BusinessMirror April 28, 2016

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Thursday, April 28, 2016 Vol. 11 No. 201

D.T.I. EXTENDS PUBLIC CONSULTATIONS AS B.O.I., B.I.R. ARGUE ON CONTENTIOUS ISSUES

Timta implementing rules still far from being issued February 26 A B C N. P

@c_pillas29

LREADY two months delayed, the implementing rules and regulations (IRR) of the Tax Incentives Management and Transparency Act (Timta) will have to undergo further public consultations before it is finalized due to the continuing disagreement between the Board of Investments (BOI) and the Bureau of Internal Revenue (BIR) on the information-disclosure provision.

The supposed deadline for the issuance of Timta’s IRR

Efren V. Leaño, BOI executive director, said Trade Secretary Adrian S. Cristobal Jr. saw the need to continue engaging companies and other investmentpromotion agencies (IPAs) on the Timta IRR to determine what route to take in implementing the key S “T,” A

INSIDE

NAVIGATION TIPS FROM A WILDERNESS EXPERT

LIFE

P.  |     | 7 DAYS A WEEK

Peso slide seen to continue in run-up to polls B B C

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HE local currency the peso has taken a turn for the worse relative to its peers in the region, mostly as consequence of the apprehension or sense of doom among market players, as the nation of 100 million goes into the final few weeks of the presidential races.

The local unit has steadily dropped from the average rate of 47.511 per dollar in January to 47.636 in February and 46.724 in March, and has also swung on the average from as high as 45.983 to a low of 46.84, thus far, at the PDS Group during the month.

Its nea r-ter m out look should also be anything but sanguine, according to ING Bank senior economist Joey Cuyegkeng, unless the presidential aspirants have addressed with some certainty the concerns investors have

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10THGEN CIVIC Honda’s All-New Civic, the 10th-generation Civic with completely redesigned exterior, modern and expansive cockpit with a

U.S. NO. 1, CHINA NO. 2

Sports BusinessMirror

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| THURSDAY, APRIL 28, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana

U.S. NO. 1, The United States is predicted to top the table with 42 gold and 102 overall. China will be second with 31 gold and 78 overall, which is the same 1-2 order as London four years ago. The next teams in order of gold are: Russia (22), Australia (18), Britain (17), Germany (15), Japan (12), South Korea (12), France (10) and the hostcountry, Brazil (9).

MICHAEL PHELPS could win five gold medals in Rio. AP

ADAM SCOTT, the 2013 Masters champion and No. 7 in the world, cites the busy schedule and has withdrawn in golf’s return to the Olympics this year. AP

RIO, WE HAVE A PROBLEM...

B UILDING the new golf course in Rio de Janeiro in time for the Olympics once was considered the biggest obstacle.

Now there’s a new problem facing golf—getting the stars to play it.

The perception is worse than reality. It’s not like golf won’t have its best players in Rio the first full week in August, because Jordan Spieth, Jason Day and Rory McIlroy have said they’re going, and they’re the best three players in the world.

Still, it didn’t help the sport’s pampered image when four major champions said they won’t be competing for gold, silver, bronze or even pride.

Adam Scott was the biggest name to drop out and the least surprising. The first Australian to win a green jacket, and the No. 7 player in the world, Scott has been lukewarm to the Olympics all along and has said for more than a year that it wasn’t a priority.

Louis Oosthuizen, the sweet-swinging South African and British Open champion at Saint Andrews, said he wasn’t going because of family and scheduling issues. That enabled Charl Schwartzel to move into position to play for South Africa, but only for a day. Schwartzel, the 2011 Masters champion, said he wasn’t going, either.

All are among the top 20 in the world.

The other dropout was Vijay Singh, who said the Olympics fell in a bad part of the golf schedule. That was more of a loss for Fiji, which won’t have a golfer in Rio, because it doesn’t have any other players who have earned a ranking point in the last two years. Singh is a three-time major champion, former world No. 1 and a remarkable success story. He’s also 53 and hasn’t won in nearly eight years.

It’s easy to criticize these players because it’s rare in other Olympic sports for qualified athletes to stay home.

But golf isn’t like other Olympic sports, which is why it has been 112 years since it was part of the Olympic program.

George Lyon is the last gold medalist in golf and for years nothing more than a trivia question.

Golf ticks just about every box for Olympic values and virtues, especially with its global appeal. It misses the most important box, however, when it relates to the significance of winning a medal. It’s not the pinnacle

of sport. It’s not even in the top 5 this year (with respect to The Players Championship, we’re talking about the four majors and the Ryder Cup).

Was it worth golf getting back into the Olympics?

Absolutely. It does far more good than harm.

Officials are touting how much this will grow the game by the sheer audience of the Olympics and with governments funding the sport in countries where it is seldom played.

Heroes are born in Olympic competition, and there’s no reason to believe golf—in time—will be any different.

Problems were to be expected, whether it was the format or full participation. Golf didn’t do any favors by not having a team competition, and it might have changed the minds of some players not going.

When a tight schedule is cited as a reason for not going, the officials carrying the Olympic torch for golf— mainly the Professional Golfers’ Association (PGA) Tour— share the blame.

They have produced a schedule that causes them as little disruption as possible. If the Olympics were so important, could they not have done more to space out the biggest events that mean more to the players?

Instead, golf’s two oldest championship, the US Open and the British Open, along with a World Golf Championship, are played in a five-week stretch. If that’s not bad enough, the PGA Championship in New Jersey starts 10 days after the British Open in Scotland.

And when the Olympics are over, PGA Tour players have one week before the start of the FedEx Cup playoffs, the $35-million bonanza that the PGA Tour billed as the “new era in golf” before it chased a spot on the Olympic program. That’s four big tournaments in five weeks, with the Ryder Cup right behind it.

Most other sports spend the entire Olympic year building toward that one big moment. For golf, the Olympics are plopped in the middle of big moments.

The cutoff to qualify through the world ranking is July 11, meaning someone, like Phil Mickelson, could win the British Open and PGA Championship and be shut out of Rio. Here’s another scenario: There likely will be players—Brendon de Jonge of Zimbabwe comes to mind—who risk losing their PGA Tour cards by playing the Olympics. AP

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The Associated Press

SPORTS SYRIAN refugee Ibrahim Al-Hussein (center), 27—a freestyle swimmer, basketball player and former wrestler— holds the Olympic flame as the head of Greece’s Olympic Committee, Spyros Capralos, holds his hand at the Elaionas camp that is home to about 1,500 refugees and other migrants in Athens on Tuesday. AP

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HINA, Russia and India are among 11 countries targeted by the Obama administration for leaving American producers of music, movies and other copyrighted material open to rampant piracy. The Philippines is not on the list.

The US is placing the 11 countries on a “priority watch list” that subjects them to extra scrutiny and could lead to sanctions if the US brings cases to the World Trade Organization.

Also on the list again are Algeria,

Argentina, Chile, Indonesia, Kuwait, Thailand, Ukraine and Venezuela.

“It is more important than ever to prevent foreign governments and competitors from ripping off United States innovators,” US Trade Representative Michael Froman said.

Ecuador and Pakistan were removed from the list this year. Ecuador reinstated criminal penalties for large-scale counterfeiting. Pakistan set up intellectual-property courts. AP

El Niño, pests damage ₧8.02 billion worth of crops

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IO DE JANEIRO—If the Rio de Janeiro Olympics were held today, the United States would win the most medals—and the most golds. And American swimmer Michael Phelps would collect five more gold medals and a bronze, bringing his overall total to 28 with a career gold-medal haul of 23.

Simon Gleave has been crunching the Olympic numbers for four years, putting them through a data-processing program, as the head of analysis for US-based Gracenote, a sports and entertainment data provider.

“In terms of medal-count and order, it’s going to be close to what we have,” said Gleave, who in 2012, using a less sophisticated program, predicted within four medals the results of 16 of the top 20 teams.

Gleave will issue updates again in June, July and August, just days before the August 5 opening. He expects a few minor changes, but nothing major.

Gleave is picking the US to top the table with 42 gold and 102 overall. China will be second with 31 gold and 78 overall, which is the same 1-2 order as London four years ago. The next teams in order of gold are: Russia (22), Australia (18), Britain (17), Germany (15), Japan (12), South Korea (12), France (10) and the hostcountry, Brazil (9).

“You could look at this as if these are the stories before they happen,” Gleave said in an interview with The Associated Press.

For years, Italian Luciano Barra has predicted the medal count, basing his results on world-championships results leading up to the games.

Gleave has gone several steps beyond. He tracks world championships, grand-prix events, grand slams and even some continental championships—then gives more weight to the most recent events, and the most important events.

Although Gleave has Russia placing third in the gold medal and overall standings, some Russian athletes could be banned from the games over a doping scandal.

“It’s a bit difficult to know with Russia at the moment,” Gleave said. “We don’t know the sports they are going to be competing in with all the stuff that’s been going on around Russia.”

Gleave also has Phelps down for six more medals— five gold. He’s picking him to win gold in the 100- and 200-meter butterfly and the 200-meter individual medley.

He’s had to guess on which relays Phelps will swim, but he picks him for gold in the 4x100 medley and 4x200 freestyle.

And he figures he’ll get bronze in the 4x100 freestyle.

“We are speculating to an extent on the relays,” Gleave said. “But I don’t think that it’s a wild thing to guess.”

A few other highlights from Gleave’s predictions: n American gymnast Simone Biles will win four gold medals and one silver. n Australian swimmer Emily Seebohm will win three golds and a silver. n Chinese table-tennis star Ma Long will win two golds. n American swimmer Katie Ledecky will take four gold medals. n Brazil will set a national record with 25 medals overall and nine gold, taking advantage of being the host nation. n Argentina will win only two medals, its worst performance since 1992 in Barcelona when it won only one. n Spain’s medal total will fall for the fourth straight Olympics.

The predictions are fun for fans, but they also make money.

Gleave said Gracenote sells its data to national Olympic committees, including the United States, Australia and Britain. It also sells to media clients like the American television network CBS and Canada’s CBC. “We provide them with data, and they use it in their decision-making,” Gleave said.

Gleave laughed when he was told he was taking all the suspense out of the Olympics.

“As we all know, sport doesn’t always work the way we expect it to,” he said.

host of new technologies and Honda’s first locally available VTEC turbo engine, was launched on Thursday in Makati City by (from left) Honda Cars Philippines Inc. (HCPI) Sales Division General Manager Marco Medina, Honda R&D Co. Ltd. All-New Civic Chief Engr. Hiroshi Ito and HCPI President and General Manager Toshio Kuwahara. ALYSA SALEN

B M G P

CHINA NO. 2

on the political future of the country.

“Normally the currency market is affected first in any leadership uncertainty, including the elections.

[The] peso significantly underperformed [versus] other Asian currencies last week due to local political developments,” Cuyegkeng told the BusinessMirror.

The local unit continued to show weakness on Wednesday as it closed 2 centavos lower to 46.78 per dollar from the previous day’s close of 46.76, data from the PDS Group showed.

PHL NOT ON U.S. LIST OF COUNTRIES WITH LAX COPYRIGHT PROTECTION

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HEALTH&FITNESS

CUYEGKENG: “Concerns include the path the economic promises will take and the fiscal ramifications of these promises.”

@BcuaresmaBM

@ _enren

L Niño and pest infestation destroyed a total of 565,752 metric tons (MT) valued at P8.02 billion in the first four months of the year, according to data from the Department of Agriculture (DA).

From January 1 to April 15, data from the DA showed that El Niño alone damaged 516,099 MT of crops valued at P6.35 billion. The DA said 183,201 farmers cultivating

PESO EXCHANGE RATES n US 46.8440

194,494.48 hectares of land were affected by the prolonged dry spell.

The three regions that suffered the brunt of El Niño were Region 10 in Mindanao, which recorded losses amounting to P2.46 billion; Western Visayas or Region 6, P1.97 billion; and Region 12, P737.36 million. Meanwhile, DA data also showed that farm damage due to pest infestation has reached P1.67 billion as of April 15.

Farmers have been warned by the Bureau of Plant Industry (BPI)

565,752 MT

Volume of crops destroyed

by El Niño and pests in the first four months of 2016 against the possible attack of rodents, stemborers, tungro and army worms in the second quarter of the year. Infestations of rice bug, defoliator, rice black bug and bacteria leaf blight may also occur

occasionally, the agency added.

Since February 2015, farmers have already incurred losses totaling P9.78 billion due to El Niño.

Earlier, Agriculture Secretary Proceso J. Alcala said El Niño has already damaged 233,000 MT of paddy rice. Alcala said the volume is only a fourth of projected 975,000 MT of unmilled rice that would be damaged due to the dry spell.

The DA chief attributed this to the coordination between the farmers, irrigators and the government,

as well as cloud-seeding operations in areas without irrigation and the use of hybrid-rice seeds.

For the whole of 2016, Alcala said unmilled-rice output would register flat growth, despite expectations that the weather phenomenon would cause minimal damage to the rice sector. Data from the Philippine Statistics Authority showed that the Philippines produced 18.15 million metric tons (MMT) of palay in 2015, 4.31 percent lower than the previous year’s output of 18.97 MMT.

n JAPAN 0.4209 n UK 68.3173 n HK 6.0406 n CHINA 7.2184 n SINGAPORE 34.6710 n AUSTRALIA 36.2900 n EU 52.9290 n SAUDI ARABIA 12.4954

Source: BSP (27 April 2016 )

A2 Thursday, April 28, 2016

BMReports BusinessMirror

Abu Sayyaf’s brutal image precedes that of IS group

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HE beheading of a Canadian hostage by the Abu Sayyaf in the southern Philippines turned the spotlight back on the small band of Muslim militants, whose brutal reputation precedes that of the Islamic State (IS) group, which they now idolize.

Abu Sayyaf emerged as an extremist offshoot of the decadeslong Muslim secessionist conf lict in the south and has carved its name in blood, carrying out mass kidnappings, beheadings and bombings.

Wa s h i n g t o n t u r n e d t h e southern Philippines into a key plank of its global war against terrorism following the September

Peso. . .

C  A

The total traded volume, however, moderated on Wednesday to $548 million from $882.5 million the previous day.

On the likelihood of persistent currency deterioration in the runup to the elections, Cuyegkeng told the BusinessMirror: “It is pos-

11, 2001, attacks to contain the Abu Sayyaf ’s actions, including the abductions of three American tourists from a resort that year.

One was beheaded.

A look at the major attacks by the Abu Sayyaf: ■ April 1995: Abu Say yaf f i g ht e r s s t o r m t h e m o s t l y Christian town of Ipil in the south, killing more than 50 people after

robbing banks and stores and burning the town center.

■ April 2000: Twenty one people, including European tourists, are seized from Malaysia’s Sipadan diving resort and hauled across the sea border by speedboats to jungle camps in the southernPhilippines.

