CONGRESS PROCLAIMS DUTERTE, ROBREDO
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@joveemarie
ONGRESS on Monday proclaimed Davao City Mayor Rodrigo R. Duterte and Liberal Party Rep. Maria Leonor G. Robredo of Camarines Sur as the country’s duly elected president and vice president, respectively. C A
LIBERAL Party Rep. Maria Leonor G. Robredo of Camarines Sur is proclaimed Philippine vice president-elect by Senate President Franklin M. Drilon (left), and House Speaker Feliciano R. Belmonte Jr. at a ceremony on May 30 at the Batasang Pambansa Complex in Quezon City. Robredo won over her closest rival Sen. Ferdinand R. Marcos Jr., who is preparing to file an electoral protest. President-elect Rodrigo R. Duterte did not show up for the proclamation ceremony. AP
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‘PLDT, Globe deal to improve No change internet access in 6 months’ in stability
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@lorenzmarasigan
HE transaction that allowed the duopoly in the Philippine telecommunications market to gain access to assets of San Miguel Corp. (SMC) has given the pair more power that experts said, placed consumers at the losing end of the bargain.
Monday saw a whirlwind of events, with telco executives announcing in separate media conferences they have secured access to the prized 700 megahertz
INSIDE
FROM JUNYEE INSIDE TO TRISTRAM
(MHz) band, as they coacquired three holdings firms that San Miguel owns. This, according to officials at Globe Telecom Inc. and PLDT Inc.,
₧69.1B
The cost incurred by PLDT and Globe to secure access to San Miguel’s 700 MHz band is crucial to unlocking the secrets to faster and more reliable Internet services in the country. The P69.1-billion transaction involved the SMC sale of its hundred percent interest in Vega Telecom Inc., Bow Arken Holdings Co. Inc., and Brightshare Holdings Corp. S “I,” A
BMReports
Inclusive growth course a tortuous road for poor ART
The Millennials BusinessMirror
Tuesday, May 31, 2015
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STUDY: GEN Y ADOPTION OF PFM APP
HIGHER THAN GLOBAL AVERAGE Y
OUNG consumers in the Philippines are quickly switching to digital, a recent study by Fidelity National Information Service Inc. (FIS) revealed.
The Performance Against Customer Expectations (Pace) Index survey and report by the Jacksonville, Florida-headquartered financial-
technology firm, revealed mobile personal financial management (PFM) application “adoption in the Philippines, at 51 percent overall and
at 62 percent of Gen Y, is far higher than the global average.” “Eighty-four percent of Filipino respondents using a PFM app use their primary financial institution’s app,” the report said. “Although mobile PFM app usage from primary banks leads usage of apps from other sources, Filipinos, especially Gen Y, are more likely to turn to mobile PFM apps from elsewhere.” Gen Y, or millennials, refer to members of a generation born between 1980s to the year 2000.
The FIS Pace report revealed that nine out of 10 banked consumers with smartphones and/or tablets “respond positively to at least one personal financial control tool.” “Preferred tools include a warning when funds run low, savings maximization, budget planning and budget discipline, timely bill payment and— most popular—a spending tracker.” The FIS said the Philippines’s primary financial providers “must respond to the demands of the Gen Y” to remain engaged with their
customers. “These entail a shift in the digital channel landscape, from computer use to mobile devices and tablets in particular.” The FIS Pace Index survey and report includes results and analysis of how the Philippines’s financial institutions measure against their customers’ expectations. This is the first time the FIS included the Philippines in its second annual survey. FIS explained the Pace survey polls “consumers around the globe about their expectations of their
financial institutions and how they rank the importance of those items.” It also asks consumers how well their financial institutions meet those expectations. “The Pace survey asks consumers to rank the importance of, and financial institutions’ performance against, 18 attributes,” FIS said adding the results are compiled into a mathematical score—the Pace Index—“that allows us to evaluate how financial institutions perform, as compared to their peers.” Dennis D. Estopace
Sharon Chua: A ‘millennial’ entrepreneur shares insights DUMP TRUMP? SOME U.S.
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HARON CHUA, 37, doesn’t belong to a branded generation. She was born decades after hippies rode off into their Beetles into the sunset and the Jacobian handshake was still a unique sound in a handful of homes. But graduating in the year 2000 and building a business later prompted the BusinessMirror to talk to Chua and find out how she does business at a time Mason jars and designer tea grip is the fascination of young entrepreneurs.
our kids to grow up with the means to make their own living and to provide for their own family in the future. We believe that if our kids see how we work, they will learn the value of hard work and perseverance. I hope they will learn to be kind to people and to the environment. I hope that they will learn through the example of Echostore.
SHARON CHUA (SC): “Millennial” meaning someone who reached adulthood by the year 2000. Hmmm...I graduated from college in the year 2000, so I am categoricaly a “millennial” entrepreneur. I grew up believing I could achieve anything I set my mind to. This is what I got from reading fairy tales and watching a lot of television or telenovela. To a certain extent this was good, because thinking that I could conquer the world and have a “happily ever after,” just because life was that way, gave me the courage to try to pursue my passion, which translated to a business. I also grew up seeing how my parents worked so hard to make life comfortable for me and my siblings. I remember my mom tagging me along to Divisoria to buy wholesale and sell retail to help my dad make ends meet. I saw how they worked hard to send us all to good schools and make sure we didn’t have to break a sweat in going to and from school. My mom would even offer to help me with my projects. Of course, at that time, I never declined because I was sure she would do a better job than me in completing my handicrafts or science projects. Of course, they wanted me to get good grades becuase they slaved to pay for my tuition. Looking back, I grew up knowing my parents always had my back. I guess this is why I had the courage to try my hand at business too. I think my parents wished for me to have a good life and didn’t mind having to do all the work for me. Now that I look back, I think I was spoiled to an extent. Good thing I also saw how hard [my parents] worked to make ends meet. This is what brought me back to the reality that, with every thing you set out to do, you have to work really hard and be hands on. In contrast, I have a husband who is part of the “Generation X.” He was not spoiled or sheltered at all. He grew up with no allowance and he had to start working so he would have money to buy his lunch or whatever else he needed or wanted. He went into business with his own money after having worked as a sales agent
MILLENNIALS AREN’T SO SURE
BM: What excitement or satisfaction does an Echostore licensee give you?
BUSINESSMIRROR (BM): How do you define a millennial entrepreneur?
THIS undated photo shows Sharon Chua at her shop in Quezon City.
and having learned the ropes. I respect him a lot becasue I saw how driven and responsible he is. I remember going on dates where he would fall asleep while we were watching a movie because he was too tired after having worked all day. He would personally pick up and deliver the orders of his clients before. He just about sold anything he could sell to make a buck or two. He always believed that great service equaled repeat customers and repeat customers are the ones who will eventually give you a stable income. The two of us work as a team for our family. We each have our own strenghts. (I have my) passion, hard work and fearlessness, and my husband’s, his tenacity and determination. Much has been said about millennials, but I think the mind-set of a generation is greatly influenced by the culture he or she was exposed to. But more than the culture, what determines a person’s path or success has more to do with the personality and the choices one makes, but the awareness to one’s tendencies and generation can help one adjust to the situation and better himself or herself.
BM: As a young mother, how do you balance parenting and entrepreneurship? SC: It helps that I do not have a nine-to-five job so I can have time to attend to my kids. Having your own business allows you to have more control of your time. Logistically, I work very close to home, so I can just go back and forth from work and home when needed. I basically juggle being a mom and being an entrepreneur. It also helps that I have good people working with us to help us with our business and home. I believe in delegating, because as much as I want to do everything for my kids and still be able to micromanage all the work-related things in my life, I simply cannot. Believe me, I tried.
KERVIN LUY
I am at a point in my life where I know better than to burn myself out, because I want to do everything for everyone. Delegate, set realistic goals and always believe that God will not give you more than you can handle. Another thing my husband and I think we do differently from our parents—as a result of having come from Gen X and millennial subgroups—is we try to spend time with the kids. We try to have “family bonding time” to enjoy and relax: a weekend getaway to the beach, a leisurely walk in the mall. (These are) simple things that allow us to recharge and bond as a family. Growing up, both of us had parents who worked nonstop, so we wanted to do things a little diffrently. Our parents worked so hard to ensure our future that they forgot about themselves. Our parents often tell us to enjoy every once in a while, while you are still young and healthy. Take a breather every now and then; enjoy (life). (These are) words of wisdom from the generation before us that we are now living out in our daily lives. Every parent, every generation only want what is best for their children. We are not saying we are doing the right thing, but we are trying our best to be good parents to our kids the best way we know how given the situation and the advice from our elders. I sincerely hope we are doing what is best for our kids, just as I know our parents sincerely wanted to do the best for us. Parenting styles come and go, but I believe each child and each parent is unique.
SC: Echostore is a social enterprise that aims to help people and the environment at the same time. I love (the business’s) ideals and what it stands for. I am happy when my kids tell me they want to go to our store. They share ideas with me on how to improve sales and marketing. I love that the kids are involved in the process. Echostore is composed of Chit Juan, Jeannie Javelosa and Reena Francisco. I am very fortunate to have been mentored by these three exemplary women. I think it is my duty to continue their legacy. With the Echostore Centris, we added (the word) “Family,” as my vision is to include the children in the process of changing the world. With Echostore Centris, I wanted to reach out to young mothers like me to go back to basics, to the young children who will be the future generation. I wanted to be able to reach out to them because, with a mission and vision like Echostore’s, we have to reach more people and we have to raise awareness. I am happy when I get to talk to our friends and customers who share with us why they go to Echostore Centris. I am happy when I see families and friends dining heartily in the café, as their kids are playing or reading in the paly area. I am happy when I see kids eating healthy. I am happy when I see how our people at the Echostore Centris have grown with us for the past three years.
IN this May 11 photo, Jeremy Wiggins poses for a photo in Columbia, Missouri. Wiggins, a 20-yearold business administration major at the University of Missouri-Columbia, is a supporter of Donald Trump and has been elected to be a delegate from Missouri to the Republican National Convention, where he plans to cast his delegate vote for Trump. While most polls show Bernie Sanders is the overwhelming favorite of millennials, some young voters are taking a serious look at Trump as the primary season rolls on. AP
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OSTA MESA, California—Brendan de Regla drove three hours and waited in line for half a day to see Donald Trump speak at a rally in Southern California. Dozens of college-aged protesters shouted on the other side of a police line, but de Regla, 22, stood unwaveringly in support of Trump. “I just fell in love with him immediately,” he said, sporting a “Make America Great Again” T-shirt. “Since day one, I’ve loved him. But I knew it would take some time for people to figure out what he was about and what he was going to do and it’s finally happening.” While most polls show Bernie Sanders
is the overwhelming favorite of millennials—voters between the ages of 18 and 35—some young voters are taking a serious look at Trump as the primary season rolls on. In a Harvard Institute of Politics poll out this spring, 25 percent of people under 30 said they would vote for Trump if he faced off against Hillary Clinton in the fall.
Clear advantage
SANDERS still has the clear advantage among millennials, and the same Harvard poll shows 80 percent of young people with a very favorable opinion of Sanders would vote for Clinton if he drops out. AP
Schneider says to support young inventors of power-saving device
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CHNEIDER Electric Philippines Inc. (Sepi) announced the company will support young inventors of an energy harvesting device that takes power from solar, wind and vibration sources. Sepi Country Director for Human Resources Tess Portillo said the company will help to further develop the business case of the lone team from the Ateneo De Manila University (Admu) that defeated three teams at a competition on green technology. According to Portillo, the company will help the team called “Ateneo Ohm” in their preparation for the next phase of the competition. We will help them “further sharpen their presentation skills,” she added. “We hope, like our previous representatives in the past editions of [the] ‘Go Green In The City’ competition, Ateneo Ohm will be able to make it to France.”
The proposal is for installing a device atop each streetlamp to power the light, collect air-quality data and improve air quality with a three-stage filtration system. The entire system powers itself and is ideal for off-grid street lighting, according to Domer. Fernandez added that the system is “very scalable” and can be customized to address any off-grid energy needs. Domer said their proposal is catered to urban planners and government agencies planning to introduce sustainable practices, particularly to local government units.
THE MILLENNIALS
BM: What drives or motivates you to become an entrepreneur?
SC: Family! We want to provide for our family. We want our kids to live comfortably, of course, but, more important, we want our kids to grow up believing they can be better than us. We want
BM: As a young entrepreneur, how do you cope with the challenges?
SC: Challenges come and go. It is important to keep your focus on what is important: the people. Take care of your people, take care of the family, friends and customers. Every crease can be ironed out. Never stop learning, changing and innovating. You have to move with the time—adjustment and adaptability is the key. Acknowledge mistakes, (as) everyone makes mistakes. The important thing is you have learned the lesson and know better next time. Finally, keep moving forward. The past is history, the future a mystery, the present is a gift—from the movie Kung Fu Panda. These are the words I live by or try to live by.
Device
THE device the group calls “AeoLuminate” is “a step forward in addressing the challenges posed by unpredictable weather conditions to existing standalone renewable technologies, as well as the increasing need for better data on air quality for monitoring and policy-making purposes in the face of increasing greenhousegas emissions.” The proposal for AeoLuminate by Ateneo Ohm members Prince Aldrin Domer and Sheena Fernandez won against the teams from the University of the Philippines-Diliman.
Winners
ATENEO Ohm took home a grand prize of P100,000 and the opportunity to represent the Philippines in the next phase, the “Go Green in the City 2016 East Asia” regional semifinals on June 10. If Domer and Fernandez wins this leg, they will represent the region in the “Go Green in the City” Grand Finals in Paris, France. Two Philippine teams have made it to France in previous “Go Green in the City” editions. The most recent ones included John Paul Santos and Christian Santa Romana of the Polytechnic University of the Philippines who won second runner-up in last year’s competition for their electrifilter device. The device generates electricity from dirty water as it gets filtered and cleansed. Rizal Raoul Reyes
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IT’S NIBALI! Sports Rizal Raoul Reyes
Vincenzo Nibali’s chances of repeating his 2013 feat seemed impossible on Friday before a dramatic two days in the 99th edition of the Italian classic saw the Astana cyclist surge into the lead, helped by the Dutch rider’s crash into a snowbank.
BusinessMirror
VICENCIO NIBALI kisses his second Giro d’Italia trophy. AP
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| TUESDAY, MAY 31, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana
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ARIS—When Shelby Rogers finished last season at No. 146, she set a rather modest goal for 2016: boosting her ranking enough to gain direct entry into Grand Slam tournaments so she wouldn’t need to go through qualifying rounds. She managed to accomplish that for the French Open—but barely. At No. 108, the 23-year-old American was the last player admitted to the field at the time of the rankings cutoff last month. Maybe it’s time to aim higher, because just look at her now. By beating a seeded player at Roland Garros for the third time in a week, Rogers reached the first major quarterfinal of her nascent career with a 6-3, 6-4 victory over No. 25 IrinaCamelia Begu of Romania on Sunday. In the last 30 years, only five women ranked lower than Rogers have made it to the quarterfinals at the French Open. “I keep reminding myself to play one point at a time and that this is just another tennis match. But that’s getting a little bit harder to do as the rounds get farther,” said the 23-year-old Rogers, who is from South Carolina.
“I have nothing to lose. I have no pressure. It’s just been a great experience here, and I want to keep enjoying it and keep pushing myself,” Rogers said. “I’m definitely outside of my comfort zone already, and I keep telling myself: You belong here. You belong here.” Certainly does. She pushed Begu around the court, producing a 9-3 edge in forehand winners, while using the same deep, flat
IN this file photo, a homeless man sleeps on a pavement in Makati City. Beside him is a poster of a condominium building that will be built at his temporary shelter. NONIE REYES
IT’S NIBALI!
