TCR Volume 2 Issue No 32 by The CenSEI Report

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Strategic Analysis and Research by the

Center for Strategy, Enterprise & Intelligence It is unmanly to refuse battle with the devil ~ Senate Majority Floor Leader Vicente Sotto III, quoting Mahatma Gandhi, in his August 15 speech against the Reproductive Health Bill

He must be very spineless to not be able to be man enough to just say ‘I’m sorry,’ How hard is that to do? He should take responsibility for his staff as any leader would ~ American blogger Sarah Pope in Radyo Inquirer interview, commenting on Volume 2 - Number 32 • Aug. 20-Sept. 2, 2012 Sotto’s refusal to apologize for his staff copying from her article

NATION

3 Power to the People — But at What Cost?

Over a decade since its enactment, the Electric Power Industry Reform Act has yet to deliver its promise of more affordable electricity. What’s the problem and what can be done? • Electricity governance: More transparency and public participation, please

WORLD

13 Syria After Assad

The strongman isn’t expected to go anytime soon, but affected countries and geopolitical think-tanks are mapping out endgame options nonetheless • The regional fallout: What Assad’s exit would mean for Iran and the so-called “axis of resistance” • Securing OFWs: Up to 9,000 Filipinos could still be in Syria, despite a mandatory repatriation order and a freeze on entry visas since April

BUSINESS

19 Turning Wide Waists into Fat Profits

With half a billion obese people worldwide, a whole industry to help them slim down has grown with the numbers • Untruth in advertising: Beware of false claims in weight remedies • Gut-wrenching tours: Asian hospitals offer cut-price stomach surgery • Pills for the portly: Anti-obesity drugs make a comeback

TECHNOLOGY

25 Can Computers Create and Innovate?

Artificial intelligence is penetrating art, music, literary writing, film and photography. What’s ahead for computer-assisted creativity? • The creative formula: How algorithms compose and write • Click and shoot: Enhancing news photos? No way, says a pro

HEALTH/LIFESTYLE

31 The Indie Way to Filipino Film Resurgence

Independent films are giving Philippine cinema a long-overdue and much needed boost, with box-office stars crossing over to make lower-budget, but higher-quality and socially relevant movies • Turning poverty into art: Are filmmakers exploiting the poor? • Director’s gallery: From Lino Brocka to Raya Martin, who’s who in indies

CONTENTS

NATION

WORLD

BUSINESS

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.

The Frontiers and Failings of Modernity’s Magic Democracy. Private enterprise. High-tech. Low-fat. Over the past three decades or so, these buzzwords have been ringing louder and louder across the globe and in everyday lives of people everywhere. Since EDSA People Power in 1986, dictatorships have bit the dust, from Iron Curtained Eurasia and army-controlled East Asia to Arab Springed Middle East and North Africa. Statist economies have given way to market forces, even in China, where the Communist Party maintains political control, but has let market forces flourish. Technology rules the globe, linking billions by phone, text, email and Facebook. And if the excesses of modern life weigh down on humankind, commerce offers an answer too: the goo and gadgets that promise to slim the under-exercised over-indulgent. This fortnight The CenSEI Report delves into these themes of modern life and shows their smooth and seamy sides alike. Syria’s bloody struggle against autocracy stirs many a freedom-loving heart across the planet, but its many months of carnage, with upwards of 23,000 lives claimed, must give pause even to the most rabid democrat. Plainly, if alternative leadership is lacking and global support isn’t solid, freedom’s birthing is far from assured or even advisable. Free enterprise is another battlecry of modernity, as big government has been in many places proved inefficiency, incompetence, corrupt or all of the above. But privatization has its own broken promises of efficient service at low cost. That’s the lesson from our assessment of the Electric Power Industry Reform Act of 2001 eleven years after. For rather than cutting power rates and state debts, Epira has seen them rise along with consumer and business frustration over costlier current. Also showing the limits of modern-day magic are the articles on the global business of battling the bulge, and on the aspirations of artificial intelligence to replicate human creativity and innovation. For sure, billions of dollars are made in the shops, clinics and off-the-counter remedies marketed to hundreds of million of people seeking to shed bulk (which, by the way, cost billions more to put on). Yet these quick-and-easy fixes often never deliver because the war on weight cannot be won without sweat and temperance. As for computerizing creativity, promise again falls short of performance. Maybe it was too much to ask that the electronic creature match, let alone outdo, its human creator. Still, like Dr. Frankenstein, today’s techno-minds have their own fascination with replicating humanity, though it's hard to imagine circuits doing the indie films extolled in Health/Lifestyle. As always, The CenSEI Report shall show the frontiers of today’s ideas and trends — and their failings.

NATION

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Power to the People â&#x20AC;&#x201D; But At What Cost? After 11 years, the Electric Power Industry Reform Act still struggles to cut rates and debts By Jerome Balinton

STRATEGY POINTS

The upward trend of electricity rates must be stanched to unburden consumers and boost national competitiveness Amending Epira is needed to end crossownership between power generation and distribution companies A more open electricity market will not only cut monopoly profits, but also lure much needed generation capital

CONTENTS NATION WORLD BUSINESS TECHNOLOGY HEALTH/LIFESTYLE

Power to the people — at what cost?

ince January, 4.8 million homes, shops, offices and factories serviced by Manila Electric Company have faced rising charges. The incessant upward trend reflected the unstable pricing between power generators and distributors. Meralco, which has the distribution franchise in Metro Manila and some municipalities and cities in Luzon, cut the generation charge in March and May, based on its electricity rates table. But in the other months of the first semester, consumers suffered increases. With the unabated hikes, militants, civil society groups, and lawmakers are united in dismay over the energy situation, said energy and business journalist Amy Remo. In the Philippine Daily Inquirer’s interactive site, Remo wrote that these groups blamed state policy for failing to deliver reliable, affordable power.

That policy is the Electric Power Industry Reform Act of 2001 (Epira, or RA 9136). The Philippine Center for Investigative Journalism (PCIJ) cited it among laws that have “fallen short of their objectives because of a combination of flawed provisions and implementation.” Asian Development Bank consultants Geoffrey Brown, Jose Victor Emmanuel de Dios, and Helena Valderrama wrote in Philippines: Power Sector Profile and Roadmap that problems and delays in Epira implementation have engendered concerns from industry stakeholders. Meanwhile, in a 2008 Philippine Institute of Development Studies paper, “Assessing Competition in Philippine Markets,” Rafaelita Aldaba wrote that the Philippine experience shown that reforms such as trade liberalization, deregulation, and privatization, while necessary, are not sufficient to foster effective competition. In this piece, The CenSEI Report aims to discuss the external factors why electricity rates in the country

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Leftist Bayan group protests Epira near Malacañang Palace in June Kodao/YouTube

remain high by presenting the developments on the power restructuring program of the government. What was the promise and what went wrong? The reform and its promise. In 2001, then-President Gloria Macapagal Arroyo, now a Pampanga representative, signed Epira into law after many years of congressional work and amid protests from some sectors. This legislative measure was built on the principle that restructuring the power sector’s components – generation, transmission, distribution and supply – is the answer to providing the Filipinos a quality, reliable, secure, and affordable supply of electricity. Generation and supply sectors were made open and competitive, while transmission and distribution were regulated. The Epira was supposed to address “high cost of electricity, over contracted capacity supported by takeor-pay commitments from National Power Corporation (NPC) and some private utilities, consistent financial losses and heavy indebtedness of NPC, widespread allegations of corruption and fraud, generationtransmission mismatch, and the non-universal access to electricity at the household level,” according to

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“Electricity Governance in the Philippines, ” an assessment report of global environmental think tank, World Resources Institute (WRI).

disposition, and privatization of NPC generation assets and other real properties with the objectives of liquidating all NPC financial obligations and stranded contracts costs,” per Section 50 of Epira.

However, 11 years on, that promise is far from fulfilled and may have led to what PCIJ considers adverse impacts on labor, consumers, environment, and others. And this compels lawmakers, militant and civil society groups to lobby for amendments to it.

The initial deadline for divestment was 2004, three years after the law took effect, as provided in the Implementing Rules and Regulation Rule 23 Section 4 (i). On other hand, the franchise to operate NPC’s power grid was sold to National Grid of the Philippines (NGCP), a consortium of billionaire Henry Sy’s SM group and the State Grid Corporation of China. The function to manage the Small Power Utilities Group or SPUG, which oversees the missionary electrification of areas off the grid, was the only function left to NPC.

Section 47 of Epira Law deregulated NPC’s generation assets. The Power Sector Assets and Liabilities Management (PSALM) was established to privatize at least 70% of state power plants in Luzon and Visayas along with NPC contracts with independent power producers (IPP) contracts. PSALM was created for the “orderly transition sale,

Total Debt and IPP Obligation of NPC/PSALM as of September 2011

Under PSALM

Under NPC Management and Control 25,000 20,000 15,000 10,000 5,000

Total Debt and IPP Obligations

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

9/3/ 2011

16,387

19,233

22,347

19,490

18,965

18,953

18,598

17,148

16,486

15,820

16,728

IPP Obligations

10,416

11,872

13,627

12,880

12,005

11,704

10,945

10,274

9,525

8,798

8,501

Debt

5,971

7,361

8,720

6,610

6,960

7,249

7,653

6,874

9,961

7,022

8,227

Source: Private Sector Assets and Liabilities Management Corp.

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Power to the people — at what cost?

NPC asset sales reduces its debt and fulfills one condition for competition among generating firms and open access allowing big power users to buy power directly from them. For Quezon City District IV Representative Lorenzo Tanada III and Atty. Nepomuceno Malaluan, Epira’s lone achievement since 2001 is NPC privatization. Other reforms as mandated by the Epira are slow, according to the ADB report. Much NPC debt, which PSALM should settle, remained almost untouched, and in fact, has grown since 2004.

Before the passage of Epira, NPC had debts of $16.39 billion (NPC debt – 5.97 billion; IPP obligations - $10.42 billion), according to PSALM. After years of slow movement, PSALM has accumulated financial obligations totaling $16.63 billion as of end-October, despite the national government assuming ₱200 billion in NPC obligations in 2004. Despite PSALM’s failure to address the financial obligations of NPC, there are already key developments in terms of privatizing NPC’s assets and IPP contracts. As of the end of 2011, PSALM has successfully privatized 79.56% of the country’s generating plants, which is equivalent to 4, 102.00 megawatts in capacity, according to PSALM.

“The liabilities remain with PSALM at almost the same levels,” Tanada and Malaluan noted in their evaluation on the decade-long performance of Epira till 2011. According to PSALM, it incurred new debts to maintain power plants it took over in Luzon and Visayas.

Currency mix of outstanding financial obligations, As of October 31, 2011 Currency

Amount

EUR

169.17

1.02%

JPY

1,514.33

9.11%

5.26

0.03%

PHP

2,971.56

17.87%

USD

11,967.56

71.97%

Total

16,627.88

100.00%

KRW

Source: Private Sector Assets and Liabilities Management Corp.

NPC’s Generation Assets Sold, As of 31 December 2010 Privatization of NPC Assets as of End 2009 • 85.25% bidded out • 76.07% turned over Transfer of NPC-IPP Contracts to IPP Administrators • 37.32% bidded out • 29.60% turned over Source: Regulating Towards a Brighter Future by Raul Tan (2010)

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NPCâ&#x20AC;&#x2122;s Generation Assets Sold, As of 31 December 2010 Power Plant

Rated Capacity (in MW)

Location

Winning Bidder

Winning Bid Price (US$)

Price (US$M/ MW)

Talomo Hydroelectric Power Plant

3.5

Davao

Hydro Electric Development Corporation

$1.37 Million

0.39

Agusan Hydroelectric Power Plant

1.6

Agusan

First Generation Holdings

$1.53 Million

0.93

Barit Hydroelectric Power Plant

1.8

Camarines Sur

Atty. Ramon I. Constancio

$0.48 Million

0.27

Cawayan Hydroelectric Power Plant

0.4

Sorsogon

Sorsogon II Electric Cooperative, Inc.

