BusinessMirror June 2, 2015

BusinessMirror

THREETIME ROTARY CLUB OF MANILA JOURNALISM AWARDEE 2006, 2010, 2012

U.N. MEDIA AWARD 2008

A broader look at today’s business Saturday 18, June 2014 2, Vol.2015 10 No. 40 Tuesday, Vol. 10 No. 236

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‘CARS’PROGRAM TO GRANT $600M WORTH OF INCENTIVES TO VEHICLE MAKERS FROM 2016 TO 2021

Palace OKs new auto industry program

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INSIDE

Life

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NOWING Jesus’ ascension is not the end of His presence among us. It is only a planned intermission, which reminds us that the play goes on, and that it is now the time for the “supporting actors” to play their role, while the main protagonist is still in action, behind the scene, preparing for the “Grand Finale.” The play is the history of salvation, the construction of the Kingdom proclaimed and initiated by Jesus. May His ascension remind us to make a good preparation before we can join him in God’s Kingdom. Amen.

EXPLORING GOD’S WORD, FR. SAL PUTZU, SDB AND LOUIE M. LACSON

Word&Life Publications • teacherlouie1965@yahoo.com

DON’T BE AFRAID TO MIX METALS IN THE KITCHEN »D4

BusinessMirror

Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

Tuesday, June 2, 2015

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❶ ❶ PACITA ABAD’S smile comes in the form of a rainbow or the rays of the sun. What better way to start a new morning by watching the sunrise while sipping on a hot cup of coffee and enjoying some private quiet time.

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FUNDACION Pacita sits on a hill with an unobstructed view of the Pacific Ocean. All the rooms provide equally magnificent views as no two rooms look out the same spectacle. The lodge offers the best views to wake up to in the morning.

❸ ON a clear day, you

can see forever. Blending with the surroundings, Fundacion’s verdant green landscape is a sight in itself as it is set against the turquoise blue of the waters and the white sea foam.

❹ UPON entering,

one is greeted by a lush garden and a pathwalk that leads to the front door of the traditional Ivatan stone house, which was designed to withstand the strong battering winds that have defined the province.

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I LOVE how distinct Pacita Abad’s personality is. At the entrance approaching lodge stands a sculpture of the artist made by sculptor Julie Lluch—a monument to her love for color, art and the Ivatan people. NIKKI BONCAN-BUENSALIDO AND FUNDACION PACITA

NIKKI BONCAN-BUENSALIDO

design@buensalidoarchitects.com www.buensalidoarchitects.com

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HE first thing that comes to mind when I think about art, nature and imagery is color. Color, in scientific terms, is simply a manifestation of the full spectrum of light. In more creative terms, color means everything else. It has the ability to portray emotions. It has the ability to consume you, drown you, uplift you. It makes people happy and feel good about themselves—or the opposite of these. Color helps one express his deepest thoughts and carry a message across without words. Put together the earth and all the imaginable colors possible, color is that which makes the world beautiful.

Tucked in a home studio on top of a hill in Batanes overlooking the Pacific Ocean is a memorial that was once the home and studio of an artist whose life work had been mostly dedicated to color. Pacita Abad (1946-2004) always saw the world through color, “although my vision, perspective and paintings are constantly influenced by new ideas and changing environments,” she once said. Her artworks are hopeful and inspiring as bursts of color fill each canvas, projecting a positive, joyful mood that “helps make the world smile.”

Pacita Abad was born in a post office in Basco, Batanes.

Although well-traveled, she always considered her roots to be Ivatan. Throughout her life, she explored the world, lived in 48 different countries and connected with people through her colorful paintings. Her works explored and meditated on the socio-political landscape, and she expressed her opinions and emotions through art. One of Pacita’s most notable works is the Alkaff Bridge in Singapore which she painted before she passed away. A passage in her biography reads: “Pacita was finally laid to rest on a wind-swept hill in Batanes, next to her stone studio, Fundacion Pacita, and, fittingly, as her grave was being covered, a bright rainbow burst over Mount Iraya—to say a colorful goodbye to one of Asia’s foremost contemporary painters.” Today Fundacion Pacita is her legacy to her beloved family and the Ivatan people. Once the artist’s home and studio, it was lovingly refurbished by her brother, Butch Abad, and now stands as the best boutique hotel in Batanes. Mr. Abad’s daughter Patsy, whose charming demeanor is reflected

in the quaint personality of Fundacion Pacita, runs the quaint lodge. In it, Pacita Abad’s life is celebrated and nurtured. The quaint stone house sits majestically on top of a hill in the Tukon region of Basco, Batanes.

This incredibly picturesque tableau brings together the mountain, the sky and the sea, the emerald green landscape a backdrop to the heritage of the Ivatans. The lodge is filled with Pacita’s artworks and the rooms pay homage to her creative roots as a native of the province.

Upon entering, one is greeted by a lush garden and a pathwalk that leads to the front door of the traditional Ivatan stone house, which was designed to withstand the strong, battering winds that have defined the province. These stones were once collected from the beach following the Mount Iraya erupted. The foyer of the lodge leads to a spacious living and dining area that typically reminds one of home. The lodge has very limited rooms, so booking ahead is a must. No two views from the rooms are alike as the rooms are located in different areas within the confines of the lodge. The rooms are aptly named after the local terms of wind direction, as the environment and nature have long informed Ivatan living.

Local elements and a touch of art embellish the interiors, blending with the views of the spectacle outside. Each room has a veranda overlooking the sea. I strongly advise guests to take at least a morning to watch the sunrise at the balcony— after all, how often do you get to do so at the very tip of the Philippines? Further down along a hidden path, there is a private beach that provides a stunning welcome in reward for one having managed a hefty number of steps. The trek is definitely worth it. Allow the shimmering water and the wind to sweep you away to bliss.

A visit to Fundacion Pacita is not complete without dining at Café Du Tukon. Since Batanes is mainly composed of lush vegetation, the restaurant’s gustatory offerings are a showcase of vegetables, beef and pork that are organic and free-range. As part of Fundacion Pacita’s social empowerment projects, the local fare is produced by the farmers around Sitio Tukon. A must-try is the Lunis Pizza inspired by the local delicacy lunis, a traditional Ivatan dried adobo, and Pacita’s Pizza for dessert.

The café overlooks the rolling hills and Batanes’s highest peak, Mount Iraya—because you simply can never get enough of the view.

Fundacion Pacita is charming all around—and that is because it is authentic to its inhabitants. It is authentic in its culture and in its soul. It is true. It has no frills and does not try hard to impress. It just does. Fundacion Pacita speaks for itself and in it and in the community surrounding it, still lives the legacy of Pacita Abad—a woman of color.

LIFE

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■ For inquiries, contact Fundacion Pacita Batanes Nature Lodge at inquiries@fundacionpacita.ph.

MADE IN ‘CHINDIA’ The World BusinessMirror

news@businessmirror.com.ph | Tuesday, June 2, 2015

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Made in ‘Chindia’: Giants take different manufacturing paths

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T may sound like another example of rivalry between the world’s most populous nations. The Communist Party recently announced a Made in China program aimed at transforming its manufacturing sector, months after Prime Minister Narendra Modi unveiled his Make in India plan, also targeted at manufacturing.

remier Matteo Renzi casts his ballot at a polling station in Pontassieve, near Florence, Italy, on Sunday. Italians vote for governorships in several regions and posts in dozens of municipalities in what is being seen as a partial test of ANCESCO BELLINI

Italian premier’s Democrats facing loss in key regional race

voted for governors. Consolidating gains was the anti-immigrant Northern League in its Veneto stronghold in northeastern Italy. In Liguria the League teamed up with Berlusconi’s candidate, further extending its influence. It also appeared to be headed for a strong second-place showing in Tuscany, a region that has been outside its power base, and where the incumbent Democratic candidate seemed en route to a wide victory.

Northern League leader Matteo Salvini had told voters that those who didn’t cast ballots for his party were effectively supporting what he called an “invasion” of Italy by migrants. Straining its coffers, Italy has been rescuing and sheltering a relentless stream of migrants arriving by sea aboard smugglers’ boats launched from Libyan shores. Last year Italy rescued some 170,000 migrants, and tens of thousands have arrived this year. AP

party proposes gay-marriage law

lawmakers were allowed to vote according to their consciences, while Liberal lawmakers were required to oppose marriage equality. Abbott says the party has yet to decide whether his party’s lawmakers would he allowed a free vote when the issue next comes up in Parliament.

Analysts say that since Abbott’s authority was weakened by a leadership challenge from within his party in February, he may be unlikely to anger marriage-equality advocates within government ranks by denying them a free vote.

Even with all lawmakers allowed a free vote, gay-rights advocates say the result would be close. AP

Look closer though and the signs point to a broad shift that could draw the two Asian giants closer economically in the years ahead.

Made in China 2025 is a 10-year campaign to push the country beyond labor-intensive work into more sophisticated sectors, from robotics to aerospace.

Modi’s goal is to bring basic manufacturing to an economy that needs more decent-paying jobs. In short, China has set its sights on rivaling Germany or Japan, while India will happily settle for where China is now.

“Whatever industries China will be shedding over the years, India can capture,” said Frederic Neumann, cohead of Asian economic research at HSBC Holdings Plc. in Hong Kong.

“The advanced guys will find that they finally have to compete head to head with China and I think it’s going to be a big, big headache for these industrialized countries.”

Besides sheer scale, China is years, if not decades ahead of its neighbor. According to International Monetary Fund (IMF) and World Bank data, China’s gross domestic product (GDP) per capita is almost five times that of India at $7,600 and its manufacturing sector is 10 times bigger at about $3 trillion.

Still, China is losing workers by the millions, similar to what Japan experienced in the late 1990s.

Jet planes

AMONG its ambitions, China wants to jump into areas, such as factory automation and build the types of computerized controls needed to make high-precision goods like iPhones or cars. The government is also hoping to challenge Airbus

Group NV and Boeing Inc.’s dominance of the market for jet planes.

Also on the wish list: advanced medical devices, energy-saving vehicles, marine engineering and high-end ships for things, such as deep-sea exploration and equipment for electric power and agriculture.

Analysts have already been busy mining Made in China 2025, putting their spreadsheets on overdrive and spitting out predictions as to which companies stand to gain from the program.

Citigroup Inc. has a list of 11 top beneficiaries ranging from Lenovo Group Ltd. to Zhengzhou Yutong Bus Co. China International Capital Corp.’s list exceeds 30 names, including Zoomlion Heavy Industry Science & Technology Co., while Macquarie Group Ltd. identified more than 40 companies including Great Wall Motor Co. and Sino Biopharmaceutical Ltd.

Grand ambitions

STILL, the campaign is in its infancy and China doesn’t always deliver on its grand ambitions. For example, the government no longer talks about its target to have 5 million electric vehicles on its roads by 2020 as sales never caught on.

That said, China has reason to be pursuing an upgrade. Gone are the days of 10-percent-plus growth as the world’s second-largest economy heads toward its slowest year of expansion since 1990.

Labor shortages are driving up wages and squeezing low-end manufacturers, such as clothing makers.

Industrial profits in the country are down this year, particularly at stateowned enterprises.

Illustrating China’s woes, exporters in the Pearl River Delta manufacturing hub face chronic labor shortages and rising costs. In a recent Standard Chartered Plc. survey, wages in the region are forecast to rise by 8.4 percent this year, and over 85 percent of respondents said labor shortages are as bad as last year.

Around 11 percent of companies surveyed plan to move factories overseas to keep costs down, with Vietnam and Cambodia topping the list of preferred destinations.

More factories

VIETNAM and Cambodia? Not if India’s prime minister has his way.

Announced in September, Modi’s Make in India campaign seeks to bring in foreign investment and raise the share of manufacturing in Asia’s third-largest economy to 25 percent by 2022 from the current 18 percent, a percentage that’s largely been unchanged since 1947.

Count Foxconn Technology Group among companies getting drawn.

Its FIH Mobile Ltd. unit has said it will begin assembling smartphones in the country this year.

