BusinessMirror April 14, 2016

All-New

THE ALL-NEW CIAZ SEDAN

SUZUKI Philippines Managing Director Normino Mojica (from left), Suzuki Motor Corp. Division General Manager for Asia Automobile Minoru Amano, Asean/Oceana Marketing Group’s Kennosuje Ouci and Suzuki Philippines General Manager Shuzo Hoshikura at the launch of the Suzuki’s All-New Ciaz Sedan that brings innovation and next-level driving experience for Filipino drivers. The Ciaz comes in three model variants: the GL Manual Transmission, the GL Automatic Transmission and the Premium GLX. The launch was held at White Space in Makati City. ROY DOMINGO

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A broader look at today’s business

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Thursday, April 14, 2016 Vol. 11 No. 187

AFTER DOMINATING REALESTATE MARKET AT HOME…

PHL property giants ready to conquer Southeast Asia B VG C

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@villygc

HE country’s two largest property developers are now racing to expand in other parts of Asia, mainly in the 10-member Asean.

Top officials of SM Prime Holdings Inc. and Ayala Land Inc. have expressed interest to expand in Asean, after conquering most of the market at home. Both stirred the economy from a near-frenzied construction of the country’s overt signs of brisk economic activity:

INSIDE

SUN, SAND AND SURF PLUS SOME IN SAN JUAN

LIFE

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Sports BusinessMirror

IN MONACO

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| THURSDAY, APRIL 14, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana

PHILADELPHIA’S Stauskas (11) slam one in against Toronto’s Bismack Biyombo. AP

ROGER FEDERER cruises to victory in his first match in more than two months following a knee operation that left him fearing for his playing career. AP

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ONACO—A relieved Roger Federer cruised to victory at the Monaco Masters on Tuesday in his first match in more than two months following a knee operation that left him fearing for his playing career. Beating Spaniard Guillermo Garcia-Lopez, 6-3, 6-4, in the second round is nothing special for a 17-time Grand Slam champion with 88 career titles. But it was more about relief than anything else for Federer, who had arthroscopic surgery on February 3 for torn cartilage in his left knee. Casting his mind back to the hours following his operation, Federer recalled his feelings—which were a mixture of the rational and irrational. “When I woke up and I looked at the knee I got the impression that it wasn’t my leg,” the Swiss star said. “I was in a bit of pain as well, and that’s the moment when I became quickly afraid what would happen next. “That’s when you realize, that if you want to be a professional player, you need to be able to go flat out.” Added to the worry of the first operation of his career at the advanced age of 34, Federer also went under general anesthetic for the first time in his life, having previously had only a local anesthetic when he had wisdom teeth removed. “I was scared before the operation and I was scared after the operation,” Federer said. “I was scared when I was on crutches, then when I was walking differently on crutches, then walking in the stairs, then walking without the crutches. It’s like taking a step forward each time, like being a kid.” Despite the previous fears, Federer is totally confident that his knee will hold up. “My doctor told me ‘Look, now you’re healed you can really go for it.’ If there is any fear left in my mind then it comes from me,” he said. “But there is no pain left and that’s incredibly reassuring. I think now it’s a case of how the knee is going to feel after three games?’ But I’m not too scared about that because I’ve really pushed things in training.” Federer hadn’t played since losing to top-ranked Novak Djokovic in the Australian Open semifinals in late January. “I was very excited and tense,” said Federer, who was scheduled to play at the Miami Masters two weeks ago but pulled out because of a stomach virus. “It was a perfect match, because it was close in the beginning and then I could go on a roll.” In sunny conditions, Federer looked untroubled before a rare blip saw him broken at love, when serving for the match at 5-2. But he concluded his straight-set victory by winning his next service game. After Andy Murray had overcome some sloppy serving to beat Pierre-Hugues Herbert, 6-2, 4-6, 6-3, in his second-round match, Federer looked sharp whenever he came to the net. “I could go freely,” said Federer, who plays either No. 14 Roberto Bautista Agut or Jeremy Chardy in the third round on Thursday. Federer geed himself up with a shout of ‘Come on’ when he broke for a 2-1 lead in the second, then went up a gear when he broke Garcia-Lopez to love in the fifth game and then opened with an ace in the sixth. AP

‘GIVE THEM CREDIT’ B P A

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The Associated Press

ORONTO—Toronto Coach Dwane Casey probably could be forgiven for a bit of scoreboard watching on Tuesday night. Though the Raptors’ 12th straight win over the Philadelphia 76ers, 12298, did not affect their Eastern Conference playoff standings, a couple other games did. The Indiana Pacers beat the New York Knicks and the Detroit Pistons fell to the Miami Heat. That meant the Pacers secured the seventh seed and will face the Raptors in the first round starting this weekend. Casey, who had refused to talk about who his team might play, finally turned his attention to that matchup. “They’re an experienced team, a talented team,” he said of the Pacers, who finished 11 games back of Toronto. “Paul George is one of the elite players in the league. The young kid Myles Turner has really come on. Ian Mahinmi is one of the most improved players in the league. You can go right down the list, they have a very talented roster and their core has been there before.” With the postseason in mind, Casey carefully regulated the minutes of most of his players, with rookie Norman Powell the only one to get more than 30 minutes of action. Powell responded with 18 points, while Jonas Valanciunas chipped in with 17 more and 11 rebounds for his team-leading 22nd doubledouble of the season. Philadelphia, which lost its 15th straight road game, last beat Toronto on January 18, 2013. With the loss, Philadelphia became just the fourth team in National Basketball Association history with 71 or more losses in a single season. The 1972-1973 76ers (9-73), the 1992-1993 Dallas Mavericks and 1997-1998 Denver Nuggets (both 11-71) are the others. “You give them credit,” Sixers Coach Brett Brown said of the Raptors. “They’re getting ready to go into a playoff series, they’re trying to find some level of rhythm and I thought we had a good first half.” It was a record-setting first 24 minutes for the Sixers, who converted 11-of-20 from beyond the arc, setting a new team mark for threes in a first half, per Elias Sports. Robert Covington had 24 points for Philadelphia on six-for-10 shooting from three-point range, Ish Smith added another 18, and Nerlens Noel had 14 points and 10 rebounds, matching a career-long streak with his third straight double-double. “It was just finding each other, the open man, moving the ball really well and getting into gaps and sinking the defense,” Covington said. “That’s what we did tonight that really helped us in the first half, and then we did in the second as well, we just didn’t make as many shots as we did in the first half.” In San Antonio Kawhi Leonard had 26 points as the San Antonio Spurs had to rally to beat the

short-handed Oklahoma City Thunder, 102-98, in overtime on Tuesday to finish 40-1 at home this season, matching an NBA record. The Boston Celtics had the same record in 1985-1986. San Antonio was lethargic coming off its first home loss of the season to the Golden State Warriors on Sunday. The Spurs never led in the final quarter in that loss and trailed throughout much of their home finale. Thunder Coach Billy Donovan rested stars Kevin Durant, Russell Westbrook and Serge Ibaka in their regular-season finale, while San Antonio Coach Gregg Popovich started his regular lineup. The Thunder were still able to force the first overtime in San Antonio this season. Four players finished with 17 points apiece for the Thunder. Chris Paul had 12 points and 13 assists as the Clippers extended Memphis’s freefall to the final night of the NBA’s regular season, defeating the Grizzlies, 110-84. Losing for the ninth time in 10 games, Memphis dropped into a tie with the Dallas Mavericks for sixth place in the Western Conference. The Grizzlies finish the season on Wednesday at Golden State, where the Warriors will be going for their NBA-record 73rd victory. Dallas hosts San Antonio. Austin Rivers scored 14 points for the Clippers, who shot 55 percent and outscored Memphis 22-6 in fast-break points as they posted their 10th win in 11 games. Jeff Green scored 13 points and Blake Griffin added 12. DeAndre Jordan grabbed 12 rebounds. Zach Randolph scored 14 points and Jarrell Martin added 12 for the Grizzlies, who’ve lost three in a row. Dwyane Wade got off to his slowest start offensively in a decade but finished with 14 points to help the Miami Heat beat the Detroit Pistons, 99-33. Miami will win the Southeast Division and earn home-court advantage in the first round of the playoffs if it closes the regular season Wednesday night by beating Boston on the road. The Pistons’ loss sealed their spot as the eighth-seeded team in the Eastern Conference, setting up a matchup with top-seeded Cleveland. Wade didn’t score until there was 4:14 left in the first half. He had not been scoreless that long at the start of a game since March 17, 2006, against Charlotte, according to STATS. Wade broke his scoreless start with a three-point play and had seven points in a 50-second stretch. In Indianapolis Paul George and George Hill each scored 19 points as Indiana beat New York, 10290, to win its final home game of the regular season. Trailing 64-62, the Pacers (44-37) finished the final seven minutes of the third quarter with a 17-6 run that gave Indiana a 79-70 lead heading into the final period. New York (32-50) led at the end of the first and second quarters before the Pacers rallied in the third quarter. Derrick Williams scored 21 points for New York and Jerian Grant finished with 18.

N a bustling, densely populated corner of Manila, fruit vendor Coring Gutierrez reads $35 due from her latest water bill, more than triple what her family of six paid 15 years ago. “As long as we get water,” she sighs, reflecting the relief many of the Philippine capital region’s nearly 12 million residents feel about having a steady and safe-water supply. Water was not supposed to become so expensive for Manila under a 1997 World Bank deal that privatized the seaside city’s water and sewage management. That arrangement is under fire by the US congressional committee that oversees the international development bank, which is now C  A

SPORTS

C  A

Manila’s water-privatization plan draws US rep’s flak for IFC role

‘GIVE THEM CREDIT’ RELIEVED

from shopping malls to residential condominiums to office towers mainly servicing business-process outsourcing firms. Since last year, Ayala Land has set foot in Asean after buying a minority stake in a midsized

Yes, we’re looking [for opportunities outside of the Philippines]. [But our moves] will have to encompass the Asean region.” —S J.

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‘Footwear, garments sectors not ready for US-led TPP’

WORKERS unload counterfeit goods, mostly rubber slippers and sandals, for shredding at a customs-bonded warehouse in Cabuyao, Laguna, on Wednesday. The intellectual-property (IP) agency began destroying this month counterfeit goods—ranging from shirts, shoes, toys and electronic products to food seasoning—worth P9.3 billion. IP protection is one of the key areas of cooperation in the Trans-Pacific Partnership agreement. AP

The problem is not the absence of the market but [local] production.”—O-L B C N. P

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@c_pillas29

X PORTER S said on Wednesday it would be difficult for local manufacturers to meet the requirements of foreign buyers for footwear and garments under a free-trade agreement (FTA) in Asia Pacific, led by the United States. Philippine Exporters Confederation Inc. (Philexport) President Sergio R. OrtizLuis Jr. said the World Bank may have failed to factor in a “domestic dilemma,” when it said that local apparel and footwear exports will be affected if the Philippines will sign the Trans-Pacific Partnership (TPP) deal.

The World Bank report, titled “East Asia and Pacific Economic Update,” noted that Philippine apparel and footwear exports could decline by 19 percent due to increased competition from TPP members. “As far as garments and footwear are concerned, the problem is not the absence of the market but [local] production,” Ortiz-Luis said in an interview. “We’ve been egging shuttered garments makers to increase shipments to European countries and the US, but we have difficulties meeting their requirements,” he added. Under the TPP, the World Bank said the textile and garments sector could see a relatively large increase in output and C  A

IN this February 23 file photo, Manila Water Co. covers a pipe next to a garbage-filled creek in Mandaluyong City. AP

‘PHL needs to rely on domestic demand to sustain growth’ B B C

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

@BcuaresmaBM

HILE the Philippines is expected to grow even more this year than the previous, the $285-billion economy was not likely to derive many more benefits from the external sector, as the global economy should remain weak the rest of the year. Bangko Sentral ng Pilipinas (BSP) Deputy Governor for the

PESO EXCHANGE RATES n US 46.0710

Monetary Stability Sector Diwa C. Guinigundo, in response to a query, told the BusinessMirror the global outlook remains dour. “On balance, we continue to see a weak global economy and its pull- down effect on the balance-of-payments [BOP] outlook,” Guinigundo said. The country’s BOP, or the summary of its transactions with the rest of the world, has shown signs of external weakness in recent months.

A deficit in the BOP signifies more dollar outflows than inflows during the period. Latest data from the central bank show the BOP in February posting a deficit of $316 million. This was the second consecutive month that the BOP sustained an imbalance following January’s $813-million shortfall. This development brought the aggregate BOP deficit in the first two months to $1.129 billion.

In the latest issue of the World Economic Outlook (WEO), the International Monetar y Fund (IMF) said it was crucial for the Philippines to boost its capacity to maintain strength over an extended period of time due to heightening downside risks generated by external volatilities. “The economic outlook is one of the strongest in the region but subject to increased downside risks, including lower growth in China

and the region, higher global financial volatility and capital outflows, and weather-related disruptions,” IMF Resident Representative to the Philippines Shanaka Jayanath Peiris said. In particular, the United States, still the world’s largest economy and one of the country’s major trading partners, has reported mixed macroeconomic numbers that may or may not make the case for

n JAPAN 0.4242 n UK 65.7065 n HK 5.9415 n CHINA 7.1240 n SINGAPORE 34.3046 n AUSTRALIA 35.3825 n EU 52.4518 n SAUDI ARABIA 12.2889

S “PHL,” A

Source: BSP (13 April 2016 )

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Ciaz sedan

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A2 Thursday, April 14, 2016

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Time for Pinoys to take second look at Qatar

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B R L. M

@rectomercene

OHA—Qatar has been undergoing unprecedented economic, cultural and societal development during the last few decades, but the nine-hour flying time from Manila had practically isolated the Philippines from these feverish developments. With the advent of cheap air travel, maybe it is time for Filipinos to take a second look at and include this tiny Emirate in the Arabian Sea in their travel plans. Philippine A irlines (PA L) is now one of three carriers serving the Manila-Abu Dhabi-Doha route following its inaugural flight on March 18. PAL Flight PR 656 will be available four times a week, every Monday, Tuesday, Friday and Saturday. The flight leaves Manila at 12:30 a.m. and arrives in Doha at 8:15 a.m. Meanwhile, the Doha-Abu Dhabi-Manila flights, or PR 657, will be offered every Tuesday, Wednesday, Friday, Saturday and Sunday. The flight will leave Doha at 10:05 a.m. and arrive in Manila at 3:50 a.m. the following day. The other carriers serving the route are Cebu Pacific and Qatar Airways. CEB’s Manila-Doha is the low-cost carrier’s fifth long-haul route—and fourth to the Middle East. The highly successful carrier is also seeking additional traffic rights to the United Arab Emirates, which would be used to launch services to Sharjah. Qatar Airways connects to Manila 14 times a week, leaving the Ninoy Aquino International Airport at 1:35 a.m., followed by the second flight at 8:45 a.m. on the same day. All three flights land at the Hamad International Airport (HIA).