$0.41 Million

1.02

Loboc Hydroelectric Power Plant

1.2

Bohol

Sta. Clara International Corporation

$1.42 Million

1.18

Pantabangan-Masiway Hydroelectric Power Plant

112

Nueva Ecija

First Gen Hydropower Corporation

$129 Million

1.15

Magat Hydroelectric Power Plant

360

Isabela

SN Aboitiz Power Corporation

$530 Million

1.47

Masinloc Coal-Fired Thermal Power Plant

600

Zambales

Masinloc-Power Partners Co. Ltd.

$930 Million

1.55

Ambuklao-Binga Hydroelectric Power Complex

175

Benguet

SN Aboitiz Power Hydro Inc.

$325 Million

1.86

Tiwi-MakBan Geothermal Power Plants

747.53

Albay, Laguna/Batangas

AP Renewables Inc.

$446.89 Million

0.6

Panay and Bohol Diesel Power Plants

168.5

Iloilo, Bohol

SPC Power Corporation

$5.86 Million

0.04

Amlan Hydroelectric Power Plant

0.8

Negros Oriental

ICS Renewables Inc.

$0.23 Million

0.29

Batangas (Calaca) Coal-Fired Thermal Power Plant

600

Batangas

DMCI Holdings, Inc.

$361.71 Million

0.60

Power Barge 118

100

Compostela Valley

Therma Marine Inc.

$14 Million

0.14

Power Barge 117

100

Agusan del Norte

Therma Mobile Inc.

$16 Million

0.16

Limay CombinedCycle Power Plant

620

Bataan

San Miguel Energy Corporation

$13.5 Million

0.02

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Power to the people — at what cost?

Palinpinon-Tongonan Geothermal Power Plants

305

Negros Oriental, Leyte

Green Core Geothermal Inc

$220 Million

0.72

Naga Land-Based Gas Turbine Power Plant

Cebu

SPC Power Corporation

$1.01 Million

0.02

Angat Hydro Electric Power Plant

218

Bulacan

Korea Water Resources Development Corp.

$440.88 Million

2.02

BacMan Geothermal Power Plants

150

Albay, Sorsogon

Bac-Man Geothermal Inc.

$28.25 Million

0.19

Source: Privatization Updates, Private Sector Assets and Liabilities Management Corp.

Contracted Capacities Sold, As of 31 December 2010 Power Plant

Contracted Capacity

Location

Winning Bidder

Winning Bid Price (USD)

Pagbilao Coal-Fired Power Plant

700 MW

Quezon Province

Therma Luzon Inc.

USD691 Million

Sual Coal-Fired Power Plant

1,000 MW

Pangasinan

San Miguel Energy Corporation

USD1.07 Billion

San Roque Multipurpose Hydro

345 MW

Pangasinan

Strategic Power Devt. Corp.

USD450 Million

Bakun-Benguet hydro plants

100.75 MW

Benguet, Ilocos Sur

Amlan Power Holdings Corporation

USD145 Million

Ilijan Combined Cycle Power Plant

1,200 MW

Batangas

San Miguel Corporation

USD870 Million

Source: Privatization Updates, Private Sector Assets and Liabilities Management Corp.

Likewise, 76.85% contracted energy output from IPPs at the capacity of 3,593.91 MW have been privatized. Why is electricity so costly? “Sixteen years after introducing private sector participation, the Philippine electricity industry is a big mess,” Malaluan and Jenina Joy Chavez wrote in “The ADB and Policy (Mis)governance in Asia,” published by the research and advocacy center Focus on the Global South in 2005.

The

According to the paper, Epira did not stop NPC’s losses. In fact, research by several advocacy groups and the media showed that Napocor’s massive revenue losses and onerous contracts made with IPPs among the reasons why electricity rates in the Philippines are high. One mechanism addressed under Epira was the universal charge, stretched out over 20 years in order to settle NPC’s stranded debts and costs while moderating

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the impact on consumer bills. Stranded contract cost means excess of the contracted cost of electricity over actual selling price of energy in the market. Stranded debt refers to any unpaid obligations of NPC that have not been liquidated by the proceeds from the sale and privatization of its assets.

In sum, IBON argued that power privatization, as allowed by Epira, “has only resulted in putting the sector in the hands of private profit-seeking monopoly interests.” The law, which was enacted amid protests, gave freedom to private corporations to monopolize the trade of electricity, it wrote in its website.

IBON Foundation, a research and education NGO, noted in its assessment on the performance of Epira since 2001, that electricity rates in the country increased because of a host of onerous charges dispersed between the generation charge, transmission charge, systems loss charge, franchise tax charge and generation rate adjustment mechanism. Meanwhile, NGCP recovered some NPC debt before transmission assets were turned over through transmission rate adjustment mechanism. These profit-related reasons and sins of the past are passed on to consumers.

Rep. Walden Bello, in his Philippine Daily Inquirer column dated April 23, 2012, contended that cross-ownership of power producers and distributors allowed by Epira led to “institutionalized oligopoly” and not greater competition as envisioned through the Wholesale Electricity Spot Market (WESM) under Epira.

Mapping the soaring cost of electricity Rappler, a social news network, came out with an animated briefing of why the Philippines has the highest rates of electricity in the country.

Rappler's interactive graphic on power rates

Alecks Pabico, in his 2007 PCIJ feature, cited Ateneo de Manila University economist Aleta Domdom’s view that Epira “only introduced competition at the level of generation, with distributors still remaining monopolistic.” Domination of the power distribution sector by a few companies - led by Meralco, the country's largest distributor - has resulted in unachieved retail competition and unachieved open access. According to the ADB’s Policy and Advisory Technical Assistance paper to the Department of Energy on April 12, retail competition and open access would complete the institution of competition through the entire cycle of power generation and distribution. The paper, which was issued to help the national government in managing consumer protection, said “only by implementing them [retail competition and open access] can competitive pressure on power-generating companies be realized, bringing efficiency to the sector, and ultimately reducing prices, the ultimate goal for consumers.” In another PCIJ report Pabico pointed to WESM as the venue for power generators and sellers to offer their outputs and specify their prices to buyers. But there have been trading glitches. In November 2006 the Enforcement and Compliance Office of the Philippine Electric Market Corporation cited PSALM

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Power to the people — at what cost?

Giving the public a say in electricity governance Global environmental think tank WRI argues that the Philippines needs much improvement in all areas electricity governance: transparency and access to information; participation of all stakeholders, especially weaker ones; accountability and mechanisms for redress; and capacity building in institutions of both government and civil society.

Governance Scorecard of Philippine Electricity Sector Governance Principle

Policy Processes

Regulatory Processes

Environmental and Social Aspects

Total Average Score

Transparency and access to information

1.7

2.7

3.3

2.3

Participation

1.0

2.3

2.8

2.3

Accountability and redress mechanisms

2.0

4.0

1.6

2.7

Capacity

2.5

2.9

3.0

2.8

Total Average Score

1.8

3.1

2.7

2.5

Source: Assessment Report: Electricity Governance in the Philippines, World Resources Institute

In its scorecard, WRI found transparency significantly “lacking” and “unable” to draw non-industry players into making reforms, building consensus, and planning for the future. Accountability and redress mechanisms in policy making were also deemed “weak or non-existent,” and even weaker in dealing with environmental and social issues. Regulatory processes scored highest for accountability and redress mechanisms, but still scored poorly in transparency and participation. The environmental and social aspects of the electricity sector were assessed “highest” in access to information, but “weakest” in accountability and redress mechanisms. On average, the highest score was for capacity, with an overall rating of 2.8. Individual indicators for capacity show that civil society organizations rated much higher than the government branches and agencies. That largely contributed to the relatively higher overall score recorded. Overall, transparency remained the main factor in lack of governance in the electricity sector. According to WRI, lack or non-disclosure of full information gives rise to an unequal sharing of market, financial and political power in a sector that is not by nature competitive. That may account for the sector’s long-term unresolved problems, and may give rise to new ones in light of the new policy environment, WRI contended. In general, transparency remains the biggest source of lack of governance in the electricity sector. According to WRI, the asymmetry of information and non-disclosure of complete information to the public both give rise to an unequal sharing of power (market, financial, political) in a sector that is not by nature competitive may already account for the sector’s long-term unresolved problems, and may give rise to new ones in light of the new policy environment.

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for uncompetitive behavior and market power abuse in simultaneously raising the market clearing prices for three plants: Ilijan natural plant, and the coal-fired thermal power plants in Sual and Pagbilao. But the Energy Regulatory Commission found no prima facie case against PSALM.

The need to amend Epira. With its dulled promise, both Malacanang and Congress want to amend Epira. In February 2011, President Benigno Aquino III included “Amendments to RA 9136 or the Epira Law” in his 23 priority bills, according to ABS-CBN news.com. . And now the House and Senate seem to agree. Eight House bills to amend Epira have been filed. HB 5678 filed by Eastern Samar Rep. Ben Evardone seeks to ban cross-ownership between generation and distribution firms. It adds that no participant in the electricity industry or any other person may engage in any anti-competitive behavior including, but not limited to, cross-subsidization, price or market manipulation, or other unfair trade practices detrimental to the encouragement and protection of contestable markets.

Japan External Trade Organization briefing on Philippine power rates Emotix/YouTube

Power to the people — at what cost?

Amendments to Epira should “strengthen safeguards against significant crossownership and market power abuse” - Freedom from Debt Coalition

On the other hand, as far back as the 13th Congress, at least three Senate bills aiming to amend Epira have been filed: SB 2232, SB 303, and the latest, Senate President Juan Ponce Enrile’s SB 2121. If enacted, Enrile’s bill would disallow the burden from stranded debts and costs, according to a Philippine Star report. Amending the Epira Law should be a top priority of the country’s lawmakers so to unburden the Filipinos from the cost of NPC’s inefficiency in the past, as the Freedom from Debt Coalition put it in their 2008 paper on how to reduce electricity rates. Elvin Ivan Uy added in his memorandum to Senator Gregorio Honasan, “Genuine and Sustainable Reforms in the Electric Power Industry,” that amendments to Epira should “strengthen safeguards against significant crossownership and market power abuse.” The path to lower electricity rates may indeed need further changes in Epira toward greater market competition. Not only will this reduce monopoly profits; it would also lure investors now put off by special deals binding power producers to certain distributors. With a more open electricity market and more power generation investment and capacity, the Philippines’ long frustration with costly power may at last see some light at the tunnel’s end.

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News & Strategy Alerts Nation 8 names on CJ short list, De Lima out As reported by ABS-CBN News on Aug. 13, the Judicial and Bar Council (JBC) included eight candidates for its short list of nominees for the position of Chief Justice submitted to President Benigno Aquino III: incumbent Supreme Court justices Antonio Carpio, Roberto Abad, Arturo Brion, Teresita Leonardo De Castro and Maria Lourdes Sereno, Solicitor General Francis Jardeleza, former Ateneo Law School Dean Cesar Villanueva and former congressman Ronaldo Zamora. Justice Secretary Leila De Lima was not on the list, which prompted her to accuse the Supreme Court, the JBC, and the Integrated Bar of the Philippines of conspiracy. The JBC disqualified De Lima, who is facing three pending disbarment cases filed against her because of her defiance of a temporary restraining order issued by the Supreme Court on the travel ban issued by the Department of Justice against former President Gloria Macapagal Arroyo and for openly making critical statements against former Chief Justice Renato Corona prior to his conviction in the impeachment trial. Acting Supreme Court Spokesperson Atty. Gleo Guerra, IBP President Atty. Roan Libarios, and academe representative to the JBC Atty. Jojo Mejia were one in saying that the JBC merely applied its existing rules and that there was no conspiracy against her bid for the post. In any case, De Lima seems to have accepted her fate as she revealed

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that she would no longer avail of any remedy, if any, and pleaded early to whomever would be appointed as chief magistrate to expedite the resolution of the cases against her.