While there are some overlaps

with the China campaign, such as promoting biotechnology and renewable energy, many of the 25 industries in Make in India are sectors that aren’t exactly cutting edge, such as textiles, leather and mining.

“Promoting the manufacturing sector in India starts from a very low base and it’s going to be aiming to capture a lot of the low-skilled jobs that are leaving China in the tens of millions,” according to Peter Martin, associate director for India at Apco Worldwide.

India’s turn

INDIA may be ripe to take China’s place. Manufacturing’s share of the economy typically starts surging when a country’s average income—in terms of purchasing power parity—crosses $5,000 and will continue to soar until $10,000, according to a McKinsey & Co. study. India’s per-capita income on that basis is at $5,850 and China’s at $11,850, according to the World Bank estimates.

Yet challenges abound. India’s notorious bureaucracy contributed to the country ranking 142 of 189—that’s lower than Ethio-

respiratory illness a separate rule setting the first national standards for waste generated from coal burned for electricity.

The rules are among a host of regulations that majority Republicans have targeted for repeal or delay as they confront President Barack Obama on a second-term priority: his environmental legacy, especially his efforts to reduce the pollution linked to global warming.

What has Obama proposed?

LEWHITE

Republican Sen. Shelley Moore Capito of West Virginia is promising to “rein in” the government through legislation or other means. It’s a threat with a familiar ring.

What else are Capito and other Republicans pledging to try to block? the administration’s plan to curb carbon pollution from coal-fired power plants. its proposal for stricter limits on smogforming pollution linked to asthma and

LAST June Obama rolled out a plan to cut earth-warming pollution from power plants by 30 percent by 2030, setting in motion one of the most significant US actions ever to address global warming. Once completed this summer, the rule will set the first national limits on carbon dioxide from existing power plants, the largest source of greenhouse gases in the US. The administration says the rule is expected to raise electricity prices by about 4.9 percent by 2020 and spur a wave of retirements of coalfired power plants.

The administration also has

moved forward on other rules, including the water plan announced on Wednesday. Officials say it will provide much-needed clarity for landowners about which small waterways and tributaries must be protected against pollution and development. The head of the Environmental Protection Agency (EPA), Gina McCarthy, said the rule only would affect waters with a “direct and significant” connection to larger bodies of water downstream that already are protected. The administration has proposed stricter emissions limits on smog-forming pollution linked to asthma and respiratory illness.

Rather than settling on a firm new ozone limit, the EPA is proposing a range of allowable ozone levels that cut the existing level but do not go as far as environmental and public health groups want. The rule is expected to be completed later this year.

Last December the administration set the first national standards for waste generated from coal burned for electricity, treating it

more like household garbage than a hazardous material. Environmentalists had pushed for the hazardous classification, citing hundreds of cases nationwide in which coalash waste has tainted waterways or underground aquifers, in many cases legally. The coal industry wanted the less stringent classification, arguing that coal ash is not dangerous, and that a hazardous label would hinder recycling. About 40 percent of coal ash is reused.

What do Republicans say about the rules?

REPUBLICAN lawmakers criticize the rules as antibusiness job killers that go further than needed to protect the nation’s air and water supplies and other natural resources.

House Speaker John Boehner said the new water rule will send “landowners, small businesses, farmers and manufacturers on the road to a regulatory and economic hell.” Sen. James Inhofe, chairman of the Senate Environment and Public Works Committee, said Obama and the EPA are “aggressively pushing an extreme

and costly regulatory agenda” that will harm the US economy and everyday life of Americans. His committee “continues to pursue legislation to take aim at EPA’s costly and harmful regulations,” Inhofe said.

What options are available to congressional opponents?

SENATE Majority Leader Mitch McConnell has led the charge against the power-plant rule, which he says amounts to a declaration of war against his home state of Kentucky, a longtime leader in coal production. McConnell wrote the 50 governors in March urging them not to comply with the rule, which requires implementation by the states.

McConnell has encouraged legal challenges to the rule and recently announced a new wrinkle, telling the EPA’s McCarthy that Congress could block the plan by using an obscure section of the Clean Air Act requiring congressional consent for agreements among states.

“The law reads: ‘No such agreement or compact shall be binding or

pia and Sierra Leone, while China ranks 90th—on the World Bank’s latest Ease of Doing Business Index. Red tape is so bad it usually takes 30 days and 12 clearances to get a company registered in the industrial hub of Noida, near New Delhi. That’s three times longer than in an Organization for Economic Cooperation and Development country.

And while it’s still early days for the campaigns, history points to China being more successful at getting things done. Three decades ago, both economies were at similar levels. China’s economy took off since then and exceeded $10 trillion last year, while India has yet to crack $2 trillion.

“The Chinese state is capable of articulating and consistently driving a set of goals,” Apco’s Martin said. “It’s a challenge for India to match that kind of consistency in its policy drive toward manufacturing. And that has to do with a really fundamental difference in the political systems which relates closely to India’s decentralized democracy versus China’s developmentalist one-party state.” Bloomberg News

obligatory upon any state ...unless and until it has been approved by Congress,’” McConnell told McCarthy at an April hearing. “Doesn’t seem ambivalent to me. I can assure you that as long as I am majority leader of the Senate, this body will not sign off on any backdoor national energy tax.”

What’s next?

OBAMA, McCarthy and officials are not backing down. At the April hearing, McCarthy told McConnell that the EPA guidelines are reasonable and give states “tremendous flexibility.” The EPA will produce a rule “that will withstand the test of time in the courts,” McCarthy said.

“You’re going to have to prove it in court,” McConnell said. “As we most often do,” McCarthy replied.

Lawmakers in the House and Senate will continue to hold hearings on the administration’s plans and push bills to block the rules or curb spending on them. The Republican-controlled House passed a bill blocking the EPA water rule on May 12—two weeks before it was announced.

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ITALY NOW, FRANCE LATER

Sports

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| TUESDAY, JUNE 2, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

BusinessMirror

THE 32-year-old Alberto Contador has had to dig deep during a troublesome three weeks in Italy, after dislocating his shoulder in an early crash, and is likely to face stiffer competition in the Tour de France. AP

ITALY NOW, FRANCE LATER Alberto Contador turns his attention to fulfilling his aim of becoming the first cyclist since 1998 to win the Italian classic and the Tour de France in the same year.

T D M

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The Associated Press

ILAN—One down, one to go.

Alberto Contador clinched his second Giro d’Italia title on Sunday, and immediately turned his attention to fulfilling his aim of becoming the first cyclist since 1998 to win the Italian classic and the Tour de France in the same year.

“I overcame so many difficulties, but, at the end, I got the maglia rosa [pink jersey],” Contador said. “I don’t know how long it will take to recover but I think I’ll get back to work on Saturday. It was an emotional Giro. I already said it would be my last, but, you never know.”

Contador had all but secured the win after Saturday’s 20th stage when he saw his lead cut in half, but, nevertheless, headed into the final day—a mainly processional stage—with more than a two-minute advantage on closest rival Fabio Aru. Contador ended up winning by one minute and 53 seconds.

The 32-year-old Contador has had to dig deep during a troublesome three weeks in Italy, after dislocating his shoulder in an early crash, and is likely to face stiffer competition in the Tour.

“The Tour starts for me now,” the Spaniard said.

“Tonight I will rest as much as I can, tomorrow I will go to Spain and take three or four days before I start concentrating again on the Tour in complete isolation.

“My rivals won’t have done the Giro, so the Tour could be more complicated because they won’t have the Giro in their legs.”

A two-time Tour champion, Contador won the Giro in 2008 and was also triumphant in Milan in 2011 but was stripped of that title for testing positive in the 2010 Tour.

“In 2008 my preparation was better but I didn’t know the climbs,” Contador said. “In 2011 I rode after conscientious preparation but also after an intense start to the season. This year I’ve also raced in the first part of season but the Giro was the part of the double objective that I had set myself so I was calmer and more reflective including during the race.

“There were days when I could have been more ambitious, but I decided to ride tactically and it went well.”

Contador, who has also won the Spanish Vuelta three times, joins French cycling great Bernard Hinault as only the second rider in history to have won all three grand tours more than once.

Aru finished second overall, with Astana teammate Mikel Landa third, 3:05 behind Contador, who took a total of 88 hours, 22 minutes, 25 seconds to cycle the 3,486

kilometers (2,166 miles) of the three-week race.

Contador had a pink bicycle—the color of the winner’s jersey—for the final stage while his Tinkoff-Saxo teammates had pink handlebars on their bicycles and all were wearing pink socks.

Team owner Oleg Tinkov had also dyed his hair pink to celebrate the occasion.

Iljo Keisse sprinted to victory at the end of the flat 178-kilometer leg from Turin to Milan, edging out Luke Durbridge, who gave his break companion a congratulatory hug as they crossed the line.

“I wasn’t expecting that at all, even if we had come up with a sort of plan for me to try and do something on the final curve.” Keisse said. “I’m a track specialist and I know how to take curves quite well. But, then, I saw there was a bit of hesitation at the start of the circuit, so I attacked.... It’s the best victory ever.”

RAIN, RAIN GO AWAY...

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ARIS—Roger Federer could be excused if he has a restless night.

With thick gray clouds overhead and light slipping away at the end of a rainy day, Federer got broken by Gael Monfils to even their French Open fourthround match at a set apiece, right before play was suspended Sunday.

They met on the sideline to chat with the chair umpire, then clasped hands, and Monfils gave Federer a playful pat on the shoulder. Spectators at Court Philippe Chatrier booed and whistled upon hearing there’d be no more tennis.

Federer, the 17-time Grand Slam champion, and Monfils, the flamboyant Frenchman who won their two most recent encounters, will resume on Monday. At least they finished two sets, with Federer taking the first 6-3, and Monfils winning the second 6-4.

Two women’s matches did not begin at all on Sunday, including defending champion Maria

Sharapova against Lucie Safarova.

In the quarterfinals, Federer or Monfils will face Federer’s Swiss Davis Cup teammate Stan Wawrinka, seeded eighth, who had no trouble beating 12th-seeded Frenchman Gilles Simon, 6-1, 6-4, 6-2.

Wawrinka said he’ll be watching the rest of FedererMonfils “like any tennis fan.”

On the other half of the draw, No. 5 Kei Nishikori became the first Japanese man in 82 years to reach the quarterfinals in Paris, eliminating Teymuraz Gabashvili, 6-3, 6-4, 6-2.

“I hope it’s just the start of my journey and I hope I can keep going,” said Nishikori, who had three days off because his third-round opponent withdrew with an injury.

The only other man from his country to make it this far at this tournament was Jiro Satoh, a semifinalist in 1931 and 1933.

Next for Nishikori is No. 14 Jo-Wilfried Tsonga of

France, who overcame a mid-match lapse to defeat No. 4 Tomas Berdych, 6-3, 6-2, 6-7 (5), 6-3.

Tsonga, the 2008 Australian Open runner-up, served for the match at 5-4 in the third set but got broken, and his sloppy play carried into the tiebreaker.

“I had a little bit of a dip, when I fell back into my bad, old ways,” Tsonga said. “I’ve been working a lot with my coaches to limit that.”

Had he managed to close things out earlier, or if a rain delay of about two-and-a-half hours hadn’t interrupted action in the afternoon, Federer and Monfils might have finished. They didn’t get on court until after 7 p.m. and competed for less than 70 minutes.

With the temperature in the low 60s (teens Celsius), Monfils covered up with a blanket and blew his nose into a tissue during a changeover. As natural light disappeared—there are no artificial lights at Roland Garros, and a roof won’t arrive before 2019—the chair

SERBIA’S Ana Ivanovic kneels on the court during her fourth round match against Russia’s Ekaterina Makarova on Sunday. AP

SPORTS

umpire reminded fans they shouldn’t use a flash while taking photos during points.

Monfils got broken while serving for the second set at 5-3, and Federer—who lost in the fourth round last year—had an opening to perhaps steal a two-set lead. But Monfils responded in the next game, winning an 18-stroke exchange with a forehand to earn to set point, then converting with a backhand that drew roars from the crowd.