The new HIA

THE spanking new HIA has a capacity of 50 million passengers per year, and eventually could handle up to 93 million per year, making it the second-largest airport in the region after Dubai. It is also expected to handle 320,000 aircraft movements and 2 million tons of cargo annually. The check-in and retail areas are expected to be 12 times larger than those at the current airport. HIA is two-thirds the size of Doha and has an oasis theme. Many of the buildings have a water motif, with wave-style roofs and desert plants growing in recycled water. Half of the airport was reclaimed from the sea. It has two runways and one is

$137,200 Qatar’s per-capita GDP

the second longest in the world, at 4.8 kilometers. Qatar sits on the Persian Gulf (Arabian Gulf) and is preparing for the future, when oil revenues totally dried up. The emirate is using its oil money in infrastructure, like airports, subways, new cities, malls, and five-star hotels and condos galore. These infrastructure and altars of entertainment are meant to assure that its citizens will remain employed and kept busy. Qataris enjoy all the trappings of Western civilization: fast cars, flashy timepieces, high fashion, nightlife and a degree of freedom not enjoyed in other Middle East countries, like Iran, Saudi Arabia, Iraq or Syria. Other Middle East countries should emulate Qatar so that their energetic young men and women, who are in the majority, would not express their frustrations of being imprisoned by religious intolerance. This is one of the reasons some of them opt to join terrorist groups, like al-Qaeda and the Islamic State in Syria and the Levant, author and journalist Thomas Friedman said.

Small but rich

QATAR is roughly the size of Mindoro Island. The Philippines, with all of its more than 7,000 islands dotted with numerous tourist come-ons, beats Qatar hands down, since a big slice of that emirate’s real estate is sand. The Philippine population stands at 100 million as against Qatar’s 2.2 million inhabitants. Don’t be fooled by the numbers. Qatar’s per-capita GDP is one of the highest in the world at $137,200 (2014 estimate), as against the Filipinos’ $6,962 percapita GDP. With so much money in its hands, it is no surprise that this emirate is pulsating with unbounded energy and optimism, symbolized by Sheik Tamim bin Hamad Al Thani.

He is the eighth and current prince of Qatar. The fourth son of the previous emir, Sheik Hamad bin Khalifa Al Thani, he became emir of Qatar at 33 on June 25, 2013, after his father’s abdication. Sheikh Tamim has held a variety of government posts within Qatar, and also worked to promote numerous sporting events within the country. As of 2013, Tamim is the youngest reigning monarch among the Gulf Cooperation Council (GCC) members, and the youngest current sovereign worldwide, Wikipedia said. GCC is the political and economic alliance of six Middle Eastern countries—Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman.

Elibriea

ABDUL WAHAB, in his 30s, is a recent graduate of the Texas A&M University of Qatar who has designed and developed a concept supercar, the Elibriea. The car is designed to resemble a stealth fighter jet. “It’s an advanced prototype that we can later market and manufacture professionally,” the corporate communications manager of the Ali Bin Ali Group said. “This idea won’t stop here at the prototype stage. It has big potential to grow.” The car’s futuristic design and “Made in Qatar” stamp seemed to impress many visitors at the auto show. The car project has the blessings of Sheik Al Thani and was liberally funded by the Ali Bin Ali Group. It was easily snapped up by a Qatari following a presentation, and Wahab is now back to the drawing board designing a faster hypercar. “Making the Elibriea is part of the Qatari identity, because this is the

Elibriea Qatar’s concept supercar designed to resemble a stealth fighter jet

first possibly ever machine built at this level in Qatar,” Wahab was quoted as saying in Desert Riders magazine, whose executive editor, Ley Pascual, is a Filipina.

Qatar vision

AIMING to minimize reliance on energy, Doha has invested its fund predominantly in international markets (the US, Europe and the Asia-Pacific region) and within Qatar outside the energy sector. The Qatar National Vision 2030 foresees the shift from natural gas-based revenue to Qatar Investment Authority-type investments between now and a few decades down the road. In Januar y 2013 one writer pegged the QIA investment in Britain at €30 billion, France €10 and Germany €5 billion, while another reported that the total assets under management in June 2013 was on the order of $100 billion. Qatar is run mostly by foreigners. This emirate is so rich, it imported, lock, stock, and barrel prestigious colleges and universities from the United States and France. These are Carnegie Mellon University, Georgetown University School of Foreign Service, Hamad Bin Khalifa University, Cornell University, Harvard University, Yale University, HEC Paris, Northwestern University and Texas A&M University. Qataris are employed in some of the choice posts in government, such as those in customs, immigration, police, airlines, the courts and the like.

Pinoys in Qatar

LEGACY carrier PAL flew to Qatar as part of its expansion in the Middle East. It also aims to get a slice of the 200,000 overseas Filipino workers (OFW) laboring in Doha. Filipinos are the second-largest group of foreign workers in Quatar, after India, with 57,000. Qatar is the third-largest destination of Filipino migrant workers in the Middle East, after the United Arab Emirates and Saudi Arabia, and also the fourth-largest destination of OFWs worldwide. PAL hopes that the tourist flow between the two countries would increase over the years. Although cash-loaded Qataris would rather visit Europe or the US, PAL Vice President for Philippines Sales Harry Inoferio said we could entice them through our first-class tourist spots, like the exclusive resorts in Palawan or Davao. He suggested that the Department of Tourism establish an office in Doha to promote the Philippines’s various destinations. “We can also tell Middle East countries that we have halal

foods, contrary to existing beliefs,” Inoferio said.

Plenty to see

QATAR, and the rest of the emirates bordering the Persian Gulf are dredging the seas and turning them into tourist castles. The country has established a reputation for building dozens of eclectic skyscrapers, which have transformed its skyline into tourist-viewing spectacles themselves. More than 50 towers could be seen in Doha, the largest of which was the Doha Convention Center Tower. It is 551-meter (1,808-foot) skyscraper. The other most interesting buildings are Aspire Tower, Kempenski Residences and Suites, Palm Towers I &II, Burj Qatar, Navigation Tower, Al Bidda Tower, Tornado Tower and Dubai Tower, among others. There are twin crooked tower designs, as if they were about to fall down. A building that resembles a flower vase; others that catch your breath because they seem to twist and sway upward in a sweeping column of glass and steel. “Sad to say, the Philippines has the most boring collections of buildings,” a British expat said. In 2014 a senior government official announced that Qatar would be spending $65 billion on new infrastructure projects in upcoming years, in preparation for the 2022 World Cup. “Half of the world’s construction cranes are in Qatar and Dubai,” said our guide, an expatriate from Egypt. One new city-like clusters of buildings that rose from the sea is The Pearl, an artificial island spanning nearly 4 million square meters. It is the first land in Qatar to be available for freehold ownership by foreign nationals.

Fifa 2022

IN 2015 Fifa confirmed that the 2022 World Cup will be hosted by Qatar in November, the first time the international tournament will not be held in summer. In preparation, Qatar is building eight stadia. These are designed so that after the Games, six of these stadia would be disassembled and given away to other Muslim countries without stadia. Construction of the subway is under way to reduce traffic congestion. The Doha Metro is a rapidtransit train scheduled to be on stream by the end of 2019. It will have four lines with an approximate overall length of 300 km and will have 100 stations. It will be an integral component of the larger Qatar Rail network, which will include a long-distance rail for passengers and freight, linking Qatar to the GCC, and Lusail’s city local lightrail transit.

Where to go

FOR Filipinos, must-visit sites include Qatar’s Museum of Islamic Art (MIA). It was designed by IM Pei, the same guy who added the pyramid to

the Louvre Museum in Paris. The MIA is influenced by ancient Islamic architecture, and was the first of its kind in the Persian Gulf. It sits on an artificial island, surrounded by a park and has one of the largest collections of Islamic art. The National Museum of Qatar (NMQ) nearby is almost finished, and, like the MIA, it is located at Doha’s Corniche, a waterfront promenade extending several kilometers on the Doha Bay. “The NMQ will give voice to Qatar’s heritage, while celebrating its future,” said Marhaba, Qatar’s premier information guide. Here, visitors can learn about Qatar’s ancestors and the formation of early cities, as well as the modernization of Qatari society. For inveterate shoppers, there is Villagio Mall, a knock-off of Las Vegas’s and Macau’s Bellagio shopping malls. It has also that iconic Venetian canal and a signing gondolier, only much bigger. There’s also the City Center, where malls as big as ours line the streets along the eclectic skyscrapers. With so much money in their hands, what do the regular Qatari citizens do to while the time away? Some engage in the royal sport of falconry. Some of these feathered friends cost as much as P1 million per bird and a regular practitioner must have dozens of them. The Souq Waqif Falcon Hospital is dedicated to keeping falcons healthy. They have an operating room for birds injured in the pursuit of prey, performed by licensed surgeons. For souvenirs, Doha’s Souq Waqif is the place to go. It is a typical Arab bazaar noted for selling traditional garments, spices, handicrafts and souvenirs. It is also home to dozens of restaurants and Shisha lounges, another name for hookah lounge where patrons, students and yuppies share shisha from a communal hookah, or which is placed at each table. Hookah lounges do not typically have liquor but get their revenue from sales of coffee, tea or sodas and snacks. Almost all offer Turkish coffee. Qataris enjoy driving those supercars and top-of-the-line motorcycles and racing speed boats along the Gulf and had regular races for such events. They have regular exhibitions of antique cars and motorbikes, and just about any social and cultural activities you can name. At night, Qataris are patrons of five-star hotel bars and lounges, where some—believe it or not—belt out long pent-up passions expressed through songs in karaoke machines. One of t he l argest projects under way in Qatar is Lusail City, a planned community north of Doha which is estimated to be completed by 2020 at a cost of approximately $45 billion. It is designed to accommodate 450,000 people. Al Waab City, another planned community under development, is estimated to cost Qatari riyal 15 billion. In addition to housing 8,000 individuals, it will also have shopping malls, educational and medical facilities, according to Wikipedia. Since 2004, Doha has been undergoing a huge expansion to its transportation network, including the addition of new highways, the opening of a new airport in 2014, and the ongoing construction of an 85-km metro system. These have all been a result of Doha’s massive growth in a short period of time, which has resulted in congestion on its roads. The first phase of the metro system is expected to be operational by 2019. In 2015 the Public Works Authority declared its plan to construct a free-flowing road directly linking Al-Wakrah and Mesaieed to Doha in order to decrease traffic congestion in the city. It is set for completion by 2018. These ribbons of highways are where Qataris drive their expensive vehicles, like Lamborghinis and Ferraris, and top-of-the-line motorbikes in unwarranted numbers.

news@businessmirror.com.ph

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PHL property giants ready to conquer Southeast Asia C  A

Malaysian property developer and setting its sights in other countries in Southeast Asia. Meanwhile, SM Prime has confirmed for the first time that it is now looking at expanding in other parts of Asia and possibly in other parts of the globe. SM Prime is the country’s largest property company with a market capitalization of about P644.11 billion. Ayala Land follows with a market cap of P525.36 billion. While formidable players, Andrew Tan’s Megaworld Corp. and Gokongwei’s Robinsons Land Corp., are still playing catch up with the top 2. SM Prime is mostly known for its shopping-mall development, while Ayala Land is mostly into property development and commercial leasing space. “Yes, we’re looking [for opportunities outside of the Philippines],” SM Prime Chairman Henry Sy Jr. said. “[Our moves] will have to encompass the Asean region.” SM Prime has previously said it only wants to focus on China, rather than other markets, as it still sees growth in the world’s second-largest economy. Sy said the company received a

lot of proposals, starting from when the company was integrated from just a simple listed mall-operator into an integrated real-estate developer after the combination of all SM property development units in one roof, with SM Prime as the surviving entity. “But we want to disclose that [expansions in Asean] if and when we had the agreements, rather than exploratory,” Sy said. Jeffrey Lim, SM Prime executive vice president and who now sits at the board of company, said if the company wants to go out of its traditional market, it has to be a longterm investment. He said the company may still focus on shopping-mall development overseas. “If we go out of the Philippine market, we have to look for a jointventure partner because it’s going to be difficult for us to go in without the local knowledge of [that] market,” he said. “In the shopping-mall development, you need retail so the anchor tenant component is very crucial. I don’t think we’re going to any country without having a good partner that can help us for the retail side.” Lim cited Thailand as a possible location. In Asean members, like Lao PDR and Myanmar, he said there

could be problems like the high cost of land. “If you go to Myanmar, the land is more expensive than in Makati. So I think we just have to be disciplined,” Lim said. “We just have to wait and see first.” Luis Limlingan, managing director at brokerage firm Regina Capital and Development Corp., said a large company, like SM Prime, has to go out of the country for it to grow further. “Fund managers still give a big value on China growth, but it makes better sense for them [SM Prime] to look at other countries, like Indonesia,” Limlingan said. SM Prime’s share price was one of Wednesday’s most traded shares, gaining P0.25, or 1 percent, to close at P22.90. Its parent SM Investments Corp. was the top traded share gaining P3, or 0.31 percent, to P963. To date, SM Prime has a total of 56 Malls in the Philippines, with total retail space of 7.3 million square meters (sq m). Its China shopping malls have a total of 900,000 sq m. SM Prime earlier said it is allotting some P20 billion a year through 2018 for its China operations to bring its current portfolio of five malls to nine, while expanding to other sectors, such as the residential and office buildings.