LOOK AT SHELBY NOW
groundstrokes that dictated points against her previous opponents, including No. 10 Petra Kvitova, a two-time Wimbledon champion, and No. 17 Karolina Pliskova. “I was way behind the baseline,” Begu said, “and she was just controlling the game.” When it ended, Rogers dropped her racket and covered her face with both hands. Soon enough, she was crying, so much so that Rogers was handed a tissue by 2013 Wimbledon champion Marion Bartoli, who conducted the on-court interview afterward. Not that the emotional display was anything new for Rogers. “One-hundred percent, tears all the time. Sad, happy, hungry, reading a book, watching a movie. They flow very easily,” she said through a wide smile
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URIN, Italy—Riding a completely pink bicycle and patting his teammates, home favorite Vincenzo Nibali clinched a second Giro d’Italia victory and a fourth Grand Tour title on Sunday but Giacomo Nizzolo’s hopes of a first stage win were again dashed as he was disqualified. Nibali’s chances of repeating his 2013 feat seemed
impossible on Friday—as he started the stage nearly five minutes behind leader Steven Kruijswijk—before a dramatic two days in the 99th edition of the Italian classic saw the Astana cyclist surge into the lead, helped by the Dutch rider’s crash into a snowbank. “It’s been an extremely difficult, Giro but there is great joy now,” Nibali said. “It was a beautiful emotion for the whole route, then coming into this circuit, with this enormous crazy crowd...I’m speechless.
at her news conference. “Those little puppy commercials: ‘Adopt a puppy.’ No, change the channel. Can’t do it.” Only once before had Rogers even been as far as the third round at a major tournament, losing at that stage at last year’s US Open as a qualifier. Otherwise, of her nine previous Grand Slam appearances, six ended in the first round, the others in the second. Rogers’s next test comes against No. 4 Garbine Muguruza, the 2015 Wimbledon runner-up, who will be playing in her third consecutive quarterfinal at Roland Garros after overwhelming 2009 champion Svetlana Kuznetsova, 6-3, 6-4. AP
SHELBY ROGERS reaches the first major quarterfinal of her nascent career. AP
Spieth finds perfect cure F
ORT WORTH, Texas—Jordan Spieth found the perfect cure for his Masters misery. With an impressive back nine at Colonial, Spieth won at home in Texas for the first time on the Professional Golfers’ Association (PGA) Tour. He had three consecutive birdies after making the turn, and three more in a row to finish his five-under 65 on Sunday, including a chip-in birdie from behind the 17th green after a fortunate bounce off a marshal. “In our third tournament back, to come back and close this one out the way we did is really, really special,” Spieth said. “This day is a moment that’ll go down, no matter what happens in the next 30 years of my career, this will be one of the most important days that I’ve ever had.” The second-ranked Spieth punctuated his eighth career victory with a 34-foot birdie putt when he needed only a bogey to win the Dean & Deluca Invitational. At 17-under 263, Spieth finished three strokes ahead of Harris English (66). Colonial member Ryan Palmer and Webb Simpson tied for third at 13 under, both shooting 68 in the final group with Spieth. Last month at Augusta, Spieth blew a five-stroke lead on the back nine when trying to win the Masters for the second year in a row. There was then an extended break before he missed the cut at The Players Championship and then finished tied for 18th a week ago at the Byron Nelson before finally winning in the Lone Star State after three runner-up finishes there, including Colonial last year. “The significance of it happening now...because I wasn’t sure how long it would take to get over the hurdle of having to come in to every single interview room, having to listen to crowds only talk about what happened a month ago,” he said. “And it’s very difficult, and I’m 22. It’s not like I hadn’t won, and we’ve won two majors.” He is the reigning US Open champion, and will be trying to defend that title at Oakmont in three weeks. Spieth started Sunday at Hogan’s Alley with nine consecutive pars, including a 32-footer at the par-3 eighth after hitting his first shot into heavy rough. “The nerves hit me more than I think they should have or normally would just
from the start of the round today, and that’s probably it,” he said, referring to Masters. There was also the guy in the gallery at No. 10 that yelled out “Remember the Masters, Jordan” and other similar comments. While Spieth wasn’t sure if they were positive or negative reminders, they certainly provided some motivation. Spieth made a curling 20-foot birdie at the 10th before a pair of short birdies, then hit a wayward tee shot at the 192-yard 13th, almost immediately pointing his 7-iron to the left and shouting “Fore!” He yanked his ball out of the bunker over the green before a chip to inside 3 feet for a bogey. Then at 14, after hitting his drive into a fairway bunker and shouting after his approach short of the green, he saved par with a 14-footer that rolled just to the right edge before falling into the cup. After a 20-foot birdie at the par-3 16th, Spieth hit a wayward tee shot at the 17th. The ball ricocheted off the lower leg of a marshal and avoided going into much heavier rough. Spieth signed a glove “Thanks” to the marshal, but his approach from 173 yards sailed over the green before he chipped in after relief because it landed against a temporary grandstand. “One of the luckiest holes I’ve ever had personally. I hit a guy on the side on the tee ball that goes into the first cut, and then I get that drop and then chip in,” he said. “If I’m anyone playing against me, I’d be pretty upset at that.” Nearly two months before his 23rd birthday, Spieth broke a tie with Tiger Woods for wins at age 22 or younger. The only player with more that young was Horton Smith with 14 from 1928-30. With the first-prize check of $1.2 million, and a plaid jacket to go with the green one from the Masters, Spieth has earned more than $24 million on the PGA Tour. When the final group was introduced before teeing off at No. 1, in the shadow of the Wall of Champions, the applause and cheers for Palmer were as loud as those for Spieth. AP
“The hardest day was the time trial, it didn’t go as I wanted, the feelings weren’t great, I wasn’t going well, I had a few stomach problems, then had a bit of a down moment. But in the last week I started to feel better and now I’m at the top of the GC. To be here today with all my family is amazing.” Sunday’s final leg, a flat 163-kilometer route from Cuneo to Turin, should have been mostly a coronation procession but it was also not short of drama—although this time not in the overall standings. With several crashes and the rain falling heavily, the race was neutralized and Nibali knew he just had to finish safely to secure the pink jersey. And a few meters short of the finish line, he acknowledged his achievement, patting his teammates on the back and bumping fists with them before sitting up in his saddle, pulling down the jersey to show it off fully and then lifting his arms into the air. Nibali finished with a total time of 86 hours, 32 minutes and 49 seconds, 52 seconds ahead of Esteban Chaves. Alejandro Valverde was third, 1.17 behind Nibali, with Kruijswijk finishing outside the podium, nearly two minutes off the pace. It appeared to be a double celebration for Italy as Nizzolo, so often the Giro’s nearly man, sprinted to victory but he was declassified after the race jury reviewed the sprint and judged he had veered into the line of Sacha Modolo, impeding his compatriot. The win was awarded to Nikias Arndt with Matteo Trentin second and Modolo third. “This is not the way I would have wanted to win a stage at the Giro,” Arndt said. “I wish I had won one before today. I’ve been hunting a win for three weeks. But the jury has made its decision and there’s nothing we, as riders, can do about it. I’m happy that I have a Giro stage win under my belt. I did a good sprint today anyway.” Nizzolo has finished second nine times at the Giro, and third a further four times. “Today I had crowned a dream to win a stage and instead that dream has been transformed into a nightmare,” Nizzolo said. “I have to accept the jury’s decision even if in my opinion it is an unjust one. “Tonight I will go home not happy but with the knowledge that I have won because I’m worth a Giro stage. Modolo wasn’t even second and wasn’t even half a bike length behind.” His Trek-Segafredo team posted a series of tweets, culminating with: “In our hearts we know who was the fastest in stage 21 at the 2016 #Giro.” In Medellin, Colombia, hometown bet Mariana Pajon has won the women’s elite race at the BMX world championships, while Joris Daudet of France took the men’s title. American riders Alise Post and Nicholas Long each finished third in the finals of their respective races on Sunday, automatically qualifying them for a spot on the US Olympic team for the Summer Games in Rio. Pajon, the 2012 Olympic gold medalist, finished with a time of 41.385 seconds on a track named in her honor in her home country. Australia’s Caroline Buchanan was second, 0.927 seconds behind the Colombian. Post took third after finishing 1.476 seconds back. Daudet, a 2012 Olympian, had a winning time of 36.737 seconds, edging Niek Kimmann of the Netherlands by 0.048 seconds. Long was 1.643 seconds behind in third. AP
SPORTS
WITH an impressive back nine at Colonial, Jordan Spieth wins at home »in Texas for the first time on the Professional Golfers Association Tour. AP
B C U. O M G C. P @cuo_bm
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Second of three parts
HE Philippines’s recent economic performance has paved the way for many economists to believe the country is no longer the “Sick man of Asia.” The strong performance of the economy under the Arroyo and Aquino administrations led to improvements in its competitiveness rankings and the recognition that the country’s credit rating was, indeed, investment grade.
PESO EXCHANGE RATES n US 46.6680
However, over 10 million Filipinos are still unemployed and underemployed. Underemployed Filipinos are those who are looking for additional sources of income or better working conditions.
Negative relationship
DATA from the Philippine Statistics Authority (PSA) in January 2016 showed there were 10.348 million Filipinos who are either jobless or looking for decent employment. This is composed of 7.879 million underemployed and around 2.469 million unemployed. C A
Manny B. Villar
OME interesting statements made by Democratic Party presidential candidate Bernie Sanders last week quickly became a sensational topic in the US press.
He was quoted by CNN, citing an Associated Press report, as saying that he is seeking the nomination because “democracy is messy. But if you want everything to be quiet and orderly and allow, you know, things to proceed without vigorous debate, that is not what democracy is about.” C A
Bonds fall with emerging markets as dollar gets lift from Fed’s Yellen
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STUDY: GEN Y ADOPTION OF PFM APP HIGHER THAN GLOBAL AVERAGE Editor: Dennis D. Estopace • corp@businessmirror.com.ph
The Entrepreneur
HE Fed factor dominated global markets, battering bonds and developing-nation currencies while lifting the dollar. Treasury 10-year futures slid the most in almost two weeks and German bunds declined after Federal Reserve (the Fed) Chairman Janet Yellen said an interestrate increase is likely in coming months. Emerging-market currencies headed toward the worst month since August and gold fell for a ninth day in its longest losing streak in a year. The dollar strengthened against most of its 16 major peers. European stocks swung between gains and losses, with trading volumes less than half the daily average, amid market closures in the United States and United Kingdom. The Bloomberg Dollar Spot Index was poised for its biggest monthly jump since September 2014, having surged as Fed eral Funds futures showed the odds of a US interest-rate hike by July more than doubled to 54 percent. Yellen said on Friday that an improving American economy would probably warrant another increase in borrowing costs “in the coming months,” a view also expressed by several regional Fed chiefs in recent weeks. “What Yellen said confirmed the Fed is open for a June rate increase, and it’s now data dependent,” said Carl Hammer, chief currency strategist at SEB A/B in Stockholm. “The Fed might be on hold next month due to Britain’s European Union referendum, but then make it explicit there will be an increase in July. Our view is that there’s more room to add to
positive dollar bets.” Yellen spoke after data showed US economic growth picked up more than was previously estimated in the first quarter. Reports scheduled for this week include April personal income and spending, and May payrolls.
Bonds TENYEAR Treasury futures contracts for September delivery slid 13/32, or $4.06 per $1,000 face amount, to 129 9/32, based on electronic trading at the Chicago Board of Trade. German 10-year bunds fell, with yields rising three basis points to 0.17 percent, erasing their three-basis point drop in the previous week. Yields on similar-maturity French bonds rose four basis points to 0.51 percent. Commodity trader Noble Group Ltd.’s dollar bonds due January 2020 climbed to their highest since November, pushing their yield down by 31 basis points to 15.79 percent. The company announced plans to sell some of its US operations and said CEO Yusuf Alireza has resigned, with two coheads set to replace him. “The resignation of the CEO is good news for bondholders, as it shows that the board is serious about stabilizing the company’s profile by taking a less aggressive approach,” says Charles Macgregor, head of Asian high-yield research in Singapore at Lucror Analytics. “The sale of the Americas Energy Solutions will generate meaningful cash that should resolve liquidity concerns.” S “B,” A
n JAPAN 0.4228 n UK 68.2053 n HK 6.0093 n CHINA 7.1086 n SINGAPORE 33.8223 n AUSTRALIA 33.4890 n EU 51.8761 n SAUDI ARABIA 12.4431
Source: BSP (31 May 2016 )
A2 Tuesday, May 31, 2016
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Inclusive growth course a tortuous road for poor C A
The recent data was not surprising given the growth of employment generation nationwide in the past 33 years. Ateneo Center for Economic Research and Development (ACERD) Director Leonardo A. Lanzona Jr. said the country’s employment generation remained slow. Lanzona said that, between 1978 and 2011, the employment rate nationwide only averaged 2.77 percent, or 640,000 jobs annually. He noted that, without decent jobs, millions remain poor. Poverty is greater among fishermen, where poverty incidence in 2012 is at 39.2 percent and 38.3 percent among farmers. What exacerbates the problems confronting farmers and fishermen is their apparent inability to cope with climate change. Data from the PSA showed that farm output declined by 0.96 percent in the last quarter of 2015 and by 4.53 percent in the first quarter of 2016. In a report, the PSA said the steep decline in crop and fisheries output in January to March was due to the prolonged dry spell and damages caused by typhoons Lando and Nona. Agricultural think tank Meganomics Specialist International Inc. President and CEO Pablito M. Villegas told the BusinessMirror the poor growth of the sector reflects
Internet. . .
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Both companies will equally share in the assets of these companies and their subsidiaries. These companies control Bell Telecommunication Philippines Inc., Eastern Telecommunications Philippines Inc., Cobaltpoint Telecommunication Inc., Tori Spectrum Telecommunication Inc., Hi-Frequency Telecommunication Inc., eTelco Inc. and New Century Telecoms Inc. Half of the sale price will be paid at the close of the transaction with the balance paid in two equal installments six and 12 months from closing date. “ T his transaction of fers a breakthrough opportunity, not only for the companies involved, but also for the industry and the country,” PLDT Chairman Manuel V. Pangilinan said. When talks between San Miguel Corp. and Telstra Corp. Ltd. collapsed two months back, negotiations for the possible acquisition of the food-to-infrastructure conglomerate’s telco assets subsequently happened. Duopoly emissaries were deployed for the possible acquisition of San Miguel’s telecommunications business, which holds the rights to operate services via the
“badly” on the Aquino administration’s antipoverty efforts. “The Aquino administration allotted more than P250 billion to the agriculture sector for the past six years. But on the average, it has produced only a growth rate of about 1.5 percent. That is disappointing,” Villegas said. “That is not contributing to inclusive growth, because the farmers are now even poorer,” he added. Lanzona also noted that poverty is greater among the employed than the unemployed. He said the poverty rate among the employed was at 21.9 percent and among the unemployed, 18.7 percent in 2012. “[There is a] negative relationship between unemployment rates and job generation,” Lanzona said in 2014. “The Philippines needs to generate around 14.6 million jobs over the next four years.”
Lethargic growth
UNIVERSITY of Asia and the Pacific School of Economics Dean Cid Terosa said millions of Filipinos remain unemployed due to “deficient education and health services.” The Aquino administration, however, gave special attention to social services. The outgoing administration doubled its spending for social services. However, the government has been criticized for prized broadband assets. According to San Miguel President Ramon S. Ang, he is convinced the proposal presented by rival telcos was the most expedient, feasible and in the best interest of the consumers, the stockholders and all parties involved given the current situation. “This is a sacrifice we have to make to finally unlock the full potential of our high-quality, mobile broadband spectrum faster and allow consumers access to its benefits through the combined resources, network and expertise of the two carriers,” he said.
Better services?
