TCR Volume 2 Issue No 40 by The CenSEI Report

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Volume 2 - Number 40 • December 10-30, 2012

NATION

Strategic Analysis and Research by the

Center for Strategy, Enterprise & Intelligence

NDRRMC: Initial reports indicate zero casualty ~ Philippine Information Agency article on Typhoon Pablo, December 4 Pablo death toll hits 647, damage at ₱7.116 billion ~ GMA News report, December 10

3 Can Filipinos Afford to Stop Working?

Reforms in pension programs are imperative, so that future retirees won’t be left indigent at the end of their working lives • Pension pillars: State aid, compulsory contributions, housing funds, and voluntary schemes

WORLD

15 Will Democracy Bring Peace to the Middle East?

Religious and ethnic radicals again raise their bloody fists in the Middle East, fueling unrest in Egypt, attacks in Israel, and civil war in Syria. Will greater freedom douse or fan the fires of extremism? • Cradle of civilization: Advancing human culture — and conflict — through the ages

BUSINESS

25 The Art of Mixing Progress and Profit

Inclusive business, social enterprise, impact investing are among the buzzwords in the growing global initiative for ventures that advance development and make money too • Do-gooder’s dictionary: Key words in combining commerce and causes

TECHNOLOGY

HEALTH/LIFESTYLE

37 There’s a Home-Grown App for That!

Filipino software developers are churning out more and more phone and tablet applications. Their market: 309 billion apps downloaded this year alone • The hottest apps: Downloading at a website near you

POINT & CLICK

45 Where to Holiday in 2013

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

From the mystical to the modern, here are the Asian tourist hotspots that will lure the seasoned adventurer and the accidental tourist alike

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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.

Another Year, Another Volume The CenSEI Report ends its second volume with this issue, dated December 10-30, as the staff takes the customary week-long Christmas break. But even through the holidays, the Center for Strategy, Enterprise & Intelligence takes no break from constant monitoring of global and national issues and events that impact on people’s lives, livelihoods and lands. It is with the three-week reading period ahead of the New Year in mind that CenSEI put together this week’s line-up of articles. The aim is to highlight major themes in global, national, business, technology and health that hold the potential for significant and lasting impact on the world or their sectors over the coming year, though it may not make the headlines now. The World analysis of Middle East conflicts may seem front-page, prime-time material, but in fact, its seminal thesis — that religion, not geopolitics, remains the overriding force driving the region’s upheavals, from Egypt and Israel to Syria, Iraq and Iran — has long fallen out of both academe and media circles. Yet the most intense protagonists in both domestic and cross-border strife are driven by religious fervor. And addressing this historic clash of faiths may hold the key to keeping the world’s hottest spot from runaway conflagration. Nation’s main article on the creeping aging and pension crisis is decidedly off the front page, given the current mass and media agitation over Typhoon Pablo’s devastation, Manny Pacquiao’s humiliation, and Christmas celebrations. But policies and decisions relating to pension contributions and benefits cannot but impact on the futures of both employers and employees. The strategic point: How much of current income should be set aside so that worrying about tomorrow doesn’t seriously hamper work today? Speaking of business, the end-year section lead introduces inclusive business and social enterprise, the fast-growing segment of the private sector that aims to marry progress and profit, boosting both the bottom line and the bottom of the social pyramid. How established and enduring is this idea of mixing commerce with causes? It seems so with the United Nations, World Bank and Asian Development Bank, J.P. Morgan and Credit Suisse, Harvard and Oxford, Virgin Group and PLDT-Smart, among other big names, pushing inclusive business and social enterprise. Read our primer in Business. Tourism and programming are the Health/Lifestyle and Technology subjects closing Volume 2 of The Censei Report. Ho hum, some may quip before turning to the stories: the hot new destinations beckoning to travelers in 2013, and the burgeoning Philippine industry in mobile and tablet apps. Will they be big next year? Read and find out.

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Can We Afford to Stop Working?

Reforms in the Philippinesâ&#x20AC;&#x2122; pension programs are imperative to secure the protection and welfare of future retirees By Jerome Balinton

STRATEGY POINTS The growing population of future retirees, coupled with labor force declines, will adversely affect the contribution-benefit schemes of the local social-security and government-service-insurance systems The weakening of the traditional, informal, family-based support mechanisms throughout Asia highlights the urgent need to strengthen institutional support for retirees Fostering elderly health and well-being, along with employment opportunities and an enabling environment, will encourage more elderly to continue working

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Can we afford to stop working?

he Social Security System, the Philippines’ state-run pension institution charged with providing social welfare for employees in the private sector, faces the risk of deficit by 2015 unless good management, sound investment decisions, and operational reforms are taken, according to a 2005 study, “Social Security System: Quo Vadis? (Where Are You Going?)” by Lina Valcarcel, as published in the Philippine Management Review. In her study, Valcarcel, an accounting and finance professor at the University of the Philippines’ College of Business Administration, reviewed the financial performance of SSS from 1998 to 2004. The SSS fund deficit identified by Valcarcel, as it turns out, is just one problem among the pension systems in most Asian countries, per the Asian Development Bank’s Oct. 2012 economics working paper series, “Reducing Disparities and Enhancing Sustainability in Asian Pension Systems” by Yves Guerard, Mukul Asher, Donghyun Park, and Gemma Estrada, and its Sept. 2012 book of country analyses, “Pension Systems in East and Southeast Asia: Promoting Fairness and Sustainability,” edited by Donghyun Park.

Aging, urbanization in Asia driving up numbers of retirees. According to the above-

mentioned ADB economics paper, population aging is a global phenomenon, and old-age income support will be one of the biggest social and economic challenges facing Asia in the 21st century. “A young continent that for the past few decades was reaping the demographic dividends of a large youthful workforce is giving way to a graying continent where falling fertility and increasing longevity are driving up the ratio of retirees to workers,” Guerard et al. wrote.

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Aside from population aging, the weakening of informal, family-based old-age support mechanisms throughout Asia is also the other factor that highlights the urgent need to strengthen old-age support in the region, per the ADB Institute April 2012 working paper series No. 358 by Donghyun Park and Gemma Estrada. According to Park and Estrada, Asians have traditionally relied upon their children to take care of their material needs in their old age. In effect, the family network was Asia’s pension system, especially in rural areas, where extended families of three generations often lived together under one roof and younger family members supported older family members, Park and Estrada wrote. Far-reaching social changes, e.g., rapid urbanization and declining relative importance of agriculture in the economy, accompanying the region’s robust growth, has led to weakening of traditional familybased old-age and intra-family support, and this suggests that formal pension systems will have to play a bigger role, according to the ADB’s April 2012 (Park and Estrada) and October 2012 papers (Guerard et al.,). Park and Estrada are also coauthors of Guerard and Asher in the mentioned ADB October 2012 paper.

Philippines’ falling fertility rate, urbanization.

According to a 2002 paper, “Fertility Decline In The Philippines: Current Status, Future Prospects,” by Marilou Costello and John Casterline, for a United Nations’ Department of Economic and Social Affairs Population Division

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population bulletin, “Completing the Fertility Transition,” demographers have been closely monitoring the trend in fertility in the Philippines since the 1960s. Total fertility rate is defined as the average number of births women can have at the end of their reproductive years.

Almost simultaneously, and by no means coincidentally, the reduction in the rate of population growth was articulated as national policy, followed soon thereafter by the provision of family-planning services through government outlets beginning in the early 1970s.

DEMOGRAPHIC INDICATORS OF SELECTED ASIAN COUNTRIES Country

Total Population

Average Annual RAte of

(million)

Change of Population

Total Fertility Rate

Median Age

Year

2010

2050

2005-2010

2045-2050

2005-2010

2045-2050

2010

2050

World

6,908.7

9,150.0

1.18

0.34

2.6

2.0

29.1

38.4

PRC

1,354.1

1,417.0

0.63

(0.33)

1.8

34.2

45.2

Indonesia

232.5

288.1

1.18

0.10

2.2

28.2

41.1

Rep. of

48.5

44.1

0.39

(0.77)

1.2

37.9

53.7

Malaysia

27.9

39.7

1.71

0.41

2.6

26.3

39.3

Philippines

93.6

146.2

1.82

0.60

3.1

23.2

35.0

Singapore

4.8

5.2

2.51

(0.45)

1.3

40.6

53.5

Thailand

68.1

73.4

0.65

(0.12)

1.8

33.2

41.4

Vietnam

89.0

111.7

1.15

0.09

2.1

28.2

42.4

Korea

Country

Life Expectancy at Birth

Life Expectancy at 60,

Percentage of Population

Population Aged 60 and

200-2005

Aged 60 and above

Above (million)

Year

2005-2010

2045-2050

Men

Women

2010

2050

2010

2050

World

67.6

75.5

(...)

11.0

21.9

759.1

2,008.2

PRC

73.0

79.3

12.3

31.1

166.5

440.4

Indonesia

70.7

78.6

8.9

24.8

20.8

71.6

Rep. of

79.4

83.8

15.6

40.8

7.6

18.0

Malaysia

74.2

80.1

7.8

22.2

2.2

8.8

Philippines

71.7

78.7

6.7

17.9

6.2

26.1

Singapore

80.3

84.1

16.0

39.6

0.8

2.1

Thailand

68.8

77.2

11.5

26.4

7.9

19.3

Korea

Table from “Developing Asia’s Pension Systems and Old-Age Income Support, (2012),” Asian Development Bank Institute Working Paper Series No. 358

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Can we afford to stop working?

Successive National Demographic Surveys were conducted at five-year intervals, with the 1968 NDS followed by the 1973 NDS and continuing through the 1998 National Demographic and Health Survey, seven surveys in total. The 2003 National Demographic Health Survey indicates that there has been a steady decline in fertility in the Philippines in the past three decades from 6.0 children per woman in 1970 to 3.5 children per woman in 2001. Based on the 2011 Family Health Survey, 3.1 was the average TFR at the national level. The ADB projected that from the 3.1 the total fertility rate in the Philippines will decline to 2.0 in the year 2045-2050. However, compared with current fertility levels in Southeast Asia, fertility in the Philippines is still relatively high. Only the levels of Laos (4.7 children per woman) and Cambodia (4.0 children per woman) are higher. The Philippines has experienced one of the highest urbanization rates in the developing world, registering 5.1% annual urban population growth from 1965 to 1995, according to a discussion draft on Philippine urbanization available at the World Bank site. “Though expected to slow down, urban population will continue to increase much faster than average population growth, and will account for 75% of the total population by 2030,” according to the draft. The increase in the country’s population growth will occur in urban areas, as rural population is actually projected to decrease slightly over the next 30 years. According to UN projections, close to 1.4 million people will be added into urban systems each year in the next 10 years.

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The increase in the country’s population growth will occur in urban areas, as rural population is actually projected to decrease slightly over the next 30 years Discrepancies in equity and sustainability.

The table on page 7 enumerates the different design features of SSS and GSIS. According to Reyes, the SSS and GSIS – mandatory defined-benefit programs – were created by separate laws and administered by separate, government-run pension institutions. Reyes wrote that “this has caused differences in both design and implementation that have raised concerns about fairness and sustainability.” The SSS was created with the enactment of Republic Act 1161, better known as the Social Security Act of 1954. It was passed in 1954 but was only implemented in 1957. In 1997, RA 8282 or the Social Security Act of 1997 strengthened the SSS. The GSIS was created by Commonwealth Act 186 of 1936. The United Nations Statistics Division defines definedbenefit pension plans as those in which the level of pension benefits promised to participating employees is guaranteed; benefits are related by some formula to participants’ length of service and salary and are not totally dependent on either the participants’ contributions or the assets in the fund.

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Low replacement rates and retirement age are key issues related to equity and sustainability of mandatory defined-benefit programs.

life, Rosario Manasan wrote in her July 2009 study for the Philippine Institute for Development Studies, “Social Insurance in the Philippines: Responding to the Global Financial Crisis and Beyond.”

Replacement rates too high? According to

Park and Estrada, replacement rate is the ratio of retirement income to preretirement income. It is the value of the pension payment as a percentage of the earnings of members during their working

According to Park and Estrada, the replacement rate is a widely used measure of the adequacy of pension benefit as a source of post-retirement income.

DESIGN FEATURES OF THE MANDATORY DEFINED-BENEFIT PROGRAMS Private sector (SSS)

Public (GSIS)

Optional retirement age

Mandatory retirement age

₱300

Not applicable

2% (AMSC)

2.5% (AMC+₱700)

40% of AMSC

90% AMC Maximum

5-year average

3-year average

10.40%

21.0%

7.07%

12.0%

Benefit formula Flat benefit Accumulation factor Benefit limits Salary averaging method Contribution rates Employer Employee Ceilings on salary credits Minimum service requirements Minimum salary eligibility

10 years

15 years Minimum wage

Available

31.%

Higher but data not available

75% of labor force

4% of labor force

23%

Compliance rate Coverage (elderly aged 60+) Sustainability

2031

2055

Limited

Maximum 10%

Minimum 40%

Portability Investment in member loans

9.0% No ceiling

₱1,000/month

Coverage of survivors Coverage (labor force aged 15-59)

3.33% ₱15,000

AMC = average monthly compensation in Philippine pesos; AMSC = average monthly salary credit Table from “Pension Systems in East and Southeast Asia: Promoting Fairness and Sustainability (2012),” Asian Development Bank

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Can we afford to stop working?

