301 PINOY ATHLETES TEST THEIR WILL AT UNDER ARMOUR TILT
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ith a platform where determination shines and dynamism is appraised in leaps and bounds, 301 Filipinos answered the challenge and participated in the Manila leg of Under Armour’s Test of Will at Bonifacio High Street in Taguig City on April 16 and 17. The test of Will is Under Armour’s inaugural Southeast Asia-wide fitness challenge that will be held in countries like the Philippines, Singapore, Malaysia and Thailand. Pinoys from all walks of life were one with the most innovative sports apparel today in celebrating human performance, functional See “Athletes,” A12
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Wednesday, April 20, 2016 Vol. 11 No. 193
I.L.P. AVERTS BROWNOUTS, BUT GENERATION CHARGE TO RISE
Expect higher electricity rates as demand peaks By Lenie Lectura
D
@llectura
espite the record-high power demand being experienced these days due mainly to the rising heat index, rotating brownouts may still be avoided in the areas being served by the Manila Electric Co. (Meralco) with the Interruptible Load Program (ILP) in play. But not higher electricity rates.
INSIDE
Ethiopian sweep
9,400 MW
P25.00 nationwide | 5 sections 32 pages | 7 days a week
BMReports The truth about election spending
“There is a science to vote-buying. You have to buy early, weeks before election day. And you must befriend them, establish a closeness, even before that. They trust you, you trust them. The going rate at the moment for a vote in our city is P350.”
Initial peak-demand forecast for the Luzon grid this year that was already exceeded last Friday The escalated demand for electricity, amid the prevailing thin power reserves in the Luzon grid, as what was experienced last Friday, will likely result in higher power rates next month, at least for Meralco customers. See “Electricity rates,” A2
A shirtless man rides his bicycle on a street in Baseco, Tondo, Manila, where campaign posters of different candidates running for national and local positions are glued on a gate. Candidates are said to give as much as P350 to buy votes in the city. NONIE REYES
Sports
By Psyche Roxas-Mendoza C1
FILINVEST NET INCOME SURGES TO P7 BILLION BusinessMirror
E1 Wednesday, April 20, 2016
CONSULAR MEET An aerial shot of the Department of Foreign Affairs building, where officials announced that Manila successfully hosted a high-level contingent of Indonesian officials for the first Philippines-Indonesia Consular Consultation Meeting.
T
HE Filinvest Development Corp. (FDC) reported consolidated net income of P7 billion for full-year 2015, 13 percent higher than in 2014.
folio of office buildings. Year-end 2015 saw an increase of 33 percent in gross leasable area of its office rental portfolio. These new buildings are expected to contribute to revenues in 2016. Revenues from real-estate development grew by a steady 6 percent as the group continued to launch horizontal, midrise and high-rise projects. FAI, the developer of the 244-hectare Filinvest City, generated P1.9 billion in revenues. FAI realized record prices in 2015, which reached more than P200,000 per square meter. Banking subsidiary EastWest Bank ended 2015 with net income of P2 billion. It continued to post a healthy 23-percent growth in its core revenues (net revenues extrading) driven mainly by net interest income. This was the result of the expansion of its loan portfolio. Consumer loans, which account for 58 percent of total customer loans, grew 38 percent to P90.8 billion, led by auto loans and personal loans. Corporate loans grew 18 percent to P66.4 billion. The bank has been ramping up investments to grow its branchstore network, ending 2015 with 433 stores and 579 automated teller machines. “Even as we expect to realize the impact of these investments, we continue to focus on delivering products and services
By Mary Grace Padin
T
Filinvest City
that will complement our existing lineup, starting with bancassurance products through our newly formed joint venture with Ageas,” FDC Chairman Jonathan Gotianun said. EastWest’s joint venture with the Belgium-based Ageas Insurance
NV, EastWest Ageas Life, will begin selling life-insurance products at EastWest branch stores this quarter. Revenues from the sugar group grew by 5 percent, while revenues from the hotel group grew by 16 percent. The group is
Twin Oaks pioneers the future-ready lifestyle
poised to launch its newest hotel later this year, Crimson Resort and Spa in Boracay. “We have much to look forward to in 2016, as we expand the FDC portfolio with our investments in the power sector,” enthused Jose-
phine Gotianun-Yap, FDC president and CEO. “This year we are looking forward to commissioning the group’s 405 megawatt coal-fired power plant in Misamis Oriental and providing much-needed electricity to the Mindanao grid.”
The growing green community
I
N these fast-paced times, living in cities has become more ideal to give the finest conveniences that many professionals and families seek today. Imagine living in an ideal city—accessible, progressive and with wide open spaces filled with nature to boost peoples’ wellness. This preeminent version of a city actually exists at the heart of the new Mandaluyong Central Business District. The Greenfield District by real-estate giant Greenfield Development Corp. is a green city that, on one hand, is ready for the future and, on the other, remains as fresh as the past. As a legacy meant to be handed down to future generations, the 12.8-hectare master-planned development is a well-planned city—especially designed to become a business, residential and leisure capital in its own right. In fact, as an expansion that also signals its continuous progress, the district will soon open a businessprocess outsourcing office building along Mayflower Street. The said building will be part of the development’s office sector which has always been an integral part of its master plan. Lying at the heart of these perks and features is the Central Park which is a huge pocket of green for outdoor recreation. Families and friends decompress at the weekend food markets and are entertained at the same time by live bands and various events that usually keep the nights alive.
Twin Oaks Place offers future-ready homes
MODERN conveniences and the best of leisure are only some of the lifestyle benefits one can have as a resident of the Greenfield District. The Twin Oaks Place, dubbed as the Philippines’s first future-ready home, makes some of the digital age’s perceived lifestyle possibilities a reality. The condominium development pioneers a smart and connected living in this minicity. Every one of its units is embedded with a state-of-the-art fiber-to-the-home (FTTH) technology that lets residents benefit from unparalleled, high-speed internet connectivity. This enhances daily living and—because the whole Greenfield District is built with fiber optics—easily connects Filipino families and friends at the community to the rest of the world. Furthermore, the built-in fiber optic framework provides option for homeowner’s remote-control access to gadgets, appliances and security features in the unit with just a click on their tablet or smart phone. At the Twin Oaks Place, life inside the building is as dynamic as on the outside. The twin towers of the enclave each comes with their own three floors of various commercial and retail stores, while two floors are dedicated for amenities which include a swimming pool for adults with an adjoining pool for kids, a spacious fitness gym, function rooms for both grand and intimate gatherings and landscaped gardens. The first tower of the development has 38 floors of residential units that come in studio, one-bedroom flat, one-bedroom loft and two-bedroom loft units. The second tower, which is currently on the sixth floor of construction, will feature more options on flat units in studio, one-bedroom and two-bedroom configurations.
I
NTEGRATING cool vibe in the sizzling summer heat, Litton & Co. opened the sixth installment of the Mandala Weekend Market at the Mandala Park recently, showcasing once more well-curated merchants to showcase locally sourced and crafted produce, and provided a platform for holistic wellness in the middle of Metro Manila’s hustle and bustle.
Family fun with homegrown treats
IN the spirit of promoting an active lifestyle, Mandala Park invited William Cabelin to host special Zumba classes for the kids. The mini pop-up event immediately attracted kid visitors as it offered them a fun way to get rid of all that extra energy in an exciting and healthy way. Some parents even joined in on the cardio fun, while others relaxed with the market’s usual list of merchants. Ever-present at the Mandala Park weekend market were wellloved merchants: Ribs Manila, with its fall-off-the-bone smoked ribs; Stanford & Shaw, with its refreshingly zesty ginger ale; and Fog City Creamery, with its homemade ice cream. The weekend market’s list was filled with merchants who practiced sustainability, majority of them choosing to source their ingredients around the Philippines rather than having them shipped from abroad—from Bio
Reis’s organically grown rice grains and Project Hearth’s allnatural jams and broths, to THC Chip’s homemade crisps made from different root crops. Locally based but internationally inspired restaurateurs also showcased their tasty goodies along with the locals. Gostoso Piri Piri, Babci Kuchnia, Cocina Peruvia, Mister Delicious, Wrapped, Yen Yen Taiwan Noodle Cart, Ziazan Mediterranean Mezze, Bao Fusion Concepts and Eats Meets West delighted visitors with their mouth-watering fusion treats. Retailer Yakang-Yaka Barter was present to give visitors a chance to shop for unique clothing and home decorating choices, while supporting indigenous communities around the country through the promotion of their artistry and craftsmanship.
Supporting the growing green community
THE 3.2-hectare Mandala Park stands as a symbol of a new Mandaluyong in bloom, and is designed to be a green community that fosters a way of life that gives a sense of pride for one’s city, for one’s home and for one’s well-being. Through Mandala Park, Litton and Co. has kept its vision of creating a seat of wellness and sustainability through continued collaboration with organizations and individuals that put homegrown merchants first.
PROPERTY
L
IGHTING her nth cigarette for the afternoon, Linda (not her real name) says that even without commercial talents tapped to endorse a candidate, it takes P500,000 to a million pesos to produce a 30-second political advertisement. Continued on A2
NORIEL DE GUZMAN
‘Private sector should operate corn e-trading platform’
Editor: Tet Andolong
Filinvest net income surges to ₧7 billion The group generated P49.3 billion of revenues, or 28 percent, more than the previous year, partly due to the initial recognition of electricity sales from its power subsidiary FDC Utilities Inc. (FDCUI), as well as increased sales in its realestate operations. FDCUI saw its first significant revenue stream in 2015, as it recognized the sale of power from its Independent Power Producer Administrator contracts with Unified Leyte Geothermal Plant and Apo Geothermal Power Plant. The bulk of revenues, or 43 percent, continued to come from the real-estate business. Financial services and banking contributed 37 percent, while power generation delivered 13 percent of revenues. The balance came from sugar operations (5 percent) and hotel operations (2 percent). Real-estate subsidiaries Filinvest Land Inc. (FLI) and Filinvest Alabang Inc. (FAI) continued to deliver solid growth to the group. FLI, one of the country’s largest residential developers and business-process outsourcing office providers, saw net income increase by 11 percent to reach P5.1 billion. Consolidated revenues from FLI rose 7 percent to P18.3 billion. Recurring income from rental revenues surged 12 percent on the back of its growing port-
Conclusion
E1
@ _enren
he National Food Authority (NFA) on Monday said it has urged the private sector to operate the country’s electronictrading platform for corn to make it efficient. Allowing the private sector to operate the Enhanced Electronic Trading System (EETS) for corn would facilitate transaction
PESO exchange rates n US 46.1740
between farmers and corn buyers, according to NFA Deputy Administrator Ludovico J. Jarina. “We have already met with the producers and the buyers, most especially the feed millers, who are big consumers of corn. We have asked them to organize a team composed of stakeholders, including producers, who would operate the EETS,” Jarina told the BusinessMirror. With the private sector at the helm of the trading platform, de-
13,692 MT Volume of corn deposits in the EETS
positing corn stocks and negotiation between farmers and potential buyers would be “smoother”. Currently, farmers are required to initially sell and deposit their
stocks with the NFA, then post their selling price in the electronic board, which is accessible to buyers nationwide. Buyers could also indicate the price they are willing to pay for the corn. If a seller and a buyer agree to a price, then the NFA would facilitate the transaction. However, Jarina said, the NFA cannot buy corn at a level that is higher than its mandated support price. “Farmers choose not to sell to the
NFA, because they know they can sell corn at a higher price if they go directly to private traders,” he said. Traders buy white corn currently at an average of P14 per kilogram, a peso higher than the NFA’s buying price of P13 per kg, Jarina said. Yellow corn is currently being bought by traders at P12.50 to P13 per kg, also higher than the NFA’s support price of P12.30 per kg. See “Corn e-trading” A4
n japan 0.4243 n UK 65.9180 n HK 5.9546 n CHINA 7.1297 n singapore 34.1650 n australia 35.7802 n EU 52.2505 n SAUDI arabia 12.3167
Source: BSP (19 April 2016 )
BMReports BusinessMirror
A2 Wednesday, April 20, 2016
www.businessmirror.com.ph
The truth about election spending Continued from A1
The amount corresponds to expenses for location hunting, reservation, travel, actual shooting, editing, dubbing and other related activities, like food and talent fees for director and production staff. “Only 40 percent of the budget for producing a political ad goes to the ad agency,” Linda said. “You use up almost 60 percent for creating the ad.” She added the budget excludes payment for celebrity endorsers, which can go as high as P8 million, “if he or she is as popular as Sarah Geronimo.” “But that’s a separate expense to be shouldered by the client.” Linda said her placement agency subcontracts the production of political ads. “Matrabaho masyado, nakakapagod [It’s too tiring, work is frenetic],” adding that she prefers social-media placements. The revenue is not so competitive in social media. “Mura lang ang ad placement [cost of ad in social media is cheap].” “Linda said a banner political ad in Yahoo! only costs P150,000. “And [that] will already last for a month.” A common strategy employed by political operators is the use of social media to defend a candidate or criticize his or her rival. “Supposing our cand id ate gets bashed in Twitter or Facebook, our writers manufacture the retaliator y twits or statements, and our research team posts them,” Linda explained. “Iba-iba kunyari ang sumasagot; iba-ibang location, pero isang grupo lang ’yun [But it
Electricity rates. . .
Community of connections
BUSY is a short word that fully describes Linda, owner of a media-placement agency. There is another pause in the interview, as Linda answers yet another call from staff, coordinating schedules for the following day. Hers is also a world of connections, patrons and former benefactors that come with every ad placed in the trimedia. “The media-placement community is a close community and a friendly one. People know each other. We know who won which bidding and who transferred to which [political] camp or candidate. Kaya bigayan lang [So it’s give and take].” She said, “There is no dog-eat-dog mindset. Someone approaches you, a former client and says: ‘O si Senator __, kailangan ng TV-ad placement; sa iyo ko na ibibigay’ [Senator __ wants TV-ad placement. I’ll assign the job to you].” Linda further explains that ad placements in the media usually go by conduits. “For example, this public relations [PR] operator knows candidates requiring media placements. Kung ka-alyado ka niya [if you are his friend or ally], you get the contract.” Hence, she said it matters which candidate your PR friends are aligned with. “If their candidate does not have money, it will be lean pickings for the rest of the election season. But if your PR conduits are aligned with the incumbent, it will be a very productive election season.”
₧350
Another election reality, Linda admits, is that every election brings in new clients. There are no old clients. “Lahat new eh. Kasi, nawawala na ’yung nanalo. Mas malaki na resources niya, lumilipat sa mas malaking outfit [All my clients are new. The old ones who won now have better resources, so they move to the big agencies],” she said. “So for every new election, a new candidate-client. We don’t have repeat clients. The only ones with a chance for repeat clients are the big agencies.”
become visible to the media. “Kumbaga, tinatambol na ’yung pangalan niya para magkaroon ng name recall [The name is made known to establish name recall.] Uma-attend na siya ng mga liga [attends sports leagues], birthday party of the barangay captain, etc. This happens one year before the campaign season,” Nick said. And one year before the actual campaign period, a wannabe local official has to pass the surveys conducted by the incumbent to determine the most winnable among the would-be local official candidates (councilors). The wannabe local candidate has to make it to the top half on the survey list. This is before he can apply for candidacy. Surveys are conducted by the incumbent official or political party at the local level. This is a funded activity, according to Nick. For the opposition, this is financed by the financier of the opposition ticket.
