TCR Volume 2 Issue No 38 by The CenSEI Report

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Volume 2 - Number 38 • November 12-25,2012

NATION

Strategic Analysis and Research by the

Center for Strategy, Enterprise & Intelligence If we fail to handle this [corruption] issue well, it could prove fatal to the party, and even cause the collapse of the party and the fall of the state ~ Chinese President Hu Jintao addressing the ruling Communist Party’s 18th congress Nov. 9, his last before stepping down next month after a decade in power … this country only works when we accept certain obligations ... among those are love and charity and duty and patriotism. That’s what makes America great ~ U.S President Barack Obama addresses Americans in his election victory speech

4 How the Government Lost ₱100 Billion

The Commission on Audit report for 2011 cites anomalies exceeding ₱100 billion, including under-collection of import duties and mismanaged stipends for the poor. What can be done to stop the irregularities and punish the perpetrators? • Corruption survey: Businesses and citizens see less sleaze with Tuwid na Daan • The taxman cometh: How different countries boost collections and transparency

WORLD

14 Global Economy Update: Slower and Scarier

Public debt crises in Europe and the U.S. continue to hold back world recovery, with China and India’s slowdown further dragging the planet’s economy. Slightly faster growth is forecast next year — if Europe doesn’t get worse and America avoids a looming public spending crunch in January • Oil to dip slightly, metals to rise: Fears of an economic slowdown along with uncertainty over monetary stability

BUSINESS

24 Going… Going… Gone!

Leading global fine art houses like Christie’s and Sothebys are seeing fast growth in Asian art auctions as the region’s cash-flush tycoons and institutions amass collections of masterpieces old and new • Top dollar: Chinese and Western masters fetch millions • The Manila scene: Exhibits and auctions for the Filipino collector

TECHNOLOGY

32 The Social Media of Politics

As more and more Asians spend more and more time online, social media will increasingly become the political campaigner’s weapon of choice. The battle for clicks, likes and tweets is on • On the e-hustings: Filipino candidates go online for votes • The Obama mystique: Lessons from the 2008 victory

HEALTH/LIFESTYLE

44 When Parents Push Children Too Much

Parental guidance and pressure have long been touted as key to the high achievements of Asians in school, stage and sport. But pushy moms and dads have also driven children to misery and even suicide.

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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.

Ups and Downs on the Road of Asia’s Climb That Asia is rising to the peak of the planet may be earth-shaking, but not news. What remain full of surprises, both pleasant and painful, however, are the gyrations of the path to greater wealth, freedom, knowledge and confidence. From the joys of collecting great art to the strains of parental pressure to achieve, both discussed in The CenSEI Report this issue, the continent’s march of progress is clearly far from smooth. Asia’s resurgence, of course, is economic, first of all: their world-pacing growth and the West’s debt debacles have given Asian nations the lead in global wealth creation. But as the World update on 2012-13 prospects explains, fiscal woes in America and Europe still endanger recovery and even financial stability. In sum, before Asia claims the world economic throne, there is much blood to be spilt among businesses and communities. Government, too, for citizens and investors now demand integrity, transparency and accountability from those in charge in both public and private sectors. So expect more reports like that of the Philippines’ Commission on Audit, summing up some ₱100 billion in irregular transactions by state entities in recent years till 2011. The Nation story on the COA study proposes initiatives to hold officials accountable and avoid future anomalies. A richer, smarter and freer Asia demands and deserves no less. Speaking of freedom, Asia watchers wondering if democracy will surge or stall in the region should ponder Myanmar. The once militarized state is seeing one-person-one-vote pay off as Western sanctions drop out and global investors pop in. Even China’s millennia-old autocracy is feeling the pressure of e-communities discussing and disseminating matters unsanctioned by Beijing mandarins. So our Technology article on political campaigning via the Internet may well be a harbinger of the future for Asia. Two bounties of affluence are learning and culture — the subjects in Business and Health/Lifestyle. The multiplication of millionaires in Asia has escalated spending on culture, from the building of theaters and concert halls to the amassing of masterpieces old and new, Western and Asian. Global dealers of fine art have seen fast-growing sales in the region, as recounted in the Business story on burgeoning art auctions. As for learning, as Asia moves up to higher-value, knowledge-intensive industries, the key to personal and national success will be topnotch education. No wonder the region’s parents keep pressing their kids to excel in school, as Health/Lifestyle reports, maybe a little too much. But to many Asians, that’s the price of achieving success and keeping it.

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Corruption in 2011: A Remnant of the Past, or Just the Latest Edition? More than two years into its ‘daang tuwid’ (straight road) crusade, the Aquino administration tries to put corruption in the bureaucracy in the rear-view mirror By Mary Grace V. Pulido

he Philippine government lost more than P101 billion to graft last year – this headline bannered on a number of broadsheets on the first weekend of October this year, pegged to the release by the Commission on Audit of its audit of 61,418 government agencies for the year 2011. However, a day after this news came out, COA chairwoman Maria Gracia Pulido Tan clarified that the Audit Performance Summary Report for 2011 covered periods before 2011—necessarily including the preceding administration of Gloria Macapagal Arroyo.

COA’s legal mandate. Article IX-D, Section 2 (1)

STRATEGY POINTS The national government’s losses can be attributed to various inadequate, irregular, and possibly corrupt accounting practices These practices, which occur at both the national and local levels, are not likely to be the exclusive province of any particular administration Transparency and accountability will be the keys to implementing the necessary bookkeeping and accounting reforms

of the Constitution vests the COA with the “power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters, and on a post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy xxx; (b) autonomous state colleges and universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the Government, which are required by law or the granting institution to submit to such audit as a condition of subsidy or equity.” The Audit Performance Summary Report for 2011 was submitted to the President and Congress in compliance with COA’s constitutional mandate to “submit to the President and Congress, within the time fixed by law, an annual report covering the financial condition and operation of the Government, its subdivisions, agencies, and instrumentalities, including government-owned or controlled corporations, and non-governmental entities subject

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Corruption in 2011: A remnant of the past, or just the latest edition?

to its audit, and recommend measures necessary to improve their effectiveness and efficiency.” This is the basis of Section 41 of Presidential Decree 1445, requiring the COA to submit such audit to the President and Congress before the last day of September of each year.

What the report contained. The state auditing

agency revealed in its report, particularly in Table II.7-A, that the government incurred huge losses due to violations of laws, rules and regulations which include, among others, under-assessment and undercollection of taxes and dues, unauthorized, irregular or unnecessary expenses, irregular procurement,

initialized or ineffective projects, and un-liquidated cash advances. As seen in Table II.7-A of the COA report, the biggest losses of the government were incurred from 157 cases of under-assessment or undercollection totaling P20.81 billion, followed by 1,642 cases of unauthorized, irregular, or unnecessary expenses totaling ₱18.65 billion. Procurement with no bidding or in violation of law came in next, totaling ₱15.1 billion. Spending funds on initialized or ineffective projects came up to ₱13.5 billion, and unliquidated cash advances and fund transfers totaled ₱14.3 billion.

common audit findings with pecuniary loss Total

Auditing Concern

No.of Findings

Amount (in Million Pesos)

1. Unauthorized/Irregular/Unnecessary expenses

1,542

18,653.516

2. Unliquidated Cash Advances

1,003

7,534.153

692

15,163.353

3. No bidding / Not in Accordance with Procurement Law 4. Underassessment/Undercollection

157

20,813.224

5. Unutilized/Ineffective Projects

104

13,583.533

6. Lack of appropriation

100

525.363

7. Unliquidated Fund Transfer

6,800.313

8. Delayed remittance/unremitted withholding tax/loans/premiums of employees and other trust liabilities

750.910

9. Non-existent cash/unaccounted assets

1,199.753

10. Unimplementation of projects/suspended projects

3,276.235

11. Shortages and malversation of funds

282.327

12. Delayed implementation of projects/suspended projects

2,554.056

13. Unremitted/Uncollected income/Accounts Receivables

3,511.810

14. Overpricing /excessive contract cost

1,117.419

15. Unsettled Suspensions/Disallowances/Charges

203.750

16. Fictitious claims/expenses

5,198.772

17. Untitled land puchased/owned

390.671

18. Undeposited collections

149.658

19. Unrecouped advances/mobolization

107.860

Table from Commission on Audit, “Audit Performance Summary Report for 2011”

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The COA audit report itself also showed that aside from these violations of state laws, rules and regulations, the government also incurred losses due to weak internal controls and administrative lapses. Adding up the amounts in Table II.7-B reveals that the government incurred ₱2.42 trillion worth of losses in 2011. These administrative lapses range from the failure to maintain ledgers, misclassification/misstatement of accounts, non-compliance with Memorandum of Agreements or circulars, failure to prepare inventory reports, and even failure to physically count supplies and equipment. The worst administrative lapse that cost the government came from the 239 cases of failure to maintain Subsidiary Ledgers (SLs) or reconcile these ledgers with General Ledgers (GLs) along with unsupported balances and dormant accounts, all worth ₱2.04 trillion. That was followed by 229 cases of misclassification or misstatement of accounts worth ₱128.03 billion. Also contained in the report were several findings about the national and local governments’ unaccounted funds. In the national government sector, the audit found that

the government’s popular Conditional Cash Transfer (Pantawid Pamilyang Pilipino) program showed unaccounted funds amounting to ₱3.770 billion, while the Bureau of Customs posted an unaccounted ₱1.902 billion of tax credit certificates. Also, the DBM cannot account for about ₱2.609 billion of the Special Account in the General Funds released to local government units. The local government sector also contributed to losses. These findings include the failure of the cities of Manila, Marikina and Pasay to set aside 5% of their income for disaster management, in accordance with the Philippine Disaster and Risk Reduction Management Act of 2010,. The City of Manila was also unable to eliminate the insufficiency of cash incurred in 2011. The Tarlac City government also misapplied trust collections, and the city’s obligations were also not paid on time, according to the audit report. Of course, unutilized and misused Priority Development Assistance Funds were not missed by the COA, particularly in Regions VII, XI and NCR. These are just some of the anomalies found by the COA in their audit of local government units.

common audit findings: weak internal controls and administrative lapses Total

Auditing Concern

No. of Findings

Amount (in million Pesos)

1. Delayed submission of contracts/accounts/preparation of F/S

501

1,291,504

2. Incomplete documentation/undocumented account balances

389

7,589,587

3. Failure to prepare/reconcile Inventory Report with balances per books

334

59,520,461

4. Failure to conduct/complete physical count of supplies and equipment

308

55,615,952

5. Failure to maintain SLs/Reconcile SLs with GL/Unsupported Balances/ Dormant Accounts

239

2,039,855,987

6. Misclassifications/misstatement of accounts

229

128,029,547

7. Failure to prepare BRS/unreconciled book and bank balances

139

8,361,768

8. Weal internal control

130

10,908,017

9. Lapses in operations/performance

17,561,162

10. Undisposed unserviceable property

369,418

11. Non-compliance with MOA/Agency Circular/Agency Policy/Covenants

91,767,700

Table from Commission on Audit, “Audit Performance Summary Report for 2011”

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Corruption in 2011: A remnant of the past, or just the latest edition?

The COA’s clarification and the Palace’s reaction. Reacting to news reports that the losses

were incurred by the government due to graft, COA chairwoman Tan immediately wrote a letter to the editor of the Philippine Star to clarify the contents of the report, emphasizing that “nowhere in the report was it stated that the amounts were lost to graft last year.” Commissioner Tan enumerated specific findings in the report that referred not only to the previous year 2011 but also to prior years. Among those findings she particularly pointed out in her letter, also verified by the audit report, is that of the unaccounted tax certificates of the Bureau of Customs worth ₱1.902 billion, which, the report said, has been “recurring in the previous years.” Malacañang officials themselves were quick to repost Tan’s letter to the Star on the website of the Office of the President. Palace talking heads say that the amount of losses incurred was from the administration of former President Gloria Macapagal Arroyo (where Tan had served as a Presidential Commission on Good Government commissioner and a Finance undersecretary). Deputy Presidential Spokesperson Abigail Valte confidently said in a press briefing that “Pecuniary loss does not necessarily result from graft, and it is only the courts that can make judgment of graft.” Valte further said that “It is up to the courts, not COA, to determine if these funds were indeed lost to graft.”

Transparency campaign. Interestingly, prior to the

release of this audit report by the COA, the Department of Budget and Management released National Budget Circular 542 designed to comply with Section 93 of Republic Act 10155 or the 2012 General Appropriations Act. The transparency seal provision requires government agencies to maintain a transparency seal on their official websites with additional information regarding the agencies’ mandate, annual reports, approved budgets and corresponding targets, programs and projects and status of such programs and projects, procurement plans and contracts awarded.

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The General Appropriations Act of 2012 makes mandatory the compliance with the Transparency Seal provision so as to make sure that the allocated budget for every agency is disbursed and used for the programs or projects for which it was appropriated. With the National Budget Circular 542, agencies are required to place the transparency seal on their websites subject to the monitoring of the DBM. As part of such compliance monitoring, Section 6.2 of the said circular empowers the DBM to conduct random audits to be done officially by the department’s Transparency and Information and Communications Technology Initiatives (DBM CIO). Reading the entire monitoring provision of the circular, the random audit meant to monitor the compliance in placing the transparency seal in the agencies’ websites. Compliance from various government agencies was quick, as they have put up the transparency seal in their official websites. Agencies which have already complied include the Department of Foreign Affairs, the Department of Environment and Natural Resources, the Civil Service Commission, and the Department of Trade and Industry.