Four pillars of the Philippines’ pension system Present and future retirees in Asia – including the youth of today – face insecurity if pension systems remain “underdeveloped, fragmented, and poorly financed.” The Philippines’ current pension system is arranged into a four-pillar structure, according to Ernesto Reyes, in the chapter he wrote in the Asian Development Bank book “Pension Systems in East and Southeast Asia: Promoting Fairness and Sustainability,” edited by Donghyun Park and published in Sept. 2012. According to Reyes, the first pillar is the social-assistance scheme, wherein different government bodies -- particularly the Department of Social Welfare and Development, Department of Health, and Department of Interior and Local Government -- support the poorest in the society. Reyes wrote that the government’s provision for a monthly allowance of ₱500 on a regular basis (through the Senior Citizens Act of 2010) to the elderly poor as identified by the DSWD could be a step towards addressing the needs of the elderly poor who have not been covered by the contribution- and tenure-based programs. The second pillar includes the mandatory, defined-benefits programs under the publicly managed Social Security System (SSS) and Government Service Insurance System (GSIS). The GSIS covers public-sector employees, i.e., those working in the government. There is a separate system for some government officials such as those in the Armed Forces of the Philippines who are covered by the Retirement and Separation Benefit System (AFP-RSBS), according to discussion draft [paper] available at the World Bank site. The third pillar includes mandatory deposits maintained at the Home Development Mutual Fund (Pag-IBIG) set to provide housing funds and to encourage long-term savings, and for workers in the private sector, the mandatory retirement pay provided under RA 7641 (Retirement Pay Law). The fourth pillar is the voluntary programs. Under the voluntary programs are the Personal Employee Retirement Accounts. It provides for individual retirement accounts entitled to 5% tax credit for a maximum annual contribution of ₱100,000 for individuals and ₱200,000 for foreign workers. Reyes wrote that fund may be placed in PERA-approved products offered by accredited financial institutions that include banks, pre-need, mutual funds, and insurance companies. Primary points of discussion in this piece focus only on the disparities in the mandatory defined benefit programs (SSS and GSIS) of the Philippines pension systems.

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“A higher replacement rate enables pensioner to achieve a higher standard of living,” they wrote. Replacement rates in the Philippines are much higher than the best-practice rates of around 40% to 50%, Reyes wrote in the afore-mentioned ADB book on pension systems in East and Southeast Asia. In 2009, Manasan wrote that rates were estimated to be about 70% for the GSIS and 67% for the SSS in 2007, higher than those of Indonesia, Malaysia, Singapore, Thailand.

Due to this, the growth of contribution to the GSIS lagged behind that of benefit payments in 2000-2007, according to Manasan. The total benefits payments made by GSIS grew by 10% annually, from ₱17 billion in 2000 to ₱32.3 billion in 2007. On the other hand, member contributions rose from ₱35 billion in 2000 to ₱41 billion in 2007, reflecting a 2% yearly increase. Manasan wrote that the ratio of contributions to benefit payments declined continuously from 2.1 in 2000 to 1.3 in 2007.

REPLACEMENT RATES FOR VARIOUS WAGE LEVELS WITH 40 YEARS CREDITED SERVICE Monthly wage

1,993

3,986

levels (P)

7,972

15,944

23,916

200.00

300.00

(average)

As % of

25.00

50.00

100.00

average wage SSS

Wage ceiling

replacement

₱15,000

rete (%) Actual

120.42

79.34

78.07

71.89

48.59

Ceiling as % of

Covered

120.42

79.34

78.07

77.48

average wage

Relative

30.11

39.67

78.07

145.78

188.16

GSIS

Previous wage

replacement

ceiling ₱16,000

rate (%) Actual

N/A

88.20

59.01

Ceiling as % of

Covered

N/A

88.20

average wage

Relative

N/A

44.10

88.20

176.40

177.02

200.70

GSIS

No wage ceiling

replacement

after 2003

rate (%) Actual

N/A

88.20

Covered

N/A

88.20

Relative

N/A

44.10

88.20

176.40

264.60

Table from “Pension System in East and Southeast Asia: Promoting Fairness and Sustainability (2012),” Asian Development Bank

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Can we afford to stop working?

According to Manasan, the benefits of SSS members increased almost yearly in the 1990s by about 12% yearly on the average (higher than average inflation rate of 10%) but the contribution rate remained constant prior to the increase implemented in 2003. This resulted in the continuous deterioration in the financial sustainability of the SSS during the period” (1990-2003). The actuarial life of the fund of SSS plummeted from perpetuity based on the 1990 actuarial valuation report, to 2040 based on the 1995 actuarial valuation report, then to 2015 based on the 1999 actuarial valuation report. According to Reyes, high replacement rates make the pension programs unsustainable as the population ages and are also not in line with the pension system’s key objectives. Reyes also wrote that the large discrepancy between the contribution rates of the GSIS (21%) and the SSS (10.4%) reflects the significant imbalance between contributions and benefits in the SSS. This accounts for its shorter fund life (2031) compared to that of the GSIS (2055).

Raising the retirement age. Another

fundamental issue to consider the sustainability of the pension system in the Philippines and other Asian countries is the retirement age, or the age at which retirees begin to receive their benefits, based on the papers and studies by ADB, World Bank, and PIDS. According to the World Bank and OECD report, “Pensions at a Glance: Asia/Pacific Edition,” which examined the retirement- income systems of 18 countries in the region, early retirement ages and relatively high pension levels threaten financial stability.

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High replacement rates make the pension programs unsustainable as the population ages, and are also not in line with the pension system’s key objectives

According to Reyes, the decreasing in fertility rates combined with increasing life expectancy will age the Philippine population. Relatively, the Philippine population is still young (median age 22) compared with Asian neighbors, but is clearly aging, he wrote in the afore-mentioned ADB book on pension systems in East and Southeast Asia. The current programs allow early retirement at age 60 and mandatory retirement at age 65, with 10 years of service under the SSS and 15 years under the GSIS. Reyes wrote that when workers opt for early retirement, the effects are two-fold: fewer contributions to the fund and longer pay-out periods. The pay-out period is further extended with survivor’s benefits for male retirees, as females have longer life expectancies. “The ratio of elderly Filipinos aged over 60 to the working age group (15–59) will increase about three times from 11% in 2010 to 29% in 2050, reflecting the increasing burden towards the support of the elderly,” Reyes predicted. The figure below shows the projected shift in the age of distribution to higher ages that will increase the burden on the current labor force for supporting

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the aged. Reyes wrote that if this trend continues, the top-heavy structure may eventually result in the collapse of the system.

COMPARATIVE AGE DISTRIBUTION OF THE PHILIPPINE POPULATION IN 2010 AND 2050

workers, the self-employed and unpaid family workers—averaged over 16 million people in 2006, accounting for almost 50% of total employment. A 1997 study showed that the income levels of a great number of these workers fell below the poverty threshold and that about 65% of the working members of poor families were in the informal sector, the World Bank paper said. The Philippines’ social-security system has not covered even half of the country’s informal sector workers. In addition, despite the fact that social security is mandatory for virtually all workers, compliance and evasion are serious problems. The number of contributing workers in 2006 was only about a third of the total workers registered, or roughly 8 million people. Among the self-employed members, the problem is worse, with less than one-fifth actually contributing to the system, the discussion paper said.

Labor income as old-age support. According

Graph from “Pension System in East and Southeast Asia: Promoting Fairness and Sustainability (2012),” ADB

An increase in retirement age could assist in achieving the target replacement rates, in line with increasing life expectancies. Raising the retirement age is an option for improving the program’s sustainability by reducing the current imbalance between contributions and benefits, Reyes wrote.

How about the informal sector? According to

a March 2009 World Bank SP Discussion Paper No. 0903, “Pension Systems for the Informal Sector in Asia,” edited by Landis MacKellar, the Philippines’ informal-sector workers -- comprising own-account

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to a June 2012 study, “Filipino Elderly Living Arrangements, Work Activity and Labor Income as Old-age Support,” by Rachel Racelis, Michael Ralph Abrigo, and J.M. Ian Salas, published by PIDS in October, results from the 2007 National Transfer Accounts for the Philippines showed that consumption of the elderly 58 years and older is financed only partly from their own earnings, resulting in what is called a “lifestyle deficit.”

That is, labor income is not sufficient to cover the consumption requirement of this group, and the balance is financed by other sources, including private (household) transfers, asset income and a very small portion from public transfers, including public pension. “The size of the elderly population in the Philippines is projected to increase significantly in the coming

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decades and the fast increase in their aggregate consumption will consequently follow,” the authors wrote. According to them, the proportion of aggregate consumption accounted for by this older population is estimated to reach 17% in 2040 compared to 9% in 2007. And the share of aggregate lifecycle deficits attributable to the older population is also estimated to be higher in 2040, at 24% compared to 10% in 2007. The challenge would then be finding the means to finance this group’s growing consumption in the future. Policies in the Philippines regarding economic support for the elderly have generally centered on pension systems, and there is a need to expand the scope and put attention to strengthening all financing sources. The authors proposed that the government action can focus on elderly health and well-being, and elderly employment opportunities and enabling environment to encourage more elderly to continue working. According to Racelis, Abrigo, and Salas, the government can strengthen, finance and expand the implementation of existing provisions that address the two areas, such as those articulated in the Senior Citizen’s Acts (1992 Republic Act 7432 and 2003 RA 9257), the Philippine Plans of Action for Senior Citizens (1999-2004 and 2006-2010), and programs of the DOH and PhilHealth. They added that the Labor Code can be amended, first by extending the mandatory retirement age to increase elderly participation in the formal sector, and then including specific provisions that will protect the elderly in the workplace. Doing these would constitute an important source of financing for elderly consumption and can potentially remain important in the future.

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News & Strategy Alerts Nation

Maximizing the economic impact of remittances Remittance services that charge lower rates than the commercial remittance companies will eliminate fly-by-night remittance companies. Since remittance-receiving families are inclined to entrepreneurial enterprises, the government can help by providing necessary support mechanisms Migrant workers from the world’s least developing countries sent home $27 billion (21 billion euros) in 2011 despite the global financial slowdown, but the developmental impact of their remittances at a macroeconomic level is far less clear cut,” the United Nations said. “On the negative side, the adverse effect of remittances on labor market outcomes may reduce economic growth, especially if a culture of dependency on foreign transfers becomes gradually entrenched,” the United Nations Conference on Trade and Development said in the report, “The Least Developed Countries Report 2012: Harnessing Remittances and Diaspora Knowledge to Build Productive Capabilities.” (Click the following link to see the list of 48 least developed countries referred to in the report) The case of the Philippines, which is not on that list of least-developed countries, is far more impressive than those of the LDCs, but reforms are still needed to ensure that remittances from our nation’s new heroes will boost economic growth at the same time that they boost foreign exchange reserves.

The number of OFWs continues to grow. In a

span of three decades, the number of overseas Filipino workers (OFWs) has increased tremendously, from

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36,035 in 1975 to over a million by 2006, according to the National Statistical Coordination Board. As of 2010, the number of OFWs has been estimated at 1.47 million (38.4% higher than its 2006 figure).

of sending remittances is a key driver of remittances. Consequently, reducing remittance cost has been identified as a key policy objective to facilitate these flows.

In 2011, the total number of OFWs continued to rise, expanding by 15.4% during the year, with the land-based and sea-based workers increasing by 19.5% and 2.5%, respectively. According to NSCB, the increasing number of OFWs improves the country’s Gross National Income as estimates of compensation continue on an increasing trend, contributing on the average a share of 22% to GNI.

December 2007 policy note, “How do Filipino Families Use the OFW Remittances?” by Aubrey Tabuga, a research associate of the Philippine Institute for Development Studies, families of OFWs are spending remittances for better uses, such as education, medical care and housing aside from other basic needs.

Remittances, as reported by the Bangko Sentral ng Pilipinas (BSP), have been credited with boosting GNI, as this contributes to higher estimates of household final consumption expenditures and gross capital formation, the NSCB said. In 2011 alone, OFW remittances amounted to US$20.11 billion (₱871.25 billion), about 6.8% of the country’s GNI for that year.

World Bank remittances projection. According to a November World Bank brief on global migration and remittances, remittance flows to the developing world are expected to exceed earlier estimates and total $406 billion, an increase of 6.5% over the level of the previous year. Remittances to developing countries are projected to grow by 7.9% in 2013, 10.1% in 2014 and 10.7% in 2015, by which time they are projected to reach $534 billion, the World Bank said. The above-mentioned amount of OFW remittances is an undoubtedly valuable component of the country’s economic growth and foreign exchange reserves. Hence, the government, through the BSP, should establish remittance services that charge lower rates than commercial remittance companies. This will save overseas workers from having to pay expensive fees to send remittances home, while providing authorities a better accounting of remittances. As per the World Bank brief, the cost

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Better living for families of OFWs. According to a

Remittances are potential tool for economic development, especially if they can be channeled into productive investment, according to the UN paper, “Towards Human Resilience: Sustaining MDG Progress in an Age of Economic Uncertainty,” quoting Dilip Ratha. In a World Bank paper, “International Migration, Human Capital and Entrepreneurship: Evidence from Philippine Migrants’ Exchange Rate Shocks,” author Dean Yang disputed that while there is little evidence of a clear and strong relationship between increased remittances via the peso depreciation and overall entrepreneurial activities, increased remittances via exchange rate shocks lead to entry into new entrepreneurial activities. In particular, these activities are in transportation and communication services and manufacturing, both of which require large upfront fixed investments. “The expenditure patterns and investment behavior of remittance-receiving families reflect the general condition of the country, specifically its investment climate,” Tabuga wrote. Tabuga said that since remittance-receiving families have tendencies to work more on self-employment activities and enter into entrepreneurial enterprises, the government should enhance its role in providing necessary support mechanisms, e.g., helping these families find business and franchising opportunities.

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San Pedro Calungsod and Cardinal Luis Antonio Tagle — Party time or renewal time for the Philippine Catholic Church?

the faith in the liturgy, especially in the Eucharist, which is ‘the summit towards which the activity of the Church is directed... and also the source from which all of its power flows’ (Sacrosanctum Concilium, 10).

The canonization of Pedro Calungsod and the appointment and installation to the College of Cardinals of H.E. Luis Antonio Cardinal Tagle may bring about resurgence in the local Catholic Church, which may give it more power and influence in Philippine society The attention drawn from these two significant events should serve as impetus for initiating systemic reforms in the Catholic Church, particularly in the areas of catechetical instruction and formation of the faithful, for an authentic conversion from nominal Catholics to Catholics deeply living their faith in their daily lives

These two events should be not just festive celebrations but vehicles for renewal and growth that will lead into radical reforms in the life and the ministries of the Church in the Philippines. A Church that is more pro-poor and that practices what it preaches.