UNDER the deal, the 90-percent shareholding of San Miguel in the 700 MHz band will be distributed to the two telcos and the government. The telcos will each get 35 MHz, while the remaining 20 MHz will be returned to the governmentOperating mobile Internet services under the 700 MHz spectrum is cheaper and more efficient than operating under higher-frequency bands. The radio-frequency spectrum is the real estate upon which the telcos develop their respective network to deliver services to customers. The amount of spectrum assigned to a telco has cost implications on capacity, overall network performance, ability to offer new multimedia
underspending. Terosa said better education and health services will improve the chances of the poor to increase the market value of their labor. “Although economic growth has been sustained for several years, growth of social welfare has been slowed by the lethargic growth of income of those in the lower income classes. This can be traced to employment for the poor,” Terosa said. University of the Philippines (UP) School of Economics Prof. Benjamin E. Diokno said job generation is also linked to population services and general customer experience of wireless services. The 700 MHz band has a key role in expanding mobile broadband into the rural areas of the country, enable mobile operators to cut capital and network costs, thereby accelerating rollout and lower the price for end users, according to a report put out by the international telecommunications association GSMA. Utilizing the 700 MHz spectrum would allow the deployment of a high-capacity LTE based wireless and fixed broadband network to deliver higher data rate and LTE wireless broadband service. With the use of the 700 MHz frequency, broadband prices can go down further benefitting consumers. “This will enable existing operators to provide significantly improved Internet and data services to the public and to our customers in the shortest possible time. At the same time, it leaves the door open for new entrants into the industry,” Pangilinan explained. “Taken together, this will enable the industry to better support the country’s development efforts—especially significant with the onset of a new government.” He said consumers should feel the effects of the deal within six months. This will be limited to those using high-end devices, since mobile devices that allow the use
growth. On May 30 Diokno accepted the offer to lead the Department of Budget and Management (DBM) under the Duterte administration. Diokno, who was also part of the UP School of Economics position paper on reproductive health in 2008, said poor households tend to have more children and this compounds the employment problem and, consequently, exacerbates poverty.
Weak commitment
THE 2008 position paper of the UP School of Economics stated of the spectrum is still small. Globe President Ernest L. Cu vowed that his company—which claims a 70-percent share in the mobile-data market in terms of the data accessed through its network —will deliver better services in the next three to four months. “Ultimately, our goal is to provide our customers with a better experience on our mobile data and home broadband services progressively over the next 12 months,” he said. For Mary Grace Mirandilla-Santos, an independent researcher on information and communications technology (ICT) and telecommunications policies, the two companies’ access to the precious 700 MHz band will pressure telcos to deliver their heavenly promises. “This is a challenge for the two telcos to improve service since they’ve been touting the 700 MHz as, seemingly, a panacea to the Philippine Internet problem. But any industry observer knows that any particular spectrum is not the only missing link to the Philippine Internet problem. Lack of infrastructure, like cell sites, poor interconnection and, most important, the lack of competition, hampers improvements in Internet service,” she told the BusinessMirror.
Thwarted competition
ALSO as part of the deal is the giving up of the small telcos of certain radio frequencies in other frequencies, such as the 850 MHz 2,500 MHz and 3,500 MHz bands and returning these radio frequencies to the national government through the National Telecommunications Commission (NTC). “As part of this transaction, both entities have also agreed to return a lot of frequency assets to the government that will allow a third player to enter the market. This supports the stand of the president the telcos should improve service in the country or risk opening the industry to a third party,” Cu said. Edgardo V. Cabarios, the deputy commissioner of the telecommunications regulator, told the BusinessMirror the companies will return the following frequencies: “20 MHz of the 700 Mhz band, 15 MHz of the 2,500 to 2,700 MHz band, 40 MHz of the 3,400 to 3,500 MHz band, and 10 MHz of the 800 MHz band.” Despite this, experts are firm in their belief that competition in the market had been thwarted. “The transaction, for the short term, strengthens the status quo even more—the status quo being
that more children in households tend to decrease their investment in education and other basic needs, which are key in getting decent employment and breaking intergenerational poverty. The paper stated that using the latest available data at that time showed average annual spending on education per student decline to only P682 for a family with nine children, from P5,558 for a one-child family. Average health spending also dropped to P150 per child for families with nine or more children, from P1,700 for a one-child family, the paper, whose lead author is incoming Economic Planning Secretary Ernesto M. Pernia, read. As a result, the economists said poverty incidence is less than 10 percent for a family with one child and 57 percent for a family with nine or more children. “[One] reason is the weak government commitment to family planning,” Diokno said. “A typical poor household would tend to have more children than a typically rich household.”
Debt servicing
APART from these challenges, joblessness and poverty persist in a high-growth economy, because economic and development the effective duopoly of PLDTSmart and Globe Telecom. It is even worse for the long term; the ability for a third player and more to enter is now significantly weakened,” consumer group Democracy. Net.PH Cofounder Pierre Tito Galla told the BusinessMirror. Santos backed this claim, noting that the real winners are the three companies. “The deal is a win situation for the telcos. San Miguel will no longer have unused telco assets and pressure to invest more to use them. PLDT and Globe will have more concentrated power over a majority of the telco assets in the country,” she said. Santos added: “For consumers, well, we’ll have to wait and see if we’ll benefit from this one. Let’s see if the two telcos’ service will, indeed, improve. This means better quality of service parameters, faster download and upload speeds, lower latency and lower price—these two in tandem, not separately. But, really, more concentrated market power has never led to a consumer win.” San Miguel’s supposed entry in the Philippine telecommunications market would have meant stronger and fiercer competition. No thanks to this deal, the possibility of a third player in the near term has been eliminated. “The deal will result in less competition among current players. For a while, San Miguel effectively projected itself as the potential third telco. In doing so, it also effectively upped the value of its telco assets, which in the past was ignored by the other telcos,” Santos explained. Galla noted: “As it strengthens the status quo and hampers the entry of new players, subscribers can expect no significant improvements in access, penetration, quality of service and price.” “Because of the strengthening of the dominant positions of the effective duopoly by the two dominant carriers, pricing may or may not improve. It may even get worse, with the increase in the potential for collusive behavior, predatory pricing and business practices, such as fair-use policies even more skewed heavily against subscribers,” he added. For International Data Corp. (IDC) Philippines Country Head Jubert Alberto, the transaction is a double-edged sword on the part of the consumers, as this could mean improved services but at very uncompetitive prices. “IDC believes this could be
policies have only favored the rich, members of non-governmental organization Freedom from Debt Coalition (FDC) said. The FDC said among these policies is the government’s efforts to prioritize debt servicing over social spending. This is despite the government’s expansion of its Conditional Cash-Transfer (CCT) Program. The FDC explained that automatic appropriations for debt servicing became a law under the term of President Ferdinand E. Marcos. This meant that debt payments have taken the first cut in the national budget before appropriations are made for vital social services. This, FDC said, prevented the government from lifting millions of Filipinos from poverty. FDC President Ed Tadem said inequality in the country in 2013 was the highest in the Asean. “Economic growth as measured by the GDP has, indeed, grown under Mr. Aquino,” Tadem said. “But this pales in comparison to continuing high poverty levels, joblessness and rising income inequality, the P6.4-trillion public debt to be inherited by the next administration and the billions of pesos wasted in payments for fraudulent, wasteful and questionable loans.” a double-edged sword. On one hand, this investment will benefit the consumers because the incumbents can have this [made] available nationwide. With this, more consumers are expected to enjoy the improved Internet connection through the combined efforts and established capabilities of the two carriers. On the other hand, the duopoly in the market does not spur competition, hence, would not create significant changes on the pricing,” he told the BusinessMirror.
Review allocation
SINCE competition has been limited, Galla and Santos proposed a critical but difficult task: for the government—especially the Philippine Competition Commission (PCC)—to “refarm” the soft assets and reassign them accordingly. “What is necessary for the PCC and the NTC is to review the entire spectrum allocation, not just the 700 MHz band, and review and re-farm the allocation of the 700, 850, 900, 1800, 1900, 2100, 2500 and 3500 MHz bands,” he said. He said the government provide frequency allocations reserved for the bidding of future players attracting as many as five additional service providers—and have the two existing players bid for frequency allocations across each band, with an upper limit cap. “Through this, future competition can be assured, anticompetitive practices involving spectrum allocation can be minimized, and the government can earn from fair spectrum auctions,” he added. Santos explained that a telco does not own a spectrum even when a specific range of frequency has been assigned to it. “One is simply given the right to use the spectrum. The state, as a matter of public interest, can and should re-farm and reallocate spectrum as necessary. But this goes for all spectra, not just the 700 MHz. The right to use is stated in a Congressional franchise. So this ‘acquisition’ is something that the NTC—or even Congress—should seriously study,” she said. Instead of negotiations, she suggested for the government to subject valuable bands to an auction, while reserving some for new entrants. Cabarios noted this method was not practical given that the companies are already operating with over a hundred million customers who may be adversely affected by such a feat. With reports by Lenie Lectura and Bloomberg News
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DENR sets PHL forest-expansion target for low-carbon devt path T B J L. M
@jonlmayuga
HE Philippines needs to sustain its massive tree-planting program and expand its forest cover by an average of 300,000 hectares every year to ensure a low-carbon development path, an official of the Department of Environment and Natural Resources (DENR) said.
300,000 ha The government’s yearly reforestation goal under its National Greening Program
Achieving such annual forestexpansion goal is crucial in fulfilling the country’s international commitment under the Paris climate accord, specifically to reduce carbon emission by 70 percent by 2030 under a “ business-as-usual scenar io” to help limit globa l
temperature increase below 1.5 degrees, Director Ricardo L. Calderon of the DENR’s Forest Management Bureau told the BusinessMirror in an interview. The massive treeplanting activities will also ensure supply of raw materials to sustain the growth of wood industry, Calderon, also national coordinator of the National Greening Program said. Based on current production capacity, the Philippines needs to produce an additional 3.5 million cubic meters of timber, logs or lumber or cumulatively its round wood equivalent every year. He said the countr y currently produces only around 1 million cubic meters of round wood as against the estimated 4.5-million-cubic-meter estimated current demand by the wood industr y for assorted wood and wood-based products, including lumber, ply wood and veneer. “Forest expansion is the only
way to hit the country’s ambitious carbon-emission-reduction target without compromising targeted growth in terms of GDP,” he said. Of the 70-percent “conditional” carbon-reduction target, 40 percent have, so far, been accounted by the government. Of the 40 percent, 38 percent will come from forest, while the remaining 2 percent will come from energy, agriculture and solid waste. “We submitted a 70 percent commitment sa reduction ng ating GHG [greenhouse gas], specifically carbon. Of the 70 percent, conditional submission yun, anchored on the capacity-building and technical guidance that could be provided to us by developed countries,” he said. Accounting for the balance of 30 percent to hit the country’s carbon-emission target of 70 percent remains a big challenge, Calderon said. “That is the bigger challenge
for the Climate Change Commission [CCC]. We could increase our efforts in forest rehabilitation and protection so that we will be able to increase that 38 percent that will come from forestry,” he said. “For us to f u lf i l l our commitment, we will have to invest more on forest protection and sustain our reforestation and forest-protection efforts. This is ver y crucial. If we will be able to expand our forest by 300,000 annually by 2030, based on our INDC [Intended Nationally Determined Contribution] submission, we could safely [say] that we are compliant as far as the signed agreement is concerned. This is a legally binding treaty,” he reminded. Accord ing to Ca lderon, because the Philippines is a developing country, it needs to increase the carbon-absorption capacity through forest expansion, so as not
to hinder growth with the use of more power or energy by industries. It is estimated that the country’s carbon emission is increasing at an annual rate of 1.3 percent for every 1-percent growth in the GDP. He said that, while there is a good prospect in shifting to renewable-energy (RE) sources, estimated carbon-emission reduction from energy sector will still not suffice, and may even affect growth if the country will not invest substantially in geothermal, solar and other RE projects to go with massive reforestation. “ B a sed on ou r d i sc u ssion s [w it h] t he DE N R , re ne w a bl e energy is just one of the solutions. But so as not to constrain development, we need invest on forest protection and rehabilitation [and]… increase public expenditure in the aspect of forest protection and rehabilitation,” Calderon added. Continued on A4
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DFA welcomes G-7 stand on West Philippine Sea
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B R M
@rectomercene
HE Department of Foreign Affairs (DFA) on Monday lauded the Group-of-Seven (G-7) group of nations’ strongly worded statement that warned of maritime tension in Asia, and called for the peaceful settlement of disputes in the West Philippine Sea in accordance with the United Nations Convention on the Law of the Sea (Unclos).
“The Philippines welcomes the statement as it underlines the G-7’s abiding commitment to support efforts to peacefully manage and settle the disputes in the South China Sea in accordance with the 1982 UN Convention on the Law of the Sea, through mechanisms recognized by international law, including legal procedures such as arbitration,” the DFA said in a statement. “The Philippines reiterates that it will fully respect the outcome of the tribunal process in good faith.” “We consider the G-7’s position to be of critical significance, as the international community awaits the outcome of the arbitral process that was initiated in 2013 with respect to the South China Sea,” the DFA added. “The G-7’s consistent and firm position on this matter reflects the
international community’s understanding and support for the Philippines’s principled and rules-based approach for addressing disputes in the West Philippins Sea.” The G-7 industrialized countries issued the statement in Ise-Shima, Japan, during a two-day summit that started on May 24. G-7’s discussions focused on the global economy and international security. Other summit topics included terrorism, cybersecurity and maritime security, including China’s assertiveness in the East and South China seas, where the country has territorial disputes with Japan and several Southeast Asian nations, including the Philippines. The G-7 statement did not mention China, although it was clearly aimed at the rising superpower,
which has conducted unprecedented land reclamation in the West Philippine Sea portion of the South China Sea. None of the G-7 member-nations is a claimant to the disputed areas, believed to be rich in gas and oil deposits and where some $5 trillion worth of trade sails through annually. The G-7 industrialized countries is comprised of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. As expected, China’s Foreign Ministry strongly disagreed with the G-7 statement. Lu Kang, a spokesman for the Chinese foreign ministry, noted that China was “strongly dissatisfied with relevant moves taken by G-7.” Lu urged “G-7 members to abide by their promise of not taking sides on territorial disputes, respect the efforts by regional countries, stop all irresponsible words and actions, and make constructive contribution to regional peace and stability.” “Given the sluggish global economic recovery at the moment, G-7 should have focused on global economic governance and cooperation instead of hyping up maritime issues and fueling tensions in the region,” Lu added. China’s vehement reaction comes at a time when the Permanent Court of Arbitation in The Hague is expected to come out with a ruling, following three years of arbitration. China, from the start, has said it
A FILE photo from 2008 shows the beach on Philippine-occupied Pag-asa island, the largest of the disputed Spratly Islands in the South China Sea. BLOOMBERG
We consider the G-7’s position to be of critical significance, as the international community awaits the outcome of the arbitral process that was initiated in 2013 with respect to the South China Sea.”—DFA will not respect the ruling. During their meeting the leaders acknowledged they could expect a firm response from China, but resolved to present a united response as a signal to nations that selectively adhere to international law, according to a G-7 official briefed on the
Oil states expected to stick with Saudis: Opec reality check
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RGANIZATION of Petroleum Exporting Countries (Opec) members gathering in Vienna on June 2 are expected to go along with a Saudi Arabia-led policy focused on squeezing out rivals, amid signs the strategy is working. That means the meeting may be less fraught than the previous summit in December, which ended with public criticism of the Saudi position from Venezuela and Iran. By allowing prices to fall, highcost producers are being forced out, easing the supply glut and spurring a rally of 80 percent since January to about $50 a barrel. All but one of 27 analysts surveyed by Bloomberg said the Opec will stick with the strategy. An alternative proposal—to freeze output—was finally rejected in Doha last month. The group may also choose a secretary-general to replace Abdalla El-Badri, whose term has been extended after members failed to agree on a successor. In recent months three new hopefuls have emerged to try and break the impasse: Nigeria’s Mohammed Barkindo, Indonesia’s Mahendra Siregar and Venezuela’s Ali Rodriguez. Following are the latest comments from Opec members and analysts. The respective shares of supply are based on April levels. The estimates for the price each member needs to balance its budget are from the International Monetary Fund, unless stated otherwise.