All of the hostages were freed in batches in exchange for millions of dollars in ransom reportedly paid

by Libya.

■ May 2001: Twenty tourists, including three Americans, are kidnapped from the Dos Palmas resort in southwestern Palawan province, starting a yearlong hostage saga that leaves a number of captives dead, including US citizens Martin Burnham and Guillermo Sobero, who was beheaded.

■ August 2001: Ten Christian villagers of the Balobo community on southern Basilan Island are be-

headed by the militants to retaliate against a military offensive.

■ October 2002: A nail-laden bomb detonates in Zamboanga city, killing four, including an American Green Beret.

■ February 2004: A bomb on a passenger ferry in Manila Bay kills 116 in the country’s worst militant attack.

■ February 2005: Nearly simultaneous bombings in Manila and two southern cities kill eight and wound more than 100.

■ November 2015: Militants in Sulu behead a Malaysian man while the Asia-Pacific Economic Cooperation summit is under way in Manila, attended by President Obama and Malaysian Prime Minister Najib Razak.

■ April 2016: Canadian John Ridsdel, 68, is beheaded in Sulu.

Twenty two other foreign hostages remain in Abu Sayyaf custody. AP

sible unless candidates, including the front-runners, address the investors’ concerns.”

The economist said it matters to investor how the presidential derby pans out on May 9, as its outcome has economic and geopolitical significance. “Concerns include the path the economic promises will take and the fiscal ramifications of these promises,” Cuyegkeng said.

“Geopolitical concerns relate to foreign policy, [especially] relations with the US and China,” he added.

Researchers at the British lender HSBC said private consumption should remain robust and help support the country’s growth momentum no matter the generation of so-called political noise.

“There appears to be little risk to the Philippines’s economic outlook over the next year emanating

from the elections—either positive or negative. Over the short term, private consumption should remain robust due to remittance growth tracking 10 percent year-on-year in peso terms, given the available data for the first quarter of 2016,” HSBC said.

The outcome of the presidential races should not matter much on the value of the local currency, the British lender said.

Timta. . .

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economic-reform measure.

He said compliance to the newly passed Timta is still a contentious issue between the BOI and BIR. “We’re still talking about what should be reported and the DTI [Department of Trade and Industry] wants to talk to more stakeholders —the companies, and not just the other IPAs,” Leaño said.

“Basically, the BIR already has the tax information like the VAT [value-added tax], and the incometax holiday, so what else do they need from us? The information that companies should give, that’s where the contentions are,” the BOI official said.

The Department of Finance (DOF) had long sought for transparency in the grant of fiscal incentives by the country’s various IPAs through the Timta.

This, the DOF earlier contended, will clearly show the extent of the government’s fiscal exposure in granting tax perks to select industries and investment types.

The Timta mandates the registered businesses to submit a taxincentives report to their respective IPAs, which, in turn, will collate these report for submission to the BIR. The Timta was enacted into law on December 9, 2015, and became effective 15 days later. The Timta IRR was supposed to take on February 26.

The BOI, an attached agency of the DTI, supports transparency in the grant of fiscal perks. It is, however, also safeguarding the competitiveness of the companies registered with it and other IPAs, as well as the inflow of domestic and foreign investment.

news@businessmirror.com.ph The agency feared that mandating the disclosure of too much information on the operations of companies would erode their competitiveness and turn away investors.

The DOF and DTI managed to reach a compromise on several provisions that allowed the passage of the Timta into a law. However, the content of the tax-incentives report still needs to be threshed out in the IRR. The DTI already said it is against disclosing information on a percompany basis, as well as prospective investments plans, as this may jeopardize the competitiveness of firms.

According to the law, the DOF will submit to the Department of Budget and Management the following information, but only on a sectoral and industry basis (not on a company basis) for monitoring purposes: The amount of tax incentives availed of by registered business entities; The estimated claims of tax incentives immediately preceding the current year; the programmed tax incentives for the current year; and the projected tax incentives for the following year.

The DTI said projecting the tax incentives could lead to inaccurate reporting of data, as IPAs have no way of predicting how much incentives they will give in a particular year.

The department also fought against the maximum penalty of canceling the registration of businesses should they fail to comply with the electronic filing and reportorial requirements required by the BIR . This, however, became part of the law.

Leaño said they have no timeline yet on the resolution of the contentious issues in the IRR, but stressed that talks with the BIR are ongoing, and more consultations will be done with private stakeholders.

BMReports BusinessMirror

news@businessmirror.com.ph

Thursday, April 28, 2016 A3

Doctors warn IT-BPO workers vs erratic sleep, unhealthy lifestyle B M G P

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@_enren

ORLD acclaimed health experts are warning call-center agents or those who work in the business-process outsourcing (BPO) industry, against erratic sleeping patterns and unhealthy lifestyle.

Dr. Amos Pines, cofounder of the Israel Menopause Society and associate professor at the Sackler Faculty of Medicine in Tel-Aviv University, said shift working, which is usual in call centers, is considered a risk factor in occupational medicine.

“Shift working is a risk factor for many diseases—for cardiovascular diseases and also for some psychiatric diseases,” Pines said during the news briefing on the 2016 Experts’ Convergence for Health Outcomes (Echo) Summit.

He said the normal sleeping pattern (sleeping at night) is essential in restoring many functions, be it hormonal or bodily functions. For one, he said melatonin and other hormones function differently in different parts of the day, so not getting the normal sleeping pattern could have an impact on one’s health.

“If you work at night, it’s like your

whole physiology is jammed. But it’s not only about working at night.

If you don’t sleep at night and you don’t get your normal sleeping pattern, which is essential to restoring many functions, then you suffer,” the expert said.

Dr. Wilfred Fujimoto, professor emeritus of internal medicine at the University of Washington and visiting professor at Jichi Medical University-Saitama Medical Center, also said hormonal changes occur while sleeping.

“It’s true there are hormonal changes that occur at night, but some of those hormonal changes can shift when you normally work at night and sleep during the day,” he said.

However, Fujimoto said there are some evidences that people with erratic sleeping schedules have higher health risks.

“I think there’s some evidence

THE cast of international medical experts that will highlight this year’s Experts’ Convergence for Health Outcomes Summit, organized by the United Laboratories Inc., slated on Thursday at the Marriott Hotel includes (from left) Dr. Maria Caridad Purugganan, medical director of BioFemme; Dr. Wilfred Fujimoto, professor emeritus at the University of Washington; Dr. Nassir Ghaemi, professor at Tufts University and the Harvard Medical School; Dr. Amos Pines, professor at Tel-Aviv University; Dr. Bertram Pitt, professor emeritus at the University of Michigan; and Dr. Ma. Rosario Sevilla, medical director of LRI-Therapharma.

that show shift work is bad. It’s particularly bad for people who often change shifts—one week they’re working on a night shift, the next week on a day shift.”

Fujimoto said if the workers in the outsourcing industry main-

tain only one sleeping pattern (in a graveyard-shift worker’s case, being awake at night and sleeping during the day), then health risks would not be as bad.

He said this means they should not deviate from this sleeping pattern,

MSMEs should get at least 2 years of tax holiday–Villar B J M N.  C @joveemarie

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O help businesses in their preparation for the full implementation of the Asean integration in 2020, the chairman of the House Committee on Trade and Industry said the government should exempt start-up micro, small, and medium enterprises (MSMEs) from taxes.

Nacionalista Party Rep. Mark Villar of Las Piñas, the panel chairman, said the government should exempt start-up enterprises from all national and local taxes for at least the first two years of their operation to help them get organized and establish their operations and market base.

“The Asean integration is an opportunity for tremendous growth of MSMEs. In the Philippines a very small percentage goes into business, and the majority of those who oppose the idea is said to be intimidated by the lack of knowledge or skill available. While more Filipinos are now more adept to entrepreneurship, there’s still much more to do,” Villar told the BusinessMirror.

In 2007 Asean leaders adopted the Asean economic blueprint at the 13th Asean Summit in Singapore to serve as a coherent master plan guiding the establishment of the Asean Economic Community (AEC) in 2015.

The Asean economic integration seeks to establish a single market and production base with free movement of goods, services, labor and capital. The areas of cooperation include human-resources development and capacity building; recognition of professional qualifications; closer consultation on macroeconomic and financial policies; trade-

BICYCLES with different designs and made of natural bamboo and abaca are displayed at this Bambike store in Intramuros, Manila. ALYSA SALEN

financing measures; enhanced transactions through e-Asean; integrating industries across the region to promote regional sourcing; and enhancing private-sector involvement for the building of the AEC. The lawmaker, citing data from the Department of Trade and Industry (DTI), said there are 944,897 business enterprises in the country, 99.58 percent, or 940, 886, of which are MSMEs and the remaining 0.42 percent are large enterprises. The number of these small enterprises will increase if the government will exempt them from taxes, he said.

“MSMEs have helped lower poverty incidence in the last few years.

However, if we look closely into their geographical spread, the majority of the business establishments are located in urban centers. We hope to provide a solution such that rural areas are given the same kind of opportunity and information,” he said.

In the 16th Congress, Villar filed

944,897

The number of DTI-registered enterprises in the country, 99.58 percent of them MSMEs House Bill 4902 that seeks to give start-up enterprises the proper time to stand on their own.

“This economic growth and the hugely improved business climate in the Philippines encourage individuals or firms to start a business capitalizing on developing a product or service for which they believe there is a demand. Due to limited revenue or high costs, most of these small-scale operations are not sustainable in the long term without government support or without additional funding from venture capitalists,” he said.

The Start-up Business bill, now pending at the Committee on Ways and Means, provides that it is the

declared policy of the state to foster national development and promote inclusive growth by encouraging the creation of enterprises that facilitate job creation, production, innovation and trade in the country.

The bill refers to “start-up enterprises” as newly registered businesses engaged in industry, agribusiness and/or services, whether a single proprietorship, cooperative, partnership or corporation.

It provides that a start-up enterprise shall be exempt from all national and local taxes for the first two years of its operation provided that it is not an affiliate, a subsidiary, or a franchise of any existing company.

In the case of a sole proprietorship or partnership, the proprietor or the partners of the start-up enterprise shall not have any previous or other existing registered companies, partnership or businesses, the bill said.

In the case of a corporation, each stockholder of the start-up enterprise shall have at least a 5-percent share in stocks and the corporation shall have no nominal stockholders or stockholders holding the shares in trust for others. Furthermore, all stockholders of the start-up enterprise shall not have held shares of any previous or existing corporation with at least a 5-percent share therein, nor registered any former or existing sole proprietorship or partnership, the bill added.

The measure also assigns the Bureau of Internal Revenue, in coordination with the DTI and the Securities and Exchange Commission, to promulgate the necessary rules and regulations for the effective implementation of the Act not later than 30 days upon its effectivity.

Villar vowed to refile the bill should he earn another House seat in the next Congress.

even on days they don’t have work.

“When they’re off work and they suddenly go back to staying awake during the day and sleeping at night, that would probably be worse than just continuously sleeping during the day,” he said.

Meanwhile, world-renowned heart-failure expert Bertram Pitt said graveyard-shift workers should not use their stress as an excuse to practice unhealthy habits, such as eating more than normal and smoking.

Some call-center agents, because of their working schedules, tend to live unhealthy lifestyles, which means they smoke more and eat more.

The three experts—together with Dr. Nassir Ghaemi, who is a professor at the Department of Psychiatry of Tufts University School of Medicine—will share their insights on the latest trends in their areas of expertise during the Echo Summit today at Marriott Hotel in Pasay City.

Fujimoto will focus his talk on the risk of diabetes in Asians, particularly Asian-Americans, while Ghaemi will discuss depression and anxiety as risk factors for cardiovascular diseases and dementia.

Pitt will present the latest trends in the use of mineralcorticoid receptor antagonists (MRA) in the management of heart failure, as well as new drug agents that can help manage the hyperkalemia, which often accompanies the use of MRAs. Last, Pines will talk about the risk of cardiovascular diseases among menopausal women, and how the risk could be potentially reduced through hormone-replacement therapy.

Asean transport leaders meet to improve linkages W

ITH the flow of goods and ser vices within the A sean zooming past the $2.5-trillion mark, transport leaders in Southeast Asia are now in Manila to craft more ways on how to continue this upward trend to be more competitive and cohesive as an economic bloc.

Transportation Undersecretary Rene K. Limcaoco said the sector plays a crucial role in maintaining this growth trajectory that the economic giant is currently enjoying.

“Integration entails efficient, sustainable and highly effective transportation systems that will facilitate the movement of people, goods and services within and across the region,” he said.

“The transport sector plays a critical role in this endeavor.”

Currently, Asean transport leaders are in Manila to discuss the various initiatives and policy measures essential to develop and strengthen transportation infrastr ucture and linkages that will further enhance the region’s connectivity.

The Asean transport sector will also embark on new projects and programs, as it adopts the Kuala Lumpur Transport Strategic Plan 2016-2025, the successor document that outlines 30 specific goals, 78 actions and 221 milestones in the five areas of transportation, namely, air, land, maritime, transport facilitation and sustainable transport, to guide the Asean economic integration from 2016 to 2025.

Transpor tation A ssistant Secretary for Planning Sheriely-

sse R. Bonifacio said so far, the transport officials have agreed to engage in air-services talks with the United States, South Korea, Japan and China.

“And for the first time this year, Russia has been recognized as a dialogue partner,” she said.

“With the additional bilateral agreements, the Philippines can get more traffic rights in these countries.”

Bonifacio also noted the full ratification of the Asean openskies agreements on April 15.

T he open-sk ies ag reements consist of a set of multilateral agreements on liberalization of air freight and passengers services.

She emphasized that under these agreements, there will be greater regional and domestic air-transport connectivity with multiplier effect to the economy of the member-states.

“Increased connectivity has a multiplier effect. It will result to more impressive growth in the aviation industry, the tourism sector, as well as in other businesses. Thus, the full ratification of the Asean open skies is a victory not only for us in the Asean transportation sector but for the whole Asean. Its full impact will resonate and will eventually be felt across the region, benefiting the economies of the member-states,” Bonifacio said.

The Philippines will chair the 42nd Senior Transport Officials Meeting and the 22nd Asean Transport Ministers Meeting during the last quarter of the year. Lorenz S. Marasigan

BMReports BusinessMirror

A4 Thursday, April 28, 2016

news@businessmirror.com.ph

Comelec asked to go after ‘trolls’ even as Meralco assures network poll-ready

T

B J R. S J

@jrsanjuan1573  L L

@llectura

HE Commission on Elections (Comelec) should also go after social-media trolls, aside from hackers, who are responsible for disseminating wrong information that tend to undermine the country’s election process.

In an interview, Romulo Macalintal, a Comelec lawyer, said online trolls and other individuals or groups engaged in a disinformation campaign to discredit government efforts to hold peaceful and orderly elections can be charged criminally under the Omnibus Election Code.