No bidding/not in accordance with procurement law. While RA 9184 or the Procurement Act is clear

about bidding and awarding of government contracts for its projects, the failure to conduct bids and conduct of improper bids contributed largely to the government’s losses. The law, through the Government Procurement Policy Board as the implementing agency, seeks to create a transparent procurement process beginning from the planning of the procurement which should be within the agency’s budget. Section 7 of the law specifically provides that “Consistent with government fiscal discipline measures, only those considered crucial to the efficient discharge of governmental functions shall be included in the Annual Procurement Plan.” Procurement should be done through a competitive bidding process or through any of the alternative methods provided in the procurement law such as limited source or selective bidding, direct contracting,

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repeat order, shopping and negotiated procurement but resort to these alternative methods is allowed only under justified conditions. Under Section 65 of the procurement law, it shall be unlawful for any public officer to open any sealed bid, delay bids, unduly influence Bids and Awards Committees, split contracts, and show preference to any bidder. Private entities and individuals who submit irregular bidding documents and engage in prohibited bidding processes are likewise penalized by the procurement law. Public officials found to have performed acts contrary to the lawful bidding processes face criminal, civil and administrative liabilities.

Un-liquidated cash advances. Failure to

liquidate cash advances also posted a big amount of losses for the government which likens it to an unpaid creditor. In civil cases, an unpaid creditor has the remedy of specific performance or damages to enforce collection of the debtor’s obligation (Articles 1164, 1165, 1167, 1170 New Civil Code). For cash advances granted to disbursing officers for payroll and other specified legal purposes, COA Circular No. 97-002 must be strictly implemented. The COA itself must diligently perform its function to limit the cash advances allowed by disbursing officers. This failure contributes to the under-collection or underassessment of government receivables. With this measure, it should be easy for the government to recover what it has advanced to its officials or employees.

Unauthorized/irregular/unnecessary expenses. Another big contributor to government losses are the unauthorized or irregular expenses which is obviously a species of malversation of public funds. While the COA recommends that the agencies concerned should explain or justify their unauthorized expenses, criminal prosecution should likewise follow.

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Article 217 of the Revised Penal Code provides that malversation is committed “by any public officer who, by reason of the duties of his office, is accountable for public funds or property, shall appropriate the same or shall take or misappropriate or shall consent, through abandonment or negligence, shall permit any other person to take such public funds, or property, wholly or partially, or shall otherwise be guilty of the misappropriation or malversation of such funds or property.” Thus, whether the government agencies released funds due to fictitious claims, it carries with it the liability for malversation. Unremitted or uncollected income or accounts receivables also fall under the crime of malversation while lack of appropriation is penalized by the same Code as technical malversation under Article 219. All these involve the wastage of public funds and when its respective amounts are added the losses are big. Enforcement of penalties for the above unlawful acts concerning accountable officials is without prejudice to their liabilities under RA 3019 or the Anti-Graft and Corrupt Practices Act. The duty to investigate and prosecute these erring officials falls in the lap of the Ombudsman who shall later file the appropriate charges either to the Regional Trial Courts or the Sandiganbayan (for Salary Grade 27 or higher).

Under-assessment or under-collection.

Taxes form a big a chunk of the receivables of the government. The Attrition Law is actually a promising measure to encourage the collection of higher revenues through rewards and incentives to collecting agencies. The law provides that, “the fund sourced from the collection of the BIR and the BOC in excess of their respective revenue shall be automatically appropriated the year immediately following that year when the targets are exceeded.” Unfortunately, this is not enough to increase revenue collection as the government is still battling with the issue of whether or not to increase sin taxes, again intended to increase revenues.

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Corruption in 2011: A remnant of the past, or just the latest edition?

ENTERPRISES SAYINGSAYING THERETHERE IS “A LOT” CORRUPTION ENTERPRISES IS “AOF LOT” OF IN THE PUBLIC SECTOR, BY AREA, 2009 AND CORRUPTION IN THE PUBLIC SECTOR, BY ARE, 2009 2012 AND 2912

Perspectives on corruption

The

NCR

ANG

CLB

56 40

ILO

CEB

DAV

CDO-I

CHART 2

ENTERPRISES VS. GEN. PUBLIC: EXTENT OF CORRUPTION IN THE PUBLIC SECTOR, 2012 Enterprises None 0.2% A little

A little

13%

11%

A lot Some

Gen. Public None 5% A lot

Some

42%

51%

33%

45%

ENTERPRISES VS. GEN. PUBLIC: COMPARING THE DEGREE OF GRAFT AND CORRUPTION UNDER PNOY ADMIN VS PGMA ADMIN, 2012 Same as before

More now 25%

More now Same as before

3% Less now

5% 29%

71%

Less now 64%

Base: Those who say there is corruption in the public sector

ENTERPRISES VS. GEN. PUBLIC: EFFECTIVENESS OF THE STEPS TAKEN BY PNOY ADMIN TO ERADICATE GRAFT AND CORRUPTION Enterprises Not at all effective Very effective 3% 13% 19% 65%

Hardly effective

Gen. Public Not at all effective 6%

Hardly effective

Somewhat effective

Very effective 16%

25%

52% Somewhat effective

Base: Those who say there is corruption in the public sector

Charts from 2012 SWS Survey of Enterprises on Corruption presentation, Social Weather Stations, Sept. 18, 2012

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Partial Results as of 14 September 2012

President Aquino is consistent in his claim that he has eradicated corruption in the country by a large extent compared to his predecessor. As regards this claim, 65% of the executives and 52% of the general public believe that his efforts to rid the government of corruption are somewhat effective (Chart 4).

CHART 3

Comparing the Aquino administration with the Arroyo administration, 71% of executives believe that there is less corruption in the present administration. As to the general public, 64% believe that there is less corruption now than in the previous administration (Chart 3).

Partial Results as of 14 September 2012

From the executives interviewed, 42% say that in 2012, there is a lot of corruption in the public sector compared to the 64% who said so in 2009 (Chart 1). This 42% figure is less compared to 51% of the general public who say that there is a lot of corruption in the public sector (Chart 2).

2012

63 51

All areas

CHART 4

At the Second Integrity Summit held last September, survey firm Social Weather Stations released its preliminary report on the 2012 SWS Survey of Enterprises on Corruption wherein executives of 826 out of the target 950 companies in sample areas nationwide were interviewed on the matter of corruption in the public and private sectors in the country.

CHART 1

2009 70

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One of the COA’s recommendations in its report is with regard to the delayed or non-remittance of taxes withheld of employees. It recommended that government agencies should follow strictly the provisions on withholding of taxes and remit the same within the prescribed period. This recommendation is parallel with the World Bank’s view -- as discussed in the Corruption & Fiscal Stability section of its Anticorruption page -- which maintains that corruption in revenue administration will decrease if the opportunities for corruption in tax administration are itself reduced.

According to the primer, “The adverse budgetary consequences of corruption are especially devastating for developing countries. It reduces the amount of public money in state coffers by decreasing state revenue (through losses in tax and customs income) while promoting wasteful spending.” The primer goes on to say that “One of the main ways in which corruption reduces state funds is through its negative effect on tax income by opening up loopholes in tax collection,” and that the lack of transparency and accountability gives

Other countries attempt to stem losses, improve accountability Other countries have begun to rethink their policies and strategies to prevent losses in their national coffers and improve revenue collection. A concrete example is that of India’s policy on customs self-assessment. India’s Central Board of Excise and Customs issued Circular No.17/2011 last year as an implementing measure of the Finance Bill 2011, which mandates self-assessment of Customs duty with respect to imported and export goods by the importer or exporter. The government of India even provided for a Customs Manual to better inform the people in its jurisdiction. In this customs measure of India, it is the importer or the exporter of goods that makes a selfassessment of duties and is recorded in a Bill of Entry, which is an electronic bill, or Shipping Bill that may be subject to verification with regard to correctness of classification, value, and rates of duty, and exemptions. A new feature of this measure is that self-assessment may be conducted on the importer’s premises. Nonetheless, when the importer or exporter is not able to determine the amount of duty liability or no self-assessment is done, the said importer or exporter can request a proper officer for assessment of the duties.

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In the above two cases, a provisional assessment may be selected by the importer or exporter. This new tax measure would result in two outcomes: when there is no self-assessment, the provisional assessment becomes the final assessment and when there is self-assessment, the provisional assessment becomes the re-assessment. In the Philippines, customs duties are assessed by the customs assessor and then paid first by the importer and a legal permit for withdrawal must first be secured before the goods are released (Sec. 1202, Tariff and Customs Code), unlike in India, where the self-assessment may be conducted on the importer’s premises. The only aspect where the importer’s good faith is tested is during the filing of the import entry, necessary invoices and declarations and the filing of claims for payment of drawbacks. Fraudulent filing of these documents constitutes fraudulent practices enumerated under Sec. 3602 of the Tariff and Customs Code. After the customs appraisers’ findings and appraisals are approved by the Collector of Customs, liquidation of the necessary duties is incumbent upon the importer (Sec. 1601, TCC). Looking at these, it might be good for the Philippine government to consider

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Corruption in 2011: A remnant of the past, or just the latest edition?

rise to cases where politicians take advantage of their office to pocket public funds. Credit should be given to the DBM’s circular to require compliance with the GAA’s transparency provision. Indeed, the Aquino administration’s efforts to enforce transparency in all of the government’s agencies sounds like the proper response to the problem. The only question is, can it really solve what would seem to be an entrenched and maybe even cultural problem?

self-assessment of customs duties. The only problem is both the importer’s and the appraiser’s honesty.

How Australia does it. The Australian government

passed the Federal Financial Relations Act 2009 aimed at delivering services by the states through efforts such as general revenue assistance to be used by the States for any purpose and national specific purpose payments. The Australian States are given a part of the Goods and Services Tax revenue based on the State’s population. The national government (referred to as the “Commonwealth”) is assured of the proper use of the grants since the Act provides, “if the State does not fulfill a condition in respect of the payment, the State will, if the Minister so determines, repay to the Commonwealth the amount stated in the determination.” Its assurance of repayment is further strengthened by the provision that, “An amount payable by a State to the Commonwealth under this Act is a debt due by the State to the Commonwealth.” Overall, the Australian government believes that, “This improves the public transparency of these payments and the ability of the Parliament to scrutinise the payment arrangements.”

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News & Strategy Alerts Nation The tough war against human trafficking

The U.N. Special Rapporteur says even with high-profile anti-trafficking measures, the problem has not declined in the Philippines Main reasons are poor law enforcement, low number and incapacity of labor inspectors, and lack of accurate data on victims, among others The government should establish a specialized court for trafficking cases, scale up prevention initiatives, address the root causes of trafficking, strengthen the country’s border control and use social media in information campaigns Despite the government’s anti-human trafficking measures such as enacting legislation and bilateral agreements with stakeholders, United Nations Special Rapporteur Joy Ngozi Ezeilo said the problem has not declined, as reported by the Philippine Daily Inquirer. She met with government officials and civil society groups and concluded that the prosecution remained low and the root causes of trafficking — poverty, youth unemployment, gender inequalities, and demand for cheap and exploitative labor — were not being effectively addressed. Ezeilo criticized the lack of standardized collection of information and accurate data on victims, low number and incapacity of labor inspectors, and insufficient knowledge and skills among government authorities to identify cases of human trafficking. She also said enforcement of the law and assistance of victims “is not uniform” and depends on the political will of the local government. Figures from a local nongovernment organization, The Visayan Forum, which works for the welfare of marginalized migrants, put the number of trafficked

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persons yearly at around 200,000, cited in a TV5 online news portal Interaksyon report.

Anti-Trafficking in Persons Act of 2010 which amends provisions of the Anti-Trafficking of Persons Act of 2003, the Manila Bulletin reported last month. The bill includes the crime of attempted trafficking, whether by recruiting, transporting, selling, buying and forcing women and children to engage in prostitution or any other degrading means. The bill awaits the President’s signature.

Statistics provided by the government’s Inter-agency Council Against Human Trafficking (Iacat) as of Oct 10, 2012, show there are 100 persons convicted of human trafficking cases since 2005. Seventy of them were convicted under the present administration. TOTAL NUMBER OF CONVICTIONS FOR HUMAN TRAFFICKING, 2005- 2012 Year

Number

Number of Persons Convicted

2005

2006

2007

2008

2009

2010

2010 (up to June)

2011 (from July 1)

2012 (up to Dec 31)

Total

100

Table fromThe Inter-agency Council Against Human Trafficking , October 2012

In the U.S. State Department June 2012 Trafficking in Persons Report, the Philippines maintained its position under Tier 2 listing “countries whose governments do not fully comply with the minimum global standards to eliminate trafficking, but are making significant efforts to bring themselves into compliance with those standards.” In 2010, the Philippines was on the Tier 2 Watch List, which included countries having the most number of human trafficking victims and with less government effort to stop forms of human trafficking. Last year the Philippines was upgraded to simply Tier 2. Failure to combat human trafficking could mean withdrawal of non-humanitarian, non-trade aid from the U.S. To strengthen the fight against human trafficking, the Senate passed on third and final reading the Expanded

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The move should help the government curb the rampant trafficking of overseas Filipino workers. Based on a Sept. 2012 Inquirer report, Iacat said about 80% of the 1,800 OFWs brought home from Syria were victims of human trafficking, many of them were between 13 and 18 years of age when illegally deployed in the strifetorn country. How can the country win the battle against human trafficking? Ezelilo said the government should establish a specialized court for trafficking cases, scale up prevention initiatives, address the root causes of tracking, and strengthen the country’s border control. She called on the Department of Tourism to monitor compliance by hotels, travel agencies and other tourist operators of the agreements against sexual tourism. The U.N. envoy likewise urged the government to use “new technologies” such as social media in rolling out massive information campaigns against human trafficking. And of course, put those traffickers behind bars.