Grooming, surveys
P100 million, P350 and trust
The amount given by a candidate to buy one vote
LIKE their counterpart candidates at the national level, local candidates also require getting introduced to voters. But while senatorial, vice-presidential and presidential aspirants see the media as a critical channel for national projection, the candidates at the local level depend on ward leaders and ground-level political operators like Nick to carry them to victory. A new local candidate, like one aspiring to become a councilor, is “groomed” one year before running for office. He or she is made to attend community functions and
NICK said in the span of one local election-campaign season, expenses can run to P100 million to sustain the operations that penetrate every district, ever y barangay, ever y area—all the way to the sitio in every street of a city or municipality. “In Metro Manila a district is composed of barangays. Big barangays have many areas, and every area has many streets,” Nick said. “In each of these, we identify a key person, down the line, until we reach the street level. This does not include the organized networks of the barangay captain
and the kagawad—these are the people who concentrate on the sectoral formations— youth, senior citizens, disabled, LGBT, traditional organizations, etc.” According to Nick, all of these areabased and sectoral formations should have a key person identified to oversee his or her area of responsibility. He added that the main qualification of this key person is trust. This line of trust begins with the local candidate, his family, trusted friends, finance people, head of operations and key operations staff—all of them must be trustworthy. Outside of this line of key trusted people, there is already the chance for turncoatism, Nick said. “Kaya bantay-bantay lang [So you just keep your guard up]. The operations team is the candidate’s last line of defense. We are employed as community-development staff of the incumbent,” he explained. “Once the election season begins, we are transformed to an organizing team for the person running for office.” Come election day, Nick said, they operate like a Strike Team. “We can be called for a specific task, like ‘we bulong’ [whisper]— those who convince voters at the last minute who to vote for.” Their other, more delicate task is vote-buying. There is a science to vote-buying, according to Nick. “You have to buy early, weeks before election. And you must befriend them, establish a closeness even before that,” Nick said. “They trust you, you trust them.” According to Nick, the going rate at the moment for a vote is P350.
May 9 polls
Continued from A1
Plant shutdown
Last Friday’s critical power-supply situation in Luzon could also be blamed on some power plants that suddenly conked out. Kalayaan units 3 and 4 (180 MW each); QPPL (289 MW); Malaya 1 (130 MW); Botocan 2 (10 MW); Pagbilao 1 (382 MW); and Magat units 3 and 4 (95 MW each) were all put on emergency shutdowns. Meanwhile, the capacity output of Calaca 1 (200 MW) and 2 (300 MW) had been limited to 190 MW and 220 MW, respectively. The DOE has already directed power producers to reschedule the maintenance work of their power plants after elections. They agreed. However, the agency said the sudden shutdown—mostly due to technical glitches experienced by some power plants—was already beyond its control. “Higher power rates would be a consequence of meeting the necessary power supply. It just so happened that there were unscheduled powerplant shutdowns that coincided with scheduled plant shutdowns,” Energy Secretary Zenaida Y. Monsada said. The DOE official also recognized the possibility of higher power rates next month, because some of the coal-fired power plants that were shut down had to be fed with diesel, which is more expensive than coal. “Malaya coal plant, for instance, when it was called to operate, had to utilize special fuel oil, which is in between bunker and diesel, thus, more expensive than coal,” the DOE chief explained. The DOE said it is closely monitoring maintenance-shutdown schedules of plants to make sure all plants will come online before the end of April. Based on the latest monitoring, most plants are already back online, but not all are running at full capacity. There are no scheduled plant shutdowns in May. One unit of Pagbilao coal power plant was supposed to be on scheduled maintenance until May 1, but it came back early and resumed operations last Friday.
Revised outlook
Meralco, the country’s largest distribution utility in the country serving over 5 million customers to date, awaits an updated forecast of power demand and supply from the DOE. Fernandez said this would help the company plan ahead during critical times, particularly summer, when demand for electricity is at its peak.
nonie reyes
The increasing heat index triggered an unusual rise in demand for power, where Luzon’s requirements alone reached around 9,700 megawatts (MW), breaching historical records, according to the Department of Energy (DOE). This prompted the National Grid Corp. of the Philippines (NGCP) to issue a red alert in Luzon from 1 to 3 p.m. The red alert was lifted at 3:01 p.m., then NGCP placed Luzon on yellow alert once more that day. Meralco Head for Utility Economics Lawrence Fernandez said in an interview the yellow and red alerts indicate a tight supply situation in which there is less or no reserve margin in the grid. This, he said, will typically be reflected as higher spot-market prices, especially during the periods of yellow and red alerts. “These may have an upward pressure on generation costs this April, which will be reflected in the May generation charge,” Fernandez added. The Meralco official did not provide numbers, saying it was too early to compute how much this will impact on generation charge, the largest component of an electricity bill. Normally, the utility firm provides an indication of a possible upward or downward power-rate adjustment during the first few days of the month before actual rates are issued every 8th or 9th day of the month. “We’re still in the middle of the supply month and we will have to see how the supply-demand situation unfolds in the next two weeks,” Fernandez said. Meralco’s April bills already reflected a higher generation charge, mainly on account of higher demand. Moreover, a P0.08 per kilowatt-hour (kWh) increase in the feed-in tariff allowance-rates also contributed to the overall rate increase of P0.22 per kWh compared to last month’s rate. For a typical household consuming 200 kWh, April’s adjustment translates to an increase of around P44 in electricity bill. The increase in last month’s rates was primarily due to the generation charge, which increased by P0.10 per kWh from last month. Meralco said generation charge shoot up as a result of higher charges from the Wholesale Electricity Spot Market (WESM), which went up by P2.23 per kWh. Peak demand in the Luzon grid increased by more than 500 MW from the Februaryto-March supply months with the approach of summer.
is just one group].” She said there are devices that allow them to do that nowadays.
“We will await DOE’s guidance on the expected Luzon supply-demand situation. We were advised that the DOE will be updating its forecast, considering that the peak demand registered last week already exceeded the initial forecast of 2016 peak demand of around 9,400 MW,” Fernandez said in the same interview. Latest available data have it that Luzon will have a total supply of about 9,000 MW, with a demand of 8,900 MW, while the Visayas will have a total supply of 1,800 MW, with a demand of 1,600 MW. For Mindanao, it will have a supply of 1,700 MW with a demand of 1,500 MW. These figures were provided by Monsada in September last year. There are no available updated figures provided by the DOE up to now. The DOE also confirmed on Monday night that a revised forecast for Luzon is in the works. “We are updating still, but we are looking at an upward revision,” Energy Assistant Secretary Patrick Aquino said in a text message when sought for comment. He did not elaborate on what he meant by an “upward revision.” He only said:“Figures are dynamic. We will come out with updated figures soon.” He did provide, however, a weekly forecast on the country’s power situation. For April 16 to 22, power demand is expected at 9,439 MW in Luzon, 1,749 MW in the Visayas and 1,455 MW in Mindanao. Supply, meanwhile, is expected to reach 10,941 MW in Luzon, 2,143 MW
in the Visayas and 1,404 MW in Mindanao. Except for Mindanao, which is still on red alert, the DOE said Luzon and the Visayas’s power situation this week is “normal.”
Contingency measures
Manual Load Dropping, or rotating power outage, was averted last Friday in Luzon because Meralco activated the ILP. The ILP scheme works by calling on business customers with loads of at least 1 MW to run their own generator sets, if needed, instead of drawing power from the grid. With the ILP, power supply from the grid that will not be consumed by participating customers will be available for use by other customers within the franchise area. Through this, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply. With the ILP, the peak demand was kept at a lower level of 9,416 MW. “With the implementation of ILP after a red alert, as advised by the systemgrid operator, the estimated deloaded contribution of 247 MW from around 121 ILP participants helped avert rotating brownouts. “We were able to prevent power interruptions, which would have affected close to 300,000 customers last Friday,” Meralco Spokesman Joe Zaldarriaga said. Moreover, the government-owned Malaya power plant is already on
stream as a must-run unit during weekdays, where power demand is higher compared to weekends. Currently, the plant’s Unit 1 provides 290 MW of capacity, while the Unit 2 is still starting up and is expected to be online on Wednesday night, further augmenting the power supply in Luzon. Meanwhile, the DOE and NGCP urged the public to undertake energy efficiency and conservation initiatives, such as setting the thermostat of airconditioning units installed in their offices and households at 25 degrees Celsius; and/or by adjusting the usage period of any electric appliances away from the peak hours (i.e., 10 a.m. to 3 p.m. in Luzon and 5 to 7 p.m. in the Visayas and Mindanao), such as ironing of clothes, unnecessary use of computers and even the laundry of clothes using washing machine and dryer, as any contribution really does matter. Meralco also offered some energyefficiency tips for its customers: Unplug appliances that are not in use, as appliances in standby mode still consume electricity. Also, keep appliances clean and properly maintained to ensure that they work efficiently – poorly maintained and dir ty appliances consume more electricity. When buying new lights and appliances, it may be a good idea, too, to consider the LED and inverter types. The initial cost to buy them may be higher, but they are more energy efficient, and will ensure significant savings on electricity costs in the long run.
Meanwhile, the Power Task Force Election (PTFE) 2016, led by the DOE, laid down measures to make sure power supply is sufficient, stable and reliable before, during and after the conduct of national and local elections on May 9. “Actually, we have two task forces that are looking into the integrity of the power-supply chain to secure supply of electricity, particularly during the period one week before and one week after the election day, especially within and near the voting precincts,” Monsada said. Monsada added that since December, the PTFE started groundworks, including coordination meetings with energy stakeholders, and identification of tasks and responsibilities of memberagencies in employing strategic and preparatory measures to ensure availability and stability of power supply, not only for the elections period, but for the entire summer months. The PTFE’s latest and ongoing initiatives to ensure that all systems nationwide are ready and in place prior to the elections, include conduct of tabletop drills and information, education and communication campaigns among stakeholders (i.e., distribution utilities, generation companies, transmission companies and various government energy agencies) to equip them with best practices during crisis management; directive to distribution units to ensure power supply by contracting needed capacities ahead, and making sure that backup power is available should power failure occur; prioritization scheme for the provision of electricity service to voting centers; and advisory to generation companies to undertake maintenance either ahead or after the critical period to enable all available plants to run on full capacity during these times. Alongside the PTFE, President Aquino also created the Inter-Agency Task Force on Securing Energy Facilities (IATFSEF), which paved the way for concerned national government agencies, local government units and other energy stakeholders to commit for the protection and preservation of the country’s energy facilities from insurgency and persistent right-of-way issues. Through the IATFSEF, the tower No. 25 in Lanao del Sur, which was bombed in December 2015, was restored, allowing the transmission of power from Agus 1 and 2. Consequently, the IATFSEF, through the NGCP, continues to implement maintenance work along the transmission system to uphold its integrity and reliability.
BMReports BusinessMirror
news@businessmirror.com.ph
Wednesday, April 20, 2016 A3
Selling only raw goods harms farm sector–CDA By David Cagahastian
I
@davecaga
n a time of brisk economic integration, adding value to harvested crops is the key for the agriculture sector and its workers to survive harsh competition, the chief of the Cooperative Development Authority (CDA) said.
But without access to capital to go to the next step in the supply chain, the odds are stacked against the common farmer to keep him in the cycle of poverty—selling only his raw harvest without adding any value to it, for a very small profit that will be used merely to pay off the debts. “Selling raw products should be a crime. What happened to us is that we’re always selling raw and becoming the dumping ground of finished prod-
ucts,” CDA Chairman Orlando Ravanera told the BusinessMirror in an interview. “Our problem is not the scarcity of our resources; we have the resources. It is our powerlessness to control how these resources are used. The solution is to empower our farmers and give them the power to control what to produce, how to produce it and how to sell it,” Ravanera added. He said problems faced by farmers and even by
48
Number of credit surety cooperatives with funds totaling P390 million cooperatives each harvest cycle all stem from lack of capital. It is a common misconception that farmers do not own the land they till, because the country’s agrarian reform had at least given land to the farmers, but the ownership of the land is not the full solution to allow the farmers to produce better products and break the cycle of poverty. “Even if you own the land, you don’t control the modes of production or the marketing
strategies,” Ravanera said. This is because creditors of farmers, who are mostly from the informal financial sector charging exorbitant interest rates, would like, as an additional security, aside from the advance interest they charge, to control the modes of production or the actual selling of the raw product. Thus, without control over how the crops will be produced or at what price the harvest will be sold and to whom, the farmer is left at the mercy of the creditor, and is expectedly given only the crumbs.
Inaccessible bank loans
Ravanera said it is very difficult for a farmer to gain access to credit in the formal banking system, even if farmers could use their farm lots as collateral. Even through a cooperative, there are many requirements which banks impose on collateralized loans, such as postdated checks and the involvement of guarantors. According to a recent interview with a representative from the Rural Bankers Association of the Philippines, rural banks are already complying with the submission of credit data of their clients to the Credit Information Corp. (CIC), in a bid to lower the costs and risks of lending to farmers. But until a government-administered credit-information database is made operational, banks would still be relying on their own private credit database, wherein most farmers are not included for lack of a credit history, leaving farmers and cooperatives to rely on themselves for access to capital. “But this should not be the case, because agriculture is already a very viable business. It is viable, because the market is already assured, the only thing missing is the capital to create the value chain,” Ravanera said.
Credit-surety funds
This situation, which had been going on for decades, had behooved farmer cooperatives to create credit-surety funds, wherein member-cooperatives make contributions to the fund that will be invested to make it sustainable enough to serve as collateral for bank loans. Even before the Credit Surety Fund Cooperative Act, which recently lapsed into law, credit-surety funds had already been established by farmer cooperatives, driven by their exclusion from the formal financial market. Currently, records from the CDA showed there are 48 credit-surety cooperatives, with funds in the aggregate amount of P390 million, serving as collateral for some P1.9 billion worth of loans. Of the total amount of loans, P1.7 billion had already been released to more than 14,000 micro, small and medium-sized enterprises from August 2008 to August 2015. With the new Credit Surety Fund Cooperative Act, these credit-surety cooperatives are expected to flourish because of the stricter rules to be imposed on the trustee banks, which will invest the funds, the qualifications of the directors of such cooperatives, and other prudential measures to ensure the sustainability and integrity of the funds. The funds of these credit-surety cooperatives, pooled from contributions from the Land Bank of the Philippines, local government units and member-cooperatives, will serve as collateral for loans to be taken out by cooperatives for their projects aimed at adding value to the raw produce of their farmer-members.
Value chain
The economic integration of Asean is about going up the supply chain in the manufacture of a finished product, Ravanera said. But to be able to accomplish this, the Philippine agricultural sector would require big investments in machines to add value to the raw produce. Ravanera said the reliance on selling raw produce is prone to losses, because it is highly dependent on the prices of the commodity, which could be very volatile due to various causes, such as natural disasters, supply and demand, and the prices of similar commodities in other countries. For example, he said many rubber farmers in Zamboanga are already losing profits due to the low prices of rubber. Previously, corn also suffered declines in its prices. Ravanera said farmers, through their cooperatives and assisted by loans collateralized by the credit-surety funds, should choose high-value crops to plant. But they should not stop at planting these high-value crops but should proceed to going up the supply chain all the way up to the finished product to gain the biggest profit among all the players in the supply chain. “The integration already assures us of a market, but if we continue to sell raw, we’ll continue to be the market, and our neighbors will continue to be the suppliers,” Ravanera said. For instance, he said, Filipino cooperatives could compete in planting bamboo; but instead of merely selling the bamboo, they should invest in making chopsticks and export them to Taiwan, where 2 million chopsticks are needed each day. “Corn should be turned into animal feed, ‘rubber should be turned into tires; and coconut should be made into coconut sugar.”