Company officials are now cutting that investment to just P10 billion a year, saying they do not want to spend too much on land banking. The company’s malls, however, are located in China’s second-tier and third-tier cities. Currently, the company’s malls in China include Xiamen, Jinjiang, Chengdu, Chongqing, Suzhou, Zibo and Tianjin, which the company still has to open. The Tianjin mall will be the SM group’s largest mall in China, measuring about 540,000 sq m. The company also plans to build a mall in Yangzhou City while also going into residential business. Ayala Land, meanwhile, said it wants to dig deeper into Asean after its acquisition of almost a third of Malaysia’s modular construction technology (MCT). Ayala Land President Bernard Vincent Dy said the company has no plans of exporting its own brand in Malaysia. However, he said the company is “continuously appraising prospects” in Myanmar and scouting for opportunities in Jakarta, Indonesia and Vietnam’s Ho Chin Minh City. “Property is not a linear business,” Dy said, adding that it will focus its sights on local soil and Malaysia as it may have specific projects that

the company may carry out itself or through MCT. Ayala Land in March raised P8 billion from a P50-billion bond plan the proceeds of which would be used partly to fund investment in Malaysian development and construction MCT Bhd. Dy said on Tuesday, “The market continues to be good” and the company is committed to a continued investment in its core businesses. “If you look at all the segments, it continues to grow,” Dy added. “Traditional markets continue to be quite robust, so we continue to invest in these areas quite heavily.” Dy noted its growth centers outside Metro Manila is increasing and expanding contribution to the Ayala Land income profile, now standing at about 30 percent of total earnings. Ayala Land CFO Jaime Ysmael said on Tuesday Ayala Land’s first quarter has been “quite good” based on the initial data of the first three months of the year. “Indication for the first quarter continues to be strong,” Ysmael said. “Basically, the trend continues to be quite good from the residential point of view, as well as the other business lines. So we still expect the first-quarter performance to be quite good.”

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economic ex pansion. Such uncertainty has made markets, analysts and investors around the world uncertain of what happens down the line. “The US Fed has turned more dovish recently. Am not sure if indeed the less than favorable economic prospects are the only underlying reasons for such an accommodative stance,” Guinigundo said. “I believe the recent strength of the US dollar is also a concern for the US and its implications on external competitiveness and ultimately on the real sector,” he added. Guinigundo also cited risks f r o m t h at o t h e r e c o no m i c powerhouse, China. “Beyond the US issue, we have to reckon with the China issues, including its weaker economic pace, possible another tweak of the RMB [renminbi] and the deleterious impact of low commodity prices including those of oil on the emerging markets,” he told the BusinessMirror. Finance Undersecretary Gil S. Beltran said the economy will have to rely on its own sources of strength this year. “Philippines growth will continue to rely on domestic demand given soft external demand,” he said. The IMF has said the Philippines were to grow by 6 percent this year, unchanged from an earlier forecast. For next year, the IMF sees the economy accelerating slightly to 6.2 percent. The Philippines grew by 5.8 percent in 2015. The government projects growth averaging 6.8 percent to 7.8 percent.

BMReports BusinessMirror

A4 Thusday, April 14, 2016

news@businessmirror.com.ph

Belmonte vows to pursue Cha-cha in next Congress

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B J M N.  C

@joveemarie

OUSE Speaker Feliciano Belmonte Jr. will continue to champion the call of business groups for economic Charter change (Cha-cha) when he returns to Congress in the next administration. Belmonte said he would refile Resolution of Both Houses 1, or the so-called economic Cha-cha, which seeks to amend the 60-40 rule that limits foreign ownership of certain activities in the Philippines. Several local and foreign business groups backed the passage of the measure in the 16th Congress.

“I w i l l ref i le t he measure amending economic provisions of the Constitution next Congress. That’s for sure. I will use the same formula stated in the Resolution of Both Houses 1,” Belmonte told the BusinessMirror. He said the economic Cha-cha is a larger contributor to economic

growth, as foreign direct investments (FDI) are seen to increase once ownership on estates and corporations, one of the issues raised by investors for not investing in the country, is relaxed. “By amending the restrictive economic provisions of our Constitution, we empower Congress to enact laws that will attract the kind of investments that will reverse the de-industrialization and deagriculturalization of our economy,” Belmonte said. The resolution, filed by Belmonte and Sen. Ralph G. Recto, will include the phrase “unless provided by law” in the foreign-ownership provision of the Constitution, particularly land ownership, public utilities, natural resources, media and advertising industries. Under Article XII of the 1987 Constitution, which was ratified

during the term of late-President Corazon C. Aquino, foreign investors are prohibited to own more than 40 percent of real properties and businesses, while they are totally restricted to exploit natural resources and own any company in the media industry. However, the lower chamber did not push through with the expected voting on third and final reading of the economic Cha-cha, apparently due to lack of affirmative votes. The chamber needs the vote of at least two-thirds of its membership, or 217 affirmative votes, to pass the Cha-cha measure. The voting has also been affected by the Palace’s, particularly President Aquino’s, stance against Cha-cha. During the recent BusinessMirror Coffee Club forum, Thierry Mathou, newly appointed

ambassador of France to the Philippines, said he is supporting the passage of the measure relaxing the Constitution’s 60-40 rule. “To attract more FDI, the country [Philippines] needs to change some rules [in the Constitution].” Businessman Manuel V. Pangilinan has also said that to promote inclusive growth in the country,

By amending the restrictive economic provisions of our Constitution, we empower Congress to enact laws that will attract the kind of investments that will reverse the deindustrialization and de-agriculturalization of our economy.”—B

Manila’s water-privatization plan draws US rep’s flak for IFC role. . .

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Manila Water’s rate hike since 1997

questioning whether the World Bank and its lending arm, the International Finance Corp. (IFC), should join in such “public-private partnerships.” In a letter sent on Tuesday to the World Bank president, the committee’s ranking member accuses the IFC of conflict of interest for its equity stake in one of two companies set up under the 1997 Manila water deal. The IFC’s stake in Manila Water Co. is “leading to warped incentives that negatively influence the institution’s ability to focus on expanding water access,” US Representative Gwen Moore, a Democrat from Wisconsin, says in the letter to World Bank President Jim Yong Kim. Moore wants the World Bank and the IFC to “cease promoting and funding privatization of water resources,” pending an evaluation of the IFC’s conflicts policy and practices and congressional hearings on the subject. The IFC on Tuesday welcomed Moore’s letter as a chance to discuss the issues, saying, “the World Bank Group takes real or perceived conflicts of interests very seriously,” according to the IFC’s chief communications officer, Geoffrey Keele. In an e-mail to The Associated Press, he noted that the IFC’s role in advising the privatization deal was done several years before it invested in the company, and that “the risk of perceived conflicts of interest was examined at each stage of the Manila Water investment approval.” Privately owned water utilities have existed for centuries in Europe and the US, but have recently ballooned into a huge industry. Worldwide, one in 10 people lack access to clean water, and for cash-short governments, privatization can help close that gap. But critics contend that privatizing water can make it more expensive, limiting access of the poor to the basic human right to clean water. The record in Manila has been mixed. Through much of the 1990s, supplies reached only about a quarter of the population, while the city utility lost up to 62 percent of its supply to leaks, illegal meter tampering and ad hoc connections. Sewage contamination made tap water undrinkable. Today, the IFC cites Manila as a success story, with relatively reliable services, though costs to consumers have soared. In 1997 the city paid the IFC $6.2 million to restructure management of its troubled water and sewage systems. Twenty-five-year concessions were awarded to two companies: Maynilad Water Services Inc. and

Congress should pass the resolution amending the economic provisions of the 1987 Constitution. Makati Business Club Chairman Ramon del Rosario Jr. also aired the group’s support for the amendments to the Constitution’s economic provisions to attract FDI, particularly seen the unemployment rate in the country is increasing.

IN this February 23, 2016, photo, a resident carries drinking water following an overnight fire at a poor neighborhood in Muntinlupa City. AP PHOTO/BULLIT MARQUEZ

Manila Water Co. The IFC opted to provide $60 million in loans to Manila Water Co., which took over wealthier districts where customers were more likely to pay. The IFC also bought a $15-million chunk of equity, or about 2.5 percent, in Manila Water. The company became profitable within two years, launched a public offering in 2005 and has invested in water systems in other countries, including India, Vietnam and Indonesia. Politicians who fear making unpopular decisions about utility tariffs tend to favor privatization. Even some US communities are turning to the private sector to fix outdated systems or improve oversight and counter troubles, such as the recent heavy metal contamination of tap water in Flint, Michigan, and New York City. Moore says the IFC and World Bank created a situation in Manila where prices were bound to soar, as profits were prioritized above the bank’s mission to alleviate poverty. She worries Manila is being touted as a model for other cities in Africa and Asia. “I am increasingly uneasy with water-resource privatization in developing countries, and do not believe that the current ring-fencing policies separating the investment and advising functions of the IFC are adequate,” her letter says, noting that the IFC was contracted to orchestrate programs in Benin and

Mozambique. Keele, the IFC spokesman, said the World Bank Group, in most cases, supports publicly run utilities with investments for upgrades and expansion. But sometimes governments seek out private operators. “In these cases, we assist the government in finding a private partner to do this through a public-private partnership, or PPP,” he said. “Our job is to support governments and help find a solution that works for them, whether it is a private- or public-sector led solution.” They might prefer private management if, for example, they are seeking management expertise, he said. Worry over privatizing access to water is growing, as dozens of municipalities terminate private management contracts or let them expire without renewal. In 2011 Italians voted in a referendum against privatizing control of water. A year earlier, Paris took control over its supply back from the water giants Suez Environment and Veolia Environment, which provide water services to nearly 200 million people worldwide. As urban populations expand while resources run dry, optimizing water use and sewage management is crucial for public health and quality of life. The UN’s International Resource Panel warned last month that nearly half the world’s population could be under severe water stress by 2030,

with projected demand outstripping supply by 40 percent. It’s a tough balance to strike: If water is too cheap, there is little incentive to conserve. Too costly, and the public suffers. Philippine law caps the rate of return on public utility assets at 12 percent, and in 2014 the Metropolitan Waterworks and Sewerage System ordered Manila Water to cut rates, saying it was overcharging customers. The company refused, took the case to the International Chamber of Commerce for arbitration, and lost. The 2015 ICC ruling said the IFC-brokered contract violated Philippine law. “Ironically, the World Bank— an institution with a povertyalleviation mission—has aligned its own financial interests more closely with large private corporations than with the millions of people who desperately need clean, safe drinking water,” said Nathaniel Meyer of the Bostonbased watchdog Corporate Accountability International. Manila Water’ Spokesman Jeric Sevilla said the company provides full services to 99 percent of its coverage area and is upgrading its distribution network with some 5,000 kilometers (3,000 miles) of new pipelines. The roughly 700-percent increase in rates since 1997 is in line with costs and less than what the poor would pay on the black market, he said.

But customers complain of weak or erratic water pressure and occasional shutdowns. “Even at night, very little water flows from the tap,” said Michael Eleazar, a rice trader from Manila’s San Andres district who earns $660 to $1,000 a month. He buys bottled water for drinking, but still pays $19 a month to Manila Water for water for bathing and for laundry, just once a week. “No matter how we try to save water, the bill is still high,” he said. Eleazar counts himself lucky to have water at all. Many remain off the water grid. “It is difficult not to have water. It’s better not to have electricity,” said 65-year-old Leoncia Duka, lighting a makeshift fire to cook a pot of rice for her grandchildren in the scrapwood shanty they call home. “The dishes remain unwashed,” Duka said, chuckling. “So I said, let’s just eat on banana leaves.” Asit Biswas, founder of the Mexico City-based think tank Third World Center for Water Management, says it’s hard to assess Manila Water’s record. There are no independent studies and the company refuses to provide technical data for analysis. “The emotional argument, that water is a human right, is a bit ridiculous. Food and shelter are also considered human rights, yet we pay for those without a thought,” he said. “But private management is usually going to be more expensive.” AP

exports, owing to the high level of reductions in import tariffs and nontariff measures, coupled with the comparative advantage of many TPP members in the sector. “For example, Vietnam’s textile and garment exports could expand by as much as 70 percent by 2030, following the reduction in import tariffs of up to 25 percent on some product categories in export markets such as the US,” the report read. The local garments industry has been on the decline since the mid2000s, owing to cheaper labor costs elsewhere in Asia, and the decision of the US to lift global textile quotas in 2005, allowing China’s apparel sector to flourish. The TPP aims to reduce import tariffs to zero for between 95 and 100 percent of tariff lines of its signatories, and reduce tariffs for several products that are considered sensitive, such as agriculture products for Japan and the US, dairy for Canada, and automotive for the US. “For nonmembers, the tariff-reduction schedules in the TPP could have potentially negative impacts, particularly in Japanese and US markets. These two markets account for about 80 percent of total GDP and 56 percent of the total population of TPP countries,” the report read. While the government mull over the country’s membership in TPP, Ortiz-Luis said exporters are banking on the European Union’s Generalized System of Preference Plus (EU-GSP+) scheme to boost shipments. EU-GSP+ is a preferential trade scheme being enjoyed by the Philippines since December 2014. It allows for the export of some 6,200 tariff lines to the EU at zero duty. Locally made garments, footwear, and processed food are some of the products that were seen as having “significant export potential” under the EU-GSP+. Economic and Trade division chief of the European Union delegation in Manila, Walter van Hattum, earlier said Philippine textiles exports to the EU in January to September 2015 rose by 15 percent. Van Hattum said footwear exports to the EU also doubled during the period. Despite the existence of these preferential trade schemes, the Department of Trade and Industry (DTI) said the country cannot afford to exclude itself from the TPP. “FTAs like the TPP are more permanent and predictable. Perhaps, in the short term, we can manage because we have the GSP with the US and a preferential trade treatment with Canada for the North American market,” DTI-Export Marketing Bureau Director Senen M. Perlada said. “But there’s no question that over the long term, we will lose competitiveness in that market if we’re not part of the TPP,” Perlada added.