Ombudsman files 2 graft cases vs NBN deal whistle-blower Per an Aug. 16 Philippine Star report, the Office of the Ombudsman charged NBN-ZTE deal anomaly whistleblower Rodolfo Noel Lozada Jr. before the Sandiganbayan with two graft cases in connection with alleged corrupt acts he committed while he was still the president and chief executive officer of the Philippine Forest Corporation. The Graft Investigation and Prosecution Office of the Office of the Ombudsman revealed that Lozada committed acts constituting conflict of interest and partiality in granting leasehold rights over public lands. It was alleged that Lozada granted leasehold rights over public lands to his brother Jose Orlando and to private company Transforma Quinta connected to him and his wife. These acts of having direct or indirect financial or pecuniary interest are prohibited by the Anti-Graft and Corrupt Practices Act. Lozada was the popular whistleblower who exposed alleged irregularities in the aborted $329-million NBNZTE deal during the term of former President Gloria Macapagal Arroyo. He was previously arrested on a perjury charge filed by Arroyo's former chief of staff for making conflicting statements before the court and the Senate. Lozada was instrumental in the subsequent filing of graft charges

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against Arroyo that were related to the canceled broadband deal.

House minority seeks ‘compassion’ for GMA An Aug. 15 Business Mirror story reported that members of the minority in the House of Representatives are appealing for compassionate treatment for Pampanga Congresswoman Gloria Macapagal Arroyo for health reasons. The minority seeks to pass a resolution asking House leaders to render all possible assistance for professional services to the former president after a recent CT-scan showed a lifethreatening displaced titanium plate that had been implanted in her cervical spine. House Minority leader Danilo Suarez said that medical treatment abroad can be considered following the unsuccessful operations performed in local hospitals in the country, but also clarified that the proposed resolution was not meant to pressure the government to allow Arroyo to see medical treatment abroad because that was a decision for the court hearing charges against her to make. The resolution, according to Suarez, will ask the House leadership for help in giving Arroyo all possible assistance in terms of professional services here or abroad. Arroyo's doctor at the Makati Medical Center recommended that a neuro-cervical doctor based in New York could be in a better position to examine and recommend the appropriate medical treatment. Arroyo also experiences difficulty in breathing and even in swallowing food and her current condition may lead to sudden death.

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Should Assad Stay or Go? In either case, the outlook for peace and stability looks dismal for Syria in the foreseeable future By Pia Rufino

STRATEGY POINTS Syrian President Bashar alAssad's regime looks more vulnerable now than at any other time since the Syrian uprising started last year, with high-profile defections and successful attacks on highranking leaders Despite its perceived vulnerability, the regime still enjoys some sectarian support and has the military resources to wage prolonged conflict The fall of Assad might provoke sectarian strife, a power vacuum leading to greater involvement of foreign radical groups, and regional tensions, analysts say

or now, there’s no sign that the regime of Syrian President Bashar al-Assad will collapse anytime soon, but nonetheless, it appears to be at its most vulnerable since the uprising started in March 2011, as observed by the Aljazeera Center for Studies, a think tank of the Qatar-based Al Jazeera network, in its Aug. 5 position paper “Assad's Options amidst Regime Setbacks.” According to the paper, the government looks weak now after an July 18 explosion in Damascus killed a number of high-ranking military and security leaders in Assad’s inner circle, including the defense minister and interior minister. The regime also faces disintegration of its military and defections of officers and soldiers. Earlier this month, Syrian Prime Minister Riad Hijab left the Assad government to join the revolution, the latest and the most prominent defection since the outbreak of the revolt, the BBC reported on Aug 6. On Aug. 14, in Hijab's first public statement since leaving his post, the former prime minister revealed that the regime controls no more than 30% of the country, and urged the army to abandon Assad, as reported by Reuters. "I tell you out of my experience and the position I occupied that the regime is collapsing, morally, materially and economically. Militarily, it is crumbling as it no longer occupies more than 30 percent of Syrian territory," he was quoted as saying.

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Should Assad stay or go?

23,000 dead thus far. Figures from Britain-based Syrian Observatory for Human Rights indicate that 23,000 people have been killed in violence in Syria since the outbreak of the revolt in March last year, according to an Aug. 13 Agence France-Presse (AFP) report posted on Yahoo.com.

Considering that the opposition blames him for the mass killings, interviewer Jürgen Todenhöfer asked Assad who was responsible for the death of thousands of civilians. Assad said the majority of those who were slain were government supporters and innocent people killed by different groups in Syria.

"As of August 13, 23,002 people were killed, including 16,142 civilians, 1,018 defectors and 5,842 soldiers," Observatory director Rami Abdel Rahman told AFP, noting that “the total count does not include the progovernment militiamen, thousands of detainees whose fate is unknown, or those who have been killed but whose identities have not been verified.”

Majority of Syria's 22 million people are Sunni Muslims, who support the opposition, while the leading government figures are Alawite (an offshoot of the Shi’a sect), including Assad, who “relies heavily on his Alawite power base to crush the uprising, prompting revenge attacks and fear among other minorities that they face retribution if the regime falls,” according to a July 20 analysis by Associated Press (AP) bureau chief for Syria and Lebanon Elizabeth A. Kennedy that was posted on Bloomberg Businessweek.

'Stay only when you have public support.' For his part, in a July interview with German television network ARD, Assad had this to say when asked if he was ready to step down if this could bring peace to Syria: “The president shouldn’t run away from challenge and we have a national challenge now in Syria. The president shouldn’t escape the situation, but from the other side you can stay as president, stay in this position only when you have the public support.”

Syrian President Bashar al-Assad says he remains in power because of public’s support German television network ARD posted on July 8, 2012

The

In Kennedy's analysis, the opposition's fractiousness and its lack of a central command indicate that it will not be able to pacify the country, and that there is no clear candidate to step in and lead should Assad leave. The fractious opposition tries to unite. According to a July 25 BBC report that provides a guide to some of the most prominent Syrian opposition groups, while “the opposition remains fractious and deeply divided,” several groups are trying to form coalitions to unite the opposition supporters and gain international help and recognition. The BBC report focused on three of the most prominent groups: the Syrian National Council, which seeks the overthrow of the government through legal and non-violent means; the National Coordination Committee, which favors negotiation with the government and opposes foreign intervention, and; the Free Syrian Army, a group of Syrian army defectors that wants to overthrow the government by force. The report also discusses some of the dynamics overshadowing these groups’ attempts to work together.

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Assad’s options. The aforementioned Aug. 5 Aljazeera position paper identifies three scenarios open to Assad’s regime: • Accept the Arab League’s July 22 offer of a secure exit and safe haven for Assad and his family

Regional repercussions

A change of regime does not necessarily mean brighter days for Syria. According to the April 2012 policy brief “Assad fall: how likely, how desirable?” by Madrid-based, European think tank Fride, among the major risks of Assad’s fall are sectarian strife, a power vacuum leading to greater involvement of foreign radical groups from neighboring Jordan, Turkey, Lebanon and Iraq, and the further rise of regional tensions. Iran has been helping Syria, its only reliable ally in the Middle East, by supplying the current regime with funds, weaponry and expert personnel to use against rebels, an Aug. 7 article in The Telegraph reports. According to the report, Iran sent a senior envoy to Damascus to show its support for Assad, vowing that it would never allow “the resistance axis – of which Syria is an important pillar -- to break,” referring to an “axis of resistance” composed of anti-Western powers: the countries of Iran and Syria, and the armed groups Hezbollah (the Lebanon-based militant group and political party) and Hamas (the largest Palestinian militant movement). However, if Assad’s fall seems imminent, Iran will try to establish good relations with the successor regime, according to “Post-Asad Syria: Opportunity or Quagmire?,”an analysis released in February by U.S. think tank Institute for National Strategic Studies at National Defense University. The study quotes the International Crisis Group in summarizing the impact of regime collapse on Iran

in exchange for stepping down. Damascus has already rejected this proposal, and considered it interference in Syria’s internal affairs. The paper says the combination of Assad’s personality, sectarian interests associated with him, continuing

as “possibly auguring a profound shift in the regional strategic balance of power— far more significant than a policy of sanctions or pressure against Tehran (Iran’s capital) could possibly bring about.” The Fride policy brief discusses a best-case scenario, in which regime change could see Damascus shift from its traditional anti-Western alliances toward more openness to the West. “If the next regime will be controlled by Islamists, Syria would become closer to Saudi Arabia and will have better relations with Western countries. If liberal and progressive powers manage to succeed Assad, Western countries would also become privileged partners. In both cases, Syria’s relations with Iran and Hezbollah would see a dramatic shift, to these two actors’ disadvantages.” Even then, if both Iran and Hezbollah lose Syria’s support, “their sudden sense of weakness could possibly translate into assertiveness and radicalism” towards its opponents, including Saudi Arabia and Qatar, and the U.S. and its Western allies. The brief also warns that while “(M)uch speaks for the removal of the Assad regime ... a change of regime would likely have a number of negative repercussions.” Whether the fall of Assad’s regime is good or bad news for the West “depends on who would take over, and how firmly the successors would be able to resist external attempts to influence them.”

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Should Assad stay or go?

support from Russia and Iran, and military strength despite increasing defections mean it is still too early for Assad to step down or seek a negotiated solution. • Continue fighting, with the stated aim of achieving military victory. Whether the regime can actually triumph or whether it cares about the scale of destruction that would accompany a protracted war might not matter, because prolonging the struggle might give the regime a better negotiating position. • Continue fighting, while the ruling Alawite groups and their allies make their way to Alawitemajority areas, from where the regime can establish a base for a mini-sectarian state that would continue to claim legitimacy. While the paper maintains such a strategy would be “disastrous for Syria as a whole but for the Alawite sect in particular” -- primarily because the sect is too small to engage in prolonged confrontation with the Sunni majority -- it nonetheless suspects that this might be the regime’s strategy, observing that there have been reports of the regime reinforcing military capabilities in Alawite areas and subjecting villages to sectarian cleansing to rid these areas of Sunnis. Possible scenarios facing Syria. For its part, the April 2012 Fride policy brief identifies three plausible scenarios for the country’s future: • Citing the Assad regime’s success in thwarting international attempts to halt the violence, the brief says the most likely scenario in the short run is the continuation of violence in Syria, with the regime standing out as the strongest player. • A sudden fall of the regime can still be brought about with continuing defections from the political and diplomatic ranks, along with further splits at high levels in the military, and a serious deterioration of the economic situation, the brief maintains. At the same time, it makes an

The

observation that has not been publicized much in Western-dominated media: “In the absence of an attractive alternative around which to rally, the majority of the Syrian population appears to be identifying with the regime.” • While a sudden fall of the regime is most likely to be accomplished by a foreign-led military intervention, the brief also points out that the reluctance of the U.S. to get directly involved in light of its own upcoming elections, coupled with Russia and China’s rejection of any war scenarios, might well enable Assad to remain in power in 2013 and maybe even beyond. The brief concludes by saying that the international community, having failed to agree on how to stop the violence, must now explore all possible diplomatic options, and in case Assad’s regime should fall suddenly, it must be prepared to deal with the consequences of the ensuing political vacuum. Diplomacy still the best option? A Washingtonbased think tank, Center for a New American Security which specializes in national security issues, in its Feb. 2012 policy brief titled “Pressure Not War: A Pragmatic

Clinton says there’s a need for the US and other nations to come up with a political transition plan for Syria in a news conference with South Africa's foreign minister

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and Principled Policy Towards Syria,” outlines a diplomatic strategy that could help address violence and bring about peaceful transition in Syria. It discourages military intervention, and encourages U.S. and international partners to engage in a campaign of pressure, such as tightening economic and financial sanctions against Assad regime and isolating the regime diplomatically. It also posited that if Assad falls from power, the armed opposition groups would be unlikely to de-mobilize or disarm quickly, which could result in continued violence, and observed that the Assad regime still enjoyed a vast military advantage, a military that remained loyal and well-armed, as of that writing. For her part, U.S. Secretary of State Hillary Clinton sees the need for the U.S. and other nations to prepare a transition plan that ensures that Syria's institutions remain intact once Assad is ousted, according to an Aug. 7 AP report posted on Yahoo.com. Clinton also stressed, in an indirect warning to Iran, Assad’s closest ally, that outsiders should not attempt to take advantage of any power vacuum that arises. "I do think we can begin talking about planning for what happens next: the day after the regime does fall. I am not going to put a timeline on it, I can't possibly predict it, but I know it's going to happen as do most observers around the world," Clinton said.