Monfils leaped, yelled “Allez!” and waved both arms to ask for more noise.

Moments later, everyone was sent home, setting up quite a schedule Monday. Along with FedererMonfils and Sharapova-Safarova, there will be matches featuring Rafael Nadal, Novak Djokovic, Andy Murray and Serena Williams.

In a women’s match Sunday, No. 7 Ana Ivanovic beat No. 9 Ekaterina Makarova, 7-5, 3-6, 6-1, to return to the quarterfinals for the first time since winning the 2008 title.

“On the one hand, it does feel like it’s a different life. On the other hand, I feel like time is really flying.

I feel it hasn’t been that many years,” said Ivanovic, who briefly was ranked No. 1 after winning her lone Grand Slam trophy. “I definitely do have the feeling it’s amazing.”

Her match was halted by rain after five games, and tournament officials wavered about when to resume.

“It was like, ‘OK, in half an hour. In half an hour.

In half an hour.’ So it was really not easy to relax and refocus,” Ivanovic said. “I was really happy I managed to keep composed.”

She’ll play No. 19 Elina Svitolina, a 20-year-old from Ukraine who reached her first major quarterfinal with a 6-2, 7-6 (9) victory over No. 29 Alize Cornet.

In the second set, Cornet berated the chair umpire over a line call, daring her to “give me a warning” and saying the official “stole” a point. Later, Cornet referred to the ruling as “a shame” and “a scandal.” AP

The program seeks to ramp up the competitiveness of the local auto industry amid the Asean integration and attract P27 billion worth of vehicle-manufacturing investments into the Philippines.

“The program is designed to build and grow the parts-making capability of the auto industry, for without a robust parts-making industry, our carmaking industry will remain uncompetitive. The CARS Program is about building capabilities and jobs to make our automotive manufacturing industry competitive in the

Asean,” Trade Secretary Gregory L. Domingo said in the statement.

The program will stimulate economic activity estimated at P300 billion over the six-year period starting 2016. The resulting contribution to gross domestic product (GDP) is estimated at about 1.7 percent.

The annual dole-out of $100 million, or an average of P4.5 billion yearly from 2016 to 2021, will be used to support three vehicle models. This is also expected to attract more than P27 billion in new S “A ,” A

DTI, DOF stall progress of RFI bill in Congress

A SHOPKEEPER demonstrates how an air cooler works to customers at a market on a hot summer day in Hyderabad, in the southern Indian state of Telangana, on Saturday. AP/MAHESH KUMAR

Republicans pledge to ‘rein in’ Obama on environmental rules

Republican-West Virginia, accompanied by Senate Majority Leader Mitch McConnell of Kentucky, speaks to reporters on

THE BASIC NEEDS: FOOD, CLOTHING AND...

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Fundacion Pacita: An artist’s legacy URBAN MONOLOGUES 2.0

SPECIAL REPORT

ALACAÑANG has approved the much-awaited Comprehensive Automotive Resurgence Strategy (CARS) Program, which will provide the local auto industry a total of $600 million worth of incentives over a six-year span.

FUNDACION PACITA Jesus’ ascension

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OPES to pass the proposed rationalization of fiscal incentives (RFI) bill are dimming, as the Department of Trade and Industry (DTI) and the Department of Finance (DOF) continue to butt heads on the measure, making the RFI one of the longest pending bills in Congress.

Even as Senate President Franklin M. Drilon, in a roundtable with the BM last week, said that they “are not giving up” on the RFI bill, the DTI and the DOF continue to stall the measure’s progress.

Senate Committee on Ways and Means Chairman Juan Edgardo M. Angara said that even if they prioritize the bill, they could not move forward because the DTI and the DOF have yet to come up with a consolidated version.

PESO EXCHANGE RATES ■ US 44.5670

The RFI, which has failed to pass Congress for 16 years now, is considered the twin measure of another proposed bill, the Tax Incentives Management and Transparency Act (Timta). Government officials have said that the DTI and the DOF have agreed on a compromise to push the passage of Timta but leave the RFI behind.

Investment-promotion agencies (IPAs), particularly the Board of Investments and the Philippine Economic Zone Authority, have strongly opposed the RFI, as it will significantly cut the fiscal perks that they can offer to investors.

On the part of the DOF, the move will streamline the numerous fiscal incentives that they see as “tax expenditures,” or a source of

A MOTHER and her child look outside their makeshift house in Manila, a familiar site in slum areas due to the worsening housing gap in the country. NONIE REYES

B J M N.  C  C N. P Second of four parts

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EOPLE feel safe and comfortable when they are inside their own homes. Definitely, no one can dispute these words of the chairman of the House Committee on Housing and Urban Development, Rep. Alfredo Benitez of Negros Occidental.

“It [having your own house] is the sense of security; it is something that every Filipino looks forward to,” he said. “But the question [now] is, ‘Is having your own house a privilege or a right?’”

This is the same question that Filipinos belonging to some 5.5 million households are probably asking themselves nowadays. To them, the third component of the basic needs—food, clothing and shelter—is probably missing.

In the Philippines the rapid increase in urban population produces an enormous demand for shelter.

Estimates given by Benitez and Noel “Toti” M. Cariño, vice president of the Chamber of Real Estate and Builders’ Association (Creba), put the country’s

housing backlog at 5.5 million units. This figure, however, needs further verification, particularly since there is still no official definition of “housing backlog.”

According to Benitez, several people from rural areas go to different cities because of one reason— they are looking for job opportunities.

Because people need to live in areas where they have better opportunities, Benitez said it becomes a method for most of them to occupy idle lands that are either owned by the government or the private sector.

“If the government will only give them better opportunities [in the countryside] like it is giving to the people in the urban areas, they will choose to stay where they are,” Benitez said.

Urban migration

ACCORDING to Benitez, the income in urban areas is two to three times higher than in rural areas, so rural folk migrate to cities to search for a job.

The Department of Labor and Employment (DOLE) said workers in Metro Manila receive P446 (basic wage P426 + cost of living allowance P20) as their minimum wage.

C  A

S “RFI ,” A

■ JAPAN 0.3591 ■ UK 68.1429 ■ HK 5.7484 ■ CHINA 7.1899 ■ SINGAPORE 33.0787 ■ AUSTRALIA 34.0987 ■ EU 48.9702 ■ SAUDI ARABIA 11.8839 Source: BSP (1 June 2015)

BMReports BusinessMirror

A2 Tuesday, June 2, 2015

news@businessmirror.com.ph

The basic needs: Food, clothing and... continued from a1

For the head of the Housing and Urban Development Coordinating Council (HUDCC), Vice President Jejomar C. Binay, urban migration is a national issue that the government should address.

“I see that urban migration is not only a problem in the capital but also in all economic centers of several provinces,” he said.

According to Binay the increasing number of informal settlers will not be resolved until the government has found the answer to urban migration.

“The solution to urban migration is the development of our provinces, which can provide better job opportunities to their people,” he said.

Binay said almost half of the country’s population already live in the urban areas, “and because of this it is expected to further increase the [number of ] informal settlers in the next decade.”

The Vice President said the government’s housing programs should also focus on far-flung areas and not only on the highly urbanized area.

Moreover, the Philippine Human Rights Information Center (PhilRights) said the proliferation of slums in Philippine cities is seen as a coping mechanism for urban dwellers with incomes that are too fragile to afford land ownership.

It said slum areas are often blighted, overcrowded and lacking standard onveniences, such as electricity, water, drainage and health services.

“These settlements are usually located in high-risk areas, such as floodprone embankment, waterways, railroad tracks, under bridges and beside dumps.

But shantytown dwellers endure these unsanitary and dangerous conditions to be close to their sources of income,” PhilRights added.

Housing need can reach 12.5-million in 2030

Housing framework Meanwhile, the National Urban Development and Housing Framework (NUDHF) for 2009-2016 finds the housing problem to be serious and is a largely urban phenomenon.

It said that by 2050, some 117 million Filipinos will be urban dwellers, translating to six out of 10 Filipinos living in urban areas. The NUDHF was published in 2009 by the HUDCC and the Philippine Institute for Developmental Studies, with the assistance of the United Nations Development Program.

“Beyond the public sector providing housing and the auxiliary services, new approaches are needed in the face of continuing rural-urban migration that is bound to exacerbate the housing problem.

The affordability of, and access to, government housing programs by the poor will also continue to pose a major challenge in the near future,” the NUDHF said.

Besides Metro Manila, it added that the other areas that have high levels of urban populations are Regions 3, 4 , 7, 10 and 11.

Problematic price cap Creba’s Cariño said there is a mandated price cap for socialized housing units that is difficult to meet, thus forcing developers to look for cheaper land away from the Metro, making the projects less appealing to informal settlers in Metro Manila.

Source: Projections using SRTC framework; HUDCC

Socialized housing has a price cap of P450,000 set by the HUDCC and the National Economic and Development Authority (Neda). The current ceiling of P 450,000 for socialized housing is already a product of public-private concession, as Creba initially wanted P480,000.

Before the request of Creba for the adjustment, developers were hard-pressed to meet the previous ceiling of P400,000, considering the rising cost of construction materials, the raw price of land and hefty real property taxes.

The adjustment of the price ceiling for developers would mean more opportunities to serve the low-income market by adjusting the coverage of housing packages accorded with all incentives and privileges given by the government, without having to sacrifice the quality of the projects.

The difficulty in convincing HUDCC and the Neda to increase the price ceilings has,

overtheyears,discouragedprivatedevelopers from venturing into socialized housing, as the stringent cap forces them to decrease the quality of materials and opt for cheaper land away from the metropolis.

Socialized condominium On top of the slow adjustment on price ceilings, a new proposal of Creba to fill the gap on socialized housing—in the form of vertical socialized housing projects, or what it calls the socialized medium-rise residential buildings (MRBs)—has also been stalled.

While the HUDCC and the Neda approved the price-ceiling adjustment on house and house and lots, they did not recognize condominiums as alternative means of compliance to the balancedhousing requirement, citing the limited wording of Urban Development and Housing Act of 1992, known as Republic Act (RA) 7279.

As such, they deferred putting a price ceiling on the MRBs since they have been found to be outside the coverage of RA 7279.

The proposal for MRBs was put forward to address what Cariño said was the problem of informal settlers finding the current sites of socialized housing as too far from their workplace. Creba proposes that MRBs will only be located in urban areas to place the lower-income populace closer to their work.

This has been pushed by Creba as an alternative means of compliance to the 20-percent requirement under the balanced-housing provision and, thus, an expansion of the socialized housing coverage in RA 7279.

The proposed scheme, however, must be coupled with the relaxation of the 20-percent requirement for the socialized condominiums.

Demolition Meanwhile, the group Demolition Watch said demolition of illegal settlers’ houses in the country always ends up in violence.

The group said violent demolition runs counter to the commitment of the Philippine government to respect and fulfill the rights of its people, as enshrined in the International Covenant on Economic, Social and Cultural Rights and the International Covenant on Civil and Political Rights.

“The government should refrain from conducting evictions and demolitions and all forms of inhumane treatment. Instead, it should implement programs that uplift the lives of the people,” the group said.

Demolition Watch is an initiative and

network of various community-based organizations, sectors including women, youth, professionals and the church, individuals and personalities deeply concerned with the massive dislocation of families in Metro Manila due to the ongoing and impending implementation of the government’s privatization and infrastructure projects.

Moreover, according to Benitez, people resist demolition because they were not given an alternative and acceptable solution. “In other words, demolition become bloody when there is no acceptable alternative for them, which should be provided by the government,” he said.

Benitez also said it is a wrong policy to remove informal settlers in the site.

“These people [informal settlers] are actually part and parcel of the city development, or the cities’ urbanization…it is a wrong policy to move them out of the city. A right engineering solution will solve the problem,” he said.

Benitez said most of the informal setters are living in danger areas because the government has no clear policy and did not provide land for them.