Asean

BusinessMirror Editor: Max V. de Leon • Thursday, April 14, 2016 A5

www.businessmirror.com.ph

Tourism in Asean is growing fast Asean-EU Perspective

HENRY J. SCHUMACHER

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ORE people are traveling than ever before with just over 1 billion tourists recorded worldwide in 2013. As in 2012, the Asean region again featured as the fastest growing globally, with a 10.8-percent increase in international tourist arrivals, a reflection of buoyant intraregional demand, according to the UN World Travel Organization (UNWTO). The travel sector is helped by growing connectivity in the region which supports to stimulate tourism. The region’s air travel is being progressively integrated and liberalized. More competition in the skies has helped in turn to reduce prices and provide more direct flights between countries and destinations in the countries. As a result, the travel and tourism industry is seen as crucially important for development; tourism in vital for the socioeconomic benefits as it promotes people to people connectivity, one of the key strategies in achieving the Asean community. Industry trends continue to be encouraging; this was confirmed in the just concluded European Union-Philippines Business Network Tourism Advocacy Forum, which had an excellent group of resource speakers from government and the private sector. While the areas that need to be improved were clearly identified, the message was clear that the private sector cannot leave the job to improve the areas alone to government. The battle cry at the end of the exciting forum was that government and the private sector need to sit down regularly to discuss issues and jointly find solutions. What is needed is a public-private partnership within which both sides are committed to contribute to solving the problems confronting the growth of the industry. Data from 2014 illustrates just how important tourism has become. UNWTO statistics reveal that Brunei Darussalam received 225.000 international visitors; Cambodia, 4.2 million; Indonesia, 8.8 million; the Philippines, 4.7 million; Vietnam, 7.6 million; and Thailand, 26.5 million. Thailand, Malaysia and Singapore are recipients of the largest number of visitors in the region. The latter two countries have seen international arrivals numbering around 25 million and 11 million, respectively, for each of the last two years. Income received from international tourism is at an estimated $21 billion for Malaysia in 2013, $18.9 billion for Singapore, $9.3 billion for Indonesia, $7.5 billion for Vietnam, $4.7 billion for the Philippines, $2.7 billion for Cambodia and a huge $42 billion for Thailand. This places Thailand among the top 10 countries in the world for international arrivals, and for earnings from its tourism industry. The accelerating development of the tourism sector is focusing the attention of governments. Member-countries are keen to help tourism by developing a free flow of services and trained personnel. They also want to improve skills by implementing a Mutual Recognition Arrangement (MRA) of qualifications for those working in the hospitality sector. A regional secretariat is being set up in Indonesia to facilitate the introduction of MRA. The move includes setting up an Asean Tourism Qualifications Equivalent Matrix to serve as a key reference for the tourism industry and associated training institutions, as well as an Asean Tourism Professional Registration System. Another priority is to develop a strategic plan for ecotourism. This aims at promoting sustainable economic development through conservation of nature-based tourism in the region. Asean Tourism Ministers also see opportunities to attract more of the booming international cruise business. Cruise tourism is ideal for the Philippines and it is good to note that a number of destinations in the Philippines have been added by international cruise companies. Hundred Islands very recently welcomes a large cruise ship. A central part of the Asean tourism development strategy is also the creation of a single-entry visa to the 10 member-countries.

Singapore to regulate ‘fintech’ firms only when they pose risk

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INGAPORE will start to regulate its financial technology companies only when they grow to a sufficient size to pose risks to the wider financial system, the managing director of the country’s central bank said.

“If you start regulating every one of those, you stifle a lot of innovation, and they don’t get a chance to grow,” Monetary Authority of Singapore (MAS) Head Ravi Menon told reporters on Tuesday during a visit to New York. “So only when they grow and reach a certain critical mass, which then poses a significant impact on the system, or it can affect a large number of consumers, then we step in to regulate. It’s always a fine balance,” Menon said. Singapore is trying to encourage investment in financial technology (Fintech) to boost its role as a regional banking hub. Last

$167M

Investment committed by the Monetary Authority of Singapore for financial-technology projects over five years August the MAS set up a FinTech & Innovation Group to promote the sector, hiring former Citigroup Inc. banker Sopnendu Mohanty to

head the in-house unit. The central bank has also committed to invest S$225 million ($167 million) over five years in fintech projects. Singapore’s three largest banks, DBS Group Holdings Ltd., OverseaChinese Banking Corp. and United Overseas Bank Ltd., have all introduced fintech initiatives. Standard Chartered Plc. is working with DBS on developing distributed ledger technology for trade finance in Singapore, as the lenders seek to make such transactions simpler and more transparent. Even when they get larger, the MAS is unlikely to apply the same level of regulation on fintech firms as it does on its banks, Menon said. He took the example of PayPal Holdings Inc., which provides payment services despite not being a bank. “Do you want to regulate PayPal the way you regulate DBS or Standard Chartered? No, that would be far too onerous, that would kill the business model and they won’t even come here,” Menon said. “Do you

need to regulate them? Yes, because they have a scale,” he added. It’s still too early to quantify how much the fintech industry will generate in economic growth for Singapore, Menon said. The most immediate impact is likely to be on jobs in the traditional banking sector, he said. “It’s a process of creative destruction we’ve seen in every instance of technology advancements, and fintech will be no different,” Menon added. Menon is in New York with Singapore’s Deputy Prime Minister Tharman Shanmugaratnam as part of efforts to promote the island nation as a financial center. “We’ll have to manage some interesting tensions as we go forward,” Shanmugaratnam said in a speech in New York. “It’s hard to say how this is going to play out. It’s hard to say whether the new players will actually disrupt existing financial business in a big way. It hasn’t happened yet, except, perhaps, in China, but I think it’s too early to say.” Bloomberg News

JAKARTA FACE-LIFT

Police officers try to remove residents who staged a sit-in during an eviction at the harbor-front area of Pasar Ikan in Jakarta, Indonesia, on Monday. The eviction was part of Jakarta governor Basuki Tjahaja Purnama’s plan to turn the part of the city, which is a home to a historic mosque and buildings from the Dutch colonial era, into a magnet for tourism. AP

Small-town hero lures China investment without Jakarta red tape

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FTER scouring the coast of Indonesia’s Sulawesi island in 2014 for a place to build a nickel smelter, Amir Jao and his Chinese partners had just about given up when they pulled into the tiny town of Bantaeng. “We were treated like a guest,” said Amir, a shareholder in Huadi Nickel-Alloy Indonesia, a partner of Shanghai Huadi Industrial Co. “The mayor came to us and asked how he could help. As long it was in line with the rules, his attitude was: That’s not a problem.” Thanks to one of the world’s deepest decentralization programs, money and power have spread to Indonesia’s remote provinces, allowing some local officials to get around the country’s record as a tough place to do business. Bantaeng’s leader Nurdin Abdullah, known as the regent, has gained a reputation as one of them.

Changing mind-sets

“BANTAENG is only a small place—if we only did farming, we couldn’t survive,” Abdullah said in an interview at a beach-resort area developed by his government. “I’ve tried to change the mind-set of the people here and

leverage what we have.” Huadi Nickel’s $150-million smelter, with sweeping views of the Sulawesi coastline from its top floor, is now almost complete, along with a jetty to unload the ore from mines in Indonesia and export the concentrate. The success of places like Bantaeng, 1,450 kilometers (900 miles) east of Jakarta, is vital to President Joko Widodo’s economic agenda of cutting red tape, attracting foreign investment and investing in services and infrastructure. While Indonesia’s economy expanded last year at its slowest pace since 2009, Bantaeng’s growth of 9.2 percent was almost twice as fast as the national rate. Key to Bantaeng’s success has been tapping the freedoms given to local authorities after the 1998 downfall of former dictator Suharto —whose administration had seen political, security and financial controls firmly centered in the capital. Responsibility for financing and public services, like health and education, shifted to local governments. This year, more than half of government finances will be allocated directly to regional and district authorities, according to the World Bank.

Seafront reclaimed

THE town, home to most of the district’s 172,000 people, sits between the sea and rolling hills. Visitors are struck by the cleanliness of its streets, with dozens of workers sweeping wide new pavements. On the reclaimed seafront, locals wait for fishermen to return from overnight trips while moms watch over roller-skating children. Abdullah, a 53-year-old who used to run a business exporting wooden altars to Japan, and Jokowi, who used to export furniture, are emblematic of a new brand of Indonesian politicians, who win votes more by their reputation of improving urban services than through the traditional network of political connections. Take Bantaeng’s free ambulance service. It promises to reach any citizen, with any medical complaint, emergency or otherwise, within 20 minutes.

Improved services

ON a recent hot Sunday afternoon, the phone rings at the ambulance station. A girl has collapsed at the market. Moments later, one of four ambulances lined up outside is

The success of places like Bantaeng, 1,450 kilometers (900 miles) east of Jakarta, is vital to President Joko Widodo’s economic agenda of cutting red tape, attracting foreign investment and investing in services and infrastructure.

speeding through the streets, siren wailing. Within 10 minutes, a doctor and paramedic check her airways as worried relatives peer through the open door of the vehicle. A few minutes later, she’s recovering in a clinic back at the station. While far from developed-world standards, the level of paramedic service is impressive for Indonesia. Health officials from 150 other districts have come to the town to see

how it works, said the director of the service, Andi Iksan. The fleet of new ambulances was donated by Toyota Motor Corp., a clue to part of Abdullah’s success. He did a masters and PhD in agriculture in Fukuoka, Japan, in the 1990s. Last year he pitched Indonesia and Bantaeng to a roomful of 300 investors in Tokyo. Also new: a coastal road, an eight-story hospital—the tallest building that’s almost complete— and strawberry farms and orchards on the slopes overlooking the city.

Rising stars

THE introduction of competitive elections in 2005 further improved the push for better governance and public services in some areas, and Abdullah isn’t the only local leader now gaining attention. Tri Rismaharini, the mayor of Surabaya, and Ridwan Kamil, his counterpart in Bandung, oversee Indonesia’s secondand third-largest cities and have gained reputations as reformers, as has Suyoto, head of the Bojonegoro district in East Java. Still, bright spots for investment remain the exception. Corruption is deeply embedded across the country,

which ranked 109th in the World Bank’s 2015 ease-of-doing-business survey, well-below neighbors Malaysia, Thailand and Singapore. Between 2004 and 2015, 17 governors and 49 regents, mayors or their deputies were convicted of graft, according to the country’s anticorruption commission. Michael Buehler, a lecturer in comparative politics at the School of Oriental and African Studies at the University of London, said his research showed little correlation between decentralization and good governance.

Not convinced

“I HAVE yet to see a convincing argument as to how exactly these figures cleaned up their local bureaucracies,” said Buehler, who has visited Bantaeng several times. “An understanding has developed that services can be expected from the state, sure. I don’t think there is much actual change on the ground for ordinary Indonesians.” That’s not the assessment of Bantaeng resident Fauziah, who like many Indonesians uses one name. Bloomberg News

TheBroa

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@MiaRosienna

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HE plot to rob $1 billion from Bangladesh central bank’s accounts at the Federal Reserve Bank of New York (FRBNY) has implicated a Philippine bank and casinos in a story shaping up to be one of the biggest documented cases of money laundering in the country. The case highlights the threat from global hackers mounting cyberattacks and using real bank codes to make orders seem genuine. This case proves that, despite efforts by banks to fortify their defenses against cyber criminals, hackers have also upgraded their skills to breach servers by using both technical expertise and insider contacts in targeted financial institutions. In this case, unknown hackers breached the computer systems of Bangladesh Bank (BB) and transferred $81 million from its account at the FRBNY to the Rizal Commercial Banking Corp. (RCBC). The money ultimately found its way to Philippine casinos.

Secure banking system

HOW this happened is still murky as we go to press. The New York Fed has said its systems were not breached. For its international money transfers, the New York Fed uses the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, a messaging network used by banks and other financial institutions to securely and quickly send money-transfer instructions. Brussels-based SWIFT, a cooperative owned by some 3,000 global financial institutions, securely sends payment instructions between institutions’ accounts using codes. According to its web site, every order should come from the SWIFT system of the member-bank. As compliance, SWIFT will call the member-bank to confirm the payment instruction. On the BB fund heist, SWIFT said in a statement in early March that it is suspected that hackers accessed the SWIFT system in BB to transfer funds from the account with the FRBNY. The $81-million stolen money from BB was first transferred to correspondent banks, as BB does not have an account at RCBC. Dollar remittances to the Philippines have to pass through US correspondent banks. In this case, the money passed through Wells Fargo Mellon Bank, Citibank and Bank of New York. From these banks, the $81 million did not enter directly to the branch of RCBC on Jupiter Street, Makati City, as the money has to pass through the bank’s Settlement Division, which is part of RCBC’s head office. From here, it was credited to RCBC’s branch on Jupiter on February 6. The attackers, who stole the credentials needed to authorize payment transfers, actually asked the FRBNY to make three dozen massive money transfers. Four of these asked that money be transferred to accounts in the Philippines, totaling about $80 million.

DISMISSED Rizal Commercial Banking Corp. Branch Manager Maia Santos-Deguito AP/BULLIT MARQUEZ

CHINESE junket operator Kam Sin Wong AP/BULLIT MARQUEZ

However, a fifth request for $20 million, to be sent to an apparently fictitious Sri Lankan nonprofit group, was flagged as suspicious by a routing bank, because of a typographical error—the criminals misspelled the recipient’s name “Shalika Foundation” as “Shalika Fundation.” Fortunately, the Bangladesh central bank was able to stop that transaction and recover the full amount of $20 million.