ALGERIA
PRICE needed: $87.6. Share of Opec production: 3.3 percent. Algeria tried, and failed, last year to organize a meeting of non-Opec/Opec members to push for output cuts, as years of declining crude production and low prices weighed on its fiscal deficit. A freeze by producers is needed immediately to stabilize prices, Salah Khebri, minister of energy and mines, said in an interview mid-May. “Our main message to the next OPEC meeting is that it needs to restore unity and work for the benefit of all members collectively,” he said.
ANGOLA
PRICE needed: $93.14 (RBC Capital Markets). Share of Opec production:
$50 The current average price of a barrel of oil
5.4 percent. Angola is seeking an International Monetary Fund loan as state revenue plunges. Its overreliance on strong oil prices leaves savings and levels of inward investment ‘‘highly vulnerable’’ to swings in the global economy, Fitch unit BMI Research said in e-mailed report.
ECUADOR
PRICE needed: $75.16 (RBC Capital Markets). Share of Opec production: 1.7 percent. Ecuador supported an oil-output freeze at the Doha meeting. Minister Jose Icaza met with his Venezuelan counterpart before the summit to discuss prices and seek to agree on a unified position. Icaza became Ecuador’s new oil minister in early May following the resignation of Carlos Pareja.
INDONESIA
UNLIKE other Opec members, Indonesia is still a net oil importer so the fiscal break-even concept is not applicable. Share of Opec production: 2.2 percent. Indonesia rejoined Opec at the December 4 meeting, seven years after suspending its membership. It will stick to its plan to increase oil output this year even if some of the world’s biggest producers move to cap production, Energy and Mineral Resources Minister Sudirman Said said in February.
IRAN
PRICE needed: $61.5. Share of Opec production: 11 percent. The Persian Gulf nation is rebuilding its energy industry and restoring crude sales after the lifting of international restrictions in January. Exports are already at 2 million barrels a day, just short of presanctions levels, the IEA said in
a recent monthly oil market report. The head of the state oil company said the country—a key advocate of output restraint in previous years—has no plans to join any output freeze as it remains focused on restoring exports.
IRAQ
PRICE needed: $59.7. Share of Opec production: 13 percent. Production has jumped more than 40 percent since mid-2014 and exports are at near-record levels. But plunging government revenue is hampering the state’s ability to invest, and Opec’s second-biggest crude producer is reaching the limits of its capacity to store and export oil, according to analysts at Energy Aspects Ltd. and FGE. Oil Minister Adel Abdul Mahdi resigned in February, amid ongoing political turmoil. His duties are being carried out by Fayyad Al-Nima.
KUWAIT
PRICE needed: $52.1. Share of Opec production: 8.7 percent. Kuwait plans to boost oil production to more than 3 million barrels a day within months, doubling output from where it stood during April’s oil-worker strike. Kuwait’s acting Oil Minister Anas Al-Saleh, said on May 18 that Opec’s policy “has been working well.”
LIBYA
PRICE needed: $195.2. Share of Opec production: 0.9 percent. Opec’s smallest producer. Competing administrations of Libya’s state-run National Oil Corp. in the east and west of the divided country agreed on May 17 to resume exports from Hariga port to help revive production, which has dropped 80 percent since the 2011 uprising that ousted Muammar Qaddafi. It isn’t clear if it will send anyone to the meeting; it didn’t attend the Doha freeze talks in April.
NIGERIA
PRICE needed: $104.49 (RBC Capital Markets). Share of Opec production: 5.1 percent. A resurgence in militant attacks in Nigeria’s oilproducing region has cut output to the lowest in 27 years, helping
buoy global prices. An armed group calling itself the Niger Delta Avengers has warned of more attacks to come.
QATAR
PRICE needed: $52.4. Share of Opec production: 2 percent. Mohammed Al Sada, Qatar’s minister of energy and industry who is also president of Opec, said global demand is catching up with supply and the market should see a “rebalancing” in the second half of the year as cheaper crude has forced some production to close. Qatar is expected to swing into a budget deficit this year, according to the IMF.
SAUDI ARABIA
PRICE needed: $66.7. Share of Opec production: 31 percent. Saudi Arabia will probably keep producing crude at near-record levels under new Energy Minister Khalid AlFalih, an ally of Deputy Crown Prince Mohammed bin Salman. Prince Mohammed scuppered the oil-freeze plan, and Al-Falih’s appointment points to an “exceedingly high probability that there will be no Saudi agreement to freeze, let alone cut, production,” analysts, including Ed Morse, said in an e-mailed note dated May 9.
UNITED ARAB EMIRATES
PRICE needed: $71.8. Share of Opec production: 8.9 percent. United Arab Emirates still supports stability in the oil market, said Matar al Neyadi, the undersecretary of the energy ministry.
VENEZUELA
PRICE needed: $121.06 (RBC Capital Markets). Share of Opec production: 7.4 percent. Venezuela is one of the so-called Fragile Five Opec members most at risk from significant instability, amid the turmoil in prices, according to RBC Capital Markets Llc. Energy Minister Eulogio Del Pino was one of the most ardent advocates of the failed production-freeze agreement. While the country’s economy remains in critical condition, Caracas is probably resigned to the course set by Riyadh, said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University in New York.Bloomberg News
discussions, who asked not to be identified, citing official policy. “We are concerned about the situation in the East and South China seas, and emphasize the fundamental importance of peaceful management and settlement of disputes, the communiqué said.
Japan is embroiled in a separate spat with China over uninhabited islets in the East China Sea. “We reaffirm the importance of states’ making and clarifying their claims based on international law, refraining from unilateral actions which could increase tensions and not using force or coercion in trying to drive their claims,” it said. During the last two years, China has engaged in large-scale reclamation and topping these with runways, radar facilities and other military equipment that has alarmed its Asian neighbors. China is a major trading partner for G-7 members and had warned against a focus on maritime tensions at a summit at which it was not present.
DENR sets PHL forest-expansion target for low-carbon devt path C A
This, he said, will also have to involve industries. Pr ivate-sector investment, Calderon said, is needed to establish more forest plantations. “We are still exporting around 3.5 cubic meters of round wood. That is why we are encouraging private-sector investment, including backyard tree farming,” he said. “We need to import 3.5 million cubic meters annually. Private sector should come in on that aspect. That is not happening at the moment,” he said. The NGP, which is on its sixth and final year of implementation this year, will be sustained through Executive Order 193, otherwise known as the Expanded NGP. “We really need legal supply of wood because of the laws prohibiting harvest from natural forest,” he said. “We are both importer and exporter of lumber. When we export, locals [wood manufacturers] are deprived of supply. In terms of raw materials, kulang tayo. But our exports, in terms of manufactured articles, is giving us positive trade balance,” he said. According to Calderon, under current policy environment, there is a bright prospect in establishing forest plantations. “Mas mataas ang premium ng plantation wood ngayon. Before, a cubic meter of plantation wood is bought per kilo [at a price of] P1,000 per kilo. Ngayon P4,000 to P4,500 per cubic meter,” he pointed out. “We are capable of producing enough raw materials for the wood industry. Plywood, veneer, pulp and paper, particle board,” Calderon said. In fact, he added, the Philippines is exporting wood and wood products, with China, Japan and the US as major importers. Calderon said in the wood industry road map being crafted by the DENR-FMB, along with various stakeholders, the establishment of more plantations will be promoted. However, a major problem being eyed is land tenure, he said.
“In forestry, walang problema. We have already addressed the problems. The problem is the Free, Prior and Informed Consent [FPIC] process as mandated by Ipra,” he said. Ipra refers to Republic Act 8371, or the Indigenous Peoples Rights Act, which promotes the right and welfare of indigenous cultural communities in the Philippines. Calderon said that, under the law, the DENR can’t issue permits for the establishment of forest foundations in lands covered with Certificate of Ancestral Domain Title (CADT), or even in lands being claimed as part of ancestral lands by indigenous peoples (IPs) without clearance from the National Commission on Indigenous Peoples (NCIP). Permitting requirements include certificate of noncoverage and FPIC. NCIP issues certificate of noncoverage or FPIC if the area is covered by CADT or being claimed by IPs, which requires a tedious process of consultation with the IPs. Calderon describes the FPIC as “very basic but very crucial requirements” under Ipra. “Business permit, you [may be able to secure] within 24 hours. [For an] NCIP clearance, it takes longer,” he said. “Investment in forest development needs faster processing of NCIP clearance.” According to Calderon, around 4.5 million hectares of forest are covered by CADT. But total land area with ancestral domain claims is estimated to be around 9 million hectares. “Ipra law should be facilitated by NCIP. The process is taking so long and very costly for potential investors,” he said. He also said that IPs are sometimes very demanding, which is discouraging investors. Currently, the country’s forest cover stands at around 7.8 million hectares. By the end of the year, because of NGP, it is theoretically going to be 8.1 or 8.2 million hectares. The prospect under E-NGP, he said, is to expand by around 4.5 million hectares of the remaining 7.1 million hectares of open, degraded and denuded forest by 2028.
The W
Business
A6 Tuesday, May 31, 2016 • Editor: Lyn Resurreccion
Trump speaks to veterans at motorcyclists’ rally
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CHILDREN play on bars before attending a class at the I Love Gym center in Beijing. AP/ANDY WONG
Allowed 2nd child, older Chinese parents turn to IVF
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EIJING—China’s decision to allow all married couples to have two children is driving a surge in demand for fertility treatment among older women, putting heavy pressure on clinics and breaking down past sensitivities, and even shame, about the issue. T he rise in in-v itro fertilization (IVF) points to the lost dreams of many parents who longwanted a second child, but were prevented by a strict populationcontrol policy in place for more than 30 years. That, in turn, is shifting prevailing attitudes in China regarding fertility treatments—formerly a matter of such sensitivity that couples were reluctant to tell even their parents or other family members that they were having trouble conceiving. “More and more women are coming to ask to have their second child,” said Dr. Liu Jiaen, who runs a private hospital in Beijing treating infertility through IVF, in which an egg and sperm are combined in a laboratory dish and the resulting embryo transferred to a woman’s uterus. Liu estimated that the numbers of women coming to him for IVF had risen by 20 percent since the relaxation of the policy, which came into effect at the start of the year. Before, the average age of his patients was about 35. Now most of them are older than 40 and some of the women are fast approaching 50, he said. “They have a very low chance to get pregnant, so they are in a hurry. They really want to have a child as soon as possible,” he said. Chen Yun is 39 and was in the hospital waiting to have the procedure for the first time. She
700K The number of women who had IVF in 2014
and her husband already have a 7-year-old son and their families are encouraging them to have a second child. “We are coming to the end of our childbearing years. It may be difficult for me to get pregnant naturally because my husband’s sperm may have a problem, so we want to resolve this problem through IVF,” she said. Chen said she hoped having a brother or sister would make their son happier, more responsible and less self-absorbed. “We had siblings when we were children. I had a younger sister and we felt very happy when playing together,” she said. “Now that every couple has one child, two generations—parents and grandparents—take care of the child. They give the only child too much attention.” If her son has a younger brother or sister to look out for, he may not “think too much about himself like a little emperor,” Chen said. Over the past two decades, IVF technology has developed rapidly
in China, where about 10 percent of couples are estimated to need the procedure to conceive. In 2014 700,000 women had IVF treatments, according to the health commission’s Women’s and Children’s Department, which said in a statement that demand for all types of fertility treatment had risen following the policy relaxation, including the use of traditional Chinese medicine. “Currently, fertility centers at renowned medical organizations in Beijing and Shanghai and others are under increased pressure for treatments,” the department said. P re v iou sly, C h i n a l i m ited most urban couples to one child and rural couples to two if their first was a girl. There were exceptions for ethnic minorities, and city dwellers could break the policy if they were willing to pay a fee calculated at several times a household’s annual income. While authorities credit the policy introduced in 1979 with preventing 400 million extra births, many demographers argue the fertility rate would have fallen anyway, as China’s economy developed and education levels rose. Intended to curb a surging population, the policy has been blamed for skewing China’s demographics by reducing the size of the future work force at a time when children and society face increasing demands from the growing ranks of the elderly. It also inflated the ratio of boys to girls, as female fetuses were selectively aborted, while compelling many women to have forced abortions or give up their second children for adoption, leaving many families devastated. The National Health and Family Planning Commission said last November that 90 million women would become eligible to have a second child following the policy change. Authorities expect that will add 30 million people to
the country’s labor force by 2050. Those projections could be overly optimistic, since many younger Chinese see small families, as ideal and would be reluctant to take on the cost of raising a second child. When the policy was changed in 2013 to allow two children for families, in which at least one parent was an only child, it spurred fewer births than authorities expected. A lso under pressure are China’s sperm banks, which already suffer shortages owing to a reluctance to donate among young Chinese men unwilling to father children they won’t know or fearing their offspring may turn up at their door one day despite donor confidentiality. “The relaxing of the one-child policy certainly gave an impetus to the demand for sperm as more women, usually aged around or above 35, came for assistance,” said Zhang Xinzong, director of the Guangdong Sperm Bank in southern China. Calls have also gone out for a loosening of China’s adoption law, which currently states that only couples with no children can adopt, while also allowing couples with one child to adopt a disabled child or an orphan. T he Mi n ist r y of C iv i l A f fairs didn’t respond to a question on whether the law would be changed, and it couldn’t say whether the number of couples seeking adoption had risen since the policy change. It said there were 109,000 children available for adoption in the custody of governmental institutions, 90 percent of whom were disabled and 60 percent severely disabled. Zhang Mingsuo, a professor at Zhengzhou’s University’s School of Public Administration, said few Chinese couples were willing to adopt disabled children “because they worry about the possible heavy medical expense.” AP
A SHINGTON—Donald Trump on Sunday promised better health care, a stronger military and new donations to veterans’ causes as he spoke at the annual Rolling Thunder motorcycle rally. “We’re not winning now…we certainly don’t win for our veterans,” the presumptive Republican nominee said to thousands of motorcyclists gathered at the Lincoln Memorial. “We are going to start winning so much. We are going to win, win, win.” But the cheers and applause Trump received from the veterans on Sunday belied some bumps in his relationship with the voting bloc after his remarks about prisoners of war and his failure to turn over all the money he raised for veterans in January. Trump holds a 9-percentage point lead with veterans over Democratic front-runner Hillary Clinton, according to a poll of more than 1,600 veterans conducted from May 13 to 24 by Morning Consult. Four years ago, Republican Mitt Romney led President Barack Obama by 24 points among veterans, a Gallup survey showed. Trump echoed many of his campaign themes, pledging to build a wall along the Mexican border and mocking Clinton. Unlike other rallies, Sunday’s event drew no visible protest. Trump promised to end long lines at Veterans Affairs hospitals and to announce more about his donations to veterans groups on Tuesday. Trump’s comments come after he has been under scrutiny in the media for failing to donate millions of dollars he said he raised for veterans in January at a fund-raiser he held instead of attending a Republican presidential debate hosted by Fox News. At the time, Trump said he raised $6 million for veterans, including $1 million from his own
pocket. Reports since then have indicated the total was less and that Trump had yet to donate any of the money to veterans charities until this week when he gave his $1 million to the Marine CorpsLaw Enforcement Foundation. Trump also angered some veterans when he insulted one of the most famous prisoners of war, former Republican presidential nominee and Arizona Sen. John McCain. Trump said McCain is only a war hero “because he was captured.” Max Lorenz, a Vietnam veteran from Peekskill, New York, said he’s been attending Rolling Thunder on and off for about eight years and that it was nice to see Trump show up this year. “I haven’t seen a president here yet—any president,” he said. Trump “is a shoo-in, so I’m already calling him president. So he’s one coming here and addressing because he cares about vets. “And when I got out of Vietnam, he donated to the Vietnam veterans right off the bat,” Lorenz added. “He didn’t take any credit for it. I never forgot that, and that’s why he’s always an ardent supporter for Vietnam veterans and all veterans.” Bill Powers of Austin, Texas, who has been attending Rolling Thunder since the early 2000s, said he liked Trump’s speech, but wished he would elaborate more on how he plans to fix things. “I believe he will,” he added. The annual Rolling Thunder event started in 1988. Vietnam veteran Ray Manzo organized the first demonstration because he was bothered by reports of prisoners of war who were left behind in Vietnam and soldiers whose remains were not being returned to the United States for a proper burial. The event has since developed into a larger demonstration showing support for all current and former armed service members. TNS
Brazil’s Rousseff : Impeachment aimed at corruption investigation
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IO DE JA NEIRO — Su s pended President Dilma Rousseff said in an interview published on Sunday that leaked audio recordings of men backing her impeachment show the effort to oust her is meant to stop a wide-ranging corruption probe that has implicated nu me rou s le ad i n g Br a z i l i a n politicians and businessmen. Rousseff told the newspaper Folha de S. Paulo the revelation of the recordings gives her hope of returning to office. She was suspended early this month pending a Senate impeachment trial. Her nowestranged vice president, Michel Temer, is serving as interim leader. Recordings of three politicians of Temer’s Brazilian Democratic Movement Party appear to link her ouster to attempts to limit the investigation. Those involved dispute that interpretation, and
there is no evidence, so far, that they have stalled the probe. “The dialogues show that the real cause for my impeachment was an attempt to obstruct the ‘Car Wash’ operation,” Rousseff said, referring to the name of the corruption investigation at staterun oil giant Petrobras. “It was all made by those who thought that, without changing the government, the bleeding [of politicians] would continue.” She said another of the conversations noted that she had allowed the investigations to go forward. “These conversations prove what we have consistently said: We never interfered. And those that wanted my impeachment had that objective. It is not me saying, it is them.” The recordings forced new Planning Minister Romero Juca to take a leave of absence. AP
Gibraltar fears border with Spain could close if Britain quits EU
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ADRID—Gibraltar could find its access to the single European market blocked by a hostile Spanish government if the United Kingdom were to vote to leave the European Union (EU) in a referendum next month, the chief minister of the tiny British territory on Spain’s southwestern tip said on Sunday. Fabian Picardo told The Associated Press that Spanish Foreign Minister Jose Manuel Garcia-Margallo had warned that, if Britain exits the EU, the Popular Party government currently in power would “require that we accept joint sovereignty with Spain to have access to the market.” Picardo said British Foreign Minister Philip Hammond had acknowledged that the
European mechanisms in place to keep the frontier between Spain and Gibraltar flowing “will not be available to us if we are not members of the EU.” Gibraltarians were overwhelmingly “on the ‘remain’ side” in the EU debate, he said. “But, it’s important to send a message to those in the UK who think that there would be no adverse consequences for Gibraltar in the event that the UK were to leave the EU, that Garcia-Margallo made his point very clearly,” Picardo said. Gibraltar would find its trade adversely affected if Spain took such action, but nevertheless, “we will never pay any sovereignty price either for access to the single market or for any other reason,” Picardo said. AP
World
sMirror
www.businessmirror.com.ph | Tuesday, May 31, 2016
Abe to postpone sales-tax hike J APANESE Prime Minister Shinzo Abe wants to put off a planned sales-tax increase for two-and-a-half years, two ruling Liberal Democratic Party (LDP) officials said on Monday, as Abe prepares to end the speculation that has swirled for months.