“Nobody wants to live in slum areas, let’s give them a chance to get out from their predicament . . .[but] right now we’re not doing anything to arrest the problem,” he added.

Benitez said they are looking at institutionalizing on-site and in-city resettlements only.

“We do not believe that the first option should be relocation. The informal settlers are in the Metro precisely because their jobs are here. We should account for additional costs to them such as transportation,” he said. To be continued

Economy

A4 Tuesday, June 2, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

briefs bcda calls for entries for clark green city housing design The state-owned Bases Conversion and Development Authority (BCDA) is calling for entries for international housing design competition for its Clark Green City project.

The BCDA said architects, engineers, interior designers, social scientists, financial experts and urban planners can join the Building Accessible and Liveable Ecologies (BALE) competition in which $40,000 awaits for the winning design.

“The design competition will involve the design of a prototype community for a diverse-income community; the design of a community that encourages a sustainable lifestyle; the incorporation of international best practices in the design; the provision of an economically feasible model for a diverse-income housing development; and the creation of a positive place branding for the housing development,” the BCDA said.

The BALE competition will be a two-stage process.

The BCDA will accept all registered entries in the first stage of the competition. From all entries received, the BCDA will choose designs that will proceed to the final stage.

“Short-listed participants will receive $3,000 and shall submit further refinements for the final stage of the competition,” the BCDA said. PNA

BusinessMirror

North-South Railway Project gets to a slow start

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By Lorenz S. Marasigan

he government failed to launch the procurement process of the multibillion-peso commuter rail system that will replace the dilapidated Philippine National Railways (PNR).

The Department of Transportation and Communications (DOTC) earlier said it plans to begin tendering the P287-billion North-South Railway Project in May. Sought for comment, Transportation Spokesman Michael Arthur

C. Sagcal simply said the agency is aiming to publish the invitation to bid this week.

“It should be published within the week,” he said.

The first phase of the facility will involve the construction of a

36.7-kilometer narrow gauge elevated commuter railway from Malolos, Bulacan, to Tutuban in Manila. It is seen to be completed by the third quarter of 2020.

The second phase, which will extend the commuter rail up to Matnog, Sorsogon, will be completed by the forth quarter of 2019.

The two-phase deal will be implemented under the official development assistance and Public-Private Partnership (PPP) Program.

The dilapidated PNR is expected to resume its operations sometime this month to abate the worsening traffic in Metro Manila. The oldest at-grade railway system in the Philippines

angara sees peso amendment bill to provide more job opportunities

Sen. Juan Edgardo Angara has expressed optimism that the recently approved bill seeking to expand and strengthen the government’s Public Employment Service Offices (PESO) would provide more job opportunities, especially for more than half a million new graduates.

Angara said Senate Bill (SB) 1386 seeks to create PESOs in all provinces, municipalities, cities and other strategic areas throughout the country.

“It would ensure their continued operation and sustainability through the support of the local government units and the Department of Labor and Employment,” Angara said.

According to the lawmaker from Aurora province, the Commission on Higher Education data showed that approximately 656,000 students graduated this year. ”They are now looking for jobs.

According to studies, it can take 18 months to two years before new college graduates can land a job,” said Angara, sponsor and coauthor of SB1386, which seeks to amend the Public Employment Service Act of 1999. PNA

stopped its operations last month, after one of its coaches derailed near Nichols Station in Pasay in April, resulting in the injury of more than 50 passengers.

Earlier, Diosdado N. Silva, the train line’s assistant general manager, explained that the service were halted so that the government can conduct an exhaustive inspection of its train tracks to ensure the safety of its passengers and trains.

A team from Cologne-based technical and safety provider TÜV Rheinland Group is now conducting the review of the railway line’s state.

The investigation is expected to

yield a precise inventory of missing or needed parts such as rail joints, angle bars, and rail clips—which will then be procured and installed in order to allow the PNR to resume its operations as soon as possible. Prior to the incident, the railway system had been servicing the TutubanCalamba route daily.

Underinvestment, train expert Rene S. Santiago earlier told the BusinessMirror ultimately caused the poor state of the railway system.

At present, the PNR commuter line operates from Tutuban to Santa Rosa, Laguna, covering 23 stations over a stretch of 50 km, and from Naga to Sipocot with route length of 35 km.

2M children won’t make it to school this year–solon

By Jovee Marie N. dela Cruz

A

senator wants stiffer antifencing penalties

Sen. Miriam Defensor-Santiago on Sunday announced that she is pushing for a bill imposing strict penalties against persons who steal public transportation vehicles or related fixtures.

Santiago’s bills come amid the arrest of three persons suspected of stealing rail joints, angle bars, and rail clips of the Philippine National Railway (PNR) track near Taguig City.

The missing parts were blamed for a recent derailment that hurt some 50 passengers.

Under the bill, dubbed as the Public Transport Preservation Bill, penalties for robbery will be one degree higher than that prescribed in the present law if the crime involves pilferage of public transportation vehicles, spare parts, safety devices, fixtures, or equipment.

Santiago said that the bill will amend the Penal Code (Act 3815), and the Anti-Fencing of Government Property Bill, which will amend the Anti-Fencing Law (Presidential Decree 1612).

If enacted, the Anti-Fencing of Government Property Bill will also increase penalties one degree higher than that prescribed in the present law for any person found guilty of buying or selling public transportrelated items obtained through theft or robbery. PNA

news@businessmirror.com.ph

Dressed in complete uniform, with school bag at her back, this little girl displays the usual first day of school jitters while approaching the gate of the Commonwealth Elementary School in Quezon City with her mother during the opening of classes on Monday. PNA

Petilla: PHL still not ready for nuclear power

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INGAYEN, Pangasinan—The operation of the mothballed Bataan Nuclear Power Plant (BNPP) and the putting up of a similar one in any part of the country is next to impossible considering the mind-set of the Filipino people.

This in essence, is the opinion of Energy Secretary Carlos Jericho L. Petilla in reaction to the report that former Pangasinan Fifth District Rep. Mark Cojuangco, who is eyeing to run for governor of the province, has not abandoned his earlier call for the operation of the BNPP. There was also a report that in order to prove that a nuclear plant is safe, he is willing to let one nuclear plant built next to his house in Sison, Pangasinan.

Interviewed by newsmen here after gracing the general assembly of member-consumers of the Central Pangasinan Electric Cooperative (Cenpelco) on Saturday, Petilla revealed that to put up just a coal-fired power plant, one needs more than 100 signatures, and much more if it is a nuclear-power plant.

He stressed that the Department of Energy (DOE) is “energy-neutral,” which means that it adopts whatever source of energy that is acceptable to the people but which is also cheap and is good for the country, and will get no subsidy from the government.

“If it [power source] is good for the country and is cheap, we will go for it,” he said.

But when it comes to nuclear plant, it is not only the Department of Energy that will sign its approval but also the Department of Environment and Natural Resources, the local governor, the mayor and even the barangay captain where the project will be built. If the area is populated by indigenous people, one have to get their ascent individually, he added.

Petilla said the other question on the issue of nuclear plant is that the Philippines, it seems, is not ready for this new technology because in this country, before one can drive a post to the ground and build that project, a case has already been filed against it before the Supreme Court.

But since a few people are persistent on having a nuclear plant, they should ask the House and the Senate to call a referendum on this issue so that in case the “yes” vote will prevail, nobody will question this anymore before the Supreme Court.

At the same time, he maintained his previous computation that in case the BNPP will be allowed and it will be operated by Manila Electric Co., the consumer can only get a saving of 30 centavos per kilowatt-hour.

He said if the consumer wants to

get as much as P1.50 per kWh, then there should be more nuclear power plant that would have to be built across the country.

Cojuangco earlier said he will prove in the debate that Filipinos will get substantial savings if the country will put up nuclear plants.

“So that there will be no trouble anymore and that the Supreme Court will not intervene, somebody should call Congress to put the issue to a referendum,” Petilla dared.

He admitted though that nuclear plant is Cojuangco’s passion but admitted that when they saw each other, he (Cojuangco) somewhat softened by saying he may probably go to that direction (seek referendum on the issue).

But the energy secretary said that as to the question if a nuclear plant is safe, he pointed out : “It is really relatively safe, but just one accident that may happen, the damage that it may cause will be difficult to recoup.”

He also asked that nuclear experts be allowed to handle the nuclear plant as nobody, perhaps in this country, is capable of doing it today.

He also stressed the need to put up a nuclear regulatory body that will regulate the operation of the plant, insinuating that the Philippines is not yet ready to adopt nuclear technology at this stage. PNA

LAWMAKER on Monday said that over 2 million children aged between 5 and 15 will not be going to school as the new school year began on Monday.

ACT Teachers Rep. Antonio Tinio said that based on enrollment figures provided by the Department of Education (DepEd), around 570,000 5 year olds would not be able to enroll in kindergarten; over 838,000 in elementary; and over 1.1 million in high school.

“While over 23 million children will be trooping to schools at kindergarten, elementary and secondary levels…around 2.3 million children will be left behind, deprived of their fundamental right to education,” Tinio said.

“These appalling numbers point to the failure of the administration to fulfill its basic constitutional mandate to provide basic education to all Filipinos…[showing] that the vaunted interventions in so-called poverty alleviation, such as the multibillionpeso Conditional-Cash Transfer Program have not been effective in enabling the poorest families to send their children to school,” Tinio added.

The children most likely to be out of school, Tinio said, come from the poorest families in the poorest and most underdeveloped areas in the country.

“President Aquino and the Department of Education cannot claim success in any so-called education reforms for as long as one child in 10 is not able to go to school,” he said.

Tinio also reiterated his call for the suspension of the K to 12 Program.

Protest

MEANWHILE, youth groups led by Anakbayan, League of Filipino Students (LFS) and National Union of Students of the Philippines, and organizations under the STOP K to 12 Alliance met the opening of classes with protests against the K to 12 Program and tuition and other school fees increases.

The organizations held protest actions and signature campaigns in Batasan National High School, Ramon Magsaysay High School-España and Manila Science High School.

The groups, quoting the DepEd figures, said that only 3,839 of the 7,976, or only 48 percent, of public high schools have been submitted for K to 12 funding and construction.

Vencer Crisostomo, Anakbayan national chairman, said, “While the DepEd is ensuring the profits of private schools, there are a million students that will either be forced to enroll in private schools and be made to pay higher tuition rates or drop out.”

The groups also protested the approval of tuition increases in more than 300 schools in the country, hiking the country’s tertiary tuition rate to as much as P80,000 to P100,000 per year.

The LFS, for its part, reiterated its calls to junk the K to 12 Program and stop tuition and other fees increases.

The LFS also challenged President Aquino to a public debate on K to 12 implementation.

The student group earlier posed the challenge in May, saying President Aquino and DepEd Secretary Bro. Armin A. Luistro, FSC, had been peddling “a lot of lies” regarding K to 12.

“Aquino and Luistro have been telling one lie after another regarding K to12. These two have also been taking a swipe against groups opposing the program. But when faced with valid arguments and compelling data against K to12, they resort to nothing but sweet talk and using God’s name in vain,” LFS National Spokesman Charisse Bañez said.

“Even without K to 12, the government’s budget allocation for education could not even address the severe lack of classrooms, teachers, textbooks and other basic needs. Government budget for education is not ‘world class or globally competitive,’” the youth leader added.

The current education budget stands at 2.8 percent of our gross domestic product, while United Nations Educational, Scientific and Cultural Organization recommends 6 percent of GDP. The LFS also insisted that the DepEd has not addressed shortages and is only grappling to address 2010 backlogs, saying classroom shortages remain at 209,539, 60 million for textbooks, and 2.5 million for sanitation and water facilities. “We also lack 114,304 teachers, using a teacherstudent ratio of 1:30,” she said.

“Aquino and Luistro do not have the right to speak of being ‘world class or globally competitive.’ They have been concealing their failure to address shortages using a classroom/teacherstudent ratio of 1:45, which is not at par with ‘global standards,’” Bañez added.