The Panama Papers

AS the Senate investigation on the Bangladesh central bank cyber heist continues, money-laundering news refuse to die down. Discussions continue to center on policy loopholes that are costing the financial industry billions of dollars in lost transactions. Recently, the financial world was rocked by one of the biggest leaks in history—the Panama Papers. These consist of 11.5 million files from the database of the world’s fourth-biggest offshore law firm, Mossack Fonseca. The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ, in turn, shared them with a large network of international partners, including BBC and The Guardian. On its web site, the ICIJ said the leaked data cover 38 years of transactions, from 1977 to 2015. The documents reveal the offshore holdings of 140 politicians and public officials from around the world, including current and former world leaders. Major global banks were also mentioned. While the preliminary leak was still partial, the ICIJ vowed to disclose the entire list in mid-May. “It allows a never-before-seen view inside the offshore world—providing a day-to-day, decade-bydecade look at how dark money flows through the global financial system, breeding crime and stripping national treasuries of tax revenues,” the ICIJ said.

How the Philippines got involved

MEANWHILE, pundits say the ongoing Senate investigations on the $81-million cyber heist from the Bangladesh central bank and how the money was coursed through a local bank before it found its way to Philippine casinos will surely give the country a bad reputation. Although Philippine authorities have no clear picture yet of where the stolen money ended up, here’s a timeline of what was made public so far: n May 15, 2015. Four dollar bank accounts were opened under the

SECOND Secretary and Head of Chancery of the Bangladesh Embassy in Manila Probash Lamarong (left), Anti-Money Laundering Council (AMLC) Secretariat Executive Director Julia Bacay-Abad (center) and AMLC Member and Insurance Commissioner Emmanuel F. Dooc open a bag containing US dollars that were returned by Chinese casino junket operator Kam Sin Wong to Bangladesh and Philippine AMLC officials in Manila on March 31. Wong says he has returned $4.63 million of the $81 million that hackers stole from the Bangladesh central bank’s account in the US Federal Reserve Bank and laundered in Manila’s casinos in one of the world’s largest cyber heists. JASON ARLAN RAVAL/BANGKO SENTRAL NG PILIPINAS VIA AP

names of Enrico Teodoro Vasquez, Alfred Santos Vergara, Michael Francisco Cruz and Jessie Christopher Lagrosas in the Jupiter, Makati City, branch of RCBC. With identical initial deposits of $500, the fake accounts remained idle until February 4, 2016. n February 4, 2016. Hackers broke into BB’s account with the FRBNY, ordering 35 transfers worth $951 million, of which $81 million was ordered transferred to RCBC Jupiter branch. The FRBNY did not execute 30 of the 35 transfers due to “lack of details.” The remaining five trans-

fers, worth $101 million, could not be blocked, but $20 million has been salvaged. That’s how $81 million in stolen money found its way to the four fake RCBC bank accounts. According to reports, $6 million was deposited to Cruz’s account, $19.99 million to Vergara, $25 million to Vasquez and the bulk, or $30 million, to Lagrosas. The money was then consolidated and deposited in a dollar account of William So Go of DBA Centurytex Trading. n February 5 to 13. From William So Go’s account, the alleged

stolen money was transferred to money-transfer company PhilRem Services Corp. PhilRem converted into pesos some of the $81 million, and delivered the money in cash tranches to a registered casino junket operator, and to two casino operators. n February 8. BB sent a “stoppayment” order to RCBC. It was not executed, because February 8 is a Chinese New Year nonworking holiday in the Philippines. n February 9. RCBC received a SWIFT code from BB requesting for a refund or putting payment on hold if the funds had been

transferred, or freeze them for proper investigation. Despite the stop-payment order, RCBC Jupiter branch allowed withdrawals from the accounts, amounting to $58.15 million. n February 16. BB Governor Atiur Rahman told Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. that SWIFT code MT103 on February 4, which ordered the inward remittance to the Philippines of $81 million, “is fraudulent.” Rahman then asked Tetangco to help them recover the stolen $81 million from their account with the FRBNY.

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ANSACTIONS oney-laundering activities HEAD of remittance company PhilRem Salud Bautista

AP/BULLIT MARQUEZ

PHILREM Treasurer Michael Bautista

n March 17. On the resumption of the Senate Blue Ribbon Committee probe, RCBC discloses that Go’s signatures in his supposed Jupiter accounts were forged.

Part of loot returned

WONG, meanwhile, through his lawyers, earlier this month returned P38.28 million to the AMLC. AMLC Executive Director Julia Bacay-Abad said P38.28 million in cash arrived at the AMLC office, and was immediately counted with the assistance of the BSP cash department, which confirmed the amount. The funds surrendered represented the funds abandoned by Gao Shu Hua in Eastern Hawaii Leisure Co. Ltd. and/or Midas Casino. The returned funds were the second installment from Wong’s side, following the $4.63 million returned to AMLC also earlier this month. The return of the funds, according to Wong’s legal counsel, is a “token of utmost sincerity and effort to cooperate and retrieve the funds” involved in the current AMLC cases. A third tranche of return is in the offing.

RCBC actions

n February 19. The Anti-Money Laundering Council (AMLC) started its investigation on RCBC and the account holders. n February 23. William So Go said RCBC Jupiter Branch Manager Maia Santos-Deguito asked him to meet her at Fort Bonifacio in Taguig City, which made the businessman “suspicious.” Go said Deguito revealed to him that she opened fictitious dollar and peso bank accounts for Centurytex at RCBC Jupiter without his knowledge. n March 1. The Court of Appeals, acting on AMLC’s request to freeze 44 bank accounts allegedly

involved in the bank heist, started freezing for six months the accounts of Cruz, Lagrosas, Vergara, Vasquez, So Go, Centurytex Trading, Kam Sin Wong and other related accounts. n March 12. Deguito and her husband were off-loaded from a Philippine Airlines Flight 432 to Tokyo on orders of the immigration bureau. n March 15. The Senate Blue Ribbon Committee started its investigation on the BB fund heist. The BB governor resigned, while three of his subordinates were fired.

BANGLADESHI Ambassador to the Philippines John Gomes

AP/BULLIT MARQUEZ

RCBC has announced earlier the termination of the top 2 officials of the bank’s Jupiter branch for falsification of documents and breach of policies in light of the alleged money-laundering involvement. In a statement, RCBC said Deguito and Assistant Manager Angela Torres were relieved of their respective positions for violating bank policies and procedures and falsification of commercial documents. “Other branch and bank officials are expected to be meted out various sanctions, ranging from termination to suspension, in the coming days, when the internal investigation is expected to be completed,” the bank said in a statement. The bank also said Deguito’s and Torres’s breaches facilitated the alleged laundering of $81 million of remittance that is now being investigated by the Senate and other government agencies. RCBC has also vowed to strengthen internal operations, after being muddled in the recent $81-million cross-border heist, with cash allegedly being stolen from Bangladesh finding its way to the Philippine banking system through RCBC. The bank said it has taken “immediate steps” to improve its operational processes. Among these steps include the reduction of its straight-

through-processing threshold amount for both inward and outward remittances. Greater focus is said to be given on unusual transactions, which will be escalated to the group head through separate and “frequent” operation reports. The BSP, aside from participating in the Senate hearings, issued a separate memorandum, ordering banks to take “extra caution” and “vigilance” in their transactions with foreign-exchange dealers, money changers and remittance agents, following the allegations of cross-border money-laundering involvement of one of the local banks. The memorandum issued this month said financial institutions shall perform “enhanced due diligence” upon onboarding and during transaction monitoring as consistent with regulations and the banks’ procedures, as provided under its Money Laundering and Terrorist Financing Prevention Program. The central bank said that when dealing with remittance agents as remittance partners of a tie-up, or if the accounts are being used to facilitate their business, the banks have the “ultimate responsibility” to conduct appropriate due diligence necessary to ensure that they will not be used as a channel for moneylaundering and terrorist-sfinancing activities.

Policy recommendations

WITH this controversial case, the government and private agencies believe it is time to review laws and policies in place to prevent further damage from money laundering. Finance Undersecretary Gil S. Beltran said that, although the local banking system remains strong, there is a clamor to tighten the rules following the incident. Among the more salient laws to be amended include the lifting of the country’s bank-secrecy law. The law on the secrecy of bank deposits states that all deposits of whatever nature with banks or banking institutions in the Philippines, including investments in bonds issued by the government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as absolutely confidential in nature and may not be examined, inquired or looked into by any person, government official, bureau or office. Exceptions are only provided by the law in cases of presentation of written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of

duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation. The BSP governor and the finance secretary, as well as the AMLC executive director, have all expressed views on the amendment of this law. “We have to update the law because when the case reaches the AMLC, it is already in the investigation state, so the incident has already happened. We need some kind of preventive measures. Right now, the prevention of this particular illegal activity is being hampered by the very strict bankdeposit secrecy law,” Tetangco said. “So for us to be able to, let’s say, track the flow of funds, we need an extra authority. Because once the banks go to bank deposit, the trail turns cold, and we cannot look into it from an examination point of view,” he added. The central bank chief also chairs the AMLC. The AMLC’s Abad backed Tetangco’s proposal, but admitted it will be an “uphill battle to lift the bank-secrecy law.” The Department of Finance also said it has long been vocal against the “highly restrictive” provisions protecting money launderers and tax evaders behind the veil of bank secrecy and, thus, supports relaxing it under certain circumstances. “The DOF, likewise, supports the inclusion of casinos and real-estate dealers on the list of covered institutions for transactional reporting. The DOF believes that the power to suspend transactions ought to be granted to the Anti-Money Laundering Council, and the Bangko Sentral ng Pilipinas be given supervisory authority over remittance companies,” the DOF said. “We ought to strengthen the regulatory regimes that govern our money flows. We need a long-term legal remedy by way of an amendment to AMLA [Anti-Money Laundering Act],” it added. The bank-secrecy law was enacted in 1955 to “give encouragement to the people to deposit their money in banking institutions, and to discourage private hoarding so that the same may be properly used by banks in authorized loans to assist in the economic development of the country.” Aside from the notorious banksecrecy law, the AMLC also bared its preparations to propose to Congress amendments to the law to address deficiencies in the anti-money-laundering laws in the country. “Just for now, what we will propose to Congress is to amend the law, primarily to include the casino sector in the coverage of the law. Sec-

AP/BULLIT MARQUEZ

ond, probably, strengthen the supervisory authority of the Bangko Sentral ng Pilipinas over the remittance companies,” Abad said. “Also, include the real-estate brokers and agents in the coverage of the law, because these are the sectors that are vulnerable to money laundering. So these are among the amendments to the law,” she added. In the Senate hearing this week, RCBC Legal and Regulatory Affairs Head Maria Celia F. Estavillo also bared their intended proposals to the law. Estavilla said: “Perhaps, the law should be amended to include some withholding power, for the banks, at least to clarify that these banks have holding power when we receive certain messages,” referring to interbank messages. Looking more closely, the AMLC should be given “more teeth” to curb potential laundering schemes such as these, as they are gaining traction in the local and international scene. A local banking expert, who requested anonymity, said employees of the AMLC must also be given proper attention. “First of all, the safeguards and checks are as good as the people and employees implementing them. In this regard, perhaps, banks will need to crack down on training further,” the expert said. “The sheer volume of remittance agents, pawnshops and money changers makes it very difficult for the BSP to monitor the volume of transactions,” the expert added. As such, implementing the know-your-customer process on each client that passes through the pawnshops and moneychangers of the Philippines remains an arduous task. “With the amounts and volume of funds being sent from abroad, this may be something we need to consider. An AMLA with more teeth, stricter licenses for remittance agents and pawnshops, plus a more definitive jurisdiction for compliance, will help ensure that we are not the haven of money laundering being painted by foreign media,” the expert added. While industry experts believe the local banking industry is still strong and resilient, concerns have been raised with the sector’s reputation, especially in the light of this cross-border bank heist. French Ambassador to the Philippines Thierry Mathou told the BusinessMirror that, while it still has not come to the point of worry, they are “monitoring very closely” the situation in the Philippines, and solutions “have to be done” to plug loopholes.

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briefs

STRIKE AT BRUSSELS AIRPORT CONTINUES

BRUSSELS—Belgian air-traffic controllers continued strike action on Wednesday, forcing the cancellation of flights at Brussels airport as it struggles to get back up to capacity after the March 22 suicide bombings. Belgian flag carrier Brussels Airlines said around 50 of its flights to and from the main international Zaventem airport were canceled. AP

19 KILLED IN PAKISTAN BUS ACCIDENT

MULTAN, Pakistan—A headon collision between a passenger bus and truck killed at least 19 passengers, including women and children, in Pakistan’s eastern Punjab province on Wednesday, a rescue official said. Several people were also injured in the accident near the city of Faisalabad in Punjab province, said the official, Mohammad Naseem. AP

SOUTH KOREANS GO TO POLLS

SEOUL, South Korea—South Koreans on Wednesday voted in a parliamentary election that many predict will hand President Park Geun-hye’s conservative party a decisive win, despite frustrations over a sluggish economy. If the vote allows the ruling Saenuri Party to comfortably regain its majority over a divided opposition, as pollsters predict, it raises expectations the party will take the presidency in 2017. AP

Rights groups urge United States to release files on Indonesia killings

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AKARTA, Indonesia—Rights groups are urging the US to release secret files on Indonesia’s anticommunist massacres of 1965 and 1966, as the Southeast Asian country takes a tentative step toward a reckoning with one of the worst atrocities of the last century.