Speaking after a meeting with Abe in Tokyo, LDP Vice President Masahiko Komura told reporters the prime minister “seems determined,” when asked whether the sales-tax increase would be delayed a second time. Toshihiro Nikai, chairman of the LDP’s general council, said after a separate meeting with Abe that he understood the prime minister wouldn’t call a general election to coincide with an upper-house vote in July, as many had speculated.
10% The proposed sales tax that will be increased from 8 percent
Abe had repeatedly said he would go ahead with the plan to boost the unpopular consumption tax to 10 percent in April
2017 from the current 8 percent, unless there was a crisis on the scale of the Lehman collapse or a major earthquake. Last week, in a presentation to the Group-of-Seven leaders, Abe made the case that the global economy was on the brink of just such a disaster and that urgent measures needed to be taken. He told reporters he would make a final decision on the tax before the upper-house election.
Bulging debt
A PREVIOUS increase in the tax to 8 percent in 2014 pushed Japan into a recession, prompting the government to delay the next phase of the hike that had been scheduled for October 2015. Another delay could help bolster Abe’s support before the upperhouse election, but would raise fresh questions about how to rein in the world’s biggest debt burden and fund social security in a rapidly aging society. Almost two thirds of respondents to a poll published
by the Nikkei newspaper on Monday said they opposed the tax increase. Support for Abe’s Cabinet was at 56 percent, up three points on the last survey to the highest level found in the paper’s surveys since September 2014. Opposition parties are set to submit a no-confidence motion against Abe if the tax is delayed, saying his Abenomics policy program has failed. Since Abe took office in 2012, drastic monetary easing weakened the yen, bolstering exporters’ profits and share prices, until the yen strengthened in 2016. The economy has zigzagged between contraction and growth, consumer spending is weak and inflation data last week showed that prices are falling again. “A p o s t p o n e m e nt o f t h e planned sales-tax increase will be positive for private consumption in the near term,” said Atsushi Takeda, an economist at Itochu Corp. in Tokyo. “However, in the long run, it may raise concern
over the sustainability of Japan’s social welfare system.” Postponing the sales tax doesn’t necessarily mean the Bank of Japan won’t act at its next meeting in mid-June, Takeda added. In a further bid to bolster the economy, Abe’s government is set to propose a stimulus package of ¥5 trillion to ¥10 trillion in a special legislative session after the July upper-house election, the Nikkei newspaper reported on Saturday. Abe’s plans on the sales tax and the election aren’t backed by all his senior officials. Finance Minister Taro Aso said on Saturday that Abe should call an election in the lower house to coincide with the upperhouse vote if the tax increase is to be delayed again, to put the plan to the public, Kyodo News reported. Abe doesn’t need to hold an election in the more powerful lower house until 2018. The LDP’s Policy chief Tomomi Inada told Abe on Monday he should raise the tax by at least 1 percentage point next year or hold an election. Bloomberg News
Students seeking sugar daddies for tuition, rent C ANDICE K ASHANI graduated from law school debt - f re e t h i s s pr i ng , thanks to a modern twist on an age-old arrangement. During her first year, she faced tuition and expenses that ran nearly $50,000, even after a scholarship. So she decided to check out a dating web site that connected women looking for financial help with men willing to provide it, in exchange for companionship and sex—a “sugar-daddy” relationship, as they are known. Now, almost three years and several sugar daddies later, Kashani is set to graduate from Villanova University, free and clear, while some of her peers are burdened with six-digit debts. As the cost of tuition and rent rises, so does the apparent popularity of such sites among students. But are they really providing financial relief, or signing women up for something more exploitative and dangerous than debt? Kashani believes such sites are a “great resource” for young women, but others say these arrangements smack of prostitution and take advantage of women in a vulnerable situation. Lynn Comella, an associate professor of gender and sexuality studies at University of Nevada Las Vegas, said that it is not unusual for students to turn to sex work, such as stripping, prostitution or web-cam work to pay for school. But the sugar-daddy sites are relatively new, and she says not entirely upfront about what they are really about. These arrangements are more vague than prostitution— there is an expectation of material benefit, but it is not always specified and sex is not guaranteed. Ron Weitzer, a professor of sociology at George Washington University and criminologist with an expertise in the sex industry describes it as “prostitution light.” “Sugar Daddy” arrangements have existed for ages, and it’s unclear if they are becoming more common because the phenomenon is not well studied. But experts say at the very least the Internet has made these transactions far easier to arrange and negotiate. “It allows you to hone in on what you want,” said Kevin Lewis, an assistant professor of sociology at University of California San Diego who studies online dating. “You could argue it is just making the market more efficient.” Kashani says she sifted through many potential suitors before finding one she clicked with. She says she considers her sugar daddy one
LAW student Candice Kashani poses for a photograph in Bryn Mawr, Pennsylvania. Kashani graduated from law school debt-free this spring, thanks to a modern twist on an age-old arrangement. AP/MATT ROURKE
of her best friends and that they care deeply for each other. “The people who have a stigma, or associate a negative connotation with it, don’t understand how it works,” she says. But unlike most relationships, she is paid a sizeable monthly allowance that helps her pay for school. US undergraduate students last year finished school with an average of $35,000 in student debt—a figure that has risen steadily every year, according to Mark Kantrowitz, a financial aid expert. The average graduate debt load is $75,000, and some longer programs force students into much deeper debt. Many students say their loans don’t cover the cost of living, and with rent skyrocketing in most major cities, they are left scrambling to make up the difference. One graduate student at Columbia University in New York had a scholarship that covered almost all of her tuition, but not her living expenses. She spoke on the condition of anonymity because of the potential impact on her job prospects. She tried to make do— sharing a room with a classmate and working a minimum-wage job, plus any freelance work she could get. But still she struggled to pay her rent and utilities, and her grades suffered.
“That’s just not why I am here,” she said. “I wanted to find the most amount of money I could make for the least amount of effort.” So she found herself surfing Craigslist and Backpage.com and later, SeekingArrangement.com, the largest of the sugar daddy web sites. Now she has two sugar daddies, one she sees occasionally and another who is more like a conventional boyfriend, except that he pays her a monthly allowance and helps rent her an apartment closer to him. SeekingArrangement.com said it is most popular in Los Angeles and New York. The average rent in both areas is well over $2,000 a month, according to Zillow research. The Columbia student says she plans to continue “sugaring” after she graduates to buy herself time to find a more traditional job and remain officially unemployed so she can defer repaying the roughly $70,000 in loans she had already racked up. “There is a lot of moral panic about it,” she said. “But what are the real-estate and academic-funding situations that led to this?” Brandon Wade, creator of the site, touts it as an “alternative to financial aid” but says the company did not set out to target stu-
dents when it launched in 2006. It stumbled on this niche and began in 2011 offering students a free premium membership, which usually costs $30 a month. It charges sugar daddies $70 to $180 a month, depending on the membership level. Seekingarrangement.com also offers to connect same-sex couples looking for such arrangements, or “sugar mommies” for men. But the male-female “sugar daddy” dynamic makes up the bulk of its business. It’s difficult to pin down exactly how many students are involved in such situations, because they are private transactions. And it’s a niche rarely studied by academics. SeekingArrangement.com says student users on the site jumped from 79,400 worldwide in 2010 to 1.9 million this year, and students make up one-third of its users. And, while it sees thousands of signups on any given day, the company says enrollment jumps during August and January, when tuition is typically due, sometimes to more than double its normal levels. Women who have used the site report experiences that run the gamut—from respectful chaste dates, all the way to aggressive solicitation online, even though it is forbidden on the site. Sex is not guaranteed, although most users say it is implied. The company says
a few arrangements have even led to marriage, although it is rare. Some of the women say they feel respected and cared for, but remain aware that it is an arrangement, not traditional romantic love. “It benefits me in many ways— we have a healthy relationship, we travel together, I’m able to enjoy the city more,” said the New York graduate student. Still, she said, it is a job. “It does kind of rub me the wrong way that some people don’t see it as sex work,” she said. Comella warns that, unlike sex workers, many women doing this put their true identities online, and that could put them at risk. While Seeking Arrangement runs background checks, there have been reports of violence against both men and women stemming from sugar daddy web sites. Kristen Houser of the National Sexual Violence Resource Center says that violence is common any time money is exchanged for sex. “You need to pay attention that there is a power imbalance,” she said. Wade says there are risks inherent in any dating web site. He should know; he runs several, including one that allows users to bid on dates and another focused on open relationships. AP
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Cheap oil, fewer nose jobs hurt Thai hospital stocks
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IL slumps. Middle Eastern patients cancel treatments abroad. Thai hospital stocks slide. It’s the butterfly effect in action. Weak growth outlooks in the Gulf States are prompting greater competition from local clinics, stemming the flow of visitors to the world’s top medical tourism destination. That’s clouding the outlook for Thailand ’s health-care shares, which surged more than 800 percent over the past seven years, as valuations start to look stretched amid the falling demand. Bangkok’s Bumrungrad Hospital Plc., known as the grandaddy of international clinics, has slumped 16 percent since early March after patient volumes from the United Arab Emirates (UAE), its second-biggest source of overseas visitors, fell 20 percent in the first quarter. Thailand attracted as many as 1.8 million international patients in 2015, many of whom stayed on afterward for a beach holiday. More than one-in-three foreigners treated at Bumrungrad are from the Gulf states and Kasikorn Securities Co. says declining growth in the region and a rise in competition from clinics in the UAE, where the government is encouraging its citizens to stay home for medical care, are curbing demand. “In the short term, the economic slowdown in the Middle East will weaken some investors’ confidence on earnings growth for domestic hospital operators,” said Jintana Mekintharanggur, the Bangkok-based director of equity investment at Manulife Asset Management, which oversees about $325 billion globally. “We are still bullish on the sector” in the long term, as it will benefit from growth in countries like Myanmar and Vietnam that have less-developed health systems, she said. The SET Health Care Services Index has fallen 2.7 percent since closing at a record high on April 21. It’s still the best-performing industry group in the SET Index, rallying almost 28 percent over the past 12 months. It trades at 6.8 times its book value, compared with 3.8 for the MSCI World Health Care Index. The health gauge fell 0.3 percent as of 10:31 a.m. in Bangkok, the worst performer among 28 industry groups on the SET Index, which was up 0.7 percent. Bangkok Dusit Medical Services Pcl., which has the biggest weighting on the measure, dropped 0.8 percent. “Most hospital stocks have very stretched valuations, which has probably spurred some concer n about overestimated earnings potential,” said Adithep Va n abr i k sh a, Ba ngkok-ba sed chief investment officer at Aberdeen Asset Management Plc. “We still see their growth potential, but have to be very careful with the current share prices.” Between 1.3 million and 1.8 million medical tourists traveled to Thailand last year, according to figures from Patients Beyond Borders, a consulting firm in Chapel Hill, North Carolina. The country is well known for cosmetic and sex-change procedures. Medical tourism generated 107 billion baht ($3 billion) of revenue in 2014, according to the latest Thai government estimate. Sitting at the apex of the industry is Bumrungrad, which attracts more than half-a-million foreign patients a year and has a network of 32 referral offices everywhere from Mongolia to Ethiopia. Sixty-seven percent of revenue came from overseas visitors last quarter, company figures show. Myanmar residents were the biggest source, accounting for 8.4 percent of total patients, followed by 8.3 percent from the UAE and 5.9 percent from Oman. Bloomberg News
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The World BusinessMirror
Tuesday, May 31, 2016
www.businessmirror.com.ph
briefs
POLICE FAVOR INDICTMENT OF NETANYAHU’S WIFE
JERUSALEM—Israeli media reported on Sunday that a police investigation has recommended indicting the wife of Prime Minister Benjamin Netanyahu over misuse of state funds and inflated household spending. Channel 2 TV and other outlets reported that police believe they have enough evidence to bring Sara Netanyahu to trial. It said she used state funds to care for her late father and overbilled for meals. In a statement, police announced the end of their investigation but offered few details. A police spokesman would not comment further. Prime Minister Benjamin Netanyahu denied the allegations in a Facebook post. “In the police statement there was no recommendation to bring Mrs. Netanyahu to trial. In contrast to reports, Mrs. Netanyahu did not commit any crime.” AP
TURKEY PRESIDENT RAPS U.S., RUSSIA, IRAN FOR PRESENCE IN SYRIA
ISTANBUL—Turkey’s president has criticized the United States, Russia and Iran for their presence in Syria and said their unwillingness to depose Syrian President Bashar al-Assad was contributing to Syrians’ pain. Recep Tayyip Erdogan was addressing a rally on Sunday, marking the 563rd anniversary of the Ottoman conquest of Constantinople— present-day Istanbul. Erdogan said: “What business have Russia and Iran [in Syria]? What business do the US soldiers dressed up with the so-called patches of a terror organization have there?” He was referring to images that surfaced this week showing American troops wearing the insignia of Syrian militia, which Turkey considers to be a terror organization because of its links to Turkey’s outlawed Kurdish rebels. US officials said the soldiers weren’t authorized to wear the patches. AP
DRIVER’S FAMILY FILES CASE VS U.S. OVER DRONE HIT ON PAKISTAN QUETTA, Pakistan—The family of a driver who was killed alongside Taliban chief Mullah Akhtar Mansour in a US drone strike in Pakistan has filed a case against US officials, seeking to press murder charges, police said on Sunday. Mansour had entered Pakistan from Iran using a false name and fake Pakistani identity documents on May 21, when his car was targeted by a US drone. The driver, who was also killed, was later identified as Mohammed Azam. The police filed a case on behalf of Azam’s family, police official Abdul Wakil Mengal said. It was not immediately clear what legal avenues the family can realistically pursue. AP
FIGHTING IN CENTRAL YEMEN KILLS 69
SANAA, Yemen—At least 69 people have been killed and dozens injured in two days of fighting in central Yemen between rebels and forces loyal to the internationally recognized government, Yemeni security officials said on Sunday. The officials said government-allied forces have taken control of several areas previously controlled by the rebels, known as the Houthis, between the central provinces of Marib and Shabwa. The officials spoke on condition of anonymity because they weren’t authorized to brief journalists. The government-allied forces said 22 of their fighters were killed and 25 were injured. They said the clashes were ongoing. AP
URINESOAKED BABY FOUND IN CAR DURING HEROIN ARREST
HUNTINGTON, West Virginia—West Virginia state police say a baby was soaked in urine in the back seat of a parked vehicle where four adults allegedly were using heroin. The HeraldDispatch says the adults were arrested on Friday along US 60 in Huntington, about 52 miles west of Charleston. Trooper JA Roach says troopers saw a 1-year-old boy in the back seat. Roach says the baby’s urine formed a puddle in his car seat. According to a criminal complaint, charges of child neglect creating risk of injury were filed against 56-year-old William Ernest Smith Sr., 54-year-old Gregory Allen Smith, 46-year-old Peggy Veronica Smith and 27-year-old Heather Lynn Bledsoe, all of Branchland. William Smith also was charged with possession of a controlled substance, and Peggy Smith was charged with an outstanding warrant. AP
KING Salman bin Abdulaziz Al Saud (right) receives British Foreign Secretary Philip Hammond in Jiddah, Saudi Arabia, on May 29. SAUDI PRESS AGENCY VIA AP
Iran’s role in Iraq ‘unacceptable’–Saudi
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IYADH—Saudi Arabia’s Foreign Minister Adel al-Jubeir said on Sunday that Iran must stop meddling in Iraq and that the presence of Iranian military units there is “unacceptable.”