He added that the implementation of K to 12 is only a burden to Filipino families.

Group calls for transparency in mining projects’ approval

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he Alyansa Tigil Mina (ATM) on Monday called for transparency in the conduct of public consultations for mining projects to address concerns raised by communities who are at risk of possible mining disasters.

Jaybee Garganera, national coordinator of ATM issued the call as he assailed the Department of Environment and Natural Resources- Environmental Management Bureau (DENR-EMB) for keeping would-be affected communities of the potential adverse impact of mining projects.

He said communities are entitled to know what risks they are exposed to in case a min-

ing firm commences commercial operations in particular area.

According to Garganera, the DENR also divulge to the public documents such as environmental impact assessment or environmental impact assessment reports (EIA) submitted by mining companies to the DENR. “At this time, we were expecting the DENR and its different bureaus to be transparent and not keep from us the public documents such as EIA reports. These are relevant documents that will give a glimpse of how the mining activities will impact the environment and

the people in general, and how the mining company intends to mitigate these negative impacts,” Garganera said.

Documents such as an EIA, he added, will give the people vital information or knowledge about a proposed project and to decide whether to allow mining in their locality.

“Unfortunately, these scheme of not properly informing the people reflects the lack of responsibility and accountability of the EMB and the DENR to its constituents—the public,” Garganera said.

He issued the statement after participants walked out in protest during a public forum on

mining conducted by the DENR-EMB in Punta Malabrigo, Lobo, Batangas on May 21.

The hearing was set to discuss the EIA reports for two large-scale mining projects in Lobo. While the people were invited to the hearing, Garganera said they were not given full access to the EIAs reports submitted by the mining companies.

Fr. Dakila Ramos, of the Archdiocesan Ministry for Environment (AMEN), said they walked out because of the lack of transparency of the government agency and the mining company.

Mines and Geosciences Bureau (MGB) documents indicate that two permits for gold and

copper mines exploration has been issued to an Egerton Gold Philippines Inc. in 2002 covering a total of almost 1,175 hectares.

“Any public hearing needs full transparency, how could we have transparency in this hearing if we the stakeholders are not given the copy environmental impact statement [EIS] prepared by the mining company. We only have the executive summary that has no details of their EIA. This public hearing should be declared void. We need the full copy of EIS for us to study it and then we are ready to face them in a public hearing,” Lipa Archbishop Ramon Arguelles says.

Economy BusinessMirror

news@businessmirror.com.ph

House panel OKs Malampaya Fund spending for power infra rehab, repair

By Jovee Marie N. dela Cruz

T

he House Committee on Energy on Monday approved a measure authorizing the use of the Malampaya Fund to finance the rehabilitation or replacement of energy infrastructure damaged, or in danger of being damaged, by natural and man-made calamities.

House Committee on Energy Chairman and Liberal Party (LP) Rep. Reynaldo V. Umali of Oriental Mindoro said members of the panel have unanimously approved the substitute bill that seeks to amend Presidential Decree (PD) 910.

Currently, several measures seek to amend PD 910 governing the use of Special Funds, including the accumulated royalties from the Malampaya gas-to-power facility.

Under the measure, the Malampaya Fund may be used to finance the rehabilitation or replacement of energy infrastructure, including but not limited to, generation, transmission and distribution facilities in preparation for and response to natural and man-made calamities.

It also said that the Energy Development Board, which is composed of officials from departments of Finance, Energy, and Trade and Industry, is required to submit an annual report to the Joint Congressional Power Commission and the President detailing the fund releases used to finance the repair and replacement of energy infrastructure damaged by calamities.

According to the data of the committee, the Malampaya Fund is now at P167.2 billion as of March 2015.

The bill also aims to electrify or energize all barangays in the country.

The Malampaya Fund was created by President Ferdinand Marcos through PD 910 in 1976, “for energy self-sufficiency” following the oil crisis due to the Middle East war.

Meanwhile, authors of the substitute bill include Reps. Winston T. Castelo (Quezon City, Liberal Party), Ben P. Evardone (Samar, LP), Neri J. Colmenares (Bayan Muna), Luzviminda C. Ilagan (Gabriela), Francisco Ashley L. Acedillo, Gary C. Alejano (Magdalo), Rufus B. Rodriguez (Cagayan de Oro), Maximo B. Rodriguez Jr. (Abante Mindanao), Edgardo R. Masongsong (1-CARE), Antonio L. Tinio (Act Teachers), Emmi A. de Jesus (Gabriela), Fernando L. Hicap (Anakpawis), Terry L. Ridon (Kabataan), Carlos Isagani T. Zarate (Bayan Muna), Mercedes C. Cagas (Davao del Sur, Nacionalista Party), Napoleon S. Dy (Isabela, Nationalist People’s Coalition), Lani Mercado-Revilla (Cavite, Lakas), Aleta C. Suarez (Quezon, Lakas), Michael Angelo C. Rivera (1-CARE), Rodel M. Batocabe (Ako Bicol), Emil L. Ong (Samar, National Unity Party), Alfredo B. Benitez (Negros Occidental, LP), Gustavo S. Tambunting (Parañaque, United Nationalist Alliance), Reynaldo V. Umali (Oriental Mindoro, LP) and Jesus N. Sacdalan (North Cotabato, LP).

Tuesday, June 2, 2015 A5

Palace lets DOF handle probe vs new Customs chief

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By Butch Fernandez & Joel R. San Juan

alacañang left it up to the Department of Finance (DOF) to probe Bureau of Customs (BOC) Commissioner Alberto D. Lina’s move voiding a P650million contract earlier awarded to a competitor of the Lina-owned E-Konek to set up a modern integrated customs processing system and a National Single Window seen as indispensable to the country’s participation in the Asean economic integration.

Communications Secretary Herminio B. Coloma Jr. said on Monday the Office of the President has yet to get hold of documents detailing the role of Lina, if any, in rescinding the multimillion-peso contract that the BOC chief’s firm failed to

win in the initial bidding.

“We have no info on that,” Coloma told the BusinessMirror when asked if the Palace was mounting an independent inquiry into the matter.

The secretary indicated, however, that Malacañang is not rul-

ing anything out at this point and was relying on the DOF to validate the information first.

“If verified, the DOF is supervising department, we will await word from them on this,” Coloma added.

Lawyer Harry Roque, counsel of winning bidder Omniprime Marketing Inc.-Intrasoft International Inc. joint venture, raised issues of “conflict of interest” against Lina for annuling the P650-million contract that Lina’s company, E-Konek, lost in the earlier BOC bidding.

Roque protested that the Customs chief’s action canceling the awarded contract by his predecessor “reeks of the foul smell of a clear conflict of interest.”

He noted that Lina owns 96.48percent stake in E-Konek which was one of five losing bidders in the BOC project.

Roque recalled that the P650million project was awarded to the Omniprime-Intrasoft joint venture on April 13, 2015, and the BOC contract was set to be signed be the end of that month but Lina was appointed to replace Commissioner John Sevilla as BOC chief on April 24.

The lawyer added that two weeks after assuming the post, Lina junked the initial bidding results and subsequently notified the Department of Budget and Management (DBM) it was voiding the contract earlier awarded to the joint venture.

Plunder

AT a news briefing, Omniprime President Annabelle Margaroli, Atty. Roque said his client is considering the filing of plunder charges against Lina for causing injury to Omniprime and for entering into a government contract with private interest.

Roque further said Omniprime will seek redress before the trial court to stop Lina’s decision to cancel the contract, which he said has been successfully bidded out by the DBM. Roque claimed that “one of the five losing bidders in the project, EKonek, is a company where Lina has a 96.48-percent stake.”

The lawyer said the issue of conflict of interest against Lina is further bolstered by the fact that “the corporation behind the cur-

rent antiquated systems used by the Bureau of Customs—Webb Fontaine—has beneficial business relations with E-Konek.”

“We will not hesitate to file the necessary criminal, civil and administrative cases against anyone—including Lina himself— found to be violating our client’s constitutionally vested property rights,” the lawyer said.

“On April 13 the DBM issued in favor of Omniprime a notice of highest rated bid through a letter of invitation wherein our client was invited to immediately start negotiation on the contract provisions right after the opening of the financial documents.”

The contract negotiation was finalized since April 23, 2015 and that Omniprime was just awaiting the final contract being prepared by the DBM-Procurement Service (DBP-PS) for signing before the end of the month.

But Roque said what took months for the DBM-PS to conduct the entire bidding process for the project only took Lina two weeks from his assumption as BOC head to cancel.

Scammers target bank employees, officials

By Bianca Cuaresma

T

Until the next downpour A worker of DM Consunji Inc., the company that refurbished the Ninoy Aquino

International Airport Terminal 1 at a cost of P1.6 billion, spreads a new layer of water-proofing materials at the building’s roof after a weekend downpour inundated the lower floors of the building, including the East and West departure areas, and the Duty Free shops. Passengers and concessionaires had to used umbrellas to protect themselves from water pouring out of the ceiling. Recto Mercene

Daang Hari-Slex project 96% complete–PPP Center data

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By Lorenz S. Marasigan

he P2.2-billion expressway that aims to connect Muntinlupa and Cavite is nearing completion, according to data from the Public-Private Partnership (PPP) Center.

The Muntinlupa-Cavite Expressway, previously known as the Daang Hari-South Luzon Expressway (Slex) Link Road, is set to open this month, and is now 96-percent complete as of May 25. It is, however, three months behind its March 2015 target.

The delay was “attributed to on-site challenges, which resulted in the redesign of certain portions of the access tunnels leading to the Slex.”

While the construction completion is targeted for June, commercial operations will only start once the Department of Public Works and Highways and the Toll Regulatory Board issue the substantial completion and the toll operation certificates.

The toll rate for the thoroughfare is at P17 for Class One vehicles (cars and jeepneys, including taxis, vans and pickups) and P34 for Class Two vehicles (buses and small trucks).

The four-lane road, expected to relieve traffic congestion along the Daang Hari Road and Commerce Avenue, is expected

briefs shell to cut pump prices of gasoline, diesel and kerosene on tuesday Pilipinas Shell Petroleum Corp. (PSPC) will cut pump prices of gasoline by 60 centavos per liter and diesel by 50 centavos per liter effective on Tuesday morning.

Shell would also rollback its kerosene prices by 60 centavos per liter.

All price movements will take effect at 12:01 a.m. of June 2. According to the Department of Energy’s (DOE) oil monitor, the current prevailing price of diesel per liter around Metro Manila is P31.40, while gasoline per liter costs P46.05.

However, other service stations could offer diesel prices from P29.35 to P32.70 per liter, with gasoline also playing between P41.85 and P47.20. PNA

aquino orders fire inspection of 300,000 metro establishments

President Aquino on Monday ordered a thorough inspection of over 300,000 business establishments in Metro Manila to ensure full

to generate traffic of at least 50,000 vehicles per day.

The Daang Hari-Slex project was the first PPP project auctioned off and awarded under the flagship infrastructure program of the Aquino administration. The project starts from the junction of Daang Reyna and Daang Hari in Las Piñas/Bacoor in Cavite to the Slex, through the Susana Heights Interchange in Muntinlupa, traversing the New Bilibid Prison Reservation.

Under the initial design, the proposed link road will use the Susana Heights Interchange as exit and entry from north and south of the Slex and will include the construction of a new bridge/widening of the existing bridge crossing the Slex, as well as the expansion of the Susana Heights toll plaza.

Ayala Corp. bagged the 30-year concession contract in 2011.

The project is being implemented by the public works agency under a build-transfer-operate scheme.

The country’s oldest conglomerate has so far spent P9 billion for three key infrastructure deals: the P2.2-billion Daang Hari-Slex Connector Road or the Muntinlupa-Cavite Expressway, the P1.72-billion Automated Fare Collection System and the P64.9-billion Light Rail Transit Line 1 Cavite Extension.

compliance with fire-safety measures in the wake of a deadly fire that killed 72 workers in a factory blaze in Valenzuela City last month.