These events took place in the recently commenced Year of Faith, declared by Pope Benedict to be from October 11, 2012 to November 24, 2013. “Pope Benedict XVI has called for this special year as an invitation to a “an authentic and renewed conversion to the Lord, the one Saviour of the world” (Apostolic Letter, Porta Fidei, 6). He hopes it will inspire in all believers, “the aspiration to profess the faith in fullness and with renewed conviction, with confidence and hope. It will also be a good opportunity to intensify the celebration of

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Recently the local Church hierarchy has been at odds with the Aquino administration over the controversial Reproductive Health Bill. The Catholic Bishops’ Conference of the Philippines even urged its faithful to reject in the May 2013 elections those politicians who vote for the passing of the RH Bill. Will the faithful listen to the bishops? Will the canonization of a new saint and the installation of a new cardinal trigger a renewal of faith and give the local Church more power and influence over Philippine society?

Pedro Calungsod was canonized by Pope Benedict XVI on October 21, together with six other saints from different parts of the world, making him the second Filipino saint after San Lorenzo Ruiz. On November 24, Archbishop Luis Antonio G. Tagle of Manila was appointed and installed to the College of Cardinals by Pope Benedict XVI at St. Peter’s Basilica, Rome.

With 80% of its population being Catholic, the Philippines is one of only two predominantly Catholic countries in Asia (the other being East Timor). Although the Philippines is a democratic republic with a doctrine of the separation of church and state embedded in its Constitution, the Catholic Church has exerted tremendous influence over its civil laws, culture, and traditions, and has been a kingmaker for many politicians.

The challenge for the Catholic Church in the Philippines is to harness these two recent significant events that breathe fresh air into the life of the Church to initiate reforms and strengthen the instructions and formations of the faithful. In a nutshell, the canonization of San Pedro Calungsod and the installation of Luis Antonio Cardinal Tagle will only be as inspiring and energizing as the “follow-ups” that the local Church will make.

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Will Democracy Bring Peace? Amid growing fears of bloody unrest and regionwide war, the march of freedom across the Middle East offers hope By Celso Cainglet

As the conflict with Israel intensifies, the Palestinian leadership vows to continue resistance Al-Jazeera

STRATEGY POINTS Conflicts in the Middle East go beyond politics. To understand them better, they must be viewed through the religious beliefs of peoples The Middle East battles may erupt into a full-blown regional war if not settled through diplomacy, and may even trigger a global conflict The democratization of theocratic states and their cultures could temper the extremist tendencies of many groups or movements

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The recent eight-day war between Israel and Palestinians, according to Iran’s PressTV, resulted in US$1.2 billion in damage. “Over 160 Palestinians, including women and children, were killed and about 1,200 others were injured in the Israeli attacks on Gaza. In retaliation, Palestinian resistance fighters fired rockets and missiles into Israeli cities, killing at least five Israelis.” The violence ended when Egypt brokered a ceasefire which the Palestinian and Israeli leaders have accepted. Even with that, however, tension remains high in the region. Is the conflict between Israel and Palestine merely a contest between territories or is there a deeper cause of the origin? Will the conflict have global ramifications?

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Will democracy bring peace?

Are the wars in the Middle East all about territory, oil resource, trade routes or is there a deeper cause that many social scientists or analysts fail or refuse to see?

on December 30, 2006. Everybody thought this was the end of war in Iraq, but from there, the insurgency that resulted from the occupation of Iraq prolonged the conflicts.

Before we go into further discussion on the roots of conflicts in the Middle East, let us examine briefly the origin of the region and the major conflicts that erupted in recent times.

Apart from the recent U.S.-led wars in Iraq and Afghanistan, the world has witnessed a rash of other conflicts in the Middle East, most of which were triggered by the Arab Spring. Wikipedia describes the Arab Spring as “a term given to the Arab Revolution, is a revolutionary wave of demonstrations, protests, and wars occurring in the Arab world that began on

Arab Spring brings more conflicts. The Iraq war ended with the execution of Saddam Hussein

Cradle of civilizations Since the dawn of human history the Middle East has always been a center of conflicts. The region is believed to be where the first human civilization sprouted—the Sumerians in what is now Iraq. “Soon after the Sumerian civilization began, the Nile River valley of ancient Egypt was unified under the Pharaohs in the 4th millennium BC, and civilization quickly spread through the Fertile Crescent to the west coast of the Mediterranean Sea and throughout the Levant. The Elamites, Hittites, Amorites, Phoenicians, Israelites and others later built important states in this region.”

The Middle East: From the cradle of civilizations to their possible graveyard?

The Middle East was home to many empires, namely the Assyrian, Persians and a huge size of it was conquered by the Roman Empire around 1st century BC. “As the Christian religion spread throughout the Roman and Persian Empires, it took root in the Middle East, and cities such as Alexandria and Edessa became important centers of Christian scholarship.” Islam was born in the 6th century AD and soon after spread like wildfire in the Middle East. The conflict between Christianity and Islam brought forth one of the most bloody wars in human history—the Crusades. The Ottoman Empire with the help of the caliphate somehow tempered that part of the world for many centuries. However, the post-Ottoman empire bred many more conflicts. The birth of modern nation-state defined the territories and established sovereignty but ethnic and religious differences within territories were often manifested in bloody wars.

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‘To date, rulers have been forced from power in Tunisia, Egypt, Libya, and Yemen; civil uprisings have erupted in Bahrain and Syria ... major protests have broken out in Algeria, Iraq, Jordan, Kuwait, Morocco and Sudan ... minor protests have occurred in Lebanon, Mauritania, Oman, Saudi Arabia, Djibouti, and Western Sahara’ -- from the Wikipedia page on Arab Spring

18 December 2010. To date, rulers have been forced from power in Tunisia, Egypt, Libya, and Yemen; civil uprisings have erupted in Bahrain and Syria; major protests have broken out in Algeria, Iraq, Jordan, Kuwait, Morocco and Sudan; and minor protests have occurred in Lebanon, Mauritania, Oman, Saudi Arabia, Djibouti, and Western Sahara. The major oil rich nations (Saudi Arabia, UAE, Qatar, Kuwait and Oman) have been able to keep their ruling families in power.” Arab Spring-initiated protests “have shared techniques of mostly civil resistance in sustained campaigns involving strikes, demonstrations, marches, and rallies, as well as the effective use of social media to organize, communicate, and raise awareness in the face of state attempts at repression and Internet censorship.” The Arab Spring protests first started in Tunisia when street vendor Mohamed Bouazizi set himself on fire in Dec. 2010, to protest his wares being confiscated by the police and his harassment at the hands of local officials. Bouazizi’s self-immolation touched off violent street demonstrations that eventually led to the ouster

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of Tunisian president Zine El Abidine Ben Ali on January 14, 2012. Inspired by the Tunisian revolt, Egyptian presidential candidate Mohamed ElBaradei warned of a “Tunisian style explosion.” Protest in Egypt began in January 25, 2011, and it was aggravated when the government eliminated access to the internet to prevent the population from accessing social networking sites in order to organize and mobilize. President Hosni Mubarak resigned on February 10, 2011, and transferred power to the Armed Forces of Egypt. Libya caught the fever on February 15, 2011, after which the opposition protesting Moammar Gaddafi’s corrupt government conquered one city after another, until they successfully captured Tripoli and forced Gaddafi’s retreat to Sirte. On October 20, 2011, the National Transitional Council took control of Sirte, captured Gaddafi, and executed him, thus ending his 42-year rule. Arab Spring protests spread like wildfire in the Middle East. In Yemen, President Ali Abdulah Saleh resigned, Syria plunged into civil war and many died in the

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uprising in Bahrain. All these conflicts resulted in numerous loss of human lives, properties and sent the prices of oil on a roller-coaster ride.

A clash of civilizations. In 1993, the journal

Foreign Affairs published Harvard political science professor Samuel Huntington’s article, “The Clash of Civilizations?,” in which he predicted that “people’s cultural and religious identities will be the primary source of conflict in the post-Cold War world.” Hence, the conflicts of the future will pit civilizations of similar cultural and religious origins against civilizations of differing cultural and religious origins. (See graphic below) We have seen in the past two decades the relative decline of the West and the resurgence of Asia. The economic prosperity being enjoyed by Asians will be followed by military build-up, and with a strong military comes new global political influence. The West is threatened by this phenomenon and may recklessly

intervene to put a lid on this expansion. According to Huntington, the West has always prevented any hegemony in a region. China for instance is asserting its dominance in Asia pushing for Chinese hegemony in the region. Huntington said that the West (represented by the United States) is not comfortable with this movement, and will intervene to maintain the balance of power not only in the region but in the world.

Samuel Huntington (l) discusses “The Clash of Civilizations” with Charlie Rose

Western Orthodox Islamic African Latin American Sinic Hindu Buddhist Japanese

Map from Wikipedia page on “The Clash of Civilizations”

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Huntington also noted “that ‘civilizational conflicts’ are particularly prevalent between Muslims and non-Muslims, identifying the ‘bloody borders’ between Islamic and non-Islamic civilizations. This conflict dates back as far as the initial thrust of Islam into Europe, its eventual expulsion in the Iberian reconquest, the attacks of the Ottoman Turks on Eastern Europe and Vienna, and the European imperial division of the Islamic nations in the 1800s and 1900s.” The border war between Israel and Palestine has deep religious significance. The conflict between the Jews and the Arabs dates back as far as the conflict between Ishmael and Isaac the sons of Abraham (Genesis 21). In holy scripture and ethnic tradition, Ishmael became the father of the Arab nation, while Isaac became the father of the Jewish nation. When the Arab nation embraced Islam, the conflict took a new form as a conflict between the Jews and the Muslims. Christians have tendencies to side with the Jews, for they trace their lineage in Judaism until the coming of Jesus Christ, whom Christians believe to be the Messiah, who is the fulfilment of the Old Testament prophecy, hence the term “Judeo-Christian.”

two major groups committed to the destruction of Israel. The nuclear program of Iran is making Israel very uncomfortable. As reported on Dec. 5 in the U.S.-based Jewish newspaper The Algemeiner, Iran is expected to develop full nuclear capability by 2013. Israel threatened Iran “that it is prepared to take unilateral military action against Iran if the international community fails to stop any development of nuclear weapons at the country’s atomic energy facilities.” Israel has been brandishing capabilities such as its “David’s Sling” missile defense system, designed to protect Israel in case of a nuclear attack from Iran, and drones that can gather intelligence on or directly take out Iran’s nuclear facilities. Iran has strategic control over the Strait of Hormuz, a major oil route. If Iran is attacked it can easily paralyze the Strait, hence disrupting global oil supply.

More troubles to come? Israel is already

at odds with its Muslim neighbors. Gone are the days of Iran’s Pahlavi Dynasty, when Israel and Iran enjoyed close ties, “since the Islamic Revolution led by Ayatollah Ruhollah Khomeini. Iran has severed all diplomatic and commercial ties with Israel, and its government does not recognize Israel as a country and refers to its government as the ‘Zionist regime.’ The land is referred to by Iran as ‘Occupied territories.’” Since then, Iran has been supplying political support and weapons to Hamas and Hezbollah,

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Stunner Missile, part of Israel’s David’s Sling missile-defense system

Photo from “New pillar of defense: Israel successfully test fires David’s Sling,” Nov. 26, 2012, Russia Today website

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If Israel (and/or the U.S.) attack Iran, the world will be watching to see what Iran’s main allies, Russia and China will do in response. In April, the World Socialist Web Site reported that Russia is already making preparations in case that happens. General Leonid Ivashov, president of the Academy of Geopolitical Science, wrote that “a war against Iran would be a war against Russia.” For China’s part, it was widely reported in late 2011 and early this year that China would not hesitate to help Iran in case it is attacked. (Since then, as reported in Al Jazeera in September, Russia and China supported a nonbinding U.S.-sponsored resolution demanding that Iran stop activities that could lead to the development of nuclear arms, which was regarded as significant, given that China is a major buyer of Iranian oil and Russia maintains close commercial ties with Iran.)

From theocracy to democracy. If Huntington

is correct that the post-Cold War conflicts are motivated by cultural and religious differences, what is the key to ensuring that peace and not war will prevail in the Middle East, and by extension, around the world?

For his part, Mehran Kamrava, Director of the Center for International and Regional Studies at the Georgetown University School of Foreign Service in Qatar believes that the nature of most conflicts in the Middle East is political and not religious. According to him, they are political conflicts that are given religious symbolism. Contests over territories, political positions, and resources are given religious significance by political actors in order to gain more credence and legitimacy from the populace. The political manipulation of religion is always given a narrow interpretation by the state for its own political purposes.

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Religion can always be used as an ideology (in the pejorative sense) to legitimize particular interests. Marxist philosopher Louis Althusser claimed that religion as an ideology is one of the state apparatus used to legitimize state oppression. From the other side of the ideological fence, David Theroux of The Independent Institute quotes Christian writer C. S. Lewis in maintaining that, “Theocracy is the worst of all possible governments. All political power is at best a necessary evil: but it is least evil when its sanctions are most modest and commonplace ... Anything transcendental or spiritual, or even anything very strongly ethical, in its pretensions is dangerous and encourages it to meddle with our private lives.” The problem with religious laws is that they can be subject to narrow interpretations that favor a particular class or group interests based strictly on religion, and as such, they can threaten pluralism by simply forcing conformity and discouraging debate. Truth is not the monopoly of a a single perspective. No matter how limited a democratic system is, at least consensus over issues of governance can be arrived at through dialogue.

Active public sphere healthy for social and political environments. Frankfurt School

philosopher Jürgen Habermas asserted that the maintenance of a “public sphere” is healthy for societal and political life. “The principles of the public sphere involve an open discussion of all issues of general concern in which discursive argumentation was employed to ascertain general interests and the public good. The public sphere thus presupposed freedoms of speech and assembly, a free press, and the right to freely participate in political debate and decision-making. After the democratic revolutions, Habermas suggested, the bourgeois public sphere was institutionalized in constitutional

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In a democracy with a functional public sphere, no class or group can monopolize the discussion or the decision-making process

orders which guaranteed a wide range of political rights, and which established a judicial system that was to mediate between claims between various individuals or groups, or between individuals and groups and the state.” In a democracy with a functional public sphere, no class or group can monopolize the discussion or the decision-making process. The hidden interest of a class is unmasked, and the unforced wisdom of the better argument prevails.