The push by Human Rights Watch and Indonesian group Kontras comes ahead of a conference in Indonesia next week that will be a rare public discussion of the mass murder of 50 years ago. Human Rights Watch Executive Director Kenneth Roth said on Wednesday the massacres,

orchestrated by the militar y, were “one of the most horrendous crimes of our era.” There is no official figure for the number of people killed but researchers estimate half a million. Within Indonesia, widely accepted accounts of the era gloss over the deaths. The role of the US is

cloaked in secrecy. At the time, the US viewed Indonesia as a bulwark in its efforts to thwart the influence of communist Soviet Union and China in Southeast Asia. “We want to know the working level involvement between the US government and the killers in 1965,” Roth said. “Who knew what and what were the channels of communication? Were there names [of suspected communists] conveyed by the US government to the Indonesian government and what happened to those people.” Indonesia’s human-rights commission last month asked President Barack Obama to declassify files from the Central Intelligence Agency and other agencies that could show how the killings were planned and the degree to which the United States collaborated with Indonesia’s military. The US has said it is reviewing the request. It

AUSTRALIAN PM SAYS RESPECT LEBANON’S RIGHT

CURFEW IMPOSED IN KASHMIR

PROBE PUTS FOCUS ON ISRAEL’S MILITARY COURTS

JERUSALEM—Israel’s military justice system is in the spotlight as it investigates a soldier caught on tape shooting to death a subdued Palestinian attacker. While the military has stressed that its courts are independent, critics say the system has a poor record of punishing errant soldiers, perpetuating a culture of impunity. AP

has previously released documents relating to atrocities in Chile and other countries. The killings began in October 1965 shortly after an apparent abortive coup, in which six right-wing generals were murdered. The late dictator Suharto, an unknown major general at the time, filled the power vacuum and blamed the assassinations on Indonesia’s Communist Party, which was then the largest outside

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BEIJING—A group of Taiwanese, whose deportation from Kenya to Beijing sparked protests from Taiwan’s government, are being investigated by Chinese legal authorities for suspected wire fraud, a Chinese spokesman said on Wednesday. Chinese reports say Kenyan authorities are in the process of sending to Beijing 45 Taiwanese and 32 Chinese who had been detained there in November 2014 and April this year. AP

SRINAGAR, India—Indian authorities on Wednesday imposed a curfew in parts of Kashmir to stop fresh antiIndia demonstrations following the death of three people from Indian army gunfire and a general strike called by separatists in protest. Shops and schools were closed and streets deserted as government forces carrying automatic rifles patrolled the curfew-bound areas of Srinagar, Handwara and neighborhoods. AP

The total number of members of Indonesia’s Communist Party in 1965

Lebanon shocked over sex trafficking of Syrian women

CHINA PROBES TAIWANESE DEPORTATION FROM KENYA

CANBERRA, Australia— Australia respects Lebanon’s right to prosecute an Australian television crew facing charges after being caught up in a mother’s bungled childsnatching attempt in Lebanon, Australia’s prime minister said on Wednesday. An Australian mother, a four-member TV crew from Nine Network, two British agents from the Britainbased Child Abduction Recovery International company and two Lebanese men has been in police custody. AP

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the Soviet Union and China, with some 3 million members. Haris Azhar, a coordinator for advocacy group Kontras, said 1965 and 1966 was “the mother of all violence in Indonesia” and its effects are still felt despite the taboo on open discussion. Millions of descendants of Communist Party members are stigmatized and face legal discrimination that prevents them from holding government jobs. Roth said next week’s two day conference, which is organized by Indonesia’s human-rights commission with the involvement of one of President Joko Widodo’s advisers, is a “very important first step” toward establishing a truth and reconciliation process. But he acknowledged that getting such a process started is likely to face significant resistance from the military and others who benefited from the rise of Suharto. AP

ANEES SHAIKH with his horse Amol. For more than a decade, he has towed a carriage through the heart of the city, whisking tourists and lovers past the landmark hotels and crumbling Art Deco façades of old Mumbai. SHASHANK BENGALI/LOS ANGELES TIMES/TNS

Horse-and-carriage days are numbered in Mumbai M

UMBAI, India—Nothing seems to faze 15-yearold Amol as he marches through the pell-mell streets of Mumbai’s historic district—not the pedestrians darting through traffic as if on a dare, not the car horns constantly blaring behind him, not even a derelict red bus that zooms past him at an intersection, nearly knocking him down. Amol is a horse. For more than a decade, he has towed a carriage through the heart of the city, whisking tourists and lovers past the landmark hotels and crumbling Art Deco façades of old Mumbai. Amol keeps a steady pace in the late afternoon heat amid streams of motorcyclists and taxis. As the carriage driver, Anees Shaikh, unleashes a stream of tobacco spit off to one side, Amol pulls to a stop at a red light next to a bus full of tourists. A woman sitting in the window points her cell-phone camera at Amol and his shiny carriage, encased in aluminum and festooned with artificial flowers, the front molded into the shape of a swan. “Everyone loves to see the carriages,” Shaikh says over the din of car horns, which Mumbai drivers employ even when waiting at a sig-

nal. “Whether or not they go for a ride, the horses make them happy.” The carriages are a quaint, nostalgia-inducing and sometimes maddening presence in the city’s core. Like those near New York’s Central Park, they share the streets with cars, contributing to rushhour jams and occasionally making questionable turns. Yet, for decades, they have been a symbol of Mumbai, immortalized in Bollywood romances and etched in the popular imagination as a relic of British colonial days.

Growing risks

SOON, Amol will lead his last joy ride around historic Mumbai. The city’s high court last year ordered all carriages off the roads by June, citing the growing safety risks to horses and humans. Animalrights groups had argued that the horses were overworked, underfed, suffered bone ailments from plying the tar streets and sometimes sustained injuries in the heavy traffic. Shaikh acknowledges that he has been in accidents. Horses have been struck by cars and the metal carriages have been damaged. Mumbai’s streets are far more chaotic than they were in

the late 19th century, when India’s British rulers brought the first carriages to the city then known as Bombay. The carriages came to be known as Victorias, after the queen. During World War II, Australian soldiers passing through the city would take the reins of the Victorias and race one another through the streets, according to “Taj Mahal Foxtrot,” journalist Naresh Fernandes’s history of the city in the Jazz Age. After India won independence in 1947, the carriages remained, but as the decades passed and the city grew, they were confined to an ever smaller area. The last 100 or so licensed carriages are restricted to a few downtown blocks. Shaikh’s father and grandfather were carriage drivers. As a boy, he tended to the horses at their stables, in the city’s rundown former red-light district, before starting to drive at age 15. He rejects the contention that the animals are treated poorly. Now in his 30s, he is unsure what he will do after the carriages disappear from the roads. “One carriage feeds at least five families,” Shaikh says. “The horses may go to another state and be put to work, but where will we go?” Los Angeles Times/TNS

EIRUT—Back in Syria, the young women were told they would get well-paid jobs at restaurants and hotels in Lebanon. But when they arrived, their belongings and mobile phones were taken away, and the women were locked up in two hotels north of Beirut and forced into prostitution. What followed was an ordeal of beatings, torture and abuse—until Lebanese security forces raided the hotels and dismantled the operation in late March. The discovery of the sex-trafficking ring and the rescue of the women deeply shocked tiny Lebanon, a Mediterranean Arab nation already overwhelmed by the influx of more than a million Syrian refugees who have fled the civil war, and prompted calls for investigation. The case, which involves 75 female victims, is considered the worst sex-trafficking scandal in Lebanon in decades and has raised questions about who might have shielded and enabled such a vast network. When they were found in the Chez Maurice and Silver Hotel in the town of Maamelteine, 20 kilometers north of the Lebanese capital, the women were said to have been in miserable condition. The three-story Chez Maurice looked more like a jail than a hotel when it was recently visited by an Associated Press (AP) crew, with bars on balconies and windows. A whip was seen lying on one of the guard tables. The premises have been sealed off and official documents were stamped on the gates, barring entry. The Syrian women were brought to Lebanon in stages over the past several months. Those who refused to work as prostitutes were repeatedly raped and tortured until they submitted, according to Lebanese women’s rights activists. “Some reported that they were forced to have sex with 20 clients per day,” said Maya al-Ammar, an official with women’s rights group Kafa, which is Arabic for “Enough.” After the women were freed, the Health Ministry sealed a clinic belonging to gynecologist Riad al-Alam, who authorities say was involved in preforming abortions for trafficked Syrian women who got pregnant. Lebanese Health Minister Wael Abu Faour said the doctor “should be in prison where he should rot.” Al-Alam’s license has been revoked by a medical workers’ union. Al-Ammar, the women’s rights activist, said some 200 abortions were carried out at the clinic, though she did not provide the

source for the data. The case of the trafficked Syrians went public after police raided the two hotels and freed the women. Lebanese Police Spokesman Col. Joseph Msalem said several guards, both male and female, were detained, but the two ringleaders remain at large. According to Msalem, police got the first lead on March 25, the Good Friday holiday in Lebanon, when four Syrian women managed to flee from one of the hotels when the guards briefly became lax in monitoring them. They took a minibus to an area in south Beirut, where one of them told the bus driver that she knew some people. On the way, the driver noticed something odd about the women and started asking questions after which they told him their story, Msalem said. The driver called the police and the women were taken to a police station near Beirut. Police then started monitoring the hotels and on March 27 stormed the two buildings, detaining eight guards and setting the women free. After being questioned by police, some women left on their own, while 35 decided to go to women’s shelters where they have been getting psychological treatment, according to Msalem and al-Ammar. Although Lebanon is one of the least conservative countries in the Arab world, prostitution is illegal, and foreigners can be deported for engaging in it. But the implementation of the law has been lax. “Syrian refugee men, women and children in Lebanon are at risk of sex trafficking,” said a US State Department report issued last year. “Syrian girls are brought to Lebanon for prostitution, sometimes through the guise of early marriage.” The AP was not allowed to interview any of the victims, and was told by non-governmental organizations helping the women that they are still in treatment and would prefer not to talk for fear of the ringleaders, who are still at large. Sandy Issa, a Lebanese investigative journalist who was able to interview some of the 75 victims, said their stories were like “something out of a horror movie.” The traffickers exploited personal tragedies back in Syria, such as the death of a parent, promising a victim she would have a “respected job” and a “decent salary,” Issa said. The women recounted how they could not go outside the building, “unless they were getting out for an abortion,” Issa added. “The prostitution was obligatory.” AP

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briefs

FOREIGN MOSQUE FUNDING SOUGHT

BERLIN—Andreas Scheuer, the Christian Social Union’s general secretary, argued in an interview with the daily Die Welt published on Wednesday that “political Islam” undermines efforts to integrate people in Germany. He said financing of mosques or Islamic kindergartens from foreign countries such as Turkey and Saudi Arabia must be stopped, and that “all imams must be trained in Germany and share our fundamental values.” AP

CRUISE EXCLUSION PROTESTED

MIAMI—Some Cuban Americans are complaining that Carnival Corp. is unfairly excluding them from sailing with the company when the cruise line heads to Cuba for the first time in decades. The Adonia will leave Miami and head to Havana on May 1 and will travel every two weeks, with stops in Cienfuegos and Santiago de Cuba. Cuban law forbids Cuban natives from leaving or entering the country by ship, although the island-nation does allow air travel for Cuban-born individuals. AP A MAN rides his bicycle past taxis blocking a main avenue in Buenos Aires, Argentina, on April 12. Hundreds of taxi drivers paralyzed parts of the capital during rush hour to protest Uber launching its service on Tuesday in defiance of local authorities. On Wednesday the ride-hailing app launched a motorbike taxi service in Jakarta, Indonesia. AP

CRUISE LINES SAY CITY MISUSED FEES

Uber launches ride-hailing app in Buenos Aires amid protests

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UEÑOS AIRES, Argentina— Uber launched its service in Argentina’s capital on Tuesday in defiance of local authorities and despite road blocks set up by protesting taxi drivers that snarled traffic during the evening rush hour.

The company said more than 20,000 Uber drivers were now available in Buenos Aires. Uber said it will be successful

because its prices are below tariffs regularly charged by local taxi drivers. It also said thousands of residents of Bueños Aires had

already downloaded the ridesharing app. “I think it’s very good that you can rate the drivers, it’s cheaper than regular taxis and that there’s no extra charges for carrying more luggage,” said Leo Quintela, who signed up for the service and was looking at the app on his smartphone. The Bueños Aires mayor’s office has warned that Uber is not authorized to operate yet, because it doesn’t meet the requirements for transporting passengers. “There’s no way to guarantee the safety of passengers and the quality of the service,” Juan Jose

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The number of Uber drivers now available in Bueños Aires

Mendez, the Buenos Aires transportation secretary, told reporters. He warned that city inspectors might seize cars offering Uber’s service. Local cabbies blocked several streets and avenues in protests throughout Bueños Aires.

Ho l d i n g s i g n s t h at r e a d “Uber=road insecurity,” ‘‘Uber=tax evasion” and “Uber=worsening work conditions,” the taxi drivers said the service puts their livelihood at risk. “Uber is tearing us in half,” said Daniel Capella, who has been a cabbie for 23 years. “They’re totally illegal because they’re trampling on 38,000 taxi drivers who are paying passenger insurance and all the city requirements so we can work legally.” Uber began in 2009 and is now operating in 64 countries. Its drivers have previously faced angry protests in Mexico City, Paris and other cities. AP

China exports Women-only car services fill a niche, but are they legal? post first gain in 9 months

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ONG KONG — Chinese exports have risen for the first time in nine months, in a sign that the outlook may be improving for the world’s No. 2 economy. Customs data posted online on Wednesday show that China’s exports rose 11.5 percent in March compared with a year earlier, to $160.8 billion, after slumping by 25 percent in February. It’s the first year-on-year gain in exports since June. However, the performance also reflects an unusually large contraction in exports in March 2015. “A dramatic turnaround in [year-on-year] growth was always likely,” Marcel Thieliant and Mark Williams of Capital Economics said, also because of the effects of the Lunar New Year holiday, which “extended into early March last year but was confined to February this year.” Chinese economic data in the first months of the year are distorted because many businesses close during the weeklong holiday, which falls at different times in January and February. AP