New 600-MW power plant in Bataan GN Power is set to start up its new coal-fired power plant in Bataan by early 2013 Though the power plant addresses future energy demand, the company must be comply with all environmental safety requirements to avoid social resistance

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A 600-megawatt coal-fired power plant is targeted to go on full commercial operations in Bataan by early next year, an Oct. 29 Philippine Daily Inquirer report says. GN Power Ltd., a joint venture between NauruanAmerican firm Power Partners Ltd. Co. and Filipino firm PMR Holding Corp., plans to start testing and commissioning on Nov. 5. The plant is a welcome development to address present and future energy needs. Based on the Power Development Plan 2009-2030 of the Department of Energy (DOE), the country’s power demand is projected to increase from 55,417 GWH (Gigawatt-hours) in 2008 to 86,809 GWH by 2018 and 149,067 GWH by 2030. These translate to peak demand of 9,226 MW in 2008 rising to 14,311 MW by 2018 and 24,534 MW by 2030. On top of future demand, about two-fifths of present facilities must be replaced over the next 18 years, by DOE projections, to avoid many hours of daily power interruptions, as Mindanao suffered in recent years, and Luzon in the first Aquino administration. In terms of achieving energy self-sufficiency, the increase in coal-fired power plants to generate power may do little. The Philippines must still rely on coal imports from Indonesia and Malaysia, because local coal has usually beeb used only as fillers due to its low grade. However, the DOE now contends there is domestic coal of “such quality” that can be used without any coal preparation or blending with imported coals. Among these, the DOE says, are deposits being mined in Malangas by the Philippine National Oil Company (PNOC) with a Taiwan partner, in Southern Cebu by Ibalong Resources and Development Corporation (IRDC), and in Batan Island in the north by Rock Energy International Corporation. Coal has the highest contribution to the power generation mix at 34% in 2010, based on the DOE’s Philippine Power Sector Situationer.

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Mothballed Bataan nuclear plant: Its scrapped 600-MW capacity will now be generated by coal

Still, the entry of the P44-billion coal plant in the energy generation sector creates competition that could moderate electricity rates in Luzon. It will give consumers the power to choose from which generation and distribution firms to source energy — a key thrust of the Electric Power Industry Reform Act of 2001 (Epira, RA 9136). At present, the Lopez Group’s First Gen Corp. and its partners dominates power generation in Luzon, although San Miguel’s Global Power Holdings is the biggest nationwide. Both power supply and affordability will be served by having more generating plants. Hence, it is imperative to attract more ventures like GN Power. There is also a need to review restrictions on foreign ownership of utilities, to harness more outside capital, expertise and management in addressing energy needs and breaking the dominance of top power suppliers. The move by GN Power Ltd. may garner some criticism from environmental groups, especially since many countries are already veering away from fossil fuels toward renewable energy. In response, the company should make sure that they comply with all environmental safety requirements to avoid social resistance. In turn, the government must also continue to explore indigenous sources of energy, especially renewable energy. In 1986, the first Aquino regime scrapped the Bataan nuclear plant, but never replaced its 600-MW capacity, leading the nation to blackouts. Now, coal will finally make up the gap.

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The Global Economy Slow Down â&#x20AC;&#x201D; Cliff Ahead By Victoria Fritz

STRATEGY POINTS The International Monetary Fund has slightly lowered global economic growth projections for 2013 to 3.6% as of its October 2012 report The U.S. and China are showing signs of improvement, but the euro zone remains in recession As of October projections, oil prices will go down in 2013, while gold will rise significantly

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The global economy: Slow down — cliff ahead

orld economic growth for 2012-13 is now expected to be lower than earlier projections released in July, according to the International Monetary Fund. In July, the IMF had estimated that the global economy would grow 3.5% in 2012, and 3.9% in 2013. According to the IMF’s latest projections released in October, the overall increase in the world’s output for 2012 will be lower at 3.3%, with a slight uptick to 3.6% for 2013. One key reason cited for the setback is the failure of policies in major advanced economies to rebuild confidence in medium-term prospects. Concerns over the euro crisis, and major U.S. fiscal policy mistakes remain an investor concern.

Angel Gurria issued a joint statement on Oct. 30, as reported by Reuters, pointing out that “global economic recovery remains uncertain.” Market confidence has not returned to pre-crisis levels due to the uninspiring growth forecasts and pervading uncertainty. They emphasized the need for budget and structural reform to revive growth. Meantime, Lagarde advised emerging economies to loosen fiscal and monetary policies to allow more growth.

More of the same. This piece of advice was an

echo of observations made earlier by Goldman Sachs chief economist for global investment research, Jan Hatzius. In August, Hatzius shared his midyear outlook, courtesy of the following video link:

Advanced economies will continue to display lackluster performance, in contrast to a stronger output from emerging market and developing economies. The positive, albeit modest, forecast rests heavily on two assumptions: a. Europe “will adopt policies that gradually ease financial conditions further in periphery economies” through stabilizing banking mechanisms b. The United States will avoid the socalled “fiscal cliff” (explanation provided here by Financial Times Lexicon), which refers to automatic tax increases and spending cutbacks by January 2013 unless Congress replaces them with lessdrastic alternatives More recently, German Chancellor Angela Merkel, IMF head Christine Lagarde, and Organization for Economic Cooperation and Development head

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Jan Hatzius, U.S. chief economist for Global Investment Research, Goldman Sachs, provides his midyear outlook for the world economy

Hatzius observed that the slowdown in emerging markets in 2011 and the first half of 2012 was due to fiscal and monetary tightening to address overheating. With inflation significantly lower now, he saw a loosening of policy to foster growth toward the end of 2012. He noted that the euro crisis would continue through 2013, with peripheral economies staying in recession while the core countries register mild growth. The U.S. gross domestic

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product will grow a mere 2%, not enough to lower the unemployment rate (currently 7.9%) to the 6% level associated with full employment. In its latest forecast, the IMF discussed prospects in detail and by region.

On the whole, global manufacturing slowed sharply, according to the IMF report. In Europe, peripheral economies saw a marked decline in activity. Activity has also been disappointing in the U.K. and the U.S. These factors, in turn,

OUTPUT BY REGION, 2010-2013 Year Over Year Projections

Difference from July 2012 WEO Update

2010 5.1

2011 3.8

2012 3.3

2013 3.6

2012 -0.2

2013 -0.3

3.0 2.4 2.0 4.0 1.7 1.8 -0.3 4.5 1.8 3.2 5.9

1.6 1.8 1.4 3.1 1.7 0.4 0.4 -0.8 0.8 2.4 3.2

1.3 2.2 -0.4 0.9 0.1 -2.3 -1.5 2.2 -0.4 1.9 2.1

1.5 2.1 0.2 0.9 0.4 -0.7 -1.3 1.2 1.1 2.0 3.0

-0.1 0.1 -0.1 0.0 -0.2 -0.4 -0.1 -0.2 -0.6 -0.2 -0.4

-0.3 -0.1 -0.5 -0.5 -0.5 -0.4 -0.7 -0.3 -0.3 -0.2 -0.4

8.5

4.0

2.1

3.6

-0.6

Emerging Market and Developing Economies

7.4

6.2

5.3

5.6

-0.3

-0.2

Central and Eastern Europe Commonwealth of Independent States Russia Excluding Russia Developing Asia China India

4.6 4.8 4.3 6.0 9.5 10.4 10.1

5.3 4.9 4.3 6.2 7.8 9.2 6.8

2.0 4.0 3.7 4.7 6.7 7.8 4.9

2.6 4.1 3.8 4.8 7.2 8.2 6.0

0.1 -0.1 -0.3 0.2 -0.4 -0.2 -1.3

-0.2 0.0 -0.1 0.2 -0.3 -0.2 -0.6

ASEAN-5 Latin America and the Caribbean Brazil Mexico Middle East and North Africa Sub-Saharan Africa South Africa

7.0 6.2 7.5 5.6 5.0 5.3 2.9

4.5 4.5 2.7 3.9 3.3 5.1 3.1

5.4 3.2 1.5 3.8 5.3 5.0 2.6

5.8 3.9 4.0 3.5 3.6 5.7 3.0

0.0 -0.2 -1.0 -0.1 -0.2 -0.1 0.0

-0.3 -0.3 -0.7 -0.2 0.0 0.0 -0.3

World Output Advanced Economies United States Euro Area Germany France Italy Spain Japan United Kingdom Canada Other Advanced Economies Newly Industrialzed Asian Economies

Table from “World Economic Outlook October 2012,” International Monetary Fund, chapter 1 page 2

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The global economy: Slow down — cliff ahead

have adversely affected emerging markets and developing economies, which also have difficulties of their own. The Euro crisis has intensified. In response, leaders in Europe have launched work on banking union, and the European Commission has proposed establishing a single supervisory mechanism. This would allow the European Stability Mechanism, which was established in February this year, to take direct equity stakes in banks, which will help break the adverse feedback loops between sovereigns and banks. For the U.S. economy, the IMF report noted a weak output and employment picture, with real GDP slowing down to 1.7% in the second quarter. On the positive side is the stabilizing housing market, together with expanding private credit. This news has since been updated with the latest jobs report and release on economic indicators. The U.S. Bureau of Labor Statistics reported on November 2 an increase of 171,000 in total nonfarm payroll employment, with unemployment rising slightly from 7.8% to 7.9%. According to a Bloomberg news report on November 3, this increase in the number of employed is higher than the most optimistic forecast of 125,000 new jobs. Consumer confidence in the U.S. is also at its highest level in four years, reported CNNMoney last November 1, which pointed to an improved job market as the cause. The indicator increased to 72.2, from 68.4 in September. One offshoot of this was an increase in auto sales in October, although Hurricane Sandy dampened the month-end figures. Overall, as the U.S. and China show signs of improvement, the bleak spot in the global economic

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picture is Europe. This is the view of Ben Rooney of CNNMoney in a November 2 report. China is increasing factory output, while the weakness of the European economy continues. In October, the United Nations Department of Economic and Social Affairs presented its LINK Global Economic Outlook 2012-2014, in which it saw a renewed global economic slowdown with a high risk of a downward spiral into a new global recession. The main culprit: the vicious cycle of fiscal austerityhigh unemployment-household debt deleveragingfinancial sector fragility-low growth, coupled with feeble policy efforts to break out of the vicious cycle. (see chart below)

Developed Economy Vicious Cycle HIGH UNEMPLOYMENT

FISCAL AUSTERITY & SOVEREIGN DEBT RISK

LOW GROWTH TRAP

DELEVERAGING BY FIRMS & HOUSEHOLDS

FINANCIAL SECTOR FRAGILITY

Graphic from “LINK Global Economic Outlook 2012-2014,” presentation by United Nations Department of Economic and Social Affairs, October 2012

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The jobs crisis continues – unemployment rising in euro area

Feeble policy efforts to break out of Vicious Cycle FED QUANTITATIV E EASING

HIGH UNEMPLOYMENT

FISCAL AUSTERITY & SOVEREIGN DEBT RISK

ECB OUTRIGHT MONETARY

LOW GROWTH TRAP

CONTINUED E.U. AUSTERITY

DELEVERAGING BY FIRMS & HOUSEHOLDS

FINANCIAL SECTOR FRAGILITY

DEBT DYNAMICS

Among the danger signs: unemployment rising in the euro zone area, and a marked slowdown in global trade.

For its part, the Asian Development Bank (ADB), in its October update, presented deflated growth forecasts for Asia and individual countries. GDP FORECAST FOR 2012-2013, ASIA, CHINA, AND INDIA

A closer look at Asia. According to the IMF’s

“Regional Economic Outlook” October update for the Asia and Pacific region: “Adverse trade spillovers from weakness in the euro area and beyond have taken their toll on Asian exports.” While real GDP growth averaged 5.5% in the first half of 2012, it was the lowest rate since the 2008 global financial crisis. The main culprits: an engineered slowdown in China, weakened investor sentiment adding to supply constraints in India, and a slowdown in consumption in Japan after a policy-driven pickup in early 2012.