Access to capital
The new Credit Surety Cooperative Fund Act seeks to provide cooperatives with access to capital from the formal banking system, so they can make investments in infrastructure, which could add value to the raw produce of their farmer-members. The implementing rules and regulations (IRR) of the new law is being drafted by the Bangko Sentral ng Pilipinas (BSP) and the CDA, and is expected to be out before the end of this administration. Ravanera said the committee drafting the IRR is looking at a “limitless” amount that a cooperative may borrow from the formal banking system, since the BSP itself is backing the establishment of the credit-surety cooperative funds, and is committed to realizing the intent of the law.
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Carter visit start of US troops’ rotational presence
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By Rene Acosta
@reneacostaBM
HE rotational presence of American troops in the country under the Enhanced Defense Cooperation Agreement (Edca) has started in the presence of US Defense Secretary Ashton Carter over the weekend. US troops and equipment will be in the country under a rotational scheme to enable American servicemen and Filipino soldiers to jointly respond to crisis—natural or man-made. The US troops’ rotational presence in the Philippines was unofficially announced by Carter himself after his meeting with President Aquino in Malacañang. “Some Americans here for this exercise [Balikatan] will be staying behind on a rotational basis to continue joint training and working with our Philippine allies to contribute to regional security and stability. I thank these service members for taking on this important assignments,” he said. The start of the pivot, which will allow US troops and their stateof-the-art assets and equipment, including warplanes and ships, in five selected military bases in the country, took place even as both the Philippines and the US are still working on the technical side of the defense agreement. “Our planners are working on identifying the technical requirements for the selected sites, where agreed locations could be developed,” said Defense Secretary Voltaire T. Gazmin, who accompanied Carter during his visit to Malacañang. “We are optimistic that the Edca would significantly contribute to our efforts in enhancing the interoperability between the Armed Forces of the Philippines and the United States Pacific Command, or Pacom, by developing the facilities that could be used for our approved Philippines-US activities,” he added. However, Carter indirectly implied that the temporary basing of US soldiers in the country has
already started, with part of those who participated in the two-week Balikatan and the Stennis Carrier group, that was sent to the country during the period, to stay behind for regional security duty. “A contingent of US aircraft and their crews and pilots that participated in Balikatan will stay behind at Clark Air Base. We’ll do this, in fact, on a regular basis. The initial contingent, five A-10 ‘Thunderbolt’ aircraft, three H-60G ‘Pave Hawk’ helicopters and one MC-130H ‘Combat Talon’ aircraft will stay behind,” he said. “And 200 airmen, including pilots, will continue joint training, conduct flight operations in the area, including the South China Sea, and lay the foundation for joint air patrols to complement ongoing maritime patrols,” he added. “A command-and-control center manned by American personnel here for the exercise will also remain behind. They will continue exercising combined US-Philippines commandand-control capabilities and support increased cooperative activities in the region,” Carter added. Never in the history of the Balikatan that American servicemen, who have participated in the annual bilateral exercise, have stayed behind, and while US forces occasionally visits the country, they only do this during port-call visits or when they are on humanitarian assistance and disaster-response operations. When the Philippines and the US were working on the details of the Edca in 2014, Filipino defense officials said the agreement should help the country deal with the aggressive China in the West Philippine Sea, other than training and boosting the equipment-lacked military.
IN this April 15 photo, US Defense Secretary Ash Carter reviews troops as he arrives for the closing ceremony of the 11-day joint US-Philippines military exercise at Camp Aguinaldo in suburban Quezon City. Carter announced that, for the first time, US ships had started conducting joint patrols in the South China Sea with the Philippines—a somewhat rare move not done with many other partners in the region. AP
Gazmin has said the Edca will serve as the country’s temporary but primary territorial defense plan while the government is beefing up the capabilities of the Armed Forces. Based on the same statement of Carter, activities under the Edca has even started as early as last month, and this was in the form of a joint patrol in the West Philippine Sea, where Chinese military and paramilitary vessels were a constant sighting during the past months. “Last month we commenced joint maritime patrols in the South China Sea. These patrols, an alliance decision at our two-plus-two ministe-
rial, which Voltaire [Gazmin] and I held with our respective secretaries of foreign affairs in Washington in January,” Carter revealed. “These patrols will continue to help build our interoperability and improve the Philippine Navy, even as these patrols contribute to the safety and security of the region’s waters,” the candid Pentagon chief revealed. Gazmin, however, tried to downplay the joint patrol, saying it was in the form of a passing exercise. “We conducted such joint patrols as part of our passing exercises or the passexe. Our planners are examining ways on how to make such
Corn e-trading. . . continued from a1
Because of this, Jarina said the NFA does not have corn stocks in places where are a lot of corn buyers. “For example, Cebu should have been prepositioned with white corn grains as it is a corn-eating province. But we do not have white corn in our warehouse in Cebu,” he said. A private-sector led EETS, Jarina said, would allow farmers to sell and deposit their corn at spot prices.
Benefits
The Philippine Association of Feed Millers Inc. (Pafmi) said the e-trading platform would benefit buyers, particularly feed millers, as it would cut production cost. For one, feed millers would no longer have to travel to corn-producing provinces, such as Isabela and Cagayan to buy corn. Ely Miranda, who represents Pafmi in the Corn Development Fund Committee, said it would also provide an easier payment scheme for farmers, as transactions can be done through bank deposits. Data from the NFA showed that corn deposits in the EETS have reached 13,691.93 MT to date. However, the NFA said there are no interested buyers for the stocks. “We have not had successful deals yet. The farmers post their selling price and the buyers post their buying price, but more often than not, they cannot agree on a price,” Jarina said. “[Also], the system does not operate in real time. It still operates manually using a short messaging system,” he added. Jarina said the government has allotted P10 million from the Corn Development Fund for the procurement of new software and hardware for the EETS. The EETS was set up in 2009 to introduce electronic trading in the Philippines and pave the way for the Agricultural Commodity Exchange System (Aces). Aces was envisioned as a digital platform for trading various agricultural commodities, including rice, sugar and highvalue crops. The government had hoped that Aces would enhance the competitiveness of local-farm products in Asean. “The plan back then was to develop an electronic-trading system starting with corn, and then other commodities, like rice and sugar. After these systems mature, it was seen to develop into the Aces, which will include other commodities, as well,” Jarina said. However, the government could not follow through on its plans for the Aces as the corn platform has yet to take off.
Some Americans here for this exercise [Balikatan] will be staying behind on a rotational basis to continue joint training and working with our Philippine allies to contribute to regional security and stability.”—Carter patrols as part of our regular activities,” he said. Passing exercise is an activity which ensures that two navies can work and communicate together dur-
ing times of peace and war. As spelled out by the Edca, both the Philippine Navy and the US Navy are required to conduct joint patrols, especially in the West Philippine Sea.
Droids are the future of e-commerce deliveries
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N the shadow of Greenwich’s 02 Arena—the futuristic dome originally built as London’s showpiece for the Millennium—what looks like a picnic cooler on wheels zips among groups of gawking children. This little delivery robot, designed to autonomously navigate sidewalks, not roads, later this year will begin making deliveries from local businesses direct to customers. In doing so, it may just conquer e-commerce’s final frontier: the Last Mile, the least efficient and most problematic step in the delivery process. “Thirty percent to 40 percent of the cost of delivery comes in the last mile,” says Allan Martinson, the COO of Starship Technologies, the company building this robot. The venture is the brainchild of Ahti Heinla, one of Skype’s original developers, and is backed by billionaire Skype cofounder and tech investor Janus Friis. The little delivery robots designed by Starship and a competing US start-up, called Dispatch, are the BB-8s and Wall-E's of e-commerce. These scrappy droids are up against tech’s strongest forces. Amazon is testing airborne drones, as are Wal-Mart and Google. Google has also sought patents for a driverless truck, which would carry an array of storage lockers that unlock with a text message. And Uber is deploying drivers for food delivery, a concept that could be expanded to other products. And don’t forget incumbents from Federal Express and UPS to government postal services. While Starship’s robot may be first to market, victory isn’t assured. The droids have limitations, with economic viability confined urban areas. Drones have a higher sticker price and bigger regulatory hurdles to surmount, but may prove less expensive on a per-mile basis. And for the foreseeable future, some logistics experts say, humans
still have the edge over any sci-fi inspired contenders. Heinla, a tall, gaunt Estonian with shaggy blond hair and the disheveled look of an engineer for whom form matters more than fashion, says delivery droids have their advantages. Smaller robots are easier and cheaper to build. Because Starship’s droid weighs less than 35 pounds and travels slowly, it's less likely to cause damage. As a wheeled vehicle, there are no spinning rotorblades that could cause injury—unlike drones. Most important, it travels on sidewalks not roads, which simplifies getting regulatory approval to operate. Starship robots have already covered more than 1,900 miles in the United Kingdom, Germany, Belgium, Estonia and the United States, with more than 50,000 miles planned this year. In comparison, drones are being tested in highly controlled environments, with commercial deliveries on hold until regulators work out safety, liability, air rights and privacy issues. Autonomous vehicles are so far only allowed limited tests on public roads. “We’ve tested it in snow, slush, ice and rain—you name it,” Martinson says. In the US, Starship is testing its robot in Fayetteville, Arkansas, about 35 miles from Wal-Mart’s Bentonville headquarters, in conjunction with an innovation lab at the University of Arkansas named after the family of Wal-Mart chief executive Doug McMillon. This has lead to speculation the giant retailer may be interested in the little robot. Wal-Mart’s 415C Lab, an internal unit investigating various disruptive technologies, has said it is monitoring the testing program. Starship won’t comment on a possible tie-up with Wal-Mart. But Martinson says he expects the first e-commerce customers to start using the robots later this year. Bloomberg News
Asean
Wednesday BusinessMirror
Wednesday, April 20, 2016 • Editor: Max V. de Leon
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Drought killing Vietnam rice crops compounds Mekong area water crisis
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he nine acres in southern Vietnam that double as rice paddy and shrimp pond for farmer Nguyen Thi Tam have become a wasteland. After the worst drought in 90 years, almost nothing grows.
Tam’s family had no income for two harvests because the rice crop failed and the shrimp died. They ran up $8,000 in debt— more than twice her earnings in a typical year. To make ends meet, Tam plans to leave her village to work at a factory hundreds of miles away. Many others in the area already have fled, she said, including her daughterin-law, who couldn’t endure the poverty. “I am worried about everything,” Tam, 55, said inside the thatched house in Kien Giang province she shares with her husband, three grown children and two grandchildren. “I cannot sleep.” The dry spell in the once-fertile Mekong Delta is devastating food supplies in southern Vietnam and threatening to reduce global exports of rice, seafood and coffee. It is also compounding a Southeast Asia water shortage along a 3,000-mile river that runs from Tibet to Thailand to the South China Sea, as climate change and too many dams erode livelihoods for millions of farmers.
More shortages
Waters in the Mekong Delta, a network of channels that cut across vast flatlands in southern Vietnam, are at the lowest in almost a century, which may mean shortages for as much as 50 percent of the region this year, according to a United Nations report. That means less for irrigating crops and an increase in salt levels as more seawater seeps into the delta, causing more damage. The Mekong River countries of Vietnam, Thailand, Lao PDR, Cambodia and Myanmar produce about 62 million metric tons of rice, or 13 percent of global output, United States Department of Agriculture data show. The river accounts for as much as 25 percent of the global freshwater catch and provides livelihoods for at least 60 million people, according to the World Wildlife Fund. Vietnam exported about $3 billion of shrimp last year. Almost half of Vietnam’s population of 91 million works in agriculture, which accounts for about 13 percent of the economy. “People in Indonesia and the Philippines will go hungry if the Thais and Vietnamese don’t produce enough rice,” said Richard Cronin, director of the Southeast Asia Program at the Stimson Center in Washington. “This is a preview of the longer-term effect of development and climate change to the Mekong Delta.”