Mr. Aquino issued the directive in the aftermath of the May 13 Kentex factory fire, and after fire probers cited various fire-safety violations that need to be promptly corrected to avert another tragedy.

“So, lumabas maraming mga violations itong Fire Code,” President Aquino told reporters. “For instance, iyong ’pag meron kang empleyadong 40 pataas, kailangan automatic may fire sprinkler system...72 po iyong patay dito maliwanag na lagpas 40.” Butch Fernandez

mmda rejects suspension of number coding when mrt 3 breaks down

The Metropolitan Manila Development Authority (MMDA) on Monday opposed the proposal suspending the number-coding scheme for public utility buses whenever the Metro Rail Transit Line 3 (MRT 3) breaks down.

During a House Committee on Metro Manila Development hearing, MMDA General Manager Corazon Jimenez said that suspending the number-coding scheme for buses will only worsen the traffic congestion at Edsa. At least 225,000 vehicles pass through along the 26-kilometer Edsa stretch every day. Jovee Marie N. dela Cruz

he Bangko Sentral ng Pilipinas (BSP) bared yet another text-scam scheme on Monday, warning the public to be more cautious of scammers who use short message service (SMS) to solicit money allegedly involving an official from the central bank.

In a memorandum signed by BSP Deputy Governor for the Supervision and Examination Sector Nestor Espenilla Jr., the central bank said scammers now address their so-called solicitations to employees and officers of financial institutions nationwide.

“As part of the modus operandi, the scammer poses as a BSP official and, through text messages, invokes a ‘personal favor’ from BSPsupervised financial institutions [BSFIs] or their officers to sponsor a cash prize for fictitious events [e.g., golf tournament, etc.] allegedly supported by the BSP official, or sponsored by the BSP,” the central bank said.

As such, in view of the latest text scam, the BSP

warned the public that the BSP strictly enforces its Code of Conduct among its personnel to “act with integrity and utmost professionalism at all times.”

“Consistent with the highest standards of ethics and conduct, the BSP implements a ‘No Gift Policy’ whereby BSP personnel are prohibited from soliciting, accepting or receiving, directly or indirectly, any gift, favor or anything of value, from any person, bank or institution, which is registered, licensed, accredited, regulated or examined and supervised by the BSP, including from their officers and employees, or from any interested person, even on the occasion of family celebrations, local or national festivities, such as Christmas, or appreciation of any service rendered,” the BSP said.

The BSP also called on people who receive such messages to report and inform the central bank of incidences.

“Reports of similar incidents should be addressed to the Financial Consumer Protection Department, Supervision and Examination Sector, 5th Floor, Multi-Storey Building, BSP complex, Malate, Manila,” the BSP said.

A6 Tuesday, June 2, 2015

Opinion BusinessMirror

editorial

Dept of Information and Communications Technology

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HE magazine Electronics celebrated its 35th anniversary in 1965 with predictions about the future. Gordon Moore, the cofounder of Intel Corp., forecast that the number of transistors on an integrated circuit would double every year for at least a decade. In 1975 he revised that prediction to doubling every 18 months.

The remarkable thing is that the trend of the exponential increase in computing power has lasted, not a decade, but for 50 years. The Cray-2 supercomputer from 1985, the fastest machine in the world for its time and costing $17 million, roughly measures up to an iPad 2 in “thinking” power.

Unfortunately, the government’s response to the technological age has not kept pace with the technological advancements.

The predecessor to our current the Department of Transportation and Communications (DOTC) was the secretary of public welfare, which held the portfolio for transportation and communications. This position was established about the same time, as the forerunner to the modern computer, the Analytical Engine, was designed in the late 1800s. Back then, transportation was horse-drawn and the telephone had only recently been made available and the telegraph was the primary means of sending messages over long distances.

It is time to bring the structure and bureaucracy of the DOTC out of the 19th century and into the 21st century with the creation of the Department of Information and Communications Technology (DICT).

The government has been talking about establishing this department for many years, even as technology has dramatically changed and the government has struggled to keep laws and regulations update with those changes.

It appears that this new department will finally become a reality. Sen. Ralph Recto has vowed to pass legislation that would create the DICT. Recto, who chairs the Senate’s Science and Technology panel, has authored Senate Bill 2686, consolidating five other bills, to create the DICT. As a result, the DOTC will concentrate on transportation, which is a huge job as it is, and leaving information and communications, another huge task, to the DICT. The fact that it has taken so long for the DICT to come to light, especially in view of the fact that 80 percent of global governments already have a separate department for these concerns, does not say much about legislative priorities.

A major problem of our government is that it is terribly disorganized. Currently, information-technology matters fall under not only the DOTC but also the Department of Science and Technology and the National Telecommunications Commission.

We would hope that those in the government and, particularly the existing bureaucracy do not try to keep things as they are. Both the horse-drawn carriage and the telegraph are obsolete as is our current structure.

Solving the puzzle: Labor shortage amid unemployment Manny B. Villar

THE Entrepreneur

Conclusion

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AST week this paper published a report about Japaneseowned Epson Precision Philippines’s ongoing expansion plan in Lipa, Batangas, estimated to cost P4.7 billion. When completed in 2017, the project will add 6,000 to 8,000 workers to Epson’s current work force of 12,000.

The report quoted a company official as saying Epson has no plan to expand its factory in China because of the drastic increase in wages there, compared to the Philippines, where labor cost is stable and competitive.

Epson’s expansion project confirms previous reports attributed to a study by ANZ Bank, which said manufacturing companies were moving out of China and transferring to Southeast Asian countries, including the Philippines.

The study cited cost-effective production as the main strength of the Philippines, together with Thailand, Vietnam and Indonesia.

ANZ Bank, according to a Bloomberg report, believes that “Southeast Asia will take up China’s mantle of the ‘world’s factory’ over the next 10 to 15 years.”

This is a huge opportunity to sustain the revival of the industrial sector, which will also boost employment. As the World Bank said, “things are looking good for the Philippines.” In its latest East Asia and Pacific report, the World Bank placed the Philippines in the ranks of high-growth economies in the region.

World Bank lead economist Rogier van den Brink said in a briefing that, while many countries in the Asia Pacific were facing aging populations, “the Philippines is facing a young work force, which finds itself in a highly advantageous region.

So it’s one of those elements why we are saying things are looking good for the Philippines going forward.”

Some people may say that the optimism about the bright prospects of the Philippines has been dampened by the government’s report on the performance of the economy in the first quarter of 2015. The report showed the gross domestic product (GDP) grew by 5.2 percent, the slowest quarterly growth since 2012, compared with 5.6 percent in the same quarter last year and 6.6 percent in the fourth quarter of 2014.

The government’s economic managers admitted that the slowdown was due to the slower-than-programmed spending on public construction, which was also the reason GDP for the whole of 2014 grew by just 6.1 percent, compared with 7.2 percent in 2013. Government data show that government expenditures,

particularly on construction, in the first quarter of 2015 were 13 percent below the P582.2-billion target.

As it did in 2014, when it fuelled growth in spite of government underspending, the private sector took up the slack in the first quarter of 2015.

Economic Planning Secretary Arsenio M. Balisacan said growth in the private sector in the first three months of 2015 “remains robust.”

In the first three months of 2015, public construction shrank by 24.6 percent, a reversal from the 17.5-percent growth a year ago, according to the National Statistics and Coordination Board (NSCB). On the other hand, private construction increased by 14.2 percent in the first quarter of 2015, a turnaround from the 5.1-percent contraction in the same period last year.

The economic managers have given assurance that the underspending issue would be addressed, and that public spending would be accelerated in the remainder of the year, to meet the GDP growth target of 7 percent to 8 percent.

I don’t think the disappointing performance of the economy would discourage the private sector, including domestic industries, from pushing through with expansion plans to take advantage of the country’s increasing competitiveness.

Our fundamental strengths, like the young population, remain intact. Oil prices remain low, which translates to lower cost of production. Remittances continue to grow in spite of conflicts in some host countries for overseas Filipino workers.

The business-process outsourcing industry continues to attract investors, and the real-estate boom is nowhere near its end. We are still among the fastestgrowing economies in Asia Pacific, but that should not lull as into complacency.

In recent quarters, the Philippines was the fastest among the major economies

They are coming for your money John Mangun

T

OUTSIDE THE BOX

HE first prototype automatic teller machine (ATM) was put in service by Barclays Bank in north London in 1967. It allowed withdrawals by inserting a human-teller generated paper check, which the machine could read and then dispense the funds.

The first fully functional “modern” ATM came into use in 1972. I remember opening an account at a bank just because they had an ATM. An ATM is really nothing more than a substitute for keeping your cash in a box under your bed but with more safety and security—theoretically.

The US just recorded negative growth for the first quarter of 2015. No matter all the excuses that government can make, it shows that economy is not growing. Since the US economy supposedly came out of its global financial crisis recession, there have been three negative growth quarters. This has not happened in the more than 60 years since World War II. You cannot have a sustained growing economy when you have periods of no-growth.

Europe is facing a broad economic disaster as Greece prepares to default on its debt. Last

month Greece had to borrow money from the International Monetary Fund (IMF) to make a payment on the debt it owes to the IMF. Try asking your bank for a loan to pay the monthly amortization on the loan they gave you to buy your new car. That’s what Greece just got and they want more.

An official Greek default will spread chaos through Europe. For example, Greece owes Austria an amount equal to 3 percent of Austria’s annual gross domestic product (GDP). Germany is owed 3.3 percent of its GDP. For the other nations, it is France, 3.2 percent; Spain, 4 percent; and Italy, 4.4 percent. For a comparison, the total Philippine government budget for 2015 is 1.8 percent of our GDP. The US Supreme Court just ruled that the government has the right to seize private pension and retirement funds if they “underperform.”

The government created a zero-interest rate environment that makes saving money with even a small profit almost impossible without high risk. But if a pension fund does not make a profit, the government can take the money.

The European Union and Switzerland have signed an accord that will end banking secrecy for EU residents. Switzerland must report an EU resident’s deposits in that country as the US is requiring for all banks—including here in the Philippines—for its citizens and current or former residents.

The Western governments are desperate for all the cash they can confiscate any way possible from their citizens. But there is also another reason.

People tend to get very upset when government creates dismal economic conditions.

The American Revolution started because of oppressive taxation and the French revolution came during an economic crisis. Germany’s Hitler and Nazism was a result of hyperinflation.

The Edsa Revolution in the Philippines did not come with the execution of Ninoy Aquino in 1983 but after the total GDP fell 20 percent by 1985. Estimates are that it takes one armed government agent to control 5 to 10 unarmed citizens. Only a few places like North Korea have those kinds of numbers.

But one government agent sitting at a computer can control an entire nation.

When conditions become severe or people are under great financial stress, they want their cash in that box under their bed. As banks were

of the Association of Southeast Asian Nations and second only to China in Asia.

In the first quarter of 2015, however, the Philippines fell behind Vietnam, which grew by 6.03 percent, and Malaysia, which grew by 5.6 percent. China remains the leader, with a GDP growth rate of 7 percent.

Notwithstanding the first-quarter performance, I believe a full-year growth of 5 percent to 6 percent is a given, based on our strong fundamentals and the robust performance of the private sector. However, the government must accelerate spending, particularly on infrastructure, to achieve its target of 7 percent to 8 percent.

More important, the government must lead in solving the mismatch problem between employees and employers, mindful of the fact that domestic industries also compete with foreign employers who prefer to hire Filipino engineers, architects, accountants, industrial technicians and other skilled workers.

At worst, the economy may see a downturn in the next few years, but construction will continue because of the many projects that are going on and on the drawing boards. The Public-Private Partnership Program is not yet in full swing because only a few projects have been awarded, and fewer have reached the construction stage, so that’s another area where we can expect a construction boom.

As I’ve said over and over, we have a huge opportunity not only to sustain a fast-paced growth, but also to generate jobs for our people, which should lead to the decline, if not elimination, of poverty. There’s a Filipino word for missed opportunity, which we should not allow to happen: Sayang.