Macalintal said the Comelec must find ways to unmask these trolls like what it is now doing to identify those responsible for hacking its database and leaking vital information about millions of voters online.

Meanwhile, the Manila Electric Co. (Meralco) said its distribution network is 96-percent prepared for the May 9 national elections.

“Overall, Meralco is ready on the distribution side for elections. We continue to coordinate with the different stakeholders like NGCP [National Grid Corp. of the Philippines] and suppliers. Right now, we are at 96-percent ready,” Meralco Spokesman Joe Zaldarriaga said.

“Our networks say we’ll be 100-percent ready a week before elections,” he said.

Meralco said it is ready to deploy 756 crews/manned vehicles to respond to any untoward incidents.

It will also tap 60 of its accredited contractors if there is a need for such.

“The Comelec and the NBI [National Bureau of Investigation] should also investigate. If the NBI managed to catch the hacker of the Comelec’s database, it might be able to identify those responsible for disseminating misinformation that undermines the elections,” Macalintal said.

These trolls, he said, could be held liable under Section 261, Article 22 of the Omnibus Election Code, which enumerates all types of election-related offenses and frauds.

Article XXII Section 261, Paragraph (z)(11) states: “Any person who, for the purpose of disrupting or obstructing the election process or causing confusion among the vot-

ers, propagates false and alarming reports or information or transmits or circulates false orders, directives or messages regarding any matter relating to the printing of official ballots, the postponement of the election, the transfer of polling place or the general conduct of the election.”

Macalintal said, if found guilty, offenders can face between one year and six years of imprisonment, and may be deprived of his or her right to vote.

Meanwhile, Macalintal also admitted Comelec officials can be held

liable for the hacking and leakage of voter information.

Macalintal said the poll body is not free from any liability despite considering itself as a “victim.”

“They have liability dahil lahat ng public officials, in the performance of their function, dapat pinangangalagaan ang property ng pamahalaan.

And these are properties of the government,” he said.

Macalintal said the Comelec should conduct its own investigation to determine how the hacking happened and who are the persons

held liable for the agency’s failure to secure its system.

“Somebody in Comelec who was negligent in the performance of his or her duty in protecting information must really answer,” Macalintal said.

The investigation, he said, should determine how high should accountability be applied.

The utility firm has inspected all 2,900 polling centers. Meralco, he said, will install poster reminders on election safety and energy conservation on these polling centers.

“We had 5,700 delivered last week to Meralco and deploying this week.

All polling centers will have posters

by May 6. We have over 200 gensets and 400 floodlights, which will come in handy just in case there are uncontrollable events like damaged posts,” Zaldariaga said.

Lastly Meralco will activate its ILP (Interruptible Load Program) in case of any emergency.

“We would like to assure the public, especially the voters, that we are ready to serve and respond to any issues or concerns. For elections, we see adequate, comfortable levels of reserves. We still encourage large customers to practice energy efficiency.

Since elections are a holiday, overall demand will be low so we do not see any problems,” Zaldarriaga said.

Meanwhile, the NGCP said it

is exerting all efforts to clear vital transmission lines critical to Mindanao’s power supply.

“The lines we want cleared are backbone lines, critical to the stability of the grid. We are committed to ensuring that transmission facilities are reliable come election day,” NGCP Spokesman Cynthia Perez-Alabanza said.

NGCP personnel could not conduct clearing operations because landowners refused their entry.

The grid operator has successfully negotiated about half of the 29 identified claimants, but there are two “seem unwilling to negotiate with us.” They were identified as Diron Aki Manala-O, who asked to be paid P6 million as against NGCP’s computation of P864,746, and Baro Mangoda, who demanded to be paid P10 million, as against a valuation of P586,875.

“Others just do not want to negotiate. We want to emphasize that the negotiation is payment of improvements, not the purchase of lands.

Most of these improvements are comprised of intentionally planted tress and built structures. These are built beneath transmission lines and around transmission towers, which are supposed to be clear of all impediments which may cause trippings.

These trees and structures should not have been there in the first place,” Alabanza said.

Our networks say we’ll be 100-percent ready a week before elections.”–Z

Not so rich anymore, Gulf Arabs enter world of cuts and strikes

A

CUSHY government job, cheap fuel, a mortgage-free home and a bit of five-star travel and luxury shopping were never too much to expect in the Gulf.

Yet, what previously was taken for granted in the oil-rich region is being replaced by something more familiar to the western world: spending cuts, taxation, a scarcity of jobs and even strikes. There’s discontentment among young populations rarely seen before as the countries come to terms with the collapse in energy prices blowing holes in budgets.

Kuwait had its first walkout by oil workers in two decades last week as 13,000 employees protested cuts to pay and benefits. Disgruntled Saudis, presented on Monday with a royal blueprint for life after oil, are complaining about the cost of water. Even in Qatar, the world’s richest country, locals were told on Tuesday their gasoline subsidies were being scrapped.

“There’s a period of austerity necessary for long-term economic stability,” said Ghanem Nuseibeh, founder of London-based consulting firm Cornerstone Global Associates. “The challenge is to balance the rate of change, while convincing the population that any pain will be part of a better future.”

Reality dawns

PEOPLE aged under 30 make up more than half of the 44 million population living in the six Gulf monarchies. While wealth has barely been dented in Qatar or the United Arab Emirates, more of them elsewhere are having to get used to a future with less abundance than that of their forebears.

In Oman marketing graduate Tumadher Allawati, 22, has completed two unpaid internships, applied for two-dozen jobs and even went for interviews at nurseries and schools.

After applying for posts in several government ministries, she was told not to bother because there’s a hiring freeze this year.

“I’m not optimistic at all,” she said. “I applied in so many places I’ve

7M vs 3M

Middle East oil-exporting countries are seen to create 7 million jobs, 3 million short of the foreseen labor-market entrants lost count and the fact no one in my graduating class has secured a permanent job is scaring me even more.”

Allawati, whose husband earns 800 Omani rials ($2,078) a month, said that after paying the rent and bills, the newlyweds are left with around $210 of disposable income.

“Everything is getting more costly and no one is willing to give you a chance,” she said.

More fragile

THERE is an unwritten agreement in the Gulf where populations agreed to delegate the running of the state to ruling families so long as there was no tax and they shared the spoils, United Arab Emirates commentator Sultan Al Qassemi wrote in February.

That’s now under threat, he said.

“The traditional Gulf social contract has never been more fragile,” he said.

At the same time, falling oil prices have made more room to cut fuel subsidies while Saudi Deputy Crown Prince Mohammed bin Salman said in a recent interview with Bloomberg that the time has come for a complete overhaul of the economic model, including the creation of the largest sovereign wealth fund in the world.

Oil’s slump could be “a blessing in disguise” to drive social change, said Kuwaiti business owner Lubna Saif Abbas, 52. It will push more Kuwaitis to become productive, ambitious and hardworking as they experience “real jobs,” she said.

“Many in government jobs are just clocking in and out and not really doing jobs that are needed by the economy,” she said. “It’s just a way for the government to pay them.”

IN this January 3, 2011, file photo, a worker cleans the road outside Khalifa sport complex in Doha, Qatar. Like other energy-rich Gulf nations, Qatar relies heavily on migrant workers drawn mainly from South Asia to build its roads, skyscrapers and stadiums. AP

Draining budgets

EVEN talking about austerity would have seemed incredible as recently as a few years ago, as Gulf sheikhdoms used their vast oil wealth to remake their region. They have built man-made islands, financial centers, airports and ports that turned the Arabian desert into a banking and travel hub and the host of soccer’s showpiece World Cup in 2022.

Money was also deployed to ward off social unrest that spread through the Middle East during the Arab Spring uprisings, some of which were funded by the Gulf.

The International Monetary Fund (IMF), forecasts a budget deficit of 12.3 percent of economic output this year for the six members of the Gulf

Cooperation Council, which is led by Saudi Arabia. Before last year, when oil prices sank 35 percent, you have to go back to the 1990s to find anything other than a surplus.

Economic growth is also slowing, and based on the latest IMF projections, governments and private businesses in Middle East oil-exporting countries would be able to create 7 million jobs, about 3 million short of the expected number of labormarket entrants.

Restless youth

RESPONSES vary between countries, but all the monarchies are aware of the dangers of discontented youth. An ASDA’A Burson-Marsteller survey of 3,500 young people in 16 Arab countries published on April

12 found that a majority wants subsidies to continue, while nearly half thought that any higher prices should apply only to expatriates.

The Saudis, who recorded a budget deficit of nearly $100 billion last year, are planning a “restructuring of subsidies,” while also developing a mechanism to provide cash to lowand middle-income Saudis who rely on them, the deputy crown prince told Bloomberg. King Salman fired the minister in charge of water after a bungled subsidy reduction led to astronomical bills.

“We don’t want to change the life of the average Saudi,” the prince said. “We want to exert pressure on wealthy people, those who use resources extensively.”

In Kuwait parliament voted to

raise utility costs for foreigners and businesses for the first time in half a century. The homes of Kuwaitis would be exempted as more people feel the squeeze, at least compared with what they were used to.

Mohamad Al Kharsan has worked for the Kuwaiti state for about seven years. Aged 32, he still lives with his parents because moving into his own home would shrink his monthly disposable income to just over 200 dinars ($663).

For many of his generation, it’s tough “making ends meet on a government job salary,” he said. “The golden years, when we used to spend the summers in Europe and most people owned two homes, instead of one, are long gone.” Bloomberg News

Asean

BusinessMirror

www.businessmirror.com.ph

Asean Single Aviation Market Asean-EU Perspective

HENRY J. SCHUMACHER

T

HE aviation industry in Asean has recorded significant growth over the past few years. The total seat capacity of Asean airlines experienced double-digit growth in the fouryear period of 2009 to 2013, and the share of low-cost carriers (LCCs) in the region increased significantly from 13.2 percent in 2003 to 57 percent in 2014.

The enhanced air connectivity has also contributed to the steady growth of the Asean tourism industry at an annual average rate of almost 10 percent in the last decade. Given the importance of this industry, all frameworks for the operationalization of Asean open skies have been completed.

Achieving open skies in the region is an important part of the bigger plan to establish an Asean Single Aviation Market (Asam) aimed to expand and deepen integration in all aspects of the aviation sector, including air-services liberalization, aviation safety and security, and air-traffic management. The specific economic issues to be addressed under the Asam Implementation Framework include ownership and control of airlines and other business entities involved in the aviation industry, liberalization of air transport ancillary services, competition laws and customer-welfare-related issues, such as consumer protection, tariffs and airport user charges.

The Asam is one of the key pillars supporting the establishment of the Asean Economic Community (AEC) via facilitating the free, efficient, safe and secure movement of people and goods within and potentially beyond Asean. In line with the goals set for the AEC, Asean member-states aspire to: n Take necessary measures toward creating an efficient and competitive air transport market characterized by open market access, thereby contributing to the economic growth, competitiveness and shared prosperity of Asean; n Move decisively toward a flexible business operating environment for the Asean air-transport industry to foster its growth and facilitate its timely response to challenges and opportunities; n Formulate consistent principles, guidelines and regulations related to activities in the Asean air-transport sector to foster fair competition and a level playing field; including business aviation and general aviation; n Enhance aviation safety, aviation security and air-traffic management through the harmonization and convergence of standards and procedures regionally; and n Further strengthen engagement with dialogue partners in the development of the Asean air-transport sector, while maintaining Asean’s centrality as the primary driving force.

Super important are the technical elements: (a) aviation safety; (b) aviation security; and (c) air-traffic management.

In this context, the Civil Aviation Authority of the Philippines (Caap) plays a very important role in realizing the objectives of Asam. The Caap was created by virtue of Republic Act 9497, otherwise known as the Civil Aviation Authority Act of 2008, as an independent regulatory body with quasi-judicial and quasi-legislative powers and possessing corporate attributes. It is attached to the Department of Transportation and Communications for the purpose of policy coordination.

The Caap is mandated to provide safe and efficient air transport and regulatory services in the Philippines with jurisdiction over the restructuring of the civil system, the promotion, development and regulation of the technical, operational, safety and aviation security functions under the civil-aviation authority.

The Philippines got several times hit by international sanctions, so in 2008 the Federal Aviation Administration (FAA) Category 2 downgrade, the 2008 Significant Safety Concern (SSC) from International Civil Aviation Organization (Icao) as well as the European Union (EU) Blacklist in 2010. After several attempts over a period of six years, finally, in 2014, the Caap was able to reestablish the Philippines on the international aviation family. The Icao, FAA and the EU lifted the sanctions and integrated the Philippines into the world aviation community again.

However, we are watching with big concern the evolving situation at the end of June 2016, when the new administration takes over. Not only are all positions declared vacant but the new administration has the right to appoint a complete new set of officers, as well as the important qualified and trained personnel (QTP), needed to conduct inspections of airlines, air operators as well as air traffic and airport facilities.

The training of a QTP as flight inspector or airworthiness inspector will take one to two years, dependent on his experience.

This means the Caap might have no QTP and no properly qualified director general, deputy and assistant director generals for a certain period and will endanger the Philippines to possible international sanctions again.

Therefore, it is of utmost urgency that the Philippine government will take action to assure that the transition in the Caap is done in such way that it will not disturb the present setup and the new administration can grow their success on the basis of the present administration.

Presently the Caap has a plan called Vision 2020 in which the Caap will move forward, but this plan needs a transition from the present to the next administration and the present Philippine government needs to create a transition regulation to transit from the present administration to the next.

An additional issue at the Caap is the brewing labor row involving its technical staff.

Editor: Max V. de Leon • Thursday, April 28, 2016 A5

Najib: Next 5 yrs uphill battle

M

ALAYSIA’S Prime Minister Najib Razak said the country faces an “uphill battle” over the next five years in its plan to become a developed nation.

Najib introduced a program in 2010 to lure private investment, improve education and add highquality jobs to propel the economy into high-income nation status by 2020, fulfilling a goal laid out by former leader Mahathir Mohamad.

Najib said on Tuesday that despite challenges he remains confident of achieving that target.

“The race for the best investments and an insatiable appetite for growth exists in most if not all countries,” the premier said in releasing an annual report on the program. “The next five years will be an uphill battle, but a battle I’m convinced can be won.”

Najib is looking to economic growth to bolster his standing with

voters—particularly ethnic Malays, the bulwark of his ruling coalition— as he faces his biggest political crisis since coming to power in 2009. Mahathir is leading a public campaign to get Najib out, amid a series of offshore probes of troubled state fund 1Malaysia Development Bhd. (1MDB) Najib has also faced questions over millions of dollars that showed up in his bank accounts before the last election in 2013. Both Najib and 1MDB have denied any wrongdoing.

‘Resilient economy’

“IT has been my stand since day one I took over as prime minister, that the government must move forward to continue building a resilient, sus-

The next five years will be an uphill battle, but a battle I’m convinced can be won.”—N

tainable and inclusive economy for the people,” Najib said separately in a speech. “Give the current government a chance and time to improve our future, to follow through on the plan that we have already put in place.”.