2M
The number of annual hajj pilgrims in Saudi Arabia from around the world
His comments come as thousands of Iraqi Shiite militiamen, soldiers and police, backed by Iran, surround the Sunni city of Fallujah ahead of an operation to retake it from the Islamic State group. Iran says its militar y advisers in Iraq are there at Baghdad ’s request to help Iraqi forces fight militants. It has repeatedly rejected Saudi criticisms of its role in Iraq,
instead accusing its reg iona l rival of supporting extremism. Al-Jubeir, speaking in a joint press conference with British Foreign Minister Phillip Hammond in Saudi Arabia on Sunday, said Iran had sown “sedition and division in Iraq” through its policies, which he said had provoked sectarianism among Sunnis and Shiites there. Hammond had earlier held meetings with Saudi King Salman and senior princes in the Red Sea city of Jiddah to discuss the wars in Syria and Yemen, where Saudi Arabia and Iran back opposing sides of the conflicts, and the ongoing turmoil in Libya. He told reporters during the press conference that his country is committed to the security and stability of Gulf Arab countries. Saudi Arabia and Iran severed
diplomatic ties earlier this year, after Iranian protesters ransacked Saudi diplomatic offices there to protest the execution of a prominent Saudi Shiite cleric in Januar y. The tensions have impacted the annual hajj pilgrimage, required of all ablebodied Muslims to perform once in their lives. An Iranian delegation left the kingdom after a second round of talks w ithout reaching an agreement to send Iranian pilgrims to the hajj this year, which is taking place in September. Saudi Arabia says it could not agree to a demand made by the Iranians to allow a Shiite ritual during the hajj that includes protests against the West and often against the Sunni-ruled kingdom itself. Saudi Arabia says formally al-
lowing them the right to protest would lead to chaos and disrupt the flow of some 2 million pilgrims from around the world. Iran’s Hajj Organization said the Saudis failed to meet demands for the “security and respect” of pilgrims, while Iran’s Culture Minister Ali Jannati said on Sunday Saudi “sabotage and obstacles” mean “Iranians pilgrims cannot go to hajj this year.” A stampede and crush of people during last year’s hajj killed more than 2,400 pilgrims, according to an Associated Press count based on figures reported by various hajj ministries and governments. Some 464 Iranians were among the dead. The official Saudi toll of 769 people killed and 934 injured has not changed since September 26, and officials have yet to address the discrepancy. AP
Attacks in and around Egypt military court sentences 8 to death Baghdad kill at least 17 C
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AGHDAD—Militants unleashed a wave of attacks targeting commercial areas in and around Baghdad on Monday, killing at least 17 people, officials said, as Iraqi troops poised to recapture the Islamic State (IS)-held city of Fallujah, west of Iraq’s capital. No one immediately claimed responsibility for the attacks, which bore the hallmarks of the extremist IS, which has been behind recent deadly attacks in Baghdad and beyond. Such attacks are seen as an attempt by the militants to distract the security forces’ attention away from the front lines. The deadliest of Monday’s attacks took place in the northern, Shiite-dominated Shaab neighborhood of Baghdad, where a suicide bomber rammed his explosivesladen car into a checkpoint next to a commercial area, killing five civilians and three soldiers. The explosion also wounded up to 14 people, a police officer said. A suicide car bomber struck an outdoor market in the town of Tarmiyah, about 50 kilometers north of Baghdad, killing four civilians and two policemen, another police officer said, adding
that 19 people were wounded in that bombing. And in Baghdad’s eastern Shiite Sadr City district, a bomb motorcycle went off at a market, killing three and wounding 10, police said. Medical officials confirmed casualty figures. A ll officials spoke on condition of anonymity as they were not authorized to release information. The attacks came amid a key Iraqi military operation to dislodge IS militants and retake Fallujah, which has been in IS hands for over two years. The operation was launched a week ago, with Iraqi forces teaming up with paramilitary troops and backed by aerial support from the US-led coalition. The city is one of the last major IS strongholds in western Iraq. The extremist group still controls territory in the country’s north and west, as well as Mosul, Iraq’s second-largest city. On Sunday Iraqi Maj. Dhia Thamir said troops have recaptured 80 percent of the territory around Fallujah since the operation began and are currently battling IS to the northeast, as they seek to tighten the siege ahead of a planned final push into the city center. AP
AIRO—An Egyptian military court sentenced eight alleged Muslim Brotherhood members to death on terrorism charges on Sunday, a security official and the web site of state newspaper Al-Ahram said. The court issued life sentences to 12 defendants and sentenced another six to 15 years in prison. Two defendants were acquitted, and two were convicted in absentia. Military prosecutors had accused the defendants of belonging to an illegal group and plotting to assassinate police and army personnel. The verdict can still be appealed. The official spoke on condition
of anonymity because he wasn’t authorized to brief reporters. Rights group Amnesty International condemned the verdict, describing it as a “grossly unfair military trial” and demanding that the defendants receive a fair hearing before a civilian court. Egyptian rights activists have long campaigned against the trial of civilians by military courts. Last year Egypt executed six men convicted by a military court. Earlier this month, an Egyptian court issued death sentences against six people, including two Al-Jazeera employees, for a l leged ly passing documents related to national security to
Qatar and the Doha-based TV network during the rule of the Muslim Brotherhood President Mohammed Morsi. The Brotherhood was banned and declared a terrorist group after the military ousted Morsi in 2013. Following his overthrow, the number of militant attacks on Egypt has increased. An affiliate of the Islamic State group based in northern Sinai has claimed most of the attacks. On Sunday a roadside bomb killed two police and wounded three conscripts in the northern part of the Sinai Peninsula, according to Egypt’s state news agency, Mena. AP
Syrian rebels counter IS offensive, retake 2 villages
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EIRUT—Syrian rebels retook two villages from Islamic State (IS) militants on Sunday, as they fought to undo gains made by the extremist group in a surprise offensive days earlier, activists said. Rebels retook the villages of Kafr Shoush and Braghida on Sunday, expanding their buffer around the rebel-held town of Azaz, home to tens of thousands of people displaced by war, according to the Local Coordination Committees (LCC), an activist network inside the country. IS militants took Syrian rebels by surprise on Sunday when they launched an offensive that threatened to seize Azaz and isolate
Marea, another rebel-held town north of the contested city of Aleppo. More than 160,000 civilians have been trapped by the fighting. The international medical organization Doctors Without Borders evacuated one of the few remaining hospitals in the area. The rebel pocket around Azaz, which connects to the Turkish border, is surrounded by IS militants to one side and the predominantly Kurdish Syrian Democratic Forces (SDF) to the other. Syria’s Turkish and Saudi-backed rebels accuse the SDF of colluding with the government in the country’s grinding civil war.
The IS advance prompted a rare deal between the SDF and rebels on Saturday, according to the Syrian Observatory for Human Rights, a Britain-based monitoring group. It said the rebels surrendered control of a village near Marea to an SDF division in exchange for allowing 6,000 civilians to evacuate to areas under Kurdish control. Yet, rebels also shelled an SDF-held neighborhood of Sheikh Maqsoud in nearby Aleppo on Saturday, killing four people, the Observatory said. Fighting continued between government forces, rebels and IS militants in other parts of the country on Sunday. AP
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Tuesday, May 31, 2016
A9
Obama’s Hiroshima visit raises profile of Abe successor
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H E N U S P re s id e nt Barack Obama laid a wreath at the Hiroshima peace memorial on Friday to honor the 140,000 victims of the world’s first atomic-bomb attack, one of the Japanese city’s bestknown native sons was standing nearby—and in a position to take credit for arranging the historic event. For Japanese Foreign Minister Fumio Kishida, the first visit by a sitting US president to the site marked a high-point of more than 20 years in politics. Kishida is widely seen as a possible successor to Prime Minister Shinzo Abe, and his role in laying the groundwork for the ceremony will further raise his profile in a country, where polls showed the vast majority of voters favored the visit. “Obama’s visit to Hiroshima will be the culmination of the postwar Japan-US relationship. This historic achievement will give Kishida the qualification to become prime minister,” said Takashi Kawakami, president of the Institute of World Studies at Takushoku University in Tokyo. “Kishida now needs to make the case that this was his achievement.” He heads the Liberal Democratic Party (LDP’s) third-largest faction—the relatively liberal Kochi-kai—and gained second place in an October poll by Nippon Television on which minister the public had the highest expectations for. While he’s notched up several achievements on the foreign stage, he isn’t known for his experience on economic issues. “He’s a little weak on the economy,” Kawakami said. “He hasn’t really spoken strongly about it.” The bombing of Hiroshima, and, days later, Nagasaki, helped bring about Japan’s 1945 surrender and the end of World War II. The US occupation that followed morphed into an enduring military alliance that is now central to Obama’s rebalance to Asia, as the US seeks to shore up trade and security ties in the region to counter China’s growing economic and military muscle. Kishida, 58, picked his home town as the venue for the gathering of foreign ministers from the Group-of-Seven nations in April, when he accompanied US Secretary of State John Kerry in
placing wreaths at the memorial site. He went with his American counterpart on an unscheduled visit to the city’s “atomic-bomb dome,” the iconic shell of one of the few buildings near the blast to survive. Kerry said his time at the peace park and museum was “gut-wrenching.” “It was Kishida’s decision to hold the foreign ministers’ meeting in Hiroshima,” Vice Foreign Minister Seiji Kihara said in an interview. “Kishida and Kerry trust one another. Kerry’s proposal to make an unscheduled visit to the atomic-bomb dome was down to his regard for Kishida.” Born in 1957 to a wealthy political family from Hiroshima, Kishida earned an undergraduate degree in law from Tokyo’s prestigious Waseda University before working at the now-defunct LongTerm Credit Bank of Japan. The married father of three was elected to parliament for the first time in 1993 and has held positions, such as minister for consumer affairs, space policy and chairman of the ruling LDP Diet affairs committee. While Kishida has never openly challenged Abe over policy, his faction’s more dovish stance may play well in a country, where tens of thousands took to the streets last summer to protest against Abe pushing bills through parliament to expand the role of the nation’s military. He could also help thaw frosty relations with China. Abe’s term as head of the LDP is due to end in 2018, though he could stay on through the 2020 Tokyo Olympics. Whoever secures the party leadership after that would then replace Abe as prime minister. Potential challengers include regional revitalization minister Shigeru Ishiba. A spokesman for Kishida declined to comment on any plan to seek the leadership. Kishida has sought to ease tensions with China after relations between the region’s two biggest economies soured over territorial disputes and lingering resentment over the war. W h i le t ies rem a i n st ra i ned , K ishida has been working to secure a face-to-face meeting between Abe and Chinese President Xi Jinping at a Group of 20 summit in China scheduled for September. Bloomberg News
Researchers collect brains to study battle-related disorders
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RAIN scientists in Washington state are asking the families of armed services members to consider one last contribution. Researchers at the University of Washington (UW) and the local Veterans Affairs health-care system have begun collecting the donated brains of service members to examine for possible dementia and other disorders linked to repeated blast injury and head trauma. The program, the Pacific Northwest Brain Donor Network, is aimed at understanding the impact of mild traumatic brain injury on active-duty military members and veterans. “We are going to study these brains to the full extent that we are capable,” said Dr. C. Dirk Keene, who leads the neuropathology core at UW Medicine. “They are so rare, so valuable and just so precious, and can give us so much information about what these exposures mean.” Keene and his colleagues, including Dr. Elaine Peskind, who codirects the Mental Illness Research, Education and Clinical Centers at the Puget Sound Veterans Administration hospital, will look for signs that service members with mTBI also may have developed disorders, including Alzheimer’s disease or chronic traumatic encephalopathy.