Israel’s hard-line Zionist stand has its doubters. Even in Israel, some Jews do not agree

with its government’s hard-line Zionist stand. in an August op-ed piece, “Israel’s Fading Democracy,” for the New York Times, Avraham Burg, former speaker of Israel’s Knesset, and now the chairman of Molad, The Center for Renewal of Democracy, laments how Israel has transformed into a religious capitalist state. To quote Burg: “Israel arose as a secular, social democratic country inspired by Western European democracies. With time, however,

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its core values have become entirely different. Israel today is a religious, capitalist state. Its religiosity is defined by the most extreme Orthodox interpretations. Its capitalism has erased much of the social solidarity of the past, with the exception of a few remaining vestiges of a welfare state. Israel defines itself as a ‘Jewish and democratic state.’ However, because Israel has never created a system of checks and balances between these two sources of authority, they are closer than ever to a terrible clash.” It will be worth to note also that there are other ethno-religious groups, like the Arabs and Christians living in Israel either as Israeli citizens or permanent residents of Palestinian origin. The Arabs comprise about 20.4%, of which 82% are Muslims, while Arab Druze and Christians each comprise about 9% of that total. Jews living in developed countries and who have seen other possible way of living that is democratic and free may import this paradigm into their motherland. It might not be a surprise if Israel has its own Jewish Spring before long, The Economist posited in a July special report.

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Will democracy bring peace?

“The plethora of religious innovation, both in Israel and in the diaspora, is hopeful, too, reflecting Judaism’s diverse efforts to reconcile modernity and faith. Granted, the haredim are not currently part of that ferment, but nor are they oblivious to it. The issues—the soul of the Jewish state, the spirit of its supporters abroad, the Jewishness of its immigrant citizens—are too important to be left to rabbis and politicians still fighting old factional wars,” the publication said. The Arab Spring uprisings that call for more democratic and just societies, even amid allegations that they were initiated and funded by some interested countries or ethno-religious group (discussed here on the Media With Conscience website), were still hopeful signs that the people themselves are taking the initiative in making their nation a better place to live, and that is one of the essential features of democracy. Theocratic societies democratizing themselves could be a viable solution in pacifiying the region. The brand of democracy that may emerge may not exactly be the Western brand, but what is important is the hegemony of a class or ethno-religious group are is deconstructed. Turkey is a good example. Mustafa Kemal Ataturk, the father of modern-day Turkey, modernized Turkey by dichotomizing civil and religious laws among others. Hence, up to this day, although it is predominantly Muslim, Turkey remains moderate. The present monolithic Middle East societies should be open to democracy and pluralism. As such it will accommodate plurality of perspectives, and such an attitude will have a transformative effect in the temperament of these nations, making them more open to dialogue and cooperation in dealing with the international community.

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News & Strategy Alerts World

The insourcing boom General Electric is moving its manufacturing operations back to the U.S. With U.S. President Barack Obama’s reelection, he will be focusing on making gains in the country’s fragile economic recovery and providing more jobs for Americans, which means outsourcing will be discouraged If the trend continues, the IT-BPO industry in the Philippines may be adversely affected “I want us to be known for making and selling products all over the world stamped with three proud words: ‘Made in America’,” United States President Barack Obama said in January amid efforts to provide jobs in a fragile economy. Represented in the meeting with the president were major companies like Ford, DuPont, Intel, and Rolls Royce. He laid out a blueprint for an America built to last—an economy that is built on American manufacturing, American energy, skills for American workers, and a renewal of American values. To discourage outsourcing and encourage insourcing in the manufacturing sector, President Obama believes the government should: • Take away the deduction for outsourcing, make companies pay a minimum tax for profits and jobs overseas, and reward companies for bringing jobs back to America • Lower tax rates for companies that manufacture and create jobs in the U.S. This year, General Electric is bringing its manufacturing operations back to America, as discussed in an article in the December issue of The Atlantic. Writer Charles Fishman cites major reasons for the insourcing boom, such as: rising oil prices which impacts cargo-fuel prices;

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the natural-gas boom in the U.S., making the cost of running a factory less expensive; and increasing wages in China, among others. In June, Ford announced they would discontinue manufacturing operations in Santa Rosa, Laguna, starting 2013, in a GMA News report. The lack of supply base and economies of scale were cited as the major reasons for the move, according to Peter Fleet, Ford Asean president. Though it did not say in the report where the new plant will be located, the move underscores the importance of foreign investments in providing jobs for Filipinos. As the era of “cheap China” declined, manufacturing production slowly came back to the U.S. from China and other low-wage countries that reversed “a decadelong trend of outsourcing production overseas.” This is according to Dr. Mark Perry, professor in the School of Management at the Flint Campus of the University of Michigan, in his article published in Business Horizon Quarterly. He also cites the increased competitiveness of U.S. manufacturing as the reason why American companies have moved their production and thousands of jobs back home. He concludes: “After years of negative reports about the decline of American manufacturing, it’s now time to recognize and celebrate a great turning point, as America’s industrial sector moves in a new direction that many are now calling a ‘manufacturing renaissance’.” One other sector that will be hit by the insourcing boom is the information technology-business process outsourcing (IT-BPO) industry overseas. The main driver of outsourcing is to achieve competitive advantage by lowering labor and operational costs. But with Obama’s continued focus on the U.S. economy, particularly giving jobs to ordinary Americans, countries that depend on the U.S. for growth in their IT-BPO industries will be affected. In a report by the Bangko Sentral ng Pilipinas (BSP), the U.S. remained the major market for the Philippines’

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IT-BPO exports, accounting for $7.6 billion, or 80% of the industry’s total exports in 2010. Other leading markets like Europe and Japan represented 9.9% and 3.6%, respectively. The BSP report pertained to the results of the survey of IT-BPO services in 2010. With some Western companies rethinking their business models to adapt to changes in the global economy, outsourcing becomes less of a go-to decision when it comes to lowering costs. Government must be prepared to look for other sources of foreign investments, and at the same time, improve the business climate in the country. It is also imperative for BPOs in the Philippines to remain competitive in terms of quality and efficiency to continue to make outsourcing a viable business decision. In a report on Deloitte’s 2012 global outsourcing and insourcing survey, it was revealed that “respondents’ satisfaction with outsourcing relationships were based much less on their cost than on factors related to service quality: accuracy of scoping, service-level attainment, and overall quality of service.”

Can political parties help settle Asian conflicts? Political parties have solidarity with international political parties that embrace the same ideology Political party members are the same time the leaders of their nations, back-channelling negotiations may be more efficient and affable if done by political party leaders with common ideology Hopes for peace, cooperation and prosperity beckoned at the recently concluded International Conference of Asian Political Parties (ICAPP) 7th General Assembly, held in Baku, Azerbaijan, in late November. The Baku Declaration adopted by the parties “pledged to work for peace and

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development under the principle of interfaith harmony and political pluralism.” ICAPP “is a forum of political parties of Asia-Oceanian countries, which was launched in Manila in September, 2000. The objectives of the conference are to promote exchanges and cooperation between political parties from different countries in the area and with various ideologies; to enhance mutual understanding and trust among Asian countries; to promote Asia’s regional cooperation through the unique role and channel of political parties; and to create an environment for sustained peace and shared prosperity in the region.” Political parties are instrumental in charting a country’s direction. When in power, they chart a course based on their ideology. The more popular ideologies adopted by political parties are Social Democracy, Centrist Democracy, and Communism. Social Democracy “is a political ideology that considers itself to be a form of reformist democratic socialism. It advocates for a peaceful, evolutionary transition of society from capitalism to socialism. It promotes extending democratic decision-making beyond political democracy to include economic democracy to guarantee employees and other economic stakeholders sufficient rights of co-determination. Centrist Democracy or Centrism “describes a political outlook or specific position that involves acceptance or support of a balance of a degree of social equality and a degree of social hierarchy or social inequality, while opposing political changes which would result in a significant shift of society strongly towards the left or the right. Communism “is a revolutionary socialist movement to create a classless, moneyless, and stateless social

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order structured upon common ownership of the means of production, as well as a social, political and economic ideology that aims at the establishment of this social order.” Of the three, there are only a few countries left who adopt communism as the ideological foundation of their states, namely China, Cuba, North Korea, Laos, and Vietnam. Since communism is a single-party slate, no other political parties are allowed in communist states. The Social Democrats in Asia are: Partido Demokratiko Sosyalita ng Pilipinas and AKBAYAN Citizens Action Party (Philippines); Democratic Action Party (Malaysia); Partai Perserikatan Rakyat (Indonesia); Democratic Labor Party (South Korea); Revolutionary Front of Independent East Timor (East Timor); Kanakpak Pracheachun Kâmpuchéa (Cambodia); Awami League (Bangladesh); League of Social Democrats (Hong Kong), and; Social Democratic Party (Japan). The Centrist Democrats in Asia are: LAKAS-KAMPI-CMD (Philippines) and Funcinpec (Cambodia). The Social Democrats and Christian Democrats belong to international organizations. Social Democrats are members of Socialist International (SI) while Centrist Democrats are members of Centrist Democrat International (CDI). Since these parties which share common ideologies are in existence in every country, they could be a venue in resolving inter-national conflicts. For example, AKBAYAN is presently allied with the ruling administration in the Philippines. They could avail of social democratic parties in other countries as informal channels for negotiating peace , resolving disputes or enhancing trade. Although the brand of social democracy may be nuanced from one party to another, they more or less share a common ideology anthropology and epistemology -- the basics of an ideology. In the spirit of solidarity and comradeship under a common ideology, dealings can be more cordial and workable.

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How Companies and Investors Help the Poor and Make a Profit Private enterprise must do its share for inclusive growth to boost both the bottom of the pyramid and the bottom line By Ricardo Saludo

Airline, mobile, money and music magnate Richard Branson plugs social responsibility: ‘Find ways to equally prioritize people, planet and profits — it can be done’ Forbes

STRATEGY POINTS The ‘bottom of the pyramid’ global market encompasses 55% of humanity, with collective buying power of $742 billion a year BoP sectors offer high growth driven by pent-up demand, with fast-rising value products as economies develop To attract investors, social enterprises must have a topnotch team, a solid business model and good governance

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Helping the poor and making a profit

peaking to Forbes magazine, British billionaire Richard Branson, No. 254 on the journal’s global ranking of billionaires (net worth: $4.2 billion), urged his colleagues in the pursuit of profit to look beyond the bottom line. “Business should be a force for good,” says the founding CEO of the Virgin Group. “If every business could just make an effort to be a force for good, a lot of problems in the world could get sorted.” The Asian Development Bank would agree. “More and more businesses are seeing opportunities to both make a profit and create shared value within society,” says the ADB program for a regional forum titled Investing in Inclusive Business in Asia. “The rapid emergence of impact investing and social enterprise in many countries presents a timely opportunity to dialogue on how to build on these developments.”

The November 28-29 forum, held at the bank’s headquarters in Mandaluyong, Metro Manila, gathered some 120 participants to deliberate how businesses can help the poor and still make a tidy profit. It was the culmination of a series of ADB forums on inclusive business in Hanoi in April 2011, in Delhi and Mumbai this August, in Colombo also in August, and in Jakarta in October, plus a Philippinesfocused meeting on Nov. 26. A good number of participants in the regional conference came from the host country, including the chief executives of Maynilad Water and PLDTSmart Foundation, part of Filipino tycoon Manuel V. Pangilinan’s group; affordable housing developer Phinma Properties, hybrid rice seed supplier SL Agritech, computer institute STI Colleges, health care provider Medicard, and micro-lender CARD MRI. From elsewhere came other CEOs of big and small entities: Munich Reinsurance, one of the world’s largest insurance companies; Industree Crafts, India’s

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Social Entrepreneur of the Year in 2011; Indonesian seaweed company Green Gold Group; top Thai rice producer Urmatt; Singapore investment firms Duxton Asset Management, which invests in agriculture worldwide, and Emerald Capital Asia, adviser on food to the city-state; and global sanitation advocate World Toilet Organization.

A billion Asians left behind. If the ADB and

other international development agencies are pushing inclusive business, social enterprise and other modes of entrepreneurship for the poor, it is mainly because in many parts of the world, economic growth has left behind hundreds of millions of people still destitute, even as segments of their respective societies rise to prosperity or immense wealth. Summed up the bank in its Inclusive Growth site: “While poverty and living standards have improved in the region, more than 900 million people in Asia and the Pacific still live on less than $1.25 a day. In terms of economic benefits and access to social services, large numbers of people are being left behind or left out. In many developing countries, economic inequality has increased in the past decade. Without steps to address these disparities, the risks this trend poses — including social instability — will continue to grow.” The United Nations also sees the private sector as key to uplifting the poor, including the Millennium Development Goals to eradicate poverty and hunger, and advance universal education, gender equality, child and maternal health, fight HIV/AIDS, and promote environmental sustainability and global partnerships. “There is potential to accelerate progress towards [MDGs] by harnessing the power of business more creatively: by spreading the practice of ‘inclusive business’,” said the report on the Inclusive Business Dialogue at the U.N. MDG summit in New York in September 2010.