Should Assad stay or go?

Protecting OFWs in Syria The Philippines was reportedly the only country absent at the UN Human Rights Council’s June vote on a resolution condemning the massacre in Houla, according to a June 5 Philippine Daily Inquirer report. Foreign Secretary Albert del Rosario explained to the Inquirer that the Philippines is “maintaining a strategic silence on the situation in Syria” to protect the Filipinos in Syria. However, the non-participation of the country is “reprehensible,” especially since the country could have just abstained from voting on a council resolution as it had done in the past, according to the New York-based Human Rights Watch Asia researcher Carlos Conde. According to an official statement from the Department of Foreign Affairs (AFP), as of Aug. 13, it has repatriated 2,060 Filipinos from Syria since the outbreak of violence in March 2011. In a July 19 Agence France-Presse report posted on Business World, DFA Assistant Secretary Raul Hernandez said the government was dispatching a team composed of DFA, Labor and Employment, and Interior and Local Government representatives to Syria to try to locate an estimated 8,000 to 9,000 Filipinos in Syria “so that we can bring them out of harm’s way immediately.” According to Hernandez, the repatriation of OFWs in Syria was being hampered by employers demanding refunds of as much as $10,000 in exchange for their release. In December, the government banned Filipinos from working in Syria and ordered a mandatory evacuation of Filipinos in Syria. Despite the ongoing conflict in Syria and the OFW deployment ban in Syria, Filipinos continue to go to Syria to look for jobs with around 100 Filipinos arrivals every month, according to a Philippine labor official Angel Borja in Damascus, as reported in the Inquirer on June 17. Borja said the arrivals are taking place despite the fact that the Syrian government stopped issuing entry visas to Filipinos in April. According to a document said to be from the Philippine embassy in Damascus, entitled “Report to Congress on the Status of Assistance to Nationals, July to December 2011,” there were an estimated 17,000 Filipinos in Syria, of whom 13,600 were said to be undocumented.

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News & Strategy Alerts World Ecuador grants Assange asylum; UK vows to ‘carry out’ extradition anyway As reported on Yahoo! News’ The Lookout blog on Aug. 16, Wikileaks founder Julian Assange will be granted asylum in Ecuador despite threats by the British government to storm the Ecuadorean embassy and extradite Assange to Sweden, where he remains wanted for questioning on allegations of rape and sexual molestation. Ecuador’s foreign minister Ricardo Patino made the announcement on August 16 in a televised statement where he also criticized the U.S. and U.K. governments for failing to protect Assange from political persecution. The British Foreign and Commonwealth Office, meanwhile, called Ecuador’s decision “regrettable.” A spokesman from the office said, “British authorities are under a binding obligation to extradite him to Sweden.” WikiLeaks is an international online organization that publishes submissions of private, secret, or classified media from anonymous sources. In August 2010, Assange applied for a residence permit in Sweden to live and work there. He hoped to have a base for WikiLeaks in the country because

of Sweden’s laws protecting whistleblowers. His application was denied in October 2010. Swedish authorities issued a warrant for Assange's arrest in August 2010 on two separate allegations—one for rape and another for molestation.

World rich list shows emerging Asian Century Per a CNN Aug. 17 story, it seems the world’s wealthiest people will be living in Asia, based on a survey on which countries will be home to the richest citizens by 2050. The 2012 Wealth Report of Knight Frank-Citi Private Bank projects 2050 per capita income of city-state Singapore will be $137,710; Hong Kong, $116,639; Taiwan, $114,093; and South Korea, $107,752. The only Western country that is predicted to remain in the top five is the United States, with a projected per capita income of $100,802 by then. The world’s economic center of gravity, according to Danny Quah of the London School of Economics, will be somewhere between India and China. The report says the top 10 fastest rising economies will be Nigeria, India, Iraq, Bangladesh, Vietnam, the Philippines, Mongolia, Indonesia, Sri Lanka, and Egypt. On the other hand, Old World economies—such as Spain, France, Sweden, Belgium, Switzerland, Austria, the Netherlands, Italy and Germany—will have the worst growth performance in the next 40 years. With its aging population, Japan will have the weakest projected growth of all economies.

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In January, British banking giant HSBC predicted the size of a hundred economies 40 years from now. HSBC said the Philippines is poised to become the 16th largest economy in the world by 2050, joining a group of 26 countries expected to post rapid growth at an average of 5% a year.

China’s Hu gives show of support for North Korea As reported by Reuters, Chinese President Hu Jintao met with the powerful uncle of North Korean leader Kim Jong-un on August 17. The move was seen as a clear show of support on the part of China for its impoverished ally in its attempt to rebuild its shattered economy. Kim’s uncle, Jang song-thaek, is regarded as the driving force behind the isolated nation’s reforms, which desperately need China’s backing. Jang’s trip to China is seen as a sign of the seriousness of North Korea in reviving its economy. So far, the country has received some $300 million in non-financial direct investment from about 100 Chinese companies, which are in the food, electronics, mining, medicine, chemical, and textile industries. The China-North Korea relationship is anchored on China’s support for the leadership of the late Kim Jong-Il. China is North Korea’s biggest trading ally and its main source of food, arms, and fuel. China’s economic leverage over North Korea, analysts say, has grown because of the latter’s declining relations with South Korea and the international community.

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Big Bucks in the Battle of the Bulge

By Victoria Fritz

STRATEGY POINTS The World Health Organization reports that worldwide, 500 million people are now considered obese The weight-loss industry is a multi-billiondollar, if highly volatile market, encompassing inexpensive and do-ityourself programs and professional intervention procedures Even with professional medical intervention options available, unless the overweight or obese condition is genetic, lifestyle changes might still hold the key to losing weight and keeping it off

the United States alone, the weight-loss business is a multibillion-dollar industry.

In a May 11 feature on the weight-loss industry on ABCâ&#x20AC;&#x2122;s 20/20 news-feature program, Marketdata Enterprises president John LaRosa gave key figures on just how much is spent on weight-loss in the U.S. (Although the actual 20/20 episode is not available to viewers outside the U.S., the discussion points were made available on a secondary source, Diets in Review.) In the interview, LaRosa estimated annual revenues at $20 billion, including diet books, diet drugs and weight-loss surgeries. 108 million people, or about one-third of the countryâ&#x20AC;&#x2122;s population, are on diets at one time or another, with women comprising 85% of that number. In 2009, there were 220,000 with morbid obesity who had bariatric surgery. According to LaRosa, the average cost for bariatric surgery is $11,500 to $26,000. Applying the midpoint of that range to the total of bariatric surgeries done would result in over $4 billion. Morbid obesity is defined alternately as weighing 100 pounds more than your ideal weight or having a body mass index (BMI) above 40 (a normal BMI is said to range between 20-25, while overweight covers the range between 25 and 30, and obese covers the range between 30 and 40). Bariatric surgery is the collective term for the many types of weight-loss surgery now available. The most common method is the gastric bypass, which has fewer complications than other weight-loss surgeries. Another secondary source, Red Orbit, also cites Marketdata Enterprises for 2009-2010 figures. Red Orbit cited figures from the latest (May 2011)

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THE U.S. WEIGHT-LOSS INDUSTRY BY MARKET SEGMENT

biennial publication of Market Data Enterprises for the U.S. weight-loss industry. The annual sales figure presented here is much higher, at $60.9 billion. This includes all major segments of the U.S. diet market, like commercial weight-loss chains, meal-replacement firms, and even online dieting. Overall growth was marginal at just 1%, from $60.4 billion (2009) to $60.9 billion (2010). However, the market size does not spell stability for industry players, as “dieters are fickle and shift from fad to fad. These … spell boom or bust for diet companies.” Doing it yourself. As an offshoot of the financial crisis, consumers went for inexpensive diet programs and the period 2009-10 was touted as the years of the “value diet” and the “frugal dieter.” A near all-time high 80% of dieters opted for a do-it-yourself plan, choosing from diet websites, over-the-counter diet pills, meal replacements and diet books. Some 70% of dieters opt for DIY programs, with meal replacements remaining a favored option for their low price and easy availability. (To illustrate easy availability, the website of Walmart, the world’s number-one retail chain website, offers 97 different types of meal-replacement shakes on their website, with a Slim-Fast 8-pack going for less than $10.)

Market Segment

Medical clinic chains are also experiencing growth. In particular, the Center for Medical Weight Loss has grown from 60 branches in 2007 to 450 by 2011. From a 2009 Profile America study published in 2009, the complete list of market segments comprising the weight-loss industry is listed below, from lowest cost and least commitment to highest cost and highest commitment, and with a dividing line separating do-ityourself measures from professional help.

The

Examples

Diet food and beverages

Diet soda, shakes, protein bars

Meal replacement products

Slim-Fast, Ensure, EAS

Over-the-counter diet pills

alli. Trim Spa, Metabolife

Diet programs

NutriSystem, eDiets

Exercise

LA Fitness, Bally's, Crunch

Weight loss centers

Weight Watchers, Jenny Craig

Medical programs/clinics

Medifast, Optifast

Diet prescription drugs

Xenical, Meridia, Accomplia

Surgery (hospitals or outpatient clinics)

Bariatic (such as gastric bypass) and cosmetic surgery (such as liposunction)

Table from “Industry IQ: Weight Loss Centers,” Profile America, 2009, featuring 2008 data from “The U.S. Diet Market Outlook – 2008 and Beyond” by the Gerson Lehman Group

According to the same Marketdata figures, commercial weight-loss chains in America are also staying strong, with Weight Watchers coming out on top of this sector, which was worth an estimated total of $2.73 billion in 2010.

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Untruths in advertising The U.S. Federal Trade Commission published a paper in 2002, “Weight Loss Advertising: Analysis of Current Trends,” in which it referred to an “epidemic of obesity” and over $30 billion spent in weight-loss products and services. It warned against false and misleading advertising involving these products and services. It also noted that these types of advertising were increasing instead of abating, with FTC law-enforcement cases involving them in the previous decade equaling the total such cases filed in the previous seven decades. Based on its analyses of weight-loss ads of that decade, the paper concluded that the use of false or misleading claims in weight-loss advertising was rampant, with nearly 40% of the ads in our sample making at least one representation that almost certainly was false, and 55% of the ads making at least one representation that was very likely to be false or, at the very least, lacking adequate substantiation.

