciousness and life, Quizon’s comedy, Estrada’s dramas and Poe’s epics are in fact doing to the Filipino what any artist does to his medium. Therefore, while film experts and artists may debate whether the quality of Dolphy, Erap and FPJ’s output warrant national recognition, their molding of how generations of Filipinos see and live their lives, makes them literally artists of the nation, creating how Filipinos think, live and are. Indeed, National Artists in the fullest sense.

CONTENTS BUSINESS NATION WORLD TECHNOLOGY HEALTH/LIFESTYLE

NEWS ON THE NET Health/Lifestyle

Phone app identifies skin cancer warning signs A university in the U.S. has developed a free mobile phone app, which allows users to have images of their suspicious moles, spots and skin lesions analyzed via a step-by-step skin self-exam. The UMSkinCheck app, created by scientists from the University of Michigan Health System, guides users through a series of 23 photos, covering the body from head to toe. Photos are stored within the app and serve as a reference for future comparisons. The app then sends automatic reminders so users can monitor changes to the skin over time and encourages them to repeat a skin self-exam on a regular basis. The app also offers a risk calculator that allows the users to determine the odds for developing skin cancer. According to information on the university’s website, UMSkinCheck also allows users to download informational videos and literature and locate a skin cancer specialist.

AIDS deaths worldwide drop as access to drugs improves In a report released this month, the United Nations AIDS program said that the number of worldwide AIDSrelated deaths fell to 1.7 million

The

last year -- down from a peak of 2.3 million in 2005 and from some 1.8 million in 2010. That decline has been fueled by greater access to the medications that help more people live with the disease. An estimated 8 million people in lowand middle-income countries are now receiving antiretroviral drugs. The U.N. estimates that about 34 million people are living with the human immunodeficiency virus (HIV) that causes AIDS. The U.N. has set a target to raise that to 15 million people by 2015. According to the U.N., funding for HIV prevention and treatment totaled $16.8 billion last year. The U.N. estimates that another $5 billion is needed to reach its 2015 goals.

U.S. doctors: Milk doesn’t help protect kids’ bones A national doctors group has petitioned the U.S. government to remove milk as a required food group from the National School Lunch Program, the federally assisted program that provides lunch to public school students saying that milk doesn’t help protect kids’ bones. The promotion of milk to help build strong bones in kids is, “in effect, the promotion of an ineffective placebo,” writes the Physicians Committee for Responsible Medicine (PCRM) in its July 19 petition, which was submitted to the U.S. Department of Agriculture’s Food and Nutrition Service. “Milk is high in sugar, high in fat and high in animal protein” — all

cenSEI Report

• July 23-29, 2012

of which counters its purported benefits to bone health, the committee argues. The PCRM notes that dairy products, including milk, are the primary source of saturated fat in Americans’ diets. Moreover, for millions of Americans who are allergic to milk — including 1.3 million children — or intolerant to the lactose it contains, drinking milk carries potentially severe health risks, according to the committee.

Gradual exposure to egg cuts allergy risk Gradual exposure to egg white over about two years can reduce and sometimes eliminate a child's allergy to the food, according to a new study. Eleven of 40 children completely lost their hypersensitivity to eggs after an experimental treatment for food allergies called oral immunotherapy, which aims to gradually desensitize people with food allergies by exposing them to higher and higher doses of the allergen. Most showed a significant reduction in sensitivity, even if it faded one month after the researchers stopped exposing the youngsters to small amounts of egg protein powder. However, more research is needed to improve the success rate and develop the safest procedure, said Dr. Robert Wood, director of allergy and immunology at Johns Hopkins Children's Center and one of the study's authors.