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The Philippines’ own experience shows the need for business support to spread the benefits of economic expansion. The current administration of President Benigno Aquino III has made inclusive growth a paramount tenet in the Philippine Development Plan 2011-2016, devoting the very first chapter to it. President Aquino has repeatedly stressed this goal, declaring in his October 25 Asia Society speech in Sydney: “When the gap between the haves and havenots widens, it is only natural for the people to clamor for change. Thus, ... for this growth to be sustainable — for it to be insulated from social disruptions — it must also be inclusive.” Yet two and a half years into the Aquino presidency, inclusive growth remains elusive. In his remarks at the ADB’s inclusive business forum for the Philippines, Socio-Economic Planning Secretary Arsenio Balisacan lamented that “poverty reduction has not been responsive to growth.” While the poor as a percentage of the population fell in the first half of the last decade, it swelled back to 2000 levels due to global inflation, tax hikes and spending cuts to trim the budget deficit, and the 2008-09 world recession. Yet even after “very commendable economic growth, low and stable inflation, fiscal prudence and therefore, sound macroeconomic fundamentals, and high consumer and business optimism” since 2010, Balisacan notes, “In July 2012, unemployment rate was 7 percent and it has been at about this level for two years now.” Moreover, there is “an uptick in underemployment rate, mostly in the agriculture sector.” That’s the highest level since 2006, even higher than the rate during the 2009 economic downturn. A further indication that the poor are faring worse despite this year’s 6.5% growth pace, second-highest in Asia after China’s: hunger incidence as measured by Social Weather Stations, is up too, averaging about

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20% under President Aquino, higher even than the 18.5% mean in 2008-09, when the economy was hobbled by global recession. Clearly, despite all its avowed plans, government alone cannot deliver inclusive growth. Hence, Balisacan pleads, “we in government are already coming up with concrete actions to fill the employment gap, albeit, only temporarily. At the same time, we implore the business sector and civil society to help come up with a more sustainable solution.”

The bottom is big and growing fast. So

how can business do it part in making growth and development more inclusive? The good news for capitalists is that they won’t have to give up profits in helping the poor, preserving the environment, and undertaking other initiatives for motherland and Mother Earth. In fact, targeting the base of the income pyramid pretty much ensures a global market running into the billions of people and the hundreds of billions of dollars.

In his conference paper, “Inclusive Business: The Private Commercial Sector as a Catalyst for Social Change,” Harvard Professor Michael Chu, who lectures in the university’s Social Enterprise Initiative, gave estimates the Base of the Pyramid (BoP) market size in population and buying power in market exchange rates and purchasing power parity (PPP). The co-founder and managing director of Mexican social enterprise venture capital firm Ignia Fund, counts nearly 4 billion people earning less than $3,000 a year, Chu’s definition of BoP. That is more than half of humanity. Nearly three-quarters of the market is in Asia including the Middle East (see Behemoth graphics). Four out of five Asians are in the BoP, with nearly three-quarters of a trillion dollars in buying power, going by market exchange rates. Converted to PPP to get actual economic value undistorted by differences

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in national wealth or purchasing power, the Asian BoP market leaps to $3.5 trillion — more than one-fifth of the U.S. economy in PPP terms. Chu adds that the worldwide BoP market is growing fast, forecast to hit $4 trillion in value by 2015, from $2.3 trillion in 2008 (see High Growth graphic). And as households raise their spending from the

Behemoth at the base

Base of the Pyramid Population and Income in PPP and Exchange Rates 1 B People 1.4 B People

first tier of less than a dollar a day to the second at $1-$2 and finally the third at $2-$8, their purchase of higher-value, more lucrative goods and services treble. Annual discretionary spending is forecast to go from nil in the first group to about $150 billion in the second, then nearly $360 billion in the third. That’s more than half a trillion dollars on top of food and other essentials, according to Chu’s data.

HIGH GROWTH FROM THE BOTTOM UP BOP markets increase rapidly in value and type of goods

Base of Pyramid:

1.2 B People 1.6 B People 1.2 B People

The World’s Socio-Economic Pyramid Base of the Pyramid = The Majority of Humanity

Region

Pop.

% of Pop.

Market Market (PPP) (US$) ($ Billions) ($ Billions)

Asia (incl. Middle East)

2,858

83%

$3,470

$742

Africa

486

95%

$429

$120

Latin America & Caribbean

360

70%

$509

$229

Eastern Europe

254

64%

$458

$135

Sources: World Economic Forum (top chart); International Finance Corp., Inter-American Development Bank, and World Resources Institute (table); cited in “Inclusive Business: The Private Commercial Sector as a Catalyst for Social Change,” by Prof. Michael Chu, Harvard University and IGNIA

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Charts from “Capturing the Next Billion Customers,” by Boston Consulting Group; cited in “Inclusive Business: The Private Commercial Sector as a Catalyst for Social Change,” by Prof. Michael Chu

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Framework for impact investing. Before going further, a quick primer on inclusive business and social enterprise terminology is helpful (see Key Words box). The U.N Global Compact initiative’s “A Framework for Action: Impact Investing & Social Enterprise,” cites further advantages for entrepreneurs and investors tapping into the BoP market and ventures.

Out just in June, the report, also supported by the Rockefeller Foundation, notes that due to long underserved basic needs, there is “significant pent-up demand,” and as local infrastructure develops, “well-run social enterprises will enjoy better chances of succeeding commercially, and will thus present greater investment opportunities.” Such ventures, the study adds, offer risk diversification, learning opportunities in new markets and sectors, and leads to new commercial opportunities for firms and investors. The U.N. framework sets out action points for governments, companies and investors (see Profit Motive graphic). For the state, incentives, regulation, and funding and technical assistance are needed. Enterprises can help with capital, partnerships, venture incubation, and the development, distribution and purchase of social enterprise and inclusive business goods and services. Investors can fund projects directly or via financial instruments. Regarding tax incentives, Britain’s Centre for the Study of Financial Innovation (CSFI) lists options in its report, “Investing in Social Enterprise: The role of tax incentives,” pages 14-41. The schemes are tailored to various modes of social enterprise funding, from direct equity and venture capital trust funds, to conventional charity donations and personal savings and investments. Incentive include tax deductions equivalent to 5%-30% of

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Key words for the business of driving development The European business school INSEAD has a “Glossary of Terms for Social Entrepreneurship and Impact Investing,” compiled by Filipe M. Santos and Christine Driscoll Goulay. Some key words: Base of the Pyramid (BoP): A broad set of business activities focused on the 4 billion people living on less that $2 per day (nearly $3 trillion a year at market exchange rates). Inclusive Business (IB): Sustainable business opportunities designed to be profitable and to benefit low-income communities. Social Business: Non-loss, non-dividend company designed to address a societal problem through a market-based business model. It should generate a modest profit to expand its reach, improve goods or services, or otherwise subsidize the social mission. Social Enterprise: An organization applying commercial strategies to maximize improvements in human and environmental well-being, rather than shareholder profits. Social enterprises can be structured as a for-profit or non-profit, and may take the form of a co-operative, mutual organization, a social business, or a trading charity. Hybrid Value Chain: Social-business models that leverage and combine assets and capabilities of corporations and citizen sector organizations (CSOs) to systemically address low-income populations’ needs. Impact Investment, Social Investment or Sustainable Investment: Placing capital in businesses and funds designed and intended to generate social and/or environmental good and a range of returns, from principal to above market, to the investor. Environmental, Social and Corporate Governance (ESG): Three main concerns in measuring the sustainability and ethical impact of an investment. They are among non-financial factors in the valuation of equity, real-estate, corporate shares and fixed-

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Financial First Investors seek to optimize financial returns from investments that ensure certain minimum social/environmental impact.

income investments. ESG is the catch-all term for Socially Responsible Investing criteria. Socially Responsible Investing (SRI): An approach that avoids investing in companies creating negative spillovers in society like tobacco firms and weapons manufacturers, while maximizing ESG gains. In early 2010, total assets with SRI strategies totaled $3.07 trillion, according to the Forum for Sustainable and Responsible Investment.

Impact First Investors accept a lower than market rate of return in investments of higher risk in order to help reach social/environmental goals.

Social Impact Bonds: Investment vehicles that provide up-front funding for prevention and early intervention services, to be paid back with interest by the public sector if the funded program or project is successful in achieving targeted outcomes. Thus, the state is relieved of both initial funding needs and the risk of program failure.

Venture Philanthropy works to build stronger social purpose organizations by providing both financial and non-financial support to increase their societal impact. “Yin-yang” Deals combine capital from impact first and financial first investors and sometimes philanthropy as well, to generate much more capital than one funding mode.

THE SOCIAL VENTURE LANDSCAPE

Features of Inclusive Business and Social Enterprise Types compiled by Asian Development Bank Philanthropie / NGO

CSR

Social Enterprise

Inclusive Business

Mainstream Business

not viable

commercially viable

fully commercially viable (profitable)

profitable or highly profitable 10 - 50

Business Criteria Financial viability Rate of return (percent net per year) Turnover in business (million $ per year) Net profit per year (million USD)

0 - 10

10 - 25

< 0.5

<0.25

< 1.0

0.5 - 30

> 10

< 0.05

0.05 - 0.1

0.1 - 10

1 - 500

Investment (million USD)

< 0.25

< 0.1

0.1 - 0.9

1 - 15

Growth potential (average percent per year over 5 years)

< 5%

< 2%

5% - 10%

10% - 25%

> 15%

yes

mixed (business + social)

community / local

local

sector / country / systemic

Bottom line

triple

single or double or triple

triple

double or triple

single

Benefitting households (total over 5 years, number of households)

500

250

less than 5,000

5,000 - 50,000

anything

of which poor (under the %2 poverty line, %)

80%

20%

10%

30%

10%

of which vulnerable (under the 4$ poverty line, %)

10%

50%

20%

50%

10%

of which non poor and not vulnerable

10%

30%

70%

20%

80&

Social Impact Criteria Main purpose of the business is social impact Social impact area

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investments made, deferral of taxable profits, and tax exemptions for dividends, interest earnings and capital gains. For investors, meanwhile, Jesuit-run Santa Clara University in Silicon Valley tackles the issue of how social enterprises can raise funds from various donors and investors all over the world, where such funding usually comes from. “Coordinating Impact Capital: A New Approach to Investing in Small and Growing Businesses” was published by the university’s Center for Science, Technology and Society and the Aspen Network of Development Entrepreneurs. The July 2011 study urges “horizontal financial syndication” mixing various modes of funding, from donations and loans to equity and trust funds, to maximize capital for projects and ventures. It also recommends new financial instruments that generate predictable returns, which will attract huge but conservative capital funds to invest in social enterprises.The report says that more beneficiary organizations should avail themselves of advice and training in capital generation. Among modes of investing, the study cites phased funding: grants for capacity building, soft loan based on concept, and equity, quasi-equity and loans to scale up the business. There is also co-investing by several capital providers, and internal syndication by funding sources, providing different modes of investment at different stages of venture development. And to attract investors, a venture should address five key aspects: its management team, value proposition, business model, governance system, and validation of activities and outcomes (see What Investors Look For list).

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Companies that mix progress and profit. More

than governments and investors, however, enterprises are the main players that make inclusive business and social ventures happen. For its inclusive business forum in Vietnam, the ADB provided a list of exemplary inclusive business ventures that uplift communities and bottom lines as well, including several in Asia. Apollo Hospitals Enterprise Ltd. is one of Asia’s largest hospital groups with 5,908 beds owned and

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Helping the poor and making a profit

Source: “A Framework for Action: Social Enterprise & Impact Investing,” U.N. Global Impact

another 2,308 managed in 36 owned hospitals and 13 managed as of June. It provides affordable health care to India’s smaller cities and surrounding rural communities. Cross-subsidies from upmarket hospitals keep fees down at its Apollo Reach facilities for BoP clients. It offers staff incentives, including fast-track careers for those serving the rural poor. At any one time, it has 120,000 patients earning less than $2 a day. Revenues in the year ended in March: $579 million, netting $40 million.

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Manila Water Company, part of the diversified Ayala Group, is one of two Metro Manila water concessionaires. Its investments since taking over its half of the capital region’s state-run system, have brought reliable service, with nearly all its more than 6 million customers having 24-hour flow, up from a quarter before the 1997 privatization. Poor clients now pay a fraction of what water vendors used to charge them. Revenues in 2011: $279 million, up 63% since 2007, netting nearly $100 million, up 76% since 2007.

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WHAT INVESTORS LOOK FOR Top Criteria in Assessing Social Enterprises Compiled in “Coordinating Impact Capital”

Team

Probably the most important criterion. An experienced entrepreneur and management team must be skillful, smart, willing to adapt their business to changing conditions, and willing to take guidance

Value Proposition

Must be unique, defensible, able to address a real problem, and adoptable by members of the target market without much difficulty

Business Model

Founded on credible financial assumptions and rational forecasts. Is enough money being raised to reach a cash-flow-breakeven point or a clear jump in valuation? Often, to scale up a project, the sums needed may make it no longer viable.

Huatai Paper Company, China’s largest, has been using wood pulp from trees grown by farmers since 2000, reducing dependence on volatile paper import prices and minimizing environmental impact. Huatai and local governments help farmers with technology, training and irrigation. More than 6,000 households have participated with over 40,000 hectares of trees generating significant additional income. Rajawali Express Taxi, Indonesia’s secondlargest operator and part of the Rajawali Group, started a decade ago partnering with individual drivers, building on past experience with drivers’ cooperatives. The company guaranteed car loans of its partners, who owned the vehicle after five years, while requiring $500 down-payment. The scheme made drivers more careful about their cabs, along with company-funded safety courses, and raised and stabilized their income. Dialog Telekom PLC and Smart Communications are the leading mobile communication companies in Sri Lanka and the Philippines, respectively.

Governance

Legal structure able to accommodate various funding modes; management checks and balances, including external advisers; and no dominant, closed group. Validation: Impartial validation and reporting of social enterprise activities are essential the crucial ingredient in expanding impact investing — investor confidence.

Feature on India’s Social Entrepreneur contest, won by

Industree Foundation CNBC

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Dialog (April-Sept. 2012 revenues: $323 million, up 23.6% year on year) generates an estimated $20 million for retailers serving its 7.5 million customers. Smart (2011 revenues: $3.6 billion, netting $736 million),part of the PLDT-led telecoms, power, mining and infrastructure group, provides mobile financial transfers and payments, which have reduced remittance costs for overseas workers to 1%-8% of money sent, from 10%-35% through banks. Countless other companies and non-profit organizations offer instructive cases for social entrepreneurs as well as enterprises keen to enhance their social impact. There is also much technical and even financial support available from international development bodies like the ADB, World Bank affiliate International Finance Corp., which has an inclusive business advisory unit, and the U.N. Development Programme’s Growing Inclusive Markets site, which has a database of 1,000 business models. Investment banks and funds too provide expertise and capital, from established giants like J.P. Morgan to dynamic venture funds like Leapfrog Investments, which includes in its portfolio South Africa’s All Life, the only insurer that provides coverage for HIV/AIDS sufferers. And there are countless non-government organizations, official aid agencies, and academic institutions across the globe ready to advice, fund, partner with or otherwise assist inclusive businesses and social enterprises. The social enterprise directory of London’s Guardian newspaper alone offers hundreds of potential advisers, partners and financiers. And dozens of how-to manuals like the Inclusive Business Guide of Germany’s Endeva proliferate online. For businesses on a roll, it’s time to give back.