The reputation of the government took another hit on Tuesday when 1MDB defaulted on a $1.75-billion bond amid a dispute with Abu Dhabi’s International Petroleum Investment Co., the coguarantor of the bonds.

The default helped push the ringgit down 0.4 percent against the greenback, while Malaysia’s benchmark stock index fell 1.3 percent.

Najib has removed subsidies on fuel and sugar in recent years, and implemented a goods and services tax to help narrow a budget deficit that the country has been running since 1998. The government is on track to balance its budget by 2020 after cutting the shortfall to 3.2 percent of gross domestic product (GDP) last year, from 6.4 percent in 2009, according to the report. The deficit may be about 3.1 percent of GDP this year, he said.

“When a country like Malaysia has good fiscal discipline, our borrowing costs will be low,” Najib said. “More importantly, market confidence will continue to be at a high level, and as well as Malaysia’s credit rating.”

Gross national income per capita dropped to an estimated $10,110 last year from $10,760 in 2014 after the ringgit depreciated against the US dollar, the government said.

A nation would be considered high income if gross national income per capita meets or exceeds $12,736 in 2016, according to the World Bank.

Bloomberg News

AERIAL view of Singapore

Singapore Inc. revamping leadership amid volatile markets

S

INGAPORE’S top state investment firms are shuffling senior management to help navigate choppy global markets.

Investment firm Temasek Holdings Pte. said on Tuesday that its Americas President Boon Sim is leaving, as it appointed two new presidents in the latest management reorganization to help it navigate “challenging global times.” GIC said last week it gave Group Chief Investment Officer Lim Chow Kiat the additional title of deputy group president as part of a leadership shuffle appointing seven managers to new roles.

The changes at the top echelons at Singapore’s most prominent investment companies come amid intense market volatility, as concerns about slowing global growth coincided with uncertainty on the timing of US Federal Reserve interestrate increases. Markets around the world have swung between gains and losses in recent months, and the Shanghai Composite Index has declined 16 percent this year to rank among the worst-performing major benchmarks.

“We will look at it as a kind of review at the top levels of Singapore’s investment companies,” Song Seng Wun, an economist at CIMB Private Banking in Singapore, said. “It’s been five years of below-trend global growth and volatility in the financial markets, so the worry is this period of subnormal growth will persist for much longer than before.”

$197B

Value of Temasek’s holdings as of March 31, 2015, up 19 percent

New presidents CHIA SONG HWEE and Dilhan Pillay have been named Temasek presidents and the firm will reallocate some functions across groups to strengthen the focus and improve collaboration, it said in a statement on Tuesday. It will bring together its sector and market-investment teams under a single investment group, create a new Portfolio Strategy and Risk Group, as well as a new Sustainability and Stewardship Group.

Temasek last October 1 named Lee Theng Kiat as CEO of Temasek International, the management arm in charge of all staff other than the chief executive officer and chief financial officer. The appointment was seen as a first step in the succession planning after Temasek CEO Ho Ching took a six-month sabbatical in 2015. Lee was also made director of the investment firm’s board from April 1 this year.

Chia joined Temasek in 2011 and was previously COO at Globalfoundries. He is joint head for Singapore

as well as the investment group and portfolio management group, according to Temasek’s web site.

Pillay joined Temasek in 2010 and was previously managing partner of Singapore law firm WongPartnership Llp. He is now head of Americas and also joint head of Singapore, as well as the firm’s enterprise development group and investment group.

Advisory role

“THE changes we’re making position the organization to protect and work the Temasek portfolio, and continue to build capabilities as we grow,” Lee said in the statement on Tuesday. “In the future, we may continue to add additional capabilities to the business, as Temasek grows its investment portfolio and global footprint.

We are always looking to create new opportunities to attract talented people to Temasek.”

Sim, who was also head of Temasek’s markets group and head of its credit portfolio, according to the company’s 2015 annual review, is leaving on May 1. He will become advisory senior director and continue helping the company strengthen its network in the US, serve on some boards and advise on projects, the company said in an e-mailed statement in response to Bloomberg queries.

Sim indicated a desire to relinquish his executive positions since the end of last year for personal and family reasons, Temasek said. He was

hired in 2012 and was previously global head of mergers and acquisitions at Credit Suisse Group AG. He didn’t answer a call to his US mobile phone seeking comment.

North America and Europe made up 17 percent of Temasek’s country exposure in the 12 months to March 31, 2015, an increase from 14 percent the previous year, as the value of its holdings rose 19 percent to a record S$266 billion ($197 billion).

Singapore accounted for 28 percent and Asia ex-Singapore made up 42 percent of its geographic exposure.

Local talent

TEMASEK will also appoint Fidah Alsagoff, Michael Buchanan, Png Chin Yee and Juliet Teo as senior managing directors, it said. The appointments take effect on May 1.

There will be some changes in responsibilities among senior members of the team, the company said.

In GIC’s leadership change effective on June 1, Jeffrey Jaensubhakij will become Lim’s deputy, while remaining president of public markets.

The sovereign wealth fund also appointed five managers to the newly created roles as chief investment officers overseeing various groups.

Choo Yong Cheen will be responsible for GIC’s private-equity investments, Lee Kok Sun for real estate, Liew Tzu Mi for fixed income, Bryan Yeo for public-equity investments, and Ang Eng Seng for infrastructure.

Bloomberg News

TheBroa

Business

A6 Thursday, April 28, 2016

SEC, PSE RELATIONSHI MERGER OF BOND AN I

B VG C

@ villygc

T was a somber Christmas party for Philippine Stock Exchange (PSE) officials. No one died, and the market exhibited the optimism brought by the season. But there, indeed, was a funeral that day: for the PSE’s hopes of merging with the operator of the bond market.

In late-December last year, the Securities and Exchange Commission (SEC) wrote the PSE, essentially asking it to shut up and stop making further statements to the media on the PSE’s planned merger with the Philippine Dealing System Holdings Corp. (PDS), a company that owns the bond-exchange platform of the Philippine Dealing & Exchange Corp (PDEx).

It was the SEC’s opening salvo that hinted the market regulator would eventually reject the deal the PSE has been working on for nearly three years.

Come Easter Monday, nary a whimper of hope was heard: The SEC announced the decision it is not giving permission for the PSE to buy the PDS. That decision threw out the window all goodwill earned from the stock-exchange officials’ dealings with several firms over the past years.

These dealings began in 2013, when the PSE started inking agreements with several minority owners of the PDS to sell their holdings to the stock-exchange operator.

The whole shebang was valued at about P2.25 billion. The idea to merge the two exchange platform, hence, became germinal.

The merger was reported to receive a green light from the Department of Finance, which only recently was tasked to oversee the operations of the SEC. Over those three years, the PSE was able to convince the Bankers’ Association of the Philippines (BAP) and the Singapore Exchange to sell their respective shareholdings in the PDS. The PSE officials then moved on to other minority holders, which the PSE has little convincing effort to do, since two of the larger shareholders have already given the green light.

The premise is simple, as explained by PSE President and CEO Hans B. Sicat. According to him, the equities exchange will acquire the bonds exchange and merge the two, since many bourses in the Asean region have their equities and bond-trading platform housed in one roof.

Aside from the regional practice, the PSE’s other goal for the merger is to offer more products that can be traded in its platform, which has long been limited to equities. The PSE wanted to further deepen the country’s capital markets, which have been lagging behind the top five Southeast Asian counterparts.

Genesis

THE PSE may have successfully launched its exchange-traded fund (ETF) in December 2014, but that has been limited to just one company. Global market jitters early last year were blamed for spooking other players from participating in the ETF. An ETF is an open-end invest-

ment company that continuously issues and redeems its shares of stock in creation units in exchange for the delivery of a basket of securities representing an index. The ETF endeavors to track the performance of that index.

In the PSE’s case, the ETF created by a unit of First Metro Investment Corp. tracks the movement of the benchmark 30-company PSE index.

The ETF, however, came as a consolation following the PSE’s earlier bitter exchange with government agencies, mainly the Bureau of Internal Revenue, on the real-estate investment trust (REIT) products.

The country’s REIT law was enacted in 2009, under the Arroyo administration. The law aimed mainly to promote the development of the capital market; broaden the participation of the public in the ownership of real estate in the Philippines; and use the capital market as an instrument to help fund and develop infrastructure projects.

The law was designed to recycle real-estate assets by placing them in another REIT company in which the public can invest into by purchasing shares. The shares of the company can also be traded at the PSE. The implementing rules and regulations of the law, however, were crafted by the economic team of President Aquino. The President’s team placed stringent tax measures on the recycling of assets, souring the entire REIT program entirely.

So far, none has applied for the REIT, citing such measures, mainly taxation issues, as prohibitive.

Longevity

WHEN the PDS was incorporated in the late 1990s, it was viewed as a trading platform for the capital markets and owned by the financial community.

Other PDS subsidiaries include the Philippine Depository and Trust Corp. (PDTC), the Philippine Securities Settlement Corp. and the PDS Academy for Market Development Corp.

Sicat said that during its project life, the PDS may have made some income, but it wasn’t able to give dividends to the owners.

“The PSE is the only natural buyer for any of the stakeholders who would like to exit,” Sicat said. “In the whole period of the PDS project life, I think, it’s a project that unfortunately was not able to deliver dividends, although, operationally, they’re now making money.”

“But the question, of course, as a shareholder is how long are you going to hang on in the business,” he added.

The PSE holds 21 percent of shareholdings in the PDS. Other owners of the PDS include the BAP, at 28.9 percent; Singapore Exchange Ltd., 20 percent; Tata Consultancy Services Asia, 8 per-

cent; The Philippine American Life and General Insurance Co., 4 percent; San Miguel Corp., 4 percent; Financial Executive Institute of the Philippines, 3.1 percent; Social Security System, 1.5 percent; Investment House Association of the Philippines, 1.1 percent; and Golden Astra Capital, 0.4 percent.

“We are also the natural operator of the group, given the fact that we are the only other exchange in the country,” Sicat said. “Compared to any other potential buyer, we are the only ones who really know how to operate an exchange.”

In just a few years, trading at the bond exchange became much larger than its equities counterpart.

As the PSE’s value turnover in 2011 was less than P2 trillion, the PDS already rose to more than P4 trillion.

The PDS turnover reached as high as close to P6 trillion in 2013, went down to P4.5 trillion in 2014 and to P3.5 trillion last year. The PSE, meanwhile, was stuck at its P2-trillion level since 2013.

Conrado Bate, president and CEO of COL Financial Group Inc., said the country’s capital markets are concerned more on the issue of making the bond market much open to individual investors, rather than having the two platforms merged.

COL is one of the leading stockbrokerage firms in the Philippines that focus on individual investors.

“Make the bond market open to retail investors. That is what we want to happen, whether there is a merger or the fixed-income market continues to operate separately,” Bate said.

Scenarios

PRIOR to the SEC’s rejection, SEC Commissioner Ephyro Luis Amatong, who handled the case, told reporters the agency only needed to answer the question: “Are the Philippine capital markets better off with the two exchanges integrated, or are they better off apart?”

“To answer this question, we have to run scenarios. Among the things that are being considered, which is more favorable to capitalmarket development?” he said.

“There are advantages: lower cost, making the exchanges more efficient. If you combine them, would they be able to provide better services, if not, why would we combine them? What’s in it for us anyway?” the commissioner said.

The correspondences between the SEC and the PSE on its plan to acquire the PDS started in April 27 last year, with the stock exchange informing the regulator of its plan for the first time.

The agency replied a month later, but it already focused on its concerns on monopoly of the industry, which could be bad for the public.

There were also several questions, including on the concrete details on how the PSE plans to operate the two platforms.

Several letters went back and forth the SEC and the PSE. The latter, however, already wanted to consummate the deal the PSE forged with the stockholders of the PDS. Sicat’s team submitted its proposed business plan to the SEC on January 26. Months later, the SEC held a news conference, wherein officials said the regulator was not satisfied with the bourse’s reply on how to operate the two platforms.

Furthermore, the regulators questioned the reliability of the PSE’s own trading platform, especially after a series of trading halts last year. The SEC’s poking further tested the patience of

TRADERS talk beside a small Christmas tree at the Philippine Stock Exchange in Makati City. AP/AARON FAVILA

many PSE officials.

The SEC maintained it cannot give the PSE the go signal for a merger, as there remains the specter of monopoly.

Rules

ANY move to a monopoly is currently held in check by the Securities and Regulation Code (SRC), which placed a 20-percent limit on the ownership of exchanges and exchange controllers, such as the PDEx and the PDTC. Section 33.2 (c) states that: “Where the Exchange is organized as a stock corporation, that no person may beneficially own or control, directly or indirectly, more

than five percent (5%) of the voting rights of the Exchange and no industry or business group may beneficially own or control, directly or indirectly, more than twenty percent (20 percent) of the voting rights of the Exchange: Provided, however, that the Commission may adopt rules, regulations or issue an order, upon application, exempting an applicant from this prohibition where it finds that such ownership or control will not negatively impact on the Exchange’s ability to effectively operate in the public interest.”

With the ruling, the PSE needs to secure an “exemptive” relief from the SEC to assume 100-per-

cent ownership of the PDS, and also be exempted from the prescribed composition of the PDS board of directors under Section 33.2 (g) of the SRC. SEC Chairman Teresita J. Herbosa said the law mandates that ownership be distributed, so that no entity could dominate the others. The PSE was, in effect, asking for exemption for these provisions, Herbosa explained.

“In Supreme Court decisions and guidelines, you have to have a very, very good reason to be entitled to the exemption,” she said.

According to the SEC, during the deliberations on the SRC, legislators observed that the PSE was

aderLook HIP TURNS SOUR OVER

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www.businessmirror.com.ph | Thursday, April 28, 2016

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ND EQUITIES TRADING The PSE also did not give a commitment that it will hold on to the current fees when the merger transpired, according to the SEC. “The PSE would then be a de facto monopoly owner of all the exchanges in the country,” Herbosa said. “This would significantly reduce any incentives to lower costs or improve quality on their part.

This is a fear that the SEC takes seriously.”

The SEC also likened the proposed merger to the same deal involving the combination of Deutsche Boerse AG—Germany’s stock exchange— and the London Stock Exchange Group Plc. The two bourses gave regulators details, such as forecast financials for the combined entity, cost savings per annum per cost center, costs of the integration, undertakings for reduction of trading, clearing and information fees and undertakings not to raise these fees, among others.

The SEC claimed the PSE failed to provide them these details.

The deal involving the German and British stock exchanges is still ongoing and securing regulatory approvals.

On the other hand, the PSE’s share purchase agreement with the BAP also includes a five-year noncompete clause, another fear that the SEC raised.