62MMT
Combined rice output of the Mekong River countries of Vietnam, Thailand, Laos, Cambodia and Myanmar, or 13 percent of global output
More dams Rice exports from Vietnam, the world’s third-largest shipper, probably will drop 10 percent this year because of lower production, said Do Ha Nam, the CEO of Intimex Group, a major Vietnam exporter of agricultural products. Rice output from the Mekong Delta fell 6.2 percent in the first quarter from a year earlier, reducing the country’s total agricultural production by 2.7 percent, according to Nguyen Bich Lam, head of the General Statistics Office. Water from the Mekong was already under pressure before the drought, which the UN attributed to a stronger-than-normal El Niño weather pattern. China has completed six of seven major dams on the river in southern Yunnan Province, Cronin said. Vietnam has built dozens in the Central Highlands, which, like the Chinese and Laotian dams, deprive the Delta region of the critical sediments needed to replenish eroded soil, he said. Eleven more dams planned in Thailand, Laos and Cambodia could result in fish and farming losses of $750 million in Vietnam and $450 million in Cambodia, with extinctions for as much as 10 percent of fish species in the region, according to a study submitted to the Mekong River Commission, a group created to mediate water disputes. Vietnam’s government, which relied on rice farming to feed its population during years of dire poverty after its war with the US, needs to encourage Mekong Delta farmers to switch to more profitable crops, such as fruit trees that require less water, and raise higher-value shrimp in coastal areas, said Vo-Tong Xuan, a professor of agronomy and rector of Nam Can Tho University. Bloomberg News
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Wednesday, April 20, 2016
The World BusinessMirror
Cuban leaders criticize both bureaucracy, private sector
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AVANA—Some of Cuba’s most powerful officials criticized the creaking inefficiency of its state-controlled economy on Monday, but tarred its vibrant private sector as a potential source of US subversion. The comments illustrated the conundrum faced by a Cuban government simultaneously trying to modernize and maintain control in a new era of detente with Washington, D.C. The Cuban Communist Party ended the third day of its twice-a-decade congress with a vote for the 114-member Central Committee, which, in turn, selects the powerful 15-member Political Bureau. The bureau’s first and second secretaries are the country’s top officials. Monday’s vote, like the rest of the congress, was open only to 1,000 delegates, 280 hand-selected guests and state journalists, whose reports revealed virtually no concrete details of the policies that will guide the government for the next five years. The Seventh Party Congress has been criticized for its extreme secrecy by ordinary Cubans and even members of the Communist Party itself. State media said the results of the voting would be revealed on Tuesday. Cuban President and First Party Secretary Raul Castro opened the meeting on Saturday with a somber evaluation of the state of reforms he introduced after taking over from his ailing brother Fidel in 2008. Raul Castro blamed “an obsolete mentality” and “attitude of inertia” for the state’s failure to implement
114 Members of Cuban Communist Party’s Central Committee
reforms meant to increase productivity. First Vice President Miguel Diaz-Canel, long seen as Castro’s successor, repeated that criticism of the bureaucracy in a speech on Monday, announcing the congress’s formal acceptance of Castro’s evaluation. He said obsolete ways of thinking led both to inertia in enacting reforms and “a lack of confidence in the future.” “Along with other deficiencies, there’s a lack of readiness, high standards and control, and little foresight or initiative from sectors and bureaucrats in charge of making these goals a reality,” Diaz-Canel said in an excerpt of a speech broadcast on state television. However, lengthy state media reports on the four-day congress focused less on proposals for reform than on debates about political orthodoxy focusing on the
Communist Party delegates raise their hands during a vote in a session of the seventh Congress of the Cuban Communist Party of in Havana, Cuba, on Monday. Ismael Francisco/Cubadebate via AP
need to protect Cuba’s socialist system from the threat of global capitalism and US influence, in particular. A month after President Barack Obama’s visit to Havana, the first by a US president in nearly 90 years, Cuban leaders have begun to consistently portray his trip as an attempt to seduce ordinary Cubans into abandoning the country’s socialist values, in favor of a desire for free markets and multiparty democracy. On Saturday Castro said “the enemy” was targeting young people, intellectuals, the poor and the 500,000 members of Cuba’s new private sector as vulnerable to persuasion. On Monday Foreign Minister Bruno Rodriguez went further, calling Obama’s visit “an attack on the foundation of our history, our culture and our symbols.” “Obama came here to dazzle the nonstate sector, as if he wasn’t the representative of big corporations but the defender of hot-dog vendors, of small businesses in the United States, which he isn’t,” Rodriguez said. Rene Gonzalez, a former intelligence agent held in the United States in a case resolved by the declaration of de-
tente with Washington, made an unusual call for the consideration of political reform in Cuba. Saying the party had focused excessively on the economy for 10 years, he said, “Let the party call for a broad public discussion that goes beyond concepts of economic development.” “Let’s arrive at the eighth party congress for the first time in human history with a consensus on that human aspiration that some call democracy, and that’s possible through socialism,” Gonzalez said. State media did not indicate whether his proposal was included in any of the formal documents put up for a vote during the congress. Aged 55 and 58, respectively, Diaz-Canel and Rodriguez are members of the generation expected to move into the highest ranks of power in Cuba as early as Tuesday when the congress’ vote is announced. Castro said on Saturday that he was proposing an age limit of 60 for election to the Central Committee and 70 for lower-ranking but important posts in the party. Castro is 84 and his second secretary, hardliner Jose Ramon Machado Ventura, is 85. AP
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Brazil’s Rousseff won’t quit after impeachment vote
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RASILIA, Brazil—President Dilma Rousseff said on Monday she is “indignant” over a congressional vote to open impeachment proceedings against her and vowed to fight what she called the injustice. She again categorically ruled out resigning. In her first public appearance since the Chamber of Deputies voted 367-137 late on Sunday to send the impeachment proceedings to the Senate for a possible trial, Brazil’s first female president appeared shaken but delivered a message of defiance. Rousseff repeated the words “indignant,” ‘’injustice” and “wronged” dozens of times during her news conference in the presidential palace. She also repeated her long-stated position that she hasn’t done anything illegal and is the victim of a “coup” orchestrated by her political foes. “Today, more than anything, I feel wronged—wronged because this process doesn’t have any legal basis,” she said. She said the feeling of being unjustly accused is among the worst sensations.
The impeachment proceedings against Rousseff are based on accusations that illegal accounting tricks by her administration allowed her to use government spending to shore up flagging support before elections. Rousseff says previous administrations used such fiscal maneuvers without repercussions and insists the accusations are a flimsy excuse by Brazil’s traditional ruling elite to grab power back from her left-leaning Workers’ Party, which has governed for 13 years. She slammed the impeachment effort as an act of “violence against democracy.” “I’m not going to cowed; I won’t let myself be paralyzed by this,” Rousseff said, adding: “I have the energy, strength and courage to confront this injustice.” Rousseff lashed out at her nemesis, Chamber of Deputies Speaker Eduardo Cunha, the driving force behind the impeachment move. As No. 2 in line to succeed Rousseff, Cunha has been charged with taking $5 million in bribes in a sprawling corruption scheme at the state-run Petrobras oil giant. AP
Trump, Clinton betting on New York
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AS H I NGTON — F o r t h e t w o front-runners in the Republican and Democratic presidentialnomination races, there’s no place like home. Polls show Democrat Hillary Clinton and Republican Donald Trump with double-digit leads heading into the New York primary on Tuesday, and both candidates are hoping that strong victories on their home-court will reset their respective races and catapult them toward the finish line. Af te r to u g h l o s s e s —Tr u m p wa s embarrassed in Wisconsin two weeks ago by Texas Sen. Ted Cruz’s strong showing, and Clinton has lost eight of her party’s last nine nominating contests to Vermont Sen. Bernie Sanders—the immediate path ahead for each candidate looks promising. If the two New Yorkers can close out their home state—Clinton is targeting minority voters, while Trump is trying to temper his emotional campaign—they’ll pick up needed momentum for the next round of primaries. Five northeast states hold contests next week, where both candidates should hold
strong advantages. “April 26 is the goal line,” Joel Benenson, Clinton’s pollster, said in an interview about the primaries next week. There are about 750 delegates up for grabs in the Democratic race over the next week, about 40 percent of the total remaining. “At that point,” Benenson said, “our pledged delegate lead will be of a sufficient size that Senator Sanders just simply will not have enough real estate left.” Clinton targeted black voters on Sunday at a Baptist church in Mount Vernon and at block parties in Washington Heights and Brooklyn, where she campaigned on progun-control messages and celebrated President Barack Obama’s two terms. It was a stark reminder of perhaps Clinton’s biggest advantage in the race—the wide support she enjoys among minority voters over Sanders. “I am your neighbor, which makes me very happy,” she told the black church congregation. “I’m asking for you to be part of what I do as president.” Bloomberg News/TNS
Ecuador rescuers race against time to find quake survivors M ANTA, Ecuador—Rescuers are in a race against time to find survivors from a powerful 7.8-magnitude earthquake as the death toll from Ecuador’s strongest earthquake in decades has risen above 400. On Monday teams from Ecuador and neighboring countries fanned out across the country’s Pacific coastline to look for the dozens of people still missing. In the port city of Manta, a group of about 50 rescuers working with sniffer dogs, hydraulic jacks and a drill managed to free eight people trapped for more than 32 hours in the rubble of a shopping center that was flattened by Saturday night’s quake. The first rescue took place before dawn, when a woman was pulled head first from a nearly two-and-ahalf-foot hole cut through concrete and steel. Firefighters applauded as she emerged from the debris, disoriented, caked in dust and complaining of pain, but otherwise in good health. Another uplifting scene played out in nearby Portoviejo, where a cell-phone call to a relative from under the debris of a collapsed hotel led searchers to Pablo Cordova, the hotel’s administrator. Once he was gingerly removed, he was immobilized and hauled away on a stretcher, his hands waving in the air in a sign of appreciation to cheering onlookers. “Since Saturday, when this country started shaking, I’ve slept only two hours and haven’t stopped working,” said Juan Carranza, one of the firefighters leading the rescue effort in Portoviejo. Despite such cheering moments, tragedy continued to mount. At the
Rescue workers on Monday carry body bags in a basket stretcher, as they look for survivors after an earthquake, in Manta, Ecuador. The strongest earthquake to hit Ecuador in decades flattened buildings and buckled highways along its Pacific coast, sending the Andean nation into a state of emergency. AP/Rodrigo Abd
shopping center in Manta, authorities were working to free a woman they had found buried alive with a heavy concrete slab pinning her legs when an aftershock forced them to abandon the effort. When they returned the debris pile had moved and the woman was dead, said Angel Moreira, a firefighter coordinating the effort.
The government reported late on Tuesday that the official death count had increased to 413 and said they expected the toll to rise further in the days ahead. Among the dead were an American and two Canadians. Complicating rescue efforts is the lack of electricity in many areas, meaning noisy power generators must be used, making
it harder to hear anyone who might be trapped beneath rubble. Christian Rivera, the head of emergency services for the capital, Quito, said that depending on the circumstances a person without serious injuries can survive up to a week in such conditions. “After that, there’s a quick decline...and the rescuers’ work
becomes very difficult,” he said. Some 450 rescue workers from Spain, Peru, Cuba, Bolivia, Venezuela and elsewhere are working in the areas with the most damage. The United States has also offered assistance, but so far President Rafael Correa, a strong critic of US foreign policy in Latin America, has yet to respond publicly.
The leftist leader on Monday boarded a military helicopter to deliver water, food and other supplies to devastated areas. He urged Ecuadoreans to remain united in what is likely to be a long rebuilding process that could cost billions of dollars. “The priority is to direct resources where there are signs of life,” Correa said. After a deadly earthquake in Chile in 2010, that South American country was able to get back on its feet quickly thanks to a commodities boom that was energizing its economy. But Ecuador must rebuild amid a deep recession that has forced austerity on the Organization of Petroleum Exporting Countries nation’s finances. To assist in the recovery effort, Ecuador plans to draw down on some $600 million in credit lines from the World Bank, Inter-American Development Bank and other multilateral lenders. Manta, a thriving port city, is among the areas hit hardest by the earthquake. Power cables lie in city streets and electricity remains out in many neighborhoods. Among the many building flattened by the shaking was a control tower at the airport that was home to US antinarcotics missions in South America until Correa kicked the Americans out. As humanitarian aid begun trickling in, long lines formed as people sought to buy bottled water. Many residents are sleeping outdoors in makeshift camps or in the street cuddled next to neighbors. Spain’s Red Cross said as many as 5,000 people might need temporary housing because of destroyed homes and 100,000 need some sort of aid. AP
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Wednesday, April 20, 2016
China extends controls on wealth of officials to Beijing and beyond
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hina will restrict private business activities of relatives of senior officials in Beijing and three other places, as the ruling Communist Party broadens its anticorruption drive and expands a Shanghai pilot program.
Restrictions initially imposed on officials in the financial hub last May will be extended to the municipalities of Beijing and Chongqing, as well as Guangdong province and the Xinjiang region, the official Xinhua News Agency reported, citing a decision on Monday at a meeting of the party’s leading group for reform chaired by President Xi Jinping. The Shanghai program set strict regulations over the business activities of senior officials’ family
members who previously received less scrutiny and allowed for various forms of corruption. T he tr ia l ’s ex pansion a lso came in the aftermath of the leak of the Panama Papers, which earlier this month disclosed offshore holdings of family members of eight serving or retired senior Chinese leaders. Regulating business activities of spouses and children of senior officials “is an important measure aimed at strictly managing the
party,” according to the statement. It did not provide much detail about what regulations would be applied in the four new locations but said they aimed at “setting clear boundaries” to control family members’ business operations. Under the pilot program in Shanghai, the husbands and wives of ministerial and provincial-level officials are prohibited from starting companies or getting involved in any business operations. Children of local officials and their spouses cannot conduct business within the municipality, which carries the same status as a province. The move is a further step in President Xi’s years-long drive to crack down on official corruption. Some of those cases revealed a pattern of officials amassing wealth through business dealings of family members. China has long sought to reign in rent seeking among top officials and their family members,
10
Number of Shanghai officials who were removed from posts or transferred to other departments since the rules were imposed a year ago but such directives generally lack specific penalties and have often been ignored. It’s not clear what sanctions can be used against those who violate the new rules, although the official China Daily newspaper said 10 Shanghai officials have been removed from
their posts or transferred to other departments since they were imposed almost a year ago. The so-called Panama Papers, disclosed earlier this month by news organizations affiliated with the International Consortium of Investigative Journalists, also detailed the overseas holdings of about 140 Chinese politicians, public officials and family members, including Xi’s brotherin-law, and family members of Liu Yunshan, the country’s top propaganda official, and Zhang Gaoli, a vice premier. China’s censors quickly removed any mention of Chinese links to the Panama Papers in social media and Internet sites accessible in China. Aside from one editorial assessing the leaks as likely to provide fodder to criticize non-Western nations, China’s state-run media has been largely silent and online searches related to the leaks have been blocked. Bloomberg News and AP
Japan quakes damage castle, unnerve tourists as deaths rise T ourist groups from China, South Korea, and Taiwan—the three biggest sources of visitors to Japan—have scrapped trips to the quake-devastated Kyushu region. Travel agencies are anticipating further cancellations. The blow to tourism coincided with Japan’s peak spring travel season, with carriers, including Korea’s Asiana Airlines Inc., Hong Kong Airlines Ltd. and China Airlines Ltd., canceling flights to Kumamoto after the southern prefecture was struck by a series of earthquakes since Thursday last week. The death toll had risen to 44 with more than a thousand people injured as of Tuesday morning, according to the Fire and Disaster Management Agency. At the 400-year-old Kumamoto Castle, ranked by Tripadvisor Inc. as No. 1 on a list of things to do in the prefecture, parts of the surrounding stone walls and ornate tiered-towers have collapsed. Built in 1601 by a feudal warlord, the site is one of the most famous castles in the country, according to the Japan National Tourism Organization. Standing near the castle on Sunday, Kumamoto resident Mitsuo Furuki mourned the damaged landmark. “It would take so much time to be rebuilt,” said the 63-year-old. “I came here just a week ago—what I see now isn’t what I saw then.”
Britons in France worry as ‘le Brexit’ fear looms large
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or Britons in France, the upper lip is stiff no more. Louise Garavaglia, who has lived in France for more than two decades, is rushing to apply for a French passport before the June 23 “Brexit” referendum in the United Kingdom and has no time for “wait and see.” For his part, Paris-based financial consultant Paul Johnson-Ferguson is getting birth certificates translated in time to apply for French citizenship. With just over two months to go before the referendum that will determine whether the UK stays in the European Union (EU), some of the estimated 1.2 million Britons like Garavaglia and Johnson-Ferguson living and working in the 27 other EU member states are worried about what a possible exit will mean for their status in the countries of their residence. Some are scrambling to ensure they don’t have to make life-changing moves. “There are risks you can’t afford to take when your family life and livelihood are at stake,” said Garavaglia, 47, in a phone interview. Married to a Frenchman, she has two Franco-British boys and owns a language school in Paris. “If the UK moves out of the EU, I may land up being treated like any other foreigner here, one just doesn’t know,” said Johnson-Ferguson, who has lived in MaisonsLaffitte, in the Western suburbs of Paris, since 1998. “I don’t particularly want to be French, but I’m risk averse so I’d rather hedge my bets.”
Privileges revised?
If the vote puts an end to 43 years of UK’s EU membership, Britons’ right to stay, work and access to pensions, health care and public services in the countries of the bloc will be among a long list of issues to be negotiated within a two-year delay set out by Article 50 of the EU treaty. If talks fail, those privileges may not be maintained, according to a UK government memo published on February 29. At a conference in London on Thursday, French Economy Minister Emmanuel Macron warned that leaving the EU would have consequences. It would make the UK “just like Hong Kong, Jersey or Guernsey, “ he said, adding ominously: “Leave the club and you’ll be alone.” Friday was the first day of official campaigning ahead of the June 23 vote, with some polls suggesting the outcome is too close to call. Individuals, like businesses, are trying to make sense of what, such as exit, might mean for them. The worry is perceptible among the large British communities in Spain, Ireland, France and Germany, the four EU members that, according to the United Nations, are home to the largest number of UK citizens, totaling about 852,000.