GDP Forecast for 2012

April ‘12

Oct ‘12

Asia

6.9%

6.1%

China

8.5%

7.7%

7.0%

5.6%

April ‘12

Oct ‘12

Asia

7.3%

6.7%

China

8.7%

8.1%

India

7.5%

6.7%

India GDP Forecast for 2013

TCR compilation from “Regional Economic Outlook,” October update, Asian Develpment Bank

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The global economy: Slow down — cliff ahead

Spillover effects: Global trade has slowed markedly

Chart and two graphs from “LINK Global Economic Outlook 2012-2014,” presentation by United Nations Department of Economic and Social Affairs, October 2012

Basically, the ADB report mirrors that of the IMF report for October, with lowered projections for 2012 and 2013, and an emphasis on the risks posed by the ongoing euro crisis and the looming fiscal cliff in the U.S. With weakness in the major industrial economies putting a damper on emerging market exports, the ADB advises Asian countries to rely more on enhancing productivity and efficiency. Development of the service sector can play a significant role in this program. Reporting on this update, a Reuters news item noted that the service sector contributes nearly half of the region’s GDP, and employing 34% of developing Asia’s workers. Major obstacles to this include lack

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of human capital and inadequate infrastructure. Policy reform should also take place in the form of loosening restrictive government regulations that stifle competition and innovation. Goldman Sachs Chairman of Asset Management Jim O’Neill’s view on China as of October 19 was mostly positive. The Consumer Price Index (CPI) rose by 1.9% in September, way below the 4% target. This signals a lowered risk in future inflation. Inflation is expected to ease further. GDP rose 7.4% year-on-year, as expected. GDP has risen 7.7% for the first three quarters of 2012, which puts China in position to meet their 7.5% target for 2012, and may even exceed it. Industrial production rose by 9.2%, better than expected. Likewise, retail sales

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rose way above expected at 14.2%. Coupled with the moderate CPI, this points to a real increase in retail sales, and rising consumer confidence. Among the emerging markets, India is now in a vulner able investment-grade position, as reported by Forbes in August. Fitch ratings announced that the country was at risk of being stripped of its investment-grade status in the next 12 to 24 months, due to a high level of government debt over GDP, at 66%, and a low tax revenue intake. It advised that further structural reforms be put in place to prevent India’s medium- and long-term growth potential from gradually deteriorating. India’s National Council of Applied Economic Research, in its Nov. 2 quarterly seminar on the state of the economy, predicted that GDP growth for 2012-2013 would be 5.9%, 0.5 percentage point lower than the July forecast, and that growth of exports in dollar terms would be 7.9%, significantly lower than the 17.2% rate projected in July.

Kicking the can as a brick wall looms. For his

part, economist Nouriel Roubini, writing in Project Syndicate in September, sees a situation where good or even just better-than-expected economic news boosts financial markets, but so does bad news, “because it increases the probability that central-banking firefighters like US Federal Reserve Chairman Ben Bernanke and European Central Bank President Mario Draghi will douse the markets with buckets of cash.” The root problem, for him, is “ineffective governments with weak leadership” making short-term policy choices (in democracies, with their frequent elections) and resisting radical reforms that would reduce the power of entrenched lobbies and interests (in autocracies). The result: China, Europe, and the U.S. continuing to “kick the can” down the road with monetary, fiscal, and credit stimulus, but with a brick wall approaching.

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Oil pegged to fall, while metals rise in 2013 Reflecting general pessimism about projected global demand, oil prices in 2013 are pegged to drop, if slightly, from their 2012 levels. Metals, for their part, are pegged to rise, reflecting continued financial uncertainty. The U.S. Energy Information Administration, in its October 10 report, released its oil and energy price predictions for 2013. This, with a caveat that energy price forecasts are highly uncertain. A projected decrease, even though slight, would mean at least stable prices. Again, the EIA reiterated that it’s a highly volatile market. In September, oil prices fell by US$8 a barrel due to reports of increased production in Saudi Arabia, and statements that it preferred lower prices brought down futures prices. Also, disappointing news about China and the lingering European crisis implied slower economic growth.

Asian currencies to continue gaining against US dollar. The foreign exchange outlook

of Canada’s Bank of Nova Scotia as of October 2012 sees a strengthening US dollar against a slightly weakening Euro and Japanese yen. In Asia, currencies gain some ground.

The Philippine peso is expected to trade at the stronger rate of 41 against the US dollar in 2013, with the Thai baht also stronger and trading at 30.2. China’s RMB will also gain slightly, trading at 6.10, from 6.25 by end of 2012. Gold, silver, copper. Morgan Stanley sees the trio of metals rising in price by next year, as reported by Bloomberg on Oct. 4. From a projected 2012 average of US$ 1,683 an ounce, gold will rise to US$1,853 in 2013.

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The global economy: Slow down — cliff ahead

Rich-poor divide tops China’s concerns

SHORT-TERM ENERGY OUTLOOK PRICES WTI Crude Oila (dollars per barrel)

2010 79.40

2011 94.86

Brent Crude Oil(dollars per barrel) Gasolineb(dollars per barrel) Dieselc (dollars per barrel) Heating oild (dollars per barrel) Natural Gasd (dollars per barrel) Electricityd (dollars per barrel) Coale (dollars per barrel)

79.51 2.78 2.99 2.95 11.37 11.54 2.27

111.26 3.53 3.84 3.68 11.01 11.79 2.40

2012 95.55

2013 92.63

111.80 103.38 3.65 3.44 3.96 3.81 3.76 3.69 10.87 11.09 11.84 11.99 2.40 2.42

a West Texas Intermediate. b Average regular pump price. c On-highway retail. d U.S. Residential average. e Electric power generation fuel cost.

Source: “Short term energy and winter fuels outlook”. U.S. Energy Information Administration, October 10, 2012.

Global Currency Forecast (partial table) 2010 MAJOR CURRENCIES Japan USDJPY Eurozone EURUSD EURJPY UK GBPUSD EURGBP Switzerland USDCHF EURCHF

81 1.34 108 1.56 0.86 0.94 1.25 2010

2011

2012f

77 1.30 100 1.55 0.83 0.94 1.22 2011

80 1.26 101 1.62 0.78 0.99 1.25 2012f

2013f 87 1.21 105 1.64 0.74 1.03 1.25 2013f

ASIA / OCEANIA Australia China Hong Kong India Indonesia Malaysia New Zealand Philippines Singapore

AUDUSD USDCNY USDHKD USDINR USDIDR USDMYR NZDUSD USDPHP USDSGD

1.02 6.61 7.77 44.7 8996 3.06 0.78 43.8 1.28

1.02 6.30 7.77 53.1 9069 3.17 0.78 43.8 1.30

1.04 6.25 7.75 53.5 9650 3.08 0.78 42.0 1.24

1.06 6.10 7.75 52.0 9500 3.02 0.82 41.0 1.21

South Korea Thailand Taiwan

USDKRW USDTHB USDTWD

1126 30.1 29.3

1152 31.6 30.3

1135 31.3 29.5

1100 30.2 29.0

Source: “Global Currency Forecast”. Bank of Nova Scotia

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Most Chinese believe the rich-poor divide is the most likely issue to hinder development over the next decade The rising wealth gap threatens social stability, a key issue that the new leadership in China must address China’s new leadership will be confronted with what was revealed to be a top concern among most Chinese: the growing wealth gap. In an Agence France-Presse report published in ABS-CBN, some 75% of respondents in a survey conducted by the state-run China Youth Daily newspaper cited “serious rich-poor divide” the issue is most likely to hamper China’s development over the next decade. Other problems that worry average citizens are “unfettered public power” and the growing power of “interest groups.” Though the newspaper did not point to the interest groups being referred to, in China the term usually refers to state-owned monopolies and family members or friends of government officials who use their connections to advance their interests in order to acquire wealth. The report also notes that inequality is one issue that could intensify already high social tensions. According to the International Institute for Urban Development in Beijing cited in a Sept. 17 Washington Post article, China’s Gini coefficient—a method for measuring inequality—was at 0.438 in 2010. This means that the country was fractionally more unequal than in 2005, when the figure was at 0.425. With the current economic growth, the rise of the middle class is a “reasonable expectation,” as in the case of Japan and Korea when their economies grew to a per capita level of $10,000. However, in an article from The Diplomat, a middle class with rising disposable income

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and consumption seems to be missing in an economy that has rapidly grown over the years. “Instead of an enlarging urban middle class, China is increasingly splitting into a small upper class that spends freely on luxury goods, and a remaining population whose earnings and savings are eroded by inflation and state confiscation,” the article says. A World Bank policy research paper released in August 2008, meanwhile, suggests that income inequality “can be a part of a normal process of development at a certain stage.” Moreover, the dynamics of the income gap in the form of a-race-to-the-top system “can be desirable to some extent as it unleashes competitive pressure and creates incentives for investment in skills.” The increase in urban income inequality between 19892004, the report notes, is a product of “the differentiated opportunities and remuneration between the skilled and unskilled.” Nevertheless, the paper posits: “Continuing to improve market efficiency and investing in people, in particular improving education service in lagging areas to poor people, are important for sustainable growth and equitable distribution in the long run.”

gap in the near future. China’s efforts to address social inequality will raise the political consciousness and assertiveness of large communities and social strata. This will lead to pressures for populist, sometimes patriotic moves, including a tough foreign policy, as seen in mass unrest over the territorial dispute with Japan.

Chinese President Hu Jintao with his predecessor Jiang Zemin to his left at party congress PBS

What four more years of Obama mean Observers in the Philippines from the business sector and the academe said U.S. and Philippine ties would be the same after Obama’s reelection Obama might revive efforts to bring back to the U.S. jobs outsourced to countries like the Philippines, hinted US Ambassador Harry Thomas, hurting the BPO Industry

In his keynote speech at the opening ceremony of the 18th Communist Party of China (CPC) National Congress, outgoing Chinese president Hu Jintao set a new target for China’s economic growth, according to a Nov. 8 report from Xinhua. “On the basis of making China’s development much more balanced, coordinated and sustainable, we should double its 2010 GDP and per capita income for both urban and rural residents” by 2020, he says. Social unrest and bleak growth prospects will burden the new leadership if it fails to bridge the growing wealth

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BPO’s should start looking for clients from other countries. CHED and TESDA should start training locals in foreign language like Spanish and Chinese to cater to Spanish- and Chinese-speaking countries The re-election of U.S. President Barack Obama means more of the same in Philippines-U.S. relations, according to seasoned observers in the business sector and the academe.

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Defense. Regardless of who won the election —

Obama or Romney — the U.S. defense posture in the Asia-Pacific region is unlikely to change drastically. During the election period, both candidates’ platforms pronounced that they were pursuing more military deployment in the Asia-Pacific region. Driving this military rebalancing is the rise of Asia as the world’s fastest-growing economic region, with China expected to overtake the U.S. as the largest national economy on the planet within 10 years. Hence, America must maintain, if not expand its influence and power in this region and safeguard its interests in trade, investment and geopolitics. This reality will hold sway whoever won the elections.

Employment generation. U.S. Ambassador to

the Philippines Harry Thomas hinted in a Nov. 9 press briefing that Obama might revive efforts to bring back to the U.S. jobs outsourced to countries like the Philippines, an Interaksyon report says. This initiative is the Bring Jobs Home Act, said to be a key Democratic initiative, which was defeated in the U.S. Senate last July. In case this bill is finally passed, it would badly affect the Philippine business process outsourcing industry. For University of the Philippine economics professor Benjamin Diokno, this could dampen employment generation in the country. “BPO jobs will cease to be a source of growth for decent paying jobs” a Nov. 8 Interaksyon report quoted Diokno as saying. The country’s BPO industry as of 2011 employed 640,000 people directly and 1.3 million indirectly, generating $11 billion in revenues for a 5% share of the Philippine economy, according to another Interaksyon report. And this year, the BPO Association of the Philippines sees the industry generating $13 billion in revenues on a labor force of 764,000.

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Source: US Embassy Manila Facebook Page

Trade. According to Jeremy I. Gatdula, lecturer on international trade at the Ateneo de Manila University, economic and social policies that are introduced in the U.S. that have an effect on the market could affect us. Gatdula said Obama has been focusing more on the TransPacific Partnership deal among select members of the Asia Economic Cooperation. Obama’s reelection would give him the chance to continue the supervision of the proposed expansion of the TPP trade agreement, the BusinessWorld report said. The smaller new free-trade framework now groups Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. Other economies have expressed interest, including Japan, South Korea, Taiwan and the Philippines, but requirements to open local markets further that could require amendments to the Constitution have been cited as a key disincentive for Manila. The vision for the TPP is for an initial group of economies to form the core of the grouping. Membership will remain open, with more economies added progressively after they agree to the same commitments as existing members, according to a Philippine Daily Inquirer report.

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Growth of the Asian Art Auctions Market

As wealth shifts from East to West, surge in demand for art in Asia will change the face of a previously Western-centric global art market By Tanya L. Mariano

STRATEGY POINTS International auction houses Sotheby’s and Christie’s and mainland Chinese auction houses China Guardian and Beijing Poly International are going head-to-head in Hong Kong and China In 2011, Asia-Pacific was home to more high net worth individuals than any other region; demand for art is on the rise as Asia becomes more prosperous China is now the world’s largest art market with 30% market share, and Beijing is the top city for auctions 2012 auction results indicate a slowdown in demand for art in Asia, but experts believe a sudden collapse is unlikely

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side from having the most number of high net worth individuals than anywhere else in the world – 3.37 million in 2011, according to Capgemini and RBC Wealth Management’s World Wealth Report 2012 (free upon registration) – another sign that the world’s wealth is shifting from West to East is the boom in Asia’s art market, fueled mainly by increased demand in China. And now, for the first time, relatively young mainland Chinese auction houses are going head-to-head with centuries-old international auction houses in Hong Kong and Beijing, two of the top cities in the world for art auctions. The Associated Press, as published in The New York Times, reports that China Guardian Auctions, one of the country’s biggest auction houses, held its first sale outside mainland China in October 2012, competing

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Growth of the asian art auctions market

directly with the autumn sales of 268-year-old Sotheby’s. Beijing Poly International Auction, another top auction house from mainland China, is planning its first sale in Hong Kong in November. If Sotheby’s plans to expand into mainland China push through, it will score a huge gain over rival global auction house Christie’s by becoming the first foreign company to hold art auctions in the country. Hong Kong is an attractive venue for art auctions “because there are no taxes, unlike in mainland China, where buyers have to pay as much as 23 percent in taxes and import duties,” according to the news report, but the art auctions market in cities like Beijing and Shanghai are as robust as ever. As Asia turns into an economic as well as cultural powerhouse, it will play a big role in the transformation of the art market from a Westerndominated arena into a more level playing field, and will usher in a new era of bipolarity in the global art landscape.