“Banks are largest players in the bond market. Should the quality of PDS deteriorate or experience trading glitches, as the PSE has three times in August 2015, a very significant market player is constrained from setting up an alternative market,” the SEC said.

“Not only has the PSE not provided safeguards to mitigate the risks of a monopoly, it put up even more barriers to competition and to setting up contingencies.”

Unsurprising

controlled by a group of small brokers. Some lawmakers went as far as saying such group has a vested interest in maintaining the status quo.

With such view, the legislative body placed industry ownership limit to 20 percent and individual ownership to 5 percent.

The current structure of the PSE begs to be reviewed to confirm or debunk such view.

Other shareholders composed of both individual and companies control 49.28 percent of the PSE. Other owners include First Resources Management Corp. (11.76 percent), SMC Retirement (10.3 percent), BDO Unibank Inc. (9.09

percent), Government Service Insurance System (9.09 percent), Lucky Securities (5.34 percent) and Papa Securities Inc. (5.14 percent).

The SEC said that, for it to give its exemptive relief to the PSE, the bourse needs to provide a comprehensive information on how such consolidation will happen and what the structure will look like after the merger.

According to the proposed structure after the merger of the two platforms, the PSE will become the 100-percent owner of both the trading exchanges for the bond and the equities markets and all other subsidiaries.

What the SEC envisions in its

ownership structure is that both PSE and PDS shareholders should own the two exchanges and all other units under it.

Commitments

THE SEC claimed the PSE and PDS had only just convened a joint working group to iron out the details of the transaction and nothing more.

“They have not been able to provide the SEC with clear and detailed time-bound plans and commitments for the consolidated equity and fixed-income markets,” the agency said.

“The larger fear here is that the PSE does not appear to fully ap-

preciate the central importance of the fixed-income market in financial intermediation and does not have a concrete plan on how to develop and manage such a market going forward.”

The SEC further said the PSE also failed to convince them that there are benefits to the merger, such as lower fees to be imposed to the trading public when the two trading platforms are housed together. Currently, the PSE and PDEx use different clearing platforms.

The PSE, meanwhile, promised a marginal decrease of .001 percent in depository fees, which the SEC called as “tokenistic commitment.”

THE PSE, meanwhile, was naturally appalled with the decision of the SEC. “I would say, however, it was a bit surprising [with] the manner they have done it and maybe the process, wherein they mention everything to the press and gave us the official answer by [facsimile] three hours later,” Sicat said.

“On a personal note, I think its a bit surprising with the PowerPoint [slide presentation] or press release that they’ve started to add some adjectives or name-calling about the PSE,” Sicat said. “While they are entitled to their conclusions, it’s also quite obvious to us.”

He explained the presentation “intentionally either glossed over some of the facts or decided not to tell you [reporters] a lot of the issues.”

“As a professional who has been in the capital market for close to 30 years, I think that’s not the right way to do things.”

Herbosa, however, said the regulator’s move doesn’t necessarily mean it is closing the doors on the PSE’s plan to merge with PDS. “We could not just justify their current submission,” she said. “We will consider it [if the PSE resubmits].”

Sicat said one of their options was to appeal the SEC’s decision since their earlier deals with the owners of the PDS cannot be completed until it secures regulatory approval. The PSE may also wait for the next government to come in as it can be a fresh start for the PSE efforts to combine the two trading platforms.

He said the PSE may make a move during the third or fourth quarter of the year and wait for the dust to settle.

“The general ideology is that an exchange and a capital market

need to be full service operators.

And this is where we have a major difference in opinion, as the operating cost of an exchange is very high,” Sicat said. “Whether you have high volumes or low volumes [of trade], the operating cost remains high. The only way you can decrease that high operating cost is to have a menu of products and services.”

Sicat said the PSE may also develop its own bond-exchange platform, raising the possibility of poaching the very same companies that do business with PDS and possibly killing the very organization that it also partly owns.

“We are not afraid of competition either. But whether we go that route and say that is something we want to do will cause two or three years of difficulty for both exchanges,” Sicat said, adding that there are no legal issues that would impede them from have their own bond-exchange platform.

Repercussions

SOME camps view the SEC’s decision as having repercussions in the effort of the Philippines to connect with other exchanges in the region.

These efforts are seen in the country’s engagement with the Asean+3 Multi-Currency Bond Issuance Framework. Shortened as Ambif, this framework is an Asian Development Bank initiative that allows participants to offer local currency cross-border bonds. The Philippines want to become part of that maiden issuance.

“The acquisition [of PSE of PDS] is not a precondition for the Philippines to pursue inclusion in efforts for integration,” the SEC said, however.

The PDS has also entered into regional links and agreements with the Bond Pricing Agency of Malaysia to make available their bond pricing and information services through a link to each other’s web sites. The PDS is also active and is part of the working groups in the Ambif.

Still, the SEC maintained the PSE is failing to identify current and ongoing agreements with Asean counterparts.

The Asean+3 include the 10-member Asean countries plus Japan, South Korea and China.

Sicat, however, said cross-border equities trading is far different from the bond trading in the region.

“The SEC had been telling us to connect to the [Asean] trading link, but how can we do so when there are several constraints,” Sicat said.

“One is that the SEC requires any shares that will be sold in the Philippines to be registered locally.”

Sicat used an Internet sale through the Asean link as an example, citing a scenario wherein a Filipino wants to buy Singtel shares of Singapore.

Sicat said such sale, if consummated, under the present regulations, would be a violation of the SEC’s rules since Singtel is not registered in the Philippines.

Thailand, Singapore and Malaysia—all Asean top member-countries—have already forged a mutual recognition agreement, and buy and sell shares with one another.

“In other words, these countries are now doing mutual recognition, similar to a bilateral or multilateral agreement,” he said. “These countries have relied on their respective regulator’s counterparts.”

With the soured relationship of the two organizations that were supposed to deepen the country’s capital market, it would take more time for the Philippines to have vibrant trading floors that offer various products.

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Thursday, April 28, 2016

The World BusinessMirror

Pepper spray flies at Trump protest clash in California

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NAHEIM, California— Supporters and opponents of Donald Trump c lashed on Tuesd ay outside C it y Ha l l, a nd f ive people, i nc lu d i n g t w o l it t l e g i r l s , w e re p e p p e r - s p r ay e d b y a demonstrator during the heated confrontation, the police said.

No serious injuries and no arrests were reported in the clash, as about 50 people confronted each other in the Orange County community. Backers waving US flags and pro-Trump signs were met by opponents and a shouting match began before a City Council meeting, where an anti-Trump resolution had been proposed that the council eventually chose to take no action on.

At one point, an opponent unleashed a hand-held pepperspray device on the pro-Trump crowd. Five people, including two girls ages 8 and 11, were exposed to the eye-stinging spray, police Sgt. Daron Wyatt said. Three were treated at the scene by paramedics.

The man fled, but police were looking for him, Wyatt said.

One woman wearing a red “Make America Great Again” hat comforted the girls, whose faces were streaked with tears. The girls complained that their eyes and mouths hurt.

“I can feel it now, it’s pungent,” the woman, Lilia Zapatos, told KNBC-TV minutes after she was sprayed.

Linda Reedy of Laguna Niguel, a member of the pro-Trump group We the People Rising, pressed an ice pack to her face after being hit by the spray.

The anti-Trump group goaded her and her friends, and one man jumped on one of her friends, she said.

“I just think they’re so out of control,” Reedy told the Los Angeles Times. “I’m so sick of the anger in this country.”

The confrontation occurred before t he C it y Cou nc i l d isc ussed a resolut ion proposed by one counci lman condemni ng wh at it c a l led Tr u mp’s d iv isive rhetor ic.

T he motion said Tr ump’s rem a rk s —wh ic h h ave be en perceived as offensive to Mexican immigrants, Muslims and other groups—are contrary to Constitutional principles and don’t ref lect Anaheim’s “guiding principles of inclusiveness and kindness.”

The arguments from outside continued during the public comment period inside, but remained civil, as the meeting stretched for hours into the night. Eventually the council voted 3-2 to take no action on the resolution.

T he c l ash ca me as Tr u mp scored a f ive-state East Coast sweep on Tuesd ay to embolden his hopes of c l inching t he Republ ica n president i a l nom inat ion w it hout a bat t le at t he convent ion. AP

news@businessmirror.com.ph

Australia to close refugee camp in Papua New Guinea

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YDNEY—The fate of hundreds of asylum-seekers being held in a detention center in Papua New Guinea was in limbo on Wednesday as the country’s prime minister announced the facility would close in response to a court ruling that Australia’s detention of the men on the island-nation is illegal.

Papua New Guinea’s Prime Minister Peter O’Neill said he would immediately ask Australia to come up with alternative arrangements for the 900 asylum-seekers and refugees currently held on the Pacific nation’s Manus Island.

The decision prompted fresh questions about the future of Australia’s divisive policy of refusing to accept asylum-seekers who try to reach its shores by boat. Australia pays Papua New Guinea and Nauru to hold them in detention camps instead.

“We did not anticipate the asylum seekers to be kept as long as they have at the Manus Center,” O’Neill said in a statement.

He said that those deemed to be

900 The total number of asylumseekers and refugees currently held in a detention center in Papua New Guinea

legitimate refugees could resettle in Papua New Guinea “if they wish to be a part of our society and make a contribution to our community.”

“It is clear that several of these refugees do not want to settle in

Papua New Guinea and that is their decision,” he said.

O ’ N e i l l ’s a n n o u n c e m e n t , which gave no timeframe for the facility’s closure, follows a ruling by the nation’s Supreme Court on Tuesday that said the detention of the men at Manus was a violation of their constitutional right to personal liberty. Australian officials have been scrambling to respond to the decision, with Immigration Minister Peter Dutton saying none of the men will be resettled in Australia despite the pleas of human rights groups.

The chaos came as an Iranian refugee at Australia’s detention center on Nauru set himself on fire in an apparent protest over Australia’s strict asylum-seeker policies. Dutton said the man would be airlifted off the island for medical treatment on Wednesday night.

“He is in a very, very serious condition and his outlook is not good at all,” Dutton told reporters.

Dutton insisted the court ruling would not change Australia’s policy. Australian officials were in talks with other countries that could potentially take detainees who had been declared genuine refugees, Dutton said.

Australia already has a deal with Cambodia that allows refugees held on Nauru to settle there,

though only five people have taken up that option.

Australian Prime Minister Malcolm Turnbull said the government had no immediate plan to contend with Tuesday’s court ruling, which ordered both countries’ governments to quickly end the detention of the men held at the facility.

“We were not a party to the litigation as you know, but this is something that’s under consideration,” Turnbull told reporters in Brisbane. “I can’t provide a definitive road map from here.”

The 23-year-old Iranian refugee on Nauru set himself on fire in a protest intended to coincide with a visit to the island by representatives of the UN refugee agency, Nauru’s government said in a statement.

Self-harming incidents do happen on occasion at Australia’s immigration detention camps, with asylum-seekers cutting themselves, swallowing chemicals or sewing their mouths shut as a form of protest. But Wednesday’s incident was particularly serious.

Asked if he felt any responsibility over the apparent desperation of asylum-seekers left languishing in detention, Dutton replied: “I feel terribly for people that have been conned by people smugglers to pay thousands of dollars, believing that they were coming to Australia.” AP

Pakistani Sikhs open temple doors after 73 years, risking attacks

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ESHAWAR, Pakistan—An ar med policeman stood guard outside the 300-yearold Sikh temple, known as a gurdwara, in northwest Pakistan. He kept a watchful eye on everyone who passed him on the narrow street, looking for a suspicious gesture, or a bulge beneath the clothes that hints at a hidden gun or a bomb.

Earlier this month, the gurdwara in Peshawar’s crowded Old City opened its doors to worshippers for the first time in 73 years.

The reopening was celebrated by Pakistan’s tiny Sikh minority, but security is a constant concern.

On Friday a Sikh leader and provincial lawmaker was shot and killed outside his home in a remote area in Khyber Pukhtunkhwa province, some 140 kilometers from Peshawar. The murder of Sardar Suran Singh devastated the Sikh community and heightened their fears of militant attacks.

It also added to human-rights activists’ despair over rising violence against religious minorities in Pakistan.

“It is tragic, but this is the trend in Pakistan right now. It is increasingly intolerant,” said Zohra Yusuf, chairman of the independent Human Rights Commission of Pakistan (HRCP).

The Taliban claimed responsibility for the shooting of Sardar Suran Singh, but police disputed their claim, blaming the shooting on political rivalry and saying they had arrested the culprit. There was no response from the Taliban, who often make unsubstantiated claims.

Peshawar is a deeply conservative city at the foot of the mountainous Khyber Pass—once a popular route for traders and tourists travelling to nearby Afghanistan, now the focus of an extremist insurgency. Militants have attacked Peshawar schools, killing children as they studied, bombed buses of government workers and attacked Christians in their churches.

The newly-opened gurdwara has a 24-hour Sikh Security detail, as well as police guards, but their Muslim neighbors believe an attack is inevitable.

IN this April 25 photo, a Pakistani policeman stands guard outside the 300-yearold gurdwara, or place of worship, for Pakistan’s Sikh minority, in Peshawar.

While Sikhs celebrated the opening of their gurdwara, its neighbors, all of whom are Muslim, told The Associated Press that they either didn’t want them there or were worried that an attack by militants was certain to happen. AP

“Security is very necessary for the people who want to come here for prayers without any fear,” said Gurpal Singh, security chief for Peshawar’s Sikh community.

Gohar Iqbal, a bookseller who works at a busy stall opposite the temple was certain the building would be targeted by militants.

“We are worrying because of the children if something happens,” he said, gesturing to the white cement building that houses a girls’ high school, which abuts the gurdwara.

Few in this overwhelmingly Muslim neighborhood welcomed the gurdwara’s opening. Apart from

the security risks, many simply don’t want Sikhs in their midst.

The Sikhs that lived in the area and attended the gurdwara left when it closed in the 1940s.

It is not known how many Sikhs live in Pakistan today. The vast majority migrated to India in 1947, the year Pakistan was created as a homeland for Muslims of the subcontinent. The CIA Factbook estimates that 3.6 percent of Pakistan’s 180 million people are non-Muslims, including Sikhs, Christians and Hindus.

Sikhs are among the smallest minorities. They are easily identifiable because of their tightly wound and

often colorful turbans, and because they share the surname Singh.

Many of the Sikhs living in Pa k i st a n a re i nter n a l ly d i s placed, having fled their traditional homes in Pakistan’s tribal regions as the threat posed by militants increased.

As the Taliban grew in strength in tribal regions, such as Orazkai and Bajour, Sikhs were forced to pay protection money to local militant leaders or were killed, Yusuf at HRCP said.

Two years ago, extremists in the area swore allegiance to the Islamic State (IS) group. IS militants routinely video the brutal

killings of non-Muslims in their territory. Charanjeet Singh, a volunteer at the gurdwara and a community spokesman, fled his home in Orazkai several years ago.