Dual citizenship
Tour cancellations
Hana Tour Services Inc., South Korea’s largest publicly traded tour agency, has canceled all its Kyushu tours up to April 22, and will waive charges for those who drop out until April 30, according to a spokesman. A branch of Beijing-based China International Travel Service Corp. has aborted Kyushu tours scheduled for April 21 and 29 and will offer refunds to those who cancel. “Tourism will be hit not just for that area but there will be a spillover effect on the rest of Japan, as well,” said Mariana Kou, an analyst at CLSA Ltd. “The average Chinese tourist won’t have a good knowledge of the geography of Japan, they will just feel that they should stay away from Japan for now.” Travel agency H.I.S. Co., which operates the Huis Ten Bosch theme park in Kyushu, rebounded as much as 6.3 percent on Tuesday after plunging 12 percent in Tokyo trading a day earlier. Japan travel web site Open Door Inc. rose 2.1 percent after closing down 4.8 percent, while China International Travel’s Shanghai-listed shares rose 0.5 percent after falling as much as 1.8 percent on Monday. Japan had seen a rebound in tourism since a bigger earthquake, which struck in 2011 and triggered a nuclear disaster in Fukushima prefecture. The travel boom has been a bright spot in an economy struggling to sustain growth, as the double-digit surge in visitors annually since 2011 boosted hotels, retailers and sales of everything from tour buses to contraceptives. China tourists made up the largest group of visitors to Japan, accounting for 5 million of the record 19.7 million who went to the country last year, according to the Japan National Tourism Organization. South Koreans
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Kumamoto Castle stands with its tiled roofs and stone walls partially damaged after a 6.5-magnitude earthquake in Kumamoto city, southern Japan, on April 15. Sadayuki Goto/Kyodo News via AP
placed second with 4 million, followed by Taiwan, which sent 3.7 million. Ctrip.com International Ltd., a Shanghai-based travel services web site, and Taiwan’s Life Travel and Tourist Service Co. said in separate statements they are temporarily suspending tours to the Kyushu region. Kumamoto’s airport reopened on Tuesday morning.
Japan stocks rebound
Japanese stocks rose, rebounding from the biggest drop in two weeks, as investors speculated the Bank of Japan (BOJ) may boost stimulus in the wake of a deadly earthquake. The Topix index climbed 3 percent to 1,359.20 as of 12:48 p.m. in Tokyo, recovering after Monday’s 3 percent loss. The Nikkei 225 Stock Average added 3.3 percent to 16,818.04 as volatility on the gauge declined after spiking 16 percent on Monday. The Dow Jones Industrial Average closed in New York at its highest since July 20 as oil pared losses that on Monday sparked a 1.5-percent
drop in the MSCI Asia-Pacific Index on Monday. “Things look terrible for Kumamoto in the short-term, but we’ll likely see more relief aid and stimulus to help them. It’s unlikely the Japanese economy will be hurt a lot from this,” said Kazuhito Suzuki, senior strategist at Shinkin Asset Management. “There was a knee-jerk element to on Monday move, but as US and European stocks were solid, today we’re seeing a sense of relief power a rebound.” Investors continued weighing the economic fallout from Thursday’s earthquake and subsequent aftershocks in southwestern Japan. The quake forced the closure of factories at companies such as Sony Corp. and Toyota Motor Corp., with one report estimating the automaker’s operating profit may decline by as much as ¥30 billion ($274 million).
Partial rebound
Shares of some companies which halted operations after the earthquake partially
recovered on Monday’s losses. Chipmaker Renesas Electronics Corp. rose 4.8 percent to pare Monday’s loss of 12 percent, while HIS Co., which operates a theme park in the area, added 4 percent after dropping 12 percent on Monday. Sony surged 5.9 percent, the most in two months, as concerns eased about its plant closing in the area. Speculation the BOJ may boost stimulus to combat economic fallout from the quake weakened the yen for a second day, with it trading at 109.05 per dollar. Exporters Honda Motor Co. jumped 3.8 percent and Mazda Motor Corp. surged 6.5 percent. BOJ Governor Haruhiko Kuroda said on Saturday it is hard to assess the economic impact of the earthquake and that he will monitor it closely. Prime Minister Shinzo Abe said on Monday in parliament he would consider speeding up a transfer of tax revenues to local governments and using surplus budget funds in response to the quake.
Research deals
Robotic suit-maker Cyberdyne Inc. jumped 6.5 percent after striking a research deal with a medical research agency. Sosei Group Corp. soared 11 percent after entering a pact with a London-based Kymab Ltd. to research antibody therapeutics. Shares of the Japanese drugmaker have more than doubled this year. Futures on the Standard and Poor’s 500 Index added less than 0.1 percent after the underlying gauge gained 0.7 percent on Monday as oil pared losses. The index is trading at its highest level since December 1 as it heads into a week where more than 90 companies are scheduled to report earnings, including Goldman Sachs Group Inc. After slumping on the failure of large oil producers to reach agreement to curb output, crude futures pared losses on Monday as a labor strike in Kuwait, Organization of Petroleum Exporting Countries’ fourth-biggest member, cut production for a second day. Bloomberg News
Garavaglia, worried she might not be able to return home to Paris from a holiday abroad, continue to freely travel to and from the UK or legally represent her company, passed the required French language test in February. She’s now busy getting legal documents translated to get French citizenship, usually a formality for long-standing residents, especially for those with a French spouse and children. “For many people, if you get dual citizenship you have no more difficulties,” said Christopher Chantrey, Chairman of the British Community Committee, a body which aims to represent British residents in France. “There is a huge amount of uncertainty.” Letters to the French administration and the British government seeking guidelines have gone unanswered, he said. Recent data on British requests for citizenship or long-term residency in France aren’t available, said a spokesman for the French Interior Ministry, who asked not to be named in line with government policy. Processing applications takes at least one year, she said.
Retirees worried
Spotting that British residents in the rest of the EU have more than a passing interest in the UK remaining in the bloc, the government has been urging them to register to vote. On its web home page, the British Community Committee has also posted an appeal to get UK citizens to protest against the fact that those who’ve resided outside the country for more than 15 years are barred from the poll. For many British retirees, who’ve been longtime residents in another EU country, a great deal is at stake. Take Brian Cave, 83, for example. He and wife moved 18 years ago to Gourdon, in the south of France, to find peace, quiet, natural beauty and cheaper real estate than back home. An activist for the rights of British pensioners living abroad, Cave says Brexit has become the most pressing issue for his group called Pensioners Debout!, or Pensioners on Their Feet. Bloomberg News
The World BusinessMirror
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briefs Obama: Top intel official reviewing secret 9/11 material
WASHINGTON—President Barack Obama says the top-ranking US intelligence official is reviewing classified material in a September 11 report that families of attack victims and some lawmakers are demanding be made public. Several members of the House and Senate, including House Democratic leader Nancy Pelosi, have joined 9/11 families in pressuring for declassification of 28 pages that are part of government documents compiled on the 9/11 attack amid speculation of a possible role by Saudi Arabia. Nearly 3,000 people were killed in the attack. In an interview with CBS’s Charlie Rose, Obama was asked if had read the 28 pages. “I have a sense of what’s in there,” he replied. Obama also revealed that James Clapper, director of National Intelligence, “has been going through this” to ensure that whatever is made public does not damage US national security interests. “My understanding is that he’s about to complete that process,” the president said. AP
Syria opposition backs away from Geneva talks 2,000 The number of times Syrian government has breached the cease-fire, the opposition alleged
Germany: 5 arrested for forming right-wing terror group BERLIN—Five people were arrested in Germany on Tuesday on suspicion of founding a right-wing terror group to attack refugee homes and other facilities, prosecutors said. Federal prosecutors said the “Freital Group,” named after a suburb of the eastern city of Dresden that has seen a string of antirefugee protests and other incidents, was formed in July last year or earlier. They said several apartments in the state of Saxony were searched alongside the arrests of the five German nationals—four men and a woman aged between 18 and 39. The group acquired more than 100 firecrackers of various types from the Czech Republic, prosecutors said in a statement. They said members are believed to have carried out three attacks in September and October—two on refugee homes in Freital and the other on a leftwing housing project in Dresden—in which windows were blown out and one asylum-seeker suffered cuts to the face. Prosecutors are looking into whether they were behind any further attacks. The suspects were identified only as Justin S., Rico K., Maria K., Sebastian W. and Mike S., in line with German privacy rules, as well as membership in a terrorist organization, they are also suspected of offenses including attempted murder, bodily harm and bringing about explosions. AP
Spain: Police nab Moroccan in Mallorca for I.S. links MADRID—The Police say they have arrested a Moroccan man with alleged strong links to the Islamic State (IS) armed group and who was pushing for attacks to be carried out in Spain and elsewhere in Europe. A statement said the man was arrested on Tuesday in Palma de Mallorca City on the Mediterranean island of Mallorca where he lived. It said the detainee poses “a clear threat to national security” given that he used the Internet to promote recruitment for IS, help send potential combatants abroad and encourage attacks in Spain and elsewhere in Europe. It said he maintained close contact with IS leaders in Syria. Spanish police have arrested dozens of suspected jihadi recruiters in recent years. AP
Taliban launches attack on Afghan govt security agency KABUL, Afghanistan—Armed militants in Afghanistan have staged a coordinated assault on a key government security agency in the capital on Tuesday morning, causing an unconfirmed number of fatalities and wounding more than 200 people. The Taliban has claimed responsibility. The attack, including a suicide car bombing, appears to have targeted an agency similar to the US Secret Service, providing personal protection for highranking government officials. Ismail Kawasi, spokesman for the Public Health Ministry, said, so far, 208 wounded people, including women and children, have been brought to area hospitals. An Interior Ministry statement said there have been fatalities but it was still unclear how many people were killed. AP
Migrant man and his wife, from Syria, prepare dough for bread to sell at the market, at the makeshift camp at the northern Greek border point of Idomeni, Greece, on Sunday. Some thousands of people have been stuck here for more than a month amid hopes that the border would reopen. AP/Amel Emric
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ENEVA—Syria peace talks ran into trouble on Monday, with the United Nations mediator saying the opposition has suspended its formal participation in the indirect discussions with President Bashar al-Assad’s government to protest “worrisome” new violence, especially near the northern city of Aleppo, and rising concerns about the humanitarian situation.
Staffan de Mistura, the UN envoy for Syria, said he would press on with the talks despite the suspension by the opposition High Negotiations Committee (HNC). The HNC said it would no longer attend meetings at the UN office in Geneva that has hosted weeks of on-and-off peace talks aimed ultimately at ending the country’s devastating five-year war. The HNC delegation will remain at their hotel in Geneva, and de Mistura said he will continue “technical” discussions with its envoys by
phone or off-site in hopes of firming up a blueprint for a political transition in Syria. He said he would “take stock” of progress toward that goal on Friday. The HNC, in a statement late on Monday, said it had asked de Mistura for a “brief hold in order to end the Assad regime’s truce violations.” De Mistura has repeatedly said that political transition—as called for under a UN Security Council resolution—is “the mother of all issues.” On Monday he acknowledged a “gap” between the two sides on that
issue: The HNC wants no role for Assad in any transitional government, and Assad’s envoys have proposed a “broad-based government.” The suspension came just hours after Syrian opposition fighters launched a new offensive against government forces in a number of northwestern areas. Rebel groups said attacks in rural parts of Latakia province, a government stronghold, were in retaliation for violations of a US and Russian-brokered cease-fire. De Mistura said the new fighting in parts of Syria, especially near Aleppo, was “particularly worrisome,” and said he expected that the United States and Russia—who are leading oversight of the truce—will hold a special meeting about it “if this trend continues.” In a statement, the Kremlin said Russian President Vladimir Putin and US President Barack Obama discussed the situation in Syria and agreed to increase coordination between the special services and militaries of the two countries. US State Department Spokesman John Kirby said the concerns raised by the opposition before pausing the talks are “concerns we share in terms of the lack of some sort of sustained delivery of humanitarian assistance and what are violations of the cessation of hostilities.” He added that, despite these violations, the cease-fire had reduced the overall level of violence in Syria. The HNC’s chief negotiator, Mo-
hammed Alloush, said the fragile cease-fire that started in late February “has effectively been ended by the regime.” He said government forces carried out 70 air raids on Sunday. Iran had sent in two new fighting groups to help reinforce Assad’s troops, and Russia has supplied Syrian soldiers with weaponry. “All this intervention gives a clear indication that the solution in Syria, with the presence of this regime, has become shut—or we have hit a wall,” he told The Associated Press (AP). In a telephone interview with AP, Khaled al-Nasser, a member of the opposition group, the Syrian National Coalition who is in close contact with the HNC, said “there is no intention to boycott the talks. We will not be responsible for the collapse of the negotiations. The regime will be.” The rebels said their offensive came in response to government attacks against refugee camps and residential areas. Different rebel factions shared videos of their fighters lobbing rockets at government positions in the Jabal al-Akrad area, close to the rebel-held northwestern province of Idlib. They claimed on social media to have gained ground. The Britain-based Syrian Observatory for Human Rights confirmed the rebels seized control of at least two areas and said al-Qaeda’s branch in Syria, the Nusra Front, is taking part in the fighting. Neither the Nusra Front nor the Islamic State group is included in the cease-fire. The cease-fire, which has been planned to help buttress the Geneva talks, had reduced violence across Syria despite alleged violations on both sides. The opposition says the government has breached the agreement more than 2,000 times. De Mistura has said that many Syrian civilians have felt positive effects from the truce overall. The cease-fire has held in most of Syria, except in the north, where it has practically collapsed. The Nusra Front is deeply rooted in the areas in northern Syria controlled by opposition forces, complicating the oversight of the truce. AP
Jordan halts plan to install cameras at Jerusalem holy site
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MMAN, Jordan—Jordan’s prime minister on Monday said his government has decided to call off a plan to install surveillance cameras at Jerusalem’s most sensitive holy site, derailing a United States-brokered pact to ease tensions at the volatile hilltop compound. The decision came just days before the Jewish holiday of Passover—a time of increased activity at the site. The spot is revered by Jews, who refer to it as the Temple Mount, and Muslims, who call it the Noble Sanctuary. It has been a frequent scene of violence in the past. In a deal brokered by US Secretary of State John Kerry, Jordan offered to install the cameras last fall after clashes between Palestinian protesters and Israeli security forces. The Palestinians had accused Israel of secretly plotting to take over the site—a charge Israel strongly denies—while Israel pointed to videos showing Palestinian protesters using the mosque as cover while throwing stones and firecrackers at police. The idea was that transparency by both sides would help ease tensions. But the plan quickly ran into trouble, with the Palestinians objecting to Israeli demands to place cameras inside the mosque. The Palestinians also said that Israel
Palestinian men pray at the Al-Aqsa Mosque compound during the Muslim holy month of Ramadan in Jerusalem in July 2015. AP/Mahmoud Illean would use the cameras to spy on them. Jordan’s prime minister, Abdullah Ensour, told the state-run Petra News Agency that Jordan was calling off the plan due to Palestinian concerns. “We were surprised since we announced our intention to carry out the project by the reactions of some of our brothers in Palestine who were skeptical about the project,” he said. “We have found that this project is no longer enjoy-
ing a consensus, and it might be controversial. Therefore, we have decided to stop implementing it.” The Jordanian decision could deal an embarrassing blow to Kerry, who had hailed the deal when it was announced last October and pushed behind the scenes in recent months for the sides to wrap it up. In Washington State Department Spokesman John Kirby said it’s “unfortunate” that Jordan decided to call off the
plan to install the surveillance cameras. He could not say whether Kerry had any plans to revisit the idea with Jordanian authorities. “We still see the value in the use of cameras,” Kirby told reporters. “I can’t tell you at this time that we’re going to you know, be assertive in terms of trying to have it revisited,” he said. “But it doesn’t mean that we’ve changed our minds with respect to the value of that as a tool to increase transparency.” There was no immediate reaction from Israel. But the Palestinian minister for Jerusalem affairs, Adnan Husseini, said, “I think it’s a wise decision and we are with any decision taken by Jordan, I think Jordan studied the issue wisely and took all the issues into consideration until they reached this wise decision.” The site is revered by Jews as the location where the biblical Temples once stood. Today it is home to the Al-Aqsa Mosque, the third-holiest site in Islam. Under a decades-old arrangement, Jews are allowed to visit the site, but not pray there. Increased visits to the compound last fall by Jewish nationalists, coupled with some restrictions on Muslim access, set off clashes that quickly escalated into months of violence across Israel and the West Bank. AP