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News & Strategy Alerts Business

When growth does not trickle down to the poor The Philippine economy grew beyond expectations in the third quarter of 2012, by 7.1%, driven by the services sector as well as increased consumer and government spending and investments in construction While impressive, the expansion isn’t benefiting the poor as much as it should The government needs to take steps so that the economic growth translates into jobs Surprising both government and private economists, the economy grew 7.1% in the third quarter from a year ago, more than double the 3.2% rate in the same period in 2011. It was the highest quarterly growth in gross domestic product (GDP) since the third quarter of 2010, the National Statistical Coordination Board (NSCB) reported in late November. The Services sector remained the key driver of the growth, with strong performances in transport, storage and communication, financial intermediation, and real estate, renting and business activities. Higher consumer and government spending and increased investments in construction also contributed to the growth. Industry and Services generated the 7.1% growth, surging 8.1% and 7.0%, respectively, based on NSCB data on the Third Quarter 2012 Gross National Income & Gross Domestic Product (GDP) by Industry. But the bulk of Industry growth is in Construction (up 24.3%), which includes catch-up public works spending after last year’s underspending, and property development, which requires sustained demand from homebuyers and office tenants. Manufacturing grew modestly at 5.7%, while mining output fell 2.2%. Agriculture managed 4.1% growth, driven by sugar (up 56.9%), palay (13.5%) and corn (11.5%). But coconut, on which many poor families depend, grew only 4.4%, while

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poultry and livestock output rose 1.6% and 2.8%, respectively. Another poor sector, fishing, suffered a 0.6% decline. The government should assess the impact of such trends on poor communities, especially coconut farmers and fisherfolks, and provide assistance and additional livelihood. All major Services sub-sectors did well, led by transportation, storage and communication (up 7%), financial intermediation (8.3%), and real estate, renting and business activity (7.8%) — sub-sectors that tend to benefit mainly the rich, who have financial or real property assets, or well-educated employees. Overall, the 6.5% GDP growth for the first nine months of the year exceeded the revised target of at least 6%. Overall, the GDP growth of 6.5% over the first nine months of the year, exceeded the revised GDP growth target of at least 6% this year. At a press briefing, NSCB’s new Secretary-General Jose Ramon Albert, who took office after longtime chief statistician Romulo Virola retired in July, noted that the Philippines’ expansion was the fastest in Southeast Asia and second-fastest in Asia after China’s 7.7% — the same regional placing as in the first quarter, as reported by Rappler on Nov. 28.

year. But even with the slower increase in working-age Filipinos, the unemployed rose by 20,000 to 2.842 million. Underemployment hit 22.7%, up from 19.1% a year ago and the highest since 2006, exceeding even levels reached during the 2009 GDP downturn. “This corresponds to 8.546 million underemployed persons — an increase of 1.451 million from last year,” the agency reported. Using different parameters and survey methods, Social Weather Stations in its Third Quarter 2012 Survey estimated that there are still 11.7 million people without jobs, or 29.4% of the labor force, continuing the deteriorating trend since September 2010, the last time the rate fell below 20%. SWS-measured joblessness has not been this high since the depths of the global recession in 2008-09. Clearly, the government has to do more in its avowed efforts for more inclusive growth.

Banana growers in Mindanao lose $318M to Typhoon Pablo

According to the Rappler report, Socioeconomic Planning Secretary Arsenio Balisacan estimates that the full-year target to be at the range of 6-7% and said that despite the significant economic growth, the country “still has a long way to go before it could see inclusive growth or growth that trickles down to the masses.” Balisacan said the growth will mean more jobs for Filipinos, but what needs to be addressed is the quality of these jobs. The Department of Labor and Employment July 2012 Labor Force Survey indicated that the workforce grew by 1.2% to 40.4 million, well below the 2.5% rate in July last

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Banana growers and farmers in Mindanao need financial assistance to rehabilitate their farms Rehabilitation would cost ₱3.5 billion to ₱5 billion, according to industry groups Crop insurance from the government and financial assistance from the private sector could help rehabilitation measures The Philippines, the world’s third largest exporter of bananas, lost a quarter of its crop in Typhoon “Pablo,” according to the Philippine Banana Growers and

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Exporters Association (PBGEA), as reported on Dec. 7 in the Philippine Daily Inquirer. PBGEA Executive Director Stephen Antig reportedly said Pablo destroyed 10,000 hectares of the country’s 42,000 hectares of banana farms. According to him, the hurricane-force winds and flash floods flattened wide swaths of the hillsides of Davao Oriental and Compostela Valley provinces, the center of the industry. Typhoon Pablo will cost the industry over ₱13 billion ($318 million), with an estimated ₱8 billion in ruined harvests and damaged facilities, and another ₱5 billion to rehabilitate farms over the next few months, he said. Decrease in production means nothing but decrease of Philippine share in the banana exports global market. The Philippine banana export industry is the thirdlargest in the world and the only Asian country among the top five according to the PBGEA and Edward Evans and Fredy Ballen of the University of Florida’s Tropical Research and Education Center. In Evans and Ballen’s report on the banana market, the five leading banana-exporting countries in 2009 were Ecuador, Colombia, the Philippines, Costa Rica, and Guatemala. Together, they accounted for approximately 84% of the global banana exports in 2009. Ecuador was by far the main supplier of bananas in the world market, with exports of 5.7 million metric tons (mmt) in 2009, equivalent to 38% of the total volume of bananas traded that year. Next was Colombia, with a market share of 13.2%, followed by the Philippines (11.7%), Costa Rica (11.5%), and Guatemala (9.9%). Global exports of bananas in 2009 were estimated at 14.8 mmt, the equivalent of 15.3% of the world production that year, and was valued at approximately $8.08 billion. From 2004 to 2010, coconut oil and fresh bananas were the country’s top agricultural exports, with a combined

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average share of 35.82%, according to the Philippine Senate’s brief report on “Philippine Agricultural Exports,” released in February. According to the chapter on Competitive and Sustainable Agriculture and Fisheries Sector, in the Philippine Development Plan 2011-2016, the resiliency of the country’s agriculture sector is threatened by climate change and extreme weather events.

Technical and financial assistance needed.

Damage to rural infrastructure and losses to crops, livestock and fishing grounds, water allocation, and competing priorities in water use are a few emerging problems that should be addressed. Sound scientific advice is needed regarding appropriate crop varieties, cropping patterns, and climate-vulnerable structures, including irrigation systems. While it is imperative to heed this valuable advice, the immediate priority of the government, banks, and other financing institutions should be to offer financial assistance to the banana growers in Mindanao to deal with the losses they have incurred. The banana industry needs ₱3.5 billion to support its rehabilitation, according to a Dec. 7 Interaksyon report citing Mindanao Banana Farmers and Exporters Association Chairman Romy Garcia. The government should provide agricultural insurance so banana industry stakeholders can cope with losses and rehabilitate their farms in order to resume meeting the demands of the global market. A Philippine Institute for Development Studies April 2009 paper on crop insurance defined it as “a risk management mechanism designed to even out agricultural risks and blunt the consequences of natural disasters to make losses, especially to the marginalized farmers, more bearable.”

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There’s a Homegrown App for That! Filipino developers are creating mobile apps that address local needs, from disaster preparedness and traffic decongestion to promoting carpooling and exploring new places in Metro Manila By Tanya L. Mariano

STRATEGY POINTS By 2016, over 309 billion mobile apps will be downloaded around the world – more than 10 times the number of apps downloaded in 2011 Local developers are harnessing the power of mobile connectivity to increase accessibility of localized information needed to address local issues The Philippines is home to the fastest growing smartphone market in Southeast Asia; mobile Internet subscriptions are rising

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a report released September 2012, research firm Gartner predicted that the mobile app market would almost double in 2012, with smartphone users worldwide downloading 45 billion apps, reports Mashable. By 2013, Gartner expects annual downloads to reach 81 billion, and by 2016, 309 billion – a more than tenfold increase from 2011.

And while Filipino mobile app developers are no doubt more than capable to compete in the rapidly growing global market – developers that have gained recent international recognition include a team from local tech firm Chikka.com that won Best Mobile Open Graph Award at the March 2012 Facebook Mobile Hackathon held in Singapore, and two developers who were among the winners of the 2012 Google Apps Developer Challenge in November – some are using their expertise to develop apps that address specific needs of Filipinos. With the rise in smartphone ownership among Filipinos and the improved accessibility of mobile data plans, the local mobile app market should expect exciting times ahead.

PH is fastest growing smartphone market in SEA; mobile Internet usage growing. Volume

sales of smartphones in the Philippines grew 326% over a twelve-month period, the fastest in the region. According to a survey conducted between August 2011 and July 2012 by market research firm GfK

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Asia, the country also recorded the highest jump in smartphone market share, from 9% to 24% within a year. Mobile Internet usage is also on the rise, with Smart Communications reporting a 71% growth in mobile Internet revenues in the first quarter of 2012, the Manila Bulletin reported in May. In a July 2011 news release for its “Southeast Asia Digital Consumer Report” (released in September that year, available for free upon registration), Nielsen predicted a rise in mobile Internet usage in the Philippines in 2012 driven by the increase in ownership of Internet-capable mobile phones and accessibility of mobile Internet plans. According to the news release, “Already close to one-quarter of Filipino Internet users (24%) access the Internet on a daily basis via a mobile phone and 56% intend to access the Internet via a mobile phone in the next 12 months.” With more people buying smartphones to replace their old feature phones, and more smartphone users using their phones to get online, the country’s mobile environment is providing the impetus for the development of local apps.

Native apps vs. mobile web apps. With

one exception (Tripid), all apps discussed in this article are native apps, that is, applications that are installed directly onto the mobile device and have in-app features. According to Six Revisions, an online information resource for web developers and designers, these are the apps typically downloaded from online stores like the Apple App Store or Google Play. Mobile web apps, on the other hand, are Internetpowered apps whose services are accessed via the mobile device’s web browser and which do not need to be installed onto the device.

Project NOAH mobile apps for disaster preparedness. Project NOAH (Nationwide

Operational Assessment of Hazards) is the response of the Department of Science and Technology (DOST) to President Benigno Aquino III’s call for “a responsive program for disaster prevention and mitigation, specifically, for the Philippines’ warning agencies to be able to provide a 6 hour lead-time warning to vulnerable communities against impending floods and to use advanced technology to enhance current geohazard vulnerability maps.”

Mobile APP STORE DOWNLOADS, WORLDWIDE, 2010-2016 (Millions of Downloads) 2011

2012

2013

2014

2015

2016

Free Downloads

22,044

40,599

73,280

119,842

188,946

287,933

Paid-for Download

2,893

5,019

8,142

11,853

16,430

21,672

Total Downloads

24,936

45,617

81,422

131,695

205,376

309,606

Free Downloads %

88.4%

89.0%

90.0%

91.0%

92.0%

93.0% Source: Gartner

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The Project NOAH website provides real-time weather information and warnings to help citizens prepare for weather disturbances, and allows users to report flooding in their areas. The undertaking is a partnership between the government and several private organization including Smart Communications, SUN Cellular, Petron, and Google Crisis Response. On October 17, 2012, DOST and Smart Communications launched the official NOAH mobile app, a free app initially available only on the Android platform, according to a press release on the Smart website.

disaster management.” Says DOST Secretary Mario Montejo, “Participation of all Filipinos in the effort is very important because it increases their stake in the solution to the problem. With better awareness, you have more reason to prepare against the impacts of hazards.”

Traffic navigation via the MMDA app. Another homegrown app that aims to make everyday life more convenient for Filipinos is the Metro Manila Development Authority’s (MMDA) traffic navigator mobile application.

The prototype was developed by Rolly Rulete, a DOST scholar and Computer Science graduate of the University of Southeastern Philippines, and teammates Pablito Veroy and Jay Albano during the Hackathon organized by the Smart Developer Network in Davao City, in August. Through the mobile app, users can access information on weather outlook, news from PAGASA and the PAGASA Flood Forecasting and Warning Section, and other useful links and content. The app also features the original map view available on the Project NOAH website.

Screenshots of the Project NOAH mobile app Google Play

Another application developed for Project NOAH is Flood Patrol from the Ateneo Java Wireless Competency Center. The Android-based app extends the flood-monitoring and mapping service of Project NOAH and allows citizens to report and retrieve real-time flood information, according to a Nov. 8 Philippine Star report. According to the Smart press release, citizen reports made through the web and mobile applications are “used as crowdsourcing data for flood analysis and

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Screenshots of the MMDA iOSapp Apple iTunes

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The app is available for free for Blackberry, Android, and iOS mobile devices. In May 2012, a version for Windows smartphones was released, according to a report from GMA News. The iOS app was developed in-house by the Traffic Discipline Office of the MMDA, the Blackberry app developed in partnership with Research in Motion-sanctioned developer community Philippine Blackberry Developer Group, while the Android app was created by MMDA and the University of the Philippines – Information Technology Development Center.

The app informs users on the level of traffic congestion around the Metro and provides real-time details about traffic accidents and other incidents that may cause heavy traffic. It also allows for user reporting and features other information relevant to motorists, such as traffic violations and corresponding penalties.

Discover great places with looloo. Can’t decide

where to hold your Christmas party? Local app looloo can help you explore new places across Metro Manila including restaurants, spas, hotels, and other interesting spots.