He spoke to The Associated Press (AP) from inside the cavernous prayer hall of the gurdwara. Inside the sprawling compound, most of the buildings are crumbling—only the ornately carved prayer hall has been renovated.

Still, remnants of its former glory are visible—a small arch made up of odd-shaped blocks of stone, known as Waziri bricks, remains from the original structure laid around 300 years ago.

Charanjeet Singh said the community had been battling government intransigence and local resistance since 2012 to reopen the gurdwara.

In the 73 years it stood empty, the gurdwara was administered by the government’s Evacuee Tr u st , a n org a n i z at ion t h at looks after properties vacated by those who left for India during partition in 1947. Sometimes the buildings are returned to their original owners—as happened with the gurdwara—and at other times they are given to those who migrated from India to Pakistan, provided they can prove they owned property of a similar value in India.

Under the Pakistani government’s guardianship, the gurdwara went through many incarnations.

At one point, it housed a vocational school and it has been used for private homes. Several members of the Evacuee Trust still work and live there.

Despite receiving a chilly reception from their Muslim neighbors, the Sikhs of the gurdwara are giving shelter to an elderly Muslim woman.

In one of the ramshackle buildings lives Begum Shafqat Ara, a diminutive old woman who believes her age to be around 90.

She has lived in the gurdwara for some 60 years. She never married and taught at the vocational school, where she continued to live after she retired.

“I didn’t have anywhere to go, no family. This is my home,” she told AP, sitting on the purple carpeted floor of the gurdwara’s prayer hall.

Charanjeet Singh says Ara will stay. The Sikh community takes care of her and has promised to continue to do so, for as long as she lives. Ara smiled a mostly toothless grin as she heard this and affectionately rested her hand on the knee of a nearby Sikh volunteer who had helped her to the prayer hall.

Despite the dangers they face, Charanjeet Singh said they will not capitulate to the militants. “If we do, they win,” he said. “We are fully determined we will keep our holy places open.” AP

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College free speech: Hecklers on NC campuses under scrutiny

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briefs

N. KOREA ERECTS MOCKUP OF SEOUL PRESIDENTIAL PALACE

SEOUL, South Korea—South Korea says North Korea has built a half-size mock-up of the South’s presidential palace at a firing range in what looked like preparations for a live-fire drill.

The South’s Joint Chiefs of Staff said on Wednesday the information came from an analysis of South Korean satellite imagery. AP

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ALEIGH, North Carolina— Hecklers, who shout down speakers on North Carolina’s college campuses, could be punished under a proposal being f loated before lawmakers that would make this state the newest battleground over free speech at United States universities.

Lt. Gov. Dan Forest is proposing that the state’s 17-campus public-university system create a policy that includes punishments for “those who interrupt the free expression of others.” With their annual legislative session opening this week, North Carolina lawmakers are expected to join a half-dozen states that have taken up free-speech legislation for public campuses.

Freedom of speech has become contentious on campuses nationwide. Some students have complained against free expression they say is stoking racial tensions or glossing over sexual misconduct. Others say that amounts to suppressing speech.

Forest’s proposal hasn’t yet been presented as legislation and he declined an Associated Press request for an interview about the details. But he spent months describing his ideas on talk radio and conservative web sites. His main target: hecklers who disrupt public speakers.

Protesters have loudly opposed the North Carolina’s university gover n i ng boa rd. T hey h ave protested the board’s termination of former University of North Carolina President Tom Ross last year and its hiring of former US Education Secretary Margaret Spellings as his replacement, among other issues. Three people were charged with disorderly conduc t a nd ot her of fen ses in January after disrupting a gover n i ng boa rd meet ing to protest Spellings’s selection.

“If a speaker has been invited by a student group, another in the university community does not have the right to interrupt that speech, shout over the speaker, or, otherwise, prevent others from listening to the speech,” Forest’s office said in a statement. Protesting against speakers is nothing new on US campuses. Demonstrators prevented commencement addresses by former Secretary of State Condoleezza Rice at Rutgers University in New Jersey and Attorney General Eric Holder at the Oklahoma Police Academy in 2014.

A student group at Williams College in Massachusetts last fall canceled a speaking invitation for feminism critic Suzanne Venker.

University of California-Berkeley students failed to persuade administrators to disinvite liberal comedian Bill Maher as a 2014 commencement speaker amid his complaints about Islam.

Six states have taken up campus speech legislation, but Forest’s proposal would make North Carolina the first to address the so-called heckler’s veto versus someone else’s right to speak, said Joe Cohn, policy director of the Foundation for Individual Rights in Education.

He compares the idea of curtailing campus hecklers at public meetings to calling police to remove an uninvited trespasser disrupting a wedding party.

“The concept here is, if someone is shutting down an event, schools may have an affirmative duty to help protect the integrity of the event and the speakers that are there,” Cohn said. But “there’s some amount of heckling that doesn’t cross the line of shutting something down.”

Lee Rowland, a free-speech attorney with the American Civil Liberties Union, said it could be tricky punishing determined hecklers without violating their right to be heard. AP

Thursday, April 28, 2016

RUSSIA SPACE AGENCY DELAYS ROCKET LAUNCH MOSCOW—Russia’s space agency says it has delayed the launch of a rocket from the Vostochny air field in Russia’s Far East. The Soyuz rocket was supposed to launch on Wednesday, but was canceled 1.5 minutes before the planned liftoff.

Roskosmos says the launch date has been rescheduled to Thursday.

Roskosmos’s Deputy Head Alexander Ivanov told the Tass news agency that the space agency is working to pinpoint what went wrong. AP

AN Iranian woman adjusts her headscarf while crossing a street in downtown Tehran, Iran, on April 26. Tehran police chief Gen. Hossein Sajedinia recently announced his department had deployed 7,000 male and female officers for a new plainclothes division—the largest such undercover assignment in memory. Critics fear the unit’s main focus will be enforcing the government-mandated Islamic dress code, which requires women be modestly covered from head to toe. AP

New plainclothes morality police prompt criticism in Iran

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EHRAN, Iran—Tehran resident Sousan Heidari has stopped letting her headscarf slip casually down over her neck and shoulders while driving in the Iranian capital. These days, the 22-year-old with a taste for bold makeup makes sure to pull it tightly over her dark hair, fearful of running afoul of a newly established undercover division of the morality police.

“Every single man or woman could be a member of the unit,” she cautioned. “I don’t know.

Maybe some plainclothes have already reported me because of heavy makeup.”

Tehran police chief Gen. Hossein Sajedinia recently announced his department had deployed 7,000 male and female officers for a new plainclothes division—the largest such undercover assignment in memory. Authorities say the division, which started work last week, will patrol major Tehran streets and intersections, policing transgressions, including harassment against women and excessive car honking and engine noise.

Critics fear the unit’s main focus, however, will be enforcing the government-mandated Islamic dress code, which requires women be modestly covered from head to toe. They see it as the latest f lashpoint in the struggle between relative moderates, such as President Hassan Rouhani and establishment hard-liners who fear looser social norms will weaken the Islamic Republic’s values and principles.

7,000

The total number of male and female officers for a new plainclothes division of the morality police in Iran

Iranian women these days, particularly younger ones, often forego the traditional long black long veil known as the chador and opt instead for trendy dresses and fashionable headscarves. More and more, they are daring to let their scarves slip down to their shoulders while driving.

Influential ayatollah Mohammad Ali Movahedi Kermani alluded to those concerns about moral erosion during a recent Friday sermon in Tehran, saying that a woman driving without a veil, “cannot be called freedom.”

Avoiding sartorial trouble in Iran has been fairly straightforward up until now. Police assigned to the morality-enforcement beat normally wore the same dark green

uniform of regular Iranian police, and were stationed out in the open at major squares and crossroads.

They would take a range of approaches to enforcing dress codes, including handing out scarves as gifts, giving verbal warnings or having female officers physically remove excessive makeup.

At worst, offenders would be sent to court and face fines of up to $250 or hauled to the local police station until their family members gave a written promise that they would never commit the same offense again.

Azizeh Shirazi, a mother of two college-aged daughters, said last week’s announcement of the new force has left her worried that something might happen to them on the way to university. “When the girls do not answer my phone calls during the day, my heart beats faster,” she said. The outcry over the new undercover police force extends to senior officials.

Shahindokht Molaverdi, vice president for women and family affairs, criticized the decision and expressed concern that it would be “limited to giving warnings to women over improper attire,” according to local media reports.

Molaverdi said many citizens have complained to her about the police decision, and she vowed that the Rouhani administration will review the proposed force.

Even the popular Hamshahri Daily, which is linked to conservative opponents of Rouhani’s government, raised questions about the plan in an editorial, asking why it was necessary now and whether there would be any way to verify the unit’s reports.

Police responded to the criticism by saying that “demands by the people” led to the creation of the new unit and that concerned citizens could contact police about

any ambiguities. They have found support from hard-liners, including female parliamentarian Fatemeh Rahbar—who said the previous practice of uniformed morality police was too easy for violators to spot and evade.

“The police are thinking about a more precise, more effective and more functional method since the previous open method did not bear fruit,” she said.

On Sunday the spokesman of the hard-line dominated judiciary, Gholam Hossein Mohseni Ejehi, added his voice of support, saying the “judiciary definitely supports the police plan to confront open social corruption.”

Tehran-based political analyst Saeed Leilaz believes the new unit is a reaction to the resounding defeat of hard-line and conservative candidates in Tehran during recent parliamentary elections. A bloc led by moderates and reformists won a majority of seats around the country, but captured all 30 seats representing the capital in the 290-seat parliament. A runoff election for 68 remaining undecided seats will be held on Friday.

Leilaz noted that these new plainclothes units have only been announced for Tehran, not for any other major Iranian city.

“This is part of the establishment’s reaction toward Tehran residents’ attitude in the election,” he said. “It’s an expression of discontent and taking revenge, as well as applying efforts in restricting President Rouhani.”

Leilaz said the new initiative suggests previous hard-line dress code policies have failed. And he questioned how effective the new division would be. “ The plan, as usual, will have a short-ter m limited impact.

Soon people will return to their routines,” he said. AP

FRENCH LAWYER: PARIS ATTACKS SUSPECT ‘READY TO COLLABORATE’ PARIS—A French lawyer says he will defend key Paris attacks suspect Salah Abdeslam once he’s transferred from Belgium to France, and described him as a young man “falling apart” and ready to cooperate. Frank Berton told the iTele TV channel on Wednesday that Abdeslam—the only survivor in the November 13 Paris bloodbath that killed 130 people— won’t be transferred to France before mid-May. Abdeslam, whose brother blew himself up in the attacks, is now in a Belgian prison. AP

INDONESIA’S SEARCH FOR MASS GRAVES MET WITH SKEPTICISM JAK ARTA, Indonesia—The Indonesian government’s decision to investigate massacres in 1965 is being met with wariness by rights groups, some of which are refusing to share information about mass graves until the government shows how it will conduct the probe. President Joko Widodo instructed security minister Luhut Pandjaitan this week to investigate the killings and gather information about mass graves. AP

TAIWAN FISHERMEN PROTEST JAPAN’S SEIZURE OF BOAT TAIPEI, Taiwan—Scores of Taiwanese fishermen protested on Wednesday outside Japan’s representative office in Taiwan to demand an apology over the seizure of one of their fishing boats by the Japanese coast guard. The fishermen lobbed eggs and clashed briefly with police while delivering a petition at the Interchange Association, which handles relations between the two in the absence of formal diplomatic ties. AP

CHINA HUMANRIGHTS CAMPAIGNER DIES BEIJING—Harry Wu, a longtime Chinese human-rights campaigner, and author and founder of the Laogai Research Foundation, has died. He was 79. Wu died on Tuesday morning while on vacation in Honduras, Laogai Human Rights Organization administrator Ann Noonan told The Associated Press. The case of death wasn’t immediately known and Wu’s son Harrison and former wife China Lee were traveling to the Central American nation to bring home Wu’s remains, Noonan said. AP

US Pacific Fleet expands use of 3rd Fleet commanders

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EARL HARBOR, Hawaii— The US Pacific Fleet commander said he plans to expand the role of the US Third Fleet commander and her staff in the Asia-Pacific region.

The Pacific Fleet consists of the Third Fleet headquartered in San Diego and the Seventh Fleet headquartered in Yokosuka, Japan. For decades, the Seventh Fleet has taken command of Third Fleet ships when they crossed the international dateline. But Adm. Scott Swift said on Tuesday he plans to

have Third Fleet Commander Vice Adm. Nora Tyson and her staff maintain operational control of some of these ships when they travel west. For example, he says the Third Fleet could lead the Navy’s response to a tsunami, while the Seventh Fleet focuses on Japanese earthquake relief.

The Navy hasn’t been taking full advantage of Third Fleet capacity and capability, Swift said.

The first sailors to deploy under this arrangement are scheduled to leave Pearl Harbor on Wednesday.

Their ships—the USS Momsen, based in Everett, Washington, and the USS Decatur and USS Spruance based in San Diego, California— are deploying together as a surface action group. The Third Fleet leaders can help out the Seventh Fleet, which is already busy in the AsiaPacific region, Swift said.

“The future is very unpredictable. If we hit that capacity point, we don’t want to find ourselves for the first time asking the question, well let’s see what we can do with Third Fleet. We need to start those

actions now,” Swift told reporters after speaking to sailors on the Momsen. Swift said Tyson has already taken on more duties in the region, for example, representing him at a review of Japanese naval forces in October. The Seventh Fleet commander was unable to be there because he was supporting an exercise in South Korea.

Tyson also recently met with Australian and New Zealand navy leaders during visits to those countries. Swift said he plans to have the Third Fleet take an

active role in Talisman Sabre, a US-Australian exercise that takes place every other year. Swift said the shift won’t mean more third Fleet ships will be deploying to the region. The number of ships deploying should stay the same.

Capt. Charles Johnson, the commodore of the three-destroyer surface action group leaving Hawaii on Wednesday, said sailors on the ships won’t notice any difference in the deployment with the Third Fleet maintaining operational control. AP

A10 Thursday, April 28, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Learn how to do CPR and become a lifesaver

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VERYBODY must support the campaign initiated by the Philippine Heart Association (PHA), Philippine College of Cardiology and the Council on Cardiopulmonary Resuscitation to teach ordinary citizens how to act in the event of a cardiac arrest.

Unprecedented in scope, the “Nationwide Mass Training on Cardiopulmonary Resuscitation (CPR)” simultaneously held on April 25 in Ilocos Norte, Ilocos Sur, La Union, Baguio City, Cagayan, Olongapo, Pampanga, Batangas, Albay, Legazpi City, Cebu City, Leyte, Bohol, Dumaguete, Bacolod, Aklan, Iloilo, Iligan, Davao, Tagum City, Zamboanga and in Metro Manila zeroed in on the techniques of doing hands-only CPR. There are compelling reasons why we must learn how to perform handsonly CPR. Heart attack, as cardiac arrest is more popularly known, can happen any time to anyone. The importance of preparing ourselves to act in an emergency cannot be stressed enough.