news@businessmirror.com.ph
Boko Haram still a threat
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AROUA, Cameroon—Here on the front line against Boko Haram, no one boasts of having “technically” won the war. More than four months after Nigerian President Muhammadu Buhari made such a claim, the extremists still crisscross international borders, avoiding direct confrontations with US-backed African forces while refocusing on soft targets, like marketplaces and mosques, with little to no protection. The group may be gone from major cities, but in the countryside it poses a constant threat. And for the hundreds of thousands of refugees and impoverished villagers surrounded by fighting in the isolated northern reaches of Cameroon, terror and hunger form daily challenges to their survival. “All of you who are attempting to fight this terror, the United States stands with you,” said Samantha Power, America’s UN ambassador, making a rare visit by any foreign dignitary, let alone a US Cabinet member, to this parched, dusty landscape dotted by thatched-roofed huts and meandering goats and donkeys. Underscoring the insecurity, Power traveled with a large contingent of US and Cameroonian special forces. A Cameroonian helicopter monitored overhead. But in a tragic accident, an armored jeep in Power’s motorcade stuck a 7-yearold boy who darted onto the road, killing him instantly. She traveled back to the scene of the incident several hours later to offer her condolences to his parents and “our grief and heartbreak.” Power’s larger goal of pairing military efforts with greater development of West Africa’s impoverished, Boko Haramravaged regions is daunting. They’ve suffered generations of neglect. In Maroua, an enclave some 800 miles from the Cameroonian capital sandwiched between Chad and Nigeria, shortages of water, schools and investment are chronic. Activists, opposition politicians and Muslim clerics say the extremists will draw Maroua’s disaffected youth to their ranks as long as economic opportunities are limited and security forces continue committing indiscriminate atrocities, while trying to stamp out the insurgency. Military force must be part of the counterterror effort, Power told reporters. “They have guns. The have suicide vests. They have armored vehicles,” she said. But Power said targeting civilians is self-defeating because doing so only creates more potential recruits, echoing counterinsurgency lessons the United States learned the hard way in Afghanistan, Iraq and elsewhere since the September 11, 2001, attacks. Excessive military force is a problem that appears ubiquitous in the region. In its flagship Human Rights Report released last week, the State Department chided Nigerian forces for killings, torture, rape, arbitrary detention, prisoner abuse and destruction of property while countering Boko Haram. One Nigerian state government recently acknowledged burying hundreds of minority Shiite Muslims in a mass grave after they were killed in army raids. Pushed from population centers by Nigeria’s military since Buhari’s election last year, Boko Haram is changing its tactics. It launched 159 suicide bombings last year, more than half in Nigeria, increasingly using girls to set off the explosives. The consequence has increased suspicion even on children And buoyed by its alliance with the Islamic State, Boko Haram is employing increasingly slick messaging—as evidenced in some recent videos. As of now, however, US officials aren’t sure about how deep the operational links between the two groups run. The war against Boko Haram has killed, perhaps, 20,000 people in this decade, and possibly far more. Some 2.4 million are displaced throughout the region. More than 60 percent of these are children. Millions more face dire food shortages. Boko Haram, which espouses an extreme form of conservative Islam, also has kidnapped and raped hundreds of girls. These include more than 200 they still hold two years after seizing them from their school in the town of Chibok, drawing worldwide condemnation. Power met with one such child at the Minawao refugee camp, which currently houses almost 60,000 people. It was designed to host 20,000. Less than 50 miles away, Boko Haram’s fighters hide in the wilderness. AP
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Wednesday, April 20, 2016
The World BusinessMirror
Sierra Nevada’s eastern front long overdue for quake
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ENO, Nevada—Scientists say the Sierra’s eastern front is long overdue for a large earthquake along the CaliforniaNevada line, where a 7-magnitude event expected on average every 30 years hasn’t occurred in six decades.
Nevada Seismology Laboratory Director Graham Kent says the region’s earthquake “drought” is likely one of the sources of a public misconception that it is at a low risk of experiencing a serious earthquake. He planned to discuss details about the latest research on Tuesday during an Earthquake Economic Resiliency Forum ahead of the Seismological Society of America’s annual meeting running on Wednesday to Friday in Reno. Kent said a 6-magnitude earthquake or larger typically strikes every 10 years or so along the Sierra Nevada frontal fault system running from south of Yosemite National Park to north of Reno and Lake Tahoe. There were seven 6.5-magnitude or larger in the region from 1915 to 1954, but none since, he said. The last 6-magnitude was 22 years ago in the Carson Valley south of Carson City. The Federal Emergency Manage-
10 yrs Frequency of 6-magnitude earthquake that occurs along the Sierra Nevada fault system ment Agency estimates a 6-magnitude quake could cause up to $1.9 billion in damage in the RenoSparks area and $590 million in the populated area of South Lake Tahoe, California, Kent said. “Let’s take advantage of this extraordinary quiescent period in our earthquake history,” Kent said. “We have a great opportunity to bring experts together with our community—those who need to put plans in place not only for disaster response but, just important, a plan
Australian leader plans to call rare early election
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YDNEY—Australia’s prime minister said on Tuesday he expects to call a rare early election, with the nation likely to head to the polls in July amid waning popularity for the ruling conservative party. Prime Minister Malcolm Turnbull’s comments all but confirmed that Australia was on track to hold its first early election—called a “double dissolution” because both the House of Representatives and the Senate are dissolved— since 1987. Turnbull, whose administration is scheduled to deliver its first annual budget to Parliament on May 3, has until May 11 to officially announce an early election. He had previously said he would call for a double dissolution if the Senate failed to pass government legislation that would create a construction industry watchdog. The Senate rejected the bill for the second time on Monday, providing the trigger Turnbull had been waiting for. “My intention is after the budget, at an appropriate time after the budget has been delivered, I will be asking the governor-general to dissolve both houses of the parliament for an election which I expect to be held on the second of July,” Turnbull
told reporters. A typical election, in which the entire House of Representatives and half the Senate go to the polls, can be held any time from August 6 until January 14, 2017. A double dissolution can be called earlier to break a legislative deadlock after the Senate has twice rejected a bill passed by the House. Turnbull’s move comes shortly after an opinion poll showed the government trailing the opposition party for the first time since he took over as leader last year. The Newspoll published in The Australian newspaper earlier this month found that support for Turnbull’s conservative coalition was behind the center-left Labor Party 49 percent to 51 percent. The poll was a blow to the ruling party’s confidence as it prepares to campaign for a second three-year term in office. The coalition was lagging behind Labor in opinion polls for more than a year until Turnbull replaced the unpopular Tony Abbott as prime minister in September in a bid to boost the party’s ratings. The government did see an immediate boost in popularity under Turnbull, but the recent Newspoll shows his honeymoon with voters may be ending. AP
Taiwan protests ejection from OECD steel talks, blames China
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EIJING—Taiwan says its delegation was ejected from a meeting of the Organization for Economic Cooperation and Development’s (OECD) steel committee after China complained, part of an apparent hardening of Beijing’s attitude toward the island it claims as its own territory. Taiwan is only an observer rather than a member of the OECD due to China’s campaign to isolate it diplomatically. It was participating as a dialogue partner in the meeting held on Monday in Belgium to discuss excess steel capacity. However, the Chinese delegation demanded the Taiwanese leave because the delegates’ ranks were not senior enough,
Taiwan’s official Central News Agency (CAN) said on Tuesday. CNA cited Foreign Ministry Spokesman Eleanor Wang as saying that claim wasn’t valid because Taiwan had participated in previous meetings at the same level and in the same capacity. “Strong protests” had been lodged against China, Belgium and the OECD over the ejection, CNA said without giving details. Taiwan and China recently disagreed over Kenya’s deportation of 45 Taiwanese wire fraud suspects to China, with Taiwan saying Beijing had violated a tacit understanding under which both sides agreed not to interfere in the legal affairs of their citizens abroad. AP
for quick economic recovery.” The experts are gathering in Nevada days after powerful earthquakes killed hundreds of people in Ecuador (7.8 magnitude) and killed dozens and wounded thousands in Japan (7.1 magnitude). Scheduled speakers on Tuesday include Dick McCarthy, executive director of the California Seismic Safety Commission, and Cory Lyman, director of the Salt Lake City Emergency Management’s “Fix the Bricks” program. The largest earthquake ever recorded in the Sierra fault system was a 7.4 magnitude in 1872 in Owens Valley south of Yosemite National Park. It’s still the third largest in California history, behind the 7.9 magnitude at Fort Tejon in 1857 and the 7.8 magnitude in San Francisco in 1906. More recent studies of the fault lines and damage suggest the Owens Valley quake was probably bigger than the one in San Francisco, Kent said. The Seismology Laboratory at the University of Nevada, Reno chronicled the event in its March newsletter with historical excerpts from naturalist John Muir, who wrote about the violent shaking while at Yosemite. “I ran out of my cabin near the Sentinel rock, both glad and frightened, shouting, ‘A noble earthquake!” Muir wrote. “The shocks were so violent and varied and succeeded one another so closely, one had to balance in walking as if on the deck of a ship among the waves.” AP
AP wins Pulitzer for stories on enslaved fishermen in Asia
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EW YORK—The Associated Press won the Pulitzer Prize for public service on Monday for documenting the use of slave labor in Southeast Asia to supply seafood to American tables— an investigation that spurred the release of more than 2,000 captive workers. The Los Angeles Times was awarded the breaking news prize for its coverage of the shooting rampage by husbandand-wife extremists that left 14 people dead in San Bernardino, California, and The Washington Post received the national reporting award for an examination of killings by police in the United States. Besides recognizing some of the biggest national and international stories of the year, the awards spotlighted deep dives into a chilling rape case, the long arc of school segregation and the mistreatment of psychiatric patients. The New Yorker was honored in the criticism and feature writing categories, which only recently were opened to magazines. The New York Times won for international reporting for detailing the plight of Afghan women, while the Times and Thomson Reuters both took the breaking news photography prize for images of refugees. The Times’s reporter on the Afghan story, Alissa J. Rubin, said she was “overwhelmed” to see the work recognized. The Boston Globe also won two awards: the feature photography prize for pictures showing the life of a poor, 6-year-old boy who survived a horrific beating by his mother’s boyfriend, and the commentary award for Farah Stockman’s work on the legacy of school busing in the city. The Tampa Bay Times and the Sarasota Herald-Tribune received the investigative reporting prize for demonstrating that years of budget and staff cuts and overall neglect had resulted in a dramatic uptick of violence in Florida’s mental hospitals. The Tampa Bay Times also won in local reporting for detailing the harmful effects of ending school integration in Pinellas County, Florida. AP
news@businessmirror.com.ph • Editor: Lyn Resurreccion
Britain’s Queen Elizabeth II, then Princess Elizabeth (right), enjoys a joke with her father King George VI on the grounds of the Royal Lodge, Windsor, England, in this August 20, 1946, photo. Britain’s Queen Elizabeth celebrates her 90th birthday on Thursday. AP
Queen Elizabeth II to mark 90th birthday at Windsor Castle
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ONDON—The longest-reigning monarch in British history turns 90 on Thursday, but Queen Elizabeth II is not planning a major, fireworks-filled celebration to mark the happy occasion. Just a gentle stroll outside the grounds of Windsor Castle, the lighting of a beacon and a night at home with family are all that are on the royal plate. No, she’ll save the pomp and ceremony for her next birthday. The monarch is such an eminent figure in British life that she gets two birthdays each year, one on the actual date of her birth, April 21, and one official birthday in June, when there is at least a reasonable hope of dry, sunny parade weather. Her customary reticence hasn’t kept the nation’s media from going slightly bonkers at the approaching milestone. ITV has already aired a celebratory Our Queen at 90 documentary to pump up its Easter ratings, and Tatler magazine not only put the queen on its cover, foregoing the youthful socialites that are its typical cover fare, but published a special supplement in her honor. The birthday events on Thursday can be considered a dress rehearsal for the official celebrations planned in early June. It also opens the door to a rolling birthday season that will last a full six weeks, climaxing with hundreds of celebrations large and small. “June is when everything is happening. That’s the great big extravaganza, the street parties and everything,” said Sophia Money-Coutts, Tatler’s features director. “From now on, the coverage will be relentless. The republicans will be screaming.” Indeed, it’s not a good time for those who oppose the monarchy to peek above the parapet. The British public’s considerable affection for the queen surfaces at times of national celebration—witness the millionplus crowd that cheered her outside the Buckingham Palace gates at her
Golden Jubilee in 2002. The queen and the royals have endured some low points in the last two decades, particularly around the time of the death of Princess Diana in 1997, but their popularity has rebounded with the marriage of Prince William to Kate Middleton and the arrival of their two children, Prince George— now third in line to the throne—and Princess Charlotte. “It’s just a golden moment for the whole family after a tricky few years,” Money-Coutts said. “And the queen is the figurehead of all that, with the line of succession pretty assured. They are going through a glorious period.” Elizabeth—with her familiar smile, colorful outfits and eccentric if expensive hats—seems oddly impervious to time. If she is tired, it doesn’t show. She has softened her schedule, as a concession to 89 and counting, and she has cut back on grueling plane journeys, but she shows no sign of physical or mental frailty. Neither does her 94-year-old husband Prince Philip, despite several serious health scares that included a medical intervention to open clogged heart arteries. His face is craggy, but he still carries himself with the upright bearing of the former naval officer that he is. Both still seem to be going strong, although their children and grandchildren are increasingly stepping in to handle royal duties ranging from the routine, like opening a hospital ward, to the more substantial, such as attending a meeting of Commonwealth heads of state. Elizabeth and Philip say little in public, but the ITV documentary was revealing about the family dynamics because William, Kate and Prince Harry all spoke about the queen, breaking the normal code of silence that governs their relations with an often intrusive news media held responsible by some for cruely hounding Diana in the final months of her life. William, who lost his mother
Diana when he was just 15, said the queen had helped him in subtle ways by providing stability and encouraging him to find his own footing. “Growing up, having this figurehead, having this stability above me has been incredible,” he said. “I have been able to explore, understand, slightly carve my own path. I greatly appreciate and value that protection.” Kate, a likely future queen who stepped into the limelight when she and William fell in love in their university days in Scotland, praised Elizabeth for making it easier for her to cope with the constant attention her position brings. “I feel she’s been there, a gentle guidance really for me,” she said. The milestone 90th birthday is a happy occasion, one the queen is willing to acknowledge and share with the nation. It was different last September when— by virtue of her father’s early death and her own longevity—she surpassed Queen Victoria to earn distinction as the British ruler with the most time on the throne. While the British press went gaga over her accomplishment, it seemed that for Elizabeth it was a somewhat painful reminder that her father, King George VI, had died suddenly at age 56, making her queen far earlier than had been expected or desired. She was on vacation in Kenya at the time, having left Britain as a princess and returning as a queen in mourning, greeted at the airport by Winston Churchill, the first of many prime ministers. The queen may be reluctant to make a great fuss over her 90th birthday, but there is little doubt her favorite time of year is approaching. For June means not only her official birthday, and the gala Trooping The Color parade that accompanies it, it also brings the Royal Ascot races that are a highlight of the queen’s year, and other races and racing-related events dear to her heart. AP
A10 Wednesday, April 20, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
A word to duopolistic telecom companies
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s news continue to trickle in on our telecommunications predicament, we are astounded at the corporate duplicity on the true state of the telecommunications industry in our country.