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The industry picks up in other major countries. In Australia, a June 2010 Herald Sun article cited an IBISWorld industry study in in predicting that Australians would spend an estimated AU$750 million (approximately US$634.2 million at prevailing exchange rates at the time) in weight-loss programs, and that the industry would top the AU$1-billion mark by 2015, with low-calorie and fat-free food and drinks as the major growth areas.

performing 100 obesity-related surgeries as opposed to 20 or 30 in previous years. Obesity trends in the world. A growing weight-loss industry is but a natural response to the rise in obesity incidence in the world. In the Philippines, obesity incidence is clearly on the rise among the female population. The latest (2008) figures from the 7th National Nutrition Survey by the Department of Science and Technology’s Food and Nutrition Research Institute (FNRI) illustrates this alarming trend over the last 15 years. By this measure, women are considered obese if they have a waist to hip ratio over .85.

In China the weight-loss industry is also making some headway, according to a June 2010 feature in Bloomberg Businessweek, also in June 2010. Greater wealth, less physical activity, and a shift to more processed foods have led to a growing number of overweight and obese people. An estimated 30% of Among children the rise in the incidence of overweight adults in China are now struggling with excess weight, is even more acute. An earlier study in 2005, jointly up from 25% in 2004, according to Barry Popkin of undertaken by the United Nations Food and Agriculture the University of North Carolina's Interdisciplinary Organization (FAO) and the Obesity Center, and author of FNRI, shows this increase. the book The World is Fat. But A market opportunity the impact has been greater on in medical tourism? According to the following charts children. In Beijing, about 40% (which were also used in TCR of the boys are overweight. In the U.S., the Bariatric Surgery 2-16's piece, “Is Your Lifestyle Source website lists the average cost Killing You?” which discussed According to the Businessweek of gastric bypass by laparoscopy the rise in non-communicable piece, the rising number of (a less invasive type of surgery conducted with the use of a viewing diseases), the percentage of overweight people is creating tube) is between $15,000 to $35,000, overweight-for-age children under demand for low-fat foods assuming no complications. In the age of 5 increased by 250% and weight-loss programs. contrast, the same type of surgery in from 1993 to 2003, while the Otsuka, a company in Japan Thailand is estimated by Asias Medical percentage between the ages of that makes soy and fruit bars, Tourism site to cost $13,000, though 6 to 10 increased by 117% over saw a tremendous growth in the site did not indicate if this was the same period. The percentage its sales in China, which were laparoscopic surgery. increases for overweight/obese expected to overtake its U.S. men and women over the same sales that year. The feature also In the Philippines, laparoscopic gastric period were 45% and 46%, reported that more weightbypass surgery costs P700,000, respectively. loss centers were opening in or about $16,700, according to the Shanghai and other cities, one Medical Tourism Philippines site. It A February news release from gym equipment manufacturer also listed the following components the Food and Nutrition Research was predicting a 30% increase as being included in the price: six-day hospital stay, pre-operative check-up Institute cited findings from in sales to health clubs, and that and clearances by eight specialists, the 7th National Nutrition Survey one Shanghai hospital reported laparoscopic procedure, doctor’s professional fees, and hospital fees.

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in reporting that a rise in obesity led to an increased risk for developing heart and cardio-vascular diseases, and accounted for at least 37,000 deaths in 2008. In the United States, more than 35% of adults were found to be obese in the 2009-2010 period, according to the Centers for Disease Control, using the definition of having a Body Mass Index (BMI) over 30. Worldwide, the World Health Organization (WHO) reported that obesity has more than doubled since 1980. In 2008, more than 1.4 billion adults were overweight, of whom 500 million were classified as obese.

Prevalence (%)

WAIST-HIP RATIOS FOR FILIPINO ADULTS OVER 20, 1998-2008 70 60 50 40 30 20 10 0

65.5

54.8 39.5

Female Male

7.9 1998

12.1

11.1

2003

2008

While the percentage of Filipino men with high waist-hip ratios has increased by 40% since 1998, the prevalence of 11.1% is dwarfed by the 65.5% prevalence rate among Filipino women, a 65.8% increase since 1998 Chart from Philippine Nutrition Facts and Figures 2008, Food and Nutrition Research Institute, p. 129

PERCENT CHANGE IN NUTRITIONAL STATUS OVER 10 YEARS 300 250 200 150 100 50 0 -50

50 40 30 20 10 0 -10 -20

0 - 5 y old 6 - 10 y old

250 117

-10

-13

-16

-15

Stunted

Underweight

Male Adults Female Adults

-8

CED

Overweight-for-age

-12

Overweight/Obese

Charts from “Dietary Changes and Health Double Implications: An Emerging Double Burden of Under and Over Nutrition,” Food and Agriculture Organization (United Nations) and Food and Nutrition Research Institute (Philippines), 2005, page 28

2. Inactive lifestyle 3. Environment – no places to walk; long work hours, etc. 4. Genes and Family history 5. Health conditions – ex: hypothyroidism 6. Medicines – some medicines can cause you to gain weight 7. Emotional factors – eating as an escape 8. Smoking (stopping) 9. Age – older people tend to gain more 10. Pregnancy 11. Lack of sleep – hormones released during sleep control appetite An ounce of prevention can really keep off the pounds, and the Mayo Clinic staff has listed some commonsense steps:

Obesity ‘largely preventable.’ WHO sees obesity as “largely preventable,” and many steps can also be taken to address it. The first step in prevention and treatment is to examine closely the causes. The overwhelming reason tends to be, quite simply, energy imbalance, i.e., taking in more calories than is being expended. But there are other possible causes of overweight and obesity, far more than commonly thought of, according to the U.S. National Institutes of Health:

1. Exercise regularly – about 150 to 250 minutes of moderate-intensity activity a week to prevent weight gain. This includes fast walking and swimming. 2. Eat healthy meals – eat more low-calorie, nutrientdense foods such as fruits, vegetables, and whole grains. 3. Know and avoid situations that trigger binge-eating. Write down experiences in a journal 4. Monitor your weight weekly 5. Be consistent with these habits, through vacations and holidays.

1. Lack of energy balance (calorie IN and OUT, or overeating)

The important thing for most overweight and obese individuals to remember is, unless your condition is

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Big bucks in the battle of the bulge?

Anti-obesity prescription drugs attempting a comeback Pharmaceutical companies have always been trying to cash in on obesity trends through the creation of antiobesity prescription drugs. In April 1999, Roche's Orlistat – more popularly known as Xenical – was approved by the U.S. Food and Drug Administration (FDA). According to Roche, up to that point, more than 1 million people in 17 countries had already taken Xenical, which reduces the absorption of fat in the gastrointestinal tract by about 30%. Following the FDA's approval of Xenical, no new weight-loss drug was approved until this year, when, according to a July 18 New York Times news story reprinted in The Manila Bulletin, the FDA approved two new weight-loss drugs within one month. The FDA approved Qsymia, made by Vivus of Mountain View, and Belviq, created by Arena Pharamceuticals. The twin approvals set up a marketing battle, though the report also notes that the competition might not be the hardest part, given that obesity drugs in themselves are hard to sell. According to the article, people who want a quick fix might try such drugs, but they rarely stay on them for more than a few months, and insurance companies often don’t pay for them. (Click on this link for a comparison of Qsymia and Belviq from the WebMD website.) An earlier industry report by Profile America from 2009, using data from Marketdata Research, made a similar observation, describing the weight-loss industry as “volatile and highly fragmented,” with people constantly attracted to solutions that appear easy and effortless. It cited the case of alli, a weight-loss drug introduced by GlaxoSmithKline, who projected $1.5 billion in yearly sales. In 2007, sales were a disappointing $300 million, and the product has not subsequently lived up to expectations. People realized it wasn’t a magic pill after all.

genetic and beyond your control, the following lifestyle changes still offer the best chance at a lasting solution: 1. Dietary changes – reducing calories and eating healthier; losing 1 to 2 pounds a week over the long term is the suggested pace, and be wary of quick fixes 2. Exercise and activity – overweight people should get at least 150 minutes of moderate-intensity physical activity weekly; have a more active day, like doing more household chores, gardening 3. Behavior changes – tap counseling and support groups, to face situations that might trigger binge eating 4. Prescription weight-loss medicines – Keep in mind that medication may help, but are meant to be used with diet, exercise and behavior changes. They are not a substitute for good, old-fashioned changes in your lifestyle that will keep the pounds off. Medication may be an option if weight-loss programs have not worked or if your BMI is 30 or greater, or if your BMI is over 27 and you suffer from complications of obesity, such as diabetes or high blood pressure. Possible doctorprescribed medicines are:

a. Orlistat (Xenical) b. Lorcaserin (Belviq) c. Phentermine-topiramate (Qsymia) d. Phentermine (Adipex-P, Suprenza) *Taking these medicines require close medical monitoring 5. Weight-loss surgery – this is considered if your BMI is 40 or higher, or 35 or higher and you suffer from obesity related complications; a condition imposed on the patient is that he or she will make the necessary lifestyle changes to make the surgery work. Lose 20, take 10. If one needs an added incentive to lose weight, an August 10 Yahoo! news item discusses a recent study showing that losing 20 pounds can add 10 years to your life. The study was presented at the 120th annual convention of the American Psychological Association. Dr. Rena Wing and Dr. Kelly Brownell observed that the health benefits linked to losing weight lasted up to 10 years. In this instance, less turns out to be more.

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News & Strategy Alerts Business DoF wants stricter ‘sin’ tax bill According to an Aug. 16 story posted on Business World, the Department of Finance is pushing for its original version of a bill hiking excise taxes on tobacco and alcohol products, claiming that more stringent provisions are needed to increase state revenues and improve public health. Aside from raising taxes, the DoF’s original bill aimed to peg subsequent tax increases to inflation. The provisions were later amended amid fears that sharp changes would lead to unemployment and smuggling, tax hikes were lowered and 8% increases every two years were scheduled instead. The projected revenue take from the new sin tax bill was slashed to ₱31.35 billion from ₱60 billion as a result of the modifications. Meanwhile, in an Aug. 16 press release, Health Secretary Enrique Ona said heavy cigarette use is directly correlated to six major illnesses, and the sin tax bill could add 10 to 20 years to a smoker’s life expectancy. The country has 17.3 million smokers and they consume an average of 1,073 cigarettes per year, Ona said. According to an Aug. 1 story in Business World, House Bill 5727 was approved in June and transmitted to the Senate in July. The Senate is now in the process of deliberating its own version of the bill, which Pres. Aquino wants to become a law before the year ends. The Senate is eyeing approval of the sin tax either by October or November to give way for discussions on the proposed 2013 budget in December, said Sen. Ralph Recto.

The

Gov’t seals P16.3-B PPP project for 9,300 classrooms An Aug. 17 story in the Philippine Daily Inquirer reported that the government has sealed its second public-private partnership (PPP) project with the awarding of contracts to build 9,301 classrooms worth ₱16.3 billion to Bayani Fernando-led BF Corp.Riverbanks Development Corporation and Megawide Corp. Fernando’s consortium won the build-lease-transfer contract for infrastructure in Region 1 to be leased by the Department of Education at ₱344.6 million a year in 10 years. Megawide, in partnership with Citicore Investment Holdings Inc., won the infrastructure packages (A and B) for Regions 3 and 4A, respectively, with lease payments worth ₱523 million and ₱760 million per annum in the next 10 years. The 9,301 classrooms refer to the total number of classrooms to be built in the next 16 months. Meanwhile, Rep. Juan Edgardo Angara said the government will hire 16,500 teachers and 3,500 other school personnel next year. He said Pres. Aquino allocated ₱14.6 billion in the 2013 national budget for DepEd’s teacher recruitment. Angara, who chairs the House committee on higher and technical education, urged DepEd to hire the “best and the brightest” among applicants and not those ‘with closeness and connections” to influential persons. He said that 31, 789 classrooms and 90,461 toilets at a cost of roughly ₱25.3 billion will be built, which puts

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on track the pledge of Pres. Aquino, during his July 23 State of the Nation Address, to wipe out classroom shortage by the end of 2013.