Chronic traumatic encephalopathy has received wide attention recently after a large number of former American football players were diagnosed with the neurological disorder. Like football players, troops who suffer repeated concussions or other head trauma might develop the debilitating condition, which is diagnosed only after death. But, so far, little research has confirmed any military connection. “What’s been published previously is on the brains of five Iraq veterans,” Peskind said. “Another paper will be published soon with another five veterans. There’s just nothing out there.” Since the program started in March, researchers have acquired three brains. They include donations from one military veteran, a middle-age man who was not exposed to blast injury, and a military contractor, a woman, also middleage, who worked in a war zone. The donations also include the brain of Cody Duran, 30, of Lakewood, who died on April 5 from an unknown cause, said his mother, Victoria Padron. “I donated everything,” she said. “Whatever they could use, they could have.” Padron’s son wasn’t a veteran, but his young brain will serve as a control, an example of normal tissue against which scientists will measure changes. TNS
THIS April 2016 photo released on Monday by ARC Centre of Excellence for Coral Reef Studies shows mature stag-horn coral dead and overgrown by algae at Lizard Island, Great Barrier Reef off the eastern coast of northern Australia. The reef studies center released the results of its survey of the 2,300-kilometer reef off Australia’s east coast. DAVID BELLWOOD/ARC CENTRE OF EXCELLENCE FOR CORAL REEF STUDIES VIA AP
Bleaching kills third of coral in Great Barrier Reef’s north
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YDNEY—Mass bleaching has killed more than a third of the coral in the northern and central parts of Australia’s Great Barrier Reef, though corals to the south have escaped with little damage, scientists said on Monday. Researchers who conducted months of aerial and underwater surveys of the 2,300-kilometer reef off Australia’s east coast found that around 35 percent of the coral in the northern and central sections of the reef are dead or dying, said Terry Hughes, director of the ARC Centre of Excellence for Coral Reef Studies at James Cook University in Queensland state. And some parts of the reef had lost more than half of the coral to bleaching. The extent of the damage, which has occurred in just the past couple of months, has serious implications, Hughes said. Though bleached corals that haven’t died can recover if the water temperature drops, older corals take longer to bounce back and likely won’t have a chance to recover before the next bleaching event occurs, he said. Coral that has died is gone for good, which affects other creatures
2,300km The area of Great Barrier Reef that rely on it for food and shelter. “Is it surprising? Not anymore. Is it significant? Absolutely,” said Mark Eakin, the coral-reef watch coordinator for the US National Oceanic and Atmospheric Administration. “We’re talking about losing 35 percent of the population of coral in some of these reefs— that’s huge.” The damage is part of a massive bleaching event that has been impacting reefs around the world for the past two years. Experts say the bleaching has been triggered by global warming and El Niño, a warming of parts of the Pacific Ocean that changes weather worldwide.
Hot water puts stress on coral, causing it to turn white and become vulnerable to disease. Other reefs have suffered even more severely from the recent bleaching. Some Pacific islands, for example, have reported over 80-percent coraldeath rates, Eakin said. This is the third and most extreme mass-bleaching event in 18 years to strike the Great Barrier Reef, and in each case, the areas that suffered the worst bleaching were the areas where the water was hottest for the longest period of time, Hughes said. This time the southern half of the reef was spared largely due to a lucky break that arrived in the form of a tropical cyclone. The remnants of the storm, which had lashed the South Pacific brought cloud cover and heavy rains to the region, cooling the ocean enough to stop bleaching that had just begun in the south. About 95 percent of the coral in the southern portion of the reef has survived. Storms have previously proven very helpful for heat-stressed reefs, Eakin said. In 2005, for instance, the quick succession of Hurricane Katrina and Hurricane Rita cooled the waters below as they passed over Florida, sparing the Florida Keys from a serious coral-bleaching event affecting the Caribbean. Experimental approaches to
the bleaching dilemma have included attempts to lower water temperatures by using shades to cover corals, Eakin said. But such efforts require massive amounts of preparation and can only be done in small areas, Eakin added. Other solutions may lie in finding ways to minimize additional stressors to the already fragile reef. “Anything you can do to reduce the level of injury and stress coming from other sources, the better the chance that the corals are going to survive,” Eakin said. “Those reefs that have recovered after events like this are the ones that are the most protected, least visited and least disturbed.” Last year the United Nations’s heritage body expressed concern about the state of the Great Barrier Reef and urged Australia to boost its conservation efforts. Following the release of the bleaching report on Monday, Australian politicians—who are in the midst of an election campaig n—jumped on the issue, with the opposition Labor Party pledging to create a $500-million fund for better management and research of the reef. Environment Minister Greg Hunt, meanwhile, announced that if his party is reelected, the government would invest $6 million to helping combat the crown-of-thorns starfish, which feast on coral. AP
Uganda, S. Korea leaders sign cooperation pacts
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AMPALA, Uganda—Uganda and South Korea signed cooperation agreements on Sunday that officials here hope will lead to transfer of technology, as Uganda tries to implement an ambitious industrialization program. The memorandums of understanding in areas, such as health and education,
were sig ned at Uganda’s State House in Entebbe, where v isiti ng Sout h K orea n leader Pa rk G eu n-hye a nd her de legat ion were g iven a ba nquet. Det a i l s of t he a g reement s were not yet av a i l able. “ T here is a g reat potent i a l for cooperat ion bet ween Sout h Korea a nd Uga nd a for
t he mutua l benefit of both countries,” Ugandan President Yoweri Museveni said during the banquet, according to his office. Uganda is the second leg of Park ’s Africa visit, during which she has focused on trade and business. In a speech on Friday before the African Union in Ethiopia, Park urged African leaders to
support international efforts to denuclearize rival North Korea. Uganda has good diplomatic rel at ions w it h Nor t h K orea, which has recently been training Ugandan security forces. Mu se ven i sa id on Su nd ay that he supports the peaceful reunification of Korea. Park’s next stop is Kenya. AP
A10 Tuesday, May 31, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Abolish the BIR to fight corruption?
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HE Rosetta Stone is one of the most important archeological discoveries that gave vast insight and opened the door on understanding ancient Egypt. It is a stone tablet weighing 760 kilograms that was carved in 196 BC.
The stone tablet is critical because it was carved in three languages of the period—hieroglyphic (suitable for a priestly decree), demotic (the native script used for daily purposes) and Greek (the language of the administration)—thereby creating a translation dictionary. The text is a priestly decree about Ptolemy V who was then ruler of Egypt. It recounts all the wonderful accomplishments during the reign of his family, particularly from his father. Of the 54 separate passages, many deal with the same topic as the following: “Of the revenues and taxes levied in Egypt some he has wholly remitted and others he has lightened, in order that the people might be in prosperity during his reign.” In other words, these were great pharaohs because they did not steal the tax revenue, instituted tax reform and actually lowered taxes so that “the people might be in prosperity.” In addition, the pharaoh “has undertaken much outlay to bring Egypt into prosperity. Whatever things were neglected in former times he has restored to their proper condition.” More spending on infrastructure and, of course, a slam on the “previous administration.” This all sounds like what a Philippine president might say during a State of the Nation Address. Because the Ptolemy family had been doing such a great job, the decree goes on to require “a statue and golden shrine in each of the Temples” in their honor. But notice than even 2,000 years ago, “corruption” and “taxation” are almost inseparable. Incoming president Rodrigo R. Duterte declared in one of his off-hand comments that the Bureau of Customs, the Bureau of Internal Revenue (BIR) and the Land Transportation Office are the “most corrupt” agencies, and that “it might be better to simply disband them.” Internal Revenue chief Kim Jacinto-Henares responded by discounting Duterte’s claim and went on to say that corruption at the BIR can only be “minimized.” While Ms. Henares is being realistic, maybe that is not enough. A call for abolishing the national tax collection agency is not exclusive to the Philippines. The same has been said during the US presidential campaign. In his 1993 book, For Good and Evil: The Impact of Taxes on the Course of Civilization, historian Charles Adams writes: “From the earliest records of civilization, tax laws have taken away liberty more often than foreign invaders.” Adams goes on to show that the Islamic tax policy was one reason for Islam’s spread. Vanquished peoples were given three choices: convert and pay no tax; keep your own religion and pay a head tax, or be put to death. He notes that so many converted, the Islamic governments had a revenue shortfall. While abolishing the BIR may not be practical or possible, a simplified tax code would remove many opportunities for corruption. The incoming administration must make the taxation scheme a top priority in its fight against corruption.
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No change in stability Manny B. Villar
THE ENTREPRENEUR Continued from A1 With the November elections in the United States coming closer, the Democratic Party still has to choose, through primaries, who to field between Sanders and Hillary Clinton against Donald Trump, who has already gained the required number of delegates to become official presidential candidate of the Republican Party. Sanders’s controversial statements showed how bitter and heated campaign in the US, and reminded me of the similar nature of the presidential campaign in the Philippines. Numerous accusations were, and are still, being thrown against aspiring presidential candidates in the US, including the citizenship of one aspirant, the tax payments of another, as well as controversial proposals to solve terrorism, immigration and other problems of the US.
The Philippines, which adopted the American form of democratic government, has just elected a new president, but during the campaign period, we also saw a bitter exchange of accusations, as every candidate tried to woo Filipino voters. Fortunately, the bitter campaign did not translate into violence and, according to the Commission on Elections, the 2016 elections were generally peaceful and orderly. The better-than-expected performance of the economy, which grew by 6.9 percent in terms of GDP in the first quarter, was not really surprising, given the heavy spending by candidates and political parties. It’s good news, but from a business perspective, I believe it is important to note that stability remains, despite the wariness—even skepticism— that some businessmen felt during the campaign, particularly when it became clear that Davao City Mayor
China is ‘The Boss’ John Mangun
OUTSIDE THE BOX
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HEN you read in the newspaper that a “strong statement” is being issued about China, it is directed at you, not China. To China, it means less than nothing.
It would be easier to talk about the Philippine economy, the stock market, or even government economic policy. But China is the elephant in the sala that never goes away, can never be ignored, and it’s part of every discussion whether we like it or not. Leaders of the G-7—Canada, France, Germany, Italy, Japan, the United Kingdom and the US—met in Japan this past week. Of course, while China was not a primary issue, since all of these nations’ economies have already or might in the future crash and burn, the regional territory issues are still a concern. The substance of the statement was that everyone should follow the “rules” and not go to war. Appar-
ently, China agreed by immediately announcing through the China Daily newspaper that it intends to turn the Spratly Islands into a tourist resort. “We will develop some islands and reefs to accommodate a select number of tourists, who have a patriotic spirit, and want to have a taste of ocean life.” According to the Chinese government, there is nothing to fear. The reclamation projects are only an extension of the new Shanghai Disney Resort. Sending China a “strong statement” is like asking the elephant not to break your favorite chair since you know you can’t get it to leave. China spent trillions to increase its steel manufacturing and since its economy has cooled, has been
The Philippines, which adopted the American form of democratic government, has just elected a new president, but during the campaign, we also saw a bitter exchange of accusations, as every candidate tried to woo Filipino voters. Fortunately, the bitter campaign did not translate into violence and, according to the Commission on Elections, the 2016 elections were generally peaceful and orderly. Rodrigo R. Duterte would win the presidency. We still have to see whether the economy will be able to sustain its performance up to the fourth quarter, but our advantage is that our strong fundamentals are intact. I already mentioned that Duterte’s victory would attract more investments in Mindanao to unlock its huge potential to contribute more to the national economy. Interest rates remain low. During its meeting on May 12, the Monetary Board (MB) decided to maintain the key policy rates of the Bangko Sentral ng Pilipinas (BSP) at 4 percent for overnight borrowing
According to the Chinese government, there is nothing to fear. The reclamation projects are only an extension of the new Shanghai Disney Resort. Sending China a “strong statement” is like asking the elephant not to break your favorite chair since you know you can’t get it to leave. “dumping”—selling at or below production cost—to the US. The US has raised customs duties on Chinese steel to over 500 percent to stop imports. But what will China do? They will sell to other countries—like the Philippines—at an even lower price to squeeze out the US, Japan, India and South Korea. Alternatively, China will stockpile the steel and about the time the Philippines starts building steel mills, will dump its steel on the market to kill our production. When crude oil was $100—and going to $250 according to the experts—China loaned multibillions to oil-producing countries like Venezuela, payable in oil, not cash. Now those loans are being paid at twice —or more—the original amount of
and 6 percent for overnight lending. The board’s decision was based on its assessment of a continuing manageable inflation environment. The MB said that, while the global economy was weakening, the prospects for the domestic economy remain robust. Cash remittances from overseas Filipinos amounted to $2.4 billion in March, up 1.5 percent from the same month last year. For the first quarter of 2016, the BSP said cash remittances reached $6.6 billion, higher by 4.4 percent compared to the same period in 2015. Also, according to the BSP, foreign direct investments (FDI), which are invested in long-term projects like industries, increased by 50.6 percent to $936 million in the first two months of 2016 compared to $622 million in January to February last year. In another report, the BSP said the Philippine financial system remained sound and stable in 2015, despite the challenges in the global financial landscape, including the volatilities in China. Thus, local banks are expected to continue providing the needed funding to the growing economy. For comments, e-mail mbv.secretariat@ gmail.com or visit www.mannyvillar.com.ph.
oil because of the current $50 price. Venezuela owes $7 billion to Beijing this year and needs nearly 800,000 barrels per day (bpd) to meet payments, up from 230,000 bpd when oil traded at $100. Africa’s largest oil producer Angola, borrowed $25 billion and is now sending almost its entire oil output to China for debt repayments. China is flooded with stockpiled crude oil, getting millions of barrels for “free.” The good old days of 1988 are easy for me to recall. That was the beginning of the golden age of the Philippines. The Philippines’s percapita GDP was nearing $1,000. At that time, China was at $500. As of 2015, we are up 60 percent to $1,600; China has gained 700 percent to $4,000. China is “The Boss” because no nation or group of nations can effectively stand up to China without risking military action or hurting their own economies. “Strong statements” are only political propaganda. 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.
Opinion BusinessMirror
opinion@businessmirror.com.ph
Tuesday, May 31, 2016 A11
The incoming President Preserving and managing our unique biodiversity must look at the lesson A UNDP study shows our marine-coastal resources provide up to $556 million in goods and services. The potential commercial value of of contemporary history genetic and biochemical materials in Philippine forests—or its “net Edgardo J. Angara
Cecilio T. Arillo
DATABASE Part Four
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ANY internal factors in the armed services also made them a threat to society, and some external factors have also contributed to the military’s disunity.
For instance, the problem of a continuing economic decline, the threat of communist insurgency and Moro secessionism and the worsening crime situation have made the armed services inordinately very large and indispensable to the orderly conduct of public affairs. We often hear some critics say soldiers and policemen are just “security guards.” Perhaps, they don’t realize that they are guards who are daily putting their lives on the line, and many of them had to shed blood in the service of the country. The people cannot expect soldiers and policemen to be merely mute witnesses to the affairs of the State because they are as much affected as other people are, especially when the civilian government fails to exercise leadership at the helm, and the problems of peace and order deteriorate, rather than improve, as a consequence of ineptness and corruption. For instance, the Davide Commission (named after then chairman and Chief Justice Hilario Davide Jr.) on the 1989 coup attempt, significantly made recommendations that recognized how many were the problems that underpinned military coups and mutinies in the country. It recognized the need for shortterm measures to prevent another coup attempt. But it pointed out, as well, the need for reforms and long-term measures to eradicate the problem. The commission set forth recommendations for ensuring the supremacy of civilian authority over the military. The principal prescription was the appointment of civilians to head the Department of National Defense, the National Security Council and the National Intelligence Coordinating Agency. Finally, it made recommendations over the long term that touched on the need for reforms concerning social justice, decentralization, democratic change, patriotism, constitutionalism and the building of a citizens’ army. Exactly 27 years ago today, the reforms needed remained unattended to, and many of the problems have even worsened with the passage of time. For instance, the pervasive culture of favoritism and patronage in the armed services has turned from bad to worse in Arroyo’s time: the chief of staff position had changed hands nine times in less than eight of her nine years in office and for the first time in the military’s history— from Gen. Diomedio Villanueva, to Gen. Roy Cimatu, to Gen. Benjamin Defensor, to Gen. Dionisio Santiago, to Gen. Narcisco Abaya, to Gen.
Please e-mail your letters to the editor to oped@businessmirror. com.ph. Letters chosen for publication in this section are edited for brevity and clarity.