Until updated by the failed entry into the business of the Australian Internet service provider Telstra Corp. Ltd., we did not know that the two incumbent providers in the Philippines—Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc.—have been delivering to us one of the most mediocre Internet services in the world, while assuring us through highfalutin verbiage that we were advanced in the field. We took pride in being described as one of the texting-est people in the world, not realizing that we were being “used” to conceal corporate mediocrity. One of the reasons Telstra’s partnership with San Miguel Corp. (SMC) did not push through was its fear that the duopolistic incumbents would insist on fragmenting the 700-megahertz (MHz) spectrum now assigned to SMC. True enough, shortly after the announcement of Telstra’s potential entry into the Philippine telecommunications market, the duopolists moved to pressure the National Telecommunications Commission (NTC) to reallocate the 700MHz spectrum. As expected, Globe and PLDT justified their renewed interest in the reallocation by appealing to improved customer service. Harrumph! So much for PR spin. An independent researcher on information and communications technology, Mary Grace Mirandilla-Santos, has something to say on the matter: “Other countries that have fast and reliable Internet connection speeds do not necessarily operate on the 700-MHz band…the issue of the spectrum is overshadowed by the problem of congestion. What the local telcos need to address is the problem of congestion. Are there enough cell sites to service the growing number of mobile broadband subscribers?” In a later commentary, Mirandilla-Santos said “new players find it very difficult and costly to enter what is clearly a profitable market, [because] there are barriers that help maintain the status quo and benefit existing market players.… The two incumbents are ready to pull commercial and political strings to stop the entry of new competitors.” According to Globe’s own data, there are about 15,000 cell sites in the Philippine archipelago. This is far fewer than those in our peers in Asia. In this connection, Trade Undersecretary Prudencio M. Reyes is quoted as saying that the slowness and costliness of Internet service is the main factor behind the slow growth of e-commerce as a platform for growth of our country’s micro, small and medium enterprises (MSMEs). Department of Trade and Industry (DTI) says right now only 10,000 MSMEs are online. The DTI is targeting that 100,000 MSMEs will migrate into e-commerce in four years. Thus, it is calling for more investments in telecommunications infrastructure. We do not know how the NTC will act on these issues. Our unsolicited advice is to bring foreign telcos into the Philippines and take heed of the recommendations of the telco expert. We must escape from the bottom of the telecoms pit where the duopolists have condemned us.
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Enrollment to the SSS Peso Fund made easier Susie G. Bugante
All About Social Security
S
tarting April 15, 2016, Social Security System (SSS) members who wish to save more for their retirement through the SSS Personal Equity Savings Option (Peso), a provident-fund scheme that aims to increase savings among members, may now enroll in the program through the Web. At their own time and convenience, members may register via the My.SSS web site and click the “e-services tab.” A confirmation will be sent to their e-mail once the registration is successful. Enrollees may start paying their contributions once enrolled online. But they are required to go to any SSS branch to confirm their enrollment. Nonconfirmation will not allow the member to withdraw his or her equity or apply for any benefit. It can be recalled that the SSS Peso Fund was first launched in September 2014 as an alternative and tax-free investment that would help members accumulate adequate
HOM
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Rizal Street, Dagupan City CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001 n DXQM – 98dot7 HOME RADIO DAVAO E-MAIL ADDRESS: home98dot7@gmail.com ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996 n DXQS -98dot3 HOME RADIO GENERAL SANTOS E-MAIL ADDRESS: homegensan@yahoo.com ADDRESS: 2nd Floor, Penamante Clinic Tiongson Street, General Santos City CONTACT NO.: 0922-811-3998 n DYQN -89dot5 HOME RADIO ILOILO E-MAIL ADDRESS: homeiloilo@yahoo.com
ADDRESS: 3rd Floor, Eternal Plans Building, Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995 n DWQA -92dot3 HOME RADIO LEGAZPI E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal Street, Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992 n DWQJ -95dot1 HOME RADIO NAGA E-MAIL ADDRESS: homenaga@yahoo.com ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993
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upon receipt of the first contribution. Succeeding SSS Peso Fund contributions can be made anytime, as long as there is a corresponding regular SSS contribution for the month. Self-employed, voluntary and overseas Filipino workers members are qualified to join the program, provided they are contributing based on the maximum salary credit under the regular social-security program. Savings in the SSS Peso Fund are invested in sovereign-guaranteed investments, where 65 percent of the total fund is allocated for retirement, and 35 percent is for medical and general purposes. The portion for retirement is guaranteed to earn
income based on interest rates of five-year Treasury yields, while earnings of the fund allotted for medical and general purposes will be based on 364-day Treasury bill rates. Aside from guaranteed earnings, SSS Peso Fund members may also get excess earnings, which will be credited automatically to their accounts, depending on the actual year-end performance of the SSS Peso Fund. Savings in the SSS Peso Fund can be withdrawn upon the member’s effective date of retirement or total disability with the SSS, either in monthly pensions over a minimum period of 12 months and P1,000 payment per month, in lump sum, or combination of both. For more details on the SSS Peso Fund online registration, call the SSS hot line at 924-6446 to 55 or e-mail member_relations@sss.gov.ph.
For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS Call Center at 920-6446 to 55, which accepts calls from 7 a.m. on Mondays, all the way to 7 a.m. on Saturdays. Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send comments about this column to susiebugante.bmirror@gmail.com.
Are you paying more than ₧625 for one-year coverage of CTPL insurance? Atty. Dennis B. Funa
BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.
income in retirement and earn a reasonable rate of return. The SSS Peso savings can be used to supplement the benefits available under the regular SSS program. It offers guaranteed earnings based on rates higher than those offered by regular financial institutions. It is open to all members below the age of 55, with six consecutive SSS contributions within the last 12 months prior to enrollment, and who have not yet filed final claims with the SSS. Qualified members can participate with a minimum contribution of P1,000 up to a maximum of P100,000 per year. One’s membership will start
The SSS Peso savings can be used to supplement the benefits available under the regular SSS program. It offers guaranteed earnings based on rates higher than those offered by regular financial institutions. It is open to all members below the age of 55, with six consecutive SSS contributions within the last 12 months prior to enrollment, and who have not yet filed final claims with the SSS.
INSURANCE FORUM
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private-vehicle owner should pay no more than P625.40 for a Comprehensive Third-Party Liability (CTPL) insurance. Premium rates for CTPL insurance policies are highly regulated. The price is the same for all private vehicles all over the country. No insurance company should charge more than the amount fixed by the Insurance Commission (IC). If you are being charge more than this amount, then the insurance agent is committing the crime of estafa for which you have the legal right to file a criminal complaint with the nearest police precinct.
There are seven vehicle classifications with different CTPL insurance premiums. These classifications and the corresponding CTPL premiums are: 1) private vehicle—P625.40; 2) light and medium trucks (not over 3,930 kg)—P675.40; 3) heavy trucks (over 3,930 kg)—P1,265.40; 4) tourist cars—P805.40; 5) taxis, public utility jeepneys and minibus—P1,165.40; 6) public utility bus and tourist bus—P1,515.40; and 7)
motorcycles, tricycles and trailers— P315.40. There are six ingredients that go into determining the total premium payable. These are: 1) the basic premium as computed by the IC; 2) the documentary-stamp tax, which is at 12.50 percent; 3) the expanded valued-added tax (E-VAT); 4) the local government tax; 5) the Stradcom fees; and 6) the authentication fees. Pursuant to Insurance Memoran-
dum Circular 4-2006, dated July 26, 2006, the total premium (for oneyear coverage) for 1) private vehicles is P560; 2) for light and medium trucks, P610; 3) for heavy trucks, P1,200; 4) for tourist cars, P740; 5) for taxis, PUJs and minibus, P1,100; 6) for PUB and tourist bus, P1,450; and for 7) motorcycles, tricycles and trailers, P250. These amounts are the sums of the basic premium (pegged by the IC), the documentary-stamp tax (fixed at 12.50 percent) and E-VAT (fixed at 12 percent), and the local government tax (LGT), which varies depending on the local government unit, but has been fixed at a maximum of 0.75 percent. To be added to the total premium is the Stradcom Fees, which has been fixed at P50.40. Also to be added is the authentication fees imposed by the Philippine Insurers and Reinsurers Association (Pira) and the Organization of Insurance Companies of the Philippines (OICP). The Pira authentication fee is P14.46, while the OICP authentication fee is P15. The total of these fees is fixed and cannot be increased further without violating the
Insurance Code. It should be noted that a “private vehicle” covers both sedan and sport utility vehicles, and both vehicles should cost no more than P625 in CTPL insurance. In this regard, Pira has issued Pira Circular 006-2007, dated January 10, 2007 on the sample computations of CTPL premiums. The basic premium pegged by the IC is also already inclusive of the agent’s commission. Under Circular Letter 10-2003, dated December 3, 2003, nonlife-insurance companies were reminded “to adhere to the 10-percent commission rate for CTPL business as prescribed in the Insurance Code.” This is pursuant to Section 400 of the Amended Insurance Code. Likewise, only 10 percent of the premiums must be allocated for marketing expenses, to be taken from the basic premium. The Stradcom fee is the sum of the basic fee of P45 plus the 12percent VAT. Atty. Dennis B. Funa is currently the deputy insurance commissioner for legal services of the Insurance Commission. E-mail address: dennisfuna@yahoo.com.
Opinion BusinessMirror
opinion@businessmirror.com.ph
Wednesday, April 20, 2016 A11
Next govt must reallocate tax spending for inclusivity Michael Makabenta Alunan
on the contrary
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nclusivity, or the lack of it, has been the buzz word lately to describe why poverty has not dropped substantially, unlike those of our Asian neighbors, despite the fact the Philippines recorded the highest robust economic growth. Philippines has the worst tax system? One reason is the onerous and tedious tax system that is not only posing a burden on the poor, but also on businesses, thus, deterring growth that creates jobs and better incomes for the poor. A Price Waterhouse Coopers (PwC) study noted that it takes 193 hours for a businessman in the Philippines to pay 36 kinds of fees and taxes per year. A Philippine employer pays an average of 42 percent in income-tax rate and related fees, which is 6 percent higher than the average tax rate in the Asia Pacific. However, let’s reserve discussion on our onerous tax system, but focus here on how taxes are allocated. Currently, 60 percent of taxes is kept for national spending and 40 percent for local government units (LGUs) through the internal revenue allotment (IRA), which is distributed as follows: 23 percent for provinces; 23 percent for cities, 34 percent for municipalities, and the 20-percent balance for barangays. After the allocation by LGU class, the share of each province, city or municipality is based on population, 50 percent; land area, 25 percent and equal sharing among the same LGU class, 25 percent. IRA lopsided in favor of cities. The problem with this allocation criteria is that it does not necessarily address directly the millennium development goals (MDGs) of eradicating poverty and hunger, with targets of decreasing by 50 percent both poverty and hunger by 2015 from their 1990 levels. The criteria are simply lopsided in favor of bigger cities. For one, while municipalities get more or 34 percent of total IRA for LGUs, compared to 23 percent for cities, the latter get more as there are less than 100 cities, which share in their allocation as against over 1,000 municipalities sharing their allotment. Thus, many municipalities want to convert into cities, which the latter blocked, fearing it will affect their share of the pie. Second, although population must rightfully be considered a vital factor, on the contrary, it has effectively reinforced the wide rural-urban poverty gap. Cities being naturally congested with bigger populations, which attract businesses and resulting more taxes, receive even bigger IRA allocations, which they do not really need. Divert wasteful spending to countryside. Cities, being trading hubs, which attract businesses and property development that lead to bigger local tax revenues, have become financially strong enough to even afford to adopt provincial towns and cities, like Makati’s 300 sister LGUs. Quezon City, with the biggest revenue of P16 billion a year, can spend lavishly on inanities and wasteful unnecessary expenditures, like demolishing road islands and replacing them with fancy high-rise islands with initials of its mayor engraved on them. This is grossly unfair as many towns can’t even build decent farm-tomarket roads, water systems and other infrastructures. These big cities do not need IRA budgets as these only account for 20 percent to 40 percent of their total revenues, unlike small towns which totally depend 90 percent to 95 percent on their IRA for their survival. And yet, two-thirds of those living in poverty are based
The bigger problem is the fact bigger cities benefit thrice from the lopsided allocations. Firstly, being regional centers and very likely more influential, cities easily become main beneficiaries of national projects like national roads, thus allowing them to save on such expenditures. Secondly, having bigger populations and land areas, they get the lion’s share of IRA budgets. Thirdly, as magnets of businesses and property development, they generate much more in business and real estate taxes. in the countryside, as no opportunities are developed owing to the lack of rural infrastructures and basic services. Cities already benefit thrice. The bigger problem is the fact bigger cities benefit thrice from the lopsided allocations. First, being regional centers and very likely more influential, cities easily become main beneficiaries of national projects, like national roads, thus, allowing them to save on such expenditures. Second, having bigger populations and land areas, they get the lion’s share of IRA budgets. Third, as magnets of businesses and property development, they generate much more in business and realestate taxes. Last, cities, particularly in Metro Manila, are where big businesses register and pay their taxes, even if actual operations, like mining and agriculture, are based in the rural areas. Reallocate tax proceeds. This brings me to my friend Voi Aguilar’s suggestion that the bulk of taxes of these businesses be spent back in the countryside, from where they were generated anyway in the first place. Aguilar adds that individuals, who hail from the provinces but are working in the cities, must be given the option to declare that sizeable proceeds of their taxes be spent in the regions they came from. Even the 60-percent automatic national allocation must be reviewed by legislators as this simply means 60 percent of taxes generated in the rural areas are siphoned out towards the national government in NCR. This capital flow must be reversed, as statistics show that NCR’s poverty incidence is only 3.8 percent in 2012 as against 68.8 percent in Lanao Sur, 59.8 percent in Kalinga-Apayao, 57.8 percent in Maguindanao, and 59.4 percent in Eastern Samar, etc. Moreover, insurgency and Muslim extremism abound where poverty is at its worst, which means development is key and not military action. (See related column entitled P-Noy’s BBL and Lincoln’s railway economics) on how Lincoln pursued his railway development, and was not distracted by the American civil war. Our rural poverty is three times that of Asean neighbors, as they have reduced poverty substantially with Vietnam alone, reducing poverty from 60 percent to 20 percent in only 20 years. We can do the same by reallocating resources to where they are needed most—in the countryside. E-mail: mikealunan@yahoo.com.