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OSTON—Ride-hailing companies catering exclusively to women are cropping up and raising thorny legal questions, namely: Are they discriminatory? In Massachusetts, Chariot for Women is promising to launch a service featuring female drivers picking up only women and children. Drivers will even have to say a “safe word” before a ride starts. Michael Pelletz, a former Uber driver, said he started the company with his wife, Kelly, in response to instances of drivers for ridehailing services charged with assaulting female passengers. Pelletz believes his business plan is legal, and he’s prepared to make his case in court, if it comes to that. “We believe that giving women and their loved ones peace of mind is not only a public policy imperative, but serves an essential social interest,” Pelletz said. “Our service is intended to protect these fundamental liberties.” In New York City the owners of SheRides are also promising a reboot this summer. Fer na ndo Mateo, who co founded the company with his wife, Stella, said the company put the brakes on its planned launch in 2014 after spending “tens of

thousands” on legal fees as activists and male drivers threatened to sue. The company settled one challenge, he said. “We were accused of all sorts of things,” Mateo said. “So we went back to the drawing board.” When the company relaunches as SheHails, men will be permitted as drivers and passengers. It will be left to female drivers to accept male passengers, and for female passengers to accept rides from male drivers. While taxis driven by and for women are common in Dubai and India, such businesses would likely run afoul of antidiscrimination laws in the US, industry and legal experts said. Major ride-hailing companies Uber and Lyft don’t give users the option of requesting a driver based on gender. The Taxicab, Limousine & Paratransit Association, a trade group, says companies vary on whether women may request a female taxi driver. “The safety issue is a really big deal,” said Rosabeth Moss Kanter, a professor at the Harvard Business School. “But you just can’t discriminate. You can’t turn people away.” On the employment side, the federal Civil R ights Act bans gender - ba sed h i r i ng , e xce pt

when deemed essential. Courts have inter preted t hat “ bona fide occupational qualification” clause very narrowly, said Elizabeth Brown, a business law professor at Bentley University in Waltham, Massachusetts. Prisons, for example, have been permitted to hire female guards in select situations, but the airline industry was famously ordered to end the practice of hiring only women as flight attendants in a 1971 US Supreme Court ruling. Whether the 1964 civil-rights law applies is also an open question. The US Equal Employment Opportunity Commission, which enforces the law, declined to comment on the legality of women-only ride-hailing services. But spokesman Justine Lisser noted employers whose workers are independent contractors, as is the case with Mateo and Pelletz’s companies, are generally outside the agency’s purview. On the consumer side, Massachusetts and many other states have antigender-discrimination laws governing “public accommodations” like transportation services. But those too, have exceptions. In Massachusetts, for example, women’s-only gyms won

a special legislative carve out in 1998. Michelle Sicard, a Granby, Massachusetts, resident who recently signed up as a Chariot for Women driver, said she isn’t concerned about the legal debate. “I don’t think it’s discriminating against anyone. It’s another way to make women feel safe,” said the 33-year-old postal worker. “I just think people overthink things and everything becomes a battle of the sexes.” But Harry Campbell, an Uber and Lyft driver in Los Angeles who runs The Rideshare Guy, a blog and podcast, fears the idea could be a “slippery slope” to other forms of discrimination. Stronger background checks on drivers and regular monitoring of current ones might be a better approach, he suggested. “There are likely passengers who would feel more comfortable with drivers who are the same race or same ethnicity, so where do we draw the line?” Campbell said. Female ride-hailing users in the Boston area interviewed by The Associated Press had mixed feelings. Ashley Barnett, a 24-year-old from Somerville, said it’s “well intended” but avoids a larger societal problem—people’s attitudes toward women. AP

JUNEAU, Alaska—A life-sized whale statue has landed Juneau in hot water, as a cruise ship association alleges it’s a symbol of the Alaska city’s misuse of millions in fees paid by visitors. The Cruise Lines International Association and its Alaska affiliate filed a lawsuit against the city and borough of Juneau on Tuesday in federal court in Anchorage. They’re challenging the legality of so-called head tax fees paid by cruise passengers who visit Alaska’s picturesque capital. AP

GOVERNOR WANTS PART OF RIGHTS LAW CHANGED

R ALEIGH, North Carolina— Gov. Pat McCrory said on Tuesday he wants to change part of a new law that prevents people from suing over employment discrimination in state court, and he officially extended LGBT employment protections to many state workers. But McCrory’s not interested in changing the rest of the law he signed three weeks ago that prevented local governments and the state from mandating similar protections in the private sector or at stores and restaurants. AP

GROUPS SUE U.S. OVER POLLUTION FROM AIRLINERS

WASHINGTON—A coalition of environmental groups sued US regulators on Tuesday over longsought pollution standards for airliners and cargo planes. The Center for Biological Diversity and Friends of the Earth filed a lawsuit in US District Court in Washington. The groups allege the Environmental Protection Agency has unreasonably delayed for years using the Clean Air Act to enforce limits on heat-trapping greenhouse-gas emissions from aircraft. AP

ORTHO TO DROP CHEMICALS LINKED TO BEE DECLINES

DENVER—Amid ominous warnings about threats to pollinators and the food crops they make possible, garden-care giant Ortho said on Tuesday it will stop using a class of chemicals widely believed to harm the most important pollinators of all: bees. Bees are critical to the food supply, because about one-third of the human diet comes from insectpollinated plants and honeybees are responsible for 80 percent of that pollination. AP

A10 Thursday, April 14, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Panama Papers spawn transparency campaigns

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HE controversial Panama Papers have opened a global Pandora’s box and exposed a long-held secret: How the world’s rich and powerful have dodged paying taxes. So far, the exposé forced a prime minister to step down. Iceland’s embattled prime minister, Sigmundur Davíð Gunnlaugsson, became the first major casualty because of mounting public outrage, after revelations showing his family had sheltered money offshore.

According to World News, the Panama Papers are an unprecedented leak of 11.5 million files from the database of the world’s fourth-biggest offshore law firm, Mossack Fonseca. The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ, in turn, shared them with a large network of international partners, including BBC and The Guardian. The documents show myriad ways for the rich to exploit offshore tax havens. Mossack Fonseca data relate to more than 200,000 companies for which the law firm acted as agent. Often used lawfully to anonymously hold property and bank accounts, these companies were registered in a range of tax havens. However, Panama is not the most popular location for its clients. Most of them preferred the British Virgin Islands, where more than 100,000 companies were registered. It is perfectly legal to use offshore structures, like what Panama offers. There are many legitimate reasons why people do so. For example, businesspeople in certain countries put their assets offshore to avoid criminals, and to get around hard-currency restrictions. Others use offshore for reasons of inheritance and estate planning. Unfortunately, corrupt government officials, criminals and money launderers also take advantage of anonymous company structures. With the extent of potential tax losses the Panama Papers unveiled, governments are trying to fight back. The British government, for example, has launched a transparency drive. It plans to set up a central register, that will reveal the beneficial owners of offshore companies. Starting in June this year, United Kingdom companies will have to reveal their “significant” owners for the first time. Thanks to the Panama Papers, a transparency drive has started to snowball in Europe. Under proposals announced by European Union (EU) regulators, multinational companies will soon be forced to disclose profits earned and taxes paid in Europe and the world’s shadiest fiscal havens. The European Commission will require all large companies to publish a country-by-country breakdown of profits, taxes, employees and turnover in all 28 member-states of the EU, as well as some of the most problematic tax havens. Asian companies with subsidiaries in Europe would also be subject to the transparency drive, as the rules would apply to all global corporations with a large presence in Europe. This is a precedent the Philippines would do well to follow. Like those in Europe, multinational corporations operating in the country could resort to an offshore strategy to shield their income from the Bureau of Internal Revenue. The same goes for the elite and powerful. There’s a general consent that some wealthy people had been using offshore banks to shield their income from taxes.

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After the election John Mangun

OUTSIDE THE BOX

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HE person that Filipinos should select as the next president of the country is clear and simple. Any of the presidential hopefuls will either take the nation to a previously unfound level of paradise or plunge the country into the seventh circle of hell. It all depends on whether you are listening to a supporter or a detractor of a particular candidate. All presidential and parliamentary elections are exciting. They arrive with anticipation like the Christmas holiday. Everyone captures the “spirit” of the campaign season, and is looking forward to getting the particular “gift” on election day. And like waiting for Christmas morning to come, there is always an apprehension that you might be disappointed with the results on the big day. In participatory democracies, there is also the feeling that even

an individual person has some say in what the future of the country will be and what direction the nation will take in the future. No matter the perceived performance of the previous administration, there is the hope that things will get better, even in the event your candidate does not make the cut. The reality is, a new president does very little in the beginning to change the course of a country’s economy. Policies take time to develop and implement. The

economy is like a large ship that takes time to change course. What people and businesses look for during the campaign is a commitment that the economic positives will continue and be enhanced. The economic negatives will be improved and changed. A leader who wants to initially succeed will immediately repeat the campaign promises and outline specifics on how to achieve them. The economy wants a smooth transition of power and the potentially bright outlook for the future that the winning candidate expressed before the election. Realistically, it is hard to disappoint the people after the election, unless the new leader turns negative, as has happened far too often in the past. We have heard commentators talk about the past performance of the Philippine economy and particularly the stock market, in the wake of a presidential election. Discussing the raw data means little, unless put in context. Is any good or bad that happens in the months after the election just coincidental or attrib-

The real reason women still get paid less

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B C R. S | Bloomberg View

HEN it comes to discrimination, Americans pride ourselves on how far we’ve come. Racial segregation is history. Explicit sex discrimination is banned. Same-sex marriage is the law of the land. But amid all the progress, the malefemale wage gap persists, and it’s big. A new essay by Cornell economists Francine Blau and Lawrence Kahn offers by far the most comprehensive and illuminating discussion to date of that gap. They find that for every dollar earned by a man working full time, women working full time earn about 79 cents. More alarming, the gap hasn’t closed much since 1990. Sex discrimination is probably a big part of the explanation. It’s true that things were a lot worse in 1980, when women earned about 62 percent as much as men. By 1989, women were earning about 74 percent as much, cutting the gap by nearly one-third. But since then, progress has been slow. Interestingly, the gap is now highest at the top of the income distribution, suggesting the possibility of a glass ceiling. Blau and Kahn do find some good news. Women have reversed men’s longstanding educational advantage. They now have higher average levels of schooling than men, and are more likely to have advanced degrees.

Women have also come close to obliterating the experience gap. In 1981, men had almost seven years more full-time experience in the labor market than women. Right now, the gap is around 1.4 years. Here again, much of the improvement for women occurred in the 1980s. Blau and Kahn find that gains in education and experience account for the lion’s share of the post-1980 reduction in the wage gap. In 1981 men had a strong majority of managerial jobs; now men and women are nearly equal on that count. Why, then, does the gap persist, and why is it so big? The difference in experience levels, while vastly reduced, continues to be a contributing factor. And because women are more likely to leave work to care for children, men also benefit from a significantly lower rate of work force interruptions. But more important are the areas in which women work. The occupations and industries historically dominated by women (such as

administrative support and service jobs) pay less than the occupations and industries historically dominated by men (such as managerial and professional jobs and high-wage craft positions). While women are increasingly entering traditionally male jobs, occupational segregation remains substantial. According to Blau and Kahn, occupation and industry differences now account for 51 percent of the remaining male-female pay gap. Which brings us to the question of sex discrimination, pure and simple. Controlling for everything else, Blau and Kahn find a big chunk of the gap comes from “unexplained factors”—that is, factors that do not amount to measurable differences between men and women (such as work experience). There’s good reason to think that sex discrimination is among those “unexplained factors.” (It might not be all of it; for example, men might have productivity advantages that the data cannot capture.) Studies of law-school graduates find that controlling for a wide range of variables, men earn 11 percent more than women; a similar study of business school graduates finds a gender gap of 7 percent. As Blau and Kahn note, discrimination is a complicated matter, and it takes multiple forms. Employ-

utable to the new president? Let’s take a break for a commercial message. At the end of the month I will be speaking at the 2016 Money Summit on “After the Elections: Where Are The Profits?” Now back to our scheduled program. It is impossible to read the mind of the new president and the government advisors who will be appointed. But what we can do is to realistically present what the upcoming external and domestic developments might be and how a new administration might react, in part, simply because it is the new leadership. Then we might be able to draw some reasonable conclusions on how the stock market could react. But don’t worry; be happy…the nation’s economy still depends on you regardless of who will sit in Malacañang. 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.

ers might be consciously biased; they might just prefer men (maybe because they think their customers do). Or employers might have implicit or unconscious biases: Formally committed to sex equality, and not intending to discriminate, they might nonetheless favor men over women when it comes to setting salaries. A lot of employers act on the basis of stereotypes, which may or may not be accurate. For example, they might think that women are especially likely to leave the work force if they have children, and their decisions about women’s wages might reflect that belief. Research strongly suggests that women are penalized for being mothers. (Men are not penalized for being fathers.) For those who want their daughters to have the same opportunities as their sons, the new research has two implications. The first involves the continuing importance of women’s education and work experience, which have been the main drivers of the post-1980s reduction in the wage gap. The second is the urgent need for creative reforms, from both the private and public sector, to address the role of “unexplained factors”— discrimination above all else—in accounting for the remarkably slow progress since 1990.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Thursday, April 14, 2016 A11

Rebels in the war on drugs The Lord’s flock, His people

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B J H | TNS Forum

NCE a decade, the United Nations organizes a meeting where every country in the world comes together to figure out what to do about drugs—and up to now, they’ve always pledged to wage a relentless war, to fight until the planet is “drugfree.” They’ve consistently affirmed UN treaties written in the 1960s and 1970s, mainly by the United States, which require every country to arrest and imprison their way out of drug-related problems. But at this year’s meeting in New York City later this month, several countries are going to declare: This approach has been a disaster. We can’t do this anymore. Enough. The drug war is now the subject of a raucous debate within the US— and if you look at the stories of three influential people who will speak on behalf of their countries for change at the UN, they might sound strangely familiar. The reasons US citizens are rejecting the war on drugs are, it turns out, also the reasons it is being rejected all over the world, from the Caribbean to Europe to South America. In August 2014 the justice minister for Jamaica, Mark Golding, had to make a phone call no government official ever wants to make. He had to explain to a mother that her son was dead. Mario Deane was picked up on the street because he was smoking a spliff, put into custody and beaten to death. It was, for Golding, a moment that made him realize he could no longer support his country’s drug laws. All over the world, the criminalization of cannabis has been used as an excuse to harass unpopular minorities (in Jamaica’s case, the poor), and, he told me, it has “worsened the relationship between those young men and law enforcement.” So he persuaded the Cabinet to decriminalize cannabis for personal possession. “We wanted to take ganja out of the picture,” he says, “as a medium through which the police would use hard or heavy policing against younger men.” Existing UN drug treaties allow decriminalization of drugs in small amounts for personal use. But they don’t allow countries to create regulated structures for buying and selling drugs, which would drive the drug-dealing gangs out of business. Jamaica is, therefore, still required to wage a futile war on people who sell cannabis, and farmers who grow it, meaning there is still an armed conflict between police and the young men whom they accuse of dealing. “A country should be in a position to design its own regime,” Golding will argue at the UN. “The eradication of drugs hasn’t happened, despite decades of war waged on it.” It is, he believes, unjust: “Why is it that people can buy a bottle of rum or a bottle of wine…but you can’t do that for cannabis?” In the Czech Republic the official responsible for drug policy is Jindrich Voboril. As a teenager on the streets of communist-controlled Czechoslovakia, Voboril was guzzling opiates and amphetamines and was, he told me, a “hardcore experimenter” with almost any substance he could find. “I was growing up on the streets, so I was a typical street kid,” he says. He was trying to escape an abusive home life where his father was an alcoholic, and a public life dominated by communist tyranny. “I was on the path of developing a serious drug problem,” he says, and before long, he was watching his friends die of overdoses or suicides. One thing that pulled Voboril away from addiction was his discovery of the democratic resistance. When he became an activist in the Czech underground, he felt a new sense of meaning and purpose, and it saved him. Soon after the dictatorship fell, he set up the first major drug-treatment program in the Czech Republic. He wanted to create practical policies that would help addicts find purpose and save people like his friends—only to find compassionate policies were discouraged, or outright banned, by the global drug war, which is built instead on punishment. The drug war, it seemed to him, was based on ideology, not