Asia’s wealthy invest in art. According to the

2012 World Wealth Report, Asia-Pacific is now for the first time home to slightly more high net worth individuals (HNWIs), or those with $1 million or more in disposable income, than any other region. It had 3.37 million HNWIs in 2011, compared to North America’s 3.35 million, and Europe’s 3.17 million (North American HNWIs, however, still account for the biggest regional share of HNWI wealth). The report notes: “The value of Investments of Passion (IoP), including Art, Jewelry and Memorabilia, does not count toward our calculations of HNWI investable wealth, but it is clear that many HNWIs choose to devote considerable sums to many types of pursuits and collectibles. While these investments are not strictly an alternative to financial assets, the global

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economic and financial crisis has certainly led many HNWIs to view these holdings as an important component of their overall investment strategy.” The report also found that in 2011, investments from young HNWIs from emerging markets were behind many different kinds of IoP, particularly those that are considered “solid investments likely to appreciate in value over time and/or offer a low correlation to mainstream financial instruments.” Chinese collectors have also diversified beyond indigenous works of art. Says Christie’s Asia president Francois Curiel, as quoted in a New York Times September 2011 article that chronicles the surge in art collecting in China, “They are present in all our salesrooms now… You’re beginning to see Chinese collectors in the world of Impressionists and 20th-century decorative art. Possibly with the exception of European old masters, we see China in every center.” A May 2012 article by the BBC also highlighted how wealthy Asians are fuelling a boom in museum construction, particularly in China, where 395 museums opened in 2011 “as the government’s drive to achieve world status embraces culture as well as economic might.” Where there is lack of public funding to support culture and the arts, wealthy private art collectors in China, Indonesia, Singapore, and Hong Kong step in to build museums themselves.

China is the world’s largest art market. In

another first, China in 2011 beat the U.S. as the biggest market for art and antiques. The report, The International Art Market in 2011: Observations on the Art Trade over 25 Years, by The European Fine Art Fair, found that China’s share of the international art market, based on both dealer sales and auctions, grew from 23% in 2010 to 30% in 2011. The U.S. placed second with a 29% market

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share while the U.K. followed close behind with 22%, and France trailed with 6%. Overall, says the report, the art and antiques market grew stronger because of the demand in China combined with the rise in Modern and Contemporary fine art sales. “The dominance of the Chinese market has been driven by expanding wealth, strong domestic supply and the investive drive of Chinese art buyers. Although recent economic turmoil has created a more cautious buying climate in the rest of the world, growing domestic difficulties in Chinese property and stock markets and the lack of other alternatives appear to have led to a significant amount of substitution into art as an investment by Chinese consumers.” Even back in 2009, the art market in China remained robust despite economic difficulties mainly due to

the participation of collectors from mainland China, recounts Christie’s business director of Asian art Jonathan Stone. In the following interview with Bloomberg, Stone talks about the rise in demand for fine art and wine in China.

Despite economic difficulties in 2009, the Asian art market remained strong due to increased participation of collectors from China, says Christie’s business director of Asian art Jonathan Stone in this interview with Bloomberg

The world’s top ten auction-busting artists of 2011 For the first time in two decades, Spanish artist Pablo Picasso was not one of the top three best-selling artists in 2011. Taking the top spot in ArtPrice’s annual global ranking (page 15) based on auction revenue is Modern Chinese master Zhang Daqian, with $550 million in total annual revenue, followed by another Chinese artist, Qi Baishi, with $510 million. The sale of Qi Baishi’s “Eagle Standing on Pine Tree; Four-Character Couplet in Seal Script” was also the best auction result of 2011. American pop artist Andy Warhol placed third, followed by Picasso. In another testament to China’s growing strength in the art world, six of the top 10 artists are Chinese. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Zhang Daqian (1899-1983) – $550 million Qi Baishi (1864-1957) – $510 million Andy Warhol (1928-1987) – $325 million Pablo Picasso (1881-1973) – $315 million Xu Beihong (1895-1953) – $220 million Wu Guanzhong (1919-2010) – $212 million Fu Baoshi (1904-1965) – $198 million Gerhard Richter (1932) – $175 million Francis Bacon (1909-1992) – $129 million Li Keran (1907-1989) – $115 million

Chinese master Qi Baishi’s “Eagle Standing on Pine Tree; Four-Character Couplet in Seal Script” sold for $65 million in May 2011 at a China Guardian auction. Source: Image from The Telegraph

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Growth of the asian art auctions market

Top auction markets: Beijing bigger than New York and London. 2011 proved

The

Poly International

ld So ts Lo

4% Christie’s 7% China Guardian 2% 1%

The top 10 cities generated 67% of the total global art auction revenue in 2011. Again confirming China’s dominance, five of the top 10 cities are part of China: Beijing (ranked 1st), Hong Kong (4th), Shanghai (6th), Hangzhou (8th), and Guangzhou (10th).

Sotheby’s

25% 23%

When it comes to the top global auction cities, Beijing keeps the top spot, followed by New York, London, and Hong Kong. In 2011, the Chinese city took in over €6.4 million or $8 billion in total auction revenue, according to “The French Auction Market Annual Report 2011” by French auction regulatory body Conseil des Ventes.

Au Tu ction rno ve r

2011 Fine art auction sales

to be a good year for art auctions. According to “Art Market Trends 2011” by art market research firm Artprice, “art in fact sold better in 2011 than at any other time in history,” posting a total global revenue of $11.5 billion, $2 billion more than in 2010. Asia accounted for 43% of the market, but the West remains dynamic. This confirms “not so much the migration of the art market [from East to West] as a new situation of global art market bi-polarity.”

The report, which is based on 6.3 million auction results from 4,500 auction houses around the globe, also found that auction houses Sotheby’s and Christie’s remain global leaders, representing nearly half the total volume of global art business in 2011, but Asian auction houses such as China Guardian and Beijing Poly International are growing more aggressively. The auction giants accounted for a combined 47% of global art sales in 2011, as illustrated in the graph below.

37% Others

86%

Graph from “Art Market Trends 2011” by Artprice, page 8

the top 10 global aUCTION CITIES IN THE ART & COLLECTIBLES SEGMENT IN 2011 Rank

City

Country

Auction Revenue (EUR millions) 2011

2010

Number of sales

Number of operations

Beijing

China

6 408,9

4 203,4

231

New York

USA

3 580,2

3 321,0

609

London

2 568,6

2 326,1

1066

Hong Kong

China

1 362,7

1 129,9

Paris

France

1 040,9

964,9

3145

Shanghai

China

1 009,2

466,5

154

Dallas

USA

617,0

539,3

492

Hangzhou

China

388,2

297,1

Zurich

Switzerland

285,0

246,2

Guangzhou

China

261,0

119,1

17 522

13 679

5 908

287

Total

Five of the top 10 cities in terms of 2011 auction revenue are part of China: Bejing, Hong Kong, Shanghai, Hangzhou, and Guangzhou

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Table from “The French Auction Market Annual Report 2011” by Conseil des Ventes, page 83

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‘... the year 2011 confirmed not so much the migration of the art market (which is still dynamic in the West) as a new situation of global art market bi-polarity.’ ~ “Art Market Trends 2011,” Artprice

China’s art market slowing down, but sudden collapse unlikely. However, art market research firm ArtTactic warns that the art market in China is now cooling after the rapid growth of previous years. According to the report, “Chinese Contemporary Auction Analysis – June 2012,” (summary only; full report requires paid subscription) spring 2012 auction sales from Sotheby’s Hong Kong, Christie’s Hong Kong, Beijing Poly International Auction, and China Guardian dropped to $1.5 billion this year, a 32% decline from $2.2 billion in autumn 2011. Poly Auction posted the biggest sales at $485 million, 36% higher than Christie’s. China Guardian, on the other hand, suffered a 45% plunge in sales, the largest drop among the four auction houses.

Still, according to a Time article, while experts agree that the market is not as strong as it used to be, a sudden drop is highly unlikely as the “broadening of the Asian art world over the last decade” should act as a stabilizing force. Asian collectors are increasingly diversifying their collections and buying art of varying styles and from a range of periods and countries. The rise in museum construction as well as support for academic art scholarship particularly about Asian art should likewise buoy the market. Says Jehan Chu, director of Hong Kong-based Vermillion Art Collections, an art consultancy firm, all these factors make a sudden collapse “hard to imagine.”

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Art fairs and auctions in the Philippines Unlike China, international auction houses have yet to set up shop in the Philippines. However, this doesn’t mean efforts to promote Filipino arts and culture are in short supply. The first local auction house in the Philippines opened in 2010. Reports ABS-CBN News, Salcedo Auctions inaugural sale, entitled “The WellAppointed Life: Philippine Art and Objects of Desire,” showcased jewelry, vintage accessories, and works of local artists from the late 19th century to the present. The Ateneo Alumni Association has also been holding art auctions since 2008, mainly to acquire funds for “various social involvement concerns.” The 2012 Ateneo Art Auction held on October 6 featured works by Romulo Galicano, Jose Joya, Elmer Borlongan, Ben Cabrera, among others. Art fairs such as the annual ManilArt, a contemporary art fair organized by the Bonafide Art Galleries Organization and the National Commission for Culture and the Arts, and Art in the Park, organized by the Museum Foundation of the Philippines to make affordable art (priced at ₱30,000 and below) more accessible, are also becoming increasingly popular among local art lovers.

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Growth of the asian art auctions market

News & Strategy Alerts Business

Gov’t urged to ease foreign investment The Philippines should adopt a “twoway street” approach on this issue, or it will isolate itself from the investment trends enjoyed by its neighbors. The government should also go beyond its good governance drive and address other investor concerns like regulations, red tape, infrastructure, economic growth, and inconsistent policies

The European Chamber of Commerce of the Philippines has reiterated its call to relax restrictions on foreign investors after the Palace issued a policy expanding the economic activities restricted to Filipinos, according to a Nov. 4 Business World report. Executive Order 98, or the Ninth Regular Foreign Investment Negative List, enumerates industries and activities open to Filipino businessmen, and defines the extent of participation of foreign investors in areas allowed by specific laws and the Constitution.

Ronald Ventura, “Mourning Cookies.” One of the many works featured at the recently concluded Ateneo Art Auctions Source: 2012 Ateneo Art Auctions Image Gallery

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In the Business World report, former ECCP president Hubert d’Aboville said the more the Philippines reduces foreign investments, the more the government reduces the capacity of creating jobs. Indeed, the Philippines should take a “two-way street” on this issue, or it will isolate itself from the investment boom enjoyed by its neighbors, where restrictions are less stringent. The Philippines gets the least investment among the major Southeast Asian economies.

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The concern over the enlarged negative list comes amid another issue stirring foreign business: the Supreme Court decision affirming its ruling that constitutional limits on foreign ownership of equity applies only to voting shares, not all stock. Market players on Nov. 9 formally raised their objections to the Securities and Exchange Commission’s draft rules on foreign ownership limits, claiming that investments could take a significant hit, another Business World report says. “Should the definition be extremely tight, it will have second round effect on stifling capital market products,” said Hans B. Sicat, Philippine Stock Exchange (PSE) president and chief executive, in a public dialogue at the SEC. Sicat said the first victim will be foreign direct investments in the country and the second effect is on the stock market. Sicat believes forcing foreigners to divest shares could precipitate a sell-down. And it certainly won’t help create jobs.

PH aims to meet aviation standards in early 2013 The government is confident that the U.S and Europe will lift restrictions on Philippine carriers before April If the country regains Category-1 status, Philippine airline, aviation and tourism industries stand to benefit

The government is confident it can comply with international aviation safety standards early next year for the U.S and Europe to ease restrictions on Philippine carriers, as reported by BusinessWorld on Nov. 8. Department of Transportation and Communications Secretary Joseph Emilio A. Abaya said the International Civil Aviation Organization (ICAO) will send personnel to guide the government in addressing significant concerns. Citing significant progress in domestic aviation safety, Abaya said the ICAO team commended the country for addressing 86 of 88 significant concerns noted in a 2009 ICAO audit. Civil Aviation Authority of the Philippines (CAAP) said it has started addressing the remaining concerns by registering all aircraft and moving to hire additional inspectors. “If we have addressed the significant safety concerns, U.S. Federal Aviation Administration (FAA) will logically follow by upgrading us to Category 1, and will European Union (EU) logically follow by lifting the ban,” Abaya said.