Screenshots of location-based social lifestyle app looloo

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‘Philippines continue to report exponential threefold growth of 326 percent in smartphone volume sales, rendering it the fastest growing market for smartphones in Southeast region’ -GfK Asia

Released on the Apple App Store last November 20, according to their official blog, looloo is a locationbased service that lets users search for places that are nearby or within a specified area, read and share reviews with friends and other looloo users, find out which establishments are getting a lot of reviews, and recommend great places to friends. What distinguishes looloo from similar apps offering directories of establishments around the country is its recommendation feature. In a way, it’s a social guidebook for people who like to go out and discover new places and share their experiences with friends. Looloo can be downloaded for free and works on iOSrun devices.

Tripid.ph promotes carpooling. Although not a

native mobile app like the ones previously mentioned, Tripid is a clever web application that promotes “route-sharing” as a new way of traveling (Tripid is included on this list because it has a mobile version that’s accessible to mobile device users via their Internet browsers).

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Tripid’s “open carpooling service” aims to bring together “drivers and passengers going the same way – for a safer, more convenient, and more affordable every day trip.” It requires users to set up an account, after which drivers can post their trip details online for interested passengers to see. For solo motorists looking to save on gas or earn extra income, or commuters who want a cheap, comfortable alternative to public transportation, Tripid can be a pretty useful app. To ensure the safety of both drivers and passengers, Tripid has incorporated security features into its service. According to a Dec. 3 report in Rappler, users are required to log the beginning and end times of a trip so that its progress can be monitored. A ratings and feedback system for both drivers and passengers also “helps create a more substantial description of the persons behind the profiles.” A distress feature called the “Community Call” also lets users send out emails containing their location information to a list of emergency contacts at the press of a button.

More local apps to come? It’s good to see the power of mobile Internet being harnessed by Filipinos to improve the lives of fellow Filipinos by enhancing disaster preparedness, helping decongest the streets of Metro Manila, reducing transportation costs and perhaps carbon emissions as well through carpooling, and guiding people around the city while helping lesser-known establishments gain a following through peer recommendations. With the support of the government and network service providers, mobile device penetration and mobile Internet subscriptions in the country should continue to rise and stimulate the growth of the local mobile app market.

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There’s a homegrown app for that!

What are the most popular kinds of apps? According to this infographic created by James West of GDS Infographics for the iStrategy conference, as posted on the Co.DESIGN website in 2011, shows that:

News & Strategy Alerts Technology Does technology enhance or hinder thinking? An infographic in Economy Watch illustrates how technology impacts student-teacher engagement and overall learning

• Games are the most popular mobile app category

Various studies show how technology can both enhance and hinder cognitive skills, so people must be both critical and creative about how they use technology

• The most popular free app of all time is Facebook

Encouraging critical thinking, however, requires interaction and discourse

• The most popular paid app is Doodle Jump • More people are willing to pay for games than for news apps Click on the infographic for more details.

According to the infographic, students use mobile devices to access course websites or syllabi, to use course or learning management systems, and to check grades. An increase can also be noted in the number of students saying they took a class completely online, from 15% in 2008 to 31% in 2012. Of those surveyed, 74% said they have taken at least one course that includes online components and 54% revealed they are more actively involved in courses that use technology, while 16% skip classes when course lectures are

Source: Co.DESIGN website

An infographic published on Nov. 28 in Economy Watch showed how technology can enhance the learning process. Technology is being used as a tool for student-teacher communication and engagement, and it impacts academic experience and achievement. The infographic, which is based on information provided by Bachelors Degree Online, illustrates the relationship of undergraduate students and technology. The infographic is built on the premise “that we live in a digital age and education today has to prepare students for life in a world where technology has become so ingrained in our daily lives.”

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available online. Fifty-three percent, however, wished instructors communicated more using faceto-face interaction. A November article in Time, meanwhile, looks at the various studies showing how technology affects learning and intelligence. The auto-complete function of smartphones, for instance, makes adolescents faster, but less accurate in responding to higher-level cognitive tasks, in a study published in 2009 in the journal Bioelectromagnetics. The convenience of search engines, on the other hand, is changing the way people use their memories. In a study published in Science in 2011, researchers found that people are faced with difficult questions “they have lower rates of recall of the information itself and enhanced recall instead for where to access it.” Adam Gazzaley, professor of neurology and director of the Neuroscience Imaging Center at the University of California, San Francisco, says the evolution of mobile devices is actually putting a burden on our brains. Cognitive control, he says, is one’s ability to focus on accomplishing a task amid competing demands. There is extensive evidence, he says, showing that our brains are sensitive to external interference and by distractions and multitasking. “These frequent and unplanned interruptions, coupled with growing expectations for immediate responses, challenge our cognitive control system at its very core,” Gazzaley notes in his September CNN opinion piece. Nevertheless, mobile devices can be used to harness the mind. Gazzaley says there are ongoing efforts by cognitive science laboratories to develop assessment and brain training software to be used on mobile phones and tablets.

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To be sure, technology is still an important tool in learning, especially with the variety of devices and software being developed. Nevertheless, educators and parents must not discount critical thinking in a person’s development. Imparting this kind of skill requires personal interaction and discourse in an environment where intellectual curiosity is encouraged.

Text me not: SMS use drops in PH, U.S. Short messaging service (SMS) use in the top two texting nations—the Philippines and the U.S.—has declined because of the popularity of Internet messaging services, posting threat to SMS revenues Analyst says telecom operators should tap into the creativity of messaging application developers, form industrywide collaborations, and build strong relationships with subscribers to secure their position in the SMS market Text messaging in the Philippines, dubbed the texting capital of the world, is on the decline. Figures from the National Telecommunications Commission (NTC) show that the average daily number of short messaging service (SMS) texts sent has fallen to 1.5 billion, from 2 billion in 2000, as reported by GMA-7 News on Nov. 15. According to NTC, the popularity of smartphones, web surfing promos by telecommunication companies and various web communication applications are contributing to the decline of texting. For the first time in the U.S., SMS use is also on the decline, according to the “U.S. Wireless Market Update Q3 2012” by an independent mobile

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analyst Chetan Sharma. In the third quarter of the year, cellphone owners send an average of 678 texts per month, a slight decrease from 696 in the previous quarter. The report attributes the decline primarily to Internet-based messaging services.

consultancy firm Ovum. By the end of the year, Ovum predicts global telecom operators will lose US$23 billion in mobile messaging revenues, which will reach $54 billion by the end of 2016.

Some of the popular internet-based messaging services are Facebook Messenger, Apple’s iMessage, Skype, and Google Voice. An earlier report by Sharma, “State of the Global mobile Industry: Annual Assessment 2012,” looked at the SMS growth in the top two texting nations and found that U.S. SMS usage surpassed the Philippines’ SMS usage in 2011. Last year, U.S. cellphone users sent an average of about 680 messages a month, while the average Philippine user sent roughly 400 text messages, after the Philippines had been sending more text messages than the U.S. from 2008 to 2010.

SMS Growth – U.S. passes the Philippines

Graph from “State of the Global mobile Industry: Annual Assessment 2012” by Chetan Sharma (54th slide)

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According to the press release, the decline is likely to continue as the popularity of messaging applications continues to grow and operators should “rework their legacy services if they want to secure their future position in the messaging market.” Neha Dharia, consumer analyst at Ovum, has a suggestion for telecom operators: “Tapping into the creativity of app developers, forming industrywide collaborations, and leveraging their usage data and strong relationships with subscribers are the key ways for operators to ensure that they hold their ground in the messaging market.”

Internet-based social messaging services pose a threat to SMS revenues, according to an Oct. 2012 press release from London-based independent analyst and

In a Feb. 2012 press release, Ovum said internetbased social messaging services have cost telecom operators US$8.7 billion in lost SMS revenues in 2010, and US$13.9 billion last year, representing nearly 6% and 9% of total messaging revenue in 2010 and 2011, respectively.

In the Philippines, mobile giants Globe Telecom and Smart Communications have made text messages affordable by offering promos such as unlimited texting services and a combination of unlimited calls and SMS services. The country has over 100 million mobile subscribers, with Smart and sister company Sun Cellular accounting for almost 70 million users and Globe with over 32 million subscribers, as reported in The Philippine Star Nov. 20. The local telecom operators should make their SMS services more affordable and subscriber-friendly or risk losing revenues as subscribers migrate to free messaging services.

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Hot Travel Destinations in Asia for 2013

From the mystical to the modern, Asia’s tourist hotspots – both old and new – will tickle the fancy of seasoned adventurers and accidental tourists alike By Marishka Noelle M. Cabrera

true amalgam of the past and the present, the traditional and the modern, and the spiritual and the material, Asia’s charm still captures the imagination of globetrotters. Though some Asian locations are already famed getaways – Phuket in Thailand, Bali in Indonesia, and Hong Kong and Macau in China, to name a few – other destinations are emerging either because of reemergence from recent turmoil, a conscious push of tourism, or simply a re-discovery of a country’s old treasures. The Censei Report presents some Asian vacation possibilities you might wish to add to your travel plans for 2013.

Modern living China. “China is forever linked

STRATEGY POINTS Asia’s allure as a tourist destination extends beyond the usual sight-seeing by allowing visitors to tap into their inner self with breathtaking scenery, warm people, rich cultures, and extraordinary adventures

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to its ancient civilization, friendly people, and many of the world’s most revered treasures, such as The Great Wall, Terra Cotta Warriors and Horses, and the Yangtze River,” according to the China National Tourist Office site. These days, however, China’s major cities like Beijing and Shanghai are also becoming known for their towering skyscrapers, posh accommodations, luxury shopping, and fine cuisine.

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Hot travel destinations in Asia for 2013

Fodor’s recommends these places to explore in Shanghai: its Bund, the sightseeing landmark on the bank of Huangpu River, the upscale area Nanjing Xi Lu, and the tree-lined streets and crumbling villas of the Former French Concession, among others. Beijing, on the other hand, is described by Fodor’s as “a vibrant jungle of neighborhoods and districts.” Travelers can visit the bars and clubs in Chaoyang District, historical sites in Dongcheng District, and the southern districts of Chongwen and Xuanwu for religious and cultural reminders of Beijing’s past.

Malaysia. Malaysia’s strong long-term tourism potential can be traced to the fast-rising demand from emerging markets, such as China, Russia, and Saudi Arabia, according to the Malaysia Tourism report for the fourth quarter of 2012 by Market Research. Accounting for 73.8% of arrivals, ASEAN (Association of Southeast Asian Nations) remains to be the most significant contributor of tourists to Malaysia. Growth, the report says, was notable in arrivals from the Philippines, China, Japan, and Indonesia. Greater flight frequencies to the capital, Kuala Lumpur, accounted for the rise in arrivals from China and Japan. In February, Malaysia launched its new tourism brand, aimed to bring in 36 million visitors by 2020, in a report from ABS-CBN News. Departing from its success in the tourism campaign “Malaysia Truly Asia,” the new brand named “Luxury Malaysia,” the country is packaged as a duty-free shopping destination for luxury goods. Another attraction is the country’s first international theme park, Legoland Malaysia, which opened in September. Major events and festivals to catch in 2013 are listed in myBatik.com, among

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them the Royal Langkawi International Regatta in January, the Petronas F1 Malaysia Grand Prix in April, Malaysia Day celebration in September, and many others.

Singapore. Over the past

two years, Singapore has demonstrated that “the profile and tourism revenues generated by casino gaming can bring major benefits to cities and entire regions,” based on a Dec. 2011 PricewaterhouseCoopers report on the global gaming outlook. With its emergence as a casino gaming center, Singapore’s revenues grew from zero in 2009 to more than $11 billion in 2011, and are projected to rise to more than $7 billion in 2015, according to the report. “The foray into gambling is part of an aggressive push to grow Singapore’s tourism sector,” says a July 2011 MarketWatch report. The article adds that with the opening of such establishments like Resorts World Sentosa and Marina Bay Sands, the “conservative city-state” is “likely to steamroll Las Vegas” to become the second-largest gaming hub after Macau. For more family-friendly attractions, there are nature parks, museums and galleries, temples, and shopping centers to discover in this ultramodern city. Iconic landmarks such as the Singapore Flyer, the Old Parliament House, and the Raffles Hotel, are not to be forgotten. Moreover, the recently opened Universal Studios in Singapore is the first Universal Studios theme park in Southeast Asia. Car-racing fanatics will delight in the F1 Singapore Grand Prix to be held in September. Last but not least, the colorful cuisines in Singapore are a must-try, whether at hawker stalls, food courts, or finedining restaurants,.

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Off the beaten track Myanmar. Meandering through

the streets of erstwhile capital Yangon, one could get the feeling that time has stood still in this part of the world, where treelined streets and old British colonial buildings dominate the landscape. Until recently, the country stood isolated from the international community because of its refusal to address what its Asian neighbors and the West saw as human-rights abuses. Before, any form of dissent against the ruling military junta was met with punishment and further suppression. Now, the once-pariah state is opening its doors to the world, as the new civilian government attempts to usher in genuine reform. Like commerce, tourism is expected to boom, with curious tourists wanting to see the gem that has long been in hiding. Known for its rich natural resources, Myanmar is home to precious stones such as jade and ruby, which can be found in quaint jewelry shops around the city and in the main market. The country’s deep Buddhist tradition is reflected in ornate religious sites such as the Shwedagon Pagoda and the Golden Palace Monastery. According to Tripadvisor, one can also explore Myanmar’s heritage through a trip to Bagan in the Mandalay region and Inle Lake in Taunggyi. Myanmar’s Ministry of Hotels and Tourism lists the cultural and religious festivals throughout the year.

Bangladesh. Nestled between

India and Myanmar, this lowlying country is not a common go-to vacation spot. Lonely Planet says: “In defiance of its stuttering development and the weight of historical tragedy that it bears, it is a nation charged with

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perseverance and promise, and one from which we could all learn a thing or two.” In 2007, the nation experienced the onslaught of Cyclone Sidr, killing thousands, and the country’s political and economic situation leaves much to be desired, though its garment industry is holding up. Still, Bangladesh trudges on, ready to become an active participant in world affairs. There is always excitement in unexplored territory. The travel site recommends visiting the tiger-filled Sundarbans National Park, the relics of Buddhist kingdoms in Rangamati, and the tea plantations in Srimangal. Tripadvisor’s popular destinations in Bangladesh include the sprawling capital Dhaka, the fishing port Cox’s Bazar, and main seaport Chittagong. The Bangladesh Tourism Board also provides potential visitors with information about the destinations and accommodations.