For comments, e-mail mbv.secretariat@gmail.com or visit www.mannyvillar.com.ph.

being subject to mass withdrawals, the Greek government limited the amount of cash in the ATMs. France has already reduced by two-thirds the amount of cash that can be used outside of the electronic systems. Spain has frozen all accounts with troubled Banco Madrid, including access to safe deposit boxes.

Could this happen in the Philippines? Of course, but the problem here is that people hold enormous amount so physical cash outside of the electronic system.

The government is changing the money once again and all “old” currency must be exchanged by the end of 2016 or become worthless. The government says the “New Generation” banknotes will have enhanced security features to protect the public from counterfeit currencies. It is also a reminder that government can declare your cash worthless at any time that it desires. And if you happen to show up at your bank with several million in “old currency,” do not be surprised if you get a call from the Bureau of Internal Revenue.

Remember how upset and helpless the feeling is if the ATM is down or out of cash? Governments could turn off an entire nation’s ATM system with a push of a button and take all the money anytime they wish and make any excuse from terrorism to natural disaster.

E-mail me at mangun@gmailcom. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Hedge fund activists are Japan’s best friend

Food security and family farms Edgardo J. Angara

William Pesek

BLOOMBERG VIEW

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apan has New York hedge fund manager Daniel Loeb to thank for its biggest stock market surge since 1988. Investors have been taking inspiration from Loeb’s surprising success with the Japanese robot maker Fanuc.

When Loeb bought a stake in the notoriously opaque company earlier this year and started demanding changes, few in corporate Japan believed he would get anywhere. It’s not just that Fanuc was known for its insularity; foreign activist investors had a long history of failure when dealing with corporate Japan.

So when Fanuc President Yoshiharu Inaba started heeding Loeb’s demands—inviting journalists to the company’s campus near Mt. Fuji, opening a shareholder relations department and doubling the percentage of profit the company pays out to shareholders—other foreign investors took note. They began flocking to the Nikkei stock exchange in hopes of getting at the trillions of dollars sitting on Japan’s corporate balance sheets. (It’s estimated that executives are hoarding cash that amounts to half the country’s annual $4.9 trillion of output.)

But the stock surge doesn’t represent a broader vote of confidence in Prime Minister Shinzo Abe’s economic program—nor should it.

Abe has failed to carry out the bold structural reforms—lowered trade barriers, less red tape for startups and loosened labor markets—that he promised would enliven growth and boost corporate profits. Investors are aware that Japan’s latest economic data isn’t very good: Household spending is weak (down 1.3 percent in April), 340,000 people have given up on the labor market and inflation is back at zero.

But, if Abe is wise, he will leverage the uptick in foreign investment to reignite his reform program. After all, Japan’s new foreign investors are a demanding and vocal crowd, and their goals are broadly in alignment with Abe’s. “They tend to speak out in ways that locals won’t, adding to the pressure on management to change,” says Jesper Koll, former head of research at JPMorgan Chase & Co. and adviser to Japan’s government. “That’s something to be supported in the current environment, not silenced.”

Abe has already started leading a charge for more stringent corporate governance standards. Last year, Tokyo implemented a stewardship code urging investors to shame underperforming CEOs and introduced an index of 400 Japanese companies doing a good job of providing returns on investment. Last week, Abe unveiled a code of conduct for executives along with requests that

The good news is that some companies are starting to display the behavior Abe wants, and for which Loeb has been agitating.

In the past year, Japan’s companies doled out record amounts of cash to investors—$104 billion in the 12 months ended in March. The bad news is that the sluggish pace of Abe’s reforms threatens to dampen the trend. companies increase the number of outside directors.

But Chicago money manager David Herro (with $35 billion in assets) says that for all Abe’s efforts, Japan remains 30 years behind its peers in how its companies are run. Corporate Japan still indulges in cross-shareholdings and permits itself maledominated boards, and the country’s timid media does little to hold it to account. “Japan has gone from zero to two,” Herro told Bloomberg News last week. “It’s improving. But we need to get to eight, nine or 10.”

Recent scandals at Takata (deadly airbags) and Toshiba (dodgy accounting), and Sharp’s ongoing angling for a government rescue when it should be shedding unprofitable businesses, are a reminder of how far Japan still needs to go.

The good news is that some companies are starting to display the behavior Abe wants, and for which Loeb has been agitating. In the past year, Japan’s companies doled out record amounts of cash to investors—$104 billion in the 12 months ended in March. The bad news is that the sluggish pace of Abe’s reforms threatens to dampen the trend.

Abe has hoped that by weakening the yen by 30 percent, he could motivate companies to share their cash with workers, boost household spending and precipitate a virtuous economic cycle. That dynamic remains as elusive as ever. But in his efforts to nudge companies to become more competitive, Abe should encourage and highlight the efforts of activist investors trying to do the same. The next time Abe visits the New York Stock Exchange, as he did in 2013, he might even consider chartering a plane to bring more market agitators back to Tokyo.

Let’s end chronic hunger

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By Jomo Kwame Sundaram | InterPres News Service

OME—At the 1996 World Food Summit (WFS), heads of government and the international community committed to reducing the number of hungry people in the world by half. Five years later, the Millennium Development Goals (MDGs) lowered this level of ambition by only seeking to halve the proportion of the hungry.

The latest State of World Food Insecurity report for 2015 by the Romebased Food and Agriculture Organization, World Food Programme and International Fund for Agricultural Development estimates almost 795 million people—one in nine people worldwide—remain chronically hungry.

The number of undernourished people—those regularly unable to consume enough food for an active and healthy life—in the world has thus only declined by slightly over a fifth from the 1.0106

billion estimated for 1991 to 929.6 million in 2001, 820.7 million in 2011 and 794.6 million in 2014.

With the number of chronically hungry people in developing countries declining from 990.7 million in 1991 to 779.9 million in 2014, their share in developing countries has declined by 44.4 percent, from 23.4 to 12.9 percent over the 23 years, but still short of the 11.7- percent target.

Thus, the MDG1c target of halving the chronically undernourished’s

Tuesday, June 2, 2015

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N the past 25 years, the world achieved great strides toward reducing hunger and undernourishment.

The Food and Agriculture Organization’s (FAO) 2015 State of Food Insecurity in the World (Sofi) showed that there are 216 million fewer undernourished people—those unable to acquire enough food to meet their daily minimum dietary requirements over one year—throughout the world today compared to 1990. This is notwithstanding the 1.9-billion increase in the world population observed in the same period.

The Philippines contributed to these positive results, being among 79 out of 129 nations who reached one sub-target (MDG1c) under the Millennium Development Goals and halved the proportion of their undernourished populations.

A recent Social Weather Stations survey echoes this, reporting that hunger incidence—the percentage of respondents who claimed they experienced having nothing to eat at least once in the past three months— was at the lowest we have seen in the last 10 years.

However, we did not reach the World Food Summit’s goal of halving the number of hungry—or chronically undernourished—people.

Where 16.7 million Filipinos were without adequate food in 1990, that number dropped only to 13.7 million by 2014. In the same period, the number of hungry people in Thailand fell from 19.8 million to 5.0 million, while the drop was 32.1 million to 10.3 million in Vietnam.

The irony is that those who produce food—farmers, fishermen and other agricultural workers—are

more likely to be among the hungry, given they are also among the most vulnerable and impoverished.

To be fair, this reality is not limited to the Philippines as nearly threequarters of the 795 million hungry people in the world today live in rural areas and are dependent on agriculture for livelihood.

There are 570 million farms globally and up to 90 percent of them are reliant on individual families for labor. Eighty-four percent of such family farms are no bigger than 2 hectares, yet such small plots of land are responsible for nearly 70 percent of the world’s agricultural production.

The 2015 Sofi report notes that higher agricultural labor productivity (a logarithm of agricultural value added per agricultural worker) is generally associated with less prevalent undernourishment.

The report continues to say that growing family farming and smallholder agriculture improves general welfare by making food more available and by increasing farmer incomes. This could be achieved through credit assistance, crop insurance, market access, agricultural extension, subsidies and perhaps even direct government procurement

A7

from small farmers. Simply, making family farms more productive remains a key poverty- and hungerreduction strategy.

In fact, noted journalist Joe Studwell pins Philippine underdevelopment in part to its failure to make smallholder farms (which he calls garden farms) efficient, productive and competitive.

In his 2013 book, How Asia Works, Studwell noted that our vast sugar plantations produced an average 56 tons per hectare, compared to the 85 to 90 tons per hectare once produced in Taiwan, which he championed as one of the region’s exemplars in family farming.

He cited 2009 FAO data that showed the Philippines having average per hectare yields of 3.8 tons and 2.6 tons for rice and corn, respectively, compared to Taiwan’s 4.8 tons and 3.8 tons.

As of 2014, up to 5.7 million farms in the Philippines are familyowned and operated, with many of them still engaged in subsistence farming. Such family farms ought to be supported, given their frontline role in resolving hunger in the Philippines.

E-mail: angara.ed@gmail.com.

Did government peace negotiators commit treason?

Ernesto M. Hilario

ABOUT TOWN

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AST week two party-list lawmakers filed a complaint for treason and inciting to sedition before the Manila Prosecutor’s Office against officials and members of the government peace panel and the Moro Islamic Liberation Front (MILF) for pushing the passage of the Bangsamoro basic law (BBL).

The complaint filed by Reps. Jonathan de la Cruz (Abakada party-list) and Lito Atienza (Buhay party-list) named 23 individuals, including Presidential Adviser on the Peace Process Teresita Deles, the government’s chief negotiator Miriam Coronel-Ferrer, Supreme Court Associate Justice Marvic Leonen and MILF counterpart Mohagher Iqbal.

Leonen was the government chief negotiator with the MILF prior to his appointment to the high court.

The lawmakers said the respondents should be held liable for signing the Framework Agreement on the Bangsamoro and in proposing the BBL, which “effectively aided the MILF armed forces to successfully assert their existence as a separate and independent state.”

According to de la Cruz and Atienza, the political entity sought to be created under the BBL is “neither a province, city, municipality, nor a barangay and, therefore, not recognized by the Philippine Constitution.”

“If passed into law, the BBL will bind the entire Philippine government to recognize the Bangsamoro

entity and it’s ‘asymmetric relationship’ with the Philippine government,” the complaint read.

The complainants said the BBL “effectively espouses the view that the Bangsamoro is entitled to independence” and, therefore, its framers committed the crime of inciting to sedition under the Revised Penal Code.

“It [BBL] also encourages armed groups in Muslim Mindanao to eventually rise publicly and tumultuously in order to prevent the government of the Philippines from freely exercising its functions in its sovereign territory,” the complaint added.

The complainants said the term “Basic Law” is “understood in the international law to mean a constitution or highest rule of law of a state with its own constitution.”

They said the terms “right to self-determination” and “right to self-governance” on their overall understanding “violate the sovereignty of the Republic of the Philippines.”

“The CAB [Comprehensive Agreement on Bangsamoro], the Framework Agreement, and the proposed BBL use the word ‘Bangsamoro,’

share of the world’s population by the end of 2015 is unlikely to be met at the current rate of progress. However, meeting the target is still possible, with sufficient, immediate, additional effort to accelerate progress, especially in countries which have showed little progress thus far.

are likely to do so by the end of 2015.

Instead of halving the number of hungry in developing regions by 476 million, this number was only reduced by 221 million, just under half the earlier, more ambitious WFS goal. Nevertheless, some 29 countries succeeded in at least halving the number of hungry.

This is significant as this shows that achieving and sustaining rapid progress in reducing hunger is feasible.

Marked differences in undernourishment persist across the regions.

There have been significant reductions in both the share and number of undernourished in most countries in Southeast Asia, East Asia, Central Asia, Latin America and the Caribbean—where the MDG target of halving the hunger rate has been reached.

While sub-Saharan Africa has the highest share of the chronically hungry, almost one in four, South Asia

Progress uneven OVERALL progress has been highly uneven. All but 15 million of the world’s hungry live in developing countries.