Source: European Chamber of Commerce of the Philippines

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The reliability of Philippine air services remains a significant concern, after the aviation program failed

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to meet international safety standards nearly five years ago. In 2007, the FAA, after conducting a safety audit, downgraded the country’s aviation safety status from Category 1 to Category 2, citing noncompliance with ICAO safety standards, according to a January 2008 message to U.S. citizens from the U.S. Embassy in Manila. In March 2010, the EU banned Philippine carriers from flying to any of its 27 member-states after the CAAP failed to address safety, equipment, and technical personnel concerns. In announcing its decision, the EU cited significant safety concerns raised by ICAO in 2009, as well as failure to implement corrective actions for concerns the EU raised in 2008. The Philippines has been under round of audits and evaluations to regain Category-1 status and this time it may finally convince international aviation authorities to reverse the country’s low ratings which have adversely affected tourism. As a result of FAA downgrade, the loss in tourism revenue reached more than ₱66.3 billion in 2009 to 2010, Philippine Travel Agencies Association president Aileen Clemente told the Philippine Daily Inquirer last year.

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Clemente further said the country could have gained an extra 1.4 million tourists from 2009 to August 2011 noting that American tourists (excluding visitors from Guam) accounted for 17 percent, or about 600,000 of arrivals in 2010. The categorization has also prevented Philippine carriers from expanding air services to the U.S. Just after the FAA downgrade, former president of flag carrier Philippine Airlines Jaime Bautista told reporters in January 2008 that the downgrade would affect PAL’s revenues starting in 2009 because it would not be able to use its new planes for flying to U.S. destinations. The Category-2 downgrade would prevent PAL from increasing its 33 flights a week to US destinations, he said, and from changing the type of aircraft or increasing the number of flights on those routes. The Philippines should address the remaining safety concerns, in time for the scheduled final audit in February so that the PAL will be able to carry out its long-haul expansion plans. In the afore-mentioned BusinessWorld report, PAL is looking into resuming flights to Europe and adding flights to the US. Its expansion plan aims to add more than 50 planes to its fleet — many flying to America and Europe.

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Social Media Makes Inroads in Local Political Campaigns Social networking sites of candidates seem to be just scratching the surface of their vast potential By Jerome Balinton

STRATEGY POINTS Social-media campaigning can be instrumental in spreading messages about policy, raising support, and even fine-tuning messages through interactive feedback As used by local candidates, social media is still one-way and contentdriven, with little apparent interaction between candidates and potential voters Establishing a name is important in winning elections, but actual engagement of potential voters is vital to maximize social media’s vast potential

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t’s a social-networking world. Social networking is the most popular online activity worldwide, according to comScore, a US-based global digital marketing strategy firm. According to its October 2011 white paper, “It’s A Social World: Top 10 Need-To-Knows About Social Networking and Where It’s Headed” (registration needed to download the free white paper), social networking sites now host 82% of the world’s online population, representing 1.2 billion users around the world. As it turns out, social networking is also the most popular activity in the Philippines, per the comScore study. Social networking accounted for an astounding 43% of total time spent online by Filipinos, and the typical Filipino spent 8.7 hours a month on social networking as of October 2011, significantly higher than the Asia-Pacific region average of 3.0. hours.

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Social media makes inroads in local political campaigns

Based on the country snapshot provided by comScore in its white paper, social networks have a cumulative local audience of 5.5 million users (age 15+) out of a total estimated online population of 5.7 million, with a reach across age groups of no less than nearly 92.8% (see chart below). SOCIAL NETWORKING DEMOGRAPHIC REACH AMONG ONLINE POPULATION, PHILIPPINES 97.8% 98.2%

15-24 95.2% 96.2%

25-34 93.7%

35-44

55+

92.8%

Other statistics seem to confirm comScore’s findings. The latest Facebook statistics from SocialBakers shows that more than 1 out of every 4 Filipinos has a Facebook account. At the time of this report, there are 29,862,300 Facebook users in the Philippines, the 6th-largest group by country. That number translates to 27.75% of the general population and 93.33% of the online population, with women users outnumbering men, 52% to 48%. Data from social media monitor Semiocast shows that the Philippines is home to 9.5 million Twitter users, enough for 10th largest in the world.

95.6%

93.2%

45-54

96.2%

94.3%

Males Females

Chart from “It’s A Social World: Top 10 Need-To-Knows About Social Networking and Where It’s Headed,” comScore, October 2011

Filipinos spend or have spent long hours in social networks, per the findings of an October 2011 Nielsen study, “The Digital Media Habits and Attitudes of Southeast Asian Consumers,” with e-mail as the most popular online activity undertaken by Southeast Asian digital consumers on a weekly basis.

Top 5 online activities conducted on at least a weekly basis Indonesia

Malaysia

Private msgs on SN sites 71%

Email 92%

Public comments on SN sites 61%

Philippines Email 90%

Singapore

Thailand

Vietnam

Email 96%

Email 85%

News 90%

Private msgs on Private msgs on SN sites 83% SN sites 83%

News 86%

News 79%

Search 81%

Browsing people’s profiles 59%

News 82%

Wall posts/ status updates/ group msgs via SN sites 81%

Search 81%

Private msgs via SN sites 74%

IM 68%

Updatimg SN profile 56%

Search 79%

News 79%

IM 70%

Reading comments about brands/products 70%

Gaming online 52%

Email 51%

IM 75%

IM 78%

Private msgs on SN sites 67%

Sharing content 69%

Streaming audio 47%

Table from “The Digital Media Habits and Attitudes of Southeast Asian Consumers,” Nielsen, October 2011.

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As the number of Filipinos online grows, it seems that it is only a matter of time before campaigning by social media becomes a viable means of connecting to potential voters. The question then becomes: is it time for local candidates for elective office to turn to social media to communicate with the electorate? As it turns out, local candidates have already been doing this, per a 2009 exploratory-descriptive study on cyber-campaigning in the Philippines by Mary Grace Mirandilla, as posted on the website of CPRsouth. According to Mirandilla’s study of potential presidential candidates in the 2010 elections, cyber-campaigning in the Philippines has tended to focus on candidate information, Web services, and creative ways to provide information online, while missing opportunities to more actively engage users. Her findings: the websites of presidential aspirants were dominated by information features, while mobilization of the electorate to provide candidate support was left untapped, along with community features for engaging voters in discussions, debates, and consultations. In short, “Most aspirants provide one-way, downward information to potential voters, similar to what their political ads do in the offline environment.” On the other side of the coin, while acknowledging that “there is no doubt that the Internet has already started to reshape the information and communications environment of the Philippine political landscape,” she also clarified that the Internet does not promise “a panacea to cure a sleeping interest in politics,” citing another study that concluded that the Internet is not likely to provide sufficient motivation for individuals to become politically active, and that a desire to be involved in politics must come first.

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Mirandilla concluded that the Internet is not an alternative, but still supplementary to traditional mainstream media as a local election campaign platform.

Traditional mainstream media still the main source of information. Another finding

of the afore-mentioned study by Miranilla is that traditional mainstream media remained the main source of information on the 2010 national and local elections in the Philippines. Even with a biased sample of Internet users, TV and newspapers were still the most popular media. Potential candidates, known to be wealthy and prominent in the political process, got the most exposure in traditional mainstream media as confirmed by her survey respondents. In an Oct. 17 ANC report on social media and the May 2013 elections, Prof. Danilo Arao of the University of the Philippines said the use of social media is prevalent in the urban areas, but candidates should not discount traditional campaigns just yet. “Social media could be useful in information dissemination but recent studies show that television is still the most powerful medium. If you look at the bigger picture in the Philippines, we are largely agricultural and recent studies show only 3 out of 10 people have Internet access,” Arao also said. According to the September 2012 report of the United Nations’ Broadband Commission for Digital Development, in terms of penetration, only 29% of Filipinos had access to the Web through various channels, placing the Philippines 100th out of 177 territories. Meanwhile, in terms of Internet connection, the Philippines only had an average of 1.9 fixed (wired) Internet connections per 100 people as of 2011, 101st out of 172 countries.

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Television still the ‘king’ of local entertainment and information. Television today

remains the “king” of entertainment and information in the Philippines, Sherrie Ann Torres writes in her chapter, “The Philippines’ Television Network War Going Online – Is the Filipino Audience Ready to Do the Click?” in the book, “The Social Media (R) evolution?: Asian Perspectives on New Media,” edited by Simon Winkelmann and published in June by the Konrad Adenauer Stiftung in Singapore. Citing a March 2011 survey by the Nielsen Audience Measurement Report, Torres said despite television’s continuous reign over the daily lives of Filipinos, there was a decline in the duration of television viewership – from 8.1 hours in 2008 to 7.7 hours of TV watching in 2010. The survey involved some 5,400 respondents for the National Urban TV Audience Measurement and Mega Manila TV Audience Measurement, with 3,400 respondents. The Nielsen survey also reportedly showed a decreased newspaper readership in Metro Manila, from 24% in 2008 to 20% in 2010, while showing a 10% increase in Internet use – the fastest growth in the Asia-Pacific region.

Senatorial aspirants. The best local political

aspirants who can test the power of social media to introduce themselves, spread their messages, and raise both support and funds should be the ones running for positions elective nationally – the 32 senatorial candidates qualified by the Commission on Elections to run next year and announced by Comelec Chairman Sixto Brillantes through his Twitter feed. The following table shows the names of senatorial candidates for the 2013 elections, their Facebook “likes,” Twitter followers, and Web address. (Data pre presented here were gathered Nov. 7 and may still change as the campaign period nears.)

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2013 SENATORIAL CANDIDATES AND THEIR SOCIAL MEDIA PLATFORMS/ENGAGEMENT Senate bets

Facebook Fans (Likes)

Twitter

Website

Followers Paolo Benigno “Bam” Aquino

47,655 in fanpage by supporters

4,959 friends in personal site

Former Las Pinas City Rep.

2,370 in fanpage

11,580 884

Cynthia Villar

None http://www. cynthiavillar.com.ph/

Former Akbayan Rep. Ana

24,479 in fanpage

41,338

None

Theresia “Risa” HontiverosBaraquel Former Senator Maria Ana

1,799 likes in fanpage

Consuelo “Jamby” Madrigal

3,030 friends in personal site

Former Senator Ramon

None

220

http://www. jambymadrigal.com/

None

375

None

Magsaysay Jr Aurora Rep. Juan Edgardo

31,475 likes in fanpage

Angara Senator Alan Peter Cayetano

2,861 friends in personal site

Senator Antonio Trillanes IV

18,503 likes in fanpage

None

http://www.trillanes. com.ph/

Senator Aquilino Martin

1,284 likes in fanpage

4968

Pimentel III

http://www. kokopimentel.org/

Maria Lourdes Nancy Binay

2946 friends in personal site

407

None

Margarita “Tin-Tin” Cojuangco

None

Former Senator Richard

124,000 likes in fanpage

4215

http://www.

“Dick” Gordon

5,305 friends in personal site

richardgordon.blogspot. com/

Former Senator Ernesto

606 likes in fanpage

2395

None

Maceda Former Senator Juan Miguel

5,401 likes in fanpage

3,888

“Migz” Zubiri

http://www.migzzubiri. org/

San Juan City Rep. Joseph

31,342 likes in fanpage

17,850

Victor “JV” Ejercito

http://www.jvejercito. com/

Zambales Rep. Maria Milagros

3,162 likes in fanpage

5,592

None

“Mitos” Magsaysay

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Senate bets

Facebook Fans (Likes)

Twitter

Website

Followers Cagayan Rep. Juan Ponce

462 likes in fanpage

384

“Jack” Enrile Jr.

http://www.jackenrile. com/

Senator Gregorio “Gringo”

1,375 likes in fanpage

6,002

Honasan

http://gringohonasan. ph/

Movie and Television Review

In private setting

44 (Team

and Classification Board

None

Grace

(MTRCB) chair Grace Poe-

Poe)

Llamanzares Senator Francis “Chiz”

43,746 likes in fanpage

90007

Escudero

http://www. hausmysite.net/chizbeta/

Senator Loren Legarda

163,000 likes in fanpage

14,274

http://www. lorenlegarda.com.ph/

John Carlos De Los Reyes

67 likes in fanpage set up by

None

supporters Marwil Llasos

190 like in fanpage

http://www. kapatiranparty.org/

Rizalito David

None

Former Philippine

None

Constabulary chief Ramon Montaño Puerto Princesa Mayor

10,277 likes in fanpage

Edward Hagedorn Bayan Muna party-list Rep.

9,304 likes in fanpage

8743

Teodoro “Teddy” Casiño

http://myteddycasino. com/

Greco Antonious Beda

None

Baldomero Falcone

None

Christian Seneres

None

Samson Alcantara

1224 friends in personal site

None

Ricardo Penson

None

Source: TCR compilation of data from ABS-CBNnews.com and Sixto Brillantes Twitter account

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‘It is easy to have Facebook and Twitter pages but if the content is not fresh … not engaging, and … badly written, you (the candidates) will not be able to grow exponentially your base (of supporters)’ -Malou Tiquia According to the afore-mentioned ANC report, during the filing of the certificates of candidacy in early October, some candidates said they would tap social media in their campaigns. In a video embedded in the report, political analyst and image-maker Malou Tiquia says translating social media presence into political campaigning and votes is not an easy task. Tiquia said the candidates should study the terrain of social media, and whether their social-media strategy can complement their traditional-media strategy, explaining that “it is easy to have Facebook and Twitter pages but if the content is not fresh … not engaging, and … badly written, you (the candidates) will not be able to grow exponentially your base (of supporters).”