Sri Lanka. In a November

article in Travel Daily News, top travel bloggers select 13 travel destinations for 2013, and among them is “come-back kid” Sri Lanka. Though not as cheap as it used to be, bloggers still expect the country’s return to the tourism map. Sri Lanka, a nation with over 2,000 years of culture, has been “hiding in plain sight,” says Lonely Planet. But after recovering from the Dec. 26, 2004 Indian Ocean tsunami and decades of civil war, investment is now fueling the tourism industry, which lands the country in Lonely Planet’s “Best in Travel 2013- Top 10 Countries.” Even with beaches, ancient heritage sites, wildlife, rain forests, and other natural wonders to boast of, Sri Lanka has lagged in tourism because of the long civil war, which ended in 2009. According to Dr. Nalaka Godahewa, chairman of Sri Lanka Tourism, who spoke at an Oct. 2011 forum jointly organized

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Hot travel destinations in Asia for 2013

by the World Travel Organization and the Pacific Asia Travel Association, tourist arrivals grew by 6% in 2010, emerging from a 5% slump in 2009. From there, the country’s tourism revival looks promising, with tourist arrivals rising 15.5% in October from the same period last year, based on data from Sri Lanka’s tourism site. In a blog entry on 2backpackers.com, Sri Lankan Lasith Lansakara gives readers reasons for them to visit his country, e.g., a glimpse of elephants in national parks like Wasgamuwa, touring the remains of architectural wonders from ancient Sinhalese kingdoms, and exploring old Buddhist temples.

Nature-tripping Philippines. It’s more fun in

the Philippines. The country’s new tourism campaign slogan perhaps best encapsulates what the archipelago and its people have to offer. With over 7,107 islands, tourists can pick their own adventure: Scaling a mountain in Benguet, surfing in Siargao, a boat ride along the Puerto Princesa Underground River, a World Heritage site, swimming with whale sharks in Sorsogon, strolling along the cobblestone streets of Vigan in Ilocos Sur, free-falling from a cliff in Bohol, to name but a few. As Lonely Planet puts it: “[T]he Philippines can capably raise any adrenaline junkie’s pulse.” Owing to strong influences from the West, the Philippines has its own unique identity that sets it apart from most of its Southeast Asian neighbors. Major cities across the country have a cosmopolitan character, with shopping centers, restaurants, spas, and bars punctuating busy streets. Life in the provinces, though, remains unhurried, only adding to the charm of a culture that thrives in paradoxes.

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Maldives. The islands of

Maldives boasts of deep blue seas, white sandy beaches, and vibrant marine life. The population of approximately 350,000 enjoys 1,190 islands, 99 of which are resort islands. The country “lies in two rows of atolls in the Indian Ocean, just across the equator,” according to the official site of the Maldives Marketing and Public Relations Corporation. With its tropical climate, visitors can bask in “sunlit days, breezy nights, balmy mornings, and iridescent sunsets.” Since resorts provide basic to advanced training, one does not have to be a professional diver to enjoy the islands’ beautiful coral reef areas with over a thousand underwater species. Visitors can also try a variety of water sports, excursions, and spas. In his independent guide to holidays on the islands, “Resorts of Maldives,” author Adrian Neville writes: “It’s hard to have a bad holiday in the Maldives. It’s safe, warm, picturesque, and has high standards in hospitality.” Having lived in the Maldives, he claims, “[T]he place itself is even more idyllic than the brochures would have you believe.”

Historical and cultural journeys Cambodia. Named one of the

best value destinations by Lonely Planet, Cambodia is a great deal for those looking for adventure, but with an affordable price tag. “The imaginative visitor to the country exploring less-well-visited parts will find it easy to afford that extra [Cambodia-made] Angkor beer or three,” the article says. Moreover, the country “delivers an intoxicating present for adventurous visitors,” brought about by a history that is at once “inspiring and depressing,” based on Lonely Planet’s travel guide. (This BBC timeline chronicles Cambodia’s

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tumultuous past, mired in political instability, poverty, and bloodshed.) The riverside capital, Phnom Penh, is regarded as another of Asia’s undiscovered gems, with bustling markets, beautiful boutiques, and museums. One can visit the extravagant Silver Pagoda located within the Royal Palace compound. Once the playground of the wealthy, Siem Reap is returning to the world’s consciousness as quite the charmer with temples, French shop-houses, guesthouses and hotels, spas, tree-lined boulevards, and a slowflowing river. Travel blog Touropia offers the top 10 tourist attractions in Cambodia, including Khmer temple Preah Vihear, port city and beach resort Sihanoukville, and former capital of the Khmer empire Koh Ker. The main tourist attraction in Cambodia remains Angkor, one of the most important archaeological sites in Southeast Asia, according to the United Nations Educational, Scientific, and Cultural Organization (UNESCO). This World Heritage site contains the magnificent remains of the various capitals of the Khmer empire from the 9th to 15th century.

Vietnam. Vietnamese

civilization is as sophisticated as that of its neighbor China, drawing from Chinese influences under a thousandyear occupation, according to a Lonely Planet guide. Following that, plus the more recent French occupation and then the brutal war with America, Vietnam is now a dynamic nation whose myriad of influences are reflected in its religious beliefs, political ideologies, architecture, and cuisine. Freelance travel writer Nick Redmayne recounts in his June article in The Telegraph “a palpable atmosphere of energy and optimism” in Vietnam,

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especially with recent economic reforms. New direct flights with Vietnam Airlines to Ho Chi Minh City and Hanoi also make it easier for travelers to discover Vietnam’s food, sights, and rich culture. The Lonely Planet recommends, among many other activities, booking an overnight cruise along World Heritage wonder Ha Long Bay, hitting the beach at Nha Trang, visiting Hoi An for authentic Vietnamese cuisine, biking through Ho Chi Minh City, exploring the watery world of the Mekong Delta, and going to Hue for a dose of cultural and artistic stimulation.

India. India’s appeal as a

mystical and exotic getaway among Westerners is not about to lose its sparkle. “Chaotic, bamboozling, intoxicating, crazy, exasperating, squalid, daunting, overwhelming” is how Lonely Planet describes India in its guide to the country. Hence, places in India are best enjoyed when each one is savored, rather than rushed. For first-time travelers to the home of the Taj Mahal, Lonely Planet recommends choosing one’s route wisely in order to tailor-fit the trip accordingly. For specific interests, there is Rishikesh for yoga, Himachal Pradesh for trekking, Madhya Pradesh to see the tigers, Varanasi for spiritual fervor, and Manali for adventure sports. In the official website of India’s Ministry of Tourism, other top destinations are: Ahmedabad, Bangaluru (Bangalore), Chennai (Madras), Darjeeling, and Goa, among others. The old city of Hyderabad is listed among Lonely Planet’s “Best in Travel 2013- Top 10 Cities” because of its revival of its monuments and other architectural gems, including the Falaknuma Palace, a seven-star hotel restored by the Taj Group.

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Hot travel destinations in Asia for 2013

News & Strategy Alerts

Health/Lifestyle South Korea. As Korean

pop culture or K-pop takes the world by storm, so does South Korea’s allure to tourists. The capital, Seoul, is a vibrant mega-city “where skyscrapers chisel the skyline, Buddhist compounds offer a place for reflection and traffic is a codeword for organised chaos,” says Lonely Planet writer Tom Hall in an October article in The Independent. Hall describes Korea as one that has developed into an outdoor recreation destination, with three international sporting events coming up in 2013: the Special Olympics Winter Games, Asian Indoor and Martial Arts Games, and the World Rowing Championship. Golfing, hiking, and fishing are among the country’s most popular pastimes. But more than its high-energy metropolis and contributions to popular and modern culture, Korea’s beauty lies in its natural marvels, historical and religious sites, man-made wonders, and picturesque towns. CNN travel gives a rundown of the 50 beautiful places to visit in Korea, which includes: Seongsan Sunrise Peak and Hyeopjae Beach both on Jeju Island, Ggotji Beach, Gwang-An Bridge, Bomun Pavilion in Gyeongju, Boseong Green Tea field, man-made pond Anapji, Cheongsando road, Seomjin River Train Village, Daedun Mountain Suspension Bridge, and many more. The Korean Travel Organization website Visit Korea serves as the ultimate guide for travelers to the country.

Whether you’re in the mood to travel off the beaten track or relish urban modernity in Eastern settings, Asia always has something unique to offer.

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Depression: a global burden Some 350 million people live with depression, and it is the leading cause of disability worldwide While there are known effective treatments for depression, access to treatment is a problem in most countries The Philippines has the highest incidence of depression in Southeast Asia

Mental health experts at University of Cambridge in United Kingdom have devised a computer test for school children to identify those at high risk for mental illnesses such as depression, to alert doctors and psychologists to intervene early, according to a Nov. 28 Reuters report. About 10% of children between 5 and 16 in the U.K. have been found to have a mental disorder of some kind. Globally, depression affects 350 million people, and is the leading cause of disability in terms of total years lost due to disability, based on a report by the World Federation for Mental Health (WFMH) released during the 20th annual Global Mental Health Day on Oct. 10. According to the report, depressive disorders, which often start at a young age, reduce people’s ability to function and often are recurring. The report also says that depression is more common among women than in men. In fact, depression is the leading cause of disease burden for women in both high-income and low- and middle-income countries, it adds. At its worst, depression can lead to suicide. Yearly, almost a million lives are lost due to suicide, which translates to 3,000 suicide deaths every day, according to the WFMH report.

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The World Health Organization (WHO) defines depression as a “common mental disorder, characterized by sadness, loss of interest or pleasure, feelings of guilt or low self-worth, disturbed sleep or appetite, feelings of tiredness, and poor concentration.” As discussed in the “6th WHO mental health Gap Action Programme Intervention Guide,” treatment options for depression include basic psychosocial support combined with antidepressant medication or psychotherapy, such as cognitive behavior therapy, interpersonal psychotherapy or problem-solving treatment. However, even with the seriousness of depression as an illness and the availability of treatment, only 30% of cases worldwide receive appropriate care, according to the WHO Regional Office for Southeast Asia (WHO-SEARO) 2001 report “Conquering depression.” This is driven by the widespread stigma associated with mental illness and unavailability of psychiatric services, among others. The WHO-SEARO report says mental health has long been neglected, and suggests that governments address the negative public perception of mental illnesses, formulate clear strategies to reduce the disability associated with mental disorders, and allocate sufficient funds for training and research in mental disorders. Additionally, governments and health policies must take into account the impact of social disturbances – war, crime, and natural disasters—on psychological disorder and reduce their negative effects on the psychological health of victims. According to information posted by the Natasha Goulbourn Foundation, a local non-profit organization that promotes better understanding of depression, the Philippines is said to have the highest number of cases of depression in Southeast Asia, with over 4.5 million cases reported in 2004.

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This YouTube video uploaded by WHO tells a story of overcoming depression

Diabetes linked to hearing loss Diabetics are twice as likely to have hearing impairment than those without the disease, a study finds Hearing loss may be an underrecognized complication of diabetes, hence, experts recommend diabetics have their hearing tested It is important to know the various complications of diabetes for better management of the condition Hearing impairment is twice as likely to occur in diabetics than those without the disease, a Japanese study finds. In a Dec. 2 Reuters report, the study published in the Journal of Clinical Endocrinology and Metabolism also said that younger diabetics are at an even higher risk than older adults, but could not explain why. Lead researcher Chika Horikawa and colleagues wrote: “Current meta-analysis suggests that the higher prevalence of hearing impairment in diabetic patients compared with nondiabetic patients was consistent regardless of age.”

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Further, Horikawa said it was believed that high blood sugar levels brought on by diabetes may cause hearing loss by damaging blood vessels in the ears, the report noted. Some experts cautioned, however, that this kind of study does not prove that diabetes is the direct cause of greater hearing loss. In 2008, a study funded by the United States National Institute of Health (NIH) had similar findings. In a news release on the NIH site, researchers analyzed the results of a hearing test given to a nationally representative sample of adults in the U.S. Senior author Catherine Cowie, Ph.D., of the National Institute of Diabetes and Digestive and Kidney Disease, highlighted that hearing loss may be an under-recognized complication of diabetes. Hence, she recommends people with diabetes consider having their hearing tested. Diabetes has been linked to a number of complications. The Mayo Clinic lists cardiovascular problems, nerve damage, skin and mouth problems, osteoporosis, Alzheimer’s disease, and damage to the kidneys, eyes, and feet.

Weight training can also reduce the risk of Type 2 diabetes in men, according to a study published in the Archives of Internal Medicine journal. Though regular exercise is known to lower the risk of the disease, this finding is important since it can provide an alternative to aerobic exercises for people who are not mobile, says an August BBC report citing the study. Researchers from the Harvard School of Public Health and the University of Southern Denmark found that 30 minutes of weights a day, five times a week, could reduce the risk of diabetes by 34%. Meanwhile, a research finding cited in a Dec. 4 Science Daily report reveals moderate coffee consumption may reduce the risk of diabetes by up to 25%. The research was part of a session report by the Institute for Scientific Information on Coffee presented during the 2012 World Congress on Prevention of Diabetes and its Complications. Type 2 diabetes comprises 90% of people with diabetes around the world, and is attributed mainly to excess body weight and physical inactivity, according to a fact sheet from the World Health Organization.

The American Diabetes Association says diabetes increases one’s risk for many serious health problems, but with the correct treatment and lifestyle changes, the onset of complications may be delayed or even prevented. Knowing more about the complications of diabetes can help in the management of the condition. A study found that healthy lifestyle factors, when considered in combination, are associated with substantial reduction in risk for diabetes. The study, published in the Annals of Internal Medicine in September, 2011, analyzed factors, such as dietary intake, body weight and height, physical activity, smoking, and alcohol consumption.

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The World Health Organization shows 10 facts about diabetes, among them is that diabetes is predicted to become the 7th leading cause of death in the world by 2030

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