Some countries and regions have seen only slow progress in reducing hunger, while the absolute number of hungry has even increased in several cases. By the end of 2014, 72 of the 129 developing countries monitored had reached the MDG 1c target—to either reduce the share of hungry people by half, or keep the share of the chronically undernourished under 5 percent. Several more

which literally translates to ‘Moro state’ instead of ‘autonomous region,’ which is a lesser political or territorial unit prescribed by the Constitution,” the complaint stated. De la Cruz and Atienza also questioned that parliamentary form of government in the future Bangsamoro region since it “is distinct from the presidential form of government” of the country.

Will this complaint proper in court? Let’s wait and see.

(De la Cruz, by the way, wrote a weekly column for this paper before he was elected as congressman representing Abakada, one of the party-list groups whose advocacy is teachers’ rights and welfare.)

Mao must be turning in his grave

LAST week also saw Republic of China (Taiwan) President Ma Ying-jeou proposing what he described as the “South China Sea Peace Initiative.”

Speaking before an international law gathering in Taipei, Ma called on all concerned parties to work together to settle disputes peacefully.

“We provide a pragmatic and forward-looking course of action, before a major conflict breaks out,” Ma said.

“Whether in the Taiwan Strait, East China Sea, or South China Sea , our approach is the same—to resolve disputes through peaceful means.”

The initiative urges all parties concerned to exercise restraint in the South China Sea, observe relevant international law, including the United Nation Charter and United Nations Convention on the Law of the Sea, and settle disputes peacefully.

The peace initiative also urges all parties to jointly guarantee freedom of navigation and overflight; ensure that all important actors are includ-

has the highest number, with over half a billion undernourished. West Asia alone has seen an actual rise in the share of the hungry compared to 1991, while progress in sub-Saharan Africa, South Asia and Oceania has not been sufficient to meet the MDG hunger target by 2015.

Efforts need to be stepped up Despite the shortfall in achieving the MDG1c target and the failure to get near the WFS goal of halving the number of hungry, world leaders are likely to commit to eliminating hunger and poverty by 2030 when they announce the post2015 Sustainable Development Goals at the United Nations last September.

To be sure, there is enough food produced to feed everyone in the world.

However, hundreds of millions of people do not have the means to access enough food to meet their dietary energy needs,

ed in measures, such as a maritime cooperation mechanism or code of conduct; shelve sovereignty disputes and cooperate on the development of resources; and establish coordination mechanisms for nontraditional security issues such as scientific research, environmental protection, humanitarian assistance and disaster relief. The principle that sovereignty cannot be divided, but resources can be shared, will allow sovereignty disputes to be shelved while development proceeds jointly.

This spirit, embodied in Ma’s earlier East China Sea Peace Initiative, allowed Taiwan and Japan to overcome long-standing disagreements to sign a fisheries agreement in April 2013, and also contributed to the eventual peaceful resolution with the Philippines of the Guang Da Xing No. 28 incident of the same year, in which a Taiwanese fisherman was shot and killed.

The Philippine government has consistently pursued peaceful means in resolving the territorial dispute in the South China Sea. It is China that has been aggressive and shown that it is ready to use force to assert its claim to virtually the entire South China Sea. The Taiwanese proposal should, therefore, be primarily directed at China, not to the other claimants.

Mao Zedong, an anti-imperialist leader in his time, probably did not imagine that one day, China itself would become an imperialist country. But that is what it is today. Mao must not only be turning but even spinning in his grave over this unfortunate turn of events in this part of the world.

E-mail: ernhil@yahoo.com.

let alone what is needed for diverse diets to avoid “hidden hunger” by meeting their micronutrient requirements.

With high levels of deprivation, unemployment and underemployment likely to prevail in the world in the foreseeable future, poverty and hunger are unlikely to be overcome by 2030 without universally establishing a social protection floor for all. Such efforts will also need to provide the means for sustainable livelihoods and resilience.

The Second International Conference of Nutrition in Rome last November articulated commitments and proposals for accelerated progress to overcome undernutrition. Improvements in nutrition will require sustained and integrated efforts involving complementary policies, including improving health conditions, food systems, social protection, hygiene, water supply and education.

2nd Front Page BusinessMirror

A8 Tuesday, June 2, 2015

www.businessmirror.com.ph

BBL seen pushing Bangsamoro growth to 12.8%

T

By Cai U. Ordinario

he national government estimates that once the Bangsamoro basic law (BBL) is passed and fully implemented, the Bangsamoro economy will be able to post a growth of up to 12.8 percent, starting next year.

National Economic and Development Authority (Neda) Regional Office 11 Director Maria Lourdes D. Lim said that under the Bangsamoro Development Plan (BDP), the Bangsamoro economy is expected to grow by 9.7 percent in 2015 and 12.8 percent in 2016.

This trajectory is very far from the average annual growth of 2.7 percent between 2009 and 2013.

It is also higher than the 6.3-percent average gross domestic product (GDP) growth nationwide from 2009 to 2013.

“The plan is expected to push the regional economy to achieve double-digit growth rates in the first five years of the creation of the Bangsamoro, with gross regional domestic product per capita rising to P38,000 to P40,000, from the current P29,608. This will further narrow the regional disparities between the Bangsamoro and the rest of Mindanao regions,” Lim said in a DevPlus publication released by the Neda on Monday.

The BDP also stated that, in terms of production sectors, the government targets a growth of 3 percent to 4 percent in the agriculture sector, 6 percent to 6.2 percent in industry; and 5 percent to 7 percent in services by 2016.

The plan also stated that the

poverty-incidence rate is expected to decline to 50 percent to 52 percent by 2016. The baseline for the Autonomous Region in Muslim Mindanao (ARMM) is at 55.8 percent and the nationwide average is 25.2 percent in 2012.

In terms of employment rate, the government also expects an increase to 95 percent to 96 percent. This is higher than the average of 95.4 percent for the region and the national baseline of 92.9 percent in 2013.

Underemployment, on the other hand, is expected to decline to 11 percent to 12 percent by next year.

The ARMM’s baseline is 12.4 percent, while the national baseline is 19.3 percent as of 2013.

Earlier, Economic Planning Secretary and Neda Director General Arsenio M. Balisacan and Asian Development Bank (ADB) Philippines Country Director Richard Bolt said growth and investment in Mindanao are bound to increase because of the BBL.

Balisacan said Mindanao could maximize its potential as a major economic growth driver for the Philippines. He even said Mindanao can easily grow faster than Metro Manila if this potential is reached.

ADB Philippines Country Specialist Joven Balbosa also explained that, currently, Mindanao contributes about 17 percent of the country’s GDP. However, this is bound to increase if areas in Southern Mindanao will increase their contribution.

Balbosa explained that Northern Mindanao areas, such as Davao and General Santos, already contribute significantly to economic growth due to the tuna, banana and pineapple industries.

The peace agreement will ensure that Southern Mindanao will also unleash its potentials, boosting production of food and mineral resources. It will also open the gates for the Philippines to take full advantage of the Brunei DarussalamIndonesia-Malaysia-Philippines Eastern Asean Growth Area.

Oil halts advance as Saudis pump at record level before Opec meet

B

rent oil snapped a two-day advance as Saudi Arabia maintained crude output at a record in May before the Organization of Petroleum-Exporting Countries (Opec) meets this week to discuss its production policy.

Futures slid as much as 0.8 percent in London, after rising 4.8 percent on Friday. Saudi Arabia pumped 10.25 million barrels a day, unchanged from April and the most in a monthly Bloomberg survey going back to 1989. The Opec will probably maintain its collective quota at 30 million barrels a day when it meets on June 5 in Vienna, according to a separate survey last month.

Oil’s recovery from a six-year low in January is stalling amid speculation a global glut will persist. Opec, which pumps 40 percent of the world’s crude, is seen sticking with its strat-

Auto industry. . . parts-manufacturing investments and allow the local production of at least 600,000 vehicles.

The $600 million will be sourced from the national budget. According to Trade Undersecretary and Board of Investments (BOI) Managing Head Adrian S. Cristobal Jr., the amount can still be added in the 2016 national budget as deliberations in Congress for the new budget bill have yet to start.

The CARS Program, an initiative of the Department of Trade and Industry (DTI) through the BOI, calls for the grant of fiscal and nonfiscal incentives to the automotive industry to entice manufacturers to initiate more operations in the country.

Chamber of Automotive Manufacturers of the Philippines Inc. President Rommel Gutierrez, in a previous interview, said the cost gap in producing a vehicle in the Philippines versus producing in other countries, such as Thailand, stands at $1,000 to $1,800, making the country, a less attractive destination for manufacturers.

With a set of time-bound and

RFI bill. . .

egy of favoring market share over supporting prices, while US supply remains near a record.

“Production is going to have to come down to prevent oil prices falling away,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “Not only is Saudi Arabian output steady, but we also saw US production flicking up again. That’s why we’re constrained on the upside.”

Brent for July settlement fell as much as 53 cents to $65.03 a barrel on the London-based ICE Futures Europe exchange and was at $65.17 at 1:13 p.m., Singapore time. The European benchmark crude traded at a premium of $5.31 to West Texas Intermediate, the US marker grade.

WTI for July delivery declined as much as 56 cents, or 0.9 percent, to $59.74 a barrel in electronic trading on the New York Mercantile Ex-

change. The contract gained 4.5 percent to $60.30 on Friday. The volume of all futures traded was about 42 percent below the 100-day average.

Opec output increased 67,000 barrels to 31.579 million a day in May, according to the survey of oil companies, producers and analysts. Production from Iraq, the second biggest of the group’s 12 members, accelerated by 197,000 barrels a day to a record 3.87 million, the survey shows.

Representatives of Opec’s Economic Commission Board, which reviews the market before ministers meet in Vienna, confirmed the group’s prior outlook for 2015, projecting that the need for its crude will rise in the second half, said two delegates who asked not to be identified because the talks are private.

Bloomberg News

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performance-based incentives in place, the country hopes to attract new investments in the production of parts currently not available in the Philippines, including large car body panels, bumpers, instrument panels, head lamps, shock absorbers, plastic fuel tanks, automotive fabric and others.

The technology “spillover” will help develop basic support industries for manufacturing, such as casting, forging, machining, and tool and die.

The program is part of the BOI’s broader stroke to revive the country’s manufacturing industry.

Nissan Philippines Inc. President Antonio Zara and Isuzu Philippines Marketing Head Joseph Bautista deferred comment on the Malacañang-approved CARS Program until they have seen the document.

Earlier, the DTI said to qualify for incentives, auto firms must meet an annual production goal of 40,000 units of a particular model.

T he approva l is a t imely achievement for the Aquino administration, as it is set to embark on a trade and security mission to

Japan today. Domingo and other trade officials are expected to meet with auto brands’ principals during the visit.

Japanese automakers have been waiting for three years for the CARS Program. They have put their investment plans in the Philippines on hold as it was then unclear what kind of government support they will get through the CARS Program.

The Philippines has been a laggard in the Asean in terms of auto production, the Asean Automotive Federation reported. The Philippines’s local production stood at 88,845 motor vehicles in 2014, compared to 1.88 million in Thailand; 1.3 million in Indonesia and 596,418 in Malaysia.

“After thorough study, extensive stakeholder consultations and interagency coordination, the government’s CARS Program will be implemented with the signing of the executive order [EO],” Cristobal said.

The EO operationalizing the CARS Program is expected to be published in newspapers of general circulation in the next few days.

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revenue leakage. House Ways and Means Committee Chairman Rep. Romero S. Quimbo of Marikina agreed that the RFI bill would unlikely move in Congress, saying they are now focusing on the

Timta, as well as other economic measures pending.

The DTI had repeatedly assured last year that it is nearing agreement with the DOF on the RFI bill.

An initial consolidated bill was

crafted early this year. The DOF and the DTI agreed that the income tax holiday would just be replaced by a 15-percent reduced corporate income tax for 15 years.

Catherine N. Pillas