In a separate video uploaded to YouTube, “ANC Presents Road to 2013: Social Media and the Elections,” political blogger Nik Skalomenos says that social media in the Philippines is in a “nascent” stage, with candidates “still trying to figure how to engage with other social media users and how to get their message out,” while other social media users are also trying to figure out how they … engage with these politicians.” According to Tiquia, who also appears in the video, an audit of online assets of politicians, the communication is “one-way,” with “no interaction,” characterized by “a dead wall … with content being driven … but there are no comments.” Politicians and candidates, she warns, “will have to learn to listen … If you do not know how to listen, you will fail very very badly in social media.” In a November 2011 article in Mashable, author Alex Fitzpatrick wrote that in sharing a candidate’s beliefs and goals via social media, candidates can connect with existing supporters and reach out to voters who aren’t yet convinced. Accomplishments such as campaign milestones will get liked, shared, re-tweeted and reblogged. “By responding directly to followers, a candidate adds a human touch to a campaign that may otherwise seem inaccessible. Digital followers who feel connected to the campaign will be more likely to make the leap from online supporter to offline volunteer,” Fitzpatrick wrote.

His declaration of remaining an independent since 2009, attracted 3,956 “likes,” 378 comments (plus 1 comment from the administrator of Escudero’s fan page), and 174 shares

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In a June 1, 2012 blog entry in SalesForce Marketing Cloud, Doug van Spronsen, director of digital strategy at Commerx, a Canadian digital marketing strategy firm, writes that social media generate tremendous amount of data and information every day. By using social listening

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Social media makes inroads in local political campaigns

Local candidates engage the electorate, sort of Let’s look at how some of the senatorial candidates have engaged their Twitter and Facebook followers. Theresia “Risa” Hontiveros-Baraquel, for instance, reacted to the editorial of The Varsitarian, official student publication of the University of Santo Tomas (UST). In her Oct. 8 tweet and Facebook wall post, the staunch Reproductive Health (RH) bill advocate encouraged pro-RH students and professors at the university to “stand up for your conscience and speak up.” Hontiveros’ post provoked pro- and anti-RH bill sentiment, along with pro- and anti-Risa Hontiveros sentiment, none of which she responded to directly. In Twitter, where Hontiveros has 41,338 followers – the largest population of followers after that of Sen. Francis “Chiz” Escudero – her post was retweeted by 13 Twitter users, a likely gesture of affirmation. On his being independent from any political parties such as the Liberal Party of Pres. Benigno Aquino III and the United Nationalist Alliance of Vice President Jejomar Binay, Sen. Chiz Escudero – who is seeking re-election in the 2013 mid-term elections – posted via his Facebook account that he did not join the president’s party or the vice-president’s coalition, and remains independent. His declaration of remaining an independent since 2009, which he posted on Oct. 1, attracted 3,956 “likes,” 378 comments (plus 1 comment from the administrator of Escudero’s fan page), and 174 shares. Reviewing the comments on that and other wall posts, it seems that while the posts draw comments, responses from Escudero are limited to a few that are coursed through his Facebook page administrator.

Screen grabs from the official Facebook page of Risa Hontiveros

Screen grab from official Facebook account of Sen. Franchis “Chiz” Escudero

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By using social listening tools effectively, a campaign can glean a lot of pertinent information

tools effectively, a campaign can glean a lot of pertinent information. Spronsen provides a few key indicators to analyze, e.g., voter sentiment on key issues, geo-targeted demographic information, conversation cluster discovery, and early warning trend spotting. To gather information, Spronsen recommends social-listening tools such as Google Alerts (free) and Radian6 (for candidates with big campaign funds). Google Alert allows Gmail subscribers to monitor the web for interesting new content. Entering search queries about them will allow the candidates to get latest information as it happens, daily, or once a week. All updates are sent directly to their Gmail inboxes. Content publishing and management are strategies also important to look at. Spronsen likewise recommended sites such as Buffer and Crowdbooster, which the candidates can use to manage, schedule and organized content of their campaign tools. Measuring the effectiveness of the campaign is essential to long-term success, Spronsen writes. These tools (Crowdbooster, Facebook Insights, Google Analytics) enable you to gauge reactions and understand which campaign messages are relevant to the audience, according to Spronsen.

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Learning from 2008 Before winning re-election in the just-concluded 2012 U.S. presidential election, Barack Obama waged his historic 2008 campaign for the presidency by harnessing the power of social media, as discussed in a couple of books. In the book, “Communicator-in-Chief: How Barack Obama Used New Media Technology to Win the White House,” edited by John Allen Hendricks and Robert Denton, Jr., the 2008 presidential campaign was described as “one of the most remarkable and fascinating” and “unique” in the history of US elections. It was the first national campaign in which traditional media such as television, radio, and newspapers, were overshadowed by new media technologies and the Internet, Hendricks and Denton wrote in the book’s preface. According to Hendricks and Denton – both professors of communication at Stephen F. Austin State University and Virginia Polytechnic Institute and State University, respectively - the 2008 presidential campaign was the first campaign in which candidates used new media technologies extensively and effectively, even if it was not the first time candidates used new media technologies to communicate with the electorate. From the start, Obama recognized the value of online communications and social networking tools and made them cores of his outreach and mobilization efforts, according to Anthony Corrado, et. al., in “Reform in an Age of Networked Campaigns: How to Foster Citizen Participation through Small Donors and Volunteers,” a joint project of the Campaign

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Social media makes inroads in local political campaigns

Finance Institute, American Enterprise Institute, and The Brookings Institution. According to Hendricks and Denton, the Obama campaign used every type of new media technology to reach voters of all ages and ethnic and social class backgrounds. Obama ensured his message was spread across multiple sites that complemented his message of change. The Obama campaign built a state-of-the-art website that featured a social networking hub, My.BarackObama.com, which became known as MyBO. Corrado et. al., wrote MyBO was used to build an “online relationship” with individual supporters and encourage them to share information and ideas, contribute to the campaign, undertake volunteer activities, and vote.

News & Strategy Alerts Technology Magsaysay calls for cheap barangay broadband Senatorial candidate and former senator Ramon Magsaysay Jr. calls for cheap Internet access at barangay level to promote inclusive economic growth and accountable governance According the first Web Index, Internet access in the Philippines remains slow and expensive To keep up with Asia and bring more Filipinos the bounties of development, barangay broadband is a must

Brown wrote that Obama also maintained his profiles on over 15 different sites ranging from Facebook (3.4 million supporters), Twitter (123,000 followers), MySpace, YouTube, Flickr, and even in specific sites Glee and Black Planet among others that allowed him to communicate with his supporters on a more personal basis. These platforms were linked to MyBO. According to Brown, throughout Obama’s campaign, his team collected 13 million e-mail addresses provided voluntarily by people who took part in Obama’s campaign rallies. Not only did the voters respond, they also donated campaign funds to Obama. It should be noted that about one-third (34% or $114 million) of the $337 million the Obama campaign raised from individuals for the general election came from donors who gave $200 or less, according to a statistics from the Campaign Finance Institute.

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Senator and now Liberal Party senatorial candidate Ramon Magsaysay Jr. is calling on telecommunications companies to work with the government for low-cost Internet at the barangay level, according to a Philippine Star report posted on the ABS-CBN News website.

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Internet access in the Philippines remains slow and expensive compared to other countries In a roundtable discussion with the Star, Magsaysay said that Internet wi-fi connections would promote inclusive economic growth by making basic services, as well as livelihood and business opportunities, more widely accessible. Not just growth, but governance too. Adds Magsaysay: “Wi-Fi connectivity will also enable our citizens from the grassroots to actively participate in promoting accountable governance in the national and local levels, supporting a bottom-up approach where the people are heard.” According to the news report, major telcos such as Philippine Long Distance Telephone Co. and Globe Telecom are in the middle of multi-billion peso projects to upgrade and modernize their networks in order to cope with increasing demand particularly for Internet services.

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Currently, the country’s Internet penetration rate stands at 32.4%, with 33.6 million people online, according to Nielsen data cited by Internet World Stats. This is slightly higher than the Asian penetration rate of 27.5% as of June 2012. In absolute number of Internet users, China tops the list with 538 million users, followed by India with 137 million, and Japan with 101.2 million. The Philippines holds sixth place. However, a recent study cited in a another ABSCBN News report found that Internet access in the Philippines remains slow and expensive compared to other countries. Web Index, a new survey by the inventor of the World Wide Web, British computer scientist Tim Berners-Lee, measures the Web’s global impact. Web Index found that the Internet’s social impact on Filipino lives is high, including access to basic services, Web use for public health, and access to social networking sites. But the country got poor marks on communications infrastructure, which includes affordable Web access, percentage of households with computers, reliable power, and accessible digital content. Electioneering may spur other candidates to echo Magsaysay’s appeal to win votes. Others may oppose it if doing so would gain support from some firms. But the bottom line is: for the Philippines to keep up with Asia and bring more Filipinos the bounties of development, barangay broadband is a must.

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Companies must address workplace cyberbullying A recent study in Britain found that online bullying in the workplace may be worse than cyberbullying in school Office bullying affects both employee — by increasing job strain — and employer – by decreasing productivity and driving away talent Companies must act fast to increase awareness of and prevent cyberbullying at work

Most studies on online bullying focus on teens and children in school. Recent research, however, explored cyberbullying in the workplace and found that it may even be worse than cyberbullying at school, reports Discovery News. The researchers — Dr. Carolyn Axtell, Dr. Christine Sprigg, and Sam Farley of the University of Sheffield, and Dr. Iain Coyne of Nottingham University — examined three surveys of university employees in the U.K. Out of 320 respondents, eight out of ten reported experiencing cyberbullying at least once in the past six months, including being humiliated, gossipped about, or ignored. The study also found that 14%-20% of respondents suffered cyberbullying at least once a week, “not unlike what kids get at schools off-line,” according to the article.

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The researchers note that workplace bullying can negatively affect job satisfaction and increase mental strain among employees. Companies where bullying is pervasive could likewise find it hard to retain talent. In another study of workplace bullying in general, researchers from the University of British Columbia’s Sauder School of Business found that workers who witness bullying are as likely as victims to consider quitting. This, according to a Time article, “highlights the sometimes-ignored fact that bullying in the workplace isn’t just a moral problem, it’s a managerial and economic one too.” It may reflect poor management. Aside from maintaining good organizational relations and high productivity and job satisfaction, companies should address online bullying to avoid lawsuits if the behavior veers into sexual harassment, oppressive actions, and unfair labor practices. Businesses should act immediately and take remedial or preventive steps rather than wait for the government to step in. And in today’s digitally connected world, where companies big and small rely heavily on the Internet and ubiquitous digital devices, reducing cyberbullying should be a top priority. For one thing, the nastiness could get posted in social media for all the world to see, including company clientele. The U.K. study, however, reveals one difficulty in identifying and addressing cyberbullying. While people who saw bullying online seemed to suffer fewer ill effects than those who saw it in the “real world,” it also means people are less likely to report the problem. Firms should then mount awareness campaigns that help employees spot instances of bullying and offer them courses of action to address it without fear of reprisal. Otherwise, victims or witnesses bereft of internal grievance mechanisms may just tell the whole online world about it.

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Great Expectations

Is the pushy parenting that is said to characterize many Asian cultures still relevant today? By Marishka Noelle M. Cabrera

a humorous take on the stereotypical Asian parent, a cropped photo of an Asian man meant to depict the demanding father has a caption that reads: “If at first you don’t succeed, don’t come back home.” Another one reads: “All I want is for you to be happy and a doctor.” The “high-expectations father” meme has circulated within the online community through different humor sites on the web. (In Internet culture, a meme refers to “a concept that spreads rapidly from person to person via the Internet” through blogs, forums, email, and social networking sites.) Though sometimes offensive and even bordering on racist, this type of meme is only one indication

STRATEGY POINTS Academic achievement is perceived by many Asian societies as an avenue for upward mobility Asian-Americans are often depicted as overachievers, driven by the high expectations of their traditional Asian parents It is crucial for parents to find the proper balance in encouraging children to achieve excellence

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The High Expectations Father meme is a humorous take on the stereotypical pushy parent

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of the underlying reality of how pop culture has come to depict Asians or Asian-Americans. In movies and television shows, they are often seen by their American peers as overachievers, driven (or pressured) by the high expectations imposed on them by their traditional Asian parents. They are the ones who usually get straight A’s, play at least one instrument, and get into Ivy League schools to become highly paid professionals.

COLLEGE EDUCATION, AGES 25 AND OLDER, 2010 % with a bachelor’s degree or more U.S. Population U.S. Asians U.S. Asian groups Indian Korean Chinese

The model minority. Often labeled as the model

minority, Asian-American students are significantly outpacing their peers, based on a study from the Center on Education Policy cited in an April 2011 Washington Post article. The data, the report says, focused on student achievement on eighth-grade standardized tests and an analysis of student performance at advanced levels. Results show that in these advanced levels, the exceptional achievement of Asian-American middle-schoolers was most evident. Jack Jennings, president of the Center on Education Policy, is quoted in the report as saying: “The lesson for other groups is that effort counts. Asian American students are working harder, doing better, and getting ahead.”