Bad supervision or no supervision By Matt Levine | Bloomberg View Conclusion
Banks
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lot of people are pretty worked up about all the banks whose “living wills” were rejected by regulators this week. The trick to staying calm, I find, is to remember that the living wills have nothing to do with whether banks are too big to fail: There’s a whole separate regulatory process to allow them to fail outside of the bankruptcy/living-will regime, and anyway the wills are so conditional and uncertain, that a passing or failing grade says almost nothing about a bank’s likely outcomes in bankruptcy. The wills are an interesting exercise in focusing bank executives’ attention on liquidity and risk and careful operational planning, but they have nothing particularly useful to teach us about bigness or systemic risk. But here is Jeff Spross arguing that they tell us that “DoddFrank should have been stupider,” which is a fairly common but, as far as I can tell, completely ungrounded view about modern regulation. It would be a nice world if all complex problems had simple solutions but, I mean, it took millions of lines of code and a massive global telecommunications network built up over decades for you to be able to read the words that I am typing now. Lots of simple problems have complex solutions! I am more in sympathy with Peter Eavis’s view that the opaque and uncertain living-will process is intended to unsettle bankers and prevent them from gaming the system, and with Mike Konczal’s view that complex modern financial regulation requires technocratic regulators. Hillary Clinton and Bernie Sanders also have views. Meanwhile, if the banks are too big to fail, they’re getting smaller. Or at least cheaper. At Goldman Sachs, for instance, “they are getting even leaner”: The firm, already expected to report a steep drop in expenses for the first quarter, recently began dismissing more support staff and is increasingly rejecting bankers’ spending on airfare, hotels and entertainment unless it directly serves clients, the people said. For example, the company cut technology workers in London this week, one person said, and some employees in Europe aren’t being permitted to take onceroutine trips to other offices in the region, said another. Additional cuts are likely. Similarly, “Bank of America Corp. sees more room for cost cuts after bigger-than expected reductions in the first quarter helped blunt declines in profit and revenue,” and “BNP Paribas SA plans to eliminate as many as 675 positions at its French investment-banking division.” It is no fun, though there is “One Bright Spot for Bank Trading: Rates.”
Also Citigroup reported earnings today, with earnings per share of $1.10, beating estimates of $1.03. Here are the press release and thesupplement.
SunEdison
SunEdison, the solar company once beloved by hedge funds for its combination of clean technology and financial engineering, has had a rough time recently. Here is a good story by Liz Hoffman covering SunEdison’s entire arc, from its humble beginnings as a silicon parts company, through its solar empirebuilding and the formation of “yieldcos” to buy projects that it built, to its current liquidity crunch and awkward yieldco controversies. The yieldcos, TerraForm Power and TerraForm Global, are public companies controlled by SunEdison, and when SunEdison needed money to pay off a margin loan (on TerraForm Power shares), it asked TerraForm Global to pay $231 million for a project in India that SunEdison was developing. TerraForm Global’s independent directors rejected the deal, so SunEdison fired them, replaced them with more pliable directors, and pushed the deal through. There are lawsuits. “TerraForm now says its independent directors were misled about the India deal, and that SunEdison officials never mentioned the margin loan or the reluctance of the previous committee.” That is not the only oddity; for instance, there was the time that an investor “presentation told investors SunEdison had $1.4 billion in cash,” while “the same day, a report circulated to top executives showed $90 million in available cash.” SunEdison’s investigation into itself found some “‘wrongdoing’ by a former nonexecutive employee and an ‘overly optimistic’ culture fostered by management.” Elsewhere in once high-flying hedge-fund favorites, “Valeant Pharmaceuticals International Inc.
has brought in investment banksto review its options amid interest from buyout firms and other companies in a number of its businesses.”
Market structure
Here’s Federal Reserve Governor Lael Brainard on “the use of distributed ledger technologies in payment, clearing and settlement,” arguing that the blockchain will probably come sooner to areas with alreadyantiquated settlement mechanisms (syndicated loans, private company shares) than to areas that are already computerized and centrally cleared (public equities, Treasuries): As a practical matter, the largescale adoption of wholly new clearing technologies to replace existing legacy technologies for major markets may face a significant hurdle initially, such that incremental change or delayed adoption until the technology has achieved greater maturity and standardization may be more likely. At the other end of the spectrum, there appear to be some markets or segments where clearing practices are relatively cumbersome and outmoded, and the network hurdles to the adoption of new technologies are lower. Improvements in smaller markets would also provide an opportunity for market participants to gain operational and business experience with distributed ledger technologies that could help inform and strengthen the case for broader applications over time. Elsewhere: “Banks begin blockchain-payment integration.” And here is a comment letter from the FIA Principal Traders Group arguing against the Securities and Exchange Commission’s proposal to allow stock exchanges (like, one day, IEX), to delay for up to 1 millisecond before executing orders. And: “Bats IPO Raises $253 Million After Pricing at High End.” But now it has to trade. People are worried about unicorns. Here is Dan Primack questioning Yale’s claim that its endowment’s “venture capital program has earned an outstanding 92.7 percent per annum” over 20 years: For instance, if Yale had $1 billion in venture capital investments two decades ago—which is my educated guess of what it may have had, based on an overall private-equity portfolio of $2.5 billion at the time—and just that portion of its fund had compounded annually at that rate, it would mean Yale’s VC portfolio alone would be worth $498 trillion today, or roughly 6.4 times the entire world’s GDP. Unicorns are magical, but not that magical. Anyway it’s a dollar-
weighted internal rate of return, not a time-weighted compound annual growth rate. People are worried about bondmarket liquidity. One bond-market liquidity problem is fragmentation: There are so many different bonds—sometimes dozens or hundreds per issuer, versus just one stock—that it’s less likely that a buyer will want to buy and a seller will want to sell the same bond at the same time. One possible solution is an electronic-trading platform that gets every potential buyer and seller in one place, instead of relying on opaque informal networks of dealers, making phone calls and taking inventory risk to match up buyers and sellers. Electronification doesn’t exactly solve the problem, but at least if you do have a buyer and seller of the same bond at the same time, they can find each other efficiently. Except that everyone had the same idea at the same time, and “the bond market now has 99 electronic platforms to facilitate fixed-income trading from London to New York and Singapore, according to technology consultancy Alignment Systems.” That seems to reproduce the fragmentation problem in platforms as well as in bonds. Meanwhile, “more than a quarter of US bond money is now in passive funds,” and “we are seeing a structural shift toward awareness, understanding and adoption of fixed income ETFs [exchange-traded funds]” are another solution to the liquidity problem—one portfolio manager says that “if we want to make a quick move in or out it is more efficient for us to take that exposure with an ETF” than to buy illiquid bonds—that some people think are also a cause of it: “Some even argue bond ETFs are dangerous, offering the illusion of liquidity, while tracking debt instruments that may only trade occasionally.” But there might be bigger bond market worries than liquidity. For instance, there is “Duration Risk: The Bomb Ticking Inside Today’s Bond Market,” and I hope someone is working on an action movie called “Duration.” (Sample dialogue: “We must defease this 100-year bond before the Fed raises rates!” “Cut the blue wire maybe?”) Or there is regular old default risk: “Defaults for US high-yield bonds have topped $14 billion in April—the largest monthly volume in two years, according to Fitch Ratings—and the month isn’t even half over,” and”debt investors’ outlook for corporate-credit defaults is the most negative in almost seven years on weakening global.” On the other hand, maybe insolvency is good?
2nd Front Page BusinessMirror
A12 Wednesday, April 20, 2016
www.businessmirror.com.ph
DENR pushes forest certification to boost competitiveness of domestic wood industry
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By Jonathan L. Mayuga
@jonlmayuga
he Department of Environment and Natural Resources (DENR), through the Forest Management Bureau (FMB), is pushing for forest certification to boost the country’s wood industry, and prepare various stakeholders for a more competitive arena in the global market.
FMB Director Ricardo Calderon, the country’s top forestry official, said the country’s wood industry needs to catch up with other neighbors in Southeast Asia, especially with the onset of the Asean economic integration, and compete with other countries in the world market. Calderon said various stakeholders have been consulted in the crafting of a draft executive order (EO) on forest certification. The EO now awaits the final approval of Environment Secret a r y R a mon J. P. Paje a nd President Aquino. In August 2013 the DENR facilitated the formulation of policy guidelines and mechanism on national forest certification. A series of consultations was held to come up with a draft EO on forest certification, including the national standards for forestmanagement certification. Calderon said the draft EO was subjected to regional and
nationa l consu ltations, w it h representatives from people’s organizations, wood and furniture industries, and non-governmental organizations (NGOs). Other government agencies also took part in the consultation process. The EO highlights the procedures, composition, rules and m a n agement of est abl ish i ng a national forest-certification system, or the Philippine Forest Plantation Certification System (PFPCS), and provides for the establishment of a Philippine Forest Plantation Certification Council (PFPCC), which shall function as an advisory council to the national governing body (NGB). The PFPCC shall create the NGB, which shall serve as the chief governing body of the PFPCS. A forest certification is a marketbased mechanism that promotes good practices in forest management and forest-product utilization. It is considered a nonregulatory-conservation and -protection
approach, while practicing sustainable utilization of forest resources, according to the FMB. Forest certification, according to Calderon, supports responsible forest management and utilization through an independent viable compliance. “Other countries already have forest certification. We need to have our own to be more competitive, especially with the Asean [Association of Southeast Asian Nations] economic integration,” he said. Calderon added that forest certification communicates a significant positive image of proper forest management to the public through informed decisions in ethical, low-carbon and sustainable procurement and other business practices. “With the global effort to fight climate change, many countries want to buy wood and wood products that are certified as legally harvested,” Calderon said. President Aquino signed EOs 23 and 26, which banned the harvesting of timber in natural and residual forests and established the National Greening Program (NGP), respectively. The NGP aims to plant 1.5 billion trees in 1.5 million hectares of land by 2016. Last year Mr. Aquino, likew ise, sig ned EO 193, expanding the coverage of the NGP to cover the 7.1million-hectare remaining degraded forest until 2028. The massive reforestation is being eyed to boost the wood industry, particularly for manufactured wood articles, which is giving hope to the DENR-FMB in increasing forestry’s contribution
to the GDP. According to the Food and Agriculture Organization of the United Nations, the country’s forestry sector as a contributor to GDP has declined significantly from 12 percent in 1980 to less than 1 percent in 1994. Still facing an uphill climb, the country’s wood industry expressed support behind the push for forest certification. While the industry, represented by the Philippine Wood Producers’ Association (PWPA), is pinning its hope on a more stable policy environment that will revive the “dying industry” that will ensure sustainable forest management, it believes that forest certification will benefit the wood industry, in general. PWPA is the national association of corporations, partnerships and individuals involved in forest management, logging, forest-plantation development, manufacture of lumber, veneer and plywood, pulp and paper and other wood products, as well as in trading, shipping and sales of these products. Maila Vasquez, executive director of PWPA, said forest certification will put into a higher level the wood and wood-based products industry. “This certification will assure that the wood used came from a legal source and a sustainably managed forest,” she said. PWPA sits as a member of the NGB, which crafted the draft EO on forest certification. “Wood certification has been existing since the 1990s. We follow the market-driven trend. Our neighboring countries have a
policy that they will not accept wood products if they are not certified,” Vasquez added. While she said some countries are not as strict as others in requiring wood certification, the impact of climate change and the clamor for sustainable forest management could prompt most countries to adopt similar polices. “ T he industr y is evolv ing because of climate-change issues. This is one way of contributing to the global effort to mitigate the effects of climate change. “Wood is the best solution to climate change. Unless it is burned, it will not release carbon into the atmosphere,” she said. Vasquez added that aside from a steady supply of wood, a stable policy environment is needed for the country’s wood industr y to recover from the decades-old slump as a result of massive deforestation. “What we really need is a stable policy. I am not saying the industry is dying, but we are fighting for survival,” Vasquez said. Vasquez added that the group continues to promote the use of wood being a renewable source of materials for construction and furniture, and as a way of increasing the country’s carbon-
absorption capacity. “If you plant a tree, it absorbs carbon dioxide. The tree releases oxygen, while the carbon is retained in the wood. “If the tree grows and its marginal utility is reached, the trees are cut, but the carbon remains in the wood. The wood captures carbon and it will stay there, unless it is burned,” Vasquez said. She said the push for the massive reforestation and cultivation of forest plantation will boost the revival of the wood industry, noting the need for sustainable supply for its many uses. “There are many challenges. But the industry is not dead. Wood remains as the best construction material. We are encouraging members, because there is a future in forestry. The challenge is huge but we need to move forward,” she said. According to Vasquez, there is a need for stability in terms of policy. She said the industry supports the passage of the Sustainable Forest Management Act, which has been pending in Congress for more than two decades. “This could provide a road map and stability to the forestry sector. Every industry needs a road map,” she said.
Other countries already have forest certification. We need to have our own to be more competitive, especially with the Asean economic integration.”—Calderon
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EASTERLIES AFFECTING EASTERN SECTION OF THE COUNTRY (APRIL 19, 5:00 PM)
fitness and training lifestyle. The who’s who of the local show business scene and the Philippine sports industry took part in the Test of Will’s Manila national heat, including veteran actor and triathlete Piolo Pascual; matinee host and MMA athlete Luis Manzano; PBA Superstar Asi Taulava; celebrityturned-fitness guru Bubbles Paraiso; PBA professional player Jervy Cruz; performance enhancement specialist; head coach of Olympics Philippine Team Jim Saret; Biggest Loser Metabeats Fitness host and featured trainer Coach Toni Saret; two times MVP National Swimmer Johan Aguilar; MMA legend Erwin Tagle; and Walt Steven Young, UA athlete and cofounder of Crossfit Insurrecto, who is also the head judge of the Test of Will Challenge. Pushing the outer limits of strength and endurance, contestants competed in a four-minute intense contest and must complete 60 seconds of four exercises, such as burpees, squats, dumbbell presses and pull-ups. Noelle Wenceslao topped the competition and the female category with 243 total reps, while Derrick Carlo Mercado triumphantly had his hand raised in the male bracket with 164. Each participating country in the first-ever Test of Will will have a representative of two men and two women in the final round, which is scheduled to happen at the extravagant Gardens by the Bay in Singapore on May 28. Sixteen competitors will go headto-head inside the highly touted structure known as The Tower, which contains different fitness zones with calisthenic exercises. Under Armour will announce the four Filipino delegates in the finals via @underarmourph on Instagram and Twitter, and on Facebook at www.facebook.com/underarmoursea.