Efren Abu, to Gen. Generoso Senga, to Gen. Hermogenes Esperon Jr. and to Gen. Alexander Yano, in that order, thus, further creating demoralization in the armed services. The military also suffered from a serious shortage of qualified NCOs and small unit leaders due to unjustified expansion and decline in combat and administrative training, which, in turn, contributed to the breakdown of morale and discipline. Although limited equipment have somehow reached to the battlefield, troops often operated without most of the basic needs because of graft and corruption, patronage and favoritism, which tended to aggravate the unreliable logistics system that often necessitated the use of personal contacts and bribery to obtain crucial supplies, particularly weapons, bullets, quartermaster items, transportation and communication equipment. The recent spate of attacks by the New People’s Army in Southern Tagalog, Bicol region, Central Luzon, Northern Mindanao and the Visayas, where scores of soldiers had been killed and wounded, clearly illustrated the foregoing. Even if the police and military organizations do not suffer from these defects, they cannot hope to win the insurgent war or improve the peace and order situation for the simple reason that they do not have a doctrine of their own or a clearly defined tactical and strategic direction. No president, therefore, can do the job alone. He must be guided with the right combination of policies and be able to call upon a talented pool of men and women in the civilian bureaucracy, supported by the members of the police and military organizations. In the final analysis, the president can bring them together as a team, combining all their talents to produce a cohesive and responsive bureaucracy, certainly not the kind of bureaucracy that increases in number of temporary committees, commissions or task forces every time there is a crisis and, thus, inordinately expand the size of the government and the budget. How to handle personalities is certainly important. It is a question of personal pride, power and prestige. A president must have a good memory and a sense of history, including the kind of history that the country had already seen for more than five generations. To be continued To reach the writer, e-mail cecilio.arillo@ gmail.com.
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NEW study published in the scientific journal PLOS One revealed that some of the Philippines’s largest coral-reef fish are fast disappearing due to decades of unsustainable fishing. Based on interviews with 2,655 fishermen, up to 59 “iconic and valuable” species were cited as previously abundant, but are now rare—signifying what the authors described as the “oceanic equivalent to the declining populations of panda bears, elephants and other large endangered terrestrial species.” Among the species identified were the green humphead parrotfish, humphead wrasse, African pompano, giant grouper and the mangrove red snapper. Their disappearance affects local fishermen’s livelihoods, but more important, throws out of balance delicate coralreef ecosystems. To illustrate, Nicholas Polunin, the study’s lead author, explained that the humphead parrotfish selectively eat certain coral types, allowing other coral species to f lourish in the same habitat. Groupers and snappers—as major
predators—help regulate the number of smaller fish that would, otherwise, provide too much competition to other smaller fish. The disappearance of these “elephants of the ocean” is just one example of how our unique diversity—a total of 464 reef-building coral species, nearly one-half of the planet’s coral species—is imperiled by overexploitation, pollution and other unsustainable human activities. UNDP-Philippines Countr y Director Titon Mitra wrote in a widely circulated opinion column that, “the country’s marine waters are seen as the epicenter of marine biodiversity on Earth.” If managed properly and sustainably, according to Director Mitra, our biodiversity can help reduce poverty, preserve traditional lifestyles, create sustainable employment (such as through ecotourism) and provide future sources of our
present sustainable bioprospecting value”—is around $36 million each year in perpetuity. Such asset allows us to participate in the global pharmaceutical industry, which earns up to $150 billion a year from sales of medicines and treatments derived from these resources.
national economic growth. Almost 70 percent of our population is dependent on the environment and natural resources for a living. A UNDP study shows our marine-coastal resources provide up to $556 million in goods and services. The potential commercial value of genetic and biochemical materials in Philippine forests— or its “net present sustainable bioprospecting value”—is around $36 million each year in perpetuity. Such asset allows us to participate in the global pharmaceutical industry, which earns up to $150 billion a year from sales of medicines and treatments derived from these resources. Some policies and systems are in place to protect our biodiversity, such as the National Integrated Protected Areas System Act of 1992, which I authored and sponsored while in the Senate. But protection and conservation are grossly unfunded. A 2014 study
Robredo can be antipoverty czar Ernesto M. Hilario
ABOUT TOWN
N
OW that the dust has settled in the no-holds-barred contest for the top 2 elective positions, Rep. Leni Robredo is officially the next vice president of the country. Not only is she one heartbeat away from the presidency since she is next in the line of succession according to the Constitution, she could be the most formidable candidate for president in 2022, that is, if she plays her cards right between now and the next presidential polls.
There was no doubt that with his lead of 6 million votes over his closest pursuer, Mar Roxas, Davao City Mayor Rodrigo Duterte was the runaway winner in the presidential derby among five candidates. But the vice-presidential race was too close to call. Sen. Bongbong Marcos was leading by a million votes over Robredo a few hours from the close of voting on May 9 until the wee hours of the next day when Robredo began to lead by more than 200,000 votes in the partial and unofficial results from the Parish Pastoral Council for Responsible Voting (PPCRV). This lead was proven accurate by the final and official results of Congress, sitting as the National Board of Canvassers, on May 27. Before the Liberal Party (LP) fielded her as its vice-presidential candidate, Robredo was a virtual unknown in national politics, as she was a first-term congresswoman in Camarines Sur. But she is a lawyer who immersed herself in non-government organization work. That’s why the Mapalad farmers, whom she helped in the past, supported her candidacy to the hilt. The sup-
port by the vast LP machinery no doubt helped her immensely in prevailing over an established politician like Marcos. The question now is: What role will Robredo play in the Duterte administration? She had earlier said she would prefer working in the war against poverty. She could be appointed head of the National Anti-Poverty Commission, but that office appears to be doing just policy research and coordination work and has no real power to mobilize resources held by other departments and lower agencies. If she is appointed as antipoverty czar, she should be vested with greater powers than research and coordination work. If Robredo performs well as antipoverty czar, then she could very well be in a good position to aspire for the presidency in 2022. It’s no secret that Senator-elect Manny Pacquiao also wants to run for president. So would it be Robredo versus Pacquiao six years from now?
MVP Group, GT Capital seal strategic partnership
IT was bound to happen, this tie-up
Before the Liberal Party fielded her as its vice-presidential candidate, Robredo was a virtual unknown in national politics, as she was a first-term congresswoman in Camarines Sur. But she is a lawyer who immersed herself in NGO work. That’s why the Mapalad farmers, whom she helped in the past, supported her candidacy to the hilt.
between two business conglomerates engaged in power generation, among others. We’re talking about the acquisition by Metro Pacific Investments Corp. (MPIC) of a 56-percent stake worth P22.06 billion in Global Business Power Corp., George Ty’s power-generation company, as part of the strategic alliance between the Pangilinan-led group and the Ty family. Under the deal, GT Capital will acquire a 15.6-percent stake in MPIC, making it the second-largest investor in the infrastructure conglomerate controlled by Hong Kong-based holding firm First Pacific Co. Ltd. GT Capital will buy 4.98 billion common shares of MPIC at P6.10 per share, for a total of P21.96 billion. It will also acquire another 1.3 billion common shares from Metro Pacific Holdings Inc. (MPHI), the majority shareholder of MPIC, at the same price for P7.93 billion. First Pacific will remain the controlling shareholder of MPIC with a 55-percent voting interest. According to MPIC Chairman Manuel V. Pangilinan, the partner-
There’s no way to manipulate President Putin
MAY we call your attention to another writing of Bloomberg’s Leonid Bershidsky, which came out in the BusinessMirror on April 16. Biased and partial, he appears to be your only expert on Russia. His latest publication headed as “Putin tones down his annual reality show” openly demonstrates his intolerance toward Russia. His main idea, however, is worn out: “President Putin’s disconnect with reality.” In fact, during his traditional long interview, Vladimir Putin answered over 70 questions showing a clear
understanding of the current situation. How many world leaders would be able to respond to dozens of live provocative questions in a similar manner? Some leaders can only limit themselves to jokes, prepared ahead of time. Same refers to the April 16 Web-repost of the Bershidsky’s article, entitled “Were the Panama Papers Planted?” The so-called Panama leaks represent utmost rumors. Should the Russian president possess assets abroad—this fact would have been immediately utilized to attack the Russian national leader. In fact,
there are no ways to manipulate Putin. This is probably why so many “global analysts” feel so concerned about him, and the only thing they can do is just spread speculations around his outstanding personality. Actually, Mr. Bershidsky himself seems disconnected from reality. The writer probably forgot that the popularity the Russian president enjoys has reached an unquestionable high of 80 percent. The corruption scandals has been a distinguishing feature, imminent to the so-called color revolutions in
post-Soviet countries. However, Russia is immune to any coup scenario. Russian officials are not corrupt and do not own property abroad, and there is no way to exert influence upon them. Your esteemed newspaper is certainly rightful to choose its authors and references. It is surprising, however, that Mr. Leonid Bershidsky and the Bloomberg agency were chosen your main source on Russia people for supporting its national leader. Believe, the Philippine audience deserves something
by the Department of Environment and Natural Resources and Gesellschaft für Internationale Zusammenarbeit of Germany found that the management of up to 61 protected areas (PAs) rated “poor to fair” with none meeting international standards. The same study found that government spends only P39 per hectare of PA and employs only one person for every 2,300 hectares of PA. Last December the Biodiversity Management Bureau estimated that government needs to spend up to $7.4 billion (P334 billion) in the next 13 years—or P24 billion annually—to implement the Philippine Biodiversity Strategy and Action Plan. The incoming administration can and must devote sufficient resources and singular focus to preserving and conserving our ecological treasure. E-mail: angara.ed@gmail.com.
ship “is part of our drive to accelerate the pace of overall participation in the power-generation sector, while allowing Meralco to focus predominantly on the development of its “One Meralco” strategy focused on servicing its Luzon customers.” Pangilinan believes this investment will strengthen MPIC’s financial standing and, at the same time, allow the two conglomerates to accelerate their involvement in the country’s infrastructure development. For his part, GT Capital Vice Chairman Alfred Ty, son of George Ty, said the strategic alliance provides the conglomerate an opportunity to look at other aspects of the economy. “With this investment, GT Capital now becomes the strategic investor of MPIC, a dynamic growth company embedded in the most critical sectors of power, water, toll roads, railways and health care,” Ty said. “This is a significant milestone for GT Capital since it expands and strengthens our core sector coverage with an infrastructure platform ensuring sustainable growth,” he added. MPIC will undertake the acquisition of Global Business Power through its affiliate Beacon Electric Asset Holdings Inc. Funding will be sourced from its internal resources and bank loans. At present, Global Power is the leading power supplier in the Visayas region and Mindoro Island, with a combined gross dependable capacity of 625 megawatts (MW) comprising 617.5 MW of power supplied to the Visayas grid and 7.5 MW of power supplied to Mindoro Island. E-mail: ernhil@yahoo.com.
less partial, more objective, free of prejudice, personal dislikes or outdated clichés. I hope this letter will be published in your newspaper. The Embassy of the Russian Federation is open to contacts and partnership with you and will be ready to assist in any matter concerning objective and truthful coverage of the events related to Russia. Ilya Perenkov Press Attaché The Embassy of the Russian Federation
2nd Front Page BusinessMirror
A12 Tuesday, May 31, 2016
www.businessmirror.com.ph
Congress proclaims Duterte, Robredo C A
House Speaker Feliciano R. Belmonte Jr. and Senate President Franklin M. Drilon said members of Congress have unanimously approved in a joint session Resolution of Both Houses 1, submitted by the National Board of Canvassers (NBOC), showing Duterte and Robredo as winners in the May 9 national elections. Duterte, who skipped the proclamation ceremonies, won by a landslide 16,601,997 votes, while Robredo garnered 14,418,817 votes. Duterte will be the 16th president of the Republic of the Philippines.
Vulnerable
VICE-PRESIDENTIAL bet Sen. Ferdinand Bongbong Marcos Jr.’s campaign adviser and Party-list Rep. Jonathan de la Cruz of Abakada, in a speech before the approval of the resolution, scored vote-counting machines provider Smartmatic. “Clearly, the system as we know it and as implemented in the past three automated elections by the Comelec [Commission on Elections] and its technology partner, a company now known as ‘Smartmagic,’ has been shown as liable to outside interference,” he said.
My bed is here. My room is here. My home is my comfort zone. It’s important that I can sleep and take a shower comfortably.” —D
“It is vulnerable to rigging and manipulations. No less than former Comelec Chairman Christian S. Monsod has emphatically noted that the concerns raised in the May elections by lots of parties, including those who ran under the administration party, have seriously damaged the integrity of the entire automated election system [AES],” he said. Earlier, Marcos filed before the Manila City Prosecutor’s Office criminal charges against Comelec personnel and technology provider Smartmatic International for violation of the Cybercrime Prevention Act. The complaint alleged that Smartmatic and some Comelec personnel illegally accessed the transparency server of the poll body to introduce a new script on the night of May 9 without proper authorization.
Also, the Marcos camp filed before the Comelec charges of violation of the automated election law against Smartmatic employee Marlon Garcia, who was identified as the one responsible for introducing a new script in the transparency server. In his speech, de la Cruz said, “Let there be no doubt, while I strongly disagree with the NBOC’s count, I accept it. I accept with finality the count which was ratified by the joint session.” Marcos garnered a total of 14,155,344. Meanwhile, a Bloomberg report quoted Duterte as saying that he plans to work each day from 1 p.m. until midnight. “I don’t care about your 8 a.m.to-5 p.m. schedule,” Duterte said at a press conference in Davao City that began around midnight. “I’ll be sleeping by then. How can you make me work?”
Nor does he plan on giving up the creature comforts of his home in Davao, where he has served as mayor for more than two decades. The 71-year-old president-elect has vowed to catch a commercial flight to and from Manila each day until he adjusts to life in the presidential palace. Duter te ind icated t hat he planned to make the daily trip at least for the first few days of his administration. “My bed is here. My room is here. My home is my comfort zone. It’s important that I can sleep and take a shower comfortably,” the Davao City mayor said. Duterte has already shown a fondness for unusual working practices, including frequent latenight or early-morning press briefings. Set to be sworn in on June 30, he has pledged to curb crime and corruption, while continuing the economic policies of outgoing President Aquino. Duterte said that one of his most important tasks will be to pore over documents in his study before signing them. “Unlike others, I don’t like to sign them unless I know what I’m signing about. It would take time,” he said. With reports from
Bloomberg News
Bonds. . .
C A
Currencies THE MSCI Emerging Markets Currency Index declined 0.3 percent at 7:40 a.m. in New York, and is down 3 percent in May, snapping a three-month run of gains. South Korea’s won retreated 1 percent on Monday. For the month, South Africa’s rand led losses, sliding 9.8 percent. The yuan dropped as much as 0.3 percent to a four-month low in Shanghai after the People’s Bank of China weakened its daily fixing by 0.45 percent. With the United States poised to raise interest rates and pressure building on China to ease monetary policy, cash outflows will accelerate, said Song Yu, China economist for Goldman Sachs/ Gao Hua Securities Co. in Beijing. The Bloomberg Dollar Spot Index advanced 0.1 percent, bringing its gain in May to 3.6 percent. Sweden’s krona advanced against all of its 16 major currencies, as data showed the nation’s economy continued to expand in the first quarter amid record stimulus from the central bank. The euro gained, after a report showed economic confidence in the 19-nation currency bloc rose for a sec-
ond month in May to a four-month high. The currency climbed 0.2 percent to $1.1142, paring the decline this month to 2.7 percent. The yen fell as much as 1 percent to 111.45 per dollar after an aide to Prime Minister Shinzo Abe said a salestax increase will probably be delayed. Japan released retail sales figures on Monday, showing that growth stalled in Asia’s second-biggest economy, bolstering the case for a planned sales-tax increase to be postponed.
Commodities GOLD for immediate delivery dropped as much as 1 percent to $1,199.80 an ounce, a level last seen in February, and is down 7 percent in May, the biggest monthly decline since June 2013. Money managers’ cut bullish bets on the metal by the most this year during the week ended May 24, according to US Commodity Futures Trading Commission data. Silver slid 1.5 percent, while platinum retreated 0.5 percent, as the prospect of higher US borrowing costs damped the appeal of noninterest-bearing assets. Copper futures slipped 0.9 percent in New York, snapping a four-day advance. The London Metal Exchange was closed on Monday.
Bloomberg News