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A graph from Pew Research Center’s “The Rise of Asian Americans” (p. 25) illustrates the percentage of Asian-Americans with a bachelor’s degree or more

international students in the u.s., by top regions of origin, 1850-2011

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Statistically, of the Asian-Americans ages 25 and older, 49% hold at least a college degree, compared with 28% of the U.S. population in 2010, according to the report by the Pew Research Center released in June. The report based on a nationwide survey describes Asian-Americans as “the highest-income, best-educated, and fastest-growing racial group in the United States.” This group also places more value on marriage, parenthood, hard work, and career success compared to other Americans. The Pew Research Center also notes in the report that young adults from Asian countries are

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A graph from “The Rise of Asian Americans” (p.26) shows the growth in the number of international students in the U.S. from 1950-2011, including a steady increase in students of Asian origin.

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overrepresented among current students studying at American institutions, accounting for more than six out of every 10 foreign students. China, India, and South Korea are the top three countries with students enrolled in the U.S. Moreover, foreign- and U.S.-born Asians are, likewise, overrepresented in the awarding of U.S. advanced degrees. In 2010, Asian students accounted for 25% of the 48,069 research doctorates granted at U.S. universities, and collected a plurality of Ph.D.s and doctorates in the fields of engineering, math and computer sciences, and physical, life, and social sciences awarded that year. In relation to academic and career achievement, the survey found that 39% of Asian-Americans, nearly four in 10, believe that their parents from their country of origin subgroup put too much pressure on children to do well in school, while 9% say the same about American parents. Conversely, six in 10 AsianAmericans feel that American parents put too little pressure on children to succeed academically. In comparing family characteristics of AngloAmerican and Asian-American high achievers, Philip O. Sijuwade from the School of Urban and Public Affairs at the University of Texas found “the family life of Anglo-American students tend to be less structured and provide less formal educational experience for children after school and on weekends.” Still, both Asian and Anglo parents of high achievers were found to have a similar value system. Sijuwade’s study was based on structured interviews with parents, and was published in the International Education Journal in 2001.

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Findings from a study published in April in the Journal of Cross-Cultural Psychology show that Asian-American parents apply greater academic pressure than Latino parents, as perceived by undergraduate students from both groups. Moreover, high expectations “predict greater self-doubt in children who fall short of expectations.” On the other hand, Latino students “who feel pressured to do well academically do not experience the same consequences as Asian students.”

Differences in children’s perceptions reflect cultural differences. A January 2011 Pacific

Standard article suggests that while Asian-Americans are perceived as pushy and demanding by Western standards, research shows Asian-American children feel their parents’ guidance as warm and loving. Gisela Tromssdorff of the Technical University in Aachen, Germany, explains in the article that children’s perceptions of parental control are founded on cultural values. Western cultures, she says, value independence and individuality, which may explain why their offspring may not appreciate control. But Japanese children, for instance, feel rejected when their parents exert too little control.

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discipline, and delaying gratification for future gains. However, the pressure for academic achievement is one that may cause a great deal of stress in cultures where education is regarded as an avenue for upward mobility.

University of California-Riverside psychologist Ruth Chao also notes in the report that Chinese parents describe their role as “guan,” which literally means “to control” or “to govern,” but also “to care for” or “to love.” The leading researcher of Asian-American parenting styles also mentions that Asian children understand that their parents are helping them achieve their goals and bring honor to the family, thus, feel less externally pressured. Even among Arab youth, various studies point to the idea that they are satisfied with the authoritarian style of parenting, as discussed in the study, “Parenting Styles in Arab Societies: A First Cross-Regional Research Study” published in the Journal of CrossCultural Psychology in 2006. Findings show that parenting styles differed across Arab societies, and cluster analysis revealed three combined parenting patterns: inconsistent (permissive and authoritarian), controlling (authoritarian and authoritative), and flexible (authoritative and permissive).

Pressure in East and South Asian families.

Generally, parental involvement is a manifestation of traditional Asian society values of hard work,

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In India, for instance, parents’ high educational expectations and pressure to achieve are the main documented causes of anxiety among schoolchildren and adolescents, based on a paper published in 2010 in the Australian Journal of Educational and Developmental Psychology. In the discussion portion of the study, the authors posit: “In a culture that judges an individual’s intellectual abilities and ascribes status on the basis of academic performance, it is perhaps not surprising that students become more anxious over their academic success and failures as they age.” In East Asian countries where Confucian ideals are strong, the value placed on education cannot be overemphasized. In a 2005 paper that discusses the cultural context of Korean education by professors Sunwoo Shin of the University of Memphis and Myung-sook Koh of Eastern Michigan University: “[G]enerally Eastern Asian students are highly motivated by a strong desire for upgrading their socioeconomic status, upholding family honor, acquiring admiration from their teachers and parents, self-achievement and getting a good job.”

‘Let your children have their childhood!’

Regarded by some as among the world’s strictest parents, Singaporeans were urged to loosen up a little, and by no less than their own leader. In a speech during this year’s celebration of Singapore’s

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‘Please let your children have their childhood!’ ~ Singapore Prime Minister Lee Hsien Loong

National Day, Prime Minister Lee Hsien Loong pleads, “Please let your children have their childhood!”, and continues to say that over-teaching pre-school children will do more harm than good. “Instead of growing up balanced and happy, he grows up narrow and neurotic,” he warns. The 2005 paper, “The potential of Singapore’s ability driven education to prepare students for a knowledge economy,” posits that given changing norms and external influences brought about by globalization, parents and other stakeholders in education must “accept the fact that that they may no longer impose their expectations on their children.” Parents need to realize, the paper says, that young Singaporeans have become more individualistic. “Increasingly, more young Singaporeans who have completed their education in Singapore have regretted spending too much time and energy on academic subjects that helped them ace their examinations but not helped them appreciate life,” the paper notes.

How much is too much pressure? The

drive for excellence is what makes Asians succeed

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academically and in their careers. Competitive stress, while a positive stimulus for achievement for young people, can have a major impact on health and well-being when prolonged. Suicide rates are said to be increasing among Asian-Americans, according to a 2009 report in China Daily. A 2010 paper published in the Journal of Science at Vietnam’s Hue University says depression, anxiety, behavioral problems and youth suicide can be products of severe stress brought about by educational pressure. The paper discusses the new research tool—the Educational Stress Scale for Adolescents (ESSA)—which measures academic stress among young people in Asia. An August 2011 article from mySahana, a non-profit organization dedicated to increasing awareness about the emotional and mental well-being of the South Asian community, tackles the effects of academic pressure on South Asian children. “When South Asian parents define their child in terms of how they perform academically, the children who do not meet their parents often unrealistic expectations begin to internalize the negative messages sent by their parents,” the article posits. It adds, “They think they are not worthy, not lovable, not important and that they are inherently flawed.” Time cites in a January report two papers that look at the experiences of Chinese-American children. Findings reveal that high-achieving Chinese children are more anxious, depressed, and had lower self-esteem than Caucasian children. Desiree Baolian Qin, assistant professor at Michigan State University, and her colleagues show in one study (which would eventually appear in the Spring 2012 issue of New Directions for Child and Adolescent Development) how school matters cause frequent

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friction and tension within the family. The other study, which would eventually appear in the August 2012 issue of Journal of Adolescence, says that potential flash points for parent-student conflict include: how much time is devoted to studying, which school to attend, and which college major to take.

Finding the right balance. The drive for excellence and parental involvement are distinct elements of a culture that values hard work and discipline more than innate ability in achieving success. Nevertheless, parents must learn to balance their expectations with the support and encouragement that the child needs, especially in a world that is increasingly interconnected and diverse.

Shabu vaccine shows promising results U.S. tests on rats show encouraging results for methamphetamine vaccine, which could lead to the first specific treatment for drug addiction Methamphetamine is the most commonly abused drug in the Philippines. If the vaccine is successful, it will greatly help the country in its war against illegal drugs

In an interview with The CenSEI Report, a university guidance counselor who asked not to be named suggests that one of the best ways to guide children is to realize their unique potentials first. Though some parents may feel the urge to compare their children with others, they must first see the skills, talents, and interests, and support them by expressing their belief in their ability to excel in those areas. It will also help parents in aligning their standards and expectations based on what the child wants and is capable of doing. In her experience working with students wanting to shift out of courses decided for them by their parents or those who fail to make it to the Deanâ&#x20AC;&#x2122;s List, she finds that parents, albeit disappointed, can be understanding once communication lines are open. She notes that while parents may have the best intentions in pushing their children to achieve, it has to be done with warmth, genuine care, and openness.

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Researchers at The Scripps Research Institute (TSRI) in California successfully tested methamphetamine vaccine on rats. This raises hope for the first specific treatment for meth addiction among humans, based on the Nov 1. TSRI news release. Rats injected with vaccine, which reportedly block the drugs effect on brain, showed few signs of intoxication when given meth. Meth addiction affects an estimated 25 million people around the world, TSRI says. Globally, meth has become

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one of the most common drugs of abuse over the past two decades. In the Philippines, the use of methamphetamine (locally known as shabu) was reported as stable or declining but the substance remains to be the most commonly abused drug in the country. So said the United Nations Office on Drugs and Crime (UNODC) “Patterns and Trends of AmphetamineType Stimulants and Other Drugs, Asia and Pacific 2011” report on the situation of amphetamine-type stimulants in the region submitted by drug control agencies and designated institutions in Asia and the Pacific for the years 2009 and 2010. According to Philippine Drug Enforcement Agency’s Annual Report 2010, shabu “continues to be the most abused drug in the country,” representing 75% of arrested persons per drug seized in 2010. In 2009, 62% of drug suspects were arrested in connection with shabu. Meanwhile, researchers at Weill Cornell Medical College in New York led by Ronald Crystal have developed two cocaine vaccines that show encouraging results, as reported by LiveScience on June 2012. The vaccines could be the first of a new line of anti-addiction treatments that use our own bodies to fight off addiction, the report says. “Cocaine addiction is a major social problem. It’s causes changes to behavior, it’s expensive and it’s illegal,” Crystal told LiveScience. “It’s very difficult to stop. If we could successfully develop a cocaine vaccine it would really be a very positive social advance.” The UNODC’s World Drug Report 2012 which says around 230 million people —one in 20 people— took illicit drugs at least once in 2010, says ongoing research on the development of vaccines that would

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help fight cocaine dependency are showing interesting preliminary results. “However, it will still be years, if not decades, before they are ready for use,” the report noted. Development of these vaccines should be monitored as it will help countries on their war against illegal drugs. Drug addiction does not only harm individual users but also spur crimes and violence. However, experts on addiction warn that anti-cocaine vaccine could lead to dangerous overdoses. Drug abusers will likely increase drug intake while they try to overcome the immunological blockade caused by the vaccine, according to a 2011 article posted on the Time magazine site. Talk therapy, support groups and similar treatments continue to be part of any successful recovery, the article adds.

Good news for ailing hearts A study finds that an experimental device converted energy from a beating heart to provide electricity to power a pacemaker Stem cells from strangers are as effective as a patient’s own cells in repairing heart tissue, a study reveals

A new device can harness energy from a beating heart to power pacemakers, doing away with repeat operations to replace batteries, according to a Nov. 4 report in Science Daily. Researchers tested an energyharvesting device using piezoelectricity generated from motion. It may also be able to power other cardiac devices like defibrillators.

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In another study, it was found that stem cells from strangers are as safe and effective as the patientâ&#x20AC;&#x2122;s own in helping restore heart tissue. In a Nov. 6 Associated Press report published in the Philippine Daily Inquirer, findings of the study suggest that stem cells can be banked for off-the-shelf use after heart attacks as blood is stored now. Researchers used a specific type of stem cells from bone marrow that the immune system does not detect as foreign tissue to be attacked.

leading cause of death in 2006, with a rate of 95.5 per 100,000 population.

Such positive findings bode well for treating cardiovascular diseases (CVD) affecting the heart and blood vessels, the top cause of death globally, according to World Health Organization (WHO) data. Though seen as a disease of the wealthy, in fact, more than four-fifths of CVD deaths happen in low- and middle-income countries, occurring almost equally in men and women. By 2030, almost 25 million people will die from CVDs, mainly from heart disease and stroke, the WHO projects. In the Philippines, data from the Department of Health (DOH) show that diseases of the heart was the

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A WHO report on CVD prevention and control suggests that while a large proportion of CVDs is preventable, they continue to rise because of inadequate preventive measures. According to the U.S. Centers for Disease Control and Prevention (CDC), people can lower risk of heart disease by addressing risk factors like blood cholesterol levels, high blood pressure, diabetes, tobacco and alcohol use, diet, physical inactivity, obesity, and heredity. While treatment breakthroughs like heart-powered pacemakers and antibody-resistant stem cells are welcome, prevention remains the better course in addressing CVD. Hence, the CDC suggests eating a healthy diet with plenty of fruits and vegetables and foods low in saturated fat and high in fiber; maintaining a healthy weight; exercising regularly to help maintain an ideal weight and lower cholesterol and blood pressure; cessation of cigarette smoking; and limiting alcohol use. Maintaining heart health is much easier and cheaper than treating heart disease.

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