The drug war is now the subject of a raucous debate within the US—and if you look at the stories of three influential people who will speak on behalf of their countries for change at the UN, they might sound strangely familiar. The reasons US citizens are rejecting the war on drugs are, it turns out, also the reasons it is being rejected all over the world, from the Caribbean to Europe to South America. results, just like the communist system he had fought successfully to overthrow. If you put pledges for a “drug-free world” in a different font, he says, it could be a Stalinist slogan. He believes that in the real world, addicts are mostly people with mental health problems, like depression, or people trapped in terrible environments. Punishing them only makes the problem worse. Accordingly, he wants to see a global transfer of resources — from punishing addicts to helping them turn their lives around. Such alternatives work. In the 15 years since Portugal decided to decriminalize drug use and invest instead in treatment and prevention services, use of injected drugs has fallen by 50 percent. Since Switzerland legalized heroin for addicts more than a decade ago, nobody has died of an overdose on legal heroin. A key figure in shaping Colombia’s strategy at the upcoming UN conference is Maricio Rodriguez, an economist and diplomat. The drug war, he told me in Cartagena, is “the worst tragedy we have ever lived in, in Colombia and probably all of Latin America.” The combined death toll from the Latin American drug war exceeds even the war in Syria. “Every day that goes by is a day in which we are losing hundreds of people and we are losing hundreds of millions of dollars,” he explains. Like most Colombians, he has relatives who were murdered when narco-traffickers were taking over the country. “Everybody has a story,” he says. To explain why this carnage is happening, Rodriguez cited the late Nobel Prize-winning US economist Milton Friedman, who grew up in Chicago under alcohol prohibition, and learned there what happens if you ban a popular substance. It doesn’t matter whether the government targets whiskey or cocaine; a ban forces legal businesses out of the market—and armed criminal gangs take it over. They then go to war to control the trade. But once the prohibition ends, so does the violence. (Ask yourself: Where are the violent alcohol dealers today?) Ranged against reform-minded countries at the UN conference will be governments that want to maintain or even intensify the global war, including Russia, Cuba, Saudi Arabia and China. Although the US has historically been the most hardline country, this time, its representatives will arrive at the conference in breach of UN drug treaties. The drug laws require a war on cannabis, but four US states and the District of Columbia have now fully legalized the drug. Nobody knows what the result of this UN meeting will be, but nobody will ever be able to say again that the world is united behind the idea of a drug war. Voboril, the Czech Republic’s street user turned government minister, told me he is itching to tell the UN a simple truth: “This is reality: This is hundreds of thousands of people dying…for one simple reason — some governments just don’t want to change. Nothing else.”

Msgr. Sabino A. Vengco Jr.

ALÁLAONG BAGÁ

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HE Lord tends His flock, the people He made; His lovingkindness endures forever (Psalm 100:1-2, 3, 5). Jesus said my sheep follow me; I give them eternal life, and no one can take them out of my hand (John 10:27-30).

We are His people, His flock A HYMN of praise inviting the world to worship God, this responsorial psalm (100) in the few selected verses begins with a universal call to all the lands, but it is to the Lord, the God of Israel, that the praise is to be directed. The three imperatives (“serve,” “come before,” and “know”) basically say the same thing—to worship. It means like servants ready to do the particular service of worship, to enter into the presence of the Lord in the sacred precincts in order to offer praise and thanksgiving in the assembly, because we know and acknowledge God’s wonderful works. We profess that the Lord God is there for us all.

Two major characterizations of God are used, God as Creator and shepherd. He is the almighty, sovereign Creator, who conquered the primordial forces of chaos; He made us, and we belong to Him. He is the shepherd whose provident care is the reason for the well-being of the flock; He looks after us, and we owe allegiance to Him, not just to some human potentate. The selection ends with three attributes of God in the perspective of the covenant between Him and His people: God is good—union with Him is beneficial and favorable to the people; God is lovingly kind (hesed)— from His fundamental goodness, He is merciful and provident; God

Only five years to collect Atty. Irwin C. Nidea Jr.

TAX LAW FOR BUSINESS

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HERE are two important prescriptive periods in the Tax Code that taxpayers must be aware of, i.e., the three-year period to assess and the five-year period to collect by the Bureau of Internal Revenue (BIR). Unfortunately, the five-year prescriptive period to collect, is less used and less understood by many. Internal revenue taxes must generally be assessed within three years counted from the period fixed by law for the filing of the tax return or the actual date of filing, whichever is later. With regard to collection of taxes, the BIR has only five years following the assessment to enforce collection. Since tax is the lifeblood of the country, the Tax Code provides that no court shall have the authority to stop or to restrain the collection of any national internal revenue tax. Only the Court of Tax Appeals (CTA) may issue an order for the suspension of collection of tax only upon payment by the taxpayer of a bond

that is double the amount that is being assessed. Once a Final Assessment Notice (FAN) has been issued, the five-year period to collect starts to run (CTA EB Case 1204, April 16, 2014). There is no court that will prevent the BIR from enforcing collection, except the CTA. The question arises when a case is elevated to the CTA and there is no order for suspension of collection of tax, as well as payment by the taxpayer of a bond that is double the amount. Does the five-year prescriptive period to collect still run? The Supreme Court (SC) in Protector Services Inc. v Court of Appeals GR

is faithful—He is dependable in His commitments and promises. And His kindness endures forever, while His faithfulness is in perpetuity from generation to generation. Truly, we, as His people, should praise and worship the Lord who is our Creator and shepherd, and who is good, merciful and faithful.

Jesus our shepherd

JESUS, as the Good Shepherd, is characterized by His intimate relationship with His flock. His sheep are those who hear His voice, recognize Him and follow Him. Sheep know the sound or the voice of the one who cares for them and they trustingly follow it, and correspondingly the shepherd knows too and recognizes His sheep. Constantly together, they are acquainted with each other and have trust in each other. Between Jesus and His followers, intimate knowledge is presupposed and mutual trust is required. Jesus boldly promises His sheep that He will give them eternal life. He can lay down His life and take it up again (John 10:17); He has power over death. That is why, if His sheep hear and heed His voice, “they shall never perish.” He also promises

118176, April 12, 2000, cited in CTA Case 8507, ruled that the filing of action before the courts validly suspended the running of the prescriptive period to collect taxes because it, in effect, prohibits the tax authorities from collecting taxes. There appears to be a contradiction on this pronouncement by the SC that the filing of action before the courts suspends the running of the prescriptive period because the Tax Code is categorical in saying that no court can restrain the collection of tax. If no court issues a suspension order, there is nothing that prohibits the tax authorities from enforcing the same. Taxpayers must also be aware that upon issuance of the FAN, a taxpayer is entitled to file a protest letter to question the FAN. If the tax authorities do not agree with the protest, then a Final Decision on Disputed Assessment (FDDA) will be issued, where the taxpayer has the right to elevate the case to the CTA. But taxpayers must be aware that if the BIR does not issue an FDDA five years from the issuance of the FAN, the BIR’s right to collect is lost. (CTA Case EB 1204, April 16, 2016) In other words, once a FAN is

Clinton is caught in fracking trap B P D Bloomberg View

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RACTIVISTS—the environmentalists who oppose hydraulic fracturing to produce natural gas—mean to make trouble for Hillary Clinton in the coming New York and Pennsylvania primaries. New York, which votes on April 19, bans the practice for fear it could contaminate drinking water. Pennsylvania, which votes on April 26, allows fracking; it has created tens of thousands of jobs and revitalized the state’s economy. Clinton, as on many other issues, is no absolutist when it comes to staking out a position. She favors the New York ban, while calling for strict regulation of the practice in Pennsylvania and other states that allow it. The fractivists think she’s just trying to have it both ways. They’re pushing her to condemn fracking, as Bernie Sanders vocally does, and to oppose the construction of pipelines that carry the gas, too. “Bernie Sanders is the only candidate for president who opposes fracking everywhere,” the actress Susan Sarandon narrates in a new ad released by the Vermont senator’s campaign. Such a position might placate New York Democrats, but alienate voters in Pennsylvania, which could be a swing state in the general election. The shale-gas boom there, while in retreat because of the collapse in oil

prices, created about 60,000 jobs in the state from 2007 to 2014. One study estimates that per-capita income increased from 12 percent to 19 percent in counties with wells, versus only 8 percent in counties without them. A fracking ban and pipeline moratorium could hurt consumers nationwide as well as Pennsylvanians. The majority of U.S. households use natural gas for heating, air conditioning or cooking. In the last decade, fracking has resulted in a 40 percent increase in gas production and a 70 percent decrease in prices. The environmental case against fracking isn’t black and white, by any means. Opponents say the technique is polluting drinking water and increasing carbon emissions through leakage of methane gas into the air. The process typically involves injecting into a cement-encased well more than a million gallons of water, sand and chemicals, some of which are carcinogenic, at high pressure to pulverize shale rock and thus release natural gas. A five-year Environmental Protection Agency (EPA) study, released in June, revealed specific cases of drinking-water contamination from fracking. But the report concludes that they “have not led to widespread, systemic impacts to drinking water resources.” The number of contamination cases, the EPA also said, is small relative to the number

of wells. From 2011 to 2014, fracking occurred at about 30,000 new sites annually. The biggest problem seems to occur when the liquid from fracking spills above ground—from trucks carrying away waste or from equipment failure at the well. The EPA estimated that such spills occurred from 0.4 to 12.2 times per 100 wells. Of 151 chemical spills the agency examined, 13 reached the surface water, 97 were detected in the soil, and none reached groundwater (though monitoring continues). The EPA report didn’t address leaks of methane, a potent greenhouse gas, into the air. But last month the agency began the process of proposing rules to reduce methane emissions as part of President Barack Obama’s climate action plan. All of this suggests that Clinton’s approach is the right one: Yes, fracking potentially can harm public health, but with the right regulations and state and federal oversight, it’s possible to reduce the risks—without forbidding the technique altogether. The anti-fracking movement, however, insists that Clinton commit to a ban, promise to end fossil-fuel extraction on public lands and oppose construction of pipelines. Specifically, they want her to help derail the 124-mile Constitution Pipeline to carry gas from the Marcellus Shale fields of Pennsylvania to New York and New England. If the drillers can’t

them that He will not allow anyone to take them away from Him. There are always those who are intent in snatching sheep away from the flock and from the shepherd. His sheep have been given to Him by God, and no one can take them out of His hand away from Him, just as no one can take them away from God out of the Father’s hand. The Father and the Son are identical in their love and care for the sheep. Jesus Christ the Good Shepherd is one with God. Alálaong bagá, the presence of the risen Lord in His communities means His unfailing protection and care for his flock as their shepherd. He is who is there for them in all their needs and struggles, and who will lead them at the end to eternal life. Heeding the voice of the shepherd on the part of the sheep means faithfully following Him and identifying with Him and imitating Him. To be in the hand of Jesus is to be in the hand of God our Father, for Jesus is for us the sacrament of the Father’s love and mercy. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.

issued, the five-year period to collect starts to run. The mere filing of a case in court does not prohibit the tax authorities from enforcing collection because no court can enjoin the collection of tax. There must be a suspension order and it must come from the CTA. But this view seems to be contrary to the above pronouncement of the SC, where it held that a mere filing of a case in court by a taxpayer suspends the running of the period to collect by the BIR. Because it is less understood and less discussed by jurisprudence, the defense of late collection must be further explored, so that any confusion will be clarified and conflicting provisions of law will be reconciled. Atty. Irwin C. Nidea Jr. is a partner of DuBaladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at irwin.c.nideajr@bdblaw.com.ph.

sell the gas out of state, they won’t drill more wells, the theory goes. Clinton prefers not to ban fracking or block new pipelines, and instead sees natural gas, which emits half the carbon dioxide of coal, as a bridge to a renewable-energy future. To her, shale gas is the lesser of evils, especially compared with coal. For nearly six months last year, she avoided taking a position on the Keystone XL Pipeline, which would have carried Canada’s tar-sands oil to the US Gulf Coast. In September she announced her opposition— six weeks before President Barack Obama rejected the project. She may be straddling these issues, but her views are in line with those of Americans broadly, whose appreciation of fracking seems to rise and fall with oil prices. A March 2-6 Gallup poll found that 51 percent of Americans oppose it, up from 40 percent a year ago. Lower oil prices may have a lot to do with the loss of support. After all, why fracture the earth and take the chance of polluting the air and water if the country is brimming with cheap energy? But state fracking bans would reduce shale-gas supply and push up fossil-fuel prices, to the detriment of lower-income households, and possibly increase the use of coal. Energy companies that shut wells or delayed drilling new ones would resume production if prices rose high enough to justify the cost.