BIR misses revenue goal anew As reported in Business World on Aug. 16, the Bureau of Internal Revenue missed its revenue target for July, collecting only ₱85.32 billion against the goal of ₱87.349 billion. The BIR has now collected ₱604.68 billion for January-July, more than P18 billion short of the ₱622.706-billion target for the period. Significant misses were incurred in March-May, with targets missed by an average of ₱7.5 billion in that period. Meanwhile, an Aug. 17 Philippine Daily Inquirer story said the Bangko Sentral ng Pilipinas reported that the net inflow of foreign “hot money,” or investments by nonresidents in local stocks, bonds and other portfolio assets, hit $962.75 million in July. This was up by more than three times from $301.95 million in the same month last year and a reversal of the net outflow of $7.69 billion in June. BSP said this surge was the highest in 20 months. According to the central bank, gross inflow of foreign portfolio investments during the month amounted to $10.4 billion, while outflows reached $8.57 billion. The inflows were mostly invested in publicly listed stocks, particularly of property, holding, services and telecommunication companies.

• August 20-September 2, 2012

TECHNOLOGY

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Automating

Creativity

Can computer algorithms replace the skills and creative brilliance that are inherently human? By Marishka Noelle M. Cabrera

STRATEGY POINTS Algorithm-based applications can compose music, grade papers, write news reports, and even create a movie Creativity can be enhanced or stifled, depending on how one chooses to use the new technologies that will continue to shape our modern world

While technology can enhance output in the different creative fields, the human spirit that permeates through works of art cannot be replaced

a July article in Technology Review, author Christopher Steiner asks the question, “Can Creativity be Automated?” with the advent of complex computer algorithms that can determine which songs will hit the charts, grade English papers, produce sports reports based on box scores, and compose classical music. In disciplines where creativity rests at the core, what is in store for the world’s creative set as technologies penetrate their respective fields more and more? Hit song recognition and music composition. Author of “Automate This: How Algorithms Came to Rule Our World,” Steiner discusses the different ways in which algorithms are being used to produce material that would normally have only been done by a human. In

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Automating creativity

finding hit songs, for instance, the company Music Xray, whose technology can “detect musical hooks that are destined for the charts,” are connecting musical artists with recording deals. According to Steiner, the algorithms of Music Xray founder Mike McCready use Fourier transforms, which isolate a song’s base melody, beat, tempo, rhythm, octave, pitch, chords, progression, sonic, brilliance, and other factors that catch a listener’s ear. Once the properties have been identified and analyzed, the song is then compared with hit songs of the past. “Hit songs tend to be grouped in clusters, reveal similar underlying structures,” he observes, adding, “Get close to the middle of one of those clusters and you may have a hit.”

highlight the points on the real-life girls' faces before their best features were captured and digitally implanted onto Aimi's virtual face.” The computer-generated mash-up, a June 2011 Washington Post article notes, is another example of the Japanese pop (or J-pop) trend towards virtual or fictional pop stars. Other artists of the kind are the all-girl band Ho-kago Tea Time and hologram pop star Hatsune Miku.

The literally manufactured pop star. In Tokyo, even pop stars can be manufactured, not just figuratively but literally. Aimi Euguchi is a “perfectly-formed fake singer [that] was made up of the very best of pop pedigree,” as described in a June 2011 article in The Telegraph. Computer scientists did a “cut-and-paste” by plucking notable facial features from members of the Japanese girl group AKB 48 and putting them together to create their new member. “Skilled computer scientists,” the report says, “used detailed imaging to

Virtual pop star Aimi Euguchi is created using features from “genetically blessed” members of Japanese girl group AKB48. Video from YouTube

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What is an algorithm? Wise Geek defines an algorithm as “any set of detailed instructions which results in a predictable end-state from a known beginning.” If the algorithm is not properly defined, the result will be incorrect. A computer program, for instance, is a series of instructions listed in a specific order designed to perform a specific task. In his speech on TEDTalks in July 2011, algorithm expert Kevin Slavin tackles how we are living in a world that is increasingly being controlled by algorithms. He describes algorithms as “basically the math that computers use to decide stuff,” and talks about its “transition from being something that we extract from the world to something that actually starts to shape it.” An August 2011 BBC story, which cited Slavin’s talk, also raises concern over these “invisible computations.” From the field of web retailing to financial markets, movie making, and information search, algorithms are controlling almost all aspects of modern life, while doing it “in a far more subtle way than science fiction would have us believe.” The article reminds readers that while algorithms may be “cleverer than humans,” they don’t necessarily have the sense of perspective that humans have.

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Artificial intelligence breaks it down for music composition. In music composition, artificial intelligence may have a thing or two to contribute as well. A February 2010 feature on composer David Cope in Pacific Standard shows how a software program can compose music that Cope himself would have composed, as well as music that resembled the chorales of Johann Sebastian Bach. A bad case of composer’s block brought Cope to consider the idea of using artificial intelligence to compose music in his style. What Cope developed in his computer program Emmy, short for Experiments in Musical Intelligence (EMI), was a way for software to derive the rules of Bach in composing music—both the classical composer’s standard techniques and how he broke them. He converted 300 Bach chorales in a database and wrote a program that “segmented the bits into digital objects and reassembled them the way Bach tended to put them together.” The algorithmically generated movie. What can one do with 3,000 video clips, 80 voiceovers, and 150 pieces of music? Why not make an algorithmically generated movie, i.e., director Eve Sussman’s experimental cinema project, whiteonwhite:algorithmicnoir? According to a January story in Wired, the program that drives whiteonwhite, which screened three times at the Sundance Film Festival in January, operates in such a way that each clip has a specific tag that triggers the selection of a next clip, and the music and voiceover are assembled in a similar way as well, making each showing different from the next. “That's what the film company was hoping for,” a February article from DVICE adds, “believing the random pairings of the clips helps create the suspense in the plot along with the environment.” The Wired story notes, “Sussman hopes the randomness gives whiteonwhite the kind of unpredictability that only reality can offer.”

The film project whiteonwhitealgorithmicnoir was made with an algorithm that selects and strings together tagged scenes, music, and voiceovers to create a unique movie every time. Video from DVICE

Digital photo evaluation on the way. If algorithms can string together scenes based on tags for film-making, in photography, algorithms can deem one portrait to be of higher quality than another. Documentmanagement company Xerox developed a technology that can sort photos according to their content and aesthetic qualities, such as lighting and composition. As discussed in a Nov. 2011 article in Technology Review, the technology is said to be in its prototype stage, but when further developed, it should have the potential to aid users in tasks such as selecting which digital photos should go into an album or sorting photos based on selected characteristics. The technology can even be an added feature on a camera, where low-quality photos can be deleted quickly, thus saving on storage space. The system builds on the knowledge about the quality of photos being chosen for public display or tagged as high-quality in photo-sharing site Flickr. "What they show is that now you don't need a human to select images that are going to be judged beautiful," Aude Oliva, associate professor of brain and cognitive sciences at the Massachusetts Institute of Technology (MIT), says in the report.

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Automating creativity

Automated news-writing and Englishcomposition grading. Apparently, algorithms can automate some news-writing as well. A company called Narrative Science specializes in helping companies “leverage their data by automatically creating easy-to-use and consistent narrative reporting.” An April feature on the company in The Atlantic says the Chicago-based startup’s innovative platform “writes reported articles in eerily humanlike cadence.”

The article features a recent global study commissioned by software giant Adobe, in which three-quarters

The article cites Forbes magazine, which avails of what Forbes writer Lewis Dvorkin calls “computergenerated company earnings previews.” (Click on this link to access a Forbes blog featuring earnings previews automatically generated by Narrative Science.) “Wherever there is data, Narrative Science founders say, their software can generate a prose analysis that's robust, reliable, and readable,” the article adds. Algorithms can assess English compositions as well. According to an April article in Inside Higher Ed, a study by researchers at the University of Akron in Ohio found that “automated essay scoring was capable of producing scores similar to human scores for extended-response writing items with equal performance for both source-based and traditional writing genre.” Funded by the William and Flora Hewlett Foundation, the study compared software-generated ratings given to compositions by high school students to the ratings given by trained human readers. Rather than unleashing, is technology undermining creativity? The digital age has brought about solutions and technologies that enable people to pursue a myriad of creative endeavors, and yet the “networked generation’s ability to multitask” and their “constant need for instantaneous action” may be hindering creativity, an April article in Mashable posits.

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Automating news photos? No way, insists a pro Digital photography, which has all but subsumed film-based photography in everyday life, has given rise to free or affordable apps (applications) such as Instagram and Hipstamatic, which make ordinary photos look artsy, poetic, and yes, creative. These apps provide mobile device users with the option to filter images so they can resemble images shot on vintage film stock or with the use of expensive lenses. The trend, of course, has met with the dismay of at least one professional photographer. In a February CNN opinion piece, Los Angeles-based news and features photographer Nick Stern shares his thoughts, warning the media to be cautious about using app-doctored photos of news events, as they fail to convey the true story behind the images. “The app photographer hasn't spent years learning his or her trade, imagining the scene, waiting for the light to fall just right, swapping lenses and switching angles,” Stern laments. He says a camera should let you produce an image conveying the emotion of the scene and “take the photograph naked.” When a media organization uses an appdoctored picture in a news report, “it's not the photographer who has communicated the emotion into the images,” but rather “an app designer … who decided that a nice shallow focus and dark faded border would bring out the best in the image,” he maintains. “Since when did we trust app developers to bring us the news?” he asks rhetorically.

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of respondents feel their creativity is being stifled. An accompanying infographic shows only 39% of respondents describing themselves as being creative,

Automating creativity

and only 1 in 4 believing that they are living up to their creative potential. The findings were based on a survey of 5,000 adults from the United States, United Kingdom, Germany, France, and Japan. Automation still has its limitations. In a TCR article entitled “Man vs. Machine” (August 6-19, 2012), Tanya L. Mariano writes about the rise of the robotics industry and the trend toward robots taking over human jobs, as in manufacturing and agriculture. In creative fields, however, we may not be seeing a robot takeover just yet. A July Tecca article reprinted in Mashable compiled a list of eight human jobs that will survive a global robot takeover. Among the jobs predicted to endure were writer and artist, as these disciplines still have real human experience, savvy, and imagination at their core. Indeed, the magic and mystery of the creative mind cannot be replaced by artificial intelligence that easily. The intelligence, imagination, and inspiration to create works of art, whether in writing, photography, or music, still lie within the spirit of the human being.

The infographic found in Mashable illustrates findings of a global study on creativity conducted by software giant Adobe

For Cope, his software is only a tool. “All the computer is is just an extension of me,” he says. “They’re nothing but wonderfully organized shovels. I wouldn’t give credit to the shovel for digging the hole. Would you?”

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News & Strategy Alerts Technology New MS Office unveiled in the Philippines

According to the newsreport, Microsoft officials have yet to announce when the new Office will hit the market.