Take the case of PBA superstar Avelino “Samboy” Lim who suffered a cardiac arrest during an exhibition game in November 2014. At the time of Lim’s cardiac arrest, no one inside the game’s venue knew how to administer proper CPR to him. This is the reason his brain was deprived of oxygen for almost half an hour before he was rushed to the hospital. Had he been given adequate CPR during the first three minutes he was rendered unconscious, his chances of recovery could have been much better. Heart experts say a person who stops breathing has to be revived within four minutes because beyond that, the loss of oxygen supply to the brain leads to a comatose state. Unfortunately, that’s what happened to Lim. It pays to remember this: Without the application of CPR, the survival rate of cardiac arrest is very low. Administering CPR immediately can enhance the chances of survival, according to experts. Given that 80 percent of cardiacarrest cases happen at home, there’s a good chance for a person who knows how to do CPR to save the life of a loved one. We must empower ourselves with the skills needed to intervene, rather than remain helpless bystanders, while waiting for the arrival of medical personnel. We can have the power to save lives.

It is hoped that the current campaign to train ordinary folks to perform hands-only CPR will decrease bystander reluctance to do CPR, especially in extreme emergency cases. If we have more CPR-trained people, we can reduce the time needed to respond to heart-attack emergencies and ultimately improve survival rates.

Let’s equip more Filipinos with the skills needed to perform bystander CPR. We can make lifesavers out of ordinary citizens by giving them the training that will make them confident to step up when a cardiac emergency arises. Anyone can learn CPR, and everyone should. (Note: get in touch with PHA if you want to organize training in your office or community). Here’s the best part: Once you have learned CPR, you can empower other people to save lives by transferring the knowledge that gives them the confidence to act quickly in an emergency.

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‘A’ is for Apple John Mangun

OUTSIDE THE BOX

T

HE intertwining of “big business” and a nation’s economy is inevitable given that big business creates the goods and services that people buy because they have jobs working for big business.

It is “symbiotic” relationship in that both parties benefit from the other. The small remora fish attaches itself to the body of the shark and feeds on whatever food the shark does not eat, thereby, not having to hunt. It also eats the little organisms on the shark’s skin that would be harmful to the larger fish.

However, the economic fools would call this a “parasitic” relationship when applied to a nation and the people, criticizing the “shark” for taking advantage of the poor little remora. Look how rich the SM Corp. is, profiting from its workers. But SM builds malls and makes money because it is able to give jobs to people who, in return, shop at its malls.

Henry Ford paid the highest

manufacturing wages in the United States to make his employees wealthy enough to buy the cars that they were building.

Charles Erwin Wilson served as US secretary of defense under President Dwight D. Eisenhower and as CEO of automobile manufacturer General Motors (GM). During his confirmation hearings the question of a conflict of interest—because GM held government contracts—came up. When asked if he could make a decision as secretary of defense that would be negative to the interests of GM, Wilson answered “Yes.” He added that he could “because for years I thought what was good for our country was good for General Motors.”

The fools turned that around

Apple Corp. is the “most valuable” company on earth, trading for second place sometimes with Google.

Apple just reported the first quarterly fall in revenues and sales (down 13 percent from 2015) in 51 quarters, or 12 years. This is a big deal. Its products are used in every corner of the planet but its decade-long growth has been driven by Chinese consumers. and misquoted Evans with “What is good for GM is good for the nation,” picturing him as a “parasite.”

Actually, either quotation works because both are true. It is a symbiotic relationship.

The point is that the economic health of a nation can be seen in the financial health of its businesses, and vise versa. Both are strong or both are weak; that is the only way it can be.

Apple Corp. is the “most valuable” company on earth, trading for second place sometimes with Google. Apple just reported the first quarterly fall

in revenues and sales (down 13 percent from 2015) in 51 quarters, or 12 years. This is a big deal. Its products are used in every corner of the planet but its decadelong growth has been driven by Chinese consumers.

Fewer iPhone upgrades overall led to 16-percent decline in shipments. But sales in China, Taiwan and Hong Kong fell 26 percent in the period. Hong Kong sales were hurt by a stronger US dollar, but simply put; Apple is not selling as many gadgets in the region. The rest of the reasons are “accounting arguments.”

If you want to check the “temperature” of the Philippine economy, look at business in your nearest shopping mall, palengke, or the night market, where they sell “genuine” imported Chinese sport shoes. Do not look at government statistics.

Apple manufactures virtually 100 percent of its goods in China, so what is good for China is good for Apple and vise versa. As Apple goes, may also go China; as China goes, may also go the global economy.

E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com.

Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

Trump makes up for lost ground Jonathan Bernstein

BLOOMBERG VIEW

T

HE good news for Donald Trump continued on Tuesday night. He’s closer to the nomination. But he’s not there, yet.

Trump was long expected to win in the primaries in Pennsylvania, Maryland, Connecticut, Delaware and Rhode Island, so pulling off that sweep wasn’t anything special. But across all five states, Trump’s margins were large, well over 50 percent everywhere. He’ll wind up with more delegates than he was projected to get; Nate Silver says Trump “basically made up all the ground he lost in Wisconsin and Colorado.”

It’s also encouraging for him going forward. Trump right now leads the polls in Indiana and California, the two key states remaining. Until last week in New York, however, Trump usually underperformed his early polling numbers; once the full campaign showed in each state, his opponents generally took most or all of the undecided vote, and sometimes some of his. But that’s not what happened in New York, or (overall) in the five states on Tuesday night. Perhaps it’s only a regional effect, but it’s at least a bit of evidence that Trump may do, as well, or better than he’s currently polling.

That said: Unless he beats current projections elsewhere, Trump

still needs to do well in Indiana and California in order to reach the 1,237 delegates needed to win the nomination. If he falls short, then he’s still going to need to pick up support from the small number of unbound delegates.

I’m hearing plenty of pundits talk about how Trump’s sweep on Tuesday and last week will make that easy. Trump himself said as much in his news conference: How can the party oppose a candidate winning by so much?

But remember: A Trump who doesn’t get to 1,237 after the final primaries on June 7 won’t be the triumphant one emerging from today’s contests. He’ll be the candidate

TRUMP

who fell short, having lost in several states over the final weeks.

Nor am I convinced that current polling in which Republicans believe the delegate leader should become the nominee will matter much. That’s still perhaps an abstract question, but after June 7 the question will be only whether to nominate Trump or not. And again, that wouldn’t be the triumphant dominant Trump, but one who fell short. It’s hard to predict what effect that would have on the polls.

The other thing to watch for, in addition to Indiana on May 3, will be whether the Republican Party

begins to rally behind him. After some success in February and March, including three governor endorsements in the last month, only one Republican in the House of Representatives has endorsed him. No senators. It’s really been an impressive showing of anti-Trump sentiment against the normal inclination to climb on the bandwagon.

We’ll see whether that changes now —or after Indiana if Trump does well there. The answer will tell us whether Trump has any chance to unify the bulk of the party at all. And that will tell us whether Trump will be a very weak general election candidate, or a historically awful one.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Japan’s growing poverty defies glib explanations

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Abiding presence in love

B N S | Bloomberg View

HERE are lots of preconceptions about poverty. On the right, a common idea is that poor people mainly have their own behavior to blame—that if they worked more, committed less crime, had fewer out-of-wedlock births and did fewer drugs, the poverty rate would plummet. Meanwhile, many liberals blame poverty on free-market policies that have weakened unions and eliminated the corporate-welfare state.

Both of these stories sound plausible, and both may be important factors. But when I look at Japan, I see plenty of evidence that neither individual behavior nor free-market policy is the main reason for poverty. As in so many areas of economics, Japan confounds our conventional wisdom.

The stereotype of Japan as a low-poverty country isn’t accurate. It’s true that Japan had relatively few poor people—and was a very equal society—as recently as the early 1980s. But since then, the national poverty rate has risen relentlessly:

Now, a new United Nations Children’s Fund report informs us that on at least one key measure, child poverty, Japan has fallen behind the United States. The report looked at the gap between the income of the poorest Japanese families with children and the average household income. On this measure, Japan now ranks 34th out of 41 developed countries (a higher rank indicates more child poverty). In comparison, the US ranks 30th.

This rising poverty level fits with all the other negative economic trends coming out of Japan—falling real wages, rising inequality and the rise of low-paid nonregular employment. It all adds up to one big truth: lots of people in Japan are not doing well economically.

The question is, why is this happening? If the bad-behavior explanation for poverty is correct, we would expect to see high-crimes rates, a lot of unemployment and high rates of things like out-of-wedlock births and illegal drug use.

But we see none of those things. Japan has very high labor-force participation and low unemployment. No laziness or idleness here. Japan’s crime rates, especially for violent offenses, are legendarily low, and have been falling even more in recent years.

Single parenthood is very rare in Japan—only about 3 percent nationwide, compared with about 25 percent in the US. And rates of illegal drug use, while they have risen recently, are much lower than in the US. So Japanese people are much better behaved than Americans, at least in the ways that conservatives use to account for poverty. How about free-market policies? Here, the story is more ambiguous, but I still see this as a minor factor at most.

Japan is famous for its corporate-welfare system, where job security is high and raises are based on seniority. This system has declined in the years since the administration of former Prime Minister Junichiro Koizumi ended a ban on the use of nonregular workers in manufacturing. But much of the shift to low-paid, insecure jobs has happened without major changes in policy. In particular, stringent government protections of regular workers have been kept in place.

Japan has also resisted becoming more open to trade and immigration. It ranks lower than most rich countries on measures of trade openness, and is famously resistant to importing foreign labor.

What about unions? Labor-union membership has declined steadily since the 1970s, much as it has in other rich countries. But this probably hasn’t been driven by policy — there have been no major changes in Japanese law regarding unions, and labor disputes are exceedingly rare. Japan’s labor-management relations, in fact, have always been far less confrontational than in the US. So if neither free-market policy nor individual behavior is responsible for Japan’s steadily climbing poverty rate, what is the cause? One possibility is low productivity. Labor productivity has fallen along with wages, and total factor productivity (which takes capital into account, as well as labor) has stagnated.

Another possibility is the impact of trade competition. Even though Japan has remained more protectionist than most rich countries, protection of domestic markets is no guarantee of success in international ones. Japan’s exporters have come under increasing competition from Asian rivals, and from innovative American companies, in areas such as electronics, machinery and cars. More direct competition from nations that make similar goods means smaller gains from trade, so Japanese workers could be feeling the pinch despite the government’s protecting hand. This might also explain why Japan’s rich, like their counterparts in other countries, have been seeing continued income gains even as the poor get poorer.

Msgr. Sabino A. Vengco Jr.

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HE psalmist prays that the whole world may experience God’s merciful and gracious providence and may all peoples respond to Him in praise (Psalm 67:2-3, 5, 6, 8). The Father and the Son in the Holy Spirit dwell with whoever loves Jesus and keeps His word (John 14:23-29).

The universal scope of divine goodness THE radiance of God’s face, the smiling face of God shining upon us, is anthropomorphically the visible expression of divine favorable disposition. “Happy the people...Lord, who walk in the radiance of your face” (Psalm 89:16). The opposite metaphor would be God hiding His face from us. Psalm 67 begins by adapting the blessing by Aaron and his sons: “The Lord bless you and keep you!

The Lord let His face shine upon you and be gracious to you! The Lord lift up His countenance upon you and give you peace!” (Numbers 6:24-26).

God’s benevolence toward His

Bloomberg View

A

T 7’6”, Yao Ming wasn’t often blocked during his Hall of Fame National Basketball Association (NBA) career. But Chinese politics are a different matter, as Yao learned this week when the state-owned China Basketball Association (CBA) rebuffed the superstar’s attempt to take the league private and remodel it in the image of the profitable NBA. Yao’s bid was certainly worth a shot. Basketball is China’s most popular team sport and the American NBA is the most popular professional league among Chinese fans. Last year the NBA signed a $700-million deal with Chinese social media giant Tencent for digital rights to its programming in China—its most lucrative digital partnership anywhere in the world.

If Yao could have injected some of the NBA’s professionalism and pizzazz into the Chinese leagues, he stood to make a fortune.

Instead, his failure speaks volumes not just about sports, but about the difficulty of reform in China. Among the country’s 150,000 state-owned companies, the CBA would seem an ideal test case for privatization: The mediocre and money-losing league is both in dire need of a revamp and nowhere near as sensitive as, say, the steel industry, which employs hundreds of thousands of people. The fact that Yao— one of China’s best-known and most beloved figures—still couldn’t overcome the league’s resistance doesn’t bode well for other efforts to loosen the state’s grip on the economy.

Sports and steel do have something in common: In modern China they’ve both been seen as proxies for national greatness. China

chosen people redounds to God’s reputation among other nations on the earth. The people’s good fortune is seen as consequence of God’s gracious ways and saving power and of the continuing divine rule over them. Other nations will also rejoice over God’s goodness and might; they will also be guided and ruled by God, and all nations will eventually praise God. The testimony of one people is the source of blessing for all in fulfilment of a promise to Abraham: “All the communities of the earth shall find blessing in you” (Genesis 12:3).

The psalmist prays for continued divine favor to God’s people, so that all nations will, likewise, revere God.

Abiding in love ONE major theological theme of the gospel text is the presence of God with one who loves. Love as He has loved is Jesus’ fundamental message, His legacy. It is a demanding type of love, as self-sacrificing as the love of Jesus on the cross. Only those believers who listen to His word and follow His directives and imitate Him can be said to really love. And those followers who love as Jesus did will be loved by the Father, for the word of Jesus being carried out is not just His, but the word of the Father who sent Him. To receive the word of Jesus and keep it is to receive and obey the Father, too.

This love is not merely some emotional response, but a state of being, a basic disposition and a fundamental orientation within which and according to which the faithful lives. That is why the Father and Jesus, in turn, come and dwell with such a faithful one. The Father and the Son as divine love in the Holy Spirit make an abiding dwelling, not just a transitory state, but a communion of life and of peace, which the world cannot give, for it is universal and to last forever. The faithful believers are

drawn by the word of Jesus to this heavenly covenant already now, an intimacy that, therefore, includes the Holy Spirit the Advocate sent by the Father in the name of Jesus the Son to teach us everything. This fellowship with the Triune God is forever celebrated in the heavenly glory at the return of Jesus.

Alálaong bagá, in our continuing meditation on the significance to us of the victorious resurrection of Jesus Christ, the risen Lord is God’s radiant and abiding face of love and mercy toward us. He bequeaths His peace to us, and He sends us our advocate the Holy Spirit to teach us everything and remind us of all that He told us.