Microsoft Philippines recently launched the new Office suite at an exclusive customer preview at Makati-Shangri La Hotel. Tovia Va’aelua, the company’s business group lead for Microsoft Office, demonstrated the new features of the different Office applications, according to GMA News. This is the same version Microsoft CEO Steve Ballmer unveiled in the U.S. on July 16. The new MS Office is both touchscreenenabled, making it easy to use on a host of devices, from desktops and laptops to tablets and mobile phones, and Cloudfriendly, so users can edit their files either offline and online. According to Zane Adam, general manager for Cloud Computing Platform, the new Office is designed to level the playing field for businesses. It may also help small enterprises as it doesn’t require users to install new hardware. The new Office comes with the updated Word, Excel, PowerPoint, and OneNote applications. Some of the updates include: • Word users can edit PDFs and save them in Adobe format, and embed videos within a file • Revamped analysis tools in Excel for better data visualization, as well as new formatting tools • New themes, presentation tools, and design for PowerPoint • A tablet-friendly radial menu for Microsoft’s note-taking application, OneNote • Social networking features within Office applications

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Here is a hands-on review of Microsoft Office 2013, used on a Samsung tablet, by CNET.

Self-driving cars are coming It has been 50 years since the first self-driving concept cars were unveiled, and now, experts believe autonomous driving is just around the bend, reports Reuters. General Motors (GM) introduced some of the earliest “dream cars” in the late 1950s, such as the Firebird II and the Cadillac Cyclone. Today, companies that are working on autonomous technologies include tech firms Google and Intel, car manufacturers BMW, Hyundai, Mercedes, Volvo, and Nissan, and several suppliers and universities. The news report cited several studies that have found that consumers generally welcome the concept of self-driving cars. A March 2012 J.D. Power and Associates survey of U.S. consumers found that 37% were interested in autonomous driving technology, yet just 20% would definitely purchase it for $3,000. Another survey, this time by consulting firm Accenture, found that almost 50% of U.S. and British consumers would welcome self-driving cars.

self-driving cars will hit showrooms in 2019, and t hat a more advanced infrastructure will be in place by 2025. blind and 246 have low vision.

Pedal-powered washing machine for poor communities without electricity In communities around the world that lack access to electricity and modern washing machines, laundry tasks can take up to six hours a day. GiraDora, a prototype pedal-powered washing machine, hopes to make the chore less burdensome. It is made up of a plastic tub and a footpowered spinning mechanism. Users simply fill the container with water and soap, load their clothes, cover the tub with the lid, sit atop the contraption, and start pedaling. GiraDora uses less water, cleans clothes faster, and requires less effort than traditional methods. In winter, when clothes take up to three weeks to drip dry, GiraDora can double as a kind of dryer. Users need only drain the water and spin the clothes. GiraDora costs less than $40 to produce, making it a very affordable way to reduce the effort required to do laundry and free up people’s time to do more productive work.

However, even if consumers warm up to the technology, challenges such as the building of support infrastructure and the establishment of legal and liability frameworks may delay the advent of autonomous driving. But a recent survey by consulting firm KPMG is hopeful: it predicts that

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Source: Video uploaded to YouTube by TeamGiraDora

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How Indie Films Are Saving the Struggling Philippine Movie Industry The surge in independent films is revitalizing local cinema and blurring the mainstream-indie divide By Tanya L. Mariano STRATEGY POINTS According to NSCB statistics, the Philippine movie industry is getting a much-needed boost from local independent films Actors and filmmakers are crossing over from mainstream to independent films and vice versa, and major movie studios and TV networks are supporting indies via promotion, distribution, and release Indie and mainstream filmmakers must unite to revitalize Philippine cinema both commercially and artistically

the country’s mainstream film industry has its annual Metro Manila Film Festival for showcasing its best and brightest, Filipino independent films have Cinemalaya, the country’s most prestigious indie film festival. Launched in 2004 by The Cinemalaya Foundation, the annual event aims to invigorate the industry by cultivating a new breed of filmmakers and encouraging the creation of new films “that boldly articulate and freely interpret the Filipino experience with fresh insight and artistic integrity.” Each year, it awards seed grants to ten new filmmakers “to create the film of their dreams,” after which their works are showcased in the festival’s New Breed Full Length category. Other categories are the Directors Showcase for seasoned filmmakers and the Short Feature category. From eight films in Cinemalaya’s first film festival in 2005, the 2012 edition of Cinemalaya featured 25 digital

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Indie films save struggling movie industry

LOCALLY MADE MAINSTREAM VS. DIGITAL FILMS, 2005-2011

films shown in three different venues across Metro Manila. Indie saves dying local film industry. With the evolution of Cinemalaya and local independent filmmaking in general, indie has breathed new life into the country’s floundering movie industry, which has been under attack not just from Hollywood competition but also media piracy. According to a report by the National Statistical Coordination Board released in February this year, while the average annual number of local films from the 1960s to the 1990s was over 140, the average annual number of local films in the first decade of the 21st century has come down to 73.

NUMBER OF LOCAL FILMS SHOWN BY DECADE TOTAL FILMS: 6,672 2000 1600

1,490

1,657 1,427

1,366

1200

732

800 400 0

1960-1969

1970-1979

1980-1989

1990-1999

2000-2009

TCR representation of data from Table 1, "Now Showing: Panday Nag-Shake, Rattle and Roll," Romulo A. Virola, National Statistical Coordination Board, as posted on "Statistically Speaking" blog, Feb. 13, 2012

But, while the number of mainstream films, i.e., those produced by major studios such as Star Cinema, GMA Films, and Regal Films, has gone down, the number of independently made films, which are shot using digital equipment and thus cheaper to produce, is on the rise. In 2005, 52 mainstream movies and 1 independent film were shown, but in 2011, just 34 mainstream movies were shown while independent films numbered 44.

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Digital Mainstream 52

45 30 15

2005

2006

33 25

36 34

45 28

45 34

2007

2008

2009

2010

2011

TCR representation of data from Table 2, "Now Showing: Panday Nag-Shake, Rattle and Roll," Romulo A. Virola, National Statistical Coordination Board, as posted on "Statistically Speaking" blog, Feb. 13, 2012

This boosted the average number of local films from less than 60 per year in 2005-2008 to over 70 in 20092011. The share of local films vis-à-vis foreign movies also rose from 24.1% in 2005 to 34.1% in 2011. This is nowhere near the level of activity during the heyday of Philippine cinema, but the noticeable upturn signals that the local movie industry is beginning to bounce back. Mainstream films are market-driven, indie films vision-driven. In his speech at the two-day 2012 Cinemalaya Film Congress, Dr. Nicanor Tiongson, the festival’s film congress director, synthesized the panel discussions that took place throughout the event and talked about what differentiates independent films from mainstream, or studio-produced, films.

Cinemalaya Film Congress Director Dr. Nicanor Tiongson sums up the panel discussions, which covered current trends, what separates indie from mainstream, and recommendations for the improvement of Philippine cinema Cultural Center of the Philippines (CCP)/ Vimeo

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First off, mainstream movies are market-driven, that is to say, most of the time they are products meant to be sold to a target market, with profit as the bottom line. As these generally have heftier budgets, studios are less willing to take risks because a miss translates to millions of pesos in losses. This is why we see the same themes again and again – studios stick to genres and formulas that have been proven to sell. Filmic style is also conventional and generally glossy and pleasant to the eyes, as they do not want the audience to be disturbed. Indie films, on the other hand, are vision-driven. They follow the vision of a writer and a director, which oftentimes is the same person, and the filmic style supports this vision. These typically run on tiny budgets taken from different sources that are usually personal contacts of the filmmaker. They are not restricted by genres, formulas, and conventions, and tackle subject matters and realities that are rarely accommodated in mainstream productions. For instance, a lot of indie films talk about poverty and the gay identity while mainstream movies shy away from such realities that might make the audience uncomfortable. And if mainstream does cover such realities, they are treated as objects of ridicule. Compare, for example, Roderick Paulate’s movies where he plays gay characters and Auraeus Solito’s “Ang Pagdadalaga ni Maximo Oliveros” (The Blossoming of Maximo Oliveros), which treats homosexuality as a non-issue even as its protagonist is gay. (The full movie is available online through the Pelikula channel on YouTube.) (One interesting sub-category that emerged just recently is “maindie,” that is, a film that is indie in spirit but crafted in such a way as to appeal to mainstream audiences. Usually, this means unconventional subject matter is given a conventional treatment. “Ang Pagdadalaga ni Maximo Oliveros” is categorized as one such film.)

Just pieces of the bigger picture. But Pepe Diokno, a young filmmaker whose 2009 movie “Engkwentro” (Clash) garnered international acclaim, writes in an

Indie films = poverty porn? Many indie films in the Philippines have been increasingly criticized for what many see as exploiting the plight of the poor in order to sell. While a lot has been said about the issue, it seems fitting that the best commentary on this film-related matter is another film as well. Directed by Marlon Rivera and written by Chris Martinez, “Ang Babae Sa Septic Tank”(The Woman in the Septic Tank) is a comedy that tells the story of a group of passionate but misguided young filmmakers who set out to make an “authentic social realist” film. In her review of the movie, which won Best Film at Cinemalaya 2011, writer Jessica Zafra remarks that foreign film festivals favor Filipino movies that show poverty and are shot in a “low-budget indie guerilla filmmaking” style. Writes Zafra: “In effect indie filmmakers are making movies for foreign festival programmers and critics. They ignore the general

“Ang Babae Sa Septic Tank” follows a group of young filmmakers as they attempt to create an “authentic social realist” movie. Directed by Marlon Rivera, written by Chris Martinez Vimeo

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Aug 2011 Philippine Star column that the line that divides mainstream from indie is not as clear as it used to be.

In response to a university student who was doing his thesis on “Indie versus Mainstream,” Diokno writes, “… ‘independent’ doesn’t just refer to slow-paced, gay-

Pinoy audience, which ‘doesn’t understand’ their work, and the general Pinoy audience ignores them right back because they’re ‘depressing.’”

that discusses poverty tourism (both real and virtual, i.e., through cinema), authors Evan Selinger and Kevin Outterson note that most denunciations of looking at poverty as an outsider “fail to clarify whether they are stating that poverty tourists intend to demean poor people, or whether poor people feel demeaned when observed by tourists.”

Director Raymond Red echoes Zafra’s observations about filmmakers creating films with an eye to impressing international critics and participating in international festivals, saying in a May 2012 interview published in Criticine, “many filmmakers now probably are making films specifically to get into festivals. It’s basically the same thing they are accusing of commercial films, of working on formulas. So, in a sense, exoticising the socio-political situation of the Philippines and putting it on screen has become a formula. You know somehow that foreign film festivals would pay attention to films with this subject matter.” But director Brillante Mendoza, who made waves with his Best Director win at the 2009 Cannes Film Festival for his film, “Kinatay” (Butchered), maintains that Filipino independent films do not glorify poverty, reports ABS-CBN News. Reacting to a viewer’s comment during a January 2012 interview with ANC’s Karen Davila, Mendoza says, “In my films, poverty is just a background. It’s not what I highlight in my films…It so happens that the characters are poor. It’s how it is in the Philippines. For 80 percent of the Filipinos that’s how they live.” While one can’t deny that there is a wealth of independently made films that show the squalor and abject poverty that is the reality for bulk of the Philippine population, accusing a film of being “poverty porn” can be problematic, as it makes too many assumptions. In “The Ethics of Poverty Tourism,” a 2009 Boston University School of Law Working Paper

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The authors criticize The Times columnist Alice Miles’ review of the 2009 movie “Slumdog Millionaire,” which Miles labels as “poverty porn” because she believes it abuses the situation of the poor for the sake of entertainment. The authors conclude that there are many factors at work in a movie’s creation and subsequent reception, and many assumptions that need to be examined closely, making a “categorical condemnation of poverty tourism” unjustified. In this 2009 podcast from National Public Radio, writer Priya Rajsekar, poet and University of Houston professor Chitra Divakaruni, and journalist Eric Weiner discuss “Slumdog Millionaire” in the context of poverty porn accusations.

A 2009 podcast from National Public Radio, featuring a discussion of "Slumdog Millionaire" in the context of poverty porn accusations National Public Radio

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themed, or socially relevant films. The last few years have seen a rise in indie comedies, action flicks, love stories, horror thrillers, and even period dramas. ‘Independent’ doesn’t just mean digital, either, because even Hollywood has made the switch.” On the perception that indie films are usually of better quality, he says, “…that isn’t always true. Anyone who’s seen a soft-porn ‘indie film’ will tell you, crap isn’t limited to the confines of mainstream. And besides, the studios have produced some respectable movies lately — ‘RPG: Metanoia’ and ‘Temptation Island’ come to mind.” He concludes that “independent” is merely an economic term that means a film is not made by a major studio. “But set that difference aside and you see a bigger picture: That we’re just one Filipino film industry, and it makes no sense for us to divide ourselves based on petty definitions. In fact, there are more things that unite filmmakers than divide them.” Mainstreaming of indie? Of late, there has been increased collaboration between the mainstream and indie worlds. More mainstream actors are being cast in independent films, writers and directors with mainstream backgrounds are also dabbling in independent filmmaking, and major TV networks and studios have thrown their support through promotion, distribution, and release. Asked by the Philippine Daily Inquirer to comment on the involvement of television networks GMA 7, TV5, and ABS-CBN in the promotion of a number of Cinemalaya entries this year, writer and Cinemalaya jury member Ricky Lee says, “Indie producers and filmmakers want more people to watch their movies, so they hire mainstream actors, whose schedules are handled by these studios. Inevitably, they get the support of the studios as well.”

Who’s who: Indie industry stalwarts and rising stars Even before the digital revolution, which made filmmaking more accessible, a number of Filipino filmmakers ventured into creating movies independently, such as Lino Brocka, Ishmael Bernal, and Eddie Romero, all of whom are National Artists for Cinema. As early as the 1970s, several filmmakers and producers made films outside the “big four” studios, which referred to Premiere Productions, Sampaguita, Lebran, and LVN. It was in 1977 that Eric “Kidlat Tahimik” de Guia caught international attention for his film, “Mababangong Bangungot” (Perfumed Nightmares), which won the International Film Critic’s Prize at that year’s Berlin Film Festival. De Guia, who is considered the father of independent filmmaking in the Philippines, was conferred the Gawad Urian Lifetime Achievement Award for Filmmaking in 2008. It was in the 1980s that another prominent independent filmmaker, Raymond Red, began to make short films using super-8mm and 16mm film. Red’s short film, “Anino” (Shadow) won the coveted Palme d’Or award at the Cannes Film Festival in 2000, making him the first Filipino to win the award. Recently, Red was also named Best Director (Directors Showcase category) at Cinemalaya 2012 for his silent movie, “Kamera

Trailer of “Kamera Obskura” by Raymond Red (2012)

Source: Video uploaded to YouTube by ticketworldmanila

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Obskura” (Dark Room), which stars veteran actor Pen Medina.

Trailer of “Engkwentro” by Pepe Diokno (2009)

Other well-known names in indie filmmaking today are Khavn dela Cruz, whose movie “Mondomanila” was recently picked up for distribution by U.S. firm House of Film, reports the Inquirer, and Brillante Mendoza, whose movie “Kinatay” (Butchered), a movie about the butchering of a prostitute by corrupt cops, won him the Best Director Award at Cannes in 2009, reports ABS-CBN. (As with some of Mendoza’s other films, “Kinatay” had a polarizing effect, eliciting a “bravo” from director Quentin Tarantino, while prompting film critic Roger Ebert to call it “the worst film in the history of Cannes.”)

Source: Video uploaded to YouTube by engkwentromovie

Trailer of “Diablo” by Mes de Guzman (2012)

Also gaining attention are directors Mes de Guzman, whose Cinemalaya entry, “Diablo” (New Breed Full Length category), swept up the awards for Best Film, Best Director, Best Actress, and Best Cinematography; Auraeus Solito, director of the critically acclaimed “Ang Pagdadalaga ni Maximo Oliveros;” and younger directors Pepe Diokno, whose 2009 film “Engkwentro” has won him awards at the Venice Film Festival, the Network for the Promotion of Asian Cinema, and Gawad Urian; and Raya Martin, director of “Independencia,” the first Filipino film to be selected to Cannes’ Un Certain Regard section, according to the Inquirer.

Trailer of “Mondomanila” by Khavn dela Cruz

Source: Video uploaded to YouTube by ticketworldmanila

“Ang Pagdadalaga ni Maximo Oliveros” by Auraeus Solito (2005)

Source: Video uploaded to YouTube by oracafe

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Source: Full movie uploaded to YouTube by Pelikula

• August 20-September 2, 2012

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Report

For instance, the film “Santa Nina” was widely promoted by ABS-CBN, as two of their “talents,” actor Coco Martin and director Emmanuel Palo, were involved in its production. Likewise, Paul Sta. Ana’s “Oros” received support from GMA 7, and Jun Lana’s “Bwakaw” was backed by TV5 and “Eat Bulaga!” producer Tony Tuviera, according to the article.

about how major studios do not hesitate to kill their competition if profits are threatened.

Writing about the previous year’s Cinemalaya in a 2011 Inquirer column, award-winning director Jose Javier Reyes says that through indie films, mainstream actors get an opportunity to showcase their talents beyond the limits set by the kind of formulaic material dominant in studio-produced films and local soap operas. Reyes also observes, “Local audiences are starved for better, more innovative, but not necessarily more expensive and impressive, productions. Bongga [ostentatious] is out; bago [new] is in.”

According to the NSCB report, while the film industry’s revenues are the equivalent of just 0.06% of the country’s gross domestic product, the film industry significantly contributes to employment generation. As of 2008, 0.10% of domestic employment is composed of people employed in motion picture and video production, cartoons and animated films production, and motion picture, audio, and video projection.

Actors have also crossed the other way, from indie fame to mainstream popularity, with the most notable ones being Coco Martin, Eugene Domingo, and Mart Escudero, writes Nestor Torre in a February 2012 Inquirer column. In the aforementioned article, Diokno mentions how major studios picked up entries in last year’s Cinemalaya, with Star Cinema distributing Best Picture Winner “Ang Babae sa Septic Tank” (The Woman in the Septic Tank) and Regal Films acquiring “Ligo Na U, Lapit Na Me” (Star-Crossed Love), a romantic film directed by Erick Salud and based on the bestselling novel of the same title by Eros Atalia. Energize local movie industry for national development. Does this blurring of the divide between indie and mainstream mean the two worlds are ready to help each other out for the greater benefit of Philippine cinema? Some say yes, but panelists at this year’s Cinemalaya Film Congress still recalled stories

The point is, regardless of their intentions, the blurring of the divide is happening, and the best way to proceed appears to be in learning from each other and invigorating Philippine cinema through their collaborations.

Countries such as the U.S., Thailand, South Africa, and the U.K. all benefit from a booming local film industry, writes Diokno in 2011 in a January 2011 Philippine Star column following the Metro Manila Film Festival, through jobs created within the industry and in industries that support film productions. In Korea, the government’s strict laws promoting Korean movies has led not only to the popularization of Korean movies, music, and TV shows both domestically and abroad, but also an increase in demand for commodities that are grounded in Korean culture, such as clothes and food, even tourism and electronic gadgets. At the Cinemalaya Film Congress, insiders agreed that indie and mainstream must unite against a common enemy -- foreign films -- and called on the government to increase its support of the industry by reducing taxes – a death knell for many productions both big and small – and implementing laws that promote local movies. Says Tiongson, the government must start seeing the movie industry as a partner in stimulating national development and building national identity, instead of treating it as just another milking cow.

CONTENTS NATION WORLD BUSINESS TECHNOLOGY HEALTH/LIFESTYLE

News & Strategy Alerts Health/Lifestyle Artificial retina coming soon; mouse trials successful

to hypertension or hypertensive complication, according to the report. Morales said hypertension is the leading cause of death, followed by smoking.

In efforts to save its decaying US researchers say they will make a prosthetic retinal device that can restore people’s normal vision, after successful trials of the artificial retina on blind mice, according to an Aug. 15 GMA News article. Lead researcher Dr. Sheila Nirenberg, a computational neuroscientist at Cornell University said, "This is the first prosthetic that has the potential to provide normal or near-normal vision.”

Hypertension increases the risk for stroke, heart failure, and renal failure, Morales explains adding that first treatment for hypertension is still lifestyle modification, including smoking cessation, exercise and good nutrition.Controlling blood pressure lowers the risk of a stroke by 30-35% and heart failure by more than 50%, he added.

According to an Aug. 13 news release from Cornell University, the result of the research provides hope for 25 million people worldwide who suffer from blindness due to diseases of the retina. Data from World Health Organization’s fact sheets indicate there are 285 million people worldwide who are visually impaired. Of that total, 39 million are blind and 246 have low vision.

30% of PHL deaths due to heart, vascular disease; 25.7% of Pinoys hypertensive About 30% of total deaths in the Philippines are due to heart and vascular diseases, Philippine Society of Hypertension President Dante Morales said during a press launch for medicine for high blood pressure, as reported by GMA News on Aug. 16. Citing results of the 2008 National Nutrition and Health Survey, Morales said one in every four Filipino adults (25.7%) has hypertension. Some 41,000 deaths in 2008 were due

FPJ now a National Artist President Benigno Aquino III formally conferred the title of National Artist for Cinema on the late actor-director Fernando Poe Jr. popularly known as “FPJ,” on Aug. 16, six years after he was bestowed the honor, as reported by The Manila Times on Aug. 17. Poe won the Filipino Academy of Movie Arts and Sciences’ Best Actor award seven times. He died on December 14, 2004, following complications from a stroke.

The late actor-comedian Rodolfo Quizon, popularly known as “Dolphy,” has been nominated for this year’s Order of National Artists, according to a July 11 Philippine Daily Inquirer report. Quizon passed away on July 10 due to multiple organ failure.

Largest-ever tobacco study finds 'urgent need' for policy change Findings from the largest-ever international survey on tobacco use conducted by the World Health Organization (WHO) show that nearly half of all men and more than 1 in 10 women are smoking in many developing countries, as reported in Time magazine on Aug. 17. According to WHO, nearly 6 million people die from tobacco-related causes each year and a billion people could die around the world in this century if current trends of tobacco use prevail.

In a ceremony held in Malacanang’s Rizal Hall, Poe’s widow, actress Susan Roces, and his daughter Mary Grace Poe-Llamanzares, who is chairman of the Movie and Television Review and Classification Board, accepted the award on Poe’s behalf.

The authors of the new study, the Global Adult Tobacco (GATS) Survey, find an urgent need for tobacco policy and regulation change in developing nations. According to GATS, which looked at the smoking trends at 14 low- and middle-income countries -- including the Philippines -- while tobacco use is declining in industrialized countries, it remains strong — or is even increasing — in low- and middle-income countries.

The Order of National Artists is the highest national recognition given to Filipinos who have made significant contributions to the development of Philippine arts; namely, Music, Dance, Theater, Visual Arts, Literature, Film and Broadcast Arts, and Architecture and Allied Arts, as defined by National Commission for Culture and the Arts on its website.

The Department of Health, in a statement, cited WHO studies in saying that the Philippines leads the Southeast Asian countries in terms of smoking, according to an Aug. 17 Manila Times report. DOH had said that at least 17.3 million people smoke in the country, while 87,000 die of tobacco-related diseases annually, according to the report.

The

cenSEI Report

• August 20-September 2, 2012