He assures us of the abiding love of the Father. Indeed, we need not be troubled or afraid. God’s graciousness and merciful love is now conclusively experienced by the people of His new covenant, and God’s salvific activity will be made known to all the earth. “O God, let all the nations praise You!” Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.

Stringent rules in availing tax exemption Ernesto N. Dayao Jr.

TAX LAW FOR BUSINESS

I

T has always been said that tax exemptions must be construed strictly against the taxpayer and liberally in favor of the taxing authority. However, if the law expressly exempts a particular entity, business, industry or transaction from tax, then the tax exemption should be respected accordingly.

Section 30 of the Tax Code expressly enumerates the organizations and associations exempt from paying income tax on income received by them as such. In 2013, however, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) 020-13 stating that the BIR accords tax-exempt status to these corporations and associations by way of confirmatory BIR rulings or certificates of tax exemption, which are issued after due evaluation of documents submitted by said corporations and associations. Based on said memorandum order, it is the BIR which accords the tax-exemption status to these tax-exempt corporations through the issuance of rulings or exemption certificates. Accordingly, the memorandum order requires these corporations and associations to file applications for tax exemptions with the appropriate BIR office.

Oppositions to this issuance were raised by various sectors. In fact, there were judicial decisions issued against the said order. In the case of The Abbas’orchard School Inc. v.

Yao Ming gets blocked in China B A M

ALÁLAONG BAGÁ

Thursday, April 28, 2016 A11

established the CBA in 1994, after watching the dominant, image-enhancing success of the US “Dream Team” at the 1992 Olympics. As a state venture, however, the league was hobbled from the start. Instead of scouting China’s urban playgrounds, where some of the country’s best hoops are played, the CBA was limited to talent cultivated in China’s system of rigid, state-run athletic academies. That’s dragged down the quality of play; Yao remains one of the few breakout stars to emerge from the Chinese leagues. The CBA’s business structure also hampers competition. Unlike the NBA, where teams retain most of the sponsorship money they earn, CBA franchises must turn over all of their revenues to the league front office. Predictably, the system has been a commercial disaster. Last season only one of the CBA’s 20 teams made a profit.

Financial woes have produced a

A lesson from this ruling is that taxpayers should, aside from complying with the requirement for securing tax exemption ruling, be careful with the types of taxes that they register as applicable to them.

These types of registered taxes may affect their exemption from income taxes.

CIR, CTA Case No. 8377, November 4, 2014, the court ruled that when the Tax Code does not provide for a requirement to be exempt, the BIR cannot add an additional requirement to implement the law.

Thus, a nonstock, nonprofit educational institution should only prove that no part of its income is derived from activities conducted for profit.

Further, the requirement for certificate of exemption prescribed in RMO 020-13 is not a requirement stated by the Tax Code. Therefore, the certificate of exemption is not a condition precedent for the exempt entity to be entitled to its exemption.

In its effort to clarify RMO 02013, the BIR issued RMO 34-14. The said RMO acknowledged that taxexemption rulings do not confer taxexemptions, which are not provided for by law, nor can tax-exemption rulings abrogate those exemptions, which are granted by law. The absence of a valid tax-exemption ruling will not operate to divest qualified entities of the tax exemption

provided under the Constitution or the Tax Code. These entities that fail to secure a tax-exemption ruling are duty bound to prove compliance with the conditions laid down by the law and other pertinent administrative issuances in the event of a tax investigation. In essence, a ruling is not required, provided that if an issue is raised during examination relative to tax exemption, the entity is bound to prove its entitlement.

However, the BIR reiterated its earlier issuance that the failure of the nonstock, nonprofit entity to present its valid, current and subsisting tax-exemption ruling to its appropriate withholding agents, shall subject such entity to the payment of the withholding taxes due on their transactions.

On the other hand, the withholding agent’s failure to withhold notwithstanding, the lack of taxexemption ruling shall cause the imposition of penalties. Since the withholding agents bear the burden of penalties for failure to withhold in the absence of a tax-exemption ruling presented by the payee, these payors are forced to require, and the

woeful product. Players, working for a relative pittance, often play comically badly. The league suffers from notoriously poor officiating, while corruption is rampant. Games are oftentimes played in an atmosphere more akin to pro wrestling than pro basketball (as evidenced by a melee between fans and players outside of a hotel last month).

I’ve personally sat in unheated CBA arenas during cold winter months, as players donned parkas on the bench.

Yao, who bought the Shanghai Sharks franchise in 2009, pinpointed the problem in a 2013 interview when he complained of the CBA, “We are running this more like a government than a professional league.”

Privatizing the CBA would, in theory, make the league and its franchises more transparent and accountable.

More profitable teams would have the money to develop players and improve the fan experience. The league

itself would have a better chance of attracting up-and-coming international figures who aren’t yet ready for the NBA, rather than players at the ends of their careers.

The government, which has talked repeatedly of granting the market a “decisive role” in the economy, in principle favors reform of the state sector, including sports leagues. In 2014 China’s State Council ordered that market forces play a bigger role in the latter, and in January China’s powerful sports authorities approved rules that would allow an outside party to control the CBA’s business affairs.

Yao sought to take advantage of those changes. With the backing of 18 of the 20 CBA franchises (including his Shanghai Sharks), he formed a corporation to give team owners a controlling say over league business.

The bureaucrats running the CBA, however, pushed back, forming their own “private” corporation

payees are forced to present taxexemption rulings. Otherwise, the payor has to withhold tax on the payment. In effect, the supposed taxexempt organization is still required to secure tax-exemption ruling so that its receipts are not subjected to withholding taxes.

There are always ways to tax transactions that are supposedly exempt from tax. In a recent ruling (BIR Ruling No. 26-16) supposedly secured in compliance with the above memorandum orders, the BIR ruled that once an association is value-added tax registered, the taxpayer is automatically presumed to be engaged in business. Hence, such entity will not qualify for exemption under Section 30 of the Tax Code.

It is still liable for income tax and value-added tax or percentage tax.

A lesson from this ruling is that taxpayers should, aside from complying with the requirement for securing tax-exemption ruling, be careful with the types of taxes that they register as applicable to them.

These types of registered taxes may affect their exemption from income taxes.

Ernesto N. Dayao Jr. is a senior tax specialist of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services.

The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at ernesto.dayaojr@bdblaw.com.ph or call 4032001 local 390.

to put forward a rival bid—and then choosing themselves as the winners.

Under the new system, the CBA will hold a 30-percent share in the new management company, while each of the 20 teams will have only a 3.5percent share—all but guaranteeing continued CBA control. Or, in Yao’s words, the new scheme is “like wrapping our current system up in a company’s shell.”

Efforts to revamp the broader state sector are similarly stumbling over resistance from vested interests. President Xi Jinping’s recent reform plan for state-owned enterprises lacks detail and Xi himself remains sympathetic to maintaining state control over key sectors.

Worse, the timetable to achieve “decisive results” stretches to 2020, giving control-minded bureaucrats an incentive to run out the clock. For Chinese basketball, the final buzzer might have already rung.

2nd Front Page BusinessMirror

A12 Thursday, April 28, 2016

DOE, NGCP assure no brownouts on May 9 T

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Indonesia to hold talks with PHL on joint patrols WIDODO said the government’s information is that the Indonesian hostages are in good health.

@joveemarie

HERE will be no brownouts on May 9, election day, as there is enough power supply for the whole country, according to the Department of Energy (DOE) and the National Grid Corp. of the Philippines (NGCP).

During a House Committee on Energy hearing, Energy Secretary Zenaida Y. Monsada also assured solons and the public there will be no brownouts during the whole election week.

“We are confident there will be no forced outages that may affect the power transmission on election day. We have sufficient and reliable power supply,” she said.

The DOE has created a Power Task Force Election to ensure sufficient power supply during the election period. Electricity is needed for the vote-counting machines to function efficiently.

“I assure you that with the help of everybody, the energy family, and the task force, there will be no failure of elections because of power deficiency,” Monsada said.

For her part, NGCP Spokesman Cynthia Alabanza said the power reserves in Luzon (2,200 megawatts [MW]), in the Visayas (190 MW) and in Mindanao (373 MW) are enough to ensure the stability of supply on May 9.

In case there is a power interruption, Jerome Matas from the Office of Commission on Elections

www.businessmirror.com.ph

I

2,763 MW

Total power reserve for the whole country to ensure stable power supply in Luzon, the Visayas and Mindanao on election day (Comelec) Chairman said the VCMs are equipped with batteries that will last up to 14 hours.

However, Comelec’s Ma rk Anthony Amurao asked the power distributors to focus on canvassing centers, as the battery-operated laptops that would be used for canvassing could only last up to four hours.

Meanwhile, Manila Electric Co. (Meralco) Vice President Ferdinand Geluz said its transmission lines are 96-percent ready, saying it will be 100 -percent prepared on April 30.

Earlier, Speaker Feliciano Belmonte Jr. asked Meralco to assure the public and the government that there will be no brownouts on election day.

“I hope that if unavoidable,

INSURANCE SUMMIT National Reinsurance Corp. of the Philippines President and CEO Augusto P. Hidalgo (left) and A.M. Best-EMEA and Asia Pacific CEO Dr. Roger Sellek share a light moment during the 13th Philippine General Insurance Summit held in Makati City on Wednesday. ALYSA SALEN

Meralco will schedule the shutdown in such a way as not to affect the electoral process, particularly the casting of votes, counting of ballots and electronic transmittal of results,” Belmonte said.

House Committee on Energy Chairman and Liberal Party Rep. Reynaldo Umali of Oriental Mindoro also assured the public there will be no power outages on election day.

“We’re not anticipating any brownout during election period according to the Department of Energy. But I’m

asking them to give us more updates on power supply,” Umali said.

“This is important, to keep everyone onboard, to keep the public well-informed,” Umali added.

Meanwhile, to guarantee uninterrupted power supply in voting precincts throughout Luzon, Deputy Minority Leader and Party-List Rep. Arnel Ty of Liquefied Petroleum Gas Marketers’ Association has asked malls and other big consumers of electricity to power up their backup generators on May 9.

Ty said the DOE should ask large

users to self-generate their electricity needs or implement the Interruptible Load Program (ILP) and stay off the grid on election day.

Under the ILP, Meralco or the NGCP may ask participating establishments to disconnect from the grid and run their emergency generators once power supply falls short of demand.

The ILP helps provide other consumers—those without any self-generating capacity— adequ ate e lec t r ic it y des pite supply deficiencies.

ATENEO FORCES GAME 3 A

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LYSSA VALDEZ is not a three-time Most Valuable Player (MVP) for nothing.

Before a live crowd of 20,541 and millions more on television, Valdez powered Ateneo past De La Salle in a thrilling five-setter, 18-25, 26-28, 25-17, 25-16, 15-11, at the Mall of Asia Arena on Wednesday, sending the Season 78 University Athletic Association of the Philippines women’s volleyball championship series to a no-tomorrow Game Three.

“It’s not yet over, let’s see each other on Saturday,” said an emotional Valdez in the postgame press conference. “We’re just really happy, but it’s not always about winning—after winning, there’s a big responsibility for us to come back on Saturday.”

Valdez and the Lady Eagles were almost given up for lost and the Lady Spikers were on the verge of celebrating the title that Ateneo denied them in the last two seasons, when De La Salle, behind Ara Galang, Mika Reyes and Kim Fajardo, jumped to what looked like an insurmountable 2-0 set lead.

But the two-time defending champions regrouped, flashed the form that made them favorites to repeat and clawed their way back in the next three sets, with Valdez playing the lead role and Joana Maraguinot, Amy Ahomiro and Bea de Leon providing the much-needed support.

And after the two-hour and eight-minute battle, Valdez came out the biggest performer— scoring a season-high 34 hits she highlighted with 32 attacks.

The knockout Game Three is set 3 p.m. on Saturday at the Smart Araneta Coliseum.

“We have to remember all the things that we did right and analyze all the things we did wrong and fix them in practice,” said Valdez, also the season’s Best Scorer and Best Server.

“Aside from preparing physically, we really have to prepare mentally because it’s the last game of

the finals. Mind over matter.”

Maraguinot and de Leon chipped in 15 and 12 points, respectively, for Ateneo, which had its back against the wall when it lost Game One, 22-25, 22-25, 21-25. Setter Jia Morado paced the Lady Eagles with 70 excellent sets Kim Dy had 16 points for De La Salle.

Reyes delivered 14 markers and Galang was again stellar on offense and defense with 12 hits and 19 digs. Cyd Demecillo added 10 hits.

Best Setter Fajardo had 61 excellent sets and Best Digger and Best Receiver Dawn Macandili had 21 digs and 16 excellent receptions for De La Salle.

ATENEO star Alyssa Valdez slams one in against De La Salle’s Kim Fajardo, as Kim Dy and Ara Galang prepare to hold their ground.

NONIE REYES

NDONESIA’S president said on Tuesday that his government will host talks with Malaysia and the Philippines this week to boost maritime security following the kidnappings at sea of Indonesians by suspected Abu Sayyaf militants.

President Joko Widodo said the meeting of foreign ministers and military chiefs will discuss joint patrols to protect shipping in the waters between the three countries. He said the meeting would be held this week, but did not give a specific date.

Fourteen Indonesians are among more than 20 people being held hostage in the southern Philippines. They were crew members of two Indonesian tug boats hijacked in separate incidents in March and this month.

The company that owns the tug boat involved in the March incident has received telephone calls, purportedly from Abu Sayyaf, demanding a ransom.

But Widodo ruled out an exchange of money for the hostages by the government. “We will never compromise on such a thing,” he said.

Abu Sayyaf militants beheaded a Canadian hostage on Monday and dumped his head on a roadside in a plastic bag in the southern Philippine province of Sulu.

The militants had threatened to behead one of two Canadians and a Norwegian they kidnapped last September from a marina on southern Samal Island if a large ransom was not paid by Monday afternoon.

Widodo said the government’s information is that the Indonesian hostages are in good health.

“This week, we will invite the Malaysian military chief and foreign minister, and the Philippine military chief and foreign minister to discuss the possibility of a joint patrol to ensure that the sea lane is safe,” Widodo said at the State Palace on Tuesday.

The president said the process of releasing the Indonesians held hostage by the armed group since a few weeks ago is not simple thing. All sides must realize and understand that the hostage crisis is not an easy thing, he pointed out.

“We will find it hard. We must understand that the other cases, which have lasted for six and eight months, have not been resolved either. In fact, any of them has been executed.

“It is not that easy to underestimate a difficult thing, as Philippine soldiers have cordoned off the area. As we all know that the hostages have been removed to other area. Has the act of removing the hostage caused difficulties to us?” he said.

After all, the president said he will never give up and keep trying to release the Indonesians held hostage.

Operations have been conducted at noon and night to ensure that the hostages will not lose contact with the Philippine government, he added. “We hope that it can be resolved soon as I have stated.” AP, PNA